ENFINITY CORP, S-1/A, 1998-07-14

ENFINITY CORP
S-1/A, 1998-07-14
CONSTRUCTION - SPECIAL TRADE CONTRACTORS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1998
REGISTRATION NO. 333-52671

________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

ENFINITY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

------------------------

<TABLE>
<S> <C> <C>
DELAWARE 1711 59-3475197
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

400 LAKE RIDGE DRIVE
SMYRNA, GEORGIA 30082
(770) 431-1470
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

------------------------

RODNEY C. GILBERT
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ENFINITY CORPORATION
400 LAKE RIDGE DRIVE
SMYRNA, GEORGIA 30082
(770) 431-1470
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

------------------------

COPIES TO:

<TABLE>
<S> <C>
CHRISTOPHER T. JENSEN, ESQ. NEIL GOLD, ESQ.
MORGAN, LEWIS & BOCKIUS LLP FULBRIGHT & JAWORSKI L.L.P.
101 PARK AVENUE 666 FIFTH AVENUE
NEW YORK, NEW YORK 10178 NEW YORK, NEW YORK 10103
(212) 309-6000 (212) 318-3000
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

________________________________________________________________________________

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

SUBJECT TO COMPLETION, DATED JULY 14, 1998

8,000,000 SHARES
[LOGO]

COMMON STOCK

All of the shares of Common Stock offered hereby are being sold by Enfinity
Corporation (the 'Company').

Prior to this Offering, there has been no public market for the Common
Stock of the Company. It is currently estimated that the initial public offering
price of the Common Stock will be between $12.50 and $14.50 per share. See
'Underwriting' for a discussion of the factors to be considered in determining
the initial public offering price. The Common Stock has been approved for
listing on the New York Stock Exchange under the symbol 'BTU,' subject to
official notice of issuance.

SEE 'RISK FACTORS' COMMENCING ON PAGE 10 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discount(1) Company(2)
<S> <C> <C> <C>
Per Share...................................................... $ $ $
Total(3)....................................................... $ $ $
</TABLE>

(1) See 'Underwriting' for information concerning indemnification of the
Underwriters and other matters.

(2) Before deducting expenses payable by the Company, estimated at $4,000,000.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 1,200,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise this option in full,
the total Price to Public, Underwriting Discount and Proceeds to Company
will be $ , $ and $ , respectively. See
'Underwriting.'

The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that delivery of the
certificates representing such shares will be made against payment therefor at
the office of NationsBanc Montgomery Securities LLC on or about , 1998.

------------------------
NationsBanc Montgomery Securities LLC
Lehman Brothers
Raymond James & Associates, Inc.

, 1998

<PAGE>

[PICTURES AND GRAPHICS SHOWING REVENUE GROWTH, REVENUE BREAKDOWN,
REPRESENTATIVE MARKETS SERVED AND REPRESENTATIVE PROJECTS. MAP SHOWING LOCATION
OF FOUNDING COMPANIES.]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE 'UNDERWRITING.'

<PAGE>

PROSPECTUS SUMMARY

Simultaneously with and as a condition to the closing of this Offering,
Enfinity Corporation will acquire, in separate transactions (the 'Mergers') in
exchange for cash and shares of its Common Stock, all of the common stock of and
ownership interests in eight energy and indoor environmental systems and
services companies (each, a 'Founding Company' and, collectively, the 'Founding
Companies'). Unless otherwise indicated, all references to the 'Company' herein
include the Founding Companies, and references to 'Enfinity' mean Enfinity
Corporation prior to the consummation of the Mergers. For more information about
the Mergers, see 'Certain Transactions.'

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements and
related notes thereto appearing elsewhere in this Prospectus. Unless otherwise
indicated, all share, per share and financial information in this Prospectus:
(i) has been adjusted to give effect to the Mergers; (ii) assumes no exercise of
the Underwriters' over-allotment option; (iii) gives effect to a 36,804.93-for-1
stock split effected in the form of a stock dividend on July 9, 1998; and (iv)
assumes an initial public offering price per share of $13.50. See 'Description
of Capital Stock.'

THE COMPANY

Enfinity was formed by the Founding Companies to become the premier
provider of energy and indoor environmental systems and services to commercial,
industrial and institutional clients. The Company provides a broad range of
services throughout the life cycle of a client's energy and indoor environmental
systems, including: (i) maintenance, repair and replacement; (ii) design,
engineering and installation; and (iii) on-site and off-site management of
building systems, including control and monitoring systems.

Seven of the eight Founding Companies have worked together in industry peer
groups for over 10 years. All of the Founding Companies are 'best-of-class'
service providers with specialized and complementary expertise and have been
recognized by industry organizations for their high quality service and
innovative client solutions. Six of the eight Founding Companies have been named
'Commercial Contractor of the Year,' an award presented annually by Contracting
Business magazine to the most progressive and professional organization in the
commercial heating, ventilation and air-conditioning ('HVAC') business. The
Company has established strategic partnerships with several energy providers and
financial institutions as a means to provide innovative and cost effective
energy and indoor environmental solutions to its clients. The Founding Companies
had combined revenues of $364.8 million for fiscal year 1997, representing a
compound annual growth rate of 21.9% from fiscal year 1995.

The commercial, industrial and institutional HVAC and related services
industry is large, growing and highly fragmented. In 1996, over 10,000 companies
provided over $35 billion in commercial, industrial and institutional HVAC
services. Factors fueling the growth of the industry include: (i) an increasing
focus on air quality and internal environmental control in a growing number of
sealed commercial buildings; (ii) the aging of the installed base of energy and
indoor environmental systems, which has increased the demand for maintenance,
repair and replacement services; (iii) the increasing automation, sophistication
and complexity of energy and indoor environmental systems; (iv) government
restrictions on the use of refrigerants commonly used in older energy and indoor
environmental systems; (v) a desire by companies to outsource their energy and
indoor environmental services as they focus on their core competencies; and (vi)
an increasing focus by companies on managing costs and achieving energy savings
by replacing less efficient systems.

An important factor affecting the energy and environmental services
industry is the deregulation of the U.S. gas and electric utility industries. As
these industries become further deregulated, the Company

<PAGE>

anticipates that utilities and other energy providers will continue to establish
strategic partnerships with providers of energy and indoor environmental systems
and services in order to attract utility customers in an increasingly
competitive market. These partnerships offer customers a broad range of services
and utilities on a variable cost per unit basis without the need for customers
to make significant capital expenditures on energy and indoor environmental
systems. The Company believes that these strategic partnerships will decrease
energy costs and improve marketing and customer service, resulting in increased
demand for energy and indoor environmental systems and services.

The Company's goal is to create the leading national provider of energy and
indoor environmental systems and services for commercial, industrial and
institutional clients. In order to achieve this goal, the Company's business
strategy is focused on the following key principles: (i) creating a single
source provider of energy and indoor environmental systems and services; (ii)
leveraging Founding Company engineering and technical expertise; (iii) focusing
on high quality client service; (iv) attracting, training and retaining highly
qualified technicians and engineers; and (v) operating with a decentralized
management strategy.

INTERNAL GROWTH STRATEGY. While the Company intends to acquire additional
energy and indoor environmental systems and services companies, strong internal
growth remains the foundation of the Company's growth strategy. The Company
believes it will be able to increase its revenues from existing clients by
taking advantage of cross-selling opportunities among the Founding Companies and
other acquired companies. Through interaction at industry peer group meetings
and their reputations as 'best-of-class' service providers, certain of the
Founding Companies have already begun to leverage their client relationships by
recommending each other for significant business opportunities. The Company also
believes that it can produce strong internal growth by expanding market coverage
to provide energy and indoor environmental systems and services on a regional
and national basis and achieving operating efficiencies through best practices
and economies of scale.

STRATEGIC PARTNERSHIPS. The Company will seek to form additional strategic
relationships with energy providers and financial institutions to satisfy the
full range of a client's energy and indoor environmental systems needs. For
example, the Company and its strategic partners may: (i) provide a client with
gas, electrical power, cooled air or water, heat or lighting; (ii) design,
install and maintain the client's energy and indoor environmental systems; (iii)
operate central energy plants; (iv) provide financing for the design,
engineering and installation of new energy and environmental systems; and (v)
monitor the indoor air quality of the client's facility. The Company anticipates
that these partnerships will result in lower energy costs and greater client
satisfaction as a client's full range of energy and indoor environmental systems
and services needs are provided and paid for through a single source. By
creating an attractive alternative to the traditional means of satisfying a
client's needs, the Company believes that strategic partnerships will provide
the Company with an advantage over many of its competitors, additional business
opportunities and increased revenues.

GROWTH THROUGH ACQUISITIONS. The Company intends to capitalize on the
highly fragmented nature of the energy and indoor environmental systems and
services industry by implementing a strategic acquisition program following this
Offering. The Company will seek to acquire companies that are 'best-of-class'
local or regional providers of energy and indoor environmental systems and
services. In order to identify 'best-of-class' providers, the Company will look
for, among other things, companies that: (i) have annual revenues of at least $8
million and a strong history of internal growth; (ii) have core competencies
that complement or add to the Company's services; (iii) have a reputation for
high levels of client service; and (iv) are constantly seeking new ways to
improve their business. The Company believes that 'best-of-class' companies
demonstrate the foregoing characteristics and each is generally a premier
provider of energy and indoor environmental systems and services in the market
it serves. Together with the Founding Companies, such acquisition targets will
expand the Company's geographic presence and serve as platforms for further
growth and consolidation and will have the client base, technical skills and
infrastructure necessary to be a core business into which other companies can be
consolidated. The Company also will attempt to leverage the existing
infrastructure by pursuing 'tuck-in' acquisitions of smaller companies whose
operations can be integrated into a platform

<PAGE>

company. In addition, the Company will selectively seek to acquire other
well-established businesses that provide services complementary to those
provided by the Company in order to expand its market penetration and range of
services offered.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company............................ 8,000,000 shares
Common Stock to be outstanding after this Offering............. 17,345,452 shares(1)
Use of proceeds................................................ To pay the cash portion of the purchase price
for the Founding Companies, to repay certain
indebtedness of the Founding Companies, to pay
certain other amounts provided for under the
agreements relating to the Mergers and for
working capital and other general corporate
purposes, including future acquisitions.(2)
Proposed New York Stock Exchange symbol........................ BTU
</TABLE>

- ------------

(1) Includes 8,243,971 shares of Common Stock to be issued in connection with
the Mergers at a value per share of $10.80 due to restrictions on
transferability, but excludes 2,341,635 shares of Common Stock reserved for
issuance pursuant to the Company's 1998 Long-Term Incentive Plan, of which
options to purchase 1,760,883 shares will be granted by the Company
concurrently with the consummation of the Mergers and this Offering. See
'Management -- 1998 Long-Term Incentive Plan,' 'Certain
Transactions -- Organization of the Company' and 'Shares Eligible for Future
Sale.'

(2) Includes approximately $79.6 million (subject to adjustment) to be used to
pay the cash portion of the purchase price for the Founding Companies;
approximately $6.3 million to be used to pay indebtedness, accrued expenses
and other liabilities assumed in connection with the Mergers; and
approximately $8.0 million to be used to pay S Corporation distributions, to
redeem preferred stock of one of the Founding Companies and to pay certain
amounts representing excess working capital as provided in the agreements
relating to the Mergers ('Excess Working Capital'). See 'Use of Proceeds.'
In connection with the Mergers, the Company will record goodwill of
approximately $116.0 million to be amortized over a period of 40 years.

RISK FACTORS

The Common Stock offered hereby involves a high degree of risk. The risks
include, among others, the absence of combined operating history, the Company's
ability to acquire and integrate the operations of additional energy and indoor
environmental systems and services companies, the possible effects of
deregulation, the competitive nature of the energy and indoor environmental
systems and services industry, the impact of general economic conditions, the
Company's ability to attract and retain qualified engineers and technicians and
the material amount of intangible assets. See 'Risk Factors.'

<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Enfinity will acquire the Founding Companies simultaneously with and as a
condition to the consummation of this Offering. For financial statement
presentation purposes, Brandt Mechanical Services, Inc. ('Brandt'), one of the
Founding Companies, has been identified as the accounting acquiror. The
following unaudited summary pro forma combined financial data present certain
data for the Company, as adjusted for: (i) the consummation of the Mergers; (ii)
certain pro forma adjustments to the historical financial statements; and (iii)
the consummation of this Offering and the application of the net proceeds
therefrom. The Summary Pro Forma Combined Statement of Operations Data and
Summary Pro Forma Combined Balance Sheet Data should be read in conjunction with
the Unaudited Pro Forma Combined Financial Statements and the notes thereto and
the historical financial statements of the Founding Companies and the notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA COMBINED
--------------------------------------
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------------
1997 1997 1998
------------ ------- --------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................................................ $364,767 $69,133 $103,650
Cost of revenues........................................................ 293,749 53,096 83,956
------------ ------- --------
Gross profit....................................................... 71,018 16,037 19,694
Selling, general and administrative expenses............................ 48,399 11,272 12,598
Employee stock compensation (non-recurring)............................. 795 -- 1,816
Amortization of goodwill, net........................................... 2,270 568 568
------------ ------- --------
Income from operations............................................. 19,554 4,197 4,712
Other expense, net...................................................... 821 35 368
------------ ------- --------
Income before provision for income taxes................................ 18,733 4,162 4,344
Provision for income taxes......................................... 8,401 1,892 1,965
------------ ------- --------
Net income.............................................................. $ 10,332 $ 2,270 $ 2,379
------------ ------- --------
------------ ------- --------
Net income per share, basic and diluted................................. $ 0.60 $ 0.13 $ 0.14
------------ ------- --------
------------ ------- --------
Shares used in computing pro forma
basic net income per share............................................ 17,141,917 17,141,917 17,141,917
Shares used in computing pro forma
diluted net income per share.......................................... 17,187,238 17,187,238 17,187,238
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1998
---------------------
PRO FORMA AS
COMBINED ADJUSTED
--------- --------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................................................................ $(58,783) $ 32,564
Total assets............................................................................. 243,610 246,165
Total long-term debt, net of current portion............................................. 11,690 6,965
Stockholders' equity..................................................................... 65,435 161,875
</TABLE>

See the footnotes to 'Selected Financial Data' on page 22 for further
information about the assumptions used in the above data.

<PAGE>

SUMMARY INDIVIDUAL FOUNDING COMPANY FINANCIAL DATA
(IN THOUSANDS)

The following table presents summary operating data for each of the
Founding Companies (see 'The Company' for the complete names of each Founding
Company) on an historical basis for the periods indicated.

<TABLE>
<CAPTION>
THREE MONTH
INTERIM
FISCAL YEARS ENDED(1)(2) PERIODS ENDED(3)
----------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
BRANDT(4):
Revenues.............................................. $15,869 $38,723 $50,435 $ 7,547 $15,326
Cost of revenues...................................... 13,170 31,932 42,032 5,875 12,901
------- ------- ------- ------- -------
Gross profit.......................................... 2,699 6,791 8,403 1,672 2,425
Selling, general and administrative expenses.......... 2,191 6,128 4,651 1,032 1,300
------- ------- ------- ------- -------
Income from operations................................ $ 508 $ 663 $ 3,752 $ 640 $ 1,125
------- ------- ------- ------- -------
------- ------- ------- ------- -------

AIR SYSTEMS:
Revenues.............................................. $37,463 $55,528 $90,969 $13,180 $31,048
Cost of revenues...................................... 29,527 44,098 75,149 9,651 26,355
------- ------- ------- ------- -------
Gross profit.......................................... 7,936 11,430 15,820 3,529 4,693
Selling, general and administrative expenses.......... 6,449 8,232 11,370 2,492 2,629
------- ------- ------- ------- -------
Income from operations................................ $ 1,487 $ 3,198 $ 4,450 $ 1,037 $ 2,064
------- ------- ------- ------- -------
------- ------- ------- ------- -------

ENERGY SYSTEMS:
Revenues.............................................. $44,177 $48,069 $54,228 $11,265 $15,085
Cost of revenues...................................... 36,498 40,299 45,893 9,390 12,999
------- ------- ------- ------- -------
Gross profit.......................................... 7,679 7,770 8,335 1,875 2,086
Selling, general and administrative expenses.......... 6,537 6,948 6,869 1,728 1,715
Employee stock compensation (non-recurring)........... -- -- -- -- 1,816
------- ------- ------- ------- -------
Income (loss) from operations......................... $ 1,142 $ 822 $ 1,466 $ 147 $(1,445)
------- ------- ------- ------- -------
------- ------- ------- ------- -------

NEMSI:
Revenues.............................................. $22,467 $30,457 $39,357 $ 8,349 $ 7,812
Cost of revenues...................................... 17,129 23,407 31,217 6,213 5,759
------- ------- ------- ------- -------
Gross profit.......................................... 5,338 7,050 8,140 2,136 2,053
Selling, general and administrative expenses.......... 4,617 5,448 6,502 1,314 1,557
Employee stock compensation (non-recurring)........... -- -- 795 -- --
------- ------- ------- ------- -------
Income from operations................................ $ 721 $ 1,602 $ 843 $ 822 $ 496
------- ------- ------- ------- -------
------- ------- ------- ------- -------

LEE:
Revenues.............................................. $35,475 $34,639 $39,681 $ 6,682 $12,806
Cost of revenues...................................... 28,154 26,541 30,316 4,914 9,416
------- ------- ------- ------- -------
Gross profit.......................................... 7,321 8,098 9,365 1,768 3,390
Selling, general and administrative expenses.......... 6,006 6,663 7,325 1,328 1,888
------- ------- ------- ------- -------
Income from operations................................ $ 1,315 $ 1,435 $ 2,040 $ 440 $ 1,502
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>

(table continued on next page)

<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
THREE MONTH
INTERIM
FISCAL YEARS ENDED(1)(2) PERIODS ENDED(3)
----------------------------- ----------------
1995 1996 1997 1997 1998
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
HILL YORK:
Revenues................................................ $28,667 $31,430 $34,170 $8,307 $9,126
Cost of revenues........................................ 22,526 24,121 26,551 6,118 7,084
------- ------- ------- ------ ------
Gross profit............................................ 6,141 7,309 7,619 2,189 2,042
Selling, general and administrative expenses............ 5,758 6,992 7,089 2,007 1,846
------- ------- ------- ------ ------
Income from operations.................................. $ 383 $ 317 $ 530 $ 182 $ 196
------- ------- ------- ------ ------
------- ------- ------- ------ ------
MECHANICAL SERVICES:
Revenues................................................ $24,938 $28,549 $28,279 $7,378 $5,567
Cost of revenues........................................ 21,884 25,121 24,511 6,611 4,928
------- ------- ------- ------ ------
Gross profit............................................ 3,054 3,428 3,768 767 639
Selling, general and administrative expenses............ 2,053 2,298 2,530 640 510
------- ------- ------- ------ ------
Income from operations.................................. $ 1,001 $ 1,130 $ 1,238 $ 127 $ 129
------- ------- ------- ------ ------
------- ------- ------- ------ ------
AIRCOND:
Revenues................................................ $25,225 $26,830 $26,935 $6,425 $6,880
Cost of revenues........................................ 17,174 17,284 17,509 4,324 4,514
------- ------- ------- ------ ------
Gross profit............................................ 8,051 9,546 9,426 2,101 2,366
Selling, general and administrative expenses............ 6,273 7,487 7,731 1,846 1,917
------- ------- ------- ------ ------
Income from operations.................................. $ 1,778 $ 2,059 $ 1,695 $ 255 $ 449
------- ------- ------- ------ ------
------- ------- ------- ------ ------
</TABLE>

- ------------

(1) The fiscal years presented are as follows: Brandt, Energy Systems, NEMSI and
Lee -- the fiscal years ended December 31, 1995, 1996 and 1997; Air
Systems -- the fiscal years ended February 29, 1996 and February 28, 1997
and 1998; Hill York and Mechanical Services -- the fiscal years ended March
31, 1996 and 1997 and the fiscal year ended December 31, 1997; and
Aircond -- the fiscal years ended September 30, 1995, 1996 and 1997.

(2) Selling, general and administrative expenses for the Founding Companies for
each of the fiscal years (as defined above) in the three-year periods and
the interim periods (as defined below) presented do not include reductions
in compensation and benefits to certain of the stockholders of the Founding
Companies to which they have agreed prospectively in the employment
agreements to be entered into upon the consummation of this Offering (the
'Compensation Differential') as indicated below.

<TABLE>
<CAPTION>
THREE MONTH
INTERIM
FISCAL YEARS ENDED PERIODS ENDED(3)
-------------------------- ------------------------------------------
1995 1996 1997 1997 1998
------ ------ ------ ------------------ -----------
<S> <C> <C> <C> <C> <C>
Brandt................................. $ 404 $2,777 $ 353 $ 91 $ 81
Air Systems............................ 213 1,223 1,407 320 49
Energy Systems......................... 294 268 283 62 47
NEMSI.................................. 512 388 590 95 115
Lee.................................... 1,349 1,226 1,026 152 237
Hill York.............................. 577 1,010 968 352 273
Mechanical Services.................... 170 293 312 92 36
Aircond................................ 414 437 1,132 14 18
------ ------ ------ ------- ------
Total............................. $3,933 $7,622 $6,071 $1,178 $856
------ ------ ------ ------- ------
------ ------ ------ ------- ------
</TABLE>

(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)

(3) The interim periods presented are as follows: Brandt, Energy Systems, NEMSI,
Lee, Hill York, Mechanical Services and Aircond -- the three months ended
March 31, 1997 and 1998; Air Systems -- the three months ended May 31, 1997
and 1998.

(4) In May 1995, management of Brandt purchased all issued and outstanding
common stock from Brandt's former parent. Accordingly, financial information
is presented for periods subsequent to the date of this purchase. The 1995
results reflect the period from May 25 to December 31, 1995.

<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered by this Prospectus
involves a high degree of risk. In addition to the other information in this
Prospectus, the following risk factors should be considered carefully in
evaluating an investment in the Common Stock.

ABSENCE OF COMBINED OPERATING HISTORY; RISKS OF INTEGRATION

Enfinity was founded in 1997 and has conducted no operations and generated
no revenues to date. Enfinity has entered into agreements to acquire the
Founding Companies simultaneously with and as a condition to the consummation of
this Offering. Prior to the consummation of this Offering, the Founding
Companies have operated as independent entities. Currently, the Company has no
centralized financial reporting system and initially will rely on the existing
reporting systems of the Founding Companies. There can be no assurance that the
Company will be able to successfully integrate the operations of these
businesses or institute the necessary Company-wide systems and procedures to
successfully manage the combined enterprise on a profitable basis. The Company's
management group has been assembled only recently, and there can be no assurance
that the management group will be able to effectively manage the combined entity
or effectively implement the Company's internal growth strategy and acquisition
program. The combined financial statements of the Founding Companies cover
periods when the Founding Companies and Enfinity were not under common control
or management and, therefore, may not be indicative of the Company's future
financial or operating results. The inability of the Company to successfully
integrate the Founding Companies would have a material adverse effect on the
Company's business, financial condition and results of operations. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and 'Business -- Business Strategy.'

FACTORS AFFECTING INTERNAL GROWTH AND PROFITABILITY

The Founding Companies have experienced revenue and earnings growth on a
pro forma combined basis over the past few years. There can be no assurance that
the Founding Companies will continue to experience internal growth comparable to
these levels, or at all. Factors affecting the ability of the Company to
continue to experience internal growth and profitability include, but are not
limited to, demand for the Company's services and the Company's ability to
expand the scope of the services offered, maintain relationships with
significant clients, recruit and retain qualified technicians and engineers,
gain access to capital, avoid cost overruns on fixed-price contracts and
cross-sell services of the Founding Companies. See 'Business -- Growth
Strategy.'

POSSIBLE EFFECTS OF DEREGULATION OF THE U.S. GAS AND ELECTRIC UTILITY INDUSTRIES

The U.S. gas and electric utility industries have recently begun to be
deregulated on a state-by-state basis. As these industries become further
deregulated, utility companies are seeking entry into the energy and indoor
environmental systems and services industry as a method of securing utility
customers in an increasingly competitive market. Such utilities are likely to
increasingly compete with the Company for clients, strategic partners,
acquisition targets and qualified technicians and engineers. Such utility
companies may enter into partnerships or joint ventures with energy and indoor
environmental systems and services companies. If the Company is not selected as
a partner by utility companies, there could be a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
as utility companies may be better capitalized, have greater name recognition
and be able to provide services at a lower cost than the Company, the Company
may encounter a significant increase in competition in its efforts to achieve
its internal growth and acquisition objectives. See 'Business -- Competition.'

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

The Company intends to increase its revenues, expand the markets it serves
and increase its service offerings in part through the acquisition of additional
energy and indoor environmental systems and services providers. There can be no
assurance that the Company will be able to identify, acquire or profitably
manage additional businesses or successfully integrate acquired businesses into
the Company

<PAGE>

without substantial costs, delays or other operational or financial problems.
Increased competition for acquisition candidates may develop, in which event
there may be fewer acquisition opportunities available to the Company as well as
escalating acquisition prices. Further, acquisitions involve a number of special
risks, including possible adverse effects on the Company's operating results,
diversion of management's attention, failure to retain key acquired personnel,
risks associated with unanticipated events or liabilities and amortization of
acquired intangible assets, some or all of which could have a material adverse
effect on the Company's business, financial condition and results of operations.
Client dissatisfaction or performance problems at a single acquired company
could have an adverse effect on the reputation of the Company and render
ineffective any national sales and marketing initiatives undertaken by the
Company. There can be no assurance that potential acquisition targets will be
receptive to the Company's acquisition program. See 'Business -- Growth
Strategy.'

RISKS RELATED TO ACQUISITION FINANCING

The Company intends to finance future acquisitions by using shares of its
Common Stock for a substantial portion of the consideration to be paid. In the
event that its Common Stock does not maintain a sufficient market value, or
potential acquisition candidates are otherwise unwilling to accept Common Stock
as part of the consideration for the sale of their businesses, the Company may
be required to utilize more of its cash resources, if available, in order to
initiate and maintain its acquisition program. If the Company has insufficient
cash resources, its growth could be limited unless it is able to obtain
additional capital through debt or equity financings. The Company has received a
bank commitment for a revolving credit facility of up to $100.0 million.
Although such revolving credit facility is expected to be available upon the
consummation of this Offering, there can be no assurance that the Company will
be able to obtain such revolving credit facility or other financing it may need
on terms the Company deems acceptable. If the Company is unable to obtain
financing sufficient for all of its desired acquisitions, it may be unable to
implement fully its acquisition strategy. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.'

MATERIAL AMOUNT OF INTANGIBLE ASSETS

Approximately $116.0 million, or 47.1%, of the Company's as adjusted pro
forma combined total assets as of March 31, 1998 represent goodwill resulting
from the Mergers. Goodwill is an intangible asset that represents the excess of
purchase price over the fair value of the assets acquired. Generally accepted
accounting principles require that goodwill be amortized over the period
benefited. The Company has determined such period to be no less than 40 years.
Management has concluded that the anticipated future cash flows associated with
the intangible assets recognized in the Mergers will continue indefinitely, and
that there is no persuasive evidence that any material portion will dissipate
over a period shorter than 40 years. If management were not to give effect to
factors that would result in shorter benefit periods for a material portion of
the goodwill, earnings reported in periods immediately following the Mergers
would be overstated. In later years, the Company would be burdened by a
continuing charge against earnings without the associated benefit to income
valued by management in arriving at the consideration paid for the Founding
Companies. Earnings in later years could also be significantly affected if
management determined then that the remaining balance of goodwill was impaired.

The amount amortized, however, will not give rise to a deduction for tax
purposes. In addition, the Company will be required to amortize the goodwill, if
any, from any future acquisitions accounted for on the purchase method of
accounting. Under accounting rules, the Company is required to periodically
evaluate goodwill for impairment by reviewing the cash flows of acquired
companies and comparing such amounts to the carrying value of the associated
goodwill. If goodwill is impaired, the Company would be required to adjust
goodwill and incur a charge to its operating results. A reduction in operating
results resulting from the amortization or write-down of goodwill could have an
adverse impact upon the market price of the Common Stock.

MANAGEMENT OF GROWTH

The Company expects to grow internally and through strategic partnerships
and acquisitions. The Company expects to expend significant time and effort in
expanding existing businesses, in

<PAGE>

consummating strategic partnerships and in identifying, completing and
integrating acquisitions. There can be no assurance that the Company's systems,
procedures and controls will be adequate to support the Company's operations as
they expand. Any future growth also will impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate new senior level managers and executives. There
can be no assurance that such additional management will be identified and
retained by the Company. To the extent that the Company is unable to manage its
growth efficiently and effectively, or is unable to attract and retain
additional qualified management, the Company's business, financial condition and
results of operations could be materially adversely affected. See
'Business -- Growth Strategy' and 'Management.'

EXPOSURE TO DOWNTURNS IN NEW CONSTRUCTION; GENERAL ECONOMIC CONDITIONS

A substantial portion of the Company's business involves installation of
energy and indoor environmental systems in newly constructed commercial and
industrial buildings. The demand for new installation services is affected by
fluctuations in the amount of new construction of commercial and industrial
buildings in the markets in which the Company operates. Factors such as local
economic conditions and changes in interest rates can affect the amount of new
construction. Downturns in the levels of new construction could have a material
adverse effect on the Company's business, financial condition and results of
operations. General economic conditions can also cause fluctuations in demand
for the Company's services.

SEASONALITY AND QUARTERLY FLUCTUATIONS

The Company's operations are subject to seasonal variations. In certain
parts of the United States, the demand for new installations of HVAC and other
energy and indoor environmental systems can be substantially lower during the
winter months. Maintenance, repair and replacement services are subject to
seasonality as well. The Company expects that its revenues and operating results
generally will be lower in the first and fourth calendar quarters. The energy
and indoor environmental systems and services industry is also subject to
fluctuations caused by periods of inclement weather. Prolonged extreme climate
or weather conditions may cause unpredictable fluctuations in operating results.
See 'Management's Discussion and Analysis of Financial Condition and Results of
Operations.'

AVAILABILITY OF QUALIFIED ENGINEERS AND TECHNICIANS

The timely provision by the Company of high quality energy and indoor
environmental systems and services requires an adequate supply of engineers and
technicians. Accordingly, the Company's ability to increase its productivity and
profitability will be limited by its ability to employ, train and retain the
skilled engineers and technicians necessary to meet the Company's construction
and service requirements. From time to time, there are shortages of qualified
engineers and technicians, and there can be no assurance that the Company will
be able to maintain an adequate skilled labor force necessary to operate
efficiently, that the Company's labor expenses will not increase as a result of
a shortage in the supply of skilled engineers and technicians or that the
Company will not have to curtail its planned internal growth as a result of
skilled labor shortages. See 'Business -- Recruiting, Training and Retention'
and 'Business -- Employees.'

LABOR RELATIONS

At March 31, 1998, the Company had approximately 3,130 employees, of whom
approximately 1,600 were members of labor unions. Five of the eight Founding
Companies have collective bargaining agreements, which agreements expire at
various times through April 2002. The Company's inability to negotiate
acceptable contracts with these unions could result in strikes or other work
stoppages by the affected workers and increased operating costs as a result of
higher wages or benefits paid to union members. If the unionized employees were
to engage in strikes or other work stoppages, or other employees were to become
unionized, the Company could experience a significant disruption of its
operations and higher ongoing labor costs, which could have an adverse effect on
the Company's business, financial condition and results of operations. In
addition, the use by some Founding Companies of unionized employees and by other
Founding Companies of non-unionized employees may make joint ventures among the
Founding Companies more difficult or may lead to conflicts between union and
non-union employees. See 'Business -- Employees.'

<PAGE>

COMPETITION

The energy and indoor environmental systems and services industry is highly
competitive. Many of the Company's competitors are relatively small,
owner-operated private companies. The Company also competes with large HVAC
equipment manufacturers, such as Carrier Corporation, Trane Air Conditioning
Company and Honeywell Inc. In addition, the Company is increasingly encountering
competition from unregulated affiliates of public utilities which generally are
better capitalized, have greater name recognition and may be able to provide
services at a lower cost. The energy and indoor environmental systems and
services industry is currently undergoing rapid consolidation on both a national
and a regional level by other companies that have acquisition objectives similar
to the Company's objectives. These companies and other consolidators may have
greater financial resources than the Company to finance acquisition and internal
growth opportunities and might be willing to pay higher prices than the Company
for the same acquisition opportunities. Consequently, the Company may encounter
significant competition in its efforts to achieve its internal growth and
acquisition objectives. See 'Business -- Competition.'

TERMINABILITY OF CONTRACTS; CLIENT CONCENTRATION

A significant percentage of the Company's revenues is derived from
maintenance, repair and replacement services provided pursuant to service
agreements or in response to service calls. The Company's service agreements are
typically terminable by either party upon 30 to 60 days' notice and there can be
no assurance that existing clients will continue to use the Company's services
at historical levels, if at all. Further, a relatively small number of clients
accounts for a significant portion of the Company's revenues. For the year ended
December 31, 1997, one client, Devcon, accounted for approximately 12.5% of the
Company's revenues and 10 clients accounted for approximately 28.6% of the
Company's revenues. There can be no assurance that these clients will continue
to engage the Company for additional projects or do so at the same revenue
levels or that the Company will be able to obtain additional clients as large
projects are completed. See 'Business -- Clients.'

OPERATING HAZARDS

A significant portion of the Company's business consists of the assembly
and installation of energy and indoor environmental systems. This process can
cause personal injury and loss of life, severe damage to or destruction of
property and equipment and environmental damage, and may result in suspension of
operations at all or part of the facility being serviced. While the Company
maintains insurance coverage in the amounts and against the risks that it
believes are in accordance with industry practice, no assurance can be given
that this insurance will be adequate to cover all losses or liabilities the
Company may incur in its operations or that the Company will be able to maintain
insurance of the types or at levels it deems necessary or adequate or at rates
it considers reasonable.

RELIANCE ON KEY PERSONNEL

The Company's operations are dependent on the continued efforts of its
executive officers and the senior management of the Founding Companies.
Furthermore, the Company will likely be dependent on the senior management of
any businesses acquired in the future. If any of these persons becomes unable to
continue in his or her role with the Company, or if the Company is unable to
attract and retain other qualified employees, the Company's business, financial
condition and results of operations could be materially and adversely affected.
Although the Company or an individual Founding Company will enter into an
employment agreement with at least one member of senior management of each of
the Founding Companies which will include confidentiality and non-compete
provisions, there can be no assurance that any individual will continue in his
or her present capacity with the Company or such Founding Company for any
particular period of time.

RISKS OF YEAR 2000 NONCOMPLIANCE

A significant percentage of the software that runs most of the computers
worldwide relies on two-digit codes to reflect the last two digits of a year in
performing computations and decision-making functions. Commencing on January 1,
2000, these computer programs may fail due to the inability to

<PAGE>

interpret date codes properly, for example, misinterpreting '00' as the year
1900 rather than 2000. Certain of the Founding Companies' computer programs are
currently partially year 2000 noncompliant. The costs of updating such programs
are not expected to be material, but there can be no assurance that such
conversion programs will be successful at the expected cost. The Company
utilizes in its internal operations a number of computer software programs,
including programs used to manage the Company's financial, accounting, sales and
marketing activities. The inability of such programs to interpret properly data
relating to the year 2000 and beyond could have a material adverse effect on the
Company's business, financial condition and results of operations.

RISKS ASSOCIATED WITH GOVERNMENT REGULATION

Energy and indoor environmental systems are subject to various
environmental statutes and regulations, including the Clean Air Act, as amended
(the 'Clean Air Act') and those regulating the production, servicing and
disposal of certain ozone-depleting refrigerants used in such systems. There can
be no assurance that the regulatory environment in which the Company operates
will not change significantly in the future. Various federal, state and local
laws and regulations impose licensing standards on technicians who install and
service energy and indoor environmental systems. The Company's failure to comply
with these laws and regulations could subject it to substantial fines and the
loss of its licenses. See 'Business -- Governmental Regulation and Environmental
Matters.'

CONTROL BY EXISTING MANAGEMENT AND STOCKHOLDERS

Following the completion of the Mergers and this Offering, the executive
officers and directors of the Company, consultants to Enfinity and the former
stockholders of the Founding Companies will beneficially own 53.9% of the
outstanding shares of Common Stock (50.4% if the Underwriters' over-allotment
option is exercised in full). These persons, if acting in concert, will be able
to continue to exercise control over the Company's affairs, to elect the entire
Board of Directors and to control the
disposition of any matter submitted to a vote of stockholders. See 'Principal
Stockholders.'

SUBSTANTIAL PROCEEDS OF OFFERING PAYABLE TO AFFILIATES

Approximately $79.6 million, or approximately 79.2%, of the net proceeds of
this Offering will be paid as the cash portion of the purchase price for the
Founding Companies, approximately $54.6 million of which will be paid either to
stockholders of the Founding Companies who will become directors, officers, key
employees or holders of more than 5% of the Common Stock or to trusts for which
they act as trustees. Certain of the Founding Companies have incurred an
aggregate of $3.7 million of indebtedness that is personally guaranteed by their
principal stockholders and will be repaid from the net proceeds of this
Offering.

POTENTIAL ADVERSE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON
STOCK

The market price of the Common Stock may be adversely affected by the sale,
or availability for sale, of substantial amounts of the Common Stock in the
public market following this Offering. The 8,000,000 shares being sold in this
Offering will be freely tradable unless acquired by affiliates of the Company.

Upon the completion of this Offering, the holders of Common Stock who did
not purchase shares in this Offering will own 9,345,452 shares of Common Stock,
including: (i) the stockholders of the Founding Companies who will receive, in
the aggregate, 8,243,971 shares in connection with the Mergers; and (ii) the
management of and the consultants to Enfinity, who own 1,101,481 shares. These
shares have not been registered under the Securities Act of 1933, as amended
(the 'Securities Act'), and, therefore, may not be sold unless registered under
the Securities Act or sold pursuant to an exemption from registration, such as
the exemption provided by Rule 144. Furthermore, the stockholders who will
receive these shares have agreed with the Company to certain restrictions on the
sale, transfer or other disposition of these shares following the consummation
of this Offering. Such transfer restrictions will end: (i) as to 50% of the
shares, two years after the consummation of this Offering; (ii) as to the next
25% of the shares, 30 months after the consummation of this Offering; and (iii)
as to the remaining 25% of these shares, three years after the consummation of
this Offering. In addition, the Company has agreed to enforce on behalf of
NationsBanc Montgomery Securities LLC such transfer restrictions for a period of
180 days after the date of this Prospectus. The stockholders

<PAGE>

who will receive these shares have certain demand registration rights commencing
three years after the consummation of this Offering and piggyback registration
rights commencing immediately upon the consummation of this Offering, subject to
certain exceptions.

In addition, the Company, all of its officers and directors and the holders
of all shares of Common Stock outstanding prior to this Offering have agreed not
to offer, sell, contract to sell or otherwise dispose of any shares of Common
Stock, or any securities convertible into or exercisable or exchangeable for
Common Stock, for a period of 180 days after the date of this Prospectus without
the prior written consent of NationsBanc Montgomery Securities LLC except for,
in the case of the Company, Common Stock issued pursuant to the Company's 1998
Long-Term Incentive Plan or in connection with acquisitions.

The Company plans to register an additional 5,000,000 shares of Common
Stock under the Securities Act within 90 days after completion of this Offering
for use by the Company as consideration for future acquisitions. Upon such
registration, these shares generally will be freely tradable after issuance,
unless the resale thereof is contractually restricted or unless the holders
thereof are subject to the restrictions on resale provided in Rule 145 under the
Securities Act. The contemplated offering of such 5,000,000 additional shares
will be made only by means of a prospectus. The registration rights described
above will not apply to the registration statement to be filed with respect to
these 5,000,000 shares. See 'Shares Eligible for Future Sale' and
'Underwriting.'

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this Offering, there has been no public market for the Common
Stock and there can be no assurance that an active trading market will develop
and continue subsequent to this Offering or that the market price of the Common
Stock will not decline below the initial public offering price. The initial
public offering price for the Common Stock will be determined by negotiation
between the Company and the Representatives of the Underwriters and may bear no
relationship to the price at which the Common Stock will trade after this
Offering. See 'Underwriting' for the factors to be considered in determining the
initial public offering price. After this Offering, the market price of the
Common Stock may be subject to significant fluctuations in response to numerous
factors, including variations in the annual or quarterly financial results of
the Company or its competitors, changes by financial research analysts in their
estimates of the earnings of the Company or the failure of the Company to meet
such estimates, conditions in the economy in general or in the Company's
industry in particular, unfavorable publicity or changes in applicable laws and
regulations (or judicial or administrative interpretations thereof) affecting
the Company or its industry. Moreover, from time to time, the stock market
experiences significant price and volume volatility that may affect the market
price of the Common Stock for reasons unrelated to the Company's performance.

IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of the shares of Common Stock offered hereby will experience
immediate and substantial dilution in the pro forma net tangible book value of
their shares of $10.86 per share. In the event the Company issues additional
Common Stock in the future, including shares issued in connection with future
acquisitions, purchasers of Common Stock in this Offering may experience further
dilution. See 'Dilution.'

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BY-LAW PROVISIONS

The Board of Directors of the Company is empowered to issue preferred stock
in one or more series without stockholder action. The members of the Board of
Directors of the Company serve staggered terms. The existence of this
'blank-check' preferred stock and of the staggered Board of Directors could
render more difficult or discourage an attempt to obtain control of the Company
by means of a tender offer, merger, proxy contest or otherwise. Certain
provisions of the Delaware General Corporation Law may also discourage takeover
attempts that have not been approved by the Board of Directors. The Company's
By-Laws contain other provisions that may have an anti-takeover effect. See
'Management -- Directors and Executive Officers,' 'Principal Stockholders' and
'Description of Capital Stock.'

<PAGE>

THE COMPANY

Enfinity was formed by the Founding Companies to provide energy and indoor
environmental systems and services to commercial, industrial and institutional
clients. The Company provides a broad range of services throughout the life
cycle of a client's energy and indoor environmental systems, including: (i)
maintenance, repair and replacement; (ii) design, engineering and installation;
and (iii) on-site and off-site management of building systems, including
automated control and monitoring systems. The Founding Companies are
'best-of-class' service providers, each of which has developed specialized and
complementary expertise. The Founding Companies have been in business for an
average of 44 years. Enfinity has entered into agreements to acquire the
Founding Companies simultaneously with and as a condition to the closing of this
Offering. For the year ended December 31, 1997, the Founding Companies had
combined revenues of approximately $364.8 million and provided services in 30
states. The following is a brief description of the Founding Companies:

BRANDT. Brandt Mechanical Services, Inc., founded in 1952, focuses on
performing large design and build construction projects and turnkey industrial
and special projects. Brandt, headquartered in Dallas, Texas, also maintains
offices in Fort Worth and San Antonio, Texas, and has worked on projects in 16
states. Significant clients of Brandt include Hitachi, Fujitsu, Texas Christian
University and ARCO. Brandt's revenues for the year ended December 31, 1997 were
approximately $50.4 million.

AIR SYSTEMS. Air Systems, Inc. ('Air Systems'), founded in 1974,
specializes in the design, engineering and installation of energy and indoor
environmental systems for commercial entities in northern California and
performs additional services in plumbing, process piping and sheet metal
construction. Air Systems has particular expertise servicing clients in the
technology sector and has built a state of the art, on-site 'clean room.' Air
Systems was recognized in 1997 as one of the '100 Fastest Growing Private
Companies' in Silicon Valley by Silicon Valley Business Journal. Air Systems,
headquartered in San Jose, California, also operates from an office in Santa
Rosa, California. Significant clients of Air Systems include Devcon, Cisco
Systems, Novellus and Hewlett-Packard. Air Systems' revenues for the year ended
February 28, 1998 were approximately $91.0 million.

ENERGY SYSTEMS. Energy Systems Industries, Inc. ('Energy Systems'), founded
in 1947, primarily performs outsourced facility services to its clients in 15
states, focusing on the on-site maintenance of energy and indoor environmental
systems. Energy Systems, headquartered in Boston, Massachusetts, also operates
from its offices in Hartford, Connecticut, Philadelphia, Pennsylvania and
Washington, D.C. Significant clients of Energy Systems include Sprint,
Prudential Center (Boston), Lucent Technologies, Harvard University, Blue
Cross/Blue Shield of Massachusetts, America Online and Gillette. Energy Systems'
revenues for the year ended December 31, 1997 were approximately $54.2 million.

NEMSI. New England Mechanical Services, Inc. ('NEMSI'), founded in 1966,
specializes in performing design and build projects at manufacturing and
research facilities and on-site maintenance work at nuclear power plants. NEMSI
recently was named '1998 Commercial Contractor of the Year' by Contracting
Business magazine. NEMSI is headquartered in Vernon, Connecticut and has branch
offices in Boston and Springfield, Massachusetts and Hartford, Fairfield and New
London, Connecticut. Significant clients of NEMSI include Union Carbide,
Bristol-Myers Squibb, Pfizer, General Electric, Pratt & Whitney, Otis Elevator,
General RE and the United States Naval Submarine Base in Groton, Connecticut.
NEMSI's revenues for the year ended December 31, 1997 were approximately $39.4
million.

LEE. Lee Company ('Lee'), founded in 1944, specializes in the design,
engineering and installation of energy and indoor environmental systems and
possesses specialized expertise relating to health care facility projects. Lee
is one of the largest mechanical services companies in Nashville, Tennessee and
has worked on projects in 25 states. Significant clients of Lee include Nissan
Motor Manufacturing, Inc., Peterbilt Motors Company, Whirlpool Corporation,
Columbia/HCA and Primus. Lee's revenues for the year ended December 31, 1997
were approximately $39.7 million.

<PAGE>

HILL YORK. Hill York Corporation and Hill York Service Corporation
(collectively, 'Hill York'), founded in 1936, specialize in the design,
fabrication, installation and service of energy and indoor environmental systems
in high rise luxury condominiums, hotels, universities and convention centers
throughout South Florida. Hill York, with headquarters in Fort Lauderdale,
Florida, also serves its clients from offices in Miami, West Palm Beach and
Naples, Florida. Significant clients of Hill York include Motorola, Marriott,
Sheraton, Nova Southeastern University and Century Village. Hill York's revenues
for the year ended December 31, 1997 were approximately $34.2 million.

MECHANICAL SERVICES. Mechanical Services of Orlando, Inc. ('Mechanical
Services'), founded in 1974, focuses on design and build projects and provides
operation and maintenance services, primarily in Florida. Mechanical Services
has developed expertise in performing specialized mechanical service projects,
such as installing support systems for aquatic animals at Sea World in Orlando,
Florida. In addition, Mechanical Services has an Environmental Services Group
that provides indoor air quality services. Mechanical Services was named the
'1997 Commercial Contractor of the Year' by Contracting Business magazine.
Mechanical Services is headquartered in Orlando, Florida and also serves its
customers from an office in Tampa, Florida. Significant clients of Mechanical
Services include Lucent Technologies, Time Warner, Sprint, Sea World and LaSalle
Partners. Mechanical Services' revenues for the year ended December 31, 1997
were approximately $28.3 million.

AIRCOND. Aircond Corporation ('Aircond'), founded in 1937, focuses on the
maintenance, repair and replacement of energy and indoor environmental systems.
With over 130 technicians, Aircond is one of the largest service providers of
such systems in the Southeast. Aircond places a strong emphasis on training and
offers a six-year formal training program for its service technicians. Aircond,
headquartered in Smyrna, Georgia, has additional offices in Dalton and LaGrange,
Georgia, Columbia and Greenville, South Carolina and Charlotte, North Carolina.
Significant clients of Aircond include Coca-Cola, American Software, Michelin
Tires and the Hughes Aircraft division of Raytheon. Aircond's revenues for the
year ended September 30, 1997 were approximately $26.9 million.

THE MERGERS

The aggregate consideration to be paid by Enfinity to acquire the Founding
Companies consists of approximately $79.6 million in cash and 8,243,971 shares
of Common Stock. The Company will also assume $24.9 million in outstanding
indebtedness of the Founding Companies. See 'Certain Transactions.'

The closing of each Merger is subject to customary conditions. These
conditions include, among others, the accuracy on the closing date of the
Mergers of the representations and warranties made by the Founding Companies,
their principal stockholders and the Company; the performance of each of their
respective covenants included in the agreements relating to the Mergers (the
'Merger Agreements'); and the nonexistence of a material adverse change in the
business, results of operations or financial condition of each Founding Company.
For a further description of the transactions pursuant to which these businesses
will be acquired, see 'Certain Transactions -- Organization of the Company.'

Enfinity Corporation is a Delaware corporation. Its executive offices are
located at 400 Lake Ridge Drive, Smyrna, Georgia 30082, and its telephone number
at that address is (770) 431-1470.

<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby, after deducting the underwriting discount, are estimated to be
approximately $96.4 million ($111.5 million if the Underwriters' over-allotment
option is exercised in full). Of the net proceeds, approximately $79.6 million
(subject to adjustment) will be used to pay the cash portion of the purchase
price for the Founding Companies, of which approximately $54.6 million will be
paid directly or indirectly to stockholders of the Founding Companies who will
become officers, directors or holders of more than 5% of the Common Stock of the
Company. Approximately $1.3 million of the net proceeds will be used to redeem
preferred stock of one of the Founding Companies. An additional $4.0 million of
the net proceeds will be used to pay S Corporation distributions to the
stockholders of certain of the Founding Companies, and approximately $2.6
million of the net proceeds will be used to pay the stockholders of certain of
the Founding Companies for amounts representing Excess Working Capital. In
addition, approximately $6.3 million of the net proceeds will be used to pay
indebtedness, accrued expenses and other liabilities of the Founding Companies.
Such indebtedness matures at various times through September 2011 and bears
interest at 8.0% to 9.8% per annum. Approximately $3.7 million of such
indebtedness is guaranteed by persons who will be affiliates of the Company upon
the consummation of this Offering. Such guaranteed indebtedness matures at
various times through December 2002. See 'Certain Transactions.'

The remaining $3.4 million of net proceeds will be used for working capital
and for general corporate purposes, including future acquisitions. The Company
continues to review various strategic acquisition opportunities with other
energy and indoor environmental systems and services providers. Except for the
Merger Agreements with the Founding Companies, the Company has no agreements to
effect any acquisitions. Pending such uses, the net proceeds will be invested in
short-term, interest-bearing, investment grade securities.

In addition to the net proceeds of this Offering, the Company will retain
the cash balances of the Founding Companies. Such balances totaled approximately
$6.4 million as of March 31, 1998. The Company has received a commitment from
NationsBank, N.A. for a revolving credit facility of up to $100.0 million to be
used for working capital and other general corporate purposes, including future
acquisitions. Although the Company expects such revolving credit facility will
be available to it upon the consummation of this Offering, there can be no
assurance that the Company will be able to obtain such revolving credit facility
or other financing it may need on terms the Company deems acceptable. See 'Risk
Factors -- Risks Related to Acquisition Financing' and 'Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.'

DIVIDEND POLICY

The Company intends to retain all of its earnings, if any, to finance the
expansion of its business and for general corporate purposes, including future
acquisitions, and does not anticipate paying any cash dividends on its Common
Stock for the foreseeable future. In addition, in the event the Company is
successful in obtaining its proposed revolving credit facility, it is likely
that such facility will include restrictions on the ability of the Company to
pay dividends without the consent of the lender.

<PAGE>

CAPITALIZATION

The following table sets forth the short-term debt and current portion of
long-term debt and the capitalization of the Company at March 31, 1998: (i) on a
pro forma combined basis to give effect to the Mergers; and (ii) as further
adjusted to give effect to this Offering and the application of the estimated
net proceeds therefrom. See 'Selected Financial Data' and 'Use of Proceeds.'
This table should be read in conjunction with the Unaudited Pro Forma Combined
Financial Statements of the Company and the notes thereto included elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1998
-------------------------
PRO AS
FORMA ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt and current portion of long-term debt................................. $13,095 $ 12,013
--------- -----------
--------- -----------
Long-term debt, less current portion.................................................. $11,690 $ 6,965
Stockholders' equity:
Preferred Stock: $0.01 par value, 500,000 shares authorized; none issued or
outstanding..................................................................... -- --
Common Stock: $0.01 par value, 49,000,000 shares authorized; 9,345,452 shares
issued and outstanding, pro forma; and 17,345,452 shares issued and outstanding,
as adjusted(1).................................................................. 93 173
Additional paid-in capital....................................................... 94,828 191,188
Retained deficit................................................................. (29,486) (29,486)
--------- -----------
Total stockholders' equity.................................................. 65,435 161,875
--------- -----------
Total capitalization................................................... $77,125 $ 168,840
--------- -----------
--------- -----------
</TABLE>

- ------------

(1) Excludes 2,341,635 shares of Common Stock reserved for issuance pursuant to
the Company's 1998 Long-Term Incentive Plan, of which options to purchase
1,760,883 shares will be granted by the Company concurrently with the
consummation of the Mergers and this Offering. See 'Management -- 1998
Long-Term Incentive Plan.'

<PAGE>

DILUTION

The deficit in pro forma net tangible book value of the Company as of March
31, 1998 was approximately $50.6 million, or $5.41 per share of Common Stock,
after giving effect to the Mergers. The deficit in pro forma net tangible book
value per share represents the Company's pro forma net tangible assets less its
total liabilities, divided by the number of shares of Common Stock to be
outstanding after giving effect to the Mergers. After giving effect to the sale
of the 8,000,000 shares of Common Stock offered hereby (at an assumed initial
public offering price of $13.50 per share less the underwriting discount and
estimated expenses of this Offering) and the application of the net proceeds
therefrom, the Company's pro forma net tangible book value as of March 31, 1998
would have been approximately $45.9 million, or approximately $2.64 per share.
This represents an immediate increase in pro forma net tangible book value of
approximately $8.05 per share to existing stockholders and an immediate dilution
of approximately $10.86 per share to new investors purchasing the shares in this
Offering. The following table illustrates this pro forma dilution per share:

<TABLE>
<S> <C> <C>
Assumed initial public offering price................................................ $13.50
Pro forma deficit in net tangible book value before this Offering.................. $(5.41)
Increase in pro forma net tangible book value attributable to new investors........ 8.05
------
Pro forma net tangible book value after this Offering................................ 2.64
------
Dilution to new investors............................................................ $10.86
------
------
</TABLE>

The following table sets forth the number of shares of Common Stock
purchased from the Company, the total consideration paid and the average price
per share paid by existing stockholders (after giving effect to the Mergers) and
the new investors purchasing shares of Common Stock from the Company in this
Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED AVERAGE
--------------------- TOTAL PRICE
NUMBER PERCENT CONSIDERATION(1) PER SHARE
---------- ------- ---------------- ---------
<S> <C> <C> <C> <C>
Existing stockholders.................... 9,345,452 53.9% $(48,892,000) $ (5.23)
New investors............................ 8,000,000 46.1% 108,000,000 $ 13.50
---------- ------- ----------------
Total............................... 17,345,452 100.0% $ 59,108,000
---------- ------- ----------------
---------- ------- ----------------
</TABLE>

- ------------

(1) Total consideration paid by existing stockholders represents the combined
stockholders' equity, including the stockholders' equity of the Founding
Companies, before this Offering, adjusted to reflect: (i) the payment of
$79.6 million in cash to the stockholders of the Founding Companies as part
of the consideration for the Mergers; (ii) the assumption by a stockholder
of a Founding Company of certain liabilities of other stockholders of such
Founding Company in the net amount of approximately $1.3 million in
connection with the Mergers; and (iii) distributions to be made to the
stockholders of certain of the Founding Companies, including undistributed S
Corporation earnings of $4.0 million, Excess Working Capital of $2.6 million
and $1.3 million of liquidation value of preferred stock of one of the
Founding Companies. See the Notes to the Unaudited Pro Forma Combined
Financial Statements.

<PAGE>

<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Enfinity will acquire the Founding Companies simultaneously with and as a
condition to the consummation of this Offering. For financial statement
presentation purposes, Brandt has been identified as the accounting acquiror.
The following selected historical financial data of Brandt as of December 31,
1996 and 1997, for the period from May 25 to December 31, 1995, for the years
ended December 31, 1996 and 1997 and for the three months ended March 31, 1998
have been derived from the audited financial statements of Brandt included
elsewhere in this Prospectus. The selected historical data of Brandt as of
December 31, 1995 have been derived from the audited financial statements of
Brandt not included in this Prospectus. The following selected historical
financial data for the three months ended March 31, 1997 have been derived from
unaudited financial statements of Brandt, which have been prepared on the same
basis as the audited financial statements and, in the opinion of Brandt, reflect
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of such data. In May 1995, management of Brandt purchased all
issued and outstanding common stock from Brandt's former parent. Accordingly,
financial information for Brandt is presented for periods subsequent to the date
of this purchase. The selected unaudited pro forma combined financial data have
been adjusted for: (i) the consummation of the Mergers; (ii) certain pro forma
adjustments to the historical financial statements; and (iii) the consummation
of this Offering and the application of the net proceeds therefrom. See the
Unaudited Pro Forma Combined Financial Statements and the notes thereto and the
historical financial statements of Brandt and the other Founding Companies and
the notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ----------------------------------------
1997 1997 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
PRO FORMA COMBINED(1):
Revenues................. $364,767 $ 69,133 $103,650
Cost of revenues......... 293,749 53,096 83,956
------------------ ---------- ------------------
Gross profit........ 71,018 16,037 19,694
Selling, general and
administrative
expenses(2)............. 48,399 11,272 12,598
Employee stock
compensation
(non-recurring)(3)...... 795 -- 1,816
Amortization of goodwill,
net(4).................. 2,270 568 568
------------------ ---------- ------------------
Income from
operations....... 19,554 4,197 4,712
Other expense, net(5).... 821 35 368
------------------ ---------- ------------------
Income before provision
for income taxes........ 18,733 4,162 4,344
Provision for income
taxes(6)................ 8,401 1,892 1,965
------------------ ---------- ------------------
Net income............... $ 10,332 $ 2,270 $ 2,379
------------------ ---------- ------------------
------------------ ---------- ------------------
Net income per share,
basic and diluted....... $0.60 $0.13 $0.14
----- ----- -----
----- ----- -----
Shares used in computing
pro forma basic net
income per share(7)..... 17,141,917 17,141,917 17,141,917
Shares used in computing
pro forma diluted net
income per share(7)..... 17,187,238 17,187,238 17,187,238
</TABLE>

<TABLE>
<CAPTION>
PERIOD FROM YEARS ENDED THREE MONTHS ENDED
MAY 25 TO DECEMBER 31, MARCH 31,
DECEMBER 31, ----------------------------- ----------------------------------------
1995 1996 1997 1997 1998
------------ ------------ ------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
BRANDT
Revenues................. $ 15,869 $ 38,723 $50,435 $7,547 $ 15,326
Cost of revenues......... 13,170 31,932 42,032 5,875 12,901
------------ ------------ ------------- ------- ----------
Gross profit........ 2,699 6,791 8,403 1,672 2,425
Selling, general and
administrative
expenses............... 2,562 6,764 5,287 1,191 1,459
Accretion of negative
goodwill............... (371) (636) (636) (159) (159)
------------ ------------ ------------- ------- ----------
Income from
operations........ 508 663 3,752 640 1,125
Other (income), net...... (77) (161) (164) (10) (70)
------------ ------------ ------------- ------- ----------
Income before provision
for income taxes....... 585 824 3,916 650 1,195
Provision for income
taxes(8)............... 24 41 -- -- --
------------ ------------ ------------- ------- ----------
Net income............... $ 561 $ 783 $ 3,916 $ 650 $ 1,195
------------ ------------ ------------- ------- ----------
------------ ------------ ------------- ------- ----------
</TABLE>
(table continued on next page)
21

<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
BRANDT COMBINED COMPANIES
---------------------------------------- ---------------------------
MARCH 31, 1998
DECEMBER 31, ---------------------------
--------------------------- MARCH 31, PRO FORMA AS
1995 1996 1997 1998 COMBINED(9) ADJUSTED(10)
------ ------ ------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital
(deficit).............. $3,562 $3,499 $ 5,866 $ 6,878 $ (58,783)(11) $ 32,564
Total assets............. 7,381 9,909 16,344 14,643 243,610 246,165
Total long-term debt, net
of current portion..... 207 121 -- -- 11,690 6,965
Stockholders' equity..... 1,357 1,345 4,548 5,743 65,435 161,875
</TABLE>

- ------------
(1) The pro forma combined statement of operations data assume that the Mergers
and this Offering were consummated on January 1, 1997 and are not
necessarily indicative of the results the Company would have obtained had
these events actually then occurred and should not be construed as
representative of future operating results.

(2) The pro forma combined statement of operations data reflect pro forma
reductions in salaries, bonuses and benefits to the stockholders and
management of the Founding Companies that have been agreed to
prospectively. Such reductions include the Compensation Differential of
$6.1 million, $1.2 million and $856,000 for the year ended December 31,
1997 and the three months ended March 31, 1997 and 1998, respectively, and
a non-recurring compensation charge of $750,000 for the three months ended
March 31, 1998 related to stock issued to management of Enfinity.
Additionally, the pro forma combined statement of operations reflects the
elimination of excess profit sharing contributions in accordance with the
Merger Agreements totalling $237,000, $81,000 and $52,000 for the year
ended December 31, 1997 and the three months ended March 31, 1997 and 1998,
respectively.

(3) The data do not reflect the elimination of non-recurring compensation
charges resulting from the issuance of stock to employees of $795,000 at
NEMSI for the year ended December 31, 1997 and $1.8 million at Energy
Systems for the three months ended March 31, 1998. Excluding such
non-recurring charges, net income per share, basic and diluted, would have
been $0.63 for the year ended December 31, 1997 and $0.20 for the three
months ended March 31, 1998.

(4) Reflects the amortization of $116.0 million of goodwill to be recorded as a
result of the Mergers over a 40-year period and computed on the basis
described in the Notes to the Unaudited Pro Forma Combined Financial
Statements, net of Brandt's existing negative goodwill.

(5) Reflects a reduction of interest expense associated with certain debt to be
repaid from the proceeds of this Offering and debt to be repaid by a
Founding Company stockholder pursuant to the Merger Agreements. This
adjustment amounted to $749,000, $157,000 and $205,000 for the year ended
December 31, 1997 and for the three months ended March 31, 1997 and 1998,
respectively.

(6) Assumes all income is subject to a corporate income tax rate of 40% and all
goodwill is non-deductible.

(7) Shares used to calculate pro forma basic earnings per share include: (i)
1,101,481 shares issued to management of and consultants to Enfinity; (ii)
8,243,971 shares to be issued to the owners of the Founding Companies; and
(iii) 7,796,465 shares, representing the number of shares sold in this
Offering necessary to pay the $79.6 million cash portion of the
consideration for the Mergers, repay $6.3 million of indebtedness of the
Founding Companies, pay distributions of $6.7 million to certain Founding
Company stockholders, pay $1.3 million of liquidation value of preferred
stock of one of the Founding Companies and pay the underwriting discount
and the expenses of this Offering. In addition, the number of shares used
to compute pro forma diluted net income per share includes 45,321 shares
(using the treasury stock method) related to dilution attributable to
options to purchase Common Stock of the Company at an exercise price below
the assumed initial offering price. The options will be issued by the
Company in exchange for existing options to purchase shares of common stock
of one of the Founding Companies. See 'Certain Transactions.'

(8) Brandt did not record income tax expense in 1997 due to its status
(beginning January 1, 1997) as an S Corporation.

(9) The pro forma combined balance sheet data assume that the Mergers were
consummated on March 31, 1998 and are not necessarily indicative of the
financial position that would have been achieved had these events actually
then occurred and should not be construed as representative of future
financial position.

(10) Adjusted to reflect the sale of the 8,000,000 shares of Common Stock
offered hereby and the application of the estimated net proceeds therefrom.
See 'Use of Proceeds.'

(11) Reflects $87.5 million payable to the owners of the Founding Companies,
representing the cash portion of the consideration for the Mergers to be
paid from a portion of the net proceeds of this Offering, S Corporation
distributions to be made to the stockholders of certain of the Founding
Companies, redemption of preferred stock of one of the Founding Companies
and payment of certain Excess Working Capital amounts. See 'Use of
Proceeds,' 'Certain Transactions -- Organization of the Company' and the
Notes to the Unaudited Pro Forma Combined Financial Statements.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Prospectus contains certain forward-looking statements which involve
risks and uncertainties. The Company's actual results could differ materially
from the results anticipated in these forward-looking statements as a result of
certain of the factors set forth under 'Risk Factors' and elsewhere in this
Prospectus. The following should be read in conjunction with 'Risk Factors,'
'Selected Financial Data,' the Unaudited Pro Forma Combined Financial Statements
of the Company and the notes thereto and the historical financial statements of
the Founding Companies and the notes thereto appearing elsewhere in this
Prospectus.

INTRODUCTION

General

Enfinity was formed in 1997 by the Founding Companies to provide energy and
indoor environmental systems and services to commercial, industrial and
institutional clients. Enfinity has conducted no operations and generated no
revenues to date and has entered into agreements to acquire the eight Founding
Companies simultaneously with the closing of this Offering. All references to
the 'Company' in the following discussion includes the Founding Companies as if
the Mergers had occurred during the periods discussed.

The Company's revenues are derived from providing a broad range of services
throughout the life cycle of a client's energy and indoor environmental systems,
including (i) maintenance, repair and replacement; (ii) design, engineering and
installation; and (iii) on-site and off-site management of building systems,
including control and monitoring systems. The Company derived approximately
52.9% of its pro forma combined 1997 revenues from maintenance, repair and
replacement services, 36.6% from design, engineering and installation services
and 10.5% from the on-site and off-site management of building systems.

The time to complete the Company's design, engineering and installation
projects generally ranges from a period of 30 days to 18 months. Design,
engineering and installation projects are accounted for under the
percentage-of-completion method of accounting, whereby revenues are recognized
based on the percentage of costs incurred to total estimated costs for each
contract. Cost of revenues consists of direct labor, raw materials, HVAC
components, subcontracted labor and an allocation of indirect costs, including
supervisory labor, equipment depreciation and materials.

Costs and estimated earnings in excess of billings on uncompleted contracts
are recorded as an asset and billings in excess of costs and estimated earnings
on uncompleted contracts are recorded as a liability on the balance sheet.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined. Changes in job performance, job conditions,
estimated profitability and final contract settlements may result in revisions
to costs and income, and their effects are recognized in the period in which the
revisions are determined.

The balances billed but not currently paid by clients pursuant to retainage
provisions in construction contracts generally are due upon completion of the
contracts and acceptance by the client. Based on the Company's experience with
similar contracts in recent years, the retainage portion of accounts receivable
outstanding at March 31, 1998 is expected to be collected within one year.

Maintenance, repair and replacement revenues are recognized as services are
performed or over the life of the contract. Cost of revenues is similar to the
costs for design, engineering and installation services, consisting of direct
labor, raw materials, HVAC components and an allocation of indirect costs,
including supervisory labor and equipment depreciation.

On-site and off-site management of building systems, including control and
monitoring systems on an outsourced basis, are performed under service contracts
averaging from one to three years, and generally are terminable by either party
upon 30 to 60 days' notice. These contracts provide for periodic billings, and
revenues are recognized over the life of the contract. Cost of revenues consists
primarily of direct labor.

<PAGE>

Selling, general and administrative expenses consist primarily of
compensation and benefits to management, sales and administrative employees,
expenses relating to facilities, including depreciation, and professional
expenses.

Following the Mergers, the Company expects to realize certain savings as a
result of: (i) operating efficiencies and purchasing economies of scale in areas
such as system components, raw materials, service vehicle related expenses and
telecommunications; (ii) consolidation of insurance, employee benefits and other
administrative expenses; and (iii) the Company's ability to borrow at interest
rates lower than those at which most of the Founding Companies have borrowed
historically. The Company has not and cannot quantify these savings until
completion of the Mergers and integration of the Founding Companies. The Company
also expects to incur additional costs associated with public ownership,
corporate management and administration. However, these costs, like the savings
they offset, cannot be quantified accurately at this time. Accordingly, neither
the expected savings nor the expected costs have been included in the pro forma
combined financial information of the Company. These various costs and possible
cost savings may make comparison of future operating results with historical
operating results difficult.

Securities and Exchange Commission Staff Accounting Bulletin No. 97 ('SAB
97') requires the application of purchase accounting when three or more
substantive operating entities combine in a single business combination effected
by the issuance of stock just prior to or contemporaneously with an initial
public offering and the combination does not meet the pooling-of-interests
criteria of Accounting Principles Board Opinion No. 16. Brandt has been
identified as the accounting acquiror in accordance with the provisions of SAB
97, which states that the recipient of the largest portion of voting rights in
the combined corporation is presumed to be the accounting acquiror for financial
statement presentation purposes. Accordingly, the excess purchase price over the
fair value of the net assets acquired from Air Systems, Energy Systems, NEMSI,
Lee, Hill York, Mechanical Services and Aircond of approximately $116.0 million
will be amortized over a period of 40 years as a non-cash charge to the
Company's income statement. This amortization is approximately $2.9 million per
year. The amount of goodwill to be recorded and the related amortization expense
will depend in part on the initial public offering price.

The Compensation Differential

The Founding Companies have operated as independent, privately-owned
entities throughout the periods presented. Their results of operations reflect
varying historical levels of owners' compensation. Certain owners of the
Founding Companies have agreed prospectively in employment agreements to be
entered into upon the consummation of this Offering to certain reductions of
their compensation and benefits in connection with the Mergers (the
'Compensation Differential'). Pursuant to the Merger Agreements, members of
senior management of the Founding Companies have agreed, simultaneously with the
closing of the Mergers, to enter into employment agreements with their
respective Founding Companies that provide for specified annual salaries in
addition to certain benefits, including vacation, health and insurance benefits.
Pursuant to the terms of the employment agreements, the owners of the Founding
Companies will be eligible for performance-based bonuses. The bonuses paid
historically to the owners of the Founding Companies were awarded based on the
owners' discretion, and compensation expense has been reduced accordingly in the
pro forma adjustments. On a prospective basis, the Company expects that bonuses
will only be paid if earnings increase to a level substantially in excess of pro
forma combined earnings for the year ended December 31, 1997. See 'Management --
Executive Compensation; Employment Agreements; Covenants-Not-To-Compete.' The
Compensation Differentials for 1997 and for the three months ended March 31,
1997 and 1998 were approximately $6.1

<PAGE>

million, $1.2 million and $856,000, respectively. These amounts have been
reflected as a pro forma adjustment in the Unaudited Pro Forma Combined
Statement of Operations.

In September 1997, Enfinity sold an aggregate of 552,074 shares of Common
Stock to consultants for nominal consideration. In February 1998, Enfinity sold
an aggregate of 35,000 shares of Common Stock to a consultant for nominal
consideration and 74,074 shares of Common Stock to management for nominal
consideration. In May 1998, as previously agreed, Enfinity sold an aggregate of
425,333 shares of Common Stock to management for nominal consideration. In June
1998, Enfinity sold an aggregate of 15,000 shares of Common Stock to management
for nominal consideration. As a result, the Company's financial statements
reflect a non-recurring, non-cash compensation charge of $800,000 for the three
months ended March 31, 1998 and will reflect a charge of $4.8 million for the
six months ending June 30, 1998. The value of such shares was based upon the
assumed initial public offering price per share, less a 20% discount due to the
significant restrictions on transferability of these shares.

Amortization of Intangible Assets

The goodwill subsequent to the Mergers of $116.0 million represents
approximately 47.1% of the Company's pro forma total assets as of March 31,
1998. The Company plans to evaluate continually whether events or circumstances
have occurred that indicate that the remaining useful life of goodwill may
warrant revision. Additionally, in accordance with the provisions of Statement
of Financial Accounting Standards ('SFAS') No. 121, 'Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,'
the Company will evaluate any potential goodwill impairments by reviewing the
future cash flows of the respective acquired entities' operations and comparing
these amounts with the carrying value of the associated goodwill.

Recently Issued Accounting Standards

Reporting Comprehensive Income. In June 1997, the FASB issued SFAS No. 130,
'Reporting Comprehensive Income.' SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general purpose financial
statements. SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. SFAS No. 130 is effective for fiscal years beginning
after December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The Company intends to
adopt SFAS No. 130 in 1998.

Segment Reporting. In June 1997, the FASB issued SFAS No. 131, 'Disclosures
About Segments of An Enterprise and Related Information.' SFAS No. 131
establishes standards for reporting information about operating segments in
annual financial statements and in interim financial reports issued to
stockholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. In general, such
information must be reported for externally in the same manner used for internal
management purposes. SFAS No. 131 is effective for financial statements issued
for periods beginning after December 15, 1997. In the initial year of adoption,
comparative information for earlier years must be restated. Since SFAS No. 131
only requires disclosure of certain information, adoption will not affect the
Company's financial position or results of operations.

Accounting for Derivative Instruments and Hedging Activities. In June 1998,
the Financial Accounting Standards Board ('FASB') issued SFAS No. 133,
'Accounting for Derivative Instruments and Hedging Activities.' SFAS No. 133
establishes a new model for accounting for derivatives and hedging activities
and supercedes and amends a number of existing standards. SFAS No. 133 is
effective for fiscal years beginning after June 15, 1999, but earlier adoption
is permitted. Upon initial application, all derivatives are required to be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. Recognition of changes in fair value
depends on whether the derivative is designated and qualifies as a hedge, and
the type of hedging relationship that exists. The Company does not currently,
nor does it expect to, hold any derivative instruments or participate in any
hedging activities.

<PAGE>

YEAR 2000

Currently, certain of the Founding Companies' computer programs are
partially year 2000 non-compliant. The Company believes that it has taken all
appropriate steps to ensure Year 2000 compliance. The Company does not
anticipate that the Year 2000 problem will have a material adverse effect on its
business, financial condition or results of operations.

PRO FORMA COMBINED RESULTS OF OPERATIONS

The following table sets forth the pro forma combined operating results of
the Company for the year ended December 31, 1997. For a discussion of the pro
forma adjustments, see the Unaudited Pro Forma Combined Financial Statements and
the notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
YEAR ENDED -------------------------------------------
DECEMBER 31, 1997 1997 1998
------------------- ------------------ -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................................... $364,767 100.0% $69,133 100.0% $103,650 100.0%
Cost of revenues....................................... 293,749 80.5 53,096 76.8 83,956 81.0
-------- ----- ------- ----- -------- -----
Gross profit........................................... 71,018 19.5 16,037 23.2 19,694 19.0
Selling, general and administrative expenses........... 48,399 13.3 11,272 16.3 12,598 12.2
Employee stock compensation (non-recurring)............ 795 0.2 -- -- 1,816 1.8
Amortization of goodwill, net.......................... 2,270 0.6 568 0.8 568 0.5
-------- ----- ------- ----- -------- -----
Income from operations................................. $ 19,554 5.4% $ 4,197 6.1% $ 4,712 4.5%
-------- ----- ------- ----- -------- -----
-------- ----- ------- ----- -------- -----
</TABLE>

PRO FORMA COMBINED RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 1997

Revenues. Revenues increased $34.5 million, or 49.9%, from $69.1 million
for the three months ended March 31, 1997 to $103.7 million for the three months
ended March 31, 1998. This increase was primarily attributable to an increase of
approximately $19.5 million in the design, engineering and installation business
at Air Systems, Brandt, Lee and Hill York, and $17.3 million in maintenance,
repair and replacement services and on-site and off-site management of building
systems at Brandt, Air Systems, Energy Systems, Lee, Hill York and Aircond.
These increases were partially offset by a $1.2 million decrease in the design,
engineering and installation business at Mechanical Services due to several very
large installation projects which were in process during the three months ended
March 31, 1997, as well as a slight decrease at NEMSI due to delays in the
scheduled start dates of certain new projects.

Gross profit. Gross profit increased $3.7 million, or 22.8%, from $16.0
million for the three months ended March 31, 1997 to $19.7 million for the three
months ended March 31, 1998. As a percentage of revenues, gross profit decreased
from 23.2% for the three months ended March 31, 1997 to 19.0% for the three
months ended March 31, 1998, as a result of a significant increase in
replacement and design, engineering and installation projects, which generally
have lower margins than maintenance and repair services.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $3.1 million, or 27.9%, from $11.3 million for
the three months ended March 31, 1997 to $14.4 million for the three months
ended March 31, 1998. This increase is primarily attributable due to the
granting of $1.8 million in stock to an executive at Energy Systems during the
quarter ended March 31, 1998, as well as increases at several entities
attributable to the hiring of additional employees to support increased volume
of transactions as well as increases in general and administrative expenses
associated with revenue growth. As a percentage of revenues, selling, general
and administrative expenses decreased from 16.3% for the three months ended
March 31, 1997 to 13.9% for the three months ended March 31, 1998 as revenues
increased without a commensurate increase in infrastructure.

PRO FORMA COMBINED LIQUIDITY AND CAPITAL RESOURCES

The Founding Companies' principal sources of liquidity have historically
been cash flows from operating activities. After the consummation of the Mergers
and this Offering, the Company will have

<PAGE>

approximately $9.8 million of cash. It is expected that certain short-term and
long-term debt of the Founding Companies, totaling approximately $6.3 million as
of March 31, 1998, will be repaid from the net proceeds of this Offering and
approximately $1.3 million will be repaid by a stockholder of one of the
Founding Companies.

The Company has received a bank commitment for a revolving credit facility
of up to $100.0 million. Although such revolving credit facility is expected to
be available upon the consummation of this Offering, there can be no assurance
that the Company will be able to obtain such revolving credit facility or other
financing it may need on terms the Company deems acceptable. It is expected that
such facility, if obtained, will require the Company to comply with various loan
covenants, including: (i) maintenance of certain financial ratios, including
minimum tangible net worth; (ii) restrictions on additional indebtedness; and
(iii) restrictions on liens, guarantees, advances and dividends. Such facility
is intended to be used for acquisitions, capital expenditures and general
corporate purposes.

The Founding Companies' capital expenditures were $8.6 million for the year
ended December 31, 1997 and $1.0 million for the three months ended March 31,
1998. A significant portion of the 1997 expenditures was for purchases of
equipment and the construction of a new facility for Lee. The Company believes
that cash flow from operations, borrowings under the proposed credit facilities
and the unallocated net proceeds of this Offering will be sufficient to fund the
Company's expected working capital needs, debt service requirements and planned
capital expenditures for at least the next 12 months.

The Company intends to pursue selected acquisition opportunities. The
timing or success of any acquisition efforts is unpredictable. Accordingly, the
Company is unable to accurately estimate its expected capital commitments.
Funding for future acquisitions will likely come from a combination of the net
proceeds of this Offering, cash flow from operations, borrowings under
anticipated revolving credit facilities and the issuance of additional equity.
The Company plans to register 5,000,000 shares of its Common Stock under the
Securities Act after the completion of this Offering for use by the Company as
consideration for future acquisitions. The contemplated offering of such
5,000,000 additional shares will be made only by means of a prospectus.

RESULTS OF OPERATIONS -- BRANDT

Founded in 1952, Brandt focuses on performing large design and build
construction projects and turnkey industrial and special projects. In May 1995,
all of the operating subsidiary's issued and outstanding common stock was
purchased by Brandt management from Brandt's former parent. Accordingly,
financial information is presented for periods subsequent to the date of this
purchase.

