INCOM ROOFING SERVICES INC, S-1, 1998-07-24

INCOM ROOFING SERVICES INC
S-1, 1998-07-24

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1998.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
INCOM ROOFING SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 1761 76-0568522
(STATE OR OTHER (PRIMARY STANDARD
JURISDICTION INDUSTRIAL
OF INCORPORATION OR CLASSIFICATION CODE (I.R.S. EMPLOYER
ORGANIZATION) NUMBER) IDENTIFICATION NUMBER)

515 POST OAK BLVD., SUITE 450
HOUSTON, TEXAS 77027
(713) 860-1534
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

------------------------
C. BYRON SNYDER
CHAIRMAN OF THE BOARD OF DIRECTORS
INCOM ROOFING SERVICES, INC.
515 POST OAK BLVD., SUITE 450
HOUSTON, TEXAS 77027
(713) 860-1534
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

------------------------
COPY TO:

THOMAS P. MASON T. MARK KELLY
ANDREWS & KURTH L.L.P. VINSON & ELKINS L.L.P.
4200 CHASE TOWER 2300 FIRST CITY TOWER
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 220-4200 (713) 758-2222

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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF
SECURITIES PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
Common Stock, $.01 par
value.................... $96,600,000 $28,497
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o).
------------------------
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>
EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one (the
"U.S. Prospectus") to be used in connection with a United States and Canadian
offering and one (the "International Prospectus") to be used in connection
with a concurrent international offering. The U.S. Prospectus and the
International Prospectus are identical except that they contain different front,
inside front and back cover pages and different descriptions of the plan of
distribution (contained under the caption "Underwriting" in both
prospectuses). The form of U.S. Prospectus is included herein and is followed by
those pages to be used in the International Prospectus which differ from those
used in the U.S. Prospectus. Each of the pages for the International Prospectus
included herein is labeled "Alternate Page for International Prospectus."

<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

PRELIMINARY PROSPECTUS DATED JULY 24, 1998

PROSPECTUS

6,000,000 SHARES

INCOM ROOFING SERVICES, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock, par value $.01 per share (the "Common
Stock"), offered hereby are being offered by INCOM Roofing Services, Inc.
("INCOM" or the "Company").

Of the shares of Common Stock being offered hereby, 4,800,000 shares (the
"U.S. Shares") are being offered initially in the United States and Canada
(the "U.S. Offering") by the U.S. Underwriters and 1,200,000 shares (the
"International Shares") are being offered initially outside the United States
and Canada (the "International Offering" and, together with the U.S. Offering,
the "Offerings") by the International Managers. The price to public and
underwriting discount per share are identical for both Offerings and the
closings for both Offerings are conditioned upon each other. See
"Underwriting."

Prior to the Offerings, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price will be
between $ and $ per share. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price.
Shares of Common Stock are being reserved for sale to certain employees,
directors and business associates of, and certain other persons designated by,
the Company, at the initial public offering price. Such employees, directors,
and other persons are expected to purchase, in the aggregate, not more than 10%
of the Common Stock offered in the Offerings. See "Underwriting."

The Company intends to make application to list the Common Stock on the New
York Stock Exchange ("NYSE") under the symbol "ICR."

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES
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>
<S> <C>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- ----------------------------------------------------------------------------------------------------------
Per Share............................ $ $ $
- ----------------------------------------------------------------------------------------------------------
Total(3)............................. $ $ $
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

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

(3) The Company has granted to the U.S. Underwriters and International Managers
options, exercisable within 30 days after the date hereof, to purchase up to
720,000 and 180,000 additional shares of Common Stock, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Company will be
$ , $ and $ , respectively. See "Underwriting."
------------------------

The shares of Common Stock offered hereby are offered by the several
Underwriters, subject to prior sale, when, as and if issued to and accepted by
the Underwriters against payment therefor, subject to certain conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the share
certificates representing the Common Stock will be made in New York, New York on
or about , 1998.
------------------------

MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES
SANDERS MORRIS MUNDY
------------------------

The date of this Prospectus is , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS 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

CONCURRENTLY WITH THE CLOSING OF THE OFFERINGS, INCOM ROOFING SERVICES,
INC. PLANS TO ACQUIRE, IN SEPARATE TRANSACTIONS (COLLECTIVELY, THE
"ACQUISITIONS"), FOR CONSIDERATION INCLUDING CASH AND SHARES OF COMMON STOCK
(THE "ACQUISITIONS CONSIDERATION"), THE FOLLOWING 12 COMPANIES OR GROUPS OF
COMPANIES ENGAGED IN THE COMMERCIAL, INDUSTRIAL, GOVERNMENTAL AND INSTITUTIONAL
ROOFING BUSINESS: D.C. TAYLOR CO. ("D.C. TAYLOR"), SEYFORTH ROOFING COMPANY,
INC. AND SRC, INC. (A SEPARATE COMPANY) (COLLECTIVELY, "SEYFORTH"), NU-TEC
ROOFING CONTRACTORS, INC. ("NU-TEC"), BETA CONSTRUCTION COMPANY AND HAMPTON
SUPPLY, INC. (COLLECTIVELY, "BETA"), EVANS SERVICE COMPANY, INC. ("EVANS"),
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND BOSQUE ENVIRONMENTAL,
INC. (COLLECTIVELY, "BRAZOS"), KELLEY BROTHERS ROOFING, INC. AND MARK
ENTERPRISES, INC. (COLLECTIVELY, "KELLEY BROTHERS"), CHAMBERLIN WATERPROOFING
& ROOFING SYSTEMS, INC. ("CHAMBERLIN"), BURNS & SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. (A SEPARATE COMPANY) AND SCALO, INC. (COLLECTIVELY,
"BURNS & SCALO"), BOONE BROTHERS ROOFING, INC. ("BOONE"), SUTTER ROOFING
COMPANY OF FLORIDA AND SUTTER ROOFING COMPANY OF S.W. FLORIDA (COLLECTIVELY,
"SUTTER") AND M.J. DALSIN COMPANY, INC. AND M.J. DALSIN COMPANY OF SOUTH
DAKOTA, INC. (COLLECTIVELY, "M.J. DALSIN"). THE FOREGOING COMPANIES ARE
REFERRED TO HEREIN COLLECTIVELY AS THE "FOUNDING COMPANIES." UNLESS OTHERWISE
INDICATED, REFERENCES HEREIN TO "INCOM" MEAN INCOM ROOFING SERVICES, INC., AND
REFERENCES TO THE "COMPANY" MEAN INCOM AND THE FOUNDING COMPANIES
COLLECTIVELY.

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, AND
SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS OTHERWISE INDICATED, THE INFORMATION, SHARE AND PER SHARE DATA IN THIS
PROSPECTUS (I) GIVE EFFECT TO THE ACQUISITIONS, (II) ASSUME THE UNDERWRITERS'
OVER-ALLOTMENT OPTIONS ARE NOT EXERCISED AND (III) GIVE EFFECT TO A
1,479.523-FOR-ONE STOCK SPLIT OF THE COMMON STOCK EFFECTED IN JULY 1998.

THE COMPANY

INCOM was organized in February 1998 to create the leading provider of
roofing systems and services to commercial, industrial, governmental and
institutional customers. The Company provides a broad range of services
throughout a roof system's life cycle including: (i) new construction roof
system installation; (ii) reroofing of existing buildings; (iii) maintenance,
repair and refurbishment of existing roof systems and (iv) related specialized
services. The Company had pro forma combined revenues of $216.9 million for the
year ended December 31, 1997, which will make it the largest provider of roofing
systems and services for commercial, industrial, governmental and institutional
customers in the United States. The Founding Companies have been in business for
an average of approximately 36 years, and many have been recognized by industry
organizations for their reliability, professionalism and high quality customer
services. The Founding Companies operate from 41 facilities in 18 states, and in
1997 performed services in 42 states, Washington D.C., Puerto Rico and Mexico.

The Company installs and services all major types of roofing systems
available in the United States today. Of the Company's 1997 pro forma revenues,
53% were derived from reroofing services, 37% from new roof construction and
installation and 10% from maintenance, repair and refurbishment services. Major
roofing projects performed by the Founding Companies have included the new
convention center in Phoenix, Arizona, Coca-Cola bottling plants in Marietta,
Georgia, and Little Rock, Arkansas, the Abbott Laboratories drug manufacturing
facility in Puerto Rico and domed metal roofing at Washington National Airport.
Of the Company's 1997 pro forma revenues, approximately 34% were derived from
commercial customers, approximately 21% were derived from industrial customers,
approximately 25% were derived from governmental customers and approximately 20%
were derived from institutional customers.

1
<PAGE>
over the same period. The Company intends to promote continued internal growth
by leveraging its nationwide presence to obtain multi-location customers,
enhancing its sales and marketing programs, cross-selling specialized services
among the Founding Companies, implementing operating efficiencies and taking
advantage of economies of scale made possible through the Company's increased
size and scope. The Company also intends to increase its nationwide presence and
expand within existing markets through an aggressive acquisition program focused
on consolidating the highly fragmented roofing industry.

INDUSTRY OVERVIEW. The Company believes that significant business and
acquisition opportunities are available to a larger, well capitalized roofing
company that provides a full range of high-quality roofing services on a
national basis utilizing trained, customer-oriented roofing personnel. The
roofing industry is a large, highly fragmented industry primarily comprised of
numerous small, privately owned companies that generally have limited access to
capital. Prolonged economic expansion and new construction activity in the
United States have increased the number of buildings that will require
maintenance, repair, refurbishment and reroofing services and will generate
recurring revenues for roofing contractors. Furthermore, the ownership and
management of commercial and industrial properties across the United States has
become increasingly concentrated as a result of the activities of real estate
investment trusts ("REITs") and large property management companies.

According to data of the National Roofing Contractors Association
("NRCA"), total expenditures for roofing contracting services in the United
States in 1997 were approximately $20.0 billion, of which approximately $14.5
billion, or 73%, were for commercial roofing contracting services (generally
including all nonresidential roofing services). The NRCA estimates that
approximately 73% of roofing expenditures in 1997 were attributable to reroofing
(including maintenance, repair and refurbishment) and 27% were attributable to
new roof construction. The roofing industry is highly fragmented and is
estimated to include more than 35,000 companies, which are generally small,
owner-operated, independent contractors serving customers in a local market,
with limited access to capital for investment in infrastructure, technology and
expansion. The NRCA estimates that less than 4% of all industry participants
have annual sales greater than $12 million. The Company believes that no single
company accounted for more than 1% of total expenditures for roofing services in
the United States.

STRATEGY. The Company believes that its size, customer and industry
relationships, geographic scope and licensing, experience with different roofing
systems, combined workforce and use of proprietary computer databases will give
the Company significant competitive advantages in the roofing contracting
industry. Through increased size, the Company believes it will have greater
ability to attract, train and retain qualified personnel, to compete for larger
jobs that require greater bonding capacity and other resources and to deploy
roofing and repair crews in its combined markets. Increased size will also offer
efficiencies in areas such as materials purchasing, computer system and database
development, employee benefits, bonding, insurance and financing. The Company
believes that the diversity of its operations will diminish the effects of
regional and market downturns and seasonality, offer opportunities to pursue
growth and recurring revenues and create a base of expertise to expand into new
markets and serve new customers.

The Company plans to leverage its experienced management and relationships
within the roofing contracting industry to expand its business internally and
through the acquisition of additional roofing contracting businesses. Management
of the Founding Companies have extensive business relationships within the
industry, in part through membership in the NRCA, the largest roofing trade
organization in the United States with approximately 4,100 contracting firms as
members, and regional roofing associations. In addition, the Company's
management includes a Chief Executive Officer and Chief Operating Officer with
an average of 23 years of experience in the roofing and waterproofing
industries. A number of founders have served on the managing board of the NRCA
and managing boards of regional roofing associations.

2
<PAGE>
operations, expanding its business and markets through internal growth and
pursuing an aggressive acquisition growth strategy.

OPERATING STRATEGY. The Company believes there are significant
opportunities to increase the profitability of the Founding Companies and
subsequently acquired businesses. The key elements of the Company's operating
strategy are:

DEVELOP NATIONWIDE REPUTATION FOR HIGH-QUALITY ROOFING SERVICES. The
Company intends to distinguish its name and services nationwide by offering
consistent high quality, price competitive and dependable services that
significantly exceed the standard of services offered by the average
industry participant.

SHARE INFORMATION, EXPERIENCE AND BEST PRACTICES. The Company
believes it will be able to increase its profitability in its local markets
by leveraging customer relationships, expertise and marketing strengths of
individual Founding Companies. The Company will identify and share best
practices that can be successfully implemented throughout its operations.
The Company has identified the following "best practices" and methods
used by certain of the Founding Companies, which it intends to share
throughout the Company where applicable: (i) computer-managed emergency
repair services, including rapid response to local storm damage, especially
in coastal and other areas subject to hurricane, hail and tornado damage,
(ii) roofing tradework methods that reduce handling and waste of roofing
materials, increase efficiency and reduce cost and time required for
installation, inspection and payment, (iii) standardized safety practices
and programs to avoid risks and costs of noncompliance with OSHA and other
safety requirements, (iv) computer-assisted bid preparation and historical
cost calculation, used to prepare bids for fixed price contracts and to
reduce actual cost variances from estimates used in the contract bidding
process and (v) formal roof analysis, management and maintenance programs.
The Company also intends to extend the use of computer systems to
facilitate communication among the Founding Companies.

ATTRACT AND RETAIN QUALIFIED PERSONNEL. The Company believes that the
Acquisitions and the Offerings will provide competitive advantages in
attracting and retaining qualified personnel. By extending active
recruiting and training programs developed by the Founding Companies, the
Company intends to attract and retain qualified roof mechanics as well as
skilled estimators, supervisory employees and project managers. Following
the Acquisitions and the Offerings, the Company will provide (i)
stock-based compensation for key employees, (ii) advancement opportunities
available for talented employees within the larger public company, (iii)
additional training opportunities, including crew training and crew
leadership training and (iv) the opportunity to realize a more stable and
less seasonal income.

OPERATE ON DECENTRALIZED BASIS. The Company believes that a
decentralized operating strategy will retain the entrepreneurial approach
of the Founding Companies, which will be balanced by centralized financial
and accounting controls. By maintaining a local and regional focus in each
of its markets, the Company will seek to preserve its market knowledge and
customer relationships, build relationships with current and future
customers and respond to customer demands and changing market conditions.
Senior management at the Founding Companies will remain empowered to make
day-to-day operating decisions at each location and will retain primary
responsibility for profitability and growth of their business. The Company
believes that its centralized financial and accounting controls and
reporting and regular communications programs will also be integral to
realizing the benefits of the Acquisitions and the Offerings.

3
<PAGE>
INTERNAL GROWTH STRATEGY. The Company intends to leverage the competitive
strengths of the Founding Companies and subsequently acquired businesses with
the objective of achieving internal growth. Key elements of the Company's
internal growth strategy are:

LEVERAGE NATIONWIDE PRESENCE. The Company believes that its
nationwide presence will increase internal growth opportunities. The
Company intends to leverage its nationwide presence to develop additional
business from new and existing customers that operate on a regional and
national basis, such as owners of national chains, property management
companies, manufacturers, REITs, national roofing consultants and
engineering companies, developers and general construction contractors. The
Company believes that significant demand exists from such companies to
utilize the services of a single roofing services provider and believes
that existing local and regional relationships can be expanded to new
locations or on a nationwide basis. Consolidations among property owners
and management companies offer the opportunity to serve new and existing
customers on a regional or national basis. The Company's nationwide
presence also provides a large geographic base from which to respond to
local storm damage and emergency repair requests.

ENHANCE SALES AND MARKETING PROGRAM. The Company intends to expand
its regional and national account sales and marketing programs that target
large regional and national property owners and managers. The Company
intends to build on specialized marketing capabilities developed by certain
of the Founding Companies, including the following: (i) a proprietary
database that includes a roofing archive for key customers and types of
roofing systems, (ii) computer-aided-design ("CAD") display capability to
demonstrate roofing systems for potential customers, (iii) websites to
assist potential customers with the roofing bid process, the comparison of
roofing specifications for different roofing systems, (iv) the design of
maintenance programs to extend the life cycle of an existing roofing
system, (v) seminars for architects and potential customers regarding
contractor and roofing system selection, warranties and other subjects,
(vi) market research and statistical surveys to improve service quality and
customer satisfaction and (vii) targeted marketing programs based upon
research and data collection.

INCREASE FOCUS ON MAINTENANCE, REPAIR AND OTHER RECURRING
SERVICES. The Company intends to expand services to existing customers,
especially services that provide the opportunity to realize higher margins,
recurring revenues or hourly fees. The Company will focus on the following
services: (i) short-term and long-term roofing maintenance contracts and
"preferred contractor" relationships with customers, (ii) leak repair
services and (iii) ongoing roofing management services including roof
survey, analysis and budgeting services.

BROADEN SCOPE OF SPECIALTY SERVICES. The Company believes that
certain specialty services currently offered by only a few of the Founding
Companies can be offered in additional locations and in some cases can
provide higher margins. The Company has identified the following specialty
services that it intends to offer in additional locations, when
appropriate: (i) waterproofing and caulking, (ii) capacity to mobilize
experienced roofing crews and management to distant locations, (iii) metal
roof deck replacement and installation of lightweight insulating concrete
and (iv) concrete and masonry restoration and restoration of roofs on
historical buildings.

ENHANCE OPERATING EFFICIENCIES. Certain administrative functions will
be centralized following the Offerings, and the Company expects to realize
economies of scale and reduce overlapping or duplicate efforts and
expenses. The Company intends to coordinate its purchasing activities when
appropriate in dealing with suppliers, manufacturers and distributors. In
addition, as a result of the Company's size, it believes it will also lower
its costs for (i) purchasing roofing and sheet metal materials, (ii)
purchasing or leasing and routine maintenance of vehicles and cranes, (iii)
bonding, casualty and liability insurance, (iv) health insurance and
related benefits, (v) retirement benefits administration, (vi) office and
computer equipment, (vii) marketing and advertising, (viii) telephone
services and (ix) a variety of accounting, financial management and legal
services. The Company's

4
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office, shop and warehouse properties located in 18 states offer the
capacity to increase efficiency in handling, storing and fabricating
roofing materials in a number of locations. In addition, using proprietary
enhancements to project management software, the Company expects to be able
to track project status and improve capacity utilization and reporting to
customers. For customers that operate in regional or national markets, the
Company will seek to lower administrative costs of serving regional and
national accounts and to realize operating efficiencies such as lower
travel costs and reduced bid preparation time and expense. At some
locations, the Company's larger combined workforce will provide potential
staffing and scheduling efficiencies and reduce down time labor costs, both
on site and between major scheduled projects.

ACQUISITION GROWTH STRATEGY. The Company believes that the highly
fragmented nature of the roofing services industry offers significant
opportunities to pursue its acquisition strategy. The Company intends to focus
on profitable acquisition candidates with entrepreneurial skills and a
willingness to commit to exchanging effective business practices and roofing
expertise through open communications. The Company will pursue acquisition
candidates that possess: (i) highly qualified management and supervisory
personnel, (ii) a history of revenue and profit growth, (iii) diverse market
area served and established reputation for high quality roofing services, (iv) a
large and diverse customer base and (v) a complementary mix of roofing services
and specialty services. The Company believes that many roofing contracting and
service businesses that lack the capital to expand operations and the ability to
exit their business profitably will become acquisition candidates of the
Company. For these acquisition candidates, the Company will provide (i) the
opportunity to benefit from the Company's best practices, (ii) expertise in
expanding recurring and specialty services, (iii) the ability to focus on
customers and field operations rather than administrative and accounting tasks,
(iv) national name recognition, (v) increased financial and other resources,
(vi) increased liquidity and (vii) a continued role in managing operations. The
Founding Companies participate in professional associations such as the NRCA and
regional roofing associations, and the Company expects that many of its key
employees will continue to participate in such activities, in part to assist in
identifying attractive acquisition candidates. Other key elements of the
Company's acquisition strategy include:

INCREASE NATIONWIDE PRESENCE. The Company will pursue financially
stable acquisition candidates that are located in new or existing
geographic markets that have an appropriate customer base to integrate with
or complement the Company's existing business. As consolidations and
centralization of management occur among existing and potential customers,
the Company will pursue acquisition candidates with the geographical focus,
customer relationships and expertise to expand the scope of services the
Company may offer to such customers. The Company believes that increasing
its nationwide presence will allow it to build and strengthen relationships
with large, regional and national customers and will reduce the impact of
local and regional economic downturns as well as minimize weather-related
and seasonal variations in roofing activity.

EXPAND WITHIN EXISTING MARKETS. Once the Company has entered a
market, it will seek to acquire other well-established roofing contracting
and maintenance businesses operating within that region, including
"tuck-in" acquisitions of smaller companies. The Company will pursue
tuck-in acquisition candidates with the potential to realize increased
revenues from the Company's best practices, nationwide presence and other
competitive advantages. The Company believes that tuck-in acquisitions
afford the opportunity to improve its overall cost structure through the
integration of new and existing operations and to increase revenues by
providing incremental, higher margin and specialty services to new and
existing customers. Despite the integration opportunities afforded by such
tuck-in acquisitions, the Company intends to maintain existing business
names and identities in order to retain awareness among existing customers
for marketing purposes when appropriate.

5
<PAGE>
THE OFFERINGS

Common Stock offered:
U.S. Offering................... 4,800,000 shares
International Offering.......... 1,200,000 shares
------------
Total...................... 6,000,000 shares
============
Common Stock to be outstanding after
the Offerings (1)............... 16,303,566 shares
Use of proceeds...................... To pay the cash portion of the
Acquisitions Consideration, to repay
certain historical indebtedness of the
Founding Companies, to provide working
capital and to use for general corporate
purposes, which are expected to include
acquisitions. See "Use of Proceeds."
Proposed NYSE trading symbol......... "ICR"

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

(1) Includes (i) 7,543,031 shares to be issued to the owners of the Founding
Companies, (ii) 6,000,000 shares to be sold in the Offerings, (iii)
1,281,012 shares issued or reserved for issuance to the management of INCOM
and certain other individuals and (iv) 1,479,523 shares of restricted voting
common stock, par value $.01 per share ("Restricted Common Stock"), issued
to Sterling City Capital, LLC ("Sterling City") and certain individuals.
Excludes options to purchase 1,630,357 shares which are expected to be
granted upon consummation of the Offerings. See "Management -- 1998 Stock
Plan." Also excludes certain additional shares of Common Stock that may be
issued to the stockholders of two of the Founding Companies if certain
earnings threshholds are satisfied after the consummation of the Offerings.
See "Certain Transactions" and "Description of Capital Stock."

6
<PAGE>
SUMMARY PRO FORMA COMBINED FINANCIAL DATA

INCOM will acquire the Founding Companies simultaneously with and as a
condition to the consummation of the Offerings. For financial statement
presentation purposes, INCOM has been identified as the "accounting acquirer."
The following summary unaudited pro forma combined financial data present
certain information for the Company, as adjusted for (i) the effects of the
Acquisitions, (ii) the effects of certain other pro forma adjustments to the
historical financial statements and (iii) the consummation of the Offerings and
the application of the net proceeds therefrom. The unaudited pro forma combined
income statement data and the pro forma balance sheet data assume that the
Acquisitions, the Offerings and related transactions were closed on January 1,
1997 and on March 31, 1998, respectively, and are not necessarily indicative of
the results that the Company would have obtained had these events actually
occurred at those dates. During the periods presented below, the Founding
Companies were not under common control or management and, therefore, the data
presented may not be comparable to or indicative of post-combination results to
be achieved by the Company. The unaudited pro forma combined income statement
data are based on preliminary estimates, available information and certain
assumptions that Company management deems appropriate. The unaudited pro forma
combined financial data should be read in conjunction with the other financial
information included elsewhere in this Prospectus. See "Selected Financial
Data," the Unaudited Pro Forma Combined Financial Statements and notes thereto,
and the historical financial statements for certain of the Founding Companies
and the notes thereto, all included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PRO FORMA
---------------------------------------------------
THREE MONTHS ENDED MARCH 31,
YEAR ENDED ------------------------------
DECEMBER 31, 1997 1997 1998
------------------ -------------- --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
STATEMENTS OF OPERATIONS DATA
(UNAUDITED):
Revenues........................ $ 216,877 $ 38,999 $ 43,782
Cost of services (including
depreciation)................. 166,559 30,420 35,078
------------------ -------------- --------------
Gross profit.................... 50,318 8,579 8,704
Selling, general and
administrative expenses(a).... 31,415 6,057 8,036
Goodwill amortization(b)........ 2,763 691 691
------------------ -------------- --------------
Income (loss) from operations... 16,140 1,831 (23)
Interest and other income,
net........................... 978 92 140
------------------ -------------- --------------
Income before provision for
income taxes.................. 17,118 1,923 117
Provision for income taxes...... 7,952 1,045 323
------------------ -------------- --------------
Net income (loss)............... $ 9,166 $ 878 $ (206)
================== ============== ==============
Net income (loss) per share..... $ 0.57 $ 0.05 $ (0.01)
================== ============== ==============
Shares used in computing pro
forma net income (loss) per
share(c)...................... 16,129,104 16,129,104 16,129,104
================== ============== ==============
</TABLE>

PRO FORMA
AS OF MARCH 31, 1998(D)
-----------------------------
COMBINED AS ADJUSTED(E)
----------- --------------
(IN THOUSANDS)
BALANCE SHEET DATA (UNAUDITED):
Working capital (deficit)....... $ (40,500)(f) $ 25,171
Total assets.................... 175,945 176,729
Long-term obligations, net of
current maturities............. 4,094 595
Total stockholders' equity...... 78,448 146,588

(FOOTNOTES ON FOLLOWING PAGE)

7
<PAGE>
- ---------------

(a) The pro forma combined statements include the effect of certain reductions
in salary and benefits to the owners of the Founding Companies to which they
have agreed prospectively. Additionally, the pro forma combined statements
include the effect of assets distributed to the owners of certain of the
Founding Companies and certain other adjustments. Additionally, the pro
forma combined statements exclude a $1.6 million non-recurring, non-cash
compensation charge related to the issuance of Common Stock to certain
members of management. See "Certain Transactions."

(b) Reflects amortization of the goodwill to be recorded as a result of the
Acquisitions over a 40-year period and computed on the basis described in
Note 3 to the Unaudited Pro Forma Combined Financial Statements.

(d) Reflects $23.5 million in distributions of nonoperating assets, excess
working capital, and the value of various Founding Companies' S Corporation
accumulated adjustment accounts (generally the amount of an S corporation's
undistributed accumulated earnings for which the stockholders are
individually subject to federal income taxation) that will be transferred in
connection with the Acquisitions to the owners of the Founding Companies
(collectively, the "Owner Amounts"). This amount will be funded through
the following: (i) transfers of approximately $1.9 million of nonoperating
assets, (ii) the issuance of approximately $12.8 million of notes payable to
certain owners of the Founding Companies, which will be retired with
proceeds from Offerings and (iii) the payment of $8.8 million for S
Corporation accumulated adjustment account balances (including $5.5 million
of notes payable to be repaid with proceeds from the Offerings). See
"Certain Transactions."

(e) Reflects the closing of the Offerings and the Company's application of the
net proceeds therefrom. See "Use of Proceeds" and "Certain
Transactions."

(f) Includes the estimated $40.0 million of notes payable to owners of the
Founding Companies, representing the cash portion of the Acquisitions
Consideration to be paid from a portion of the net proceeds from the
Offerings. See "Pro Forma -- As Adjusted" amounts. The cash portion of the
Acquisitions Consideration will be adjusted based on the initial public
offering price of the Common Stock offered hereby and certain closing
balance sheet amounts. In addition, certain additional cash and shares of
Common Stock will be payable to stockholders of two of the Founding
Companies if certain earnings thresholds are met after consummation of the
Offerings. See "Certain Transactions."

8
<PAGE>
SUMMARY INDIVIDUAL FOUNDING COMPANY HISTORICAL FINANCIAL DATA

The following table presents certain summary historical income statement
data of the Founding Companies for each of their three most recent fiscal years
and the three-month periods ended March 31, 1997 and 1998. The historical income
statement data below have not been adjusted for the pro forma adjustments
related to contractually agreed reductions in salaries and benefits or any other
pro forma adjustments reflected in the Unaudited Pro Forma Combined Financial
Statements, included elsewhere in this Prospectus. With the exception of the
data for Kelley Brothers, the income statement data presented below have been
audited for the Founding Companies for the periods reflected in the historical
financial statements of such Founding Companies included elsewhere in this
Prospectus. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEARS ENDED(A) MARCH 31,(B)
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
D.C. TAYLOR:
Revenues......................... $ 26,440 $ 30,836 $ 35,472 $ 6,301 $ 8,156
Income (loss) from operations.... (107) 652 471 13 (315)
SEYFORTH:
Revenues......................... $ 22,339 $ 28,975 $ 31,086 $ 5,872 $ 6,220
Income (loss) from operations.... 224 248 1,372 269 (317)
NU-TEC:
Revenues......................... $ 23,288 $ 25,534 $ 28,589 $ 6,093 $ 7,381
Income from operations........... 1,209 1,522 1,833 249 526
BETA:
Revenues......................... $ 17,061 $ 17,728 $ 24,032 $ 3,266 $ 3,966
Income (loss) from operations.... 1,207 1,862 3,587 625 (226)
EVANS:
Revenues......................... $ 12,281 $ 15,875 $ 17,832 $ 1,783 $ 5,023
Income (loss) from operations.... 130 744 642 (277) 150
BRAZOS:
Revenues......................... $ 3,307 $ 11,082 $ 17,035 $ 3,345 $ 1,406
Income (loss) from operations.... (135) 1,649 1,681 458 (239)
KELLEY BROTHERS:
Revenues......................... $ 11,356 $ 11,942 $ 13,771 $ 2,664 $ 1,608
Income (loss) from operations.... 238 200 488 (110) (25)
CHAMBERLIN:
Revenues......................... $ 9,780 $ 13,196 $ 12,296 $ 2,337 $ 2,232
Income from operations........... 506 281 849 160 265
BURNS & SCALO:
Revenues......................... $ 11,275 $ 14,012 $ 11,613 $ 2,366 $ 2,119
Income from operations........... 270 536 749 118 5
BOONE:
Revenues......................... $ 8,157 $ 9,820 $ 10,657 $ 1,660 $ 1,706
Income (loss) from operations.... 493 331 598 (14) (153)
SUTTER:
Revenues......................... $ 5,585 $ 7,707 $ 8,756 $ 2,268 $ 2,447
Income from operations........... 61 569 355 200 169
M.J. DALSIN:
Revenues......................... $ 4,053 $ 5,424 $ 5,738 $ 1,044 $ 1,518
Income from operations........... 266 449 551 53 169
COMBINED:
Total revenues................... $ 154,922 $ 192,131 $ 216,877 $ 38,999 $ 43,782
Total income from operations..... 4,362 9,043 13,176 1,744 9
</TABLE>

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

(a) The fiscal years presented above are the years ended December 31, 1995, 1996
and 1997, except for Beta, for which the fiscal years are the years ended
September 30, 1995, 1996 and 1997 and Kelley Brothers, for which the fiscal
years are the years ended September 30, 1995 and 1996 and December 31, 1997.

(b) Represents the three months ended March 31, 1997 and 1998 for all Founding
Companies. For the three months ended December 31, 1996 and 1997, Beta and
Kelley Brothers had combined revenues of $6.4 million and $9.0 million,
respectively, and income from operations of $0.1 million and $1.0 million,
respectively.

<PAGE>
RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS AS
WELL AS THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS
CONTAINS FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF A NUMBER OF
FACTORS, INCLUDING THE RISK FACTORS SET FORTH BELOW AND ELSEWHERE IN THIS
PROSPECTUS.

ABSENCE OF COMBINED OPERATING HISTORY

INCOM was founded in February 1998 but has conducted no operations and
generated no revenues to date. INCOM has entered into agreements to acquire the
Founding Companies simultaneously with the closing of the Offerings. The
Founding Companies have been operating and will continue to operate as separate
independent entities, and there can be no assurance that the Company will be
able to integrate these businesses on a profitable basis. In addition, there can
be no assurance that the recently assembled management group will be able to
oversee the combined entity and effectively implement the Company's operating or
growth strategies. The pro forma combined financial results of the Founding
Companies cover periods during which the Founding Companies and INCOM were not
under common control or management and, therefore, may not be indicative of the
Company's future financial or operating results. The Company plans to coordinate
certain systems and programs for the Founding Companies, including financial and
accounting systems, purchasing programs and marketing programs. The inability of
the Company to successfully integrate the Founding Companies and to coordinate
and integrate the Company's operations and systems could have a material adverse
effect on the Company's financial condition and results of operations.

EXPOSURE TO CYCLICALITY AND DOWNTURNS IN CONSTRUCTION

The Company's primary business involves installation of roof systems on
newly constructed and existing commercial, industrial, governmental and
institutional buildings. The Company's ability to maintain or increase revenues
depends on the levels of new construction starts in the Company's geographic
markets and on levels of spending by building and plant owners on reroofing,
refurbishment, repair and maintenance of roof systems. Both new construction
starts and levels of reroofing, refurbishment, repair and maintenance
expenditures generally reflect the cyclical nature of the construction industry,
local economic conditions, changes in interest rates, and other related factors,
and, for governmental customers, levels of governmental spending. Downturns in
levels of commercial construction or reroofing, refurbishment, repair and
maintenance expenditures could have a material adverse effect on the Company's
business, financial condition and results of operations.

SEASONAL NATURE OF THE ROOFING CONTRACTING INDUSTRY

The roofing construction industry is influenced by seasonal factors, which
generally result in lower activity levels during colder winter months than other
periods. As a result, the Company expects that its revenues and results of
operations will generally be lower in the fourth and first quarters of each
fiscal year, and higher in the second and third quarters. This seasonality may
cause higher than normal volatility in the prevailing market prices of the
Common Stock. In addition to seasonal weather patterns, levels of spending on
roof repair and refurbishment are affected by non-seasonal weather trends, such
as periods of extreme hot or cold temperatures and storm activity. Generally,
periods of mild weather or low rainfall may reduce the need for roof repair
work, while extreme temperatures or storms can damage roof systems and cause
increased demand for roofing services. Periods of extreme weather conditions can
also delay the performance of roofing contracts. Accordingly, the Company
expects that variations in weather patterns in the Company's geographic markets
will in the future cause variations, which may be material, in the Company's
revenues and results of operations for any given period. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

10
<PAGE>
AVAILABILITY OF SKILLED ROOFING MECHANICS

The timely provision of high-quality roofing services requires an adequate
supply of skilled roofing mechanics, including roofing supervisors. The supply
of skilled roofing mechanics depends upon economic and competitive conditions
and the level of demand for roofing services. From time to time, the roofing
industry experiences shortages of skilled personnel in various geographic
markets, which can cause labor costs to increase. Accordingly, the Company's
ability to increase its productivity and profitability may be limited by its
ability to train and retain sufficient numbers of employees with appropriate
skills and legal immigration or work permit status. There can be no assurance
that the Company will be able to maintain a workforce adequate to operate
efficiently, that the Company's labor expense will not increase as a result of a
personnel shortage, or that the Company will not have to curtail its planned
internal growth as a result of labor shortages.

RELIANCE ON ACQUISITIONS

One of the Company's principal growth strategies is to increase its
revenues, geographic diversity and scope of services offered and to diversify
its business mix through the acquisition of roofing contracting companies in its
existing and additional markets. There can be no assurance that the Company will
be able to acquire additional businesses or to integrate and manage such
additional businesses successfully. Acquisitions may involve a number of risks,
including adverse short-term effects on the Company's reported operating
results, diversion of management's attention and resources to acquisitions,
amortization of acquired intangible assets, integration of financial and
accounting systems, the risk that an acquired business may not achieve revenues
and profitability sufficient to justify its acquisition price and other risks
associated with unanticipated problems or legal liabilities. In addition,
consolidation has occurred among contractors in the roofing contracting
industry. To the extent that consolidation becomes more prevalent in the roofing
contracting industry, the prices for attractive acquisition candidates may
increase and the number of attractive acquisition candidates may decrease. Other
consolidators may have greater financial resources than the Company to finance
acquisitions and might be willing to pay higher prices than the Company for the
same acquisition opportunities, which could have an adverse effect on the
Company's ability to grow through acquisitions. See "Business -- Strategy."

ACQUISITION FINANCING

Expansion of the Company through its acquisition program will require
significant capital. The timing, size and success of the Company's acquisition
efforts and the associated capital commitments cannot be readily predicted. The
Company currently intends to use its Common Stock or other equity securities for
a portion of the consideration for future acquisitions. If the Common Stock does
not maintain a sufficient valuation or potential acquisition candidates are
unwilling to accept Common Stock or other equity securities 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 pursue its
acquisition program. If the Company does not have sufficient cash resources, its
growth could be limited unless it is able to obtain additional capital through
future debt or equity financings. Such indebtedness, if incurred, would increase
the Company's leverage, may make the Company more vulnerable to economic
downturns and may limit its ability to withstand competitive pressures.

The Company has recently initiated negotiations with a group of commercial
banks to provide the Company with a credit facility to be used for working
capital, capital expenditures and general corporate purposes, which are expected
to include acquisitions. Any such credit facility or other debt financing may
include financial covenants that limit the Company's operations and financial
flexibility. There can be no assurance that the Company will be able to obtain
such financing if and when it is needed or that, if available, it will be
available on terms the Company deems acceptable. As a result, the Company might
be unable to successfully pursue its acquisition strategy. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Combined Liquidity and Capital Resources" and
"Business -- Strategy."

11
<PAGE>
MANAGEMENT OF GROWTH

The Company expects to grow its business both internally and through
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. Significant future growth will impose added responsibilities on members
of senior management and require the Company to identify, recruit and integrate
additional senior level managers and executives. If the Company is unable to
manage its growth effectively, or is unable to attract and retain additional
qualified management, the Company's financial condition and results of
operations could be adversely affected. See "Business -- Strategy."

CONTROL BY EXISTING MANAGEMENT AND STOCKHOLDERS

Upon the consummation of the Acquisitions and the Offerings, the Company's
executive officers, directors and affiliates will beneficially own in the
aggregate 41% of the total outstanding shares of Common Stock and Restricted
Common Stock (39% if the Underwriters' over-allotment options are 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."

PROCEEDS OF OFFERINGS AND BENEFITS TO AFFILIATES

Sterling City has agreed to advance whatever funds are necessary to effect
the Acquisitions and the Offerings. As of June 30, 1998, Sterling City had
outstanding advances to the Company in the aggregate amount of approximately
$0.3 million. All advances from Sterling City will be repaid from the proceeds
of the Offerings. Subject to certain adjustments, approximately $40.0 million,
or approximately 59%, of the net proceeds of the Offerings (net of estimated
offering costs, including underwriting discounts and commissions) will be paid
in cash to the owners of the Founding Companies (who will generally become
officers, directors or employees of the Company). Approximately $12.8 million of
the net proceeds will be used to fund a portion of the Owner Amounts of certain
Founding Companies. Approximately $9.0 million will be used to repay historical
indebtedness of the Founding Companies, including approximately $0.7 million
held by certain stockholders and affiliates of the Founding Companies. Prior to
the Acquisitions, certain of the Founding Companies that are S corporations will
incur approximately $5.5 million in indebtedness to their stockholders to fund
the distribution of amounts not in excess of the amount of each such
corporation's "accumulated adjustment account" (generally the amount of an S
corporation's undistributed accumulated earnings for which the stockholders are
individually subject to federal income taxation). This indebtedness will be
repaid with proceeds from the Offerings. See "Use of Proceeds" and "Certain
Transactions."

BENEFITS TO FOUNDER AND MANAGEMENT

An aggregate of 2,760,535 shares of Common Stock have been issued or
reserved for issuance to Sterling City, management and certain other individuals
for nominal consideration. These shares will represent, in the aggregate,
approximately 17% of the total outstanding Common Stock following the
consummation of the Offerings. Of these shares of Common Stock, 1,479,523 shares
are Restricted Common Stock, which are entitled to two-thirds of one vote for
each share held on all matters on which they are entitled to vote. The holders
of the Restricted Common Stock are entitled, as a group, to elect one member of
the Company's Board of Directors but are not entitled to vote on the election of
any other members of the Company's Board of Directors. Such restrictions will
terminate upon the occurrence of certain events. See "Principal Stockholders"
and "Description of Capital Stock."

FIXED PRICE CONTRACTING; SUPPLY OF ROOFING MATERIALS

Nearly all of the Company's new roofing and major reroofing or roof repair
services are performed under fixed price contracts, so that the risk of cost
overruns on a given project is generally borne by the Company. The Company's
ability to remain profitable depends in part on its ability to estimate
accurately the material and labor costs of performing roofing projects. From
time to time, market conditions in a given

12
<PAGE>
geographic area can cause increases in skilled labor costs, and disruptions in
the supply of roofing materials can cause cost increases, either directly or
through delays in delivery of materials. Rubber membrane type roofing products
are currently manufactured by only two manufacturers, and the cost and
availability of all roofing systems and materials depends upon the supply of raw
materials, including petroleum, which may be subject to shortages. Costs can
also be affected by delays caused by weather, other contractors working on a
given project or other factors beyond the Company's control. Certain contracts
provide for payment of liquidated damages by the roofing contractor if
completion deadlines are not met. Large roofing contracts typically provide for
retainage of a specified percentage of the contract amount until the work has
been fully reviewed and formally accepted by the customer or property owner.
Increases in costs caused by any of these factors could have material adverse
effects on the Company's profitability. See "Business -- Contracts, Suppliers
and Warranties."

LIABILITY AND INSURANCE

The Company's business exposes it to potential claims for personal injury
or death resulting from injuries to its employees and other persons, property
damage and negligence, intentional misconduct or defective materials or
workmanship in connection with the Company's installation, repair or maintenance
of roofing systems. Claims made by the Company's customers may be based on
warranties provided by the Company with respect to materials or workmanship or
may be based on common law or state statutes relating to the conduct of
contractors. Although prior to the Acquisitions each of the Founding Companies
has carried comprehensive insurance subject to deductibles and following the
Acquisitions the Company will carry such insurance, certain types of claims may
not be covered by insurance. The Company relies on its customers and their
professional service providers, such as architects, engineers and roofing
consultants, to determine the structural adequacy of the buildings for which the
Company's crews provide roofing services. There can be no assurance that
existing or future claims would not exceed the level of insurance of the
Founding Companies or the Company, or that such insurance will continue to be
available on economically reasonable terms. See "Business -- Legal
Proceedings."

DEPENDENCE ON KEY PERSONNEL

The Company's operations will be dependent on the continued efforts of its
executive officers and senior management of the Founding Companies as well as on
the senior management of companies that may be acquired in the future. Although
the Company will enter into an employment agreement with each of the Company's
executive officers and with one or more key employees of each of the Founding
Companies, there can be no assurance that any individual will continue in such
capacity for any particular period of time. The loss of key personnel or the
inability to hire and retain qualified employees could have an adverse effect on
the Company's business, financial condition and results of operations. The
Company does not maintain key man life insurance. See "Management."

COMPETITION

The roofing contracting industry is highly fragmented and competitive and
is generally served by a large number of small, owner-operated private companies
and by several companies that provide roofing services on a regional or national
basis. The Company could face additional competition in the future from other
competitors entering the market, which may include representatives of roofing
manufacturers and roofing consultants that could provide certain services also
provided by the Company. Certain aspects of the roofing contracting business do
not require extensive capital investment in inventory and facilities by
competitors who may seek to enter the market. Competition in the roofing
contracting industry depends on a number of factors, including price. As a
result, although the Company believes it will be able to compete effectively in
its markets, increased competition could adversely affect the Company's
profitability. Certain of the Company's competitors may have greater financial
and other resources than the Company and may have lower overhead cost structures
that may enable them to provide services at lower prices than the Company. See
"Business -- Competition."

13
<PAGE>

The Company's business and the activities of its roofing contractors are
subject to various federal, state, and local laws, regulations and ordinances
relating to, among other things, the licensing and certification of roofing
contractors, safety standards determined and enforced by the Occupational Safety
and Health Administration and environmental laws and regulations relating to the
disposal of demolition debris, asbestos and other solid wastes. The Company is
also subject to certain federal, state and local laws and regulations which
regulate the Company's advertising, warranties and disclosures to customers and
the bidding process required to obtain roofing contracts. The U.S. Environmental
Protection Agency and a variety of state environmental agencies regulate the use
and handling of certain materials used by roofing contractors and the disposal
of wastes generated by roofing contractors. Certain materials used or handled by
the Company or removed by the Company from factories or other projects are
classified as hazardous materials requiring special handling, transportation and
disposal. Fines and penalties may be imposed for failure to comply with
environmental laws and regulations, and the Company could become subject to
environmental cleanup obligations as a result of any improper disposal of
hazardous or nonhazarous waste. The Company is also required to comply with
labor laws and regulations, including those that relate to verification by
employers of legal immigration or work permit status of employees. Applicable
regulations may change and may increase expenses or cause project delays. There
can be no assurance that in the future the Company's results of operations will
not be materially adversely affected by existing or new laws or regulations
applicable to the Company's business.

NO PRIOR MARKET; POSSIBLE VOLATILITY OF STOCK

Prior to the Offerings, no public market for the Common Stock has existed.
The initial public offering price, which will be determined by negotiation
between the Company and representatives of the Underwriters, may not be
indicative of the price at which the Common Stock will trade after the
Offerings. See "Underwriting" for the factors to be considered in determining
the initial public offering price. The Company intends to make application to
list the Common Stock on the NYSE, but no assurance can be given that an active
trading market for the Common Stock will develop or, if developed, continue
after the Offerings. The market price of the Common Stock after the Offerings
may be subject to significant fluctuations from time to time in response to
numerous factors, including variations in the reported financial results of the
Company (including as a result of seasonal variations) and changing conditions
in the economy in general or in the roofing contracting industry in particular.
See " -- Seasonal Nature of Roofing Contracting Industry" and " -- Exposure
to Cyclicality and Downturns in Construction." In addition, the stock markets
experience significant price and volume volatility from time to time, which may
affect the market price of the Common Stock for reasons unrelated to the
Company's performance.

SHARES ELIGIBLE FOR FUTURE SALE

Simultaneously with the closing of the Offerings, the owners of the
Founding Companies will receive, in the aggregate, 7,543,031 shares of Common
Stock as a portion of the Acquisitions Consideration, excluding certain
additional shares that may be issued to the stockholders of two of the Founding
Companies if certain earnings threshholds are satisfied after the consummation
of the Offerings. None of these shares was or will be issued in a transaction
registered under the Securities Act, and, accordingly, such shares may not be
sold except in transactions registered under the Securities Act or pursuant to
an exemption from registration, including the exemptions contained in Rules 144
and 701 under the Securities Act. The current stockholders of the Company and
the owners of the Founding Companies have agreed with the Company not to sell,
contract to sell or otherwise dispose of any shares of Common Stock received as
consideration in the Acquisitions for a period of two years following receipt
thereof without the Company's consent. When these shares become saleable, the
market price of the Common Stock could be adversely affected by the sale of
substantial amounts of the shares in the public market. The stockholders of the
Founding Companies will have certain piggy-back registration rights with respect
to their shares of Common Stock, which may be exercised during the two-year
period referred to above, and the current

14
<PAGE>
stockholders of the Company will have certain piggy-back registration rights,
which may be exercised following a one-year period after the Offerings.

Upon the closing of the Offerings, the Company also will have outstanding
options to purchase up to a total of approximately 1,630,357 shares of Common
Stock issued pursuant to the Company's 1998 Stock Plan. The maximum number of
shares of Common Stock that may be subject to outstanding awards under the 1998
Stock Plan, determined immediately prior to the grant of any award, may not
exceed 15% of the aggregate number of shares of Common Stock then outstanding.
The Company intends to file a registration statement covering all the shares
subject to these plans under the Securities Act. See "Management."

The Company currently intends to file a registration statement covering up
to an additional 6,000,000 shares of Common Stock under the Securities Act for
its use in connection with future acquisitions. These shares generally will be
freely tradeable after their issuance by persons not affiliated with the Company
unless the Company contractually restricts their resale.

There can be no assurance that the resale or the availability for sale of
the shares of Common Stock eligible for future sale will not have an adverse
effect on the prevailing market price of the Common Stock.

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company's Amended and Restated Certificate of Incorporation, Bylaws,
employment agreements and employee benefit plans contain provisions which may
have the effect of delaying, deferring or preventing a change in control of the
Company. For example, the Company's Amended and Restated Certificate of
Incorporation and Bylaws provide for, among other things, a classified Board of
Directors, the prohibition of stockholder action by written consent and the
requirement for an affirmative vote of at least two-thirds of all outstanding
shares of Common Stock to approve the removal of directors from office. The
Company's Board of Directors has the authority to issue shares of preferred
stock in one or more series and to fix the rights and preferences of the shares
of any such series without stockholder approval. Any series of preferred stock
is likely to be senior to the Common Stock with respect to dividends,
liquidation rights and, possibly, voting. In addition, the Board of Directors
may issue certain "poison pill" rights pursuant to a rights plan authorized by
the Amended and Restated Certificate of Incorporation. The ability to issue
preferred stock or rights could have the effect of discouraging unsolicited
acquisition proposals. Restrictions on the Restricted Common Stock will
terminate in the event any person acquires or offers to acquire beneficial
ownership of 15% or more of the total number of outstanding shares of Common
Stock, or upon the occurrence of certain other events. The Company's 1998 Stock
Plan contains provisions that allow for, among others, the acceleration of
vesting or payment of awards granted under such plans in the event of a "change
of control," as defined in such plans. In addition, the Company has entered
into employment agreements with certain executive officers and key employees
allowing for cash payments under certain circumstances following a change in
control, which is generally defined to occur upon (i) the acquisition by any
person of 20% or more of the total voting power of the outstanding securities of
the Company, (ii) the first purchase pursuant to a tender or exchange offer for
Common Stock, (iii) the approval of certain mergers, sale of substantially all
the assets, or dissolution of the Company or (iv) a change in a majority of the
members of the Company's Board of Directors.

AMORTIZATION OF GOODWILL

The Company's balance sheet immediately following the consummation of the
Acquisitions and the Offerings will include an amount designated as "goodwill"
that represents 63% of assets and 75% of stockholders' equity. Goodwill arises
when an acquirer pays more for a business than the fair value of the tangible
and separately measurable intangible net assets. Generally accepted accounting
principles require that this and all other intangible assets be amortized over
the period benefited. Management has determined that period is no less than 40
years. If the Company were to assign a shorter life to a material portion of the
goodwill, earnings reported in periods immediately following the acquisition of
the Founding Companies would be reduced. Earnings in later years could be
significantly affected if management determined then that the remaining balance
of goodwill was impaired.

15
<PAGE>
IMMEDIATE AND SUBSTANTIAL DILUTION

The purchasers of the shares of Common Stock offered hereby will experience
immediate dilution in the net tangible book value of their shares of $10.79 per
share (assuming an initial public offering price of $13.00 per share). See
"Dilution." In the event the Company issues additional shares of Common Stock
in the future, including shares which may be issued in connection with
acquisitions or other public or private financings, purchasers of Common Stock
in the Offerings may experience further dilution in the net tangible book value
per share of the Common Stock. See "Dilution."

YEAR 2000 ISSUE

Many computer software applications and operating programs written in the
past may not properly recognize calendar dates beginning in the year 2000. Such
a recognition failure could cause computer systems to shut down or provide
incorrect information. Several of the Founding Companies are not currently year
2000 compliant. The Company has plans to prepare its computer systems and
related software to accommodate sensitive information relating to the year 2000.
The Company expects that any additional costs related to ensuring such systems
and software to be ready for the year 2000 will not be material to the financial
condition or results of operations of the Company. There can be no assurance
that no year 2000 related computer operating problems or expenses will arise
with the computer systems and software of the Company, the individual Founding
Companies or the Company's vendors and customers.

16
<PAGE>
THE COMPANY

INCOM was organized in February 1998. Concurrently with and as a condition
to the closing of the Offerings, INCOM will acquire the 12 Founding Companies,
which had pro forma combined revenues of approximately $216.9 million for the
year ended December 31, 1997, making the Company the largest provider in the
United States of roofing contracting services for commercial, industrial,
governmental and institutional customers. The Founding Companies install many
different types of roofing systems by many different manufacturers and also
install waterproofing and insulated roof decks in certain locations.
Collectively, the Founding Companies have been in business for an average of
approximately 36 years and are licensed in all states that require licensing
(including California and Florida), have 41 facilities in 18 states and in 1997
performed roofing services in 42 states and in Washington, D.C., Puerto Rico and
Mexico.

Generally, each of the Founding Companies performs roofing, reroofing,
maintenance, repair, and refurbishment services for commercial, industrial,
governmental and institutional customers. In addition, each of the Founding
Companies has specialized expertise in certain types of roofing work and related
services. A brief description of each of the Founding Companies is set forth
below.

D.C. TAYLOR CO. D.C. Taylor was founded in 1949, is headquartered in Cedar
Rapids, Iowa, and has additional facilities outside Atlanta, Georgia, outside
Oakland, California, and in Phoenix, Arizona. D.C. Taylor had revenues of
approximately $35.5 million for the year ended December 31, 1997. D.C. Taylor
has specialized expertise in standing seam metal roofing, architectural sheet
metal, asbestos abatement and emergency repair services, which are offered to
certain customers 24 hours a day, 365 days a year. D.C. Taylor has approximately
350 employees. William W. Taylor, Chairman and Chief Executive Officer of D.C.
Taylor, will sign a five-year employment agreement to become Chief Operating
Officer of INCOM following the consummation of the Offerings. Philip J. Suess,
President and Chief Operating Officer of D.C. Taylor, will sign a five-year
employment agreement to continue in his present position with D.C. Taylor
following the consummation of the Offerings.

SEYFORTH ROOFING COMPANY, INC. Seyforth was founded in 1927, is
headquartered in Garland, Texas, and has additional facilities in Albuquerque,
New Mexico, Houston and El Paso, Texas, and Birmingham, Alabama. Seyforth had
revenues of approximately $31.1 million for the year ended December 31, 1997.
Seyforth has specialized expertise in standing seam metal roofing. Seyforth has
approximately 480 employees. Dan B. Hand, President of Seyforth, will sign a
five-year employment agreement to continue in his present position with Seyforth
and will become a director of INCOM following the consummation of the Offerings.

NU-TEC ROOFING CONTRACTORS, INC. Nu-Tec was founded in 1984, is
headquartered in Indianapolis, Indiana, and has additional facilities in
Cincinnati, Ohio and Tampa, Florida. Nu-Tec had revenues of approximately $28.6
million for the year ended December 31, 1997. Nu-Tec has specialized expertise
with sheet metal roofing systems and asbestos abatement. Nu-Tec has
approximately 290 employees. Bruce Bubenzer, President of Nu-Tec, will sign a
five-year employment agreement to continue in his present position with Nu-Tec
and will become a director of INCOM following the consummation of the Offerings.

BETA CONSTRUCTION COMPANY. Beta was founded in 1981, is headquartered in
Capitol Heights, Maryland, and operates in and around Washington, D.C. Beta had
revenues of approximately $24.0 million for the year ended September 30, 1997.
Beta has specialized expertise in waterproofing, concrete refurbishment,
historical building renovation and clay tile roofing. Beta has approximately 160
employees. Paul Gordon, founder, President and Chief Executive Officer of Beta,
will sign a five-year employment agreement to continue in his present position
with Beta and will become a director of INCOM following the consummation of the
Offerings.

EVANS SERVICE COMPANY, INC. Evans was founded in 1945, is headquartered in
Elmira, New York, and has additional facilities in Endicott, New York, Raleigh,
North Carolina and Auburndale, Florida. Evans had revenues of approximately
$17.8 million for the year ended December 31, 1997. Evans has specialized
expertise in installing thermoplastic membranes and architectural sheet metal
and in performing

17
<PAGE>
historical roofing restoration. Evans has approximately 220 employees. Philip
McKinney, Chief Executive Officer of Evans, and Kevin Kennedy, Executive Vice
President of Evans, and Wayne D. Mercer, Chief Financial Officer of Evans, will
sign five-year employment agreements to continue in their respective positions
with Evans. Philip McKinney will also become a director of INCOM following the
consummation of the Offerings.

BRAZOS ROOFING INTERNATIONAL. Brazos was founded in 1989, is headquartered
in Waco, Texas, has additional facilities in South Dakota and performs roofing
services nationwide. Brazos had revenues of approximately $17.0 million for the
year ended December 31, 1997, generally from reroofing work performed for the
United States government. Brazos has specialized expertise with government bid
preparation and contract management and the mobilization of experienced roofing
work crews and managers to work at government installations nationwide and in
certain international locations. Brazos has approximately 60 employees. Steven
Smith, founder and President of Brazos, will sign a five-year employment
agreement to continue in his present position with Brazos following the
consummation of the Offerings.

KELLEY BROTHERS ROOFING, INC. Kelley Brothers was founded in 1985, is
headquartered in greater Cincinnati, Ohio, and has additional facilities in
Columbus, Ohio and Harrison, Indiana. Kelley Brothers had revenues of
approximately $13.8 million for the year ended December 31, 1997. Kelley
Brothers has specialized expertise in sloped metal roofing. Kelley Brothers has
approximately 90 employees. Robert D. Kelley, co-founder and President of Kelley
Brothers, will sign a five-year employment agreement to continue as Chief
Executive Officer of Kelley Brothers following the consummation of the
Offerings, and Michael Kelley, co-founder of Kelley Brothers, will sign a
five-year employment agreement to continue as President of Kelley Brothers
following the consummation of the Offerings.

CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC. The original Chamberlin
company was founded in 1897 and through a continuous chain of ownership became
Chamberlin Waterproofing & Roofing Systems, Inc. in 1978. Chamberlin has
facilities in Houston, Dallas and Austin, Texas. Chamberlin had revenues of
approximately $12.3 million for the year ended December 31, 1997. Chamberlin has
specialized expertise in the installation of specialty waterproof coatings and
sealants for buildings and parking garages, maintenance surveys and long-term
maintenance and repair contracts. Chamberlin has approximately 180 employees.
John M. Kafka, President of Chamberlin, will sign a five-year employment
agreement to become Chief Executive Officer of INCOM and will become a director
of INCOM following the consummation of the Offerings. Martin Stroud, Executive
Vice President of Chamberlin, will sign a five-year employment agreement to
become President of Chamberlin following the consummation of the Offerings.

BURNS & SCALO ROOFING COMPANY, INC. Burns & Scalo was founded in 1956 and
is headquartered in Pittsburgh, Pennsylvania. Burns & Scalo had revenues of
approximately $11.6 million for the year ended December 31, 1997. Burns & Scalo
has specialized experience in commercial sheet metal roofing and steep-slope and
slate and tile roofing. Burns & Scalo has approximately 140 employees. Jack F.
Scalo, President of Burns & Scalo, will sign a five-year employment agreement to
continue in his present position with Burns & Scalo and will become a director
of INCOM following the consummation of the Offerings.

BOONE BROTHERS ROOFING, INC. Boone was founded in 1957, is headquartered
in Omaha, Nebraska, and has additional facilities in Kansas City, Kansas. Boone
had revenues of approximately $10.7 million for the year ended December 31,
1997. Boone has specialized expertise in concrete tile and slate roofing. Boone
has approximately 120 employees. Allan E. Boone, President of Boone, will sign a
five-year employment agreement to continue in his present position with Boone
following the consummation of the Offerings.

SUTTER ROOFING COMPANY OF FLORIDA. Sutter was founded in 1979 and is
headquartered in Sarasota and Fort Myers, Florida. Sutter had revenues of
approximately $8.8 million for the year ended December 31, 1997. Sutter has
specialized expertise in architectural standing seam roofing and in roofing
freezers and cold storage facilities. Sutter has approximately 100 employees.
Stephen F. Sutter, President of

18
<PAGE>
Sutter, will sign a five-year employment agreement to continue in his present
position with Sutter following the consummation of the Offerings.

M.J. DALSIN COMPANY, INC. M.J. Dalsin was established in 1975 and has
headquarters in West Fargo, North Dakota, and Sioux Falls, South Dakota. M.J.
Dalsin had revenues of approximately $5.7 million for the year ended December
31, 1997. M.J. Dalsin has specialized expertise in cold weather application of
roof membrane systems. M.J. Dalsin has approximately 50 employees. Michael J.
Dalsin, founder and President of M.J. Dalsin, will sign a five-year employment
agreement to continue in his present position with M.J. Dalsin and will become a
director of INCOM following the consummation of the Offerings.

INCOM Roofing Services, Inc. was incorporated in Delaware in February 1998.
Its executive offices are located at 515 Post Oak Blvd., Suite 450, Houston,
Texas 77027, and its telephone number is (713) 860-1534.

19
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby (assuming an initial public offering price of $13.00 per share
and after deducting estimated underwriting discounts and commissions and
estimated offering expenses funded by advances from Sterling City) are estimated
to be approximately $68.1 million (approximately $79.0 million if the
Underwriters' over-allotment options are exercised in full).

Of the $68.1 million net proceeds, the Company estimates that approximately
$40.0 million, subject to adjustment, will be used to pay the cash portion of
the Acquisitions Consideration, all of which will be paid to former stockholders
of the Founding Companies. Approximately $12.8 million of the net proceeds will
be used to fund a portion of the Owner Amounts of certain Founding Companies. In
addition, approximately $14.6 million of the net proceeds will be used to repay
the estimated outstanding indebtedness of the Founding Companies at the closing
of the Offerings, offset by the repayment of approximately $2.0 million of
related party receivables from certain of the Founding Companies. The estimated
outstanding indebtedness to be repaid from the proceeds of the Offerings bears
interest at a weighted average interest rate of approximately 9.3% and matures
at various dates from July 1998 through June 2006.

The approximately $2.7 million of remaining net proceeds ($13.6 million if
the Underwriters' over-allotment options are exercised in full) will be used for
working capital and for general corporate purposes, which are expected to
include future acquisitions. Pending such uses, the Company intends to invest
the net proceeds of the Offerings in short-term, investment-grade,
interest-bearing securities. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Combined Liquidity and Capital
Resources."

The Company is currently negotiating with a group of commercial banks to
provide the Company with a credit facility that may be used to provide working
capital, to finance acquisitions and for general corporate purposes. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Combined Liquidity and Capital Resources."

DIVIDEND POLICY

The Company currently intends to retain its future earnings, if any, to
finance the growth, development and expansion of its business and, accordingly,
does not currently intend to declare or pay any dividends on the Common Stock in
the foreseeable future. The declaration, payment and amount of future dividends,
if any, will be at the discretion of the Company's Board of Directors after
taking into account various factors, including, among others, the Company's
financial condition, results of operations, cash flows from operations, current
and anticipated capital requirements and expansion plans, the income tax laws
then in effect and the requirements of Delaware law. In addition, the terms of
the Company's proposed credit facility may prohibit the payment of dividends by
the Company on the Common Stock. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Combined Liquidity and Capital
Resources."

20
<PAGE>
CAPITALIZATION

The following table sets forth the current maturities of long-term
obligations and the capitalization as of March 31, 1998 of (i) the Company on a
pro forma combined basis after giving effect to the Acquisitions and related
transactions, and (ii) as further adjusted to give effect to the Offerings and
the application of the estimated net proceeds therefrom. See "Use of
Proceeds." This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Combined Liquidity and Capital Resources" and the Unaudited Pro
Forma Financial Statements of the Company and the notes thereto, included
elsewhere in this Prospectus.

PRO FORMA
AS OF MARCH 31, 1998
----------------------------------
COMBINED(A) AS ADJUSTED(B)
------------ ---------------
(IN THOUSANDS)
Current maturities of long-term
obligations........................ $ 63,965(c)(d) $ 108
============ ===============
Long-term obligations, net of current
maturities......................... $ 4,094 $ 595
------------ ---------------
Stockholders' equity:
Preferred Stock: $0.01 par
value, 10,000,000 shares
authorized; no shares issued
and outstanding............... -- --
Common Stock: $0.01 par value,
100,000,000 shares authorized;
8,824,043 shares issued and
outstanding, pro forma
combined; and 14,824,043
shares issued and outstanding,
as adjusted(e)................ 88 148
Restricted Common Stock: $0.01
par value, 5,000,000 shares
authorized; 1,479,523 shares
issued and outstanding........ 15 15
Additional paid-in capital...... 79,931 148,011
Retained deficit(f)............. (1,586) (1,586)
------------ ---------------
Total stockholders'
equity..................... 78,448 146,588
------------ ---------------
Total capitalization....... $ 82,542 $ 147,183
============ ===============

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

(a) Combines the respective accounts of INCOM and the Founding Companies as
reflected in the Unaudited Pro Forma Combined Balance Sheet as of March 31,
1998 prior to the Offerings.

(b) Adjusted to reflect the sale of 6,000,000 shares of Common Stock offered
hereby and the application of the estimated net proceeds therefrom. See
"Use of Proceeds."

(c) Includes $40.0 million of notes payable to owners of the Founding Companies,
representing the cash portion of the Acquisitions Consideration to be paid
from a portion of the net proceeds of the Offerings. The cash portion of the
Acquisitions Consideration will be adjusted based on the initial public
offering price of the Common Stock offered hereby and certain closing
balance sheet amounts.

(d) Includes $18.3 million in notes payable incurred to fund a portion of the
Owner Amounts to certain owners of the Founding Companies to be paid from a
portion of the net proceeds of the Offerings.

(e) Excludes shares related to approximately 1,630,357 stock options which are
expected to be granted upon consummation of the Offerings. Excludes certain
additional shares of Common Stock that may be issued to the stockholders of
two of the Founding Companies if certain earnings thresholds are satisfied
after the consummation of the Offerings. See "Certain Transactions."

(f) Includes a compensation charge of $1.6 million attributable to the issuance
of 150,000 shares of Common Stock to certain members of management of INCOM.

21
<PAGE>
DILUTION

At March 31, 1998, after giving effect to the Acquisitions as if they had
occurred at such date, the deficit in pro forma combined net tangible book value
of the Company would have been $32.1 million, or approximately $3.11 per share.
The deficit in pro forma combined net tangible book value is equal to the
aggregate net tangible book value (tangible assets less total liabilities) of
the Company after giving effect to the Acquisitions. The number of shares used
for the per share calculation includes the 10,303,566 shares outstanding after
the Acquisitions but prior to the Offerings. After giving effect to the
Acquisitions and the sale by the Company of the 6,000,000 shares of Common Stock
offered hereby (assuming an initial public offering price of $13.00 per share
and after deducting underwriting discounts and commissions and estimated
Offerings expenses payable by the Company which have been or will be funded by
advances from Sterling City), the pro forma combined net tangible book value of
the Company would have been $36.1 million, or $2.21 per share. This represents
an immediate increase in pro forma net tangible book value of $5.33 per share to
existing stockholders and an immediate dilution in net tangible book value of
$10.79 per share to new investors purchasing the shares of Common Stock in the
Offerings. The following table illustrates this per share dilution:

Assumed initial public offering price
per share.......................... $ 13.00
Pro forma combined net tangible
book value per share prior to
the Offerings.................. $ (3.11)
Increase in pro forma net
tangible book value per share
attributable to new
investors...................... 5.32
---------
Pro forma combined net tangible book
value per share after
the Offerings...................... 2.21
---------
Dilution in net tangible book value
per share to new investors...... $ 10.79
=========

The following table sets forth on a pro forma basis, after giving effect to
the Acquisitions as of March 31, 1998, the number of shares of Common Stock
purchased from the Company, the total consideration to the Company and the
average price per share paid to the Company by (i) existing stockholders and
owners of the Founding Companies and (ii) the new investors purchasing Common
Stock from the Company in the Offerings at the assumed initial offering price of
$13.00 per share (before deducting underwriting discounts and commissions and
estimated offering expenses):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES PURCHASED
---------------------- TOTAL AVERAGE PRICE
NUMBER PERCENT CONSIDERATION PER SHARE
------------ ------- --------------- --------------
Existing stockholders and owners of
Founding Companies (a)(b).......... 10,303,566 63% $ (32,082,000) $(3.11)
New investors........................ 6,000,000 37 78,000,000 13.00
------------ ------- ---------------
Total........................... 16,303,566 100% $ 45,918,000
============ ======= ===============
</TABLE>

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

(a) See "Certain Transactions" for a discussion of issuance of Restricted
Common Stock and Common Stock to the Chairman of the Board of INCOM, the
owners of the Founding Companies and certain management of INCOM,
respectively.

(b) Total consideration paid by Founding Company owners represents the combined
owners' equity of the Founding Companies before the Offerings and has been
adjusted to reflect: (i) the payment of an estimated $40.0 million in cash
to the owners of the Founding Companies as part of the Acquisitions
Consideration and (ii) the transfer of the Owner Amounts. See "Certain
Transactions."

22
<PAGE>
SELECTED FINANCIAL DATA

INCOM will acquire the Founding Companies simultaneously with and as a
condition to the consummation of the Offerings. For financial statement
presentation purposes, INCOM has been identified as the "accounting acquirer."
INCOM was founded in February 1998 and has conducted no operations to date, and,
accordingly, historical financial data are not presented below for INCOM. See
the historical financial statements of INCOM included elsewhere in this
Prospectus.

The following summary unaudited pro forma combined financial data present
certain data for the Company, as adjusted for (i) the effects of the
Acquisitions, (ii) the effects of certain other pro forma adjustments to the
historical financial statements and (iii) the consummation of the Offerings and
the application of the net proceeds therefrom. The unaudited pro forma combined
income statement data and the pro forma balance sheet data assume that the
Acquisitions, the Offerings and related transactions were closed on January 1,
1997 and on March 31, 1998, respectively, and are not necessarily indicative of
the results that the Company would have obtained had these events actually
occurred at those dates. During the periods presented below, the Founding
Companies were not under common control or management, and, therefore, the data
presented may not be comparable to or indicative of post-combination results to
be achieved by the Company. The unaudited pro forma combined income statement
data are based on preliminary estimates, available information and certain
assumptions that Company management deems appropriate. The unaudited pro forma
combined financial data should be read in conjunction with the other financial
information included elsewhere in this Prospectus. See the Unaudited Pro Forma
Combined Financial Statements and notes thereto, and the historical financial
statements for certain of the Founding Companies and the notes thereto, all
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PRO FORMA
---------------------------------------------------
THREE MONTHS ENDED MARCH 31,
YEAR ENDED ------------------------------
DECEMBER 31, 1997 1997 1998
------------------ -------------- --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
STATEMENTS OF OPERATIONS DATA
(UNAUDITED):
Revenues........................ $ 216,877 $ 38,999 $ 43,782
Cost of services (including
depreciation)................. 166,559 30,420 35,078
------------------ -------------- --------------
Gross profit.................... 50,318 8,579 8,704
Selling, general and
administrative expenses(a).... 31,415 6,057 8,036
Goodwill amortization(b)........ 2,763 691 691
------------------ -------------- --------------
Income (loss) from operations... 16,140 1,831 (23)
Interest and other income,
net........................... 978 92 140
------------------ -------------- --------------
Income before provision for
income taxes.................. 17,118 1,923 117
Provision for income taxes...... 7,952 1,045 323
------------------ -------------- --------------
Net income (loss)............... $ 9,166 $ 878 $ (206)
================== ============== ==============
Net income (loss) per share..... $ 0.57 $ 0.05 $ (0.01)
================== ============== ==============
Shares used in computing pro
forma net income
(loss) per share(c)........... 16,129,104 16,129,104 16,129,104
================== ============== ==============
</TABLE>

(FOOTNOTES ON FOLLOWING PAGE)

23
<PAGE>
- ---------------

(d) Reflects Owner Amounts consisting of $23.5 million in distributions of
nonoperating assets, excess working capital, and the value of various
Founding Companies' S Corporation accumulated adjustment accounts (generally
the amount of an S corporation's undistributed accumulated earnings for
which the stockholders are individually subject to federal income taxation)
that will be transferred in connection with the Acquisitions to the owners
of the Founding Companies. This amount will be funded through the following:
(i) transfers of approximately $1.9 million of nonoperating assets, (ii) the
issuance of approximately $12.8 million of notes payable to certain owners
of the Founding Companies, which will be retired with proceeds from
Offerings and (iii) the payment of $8.8 million for S Corporation
accumulated adjustment account balances (including $5.5 million of notes
payable to be repaid with proceeds from the Offerings). See "Certain
Transactions."

(e) Reflects the closing of the Offerings and the Company's application of the
net proceeds therefrom. See "Use of Proceeds" and "Certain
Transactions."

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following discussion should be read in conjunction with the Founding
Companies' Financial Statements and related notes thereto and "Selected
Financial Data" appearing elsewhere in this Prospectus.

The Company's revenues are derived primarily from reroofing, new roof
construction and installation, and maintenance, repair and refurbishment
services provided to commercial, industrial, governmental and institutional
customers. The Company derived approximately 53% of its 1997 pro forma revenues
from reroofing projects, approximately 37% from new construction projects and
approximately 10% from maintenance, repair and refurbishment services. Revenues
from fixed price construction and reroofing contracts are generally accounted
for on a percentage-of-completion basis. Maintenance, repair and refurbishment
revenues are recognized as the services are performed. Of the Company's 1997 pro
forma revenues, approximately 34% were derived from commercial contracts,
approximately 21% were derived from industrial contracts, approximately 25% were
derived from governmental contracts and approximately 20% were derived from
institutional contracts. 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.

Cost of services consists primarily of salaries and benefits of employees,
subcontracted services, materials, parts and supplies, depreciation, fuel and
other vehicle expenses and equipment rentals. Certain of the Founding Companies
also include salaries of estimators, insurance and other indirect costs in the
cost of services. The Company's gross margin, which is gross profit expressed as
a percentage of revenues, depends on the relative proportions of costs related
to labor and materials. On jobs in which a higher percentage of the cost of
services consists of labor costs, the Company typically achieves higher gross
margins than on jobs where materials represent more of the cost of services.
Selling, general and administrative expenses consist primarily of compensation
and related benefits for owners, management, administrative salaries and
benefits, insurance, advertising, office rent and utilities, communications and
professional fees. In connection with the Acquisitions, certain owners and
certain key employees of the Founding Companies have agreed prospectively to
reductions in their compensation and related benefits that would have totaled
$5.7 million for the year ended December 31, 1997. Such reductions in salaries,
bonuses and benefits have been reflected as a pro forma adjustment in the
Unaudited Pro Forma Combined Statement of Operations and are reflected in the
terms of employment agreements.

The Company believes that it will realize savings from (i) consolidation of
insurance and bonding programs; (ii) reduction in other selling, general and
administrative expenses; (iii) the Company's ability to borrow at lower interest
rates than most, if not all, of the Founding Companies; (iv) consolidation of
operations in certain locations; (v) greater volume discounts from suppliers of
roofing systems, materials, parts and supplies and (vi) lower labor costs
resulting from scheduling efficiencies and reduced down time. Offsetting these
savings will be costs related to the Company's new corporate management, costs
of being a public company and costs of integrating the companies acquired in the
Acquisitions.

The Company has issued or reserved for issuance an aggregate of 1,281,012
shares of Common Stock to its management and certain other individuals and will
record (for financial statement presentation purposes) a nonrecurring, non-cash
compensation charge of $1.6 million relating to the sale of 150,000 shares to
certain members of management during the second and third quarters of 1998. This
nonrecurring compensation charge has been excluded in the Unaudited Pro Forma
Combined Statements of Operations.

As a result of the Acquisitions, $110.5 million, representing the excess of
the consideration paid over the fair value of the net assets to be acquired,
will be recorded as goodwill on the Company's balance sheet.

25
<PAGE>
Goodwill will be amortized as a non-cash charge to the income statement over a
40-year period. The pro forma impact of this amortization expense, which is
non-deductible for tax purposes, is $2.8 million per year.

SUPPLEMENTAL UNAUDITED COMBINED FINANCIAL INFORMATION

The following supplemental unaudited combined financial information for the
periods presented do not purport to present those of the combined Founding
Companies in accordance with generally accepted accounting principles, but
represent merely a summation of the revenues, cost of services (including
depreciation), gross profit, selling, general and administrative expenses and
income from operations of the individual Founding Companies on a historical
basis and excludes the effects of the pro forma adjustments that are included in
the Unaudited Pro Forma Combined Statements appearing elsewhere in this
Prospectus. Selling, general and administrative expenses for periods prior to
the Acquisitions reflect the effects of historical salary and distributions to
the owners of the Founding Companies. The data will not be comparable to, and
may not be indicative of, the Company's post-combination results of operations
because (i) the Founding Companies were not under common control or management
and certain Founding Companies had different tax structures (generally, S
corporations) during the periods presented, (ii) the Company will use the
purchase method to establish a new basis of accounting to record the
Acquisitions, (iii) the Company will incur incremental costs for its corporate
management and the costs of being a public company and (iv) the combined data do
not reflect the potential benefits and cost savings the Company expects to
realize when operating as a combined entity.