For the year ended December 31, 1997, approximately 61.5% of Brandt's
revenues was derived from maintenance, repair and replacement services and 38.5%
was derived from design, engineering and installation services. For the three
months ended March 31, 1998, approximately 64.8% of Brandt's revenues was
derived from maintenance, repair and replacement services and 35.2% was derived
from design, engineering and installation services.

The following table sets forth selected statement of operations data for
Brandt, and such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
PERIOD FROM
MAY 25 TO YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
DECEMBER 31, ----------------------------------- ----------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- -------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $15,869 100.0% $38,723 100.0% $50,435 100.0% $7,547 100.0% $15,326 100.0%
Cost of revenues.............. 13,170 83.0 31,932 82.5 42,032 83.3 5,875 77.8 12,901 84.2
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Gross profit.................. 2,699 17.0 6,791 17.5 8,403 16.7 1,672 22.2 2,425 15.8
Selling, general and
administrative expenses..... 2,562 16.1 6,764 17.4 5,287 10.4 1,191 15.8 1,459 9.5
Accretion of negative
goodwill.................... (371) (2.3) (636) (1.6) (636) (1.3) (159) (2.1) (159) (1.0)
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Income from operations........ $ 508 3.2% $ 663 1.7% $ 3,752 7.4% $ 640 8.5% $ 1,125 7.3%
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
</TABLE>

<PAGE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1997 -- BRANDT

Revenues. Revenues increased $7.8 million, or 103.1%, from $7.5 million for
the three months ended March 31, 1997 to $15.3 million for the three months
ended March 31, 1998, primarily as a result of a higher level of service
activity and an increase in the number of new installation projects.

Gross profit. Gross profit increased $753,000, or 45.0%, from $1.7 million
for the three months ended March 31, 1997 to $2.4 million for the three months
ended March 31, 1998. As a percentage of revenues, gross profit decreased from
22.2% for the three months ended March 31, 1997 to 15.8% for the three months
ended March 31, 1998, as a result of an increase in projects performed under
cost-plus contracts, which generally have lower margins than design and build
projects, and a significant increase in replacement and design, engineering and
installation projects, which also generally have lower margins, as compared to
the prior period.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $268,000, or 22.5%, from $1.2 million for the
three months ended March 31, 1997 to $1.5 million of the three months ended
March 31, 1998. As a percentage of revenues, selling, general and administrative
expenses decreased from 15.8% for the three months ended March 31, 1997 to 9.5%
for the three months ended March 31, 1998 as a result of increased revenues
without a commensurate increase in infrastructure. Excluding the Compensation
Differential of $91,000 in the three months ended March 31, 1997 and $81,000 in
the three months ended March 31, 1998, selling, general, and administrative
expenses as a percentage of revenues decreased from 14.6% to 9.0%.

RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1996 -- BRANDT

Revenues. Revenues increased $11.7 million, or 30.2%, from $38.7 million
for the year ended December 31, 1996 to $50.4 million for the year ended
December 31, 1997, primarily as a result of growth in new installation and
retrofit projects. This growth was driven by strong market conditions and
management's focus on new business development.

Gross profit. Gross profit increased $1.6 million, or 23.7%, from $6.8
million for the year ended December 31, 1996 to $8.4 million for the year ended
December 31, 1997. As a percentage of revenues, gross profit decreased from
17.5% for the year ended December 31, 1996 to 16.7% for the year ended December
31, 1997, primarily as a result of a trend towards projects performed under
cost-plus contracts, which generally have lower margins than design and build
projects. While the trend toward projects performed under cost-plus contracts is
expected to continue, margins are expected to remain consistent with recent
periods.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $1.5 million, or 21.8%, from $6.8 million for
the year ended December 31, 1996 to $5.3 million for the year ended December 31,
1997, primarily due to a reduction in shareholder bonuses in 1997 compared to
1996. As a percentage of revenues, selling, general and administrative expenses
decreased from 17.4% for the year ended December 31, 1996 to 10.4% for the year
ended December 31, 1997. Excluding the Compensation Differential of $2.8 million
for 1996 and $353,000 for 1997, selling, general and administrative expenses as
a percentage of revenues decreased from 10.3% to 9.8%.

RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE PERIOD FROM MAY 25,
1995 (INCEPTION) TO DECEMBER 31, 1995 -- BRANDT

Revenues. Revenues were $15.9 million for the period from May 25, 1995 to
December 31, 1995 and $38.7 million for the year ended December 31, 1996. This
increase in revenues was primarily due to the comparison of a seven month period
to a twelve month period, as well as growth in the design, engineering and
installation revenues as a result of new business development subsequent to the
acquisition by Brandt management on May 25, 1995.

Gross profit. Gross profit was $2.7 million for the period from May 25 to
December 31, 1995 and $6.8 million for the year ended December 31, 1996. As a
percentage of revenues, gross profit remained

<PAGE>

relatively consistent at 17.0% for the period from May 25, 1995 to December 31,
1995 and 17.5% for the year ended December 31, 1996.

Selling, general and administrative expenses. Selling, general and
administrative expenses were $2.6 million for the period from May 25, 1995 to
December 31, 1995 and $6.8 million for the year ended December 31, 1996. As a
percentage of revenues, selling, general and administrative expenses increased
from 16.1% for the period from May 25, 1995 to December 31, 1995 to 17.4% for
the year ended December 31, 1996. Excluding the Compensation Differential of
$404,000 for 1995 and $2.8 million for 1996, selling, general and administrative
expenses decreased as a percentage of revenues from 13.6% to 10.3% as Brandt was
able to generate operating leverage by maintaining relatively constant selling,
general and administrative expenses despite the increased activity.

LIQUIDITY AND CAPITAL RESOURCES -- BRANDT

Brandt generated approximately $1.2 million in net cash from operating
activities for the year ended December 31, 1997 and used $581,000 for the three
months ended March 31, 1998. Increased revenues of $11.7 million for the year
ended December 31, 1997 resulted in corresponding increases in both trade and
retainage accounts receivable as well as in billings in excess of costs and
estimated earnings on uncompleted contracts at December 31, 1997. Brandt used
$920,000 in financing activities for the year ended December 31, 1997,
consisting of $207,000 for payments on long-term debt and $713,000 for
distributions to stockholders.

At March 31, 1998, Brandt had working capital of $6.7 million and no
long-term debt.

RESULTS OF OPERATIONS -- AIR SYSTEMS

Founded in 1974, Air Systems specializes in the design, engineering and
installation of energy and indoor environmental systems for commercial entities
in northern California and performs additional services in plumbing, process
piping and sheet metal construction.

For the year ended February 28, 1998, approximately 61.9% of Air Systems'
revenues was derived from maintenance, repair and replacement services and 38.1%
was derived from design, engineering and installation services. For the three
months ended May 31, 1998, approximately 58.8% of Air Systems' revenues was
derived from maintenance, repair and replacement services and 41.2% was derived
from design, engineering and installation services.

The following table sets forth selected statement of operations data for
Air Systems, and such data as a percentage of revenues for the periods
indicated:

<TABLE>
<CAPTION>
YEAR ENDED
FEBRUARY 29, YEARS ENDED FEBRUARY 28, THREE MONTHS ENDED MAY 31,
--------------- ----------------------------------- -----------------------------------
1996 1997 1998 1997 1998
--------------- --------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $37,463 100.0% $55,528 100.0% $90,969 100.0% $13,180 100.0% $31,048 100.0%
Cost of revenues.............. 29,527 78.8 44,098 79.4 75,149 82.6 9,651 73.2 26,355 84.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit.................. 7,936 21.2 11,430 20.6 15,820 17.4 3,529 26.8 4,693 15.1
Selling, general and
administrative expenses..... 6,449 17.2 8,232 14.8 11,370 12.5 2,492 18.9 2,629 8.5
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations........ $ 1,487 4.0% $ 3,198 5.8% $ 4,450 4.9% $ 1,037 7.9% $ 2,064 6.6%
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
</TABLE>

RESULTS FOR THE THREE MONTHS ENDED MAY 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MAY 31, 1997 -- AIR SYSTEMS

Revenues. Revenues increased $17.9 million, or 135.6%, from $13.2 million
for the three months ended May 31, 1997 to $31.0 million for the three months
ended May 31, 1998, primarily due to an increase of approximately $17.3 million
from design, engineering and installation and maintenance, repair and
replacement projects for two existing clients in the electronics industry.

Gross profit. Gross profit increased $1.2 million, or 33.0%, from $3.5
million for the three months ended May 31, 1997 to $4.7 million for the three
months ended May 31, 1998. As a percentage of

<PAGE>

revenues, gross profit decreased from 26.8% to 15.1% due primarily to a higher
percentage of revenues coming from design, engineering and installation
projects, which generally have lower margins, and the impact of one project in
which costs are expected to exceed contract revenues by approximately $600,000.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $137,000, or 5.4%, from $2.5 million for the
three months ended May 31, 1997 to $2.6 million for the three months ended May
31, 1998. As a percentage of revenues, these expenses decreased from 18.9% to
8.5%. The decrease in selling, general and administrative expenses as a
percentage of revenues was due to increased revenues without a commensurate
increase in infrastructure. Excluding the Compensation Differential of $320,000
for the three months ended March 31, 1997 and $49,000 for the three months ended
March 31, 1998, selling, general and administrative expenses decreased as a
percentage of revenues from 16.5% to 8.3%.

RESULTS FOR THE YEAR ENDED FEBRUARY 28, 1998 COMPARED TO THE YEAR ENDED
FEBRUARY 28, 1997 -- AIR SYSTEMS

Revenues. Revenues increased $35.4 million, or 63.8%, from $55.5 million
for the year ended February 28, 1997 to $91.0 million for the year ended
February 28, 1998, primarily due to an increase of approximately $28.6 million
from two existing clients and $3.6 million as a result of two new clients. The
increase in Air Systems' revenue was primarily related to projects performed for
clients in the electronics industry. Approximately 41% and 50%, respectively, of
Air Systems' revenues for the fiscal years ended February 28, 1997 and 1998 were
generated by one client.

Gross profit. Gross profit increased $4.4 million, or 38.4%, from $11.4
million for the year ended February 28, 1997 to $15.8 million for the year ended
February 28, 1998. As a percentage of revenues, gross profit decreased from
20.6% for the year ended February 28, 1997 to 17.4% for the year ended February
28, 1998, due primarily to the impact of one project in which costs are expected
to exceed contract revenues by approximately $1.2 million.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $3.1 million, or 38.1%, from $8.2 million for
the year ended February 28, 1997 to $11.4 million for the year ended February
28, 1998. As a percentage of revenues, selling, general and administrative
expenses decreased from 14.8% to 12.5%. This decrease in selling, general and
administrative expenses as a percentage of revenues was primarily due to an
increase in administrative personnel time associated with specific contracts,
which are allocated to cost of revenues. Excluding the Compensation Differential
of $1.2 million for 1997 and $1.4 million for 1998, selling, general and
administrative expenses decreased as a percentage of revenues from 12.6% to
11.0%.

RESULTS FOR THE YEAR ENDED FEBRUARY 28, 1997 COMPARED TO THE YEAR ENDED
FEBRUARY 29, 1996 -- AIR SYSTEMS

Revenues. Revenues increased $18.1 million, or 48.2%, from $37.5 million
for the year ended February 29, 1996 to $55.5 million for the year ended
February 28, 1997. This increase was primarily due to new relationships with two
significant clients. These relationships were developed through increased sales
and marketing efforts targeted at general contractors with which Air Systems had
not previously done business. Approximately 30% and 41%, respectively, of Air
Systems' revenues for the fiscal years ended February 29, 1996 and February 28,
1997 were generated by one client.

Gross profit. Gross profit increased $3.5 million, or 44.0%, from $7.9
million for the year ended February 29, 1996 to $11.4 million for the year ended
February 28, 1997. As a percentage of revenues, gross profit decreased from
21.2% for the year ended February 29, 1996 to 20.6% for the year ended February
28, 1997, primarily due to the entry by Air Systems into additional large volume
contracts with lower overall margins.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.8 million, or 27.6%, from $6.4 million for
the year ended February 29, 1996 to $8.2 million for the year ended February 28,
1997. As a percentage of revenues, selling, general and administrative expenses
decreased from 17.2% to 14.8% as Air Systems was able to generate operating
leverage by maintaining

<PAGE>

relatively constant selling, general and administrative expenses despite the
increased activity. Excluding the Compensation Differential of $213,000 for 1996
and $1.2 million for 1997, selling, general and administrative expenses
decreased as a percentage of revenues from 16.6% to 12.6%.

LIQUIDITY AND CAPITAL RESOURCES -- AIR SYSTEMS

Air Systems used $5.2 million in net cash from operating activities for the
year ended February 28, 1998 and generated $2.8 million for the three months
ended May 31, 1998. Net cash used in investing activities was approximately $3.5
million and $493,000 for the year ended February 28, 1998 and the three months
ended May 31, 1998, respectively, principally for property and equipment
purchases. Net cash provided by financing activities was $8.7 million for the
year ended February 28, 1998, principally from proceeds from its line of credit
and long-term debt. Net cash used in financing activities for the three months
ended May 31, 1998 was $2.3 million, principally from a decreased cash overdraft
and repayments on its line of credit.

At May 31, 1998, Air Systems had working capital of $4.5 million and $9.7
million of total debt outstanding.

RESULTS OF OPERATIONS -- ENERGY SYSTEMS

Founded in 1947, Energy Systems primarily performs outsourced facility
services for its clients in 15 states, focusing on the on-site maintenance of
energy and indoor environmental systems.

For the year ended December 31, 1997, approximately 65.0% of Energy
System's revenues was derived from the on-site and off-site management of
building systems, and 35.0% was derived from maintenance, repair and replacement
services. For the three months ended March 31, 1998, approximately 67.9% of
Energy Systems' revenues was derived from the on-site and off-site management of
building systems, and 32.1% was derived from maintenance, repair and replacement
services.

The following table sets forth selected statement of operations data for
Energy Systems, and such data as a percentage of revenues for the periods
indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------------- -----------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues....................... $44,177 100.0% $48,069 100.0% $54,228 100.0% $11,265 100.0% $15,085 100.0%
Cost of revenues............... 36,498 82.6 40,299 83.8 45,893 84.6 9,390 83.4 12,999 86.2
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit................... 7,679 17.4 7,770 16.2 8,335 15.4 1,875 16.6 2,086 13.8
Selling, general and
administrative expenses...... 6,537 14.8 6,948 14.5 6,869 12.7 1,728 15.3 1,715 11.4
Employee stock compensation
(non-recurring).............. -- -- -- -- -- -- -- -- 1,816 12.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income (loss) from
operations................... $ 1,142 2.6% $ 822 1.7% $ 1,466 2.7% $ 147 1.3% $(1,445) (9.6)%
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
</TABLE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1997 -- ENERGY SYSTEMS

Revenues. Revenues increased $3.8 million, or 33.9%, from $11.3 million for
the three months ended March 31, 1997 to $15.1 million for the three months
ended March 31, 1998. This was primarily due to increases of $1.9 million in
on-site and off-site management of building systems, with the remainder of the
increase attributable to maintenance, repair and replacement services.

Gross profit. Gross profit increased $211,000, or 11.3%, from $1.9 million
for the three months ended March 31, 1997 to $2.1 million for the three months
ended March 31, 1998. As a percentage of revenues, gross profit decreased from
16.6% for the three months ended March 31, 1997 to 13.8% for the three months
ended March 31, 1998. This decrease was the result of the revenue growth
generated by on-site and off-site management of building systems, which
typically have lower margins. Management expects this current mix of business to
continue for the foreseeable future.

<PAGE>

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.8 million, or 104.3%, from $1.7 million for
the three months ended March 31, 1997 to $3.5 million for the three months ended
March 31, 1998. As a percentage of revenues, selling, general and administrative
expenses increased from 15.3% for the three months ended March 31, 1997 to 23.4%
for the three months ended March 31, 1998, primarily due to the compensation
expense relating to stock issued to the Chief Executive Officer. Excluding this
compensation expense of $1.8 million for the three months ended March 31, 1998,
selling, general and administrative expenses decreased as a percentage of
revenues from 15.3% for the three months ended March 31, 1997 to 11.4% for the
three months ended March 31, 1998.

RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1996 -- ENERGY SYSTEMS

Revenues. Revenues increased $6.2 million, or 12.8%, from $48.1 million for
the year ended December 31, 1996 to $54.2 million for the year ended December
31, 1997, primarily due to an increase of approximately $4.4 million in revenues
generated from on-site and off-site management of building systems. Of this
increase, the majority was generated by a new client contract which began in May
1997. The remaining increase in revenues was attributable to additional plan and
spec projects.

Gross profit. Gross profit increased $565,000, or 7.3%, from $7.8 million
for the year ended December 31, 1996 to $8.3 million for the year ended December
31, 1997. As a percentage of revenues, gross profit decreased from 16.2% for the
year ended December 31, 1996 to 15.4% for the year ended December 31, 1997 as a
result of an increase in on-site and off-site maintenance of building systems
which, although a recurring source of revenues, has lower margins.

Selling, general and administrative expenses. Selling, general and
administrative expenses remained at $6.9 million for each of the years ended
December 31, 1996 and 1997. As a percentage of revenues, selling, general and
administrative expenses decreased from 14.5% for the year ended December 31,
1996 to 12.7% for the year ended December 31, 1997 as Energy Systems was able to
generate operating leverage by maintaining the same level of selling, general
and administrative expenses despite the increased revenues. Excluding the
Compensation Differential of $268,000 for 1996 and $283,000 for 1997, selling,
general and administrative expenses decreased as a percentage of revenues from
13.9% to 12.1%.

RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1995 -- ENERGY SYSTEMS

Revenues. Revenues increased $3.9 million, or 8.8%, from $44.2 million for
the year ended December 31, 1995 to $48.1 million for the year ended December
31, 1996, primarily due to an increase of $3.5 million in revenues generated
from on-site and off-site management of building systems. Energy Systems was
able to obtain several on-site and off-site maintenance contracts in an expanded
geographic area during 1996 through further development of an existing client
relationship.

Gross profit. Gross profit increased $91,000, or 1.2%, from $7.7 million
for the year ended December 31, 1995 to $7.8 million for the year ended December
31, 1996. As a percentage of revenues, gross profit decreased from 17.4% for the
year ended December 31, 1995 to 16.2% for the year ended December 31, 1996 as a
result of the changing revenue mix. In 1996, more revenues were generated from
on-site and off-site management of building systems and plan and spec projects,
both of which have lower margins.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $411,000, or 6.3%, from $6.5 million for the
year ended December 31, 1995 to $6.9 million for the year ended December 31,
1996. This increase is due to expansion of Energy System's infrastructure in
order to support the continued growth of the business. As a percentage of
revenues, selling, general and administrative expenses decreased slightly from
14.8% for the year ended December 31, 1995 to 14.5% for the year ended December
31, 1996. Excluding the Compensation Differential of $294,000 for 1995 and
$268,000 for 1996, selling, general and administrative expenses decreased as a
percentage of revenues from 14.1% to 13.9%.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES -- ENERGY SYSTEMS

Energy Systems used net cash from operating activities of $646,000 for the
year ended December 31, 1997 and $14,000 for the three months ended March 31,
1998. Net cash used in investing activities was $21,000 for the year ended
December 31, 1997 and net cash provided by financing activities was $39,000 for
the three months ended March 31, 1998. Net cash provided by financing activities
in 1997 was $533,000, primarily driven by $436,000 used to purchase treasury
stock and $980,000 borrowed under long-term debt obligations. Net cash used in
financing activities for the three months ended March 31, 1998 was $25,000.

At March 31, 1998, Energy Systems had $2.0 million of working capital and
$2.4 million of total debt outstanding.

RESULTS OF OPERATIONS -- NEMSI

Founded in 1966, NEMSI specializes in performing design and build projects
at manufacturing and research facilities and on-site maintenance work at nuclear
power plants.

For the year ended December 31, 1997, approximately 59.8% of NEMSI's
revenues was derived from maintenance, repair and replacement services, 32.9%
was derived from design, engineering and installation services and 7.3% was
derived from on-site and off-site management of building systems. For the three
months ended March 31, 1998, approximately 65.2% of NEMSI's revenues was derived
from maintenance, repair and replacement services, 26.0% was derived from
design, engineering and installation services and 8.8% was derived from on-site
and off-site management of building systems.

The following table sets forth selected statement of operations data for
NEMSI, and such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
----------------------------------- ---------------------------------
1996 1997 1997 1998
--------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues.......................................... $30,457 100.0% $39,357 100.0% $8,349 100.0% $7,812 100.0%
Cost of revenues.................................. 23,407 76.9 31,217 79.3 6,213 74.4 5,759 73.7
------- ----- ------- ----- ------ ----- ------ -----
Gross profit...................................... 7,050 23.1 8,140 20.7 2,136 25.6 2,053 26.3
Selling, general and administrative expenses...... 5,448 17.8 6,502 16.5 1,314 15.8 1,557 20.0
Employee stock compensation (non-recurring)....... -- -- 795 2.1 -- -- -- --
------- ----- ------- ----- ------ ----- ------ -----
Income from operations............................ $ 1,602 5.3% $ 843 2.1% $ 822 9.8% $ 496 6.3%
------- ----- ------- ----- ------ ----- ------ -----
------- ----- ------- ----- ------ ----- ------ -----
</TABLE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1997 -- NEMSI

Revenues. Revenues decreased $537,000, or 6.4%, from $8.3 million for the
three months ended March 31, 1997 to $7.8 million for the three months ended
March 31, 1998, primarily due to a lower backlog of work at the beginning of the
three months ended March 31, 1998 and delays in the scheduled start dates of
certain new projects.

Gross profit. Gross profit was slightly lower for the three months ended
March 31, 1998 compared to the three months ended March 31, 1997. As a
percentage of revenues, gross profit increased from 25.6% to 26.3%, primarily
due to a shift in sales mix towards maintenance, repair and replacement services
which generally have higher margins for NEMSI than design, engineering and
installation projects.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $243,000, or 18.5%, from $1.3 million for the
three months ended March 31, 1997 to $1.6 million for the three months ended
March 31, 1998. As a percentage of revenues, these expenses increased from 15.8%
to 20.0%, primarily due to the hiring of additional supervisory and sales
personnel during 1997 in order to support the long-term growth of the business.
Excluding the Compensation Differential of $95,000 for the three months ended
March 31, 1997 and $115,000 for the three months ended March 31, 1998, selling,
general and administrative expenses as a percentage of revenues increased from
14.6% to 18.5%.

<PAGE>

RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1996 -- NEMSI

Revenues. Revenues increased $8.9 million, or 29.2%, from $30.5 million for
the year ended December 31, 1996 to $39.4 million for the year ended December
31, 1997. Revenues increased primarily as a result of a robust construction
market due to continued strength in the economy of the northeast United States.

Gross profit. Gross profit increased $1.1 million, or 15.5%, from $7.1
million for the year ended December 31, 1996 to $8.1 million for the year ended
December 31, 1997. As a percentage of revenues, gross profit decreased from
23.1% to 20.7%, primarily due to the impact of one project in which costs are
expected to exceed contract revenues by approximately $500,000. To a lesser
degree, the gross profit percentage decreased due to a changed sales mix, with
more revenues being generated from lower margin construction and installation
services.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.8 million, or 33.9%, from $5.4 million for
the year ended December 31, 1996 to $7.3 million for the year ended December 31,
1997. A large portion of the increase was attributable to a one-time
compensation expense charge of approximately $665,000 relating to the issuance
of shares to employees and bonuses of approximately $130,000, recognized in the
fourth quarter of 1997. As a percentage of revenues, selling, general and
administrative expenses increased from 17.8% for the year ended December 31,
1996 to 18.6% for the year ended December 31, 1997. Excluding the stock
compensation expense recognized in the fourth quarter of 1997, selling, general
and administrative expenses as a percentage of revenues decreased from 17.8% to
16.5%.

LIQUIDITY AND CAPITAL RESOURCES -- NEMSI

NEMSI generated $809,000 in net cash from operating activities for the year
ended December 31, 1997 and $221,000 for the three months ended March 31, 1998.
For the year ended December 31, 1997 and the three months ended March 31, 1998,
net cash used in investing activities was approximately $772,000 and $87,000,
principally for equipment purchases. Net cash provided by financing activities
for the year ended December 31, 1997 was approximately $48,000, representing net
repayments of debt. Net cash used in financing activities for the three months
ended March 31, 1998 was approximately $275,000, consisting principally of
payments on debt.

At March 31, 1998, NEMSI had working capital of $1.5 million and $3.8
million of total debt outstanding (including capital leases).

RESULTS OF OPERATIONS -- LEE

Founded in 1944, Lee specializes in the design, engineering and
installation of energy and indoor environmental systems and possesses
specialized expertise relating to health care facility projects.

For the year ended December 31, 1997, approximately 64.0% of Lee's revenues
was derived from design, engineering and installation services and 36.0% was
derived from maintenance, repair and replacement services. For the three months
ended March 31, 1998, approximately 70.1% of Lee's revenues was derived from
design, engineering and installation services and 29.9% was derived from
maintenance, repair and replacement services.

The following table sets forth selected statement of operations data for
Lee, and such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
----------------------------------- ----------------------------------
1996 1997 1997 1998
--------------- --------------- -------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......................................... $34,639 100.0% $39,681 100.0% $6,682 100.0% $12,806 100.0%
Cost of revenues................................. 26,541 76.6 30,316 76.4 4,914 73.5 9,416 73.5
------- ----- ------- ----- ------ ----- ------- -----
Gross profit..................................... 8,098 23.4 9,365 23.6 1,768 26.5 3,390 26.5
Selling, general and administrative expenses..... 6,663 19.3 7,325 18.5 1,328 19.9 1,888 14.8
------- ----- ------- ----- ------ ----- ------- -----
Income from operations........................... $ 1,435 4.1% $ 2,040 5.1% $ 440 6.6% $ 1,502 11.7%
------- ----- ------- ----- ------ ----- ------- -----
------- ----- ------- ----- ------ ----- ------- -----
</TABLE>

<PAGE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1997 -- LEE

Revenues. Revenues increased $6.1 million, or 91.6%, from $6.7 million for
the three months ended March 31, 1997 to $12.8 million for the three months
ended March 31, 1998 primarily due to an increase of approximately $5.1 million
related to design, engineering and installation projects, primarily for clients
in the healthcare and energy services sector and an increase of approximately
$1.1 million related to maintenance, repair and replacement services.

Gross profit. Gross profit increased $1.6 million, or 91.7%, from $1.8
million for the three months ended March 31, 1997 to $3.4 million for the three
months ended March 31, 1998. As a percentage of revenues, gross profit remained
constant at 26.5% for both periods.

Selling, general and administrative expenses. Selling general and
administrative expenses increased $560,000, or 42.2%, from $1.3 million for the
three months ended March 31, 1997 to $1.9 million for the three months ended
March 31, 1998. As a percentage of revenues, selling, general and administrative
expenses decreased from 19.9% for the three months ended March 31, 1997 to 14.8%
for the three months ended March 31, 1998, as Lee was able to generate increased
revenues without commensurate increases in infrastructure. Excluding the
Compensation Differential of $152,000 for the three months ended March 31, 1997
and $237,000 for the three months ended March 31, 1998, selling, general and
administrative expenses as a percentage of revenues decreased from 17.6% to
12.9%.

RESULTS FOR YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31,
1996 -- LEE

Revenues. Revenues increased $5.0 million, or 14.6%, from $34.6 million for
the year ended December 31, 1996 to $39.7 million for the year ended December
31, 1997, due to an increase of approximately $3.0 million attributable to new
design, engineering and installation projects and approximately $2.0 million
attributable to maintenance, repair and replacement services. The increase was
primarily related to new design, engineering and installation projects,
generally related to clients in the healthcare and energy services industries,
which occurred generally during the third and fourth quarters of the year ended
December 31, 1997. Lee's additional revenues from maintenance, repair and
replacement services resulted from hiring additional sales and marketing
personnel to more successfully target its selling efforts and resulted in an
increase in trade accounts receivable at December 31, 1997.

Gross profit. Gross profit increased $1.3 million, or 15.6%, from $8.1
million for the year ended December 31, 1996 to $9.4 million for the year ended
December 31, 1997. As a percentage of revenues, gross profit remained relatively
constant.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $662,000, or 9.9%, from $6.7 million for the
year ended December 31, 1996 to $7.3 million for the year ended December 31,
1997 as a result of additional commissions paid to new sales personnel. As a
percentage of revenues, selling, general and administrative expenses decreased
from 19.3% for the year ended December 31, 1996 to 18.5% for the year ended
December 31, 1997 as Lee was able to generate additional revenues without a
commensurate increase in infrastructure. Excluding the Compensation Differential
of $1.2 million for 1996 and $1.0 million for 1997, selling, general and
administrative expenses increased as a percentage of revenues from 15.7% to
15.9%.

LIQUIDITY AND CAPITAL RESOURCES -- LEE

Lee used $563,000 in net cash in operating activities for the year ended
December 31, 1997 and generated $1.1 million in net cash from operating
activities for the three months ended March 31, 1998. Accounts receivable
increased from December 31, 1996 to December 31, 1997, reflecting the increase
in revenues which, for new construction projects, was weighted more heavily
toward the third and fourth quarters of 1997. Net cash used in investing
activities was approximately $301,000 for the year ended December 31, 1997 and
$57,000 for the three months ended March 31, 1998, principally for property and
equipment purchases. Net cash provided by financing activities was $899,000 for
the year ended December 31, 1997, principally from proceeds of Lee's revolving
credit agreement and the sale of its new corporate headquarters building. Net
cash used in financing activities was $947,000 for the three months ended March
31, 1998, principally due to payments on its line of credit.

<PAGE>

At March 31, 1998, Lee had working capital of $3.5 million and $3.1 million
of total debt outstanding, including capital lease obligations.

RESULTS OF OPERATIONS -- HILL YORK

Founded in 1936, Hill York specializes in the design, fabrication,
installation and service of energy and indoor environmental systems in high rise
luxury condominiums, hotels, universities and convention centers throughout
South Florida.

For the year ended December 31, 1997, approximately 76.8% of Hill York's
revenues was derived from design, engineering and installation services and
23.2% was derived from maintenance, repair and replacement services. For the
three months ended March 31, 1998, approximately 77.2% of Hill York's revenues
was derived from design, engineering and installation services and 22.8% was
derived from maintenance, repair and replacement services.

The following table sets forth selected statement of operations data for
Hill York, and such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, NINE MONTHS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
----------------------------------- ----------------------------------- ---------------------------------
1996 1997 1996 1997 1997 1998
--------------- --------------- --------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues....... $28,667 100.0% $31,430 100.0% $23,123 100.0% $25,863 100.0% $8,307 100.0% $9,126 100.0%
Cost of
revenues..... 22,526 78.6 24,121 76.7 18,002 77.9 20,432 79.0 6,118 73.6 7,084 77.6
------- ----- ------- ----- ------- ----- ------- ----- ------ ----- ------ -----
Gross profit... 6,141 21.4 7,309 23.3 5,121 22.1 5,431 21.0 2,189 26.4 2,042 22.4
Selling,
general and
administrative
expenses..... 5,758 20.1 6,992 22.3 4,985 21.5 5,082 19.7 2,007 24.2 1,846 20.3
------- ----- ------- ----- ------- ----- ------- ----- ------ ----- ------ -----
Income from
operations... $ 383 1.3% $ 317 1.0% $ 136 0.6% $ 349 1.3% $ 182 2.2% $ 196 2.1%
------- ----- ------- ----- ------- ----- ------- ----- ------ ----- ------ -----
------- ----- ------- ----- ------- ----- ------- ----- ------ ----- ------ -----
</TABLE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1997 -- HILL YORK

Revenues. Revenues increased $819,000, or 9.9%, from $8.3 million for the
three months ended March 31, 1997 to $9.1 million for the three months ended
March 31, 1998, primarily due to an increase in the average size of new
construction projects and an increase in maintenance contracts as a result of
Hill York's geographic expansion.

Gross profit. Gross profit decreased $147,000, or 6.7%, from $2.2 million
for the three months ended March 31, 1997 to $2.0 million for the three months
ended March 31, 1998, primarily as a result of a large, higher-margin project in
1997. As a percentage of revenues, gross profit decreased from 26.4% to 22.4%.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $161,000, or 8.0%, from $2.0 million for the
three months ended March 31, 1997 to $1.8 million for the three months ended
March 31, 1998. As a percentage of revenues, these expenses decreased from 24.2%
to 20.3%, primarily as a result of larger bonuses paid in the three months ended
March 31, 1997. Excluding the Compensation Differential of $352,000 in the three
months ended March 31, 1997 and $273,000 in the three months ended March 31,
1998, selling, general and administrative expenses as a percentage of revenues
decreased from 19.9% to 17.2%.

RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE NINE MONTHS
ENDED DECEMBER 31, 1996 -- HILL YORK

Revenues. Revenues increased $2.7 million, or 11.8%, from $23.1 million for
the nine months ended December 31, 1996 to $25.9 million for the nine months
ended December 31, 1997. This increase was primarily attributable to revenues
from two large condominium projects.

Gross profit. Gross profit increased $310,000, or 6.1%, from $5.1 million
for the nine months ended September 30, 1996 to $5.4 million for the nine months
ended September 30, 1997. As a percentage of revenues, gross profit decreased
from 22.1% for the nine months ended September 30, 1996 to 21.0%

<PAGE>

for the nine months ended September 30, 1997. The decrease in gross profit as a
percentage of revenues was primarily attributable to the impact of one project
in which costs are expected to exceed contract revenues by approximately
$125,000.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $97,000, or 1.9%, from $5.0 million for the
nine months ended September 30, 1996 to $5.1 million for the nine months ended
September 30, 1997. As a percentage of revenues, selling, general and
administrative expenses decreased from 21.5% for the nine months ended September
30, 1996 to 19.7% for the nine months ended September 30, 1997 as Hill York was
able to generate additional revenues without a commensurate increase in
infrastructure. Excluding the Compensation Differential of $658,000 for 1996 and
$616,000 for 1997, selling, general and administrative expenses decreased as a
percentage of revenues from 18.7% to 17.3%.

RESULTS FOR THE YEAR ENDED MARCH 31, 1997 COMPARED TO YEAR ENDED MARCH 31,
1996 -- HILL YORK

Revenues. Revenues increased by $2.8 million, or 9.6%, from $28.7 million
for year ended March 31, 1996 to $31.4 million for the year ended March 31, 1997
as a result of additional sales and marketing efforts.

Gross profit. Gross profit increased $1.2 million, or 19.0%, from $6.1
million for the year ended March 31, 1996 to $7.3 million for the year ended
March 31, 1997. As a percentage of revenues, gross profit increased from 21.4%
for the year ended March 31, 1996 to 23.3% for the year ended March 31, 1997.
The increase in gross profit as a percentage of revenues was primarily
attributable to an improved mix of projects with higher margins.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.2 million, or 21.4%, from $5.8 million for
the year ended March 31, 1996 to $7.0 million for the year ended March 31, 1997.
As a percentage of revenues, selling, general and administrative expenses
increased from 20.1% for the year ended March 31, 1996 to 22.3% for the year
ended March 31, 1997. Excluding the Compensation Differential of $577,000 for
1996 and $1.0 million for 1997, selling, general and administrative expenses
increased as a percentage of revenues from 18.1% to 19.0%.

LIQUIDITY AND CAPITAL RESOURCES -- HILL YORK

Hill York used $20,000 in net cash from operating activities for the nine
months ended December 31, 1997 and generated $166,000 in net cash from operating
activities for the three months ended March 31, 1998. Net cash used in investing
activities was $128,000 for the nine months ended December 31, 1997 and $37,000
for the three months ended March 31, 1998, principally resulting from purchases
of property and equipment. Net cash used in financing activities was $54,000 for
the nine months ended December 31, 1997 and $44,000 for the three months ended
March 31, 1998, primarily representing payments of capital lease obligations and
debt.

At March 31, 1998, Hill York had working capital of $1.1 million and total
debt outstanding of $619,000.

RESULTS OF OPERATIONS -- MECHANICAL SERVICES

Founded in 1974, Mechanical Services focuses on design and build projects
and provides operation and maintenance services, primarily in Florida.

For the year ended December 31, 1997, approximately 64.1% of Mechanical
Services' revenues was derived from maintenance, repair and replacement services
and approximately 35.9% were derived from design engineering and installation
services. For the three months ended March 31, 1998, approximately 58.1% of
Mechanical Services' revenues was derived from maintenance, repair and
replacement services and 41.9% was derived from design, engineering and
installation services.

<PAGE>

The following table sets forth selected statement of operations data for
Mechanical Services, and such data as a percentage of revenues for the periods
indicated:

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
YEAR ENDED ------------------------------------
DECEMBER 31, 1997 1997 1998
----------------- ---------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues................................................... $28,279 100.0% $7,378 100.0% $5,567 100.0%
Cost of revenues........................................... 24,511 86.7 6,611 89.6 4,928 88.5
------- ------ ------ ------ ------ ------
Gross profit............................................... 3,768 13.3 767 10.4 639 11.5
Selling, general and administrative expenses............... 2,530 8.9 640 8.7 510 9.2
------- ------ ------ ------ ------ ------
Income from operations..................................... $ 1,238 4.4% $ 127 1.7% $ 129 2.3%
------- ------ ------ ------ ------ ------
------- ------ ------ ------ ------ ------
</TABLE>

RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS
ENDED MARCH 31, 1997 -- MECHANICAL SERVICES

Revenues. Revenues decreased $1.8 million, or 24.5%, from $7.4 million for
the three months ended March 31, 1997 to $5.6 million for the three months ended
March 31, 1998, principally as a result of several large installation jobs which
were in process during the three months ended March 31, 1997.

Gross profit. Gross profit decreased $128,000, or 16.7%, from $767,000 for
the three months ended March 31, 1997 to $639,000 for the three months ended
March 31, 1998. As a percentage of revenues, gross profit increased from 10.4%
to 11.5% as a result of a number of smaller projects which generally have higher
margins.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $130,000, or 20.3%, from $640,000 for the
three months ended March 31, 1997 to $510,000 for the three months ended March
31, 1998 due to decreased discretionary bonuses to employees and management as
well as increased cost reduction efforts by Mechanical Services during the three
months ended March 31, 1998. As a percentage of revenues, selling, general and
administrative expenses increased from 8.7% to 9.2%.

LIQUIDITY AND CAPITAL RESOURCES -- MECHANICAL SERVICES

Mechanical Services generated $235,000 in net cash from operating
activities for the three months ended March 31, 1998. Net cash used in investing
activities was approximately $6,000, principally for property and equipment
purchases. Net cash used in financing activities was $9,000, representing
repayment under a revolving credit agreement.

At March 31, 1998, Mechanical Services had working capital of $3.4 million
and $45,000 of total debt outstanding.

RESULTS OF OPERATIONS -- AIRCOND

Founded in 1937, Aircond focuses on the maintenance, repair and replacement
of energy and indoor environmental systems. With over 130 technicians, Aircond
is one of the largest service providers of such systems in the Southeast.

For the year ended December 31, 1997, approximately 92.9% of Aircond's
revenues was derived from maintenance, repair and replacement services and 7.1%
was derived from design, engineering and installation services. For the three
months ended March 31, 1998, approximately 92.5% of Aircord's revenues was
derived from maintenance, repair and replacement services and 7.5% was derived
from design, engineering and installation services.

<PAGE>

The following table sets forth selected statement of operations data for
Aircond, and such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
------------------------------------------------------- -------------------------------------
1995 1996 1997 1997 1998
--------------- --------------- --------------- --------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $25,225 100.0% $26,830 100.0% $26,935 100.0% $12,023 100.0% $13,191 100.0%
Cost of revenues.............. 17,174 68.1 17,284 64.4 17,509 65.0 7,913 65.8 8,676 65.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit.................. 8,051 31.9 9,546 35.6 9,426 35.0 4,110 34.2 4,515 34.2
Selling, general and
administrative expenses..... 6,273 24.9 7,487 27.9 7,731 28.7 3,687 30.7 3,826 29.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations........ $ 1,778 7.0% $ 2,059 7.7% $ 1,695 6.3% $ 423 3.5% $ 689 5.2%
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
</TABLE>

RESULTS FOR THE SIX MONTHS ENDED MARCH 31, 1998 COMPARED TO THE SIX MONTHS ENDED
MARCH 31, 1997 -- AIRCOND

Revenues. Revenues increased $1.2 million, or 9.7%, from $12.0 million for
the six months ended March 31, 1997 to $13.2 million for the six months ended
March 31, 1998, principally as a result of increased sales of maintenance,
repair and replacement services to existing clients.

Gross profit. Gross profit increased $405,000, or 9.9%, from $4.1 million
for the six months ended March 31, 1997 to $4.5 million for the six months ended
March 31, 1998. As a percentage of revenues, gross profit remained constant at
34.2% for the six months ended March 31, 1997 and 1998.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $139,000, or 3.8%, from $3.7 million for the
six months ended March 31, 1997 to $3.8 million for the six months ended March
31, 1998. As a percentage of revenues, selling, general and administrative
expenses decreased from 30.7% for the six months ended March 31, 1997 to 29.0%
for the six months ended March 31, 1998. Excluding the Compensation Differential
of $28,000 for 1997 and $37,000 for 1998, selling, general and administrative
expenses decreased as a percentage of revenues from 30.4% to 28.7%.

RESULTS FOR THE YEAR ENDED SEPTEMBER 30, 1997 COMPARED TO YEAR ENDED
SEPTEMBER 30, 1996 -- AIRCOND

Revenues. Revenues remained constant at $26.8 million for the year ended
September 30, 1996 and $26.9 million for the year ended September 30, 1997.

Gross profit. Gross profit decreased $120,000, or 1.3%, from $9.5 million
for the year ended September 30, 1996 to $9.4 million for the year ended
September 30, 1997. As a percentage of revenues, gross profit decreased from
35.6% to 35.0%, due to increased labor costs.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $244,000, or 3.3%, from $7.5 million for the
year ended September 30, 1996 to $7.7 million for the year ended September 30,
1997. As a percentage of revenues, selling, general and administrative expenses
increased from 27.9% to 28.7% due to increased discretionary bonuses to
management. Excluding the Compensation Differential of $437,000 for the year
ended September 30, 1996 and $1.1 million for the year ended September 30, 1997,
selling, general and administrative expenses decreased as a percentage of
revenues from 26.3% to 24.5%.

RESULTS FOR THE YEAR ENDED SEPTEMBER 30, 1996 COMPARED TO YEAR ENDED
SEPTEMBER 30, 1995 -- AIRCOND

Revenues. Revenues increased $1.6 million, or 6.4%, from $25.2 million for
the year ended September 30, 1995 to $26.8 million for the year ended September
30, 1996. This increase in revenues was primarily attributable to successful
sales efforts targeted to obtaining more maintenance, repair and replacement
services and Aircond expanding its geographic penetration in North Carolina and
South Carolina markets.

Gross profit. Gross profit increased $1.5 million, or 18.6%, from $8.1
million for the year ended September 30, 1995 to $9.5 million for the year ended
September 30, 1996. As a percentage of revenues,

<PAGE>

gross profit increased from 31.9% to 35.6% as a result of Aircond's ability to
support higher levels of maintenance, repair and replacement services with
consistent numbers of service and repair technicians.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.2 million, or 19.4%, from $6.3 million for
the year ended September 30, 1995 to $7.5 million for the year ended September
30, 1996. As a percentage of revenues, selling, general and administrative
expenses increased from 24.9% for the year ended September 30, 1995 to 27.9% for
the year ended September 30, 1996 as a result of increased commissions,
management incentives and bonuses. Excluding the Compensation Differential of
$414,000 for 1996 and $437,000 for 1995, selling, general and administrative
expenses increased as a percentage of revenues from 23.2% to 26.3%.

LIQUIDITY AND CAPITAL RESOURCES -- AIRCOND

Aircond generated net cash from operating activities of approximately $1.6
million and $384,000, respectively, for the year ended September 30, 1997 and
the six months ended March 31, 1998. Net cash provided by investing activities
for the year ended September 30, 1997 was approximately $183,000, principally
resulting from purchases of property and equipment. Net cash provided by
investing activities for the six months ended March 31, 1998 was approximately
$451,000, principally resulting from the cash surrender value of approximately
$556,000 from the redemption of a life insurance policy. Net cash used in
financing activities was $1.4 million for the year ended September 30, 1997 and
$805,000 for the six months ended March 31, 1998, representing repayment of
capital lease obligations of $653,000 and $359,000, respectively, and
distributions to stockholders of approximately $777,000 and $446,000,
respectively.

At March 31, 1998, Aircond had working capital of $5.0 million and $4.3
million of total debt outstanding.

<PAGE>

BUSINESS

INTRODUCTION

Seven of the eight Founding Companies have worked together in industry peer
groups for over 10 years. All of the Founding Companies are 'best-of-class'
service providers with specialized and complementary expertise and have been
recognized by industry organizations for their high-quality service and
innovative client solutions. Six of the eight Founding Companies have been named
'Commercial Contractor of the Year,' an award presented annually by Contracting
Business magazine to the most progressive and professional organization in the
commercial HVAC business. The Company has established strategic partnerships
with several energy providers and financial institutions as a means to provide
innovative and cost effective energy and indoor environmental solutions to its
clients. The Founding Companies had combined revenues of $364.8 million for
fiscal year 1997, representing a compound annual growth rate of 21.9% from
fiscal year 1995. The Company's business and internal growth strategies, as well
as its emphasis on strategic partnerships and acquisitions, are focused on
achieving its goal of becoming the leading national provider of energy and
indoor environmental systems and services.

INDUSTRY OVERVIEW

There are two broad segments of the HVAC and related services industry: (i)
the maintenance, repair and replacement segment, representing approximately 66%
of industry revenues; and (ii) the design, engineering and installation segment,
representing approximately 34% of industry revenues. Maintenance and repair
services are typically performed on either a fixed schedule under service
contracts or on an as needed basis in response to service calls. Replacement
services include full or partial replacement of HVAC and other energy and indoor
environmental systems, or components thereof. Design, engineering and
installation projects are obtained either on a negotiated design and build basis
('design and build') or on a low bid or plan specification basis ('plan and
spec'). In design and build projects, the service provider works directly with
the end user of the system and designs, engineers and installs a system
specifically tailored to the client's needs. In plan and spec projects, the
system is designed by an architect or engineer, who has primary responsibility
for the client relationship and who selects an energy and indoor environmental
systems and services firm to assemble and install the system based on a
competitive bid process. Typically, design and build projects require a higher
level of technical expertise, result in closer client relationships and create
greater opportunities to provide value-added services that often generate higher
margins.

The two broad segments of the industry are complemented by a wide range of
outsourced facility services. As businesses focus on their core competencies and
as indoor environmental systems become more expensive, complex and technical,
clients are increasingly outsourcing their HVAC and other

<PAGE>

mechanical service needs to experienced providers of such services. Such
providers offer an array of outsourced mechanical services and expertise,
including the ongoing operation, maintenance and monitoring of energy and indoor
environmental systems and the performance of related energy management
functions. Outsourced facility operation and maintenance services are generally
provided for a monthly or quarterly fee, and are often a source of significant
new business opportunities to provide additional services to the client,
including maintenance, repair and replacement services and design, engineering
and installation services.

An important factor affecting the energy and indoor environmental services
industry is the deregulation of the U.S. gas and electric utility industries. As
these industries become further deregulated, the Company anticipates that
utilities and other energy providers will continue to establish strategic
partnerships with providers of energy and indoor environmental systems and
services in order to attract utility customers in an increasingly competitive
market. These partnerships are offering customers a broad range of services and
utilities on a variable cost per unit basis without the need for customers to
make significant capital expenditures on energy and indoor environmental
systems. The Company believes that these strategic partnerships will decrease
energy costs and improve marketing and customer service, resulting in increased
demand for energy and indoor environmental systems and services.

The energy and indoor environmental services industry has been undergoing
significant consolidation. Factors fueling consolidation include: (i) the
fragmented nature of the industry, which has been typified by small owner
operated businesses that are located in a single geographic area and that have
limited access to capital for modernization and expansion; (ii) the increasing
desire of companies to limit the number of energy and indoor environmental
service companies with which they contract; (iii) the threat of increased
competition from larger entities with greater financial resources, resulting in
part from the deregulation of the U.S. gas and electric utility industries; and
(iv) consolidation in the ownership and management of commercial real estate.

BUSINESS STRATEGY

Create a Single Source Provider of Energy and Indoor Environmental Systems
and Services. The Company intends to capitalize on the increasing desire of
clients for a single source of service for all of their energy and indoor
environmental systems and services requirements. Upon the completion of this
Offering, the Company will be able to provide clients with a broad range of
bundled and complementary services, including the design, engineering and
installation of energy and indoor environmental systems, the subsequent
maintenance and repair of such installed systems, the monitoring and maintenance
of internal air quality control levels and the eventual replacement of equipment
at the end of each system's useful life. The Company believes that by focusing
on contracts to operate and maintain all of a client's energy and indoor
environmental systems and by providing a broad array of complementary services,
it will generate significant additional revenues from its projects, realize a
recurring stream of revenues and continue to foster long-term relationships with
its clients.

Strategic Partnerships. The Company will seek to form additional strategic
relationships with utilities and other energy providers to satisfy the full
range of a client's energy and indoor environmental systems needs. For example,
the Company and its strategic partners may: (i) provide a client with gas,
electrical power, cooled air or water, heat or lighting; (ii) design, install
and maintain the client's energy and indoor environmental systems; (iii) operate
central energy plants; (iv) provide financing for the design, engineering and
installation of new energy and environmental systems; and (v) monitor the indoor
air quality of the client's facility. The Company anticipates that these
partnerships will result in lower energy costs and greater client satisfaction
as a client's full range of energy and indoor environmental systems and services
needs are provided and paid for through a single source. By creating an
attractive alternative to the traditional means of satisfying a client's needs,
the Company believes that strategic partnerships will provide the Company with
an advantage over many of its competitors, additional business opportunities and
increased revenues.

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The following is an example of the benefits of strategic partnering among
energy providers and providers of indoor environmental systems and services:

Lee has a strategic relationship with Enron Energy Services, Inc., an
unregulated, national energy services provider. Through this relationship,
a Nashville-based non-woven fabrics manufacturer was able to take advantage
of Enron's ability to integrate energy, finance and Lee's contracting
expertise to provide compressed air and chilled water services to support a
new manufacturing expansion project. Rather than the manufacturer making a
capital investment for the compressed air and chilled water plant, the
system was financed by Enron, with the repayment of capital included in the
monthly payment for compressed air and chilled water services, along with
the charges for energy, maintenance and operations. Maintenance and
operations for the plant will be provided by Lee through a 10-year service
agreement with Enron.

The Company anticipates that as deregulated utilities seek to access clients
directly, they will enter the energy and indoor environmental systems and
services market through these types of strategic partnerships. The Company
intends to seek out and participate in a variety of strategic partnerships with
utilities.

Leverage Founding Company Engineering and Technical Expertise. Each of the
Founding Companies has a specialized expertise and a strong reputation in its
offerings of energy and indoor environmental systems and services. Hill York,
for example, has extensive experience in the design, engineering and
installation of energy and indoor environmental systems in high rise
condominiums and hotels. Mechanical Services and Air Systems have specialized
expertise in the design, engineering and installation of indoor environmental
systems for high tech industrial clients, including the highly specialized
construction of 'clean rooms,' and Air Systems has technical expertise with high
purity and toxic gas process piping. The Company believes that by leveraging the
engineering and technical expertise of the Founding Companies and subsequently
acquired businesses, the Company will be able to more effectively secure new
contracts, better service existing client needs and continue to develop
significant long-term client relationships.

Focus on High Quality Client Service. The Company believes that maintaining
a high level of service and satisfaction is integral to attracting and retaining
clients. The Founding Companies have a strong commitment to quality and client
satisfaction and conduct regular client performance reviews. The Company
believes that the quality of its services enables it to establish and maintain
long-term relationships with many of its clients. The Company further believes
that its reputation for creating high quality solutions directed at a client's
specific requirements is an important differentiating factor from its
competitors and enables the Company to compete on a basis other than price.

Attract, Train and Retain Highly Qualified Technicians and Engineers. The
Company is focused on attracting and retaining a highly trained and motivated
workforce in order to consistently deliver innovative client solutions and
high-quality service. The Company's strategy is to become the employer of choice
in each of the markets in which it operates by offering its employees: (i)
comprehensive ongoing internal technical training programs throughout their
careers; (ii) competitive compensation and employee benefits; (iii) career
development opportunities; and (iv) equity participation in the Company's
success. The Company believes that it has the training expertise and capital
resources to better attract and retain a highly qualified work force than its
competitors.

Operate With a Decentralized Management Strategy. The Company believes that
the experienced management teams at the Founding Companies have a valuable
understanding of their respective markets and businesses and have existing
client relationships upon which they will continue to capitalize. Accordingly,
the Company expects to continue to operate with a decentralized management
strategy. Senior management at the Founding Companies will remain empowered to
make most of the day-to-day operating decisions at each location and will be
primarily responsible for the profitability and growth of their business.
Although the Company intends to allow management at the Founding Companies to
operate with a high degree of autonomy, the Company believes that regular
communication between the individual businesses and the Company's executive
management team will be integral to realizing the benefits afforded by the
consolidation of these businesses into a single company.

<PAGE>

GROWTH STRATEGY

The Company believes that there are significant opportunities to expand its
business and further penetrate the market for energy and indoor environmental
systems and services. The significant elements of the Company's growth
strategies are as follows:

Internal Growth. While the Company intends to acquire additional energy and
indoor environmental systems service companies, strong internal growth remains
the core of the Company's growth strategy. The key elements for such internal
growth are as follows:

Cross-Selling of Client Services. The Company believes it will be able
to increase its revenues from existing clients by taking advantage of
cross-selling opportunities among the Founding Companies and other acquired
companies. Through interaction at industry peer group meetings and their
reputations as 'best-of-class' service providers, certain of the Founding
Companies have already begun to leverage their client relationships by
recommending each other for significant business opportunities. For
example, in connection with Lee's mechanical construction contract to
design, build and install the air conditioning, plumbing and process piping
systems for an industrial plant of SKF U.S.A., Inc. ('SKF'), a motor
bearings manufacturer in South Carolina, Lee sought a reliable regional
service provider to manage the one-year warranty offered by Lee in
connection with the project. Lee chose Aircond to manage such warranty and,
based upon the subsequent relationship that developed between Aircond and
SKF, Aircond is currently negotiating a service contract with SKF for the
ongoing maintenance and repair of the installed systems beyond the one-year
warranty period.

Expand Market Coverage. The Company believes that significant demand
exists from large national companies to utilize the services of a single
company capable of providing comprehensive energy and indoor environmental
systems and services on a regional or national basis. Many of the Founding
Companies already provide local or regional coverage to companies with
locations nationwide, such as commercial real estate developers and
managers, real estate investment trusts, hotels and retail establishments,
including a number of Fortune 500 companies. The Company believes these
existing relationships can be expanded as the Company develops a nationwide
network. In addition, the Company may open new offices in order to meet the
potential needs of new and existing clients and local market demand.

Achieve Operating Efficiencies through Best Practices and Economies of
Scale. The Company believes that there are significant opportunities to
achieve operating efficiencies and cost savings and to provide superior
client service through the adoption of 'best practices' operating programs.
The Company intends to establish a program in which it will periodically
review its operations and training programs at the local and regional
levels in order to identify those practices that can be successfully
implemented throughout its nationwide operations. For example, the Company
intends to use the highly regarded training program of Aircond as a model
for all the Founding Companies and other acquired companies. The Company
also expects to achieve operating efficiencies and cost savings through
purchasing economies of scale. The Company intends to use its increased
purchasing power to gain volume discounts in areas such as system
components, raw materials, service vehicles, telecommunications,
advertising, bonding and insurance.

Growth Through Acquisitions. The Company intends to capitalize on the
highly fragmented nature of the energy and indoor environmental systems and
services industry by implementing a strategic acquisition program following this
Offering. The Company will seek to acquire companies that are 'best-of-class'
local or regional providers of energy and indoor environmental systems and
services. In order to identify 'best-of-class' providers, the Company will look
for, among other things, companies that: (i) have annual revenues of at least $8
million and a strong history of internal growth ; (ii) have core competencies
that complement or add to the Company's services; (iii) have a reputation for
high levels of client service; and (iv) are constantly seeking new ways to
improve their business. The Company believes that 'best-of-class' companies
demonstrate the foregoing characteristics and each is generally a premier
provider of energy and indoor environmental systems and services in the market
it serves.

<PAGE>

Together with the Founding Companies, acquisitions of 'best-of-class'
companies will expand the Company's geographic presence and serve as platforms
for further growth and consolidation and will have the client base, technical
skills and infrastructure necessary to be a core business into which other
companies can be consolidated. The Company also will attempt to leverage the
existing infrastructure by pursuing 'tuck-in' acquisitions of smaller companies
whose operations can be integrated into a platform company. In addition, in
order to expand its market penetration and range of services offered, the
Company will selectively seek to acquire other well-established energy and
indoor environmental services businesses that provide services complementary to
those provided by the Company.

The Company believes that the opportunity to be acquired by the Company
will be attractive to many providers of energy and indoor environmental systems
and services. The Company offers owners of potential acquisition candidates: (i)
significant opportunities to enhance the growth of their businesses through
cross-selling the Company's wide range of services; (ii) access to the Company's
technical and engineering expertise; (iii) the Company's financial strength and
visibility as a public company; (iv) a decentralized management structure; (v)
the ability to compete in a rapidly consolidating environment; and (vi)
near-term liquidity. The Company believes that the experience, reputation and
relationships of the Founding Companies' management will be of significant value
as the Company seeks additional acquisition candidates.

As consideration for future acquisitions, the Company intends to use
various combinations of its Common Stock, cash and notes. Following the
completion of this Offering, the Company intends to register 5,000,000
additional shares of Common Stock under the Securities Act for its use in
connection with future acquisitions. The offering of such 5,000,000 additional
shares will be made only by means of a prospectus.

OPERATIONS AND SERVICES PROVIDED

The Company provides energy and indoor environmental systems and services
to commercial, industrial and institutional clients. The Company's services are
provided throughout the life cycle of a client's energy and indoor environmental
systems and include: (i) maintenance, repair and replacement; (ii) design,
engineering and installation; and (iii) on-site and off-site management of
building systems, including automated control and monitoring systems. The
Company develops long-term relationships with its clients by acting as a single
source provider of a broad range of energy and indoor environmental services,
and by providing these services in a high quality and reliable manner. The
development of long-term client relationships often results in both a recurring
revenue stream from maintenance services, and ongoing opportunities to provide
repair and replacement services and initiate new design, engineering and
installation projects. For the year ended December 31, 1997, the Company
generated approximately $193.0 million in combined revenues from maintenance,
repair and replacement services, which represented 52.9% of the Company's total
combined revenues; approximately $133.5 million in combined revenues from
design, engineering and installation services, which represented 36.6% of the
Company's total combined revenues; and approximately $38.3 million in combined
revenues from management of on-site and off-site building systems, which
represented 10.5% of the Company's total combined revenues.

Maintenance, Repair and Replacement Services. The Company provides
maintenance, repair and replacement services either pursuant to a service
agreement or in response to service calls. The Company's maintenance, repair and
replacement services typically include certified evaluation and testing of
system performance, cleaning and replacement of filters and other components and
retrofitting existing building energy and indoor environmental systems. The
Company replaces and upgrades filtration, air distribution, ventilation, air
pre-treatment, building automation and other systems.

The Company's service offerings involve working with a client to develop a
preventive maintenance program that details all of the equipment to be serviced
and generates a schedule of regular service calls. Company technicians then make
scheduled visits, servicing the equipment and performing repair or replacement
services as needed. Service offerings include remote monitoring of temperature,
pressure, humidity and air flow through the use of direct digital control
technology. If the system is not operating within the specifications established
by the client and cannot be remotely adjusted, a service

<PAGE>

crew is dispatched to analyze and repair the system as appropriate. Maintenance
calls not covered under an ongoing service agreement generally are coordinated
by client service representatives or dispatchers who use computer and
communications technology to process orders, arrange service calls, communicate
with clients, dispatch technicians and generate invoices.

The following is an example of one of the significant maintenance, repair
and replacement contracts performed by the Company:

Aircond provides services to a 14 building, one million square foot,
office complex located in Atlanta, Georgia. This annual contract provides
the client with an on-site technician dedicated to the client for 40 hours
a week. The technician performs daily preventive maintenance procedures on
the many different energy and indoor environmental systems at the office
complex and addresses any problems that may arise with such systems. The
on-site technician is also capable of using the Andover Direct Digital
Control system (installed in all of the buildings serviced by Aircond) to
troubleshoot problems and change temperature settings and schedules
relating to the energy and indoor environmental systems at the office
complex. In addition to mechanical and digital control support, Aircond
performs water treatment services and refrigerant management services under
this contract. On a monthly basis, Aircond's water treatment technicians
sample the water used in the heating and cooling systems and make
adjustments to the chemical treatment schedule as needed. Optimizing
chemical treatment of water systems maintains proper efficiency levels and
extends the life of the equipment. The client also relies on Aircond to
store, maintain and document the use of chlorofluorocarbon ('CFC')
refrigerants. The use and storage of these types of refrigerants is
regulated by the EPA.

Service agreements result in recurring revenue streams and often provide a
source of new business opportunities for the Company. The Company's service
agreements typically have terms of one to three years, with automatic annual
renewals, and are terminable by either party upon 30 to 60 days' notice. Service
agreements are generally billed on a fixed fee basis per month or quarter, with
additional fees charged for repair or replacement services. Service calls not
covered under ongoing maintenance programs are billed on a time and materials
basis, based on a rate schedule established by the Company.

Design, Engineering and Installation Services. The Company designs,
engineers and installs a variety of complex energy and indoor environmental
systems for its commercial, industrial and institutional clients, including
comfort heating and cooling systems, process cooling systems, high purity
filtration systems, industrial ventilation systems, control and monitoring
systems and industrial process piping. The Company's design, engineering and
installation projects are obtained either on a design and build or plan and spec
basis.

In a design and build project, the Company is a member of a team that works
closely with the client to understand its energy and indoor environmental needs
in order to engineer and design an entire system to be installed within an
existing or new facility. Company engineers and other technical personnel
analyze the requirements of the proposed system and estimate the time,
materials, equipment and labor required to complete the project. The Company
also considers other indoor environmental features that may be desirable for a
particular client, such as advanced automated monitoring devices or specialized
indoor air quality control technology. The Company negotiates the final design,
cost and timing of the design and build project with the client and enters into
a definitive agreement.

In a plan and spec project, engineers or architects design the system and
then solicit bids for the assembly and installation of the system. Companies are
selected primarily on a lowest bid basis. The Company prefers to concentrate on
design and build, rather than plan and spec, projects because the Company
believes that design and build projects generally require a higher level of
technical expertise, result in closer client relationships and create greater
opportunities to provide value-added services that often generate higher
margins. However, the plan and spec projects in which the Company is engaged
often give the Company an entry point to provide future maintenance, repair and
replacement services as well as enhance the Company's reputation within a local
market.

Materials and equipment required for a typical design, engineering and
installation project include ductwork, chillers, compressors, blowers, cooling
towers and air handling equipment, as well as pipes and pumps required to
connect the component parts of the system. The Company performs design,

<PAGE>

engineering and installation services in commercial office buildings, high rise
apartment buildings, hotels, government and educational facilities, hospitals
and manufacturing plants. Most of the Company's commercial and industrial
design, engineering and installation projects take between one month and 18
months to complete. Projects are billed as phases are completed or as costs are
incurred.

The Company designs, engineers and installs process cooling systems, high
purity filtration systems, industrial ventilation systems, industrial process
piping and control and monitoring systems. Process cooling systems are used
primarily in industrial facilities to provide heating or cooling to precise
temperature and humidity standards for products being manufactured and for
manufacturing equipment. High purity filtration systems are used in facilities
requiring specific air quality standards and industrial ventilation systems are
used to capture and dispose of airborne particulate. Industrial process piping
is used in manufacturing facilities to convey raw materials, utilities and
finished products. Control systems are used in order to maintain pre-established
temperature or climate standards for commercial, industrial or institutional
facilities. These systems use direct digital technology integrated with computer
terminals. Control systems are capable not only of controlling a facility's
entire HVAC system, often on a room-by-room basis, but can be programmed to
integrate energy management, security, fire, card key access, lighting and
overall facility monitoring. Diagnosis of potential problems and remote
adjustment of the control system can be performed from either an on-site or
off-site computer terminal.

The following are examples of significant design, engineering and
installation projects performed by the Company:

Brandt has undertaken an $11.7 million design and build renovation
project for Texas Christian University ('TCU') in Fort Worth, Texas. This
project, which is 95% complete, includes the design and construction of a
15,000 square foot, 5,600 ton central utility plant which uses ice storage
for demand side utility management. This plant serves more than 20 academic
and residence halls through approximately 10,000 feet of underground
piping. Additionally, 40 new air handling units were installed for improved
indoor air quality. A new high efficiency lighting system was installed
with a new high voltage electrical system and over 26,000 light fixtures.
By engaging Brandt on this project rather than pursuing an alternative
proposed by a competitor, TCU has saved more than $1.5 million in capital
costs. TCU is also projecting annual operating and maintenance cost savings
of more than $600,000.

Mechanical Services installed the mechanical systems for the latest
expansion of Sea World of Florida, a Busch Entertainment complex in
Orlando, Florida. This new attraction, 'Atlantis-The Lost Continent,'
opened in April 1998 and is one of the largest single projects ever
developed by Busch Entertainment at the Florida site. Mechanical Services
provided all of the comfort heating and cooling systems for the project
along with the process utilities, such as compressed air and hydraulic
systems, required to support the ride system that operates within the
structure.

Management of Building Systems. As businesses focus on their core
competencies, and as energy and indoor environmental systems become more
expensive, complex and technologically oriented, clients are increasingly
outsourcing their energy and indoor environmental systems and other mechanical
systems needs to experienced providers of such services. In response to this
demand, the Company offers an array of outsourced mechanical services and
expertise provided by qualified technicians, including ongoing operation,
maintenance and monitoring of indoor energy and environmental systems and
performance of related energy management functions. Outsourced facility
operations and maintenance services are generally provided pursuant to a
management agreement and are often a source of significant new opportunities to
provide additional services to the client.

The following are examples of significant building systems management
services performed by the Company:

Energy Systems provides outsourced facility services to the Prudential
Center Complex (the 'Complex') in Boston, Massachusetts. The Complex
consists of approximately six million square feet located over 31 acres and
includes three 26-story apartment buildings, a 30-story office building,
three blocks of retail outlets and the 52-story Prudential Tower. In 1984,
Energy Systems was hired to perform a broad range of outsourced facility
services for the Complex, including

<PAGE>

maintenance of HVAC systems, operation of the steam-powered centrifugal
chillers and operation of the energy management system and all related
control systems. In addition, Energy Systems maintains the infrastructure
of the Complex and provides a variety of mechanical services, including
maintenance of electrical and plumbing systems and carpentry work. To
fulfill its obligations to the Complex, Energy Systems uses an on-site
staff of 50 full-time engineers, service technicians, electricians,
plumbers and carpenters.

NEMSI provides outsourced facility services to the Bristol-Myers
Squibb facility in Wallingford, Connecticut. The facility consists of
approximately 800,000 square feet and is a state-of-the-art pharmaceutical
research building with more than 100 research laboratories. The facility
has a separate building that operates as a central plant, providing all of
the utilities to the entire facility. NEMSI provides a technical workforce
to maintain and operate all mechanical systems in the facility, including a
24-hour-a-day on-site maintenance crew for the central utility plant. NEMSI
also provides a daily maintenance crew at the main research facility for
mechanical systems operations, including building automation systems and
building security systems.

The Company's facility management service agreements typically have terms
of one to three years and are terminable by either party upon 30 to 60 days'
notice. Such agreements are billed on a fixed fee basis per month, with separate
fees charged if additional services are required.

CLIENTS

The Company's client base includes a broad array of commercial, industrial
and institutional users of energy and indoor environmental systems and services.
Representative clients to which the Company has provided services in the past 12
months include: Devcon, Hitachi, Fujitsu, TCU, Sprint, Lucent Technologies,
Harvard College, Union Carbide, Pfizer, General Electric, General RE, Nissan
Motor Manufacturing, Inc., Prudential Center (Boston), Bristol-Myers Squibb,
Novellus, Marriott, Whirlpool Corporation, Photocircuits, Cirent Technologies,
Time Warner, Peterbilt Motors, Hewlett Packard, BankBoston, Cisco Systems and
Sea World.

Consistent with its growth strategy, the Company believes that its success
is dependent on its ability to foster long-term relationships with its clients.
The Company has found that these well-developed relationships often lead to
significant new opportunities to provide additional services to clients. The
Company does not seek to be the lowest cost service provider in a given market
in which it operates. Instead, it focuses on maximizing client satisfaction by
providing a full complement of high-quality services to clients in a timely and
reliable fashion.

For the year ended December 31, 1997, the Company's top 10 clients
accounted for 28.6% of the Company's combined revenues. No single client
accounted for as much as 5.0% of the Company's combined revenues, except for
Devcon, a general contractor, which accounted for 12.5% of the Company's
combined revenues.

SOURCES OF SUPPLY

The raw materials and components used by the Company include HVAC system
components, ductwork, steel, sheet metal and copper tubing and piping. These raw
materials and components are generally available from a variety of domestic or
foreign suppliers at competitive prices. Delivery times are typically short for
most raw materials and standard components, but during periods of peak demand
may take a month or more to obtain. Chillers for large units typically have the
longest delivery time and generally have lead times of up to six months. The
major components of the Company's HVAC systems are compressors and chillers that
are manufactured primarily by York Heating and Air Conditioning Corporation
('York'), Carrier Corporation ('Carrier') and Trane Air Conditioning Company
('Trane'). The Company's major suppliers of control systems are Honeywell, Inc.,
Johnson Controls, Inc., York, Automated Logic Controls, Trane Tracer and Andover
Control Corporation.

<PAGE>

SALES AND MARKETING

As of March 31, 1998, the Company had approximately 110 marketing and sales
personnel. The Company intends to market its services through the sales forces
at each of the Founding Companies. This approach will allow each Founding
Company to market its services independently or in combination to provide
solutions to a client's specific energy and indoor environmental systems needs.
The senior executives of the Founding Companies have historically been the
persons principally responsible for sales and marketing at such companies and
will continue to act in this capacity. The Company intends to appoint a Vice
President of Marketing to coordinate marketing efforts on a Company-wide basis
and promote cross-selling among the Founding Companies and any other acquired
companies. The Company also intends to add sales and marketing personnel at the
Founding Company level to assist senior executives in increasing the number of
new clients and the amount of business generated from existing clients.

The Company generates sales leads through referrals from clients, responses
to requests for proposals, strategic partnerships with complementary companies,
industry seminars, trade shows, direct telephone and mail campaigns,
advertisements in trade journals and Internet websites and associated links. In
addition, the Company intends to leverage the experience and reputation within
the energy and indoor environmental systems and services industry of the senior
management of the Founding Companies.

RECRUITING, TRAINING AND RETENTION

The Company's future success will depend, in part, on its ability to
continue to attract, develop, motivate and retain qualified service technicians.
The Company believes that its success in retaining qualified employees will be
based on the quality of its recruiting, training, compensation, employee
benefits programs and opportunities for advancement. The Company recruits at
colleges and universities for energy and environmental engineers. The Company
recruits its technicians at local technical schools and community colleges,
where students focus on learning basic energy and indoor environmental systems
and services skills.

The Company places a strong emphasis on training, motivating and retaining
its employees. The Company intends to use a highly regarded training program
developed by Aircond as a model for all the Founding Companies and other
acquired companies. This formalized six-year training program includes classroom
and laboratory instruction two days per month during the fall and winter months
in a variety of theoretical and practical course offerings. Technicians are paid
for classroom time, which also focuses on safety programs and client relations
skills. Service technicians are also closely supervised by experienced field
supervisors to develop their skills.

COMPETITION

The Company's industry is highly competitive. The Company believes that the
principal competitive factors in the commercial, industrial and institutional
markets for energy and indoor environmental systems and services are: (i)
long-term client relationships; (ii) quality, timeliness and reliability of
services provided; (iii) range of services provided; and (iv) market share and
visibility. To a lesser degree, the Company competes on price; however, the
Company does not seek to be the lowest cost system or service provider in the
markets in which it operates, focusing instead on maximizing client satisfaction
by providing a full complement of high-quality services to clients in a timely
and reliable fashion. The Company believes that its strategy of becoming a
leading national provider of energy and indoor environmental systems and
services directly addresses these factors. Specifically, the Company's strategy
to focus on highly consultative design and build installation services and
maintenance, repair and replacement services, as well as its strategy to operate
on a decentralized basis, should promote the development and strengthening of
long-term client relationships. In addition, the Company's focus on attracting,
training and retaining quality engineers and technicians by using professionally
managed recruiting, training and benefits programs should allow it to
competitively offer high quality, comprehensive energy and indoor environmental
systems and services. The Company's

<PAGE>

strategy to become a single source provider of such systems and services for its
clients exemplifies the Company's commitment to offering a wide range of
integrated services and environmental solutions.

Many of the Company's competitors are relatively small, owner-operated
companies that typically operate in a limited geographic area. Certain of these
companies are affiliated with the owners or operators of the facilities in which
the Company provides its services. The Company also competes with large HVAC
equipment manufacturers, such as Carrier, Trane and Honeywell. In addition, the
Company is increasingly encountering competition from unregulated affiliates of
public utilities. Certain of the Company's competitors and potential competitors
may have greater financial resources than the Company to finance acquisition and
development opportunities, to pay higher prices for the same opportunities or to
develop and support their own operations.

The fragmented nature of the energy and indoor environmental systems and
services industry and the trend toward consolidation will affect the market for
potential acquisitions. There are currently several public companies that are
focused on providing energy and indoor environmental systems and services in
some of the same service lines provided by the Company and whose strategy is to
consolidate similar service providers on a regional or national basis. With
other companies seeking to make acquisitions in an effort to consolidate, the
Company will encounter significant competition as it attempts to implement its
acquisition strategy.

GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS

The Company's operations are subject to various federal, state and local
laws and regulations, including: (i) licensing requirements applicable to
service technicians; (ii) building and HVAC codes and zoning ordinances; (iii)
laws and regulations relating to consumer protection; and (iv) regulations
relating to worker safety and protection of the environment. The Company
believes it has all required licenses to conduct its operations and is in
substantial compliance with applicable regulatory requirements. Failure of the
Company to comply with applicable regulations could result in substantial fines
or revocation of the Company's operating licenses.

Many state and local regulations governing the HVAC services trades require
permits and licenses to be held by individuals. In some cases, a required permit
or license held by a single individual may be sufficient to authorize specified
activities for all the Company's service technicians who work in the state or
county that issued the permit or license. The Company intends to implement a
policy to ensure that, where possible, any such permits or licenses that may be
material to the Company's operations in a particular geographic region are held
by at least two Company employees within that region. In Florida, warranties
provided for in the Company's residential service agreements subject the Company
and such agreements to some aspects of that state's insurance laws and
regulations. Specifically, the Company is required to maintain funds on deposit
with the Florida Office of Insurance Commissioner and Treasurer, the amount of
which is not material to the Company's business. The Company is in compliance
with these deposit requirements.

The Company's operations are subject to numerous federal, state and local
environmental laws and regulations, including those governing the use and
handling of refrigerants. These laws are administered by the United States
Environmental Protection Agency, the Coast Guard, the Department of
Transportation and various state and local governmental agencies. The technical
requirements of these laws and regulations are becoming increasingly complex,
and the costs of complying with them can be significant. Federal and state
environmental laws include statutes intended to allocate the cost of remedying
contamination among specifically identified parties. The Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ('CERCLA' or
'Superfund') can impose strict, joint and several liability on past and present
owners or operators of facilities at, from or to which a release of hazardous
substances has occurred, on parties who generated hazardous substances that were
released at such facilities and on parties who arranged for the transportation
of hazardous substances to such facilities. A majority of states have adopted
Superfund statutes comparable to, and in some cases more stringent than, CERCLA.
None of the Founding Companies has been identified as a potentially responsible
party or a responsible party under CERCLA or any similar statute. If the Company
were to be found to be a responsible party under CERCLA or a similar state
statute, the Company could be held liable for all investigative and remedial
costs associated with addressing such contamination, even

<PAGE>

though the releases were caused by a prior owner or operator or third party. In
addition, claims alleging personal injury or property damage may be brought
against the Company as a result of alleged exposure to hazardous substances
resulting from the Company's operations.

The most significant environmental law that the Company's operations are
subject to is the Clean Air Act, which governs air emissions and imposes
specific requirements on the use and handling of CFCs and certain other
refrigerants. Clean Air Act regulations require the certification of service
technicians involved in the service or repair of equipment containing these
refrigerants and also regulate the containment and recycling of these
refrigerants. These requirements have increased the Company's training expenses
and expenditures for containment and recycling equipment. The Clean Air Act is
intended ultimately to eliminate the use of CFCs in the United States and to
require alternative refrigerants to be used in replacement HVAC systems. As a
result, the number of conversions or replacements of existing HVAC systems which
use CFCs to systems using alternative refrigerants is expected to increase.

EMPLOYEES

As of March 31, 1998, the Company had approximately 3,130 employees,
including approximately 215 management personnel, approximately 2,550 engineers
and service and installation technicians, approximately 110 sales personnel and
approximately 255 administrative personnel. In the course of performing
installation work, the Company may use the services of subcontractors. Five of
the Founding Companies are parties to collective bargaining agreements with
unions which cover, in the aggregate, approximately 1,600 employees. Such
collective bargaining agreements have terms expiring at various times through
April 2002. Under certain of these agreements, payments are made to multi-
employer pension plans. The Company believes its relationships with its
employees and union representatives are satisfactory.

FACILITIES AND VEHICLES

The Company has 26 facilities in 10 states, three of which are owned and 23
of which are leased with remaining lease terms ranging from month-to-month to 20
years. The Company leases or owns approximately 400,000 square feet of
commercial property.

The Company operates a fleet of approximately 1,040 service trucks, vans
and support vehicles, of which approximately 610 are leased and approximately
430 are owned.

After the closing of this Offering, the Company will lease its principal
executive and administrative offices in Atlanta, Georgia and is currently in the
process of obtaining office space for this purpose.

Following the Mergers, certain of the Founding Companies will continue to
lease operating space from certain stockholders of the Founding Companies, some
of whom are or will become executive officers and directors of the Company upon
the consummation of this Offering. See 'Certain Transactions -- Other
Transactions.'

LEGAL PROCEEDINGS

The Company is, from time to time, a party to litigation arising in the
normal course of its business, most of which involves claims for personal injury
and property damage incurred in connection with its operations. The Company is
not currently involved in any litigation, nor is the Company aware of any
threatened litigation, that the Company believes is likely to have a material
adverse effect on its business, financial condition or results of operations.