The following table sets forth certain supplemental unaudited combined
financial information for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEARS ENDED(A) ENDED MARCH 31,(B)
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 154,922 100% $ 192,131 100% $ 216,877 100% $ 38,999 100%
Cost of services..................... 124,504 80 151,857 79 166,559 77 30,420 78
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 30,418 20 40,274 21 50,318 23 8,579 22
Selling, general and administrative
expenses........................... 26,056 17 31,231 16 37,142 17 6,835 18
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 4,362 3% $ 9,043 5% $ 13,176 6% $ 1,744 4%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,(B)
--------------------
1998
--------------------

Revenues............................. $ 43,782 100%
Cost of services..................... 35,078 80
--------- ---
Gross profit....................... 8,704 20
Selling, general and administrative
expenses........................... 8,695 20
--------- ---
Income from operations............. $ 9 --%
========= ===

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

(a) The fiscal years presented are the years ended December 31, 1995, 1996 and
1997, for all Founding Companies, except for Beta, for which the fiscal
years presented are the years ended September 30, 1995, 1996 and 1997, and
Kelley Brothers, for which the fiscal years presented are September 30,
1995, 1996 and December 31, 1997.

COMBINED RESULTS OF OPERATIONS
COMBINED RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE
THREE MONTHS ENDED
MARCH 31, 1997

Combined revenues increased $4.8 million, or 12%, from $39.0 million for
the three months ended March 31, 1997 to $43.8 million for the three months
ended March 31, 1998, primarily due to increased

26
<PAGE>
revenues at Evans, D.C. Taylor and Nu-Tec, offset in part by decreased revenues
at Brazos. Over these periods, revenues at Evans increased $3.2 million and
revenues at Nu-Tec increased $1.3 million, primarily due to increased market
demand during the mild winter of 1998, and revenues at D.C. Taylor increased
$1.9 million, primarily due to the start-up of operations in Phoenix, Arizona.
Over the same periods, revenues at Brazos decreased $1.9 million, primarily due
to a decrease in backlog for government roofing contracts at the end of 1997.

Combined gross profit increased $0.1 million, or 1%, from $8.6 million for
the three months ended March 31, 1997 to $8.7 million for the three months ended
March 31, 1998. Gross margins decreased to 20% from 22% over these periods,
primarily due to increased costs and expenses on certain contracts at Seyforth
and Brazos, offset partially by increased margins at Nu-Tec and Boone.

Combined selling, general and administrative expenses increased 27% from
$6.8 million to $8.7 million, primarily due to increased marketing costs and a
nonrecurring compensation charge related to a stock bonus to employees at Beta
and the addition of marketing staff and Phoenix office staff at D.C. Taylor. As
a percentage of revenues, selling, general and administrative expenses increased
from 18% in the 1997 period to 20% in the 1998 period.

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

Combined revenues increased $24.8 million, or 13%, from $192.1 million for
the year ended December 31, 1996 to $216.9 million for the year ended December
31, 1997. Revenue increases occurred at most of the Founding Companies over
these periods. Revenues at Beta and Brazos increased $6.3 million and $5.9
million, respectively, primarily due to increased government contracts; revenues
at D.C. Taylor increased $4.7 million, primarily due to revenues from start-up
operations in California and Phoenix, Arizona; and revenues at Nu-Tec increased
$3.1 million, primarily due to increased revenues from its Ohio and Indiana
operations.

Combined gross profit increased $10.0 million, or 25%, from $40.3 million
for the year ended December 31, 1996 to $50.3 million for the year ended
December 31, 1997. Gross margins increased to 23% from 21% over these periods,
primarily due to higher margins at Seyforth, Beta and Burns. Over these periods,
margins increased at Seyforth due to start-up operations in El Paso, Texas and
the closing of lower margin operations in Austin, Texas. Margins at Beta
increased primarily due to larger volumes in maintenance and repair services and
the private, negotiated market. Margins at Burns & Scalo increased due primarily
to higher margin maintenance and reroofing work and improved cost control.

Combined selling, general and administrative expenses increased 19% from
$31.2 million to $37.1 million, primarily due to bonus increases to stockholders
and certain employees at Beta and the addition of the Phoenix, Arizona
facilities and expansion of the marketing department at D.C. Taylor. As a
percentage of revenues, selling, general and administrative expenses increased
from 16% in 1996 to 17% in 1997.

COMBINED RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1995

Combined revenues increased $37.2 million, or 24%, from $154.9 million for
the year ended December 31, 1995 to $192.1 million for the year ended December
31, 1996. Revenue increases occurred at most of the Founding Companies over
these periods. Revenues at Brazos increased $7.8 million, primarily due to the
increase in demand for roofing contracts associated with the relocation of
Brazos from South Dakota to Texas; revenues at Seyforth increased $6.7 million,
primarily due to its expansion into the El Paso, Texas market and the expansion
of operations in Houston, Texas; revenues at D.C. Taylor increased $4.4 million,
primarily due to the inclusion in 1996 of three months of revenues from its
start-up operations in California; revenues at Evans increased $3.6 million,
primarily due to an overall increase in market demand; and revenues at
Chamberlin increased $3.4 million, partially due to its continuing expansion
from waterproofing into roofing projects.

27
<PAGE>
Combined gross profit increased $9.9 million, or 32%, from $30.4 million
for the year ended December 31, 1995 to $40.3 million for the year ended
December 31, 1996. Gross margins increased to 21% from 20% over these periods.

Combined selling, general and administrative expenses increased 20% from
$26.1 million to $31.2 million. Over these periods, selling, general and
administrative expenses increased primarily due to increases of $1.4 million at
Seyforth due to increased personnel and start-up costs in El Paso, Texas. As a
percentage of revenues, selling, general and administrative expenses decreased
from 17% in 1995 to 16% in 1996.

COMBINED LIQUIDITY AND CAPITAL RESOURCES

Upon consummation of the Acquisitions and after applying the estimated net
proceeds of the Offerings as discussed under "Use of Proceeds," the Company
anticipates that it will have approximately $25.7 million of pro forma working
capital, no outstanding indebtedness and capital lease obligations totaling $0.7
million. The Founding Companies' historical indebtedness of $9.0 million is
anticipated to be repaid from the proceeds of the Offerings.

On a combined basis, the Founding Companies generated $10.9 million of cash
from operating activities during 1997. Net cash used in investing activities was
$5.9 million on a combined basis and was primarily used for capital
expenditures. Net cash used in financing activities was $1.1 million on a
combined basis and was primarily used for debt repayment and capital
distributions.

The Company is currently negotiating with a group of banks to obtain a
credit facility to be available upon the closing of the Offerings. The ability
of the Company to secure the credit facility is subject to negotiations with
potential lenders as well as the satisfaction of certain conditions, including
the execution of a letter of intent and appropriate final loan documentation.

The Company anticipates that its cash flow from operations and proceeds
from the Offerings will provide sufficient cash to enable the Company to meet
its working capital needs, debt service requirements and planned capital
expenditures for property and equipment.

The Company intends to continue pursuing attractive acquisition
opportunities. The timing, size or success of any acquisition effort and the
associated potential capital commitments cannot be predicted. The Company
expects to fund future acquisitions primarily with a portion of the net proceeds
of the Offerings, working capital, cash flow from operations and borrowings,
including any unborrowed portion of the proposed credit facility, as well as
issuances of additional equity.

D.C. TAYLOR RESULTS OF OPERATIONS

D.C. Taylor is headquartered in Cedar Rapids, Iowa, and has additional
facilities outside Atlanta, Georgia, outside Oakland, California, and in
Phoenix, Arizona.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN
THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 26,440 100% $ 30,836 100% $ 35,472 100% $ 6,301 100%
Cost of services..................... 22,519 85 25,706 83 29,031 82 5,111 81
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 3,921 15 5,130 17 6,441 18 1,190 19
Selling, general and
administrative expenses............ 4,028 15 4,478 15 5,970 17 1,177 19
--------- --- --------- --- --------- --- --------- ---
Income (loss) from operations...... $ (107) -- % $ 652 2% $ 471 1% $ 13 -- %
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 8,156 100%
Cost of services..................... 6,852 84
--------- ---
Gross profit....................... 1,304 16
Selling, general and
administrative expenses............ 1,619 20
--------- ---
Income (loss) from operations...... $ (315) (4)%
========= ===

28
<PAGE>
D.C. TAYLOR RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE
THREE MONTHS
ENDED MARCH 31, 1997

Revenues increased $1.9 million, or 29%, from $6.3 million for the three
months ended March 31, 1997 to $8.2 million for the three months ended March 31,
1998, primarily due to the start-up of operations in Phoenix, Arizona.

Gross profit increased $0.1 million, or 10%, from $1.2 million for the
three months ended March 31, 1997 to $1.3 million for the three months ended
March 31, 1998. Gross margins decreased to 16% from 19% over these periods due
in part to higher costs on certain contracts in process during the three months
ended March 31, 1998.

Selling, general and administrative expenses increased 38% from $1.2
million to $1.6 million due to the addition of staff at the Phoenix facilities
and an increase in marketing personnel. As a percentage of revenues, selling,
general and administrative expenses increased from 19% in the 1997 period to 20%
in the 1998 period.

D.C. TAYLOR RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1996

Revenues increased $4.7 million, or 15%, from $30.8 million for the year
ended December 31, 1996 to $35.5 million for the year ended December 31, 1997,
primarily due to the inclusion in 1997 of a full year of revenues from start-up
operations in California as compared to only one quarter in 1996, the inclusion
of revenues from start-up operations in Phoenix, Arizona after July 1997 and an
increase in overall pricing.

Gross profit increased $1.3 million, or 26%, from $5.1 million for the year
ended December 31, 1996 to $6.4 million for the year ended December 31, 1997.
Gross margins increased to 18% from 17% over these periods due to the overall
strengthening in pricing.

Selling, general and administrative expenses increased 33% from $4.5
million to $6.0 million due to the addition of start-up operations in Phoenix,
Arizona in July 1997 and an expansion of the marketing staff.

D.C. TAYLOR RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1995

Revenues increased $4.4 million, or 17%, from $26.4 million for the year
ended December 31, 1995 to $30.8 million for the year ended December 31, 1996,
primarily due to the inclusion of three months of revenues from start-up
operations in California.

Gross profit increased $1.2 million, or 31%, from $3.9 million for the year
ended December 31, 1995 to $5.1 million for the year ended December 31, 1996.
Gross margins increased to 17% from 15% over these periods. The gross margin
increase in 1996 when compared to 1995 was attributable to changes in project
management, including integration of the sales and production departments and
implementation of a project budgeting plan. The gross profit increase in 1996
when compared to 1995 was attributable to the increase in gross margin.

Selling, general and administrative expenses increased 11% from $4.0
million to $4.5 million due to a distribution of bonuses and three months of
expenses from start-up operations in California. As a percentage of revenues,
selling, general and administrative expenses decreased slightly.

D.C. TAYLOR LIQUIDITY AND CAPITAL RESOURCES

D.C. Taylor generated $0.4 million of net cash from operating activities
for the three months ended March 31, 1998, and used $0.8 million of net cash in
operating activities for the year ended December 31, 1997. Net cash used in
investing activities was approximately $0.2 million and $1.9 million, primarily
for additions to property and equipment, for the three months ended March 31,
1998 and for the year ended December 31, 1997, respectively. Net cash used in
financing activities was $0.6 million for the three months ended March 31, 1998,
and net cash generated in financing activities was $2.9 million for the year
ended December 31, 1997, primarily for borrowings on the line of credit and
long-term debt. At March 31, 1998, D.C. Taylor had a $2.5 million revolving line
of credit available that expired July 1, 1998. D.C.

29
<PAGE>
Taylor still has borrowings under this line of credit and is in the process of
negotiating terms for a renewal. At March 31, 1998, there were outstanding
borrowings against this line of credit in the amount of $1.0 million. At March
31, 1998, D.C. Taylor had working capital of approximately $1.0 million and
total debt of $2.7 million.

SEYFORTH RESULTS OF OPERATIONS

Seyforth is headquartered in Garland, Texas, and has additional facilities
in Albuquerque, New Mexico, El Paso, Houston, Dallas and Fort Worth, Texas, and
Birmingham, Alabama.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 22,339 100% $ 28,975 100% $ 31,086 100% $ 5,872 100%
Cost of services..................... 17,377 78 22,641 78 22,850 74 4,061 69
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 4,962 22 6,334 22 8,236 26 1,811 31
Selling, general and administrative
expenses........................... 4,738 21 6,086 21 6,864 22 1,542 26
--------- --- --------- --- --------- --- --------- ---
Income (loss) from operations...... $ 224 1% $ 248 1% $ 1,372 4% $ 269 5%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 6,220 100%
Cost of services..................... 4,822 78
--------- ---
Gross profit....................... 1,398 22
Selling, general and administrative
expenses........................... 1,715 27
--------- ---
Income (loss) from operations...... $ (317) (5)%
========= ===

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

Revenues increased $0.3 million, or 6%, from $5.9 million for the three
months ended March 31, 1997 to $6.2 million for the three months ended March 31,
1998, primarily due to Seyforth's reopening of its El Paso, Texas facilities in
June 1997.

Gross profit decreased $0.4 million, or 23%, from $1.8 million for the
three months ended March 31, 1997 to $1.4 million for the three months ended
March 31, 1998. Gross margins decreased to 22% from 31% over these periods,
primarily attributable to higher overhead costs, such as salary of management
personnel and leasing, renting and depreciation of equipment, and lower margins
realized on contracts in Albuquerque, New Mexico, and rainy conditions resulting
in contract delays in Birmingham, Alabama.

Selling, general and administrative expenses increased 11% from $1.5
million to $1.7 million due to expansion and start-up expenses in the El Paso,
Texas operations.

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

Revenues increased $2.1 million, or 7%, from $29.0 million for the year
ended December 31, 1996 to $31.1 million for the year ended December 31, 1997,
primarily due to continued growth in the Houston, Texas market, further
penetration in the Dallas, Texas market, and the reopening of the El Paso, Texas
operations in June 1997.

Gross profit increased $1.9 million, or 30%, from $6.3 million for the year
ended December 31, 1996 to $8.2 million for the year ended December 31, 1997.
Gross margins increased to 26% from 22% over these periods due to start-up
operations in El Paso, Texas and the closing of the Austin, Texas operations
which were operating at lower margins.

Selling, general and administrative expenses increased 13% from $6.1
million to $6.9 million due to the addition of two management personnel and the
closing of the Austin, Texas operations.

30
<PAGE>
SEYFORTH RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1995

Revenues increased $6.7 million, or 30%, from $22.3 million for the year
ended December 31, 1995 to $29.0 million for the year ended December 31, 1996,
primarily due to Seyforth's initial expansion into the El Paso, Texas market,
the change in the management of operations in Houston, Texas, and the opening of
a roof deck division in the Dallas, Texas operations.

Gross profit increased $1.3 million, or 28%, from $5.0 million for the year
ended December 31, 1995 to $6.3 million for the year ended December 31, 1996.
Gross margins decreased slightly over these periods in part because of lower
margins realized by the start-up operations in El Paso, Texas.

Selling, general and administrative expenses increased 28% from $4.7
million to $6.1 million due to expenses associated with increased personnel and
the start-up operations. As a percentage of revenues, selling, general and
administrative expenses remained relatively constant between 1995 and 1996.

SEYFORTH LIQUIDITY AND CAPITAL RESOURCES

Seyforth generated $0.1 million and $0.4 million of net cash from operating
activities for the three months ended March 31, 1998 and the year ended December
31, 1997, respectively. Net cash used in investing activities was approximately
$0.2 million and $0.4 million, respectively, primarily for additions to property
and equipment. Net cash used in financing activities was not material in amount
for the three months ended March 31, 1998. Net cash generated by financing
activities was $0.3 million for the year ended December 31, 1997. At March 31,
1998, Seyforth had a $2.0 million revolving line of credit available that
expired on May 20, 1998 and bore interest at prime plus 1%. At March 31, 1998,
there were outstanding draws against this line of credit in the amount of $1.7
million, which are due and payable within one year. Effective June 4, 1998,
Seyforth renewed and amended its line of credit, which now provides for
borrowings up to $3.0 million, is renewable annually and bears interest at prime
plus 1/2%. At March 31, 1998, Seyforth had working capital of $0.5 million and
total debt of $2.4 million.

NU-TEC RESULTS OF OPERATIONS

Nu-Tec is headquartered in Indianapolis, Indiana, and has additional
facilities in Cincinnati, Ohio, and Tampa, Florida.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 23,288 100% $ 25,534 100% $ 28,589 100% $ 6,093 100%
Cost of services..................... 19,531 84 21,017 82 23,281 81 5,255 86
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 3,757 16 4,517 18 5,308 19 838 14
Selling, general and administrative
expenses........................... 2,548 11 2,995 12 3,475 12 589 10
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 1,209 5% $ 1,522 6% $ 1,833 7% $ 249 4%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 7,381 100%
Cost of services..................... 6,160 84
--------- ---
Gross profit....................... 1,221 16
Selling, general and administrative
expenses........................... 695 9
--------- ---
Income from operations............. $ 526 7%
========= ===

NU-TEC RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998
COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1997

Revenues increased $1.3 million, or 21%, from $6.1 million for the three
months ended March 31, 1997 to $7.4 million for the three months ended March 31,
1998, primarily due to mild winter weather conditions in Nu-Tec's operating
markets and a large backlog of contracts at the beginning of 1998.

Gross profit increased $0.4 million, or 46%, from $0.8 million for the
three months ended March 31, 1997 to $1.2 million for the three months ended
March 31, 1998. Gross margins increased from 14% to 17% primarily due to lower
material costs and to higher margins on maintenance and repair services.

31
<PAGE>
Selling, general and administrative expenses increased 18% from $0.6
million to $0.7 million due to an increase in administrative staff, the addition
of a marketing department and a general salary increase. As a percentage of
revenues, selling, general and administrative expenses decreased from 10% in the
1997 period to 9% in the 1998 period.

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

Revenues increased $3.1 million, or 12%, from $25.5 million for the year
ended December 31, 1996 to $28.6 million for the year ended December 31, 1997,
primarily due to increased contract volume from the Indiana operations due to
the addition of an estimator and increased bidding activity.

Gross profit increased $0.8 million, or 18%, from $4.5 million for the year
ended December 31, 1996 to $5.3 million for the year ended December 31, 1997.
Gross margins increased from 18% to 19% over these periods due to a higher
proportion of revenues and slightly higher margins from maintenance services.

Selling, general and administrative expenses increased 16% from $3.0
million to $3.5 million due to an increase in office staff salaries and office
space. As a percentage of revenues, selling, general and administrative expenses
remained constant.

NU-TEC RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1995

Revenues increased $2.2 million, or 10%, from $23.3 million for the year
ended December 31, 1995 to $25.5 million for the year ended December 31, 1996,
primarily due to increased revenues from the Ohio operations and from
maintenance projects.

Gross profit increased $0.7 million, or 20%, from $3.8 million for the year
ended December 31, 1995 to $4.5 million for the year ended December 31, 1996.
Gross margins increased from 16% to 18% due to the increased volume of
maintenance projects, which generally have higher margins.

Selling, general and administrative expenses increased 18% from $2.5
million to $3.0 million due to an increased profit sharing pension match and
nonrecurring compensation paid to office personnel under an incentive bonus
program. As a percentage of revenues, selling, general and administrative
expenses increased from 11% in 1995 to 12% in 1996.

NU-TEC LIQUIDITY AND CAPITAL RESOURCES

Nu-Tec generated $0.6 million and $1.4 million in net cash from operating
activities for the three months ended March 31, 1998 and the year ended December
31, 1997, respectively. Net cash used in investing activities was approximately
$0.1 million and $0.8 million, primarily for additions of property and equipment
for the three months ended March 31, 1998 and for the year ended December 31,
1997, respectively. Net cash used by financing activities was $0.6 million for
the three months ended March 31, 1998, primarily as a result of distributions to
stockholders and payments on debt, and $0.7 million for the year ended December
31, 1997, primarily as a result of distributions to stockholders. At March 31,
1998, Nu-Tec had a $3.0 million line of credit available which expired July 1,
1998 and bore interest at the bank's prime lending rate plus 1/4%. Effective
July 1, 1998, Nu-Tec renewed its line of credit, which now expires June 30,
1999. At March 31, 1998, there were outstanding draws against this line of
credit in the amount of $0.4 million. At March 31, 1998, Nu-Tec had working
capital of $1.8 million and total debt of $1.4 million.

BETA RESULTS OF OPERATIONS

Beta is headquartered in Capitol Heights, Maryland, and operates in and
around Washington, D.C.

32
<PAGE>
The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
Revenues............................. $ 17,061 100% $ 17,728 100% $ 24,032 100% $ 6,690 100%
Cost of services..................... 12,647 74 12,792 72 15,457 64 4,857 73
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 4,414 26 4,936 28 8,575 36 1,833 27
Selling, general and administrative
expenses........................... 3,207 19 3,074 17 4,988 21 1,253 19
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 1,207 7% $ 1,862 11% $ 3,587 15% $ 580 8%
========= === ========= === ========= === ========= ===
</TABLE>
SIX MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 9,349 100%
Cost of services..................... 6,661 71
--------- ---
Gross profit....................... 2,688 29
Selling, general and administrative
expenses........................... 2,113 23
--------- ---
Income from operations............. $ 575 6%
========= ===

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

Revenues increased $2.6 million, or 40%, from $6.7 million for the six
months ended March 31, 1997 to $9.3 million for the six months ended March 31,
1998, primarily due to $0.9 million in contracts with local government agencies,
$1.2 million from property management customers and $0.5 million from settlement
of a claim with the Department of the Navy.

Gross profit increased $0.9 million, or 47%, from $1.8 million for the six
months ended March 31, 1997 to $2.7 million for the six months ended March 31,
1998. Gross margins increased from 27% to 29% over these periods due to two
large new construction jobs and the settlement of a large claim with the U.S.
Navy.

Selling, general and administrative expenses increased 69% from $1.3
million to $2.1 million due to nonrecurring bonuses paid to S Corporation
stockholders. As a percentage of revenues, selling, general and administrative
expenses increased from 19% in the six months ended March 31, 1997 to 23% for
the six months ended March 31, 1998.

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

Revenues increased $6.3 million, or 36%, from $17.7 million for the year
ended September 30, 1996 to $24.0 million for the year ended September 30, 1997,
primarily due to increased contract work for local government agencies and
reroofing contracts for the District of Columbia School System.

Gross profit increased $3.7 million, or 74%, from $4.9 million for the year
ended September 30, 1996 to $8.6 million for the year ended September 30, 1997.
Gross margins increased to 36% from 28% over these periods, primarily due to
larger volume in maintenance and repair services and in the private, negotiated
market and a large reroofing contract with Washington D.C. school system
performed on an emergency basis.

Selling, general and administrative expenses increased 62% from $3.1
million to $5.0 million due to bonus increases to stockholders and certain
employees, $1.0 million of which will be nonrecurring after the Acquisitions. As
a percentage of revenues, selling, general and administrative expenses increased
from 17% in 1996 to 21% in 1997.

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

Revenues increased $0.6 million, or 4%, from $17.1 million for the year
ended September 30, 1995 to $17.7 million for the year ended September 30, 1996,
primarily due to growth of the roofing services market in the District of
Columbia area.

Gross profit increased $0.5 million, or 12%, from $4.4 million for the year
ended September 30, 1995 to $4.9 million for the year ended September 30, 1996.
Gross margins increased from 26% to 28% over these periods, primarily due to an
increase in private, negotiated work.

33
<PAGE>
Selling, general and administrative expenses decreased 4% from $3.2 million
to $3.1 million due to the resolution of outstanding litigation which resulted
in a $0.2 million decrease in legal costs in 1996. As a percentage of revenues,
selling, general and administrative expenses decreased from 19% in 1995 to 17%
in 1996.

BETA LIQUIDITY AND CAPITAL RESOURCES

Beta generated $0.4 million and $4.0 million of net cash from operating
activities for the six months ended March 31, 1998 and for the year ended
September 30, 1997, respectively. Net cash used by investing activities was $0.1
million and $0.8 million for capital expenditures for the six months ended March
31, 1998 and for the year ended September 30, 1997, respectively. Net cash used
in financing activities was $2.0 million for the six months ended March 31,
1998, primarily for distributions to stockholders, offset in part by borrowings
of long-term debt and $1.1 million for the year ended September 30, 1997,
primarily for distributions to stockholders. At March 31, 1998, Beta had a $1.8
million line of credit with a bank, of which none was outstanding at March 31,
1998. The line of credit expires February 28, 1999 and bears interest at the
bank's stated prime lending rate. At March 31, 1998, Beta had working capital of
$6.6 million and total debt of $0.3 million.

EVANS RESULTS OF OPERATIONS

Evans is headquartered in Elmira, New York, and has additional facilities
in Endicott, New York, and Raleigh, North Carolina.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
Revenues............................. $ 12,281 100% $ 15,875 100% $ 17,832 100% $ 1,783 100%
Cost of services..................... 9,822 80 12,534 79 13,672 77 1,351 76
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 2,459 20 3,341 21 4,160 23 432 24
Selling, general and
administrative expenses............ 2,329 19 2,597 16 3,518 20 709 40
--------- --- --------- --- --------- --- --------- ---
Income (loss) from operations...... $ 130 1% $ 744 5% $ 642 3% $ (277) (16)%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 5,023 100%
Cost of services..................... 3,979 79
--------- ---
Gross profit....................... 1,044 21
Selling, general and
administrative expenses............ 894 18
--------- ---
Income (loss) from operations...... $ 150 3%
========= ===

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

Revenues increased $3.2 million, or 182 %, from $1.8 million for the three
months ended March 31, 1997 to $5.0 million for the three months ended March 31,
1998, primarily due to a large backlog at the beginning of 1998, a higher level
of operations during the mild winter and increased operations in North Carolina.

Gross profit increased $0.6 million, or 142%, from $0.4 million for the
three months ended March 31, 1997 to $1.0 million for the three months ended
March 31, 1998. Gross margins decreased to 21% from 24% over these periods
primarily due to lower margins at the start-up facilities in Raleigh, North
Carolina.

Selling, general and administrative expenses increased 26% from $0.7
million to $0.9 million due to increased operations at Evans' start-up
facilities in Raleigh, North Carolina, and Endicott, New York. As a percentage
of revenues, selling, general and administrative expenses decreased from 40% for
the first three months of 1997 to 18% for the first three months of 1998.

34
<PAGE>
EVANS RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1996

Revenues increased $2.0 million, or 12%, from $15.9 million for the year
ended December 31, 1996 to $17.8 million for the year ended December 31, 1997,
primarily as a result of start-up facilities in Raleigh, North Carolina, and
Binghampton, New York.

Gross profit increased $0.8 million, or 25%, from $3.3 million for the year
ended December 31, 1996 to $4.2 million for the year ended December 31, 1997.
Gross margins increased to 23% from 21% over these periods due to the strong
economic conditions in 1997 resulting in higher margins.

Selling, general and administrative expenses increased 35% from $2.6
million to $3.5 million due to the payout of incentive bonuses, $0.4 million of
which will be nonrecurring after the acquisitions, and the addition of staff to
support new growth in the start-up operations. As a percentage of revenues,
selling, general and administrative expenses increased from 16% in 1996 to 20%
in 1997.

EVANS RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1995

Revenues increased $3.6 million, or 29%, from $12.3 million for the year
ended December 31, 1995 to $15.9 million for the year ended December 31, 1996,
primarily due to a general increase in the number of contracts due to increased
capacity and marketing.

Gross profit increased $0.9 million, or 36%, from $2.5 million for the year
ended December 31, 1995 to $3.3 million for the year ended December 31, 1996.
Gross margins increased to 21% from 20% over these periods due to the increased
capacity.

Selling, general and administrative expenses increased 12% from $2.3
million to $2.6 million due to increased overhead associated with the increased
revenues and the increase in marketing personnel. As a percentage of revenues,
selling, general and administrative expenses decreased from 19% in 1995 to 16%
in 1996.

EVANS LIQUIDITY AND CAPITAL RESOURCES

Evans used $1.0 million and generated $0.7 million of net cash in operating
activities for the three months ended March 31, 1998 and for the year ended
December 31, 1997, respectively. Net cash used in investing activities was
approximately $0.1 million and $0.5 million for the three months ended March 31,
1998 and for the year ended December 31, 1997, respectively, primarily for
additions of property and equipment. Net cash generated in financing activities
was not material in amount for the three months ended March 31, 1998. Net cash
of $0.2 million was used in financing activities for the year ended December 31,
1997, primarily from the issuance of notes receivable. At March 31, 1998, Evans
had revolving lines of credit totaling $0.8 million, $0.5 million and $0.1
million, which expired on April 30, 1998. Effective April 24, 1998, Evans
renewed and amended its revolving lines of credit which total $3.1 million and
which expire on April 30, 1999, and bear interest at the prime rate. At March
31, 1998, there were no outstanding draws against these lines of credit. At
March 31, 1998, Evans had working capital of approximately $2.2 million and had
no outstanding debt.

BRAZOS RESULTS OF OPERATIONS

Brazos is headquartered in Waco, Texas, has additional facilities in South
Dakota and performs roofing services nationwide.

35
<PAGE>
The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
Revenues............................. $ 3,307 100% $ 11,082 100% $ 17,035 100% $ 3,345 100%
Cost of services..................... 3,154 95 8,779 79 14,279 84 2,702 81
--------- --- --------- --- --------- --- --------- ---
Gross profit (loss)................ 153 5 2,303 21 2,756 16 643 19
Selling, general and
administrative expenses 288 9 654 6 1,075 6 185 6
--------- --- --------- --- --------- --- --------- ---
Income (loss) from operations...... $ (135) (4)% $ 1,649 15% $ 1,681 10% $ 458 13%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 1,406 100%
Cost of services..................... 1,408 100
--------- ---
Gross profit (loss)................ (2) --
Selling, general and
administrative expenses 237 17
--------- ---
Income (loss) from operations...... $ (239) (17)%
========= ===

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

Revenues decreased $1.9 million, or 58%, from $3.3 million for the three
months ended March 31, 1997 to $1.4 million for the three months ended March 31,
1998, primarily due to a decrease in the backlog of government contracts at the
end of 1997.

Gross profit decreased $0.6 million, or 100%, from $0.6 million for the
three months ended March 31, 1997 to a slight loss for the three months ended
March 31, 1998. Gross margins decreased to 0% from 19% over these periods,
primarily due to unforeseen expenses on certain contracts resulting from events
which occurred subsequent to December 31, 1997.

Selling, general and administrative expenses increased slightly due
primarily to legal fees pertaining to a related company, the acquisition of an
airplane in March of 1998 and bid preparation during the 1998 period. As a
percentage of revenues, selling, general and administrative expenses increased
from 6% for the three months ended March 31, 1997 to 17% for the three months
ended March 31, 1998.

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

Revenues increased $5.9 million, or 54%, from $11.1 million for the year
ended December 31, 1996 to $17.0 million for the year ended December 31, 1997,
primarily due to an increase in government roofing contracts and increased work
on contracts in process.

Gross profit increased $0.5 million, or 20%, from $2.3 million for the year
ended December 31, 1996 to $2.8 million for the year ended December 31, 1997.
Gross margins decreased to 16% from 21% over these periods, primarily due to the
decreased profitability of contracts.

Selling, general and administrative expenses increased 64% from $0.7
million to $1.1 million, primarily due to the increased volume of contracts and
an increase in administrative salaries and airplane and travel expenses. As a
percentage of revenues, selling, general and administrative expenses increased
slightly in 1997.

BRAZOS RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1995

Revenues increased $7.8 million, or 235%, from $3.3 million for the year
ended December 31, 1995 to $11.1 million for the year ended December 31, 1996,
primarily due to the increase in demand for roofing contracts associated with
the relocation of Brazos from South Dakota to Texas.

Gross profit increased $2.1 million, or 1,405%, from $0.2 million for the
year ended December 31, 1995 to $2.3 million for the year ended December 31,
1996. Gross margins increased to 21% from 5% over these periods, primarily due
to decreased costs associated with the relocation of the administrative
functions to Texas from South Dakota and the transfer of certain Texas
operations to Brazos.

36
<PAGE>
Selling, general and administrative expenses increased 127% from $0.3
million to $0.7 million due to expenses associated with the relocation of Brazos
to Texas. As a percentage of revenues, selling, general and administrative
expenses decreased from 9% in 1995 to 6% in 1996.

BRAZOS LIQUIDITY AND CAPITAL RESOURCES

Brazos used $0.1 million in operating activities for the three months ended
March 31, 1998, and generated $2.3 million in operating activities for the year
ended December 31, 1997. Net cash used in investing activities was approximately
$0.3 million and $0.7 million for the three months ended March 31, 1998 and for
the year ended December 31, 1997, respectively. Net cash provided by financing
activities was $0.1 million resulted for the three months ended March 31, 1998,
and net cash used in financing activities was $1.2 million for the year ended
December 31, 1997. At March 31, 1998, Brazos had a $0.5 million revolving line
of credit. The line of credit expires September 15, 1998 and bears interest at
the bank's index rate. At March 31, 1998, there were outstanding draws against
this line of credit in the amount of $0.2 million. At March 31, 1998, Brazos had
working capital of $1.0 million and total debt of $1.0 million.

CHAMBERLIN RESULTS OF OPERATIONS

Chamberlin has facilities in Houston, Dallas and Austin, Texas.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
------------------------------------------ ------------------------------------------
1996 1997 1997 1998
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
Revenues............................. $ 13,196 100% $ 12,296 100% $ 2,337 100% $ 2,232 100%
Cost of services..................... 10,244 78 9,792 80 1,711 73 1,583 71
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 2,952 22 2,504 20 626 27 649 29
Selling, general and administrative
expenses........................... 2,671 20 1,655 13 466 20 384 17
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 281 2% $ 849 7% $ 160 7% $ 265 12%
========= === ========= === ========= === ========= ===
</TABLE>

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

Revenues decreased $0.1 million, or 4%, from $2.3 million for the three
months ended March 31, 1997 to $2.2 million for the three months ended March 31,
1998, primarily due to dry weather and a resulting decrease in repair and
reroofing work in the 1998 period.

Gross profit remained relatively constant at $0.6 million for the 1997 and
1998 periods. Gross margins increased to 29% from 27% over these periods,
primarily due to favorable variances on labor costs resulting from accelerated
completion of contracts during the dry weather in the 1998 period.

Selling, general and administrative expenses decreased 18% from $0.5
million to $0.4 million due primarily to a reduction in nonrecurring salary
expense. As a percentage of revenues, selling, general and administrative
expenses decreased from 20% for the three months ended March 31, 1997 to 17% for
the three months ended March 31, 1998.

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

Revenues decreased $0.9 million, or 7%, from $13.2 million for the year
ended December 31, 1996 to $12.3 million for the year ended December 31, 1997,
primarily due to the completion of a large out-of-state contract in 1996 that
did not carry forward and was not replaced by other contract work in 1997.

Gross profit decreased $0.5 million, or 15%, from $3.0 million for the year
ended December 31, 1996 to $2.5 million for the year ended December 31, 1997.
Gross margins decreased to 20% from 22% over

37
<PAGE>
these periods, due in part to increased overtime labor costs resulting from the
performance of certain contracts in 1997 that had overlapping work schedules.

Selling, general and administrative expenses decreased 38% from $2.7
million to $1.7 million due to the higher bonus payments made in 1996 of $1.0
million, which will be nonrecurring after the Acquisitions. As a percentage of
revenues, selling, general and administrative expenses decreased from 20% in
1996 to 13% in 1997.

CHAMBERLIN CAPITAL RESOURCES AND LIQUIDITY

Chamberlin generated $0.1 million and $0.7 million of net cash from
operating activities for the three months ended March 31, 1998 and for the year
ended December 31, 1997, respectively. Net cash used in investing activities was
approximately $0.1 million and $0.3 million, respectively, primarily from
additions of property and equipment. Net cash generated in financing activities
was not material in amount for the three months ended March 31, 1998 and was
$0.3 million for the year ended December 31, 1997. At March 31, 1998, Chamberlin
had a $0.2 million revolving line of credit available that expires on July 31,
1998 and bears interest at the prime lending rate plus 1%. Effective June 15,
1998, Chamberlin renewed its line of credit, which now expires on September 30,
1998. At March 31, 1998, there were no outstanding draws against this line of
credit. At March 31, 1998, Chamberlin had working capital of $2.1 million and
total debt of $0.4 million.

BURNS & SCALO RESULTS OF OPERATIONS

Burns & Scalo is headquartered in Pittsburgh, Pennsylvania.

The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
---------------------------------------------------------------- --------------------
1995 1996 1997 1997
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)
(UNAUDITED)
Revenues............................. $ 11,275 100% $ 14,012 100% $ 11,613 100% $ 2,366 100%
Cost of services..................... 8,207 73 9,996 71 7,100 61 1,585 67
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 3,068 27 4,016 29 4,513 39 781 33
Selling, general and administrative
expenses........................... 2,798 25 3,480 25 3,764 32 663 28
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 270 2% $ 536 4% $ 749 7% $ 118 5%
========= === ========= === ========= === ========= ===
</TABLE>
THREE MONTHS
ENDED MARCH 31,
--------------------
1998
--------------------

Revenues............................. $ 2,119 100%
Cost of services..................... 1,488 70
--------- ---
Gross profit....................... 631 30
Selling, general and administrative
expenses........................... 626 30
--------- ---
Income from operations............. $ 5 -- %
========= ===

BURNS & SCALO RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 1997

Revenues decreased $0.3 million, or 10%, from $2.4 million for the three
months ended March 31, 1997 to $2.1 million for the three months ended March 31,
1998, primarily due to two consecutive mild winters, which reduced contract
backlog in the 1998 period.

Gross profit decreased $0.2 million, or 19%, from $0.8 million for the
three months ended March 31, 1997 to $0.6 million for the three months ended
March 31, 1998. Gross margins decreased to 30% from 33% over such periods,
primarily as a result of a decrease in contract prices for winter reroofing
contracts and a decrease in repair and other services that have higher gross
margins.

Selling, general and administrative expenses decreased 6% from $0.7 million
to $0.6 million due to the decrease in contract volume. As a percentage of
revenues, selling, general and administrative expenses increased to 30% in 1998
from 28% in 1997.

38
<PAGE>
BURNS & SCALO RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE
YEAR ENDED DECEMBER 31, 1996

Revenues decreased $2.4 million, or 17%, from $14.0 million for the year
ended December 31, 1996 to $11.6 million for the year ended December 31, 1997,
primarily due to a decrease in sheet metal roofing contracts and a four-week
work stoppage preceding the scheduled renewal of the three-year contract
covering certain union workers during the summer of 1997, and mild winter
weather conditions during 1997.

Gross profit increased $0.5 million, or 12%, from $4.0 million for the year
ended December 31, 1996 to $4.5 million for the year ended December 31, 1997.
Gross margins increased to 39% from 29% over these periods partly as a result of
a higher proportion of maintenance and reroofing work at higher margins and
improved control of costs, a continued reduction in worker's compensation costs
and a new incentive compensation program for key employees.

Selling, general and administrative expenses increased 8% from $3.5 million
to $3.8 million, primarily due to the expensing of deferred compensation related
to the disposition of the ownership interests of one of the founders of Burns &
Scalo, the addition of a 401(k) Plan, increased capital expenditures for
vehicles and equipment and costs related to providing additional support
services. As a percentage of revenues, selling, general and administrative
expenses increased from 25% in 1996 to 32% in 1997.

BURNS & SCALO RESULTS FOR THE YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE
YEAR ENDED DECEMBER 31, 1995

Revenues increased $2.7 million, or 24%, from $11.3 million for the year
ended December 31, 1995 to $14.0 million for the year ended December 31, 1996,
primarily due to additional work resulting from storm damage during the severe
winter of 1996, increased revenues from sheet metal roofing and the introduction
of maintenance services.

Gross profit increased $0.9 million, or 31%, from $3.1 million for the year
ended December 31, 1995 to $4.0 million for the year ended December 31, 1996.
Gross margins increased to 29% from 27% over these periods partly as a result of
higher margins for storm damage repair and the continued decrease in workmen's
compensation rates. The gross profit increase in 1996 when compared to 1995 was
attributable to the increased revenues.

Selling, general and administrative expenses increased 24% from $2.8
million to $3.5 million due to the increased revenues. As a percentage of
revenues, selling, general and administrative expenses remained relatively
constant.

BURNS & SCALO LIQUIDITY AND CAPITAL RESOURCES

Burns & Scalo used $0.1 million of net cash in operating activities for the
three months ended March 31, 1998. Net cash generated in operating activities
was $1.4 million for the year ended December 31, 1997. Net cash used in
investing activities was approximately $0.2 million and $0.3 million for the
three months ended March 31, 1998 and for the year ended December 31, 1997,
respectively, primarily for additions to property and equipment. Net cash used
in financing activities was $0.2 million and $0.8 million, respectively. At
March 31, 1998, Burns & Scalo had lines of credit totaling $1.0 million, $0.3
million and $0.5 million, which will expire on June 29, 1998, March 30, 1999 and
April 2003, respectively. The $1.0 million line of credit bears interest at the
prime rate and has been renewed through June 29, 1999. The $0.3 and $0.5 million
lines of credit bear interest at the prime rate and 8.5%, respectively. At March
31, 1998, there were no outstanding draws against these lines of credit. At
March 31, 1998, Burns & Scalo had working capital of $1.0 million and total debt
of $0.7 million.

39
<PAGE>
BOONE RESULTS OF OPERATIONS

Boone is headquartered in Omaha, Nebraska, and has additional facilities in
Kansas City, Kansas.

(UNAUDITED)
Revenues............................. $ 9,820 100% $ 10,657 100% $ 1,660 100% $ 1,706 100%
Cost of services..................... 7,833 80 8,059 76 1,376 83 1,544 91
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 1,987 20 2,598 24 284 17 162 9
Selling, general and administrative
expenses........................... 1,656 17 2,000 19 298 18 315 18
--------- --- --------- --- --------- --- --------- ---
Income (loss) from operations...... $ 331 3% $ 598 5% $ (14) (1)% $ (153) (9)%
========= === ========= === ========= === ========= ===
</TABLE>

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

Revenues remained the same at $1.7 million in the three months ended March
31, 1998 as in the three months ended March 31, 1997, primarily reflecting an
increase in contract backlog at the beginning of 1998, offset by high levels of
precipitation that caused delays in performing contracts in Boone's areas of
operations.

Gross profit decreased $0.1 million, or 43%, from $0.3 million for the
three months ended March 31, 1997 to $0.2 million for the three months ended
March 31, 1998. Gross margins decreased to 9% from 17% over these periods due in
part to high precipitation resulting in increased overtime labor cost.

Selling, general and administrative expenses remained the same at $0.3
million for the three-month periods.

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

Revenues increased $0.9 million, or 9%, from $9.8 million for the year
ended December 31, 1996 to $10.7 million for the year ended December 31, 1997,
primarily due to a large contract with a general contractor for a beef
processing facility that was partially completed in 1997, a multi-store new
roofing contract with a large grocery chain beginning in 1997 and increased
operations in Kansas City, Kansas.

Gross profit increased $0.6 million, or 31%, from $2.0 million for the year
ended December 31, 1996 to $2.6 million for the year ended December 31, 1997.
Gross margins increased to 24% from 20% over these periods due to an increase in
new construction contract prices received on a number of large contracts in
1997, including a grocery chain in Kansas and a beef-packing facility in Iowa.

Selling, general and administrative expenses increased 21% from $1.7
million to $2.0 million due to an increase in bonuses awarded to top management
on December 31, 1997, $0.4 million of which will be nonrecurring after the
Acquisitions. As a percentage of revenues, selling, general and administrative
expenses increased from 17% in 1996 to 19% in 1997.

BOONE LIQUIDITY AND CAPITAL RESOURCES

Boone used $0.6 million of net cash in operating activities for the three
months ended March 31, 1998 and generated $0.4 million for the year ended
December 31, 1997. Net cash used in investing activities was not material for
the three months ended March 31, 1998 and was approximately $0.1 million for the
year ended December 31, 1997. Net cash used in financing activities was not
material in amount. At March 31, 1998, Boone had a $0.6 million revolving line
of credit available that expired on July 15, 1998 and bore interest at the prime
rate plus 2%. Boone is in the process of negotiating terms for the renewal of
this line of credit. At March 31, 1998, there were no outstanding draws against
this line of credit. At March 31, 1998, Boone had working capital of $1.3
million and total debt of $0.2 million.

SUTTER RESULTS OF OPERATIONS

Sutter is headquartered in Sarasota and Fort Myers, Florida.

40
<PAGE>
The following table sets forth selected statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THREE MONTHS
FISCAL YEARS ENDED ENDED MARCH 31,
------------------------------------------ ------------------------------------------
1996 1997 1997 1998
-------------------- -------------------- -------------------- --------------------
(IN THOUSANDS)

(UNAUDITED) (UNAUDITED)
Revenues............................. $ 7,707 100% $ 8,756 100% $ 2,268 100% $ 2,447 100%
Cost of services..................... 5,675 74 6,777 77 1,733 76 1,870 76
--------- --- --------- --- --------- --- --------- ---
Gross profit....................... 2,032 26 1,979 23 535 24 577 24
Selling, general and administrative
expenses........................... 1,463 19 1,624 19 335 15 408 17
--------- --- --------- --- --------- --- --------- ---
Income from operations............. $ 569 7% $ 355 4% $ 200 9% $ 169 7%
========= === ========= === ========= === ========= ===
</TABLE>

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

Revenues increased $0.1 million, or 8%, from $2.3 million for the three
months ended March 31, 1997 to $2.4 million for the three months ended March 31,
1998, primarily due to growth experienced by Sutter caused by increased
marketing of new contracts and an increase in revenues from roofing repair
services. During the 1998 period, Sutter hired a project manager which allowed
management to focus on contract sales.

Gross profit increased $0.1 million, or 8%, from $0.5 million for the three
months ended March 31, 1997 to $0.6 million for the three months ended March 31,
1998. Gross margin remained relatively constant at 24% over these periods.

Selling, general and administrative expenses increased 22% from $0.3
million to $0.4 million, primarily due to the opening of the Fort Myers office
in the second quarter of 1997 and the hiring of an office employee for the Fort
Myers, Florida, operations and a safety consultant in the first quarter of 1998.
As a percentage of revenues, selling, general and administrative expenses
increased from 15% in the 1997 period to 17% in the 1998 period.

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

Revenues increased $1.1 million, or 14%, from $7.7 million for the year
ended December 31, 1996 to $8.8 million for the year ended December 31, 1997,
primarily due to growth experienced by the Company caused by the active
solicitation of new contracts, the addition of an estimator to handle new
contract work and an increase in revenues from roofing repair services.

Gross profit decreased slightly for the year ended December 31, 1996 to the
year ended December 31, 1997. Gross margin decreased to 23% from 26% over these
periods, primarily due to lower gross margins on the start-up contracts in Fort
Myers, Florida.

Selling, general and administrative expenses increased 21% from $1.5
million to $1.6 million due to the opening of the Fort Myers office in the
second quarter of 1997 and the hiring of additional field personnel and one
office employee for the Fort Myers, Florida operations. As a percentage of
revenues, selling, general and administrative expenses remained relatively
constant at 19% for 1996 and 1997.

SUTTER LIQUIDITY AND CAPITAL RESOURCES

Sutter used $0.1 million of net cash in operating activities for the three
months ended March 31, 1998 and generated $0.2 million for the year ended
December 31, 1997. Net cash used in investing activities was not material and
$0.2 million, respectively. Net cash provided in financing activities was $0.1
million for the three months ended March 31, 1998 and net cash used in financing
activities was $0.3 million for the year ended December 31, 1997. At March 31,
1998, Sutter had a $0.5 million revolving line of credit available that expires
on March 12, 1999 and bears interest at the prime rate plus 0.5%. At March 31,
1998, there were no outstanding draws against this line of credit. At March 31,
1998, Sutter had working capital of $1.0 million and total debt of $0.4 million.

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<PAGE>
M.J. DALSIN RESULTS OF OPERATIONS

M.J. Dalsin is headquartered in West Fargo, North Dakota, and Sioux Falls,
South Dakota.

(UNAUDITED) (UNAUDITED)
Revenues............................. $ 5,424 100% $ 5,738 100% $ 1,044 100% $ 1,518 100%
Cost of services..................... 3,791 70 4,153 72 777 74 1,132 75
--------- --- --------- --- --------- --- --------- ---
Gross profit.................... 1,633 30 1,585 28 267 26 386 25
Selling, general and administrative
expenses........................... 1,184 22 1,034 18 214 21 217 14
--------- --- --------- --- --------- --- --------- ---
Income from operations.......... $ 449 8% $ 551 10% $ 53 5% $ 169 11%
========= === ========= === ========= === ========= ===
</TABLE>

M.J. DALSIN RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE
THREE MONTHS
ENDED MARCH 31, 1997

Revenues increased $0.5 million, or 45%, from $1.0 million in the three
months ended March 31, 1997 to $1.5 million for the three months ended March 31,
1998, due to a higher level of operations during the mild winter of 1998 and
flooding in North Dakota during the first quarter of 1997 that delayed or
impaired crews from working.

Gross profit increased $0.1 million, or 45%, from $0.3 million for the
three months ended March 31, 1997 to $0.4 million for the three months ended
March 31, 1998. Gross margins decreased from 26% in the 1997 period to 25% in
the 1998 period.

Selling, general and administrative expenses increased slightly during the
1998 period. As a percentage of revenues, selling, general and administrative
expenses decreased from 21% in the 1997 period to 14% in the 1998 period.

M.J. DALSIN RESULTS FOR THE YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR
ENDED
DECEMBER 31, 1996

Revenues increased $0.3 million, or 6%, from $5.4 million for the year
ended December 31, 1996 to $5.7 million for the year ended December 31, 1997,
primarily due to a larger number of contracts awarded or negotiated in North
Dakota.

Gross profit remained relatively constant at $1.6 million for the years
ended December 31, 1996 and 1997. Gross margins decreased to 28% from 30% over
these periods, primarily due to an increase in lower margin new roofing
construction contracts in 1997.

Selling, general and administrative expenses decreased $0.2 million, or
13%, from $1.2 million for the year ended December 31, 1996 to $1.0 million for
the year ended December 31, 1997, due to improved cost controls and the
retirement of a senior estimator in South Dakota in 1997. As a percentage of
revenues, selling, general and administrative expenses decreased from 22% in
1996 to 18% in 1997.

M.J. DALSIN LIQUIDITY AND CAPITAL RESOURCES

M.J. Dalsin generated $0.1 million and $0.4 million of net cash from
operating activities for the three months ended March 31, 1998 and for the year
ended December 31, 1997, respectively. Net cash used in investing activities was
not material and $0.4 million, respectively. Net cash used in financing
activities was $0.1 million and $0.5 million, respectively. At March 31, 1998,
M.J. Dalsin had a $0.4 million revolving line of credit available that expires
on August 1, 1998. At March 31, 1998, there were no outstanding draws against
this line of credit. At March 31, 1998, M.J. Dalsin had working capital of $1.1
million and total debt of $0.2 million.

YEAR 2000 ISSUE

42
<PAGE>
currently year 2000 compliant. The Company has plans to prepare its computer
systems and related software to accommodate sensitive information relating to
the year 2000. The Company expects that any additional costs related to ensuring
such systems and software to be ready for the year 2000 will not be material to
the financial condition or results of operations of the Company. There can be no
assurance that no year 2000 related computer operating problems or expenses will
arise with the computer systems and software of the Company, the individual
Founding Companies or the Company's vendors and customers.

INFLATION

Inflation has not had any significant impact on the results of operations
for any of the Founding Companies during the periods presented herein.

43
<PAGE>
BUSINESS

The Company has experienced significant growth, with combined revenues
increasing from $154.9 million in fiscal year 1995 to $216.9 million in fiscal
year 1997, representing an approximate 18% compound annual growth rate.
According to the 1998 United States Department of Commerce statistics for
nonresidential construction, total construction expenditures increased at a 6%
compound annual growth rate over the same period. The Company intends to promote
continued internal growth by leveraging its nationwide presence to obtain
multi-location customers, enhancing its sales and marketing programs, cross-
selling specialized services among the Founding Companies, implementing
operating efficiencies and taking advantage of economies of scale made possible
through the Company's increased size and scope. The Company also intends to
increase its nationwide presence and expand within existing markets through an
aggressive acquisition program focused on consolidating the highly fragmented
roofing industry.

INDUSTRY OVERVIEW

The Company believes that significant business and acquisition
opportunities are available to a larger, well capitalized roofing company that
provides a full range of high-quality roofing services on a national basis
utilizing trained, customer-oriented roofing personnel. The roofing industry is
a large, highly fragmented industry primarily comprised of numerous small,
privately owned companies that generally have limited access to capital.
Prolonged economic expansion and new construction activity in the United States
have increased the number of buildings that will require maintenance, repair,
refurbishment and reroofing services and will generate recurring revenues for
roofing contractors. Furthermore, the ownership and management of commercial and
industrial properties across the United States has become increasingly
concentrated as a result of the activities of REITs and large property
management companies.

According to NRCA data, total expenditures for roofing contracting services
in the United States in 1997 were approximately $20.0 billion, of which
approximately $14.5 billion, or 73%, were for commercial roofing contracting
services (generally including all nonresidential roofing services). The NRCA
estimates that approximately 73% of roofing expenditures in 1997 were
attributable to reroofing (including maintenance, repair and refurbishment) and
27% were attributable to new roof construction. The roofing industry is highly
fragmented and is estimated to include more than 35,000 companies, which are
generally small, owner-operated, independent contractors serving customers in a
local market, with limited access to capital for investment in infrastructure,
technology and expansion. The NRCA estimates that less than 4% of all

44
<PAGE>
industry participants have annual sales greater than $12 million. The Company
believes that no single company accounted for more than 1% of total expenditures
for roofing services in the United States.

The need for roofing services extends throughout the roof system's life
cycle and offers opportunities for experienced roofing contractors to build
ongoing customer relationships. The average useful life of a commercial roof
system is estimated to range between 10 and 20 years, depending upon a number of
factors, including type of roof system, quality of installation, quality and
frequency of maintenance, roof traffic, building movement, exposure to chemicals
and corrosive materials, climatic conditions and storm damage. Roofing systems
can represent a significant portion of the capital investment in new building
construction, and high-quality installation, maintenance, repair and
refurbishment services preserve the value of the investment and prevent property
damage and business disruption. Roofing contractors compete on the basis of
customer relationships and bidding opportunities, reputation (including safety
record), size and skill level of workforce, consistency of repair and
maintenance services, geographical scope and state licensing, ability to
mobilize work crews to distant work sites, bonding capacity, insurance coverage
(including workers' compensation and liability insurance), relationships with
manufacturers, and certification by manufacturers of roofing materials that
enable a roofing contractor to deliver a manufacturer's warranty that covers
workmanship as well as materials.

Customers for nonresidential roofing services represent a wide range of
businesses, government agencies and not-for-profit institutions, which include
(i) commercial customers that own or manage retail, office, retail or wholesale
warehousing, restaurant, theater, hotel, parking and other consumer and
business-oriented facilities, (ii) industrial customers that own or manage food
processing, manufacturing, refining, assembly, storage and similar facilities,
(iii) city, state and federal government agencies and other public sector
customers and (iv) institutional customers such as schools, colleges, prisons,
libraries and churches. Larger customers frequently own or manage multiple
properties on a local, regional or national basis. For new roof construction and
installation projects, a roofing contractor generally subcontracts with a
general contractor and obtains a contract through a competitive bidding process,
which in some cases is limited to preferred bidders on a selective bid list who
meet bonding and other requirements. Roofing contractors generally obtain
reroofing contracts through either a competitive bid process or through a direct
negotiation with the customer. Roofing contractors may also offer maintenance
services directly to the customer and propose cost-effective roofing solutions
on an ongoing basis. In some cases, manufacturer representatives and roofing
consultants refer roofing and reroofing work to selected roofing contractors,
generally larger contractors with established reputations.

Demand for roofing contracting services depends upon a number of factors.
Reroofing demand in a geographical market depends upon the existing inventory of
buildings and related infrastructure, the age of existing roof systems, roof
traffic, climatic conditions and, in some cases, storm damage. Generally,
reroofing contracts generate comparatively stable, recurring revenues funded
through a customer's capital expenditure budget and other financings. Demand by
commercial and industrial customers for new roof construction in a geographical
market reflects general economic conditions, including economic growth,
construction activity and the availability of financing. Government expenditures
for new roof construction generally remain more stable than expenditures by
commercial and industrial customers and reflect the longer budget and planning
times for government contracts. Roofing maintenance services generate recurring
revenues, and demand for such services from a roofing contractor depends in part
upon the contractor's reputation, customer relationships, number and size of
prior installations and reroofing projects and scope of maintenance and repair
services offered. Demand for roofing services may vary in different geographic
areas based upon local and regional conditions, including seasonal and
weather-related conditions. The Company believes that geographical diversity of
operations can provide a competitive advantage by reducing the effect of local
and regional conditions and seasonality.

STRATEGY

The Company believes that its size, customer and industry relationships,
geographic scope and licensing, experience with different roofing systems,
combined workforce and use of proprietary computer databases will give the
Company significant competitive advantages in the roofing contracting industry.

45
<PAGE>
Through increased size, the Company believes it will have greater ability to
attract, train and retain qualified personnel, to compete for larger jobs that
require greater bonding capacity and other resources and to deploy roofing and
repair crews in its combined markets. Increased size will also offer
efficiencies in areas such as materials purchasing, computer system and database
development, employee benefits, bonding, insurance and financing. The Company
believes that the diversity of its operations will diminish the effects of
regional and market downturns and seasonality, offer opportunities to pursue
growth and recurring revenues and create a base of expertise to expand into new
markets and serve new customers.

The Company's goal is to build on its position as the leading national
provider of roofing services for commercial, industrial, governmental and
institutional customers by increasing the profitability of its operations,
expanding its business and markets through internal growth and pursuing an
aggressive acquisition growth strategy.

46
<PAGE>
OPERATE ON DECENTRALIZED BASIS. The Company believes that a
decentralized operating strategy will retain the entrepreneurial approach
of the Founding Companies, which will be balanced by centralized financial
and accounting controls. By maintaining a local and regional focus in each
of its markets, the Company will seek to preserve its market knowledge and
customer relationships, build relationships with current and future
customers and respond to customer demands and changing market conditions.
Senior management at the Founding Companies will remain empowered to make
day-to-day operating decisions at each location and will retain primary
responsibility for profitability and growth of their business. The Company
believes that its centralized financial and accounting controls and
reporting and regular communications programs will also be integral to
realizing the benefits of the Acquisitions and the Offerings.

INTERNAL GROWTH STRATEGY. The Company intends to leverage the competitive
strengths of the Founding Companies and subsequently acquired businesses with
the objective of achieving internal growth. Key elements of the Company's
internal growth strategy are:

47
<PAGE>
ENHANCE OPERATING EFFICIENCIES. Certain administrative functions will
be centralized following the Offerings, and the Company expects to realize
economies of scale and reduce overlapping or duplicate efforts and
expenses. The Company intends to coordinate its purchasing activities when
appropriate in dealing with suppliers, manufacturers and distributors. In
addition, as a result of the Company's size, it believes it will also lower
its costs for (i) purchasing roofing and sheet metal materials, (ii)
purchasing or leasing and routine maintenance of vehicles and cranes, (iii)
bonding, casualty and liability insurance, (iv) health insurance and
related benefits, (v) retirement benefits administration, (vi) office and
computer equipment, (vii) marketing and advertising, (viii) telephone
services and (ix) a variety of accounting, financial management and legal
services. The Company's office, shop and warehouse properties located in 18
states offer the capacity to increase efficiency in handling, storing and
fabricating roofing materials in a number of locations. In addition, using
proprietary enhancements to project management software, the Company
expects to be able to track project status and improve capacity utilization
and reporting to customers. For customers that operate in regional or
national markets, the Company will seek to lower administrative costs of
serving regional and national accounts and to realize operating
efficiencies such as lower travel costs and reduced bid preparation time
and expense. At some locations, the Company's larger combined workforce
will provide potential staffing and scheduling efficiencies and reduce down
time labor costs, both on site and between major scheduled projects.

48
<PAGE>
services to new and existing customers. Despite the integration
opportunities afforded by such tuck-in acquisitions, the Company intends to
maintain existing business names and identities in order to retain
awareness among existing customers for marketing purposes when appropriate.

SERVICES AND OPERATIONS

The Founding Companies have provided roofing services to numerous
commercial, industrial, governmental and institutional customers having a local,
regional and national presence, some of which are listed below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMERCIAL INDUSTRIAL GOVERNMENTAL INSTITUTIONAL
- ------------------------------------- ---------------------- -------------------------- -------------------------
Circuit City 3M Company Department of Defense Brown University
CitiCorp Abbott Laboratories Federal Bureau of Prisons Cornell University
Holiday Inn Coca Cola National Gallery of Art D.C. Public Schools
IBM Duracell USA U.S. Air Force Howard University
K-Mart Stores Frito Lay U.S. Army Legends Field
Northwest Airlines General Electric U.S. Capitol Building Syracuse University
Norwest Bank General Motors U.S. Marine Corps U.S. Military Academy
Saks 5th Avenue Hewlett Packard U.S. Navy University of Florida
Target United Parcel Service U.S. Pentagon University of Pittsburgh
WalMart Stores Westinghouse Electric U.S. Postal Service University of Texas
</TABLE>

Based upon its experience in installing all major types of roofing systems,
the Company offers independent services and assistance before, during and after
construction to select, construct, install, repair, refurbish, replace and
maintain a customized roof system that is appropriate for a customer's
individual requirements. The following is a description of the Company's roofing
services.

REROOFING. Reroofing is the installation of a new roof when a roofing
system fails and in most cases includes the removal of the existing roof system.
The Company performs reroofing when repair and refurbishment alternatives fail
to restore a roof system to serviceable condition, or at the request of a
customer, in some cases for aesthetic reasons. Prior to working on a reroofing
project, the Company may provide individual services for potential clients,
assisting with functional needs assessments, budgeting, long-term planning, roof
surveys and condition reporting, analysis of repair versus replacement
decisions, project scope of work specifications and roof safety audits. When
appropriate, reroofing projects may include asbestos abatement, insulation
replacement, replacement or repair of the underlying metal roof deck and
installation of lightweight insulating concrete.

NEW CONSTRUCTION. General construction contractors subcontract with the
Founding Companies to install roof systems on new structures. Construction
services consist of tradework, project supervision, site-specific safety
planning, construction permit processing, management of roofing-related
subcontractors, material and supply logistics scheduling and custom sheet metal
work. The typical new construction project entails installation of rigid board
insulation, fastening or adhesive material, a roofing membrane and flashing made
of roof membrane and/or metal to prevent intrusion of water into the roofing
system.

MAINTENANCE, REPAIR AND REFURBISHMENT SERVICES. The Company provides
additional roofing services to extend the life and enhance the performance of
roofing systems installed by the Company and other contractors. The Company
offers or assists with preventive roof maintenance programs, corporate roof
safety and loss control programs, roofing seminars, customized in-house client
training and roof asset management programs. Maintenance services involve the
physical inspection of an existing roofing system to determine its condition,
detect weaknesses and failures and identify potential problems, if any. Through
a program of regularly scheduled annual or semi-annual inspections, the
Company's technicians seek to identify roof damage in its early stages and offer
cost effective repair or refurbishment alternatives before significant damage
occurs. As a result of performing maintenance inspections, the Company may
generate additional fees from performing repairs and may identify significant
reroofing opportunities. The Company believes that the cost effectiveness of
regularly scheduled maintenance strengthens relationships with the Company's
customers and establishes a basis for recurring revenues. The Company generally
performs

49
<PAGE>
repair services in occupied buildings, where leaks and roof damage can result in
property damage, business disruption and hazards. The Company provides emergency
leak repair services to certain customers 24 hours a day in many locations
throughout the United States. Refurbishment involves major repairs of an
existing roofing system, including repair of all penetrations and resurfacing of
the roof system, and can add many years to the useful life of a roof system,
typically at significantly less cost than the cost of reroofing.

RELATED SPECIALIZED SERVICES. Certain of the Founding Companies offer
specialized roofing and related services, such as waterproofing, caulking, roof
deck installation and restoration. Waterproofing systems for foundation walls,
plaza decks and garages involve the application of liquid membrane, hot
rubberized asphalt systems, sheet waterproofing and traffic-bearing membranes.
Caulking includes the installation of silicone and urethane sealants at
expansion joints, control joints, window perimeters and other exterior building
joints that require a flexible seal to prevent the intrusion of water and to
accommodate building movement. Certain of the Founding Companies have developed
expertise in repairing and replacing metal roof decks and installing lightweight
insulating concrete roof decks. In some locations certain Founding Companies
offer concrete and masonry restoration. The Company believes that its ability to
bundle roofing services with waterproofing, caulking, roof deck work and
restoration services in some locations offers a competitive advantage by
expanding the scope of services offered to customers and reducing the number of
subcontractors required to bid and complete a project.

OPERATIONS. The Company's experienced estimators and project managers
typically develop an estimate and prepare a proposal and schedule for a roofing
or reroofing contract. After a contract is signed, the Company assigns an
appropriate work crew and supervisory personnel to the project and orders the
roofing system and accessory materials from a manufacturer and other suppliers,
generally for delivery directly to the worksite. Within the time scheduled under
the contract, the Company dispatches a work crew to the work site to install the
roofing system and accessories. Each of the Founding Companies has specialized
equipment for moving materials to roofs of buildings, and certain of the
Founding Companies operate high-reach cranes to move materials to roofs with
difficult access. After a project is completed, the Company's supervisors or
inspectors review the work and submit the project to inspection by the
manufacturer of the roof system, who then typically issues directly to the
customer a manufacturer's warranty for the roofing materials as well as the
workmanship relating to the installation of the roofing materials. See
" -- Contracts, Suppliers and Warranties."

ROOF SYSTEMS AND OTHER MATERIALS

The types of roof systems installed by the Company reflect a number of
design considerations, such as (i) roof shape, slope and height, (ii) climatic
exposures, including extreme temperatures, (iii) architectural acceptance, (iv)
required level of maintenance, (v) ease and cost of repair, (vi) average cost
over roofing life cycle, (vii) resistance to tears and abrasions, (viii) rooftop
traffic and stresses, (ix) weight of roof, (x) wind uplift characteristics, (xi)
suitability to retrofit an existing roof system without tear-off, (xii) energy
efficiency and reflective properties of roof finish, (xiii) fire resistance,
(xiv) ability to expand and contract with extreme temperature fluctuations or
other conditions, (xv) compatibility with insulation and other substrate and
(xvi) movement of the underlying roof deck and others. Roof systems installed by
the Company include the following:

SINGLE-PLY ELASTOMERIC ("EPDM"). Ethylene Propylene Diene Monomer
is a lightweight, elastic, membrane composed of synthetic rubber that
remains relatively stable in extreme temperatures. Due to its flexibility,
it is regularly specified for new construction projects involving certain
types of lightweight buildings and roof decks that experience significant
expansion and contraction. Seams are formed using contact adhesives or
butyl tape technology.

BUILT-UP ROOFING ("BUR"). The BUR system is composed of insulation
board, base sheet, hot or cold applied adhesive felts, surfacing materials
and flashing materials and is installed by alternating layers of asphalt or
coal tar saturated felts or fiberglass mat roofing plies. BUR can be used
for positive slope roof systems in both new construction projects and on
existing buildings.

50
<PAGE>
MODIFIED BITUMEN ("MB"). Composite membranes used in MB roof
systems consist of bitumen, modifiers, which provide tough, rubbery,
flexible properties to the product and reinforcements, such as fiberglass
or polyester and a covering of mineral granules or, in some cases, a
liquid-applied coating that is added at the worksite. MB systems offer good
flexibility and resistance to roof system traffic.

PVC AND SIMILAR MEMBRANES ("PVC"). Thermoplastic membranes, such as
PVC, TPO, ElvaloyT and HypalonT, are flexible, reinforced heat weldable
reflective membranes manufactured from a variety of materials. These
lightweight and energy efficient membranes provide roofing solutions for
buildings that have unusual shapes or experience substantial movement.
Various thermoplastic membranes exhibit good resistance to environmental
contaminants, including animal fats, chemicals, particulates and liquids
and roof traffic.

POLYURETHANE FOAM ("PUF"). Polyurethane foam is a liquid mixture
which is spray applied to the roof deck or substrate and immediately
expands up to 20 to 30 times its original volume, hardens and becomes a
lightweight solid insulation. The foam application adheres to virtually all
types of roof decks, reduces thermal shock, is self flashing and offers
good strength-to-weight ratios, wind resistance, insulation efficiency per
unit of thickness and waterproofing qualities. Coatings are used to protect
polyurethane foam from ultraviolet damage.

METAL ROOFING. A weather-resistant, metal roof system acts like a
single, monolithic steel membrane when installed on appropriate buildings
with positive slope roofing. Roof panels are lock seamed together to keep
moisture out and enhance structural integrity. Metal roofing may be used in
new construction, retrofit or to re-cover existing roofs to create slope.

ASPHALT, TILE AND SLATE SHINGLE. Sloped roofing commonly consists of
asphalt shingle roofing but may also be constructed of clay or concrete
tile or slate. Asphalt shingles offer comparative low cost, ease of
installation and repair and the ability to conform to complex roof shapes.
Clay and concrete tiles and slate offer a durable roof system appropriate
to roof decks with minimal movement. Benefits of tile and slate roofing
include resistance to fire and other elements.

INSULATION AND SHEET METAL. Roofing and reroofing work typically
includes the installation of insulation and sheet metal. Roof insulation
materials include polyisosiunate, polystyrene, fiberboard, fiberglass,
cellular glass, volcanic glass fiberboard, polyurethane and lightweight
insulating concrete. The type of insulation installed in a particular
project is generally selected on the basis of cost, type of roofing system,
local climate, customer requirements for thermal resistance, ratings in
fire safety performance, compressive strengths and thickness requirements
under applicable specifications and codes.

CONTRACTS, SUPPLIERS AND WARRANTIES

The Company generally obtains new roof construction and installation
contracts through a competitive bidding process, which in some cases is limited
to preferred bidders on a selective bid list who meet bonding and other
requirements, or, less commonly, through negotiation. For new roof construction
and installation projects, the customer generally enters into contracts with a
general contractor, who then subcontracts with a roofing contractor to install
the roof system in accordance with architectural plans and specifications.
Reroofing contracts may be obtained by competitive bidding or through
negotiation. If the Company originally installed a roof system or maintains
records and plans of a roof's design and maintenance, the Company may have a
competitive advantage in bidding for or negotiating a contract to repair,
refurbish or replace the roof system. For certain roofing and reroofing
projects, customers may seek planning, assessment, specification, budgeting and
other advisory services from manufacturer representatives and roofing
consultants. The Company believes that it has developed relationships with
manufacturer representatives and roofing consultants that provide a competitive
advantage in obtaining certain roofing and reroofing contracts, including
certain contracts for larger, more complex and higher margin projects. See
" -- Industry Overview." The Company's roofing and reroofing contracts are
generally structured on a fixed cost basis, although smaller projects, such as
repair or refurbishment projects, are in some cases billed

51
<PAGE>
on an hourly rate basis. Maintenance services are generally provided for a fixed
periodic fee or an hourly rate basis. Large roofing contracts typically provide
for retainage of a specified percentage of the contract amount until the work
has been fully reviewed and formally accepted by the customer or property owner.

The Company purchases roof systems and materials from a number of
manufacturers and acts as an independent contractor or subcontractor to
construct or install the roof system to meet a customer's individual
requirements. The roof systems installed by the Company are generally developed
by large manufacturers after extensive research and testing and include
insulation, membrane, felts, fasteners, accessories (including tape, seaming
materials and sealants) and metal or membrane flashing. Only two large
manufacturers manufacture EPDM membrane. The Company believes that the
relationships of the Founding Companies with many different roofing
manufacturers represent a competitive advantage and provide the opportunity to
offer extended manufacturer warranties. A number of the Founding Companies
participate from time to time on manufacturers' advisory councils and also test
roofing products on behalf of manufacturers. The Founding Companies have
received numerous awards and designations from manufacturers of roof systems.

Certain of the Founding Companies operate sheet metal fabrication
facilities used to produce flashing and other sheet metal used in roofing
applications to provide a waterproof connection between roofing materials and a
building wall or other surface. Substantially all of the other roofing and
waterproofing systems and component parts the Company sells or installs are
purchased from manufacturers and other outside suppliers.

Warranties for the roof systems installed by the Founding Companies are
generally issued directly by the manufacturer to the customer for an additional
fee, based upon the size of the roof, paid to the roofing materials
manufacturer. The warranty, which requires full inspection and approval of the
roofing installation by the manufacturer or a designated representative,
generally extends for ten years and covers materials and workmanship at
replacement cost. Typically, through a separate licensing agreement with the
manufacturer, the Founding Companies agree to warrant the workmanship related to
installation of the roofing materials for two years. Only certain roofing
contractors approved by the manufacturers are entitled to provide manufacturer
warranties to the contractor's customers with respect to workmanship relating to
installation of materials. The Company believes that the ability to provide this
warranty coverage is an important competitive advantage. The warranty coverage
generally requires a customer to comply with certain stated conditions,
including periodic roof surveys and notice to the manufacturer and roofing
contractor of any roof damage within specified periods following discovery.

MANAGEMENT INFORMATION AND CONTROLS

The Company intends to centralize its consolidated accounting and financial
reporting activities at its operational headquarters in Houston, Texas. Basic
accounting activities will continue to be conducted at the operating level. The
Company believes that its current information systems' hardware and software are
adequate to meet current needs for financial reporting, internal management
control and other necessary information and the needs of newly acquired
businesses.

PROPERTY AND EQUIPMENT

The Company operates a fleet of approximately 650 owned and leased service
trucks, vans and support vehicles, including high-reach and other cranes and
specialty material handling equipment used to load roofing products and ballast
to elevated work sites. It believes these vehicles generally are adequate for
the Company's current operations.

At March 31, 1998, the Company maintained 41 facilities in 18 states. Of
the Company's facilities, all are leased. Upon the consummation of the
Offerings, the Company will lease its principal and administrative offices in
Houston, Texas and is currently in the process of obtaining office space for
this purpose.

Upon consummation of the Offerings, the Company will lease all of its
warehouses, shops, and administrative offices as follows, subject to
consolidation of certain facilities to achieve operating

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efficiencies and subject to the execution of leases with certain owners of the
Founding Companies in connection with the Acquisitions and the consummation of
the Offerings:

LOCATION SQUARE FEET TYPE OF PROPERTY
- ---------------------------- ------------ -----------------------
D.C. TAYLOR:
Phoenix, AZ............. 17,000 Office/Warehouse
Concord, CA............. 3,560 Office/Warehouse
Atlanta, GA............. 6,250 Office/Warehouse
Cedar Rapids, IA........ 31,000 Office/Warehouse
SEYFORTH:
Birmingham, AL.......... 16,000 Office/Shop
Albuquerque, NM......... 6,000 Office/Shop
El Paso, TX............. 10,000 Office/Shop
Garland, TX............. 16,700 Office/Shop
Garland, TX............. 18,000 Office/Shop
Houston, TX............. 15,000 Office/Shop
NU-TEC:
Indianapolis, IN........ 8,000 Office/Warehouse
Indianapolis, IN........ 18,000 Office/Warehouse
Tampa, FL............... 17,300 Office/Warehouse
Cincinnati, OH.......... 2,800 Office/Warehouse
BETA:
Capitol Heights, MD..... 19,000 Office/Warehouse
EVANS:
Elmira, NY.............. 2,250 Office
Elmira, NY.............. 4,500 Office
Elmira, NY.............. 12,000 Office/Warehouse/Shop
Elmira, NY.............. 5,000 Office/Warehouse
Endwell, NY............. 2,250 Office/Warehouse
Morrisville, NC......... 2,450 Office/Warehouse
Auburndale, FL.......... 150 Office
BRAZOS:
Waco, TX................ 11,200 Office/Shop
Box Elder, SD........... 3,700 Office/Warehouse
KELLEY BROTHERS:
Fairfield, OH........... 4,510 Office/Warehouse
Fairfield, OH........... 7,000 Warehouse
Columbus, OH............ 3,385 Warehouse
Harrison, IN............ 2,000 Office/Warehouse
CHAMBERLIN:
Houston, TX............. 11,700 Office/Warehouse
Dallas, TX.............. 7,200 Office/Warehouse
Dallas, TX.............. 43,000 Storage Yard
Austin, TX.............. 2,910 Warehouse
BURNS & SCALO:
Bridgeville, PA......... 20,000 Warehouse/Shop
Bridgeville, PA......... 5,000 Office
Bridgeville, PA......... 3,000 Office/Warehouse/Shop
BOONE:
Omaha, NB............... 10,560 Office/Warehouse
Olathe, KS.............. 5,100 Office/Warehouse
SUTTER:
Fort Myers, FL.......... 4,000 Office/Warehouse
Sarasota, FL............ 16,300 Office/Warehouse/Shop
M.J. DALSIN:
West Fargo, ND.......... 12,000 Office/Warehouse/Shop
Sioux Falls, SD......... 14,000 Office/Warehouse/Shop

In addition to the facilities listed above, the Company may operate on a
short-term basis in other locations as may be required from time to time to
perform its contracts.