<PAGE>

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth information concerning those persons who are
or upon the consummation of this Offering will become the Company's directors,
executive officers and key employees. In addition to the persons named as
directors below, it is anticipated that two additional independent directors
will be elected to the Company's board at or prior to the consummation of the
Offering. The Company is in the process of selecting these two individuals.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- --- -----------------------------------------------------------------------------
<S> <C> <C>
Rodney C. Gilbert............ 58 Chairman of the Board and Chief Executive Officer; Director
William M. Dillard........... 50 President and Chief Operating Officer; Director
Marty R. Kittrell(1)......... 41 Executive Vice President and Chief Financial Officer; Director
Nicholas J. Costanza......... 43 Executive Vice President, General Counsel and Secretary
Charles A. Chesnutt.......... 39 Vice President and Treasurer
Alan L. Barnes, Sr.(1)....... 55 President and Chief Executive Officer -- Aircond; Director
John W. Davis(1)............. 53 President -- Air Systems; Director
Robert S. Lafferty(1)........ 63 Chairman of the Board -- Hill York; Director
William B. Lee(1)............ 38 President and Chief Executive Officer -- Lee; Director
Charles P. Reagan(1)......... 48 President and Chief Executive Officer -- NEMSI; Director
Anthony I. Shaker(1)......... 54 President and Chief Executive Officer -- Energy Systems; Director
Mark A. Zilbermann(1)........ 46 President -- Brandt; Director
William J. Lynch............. 56 Director
Kathleen A. Murray(1)........ 46 Director
Charles R. Scott(1).......... 70 Director
Ronald C. Erbetta(2)......... 52 Vice President, Corporate Development -- Western Region
Phillip M. Tucker(2)......... 46 Vice President, Corporate Development -- Eastern Region
</TABLE>

- ------------

(1) Appointment as a director will become effective upon the consummation of
this Offering.

(2) Key employee.

RODNEY C. GILBERT has been Chairman of the Board and Chief Executive
Officer of the Company since May 1998. Since December 1997, Mr. Gilbert has
served as a consultant to the Company and has assisted with its business
strategy and development. Mr. Gilbert was President and Chief Executive Officer
of Rust International, Inc., an environmental services corporation, from January
1993 through March 1997. He also served as Vice President, Technology
Development for WMX Technologies, Inc., the parent company of Rust
International, Inc., from February 1995 to December 1996. From November 1985 to
January 1993, Mr. Gilbert served as President and Chief Operating Officer of
Wheelabrator Technologies Inc., an environmental services company that is a
subsidiary of WMX Technologies, Inc. Mr. Gilbert currently serves on the Board
of Directors of AmSouth Bancorporation. Mr. Gilbert received a bachelor of
science degree in engineering from the University of Alabama.

WILLIAM M. DILLARD has been President and a director of the Company since
September 1997 and has been Chief Operating Officer since May 1998. Mr. Dillard
has been the Chief Executive Officer of Mechanical Services since 1974. He will
resign as such, effective upon the consummation of this Offering. In addition
Mr. Dillard is an active member of the American Society of Heating,
Refrigeration, and Air Conditioning Engineers ('ASHRAE'), where he is a recent
recipient of the ASHRAE Distinguished Service Award. Mr. Dillard received an
associates degree in HVAC technologies from Dekalb College.

MARTY R. KITTRELL has been Executive Vice President and Chief Financial
Officer since May 1998 and will become a director of the Company upon the
consummation of this Offering. Since March 1998, Mr. Kittrell has served as a
consultant to the Company. Mr. Kittrell was Vice President, Chief Financial
Officer and Treasurer of Exide Electronics Group, Inc., a manufacturer of
uninterruptible power supplies, from 1989 to 1997. He also served as Vice
President, Chief Financial Officer and Treasurer of WearEver-Proctor Silex from
1983 to 1989. Mr. Kittrell was employed by Price Waterhouse LLP from

<PAGE>

1977 to 1983 and is a certified public accountant. Mr. Kittrell has been a
Director of Capital Bank since 1997. Mr. Kittrell received a bachelor of science
degree in accounting from Lipscomb University.

NICHOLAS J. COSTANZA has been Executive Vice President, General Counsel and
Secretary of the Company since June 1998. Mr. Costanza was employed by Exide
Electronics Group, Inc. from 1980 to March 1998, during which time he served as
General Counsel and Secretary from 1983 to 1998, Vice President from 1986 to
1998 and Chief Administrative Officer from 1995 to 1998. Mr. Costanza received a
bachelor of arts degree in history from Rutgers College and a juris doctor
degree from Villanova University.

CHARLES A. CHESNUTT has been Vice President and Treasurer of the Company
since June 1998. From 1997 to June 1998, Mr. Chesnutt served as a Financial
Manager for Andersen Consulting. Mr. Chesnutt was employed by Rock-Tenn Company,
a manufacturer of recycled paperboard, from 1988 to 1997, where he served in
various positions, including Assistant Treasurer. Mr. Chesnutt was employed by
Ernst & Young LLP from 1981 to 1984 as a certified public accountant. Mr.
Chesnutt received a bachelor of science degree in accounting from the University
of Alabama and a masters degree in business administration from Georgia State
University.

ALAN L. BARNES, SR. will become a director of the Company upon the
consummation of this Offering. Mr. Barnes has served as President and Chief
Executive Officer of Aircond since 1982. In addition, from 1990 to 1997, Mr.
Barnes held various positions in Air Conditioning Contractors of America, a
leading industry association, including Director, President, Vice President and
Senior Vice President. Mr. Barnes received a bachelor of science degree in
industrial engineering from Georgia Institute of Technology and a masters degree
in business administration from Georgia State University.

JOHN W. DAVIS will become a director of the Company upon the consummation
of this Offering. Mr. Davis has served as President of Air Systems since 1974,
when he founded Air Systems. Mr. Davis received a bachelor of science degree in
business administration from San Jose State University.

ROBERT S. LAFFERTY will become a director of the Company upon the
consummation of this Offering. Mr. Lafferty has been Chairman of the Board and
Secretary of Hill York since 1964. Mr. Lafferty received a bachelor of science
degree in mechanical engineering from the University of Florida.

WILLIAM B. LEE will become a director of the Company upon the consummation
of this Offering. Mr. Lee has served as President and Chief Executive Officer of
Lee since July 1992. From 1981 to 1992, Mr. Lee held various positions at Lee,
including estimator, project engineer, project manager and Vice President. Mr.
Lee received a bachelor of science degree in mechanical engineering from Auburn
University.

CHARLES P. REAGAN will become a director of the Company upon the
consummation of this Offering. Mr. Reagan has been President and Chief Executive
Officer of NEMSI since 1989. From 1983 to 1989, he held various positions in
NEMSI, including Executive Vice President. Mr. Reagan received an associates
degree in applied sciences-mechanical engineering from Onondaga Community
College in Syracuse, New York.

ANTHONY I. SHAKER will become a director of the Company upon the
consummation of this Offering. Mr. Shaker has been President and Chief Executive
Officer of Energy Systems since 1994, and held various other executive positions
at Energy Systems from 1976 to 1994. Mr. Shaker was a board member of United
Service Alliance, a network of service contractors throughout the United States,
from 1995 to 1997 and has been a member of the board of Air Conditioning &
Refrigeration Contractors of America since 1994. Mr. Shaker received a bachelor
of science degree in mechanical engineering from Syracuse University.

MARK A. ZILBERMANN will become a director of the Company upon the
consummation of this Offering. Mr. Zilbermann has been the President of Brandt
since 1991. Mr. Zilbermann has also been President of the Mechanical Contractors
Association of Dallas since 1997 and was President of the Texas Environmental
Balancing Bureau from September 1994 to September 1996. Mr. Zilbermann received
a bachelor of science degree from Yale University and a masters degree in
science from the University of Texas.

<PAGE>

WILLIAM J. LYNCH has been a director of the Company since May 1998. He has
been a Managing Director of Capstone Partners, LLC ('Capstone'), a venture firm
specializing in consolidation transactions, since March 1996. From October 1989
to February 1996, he was a Partner in the law firm of Morgan, Lewis & Bockius
LLP. Mr. Lynch is a director of Coach USA, Inc. and Staffmark, Inc. Mr. Lynch
received a bachelor of science degree in English from Holy Cross and a juris
doctor degree from Harvard Law School.

KATHLEEN A. MURRAY will become a director of the Company upon the
consummation of this Offering. Since 1977, Ms. Murray has held various positions
in Aetna Inc. (formerly named Aetna Life and Casualty Co.), a provider of health
and retirement plans. Among other things, Ms. Murray has served as Vice
President of Customer Services/Operations for Aetna Retirement Services (a
division of Aetna Inc.) since May 1998, Chief Operating Officer of Aetna
Business Resources (a division of Aetna Inc.) since December 1994 and Vice
President of Aetna Business Resources since May 1989. Ms. Murray received a
bachelor of arts degree in mathematics and general science from the University
of Rochester and graduated from the Advanced Management Program at Harvard
Business School.

CHARLES R. SCOTT will become a director of the Company upon the
consummation of this Offering. Mr. Scott has been the sole owner and Chairman of
Leadership Centers, USA, Inc., d/b/a The Executive Committee of Florida, a
continuing education and networking organization for chief executives, since his
purchase of such company in March 1995. Mr. Scott was Chairman and Chief
Executive Officer of Actava Group (formerly named Fuqua Industries, Inc.) from
1991 to 1996 and Chairman and Chief Executive Officer of Intermark, Inc. from
1971 to 1991, each of which is a holding company for approximately 20 companies
in various industries. Mr. Scott has been a director of PSS World Medical, Inc.,
a distributor of medical supplies, since April 1998. Mr. Scott received a
bachelor of arts degree in journalism from The University of Texas - Austin.

RONALD C. ERBETTA has been Vice President of Corporate Development --
Western Region of the Company since July 1998. From 1997 to June 1998, Mr.
Erbetta was the Regional Development Manager of ServiCenter USA, a consolidator
of HVAC companies. From 1995 to 1997, Mr. Erbetta served as Vice President and
General Manager of Mainco San Diego Mechanical, an HVAC company. From 1985 to
1994, Mr. Erbetta was Vice President of Jackson & Blanc, an HVAC Company. Mr.
Erbetta received a bachelor of science degree in business administration from
Marquette University.

PHILLIP M. TUCKER will become Vice President of Corporate Development --
Eastern Region of the Company in August 1998. Since October 1993, Mr. Tucker
has been Vice President of Strategic Development and Vice President-Controller
of Pameco Corporation, a wholesale distributor of HVAC systems and equipment and
refrigeration products. Mr. Tucker was Vice President of Finance for Acme Decal
Company, a manufacturer of labels and decals, and Eastern Electric Apparatus
Repair, Inc. a manufacturer and repair service provider of electrical equipment,
from November 1990 to October 1993 and from August 1987 to October 1990,
respectively. Mr. Tucker received a bachelor of arts degree in accounting from
the University of Georgia and has been a certified public accountant since 1977.

All officers serve at the discretion of the Board of Directors.

BOARD OF DIRECTORS

After the consummation of the Mergers, the Board of Directors of the
Company will consist of 15 directors divided into three classes. At each annual
meeting of stockholders commencing in 1999, directors will be elected to
three-year terms by the holders of the Common Stock to succeed those directors
whose terms are expiring. Directors whose terms will expire in 1999 are Rodney
C. Gilbert Robert S. Lafferty, Sr., John W. Davis, Charles R. Scott and William
J. Lynch; directors whose terms will expire in 2000 are Marty R. Kittrell, Alan
L. Barnes, Sr., William B. Lee and Charles P. Reagan; and directors whose terms
will expire in 2001 are William M. Dillard, Anthony I. Shaker, Kathleen A.
Murray and Mark A. Zilbermann.

Board Committees. The Board of Directors intends to establish an Audit
Committee and a Compensation Committee, effective upon the consummation of this
Offering. The Audit Committee will review the results and scope of the audit and
other services provided by the Company's independent accountants. The
Compensation Committee will approve salaries and certain incentive

<PAGE>

compensation for management and key employees of the Company, and will
administer the 1998 Long-Term Incentive Plan.

Director Compensation. Directors who are also employees of the Company or
one of its subsidiaries will not receive additional compensation for serving as
directors. Each director who is not an employee of the Company or one of its
subsidiaries will receive an annual retainer of $10,000 and will receive $500
for each meeting attended. In addition, under the Company's 1998 Long-Term
Incentive Plan, each person serving or who has agreed to serve as a non-employee
director at the commencement of this Offering will be granted automatically an
option to acquire 10,000 shares of Common Stock, and thereafter each person who
becomes a non-employee director will be granted automatically an initial option
to acquire 10,000 shares upon such person's initial election as a director. In
addition, each such non-employee director will be granted, subject to a certain
exception, an annual option to acquire 5,000 shares at each annual meeting of
the Company's stockholders thereafter at which such director is re-elected or
remains a director. Each such option will have an exercise price equal to the
fair market value per share of Common Stock on the date of grant. See ' -- 1998
Long-Term Incentive Plan.' Directors also will be reimbursed for out-of-pocket
expenses incurred in attending meetings of the Board of Directors or committees
thereof.

EXECUTIVE COMPENSATION; EMPLOYMENT AGREEMENTS; COVENANTS-NOT-TO-COMPETE

The Company was incorporated in September 1997, has conducted no operations
and generated no revenues to date and did not compensate any of its executive
officers for services rendered in 1997.

Each of Messrs. Gilbert, Kittrell and Costanza will enter into an
employment agreement with the Company providing for an annual base salary of
$250,000, $200,000 and $185,000, respectively. Mr. Gilbert's employment
agreement provides for a bonus to be determined annually equal to 50% of the
employee's base salary if specified criteria and performance standards are met
and 100% of the base salary if such specified criteria are exceeded by an amount
equal to or greater than 30%. Each of Mr. Kittrell's and Mr. Costanza's
employment agreements provides for an annual bonus equal to 40% of the
employee's base salary if specified criteria and performance standards are met
and 80% of the base salary if such specified criteria are exceeded by an amount
equal to or greater than 30%. Such specified criteria and performance standards
will be established by the Compensation Committee following the consummation of
this Offering.

Each of Messrs. Dillard, Barnes, Lafferty, Lee, Reagan, Shaker, Zilbermann
and Davis will enter into an employment agreement with a Founding Company (with
the Company in the case of Mr. Dillard) providing for an annual base salary of
$150,000 ($200,000 in the case of Mr. Dillard and $250,000 in the case of Mr.
Davis), and a bonus to be determined annually in accordance with an annual bonus
program of the Company for senior executives, which bonus shall be contingent
upon the achievement of certain corporate or individual performance goals
established by the Compensation Committee.

Each of the foregoing employment agreements will provide that, in the event
of a termination of employment by the Company without cause or by the employee
for good reason (including (i) a material diminution during the Employment
Period in the employee's office, duties or responsibilities (including following
a Change in Control) or (ii) a material breach by the Company of his Employment
Agreement (other than by death or disability), the employee shall receive from
the Company, in a lump-sum payment due on the effective date of termination, an
amount equal to two times his then applicable base salary, plus any accrued
salary and declared but unpaid bonus and reimbursement of expenses. In addition,
upon any termination of the employee's employment agreement, other than by the
Company for good cause or by the employee without cause, any options or rights
to purchase securities of the Company shall immediately vest and remain
exercisable until the ten year anniversary of the date of the grant of such
options or rights.

Each of the foregoing employment agreements will be effective as of the
consummation of this Offering for a term of three years with automatic renewals
for additional one-year periods on the same terms and conditions existing at the
time of renewal unless, not later than three months prior to each

<PAGE>

such respective date, either party shall have given notice to the other party
that the term shall not be so extended.

Mr. Gilbert's employment agreement requires the Company to extend medical
coverage for Mr. Gilbert, his spouse and eligible dependent family members
beyond the Employment Period at Mr. Gilbert's expense. Pursuant to the
agreement, should Mr. Gilbert become liable for certain income taxes with
respect to the shares of Common Stock he purchased from the Company, he would be
paid an amount to compensate him for such income taxes.

Each employment agreement contains a covenant-not-to-compete with the
Company without the prior approval of the Board of Directors of the Founding
Company or the Company for a period of two years following termination of
employment. Under this covenant, the executive is prohibited from: (i) directly
or indirectly engaging in any business in competition with the Company or in any
community in which the Company is doing business; or (ii) soliciting or
encouraging any employee of the Company or any current or future subsidiary
thereof to terminate his or her employment. The covenant may be enforced by
injunctions, specific performance or other equitable relief to prevent any
violations of the employee's obligations to the Company.

1998 LONG-TERM INCENTIVE PLAN

In December 1997, the Board of Directors and the Company's stockholders
approved the Company's 1998 Long-Term Incentive Plan (the 'Plan'). The purpose
of the Plan is to provide a means by which the Company can attract, retain and
award officers, employees, directors, consultants and other service providers
and to compensate such persons in a way that provides additional incentives and
enables such persons to increase their ownership interests in the Company.
Individual awards under the Plan may take the form of one or more of: (i) either
incentive stock options ('ISOs') or non-qualified stock options ('NQSOs'); (ii)
stock appreciation rights ('SARs'); (iii) restricted or deferred stock; (iv)
dividend equivalents; (v) bonus shares and awards in lieu of Company obligations
to pay cash compensation; and (vi) other awards the value of which is based in
whole or in part upon the value of the Common Stock.

The Plan will generally be administered by a committee (the 'Committee'),
which will initially be the Compensation Committee of the Board, except that the
Board will itself perform the Committee's functions under the Plan for purposes
of grants of awards to non-employee directors, and may perform any other
function of the Committee as well. The Committee generally is empowered to
select the individuals who will receive awards and the terms and conditions of
those awards, including exercise prices for options and other exercisable
awards, vesting and forfeiture conditions (if any), performance conditions, the
extent to which awards may be transferable and periods during which awards will
remain outstanding. Awards may be settled in cash, shares, other awards or other
property, as determined by the Committee.

The maximum number of shares of Common Stock that may be subject to
outstanding awards under the Plan will not exceed 13.5% of the aggregate number
of shares of Common Stock outstanding (2,341,635 as of the time of the
consummation of this Offering) minus the number of shares previously issued
pursuant to awards granted under the Plan. The number of shares deliverable upon
exercise of ISOs is limited to 2,200,000. The Plan also provides that no
participant may be granted in any calendar year (i) options or SARs exercisable
for more than 750,000 shares, or (ii) other awards that may be settled by
delivery of more than 750,000 shares, and limits payments under cash-settled
awards in any calendar year to an amount equal to the fair market value of that
number of shares as of the date of grant or the date of settlement of the award,
whichever is greater.

In addition to authorizing grants of awards to any eligible person in the
discretion of the Committee, the Plan authorizes automatic grants of NQSOs to
non-employee directors. Under these provisions, each person serving or who has
agreed to serve as a non-employee director at the commencement of this Offering
will be granted an initial option to purchase 10,000 shares, and thereafter each
person who becomes a non-employee director will be granted an initial option to
purchase 10,000 shares upon such person's initial election as a director. In
addition, these provisions provide for the automatic annual grant to each
non-employee director of an option to purchase 5,000

<PAGE>

shares at each annual meeting of stockholders following this Offering; provided,
however, that a director will not be granted an annual option if he or she was
granted an initial option during the preceding three months. The number of
shares to be subject to initial or annual options to be granted after the first
annual meeting of stockholders following this Offering may be altered by the
Board of Directors. These options will have an exercise price equal to the fair
market value of the Common Stock on the date of grant (in the case of options
granted to the initial non-employee directors, the exercise price will be the
initial public offering price), and the options will expire at the earlier of 10
years after the date of grant or one year after the date the person ceases to
serve as a director of the Company for any reason. These options generally will
become exercisable one year after the date of grant, except that an option will
be may be forfeited upon a participant's termination of service as a director
for reasons other than death or disability less than 11 months after the date of
grant.

In connection with this Offering, in addition to the options to be granted
automatically to non-employee directors, options in the form of NQSOs to
purchase a total of 1,611,383 shares of Common Stock will be granted to
executive officers of the Company and to employees of the Company and the
Founding Companies as follows: 200,000 shares to Mr. Gilbert, 100,000 shares to
Mr. Kittrell, 75,000 shares to Mr. Costanza, 35,000 shares to Mr. Chesnutt and
1,201,883 shares to the other employees of the Company and the Founding
Companies. Each of the foregoing options will have an exercise price equal to
the initial public offering price, and will vest as to one-fourth on the date of
the consummation of this Offering and on each of the first, second and third
anniversaries of the date of the consummation of this Offering. Unvested options
generally will be forfeited upon a termination of employment that is voluntary
by the participant. Upon a change of control of the Company (as defined in the
Plan), vesting will be accelerated. The options generally will expire on the
earlier of 10 years after the date of grant or three months after termination of
employment (immediately in the event of a termination for cause), unless
otherwise determined by the Committee.

In connection with the Mergers, the Company will assume options to acquire
shares of common stock of one of the Founding Companies which, following the
Mergers, will constitute options to purchase an aggregate of 119,500 shares of
Common Stock of the Company at an exercise price equal to $8.38. The other terms
of such options will be the same as the terms of the options described in the
preceding paragraph.

The Plan will remain in effect until terminated by the Board of Directors.
The Plan may be amended by the Board of Directors without the consent of the
stockholders of the Company, except that any amendment, although effective when
made, will be subject to stockholder approval if required by any Federal or
state law or regulation or by the rules of any stock exchange or automated
quotation system on which the Common Stock may then be listed or quoted. The
number of shares reserved or deliverable under the Plan, the annual
per-participant limits, the number of shares subject to options automatically
granted to non-employee directors, and the number of shares subject to
outstanding awards are subject to adjustment in the event of stock splits, stock
dividends and other extraordinary corporate events.

The Company generally will be entitled to a tax deduction equal to the
amount of compensation realized by a participant through awards under the Plan,
except (i) no deduction is permitted in connection with ISOs if the participant
holds the shares acquired upon exercise for the required holding periods; and
(ii) deductions for some awards could be limited under the $1.0 million
deductibility cap of Section 162(m) of the Internal Revenue Code. This
limitation, however, should not apply to awards granted under the Plan during a
grace period of approximately three years following this Offering, and should
not apply to certain options, SARs and performance-based awards granted
thereafter if the Company complies with certain requirements under Section
162(m).

<PAGE>

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

Enfinity was formed in September 1997. The Founding Companies and Capstone
have agreed to advance the expenses to be incurred by the Company in connection
with the Mergers and this Offering in proportion to their respective equity
interests in the Company prior to this Offering. These advances aggregated
$841,000 as of March 31, 1998. The Company anticipates that additional amounts
will be advanced prior to the consummation of this Offering. All amounts
advanced will be repaid out of the proceeds of this Offering. As a result of a
36,804.93 for 1 stock split effected in the form of a stock dividend on July 9,
1998, the 15 shares of Common Stock initially issued by Enfinity to Capstone and
its principals will aggregate 552,074 shares on the closing of this Offering.

Simultaneously with the closing of this Offering, Enfinity will acquire by
merger all of the issued and outstanding stock of the eight Founding Companies,
at which time each Founding Company will become a wholly owned subsidiary of the
Company. The aggregate consideration to be paid by Enfinity in the Mergers
consists of (i) approximately $79.6 million in cash, subject to adjustment, and
(ii) 8,243,971 shares of Common Stock. The Company will assume indebtedness of
the Founding Companies in connection with the Mergers. Such indebtedness
aggregated $24.9 million at March 31, 1998. The Company also will assume options
to purchase shares of common stock of a Founding Company which, following the
Mergers, will constitute options to purchase an aggregate of 119,500 shares of
Common Stock at an exercise price of $8.38 per share. See 'Management -- 1998
Long-Term Incentive Plan.' The Founding Company stockholders, as a group, formed
Enfinity, determined that they would collectively own the combined entity (minus
only the percentage of the overall value that they determined would be sold in
this Offering or allocated to consultants or management) and negotiated with
each other the consideration for each of the Founding Companies based on a
number of factors. The factors considered in determining the consideration to be
paid included, among others, the historical operating results, the net worth,
the amount and type of indebtedness and the future prospects of the Founding
Companies. Such stockholders further determined that the shares to be received
by them would have a value equal to the initial public offering price per share,
less a 20% discount due to the significant restrictions on transferability
imposed by them on such shares. Each Founding Company was represented by
independent counsel in the negotiation of the terms and conditions of the
Mergers.

The aggregate consideration paid by Enfinity for each of the Founding
Companies and the total debt to be assumed by the Company are as follows:

<TABLE>
<CAPTION>
SHARES OF VALUE OF
FOUNDING COMPANY COMMON STOCK CASH(1) OPTIONS DEBT ASSUMED
- ---------------------------------------------- ------------ ------- -------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Brandt........................................ 1,523,173 $13,385 $-- $ --
Air Systems................................... 1,402,397(2) 18,932 1,103 9,742
Energy Systems................................ 720,566 5,638 -- 2,419
NEMSI......................................... 841,275 8,085 -- 3,290
Lee........................................... 1,296,275 11,664 -- 3,119
Hill York..................................... 821,208 7,122 -- 619
Mechanical Services........................... 678,948 6,111 -- 45
Aircond....................................... 960,129 8,641 -- 5,689
------------ ------- -------- ------------
Total.................................... 8,243,971 $79,578 $1,103 $ 24,923
------------ ------- -------- ------------
------------ ------- -------- ------------
</TABLE>

- ------------

(1) The number of shares of Common Stock to be issued to the stockholders of the
Founding Companies is fixed. The stockholders of the Founding Companies were
given the right to receive up to 40% of their total consideration in cash,
except for the stockholders of Air Systems, who were given the right to
receive up to 50% of their total consideration in cash. The cash amounts in
the table above assume an initial public offering price per share of $13.50.
If the initial public offering price per share is higher or lower than
$13.50, the cash consideration will vary proportionately. For

(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)
example, a $1.00 increase over such $13.50 initial public offering price
will result in a $5.9 million increase (out of the $7.4 million of
additional net proceeds) in the aggregate cash consideration paid to the
Founding Company stockholders. Pursuant to the Merger Agreements, the
aggregate cash consideration paid to such stockholders will in no event be
less than $73.6 million.

(2) Does not include 119,500 shares of Common Stock issuable upon the exercise
of options to be issued to holders of options to purchase common stock of
Air Systems.

Immediately prior to the Mergers, certain of the Founding Companies will
make distributions of approximately $8.0 million, representing S Corporation
distributions payable to the stockholders of certain of the Founding Companies,
redemption of preferred stock of one of the Founding Companies and Excess
Working Capital amounts. See 'Selected Financial Data' and the Unaudited Pro
Forma Combined Financial Statements of the Company and the notes thereto.

The closing of each Merger is subject to customary conditions. These
conditions include, among others, the accuracy on the closing date of the
representations and warranties made by the Founding Companies, their principal
stockholders and by the Company; the performance of each of their respective
covenants included in the Merger Agreements; and the nonexistence of a material
adverse change in the business, results of operations or financial condition of
any Founding Company which would constitute a material adverse change with
respect to the Company as a whole. There can be no assurance that the conditions
to the Mergers will be satisfied or waived or that the Merger Agreements will
not be terminated prior to consummation.

Pursuant to the Merger Agreements, the stockholders of the Founding
Companies have agreed not to compete with the Company for four years, commencing
on the date of closing of this Offering.

Certain of the Founding Companies have incurred indebtedness which has been
personally guaranteed by their stockholders. Specifically, certain stockholders
of Brandt (including Mr. Zilbermann) have personally guaranteed Brandt's $1.5
million line of credit; Mr. Dillard and his spouse have personally guaranteed
Mechanical Services' $1.6 million revolving line of credit; Mr. Davis has
personally guaranteed all of Air Systems' debt and lease obligations; Mr. Barnes
has personally guaranteed a $1.2 million note issued by Aircond; and Mr.
Lafferty has personally guaranteed Hill York's $1.7 million line of credit. The
Company has agreed to use its best efforts to have the personal guarantees of
this indebtedness released within 90 days after the closing of this Offering
and, in the event that any guarantee cannot be released, to repay or refinance
such indebtedness. See 'Use of Proceeds.'

In connection with the Mergers, and as consideration for their interests in
the Founding Companies, certain executive officers, directors and persons who
will hold more than 5% of the outstanding shares of Common Stock of the Company
upon the consummation of this Offering will receive, directly or indirectly,
cash (calculated at an assumed initial public offering price per share of
$13.50) and shares of Common Stock of the Company as follows:

<TABLE>
<CAPTION>
SHARES OF
NAME CASH COMMON STOCK(1)
- ---------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Alan L. Barnes, Sr. ...................................... $ 6,048,815 672,090
John W. Davis............................................. 17,985,736 1,332,277
William M. Dillard........................................ 6,110,536 678,948
Robert S. Lafferty........................................ 4,372,502 323,889
William B. Lee............................................ 3,776,715 476,342
Charles P. Reagan......................................... 8,035,248 727,471
Anthony I. Shaker......................................... 3,308,786 564,201
Mark A. Zilbermann........................................ 5,008,524 574,497
</TABLE>

- ------------

(1) See 'Principal Stockholders.'

<PAGE>

OTHER TRANSACTIONS

Air Systems leases its primary office and warehouse space from the family
trust of Mr. Davis, the President and controlling stockholder of Air Systems.
The leases expire in December 2001, with rents totaling approximately $29,000
per month. The Company believes that the rent for such property does not exceed
the fair market rental thereof.

Air Systems has reimbursed Mr. Davis approximately $300,000 worth of
personal expenses for the fiscal year ended February 29, 1998, including with
respect to the operation and maintenance of a motor home, vacation residences
and a personal residence and for race car expenses.

Aircond leases real property from New Visions Properties I, LLLP, a Georgia
limited liability limited partnership in which Alan L. Barnes, Sr. and his wife
are general partners. The lease is for a term of 15 years ending on October 1,
2012 and provides for an annual rent of $300,000. The Company believes that the
rent for such property does not exceed the fair market rental thereof.

In September 1996, Aircond redeemed all of the outstanding shares of
Preferred Stock from Fayoline Paul, the mother of Mr. Barnes, in exchange for a
note in the principal amount of $1.2 million, which bears interest at an annual
rate of 9% through August 2011. Mr. Barnes has personally guaranteed the
payments under such note. This note will be repaid out of the proceeds of this
Offering.

ZMR Capital Ltd., a partnership of which Mr. Zilbermann is a 40% owner,
leases a building and certain equipment to Brandt. The current total aggregate
annual rental payments due under these leases amount to $233,000. Prior to the
consummation of this Offering, the annual lease payments will be reduced to
approximately $193,000. The Company believes that the reduced rent for such
property is at least as favorable as the Company would expect to negotiate with
unaffiliated third parties.

Hill York has intercompany receivables in the aggregate principal amount of
$298,000 as of December 31, 1997 from certain companies that have officers and
stockholders in common with Hill York. Such amounts are guaranteed by Mr.
Lafferty. This guarantee will continue in effect following the consummation of
this Offering.

Hill York leases office and warehouse space from 3921 Associates, a general
partnership of which Robert S. Lafferty and Hill York Service Corporation are
partners. The lease is for a period of five years, expiring on September 30,
2002, and requires monthly payments of approximately $5,000. The Company
believes that the rent for such property is at least as favorable as the Company
would expect to negotiate with unaffiliated third parties.

Hill York, Hill York Service Corporation and Mr. Lafferty have entered into
an agreement of indemnity providing for cross indemnities on any surety bonds or
guarantees issued by an insurance company on behalf of Hill York or its
affiliates. This general agreement of indemnity was terminated on November 24,
1997; however, the indemnity is in full force and effect with respect to all
bonds written prior to such date.

Lee sold real property for $2.7 million in October 1997 to Three Springs
Development, LLC ('Three Springs'), in which Mr. Lee has a one-third interest.
Three Springs took out a mortgage in the amount of $2,400,000, which was
guaranteed by Lee. This guarantee has been released by Lee. The Company believes
that the purchase price for the property is at least as favorable as the Company
would expect to negotiate with unaffiliated third parties. In addition, Lee
leases the property from Three Springs under a 10 year lease for an annual rent
of approximately $350,000, which will be adjusted for inflation after five
years. The Company believes that the rent for such property is at least as
favorable as the Company would expect to negotiate with unaffiliated third
parties.

As of March 31, 1998, Lee held a note receivable from Mr. Lee in the amount
of $500,000 used to finance the purchase of shares of Lee common stock from
another stockholder. Lee issued its own note to a commercial bank which provided
funds for this transaction. The notes bear interest at a fixed rate of 8.78% and
have a term of five years ending October 1, 1999. In addition, as of March 31,
1998, Lee had a note receivable from Three Springs in the amount of $300,000.
The rate on the note is 8.2% and the note has a term of 10 years ending
September 2001. These notes will be repaid to Lee prior to the consummation of
this Offering.

<PAGE>

Mr. Dillard and his spouse lease real property to Mechanical Services under
a five-year lease which expires in 2002. The lease provides for annual rental
payments of approximately $130,000. The Company believes that the rent for such
property does not exceed the fair market rental value thereof.

Prior to the consummation of the Offering, Mr. Reagan will purchase NEMSI's
headquarters from NEMSI for $1,350,000, the value of such property as appraised
by a third party. NEMSI will enter into a long-term lease for such property with
annual rental payments of approximately $175,560. The Company believes that the
rent for such property does not exceed the fair market rental value thereof.

Air Systems has guaranteed a $155,000 loan to the John W. Davis Family
Trust. The purpose of the loan was to purchase property that the trust then
leased to Air Systems. Air Systems guaranteed such loan because such loan was a
small business loan and required a guarantee by a small business. Such loan
matures on August 1, 2017 and bears interest at a rate of approximately 6.9% per
annum.

COMPANY POLICY

Certain related-party transactions described above under 'Other
Transactions' were not entered into on an arm's-length basis. Following the
consummation of this Offering, the Company does not expect to make advances and
reimbursements of the types described above. In any event, it is the Company's
policy that any future transactions with officers, directors and affiliates will
be approved by a majority of the disinterested members of the Board of
Directors, and will be made on terms no less favorable to the Company than could
be obtained from unaffiliated third parties.

<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth, after giving effect to the Mergers and this
Offering, certain information with respect to the beneficial ownership of the
Common Stock of the Company by (i) each person known by the Company to
beneficially own more than 5% of the outstanding shares of Common Stock; (ii)
each director and person who will become a director upon the consummation of
this Offering (collectively, 'named directors'); (iii) each executive officer;
and (iv) all executive officers, directors and named directors as a group. All
persons listed have sole voting and investment power with respect to their
shares unless otherwise indicated.

<TABLE>
<CAPTION>
SHARES TO BE
BENEFICIALLY OWNED
AFTER OFFERING
-----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER PERCENT
- ---------------------------------------------------------------------------------------- ---------- -------
<S> <C> <C>
Rodney C. Gilbert(2).................................................................... 475,333 2.7%
William M. Dillard(3)................................................................... 678,948 3.9
Marty R. Kittrell(4).................................................................... 99,074 *
Nicholas J. Costanza(5)................................................................. 33,750 *
Charles A. Chesnutt(6).................................................................. 8,750 *
Alan L. Barnes, Sr.(7).................................................................. 672,090 3.9
John W. Davis(8)........................................................................ 1,332,277 7.7
Robert S. Lafferty...................................................................... 323,889 1.9
William B. Lee.......................................................................... 476,342 2.7
Charles P. Reagan....................................................................... 727,471 4.2
Anthony I. Shaker(9).................................................................... 564,201 3.3
Mark A. Zilbermann(10).................................................................. 574,497 3.3
William J. Lynch(11).................................................................... 257,634 1.5
Kathleen A. Murray...................................................................... -- --
Charles R. Scott........................................................................ -- --
All executive officers, directors and named directors as a group (15 persons)(12)....... 6,224,256 35.8%
</TABLE>

- ------------

* Less than 1.0%

(1) Unless otherwise indicated, the address of the beneficial owners is c/o
Enfinity Corporation, 400 Lake Ridge Drive, Smyrna, Georgia 30082.

(2) Includes 50,000 shares issuable in connection with options that are
exercisable within 60 days of the consummation of this Offering.

(3) An aggregate of 339,474 of these shares are owned of record by the William
Mason Dillard Revocable Trust, of which Mr. Dillard is the trustee. An
aggregate of 339,474 of these shares are owned by the Deborah K. Dillard
Revocable Trust, of which Deborah K. Dillard, Mr. Dillard's spouse, is the
trustee.

(4) Includes 25,000 shares issuable in connection with options that are
exercisable within 60 days of the consummation of this Offering.

(5) Includes 18,750 shares issuable in connection with options that are
exercisable within 60 days of the consummation of this Offering.

(6) Includes 8,750 shares issuable in connection with options that are
exercisable within 60 days of the consummation of this Offering.

(7) An aggregate of 188,761 of these shares are owned of record by Mr. Barnes'
spouse.

(8) The 1,332,277 shares are owned by the John Davis Family Trust, of which Mr.
Davis is a trustee.

(9) An aggregate of 358,348 shares are owned of record by The Energy Systems
Industries, Inc. Stock Sharing Trust, of which Mr. Shaker is a trustee and
shares voting power and investment power with the other trustees with
respect to such shares.

(10) An aggregate of 8,997 of these shares are owned by the Douglas Zilbermann
1997 Trust, of which Mr. Zilbermann's spouse is the trustee. An aggregate
of 8,997 of these shares are owned by the Aaron Zilbermann 1997 Trust, of
which Mr. Zilbermann's spouse is the trustee.

(footnotes continued on next page)

<PAGE>

(footnotes continued from previous page)

(11) Includes 147,220 shares owned of record by Mr. Lynch and 110,414 shares
owned of record by Capstone, of which Mr. Lynch is a principal. Does not
include an aggregate of 294,440 shares owned of record by two other
principals of Capstone, as to which shares Mr. Lynch disclaims beneficial
ownership.

(12) Includes 102,500 shares issuable in connection with options that are
exercisable within 60 days of the consummation of this Offering.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company's authorized capital stock consists of 49,000,000 shares of
Common Stock, par value $.01 per share, and 500,000 shares of undesignated
preferred stock, par value $.01 per share (the 'Preferred Stock'). After giving
effect to the Mergers and the completion of this Offering, the Company will have
outstanding 17,345,452 shares of Common Stock and no shares of Preferred Stock.
See 'Shares Eligible for Future Sale.'

The following statements are brief summaries of certain provisions with
respect to the Company's capital stock contained in its Amended and Restated
Certificate of Incorporation (the 'Certificate of Incorporation') and By-Laws,
copies of which have been filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following is qualified in its entirety by
reference thereto.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors. Subject
to the rights of any then outstanding shares of Preferred Stock, the holders of
Common Stock are entitled to such dividends as may be declared in the discretion
of the Board of Directors out of funds legally available therefor. See 'Dividend
Policy.' Holders of Common Stock are entitled to share ratably in the net assets
of the Company upon liquidation after payment or provision for all liabilities
and any preferential liquidation rights of any Preferred Stock then outstanding.
The holders of Common Stock have no preemptive rights to purchase shares of
stock of the Company. Shares of Common Stock are not subject to any redemption
provisions and are not convertible into any other securities of the Company,
except as provided in the following paragraph. All outstanding shares of Common
Stock are, and the shares of Common Stock to be issued pursuant to this Offering
will be upon payment therefor, fully paid and non-assessable.

The Common Stock has been approved for listing on the New York Stock
Exchange under the symbol 'BTU,' subject to official notice of issuance.

PREFERRED STOCK

The Preferred Stock may be issued from time to time by the Board of
Directors in one or more series. Subject to the provisions of the Company's
Certificate of Incorporation and limitations prescribed by law, the Board of
Directors is expressly authorized to adopt resolutions to issue the shares, to
fix the number of shares and to change the number of shares constituting any
series and to provide for or change the voting powers, designations, preferences
and relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), redemption prices, conversion rights and
liquidation preferences of the shares constituting any series of the Preferred
Stock, in each case without any further action or vote by the stockholders. The
Company has no current plans to issue any shares of Preferred Stock.

One of the effects of undesignated Preferred Stock may be to enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of the Company by means of a tender offer, proxy contest, merger
or otherwise, and thereby to protect the continuity of the Company's management.
The issuance of shares of the Preferred Stock pursuant to the Board of
Directors' authority described above may adversely affect the rights of the
holders of Common Stock. For example, Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. Accordingly, the issuance of shares of Preferred Stock may
discourage bids for the Common Stock or may otherwise adversely affect the
market price of the Common Stock.

STATUTORY BUSINESS COMBINATION PROVISION

Upon the consummation of this Offering, the Company will be subject to the
provisions of Section 203 ('Section 203') of the Delaware General Corporation
Law (the 'DGCL'). Section 203

<PAGE>

provides, with certain exceptions, that a Delaware corporation may not engage in
any of a broad range of business combinations with a person or an affiliate or
associate of such person, who is an 'interested stockholder' for a period of
three years from the date that such person became an interested stockholder
unless: (i) the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the Board of Directors
of the corporation before the person becomes an interested stockholder; (ii) the
interested stockholder acquired 85% or more of the outstanding voting stock of
the corporation in the same transaction that makes such person an interested
stockholder (excluding shares owned by persons who are both officers and
directors of the corporation, and shares held by certain employee stock
ownership plans); or (iii) on or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation's board of
directors and by the holders of at least 66 2/3% of the corporation's
outstanding voting stock at an annual or special meeting, excluding shares owned
by the interested stockholder. Under Section 203, an 'interested stockholder' is
defined as any person who is (i) the owner of 15% or more of the outstanding
voting stock of the corporation or (ii) an affiliate or associate of the
corporation and who was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within the three-year period immediately prior to
the date on which it is sought to be determined whether such person is an
interested stockholder.

The Company's stockholders, by adopting an amendment to the Certificate of
Incorporation, may elect not to be governed by Section 203, which election would
be effective 12 months after such adoption. The provisions of Section 203 could
delay or frustrate a change in control of the Company, deny stockholders the
receipt of a premium on their Common Stock and have an adverse effect on the
Common Stock. The provisions also could discourage, impede or prevent a merger
or tender offer, even if such event would be favorable to the interests of
stockholders.

LIMITATION ON DIRECTORS' LIABILITIES

Limitation on Liability. Pursuant to the Company's Certificate of
Incorporation and as permitted by Section 102(b)(7) of the DGCL, directors of
the Company are not liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty, except for liability in connection with a
breach of duty of loyalty, for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, for dividend
payments or stock repurchases that are illegal under Delaware law or for any
transaction in which a director has derived an improper personal benefit.

Indemnification. To the maximum extent permitted by law, the Certificate of
Incorporation provides for mandatory indemnification of directors and officers
of the Company against any expense, liability and loss to which they become
subject, or which they may incur as a result of having been a director or
officer of the Company. In addition, the Company must advance or reimburse
directors and officers for expenses incurred by them in connection with certain
claims.

POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF THE CERTIFICATE OF
INCORPORATION AND BY-LAWS OF THE COMPANY

The Certificate of Incorporation and By-Laws of the Company contain
provisions that could have an anti-takeover effect. The provisions are intended
to enhance the likelihood of continuity and stability in the composition of the
Board of Directors and in the policies formulated by the Board of Directors.
These provisions also are intended to help ensure that the Board of Directors,
if confronted by an unsolicited proposal from a third party which has acquired a
block of stock of the Company, will have sufficient time to review the proposal
and appropriate alternatives to the proposal and to act in what it believes to
be the best interest of the stockholders.

The following is a summary of such provisions included in the Certificate
of Incorporation and By-Laws of the Company. The Board of Directors has no
current plans to formulate or effect additional measures that could have an
anti-takeover effect.

Classified Board of Directors. The Certificate of Incorporation provides
for a Board of Directors divided into three classes of directors serving
staggered three-year terms. The classification of directors has the effect of
making it more difficult for stockholders to change the composition of the Board
of

<PAGE>

Directors in a relatively short period of time. At least two annual meetings of
stockholders, instead of one, generally will be required to effect a change in a
majority of the Board of Directors. Such a delay may help ensure that the Board
of Directors and the stockholders, if confronted with an unsolicited proposal by
a stockholder attempting to force a stock repurchase at a premium above market,
a proxy contest or an extraordinary corporate transaction, will have sufficient
time to review the proposal and appropriate alternatives to the proposal and to
act in what it believes to be the best interest of the stockholders. Directors,
if any, elected by holders of preferred stock voting as a class, will not be
classified as aforesaid. Moreover, under Delaware law, in the case of a
corporation having a classified board, stockholders may remove a director only
for cause. This provision will preclude a stockholder from removing incumbent
directors without cause.

Advance Notice Requirements for Director Nominees. The By-Laws establish an
advance notice procedure with regard to the nomination of candidates for
election as directors at any meeting of stockholders called for the election of
directors. The procedure provides that a notice relating to the nomination of
directors must be timely given in writing to the Secretary of the Company prior
to the meeting. To be timely, notice relating to the nomination of directors for
election at an annual meeting must be delivered not later than the close of
business on the later of the 90th day prior to such annual meeting or the 10th
day following the day of which public announcement of the date of such annual
meeting is first made. Notice relating to the nomination of directors for
election at a special meeting must be given not later than the close of business
on the 10th day following the date notice of such meeting is mailed to
stockholders or public disclosure of the date of such meeting is made.

Notice to the Company from a stockholder who proposes to nominate a person
at a meeting for election as a director must be accompanied by each proposed
nominee's written consent and contain the name, address and principal occupation
of each proposed nominee. Such notice must also contain the total number of
shares of capital stock of the Company that will be voted for each of the
proposed nominees, the number of shares of each class of capital stock of the
Company beneficially owned by such person and other information that may be
required under the proxy rules of the Commission. Such notice must also contain
the name and address of the notifying stockholder and the number of shares of
capital stock of the Company owned by the notifying stockholder.

Although the Company's By-Laws do not give the Board of Directors any power
to approve or disapprove stockholder nominations for the election of directors
or of any other business desired by stockholders to be conducted at an annual or
any other meeting, the Company's By-Laws (i) may have the effect of precluding a
nomination for the election of directors or precluding the conduct of business
at a particular meeting if the proper procedures are not followed or (ii) may
discourage or deter a third party from conducting a solicitation of proxies to
elect its own slate of directors or otherwise attempting to obtain control of
the Company, even if the conduct of such solicitation or such attempt might be
beneficial to the Company and its stockholders.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is State Street Bank
and Trust Company.

<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

After this Offering, the Company will have outstanding 17,345,452 shares of
Common Stock. The shares sold in this Offering (plus any additional shares sold
upon exercise of the Underwriters' over-allotment option) will be freely
tradable without restriction unless acquired by affiliates of the Company. None
of the remaining 9,345,452 outstanding shares of Common Stock has been
registered under the Securities Act, which means that such shares may be resold
publicly only upon registration under the Securities Act or in compliance with
an exemption from the registration requirements of the Securities Act, including
the exemption provided by Rule 144 thereunder.

In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of the acquisition of the restricted shares of
Common Stock from either the Company or any affiliate of the Company, the
acquirer or subsequent holder thereof may sell, within any three-month period
commencing 90 days after the date of the Prospectus relating to this Offering, a
number of shares that does not exceed the greater of one percent of the then
outstanding shares of the Common Stock, or the average weekly trading volume of
the Common Stock on the New York Stock Exchange during the four calendar weeks
preceding the date on which notice of the proposed sale is sent to the
Commission. Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about the Company. If two years have elapsed since the later of the
date of the acquisition of restricted shares of Common Stock from the Company or
any affiliate of the Company, a person who is not deemed to have been an
affiliate of the Company at any time for 90 days preceding a sale would be
entitled to sell such shares under Rule 144 without regard to the volume
limitations, manner of sale provisions or notice requirements.

Upon the completion of this Offering, the holders of Common Stock who did
not purchase shares in this Offering will own 9,345,452 shares of Common Stock,
including the stockholders of the Founding Companies, who will receive in the
aggregate 8,243,971 shares in connection with the Mergers, and management of and
consultants to Enfinity, who own 1,101,481 shares. These shares have not been
registered under the Securities Act and, therefore, may not be sold unless
registered under the Securities Act or sold pursuant to an exemption from
registration, such as the exemption provided by Rule 144. Furthermore, these
stockholders have agreed with the Company to certain restrictions on the sale,
transfer or other disposition of these shares following the consummation of this
Offering. Such transfer restrictions will end: (i) as to 50% of the shares, two
years after the consummation of this Offering; (ii) as to the next 25% of the
shares, 30 months after the consummation of this Offering; (iii) as to the
remaining 25% of the shares, three years after the consummation of this
Offering. In addition, the Company has agreed to enforce for the benefit of
NationsBanc Montgomery Securities LLC such transfer restrictions for a period of
180 days after the date of this Prospectus See 'Underwriting.'

In connection with the Mergers, the Company has agreed to provide certain
registration rights with respect to the Common Stock issued to the stockholders
of the Founding Companies. The registration rights provide for a single demand
registration right, exercisable by the holders of a majority of the shares of
Common Stock subject to the registration rights, pursuant to which the Company
will file a registration statement under the Securities Act to register the sale
of shares by those requesting stockholders and any other holders of Common Stock
subject to the registration rights who desire to sell pursuant to such
registration statement. The demand request may not be made until the expiration
of three years after the closing of this Offering. In addition, subject to
certain conditions and limitations, the holders of Common Stock with such
registration rights as well as management of and consultants to the Company,
have the right to participate in registrations by the Company of its equity
securities in underwritten offerings, subject to certain exceptions, which
include shelf registrations for future acquisitions and registrations relating
to employee benefit plans.

In the case of each of the registration rights described above, the Company
is generally required to pay the costs associated with any offering pursuant to
such registration rights other than underwriting discounts and commissions
attributable to the shares sold on behalf of the selling stockholders.

<PAGE>

exchangeable for Common Stock, for a period of 180 days after the date of this
Prospectus without the prior written consent of NationsBanc Montgomery
Securities LLC, except for, in the case of the Company, Common Stock issued
pursuant to the Plan or in connection with acquisitions, subject in each case to
any remaining portion of the 180-day period applying to the shares issued. In
evaluating any request for a waiver of the 180-day lock-up period, NationsBanc
Montgomery Securities LLC will consider, in accordance with its customary
practice, all relevant facts and circumstances at the time of the request,
including, without limitation, the recent trading market for the Common Stock,
the size of the request and, with respect to a request by the Company to issue
additional equity securities, the purpose of such an issuance. See
'Underwriting.'

The 5,000,000 shares of Common Stock to be registered pursuant to the
Company's shelf registration statement will be, upon issuance thereof, freely
tradable unless acquired by parties to the acquisition or affiliates of such
parties, other than the issuer, in which case they may be sold pursuant to Rule
145 under the Securities Act. Rule 145 permits such persons to resell
immediately securities acquired in transactions covered under the Rule, provided
such securities are resold in accordance with the public information, volume
limitations and manner of sale requirements of Rule 144. If a period of one year
has elapsed since the date such securities were acquired in such transaction and
if the issuer meets the public information requirements of Rule 144, Rule 145
permits a person who is not an affiliate of the issuer to freely resell such
securities. The contemplated offering of such 5,000,000 additional shares will
be made only by means of a prospectus. The Company generally intends to
contractually restrict the shares issued in connection with future acquisitions.
The registration rights described above do not apply to such shelf registration
statement.

Sales, or the availability for sale of, substantial amounts of the Common
Stock in the public market could adversely affect prevailing market prices and
the ability of the Company to raise equity capital in the future.

<PAGE>

UNDERWRITING

The Underwriters named below (the 'Underwriters'), represented by
NationsBanc Montgomery Securities LLC, Lehman Brothers Inc. and Raymond James &
Associates, Inc. (the 'Representatives'), have severally agreed, subject to the
terms and conditions in the underwriting agreement (the 'Underwriting
Agreement') by and between the Company and the Underwriters, to purchase from
the Company the number of shares of Common Stock indicated below opposite its
name, at the public offering price less the underwriting discount set forth on
the cover page of this Prospectus. The Underwriting Agreement provides that the
obligations of the Underwriters are subject to certain conditions precedent and
that the Underwriters are committed to purchase all of the shares of Common
Stock, if they purchase any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- --------------------------------------------------------------------------------- ---------
<S> <C>
NationsBanc Montgomery Securities LLC............................................
Lehman Brothers Inc..............................................................
Raymond James & Associates, Inc..................................................

---------
Total....................................................................... 8,000,000
---------
---------
</TABLE>

The Representatives have advised the Company that the Underwriters propose
initially to offer the Common Stock to the public on the terms set forth on the
cover page of this Prospectus. The Underwriters may allow selected dealers a
concession of not more than $ per share; and the Underwriters may allow,
and such dealers may reallow, a concession of not more than $ per share to
certain other dealers. After the initial public offering, the public offering
price and other selling terms may be changed by the Representatives. The Common
Stock is offered subject to receipt and acceptance by the Underwriters, and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted to the Underwriters an option, exercisable for the
30-day period after the date of this Prospectus, to purchase up to a maximum of
1,200,000 additional shares of Common Stock to cover over-allotments, if any, at
the same price per share as the initial shares to be purchased by the
Underwriters. To the extent that the Underwriters exercise such over-allotment
option, the Underwriters will be committed, subject to certain conditions, to
purchase such additional shares in approximately the same proportion as set
forth in the above table. The Underwriters may purchase such shares only to
cover over-allotments made in connection with this Offering.

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

The Company's officers and directors and all of the stockholders of the
Company prior to this Offering have agreed that for a period of 180 days after
the date of this Prospectus they will not, without the prior written consent of
NationsBanc Montgomery Securities LLC, directly or indirectly sell, offer,
contract or grant any option to sell, pledge, transfer, establish an open put
equivalent position or otherwise dispose of any shares of Common Stock, options
or warrants to acquire shares of Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock. In addition, the
Company has agreed to enforce for the benefit of NationsBanc Montgomery
Securities LLC the restrictions on the sale, transfer or other disposition of
shares of Common Stock that the stockholders of the Founding Companies agreed to
in the Merger Agreements for a period of 180 days after the date of this
Prospectus. The Company has also agreed not to issue, offer, sell, grant options
to purchase or otherwise dispose of any of the Company's equity securities for a
period of 180 days after the effective date of this Offering without the prior
written consent of NationsBanc Montgomery Securities LLC, except for securities
issued by the Company in connection with acquisitions and for grants and
exercises of stock options, subject in each case to any remaining portion of the
180-day period applying to the shares issued. In evaluating any request for a
waiver of the 180-day lock-up

<PAGE>

period, NationsBanc Montgomery Securities LLC will consider, in accordance with
its customary practice, all relevant facts and circumstances at the time of the
request, including, without limitation, the recent trading market for the Common
Stock, the size of the request and, with respect to a request by the Company to
issue additional equity securities, the purpose of such an issuance.

In connection with the Offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M under the Securities Exchange Act of 1934,
pursuant to which such persons may bid for or purchase Common Stock for the
purpose of stabilizing its market price. The Underwriters also may create a
short position for the account of the Underwriters by selling more Common Stock
in connection with this Offering than they are committed to purchase from the
Company and, in such case, may purchase Common Stock in the open market
following completion of this Offering to cover all or a portion of such short
position. The Underwriters may also cover all or a portion of such short
position, up to 1,200,000 shares of Common Stock, by exercising the
Underwriters' over-allotment option referred to above. In addition, NationsBanc
Montgomery Securities LLC, on behalf of the Underwriters, may impose 'penalty
bids' under contractual arrangements with the Underwriters whereby it may
reclaim from an Underwriter (or dealer participating in this Offering) for the
account of the other Underwriters, the selling concession with respect to Common
Stock that is distributed in this Offering but subsequently purchased for the
account of the Underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Common Stock at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph is required, and,
if any such transaction is undertaken, it may be discontinued at any time.

The Representatives have informed the Company that the Underwriters do not
intend to make sales of Common Stock offered by this Prospectus to accounts over
which they exercise discretionary authority in excess of 5% of the number of
shares of Common Stock offered hereby.

Prior to this Offering, there has been no public trading market for the
Common Stock. Consequently, the initial public offering price will be determined
by negotiations between the Company and the Representatives. Among the factors
expected to be considered in such negotiations are the history of, and the
prospects for, the Company and the industry in which the Company competes, an
assessment of the Company's management, its financial condition, its past and
present earnings and the trend of such earnings, the prospects for future
earnings of the Company, the present state of the Company's development, the
general condition of the economy and the securities markets at the time of this
Offering and the market prices of the demand for publicly traded stock of
comparable companies in recent periods.

<PAGE>

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered by this
Prospectus will be passed upon for the Company by Morgan, Lewis & Bockius LLP,
New York, New York. Certain legal matters related to this Offering will be
passed upon for the Underwriters by Fulbright & Jaworski L.L.P., New York, New
York.

EXPERTS

The Enfinity financial statements as of December 31, 1997 and for the
period from inception to December 31, 1997; the Brandt financial statements as
of December 31, 1996 and 1997 and March 31, 1998, for the period from May 25 to
December 31, 1995, for each of the two years in the period ended December 31,
1997 and for the three months ended March 31, 1998; the Energy Systems financial
statements as of December 31, 1996 and 1997 and for each of the three years in
the period ended December 31, 1997; the NEMSI financial statements as of
December 31, 1996 and 1997 and for each of the two years in the period ended
December 31, 1997; the Lee financial statements as of December 31, 1996 and 1997
and for each of the two years in the period ended December 31, 1997; the Hill
York financial statements as of March 31, 1996 and 1997, as of December 31,
1997, for each of the two years in the period ended March 31, 1997 and for the
nine months ended December 31, 1997; the Mechanical Services financial
statements as of December 31, 1997 and for the year then ended; and the Aircond
financial statements as of September 30, 1996 and 1997, as of December 31, 1997
and for each of the three years in the period ended December 31, 1997 included
elsewhere in this Prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The Air Systems financial statements as of February 28, 1997 and February
28, 1998 and for the three years in the period ended February 28, 1998 included
elsewhere in this Prospectus have been so included in reliance on the report of
Shilling & Kenyon Inc., independent accountants, given on the authority of said
firm as experts in auditing and accounting.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-1 with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information pertaining to the Company and the
shares of Common Stock offered hereby, reference is made to such Registration
Statement, including the exhibits, financial statements and schedules filed
therewith. Statements contained in this Prospectus as to the contents of any
contract or any other document are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained from the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically. The address of such Internet web site is
http://www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by independent certified public
accountants and to make available quarterly reports containing unaudited summary
financial information for each of the first three quarters of each fiscal year.

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

ENFINITY CORPORATION
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
ENFINITY CORPORATION UNAUDITED COMBINED PRO FORMA FINANCIAL STATEMENTS
Introduction to Unaudited Pro Forma Combined Financial Statements................................... F-3
Unaudited Pro Forma Combined Balance Sheet.......................................................... F-4
Unaudited Pro Forma Combined Statements of Operations............................................... F-5
Notes to Unaudited Pro Forma Combined Financial Statements.......................................... F-8
ENFINITY CORPORATION
Report of Independent Accountants................................................................... F-12
Balance Sheet....................................................................................... F-13
Statement of Operations............................................................................. F-14
Statement of Cash Flows............................................................................. F-15
Notes to Financial Statements....................................................................... F-16

FOUNDING COMPANIES
BRANDT MECHANICAL SERVICES, INC.
Report of Independent Accountants................................................................... F-20
Consolidated Balance Sheet.......................................................................... F-21
Consolidated Statement of Operations................................................................ F-22
Consolidated Statement of Stockholders' Equity...................................................... F-23
Consolidated Statement of Cash Flows................................................................ F-24
Notes to Consolidated Financial Statements.......................................................... F-25
AIR SYSTEMS, INC.
Report of Independent Accountants................................................................... F-31
Balance Sheet....................................................................................... F-32
Statement of Operations............................................................................. F-33
Statement of Stockholders' Equity................................................................... F-34
Statement of Cash Flows............................................................................. F-35
Notes to Financial Statements....................................................................... F-36
ENERGY SYSTEMS INDUSTRIES, INC.
Report of Independent Accountants................................................................... F-44
Consolidated Balance Sheet.......................................................................... F-45
Consolidated Statement of Operations................................................................ F-46
Consolidated Statement of Stockholders' Equity...................................................... F-47
Consolidated Statement of Cash Flows................................................................ F-48
Notes to Consolidated Financial Statements.......................................................... F-49
NEW ENGLAND MECHANICAL SERVICES, INC.
Report of Independent Accountants................................................................... F-59
Balance Sheet....................................................................................... F-60
Statement of Operations............................................................................. F-61
Statement of Stockholders' Equity................................................................... F-62
Statement of Cash Flows............................................................................. F-63
Notes to Financial Statements....................................................................... F-64
LEE COMPANY
Report of Independent Accountants................................................................... F-72
Balance Sheet....................................................................................... F-73
Statement of Operations............................................................................. F-74
Statement of Stockholders' Equity................................................................... F-75
Statement of Cash Flows............................................................................. F-76
Notes to Financial Statements....................................................................... F-77
</TABLE>

F-1

<PAGE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
HILL YORK CORPORATION AND HILL YORK SERVICE CORPORATION
Report of Independent Accountants................................................................... F-85
Combined Balance Sheet.............................................................................. F-86
Combined Statement of Operations.................................................................... F-87
Combined Statement of Stockholders' Equity.......................................................... F-88
Combined Statement of Cash Flows.................................................................... F-89
Notes to Combined Financial Statements.............................................................. F-90
MECHANICAL SERVICES OF ORLANDO, INC.
Report of Independent Accountants................................................................... F-98
Balance Sheet....................................................................................... F-99
Statement of Operations............................................................................. F-100
Statement of Stockholders' Equity................................................................... F-101
Statement of Cash Flows............................................................................. F-102
Notes to Financial Statements....................................................................... F-103
AIRCOND CORPORATION
Report of Independent Accountants................................................................... F-109
Balance Sheet....................................................................................... F-110
Statement of Operations............................................................................. F-111
Statement of Stockholders' Equity................................................................... F-112
Statement of Cash Flows............................................................................. F-113
Notes to Financial Statements....................................................................... F-114
</TABLE>

F-2

<PAGE>

ENFINITY CORPORATION
INTRODUCTION TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined financial statements give effect
to the acquisitions by Enfinity Corporation ('Enfinity') of the outstanding
capital stock of Brandt Mechanical Services, Inc. ('Brandt'), Air Systems, Inc.
('Air Systems'), Energy Systems Industries, Inc. ('Energy Systems'), New England
Mechanical Services, Inc. ('NEMSI'), Lee Company ('Lee'), Hill York Corporation
('Hill York'), Mechanical Services of Orlando, Inc. ('Mechanical Services') and
Aircond Corp. ('Aircond') (together, the 'Founding Companies'). These
acquisitions (the 'Mergers') will occur simultaneously with the closing of
Enfinity's initial public offering (this 'Offering') and will be accounted for
using the purchase method of accounting. In accordance with the provisions of
Staff Accounting Bulletin No. 97, Brandt is deemed to be the accounting acquiror
as its stockholders will receive the largest portion of the voting rights in the
combined corporation.

The Unaudited Pro Forma Combined Balance Sheet gives effect to the Mergers
and the Offering as if they had occurred on March 31, 1998. The Unaudited Pro
Forma Combined Statement of Operations gives effect to these transactions as if
they had occurred on January 1, 1997.

Enfinity has preliminarily analyzed the savings that it expects to be
realized from reductions in salaries and certain benefits to the owners of the
Founding Companies. To the extent certain of the owners of the Founding
Companies have agreed prospectively to reductions in salary, bonuses and
benefits, these reductions have been reflected in the pro forma combined
statement of operations. With respect to other potential cost savings, Enfinity
has not and cannot quantify these savings until completion of the combination of
the Founding Companies. It is anticipated that these savings will be offset by
costs related to Enfinity's new corporate management and by the costs associated
with being a public company. However, these costs, like the savings they offset,
cannot be accurately quantified at this time. Neither the anticipated savings
nor the anticipated costs have been included in the pro forma financial
information of Enfinity.

The pro forma adjustments are based on estimates, available information and
certain assumptions and may be revised as additional information becomes
available. The pro forma combined financial data do not purport to represent
what Enfinity's financial position or results of operations would actually have
been if such transactions in fact had occurred on those assumed dates and are
not necessarily representative of Enfinity's financial position or results of
operations for any future period. Since the Founding Companies were not under
common control or management, historical combined results may not be comparable
to, or indicative of, future performance. The unaudited pro forma combined
financial statements should be read in conjunction with the other financial
statements and notes thereto included elsewhere in this Prospectus. See 'Risk
Factors' included elsewhere herein.

F-3

<PAGE>

ENFINITY CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
AIR ENERGY HILL
ENFINITY BRANDT SYSTEMS SYSTEMS NEMSI LEE YORK
-------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............... $ 35 $ 3,439 $ -- $ -- $ 85 $ 126 $ 201
Accounts receivable:
Trade................... -- 6,588 23,184 9,290 4,862 6,140 6,129
Retainage............... -- 2,968 5,487 653 609 1,333 1,872
Other................... -- -- -- 119 56 133 --
Costs and estimated
earnings in excess of
billings on uncompleted
contracts................. -- 1,121 5,511 727 499 1,848 522
Inventories................ -- 87 872 296 349 116 189
Due from related parties
and stockholders.......... -- -- -- -- -- 241 --
Prepaid expenses and other
current assets............ -- 213 549 118 160 118 950
Deferred income taxes...... -- -- 390 755 356 523 --
-------- ------- ------- ------- ------- ------- ---------
Total current assets.... 35 14,416 35,993 11,958 6,976 10,578 9,863
Property and equipment, net... -- 145 4,771 960 3,140 3,567 1,536
Goodwill...................... -- -- -- -- 2,164 -- --
Due from related parties and
stockholders................. -- -- -- -- -- 303
Other assets.................. -- 82 189 750 43 709 175
-------- ------- ------- ------- ------- ------- ---------
Total assets............ $ 35 $14,643 $40,953 $13,668 $12,323 $14,854 $11,877
-------- ------- ------- ------- ------- ------- ---------
-------- ------- ------- ------- ------- ------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt............ $-- $ -- $7,808 $2,398 $1,454 $ 421 $ 140
Accounts payable and
accrued expenses.......... -- 4,482 11,435 6,502 2,830 4,437 5,262
Billings in excess of costs
and estimated earnings on
uncompleted contracts..... -- 3,056 11,374 410 1,070 1,221 3,012
Deferred revenue........... -- -- -- 503 -- 349 275
Income taxes payable....... -- -- 924 109 111 601 79
Notes payable to
stockholders and related
parties................... 33 -- -- -- -- -- --
-------- ------- ------- ------- ------- ------- ---------
Total current
liabilities........... 33 7,538 31,541 9,922 5,465 7,029 8,768
Long-term debt, net of current
portion...................... -- -- 1,909 -- 2,081 50 --
Obligations under capital
lease, net of current
portion...................... -- -- 25 21 278 2,648 479
Deferred income taxes......... -- -- 331 -- 74 -- 10
Other long-term liabilities... -- 1,362 -- -- 1,111 -- --
-------- ------- ------- ------- ------- ------- ---------
Total liabilities....... 33 8,900 33,806 9,943 9,009 9,727 9,257
-------- ------- ------- ------- ------- ------- ---------
Stockholders' equity:
Common stock............... -- 1 31 -- 7 38 869
Additional paid-in
capital................... 802 -- -- 2,665 2,206 38 --
Net unrealized gain on
securities available for
sale...................... -- -- -- 32 -- 135 --
Retained (deficit)
earnings.................. (800) 5,742 7,116 2,028 1,124 4,916 1,751
Less: Treasury stock....... -- -- -- (1,000) (23) -- --
-------- ------- ------- ------- ------- ------- ---------
Total stockholders'
equity................ 2 5,743 7,147 3,725 3,314 5,127 2,620
-------- ------- ------- ------- ------- ------- ---------
Total liabilities and
stockholders'
equity................ $ 35 $14,643 $40,953 $13,668 $12,323 $14,854 $11,877
-------- ------- ------- ------- ------- ------- ---------
-------- ------- ------- ------- ------- ------- ---------

<CAPTION>
MERGER OFFERING
ADJUSTMENTS PRO ADJUSTMENTS
MECHANICAL (SEE FORMA (SEE AS
SERVICES AIRCOND NOTE 3) COMBINED NOTE 3) ADJUSTED
----------- ------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............... $ 254 $2,305 $ -- $ 6,445 $ 3,396 $ 9,841
Accounts receivable:
Trade................... 3,897 5,455 -- 65,545 -- 65,545
Retainage............... 720 -- -- 13,642 -- 13,642
Other................... 65 -- -- 373 -- 373
Costs and estimated
earnings in excess of
billings on uncompleted
contracts................. 166 531 -- 10,925 -- 10,925
Inventories................ 122 419 -- 2,450 -- 2,450
Due from related parties
and stockholders.......... -- 57 -- 298 -- 298
Prepaid expenses and other
current assets............ 118 678 -- 2,904 (841) 2,063
Deferred income taxes...... 7 -- 421 2,452 -- 2,452
----- ------- ----------- -------- ----------- --------
Total current assets.... 5,349 9,445 421 105,034 2,555 107,589
Property and equipment, net... 579 5,125 -- 19,823 -- 19,823
Goodwill...................... -- -- 113,846 116,010 -- 116,010
Due from related parties and
stockholders................. -- -- -- 303 -- 303
Other assets.................. 143 289 60 2,440 -- 2,440
----- ------- ----------- -------- ----------- --------
Total assets............ $ 6,071 $14,859 $ 114,327 $243,610 $ 2,555 $246,165
----- ------- ----------- -------- ----------- --------
----- ------- ----------- -------- ----------- --------
LIABILITIES AND STOCKHOLDERS'
Current liabilities:
Short-term debt............ $ 45 $ 870 $ (41) $13,095 $ (1,082) $12,013
Accounts payable and
accrued expenses.......... 1,296 2,222 (48) 38,418 (174) 38,244
Billings in excess of costs
and estimated earnings on
uncompleted contracts..... 339 416 -- 20,898 -- 20,898
Deferred revenue........... 96 643 -- 1,866 -- 1,866
Income taxes payable....... 147 -- -- 1,971 -- 1,971
Notes payable to
stockholders and related
parties................... -- -- 87,536 87,569 (87,536) 33
----- ------- ----------- -------- ----------- --------
Total current
liabilities........... 1,923 4,151 87,447 163,817 (88,792) 75,025
Long-term debt, net of current
portion...................... -- 1,217 (482) 4,775 (4,725) 50
Obligations under capital
lease, net of current
portion...................... -- 3,464 -- 6,915 -- 6,915
Deferred income taxes......... 375 -- -- 790 -- 790
Other long-term liabilities... -- 148 (743) 1,878 (368) 1,510
----- ------- ----------- -------- ----------- --------
Total liabilities....... 2,298 8,980 86,222 178,175 (93,885) 84,290
----- ------- ----------- -------- ----------- --------
Stockholders' equity:
Common stock............... -- 250 (1,103) 93 80 173
Additional paid-in
capital................... 7 -- 89,110 94,828 96,360 191,188
Net unrealized gain on
securities available for
sale...................... -- -- (167) -- -- --
Retained (deficit)
earnings.................. 3,766 5,629 (60,758) (29,486) -- (29,486)
Less: Treasury stock....... -- -- 1,023 -- -- --
----- ------- ----------- -------- ----------- --------
Total stockholders'
equity................ 3,773 5,879 28,105 65,435 96,440 161,875
----- ------- ----------- -------- ----------- --------
Total liabilities and
stockholders'
equity................ $ 6,071 $14,859 $ 114,327 $243,610 $ 2,555 $246,165
----- ------- ----------- -------- ----------- --------
----- ------- ----------- -------- ----------- --------
</TABLE>

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

F-4

<PAGE>

ENFINITY CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
AIR ENERGY
BRANDT SYSTEMS SYSTEMS NEMSI LEE
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Revenues...................... $50,435 $90,969 $54,228 $39,357 $39,681
Cost of revenues.............. 42,032 75,149 45,893 31,217 30,316
------- ------- ------- ------- -------
Gross profit.......... 8,403 15,820 8,335 8,140 9,365
Selling, general and
administrative expenses..... 5,287 11,370 6,869 6,442 7,325
Employee stock compensation
(non-recurring)............. -- -- -- 795 --
Amortization of goodwill,
net......................... (636) -- -- 60 --
------- ------- ------- ------- -------
Income from operations.... 3,752 4,450 1,466 843 2,040
Other (income) expense:
Interest expense.......... 12 636 265 451 521
Interest income........... (175) -- (5) -- (44)
Other, net................ (1) -- (24) 2 (187)
------- ------- ------- ------- -------
Income before provision for
income taxes................ 3,916 3,814 1,230 390 1,750
Provision for income taxes.... -- 1,608 554 186 685
------- ------- ------- ------- -------
Net income.................... $ 3,916 $2,206 $ 676 $ 204 $ 1,065
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Net income per share, basic
and diluted.................
Shares used in computing pro
forma basic net income per
share (see Note 5)..........
Shares used in computing pro
forma diluted net income per
share (see Note 5)..........

<CAPTION>
PRO FORMA
MECHANICAL ADJUSTMENTS PRO FORMA
HILL YORK SERVICES AIRCOND (SEE NOTE 4) COMBINED
---------- ---------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues...................... $ 34,170 $ 28,279 $27,648 $ -- $364,767
Cost of revenues.............. 26,551 24,511 18,080 -- 293,749
---------- ---------- ------- ------------ ---------
Gross profit.......... 7,619 3,768 9,568 71,018
Selling, general and
administrative expenses..... 7,089 2,530 7,799 (6,075)(A) 48,399
(237)(B)
Employee stock compensation
(non-recurring)............. -- -- -- -- 795
Amortization of goodwill,
net......................... -- -- -- 2,846(D) 2,270
---------- ---------- ------- ------------ ---------
Income from operations.... 530 1,238 1,769 3,466 19,554
Other (income) expense:
Interest expense.......... 75 10 329 (749)(E) 1,550
Interest income........... (5) (11) (94) -- (334)
Other, net................ (72) (119) 6 -- (395)
---------- ---------- ------- ------------ ---------
Income before provision for
income taxes................ 532 1,358 1,528 4,215 18,733
Provision for income taxes.... 170 543 456 4,199(F) 8,401
---------- ---------- ------- ------------ ---------
Net income.................... $ 362 $ 815 $1,072 $ 16 $ 10,332
---------- ---------- ------- ------------ ---------
---------- ---------- ------- ------------ ---------
Net income per share, basic
and diluted................. $0.60
-----
-----
Shares used in computing pro
forma basic net income per
share (see Note 5).......... 17,141,917
---------
---------
Shares used in computing pro
forma diluted net income per
share (see Note 5).......... 17,187,238
----------
----------
</TABLE>

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

F-5

<PAGE>

ENFINITY CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
AIR ENERGY
BRANDT SYSTEMS SYSTEMS NEMSI LEE
------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues...................... $7,547 $13,180 $11,265 $8,349 $6,682
Cost of revenues.............. 5,875 9,651 9,390 6,213 4,914
------ ------- ------- ------ ------
Gross profit.......... 1,672 3,529 1,875 2,136 1,768
Selling, general and
administrative expenses..... 1,191 2,492 1,728 1,299 1,328
Amortization of goodwill,
net......................... (159) -- -- 15 --
------ ------- ------- ------ ------
Income from operations.... 640 1,037 147 822 440
Other (income) expense:
Interest expense.......... -- 76 62 117 120
Interest income........... (12) -- (2) -- (13)
Other, net................ 2 -- (17) (1) (62)
------ ------- ------- ------ ------
Income before provision for
income taxes................ 650 961 104 706 395
Provision for income taxes.... -- 404 42 337 154
------ ------- ------- ------ ------
Net income.................... $ 650 $ 557 $ 62 $ 369 $ 241
------ ------- ------- ------ ------
------ ------- ------- ------ ------
Net income per share,
basic and diluted...........
Shares used in computing pro
forma basic net income per
share (see Note 5)..........
Shares used in computing pro
forma diluted net income per
share (see Note 5)..........

<CAPTION>
PRO FORMA
MECHANICAL ADJUSTMENTS PRO FORMA
HILL YORK SERVICES AIRCOND (SEE NOTE 4) COMBINED
---------- ---------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues...................... $ 8,307 $7,378 $6,425 $ -- $69,133
Cost of revenues.............. 6,118 6,611 4,324 -- 53,096
---------- ---------- ------- ------------ ---------
Gross profit.......... 2,189 767 2,101 -- 16,037
Selling, general and
administrative expenses..... 2,007 640 1,846 (1,178)(A) 11,272
(81)(B)
Amortization of goodwill,
net......................... -- -- -- 712(D) 568
---------- ---------- ------- ------------ ---------
Income from operations.... 182 127 255 547 4,197
Other (income) expense:
Interest expense.......... 17 -- 75 (157)(E) 310
Interest income........... (22) (7) (23) -- (79)
Other, net................ -- (119) 1 -- (196)
---------- ---------- ------- ------------ ---------
Income before provision for
income taxes................ 187 253 202 704 4,162
Provision for income taxes.... 58 101 68 728(F) 1,892
---------- ---------- ------- ------------ ---------
Net income.................... $ 129 $ 152 $ 134 $ (24) $ 2,270
---------- ---------- ------- ------------ ---------
---------- ---------- ------- ------------ ---------
Net income per share,
basic and diluted........... $0.13
-----
-----
Shares used in computing pro
forma basic net income per
share (see Note 5).......... 17,141,917
----------
----------
Shares used in computing pro
forma diluted net income per
share (see Note 5).......... 17,187,238
----------
----------
</TABLE>

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

F-6

<PAGE>

<PAGE>
ENFINITY CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
AIR ENERGY
ENFINITY BRANDT SYSTEMS SYSTEMS NEMSI LEE
-------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Revenues...................... $-- $15,326 $31,048 $15,085 $7,812 $12,806
Cost of revenues.............. -- 12,901 26,355 12,999 5,759 9,416
-------- ------- ------- ------- ------ -------
Gross profit.......... -- 2,425 4,693 2,086 2,053 3,390
Selling, general and
administrative expenses..... -- 1,459 2,629 1,715 1,542 1,888
Employee stock compensation
(non-recurring)............. 800 -- -- 1,816 -- --
Amortization of goodwill,
net......................... -- (159) -- -- 15 --
-------- ------- ------- ------- ------ -------
Income (loss) from
operations.............. (800) 1,125 2,064 (1,445) 496 1,502
Other (income) expense:
Interest expense.......... -- -- 202 53 99 91
Interest income........... -- (51) -- (1) 3 (13)
Other, net................ -- (19) -- -- -- (4)
-------- ------- ------- ------- ------ -------
Income (loss) before provision
for income taxes............ (800) 1,195 1,862 (1,497) 394 1,428
Provision for income taxes.... -- -- 805 (627) 164 579
-------- ------- ------- ------- ------ -------
Net income (loss)............. $ (800) $ 1,195 $1,057 $ (870) $ 230 $ 849
-------- ------- ------- ------- ------ -------
-------- ------- ------- ------- ------ -------
Net income per share, basic
and diluted.................
Shares used in computing pro
forma basic net income per
share (see Note 5)..........
Shares used in computing pro
forma diluted net income per
share (see Note 5)..........

<CAPTION>
PRO FORMA
MECHANICAL ADJUSTMENTS PRO FORMA
HILL YORK SERVICES AIRCOND (SEE NOTE 4) COMBINED
---------- ---------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues...................... $ 9,126 $5,567 $6,880 $-- $103,650
Cost of revenues.............. 7,084 4,928 4,514 -- 83,956
---------- ---------- ------- ------ ---------
Gross profit.......... 2,042 639 2,366 -- 19,694
Selling, general and
administrative expenses..... 1,846 510 1,917 (856)(A) 12,598
(52)(B)
Employee stock compensation
(non-recurring)............. -- -- -- (800)(C) 1,816
Amortization of goodwill,
net......................... -- -- -- 712(D) 568
---------- ---------- ------- ------ ---------
Income (loss) from
operations.............. 196 129 449 996 4,712
Other (income) expense:
Interest expense.......... 15 1 246 (205)(E) 502
Interest income........... (1) (2) (25) -- (90)
Other, net................ (17) (2) (2) -- (44)
---------- ---------- ------- ------ ---------
Income (loss) before provision
for income taxes............ 199 132 230 1,201 4,344
Provision for income taxes.... 68 53 -- 923(F) 1,965
---------- ---------- ------- ------ ---------
Net income (loss)............. $ 131 $ 79 $ 230 $ 278 $ 2,379
---------- ---------- ------- ------ ---------
---------- ---------- ------- ------ ---------
Net income per share, basic
and diluted................. $0.14
-----
-----
Shares used in computing pro
forma basic net income per
share (see Note 5).......... 17,141,917
----------
----------
Shares used in computing pro
forma diluted net income per
share (see Note 5).......... 17,187,238
----------
----------
</TABLE>

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

F-7

<PAGE>

ENFINITY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

NOTE 1 -- GENERAL

Enfinity Corporation ('Enfinity') was founded in 1997 to provide energy and
indoor environmental systems and services to commercial, industrial and
institutional clients.

The historical financial statements reflect the financial position and
results of operations of Enfinity and the Founding Companies and were derived
from the respective Enfinity and Founding Company financial statements where
indicated. The periods included in these financial statements for all of the
individual Founding Companies, with the exception of Air Systems, are as of
March 31, 1998 and for the year ended December 31, 1997 and the three month
periods ended March 31, 1997 and 1998. The periods included in these financial
statements for Air Systems are as of May 31, 1998 and for the year ended
February 28, 1998 and the three month periods ended May 31, 1997 and 1998. The
audited historical financial statements included elsewhere herein have been
included in accordance with Staff Accounting Bulletin No. 80.

NOTE 2 -- ACQUISITION OF FOUNDING COMPANIES

Concurrently with and as a condition to the closing of the Offering,
Enfinity will acquire all of the outstanding capital stock of the Founding
Companies. The Mergers will be accounted for using the purchase method of
accounting with Brandt being treated as the accounting acquiror in accordance
with Staff Accounting Bulletin No. 97 and APB 16. The carrying value of
intangible assets is periodically reviewed by the Company based on the expected
future undiscounted operating cash flows of the related business unit. In the
event the Company determines that the balance of certain intangible assets is
not recoverable, the Company will recognize an impairment loss in an amount
necessary to write down the excess of cost over fair value of net assets
acquired to a fair value as determined from expected future cash flows. The
consideration paid to Brandt of $13.4 million in cash and 1,523,173 shares of
Common Stock (equal to $16.5 million in stock valued at an assumed initial
public offering price of $13.50, less a 20% discount from the assumed offering
price due to restrictions on the transferability of the Common Stock issued to
Founding Company stockholders) has been recorded as a distribution.

The following table sets forth the consideration to be paid in cash, shares
of Common Stock and options to purchase shares of Common Stock to the
stockholders of each of the Founding Companies. For purposes of computing the
estimated purchase price for accounting purposes, the value of shares is based
upon an assumed initial public offering price of $13.50, less a 20% discount
from the assumed offering price due to restrictions on the transferability of
the Common Stock to be acquired by the stockholders of the Founding Companies.
The purchase price has been allocated to the assets and liabilities acquired
based on their respective carrying values, as those are deemed to represent the
fair market value of such assets and liabilities. The allocation of the purchase
price is considered preliminary until such time as the closing of this Offering
and consummation of the Mergers. The Company does not anticipate that the final
allocation of the purchase price will differ significantly from that presented.

<TABLE>
<CAPTION>
SHARES OF VALUE OF VALUE OF TOTAL
FOUNDING COMPANY CASH(1) COMMON STOCK SHARES OPTIONS CONSIDERATION
- ------------------------------------------------- ------- ------------ -------- -------- -------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Air Systems...................................... $18,932 1,402,397 $15,146 $1,103 $ 35,181
Energy Systems................................... 5,638 720,566 7,782 -- 13,420
NEMSI............................................ 8,085 841,275 9,086 -- 17,171
Lee.............................................. 11,664 1,296,275 14,000 -- 25,664
Hill York........................................ 7,122 821,208 8,869 -- 15,991
Mechanical Services.............................. 6,111 678,948 7,333 -- 13,444
Aircond.......................................... 8,641 960,129 10,369 -- 19,010
------- ------------ -------- -------- -------------
$66,193 6,720,798 $72,585 $1,103 $ 139,881
------- ------------ -------- -------- -------------
------- ------------ -------- -------- -------------
</TABLE>

(footnote on next page)

F-8

<PAGE>

ENFINITY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(footnote from previous page)

(1) The number of shares of Common Stock to be issued to the stockholders of the
Founding Companies is fixed. The cash amounts in the table above assume an
initial public offering price per share of $13.50. If the initial public
offering price per share is higher or lower than $13.50, the cash
consideration will vary proportionately. For example, a $1.00 increase over
such $13.50 initial public offering price will result in a $5.9 million
increase (out of the $7.4 million of additional net proceeds) in the
aggregate cash consideration paid to the Founding Company stockholders
(including the stockholders of Brandt). Pursuant to the Merger Agreements,
the aggregate cash consideration paid to such stockholders will in no event
be less than $73.6 million.

NOTE 3 -- UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS

The following table summarizes unaudited pro forma combined balance sheet
adjustments (in thousands):

<TABLE>
<CAPTION>
TOTAL TOTAL
MERGER MERGER OFFERING OFFERING
ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS
-------------------------------- ----------- ----------------- -----------
ASSETS (A) (B) (C) (D) (E) (F)
---- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents........................ $-- $ -- $ -- $ -- $ -- $97,281 $(93,885) $ 3,396
Prepaid expenses and other current assets........ -- -- -- -- -- (841) -- (841)
Deferred taxes................................... 421 -- -- -- 421 -- -- --
---- ------- -------- ------- ----------- ------- -------- -----------
Total current assets......................... 421 -- -- -- 421 96,440 (93,885) 2,555
Goodwill, net.................................... -- -- 113,846 -- 113,846 -- -- --
Other assets..................................... 60 -- -- -- 60 -- -- --
---- ------- -------- ------- ----------- ------- -------- -----------
Total assets................................. $481 $ -- $113,846 $ -- $ 114,327 $96,440 $(93,885) $ 2,555
---- ------- -------- ------- ----------- ------- -------- -----------
---- ------- -------- ------- ----------- ------- -------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt.................................. $-- $ -- $ -- $ (41) $ (41) $ -- $ (1,082) $ (1,082)
Accounts payable and accrued expenses............ -- -- -- (48) (48) -- (174) (174)
Payable to stockholders.......................... -- 7,958 79,578 -- 87,536 -- (87,536) (87,536)
---- ------- -------- ------- ----------- ------- -------- -----------
Total current liabilities.................... -- 7,958 79,578 (89) 87,447 -- (88,792) (88,792)
Long-term debt................................... -- -- -- (482) (482) -- (4,725) (4,725)
Other long-term liabilities...................... -- -- -- (743) (743) (368) (368)
---- ------- -------- ------- ----------- ------- -------- -----------
Total liabilities............................ -- 7,958 79,578 (1,314) 86,222 -- (93,885) (93,885)
---- ------- -------- ------- ----------- ------- -------- -----------
Stockholders' equity:
Common stock................................. -- -- (1,103) -- (1,103) 80 -- 80
Additional paid-in capital................... -- -- 87,796 1,314 89,110 96,360 -- 96,360
Unrealized gain on securities................ -- -- (167) -- (167) -- -- --
Retained earnings............................ 481 (7,958) (53,281) -- (60,758) -- -- --
Treasury stock............................... -- -- 1,023 -- 1,023 -- -- --
---- ------- -------- ------- ----------- ------- -------- -----------
Total stockholders' equity............... 481 (7,958) 34,268 1,314 28,105 96,440 -- 96,440
---- ------- -------- ------- ----------- ------- -------- -----------
Total liabilities and stockholders'
equity................................. $481 $ -- $113,846 $ -- $ 114,327 $96,440 $(93,885) $ 2,555
---- ------- -------- ------- ----------- ------- -------- -----------
---- ------- -------- ------- ----------- ------- -------- -----------
</TABLE>

- ------------

(A) Reflects the deferred tax assets to be established upon the conversion of
Brandt and Aircond from S Corporation status to C Corporation status.

(B) Reflects (i) distributions paid to the stockholders of Brandt, Lee, Hill
York, Mechanical Services and Aircond, including the planned distribution
of $4.0 million of S Corporation earnings at Brandt, Hill York and Aircond
and the planned distribution of $2.6 million of Excess Working Capital at
Lee, Mechanical Services and Aircond and (ii) payment of $1.3 million in
liquidation value of preferred stock to stockholders of Energy Systems.

(C) Reflects (i) the purchase of Air Systems, Energy Systems, NEMSI, Lee, Hill
York, Mechanical Services and Aircond by Brandt, consisting of $66.2
million in cash, 6,720,798 shares of Common Stock valued at $10.80 per
share (or a total of $72.6 million), stock options valued at $1.1 million
and acquisition expenses arising from the issuance of 293,537 of shares
valued at $10.80 per share to consultants in exchange for services provided
(or a total of $3.0 million) for a total estimated purchase price of $142.9
million, resulting in an excess purchase price over the fair value of
assets

(footnotes continued on next page)

F-9

<PAGE>

ENFINITY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(footnotes continued from previous page)

acquired of $116.0 million. A net adjustment of $113.8 million results as
$2.1 million of goodwill already exists in the accounts of one of the
Founding Companies. (The shares have been valued based upon an assumed
initial public offering price of $13.50, less a 20% discount from the
assumed offering price due to restrictions on the transferability of the
Common Stock to be issued to stockholders of the Founding Companies); (ii)
distribution to Brandt stockholders of the consideration paid of $13.4
million in cash and $15.4 million in stock (valued at $10.80 per share);
and (iii) issuance of 514,407 shares of Common Stock to executives as
incentive to join Enfinity and consideration to provide services in
connection with the completion of this Offering. As such services are
effectively internal, i.e., these employees will continue with the combined
company, the value of the shares is recorded as compensation expense of the
combined group upon issuance and completion of this Offering.

(D) Reflects the repayment of certain indebtedness of the Founding Companies by
certain individual stockholders pursuant to the Merger Agreements.

(E) Reflects the cash proceeds from the issuance of 8,000,000 shares of Common
Stock net of estimated expenses of this Offering (based on an estimated
initial public offering price of $13.50 per share). Expenses of this
Offering primarily consist of the underwriting discount, accounting fees,
legal fees and printing expenses. An aggregate of 293,537 of the shares
issued to external consultants who were retained exclusively to assist the
combining companies in the completion of this Offering have been recorded
as offering costs. These shares relate to services provided in capital
raising and consulting with respect to this Offering and are recorded on
that basis in the Unaudited Pro Forma Combined Financial Statements.

(F) Reflects the use of Offering proceeds to pay: (i) the cash portion of the
consideration due to the stockholders of the Founding Companies in
connection with the Mergers; (ii) distributions of $6.7 million paid to the
stockholders of Brandt, Lee, Hill York, Mechanical Services and Aircond;
(iii) payment of $1.3 million in liquidation value of preferred stock to
stockholders of Energy Systems; and (iv) repayment of $6.3 million of
indebtedness of certain of the Founding Companies.

NOTE 4 -- UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS

(A) Reflects a reduction in total compensation derived from contractual
agreements which establish the compensation of certain owners of the
Founding Companies subsequent to this Offering, as follows:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,(2)
DECEMBER 31, ---------------
1997(1) 1997 1998
------------ ------ ----
(IN THOUSANDS)
<S> <C> <C> <C>
Brandt.................................................. $ 353 $ 91 $ 81
Air Systems............................................. 1,407 320 49
Energy Systems.......................................... 283 62 47
NEMSI................................................... 590 95 115
Lee..................................................... 1,026 152 237
Hill York............................................... 968 352 273
Mechanical Services..................................... 312 92 36
Aircond................................................. 1,136 14 18
------------ ------ ----
$6,075 $1,178 $856
------------ ------ ----
------------ ------ ----
</TABLE>

- ------------

(1) Except for Air Systems, which is for the year ended February 28, 1998.

(2) Except for Air Systems which is for the three months ended May 31,
1998.

F-10

<PAGE>

ENFINITY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Pursuant to the terms of employment agreements to be entered into upon
the consummation of the Mergers, certain owners of the Founding Companies
will be eligible for performance-based bonuses to be determined annually in
accordance with a bonus program of the Company for senior executives, which
bonuses shall be contingent upon the achievement of certain corporate or
individual performance goals established by the Compensation Committee. The
Company expects that these bonuses will only be paid if earnings increase
to a level substantially in excess of pro forma combined earnings for the
year ended December 31, 1997 and for the three months ended March 31, 1998.
The bonuses paid historically to the owners of Founding Companies were
awarded based on the owners' discretion and compensation expense has been
reduced accordingly in the pro forma adjustments. The NEMSI adjustment for
the year ended December 31, 1997 and the Energy Systems adjustment for the
three months ended March 31, 1998 do not reflect the elimination of
one-time, non-cash compensation charges of $795,000 and $1.8 million,
respectively, resulting from issuance of stock to employees.

(B) Reflects the elimination of excess profit sharing contributions which are to
be terminated in accordance with the Merger Agreements.

(C) Reflects the reduction in compensation expense related to the non-recurring,
non-cash compensation charge of $800,000 recorded by Enfinity in the first
quarter of 1998 related to Common Stock issued to management of Enfinity.
The issuances of Common Stock were made in contemplation of the Mergers and
this Offering, and no future issuances of this nature are anticipated.

(D) Reflects the amortization of $116.0 million of goodwill to be recorded as a
result of the Mergers over a 40-year estimated life, net of amortization
expense already recorded in the accounts of one of the Founding Companies.

(E) Reflects the net reduction in interest expense associated with long-term
debt to be paid by stockholders and from the proceeds of this Offering, as
follows:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ---------------
1997 1997 1998
------------ ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Air Systems.......................................................... $220 $ 27 $ 69
NEMSI................................................................ 419 102 108
Aircond.............................................................. 110 28 28
------ ---- ----
$749 $157 $205
------ ---- ----
------ ---- ----
</TABLE>

(F) Reflects the incremental provision for federal and state income taxes at a
rate of 40% assuming all entities were subject to federal and state income
tax and relating to the other statements of operations adjustments and for
income taxes on S Corporation income.

NOTE 5 -- NET INCOME PER SHARE

The shares used in computing pro forma basic net income per share include:
(i) 1,101,481 shares issued to consultants to and management of Enfinity; (ii)
8,243,971 shares to be issued to the stockholders of the Founding Companies in
connection with the Mergers; and (iii) 7,796,465 shares representing the number
of shares sold in this Offering necessary to pay the $79.6 million cash portion
of the consideration for the Mergers, repay $6.3 million of indebtedness of the
Founding Companies, pay distributions of $6.7 million to certain Founding
Company stockholders, pay $1.3 million of liquidation value of preferred stock
at Energy Systems and pay the underwriting discount and estimated expenses of
this Offering. In addition, the number of shares used to compute pro forma
diluted net income per share includes 45,321 shares (using the treasury stock
method) related to dilution attributable to options to purchase Common Stock of
the Company at an exercise price below the assumed initial public offering
price. The options will be issued by the Company in exchange for existing
options to purchase shares of common stock of one of the Founding Companies.

F-11

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
ENFINITY CORPORATION:

In our opinion, the accompanying balance sheet and the related statement of
operations and of cash flows present fairly, in all material respects, the
financial position of Enfinity Corporation at December 31, 1997 and the results
of its cash flows for the year then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Philadelphia, Pennsylvania
July 10, 1998

F-12

<PAGE>

ENFINITY CORPORATION
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash................................................................................. $ 20 $ 35
------------ -----------
Total assets............................................................... $ 20 $ 35
------------ -----------
------------ -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to related parties........................................................... $ 18 $ 33
------------ -----------
Total liabilities.......................................................... 18 33
------------ -----------
Stockholders' equity:
Preferred stock, $.01 par value, 500,000 shares authorized, no shares
outstanding....................................................................
Common stock, $.01 par value, 3,000 and 49,000,000 shares authorized, 552,074
and 661,148 shares outstanding.................................................
Additional paid-in capital...................................................... 2 802
Retained deficit................................................................ -- (800)
------------ -----------
Total stockholders' equity................................................. 2 2
------------ -----------
Total liabilities and stockholders' equity................................. $ 20 $ 35
------------ -----------
------------ -----------
</TABLE>

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

F-13

<PAGE>

ENFINITY CORPORATION
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 1998
--------------
(UNAUDITED)
<S> <C>
Total revenues.................................................................................... $--
------
Employee stock compensation....................................................................... 800
------
Total expenses.................................................................................... (800)
------
Loss before income taxes.......................................................................... (800)
Provision for income taxes........................................................................ --
------
Net loss.......................................................................................... $ (800)
------
------
</TABLE>

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

F-14

<PAGE>

ENFINITY CORPORATION
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss...................................................................... $ -- $ (800)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Stock compensation....................................................... -- 800
Changes in operating liability:
Payable to related parties............................................... 18 15
--- ------
Net cash provided by operating activities................................ 18 15
--- ------
Cash flows from financing activities:
Proceeds from issuance of Common Stock........................................ 2 --
--- ------
Net cash provided by financing activities................................ 2 --
--- ------
Net increase in cash............................................................... 20 15
Cash, beginning of period.......................................................... -- 20
--- ------
Cash, end of period................................................................ $ 20 $ 35
--- ------
--- ------
</TABLE>

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

F-15

<PAGE>

ENFINITY CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Enfinity Corporation ('Enfinity' or the 'Company') was founded in 1997 to
provide energy and indoor environmental systems and services to commercial,
industrial and institutional clients. Enfinity intends to acquire eight
companies (the 'Mergers'), upon consummation of an initial public offering (the
'Offering') of its common stock.

Enfinity has not conducted any operations, and all activities to date have
related to the Offering and the Mergers. The Company's cash balances were
generated from the initial capitalization of the Company and advances made by
certain of its shareholders and the Founding Companies. The Company's
compensation expense of $800,000 for the three months ended March 31, 1998
resulted from the issuance of two shares of common stock to an employee.
Enfinity is dependent upon the Offering to execute the pending Mergers. There is
no assurance that the pending Mergers discussed will be completed or that
Enfinity will be able to generate future operating revenues.

In connection with the organization and initial capitalization of Enfinity,
the Company issued 15 shares of common stock at $100.00 per share.

On July 9, 1998, the Board of Directors approved several actions in
connection with the Offering. These actions included a 36,804.93-for-1 stock
split which will occur prior to the effectiveness of the Company's Registration
Statement. All common stock related information included in the financial
statements has been adjusted to reflect this split.

NOTE 2 -- UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information as of March 31, 1998 has been prepared
from the unaudited financial records of Enfinity and in the opinion of
management reflects all adjustments, consisting only of normal recurring items,
necessary for a fair presentation of the financial position and results of
operations and of cash flows for the interim period.

NOTE 3 -- STOCKHOLDERS' EQUITY

1998 LONG-TERM INCENTIVE PLAN

The Company's Board of Directors has adopted and the Company's stockholders
have approved the adoption of the Company's 1998 Long-Term Incentive Plan (the
'Incentive Plan'). The maximum number of shares of Common Stock that may be
subject to outstanding awards may not be greater than that number of shares
equal to thirteen and one-half (13.5%) of the outstanding shares of common stock
minus the number of shares previously issued pursuant to awards granted under
the Incentive Plan. Awards may be settled in cash, shares, other awards or other
property, as determined by the Compensation Committee of the Company's Board of
Directors (the 'Committee'). The Incentive Plan generally will be administered
by the Committee which is empowered to select the individuals who will receive
awards and the terms and conditions of those awards, including exercise prices
for options and other exercisable awards, vesting and forfeiture conditions (if
any), performance conditions, the extent to which awards may be transferable,
and periods during which awards will remain outstanding.

The Company intends to file a registration statement on Form S-8 under the
Securities Act registering the issuance of shares upon exercise of options
granted under the Incentive Plan. The Company expects to grant stock options to
purchase shares of Common Stock to key employees of the Company at the initial
public offering price upon consummation of this Offering.

In addition to authorizing grants of awards to any eligible person in the
discretion of the Committee, the Incentive Plan authorizes automatic grants of
non-qualified stock options to non-employee directors. Under these provisions,
each person serving or who has agreed to serve as a non-employee director at the
commencement of this Offering will be granted an initial option to purchase

F-16

<PAGE>

ENFINITY CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10,000 shares, and thereafter each person who becomes a non-employee director
will be granted an initial option to purchase 10,000 shares upon such person's
initial election as a director. In addition, these provisions authorize the
automatic annual grant to each non-employee director of an option to purchase
5,000 shares at each annual meeting of stockholders following this Offering;
provided, however, that a director will not be granted an annual option if he or
she was granted an initial option during the preceding three months. These
options will have an exercise price equal to the fair market value of Common
Stock on the date of grant (in the case of options granted to individual
non-employee directors, the exercise price will be the initial public offering
price per share), and the options will expire at the earlier of 10 years after
the date of grant or one year after the date the person ceases to serve as a
director of the Company for any reason. These options generally become
exercisable one year after the date of grant.

NOTE 4 -- NEW ACCOUNTING PRONOUNCEMENTS

ACCOUNTING FOR STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards ('SFAS') No. 123, 'Accounting
for Stock-Based Compensation,' allows entities to choose between a new fair
value based method of accounting for employee stock options or similar equity
instruments and the current intrinsic, value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ('APB No. 25').
Entities electing to remain with the accounting in APB No. 25 must make pro
forma disclosures of net income and earnings per share as if the fair value
method of accounting has been applied. The Company will provide pro forma
disclosure of net income and earnings per share, as applicable, in the notes to
future consolidated financial statements.

COMPREHENSIVE INCOME

In June 1997, the FASB issued SFAS No. 130, 'Reporting Comprehensive
Income.' SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. The Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. SFAS No. 130
requires that an enterprise (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of a statement of financial position. The
Statement is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The Company adopted SFAS No. 130 in 1998 and
it had no impact on the Company's financial position or results of operations.

SEGMENT REPORTING

In June 1997, the FASB issued SFAS No. 131, 'Disclosures About Segments of
an Enterprise and Related Information.' SFAS No. 131 establishes standards for
reporting information about operating segments in annual financial statements
and in interim financial reports issued to stockholders. It also establishes
standards for related disclosures about products and services, geographic areas,
and major customers. In general, such information must be reported for
externally in the same manner used for internal management purposes. SFAS No.
131 is effective for financial statements issued for periods beginning after
December 15, 1997. In the initial year of adoption, comparative information for
earlier years must be restated. Since SFAS No. 131 only requires disclosure of
certain information, its adoption will not affect the Company's financial
position or results of operations.

F-17

<PAGE>

ENFINITY CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998, the Financial Accounting Standards Board ('FASB') issued SFAS
No. 133, 'Accounting for Derivative Instruments and Hedging Activities.' SFAS
No. 133 establishes a new model for accounting for derivatives and hedging
activities and supercedes and amends a number of existing standards. SFAS No.
133 is effective for fiscal years beginning after June 15, 1999, but earlier
adoption is permitted. Upon initial application, all derivatives are required to
be recognized in the statement of financial position as either assets or
liabilities and measured at fair value. Recognition of changes in fair value
depends on whether the derivative is designated and qualifies as a hedge, and
the type of hedging relationship that exists. The Company does not currently,
nor does it expect to, hold any derivative instruments or participate in any
hedging activities.

NOTE 5 -- SUBSEQUENT EVENTS (UNAUDITED)

On May 12, 1998 and June 26, 1998, the Company granted 425,333 and 15,000
shares of Common Stock, respectively, to employees. Compensation expense of
approximately $4.6 million and $162,000, respectively, will be recorded in
connection with these issuances in the six months ended June 30, 1998.

Enfinity has signed definitive agreements to acquire all of the outstanding
common stock of eight companies ('Founding Companies') to be consummated
contemporaneously with this Offering. The Founding Companies are Brandt
Mechanical Services, Inc. ('Brandt'), Air Systems, Inc. ('Air Systems'), Energy
Systems Industries, Inc. ('Energy Systems'), New England Mechanical Services,
Inc. ('NEMSI'), Lee Company ('Lee'), Hill York Corporation and Hill York
Services Corporation (collectively, 'Hill York'), Mechanical Services of
Orlando, Inc. ('Mechanical Services') and Aircond Corp. ('Aircond').

The following table sets forth the consideration to be paid in (a) cash,
(b) shares of Common Stock and (c) options to purchase shares of Common Stock to
the stockholders of each of the Founding Companies. For purposes of computing
the estimated purchase price for accounting purposes, the value of shares is
based upon an assumed initial public offering price of $13.50, less a 20%
discount from the assumed offering price due to restrictions on the
transferability of the Common Stock to be acquired by the stockholders of the
Founding Companies. The purchase price has been allocated to the assets and
liabilities acquired based on their respective carrying values, as those are
deemed to represent the fair market value of such assets and liabilities. The
allocation of the purchase price is considered preliminary

F-18

<PAGE>

ENFINITY CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

until such time as the closing of this Offering and consummation of the Mergers.
The Company does not anticipate that the final allocation of the purchase price
will differ significantly from that presented.

<TABLE>
<CAPTION>
VALUE OF VALUE OF TOTAL
FOUNDING COMPANY CASH(1) SHARES OPTIONS CONSIDERATION
- ----------------------------------------------------------------- ------- -------- -------- -------------
<S> <C> <C> <C> <C>
Air Systems...................................................... $18,932 $15,146 $1,103 $ 35,181
Energy Systems................................................... 5,638 7,782 -- 13,420
NEMSI............................................................ 8,085 9,086 -- 17,171
Lee.............................................................. 11,664 14,000 -- 25,664
Hill York........................................................ 7,122 8,869 -- 15,991
Mechanical Services.............................................. 6,111 7,333 -- 13,444
Aircond.......................................................... 8,641 10,369 -- 19,010
------- -------- -------- -------------
$66,193 $72,585 $1,103 $ 139,881
------- -------- -------- -------------
------- -------- -------- -------------
</TABLE>

- ------------

(1) The number of shares of Common Stock to be issued to the stockholders of the
Founding Companies is fixed. The cash amounts in the table above assume an
initial public offering price per share of $13.50. If the initial public
offering price per share is higher or lower than $13.50, the cash
consideration will vary proportionately. For example, a $1.00 increase over
such $13.50 initial public offering price will result in a $5.9 million
increase (out of the $7.4 million of additional net proceeds) in the
aggregate cash consideration paid to the Founding Company stockholders.
Pursuant to the Merger Agreements, the aggregate cash consideration paid to
such stockholders (including the stockholders of Brandt) will in no event be
less than $73.6 million.

F-19

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
BRANDT MECHANICAL SERVICES, INC.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Brandt
Mechanical Services, Inc. ('Brandt') and its subsidiaries at December 31, 1996
and 1997 and March 31, 1998, and the results of their operations and their cash
flows for the period from May 25 to December 31, 1995, for the years ended
December 31, 1996 and 1997, and for the three months ended March 31, 1998 in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of Brandt's management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
July 2, 1998

F-20

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1996 1997 1998
------ ------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............ $3,811 $ 4,120 $ 3,439
Accounts receivable:
Trade............... 3,652 7,937 6,588
Retainage........... 1,893 3,511 2,968
Costs and estimated
earnings in excess of
billings on uncompleted
contracts.............. 423 523 1,121
Inventories.............. -- 49 87
Prepaid expenses and
other current assets... 6 1 213
------ ------- ------------
Total current
assets............ 9,785 16,141 14,416
Property and equipment, net... 83 49 145
Other assets.................. 41 154 82
------ ------- ------------
Total assets........ $9,909 $16,344 $ 14,643
------ ------- ------------
------ ------- ------------

LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term debt.......... $ 86 $ -- $ --
Accounts payable and
accrued expenses....... 4,849 4,854 4,482
Billings in excess of
costs and estimated
earnings on uncompleted
contracts.............. 1,351 5,421 3,056
------ ------- ------------
Total current
liabilities....... 6,286 10,275 7,538
Long-term debt, net of current
portion..................... 121 -- --
Negative goodwill............. 2,157 1,521 1,362
------ ------- ------------
Total liabilities... 8,564 11,796 8,900
------ ------- ------------
Commitments and contingencies
Stockholders' equity:
Common stock, Class A
voting, $0.01 par
value, 20,000 shares
authorized, 800 and 738
shares issued and
outstanding,
respectively; Class B
nonvoting, $0.01 par
value, 20,000 shares
authorized, 200 and 262
shares issued and
outstanding,
respectively........... 1 1 1
Retained earnings........ 1,344 4,547 5,742
------ ------- ------------
Total stockholders'
equity............ 1,345 4,548 5,743
------ ------- ------------
Total liabilities
and stockholders'
equity............ $9,909 $16,344 $ 14,643
------ ------- ------------
------ ------- ------------
</TABLE>

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

F-21

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
FOR THE PERIOD DECEMBER 31, MARCH 31,
FROM MAY 25 TO ------------------ ----------------------
DECEMBER 31, 1995 1996 1997 1997 1998
----------------- ------- ------- ----------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues....................................... $15,869 $38,723 $50,435 $ 7,547 $15,326
Cost of revenues............................... 13,170 31,932 42,032 5,875 12,901
----------------- ------- ------- ----------- -------
Gross profit.............................. 2,699 6,791 8,403 1,672 2,425
Selling, general and administrative expenses... 2,562 6,764 5,287 1,191 1,459
Accretion of negative goodwill................. (371) (636) (636) (159) (159)
----------------- ------- ------- ----------- -------
Income from operations.................... 508 663 3,752 640 1,125
Other (income) expense:
Interest income, net...................... (66) (135) (164) (12) (51)
Other income, net......................... (11) (26) -- 2 (19)
----------------- ------- ------- ----------- -------
Income before provision for income taxes....... 585 824 3,916 650 1,195
Provision for income taxes..................... 24 41 -- -- --
----------------- ------- ------- ----------- -------
Net income..................................... $ 561 $ 783 $ 3,916 $ 650 $ 1,195
----------------- ------- ------- ----------- -------
----------------- ------- ------- ----------- -------

Unaudited pro forma information:
Pro forma net income before provision for
income taxes............................ $ 3,916 $ 650 $ 1,195
Provision for income taxes................ 1,312 196 414
------- ----------- -------
Pro forma net income (see Note 2).............. $ 2,604 $ 454 $ 781
------- ----------- -------
------- ----------- -------
</TABLE>

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

F-22

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON TOTAL
STOCK COMMON RETAINED STOCKHOLDERS'
SHARES STOCK EARNINGS EQUITY
------ ------ -------- -------------
<S> <C> <C> <C> <C>
Balance, May 25, 1995............................................. 1,000 $ 1 $-- $ 1
Net income................................................... -- -- 561 561
------ ------ -------- -------------
Balance, December 31, 1995........................................ 1,000 1 561 562
Net income................................................... -- -- 783 783
------ ------ -------- -------------
Balance, December 31, 1996........................................ 1,000 1 1,344 1,345
Distribution to stockholders................................. -- -- (713) (713)
Net income................................................... -- -- 3,916 3,916
------ ------ -------- -------------
Balance, December 31, 1997........................................ 1,000 1 4,547 4,548
Net income................................................... -- -- 1,195 1,195
------ ------ -------- -------------
Balance, March 31, 1998........................................... 1,000 $ 1 $5,742 $ 5,743
------ ------ -------- -------------
------ ------ -------- -------------
</TABLE>

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

F-23

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
FOR THE PERIOD DECEMBER 31, MARCH 31,
FROM MAY 25 TO ---------------- ----------------------------------------
DECEMBER 31, 1995 1996 1997 1997 1998
----------------- ------ ------ ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income............... $ 561 $ 783 $3,916 $ 669 $ 1,195
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation
expense........... -- 14 18 6 4
Accretion of
negative
goodwill.......... (371) (636) (636) (159) (159)
Gain on sale of
property and
equipment......... (11) (26) -- -- --
Changes in operating
assets and liabilities:
Accounts
receivable........ (899) 157 (5,903) (509) 1,892
Inventories......... 7 -- (49) -- (38)
Costs and estimated
earnings in excess
of billings on
uncompleted
contracts......... 52 (357) (100) 134 (598)
Prepaid expenses and
other assets...... (2) (43) (108) (75) (140)
Accounts payable and
accrued
expenses.......... 1,038 1,950 5 (2,492) (372)
Billings in excess
of costs and
estimated earnings
on uncompleted
contracts......... 314 474 4,070 (119) (2,365)
------- ------ ------ -------- --------
Net cash
provided by
(used in)
operating
activities... 689 2,316 1,213 (2,545) (581)
------- ------ ------ -------- --------
Cash flows from investing
activities:
Proceeds from sale of
property and
equipment.............. 11 26 16 16 --
Additions of property and
equipment.............. -- (97) -- -- (100)
------- ------ ------ -------- --------
Net cash
provided by
(used in)
investing
activities... 11 (71) 16 16 (100)
------- ------ ------ -------- --------
Cash flows from financing
activities:
Payments of long-term
debt................... -- (43) (207) (21) --
Distributions to
stockholders........... -- -- (713) -- --
------- ------ ------ -------- --------
Net cash used
in financing
activities... -- (43) (920) (21) --
------- ------ ------ -------- --------
Net increase (decrease) in
cash and cash equivalents... 700 2,202 309 (2,550) (681)
Cash and cash equivalents,
beginning of period......... 909 1,609 3,811 3,811 4,120
------- ------ ------ -------- --------
Cash and cash equivalents, end
of period................... $ 1,609 $3,811 $4,120 $ 1,261 $ 3,439
------- ------ ------ -------- --------
------- ------ ------ -------- --------
Supplemental disclosure of
cash flow information:
Cash paid for interest... $ 11 $ 20 $ 13 $ 4 $--
Cash paid for income
taxes.................. $ 41 $ 65 -- $-- $--
</TABLE>

The accompanying notes are an integral part of these financial statements

F-24

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Brandt Mechanical Services, Inc., ('Brandt'), founded in 1952, focuses on
performing large design and build construction projects and turnkey industrial
and special projects. Brandt primarily operates in Texas.

Brandt and its stockholders intend to enter into a definitive agreement
with Enfinity Corporation ('Enfinity'), pursuant to which all outstanding shares
of Brandt's common stock will be exchanged for cash and shares of Enfinity
common stock concurrently with the consummation of the initial public offering
(the 'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

These consolidated financial statements represent the financial position,
results of operations and cash flows of Brandt Mechanical Services, Inc. and its
wholly-owned subsidiaries, M&Z Brandt Engineering Co., Inc., Brandt Service
Company, Metalair Industries, Inc. and Brandt Engineering Company of Arkansas
(collectively, the 'subsidiaries'). All intercompany transactions and balances
have been eliminated.

CASH AND CASH EQUIVALENTS

Brandt considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market based upon
specifically identified cost.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the following useful lives: vehicles, 5
years; and leasehold improvements, 40 years.

Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments, which extend the
useful lives of existing equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is recognized in the statement of operations.

NEGATIVE GOODWILL

Effective May 25, 1995, through a series of transactions, all of the issued
and outstanding common stock of the subsidiaries was purchased by Brandt from
its former parent, which was a subsidiary of a company that had emerged from
bankruptcy in December 1994. The excess of the fair value of the assets acquired
over the acquisition cost was allocated to reduce all noncurrent assets. The
remaining excess ('negative goodwill') is being amortized using the straight
line method over a period of five years, which represents the estimated period
of benefit.

REVENUE RECOGNITION

Brandt recognizes revenue when services are performed except when work is
being performed under a construction contract. Revenues from construction
contracts are recognized on the percentage-

F-25

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of completion method measured by the percentage of costs incurred to total
estimated costs for each contract. Provisions for the total estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, estimated profitability
and final contract settlements may result in revisions to costs and income and
their effects are recognized in the period in which the revisions are
determined.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts will be due upon completion of the
contracts and acceptance by the customer. Based on Brandt's experience with
similar contracts in recent years, the retainage balance will be collected
within a year of the balance sheet date.

WARRANTY COSTS

Brandt warrants parts and labor for mechanical construction projects based
on contractual terms, generally for one year. A reserve for warranty costs is
recorded as part of the cost to complete each individual job.

INCOME TAXES

As of January 1, 1997, Brandt has elected S Corporation status as defined
by the Internal Revenue Code, whereby Brandt is not subject to taxation for
federal purposes. Under S Corporation status, the stockholders report their
share of Brandt's taxable earnings or losses in their personal tax returns.
Brandt will terminate its S Corporation status concurrently with the effective
date of the Offering.

For the periods prior to January 1, 1997, Brandt provided for deferred
taxes in accordance with Statement of Financial Accounting Standards No. 109,
'Accounting for Income Taxes' ('SFAS 109'). SFAS 109 requires an asset and
liability approach for financial accounting and reporting for income taxes based
on the difference between the financial statement and tax bases of assets and
liabilities.

The unaudited pro forma income tax information included in the Statement of
Operations is presented in accordance with SFAS 109 as if Brandt had been
subject to federal and state income taxes for the entire periods presented.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject Brandt to concentrations of
credit risk consist principally of trade accounts receivable. Brandt follows the
practice of filing statutory liens on construction projects where collection
problems are anticipated. The liens serve as collateral for trade receivables.
Brandt does not believe that it is subject to any unusual credit risk beyond the
normal credit risk attendant in its business.

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, Brandt adopted Statement of Financial Accounting
Standards No. 121, 'Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of.' Accordingly, in the event that facts and
circumstances indicate that property and equipment or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is

F-26

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

required, the estimated future undiscounted cash flows associated with the asset
are compared to the asset's carrying amount to determine if a write-down to
market value is necessary. Adoption of this standard did not have a material
effect on the financial position or results of operations of Brandt.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month period ended March
31, 1997 has been prepared from the unaudited financial records of Brandt and in
the opinion of management reflects all adjustments, consisting only of normal
recurring items, necessary for a fair presentation of the financial position and
results of operations and of cash flows for the interim period.

NOTE 3 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES -------------- MARCH 31,
IN YEARS 1996 1997 1998
------------ ----- ----- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Transportation equipment................. 5 years $ 97 $ 77 $ 88
Leasehold improvements................... 40 years -- -- 82
Less -- Accumulated depreciation......... (14) (28) (25)
----- -----
Property and equipment, net.............. $ 83 $ 49 $ 145
----- -----
----- -----
</TABLE>

Depreciation expense was approximately $14,000 and $18,000 for the years
ended 1996 and 1997, respectively and $4,000 for the three months ended March
31, 1998. There was no depreciation expense during the period ended December 31,
1995.

F-27

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Installation contracts in progress are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- MARCH 31,
1996 1997 1998
-------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Costs incurred on contracts in progress......... $ 24,192 $ 35,508 $45,405
Estimated earnings, net of losses............... 2,449 3,622 4,802
-------- --------- ---------
26,641 39,130 50,267
Less -- Billings to date........................ (27,569) (44,028) 52,202
-------- --------- ---------
$ (928) $ (4,898) $(1,935)
-------- --------- ---------
-------- --------- ---------
Costs and estimated earnings in excess of
billings on uncompleted contracts............. $ 423 $ 523 $ 1,121
Billings in excess of costs and estimated
earnings on uncompleted contracts............. (1,351) (5,421) (3,056)
-------- --------- ---------
$ (928) $ (4,898) $ 1,935
-------- --------- ---------
-------- --------- ---------
</TABLE>

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- MARCH 31,
1996 1997 1998
------ ------ ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Accounts payable, trade.............................. $2,159 $3,732 $ 3,404
Accrued compensation, benefits and other............. 2,690 1,122 1,078
------ ------ ---------
Total........................................... $4,849 $4,854 $ 4,482
------ ------ ---------
------ ------ ---------
</TABLE>

NOTE 5 -- LONG-TERM DEBT

Debt at December 31, 1996 consisted of a subordinated note payable to the
prior stockholder. The debt was secured by the stock of Brandt's subsidiaries.
The balance of the note was payable in quarterly installments of approximately
$21,000 of principal plus interest at the prime lending rate. The note was paid
in full during the year ended December 31, 1997.

Brandt has a $1,500,000 line of credit with a bank. The line of credit
expires June 1, 1998, bears interest at one percent above the bank's base
lending rate and has a commitment fee of 0.25% per annum. The line of credit is
secured by substantially all of the assets of Brandt and by the guarantees of
certain stockholders. Brandt has restrictive and various financial covenants
with which Brandt was in compliance at December 31, 1997 and March 31, 1998.
There was no balance outstanding under this line of credit at December 31, 1996
or 1997 or at March 31, 1998.

NOTE 6 -- INCOME TAXES

As of January 1, 1997, Brandt elected S Corporation status as defined by
the Internal Revenue Code, whereby Brandt is not subject to taxation for federal
purposes. Under S Corporation status, the stockholders report their share of
Brandt's taxable earnings or losses in their personal tax returns. There were no
deferred tax balances to eliminate at the date Brandt ceased to be a taxable
enterprise.

Income tax expense related to the periods before Brandt's S Corporation
election is comprised of the following:

F-28

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
MAY 25 TO YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1996
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Current............................................... $ 24 $ 41
Deferred.............................................. -- --
--- ---
Total provision for income taxes................. $ 24 $ 41
--- ---
--- ---
</TABLE>

The provision for income taxes varied from the statutory federal income tax
rate as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
MAY 25 TO ------------------------------------- THREE MONTHS ENDED
DECEMBER 31, 1995 1996 1997 MARCH 31, 1998
----------------- -------------- ----------------- --------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income tax at the U.S.
Federal statutory rate.... $ 199 34.0% $ 280 34.0% $ 1,331 34.0% $406 34.8%
Accretion of negative
goodwill.................. (126) (21.5) (216) (26.2) (216) (5.5) (54) (4.5)
Earnings of S Corporation... -- -- -- -- (1,115) (28.5) (352) (29.5)
Other....................... (49) (8.4) (23) (2.8) -- -- -- --
-------- -------- ----- ----- ------- ------ -------- --------
Effective tax rate..... $ 24 4.1% $ 41 5.0% $ -- -- % $-- -- %
-------- -------- ----- ----- ------- ------ -------- --------
-------- -------- ----- ----- ------- ------ -------- --------
</TABLE>

Temporary differences between the consolidated financial statement carrying
amounts and the consolidated tax basis of assets and liabilities that gave rise
to significant portions of the consolidated deferred tax amounts related to the
following:

<TABLE>
<CAPTION>
DECEMBER 31,
1996
--------------
(IN THOUSANDS)
<S> <C>
Net operating loss carryforwards................................... $ 233
Property, plant and equipment...................................... 17
-------
Deferred tax asset before valuation allowance...................... 250
Less -- Valuation allowance........................................ (250)
-------
Net deferred tax asset............................................. $--
-------
-------
</TABLE>

NOTE 7 -- LEASE COMMITMENTS

Brandt leases its primary office space from a partnership which is owned by
Brandt's stockholders. The lease expires on August 27, 2001. The rent paid under
this related-party lease is approximately $14,000 per month. Brandt leases two
other facilities from third parties. These leases, which expire on December 31,
1997 and June 30, 1999, have monthly rentals of approximately $1,000 and $4,000,
respectively.

Brandt also leases various equipment under non-cancelable operating leases
which expire from September 1997 to November 2001. Various of these equipment is
leased from a partnership which is owned by Brandt's stockholders. These leases
are for terms of 3 to 5 years.

F-29

<PAGE>

BRANDT MECHANICAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Future minimum lease payments under these non-cancelable operating leases
are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- -------------------------------------------------------------------------------------
<S> <C>
1998............................................................................ $ 369
1999............................................................................ 235
2000............................................................................ 74
2001............................................................................ 8
Thereafter...................................................................... --
-------
Total minimum lease payments............................................... $ 686
-------
-------
</TABLE>

NOTE 8 -- RELATED-PARTY TRANSACTIONS
As noted above, Brandt leases its primary office and warehouse facility and
various equipment from a partnership which is owned by Brandt's stockholders.

NOTE 9 -- EMPLOYEE BENEFIT PLAN

Brandt has a defined contribution profit sharing plan. The plan provides
for Brandt to match one-half of the first 6 percent contributed by each
employee. Total contributions by Brandt under the plan were approximately
$41,000, $180,000 and $204,000 for the periods ending December 31, 1995, 1996
and 1997 and $40,370 for the three months ended March 31, 1998, respectively.
Brandt may also make discretionary contributions. No discretionary contributions
were made for the periods ending December 31, 1995, 1996, 1997 or March 31,
1998.

NOTE 10 -- FINANCIAL INSTRUMENTS
Brandt's financial instruments consist of cash and cash equivalents, trade
accounts receivable, a line of credit and a note payable. Brandt believes that
the carrying value of these instruments on the accompanying balance sheet
approximates their fair value.

NOTE 11 -- STOCKHOLDERS' EQUITY
As of December 31, 1997, Brandt had declared and paid distributions of
$713,000 to its stockholders, representing a partial distribution of Brandt's S
Corporation accumulated adjustment account related to the year ended December
31, 1997.

NOTE 12 -- STOCK OPTIONS

Effective November 1997, the Company's stockholders entered into option
agreements with certain employees allowing for the purchase of a total of 60
shares of the Company's Class B common stock from the stockholders. These
options vest upon the execution of a binding, definitive agreement pursuant to
which the Company is a part of a 'combining transaction,' as defined in the
agreements. Unvested options expire on August 15, 1998. Vested options expire
five years after the date of grant. The exercise price per share of $5,589 is
estimated to be the fair market value of the stock at the date of grant. On May
14, 1998, the options vested, giving rise to a compensation expense of $1.4
million to be recorded in the quarter ending June 30, 1998.

NOTE 13 -- SUBSEQUENT EVENT (UNAUDITED)
Brandt and its stockholders have entered into a definitive agreement with
Enfinity pursuant to which Brandt will merge with a wholly owned subsidiary of
Enfinity. All outstanding shares of Brandt will be exchanged for cash and common
stock of Enfinity concurrently with the consummation of the initial public
offering of the common stock of Enfinity.

The Company will make cash distributions prior to the merger to clear the
Company's estimated S Corporation accumulated adjustment account. Had the
distributions been recorded at March 31, 1998, the effect on the accompanying
balance sheet would be an increase in liabilities of $3,603,000 and a decrease
in stockholders' equity of $3,603,000.

F-30

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders
AIR SYSTEMS, INC.

We have audited the accompanying balance sheet of Air Systems, Inc. ('Air
Systems') as of February 28, 1997 and 1998 and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended. These financial statements are the responsibility of Air
Systems' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Air Systems as of February
28, 1997 and 1998 and the results of its operations and its cash flows for each
of the three years in the period ended in conformity with generally accepted
accounting principles.

SHILLING AND KENYON, INC.
San Jose, California
April 27, 1998

F-31

<PAGE>

AIR SYSTEMS, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
FEBRUARY 28,
------------------ MAY 31,
1997 1998 1998
------- ------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Accounts receivable:
Trade, net of allowance of $280 in 1997 and $250 in 1998,
respectively....................................................... $12,401 $28,096 $ 23,184
Retainage............................................................. 2,017 4,790 5,487
Costs and estimated earnings in excess of billings on uncompleted
contracts............................................................. 1,528 3,124 5,511
Inventories............................................................. 402 874 872
Prepaid expenses and other current assets............................... 243 394 549
Deferred income taxes................................................... 354 390 390
------- ------- ------------
Total current assets............................................... 16,945 37,668 35,993
Property and equipment, net.................................................. 1,788 4,541 4,771
Other assets................................................................. 205 195 189
------- ------- ------------
Total assets....................................................... $18,938 $42,404 $ 40,953
------- ------- ------------
------- ------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit.......................................................... $ 1,950 $ 7,365 $ 7,124
Current portion of long-term debt....................................... 178 622 610
Current portion of obligations under capital lease...................... 142 100 74
Accounts payable........................................................ 4,293 10,811 8,637
Accrued expenses........................................................ 3,369 4,450 2,798
Billings in excess of costs and estimated earnings on uncompleted
contracts............................................................. 3,446 10,420 11,374
Income taxes payable.................................................... 665 154 924
------- ------- ------------
Total current liabilities.......................................... 14,043 33,922 31,541
Long-term debt, net of current portion....................................... 625 2,029 1,909
Obligations under capital lease, net of current portion...................... 105 32 25
Deferred income taxes........................................................ 281 331 331
------- ------- ------------
Total liabilities.................................................. 15,054 36,314 33,806
------- ------- ------------
Commitments.................................................................. -- -- --
Stockholders' equity:
Common stock, no par value; 10,000,000 shares authorized and 1,175,000
shares issued and outstanding in 1997 and 1998........................ 31 31 31
Retained earnings....................................................... 3,853 6,059 7,116
------- ------- ------------
Total stockholders' equity......................................... 3,884 6,090 7,147
------- ------- ------------
Total liabilities and stockholders' equity......................... $18,938 $42,404 $ 40,953
------- ------- ------------
------- ------- ------------
</TABLE>

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

F-32

<PAGE>

AIR SYSTEMS, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
-------------------------------------------- MAY 31,
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, ------------------
1996 1997 1998 1997 1998
------------ ------------ ------------ ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues......................................... $ 37,463 $ 55,528 $ 90,969 $13,180 $31,048
Cost of revenues................................. 29,527 44,098 75,149 9,651 26,355
------------ ------------ ------------ ------- -------
Gross profit................................ 7,936 11,430 15,820 3,529 4,693
Selling, general and administrative expenses..... 6,449 8,232 11,370 2,492 2,629
------------ ------------ ------------ ------- -------
Income from operations...................... 1,487 3,198 4,450 1,037 2,064
Other (income) expense:
Interest expense, net....................... 190 228 636 76 202
Gain on sale of property and equipment...... (24) (14) -- -- --
------------ ------------ ------------ ------- -------
Income before provision for income taxes......... 1,321 2,984 3,814 961 1,862
Provision for income taxes....................... 519 1,196 1,608 404 805
------------ ------------ ------------ ------- -------
Net income....................................... $ 802 $ 1,788 $ 2,206 $ 557 $ 1,057
------------ ------------ ------------ ------- -------
------------ ------------ ------------ ------- -------
</TABLE>

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

F-33

<PAGE>

AIR SYSTEMS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON TOTAL
STOCK COMMON RETAINED STOCKHOLDERS'
SHARES STOCK EARNINGS EQUITY
--------- ------ -------- -------------
<S> <C> <C> <C> <C>
Balance, March 1, 1995.......................................... 1,234,000 $ 60 $1,263 $ 1,323
Repurchase of common stock................................. (59,000) (29) -- (29)
Net income................................................. -- -- 802 802
--------- ------ -------- -------------
Balance, February 29, 1996...................................... 1,175,000 31 2,065 2,096
Net income................................................. -- -- 1,788 1,788
--------- ------ -------- -------------
Balance, February 28, 1997...................................... 1,175,000 31 3,853 3,884
Net income................................................. -- -- 2,206 2,206
--------- ------ -------- -------------
Balance, February 28, 1998...................................... 1,175,000 31 6,059 6,090
Net income (unaudited)..................................... -- -- 1,057 1,057
--------- ------ -------- -------------
Balance, May 31, 1998 (unaudited)............................... 1,175,000 $ 31 $7,116 $ 7,147
--------- ------ -------- -------------
--------- ------ -------- -------------
</TABLE>

F-34

<PAGE>

AIR SYSTEMS, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
-------------------------------------------- MAY 31,
FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, ------------------
1996 1997 1998 1997 1998
------------ ------------ ------------ ------- -------
UNAUDITED
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income................................... $ 802 $ 1,788 $ 2,206 $ 557 $ 1,057
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation and amortization........... 214 369 822 135 263
Gain on sale of property and
equipment............................. (24) (14) -- -- --
Deferred income taxes................... 3 (4) 14 (229) --
Changes in operating assets and liabilities:
Accounts receivable.......................... (3,380) (4,161) (15,695) 504 4,912
Retainage.................................... (503) (1,062) (2,773) 130 (697)
Costs and estimated earnings in excess of
billings on uncompleted contracts.......... (569) (530) (1,596) 367 (2,387)
Inventories.................................. (38) (27) (472) (113) 2
Prepaid expenses and other current assets.... (94) (73) (151) 60 (155)
Accounts payable............................. 1,135 530 4,906 1,748 (264)
Accrued expenses............................. 1,382 933 1,081 (1,543) (1,652)
Billings in excess of costs and estimated
earnings on uncompleted contracts.......... (96) 1,988 6,974 (493) 954
Income taxes payable......................... (121) 535 (511) (113) 770
------------ ------------ ------------ ------- -------
Net cash provided by (used for)
operating activities.................. (1,289) 272 (5,195) 1,010 2,803
Cash flows from investing activities:
Proceeds from sale of property and
equipment.................................. 32 4 -- -- --
Receipts of notes receivable................. 23 6 -- -- --
Other assets................................. (43) 22 10 (21) 6
Additions of property and equipment.......... (590) (1,146) (3,550) (1,034) (493)
------------ ------------ ------------ ------- -------
Net cash used for investing
activities............................ (578) (1,114) (3,540) (1,055) (487)
Cash flows from financing activities:
Cash overdraft............................... 626 185 1,612 (887) (1,910)
Borrowings from line of credit............... 1,350 300 5,415 1,030 (241)
Borrowings of long-term debt................. 207 630 2,259 548 --
Payments on long-term debt................... (221) (121) (411) (29) (131)
Payments on capital leases................... (66) (152) (140) (38) (34)
Repurchase of common stock................... (29) -- -- -- --
------------ ------------ ------------ ------- -------
Net cash provided by (used for)
financing activities.................. 1,867 842 8,735 624 (2,316)
Net increase (decrease) in cash................... -- -- -- 579 --
Cash, beginning and end of period................. $ -- $ -- $ -- $ 579 $ --
------------ ------------ ------------ ------- -------
------------ ------------ ------------ ------- -------
Supplemental disclosure of cash flow information:
Cash paid for interest....................... $ 192 $ 238 $ 640 $ 76 $ 202
Cash paid for income taxes................... $ 637 $ 665 $ 2,105 $ 746 $ 35
Additions under capital lease................ $ 61 $ -- $ 25 $ -- $ --
</TABLE>

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

F-35

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Air Systems, Inc. ('Air Systems'), founded in 1974, specializes in the
design, engineering and installation of energy and indoor environmental systems
for commercial entities in northern California and performs additional services
in plumbing, process piping and sheet metal construction.

Air Systems and its stockholders intend to enter into a definitive
agreement with Enfinity Corporation ('Enfinity'), pursuant to which all
outstanding shares of Air Systems' common stock will be exchanged for cash and
shares of Enfinity common stock concurrently with the consummation of the
initial public offering (the 'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH

Air Systems considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market based upon
specifically identified cost.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements and equipment under capital leases are capitalized and
amortized over the lesser of the life of the lease or the estimated useful life
of the asset.

REVENUE RECOGNITION

Air Systems recognizes revenue when services are performed except when the
work is being performed under a construction contract. Revenues from
construction contracts are recognized on the percentage-of completion method
measured by the percentage of costs incurred to total estimated costs for each
contract. Provisions for the total estimated losses on uncompleted contracts are
made in the period in which such losses are determined. Changes in job
performance, job conditions, estimated profitability and final contract
settlements may result in revisions to costs and income and their effects are
recognized in the period in which the revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts will be due upon completion of the
contracts and acceptance by the customer. Based on Air Systems' experience with
similar contracts in recent years, the retainage balance will be collected in
the fiscal year ending February 28, 1999.

WARRANTY COSTS

Air Systems warrants labor for the first year after installation on new air
conditioning and heating systems. Air Systems generally warrants labor for 30
days after servicing of existing air conditioning and heating systems. A reserve
for warranty costs is recorded as part of the cost to complete each individual
job.

F-36

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Air Systems accounts for certain income and expense items differently for
financial reporting and income tax purposes in accordance with Statement of
Financial Accounting Standards No. 109, 'Accounting for Income Taxes' ('SFAS
109'). Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities applying enacted statutory tax rates in effect for the year in which
the differences are expected to reverse.

USE OF ESTIMATES

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month periods ended May 31,
1997 and 1998 has been prepared from the unaudited financial records of Air
Systems and in the opinion of management reflects all adjustments, consisting
only of normal recurring items, necessary for a fair presentation of the
financial position and results of operations and of cash flows for the interim
periods.

NOTE 3 -- NEW ACCOUNTING PRONOUNCEMENTS

Air Systems adopted Statement of Financial Accounting Standards No. 121,
'Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of.' Accordingly, in the event that facts and circumstances indicate
that property and equipment or other assets may be impaired, an evaluation of
recoverability would be performed. If an evaluation is required, the estimated
future undiscounted cash flows associated with the asset are compared to the
asset's carrying amount to determine if a write-down to market value is
necessary. Adoption of this standard did not have a material effect on the
financial position or results of Air Systems.

ACCOUNTING FOR STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards ('SFAS') No. 123, 'Accounting
for Stock-Based Compensation,' allows entities to chose between a new fair value
based method of accounting for employee stock options or similar equity
instruments and the current intrinsic, value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ('APB No. 25').
Entities electing to remain with the Accounting in APB Opinion No. 25 must make
pro forma disclosures of net income and earnings per share as if the fair value
method of accounting has been applied. Air Systems will provide pro forma
disclosure of net income and earnings per share, as applicable, in the notes to
future financial statements.

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

F-37

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- RECEIVABLES

Receivables at February 28, 1997 and 1998 consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28,
------------------
1997 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
Accounts receivable............................................................. $12,470 $27,770
Related party receivables....................................................... 115 520
Other receivables............................................................... 96 56
Less -- Allowance for doubtful accounts......................................... (280) (250)
------- -------
Accounts receivable, net................................................... $12,401 $28,096
------- -------
------- -------
</TABLE>

NOTE 5 -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts activity is as follows (in thousands):

<TABLE>
<CAPTION>
FEBRUARY 28,
FEBRUARY 29, ------------------
1996 1997 1998
------------ ------- -------
<S> <C> <C> <C>
Balance, beginning of year........................................ $ 165 $ 285 $ 280
Charges to costs and expenses................................ 161 18 (9)
Write-offs................................................... (41) (23) (21)
------------ ------- -------
Balance, end of year.............................................. $ 285 $ 280 $ 250
------------ ------- -------
------------ ------- -------
</TABLE>

NOTE 6 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL FEBRUARY 28,
LIVES ------------------
IN YEARS 1997 1998
--------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Shop equipment...................................................... 5 years $ 662 $ 1,550
Furniture and office equipment...................................... 3-7 years 790 1,491
Transportation equipment............................................ 3-5 years 2,208 3,485
Leasehold improvements.............................................. 3-5 years 266 969
------- -------
Total property and equipment................................... 3,926 7,495
Less -- Accumulated depreciation and amortization................... (2,138) (2,954)
------- -------
Property and equipment, net.................................... $ 1,788 $ 4,541
------- -------
------- -------
</TABLE>

Depreciation and amortization expense was approximately $214,000, $369,000,
and $822,000 for the years ended February 29, 1996 and February 28, 1997 and
1998, respectively.

NOTE 7 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts payable consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28,
-----------------
1997 1998
------ -------
(IN THOUSANDS)
<S> <C> <C>
Cash overdraft....................................................... $ 887 $ 2,499
Accounts payable..................................................... 3,406 8,312
------ -------
Total........................................................... $4,293 $10,811
------ -------
------ -------
</TABLE>

F-38

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
FEBRUARY 28,
----------------
1997 1998
------ ------
(IN THOUSANDS)
<S> <C> <C>
Accrued compensation, benefits and other........................................... $2,102 $3,502
Other accrued expenses............................................................. 1,267 948
------ ------
Total......................................................................... $3,369 $4,450
------ ------
------ ------
</TABLE>

Contracts in progress are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
--------------------
1997 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in progress....................................... $ 28,420 $ 54,725
Estimated earnings, net of losses............................................. 6,367 11,484
-------- --------
34,787 66,209
Less -- Billings to date...................................................... (36,705) (73,505)
-------- --------
$ (1,918) $ (7,296)
-------- --------
-------- --------
Costs and estimated earnings in excess of billings on uncompleted contracts... $ 1,528 $ 3,124
Billings in excess of costs and estimated earnings on uncompleted contracts... (3,446) (10,420)
-------- --------
$ (1,918) $ (7,296)
-------- --------
-------- --------
</TABLE>

NOTE 8 -- LINE OF CREDIT

Air Systems has a $10,000,000 line of credit with a bank. The line of
credit expires August 5, 1998 and bears interest at 0.75 percent above the
bank's base lending rate. The line of credit is secured by substantially all of
the assets of Air Systems and guaranteed by the majority stockholder.

Additionally, Air Systems has a $1,000,000 bank line of credit for the
purchase of property and equipment with a bank. The equipment line of credit
expires August 5, 1998 and bears interest at 1.25 percent above the bank's base
lending rate. On August 5, 1998 Air Systems has the option to convert the
outstanding balance under the line of credit to a term loan. There was no
outstanding balance on the line for the year ended February 28, 1998.

These loans have restrictive and various financial covenants with which Air
Systems was in compliance at February 28, 1998.

F-39

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- LONG-TERM DEBT

A summary of long-term debt follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
----------------
1997 1998
------ ------
(IN THOUSANDS)
<S> <C> <C>
Commercial term loans, payable in monthly principal and interest installments
aggregating $44,278 with interest at 9.75%, maturing December, 2002, secured by
transportation equipment......................................................... $ 742 $1,803
Commercial term loan, payable in monthly principal installments of $8,563 with
interest at the bank's prime rate plus 1.25%, maturing August, 2001,
collateralized by various equipment of Air Systems............................... -- 360
Various notes payable, collateralized by transportation equipment, interest rates
ranging from 8.75% to 9.25%, payable in various installments through June,
2002............................................................................. 61 488
------ ------
803 2,651
Less -- Current portion............................................................ (178) (622)
------ ------
$ 625 $2,029
------ ------
------ ------
</TABLE>

Aggregate maturities of long-term debt for the next five fiscal years are as
follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
FEBRUARY 28,
- ---------------------------------------------------------------------------------
<S> <C>
1999.......................................................................... $ 622
2000.......................................................................... 635
2001.......................................................................... 646
2002.......................................................................... 564
2003.......................................................................... 184
-------
Total.................................................................... $ 2,651
-------
-------
</TABLE>

NOTE 10 -- LEASES

OPERATING LEASES

Air Systems leases its primary office and warehouse space from the
President and controlling stockholder of Air Systems. The leases expire
principally in December 31, 2001. The rents paid under these related-party
leases is approximately $29,000 per month.

Air Systems also leases other facilities and storage space from unrelated
parties under non-cancelable operating leases which expire from October 31,1998
to January 31, 2000. The rent paid under these leases is approximately $11,000
per month.

Future minimum lease payments under these non-cancelable operating leases
are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
FEBRUARY 28,
- ---------------------------------------------------------------------------------
<S> <C>
1999.......................................................................... $ 430
2000.......................................................................... 423
2001.......................................................................... 348
2002.......................................................................... 298
2003.......................................................................... 48
Thereafter.................................................................... 1,176
-------
Total minimum lease payments............................................. $ 2,723
-------
-------
</TABLE>

F-40

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Rent expenses under these leases totaled approximately $257,000, $251,000,
and $359,000 for the years ended February 29, 1996 and February 28, 1997 and
1998, respectively.

CAPITAL LEASES

Air Systems has accounted for certain leased equipment by capitalizing the
equipment and establishing a related obligation under the terms of the lease
involved. The following is an analysis for leased equipment under capital leases
by major class:

<TABLE>
<CAPTION>
ESTIMATED FEBRUARY 28,
USEFUL LIVES --------------
IN YEARS 1997 1998
------------ ----- -----
(IN THOUSANDS)
<S> <C> <C> <C>
Class of property:
Transportation equipment......................................... 4 $ 650 $ 650
Office equipment................................................. 4-5 46 81
----- -----
Total equipment............................................. 696 731
Less -- Accumulated amortization................................. (436) (568)
----- -----
Leased property, net........................................ $ 260 $ 163
----- -----
----- -----
</TABLE>

Amortization expense related to leased property under capital leases
totaled approximately $135,000, $139,000, and $132,000 for the years ended
February 29, 1996 and February 28, 1997 and 1998, respectively, and has been
included in depreciation and amortization expense in the accompanying financial
statements.

The following is a schedule by year of future minimum lease payments under
capital leases, together with the present value of net minimum lease payments at
February 28, 1998 (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
FEBRUARY 28,
- -------------------------------------------------------------------------------------
<S> <C>
1999.............................................................................. $ 109
2000.............................................................................. 19
2001.............................................................................. 7
2002.............................................................................. 6
-------
Total minimum lease payments...................................................... 141
Less -- Amount representing interest.............................................. 9
-------
$ 132
-------
-------
</TABLE>

NOTE 11 -- RELATED-PARTY TRANSACTIONS

Air Systems leases its primary office and warehouse facility from the
president and controlling stockholder of Air Systems. (See Note 10.)

The controlling stockholder of Air Systems is a 70% owner of another
related mechanical contractor located in Sacramento, California, incorporated in
January, 1996. Air Systems provides administrative services to this related
party which amounted to approximately $4,000 and $18,000 for the years ended
February 28, 1997 and 1998, respectively. At February 28, 1997 and 1998, Air
Systems has a receivable of $115,000 and $520,000 due from this related party,
respectively. (See Note 4.)

NOTE 12 -- INCOME TAXES

F-41

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The major components of Air Systems' provision for income taxes are as
follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
FEBRUARY 29, ----------------
1996 1997 1998
------------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal....................................................... $397 $ 933 $1,031
State......................................................... 119 267 335
------ ------ ------
516 1,200 1,366
Deferred........................................................... 3 (4) 242
------ ------ ------
Total provision for income taxes.............................. $519 $1,196 $1,608
------ ------ ------
------ ------ ------
</TABLE>

The provision for income taxes varied from the statutory federal income tax rate
as follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
FEBRUARY 29, -------------------------------
1996 1997 1998
-------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income tax at the U.S. Federal statutory rate....... $449 34.0% $1,044 35.0% $1,335 35.0%
State taxes, net of federal benefit................. 81 6.2 178 6.0 236 6.2
Other............................................... (11) (.9) (26) (.9) 37 1.0
---- ---- ------ ---- ------ ----
Effective tax rate............................. $519 39.3% $1,196 40.1% $1,608 42.2%
---- ---- ------ ---- ------ ----
---- ---- ------ ---- ------ ----
</TABLE>

The components of the net deferred tax asset are as follows:

<TABLE>
<CAPTION>
FEBRUARY 28,
--------------
1997 1998
----- -----
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Receivables..................................................................... $ 93 $ 108
Warranty........................................................................ 141 127
Accrued vacation compensation................................................... 28 40
State taxes..................................................................... 92 115
----- -----
Total deferred tax asset................................................... 354 390
Deferred tax liabilities:
Property and equipment.......................................................... (153) (331)
Accrued liabilities............................................................. (128) --
----- -----
Total deferred tax liability............................................... (281) (331)
----- -----
Net deferred tax asset............................................................... $ 73 $ 59
----- -----
----- -----
</TABLE>

NOTE 13 -- BENEFIT PLANS

Air Systems has a profit-sharing plan covering substantially all employees
not covered by a collective bargaining agreement. Contributions are determined
annually at the discretion of the Board of Directors and may not exceed 15% of
eligible compensation. For the years ended February 29, 1996 and February 28,
1997 and 1998, Air Systems made no contributions.

Air Systems has a 401(k) plan which covers substantially all employees who
are not covered by a collective bargaining agreement. Employer contributions are
discretionary and determined annually by management. The contributions are
limited to the proportionate share of employee contributions, up to 15% of
eligible compensation. For the years ended February 28, 1997 and 1998, the
discretionary employer contribution were approximately $82,000 and $177,000
respectively. (None for 1996).

F-42

<PAGE>

AIR SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Union employees are covered by multi-industry pension plans to which Air
Systems contributes monthly based on hours worked by each eligible employee. For
the years ended February 29, 1996 and February 28, 1997 and 1998, Air Systems
contributed approximately $1,360, $2,127 and $3,404 to the plans. Separate
actuarial calculations of Air Systems' position are not available with respect
to the multi-employer plans.

NOTE 14 -- MAJOR CUSTOMERS AND VENDOR

The following table summarizes the annual percentage contribution to
revenues by customer whose percentage exceeds 10% of revenues.

<TABLE>
<CAPTION>
ACCOUNTS RECEIVABLE
REVENUES BALANCE
-------------------------------- ---------------------------------
FEBRUARY 28, FEBRUARY 28,
FEBRUARY 29, ---------------- FEBRUARY 29, -----------------
1996 1997 1998 1996 1997 1998
------------ ------ ------ ------------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Customer A.......................... 30% 41% 50% $4,156 $6,353 $18,343
Customer B.......................... -- 15% 16% -- 2,585 6,717
</TABLE>

The following table summarizes the annual percentage contribution to cost
of revenues by vendor whose percentage exceeds 10% of cost of revenues:

<TABLE>
<CAPTION>
ACCOUNTS PAYABLE
COST OF REVENUES BALANCE
-------------------------------- --------------------------------
FEBRUARY 28, FEBRUARY 28,
FEBRUARY 29, ---------------- FEBRUARY 29, ----------------
1996 1997 1998 1996 1997 1998
------------ ------ ------ ------------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Vendor A............................. -- -- 21% $-- $ -- $ 188
</TABLE>

NOTE 15 -- FINANCIAL INSTRUMENTS

Air Systems' financial instruments consist of trade accounts receivable, a
line of credit and notes payable. Air Systems believes that the carrying value
of these instruments on the accompanying balance sheet approximates their fair
value due to their nature.

NOTE 16 -- SUBSEQUENT EVENTS (UNAUDITED)

Air Systems and its stockholders have entered into a definitive agreement
with Enfinity pursuant to which Air Systems will merge with a wholly owned
subsidiary of Enfinity. All outstanding shares of Air Systems will be exchanged
for cash and common stock of Enfinity concurrently with the consummation of the
initial public offering of the common stock of Enfinity.

On March 1, 1998, the Board of Directors approved a 2,350 to 1 stock split.
All common stock related information included in the financial statements has
been adjusted to reflect this split.

On March 1, 1998, the Company adopted an Incentive Stock Option Plan and
reserved 235,000 shares available under the plan to any full-time managerial
employee of the Company. Incentive stock options to purchase the Company's
common stock may be granted at prices not lower than fair market value at the
date of grant. The fair market value and terms of exercise are determined by the
Board of Directors.

On April 1, 1998, 50,000 shares were granted to employees at an exercise
price of $20 per share as such price was determined by the Board of Directors to
be the fair market value of the Company's common stock. The Company has elected
to determine the value of stock-based compensation arrangements under the
provisions of APB No. 25.

F-43

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
ENERGY SYSTEMS INDUSTRIES, INC.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Energy
Systems Industries, Inc. ('Energy Systems') and its subsidiaries at December 31,
1996 and 1997, and the results of their operations and their cash flows for each
of the three years then ended in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Energy Systems'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
March 23, 1998

F-44

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- MARCH 31,
1996 1997 1998
------ ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................................. $ 134 $ -- $--
Accounts receivable:
Trade, net of allowance of $36, $54 and $56 in 1996, 1997 and 1998,
respectively........................................................ 6,744 10,214 9,290
Retainage............................................................. 282 568 653
Other receivables..................................................... 12 109 119
Costs and estimated earnings in excess of billings on uncompleted
contracts................................................................ 180 293 727
Inventories................................................................ 227 262 296
Prepaid expenses and other current assets.................................. 263 120 118
Deferred income taxes...................................................... 154 155 755
------ ------- -----------
Total current assets.................................................. 7,996 11,721 11,958
Property and equipment, net..................................................... 1,106 958 960
Other assets.................................................................... 731 741 750
------ ------- -----------
Total assets.......................................................... $9,833 $13,420 $13,668
------ ------- -----------
------ ------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit............................................................. $ -- $ -- $ 2,387
Current portion of obligations under capital lease......................... 11 11 11
Accounts payable........................................................... 2,687 4,161 1,541
Accrued expenses........................................................... 742 1,305 4,371
Accrued payroll and related costs.......................................... 667 826 590
Billings in excess of costs and estimated earnings on uncompleted
contracts................................................................ 325 314 410
Unearned revenue........................................................... 380 377 503
Income taxes payable....................................................... 277 441 109
------ ------- -----------
Total current liabilities............................................. 5,089 7,435 9,922
Line of credit.................................................................. 1,429 2,409 --
Obligations under capital lease, net of current portion......................... 35 24 21
------ ------- -----------
Total liabilities..................................................... 6,553 9,868 9,943
------ ------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.10 par value; 100,000 shares authorized, 1,346 shares
issued and outstanding with a liquidation value of $1,300,000............ -- -- --
Common stock, $.10 par value; 300,000 shares authorized and 2,500 issued,
776, 636 shares and 777 outstanding in 1996, 1997 and 1998
respectively............................................................. -- -- --
Additional paid-in capital................................................. 1,622 1,622 2,665
Net unrealized gain on securities available for sale....................... -- 32 32
Retained earnings.......................................................... 2,222 2,898 2,028
Less: Treasury stock, 1,724 shares in 1996 and 1,864 shares in 1997 and
1998, respectively, at cost.............................................. (564) (1,000) (1,000)
------ ------- -----------
Total stockholders' equity............................................ 3,280 3,552 3,725
------ ------- -----------
Total liabilities and stockholders' equity............................ $9,833 $13,420 $13,668
------ ------- -----------
------ ------- -----------
</TABLE>

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

F-45

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
----------------------------- ------------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues................................................... $44,177 $48,069 $54,228 $11,265 $15,085
Cost of revenues........................................... 36,498 40,299 45,893 9,390 12,999
------- ------- ------- ------- -------
Gross profit.......................................... 7,679 7,770 8,335 1,875 2,086
Selling, general and administrative expenses............... 6,537 6,948 6,869 1,728 1,715
Employee stock compensation................................ -- -- -- -- 1,816
------- ------- ------- ------- -------
Income (loss) from operations......................... 1,142 822 1,466 147 (1,445)
Other (income) expense:
Interest expense...................................... 275 252 265 62 53
Interest income....................................... (6) (5) (5) (2) (1)
Income from unconsolidated joint venture.............. (67) (89) 9 -- --
Realized gain on sale of investments.................. -- -- (56) -- --
Other................................................. 15 42 23 (17) --
------- ------- ------- ------- -------
Income (loss) before provision for income taxes............ 925 622 1,230 104 (1,497)
Provision (benefit) for income taxes....................... 423 293 554 42 (627)
------- ------- ------- ------- -------
Net income (loss).......................................... $ 502 $ 329 $ 676 $ 62 $ (870)
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>

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

F-46

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
ADDITIONAL UNREALIZED TOTAL
PREFERRED COMMON PAID-IN RETAINED GAIN ON TREASURY STOCKHOLDERS'
STOCK STOCK CAPITAL EARNING INVESTMENT STOCK EQUITY
--------- ------ ---------- -------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994.............. -- -- $1,622 $1,391 $-- $ (215) $ 2,798
Purchase of treasury stock......... -- -- -- -- -- (216) (216)
Net income......................... -- -- -- 502 -- -- 502
--------- ------ ---------- -------- ---------- -------- -------------
Balance, December 31, 1995.............. -- -- 1,622 1,893 -- (431) 3,084
Purchase of treasury stock......... -- -- -- -- -- (133) (133)
Net income......................... -- -- -- 329 -- -- 329
--------- ------ ---------- -------- ---------- -------- -------------
Balance, December 31, 1996.............. -- -- 1,622 2,222 -- (564) 3,280
Purchase of treasury stock......... -- -- -- -- -- (436) (436)
Comprehensive income
Unrealized gain on
investments, net............ -- -- -- -- 32 -- 32
Net income.................... -- -- -- 676 -- -- 676
--------- ------ ---------- -------- ---------- -------- -------------
Comprehensive income.......... -- -- -- -- -- -- 708
--------- ------ ---------- -------- ---------- -------- -------------
Balance, December 31, 1997.............. -- -- 1,622 2,898 32 (1,000) 3,552
Stock issued to an employee
(unaudited)...................... -- -- 1,043 -- -- -- 1,043
Net loss (unaudited)............... -- -- -- (870) -- -- (870)
--------- ------ ---------- -------- ---------- -------- -------------
Balance, March 31, 1998 (unaudited)..... -- -- $2,665 $2,028 $ 32 $ (1,000) $ 3,725
--------- ------ ---------- -------- ---------- -------- -------------
--------- ------ ---------- -------- ---------- -------- -------------
</TABLE>

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

F-47

<PAGE>

<PAGE>
ENERGY SYSTEMS INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
---------------------------- ----------------------------------------
1995 1996 1997 1997 1998
------- ------ ------- ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................. $ 502 $ 329 $ 676 $ 62 $ (870)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation expense.......... 228 236 217 70 54
Stock compensation............ -- -- -- -- 963
Equity in earnings of
unconsolidated joint
venture..................... (67) (89) 9 -- --
Bad debt expense.............. 61 140 83 30 29
Deferred income taxes......... (87) (107) (33) 104 (627)
Changes in operating assets
and liabilities:
Accounts receivable...... (2,284) 1,348 (3,936) 53 879
Prepaid expense and other
current assets......... 51 (77) 143 9 (96)
Inventories.............. 18 76 (35) (3) (34)
Costs and estimated
earnings in excess of
billings on uncompleted
contracts.............. 59 (72) (113) (200) (434)
Other assets............. -- (23) (3) (6) 3
Accounts payable......... 1,394 (783) 1,474 (579) (613)
Accrued expenses and
payroll costs.......... 373 (425) 722 (22) 842
Billings in excess of
costs and estimated
earnings on uncompleted
contracts.............. 88 18 (11) (76) 96
Unearned revenue......... (53) 91 (3) 37 126
Income taxes payable..... (81) 114 164 (296) (332)
------- ------ ------- ------- -------
Net cash provided by
(used in)
operating
activities........ 202 776 (646) (817) (14)
------- ------ ------- ------- -------
Cash flows from investing activities:
Additions to property and
equipment........................ (209) (124) (69) (15) (56)
Cash surrender value of officer's
life insurance policy............ (28) 8 (31) -- --
Distributions received from
unconsolidated joint venture..... 24 48 69 -- 95
Purchase of investments............ (56) -- (16) (13) --
Proceeds on sale of investments.... -- -- 82 -- --
Gain on sale of investments........ -- -- (56) -- --
------- ------ ------- ------- -------
Net cash used in
investing
activities........ (269) (68) (21) (28) 39
------- ------ ------- ------- -------
Cash flows from financing activities:
Net borrowings (repayments) of line
of credit........................ 573 (844) 980 827 (22)
Payments under capital lease
obligations...................... (40) (11) (11) (4) (3)
Acquisition of treasury stock...... (216) (133) (436) (4) --
------- ------ ------- ------- -------
Net cash provided by
(used in)
financing
activities........ 317 (988) 533 819 (25)
------- ------ ------- ------- -------
Net increase (decrease) in cash and cash
equivalents........................... 250 (280) (134) (26) --
Cash and cash equivalents, beginning of
period................................ 164 414 134 134 --
------- ------ ------- ------- -------
Cash and cash equivalents, end of
period................................ $ 414 $ 134 $ -- $ 108 -$-
------- ------ ------- ------- -------
------- ------ ------- ------- -------
Supplemental disclosure of cash flow
information:
Cash paid for interest............. $ 277 $ 240 $ 224 $ 48 $ 53
Cash paid for income taxes......... $ 602 $ 296 $ 576 $ 294 $ 286
</TABLE>

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

F-48

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Energy Systems Industries, Inc. ('Energy Systems'), founded in 1947,
primarily performs outsourced facility services focusing on the on-site
maintenance of energy and indoor environmental systems.