The Company believes that its properties are generally adequate for its
present needs. Furthermore, the Company believes that suitable additional or
replacement space will be available as required for the Company's operations.

COMPETITION

The roofing contracting industry is highly fragmented and competitive. Most
of the Company's competitors are small, owner-operated companies that typically
operate in a limited geographic area. In the future, competition may be
encountered from new entrants, including companies attempting to consolidate
roofing contracting service companies. Competitive factors in the roofing
contracting industry include (i) price, (ii) the availability of qualified
personnel, (iii) cost structure, (iv) relationships with customers, including
roofing consultants, (v) relationships with roofing manufacturers, (vi)
certification to issue a

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manufacturer's warranty of workmanship as well as materials, (vii) ability to
obtain adequate bonding, (viii) geographic diversity, (ix) state licensing, (x)
ability to reduce project costs, (xi) experience in providing specialty roofing
services, (xii) safety record and (xiii) access to technology. See "Risk
Factors -- Competition" and "-- Industry Overview."

REGULATION

The Company's business and the activities of its roofing contractors are
subject to various federal, state, and local laws, regulations and ordinances
relating to, among other things, the licensing and certification of roofing
contractors, safety standards determined and enforced by the Occupational Safety
and Health Administration and environmental laws and regulations relating to the
disposal of demolition debris, asbestos and other solid wastes. The Company is
also subject to certain federal, state and local laws and regulations which
regulate the Company's advertising, warranties and disclosures to customers and
the bidding process required to obtain roofing contracts. The U.S. Environmental
Protection Agency and a variety of state environmental agencies regulate the use
and handling of certain materials used by roofing contractors and the disposal
of wastes generated by roofing contractors. Certain materials used or handled by
the Company or removed by the Company from factories or other projects are
classified as hazardous materials requiring special handling, transportation and
disposal. Fines and penalties may be imposed for failure to comply with
environmental laws and regulations, and the Company could become subject to
environmental cleanup obligations as a result of any improper disposal of
hazardous or nonhazardous waste. The Company is also required to comply with
labor laws and regulations, including those that relate to verification by
employees of legal immigration or work permit status of employees. Applicable
regulations may change and may increase expenses or cause project delays. There
can be no assurance that in the future the Company's results of operations will
not be materially adversely affected by existing or new laws or regulations
applicable to the Company's business.

LEGAL PROCEEDINGS

Each of the Founding Companies has, from time to time, been a party to
litigation arising in the normal course of its business, most of which involves
claims for personal injury or property damage incurred in connection with its
operations. Management believes that none of these actions will have a material
adverse effect on the financial condition or results of operations of the
Company.

D.C. Taylor is a co-defendant in a lawsuit brought by Sears, Roebuck and
Co. ("Sears"). The lawsuit, SEARS ROEBUCK & CO. VS. JPS ELASTOMERICS AND D.C.
TAYLOR CO., No. 9707210 was filed on July 21, 1997 in the Circuit Court of Cook
County, Illinois. The claims brought by Sears relate to approximately 160 roofs
installed in 1983, 1985 and 1986 on buildings owned by Sears. The manufacturer
of the roofing membrane is also a defendant in the lawsuit. Sears' claims
include negligence, breach of warranty and other tort claims against D.C. Taylor
in both recommending roofing materials and in installing the roof systems, and
the lawsuit requests replacement costs, property damages and other damages. No
specific damage amounts are claimed in the petition. D.C. Taylor believes that
it has insurance coverage for these claims, subject to certain deductibles and
ceilings; however, insurance coverage under certain policies is disputed. D.C.
Taylor believes the allegations brought in the lawsuit referenced above are
without merit and that it has a number of strong defenses, including statutes of
limitations, statutes of repose, contractual limitations, expiration of the
applicable warranty provisions in the parties' agreements, and failure on the
part of Sears to comply with the notice requirements and other terms of the
warranty provisions. D.C. Taylor is defending, and will continue to defend,
vigorously the claims brought against it. D.C. Taylor is unable, however, to
predict the outcome of this suit or the costs to be incurred in connection with
its defense, and there can be no assurance that the litigation will be resolved
in D.C. Taylor's favor or that insurance will cover all claims or defense costs.

EMPLOYEES

At March 31, 1998, the Company had approximately 2,260 employees.
Approximately 95 employees, or 4% of the Company's employees, are members of
unions and work under collective bargaining agreements that are subject to
renegotiation from time to time.

<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning the Company's
directors and executive officers and those persons who will become directors,
executive officers and certain key employees following the consummation of the
Offerings:

NAME AGE POSITION
- ------------------------- --- -----------------------------------------------
C. Byron Snyder.......... 50 Chairman of the Board of Directors
John M. Kafka............ 47 Chief Executive Officer and Director*
William W. Taylor........ 46 Chief Operating Officer*
Robert S. Zlotnik........ 45 Chief Financial Officer*
Randall D. Grubbs........ 32 Vice President -- Mergers & Acquisitions*
H. Brock Hudson.......... 37 Vice President -- Mergers & Acquisitions*
Bruce Bubenzer........... 59 President of Nu-Tec and Director*
Michael J. Dalsin........ 49 President of M.J. Dalsin and Director*
Paul V. Gordon........... 51 President and Chief Executive Officer
of Beta and Director*
Dan B. Hand.............. 49 President of Seyforth Roofing Company, Inc. and
Director*
Philip A. McKinney....... 48 Chief Executive Officer of Evans and Director*
Jack F. Scalo............ 39 President of Burns & Scalo and Director*
Edmund P. Djerejian...... 59 Director*
Thomas E. White, Jr...... 53 Director*
Jim P. Wise.............. 54 Director*

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

* Election as a director or officer of INCOM effective upon the consummation of
the Offerings.

Directors are elected at each annual meeting of stockholders. All officers
serve at the discretion of the Board of Directors, subject to terms of their
employment agreements. See "-- Employment Agreements."

C. BYRON SNYDER has been Chairman of the Board of Directors of INCOM since
its inception. Mr. Snyder is the President of Sterling City Capital, LLC, a
Houston-based investment company specializing in consolidating privately owned
businesses simultaneously with an initial public offering. He was the owner and
President of Relco Refrigeration Co., a distributor of refrigerator equipment
which he acquired in 1992 and which was merged in February 1998 into Hospitality
Companies, Inc. Mr. Snyder is a director of Hospitality Companies, Inc., a
supplier of food equipment and heating/air conditioning products to the
hospitality industry. Prior to 1992, Mr. Snyder was the owner and Chief
Executive Officer of Southwestern Graphics International, Inc., a diversified
holding company which owned Brandt & Lawson Printing Co., a Houston-based
general printing business, and Acco Waste Paper Company, an independent
recycling business. Mr. Snyder is a director of Carriage Services, Inc., a
publicly held death care company and Chairman of the Board of Directors of
Integrated Electrical Services, Inc., a publicly held electrical contracting and
maintenance services consolidator.

JOHN M. KAFKA will become Chief Executive Officer and a director of the
Company upon consummation of the Offerings. Mr. Kafka has served as President of
Chamberlin Waterproofing & Roofing Systems, Inc., one of the Founding Companies,
since January 1981. Mr. Kafka has 21 years of experience in the contracting
industry. He is currently the President of the American Subcontractors
Association, Houston, Chapter, and also serves as a director on the Board of
Directors for American Subcontractors Association for the State of Texas.

WILLIAM W. TAYLOR will become Chief Operating Officer of INCOM upon
consummation of the Offerings. Mr. Taylor has served as Chief Executive Officer
and President of D.C. Taylor since 1984. Mr.

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Taylor completed the Total Quality Management Program of the NRCA and the
University of Chicago Graduate School of Business in 1995. Mr. Taylor holds
roofing contractor licenses in every state in the continental United States that
requires such licenses.

ROBERT S. ZLOTNIK will become Chief Financial Officer of INCOM following
the consummation of the Offerings. From April 1990 to July 1998, Mr. Zlotnik
served as Senior Vice President and Chief Financial Officer of PACE
Entertainment Corporation, an entertainment company. From 1988 to 1990, Mr.
Zlotnik served as Senior Vice President-Finance of Lifeco Services Corporation,
a travel service consolidator. From 1980 to 1988, Mr. Zlotnik held various
positions at Ernst & Whinney, a national accounting firm. Mr. Zlotnik is a
Certified Public Accountant.

RANDALL D. GRUBBS will become Vice President -- Mergers and Acquisitions
upon consummation of the Offerings. Mr. Grubbs has served as a consultant to the
Company since its inception in February 1998. From November 1997 through
February 1998 he served as a consultant to C. Byron Snyder and his privately
owned corporations. From May 1997 through November 1997 Mr. Grubbs was
Manager -- Corporate Development for Pinnacle Brands, Inc., a private
manufacturing company. From December 1993 through May 1997 he was financial
analyst for American Ref-Fuel Company, a joint venture between Browning Ferris
Industries, Inc. and Air Products and Chemicals, both publicly held companies.
Mr. Grubbs is a Certified Public Accountant.

H. BROCK HUDSON will become Vice President -- Mergers and Acquisitions upon
consummation of the Offerings. Mr. Hudson served as a consultant to the Company
since its inception in February 1998. From May 1997 through February 1998 Mr.
Hudson was Vice President -- Finance for Bargo Energy Company, a private energy
company in Houston, Texas. From April 1993 through May 1997 he was Vice
President of Special Projects for Torch Energy Advisors Incorporated, an
investment advisory company specializing in oil and gas investments.

BRUCE BUBENZER will become a director of the Company upon consummation of
the Offerings. Mr. Bubenzer has served as President of Nu-Tec Roofing since its
incorporation in 1984.

MICHAEL J. DALSIN will become a director of the Company upon consummation
of the Offerings. Mr. Dalsin has served as President of M.J. Dalsin Company,
Inc. and M.J. Dalsin of South Dakota, Inc., two of the Founding Companies since
1979 and 1989, respectively.

PAUL V. GORDON will become a director of the Company upon consummation of
the Offerings. Mr. Gordon has served as President and Chief Executive Officer of
Beta Construction Company, one of the Founding Companies, for more than five
years.

DAN B. HAND will become a director of the Company upon consummation of the
Offerings. Mr. Hand has served as President of Seyforth Roofing Company, Inc.,
one of the Founding Companies, for more than five years. Mr. Hand serves on the
Board of Directors of the Roofing Contractors Association of Texas and served on
the Board of Directors of the Western Roofing Association in 1994.

PHILIP A. MCKINNEY will become a director of the Company upon consummation
of the Offerings. Mr. McKinney has served as Chief Executive Officer of Evans
Service Company, Inc., one of the Founding Companies, since 1997. Mr. McKinney
also served as Chief Operating Officer of CFE, Inc., a roofing services company,
from 1987 to 1994 and as Chairman of the Board and Chief Executive Officer of
Charles F. Evans Company, Inc., a corporate holding company, from 1995 to 1996.
Mr. McKinney currently serves on the Board of the NRCA and the Board of
Governors of the Alliance for Progress.

JACK F. SCALO will become a director of the Company upon consummation of
the Offerings. Mr. Scalo has served as President of Burns & Scalo Roofing
Company, Inc., one of the Founding Companies, since January 1995.

EDMUND P. DJEREJIAN will become a director of the Company upon consummation
of the Offerings. Mr. Djerejian has been a director of the James A. Baker IV
Institute for Public Policy at Rice University since 1994. He served as
Assistant Secretary of State for Near Eastern Affairs from 1991 to 1993 and
Ambassador to the Syrian Arab Republic from 1988 to 1991. He served as Deputy
Assistant Secretary of

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New Eastern and South Asian Affairs from 1986 to 1988 and U.S. Deputy Chief of
Mission to the Kingdom of Jordan from 1981 to 1984. Mr. Djerejian also serves on
the Board of Directors of Occidental Petroleum Corporation, Global Industries,
Ltd. and a number of non-profit organizations.

THOMAS E. WHITE, JR. will become a director of the Company upon
consummation of the Offerings. Mr. White has served as Chairman and Chief
Executive Officer of Enron Ventures Corp., a subsidiary of Enron Corp., since
December 1996. Mr. White served as Chairman and Chief Executive Officer of Enron
Operations Corp. from June 1993 until December 1996 and served as Chairman and
Chief Executive Officer of Enron Power Corp. from June 1991 until June 1993. Mr.
White joined Enron Corp. in 1990 as Vice President of Operations for Enron Power
Corp. after a twenty-three year career in the United States Army, from which he
retired in July 1990 with the rank of Brigadier General.

JIM P. WISE will become a director of the Company upon consummation of the
Offerings. Mr. Wise has served as Chief Financial Officer of Integrated
Electrical Services, Inc., an electrical contracting and maintenance services
consolidator, since September 1997. From September 1994 to September 1997, he
was Vice President -- Finance and Chief Financial Officer of Sterling Chemicals,
Inc., a publicly held manufacturer of commodity petrochemicals and pulp
chemicals. From July 1994 to September 1994, he was Senior Vice President and
Chief Financial Officer of U.S. Delivery Systems, Inc., a delivery service
consolidator. From September 1991 to July 1994, he was Chairman and Chief
Executive Officer of Neostar Group, Inc., a private investment banking and
financial advisory firm. Mr. Wise was employed by Transco Energy Company as
Executive Vice President, Chief Financial Officer and was a member of the Board
of Directors from November 1982 until September 1991.

The Board of Directors will establish an Audit Committee and Compensation
Committee. The Audit Committee will recommend the appointment of auditors and
oversee the accounting and audit functions of the Company. The Compensation
Committee will determine the salaries and bonuses of executive officers and will
administer the 1998 Stock Plan. Messrs. will serve as members of
the Company's Compensation Committee and Audit Committee. Any future material
transactions, including the issuance of securities other than through the 1998
Stock Plan, between the Company and its management and affiliates will be
subject to prior review and approval by the members of the Board of Directors
without an interest in such transaction.

Effective upon consummation of the Offerings, the Board of Directors will
be divided into three classes of directors, with directors serving staggered
three-year terms, expiring at the annual meeting of stockholders following the
1998 fiscal year (Class I), 1999 fiscal year (Class II) and 2000 fiscal year
(Class III), respectively. At each annual meeting of stockholders, one class of
directors will be elected for a full term of three years to succeed that class
of directors whose terms are expiring. Effective upon the consummation of the
Offerings, the Board of Directors will be classified as follows:

DIRECTOR COMPENSATION

Directors who are employees of the Company or a subsidiary do not receive
additional compensation for serving as directors. Each director who is not an
employee of the Company or a subsidiary will receive a fee of $2,000 for
attendance at each Board of Directors meeting and $1,000 for each committee
meeting (unless held on the same day as a Board of Directors meeting). Directors
of the Company will be reimbursed for reasonable out-of-pocket expenses incurred
in attending meetings of the Board of Directors or committees thereof, and for
other expenses reasonably incurred in their capacity as directors of the
Company. Also, each non-employee director will participate in the 1998 Stock
Plan. The 1998 Stock Plan provides for (i) the automatic grant to each
non-employee director serving at the consummation of the Offerings of an option
to purchase 5,000 shares, (ii) the automatic grant to each individual who is
first elected or appointed as a non-employee director after the Offerings of an
option to purchase 5,000 shares on such election or appointment, and (iii) an
automatic annual grant to each non-employee director of an option to purchase
5,000 shares following each annual meeting of the stockholders (after 1998) on
which such director remains a non-employee director, provided such director did
not receive an initial 5,000 share grant within three months of that annual
meeting of the stockholders. All such director options will have an

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exercise price per share equal to the fair market value of the Common Stock on
the date of grant, will vest six months after grant and will expire ten years
from the date of grant, unless such director ceases to serve prior to that time.
See "-- 1998 Stock Plan."

EXECUTIVE COMPENSATION

The Company was incorporated in February 1998 and, prior to the Offerings,
has not conducted any operations other than activities related to the
Acquisitions and the Offerings. The Company anticipates that during 1998
annualized base salaries of its most highly compensated executive officers will
be: Mr. Kafka -- $200,000, Mr. Taylor -- $190,000 and Mr. Zlotnik -- $180,000.

EMPLOYMENT AGREEMENTS

The Company will enter into employment agreements with each executive
officer of the Company which prohibits such officer from disclosing the
Company's confidential information and trade secrets and generally restricts
these individuals from competing with the Company for a period of two years
after the date of the termination of employment with the Company. Each of the
agreements has an initial term of five years and provides for annual extensions
at the end of its initial term, unless either party timely notifies the other
that the term will not be extended, and is terminable by the Company or by the
officer upon thirty days' written notice. The employment agreements provide that
the Company shall pay each officer the annual salary set forth above under
"-- Executive Compensation," which salary may be increased by the Board of
Directors. Such agreements also provide that each officer will be reimbursed for
out-of-pocket business expenses and shall be eligible to participate in all
benefit plans and programs as are maintained from time to time by the Company.
All employment agreements provide that if the officer's employment is terminated
by the Company without "cause" or is terminated by the officer for "good
reason," the officer will be entitled to receive a lump sum severance payment
at the effective time of termination equal to the base salary (at the rate then
in effect) for the greater of (i) the time period remaining under the term of
the agreement (but not to exceed two years) or (ii) one year. In addition, the
time period during which such officer is restricted from competing with the
Company will be shortened from two years to one year.

The employment agreements contain certain provisions concerning a
change-in-control of the Company, including the following: (i) in the event the
officer's employment is terminated within two years following the change in
control by the Company other than for "cause" or by the officer for "good
reason," or the officer is terminated by the Company within three months prior
to the change in control at the request of the acquirer in anticipation of the
change in control, the officer will be entitled to receive a lump sum severance
amount equal to the greater of (a) three years' base salary (at the rate then in
effect) or (b) the base salary for whatever period is then remaining on the
initial term and the provisions which restrict competition with the Company
shall not apply; (ii) in any change-of-control situation, the officer may elect
to terminate his employment by giving five business days' written notice prior
to the closing of the transaction giving rise to the change-in-control, which
will be deemed a termination of employment by the officer for "good reason,"
and the provisions of the employment agreement governing the same will apply,
except that the severance amount otherwise payable shall be doubled (but not to
exceed six times the officer's base pay) (if the successor does not give written
notice of its acceptance of the Company's obligations under the employment
agreement at least ten business days prior to the anticipated closing date, the
severance amount shall be tripled, but not to exceed nine times base salary),
and the provisions which restrict competition with the Company shall not apply;
and (iii) if any payment to the officer is subject to the 20% excise tax on
excess parachute payments, the officer shall be made "whole" on a net
after-tax basis. A change in control is generally defined to occur upon (a) the
acquisition by any person of 20% or more of the total voting power of the
outstanding securities of the Company, (b) the first purchase pursuant to a
tender or exchange offer for Common Stock, (c) the approval of certain mergers,
sale of substantially all the assets, or dissolution of the Company or (d) a
change in a majority of the members of the Company's Board of Directors.

In general, a "parachute payment" is any "payment" made by the Company
in the nature of compensation that is contingent on a change in control of the
Company and includes the present value of the

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accelerations of vesting and the payment of options and other deferred
compensation amounts upon a change in control. If the aggregate, present value
of the parachute payments to certain individuals, including officers, equals or
exceeds three times that individual's "base amount" (generally, the
individual's average annual compensation from the Company for the five calendar
years ending before the date of the change in control), then all parachute
amounts in excess of the base amount are "excess" parachute payments. An
individual will be subject to a 20% excise tax on excess parachute amounts and
the Company will not be entitled to a tax deduction for such payments.

1998 STOCK PLAN

The Board of Directors and stockholders of the Company will adopt the 1998
Stock Plan prior to the consummation of the Offerings. The purpose of the 1998
Stock Plan is to provide officers, employees, directors and consultants with
additional incentives by increasing 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 or non-qualified stock options ("NQSOs"); (ii) stock
appreciation rights ("SARs"); (iii) restricted stock; (iv) phantom stock; (v)
performance awards; (vi) bonus stock awards; (vii) other stock-based award,
i.e., awards not otherwise provided for, the value of which is based in whole or
in part upon the value of the Common Stock; and (viii) cash awards that may or
may not be based on the achievement of performance goals ("Awards"). The
performance goals for Awards, until changed, include target levels of net
income, cash flows, return on equity, profit margins, sales, stock price,
reductions in cost of goods sold and earnings per share.

The Compensation Committee or the Company's Chief Executive Officer, to the
extent such duties are delegated to the Chief Executive by the Compensation
Committee, will administer the 1998 Stock Plan and select the individuals who
will receive awards and establish the terms and conditions of those awards. The
maximum number of shares of Common Stock that may be subject to outstanding
awards, determined immediately prior to the grant of any award, may not exceed
15% of the aggregate number of shares of Common Stock then outstanding. Shares
of Common Stock which are attributable to awards which have expired, terminated
or been canceled or forfeited are available for issuance or use in connection
with future awards. The maximum number of shares of Common Stock with respect to
which any person may receive options and SARs in any calendar year is
shares. With respect to other forms of Awards, the maximum Award
that may be granted to any individual in any calendar year cannot exceed $
million (determined as of the date of the grant of the Award). Options and SARs
may have such exercise prices as the Compensation Committee, in its discretion,
determines.

The 1998 Stock Plan will remain in effect for 10 years, unless earlier
terminated by the Board of Directors. The 1998 Stock Plan may be amended by the
Board of Directors or the Compensation Committee without the consent of the
stockholders of the Company, except that any amendment 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.

NQSOs to purchase 150,000 shares of Common Stock will be granted to the
Chief Financial Officer, and NQSOs to purchase 100,000 shares of Common Stock
will be granted to other officers prior to the closing of the Offerings. In
addition, at the consummation of the Offering, NQSOs to purchase approximately
1,365,357 shares will be granted to employees of the Founding Companies. Each of
the foregoing options will have an exercise price equal to the initial public
offering price per share, except that 100,000 options granted to the Chief
Financial Officer will have an exercise price equal to 60% of the initial public
offering price per share. These options will vest at the rate of 20% per year,
commencing on the first anniversary of grant and will expire at the earliest of
(i) ten years from the date of grant, (ii) three months following termination of
employment, other than due to death or disability or (iii) one year following a
termination of employment due to death or disability. INCOM will also grant
options to purchase 5,000 shares of Common Stock under the 1998 Stock Plan,
effective upon the consummation of the Offerings, to Messrs. Djerejian, White
and Wise, who will become directors of the Company upon consummation of the
Offerings.

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CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

The Company was organized in February 1998 by Sterling City. In connection
with the formation of INCOM, INCOM issued to Sterling City and certain
individuals a total of 1,000 shares of Common Stock for aggregate cash
consideration of $1,000. In July 1998, INCOM effected a 1,479.523-for-one stock
split, and such shares were converted into 1,479,523 shares of Restricted Common
Stock. Mr. Wise, who will become a director of the Company following the
consummation of the Offerings, holds 2,000 shares of such Restricted Common
Stock.

In February, May and June 1998, INCOM issued a total of 1,281,012 shares of
Common Stock for nominal consideration to various members of management and
certain other individuals, including: Mr. Kafka -- 271,726 shares, Mr.
Taylor -- 163,036 shares and Mr. Zlotnik -- 100,000 shares. Additionally, INCOM
has reserved 50,000 shares for issuance to other management.

Simultaneously with the closing of the Offerings, INCOM will acquire by
stock purchase all the issued and outstanding capital stock and other equity
interests of the Founding Companies, at which time each Founding Company will
become a wholly owned subsidiary of INCOM. The Acquisitions Consideration was
negotiated by INCOM and each of the Founding Companies and was based primarily
upon the pro forma adjusted net income of each Founding Company. The
Acquisitions Consideration consists of (i) approximately $40.0 million in cash
and (ii) 7,543,031 shares of Common Stock. The cash portion of the Acquisitions
Consideration is subject to adjustment based on the initial public offering
price and based on certain closing balance sheet amounts. In addition, the
Company intends to repay approximately $9.0 million of the historical
indebtedness of the Founding Companies with proceeds from the Offerings. Certain
additional shares of Common Stock and cash may be issued to the stockholders of
two of the Founding Companies if certain earnings thresholds are satisfied after
the consummation of the Offerings.

The consummation of each Acquisition is subject to customary conditions.
These conditions include, among others, the accuracy on the closing date of the
Acquisitions of the representations and warranties by the Founding Companies,
their stockholders and the Company; the performance by each of the parties of
their respective covenants; and the nonexistence of a material adverse change in
the results of operations, financial condition or business of each Founding
Company. There can be no assurance that the conditions to closing of the
Acquisitions will be satisfied.

The following table sets forth for each Founding Company (i) the
approximate portion of the Acquisitions Consideration to be paid to the
stockholders of each of the Founding Companies in cash and in shares of Common
Stock, (ii) the Owner Amounts, which consist of transfers of excess working
capital, the distribution of various Founding Companies' S Corporation
accumulated adjustment accounts and the distribution of nonoperating assets and
(iii) the total debt which would have been assumed by the Company as of March
31, 1998, which represents historical indebtedness, excluding capital lease
obligations and indebtedness incurred to fund a portion of the Owner Amounts:

SHARES OF OWNER
CASH COMMON STOCK AMOUNTS TOTAL DEBT
------- ------------- ------- ----------
(DOLLARS IN THOUSANDS)
D.C. Taylor.......... $ 4,883 1,126,848 $ 1,431 $2,677
Seyforth(a).......... 3,681 849,501 1,786 2,303
Nu-Tec............... 3,073 709,194 3,371 831
Beta................. 8,697 2,007,050 6,357 333
Evans................ 2,972 684,654 1,797 --
Brazos(a)............ 2,241 -- 1,725 1,028
Kelley Brothers...... 929 214,300 861 410
Chamberlin........... 2,379 549,012 2,301 438
Burns & Scalo........ 6,738 395,502 698 160
Boone................ 1,593 367,717 1,059 196
Sutter............... 1,073 247,490 1,066 430
M.J. Dalsin.......... 1,698 391,763 1,001 214
------- ------------- ------- ----------
Total........... $39,957 7,543,031 $23,453 $9,020
======= ============= ======= ==========

(Footnote on following page)

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- ---------------
(a) Excludes certain additional shares of Common Stock and cash that may be
issued to the stockholders of Seyforth and Brazos if certain earnings
thresholds are satisfied after the consummation of the Offerings. In
addition to the Acquisitions Consideration described above, each of Seyforth
and Brazos will be entitled to receive additional consideration in the event
those businesses achieve certain levels of net income in the future. For
Seyforth, the maximum amount of such additional consideration is
approximately $2.8 million to be paid 75% in Common Stock and 25% in cash.
For Brazos, the maximum amount of such additional consideration consists of
740,944 shares of Common Stock.

Pursuant to the agreements relating to the Acquisitions, all stockholders
of each of the Founding Companies have agreed not to compete with the Company
for a period of two years after the termination of their affiliation with the
Company. In connection with the Acquisitions, the Company and the owners of the
Founding Companies have agreed to indemnify each other for breaches of
representations and warranties and certain other matters, subject to certain
limitations.

Individuals who are or will become executive officers or directors of the
Company will receive the following portions of the Acquisitions Consideration
for their interests in the Founding Companies, subject to adjustments as
described above.

SHARES OF OWNER
CASH COMMON STOCK AMOUNTS
--------- ------------ -------
(DOLLARS IN THOUSANDS)
D.C. Taylor
WILLIAM W. TAYLOR............... $ 3,197 737,733 $ 937
Seyforth
DAN B. HAND..................... 3,681 849,501 1,786
Nu-Tec
BRUCE BUBENZER.................. 1,816 419,070 1,992
Beta
PAUL V. GORDON.................. 8,697 1,650,440 6,357
Evans
PHILIP A. MCKINNEY.............. 659 151,746 358
Chamberlin
JOHN M. KAFKA................... 1,190 274,506 1,151
Burns & Scalo
JACK F. SCALO(a)................ 4,537 240,424 462
M.J. Dalsin
MICHAEL J. DALSIN............... 1,698 391,763 1,001
--------- ------------ -------
Total................. $ 25,475 4,715,183 $14,044
========= ============ =======

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

(a) Excludes cash in the amount of $690,000 to be received by Mr. Scalo's wife,
Carol M. Scalo, in exchange for her interest in Burns & Scalo.

TRANSACTIONS INVOLVING CERTAIN OFFICERS, DIRECTORS AND STOCKHOLDERS

During the year ended December 31, 1997, D. C. Taylor purchased inventory,
supplies, equipment and a portion of future contracted work for $693,000, from
NRC Universal, Inc. ("NRC"), an Arizona-based roofing contractor. The purchase
price approximated the carrying value of the assets on NRC's books. In addition,
the Company subleased office and warehouse facilities and a parking lot in
Phoenix from NRC in connection with the transaction. The monthly payments under
the sublease are $9,000. NRC is a wholly owned subsidiary of Taylor Roofing
Services, Inc., a related company owned by the stockholders of D. C. Taylor,
including Mr. Taylor. For the year ended December 31, 1996, D. C. Taylor had
subcontracted projects of approximately $406,000 to NRC with approximately
$246,000 payable at December 31, 1996. During the year ended December 31, 1997,
D. C. Taylor provided equipment, vehicles, project management and administrative
services to NRC in the amount of approximately $343,000 and has advances to NRC,
net of payments from NRC, of approximately $249,000. D. C. Taylor has a
receivable totaling $49,000 and $448,000 at December 31, 1996 and 1997,
respectively, from NRC relating to a working capital advance

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made in 1996 and certain services and assets purchased in 1997. Approximately
$325,000 of this receivable was collected through June 5, 1998. D.C. Taylor has
also guaranteed a note of Taylor Roofing Services, Inc. in the amount of
$250,000. This guarantee will be released upon consummation of the Offerings.

During the year ended December 31, 1996, D. C. Taylor purchased certain
assets, liabilities, contracts in progress and future contracted work from
Cypress Roof Corporation ("Cypress"), a California-based roofing contractor of
which Mr. Taylor owns 91%. The purchase price approximated the carrying value of
the assets on Cypress' books. During 1996, D.C. Taylor had $47,000 in accounts
payable relating to this purchase. In addition, D.C. Taylor had a note
receivable from Cypress the interest income of which was approximately $16,000
and $22,000 in 1996 and 1995, respectively. Of these amounts, approximately $0
and $20,000 was receivable at December 31, 1996 and 1995, respectively. As of
December 31, 1997, D.C. Taylor had approximately $4,000 payable to Cypress. D.C.
Taylor also has construction subcontracts with Cypress. For the years ended
December 31, 1996 and 1995, D.C. Taylor had subcontracted activity of
approximately $141,000 and $359,000, respectively, with approximately $0 and
$170,000 payable at December 31, 1996 and 1995, respectively.

As of December 31, 1995, 1996 and 1997, D. C. Taylor had advances
receivable from Mr. Taylor of $190,000, $97,000 and $220,000, respectively.
Interest income for 1995, 1996 and 1997 on these advances was $37,000, $24,000
and $8,000, respectively, with $6,000, $2,000 and $14,000 receivable as of
December 31, 1995, 1996 and 1997, respectively. During the year ended December
31, 1996, the Company had a note payable to the wife of Mr. Taylor, all of which
had been paid as of December 31, 1996. Interest expense on this note in 1996
approximated $1,500. Mr. Taylor will become Chief Operating Officer of INCOM
following the consummation of the Offerings.

Seyforth leases certain building facilities used in their operations from
Mr. Hand. The lease agreements provide for monthly rentals of approximately
$15,000, $12,000 and $13,000 on a monthly basis in 1995, 1996 and 1997,
respectively. Total rent paid to Mr. Hand under these agreements was
approximately $189,000, $154,000 and $159,000 for the years ended December 31,
1995, 1996 and 1997, respectively. Mr. Hand will become a director of INCOM
following the consummation of the Offerings.

Nu-Tec has various receivables from its officers, their relatives and
employees of Nu-Tec which are included as a component of related-party
receivables on the balance sheets presented herein. During 1993, Nu-Tec loaned
approximately $48,000 to a related party under a demand promissory note bearing
interest at 6% per annum. At December 31, 1996 and 1997, approximately $68,000
and $40,000, respectively, was outstanding under such note. Nu-Tec leases its
land and building from BHB Partnership, a partnership formed by the stockholders
of Nu-Tec, including Mr. Bubenzer. Mr. Bubenzer owns an interest in BHB
Partnership. Nu-Tec pays BHB Partnership $8,000 per month for the use of this
facility under the terms of a capital lease which expires in June 2007. Nu-Tec
also leases an additional facility and land from BHB Partnership, for which
Nu-Tec pays $3,000 per month under the terms of a "triple netting" lease which
expires on August 31, 2002. BHB Partnership has entered into a preliminary
agreement to acquire a certain property in Tampa, Florida, which is expected to
be leased to Nu-Tec at a fair market rental value for an initial term of five
years, with a five-year renewal term at the option of Nu-Tec. Mr. Bubenzer will
become a director of INCOM following the consummation of the Offerings.

Beta is a guarantor on a commercial mortgage loan of Mr. Gordon, the
majority stockholder of Beta, on the property occupied by Beta. This guarantee
will be released upon consummation of the Offerings. The balance outstanding at
September 30, 1997 was approximately $692,000. Pursuant to the terms of the
mortgage loan, payments are to be made in monthly installments of $9,000,
including principal and interest, with a balloon payment due January 2001.
Interest is calculated on the outstanding principal balance at an annual rate of
8.5%. Beta also has an unsecured promissory note receivable dated June 22, 1994,
for $1,000,000, due from Mr. Gordon, which will be repaid upon consummation of
the Offerings. Interest accrues on the outstanding balance at an annual rate of
6.5% payable annually. The principal balance of this note matures in June 1999,
and the note has been assigned and pledged as collateral for a line of credit to
a bank.

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Beta has leased offices and warehouse space from Mr. Gordon pursuant to a
sale-leaseback agreement which will expire in November 2002. The sale-leaseback
agreement contains an option to extend the lease for one additional consecutive
term of five years. Rent expense charged to operations was $135,000 for each of
the years ended September 30, 1997, 1996 and 1995. Beta rents a storage lot from
Mr. Gordon on an annual basis. Rent expense charged to operations for the years
ended September 30, 1995, 1996 and 1997, was $20,000 each year. In addition,
Beta rents another facility from Mr. Gordon on an annual basis. Rent of $2,500
is payable monthly and the amount charged to operations under this lease was
$30,000 for each of the years ended September 30, 1995, 1996 and 1997. Mr.
Gordon will become a director of INCOM following the consummation of the
Offerings.

On January 31, 1997, HEIA, a partnership of certain officers of Evans,
including Mr. McKinney, purchased a facility that was leased to Evans for 10
years, to expire on February 1, 2007. Mr. McKinney owns a 25% interest in HEIA.
The rent paid under these related party leases for the year ended December 31,
1997, was approximately $38,000. As of December 31, 1997, Evans has a
noninterest-bearing note receivable from HEIA in the amount of $173,500 related
to property purchased by HEIA for relocation of a key employee. Mr. McKinney
will become a director of INCOM following consummation of the Offerings.

At December 31, 1997, December 29, 1996 and December 31, 1995, Chamberlin
had unsecured notes payable of approximately $438,000, $72,000 and $162,000,
respectively, to the stockholders, including Mr. Kafka. The notes are due on
demand and accrue interest monthly at prime plus 1.5%. Chamberlin had total
interest expense on notes payable to related parties during the years ended
December 31, 1997, 1996 and 1995, of approximately $46,000, $18,000 and $48,000,
respectively.

Chamberlin leases land, office and warehouse space from a partnership with
ownership identical to that of Chamberlin, on a month-to-month basis. Total rent
expense during the years ended December 31, 1997, 1996 and 1995 for these
facilities was $104,000, $104,000 and $80,000, respectively. Mr. Kafka will
become Chief Executive Officer and a director of INCOM upon consummation of the
Offerings.

As of December 31, 1997, accounts payable and accrued expenses include a
note payable to Mr. Jack F. Scalo in the amount of $49,000. Mr. Jack F. Scalo
will become a director of INCOM following consummation of the Offerings.

M. J. Dalsin leases facilities from Dalsin Development Company, a company
that is owned by Mr. Dalsin. The leases expire on December 31, 1999. Rent paid
under these related-party leases was approximately $112,000, $110,000 and
$106,000 for the years ended December 31, 1997, 1996 and 1995, respectively. M.
J. Dalsin is a guarantor on debt owed by Dalsin Development Company on a
building that is leased to M. J. Dalsin. This guarantee will be released upon
consummation of the Offerings. At December 31, 1997, the balance on the debt was
$124,000. Mr. Dalsin will become a director of INCOM upon consummation of the
Offerings.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to beneficial
ownership of the Company's Common Stock, after giving effect to the issuance of
shares of Common Stock in connection with the Acquisitions and after giving
effect to the Offerings, by (i) all persons known to the Company to be the
beneficial owner of 5% or more thereof, (ii) each director and nominee for
director, (iii) each executive officer and (iv) all executive officers and
directors as a group. Unless otherwise indicated, the address of each such
person is c/o INCOM Roofing Services, Inc., 515 Post Oak Blvd., Suite 450,
Houston, Texas 77027. All persons listed have sole voting and investment power
with respect to their shares unless otherwise indicated.

BENEFICIAL OWNERSHIP
AFTER OFFERINGS
----------------------
SHARES PERCENT
---------- --------
Sterling City Capital, LLC(a)........ 1,448,523 8.9%
C. Byron Snyder(a)................... 1,448,523 8.9
John M. Kafka........................ 546,232 3.4
William W. Taylor.................... 900,769 5.5
Robert S. Zlotnik.................... 100,000 *
Bruce Bubenzer....................... 419,070 2.6
Michael J. Dalsin.................... 391,763 2.4
Paul V. Gordon....................... 1,650,440 10.1
Dan B. Hand.......................... 849,501 5.2
Philip A. McKinney................... 151,746 *
Jack F. Scalo........................ 240,424 1.5
Edmund P. Djerejian.................. -- *
Thomas E. White, Jr.................. -- *
Jim P. Wise.......................... -- *
---------- --------
All executive officers and directors
as a group (13 persons)(b)......... 6,698,468 41.1%

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

* Less than one percent.

(a) All of these 1,448,523 shares are shares of Restricted Common Stock owned by
Sterling City Capital, LLC, the equity interests of which are owned 52% by
Mr. Snyder and 24% by each of two trusts for the benefit of Mr. Snyder's
children. Mr. Snyder disclaims beneficial ownership of shares of Restricted
Common Stock held by the trusts for the benefit of his children. The holders
of Restricted Common Stock, voting together as a single class, are entitled
to elect one member of the Company's Board of Directors and to two-thirds of
one vote for each share held on all other matters on which they are entitled
to vote. Holders of Restricted Common Stock are not entitled to vote on the
election of any other directors. Such shares may be converted to Common
Stock in certain circumstances. See "Description of Capital Stock."

(b) Includes 1,448,523 shares of Restricted Common Stock described in Note (a)
above.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $0.01 per share, 5,000,000 shares of Restricted Common
Stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par
value $0.01 per share. After giving effect to the Acquisitions, there will be
10,303,566 shares of Common Stock outstanding, including 1,479,523 shares of
Restricted Common Stock and no shares of preferred stock outstanding. After the
closing of the Offerings, 16,303,566 shares of Common Stock and Restricted
Common Stock will be issued and outstanding, assuming no exercise of the
Underwriters' over-allotment option. The following summary of the terms and
provisions of the Company's capital stock does not purport to be complete and is
qualified in its entirety by reference to the Company's

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Amended and Restated Certificate of Incorporation and Bylaws, which have been
filed as exhibits to the Company's registration statement, of which this
Prospectus is a part, and applicable law.

COMMON STOCK AND RESTRICTED 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. Such
holders are not entitled to vote cumulatively for the election of directors.
Holders of a majority of the shares of Common Stock entitled to vote in any
election of directors may elect all of the directors standing for election by
the holders of Common Stock.

The holders of Restricted Common Stock, voting together as a single class,
are entitled to elect one member of the Company's Board of Directors and to
two-thirds of one vote for each share held on all other matters on which they
are entitled to vote. Holders of Restricted Common Stock are not entitled to
vote on the election of any other directors. Only the holders of the Restricted
Common Stock may remove the director such holders are entitled to elect.

Subject to the rights of any then outstanding shares of preferred stock,
holders of Common Stock and Restricted Common Stock are together entitled to
participate pro rata in such dividends as may be declared in the discretion of
the Board of Directors out of funds legally available therefor. Holders of
Common Stock and Restricted Common Stock together 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. Holders of Common Stock and holders of Restricted 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. Shares of Restricted
Common Stock are not subject to any redemption provisions and are convertible
into Common Stock as described below. All outstanding shares of Common Stock and
Restricted Common Stock are, and the shares of Common Stock to be issued
pursuant to the Offerings and the Acquisitions will be, upon payment therefor,
fully paid and non-assessable.

Each share of Restricted Common Stock will automatically convert into one
share of Common Stock (i) in the event of a disposition of such share of
Restricted Common Stock by the holder thereof (other than a distribution by a
holder to its partners or beneficial owners, or a transfer to a related party of
such holder (as defined in Sections 267, 707, 318 and/or 4946 of the Internal
Revenue Code of 1986, as amended)), (ii) in the event any person or "group"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended) acquires beneficial ownership of 15% or more of the total
number of outstanding shares of Common Stock or (iii) in the event any person or
"group" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) offers to acquire 15% or more of the total
number of outstanding shares of Common Stock. After January 1, 2001, the Board
of Directors may elect, at its option and without the approval of the holders of
the Restricted Common Stock or any other class of stock of the Company, to
convert any remaining shares of Restricted Common Stock into shares of Common
Stock, provided that 80% or more of the outstanding shares of Restricted Common
Stock outstanding at the closing of the Offerings has been previously converted
into shares of Common Stock pursuant to the preceding sentence.

The Company intends to make application to list the Common Stock on the New
York Stock Exchange under the symbol "ICR." The Restricted Common Stock will
not be listed on any exchange.

PREFERRED STOCK

The preferred stock may be issued from time to time by the Board of
Directors as shares of one or more classes or series. Subject to the provisions
of the Company's Amended and Restated 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

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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
class or 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 of any class or series.

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 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 at a premium or may otherwise adversely affect the
market price of the Common Stock.

STATUTORY BUSINESS COMBINATION PROVISION

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Section 203 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% 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.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by including in its certificate of incorporation or bylaws by action
of its stockholders a provision to exempt itself from coverage. The Company has
not adopted such an amendment to its Amended and Restated Certificate of
Incorporation or Bylaws.

LIMITATION ON DIRECTORS' LIABILITIES

Pursuant to the Company's Amended and Restated Certificate of Incorporation
and under Delaware law, 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 the duty of loyalty, for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, for dividend payments or stock repurchases illegal under
Delaware law or any transaction in which a director has derived an improper
personal benefit. The Company has entered into indemnification agreements with
its directors and executive officers which indemnify such person to the fullest
extent permitted by its Amended and Restated Certificate of Incorporation, its
Bylaws and the Delaware General Corporation Law. The Company also intends to
obtain directors' and officers' liability insurance. The foregoing provisions
may extend to liabilities arising due to violations of the federal securities
laws. It is the position of the Securities and Exchange Commission (the
"Commission") that indemnification for liabilities under the Securities Act is
against public policy and is, therefore, unenforceable.

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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS

The Company's Amended and Restated Certificate of Incorporation and Bylaws
include provisions that may have the effect of discouraging, delaying or
preventing a change in control of the Company or an unsolicited acquisition
proposal that a stockholder might consider favorable, including a proposal that
might result in the payment of a premium over the market price for the shares
held by stockholders. These provisions are summarized in the following
paragraphs.

CLASSIFIED BOARD OF DIRECTORS. The Amended and Restated Certificate of
Incorporation provides for the Board of Directors to be divided into three
classes of directors serving staggered three-year terms. The classification of
the Board of Directors has the effect of requiring at least two annual
stockholder meetings, instead of one, to replace a majority of members of the
Board of Directors.

SUPERMAJORITY VOTING. The Amended and Restated Certificate of
Incorporation requires the approval of the holders of at least 75% of the then
outstanding shares of the Company's capital stock entitled to vote thereon and
the approval of the holders of at least 75% of the then outstanding shares of
each class of stock of the Company voting separately as a class on, among other
things, certain amendments to the Amended and Restated Certificate of
Incorporation. The Board of Directors may amend, alter, change or repeal any
bylaws without the assent or vote of the stockholders, but any such bylaws may
be altered, amended or repealed upon the affirmative vote of at least two-thirds
of the stock entitled to vote thereon. A director of the Company may be removed
only for cause and only upon the affirmative vote of at least two-thirds of the
stock entitled to vote thereon.

AUTHORIZED BUT UNISSUED OR UNDESIGNATED CAPITAL STOCK. The Company's
authorized capital stock will consist of 100,000,000 shares of Common Stock,
5,000,000 shares of Restricted Common Stock and 10,000,000 shares of preferred
stock. After the Offerings, the Company will have outstanding 16,303,566 shares
of Common Stock and Restricted Common Stock (assuming the Underwriters'
over-allotment options are not exercised). The authorized but unissued (and in
the case of preferred stock, undesignated) stock may be issued by the Board of
Directors in one or more transactions. In this regard, the Company's Amended and
Restated Certificate of Incorporation grants the Board of Directors broad power
to establish the rights and preferences of authorized and unissued preferred
stock. The issuance of shares of preferred stock pursuant to the Board of
Directors' authority described above could decrease the amount of earnings and
assets available for distribution to holders of Common Stock and adversely
affect the rights and powers, including voting rights, of such holders and may
also have the effect of delaying, deferring or preventing a change in control of
the Company. The Board of Directors does not currently intend to seek
stockholder approval prior to any issuance of preferred stock, unless otherwise
required by law.

SPECIAL MEETING OF STOCKHOLDERS. The Amended and Restated Certificate of
Incorporation and Bylaws provide that special meetings of stockholders of the
Company may only be called by the Chairman of the Board of Directors upon the
written request of the Board of Directors pursuant to a resolution approved by a
majority of the Board of Directors.

STOCKHOLDER ACTION BY WRITTEN CONSENT. The Amended and Restated
Certificate of Incorporation and Bylaws generally provide that any action
required or permitted by the stockholders of the Company must be effected at a
duly called annual or special meeting of the stockholders and may not be
effected by any written consent of the stockholders.

NOTICE PROCEDURES. The Bylaws establish advance notice procedures with
regard to stockholder proposals relating to the nomination of candidates for
election as director, the removal of directors and amendments to the Amended and
Restated Certificate of Incorporation or Bylaws to be brought before annual
meetings of stockholders of the Company. These procedures provide that notice of
such stockholder proposals must be timely given in writing to the Secretary of
the Company prior to the annual meeting. Generally, to be timely, notice must be
received at the principal executive offices of the Company not less than 80 days
prior to an annual meeting (or if fewer than 90 days' notice or prior public
disclosure of the date of the annual meeting is given or made by the Company,
not later than the tenth day following the date on which the notice of the date
of the annual meeting was mailed or such public disclosure was made). The

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notice must contain certain information specified in the Bylaws, including a
brief description of the business desired to be brought before the annual
meeting and certain information concerning the stockholder submitting the
proposal.

CHARTER PROVISIONS RELATING TO RIGHTS PLAN. The Amended and Restated
Certificate of Incorporation authorizes the Board of Directors of the Company to
create and issue rights (the "Rights") entitling the holders thereof to
purchase from the Company shares of capital stock or other securities. The times
at which, and the terms upon which, the Rights are to be issued may be
determined by the Board of Directors and set forth in the contracts or
instruments that evidence the Rights. The authority of the Board of Directors
with respect to the Rights includes, but is not limited to, the determination of
(i) the initial purchase price per share of the capital stock or other
securities of the Company to be purchased upon exercise of the Rights, (ii)
provisions relating to the times at which and the circumstances under which the
Rights may be exercised or sold or otherwise transferred, either together with
or separately from, any other securities of the Company, (iii) antidilutive
provisions which adjust the number or exercise price of the Rights or amount or
nature of the securities or other property receivable upon exercise of the
Rights, (iv) provisions which deny the holder of a specified percentage of the
outstanding securities of the Company the right to exercise the Rights and/or
cause the Rights held by such holder to become void, (v) provisions which permit
the Company to redeem the Rights and (vi) the appointment of a rights agent with
respect to the Rights. If authorized by the Board of Directors, the Rights would
be intended to protect the Company's stockholders from certain non-negotiated
takeover attempts which present the risk of a change of control on terms which
may be less favorable to the Company's stockholder than would be available in a
transaction negotiated with and approved by the Board of Directors. The Board of
Directors believes that the interests of the stockholders generally are best
served if any acquisition of the Company or a substantial percentage of the
Company's Common Stock results from arm's-length negotiations and reflects the
Board of Directors' careful consideration of the proposed terms of a
transaction. In particular, the Rights if issued would be intended to help (i)
reduce the risk of coercive two-tiered, front-end loaded or partial offers which
may not offer fair value to all stockholders of the Company, (ii) deter market
accumulators who through open market or private purchases may achieve a position
of substantial influence or control without paying to stockholders a fair
control premium, and (iii) deter market accumulators who are simply interested
in putting the Company "in play."

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is .

SHARES ELIGIBLE FOR FUTURE SALE

The market price of the Common Stock could be adversely affected by the
sale of substantial amounts of Common Stock in the public market. All of the
6,000,000 shares sold in the Offerings, except for shares acquired by affiliates
of the Company, will be freely tradeable. Simultaneously with the closing of the
Offerings, the stockholders of the Founding Companies will receive, in the
aggregate, 7,543,031 shares of Common Stock as a portion of the consideration
for their businesses. In addition, certain additional shares may be issued to
the stockholders of two of the Founding Companies if certain earnings thresholds
are satisfied after the Offerings. Certain other stockholders of the Company
will hold, in the aggregate, an additional 1,281,012 shares of Common Stock and
1,479,523 shares of Restricted Common Stock. None of these 10,303,566 shares was
issued in a transaction registered under the Securities Act, and, accordingly,
such shares may not be sold except in transactions registered under the
Securities Act or pursuant to an exemption from registration, including the
exemptions contained in Rules 144 and 701 under the Securities Act.

In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated, who has beneficially owned his or her shares for at
least one year but not more than two years, or a person who may be deemed an
"affiliate" of the Company who has beneficially owned shares for at least one
year, would be entitled to sell within any three month period a number of shares
that does not exceed the greater of 1% of the then outstanding shares of the
Common Stock or the average weekly trading volume of the

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Common Stock 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. A person who is
not deemed to have been an affiliate of the Company at any time for 90 days
preceding a sale and who has beneficially owned his shares for at least two
years would be entitled to sell such shares under Rule 144 without regard to the
volume limitations, manner of sale provisions, notice requirements or the
availability of current public information about the Company.

In general, under Rule 701 under the Securities Act, any employee, officer,
or director of or consultant to the Company who purchased his or her shares
pursuant to a written compensatory plan or contract is entitled to rely on the
resale provisions of Rule 701. Such provisions permit nonaffiliates to sell
their Rule 701 shares without having to comply with the public information,
holding period, volume limitation, or notice provisions of Rule 144 and permit
affiliates to sell their Rule 701 shares without having to comply with the Rule
144 holding period restrictions, in each case commencing 90 days after the
commencement of the Offerings.

The Company will authorize the issuance of options to purchase shares of
its Common Stock in an amount equal to 10% of the outstanding shares of Common
Stock in accordance with the terms of the 1998 Stock Plan. Options to purchase
250,000 shares will be granted to management of INCOM under the 1998 Stock Plan,
and it is anticipated that options to purchase approximately 1,380,357 shares of
Common Stock will be granted upon closing of the Offerings to certain other
officers, directors and former stockholders of the Founding Companies. 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 1998 Stock Plan. As a result, such shares will be eligible for
resale in the public market.

The Company currently intends to file a registration statement covering
6,000,000 additional shares of Common Stock under the Securities Act for its use
in connection with future acquisitions. These shares generally will be freely
tradeable after their issuance by persons not affiliated with the Company unless
the Company contractually restricts their resale.

The Company and each of its directors and executive officers have agreed
not to (i) directly or indirectly, offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock or file any registration statement
under the Securities Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, for a period of 180 days from the date of this
Prospectus without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated on behalf of the Underwriters, except (i) shares issued in
connection with acquisitions, provided that (except with respect to shares
issued in transactions in which the issuance or resale of such shares is not
registered under the Securities Act), the recipients of such shares agree to be
bound by similar restrictions, (ii) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to the Company's benefit plans
described herein or (iii) with respect to directors and executive officers,
certain pledges of securities. In addition, the current stockholders of the
Company and the owners of the Founding Companies have agreed with the Company
not to sell, contract to sell or otherwise dispose of any shares of Common Stock
owned as of the consummation of the Acquisitions, including shares received as
consideration in the Acquisitions, for a period of two years following receipt
thereof, subject to the rights of such holders to exercise their registration
rights described below.

Prior to the Offerings there has been no established trading market for the
Common Stock, and no predictions can be made as to the effect that sales of
Common Stock under Rule 144, pursuant to a registration statement, or otherwise,
or the availability of shares of Common Stock for sale, will have on the market
price prevailing from time to time. Sales of substantial amounts of Common Stock
in the public

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market, or the perception that such sales could occur, could depress the
prevailing market price. Such sales may also make it more difficult for the
Company to issue or sell equity securities or equity-related securities in the
future at a time and price that it deems appropriate. See "Risk
Factors -- Shares Eligible for Future Sale."

Former stockholders of the Founding Companies, certain executive officers
and directors are entitled to certain rights with respect to the registration of
their shares of Common Stock under the Securities Act. In the aggregate, these
groups will hold 10,303,566 shares of Common Stock and Restricted Common Stock.
If the Company proposes to register any of its securities under the Securities
Act, such stockholders are entitled to notice of such registration and are
entitled to include, at the Company's expense, all or a portion of their shares
therein, subject to certain conditions. These registration rights will not apply
to the registration statement the Company intends to file for use in future
acquisitions or with respect to employee benefit plans.

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a general summary of certain United States federal income
and estate tax consequences expected to result under current law from the
purchase, ownership and taxable disposition of Common Stock by Non-U.S. Holders
of Common Stock. A "Non-U.S. Holder" is any person or entity other than (i) a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any state thereof, (iii) an estate, the income of which is subject to United
States federal income taxation regardless of its source or (iv) a trust whose
administration is subject to the primary supervision of a United States court
and which has one or more United States fiduciaries who have the authority to
control all substantial decisions of the trust. This summary is for general
information only and does not address all of the United States federal income
and estate tax considerations that may be relevant to Non-U.S. Holders in light
of their particular circumstances or to Non-U.S. Holders that may be subject to
special treatment under United States federal income tax laws. Furthermore, this
summary does not discuss any aspect of state, local or foreign taxation. This
summary is based on current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations, judicial opinions, published
positions of the United States Internal Revenue Service and other applicable
authorities, all of which are subject to change, possibly with retroactive
effect. Prospective purchasers of Common Stock are advised to consult their tax
advisors regarding the federal, state and local and foreign income and other tax
consequences of acquiring, holding and disposing of Common Stock.

DIVIDENDS

Dividends paid to a Non-U.S. Holder on shares of Common Stock will be
subject to withholding of United States federal income tax at a 30 percent rate
(or such lower rate as may be provided by an applicable income tax treaty
between the United States and a foreign country) unless the dividends are
effectively connected with the conduct of a trade or business of the Non-U.S.
Holder within the United States (or, in the case of an applicable tax treaty,
are attributable to a United States permanent establishment maintained by such
Non-U.S. Holder). Dividends that are effectively connected with the conduct of a
trade or business within the United States (or are attributable to a United
States permanent establishment) will be subject to United States federal income
tax on a net income basis (that is, after allowance for applicable deductions)
which is not collected by withholding provided the Non-U.S. Holder files the
appropriate certification with the Company or its agent. Any such effectively
connected dividends received by a foreign corporation may, under certain
circumstances, be subject to an additional "branch profits tax" at a 30
percent rate or such lower rate as may be specified by an applicable income tax
treaty.

Under United States Treasury Regulations currently in effect, dividends
paid to an address outside the United States will be presumed to be paid to a
resident of the country of address (unless the payor has knowledge to the
contrary) for purposes of the withholding tax rules discussed above and for
purposes of determining the applicability of a tax treaty rate. Under
recently-issued United States Treasury Regulations that are effective for
payments made after December 31, 1999 ("Final Regulations"), a Non-U.S. Holder
of

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Common Stock who wishes to claim the benefit of a tax treaty rate would be
required to satisfy applicable certification requirements. In addition, under
such Final Regulations, in the case of Common Stock held by a foreign
partnership, (i) the certification requirement generally would be applied to the
partners of the partnership, and (ii) the partnership would be required to
provide certain information, including a United States taxpayer identification
number.

A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
United States withholding tax pursuant to a tax treaty may obtain a refund of
any excess amounts currently withheld by filing an appropriate claim for refund
with the Internal Revenue Service.

SALE OR DISPOSITION OF COMMON STOCK

A Non-U.S. Holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of Common stock so long as (i) the gain is not effectively connected
with the conduct of a trade or business of the Non-U.S. Holder in the United
States; (ii) in the case of a Non-U.S. Holder who is an individual and holds the
Common Stock as a capital asset, either (a) such holder is not present in the
United States for 183 or more days in the taxable year of the disposition or (b)
such holder does not have a "tax home" in the United States for United States
federal income tax purposes nor does such holder maintain an office or other
fixed place of business in the United States to which such gain is attributable;
(iii) such Non-U.S. Holder is not subject to tax pursuant to the provisions of
United States federal income tax law applicable to certain United States
expatriates or (iv) the Common Stock continues to be "regularly traded on an
established securities market" for United States federal income tax purposes
and the Non-U.S. Holder has not held, directly or indirectly, at any time during
the five-year period ending on the date of disposition (or, if shorter, the
Non-U.S. Holder's holding period) more than 5 percent of the outstanding Common
Stock.

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced by an applicable tax treaty. Copies of these
information returns may also be made available under the provisions of a treaty
or information exchange agreement with the tax authorities in the country in
which the Non-U.S. Holder resides. Under current law, U.S. backup withholding
tax (which is a withholding tax currently imposed at the rate of 31 percent on
certain payments to persons who fail to furnish the information required under
U.S. information reporting requirements) generally will not apply to dividends
paid on Common Stock to a Non-U.S. Holder at an address outside the United
States unless the payor has knowledge that the payee is a United States person.
However, under the Final Regulations described above, dividends paid on Common
Stock after December 31, 1999 may be subject to backup withholding unless
applicable certification requirements are satisfied.

Payments of the proceeds from a sale of Common Stock to or through a U.S.
office of a broker will be subject to information reporting and backup
withholding unless the owner certifies as to its status as a Non-U.S. Holder
under penalties of perjury or otherwise establishes an exemption. Payment of the
proceeds from a sale of Common Stock to or through a non-U.S. office of a broker
generally will not be subject to information reporting or backup withholding;
however, if such broker is (i) a United States person, (ii) a "controlled
foreign corporation," or (iii) a foreign person that derives 50 percent or more
of its gross income from the conduct of a trade or business in the United
States, such payment will be subject to information reporting (but currently not
backup withholding) unless such broker has documentary evidence in its records
that the owner is a Non-U.S. Holder and certain other conditions are met or the
owner otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules will be credited
against the non-U.S. Holder's federal income tax liability, if any, or refunded,
provided the required information is furnished to the Internal Revenue Service.

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ESTATE TAX

The fair market value of Common Stock owned (or treated as owned) by an
individual at the time of his death will be includible in his gross estate for
U.S. federal estate tax purposes and thus may be subject to U.S. estate tax,
even though the individual at the time of death is neither a citizen of nor
domiciled in the United States, unless an applicable estate tax treaty provides
otherwise.

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UNDERWRITING

Subject to the terms and conditions set forth in the U.S. purchase
agreement (the "U.S. Purchase Agreement") among the Company, the Selling
Stockholders and each of the underwriters named below (the "U.S.
Underwriters"), the Company has agreed to sell to each of the U.S.
Underwriters, and each of the U.S. Underwriters, for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated, NationsBanc Montgomery Securities LLC, SunTrust
Equitable Securities Corporation and Sanders Morris Mundy Inc. are acting as
representatives (the "U.S. Representatives"), has severally agreed to
purchase, the number of shares of Common Stock set forth below opposite their
respective names.

NUMBER OF
U.S. UNDERWRITER SHARES
- ------------------------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............
NationsBanc Montgomery Securities
LLC................................
SunTrust Equitable Securities
Corporation........................
Sanders Morris Mundy Inc.............

--------------
Total................... 4,800,000
==============

The Company has also entered into an international purchase agreement (the
"International Purchase Agreement") with certain other underwriters outside
the United States and Canada (the "International Managers" and, together with
the U.S. Underwriters, the "Underwriters"), for whom Merrill Lynch
International, NationsBanc Montgomery Securities LLC, SunTrust Equitable
Securities Corporation and Sanders Morris Mundy Inc. are acting as international
representatives (the "International Representatives" and, together with the
U.S. Representatives, the "Representatives"). Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 4,800,000 shares of Common Stock to the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, the Company has agreed to sell to the
International Managers, and the International Managers severally have agreed to
purchase from the Company, an aggregate of 1,200,000 shares of Common Stock. The
public offering price per share of Common Stock and the total underwriting
discount per share are identical under the U.S. Purchase Agreement and the
International Purchase Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement,
the several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such Purchase Agreement if any of such shares are purchased. Under certain
circumstances, the commitments of non-defaulting U.S. Underwriters or
International Managers (as the case may be) may be increased as set forth in the
U.S. Purchase Agreement and the International Purchase Agreement, respectively.
The closing with respect to the sale of shares of Common Stock to be purchased
by the U.S. Underwriters and the International Managers are conditioned upon one
another.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Under the terms of the Intersyndicate
Agreement, the Underwriters are permitted to sell shares of Common Stock to each
other

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<PAGE>
for the purposes of resale at the public offering price, less an amount not
greater than the selling concession. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and any dealer to whom they sell shares of
Common Stock will not offer to sell or sell shares of Common Stock to persons
who are United States or Canadian persons or to persons they believe intend to
resell to persons who are non-United States or non-Canadian persons, and the
International Managers and any dealer to whom they sell shares of Common Stock
will not offer to sell or sell shares of Common Stock to persons who are United
States and Canadian persons or to persons they believe intend to resell to
United States or Canadian persons, except, in each case, for transactions
pursuant to the Intersyndicate Agreement.

The U.S. Representatives have advised the Company that the U.S.
Underwriters propose initially to offer the shares of Common Stock offered
hereby to the public at the initial public offering price set forth on the cover
page of this Prospectus, and to certain dealers at such price less a concession
not in excess of $ per share. The U.S. Underwriters may allow, and such
dealers may reallow, a discount not in excess of $ per share on sales to
certain other dealers. After the Offerings, the initial public offering price,
concession and discount may be changed.

The Company has granted the U.S. Underwriters an option, exercisable by the
Lead Manager for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 720,000 additional shares of Common Stock at the initial public
offering price set forth on the cover page hereof, less the underwriting
discount. The U.S. Underwriters may exercise this option to cover
overallotments, if any, made on the sale of the shares of Common Stock offered
hereby. If the U.S. Underwriters exercise this option, each U.S. Underwriter
will have a firm commitment, subject to certain conditions, to purchase
approximately the same percentage thereof which the number of shares of Common
Stock to be purchased by it shown in the foregoing table bears to the 4,800,000
shares of Common Stock initially offered hereby. The Company has also granted an
option to the International Managers, which expires 30 days after the date of
this Prospectus, to purchase up to 180,000 additional shares of Common Stock to
cover over-allotments, if any, on terms similar to those granted to the U.S.
Underwriters.

The Company and each of its directors and executive officers have agreed
not to (i) directly or indirectly, offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock or file any registration statement
under the Securities Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, for a period of 180 days from the date of this
Prospectus without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated on behalf of the Underwriters, except for (i) shares issued
in connection with acquisitions, provided that (except with respect to shares
issued in transactions in which the issuance or resale of such shares is not
registered under the Securities Act), the recipients of such shares agree to be
bound by similar restrictions, (ii) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to the Company's benefit plans
described herein or (iii) with respect to directors and executive officers,
certain pledges of securities.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act or to contribute to
payments the Underwriters may be required to make in respect thereof.

Until the distribution of the Common Stock is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Common Stock. As an exception to these
rules, the U.S. Underwriters are permitted to engage in certain transactions
that stabilize the price of the Common Stock. Such transactions consist of bids
or purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock.

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If the Underwriters create a short position in the Common Stock in
connection with the Offerings, (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the U.S. Underwriters
may reduce that short position by purchasing Common Stock in the open market.
The U.S. Underwriters may also elect to reduce any short position by exercising
all or part of the over-allotment option described above.

The U.S. Underwriters may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the U.S. Underwriters purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offerings.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an affect on the price of a security to the extent that it were
to discourage resales of the security.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the U.S.
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

The Company intends to make application to list the Common Stock on the
NYSE under the symbol "ICR."

The U.S. Underwriters have reserved for sale, at the initial public
offering price, up to 600,000 shares of Common Stock for certain employees,
directors and business associates of, and certain other persons designated by,
the Company who have expressed an interest in purchasing such shares of Common
Stock. The number of shares available for sale to the general public in the
Offerings will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares not so purchased will be offered to the general
public on the same basis as other shares offered hereby.

Prior to the Offerings, there has been no established trading market for
the shares of Common Stock. The initial public offering price for the Common
Stock offered hereby has been determined by negotiations between the Company and
the Underwriters. Among the factors considered in making such determination were
the history of and the prospects for the industry in which the Company competes,
an assessment of the Company's management, the past and present operations of
the Founding Companies and the Company, the historical results of operations of
the Founding Companies and the Company and the trend of its revenues and
earnings, the prospects for future earnings of the Company, the general
condition of prices of similar securities of generally comparable companies and
other relevant factors. There can be no assurance that an active trading market
will develop for the Common Stock or that the Common Stock will trade in the
public market subsequent to the Offerings at or above the initial public
offering price.

The Underwriters have informed the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.

LEGAL MATTERS

Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Andrews & Kurth L.L.P., Houston, Texas,
and for the Underwriters by Vinson & Elkins L.L.P., Houston, Texas.

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EXPERTS

The financial statements included in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports for the indicated companies
with the dates specified below with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports:

INCOM Roofing Services, Inc.......... July 20, 1998
Beta Construction Company and
Affiliate.......................... June 18, 1998
D. C. Taylor Co...................... June 5, 1998
Seyforth Roofing Company, Inc. and
Affiliate.......................... June 22, 1998
Brazos Roofing International of South
Dakota, Inc. and Affiliate......... June 22, 1998
Nu-Tec Roofing Contractors, Inc...... June 5, 1998
Evans Service Company, Inc. and
Subsidiaries....................... June 4, 1998
Burns & Scalo Roofing Company, Inc.,
Cuddy Roofing Company, Inc. and
Scalo, Inc......................... June 5, 1998
Chamberlin Waterproofing & Roofing
Systems, Inc....................... June 11, 1998
Boone Brothers Roofing, Inc.......... June 5, 1998
Sutter Roofing Company of Florida and
Sutter Roofing Company of SW
Florida............................ June 5, 1998
M. J. Dalsin Company, Inc. and M. J.
Dalsin Company of South Dakota,
Inc................................ June 5, 1998

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments, schedules and exhibits thereto the "Registration Statement") under
the Securities Act with respect to the Common Stock offered hereby. This
Prospectus, which is included as part of the Registration Statement, does not
contain all the information contained in the Registration Statement, certain
portions of which have been omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement and
the exhibits and schedules thereto. Statements made in the Prospectus as to the
contents of any contract, agreement or other document are not necessarily
complete; with respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to the exhibit
for a more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto may be inspected, without charge, at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at Citicorp Center, 500 West Madison Street, Room 1400,
Chicago, IL 60661, and 7 World Trade Center, Suite 1300, New York, NY 10048 or
on the Internet at http://www.sec.gov. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements examined by an independent public
accounting firm for each fiscal year.

<PAGE>
INDEX TO FINANCIAL STATEMENTS

PAGE
-----
INCOM ROOFING SERVICES, INC. UNAUDITED
PRO FORMA
COMBINED FINANCIAL STATEMENTS
Introduction to Unaudited Pro Forma
Combined Financial Statements..... F-3
Unaudited Pro Forma Combined
Balance Sheet..................... F-4
Unaudited Pro Forma Combined
Statement of Operations........... F-5
Notes to Unaudited Pro Forma
Combined Financial Statements..... F-8
INCOM ROOFING SERVICES, INC.
Report of Independent Public
Accountants....................... F-13
Balance Sheet...................... F-14
Statement of Operations............ F-15
Statement of Cash Flows............ F-16
Statement of Stockholders'
Equity............................ F-17
Notes to Financial Statements...... F-18
FOUNDING COMPANIES
D.C. TAYLOR CO.
Report of Independent Public
Accountants....................... F-21
Balance Sheets..................... F-22
Statements of Operations and
Retained Earnings................. F-23
Statements of Cash Flows........... F-24
Notes to Financial Statements...... F-25
SEYFORTH ROOFING CO. INC. AND AFFILIATE
Report of Independent Public
Accountants....................... F-34
Combined Balance Sheets............ F-35
Combined Statements of
Operations........................ F-36
Combined Statements of Cash
Flows............................. F-37
Combined Statements of
Shareholder's Equity.............. F-38
Notes to Combined Financial
Statements........................ F-39
NU-TEC ROOFING CONTRACTORS, INC.
Report of Independent Public
Accountants....................... F-47
Balance Sheets..................... F-48
Statements of Operations........... F-49
Statements of Cash Flows........... F-50
Statements of Stockholders'
Equity............................ F-51
Notes to Financial Statements...... F-52
BETA CONSTRUCTION COMPANY
Report of Independent Public
Accountants....................... F-60
Combined Balance Sheets............ F-61
Combined Statements of
Operations........................ F-62
Combined Statements of Cash
Flows............................. F-63
Combined Statements of
Stockholders' Equity.............. F-64
Notes to Combined Financial
Statements........................ F-65

F-1
<PAGE>

PAGE
-----
EVANS SERVICE COMPANY, INC. AND
SUBSIDIARIES
Report of Independent Public
Accountants....................... F-71
Consolidated Balance Sheets........ F-72
Consolidated Statements of
Operations........................ F-73
Consolidated Statements of Cash
Flows............................. F-74
Consolidated Statements of
Stockholders' Equity.............. F-75
Notes to Consolidated Financial
Statements........................ F-76
BRAZOS ROOFING INTERNATIONAL OF SOUTH
DAKOTA, INC.
Report of Independent Public
Accountants....................... F-83
Combined Balance Sheet............. F-84
Combined Statements of
Operations........................ F-85
Combined Statements of Cash
Flows............................. F-86
Combined Statements of
Shareholders' Equity.............. F-87
Notes to Combined Financial
Statements........................ F-88
CHAMBERLIN WATERPROOFING & ROOFING
SYSTEMS, INC.
Report of Independent Public
Accountants....................... F-95
Balance Sheets..................... F-96
Statements of Operations........... F-97
Statements of Cash Flows........... F-98
Statements of Stockholders'
Equity............................ F-99
Notes to Financial Statements...... F-100
BURNS & SCALO ROOFING COMPANY, INC.
Report of Independent Public
Accountants....................... F-106
Combined Balance Sheets............ F-107
Combined Statements of
Operations........................ F-108
Combined Statements of Cash
Flows............................. F-109
Combined Statements of
Stockholders' Equity.............. F-110
Notes to Combined Financial
Statements........................ F-111
BOONE BROTHERS ROOFING, INC.
Report of Independent Public
Accountants....................... F-117
Balance Sheets..................... F-118
Statements of Operations........... F-119
Statements of Cash Flows........... F-120
Statements of Stockholders'
Equity............................ F-121
Notes to Financial Statements...... F-122

SUTTER ROOFING COMPANY OF FLORIDA
Report of Independent Public
Accountants....................... F-129
Combined Balance Sheets............ F-130
Combined Statements of
Operations........................ F-131
Combined Statements of Cash
Flows............................. F-132
Combined Statements of
Stockholders' Equity.............. F-133
Notes to Combined Financial
Statements........................ F-134
M.J. DALSIN COMPANY, INC.
Report of Independent Public
Accountants....................... F-140
Combined Balance Sheets............ F-141
Combined Statements of
Operations........................ F-142
Combined Statements of Cash
Flows............................. F-143
Combined Statements of
Stockholders' Equity.............. F-144
Notes to Combined Financial
Statements........................ F-145

F-2
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to (a) the acquisitions by INCOM Roofing Services, Inc. (INCOM), of the
outstanding capital stock and other equity interests of D. C. Taylor, Seyforth,
Nu-Tec, Beta, Evans, Brazos, Chamberlin, Burns & Scalo, Boone, Sutter, M. J.
Dalsin, Kelley Brothers (together, the Founding Companies), and related
transactions, and (b) INCOM's initial public offerings in the United States and
Canada and outside the United States and Canada (the Offerings). The
acquisitions (the Acquisitions) will occur simultaneously with the closing of
the Offerings and will be accounted for using the purchase method of accounting.
INCOM has been reflected as the accounting acquirer for financial statement
presentation purposes.

The unaudited pro forma combined balance sheet gives effect to the
Acquisitions and related transactions, and the Offerings, as if they had
occurred on March 31, 1998. The unaudited pro forma combined statements of
operations give effect to these transactions as if they had occurred at the
beginning of the earliest period presented.

INCOM has preliminarily analyzed the savings that it expects to be realized
from reductions in salaries, bonuses and certain benefits, including lease
payments to the owners. To the extent the owners of the Founding Companies have
contractually agreed to prospective changes in salary, bonuses, benefits and
lease payments, these changes have been reflected in the unaudited pro forma
combined statements of operations. With respect to other potential cost savings,
INCOM has not and cannot quantify these savings until completion of the
Acquisitions. It is anticipated that these savings will be offset by costs
related to INCOM's new corporate management and by the costs associated with
being a public company. However, because these costs cannot be accurately
quantified at this time, they have not been included in the pro forma combined
financial information of INCOM.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions that INCOM management deems appropriate and
may be revised as additional information becomes available. The pro forma
financial data do not purport to represent what INCOM's combined financial
position or results of operations would actually have been if such transactions
in fact had occurred on those dates and are not necessarily representative of
INCOM's combined 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 historical financial statements and notes
thereto included elsewhere in this Prospectus. See also "Risk Factors"
included elsewhere herein.

F-3
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BURNS &
ASSETS D.C. TAYLOR SEYFORTH NU-TEC BETA EVANS BRAZOS CHAMBERLIN SCALO
------------ --------- ------- ------- ------ ------- ---------- --------
CURRENT ASSETS:
Cash and cash equivalents........... $ 49 $ 553 $ 9 $ 1,382 $ 14 $ 389 $1,206 $ 32
Accounts receivable --
Trade, net...................... 5,038 3,761 4,256 4,192 3,347 1,130 2,038 1,814
Retainage....................... 491 815 1,333 1,414 777 7 544 262
Other receivables............... 439 16 137 349 174 104 4 --
Costs and estimated earnings in
excess of billings on
uncompleted contracts........... 557 950 686 498 350 312 446 61
Inventories....................... 443 134 445 633 315 -- -- 409
Prepaid expenses and other current
assets.......................... 802 138 44 549 323 37 16 --
------------ --------- ------- ------- ------ ------- ---------- --------
Total current assets.......... 7,819 6,367 6,910 9,017 5,300 1,979 4,254 2,578
PROPERTY AND EQUIPMENT, net.......... 2,150 1,786 1,698 1,355 807 1,652 475 689
OTHER LONG-TERM ASSETS............... 534 120 159 1,000 180 -- -- --
GOODWILL, NET........................ -- -- -- -- -- -- -- --
------------ --------- ------- ------- ------ ------- ---------- --------
Total assets.................. $ 10,503 $ 8,273 $ 8,767 $11,372 $6,287 $3,631 $4,729 $3,267
============ ========= ======= ======= ====== ======= ========== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
obligations....................... $ 1,438 $ 1,997 $ 638 $ 73 $ -- $ 452 $ -- $ 37
Accounts payable and accrued
expenses.......................... 4,452 2,945 3,152 1,710 1,716 557 672 1,124
Obligations to related parties...... -- -- -- -- -- -- 438 36
Billings in excess of costs and
estimated earnings on uncompleted
contracts......................... 945 937 1,330 662 1,395 -- 989 429
Unearned revenue and other current
liabilities....................... -- -- -- -- 20 -- 61 --
------------ --------- ------- ------- ------ ------- ---------- --------
Total current liabilities..... 6,835 5,879 5,120 2,445 3,131 1,009 2,160 1,626
LONG-TERM OBLIGATIONS, net of current
maturities.......................... 1,252 395 726 260 -- 576 -- 87
DEFERRED INCOME TAXES................ -- -- -- -- -- -- -- --
OTHER LONG-TERM LIABILITIES.......... 69 -- -- -- -- -- -- 216
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock........................ 320 2 220 10 15 101 41 48
Additional paid-in capital.......... 21 100 -- 673 28 9 417 622
Retained earnings (deficit)......... 2,006 1,897 2,701 7,984 3,113 1,794 2,758 668
Other............................... -- -- -- -- -- 142 (647) --
------------ --------- ------- ------- ------ ------- ---------- --------
Total stockholders' equity.... 2,347 1,999 2,921 8,667 3,156 2,046 2,569 1,338
------------ --------- ------- ------- ------ ------- ---------- --------
Total liabilities and
stockholders' equity......... $ 10,503 $ 8,273 $ 8,767 $11,372 $6,287 $3,631 $4,729 $3,267
============ ========= ======= ======= ====== ======= ========== ========

KELLEY PRO FORMA PRO FORMA
ASSETS BOONE SUTTER M.J. DALSIN BROTHERS INCOM ADJUSTMENTS COMBINED
------ ------- ------------ --------- ------ ------------ ----------
CURRENT ASSETS:
Cash and cash equivalents........... $ 321 $ 179 $ 761 $ 115 $ -- $ (3,271) $ 1,739
Accounts receivable --
Trade, net...................... 808 1,625 921 908 -- -- 29,838
Retainage....................... 602 -- 237 690 -- -- 7,172
Other receivables............... 50 23 3 44 -- -- 1,343
Costs and estimated earnings in
excess of billings on
uncompleted contracts........... 901 173 21 49 -- -- 5,004
Inventories....................... 326 143 171 229 -- -- 3,248
Prepaid expenses and other current
assets.......................... 79 337 206 103 103 1,125 3,862
------ ------- ------------ --------- ------ ------------ ----------
Total current assets.......... 3,087 2,480 2,320 2,138 103 (2,146) 52,206
PROPERTY AND EQUIPMENT, net.......... 262 752 664 495 6 (1,319) 11,472
OTHER LONG-TERM ASSETS............... -- -- 64 -- -- (320) 1,737
GOODWILL, NET........................ -- -- -- -- -- 110,530 110,530
------ ------- ------------ --------- ------ ------------ ----------
Total assets.................. $3,349 $ 3,232 $3,048 $ 2,633 $ 109 $106,745 $175,945
====== ======= ============ ========= ====== ============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
obligations....................... $ 16 $ 105 $ 47 $ 251 $ -- $ 52,734 $ 57,788
Accounts payable and accrued
expenses.......................... 834 802 455 622 -- -- 19,041
Obligations to related parties...... 99 -- -- 2 108 5,494 6,177
Billings in excess of costs and
estimated earnings on uncompleted
contracts......................... 426 524 764 349 -- -- 8,750
Unearned revenue and other current
liabilities....................... 395 -- -- 191 -- 283 950
------ ------- ------------ --------- ------ ------------ ----------
Total current liabilities..... 1,770 1,431 1,266 1,415 108 58,511 92,706
LONG-TERM OBLIGATIONS, net of current
maturities.......................... 149 325 167 157 -- -- 4,094
DEFERRED INCOME TAXES................ 28 -- -- -- -- 384 412
OTHER LONG-TERM LIABILITIES.......... -- -- -- -- -- -- 285
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock........................ 58 1 85 51 26 (875) 103
Additional paid-in capital.......... -- 159 47 51 -- 77,804 79,931
Retained earnings (deficit)......... 1,344 1,316 1,493 959 (25 ) (29,594) (1,586)
Other............................... -- -- (10) -- -- 515 --
------ ------- ------------ --------- ------ ------------ ----------
Total stockholders' equity.... 1,402 1,476 1,615 1,061 1 47,850 78,448
------ ------- ------------ --------- ------ ------------ ----------
Total liabilities and
stockholders' equity......... $3,349 $ 3,232 $3,048 $ 2,633 $ 109 $106,745 $175,945
====== ======= ============ ========= ====== ============ ==========
</TABLE>

POSTMERGER AS
ASSETS ADJUSTMENTS ADJUSTED
------------ ---------
CURRENT ASSETS:
Cash and cash equivalents........... $ 2,788 $ 4,527
Accounts receivable --
Trade, net...................... (20) 29,818
Retainage....................... -- 7,172
Other receivables............... (841) 502
Costs and estimated earnings in
excess of billings on
uncompleted contracts........... -- 5,004
Inventories....................... -- 3,248
Prepaid expenses and other current
assets.......................... (113) 3,749
------------ ---------
Total current assets.......... 1,814 54,020
PROPERTY AND EQUIPMENT, net.......... -- 11,472
OTHER LONG-TERM ASSETS............... (1,030) 707
GOODWILL, NET........................ -- 110,530
------------ ---------
Total assets.................. $ 784 $ 176,729
============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
obligations....................... $(57,680) $ 108
Accounts payable and accrued
expenses.......................... -- 19,041
Obligations to related parties...... (6,177) --
Billings in excess of costs and
estimated earnings on uncompleted
contracts......................... -- 8,750
Unearned revenue and other current
liabilities....................... -- 950
------------ ---------
Total current liabilities..... (63,857) 28,849
LONG-TERM OBLIGATIONS, net of current
maturities.......................... (3,499) 595
DEFERRED INCOME TAXES................ -- 412
OTHER LONG-TERM LIABILITIES.......... -- 285
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock........................ 60 163
Additional paid-in capital.......... 68,080 148,011
Retained earnings (deficit)......... -- (1,586)
Other............................... -- --
------------ ---------
Total stockholders' equity.... 68,140 146,588
------------ ---------
Total liabilities and
stockholders' equity......... $ 784 $ 176,729
============ =========

See accompanying notes to unaudited pro forma combined financial statements.

F-4
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
BURNS &
D. C. TAYLOR SEYFORTH NU-TEC BETA EVANS BRAZOS CHAMBERLIN SCALO
------------ -------- ------- ------- ------- ------- ---------- -------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES................................ $ 35,472 $ 31,086 $28,589 $24,032 $17,832 $17,035 $ 12,296 $11,613

COST OF SERVICES (Including
depreciation).......................... 29,031 22,850 23,281 15,457 13,672 14,279 9,792 7,100
------------ -------- ------- ------- ------- ------- ---------- -------

Gross profit..................... 6,441 8,236 5,308 8,575 4,160 2,756 2,504 4,513

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................... 5,970 6,864 3,475 4,988 3,518 1,075 1,655 3,764

GOODWILL AMORTIZATION................... -- -- -- -- -- -- -- --
------------ -------- ------- ------- ------- ------- ---------- -------

Income (loss) from operations.... 471 1,372 1,833 3,587 642 1,681 849 749

OTHER INCOME (EXPENSE):

Interest, net........................ (93) (207) (217) 114 29 (88) (46) (67)

Other................................ (10) 83 53 106 25 (131) 189 105
------------ -------- ------- ------- ------- ------- ---------- -------

Other income (expense), net...... (103) (124) (164) 220 54 (219) 143 38
------------ -------- ------- ------- ------- ------- ---------- -------

INCOME BEFORE PROVISION FOR INCOME
TAXES.................................. 368 1,248 1,669 3,807 696 1,462 992 787

PROVISION FOR INCOME TAXES.............. 159 5 -- -- 288 -- 145 --
------------ -------- ------- ------- ------- ------- ---------- -------

NET INCOME (LOSS)....................... $ 209 $ 1,243 $ 1,669 $ 3,807 $ 408 $ 1,462 $ 847 $ 787
============ ======== ======= ======= ======= ======= ========== =======

PRO FORMA NET INCOME PER SHARE..........

SHARES USED IN COMPUTING PRO FORMA NET
INCOME PER SHARE.......................

KELLEY PRO FORMA PRO FORMA
BOONE SUTTER M. J. DALSIN BROTHERS INCOM ADJUSTMENTS COMBINED
------- ------ ------------ -------- ----- ----------- ---------
REVENUES................................ $10,657 $8,756 $5,738 $ 13,771 $ -- $ -- $216,877
COST OF SERVICES (Including
depreciation).......................... 8,059 6,777 4,153 12,108 -- -- 166,559
------- ------ ------------ -------- ----- ----------- ---------
Gross profit..................... 2,598 1,979 1,585 1,663 -- -- 50,318
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................... 2,000 1,624 1,034 1,175 -- (5,727)(a) 31,415
GOODWILL AMORTIZATION................... -- -- -- -- -- 2,763(b) 2,763
------- ------ ------------ -------- ----- ----------- ---------
Income (loss) from operations.... 598 355 551 488 -- 2,964 16,140
OTHER INCOME (EXPENSE):
Interest, net........................ (10) (5) (16) (109) -- 1,027 312
Other................................ -- 62 46 -- -- 138(b) 666
------- ------ ------------ -------- ----- ----------- ---------
Other income (expense), net...... (10) 57 30 (109) -- 1,165 978
------- ------ ------------ -------- ----- ----------- ---------
INCOME BEFORE PROVISION FOR INCOME
TAXES.................................. 588 412 581 379 -- 4,129 17,118
PROVISION FOR INCOME TAXES.............. 245 -- 111 158 -- 6,841(d) 7,952
------- ------ ------------ -------- ----- ----------- ---------
NET INCOME (LOSS)....................... $ 343 $ 412 $ 470 $ 221 $ -- $(2,712) $9,166
======= ====== ============ ======== ===== =========== =========
PRO FORMA NET INCOME PER SHARE.......... $0.57
=========
SHARES USED IN COMPUTING PRO FORMA NET
INCOME PER SHARE....................... 16,129,104(e)
=========

</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.

F-5
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
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>
<S> <C> <C> <C> <C> <C> <C> <C>

D. C. TAYLOR SEYFORTH NU-TEC BETA EVANS BRAZOS CHAMBERLIN
------------ -------- ------ --------- --------- ------ -----------
REVENUES............................. $6,301 $5,872 $6,093 $ 3,266 $ 1,783 $3,345 $ 2,337
COST OF SERVICES (Including
depreciation)....................... 5,111 4,061 5,255 2,195 1,351 2,702 1,711
------------ -------- ------ --------- --------- ------ -----------
Gross profit.................. 1,190 1,811 838 1,071 432 643 626
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................ 1,177 1,542 589 446 709 185 466
GOODWILL AMORTIZATION................ -- -- -- -- -- -- --
------------ -------- ------ --------- --------- ------ -----------
Income (loss) from
operations................... 13 269 249 625 (277) 458 160
OTHER INCOME (EXPENSE):
Interest, net..................... (1) (61) (16) (38) 13 (16) 8
Other............................. (29) 5 -- 68 4 7 --
------------ -------- ------ --------- --------- ------ -----------
Other income (expense), net... (30) (56) (16) 30 17 (9) 8
------------ -------- ------ --------- --------- ------ -----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................ (17) 213 233 655 (260) 449 168
PROVISION (BENEFIT) FOR INCOME
TAXES............................... (7) -- -- -- (107) -- 145
------------ -------- ------ --------- --------- ------ -----------
NET INCOME (LOSS).................... $ (10) $ 213 $ 233 $ 655 $ (153) $ 449 $ 23
============ ======== ====== ========= ========= ====== ===========
PRO FORMA NET INCOME PER SHARE.......
SHARES USED IN COMPUTING PRO FORMA
NET INCOME PER SHARE................

BURNS & KELLEY PRO FORMA
SCALO BOONE SUTTER M. J. DALSIN BROTHERS INCOM ADJUSTMENTS
------- --------- ------ ------------ -------- ----- -----------
REVENUES............................. $2,366 $ 1,660 $2,268 $1,044 $2,664 $ -- $ --
COST OF SERVICES (Including
depreciation)....................... 1,585 1,376 1,733 777 2,563 -- --
------- --------- ------ ------------ -------- ----- -----------
Gross profit.................. 781 284 535 267 101 -- --
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................ 663 298 335 214 211 -- (778)(a)
GOODWILL AMORTIZATION................ -- -- -- -- -- -- 691(b)
------- --------- ------ ------------ -------- ----- -----------
Income (loss) from
operations................... 118 (14) 200 53 (110) -- 87
OTHER INCOME (EXPENSE):
Interest, net..................... (7 ) (3) (1) (3) (25) -- 152(c)
Other............................. -- -- -- 35 -- -- --
------- --------- ------ ------------ -------- ----- -----------
Other income (expense), net... (7 ) (3) (1) 32 (25) -- 152
------- --------- ------ ------------ -------- ----- -----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................ 111 (17) 199 85 (135) -- 239
PROVISION (BENEFIT) FOR INCOME
TAXES............................... -- (7) -- 7 -- -- 1,014(d)
------- --------- ------ ------------ -------- ----- -----------
NET INCOME (LOSS).................... $ 111 $ (10) $ 199 $ 78 $ (135) $ -- $(775)
======= ========= ====== ============ ======== ===== ===========
PRO FORMA NET INCOME PER SHARE.......

SHARES USED IN COMPUTING PRO FORMA
NET INCOME PER SHARE................

</TABLE>
PRO FORMA
COMBINED
---------
REVENUES............................. $38,999
COST OF SERVICES (Including
depreciation)....................... 30,420
---------
Gross profit.................. 8,579
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................ 6,057
GOODWILL AMORTIZATION................ 691
---------
Income (loss) from
operations................... 1,831
OTHER INCOME (EXPENSE):
Interest, net..................... 2
Other............................. 90
---------
Other income (expense), net... 92
---------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................ 1,923
PROVISION (BENEFIT) FOR INCOME
TAXES............................... 1,045
---------
NET INCOME (LOSS).................... $878
=========
PRO FORMA NET INCOME PER SHARE....... $0.05
=========
SHARES USED IN COMPUTING PRO FORMA
NET INCOME PER SHARE................ 16,129,104(e)
=========

See accompanying notes to unaudited pro forma combined financial statements.

F-6
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
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>
<S> <C> <C> <C> <C> <C> <C> <C>

D. C. TAYLOR SEYFORTH NU-TEC BETA EVANS BRAZOS CHAMBERLIN
------------ -------- ------ ------ ------ ------ ----------
REVENUES................................ $8,156 $6,220 $7,381 $3,966 $5,023 $1,406 $2,232
COST OF SERVICES (Including
depreciation).......................... 6,852 4,822 6,160 2,822 3,979 1,408 1,583
------------ -------- ------ ------ ------ ------ ----------
Gross profit (loss).............. 1,304 1,398 1,221 1,144 1,044 (2) 649
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................... 1,619 1,715 695 1,370 894 237 384
GOODWILL AMORTIZATION................... -- -- -- -- -- -- --
------------ -------- ------ ------ ------ ------ ----------
Income (loss) from operations.... (315) (317) 526 (226) 150 (239) 265
OTHER INCOME (EXPENSE):
Interest, net........................ (54) (38) (26) 25 6 (16) 4
Other................................ (41) 46 7 44 3 (25) --
------------ -------- ------ ------ ------ ------ ----------
Other income (expense), net...... (95) 8 (19) 69 9 (41) 4
------------ -------- ------ ------ ------ ------ ----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................... (410) (309) 507 (157) 159 (280) 269
PROVISION (BENEFIT) FOR INCOME TAXES.... (164) -- -- -- 63 4 --
------------ -------- ------ ------ ------ ------ ----------
NET INCOME (LOSS)....................... $ (246) $ (309) $ 507 $ (157) $ 96 $ (284) $ 269
============ ======== ====== ====== ====== ====== ==========
PRO FORMA NET LOSS PER SHARE............
SHARES USED IN COMPUTING PRO FORMA NET
LOSS PER SHARE.........................

BURNS & KELLEY PRO FORMA
SCALO BOONE SUTTER M. J. DALSIN BROTHERS INCOM ADJUSTMENTS
------- ------ ------ ------------ -------- ----- -----------
REVENUES................................ $2,119 $1,706 $2,447 $1,518 $1,608 $ -- $ --
COST OF SERVICES (Including
depreciation).......................... 1,488 1,544 1,870 1,132 1,418 -- --
------- ------ ------ ------------ -------- ----- -----------
Gross profit (loss).............. 631 162 577 386 190 -- --
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................... 626 315 408 217 215 -- (659)(a)
GOODWILL AMORTIZATION................... -- -- -- -- -- -- 691(b)
------- ------ ------ ------------ -------- ----- -----------
Income (loss) from operations.... 5 (153) 169 169 (25) -- (32)
OTHER INCOME (EXPENSE):
Interest, net........................ (3 ) (3) (1) (1) (12) -- 187(c)
Other................................ -- -- 13 25 -- -- --
------- ------ ------ ------------ -------- ----- -----------
Other income (expense), net...... (3 ) (3) 12 24 (12) -- 187
------- ------ ------ ------------ -------- ----- -----------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................... 2 (156) 181 193 (37) -- 155
PROVISION (BENEFIT) FOR INCOME TAXES.... -- (58) -- 22 22 -- 434(d)
------- ------ ------ ------------ -------- ----- -----------
NET INCOME (LOSS)....................... $ 2 $ (98) $ 181 $ 171 $ (59) $ -- $(279)
======= ====== ====== ============ ======== ===== ===========
PRO FORMA NET LOSS PER SHARE............

SHARES USED IN COMPUTING PRO FORMA NET
LOSS PER SHARE.........................

</TABLE>
PRO FORMA
COMBINED
---------
REVENUES................................ $43,782
COST OF SERVICES (Including
depreciation).......................... 35,078
---------
Gross profit (loss).............. 8,704
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................... 8,036
GOODWILL AMORTIZATION................... 691
---------
Income (loss) from operations.... (23)
OTHER INCOME (EXPENSE):
Interest, net........................ 68
Other................................ 72
---------
Other income (expense), net...... 140
---------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES........................... 117
PROVISION (BENEFIT) FOR INCOME TAXES.... 323
---------
NET INCOME (LOSS)....................... $(206)
=========
PRO FORMA NET LOSS PER SHARE............ $(0.01)
=========
SHARES USED IN COMPUTING PRO FORMA NET
LOSS PER SHARE......................... 16,129,104(e)
=========

See accompanying notes to unaudited pro forma combined financial statements.

F-7
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL:

INCOM Roofing Services, Inc. (INCOM), was founded to create a leading
national provider of roofing contracting services. INCOM has conducted no
operations to date and will acquire the Founding Companies concurrently with and
as a condition to the closing of the Offerings.

The historical financial statements reflect the financial position and
results of operations of the Founding Companies and were derived from the
respective Founding Companies' financial statements. The periods included in
these financial statements for the individual Founding Companies (a) are for the
year ended December 31, 1997, except for Beta for which the period is the 12
months ended September 30, 1997, and (b) are as of and for the three months
ended March 31, 1998. During the three months ended December 31, 1996 and 1997,
Beta reported revenues of $3.4 million and $5.4 million, respectively, and net
income of $ -- million and $0.9 million, respectively. The audited historical
financial statements included elsewhere herein have been included in accordance
with Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 80.

2. ACQUISITION OF FOUNDING COMPANIES:

Concurrently with and as a condition to the closing of the Offerings, INCOM
will acquire all of the outstanding capital stock and other equity interests of
the Founding Companies. The Acquisitions will be accounted for using the
purchase method of accounting, with INCOM being reflected as the accounting
acquirer.

The following table sets forth the consideration to be paid (a) in cash and
(b) in shares of common stock to the common stockholders of each of the Founding
Companies. For purposes of computing the estimated purchase price for accounting
purposes, the value of the shares was determined using an estimated fair value
of $10.40 per share (or approximately $78.4 million), which is less than the
initial public offering price of $13.00 per share due primarily to restrictions
on the sale and transferability of the shares issued. The total purchase price,
including cash consideration of approximately $40.0 million, is approximately
$118.4 million. This value of shares excludes certain additional shares of
Common Stock and cash that may be issued to the stockholders of two of the
Founding Companies if certain earnings thresholds are satisfied after the
consummation of the Offerings. Specifically, in addition to the Acquisitions
Consideration described above, the stockholders of Seyforth and Brazos will be
entitled to receive additional consideration in the event those businesses
achieve certain levels of net income in the future. For Seyforth, the maximum
amount of such additional consideration is approximately $2.8 million to be paid
75% in Common Stock and 25% in cash. For Brazos, the maximum amount of such
additional consideration consists of 740,944 shares of Common Stock. The table
does not reflect net transfers of $23.5 million which represent excess working
capital, distribution of various Founding Companies' S Corporation accumulated
adjustment accounts and the distribution of nonoperating assets that will be
transferred in connection with the Acquisitions to the owners of the Founding
Companies or the assumption of the historical indebtedness of the Founding
Companies of approximately $9.0 million as of March 31, 1998. The cash portion
of the Acquisitions Consideration will be adjusted based on the initial public
offering price and certain closing balance sheet amounts.

SHARES OF
CASH COMMON STOCK
--------- ------------
(IN THOUSANDS)
Beta.................................... $ 8,697 2,007
Boone................................... 1,593 368
Brazos.................................. 2,241 --
Burns & Scalo........................... 6,738 396
Chamberlin.............................. 2,379 549
D. C. Taylor............................ 4,883 1,127
Evans................................... 2,972 685
Kelley Brothers......................... 929 214
M. J. Dalsin............................ 1,698 392
Nu-Tec.................................. 3,073 709
Seyforth................................ 3,681 849
Sutter.................................. 1,073 247
--------- ------------
Total.............................. $ 39,957 7,543
========= ============

F-8
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

PRO FORMA ADJUSTMENTS:

(a) Records the distribution of various Founding Companies' S Corporation
accumulated adjustment accounts, a portion of which is to be funded
as obligations to related parties.

(b) Records the distribution of the cash surrender value of life
insurance policies and certain property and vehicles to certain
stockholders of the Founding Companies.

(c) Records the transfer in connection with the Acquisitions of $12.8
million of excess working capital to the owners of the Founding
Companies, which is expected to be funded using $12.8 million of
notes payable to owners which will be retired with proceeds of the
Offerings.

(d) Records the purchase of the Founding Companies by INCOM, consisting
of indebtedness incurred to finance the $40.0 million cash portion
and 7,543,031 shares of common stock valued at $10.40 per share (or
approximately $78.4 million) for a total purchase price of
approximately $118.4 million resulting in excess purchase price of
$110.5 million over the estimated fair value of the net assets
acquired of $7.9 million (see Note 2). Excludes certain additional
shares of Common Stock that may be issued to the stockholders of two
of the Founding Companies if certain earnings threshholds are
satisfied after the consummation of the Offerings.

The following reconciles the combined historical net assets of the
Founding Companies to the net assets acquired (in thousands):

Historical net assets.................. $ 30,597
Transfer of Owner Amounts (see (c)
above)............................... (12,777)
Other (see (a), (b) and (f))........... (9,946)
----------
Net assets after transfers and purchase
adjustments.......................... $ 7,874
==========

(e) Records the issuance of 150,000 shares of INCOM common stock to
certain members of INCOM management of which 100,000 were issued in
June 1998 and 50,000 are reserved for issuance to other management,
valued at $10.40 per share (or approximately $1.6 million). The
nonrecurring, noncash compensation charge of $1.6 million has not
been reflected in the pro forma combined statements of operations
because these costs are nonrecurring costs of the Acquisitions and
Offerings.

(f) Records deferred taxes on certain of the Founding Companies that are
S Corporations as if they were C Corporations.

POSTMERGER ADJUSTMENTS:

(g) Records the net cash proceeds of $68.1 million from the issuance of
6,000,000 shares of INCOM common stock (based on an initial public
offering price of $13.00 per share and net of estimated offering
costs, including underwriters' commissions and discounts, accounting,
legal and other estimated Offerings costs of $10.0 million).

(h) Records the expected repayment of remaining historical short- and
long-term obligations totaling $14.6 million from the proceeds of the
Offerings reduced by the collection on various accounts and notes
receivables from certain related parties of the Founding Companies.

(i) Records the payment of the debt assumed for the working capital
distribution with the net cash proceeds from the proceeds of the
Offerings.

(j) Records payment of indebtedness incurred to finance the cash portion
of the consideration to the stockholders of the Founding Companies of
$40.0 million in connection with the Acquisitions from the proceeds
of the Offerings.

F-9
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The following tables summarize unaudited pro forma combined balance sheet
adjustments (in thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
ADJUSTMENT
---------------------------------------------------------------- PRO FORMA
(A) (B) (C) (D) (E) (F) ADJUSTMENTS
--------- --------- --------- --------- --------- --------- -----------
ASSETS
Current assets --
Cash and cash equivalents........... $ (3,271) $ -- $ -- $ -- $ -- $ -- $ (3,271)
Prepaid expenses and other current
assets............................ -- (272) -- -- -- 1,397 1,125
--------- --------- --------- --------- --------- --------- -----------
Total current assets........... (3,271) (272) -- -- -- 1,397 (2,146)
Property and equipment, net............. -- (1,319) -- -- -- -- (1,319)
Other long-term assets.................. -- (320) -- -- -- (320)
Goodwill, net........................... -- -- -- 110,530 -- -- 110,530
--------- --------- --------- --------- --------- --------- -----------
Total assets................... $ (3,271) $ (1,911) $ -- $ 110,530 $ -- $ 1,397 $ 106,745
========= ========= ========= ========= ========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities --
Current maturities of long-term
obligations....................... $ -- $ -- $ 12,777 $ 39,957 $ -- $ -- $ 52,734
Obligations to related parties...... 5,494 -- -- -- -- -- 5,494
Unearned revenue and other current
liabilities....................... -- -- -- -- -- 283 283
--------- --------- --------- --------- --------- --------- -----------
Total current liabilities...... 5,494 -- 12,777 39,957 -- 283 58,511
Deferred income taxes................... -- -- -- -- -- 384 384
--------- --------- --------- --------- --------- --------- -----------
Total long-term liabilities.... -- -- -- -- -- 384 384
Stockholders' equity --
Common stock........................ -- -- -- (877) 2 -- (875)
Additional paid-in capital.......... -- -- -- 76,245 1,559 -- 77,804
Retained earnings................... (8,765) (1,911) (12,777) (5,310) (1,561) 730 (29,594)
Other............................... -- -- -- 515 -- -- 515
--------- --------- --------- --------- --------- --------- -----------
Total stockholders' equity..... (8,765) (1,911) (12,777) 70,573 -- 730 47,850
--------- --------- --------- --------- --------- --------- -----------
Total liabilities and
stockholders' equity......... $ (3,271) $ (1,911) $ -- $ 110,530 $ -- $ 1,397 $ 106,745
========= ========= ========= ========= ========= ========= ===========
</TABLE>

F-10
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ADJUSTMENT
------------------------------------------ POSTMERGER
(G) (H) (I) (J) ADJUSTMENTS
--------- --------- --------- --------- -----------
ASSETS
Current assets --
Cash and cash equivalents............. $ 68,140 $ (12,618) $ (12,777) $ (39,957) $ 2,788
Accounts receivable --
Trade, net.......................... -- (20) -- -- (20)
Other receivables................... -- (841) -- -- (841)
Prepaid expenses and other current
assets.............................. -- (113) -- -- (113)
--------- --------- --------- --------- -----------
Total current assets.............. 68,140 (13,592) (12,777) (39,957) 1,814
Other long-term assets.................. -- (1,030) -- -- (1,030)
--------- --------- --------- --------- -----------
Total assets...................... $ 68,140 $ (14,622) $ (12,777) $ (39,957) $ 784
========= ========= ========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities --
Current maturities of long-term
debt................................ $ -- $ (4,946) (12,777) (39,957) $ (57,680)
Obligations to related parties........ -- (6,177) -- -- (6,177)
--------- --------- --------- --------- -----------
Total current liabilities......... -- (11,123) (12,777) (39,957) (63,857)
Long-term debt, net of current
maturities............................ -- (3,499) -- -- (3,499)
--------- --------- --------- --------- -----------
Total long-term liabilities....... -- (3,499) -- -- (3,499)
Stockholders' equity --
Common stock.......................... 60 -- -- -- 60
Additional paid-in capital............ 68,080 -- -- -- 68,080
--------- --------- --------- --------- -----------
Total stockholders' equity........ 68,140 -- -- -- 68,140
--------- --------- --------- --------- -----------
Total liabilities and
stockholders' equity............ $ 68,140 $ (14,622) $ (12,777) $ (39,957) $ 784
========= ========= ========= ========= ===========
</TABLE>

4. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS:

(a) Reflects the reduction in salaries, bonuses, benefits and lease payments
to the owners of the Founding Companies. These reductions in salaries,
bonuses, benefits and lease payments have been agreed prospectively in
accordance with the terms of employment agreements executed as part of the
Acquisitions. Such employment agreements are primarily for five years,
contain restrictions related to competition and provide severance for
termination of employment in certain circumstances. Also reflects the
anticipated nonrecurring, noncash compensation charge of $1.6 million and
the related reversal of such compensation charge for common stock issued
to management for nominal consideration.

(b) Reflects the amortization of goodwill to be recorded as a result of these
Acquisitions over a 40-year estimated life, as well as a reduction in
historical Founding Companies' minority interest expense attributable to
minority interests that will be acquired as part of the transaction.

(c) Reflects interest savings on the historical debt to be repaid using
proceeds from the Offerings. Also, reflects interest expense on borrowings
necessary to fund the distributions discussed in 3.(a) above, the
transfers discussed in 3.(c) above and the cash portion of the
consideration to the stockholders of the Founding Companies discussed in
3.(d) above. The additional interest expense was calculated utilizing an
assumed effective interest rate of approximately 7.5 percent. As these
borrowings were immediately repaid with the proceeds of the Offering, this
additional interest expense has been reversed.

(d) Reflects the incremental provision for federal and state income taxes at a
40 percent overall tax rate, before nondeductible goodwill and other
permanent items, relating to the other statements of

F-11
<PAGE>
INCOM ROOFING SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

operations adjustments and for income taxes on the pretax income of
Founding Companies that have historically elected S Corporation tax
status.

(e) The number of shares estimated to be outstanding on completion of the
Offerings includes the following:

Shares outstanding (as adjusted to
reflect a stock split)............. 2,760,535
Issued in Initial Public Offerings... 6,000,000
Issued to acquire Founding
Companies.......................... 7,543,031
Less -- Shares not required for the
Acquisitions, other use of proceeds
or other........................... (174,462)
------------
Shares estimated to be
outstanding............. 16,129,104
============

These share amounts exclude certain additional shares of Common Stock that
may be issued to the stockholders of two of the Founding Companies if
certain earnings threshholds are satisfied after the consummation of the
Offerings. Other includes the effect of the 100,000 options with an assumed
exercise price of 60% of the initial public offering price using the
treasury stock method. Excludes 1,530,357 shares of common stock subject to
options to be granted in connection with the Offerings at an exercise price
equal to the initial public offering price.

F-12
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To INCOM Roofing Services, Inc.:

We have audited the accompanying balance sheet of INCOM Roofing Services,
Inc., a Delaware corporation, as of March 31, 1998, and the related statements
of operations, cash flows and stockholders' equity for the period from inception
(February 26, 1998) through March 31, 1998. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 INCOM Roofing Services,
Inc., as of March 31, 1998, and the results of its operations and its cash flows
for the period from inception (February 26, 1998) through March 31, 1998, in
conformity with generally accepted accounting principles.

Houston, Texas
July 20, 1998

F-13
<PAGE>
INCOM ROOFING SERVICES, INC.
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
MARCH 31,
1998
---------
ASSETS
CASH AND CASH EQUIVALENTS............... $ --
DEFERRED OFFERING COSTS................. 103
---------
Total current assets.......... 103
PROPERTY AND EQUIPMENT.................. 6
---------
Total assets.................. $ 109
=========

LIABILITIES AND STOCKHOLDERS' EQUITY
AMOUNTS DUE TO STOCKHOLDER.............. $ 108
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par, 10,000,000
authorized, none issued and
outstanding........................ --
Common stock, $.01 par, 100,000,000
shares authorized, 2,580,535 shares
issued and outstanding,
respectively....................... 26
Additional paid-in capital............ --
Retained deficit...................... (25)
---------
Total stockholders' equity.... 1
---------
Total liabilities and
stockholders' equity............ $ 109
=========

Reflects a 1,479.523-for-one stock split effective July 1998

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

F-14
<PAGE>
INCOM ROOFING SERVICES, INC.
STATEMENT OF OPERATIONS
(IN THOUSANDS)

INCEPTION (FEBRUARY 26, 1998)
THROUGH MARCH 31, 1998
-----------------------------
REVENUES................................ $ --
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.............................. --
--------
LOSS BEFORE PROVISION FOR INCOME
TAXES................................. --
PROVISION FOR INCOME TAXES.............. --
--------
NET LOSS................................ $ --
========

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

F-15
<PAGE>
INCOM ROOFING SERVICES, INC.
STATEMENT OF CASH FLOWS
(IN THOUSANDS)

INCEPTION (FEBRUARY 26, 1998)
THROUGH MARCH 31, 1998
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................... $ --
Adjustments to reconcile net loss
to net cash provided by operating
activities --
Compensation expense related
to issuance of management
shares..................... --
Changes in assets and
liabilities --
Increase in deferred
offering costs....... (103)
Increase in accrued
liabilities and
amounts due to
stockholder.......... 108
--------
Net cash provided
by operating
activities...... 5
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............... (6)
--------
Net cash used in
investing
activities...... (6)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of stock.................. 1
--------
Net cash provided
by financing
activities...... 1
--------
NET INCREASE IN CASH AND CASH
EQUIVALENTS........................... --
CASH AND CASH EQUIVALENTS, beginning of
period................................ --
--------
CASH AND CASH EQUIVALENTS, end of
period................................ $ --
========

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

F-16
<PAGE>
INCOM ROOFING SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
-------------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
----------- ------ ---------- -------- -------------
INITIAL CAPITALIZATION,
February 26, 1998..................... 1,479,523 $ 15 $-- $ (14) $ 1
ISSUANCE OF ADDITIONAL SHARES TO
MANAGEMENT......................... 1,101,012 11 -- (11) --
NET INCOME (LOSS)....................... -- -- -- -- --
----------- ------ ---------- -------- -------------
BALANCE, March 31, 1998................. 2,580,535 $ 26 $-- $ (25) $ 1
=========== ====== ========== ======== =============
</TABLE>

Reflects a 1,479.523-for-one stock split effective July 1998.

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

F-17
<PAGE>
INCOM ROOFING SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

INCOM Roofing Services, Inc., a Delaware corporation (INCOM or the
Company), was founded in February 1998 to become a national provider of roofing
contracting and repair services. INCOM intends to acquire 12 U.S. businesses
(the Founding Companies), complete an initial public offering (the Offering) of
its common stock (Common Stock) and, subsequent to the Offering, continue to
acquire similar companies to expand its national and regional operations.

INCOM has not conducted any operations, and all activities to date have
related to the Offering and the acquisition of the Founding Companies. All
expenditures of the Company to date have been funded by its founder and current
primary stockholder, on behalf of the Company. The Company's founder and primary
stockholder has also committed to fund future organization expenses and offering
costs. As of March 31, 1998, costs of approximately $103,000 have been incurred
in connection with the Offering. INCOM has treated these costs as deferred
offering costs in the accompanying balance sheet. INCOM is dependent upon the
Offering to execute the pending acquisitions of the Founding Companies and to
repay INCOM's founder and current primary stockholder for fundings. There is no
assurance that the pending acquisitions of the Founding Companies discussed
below will be completed or that INCOM will be able to generate future operating
revenues. The ability of INCOM to generate future operating revenues is
dependent upon INCOM's ability to manage the effect on the combined companies of
changes in demand for commercial construction and the effect of business growth,
including the availability of skilled roofing labor and roofing supervisors and
the need for other key personnel. These risk factors are discussed in more
detail in "Risk Factors."

2. STOCKHOLDERS' EQUITY:

COMMON STOCK AND PREFERRED STOCK

INCOM increased the number of authorized shares of Common Stock to
100,000,000 shares of Common Stock and 5,000,000 shares of Restricted Common
Stock and effected a 1,479.523-for-1 stock split in July 1998, for each share of
Common Stock then outstanding. The effects of the stock split and the increase
in the shares of authorized Common Stock have been retroactively reflected on
the balance sheet and the statement of stockholders' equity and in the
accompanying notes.

In connection with the organization and initial capitalization of INCOM,
the Company issued 1,479,523 shares (as restated for the 1,479.523-for-1 stock
split) of Common Stock at $.01 par value. In February 1998 INCOM issued another
1,101,012 shares (as restated for the 1,479.523-for-1 stock split) of Common
Stock at $.01 par value to certain management of INCOM and certain other
individuals. Consequently, as restated for the 1,479.523-for-1 stock split
discussed above, the Company had issued a total of 1,479,523 shares to Sterling
City Capital, LLC ("Sterling City"), a limited liability company owned by the
president and sole director of the Company and certain trusts established for
the benefit of his children, and to certain individuals, and an aggregate of
1,101,012 shares to other executive management of the Company and certain other
individuals. In May and June 1998, INCOM issued an additional 30,000 and 100,000
shares (as restated for the 1,479.523-for-1 stock split) of Common Stock at $.01
par value to certain management of INCOM and certain other individuals.
Additionally, INCOM has reserved 50,000 shares (as restated for the
1,479.523-for-1 stock split) of Common Stock at $.01 par value for issuance to
certain other members of management. As a result of the issuance of 100,000
shares to management for nominal consideration in June 1998, the Company
recorded, for financial statement presentation purposes, a nonrecurring, noncash
compensation charge of $1.1 million and will record an additional $0.5 million
upon issuance of the reserved shares to certain other members of INCOM
management, calculated based on the fair value of such shares which has been
determined to be $10.40 per share (a discount of 20 percent from the estimated
initial public offering price). The fair value of such shares was based on
specific factors

F-18
<PAGE>
INCOM ROOFING SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

related to the Company and the transaction including restrictions on
transferability and sale, the time value of money during the holding period and
the substantive progress of the transaction at each issuance date.

1998 STOCK PLAN

Management believes the Board of Directors and the Company's stockholders
will adopt the proposed Incom Roofing Services, Inc. 1998 Stock Plan (the Plan),
which provides for the granting or awarding of incentive or nonqualified stock
options ("NQSOs"), stock appreciation rights, ("SARs) restricted or phantom
stock, bonus stock awards and other stock-based incentive awards, the value of
which is based in whole or in part upon the value of the Common Stock, and cash
awards (collectively, "Awards") to directors, officers, key employees and
consultants to the Company. The terms and conditions of the awards will be
established by the Compensation Committee of the Company's board of directors.
The maximum number of shares of Common Stock that may be subject to outstanding
awards, determined immediately prior to grant of any award, may not exceed 15%
of the aggregate number of shares of Common Stock then outstanding. Shares of
Common Stock which are attributable to awards which have expired, terminated or
been cancelled or forfeited are available for issuance or use in connection with
future awards. Options and SARs may have such exercise prices as the
Compensation Committee, in its discretion, determines. 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 this Plan.

The Company expects to grant NQSOs to purchase 250,000 shares of Common
Stock to members of INCOM Management prior to the Offering. At the consummation
of the Offering, the Company expects that NQSOs to purchase approximately
1,365,357 shares will be granted under the Plan to employees of the Founding
Companies. The foregoing options will have an exercise price equal to the
initial public offering price of the shares offered hereby, except for 100,000
of the options to be granted to the Chief Financial Officer, which will have an
exercise price equal to 60% of the initial public offering price per share.
These options will vest at the rate of 20% per year, commencing on the first
anniversary of grant and will expire at the earliest of (i) ten years from the
date of grant, (ii) three months following termination of employment, other than
due to death or disability or (iii) one year following a termination of
employment due to death or disability.

The Plan also provides for (i) the automatic grant to each non-employee
director serving at the consummation of the Offering of an option to purchase
5,000 shares, (ii) the automatic grant to each individual who is first elected
or appointed as a non-employee director after the Offering of an option to
purchase 5,000 shares on such election or appointment, and (iii) an automatic
annual grant to each non-employee director of an option to purchase 5,000 shares
following each annual meeting of the stockholders (after 1998) on which such
director remains a non-employee director, so long as such director was not first
elected or appointed a non-employee director within three months of that annual
meeting of the stockholders. All such director options will have an exercise
price per share equal to the fair market value of the Common Stock on the date
of grant, will vest six months after grant and will expire ten years from the
date of grant, unless such director ceases to serve prior to that time.

RESTRICTED COMMON STOCK

In July 1998, the 1,479,523 shares of Common Stock held by Sterling City
and certain individuals were converted into 1,479,523 shares of restricted
common stock. The shares of restricted common stock have rights similar to
shares of Common Stock, except that such shares are entitled to elect one member
of the board of directors and are entitled to two-thirds of one vote for each
share held on all other matters. Each share of Restricted Common Stock will
automatically convert to Common Stock on a share-for-share basis (i) in the
event of a disposition of such share of Restricted Common Stock by the holder
thereof (other than a distribution by a holder to its partners or beneficial
owners, or a transfer to a related party of such

F-19
<PAGE>
INCOM ROOFING SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

holder), (ii) in the event that any person acquires beneficial ownership of 15%
or more of the total number of outstanding shares of Common Stock or (iii) in
the event any person offers to acquire 15% or more of the total number of
outstanding shares of Common Stock. After January 1, 2001, the Board of
Directors may elect to convert any remaining shares of Restricted Common Stock
into shares of Common Stock.

3. NEW ACCOUNTING PRONOUNCEMENTS:

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, valued-based method of accounting
prescribed by Accounting Principles Board (APB) Opinion 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 prescribed in SFAS No. 123 had been applied. The Company will provide
the required pro forma disclosure of net income and earnings per share, as
applicable, in the notes to future consolidated financial statements.

4. FOUNDING COMPANY ACQUISITIONS:

INCOM has signed definitive agreements to acquire the following entities
(Founding Companies) to be effective contemporaneously with the Offering. The
entities to be acquired are:

Beta Construction Company and Affiliate
D. C. Taylor Co.
Seyforth Roofing Company, Inc. and Affiliates
Brazos Roofing International of South Dakota, Inc. and Affiliate
Nu-Tec Roofing Contractors, Inc.
Evans Service Company, Inc. and Subsidiaries
Burns & Scalo Roofing Company, Inc., Cuddy Roofing Company, Inc. and
Scalo, Inc.
Chamberlin Waterproofing & Roofing Systems, Inc.
Boone Brothers Roofing, Inc.
Sutter Roofing Company of Florida and Sutter Roofing Company of SW
Florida
M. J. Dalsin Company, Inc. and M. J. Dalsin Company of South Dakota,
Inc.
Kelley Brothers Roofing, Inc. and Affiliate

The aggregate consideration that will be paid by INCOM to acquire the
Founding Companies is approximately $40.0 million in cash and 7.5 million shares
of Common Stock. The cash portion of the Acquisitions Consideration is subject
to adjustment based on the initial public offering price and certain closing
balance sheet amounts. Certain additional shares of Common Stock and cash may be
issued to the stockholders of two of the Founding Companies if certain earnings
thresholds are satisfied after the consummation of the Offerings. Specifically,
in addition to the Acquisitions Consideration described above, each of Seyforth
and Brazos will be entitled to receive additional consideration in the event
those businesses achieve certain levels of net income in the future. For
Seyforth, the maximum amount of such additional consideration is approximately
$2.8 million to be paid 75% in Common Stock and 25% in cash. For Brazos, the
maximum amount of such additional consideration consists of 740,944 shares of
Common Stock.

In addition, the Company has entered into employment agreements with
certain key executives of the Founding Companies and the executive officers of
INCOM. These employment agreements generally prohibit such individuals from
disclosing confidential information and trade secrets and restrict such
individuals from competing with the Company for a period of two years following
termination of employment. The initial term of these employment agreements is
five years with provisions for annual extensions at the end of the initial term.

F-20

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To D.C. Taylor Co.:

We have audited the accompanying balance sheets of D.C. Taylor Co. as of
December 31, 1996 and 1997, and the related statements of operations and
retained earnings and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of D.C. Taylor Co. as of
December 31, 1996 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri
June 5, 1998

F-21
<PAGE>
D.C. TAYLOR CO.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS
DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 320 $ 423 $ 49
Accounts receivable --
Trade, net of allowance of
$130, $130 and $130,
respectively............ 4,585 5,883 5,038
Retainage.................. 665 640 491
Related party
receivables................ 214 752 419
Other receivables.......... 21 28 20
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 324 786 557
Inventories, net................ 341 469 443
Prepaid expenses and other
current assets................ 458 673 802
--------- --------- ------------
Total current
assets................ 6,928 9,654 7,819
PROPERTY AND EQUIPMENT, net.......... 989 2,195 2,150
OTHER ASSETS......................... 578 591 534
--------- --------- ------------
Total assets.......... $ 8,495 $ 12,440 $ 10,503
========= ========= ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit.................. $ -- $ 1,430 $ 955
Current maturities of long-term
obligations................... 144 544 483
Accounts payable and accrued
expenses...................... 3,809 4,764 4,452
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 1,197 1,752 945
Deferred contract revenue....... 610 -- --
--------- --------- ------------
Total current
liabilities........... 5,760 8,490 6,835
LONG-TERM OBLIGATIONS, net of current
maturities........................... 257 1,283 1,252
DEFERRED GAINS....................... 94 74 69
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A voting, $100 par value,
25,000 shares authorized and
1,600 shares issued and
outstanding................... 160 160 160
Class AA nonvoting, $100 par
value, 25,000 shares
authorized and 1,600 shares
issued and outstanding........ 160 160 160
Additional paid-in capital...... 21 21 21
Retained earnings............... 2,043 2,252 2,006
--------- --------- ------------
Total stockholders'
equity................ 2,384 2,593 2,347
--------- --------- ------------
Total liabilities and
stockholders'
equity................ $ 8,495 $ 12,440 $ 10,503
========= ========= ============

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

F-22
<PAGE>
D.C. TAYLOR CO.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES............................. $ 26,440 $ 30,836 $ 35,472 $ 6,301 $ 8,156
COST OF SERVICES (including
depreciation)...................... 22,519 25,706 29,031 5,111 6,852
--------- --------- --------- --------- ---------
Gross profit............... 3,921 5,130 6,441 1,190 1,304
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 4,028 4,478 5,970 1,177 1,619
Income (loss) from
operations................. (107) 652 471 13 (315)
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (105) (69) (93) (1) (54)
Other........................... 592 380 (10) (29) (41)
--------- --------- --------- --------- ---------
Other income (expense),
net........................ 487 311 (103) (30) (95)
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES......... 380 963 368 (17) (410)
PROVISION (BENEFIT) FOR INCOME
TAXES.............................. 160 383 159 (7) (164)
--------- --------- --------- --------- ---------
NET INCOME (LOSS).................... 220 580 209 (10) (246)
RETAINED EARNINGS, beginning of
period............................. 1,243 1,463 2,043 2,043 2,252
--------- --------- --------- --------- ---------
RETAINED EARNINGS, end of period..... $ 1,463 $ 2,043 $ 2,252 $ 2,033 $ 2,006
========= ========= ========= ========= =========
</TABLE>

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

F-23
<PAGE>
D.C. TAYLOR CO.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)..................... $ 220 $ 580 $ 209 $ (10) $ (246)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities --
Depreciation....................... 403 466 735 142 249
Amortization of deferred gain...... (24) (20) (20) (5) (5)
Gain on sale of property and
equipment........................ (183) (4) (52) (10) (8)
Deferred income taxes.............. 45 (83) 119 -- (51)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........... (231) (240) (1,819) 1,427 1,456
Costs and estimated earnings
in excess of billings on
uncompleted contracts...... (304) 414 (462) (66) 229
Inventories................... (51) 128 (128) 1 28
Prepaid expenses and other
current assets............. (106) 53 (89) 11 (1)
Increase (decrease) in --
Accounts payable and accrued
expenses................... 391 (198) 689 (1,151) (424)
Billings in excess of costs
and estimated earnings on
uncompleted contracts...... (546) 559 555 (655) (807)
Deferred contract revenue..... -- 610 (610) (610) --
Other, net......................... (85) 125 44 24 --
--------- --------- --------- --------- ---------
Net cash provided by (used
in) operating
activities............... (471) 2,390 (829) (902) 420
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment............................ 1,040 15 81 12 31
Purchases of property and equipment... (481) (666) (1,970) (130) (200)
Other investing activities............ 76 199 (35) 2 (28)
--------- --------- --------- --------- ---------
Net cash provided by (used
in) investing
activities............... 635 (452) (1,924) (116) (197)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of line of credit and
long-term obligations................ 1,713 -- 8,760 745 420
Payments of line of credit and
long-term obligations................ (1,876) (1,929) (5,904) (41) (1,017)
--------- --------- --------- --------- ---------
Net cash provided by (used
in) financing
activities............... (163) (1,929) 2,856 704 (597)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................... 1 9 103 (314) (374)
CASH AND CASH EQUIVALENTS, beginning of
period................................ 310 311 320 320 423
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period................................ $ 311 $ 320 $ 423 $ 6 $ 49
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................... $ 195 $ 125 $ 109 $ 8 $ 71
Income taxes....................... 428 222 611 329 --
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITY:
Equipment acquired under capital
leases............................... -- 21 -- -- 27

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-24
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:
7
D.C. Taylor Co., an Iowa corporation (the Company), focuses on providing
roofing installation and repair services primarily for mid-sized to large
industrial and commercial facilities. The Company performs the majority of its
contract work under fixed price contracts, with contract terms generally ranging
from 1 to 12 months. The Company is based in Cedar Rapids, Iowa, with operations
in over 40 states, Puerto Rico, Mexico and the Virgin Islands.

The Company and its stockholders intend to enter into a definitive
agreement with INCOM Roofing Services, Inc. (INCOM), pursuant to which all
outstanding shares of the Company's common stock will be exchanged for cash and
shares of INCOM common stock concurrently with the consummation of an initial
public offering (the Offering) of common stock by INCOM.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

The interim financial statements as of March 31, 1998, and for the three
months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company's management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation. The results of operations for the
interim periods are not necessarily indicative of the results for the entire
fiscal year.

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company provides an allowance for doubtful accounts based upon the
specific identification of accounts receivable where collection is no longer
probable and a general reserve based upon the total trade and receivable
accounts receivable balances.

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
average cost method.

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. Depreciation expense was
$403,000, $466,000 and $735,000 for the years ended December 31, 1995, 1996 and
1997, respectively.

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 statements of operations and retained earnings.

REVENUE RECOGNITION

The Company 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-

F-25
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

completion method measured by the percentage of labor hours incurred to date to
total estimated labor hours for each contract. Contract costs include all direct
material and labor costs and those indirect costs related to contract
performance, such as indirect labor, supplies, 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, scope or other conditions may result in revisions to costs and/or
revenue. The effects of these changes are reflected in estimated contract costs
when identified and are reflected in estimated revenues pursuant to the contract
terms when agreed to by both parties. An amount equal to contract costs
attributable to claims is included in estimated revenues when agreed to by both
parties.

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 the Company's experience with
similar contracts in recent years, the retention balance at each balance sheet
date will be collected within the subsequent fiscal year.

The current asset, "Costs and estimated earnings in excess of billings on
uncompleted contracts," represents revenues recognized in excess of amounts
billed. The current liability, "Billings in excess of costs and estimated
earnings on uncompleted contracts," represents billings in excess of revenues
recognized.

WARRANTY COSTS

For certain contracts, the Company warrants labor for two years after
installation of a new roof. A liability for warranty costs is recorded based
upon the historical level of warranty claims and management's estimate of future
costs.

INCOME TAXES

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,
disclosures of contingent 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.

REALIZATION OF LONG-LIVED ASSETS

The Company follows the provisions of SFAS No. 121, "Accounting for the
Impairment of 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 an impairment of such property is necessary.

F-26
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

OTHER INCOME (EXPENSE), NET

Other income (expense), net includes gain and loss on disposition of fixed
assets, retrospective insurance adjustments (see Note 13) and other
miscellaneous income and expense items, all of which are not directly related to
the Company's primary business.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the current reported net income (loss) attributable to common
stockholders.

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 requires that companies
report financial and descriptive information about their reportable operating
segments. Segment information to be reported is to be based upon the way
management organizes the segments for making operating decisions and assessing
performance. The Company operates in one business segment, which is roofing
services, and accordingly believes the adoption of SFAS No. 131 will have no
effect on its financial reporting.

3. OTHER ASSETS:

As of December 31, 1997, the Company has a receivable from a general
contractor (GC) related to a contract it completed in 1996. The Company filed a
claim against this GC and was subsequently awarded a judgment in 1997 in the
amount of $126,000, plus interest from January 15, 1996. The GC on this project
filed a claim against the owner of the project and was also awarded a judgment
in June 1997 against the owner. In June 1997, the Company and the GC entered
into an agreement whereby the GC agreed to the judgment in the amount of
$126,000. As part of this agreement, the Company will not pursue collection of
the judgment against the GC until the appeal by the owner against the GC's
judgment has been resolved. The Company anticipates collecting this receivable
in full, plus accrued interest at 9.15% starting June 1997. Based upon
discussions with counsel, the appellate ruling is expected by July 1999.
Consequently, the Company has classified this receivable as a long-term other
asset and has recorded $4,000 of the accrued interest as of December 31, 1997.

4. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
-------------- --------- ---------
Transportation equipment................ 2-6 $ 438 $ 906
Machinery and equipment................. 2-7 1,500 1,930
Computer and telephone equipment........ 2-7 524 1,198
Land, building and leasehold
improvements.......................... 3-25 280 339
Furniture and fixtures.................. 2-10 627 675
--------- ---------
3,369 5,048
Less -- Accumulated depreciation and
amortization.......................... (2,380) (2,853)
--------- ---------
Property and equipment, net........ $ 989 $ 2,195
========= =========

F-27
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Activity in the Company's allowance for doubtful accounts receivable
consists of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Balance at beginning of period.......... $ 130 $ 130
Additions to costs and expenses......... 229 19
Deductions for uncollectible receivables
written off and recoveries............ (229) (19)
--------- ---------
Balance at end of period........... $ 130 $ 130
========= =========

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade................. $ 2,331 $ 3,606
Accrued compensation and benefits....... 781 762
Accrued income taxes.................... 347 --
Warranty liabilities.................... 180 180
Other accrued expenses.................. 170 216
--------- ---------
$ 3,809 $ 4,764
========= =========

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Costs incurred on contracts in
progress................................ $ 8,146 $ 6,613
Estimated earnings, net of losses....... 915 406
--------- ---------
9,061 7,019
Less -- Billings to date................ (9,934) (7,985)
--------- ---------
$ (873) $ (966)
========= =========
Costs and estimated earnings in excess
of billings on uncompleted
contracts............................. $ 324 $ 786
Less -- Billings in excess of costs and
estimated earnings on uncompleted
contracts............................. (1,197) (1,752)
--------- ---------
$ (873) $ (966)
========= =========

6. LINE OF CREDIT AND LONG-TERM OBLIGATIONS:

As of December 31, 1997, the Company has a line of credit with a bank in
the amount of $2,500,000, less outstanding letters of credit of $10,000 which
were canceled in June 1998. The line expires on July 1, 1998. As of December 31,
1996 and 1997, the outstanding balance on the line of credit was $0 and
$1,825,000, respectively. On March 2, 1998, $395,000 was refinanced into a
long-term note. Borrowings under this line bear interest at the bank's prime
rate (8.5% at December 31, 1997), plus 1.5%, and are limited to 55% of eligible
accounts receivable. As of December 31, 1997, $665,000 was available under the
line of credit. The line of credit and long-term notes payable are
collateralized by substantially all of the assets of the Company, the majority
stockholder's residence and the personal guarantees of the

F-28
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

stockholders. D.C. Taylor is continuing to operate under the terms of the line
of credit subsequent to July 1, 1998 and is in the process of negotiating terms
for a renewal (unaudited).

Long-term obligations consist of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Note payable to bank with a balance
of $473 at December 31, 1997, was
refinanced on March 2, 1998. The
new note is payable in monthly
installments of $27, including
interest at 8.5% per annum through
February 2, 2001, when the
remaining principal is due......... $ -- $ 868
Note payable to bank in monthly
installments of $16, including
interest at 9.0% per annum through
August 2000........................ -- 451
Note payable to bank in monthly
installments of $7 including
interest at 9% per annum through
April 2001......................... -- 257
Note payable to former stockholder
for the purchase of preferred stock
due in monthly installments of $7,
including interest at 9% per annum,
through August 2000................ 246 187
Other long-term debt................. 120 51
Capital lease obligations............ 35 13
--------- ---------
401 1,827
Less -- Current maturities........... (144) (544)
--------- ---------
$ 257 $ 1,283
========= =========

The agreements contain certain restrictive covenants, including
restrictions relating to additional debt, investments, mergers, leases,
advances, timely submission of financial statements, maintenance of certain
required ratios, capital expenditures, repurchase of the Company's common stock
and payment of cash dividends.

The maturities of long-term obligations as of December 31, 1997, are as
follows (in thousands):

Year ending December 31 --
1998.......................... $ 544
1999.......................... 606
2000.......................... 559
2001.......................... 118
---------
$ 1,827
=========

7. LEASES:

The Company leases transportation equipment under several operating lease
agreements. Total rent expense for the years ended December 31, 1995, 1996 and
1997, was $317,000, $361,000 and $388,000, respectively, on these leases. During
1997, the Company renewed the lease for its office and warehouse facilities
under a new agreement which expires July 31, 2002. The lease requires monthly
payments of $13,000.

As discussed in Note 10, the Company acquired certain assets from NRC
Universal, Inc. (NRC). As part of this transaction, the Company subleased office
and warehouse facilities and a parking lot in Phoenix from NRC. The monthly
payments are $9,000 under this sublease.

F-29
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Rent expense related to these facility leases was $49,000, $94,000 and
$176,000 for the years ended December 31, 1995, 1996 and 1997, respectively.

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

Year ending December 31 --
1998.......................... $ 712
1999.......................... 610
2000.......................... 544
2001.......................... 365
2002.......................... 130
---------
$ 2,361
=========

8. DEFERRED CONTRACT REVENUE:

During the last quarter of 1996, a customer of the Company offered to
prepay, for a discount, a contract that the Company was to commence work under
in early 1997. The Company accepted the offer for prepayment which was received
by the Company prior to December 31, 1996, and recorded as deferred contract
revenue.

9. INCOME TAXES:

Federal and state income taxes are as follows (in thousands):

YEAR ENDED DECEMBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
Federal:
Current............................ $ 95 $ 402 $ 38
Deferred........................... 39 (70) 106
State:
Current............................ 20 64 2
Deferred........................... 6 (13) 13
--------- --------- ---------
$ 160 $ 383 $ 159
========= ========= =========

Actual income tax expense differs from income tax expense computed by
applying the U.S. federal statutory corporate rate of 34 percent to income
before provision for income taxes as follows (in thousands):

YEAR ENDED DECEMBER 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
Provision at the statutory rate......... $ 129 $ 327 $ 125
Increase resulting from:
Permanent differences, primarily
meals and entertainment.......... 14 22 24
State income taxes, net of benefit
for federal deduction............ 17 34 10
--------- --------- ---------
$ 160 $ 383 $ 159
========= ========= =========

F-30
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Deferred income tax provisions result from temporary differences in the
recognition of income and expenses for financial reporting purposes and for tax
purposes. The tax effects of these temporary differences, representing deferred
tax assets and liabilities, result principally from the following (in
thousands):

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Deferred income tax assets:
Property and equipment............. $ 57 $ 12
Allowance for doubtful accounts.... 49 49
Liabilities and accrued expenses... 101 119
Contracts.......................... 229 206
Other.............................. 14 34
--------- ---------
Total deferred income tax
assets.................... 450 420
--------- ---------
Deferred income tax liabilities:
Prepaid expenses................... (11) (100)
--------- ---------
Total deferred income tax
liability................. (11) (100)
--------- ---------
Net deferred income tax
assets.................... $ 439 $ 320
========= =========

As of December 31, 1996 and 1997, current deferred tax assets of $368,000
and $308,000, respectively, are included in prepaid expenses and other current
assets. As of December 31, 1996 and 1997, long-term deferred tax assets of
$71,000 and $12,000, respectively, are included in other assets.

10. RELATED-PARTY TRANSACTIONS:

During the year ended December 31, 1997, the Company purchased inventory,
supplies, equipment and a portion of future contracted work for $693,000, from
NRC Universal, Inc. (NRC), an Arizona based roofing contractor. The purchase
price approximated the carrying value of the assets on NRC's books. NRC is a
wholly owned subsidiary of Taylor Roofing Services, Inc., a related company
owned by the stockholders of the Company. For the year ended December 31, 1996,
the Company had subcontracted activity of approximately $406,000 to NRC with
approximately $246,000 payable at December 31, 1996. During the year ended
December 31, 1997, the Company provided equipment, vehicles, project management
and administrative services to NRC of approximately $343,000 and had advances to
NRC, net of payments from NRC of approximately $249,000. The Company has a
receivable totaling $49,000 and $448,000 at December 31, 1996 and 1997,
respectively, from NRC relating to start-up costs incurred in 1996 and those
services and assets purchased in 1997. Approximately $325,000 of this receivable
was collected through June 5, 1998.

During the year ended December 31, 1996, the Company purchased certain
assets, liabilities, contracts in progress and future contracted work from
Cypress Roof Corporation ("Cypress"), a California based roofing contractor.
The purchase price approximated the carrying value of the assets on Cypress'
books. The majority stockholder of the Company owns 91% of Cypress. During 1996,
D.C. Taylor had $47,000 in accounts payable relating to this purchase. In
addition, D.C. Taylor had a note receivable from Cypress, the interest income of
which was approximately $22,000 and $16,000 in 1995 and 1996, respectively. Of
these amounts, approximately $22,000 and $ -- was receivable at December 31,
1995 and 1996, respectively. As of December 31, 1997, D.C. Taylor had
approximately $4,000 payable to Cypress. D.C. Taylor also has construction
subcontracts with Cypress. For the years ended December 31, 1995 and 1996, D.C.
Taylor had

F-31
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

subcontracted activity of approximately $359,000 and $141,000, respectively,
with approximately $170,000 and $ -- payable at December 31, 1995 and 1996,
respectively.

As of December 31, 1995, 1996 and 1997, the Company has advances receivable
from one of its stockholders of $190,000, $97,000 and $220,000, respectively.
Interest income for 1995, 1996 and 1997 on the advances was $37,000, $24,000 and
$8,000, respectively, with a $6,000, $2,000 and $14,000 receivable as of
December 31, 1995, 1996 and 1997, respectively. During the year ended December
31, 1996, the Company had a note payable to the wife of Mr. Taylor, all of which
had been paid as of December 31, 1996. Interest expense on this note in 1996
approximated $1,500.

11. EMPLOYEE BENEFIT PLAN:

The Company maintains a 401(k) retirement plan for the benefit of qualified
employees. The Company makes contributions to the savings plan equal to $.40 per
hour worked for hourly employees. Contributions expensed for the year ended
December 31, 1995, 1996 and 1997, were $75,000, $83,000 and $113,000,
respectively, for hourly employees.

12. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
line of credit and other long-term obligations. The carrying value of these
instruments on the accompanying balance sheets approximates their fair value.

13. COMMITMENTS AND CONTINGENCIES:

LITIGATION

D.C. Taylor is a co-defendant in a lawsuit brought by Sears, Roebuck and
Co. ("Sears"). The lawsuit, SEARS ROEBUCK & CO. VS. JPS ELASTOMERICS AND D.C.
TAYLOR CO., No. 9707210 was filed on July 21, 1997 in the Circuit Court of Cook
County, Illinois. The claims brought by Sears relate to approximately 160 roofs
installed in 1983, 1985 and 1986 on buildings owned by Sears. The manufacturer
of the roofing membrane is also a defendant in the lawsuit. Sears' claims
include negligence, breach of warranty and other tort claims against D.C. Taylor
in both recommending roofing materials and in installing the roofing systems,
and the lawsuit requests replacement costs, property damage and other damages.
No specific damages amounts are claimed in the petition. D.C. Taylor believes
that it has insurance coverage for these claims, subject to certain deductibles
and ceilings; however, insurance coverage under certain policies is disputed.
D.C. Taylor believes the allegations brought in the lawsuit referenced above are
without merit and that it has a number of strong defenses, including statutes of
limitations, statutes of repose, contractual limitations, expiration of the
applicable warranty provisions in the parties' agreements, and failure on the
part of Sears to comply with the notice requirements and other terms of the
warranty provisions. D.C. Taylor is defending, and will continue to defend,
vigorously the claims brought against it. D.C. Taylor is unable, however, to
predict the outcome of this suit or the costs to be incurred in connection with
its defense and there can be no assurance that the litigation will be resolved
in D.C. Taylor's favor or that insurance will cover all claims or defense costs.

GUARANTY

The Company has guaranteed an obligation of a related company, Taylor
Roofing Services, Inc. (Taylor), in the amount of $250,000 as of December 31,
1997. As of June 5, 1998, the obligation of Taylor is $180,000. This guaranty
has been collateralized by a general business security agreement on the
Company's assets. As of February 2, 1998, Taylor had total assets of $261,000
and total liabilities of $252,000.

F-32
<PAGE>
D.C. TAYLOR CO.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

INSURANCE

The Company carries a broad range of insurance coverage, including business
auto liability, general liability and an umbrella policy. The Company has not
incurred significant claims or losses on any of these insurance policies.

The Company utilizes retrospectively rated premium plans for its workers'
compensation and general liability insurance policies under which claims
incurred in the current or prior years may result in additional expense or
refund to the Company each year until the year of final settlement of all
claims. The workers' compensation and general liability policies contain
stop-loss provisions on individual claims in excess of $150,000 and $100,000,
respectively, that will be paid by the Company's insurance carrier. The annual
premiums the Company pays to its insurance carrier include an amount for
anticipated losses under the deductible portion of the respective policy. This
portion of the premium is based upon various retro factors as determined and
calculated by the Company's insurance carrier. For the years ended December 31,
1995, 1996 and 1997, other income (expense) of $323,000, $307,000 and $(74,000),
respectively, was recorded based on retro audits of previous years.

The Company has elected to self-insure certain employee benefits for
medical and dental care. Claims up to $35,000 annually for each participant will
be paid by the Company with a minimum aggregate stop-loss coverage, based on the
number of participants as of the beginning of the insurance year. All claims in
excess of the aggregate stop-loss amount or the $35,000 for each participant
will be paid by an insurance carrier. The monthly premiums paid by the Company
and its employees include an amount calculated by the insurance carrier to cover
the estimated cost of the self-insured portion of the policy.

14. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

In July 1998, the Company and its stockholders entered into a definitive
agreement with INCOM Roofing Services, Inc. (INCOM), pursuant to which all
outstanding shares of the Company's common stock will be exchanged for cash and
shares of INCOM common stock, concurrent with the consummation of the initial
public offerings in the United States and Canada and outside the United States
and Canada (the Offerings) of additional common stock by INCOM. In addition, the
key executives of the Company entered into employment agreements with the
Company and INCOM which have an initial term of five years, and generally
restrict the disclosure of confidential information as well as restrict
competition with the Company and INCOM for a period of two years following
termination of employment.

F-33

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Seyforth Roofing Co., Inc. and Affiliate:

We have audited the accompanying combined balance sheets of Seyforth
Roofing Co., Inc. (a New Mexico corporation) and Affiliate as of December 31,
1996 and 1997, and the related combined statements of operations, cash flows and
shareholder's equity for the years ended December 31, 1995, 1996, and 1997.
These combined financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these combined
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 audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Seyforth
Roofing Co., Inc. and Affiliate as of December 31, 1996 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period then ended in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Dallas, Texas
June 22, 1998

F-34
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
ASSETS
DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- ----------

(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents.......... $ 435 $ 648 $ 553
Accounts receivable --
Trade, net of allowance of
$117, $117 and $117,
respectively.............. 3,225 4,713 3,761
Retainage..................... 887 1,045 815
Other receivables............. 26 5 16
Costs and estimated earnings in
excess of billings on uncompleted
contracts......................... 579 934 950
Inventories........................ 195 102 134
Prepaid expenses and other current
assets............................ 443 186 138
--------- --------- ----------
Total current assets..... 5,790 7,633 6,367
PROPERTY AND EQUIPMENT, net............. 1,375 1,624 1,786
OTHER ASSETS............................ -- -- 120
--------- --------- ----------
Total assets............. $ 7,165 $ 9,257 $8,273
========= ========= ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Current maturities of long-term
obligations....................... $ 1,411 $ 1,903 $1,997
Accounts payable and accrued
expenses.......................... 2,886 3,758 2,945
Billings in excess of costs and
estimated earnings on uncompleted
contracts......................... 1,087 796 937
--------- --------- ----------
Total current
liabilities.......... 5,384 6,457 5,879
LONG-TERM OBLIGATIONS, net of current
maturities............................ 494 407 395
COMMITMENTS AND CONTINGENCIES
SHAREHOLDER'S EQUITY:
Common stock, $1 par value, 100,000
shares (each company) authorized;
1,000 shares (each company) issued
and outstanding as of December 31,
1996 and 1997, and March 31,
1998.............................. 2 2 2
Additional paid-in capital......... 100 100 100
Retained earnings.................. 1,185 2,291 1,897
--------- --------- ----------
Total shareholder's
equity............... 1,287 2,393 1,999
--------- --------- ----------
Total liabilities and
shareholder's
equity............... $ 7,165 $ 9,257 $8,273
========= ========= ==========

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

F-35
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES............................. $ 22,339 $ 28,975 $ 31,086 $ 5,872 $ 6,220
COST OF SERVICES (including
depreciation)...................... 17,377 22,641 22,850 4,061 4,822
--------- --------- --------- --------- ---------
Gross profit............... 4,962 6,334 8,236 1,811 1,398
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 4,738 6,086 6,864 1,542 1,715
--------- --------- --------- --------- ---------
Income (loss) from
operations................. 224 248 1,372 269 (317)
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (106) (220) (207) (61) (38)
Other........................... 43 23 83 5 46
--------- --------- --------- --------- ---------
Other income (expense),
net..................... (63) (197) (124) (56) 8
--------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES....................... 161 51 1,248 213 (309)
PROVISION FOR INCOME TAXES........... 12 -- 5 -- --
--------- --------- --------- --------- ---------
NET INCOME (LOSS).................... $ 149 $ 51 $ 1,243 $ 213 $ (309)
========= ========= ========= ========= =========
</TABLE>

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

F-36
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................. $ 149 $ 51 $ 1,243 $ 213 $ (309)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating
activities --
Depreciation and amortization... 147 244 317 66 74
Loss (gain) on sale of property
and equipment................. 3 (30) (143) -- (18)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........ (2,153) 1,453 (1,646) (1,197) 1,181
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (168) (130) (355) (94) (16)
Inventories................ (94) 36 93 12 (32)
Prepaid expenses and other
current assets............. 39 (93) 279 69 38
Increase (decrease) in --
Accounts payable and
accrued expenses........ 888 (735) 872 30 (813)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 537 (255) (292) 216 141
Other, net...................... 36 2 (1) -- (120)
--------- --------- --------- --------- ---------
Net cash provided by
(used in) operating
activities............ (616) 543 367 (685) 126
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment....................... -- -- 19 -- --
Additions of property and
equipment....................... (461) (863) (442) (222) (218)
--------- --------- --------- --------- ---------
Net cash used in
investing
activities............ (461) (863) (423) (222) (218)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on long-term
obligations..................... 930 4,141 4,217 888 1,559
Payments on long-term
obligations........................ (345) (3,435) (3,811) (214) (1,477)
Distributions to shareholder....... (50) (17) (137) -- (85)
--------- --------- --------- --------- ---------
Net cash provided by
(used in) financing
activities............ 535 689 269 674 (3)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... (542) 369 213 (233) (95)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 608 66 435 435 648
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 66 $ 435 $ 648 $ 202 $ 553
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................ $ 106 $ 220 $ 219 $ 58 $ 38
Income taxes.................... (35) 12 -- -- 5
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Equipment acquired under capital
leases............................. -- 129 -- -- --

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-37
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
---------------- PAID-IN RETAINED SHAREHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- --------- --------------
BALANCE, December 31, 1994.............. 2,000 $ 2 $ 100 $ 1,052 $1,154
Distributions to shareholder....... -- -- -- (50) (50)
Net income......................... -- -- -- 149 149
------ ------ ---------- --------- --------------
BALANCE, December 31, 1995.............. 2,000 2 100 1,151 1,253
Distributions to shareholder....... -- -- -- (17) (17)
Net income......................... -- -- -- 51 51
------ ------ ---------- --------- --------------
BALANCE, December 31, 1996.............. 2,000 2 100 1,185 1,287
Distributions to shareholder....... -- -- -- (137) (137)
Net income......................... -- -- -- 1,243 1,243
------ ------ ---------- --------- --------------
BALANCE, December 31, 1997.............. 2,000 2 100 2,291 2,393
Distributions to shareholder
(unaudited)...................... -- -- -- (85) (85)
Net income (unaudited)............. -- -- -- (309) (309)
------ ------ ---------- --------- --------------
BALANCE, March 31, 1998 (unaudited)..... 2,000 $ 2 $ 100 $ 1,897 $1,999
====== ====== ========== ========= ==============

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-38
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

The combined financial statements include the accounts of Seyforth Roofing
Co., Inc. (Seyforth), a New Mexico corporation, and SRC, Inc. (SRC), a Texas
corporation (collectively, the Company). Seyforth is in the business of
providing roofing installation and repair services primarily for mid-size to
large industrial and commercial facilities. SRC currently does not have active
operations; however, SRC provides certain administrative services to Seyforth.
Because Seyforth and SRC are owned by the same individual, combined financial
statements have been presented. All significant intercompany accounts and
transactions have been eliminated. The Company performs the majority of its
contract work under fixed price contracts, with contract terms generally ranging
from one to 12 months. The Company performs the majority of its work in Texas,
New Mexico and Alabama.

The Company and its shareholder intend to enter into a definitive agreement
with INCOM Roofing Services, Inc. (INCOM), pursuant to which all outstanding
shares of the Company's common stock will be exchanged for cash and shares of
INCOM common stock concurrently with the consummation of an initial public
offering (the Offering) of common stock by INCOM.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM COMBINED FINANCIAL INFORMATION

The interim combined financial statements as of March 31, 1998, and for the
three months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company's management, the unaudited interim combined
financial statements contain all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The results of
operations for the interim combined periods are not necessarily indicative of
the results for the entire fiscal year.

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

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. Depreciation and
amortization expense was approximately $147,000, $244,000 and $317,000 for the
years ended December 31, 1995, 1996 and 1997, respectively.

F-39
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

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 combined statements of operations.

REVENUE RECOGNITION

The Company 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 date to total estimated costs for each contract.
Contract costs include all direct material and labor costs and those indirect
costs related to contract performance, such as indirect labor, supplies, tools
and repairs. Provisions for the total estimated losses on uncompleted contracts
are made in the period in which such losses are determined. Changes in job
performance, scope or other conditions may result in revisions to costs and/or
revenue. The effects of these changes are reflected in estimated contract costs
when identified and are reflected in estimated revenues pursuant to the contract
terms when agreed to by both parties. An amount equal to contract costs
attributable to claims is included in estimated revenues when agreed to by both
parties.

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 the Company's experience with
similar contracts in recent years, the retainage balance at each combined
balance sheet date will be collected within the subsequent fiscal year.

WARRANTY COSTS

For certain contracts, the Company warrants labor for two years after
installation of a new roof. The Company generally does not warrant labor for
repair of existing roofs. A reserve for warranty costs is recorded based upon
the historical level of warranty claims and management's estimate of future
costs.

INCOME TAXES

Seyforth has elected S Corporation status pursuant to Internal Revenue Code
Section 1362. Federal income tax which results from income generated in an S
Corporation is the liability of the individual shareholder. Accordingly, these
financial statements do not include any provision for federal income taxes
applicable to Seyforth.

SRC follows the liability method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes." Under this method, deferred assets and
liabilities are recorded for future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and are
measured using the enacted tax rates and laws that will be in effect when the
underlying assets or liabilities are recovered or settled.

USE OF ESTIMATES

F-40
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

REALIZATION OF LONG-LIVED ASSETS

The Company follows the provisions of SFAS 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 an impairment of such property is necessary.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the currently reported net income (loss) attributable to common
shareholders.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------ --------- ---------
Transportation equipment................ 5-10 $ 585 $ 641
Machinery and equipment................. 5-10 939 1,372
Computer and telephone equipment........ 5 96 103
Building and leasehold improvements..... 39 216 243
Furniture and fixtures.................. 5-10 49 12
--------- ---------
1,885 2,371
Less -- Accumulated depreciation and
amortization.......................... (510) (747)
--------- ---------
Property and equipment, net........ $ 1,375 $ 1,624
========= =========

The Company leases certain machinery and equipment under agreements
classified as capital leases. These leases are treated as if the Company had
purchased the equipment and are accordingly included in machinery and equipment
above. Capital lease machinery and equipment consists of $180 and $127 at
December 31, 1996 and 1997, respectively.