Energy Systems and its stockholders intend to enter into a definitive
agreement with Enfinity Corporation ('Enfinity'), pursuant to which all
outstanding shares of Energy Systems' common stock will be exchanged for cash
and shares of Enfinity common stock concurrently with the consummation of the
initial public offering (the 'Offering') of the common stock of Enfinity.

Energy Systems' subsidiary, BTE Services, Inc., ceased its operations
during 1995. These operations were not deemed to be significant to the
consolidated financial position, operations or cash flows of Energy Systems.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include Energy Systems Industries,
Inc. and its wholly-owned subsidiaries, Balco, Inc., Building Technology
Engineering, Inc., BTE Services, Inc. and Rollins, King & McKone & Associates,
Inc. All significant intercompany transactions and balances have been eliminated
in consolidation.

CASH AND CASH EQUIVALENTS

Energy Systems considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. Energy
Systems, at times during the year, maintains cash in a financial institution
that may exceed the amount insured by the Federal Deposit Insurance Corporation.

INVESTMENTS

Energy Systems accounts for certain investments using Statement of
Financial Accounting Standards No. 115, 'Accounting for Certain Investments in
Debt and Equity Securities' ('SFAS No. 115'). This standard requires that
certain debt and equity securities be adjusted to market value at the end of
each accounting period. Unrealized market value gains and losses are charged to
earnings if the securities are traded for short-term profit. Otherwise, such
unrealized gains and losses are charged or credited to a separate component of
stockholders' equity. Investments that are not within the scope of SFAS No. 115
are carried at cost and have been included in Other Investments.

At December 31, 1997, all securities covered by SFAS No. 115 were
designated as available for sale. Accordingly, these securities are stated at
fair value, with unrealized gains and losses reported in a separate component of
stockholders' equity. Available for sale securities accounted for in accordance
with SFAS No. 115 at December 31, 1997 were considered nonmarketable at December
31, 1996, and were therefore carried at cost and included in Other Investments.
Realized gains and losses on sales of investments, as determined on a specific
identification basis, are included in the Consolidated Statement of Operations.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market using the
first-in, first-out ('FIFO') method.

F-49

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are capitalized and amortized over the lesser of the life
of the lease or the estimated useful life of the asset.

STOCKHOLDERS EQUITY

Energy Systems stockholders' equity consists of common stock and redeemable
preferred stock. Holders of common stock are entitled to one vote per share and
are entitled to dividends at the discretion of the Board of Directors.

The holder of the redeemable preferred stock is entitled to one vote per
share on all matters upon which common stockholders are entitled to vote and is
not entitled to divedends. The redeemable preferred shares have a redemption
price of $1,300,000 in the aggregate. As described on Note 13, the preferred
stock is redeemable upon the death of the stockholder or the sale of the
Company. In connection with the issuance of the preferred shares, the Company
acquired a life insurance policy with a face value of $1,300,000 on the
principal holder of these shares. In the event of any liquidation, dissolution
or sale of the Company, the holder of the redeemable preferred stock shall be
paid the redemption price prior to payment to any other stockholders.

REVENUE RECOGNITION

Energy Systems recognizes revenue when services are performed except when
work is being performed under a construction contract. Revenues from
construction contracts are recognized on the percentage-of-completion method
measured by the percentage of costs incurred to total estimated costs for each
contract. Provisions for the total estimated losses on uncompleted contracts are
made in the period in which such losses are determined. Changes in job
performance, job conditions, estimated profitability and final contract
settlements may result in revisions to costs and income and their effects are
recognized in the period in which the revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts will be due upon completion of the
contracts and acceptance by the customer. Based on Energy Systems' experience
with similar contracts in recent years, the retention balance will be collected
in the upcoming fiscal year.

WARRANTY COSTS

Energy Systems warrants labor for the first year after installation on new
air conditioning and heating systems. Energy Systems generally warrants labor
for 30 days after servicing of existing air conditioning and heating systems. A
reserve for warranty costs is recorded as part of the cost to complete each
individual job.

UNEARNED INCOME

Unearned income represents the unexpired portion of contracts with
customers for service and maintenance.

F-50

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

Energy Systems accounts for certain income and expense items differently
for financial reporting and income tax purposes in accordance with Statement of
Financial Accounting Standards No. 109, 'Accounting for Income Taxes' ('SFAS
109'). Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities applying enacted statutory tax rates in effect for the year in which
the differences are expected to reverse.

USE OF ESTIMATES

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject Energy Systems to
concentrations of credit risk consist principally of trade accounts receivable.
Energy Systems does not believe that it is subject to any unusual credit risk
beyond the normal credit risk attendant in its business.

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, Energy Systems adopted Statement of Financial
Accounting Standards No. 121, 'Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.' Accordingly, in the event
that facts and circumstances indicate that property and equipment or other
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset are compared to the asset's carrying amount to
determine if a write-down to market value is necessary. Adoption of this
standard did not have a material effect on the financial position or results of
operations of Energy Systems.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month periods ended March
31, 1997 and 1998 has been prepared from the unaudited financial records of
Energy Systems and in the opinion of management reflects all adjustments,
consisting only of normal recurring items, necessary for a fair presentation of
the financial position and results of operations and of cash flows for the
interim periods.

F-51

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3 -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996 1997
---- ---- ----
(IN THOUSANDS)

<S> <C> <C> <C>
Balance, beginning of year............................................. $ 31 $ 45 $ 36
Charges to costs and expenses.......................................... 46 84 101
Write-offs............................................................. (32) (93) (83)
---- ---- ----
$ 45 $ 36 $ 54
---- ---- ----
---- ---- ----
</TABLE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ------------------
IN YEARS 1996 1997
------------ ------- -------
(IN THOUSANDS)

<S> <C> <C> <C>
Equipment................................................. 5-10 years $ 104 $ 122
Furniture and office equipment............................ 5-7 years 1,451 1,494
Leased office equipment................................... 5-7 years 58 58
Motor vehicles............................................ 3-5 years 137 144
Leasehold improvements.................................... 3-20 years 1,405 1,405
Less -- Accumulated depreciation and amortization........ (2,049) (2,265)
------- -------
Property and equipment, net............................... $ 1,106 $ 958
------- -------
------- -------
</TABLE>

Depreciation expense was approximately $228,000, $236,000 and $217,000 for
the years ended December 31, 1995, 1996 and 1997, respectively.

NOTE 5 -- MARKETABLE SECURITIES AVAILABLE FOR SALE

The available for sale securities at December 31, 1997 are summarized as
follows:

<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED
HOLDING HOLDING MARKET
COST GAINS LOSSES VALUE
---- ---------- ---------- ------
(IN THOUSANDS)

<S> <C> <C> <C> <C>
Common stock......................................... $30 $ 52 -$- $ 82
---- --- ----- ------
Total marketable securities available for
sale.......................................... $30 $ 52 -$- $ 82
---- --- ----- ------
---- --- ----- ------
</TABLE>

The difference between cost and market of $52,000 (less deferred taxes of
$20,000) was credited to a separate component of stockholders' equity called
'Net Unrealized Gain on Securities Available for Sale' at December 31, 1997.

Proceeds from sales of securities available for sale were approximately
$82,000 in 1997. In 1997, gross gains on the sale of securities available for
sale amounted to approximately $56,000. In 1996 and 1995, Energy Systems did not
have any securities available for sale.

F-52

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Energy Systems' installation contracts in progress are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
------- -------
(IN THOUSANDS)

<S> <C> <C>
Costs incurred on contracts in progress.................................. $ 2,958 $ 4,762
Estimated earnings, net of losses........................................ 477 390
------- -------
3,435 5,152
Less -- Billings to date................................................ (3,580) (5,173)
------- -------
$ (145) $ (21)
------- -------
------- -------
Costs and estimated earnings in excess of billings on uncompleted
contracts.............................................................. $ 180 $ 293
Billings in excess of costs and estimated earnings on uncompleted
contracts.............................................................. (325) (314)
------- -------
$ (145) $ (21)
------- -------
------- -------
</TABLE>

NOTE 7 -- LONG-TERM DEBT

Energy Systems maintains a line of credit of $3,500,000 which is secured by
accounts receivable, inventory and machinery and equipment. Interest is computed
at prime plus 0.5% per annum, (9.0% at December 31, 1997) and is payable
monthly. This agreement is scheduled to expire in January 1999. At December 31,
1996 and 1997, outstanding borrowings against this line of credit were
approximately $2,273,000, $1,429,000 and $2,409,000, respectively.

NOTE 8 -- LEASE COMMITMENTS

Energy Systems leases its main office facility under an agreement requiring
annual payments of approximately $169,000 through June 2000 and then
approximately $213,000 through June 2005. Of this facility, approximately 25% is
sub-leased to a third party under a lease agreement through 2001. Energy Systems
leases its office improvements and renovations from a related party. This lease
agreement requires annual payments of approximately $126,000 through 1998 and
then decreases to approximately $52,000 through May 1999, at which time the
lease expires.

Energy Systems entered into a five year lease agreement for the rental of
office space in Maryland. This lease required monthly lease payments of
approximately $4,000 through June 1997 and then increases by 3% each year until
June 2001, at which time the lease expires.

A summary of future minimum lease payments are as follows:

<TABLE>
<CAPTION>
TOTAL NET
YEARS ENDING LEASE RENTAL LEASE
DECEMBER 31 PAYMENTS INCOME PAYMENTS
- -------------------------------------------------------------- -------- ------ --------
(IN THOUSANDS)

<S> <C> <C> <C>
1998....................................................... $ 345 $124 $ 221
1999....................................................... 274 129 145
2000....................................................... 244 136 108
2001....................................................... 240 35 205
2002....................................................... 213 -- 213
Thereafter................................................. 531 -- 531
-------- ------ --------
Total future minimum lease payments................... $1,847 $424 $1,423
-------- ------ --------
-------- ------ --------
</TABLE>

F-53

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Energy Systems has accounted for certain leased equipment by capitalizing
the equipment and establishing a related obligation under the terms of the lease
involved. Leased equipment recorded at December 31, 1996 and 1997 and related
accumulated amortization are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)

<S> <C> <C>
Leased property under capital lease............................ $ 58 $ 58
Less -- Accumulated amortization............................... (14) (23)
---- ----
Leased equipment, net.......................................... $ 44 $ 35
---- ----
---- ----
</TABLE>

Future minimum lease payments under capital lease as of December 31, 1997
are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- --------------------------------------------------------------------

NOTE 9 -- INCOME TAXES

Income tax expense differs from amounts currently payable because certain
revenues and expenses are reported in the income statement in periods which
differ from those in which they are subject to taxation. The principle
differences in timing between the income statement and taxable income are shown
below.

The components of income tax expense (benefit) are as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1995 1996 1997
---------------- ---------------- ----------------
FEDERAL STATE FEDERAL STATE FEDERAL STATE
------- ----- ------- ----- ------- -----
(IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C>
Current............................................. $ 357 $ 120 $ 278 $ 121 $ 454 $ 133
Deferred............................................ (41) (13) (68) (38) (25) (8)
------- ----- ------- ----- ------- -----
Total provision for income taxes............... $ 316 $ 107 $ 210 $ 83 $ 429 $ 125
------- ----- ------- ----- ------- -----
------- ----- ------- ----- ------- -----
</TABLE>

Reconciliation of the statutory tax rate and effective tax rate:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------
1995 1996 1997
------------ ------------ ------------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C>
U.S. federal statutory rate........................ $315 34.0% $211 34.0% $418 34.0%
Increase (decrease) in rate resulting from:
State taxes, net of federal benefit........... (42) (4.5) (41) (6.6) (35) (2.8)
Nondeductible expenses:
Meals and entertainment....................... 14 1.5 15 2.4 17 1.4
Penalties..................................... 13 1.4 1 0.2 1 0.1
Officer's life insurance...................... 31 3.3 45 7.2 46 3.7
Dividend received deduction................... (15) (1.6) (21) (3.4) (17) (1.4)
State tax provision........................... 107 11.6 83 13.3 124 10.0
---- ---- ---- ---- ---- ----
Effective tax rate............................ $423 45.7% $293 47.1% $554 45.0%
---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ----
</TABLE>

F-54

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The net deferred income tax benefit in the balance sheets includes the
following amounts of deferred tax assets and liabilities:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)

<S> <C> <C>
Deferred tax asset............................................ $322 $362
Deferred tax liability........................................ (35) (62)
---- ----
Net deferred tax assets....................................... $287 $300
---- ----
---- ----
</TABLE>

Deferred taxes are comprised of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)

<S> <C> <C>
Allowance for bad debts....................................... $ 17 $ 20
Vacation pay accrual.......................................... 81 99
Accrual for estimated losses.................................. 56 56
Net fixed asset -- book/tax difference....................... 15 26
Accrued SERP.................................................. 87 94
Pension....................................................... 58 65
Service warranty.............................................. 8 2
Unconsolidated subsidiary..................................... (35) (42)
Unrealized gain on investments................................ -- (20)
---- ----
Net deferred tax assets.................................. $287 $300
---- ----
---- ----
</TABLE>

NOTE 10 -- EMPLOYEE BENEFIT PLAN

Energy Systems maintains two defined benefit pension plans. One plan covers
employees who are members of a bargaining unit and those who are employed in
other than an administrative capacity. Benefits for this plan are based on a
flat monthly rate times an employee's number of months of service. Effective
January 1, 1996, this plan was frozen to new participants and a 401(k) plan was
implemented.

The following tables set forth the plan's funded status and amounts
recognized in Energy Systems' statement of financial position at December 31,
1995, 1996 and 1997.

Actuarial present value of benefit obligations:

<TABLE>
<S> <C> <C>
Accumulated benefit obligation, including vested benefits of approximately
$2,367,000, $2,353,000 and $2,504,000 in 1995, 1996 and 1997, respectively....... $ 2,464 $ 2,639
------- -------
------- -------
Projected benefit obligation for service rendered to date.......................... $(2,601) $(2,803)
Plan assets at fair value.......................................................... 2,671 3,015
------- -------
Plan assets in excess of projected benefit obligation (projected benefit obligation
in excess of plan assets)........................................................ 70 212
Unrecognized prior service costs................................................... (316) (294)
Unrecognized net loss from past experience different from that assumed............. 144 (34)
Unrecognized net transition asset.................................................. (100) (88)
------- -------
Accrued pension cost............................................................... $ (202) $ (204)
------- -------
------- -------
</TABLE>

F-55

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Net pension cost included the following components:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1996 1997
----- ----- -----
(IN THOUSANDS)

<S> <C> <C> <C>
Service cost -- benefit earned during the period........................... $ 55 $ 83 $ 79
Interest cost on projected benefit obligation.............................. 161 176 190
Estimated/Actual return on plan assets..................................... (381) (289) (484)
Net amortization and deferral.............................................. 164 56 232
----- ----- -----
Net periodic pension cost (income)......................................... $ (1) $ 26 $ 17
----- ----- -----
----- ----- -----
</TABLE>

For fiscal years 1995, 1996 and 1997, the weighted-average discount rate
and rate of increase in future compensation levels used in determining the
actuarial present value of the projected benefit obligation were 8.3% and 5.0%,
respectively, for 1995, 7.0% and 5.0%, respectively, for 1996, and 7.3% and
5.0%, respectively, for 1997. The expected long-term rate of return on assets
used for purposes of the net periodic pension costs was 8.0% for 1995 and 1996
and 8.5% for 1997.

Energy Systems' second defined benefit plan covers all other employees of
Energy Systems, not covered in the plan previously described. The benefit
formula for this plan was amended as of November 1, 1993 and is based upon an
employee's years of service and career average earnings.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1997
----- -----
(IN THOUSANDS)

<S> <C> <C>
Accumulated benefit obligation, including vested benefits of approximately
$755,000 and $824,000 at December 31, 1996 and 1997, respectively.............. $ 905 $ 993
----- -----
----- -----
Projected benefit obligation for service rendered to date........................ $(905) $(993)
Plan assets at fair value........................................................ 811 930
Projected benefit obligation in excess of plan assets............................ (94) (63)
Unrecognized prior service costs................................................. -- --
Unrecognized net loss from past experience different from that assumed........... 190 146
Unrecognized net transition asset................................................ (38) (34)
Additional minimum liability..................................................... -- (112)
----- -----
Prepaid pension cost (liability)................................................. $ 58 $ (63)
----- -----
----- -----
</TABLE>

Net pension cost included the following components:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1995 1996 1997
----- ----- -----
(IN THOUSANDS)

<S> <C> <C> <C>
Service cost -- benefits earned during the period....................... $ 71 $-- $--
Interest cost on projected benefit obligation........................... 52 65 67
Estimated/Actual return on plan assets.................................. (95) (86) (135)
Net amortization and deferral........................................... 61 57 81
Recognition of curtailment loss......................................... -- 69 --
----- ----- -----
Net periodic pension cost............................................... $ 89 $ 105 $ 13
----- ----- -----
----- ----- -----
</TABLE>

The weighted-average discount rate used in determining the actuarial
present value of the projected benefit obligation was 7.5% for 1995 and 1996 and
7.3% for 1997, and the expected long-term rate of return on assets used for
purposes of the net periodic pension costs was 8.0% for 1995, 1996 and 1997.

F-56

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The 401(k) plan for bargaining unit employees that was implemented January
1, 1996 matches 10.0% of the first 5.0% of a participant's contribution to the
401(k) plan. Energy Systems' funding policy is to contribute annually the
maximum amount that can be deducted for Federal income tax purposes. For 1996
and 1997, this matching contribution totaled approximately $34,000 and $42,000,
respectively.

Energy Systems also maintains an employee stock-sharing plan and 401(k)
profit sharing plan for all administrative employees. Effective September 13,
1993, the trustees voted to amend the stock-sharing plan by cessation of
stock-sharing contributions to preclude the addition of new participants to the
stock-sharing portion of the plan and to provide for full vesting by
participants of their stock-sharing accounts.

Energy Systems has elected to contribute to the 401(k) profit-sharing plan
10.0% of a year's net income before income taxes that exceeds a 10.0% return on
its invested capital. For fiscal years 1995, 1996 and 1997, this contribution
totaled approximately $34,000, $10,000 and $25,000, respectively. In addition,
it is the present policy of Energy Systems to match 10.0% of the first 5.0% of a
participant's contribution to the 401(k) plan. These matching contributions
totaled approximately $20,000, $19,000 and $20,000 for 1995, 1996 and 1997,
respectively.

Energy Systems participates with other companies in making collectively
bargained contributions to a pension fund covering most of its union employees.
The Multi-Employer Pension Plan Amendments Act of 1980 amended ERISA to
establish funding requirements and obligations for employers participating in
multi-employer plans, principally related to employer withdrawal from or
termination of such plans. Separate actuarial calculations of the Company's
position are not available with respect to the multi-employer plans.

NOTE 11 -- FINANCIAL INSTRUMENTS

Energy Systems' financial instruments consist of cash and cash equivalents,
trade accounts receivable, a line of credit, notes payable and debt. Energy
Systems believes that the carrying value of these instruments on the
accompanying balance sheet approximates their fair value.

NOTE 12 -- STOCK REDEMPTION AGREEMENT

In connection with the issuance of preferred stock, Energy Systems has
acquired a life insurance policy on the life of the principal holder of these
shares. The insurance policy's face value is $1,300,000. Energy Systems has
agreed to redeem the preferred stock upon the death of that stockholder.

NOTE 13 -- INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

During 1992, Energy Systems, along with several unrelated companies within
the industry, formed a company, HVAC Compensation Corporation, in a joint effort
to acquire and provide worker's compensation insurance to those in the group.
The primary purpose of this entity is to collect premiums from the member
companies and process and pay claims. Premiums collected, plus any earnings on
the premiums in excess of claims paid and projected to be paid, are returned to
the member companies in the form of a dividend. These dividends are payable over
four years commencing two years after the close of the insurance company's
fiscal year. This investment is accounted for under the equity method of
accounting. As of December 31, 1995, 1996 and 1997, Energy Systems' allocable
share of the projected dividends amounted to approximately $324,000, $367,000
and $288,000, respectively.

NOTE 14 -- SUBSEQUENT EVENTS (UNAUDITED)

Energy Systems and its stockholders have entered into a definitive
agreement with Enfinity pursuant to which Energy Systems will merge with a
wholly owned subsidiary of Enfinity. All

F-57

<PAGE>

ENERGY SYSTEMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

outstanding shares of Energy Systems will be exchanged for cash and common stock
of Enfinity concurrently with the consummation of the initial public offering of
the common stock of Enfinity.

In January 1998, the Board of Directors approved the issuance of 141 shares
of Energy Systems stock worth approximately $963,000 to a key employee. The
employee executed an $80,000 promissory note payable to Energy Systems which
matures at the earlier of January 12, 2003 or upon the employee's termination
with Energy Systems. The excess of the fair value of the shares (estimated for
value of $963,000) and the employee's cost of $80,000 will be recorded as
compensation expense in 1998. In addition, a cash bonus of approximately
$853,000 was granted to the employee in 1998 to cover the income tax cost
associated with the stock award.

Effective January 1, 1998, Energy Systems changed the structure of its
investment in HVAC Compensation Corporation (see Note 13). Energy Systems'
investment in HVAC was converted into one non-voting share of preferred stock in
a captive insurance company. Energy Systems will continue to receive the value
of excess premiums over costs in the form of dividends from the captive
insurance company, similar to the previous arrangement with HVAC. The investment
will be no charge in the method of accounting for this investment as a result of
the change in structure.

Energy Systems amended its Revolving Credit and Security Agreement
effective January 30, 1998. The agreement, as amended, terminates on January 31,
1999 and interest will be computed at prime plus 0.25%.

F-58

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
NEW ENGLAND MECHANICAL SERVICES, INC.

In our opinion, the accompanying balance sheet and the related statements
of operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of New England Mechanical Services,
Inc. ('NEMSI') at December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of NEMSI's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Philadelphia, Pennsylvania
May 13, 1998

F-59

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------ MARCH 31,
1996 1997 1998
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 141 $ 226 $ 85
Accounts receivable:
Trade, (net of allowance for doubtful accounts of $134 and $106 in
1996 and 1997, respectively)...................................... 4,920 6,408 4,862
Retainage........................................................... 350 518 609
Other receivables................................................... 64 191 56
Costs and estimated earnings in excess of billings on uncompleted
contracts.............................................................. 399 409 499
Inventories.............................................................. 329 339 349
Prepaid expenses and other current assets................................ 69 48 160
Deferred income taxes.................................................... 78 104 356
------- ------- -----------
Total current assets........................................... 6,350 8,243 6,976
Property and equipment, net................................................... 2,274 3,112 3,140
Goodwill...................................................................... 2,239 2,179 2,164
Other assets.................................................................. 30 44 43
------- ------- -----------
Total assets................................................... $10,893 $13,578 $12,323
------- ------- -----------
------- ------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit........................................................... $ 500 $ 900 $ 800
Current portion of long-term debt........................................ 431 494 513
Current portion of obligations under capital lease....................... 26 147 141
Accounts payable and accrued expenses.................................... 3,497 4,131 2,830
Billings in excess of costs and estimated earnings on uncompleted
contracts.............................................................. 483 973 1,070
Income taxes payable..................................................... 76 171 111
------- ------- -----------
Total current liabilities...................................... 5,013 6,816 5,465
Long-term debt, net of current portion........................................ 2,231 2,118 2,081
Obligations under capital lease, net of current portion....................... 107 311 278
Deferred income taxes......................................................... 85 89 74
Other long-term liabilities................................................... 1,219 1,137 1,111
------- ------- -----------
Total liabilities.............................................. 8,655 10,471 9,009
------- ------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock, $10 par value -- 5,000 shares authorized and 620 and 559
shares issued and outstanding at December 31, 1997 and 1996,
respectively........................................................... 6 7 7
Additional paid-in capital............................................... 1,542 2,206 2,206
Retained earnings........................................................ 690 894 1,124
Less: Treasury stock, 7 shares in 1998, at cost.......................... -- -- (23)
------- ------- -----------
Total stockholders' equity..................................... 2,238 3,107 3,314
------- ------- -----------
Total liabilities and stockholders' equity..................... $10,893 $13,578 $12,323
------- ------- -----------
------- ------- -----------
</TABLE>

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

F-60

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
------------------ ----------------
1996 1997 1997 1998
------- ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues................................................................ $30,457 $39,357 $8,349 $7,812
Cost of revenues........................................................ 23,407 31,217 6,213 5,759
------- ------- ------ ------
Gross profit....................................................... 7,050 8,140 2,136 2,053
Selling, general and administrative expenses............................ 5,448 6,502 1,314 1,557
Employee stock compensation............................................. -- 795 -- --
------- ------- ------ ------
Income from operations............................................. 1,602 843 822 496
Other expense:
Interest expense................................................... 441 451 117 99
Other.............................................................. 9 2 (1) 3
------- ------- ------ ------
Income before provision for income taxes................................ 1,152 390 706 394
Provision for income taxes.............................................. 485 186 337 164
------- ------- ------ ------
Net income.............................................................. $ 667 $ 204 $ 369 $ 230
------- ------- ------ ------
------- ------- ------ ------
</TABLE>

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

F-61

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
PAID-IN RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
------ ------ ---------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995.................... 559 $ 6 $1,542 $ 23 $-- $ 1,571
Net income............................... -- -- -- 667 -- 667
------ ------ ---------- -------- -------- -------------
Balance, December 31, 1996.................... 559 6 1,542 690 -- 2,238
Stock issued to employees................ 61 1 664 -- -- 665
Net income............................... -- -- -- 204 -- 204
------ ------ ---------- -------- -------- -------------
Balance, December 31, 1997.................... 620 7 2,206 894 -- 3,107
Purchase of treasury stock (unaudited)... -- -- -- -- (23) (23)
Net income (unaudited)................... -- -- -- 230 -- 230
------ ------ ---------- -------- -------- -------------
Balance, March 31, 1998 (unaudited)........... 620 $ 7 $2,206 $1,124 $(23) $ 3,314
------ ------ ---------- -------- -------- -------------
------ ------ ---------- -------- -------- -------------
</TABLE>

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

F-62

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
------------------ ----------------
1996 1997 1997 1998
------- ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income........................................................... $ 667 $ 204 $ 369 $ 230
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization...................................... 487 629 129 178
Stock compensation................................................. -- 664 -- --
Gain on sale of property and equipment............................. (3) (7) -- --
Changes in operating assets and liabilities:
Accounts receivable............................................. (2,075) (1,488) (463) 1,546
Retainage....................................................... (135) (168) 72 (91)
Other receivables............................................... 7 (127) (25) 135
Inventories..................................................... 49 (10) -- (10)
Costs and estimated earnings in excess of billings on
uncompleted contracts......................................... 70 (10) (86) (90)
Prepaid expenses and other current assets....................... 24 21 1 (112)
Other assets.................................................... 31 (14) (13) 1
Accounts payable and accrued expenses........................... 1,174 634 20 (1,301)
Billings in excess of costs and estimated earnings on
uncompleted contracts......................................... 109 490 (38) 97
Income taxes payable............................................ 281 95 168 (60)
Other long-term liabilities..................................... (74) (82) 137 (26)
Deferred income taxes........................................... 5 (22) (1) (253)
------- ------- ------ ------
Net cash provided by operating activities.................. 617 809 270 244
------- ------- ------ ------
Cash flows used in investing activities:
Proceeds from sale of property and equipment......................... 3 11 32 1
Purchases of property and equipment.................................. (317) (783) -- (88)
------- ------- ------ ------
Net cash (used in) provided by investing activities........ (314) (772) 32 (87)
------- ------- ------ ------
Cash flows used in financing activities:
Borrowings (payments) from line of credit............................ 200 400 (200) (100)
Borrowings of long-term debt......................................... 170 200 -- --
Payments of long-term debt........................................... (587) (552) (238) (175)
Acquisition of treasury stock........................................ -- -- -- (23)
------- ------- ------ ------
Net cash (used in) provided by financing activities........ (217) 48 (438) (298)
------- ------- ------ ------
Net increase (decrease) in cash and cash equivalents...................... 86 85 (136) (141)
Cash and cash equivalents, beginning of period............................ 55 141 141 226
------- ------- ------ ------
Cash and cash equivalents, end of period.................................. $ 141 $ 226 $ 5 $ 85
------- ------- ------ ------
------- ------- ------ ------
Supplemental disclosure of cash flow information:
Cash paid for interest............................................... $ 361 $ 343 $ 108 $ 99
Cash paid for income taxes........................................... $ 204 $ 300 $ 125 $ 220
</TABLE>

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

F-63

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

New England Mechanical Services, Inc. ('NEMSI'), founded in 1966, primarily
specializes in performing design and build projects at manufacturing and
research facilities and on-site maintenance work at nuclear power plants.

NEMSI and its stockholders intend to enter into a definitive agreement with
Enfinity Corporation ('Enfinity'), pursuant to which all outstanding shares of
NEMSI's common stock will be exchanged for cash and shares of Enfinity common
stock concurrently with the consummation of an initial public offering (the
'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

NEMSI considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market using the
first-in, first-out ('FIFO') method.

PROPERTY AND EQUIPMENT

REVENUE RECOGNITION

NEMSI recognizes revenues when services are performed except when work is
being performed under a construction contract. Revenues from construction
contracts are recognized on the percentage-of completion method measured by the
percentage of costs incurred to total estimated costs for each contract.
Contract costs include all direct material, subcontracts, and labor costs and
those indirect costs related to contract performance such as indirect labor,
supplies and tools, repairs and depreciation costs. Provisions for the total
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in job performance, job conditions, estimated
profitability and final contract settlements may result in revisions to costs
and income and their effects are recognized in the period in which the revisions
are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts will be due upon completion of the
contracts and acceptance by the customer. Based on NEMSI's experience with
similar contracts in recent years, the retention balance will be collected in
the upcoming year.

WARRANTY COSTS

NEMSI warrants equipment, labor, and materials for the first year after
installation on new air conditioning and heating systems. NEMSI generally
warrants labor for 30 days after servicing of existing air conditioning and
heating systems. A reserve for warranty costs is recorded as part of the cost to
complete each individual job.

F-64

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

GOODWILL

Goodwill, representing the difference between total purchase price and the
fair value of assets and liabilities at the date of acquisition (see Note 10),
is being amortized on a straight-line basis over forty years. Accumulated
amortization is $165,000 and $225,000 at December 31, 1997 and 1996,
respectively.

INCOME TAXES

NEMSI records deferred tax assets and liabilities based upon the
differences between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes (see Note 9).

USE OF ESTIMATES

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject NEMSI to concentrations of
credit risk consist principally of trade accounts receivable. NEMSI does not
believe that it is subject to any unusual credit risk beyond the normal credit
risk attendant in its business.

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, NEMSI adopted Statement of Financial Accounting
Standards No. 121, 'Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of.' Accordingly, in the event that facts and
circumstances indicate that property and equipment or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset are compared to the asset's carrying amount to determine if a write-down
to market value is necessary. Adoption of this standard did not have a material
effect on the financial position or results of operations of NEMSI.

In June 1998, the Financial Accounting Standards Board ('FASB') issued SFAS
No. 133, 'Accounting for Derivative Instruments and Hedging Activities.' (SFAS
No. 133 establishes a new model for accounting for derivatives and hedging
activities and supercedes and amends a number of existing standards. SFAS No.
133 is effective for fiscal years beginning after June 15, 1999, but earlier
adoption is permitted. Upon initial application, all derivatives are required to
be recognized in the statement of financial position as either assets or
liabilities and measured at fair value. Recognition of changes in fair value
depends on whether the derivative is designated and qualifies as a hedge, and
the type of hedging relationship that exists. The Company does not currently,
nor does it expect to, hold any derivative instruments or participate in any
hedging activities.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month periods ended March
31, 1997 and 1998 has been prepared from the unaudited financial records of
NEMSI and in the opinion of management reflects all adjustments, consisting only
of normal recurring items, necessary for a fair presentation of the financial
position and results of operations and of cash flows for the interim periods.

F-65

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3 -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts activity is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Balance, beginning of year.............................................. $ 92 $134
Charges to costs and expenses........................................... 136 (2)
Write-offs.............................................................. (94) (26)
---- ----
Balance, end of year.................................................... $134 $106
---- ----
---- ----
</TABLE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES ------------------
IN YEARS 1996 1997
------------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Land and building................................................... 30 years $ 1,327 $ 1,386
Transportation equipment............................................ 5 years 2,106 2,708
Machinery and equipment............................................. 5 years 596 686
Leasehold improvements.............................................. 20 years 11 11
Furniture and fixtures.............................................. 5 years 370 911
------- -------
4,410 5,702
Less -- Accumulated depreciation and amortization................... (2,136) (2,590)
------- -------
Property and equipment, net.................................... $ 2,274 $ 3,112
------- -------
------- -------
</TABLE>

Depreciation expense is approximately $569,000 and $427,000 for the years
ended 1997 and 1996, respectively.

NOTE 5 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

The following is a summary of costs, earnings and billings on uncompleted
contracts:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1996 1997
------- --------
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in progress........................................... $ 6,681 $ 9,835
Estimated earnings, net of losses................................................. 914 1,134
------- --------
7,595 10,969
Less -- Progress billings......................................................... (7,679) (11,533)
------- --------
$ (84) $ (564)
------- --------
------- --------
Costs and estimated earnings in excess of billings on uncompleted contracts....... $ 399 $ 409
Billings in excess of costs and estimated earnings on uncompleted contracts....... (483) (973)
------- --------
$ (84) $ (564)
------- --------
------- --------
</TABLE>

F-66

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
(IN THOUSANDS)
<S> <C> <C>
Accounts payable, trade............................................................ $2,305 $3,048
Accrued compensation and benefits.................................................. 685 685
Other accrued expenses............................................................. 432 316
Consulting and non-compete agreements.............................................. 75 82
------ ------
$3,497 $4,131
------ ------
------ ------
</TABLE>

NOTE 6 -- LONG-TERM DEBT

A summary of senior long-term debt follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Commercial term loans, payable in monthly principal installments of $20,100 plus
interest at prime plus 1.0% to 1.5%, maturing April 2003, secured by substantially
all assets of NEMSI................................................................ $1,060 $1,081
Various notes payable, collateralized by vehicles, interest rates ranging from 6.3%
to 10.0%, payable in various installments through July 2002........................ 539 515
------ ------
1,599 1,596
Less -- Current maturities........................................................... (384) (443)
------ ------
$1,215 $1,153
------ ------
------ ------
</TABLE>

These loans contain certain restrictive covenants, including a restriction
on the payment of dividends.

Subordinated long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Note payable to former stockholder, monthly principal and interest payments of
$13,000 through March 2004, with a final payment of $586,000 due April 2004.
Interest is calculated at prime plus 1.5%, with a maximum rate of 12.0% and a
minimum of 6.0%.................................................................... $1,063 $1,016
Less -- Current maturities........................................................... (47) (51)
------ ------
$1,016 $ 965
------ ------
------ ------
</TABLE>

The above debt is subordinated to the senior long-term debt described
above. See Note 10 for other commitments to the former stockholder.

NEMSI has available a $1,000,000 line of credit with a bank. The balance
outstanding as of December 31, 1997 and 1996 totaled $900,000 and $500,000,
respectively. The line of credit expires July 31, 1998 and bears interest at the
prime rate in effect during the borrowing term plus 1.0%, or 9.3% at December
31, 1997. The line of credit is secured by substantially all assets of NEMSI.

F-67

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Aggregate maturities of senior long-term debt and subordinated long-term
debt for the next five years are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
---------------
<S> <C>
1998.................................................................... $ 494
1999.................................................................... 478
2000.................................................................... 308
2001.................................................................... 189
2002.................................................................... 116
------
Total....................................................... $1,585
------
------
</TABLE>

NOTE 7 -- EQUITY

During 1997, 61 shares of common stock were issued to various employees of
NEMSI. The shares had a fair value of $665,000 at the date of grant, which was
recorded as compensation expense and an increase to stockholders' equity.

NOTE 8 -- LEASES

OPERATING LEASES

NEMSI has several operating lease commitments related to satellite offices
that have various expiration dates through August 2002. Approximate future
minimum lease commitments under these noncancelable leases are as follows (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
---------------
<S> <C>
1998..................................................................... $ 79
1999..................................................................... 70
2000..................................................................... 21
2001..................................................................... 22
2002..................................................................... 13
----
Total........................................................ $205
----
----
</TABLE>

Rent expense under these leases totaled approximately $113,000 and $78,000
for the years ended December 31, 1997 and 1996, respectively.

CAPITAL LEASES

The following is an analysis for leased property under capital leases by
major class:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES -----------------
IN YEARS 1996 1997
------------ ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Class of property:
Vehicles....................................................... 4-5 years $167 $573
Less -- Accumulated depreciation............................... 27 94
---- ----
Leased property, net...................................... $140 $479
---- ----
---- ----
</TABLE>

Depreciation expense related to leased property under capital leases
totaled approximately $67,000 and $23,000 for the years ended December 31, 1997
and 1996, respectively, and has been included in depreciation and amortization
expense in the accompanying financial statements.

F-68

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following is a schedule by year of future minimum lease payments under
capital leases, together with the present value of the net minimum lease
payments at December 31, 1997 (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- ----------------------------------------------------------------------------
<S> <C>
1998..................................................................... $186
1999..................................................................... 148
2000..................................................................... 131
2001..................................................................... 72
----
Total minimum lease payments............................................. 537
Less -- Amount representing interest..................................... 79
----
$458
----
----
</TABLE>

NOTE 9 -- INCOME TAXES

The major components of NEMSI's provision for income taxes for the years
ended December 31, 1996 and 1997 are summarized below:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Current:
Federal.................................................. $378 $154
State.................................................... 139 54
---- ----
517 208
Deferred...................................................... (32) (22)
---- ----
Total provision for income taxes......................... $485 $186
---- ----
---- ----
</TABLE>

A reconciliation of statutory tax rates to effective tax rate for the years
ended December 31, 1996 and 1997 is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1996 1997
------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. federal statutory rate.................................................... $382 34.0% $133 34.0%
Increase in rate resulting from:
State taxes, net of federal benefit....................................... 85 7.6 31 7.9
Non-deductible expenses, increase in cash surrender value of life
insurance and other..................................................... 18 1.6 22 5.7
---- ---- ---- ----
Effective rate............................................................ $485 43.2% $186 47.6%
---- ---- ---- ----
---- ---- ---- ----
</TABLE>

F-69

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The components of the net deferred tax asset (liability) as of December 31,
1996 and 1997 are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Accrued vacation compensation............................. $34 $ 46
Receivables............................................... 19 8
Other assets.............................................. 25 50
---- ----
Total deferred tax asset............................. 78 104
Property and equipment, net.................................... (85) (89)
---- ----
Net deferred tax asset (liability)............................. $(7) $ 15
---- ----
---- ----
</TABLE>

The actual tax provision differs from amounts obtained by applying the
statutory federal income tax rate to income before taxes primarily due to state
income taxes and certain non-deductible expenses.

NOTE 10 -- RELATED-PARTY TRANSACTIONS

On April 15, 1994, NEMSI's former majority stockholder and spouse divested
themselves of all of their stock in NEMSI. A portion of their stock (425 shares)
was purchased by the remaining stockholder and the remainder (425 shares) was
purchased by NEMSI with a note payable (see Note 6). In addition, NEMSI
purchased its headquarters from the former stockholder, which had previously
been leased by the stockholder to NEMSI. NEMSI also entered into consulting and
non-compete agreements with the former stockholders through 2004. As a result of
this change in ownership, $2,303,000 of goodwill was recorded and is being
amortized over 40 years. Remaining commitments under the consulting and
non-compete agreements are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
---------------
<S> <C>
1998.................................................................... $ 192
1999.................................................................... 192
2000.................................................................... 192
2001.................................................................... 192
2002 and thereafter..................................................... 1,072
------
Total....................................................... $1,840
------
------
</TABLE>

NOTE 11 -- EMPLOYEE BENEFIT PLAN

NEMSI maintains a profit sharing plan covering all of its employees in
which employees may elect voluntary contributions on a pretax and/or after-tax
basis. Employer contributions are determined annually at the discretion of the
board of directors. Employer contributions totaled approximately $213,000 and
$250,000 for the years ended December 31, 1997 and 1996.

NOTE 12 -- FINANCIAL INSTRUMENTS

NEMSI's financial instruments consist of cash and cash equivalents, trade
accounts receivable, a line of credit, notes payable and debt. The Company
believes that the carrying value of these instruments on the accompanying
balance sheet approximates their fair value due to their nature.

F-70

<PAGE>

NEW ENGLAND MECHANICAL SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13 -- COMMITMENTS AND CONTINGENCIES

LITIGATION

NEMSI is involved in legal actions arising in the ordinary course of
business. Management does not believe the outcome of such legal actions will
have a material adverse effect on NEMSI's financial position or results of
operations.

INSURANCE

NEMSI carries a broad range of insurance coverage, including business auto
liability, general liability and an umbrella policy. NEMSI has not incurred
significant claims or losses on any of these insurance policies.

NEMSI is self-insured for medical claims up to $75,000 per year per covered
individual. Claims in excess of these amounts are covered by a stop-loss policy.
NEMSI is also protected by an aggregate stop loss policy which caps annual claim
exposure at 125.0% of the estimated amount. The aggregate stop loss amount is
$775,000 for fiscal 1997.

NOTE 14 -- SUBSEQUENT EVENTS (UNAUDITED)

NEMSI and its stockholders have entered into a definitive agreement with
Enfinity pursuant to which NEMSI will merge with a wholly owned subsidiary of
Enfinity. All outstanding shares of NEMSI will be exchanged for cash and common
stock of Enfinity concurrently with the consummation of the initial public
offering of the common stock of Enfinity.

F-71

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
LEE COMPANY

In our opinion, the accompanying balance sheet and the related statements
of operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Lee Company ('Lee') at December 31,
1996 and 1997, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
These financial statements are the responsibility of Lee's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICEWATERHOUSECOOPERS LLP

Nashville, Tennessee
April 3, 1998

F-72

<PAGE>

LEE COMPANY
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
---------------- MARCH 31,
1996 1997 1998
------ ------- ---------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................ $ 39 $ 74 $ 126
Accounts receivable:
Trade accounts receivable, net of allowance of $200 in 1996 and 1997........ 3,602 6,628 6,140
Retainage................................................................... 771 1,140 1,333
Officer and employee accounts receivable.................................... 179 134 141
Current portion of long-term note receivable from officer................... 100 100 100
Other current receivables................................................... -- 177 133
Costs and estimated earnings in excess of billings on uncompleted contracts...... 1,024 1,281 1,848
Inventories...................................................................... 101 109 116
Prepaid expenses and other current assets........................................ 85 100 118
Deferred income taxes............................................................ 430 523 523
Income taxes refundable.......................................................... 69 -- --
------ ------- ---------
Total current assets................................................... 6,400 10,266 10,578
Property and equipment, net........................................................... 1,647 3,597 3,567
Other assets.......................................................................... 653 719 709
------ ------- ---------
Total assets........................................................... $8,700 $14,582 $14,854
------ ------- ---------
------ ------- ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit................................................................... $ -- $ 1,197 $ 283
Current portion of obligations under capital lease............................... 213 27 38
Current portion of long-term debt................................................ 100 100 100
Accounts payable................................................................. 1,425 2,189 2,782
Accrued expenses................................................................. 1,221 1,611 1,655
Billings in excess of costs and estimated earnings on uncompleted contracts...... 1,152 1,931 1,221
Unearned revenue................................................................. 313 388 349
Income taxes payable............................................................. 26 120 601
------ ------- ---------
Total current liabilities.............................................. 4,450 7,563 7,029
Obligations under capital lease, net of current portion............................... 997 2,667 2,648
Long-term debt, net of current portion................................................ 175 75 50
------ ------- ---------
Total liabilities...................................................... 5,622 10,305 9,727
------ ------- ---------
Commitments and contingencies (Notes 7 and 12)
Stockholders' equity:
Common stock, no par value; 500,000 shares authorized; 500,000 and 383,333 shares
issued and outstanding at December 31, 1996 and 1997, respectively.............. 50 38 38
Additional paid-in capital....................................................... 50 38 38
Net unrealized gain on securities available for sale............................. -- 134 135
Retained earnings................................................................ 3,945 4,067 4,916
Less -- Treasury stock........................................................... (967) -- --
------ ------- ---------
Total stockholders' equity............................................. 3,078 4,277 5,127
------ ------- ---------
Total liabilities and stockholders' equity............................. $8,700 $14,582 $14,854
------ ------- ---------
------ ------- ---------
</TABLE>

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

F-73

<PAGE>

LEE COMPANY
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
------------------ -----------------
1996 1997 1997 1998
------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues............................................................... $34,639 $39,681 $6,682 $12,806
Cost of revenues....................................................... 26,541 30,316 4,914 9,416
------- ------- ------ -------
Gross profit...................................................... 8,098 9,365 1,768 3,390
Selling, general and administrative expenses........................... 6,663 7,325 1,328 1,888
------- ------- ------ -------
Income from operations............................................ 1,435 2,040 440 1,502
Other (income) expense:
Interest expense.................................................. 406 521 120 91
Interest income................................................... (75) (44) (13) (13)
Gain on sale of assets............................................ -- (182) (60) (4)
Other............................................................. (5) (5) (2) --
------- ------- ------ -------
Income before provision for income taxes............................... 1,109 1,750 395 1,428
Provision for income taxes............................................. 442 685 154 579
------- ------- ------ -------
Net income............................................................. $ 667 $ 1,065 $ 241 $ 849
------- ------- ------ -------
------- ------- ------ -------
</TABLE>

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

F-74

<PAGE>

LEE COMPANY
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
NET
UNREALIZED GAIN
COMMON STOCK ADDITIONAL ON SECURITIES TOTAL
----------------- PAID-IN AVAILABLE RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT CAPITAL FOR SALE EARNINGS STOCK EQUITY
-------- ------ ---------- --------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995............... 500,000 $ 50 $ 50 $-- $3,278 $ (967) $ 2,411
Net income............................ -- -- -- -- 667 -- 667
-------- ------ ----- ------- -------- -------- -------------
Balance at December 31, 1996............... 500,000 50 50 -- 3,945 (967) 3,078
Comprehensive income
Net income....................... -- -- -- -- 1,065 -- 1,065
Net unrealized gain on securities
available for sale............. -- -- -- 134 -- -- 134
-------- ------ ----- ------- -------- -------- -------------
Comprehensive income, subtotal... -- -- -- -- -- -- 1,199
-------- ------ ----- ------- -------- -------- -------------
Retirement of treasury stock.......... (116,667) (12) (12) -- (943) 967 --
-------- ------ ----- ------- -------- -------- -------------
Balance at December 31, 1997............... 383,333 38 38 134 4,067 -- 4,277
Comprehensive income
Net income (unaudited)........... -- -- -- -- 849 -- 849
Net unrealized gain on securities
available for sale
(unaudited).................... -- -- -- 1 -- -- 1
-------- ------ ----- ------- -------- -------- -------------
Comprehensive income, subtotal... -- -- -- -- -- -- 850
-------- ------ ----- ------- -------- -------- -------------
Balance at March 31, 1998 (unaudited)...... 383,333 $ 38 $ 38 $ 135 $4,916 $-- $ 5,127
-------- ------ ----- ------- -------- -------- -------------
-------- ------ ----- ------- -------- -------- -------------
</TABLE>

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

F-75

<PAGE>

LEE COMPANY
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED
DECEMBER 31, MARCH 31,
------------------ --------------
1996 1997 1997 1998
------- ------- ----- -----
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................................................ $ 667 $ 1,065 $ 241 $ 849
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation expense............................................. 426 517 123 88
Net realized gain on sale of investments......................... -- (176) (60) --
Net gain on disposal of property and equipment................... -- (77) -- (1)
Deferred income taxes............................................ (116) (61) 75 --
Changes in assets and liabilities:
Trade and retainage accounts receivable..................... 1,263 (3,395) (30) 295
Officer and employee accounts and note receivable........... 151 149 40 4
Other receivables........................................... 5 (451) -- 44
Inventories................................................. 30 (8) (4) (7)
Costs and estimated earnings in excess of billings on
uncompleted contracts..................................... (297) (257) 333 (567)
Prepaid expenses and other assets........................... (26) (40) 70 (18)
Accounts payable............................................ (478) 764 169 593
Accrued expenses............................................ (248) 390 (435) 44
Unearned revenue............................................ 191 75 4 (39)
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... 42 779 (617) (710)
Income taxes payable........................................ (546) 163 53 481
------- ------- ----- -----
Net cash provided by (used in) operating activities.............. 1,064 (563) (38) 1,056
------- ------- ----- -----
Cash flows from investing activities:
Additions to property and equipment................................... (170) (3,453) (762) (59)
Equipment sale proceeds............................................... -- 2,745 -- 2
Proceeds on sale of investments....................................... -- 422 80 --
Purchases of investments.............................................. (25) (25) (25) --
Investment principal distributions.................................... 10 10 -- --
------- ------- ----- -----
Net cash used in investing activities....................... (185) (301) (707) (57)
Cash flows from financing activities:
Net activity on line of credit........................................ (867) 1,197 828 (914)
Proceeds from long-term debt and sale of building..................... -- 1,900 -- --
Repayments of long-term debt and capital leases....................... (250) (2,198) (82) (33)
------- ------- ----- -----
Net cash (used in) provided by financing activities......... (1,117) 899 746 (947)
------- ------- ----- -----
Net (decrease) increase in cash and cash equivalents....................... (238) 35 1 52
Cash and cash equivalents, beginning of period............................. 277 39 39 74
------- ------- ----- -----
Cash and cash equivalents, end of period................................... $ 39 $ 74 $ 40 $ 126
------- ------- ----- -----
------- ------- ----- -----
Supplemental disclosure of cash flow information:
Cash paid for interest................................................ $ 406 $ 519 $ 8 $ 91
Cash paid for income taxes............................................ $ 1,102 $ 675 $ 51 $ 98
</TABLE>

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

F-76

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Lee Company ('Lee'), founded in 1944, specializes in the design,
engineering and installation of energy and indoor environmental systems.

Lee and its stockholders intend to enter into a definitive agreement with
Enfinity Corporation ('Enfinity'), pursuant to which all outstanding shares of
Lee's common stock will be exchanged for cash and shares of Enfinity common
stock concurrently with the consummation of an initial public offering (the
'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Lee considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of supplies, parts and equipment held for use in the
ordinary course of business and are stated at the lower of cost (average) or
market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is generally
computed using the double-declining balance accelerated method over the
estimated useful lives of purchased property and equipment. For vehicles under
capital lease, depreciation is calculated using straight-line depreciation over
the lease term. Leasehold improvements are capitalized and amortized over the
lesser of the life of the lease or the estimated useful life of the asset.

LONG-TERM INVESTMENTS

Long-term investments consist of investments in property, certain
privately-held entities with no readily available market prices and marketable
equity securities. The investments in property and privately-held entities are
accounted for under the cost method. The marketable equity securities are
classified as available for sale and recorded at market value of $179,000 at
December 31, 1997. Changes in unrealized gains and losses are not recognized in
earnings, but are reported as a separate component of stockholders' equity. No
such marketable equity securities were held at December 31, 1996.

TREASURY STOCK

Treasury stock is recorded at cost. In 1997, Lee retired its treasury
stock.

REVENUE RECOGNITION

Lee recognizes revenue when services are performed except when work is
being performed under a construction contract. Revenues from construction
contracts are recognized on the percentage-of-completion method measured by the
costs incurred as a percentage of the total estimated costs for each contract.
Contract costs include all direct material, subcontracts and labor costs and
those indirect costs related to contract performance such as indirect labor,
supplies, tools, repairs and depreciation costs.

F-77

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Provisions for the total estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions, estimated profitability and final contract settlements may result in
revisions to costs and income and their effects are recognized in the period in
which the revisions are determined. The reserve for estimated losses on
uncompleted contracts was $13,321 at December 31, 1997. No reserve was recorded
at December 31, 1996.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts are due upon completion of the contracts
and acceptance by the customer. Based on Lee's experience with similar contracts
in recent years, the retainage is expected to be collected in the upcoming
fiscal year.

WARRANTY COSTS

Lee warrants labor for the first year after installation on new air
conditioning and heating systems. A reserve for warranty costs is recorded as
part of the cost to complete each individual job.

INCOME TAXES

Deferred income taxes reflect the tax consequences of temporary differences
between the assets and liabilities recognized for financial reporting purposes
and such amounts recognized for tax purposes. The principal temporary
differences of Lee relate to allowance for doubtful accounts, unearned revenue,
vacation accrual, warranty reserve and differences arising from capital lease
accounting.

USE OF ESTIMATES

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject Lee to concentrations of
credit risk consist principally of trade accounts receivable and retainage. Lee
follows the practice of filing statutory liens on construction projects where
collection problems are anticipated. The liens serve as collateral for trade
accounts receivable. Lee does not believe that it is subject to any unusual
credit risk beyond the normal credit risk inherent in its business.

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, Lee adopted Statement of Financial Accounting
Standards No. 121, 'Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of.' Accordingly, in the event that facts and
circumstances indicate that property and equipment or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset are compared to the asset's carrying amount to determine if a write-down
to market value is necessary. Adoption of this standard did not have a material
effect on the financial position or results of operations of Lee.

F-78

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

statement of financial position as either assets or liabilities and measured at
fair value. Recognition of changes in fair value depends on whether the
derivative is designated and qualifies as a hedge, and the type of hedging
relationship that exists. The Company does not currently, nor does it expect to,
hold any derivative instruments or participate in any hedging activities.

CASH FLOW INFORMATION

Individual amounts comprising non-cash transactions during 1996 and 1997
were as follows:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------
1996 1997
----- -------
(IN THOUSANDS)
<S> <C> <C>
Capital lease on vehicle purchases................................................ $(426) $ (416)
Capital lease of building......................................................... -- (2,700)
Disposal of vehicles under capital lease obligation............................... -- 1,433
Receivable on sale of investments................................................. -- 70
Exchange of investments........................................................... -- 45
Net unrealized appreciation in equity securities.................................. -- 134
----- -------
Total non-cash transactions.................................................. $(426) $(1,434)
----- -------
----- -------
</TABLE>

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month periods ended March
31, 1997 and 1998 has been prepared from the unaudited financial records of Lee
and in the opinion of management reflects
all adjustments, consisting only of normal recurring items, necessary for a fair
presentation of the financial position and results of operations and of cash
flows for the interim periods.

NOTE 3 -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts activity is as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Balance, beginning of year........................................................... $200 $200
Charges to costs and expenses........................................................ 35 15
Write-offs........................................................................... (35) (15)
---- ----
$200 $200
---- ----
---- ----
</TABLE>

F-79

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIVES -----------------
IN YEARS 1996 1997
------------ ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Land............................................................... $ 10 $ 427
Building under capital lease....................................... 20 years -- 2,273
Leasehold improvements............................................. Lease term 323 468
Vehicles and equipment............................................. 5-10 years 811 843
Furniture, fixtures and office equipment........................... 5-10 years 652 539
Vehicles under capital lease....................................... Lease term 1,425 --
Construction-in-progress........................................... 30 --
------- ------
Total property and equipment.................................. 3,251 4,550
Less -- Accumulated depreciation and amortization.................. (1,604) (953)
------- ------
Property and equipment, net................................... $ 1,647 $3,597
------- ------
------- ------
</TABLE>

Depreciation expense was approximately $426,000 and $517,000 for the years
ended December 31, 1996 and 1997, respectively.

NOTE 5 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Installation contracts in progress are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in progress......................................... $ 10,932 $ 19,220
Estimated earnings, net of losses............................................... 3,631 4,792
-------- --------
14,563 24,012
Less -- Billings to date........................................................ (14,691) (24,662)
-------- --------
$ (128) $ (650)
-------- --------
-------- --------
Costs and estimated earnings in excess of billings on uncompleted contracts..... $ 1,024 $ 1,281
Billings in excess of costs and estimated earnings on uncompleted contracts..... (1,152) (1,931)
-------- --------
$ (128) $ (650)
-------- --------
-------- --------
</TABLE>

F-80

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Vacation accrual..................................................................... $ 341 $ 443
Salaries, wages and commissions...................................................... 275 350
Warranty reserve..................................................................... 222 247
Bonuses.............................................................................. 160 179
401(k) matching contributions........................................................ 101 115
General insurance reserve............................................................ 31 114
Health insurance reserve............................................................. 41 100
Other taxes payable.................................................................. 31 42
Other................................................................................ 19 21
------ ------
Total accrued expenses.......................................................... $1,221 $1,611
------ ------
------ ------
</TABLE>

NOTE 6 -- LINE OF CREDIT AND LONG-TERM DEBT

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1997
----- ------
(IN THOUSANDS)
<S> <C> <C>
Line of credit with First American National Bank, limit of $2,200,000 at December 31,
1997. Interest at variable rate (8.5% at December 31, 1997), expiring December 31,
1998, renewable annually. Secured by accounts receivable and inventory.............. $-- $1,197
----- ------
----- ------
Long-term debt:
Note payable to First American National Bank with offsetting note receivable from
an officer of Lee for purchase of stock from another stockholder. Interest at
variable rate (8.5% at December 31, 1997). Secured by property.................. $ 275 $ 175
Less -- Current portion............................................................... (100) (100)
----- ------
$ 175 $ 75
----- ------
----- ------
</TABLE>

Long-term debt of $75,000 at December 31, 1997 will mature in 1999.

As a condition of the line of credit agreement, Lee is required to maintain
certain financial and operating measurements, including minimum working capital
and net worth levels. Lee was in compliance with all covenants for the years
ended December 31, 1996 and 1997.

NOTE 7 -- LEASE OBLIGATIONS

The majority of Lee's vehicles used in operations were leased through a
leasing company, wholly-owned by stockholders of the Company, with
non-cancelable lease terms of five years. The leases qualified as capital leases
in accordance with Statement of Financial Accounting Standards No. 13
'Accounting for Leases' (SFAS 13). Accordingly, both the equipment and
obligation are reflected in Lee's balance sheet at December 31, 1996. Interest
rates implicit in the leases ranged from 25.0% to 45.0%. The net book value of
leased vehicles included in property and equipment was approximately $1,043,000
at December 31, 1996.

During 1997, Lee canceled its vehicle capital leases with the partnership
of stockholders and entered into a new master lease agreement for the same
vehicles with a third party. Under the terms of the new leasing agreement, the
leases qualify as operating leases in accordance with SFAS 13. The

F-81

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

minimum lease term for these vehicles is one year. Rent expense was
approximately $111,000 for the year ended December 31, 1997.

Lee also leased its corporate headquarters and operating facility under an
operating lease with rent expense of approximately $184,000 for the years ended
December 31, 1996 and December 31, 1997, respectively. In October 1997, Lee
relocated its corporate headquarters and operations to a facility purchased
under capital lease, as described further in Note 9.

During 1997, Lee entered a master lease agreement for certain computer
equipment, software and furniture under operating lease with lease commitments
of three to four years for each item. The lease commitments are included in the
schedule below.

The following is a schedule of future minimum lease payments at December
31, 1997 under capital and operating leases:

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31, CAPITAL OPERATING
---------------- ------- ---------
(IN THOUSANDS)
<S> <C> <C>
1998........................................................................... $ 350 $ 750
1999........................................................................... 350 132
2000........................................................................... 350 128
2001........................................................................... 350 56
2002........................................................................... 350 --
Thereafter..................................................................... 5,191 --
------- ---------
6,941 $ 1,066
---------
---------
Less -- Implied interest....................................................... (4,247)
-------
Present value of net minimum lease payments.................................... 2,694
Less -- Current portion of capital lease obligation............................ (27)
-------
Long-term capital lease obligation............................................. $ 2,667
-------
-------
</TABLE>

NOTE 8 -- INCOME TAXES

The provisions for income taxes for the periods are summarized as follows:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Current:
Federal......................................................................... $392 $616
State........................................................................... 73 130
---- ----
465 746
Deferred:
Federal......................................................................... (19) (50)
State........................................................................... (4) (11)
---- ----
(23) (61)
---- ----
Total provision for income taxes........................................... $442 $685
---- ----
---- ----
</TABLE>

F-82

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Reconciliations of statutory tax rates to effective tax rates are as
follows:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------------------
1996 1997
------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. Federal statutory rate............................................ $377 34.0% $595 34.0%
Increase in rate resulting from:
State taxes, net of federal benefit............................... 46 4.1 79 4.5
Nondeductible expenses............................................ 19 1.7 11 0.6
---- ---- ---- ----
Effective rate............................................... $442 39.8% $685 39.1%
---- ---- ---- ----
---- ---- ---- ----
</TABLE>

The components of deferred tax assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1996 1997
---- ----
(IN THOUSANDS)
<S> <C> <C>
Current:
Vacation accrual................................................................ $130 $168
Warranty reserve................................................................ 84 94
Allowance for doubtful accounts................................................. 76 76
Unearned revenue................................................................ 118 147
Health insurance reserve........................................................ 16 38
Charitable contributions carryover.............................................. 6 --
---- ----
Total current.............................................................. 430 523
---- ----
Long-term:
Capital leases.................................................................. 38 6
---- ----
Total long-term............................................................ 38 6
---- ----
Total deferred tax assets.................................................. $468 $529
---- ----
---- ----
</TABLE>

NOTE 9 -- RELATED-PARTY TRANSACTIONS

Lee leased its corporate and operating facilities through October 1997 from
a partnership which is wholly-owned by stockholders of Lee. The lease agreement
contained a commitment to lease through September 2000; however, based on Lee's
completion of construction of a new facility in October 1997, as discussed
further below, the partnership revised its commitment to require rental payments
only through December 31, 1997. Leasehold improvements of approximately
$194,000, net, have been depreciated fully through December 31, 1997.

In October 1997, Lee completed construction of a new corporate headquarters
and operations building which was then sold to a partnership, wholly-owned by
stockholders of Lee. Lee sold the facility to the partnership for $2,700,000
recognizing no gain or loss on the transaction. Additional capitalized costs of
construction of approximately $429,000 represent improvements in the original
building design. These costs are classified as leasehold improvements to be
depreciated over the lease term. The lease requires monthly payments of
approximately $29,000, increasing for inflation after five years, commencing
October 24, 1997 and continuing through October 24, 2017. The lease qualifies as
a capital lease. The partnership entered into third-party debt to finance its
purchase of the facility from Lee. Lee guaranteed the partnership's debt in
conjunction with this transaction.

Lee has a note receivable from its president to facilitate his purchase of
Lee common shares from another stockholder. Lee issued a note payable to First
American National Bank which provided the funds for this transaction, as
described in Note 6. The note receivable bears interest at the same variable
rate charged to Lee by the bank. The balance is being repaid based on the same
amortization as Lee's

F-83

<PAGE>

LEE COMPANY
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

note payable from its president, with payments being received from the president
through payroll deduction. Both notes are scheduled to be paid in full by
October 1999.

Lee has receivables from several officers of Lee for payment of various
personal expenses. The outstanding balances bear interest at market rates.

NOTE 10 -- EMPLOYEE BENEFIT PLANS

Lee has a 401(k) savings plan that covers substantially all employees with
over one year of service. Lee matches employee contributions at a rate of 25.0%.
Total contributions by Lee under the plan were approximately $101,000 and
$115,000 for the years ended December 31, 1996 and 1997, respectively.

Lee provides health insurance for its employees and covered dependents
through a plan that is partially self-insured. Lee retains risk for losses up to
$20,000 per employee annually. Lee maintains third party insurance to cover
losses greater than $20,000 up to $1,000,000 per employee annually. Annual
losses in excess of $1,000,000 are retained by Lee. Lee has not incurred any
losses that approach the threshold of its coverage.

NOTE 11 -- FINANCIAL INSTRUMENTS

Lee's financial instruments consist of cash and cash equivalents, long-term
investments, accounts receivable and payable, accrued expenses, and debt. Except
for capital lease obligations, Lee believes the carrying values of these
instruments on the accompanying balance sheet approximate their fair value due
to their nature and the variable interest rates charged. Capital lease
obligations would total approximately $2,680,000 using current market rates.

NOTE 12 -- COMMITMENTS AND CONTINGENCIES

INSURANCE

Lee carries a broad range of insurance coverage, including business auto
liability, general liability and an umbrella policy. Lee has not incurred
significant claims or losses on any of these insurance policies.

NOTE 13 -- SUBSEQUENT EVENTS (UNAUDITED)

Lee and its stockholders have entered into a definitive agreement with
Enfinity pursuant to which Lee will merge with a wholly owned subsidiary of
Enfinity. All outstanding shares of Lee will be exchanged for cash and common
stock of Enfinity concurrently with the consummation of the initial public
offering of the common stock of Enfinity.

F-84

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
HILL YORK CORPORATION AND
HILL YORK SERVICE CORPORATION

In our opinion, the accompanying combined balance sheet and the related
combined statements of operations, stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Hill York
Corporation and Hill York Service Corporation (collectively, 'Hill York') at
March 31, 1996 and 1997 and December 31, 1997 and the results of their
operations and their cash flows for the years ended March 31, 1996 and 1997 and
the nine months ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of Hill
York's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
March 14, 1998

F-85

<PAGE>

HILL YORK CORPORATION
COMBINED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
MARCH 31,
---------------- DECEMBER 31, MARCH 31,
1996 1997 1997 1998
------ ------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ 453 $ 409 $ 207 $ 201
Accounts receivable:
Trade, (net of allowance for doubtful accounts of $60,
$40 and $40 at March 31, 1996, March 31, 1997 and
December 31, 1997, respectively)..................... 4,624 3,308 5,393 6,129
Retainage.............................................. 1,392 1,859 2,494 1,872
Costs in estimated earnings in excess of billings on
uncompleted contracts..................................... 689 732 385 522
Inventories................................................. 132 186 164 189
Prepaid expenses and other current assets................... 41 295 262 950
Deferred income taxes....................................... 18 -- 453 --
------ ------ ------------ ------------
Total current assets................................... 7,349 6,789 9,358 9,863
Property and equipment, net...................................... 1,519 1,613 1,562 1,536
Due from related parties -- noncurrent........................... 343 363 298 303
Deferred income taxes............................................ 36 55 -- --
Other assets..................................................... 144 94 175 175
------ ------ ------------ ------------
Total assets........................................... $9,391 $8,914 $ 11,393 $ 11,877
------ ------ ------------ ------------
------ ------ ------------ ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit............................................. $ 100 $ -- $ 100 $ --
Current portion of long-term debt........................... 50 50 50 50
Current portion of capital lease obligations................ 95 122 90 90
Accounts payable............................................ 2,866 2,513 3,393 3,702
Accrued expenses............................................ 2,099 2,453 2,047 1,560
Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... 1,153 558 1,969 3,012
Unearned revenue............................................ 263 284 249 275
Due to related parties...................................... 12 18 -- --
Income taxes payable........................................ 13 32 482 79
Deferred income taxes....................................... 2 28 -- --
------ ------ ------------ ------------
Total current liabilities.............................. 6,653 6,058 8,380 8,768
Obligations under capital lease, net of current portion.......... 154 186 143 121
Long-term debt, net of current portion........................... 458 408 371 358
Deferred income tax.............................................. -- 6 10 10
------ ------ ------------ ------------
Total liabilities...................................... 7,265 6,658 8,904 9,257
Commitments and contingencies
Stockholders' equity:
Common stock, $0 par value; 150,300 shares authorized;
79,460 shares issued and outstanding...................... 869 869 869 869
Retained earnings........................................... 1,257 1,387 1,620 1,751
------ ------ ------------ ------------
Total stockholders' equity............................. 2,126 2,256 2,489 2,620
------ ------ ------------ ------------
Total liabilities and stockholders' equity............. $9,391 $8,914 $ 11,393 $ 11,877
------ ------ ------------ ------------
------ ------ ------------ ------------
</TABLE>

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

F-86

<PAGE>

HILL YORK CORPORATION
COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED NINE MONTHS ENDED ENDED
MARCH 31, DECEMBER 31, MARCH 31,
------------------ ---------------------- ----------------
1996 1997 1996 1997 1997 1998
------- ------- ----------- ------- ------ ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues....................................... $28,667 $31,430 $23,123 $25,863 $8,307 $9,126
Cost of revenues............................... 22,526 24,121 18,002 20,432 6,118 7,084
------- ------- ----------- ------- ------ ------
Gross profit.............................. 6,141 7,309 5,121 5,431 2,189 2,042
Selling, general and administrative expenses... 5,758 6,992 4,985 5,082 2,007 1,846
------- ------- ----------- ------- ------ ------
Income from operations.................... 383 317 136 349 182 196
Other (income) expense:
Interest expense.......................... 85 69 52 58 17 15
Interest income........................... (2) (3) (3) (5) -- (1)
Other income, net......................... (62) (74) (52) (50) (22) (17)
------- ------- ----------- ------- ------ ------
Income before provision for income taxes....... 362 325 139 346 187 199
Provision for income taxes..................... 98 115 58 113 58 68
------- ------- ----------- ------- ------ ------
Net income..................................... $ 264 $ 210 $ 81 $ 233 $ 129 $ 131
------- ------- ----------- ------- ------ ------
------- ------- ----------- ------- ------ ------
</TABLE>

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

F-87

<PAGE>

HILL YORK CORPORATION
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
---------------- RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT EARNINGS STOCK EQUITY
------ ------ -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1995................................... 79,460 $869 $1,053 $-- $ 1,922
Net income........................................... -- -- 264 -- 264
Dividends paid....................................... -- -- (60) -- (60)
------ ------ -------- -------- -------------
Balance, March 31, 1996................................... 79,460 869 1,257 -- 2,126
Net income........................................... -- -- 210 -- 210
Dividends paid....................................... -- -- (80) -- (80)
------ ------ -------- -------- -------------
Balance, March 31, 1997................................... 79,460 869 1,387 -- 2,256
Net income........................................... -- -- 233 -- 233
------ ------ -------- -------- -------------
Balance, December 31, 1997................................ 79,460 869 1,620 -- 2,489
Net income (unaudited)............................... -- -- 131 -- 131
------ ------ -------- -------- -------------
Balance, March 31, 1998 (unaudited)....................... 79,460 $869 $1,751 $-- $ 2,620
------ ------ -------- -------- -------------
------ ------ -------- -------- -------------
</TABLE>

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

F-88

<PAGE>

HILL YORK CORPORATION
COMBINED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, DECEMBER 31, MARCH 31,
------------------ ---------------------- ----------------------------------------
1996 1997 1996 1997 1997 1998
------- ------- ----------- ------- ------------------ ------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income............... $ 264 $ 210 $ 81 $ 233 $ 129 $ 131
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation........ 226 247 178 203 69 66
Gain on sale of
property and
equipment......... -- (11) (4) -- (7) (3)
Changes in operating
assets and
liabilities:
Accounts
receivable........ (1,620) 849 356 (2,720) 493 (114)
Inventories......... (5) (54) (95) 22 41 (25)
Costs and estimated
earnings in excess
of billings on
uncompleted
contracts......... (74) (43) 277 347 (320) (137)
Prepaid expenses and
other current
assets............ 16 (254) (304) 33 50 (688)
Due from related
parties........... (145) (20) 90 65 (110) (5)
Other long-term
assets............ (131) 50 (39) (81) 89 --
Accounts payable.... 1,007 (353) (803) 880 450 309
Accrued expenses.... 197 355 673 (406) (319) (487)
Unearned revenue.... 18 20 (10) (35) 31 26
Income taxes
payable........... 18 19 478 450 (459) (403)
Deferred income
taxes, net........ 59 31 (446) (422) 477 453
Billings in excess
of costs and
estimated earnings
on uncompleted
contracts......... 235 (595) (252) 1,411 (343) 1,043
------- ------- ----------- ------- ------ -------
Net cash provided by
(used in)
operating
activities........ 65 451 180 (20) 271 166
------- ------- ----------- ------- ------ -------
Cash flows from investing
activities:
Advances to related
parties................ 12 6 (12) (18) 18 --
Proceeds from sale of
property and
equipment.............. -- 12 4 3 8 6
Additions of property and
equipment.............. (120) (188) (131) (113) (57) (43)
------- ------- ----------- ------- ------ -------
Net cash used in
investing
activities........ (108) (170) (139) (128) (31) (37)
------- ------- ----------- ------- ------ -------
Cash flows from financing
activities:
Net proceeds (repayments)
on line of credit...... 100 (100) (100) 100 -- (100)
Repayments of long-term
debt................... (50) (50) (38) (38) (13) (12)
Stockholder dividends.... (60) (80) (80) -- -- --
Capital lease payments... (88) (95) (63) (116) (31) (23)
------- ------- ----------- ------- ------ -------
Net cash used in
financing
activities........ (98) (325) (281) (54) (44) (135)
------- ------- ----------- ------- ------ -------
Net decrease in cash and cash
equivalents................. (141) (44) (240) (202) 196 (6)
Cash and cash equivalents,
beginning of period......... 594 453 453 409 213 207
------- ------- ----------- ------- ------ -------
Cash and cash equivalents, end
of period................... $ 453 $ 409 $ 213 $ 207 $ 409 $ 201
------- ------- ----------- ------- ------ -------
------- ------- ----------- ------- ------ -------
Supplemental disclosure of
cash flow information:
Additions under capital
lease.................. $ 95 $ 154 $ 90 $ 42 $ 64 $ --
Cash paid for interest... $ 86 $ 89 $ 52 $ 58 $ 37 $ 15
Cash paid for income
taxes.................. $ 91 $ 115 $ 89 $ 34 $ 26 $ 18
</TABLE>

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

F-89

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Hill York Corporation specializes in the design, shop fabrication,
installation and service of energy and indoor environmental systems in high rise
luxury condominiums, hotels, universities and convention centers throughout
South Florida.

Hill York Service Corporation, a Florida corporation, is primarily a
subcontractor and derives substantially all revenue from the installation and
service of air conditioning systems in Broward County, Florida.

The consolidated group of Hill York Corporation and Hill York Service
Corporation ('Hill York'), and its stockholders intend to enter into a
definitive agreement with Enfinity Corporation ('Enfinity'), pursuant to which
all outstanding shares of Hill York's common stock will be exchanged for cash
and shares of common stock of Enfinity concurrently with the consummation of the
initial public offering (the 'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION

The accompanying combined financial statements include the accounts of Hill
York Corporation and Hill York Service Corporation, which are affiliated through
common ownership and management. All intercompany transactions have been
eliminated in these financial statements.

CASH AND CASH EQUIVALENTS

Hill York considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market using the
first-in, first-out ('FIFO') method.

PROPERTY AND EQUIPMENT

REVENUE RECOGNITION

Hill York recognizes revenue when services are performed except when work
is being performed under a construction contract. Revenues from construction
contracts are recognized on the percentage-of-completion method measured by the
percentage of costs incurred to total estimated costs for each contract.
Provisions for the total estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions, estimated profitability and final contract settlements may result in
revisions to costs and income and their effects are recognized in the period in
which the revisions are determined.

F-90

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts will be due upon completion of the
contracts and acceptance by the customer. Based on Hill York's experience with
similar contracts in recent years, the retention balance will be collected in
the upcoming fiscal year.

WARRANTY COSTS

Hill York warrants labor for the first year after installation on new air
conditioning and heating systems. A reserve for warranty costs is recorded as
part of the cost to complete each individual job.

INCOME TAXES

Hill York Corporation has elected C Corporation status, as defined by the
Internal Revenue Service. As such, Hill York Corporation records income tax
expense using the liability method of accounting for deferred income taxes.
Under the liability method, deferred tax assets and liabilities are recognized
for the expected future tax consequences of temporary differences between the
financial statement and income tax bases of Hill York Corporation's assets and
liabilities. An allowance is recorded when it is more likely than not that any
or all of a deferred tax asset will not be realized. The provision for income
taxes includes taxes currently payable plus the net change during the year in
deferred tax assets and liabilities recorded by Hill York Corporation.

Hill York Service Corporation has elected S Corporation status as defined
by the Internal Revenue Code, whereby Hill York Service Corporation is not
subject to taxation for federal purposes. Under S Corporation status, the
stockholders report their share of Hill York Service Corporation's taxable
earnings or losses in their personal tax returns. Hill York Service Corporation
will terminate its S Corporation status concurrently with the effective date of
this Offering. Included in current assets are deposits to prepay certain of the
stockholders' federal income taxes.

USE OF ESTIMATES

FISCAL YEAR END

Effective December 31, 1997, Hill York changed its fiscal year end from
March 31 to December 31.

NEW ACCOUNTING PRONOUNCEMENT

F-91

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the nine month period ended December
31, 1996 and the three month periods ended March 31, 1997 and 1998 has been
prepared from the unaudited financial records of Hill York and in the opinion of
management, reflects all adjustments, consisting only of normal recurring items,
necessary for a fair presentation of the financial position and results of
operations and of cash flows for the interim period.

NOTE 3 -- PROPERTY AND EQUIPMENT

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED MARCH 31,
USEFUL LIVES ------------------ DECEMBER 31,
IN YEARS 1996 1997 1997
------------ ------- ------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Land................................................. $ 438 $ 438 $ 438
Building............................................. 31 years 406 406 423
Autos and trucks..................................... 5 years 1,148 1,269 1,276
Furniture and fixtures............................... 5 years 506 579 595
Machinery and equipment.............................. 7 years 247 282 329
Leasehold improvements............................... 10 years 252 258 265
Computers............................................ 5 years 63 115
------- ------- ------------
2,997 3,295 3,441
Less -- Accumulated depreciation..................... (1,478) (1,682) (1,879)
------- ------- ------------
Property and equipment, net.......................... $ 1,519 $ 1,613 $ 1,562
------- ------- ------------
------- ------- ------------
</TABLE>

Depreciation expense was approximately $226,000 and $247,000 for the years
ended March 31, 1996 and 1997, respectively, and approximately $203,000 for the
nine months ended December 31, 1997.

NOTE 4 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Activity in Hill York's allowance for doubtful accounts consists of the
following:

<TABLE>
<CAPTION>
MARCH 31,
-------------- DECEMBER 31,
1996 1997 1997
---- ----- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year............................................. $58 $ 60 $ 40
Additions to costs and expenses.......................................... 2
Deductions for uncollectible receivables written off and recoveries...... (20)
---- ----- ---
Balance at end of year.............................................. $60 $ 40 $ 40
---- ----- ---
---- ----- ---
</TABLE>

F-92

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Installation contracts in progress are as follows:

<TABLE>
<CAPTION>
MARCH 31,
------------------ DECEMBER 31,
1996 1997 1997
------- ------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Costs incurred on contracts in progress............................ $12,086 $19,808 $ 31,303
Estimated earnings, net of losses.................................. 2,524 4,087 5,557
------- ------- ------------
14,610 23,895 36,860
Less -- Billings to date........................................... 15,074 23,721 38,444
------- ------- ------------
$ (464) $ 174 $ (1,584)
------- ------- ------------
------- ------- ------------
Costs and estimated earnings in excess of billings on uncompleted
contracts........................................................ $ 689 $ 732 $ 385
Billings in excess of costs and estimated earnings on uncompleted
contracts........................................................ (1,153) (558) (1,969)
------- ------- ------------
$ (464) $ 174 $ (1,584)
------- ------- ------------
------- ------- ------------
</TABLE>

NOTE 5 -- LONG-TERM DEBT

A description of certain terms of the loan agreements follows:

<TABLE>
<CAPTION>
MARCH 31,
------------ DECEMBER 31,
1996 1997 1997
---- ---- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Mortgage note payable, secured by land and building payable in monthly
installments of $4,167 plus interest through May 2006. The note bears
interest at prime plus 0.75% (9.25% as of December 31, 1997) and is
collateralized by land and building with a net book value of
$753,000............................................................... $508 $458 $421
Less -- Current portion.................................................. (50) (50) (50)
---- ---- ------
$458 $408 $371
---- ---- ------
---- ---- ------
</TABLE>

Long-term debt consists of a mortgage note payable with a balance of
approximately $508,000, $458,000 and $421,000 at March 31, 1996 and 1997 and
December 31, 1997, respectively. This balance includes approximately $50,000 of
current portion of long-term debt for March 31, 1996 and 1997 and December 31,
1997. The interest rate is at 0.75% over the bank's prime rate (8.50% as of
December 31, 1997) due in monthly installments of $4,167 plus interest through
May 2006 collateralized by land and building with a book value of approximately
$753,000.

Hill York has three lines of credit with two different banks. The first
line is for $1,000,000, expires August 1, 1998 and bears interest at 1% above
the prime lending rate. The next line is for $500,000, bears interest at 0.5%
above the prime rate and expires June 18, 1998. The third line of credit expires
December 12, 1997, is for the amount $150,000 and bears interest at 0.75% above
prime rate. All three lines of credit are guaranteed by several stockholders.

F-93

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Aggregate maturities required on long-term debt as of December 31, 1997 are
as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- ----------------------------------------------------------------------------
<S> <C>
1998..................................................................... $ 50
1999..................................................................... 50
2000..................................................................... 50
2001..................................................................... 50
2002..................................................................... 50
Thereafter............................................................... 171
----
Total............................................................. $421
----
----
</TABLE>

NOTE 6 -- CAPITAL LEASE COMMITMENTS

Hill York leases vehicles and equipment under leases accounted for as
capital leases.

Property and equipment as of March 31, 1996 and 1997 and December 31, 1997
includes the following leased vehicles and equipment under capital leases:

<TABLE>
<CAPTION>
MARCH 31,
-------------- DECEMBER 31,
1996 1997 1997
----- ----- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Vehicles and equipment................................................. $ 400 $ 467 $ 507
Less -- Accumulated amortization....................................... (244) (340) (249)
----- ----- ------
Leased vehicles and equipment, net..................................... $ 156 $ 127 $ 258
----- ----- ------
----- ----- ------
</TABLE>

The following is a schedule of the future minimum lease payments under
capital leases, together with the present value of minimum lease payments as of
December 31, 1997 (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- ----------------------------------------------------------------------------
<S> <C>
1998..................................................................... $140
1999..................................................................... 93
2000..................................................................... 49
2001 and thereafter...................................................... 11
----
Total minimum lease payments...................................... 293
Less -- Amount representing interest..................................... 60
----
Present value of minimum lease payments.................................. $233
----
----
</TABLE>

NOTE 7 -- OPERATING LEASE COMMITMENTS

Hill York leases vehicles and equipment under operating leases. Hill York
also leases office and warehouse space from a related party (see note 8). Total
lease expense for the years ended March 31, 1996 and 1997 and for the nine
months ended December 31, 1997 was approximately $149,000, $164,000, and
$171,000, respectively.

F-94

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The minimum rental commitments as of December 31, 1997 for all
noncancelable operating leases with initial or remaining terms in excess of one
year are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- ----------------------------------------------------------------------------
<S> <C>
1998..................................................................... $184
1999..................................................................... 154
2000..................................................................... 124
2001..................................................................... 79
Thereafter............................................................... 48
----
Total minimum payments required................................... $589
----
----
</TABLE>

NOTE 8 -- RELATED-PARTY TRANSACTIONS

Hill York engages in various transactions with companies which have
officers and stockholders in common with Hill York. Significant transactions,
between Hill York entities, and balances due to or from the related parties are
summarized below:

LEASE TRANSACTIONS

Hill York leases office and warehouse space from 3921 Associates (a
partnership). The lease is for a period of five years, which expires on
September 30, 2002, and requires monthly payments of approximately $5,000.
Minimum rental commitments remaining for this lease amount to approximately
$302,000 as of December 31, 1997.

SERVICE CONTRACTS

Hill York engages Hill York Sales & Service Corporation in Dade County to
perform service and warranty work for systems installed by Hill York. During the
years ended March 31, 1996 and 1997 and for the nine months ended December 31,
1997, total fees of approximately $34,000, $47,000, and $53,000, respectively,
were paid to this company for service and warranty work.

Insurance premiums paid by Hill York on behalf of several related companies
are reimbursed periodically.

RELATED PARTY BALANCES

Related party balances, which are non interest-bearing, consist of the
following as of March 31, 1996 and 1997 and December 31, 1997:

<TABLE>
<CAPTION>
MARCH 31,
------------ DECEMBER 31,
1996 1997 1997
---- ---- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Due from related parties:
Hill York Limited................................................... $338 $300 $286
Hill York Sales and Service Corporation............................. 5 4 5
Couse Air Conditioning Corporation.................................. 59 2
3927 Associates..................................................... 2
3921 Associates..................................................... 3
---- ---- ------
Total.......................................................... $343 $363 $298
---- ---- ------
---- ---- ------
Due to related parties:
Hill York Sales and Service Corporation............................. $ 12 $ 18 $--
---- ---- ------
---- ---- ------
</TABLE>

F-95

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- EMPLOYEE BENEFIT PLANS

PROFIT-SHARING PLAN

Hill York participates with affiliated companies in an employee
profit-sharing plan covering substantially all of its employees that are not
under collective bargaining agreements. The amount of the annual contribution is
at the discretion of the Board of Directors. There were contributions to the
plan of approximately $140,000, $145,000 and $90,000 for the years ended March
31, 1996 and 1997 and December 31, 1997, respectively.

401(k) PLAN

Hill York's 401(k) plan covers substantially all of the Company's employees
that are not under collective bargaining agreements. Hill York's contribution is
based on a 50% and 25% match of the first 6% of the employee's contributions for
the years ended March 31, 1996 and 1997 and for the nine months ended December
31, 1997, respectively. Amounts charged to expense amounted to approximately
$32,000, $94,000 and $41,000 for the years ended March 31, 1996 and 1997 and for
the nine months ended December 31, 1997, respectively.

NOTE 10 -- FINANCIAL INSTRUMENTS

Hill York's financial instruments consist of cash and cash equivalents,
trade accounts receivable, a line of credit, notes payable and debt. Hill York
believes that the carrying value of these instruments on the accompanying
balance sheet approximates their fair value.

NOTE 11 -- INCOME TAXES

Deferred tax assets and liabilities consist of the following as of March
31, 1996 and 1997 and December 31, 1997:

<TABLE>
<CAPTION>
MARCH 31,
------------ DECEMBER 31,
1996 1997 1997
---- ---- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
Accrued expenses..................................................... $ 95 $ 76 $453
Deferred tax liabilities:
Contracts in progress................................................ (41) (49)
Property and equipment............................................... (2) (6) (10)
---- ---- ------
(43) (55) (10)
---- ---- ------
Net deferred tax asset (liability)........................................ $ 52 $ 21 $443
---- ---- ------
---- ---- ------
</TABLE>

The deferred tax amounts mentioned above have been classified on the
accompanying balance sheets as of March 31, 1996 and 1997 and December 31, 1997
as follows:

<TABLE>
<CAPTION>
MARCH 31,
------------ DECEMBER 31,
1996 1997 1997
---- ---- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current assets (liabilities).............................................. $16 $(28) $453
Noncurrent assets (liabilities)........................................... 36 49 (10)
---- ---- ------
$52 $ 21 $443
---- ---- ------
---- ---- ------
</TABLE>

F-96

<PAGE>

HILL YORK CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The difference between the federal income tax computed by the statutory
federal income tax rate and Hill York's actual income tax expense, as reflected
in the financial statements, is as follows:

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS
MARCH 31, ENDED
------------ DECEMBER 31,
1996 1997 1997
---- ---- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Income tax at statutory federal income tax rate........................... $84 $105 $102
Increase (decrease) attributable to:
Benefit of income taxed at lower rates............................... (4) (2)
State income taxes, net of federal tax benefit....................... 9 11 10
Other................................................................ 9 1 1
---- ---- ------
Total........................................................... $98 $115 $113
---- ---- ------
---- ---- ------
</TABLE>

NOTE 12 -- COMMITMENTS AND CONTINGENCIES

GUARANTEES

Hill York, along with two affiliated companies and certain stockholders,
has entered into an agreement of indemnity providing cross indemnity on any
surety bonds or guarantees issued by an insurance company on behalf of Hill York
or the affiliates.

LITIGATION

Hill York is subject to various claims and legal proceedings covering a
range of matters that arise in the ordinary course of its business activities.
Management believes that any liability that may ultimately result from the
resolution of these matters will not have a material adverse effect on Hill
York's financial position or results of operations.

INSURANCE

Hill York along with other related parties which include Hill York Sales
and Service Corporation and Couse Air Conditioning Corporation have a
self-insured workers' compensation plan. During the year, Hill York along with
the other related parties also entered into a self-insured property, auto and
general liability plan. The group paid a minimum annual premium of approximately
$163,000, $199,000 and $208,000 for the years ended March 31, 1996 and 1997 and
for the nine months ended December 31, 1997, respectively. The group also has
specific stop-loss coverage in effect at $100,000 per occurrence with a maximum
overall liability of $400,000 per year. Hill York's portion of the annual
premium paid was approximately $135,000, $161,000 and $170,000 for the years
ended March 31, 1996 and 1997 and for the nine months ended December 31, 1997,
respectively. Claims are accrued as incurred. Hill York's accrual for claims was
approximately $140,000, $252,000 and $286,000 for the years ended March 31, 1996
and 1997 and for the nine months ended December 31, 1997, respectively. Claims
paid for the group were approximately $161,000, $149,000 and $336,000 for the
years ended March 31, 1996 and 1997 and for the nine months ended December 31,
1997, of which approximately $134,000, $120,000 and $276,000 was allocated to
Hill York, respectively.

NOTE 13 -- SUBSEQUENT EVENTS (UNAUDITED)

Hill York and its stockholders have entered into a definitive agreement
with Enfinity pursuant to which Hill York will merge with a wholly owned
subsidiary of Enfinity. All outstanding shares of Hill York will be exchanged
for cash and common stock of Enfinity concurrently with the consummation of the
initial public offering of the common stock of Enfinity.

F-97

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of
MECHANICAL SERVICES OF ORLANDO, INC.

In our opinion, the accompanying balance sheet and the related statements
of operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Mechanical Services of Orlando,
Inc. ('Mechanical Services') at December 31, 1997, and the results of its
operations and its cash flows for year then ended in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of Mechanical Services' management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Philadelphia, Pennsylvania
April 3, 1998

F-98

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................................... $ 34 $ 254
Accounts receivable:
Trade..................................................................... 4,773 3,897
Retainage................................................................. 725 720
Other receivables......................................................... 58 65
Costs and estimated earnings in excess of billings on uncompleted contracts.... 279 166
Inventories.................................................................... 121 122
Prepaid expenses and other current assets...................................... 51 118
Deferred income taxes.......................................................... 7 7
------------ ------------
Total current assets................................................. 6,048 5,349
Property and equipment, net......................................................... 603 579
Investments......................................................................... 143 143
------------ ------------
Total assets......................................................... $6,794 $6,071
------------ ------------
------------ ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit................................................................. $ 54 $ 45
Accounts payable and accrued expenses.......................................... 1,903 1,296
Billings in excess of costs and estimated earnings on uncompleted contracts.... 522 339
Unearned revenue............................................................... -- 96
Income taxes payable........................................................... 246 147
------------ ------------
Total current liabilities............................................ 2,725 1,923
Deferred income taxes............................................................... 375 375
------------ ------------
Total liabilities.................................................... 3,100 2,298
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock, $10 par value; 1,000 shares authorized, 35 shares issued and
outstanding................................................................... -- --
Additional paid-in capital..................................................... 7 7
Retained earnings................................................................... 3,687 3,766
------------ ------------
Total stockholders' equity........................................... 3,694 3,773
------------ ------------
Total liabilities and stockholders' equity........................... $6,794 $6,071
------------ ------------
------------ ------------
</TABLE>

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

F-99

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, ----------------------------------------
1997 1997 1998
------------ ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C>
Revenues...................... $ 28,279 $7,378 $5,567
Cost of revenues.............. 24,511 6,611 4,928
------------ ------- -------
Gross profit............. 3,768 767 639
Selling, general and
administrative expenses..... 2,530 640 510
------------ ------- -------
Income from operations... 1,238 127 129
Other (income) expense:
Interest expense......... 10 -- 1
Interest income.......... (11) (7) (2)
Gain on lease
replacements/disposal
of equipment........... (119) (119) (2)
------------ ------- -------
Income before provision for
income taxes................ 1,358 253 132
Provision for income taxes.... 543 101 53
------------ ------- -------
Net income.................... $ 815 $ 152 $ 79
------------ ------- -------
------------ ------- -------
</TABLE>

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

F-100

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
---------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996.............................. 35 -- $ 7 $2,872 $ 2,879
Net income......................................... -- -- -- 815 815
-- --
------ -------- -------------
Balance, December 31, 1997.............................. 35 -- 7 3,687 3,694
Net income (unaudited)............................. -- -- -- 79 79
-- --
------ -------- -------------
Balance, March 31, 1998 (unaudited)..................... 35 -- $ 7 $3,766 $ 3,773
-- ------ -------- -------------
-- ------ -------- -------------
</TABLE>

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

F-101

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------
1997 1997 1998
------------ ----- -----
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.................................................................. $ 815 $ 152 $ 79
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation expense................................................... 109 27 30
Gain on disposition of equipment....................................... (119) (119) --
Deferred income taxes.................................................. 63 -- --
Changes in operating assets and liabilities:
Accounts receivable............................................... (920) (764) 874
Inventories....................................................... (1) 26 (1)
Costs and estimated earnings in excess of billings on uncompleted
contracts....................................................... 78 (16) 113
Prepaid expenses and other current assets......................... 10 (6) (67)
Accounts payable and accrued expenses............................. 153 722 (607)
Income taxes payable.............................................. (18) (22) (99)
Billings in excess of costs and estimated earnings on uncompleted
contracts....................................................... (775) (419) (183)
Deferred revenue.................................................. -- 92 96
------ ----- -----
Net cash used in operating activities........................ (605) (327) 235
------ ----- -----
Cash flows from investing activities:
Additions of property and equipment......................................... (237) (142) (6)
Distributions from partnership investments.................................. 2 -- --
------ ----- -----
Net cash used in investing activities........................ (235) (142) (6)
------ ----- -----
Cash flows from financing activities:
Borrowings under revolving credit agreement................................. 54 -- (9)
Payments of capital lease obligations....................................... (12) (12) --
------ ----- -----
Net cash provided by financing activities.................... 42 (12) (9)
------ ----- -----
Net decrease in cash and cash equivalents........................................ (798) (481) 220
Cash and cash equivalents, beginning of period................................... 832 832 34
------ ----- -----
Cash and cash equivalents, end of period......................................... $ 34 $ 351 $ 254
------ ----- -----
------ ----- -----
Supplemental disclosure of cash flow information:
Cash paid for interest...................................................... $ 10 $-- $ 1
Cash paid for income taxes.................................................. $ 505 $ 123 $ 152
</TABLE>

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

F-102

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Mechanical Services of Orlando, Inc. ('Mechanical Services'), founded in
1974, focuses on design and build projects and provides operation and
maintenance services, primarily in the State of Florida.

Mechanical Services and its stockholders intend to enter into a definitive
agreement with Enfinity Corporation ('Enfinity'), pursuant to which all
outstanding shares of Mechanical Services' common stock will be exchanged for
cash and shares of Enfinity common stock concurrently with the consummation of
the initial public offering (the 'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Mechanical Services considers all highly liquid investments purchased with
an original maturity of three months or less to be cash equivalents.

SUPPLEMENTAL CASH FLOW INFORMATION

During the year ended December 31, 1997, various capital leases for
vehicles and office equipment were replaced by operating leases. The net book
value of the assets held under capital leases at the date of replacement was
approximately $233,000, and the balance of the related capital lease obligations
was approximately $352,000, resulting in a gain of approximately $119,000.

INVENTORIES

Inventories consist of air conditioning and heating equipment, parts and
supplies held for use in the ordinary course of business and are stated at the
lower of cost or market using the first-in, first-out ('FIFO') method.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, and depreciation is computed
using straight-line and accelerated methods over the estimated useful lives of
the assets. Leasehold improvements are capitalized and amortized over the lesser
of the life of the lease or the estimated useful life of the asset.

INVESTMENTS

Mechanical Services maintains investments in certain real estate limited
partnerships and accounts for these investments on the cost basis. Income
recognized by Mechanical Services is limited to distributions received from the
partnerships.

REVENUE RECOGNITION

Mechanical Services recognizes revenues when services are performed except
when work is being performed under a construction contract. Revenues from
construction contracts are recognized on the percentage-of-completion method
measured by the percentage of costs incurred to total estimated costs for each
contract. Contract costs include all direct material, subcontracts and labor
costs and those indirect costs related to contract performance such as indirect
labor, supplies, tools, repairs and

F-103

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

depreciation costs. Provisions for the total estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Changes in
job performance, job conditions, estimated profitability and final contract
settlements may result in revisions to costs and income and their effects are
recognized in the period in which the revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in construction contracts are due upon completion of the contracts
and acceptance by the customer. Based on Mechanical Services' experience with
similar contracts in recent years, the retention balance is expected to be
collected in the upcoming fiscal year.

WARRANTY COSTS

Mechanical Services generally warrants materials and labor for the first
year after installation on new air conditioning and heating systems. Mechanical
Services maintains a reserve for warranty costs based on historical warranty
charges.

INCOME TAXES

Income taxes include the recognition of deferred tax assets and liabilities
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases.

USE OF ESTIMATES

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject Mechanical Services to
concentrations of credit risk consist principally of trade accounts receivable.
Mechanical Services follows the practice of filing statutory liens on
construction projects where collections problems are anticipated. The liens
serve as collateral for trade receivables. Mechanical Services does not believe
that it is subject to any unusual credit risk beyond the normal credit risk
attendant in its business.

FISCAL YEAR END

Effective December 31, 1997, Mechanical Services changed its fiscal year
end from March 31 to December 31.

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, Mechanical Services adopted Statement of
Financial Accounting Standards No. 121, 'Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.' Accordingly, in
the event that facts and circumstances indicate that property and equipment or
other assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future undiscounted cash
flows associated with the asset are compared to the asset's carrying amount to
determine if a write-down to market value is necessary. Adoption of this
standard did not have a material effect on the financial position or results of
operations of Mechanical Services.

F-104

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the three month periods ended March
31, 1997 and 1998 has been prepared from the unaudited financial records of
Mechanical Services and in the opinion of management reflects all adjustments,
consisting only of normal recurring items, necessary for a fair presentation of
the financial position and results of operations and of cash flows for the
interim periods.

NOTE 3 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES DECEMBER 31,
IN YEARS 1997
------------ --------------
(IN THOUSANDS)
<S> <C> <C>
Transportation equipment............................................................ 3-5 years $ 182
Machinery and equipment............................................................. 5-7 years 202
Leasehold improvements.............................................................. 7-39 years 389
Furniture, fixtures and office equipment............................................ 5-7 years 446
Less -- Accumulated depreciation and amortization................................... (616)
------
Property and equipment, net......................................................... $ 603
------
------
</TABLE>

Depreciation expense was approximately $109,000 for the year ended December
31, 1997.

NOTE 4 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Installation contracts in progress are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
--------------
(IN THOUSANDS)
<S> <C>
Costs incurred on contracts in progress....................................... $ 13,683
Estimated earnings, net of losses............................................. 2,299
--------------
15,982
Less -- Billings to date...................................................... (16,225)
--------------
$ (243)
--------------
--------------
Costs and estimated earnings in excess of billings on uncompleted contracts... $ 279
Billings in excess of costs and estimated earnings on uncompleted contracts... (522)
--------------
$ (243)
--------------
--------------
</TABLE>

F-105

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
--------------
(IN THOUSANDS)
<S> <C>
Accounts payable, trade....................................................... $1,150
Accrued compensation and benefits............................................. 640
Other accrued expenses........................................................ 113
-------
$1,903
-------
-------
</TABLE>

NOTE 5 -- REVOLVING LINE OF CREDIT

Mechanical Services has a $1,600,000 revolving line of credit with a bank.
The line of credit expires July 31, 1998 and bears interest at one-quarter
percent above the bank's prime lending rate (8.8% at December 31, 1997). The
line of credit is unsecured and is guaranteed by Mechanical Services'
stockholders. Borrowings are limited to 80.0% of accounts receivable less than
90 days outstanding. This line of credit agreement requires that Mechanical
Services maintain certain financial ratios. There are no commitment fees or
compensating balance arrangements under the agreement.

NOTE 6 -- INCOME TAXES

The provision for income taxes for the year ended December 31, 1997
consists of the following (in thousands):

<TABLE>
<CAPTION>
Current:
<S> <C>
Federal.......................................................................... $411
State............................................................................ 69
----
480
Deferred:
Federal.......................................................................... 54
State............................................................................ 9
----
63
----
Total provision for income taxes............................................ $543
----
----
</TABLE>

The following table shows the reconciliation between the statutory federal
income tax and the actual provision for income taxes for the year ended December
31, 1997.

<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Provision -- federal statutory rate................................... $475 35.0%
Increase resulting from:
State taxes, net of federal tax benefit.......................... 50 3.7
Effect of permanent differences.................................. 18 1.3
------ ------
Provision for income taxes.................................. $543 40.0%
------ ------
------ ------
</TABLE>

F-106

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The types of temporary differences between the tax bases of assets and
liabilities and their financial reporting amounts that give rise to deferred
income tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
--------------
(IN THOUSANDS)
<S> <C>
Gross deferred tax assets:
Workers' compensation accruals........................................... $ 7
------
------
Gross deferred tax liabilities:
Investments in real estate limited partnerships.......................... $365
Depreciation............................................................. 10
------
Total deferred tax liabilities...................................... $375
------
------
</TABLE>

NOTE 7 -- EMPLOYEE BENEFIT PLAN

Mechanical Services has a defined contribution profit sharing plan. The
plan provides for Mechanical Services to match one-half of the first six percent
contributed by each employee. Mechanical Services may also make discretionary
contributions; however, Mechanical Services made no discretionary contributions
for the year ended December 31, 1997. Total contributions under the plan were
approximately $105,000 for the year ended December 31, 1997.

NOTE 8 -- FINANCIAL INSTRUMENTS

Mechanical Services' financial instruments consist of cash and cash
equivalents, trade receivables and a line of credit. Mechanical Services
believes that the carrying value of these instruments on the accompanying
balance sheet approximates their fair value due to the short-term nature of
these instruments.

NOTE 9 -- COMMITMENTS AND CONTINGENCIES

GUARANTEES

Mechanical Services owns a minority interest in seven real estate
partnerships. Mechanical Services has guaranteed debt of these partnerships
totaling approximately $479,000 as of December 31, 1997.

LEASES

Mechanical Services leases certain of its Orlando facilities from the
stockholders of Mechanical Services under an operating lease expiring in 2002.
The rent paid under this related-party lease was approximately $130,000 for the
year ended December 31, 1997.

During the year ended December 31, 1997, Mechanical Services replaced
various capital leases for office equipment and vehicles with operating leases,
resulting in a gain of approximately $119,000.

Mechanical Services leases various office equipment, vehicles and certain
facilities under operating leases expiring in 1998 through 2002. Future minimum
lease payments under these non-cancelable operating leases are as follows (in
thousands):

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
- ---------------------------------------------------------------------------
<S> <C>
1998.................................................................... $ 566
1999.................................................................... 470
2000.................................................................... 244
2001.................................................................... 135
2002.................................................................... 130
-------
Total............................................................ $ 1,545
-------
-------
</TABLE>

Cost of sales and operating expenses include rent on these leases of
approximately $480,000 for the year ended December 30, 1997.

F-107

<PAGE>

MECHANICAL SERVICES OF ORLANDO, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

INSURANCE

Mechanical Services is self-insured for medical claims up to approximately
$1,300 per year per covered individual. Additionally, Mechanical Services annual
workers' compensation insurance coverages are provided through contracts which
require Mechanical Services to pay incurred claims up to an annual maximum
amount of approximately $448,000. Claims in excess of this amounts are covered
by a stop-loss policy. Under the policy, Mechanical Services is required to
provide the insurer a $381,000 letter of credit as collateral for such claims.
Mechanical Services has recorded reserves for its portion of self-insured claims
based on estimated claims incurred through December 31, 1997.

NOTE 10 -- SUBSEQUENT EVENTS (UNAUDITED)

Mechanical Services and its stockholders have entered into a definitive
agreement with Enfinity pursuant to which Mechanical Services will merge with a
wholly owned subsidiary of Enfinity. All outstanding shares of Mechanical
Services will be exchanged for cash and common stock of Enfinity concurrently
with the consummation of the initial public offering of the common stock of
Enfinity.

F-108

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
AIRCOND CORPORATION

In our opinion, the accompanying balance sheet and the related statements
of operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Aircond Corporation ('Aircond') at
September 30, 1996 and 1997, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1997 in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of Aircond's management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Nashville, Tennessee
November 14, 1997

F-109

<PAGE>

AIRCOND CORPORATION
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------ MARCH 31,
1996 1997 1998
------- ------- ----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 2,297 $ 2,275 $ 2,305
Accounts receivable:
Trade, net of allowance of $75,000 in each year..................... 5,008 5,640 5,455
Costs and estimated earnings in excess of billings on uncompleted
contracts.............................................................. 284 486 531
Inventories.............................................................. 388 399 419
Due from related parties................................................. 71 49 57
Deferred income taxes.................................................... 376 -- --
Prepaid expenses and other current assets................................ 21 305 678
Income taxes refundable.................................................. 52 -- --
------- ------- -----------
Total current assets................................................ 8,497 9,154 9,445
Property and equipment, net................................................... 2,497 2,363 5,125
Cash surrender value -- life insurance........................................ 734 785 229
Deferred income taxes......................................................... 118 -- --
Other assets.................................................................. 60 60 60
------- ------- -----------
Total assets........................................................ $11,906 $12,362 $14,859
------- ------- -----------
------- ------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of obligations under capital lease....................... $ 609 $ 687 $ 870
Accounts payable......................................................... 704 1,116 1,161
Accrued expenses......................................................... 1,575 1,515 1,061
Billings in excess of costs and estimated earnings on uncompleted
contracts.............................................................. 117 158 416
Unearned revenue......................................................... 539 586 643
------- ------- -----------
Total current liabilities........................................... 3,544 4,062 4,151
Obligations under capital lease, net of current portion.................. 1,260 995 3,464
Note payable to related party............................................ 1,217 1,217 1,217
Deferred compensation.................................................... 165 148 148
------- ------- -----------
Total liabilities................................................... 6,186 6,422 8,980
------- ------- -----------
Commitments and contingencies................................................. -- -- --
Stockholders' equity:
Common stock, $50 par value; 5,000 shares authorized, issued and
outstanding............................................................ 250 250 250
Retained earnings........................................................ 5,470 5,690 5,629
------- ------- -----------
Total stockholders' equity.......................................... 5,720 5,940 5,879
------- ------- -----------
Total liabilities and stockholders' equity.......................... $11,906 $12,362 $14,859
------- ------- -----------
------- ------- -----------
</TABLE>

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

F-110

<PAGE>

AIRCOND CORPORATION
STATEMENT OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31,
----------------------------- ------------------------------------
1995 1996 1997 1997 1998
------- ------- ------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues.................................................. $25,225 $26,830 $26,935 $ 12,023 $ 13,191
Cost of revenues.......................................... 17,174 17,284 17,509 7,913 8,676
------- ------- ------- ---------------- ----------------
Gross profit......................................... 8,051 9,546 9,426 4,110 4,515
Selling, general and administrative expenses.............. 6,273 7,487 7,731 3,687 3,826
------- ------- ------- ---------------- ----------------
Income from operations............................... 1,778 2,059 1,695 423 689
Other (income) expense:
Interest expense..................................... 403 176 301 150 349
Interest income...................................... (41) (60) (97) (46) (45)
(Gain) loss on sale of equipment..................... (80) 23 38 19 3
Other................................................ (17) (16) (33) (17) (3)
------- ------- ------- ---------------- ----------------
Income before provision for income taxes.................. 1,513 1,936 1,486 317 385
Provision for income taxes................................ 539 737 494 106 --
------- ------- ------- ---------------- ----------------
Net income................................................ $ 974 $ 1,199 $ 992 $ 211 $ 385
------- ------- ------- ---------------- ----------------
------- ------- ------- ---------------- ----------------
Unaudited pro forma information:
Pro forma net income before provision for income
taxes.............................................. $ 1,486 $ 317 $ 385
Provision for income taxes........................... 594 127 154
------- ---------------- ----------------
Pro forma net income (see Note 2)......................... $ 892 $ 190 $ 231
------- ---------------- ----------------
------- ---------------- ----------------
</TABLE>

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

F-111

<PAGE>

AIRCOND CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
---------------- PREFERRED RETAINED STOCKHOLDERS'
SHARES AMOUNT STOCK EARNINGS EQUITY
------ ------ --------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1994............................... 5,000 $250 $ 1,217 $3,368 $ 4,835
Dividends paid....................................... -- -- -- (41) (41)
Net income........................................... -- -- -- 974 974
------ ------ --------- -------- -------------
Balance, September 30, 1995............................... 5,000 250 1,217 4,301 5,768
Dividends paid....................................... -- -- -- (30) (30)
Redemption of preferred stock........................ -- -- (1,217) -- (1,217)
Net income........................................... -- -- -- 1,199 1,199
------ ------ --------- -------- -------------
Balance, September 30, 1996............................... 5,000 250 -- 5,470 5,720
Distributions to S Corporation stockholders.......... -- -- -- (772) (772)
Net income........................................... -- -- -- 992 992
------ ------ --------- -------- -------------
Balance, September 30, 1997............................... 5,000 250 -- 5,690 5,940
Distributions to S Corporation stockholders
(unaudited)........................................ -- -- -- (446) (446)
Net income (unaudited)............................... -- -- -- 385 385
------ ------ --------- -------- -------------
Balance, March 31, 1998 (unaudited)....................... 5,000 $250 $ -- $5,629 $ 5,879
------ ------ --------- -------- -------------
------ ------ --------- -------- -------------
</TABLE>

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

F-112

<PAGE>

AIRCOND CORPORATION
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
SEPTEMBER 30, MARCH 31,
---------------------------- ------------------------------------
1995 1996 1997 1997 1998
------- ------ ------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income.............................. $ 974 $1,199 $ 992 $ 211 $ 385
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation expense............... 536 690 715 358 343
Loss (gain) on sale of property and
equipment........................ (80) 23 38 19 3
Deferred income taxes.............. (98) (40) 494 106 --
Changes in operating assets and
liabilities:
Accounts receivable........... (2,290) 1,106 (631) 642 185
Inventories................... (31) (43) (11) (35) (20)
Prepaids and other assets..... (58) (11) (284) (127) (373)
Costs and estimated earnings
in excess of billings on
uncompleted contracts....... (12) 15 (202) (84) (45)
Accounts payable.............. 342 (361) 412 372 45
Accrued expenses.............. 528 (20) (60) (511) (454)
Deferred compensation......... (15) (17) (17) -- --
Billings in excess of costs
and estimated earnings on
uncompleted contracts....... 110 (65) 41 (117) 258
Unearned revenue.............. 46 101 47 23 57
Income taxes payable.......... 88 (287) 52 52 --
------- ------ ------- ------- -------
Net cash provided by
operating activities... 40 2,290 1,586 909 384
------- ------ ------- ------- -------
Cash flows from investing activities:
Additions to property and equipment..... (102) (353) (245) (123) (168)
Proceeds from sale of property and
equipment............................. 300 142 91 20 71
Repayments to (advances from) related
parties............................... (12) (2) 22 15 (8)
(Increase in) redemption of cash
surrender value of life insurance..... (54) (83) (51) (25) 556
------- ------ ------- ------- -------
Net cash provided by
(used in) investing
activities............. 132 (296) (183) (113) 451
------- ------ ------- ------- -------
Cash flows from financing activities:
Payments of long-term debt.............. (469) (621) (653) (327) (359)
Dividends and distributions............. (41) (30) (772) (285) (446)
------- ------ ------- ------- -------
Net cash used in
financing activities... (510) (651) (1,425) (612) (805)
------- ------ ------- ------- -------
Net increase (decrease) in cash and cash
equivalents................................ (338) 1,343 (22) 184 30
Cash and cash equivalents, beginning of
period..................................... 1,292 954 2,297 2,297 2,275
------- ------ ------- ------- -------
Cash and cash equivalents, end of period..... $ 954 $2,297 $ 2,275 $2,481 $2,305
------- ------ ------- ------- -------
------- ------ ------- ------- -------
Supplemental disclosure of cash flow
information:
Cash paid for interest.................. $ 404 $ 176 $ 301 $ 150 $ 349
Cash paid for income taxes.............. $ 548 $1,065 $ -- $ -- $ --
</TABLE>

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

F-113

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND ORGANIZATION

Aircond Corporation ('Aircond'), founded in 1937, focuses on the
maintenance, repair and replacement of commercial energy and indoor
environmental systems.

Aircond and its stockholders intend to enter into a definitive agreement
with Enfinity Corporation ('Enfinity'), pursuant to which all outstanding shares
of Aircond's common stock will be exchanged for cash and shares of Enfinity
common stock concurrent with the consummation of an initial public offering (the
'Offering') of the common stock of Enfinity.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Aircond considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories consist of supplies and parts held for use in the ordinary
course of business and are stated at the lower of specific cost or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of purchased
property and equipment and over the lease term for vehicles under capital lease.
Leasehold improvements are capitalized and amortized over the lesser of the life
of the lease or the estimated useful life of the asset.

CASH SURRENDER VALUE -- LIFE INSURANCE

Increases in cash surrender value of life insurance policies owned by
Aircond are recognized as a reduction of premiums expensed in each period.

REVENUE RECOGNITION

Aircond recognizes revenues when services are performed except when work is
being performed under a construction contract. Revenues from construction
contracts are recognized on the percentage-of-completion method measured by the
percentage of costs incurred to total estimated costs for each contract.
Provisions for the total estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions, estimated profitability and final contract settlements may result in
revisions to costs and income and their effects are recognized in the period in
which the revisions are determined.

Unearned revenues represent amounts billed in advance of revenues
recognized on service contracts.

F-114

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

WARRANTY COSTS

Aircond warrants labor for the first year after installation on new air
conditioning and heating systems. A reserve for warranty costs is recorded as
part of the cost to complete each individual job.

INCOME TAXES

For the years ended September 30, 1995 and 1996, Aircond utilized the
method of accounting for income taxes pursuant to Statement of Financial
Accounting Standards No. 109, 'Accounting for Income Taxes' ('SFAS 109'), which
requires deferred income taxes to reflect the tax consequences of temporary
differences between the assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes. The principal
temporary differences of Aircond relate to depreciation, allowance for doubtful
accounts, service warranty reserve, vacation accrual, deferred compensation,
unearned revenues, and differences arising from capital lease accounting.

Effective, October 1, 1996, Aircond elected S Corporation status as defined
by the Internal Revenue Code, whereby Aircond is not subject to taxation for
federal purposes. Under S Corporation status, the stockholders report their
share of Aircond's taxable earnings or losses in their personal tax returns.
Included in current assets are deposits to prepay certain of the stockholders'
federal income taxes based on Aircond electing to use a fiscal year end.

The unaudited pro forma income tax information included in the Statement of
Operations is presented in accordance with SFAS 109 as if Aircond had been
subject to federal and state income taxes for the entire periods presented.

USE OF ESTIMATES

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1996, Aircond adopted Statement of Financial
Accounting Standards No. 121, 'Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.' Accordingly, in the event
that facts and circumstances indicate that property and equipment or other
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset are compared to the asset's carrying amount to
determine if a write-down to market value is necessary. Adoption of this
standard did not have a material effect on the financial position or results of
operations of Aircond.

F-115

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CASH FLOW INFORMATION

Non-cash transactions, excluded from the statements of cash flows,
consisted of equipment purchased through the use of capital lease obligations of
approximately $1,167,000, $733,000 and $486,000 for the years ended September
30, 1995, 1996 and 1997, respectively.

In addition, for the year ended September 30, 1996, Aircond redeemed all
outstanding shares of preferred stock by incurring long-term debt of
approximately $1,217,000.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject Aircond to concentrations of
credit risk consist principally of trade accounts receivable. Aircond follows
the practice of filing statutory liens on construction projects where
collections problems are anticipated. The liens serve as collateral for trade
receivables. Aircond does not believe that it is subject to any unusual credit
risk beyond the normal credit risk attendant in its business.

UNAUDITED INTERIM FINANCIAL INFORMATION

The interim financial information for the six month periods ended March 31,
1997 and 1998 has been prepared from the unaudited financial records of Aircond
and in the opinion of management reflects all adjustments, consisting only of
normal recurring items, necessary for a fair presentation of the financial
position and results of operations and of cash flows for the interim periods.

NOTE 3 -- ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts activity is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1995 1996 1997
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Balance, beginning of year......................................................... $60 $ 90 $75
Charges to costs and expenses...................................................... 30 -- --
Write-offs......................................................................... -- (15) --
---- ---- ----
$90 $ 75 $75
---- ---- ----
---- ---- ----
</TABLE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
ESTIMATED SEPTEMBER 30,
USEFUL LIVES ------------------
IN YEARS 1996 1997
------------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Land............................................................... $ 52 $ 52
Building and improvements.......................................... 39 years 520 562
Vehicles and equipment............................................. 5-10 years 756 793
Furniture, fixtures and office equipment........................... 5-10 years 570 601
Vehicles under capital lease....................................... Lease term 2,670 2,729
Less -- Accumulated depreciation and amortization.................. (2,071) (2,374)
------- -------
Property and equipment, net................................... $ 2,497 $ 2,363
------- -------
------- -------
</TABLE>

Depreciation expense was approximately $536,000, $690,000 and $715,000 for
the years ended September 30, 1995, 1996 and 1997, respectively.

F-116

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS

Installation contracts in progress are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------
1996 1997
----- -----
(IN THOUSANDS)
<S> <C> <C>
Costs incurred on contracts in progress................................................ $ 343 $ 486
Estimated earnings, net of losses...................................................... 142 191
----- -----
485 677
Less -- Billings to date............................................................... (318) (349)
----- -----
$ 167 $ 328
----- -----
----- -----
Costs and estimated earnings in excess of billings on uncompleted contracts............ $ 284 $ 486
Billings in excess of costs and estimated earnings on uncompleted contracts............ (117) (158)
----- -----
$ 167 $ 328
----- -----
----- -----
</TABLE>

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------
1996 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Salaries, wages and commissions...................................................... $ 936 $ 663
Profit sharing contributions......................................................... 200 160
Other taxes payable.................................................................. 38 76
Vacation accrual..................................................................... 314 321
Accrued distributions to stockholders................................................ -- 163
Other................................................................................ 42 95
------ ------
$1,530 $1,478
------ ------
------ ------
</TABLE>

NOTE 6 -- LONG-TERM DEBT

On September 26, 1996, Aircond incurred long-term debt in the amount of
approximately $1,217,000 in exchange for the outstanding preferred stock in
Aircond. The note carries an interest rate of 9.0% with interest due monthly
through August 2011 and principal of approximately $1,217,000 due on September
1, 2011. The note is collateralized by the personal guarantee of the majority
stockholder.

Aircond has available an unsecured bank line of credit dated March 1995
which allows Aircond to borrow up to $1,000,000 at an interest rate of one
quarter of one percent below the prime rate. Aircond has not borrowed funds
under this agreement for the years ended September 30, 1996 and 1997.

NOTE 7 -- LEASE OBLIGATIONS

The majority of Aircond's vehicles used in operations are leased through a
leasing company with non-cancelable terms of three to four years. The leases
contain options permitting the purchase of the vehicles at any time in
accordance with a schedule of values which decline at an even rate each month
during the initial term of the lease, as well as for subsequent periods if the
vehicles are held beyond the initial term. The leases qualify as capital leases
in accordance with Statement of Financial Accounting Standards No. 13
'Accounting for Leases' ('SFAS 13'). Accordingly, both the equipment and
obligation are reflected in Aircond's balance sheet. Interest rates implicit in
the leases range from 7.5% to 13.0%.

F-117

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The net book value of leased vehicles included in property and equipment at
September 30, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------
1996 1997
------ -------
(IN THOUSANDS)
<S> <C> <C>
Cost.................................................................... $2,670 $ 2,729
Less -- Accumulated depreciation........................................ (959) (1,173)
------ -------
Net book value.......................................................... $1,711 $ 1,556
------ -------
------ -------
</TABLE>

Aircond also leases various buildings and equipment under operating leases
with rent expense amounting to approximately $91,000, $88,000 and $106,000 for
the years ended September 30, 1995, 1996 and 1997, respectively.

The following is a schedule of future minimum lease payments at September
30, 1997 under capital and operating leases:

<TABLE>
<CAPTION>
YEARS ENDING
SEPTEMBER 30, CAPITAL OPERATING
- --------------- ------- ---------
(IN THOUSANDS)
<S> <C> <C>
1998........................................................ $ 826 $ 74
1999........................................................ 682 73
2000........................................................ 287 73
2001........................................................ 139 73
2002........................................................ -- 33
------- ---------
1,934 $ 326
---------
---------
Less -- Implied interest.................................... (252)
-------
Present value of net minimum lease payments................. 1,682
Less -- Current portion..................................... (687)
-------
Long-term amount............................................ $ 995
-------
-------
</TABLE>

In October 1997, Aircond entered into a lease agreement with a partnership
of stockholders of Aircond for a new office building to serve as Aircond's
corporate headquarters. The lease requires monthly payments of $25,000
commencing October 1, 1997 and continuing through October 1, 2012. The building
under lease is still under construction and is expected to be finished in
February of 1998. The lease qualifies as a capital lease under SFAS 13 and will
be accounted for as such upon commencement of the lease.

NOTE 8 -- INCOME TAXES

Effective October 1, 1996, Aircond elected S Corporation status under
federal income tax laws which provide that the stockholders are taxed directly
on Aircond taxable income. As a result, the prior years' tax effect of
cumulative temporary differences of approximately $494,000 was reversed during
fiscal 1997.

F-118

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The provision for income taxes for the years ended September 30, 1995 and
1996 are summarized as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------
1995 1996
---- (IN ----
THOUSANDS)
<S> <C> <C>
Current:
Federal....................................................... $548 $669
State......................................................... 89 109
---- ----
637 778
---- ----
Deferred:
Federal....................................................... (84) (35)
State......................................................... (14) (6)
---- ----
(98) (41)
---- ----
Total provision for income taxes......................... $539 $737
---- ----
---- ----
</TABLE>

A reconciliation of statutory tax rates to effective tax rate for the years
ended September 30, 1995 and 1996 is as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------------
1995 1996
------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. federal statutory rate............................................ $514 34.0% $658 34.0%
Increase (decrease) in rate resulting from:
State taxes, net of federal benefit............................... 50 3.3 68 3.5
Nondeductible expenses, increase in cash surrender value of life
insurance and other............................................. (25) (1.7) 11 0.6
---- ---- ---- ----
Effective rate......................................................... $539 35.6% $737 38.1%
---- ---- ---- ----
---- ---- ---- ----
</TABLE>

The components of deferred tax assets and liabilities as of September 30,
1996 are as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
-------------
<S> <C>
Current:
Allowance for bad debts................................................... $ 29
Unearned revenue.......................................................... 213
Vacation accrual.......................................................... 124
Inventory capitalization 10
------
Total current........................................................ 376
------
Long-term:
Capital leases............................................................ 46
Deferred compensation..................................................... 65
Warranty reserve.......................................................... 18
Depreciation.............................................................. (11)
------
Total long-term...................................................... 118
------
Total deferred tax assets............................................ $ 494
------
------
</TABLE>

F-119

<PAGE>

AIRCOND CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- RELATED-PARTY TRANSACTIONS

As discussed in Note 6, on September 26, 1996, Aircond redeemed all of the
outstanding preferred stock of Aircond through the issuance of a note payable.
The former stockholder from which the stock was redeemed is related to the
majority stockholder. Interest expense on this related party note payable was
approximately $109,000 for the year ended September 30, 1997.

NOTE 10 -- EMPLOYEE BENEFIT PLAN

Aircond has a profit sharing plan that covers substantially all employees
with over one year of service. Total contributions by Aircond under the plan
were $150,000, $200,000 and $160,000 for the years ended September 30, 1995,
1996 and 1997, respectively.

NOTE 11 -- FINANCIAL INSTRUMENTS

Aircond's financial instruments consist of cash and cash equivalents,
short-term investments, accounts receivable and payable, accrued expenses and
debt. Except for capital lease obligations, Aircond believes that the carrying
value of these instruments on the accompanying balance sheets approximate their
fair value due to their nature. The note payable to the former preferred
stockholder reflects current market rates of interest. Capital lease obligations
at September 30, 1997 would total approximately $1,728,000 using the current
market rates.

NOTE 12 -- COMMITMENTS AND CONTINGENCIES

EMPLOYMENT AGREEMENTS

Aircond entered into a deferred compensation agreement with a former
officer in 1986 which in the aggregate provided for annual compensation ranging
from approximately $17,000 to $39,000 through 2006, and $10,000 for the period
2007 until death. A liability was recorded as of the date of the agreement for
the present value of the obligations under this deferred compensation
arrangement. The minimum payments reduce this balance.

INSURANCE

Aircond carries a broad range of insurance coverage, including business
auto liability, general liability and an umbrella policy. Aircond has not
incurred significant claims or losses on any of these insurance policies.

NOTE 13 -- SUBSEQUENT EVENTS (UNAUDITED)

Aircond and its stockholders have entered into a definitive agreement with
Enfinity pursuant to which Aircond will merge with a wholly owned subsidiary of
Enfinity. All outstanding shares of Aircond will be exchanged for cash and
common stock of Enfinity concurrently with the consummation of the initial
public offering of the common stock of Enfinity.

F-120

<PAGE>

_________________________________ ________________________________

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
Offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any of the Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the shares of Common Stock to which it relates or an offer
to, or a solicitation of, any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or that the information
contained herein is correct as of any time subsequent to the date hereof.

------------------------------------------
TABLE OF CONTENTS
------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary......................................................................................... 3
Risk Factors............................................................................................... 10
The Company................................................................................................ 16
Use of Proceeds............................................................................................ 18
Dividend Policy............................................................................................ 18
Capitalization............................................................................................. 19
Dilution................................................................................................... 20
Selected Financial Data.................................................................................... 21
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 23
Business................................................................................................... 41
Management................................................................................................. 52
Certain Transactions....................................................................................... 58
Principal Stockholders..................................................................................... 62
Description of Capital Stock............................................................................... 64
Shares Eligible for Future Sale............................................................................ 67
Underwriting............................................................................................... 69
Legal Matters.............................................................................................. 71
Experts.................................................................................................... 71
Additional Information..................................................................................... 71
Index to Financial Statements.............................................................................. F-1
</TABLE>

Until , 1998 (25 days from the date of this Prospectus),
all dealers effecting transactions in the registered securities offered hereby,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

8,000,000 SHARES

[LOGO]

COMMON STOCK

------------------------------
PROSPECTUS
------------------------------

NationsBanc Montgomery
Securities LLC

Lehman Brothers

Raymond James
& Associates, Inc.

, 1998

_________________________________ ________________________________

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses (other than underwriting
compensation expected to be incurred) in connection with this Offering(1). All
of such amounts (except the SEC Registration Fee and the NASD Filing Fee) are
estimated.

<TABLE>
<S> <C>
SEC registration fee................................................................... $ 39,353.00
New York Stock Exchange listing fee.................................................... 140,600.00
NASD filing fee........................................................................ 13,840.00
Blue Sky fees and expenses............................................................. 7,500.00
Printing and Engraving Costs........................................................... 450,000.00
Legal fees and expenses................................................................ 1,000,000.00
Accounting fees and expenses........................................................... 1,750,000.00
Transfer Agent and Registrar fees and expenses......................................... 50,000.00
Miscellaneous.......................................................................... 548,707.00
-------------
Total............................................................................. $4,000,000.00
-------------
-------------
</TABLE>

- ------------

* To be provided.

(1) The expenses do not include the shares issued to Capstone, its principals
and Mr. Whitchurch for consulting services rendered in connection with this
Offering.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's By-Laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of Delaware
(the 'DGCL'), as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.

Section 145 of the DGCL permits a corporation, under specified
circumstances, to indemnify its directors, officers, employees or agents against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlements actually and reasonably incurred by them in connection with any
action, suit or proceeding brought by third parties by reason of the fact that
they were or are directors, officers, employees or agents of the corporation, if
such directors, officers, employees or agents acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agents in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnity for such expenses despite
such adjudication of liability.

Article Seven of the Company's Certificate of Incorporation provides that
the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the DGCL, which makes directors liable for unlawful dividends or
unlawful stock repurchases or redemptions, or (d) for transactions from which
directors derive improper personal benefit.

Section 8 of the Underwriting Agreement to be filed as Exhibit 1 provides
that the Underwriters named therein will indemnify and hold harmless the Company
and each director, officer or controlling person of the Company from and against
certain liabilities, including liabilities under the Securities Act. Section 8
of such Underwriting Agreement also provides that such Underwriters will
contribute to certain liabilities of such persons under the Securities Act.

II-1

<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following information relates to securities of the Company issued or
sold by the Company within the past three years which were not registered under
the Securities Act:

In September 1997, the Company issued (i) four shares of Common Stock to
each of William J. Lynch, James Lynch and Leonard A. Potter in return for
payment to the Company by each of such persons of $400; and (ii) three shares of
Common Stock to Capstone in return for payment to the Company by Capstone of
$300. In February 1998, the Company issued, as previously agreed, 2.012611
shares of its Common Stock to Marty R. Kittrell and 0.950959 shares of its
Common Stock to Ellwood F. Whitchurch in return for payment to the Company by
such persons of $201.26 and $95.10, respectively. In May 1998, the Company
issued, as previously agreed, 11.55641 shares of its Common Stock to Rodney C.
Gilbert in return for payment to the Company by him of $1,155.64. In June 1998,
the Company issued 0.407554 shares of its Common Stock to Nicholas J. Costanza
in return for payment to the Company by him of $40.76. The share totals in this
paragraph do not give effect to a 36,804.93-for-1 stock split effected in the
form of a stock dividend on July 9, 1998.

Simultaneously with the consummation of this Offering, the Company will
issue 8,243,971 shares of its Common Stock in connection with the Mergers of the
eight Founding Companies. The Company also will exchange options to purchase
119,500 shares of Common Stock of the Company at an exercise price of $8.38 per
share for options to purchase 50,000 shares of common stock of one of the
Founding Companies.

Each of these transactions was effected or will be effected without
registration of the relevant security under the Securities Act in reliance upon
the exemption provided by Section 4(2) of the Securities Act and Regulation D
thereunder for transactions not involving a public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------------------------------

<S> <C>
1 -- Form of Underwriting Agreement
2.1 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Aircond
Acquisition Corp., Aircond Corporation and the Stockholders named therein*
2.2 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Brandt
Acquisition Corp., Brandt Mechanical Services, Inc. and the Stockholders named therein*
2.3 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Energy
Systems Industries Acquisition Corp., Energy Systems Industries, Inc. and the Stockholders named therein*
2.4 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation,
Hill-York Acquisition Corp., Hill York Corporation and the Stockholders named therein*
2.5 -- Agreement and Plan of Organization, dated as of May 14, 1998 , by and among Enfinity Corporation,
Hill-York Service Acquisition Corp., Hill-York Service Corporation and the Stockholders named therein*
2.6 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Lee
Acquisition Corp., Lee Company and the Stockholders named therein*
2.7 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, MSI
Acquisition Corp., Mechanical Services of Orlando, Inc. and the Stockholders named therein*
2.8 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, New
England Mechanical Services Acquisition Corp., New England Mechanical Services, Inc. and the Stockholders
named therein*
2.9 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Air
Systems Acquisition Corp., Air Systems, Inc. and the Stockholders named therein*
3.1 -- Amended and Restated Certificate of Incorporation of the Company*
3.2 -- By-Laws of the Company*
4 -- Form of Stock Certificate of the Company*
5 -- Opinion of Morgan, Lewis & Bockius LLP
</TABLE>

II-2

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------------------------------------------------------------------------------------------------------
<S> <C>
10.1 -- 1998 Long-Term Incentive Plan of the Company
10.2 -- Employment Agreement between the Company and Rodney C. Gilbert
10.3 -- Employment Agreement between the Company and Marty R. Kittrell
10.4 -- Form of Employment Agreement between the Company and William M. Dillard
10.5 -- Employment Agreement between the Company and Nicholas J. Costanza
10.6 -- Form of Employment Agreement between each Founding Company (except for MSI) and such Founding Company's
Executive(s)*
21 -- List of subsidiaries of the Company*
23.1 -- Consent of Price Waterhouse LLP
23.2 -- Consent of Shilling and Kenyon, Inc.
23.3 -- Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5)
23.4 -- Consent of Alan L. Barnes, Sr. to be named as a director*
23.5 -- Consent of Robert S. Lafferty to be named as a director*
23.6 -- Consent of William B. Lee to be named as a director*
23.7 -- Consent of Charles P. Reagan to be named as a director*
23.8 -- Consent of Anthony I. Shaker to be named as a director*
23.9 -- Consent of Mark A. Zilbermann to be named as a director*
23.10 -- Consent of Marty R. Kittrell to be named as a director*
23.11 -- Consent of John W. Davis to be named as a director*
23.12 -- Consent of Charles Scott to be named as a director*
23.13 -- Consent of Kathleen A. Murray to be named as a director*
24 -- Powers of Attorney (included on signature page)*
27 -- Financial Data Schedule
</TABLE>

- ------------
* Previously filed.

(b) Financial Statement Schedules

None

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes as follows:

(1) The undersigned will provide to the underwriters at the closing
specified in the underwriting agreement certificates in such denominations
and registered in such names as required by the underwriters to permit
prompt delivery to each purchaser.

(2) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance on Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it is declared effective.

(3) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3

<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY HAS
DULY CAUSED THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK,
THE STATE OF NEW YORK, ON THE 13TH DAY OF JULY, 1998.

ENFINITY CORPORATION

By: *

...
RODNEY C. GILBERT
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------------------- ------------------
<C> <S> <C>
* Chairman of the Board and July 13, 1998
......................................... Chief Executive Officer
RODNEY C. GILBERT (Principal Executive Officer)

/S/ MARTY R. KITTRELL Executive Vice President and Chief Financial July 13, 1998
......................................... Officer (Principal Financial and Accounting
MARTY R. KITTRELL Officer)

* Director July 13, 1998
.........................................
WILLIAM J. LYNCH

* President and Director July 13, 1998
.........................................
WILLIAM M. DILLARD

* /s/ MARTY R. KITTRELL
.........................................
ATTORNEY-IN-FACT
</TABLE>

II-4

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------------------------------------------------------
<C> <S>
1 -- Form of Underwriting Agreement
2.1 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Aircond
Acquisition Corp., Aircond Corporation and the Stockholders named therein*
2.2 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Brandt Acquisition
Corp., Brandt Mechanical Services, Inc. and the Stockholders named therein*
2.3 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Energy Systems
Industries Acquisition Corp., Energy Systems Industries, Inc. and the Stockholders named therein*
2.4 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Hill-York
Acquisition Corp., Hill York Corporation and the Stockholders named therein*
2.5 -- Agreement and Plan of Organization, dated as of May 14, 1998 , by and among Enfinity Corporation, Hill-York Service
Acquisition Corp., Hill-York Service Corporation and the Stockholders named therein*
2.6 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Lee Acquisition
Corp., Lee Company and the Stockholders named therein*
2.7 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, MSI Acquisition
Corp., Mechanical Services of Orlando, Inc. and the Stockholders named therein*
2.8 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, New England
Mechanical Services Acquisition Corp., New England Mechanical Services, Inc. and the Stockholders named therein*
2.9 -- Agreement and Plan of Organization, dated as of May 14, 1998, by and among Enfinity Corporation, Air Systems
Acquisition Corp., Air Systems, Inc. and the Stockholders named therein*
3.1 -- Amended and Restated Certificate of Incorporation of the Company*
3.2 -- By-Laws of the Company*
4 -- Form of Stock Certificate of the Company*
5 -- Opinion of Morgan, Lewis & Bockius LLP
10.1 -- 1998 Long-Term Incentive Plan of the Company
10.2 -- Employment Agreement between the Company and Rodney C. Gilbert
10.3 -- Employment Agreement between the Company and Marty R. Kittrell
10.4 -- Form of Employment Agreement between the Company and William M. Dillard
10.5 -- Employment Agreement between the Company and Nicholas J. Costanza
10.6 -- Form of Employment Agreement between each Founding Company (except for MSI) and such Founding Company's
Executive(s)*
21 -- List of subsidiaries of the Company*
23.1 -- Consent of PricewaterhouseCoopers LLP
23.2 -- Consent of Shilling and Kenyon, Inc.
23.3 -- Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5)
23.4 -- Consent of Alan L. Barnes, Sr. to be named as a director*
23.5 -- Consent of Robert S. Lafferty to be named as a director*
23.6 -- Consent of William B. Lee to be named as a director*
23.7 -- Consent of Charles P. Reagan to be named as a director*
23.8 -- Consent of Anthony I. Shaker to be named as a director*
23.9 -- Consent of Mark A. Zilbermann to be named as a director*
23.10 -- Consent of Marty R. Kittrell to be named as a director*
23.11 -- Consent of John W. Davis to be named as a director*
23.12 -- Consent of Charles Scott to be named as a director*
23.13 -- Consent of Kathleen A. Murray to be named as a director*
24 -- Powers of Attorney (included on signature page)*
27 -- Financial Data Schedule

</TABLE>

- ------------

* Previously filed.

<PAGE>

Draft of July 13, 1998

8,000,000 Shares

Enfinity Corporation

Common Stock

Underwriting Agreement

dated _____________, 1998

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Representations and Warranties of the Company. . . . . . 2
Compliance with Registration Requirements . . . . . . . 2
Offering Materials Furnished to Underwriters. . . . . . 3
Distribution of Offering Material By the Company. . . . 3
The Underwriting Agreement. . . . . . . . . . . . . . . 3
Authorization of the Common Shares. . . . . . . . . . . 3
No Applicable Registration or Other Similar Rights. . . 4
No Material Adverse Change. . . . . . . . . . . . . . . 4
Independent Accountants . . . . . . . . . . . . . . . . 4
Preparation of the Financial Statements . . . . . . . . 5
Incorporation and Good Standing of the Company, the
Acquisition Subsidiaries and the Founding
Companies. . . . . . . . . . . . . . . . . . . . . . . 5
Capitalization and Other Capital Stock Matters. . . . . 6
Stock Exchange Listing. . . . . . . . . . . . . . . . . 7
Non-Contravention of Existing Instruments; No
Further Authorizations or Approvals Required . . . . . 7
No Material Actions or Proceedings. . . . . . . . . . . 7
Intellectual Property Rights. . . . . . . . . . . . . . 8
All Necessary Permits, etc. . . . . . . . . . . . . . . 8
Title to Properties . . . . . . . . . . . . . . . . . . 8
Tax Law Compliance. . . . . . . . . . . . . . . . . . . 9
Company Not an "Investment Company" . . . . . . . . . . 9
Insurance . . . . . . . . . . . . . . . . . . . . . . . 9
No Price Stabilization or Manipulation. . . . . . . . . 9
Related Party Transactions. . . . . . . . . . . . . . . 9
No Unlawful Contributions or Other Payments . . . . . . 10
Accounting Systems. . . . . . . . . . . . . . . . . . . 10
Compliance with Environmental Laws. . . . . . . . . . . 10
ERISA Compliance. . . . . . . . . . . . . . . . . . . . 11
Agreement and Plan of Organization. . . . . . . . . . . 11
Representations in each Agreement and Plan of
Organization . . . . . . . . . . . . . . . . . . . . . 12
Lock-Up Agreements. . . . . . . . . . . . . . . . . . . 12
Subchapter S Status . . . . . . . . . . . . . . . . . . 12

Section 2. Purchase, Sale and Delivery of the Common Shares . . . . 12
The Firm Common Shares. . . . . . . . . . . . . . . . . 12
The First Closing Date. . . . . . . . . . . . . . . . . 13
</TABLE>
i

<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
The Optional Common Shares; the Second
Closing Date . . . . . . . . . . . . . . . . . . . . . 13
Public Offering of the Common Shares. . . . . . . . . . 14
Payment for the Common Shares . . . . . . . . . . . . . 14
Delivery of the Common Shares . . . . . . . . . . . . . 14
Delivery of Prospectus to the Underwriters. . . . . . . 15

Section 3. Additional Covenants of the Company. . . . . . . . . . . 15
Representatives' Review of Proposed Amendments and
Supplements. . . . . . . . . . . . . . . . . . . . . . 15
Securities Act Compliance . . . . . . . . . . . . . . . 15
Amendments and Supplements to the Prospectus and
Other Securities Act Matters. . . . . . . . . . . . . . 15
Copies of any Amendments and Supplements to the
Prospectus. . . . . . . . . . . . . . . . . . . . . . . 16
Blue Sky Compliance . . . . . . . . . . . . . . . . . . 16
Use of Proceeds . . . . . . . . . . . . . . . . . . . . 16
Transfer Agent. . . . . . . . . . . . . . . . . . . . . 16
Earnings Statement. . . . . . . . . . . . . . . . . . . 16
Periodic Reporting Obligations. . . . . . . . . . . . . 16
Agreement Not To Offer or Sell Additional Securities. . 17
No Waiver of Founding Company Stockholder Lock-up . . . 17
Future Reports to the Representatives . . . . . . . . . 17
Satisfaction of Founding Company Merger Conditions. . . 18

Section 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . 18

Section 5. Conditions of the Obligations of the Underwriters. . . . 19
Accountants' Comfort Letter . . . . . . . . . . . . . . 19
Compliance with Registration Requirements; No Stop
Order; No Objection from NASD. . . . . . . . . . . . . 19
No Material Adverse Change. . . . . . . . . . . . . . . 20
Opinion of Counsel for the Company. . . . . . . . . . . 20
Opinion of Counsel for the Underwriters . . . . . . . . 20
Officers' Certificate . . . . . . . . . . . . . . . . . 20
Bring-down Comfort Letter . . . . . . . . . . . . . . . 21
Founding Company Merger Closings. . . . . . . . . . . . 21
Lock-Up Agreement from Certain Stockholders of the
Company .. . . . . . . . . . . . . . . . . . . . . . . 22
Additional Documents. . . . . . . . . . . . . . . . . . 22

Section 6. Reimbursement of Underwriters' Expenses. . . . . . . . . 23

Section 7. Effectiveness of this Agreement. . . . . . . . . . . . . 23
</TABLE>
ii

<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 8. Indemnification. . . . . . . . . . . . . . . . . . . . . 23
Indemnification of the Underwriters . . . . . . . . . . 23
Indemnification of the Company, its Directors and
Officers . . . . . . . . . . . . . . . . . . . . . . . 24
Notifications and Other Indemnification Procedures. . . 25
Settlements. . . . . . . . . . . . . . . . . . . . . . 26

Section 9. Contribution . . . . . . . . . . . . . . . . . . . . . . 26

Section 10. Default of One or More of the Several Underwriters . . . 28

Section 11. Termination of this Agreement. . . . . . . . . . . . . . 29

Section 12. Representations and Indemnities to Survive Delivery. . . 29

Section 13. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 29

Section 14. Successors . . . . . . . . . . . . . . . . . . . . . . . 30

Section 15. Partial Unenforceability . . . . . . . . . . . . . . . . 30

Section 16. Governing Law Provisions . . . . . . . . . . . . . . . . 30
Consent to Jurisdiction . . . . . . . . . . . . . . . . 31

Section 17. General Provisions . . . . . . . . . . . . . . . . . . . 31
</TABLE>
iii

<PAGE>

Underwriting Agreement

, 1998

NATIONSBANC MONTGOMERY SECURITIES LLC
LEHMAN BROTHERS, INC.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o NATIONSBANC MONTGOMERY SECURITIES LLC
600 Montgomery Street
San Francisco, California 94111

Ladies and Gentlemen:

Introductory. Enfinity Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of 8,000,000 shares (the "Firm
Common Shares") of its Common Stock, par value $.01 per share (the "Common
Stock"). In addition, the Company has granted to the Underwriters an option to
purchase up to an additional 1,200,000 shares (the "Optional Common Shares") of
Common Stock, as provided in Section 2. The Firm Common Shares and, if and to
the extent such option is exercised, the Optional Common Shares are collectively
called the "Common Shares". NationsBanc Montgomery Securities LLC ("NationsBanc
Montgomery"), Lehman Brothers, Inc. and Raymond James & Associates, Inc. have
agreed to act as representatives of the several Underwriters (in such capacity,
the "Representatives") in connection with the offering and sale of the Common
Shares.

The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-52671), which contains a form of prospectus to be used in
connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act, is called the "Registration
Statement". Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement", and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Common

<PAGE>

Shares, is called the "Prospectus"; provided, however, if the Company has, with
the consent of the Representatives, elected to rely upon Rule 434 under the
Securities Act, the term "Prospectus" shall mean the Company's prospectus
subject to completion (each, a "preliminary prospectus") dated ___________, 1998
(such preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and filed by
the Company with the Commission under Rules 434 and 424(b) under the Securities
Act and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("EDGAR").

Simultaneously with the closing of the purchase of the Firm
Common Shares by the Underwriters, the Company will acquire all of the capital
stock and ownership interests of each of the Founding Companies (as hereinafter
defined) pursuant to separate merger transactions (collectively, the "Founding
Company Mergers"), the consideration for which will be a combination of cash and
shares of Common Stock as described in the Registration Statement.

The Company hereby confirms its agreements with the Underwriters
as follows:

Section 1. Representations and Warranties of the Company.

The Company hereby represents, warrants and covenants to each
Underwriter as follows:

(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.

Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time it
became effective or will become effective and at all subsequent times, complied
and will comply in all material respects with the Securities

<PAGE>

Act and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date and at all subsequent times, did not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences do not apply
to statements in or omissions from the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein. There are
no contracts or other documents required to be described in the Prospectus or to
be filed as exhibits to the Registration Statement which have not been described
or filed as required.

(b) Offering Materials Furnished to Underwriters. The Company has
delivered to counsel to the Representatives one complete manually signed copy of
the Registration Statement and of each consent and certificate of experts filed
as a part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.

(c) Distribution of Offering Material By the Company. The Company
has not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection with the
offering and sale of the Common Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.

(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.

(e) Authorization of the Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.

<PAGE>

(f) No Applicable Registration or Other Similar Rights. There are
no persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or otherwise
included in the offering contemplated by this Agreement, except for such rights
as have been duly waived.

(g) No Material Adverse Change. Except as otherwise disclosed in
the Prospectus, subsequent to the respective dates as of which information is
given in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company, its subsidiaries listed on Exhibit
21 to the Registration Statement (the "Acquisition Subsidiaries"), and Brandt
Mechanical Systems, Inc. ("Brandt"), Air Systems, Inc. ("Air Systems"), Hill
York Corporation and Hill York Service Corporation (collectively, "Hill York"),
Mechanical Services of Orlando, Inc. ("Mechanical Systems"), Aircond Corp. and
its subsidiary (collectively, "Aircond"), Energy Systems Industries, Inc. and
its subsidiaries (collectively, "Energy Systems"), New England Mechanical
Services, Inc. and its subsidiary (collectively, "NEMSI") and Lee Company
("Lee") (collectively, the "Founding Companies"), considered as one entity (any
such change is called a "Material Adverse Change"); (ii) the Company, the
Acquisition Subsidiaries and the Founding Companies, considered as one entity,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business; (iii) there has
been no adverse change with respect to the goodwill and other intangible assets
of the Company and the Founding Companies (collectively, the "Intangible
Assets") such that, had the Founding Company Mergers been consummated on the
date hereof, the Intangible Assets, net of accumulated amortization, would not
have a value at least equal to the value reflected in the pro forma combined
balance sheet of the Company contained in the Registration Statement and no part
of the Intangible Assets shown on such balance sheet are required to be written
down in conformity with generally accepted accounting principles applied on a
basis consistent with prior periods; and (iv) except as disclosed in the
Registration Statement, there has been no dividend or distribution of any kind
declared, paid or made by the Company or any Founding Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company, any of
its subsidiaries or any Founding Company of any class of capital stock.

(h) Independent Accountants. Price Waterhouse LLP, who have
audited certain financial statements as set forth under the heading "Experts"
and expressed their opinion with respect to such financial statements (which
term as used in this Agreement includes the related notes thereto) filed with
the Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants with respect
to the Company and each of the Founding Companies audited by them as required by
the Securities Act. Shilling &

<PAGE>

Kenyon, Inc., who have audited certain financial statements as set forth under
the heading "Experts" and expressed their opinion with respect to such financial
statements (which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of the Registration Statement and
included in the Prospectus, are independent public or certified public
accountants with respect to Air Systems, as required by the Securities Act.

(i) Preparation of the Financial Statements. The separate
financial statements of the Company and each of the Founding Companies, in each
case together with related notes filed with the Commission as a part of the
Registration Statement and included in the Prospectus present fairly the
financial position, results of operations and cash flows of the Company and each
of such Founding Companies and of the Company, respectively, at the dates
specified and for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto, and all adjustments necessary for a fair
presentation of results for such period have been made. Except for the pro forma
financial statements discussed below, no other financial statements are required
to be included in the Registration Statement. No supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the captions "Prospectus Summary -- Summary Pro
Forma Combined Financial Data" and "--Summary Individual Founding Company
Financial Data," "Capitalization" and "Selected Financial Data" fairly present
the information set forth therein on a basis consistent with that of the audited
and pro forma financial statements contained in the Registration Statement and
the books and records of the Company and the Founding Companies, as applicable.
The pro forma combined financial statements of the Company and the Founding
Companies together with the related notes thereto included under the captions
"Prospectus Summary--Summary Pro Forma Combined Financial Data," "Selected
Financial Data," "Capitalization" and "Enfinity Corporation Unaudited Pro Forma
Combined Financial Statements" and elsewhere in the Prospectus and in the
Registration Statement present fairly the information contained therein, have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly presented on
the pro forma bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.

(j) Incorporation and Good Standing of the Company, the
Acquisition Subsidiaries and the Founding Companies. Each of the Company, the
Acquisition Subsidiaries and the Founding Companies has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, in the case of the Company, to enter into and perform its
obligations under this Agreement. Each of the Company, the Acquisition
Subsidiaries and the Founding Companies is duly

<PAGE>

qualified as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change. All of the issued and outstanding capital stock of each
Acquisition Subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim. As of the First
Closing Date (as hereinafter defined), after giving effect to the Founding
Company Mergers, all of the outstanding shares of the capital stock of each of
the Founding Companies and any subsidiary of any of the Founding Companies will
be owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim; and no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital stock or
ownership interests in any of the Founding Companies are outstanding. As of the
date hereof, the Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed on
Exhibit 21 to the Registration Statement. Except as described in the
Registration Statement and the Prospectus, the Company is not party to any
agreement or understanding, written or oral, regarding the acquisition of, or of
an interest in, any corporation, firm, partnership, joint venture, association
or other entity.

(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in the
Prospectus). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. Upon completion of the Founding Company Mergers in the manner
described in the Registration Statement, the shares of Common Stock of the
Company to be issued in the Founding Company Mergers will be duly authorized,
validly issued and fully paid and non-assessable. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those described in the Prospectus. Except as may be
restricted by relevant state law with respect to the need for sufficient
surplus, none of the Acquisition Subsidiaries or the Founding Companies is
currently prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on its capital stock, or from
transferring any of the property or assets of any such Acquisition Subsidiary or

<PAGE>

Founding Company to the Company. The description of the Company's stock option,
stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.

(l) Stock Exchange Listing. The Common Shares have been approved
for listing on the New York Stock Exchange, subject only to official notice of
issuance.

(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. None of the Company, any of the
Acquisition Subsidiaries or any of the Founding Companies is in violation of its
charter or by-laws or is in default (or, with the giving of notice or lapse of
time, would be in default) ("Default") under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which
the Company, any Acquisition Subsidiary or any Founding Company is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company, any Acquisition Subsidiary or any Founding Company is subject
(each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The
Company's execution, delivery and performance of this Agreement and each
Agreement and Plan of Organization (as defined below) and consummation of the
transactions contemplated hereby and thereby and by the Prospectus (i) have been
duly authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws of the Company, any
Acquisition Subsidiary or any Founding Company, (ii) will not conflict with or
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company, any Acquisition Subsidiary or any Founding Company pursuant to, or
require the consent of any other party to, any Existing Instrument, except for
such conflicts, breaches, Defaults, liens, charges or encumbrances as would not,
individually or in the aggregate, result in a Material Adverse Change and except
for such consents as have been or will, prior to the First Closing Date, be
obtained or, if not obtained, will not, individually or in the aggregate, result
in a Material Adverse Change; and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company, any Acquisition Subsidiary or any Founding Company. No consent,
approval, authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency, is required for
the Company's execution, delivery and performance of this Agreement or any
Agreement and Plan of Organization and consummation of the transactions
contemplated hereby or thereby and by the Prospectus, except such as are
required under the Securities Act, applicable state securities or blue sky laws
and by the National Association of Securities Dealers, Inc. (the "NASD").

(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's

<PAGE>

knowledge, threatened (i) against or affecting the Company, any
Acquisition Subsidiary or any Founding Company, (ii) which has as the subject
thereof any officer or director of, or property owned or leased by, the Company,
any Acquisition Subsidiary or any Founding Company or (iii) relating to
environmental, discrimination, building code or related matters, where in any
such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company or such Acquisition
Subsidiary or such Founding Company and (B) any such action, suit or proceeding,
if so determined adversely, would reasonably be expected to result in a Material
Adverse Change or adversely affect the consummation of the transactions
contemplated by this Agreement. No material labor dispute with the employees of
the Company or any Founding Company exists or, to the best of the Company's
knowledge, is threatened or imminent.

(o) Intellectual Property Rights. The Company, its subsidiaries
and the Founding Companies own or possess sufficient trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and other similar
rights (collectively, "Intellectual Property Rights") necessary to conduct their
businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change.
Except as disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of the Founding Companies has received any notice of
infringement or conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.

(p) All Necessary Permits, etc. The Company, each Acquisition
Subsidiary and each Founding Company possess such valid and current
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their respective
businesses, and none of the Company, any of the Acquisition Subsidiaries or any
of the Founding Companies has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.

(q) Title to Properties. The Company, each Acquisition Subsidiary
and each Founding Company has good and marketable title to all the properties
and assets reflected as owned in the financial statements referred to in Section
1(i) above (or elsewhere in the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company, such Acquisition Subsidiary or such
Founding Company. The real property, improvements, equipment and personal
property held under lease by the Company, any Acquisition Subsidiary or any
Founding Company are held under valid and enforceable leases, with such
exceptions as do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or

<PAGE>

personal property by the Company, such Acquisition Subsidiary or such Founding
Company.

(r) Tax Law Compliance. The Company, each of the Acquisition
Subsidiaries and each of the Founding Companies have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, other than with
respect to any payments being contested in good faith, all of which have been
disclosed in writing to the Representatives. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 1(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company,
any Acquisition Subsidiary or any Founding Company has not been finally
determined.

(s) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and after receipt
of payment for the Common Shares will not be, an "investment company" or a
company "controlled" by or "under common control with" an "investment company"
within the meaning of Investment Company Act.

(t) Insurance. Each of the Company and its subsidiaries and the
Founding Companies maintains insurance in such amounts and with such deductibles
and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiaries and the Founding
Companies against theft, damage, destruction, acts of vandalism and earthquakes.
The Company has no reason to believe that it or any subsidiary or any Founding
Company will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not result in a Material Adverse Change.
Neither the Company nor any Founding Company has been denied any insurance
coverage which it has sought or for which it has applied.

(u) No Price Stabilization or Manipulation. Neither the Company,
nor to the Company's best knowledge, any of its affiliates or any of the
Founding Companies or any of their affiliates has taken or will take, directly
or indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.

(v) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company, any
subsidiary, any

<PAGE>

Founding Company or any other person required to be described in the Prospectus
which have not been described as required.

(w) No Unlawful Contributions or Other Payments. None of the
Company, any of the Acquisition Subsidiaries, any of the Founding Companies or,
to the best of the Company's knowledge, any employee or agent of any such
entity, has made any contribution or other payment to any official of, or
candidate for, any federal, state or foreign office in violation of any law or
of the character required to be disclosed in the Prospectus.

(x) Accounting Systems. The Company and each of the Founding
Companies maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(y) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i) none
of the Company, any of the Acquisition Subsidiaries or any of the Founding
Companies is in violation of any federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "Materials of Environmental Concern"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company, the Acquisition Subsidiaries or
the Founding Companies under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof, nor has the Company, any Acquisition
Subsidiary or any Founding Company received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that the Company, any Acquisition Subsidiary or any Founding Company is
in violation of any Environmental Law; (ii) there is no claim, action or cause
of action filed with a court or governmental authority, no investigation with
respect to which the Company, any Acquisition Subsidiary or any Founding Company
has received written notice, and no written notice received by the Company from
any person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources damages, property
damages, personal

<PAGE>

injuries, attorneys' fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any location owned,
leased or operated by the Company, any Acquisition Subsidiary or any Founding
Company, now or in the past (collectively, "Environmental Claims"), pending or,
to the best of the Company's knowledge, threatened against the Company, any
Acquisition Subsidiary or any Founding Company or any person or entity whose
liability for any Environmental Claim the Company, any Acquisition Subsidiary or
any Founding Company has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's knowledge, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that reasonably
could result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company, any Acquisition Subsidiary or
any Founding Company or against any person or entity whose liability for any
such Environmental Claim the Company, any Acquisition Subsidiary or any Founding
Company has retained or assumed either contractually or by operation of law.