F-41
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade................. $ 2,219 $ 2,876
Accrued compensation and benefits....... 392 595
Other accrued expenses.................. 275 287
--------- ---------
$ 2,886 $ 3,758
========= =========

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
----------------------
1996 1997
---------- ----------
Costs incurred on contracts in
progress.............................. $ 11,017 $ 15,240
Estimated earnings, net of losses....... 3,372 5,159
---------- ----------
14,389 20,399
Less -- Billings to date................ (14,897) (20,261)
---------- ----------
$ (508) $ 138
========== ==========
Costs and estimated earnings in excess
of billings on uncompleted
contracts............................. $ 579 $ 934
Less -- Billings in excess of costs and
estimated earnings on uncompleted
contracts............................. (1,087) (796)
---------- ----------
$ (508) $ 138
========== ==========

5. LONG-TERM OBLIGATIONS:

Long-term obligations at December 31 consist of the following (in
thousands):

1996 1997
--------- ---------
Borrowings under line of credit......... $ 1,183 $ 1,631
Installment notes, payable in monthly
installments ranging from $.6 to $5,
bearing interest at rates ranging from
prime (8.25% and 8.5% at December 31,
1996 and 1997) plus 1.25% to 1.5%,
final payments due ranging from July
1998 to July 1999..................... 275 172
Installment notes, payable in monthly
installments ranging from $.3 to $3,
bearing interest at rates ranging from
7% to 11.25%, final payments due
ranging from October 1999 to August
2001.................................. 299 418
Borrowings under capital leases, due at
various dates through
June 2000............................. 148 89
--------- ---------
1,905 2,310
Less -- Current maturities.............. (1,411) (1,903)
--------- ---------
$ 494 $ 407
========= =========

F-42
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The maturities of long-term obligations as of December 31, 1997, are as
follows (in thousands):

LINE OF
CREDIT AND
INSTALLMENT CAPITAL
NOTES LEASES
----------- -------
Year ending December 31 --
1998............................... $ 1,854 $ 49
1999............................... 139 32
2000............................... 47 8
2001............................... 172 --
2002............................... -- --
Thereafter......................... 9 --
----------- -------
$ 2,221 $ 89
=========== =======

Seyforth has a commitment with a bank under which advances drawn on the
commitment convert to installment notes (the Installment Notes). Under the terms
of the commitment, Seyforth could borrow up to $350,000 in 1996 and 1997. At
December 31, 1996 and 1997, Seyforth's long-term obligations include Installment
Notes totaling approximately $281,000 and $308,000, respectively, leaving
$69,000 and $42,000, respectively, available for future borrowing. The
Installment Notes are collateralized by accounts receivable, inventory, and
property and equipment and are due on May 20, 1998. As described in Note 14,
Seyforth renewed and amended its Installment Notes commitment effective June 4,
1998.

Seyforth has a $2,000,000 revolving line of credit (the Line of Credit)
with a bank. The Line of Credit expires May 20, 1998, and bears interest at
prime plus 1 percent. The Line of Credit is renewable annually and is secured by
accounts receivable, inventory and equipment. As described in Note 14, Seyforth
renewed and amended its Line of Credit effective June 4, 1998.

Seyforth's Line of Credit contains restrictive covenants which, among other
things, require a certain minimum current ratio, as well as certain minimum
ratios with respect to liabilities and net worth, interest coverage and debt
coverage. Additionally, the Line of Credit restricts the payment of dividends
and the borrowing of additional money.

6. LEASES:

The Company leases office space, buildings and equipment under agreements
classified as operating leases. Additionally, the Company leases certain
specialized equipment on an as-needed basis. Rental expense under all of these
leases was approximately $598,000, $1,049,000 and $1,326,000 during the years
ended December 31, 1995, 1996 and 1997, respectively, of which approximately
$81,000, $431,000 and $706,000, respectively, was included in cost of revenues
earned during the year.

The Company leases certain equipment under agreements classified as capital
leases. These leases are treated as if the Company had purchased the equipment
and are accordingly included in fixed assets.

F-43
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1997, future minimum lease payments under these
noncancelable operating leases are as follows (in thousands):

Year ending December 31 --
1998............................. $ 163
1999............................. 72
2000............................. 70
2001............................. 5
2002............................. --
Thereafter....................... --
---------
$ 310
=========

7. INCOME TAXES:

Income taxes are provided on the earnings of SRC under the provisions of
SFAS No. 109. Temporary differences between the financial reporting and tax
bases of assets and liabilities of SRC are not material as of December 31, 1996
and 1997. In addition, differences in total income tax expense and the amount of
income taxes that would result from applying statutory tax rates to SRC's pretax
income for the years ended December 31, 1995, 1996 and 1997 are not material.

8. RELATED-PARTY TRANSACTIONS:

The Company leases certain building facilities used in their operations
from its shareholder. The lease agreements provide for monthly rentals of
approximately $15,000, $12,000 and $13,000 on a monthly basis in 1995, 1996 and
1997, respectively. Total rent paid to the shareholder under these agreements
was approximately $189,000, $154,000 and $159,000 for the years ended December
31, 1995, 1996 and 1997, respectively.

Seyforth contracted certain employee services from SRC during 1995 and
1996. Seyforth recognized approximately $117,000 and $40,000 of such costs in
1995 and 1996, respectively. These transactions have been eliminated in the
accompanying combined financial statements.

9. EMPLOYEE BENEFIT PLAN:

Seyforth has a 401(k) profit-sharing plan which was terminated in October
1994 and restarted in September 1997, retroactive to January 1, 1997. The plan
provides for Seyforth to match one-half of the first 6 percent of salary
contributed by each employee. Seyforth's matching contribution is a
discretionary percentage of electing contributions and totaled approximately
$42,000 in 1997. Seyforth had accrued approximately $15,000 at December 31,
1997, for contributions to be funded in the subsequent fiscal year.

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
line of credit and debt. The Company believes that the carrying value of these
instruments on the accompanying combined balance sheets approximates their fair
value.

11. COMMITMENTS AND CONTINGENCIES:

LITIGATION

The Company is involved in disputes or 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 the Company's combined
financial position or results of operations.

F-44
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

INSURANCE AND CONTINGENCIES

OTHER

As construction contractors, the Company has entered into commitments and
is exposed to various contingencies, including certain claims pending against
the Company, which arose in the ordinary course of business. In the opinion of
management, all such matters have been adequately provided for, are without
merit or are of such kind that, if disposed of unfavorably, would not have a
material adverse effect on the Company's combined financial position.

The Company has a standby letter of credit in the amount of $55,000
expiring May 1, 2001. The letter of credit relates to workers' compensation
claims that may remain open beyond May 1, 2001, and provides security on policy
deductibles that may be recoverable from the Company.

12. RISK CONCENTRATION:

The Company grants credit, generally without collateral, to its customers,
which are primarily general contractors located primarily in the southern and
southwestern United States. Consequently, the Company is subject to potential
credit risk related to changes in business and economic factors within the
southern and southwestern United States. However, management believes that its
contract acceptance, billing and collection policies are adequate to minimize
the potential credit risk.

13. COMBINED SHAREHOLDER'S EQUITY:

Combined shareholder's equity at December 31, 1996, consists of the
following (in thousands):

SRC SEYFORTH TOTAL
--------- -------- ---------
Common stock, $1 par, 100,000 shares
(each company) authorized; 1,000
shares (each company) issued and
outstanding........................ $ 1 $ 1 $ 2
Additional paid-in capital........... 100 -- 100
Retained earnings.................... 650 535 1,185
--------- -------- ---------
$ 751 $ 536 $ 1,287
========= ======== =========

Combined shareholder's equity at December 31, 1997, consists of the
following (in thousands):

SRC SEYFORTH TOTAL
--------- -------- ---------
Common stock, $1 par, 100,000 shares
(each company) authorized; 1,000
shares (each company) issued and
outstanding........................ $ 1 $ 1 $ 2
Additional paid-in capital........... 100 -- 100
Retained earnings.................... 681 1,610 2,291
--------- -------- ---------
$ 782 $1,611 $ 2,393
========= ======== =========

F-45
<PAGE>
SEYFORTH ROOFING CO., INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

14. EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

Effective June 4, 1998, Seyforth renewed and amended its $2,000,000 Line of
Credit with a bank and its $350,000 Installment Notes commitment with a bank.
The amended Line of Credit provides for borrowings up to $3,000,000 and bears
interest at prime plus 0.5 percent. The amended Installment Notes provide for
additional borrowings up to $300,000 bearing interest at prime plus 1.25 percent
and conversion of the original outstanding balances of advances converted to
installment notes of approximately $247,000 at June 4, 1998, to one new
installment note bearing interest at prime plus 1.25 percent.

F-46

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To NU-TEC Roofing Contractors, Inc.:

We have audited the accompanying balance sheets of NU-TEC Roofing
Contractors, Inc., an Indiana corporation, as of December 31, 1996 and 1997, and
the related statements of operations, cash flows and stockholders' equity for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of NU-TEC Roofing Contractors,
Inc., as of December 31, 1996 and 1997, and the results of its operations and
its cash flows for each of the three years in the period then ended in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Indianapolis, Indiana
June 5, 1998

F-47
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 183 $ 95 $ 9
Accounts receivable --
Trade, net of allowance of
$92, $128 and $137,
respectively............ 3,353 4,337 4,256
Retainage.................. 1,478 1,493 1,333
Related parties............ 87 141 137
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 402 568 686
Inventories, net................ 453 708 445
Prepaid expenses and other
current assets.................. 51 70 44
--------- --------- ------------
Total current
assets................ 6,007 7,412 6,910
PROPERTY AND EQUIPMENT, net.......... 1,280 1,714 1,698
OTHER ASSETS......................... 127 155 159
--------- --------- ------------
Total assets.......... $ 7,414 $ 9,281 $8,767
========= ========= ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations..................... $ 767 $ 999 $ 638
Accounts payable and accrued
expenses........................ 3,332 3,742 3,152
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 757 1,196 1,330
--------- --------- ------------
Total current
liabilities........... 4,856 5,937 5,120
LONG-TERM OBLIGATIONS, net of current
maturities........................... 713 769 726
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value,
1,000 shares authorized, 220
shares issued and
outstanding................... 220 220 220
Retained earnings............... 1,625 2,355 2,701
--------- --------- ------------
Total stockholders'
equity................ 1,845 2,575 2,921
--------- --------- ------------
Total liabilities and
stockholders'
equity................ $ 7,414 $ 9,281 $8,767
========= ========= ============

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

F-48
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES................................ $ 23,288 $ 25,534 $ 28,589 $ 6,093 $ 7,381
COST OF SERVICES (including
depreciation)......................... 19,531 21,017 23,281 5,255 6,160
--------- --------- --------- --------- ---------
Gross profit.................. 3,757 4,517 5,308 838 1,221
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.............................. 2,548 2,995 3,475 589 695
--------- --------- --------- --------- ---------
Income from operations........ 1,209 1,522 1,833 249 526
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net...................... (177) (240) (217) (16) (26)
Other.............................. 53 94 53 -- 7
--------- --------- --------- --------- ---------
Other income (expense), net... (124) (146) (164) (16) (19)
--------- --------- --------- --------- ---------
NET INCOME.............................. $ 1,085 $ 1,376 $ 1,669 $ 233 $ 507
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-49
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................ $ 1,085 $ 1,376 $ 1,669 $ 233 $ 507
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities --
Depreciation and amortization...... 206 282 389 62 97
Loss (gain) on sale of property and
equipment........................ (28) (10) (23) 4 --
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........... (1,858) 307 (1,052) 4 245
Costs and estimated earnings
in excess of billings on
uncompleted contracts...... (43) 94 (167) (175) (118)
Inventories................... (169) 4 (256) 2 263
Prepaid expenses and other
assets..................... (32) (17) (47) 11 22
Increase (decrease) in --
Accounts payable and accrued
expenses................... 1,318 43 410 (271) (590)
Billings in excess of costs
and estimated earnings on
uncompleted contracts...... 412 (136) 439 (139) 134
--------- --------- --------- --------- ---------
Net cash provided by (used
in) operating
activities............... 891 1,943 1,362 (269) 560
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment........................ 33 8 32 7 --
Additions of property and
equipment........................ (482) (513) (831) (285) (69)
--------- --------- --------- --------- ---------
Net cash used in investing
activities............... (449) (505) (799) (278) (69)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under
line of credit................... (84) (568) 210 481 (362)
Borrowings (payments) of long-term
debt, net........................ 126 (59) 79 80 (54)
Distributions to stockholders...... (710) (724) (940) (126) (161)
--------- --------- --------- --------- ---------
Net cash provided by (used
in) financing
activities............... (668) (1,351) (651) 435 (577)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................... (226) 87 (88) (112) (86)
CASH AND CASH EQUIVALENTS, beginning of
period................................ 322 96 183 183 95
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period................................ $ 96 $ 183 $ 95 $ 71 $ 9
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest............. $ 182 $ 247 $ 230 $ 39 $ 44
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Equipment acquired under capital
leases........................... -- 32 64 64 12

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-50
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>

COMMON STOCK TOTAL
---------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------ ------ --------- -------------
BALANCE, December 31, 1994.............. 220 $ 220 $ 598 $ 818
Distributions to stockholders...... -- -- (710) (710)
Net income......................... -- -- 1,085 1,085
------ ------ --------- -------------
BALANCE, December 31, 1995.............. 220 220 973 1,193
Distributions to stockholders...... -- -- (724) (724)
Net income......................... -- -- 1,376 1,376
------ ------ --------- -------------
BALANCE, December 31, 1996.............. 220 220 1,625 1,845
Distributions to stockholders...... -- -- (939) (939)
Net income......................... -- -- 1,669 1,669
------ ------ --------- -------------
BALANCE, December 31, 1997.............. 220 220 2,355 2,575
Distributions to stockholders
(unaudited)...................... -- -- (161) (161)
Net income (unaudited)............. -- -- 507 507
------ ------ --------- -------------
BALANCE, March 31, 1998 (unaudited)..... 220 $ 220 $ 2,701 $ 2,921
====== ====== ========= =============

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-51
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

NU-TEC Roofing Contractors, Inc. (the Company), an Indiana corporation,
provides roofing installation and repair services primarily for mid-sized to
large industrial and commercial facilities. The Company performs the majority of
its contract work under fixed price arrangements with contract terms generally
ranging from one week to 18 months. The Company performs work in Indiana, Ohio
and Florida, with the majority of its work in Indianapolis, Indiana, and Tampa,
Florida.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable at December 31, 1996 and 1997, included insignificant
claims and unapproved change orders which were expected to be collected within
the fiscal year.

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

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
remaining life of the lease or the estimated useful life of the asset.
Depreciation expense on property and equipment was $206,000, $282,000 and
$389,000 for the years ended December 31, 1995, 1996 and 1997, respectively.

F-52
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE RECOGNITION

Revenues from construction contracts are recognized on the
percentage-of-completion method measured by the percentage of costs incurred to
date to total estimated costs for each contract. Contract costs include all
direct material and labor costs and those indirect costs related to contract
performance, such as indirect labor, supplies, 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, scope or other conditions may result in revisions to costs and/or
revenue. The effects of these changes are reflected in estimated contract costs
when identified and are reflected in estimated revenues pursuant to the contract
terms when agreed to by both parties. An amount equal to contract costs
attributable to claims is included in estimated revenues when agreed to by both
parties.

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 the Company's experience with
similar contracts in recent years, the retention balance at each balance sheet
date is expected to be collected within the subsequent fiscal year.

WARRANTY COSTS

For certain contracts, the Company warrants labor for two years after
installation of a new roof. The Company generally warrants labor for two years
after repair of existing roofs. A reserve for future warranty costs is recorded
based upon the historical level of warranty claims and management's estimate of
future costs. The Company is generally not responsible for faulty materials
under warranty repairs as these costs are covered by various manufacturers'
warranties.

INCOME TAXES

The Company has elected S Corporation status effective January 1, 1985, as
defined by the Internal Revenue Code, whereby the Company itself is not subject
to taxation for federal purposes. As an S Corporation, the Company is not
subject to taxation on income in the states in which it operates. Under S
Corporation status, the stockholders report their share of the Company's taxable
earnings or losses in their personal tax returns. Consequently, the accompanying
financial statements of the Company do not include a provision for current or
deferred taxes. The Company intends to terminate its S Corporation status
concurrently with the effective date of the Offering (see Note 1).

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

F-53
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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 an
impairment of such property is necessary.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company has no components of comprehensive income for any of the
periods presented.

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 requires that companies
report financial and descriptive information about their reportable operating
segments. Segment information to be reported is to be based upon the way
management organizes the segments for making operating decisions and assessing
performance. The Company operates in one business segment, which is roofing
services and, accordingly, believes the adoption of SFAS No. 131 will have no
effect on its financial reporting.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 3-5 $ 936 $ 1,073
Machinery and equipment.............. 5-10 1,136 1,450
Building and leasehold
improvements......................... 3-20 673 773
Furniture, fixtures and office
equipment............................ 5 366 404
--------- ---------
3,111 3,700
Less -- Accumulated depreciation and
amortization......................... (1,831) (1,986)
--------- ---------
Property and equipment, net..... $ 1,280 $ 1,714
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Activity in the Company's allowance for doubtful accounts receivable
consists of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Balance at beginning of period.......... $ 56 $ 92
Additions to costs and expenses......... 90 65
Deductions for uncollectible receivables
written off and recoveries............ (54) (29)
--------- ---------
Balance at end of period........... $ 92 $ 128
========= =========

F-54
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade................. $ 1,815 $ 2,317
Accrued profit sharing and incentive
bonus................................. 805 875
Accrued compensation and benefits....... 234 165
Accrued warranty costs.................. 132 148
Other accrued expenses.................. 346 237
--------- ---------
$ 3,332 $ 3,742
========= =========

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Costs incurred on uncompleted
contracts............................... $ 5,156 $ 5,638
Estimated earnings...................... 1,086 1,426
--------- ---------
Total contract revenue earned to
date............................. 6,242 7,064
Less -- Billings to date................ (6,597) (7,692)
--------- ---------
$ (355) $ (628)
========= =========
Costs and estimated earnings in excess
of billings on uncompleted
contracts............................. $ 402 $ 568
Less -- Billings in excess of costs and
estimated earnings on uncompleted
contracts............................. (757) (1,196)
--------- ---------
$ (355) $ (628)
========= =========

F-55
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LONG-TERM OBLIGATIONS:

LONG-TERM DEBT

Long-term debt consists of various notes payable to a bank for the purchase
of equipment and vehicles. The notes are secured by certain equipment, accounts
receivable and inventory of the Company and the personal guaranties of the
Company's officers. The notes payable consist of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Note payable requiring monthly payments
of $2, plus interest, through March
2002, interest at 9.1%................ $ -- $ 93
Note payable requiring monthly payments
of $2, plus interest, through November
2000, interest at 12.9%............... 71 53
Note payable requiring monthly payments
of $1, plus interest, through November
2000, interest at 9.3%................ 67 50
Note payable requiring monthly payments
of $1, plus interest, through August
2000, interest at 9.5%................ 52 39
Note payable requiring monthly payments
of $1, plus interest, through April
2000, interest at 9.0%................ -- 33
Note payable requiring monthly payments
of $1, plus interest, through
September 2000, interest at 9.5%...... -- 30
Other notes payable requiring monthly
payments of $8, interest at rates
ranging from 8.75% to 10.7%, maturing
at various dates through November
2000.................................. 186 142
--------- ---------
376 440
Less -- Current maturities of long-term
debt.................................. (158) (170)
--------- ---------
Long-term debt, net of current
maturities............................ $ 218 $ 270
========= =========

The maturities of long-term debt as of December 31, 1997, are as follows
(in thousands):

Year ending December 31 --
1998............................. $ 170
1999............................. 144
2000............................. 100
2001............................. 22
2002............................. 4
Thereafter....................... --
---------
$ 440
=========

LINE OF CREDIT

The Company has a $3,000,000 line of credit with a bank which expires July
1, 1998, and bears interest at 1/4 percent above the bank's prime lending rate.
At December 31, 1997, $785,000 was outstanding under this line of credit. The
line of credit contains various affirmative and negative covenants including a
requirement to maintain, as defined in the agreement, minimum working capital of
$650,000, minimum tangible net worth of $1,200,000 and a maximum ratio of total
liabilities to tangible net worth of 4.5:1.0. At December 31, 1997, the Company
was in compliance with all such covenants. Borrowings under the line of credit
are limited to a borrowing base, as defined, based upon 80 percent of the
Company's eligible trade accounts receivable and 50 percent of the Company's
eligible retainage receivables. The line of credit is

F-56
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

secured by the same collateral as the long-term debt discussed above. Effective
July 1, 1998 Nu-Tec renewed its line of credit which now expires June 30, 1999
(unaudited).

CAPITAL LEASES

The Company leases a building in Indianapolis, Indiana, from a partnership
formed by the stockholders of the Company under the terms of a 20-year capital
lease agreement expiring in June 2007. Substantially all of the Company's assets
are pledged to secure payment to the partnership under the terms of a mortgage
agreement between the partnership and a financial institution. In addition,
various equipment is leased under agreements expiring at various dates through
March 2002. The lease agreements call for aggregate monthly payments of $10,000.
Information relating to the capital leases follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Capitalized asset value................. $ 656 $ 702
Less -- Accumulated depreciation........ (328) (366)
--------- ---------
$ 328 $ 336
========= =========

Capital lease obligations consist of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Related-party capital lease obligation
for building requiring monthly
payments of $8, interest at 14.5%,
expiring in June 2007................. $ 484 $ 463
Other capital lease obligations
requiring monthly payments of $2,
interest at rates ranging from 9.5% to
15.6%, expiring at various dates
through March 2002.................... 45 80
--------- ---------
529 543
Less -- Current maturities of capital
lease obligations..................... (34) (44)
--------- ---------
Capital lease obligations, net of
current maturities.................... $ 495 $ 499
========= =========

Future minimum lease payments due under the terms of the capital leases at
December 31, 1997, are as follows (in thousands):

Year ending December 31 --
1998............................... $ 116
1999............................... 112
2000............................... 119
2001............................... 106
2002............................... 106
Thereafter......................... 409
---------
Total minimum lease
payments.................. 968
Amount representing interest ranging
from 9.5% to 15.6%.................... (425)
---------
Present value of net minimum lease
payments.............................. $ 543
=========

6. LEASES:

The Company leases its office and warehouse space in Cincinnati, Ohio, and
Tampa, Florida, under the terms of operating leases expiring in June 1998 and
January 2000, respectively. The leases provide for monthly lease payments of
$2,000 and $7,000, respectively. The Company also leases automobiles under

F-57
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the terms of operating leases expiring at various dates through October 2000.
The automobile leases provide for monthly payments aggregating $3,000 per month.

The Company leases land and a building from a related-party partnership
under the terms of an operating lease expiring in August 2002. The lease
provides for monthly payments of $3,000.

Future minimum lease payments due under the terms of the noncancelable
operating leases at December 31, 1997, are as follows (in thousands):

Year ending December 31 --
1998............................. $ 160
1999............................. 142
2000............................. 51
2001............................. 36
2002............................. 24
Thereafter....................... --
---------
$ 413
=========

The Company also leases various types of construction equipment which are
used for specific contracts. The construction equipment leases generally have
terms of 30 days or less and may be canceled at any time.

Total rent expense under all operating leases was $253,000, $459,000 and
$428,000 for 1995, 1996 and 1997, respectively.

7. RELATED-PARTY TRANSACTIONS:

RECEIVABLES

The Company has various receivables from its officers, their relatives and
employees of the Company which are included as a component of related-party
receivables on the accompanying balance sheets. During 1993, the Company loaned
approximately $48,000 to an officer of the Company under a demand promissory
note bearing interest at 6 percent. Subsequent to 1993, certain repayments and
additional borrowings have been made under this note. At December 31, 1996 and
1997, approximately $68,000 and $40,000, respectively, was outstanding under
this note.

LEASES

The Company leases its land and building from a partnership formed by the
stockholders of the Company. The Company pays this related party $8,000 per
month for the use of this facility under the terms of a capital lease which
expires in June 2007. The Company also leases an additional facility and land
from the partnership. The Company pays $3,000 per month for the use of this
facility under the terms of an operating lease which expires in August 2002 (see
Note 6).

8. EMPLOYEE BENEFIT PLANS:

The Company has a defined contribution profit-sharing plan that covers all
employees meeting certain age and service requirements. Company contributions to
the plan are at the discretion of the board of directors. Contributions to the
plan charged to operations in 1995, 1996 and 1997 were $153,000, $192,000 and
$252,000, respectively.

The Company administers a nonqualified discretionary incentive arrangement
for its nonowner employees. Company distributions are calculated based on
operations of each division. Total compensation paid under this plan in 1995,
1996 and 1997 was $390,000, $613,000 and $623,000, respectively.

F-58
<PAGE>
NU-TEC ROOFING CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
line of credit, notes payable and capital leases. The Company believes that the
carrying value of these instruments on the accompanying balance sheets
approximates their fair value.

10. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE

During 1997, the Company began to self-insure for medical claims up to
$30,000 per covered individual per year and $412,000 in the aggregate per year.
The Company has recorded reserves for its portion of self-insured claims based
on estimated claims incurred through December 1997.

In January 1998, the Company began to self-insure workers' compensation
claims in the state of Florida up to $250,000 per incident and $615,000 in the
aggregate per year.

11. MAJOR CUSTOMERS AND RISK CONCENTRATION:

During the three years ended December 31, 1997, the Company did not have
sales greater than 10 percent of total sales to any one customer. The Company
had purchases totaling 10 percent or more of total purchases from three major
vendors (comprising approximately 14 percent, 11 percent and 10 percent of total
purchases), four major vendors (comprising approximately 17 percent, 14 percent,
13 percent and 13 percent of total purchases), two major vendors (comprising
approximately 15 percent and 12 percent of total purchases) and three major
vendors (comprising approximately 21 percent, 12 percent and 11 percent of total
purchases) during the years ended December 31, 1995, 1996, 1997, and the three
months ended March 1998, respectively.

In addition, the Company grants credit, generally without collateral, to
its customers, which are primarily general contractors located primarily in
Indiana, Ohio and Florida. Consequently, the Company is subject to potential
credit risk related to changes in business and economic factors within those
regions. However, management believes that its contract acceptance, billing and
collection policies are adequate to minimize the potential credit risk.

12. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

F-59

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Beta Construction Company and Affiliate:

We have audited the accompanying combined balance sheets of Beta
Construction Company and Affiliate as of September 30, 1996 and 1997, and the
related combined statements of operations, cash flows and stockholders' equity
for each of the three years in the period ended September 30, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Beta
Construction Company and Affiliate as of September 30, 1996 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended September 30, 1997, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri
June 18, 1998

F-60
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
ASSETS
SEPTEMBER 30,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------

(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents.......... $ 967 $ 3,118 $ 1,382
Accounts receivable --
Trade, net of allowance $169,
$169 and $169,
respectively............... 4,331 5,821 4,192
Retainage..................... 1,576 2,177 1,414
Other......................... 295 162 349
Costs and estimated earnings in
excess of billings on uncompleted
contracts........................ 373 380 498
Inventories........................ 515 542 633
Prepaid expenses and other
assets........................... 369 341 549
--------- --------- -----------
Total current assets..... 8,426 12,541 9,017
PROPERTY AND EQUIPMENT, net............. 924 1,446 1,355
NOTES RECEIVABLE FROM RELATED PARTY..... 1,103 1,108 1,000
--------- --------- -----------
Total assets............. $ 10,453 $ 15,095 $11,372
========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations...................... $ -- $ -- $ 73
Accounts payable and accrued
expenses......................... 2,553 4,995 1,710
Billings in excess of costs and
estimated earnings on uncompleted
contracts........................ 1,002 502 662
--------- --------- -----------
Total current
liabilities........... 3,555 5,497 2,445
--------- --------- -----------
LONG-TERM OBLIGATIONS, net of current
maturities............................ -- -- 260
--------- --------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 and $.01 par
value, 100,000 and 1,000 shares
authorized, 8,750 and 50 shares
issued and outstanding at
September 30, 1996 and 1997,
9,831 and 56 shares issued and
outstanding as of March 31, 1998,
for Beta Construction Company and
Hampton Supply, Inc.,
respectively..................... 9 9 10
Additional paid-in capital......... -- -- 673
Retained earnings.................. 6,889 9,589 7,984
--------- --------- -----------
Total stockholders'
equity................ 6,898 9,598 8,667
--------- --------- -----------
Total liabilities and
stockholders'
equity................ $ 10,453 $ 15,095 $11,372
========= ========= ===========

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

F-61
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

SIX MONTHS
YEAR ENDED SEPTEMBER 30, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES................................ $ 17,061 $ 17,728 $ 24,032 $ 6,690 $ 9,349
COST OF SERVICES (including
depreciation)......................... 12,647 12,792 15,457 4,857 6,661
--------- --------- --------- --------- ---------
Gross profit.................. 4,414 4,936 8,575 1,833 2,688
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.............................. 3,207 3,074 4,988 1,253 2,113
--------- --------- --------- --------- ---------
Income from operations........ 1,207 1,862 3,587 580 575
--------- --------- --------- --------- ---------
OTHER INCOME:
Interest income.................... 118 153 114 53 129
Other.............................. 123 14 106 15 44
--------- --------- --------- --------- ---------
Other income, net............. 241 167 220 68 173
--------- --------- --------- --------- ---------
NET INCOME.............................. $ 1,448 $ 2,029 $ 3,807 $ 648 $ 748
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-62
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

SIX MONTHS
YEAR ENDED SEPTEMBER 30, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................... $ 1,448 $ 2,029 $ 3,807 $ 648 $ 748
Adjustments to reconcile net income
to net cash provided by
operating activities --
Depreciation.................... 179 198 254 93 163
Loss (gain) on sale of property
and
equipment..................... 3 (50) (4) 1 --
Issuance of stock bonus......... -- -- -- -- 674
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable, net... (1,060) (842) (1,958) 2,134 2,205
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (444) 293 (7) (544) (118)
Inventories................ (124) 171 (27) (118) (91)
Prepaid expenses and other
current assets.......... (94) (140) 28 (32) (208)
Notes
receivable -- noncurrent... (220) 117 (5) 103 108
Increase (decrease) in --
Accounts payable and
accrued expenses........ 1,162 (353) 2,442 (1,195) (3,285)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 618 117 (500) (739) 160
--------- --------- --------- --------- ---------
Net cash provided by
operating activities.... 1,468 1,540 4,030 351 356
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and
equipment....................... (325) (70) (772) (253) (72)
--------- --------- --------- --------- ---------
Net cash used in
investing
activities............ (325) (70) (772) (253) (72)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term
obligations..................... -- -- -- -- 333
Payments on loans.................. (14) (29) -- -- --
Distributions to stockholder....... (19) (2,241) (1,107) (968) (2,353)
--------- --------- --------- --------- ---------
Net cash used in
financing
activities............ (33) (2,270) (1,107) (968) (2,020)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... 1,110 (800) 2,151 (870) (1,736)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 657 1,767 967 967 3,118
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 1,767 $ 967 $ 3,118 $ 97 $ 1,382
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-63
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
------------------ PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------- ---------- --------- --------------
BALANCE, September 30, 1994.......... 8,800 $ 9 $ -- $ 5,672 $ 5,681
Distributions to stockholders... -- -- -- (19) (19)
Net income...................... -- -- -- 1,448 1,448
------ ------- ---------- --------- --------------
BALANCE, September 30, 1995.......... 8,800 9 -- 7,101 7,110
Distributions to stockholders... -- -- -- (2,241) (2,241)
Net income...................... -- -- -- 2,029 2,029
------ ------- ---------- --------- --------------
BALANCE, September 30, 1996.......... 8,800 9 -- 6,889 6,898
Distributions to stockholders... -- -- -- (1,107) (1,107)
Net income...................... -- -- -- 3,807 3,807
------ ------- ---------- --------- --------------
BALANCE, September 30, 1997.......... 8,800 9 -- 9,589 9,598
Issuance of stock bonus
(Unaudited)................... 1,087 1 673 -- 674
Distributions to stockholders
(Unaudited)................... -- -- -- (2,353) (2,353)
Net income (Unaudited).......... -- -- -- 748 748
------ ------- ---------- --------- --------------
BALANCE, March 31, 1998
(Unaudited)........................ 9,887 $ 10 $ 673 $ 7,984 $ 8,667
====== ======= ========== ========= ==============

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-64
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Beta Construction Company and Hampton Supply, Inc. (collectively, the
Company) focus on providing roofing installation, waterproofing and repair
services primarily for mid-sized to large institutional and commercial
facilities. The Company performs the majority of its contract work under fixed
price contracts and fixed price contracts modified by incentive and penalty
provisions, with contract terms generally ranging from one month to three years.
The Company performs the majority of its work in the Washington, D.C.,
metropolitan area.

The combined financial statements for the Company include the individual
statements of Beta Construction Company and Hampton Supply, Inc. which are 89
percent owned by Paul Gordon and 11 percent owned by four executives at March
31, 1998.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

The interim financial statements as of March 31, 1998, and for the six
months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company's management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation. The results of operations for the
interim periods are not necessarily indicative of the results for the entire
fiscal year.

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

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. Depreciation expense was
approximately $179,000, $198,000 and $254,000 for the years ended December 31,
1995, 1996 and 1997, respectively.

F-65
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

depreciation are removed from the accounts and any resulting gain or loss is
recognized in the statements of operations.

REVENUE RECOGNITION

The Company 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 date to total estimated costs for each contract.
Contract costs include all direct material and labor costs and those indirect
costs related to contract performance, such as indirect labor, supplies, 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, scope or other conditions may result in
revisions to costs and/or revenue. The effects of these changes are reflected in
estimated contract costs when identified and are reflected in estimated revenues
pursuant to the contract terms when agreed to by both parties. An amount equal
to contract costs attributable to claims is included in estimated revenues when
agreed to by both parties.

WARRANTY COSTS

For certain contracts, the Company warrants labor after installation of a
new roof. A reserve for warranty costs is recorded based upon the historical
level of warranty claims and management's estimate of future costs.

INCOME TAXES

The Company is an S Corporation for federal and state income tax purposes.
Under this election, the taxable income of the Company is included in the
taxable income of the stockholders. C Corporation taxes are paid for revenues
earned in Washington, D.C.; however, all C Corporation taxes paid are deducted
from the majority stockholder's tax return each year. As such, no provision for
federal or state income taxes has been reflected in the accompanying financial
statements.

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

F-66
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

asset are compared to the asset's carrying amount to determine if an impairment
of such property is necessary.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the currently reported net income attributable to common
stockholders.

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 requires that companies
report financial and descriptive information about their reportable operating
segments. Segment information to be reported is to be based upon the way
management organizes the segments for making operating decisions and assessing
performance. The Company operates in one business segment, which is roofing
services, and accordingly, believes the adoption of SFAS No. 131 will have no
effect on its financial reporting.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED SEPTEMBER 30,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 2-4 $ 573 $ 1,066
Machinery and equipment.............. 2-4 554 651
Furniture and office equipment....... 2-4 731 676
Building and leasehold
improvements....................... 8-32 769 827
--------- ---------
2,627 3,220
Less -- Accumulated depreciation and
amortization....................... (1,703) (1,774)
--------- ---------
Property and equipment,
net..................... $ 924 $ 1,446
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

SEPTEMBER 30,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 1,105 $ 1,348
Accrued compensation and benefits.... 942 1,460
Accrued subcontractor retention and
expense............................ 39 1,718
Other accrued expenses............... 467 469
--------- ---------
$ 2,553 $ 4,995
========= =========

F-67
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Roofing installation contracts in progress are as follows (in thousands):

SEPTEMBER 30,
----------------------
1996 1997
---------- ----------
Costs incurred on contracts in
progress........................... $ 22,677 $ 24,677
Estimated earnings, net of losses.... 10,945 15,885
---------- ----------
33,622 40,562
Less -- Billings to date............. (34,251) (40,684)
---------- ----------
$ (629) $ (122)
========== ==========
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... $ 373 $ 380
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (1,002) (502)
---------- ----------
$ (629) $ (122)
========== ==========

5. LINE OF CREDIT:

The Company has a $1,750,000 line of credit with a bank. The line of credit
expires February 28, 1999, and bears interest at the prime lending rate.

6. LEASES:

The Company leases a facility from one of the Company's stockholders. The
lease expires on November 1, 2002. The Company has an option to renew the lease
for one additional five-year term on the same terms. The rent paid under this
related-party lease was approximately $135,000 for each of the years ended
September 30, 1995, 1996 and 1997. The Company also leases two automobiles from
a third party, which expire on November 21, 1998, and November 5, 1999. The
amount paid under these leases was approximately $17,000 and $27,000 for the
years ended September 30, 1996 and 1997, respectively.

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

Year ending September 30 --
1998............................ $ 162
1999............................ 145
2000............................ 135
2001............................ 135
2002............................ 135
Thereafter...................... 11

7. RELATED-PARTY TRANSACTIONS:

The Company is a guarantor on a commercial mortgage loan of the majority
stockholder on the property occupied by the Company. The balance outstanding at
September 30, 1996 and 1997, was approximately $735,000 and $692,000,
respectively. Pursuant to the terms of the mortgage loan, payments are to be
made in monthly installments of $9,000, including principal and interest, with a
balloon payment due January 2001. Interest is calculated on the outstanding
principal balance at an annual rate of 8.50 percent.

The Company has an unsecured promissory note receivable dated June 22,
1994, for $1,000,000, due from the stockholder. Interest accrues on the
outstanding balance at an annual rate of 6.5 percent payable

F-68
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

annually; principal balance matures in June 1999, and has been assigned and
pledged as collateral for a line of credit to a bank.

The Company rents a storage lot from its majority stockholder on an annual
basis. Rent expense charged to operations for the years ended September 30,
1995, 1996 and 1997, was $20,000 each year, respectively.

In addition, the Company rents another facility from its stockholder on an
annual basis. Rent of $2,500 is payable monthly and the amount charged to
operations under this lease for the years ended September 30, 1995, 1996 and
1997 was $30,000 each year, respectively.

8. EMPLOYEE BENEFIT PLAN:

PENSION PLAN CONTRIBUTIONS

The Company maintains a purchase pension and trust plan (pension plan) for
the benefit of employees who work on construction contracts subject to the
Davis-Bacon Act, Service Contract Act or to any other federal, state or
municipal prevailing wage law. The pension plan allows for employer
contributions in amounts equal to the hourly contribution rates designated for
each covered employee's employment classification in each construction contract.
The aggregate annual addition to a participant's account under this pension plan
shall not exceed the lesser of 25 percent of the participant's compensation for
the pension plan year or $30,000. Employees performing services for such
construction contracts are immediately eligible to participate in the pension
plan and are fully vested.

Pension contributions for the years ended September 30, 1995, 1996 and
1997, totaled $109,000, $278,000 and $163,000, respectively.

PROFIT-SHARING PLAN

The Company participates in a qualified profit-sharing plan (plan) for the
benefit of employees who are not covered under a union-sponsored plan. To be
eligible to participate in the plan, all such employees must be at least 21
years of age and have completed one year of service, provided pay was received
for at least 1,000 hours of service during such year or any prior plan year.
Eligible employees may contribute from 2 percent to 10 percent of their total
pay, not to exceed $9,500 as adjusted for future cost of living increases,
during any calendar year.

The Company will contribute an amount equal to 50 percent of the employees'
contributions up to a maximum 3 percent of their total pay each pay period.
Company profit-sharing contributions are determined each year at the discretion
of the board of directors and are paid out of current or accumulated profits.
After two years of service with the Company, an employee's interest in the plan
becomes 20 percent vested. Each year thereafter, the employee's vested interest
increases 20 percent until 100 percent vesting is reached upon completing six
years of service. An employee will also become fully vested by attaining age 65,
in the event of a permanent disability or in the event of death while employed.

The Company's profit-sharing plan contributions charged to operations for
the years ended September 30, 1995, 1996 and 1997, were $96,000, $103,000 and
$107,000, respectively. Profit-sharing plan contributions of $41,000 and $58,000
were accrued for at September 30, 1996 and 1997, respectively.

9. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents
and a line of credit. The Company believes that the carrying value of these
instruments on the accompanying combined balance sheets approximates their fair
value.

F-69
<PAGE>
BETA CONSTRUCTION COMPANY AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE

The Company carries a broad range of insurance coverage, including business
auto liability, general liability and an umbrella policy. Additionally, the
Company has workers' compensation coverage for the states in which it operates.
The Company has not incurred significant claims or losses on any of these
insurance policies.

The Company is self-insured for medical claims up to $30,000 per year per
covered individual with a maximum annual aggregate exposure of $276,000. The
Company has recorded reserves for its portion of self-insured claims based on
estimated claims incurred through September 30, 1996 and 1997.

11. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company had sales of 11 percent and 40 percent of total sales to one
major customer during the years ended September 30, 1995 and 1997, respectively.
The Company had sales of 24 percent and 11 percent to two major customers during
the year ended September 30, 1996.

In addition, the Company grants credit, generally without collateral, to
its customers, which are companies located primarily in Washington, D.C.,
metropolitan area. Consequently, the Company is subject to potential credit risk
related to changes in business and economic factors within the metropolitan
area. However, management believes that its contract acceptance, billing and
collection policies are adequate to minimize the potential credit risk.

12. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED)

F-70

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Evans Service Company, Inc., and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Evans
Service Company, Inc., and subsidiaries (the Company) as of December 31, 1996
and 1997, and the related consolidated statements of operations, cash flows and
stockholders' equity for each of the years in the three-year period ended
December 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Evans
Service Company, Inc., and subsidiaries as of December 31, 1996 and 1997, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

New Orleans, Louisiana
June 4, 1998

F-71
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 1,029 $ 1,079 $ 14
Accounts receivable --
Trade, net of allowance of
$74, $74 and $74,
respectively............ 1,657 3,142 3,347
Retainage.................. 229 499 777
Notes receivable, related
parties....................... 10 187 174
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 217 308 350
Inventories, net................ 322 305 315
Prepaid expenses and other
current assets................ 200 305 323
--------- --------- -----------
Total current
assets............. 3,664 5,825 5,300
PROPERTY AND EQUIPMENT, net.......... 458 791 807
OTHER ASSETS......................... 155 180 180
--------- --------- -----------
Total assets.......... $ 4,277 $ 6,796 $ 6,287
========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued
expenses...................... $ 1,215 $ 2,533 $ 1,716
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 429 1,184 1,395
Other current liabilities....... 9 21 20
--------- --------- -----------
Total current
liabilities........ 1,653 3,738 3,131
--------- --------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 par value, 30,000,
30,000 and 30,000 shares
authorized, 1, 15,243 and 15,250
shares issued and outstanding,
respectively....................... 1 15 15
Additional paid-in capital...... -- 26 28
Retained earnings............... 2,623 3,017 3,113
--------- --------- -----------
Total stockholders'
equity............. 2,624 3,058 3,156
--------- --------- -----------
Total liabilities and
stockholders'
equity............. $ 4,277 $ 6,796 $ 6,287
========= ========= ===========

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

F-72
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES............................. $ 12,281 $ 15,875 $ 17,832 $ 1,783 $ 5,023
COST OF SERVICES (including
depreciation)...................... 9,822 12,534 13,672 1,351 3,979
--------- --------- --------- --------- ---------
Gross profit............... 2,459 3,341 4,160 432 1,044
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 2,329 2,597 3,518 709 894
--------- --------- --------- --------- ---------
Income (loss) from
operations.............. 130 744 642 (277) 150
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (14) 32 29 13 6
Other........................... 90 23 25 4 3
--------- --------- --------- --------- ---------
Other income, net.......... 76 55 54 17 9
--------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES......... 206 799 696 (260) 159
PROVISION (BENEFIT) FOR INCOME
TAXES.............................. 87 333 288 (107) 63
--------- --------- --------- --------- ---------
NET INCOME (LOSS).................... $ 119 $ 466 $ 408 $ (153) $ 96
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

F-73
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................. $ 119 $ 466 $ 408 $ (153) $ 96
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating
activities --
Depreciation.................... 127 136 196 18 60
Loss (gain) on sale of property
and equipment................. (1) (13) (12) (12) --
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........ 644 260 (1,755) (82) (483)
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (289) 149 (91) 63 (42)
Inventories................ 61 (18) 17 (1) (10)
Prepaid expenses and other
current assets.......... 106 (10) (105) 30 (18)
Increase (decrease) in --
Accounts payable and
accrued expenses........ (367) 442 1,318 100 (817)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... (201) (343) 755 (151) 211
Other, net...................... (34) 130 (14) (108) --
--------- --------- --------- --------- ---------
Net cash provided by
(used in) operating
activities............ 165 1,199 717 (296) (1,003)
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment... 65 -- -- -- --
Gain on sale of investment......... (63) -- -- -- --
Proceeds from sale of property and
equipment....................... 4 12 12 12 --
Additions of property and
equipment....................... (114) (249) (529) (92) (76)
--------- --------- --------- --------- ---------
Net cash used in
investing
activities............ (108) (237) (517) (80) (76)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes receivable....... (3) (10) (252) (84) --
Payments on notes receivable....... 92 26 76 -- 14
Borrowings of long-term debt....... 53 -- -- -- --
Payments of long-term debt......... (57) (108) -- -- --
Proceeds from issuance of common
stock........................... -- -- 26 10 --
Purchase of treasury stock......... (13) (302) -- -- --
--------- --------- --------- --------- ---------
Net cash provided by
(used in) financing
activities............ 72 (394) (150) (74) 14
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... 129 568 50 (450) (1,065)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 332 461 1,029 1,029 1,079
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 461 $ 1,029 $ 1,079 $ 579 $ 14
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................ $ 29 $ 7 $ 4 $ -- $ 1
Income taxes.................... 104 198 417 -- 113

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

F-74
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
------------------- PAID-IN RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
--------- ------- ----------- --------- --------- -------------
Balance, December 31, 1994........... 4,800 $ 26 $ 2 $ 2,798 $ (473) $ 2,353
Purchase of treasury stock...... -- -- -- -- (12) (12)
Net income...................... -- -- -- 119 -- 119
--------- ------- --- --------- --------- -------------
Balance, December 31, 1995........... 4,800 26 2 2,917 (485) 2,460
Purchase of treasury stock...... -- -- -- -- (302) (302)
Net income...................... -- -- -- 466 -- 466
--------- ------- --- --------- --------- -------------
Balance, December 31, 1996........... 4,800 26 2 3,383 (787) 2,624
Reorganization and retirement of
treasury stock................ (4,700) (25) (2) (760) 787 --
--------- ------- --- --------- --------- -------------
Balance, December 31, 1996 after
reorganization..................... 100 1 -- 2,623 -- 2,624
9-for-1 stock dividend.......... 15,000 14 -- (14) -- --
Issuance of 143 shares of $1 par
value common stock............ 143 -- 26 -- -- 26
Net income...................... -- -- -- 408 -- 408
--------- ------- --- --------- --------- -------------
Balance, December 31, 1997........... 15,243 15 26 3,017 -- 3,058
Sale of Common Stock
(Unaudited)................... 7 -- 2 -- -- 2
Net income (unaudited).......... -- -- -- 96 -- 96
--------- ------- --- --------- --------- -------------
Balance, March 31, 1998
(unaudited)........................ 15,250 $ 15 $ 28 $ 3,113 $ -- $ 3,156
========= ======= === ========= ========= =============

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

F-75
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION AND BASIS OF PRESENTATION:

Evans Service Company, Inc., a New York corporation, and subsidiaries
(collectively, the Company) focuses on providing roofing installation and repair
services primarily for mid-sized to large industrial and commercial facilities.
The Company performs the majority of its contract work under fixed price
contracts, with contract terms generally ranging from three to nine months. The
Company performs the majority of its work in the eastern United States.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the parent
company, Evans Service Company, Inc. (ESC), and its 100 percent owned
subsidiaries, Charles F. Evans Company, Inc., and CFE, Inc. All significant
intercompany accounts and transactions have been eliminated.

REORGANIZATION

ESC commenced operations on January 1, 1997, as the result of an approved
plan of reorganization which is summarized below:

a. CFE, Inc., which was a wholly owned subsidiary of Charles F. Evans
Company, Inc., was merged with Liquid Control Systems, Inc., an affiliated
company. CFE, Inc., was the surviving corporation. This transaction was
accounted for as a pooling of interests as of December 31, 1996 in the
accompanying financial statements. The summarized assets and liabilities of
the separate companies on January 1, 1997, were as follows (in thousands):

LIQUID CONTROL COMBINED
CFE, INC. SYSTEMS, INC. TOTAL
--------- --------------- ---------
Cash................................. $ 74 $ 682 $ 756
Accounts receivable.................. 460 946 1,406
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... 84 23 107
Inventory............................ 6 93 99
Prepaid expenses and other current
assets............................. 24 21 45
Property and equipment, net.......... 74 92 166
Cash value of life insurance......... -- 31 31
Note receivable, officer............. -- 5 5
--------- --------------- ---------
722 1,893 2,615
Current liabilities.................. (371) (669) (1,040)
Deferred income taxes................ (5) (7) (12)
--------- --------------- ---------
$ 346 $ 1,217 $ 1,563
========= =============== =========

All intercompany assets and liabilities were eliminated from the
amounts shown above.

b. The 100 outstanding shares of $100 par value common stock of CFE,
Inc., were exchanged for 755 shares of $1 par value common stock of ESC
resulting in a complete transfer of ownership in CFE, Inc. from Charles F.
Evans Company, Inc. to ESC.

c. The treasury stock of Charles F. Evans Company, Inc., was retired.

d. The remaining 1,510 outstanding shares of $10 par value Charles F.
Evans Company, Inc., common stock were converted to one share of $1 par
value common stock and additional paid-in capital in excess of par of
$15,099.

F-76
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

e. The one outstanding share of $1 par value common stock of Charles
F. Evans Company, Inc., was exchanged for 755 shares of $1 par value common
stock of ESC, resulting in a complete transfer of ownership in Charles F.
Evans Company, Inc., to ESC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

The interim financial statements as of March 31, 1998, and for the three
months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
These interim financial statements do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company's management, the unaudited
interim financial statements contain all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation. The results
of operations for the interim periods are not necessarily indicative of the
results for the entire fiscal year.

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company provides an allowance for doubtful accounts through A a general
reserve which is based upon the total trade and retainage accounts receivable
balances.

INVENTORIES

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost, using the first-in,
first-out (FIFO) method, 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 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. Depreciation expense was
$127,000, $136,000 and $196,000 for the years ended December 31, 1995, 1996 and
1997, respectively.

REVENUE RECOGNITION

The Company recognizes revenue from construction contracts on the
percentage-of-completion method measured by the percentage of labor hours
incurred to date to total estimated labor hours for each contract. Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, 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, scope or other conditions may result in
revisions to costs and/or revenue. The

F-77
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

effects of these changes are reflected in estimated contract costs when
identified and are reflected in estimated revenues pursuant to the contract
terms when agreed to by both parties. An amount equal to contract costs
attributable to claims is included in estimated revenues when agreed to by both
parties.

Prior to work commencing, a formal contract is signed with the customer. In
the case of nonpayment, in certain states, the Company has the ability to secure
its position by filing a lien against the work performed.

WARRANTY COSTS

For certain contracts, the Company warrants labor for two years after
installation of a new roof. A reserve for warranty costs is recorded based upon
management's estimate of future costs.

INCOME TAXES

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the currently reported net income (loss) attributable to common
stockholders.

F-78
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------ --------- ---------
Land................................. -- $ 29 $ 29
Transportation equipment............. 4 186 470
Machinery and equipment.............. 3-6 263 381
Computer and telephone equipment..... 3-5 145 181
Building and leasehold
improvements....................... 10-15 251 289
Furniture and fixtures............... 10 106 125
--------- ---------
980 1,475
Less -- Accumulated depreciation..... (522) (684)
--------- ---------
Property and equipment, net..... $ 458 $ 791
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 499 $ 1,792
Accrued compensation and benefits.... 716 741
--------- ---------
$ 1,215 $ 2,533
========= =========

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Costs incurred on contracts in
progress........................... $ 3,799 $ 5,795
Estimated earnings, net of losses.... 569 867
--------- ---------
4,368 6,662
Less -- Billings to date............. (4,580) (7,538)
--------- ---------
$ (212) $ (876)
========= =========
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... $ 217 $ 308
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (429) (1,184)
--------- ---------
$ (212) $ (876)
========= =========

F-79
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. LINES OF CREDIT:

The Company has lines of credit totaling $0.8 million, $0.5 million and
$0.1 million with Chemung Canal Trust Company at December 31, 1997. Borrowings
on the lines of credit bear interest at the prime rate, which is currently 8.5
percent, and are unsecured. The Company did not have any outstanding debt as of
December 31, 1996 or 1997. Effective April 24, 1998, Evans renewed and amended
its revolving lines of credit which total $3.1 million and which expire on April
30, 1999, and bear interest at the prime rate.

6. LEASES:

The Company leased a facility from family members of a former officer of
the Company during the years ended December 31, 1995, 1996 and 1997. The lease
expired on January 31, 1997, at which time HEIA, a partnership which is owned by
some of the officers of the Company, purchased this facility and renewed the
lease for 10 years, to expire on February 1, 2007. The rent paid under these
related party leases for the years ended December 31, 1995, 1996 and 1997, was
approximately $31,000, $31,000 and $38,000, respectively.

Future minimum lease payments under all noncancelable operating leases are
as follows (in thousands):

Year ending December 31 --
1998............................ $ 110
1999............................ 79
2000............................ 38
2001............................ 38
2002............................ 38
Thereafter...................... 154
---------
$ 457
=========

7. INCOME TAXES:

Federal and state income taxes are as follows (in thousands):

YEAR ENDED DECEMBER 31,
--------------------------
1995 1996 1997
---- ----- -----
Federal --
Current......................... $60 $ 240 $ 286
Deferred........................ (2 ) 19 (83)
State --
Current......................... 29 70 83
Deferred........................ -- 4 2
---- ----- -----
$87 $ 333 $ 288
==== ===== =====

F-80
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Actual income tax expense differs from income tax expense computed by
applying the U.S. federal statutory corporate rate of 34 percent to income
(loss) before provision for income taxes as follows (in thousands):

YEAR ENDED DECEMBER 31,
--------------------------
1995 1996 1997
---- ----- -----
Provision at the statutory rate...... $70 $ 272 $ 237
Increase resulting from --
Permanent differences, primarily
meals and entertainment........ 1 8 3
State income taxes, net of
benefit for federal
deduction...................... 16 53 48
---- ----- -----
$87 $ 333 $ 288
==== ===== =====

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Deferred income tax assets --
Bad debts....................... $ 30 $ 30
Reserves and accrued expenses... 91 208
Other........................... 16 3
--------- ---------
Total deferred income tax
assets.................. 137 241
--------- ---------
Deferred income tax liabilities --
Property and equipment.......... (25) (47)
--------- ---------
Total deferred income tax
liabilities............. (25) (47)
--------- ---------
Net deferred income tax
assets.................. $ 112 $ 194
========= =========

The net deferred income tax assets and liabilities, included in other
current liabilities in the accompanying balance sheets, are comprised of the
following (in thousands):

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Deferred tax assets --
Current......................... $ 121 $ 238
Long-term....................... 16 3
Deferred tax liabilities --
Long-term....................... (25) (47)
--------- ---------
Net deferred income tax
assets.................. $ 112 $ 194
========= =========

8. RELATED-PARTY TRANSACTIONS:

As discussed in Note 6, during the years ended December 31, 1995 and 1996,
the Company leased office facilities from family members of an officer. As of
December 31, 1997, the Company has a noninterest-bearing note receivable from
HEIA in the amount of $173,500 related to property purchased by

F-81
<PAGE>
EVANS SERVICE COMPANY, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

HEIA for relocation of a key employee. As of December 31, 1996 and 1997,
noninterest-bearing notes of $10,000 and $13,000, respectively, were receivable
from officers.

9. EMPLOYEE BENEFIT PLAN:

The Company has a defined contribution profit-sharing plan. The plan
provides for the Company to contribute up to 15 percent of qualified employees'
annual wages to the plan, with an annual limit of $24,000 per employee. Total
contributions accrued by the Company and paid in the first quarter of the
subsequent year under the plan were approximately $264,000, $285,000 and
$313,000 for the years ended December 31, 1995, 1996 and 1997, respectively.

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents
and line of credit, notes payable and debt. The Company believes that the
carrying value of these instruments on the accompanying balance sheets
approximates their fair value.

11. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE

12. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company had sales greater than 10 percent of total sales to one major
customer during the year ended December 31, 1996. No customer accounted for more
than 10 percent of sales in 1995 or 1997.

13. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

F-82

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Brazos Roofing International of South Dakota, Inc. and Affiliate:

We have audited the accompanying combined balance sheets of Brazos Roofing
International of South Dakota, Inc. (a South Dakota corporation) and Affiliate
as of December 31, 1996 and 1997, and the related combined statements of
operations, cash flows and shareholders' equity for the years ended December 31,
1995, 1996, and 1997. These combined financial statements are the responsibility
of the Companies' management. Our responsibility is to express an opinion on
these combined 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 audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Brazos
Roofing International of South Dakota, Inc. and Affiliate as of December 31,
1996 and 1997, and the combined results of their operations and their cash flows
for each of the three years in the period then ended in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Dallas, Texas
June 22, 1998

F-83
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 350 $ 674 $ 389
Accounts receivable --
Trade, net of allowance of
$21, $21 and $21,
respectively............ 1,520 781 1,130
Retainage.................. 148 295 7
Other receivables.......... 45 83 104
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 429 692 312
Prepaid expenses and other
current assets................ 75 27 37
--------- --------- ------------
Total current assets.... 2,567 2,552 1,979
PROPERTY AND EQUIPMENT, net.......... 1,043 1,467 1,652
--------- --------- ------------
Total assets............ $ 3,610 $ 4,019 $3,631
========= ========= ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations................... $ 456 $ 317 $ 452
Accounts payable and accrued
expenses...................... 584 729 557
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 128 -- --
--------- --------- ------------
Total current
liabilities........... 1,168 1,046 1,009
LONG-TERM OBLIGATIONS, net of current
maturities......................... 451 435 576
MINORITY INTEREST.................... -- 138 142
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $1 par value,
500,000 shares authorized as
of December 31, 1996, and
501,000 shares authorized as
of December 31, 1997, and
March 31, 1998; 100,000 shares
issued and outstanding as of
December 31, 1996 and 101,000
shares issued and outstanding
as of December 31, 1997, and
March 31, 1998................ 100 101 101
Additional paid-in capital...... -- 9 9
Retained earnings............... 1,891 2,290 1,794
--------- --------- ------------
Total shareholders'
equity................ 1,991 2,400 1,904
--------- --------- ------------
Total liabilities and
shareholders'
equity................ $ 3,610 $ 4,019 $3,631
========= ========= ============

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

F-84
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES............................. $ 3,307 $ 11,082 $ 17,035 $ 3,345 $ 1,406
COST OF SERVICES (including
depreciation)...................... 3,154 8,779 14,279 2,702 1,408
--------- --------- --------- --------- ---------
Gross profit (loss)........ 153 2,303 2,756 643 (2)
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 288 654 1,075 185 237
--------- --------- --------- --------- ---------
Income (loss) from
operations.............. (135) 1,649 1,681 458 (239)
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... 8 (70) (88) (16) (16)
Other........................... 12 38 7 7 (25)
--------- --------- --------- --------- ---------
Other income (expense),
net..................... 20 (32) (81) (9) (41)
--------- --------- --------- --------- ---------
INCOME (LOSS) BEFORE MINORITY
INTEREST........................... (115) 1,617 1,600 449 (280)
MINORITY INTEREST.................... -- -- 138 -- 4
--------- --------- --------- --------- ---------
NET INCOME (LOSS).................... $ (115) $ 1,617 $ 1,462 $ 449 $ (284)
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-85
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................. $ (115) $ 1,617 $ 1,462 $ 449 $ (284)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities --
Depreciation and amortization.... 130 180 286 43 78
Loss (gain) on sale of property
and equipment................. -- (6) 13 -- (6)
Minority interest................ -- -- 138 -- 4
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable......... (40) (1,431) 555 (720) (81)
Costs and estimated earnings
in excess of billings on
uncompleted contracts..... (77) (344) (263) 196 380
Prepaid expenses and other
current assets............ 147 (2) 48 12 (11)
Increase (decrease) in --
Accounts payable and accrued
expenses.................. 589 (184) 144 234 (172)
Billings in excess of costs
and estimated earnings on
uncompleted contracts..... 54 64 (128) (128) --
--------- --------- --------- --------- ---------
Net cash provided by (used
in) operating
activities............. 688 (106) 2,255 86 (92)
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment........................ -- 20 -- -- 8
Additions of property and
equipment........................ (395) (272) (724) (357) (265)
--------- --------- --------- --------- ---------
Net cash used in investing
activities............. (395) (252) (724) (357) (257)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term
obligations...................... 347 389 1,125 310 388
Payments of long-term
obligations...................... -- (359) (1,279) (81) (112)
Distributions to shareholders...... -- -- (1,063) -- (212)
Proceeds from issuance of common
stock............................ -- -- 10 -- --
--------- --------- --------- --------- ---------
Net cash provided by (used
in) financing
activities............. 347 30 (1,207) 229 64
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... 640 (328) 324 (42) (285)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 38 678 350 350 674
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 678 $ 350 $ 674 $ 308 $ 389
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest......................... $ 4 $ 85 $ 96 $ 20 $ 19
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITY:
Equipment acquired under capital
leases........................ 36 488 -- -- --
</TABLE>

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

F-86
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
COMBINED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
------------------- PAID-IN RETAINED SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
--------- ------- ----------- --------- --------------
BALANCE, December 31, 1994........... 100,000 $ 100 $ -- $ 389 $ 489
Net loss........................ -- -- -- (115) (115)
--------- ------- ----------- --------- --------------
BALANCE, December 31, 1995........... 100,000 100 -- 274 374
Net income...................... -- -- -- 1,617 1,617
--------- ------- ----------- --------- --------------
BALANCE, December 31, 1996........... 100,000 100 -- 1,891 1,991
Issuance of common stock........ 1,000 1 9 -- 10
Distributions to shareholders... -- -- -- (1,063) (1,063)
Net income...................... -- -- -- 1,462 1,462
--------- ------- ----------- --------- --------------
BALANCE, December 31, 1997........... 101,000 101 9 2,290 2,400
Distributions to shareholders
(unaudited)................... -- -- -- (212) (212)
Net loss (unaudited)............ -- -- -- (284) (284)
--------- ------- ----------- --------- --------------
BALANCE, March 31, 1998
(unaudited)........................ 101,000 $ 101 $ 9 $ 1,794 $ 1,904
========= ======= =========== ========= ==============

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-87
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

The combined financial statements include the accounts of Brazos Roofing
International of South Dakota, Inc. (Brazos), an S Corporation organized in
South Dakota in May 1989, and Bosque Environmental, Inc. (Bosque), an S
Corporation organized in Texas in April 1997 (collectively, the Company). Both
Brazos and Bosque have common ownership characteristics and both are in the
business of construction contracting and providing related services primarily to
U.S. governmental agencies. Because of these characteristics, combined financial
statements have been presented. All significant intercompany accounts and
transactions have been eliminated. The Company performs its contract work under
cost-plus-fee, fixed price and fixed price modified by incentive and penalty
provision contracts, with contract terms generally ranging from one to 36
months. The Company performs its work throughout the U.S.

The Company and its shareholders intend to enter into a definitive
agreement with INCOM Roofing Services, Inc. (INCOM), pursuant to which all
outstanding shares of the Company's common stock will be exchanged for cash and
shares of INCOM common stock concurrently with the consummation of an initial
public offering (the Offering) of common stock by INCOM.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM COMBINED FINANCIAL INFORMATION

The interim combined financial statements as of March 31, 1998, and for the
three months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company's management, the unaudited interim combined
financial statements contain all adjustments, consisting of normal recurring
adjustments, considered necessary for a fair presentation. The results of
operations for the interim combined periods are not necessarily indicative of
the results for the entire fiscal year.

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company provides an allowance for doubtful accounts based upon specific
identification of accounts receivable where collection is no longer probable and
a general reserve based upon the total trade and retainage accounts receivable
balances.

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. Depreciation and
amortization expense was approximately $130,000, $180,000 and $286,000 for the
years ended December 31, 1995, 1996 and 1997, respectively.

F-88
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE RECOGNITION

The Company 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 date to total estimated costs for each contract.
Contract costs include all direct material and labor costs and those indirect
costs related to contract performance, such as indirect labor, supplies, 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, scope or other conditions may result in
revisions to costs and/or revenue. The effects of these changes are reflected in
estimated contract costs when identified and are reflected in estimated revenues
pursuant to the contract terms when agreed to by both parties. An amount equal
to contract costs attributable to claims is included in estimated revenues when
agreed to by both parties.

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 the Company's experience with
similar contracts in recent years, the retainage balance at each combined
balance sheet date will be collected within the subsequent fiscal year.

WARRANTY COSTS

For certain contracts, the Company warrants labor for two years after
installation of a new roof. The Company generally does not warrant labor after
repair of existing roofs. A reserve for warranty costs is recorded based upon
the historical level of warranty claims and management's estimate of future
costs.

INCOME TAXES

The Company has elected S Corporation status pursuant to Internal Revenue
Code Section 1362. Federal income tax which results from income generated in an
S Corporation is the liability of the individual shareholders. Accordingly,
these combined financial statements do not include any provision for federal
income taxes.

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

The Company follows 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." 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 an
impairment of such property is necessary.

F-89
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the currently reported net income (loss) attributable to common
shareholders.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 5-10 $ 796 $ 1,428
Machinery and equipment.............. 5-10 754 787
Computer and telephone equipment..... 5-7 66 85
Building and leasehold
improvements....................... 7-39 91 96
Furniture and fixtures............... 5-7 34 42
--------- ---------
1,741 2,438
Less -- Accumulated depreciation and
amortization....................... (698) (971)
--------- ---------
Property and equipment,
net..................... $ 1,043 $ 1,467
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 428 $ 529
Accrued compensation and benefits.... 41 40
Other accrued expenses............... 115 160
--------- ---------
$ 584 $ 729
========= =========

F-90
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
---------------------
1996 1997
--------- ----------
Costs incurred on contracts in
progress........................... $ 6,960 $ 10,087
Estimated earnings, net of losses.... 1,660 1,710
--------- ----------
8,620 11,797
Less -- Billings to date............. (8,319) (11,105)
--------- ----------
$ 301 $ 692
========= ==========
Costs and estimated earnings in
excess of billings on
uncompleted contracts.............. $ 429 $ 692
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (128) --
--------- ----------
$ 301 $ 692
========= ==========

5. LONG-TERM OBLIGATIONS:

Long-term obligations consist of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Bank line of credit, interest at the
bank's index rate (8.5% at December
31, 1997), expires September 15,
1998............................... $ 150 $ --
Note payable to bank, repaid in
1997............................... 247 --
Note payable to bank due in monthly
installments of $9 including
principal and interest at 8.5%, due
August 1999; secured by accounts
receivable and equipment and
personally guaranteed by a
shareholder........................ -- 164
Note payable to bank due in monthly
installments of $7 including
principal and interest at bank
index rate plus .5%, due April
2002; secured by aircraft.......... -- 278
Various contracts for the purchase of
construction and transportation
equipment, with interest rates
ranging from 8.25% to 11.35% and
maturing between 1998 and 2000;
secured by equipment, required
monthly payments total $15......... 424 264
Various notes payable to banks for
transportation equipment, with
rates ranging from 8.5% to 9.5% and
maturing between 1998 and 2001;
secured by equipment............... 86 46
--------- ---------
907 752
Less -- Current maturities........... (456) (317)
--------- ---------
$ 451 $ 435
========= =========

F-91
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The maturities of long-term obligations as of December 31, 1997, are as
follows (in thousands):

Year ending December 31 --
1998............................ $ 317
1999............................ 205
2000............................ 129
2001............................ 74
2002............................ 27
Thereafter...................... --
---------
$ 752
=========

The Company has a $500,000 line of credit with a bank. The line of credit
expires September 15, 1998, and interest is payable monthly at the bank's index
rate (8.5 percent at December 31, 1997). Outstanding borrowings at December 31,
1996 and 1997, were $150,000 and $0, respectively. The line of credit is secured
by substantially all of the Company's assets and is personally guaranteed by a
shareholder. The Company intends to renew this line of credit in 1998.

6. LEASES:

The Company leases office space, buildings and equipment under agreements
classified as operating leases. Additionally, the Company leases certain
specialized equipment on an as-needed basis. Rental expense under all of these
leases was approximately $14,000, $74,000 and $144,000 during the years ended
December 31, 1995, 1996 and 1997, respectively, of which approximately $24,000
and $93,000 was included in cost of revenues earned during 1996 and 1997,
respectively.

As of December 31, 1997, future minimum lease payments under these
noncancelable operating leases are as follows (in thousands):

CAPITAL OPERATING
LEASES LEASES
-------- ---------
Year ending December 31 --
1998............................ $ 146 $ 227
1999............................ 90 31
2000............................ 60 3
2001............................ -- 1
2002............................ -- 1
Thereafter...................... -- 1
-------- ---------
296 264
-------- ---------
Less -- Amounts representing
interest........................... (32) --
-------- ---------
$ 264 $ 264
======== =========

7. RELATED-PARTY TRANSACTIONS:

The Company leases certain building facilities and transportation equipment
used in their operations from partnerships owned by two Company shareholders, as
well as from an individual shareholder. Total rents paid to related parties
under these agreements was approximately $6,000, $58,000 and $148,000 for the
years ended December 31, 1995, 1996 and 1997, respectively.

F-92
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

A construction company in South Dakota owned by two Company shareholders
subcontracts work to the Company. The Company recognized revenues from this
related party of approximately $34,000 in 1997. There were no such transactions
with this related party in prior years.

8. FINANCIAL INSTRUMENTS:

9. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE AND CONTINGENCIES

OTHER

As construction contractors, the Company has entered into commitments and
is exposed to various contingencies, including certain claims pending against
the Company which arose in the ordinary course of business. In the opinion of
management, all such matters have been adequately provided for and are without
merit or are of such kind that, if disposed of unfavorably, would not have a
material adverse effect on the Company's combined financial position.

10. RISK CONCENTRATION:

The Company grants credit, generally without collateral, to its customers,
which are primarily U.S. governmental agencies located throughout the U.S.
Consequently, the Company is subject to potential credit risk related to changes
in business and economic factors. However, management believes that its contract
acceptance, billing and collection policies are adequate to minimize the
potential credit risk.

11. COMBINED SHAREHOLDERS' EQUITY:

Combined shareholders' equity at December 31, 1997, consists of the
following (in thousands, except share data):

BRAZOS BOSQUE TOTAL
------ ------ ------
Common stock, $1 par; 501,000 shares
(500,000 related to Brazos, 1,000
related to Bosque) authorized;
101,000 shares (100,000 related to
Brazos, 1,000 related to Bosque)
issued and outstanding............. $ 100 $ 1 $ 101
Additional paid-in capital........... -- 9 9
Retained earnings.................... 2,164 126 2,290
------ ------ ------
$2,264 $ 136 $2,400
====== ====== ======

F-93
<PAGE>
BRAZOS ROOFING INTERNATIONAL OF SOUTH DAKOTA, INC. AND AFFILIATE
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

12. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED)

F-94

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Chamberlin Waterproofing & Roofing Systems, Inc.:

We have audited the accompanying balance sheets of Chamberlin Waterproofing
& Roofing Systems, Inc., as of December 31, 1996 and 1997, and the related
statements of operations, cash flows and stockholders' equity for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Chamberlin Waterproofing &
Roofing Systems, Inc., as of 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.

ARTHUR ANDERSEN LLP

Houston, Texas
June 11, 1998

F-95
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 461 $ 1,211 $1,206
Accounts receivable --
Trade, net of allowance of
$70, $50 and $56,
respectively............ 2,646 2,073 2,038
Retainage.................. 416 523 544
Other receivables.......... 38 4 4
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 479 498 446
Prepaid expenses and other
current assets................ 188 22 16
--------- --------- ------------
Total current assets.... 4,228 4,331 4,254
PROPERTY AND EQUIPMENT, net.......... 263 440 475
--------- --------- ------------
Total assets............ $ 4,491 $ 4,771 $4,729
========= ========= ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Related-party debt.............. $ 72 $ 438 $ 438
Accounts payable and accrued
expenses...................... 1,975 836 672
Dividends payable to
stockholder................... 18 -- --
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 877 1,136 989
Other accrued liabilities....... 66 61 61
--------- --------- ------------
Total current
liabilities........... 3,008 2,471 2,160
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value,
500,000 shares authorized,
413,334 shares issued and
outstanding................... 41 41 41
Additional paid-in capital...... 417 417 417
Retained earnings............... 1,672 2,489 2,758
Treasury stock, 155,000 shares,
at cost....................... (647) (647) (647)
--------- --------- ------------
Total stockholders'
equity................ 1,483 2,300 2,569
--------- --------- ------------
Total liabilities and
stockholders'
equity................ $ 4,491 $ 4,771 $4,729
========= ========= ============

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

F-96
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

YEAR ENDED DECEMBER THREE MONTHS
31, ENDED MARCH 31,
-------------------- --------------------
1996 1997 1997 1998
--------- --------- --------- ---------
(UNAUDITED)
REVENUES............................ $ 13,196 $ 12,296 $ 2,337 $ 2,232
COST OF SERVICES (including
depreciation)..................... 10,244 9,792 1,711 1,583
--------- --------- --------- ---------
Gross profit.............. 2,952 2,504 626 649
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.......................... 2,671 1,655 466 384
--------- --------- --------- ---------
Income from operations.... 281 849 160 265
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net.................. (19) (46) 8 4
Other.......................... 26 189 -- --
--------- --------- --------- ---------
Other income, net......... 7 143 8 4
--------- --------- --------- ---------
INCOME BEFORE PROVISION FOR INCOME
TAXES............................. 288 992 168 269
PROVISION FOR INCOME TAXES.......... 110 145 145 --
--------- --------- --------- ---------
NET INCOME.......................... $ 178 $ 847 $ 23 $ 269
========= ========= ========= =========

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

F-97
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR ENDED DECEMBER THREE MONTHS
31, ENDED MARCH 31,
-------------------- -------------------
1996 1997 1997 1998
--------- --------- --------- --------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................... $ 178 $ 847 $ 23 $ 269
Adjustments to reconcile net income
to net cash provided by
operating activities --
Depreciation.................... 56 94 30 30
Loss (gain) on sale of property
and equipment................. 1 (7) -- --
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable, net... (1,432) 500 884 14
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (95) (19) 141 52
Prepaid expenses and other
current assets.......... 4 166 79 6
Increase (decrease) in --
Accounts payable and
accrued expenses........ 1,000 (1,139) (1,355) (164)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 294 259 220 (147)
Other accrued
liabilities............. -- (5) -- --
--------- --------- ------- ---------
Net cash provided by
operating
activities............ 6 696 22 60
--------- --------- ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment....................... 6 7 -- --
Additions of property and
equipment....................... (116) (271) (69) (65)
--------- --------- ------- ---------
Net cash used in
investing
activities............ (110) (264) (69) (65)
--------- --------- ------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt,
related parties................. -- 580 580 --
Payments of long-term debt, related
parties......................... (223) (214) (72) --
Distributions to stockholders...... -- (48) (18) --
--------- --------- ------- ---------
Net cash provided by
(used in) financing
activities............ (223) 318 490 --
--------- --------- ------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... (327) 750 443 (5)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 788 461 461 1,211
--------- --------- ------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 461 $ 1,211 $ 904 $ 1,206
========= ========= ======= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................ $ 19 $ 46 $ 1 $ 11
Income taxes.................... 143 (54) -- --

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

F-98
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
----------------- PAID-IN RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
------- ------ ---------- --------- --------- -------------
BALANCE, December 31, 1995.............. 413,334 $ 41 $ 417 $ 1,512 $ (647) $ 1,323
Distributions to stockholders...... -- -- -- (18) -- (18)
Net income......................... -- -- -- 178 -- 178
------- ------ ---------- --------- --------- -------------
BALANCE, December 31, 1996.............. 413,334 41 417 1,672 (647) 1,483
Distributions to stockholders...... -- -- -- (30) -- (30)
Net income......................... -- -- -- 847 -- 847
------- ------ ---------- --------- --------- -------------
BALANCE, December 31, 1997.............. 413,334 41 417 2,489 (647) 2,300
Net income (unaudited)............. -- -- -- 269 -- 269
------- ------ ---------- --------- --------- -------------
BALANCE, March 31, 1998 (unaudited)..... 413,334 $ 41 $ 417 $ 2,758 $ (647) $ 2,569
======= ====== ========== ========= ========= =============

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-99
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Chamberlin Waterproofing & Roofing Systems, Inc. (the Company), provides
roofing installation and repair services primarily for mid-sized to large
industrial and commercial facilities. The Company performs the majority of its
contract work under fixed price contracts, with contract terms generally ranging
from three to 12 months. The Company performs the majority of its work in the
state of Texas.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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. Depreciation expense was
approximately $56,000 and $94,000 for the years ended December 31, 1996 and
1997, respectively.

REVENUE RECOGNITION

F-100
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Changes in job performance, scope or other conditions may result in revisions to
costs and/or revenue. The effects of these changes are reflected in estimated
contract costs when identified and are reflected in estimated revenues pursuant
to the contract terms when agreed to by both parties. An amount equal to
contract costs attributable to claims is included in estimated revenues when
agreed to by both parties.

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 the Company's experience in
recent years, the retention balance at each balance sheet date will be collected
within the subsequent fiscal year.

WARRANTY COSTS

For certain contracts, the Company warrants labor for one year after
installation of a new roof. The Company generally warrants labor for one year
after repair of existing roofs. A reserve for warranty costs is recorded based
upon the historical level of warranty claims and management's estimate of future
costs.

INCOME TAXES

The Company elected to file as a Subchapter S Corporation beginning January
1, 1997. Prior to this time, the Company was a C Corporation and followed the
liability method of accounting for income taxes in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109. Under this method, deferred
assets and liabilities are recorded for future tax consequences of temporary
differences between the financial reporting and tax bases of assets and
liabilities, and are measured using the enacted tax rates and laws that will be
in effect when the underlying assets or liabilities are recovered or settled.
The Company intends to terminate its S Corporation status concurrently with the
effective date of the Offering. Upon the Company's election to file as a
Subchapter S Corporation, the deferred tax assets were charged to expense and
included in the provision for income taxes for the year ended December 31, 1997.

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

F-101
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The display of comprehensive income does not differ materially from the
currently reported net income (loss) attributable to common stockholders.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 3-5 $ 349 $ 499
Machinery and equipment.............. 5-7 524 630
Computer and telephone equipment..... 5-7 360 363
Building and leasehold
improvements....................... 5-7 4 4
Furniture and fixtures............... 5-7 25 25
--------- ---------
1,262 1,521
Less -- Accumulated depreciation and
amortization....................... (999) (1,081)
--------- ---------
Property and equipment, net..... $ 263 $ 440
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Activity in the Company's allowance for doubtful accounts receivable
consists of the following (in thousands):

DECEMBER 31,
--------------------
1996 1997
--- ---------
Balance at beginning of period....... $ 70 $ 70
Additions (deductions) to (from)
costs and expenses................. -- (20)
--- ---------
Balance at end of period........ $ 70 $ 50
=== =========

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 596 $ 445
Accrued compensation and benefits.... 1,095 234
Other accrued expenses............... 284 157
--------- ---------
$ 1,975 $ 836
========= =========

F-102
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
---------------------
1996 1997
--------- ----------
Costs incurred on contracts in
progress........................... $ 7,073 $ 8,875
Estimated earnings, net of losses.... 1,774 2,007
--------- ----------
8,847 10,882
Less -- Billings to date............. (9,245) (11,520)
--------- ----------
$ (398) $ (638)
========= ==========
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... $ 479 $ 498
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (877) (1,136)
--------- ----------
$ (398) $ (638)
========= ==========

5. LONG-TERM OBLIGATIONS:

Related-party debt consists of notes payable to the stockholders. The notes
are due on demand with interest payable monthly at the prime lending rate plus
1.5 percent.

The Company has a $200,000 line of credit with a bank that contains certain
collateral limitations. The line of credit expires July 31, 1998, and bears
interest at 1 percent above the prime lending rate. The line of credit is
secured by accounts receivable and personal guarantees of owners. Chamberlin
renewed its line of credit, which now expires on September 30, 1998 (unaudited).

6. LEASES:

The Company leases two facilities from a partnership which is owned by the
Company's stockholders. The lease terms are month-to-month. The rent paid under
these related-party leases was approximately $104,000 for each of the years
ended December 31, 1996 and 1997. The Company also leases two facilities from
third parties, which are also on month-to-month terms. The rent paid under these
leases was approximately $39,000 and $40,000 for the years ended December 31,
1996 and 1997, respectively.

7. INCOME TAXES:

Federal and state income taxes for the year ended December 31, 1996, are as
follows (in thousands):

Federal --
Current......................... $ 98
Deferred........................ --
State --
Current......................... 12
Deferred........................ --
---------
$ 110
=========

F-103
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Provision at the statutory rate...... $ 98
Increase resulting from --
Permanent differences, primarily
meals and entertainment........ --
State income tax, net of benefit
for federal deduction.......... 12
---------
$ 110
=========

Deferred income tax provisions result from temporary differences in the
recognition of income and expenses for financial reporting purposes and for tax
purposes. The tax effects of these temporary differences, representing deferred
tax assets, result principally from the following (in thousands):

YEAR ENDED
DECEMBER 31,
1996
------------
Deferred income tax assets --
Bad debts....................... $ 25
Reserves and accrued expenses... 120
------------
Total deferred income tax
asset................... $ 145
============

All of the Company's deferred taxes are current deferred tax assets and are
included in prepaid expenses and other current assets in the accompanying
financial statements.

8. RELATED-PARTY TRANSACTIONS:

At December 31, 1996 and 1997, the Company had unsecured notes payable of
approximately $72,000 and $438,000, respectively, to the stockholders. The notes
are due on demand and accrue interest monthly at prime plus 1.5 percent.

Total interest expense on notes payable to related parties during the years
ended December 31, 1996 and 1997, was approximately $18,000 and $46,000,
respectively.

9. EMPLOYEE BENEFIT PLAN:

The Company has a defined contribution 401(k) plan. The plan provides for
the Company to contribute an amount equal to 15 percent of the amount each
employee contributes, up to a maximum of 10 percent of each employee's salary.
Total contributions by the Company under the plan were approximately $16,000 and
$14,000 for the years ended December 31, 1996 and 1997, respectively. The
Company made discretionary contributions for the years ended December 31, 1996
or 1997, of $40,000 and $0, respectively, and had no significant accrual at
December 31, 1997, for contributions to be funded in the subsequent fiscal year.

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
line of credit, notes payable and debt. The Company believes that the carrying
value of these instruments on the accompanying balance sheets approximates their
fair value.

F-104
<PAGE>
CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE

The Company is self-insured for medical claims up to $20,000 per year per
covered individual with the maximum liability to the Company of approximately
$150,000 per year. The Company includes the maximum exposure to the Company of
$150,000 when allocating premiums to the employees. The remaining insurance
accrual at December 31, 1997, was $24,000. Workers' compensation expense totaled
approximately $204,000 and $86,000 at December 31, 1996 and 1997, respectively.

In addition, the Company grants credit, generally without collateral, to
its customers, which are real estate operations and general contractors.
Consequently, the Company is subject to potential credit risk related to changes
in business and economic factors within the region. However, management believes
that its contract acceptance, billing and collection policies are adequate to
minimize the potential credit risk.

12. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

F-105

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Burns and Scalo Roofing Company, Inc.,
Cuddy Roofing Company, Inc. and Scalo, Inc.:

We have audited the accompanying combined balance sheets of Burns and Scalo
Roofing Company, Inc., Cuddy Roofing Company, Inc. and Scalo, Inc., as of
December 31, 1996 and 1997, and the related combined statements of operations,
cash flows and stockholders' equity for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Burns and
Scalo Roofing Company, Inc., Cuddy Roofing Company, Inc. and Scalo, Inc., as of
December 31, 1996 and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri
June 5, 1998

F-106
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents.......... $ 275 $ 491 $ 32
Accounts receivable --
Trade, net of allowance of
$39, $39 and $39,
respectively............... 2,463 1,666 1,814
Retainage..................... 382 299 262
Costs and estimated earnings in
excess of billings on uncompleted
contracts........................ 264 180 61
Inventories........................ 265 537 409
--------- --------- -----------
Total current assets....... 3,649 3,173 2,578
PROPERTY AND EQUIPMENT, net............. 443 575 689
--------- --------- -----------
Total assets............... $ 4,092 $ 3,748 $ 3,267
========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations...................... $ 42 $ 37 $ 37
Accounts payable and accrued
expenses......................... 2,027 1,593 1,124
Distributions payable to
stockholder...................... -- 36 36
Billings in excess of costs and
estimated earnings on uncompleted
contracts........................ 516 293 429
--------- --------- -----------
Total current
liabilities.............. 2,585 1,959 1,626
LONG-TERM OBLIGATIONS, net of current
maturities............................ 47 96 87
OTHER LONG-TERM LIABILITIES............. -- 239 216
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 par value, 50,000
shares authorized, 16,800, 17,313
and 17,794 shares issued and
outstanding, respectively; common
stock, $1 par value, 30,000
shares authorized, 30,000, 30,000
and 30,000 shares issued and
outstanding, respectively; and
common stock, no par value, 1,000
shares authorized, zero, 1,000
and 1,000 shares issued and
outstanding, respectively........ 47 47 48
Additional paid-in capital......... 425 523 622
Retained earnings.................. 988 884 668
--------- --------- -----------
Total stockholders'
equity................... 1,460 1,454 1,338
--------- --------- -----------
Total liabilities and
stockholders' equity..... $ 4,092 $ 3,748 $ 3,267
========= ========= ===========

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

F-107
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
REVENUES............................. $ 11,275 $ 14,012 $ 11,613 $ 2,366 $ 2,119
COST OF SERVICES (including
depreciation)...................... 8,207 9,996 7,100 1,585 1,488
--------- --------- --------- --------- ---------
Gross profit............... 3,068 4,016 4,513 781 631
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 2,798 3,480 3,764 663 626
--------- --------- --------- --------- ---------
Income from operations..... 270 536 749 118 5
--------- --------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (18) (43) (67) (7) (3)
Other........................... 4 61 105 -- --
--------- --------- --------- --------- ---------
Other income (expense),
net..................... (14) 18 38 (7) (3)
--------- --------- --------- --------- ---------
NET INCOME........................... $ 256 $ 554 $ 787 $ 111 $ 2
========= ========= ========= ========= =========

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-108
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- --------------------
1995 1996 1997 1997 1998
--------- --------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................... $ 256 $ 554 $ 787 $ 111 $ 2
Adjustments to reconcile net income
to net cash provided by (used
in) operating activities --
Depreciation and amortization... 116 125 173 36 43
Loss (gain) on sale of property
and equipment................. (2) -- 19 -- --
Issuance of stock bonus......... 15 107 88 88 100
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable and
retainage............... (379) (230) 880 251 (111)
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (24) (61) 84 207 119
Inventories................ (149) 162 (272) (73) 128
Increase (decrease) in --
Accounts payable and
accrued expenses........ 106 377 (434) (461) (469)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 77 (86) (223) (102) 136
Other, net...................... -- -- 275 86 (23)
--------- --------- --------- --------- ---------
Net cash provided by
(used in) operating
activities............ 16 948 1,377 143 (75)
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment....................... 2 -- 10 -- --
Additions of property and
equipment....................... (92) (203) (334) (266) (157)
--------- --------- --------- --------- ---------
Net cash used in
investing
activities............ (90) (203) (324) (266) (157)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term
obligations..................... 276 41 331 331 --
Payments of long-term
obligations..................... (208) (299) (287) (7) (9)
Distributions to stockholders...... -- (258) (891) (376) (218)
Stockholder contribution........... -- -- 10 10 --
--------- --------- --------- --------- ---------
Net cash provided by
(used in) financing
activities............ 68 (516) (837) (42) (227)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... (6) 229 216 (165) (459)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 52 46 275 275 491
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 46 $ 275 $ 491 $ 110 $ 32
========= ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................ $ 41 $ 46 $ 70 $ 7 $ 3
Income taxes.................... 33 -- -- -- --
</TABLE>

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

F-109
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

COMMON STOCK ADDITIONAL TOTAL
------------------ PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------- ------- ---------- ---------- -------------
BALANCE, December 31, 1994........... 45,634 $ 46 $ 304 $ 436 $ 786
Stock bonus issued.............. 224 -- 15 -- 15
Net income...................... -- -- -- 256 256
------- ------- ---------- ---------- -------------
BALANCE, December 31, 1995........... 45,858 46 319 692 1,057
Distributions to stockholders... -- -- -- (258) (258)
Stock bonus issued.............. 942 1 106 -- 107
Net income...................... -- -- -- 554 554
------- ------- ---------- ---------- -------------
BALANCE, December 31, 1996........... 46,800 47 425 988 1,460
Issuance of shares in Scalo,
Inc........................... 1,000 -- 10 -- 10
Distributions to stockholders... -- -- -- (891) (891)
Stock bonus issued.............. 513 -- 88 -- 88
Net income...................... -- -- -- 787 787
------- ------- ---------- ---------- -------------
BALANCE, December 31, 1997........... 48,313 47 523 884 1,454
Distributions to stockholders
(unaudited)................... -- -- -- (218) (218)
Stock bonus issued
(unaudited)................... 481 1 99 -- 100
Net income (unaudited).......... -- -- -- 2 2
------- ------- ---------- ---------- -------------
BALANCE, March 31, 1998
(unaudited)........................ $48,794 $ 48 $ 622 $ 668 $ 1,338
======= ======= ========== ========== =============

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-110
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Burns and Scalo Roofing Company, Inc., Cuddy Roofing Company, Inc. and
Scalo, Inc. (collectively, the Company), all Pennsylvania corporations, focus on
providing roofing installation and repair services primarily for mid-sized to
large industrial and commercial facilities. The Company performs the majority of
its contract work under fixed price contracts with contract terms generally
ranging from one to three months. The Company performs the majority of its work
in western Pennsylvania.

The combined financial statements for the Company include the individual
financial statements of Burns and Scalo Roofing Company, Inc. (Burns and Scalo),
Cuddy Roofing Company, Inc. (Cuddy), and Scalo, Inc. John F. Scalo owns
approximately 66 percent of Burns and Scalo with John T. Scalo owning the
remaining 34 percent. Cuddy is 51 percent owned by Carol Scalo and 49 percent by
John F. Scalo. Scalo, Inc. is owned 100 percent by John F. Scalo. All
significant intercompany balances and transactions have been eliminated during
the combination.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

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. Depreciation and
amortization expense was $116,000, $125,000 and $173,000 for the years ended
December 31, 1995, 1996 and 1997, respectively.

F-111
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE RECOGNITION

The Company 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 date to total estimated costs for each contract.
Contract costs include all direct material and labor costs and those indirect
costs related to contract performance, such as indirect labor, supplies, 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, scope or other conditions may result in
revisions to costs and/or revenue. The effects of these changes are reflected in
estimated contract costs when identified and are reflected in estimated revenues
pursuant to the contract terms when agreed to by both parties. An amount equal
to contract costs attributable to claims is included in estimated revenues when
agreed to by both parties.

WARRANTY COSTS

For most contracts, the Company warrants labor for one year after
installation of a new roof. The Company generally warrants labor for 30 days
after repairs of existing roofs. A reserve for warranty costs is recorded based
upon the historical level of warranty claims and management's estimate of future
costs.

INCOME TAXES

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of 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

F-112
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

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 an impairment of such property is
necessary.

NEW ACCOUNTING PRONOUNCEMENTS

3. PROPERTY AND EQUIPMENT:

Property and equipment, net, consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 3-5 $ 498 $ 523
Machinery and equipment.............. 3-7 654 729
Computer and telephone equipment..... 3-7 151 175
Building and leasehold
improvements....................... 5-32 32 32
Furniture and fixtures............... 2-7 87 94
--------- ---------
1,422 1,553
Less -- Accumulated depreciation and
amortization....................... (979) (978)
--------- ---------
$ 443 $ 575
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 1,068 $ 846
Accrued compensation and benefits.... 539 450
Current deferred compensation........ -- 68
Accrued warranty expenses............ 57 57
Other accrued expenses............... 363 172
--------- ---------
$ 2,027 $ 1,593
========= =========

F-113
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Costs incurred on contracts in
progress........................... $ 2,573 $ 1,130
Estimated earnings, net of losses.... 833 404
--------- ---------
3,406 1,534
Less -- Billings to date............. (3,658) (1,647)
--------- ---------
$ (252) $ (113)
========= =========
Costs and estimated earnings in
excess of billings on
uncompleted contracts.............. $ 264 $ 180
Less -- Billings in excess of costs
and estimated earnings
on uncompleted contracts........... (516) (293)
--------- ---------
$ (252) $ (113)
========= =========

5. LONG-TERM OBLIGATIONS:

Long-term obligations consists of three notes payable to PNC Bank. The
Company has a vehicle note payable with an interest rate of 7 percent, due in
March 1999. The monthly payments, including interest, are $1,000. The Company
has another vehicle note payable with an interest rate of 9 percent, due in
October 2000. The monthly payments are $1,000. The Company has an equipment note
payable with an interest rate of 8 percent, due in March 2002. The monthly
payments are $2,000.

The maturities of long-term debt as of December 31, 1997, are as follows
(in thousands):

Year ending December 31 --
1998............................ $ 37
1999............................ 34
2000............................ 31
2001............................ 25
2002............................ 6
Thereafter...................... --
---------
$ 133
=========

The Company has lines of credit in the amount of $1,000,000 and $250,000
with PNC Bank and a $500,000 line of credit with Mellon Bank which expire on
June 29, 1998, March 30, 1999 and April 2003, respectively. Interest on the
$1,000,000 and $250,000 lines of credit are at the prime rate (8.5 percent as of
December 31, 1997). Interest on the $500,000 line of credit is at 8.5 percent.
There were no outstanding balances on either line of credit as of December 31,
1996 and 1997. The $1.0 million line of credit has been renewed and expires on
June 29, 1999 (unaudited).

6. OTHER LONG-TERM LIABILITIES:

The Company owes deferred compensation to a former stockholder of $0 as of
December 31, 1996, and $307,000 as of December 31, 1997. The current portion of
$68,000 of this liability is classified in accounts payable and accrued
expenses. Interest is being charged on this liability at the rate of 8 percent
annually. For the year ended December 31, 1997, the Company paid $26,000 in
interest and $64,000 in principal on this liability.

F-114
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

7. LEASES:

The Company leases facilities from a company which is owned by one of the
Company's stockholders. The leases expire in 2000. The rent paid under these
related-party leases were approximately $78,000, $90,000 and $96,000 for the
years ended December 31, 1995, 1996 and 1997, respectively. The Company leases a
vehicle from an unrelated third party, which expires on April 15, 2000. The
Company also leases vehicles and office equipment.

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

Year ending December 31 --
1998............................ $ 113
1999............................ 113
2000............................ 46
2001............................ 3
2002............................ 1
Thereafter...................... --
---------
$ 276
=========

8. STOCK BONUS:

The Company has an arrangement whereby the principal stockholder receives a
stock bonus at year-end based upon net income subject to certain limitations. In
1995, 1996 and 1997, 224 shares valued at $15,000, 942 shares valued at $107,000
and 513 shares valued at $88,000 were issued, respectively, relating to bonuses
earned during the prior year. In 1997, a stock bonus of 481 shares valued at
$100,000 was earned. This amount is payable to the principal stockholder at
December 31, 1997, and will be issued during 1998.

9. RELATED-PARTY TRANSACTIONS:

As of December 31, 1995, 1996 and 1997, the Company has a $20,000 note
receivable from a related party.

As of December 31, 1997, accounts payable and accrued expenses include a
note payable to a stockholder for $49,000.

The Company rents warehouse space from a related party. No formal lease
agreement exists, and the Company continues to pay rents for this property on a
month-to-month basis under the terms of the lease agreement that expired in
October 1995. Total rent expense for this facility was approximately $76,000 for
the years ended December 31, 1995, 1996 and 1997.

The Company completed roofing and sheet metal projects for several related
parties. Total related-party revenues were approximately $107,000, $395,000 and
$48,000 for the years ended December 31, 1995, 1996 and 1997, respectively.
Total related-party receivables were approximately $227,000 and $2,000 as of
December 31, 1996 and 1997, respectively.

10. EMPLOYEE BENEFIT PLAN:

The Company has a defined contribution profit-sharing plan. The plan
provides for the Company to match one-half of the first 6% contributed by each
employee. Total contributions by the Company under the

F-115
<PAGE>
BURNS AND SCALO ROOFING COMPANY, INC.,
CUDDY ROOFING COMPANY, INC. AND SCALO, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

plan were approximately $0, $0 and $41,000 for the years ended December 31,
1995, 1996 and 1997, respectively.

Employees of Cuddy participate in a multiemployer pension plan as part of
their collective bargain agreement. Company contributions under this plan were
$139,000, $124,000 and $81,000 for the years ended December 31, 1995, 1996 and
1997, respectively.

11. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
line of credit and notes payable. The Company believes that the carrying value
of these instruments on the accompanying balance sheets approximates their fair
value.

12. COMMITMENTS AND CONTINGENCIES:

INSURANCE

13. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company grants credit, generally without collateral, to its customers,
which are real estate owners and general contractors located primarily in
western Pennsylvania. Consequently, the Company is subject to potential credit
risk related to changes in business and economic factors within the western
Pennsylvania region. However, management believes that its contract acceptance,
billing and collection policies are adequate to minimize the potential credit
risk.

14. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

F-116

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Boone Brothers Roofing, Inc.:

We have audited the accompanying balance sheets of Boone Brothers Roofing,
Inc. (a Nebraska corporation) as of December 31, 1996 and 1997, and the related
statements of operations, cash flows and stockholders' equity for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Boone Brothers Roofing, Inc.
as of 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.

ARTHUR ANDERSEN LLP

St. Louis, Missouri
June 5, 1998

F-117
<PAGE>
BOONE BROTHERS ROOFING, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31,
-------------------- MARCH 31,
1996 1997 1998
--------- --------- -----------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents.......... $ 571 $ 894 $ 321
Accounts receivable --
Trade, net of allowance of
$21, $21 and $21,
respectively............... 1,203 1,050 808
Retainage, net of allowance of
$13, $13 and $13,
respectively............... 536 650 602
Costs and estimated earnings in
excess of billings on
uncompleted contracts............ 410 808 901
Inventories........................ 138 226 326
Prepaid expenses and other current
assets........................... 73 71 79
Demand notes receivable from
stockholders..................... -- 38 50
--------- --------- -----------
Total current assets.......... 2,931 3,737 3,087
PROPERTY AND EQUIPMENT, net............. 281 262 262
--------- --------- -----------
Total assets.................. $ 3,212 $ 3,999 $ 3,349
========= ========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations...................... $ 22 $ 16 $ 16
Accounts payable and accrued
expenses......................... 1,186 1,430 834
Accounts payable to related
parties.......................... 27 27 99
Billings in excess of costs and
estimated earnings on
uncompleted contracts............ 319 431 426
Deferred income taxes.............. 294 387 395
--------- --------- -----------
Total current liabilities..... 1,848 2,291 1,770
--------- --------- -----------
LONG-TERM OBLIGATIONS, net of current
maturities............................ 172 155 149
--------- --------- -----------
DEFERRED INCOME TAXES................... 35 53 28
--------- --------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $100 par value, 1,000
shares authorized, 580 shares
issued and outstanding........... 58 58 58
Retained earnings.................. 1,099 1,442 1,344
--------- --------- -----------
Total stockholders' equity.... 1,157 1,500 1,402
--------- --------- -----------
Total liabilities and
stockholders' equity....... $ 3,212 $ 3,999 $ 3,349
========= ========= ===========

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

F-118
<PAGE>
BOONE BROTHERS ROOFING, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
-------------------- --------------------
1996 1997 1997 1998
--------- --------- --------- ---------
(UNAUDITED)
REVENUES............................ $ 9,820 $ 10,657 $ 1,660 $ 1,706
COST OF SERVICES (including
depreciation)..................... 7,833 8,059 1,376 1,544
--------- --------- --------- ---------
Gross profit................... 1,987 2,598 284 162
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.......................... 1,656 2,000 298 315
--------- --------- --------- ---------
Income (loss) from operations.. 331 598 (14) (153)
INTEREST EXPENSE, net............... (21) (10) (3) (3)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES........ 310 588 (17) (156)
PROVISION (BENEFIT) FOR INCOME
TAXES............................. 122 245 (7) (58)
--------- --------- --------- ---------
NET INCOME (LOSS)................... $ 188 $ 343 $ (10) $ (98)
========= ========= ========= =========

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

F-119
<PAGE>
BOONE BROTHERS ROOFING, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER THREE MONTHS
31, ENDED MARCH 31,
-------------------- --------------------
1996 1997 1997 1998
--------- --------- --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................. $ 188 $ 343 $ (10) $ (98)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating
activities --
Depreciation and amortization... 31 45 8 4
Loss (gain) on sale of property
and equipment................. -- (2) -- (4)
Deferred income taxes........... 68 111 (15) (17)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........ 142 39 421 290
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (81) (399) 253 (93)
Inventories................ 46 (88) (18) (100)
Prepaid expenses and other
current assets.......... 36 3 31 (7)
Increase (decrease) in --
Accounts payable and
accrued expenses........ 113 244 (399) (524)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 10 112 7 (5)
--------- --------- --------- ---------
Net cash provided by
(used in) operating
activities......... 553 408 278 (554)
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and
equipment....................... (129) (24) (3) (1)
Issuance of demand note receivables
from stockholders............... -- (38) -- (12)
--------- --------- --------- ---------
Net cash used in
investing
activities......... (129) (62) (3) (13)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term
obligations................... 88 -- -- --
Payments of long-term
obligations................... (14) (23) -- (6)
--------- --------- --------- ---------
Net cash provided by
(used in) financing
activities......... 74 (23) -- (6)
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... 498 323 275 (573)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 73 571 571 894
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 571 $ 894 $ 846 $ 321
========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest...................... $ 23 $ 28 $ 3 $ 3
Income taxes.................. 143 110 70 92

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-120
<PAGE>
BOONE BROTHERS ROOFING, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

COMMON STOCK TOTAL
------------------ RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT EARNINGS STOCK EQUITY
------- ------- --------- -------- -------------
BALANCE, December 31, 1995........... 590 $ 59 $ 912 $ (2) $ 969
Net income...................... -- -- 188 -- 188
Retirement of treasury stock.... (10) (1) (1) 2 --
------- ------- --------- -------- -------------
BALANCE, December 31, 1996........... 580 58 1,099 -- 1,157
Net income...................... -- -- 343 -- 343
------- ------- --------- -------- -------------
BALANCE, December 31, 1997........... 580 58 1,442 -- 1,500
Net loss (unaudited)............ -- -- (98) -- (98)
------- ------- --------- -------- -------------
BALANCE, March 31, 1998
(unaudited)........................ 580 $ 58 $ 1,344 $ -- $ 1,402
======= ======= ========= ======== =============

</TABLE>
The accompanying notes are an integral part of these financial statements.

F-121
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Boone Brothers Roofing, Inc. (the Company), a C Corporation, focuses on
providing roofing installation and repair services primarily for mid-sized to
large industrial and commercial facilities. The Company performs the majority of
its contract work under fixed price contracts with contract terms generally
ranging from two to three months. The Company performs the majority of its work
in Nebraska, Kansas and Missouri.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

CASH AND CASH EQUIVALENTS

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

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

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. Depreciation expense was
$31,000 and $43,000 for the years ended December 31, 1996 and 1997,
respectively.

REVENUE RECOGNITION

The Company 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-

F-122
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

completion method measured by the percentage of costs incurred to date to total
estimated costs for each contract. Contract costs include all direct material
and labor costs and those indirect costs related to contract performance, such
as indirect labor, supplies, 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, scope or other
conditions may result in revisions to costs and/or revenue. The effects of these
changes are reflected in estimated contract costs when identified and are
reflected in estimated revenues pursuant to the contract terms when agreed to by
both parties. An amount equal to contract costs attributable to claims is
included in estimated revenues when agreed to by both parties.

WARRANTY COSTS

INCOME TAXES

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

NEW ACCOUNTING PRONOUNCEMENTS

F-123
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

nonowner changes in equity. The Company adopted SFAS No. 130 in the first
quarter of fiscal 1998. The Company believes that the display of comprehensive
income will not differ materially from the current reported net income (loss)
attributable to common stockholders.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED DECEMBER 31,
USEFUL LIVES --------------------
IN YEARS 1996 1997
------------- --------- ---------
Transportation equipment............. 5 $ 13 $ 13
Machinery and equipment.............. 7 231 243
Computer and telephone equipment..... 5 93 106
Building and leasehold
improvements....................... 30 177 177
Furniture and fixtures............... 7 13 13
--------- ---------
527 552
Less -- Accumulated depreciation and
amortization....................... (246) (290)
--------- ---------
Property and equipment,
net..................... $ 281 $ 262
========= =========

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Accounts payable, trade.............. $ 588 $ 516
Accrued compensation and benefits.... 383 576
Warranty costs....................... 53 53
Other accrued expenses............... 162 285
--------- ---------
$ 1,186 $ 1,430
========= =========

F-124
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
--------------------
1996 1997
--------- ---------
Costs incurred on contracts in
progress........................... $ 2,526 $ 3,346
Estimated earnings, net of losses.... 1,119 1,657
--------- ---------
3,645 5,003
Less -- Billings to date............. (3,554) (4,626)
--------- ---------
$ 91 $ 377
========= =========
Costs and estimated earnings in
excess of billings on
uncompleted contracts.............. $ 410 $ 808
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (319) (431)
--------- ---------
$ 91 $ 377
========= =========

5. LONG-TERM OBLIGATIONS:

Long-term debt includes a mortgage of $115,000 with Olathe Bank secured by
the Company's building. The note is payable in monthly installments of $1,000
including interest at 10.5 percent. The Company has restrictive and various
financial covenants with which the Company was in compliance at December 31,
1997.

The maturities of long-term debt as of December 31, 1997, are as follows
(in thousands):

Year ending December 31 --
1998............................ $ 2
1999............................ 3
2000............................ 110
---------
$ 115
=========

The Company has a $600,000 line of credit with American National Bank. The
line of credit expires July 15, 1998, and bears interest at 2 percent above the
prime lending rate. The line of credit is secured by accounts receivable,
inventory, and machinery and equipment. The Company has had no borrowings on its
line of credit during 1996 or 1997. The Company is in the process of negotiating
terms for a renewal of this line of credit.

The Company entered into a capital lease for machinery in October 1996 with
a related party (see Note 7). The lease expires in October 2001. The Company has
an option to purchase the equipment, at the end of the lease, for $1. The lease
requires monthly payments of $1,500. The present value of net minimum lease
payments is included in long-term debt.

F-125
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Future capital lease payments are as follows (in thousands):

Year ending December 31 --
1998............................ $ 18
1999............................ 18
2000............................ 18
2001............................ 14
---------
68
Less -- Imputed interest............. (12)
---------
Present value of net
minimum lease
payments................ $ 56
=========

6. INCOME TAXES:

Federal and state income taxes are as follows (in thousands):

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Federal --
Current......................... $ 47 $ 117
Deferred........................ 60 98
State --
Current......................... 7 17
Deferred........................ 8 13
--------- ---------
$ 122 $ 245
========= =========

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Provision at the statutory rate...... $ 105 $ 200
Increase resulting from --
Permanent differences, primarily
meals and entertainment........ -- 11
State income tax, net of benefit
for federal deduction.......... 17 34
--------- ---------
$ 122 $ 245
========= =========

F-126
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Deferred income tax assets:
AMT credit carryforward......... $ -- $ (102)
Reserves and accrued expenses... (49) (40)
--------- ---------
Total deferred income tax
assets................. (49) (142)
--------- ---------
Deferred income tax liabilities:
Property and equipment.......... 35 53
Deferred contracts.............. 279 490
Accrued expenses................ 64 39
--------- ---------
Total deferred income tax
liabilities............ 378 582
--------- ---------
Net deferred income tax
liabilities............ $ 329 $ 440
========= =========

The net deferred tax assets and liabilities are comprised of the following
(in thousands):

YEAR ENDED
DECEMBER 31,
--------------------
1996 1997
--------- ---------
Deferred tax assets -- current....... $ 49 $ 142
--------- ---------
Deferred tax liabilities:
Current......................... 343 529
Long-term....................... 35 53
--------- ---------
Total...................... 378 582
--------- ---------
Net deferred income tax
liabilities............. $ 329 $ 440
========= =========

7. RELATED-PARTY TRANSACTIONS:

The Company leases, on a month-to-month basis, the facility its
headquarters occupies from a partnership owned by the stockholders. The annual
lease payments on this facility approximated $20,000 for the years ended
December 31, 1996 and 1997.

The Company also leases, on a month-to-month basis, from the same
partnership, several vehicles and two cranes. The annual rental payments on this
equipment was $104,000 and $59,000 for the years ended December 31, 1996 and
1997, respectively.

The Company purchases supplies and materials from Roofers Mart of Nebraska
which is approximately 30 percent owned by the stockholders and key employees of
the Company. Purchases from Roofers Mart of Nebraska were $441,000 and $444,000
for the years ended December 31, 1996 and 1997, respectively. The amounts due to
Roofers Mart of Nebraska are reflected on the balance sheets as accounts payable
to related parties.

8. EMPLOYEE BENEFIT PLAN:

The Company has a defined contribution profit-sharing plan. The plan
provides for the Company to match one-half of the first 5 percent contributed by
each employee. Total contributions by the Company

F-127
<PAGE>
BOONE BROTHERS ROOFING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

under the plan were $34,000 and $42,000 for the years ended December 31, 1996
and 1997, respectively. The Company may also make discretionary contributions.
The Company made discretionary contributions of $25,000 and $50,000 for the
years ended December 31, 1996 and 1997, respectively, and had accrued
approximately $50,000 at December 31, 1997, for contributions to be funded in
the subsequent fiscal year.

9. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents, a
capital lease obligation and a note payable. The Company believes that the
carrying value of these instruments on the accompanying balance sheets
approximates their fair value.

10. COMMITMENTS AND CONTINGENCIES:

LITIGATION

INSURANCE

11. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company generated 14.7 percent of its total revenue from one major
customer, Kiewit Construction Company, during the year ended December 31, 1997.

In addition, the Company grants credit, generally without collateral, to
its customers, which are real estate owners and contractors located primarily in
the Midwest. Consequently, the Company is subject to potential credit risk
related to changes in business and economic factors within the Midwest. However,
management believes that its contract acceptance, billing and collection
policies are adequate to minimize the potential credit risk.

12. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

In July 1998, the Company and its stockholders entered into a definitive
agreement with INCOM Roofing Services, Inc. (INCOM), pursuant to which all
outstanding shares of the Company's common stock will be exchanged for cash and
shares of INCOM common stock, concurrent with the consummation of the initial
public offerings in the United States and Canada and outside the United States
and Canada (the Offerings) of additional common stock by INCOM. In addition, the
key executives of the Company entered into employment agreements with the
Company and INCOM which have an initial term of two or five years, and generally
restrict the disclosure of confidential information as well as restrict
competition with the Company and INCOM for a period of two years following
termination of employment.

F-128

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Sutter Roofing Company of Florida and
Sutter Roofing Company of Southwest Florida:

We have audited the accompanying combined balance sheet of Sutter Roofing
Company of Florida and Sutter Roofing Company of Southwest Florida as of
December 31, 1997, and the related combined statements of operations, cash flows
and stockholders' equity for the year then ended. These financial statements are
the responsibility of the Companies' management. Our responsibility is to
express an opinion on these financial statements based on our audit.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Sutter Roofing
Company of Florida and Sutter Roofing Company of Southwest Florida as of
December 31, 1997, and the results of their operations and their cash flows for
the year then ended in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Tampa, Florida
June 5, 1998

F-129
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 251 $ 179
Marketable securities........... 216 235
Accounts receivable --
Trade, net of allowance of
$26 and $33,
respectively........... 1,310 1,625
Related-party
receivables............ 18 17
Other receivables.......... 13 6
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... 169 173
Inventories..................... 144 143
Prepaid expenses and other
current assets................. 86 102
------------ ------------
Total current assets....... 2,207 2,480
PROPERTY AND EQUIPMENT, net.......... 665 752
------------ ------------
Total assets............... $2,872 $3,232
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations.................... $ 105 $ 105
Accounts payable and accrued
expenses....................... 788 802
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 530 524
------------ ------------
Total current
liabilities............ 1,423 1,431
LONG-TERM DEBT OBLIGATIONS........... 154 325
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1 and $1 par
value, 6,000 shares and 7,500
shares authorized, 510 shares
and 198 shares issued and
outstanding as of December 31,
1997, and March 31, 1998 for
Sutter Roofing Company of
Florida and Sutter Roofing
Company of Southwest Florida,
respectively................... 1 1
Additional paid-in capital...... 159 159
Retained earnings............... 1,135 1,316
------------ ------------
Total stockholders'
equity................. 1,295 1,476
------------ ------------
Total liabilities and
stockholders' equity... $2,872 $3,232
============ ============

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

F-130
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)
REVENUES............................. $8,756 $ 2,268 $ 2,447
COST OF SERVICES (including
depreciation)...................... 6,777 1,733 1,870
------------ --------- ---------
Gross profit.................... 1,979 535 577
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 1,624 335 408
------------ --------- ---------
Income from operations.......... 355 200 169
------------ --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (5) -- (1)
Other........................... 62 (1) 13
------------ --------- ---------
Other income (expense),
net..................... 57 (1) 12
------------ --------- ---------
NET INCOME........................... $ 412 $ 199 $ 181
============ ========= =========

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

F-131
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................... $ 412 $ 199 $ 181
Adjustments to reconcile net income
to net cash provided by (used
in) operating activities --
Depreciation.................... 150 40 44
Unrealized gain on marketable
equity securities............. (16) (4) (12)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Marketable securities...... (189) (6) (7)
Accounts receivable........ (172) (111) (307)
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... (21) 32 (4)
Inventories................ (54) (44) 1
Prepaid expenses and other
current assets.......... (28) -- (16)
Increase (decrease) in --
Accounts payable and
accrued expenses........ 119 (74) 14
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 47 (30) (6)
------------ --------- ---------
Net cash provided by
(used in) operating
activities............ 248 2 (112)
------------ --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and
equipment....................... (183) (17) (30)
------------ --------- ---------
Net cash used in
investing
activities............ (183) (17) (30)
------------ --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions.............. 80 -- --
Borrowings on long-term
obligations..................... -- -- 100
Payments of long-term
obligations..................... (156) (43) (30)
Distributions to stockholders...... (246) -- --
------------ --------- ---------
Net cash (used in)
provided by financing
activities............ (322) (43) 70
------------ --------- ---------
NET DECREASE IN CASH AND CASH
EQUIVALENTS........................ (257) (58) (72)
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 508 508 251
------------ --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 251 $ 450 $ 179
============ ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest............. $ 27 $ 6 $ 5
SUPPLEMENTAL DISCLOSURE OF NONCASH
ACTIVITIES:
Equipment acquired through issuance
of notes payable................ 141 68 101
Stockholder distributions of
marketable equity securities.... 207 -- --

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

F-132
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>

COMMON STOCK
--------------------- ADDITIONAL TOTAL
NUMBER PAID-IN RETAINED STOCKHOLDERS'
OF SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- ------- ---------- --------- --------------
BALANCE, December 31, 1996........... 510 $ 1 $ 79 $ 1,176 $1,256
Distributions to stockholders... -- -- -- (453) (453)
Issuance of common stock........ 198 -- 80 -- 80
Net income (loss)............... -- -- -- 412 412
--- ------- ---------- --------- --------------
BALANCE, December 31, 1997........... 708 1 159 1,135 1,295
Net income (unaudited).......... -- -- -- 181 181
--- ------- ---------- --------- --------------
BALANCE, March 31, 1998
(unaudited)........................ 708 $ 1 $ 159 $ 1,316 $1,476
=== ======= ========== ========= ==============
</TABLE>

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

F-133
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

The accompanying combined financial statements include the accounts of
Sutter Roofing Company of Florida and Sutter Roofing Company of Southwest
Florida (collectively, the Companies), both Florida corporations under common
control. All material intercompany balances and transactions have been
eliminated.

The Companies focus on providing roofing installation and repair services
primarily for mid-sized to large industrial and commercial facilities. The
Companies perform the majority of their contract work under fixed price
contracts, with contract terms generally ranging from one to 12 months. The
Companies perform the majority of their work in central and southern Florida.

The Companies and their stockholders intend to enter into a definitive
agreement with INCOM Roofing Services, Inc. (INCOM), pursuant to which all
outstanding shares of the Companies' common stock will be exchanged for cash and
shares of INCOM common stock concurrently with the consummation of an initial
public offering (the Offering) of common stock by INCOM.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

The interim financial statements as of March 31, 1998, and for the three
months ended March 31, 1997 and 1998, are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Companies' management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation. The results of operations for the
interim periods are not necessarily indicative of the results for the entire
fiscal year.

CASH AND CASH EQUIVALENTS

The Companies consider all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

MARKETABLE SECURITIES

Marketable securities represent investments in stocks. In accordance with
the criteria specified by Statement of Financial Accounting Standards (SFAS) No.
115, "Accounting for Certain Investments in Debt and Equity Securities," these
investments are classified as "trading." Trading securities are those held
principally for the purpose of selling in the near future and are carried at
fair value. Unrealized holding gains and losses are included in the statement of
operations.

The fair value of equity securities in the trading category included in
short-term marketable securities was approximately $216,000 and the gross
unrealized holding gain was approximately $36,000 at December 31, 1997. The net
change in the unrealized holding gain was a gain of approximately $16,000. Gross
realized gains from the sale and transfer of securities classified as trading
for the period ended December 31, 1997, were approximately $33,000 and are
included in other income in the accompanying statement of operations. For the
purpose of determining gross realized gains and losses, the cost of securities
sold is based upon specific identification. The total cost of short-term
marketable securities was approximately $180,000 at December 31, 1997.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable at December 31, 1996 and 1997, included insignificant
claims and unapproved change orders which were expected to be collected within
the fiscal year.

F-134
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

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

Property and equipment are stated at cost, and depreciation is computed
using the straight-line and double declining-balance 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. Depreciation expense was approximately $150,000 for the year ended
December 31, 1997. 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.

REVENUE RECOGNITION

The Companies recognize 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 date to total estimated costs
for each contract. Contract costs include all direct material and labor costs
and those indirect costs related to contract performance, such as indirect
labor, supplies, 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, scope or other conditions may
result in revisions to costs and/or revenue. The effects of these changes are
reflected in estimated contract costs when identified and are reflected in
estimated revenues pursuant to the contract terms when agreed to by both
parties. An amount equal to contract costs attributable to claims is included in
estimated revenues when agreed to by both parties.

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 the Companies' experience
with similar contracts in recent years, the retention balance at each balance
sheet date will be collected within the subsequent fiscal year.

WARRANTY COSTS

For certain contracts, the Company warrants labor after installation of a
new roof. The Company generally does not warrant labor after repair of existing
roofs. A reserve for warranty costs is recorded based upon the historical level
of warranty claims and management's estimate of future costs.

INCOME TAXES

The Companies have elected to be taxed as S Corporations as permitted by
the Internal Revenue Code. As S Corporations, the Companies are not taxable
entities and separately stated items of income, loss,

F-135
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

deduction and credit are passed through to and taken into account by the
stockholders in computing their federal individual income tax liabilities.

USE OF ESTIMATES

REALIZATION OF LONG-LIVED ASSETS

The Companies follow the provisions of SFAS 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 an impairment of such property is necessary. The
impact of applying SFAS No. 121 did not have a material impact on the Companies.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Companies adopted SFAS No. 130 in the first quarter of fiscal
1998. The Companies believe that the display of comprehensive income will not
differ materially from the currently reported net income (loss) attributable to
common stockholders.

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 requires that companies
report financial and descriptive information about their reportable operating
segments. Segment information to be reported is to be based upon the way
management organizes the segments for making operating decisions and assessing
performance. The Companies operate in one business segment, which is roofing
services, and accordingly believe the adoption of SFAS No. 131 will have no
effect on its financial reporting.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following at December 31, 1997 (in
thousands):

ESTIMATED
USEFUL LIVES
IN YEARS
------------------
Transportation equipment............. 5 $ 754
Machinery and equipment.............. 5-7 308
Computer and telephone equipment..... 3-5 75
Building and leasehold
improvements....................... Life of lease 61
Furniture and fixtures............... 3-5 3
---------
1,201
Less -- Accumulated depreciation and
amortization....................... (536)
---------
Property and equipment, net..... $ 665
=========

F-136
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following at December
31, 1997 (in thousands):

Accounts payable, trade.............. $ 509
Accrued compensation and benefits.... 147
Other accrued expenses............... 132
---------
$ 788
=========

Roofing installation contracts in progress are as follows at December 31,
1997 (in thousands):

Billings to date on contracts in
progress........................... $ 5,217
Less --
Costs incurred................ (4,108)
Estimated earnings, net of
losses....................... (748)
---------
$ 361
=========
Billings in excess of costs and
estimated earnings on uncompleted
contracts.......................... $ 530
Less -- Costs and estimated earnings
in excess of billings on
uncompleted contracts.............. (169)
---------
$ 361
=========

5. LONG-TERM OBLIGATIONS:

Long-term obligations at December 31, 1997, consists of vehicle equipment
notes bearing interest at 6.50 percent to 9.70 percent which are payable in
monthly installments through June 2006. These notes are secured by
transportation equipment and total approximately $259,000 at December 31, 1997.

The maturities of long-term debt as of December 31, 1997, are as follows
(in thousands):

Year ending December 31 --
1998............................ $ 105
1999............................ 65
2000............................ 47
2001............................ 13
2002............................ 6
Thereafter...................... 23
---------
$ 259
=========

The Companies have a $500,000 line of credit with a bank. The line of
credit expires March 12, 1999, and bears interest at 1/2 percent above the prime
lending rate. The line of credit is secured by accounts receivable, inventory,
and machinery and equipment. There was a zero balance on the line of credit at
December 31, 1997.

F-137
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. LEASES:

The Companies lease a facility from a stockholder. The lease expires on
December 31, 2007. The rent paid under this related-party lease was
approximately $82,000 for the year ended December 31, 1997. The Companies also
lease a facility from a third party, which expires on May 31, 1999. The rent
paid under this lease was approximately $12,000 for the year ended December 31,
1997. The remainder of the Companies' operating leases consist of certain
vehicle leases.

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

Year ending December 31 --
1998............................ $ 167
1999............................ 132
2000............................ 105
2001............................ 91
2002............................ 88
Thereafter...................... 408
---------
$ 991
=========

7. RELATED-PARTY TRANSACTIONS:

Related-party receivables on the accompanying balance sheet consist of
advances to stockholders which are payable in equal weekly installments and bear
interest at 8 percent. The Company also leases a facility from a stockholder
(see Note 6).

8. EMPLOYEE BENEFIT PLAN:

The Companies have a defined contribution profit-sharing plan that provides
for discretionary company contributions. The Companies made discretionary
contributions of approximately $115,000 for the year ended December 31, 1997.

The Companies have a defined contribution 401(k) profit-sharing plan under
which substantially all full-time employees are eligible to participate. The
plan provides for the Companies to match one-half of the first 4 percent
contributed by each employee. Total contributions by the Companies under the
plan were approximately $23,000 for the year ended December 31, 1997.

9. FINANCIAL INSTRUMENTS:

The Companies' financial instruments consist of cash and cash equivalents,
trade accounts receivable, trade accounts payable and debt. The Companies
believe that the carrying value of these instruments on the accompanying balance
sheet approximates their fair value.

10. COMMITMENTS AND CONTINGENCIES:

LITIGATION

The Companies are involved in disputes or 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 the Companies' financial
position or results of operations.

F-138
<PAGE>
SUTTER ROOFING COMPANY OF FLORIDA AND
SUTTER ROOFING COMPANY OF SOUTHWEST FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

INSURANCE

The Companies carry a broad range of insurance coverage, including business
auto liability, general liability and an umbrella policy. The Companies have not
incurred significant claims or losses on any of these insurance policies.

11. EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

During March and April 1998, the Companies borrowed $370,000 on the line of
credit to fund the Companies' retirement contribution and to fund the S
Corporation taxes due from a stockholder.

F-139

<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To M.J. Dalsin Company of South Dakota, Inc. and M.J. Dalsin Company, Inc.:

We have audited the accompanying combined balance sheet of M.J. Dalsin
Company of South Dakota, Inc. and M.J. Dalsin Company, Inc. (the Company) as of
December 31, 1997, and the related combined statements of operations, cash flows
and stockholders' equity for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these combined financial statements based on our audit.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of M.J. Dalsin
Company of South Dakota, Inc. and M.J. Dalsin Company, Inc. as of December 31,
1997, and the results of their operations and their cash flows for the year then
ended in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri
June 5, 1998

F-140
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
COMBINED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents....... $ 719 $ 761
Investments..................... 199 196
Accounts receivable --
Trade, net of allowance of
$21 and $21,
respectively............ 848 921
Retainage.................. 182 237
Other receivables.......... 1 3
Costs and estimated earnings in
excess of billings on
uncompleted contracts.......... 27 21
Inventories..................... 142 171
Note receivable................. 10 10
------------ ------------
Total current assets....... 2,128 2,320
------------ ------------
PROPERTY AND EQUIPMENT, net.......... 621 664
NOTE RECEIVABLE...................... 32 30
DEFERRED INCOME TAXES................ 34 34
------------ ------------
Total long-term assets..... 687 728
------------ ------------
Total assets............... $2,815 $3,048
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturities of long-term
obligations.................... $ 47 $ 47
Accounts payable and accrued
expenses....................... 520 455
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 603 764
------------ ------------
Total current
liabilities............. 1,170 1,266
------------ ------------
LONG-TERM OBLIGATIONS, net of current
maturities......................... 151 167
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $100 and $1 par
value, 1,000 and 50,000 shares
authorized, 600 and 25,000
shares issued and outstanding
at December 31, 1997, and March
31, 1998, for M.J. Dalsin
Company of South Dakota, Inc.,
and M.J. Dalsin Company, Inc.,
respectively................... 85 85
Additional paid-in capital...... 47 47
Retained earnings............... 1,398 1,493
Unrealized loss on securities
available for sale............. (36) (10)
------------ ------------
Total stockholders'
equity.................. 1,494 1,615
------------ ------------
Total liabilities and
stockholders' equity.... $2,815 $3,048
============ ============

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

F-141
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)
REVENUES............................. $5,738 $ 1,044 $ 1,518
COST OF SERVICES (including
depreciation)...................... 4,153 777 1,132
------------ --------- ---------
Gross profit............... 1,585 267 386
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES........................... 1,034 214 217
------------ --------- ---------
Income from operations..... 551 53 169
------------ --------- ---------
OTHER INCOME (EXPENSE):
Interest, net................... (16) (3) (1)
Other........................... 46 35 25
------------ --------- ---------
Other income, net.......... 30 32 24
------------ --------- ---------
INCOME BEFORE PROVISION FOR INCOME
TAXES.............................. 581 85 193
PROVISION FOR INCOME TAXES........... 111 7 22
------------ --------- ---------
NET INCOME........................... $ 470 $ 78 $ 171
============ ========= =========

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

F-142
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, --------------------
1997 1997 1998
------------ --------- ---------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................... $ 470 $ 78 $ 171
Adjustments to reconcile net income
to net cash provided by (used
in) operating activities --
Depreciation and amortization... 110 20 33
Loss (gain) on sale of property
and equipment................. (1) (1) --
Gain on sale of marketable
investments................... (26) (26) (22)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable........ (207) 254 (130)
Notes receivable........... 9 2 2
Costs and estimated
earnings in excess of
billings on uncompleted
contracts............... 30 (156) 6
Inventories................ (19) 7 (29)
Other current assets....... 16 16 --
Increase (decrease) in --
Accounts payable and
accrued expenses........ (238) (477) (65)
Billings in excess of costs
and estimated earnings
on uncompleted
contracts............... 214 (79) 161
Other, net...................... 16 36 (62)
------------ --------- ---------
Net cash provided by
(used in) operating
activities............ 374 (326) 65
------------ --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property and
equipment....................... (297) (33) (76)
Purchase of marketable
investments..................... (777) (286) (327)
Proceeds from sale of marketable
investments..................... 1,446 533 440
------------ --------- ---------
Net cash provided by
investing
activities............ 372 214 37
------------ --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term
obligations..................... 954 317 30
Payments of long-term
obligations..................... (1,229) (358) (14)
Distributions to stockholders...... (188) -- (76)
------------ --------- ---------
Net cash used in
financing
activities............ (463) (41) (60)
------------ --------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................... 283 (153) 42
CASH AND CASH EQUIVALENTS, beginning
of period.......................... 436 436 719
------------ --------- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ 719 $ 283 $ 761
============ ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for --
Interest........................ $ 34 $ 7 $ 6
Income taxes.................... 87 52 --

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

F-143
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
UNREALIZED
COMMON STOCK ADDITIONAL GAIN TOTAL
----------------- RETAINED PAID-IN (LOSS) ON STOCKHOLDERS'
SHARES AMOUNT EARNINGS CAPITAL SECURITIES EQUITY
------- ------ --------- ---------- ----------- -------------
BALANCE, December 31, 1996........... 25,600 $ 85 $ 1,116 $ 47 $ 68 $ 1,316
Net income...................... -- -- 470 -- -- 470
Change in unrealized gain (loss)
on securities available for
sale.......................... -- -- -- -- (104) (104)
Distributions to stockholders... -- -- (188) -- -- (188)
------- ------ --------- --- ----------- -------------
BALANCE, December 31, 1997........... 25,600 85 1,398 47 (36) 1,494
Net income (unaudited).......... -- -- 171 -- -- 171
Distributions to stockholders
(unaudited)................... -- -- (76) -- -- (76)
Change in unrealized gain (loss)
on securities available for
sale (unaudited).............. -- -- -- -- 26 26
------- ------ --------- --- ----------- -------------
BALANCE, March 31, 1998
(unaudited)........................ 25,600 $ 85 $ 1,493 $ 47 $ (10) $ 1,615
======= ====== ========= === =========== =============

</TABLE>
The accompanying notes are an integral part of these combined financial
statements.

F-144
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

M.J. Dalsin Company of South Dakota, Inc., a South Dakota S Corporation,
and M.J. Dalsin Company, Inc., a North Dakota C Corporation (collectively, the
Company) focus on providing roofing installation and repair services primarily
for mid-sized to large industrial and commercial facilities. The Company
performs the majority of its contract work under fixed price contracts, with
contract terms generally ranging from 1 to 15 months. The Company performs the
majority of its work in North Dakota and South Dakota.

The combined financial statements include the accounts of M.J. Dalsin
Company of South Dakota, Inc. and M.J. Dalsin Company, Inc. These entities are
related by virtue of common ownership. All material intercompany transactions
and balances have been eliminated in combination.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

INTERIM FINANCIAL INFORMATION

CASH AND CASH EQUIVALENTS

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

INVESTMENTS

Investments in securities consist of equity securities and are classified
as securities available for sale. Unrealized holding gains and losses are
reported net as a separate component of stockholders' equity. The aggregate
market value of investments is $199,000 at December 31, 1997, with unrealized
holding losses of $36,000.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

F-145
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

lesser of the life of the lease or the estimated useful life of the asset.
Depreciation expense was $110,000 for the year ended December 31, 1997.

REVENUE RECOGNITION

The Company 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 date to total estimated costs for each contract.
Contract costs include all direct material and labor costs and those indirect
costs related to contract performance, such as indirect labor, supplies, 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, scope or other conditions may result in
revisions to costs and/or revenue. The effects of these changes are reflected in
estimated contract costs when identified and are reflected in estimated revenues
pursuant to the contract terms when agreed to by both parties. An amount equal
to contract costs attributable to claims is included in estimated revenues when
agreed to by both parties.

WARRANTY COSTS

INCOME TAXES

The Company follows the liability method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109.
Under this method, deferred assets and liabilities are recorded for future tax
consequences of temporary differences between the financial reporting and tax
bases of assets and liabilities, and are measured using the enacted tax rates
and laws that will be in effect when the underlying assets or liabilities are
recovered or settled. As M.J. Dalsin Company of South Dakota, Inc. is an S
Corporation and income taxes are paid by the Company's stockholder, no income
tax provision or deferred income tax assets or liabilities are recorded in the
financial statements related to that company.

USE OF ESTIMATES

F-146
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

and liabilities, disclosures of contingent 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.

REALIZATION OF LONG-LIVED ASSETS

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. The Company adopted SFAS No. 130 in the first quarter of fiscal 1998.
The Company believes that the display of comprehensive income will not differ
materially from the currently reported net income attributable to common
stockholders.

In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information," was issued. SFAS No. 131 requires that companies
report financial and descriptive information about their reportable operating
segments. Segment information to be reported is to be based upon the way
management organizes the segments for making operating decisions and assessing
performance. The Companies operate in one business segment, which is roofing
services, and accordingly believe the adoption of SFAS No. 131 will have no
effect on its financial reporting.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

ESTIMATED
USEFUL LIVES DECEMBER 31,
IN YEARS 1997
------------- ------------
Transportation equipment............. 3-5 $ 761
Machinery and equipment.............. 4-8 525
Computer, telephone and other office
equipment.......................... 4-8 82
Building and leasehold
improvements....................... 10-31 90
------------
1,458
Less -- Accumulated depreciation and
amortization....................... (837)
------------
Property and equipment, net..... $ 621
============

F-147
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

DECEMBER 31,
1997
------------
Accounts payable, trade.............. $ 433
Accrued compensation and benefits.... 45
Other accrued expenses............... 42
------------
$ 520
============

Roofing installation contracts in progress are as follows (in thousands):

DECEMBER 31,
1997
------------
Costs incurred on contracts in
progress........................... $ 2,236
Estimated earnings, net of losses.... 705
------------
2,941
Less -- Billings to date............. (3,517)
------------
$ (576)
============
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... $ 27
Less -- Billings in excess of costs
and estimated earnings on
uncompleted contracts.............. (603)
------------
$ (576)
============

5. LONG-TERM OBLIGATIONS:

Long-term obligations consist of notes payable to banks. The debt is
secured by certain equipment, accounts receivable, inventory, and the personal
guaranty of the president of the Company. The Company has restrictive and
various financial covenants with which the Company was in compliance at December
31, 1997.

Long-term debt at December 31, 1997, consists of the following (in
thousands):

Note payable to Norwest Bank of South
Dakota with interest at 9% due in
monthly installments of $1
including interest through July 1,
2001, secured by equipment......... $ 38
Note payable to Chrysler Credit with
interest at 8.15% due in monthly
installments of $.5 including
interest through November 27, 2001,
secured by vehicle................. 20
Note payable to Chrysler Credit with
interest at 7.99% due in monthly
installments of $1 including
interest through January 28, 1999,
secured by vehicle................. 9
Note payable to Founders Trust
National Bank with interest at
8.75% due in monthly installments
of $3 including interest through
July 10, 2002, secured by
equipment.......................... 131
---------
198
Less -- Current maturities........... (47)
---------
$ 151
=========

F-148
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The maturities of long-term debt as of December 31, 1997, are as follows
(in thousands):

Year ending December 31 --
1998............................ $ 47
1999............................ 42
2000............................ 46
2001............................ 44
2002............................ 19
---------
$ 198
=========

The Company has a $400,000 line of credit with a bank. The line of credit
expires August 1, 1998, and bears interest at 1/4 percent over the bank's prime
lending rate of 8.5 percent at December 31, 1997. No balance was outstanding at
December 31, 1997. The line of credit is secured by accounts receivable,
inventory, equipment and a personal guarantee of the president of the Company.

6. LEASES:

The Company leases facilities from a company which is owned by the
Company's stockholders. The leases expire on December 31, 1999. Rent paid under
these related-party leases was approximately $110,000 and $112,000 for the years
ended December 31, 1996 and 1997, respectively.

Future minimum lease payments under noncancelable operating leases are as
follows (in thousands):

Year ending December 31 --
1998............................ $ 189
1999............................ 145
2000............................ 15
2001............................ 2
---------
$ 351
=========

7. INCOME TAXES:

Federal and state income taxes for M.J. Dalsin Company, Inc. are as follows
(in thousands):

YEAR ENDED
DECEMBER 31,
1997
------------
Federal --
Current......................... $ 80
Deferred........................ 11
State --
Current......................... 20
------------
$ 111
============

F-149
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

YEAR ENDED
DECEMBER 31,
1997
------------
Provision at the statutory rate...... $ 198
Increase (decrease) resulting from:
Permanent difference; nontaxable
income related to S Corp....... (85)
Permanent differences; primarily
meals and entertainment........ (1)
State income tax, net of benefit
for federal deduction.......... (1)
------------
$ 111
============

YEAR ENDED
DECEMBER 31,
1997
------------
Deferred income tax assets:
Reserve for loss contracts...... $ 35
Warranties...................... 11
Bad debts....................... 8
Other........................... 5
---
Total deferred income tax
asset................... 59
---
Deferred income tax liabilities:
Property and equipment.......... (25)
---
Total deferred income tax
liability............... (25)
---
Net deferred income tax
asset................... $ 34
===

8. RELATED-PARTY TRANSACTIONS:

The Company purchases approximately 60 percent of its roofing supplies from
Roofers Mart of Minnesota, Inc. (Roofers Mart). The Company's stockholder owns
approximately 6 percent of Roofers Mart.

The Company is a guarantor on debt owed by Dalsin Development Company
(owned by the Company's stockholder) on a building the Company rents (see Note
6). At December 31, 1997, the balance on the debt was $124,000.

9. EMPLOYEE BENEFIT PLAN:

The Company has a defined contribution profit-sharing plan. The plan
provides for the Company to match 25 percent of the first 8 percent contributed
by each employee. Total contributions by the Company under the plan were
approximately $27,000 for the year ended December 31, 1997.

F-150
<PAGE>
M.J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
AND M.J. DALSIN COMPANY, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents,
marketable securities, a line of credit and notes payable. The Company believes
that the carrying value of these instruments on the balance sheet as of December
31, 1997, approximates fair value.

11. COMMITMENTS AND CONTINGENCIES:

LITIGATION

The Company is involved in disputes or legal actions in the ordinary course
of business. Management does not believe the outcome of such legal actions will
have a material adverse effect on the Company's financial position or results of
operations.

INSURANCE

12. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company had revenues of 12 percent of total sales to one major customer
during the year ended December 31, 1997.

The Company grants credit, which is secured by mechanic's liens or
performance/payment bonds, as applicable, to its customers, who are located
primarily in North and South Dakota. Consequently, the Company is subject to
potential credit risk related to changes in business and economic factors within
these states. Management believes, however, that its contract acceptance,
billing and collection policies are adequate to minimize the potential credit
risk.

13. EVENTS SUBSEQUENT TO DATE OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
(UNAUDITED):

F-151

<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
-----
Prospectus Summary................... 1
Risk Factors......................... 10
The Company.......................... 17
Use of Proceeds...................... 20
Dividend Policy...................... 20
Capitalization....................... 21
Dilution............................. 22
Selected Financial Data.............. 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 25
Business............................. 44
Management........................... 55
Certain Transactions................. 60
Principal Stockholders............... 64
Description of Capital Stock......... 64
Shares Eligible for Future Sale...... 68
Certain United States Federal Tax
Consequences to Non-U.S. Holders... 70
Underwriting......................... 73
Legal Matters........................ 75
Experts.............................. 76
Additional Information............... 76
Index to Financial Statements........ F-1

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

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT 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.

6,000,000 SHARES

INCOM ROOFING
SERVICES, INC.

(LOGO)

COMMON STOCK

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

PROSPECTUS

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

MERRILL LYNCH & CO.
NATIONSBANC MONTGOMERY
SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES
SANDERS MORRIS MUNDY

, 1998
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

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

PRELIMINARY PROSPECTUS DATED JULY 24, 1998

PROSPECTUS
6,000,000 SHARES

INCOM ROOFING SERVICES, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock, par value $.01 per share (the "Common
Stock"), offered hereby are being offered by INCOM Roofing Services, Inc.
("INCOM" or the "Company").

Of the shares of Common Stock being offered hereby, 1,200,000 shares (the
"International Shares") are being offered initially outside the United States
and Canada (the "International Offering") by the International Managers and
4,800,000 shares (the "U.S. Shares") are being offered initially in the United
States and Canada (the "U.S. Offering" and, together with the International
Offering, the "Offerings") by the U.S. Underwriters. The price to public and
underwriting discount per share are identical for both Offerings and the
closings for both Offerings are conditioned upon each other. See
"Underwriting."

The Company intends to make application to list the Common Stock on the New
York Stock Exchange ("NYSE") under the symbol "ICR."

SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES
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.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
- --------------------------------------------------------------------------------
Per Share.......... $ $ $
- --------------------------------------------------------------------------------
Total(3)........... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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

(3) The Company has granted the International Managers and U.S. Underwriters
options, exercisable within 30 days after the date hereof, to purchase up to
180,000 and 720,000 additional shares of Common Stock, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Company will be
$ , $ and $ , respectively. See "Underwriting."
------------------------

MERRILL LYNCH INTERNATIONAL
NATIONSBANC MONTGOMERY SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES
SANDERS MORRIS MUNDY
------------------------

The date of this Prospectus is , 1998.
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS 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."

FOR UNITED KINGDOM PURCHASERS: THE SHARES OF COMMON STOCK MAY NOT BE
OFFERED OR SOLD IN THE UNITED KINGDOM OTHER THAN TO PERSONS WHOSE ORDINARY
ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OF
INVESTMENTS, WHETHER AS PRINCIPAL OR AGENT (EXCEPT IN CIRCUMSTANCES THAT DO NOT
CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THE PUBLIC OFFERS OF
SECURITIES REGULATIONS 1995 OR THE FINANCIAL SERVICES ACT 1986), AND THIS
PROSPECTUS MAY ONLY BE ISSUED OR PASSED ON TO ANY PERSON IN THE UNITED KINGDOM
IF THAT PERSON IS OF A KIND DESCRIBED IN ARTICLE 11(3) OF THE FINANCIAL SERVICES
ACT 1986 (INVESTMENT ADVERTISEMENTS) (EXEMPTIONS) ORDER 1996 OR IS A PERSON TO
WHOM THE PROSPECTUS MAY OTHERWISE LAWFULLY BE PASSED ON.

ii
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Subject to the terms and conditions set forth in the international purchase
agreement (the "International Purchase Agreement") among the Company and each
of the underwriters named below (the "International Managers"), the Company
has agreed to sell to each of the International Managers, and each of the
International Managers, for whom Merrill Lynch International (the "Lead
Manager"), NationsBanc Montgomery Securities LLC, SunTrust Equitable Securities
Corporation and Sanders Morris Mundy Inc. are acting as international
representatives (the "International Representatives"), has severally agreed to
purchase, the number of shares of Common Stock set forth below opposite their
respective names.

NUMBER OF
INTERNATIONAL MANAGER SHARES
----------
Merrill Lynch International..........
NationsBanc Montgomery Securities
LLC................................
SunTrust Equitable Securities
Corporation........................
Sanders Morris Mundy Inc.............

----------
Total.................. 1,200,000
==========

The Company has also entered into a U.S. purchase agreement (the "U.S.
Purchase Agreement") with certain other underwriters in the United States and
Canada (the "U.S. Underwriters" and, together with the International Managers,
the "Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), NationsBanc Montgomery Securities LLC,
SunTrust Equitable Securities Corporation and Sanders Morris Mundy Inc. are
acting as representatives (the "U.S. Representatives" and, together with the
International Representatives, the "Representatives"). Subject to the terms
and conditions set forth in the U.S. Purchase Agreement, and concurrently with
the sale of 1,200,000 shares of Common Stock to the International Managers
pursuant to the International Purchase Agreement, the Company has agreed to sell
to the U.S. Underwriters, and the U.S. Underwriters severally have agreed to
purchase from the Company, an aggregate of 4,800,000 shares of Common Stock. The
public offering price per share of Common Stock and the total underwriting
discount per share are identical under the International Purchase Agreement and
the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement,
the several International Managers and the several U.S. Underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such Purchase Agreement if any of such shares being sold pursuant to each
such Purchase Agreement are purchased. Under certain circumstances, the
commitments of non-defaulting International Managers or U.S. Underwriters (as
the case may be) may be increased as set forth in the International Purchase
Agreement and the U.S. Purchase Agreement, respectively. The closing with
respect to the sale of shares of Common Stock to be purchased by the
International Managers and the U.S. Underwriters are conditioned upon one
another.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Under the terms of the Intersyndicate
Agreement, the Underwriters are permitted to sell shares of Common Stock to each
other for the purposes of resale at the public offering price, less an amount
not greater than the selling concession. Under the terms of the Intersyndicate
Agreement, the International Managers and any dealer to whom they sell shares of
Common Stock will not offer to sell or sell shares of Common Stock to persons
who are United States or Canadian persons or to persons they believe intend to
resell to persons who are United

73
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
States or Canadian persons, and the U.S. Underwriters and any dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-United States and non-Canadian persons or to
persons they believe intend to resell to persons who are non-United States
persons or non-Canadian persons, except, in each case, for transactions pursuant
to the Intersyndicate Agreement.

The Lead Manager has advised the Company that the International Managers
propose initially to offer the shares of Common Stock offered hereby to the
public at the initial public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share. The International Managers may allow, and such dealers may
reallow, a discount not in excess of $ per share on sales to certain other
dealers. After the Offerings, the initial public offering price, concession and
discount may be changed.

The Company has granted the International Managers an option, exercisable
by the Lead Manager for 30 days after the date of this Prospectus, to purchase
up to an aggregate of 180,000 additional shares of Common Stock at the initial
public offering price set forth on the cover page hereof, less the underwriting
discount. The International Managers may exercise this option to cover
overallotments, if any, made on the sale of the shares of Common Stock offered
hereby. If the International Managers exercise this option, each International
Manager will have a firm commitment, subject to certain conditions, to purchase
approximately the same percentage thereof which the number of shares of Common
Stock to be purchased by it shown in the foregoing table bears to the 1,200,000
shares of Common Stock initially offered hereby. The Company has also granted an
option to the U.S. Underwriters, which expires 30 days after the date of this
Prospectus, to purchase up to 720,000 additional shares of Common Stock to cover
over-allotments, if any, on terms similar to those granted to the International
Managers.

The Company and each of its directors and executive officers have agreed
not to (i) directly or indirectly, offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock or file any registration statement
under the Securities Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, for a period of 180 days from the date of this
Prospectus without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated on behalf of the Underwriters, except for (i) shares issued
in connection with acquisitions, provided that (except with respect to shares
issued in transactions in which the issuance or resale of such shares is not
registered under the Securities Act), the recipients of such shares agree to be
bound by similar restrictions, (ii) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to the Company's benefit plans
described herein or (iii) with respect to directors and executive officers,
certain pledges of securities.

If the Underwriters create a short position in the Common Stock in
connection with the Offerings, (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the U.S. Underwriters
may reduce that short position by purchasing Common Stock in the open market.
The U.S.

74
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
Underwriters may also elect to reduce any short position by exercising all or
part of the over-allotment option described above.

The Company intends to make application to list the Common Stock on the
NYSE under the symbol "ICR."

The U.S. Underwriters have reserved for sale, at the initial public
offering price, up to 6,000,000 shares of Common Stock for certain employees,
directors and business associates of, and certain other persons designated by,
the Company who have expressed an interest in purchasing such shares of Common
Stock. The number of shares available for sale to the general public in the
Offering will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares not so purchased will be offered to the general
public on the same basis as other shares offered hereby.

The Underwriters have informed the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.

Each International Manager represents and agrees that (a) it has not
offered or sold and prior to the expiration of six months from the date hereof,
will not offer or sell any shares of Common Stock to persons in the United
Kingdom, except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the Common
Stock in, from or otherwise involving the United Kingdom, and (c) it has only
issued or passed on and will only issue or pass on to any person in the United
Kingdom any document received by it in connection with the issue or sale of the
Common Stock if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.

75
<PAGE>
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

LEGAL MATTERS

EXPERTS

INCOM Roofing Services, Inc.......... July 20, 1998
Beta Construction Company and
Affiliate.......................... June 18, 1998
D. C. Taylor Co...................... June 5, 1998
Seyforth Roofing Company, Inc. and
Affiliate.......................... June 22, 1998
Brazos Roofing International of South
Dakota, Inc. and
Affiliate.......................... June 22, 1998
Nu-Tec Roofing Contractors, Inc...... June 5, 1998
Evans Service Company, Inc. and
Subsidiaries......................... June 4, 1998
Burns & Scalo Roofing Company, Inc.,
Cuddy Roofing Company, Inc. and
Scalo, Inc......................... June 5, 1998
Chamberlin Waterproofing & Roofing
Systems, Inc....................... June 11, 1998
Boone Brothers Roofing, Inc.......... June 5, 1998
Sutter Roofing Company of Florida and
Sutter Roofing Company of SW
Florida............................ June 5, 1998
M. J. Dalsin Company, Inc. and M. J.
Dalsin Company
of South Dakota, Inc............... June 5, 1998

ADDITIONAL INFORMATION

The Company intends to furnish its stockholders with annual reports
containing audited financial statements examined by an independent public
accounting firm for each fiscal year.

<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
-----
Prospectus Summary................... 1
Risk Factors......................... 10
The Company.......................... 17
Use of Proceeds...................... 20
Dividend Policy...................... 20
Capitalization....................... 21
Dilution............................. 22
Selected Financial Data.............. 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 25
Business............................. 44
Management........................... 55
Certain Transactions................. 60
Principal Stockholders............... 64
Description of Capital Stock......... 64
Shares Eligible for Future Sale...... 68
Certain United States Federal Tax
Consequences to Non-U.S. Holders... 70
Underwriting......................... 73
Legal Matters........................ 76
Experts.............................. 76
Additional Information............... 76
Index to Financial Statements........ F-1

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

6,000,000 SHARES

INCOM ROOFING
SERVICES, INC.

(LOGO)

COMMON STOCK

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

PROSPECTUS

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

MERRILL LYNCH INTERNATIONAL
NATIONSBANC MONTGOMERY
SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES
SANDERS MORRIS MUNDY

, 1998

<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION(1)

SEC Registration Fee................. $ 28,497
NASD Filing Fee...................... 9,470
Listing Fee.......................... *
Accounting Fees and Expenses......... *
Legal Fees and Expenses.............. *
Printing Expenses.................... *
Transfer Agent's Fees................ *
Miscellaneous........................ *
---------
Total...................... $ *
=========

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

(1) The amounts set forth above, except for the SEC and NASD fees, are in each
case estimated.

* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Subsection (a) of section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.

Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and administrators; and empowers the
corporation to purchase and maintain insurance on behalf of a director or
officer of the

II-1
<PAGE>
corporation against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.

Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.

Section 7(d) of the Company's Amended and Restated Certificate of
Incorporation states that:

A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit. If the
DGCL is amended to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended. Any repeal or modification of this Section 7(d) by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.

In addition, Article IX of the Company's Bylaws further provides that the
Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.

The Company intends to enter into indemnification agreements with each of
its executive officers and directors.

Under the Underwriting Agreement filed as Exhibit 1.1 to this Registration
Statement, the Underwriters have agreed to indemnify, under certain conditions,
the Company, its officers and directors, and persons who control the Company
within the meaning of the Securities Act of 1933, as amended, against certain
liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is certain information concerning all sales of securities
by the Company during the past three years that were not registered under the
Securities Act of 1933. The description presented below gives effect to the
Company's recent 1,479.523-for-one stock split effected in July 1998.

(a) On February 26, 1998, the Company issued 2,580,535 shares of its
Common Stock to Sterling City Capital, LLC and certain individuals at an
aggregate price of $1,744.17.

(b) On May 18, 1998, the Company issued 30,000 shares of its Common Stock
to a consultant of Sterling City Capital, LLC, at an aggregate price of $20.28.

(c) On June 1, 1998, the Company issued 100,000 shares of its Common Stock
to the Company's Chief Financial Officer at an aggregate price of $67.59.

See "Certain Transactions" for a discussion of the issuance of shares of
Common Stock in connection with the Acquisitions.

These transactions were completed without registration under the Securities
Act of 1933 in reliance on the exemption provided by Section 4(2) of the
Securities Act of 1933.