(z) ERISA Compliance. The Company and each of the Founding
Companies and any "employee benefit plan" (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, any Founding Company or their "ERISA Affiliates" (as
defined below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company or a Founding Company, any member
of any group of organizations described in Section 414(b),(c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such Founding
Company is a member. No "reportable event" (as defined under ERISA) has occurred
or is reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, any Founding Company or any of their
ERISA Affiliates. No "employee benefit plan" established or maintained by the
Company, any Founding Company or any of their ERISA Affiliates, if such
"employee benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined under ERISA). Neither the Company, any Founding
Company nor any of their ERISA Affiliates has incurred or reasonably expects to
incur any liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "employee benefit plan" or (ii) Section 412, 4971, 4975
or 4980B of the Code. Each "employee benefit plan" established or maintained by
the Company, any Founding Company or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would cause the
loss of such qualification.

(aa) Agreement and Plan of Organization. The Company has entered into
the agreements (each, an "Agreement and Plan of Organization"), set forth as
Exhibits 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8 and 2.9 to the Registration
Statement, pursuant to which the Company will become the record and beneficial
owner of all of

<PAGE>

the outstanding capital stock of and ownership interests in each of the Founding
Companies by means of a merger of an Acquisition Subsidiary with and into each
of the Founding Companies. Each Agreement and Plan of Organization is in full
force and effect, has been duly and validly authorized, executed and delivered
by the parties thereto, constitutes a valid and binding agreement of the parties
thereto, and is enforceable against the parties thereto in accordance with its
terms and none of the parties thereto is in default in any respect thereunder. A
complete and correct copy of each Agreement and Plan of Organization (including
exhibits and schedules) has been delivered to the Representatives and the
Company will promptly inform the Representatives of any changes therein made
subsequent hereto and prior to the Closing Date.

(ab) Representations in each Agreement and Plan of Organization. The
representations and warranties made in each Agreement and Plan of Organization
by the Company and by each Founding Company and/or its stockholders are true and
correct in all material respects, except for such changes permitted or
contemplated by such Agreement and Plan of Organization.

(ac) Lock-Up Agreements. The Company has obtained from each of the
stockholders of each of the Founding Companies such stockholder's agreement not
to, directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock received in the Founding Company Mergers other than in
accordance with the transfer restrictions provided for in Section 15.1 of each
Agreement and Plan of Organization.

(a) Subchapter S Status. For all periods from its election under
Subchapter S of the Code, until the Closing Date, each of the Founding Companies
that so elected was qualified as an S Corporation pursuant to an election
validly made under Subchapter S of the Code (which election has not been and
will not be revoked or terminated for any such period) and the Company has not
been and will not be subject to federal corporate taxes for such periods. Any
Subchapter S election has been or will be duly terminated prior to or as of the
Closing Date.

Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.

Section 2. Purchase, Sale and Delivery of the Common Shares.

The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On

<PAGE>

the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $___ per share.

The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of NationsBanc Montgomery, 600 Montgomery Street, San Francisco,
California (or such other place as may be agreed to by the Company and the
Representatives) at 6:00 a.m. San Francisco time, on ____________, 1998 or such
other time and date not later than 10:30 a.m. San Francisco time, on
____________, 1998 as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the "First Closing Date").
The Company hereby acknowledges that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10.

The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 1,200,000 Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the

<PAGE>

name of such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.

Public Offering of the Common Shares. The Representatives hereby
advise the Company that the Underwriters intend to offer for sale to the public
upon the terms described in the Prospectus, their respective portions of the
Common Shares as soon after this Agreement has been executed and the
Registration Statement has been declared effective as the Representatives, in
their sole judgment, have determined is advisable and practicable.

Payment for the Common Shares. Payment for the Common Shares shall be
made at the First Closing Date (and, if applicable, at the Second Closing Date)
by wire transfer of immediately available funds to the order of the Company.

It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. NationsBanc Montgomery, individually and not as a Representative of
the Underwriters, may (but shall not be obligated to) make payment for any
Common Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.

Delivery of the Common Shares. The Company shall deliver, or cause to
be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The Company shall also
deliver, or cause to be delivered, to the Representatives for the accounts of
the several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.

<PAGE>

Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered copies of the Prospectus in such quantities and at such places as
the Representatives shall reasonably request.

Section 3. Additional Covenants of the Company. The Company further
covenants and agrees with each Underwriter as follows:

(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending on the
later of the First Closing Date or such date as of which, as in the opinion of
counsel for the Underwriters, the Prospectus is no longer required by law to be
delivered in connection with sales by an Underwriter or dealer (the "Prospectus
Delivery Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.

(b) Securities Act Compliance. After the date of this Agreement,
the Company shall promptly advise the Representatives in writing (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus or the Prospectus, (iii) of the time
and date that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any proceedings to remove,
suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings
for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as applicable,
under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a timely
manner by the Commission.

(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend

<PAGE>

or supplement the Prospectus to comply with law, the Company agrees to promptly
prepare (subject to Section 3(a) hereof), file with the Commission and furnish
at its own expense to the Underwriters and to dealers, amendments or supplements
to the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.

(d) Copies of any Amendments and Supplements to the Prospectus.
The Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may reasonably request.

(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
blue sky or state securities laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Common
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.

(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.

(g) Transfer Agent. The Company shall engage and maintain,
at its expense, a registrar and transfer agent for the Common Stock.

(h) Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering a period of at least
twelve months beginning after the effective date of the Registration Statement
that satisfies the provisions of Section 11(a) of the Securities Act.

(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period, the Company shall file, on a timely basis, with the Commission
and, if required, the New York Stock Exchange, all reports and documents
required to be filed under the Exchange Act. Additionally, the Company shall
include in its filings

<PAGE>

with the Commission all disclosures as may be required under Rule 463 under the
Securities Act as such rule may be amended from time to time.

(j) Agreement Not To Offer or Sell Additional Securities. During
the period of 180 days following the date of the Prospectus, the Company will
not, without the prior written consent of NationsBanc Montgomery (which consent
may be withheld at the sole discretion of NationsBanc Montgomery), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge, transfer
or establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock (other than as contemplated by this
Agreement with respect to the Common Shares); provided, however, that the
Company may issue shares of its Common Stock or options to purchase its Common
Stock, or shares of Common Stock upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus and may issue shares of Common Stock in connection with the
acquisition of additional companies in the energy and indoor environmental
systems and services industry, but only if the holders of such shares, options,
or shares issued upon exercise of such options, agree in writing not to sell,
offer, dispose of or otherwise transfer any such shares or options during such
180-day period without the prior written consent of the Company and provided,
further, the Company will not give its consent to any such sale, offer or
disposition during such 180-day period without the prior written consent of
NationsBanc Montgomery (which consent may be withheld at the sole discretion of
NationsBanc Montgomery).

(k) No Waiver of Founding Company Stockholder Lock-up. The
Company will not (i) waive the provisions of Section 15.1 of any Agreement and
Plan of Organization during the period of 180 days following the date of the
Prospectus without the prior written consent of NationsBanc Montgomery (which
consent may be withheld at the sole discretion of NationsBanc Montgomery), or
(ii) accelerate or otherwise reduce the vesting period of any options issued by
the Company to employees and/or former optionholders of Air Systems.

(l) Future Reports to the Representatives. During the period of
five years after the date of this Agreement the Company will furnish to the
Representatives (i) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies

<PAGE>

of any report or communication of the Company mailed generally to holders of its
capital stock.

(m) Satisfaction of Founding Company Merger Conditions. The
Company will: (i) use its best efforts to satisfy all conditions to consummation
of the Founding Company Mergers as set forth in each Agreement and Plan of
Organization with respect thereto; (ii) use its best efforts to cause each other
party to each such Agreement and Plan of Organization to satisfy all conditions
to the consummation of the Founding Company Mergers; and (iii) promptly notify
the Representatives of the occurrence of any event which may result in the
non-consummation of any of the Founding Company Mergers on the First Closing
Date.

The Representatives, on behalf of the several Underwriters, may, in
their sole discretion, waive in writing the performance by the Company of any
one or more of the foregoing covenants or extend the time for their performance.

Section 4. Payment of Expenses. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
under this Agreement and in connection with the transactions contemplated hereby
and in connection with the Founding Company Mergers, including without
limitation (i) all expenses incident to the issuance and delivery of the Common
Shares (including all printing and engraving costs), (ii) all fees and expenses
of the registrar and transfer agent of the Common Stock, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Common Shares to the Underwriters, (iv) all fees and expenses of the
Company's counsel, independent public or certified pubic accountants and other
advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, (vi) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Common Shares for offer and sale under
the blue sky laws, and, if requested by the Representatives, preparing and
printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares (which legal fees, together with the legal fees of Underwriters'
Counsel described in Section 4(vi), shall not exceed $7,500), (viii) the fees
and expenses associated with including the Common Shares on the New York Stock
Exchange, and (ix) all other fees, costs and expenses referred to in Item 14 of
Part II of the Registration Statement. Except as provided in this Section 4,
Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.

<PAGE>

Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing Date
as though then made and, with respect to the Optional Common Shares, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:

(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Price Waterhouse LLP, independent
public or certified public accountants for the Company, and each of the Founding
Companies other than Air Systems, and from Shilling & Kenyon, Inc., independent
or certified public accountants for Air Systems, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus (and the
Representative shall have received an additional __ conformed copies of such
accountants' letters for each of the several Underwriters). The specified date
referred to therein for the carrying out of procedures shall be no more than
five days prior to the date of this Agreement.

(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:

(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed
a post-effective amendment to the Registration Statement containing
the information required by such Rule 430A, and such post-effective
amendment shall have become effective; or, if the Company elected to
rely upon Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed a Term
Sheet with the Commission in the manner and within the time period
required by such Rule 424(b);

(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or
any post-effective amendment to the Registration Statement, shall be
in

<PAGE>

effect and no proceedings for such purpose shall have been instituted
or threatened by the Commission; and

(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.

(c) No Material Adverse Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, in the judgment of the
Representatives there shall not have occurred any Material Adverse Change.

(d) Opinion of Counsel for the Company. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of Morgan, Lewis & Bockius LLP, counsel for the Company, dated
as of such Closing Date, the form of which is attached as Exhibit A (and the
Representatives shall have received an additional __ conformed copies of such
counsel's legal opinion for each of the several Underwriters).

(e) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Fulbright & Jaworski L.L.P., counsel for the
Underwriters, dated as of such Closing Date, with respect to such matters as are
customarily contained in such opinion (and the Representatives shall have
received an additional __ conformed copies of such counsel's legal opinion for
each of the several Underwriters).

(f) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate of the Company executed by the Chairman of the Board, Chief
Executive Officer or President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company, dated as of such Closing Date, to the
effect set forth in subsections (b)(ii) and (c) of this Section 5, and further
to the effect that:

(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material
Adverse Change;

(ii) the representations, warranties and covenants of the Company
set forth in Section 1 of this Agreement are true and correct with
the same force and effect as though expressly made on and as of such
Closing Date; and

(iii) the Company has, in all material respects, complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.

<PAGE>

(g) Bring-down Comfort Letter. On each of the First Closing Date and
the Second Closing Date the Representatives shall have received from Price
Waterhouse LLP, independent public or certified public accountants for the
Company, and each of the Founding Companies other than Air Systems, and from
Shilling & Kenyon, Inc., independent or certified public accountants for Air
Systems, a letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than five days prior to the First Closing Date or Second
Closing Date, as the case may be (and the Representatives shall have received an
additional __ conformed copies of such accountants' letter for each of the
several Underwriters).

(h) Founding Company Merger Closings. With respect to the Founding
Company Mergers:

(i) Each condition to the obligations of the Company set forth in
Section 9 of each Agreement and Plan of Organization shall have been
satisfied, without waiver or modification, except as may be approved
by the Representatives.

(ii) Each certificate delivered to the Company pursuant to each
Agreement and Plan of Organization shall have also been delivered to
the Representatives.

(iii) Counsel for each of the Founding Companies shall have
furnished to the Representatives a letter, in form and substance
satisfactory to the Representatives, to the effect that they are
entitled to rely on the opinion of such counsel delivered to the
Company pursuant to each Agreement and Plan of Organization as if
such opinion were addressed to them or each such opinion shall be
addressed directly to the Representatives.

(iv) On the First Closing Date, the Representatives shall have
received opinions, in form and substance satisfactory to the
Representatives, from counsel for the Company or counsel for each of
the Founding Companies, to the effect that each of the Founding
Company Mergers pursuant to each Agreement and Plan of Organization
has become effective and that such Agreement and Plan of Organization
has been duly authorized by the Company and the respective Founding
Companies and their respective stockholders, and the compliance in
all material respects of the same with applicable law.

<PAGE>

(v) Each Agreement and Plan of Organization shall be in full
force and effect and none of the parties thereto shall be in default
thereunder. The Representatives shall have received assurances
reasonably satisfactory to them that all documents required to be
filed in the respective states in order to effectuate the
consummation of each Founding Company Merger shall have been approved
for filing by the appropriate authorities in each state and that all
of such Founding Company Merger documents shall be filed
substantially concurrently with the consummation of the transactions
pursuant to this Agreement.

(vi) The execution and the delivery of each Agreement and Plan of
Organization and the consummation of the transactions contemplated
thereby shall have been approved by all regulatory authorities whose
approvals are required by law and any waiting period with respect to
any of the Founding Company Mergers as may be required under the
Hart-Scott-Rodino Antitrust and Improvements Act of 1976, as amended,
shall have expired or terminated.

(i) Lock-Up Agreement from Certain Stockholders of the Company. On
the date hereof, the Company shall have furnished to the Representatives an
agreement in the form of Exhibit B hereto from each director, officer and
certain beneficial owners of Common Stock (as defined and determined according
to Rule 13d-3 under the Exchange Act, except that a 180 day period shall be used
rather than the sixty day period set forth therein), as set forth on Exhibit C
hereto and such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.

(j) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.

Section 6. Reimbursement of Underwriters' Expenses. If this Agreement
is terminated by the Representatives pursuant to Section 5, or clause (i), (v)
or (vi) of Section 11, or if the sale to the Underwriters of the Common Shares
on the First Closing Date is not consummated because of any refusal, inability
or failure on

<PAGE>

the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representatives and the
other Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale
of the Common Shares, including but not limited to reasonable fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.

Section 7. Effectiveness of this Agreement.

This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representative of the effectiveness of the
Registration Statement under the Securities Act.

Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Section 4 hereof, (b) any
Underwriter to the Company, or (c) any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.

Section 8. Indemnification.

(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which such
Underwriter or such controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A or Rule 434 under the Securities Act, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii) upon
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) in whole or
in part upon any inaccuracy in the representations

<PAGE>

and warranties of the Company contained herein; or (iv) in whole or in part upon
any failure of the Company to perform its obligations hereunder or under law; or
(v) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Common Stock
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct; and to reimburse each Underwriter
and each such controlling person for any and all expenses (including the
reasonable fees and disbursements of counsel chosen by NationsBanc Montgomery)
as such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
with respect to any preliminary prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Common Shares, or any
person controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Common Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company may otherwise have.

(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each person named as a prospective director
in the Registration Statement, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 the Exchange Act,
against any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer, prospective director or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such loss, claim, damage,

<PAGE>

liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or arises
out of or is based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer, prospective director or controlling person for any and
all expense (including the reasonable fees and expenses of counsel chosen by the
Company) as such expenses are reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only
information that the Underwriters have furnished to the Company expressly for
use in the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) are the statements set forth (A) as the
last paragraph on the inside front cover page of the Prospectus concerning
stabilization and other transactions by the Underwriters and (B) in the table
after the first paragraph and in the second, sixth and seventh paragraphs under
the caption "Underwriting" in the Prospectus; and the Underwriters confirm that
such statements are correct. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Underwriter may otherwise
have.

(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those

<PAGE>

available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of such indemnifying party's election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (NationsBanc Montgomery in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.

(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.

Section 9. Contribution.

If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the

<PAGE>

relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Common Shares pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.

The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9.

Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to

<PAGE>

contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several, and not joint, in proportion to their respective
underwriting commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each officer and employee of an Underwriter and each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement, each person named
as prospective director in the Registration Statement and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.

Section 10. Default of One or More of the Several Underwriters. If,
on the First Closing Date or the Second Closing Date, as the case may be, any
one or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bear to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representative or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.

As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.

Section 11. Termination of this Agreement. Prior to the First Closing
Date this Agreement may be terminated by the Representative by notice given

<PAGE>

to the Company if at any time (i) trading in or quotation of any of the
Company's securities shall have been suspended or limited by the Commission or
by the New York Stock Exchange, (ii) trading in or quotation of securities
generally on either the Nasdaq Stock Market or the New York Stock Exchange shall
have been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such stock exchanges by the Commission or the
NASD and such suspension or limitation of trading is in effect at the time of
termination; (iii) a general banking moratorium shall have been declared by
any of federal, New York, Delaware or California authorities; (iv) there shall
have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market
the Common Shares in the manner and on the terms described in the Prospectus
or to enforce contracts for the sale of securities; (v) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; or (vi)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have
been insured. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to any Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter
to the Company, or (c) any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and
shall survive such termination.

Section 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.

Section 13. Notices. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:

If to the Representatives:

NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: 415-249-5558

<PAGE>

Attention: Mr. Richard A. Smith

with a copy to:

NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, California 94111
Facsimile: (415) 249-5553
Attention: David A. Baylor, Esq.

If to the Company:

Enfinity Corporation
400 Lake Ridge Drive
Smyrna, Georgia 30082
Facsimile: (770) 444-3355
Attention: Rodney C. Gilbert

Any party hereto may change the address for receipt of communications by giving
written notice to the others.

Section 14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers,
directors, prospective directors and controlling persons referred to in Section
8 and Section 9, and in each case their respective successors, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Common Shares as such from any of the
Underwriters merely by reason of such purchase.

Section 15. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.

Section 16. Governing Law Provisions. (a) THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.

(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California

<PAGE>

in each case located in the City and County of San Francisco (collectively, the
"Specified Courts"), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a "Related Judgment"), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.

Section 17. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.

Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.

<PAGE>

If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.

Very truly yours,

ENFINITY CORPORATION

By:_________________________________
Name:

Title:

The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California as of the date
first above written.

NATIONSBANC MONTGOMERY SECURITIES LLC
LEHMAN BROTHERS, INC.
RAYMOND JAMES & ASSOCIATES, INC.

Acting as Representatives of the
several Underwriters named in
the attached Schedule A.

By: NATIONSBANC MONTGOMERY SECURITIES LLC

By:_________________________________
Name:
Title:

<PAGE>

SCHEDULE A

<TABLE>
<CAPTION>
Number of
Firm Common
Shares to be
Underwriters Purchased
<S> <C>

NationsBanc Montgomery Securities LLC . . . . . . . . . . . . .

Lehman Brothers, Inc. . . . . . . . . . . . . . . . . . . . . .

Raymond James & Associates, Inc. . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,000,000
==========
</TABLE>

<PAGE>

EXHIBIT A

Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement.

References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.

(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.

(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement. The Company and each of the Acquisition
Subsidiaries has all necessary authorizations, approvals, consents,
licenses, certificates and permits of and from all federal and state
governmental or regulatory bodies or officials, to conduct all the
activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its businesses, all as described in the Registration
Statement and the Prospectus, and no such authorization, approval, consent,
order, license, certificate or permit contains a materially burdensome
restriction other than as disclosed in the Registration Statement and the
Prospectus.

(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction set forth in
a schedule to such opinion.

(iv) Each of the Acquisition Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business and, to
the best knowledge of such counsel, is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction set forth in a schedule to such opinion.

(v) All of the issued and outstanding capital stock of each
Acquisition Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or, to the best knowledge of such counsel, any
pending or threatened claim.

A-1

<PAGE>

(vi) The Company's authorized, issued and outstanding capital stock is
as set forth under the heading "Capitalization" in the Prospectus. The
authorized capital stock of the Company (including the Common Stock)
conforms as to legal matters to the description thereof set forth in the
Prospectus. All of the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and, to the
best knowledge of such counsel, have been issued in compliance in all
material respects with the registration requirements of federal securities
laws. The form of certificate used to evidence the Common Stock is in due
and proper form, complies with all applicable requirements of the charter
and by-laws of the Company and the General Corporation Law of the State of
Delaware. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
and exercised thereunder set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.

(vii) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (a) by
operation of the charter or by-laws of the Company or the General
Corporation Law of the State of Delaware or (b) any contract known to such
counsel to which the Company is a party.

(viii) The Underwriting Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to
indemnification and contribution thereunder may be limited by applicable
law and public policy considerations and except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.

(ix) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company
pursuant to the Underwriting Agreement against payment of the consideration
set forth therein, will be validly issued, fully paid and nonassessable.
The shares of Common Stock to be issued in connection with the Founding
Company Mergers have been duly authorized for issuance and, when issued and
delivered by the Company in connection with the Founding Company Mergers,
will be validly issued, fully paid and nonassessable.

(x) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the
Commission under the Securities Act. To the best knowledge of such counsel,
no stop order suspending the effectiveness of either of the Registration
Statement or the Rule 462(b) Registration Statement, if any, has been
issued under the Securities Act

A-2

<PAGE>

and no proceedings for such purpose have been instituted or are pending or
are contemplated or threatened by the Commission. Any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period
required by such Rule 424(b).

(xi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus and each amendment or supplement to
the Registration Statement and the Prospectus, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules and other financial or accounting data included
therein or in exhibits to the Registration Statement, as to which no
opinion need be rendered) comply as to form in all material respects with
the applicable requirements of the Securities Act.

(xii) The Company has been advised by the New York Stock Exchange that
the Common Shares have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.

(xiii) The statements (a) in the Prospectus under the captions "Risk
Factors--Anti-Takeover Effect of Certain Charter and By-Law Provisions,"
"Management--Executive Compensation; Employment Agreements;
Covenants-Not-to-Compete," "--1998 Long-Term Incentive Plan," "Certain
Transactions," "Description of Capital Stock" and "Shares Eligible for
Future Sale" and (b) in Item 14 and Item 15 of the Registration Statement,
insofar as such statements constitute matters of law, summaries of legal
matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, have been reviewed by such counsel and
fairly present and summarize, in all material respects, the matters
referred to therein.

(xiv) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.

(xv) To the best knowledge of such counsel, there are no contracts or
other agreements required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto; and the
descriptions thereof and references thereto in the Registration Statement
and Prospectus are accurate in all material respects.

(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, which has not been obtained is required for the Company's
execution, delivery and performance of the Underwriting Agreement and of
each Agreement and

A-3

<PAGE>

Plan of Organization and consummation of the transactions contemplated
thereby and by the Prospectus, except as required under the Securities Act
and the securities or blue sky laws of any jurisdiction, and by the NASD.

(xvii) The execution and delivery of the Underwriting Agreement and of
each Agreement and Plan of Organization by the Company and the performance
by the Company of its obligations thereunder (other than performance by the
Company of its obligations under the indemnification section of the
Underwriting Agreement, as to which no opinion need be rendered) (a) have
been duly authorized by all necessary corporate action on the part of the
Company; (b) will not result in any violation of the provisions of the
charter or by-laws of the Company or any Acquisition Subsidiary; (c) will
not constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, to the best
knowledge of such counsel, any other material Existing Instrument; and (d)
to the best knowledge of such counsel, will not result in any violation of
(i) any law or administrative regulation normally applicable to
transactions of the sort contemplated by the Underwriting Agreement and
each Agreement and Plan of Organization or (ii) administrative or court
decree known to such counsel to which the Company is a party or by which it
or its properties are expressly bound.

(xviii) The Company is not, and after receipt of payment for the
Common Shares will not be, an "investment company" or a company
"controlled" by or "under common control with" an " investment company"
within the meaning of Investment Company Act.

(xix) Except as disclosed in the Prospectus under the caption "Shares
Eligible for Future Sale," to the best knowledge of such counsel, there are
no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by the Underwriting Agreement, except
for such rights as have been duly waived.

(xx) To the best knowledge of such counsel, neither the Company nor
any of the Acquisition Subsidiaries is (a) in violation of its charter or
by-laws or any law, administrative regulation or administrative or court
decree applicable to the Company or (b) in Default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any material Existing Instrument, except in each such case for such
violations or Defaults as would not, individually or in the aggregate,
result in a Material Adverse Change.

(xxi) Each Agreement and Plan of Organization has been duly and
validly authorized, executed and delivered by the Company, is the valid and
binding agreement of the Company and is enforceable against the Company in
accordance with its terms except as such enforcement may be subject to (a)

A-4

<PAGE>

bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting or relating to enforcement of creditors' rights generally and (b)
general equitable principles, and none of the parties thereto is in default
in any respect thereunder. To the best knowledge of such counsel, none of
the parties thereto is in default in any respect under any Agreement
and Plan of Organization. After giving effect to the Founding Company
Mergers, all of the outstanding shares of the capital stock of each of the
Founding Companies will be owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim and, to the
best knowledge of such counsel, no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership interests
in any of the Founding Companies are outstanding.

In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants
for the Company and with representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus, and any
supplements or amendments thereto, and related matters were discussed and,
although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as
specified above), and any supplements or amendments thereto, on the basis
of the foregoing (relying as to materiality in part on the representations
of officers of the Company and the Founding Companies contained in
certificates of such officers), nothing has come to their attention which
would lead them to believe that either the Registration Statement or any
amendments thereto, at the time the Registration Statement or such
amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the Second
Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no belief as to the financial statements or schedules or other
financial or accounting data derived therefrom, included in the
Registration Statement or the Prospectus or any amendments or supplements
thereto).

In rendering such opinion, such counsel may provide that its opinion
is limited to matters governed by the laws of New York and the General
Corporation Law of the State of Delaware, and the federal law of the United
States. In rendering such opinion, such counsel may rely

A-5

<PAGE>

(A) as to matters involving the Founding Companies, on the opinions of counsel
to each of the Founding Companies, provided that in lieu of such reliance,
Morgan, Lewis & Bockius LLP may provide separate opinions of such counsel so
long as such opinions are addressed to the Underwriters and provided further
that, in each case, Morgan, Lewis & Bockius LLP shall state that they believe
that they and the Underwriters are justified in relying on such other counsel
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company, the transfer agent and public officials,
copies of which have been provided to the Representatives.

A-6

<PAGE>

<PAGE>
EXHIBIT 5

[Letterhead of Morgan, Lewis & Bockius LLP]

July 13, 1998

Enfinity Corporation
400 Lake Ridge Drive
Smyrna, Georgia 30082

Re: Issuance of 9,200,000 Shares of Common Stock
pursuant to Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as counsel to Enfinity Corporation, a Delaware
corporation (the 'Company'), in connection with the preparation and filing
with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the 'Act'), of a Registration Statement on Form S-1 (the
'Registration Statement') relating to the public offering by the Company of an
aggregate of 9,200,000 shares (including 1,200,000 shares subject to an
over-allotment option) (the 'Shares') of the Company's Common Stock, $.01 par
value per share.

In so acting, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of (a) the Amended and Restated
Certificate of Incorporation of the Company, (b) the By-laws of the Company
and (c) such other documents, records, certificates and other instruments of
the Company as in our judgment are necessary or appropriate for purposes of
this opinion.

Based on the foregoing, we are of the following opinion:

1. The Company is a corporation duly incorporated
and validly existing in good standing under the
laws of Delaware.

2. The Shares have been duly authorized by the Company
and, when issued and paid for as contemplated by
the Registration Statement, will be duly and
validly issued and fully paid and non-assessable.

<PAGE>

Enfinity Corporation
July 13, 1998
Page 2

We render the foregoing opinion as members of the Bar of the State
of New York and express no opinion as to any law other than the corporate
law of the State of Delaware.

We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption 'Legal Matters' in
the Registration Statement. In giving this consent, we do not admit that
we are acting within the category of persons whose consent is required under
Section 7 of the Act.

Very truly yours,

/s/ Morgan, Lewis & Bockius LLP

<PAGE>

ENFINITY CORPORATION

1998 LONG-TERM INCENTIVE PLAN

1. Purpose. The purpose of this 1998 Long-Term Incentive Plan (the
"Plan") of Enfinity Corporation, a Delaware corporation (the "Company"), is to
advance the interests of the Company and its stockholders by providing a means
to attract, retain, motivate and reward directors, officers, employees and
consultants of and service providers to the Company and its subsidiaries and to
enable such persons to acquire or increase a proprietary interest in the
Company, thereby promoting a closer identity of interests between such persons
and the Company's stockholders.

2. Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock
granted as a bonus or in lieu of other awards, Dividend Equivalents and Other
Stock-Based Awards are set forth in Section 6 of the Plan. Such awards, together
with any other right or interest granted to a Participant under the Plan, are
termed "Awards." For purposes of the Plan, the following additional terms shall
be defined as set forth below:

(1) "Award Agreement" means any written agreement, contract, notice or
other instrument or document evidencing an Award.

(2) "Beneficiary" shall mean the person, persons, trust or trusts which
have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant's death or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

(3) "Board" means the Board of Directors of the Company.

(4) A "Change in Control" shall be deemed to have occurred if:

(1) the date of the acquisition by any "person" (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding
the Company or any of its subsidiaries or affiliates or any employee
benefit plan sponsored by any of the foregoing, of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more
of either (x) the then outstanding shares of common stock of the Company
or (y) the then outstanding voting securities entitled to vote generally
in the election of directors; or

(2) the date the individuals who constitute the Board as of the
date of the Initial Public Offering (the "Incumbent Board") cease for
any reason to constitute at least a majority of the members of the
Board, provided that any individual becoming a director subsequent

<PAGE>

to the effective date of this Agreement whose election, or nomination
for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board (other than any individual whose nomination for election to
Board membership was not endorsed by the Company's management prior
to, or at the time of, such individual's initial nomination for
election) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or

(3) the consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of all or a
substantial portion of the Company's assets, a reverse stock split of
outstanding voting securities, the issuance of shares of stock of the
Company in connection with the acquisition of the stock or assets of
another entity, provided, however, that a Change in Control shall not
occur under this clause (iii) if consummation of the transaction would
result in at least 70% of the total voting power represented by the
voting securities of the Company (or, if not the Company, the entity
that succeeds to all or substantially all of the Company's business)
outstanding immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the Exchange
Act) by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power
of each such continuing holder relative to other such continuing holders
not substantially altered in the transaction.

(5) "Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor provisions and regulations thereto.

(6) "Committee" means the committee appointed by the Board to administer
the Plan, or if no committee is appointed, the Board.

(7) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include rules thereunder and successor provisions and rules thereto.

(8) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or proce dures as shall be established from time to
time by the Committee, provided, however, that (i) if the Stock is listed on a
national securities exchange or quoted in an interdealer quotation system, the
Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock on such date (or, if there was no trading or quotation in
the Stock on such date, on the next preceding date on which there was trading or
quotation) as provided by one of such organizations, (ii) the "fair market
value" of Stock on the date on which shares of Stock are first issued and sold
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission shall be the Initial Public Offering price of
the shares so issued and sold, as set forth in the first final prospectus used
in such offering and (iii) the "fair market value" of Stock prior to the date of
the Initial Public Offering shall be as determined by the Board.

<PAGE>

(9) "Initial Public Offering" shall mean an initial public offering of
shares of Stock in a firm commitment underwriting registered with the Securities
and Exchange Commission in compliance with the provisions of the 1933 Act.

(10) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.

(11) "Participant" means a person who, at a time when eligible under
Section 5 hereof, has been granted an Award under the Plan.

(12) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

(13) "Stock" means the Common Stock, par value $.01, of the Company and
such other securities as may be substituted for Stock or such other securities
pursuant to Section 4.

3. Administration.

(1) Authority of the Committee. Except as otherwise provided below, the
Plan shall be administered by the Committee. The Committee shall have full and
final authority to take the following actions, in each case subject to and
consistent with the provisions of the Plan:

(1) to select persons to whom Awards may be granted;

(2) to determine the type or types of Awards to be granted to
each such person;

(3) to determine the number of Awards to be granted, the
number of shares of Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not
limited to, any exercise price, grant price or purchase price, any
restriction or condition, any schedule for lapse of restrictions or
conditions relating to transferability or forfeiture, exercisability or
settlement of an Award, and waivers or accelerations thereof,
performance conditions relating to an Award (including performance
conditions relating to Awards not intended to be governed by Section
7(f) and waivers and modifications thereof), based in each case on such
considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;

(4) to determine whether, to what extent and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Stock, other Awards, or other property, or an
Award may be canceled, forfeited, or surrendered;

<PAGE>

(5) to determine whether, to what extent and under what
circumstances cash, Stock, other Awards or other property payable with
respect to an Award will be deferred either automatically, at the
election of the Committee or at the election of the Participant;

(6) to determine the restrictions, if any, to which Stock
received upon exercise or settlement of an Award shall be subject
(including lock-ups and other transfer restrictions), may condition the
delivery of such Stock upon the execution by the Participant of any
agreement providing for such restrictions;

(7) to prescribe the form of each Award Agreement, which need
not be identical for each Participant;

(8) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;

(9) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement or other instrument
hereunder; and

(10) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.

Other provisions of the Plan notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting awards to directors who
serve on the Committee (subject to Section 8), and the may perform any function
of the Committee under the Plan for any other purpose, including without
limitation for the purpose of ensuring that transactions under the Plan by
Participants who are then subject to Section 16 of the Exchange Act in respect
of the Company are exempt under Rule 16b-3. In any case in which the Board is
performing a function of the Committee under the Plan, each reference to the
Committee herein shall be deemed to refer to the Board, except where the context
otherwise requires.

(2) Manner of Exercise of Committee Authority. Any action of the
Committee with respect to the Plan shall be final, conclusive and binding on all
persons, including the Company, subsidiaries of the Company, Participants, any
person claiming any rights under the Plan from or through any Participant and
stockholders, except to the extent the Committee may subsequently modify, or
take further action not consistent with, its prior action. If not specified in
the Plan, the time at which the Committee must or may make any determination
shall be determined by the Committee, and any such determination may thereafter
be modified by the Committee (subject to Section 9(e)). The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee.
Except as provided under Section 7(f), the Committee may delegate to officers or
managers of the Company or any subsidiary of the Company the authority, subject
to such terms as the Committee

<PAGE>

shall determine, to perform such functions as the Committee may determine, to
the extent permitted under applicable law.

(3) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any
subsidiary, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained
by the Company to assist in the administration of the Plan. No member of the
Committee, or any officer or employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Company acting on
its behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination or
interpretation.

4. Stock Subject to Plan.

(1) Amount of Stock Reserved. The total amount of Stock that may be
subject to outstanding awards, determined immediately after the grant of any
Award, shall not exceed 13.5% of the total number of shares of Stock outstanding
at the effective time of such grant. Notwithstanding the foregoing, the number
of shares that may be delivered upon the exercise of ISOs shall not exceed
2,200,000, provided, however, that shares subject to ISOs shall not be
deemed delivered if such ISOs are forfeited, expire or otherwise terminate
without delivery of shares to the Participant. If an Award valued by reference
to Stock may only be settled in cash, the number of shares to which such Award
relates shall be deemed to be Stock subject to such Award for purposes of this
Section 4(a). Any shares of Stock delivered pursuant to an Award may consist, in
whole or in part, of authorized and unissued shares, treasury shares or shares
acquired in the market for a Participant's Account.

(2) Annual Per-Participant Limitations. During any calendar year, no
Participant may be granted Awards that may be settled by delivery of more than
750,000 shares of Stock, subject to adjustment as provided in Section 4(c). In
addition, with respect to Awards that may be settled in cash (in whole or in
part), no Participant may be paid during any calendar year cash amounts relating
to such Awards that exceed the greater of the Fair Market Value of the number of
shares of Stock set forth in the preceding sentence at the date of grant or the
date of settlement of Award. This provision sets forth two separate limitations,
so that Awards that may be settled solely by delivery of Stock will not operate
to reduce the amount of cash-only Awards, and vice versa; nevertheless, Awards
that may be settled in Stock or cash must not exceed either limitation.

(3) Adjustments. In the event that the Committee shall determine that
any recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or exchange of Stock or other
securities, Stock dividend or other special, large and non-recurring dividend or
distribution (whether in the form of cash, securities or other property),
liquidation, dissolution, or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants

<PAGE>

under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of Stock
reserved and available for Awards under Section 4(a), including shares reserved
for ISOs, (ii) the number and kind of shares of Stock to be subject to Options
granted pursuant to Section 8, (iii) the number and kind of shares of Stock
specified in the Annual Per-Participant Limitations under Section 4(b), (iv) the
number and kind of shares of outstanding Restricted Stock or other outstanding
Award in connection with which shares have been issued, (v) the number and kind
of shares that may be issued in respect of other outstanding Awards and (vi) the
exercise price, grant price or purchase price relating to any Award. (or, if
deemed appropriate, the Committee may make provision for a cash payment with
respect to any outstanding Award). In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria included in,
Awards (including, without limitation, cancellation of unexercised or
outstanding Awards, or substitution of Awards using stock of a successor or
other entity) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence and events
constituting a Change in Control) affecting the Company or any subsidiary or the
financial statements of the Company or any subsidiary, or in response to changes
in applicable laws, regulations, or accounting principles.

5. Eligibility. Directors, officers and employees of the Company and its
subsidiaries, and persons who provide consulting or other services to the
Company deemed by the Committee to be of substantial value to the Company, are
eligible to be granted Awards under the Plan. In addition, persons who have been
offered employment by the Company or its subsidiaries, and persons employed by
an entity that the Committee reasonably expects to become a subsidiary of the
Company, are eligible to be granted an Award under the Plan; provided, however,
that such Award shall be canceled if such person fails to commence such
employment, or such entity fails to become a subsidiary, and no payment of value
may be made in connection with such Award until such person has commenced such
employment or until such entity becomes a subsidiary.

6. Specific Terms of Awards.

(1) General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service of the Participant. Except as expressly provided by the Committee
(including for purposes of complying with the requirements of the Delaware
General Corporation Law relating to lawful consideration for the issuance of
shares), no consideration other than services will be required as consideration
for the grant (but not the exercise) of any Award.

(2) Options. The Committee is authorized to grant option to purchase
Stock (including "reload" options automatically granted to offset specified
exercises of Options) on the following terms and conditions ("Options"):

(1) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee.

<PAGE>

(2) Time and Method of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in
part, the methods by which such exercise price may be paid or deemed to
be paid, the form of such payment, including, without limitation, cash,
Stock, other Awards or awards granted under other Company plans or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements, to the extent permitted by applicable
law), and the methods by which Stock will be delivered or deemed to be
delivered to Participants.

(3) Termination of Employment. The Committee shall determine
the period, if any, during which Options shall be exercisable following
a Participant's termination of employment with the Company and its
subsidiaries. For this purpose, any sale of a subsidiary of the Company
pursuant to which it ceases to be a subsidiary of the Company shall be
deemed to be a termination of employment by any Participant employed by
such subsidiary. Unless otherwise determined by the Committee, (i)
during any period that an Option is exercisable following termination of
employment, it shall be exercisable only to the extent it was
exercisable upon such termination of employment, and (ii) if such
termination of employment is for cause, as determined in the discretion
of the Committee, all Options held by the Participant shall immediately
terminate.

(4) Sale of the Company. All Options outstanding under the Plan
shall terminate upon the consummation of any transaction whereby the
Company (or any successor to the Company or substantially all of its
business) becomes a wholly-owned subsidiary of any corporation, unless
such other corporation shall continue or assume the Plan as it relates
to Options then outstanding (in which case such other corporation shall
be treated as the Company for all purposes hereunder, and, pursuant to
Section 4(c), the Committee of such other corporation shall make
appropriate adjustment in the number and kind of shares of Stock subject
thereto and the exercise price per share thereof to reflect consummation
of such transaction). If the Plan is not to be so assumed, the Company
shall notify the Participant of consummation of such transaction at
least ten days in advance thereof.

(5) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirement that no ISO shall be
granted with an exercise price less than 100% (110% for an individual
described in Section 422(b)(6) of the Code) of the Fair Market Value of
a share of Stock on the date of grant and granted no more than ten years
after the effective date of the Plan. If Stock acquired by exercise of
an ISO is sold or otherwise disposed of within two years after the date
of grant of the ISO or within one year after the transfer of such Stock
to the Participant, the holder of the Stock immediately prior to the
disposition shall promptly notify the Company in writing of the date and
terms of the disposition and shall provide such other information
regarding the disposition as the Company may reasonably require in order
to secure any deduction then available against the Company's or any
other corporation's

<PAGE>

taxable income. Each Option granted as an ISO shall be designated as
such in the Award Agreement relating to such Option.

(3) Stock Appreciation Rights. The Committee is authorized to grant
stock appreciation rights on the following terms and conditions ("SARs"):

(1) Right to Payment. An SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the excess
of (A) the Fair Market Value of one share of Stock on the date of
exercise (or, if the Committee shall so determine in the case of any
such right other than one related to an ISO, the Fair Market Value of
one share at any time during a specified period before or after the date
of exercise), over (B) the grant price of the SAR as determined by the
Committee as of the date of grant of the SAR, which, except as provided
in Section 7(a), shall be not less than the Fair Market Value of one
share of Stock on the date of grant.

(2) Other Terms. The Committee shall determine the time or times
at which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by which Stock will be delivered or deemed to be
delivered to Participants, whether or not an SAR shall be in tandem with
any other Award, and any other terms and conditions of any SAR. Limited
SARs that may only be exercised upon the occurrence of a Change in
Control may be granted on such terms, not inconsistent with this Section
6(c), as the Committee may determine. Limited SARs may be either
freestanding or in tandem with other Awards.

(4) Restricted Stock. The Committee is authorized to grant Stock that is
subject to restrictions based on continued employment on the following terms and
conditions ("Restricted Stock"):

(1) Grant and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, if any, as
the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. Except to
the extent restricted under the terms of the Plan and any Award
Agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock or the
right to receive dividends thereon.

(2) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under criteria
established by the Committee) during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be
forfeited and reacquired by the Company; provided, however, that the
Committee may provide, by rule or regulation or in any Award Agreement,
or may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted

<PAGE>

Stock will be waived in whole or in part in the event of termination
resulting from specified causes.

(3) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the name
of the Participant, such certificates may bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, the Company may retain physical possession of the
certificate, in which case the Participant shall be required to have
delivered a stock power to the Company, endorsed in blank, relating to
the Restricted Stock.

(4) Dividends. Dividends paid on Restricted Stock shall be
either paid at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of
such dividends, or the payment of such dividends shall be deferred
and/or the amount or value thereof automatically reinvested in
additional Restricted Stock, other Awards, or other investment vehicles,
as the Committee shall determine or permit the Participant to elect.
Stock distributed in connection with a Stock split or Stock dividend,
and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has
been distributed, unless otherwise determined by the Committee.

(5) Deferred Stock. The Committee is authorized to grant units
representing the right to receive Stock at a future date subject to the
following terms and conditions ("Deferred Stock"):

(1) Award and Restrictions. Delivery of Stock will occur upon
expiration of the deferral period specified for an Award of Deferred
Stock by the Committee (or, if permitted by the Committee, as elected by
the Participant). In addition, Deferred Stock shall be subject to such
restrictions as the Committee may impose, if any, which restrictions may
lapse at the expiration of the deferral period or at earlier specified
times, separately or in combination, in installments or otherwise, as
the Committee may determine.

(2) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service (as determined under criteria
established by the Committee) during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the
Award Agreement evidencing the Deferred Stock), all Deferred Stock that
is at that time subject to such forfeiture conditions shall be
forfeited; provided, however, that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating
to Deferred Stock will be waived in whole or in part in the event of
termination resulting from specified causes.

(6) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements.

<PAGE>

(7) Dividend Equivalents. The Committee is authorized to grant awards
entitling the Participant to receive cash, Stock, other Awards or other property
equal in value to dividends paid with respect to a specified number of shares of
Stock ("Dividend Equivalents"). Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards or other
investment vehicles, and subject to such restrictions on transferability and
risks of forfeiture, as the Committee may specify.

(8) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock and factors that may influence the
value of Stock, as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or any other factors designated by the Committee and Awards valued by
reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries ("Other Stock Based Awards"). The
Committee shall determine the terms and conditions of such Awards. Stock issued
pursuant to an Award in the nature of a purchase right granted under this
Section 6(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Stock,
other Awards, or other property, as the Committee shall determine. Cash awards,
as an element of or supplement to any other Award under the Plan, may be granted
pursuant to this Section 6(h).

7. Certain Provisions Applicable to Awards.

(1) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with or in substitution for any other
Award granted under the Plan or any award granted under any other plan of the
Company, any subsidiary or any business entity to be acquired by the Company or
a subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.

(2) Term of Awards. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).

(3) Form of Payment Under Awards. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Company or a
subsidiary upon the grant, exercise or settlement of an Award may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments or on a deferred basis. Such payments may include,
without limitation,

<PAGE>

provisions for the payment or crediting of reasonable interest on installment or
deferred payments or the grant or crediting of Dividend Equivalents in respect
of installment or deferred payments denominated in Stock.

(4) Rule 16b-3 Compliance.

(1) Six-Month Holding Period. Unless a Participant could
otherwise dispose of equity securities, including derivative securities,
acquired under the Plan without incurring liability under Section 16(b)
of the Exchange Act, equity securities acquired under the Plan must be
held for a period of six months following the date of such acquisition,
provided that this condition shall be satisfied with respect to a
derivative security if at least six months elapse from the date of
acquisition of the derivative security to the date of disposition of the
derivative security (other than upon exercise or conversion) or its
underlying equity security.

(2) Other Compliance Provisions. With respect to a Participant
who is then subject to Section 16 of the Exchange Act in respect of the
Company, the Committee shall implement transactions under the Plan and
administer the Plan in a manner that will ensure that each transaction
by such a Participant is exempt from liability under Rule 16b-3, except
that such a Participant may be permitted to engage in a non-exempt
transaction under the Plan if written notice has been given to the
Participant regarding the non-exempt nature of such transaction. The
Committee may authorize the Company to repurchase any Award or shares of
Stock resulting from any Award in order to prevent a Participant who is
subject to Section 16 of the Exchange Act from incurring liability under
Section 16(b). Unless other wise specified by the Participant, equity
securities, including derivative securities, acquired under the Plan
which are disposed of by a Participant shall be deemed to be disposed of
in the order acquired by the Participant.

(5) Loan Provisions. With the consent of the Committee, and subject at
all times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee or arrange for a loan
or loans to a Participant with respect to the exercise of any Option or other
payment in connection with any Award, including the payment by a Participant of
any or all federal, state or local income or other taxes due in connection with
any Award. Subject to such limitations, the Committee shall have full authority
to decide whether to make a loan or loans hereunder and to determine the amount,
terms and provisions of any such loan or loans, including the interest rate to
be charged in respect of any such loan or loans, whether the loan or loans are
to be with or without recourse against the borrower, the terms on which the loan
is to be repaid and conditions, if any, under which the loan or loans may be
forgiven.

(6) Performance-Based Awards. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(f), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. The performance objectives for an Award subject to this
Section 7(f) shall

<PAGE>

consist of one or more business criteria and a targeted level or levels of
performance with respect to such criteria, as specified by the Committee but
subject to this Section 7(f). Performance objectives shall be objective and
shall otherwise meet the requirements of Section 162(m)(4)(C) of the Code.
Business criteria used by the Committee in establishing performance objectives
for Awards subject to this Section 7(f) shall be selected from among the
following:

(1) Annual return on capital;

(2) Annual earnings or earnings per share;

(3) Annual cash flow provided by operations;

(4) Changes in annual revenues; and/or

(5) Strategic business criteria, consisting of one or
more objectives based on meeting specified revenue,
market penetration, geographic business expansion
goals, cost targets, and goals relating to
acquisitions or divestitures.

The levels of performance required with respect to such business criteria may be
expressed in absolute or relative levels. Achievement of performance objectives
with respect to such Awards shall be measured over a period of not less than one
year nor more than five years, as the Committee may specify. Performance
objectives may differ for such Awards to different Participants. The Committee
shall specify the weighting to be given to each performance objective for
purposes of determining the final amount payable with respect to any such Award.
The Committee may, in its discretion, reduce the amount of a payout otherwise to
be made in connection with an Award subject to this Section 7(f), but may not
exercise discretion to increase such amount, and the Committee may consider
other performance criteria in exercising such discretion. All determinations by
the Committee as to the achievement of performance objectives shall be in
writing. The Committee may not delegate any responsibility with respect to an
Award subject to this Section 7(f).

(7) Acceleration upon a Change of Control. Notwithstanding anything
contained herein to the contrary, all conditions and/or restrictions relating to
the continued performance of services and/or the achievement of performance
objectives with respect to the exercisability or full enjoyment of an Award
shall lapse immediately prior to a Change in Control, provided, however, that
such lapse shall not occur if (i) it is intended that the transaction
constituting such Change in Control be accounted for as a pooling of interests
under Accounting Principles Board Option No. 16 (or any successor thereto), and
operation of this Section 7(g) would otherwise violate Paragraph 47(c) thereof,
or (ii) the Committee, in its discretion, determines that such lapse shall not
occur, provided, further, that the Committee shall not have the discretion
granted in clause (ii) if it is intended that the transaction constituting such
Change in Control be accounted for as a pooling of interests under Accounting
Principles Board Option No. 16 (or any successor thereto), and such discretion
would otherwise violate Paragraph 47(c) thereof.

<PAGE>

8. Options Granted Automatically to Non-Employee Directors.

(a) Initial Grants. An Option to purchase 10,000 shares of Stock will be
automatically granted (i) at the commencement of the Initial Public Offering to
each Non-Employee Director at that date and to each other person who has agreed
to become a director and who, if he or she was serving at the date of the
commencement of the Initial Public Offering, would qualify as a Non-Employee
Director at that date, and (ii) after the Initial Public Offering, at the
effective date of any other director's initial election to the Board of
Directors if he or she qualifies at that date. Notwithstanding the foregoing,
any Option granted at the commencement of the Initial Public Offering shall be
cancelled and forfeited if the Initial Public Offering is not consummated or if,
in the case of an Option granted to a person who has agreed to become a
director, such person does not commence serving as a Non-Employee Director at
or promptly following the closing of the Initial Public Offering.

(b) Annual Grants. Immediately following each annual meeting of the
Company's stockholders occurring after the date of the Initial Public Offering,
each person who at such time is serving as a Non-Employee Director and who was,
immediately prior to such meeting, serving as a Non-Employee Director, shall
receive an Option to purchase 5,000 shares of Stock; provided, however, that no
such Option shall be granted to any Non-Employee Director who was granted an
Option pursuant to Section 8(a) within the three month period preceding such
annual meeting.

(c) Exercise Price. The exercise price per share purchasable upon exercise
of an Option granted under this Section 8 will be equal to 100% of the Fair
Market Value of a share on the date of grant of the Option.

(d) Option Expiration. Each Option granted pursuant to this Section 8 will
expire at the earlier of (i) 10 years after the date of grant or (ii) one year
after the date the Non-Employee Director ceases to serve as a director of the
Company for any reason.

(e) Exercisability. Each Option granted pursuant to this Section 8 shall
become exercisable on the first anniversary of the date the Option is granted
and shall remain exercisable until its expiration pursuant to Section 8(d);
provided, however, that no Option shall become exercisable unless the Non-
Employee Director continued to serve as such throughout the 11 month period
following the date of Option grant, or has ceased to serve as such during such
11 month period by reason of his death or disability.

9. General Provisions.

(1) Compliance With Laws and Obligations. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the requirements of any
applicable securities law, any requirement under any listing agreement between
the Company and any national securities exchange or automated quotation system
or any other law, regulation or contractual obligation of the Company until the
Company is satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing shares of
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be applicable under such laws, regulations and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.

(2) Limitations on Transferability. Awards and other rights under the
Plan will not be transferable by a Participant except by will or the laws of
descent and distribution or to a Beneficiary in the event of the Participant's
death, shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs and SARs
in tandem therewith, shall be exercisable during the lifetime of a Participant
only by such Participant or his guardian or legal representative; provided,
however, that such Awards and other rights (other than ISOs and SARs in tandem
therewith) may be transferred to one or more transferees during the lifetime of
the Participant to the extent and on such terms as then may be permitted by the
Committee.

(3) No Right to Continued Employment or Service. Neither the Plan nor
any action taken hereunder shall be construed as giving any employee, director
or other person the right to be retained in the employ or service of the Company
or any of its subsidiaries, nor shall it interfere in any way with the right of
the Company or any of its subsidiaries to terminate any employee's employment
or other person's service at any time or with the right of the Board or
stockholders to remove any director.

(4) Taxes. The Company and any subsidiary is authorized to withhold from
any Award granted or to be settled, any delivery of Stock in connection with an
Award, any other payment relating to an Award or any payroll or other payment to
a Participant amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations.

(5) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the

<PAGE>

record date is after such Board action if such stockholder approval is required
by any federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to him
(as such rights are set forth in the Plan and the Award Agreement). The
Committee may waive any conditions or rights under, or amend, alter, suspend,
discontinue, or terminate, any Award theretofore granted and any Award Agreement
relating thereto; provided, however, that, without the consent of an affected
Participant, no such action may materially impair the rights of such Participant
under such Award (as such rights are set forth in the Plan and the Award
Agreement).

(6) No Rights to Awards; No Stockholder Rights. No person shall have any
claim to be granted any Award under the Plan (except as set forth in Section 8),
and there is no obligation for uniformity of treatment of Participants and
employees. No Award shall confer on any Participant any of the rights of a
stockholder of the Company unless and until Stock is duly issued or transferred
and delivered to the Participant in accordance with the terms of the Award or,
in the case of an Option, the Option is duly exercised.

(7) Unfunded Status of Awards; Creation of Trusts. The Plan is intended
to constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.

(8) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor any submission of the Plan or amendments thereto to the stockholders
of the Company for approval shall be construed as creating any limitations on
the power of the Board to adopt such other compensatory arrangements as it may
deem desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

(9) No Fractional Shares. No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

(10) Governing Law. The validity, construction and effect of the Plan,
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the

<PAGE>

laws of the State of Delaware, without giving effect to principles of conflicts
of laws, and applicable federal law.

(11) Effective Date; Plan Termination. The Plan shall become effective
as of the date of its adoption by the Board, subject to approval of the
Company's stockholders prior to the commencement of the Initial Public Offering,
and shall continue in effect until terminated by the Board.

<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 18th day of
May, 1998, between Enfinity Corporation, a Delaware corporation ("Enfinity"),
and Rodney C. Gilbert (the "Executive").

WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Executive as the Chairman of the Board of Directors and Chief
Executive Officer of Enfinity on the terms and conditions contained in this
Agreement, and to set forth certain additional agreements between the Executive
and Enfinity.

NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:

1. TERM.

The term of this Agreement shall begin on the closing of Enfinity's
initial public offering and continue for three (3) years from such closing;
provided, however, in the event that such initial public offering of its Common
Stock on Form S-1 (the "IPO") is not closed on or before September 30, 1998,
then (except for Sections 3(e) and 17) this Agreement shall be null and void
without having become effective. Upon the expiration of such initial three-year
period and upon each anniversary date thereof, the term of this Agreement shall
be extended for an additional one-year period unless, not later than two months
prior to each respective renewal date, either party to this Agreement shall have
given notice to the other that this Agreement shall not be so extended .
Notwithstanding the foregoing, the Executive's employment hereunder may be
earlier terminated, as provided in Sections 4 and 13 hereof. The period of time
between the commencement and the termination of the Executive's employment
hereunder shall be referred to herein as the "Employment Period."

2. EMPLOYMENT.

(a) POSITION AND REPORTING. Enfinity hereby employs the Executive for
the Employment Period as its Chairman of the Board of Directors and Chief
Executive Officer on the terms and conditions set forth in this Agreement.

(b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are typically associated with the Executive's position, commensurate with the
authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of Enfinity. Without limiting the generality of the
foregoing, the Executive shall report directly and be responsible to the Board
of Directors of Enfinity (the "Board"). During the Employment Period, the
Executive shall devote his full business time, skill and efforts to the business
of Enfinity. Notwithstanding the foregoing, the Executive may (i) make and
manage passive personal business investments of his choice (in the case of
publicly-held corporations, not to exceed one percent (1%) of the outstanding
voting

<PAGE>

stock without the approval of the Board and not to exceed three percent (3%) of
the outstanding voting stock with the approval of the Board, which approval
shall not be unreasonably withheld or delayed) and serve in any capacity with
any civic, educational or charitable organization, or any trade association,
without seeking or obtaining approval by the Board, provided such activities and
service do not materially interfere or conflict with the performance of his
duties hereunder and (ii) with the approval of the Board, which shall not be
unreasonably be withheld or delayed, serve on the boards of directors of other
corporations. It is understood and agreed that the Executive currently serves on
the boards of directors of AmSouth Bancorporation and Baptist Health Systems
Foundation and need not obtain the approval of the Board in order to continue
such service.

3. COMPENSATION AND BENEFITS.

(a) SALARY. During the Employment Period, Enfinity shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $250,000 per annum, payable
in arrears not less frequently than monthly in accordance with the normal
payroll practices of Enfinity. Such base salary shall be subject to review each
year for possible increase by the Board, but shall in no event be decreased from
its then-existing level during the Employment Period.

(b) ANNUAL BONUS. For 1998 and subsequent years, Enfinity shall
develop, as soon as practicable after the effective date of Enfinity's IPO, a
written incentive bonus plan setting forth reasonable criteria and performance
standards under which the Executive and other officers and key employees will be
eligible to receive year-end bonus awards (the "Bonus Plan"). Executive shall be
entitled under the Bonus Plan to receive a bonus equal to fifty percent (50%) of
his then applicable base salary if the specified criteria and performance
standards are met (the "Minimum Bonus Level") and the Executive shall be
entitled to receive a bonus equal to one hundred percent (100%) of his then
applicable base salary if the specified criteria are exceeded by an amount equal
to or greater than thirty percent (30%) of such specified criteria (the "Maximum
Bonus Level"). In the event that the performance of Enfinity falls between the
Minimum Bonus Level and the Maximum Bonus Level, then the bonus that the
Executive shall be entitled to receive under the Bonus Plan shall be adjusted
accordingly. Enfinity and the Executive agree that the criteria and performance
standards to be established for the fiscal year ended December 31, 1998 shall
take into consideration that Enfinity will not operate as a combined entity
throughout such period. Any bonus payable to the Executive pursuant to the Bonus
Plan shall be paid within 45 days following the end of the applicable fiscal
year. It is understood that the performance criteria for determining actual
bonuses will be determined by the Executive and the Compensation Committee of
the Board (once constituted) but that the criteria and performance standards to
be set under the Bonus Plan will be tied to Enfinity's anticipated results of
operations for the applicable bonus period.

(c) OTHER BENEFITS. The Executive shall be entitled to receive
additional benefits and compensation from Enfinity in such form and to such
extent as specified below:

-2-

<PAGE>

(i) Insurance. The Executive shall be entitled to participate,
at the sole cost and expense of Enfinity, in the medical, disability,
dental, life and other insurance and benefit plans made available by
Enfinity to any of its other officers, directors and key employees.
Without limiting the generality of the foregoing, Enfinity shall
provide to the Executive throughout the Employment Period, at the sole
cost and expense of Enfinity, (i) so-called "Preferred Care" medical
and dental insurance coverage for the Executive, his spouse and other
dependent family members through Blue Cross Blue Shield of Alabama
(with no applicable waiting periods, but subject to ordinary and
reasonable deductibles and co- payments under any plans providing such
coverage), (ii) long-term disability insurance coverage at 60% of the
Executive's then applicable base salary, (iii) term life insurance on
the life of the Executive, payable to such beneficiaries or
beneficiaries selected by the Executive, equal to two times the
Executive's then applicable base salary and (iv) paid vacation of not
less than four weeks per year.

(ii) Business Expenses. Enfinity shall promptly reimburse the
Executive for all business travel and other out-of-pocket expenses
reasonably incurred by the Executive in the performance of the
Executive's services pursuant to this Agreement. All reimbursable
expenses shall be documented in reasonable detail by the Executive upon
submission of any request for reimbursement.

(iii) Other Perquisites. Enfinity shall provide the Executive
with other executive perquisites as may be available to or deemed
appropriate for the Executive by the Board and participation in all
other Enfinity-wide employee benefits as available from time to time.

(d) EXTENDED MEDICAL COVERAGE. Notwithstanding any statement contained
in this Agreement to the contrary, following the Employment Period Enfinity
hereby expressly agrees to provide the Executive, his spouse and eligible
dependent family members with continued, uninterrupted coverage under Enfinity's
group medical and dental plans or policies on the same basis as such coverage
was provided to the Executive during the Employment Period (but at the sole cost
and expense of the Executive, which cost and expense shall not exceed the cost
of such coverage provided to Enfinity's (or any of its successor's) then-active
senior executives) until the latest to occur of (i) the date of the Executive's
65th birthday (or the date upon which the Executive becomes eligible to
participate in the Medicare program of the United States), (ii) the date of the
Executive's spouse's 65th birthday (or the date upon which such spouse becomes
eligible to participate in the Medicare program of the United States) or (iii)
the date on which the Executive's last dependent child ceases to be a dependent
for purposes of participation under such plans; provided that the obligation to
continue to provide such coverage shall terminate at such time as the Executive,
his spouse and any dependents become eligible for coverage under the group
insurance of another employer. In the event that Enfinity shall not maintain
group medical and dental plans or policies throughout the applicable period,
then Enfinity shall arrange for and shall provide equivalent individual
coverage. Notwithstanding any statement contained in this Agreement to the
contrary, the obligations of Enfinity set forth in this Section 3(d) shall
survive any termination or expiration of this Agreement.

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(e) INDEMNIFICATION. In connection with any threatened, pending or
completed claim, demand, liability, action, suit, arbitration or proceeding,
whether civil, criminal, administrative or investigative, or any appeal
therefrom, whether by or in the right of Enfinity or otherwise, arising out of
or relating to the fact that the Executive is or was a director, officer,
employee or agent of Enfinity (or any predecessor of Enfinity, whether or not
incorporated), or is or was serving at the request of Enfinity in any such role
for any other corporation or entity, or by reason of anything done or not done
by the Executive in any such capacity, Enfinity hereby expressly agrees and
shall indemnify and hold harmless the Executive, to the fullest extent
authorized by law, against any and all expenses (including, without limitation,
attorneys' fees and all other costs, expenses or obligations paid or incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal) any such matter), damages, judgments, fines and amounts
paid in settlement, as actually and reasonably incurred by the Executive in
connection therewith. In the event that both the Executive and Enfinity are made
a party to the same action, complaint, suit, arbitration or proceeding, Enfinity
agrees to engage competent and experienced legal counsel reasonably acceptable
to the Executive, and the Executive agrees to use the same legal counsel,
provided that if counsel selected by Enfinity could reasonably be expected to
have a conflict of interest that prevents such counsel from vigorously
representing the Executive, then the Executive shall be entitled to engage
separate legal counsel and Enfinity shall pay all costs, expenses or obligations
paid or incurred in connection with such separate legal counsel. Further, while
the Executive is expected at all times to use the Executive's best efforts to
discharge faithfully his duties under this Agreement, the Executive cannot be
held liable to Enfinity for a breach of his duty of care, acts or omissions made
in good faith or where the Executive has not exhibited intentional misconduct or
performed criminal and fraudulent acts which materially damage the business of
Enfinity. Enfinity shall promptly pay (or advance to the Executive, to the
fullest extent authorized by law) on behalf of and for the Executive, upon
presentation of invoices, any and all amounts for which indemnification is
provided under this Section 3(e). In addition, Enfinity shall purchase and
maintain directors' and officers' liability insurance in an amount and in a form
customarily held by publicly-traded companies situated similarly to Enfinity,
and the Executive shall be a beneficiary of such policy or policies.
Notwithstanding any statement contained in this Agreement to the contrary, the
obligations of Enfinity set forth in this Section 3(e) shall survive any
termination or expiration of this Agreement.

4. TERMINATION OF EMPLOYMENT.

(a) TERMINATION FOR CAUSE. This Agreement and Executive's employment
may be terminated in any one of the following ways:

(i) Death. The death of the Executive shall immediately
terminate this Agreement with no severance compensation due to the
Executive's estate.

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months, then thirty (30) days after receiving written notice
(which notice may occur before or after the end of such six (6) month
period, but which shall not be effective earlier than the last day of
such six (6) month period), Enfinity may terminate the Executive's
employment hereunder provided the Executive is unable to resume his
full-time duties at the conclusion of such notice period. Also, the
Executive may terminate his employment hereunder if his health should
become impaired to an extent that makes the continued performance of
the Executive's duties hereunder hazardous to the Executive's physical
or mental health or life, provided that the Executive shall have
furnished Enfinity with a written statement from the Executive's
doctor to such effect and provided, further, that, at Enfinity's
request made within thirty (30) days of the date of such written
statement, the Executive shall submit to an examination by a doctor
selected by Enfinity who is reasonably acceptable to the Executive or
his doctor and such doctor shall have concurred in the conclusion of
the Executive's doctor. If the two doctors cannot agree as to whether
or not the Executive is so disabled, the two doctors shall designate a
third doctor to examine the Executive and a majority of the three
doctors so selected shall make such determination. In the event this
Agreement is terminated by either party as a result of the Executive's
disability, Enfinity shall continue to compensate the Executive at his
then-current base salary until such time as any applicable waiting
periods under the Executive's long-term disability policy provided by
Enfinity shall be exhausted and the Executive shall be receiving
payments pursuant to such policy.

(iii) Good Cause. Enfinity may terminate this Agreement ten
(10) days after delivery of written notice to the Executive for good
cause, which shall be: (1) the Executive's willful, material and
irreparable breach of this Agreement; (2) the Executive's gross
negligence in the performance or intentional nonperformance (continuing
for ten (10) days after receipt of written notice from Enfinity that
specifically identifies the manner in which Enfinity believes that the
Executive has failed to perform such duties and responsibilities) of
any of the Executive's material duties and responsibilities hereunder;
(3) the Executive's willful dishonesty, fraud or misconduct with
respect to the business or affairs of Enfinity which materially and
adversely affects the operations or reputation of Enfinity; (4) the
Executive's conviction of a felony crime; or (5) chronic alcohol abuse
or illegal drug abuse by the Executive. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for good
cause without (x) reasonable written notice to the Executive setting
forth the reasons for Enfinity's intention to terminate for good cause,
(y) an opportunity for the Executive, together with his legal counsel,
to be heard before the Board, and (z) delivery to the Executive of a
notice of termination on behalf of the Board setting forth the reasons
for such termination. In the event of a termination for good cause, as
enumerated above, the Executive shall have no right to any severance
compensation.

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thirds of the members of the Board. Should the Executive's employment be
terminated by Enfinity without cause during the Employment Period, the Executive
shall receive from Enfinity, in a lump-sum payment due on the effective date of
termination, an amount equal to two times his then applicable base salary, plus
any accrued salary and declared but unpaid bonus and reimbursement of expenses.
If the Executive resigns or otherwise terminates his employment without cause
pursuant to this Section 4(b), the Executive shall receive no severance
compensation.

(c) CHANGE IN CONTROL. In the event of a "Change in Control" of
Enfinity (as defined in Section 13) during the Employment Period, refer to
Section 13 below.

(d) FOR GOOD REASON. In addition to his other rights set forth in this
Agreement, the Executive may terminate this Agreement ten (10) days after
delivery of notice to the Board for "good reason," which shall be (i) a material
diminution during the Employment Period in the Executive's office, duties or
responsibilities (including following any Change in Control) or (ii) a material
breach by Enfinity of this Agreement. Notwithstanding the foregoing, the
Executive may not terminate this Agreement for good reason without providing (x)
reasonable written notice to the Board setting forth the reasons for the
Executive's intention to terminate for good reason, (y) an opportunity for the
Board to meet with the Executive, together with legal counsel and (z) delivery
by the Executive to the Board of a notice of termination for good reason setting
forth the reasons for such termination. Should the Executive terminate his
employment with Enfinity pursuant to this Section 4(d), the Executive shall
receive from Enfinity, in a lump-sum payment due on the effective date of
termination, an amount equal to two times his then applicable base salary, plus
any accrued salary and declared but unpaid bonus and reimbursement of expenses.

a. CONSEQUENCES OF TERMINATION.

(i) Upon termination of this Agreement for any reason provided
above, Enfinity shall pay promptly to the Executive all compensation
earned and all benefits and reimbursements due through the effective
date of termination. Additional compensation subsequent to termination,
if any, will be due and payable to the Executive only to the extent and
in the manner expressly provided in this Agreement. All other rights
and obligations of Enfinity and the Executive under this Agreement
shall cease as of the effective date of termination, except that
Enfinity's obligations under Sections 3(d), 3(e) and 17 hereof
and the Executives obligations under Sections 7, 8 and 9
hereof shall survive any termination or expiration of this Agreement.

(ii) In the event of any termination of the Executive's
employment for any reason, the Executive shall be under no obligation
to seek other employment and there shall be no offset against any
amounts due to the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that the
Executive may obtain. Any amounts due under this Section 4 are in the
nature of severance payments, or liquidated damages, or both, and are
not in the nature of a penalty.

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(iii) Notwithstanding any statement contained in this
Agreement to the contrary, upon any termination or expiration of this
Agreement, other than by Enfinity pursuant to Section 4(a)(iii) (good
cause) or by the Executive pursuant to Section 4(b)(without cause): (x)
any options or rights to purchase securities of Enfinity shall
immediately vest and remain exercisable until the ten year anniversary
of the date of grant of such options or rights and (y) any restrictions
or forfeiture provisions applicable to any securities of Enfinity owned
beneficially or of record by the Executive (or his spouse or estate)
shall immediately lapse.

5. PLACE OF PERFORMANCE.

(a) It is understood that the Executive shall not be required to
relocate from his present residence in order to fulfill his duties and
responsibilities hereunder, provided that the Executive is present at Enfinity's
principal place of business during normal business hours (subject to absences
for business travel and entertainment, vacations and periodic personal matters).
The Executive understands that if he elects to relocate from the Executive's
present residence to the location of Enfinity's principal place of business,
then Enfinity will pay all actual reasonable relocation costs to move the
Executive, his immediate family and their personal property and effects (in each
case grossed up for applicable taxes). Such costs may include, but are not
limited to, moving expenses, temporary lodging expenses prior to moving into a
new permanent residence; all closing costs on the purchase of a residence
(comparable to the Executive's present residence) in the new location. The
general intent of the foregoing is that the Executive shall not personally bear
any out-of-pocket cost as a result of the relocation, with an understanding that
the Executive will use the Executive's best efforts to incur only those costs
which are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of Enfinity and the
personal life of Executive and his family. In addition, to compensate the
Executive for incidental costs associated with such relocation, Enfinity shall
pay to Executive at the time of such relocation an amount equal to two times the
Executive's then applicable monthly salary (grossed up for applicable taxes).

(b) Notwithstanding the above, if the Executive is requested by the
Board to relocate his present residence and the Executive refuses, such refusal
shall not constitute "cause" for termination of this Agreement under the terms
of Section 4(a) and the Executive shall have no liability to Enfinity arising
out of or relating to such decision not to relocate. Further, such decision not
to relocate shall not be considered when the Executive seeks reimbursement for
any travel and other out-of-pocket expenses reasonably incurred by the Executive
in the performance of his duties.

6. STOCK OPTIONS.

At the effective date of Enfinity's IPO, Enfinity shall grant to the
Executive options to acquire 200,000 shares of Enfinity common stock at the
price per share at which such stock is offered to the public in the initial
public offering. Such options shall vest in installments of 50,000 shares at the
effective date of the IPO and on each of the first, second and third
anniversaries of

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the effective date of the IPO. The other terms and conditions of such options
shall be usual and customary and shall be as set forth in a stock option
agreement to be entered into between Enfinity and the Executive.

7. CONFIDENTIALITY.

The Executive agrees that he will not at any time during the Employment
Period hereof or at any time thereafter for any reason, in any fashion, form or
manner, either directly or indirectly, divulge, disclose or communicate to any
person, firm, corporation or other business entity, in any manner whatsoever,
any confidential information or trade secrets concerning the business of
Enfinity, including, without limiting the generality of the foregoing, any
confidential or proprietary techniques, methods or systems of its operation or
management, any information regarding its financial matters, or any other
material non-public information concerning the business of Enfinity, its manner
of operation, its plans or other material data. The provisions of this Section 7
shall not prevent the disclosure or use of or apply to (i) information that is
public knowledge or in the public domain other than as a result of disclosure by
the Executive in breach of this Section 7; (ii) information disseminated by
Enfinity to third parties in the ordinary course of business; (iii) information
lawfully received by the Executive from a third party who, based upon inquiry by
the Executive, is not bound by a confidential relationship to Enfinity; or (iv)
information disclosed under a requirement of law or as compelled or directed by
applicable legal authority.

8. INVENTIONS.

The Executive is hereby retained in a capacity such that the
Executive's responsibilities include the making of technical and managerial
contributions of value to Enfinity. The Executive hereby assigns to Enfinity all
right, title and interest in such contributions and inventions made or conceived
by the Executive alone or jointly with others during the Employment Period that
relate to the business of Enfinity. This assignment shall include (a) the right
to file and prosecute patent applications on such inventions in any and all
countries, (b) the patent applications filed and patents issuing thereon, and
(c) the right to obtain copyright, trademark or trade name protection for any
such work product. The Executive shall promptly and fully disclose all such
contributions and inventions to Enfinity and shall take reasonable steps to
assist Enfinity (at Enfinity's cost) in obtaining and protecting the rights
therein (including patents thereon) in any and all countries; provided, however,
that said contributions and inventions will be the property of Enfinity, whether
or not patented or registered for copyright, trademark or trade name protection,
as the case may be. The Executive hereby agrees to execute any documentation
reasonably requested by Enfinity to be so executed if such request is made in
order to carry out the purpose and terms of this Section 8. Inventions conceived
by the Executive that are not related to the business of Enfinity will remain
the property of the Executive.

9. NON-COMPETITION.

The Executive agrees that he shall not during the Employment Period and
for two years following the Employment Period, without the approval of the
Board, directly or indirectly, alone

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or as partner, joint venturer, officer, director, employee, consultant, agent,
independent contractor or stockholder (other than as provided below) of any
company or business, engage in any "Competitive Business" within the United
States. For purposes of the foregoing, the term "Competitive Business" shall
mean any business involved in providing energy or indoor environmental systems
or services, which is in direct competition with Enfinity in any community in
which Enfinity is doing business. Notwithstanding the foregoing, the Executive
shall not be prohibited during the non-competition period applicable above from
acting as a passive investor in any publicly-held company under the
circumstances described in Section 2(b) hereof. During the period that the above
non-competition restriction applies, the Executive shall not, without the
written consent of Enfinity, solicit or encourage any employee of Enfinity or
any current or future subsidiary or affiliate thereof to terminate his or her
employment.

10. BREACH OF RESTRICTIVE COVENANTS.

The parties agree that a breach or violation of Section 7, 8 or 9
hereof will result in immediate and irreparable injury and harm to the innocent
party, which party shall have, in addition to any and all remedies of law and
other consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.

11. NOTICES.

For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:

(a) If to Enfinity, to such address as shall be its then current
principal place of business.

(b) If to the Executive, to:

Rodney C. Gilbert
3700 Old Leeds Road
Birmingham, Alabama 35213-3818
Telephone: (205) 879-6392
Telecopy: (205) 802-7791

or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.

12. ARBITRATION: LEGAL FEES.

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Except as provided in Section 10 hereof, any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Atlanta, Georgia in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Enfinity shall reimburse
the Executive for all reasonable legal fees and costs and other fees and
expenses that the Executive may incur in respect of any dispute or controversy
arising against Enfinity under or in connection with this Agreement; provided,
however, that Enfinity shall not reimburse any such fees, costs and expenses if
the fact finder determines that an action brought by the Executive was
substantially without merit. Notwithstanding the foregoing, in the event of a
Change of Control, Enfinity shall be unconditionally responsible for legal fees,
costs and expenses with respect to any action brought by the Executive against
Enfinity arising from this Agreement.

13. CHANGE IN CONTROL.

(a) Unless the Executive elects to terminate this Agreement pursuant to
(c) below, the Executive understands and acknowledges that Enfinity may be
merged or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of Enfinity hereunder or
that Enfinity may undergo another type of Change in Control. In the event such a
merger or consolidation or other Change in Control is initiated prior to the end
of the Employment Period, then the provisions of this Section 13 shall be
applicable.

(b) In the event of a pending Change in Control wherein Enfinity and
the Executive have not received written notice at least five (5) business days
prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of
Enfinity's business and/or assets that such successor is willing as of the
closing to assume and agree to perform Enfinity's obligations under this
Agreement in the same manner and to the same extent that Enfinity is hereby
required to perform, then such Change in Control shall be deemed to be a
termination of this Agreement by Enfinity without cause during the Employment
Period and the applicable portions of Section 4(b) will apply; however, under
such circumstances, the amount of the lump-sum severance payment due to the
Executive shall be an amount equal to three times his then applicable base
salary, plus any accrued salary and declared but unpaid bonus and reimbursement
or expenses, and the provisions of Section 9 of this Agreement shall be
effective for two years following such date. Notwithstanding any statement
contained herein to the contrary, Enfinity shall require, as a condition to any
transaction constituting a Change in Control, that any successor to all or any
portion of Enfinity's business and/or assets expressly assume and agree to
perform Sections 3(d), 3(e) and 17 of this Agreement in the same manner and to
the same extent that Enfinity would be required to perform it if no such Change
in Control had taken place.

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reimbursement or expenses, and the provisions of Section 9 of this Agreement
shall be effective for two years following such date. Notwithstanding any
statement contained herein to the contrary, Enfinity shall require, as a
condition to any transaction constituting a Change in Control, that any
successor to all or any portion of Enfinity's business and/or assets expressly
assume and agree to perform Sections 3(d), 3(e) and 17 of this Agreement in the
same manner and to the same extent that Enfinity would be required to perform it
if no such Change in Control had taken place.

(d) For purposes of applying Section 4 hereof under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due the Executive must be
paid in full by Enfinity at or prior to such closing. In addition, immediately
prior to any Change in Control, any options or rights to purchase securities of
Enfinity held by the Executive shall immediately vest and become and remain
fully exercisable and any restrictions or forfeiture provisions applicable to
any securities of Enfinity owned beneficially or of record by the Executive (or
his spouse or estate) shall immediately lapse, such that the Executive, at his
discretion, may exercise such options or rights prior to the Change in Control
and receive the consideration to be received by the stockholders of Enfinity in
connection with the Change in Control or convert such options or rights into
options or rights to purchase equivalent securities of the acquiring corporation
or other entity.

(e) A "Change in Control" shall be deemed to have occurred if:

(i) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) , other than Enfinity or an employee benefit plan of
Enfinity, becomes the beneficial owner (as defined in Rules 13(d)-3 and
13d-5 under the Exchange Act , directly or indirectly, of any voting
security of Enfinity and immediately after such acquisition such
person, directly or indirectly, is the beneficial owner of voting
securities representing 35% or more of the total voting power of all of
the then-outstanding voting securities of Enfinity and has a larger
percentage of voting securities of Enfinity than any other person,
entity or group holding voting securities of Enfinity, unless the
transaction pursuant to which such acquisition is made is approved by
more than two-thirds (2/3) of the Board; or

(ii) the following individuals no longer constitute a majority
of the members of the Board: (A) the individuals who, as of the closing
date of Enfinity's IPO, constitute the Board (the "Original
Directors"); (B) the individuals who thereafter are elected to the
Board and whose election, or nomination for election, to the Board was
approved by a vote of more than two-thirds (2/3) of the Original
Directors then still in office (such directors becoming "Additional
Original Directors" immediately following their election); and (C) the
individuals who are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more
than two-thirds (2/3) of the Original Directors and Additional Original
Directors then still in office (such directors also becoming
"Additional Original Directors" immediately following their election).