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<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

EXHIBIT
- ------------------------

*1.1 -- Form of Underwriting Agreement.
*1.2 -- Form of International Underwriting
Agreement.
2.1 -- Form of Stock Purchase Agreement, dated
as of July 22, 1998 by and among INCOM
Roofing Services, Inc., and all of the
Stockholders of each of the Founding
Companies.
*3.1 -- Certificate of Incorporation.
*3.2 -- Bylaws.
*4.1 -- Specimen Common Stock Certificate.
*5.1 -- Opinion of Andrews & Kurth L.L.P. as to
the legality of the securities being
registered.
*10.1 -- Form of Employment and Non-Competition
Agreement.
*10.2 -- INCOM Roofing Services, Inc. 1998 Stock
Plan.
*21.1 -- List of subsidiaries of the registrant
(after giving effect to the Acquisitions).
*23.1 -- Consent of Andrews & Kurth L.L.P.
(included in Exhibit 5.1).
23.2 -- Consent of Arthur Andersen LLP.
24.1 -- Powers of Attorney (included in
signature page set forth herein).
27 -- Financial Data Schedule.
*99.1 -- Consents of Directors.

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

* To be filed by amendment.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the 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.

The undersigned registrant hereby undertakes:

(1) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by 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 was declared
effective.

(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

(3) To provide to the Underwriters at the closing specified in the
underwriting agreements certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to
each purchaser.

II-3
<PAGE>
SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON JULY 24, 1998.

INCOM Roofing Service, Inc.
By:/s/C. BYRON SNYDER
C. BYRON SNYDER
PRESIDENT

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints C. Byron Snyder, John M. Kafka and Robert
S. Zlotnik, and each of them, his true and lawful attorneys-in-fact and agents
with full power of substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any subsequent registration
statements filed by the Registrant pursuant to Rule 462(b) of the Securities Act
of 1933, which relates to this Registration Statement, and to file same, with
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his or their
substitutes, may lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON JULY 24, 1998.

SIGNATURE TITLE
- ----------------------------------------------------------------------------
/s/C. BYRON SNYDER Chairman of the Board of Directors
C. BYRON SNYDER and President (Principal Executive
Officer, Principal Financial Officer and
Principal Accounting Officer)

II-4

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

STOCK PURCHASE AGREEMENT

dated as of the 22nd day of July, 1998

by and among

INCOM ROOFING SERVICES, INC.

[ ]

and

all of the STOCKHOLDERS of [ ]

- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS

Page

RECITALS.....................................................................1

1. SALE AND PURCHASE OF STOCK.............................................5
1.1 SALE AND PURCHASE................................................5
1.2 PURCHASE PRICE...................................................5
1.3 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF THE
COMPANY AND INCOM................................................5

2. BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY.........................6
2.1 BOARD OF DIRECTORS...............................................6
2.2 OFFICERS.........................................................6

3. DELIVERY OF CONSIDERATION..............................................6
3.1 STOCKHOLDERS' CONSIDERATION......................................6
3.2 STOCKHOLDERS' DELIVERIES.........................................6

4. CLOSING................................................................6

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................7
5.1 DUE ORGANIZATION.................................................7
5.2 AUTHORIZATION....................................................8
5.3 CAPITAL STOCK OF THE COMPANY.....................................8
5.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING...........8
5.5 NO BONUS SHARES..................................................8
5.6 SUBSIDIARIES; OWNERSHIP IN OTHER ENTITIES........................8
5.7 PREDECESSOR STATUS; ETC..........................................9
5.8 SPIN-OFF BY THE COMPANY..........................................9
5.9 FINANCIAL STATEMENTS.............................................9
5.10 LIABILITIES AND OBLIGATIONS.....................................10
5.11 ACCOUNTS AND NOTES RECEIVABLE...................................11
5.12 PERMITS AND INTANGIBLES.........................................11
5.13 ENVIRONMENTAL MATTERS...........................................11
5.14 PERSONAL PROPERTY...............................................13
5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS.......13
5.16 REAL PROPERTY...................................................14
5.17 INSURANCE.......................................................15
5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; LABOR MATTERS..............15
5.19 EMPLOYEE PLANS..................................................16
5.20 COMPLIANCE WITH ERISA...........................................16
5.21 CONFORMITY WITH LAW; LITIGATION.................................17

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<PAGE>
5.22 TAXES...........................................................18
5.23 NO VIOLATIONS; NO CONSENT REQUIRED, ETC.........................18
5.24 GOVERNMENT CONTRACTS............................................20
5.25 ABSENCE OF CHANGES..............................................20
5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY............................21
5.27 VALIDITY OF OBLIGATIONS.........................................21
5.28 RELATIONS WITH GOVERNMENTS......................................22
5.29 DISCLOSURE......................................................22
5.30 NO WARRANTIES OR INSURANCE......................................22
5.31 INTEREST IN CUSTOMERS AND SUPPLIERS AND RELATED PARTY
TRANSACTIONS....................................................22
5.32 REGISTRATION STATEMENT..........................................23
5.33 AUTHORITY; OWNERSHIP............................................23
5.34 PREEMPTIVE RIGHTS...............................................23
5.35 NO COMMITMENT TO DISPOSE OF INCOM STOCK.........................23

6. REPRESENTATIONS OF INCOM..............................................23
6.1 DUE ORGANIZATION................................................24
6.2 AUTHORIZATION...................................................24
6.3 CAPITAL STOCK OF INCOM..........................................24
6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING..........25
6.5 SUBSIDIARIES....................................................25
6.6 FINANCIAL STATEMENTS............................................25
6.7 LIABILITIES AND OBLIGATIONS.....................................25
6.8 CONFORMITY WITH LAW; LITIGATION.................................26
6.9 NO VIOLATIONS...................................................26
6.10 VALIDITY OF OBLIGATIONS.........................................27
6.11 INCOM STOCK.....................................................28
6.12 NO SIDE AGREEMENTS..............................................28
6.13 BUSINESS; REAL PROPERTY; MATERIAL AGREEMENTS....................28
6.14 RELATIONS WITH GOVERNMENTS......................................28
6.15 DISCLOSURE......................................................29
6.16 OTHER AGREEMENTS................................................29
6.17 REGISTRATION STATEMENT..........................................29

7. COVENANTS PRIOR TO CLOSING............................................29
7.1 ACCESS AND COOPERATION; DUE DILIGENCE; TRANSFER OF REAL ESTATE..29
7.2 CONDUCT OF BUSINESS PENDING CLOSING.............................30
7.3 PROHIBITED ACTIVITIES...........................................31
7.4 NO SHOP.........................................................32
7.5 AGREEMENTS......................................................33
7.6 NOTIFICATION OF CERTAIN MATTERS.................................33
7.7 AMENDMENT OF SCHEDULES..........................................33
7.8 COOPERATION IN PREPARATION OF REGISTRATION STATEMENT............34
7.9 FINAL FINANCIAL STATEMENTS......................................34
7.10 FURTHER ASSURANCES..............................................35

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<PAGE>
7.11 AUTHORIZED CAPITAL..............................................35
7.12 COMPLIANCE WITH THE HART-SCOTT ACT..............................35

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS AND
COMPANY...............................................................35
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS......36
8.2 SATISFACTION....................................................36
8.3 NO LITIGATION...................................................36
8.4 OPINION OF COUNSEL..............................................36
8.5 REGISTRATION STATEMENT; MINIMUM VALUE...........................36
8.6 CONSENTS AND APPROVALS..........................................37
8.7 GOOD STANDING CERTIFICATES......................................37
8.8 NO MATERIAL ADVERSE CHANGE......................................37
8.9 CLOSING OF IPO..................................................37
8.10 SECRETARY'S CERTIFICATE.........................................37
8.11 EMPLOYMENT AGREEMENTS...........................................37
8.12 TAX MATTERS.....................................................37
8.13 OTHER FOUNDING COMPANIES........................................38
8.14 COMPANY RELEASE OF STOCKHOLDERS.................................38
8.15 STERLING CITY CAPITAL TRANSFER RESTRICTIONS.....................38

9. CONDITIONS PRECEDENT TO OBLIGATIONS OF INCOM..........................38
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE AND OBLIGATIONS.....38
9.2 NO LITIGATION...................................................39
9.3 SECRETARY'S CERTIFICATE.........................................39
9.4 NO MATERIAL ADVERSE EFFECT......................................39
9.5 STOCKHOLDERS' RELEASE...........................................39
9.6 TERMINATION OF RELATED PARTY AGREEMENTS.........................39
9.7 OPINION OF COUNSEL..............................................40
9.8 CONSENTS AND APPROVALS..........................................40
9.9 GOOD STANDING CERTIFICATES......................................40
9.10 REGISTRATION STATEMENT..........................................40
9.11 EMPLOYMENT AGREEMENTS...........................................40
9.12 CLOSING OF IPO..................................................40
9.13 FIRPTA CERTIFICATE..............................................40
9.14 RESIGNATIONS OF DIRECTORS AND OFFICERS..........................40

10. COVENANTS OF INCOM AND THE STOCKHOLDERS AFTER CLOSING.................41
10.1 RELEASE FROM GUARANTEES; REPAYMENT OF CERTAIN OBLIGATIONS.......41
10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT....................41
10.3 PREPARATION AND FILING OF TAX RETURNS...........................41
10.4 DIRECTORS.......................................................42
10.5 [DISTRIBUTIONS FROM INSURANCE COMPANY] [FOR SUTTER ONLY]........42

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<PAGE>
11. INDEMNIFICATION.......................................................42
11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS.....................43
11.2 INDEMNIFICATION BY INCOM........................................44
11.3 THIRD PERSON CLAIMS.............................................44
11.4 EXCLUSIVE REMEDY................................................45
11.5 LIMITATIONS ON INDEMNIFICATION..................................45

12. TERMINATION OF AGREEMENT..............................................47
12.1 TERMINATION.....................................................47
12.2 PROCEDURE AND EFFECT OF TERMINATION.............................48

13. NONCOMPETITION........................................................48
13.1 PROHIBITED ACTIVITIES...........................................48
13.2 DAMAGES.........................................................49
13.3 REASONABLE RESTRAINT............................................49
13.4 SEVERABILITY; REFORMATION.......................................50
13.5 INDEPENDENT COVENANT............................................50
13.6 MATERIALITY.....................................................50

14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.............................50
14.1 STOCKHOLDERS....................................................50
14.2 INCOM...........................................................51
14.3 DAMAGES.........................................................51
14.4 SURVIVAL........................................................52
14.5 RETURN OF INFORMATION...........................................52

15. TRANSFER RESTRICTIONS.................................................52
15.1 TRANSFER RESTRICTIONS...........................................52

16. FEDERAL SECURITIES ACT REPRESENTATIONS................................52
16.1 COMPLIANCE WITH LAW.............................................52
16.2 ECONOMIC RISK; SOPHISTICATION...................................53

17. REGISTRATION RIGHTS...................................................53
17.1 PIGGYBACK REGISTRATION RIGHTS...................................53
17.2 REGISTRATION PROCEDURES.........................................54
17.3 INDEMNIFICATION.................................................56
17.4 UNDERWRITING AGREEMENT..........................................58
17.5 TRANSFER OF RIGHTS..............................................58
17.6 RULE 144 REPORTING..............................................58

18. GENERAL...............................................................59
18.1 COOPERATION.....................................................59
18.2 SUCCESSORS AND ASSIGNS..........................................59

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<PAGE>
18.3 ENTIRE AGREEMENT................................................59
18.4 COUNTERPARTS....................................................59
18.5 BROKERS AND AGENTS..............................................59
18.6 EXPENSES........................................................60
18.7 NOTICES.........................................................60
18.8 GOVERNING LAW...................................................61
18.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................61
18.10 EXERCISE OF RIGHTS AND REMEDIES.................................61
18.11 TIME............................................................61
18.12 REFORMATION AND SEVERABILITY....................................61
18.13 REMEDIES CUMULATIVE.............................................62
18.14 CAPTIONS........................................................62
18.15 AMENDMENTS, WAIVERS AND CONSENTS................................62
18.16 MEDIATION AND ARBITRATION.......................................62
18.17 INFORMATION PROVIDED FOR REGISTRATION STATEMENT.................62

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<PAGE>
ANNEXES

Annex I - Consideration to Be Paid to Stockholders

Annex II - Amended and Restated Certificate of Incorporation and
By-Laws of INCOM; Board Resolutions

Annex III - Form of Opinion of Counsel to INCOM

Annex IV - Form of Opinion of Counsel to Company and Stockholders

Annex V - Form of Key Employee Employment Agreement

Annex VI - Form of Arthur Andersen Tax Opinion

-vi-
<PAGE>
SCHEDULES
2.1 Board of Directors
2.2 Officers
5.1 Due Organization
5.2 Authorization
5.3 Capital Stock of the Company
5.4 Transactions in Capital Stock; Organization Accounting
5.5 No Bonus Shares
5.6 Subsidiaries; Ownership in Other Entities
5.7 Predecessor Status; etc
5.8 Spin-off by the Company
5.9 Financial Statements
5.10 Liabilities and Obligations
5.11 Accounts and Notes Receivable
5.12 Permits and Intangibles
5.13 Environmental Matters
5.14 Personal Property
5.15 Significant Customers; Material Contracts and Commitments
(Schedules 5.15(a), 5.15(b) and 5.15 (c))
5.16 Real Property
5.17 Insurance
5.18 Compensation; Employment Agreements; Labor Matters
5.19 Employee Plans
5.20 Compliance with ERISA
5.21 Conformity with Law; Litigation
5.22 Taxes
5.23 No Violations, No Consents Required, Etc.
(Schedules 5.23(a), 5.23(b), 5.23(c) and 5.23(e))
5.24 Government Contracts
5.25 Absence of Changes
5.26 Deposit Accounts; Powers of Attorney
5.30 No Warranties or Insurance
5.31 Interest in Customers and Suppliers and Related Party Transactions
6.9 No Violations
7.1 Access and Cooperation; Due Diligence; Transfer of Real Estate
7.2 Conduct of Business Pending Closing
7.3 Prohibited Activities
7.5 Agreements
8.11 Employment Agreements
9.7 Termination of Related Party Agreements
10.1 Release From Guarantees; Repayment of Certain Obligations
16.2 Non-accredited Investors 18.5 Brokers and Agents
18.5 Brokers and agents
-vii-
<PAGE>
STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the _____
day of July, 1998, by and among INCOM ROOFING SERVICES, INC., a Delaware
corporation ("INCOM"), [ ], a [ ] corporation (the "Company"), and the
stockholders listed on the signature pages of this Agreement (the
"Stockholders"), which are all the stockholders of the Company.

RECITALS

WHEREAS, the Company is engaged in the roofing business;

WHEREAS, as of the date hereof, the Stockholders own, and as of the
Consummation Date the Stockholders will own, all of the issued and outstanding
capital stock of the Company (the
"Company Stock");

WHEREAS, INCOM is entering into other separate agreements simultaneously
with this Agreement that are substantially the same as this Agreement (the
"Other Agreements"), each of which is entitled "Stock Purchase Agreement," with
each of the Other Founding Companies (as defined herein) and their respective
stockholders in order to acquire additional companies engaged in the roofing
services business;

WHEREAS, this Agreement and the Other Agreements constitute the "INCOM
Plan of
Organization;"

WHEREAS, the Stockholders and the boards of directors and the stockholders
of INCOM, and each of the Other Founding Companies that are parties to the Other
Agreements, have approved and adopted the INCOM Plan of Organization as an
integrated plan pursuant to which the Stockholders and the stockholders of each
of the other Founding Companies will transfer the capital stock of each of the
Founding Companies to INCOM, and the Stockholders and the stockholders of each
of the other Founding Companies will acquire the stock of INCOM (but not cash or
other property) as a tax-free transfer of property under Section 351 of the
Code;

WHEREAS, in consideration of the agreements of the Other Founding
Companies pursuant to the Other Agreements, the Stockholders have approved this
Agreement as part of the INCOM Plan of Organization in order to transfer all of
the issued and outstanding capital stock of the Company to INCOM; and

NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:

1
<PAGE>
Unless the context otherwise requires, capitalized terms used in this
Agreement or in any schedule attached hereto and not otherwise defined shall
have the following meanings for all purposes of this Agreement:

"1933 ACT" means the Securities Act of 1933, as amended.

"1934 ACT" means the Securities Exchange Act of 1934, as amended.

"ACQUIRED PARTY" means the Company, any subsidiary of the Company and
any member of
a Relevant Group.

"AFFILIATES" means with respect to any person or entity, any other person
or entity that directly or indirectly, controls, is controlled by, or is under
common control with such person or entity.

"BALANCE SHEET DATE" has the meaning set forth in Section 5.9.

"CHARTER DOCUMENTS" has the meaning set forth in Section 5.1.

"CLOSING" has the meaning set forth in Section 4.

"CLOSING DATE" has the meaning set forth in Section 4.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.

"COMPANY STOCK" has the meaning set forth in the recitals of this
Agreement.

"CONSUMMATION DATE" has the meaning set forth in Section 4.

"DELAWARE GCL" means the General Corporation Law of the State of
Delaware.

"DRAFT REGISTRATION STATEMENT" means the draft dated July 17, 1998 of the
Registration Statement, and any corrections thereto delivered by INCOM to the
Company for delivery to the Stockholders prior to the time this Agreement is
delivered to INCOM by the Company and the Stockholders following execution by
the Company and the Stockholders.

"EFFECTIVE TIME" means the effective time of the consummation of the
purchase and sale of the Company Stock, which shall occur on the Consummation
Date.

"ENVIRONMENTAL LAWS" has the meaning set forth in Section 5.13(b).

2
<PAGE>
"EXPIRATION DATE" has the meaning set forth in Section 5(A).

"FOUNDING COMPANIES" means the following companies:

Beta Construction Company, a Virginia corporation; Hampton Supply,
Inc., a Maryland corporation; D.C. Taylor Co., an Iowa corporation;
Seyforth Roofing Company, Inc., a New Mexico corporation; SRC, Inc., a
Texas corporation; Seyforth Roofing S.A.deCV, a Mexican corporation;
Brazos Roofing International of South Dakota, Inc., a South Dakota
corporation; Bosque Environmental, Inc., a Texas corporation; Nu-Tec
Roofing Contractors, Inc., an Indiana corporation; Evans Service
Company, Inc., a New York corporation; Burns & Scalo Roofing Company,
Inc., a Pennsylvania corporation; Cuddy Roofing Company, Inc., a
Pennsylvania corporation; Scalo, Inc., a Pennsylvania corporation;
Chamberlain Waterproofing & Roofing Systems, Inc., a Texas
corporation; Boone Brothers Roofing, Inc., a Nebraska corporation;
Sutter Roofing Company of Florida, a Florida corporation; Sutter
Roofing Company of S. W. Florida, a Florida corporation; M. J. Dalsin
Company, Inc., a North Dakota corporation; M.J. Dalsin Company of
South Dakota, Inc., a South Dakota corporation; Kelly Brothers
Roofing, Inc., an Ohio corporation; Mark Enterprises Inc., and Indiana
corporation.

"GAAP" means generally accepted accounting principles as consistently
applied in the
United States.

"HART-SCOTT ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as
amended.

"HAZARDOUS SUBSTANCE" has the meaning set forth in Section 5.13(c).

"INCOM" has the meaning set forth in the first paragraph of this
Agreement.

"INCOM CHARTER DOCUMENTS" has the meaning set forth in Section 6.1.

"INCOM PLAN OF ORGANIZATION" has the meaning set forth in the recitals
of this Agreement.

"INCOM STOCK" means the common stock, par value $.01 per share, of
INCOM.

"IPO" means the initial public offering of INCOM Stock pursuant to the
Registration
Statement.

"KNOWN" OR "KNOWLEDGE," when used in reference to a statement regarding
the existence or absence of facts in this Agreement, is intended by the parties
to mean that the only information to

3
<PAGE>
be attributed to such person is information actually known to (a) the person in
the case of an individual or (b) in the case of a corporation or other entity,
an officer or director.

"MATERIAL ADVERSE CHANGE" means a material adverse change in the business,
operations, properties, assets or condition (financial or otherwise), of the
subject entity and its subsidiaries taken as a whole.

"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise), of the
subject entity and its subsidiaries taken as a whole.

"MATERIAL DOCUMENTS" has the meaning set forth in Section 5.23.

"MINIMUM VALUE" has the meaning set forth in Annex I.

"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past customs and practice (including with respect to quantity
and frequency).

"OTHER AGREEMENTS" has the meaning set forth in the recitals of this
Agreement.

"OTHER FOUNDING COMPANIES" means all of the Founding Companies other
than the
Company.

"PLANS" has the meaning set forth in Section 5.19.

"PRICING" means the date of determination by INCOM and the Underwriters of
the public offering price of the shares of INCOM Stock in the IPO; the parties
hereto contemplate that the Pricing shall take place on the Closing Date.

"QUALIFIED PLANS" has the meaning set forth in Section 5.20.

"REGISTRATION STATEMENT" means that certain registration statement on Form
S-1 to be filed with the SEC covering the shares of INCOM Stock to be issued in
the IPO, including the prospectus and all amendments and supplements thereto.

"RELEVANT GROUP" means the Company and any affiliated, combined,
consolidated, unitary or similar group of which the Company is or was a member.

"RESTRICTED COMMON STOCK" has the meaning set forth in Section 1.3(ii).

"RETURNS" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.

4
<PAGE>
"SCHEDULE" means each Schedule attached hereto, which shall reference the
relevant sections of this Agreement, on which parties hereto disclose
information as part of their respective representations, warranties and
covenants.

"SEC" means the United States Securities and Exchange Commission.

"STATE OF INCORPORATION" means the State of [
].

"STOCKHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.

"SUBSIDIARIES" means with respect to a person or entity, any corporation
or other entity in which such person or entity owns a 5% or greater ownership
interest.

"TAX" OR "TAXES" means all federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, withholding, employment, excise, property, deed, stamp, alternative
or add-on minimum, or other taxes, assessments, duties, fees, levies or other
governmental charges, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.

"UNDERWRITERS" means the prospective underwriters identified in the
Registration Statement.

1. SALE AND PURCHASE OF STOCK

1.1 SALE AND PURCHASE. Upon the terms and subject to the conditions
contained in this Agreement and in reliance upon the representations,
warranties, covenants and agreements contained in this Agreement, on the
Consummation Date, the Stockholders shall sell to INCOM and INCOM shall purchase
from the Stockholders, all of the issued and outstanding shares of Company Stock
as set forth in Annex I hereto.

1.2 PURCHASE PRICE. The purchase price for the Company Stock shall be as
set forth on Annex I to this Agreement.

1.3 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF THE COMPANY
AND INCOM. The respective designations and numbers of outstanding shares and
voting rights of each class of outstanding capital stock of the Company and
INCOM as of the date of this Agreement are as follows:

(i) as of the date of this Agreement, the authorized and outstanding
Company Stock is as set forth on SCHEDULE 5.3 hereto; and

(ii) immediately prior to the Closing Date and the Consummation
Date, the authorized capital stock of INCOM will consist of 100,000,000
shares of INCOM Stock, of which the number of issued and outstanding
shares will be set forth in the Registration

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Statement, and 10,000,000 shares of preferred stock, $.0l par value, of
which no shares will be issued and outstanding, and 5,000,000 shares of
Restricted Voting Common Stock, $.01 per value (the "Restricted Common
Stock"), all of which will be issued and outstanding except as otherwise
set forth in the Registration Statement.

2. BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY

2.1 BOARD OF DIRECTORS. The Company and the Stockholders shall take
action, including solicitation of resignation of directors, necessary so that
the Board of Directors of the Company as of the Consummation Date shall consist
only of the persons identified on
SCHEDULE 2.1 hereto.

2.2 OFFICERS. The Company and the Stockholders shall take action,
including solicitation of resignation of officers, necessary so that the
officers of the Company as of the Consummation Date shall consist only of the
persons identified on SCHEDULE 2.2 hereto.

3. DELIVERY OF CONSIDERATION

3.1 STOCKHOLDERS' CONSIDERATION. On the Consummation Date, the
Stockholders, who are now and on the Consummation Date will be, the holders of
all of the outstanding Company Stock, shall, upon surrender of certificates
evidencing that Company Stock, receive from INCOM the respective number of
shares of INCOM Stock and the amount of cash described on Annex I hereto, which
shall be payable by certified check or wire transfer of immediately available
funds.

3.2 STOCKHOLDERS' DELIVERIES. The Stockholders shall deliver at the
Closing the certificates representing Company Stock, duly endorsed in blank by
the Stockholders, or accompanied by blank stock powers, and with all necessary
transfer tax and other revenue stamps, acquired at the Stockholders' expense,
affixed and canceled. The Stockholders agree promptly to cure any deficiencies
with respect to the endorsement of the stock certificates or other documents of
conveyance with respect to such Company Stock or with respect to the stock
powers accompanying any Company Stock.

4. CLOSING

At or immediately prior to the Pricing, the parties shall take all actions
necessary to effect the delivery of shares referred to in Section 3 hereof;
provided, that such actions shall not include the actual completion of the
purchase and sale of the Company Stock or the delivery of the INCOM Stock and
cash referred to in Section 3 hereof, each of which actions shall only be taken
upon the Consummation Date as herein provided. The delivery of the Company
Stock, which shall occur at or prior to the Pricing (the "Closing"), shall take
place on the closing date (the "Closing Date") at the offices of Andrews & Kurth
L.L.P, 4200 Chase Tower, 600 Travis, Houston, Texas 77002. All Company Stock
shall be delivered at the Closing to Andrews & Kurth L.L.P., to be held in trust
until the Consummation Date, and shall be returned immediately upon any
termination of this Agreement prior to the Consummation Date. On the
Consummation Date (x) all transactions contemplated by

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this Agreement, including the delivery of shares of INCOM Stock and cash which
the Stockholders shall be entitled to receive pursuant to Annex I hereof, shall
be completed, and (y) the closing with respect to the IPO shall occur and be
completed. The date on which the actions described in the preceding clauses (x)
and (y) occurs shall be referred to as the "Consummation Date."

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE STOCKHOLDERS

(A) REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.

Except as set forth in the disclosure schedules attached hereto and except
as otherwise qualified below, each of the Company and the Stockholders, jointly
and severally, represent and warrant that all of the following representations
and warranties in this Section 5(A) are true at the date of this Agreement and,
subject to Section 7.7 hereto, shall be true at the time of Closing and the
Consummation Date, and that such representations and warranties shall survive
the Consummation Date for a period of eighteen months (the last day of such
period being the "Expiration Date"), except that the warranties and
representations set forth in Sections 5.3, 5.22 and 5.32 hereof shall survive
until such time as the applicable statute of limitations period has run, which
shall be deemed to be the Expiration Date for Sections 5.3, 5.22 and 5.32. For
purposes of this Section 5, the term "Company" shall mean and refer to the
Company and all of its Subsidiaries, if any.

Except as expressly set forth herein, the Company and the Stockholders
expressly disclaim any representation or warranty (express, implied or
otherwise) relating to the Stockholders or the Company and any subsidiary
thereof including, without limitation, any warranty of merchantability or
fitness for a particular purpose.

5.1 DUE ORGANIZATION. The Company is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Incorporation, and has the requisite power and authority to carry on its
business as it is now being conducted. The Company is duly qualified or
authorized to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or authorization necessary except where the failure to be so
qualified or authorized to do business would not have a Material Adverse Effect
on the Company. SCHEDULE 5.1 sets forth a list of all states in which the
Company is authorized or qualified to do business. True, complete and correct
copies of the Certificate or Articles of Incorporation and By-laws, each as
amended, of the Company (the "Charter Documents") are all attached to SCHEDULE
5.1. The Company has delivered to INCOM complete and correct copies of (i) the
stock records of the Company and (ii) all minutes of meetings, written consents
and other evidence, if any, of deliberations of or actions taken by the
Company's Board of Directors, any committees of the Board of Directors and
stockholders during the last five years.

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<PAGE>
5.2 AUTHORIZATION. (i) The officers or other representatives of the
Company executing this Agreement have the authority to enter into and bind the
Company to the terms of this Agreement and (ii) the Company has the full legal
right, power and authority to enter into this Agreement and consummate the
transactions contemplated hereby. Copies of the most recent resolutions adopted
by the Board of Directors of the Company and the most recent resolutions adopted
by the Stockholders, which approve this Agreement and the transactions
contemplated hereby in all respects, certified by the Secretary or an Assistant
Secretary of the Company as being in full force and effect on the date hereof,
are attached hereto as SCHEDULE 5.2.

5.3 CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company is as set forth on SCHEDULE 5.3. All of the issued and outstanding
shares of the capital stock of the Company are owned by the Stockholders in the
amounts set forth in SCHEDULE 5.3, other than any treasury shares listed on
SCHEDULE 5.3. Each Stockholder, severally, represents and warrants that, except
as set forth on SCHEDULE 5.3, the shares of capital stock of the Company owned
by such Stockholder are owned free and clear of all liens, security interests,
pledges, charges, voting trusts, restrictions, encumbrances and claims of every
kind. All of the issued and outstanding shares of the capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable, are owned of record and beneficially by the Stockholders and
further, such shares were offered, issued, sold and delivered by the Company in
compliance with all applicable state and Federal laws concerning the issuance of
securities. Further, none of such shares were issued in violation of any
preemptive rights of any past or present stockholder.

5.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except as set
forth on SCHEDULE 5.4, the Company has not acquired or redeemed any shares of
capital stock of the Company since January 1, 1996. Except as set forth on
SCHEDULE 5.4, (i) no option, warrant, call, conversion right or commitment of
any kind exists which obligates the Company to issue any of its authorized but
unissued capital stock; (ii) the Company has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any distribution in
respect thereof; and (iii) neither the voting stock structure of the Company nor
the relative ownership of shares among any of its respective Stockholders has
been altered or changed in contemplation of the INCOM Plan of Organization.
There are no voting trusts, proxies or other agreements or understandings to
which the Company or any of the Stockholders is a party or is bound with respect
to the voting of any shares of capital stock of the Company.

5.5 NO BONUS SHARES. Except as set forth on SCHEDULE 5.5, none of the
shares of Company Stock was issued pursuant to awards, grants or bonuses in
contemplation of the INCOM Plan of Organization.

5.6 SUBSIDIARIES; OWNERSHIP IN OTHER ENTITIES. Except as set forth on
SCHEDULE 5.6, the Company has no Subsidiaries. Except as set forth in SCHEDULE
5.6, the Company does not presently own, of record or beneficially, or control,
directly or indirectly, any capital stock, securities convertible into capital
stock or any other equity interest in any corporation, association or business

8
<PAGE>
entity nor is the Company, directly or indirectly, a participant in any joint
venture, partnership or
other non-corporate entity.

5.7 PREDECESSOR STATUS; ETC. Set forth on SCHEDULE 5.7 is a listing of all
predecessor companies of the Company, including the names of any entities
acquired by the Company (by stock purchase, merger or otherwise) or owned by the
Company or from whom the Company previously acquired material assets, in any
case, from the earliest date upon which any Stockholder acquired his or her
stock in any Company. Except as disclosed on SCHEDULE 5.7, the Company has not
been, within such period of time, a subsidiary or division of another
corporation or a part of an acquisition which was later rescinded.

5.8 SPIN-OFF BY THE COMPANY. Except as set forth on SCHEDULE 5.8, there
has not been any sale, spin-off or split-up of material assets, other than sales
of inventory in the Ordinary Course of Business, of either the Company or any
other person or entity that is an Affiliate of the Company since January 1,
1996.

5.9 FINANCIAL STATEMENTS. Copies of the following financial
statements are attached
hereto as SCHEDULE 5.9:

(i) the balance sheets of the Company as of December 31, 1996 and
1997 and the related statements of operations, stockholder's equity and
cash flows for the two-year period [or three-year period if Arthur
Andersen has audited a three-year period for purposes of inclusion in the
Registration Statement to meet SEC requirements] ended December 31, 1997,
together with the related notes and schedules (such balance sheets, the
related statements of operations, stockholder's equity and cash flows and
the related notes and schedules are referred to herein as the "Year-end
Financial Statements"); and

(ii) the balance sheet of the Company as of March 31, 1997, the
balance sheet of the Company as of March 31, 1998 (the "Balance Sheet
Date") and the related statements of operations, stockholder's equity and
cash flows for the three-month periods ended March 31, 1997 and 1998,
together with the related notes and schedules (such balance sheets, the
related statements of operations, stockholder's equity and cash flows and
the related notes and schedules are referred to herein as the "Interim
Financial Statements").

The Year-end Financial Statements and the Interim Financial Statements are
collectively called the "Financial Statements". The Financial Statements,
including those included in the Draft Registration Statement, have been prepared
in accordance with GAAP applied on a consistent basis and fairly present the
financial position of the Company as of the dates thereof and the results of its
operations and changes in financial position for the periods then ended,
subject, in the case of the Interim Financial Statements, to normal year-end
audit adjustments and any other adjustments described therein and the absence of
certain footnote disclosures.

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<PAGE>
5.10 LIABILITIES AND OBLIGATIONS. SCHEDULE 5.10 sets forth an accurate
list as of the Balance Sheet Date of (i) all material liabilities of the Company
which are not reflected on the balance sheet of the Company at the Balance Sheet
Date or otherwise reflected in the Company Financial Statements at the Balance
Sheet Date which by their nature would be required in accordance with GAAP to be
reflected in the balance sheet, and (ii) all loan agreements, indemnity or
guaranty agreements, bonds, mortgages, pledges or other security agreements to
which the Company is a party or by which its properties may be bound other than
bid bonds and performance bonds made in the Ordinary Course of Business. Except
as set forth on SCHEDULE 5.10, since the Balance Sheet Date, the Company has not
incurred any material liabilities or obligations of any kind, character or
description, whether accrued, absolute, secured or unsecured, contingent or
otherwise, other than liabilities incurred in the Ordinary Course of Business.
The Company has also delivered to INCOM on SCHEDULE 5.10, in the case of those
contingent liabilities related to pending litigation or litigation that has been
threatened in writing, or other material liabilities which are not fixed or
otherwise accrued or reserved, a good faith estimate of the maximum amount which
the Company expects will be payable and the amount, if any, accrued or reserved
for each such potential liability on the Company's Financial Statements. For
each such contingent liability or liability for which the amount is not fixed or
is contested, the Company has provided to INCOM the following information:

(i) a summary description of the liability together with the
following:

(a) copies of all relevant documentation in the possession
of the Company or its directors, officers or
stockholders relating thereto;
(b) amounts claimed and any other action or relief sought;
and
(c) name of claimant and all other parties to the claim,
suit or proceeding;

(ii) the name of each court or agency before which such claim, suit
or proceeding is pending;

(iii) the date such claim, suit or proceeding was instituted; and

(iv) a good faith estimate of the maximum amount, if any, which the
Company expects, based on information available, is likely to become
payable with respect to each
such liability.

INCOM acknowledges that all estimates referred to above and set forth on
SCHEDULE 5.10 are only good faith estimates, and that the Company and the
Stockholders expressly do not represent or warrant that the actual amounts of
such liabilities will be equal to, or more or less than, the amounts of such
estimates.

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<PAGE>
5.11 ACCOUNTS AND NOTES RECEIVABLE. SCHEDULE 5.11 sets forth an accurate
list, in all material respects, of the accounts and notes receivable of the
Company, as of the Balance Sheet Date, including any such amounts which are not
reflected in the balance sheet as of the Balance Sheet Date, and including all
receivables from and advances to employees and the Stockholders, which are
identified as such. SCHEDULE 5.11 also sets forth a materially accurate aging of
all accounts and notes receivable as of the Balance Sheet Date showing amounts
due in 30-day aging categories. Except to the extent reflected on SCHEDULE 5.11,
such accounts, notes and other receivables are collectible in the amounts shown
on SCHEDULE 5.11, net of reserves reflected in the balance sheet as of the
Balance Sheet Date.

5.12 PERMITS AND INTANGIBLES. The Company or its employees hold all
licenses, franchises, permits and other governmental authorizations ("Licenses")
necessary to conduct the business of the Company, the absence of which would
cause a Material Adverse Effect on the Company, and the Company has delivered to
INCOM a list that is accurate, in all material respects, and summary description
(which is set forth on SCHEDULE 5.12) of all such Licenses, including any
trademarks, trade names, patents, patent applications and copyrights owned or
held by the Company or any of its employees (including interests in software or
other technology systems, programs and intellectual property). At or prior to
the Closing, all such trademarks, trade names, patents, patent applications,
copyrights and other intellectual property will be assigned or licensed to the
Company for no additional consideration. The Licenses and other rights listed on
SCHEDULE 5.12 are valid, and the Company has not received any notice that any
person intends to cancel, terminate or not renew any such License or other
right. The Company has conducted and is conducting its business in compliance in
all material respects with the requirements, standards, criteria and conditions
set forth in the Licenses and other rights listed on SCHEDULE 5.12 and is not in
violation of any of the foregoing in any material respect. Except as
specifically provided in SCHEDULE 5.12, the consummation by the Company of the
transactions contemplated by this Agreement will not result in a default under
or a breach or violation of, or adversely affect the rights and benefits
afforded to the Company by, any such Licenses or other rights.

5.13 ENVIRONMENTAL MATTERS. (a) Except as set forth in SCHEDULE 5.13
attached hereto, (i) the Company has conducted its businesses in compliance in
all material respects with all applicable Environmental Laws, including, without
limitation, having all environmental permits, licenses and other approvals and
authorizations necessary for the operation of its business as presently
conducted, except where the failure to have such permit, license, approval or
authorization would not have a Material Adverse Effect, (ii) none of the
properties owned by the Company contain any Hazardous Substance as a result of
any activity of the Company in amounts exceeding the levels permitted by
applicable Environmental Laws, except where amounts in excess of such levels
would not have a Material Adverse Effect, (iii) the Company has not received any
notices, demand letters or requests for information from any Federal, state,
local or foreign governmental entity or third party indicating that the Company
may be in violation of, or liable under, any Environmental Law in connection
with the ownership or operation of its business, (iv) there are no civil,
criminal or administrative actions, suits, demands, claims, hearings,
investigations or proceedings pending or, to the knowledge of the Company or the
Stockholders, threatened, against

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<PAGE>
the Company relating to any violation, or alleged violation, of any
Environmental Law, except where such violation would not have a Material Adverse
Effect, (v) no reports have been filed, or are required to be filed, by the
Company concerning the release of any Hazardous Substance or the threatened or
actual violation of any Environmental Law, (vi) no Hazardous Substance has been
disposed of, released or transported in violation of any applicable
Environmental Law from any properties owned by the Company as a result of any
activity of the Company during the time such properties were owned, leased or
operated by the Company, (vii) there have been no environmental investigations,
studies, audits, tests, reviews or other analysis regarding compliance or
non-compliance with any applicable Environmental Law conducted by or which are
in the possession of the Company relating to the activities of the Company which
are not listed on SCHEDULE 5.13 attached hereto prior to the date hereof, (viii)
to the knowledge of the Company and the Stockholders, (A) there are no
underground storage tanks on, in or under any properties owned by the Company
and (B) no underground storage tanks have been closed or removed from any of
such properties during the time such properties were owned, leased or operated
by the Company which are not listed on SCHEDULE 5.13, (ix) to the knowledge of
the Company and the Stockholders, (A) there is no asbestos or
asbestos-containing material present in any material quantity in any of the
properties owned by the Company, and (B) no asbestos has been removed from any
of such properties during the time such properties were owned, leased or
operated by the Company, and (x) neither the Company nor any of its respective
properties are subject to any material liabilities or expenditures (fixed or
contingent) relating to any suit, settlement, court order, administrative order,
regulatory requirement, judgment or claim asserted or arising under any
Environmental Law.

(b) As used herein, "ENVIRONMENTAL LAW" means, as of the Closing Date, any
Federal, state, local or foreign law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction or requirement or any agreement with any
governmental entity to which the Company is a party or subject relating to (x)
the protection, preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource) or to human health or safety or (y) the exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous Substances, in
each case as amended and as in effect on the Closing Date. The term
Environmental Law includes, without limitation, (i) the Federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the Federal Water Pollution Control Act of
1972, the Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the
Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, each as
amended and as in effect on the Closing Date, and (ii) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of, effects of or exposure to any Hazardous Substance.

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(c) As used herein, "HAZARDOUS SUBSTANCE" means any substance presently
listed, defined, designated or classified as hazardous, toxic, radioactive, or
dangerous, or otherwise regulated, under any Environmental Law. Hazardous
Substance includes any substance to which exposure is regulated by any
government authority or any Environmental Law including, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos or
asbestos-containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.

5.14 PERSONAL PROPERTY. The Company has delivered to INCOM an accurate
list (which is set forth on SCHEDULE 5.14) of (x) all personal property material
to the operations of the Company as of the Balance Sheet Date included in
"plant, property and equipment" on the balance sheet of the Company, (y) all
other items of personal property owned by the Company with an individual value
in excess of $15,000 (i) as of the Balance Sheet Date and (ii) acquired since
the Balance Sheet Date and (z) all material leases and agreements in respect of
personal property, including, in the case of each of (x), (y) and (z), (1) true,
complete and correct copies of all such leases and (2) an indication as to which
assets are currently owned, or were formerly owned, by Stockholders, relatives
of Stockholders, or Affiliates of the Company. Except as set forth on SCHEDULE
5.14, (i) all personal property material to, and used by, the Company in its
business is either owned by the Company or leased by the Company pursuant to a
lease included on SCHEDULE 5.14, (ii) all of the personal property listed on
SCHEDULE 5.14 or replacement property thereof is in working order and condition,
ordinary wear and tear excepted and (iii) all leases and agreements included on
SCHEDULE 5.14 are in full force and effect and constitute valid and binding
agreements of the Company in each case in accordance with their respective
terms.

5.15 SIGNIFICANT CUSTOMERS; MATERIAL CONTRACTS AND COMMITMENTS

(a) The Company has delivered to INCOM a materially accurate list (which
is set forth on SCHEDULE 5.15(A) of all customers (persons or entities)
representing 5% or more of the Company's annual revenues for any period covered
by any of the Financial Statements. Except to the extent set forth on SCHEDULE
5.15(A), none of such customers has canceled or, to the best knowledge of the
Company and the Stockholders, are currently threatening to cancel a currently
effective contract with the Company.

(b) The Company has listed on SCHEDULE 5.15(B) all material contracts,
commitments and similar agreements to which the Company is a party or by which
it or any of its properties are bound (including, but not limited to, contracts
with customers listed on SCHEDULE 5.15(A), joint venture or partnership
agreements, contracts with any labor organizations, strategic alliances and
options to purchase land), other than agreements listed on SCHEDULES 5.10,
SCHEDULE 5.14 or SCHEDULE 5.16, (a) in existence as of the Balance Sheet Date
and (b) entered into since the Balance Sheet Date, and in each case has
delivered or made available to INCOM true, complete and correct copies of such
agreements. For purposes of the preceding sentence, a contract, commitment or
similar agreement is "material" if it (i) has a term of more than one year
(other than contracts, commitments or

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agreements that are cancelable without liability or penalty within 30 days of
notice from the Company of cancellation or that can be terminated by the Company
without material penalty upon notice of 30 days or less) or (ii) requires the
payment by or to the Company of more than $100,000 during any 12-month period.
Except for expenditures in the ordinary course of business, the Company has also
indicated on SCHEDULE 5.15(B) a summary description of all plans or projects
involving the opening of new operations, expansion of existing operations, or
the acquisition of any personal property, business or assets requiring, in any
event, the payment of more than $50,000 by the Company during any 12-month
period.

(c) Except as set forth on SCHEDULE 5.15(C), the Company is not required
to provide any bonding or other financial security arrangements in any material
amount in connection with any contract listed on SCHEDULE 5.15(B).

5.16 REAL PROPERTY. SCHEDULE 5.16 includes a list of all real property
owned or leased by the Company at the date hereof and all other real property,
if any, used by the Company in the conduct of its business. The Company has good
and insurable title to any real property owned by it that is shown on SCHEDULE
5.16, other than property intended to be sold or distributed prior to the
Closing Date as provided in this Agreement, and all real property so owned is
subject to no mortgage, pledge, lien, conditional sales agreement, encumbrance,
lease, possessory rights of third parties or charge, except for:

(i) liens reflected on SCHEDULE 5.10 or SCHEDULE 5.16 as securing
specified liabilities (with respect to which no material default by the
Company exists);

(ii) liens for current taxes not yet payable and assessments not in
default;

(iii) easements for utilities serving the property; and

(iv) easements, covenants and restrictions and other exceptions to
title which do not adversely affect the current use of the property.

Copies of all leases and agreements in respect of such real property
leased by the Company, which are true, complete and correct in all material
respects, are attached to SCHEDULE 5.16, and an indication as to which such
properties, if any, are currently owned, or were formerly owned, by Stockholders
or Affiliates of the Company or Stockholders is included in SCHEDULE 5.16.
Except as set forth on SCHEDULE 5.16, all of such leases included on SCHEDULE
5.16 are in full force and effect and constitute valid and binding agreements of
the Company in accordance with their respective terms.

5.17 INSURANCE. The Company has delivered to INCOM (i) an accurate list as
of the Balance Sheet Date of all insurance policies carried by the Company and
(ii) an accurate list of all insurance loss runs or workers compensation claims
received for the past three policy years (which lists are set forth on SCHEDULE
5.17). The Company has also delivered to INCOM true, complete and correct copies
of all insurance policies currently in effect. Such insurance policies evidence
all of

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the insurance the Company is required to carry pursuant to all of its contracts
and other agreements and pursuant to all applicable laws. All of such insurance
policies are currently in full force and effect. Since January 1, 1996, no
insurance carried by the Company has been canceled by the insurer and the
Company has not been denied coverage.

5.18 COMPENSATION; EMPLOYMENT AGREEMENTS; LABOR MATTERS.

(a) The Company has delivered to INCOM an accurate list (which is set
forth on SCHEDULE 5.18) showing all officers, directors and key employees of the
Company, listing all employment agreements with such officers, directors and key
employees and the rate of compensation (and the portions thereof attributable to
salary, bonus and other compensation, respectively) of each of such persons as
of (i) the Balance Sheet Date and (ii) the date hereof. The Company has provided
to INCOM true, complete and correct copies of any employment agreements for
persons listed on SCHEDULE 5.18. Since the Balance Sheet Date, except as
disclosed on SCHEDULE 5.18, there have been no increases in the compensation
payable or any special bonuses to any officer, director, key employee or other
employee, except ordinary salary increases implemented on a basis consistent
with past practices.

(b) Except as set forth on SCHEDULE 5.18, (i) the Company is not bound by
or subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union, (ii) to the knowledge of the
Company and the Stockholders, no campaign to establish such arrangement is in
progress and (iii) there is no pending or, to the Company's knowledge and the
Stockholders' knowledge, threatened labor dispute involving the Company and any
group of its employees nor has the Company experienced any labor interruptions
over the past three years. The Company believes its relationship with employees
to be generally good.

(c) Except as set forth in SCHEDULE 5.18 attached hereto, (i) there are no
claims, actions or proceedings pending or, to the knowledge of the Company and
the Stockholders, threatened between the Company and any of its employees, (ii)
the Company has complied in all material respects with all laws relating to the
employment of labor, including, without limitation, any provisions thereof
relating to wages, hours, collective bargaining, and the payment of social
security and similar taxes, and (iii) the Company has not received written
notice from any person asserting that the Company is liable in any material
amount for any arrears of wages or any taxes or penalties for failure to comply
with any of the foregoing.

5.19 EMPLOYEE PLANS. The Company has delivered to INCOM an accurate
schedule (SCHEDULE 5.19) showing all employee benefit plans of the Company,
including all employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and deferred
compensation agreements, together with true, complete and correct copies of such
plans, agreements and any trusts related thereto, and classifications of
employees covered thereby as of the Balance Sheet Date and as of the date of
this Agreement. Except for the employee benefit plans, if any, described on
SCHEDULE 5.19, the Company does not sponsor, maintain or contribute to any plan
program, fund or arrangement that constitutes an "employee pension benefit

15
<PAGE>
plan", and neither the Company nor any subsidiary has any obligation to
contribute to or accrue or pay any benefits under any deferred compensation or
retirement funding arrangement on behalf of any employee or employees (such as,
for example, and without limitation, any individual retirement account or
annuity, any "excess benefit plan" (within the meaning of Section 3(36) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) or any
non-qualified deferred compensation arrangement). For the purposes of this
Agreement, the term "employee pension benefit plan" shall have the same meaning
as is given that term in Section 3(2) of ERISA. The Company has not sponsored,
maintained or contributed to any employee pension benefit plan other than the
plans set forth on SCHEDULE 5.19, and, except as described on SCHEDULE 5.19, the
Company is not or could not be required to contribute to any retirement plan
pursuant to the provisions of any collective bargaining agreement establishing
the terms and conditions of employment of any of the Company's employees.

Except as set forth on SCHEDULE 5.19, the Company is not now, or will not
as a result of its past activities become, liable to the Pension Benefit
Guaranty Corporation or to any multiemployer employee pension benefit plan under
the provisions of Title IV of ERISA.

All employee benefit plans listed on SCHEDULE 5.19 and the administration
thereof are in compliance in all material respects with their terms and all
applicable provisions of ERISA and the regulations issued thereunder, as well as
with all other applicable federal, state and local statutes, ordinances and
regulations.

All accrued contribution obligations of the Company as of the Balance
Sheet Date with respect to any plan listed on SCHEDULE 5.19 have either been
fulfilled in their entirety or are fully reflected on the balance sheet of the
Company as of the Balance Sheet Date.

5.20 COMPLIANCE WITH ERISA. All plans listed on SCHEDULE 5.19 that are
intended to qualify (the "Qualified Plans") under Section 401 (a) of the Code
are, and have been so qualified and have been determined by the Internal Revenue
Service to be so qualified, and copies of such determination letters are
attached to SCHEDULE 5.19. Except as disclosed on SCHEDULE 5.20, all reports and
other documents required to be filed with any governmental agency or distributed
to plan participants or beneficiaries (including, but not limited to, actuarial
reports, audits or tax returns) since January 1, 1992 have been timely filed or
distributed, and copies thereof have been made available to INCOM. Neither
Stockholders, any such plan listed on SCHEDULE 5.19, nor the Company has engaged
in any transaction prohibited under the provisions of Section 4975 of the Code
or Section 406 of ERISA. No such Plan listed on SCHEDULE 5.19 has incurred an
accumulated funding deficiency, as defined in Section 412(a) of the Code and
Section 302(l) of ERISA; and the Company has not incurred any liability for
excise tax or penalty due to the Internal Revenue Service nor any liability to
the Pension Benefit Guaranty Corporation. The Company further represents that
except as set forth on SCHEDULE 5.19 hereto:

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<PAGE>
(i) there have been no terminations, partial terminations or
discontinuations of contributions to any Qualified Plan intended to
qualify under Section 401(a) of the Code without notice to and approval by
the Internal Revenue Service;

(ii) no plan listed on SCHEDULE 5.19 subject to the provisions of
Title IV of ERISA has been terminated;

(iii) there have been no "reportable events" (as that phrase is
defined in Section 4043 of ERISA) with respect to any such plan listed in
SCHEDULE 5.19;

(iv) the Company (including any subsidiaries) has not incurred
liability under Section 4062 of ERISA; and

(v) no circumstances exist pursuant to which the Company could have
any direct or indirect liability whatsoever (including, but not limited
to, any liability to any multiemployer plan or the PBGC under Title IV of
ERISA or to the Internal Revenue Service for any excise tax or penalty, or
being subject to any statutory lien to secure payment of any such
liability) with respect to any plan now or heretofore maintained or
contributed to by any entity other than the Company that is, or at any
time was, a member of a "controlled group" (as defined in Section
412(n)(6)(B) of the Code) that includes the Company.

5.21 CONFORMITY WITH LAW; LITIGATION. Except to the extent set forth on
SCHEDULE 5.21 or SCHEDULE 5.13, the Company has not violated within the five
years prior to the date of this Agreement and is not currently in violation of
any law or regulation or any order of any court or Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over it other than violations that would not
have a Material Adverse Effect on the Company; and except to the extent set
forth on SCHEDULE 5.10 or SCHEDULE 5.13, there are no claims, actions, suits or
proceedings, pending or, to the knowledge of the Company and the Stockholders,
threatened in writing against the Company, at law or in equity, or before or by
any Federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality having jurisdiction over the Company
and no written notice of any claim, action, suit or proceeding, whether pending
or threatened, has been received by the Company, and to the knowledge of the
Company and the Stockholders there is no valid basis for any such claim, action,
suit or proceeding that could reasonably be expected to have a Material Adverse
Effect on the Company.

5.22 TAXES.

(a) The Company has timely filed all requisite Federal, state and other
Tax Returns or extension requests for all fiscal periods ended on or before the
Balance Sheet Date; and except as set forth on SCHEDULE 5.22, there are no
examinations in progress or claims pending against the Company for federal,
state and other Taxes (including penalties and interest) for any period or
periods prior to and including the Balance Sheet Date and no notice of any claim
for Taxes, whether

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<PAGE>
pending or threatened, has been received. All Tax, including interest and
penalties (whether or not shown on any Tax Return), due by the Company has been
paid. The amounts shown as accruals for Taxes on the Financial Statements are
sufficient for the payment of all Taxes of the kinds indicated (including
penalties and interest) for all fiscal periods ended on or before the date of
the respective Financial Statements. Copies of (i) any tax examinations, (ii)
extensions of statutory limitations and (iii) the federal and local income Tax
Returns and franchise Tax Returns of Company for their last three (3) fiscal
years, or such shorter period of time as any of them shall have existed, are
attached hereto as SCHEDULE 5.22 or have otherwise been delivered to INCOM. The
Company has a taxable year ended [___________]. Except as set forth on SCHEDULE
5.22, the Company uses the accrual method of accounting for income tax purposes,
and the Company's methods of accounting have not changed in any material respect
in the past five years (except as required to conform to changes in GAAP). The
Company is not an investment company as defined in Section 351(e)(1) of the
Code. The Company is not and has not during the last five years been a party to
any tax sharing agreement or agreement of similar effect. Except as set forth on
SCHEDULE 5.22, the Company is not and has not during the last five years been a
member of any consolidated group. The Company has not received, been denied, or
applied for any private letter ruling during the last ten years.

(b) [This provision to be included for S corporations only.] The
Stockholders have made a valid election under the provisions of Subchapter S of
the Code and the Company has not, [within the past five years,] [since January
1, 1995 [for Burns & Scalo only]] been subject to Federal income taxes under the
provisions of Subchapter C of the Code. The Stockholders shall pay, and they
hereby agree to indemnify INCOM and the Company against, all income taxes
payable with respect to the Company's operations for all periods [from January
1, 1995, [for Burns & Scalo only]] through and including the Consummation Date.
[As Washington D.C. does not recognize Subchapter S status for purposes of
Washington D.C. taxation, and as Beta has paid or accrued Washington D.C. taxes
on this basis, the preceding sentence will be changed for Beta to insert the
word "federal" before the words "income taxes".

5.23 NO VIOLATIONS; NO CONSENT REQUIRED, ETC.

(a) The Company is not in violation of any Charter Document. Except as set
forth on SCHEDULE 5.23(A), the Company is not in default under any lease,
instrument, agreement, license, or permit set forth on SCHEDULE 5.12, SCHEDULE
5.13, SCHEDULE 5.14, SCHEDULE 5.15 or SCHEDULE 5.16 (the "Material Documents").

(b) Except as set forth on SCHEDULE 5.23(B), the execution and delivery of
this Agreement by each of the Company and the Stockholders do not violate,
conflict with or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company under any of the terms,
conditions or provisions of (i) the Charter Documents of the Company, (ii) any
statute, law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or

18
<PAGE>
license of any court or governmental authority applicable to the Company or any
of its properties or assets, or (iii) any Material Document to which the Company
or any of the Stockholders is now a party or by which any of the Stockholders or
the Company or any of its properties or assets may be bound or affected. The
consummation by the Company and the Stockholders of the transactions
contemplated hereby will not result in any material violation, conflict, breach,
right of termination or acceleration or creation of liens under any of the
terms, conditions or provisions of the items described in clauses (i) through
(iii) of the preceding sentence, subject, in the case of the terms, conditions
or provisions of the items described in clause (iii) above, to obtaining (prior
to the Effective Time) such consents as may be required from commercial lenders,
lessors or other third parties.

(c) Except as set forth on SCHEDULE 5.23(C) and except for the Hart-Scott
Act, none of the Material Documents requires notice to, or the consent or
approval of, any governmental agency or other third party with respect to the
consummation by the Company and the Stockholders of any of the transactions
contemplated hereby in order to remain in full force and effect, and
consummation by the Company and the Stockholders of the transactions
contemplated hereby will not give rise to any right to termination, cancellation
or acceleration or loss of any material right or benefit.

(d) Except for (i) the filings with the SEC pursuant to the 1933 Act in
connection with the IPO and the offer and sale of INCOM Stock pursuant to this
Agreement, (ii) the declaration of the effectiveness thereof by the SEC and
filings with various state blue sky authorities, and (iii) any filing required
under the Hart-Scott Act in connection with the purchase and sale of the Company
Stock, no declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the execution and delivery of this Agreement by the
Company and the Stockholders or the consummation by the Company and the
Stockholders of the transactions contemplated hereby.

(e) Except as set forth on SCHEDULE 5.23(E), none of the Material
Documents prohibits the disclosure or publication by the Company or INCOM of the
name of any other party to such Material Document, and none of the Material
Documents prohibits or restricts the Company from freely providing services or
selling products to any other customer or potential customer of the Company,
INCOM or any Other Founding Company.

5.24 GOVERNMENT CONTRACTS. Except as set forth on SCHEDULE 5.24, the
Company is not
now a party to any governmental contract subject to price redetermination or
renegotiation.

5.25 ABSENCE OF CHANGES. (a) Since the Balance Sheet Date, except as set
forth on SCHEDULE 5.25 or as otherwise contemplated hereby, there has not been:

(i) any Material Adverse Change in the Company;

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<PAGE>
(ii) any damage, destruction or casualty loss (whether or not
covered by insurance), alone or in the aggregate, which has caused a
Material Adverse Effect on the
Company;

(iii) any change in the authorized capital of the Company or its
outstanding securities or any change in its ownership interests or any
grant of any options, warrants, calls, conversion rights or commitments;

(iv) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of the Company
except for distributions that would have been permitted after the date
hereof under Section 7.3(iii) hereof,

(v) any increase in the compensation, bonus, sales commissions or
fee arrangement payable or to become payable by the Company to any of its
officers, directors, Stockholders, employees, consultants or agents,
except for ordinary and customary bonuses and salary increases for
employees in accordance with past practice;

(vi) any work interruptions, labor grievances or claims filed, or
any event or condition of any character, which has caused a Material
Adverse Effect on the Company;

(vii) any sale or transfer, or any agreement to sell or transfer,
any material assets, property or rights of the Company to any person,
including, without limitation, the Stockholders and their affiliates,
except inventory sold or transferred in the Ordinary Course of Business;

(viii)any cancellation, or agreement to cancel, any indebtedness or
other obligation owing to the Company, including without limitation any
indebtedness or obligation of any Stockholders or any Affiliate thereof;

(ix) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the material assets,
property or rights of the Company or requiring consent of any party to the
transfer and assignment of any such assets, property or rights;

(x) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets outside
of the Ordinary Course of Business;

(xi) any waiver of any material rights or claims of the Company;

(xii) any amendment or termination of any Material Document to
which the
Company is a party;

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<PAGE>
(xiii)any transaction by the Company outside the Ordinary Course
of Business;

(xiv) any cancellation or termination of a material contract with a
customer or client listed on SCHEDULE 5.15 prior to the scheduled
termination date thereof; or

(xv) any other distribution of property or assets by the Company
other than in the Ordinary Course of Business, other than distributions of
nonoperating assets specifically identified on SCHEDULE 5.25 and other
than distributions of real estate and other assets as permitted by this
Agreement (including Annex I and the Schedules hereto).

(b) Except as set forth on SCHEDULE 5.25, the Company has not,
between the Balance Sheet Date and the date hereof, taken any of the actions set
forth in Section 7.3.

5.26 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. The Company has delivered to
INCOM an accurate schedule (which is set forth on SCHEDULE 5.26) as of the date
of the Agreement of:

(i) the name of each financial institution in which the Company has
accounts or safe deposit boxes;

(ii) the names in which the accounts or boxes are held;

(iii) the type of account and account number; and

(iv) the name of each person authorized to draw thereon or have
access thereto.

SCHEDULE 5.26 also sets forth the name of each person, corporation, firm or
other entity holding a general or special power of attorney from the Company and
a description of the terms of such power.

5.27 VALIDITY OF OBLIGATIONS. The execution and delivery of this Agreement
by the Company and the performance of the transactions contemplated herein have
been duly and validly authorized by the Board of Directors of the Company and
this Agreement has been duly and validly authorized by all necessary corporate
action and is a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.

5.28 RELATIONS WITH GOVERNMENTS. The Company has not given or offered
anything of value to any governmental official, political party or candidate for
government office nor has the Company, any Stockholder or any Affiliate taken
any action which would cause the Company to be in violation of the Foreign
Corrupt Practices Act of 1977, as amended, or any law of similar effect.

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<PAGE>
5.29 DISCLOSURE. (a) This Agreement, including the Annexes and Schedules
hereto, to the extent they relate to the Company and the Stockholders, the
completed investor questionnaires furnished to INCOM by the Stockholders in
connection herewith and the completed questionnaire related to the Hart-Scott
Act furnished to INCOM by the Company, do not contain an untrue statement of a
material fact concerning the Company or the Stockholders or omit to state a
material fact concerning the Company or the Stockholders necessary to make the
statements herein and therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the foregoing does not apply
to statements contained in or omitted from any of such documents made or omitted
in reliance upon information furnished in writing by INCOM.

(b) The Company and the Stockholders acknowledge and agree (i) that there
exists no firm commitment, binding agreement, or promise or other assurance of
any kind, whether express or implied, oral or written, that a Registration
Statement will become effective or that the IPO pursuant thereto will occur;
(ii) that neither INCOM or any of its officers, directors, agents or
representatives nor any Underwriter shall have any liability to the Company, the
Stockholders or any other person affiliated or associated with the Company for
any failure of the Registration Statement to become effective, the IPO to occur
at a particular price or within a particular range of prices or to occur at all
(other than as a result of a breach of this Agreement by INCOM); and (iii) that
the decision of Stockholders to enter into this Agreement, or to vote in favor
of or consent to the proposed purchase and sale of the Company Stock, has been
or will be made independent of, and without reliance upon, any statements,
opinions or other communications, or due diligence investigations which have
been or will be made or performed by any prospective Underwriter, relative to
INCOM or the prospective IPO.

5.30 NO WARRANTIES OR INSURANCE. Except for warranty liability under
applicable law and under the warranties issued by the Company as described on
SCHEDULE 5.30, the Company has no liability to any person under any warranty and
the Company does not offer or sell insurance or consumer protection plans or
other arrangements that could result in the Company being required to make any
payment to or perform any service for any person.

5.31 INTEREST IN CUSTOMERS AND SUPPLIERS AND RELATED PARTY TRANSACTIONS.
Except as described on SCHEDULE 5.31, no Stockholder, officer, director or
Affiliate of the Company (i) owns, directly or indirectly, any financial
interest in, or is a director, officer, employee or affiliate of, any
corporation, firm, association or business organization that is a client,
supplier, customer, lessor, lessee or competitor of the Company, or (ii) is or
will be a party to an agreement or relationship with the Company other than
through a customary "at will" employment relationship.

5.32 REGISTRATION STATEMENT. None of the information supplied or to be
supplied by the Company in writing specifically for inclusion in the
Registration Statement contained or, as of the Closing Date, will contain any
untrue statement of a material fact concerning the Company or the Stockholders
or omitted or will omit to state any material fact required to be stated therein
or necessary in order to make the statements contained in such information
supplied or to be supplied

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<PAGE>
by the Company concerning the Company or the Stockholders, in light of the
circumstances under which they are made, not misleading. The Company shall have
the right to review the Registration Statement and to review and approve in
advance any statements made specifically about the Company or the Stockholders
in the Registration Statement.

(B) REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.

Each Stockholder severally represents and warrants that the
representations and warranties set forth below are true as of the date of this
Agreement and, subject to Section 7.7 hereof, shall be true at the time of
Closing and on the Consummation Date, and that the representations and
warranties set forth in Section 5(B) shall survive the Consummation Date.

5.33 AUTHORITY; OWNERSHIP. Such Stockholder has the full legal right,
power and authority to enter into this Agreement, and this Agreement is a legal,
valid and binding obligation of such Stockholder, enforceable against the
Stockholder in accordance with its terms. Such Stockholder owns beneficially and
of record all of the shares of the Company Stock identified on Annex I hereto as
being owned by such Stockholder, and, such Company Stock is owned free and clear
of all liens, encumbrances and claims of every kind.

5.34 PREEMPTIVE RIGHTS. Such Stockholder does not have, or hereby waives,
any preemptive or other right to acquire shares of Company Stock or INCOM Stock
that such Stockholder has or may have had. Nothing herein, however, shall limit
or restrict the rights of any Stockholder to acquire INCOM Stock pursuant to (i)
this Agreement, (ii) any option granted or to be granted by INCOM, (iii) a
purchase through a broker in a regular stock market transaction or (iv) a
purchase from a stockholder of a Founding Company (subject to compliance with
any contractual restrictions or securities law restrictions applicable thereto
specified in Section 15 hereof).

5.35 NO COMMITMENT TO DISPOSE OF INCOM STOCK. No Stockholder is under any
binding commitment or contract to sell, exchange or otherwise dispose of shares
of INCOM Stock
received as described in Section 3.1.

6. REPRESENTATIONS OF INCOM

Except as otherwise qualified below, INCOM represents and warrants that
all of the following representations and warranties in this Section 6 are true
at the date of this Agreement and, subject to Section 7.7 hereof, shall be true
at the time of Closing and the Consummation Date, and that such representations
and warranties shall survive the Consummation Date for a period of eighteen
months (the last day of such period being the "Expiration Date"), except that
(i) solely for purposes of determining whether a claim for indemnification under
Section 11.2(iii) hereof has been made on a timely basis, and solely to the
extent that in connection with the IPO, any of the Stockholders actually incurs
liability under the 1933 Act, the 1934 Act, or any other Federal or state
securities laws, the representations and warranties set forth herein shall
survive until the expiration of any applicable limitations period, which shall
be deemed to be the Expiration Date for such

23
<PAGE>
purposes and (ii) the warranties and representations set forth in Sections 6.3,
6.11 and 6.15 shall survive until such time as the applicable statute of
limitations period has run, which shall be deemed to be the Expiration Date for
Sections 6.3, 6.11 and 6.15.

INCOM acknowledges that in purchasing the shares of Company Stock, it is
relying upon its own independent investigation as well as the representations
and warranties of the Company and the Stockholders as set forth in this
Agreement.

6.1 DUE ORGANIZATION. INCOM is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite power and authority to carry on its business as
it is now being conducted and as contemplated by the Registration Statement.
INCOM is duly qualified or authorized to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or authorization necessary,
except where the failure to be so qualified or authorized to do business would
not have a Material Adverse Effect. True, complete and correct copies of the
Certificate of Incorporation and By-laws, each as proposed to be amended and as
such documents shall be in effect as of the Closing Date, of INCOM (the "INCOM
Charter Documents") are attached hereto in Annex II.

6.2 AUTHORIZATION. (i) The officers of INCOM executing this Agreement have
the authority to enter into and bind INCOM to the terms of this Agreement and
(ii) INCOM has the full legal right, power and authority to enter into this
Agreement and consummate the transactions contemplated hereby. All corporate
acts and other proceedings required to have been taken by INCOM to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly and properly taken. A copy
of the resolutions adopted by the Board of Directors of INCOM, which approve
this Agreement and the transactions contemplated hereby in all respects,
certified by the Secretary or an Assistant Secretary of the Company as being in
full force and effect on the date hereof, is attached hereto in Annex II.

6.3 CAPITAL STOCK OF INCOM. The authorized capital stock of INCOM is as
set forth in Section 1.3(ii). Immediately prior to the Closing Date and the
Consummation Date, all of the issued and outstanding shares of the capital stock
of INCOM will be as set forth in the Registration Statement, free and clear of
all liens, security interests, pledges, charges, voting trusts, restrictions,
encumbrances and claims of every kind other than any restrictions described in
the Draft Registration Statement. All of the issued and outstanding shares of
the capital stock of INCOM have been duly authorized and validly issued, are
fully paid and nonassessable and such shares were offered, issued, sold and
delivered by INCOM in compliance with all applicable state and Federal laws
concerning the issuance of securities. Further, none of such shares were issued
in violation of the preemptive rights of any past or present stockholder of
INCOM. Upon the Consummation Date, the authorized, issued and outstanding shares
of capital stock of INCOM will be as set forth in the Registration Statement
under the caption "Capitalization," and the aggregate number of shares of INCOM
Stock issued and outstanding on the Consummation Date that are owned by persons
and

24
<PAGE>
entities other than (i) the Stockholders of the Company, (ii) the stockholders
of the Other Founding Companies and (iii) the persons or entities who purchased
shares of INCOM Stock pursuant to the IPO (such persons and entities referred to
in clauses (i) through (iii) referred to herein as the "Founding Company and
Public Stockholders") will not be greater than the number of shares of INCOM
Stock reflected in the Draft Registration Statement as the aggregate number of
shares of INCOM Stock to be issued and outstanding and owned by persons and
entities other than the Founding Company and Public Stockholders.

6.4 TRANSACTIONS IN CAPITAL STOCK; ORGANIZATION ACCOUNTING. Except for the
Other Agreements and except as set forth in the Draft Registration Statement,
(i) no option, warrant, call, conversion right or commitment of any kind exists
which obligates INCOM to issue any of its authorized but unissued capital stock;
and (ii) INCOM has no obligation (contingent or otherwise) to purchase, redeem
or otherwise acquire any of its equity securities or any interests therein or to
pay any dividend or make any distribution in respect thereof. The outstanding
options, warrants or other rights to acquire shares of the stock of INCOM will
be as described in the Draft Registration Statement.

6.5 SUBSIDIARIES. INCOM has no subsidiaries. INCOM does not presently own,
of record or beneficially, or control, directly or indirectly, any capital
stock, securities convertible into capital stock or any other equity interest in
any corporation, association or business entity, and INCOM is not, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.

6.6 FINANCIAL STATEMENTS. The financial statements of INCOM included in
the Draft Registration Statement (the "INCOM Financial Statements") have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods indicated (except as noted thereon), and the balance sheet included
therein presents fairly the financial position of INCOM as of its date.

6.7 LIABILITIES AND OBLIGATIONS. Except as set forth in the Draft
Registration Statement, INCOM has no material liabilities or obligations of any
kind, character or description, whether accrued, absolute, secured or unsecured,
contingent or otherwise, other than liabilities incurred in the ordinary course
of business and consistent with past practices, liabilities or obligations set
forth in or contemplated by this Agreement and the Other Agreements and except
for fees incurred in connection with the transactions contemplated hereby and
thereby.

6.8 CONFORMITY WITH LAW; LITIGATION. INCOM is not in violation of any law
or regulation or any order of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over it and its stockholders and, there are no claims,
actions, suits or proceedings, pending or, to the knowledge of INCOM, threatened
against or affecting, INCOM, at law or in equity, or before or by any Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality having jurisdiction over it and no notice of any
claim, action, suit or proceeding, whether pending or threatened, has been
received. INCOM has conducted and is conducting its businesses in

25
<PAGE>
compliance in all material respects with the requirements, standards, criteria
and conditions set forth in applicable Federal, state and local statutes,
ordinances, permits, licenses, orders, approvals, variances, rules and
regulations and is not in violation, in any material respect, of any of the
foregoing.

6.9 NO VIOLATIONS. (a) INCOM is not in violation of any INCOM Charter
Document. INCOM is not in default under any lease, instrument, agreement,
license, or permit to which INCOM is a party or by which INCOM or any of its
properties are bound (collectively, the "INCOM Documents").

(b) The execution and delivery of this Agreement by INCOM do not violate,
conflict with or result in a breach of any provision of, or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of INCOM under any of the terms, conditions
or provisions of (i) the INCOM Charter Documents, (ii) any statute, law,
ordinance, rule, regulation, judgment, decree, order, injunction, writ, permit
or license of any court or governmental authority applicable to INCOM or any of
its properties or assets, or (iii) any INCOM Document; provided that the
representations and warranties specified in clause (ii) of this sentence (A) are
based on information in the investor questionnaires and related purchaser
representative questionnaires executed and delivered by the Stockholders of the
Company and the stockholders of the Other Founding Companies, the
representations and warranties of the Stockholders set forth in Section 16
hereof and the representations and warranties of the stockholders of the Other
Founding Companies set forth in Section 16 of the Other Agreements and (B) are
subject to the accuracy and completeness of the information contained in such
investor questionnaires and related purchaser representative questionnaires and
the truthfulness of such representations and warranties. The consummation by
INCOM of the transactions contemplated hereby will not result in any material
violation, conflict, breach, right of termination or acceleration or creation of
liens under any of the terms, conditions or provisions of the items described in
clauses (i) through (iii) of the preceding sentence, subject, in the case of the
terms, conditions or provisions of the items described in clause (iii) above, to
obtaining (prior to the Effective Time) (x) such approvals, consents or orders
from the SEC, state blue sky authorities and authorities administering the
Hart-Scott Act and (y) such other consents as may be required from commercial
lenders, lessors or other third parties which are listed on SCHEDULE 6.9.

(c) Except for (i) the filings with the SEC pursuant to the 1933 Act in
connection with the IPO and the purchase and sale of the Company Stock, (ii) the
declaration of the effectiveness thereof by the SEC and filings with various
state blue sky authorities, and (iii) any filings required under the Hart-Scott
Act in connection with the purchase and sale of the Company Stock or the capital
stock of the Other Founding Companies, none of the INCOM Documents requires
notice to, or the consent or approval of, any governmental agency or other third
party with respect to the consummation by INCOM of any of the transactions
contemplated hereby in order to remain in full force and effect, and
consummation by INCOM of the transactions contemplated hereby will not

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give rise to any right to termination, cancellation or acceleration or loss of
any material right or benefit; provided that the representations and warranties
specified in clauses (i) and (ii) in this sentence (A) are based on information
in the investor questionnaires and related purchaser representative
questionnaires executed and delivered by the Stockholders of the Company and the
stockholders of the Other Founding Companies, the representations and warranties
of the Stockholders set forth in Section 16 hereof and the representations and
warranties of the stockholders of the Other Founding Companies set forth in
Section 16 of the Other Agreements and (B) are subject to the accuracy and
completeness of the information contained in such investor questionnaires and
related purchaser representative questionnaires and the truthfulness of such
representations and warranties.

(d) Except for (i) the filings with the SEC pursuant to the 1933 Act in
connection with the IPO and the purchase and sale of the Company Stock, (ii) the
declaration of the effectiveness thereof by the SEC and filings with various
state blue sky authorities, and (iii) any filings required under the Hart-Scott
Act in connection with the purchase and sale of the Company Stock or the capital
stock of the Other Founding Companies, no declaration, filing or registration
with, or notice to, or authorization, consent or approval of, any governmental
or regulatory body or authority is necessary for the execution and delivery of
this Agreement by INCOM or the consummation by INCOM of the transactions
contemplated hereby; provided that the representations and warranties specified
in clauses (i) and (ii) in this sentence (A) are based on information in the
investor questionnaires and related purchaser representative questionnaires
executed and delivered by the Stockholders of the Company and the stockholders
of the Other Founding Companies, the representations and warranties of the
Stockholders set forth in Section 16 hereof and the representations and
warranties of the stockholders of the Other Founding Companies set forth in
Section 16 of the Other Agreements and (B) are subject to the accuracy and
completeness of the information contained in such investor questionnaires and
related purchaser representative questionnaires and the truthfulness of such
representations and warranties.

6.10 VALIDITY OF OBLIGATIONS. The execution and delivery of this Agreement
by INCOM and the performance of the transactions contemplated herein have been
duly and validly authorized by the Board of Directors of INCOM and this
Agreement has been duly and validly authorized by all necessary corporate action
and is a legal, valid and binding obligation of INCOM, enforceable against INCOM
in accordance with its terms.

6.11 INCOM STOCK. At the time of issuance thereof and delivery to the
Stockholders, the INCOM Stock to be delivered to the Stockholders pursuant to
this Agreement will constitute valid, duly authorized and legally issued shares
of INCOM, fully paid and nonassessable, and with the exception of restrictions
upon resale set forth in Sections 15 and 16 hereof, will be identical in all
substantive respects (which do not include the form of certificate upon which it
is printed or the presence or absence of a CUSIP number on any such certificate)
to the INCOM Stock issued and outstanding as of the date hereof, other than the
Restricted Common Stock. The INCOM Stock issued and delivered to the
Stockholders shall at the time of such issuance and delivery be free and clear
of any liens, claims or encumbrances of any kind or character. The offer and
sale of the shares

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<PAGE>
of INCOM Stock to be issued to the Stockholders pursuant to this Agreement are
not required to be registered under the 1933 Act; provided that the
representations and warranties specified in this sentence (A) are based on
information in the investor questionnaires and related purchaser representative
questionnaires executed and delivered by the Stockholders of the Company and the
stockholders of the Other Founding Companies, the representations and warranties
of the Stockholders set forth in Section 16 hereof and the representations and
warranties of the stockholders of the Other Founding Companies set forth in
Section 16 of the Other Agreements and (B) are subject to the accuracy and
completeness of the information contained in such investor questionnaires and
related purchaser representative questionnaires and the truthfulness of such
representations and warranties.