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(iii) there shall be consummated any merger or consolidation
of Enfinity in which Enfinity is not the continuing or surviving
corporation or pursuant to which shares of Enfinity's capital stock are
converted into cash, securities or other property, other than a
consolidation or merger of Enfinity in which the holders of Enfinity's
voting stock immediately prior to the consolidation or merger, own at
least 50% of the total voting power represented by the voting
securities of the surviving entity outstanding immediately after such
transaction or any sale, lease, exchange or other transfer (in one
transaction or a series or transaction contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
Enfinity; or

(iv) the stockholders of Enfinity approve a plan of complete
liquidation of Enfinity.

(f) The Executive must be notified in writing by Enfinity at any time
that Enfinity or any member of its Board anticipates that a Change in Control
may take place.

14. WAIVER OF BREACH.

Any waiver of any breach of the Agreement shall not be construed to be
a continuing waiver or consent to any subsequent breach on the part of either
the Executive or of Enfinity.

15. NON-ASSIGNMENT: SUCCESSORS.

Neither party hereto may assign his or its rights or delegate his or
its duties under this Agreement without the prior written consent of the other
party; provided, however, that (i) subject to the rights of the Executive under
Section 13 hereof, this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of Enfinity upon any sale of all or
substantially all of the assets of Enfinity, or upon any merger, consolidation
or reorganization of Enfinity with or into any other corporation, all as though
such successors and assigns of Enfinity and their respective successors and
assigns were Enfinity; (ii) this Agreement shall inure to the benefit of and be
binding upon the heirs, assigns or designees of the Executive to the extent of
any payments due to the Executive hereunder; and (iii) this Agreement shall
inure to the benefit of Enfinity. As used in this Agreement, the term "Enfinity"
shall be deemed to refer to any such successor or assign of Enfinity referred to
in the preceding sentence. Notwithstanding any statement contained in this
Agreement to the contrary, Enfinity agrees to and shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of Enfinity to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that Enfinity would be required to perform it if no such succession had
taken place. This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's legal
representative in the event of mental incapacity or by the Executive's duly
appointed executors or administrators in

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the event of the Executive's death. If the Executive should die while any
amounts are payable to him hereunder, all such amounts unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's estate.

16. WITHHOLDING OF TAXES.

All payments required to be made by Enfinity to the Executive under
this Agreement shall be subject to the withholding of such amounts, if any,
relating to tax, and other payroll deductions as Enfinity may reasonably
determine it should withhold pursuant to any applicable law or regulation.

17. CERTAIN TAX MATTERS.

(a) Notwithstanding any statement contained in this Agreement to the
contrary, upon termination or expiration of this Agreement in connection with a
Change in Control, Enfinity shall reimburse the Executive, on a grossed up
basis, for any excise or similar taxes that the Executive incurs under Section
4999 of the Internal Revenue Code of 1986, as amended (or any successor
statutory provision or rule), and comparable provisions of applicable state
laws, rules or regulations. Such amount shall be paid by Enfinity within ten
(10) days after the Executive delivers a written request for reimbursement
accompanied by a copy of the Executive's tax return(s) showing the excise taxes
actually incurred by the Executive.

(b) The parties hereto stipulate and agree that the Executive has,
pursuant to that subscription agreement dated May 12, 1998 and pursuant to a
verbal agreement between the Executive and Enfinity reached in December 1997,
subscribed for and purchased 11.556413 shares of common stock of Enfinity, par
value $.01 per share (the "Shares"), for an aggregate purchase price of
$1,155.64 (the "Purchase Price"). Enfinity agrees to pay or cause to be paid,
and shall be liable for, and covenants and agrees to defend, indemnify and hold
the Executive harmless (on a grossed up basis for applicable taxes) from and
against, any and all Losses (as defined below) resulting from, arising out of or
relating to or otherwise based upon Taxes (as defined below) that arise out of,
are attributable to, or relate to any claim or determination by the Internal
Revenue Service or other governmental authority that the fair market value of
the Shares on the date the Executive purchased them was greater than the
Purchase Price (such claim or determination an "Indemnified Tax Matter").
Notwithstanding any statement contained in this Agreement to the contrary,
Enfinity agrees to promptly pay, or advance to the Executive for payment,
without regard to when the Executive actually sells any Shares, any and all
amounts for which the Executive is indemnified in this Section 17. As used
herein (i) "Losses" means expenses, damages, judgments, fines, amounts paid in
settlement, liabilities, obligations, losses, penalties, costs, or deficiencies,
including, without limitation, attorneys fees and fees of other professionals,
and all costs, expenses or other obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in (including an
appeal) any hearing, review, litigation or other proceeding or matter arising
out of or relating to Taxes, and (ii) "Taxes" means any income (whether ordinary
or otherwise), alternative minimum, employment, payroll, social security,
unemployment, withholding or other similar tax, assessment or other

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<PAGE>

governmental charge (including, without limitation, all interest and penalties
thereon and additions thereto whether disputed or not) imposed by any federal,
state or local government. The Executive agrees, upon any future sale of the
Shares for cash, to reimburse Enfinity in an amount equal to the actual benefit
of any increase in the tax basis of the Shares disposed of by the Executive as a
result of any payment or payments made by Enfinity pursuant to this Section 17;
provided, however, that the Executive's reimbursement obligation hereunder shall
not exceed the lesser of (1) the aggregate net amount of payments (but without
giving effect to any payments made to "gross up" any tax owed by the Executive)
in respect of Tax liabilities previously made to the Executive by Enfinity
hereunder or (2) the difference between the fair market value of the Shares on
the date the Executive purchased them (as determined by the Internal Revenue
Service or other governmental authority) and the Purchase Price multiplied by a
percentage equal to then-applicable capital gains (as opposed to ordinary
income) rate. The obligation of Enfinity hereunder shall survive any termination
or expiration of this Agreement, any transfer by the Executive of the Shares,
any termination or cessation of the Executive's employment with Enfinity, and
shall, following the Executive's death, inure to the benefit of the Executive's
estate.

18. SEVERABILITY.

To the extent any provision of this Agreement or portion thereof shall
be invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.

19. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

20. GOVERNING LAW.

This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws of the State of Delaware, without giving
effect to the choice of law provisions of such state.

21. ENTIRE AGREEMENT.

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<PAGE>

whether written or oral. This Agreement may be amended or modified only by a
written instrument executed by the Executive and Enfinity.

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<PAGE>

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

ENFINITY CORPORATION

By: /s/ William M. Dillard
---------------------------
Name: William M. Dillard
Title: President

/s/ Rodney C. Gilbert
---------------------------
Rodney C. Gilbert

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<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 10th day of
July, 1998, between Enfinity Corporation, a Delaware corporation ("Enfinity"),
and Marty R. Kittrell (the "Executive").

WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Executive as Executive Vice President and Chief Financial Officer
of Enfinity on the terms and conditions contained in this Agreement, and to set
forth certain additional agreements between the Executive and Enfinity.

NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:

1. TERM.

The term of this Agreement shall begin on the closing of Enfinity's initial
public offering and continue for three (3) years from such closing; provided,
however, in the event that such initial public offering of its Common Stock on
Form S-1 (the "IPO") is not closed on or before September 30, 1998, then (except
for Section 3(d)) this Agreement shall be null and void without having become
effective. Upon the expiration of such initial three-year period and upon each
anniversary date thereof, the term of this Agreement shall be extended for an
additional one-year period unless, not later than two months prior to each
respective renewal date, either party to this Agreement shall have given notice
to the other that this Agreement shall not be so extended . Notwithstanding the
foregoing, the Executive's employment hereunder may be earlier terminated, as
provided in Sections 4 and 13 hereof. The period of time between the
commencement and the termination of the Executive's employment hereunder shall
be referred to herein as the "Employment Period."

2. EMPLOYMENT.

(a) POSITION AND REPORTING. Enfinity hereby employs the Executive for
the Employment Period as its Executive Vice President and Chief Financial
Officer the terms and conditions set forth in this Agreement.

(b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are typically associated with the Executive's position, commensurate with the
authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of Enfinity. Without limiting the generality of the
foregoing, the Executive shall report directly and be responsible to the Chief
Executive Officer of Enfinity. During the Employment Period, the Executive shall
devote his full business time, skill and efforts to the business of Enfinity.
Notwithstanding the foregoing, the Executive may (i) make and manage passive
personal business investments of his choice (in the case of publicly-held
corporations, not to exceed one percent (1%) of the outstanding voting stock
without the approval of the Board of Directors of Enfinity (the "Board") and not
to exceed

<PAGE>

three percent (3%) of the outstanding voting stock with the approval of the
Board, which approval shall not be unreasonably withheld or delayed) and serve
in any capacity with any civic, educational or charitable organization, or any
trade association, without seeking or obtaining approval by the Board, provided
such activities and service do not materially interfere or conflict with the
performance of his duties hereunder and (ii) with the approval of the Board,
which shall not be unreasonably be withheld or delayed, serve on the boards of
directors of other corporations.

3. COMPENSATION AND BENEFITS.

(a) SALARY. During the Employment Period, Enfinity shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $200,000 per annum, payable
in arrears not less frequently than monthly in accordance with the normal
payroll practices of Enfinity. Such base salary shall be subject to review each
year for possible increase by the Compensation Committee of the Board (once
constituted), but shall in no event be decreased from its then-existing level
during the Employment Period.

(b) ANNUAL BONUS. For 1998 and subsequent years, Enfinity shall develop,
as soon as practicable after the effective date of Enfinity's IPO, a written
incentive bonus plan setting forth reasonable criteria and performance standards
under which the Executive and other officers and key employees will be eligible
to receive year-end bonus awards (the "Bonus Plan"). Executive shall be entitled
under the Bonus Plan to receive a bonus equal to forty percent (40%) of his then
applicable base salary if the specified criteria and performance standards are
met and the Executive shall be entitled to receive a bonus equal to eighty
percent (80%) of his then applicable base salary if the specified criteria are
exceeded by an amount equal to or greater than thirty percent (30%) of such
specified criteria. Any bonus payable to the Executive pursuant to the Bonus
Plan shall be paid within 45 days following the end of the applicable fiscal
year. It is understood that the performance criteria for determining actual
bonuses will be determined by the Executive and the Compensation Committee of
the Board (once constituted) but that the criteria and performance standards to
be set under the Bonus Plan will be tied to Enfinity's anticipated results of
operations for the applicable bonus period.

(c) OTHER BENEFITS. The Executive shall be entitled to receive
additional benefits and compensation from Enfinity in such form and to such
extent as specified below:

(ii) Business Expenses. Enfinity shall promptly reimburse the
Executive for all business travel and other out-of-pocket expenses reasonably
incurred by the Executive in the performance of the Executive's services
pursuant to this Agreement. All reimbursable expenses shall be documented in
reasonable detail by the Executive upon submission of any request for
reimbursement.

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(iii) Other Perquisites. Enfinity shall provide the Executive
with other executive perquisites as may be available to or deemed appropriate
for the Executive by the Board and participation in all other Enfinity-wide
employee benefits as available from time to time, including, but not limited to,
four (4) weeks of paid vacation per year.

(d) INDEMNIFICATION. In connection with any threatened, pending or
contemplated claim, demand, liability, action, suit, arbitration or proceeding,
whether civil, criminal, administrative or investigative, or any appeal
therefrom, whether by or in the right of Enfinity or otherwise, arising out of
or relating to the fact that the Executive is or was a director, officer,
employee or agent of Enfinity (or any predecessor of Enfinity, whether or not
incorporated), or is or was serving at the request of Enfinity in any such role
for any other corporation or entity, or by reason of anything done or not done
by the Executive in any such capacity, Enfinity hereby expressly agrees and
shall indemnify and hold harmless the Executive, to the fullest extent
authorized by law, against any and all expenses (including, without limitation,
attorneys' fees and all other costs, expenses or obligations paid or incurred in
connection with investigating, defending, being a witness in or participating in
(including on appeal) any such matter), damages, judgments, fines and amounts
paid in settlement, as actually and reasonably incurred by the Executive in
connection therewith. In the event that both the Executive and Enfinity are made
a party to the same action, complaint, suit, arbitration or proceeding, Enfinity
agrees to engage competent and experienced legal counsel reasonably acceptable
to the Executive, and the Executive agrees to use the same legal counsel,
provided that if counsel selected by Enfinity could reasonably be expected to
have a conflict of interest that prevents such counsel from vigorously
representing the Executive, then the Executive shall be entitled to engage
separate legal counsel and Enfinity shall pay all costs, expenses or obligations
paid or incurred in connection with such separate legal counsel. Further, while
the Executive is expected at all times to use the Executive's best efforts to
discharge faithfully his duties under this Agreement, the Executive cannot be
held liable to Enfinity for a breach of his duty of care, acts or omissions made
in good faith or where the Executive has not exhibited intentional misconduct or
performed criminal and fraudulent acts which materially damage the business of
Enfinity. Enfinity shall promptly pay (or advance to the Executive, to the
fullest extent authorized by law) on behalf of and for the Executive, upon
presentation of invoices, any and all amounts for which indemnification is
provided under this Section 3(d). In addition, Enfinity shall purchase and
maintain directors' and officers' liability insurance in an amount and in a form
customarily held by publicly-traded companies situated similarly to Enfinity,
and the Executive shall be a beneficiary of such policy or policies.
Notwithstanding any statement contained in this Agreement to the contrary, the
obligations of Enfinity set forth in this Section 3(d) shall survive any
termination or expiration of this Agreement.

4. TERMINATION OF EMPLOYMENT.

(a) TERMINATION FOR CAUSE. This Agreement and Executive's employment may
be terminated in any one of the following ways:

(i) Death. The death of the Executive shall immediately terminate
this Agreement with no severance compensation due to the Executive's estate.

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<PAGE>

(ii) Disability. If, as a result of incapacity due to physical or mental
illness or injury, as reasonably determined by the Executive's physician, the
Executive shall have been absent from the Executive's full-time duties hereunder
for six (6) consecutive months, then thirty (30) days after receiving written
notice (which notice may occur before or after the end of such six (6) month
period, but which shall not be effective earlier than the last day of such six
(6) month period), Enfinity may terminate the Executive's employment hereunder
provided the Executive is unable to resume his full-time duties at the
conclusion of such notice period. Also, the Executive may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of the Executive's duties hereunder hazardous to
the Executive's physical or mental health or life, provided that the Executive
shall have furnished Enfinity with a written statement from the Executive's
doctor to such effect and provided, further, that, at Enfinity's request made
within thirty (30) days of the date of such written statement, the Executive
shall submit to an examination by a doctor selected by Enfinity who is
reasonably acceptable to the Executive or his doctor and such doctor shall have
concurred in the conclusion of the Executive's doctor. If the two doctors cannot
agree as to whether or not the Executive is so disabled, the two doctors shall
designate a third doctor to examine the Executive and a majority of the three
doctors so selected shall make such determination. In the event this Agreement
is terminated by either party as a result of the Executive's disability,
Enfinity shall continue to compensate the Executive at his then-current base
salary until such time as any applicable waiting periods under the Executive's
long-term disability policy provided by Enfinity shall be exhausted and the
Executive shall be receiving payments pursuant to such policy.

(iii) Good Cause. Enfinity may terminate this Agreement at any
time ten (10) days after delivery of written notice to the Executive for good
cause, which shall be: (1) the Executive's willful, material and irreparable
breach of this Agreement; (2) the Executive's gross negligence in the
performance or intentional nonperformance (in either case continuing for ten
(10) days after receipt of written notice from Enfinity that specifically
identifies the manner in which Enfinity believes that the Executive has failed
to perform such duties and responsibilities) of any of the Executive's material
duties and responsibilities hereunder; (3) the Executive's willful dishonesty,
fraud or misconduct with respect to the business or affairs of Enfinity which
materially and adversely affects the operations or reputation of Enfinity; (4)
the Executive's conviction of a felony crime; or (5) chronic alcohol abuse or
illegal drug abuse by the Executive. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for good cause without (x)
reasonable written notice to the Executive setting forth the reasons for
Enfinity's intention to terminate for good cause, (y) an opportunity for the
Executive, together with his legal counsel, to be heard before the Board, and
(z) delivery to the Executive of a notice of termination on behalf of the Board
setting forth the reasons for such termination. In the event of a termination
for good cause, as enumerated above, the Executive shall have no right to any
severance compensation.

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<PAGE>

Enfiniuy without cause during the Employment Period, the Executive shall receive
from Enfinity, in a lump-sum payment due on the effective date of termination,
an amount equal to two times his then applicable annual base salary, plus any
accrued salary and declared but unpaid bonus and reimbursement of expenses. If
the Executive resigns or otherwise terminates his employment without cause
pursuant to this Section 4(b), the Executive shall receive no severance
compensation.

(c) CHANGE IN CONTROL. In the event of a "Change in Control" of Enfinity
(as defined in Section 13) during the Employment Period, refer to Section 13
below.

(d) FOR GOOD REASON. In addition to his other rights set forth in this
Agreement, the Executive may terminate this Agreement at any time ten (10) days
after delivery of notice to the Board for "good reason," which shall be (i) a
material diminution during the Employment Period in the Executive's office,
duties or responsibilities (including following any Change in Control), (ii) a
material breach by Enfinity of this Agreement or (iii) Enfinity's requiring that
the Executive change the location of his job or office (without the Executive's
express, written consent), so that he would be located more than 50 miles from
his office/ job in Atlanta as contemplated by this Agreement. Notwithstanding
the foregoing, the Executive may not terminate this Agreement for good reason
without providing (x) reasonable written notice to the Board setting forth the
reasons for the Executive's intention to terminate for good reason, (y) an
opportunity for the Board to meet with the Executive, together with legal
counsel, and (z) delivery by the Executive to the Board of a notice of
termination for good reason setting forth the reasons for such termination.
Should the Executive terminate his employment with Enfinity pursuant to this
Section 4(d), the Executive shall receive from Enfinity, in a lump-sum payment
due on the effective date of termination, an amount equal to two times his then
applicable annual base salary, plus any accrued salary and declared but unpaid
bonus and reimbursement of expenses.

(e) CONSEQUENCES OF TERMINATION.

(i) Upon termination of this Agreement for any reason provided
above, Enfinity shall pay promptly to the Executive all compensation earned and
all benefits and reimbursements due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to the Executive only to the extent and in the manner expressly provided
in this Agreement. All other rights and obligations of Enfinity and the
Executive under this Agreement shall cease as of the effective date of
termination, except that Enfinity's obligations under Sections 3(d) and 17
hereof and the Executive's obligations under Sections 7, 8 and 9 hereof shall
survive any termination or expiration of this Agreement.

(ii) In the event of any termination of the Executive's
employment for any reason, the Executive shall be under no obligation to seek
other employment and there shall be no offset against any amounts due to the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this Section 4 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.

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(iii) Notwithstanding any statement contained in this Agreement to the
contrary, upon any termination or expiration of this Agreement, other than by
Enfinity pursuant to Section 4(a)(iii) (good cause) or by the Executive pursuant
to Section 4(b)(without cause): (x) any options or rights to purchase securities
of Enfinity shall immediately vest and remain exercisable until the ten year
anniversary of the date of grant of such options or rights and (y) any
restrictions or forfeiture provisions applicable to any securities of Enfinity
owned beneficially or of record by the Executive (or his spouse or estate) shall
immediately lapse.

5. PLACE OF PERFORMANCE.

It is understood that the Executive will be required to relocate to Atlanta,
Georgia from his present residence in order to fulfill his duties and
responsibilities hereunder. Enfinity will pay all actual reasonable relocation
costs to move the Executive, his immediate family and their personal property
and effects (in each case grossed up for applicable taxes). Such costs may
include, but are not limited to, moving expenses, temporary lodging expenses
prior to moving into a new permanent residence and all closing costs on the
purchase of a residence (comparable to the Executive's present residence) in the
new location. The general intent of the foregoing is that the Executive shall
not personally bear any out-of-pocket cost as a result of the relocation, with
an understanding that the Executive will use the Executive's best efforts to
incur only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation with minimal disruption to the business affairs
of Enfinity and the personal life of Executive and his family. In addition, to
compensate the Executive for incidental costs associated with such relocation,
Enfinity shall pay to Executive at the time of such relocation an amount equal
to two times the Executive's then applicable monthly salary (grossed up for
applicable taxes).

6. STOCK OPTIONS.

At the effective date of Enfinity's IPO, Enfinity shall grant to the Executive
options to acquire 100,000 shares of Enfinity common stock at the price per
share at which such stock is offered to the public in the initial public
offering. Such options shall vest in installments of 25,000 shares at the
effective date of the IPO and on each of the first, second and third
anniversaries of the effective date of the IPO. The other terms and conditions
of such options shall be usual and customary and shall be as set forth in a
stock option agreement to be entered into between Enfinity and the Executive.

7. CONFIDENTIALITY.

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<PAGE>

this Section 7 shall not prevent the disclosure or use of or apply to (i)
information that is public knowledge or in the public domain other than as a
result of disclosure by the Executive in breach of this Section 7; (ii)
information disseminated by Enfinity to third parties in the ordinary course of
business; (iii) information lawfully received by the Executive from a third
party who, based upon inquiry by the Executive, is not bound by a confidential
relationship to Enfinity; (iv) information disclosed under a requirement of law
or as compelled or directed by applicable legal authority; or (v) information
disclosed by Executive necessary to perform his duties and responsibilities for
and on behalf of Enfinity.

8. INVENTIONS.

The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions of
value to Enfinity. The Executive hereby assigns to Enfinity all right, title and
interest in such contributions and inventions made or conceived by the Executive
alone or jointly with others during the Employment Period that relate to the
business of Enfinity. This assignment shall include (a) the right to file and
prosecute patent applications on such inventions in any and all countries, (b)
the patent applications filed and patents issuing thereon, and (c) the right to
obtain copyright, trademark or trade name protection for any such work product.
The Executive shall promptly and fully disclose all such contributions and
inventions to Enfinity and shall take reasonable steps to assist Enfinity (at
Enfinity's cost) in obtaining and protecting the rights therein (including
patents thereon) in any and all countries; provided, however, that said
contributions and inventions will be the property of Enfinity, whether or not
patented or registered for copyright, trademark or trade name protection, as the
case may be. The Executive hereby agrees to execute any documentation reasonably
requested by Enfinity to be so executed if such request is made in order to
carry out the purpose and terms of this Section 8. Inventions conceived by the
Executive that are not related to the business of Enfinity will remain the
property of the Executive.

9. NON-COMPETITION.

The Executive agrees that he shall not during the Employment Period and for two
years following the Employment Period, without the approval of the Board,
directly or indirectly, alone or as partner, joint venturer, officer, director,
employee, consultant, agent, independent contractor or stockholder (other than
as provided below) of any company or business, engage in any "Competitive
Business" within the United States. For purposes of the foregoing, the term
"Competitive Business" shall mean any business involved in providing energy or
indoor environmental systems or services, which is in direct competition with
Enfinity in any community in which Enfinity is doing business. Notwithstanding
the foregoing, the Executive shall not be prohibited during the non-competition
period applicable above from acting as a passive investor in any publicly-held
company under the circumstances described in Section 2(b) hereof. During the
period that the above non-competition restriction applies, the Executive shall
not, without the written consent of Enfinity, solicit or encourage any employee
of Enfinity or any current or future subsidiary or affiliate thereof to
terminate his or her employment.

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<PAGE>

10. BREACH OF RESTRICTIVE COVENANTS.

The parties agree that a breach or violation of Section 7, 8 or 9 hereof will
result in immediate and irreparable injury and harm to the innocent party, which
party shall have, in addition to any and all remedies of law and other
consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.

11. NOTICES.

(a) If to Enfinity, to such address as shall be its then current
principal place of business.

(b) If to the Executive, to:

Marty R. Kittrell
1408 Loniker Drive
Raleigh, NC 27615

Telephone: (919) 847-8841
Telecopy: (919) 847-3286

or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.

12. ARBITRATION: LEGAL FEES.

Except as provided in Section 10 hereof, any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Atlanta, Georgia in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Enfinity shall reimburse
the Executive for all reasonable legal fees and costs and other fees and
expenses that the Executive may incur in respect of any dispute or controversy
arising against Enfinity under or in connection with this Agreement; provided,
however, that Enfinity shall not reimburse any such fees, costs and expenses if
the fact finder determines that an action brought by the Executive was
substantially without merit. Notwithstanding the foregoing, in the event of a
Change of Control, Enfinity shall be unconditionally responsible for legal fees,
costs and expenses with respect to any action brought by the Executive against
Enfinity arising from this Agreement.

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13. CHANGE IN CONTROL.

(b) In the event of a pending Change in Control wherein Enfinity and the
Executive have not received written notice at least five (5) business days prior
to the anticipated closing date of the transaction giving rise to the Change in
Control from the successor to all or a substantial portion of Enfinity's
business and/or assets that such successor is willing as of the closing to
assume and agree to perform Enfinity's obligations under this Agreement in the
same manner and to the same extent that Enfinity is hereby required to perform,
then such Change in Control shall be deemed to be a termination of this
Agreement by Enfinity without cause during the Employment Period and the
applicable portions of Section 4(b) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to the Executive
shall be an amount equal to three times his then applicable annual base salary,
plus any accrued salary and declared but unpaid bonus and reimbursement or
expenses, and the provisions of Section 9 of this Agreement shall be effective
for two years following such date. Notwithstanding any statement contained
herein to the contrary, Enfinity shall require, as a condition to any
transaction constituting a Change in Control, that any successor to all or any
portion of Enfinity's business and/or assets expressly assume and agree to
perform Section 3(d) of this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such Change in Control had
taken place.

(c) In any Change in Control situation, the Executive may elect to
terminate this Agreement by providing written notice to Enfinity at least five
(5) business days prior to the anticipated closing of the transaction giving
rise to the Change in Control. In such case, the applicable provisions of
Section 4(b) will apply as though Enfinity had terminated the Agreement without
cause during the Employment Period; however, under such circumstances, the
amount of the lump-sum severance payment due to the Executive shall be an amount
equal to two times his then applicable annual base salary, plus any accrued
salary and declared but unpaid bonus and reimbursement or expenses, and the
provisions of Section 9 of this Agreement shall be effective for two years
following such date. Notwithstanding any statement contained herein to the
contrary, Enfinity shall require, as a condition to any transaction constituting
a Change in Control, that any successor to all or any portion of Enfinity's
business and/or assets expressly assume and agree to perform Section 3(d) of
this Agreement in the same manner and to the same extent that Enfinity would be
required to perform it if no such Change in Control had taken place.

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severance period or upon the Executive's obtaining coverage under another
medical and dental plan, whichever occurs first. Notwithstanding the foregoing,
to the extent that the Executive was making payments in connection with such
benefits, the Executive shall continue to be responsible for such payments for
the duration of such extended coverage.

(e) For purposes of applying Section 4 hereof under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due the Executive must be
paid in full by Enfinity at or prior to such closing. In addition, immediately
prior to any Change in Control, any options or rights to purchase securities of
Enfinity held by the Executive shall immediately vest and become and remain
fully exercisable and any restrictions or forfeiture provisions applicable to
any securities of Enfinity owned beneficially or of record by the Executive (or
his spouse or estate) shall immediately lapse, such that the Executive, at his
discretion, may exercise such options or rights prior to the Change in Control
and receive the consideration to be received by the stockholders of Enfinity in
connection with the Change in Control or convert such options or rights into
options or rights to purchase equivalent securities of the acquiring corporation
or other entity.

(f) A "Change in Control" shall be deemed to have occurred if:

(i) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than Enfinity or an employee benefit plan of Enfinity, becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, directly or indirectly, of any voting security of Enfinity and immediately
after such acquisition, such person, directly or indirectly, is the beneficial
owner of voting securities representing 35% or more of the total voting power of
all of the then-outstanding voting securities of Enfinity and has a larger
percentage of voting securities of Enfinity than any other person, entity or
group holding voting securities of Enfinity, unless the transaction pursuant to
which such acquisition is made is approved by more than two-thirds (2/3) of the
Board; or

(ii) the following individuals no longer constitute a majority of
the members of the Board: (A) the individuals who, as of the closing date of
Enfinity's IPO, constitute the Board (the "Original Directors"); (B) the
individuals who thereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more than
two-thirds (2/3) of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following their election);
and (C) the individuals who are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more than
two-thirds (2/3) of the Original Directors and Additional Original Directors
then still in office (such directors also becoming "Additional Original
Directors" immediately following their election).

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consolidation or merger of Enfinity in which the holders of Enfinity's voting
stock immediately prior to the consolidation or merger, own at least 50% of the
total voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction or any sale, lease, exchange or
other transfer (in one transaction or a series or transaction contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of Enfinity; or

(iv) the stockholders of Enfinity approve a plan of complete
liquidation of Enfinity.

(g) The Executive must be notified in writing by Enfinity at any time
that Enfinity or any member of its Board anticipates that a Change in Control
may take place.

14. WAIVER OF BREACH.

Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either the
Executive or of Enfinity.

15. NON-ASSIGNMENT: SUCCESSORS.

Neither party hereto may assign his or its rights or delegate his or its duties
under this Agreement without the prior written consent of the other party;
provided, however, that (i) subject to the rights of the Executive under Section
13 hereof, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of Enfinity upon any sale of all or substantially all of
the assets of Enfinity, or upon any merger, consolidation or reorganization of
Enfinity with or into any other corporation, all as though such successors and
assigns of Enfinity and their respective successors and assigns were Enfinity;
(ii) this Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of the Executive to the extent of any payments due to the
Executive hereunder; and (iii) this Agreement shall inure to the benefit of
Enfinity. As used in this Agreement, the term "Enfinity" shall be deemed to
refer to any such successor or assign of Enfinity referred to in the preceding
sentence. Notwithstanding any statement contained in this Agreement to the
contrary, Enfinity agrees to and shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Enfinity to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such succession had taken
place. This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's legal representative in the
event of mental incapacity or by the Executive's duly appointed executors or
administrators in the event of the Executive's death. If the Executive should
die while any amounts are payable to him hereunder, all such amounts unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's estate.

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16. WITHHOLDING OF TAXES.

All payments required to be made by Enfinity to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, and other payroll deductions as Enfinity may reasonably determine it
should withhold pursuant to any applicable law or regulation.

17. CERTAIN TAX MATTERS.

(b) The parties hereto stipulate and agree that the Executive has,
pursuant to that subscription agreement dated February 2, 1998, subscribed for
and purchased 2.012611 shares of common stock of Enfinity, par value $.01 per
share (the "Shares"), for an aggregate purchase price of $201.26 (the "Purchase
Price"). Enfinity agrees to pay or cause to be paid, and shall be liable for,
and covenants and agrees to defend, indemnify and hold the Executive harmless
(on a grossed up basis for applicable taxes) from and against, any and all
Losses (as defined below) resulting from, arising out of or relating to or
otherwise based upon Taxes (as defined below) that arise out of, are
attributable to, or relate to any claim or determination by the Internal Revenue
Service or other governmental authority that the fair market value of the Shares
on the date the Executive purchased them was greater than the Purchase Price
(such claim or determination an "Indemnified Tax Matter"). Notwithstanding any
statement contained in this Agreement to the contrary, Enfinity agrees to
promptly pay, or advance to the Executive for payment, without regard to when
the Executive actually sells any Shares, any and all amounts for which the
Executive is indemnified in this Section 17. As used herein (i) "Losses" means
expenses, damages, judgments, fines, amounts paid in settlement, liabilities,
obligations, losses, penalties, costs, or deficiencies, including, without
limitation, attorneys fees and fees of other professionals, and all costs,
expenses or other obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including an appeal) any
hearing, review, litigation or other proceeding or matter arising out of or
relating to Taxes, and (ii) "Taxes" means any income (whether ordinary or
otherwise), alternative minimum, employment, payroll, social security,
unemployment, withholding or other similar tax, assessment or other governmental
charge (including, without limitation, all interest and penalties thereon and
additions thereto whether disputed or not) imposed by any federal, state or
local government. The Executive agrees, upon any future sale of the Shares for
cash, to reimburse Enfinity in an amount equal to the actual benefit of any
increase in the tax basis of the Shares disposed of by the Executive as a result
of any payment or payments made by Enfinity pursuant to this Section 17;
provided, however, that the Executive's reimbursement obligation hereunder shall

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not exceed the lesser of (1) the aggregate net amount of payments (but without
giving effect to any payments made to "gross up" any tax owed by the Executive)
in respect of Tax liabilities previously made to the Executive by Enfinity
hereunder or (2) the difference between the fair market value of the Shares on
the date the Executive purchased them (as determined by the Internal Revenue
Service or other governmental authority) and the Purchase Price multiplied by a
percentage equal to then-applicable capital gains (as opposed to ordinary
income) rate. The obligation of Enfinity hereunder shall survive any termination
or expiration of this Agreement, any transfer by the Executive of the Shares,
any termination or cessation of the Executive's employment with Enfinity, and
shall, following the Executive's death, inure to the benefit of the Executive's
estate.

18. SEVERABILITY.

To the extent any provision of this Agreement or portion thereof shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.

19. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

20. GOVERNING LAW.

This Agreement shall be construed, interpreted and enforced in accordance with
the internal laws of the State of Delaware, without giving effect to the choice
of law provisions of such state.

21. ENTIRE AGREEMENT.

This Agreement constitutes the entire agreement by Enfinity and the Executive
with respect to the subject matter hereof and supersedes any and all prior
agreements or understandings between the Executive and Enfinity with respect to
the subject matter hereof, whether written or oral. This Agreement may be
amended or modified only by a written instrument executed by the Executive and
Enfinity.

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<PAGE>

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

ENFINITY CORPORATION

By: /s/ William M. Dillard
-------------------------------
Name: William M. Dillard
Title: President

/s/ Marty R. Kittrell
-------------------------------
Marty R. Kittrell

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<PAGE>

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this ____ day of
____, 1998, between Enfinity Corporation, a Delaware corporation ("Enfinity"),
and William M. Dillard (the "Executive").

WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Executive as the President and Chief Operating Officer of Enfinity
on the terms and conditions contained in this Agreement, and to set forth
certain additional agreements between the Executive and Enfinity.

NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:

1. TERM.

The term of this Agreement shall begin on the closing of Enfinity's initial
public offering and continue for three (3) years from such closing. Upon the
expiration of such initial three-year period and upon each anniversary date
thereof, the term of this Agreement shall be extended for an additional one-year
period unless, not later than three months prior to each respective renewal
date, either party to this Agreement shall have given notice to the other that
this Agreement shall not be so extended . Notwithstanding the foregoing, the
Executive's employment hereunder may be earlier terminated, as provided in
Sections 4 and 12 hereof. The period of time between the commencement and the
termination of the Executive's employment hereunder shall be referred to herein
as the "Employment Period."

2. EMPLOYMENT.

(a) POSITION AND REPORTING. Enfinity hereby employs the Executive for
the Employment Period as President and its Chief Operating Officer on the terms
and conditions set forth in this Agreement.

(b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are typically associated with the Executive's position, commensurate with the
authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of Enfinity. Without limiting the generality of the
foregoing, the Executive shall report directly and be responsible to the Chief
Executive Officer of Enfinity. During the Employment Period, the Executive shall
devote his full business time, skill and efforts to the business of Enfinity.
Notwithstanding the foregoing, the Executive may (i) make and manage passive
personal business investments of his choice (in the case of publicly-held
corporations, not to exceed one percent (1%) of the outstanding voting stock
without the approval of the Board of Directors of Enfinity (the "Board") and not
to exceed three percent (3%) of the outstanding voting stock with the approval
of the Board, which

<PAGE>

approval shall not be unreasonably withheld or delayed) and serve in any
capacity with any civic, educational or charitable organization, or any trade
association, without seeking or obtaining approval by the Board, provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder and (ii) with the approval of the Board,
which shall not be unreasonably be withheld or delayed, serve on the boards of
directors of other corporations.

3. COMPENSATION AND BENEFITS.

(a) SALARY. During the Employment Period, Enfinity shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $200,000 per annum, payable
in arrears not less frequently than monthly in accordance with the normal
payroll practices of Enfinity. Such base salary shall be subject to review each
year for possible increase by the Compensation Committee of the Board (once
constituted), but shall in no event be decreased from its then-existing level
during the Employment Period.

(c) OTHER BENEFITS. The Executive shall be entitled to receive
additional benefits and compensation from Enfinity in such form and to such
extent as specified below:

(ii) Business Expenses. Enfinity shall promptly reimburse the
Executive for all business travel and other out-of-pocket expenses reasonably
incurred by the Executive in the performance of the Executive's services
pursuant to this Agreement. All reimbursable expenses shall be documented in
reasonable detail by the Executive upon submission of any request for
reimbursement.

(iii) Other Perquisites. Enfinity shall provide the Executive
with other executive perquisites as may be available to or deemed appropriate
for the Executive by the Board and

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participation in all other Enfinity-wide employee benefits as available from
time to time, including, but not limited to, four (4) weeks of paid vacation per
year.

4. TERMINATION OF EMPLOYMENT.

(a) TERMINATION FOR CAUSE. This Agreement and Executive's employment may
be terminated in any one of the following ways:

(i) Death. The death of the Executive shall immediately terminate
this Agreement with no severance compensation due to the Executive's estate.

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<PAGE>

(ii) Disability. If, as a result of incapacity due to physical or mental
illness or injury, as reasonably determined by the Executive's physician, the
Executive shall have been absent from the Executive's full-time duties hereunder
for six (6) consecutive months, then thirty (30) days after receiving written
notice (which notice may occur before or after the end of such six (6) month
period, but which shall not be effective earlier than the last day of such six
(6) month period), Enfinity may terminate the Executive's employment hereunder
provided the Executive is unable to resume his full-time duties at the
conclusion of such notice period. Also, the Executive may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of the Executive's material duties hereunder
hazardous to the Executive's physical or mental health or life, provided that
the Executive shall have furnished Enfinity with a written statement from the
Executive's doctor to such effect and provided, further, that, at Enfinity's
request made within thirty (30) days of the date of such written statement, the
Executive shall submit to an examination by a doctor selected by Enfinity who is
reasonably acceptable to the Executive or his doctor and such doctor shall have
concurred in the conclusion of the Executive's doctor. If the two doctors cannot
agree as to whether or not the Executive is so disabled, the two doctors shall
designate a third doctor to examine the Executive and a majority of the three
doctors so selected shall make such determination. In the event this Agreement
is terminated by either party as a result of the Executive's disability,
Enfinity shall continue to compensate the Executive at his then-current base
salary until such time as any applicable waiting periods under the Executive's
long-term disability policy provided by Enfinity shall be exhausted and the
Executive shall be receiving payments pursuant to such policy.

(iii) Good Cause. Enfinity may terminate this Agreement at any
time ten (10) days after delivery of written notice to the Executive for good
cause, which shall be: (1) the Executive's willful, material and irreparable
breach of this Agreement; (2) the Executive's gross negligence in the
performance or intentional nonperformance (in either case, continuing for ten
(10) days after receipt of written notice from Enfinity that specifically
identifies the manner in which Enfinity believes that the Executive has failed
to perform such duties and responsibilities) of any of the Executive's material
duties and responsibilities hereunder; (3) the Executive's willful dishonesty,
fraud or misconduct with respect to the business or affairs of Enfinity which
materially and adversely affects the operations or reputation of Enfinity; (4)
the Executive's conviction of a felony crime; or (5) chronic alcohol abuse or
illegal drug abuse by the Executive. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for good cause without (x)
reasonable written notice to the Executive setting forth the reasons for
Enfinity's intention to terminate for good cause, (y) an opportunity for the
Executive, together with his legal counsel, to be heard before the Board, and
(z) delivery to the Executive of a notice of termination on behalf of the Board
setting forth the reasons for such termination. In the event of a termination
for good cause, as enumerated above, the Executive shall have no right to any
severance compensation.

(b) WITHOUT CAUSE. At any time during the Employment Period, the
Executive may, without cause, terminate this Agreement and the Executive's
employment, effective thirty (30)

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<PAGE>

days after written notice is provided to Enfinity. The Executive may only be
terminated without cause by Enfinity during the Employment Period if such
termination is approved by at least two-thirds of the members of the Board.
Should the Executive's employment be terminated by Enfinity without cause during
the Employment Period, the Executive shall receive from Enfinity, in a lump-sum
payment due on the effective date of termination, an amount equal to two times
his then applicable base salary, plus any accrued salary and declared but unpaid
bonus and reimbursement of expenses. If the Executive resigns or otherwise
terminates his employment without cause pursuant to this Section 4(b) or other
than for Good Reason pursuant to Section 4(d), the Executive shall receive no
severance compensation.

(c) CHANGE IN CONTROL. In the event of a "Change in Control" of Enfinity
(as defined in Section 12) during the Employment Period, refer to Section 12
below.

(d) FOR GOOD REASON. In addition to his other rights set forth in this
Agreement, the Executive may terminate this Agreement at any time ten (10) days
after delivery of notice to the Board for "good reason," which shall be (i) a
material diminution during the Employment Period in the Executive's office,
duties or responsibilities (including following any Change in Control) or (ii) a
material breach by Enfinity of this Agreement. Notwithstanding the foregoing,
the Executive may not terminate this Agreement for good reason without providing
(x) reasonable written notice to the Board setting forth the reasons for the
Executive's intention to terminate for good reason, (y) an opportunity for the
Board to meet with the Executive, together with legal counsel, and (z) delivery
by the Executive to the Board of a notice of termination for good reason setting
forth the reasons for such termination. Should the Executive terminate his
employment with Enfinity pursuant to this Section 4(d), the Executive shall
receive from Enfinity, in a lump-sum payment due on the effective date of
termination, an amount equal to two times his then applicable annual base
salary, plus any accrued salary and declared but unpaid bonus and reimbursement
of expenses.

(e) CONSEQUENCES OF TERMINATION.

(i) Upon termination of this Agreement for any reason provided
above, Enfinity shall pay promptly to the Executive all compensation earned and
all benefits and reimbursements due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to the Executive only to the extent and in the manner expressly provided
in this Agreement. All other rights and obligations of Enfinity and the
Executive under this Agreement shall cease as of the effective date of
termination, except that Enfinity's obligations under Sections 3(d) and 17
hereof and the Executive's obligations under Sections 7, 8 and 9 hereof shall
survive any termination or expiration of this Agreement.

(ii) In the event of any termination of the Executive's
employment for any reason, the Executive shall be under no obligation to seek
other employment and there shall be no offset against any amounts due to the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any

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amount due under this Section 4 are in the nature of severance payments, or
liquidated damages, or both, and are not in the nature of a penalty.

(iii) Notwithstanding any statement contained in this Agreement
or Enfinity's applicable stock option or other stock incentive plans to the
contrary, upon any termination or expiration of this Agreement, other than by
Enfinity pursuant to Section 4(a)(iii) (good cause) or by the Executive pursuant
to Section 4(b)(without cause): (x) any options or rights to purchase securities
of Enfinity shall immediately vest and remain exercisable until the ten year
anniversary of the date of grant of such options or rights and (y) any
restrictions or forfeiture provisions applicable to any securities of Enfinity
owned beneficially or of record by the Executive (or his spouse or estate) shall
immediately lapse.

5. PLACE OF PERFORMANCE.

It is understood that the Executive shall not be required to relocate from his
present residence in order to fulfill his duties and responsibilities hereunder.
However, the Executive agrees to travel to the extent necessary and reasonable
in order to fulfill his duties and responsibilities hereunder. If the Executive
and Enfinity agree that it is best for the Executive to relocate to Atlanta,
Georgia, Enfinity will pay all actual reasonable relocation costs to move the
Executive, his immediate family and their personal property and effects (in each
case grossed up for applicable taxes). Such costs may include, but are not
limited to, moving expenses, temporary lodging expenses prior to moving into a
new permanent residence and all closing costs on the purchase of a residence
(comparable to the Executive's present residence) in the new location. The
general intent of the foregoing is that the Executive shall not personally bear
any out-of-pocket cost as a result of the relocation, with an understanding that
the Executive will use the Executive's best efforts to incur only those costs
which are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of Enfinity and the
personal life of the Executive and his family.

6. CONFIDENTIALITY.

The Executive agrees that he will not at any time during the Employment Period
hereof or at any time thereafter for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation or other business entity, in any manner whatsoever, any
confidential information or trade secrets concerning the business of Enfinity,
including, without limiting the generality of the foregoing, any confidential or
proprietary techniques, methods or systems of its operation or management, any
information regarding its financial matters, or any other material non-public
information concerning the business of Enfinity, its manner of operation, its
plans or other material data. The provisions of this Section 6 shall not prevent
the disclosure or use of or apply to (i) information that is public knowledge or
in the public domain other than as a result of disclosure by the Executive in
breach of this Section 6; (ii) information disseminated by Enfinity to third
parties in the ordinary course of business; (iii) information lawfully received
by the Executive from a third party who, based

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<PAGE>

upon inquiry by the Executive, is not bound by a confidential relationship to
Enfinity; or (iv) information disclosed under a requirement of law or as
compelled or directed by applicable legal authority; or (v) information
disclosed by Executive necessary to perform his duties and responsibilities for
and on behalf of Enfinity.

7. INVENTIONS.

The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions of
value to Enfinity. The Executive hereby assigns to Enfinity all right, title and
interest in such contributions and inventions made or conceived by the Executive
alone or jointly with others during the Employment Period that relate to the
business of Enfinity. This assignment shall include (a) the right to file and
prosecute patent applications on such inventions in any and all countries, (b)
the patent applications filed and patents issuing thereon, and (c) the right to
obtain copyright, trademark or trade name protection for any such work product.
The Executive shall promptly and fully disclose all such contributions and
inventions to Enfinity and shall take reasonable steps to assist Enfinity (at
Enfinity's cost) in obtaining and protecting the rights therein (including
patents thereon) in any and all countries; provided, however, that said
contributions and inventions will be the property of Enfinity, whether or not
patented or registered for copyright, trademark or trade name protection, as the
case may be. The Executive hereby agrees to execute any documentation reasonably
requested by Enfinity to be so executed if such request is made in order to
carry out the purpose and terms of this Section 7. Inventions conceived by the
Executive that are not related to the business of Enfinity will remain the
property of the Executive.

8. NON-COMPETITION.

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9. BREACH OF RESTRICTIVE COVENANTS.

The parties agree that a breach or violation of Section 6, 7 or 8 hereof will
result in immediate and irreparable injury and harm to the innocent party, which
party shall have, in addition to any and all remedies of law and other
consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.

10. NOTICES.

For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when faxed, delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:

(a) If to Enfinity, to such address as shall be its then current
principal place of business.

(b) If to the Executive, to:

William M. Dillard
206 Harrowgate Place
Longwood, FL 32779
Telephone: (407) 869-0281
Telecopy: (407) 869-7376

or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.

11. ARBITRATION: LEGAL FEES.

Except as provided in Section 11 hereof, any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Atlanta, Georgia in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Enfinity shall reimburse
the Executive for all reasonable legal fees and costs and other fees and
expenses that the Executive may incur in respect of any dispute or controversy
arising against Enfinity under or in connection with this Agreement; provided,
however, that Enfinity shall not reimburse any such fees, costs and expenses if
the fact finder determines that an action brought by the Executive was
substantially without merit Notwithstanding the foregoing, in the event of a
Change of Control, Enfinity shall be unconditionally responsible for legal fees,
costs and expenses with respect to any action brought by the Executive against
Enfinity arising from this Agreement.

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12. CHANGE IN CONTROL.

(a) Unless the Executive elects to terminate this Agreement pursuant to
Section 12(c) below, the Executive understands and acknowledges that Enfinity
may be merged or consolidated with or into another entity and that such entity
shall automatically succeed to the rights and obligations of Enfinity hereunder
or that Enfinity may undergo another type of Change in Control. In the event
such a merger or consolidation or other Change in Control is initiated prior to
the end of the Employment Period, then the provisions of this Section 12 shall
be applicable.

(b) In the event of a pending Change in Control wherein Enfinity and the
Executive have not received written notice at least five (5) business days prior
to the anticipated closing date of the transaction giving rise to the Change in
Control from the successor to all or a substantial portion of Enfinity's
business and/or assets that such successor is willing as of the closing to
assume and agree to perform Enfinity's obligations under this Agreement in the
same manner and to the same extent that Enfinity is hereby required to perform,
then such Change in Control shall be deemed to be a termination of this
Agreement by Enfinity without cause during the Employment Period and the
applicable portions of Section 4(b) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to the Executive
shall be an amount equal to three times his then applicable annual base salary,
plus any accrued salary and declared but unpaid bonus and reimbursement or
expenses, and the provisions of Section 8 of this Agreement shall be effective
for two years following such date. Notwithstanding any statement contained
herein to the contrary, Enfinity shall require, as a condition to any
transaction constituting a Change in Control, that any successor to all or any
portion of Enfinity's business and/or assets expressly assume and agree to
perform Section 3(d) of this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such Change in Control had
taken place.

(c) In any Change in Control, the Executive may elect to terminate this
Agreement by providing written notice to Enfinity at least five (5) business
days prior to the anticipated closing of the transaction giving rise to the
Change in Control. In such case, the applicable provisions of Section 4(b) will
apply as though Enfinity had terminated the Agreement without cause during the
Employment Period; however, under such circumstances, the amount of the lump-sum
severance payment due to the Executive shall be an amount equal to two times his
then applicable annual base salary, plus any accrued salary and declared but
unpaid bonus and reimbursement or expenses, and the provisions of Section 8 of
this Agreement shall be effective for two years following such date.
Notwithstanding any statement contained herein to the contrary, Enfinity shall
require, as a condition to any transaction constituting a Change in Control,
that any successor to all or any portion of Enfinity's business and/or assets
expressly assume and agree to perform Section 3(d) of this Agreement in the same
manner and to the same extent that Enfinity would be required to perform it if
no such Change in Control had taken place.

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(d) In the event of termination due to a Change in Control, the
Executive shall continue to receive coverage under the group medical care and
dental insurance benefit plans in which the Executive is participating at the
time of termination for the term of the applicable severance period or upon the
Executive's obtaining coverage under another medical and dental plan, whichever
occurs first. Notwithstanding the foregoing, to the extent that the Executive
was making payments in connection with such benefits, the Executive shall
continue to be responsible for such payments for the duration of such extended
coverage.

(e) For purposes of applying Section 4 hereof under the circumstances
described in (b) and (c) above, the effective date of termination will be the
closing date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due the Executive must be
paid in full by Enfinity at or prior to such closing. In addition,
notwithstanding anything contained in Enfinity's stock option or other incentive
plans, immediately prior to any Change in Control, any options or rights to
purchase securities of Enfinity held by the Executive shall immediately vest and
become and remain fully exercisable and any restrictions or forfeiture
provisions applicable to any securities of Enfinity owned beneficially or of
record by the Executive (or his spouse or estate) shall immediately lapse, such
that the Executive, at his discretion, may exercise such options or rights prior
to the Change in Control and receive the consideration to be received by the
stockholders of Enfinity in connection with the Change in Control or convert
such options or rights into options or rights to purchase equivalent securities
of the acquiring corporation or other entity.

(f) A "Change in Control" shall be deemed to have occurred if:

(i) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than Enfinity or an employee benefit plan of Enfinity, becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
directly or indirectly, of any voting security of Enfinity and, immediately
after such acquisition, such person, directly or indirectly, is the beneficial
owner of voting securities representing 35% or more of the total voting power of
all of the then-outstanding voting securities of Enfinity and has a larger
percentage of voting securities of Enfinity than any other person, entity or
group holding voting securities of Enfinity, unless the transaction pursuant to
which such acquisition is made is approved by more than two-thirds (2/3) of the
Board; or

(ii) the following individuals no longer constitute a majority of
the members of the Board: (A) the individuals who, as of the closing date of
Enfinity's IPO, constitute the Board (the "Original Directors"); (B) the
individuals who thereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more than
two-thirds (2/3) of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following their election);
and (C) the individuals who are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more than
two-thirds (2/3) of the Original Directors and Additional Original Directors
then still

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in office (such directors also becoming "Additional Original Directors"
immediately following their election).

(iii) there shall be consummated any merger or consolidation of
Enfinity in which Enfinity is not the continuing or surviving corporation or
pursuant to which shares of Enfinity's capital stock are converted into cash,
securities or other property, other than a consolidation or merger of Enfinity
in which the holders of Enfinity's voting stock immediately prior to the
consolidation or merger, own at least 50% of the total voting power represented
by the voting securities of the surviving entity outstanding immediately after
such transaction or any sale, lease, exchange or other transfer (in one
transaction or a series or transaction contemplated or arranged by any party as
a single plan) of all or substantially all of the assets of Enfinity; or

(iv) the stockholders of Enfinity approve a plan of complete
liquidation of Enfinity.

(g) The Executive must be notified in writing by Enfinity at any time
that Enfinity or any member of its Board anticipates that a Change in Control
may take place.

13. WAIVER OF BREACH.

Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either the
Executive or of Enfinity.

14. NON-ASSIGNMENT: SUCCESSORS.

Neither party hereto may assign his or its rights or delegate his or its duties
under this Agreement without the prior written consent of the other party;
provided, however, that (i) subject to the rights of the Executive under Section
12 hereof, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of Enfinity upon any sale of all or substantially all of
the assets of Enfinity, or upon any merger, consolidation or reorganization of
Enfinity with or into any other corporation, all as though such successors and
assigns of Enfinity and their respective successors and assigns were Enfinity;
(ii) this Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of the Executive to the extent of any payments due to the
Executive hereunder; and (iii) this Agreement shall inure to the benefit of
Enfinity. As used in this Agreement, the term "Enfinity" shall be deemed to
refer to any such successor or assign of Enfinity referred to in the preceding
sentence. Notwithstanding any statement contained in this Agreement to the
contrary, Enfinity agrees to and shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Enfinity to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such succession had taken
place. This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's legal

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representative in the event of mental incapacity or by the Executive's duly
appointed executors or administrators in the event of the Executive's death. If
the Executive should die while any amounts are payable to him hereunder, all
such amounts unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's estate.

15. WITHHOLDING OF TAXES.

All payments required to be made by Enfinity to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, and other payroll deductions as Enfinity may reasonably determine it
should withhold pursuant to any applicable law or regulation.

16. SEVERABILITY.

To the extent any provision of this Agreement or portion thereof shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.

17. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

18. GOVERNING LAW.

This Agreement shall be construed, interpreted and enforced in accordance with
the internal laws of the State of Delaware, without giving effect to the choice
of law provisions of such state.

19. ENTIRE AGREEMENT.

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

ENFINITY CORPORATION

By:_____________________________
Name: Rodney C. Gilbert
Title: Chairman of the Board and
Chief Executive Officer

_________________________________
William M. Dillard

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EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 10th day of
July, 1998, between Enfinity Corporation, a Delaware corporation ("Enfinity"),
and Nicholas J. Costanza (the "Executive").

WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Executive as Executive Vice President, General Counsel and
Secretary of Enfinity on the terms and conditions contained in this Agreement,
and to set forth certain additional agreements between the Executive and
Enfinity.

NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:

1. TERM.

The term of this Agreement shall begin on the closing of Enfinity's initial
public offering and continue for three (3) years from such closing; provided,
however, in the event that such initial public offering of its Common Stock on
Form S-1 (the "IPO") is not closed on or before September 30, 1998, then (except
for Section 3(d)) this Agreement shall be null and void without having become
effective. Upon the expiration of such initial three-year period and upon each
anniversary date thereof, the term of this Agreement shall be extended for an
additional one-year period unless, not later than two months prior to each
respective renewal date, either party to this Agreement shall have given notice
to the other that this Agreement shall not be so extended . Notwithstanding the
foregoing, the Executive's employment hereunder may be earlier terminated, as
provided in Sections 4 and 13 hereof. The period of time between the
commencement and the termination of the Executive's employment hereunder shall
be referred to herein as the "Employment Period."

2. EMPLOYMENT.

(a) POSITION AND REPORTING. Enfinity hereby employs the Executive for
the Employment Period as its Executive Vice President, General Counsel and
Secretary the terms and conditions set forth in this Agreement.

(b) AUTHORITY AND DUTIES. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are typically associated with the Executive's position, commensurate with the
authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of Enfinity, including responsibilities for the
corporate legal and human resources affairs of Enfinity. Without limiting the
generality of the foregoing, the Executive shall report directly and be
responsible to the Chief Executive Officer of Enfinity. During the Employment
Period, the Executive shall devote his full business time, skill and efforts to
the business of Enfinity. Notwithstanding the foregoing, the Executive may (i)
make and manage passive personal business investments of his choice (in

<PAGE>

the case of publicly-held corporations, not to exceed one percent (1%) of the
outstanding voting stock without the approval of the Board of Directors of
Enfinity (the "Board") and not to exceed three percent (3%) of the outstanding
voting stock with the approval of the Board, which approval shall not be
unreasonably withheld or delayed) and serve in any capacity with any civic,
educational or charitable organization, or any trade association, without
seeking or obtaining approval by the Board, provided such activities and service
do not materially interfere or conflict with the performance of his duties
hereunder and (ii) with the approval of the Board, which shall not be
unreasonably be withheld or delayed, serve on the boards of directors of other
corporations.

3. COMPENSATION AND BENEFITS.

(a) SALARY. During the Employment Period, Enfinity shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $185,000 per annum, payable
in arrears not less frequently than monthly in accordance with the normal
payroll practices of Enfinity. Such base salary shall be subject to review each
year for possible increase by the Compensation Committee of the Board (once
constituted), but shall in no event be decreased from its then-existing level
during the Employment Period.

(b) ANNUAL BONUS. For 1998 and subsequent years, Enfinity shall develop,
as soon as practicable after the effective date of Enfinity's IPO, a written
incentive bonus plan setting forth reasonable criteria and performance standards
under which the Executive and other officers and key employees will be eligible
to receive year-end bonus awards (the "Bonus Plan"). Executive shall be entitled
under the Bonus Plan to receive a bonus equal to forty percent (40%) of his then
applicable base salary if the specified criteria and performance standards are
met and the Executive shall be entitled to receive a bonus equal to eighty
percent (80%) of his then applicable base salary if the specified criteria are
exceeded by an amount equal to or greater than thirty percent (30%) of such
specified criteria. Any bonus payable to the Executive pursuant to the Bonus
Plan shall be paid within 45 days following the end of the applicable fiscal
year. It is understood that the performance criteria for determining actual
bonuses will be determined by the Executive and the Compensation Committee of
the Board (once constituted) but that the criteria and performance standards to
be set under the Bonus Plan will be tied to Enfinity's anticipated results of
operations for the applicable bonus period.

(c) OTHER BENEFITS. The Executive shall be entitled to receive
additional benefits and compensation from Enfinity in such form and to such
extent as specified below:

(ii) Business Expenses. Enfinity shall promptly reimburse the
Executive for all business travel and other out-of-pocket expenses reasonably
incurred by the Executive in the

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performance of the Executive's services pursuant to this Agreement. All
reimbursable expenses shall be documented in reasonable detail by the Executive
upon submission of any request for reimbursement.

(iii) Other Perquisites. Enfinity shall provide the Executive
with other executive perquisites as may be available to or deemed appropriate
for the Executive by the Board and participation in all other Enfinity-wide
employee benefits as available from time to time, including, but not limited to,
four (4) weeks of paid vacation per year.

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4. TERMINATION OF EMPLOYMENT.

(a) TERMINATION FOR CAUSE. This Agreement and Executive's employment may
be terminated in any one of the following ways:

(i) Death. The death of the Executive shall immediately terminate
this Agreement with no severance compensation due to the Executive's estate.

(ii) Disability. If, as a result of incapacity due to physical or
mental illness or injury, as reasonably determined by the Executive's physician,
the Executive shall have been absent from the Executive's full-time duties
hereunder for six (6) consecutive months, then thirty (30) days after receiving
written notice (which notice may occur before or after the end of such six (6)
month period, but which shall not be effective earlier than the last day of such
six (6) month period), Enfinity may terminate the Executive's employment
hereunder provided the Executive is unable to resume his full-time duties at the
conclusion of such notice period. Also, the Executive may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of the Executive's duties hereunder hazardous to
the Executive's physical or mental health or life, provided that the Executive
shall have furnished Enfinity with a written statement from the Executive's
doctor to such effect and provided, further, that, at Enfinity's request made
within thirty (30) days of the date of such written statement, the Executive
shall submit to an examination by a doctor selected by Enfinity who is
reasonably acceptable to the Executive or his doctor and such doctor shall have
concurred in the conclusion of the Executive's doctor. If the two doctors cannot
agree as to whether or not the Executive is so disabled, the two doctors shall
designate a third doctor to examine the Executive and a majority of the three
doctors so selected shall make such determination. In the event this Agreement
is terminated by either party as a result of the Executive's disability,
Enfinity shall continue to compensate the Executive at his then-current base
salary until such time as any applicable waiting periods under the Executive's
long-term disability policy provided by Enfinity shall be exhausted and the
Executive shall be receiving payments pursuant to such policy.

(iii) Good Cause. Enfinity may terminate this Agreement at any
time ten (10) days after delivery of written notice to the Executive for good
cause, which shall be: (1) the Executive's willful, material and irreparable
breach of this Agreement; (2) the Executive's gross negligence in the
performance or intentional nonperformance (in either case, continuing for ten
(10) days after receipt of written notice from Enfinity that specifically
identifies the manner in which Enfinity believes that the Executive has failed
to perform such duties and responsibilities) of any of the Executive's material
duties and responsibilities hereunder; (3) the Executive's willful dishonesty,
fraud or misconduct with respect to the business or affairs of Enfinity which
materially and adversely affects the operations or reputation of Enfinity; (4)
the Executive's conviction of a felony crime; or (5) chronic alcohol abuse or
illegal drug abuse by the Executive. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for good cause without (x)
reasonable written notice to the Executive setting forth the reasons for
Enfinity's intention to terminate for good cause, (y) an opportunity for the
Executive, together with his legal counsel, to be heard before the Board, and
(z) delivery to the Executive of a notice

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of termination on behalf of the Board setting forth the reasons for such
termination. In the event of a termination for good cause, as enumerated above,
the Executive shall have no right to any severance compensation.

(b) WITHOUT CAUSE. At any time during the Employment Period, the
Executive may, without cause, terminate this Agreement and the Executive's
employment, effective thirty (30) days after written notice is provided to
Enfinity. The Executive may only be terminated without cause by Enfinity during
the Employment Period if such termination is approved by at least two-thirds of
the members of the Board. Should the Executive's employment be terminated by
Enfinity without cause during the Employment Period, the Executive shall receive
from Enfinity, in a lump-sum payment due on the effective date of termination,
an amount equal to two times his then applicable annual base salary, plus any
accrued salary and declared but unpaid bonus and reimbursement of expenses. If
the Executive resigns or otherwise terminates his employment without cause
pursuant to this Section 4(b), the Executive shall receive no severance
compensation.

(c) CHANGE IN CONTROL. In the event of a "Change in Control" of Enfinity
(as defined in Section 13) during the Employment Period, refer to Section 13
below.

(d) FOR GOOD REASON. In addition to his other rights set forth in this
Agreement, the Executive may terminate this Agreement at any time ten (10) days
after delivery of notice to the Board for "good reason," which shall be (i) a
material diminution during the Employment Period in the Executive's office,
duties or responsibilities (including following any Change in Control), (ii) a
material breach by Enfinity of this Agreement, or (iii) Enfinity's requiring
that the Executive change the location of his job or office (without the
Executive's express, written consent), so that he would be located more than 50
miles from his office/job in Atlanta as contemplated by this Agreement.
Notwithstanding the foregoing, the Executive may not terminate this Agreement
for good reason without providing (x) reasonable written notice to the Board
setting forth the reasons for the Executive's intention to terminate for good
reason, (y) an opportunity for the Board to meet with the Executive, together
with legal counsel, and (z) delivery by the Executive to the Board of a notice
of termination for good reason setting forth the reasons for such termination.
Should the Executive terminate his employment with Enfinity pursuant to this
Section 4(d), the Executive shall receive from Enfinity, in a lump-sum payment
due on the effective date of termination, an amount equal to two times his then
applicable annual base salary, plus any accrued salary and declared but unpaid
bonus and reimbursement of expenses.

(e) CONSEQUENCES OF TERMINATION.

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Executive under this Agreement shall cease as of the effective date of
termination, except that Enfinity's obligations under Sections 3(d) and 17
hereof and the Executive's obligations under Sections 7, 8 and 9 hereof shall
survive any termination or expiration of this Agreement.

(ii) In the event of any termination of the Executive's
employment for any reason, the Executive shall be under no obligation to seek
other employment and there shall be no offset against any amounts due to the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that the Executive may obtain. Any amounts due under
this Section 4 are in the nature of severance payments, or liquidated damages,
or both, and are not in the nature of a penalty.

(iii) Notwithstanding any statement contained in this Agreement
to the contrary, upon any termination or expiration of this Agreement, other
than by Enfinity pursuant to Section 4(a)(iii) (good cause) or by the Executive
pursuant to Section 4(b)(without cause): (x) any options or rights to purchase
securities of Enfinity shall immediately vest and remain exercisable until the
ten year anniversary of the date of grant of such options or rights and (y) any
restrictions or forfeiture provisions applicable to any securities of Enfinity
owned beneficially or of record by the Executive (or his spouse or estate) shall
immediately lapse.

5. PLACE OF PERFORMANCE.

6. STOCK OPTIONS.

At the effective date of Enfinity's IPO, Enfinity shall grant to the Executive
options to acquire 75,000 shares of Enfinity common stock at the price per share
at which such stock is offered to the public in the initial public offering.
Such options shall vest in installments of 18,750 shares at the effective date
of the IPO and on each of the first, second and third anniversaries of the
effective date of the IPO. The other terms and conditions of such options shall
be usual and

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customary and shall be as set forth in a stock option agreement to be entered
into between Enfinity and the Executive.

7. CONFIDENTIALITY.

The Executive agrees that he will not at any time during the Employment Period
hereof or at any time thereafter for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation or other business entity, in any manner whatsoever, any
confidential information or trade secrets concerning the business of Enfinity,
including, without limiting the generality of the foregoing, any confidential or
proprietary techniques, methods or systems of its operation or management, any
information regarding its financial matters, or any other material non-public
information concerning the business of Enfinity, its manner of operation, its
plans or other material data. The provisions of this Section 7 shall not prevent
the disclosure or use of or apply to (i) information that is public knowledge or
in the public domain other than as a result of disclosure by the Executive in
breach of this Section 7; (ii) information disseminated by Enfinity to third
parties in the ordinary course of business; (iii) information lawfully received
by the Executive from a third party who, based upon inquiry by the Executive, is
not bound by a confidential relationship to Enfinity; (iv) information disclosed
under a requirement of law or as compelled or directed by applicable legal
authority; or (v) information disclosed by Executive necessary to perform his
duties and responsibilities for and on behalf of Enfinity.

8. INVENTIONS.

The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions of
value to Enfinity. The Executive hereby assigns to Enfinity all right, title and
interest in such contributions and inventions made or conceived by the Executive
alone or jointly with others during the Employment Period that relate to the
business of Enfinity. This assignment shall include (a) the right to file and
prosecute patent applications on such inventions in any and all countries, (b)
the patent applications filed and patents issuing thereon, and (c) the right to
obtain copyright, trademark or trade name protection for any such work product.
The Executive shall promptly and fully disclose all such contributions and
inventions to Enfinity and shall take reasonable steps to assist Enfinity (at
Enfinity's cost) in obtaining and protecting the rights therein (including
patents thereon) in any and all countries; provided, however, that said
contributions and inventions will be the property of Enfinity, whether or not
patented or registered for copyright, trademark or trade name protection, as the
case may be. The Executive hereby agrees to execute any documentation reasonably
requested by Enfinity to be so executed if such request is made in order to
carry out the purpose and terms of this Section 8. Inventions conceived by the
Executive that are not related to the business of Enfinity will remain the
property of the Executive.

9. NON-COMPETITION.

The Executive agrees that he shall not during the Employment Period and for two
years following the Employment Period, without the approval of the Board,
directly or indirectly,

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alone or as partner, joint venturer, officer, director, employee, consultant,
agent, independent contractor or stockholder (other than as provided below) of
any company or business, engage in any "Competitive Business" within the United
States. For purposes of the foregoing, the term "Competitive Business" shall
mean any business involved in providing energy or indoor environmental systems
or services, which is in direct competition with Enfinity in any community in
which Enfinity is doing business. Notwithstanding the foregoing, the Executive
shall not be prohibited during the non-competition period applicable above from
acting as a passive investor in any publicly-held company under the
circumstances described in Section 2(b) hereof. During the period that the above
non-competition restriction applies, the Executive shall not, without the
written consent of Enfinity, solicit or encourage any employee of Enfinity or
any current or future subsidiary or affiliate thereof to terminate his or her
employment.

10. BREACH OF RESTRICTIVE COVENANTS.

The parties agree that a breach or violation of Section 7, 8 or 9 hereof will
result in immediate and irreparable injury and harm to the innocent party, which
party shall have, in addition to any and all remedies of law and other
consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.

11. NOTICES.

(a) If to Enfinity, to such address as shall be its then current
principal place of business.

(b) If to the Executive, to:

Nicholas J. Costanza
7804 Ketley Court
Raleigh, North Carolina 27615

Telephone: (919) 870-7778
Telecopy: (919) 870-7778

or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.

12. ARBITRATION: LEGAL FEES.

Except as provided in Section 10 hereof, any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Atlanta, Georgia in

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accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. Enfinity shall reimburse the Executive for all reasonable legal
fees and costs and other fees and expenses that the Executive may incur in
respect of any dispute or controversy arising against Enfinity under or in
connection with this Agreement; provided, however, that Enfinity shall not
reimburse any such fees, costs and expenses if the fact finder determines that
an action brought by the Executive was substantially without merit.
Notwithstanding the foregoing, in the event of a Change of Control, Enfinity
shall be unconditionally responsible for legal fees, costs and expenses with
respect to any action brought by the Executive against Enfinity arising from
this Agreement.

13. CHANGE IN CONTROL.

(b) In the event of a pending Change in Control wherein Enfinity and the
Executive have not received written notice at least five (5) business days prior
to the anticipated closing date of the transaction giving rise to the Change in
Control from the successor to all or a substantial portion of Enfinity's
business and/or assets that such successor is willing as of the closing to
assume and agree to perform Enfinity's obligations under this Agreement in the
same manner and to the same extent that Enfinity is hereby required to perform,
then such Change in Control shall be deemed to be a termination of this
Agreement by Enfinity without cause during the Employment Period and the
applicable portions of Section 4(b) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to the Executive
shall be an amount equal to three times his then applicable annual base salary,
plus any accrued salary and declared but unpaid bonus and reimbursement or
expenses, and the provisions of Section 9 of this Agreement shall be effective
for two years following such date. Notwithstanding any statement contained
herein to the contrary, Enfinity shall require, as a condition to any
transaction constituting a Change in Control, that any successor to all or any
portion of Enfinity's business and/or assets expressly assume and agree to
perform Section 3(d) of this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such Change in Control had
taken place.

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effective for two years following such date. Notwithstanding any statement
contained herein to the contrary, Enfinity shall require, as a condition to any
transaction constituting a Change in Control, that any successor to all or any
portion of Enfinity's business and/or assets expressly assume and agree to
perform Section 3(d) of this Agreement in the same manner and to the same extent
that Enfinity would be required to perform it if no such Change in Control had
taken place.

(f) A "Change in Control" shall be deemed to have occurred if:

(i) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) , other than Enfinity or an employee benefit plan of Enfinity, becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
, directly or indirectly, of any voting security of Enfinity and immediately
after such acquisition, such person, directly or indirectly, is the beneficial
owner of voting securities representing 35% or more of the total voting power of
all of the then-outstanding voting securities of Enfinity and has a larger
percentage of voting securities of Enfinity than any other person, entity or
group holding voting securities of Enfinity, unless the transaction pursuant to
which such acquisition is made is approved by more than two-thirds (2/3) of the
Board; or

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(2/3) of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following their election);
and (C) the individuals who are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of more than
two-thirds (2/3) of the Original Directors and Additional Original Directors
then still in office (such directors also becoming "Additional Original
Directors" immediately following their election).

(iii) there shall be consummated any merger or consolidation of
Enfinity in which Enfinity is not the continuing or surviving corporation or
pursuant to which shares of Enfinity's capital stock are converted into cash,
securities or other property, other than a consolidation or merger of Enfinity
in which the holders of Enfinity's voting stock immediately prior to the
consolidation or merger, own at least 50% of the total voting power represented
by the voting securities of the surviving entity outstanding immediately after
such transaction or any sale, lease, exchange or other transfer (in one
transaction or a series or transaction contemplated or arranged by any party as
a single plan) of all or substantially all of the assets of Enfinity; or

(iv) the stockholders of Enfinity approve a plan of complete
liquidation of Enfinity.

(g) The Executive must be notified in writing by Enfinity at any time
that Enfinity or any member of its Board anticipates that a Change in Control
may take place.

14. WAIVER OF BREACH.

Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either the
Executive or of Enfinity.

15. NON-ASSIGNMENT: SUCCESSORS.

Neither party hereto may assign his or its rights or delegate his or its duties
under this Agreement without the prior written consent of the other party;
provided, however, that (i) subject to the rights of the Executive under Section
13 hereof, this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of Enfinity upon any sale of all or substantially all of
the assets of Enfinity, or upon any merger, consolidation or reorganization of
Enfinity with or into any other corporation, all as though such successors and
assigns of Enfinity and their respective successors and assigns were Enfinity;
(ii) this Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of the Executive to the extent of any payments due to the
Executive hereunder; and (iii) this Agreement shall inure to the benefit of
Enfinity. As used in this Agreement, the term "Enfinity" shall be deemed to
refer to any such successor or assign of Enfinity referred to in the preceding
sentence. Notwithstanding any statement contained in this Agreement to the
contrary, Enfinity agrees to and shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Enfinity to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Enfinity would be

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required to perform it if no such succession had taken place. This Agreement and
all rights of the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's legal representative in the event of mental
incapacity or by the Executive's duly appointed executors or administrators in
the event of the Executive's death. If the Executive should die while any
amounts are payable to him hereunder, all such amounts unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's estate.

16. WITHHOLDING OF TAXES.

All payments required to be made by Enfinity to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, and other payroll deductions as Enfinity may reasonably determine it
should withhold pursuant to any applicable law or regulation.

17. CERTAIN TAX MATTERS.

(b) The parties hereto stipulate and agree that the Executive has, pursuant
to that subscription agreement dated June 26, 1998, subscribed for and purchased
.407554 shares of common stock of Enfinity, par value $.01 per share (the
"Shares"), for an aggregate purchase price of $40.75 (the "Purchase Price").
Enfinity agrees to pay or cause to be paid, and shall be liable for, and
covenants and agrees to defend, indemnify and hold the Executive harmless (on a
grossed up basis for applicable taxes) from and against, any and all Losses (as
defined below) resulting from, arising out of or relating to or otherwise based
upon Taxes (as defined below) that arise out of, are attributable to, or relate
to any claim or determination by the Internal Revenue Service or other
governmental authority that the fair market value of the Shares on the date the
Executive purchased them was greater than the Purchase Price (such claim or
determination an "Indemnified Tax Matter"). Notwithstanding any statement
contained in this Agreement to the contrary, Enfinity agrees to promptly pay, or
advance to the Executive for payment, without regard to when the Executive
actually sells any Shares, any and all amounts for which the Executive is
indemnified in this Section 17. As used herein (i) "Losses" means expenses,
damages, judgments, fines, amounts paid in settlement, liabilities, obligations,
losses, penalties, costs, or deficiencies, including, without limitation,
attorneys fees and fees of other professionals, and all costs, expenses or other
obligations paid or incurred in connection with investigating, defending, being
a witness in or participating in (including an appeal) any hearing, review,
litigation or other proceeding or matter arising out of or relating to Taxes,
and (ii) "Taxes" means any income (whether ordinary or otherwise), alternative
minimum, employment,

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payroll, social security, unemployment, withholding or other similar tax,
assessment or other governmental charge (including, without limitation, all
interest and penalties thereon and additions thereto whether disputed or not)
imposed by any federal, state or local government. The Executive agrees, upon
any future sale of the Shares for cash, to reimburse Enfinity in an amount equal
to the actual benefit of any increase in the tax basis of the Shares disposed of
by the Executive as a result of any payment or payments made by Enfinity
pursuant to this Section 17; provided, however, that the Executive's
reimbursement obligation hereunder shall not exceed the lesser of (1) the
aggregate net amount of payments (but without giving effect to any payments made
to "gross up" any tax owed by the Executive) in respect of Tax liabilities
previously made to the Executive by Enfinity hereunder or (2) the difference
between the fair market value of the Shares on the date the Executive purchased
them (as determined by the Internal Revenue Service or other governmental
authority) and the Purchase Price multiplied by a percentage equal to
then-applicable capital gains (as opposed to ordinary income) rate. The
obligation of Enfinity hereunder shall survive any termination or expiration of
this Agreement, any transfer by the Executive of the Shares, any termination or
cessation of the Executive's employment with Enfinity, and shall, following the
Executive's death, inure to the benefit of the Executive's estate.

18. SEVERABILITY.

To the extent any provision of this Agreement or portion thereof shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.

19. COUNTERPARTS.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

20. GOVERNING LAW.

This Agreement shall be construed, interpreted and enforced in accordance with
the internal laws of the State of Delaware, without giving effect to the choice
of law provisions of such state.

21. ENTIRE AGREEMENT.

-13-

<PAGE>

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

ENFINITY CORPORATION

By: /s/ William M. Dillard
-------------------------------
Name: William M. Dillard
Title: President

/s/ Nicholas J. Costanza
-------------------------------
Nicholas J. Costanza

-14-

<PAGE>

<PAGE>
Consent of Independent Accountants

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our reports as of the dates, and related
to the financial statements of the companies, listed below which appear in such
Prospectus:

<TABLE>
<CAPTION>
Company Date
--------- -------
<S> <C>
Enfinity Corporation July 10, 1998
Brandt Mechanical Services, Inc. July 2, 1998
Energy Systems Industries, Inc. March 23, 1998
New England Mechanical Services, Inc. May 13, 1998
Lee Company April 3, 1998
Hill York Corporation and Hill York
Service Corporation March 14, 1998
Mechanical Services of Orlando April 3, 1998
Aircond Corporation November 14, 1997
</TABLE>

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
July 13, 1998

<PAGE>

[LOGO]

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Air Systems, Inc.:

We hereby consent to the use in this Registration Statement on Form S-1 (No.
333-52671) of our report, dated April 27, 1998, relating to the financial
statements of Air Systems, Inc. We also consent to the reference to our Firm
under the captions "Experts" and "Selected Financial Data" in the Prospectus.

/s/ Shilling & Kenyon, Inc.
......................................
SHILLING & KENYON, INC.

San Jose, California
July 13, 1998

<PAGE>

<S> <C>
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<PERIOD-TYPE> 3-MOS
<CASH> 35
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 35
<CURRENT-LIABILITIES> 33
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2
<TOTAL-LIABILITY-AND-EQUITY> 35
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (800)
<INCOME-TAX> 0
<INCOME-CONTINUING> (800)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (800)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

<PAGE>