6.12 NO SIDE AGREEMENTS. INCOM has not entered and will not enter into any
agreement with any of the Founding Companies or any of the Stockholders of the
Founding Companies other than the Other Agreements and the agreements referred
to in the Other Agreements or the Draft Registration Statement. INCOM has not
entered into any agreements providing for rights to register shares of INCOM
Stock under the 1933 Act except as provided in Section 17 of this Agreement, in
Section 17 of the Other Agreements and the Exhibits to the Registration
Statement.

6.13 BUSINESS; REAL PROPERTY; MATERIAL AGREEMENTS. INCOM was formed in
March 1998 and has conducted only limited operations since that time. INCOM has
conducted no material business since the date of its inception, except in
connection with this Agreement, the Other Agreements and the IPO. Except as
described in the Draft Registration Statement, INCOM does not own and has not at
any time owned any real property or any material personal property and is not a
party to any other material agreement other than the Other Agreements and the
agreements referred to therein and to such agreements as will be filed as
Exhibits to the Registration Statement.

6.14 RELATIONS WITH GOVERNMENTS. INCOM has not given or offered anything
of value to any government official, political party or candidate for government
office nor has INCOM, any of its directors, officers or Affiliates has taken any
action which would cause INCOM to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any law of similar effect.

6.15 DISCLOSURE. The Draft Registration Statement delivered to the Company
and the Stockholders does not as of the date hereof contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing does not apply to
statements contained in or omitted from any of such documents made or omitted in
reliance upon, and in conformity with, information furnished to INCOM by the
Company or the Stockholders in writing specifically for inclusion in the
Registration Statement. The Registration Statement, when it becomes effective,
will not contain an 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; and each prospectus included therein, on the date of
filing thereof with the SEC and at the Closing Date and the Consummation Date,
will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under

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which they were made, not misleading; except that the foregoing shall not apply
to statements in or omissions from any such document in reliance upon, and in
conformity with, information furnished to INCOM by the Company or the
Stockholders in writing specifically for inclusion therein.

6.16 OTHER AGREEMENTS. The Other Agreements have been duly authorized,
executed and delivered by INCOM and constitute the legal, valid and binding
obligation of INCOM enforceable against INCOM in accordance with their
respective terms. The terms and conditions of the Other Agreements are identical
in all material respects to the terms and conditions in this Agreement.

6.17 REGISTRATION STATEMENT. The Draft Registration Statement complies,
and on the date of each filing of the Registration Statement with the SEC the
Registration Statement will comply, as to form in all material respects with the
requirements of the Form S-1 Registration Statement and applicable requirements
under Federal laws and regulations (except for the inclusion of all exhibits
required to be filed therewith with respect to the Draft Registration Statement
and the Registration Statement prior to its effective date), provided that the
foregoing does not apply to any information that the Company and the
Stockholders have furnished to INCOM in writing specifically for inclusion in
the Registration Statement.

7. COVENANTS PRIOR TO CLOSING

7.1 ACCESS AND COOPERATION; DUE DILIGENCE; TRANSFER OF REAL ESTATE.

(a) Between the date of this Agreement and the Consummation Date, the
Company will afford to the officers and authorized representatives of INCOM
reasonable access during normal business hours to all of the Company's sites,
properties, books and records and will furnish INCOM with such additional
financial and operating data and other information as to the business and
properties of the Company as INCOM may from time to time reasonably request. The
Company will cooperate with INCOM, its representatives, auditors and counsel in
the preparation of any documents or other material which may be required in
connection with any documents or materials required by this Agreement. INCOM,
the Stockholders and the Company will treat all information obtained in
connection with the negotiation and performance of this Agreement or the due
diligence investigations conducted with respect to the Company as confidential
in accordance with the provisions of Section 14 hereof.

(b) Between the date of this Agreement and the Consummation Date, INCOM
will afford to the officers and authorized representatives of the Company access
to all of INCOM's sites, properties, books and records and will furnish the
Company with such additional financial and operating data and other information
as to the business and properties of INCOM as the Company may from time to time
reasonably request. INCOM will deliver to the Company copies of the Registration
Statement and all amendments and supplements thereto (including all exhibits
thereto) promptly after such documents are transmitted to the SEC. INCOM will
cooperate with the Company, its representatives, auditors and counsel in the
preparation of any documents or other material which may be required in
connection with any documents or materials required by this

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<PAGE>
Agreement. The Company will cause all information obtained in connection with
the negotiation and performance of this Agreement to be treated as confidential
in accordance with the provisions of Section 14 hereof.

(c) Except as set forth on SCHEDULE 7.1, any real property owned by the
Company will be sold or distributed by the Company on terms mutually acceptable
to INCOM and the Company and leased back by the Company on terms no less
favorable to the Company than those available from an unaffiliated party and
otherwise reasonably acceptable to INCOM at or prior to the Closing Date.

7.2 CONDUCT OF BUSINESS PENDING CLOSING. Between the date of this
Agreement and the Consummation Date, the Company will, except as set forth on
SCHEDULE 7.2:

(i) carry on its respective businesses in the Ordinary Course of
Business and not introduce any material new method of management,
operation or accounting;

(ii) use all commercially reasonable efforts to maintain its
respective properties and facilities, including those held under leases,
in as good working order and condition as at present, ordinary wear and
tear, depreciation and insured losses excepted;

(iii) perform in all material respects all of its respective
obligations under all Material Documents relating to or affecting its
respective assets, properties or rights;

(iv) use its commercially reasonable efforts to keep in full force
and effect present insurance policies or other comparable insurance
coverage;

(v) use its commercially reasonable efforts to maintain and preserve
its business organization intact, retain its respective present key
employees and maintain its respective relationships with suppliers,
customers and others having business relations with the Company;

(vi) use its commercially reasonable efforts to maintain compliance
with all material permits, laws, rules and regulations, consent orders,
and all other orders of applicable courts, regulatory agencies and similar
governmental authorities;

(vii) maintain present debt and lease instruments in accordance with
their terms and not enter into new or amended debt or lease instruments
without the knowledge and consent of INCOM (which consent shall not be
unreasonably withheld), provided that debt and/or lease instruments may be
replaced without the consent of INCOM if such replacement instruments are
on terms at least as favorable to the Company as the instruments being
replaced;

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<PAGE>
(viii)maintain or reduce present salaries and commission levels for
all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past
practices; and

(ix) maintain the Company's working capital at a level equal to or
above the minimum level of working capital required to be maintained as
described in Annex I hereto.

7.3 PROHIBITED ACTIVITIES. Except as disclosed on SCHEDULE 7.3, between
the date hereof and the Consummation Date, the Company will not, without prior
written consent of INCOM:

(i) make any change in its Charter Documents;

(ii) issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind other than in
connection with the exercise of options or warrants listed in SCHEDULE
5.4;

(iii) except as permitted pursuant to the terms and conditions for
distributions described in Annex I, declare or pay any dividend, or make
any distribution in respect of its stock whether now or hereafter
outstanding, or purchase, redeem or otherwise acquire or retire for value
any shares of its stock;

(iv) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures, except if it is in
the Ordinary Course of Business or involves an amount not in excess of
three percent (3%) of the Company's gross revenues for fiscal 1997;

(v) create or assume any mortgage, pledge or other lien or
encumbrance upon any assets or properties whether now owned or hereafter
acquired, except (1) with respect to purchase money liens incurred in
connection with the acquisition of equipment with an aggregate cost not in
excess of three percent (3%) of the Company's gross revenues for fiscal
1997 necessary or desirable for the conduct of the businesses of the
Company, (2) (A) liens for taxes either not yet due or being contested in
good faith and by appropriate proceedings (and for which contested taxes
adequate reserves have been established and are being maintained) or (B)
materialmen's, mechanics', workers', repairmen's, employees' or other like
liens arising in the Ordinary Course of Business (the liens set forth in
clause (2) being referred to herein as "Statutory Liens"), or (3) liens
set forth on SCHEDULE 5.10 and/or SCHEDULE 5.15 hereto;

(vi) sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the Ordinary Course of Business and other
than distributions of real estate and other assets as permitted in this
Agreement (including Annex I and the Schedules hereto);

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<PAGE>
(vii) negotiate for the acquisition of any business or the start-up
of any new business;

(viii)merge or consolidate or agree to merge or consolidate with
or into any other
corporation;

(ix) waive any material rights or claims of the Company, provided
that the Company may negotiate and adjust bills and accounts in the course
of good faith disputes with customers in a manner consistent with past
practice;

(x) amend, other than in the Ordinary Course of Business, or
terminate any Material Document; or

(xi) enter into any other material transaction outside the Ordinary
Course of Business or any transaction prohibited hereunder.

7.4 NO SHOP. None of the Stockholders, the Company, nor any agent,
officer, director, trustee or any representative of any of the foregoing will,
during the period commencing on the date of this Agreement and ending with the
earlier to occur of the Consummation Date or the termination of this Agreement
in accordance with its terms, directly or indirectly:

(i) solicit or initiate the submission of proposals or offers
from any person for,

(ii) participate in any discussions pertaining to, or

(iii) furnish any information to any person other than INCOM or its
authorized agents relating to, any acquisition or purchase of all or a
material amount of the assets of, or any equity interest in, the Company
or a merger, consolidation or business combination of the Company.

7.5 AGREEMENTS. Except as disclosed on SCHEDULE 7.5, the Stockholders and
the Company shall terminate (i) any stockholders agreements, voting agreements,
voting trusts, agreements providing for the grant by the Company of any options,
or warrants, and any employment agreements between the Company and any employee
listed on SCHEDULE 8.11 hereto and (ii) except as otherwise provided in this
Agreement, any existing agreement between the Company and any Stockholder, on or
prior to the Consummation Date provided that nothing herein shall prohibit or
prevent the Company from paying (either prior to or on the Closing Date) notes
or other obligations from the Company to the Stockholders in accordance with the
terms thereof, which terms have been disclosed to INCOM. Such termination
agreements are listed on SCHEDULE 7.5 and copies thereof shall be attached
thereto.

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<PAGE>
7.6 NOTIFICATION OF CERTAIN MATTERS. The Stockholders and the Company
shall give prompt notice to INCOM upon obtaining knowledge of (i) the occurrence
or non-occurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty of the Company or the
Stockholders contained herein to be untrue or inaccurate in any material respect
at or prior to the Closing and (ii) any material failure of any Stockholder or
the Company to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder. INCOM shall give prompt
notice to the Company of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty of INCOM contained herein to be untrue or inaccurate
in any material respect at or prior to the Closing, (ii) any material failure of
INCOM to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; (iii) any termination of any Other
Agreement for any reason; and (iv) the issuance by the SEC or any state
securities regulatory authority of any issuance of or threatened issuance of any
stop order suspending the effectiveness of the Registration Statement, or of any
order suspending or preventing the use of any related prospectus or suspending
the qualification of any securities included in the Registration Statement for
sale in any jurisdiction. If, during the period of time during which a
prospectus is required to be delivered in connection with the IPO, the Company
or the Stockholders become aware of any fact or circumstance which would affect
the accuracy of a representation or warranty of the Company or Stockholders in
this Agreement in any material respect, the Company and the Stockholders shall
immediately give notice of such fact or circumstance to INCOM. However, subject
to the provisions of Section 7.7, such notification shall not relieve either the
Company or the Stockholders of their respective obligations under this
Agreement. The delivery of any notice pursuant to this Section 7.6 shall not be
deemed to (i) modify the representations or warranties hereunder of the party
delivering such notice, which modification may only be made pursuant to Section
7.7, (ii) modify the conditions set forth in Sections 8 and 9, or (iii) limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.

7.7 AMENDMENT OF SCHEDULES. Each party hereto agrees that, with respect to
the representations and warranties of such party contained in this Agreement,
such party shall have the continuing obligation until 24 hours prior to the
anticipated effectiveness of the Registration Statement under the 1933 Act to
notify INCOM with respect to any matter hereafter arising or discovered which,
if existing or known at the date of this Agreement, would have been required to
be set forth or described in the Schedules or which may have been omitted from
the Schedules previously provided by such party; provided however, that notice
of any matter that would have been required to be set forth or described in any
of SCHEDULE 5.10, SCHEDULE 5.11, SCHEDULE 5.14 and SCHEDULE 5.15 shall only be
required to be given at the Closing Date, unless such matter reflects an event
occurring other than in the Ordinary Course of Business. Notwithstanding the
foregoing sentence, no amendment or supplement to a Schedule prepared by the
Company may be made unless INCOM consents to such amendment or supplement; and
provided further, that no amendment or supplement to a Schedule prepared by
INCOM may be made unless the Stockholders consent to such amendment or
supplement. For all purposes of this Agreement, including without limitation for
purposes of determining whether the conditions set forth in Sections 8.1 and 9.1
have been fulfilled, the Schedules hereto, as amended or supplemented with the
consent of INCOM or the Stockholders,

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<PAGE>
as the case may be, as provided above, shall be deemed to be the Schedules to
this Agreement. No amendment of or supplement to a Schedule shall be made later
than 24 hours prior to the anticipated effectiveness of the Registration
Statement. INCOM shall provide the Company at least 48 hours advance written
notice of the anticipated effectiveness of the Registration Statement under the
1933 Act.

7.8 COOPERATION IN PREPARATION OF REGISTRATION STATEMENT. The Company and
the Stockholders shall furnish or cause to be furnished to INCOM and the
Underwriters all of the information concerning the Company and the Stockholders
requested by INCOM or the Underwriters for inclusion in, and will cooperate with
INCOM and the Underwriters in the preparation of, the Registration Statement and
the prospectus included therein (including audited and unaudited financial
statements, prepared in accordance with GAAP, in form suitable for inclusion in
the Registration Statement). INCOM shall pay the fees and expenses of Arthur
Andersen LLP related to the audit of the Company's financial statements and the
rendering of any "comfort letter" related to the IPO. The parties hereto agree
that the disclosure of information with respect to the Company and its
Stockholders in the Registration Statement and while marketing the securities of
INCOM in the IPO shall not be a violation of any confidentiality agreement,
including Section 14 of this Agreement, among the parties hereto or their
officers or stockholders. The Company and the Stockholders agree promptly to
advise INCOM if, at any time during the period in which a prospectus relating to
the IPO is required to be delivered under the 1933 Act, they discover that any
information contained in the prospectus concerning the Company or the
Stockholders becomes incorrect or incomplete in any material respect, and to
provide the information needed to correct such inaccuracy.

7.9 FINAL FINANCIAL STATEMENTS. The Company shall provide at least 10 days
prior to the Closing Date the unaudited consolidated balance sheets of the
Company as of the end of each fiscal quarter following the Balance Sheet Date
that ends at least 35 days prior to the Closing Date, and the unaudited
consolidated statement of income, cash flows and retained earnings of the
Company for each fiscal quarter ended after the Balance Sheet Date provided that
such quarter ends at least 35 days prior to the Closing Date, disclosing no
Material Adverse Change in the Company or change which would cause a Material
Adverse Effect with respect to the Company, except for the transactions
permitted pursuant to the terms and conditions for distributions described in
Annex I. Such financial statements shall have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated (except for
normal recurring year-end audit adjustments, the absence of certain footnote
disclosures and otherwise as noted therein). Except as noted in such financial
statements, all of such financial statements will present fairly the results of
operations of the Company for the periods indicated therein.

7.10 FURTHER ASSURANCES. The parties hereto agree to execute and deliver,
or cause to be executed and delivered, such further instruments or documents or
take such other action as may be reasonably necessary or appropriate to carry
out the transactions contemplated hereby and to cause the conditions to the
Closing Date and the Consummation Date to be satisfied as promptly as
practicable.

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7.11 AUTHORIZED CAPITAL. Prior to the Consummation Date, INCOM shall
maintain its authorized capital stock as set forth in the Draft Registration
Statement except for stock splits, such changes in authorized capital stock as
are made to respond to comments made by the SEC or requirements of any exchange
or automated trading system for which application is made to register the INCOM
Stock and any changes necessary or advisable in order to permit the delivery of
the opinion contemplated by Section 8.12 hereof.

7.12 COMPLIANCE WITH THE HART-SCOTT ACT. All parties to this Agreement
hereby recognize that one or more filings under the Hart-Scott Act may be
required in connection with the transactions contemplated herein. If it is
determined by the parties to this Agreement that filings under the Hart-Scott
Act are required, then: (i) each of the parties hereto agrees to cooperate and
use its best efforts to comply with the Hart-Scott Act, (ii) such compliance by
the Stockholders and the Company shall be deemed a condition precedent in
addition to the conditions precedent set forth in Section 9 of this Agreement,
and such compliance by INCOM shall be deemed a condition precedent in addition
to the conditions precedent set forth in Section 8 of this Agreement, and (iii)
the parties agree to cooperate and use their best efforts to cause all filings
required under the Hart-Scott Act to be made. If filings under the Hart-Scott
Act are required, the costs and expenses thereof (including filing fees) shall
be borne by INCOM. The obligation of each party to consummate the transactions
contemplated by this Agreement is subject to the expiration or termination of
the waiting period under the Hart-Scott Act, if applicable.

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDERS AND
COMPANY

The obligations of the Stockholders and the Company with respect to
actions to be taken on the Closing Date are subject to the satisfaction or
waiver on or prior to the Closing Date of all of the following conditions,
except Section 8.9. The obligations of the Stockholders and the Company with
respect to actions to be taken on the Consummation Date are subject to the
satisfaction or waiver on or prior to the Consummation Date of the condition set
forth in Sections 8.1, 8.4 and 8.9. As of the Closing Date or as of the
Consummation Date, if any such applicable conditions have not been satisfied,
any one or more of the Stockholders who would be entitled to receive a majority
of the shares of INCOM Stock specified in Annex I to this Agreement if the
transactions contemplated hereby were consummated shall have the right to waive
any condition not so satisfied. Any act or action of the Stockholders in
consummating the Closing or delivering the certificates representing Company
Stock as of the Consummation Date shall constitute a waiver of any conditions
not so satisfied. However, no such waiver shall be deemed to affect the survival
of the representations and warranties of INCOM contained in Section 6 hereof.

8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of INCOM contained in Section 6 shall be true and
correct in all material respects as of the Closing Date and the Consummation
Date as though such representations and warranties had been made as of that
time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by INCOM on or before the Closing Date and the

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<PAGE>
Consummation Date shall have been duly complied with and performed in all
material respects; and certificates to the foregoing effect dated the Closing
Date and the Consummation Date, respectively, and signed by the President or any
Vice President of INCOM shall have been delivered to the Stockholders.

8.2 SATISFACTION. All actions, proceedings, instruments and documents that
are not within the control of the Company or the Stockholders and that are
required to carry out this Agreement or incidental hereto shall be reasonably
satisfactory to the Company and its counsel. The Stockholders and the Company
shall be satisfied based on information then known to them that the Registration
Statement and the prospectus forming a part thereof, including any amendments
thereof or supplements thereto, shall not as they relate to the Company or the
Stockholders contain any untrue statement of a material fact, or omit to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that the condition contained in this
sentence shall be deemed satisfied if the Company or Stockholders shall have
failed to inform INCOM in writing prior to the effectiveness of the Registration
Statement of the existence of an untrue statement of a material fact or the
omission of such a statement of a material fact.

8.3 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock or the IPO.

8.4 OPINION OF COUNSEL. The Company shall have received opinions from
counsel for INCOM, dated the Closing Date and the Consummation Date, in the form
annexed hereto as Annex III.

8.5 REGISTRATION STATEMENT; MINIMUM VALUE. The Registration Statement
shall have been declared effective by the SEC and not subject to any stop order
proceedings and the underwriters named therein shall have agreed to acquire on a
firm commitment basis, subject to the conditions set forth in the underwriting
agreement or agreements, on terms such that the aggregate value of the cash and
the number of shares of INCOM Stock to be received by the Stockholders is not
less than the Minimum Value set forth on Annex I.

8.6 CONSENTS AND APPROVALS. All necessary consents of and filings with any
governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on SCHEDULE 6.9 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock and no governmental
agency or body shall have taken any other action or made any request of Company
as a result of which Company deems it inadvisable to proceed with the
transactions hereunder.

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8.7 GOOD STANDING CERTIFICATES. INCOM shall have delivered to the Company
a certificate, dated as of a date no later than ten days prior to the Closing
Date, duly issued by the Delaware Secretary of State and in each state in which
INCOM is authorized to do business, showing that INCOM is in good standing and
authorized to do business and that all state franchise and/or income tax returns
and taxes for INCOM for all periods prior to the Closing have been filed and
paid.

8.8 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred which would constitute a Material Adverse Change with respect to INCOM
from the date of the Draft Registration Statement, and no change in the
disclosures in the Draft Registration Statement shall have been made in the
Registration Statement which reflects a Material Adverse Effect with respect to
INCOM.

8.9 CLOSING OF IPO. The closing of the sale of the INCOM Stock to the
Underwriters in the IPO shall have occurred simultaneously with the Consummation
Date hereunder.

8.10 SECRETARY'S CERTIFICATE. The Company shall have received a
certificate or certificates, dated the Closing Date and signed by the secretary
of INCOM, certifying the truth and correctness of attached copies of INCOM's
Certificate of Incorporation (including amendments thereto), By-Laws (including
amendments thereto), and resolutions of the board of directors and, if required,
the stockholders of INCOM approving INCOM's entering into this Agreement and the
consummation of the transactions contemplated hereby.

8.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on SCHEDULE 8.11
shall have entered into an employment agreement substantially in the form of
Annex V hereto.

8.12 TAX MATTERS. The Stockholders shall have received an opinion of
Arthur Andersen LLP, in substantially the form of Annex VI hereto, that the
INCOM Plan of Organization will qualify as a tax-free transfer of property under
Section 351 of the Code and that the Stockholders will not recognize gain to the
extent the Stockholders exchange Company Stock for INCOM Stock (but not cash or
other property) pursuant to this Agreement in connection with the INCOM Plan of
Organization.

8.13 OTHER FOUNDING COMPANIES. If the transactions contemplated by the
Other Agreements with any of the Founding Companies are not consummated for any
reason and as a result (i) INCOM is unable to list the INCOM Stock on the New
York Stock Exchange, subject to official notice of issuance, on or prior to the
Closing Date, or (ii) the combined revenue of the Founding Companies for which
the transactions contemplated by this Agreement and the Other Agreements are
consummated is not less than $170 million based on the most recently completed
fiscal years for such Founding Companies, the Company may terminate this
Agreement and all previously delivered stock certificates representing Company
Stock shall be returned to the Stockholders.

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8.14 COMPANY RELEASE OF STOCKHOLDERS. The Company shall have delivered to
the Stockholders an instrument dated the Closing Date, in form reasonably
satisfactory to INCOM and the Stockholders, which shall be effective only upon
the occurrence of the Consummation Date releasing the Stockholders from (i) any
and all claims of the Company against the Stockholders and (ii) obligations of
the Stockholders to the Company, except for (x) items specifically identified on
SCHEDULE 5.10 and SCHEDULE 5.15 as being claims of or obligations to the Company
and (y) continuing obligations to the Company relating to their employment by
the Company pursuant to any employment agreement entered into pursuant to
Section 8.11 hereof. In the event that the Consummation Date does not occur,
then the release instrument referenced herein shall be void and of no further
force or effect.

8.15 STERLING CITY CAPITAL TRANSFER RESTRICTIONS. Sterling City Capital,
LLC and each of its Affiliates which owns INCOM Stock shall have entered into an
agreement with INCOM containing substantially the same terms and conditions as
are contained in Section 15 and Section 17.

9. CONDITIONS PRECEDENT TO OBLIGATIONS OF INCOM

The obligations of INCOM with respect to actions to be taken on the
Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the following conditions, except Section 9.12. The
obligations of INCOM with respect to actions to be taken on the Consummation
Date are subject to the satisfaction or waiver on or prior to the Consummation
Date of the conditions set forth in Sections 9.1, 9.4, 9.7 and 9.12. As of the
Closing Date or, with respect to the conditions set forth in Sections 9.1, 9.4,
9.7 and 9.12, as of the Consummation Date, if any such conditions have not been
satisfied, INCOM shall have the right to terminate this Agreement, or waive any
such condition, but no such waiver shall be deemed to affect the survival of the
representations and warranties contained in Section 5 hereof.

9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE AND OBLIGATIONS. All the
representations and warranties of the Stockholders and the Company contained in
this Agreement shall be true and correct in all material respects as of the
Closing Date and the Consummation Date with the same effect as though such
representations and warranties had been made on and as of such date; all of the
terms, covenants and conditions of this Agreement to be complied with or
performed by the Stockholders and the Company on or before the Closing Date or
the Consummation Date, as the case may be, shall have been duly performed or
complied with in all material respects; and the Stockholders shall have
delivered to INCOM certificates dated the Closing Date and the Consummation
Date, respectively, and signed by them to such effect.

9.2 NO LITIGATION. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock or the IPO.

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9.3 SECRETARY'S CERTIFICATE. INCOM shall have received a certificate,
dated the Closing Date and signed by the secretary of the Company, certifying
the truth and correctness of attached copies of the Company's Certificate of
Incorporation (including amendments thereto), By-Laws (including amendments
thereto), and resolutions of the board of directors and the Stockholders
approving the Company's entering into this Agreement and the consummation of the
transactions contemplated hereby.

9.4 NO MATERIAL ADVERSE EFFECT. No event or circumstance shall have
occurred with respect to the Company which would constitute a Material Adverse
Effect, and the Company shall not have suffered any material loss or damages to
any of its properties or assets, whether or not covered by insurance, which loss
or damage materially affects or impairs the ability of the Company to conduct
its business.

9.5 STOCKHOLDERS' RELEASE. The Stockholders shall have delivered to INCOM
an instrument dated the Closing Date which shall be effective only upon the
occurrence of the Consummation Date releasing the Company and INCOM from (i) any
and all claims of the Stockholders against the Company and INCOM and (ii)
obligations of the Company and INCOM to the Stockholders, except for (A) items
specifically identified on SCHEDULE 5.31 as being claims of or obligations to
the Stockholders, (B) continuing obligations to Stockholders relating to their
employment by the Company, (C) obligations arising under this Agreement or the
transactions contemplated hereby and (D) claims of Stockholders against the
Company for unreimbursed business expenses incurred by the Stockholders on
behalf of the Company (other than expenses related to the transactions
contemplated by this Agreement) or unreimbursed medical expenses of the
Stockholders covered by the Company's existing health insurance coverage.
In the event that
the Consummation Date does not occur, then the release instrument referenced
herein shall be void and of no further force or effect.

9.6 TERMINATION OF RELATED PARTY AGREEMENTS. Except as set forth on
SCHEDULE 5.31, all existing agreements between the Company and the Stockholders
(and between the Company and entities controlled by the Stockholders) shall have
been canceled effective prior to or as of the Consummation Date.

9.7 OPINION OF COUNSEL. INCOM shall have received opinions from counsel to
the Company and the Stockholders, dated the Closing Date and the Consummation
Date, substantially
in the form annexed hereto as Annex IV.

9.8 CONSENTS AND APPROVALS. All necessary consents of and filings with any
governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all consents
and approvals of third parties listed on SCHEDULE 5.23 shall have been obtained;
and no action or proceeding shall have been instituted or threatened to restrain
or prohibit the purchase and sale of the Company Stock and no governmental
agency or body shall have taken any other action or made any request of INCOM as
a result of which INCOM deems it inadvisable to proceed with the transactions
hereunder.

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<PAGE>
9.9 GOOD STANDING CERTIFICATES. The Company shall have delivered to INCOM
a certificate, dated as of a date no earlier than ten days prior to the Closing
Date, duly issued by the appropriate governmental authority in the Company's
state of incorporation and, unless waived by INCOM, in each state in which the
Company is authorized to do business, showing the Company is in good standing
and authorized to do business and that all state franchise and/or income tax
returns and taxes for the Company for all periods prior to the Closing have been
filed and paid.

9.10 REGISTRATION STATEMENT. The Registration Statement shall have
been declared
effective by the SEC.

9.11 EMPLOYMENT AGREEMENTS. Each of the persons listed on SCHEDULE 8.11
shall enter into an employment agreement substantially in the form of Annex V
hereto.

9.12 CLOSING OF IPO. The closing of the sale of the INCOM Stock to the
Underwriters in the IPO shall have occurred simultaneously with the Consummation
Date
hereunder.

9.13 FIRPTA CERTIFICATE. Each Stockholder shall have delivered to INCOM a
certificate to the effect that he is not a foreign person pursuant to Section
1.1445-2(b) of the Treasury
regulations.

9.14 RESIGNATIONS OF DIRECTORS AND OFFICERS. Any directors of the Company,
other than those identified on SCHEDULE 2.1, shall have resigned as directors of
the Company. Any officers of the Company, other than those identified on
SCHEDULE 2.2, shall have resigned as officers of the Company.

10. COVENANTS OF INCOM AND THE STOCKHOLDERS AFTER CLOSING

10.1 RELEASE FROM GUARANTEES; REPAYMENT OF CERTAIN OBLIGATIONS. INCOM
shall use reasonable efforts to have the Stockholders released from any and all
guarantees of the Company's indebtedness, including bond obligations, identified
on SCHEDULE 10.1. Prior to obtaining the release of such guarantees, INCOM shall
provide its guarantee of such indebtedness to the lenders thereof. In the event
that INCOM cannot obtain such releases from the lenders of any such guaranteed
indebtedness identified on SCHEDULE 10.1 on or prior to 90 days subsequent to
the Consummation Date, INCOM shall promptly pay off or otherwise refinance or
retire such indebtedness such that the Stockholders' personal liability shall be
released. INCOM will indemnify the Stockholders against any loss or damage
suffered as a result of the personal guarantees.

10.2 PRESERVATION OF TAX AND ACCOUNTING TREATMENT. Except as contemplated
by this Agreement or the Registration Statement, after the Consummation Date,
INCOM shall not and shall not permit any of its Subsidiaries to undertake any
act that would jeopardize the tax-free status of the exchange of Company Stock
for INCOM Stock (but not cash or other property), including without limitation:

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(a) the retirement or reacquisition, directly or indirectly, of all
or part of the INCOM Stock issued in connection with the transactions
contemplated hereby; or

(b) the entering into of financial arrangements for the benefit of
the Stockholders other than as described in the Registration Statement or as
described in this
Agreement.

10.3 PREPARATION AND FILING OF TAX RETURNS.

(i) The Company, if possible, or otherwise the Stockholders shall
file or cause to be filed all income Tax Returns (federal, state, local or
otherwise) of any Acquired Party for all taxable periods that end on or
before the Consummation Date, and shall permit INCOM to review all such
Tax Returns prior to such filings. Unless the Company is a C corporation,
the Stockholders shall pay or cause to be paid all income Tax liabilities
(in excess of all amounts already paid with respect thereto or properly
accrued or reserved with respect thereto on the Company Financial
Statements) shown by such Returns to be due. [The preceding sentence will
be modified for Beta to insert the word "federal" before the words "Tax
Liabilities" due to the peculiarities of the Washington D.C. tax system
with respect to S corporations.]

(ii) INCOM shall file or cause to be filed all separate Returns of,
or that include, any Acquired Party for all taxable periods ending after
the Consummation Date.

(iii) Unless required by applicable law, regulations or government
proceedings, INCOM shall not take any action, including any amendment of a
Tax Return of any Acquired Party, if such action would result in
additional Tax liabilities payable by any of the Stockholders for periods
ending on or prior to the Consummation Date.

(iv) Each party hereto shall, and shall cause its subsidiaries and
Affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in
filing any Return, amended Return or claim for refund, determining a
liability for Taxes or a right to refund of Taxes or in conducting any
audit or other proceeding in respect of Taxes. Such cooperation and
information shall include providing copies of all relevant portions of
relevant Returns, together with relevant accompanying schedules and
relevant work papers, relevant documents relating to rulings or other
determinations by Taxing Authorities and relevant records concerning the
ownership and Tax basis of property, which such party may possess. Each
party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party
required to file Returns pursuant to this Agreement shall bear all costs
of filing such Returns.

(v) Each of the Company, INCOM and each Stockholder shall comply
with the tax reporting requirements of Section 1.351-3 of the Treasury
Regulations promulgated

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under the Code, and treat the transaction as a tax-free contribution under
Section 351(a) of the Code subject to gain, if any, recognized on the
receipt of cash or other property under
Section 351(b) of the Code.

10.4 DIRECTORS. The persons named in the Draft Registration Statement
shall be appointed as directors and elected as officers of INCOM, as and to the
extent set forth in the Draft Registration
Statement, promptly following the Consummation Date.

10.5 [DISTRIBUTIONS FROM INSURANCE COMPANY] [FOR SUTTER ONLY]. Following
the Consummation Date, the Company shall promptly pay to the Stockholders, on a
pro rata basis based on the aggregate consideration payable to each Stockholder
pursuant to this Agreement as specified in Annex I hereto, any proceeds received
by the Company from , a corporation (the "Insurance Company"), as distributions
in respect of the Company's equity interest in the Insurance Company.

11. INDEMNIFICATION

The Stockholders and INCOM each make the following covenants that are
applicable to them, respectively:

11.1 GENERAL INDEMNIFICATION BY THE STOCKHOLDERS. The Stockholders
covenant and agree that they, jointly and severally, will indemnify, defend,
protect and hold harmless INCOM and the Company at all times, from and after the
date of this Agreement until the Expiration Date (as defined in the introductory
paragraph to Section 5(A)), provided that for purposes of Section 11.1(iii)
below, the Expiration Date shall be the date on which the applicable statute of
limitations expires), from and against all claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred by INCOM or the Company as a result of or arising from
(i) any breach of the representations and warranties of the Stockholders or the
Company set forth herein or on the schedules attached hereto or certificates
delivered pursuant to this Agreement, (ii) any breach of any agreement on the
part of the Stockholders or the Company under this Agreement, (iii) [[for Sutter
Stock Purchase Agreement ONLY] the Company's obligations to make any payment to
(A) the Insurance Company, (B) any holder of an insurance policy issued by the
Insurance Company, (C) any party to an agreement between the Company and such
party pursuant to which the Company is obligated to make indemnity, contribution
or similar payments related to the Insurance Company, (D) any other owner of an
equity interest in the Insurance Company or (E) any lender to the Insurance
Company or (iv)] any liability under the 1933 Act, the 1934 Act or other Federal
or state securities law or regulation, at common law or otherwise, arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact relating solely to the Company or the Stockholders which was based upon
information provided to INCOM or its counsel in writing by the Company or the
Stockholders specifically for inclusion in the Registration Statement and is
contained in the Registration Statement or any prospectus forming a part
thereof, or any amendment thereof or supplement thereto, or arising out of or
based upon any omission or

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alleged omission to state therein a material fact relating to the Company or the
Stockholders required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that such indemnity shall not inure
to the benefit of INCOM or the Company to the extent that such untrue statement
(or alleged untrue statement) was made in, or omission (or alleged omission)
occurred in, any preliminary prospectus and the Stockholders provided, in
writing, corrected information to INCOM counsel and to INCOM for inclusion in
the final prospectus, and such information was not so included or properly
delivered, and provided further, that no Stockholder shall be liable for any
indemnification obligation pursuant to this Section 11.1 to the extent solely
attributable to a breach of any representation, warranty or agreement made
herein individually by any other Stockholder.

INCOM acknowledges and agrees that other than the representations and
warranties of the Company or the Stockholders specifically contained in this
Agreement, there are no representations or warranties of the Company or the
Stockholders, either express or implied, with respect to the transactions
contemplated by this Agreement, the Company or its assets, liabilities and
business.

INCOM further acknowledges and agrees that its sole and exclusive remedy
with respect to any and all claims relating to this Agreement and the
transactions contemplated in this Agreement, shall be pursuant to the
indemnification provisions set forth in this Section 11. INCOM hereby waives to
the fullest extent permitted under applicable law, any and all other rights,
claims and causes of action it or any indemnified person may have against the
Company or any Stockholder relating to this Agreement or the transactions
arising under or based upon any Federal, state, local or foreign statute, law,
rule, regulation or otherwise.

11.2 INDEMNIFICATION BY INCOM. INCOM covenants and agrees that it will
indemnify, defend, protect and hold harmless the Stockholders at all times from
and after the date of this Agreement until the Expiration Date (as defined in
the introductory paragraph of Section 6), from and against all claims, damages,
actions, suits, proceedings, demands, assessments, adjustments, costs and
expenses (including specifically, but without limitation, reasonable attorneys'
fees and expenses of investigation) incurred by the Stockholders as a result of
or arising from (i) any breach by INCOM of its representations and warranties
set forth herein or on the schedules attached hereto or certificates delivered
pursuant to this Agreement, (ii) any breach of any agreement on the part of
INCOM under this Agreement; or (iii) any liability under the 1933 Act, the 1934
Act or other Federal or state securities law or regulation, at common law or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except to the extent such is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission, made therein in reliance upon, and
in conformity with, the representations and warranties of the Company or the
Stockholders specifically contained in this Agreement or other information
furnished to INCOM by the Company or the Stockholders in writing specifically
for inclusion therein.

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<PAGE>
11.3 THIRD PERSON CLAIMS. Promptly after any party hereto (hereinafter the
"Indemnified Party") has received notice of or has knowledge of any claim by a
person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1 or 11.2 hereof
(hereinafter the "Indemnifying Party"), give the Indemnifying Party written
notice of such claim or the commencement of such action or proceeding. Such
notice shall state the nature and the basis of such claim and a reasonable
estimate of the amount thereof. The Indemnifying Party shall have the right to
defend and settle, at its own expense and by its own counsel reasonably
satisfactory to the Indemnified Party, any such matter so long as the
Indemnifying Party pursues the same in good faith and diligently, provided that
the Indemnifying Party shall not settle any criminal proceeding without the
written consent of the Indemnified Party. If the Indemnifying Party undertakes
to defend or settle, it shall promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in the defense thereof and in any settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records or information reasonably
requested by the Indemnifying Party that are in the Indemnified Party's
possession or control. All Indemnified Parties shall use the same counsel, which
shall be the counsel selected by Indemnifying Party, provided that if counsel to
the Indemnifying Party shall have a conflict of interest or a conflict of
interest is reasonably likely to arise that prevents counsel for the
Indemnifying Party from representing such Indemnified Party, Indemnified Party
shall have the right to participate in such matter through counsel of its own
choosing and Indemnifying Party will reimburse the Indemnified Party for the
reasonable expenses of its counsel. After the Indemnifying Party has notified
the Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability, except (i) as set forth in the
preceding sentence and (ii) to the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified Party shall be reimbursed by
the Indemnifying Party for reasonable additional legal expenses and
out-of-pocket expenses. If the Indemnifying Party desires to accept a final and
complete settlement of any such Third Person claim and the Indemnified Party
refuses to consent to such settlement, then the Indemnifying Party's liability
under this Section with respect to such Third Person claim shall be limited to
the amount so offered in settlement by said Third Person. Upon agreement as to
such settlement between said Third Person and the Indemnifying Party, the
Indemnifying Party shall, in exchange for a complete release from the
Indemnified Party, promptly pay to the Indemnified Party the amount agreed to in
such settlement. If the Indemnifying Party does not undertake to defend such
matter to which the Indemnified Party is entitled to indemnification hereunder,
or fails diligently to pursue such defense, the Indemnified Party may undertake
such defense through counsel of its choice, at the cost and expense of the
Indemnifying Party, and the Indemnified Party may settle such matter, and the
Indemnifying Party shall pay the Indemnified Party for the settlement amount and
any other liabilities or expenses incurred by the Indemnified Party in
connection therewith, provided, however, that under no circumstances shall the
Indemnified Party settle any Third Person claim without the written consent of
the Indemnifying

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Party, which consent shall not be unreasonably withheld or delayed. All
settlements hereunder shall effect a complete release of the Indemnified Party,
unless the Indemnified Party otherwise agrees in writing. With respect to any
account, note or other receivable as to which the Stockholders have paid in full
any indemnification obligation pursuant to this Section 11 as a result of a
breach of the representation and warranty made pursuant to Section 5.11 or as to
which a claim in respect thereof has been asserted pursuant to this Section 11
that has been applied against the Indemnification Threshold with respect to the
Stockholders as a result of a breach of the representation and warranty made
pursuant to Section 5.11, INCOM shall cause the Company to assign such account,
note or other receivable to the Stockholders. The parties hereto will make
appropriate adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.

11.4 EXCLUSIVE REMEDY. The indemnification provided for in this Section 11
shall (except as prohibited by ERISA) be the exclusive remedy in any action
seeking damages or any other form of monetary relief brought by any party to
this Agreement against another party to this Agreement with respect to any
provision of this Agreement, provided that, nothing herein shall be construed to
limit the right of a party, in a proper case, to seek injunctive relief for a
breach of this Agreement. Any indemnity payment under this Section 11 shall be
treated as an adjustment to the exchange consideration for Tax purposes unless a
final determination (which shall include the execution of a Form 870-AD or
successor form) with respect to the Indemnified Party or any of its Affiliate
causes any such payment not to be treated as an adjustment to the exchange
consideration for U.S. Federal income Tax purposes.

11.5 LIMITATIONS ON INDEMNIFICATION. (a) INCOM and the Company shall not
assert any claim for indemnification under this Section 11 against the
Stockholders until such time as, and solely to the extent that, the aggregate of
all claims which INCOM and the Company may have against the Stockholders shall
exceed the greater of (a) 3.0% of the sum of (i) the cash paid to the
Stockholders pursuant to Section 1.2 plus (ii) the value of the INCOM Stock
delivered to the Stockholders pursuant to Section 1.2 (calculated as provided in
this Section 11.5), or (b) $50,000 (the "Indemnification Threshold").
Stockholders shall not assert any claim for indemnification hereunder against
INCOM until such time as, and solely to the extent that, the aggregate of all
claims which Stockholders may have against INCOM shall exceed $50,000; provided,
however, that this sentence shall not be applicable with respect of any failure
by INCOM (i) to pay the purchase price specified in Annex I hereto on the
Consummation Date upon the satisfaction, or waiver by INCOM, of all conditions
to the occurrence of the Consummation Date specified in Section 9 or (ii) comply
with its obligations pursuant to Section 10.1. After the $50,000 threshold for
INCOM and the Company (subject to the proviso in the preceding sentence) or the
Indemnification Threshold for a Stockholder has been met, all claims must be
made in $10,000 increments, which claims may be cumulated in order to meet such
$10,000 thresholds. For purposes of this paragraph, the INCOM Stock delivered to
the Stockholders shall be valued at the initial public offering price to the
public as set forth in the Registration Statement.

(b) No person shall be entitled to indemnification under this Section 11
if and to the extent that such person's claim for indemnification is directly or
indirectly related to a breach by

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such person of any representation, warranty, covenant or other agreement set
forth in this Agreement. No claim for indemnification against the Stockholders
shall limit, diminish or change any obligation of INCOM pursuant to Section 10.1
hereof.

(c) Notwithstanding any other term of this Agreement, no Stockholder shall
be liable under this Section 11 for an amount which exceeds eighty-five percent
(85%) of the amount of proceeds received by such Stockholder (valued as of the
Consummation Date) in connection with the purchase and sale of the Company
Stock. For purposes of this paragraph, the INCOM Stock shall be valued at the
initial public offering price to the public as set forth in the Registration
Statement.

(d) A Stockholder may pay any indemnification obligation under Section 11
by means of the payment of cash or a combination of the payment of cash and the
delivery to INCOM of shares of INCOM Stock; provided that the percentage of the
indemnification obligation satisfied by means of the delivery of shares of INCOM
Stock does not exceed the percentage of INCOM Stock comprising the total
consideration paid to such Stockholder by INCOM to such Stockholder pursuant to
Annex I. For the purpose of crediting Stockholders for payments made to INCOM by
means of delivery of shares of INCOM Stock, the INCOM Stock shall be valued at
the initial public offering price to the public as set forth in the Registration
Statement.

(e) In determining the amount of any loss, liability or expense for which
any party is entitled to indemnification under this Agreement, the gross amount
thereof will be reduced by any correlative insurance proceeds or other third
party indemnity or reimbursement proceeds realized or to be realized by such
party (or, in the case of INCOM, by INCOM, the Company or any subsidiary of
INCOM or the Company) and such correlative insurance proceeds or other third
party indemnity or reimbursement proceeds shall be net of any insurance premium
or other incremental cost or expense owed or payable to any third party which
becomes due as a result of such claim. INCOM shall use commercially reasonable
efforts to pursue any available insurance coverage or other rights of indemnity
or reimbursement from third parties with respect to any such loss, liability or
expense.

12. TERMINATION OF AGREEMENT

12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Consummation Date solely:

(i) by mutual consent of INCOM and the Stockholders;

(ii) by the Stockholders, if the transactions contemplated by this
Agreement to take place at the Consummation Date shall not have been
consummated by December 31, 1998, unless the failure of such transactions
to be consummated is due to a breach of this Agreement by the Company or
the Stockholders prior to or on the Consummation Date;

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(iii) by INCOM, if the transactions contemplated by this Agreement
to take place at the Consummation Date shall not have been consummated by
December 31, 1998, unless the failure of such transactions to be
consummated is due to a breach of this Agreement by INCOM prior to or on
the Consummation Date;

(iv) by the Stockholders, if a material breach or default shall be
made by INCOM in the observance or in the due and timely performance of
any of the covenants or agreements contained herein relating to INCOM, and
the curing of such default shall not have been made (or in the reasonable
judgment of the Stockholders cannot be made) on or before the Consummation
Date;

(v) by INCOM, if a material breach or default shall be made by the
Company or the Stockholders in the observance or in the due and timely
performance of any of the covenants or agreements contained herein
relating to the Company or the Stockholders, and the curing of such
default shall not have been made (or in the reasonable judgment of INCOM
cannot be made) on or before the Consummation Date;

(vi) by the Stockholders, if the conditions set forth in Section 8
hereof have not been satisfied or waived as of the Closing Date or the
Consummation Date, as applicable;

(vii) by INCOM, if the conditions set forth in Section 9 hereof have
not been satisfied or waived as of the Closing Date or the Consummation
Date, as applicable; or

(viii)by either INCOM or the Stockholders if the Consummation
Date does not occur within ten (10) days after the Closing.

12.2 PROCEDURE AND EFFECT OF TERMINATION. A determination to terminate
this Agreement by INCOM pursuant to Section 12.1 shall be valid and effective
only if a written notice of termination, accompanied by a certified copy of
resolutions of the board of directors of INCOM that evidence the authorization
of the officer of INCOM to deliver a written notice of termination of this
Agreement pursuant to Section 12.1, is given to the Stockholders in the manner
specified for notices in this Agreement. A determination to terminate this
Agreement by the Stockholders pursuant to Section 12.1 shall be valid and
effective only if a written notice of termination, signed by Stockholders who
would be entitled to receive a majority of the shares of INCOM Stock specified
on Annex I to this Agreement if the transactions contemplated hereby were
consummated, is given to the Company in the manner specified for notices in this
Agreement. Upon the giving of notice of termination of this Agreement pursuant
to Section 12.1 as specified in the preceding sentence, this Agreement shall
terminate, and the transactions contemplated hereby shall be abandoned, without
further action by any of the parties hereto. Immediately upon any such
termination, INCOM shall deliver written notice of such termination to the Other
Founding Companies. Upon any termination of this Agreement after the Closing
Date, INCOM shall immediately deliver to the Stockholders all certificates
representing the Company Stock owned by them and delivered to INCOM at the
Closing, together with all accompanying stock powers or other instruments of
transfer, free and clear of all

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liens, encumbrances and claims of every kind. If this Agreement is terminated as
provided in this Section 12, no party hereto shall have any liability or further
obligation hereunder to any other party, except as provided in Section 14.3 and
Section 18.6, provided that the termination of this Agreement will in no way
limit any obligation or liability of any party based on or arising from a breach
or default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, but not limited
to, legal and audit costs and out of pocket expenses that occurred prior to such
termination.

13. NONCOMPETITION

13.1 PROHIBITED ACTIVITIES. The Stockholders will not, without the prior
written consent of INCOM, for a period of two (2) years following the
Consummation Date, for any reason whatsoever, directly or indirectly, for
themselves or on behalf of or in conjunction with any other person, persons,
company, partnership, corporation or business of whatever nature:

(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales
representative, whether paid or unpaid, in any roofing services business
or operation or related services business in direct competition with INCOM
or any of the subsidiaries thereof, within 100 miles of where the Company
or any of its subsidiaries conducted business within two (2) years prior
to the Consummation Date (the "Territory");

(ii) call upon any person who is, at the Consummation Date, within
the Territory, an employee of INCOM or any subsidiary thereof for the
purpose or with the intent of enticing such employee away from or out of
the employ of INCOM or any subsidiary thereof;

(iii) call upon any person or entity which is, at the Consummation
Date, or which has been within three (3) years prior to the Consummation
Date, a customer of INCOM or any subsidiary thereof, of the Company or of
any of the Other Founding Companies for the purpose of soliciting or
selling roofing or related services in direct competition with INCOM
within the Territory;

(iv) call upon any prospective acquisition candidate, on any
Stockholder's own behalf or on behalf of any competitor in the roofing
services business, which candidate, to the actual knowledge of such
Stockholder after due inquiry, was called upon by INCOM or any subsidiary
thereof or for which, to the actual knowledge of such Stockholder after
due inquiry, INCOM or any subsidiary thereof made an acquisition analysis,
for the purpose of acquiring such entity; or

(v) disclose to any person, firm, partnership, corporation or
business the names or identities of any person, firm, partnership,
corporation or business which has been a customer of the Company or any of
its subsidiaries within the two (2) years prior to the

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Consummation Date for any reason or purpose whatsoever except to the
extent that the Company has in the past disclosed such information to the
public for valid business reasons; or

(vi) testify as an expert witness in roofing matters for an adverse
party to INCOM, the Company or any Other Founding Companies in litigation.

Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit any Stockholder from acquiring as a passive investment (i) not more
than one percent (1%) of the capital stock of a competing business whose stock
is traded on a national securities exchange, the NASDAQ Stock Market or
over-the-counter, or (ii) not more than five percent (5%) of the capital stock
of a competing business whose stock is not publicly traded if the Board of
Directors of INCOM consents to such acquisition. In addition, the foregoing
covenant shall not be deemed to prohibit activities, directly or indirectly,
related to (i) owning, leasing, developing or selling real estate or (ii)
general construction activities unrelated to roofing and waterproofing
construction activities.

13.2 DAMAGES. Because of the difficulty of measuring economic losses to
INCOM as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to INCOM for which it
would have no other adequate remedy, each Stockholder agrees that the foregoing
covenant may be enforced by INCOM in the event of breach by such Stockholder, by
injunctions and restraining orders.

13.3 REASONABLE RESTRAINT. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the
Stockholders in light of the activities and business of INCOM and the
subsidiaries thereof on the date of the execution of this Agreement and the
current plans of INCOM as described in the Draft Registration Statement.

13.4 SEVERABILITY; REFORMATION. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be reformed.

13.5 INDEPENDENT COVENANT. All of the covenants in this Section 13 shall
be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action of any Stockholder
against INCOM or any subsidiary thereof, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by INCOM of such
covenants. It is specifically agreed that the period of two (2) years stated at
the beginning of this Section 13, during which the agreements and covenants of
each Stockholder made in this Section 13 shall be effective, shall be computed
by excluding from such computation any time during which such Stockholder is
found to be in violation of any provision of this Section 13 as determined by
any of (i) a written agreement to such effect executed and delivered by INCOM
and

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such Stockholder, (ii) a determination by an arbitration panel pursuant to an
arbitration conducted pursuant to Section 18.16 hereof or (iii) a non-appealable
judgment of a court of competent jurisdiction. The covenants contained in
Section 13 shall not be affected by any breach of any other provision hereof by
any party hereto. The covenants contained in Section 13 shall have no effect if
the transactions contemplated by this Agreement are not consummated.

13.6 MATERIALITY. The Company and the Stockholders hereby agree that the
covenants contained in this Section 13 are a material and substantial part of
this transaction.

14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION

14.1 STOCKHOLDERS. The Stockholders recognize and acknowledge that they
had in the past, currently have, and in the future may possibly have, access to
certain confidential information of the Company, the Other Founding Companies,
and/or INCOM, such as operational policies, customer lists, and pricing and cost
policies that are valuable, special and unique assets of the Company's, the
Other Founding Companies' and/or INCOM's respective businesses. The Stockholders
agree that they will not disclose such confidential information to any person,
firm, corporation, association or other entity for any purpose or reason
whatsoever, except (a) to authorized representatives of INCOM, (b) following the
Closing, such information may be disclosed by the Stockholders as is required in
the course of performing their duties for INCOM or the Company and (c) to
counsel and other advisers, provided that such advisers (other than counsel)
agree to the confidentiality provisions of this Section 14.1, unless (i) such
information becomes known to the public generally through no fault of the
Stockholders, (ii) disclosure is required by law or the order of any
governmental authority under color of law, provided, that prior to disclosing
any information pursuant to this clause (ii), the Stockholders shall, if
possible, give prior written notice thereof to INCOM and provide INCOM with the
opportunity to contest such disclosure, or (iii) the disclosing party reasonably
believes that such disclosure is required in connection with the defense of a
lawsuit against the disclosing party. In the event of a breach or threatened
breach by any of the Stockholders of the provisions of this Section, INCOM shall
be entitled to an injunction restraining such Stockholders from disclosing, in
whole or in part, such confidential information. Nothing herein shall be
construed as prohibiting INCOM from pursuing any other available remedy for such
breach or threatened breach, including the recovery of damages. In the event the
transactions contemplated by this Agreement are not consummated, Stockholders
shall have none of the above-mentioned restrictions on their ability to
disseminate confidential information with respect to the Company.

14.2 INCOM. INCOM recognizes and acknowledges that it had in the past and
currently has access to certain confidential information of the Company, such as
operational policies, customer lists, and pricing and cost policies that are
valuable, special and unique assets of the Company's business. INCOM agrees
that, prior to the Closing, or if the Transactions contemplated by this
Agreement are not consummated, it will not disclose such confidential
information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except (a) to authorized representatives of
the Company, (b) to counsel and other advisers, provided that such

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advisers (other than counsel) agree to the confidentiality provisions of this
Section 14.2, (c) to the Other Founding Companies and their representatives
pursuant to Section 7.1(a) and (d) to the public to the extent necessary or
advisable in connection with the filing of the Registration Statement and the
IPO and the securities laws applicable thereto and to the operation of INCOM as
a publicly held entity after the IPO, unless (i) such information becomes known
to the public generally through no fault of INCOM, (ii) disclosure is required
by law or the order of any governmental authority under color of law, provided,
that prior to disclosing any information pursuant to this clause (ii), INCOM
shall, if possible, give prior written notice thereof to the Company and the
Stockholders and provide the Company and the Stockholders with the opportunity
to contest such disclosure, or (iii) the disclosing party reasonably believes
that such disclosure is required in connection with the defense of a lawsuit
against the disclosing party. In the event of a breach or threatened breach by
INCOM of the provisions of this Section, the Company and the Stockholders shall
be entitled to an injunction restraining INCOM from disclosing, in whole or in
part, such confidential information. Nothing herein shall be construed as
prohibiting the Company and the Stockholders from pursuing any other available
remedy for such breach or threatened breach, including the recovery of damages.
In the event the transactions contemplated by this Agreement are not consummated
for any reason, INCOM shall nevertheless remain subject to this Section 14.2,
except that it shall not be permitted to make any disclosures otherwise than
pursuant to clause (i), (ii) or (iii) above.

14.3 DAMAGES. Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Section 14.1 and 14.2, and
because of the immediate and irreparable damage that would be caused for which
they would have no other adequate remedy, the parties hereto agree that, in the
event of a breach by any of them of the foregoing covenants, the covenant may be
enforced against the other parties by injunctions and restraining orders.

14.4 SURVIVAL. The obligations of the parties under this Section 14 shall
survive the termination of this Agreement for a period of five years from the
date of this Agreement.

14.5 RETURN OF INFORMATION. If the transactions contemplated by this
Agreement are not consummated, INCOM will return or destroy all confidential
information regarding the Company.

15. TRANSFER RESTRICTIONS

15.1 TRANSFER RESTRICTIONS. Unless otherwise agreed by INCOM, except for
transfers to (i) immediate family members who agree to be bound by the
restrictions set forth in this Section 15.1, (ii) trusts, limited partnerships
or other estate planning entities for the benefit of a Stockholder or family
members of a Stockholder, the trustees, partners or other persons having
authority to bind the trust, limited partnership or other estate planning entity
of which agree to be bound by such restrictions or (iii) any charitable
organization that qualifies for receipt of charitable contributions under
Section 170(c) of the Code and such organization agrees to be bound by such
restrictions, for a period of two years from the Closing Date, except pursuant
to Section 17 hereof, none of the Stockholders shall sell, assign, exchange,
transfer, pledge, or otherwise dispose of any shares of INCOM Stock received by
the Stockholders pursuant to this Agreement. During such two-

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year period, the certificates evidencing the INCOM Stock delivered to the
Stockholders pursuant to Section 3 of this Agreement will bear a legend
substantially in the form set forth below:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT THE WRITTEN CONSENT OF THE
ISSUER, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED
SALE, ASSIGNMENT, EXCHANGE, TRANSFER, PLEDGE OR OTHER DISPOSITION PRIOR TO [THE
SECOND ANNIVERSARY OF CLOSING DATE]. UPON THE WRITTEN REQUEST OF THE HOLDER OF
THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY
STOP ORDER PLACED WITH THE TRANSFER AGENT) AFTER THE DATE SPECIFIED ABOVE.

16. FEDERAL SECURITIES ACT REPRESENTATIONS

16.1 COMPLIANCE WITH LAW. Each Stockholder acknowledges that the shares of
INCOM Stock to be delivered to such Stockholder pursuant to this Agreement have
not been and will not be registered under the 1933 Act (except as provided in
Section 17 hereof) and therefore may not be sold, assigned, exchanged,
transferred, pledged or otherwise disposed of without compliance with the 1933
Act which, among other matters, would require registration under the 1933 Act
unless exemption from the registration requirements is available for such
transaction. The INCOM Stock to be acquired by each Stockholder pursuant to this
Agreement is being acquired solely for such Stockholder's own account, for
investment purposes only, and with no present intention of selling, assigning,
exchanging, transferring, pledging, or otherwise disposing of it. Each
Stockholder covenants, warrants and represents that none of the shares of INCOM
Stock issued to such Stockholder will be offered, sold, assigned, exchanged,
pledged, transferred or otherwise disposed of except after full compliance with
all of the applicable provisions of the 1933 Act and the rules and regulations
of the SEC. All the INCOM Stock shall bear the following legend in addition to
the legend required under Section 15 of this Agreement:

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IF THE HOLDER
HEREOF COMPLIES WITH THE ACT AND APPLICABLE SECURITIES LAWS.

16.2 ECONOMIC RISK; SOPHISTICATION. Each Stockholder is able to bear the
economic risk of an investment in the INCOM Stock to be acquired pursuant to
this Agreement and can afford to sustain a total loss of such investment. Each
Stockholder has substantial knowledge and experience in making investment
decisions of this type (or is relying on qualified purchaser representatives
with such knowledge and experience in making this decision), and is capable,
either individually or with such purchaser representatives, of evaluating the
merits and risks of this investment. Each Stockholder has had an adequate
opportunity to ask questions and receive answers from the officers of INCOM
concerning any and all matters relating to the transactions described herein
including,

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without limitation, the background and experience of the current and proposed
officers and directors of INCOM, the plans for the operations of the business of
INCOM, the business, operations and financial condition of the Founding
Companies other than the Company, and any plans for additional acquisitions.
Each Stockholder has asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to such Stockholder's
satisfaction. Except as set forth on SCHEDULE 16.2, each Stockholder is an
"accredited investor" as defined in Rule 501(a) of the 1933 Act. Neither the
foregoing nor any investigation made by the Stockholders referred to therein
shall in any way affect the representations, warranties, covenants and
agreements of INCOM made herein.

17. REGISTRATION RIGHTS

17.1 PIGGYBACK REGISTRATION RIGHTS. At any time following the Consummation
Date, whenever INCOM proposes to register any INCOM Stock for its own or others
account under the 1933 Act for a public offering, other than (i) any shelf or
other registration of shares to be used as consideration for acquisitions of
additional businesses by INCOM and (ii) registrations relating to employee
benefit plans, INCOM shall give each of the Stockholders prompt written notice
of its intent to do so. Upon the written request of any of the Stockholders
given within 10 days after receipt of such notice, INCOM shall cause to be
included in such registration all of the INCOM Stock issued to such Stockholders
pursuant to this Agreement (including any stock issued as or issuable upon the
conversion or exchange of any convertible security, warrant, right or other
security which is issued by INCOM as a stock split, dividend or other
distribution with respect to, or in exchange for, or in replacement of such
INCOM Stock) which any such Stockholder requests, other than shares of INCOM
Stock which may then be immediately sold under Rule 144(k) (or any similar or
successor provision) promulgated under the 1933 Act, and other than shares of
INCOM Stock that have been theretofore sold by the Stockholder in accordance
with the 1933 Act, provided that INCOM shall have the right to reduce pro rata
the number of shares of each selling Stockholder included in such registration
to the extent that inclusion of such shares could, in the written opinion of tax
counsel to INCOM or its independent auditors, jeopardize the status of the
transactions contemplated hereby and by the Registration Statement as a tax-free
organization under Section 351 of the Code. In addition, if INCOM is advised in
writing in good faith by any managing underwriter of an underwritten offering of
the securities being offered pursuant to any registration statement under this
Section 17.1 that the number of shares to be sold by persons other than INCOM is
greater than the number of such shares which can be offered without adversely
affecting the success of the offering, INCOM may reduce pro rata (among the
Stockholders and all other selling security holders in the offering) the number
of shares offered for the accounts of such persons (based upon the number of
shares held by such person) to a number deemed satisfactory by such managing
underwriter. If any Stockholder disapproves of the terms of the underwriting,
that Stockholder may elect to withdraw therefrom by written notice to INCOM and
the managing underwriter. That Stockholder's shares of INCOM Stock so withdrawn
shall also be withdrawn from registration; provided, however, that, if by the
withdrawal of such shares a greater number of shares of INCOM Stock held by
other Stockholders may be included in such registration, then INCOM shall offer
to all other Stockholders of INCOM the right to include additional shares in the
same proportion used

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<PAGE>
in effecting the above limitations. INCOM shall not grant to any other person
any rights to cause INCOM to register any securities in priority over, or in
precedent to, the rights granted to the Stockholders hereunder and to the
stockholders of the Other Founding Companies pursuant to Section 17 of the Other
Agreements.

17.2 REGISTRATION PROCEDURES. Whenever INCOM is required to register
shares of INCOM Stock pursuant to Section 17.1, INCOM will, as expeditiously as
possible:

(i) Prepare and file with the SEC a registration statement with
respect to such shares and use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
statement or prospectus or any amendments or supplements or term sheets
thereto, INCOM will furnish a representative of the Stockholders with
copies of all such documents proposed to be filed) as promptly as
practical;

(ii) Notify the Stockholders of any stop order issued or threatened
by the SEC and take all reasonable actions required to prevent the entry
of such stop order or to remove it if entered;

(iii) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not less than 120 days, cause the prospectus to
be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 474 under the 1933 Act; and
comply with the provisions of the 1933 Act applicable to it with respect
to the disposition of all securities covered by such registration
statement during the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
registration statement or supplement to the prospectus;

(iv) Furnish to each Stockholder who so requests such number of
copies of such registration statement, each amendment and supplement
thereto and the prospectus included in such registration statement
(including each preliminary prospectus and any term sheet associated
therewith), and such other documents as such Stockholder may reasonably
request in order to facilitate the disposition of the relevant shares;

(v) Make "generally available to its security holders" (within the
meaning of Rule 158) an earnings statement satisfying the provisions of
Section 11(a) of the 1933 Act and Rule 158 thereunder no later than 90
days after the end of the 12-month period beginning with the first day of
INCOM's first fiscal quarter commencing after the effective date of the
registration statement;

(vi) Make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the registration statement at the
earliest possible moment;

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(vii) If requested by the managing underwriter or underwriters, if
any, or any participating Stockholder, promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters or any participating Stockholder, as
the case may be, reasonably requests to be included therein, including,
without limitation, information with respect to the number of shares of
INCOM Stock being sold by participating Stockholders to any underwriter or
underwriters, the purchase price being paid therefor by such underwriter
or underwriters and with respect to any other terms of an underwritten
offering of the shares of INCOM Stock to be sold in such offering, and
promptly make all required filings of such prospectus by supplement or
post-effective amendment;

(viii)Make available for inspection by participating Stockholders,
any underwriter participating in any disposition pursuant to such
registration statement, and the counsel retained by the participating
Stockholders, counsel for the underwriters and any accountant or other
agent retained by participating Stockholders or any such underwriter
(collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of INCOM (the "Records"), as
shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause INCOM's officers, directors and
employees to supply all information reasonably requested by any such
Inspectors in connection with such registration statement; provided, that
records which INCOM determines, in good faith, to be confidential and
which INCOM notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in the
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction after delivery of sufficient notice to INCOM to enable INCOM
to contest such subpoena or order;

(ix) Take all other steps reasonably necessary to effect the
registration of the shares of INCOM Stock contemplated hereby;

(x) Use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as shall be reasonably requested by the
Stockholders, and to keep such registration or qualification effective
during the period such registration statement is required to be kept
effective, provided that INCOM shall not be required to become subject to
taxation, to qualify generally to do business or to file a general consent
to service of process in any such states or jurisdictions;

(xi) Cause all such shares of INCOM Stock to be listed or included
not later than the date of the first sale of shares of INCOM Stock under
such registration statement on any securities exchanges or trading systems
on which similar securities issued by INCOM are then listed or included;
and

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<PAGE>
(xii) Notify each Stockholder at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act within the period
that INCOM is required to keep the registration statement effective of the
happening of any event as a result of which the prospectus included in
such registration statement (as then in effect), together with any
associated term sheet, contains an untrue statement of a material fact or
omits to state any fact required to be stated therein or necessary to make
the statements therein (in the case of the prospectus or any preliminary
prospectus, in light of the circumstances under which they were made) not
misleading, and, at the request of such Stockholder, INCOM promptly will
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the covered shares, such
prospectus will not contain an untrue statement of material fact or omit
to state any fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus or any preliminary
prospectus, in light of the circumstances under which they were made) not
misleading.

All expenses incurred in connection with the registration under this
Article 17 and compliance with securities and blue sky laws (including all
registration, filing, listing, escrow agent, qualification, legal, printer and
accounting fees, but excluding underwriting commissions and discounts), shall be
borne by INCOM.

17.3 INDEMNIFICATION.

(a) In connection with any registration under Section 17.1, INCOM
shall indemnify, to the extent permitted by law, each selling Stockholder (an
"Indemnified Party") against all losses, claims, damages, liabilities and
expenses arising out of or resulting from any untrue or alleged untrue statement
of material fact contained in any registration statement, prospectus or
preliminary prospectus or associated term sheet or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading except insofar as the
same are caused by or contained in or omitted from any information furnished in
writing to INCOM by such Indemnified Party expressly for use therein or by any
Indemnified Parties' failure to deliver a copy of the registration statement or
prospectus or any amendment or supplements thereto after INCOM has furnished
such Indemnified Party with a sufficient number of copies of the same.

(b) In connection with any registration under Section 17.1, each
selling Stockholder shall furnish to INCOM in writing such information
concerning the Stockholder and his or her proposed offering of shares as is
reasonably requested by INCOM for use in any such registration statement or
prospectus and will indemnify, to the extent permitted by law, INCOM, its
directors and officers and each person who controls INCOM (within the meaning of
the 1933 Act) against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission to state therein a material fact required to be
stated in the registration statement or prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein not misleading,
but only to the extent that such untrue or alleged untrue statement or omission
or alleged omission is contained in or

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omitted from information so furnished in writing to INCOM by such Stockholder
expressly for use in the registration statement. Notwithstanding the foregoing,
the liability of a Stockholder under this Section 17.3 shall be limited to an
amount equal to the net proceeds actually received by such Stockholder from the
sale of the relevant shares covered by the registration statement.

(c) Any person entitled to indemnification hereunder will (i) give
prompt notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified parties' reasonable
judgment, a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. Any failure to give prompt notice shall deprive a party of
its right to indemnification hereunder only to the extent that such failure
shall have adversely affected the indemnifying party. If the defense of any
claim is assumed, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party that is not entitled or elects
not, to assume the defense of a claim, will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party, a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

17.4 UNDERWRITING AGREEMENT. In connection with each registration pursuant
to Sections 17.1 covering an underwritten registered offering, INCOM and each
participating Stockholder agree to enter into a written agreement with the
managing underwriters in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
managing underwriters and companies of INCOM's size and investment stature,
including indemnification; provided, however, that the Stockholder shall be
exempt and excluded from any indemnification of the managing underwriters other
than with respect to information provided by the respective Stockholders to
INCOM or the managing underwriters specifically for inclusion in any such
registration statement.

17.5 TRANSFER OF RIGHTS. The right to cause INCOM to register shares of
INCOM Stock under this Agreement may be assigned to a transferee or assignee of
any Stockholder to the extent that such transferee or assignee is a member of
the immediate family of a
Stockholder, a trust,
limited partnership or other estate planning entity for the benefit of any such
persons or a charitable organization that qualifies for receipt of charitable
contributions under Section 170(c) of the Code.

17.6 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the SEC that may permit the sale of INCOM stock
to the public without registration, INCOM agrees to use its reasonable efforts
to:

(i) make and keep public information regarding INCOM available as
those terms are understood and defined in Rule 144 under the 1933 Act
beginning 90 days following the effective date of the Registration
Statement;

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(ii) file with the SEC in a timely manner all reports and other
documents required of INCOM under the 1933 Act and the 1934 Act at any
time after it has become subject to such reporting requirements; and

(iii) so long as a Stockholder owns any restricted INCOM Stock,
furnish to each Stockholder forthwith upon written request a written
statement by INCOM as to its compliance with the current public
information requirements of Rule 144 (at any time from and after 90 days
following the effective date of the Registration Statement, and of the
1933 Act and the 1934 Act (any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly
report of INCOM, and such other reports and documents so filed as a
Stockholder may reasonably request in availing itself of any rule or
regulation of the SEC allowing a Stockholder to sell any such shares
without registration.

18. GENERAL

18.1 COOPERATION. The Company, Stockholders and INCOM shall each deliver
or cause to be delivered to the other on the Closing Date and the Consummation
Date, and at such other times and places as shall be reasonably agreed to, such
additional instruments as the other may reasonably request for the purpose of
carrying out this Agreement. The Company will cooperate and use its reasonable
efforts to have the present officers, directors and employees of the Company
cooperate with INCOM on and after the Consummation Date in furnishing
information, evidence, testimony and other assistance in connection with any tax
return filing obligations, actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the
Consummation Date.

18.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law and except as provided
in Section 17.5) and shall be binding upon and shall inure to the benefit of the
parties hereto, the successors of INCOM and the Company, and the heirs,
successors, and legal representatives of the Stockholders.

18.3 ENTIRE AGREEMENT. This Agreement (including the schedules, exhibits
and annexes attached hereto) and the documents delivered pursuant hereto
constitute the entire agreement and understanding among the Stockholders, the
Company and INCOM and supersede any prior agreement and understanding relating
to the subject matter of this Agreement.
This Agreement,
upon execution, constitutes a valid and binding agreement of the parties hereto
enforceable in accordance with its terms and may be modified or amended only by
a written instrument executed by the Stockholders, the Company and INCOM, acting
through their respective officers or trustees, duly authorized by their
respective Boards of Directors. Any disclosure made on any Schedule delivered
pursuant hereto shall be deemed to have been disclosed for purposes of any other
Schedule required hereby, provided that the Company shall make a good faith
effort to cross reference disclosure, as necessary or advisable, between related
Schedules.

58
<PAGE>
18.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument. A telecopied
facsimile of an executed counterpart of this Agreement shall be sufficient to
evidence the binding agreement of each party to the terms hereof. However, each
party agrees to return to the other parties an original, duly executed
counterpart of this Agreement promptly after delivery of a telecopied facsimile
thereof.

18.5 BROKERS AND AGENTS. Except as disclosed on SCHEDULE 18.5, each party
represents and warrants that it employed no broker or agent in connection with
this transaction and agrees to indemnify the other parties hereto against all
loss, cost, damages or expense arising out of claims for fees or commission of
brokers employed or alleged to have been employed by such indemnifying party.

18.6 EXPENSES. Whether or not the transactions herein contemplated shall
be consummated, INCOM will pay the fees, expenses and disbursements of INCOM and
its agents, representatives, accountants and counsel incurred in connection with
the subject matter of this Agreement and any amendments thereto, including all
costs and expenses incurred in the performance and compliance with all
conditions to be performed by INCOM under this Agreement, including the fees and
expenses of Arthur Andersen LLP, Andrews & Kurth L.L.P., and any other person or
entity retained by INCOM, and the costs of preparing the Registration Statement
and otherwise in connection with the IPO. In addition, whether or not the
transactions contemplated herein shall be consummated, INCOM will pay the
reasonable fees and expenses of Bracewell & Patterson LLP incurred on behalf of
the Company and the Stockholders in connection with the subject matter of this
Agreement. Each Stockholder shall pay all sales, use, transfer, real property
transfer, recording, gains, stock transfer and other similar taxes and fees
("Transfer Taxes") imposed in connection with the purchase and sale of the
Company Stock, other than Transfer Taxes, if any, imposed by the State of
Delaware. Each Stockholder shall file all necessary documentation and Returns
with respect to such Transfer Taxes. In addition, each Stockholder acknowledges
that he, and not the Company or INCOM, will pay all Taxes due by him upon
receipt of the consideration payable pursuant to Section 1 hereof. The
Stockholders acknowledge that the risks of the transactions contemplated hereby
include Tax risks, with respect to which the Stockholders are relying on the
opinion contemplated by Section 8.12 hereof and representations by INCOM in this
Agreement.

18.7 NOTICES. All notices of communication required or permitted hereunder
shall be in writing and may be given by depositing the same in United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person or
via a nationally recognized courier service to an officer or agent of such
party.

59
<PAGE>
(a) If to INCOM addressed to it at:

INCOM Roofing Services, Inc.
515 Post Oak Blvd., Suite 450
Houston, Texas 77027
Attention: Chief Executive Officer

with copies to:

Thomas P. Mason
Andrews & Kurth L.L.P.
4200 Chase Tower
Houston, Texas 77002

(b) If to the Stockholders, addressed to them at their addresses set forth
on the signature pages hereto, with copies to:

[ ]

or to such other address or counsel as any party hereto shall specify pursuant
to this Section 18.7 from time to time.

18.8 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Texas, excluding any conflicts of law, rule or
principle that might refer same to the laws of another jurisdiction.

18.9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination on behalf of the parties until the respective Expiration
Dates referred to herein with respect thereto or, if no Expiration Date is
applicable with respect thereto, until the expiration of all applicable statute
of limitations periods.

60
<PAGE>
18.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise provided
herein, no delay of or omission in the exercise of any right, power or remedy
accruing to any party as a result of any breach or default by any other party
under this Agreement shall impair any such right, power or remedy, nor shall it
be construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.

18.11 TIME. Time is of the essence with respect to this Agreement.

18.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be
modified in such manner as to be
valid, legal and enforceable but so as to most nearly retain the intent of the
parties, and if such modification is not possible, such provision shall be
severed from this Agreement, and in either case the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby. No provision of this Agreement shall be
interpreted or construed against any party solely because that party or its
legal representative drafted such provision.

18.13 REMEDIES CUMULATIVE. No right, remedy or election given by any term
of this Agreement shall be deemed exclusive but each shall be cumulative with
all other rights, remedies and elections available at law or in equity.

18.14 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.

18.15 AMENDMENTS, WAIVERS AND CONSENTS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived only with
the written consent of INCOM, the Company and Stockholders who would be entitled
to receive a majority of the shares of INCOM Stock specified on Annex I to this
Agreement if the transactions contemplated hereby were consummated. Any
amendment or waiver effected in accordance with this Section 18.15 shall be
binding upon each of the parties hereto, any other person receiving INCOM Stock
in connection with the purchase and sale of the Company Stock and each future
holder of such INCOM Stock. Any consent of the Stockholders who would receive a
majority of the shares of INCOM Stock pursuant to Annex I of this Agreement if
the transactions contemplated hereby were consummated shall be deemed to be the
consent of the Stockholders for purposes of provisions of this Agreement as to
which a consent of the Stockholders may be requested or required.

18.16 MEDIATION AND ARBITRATION If a dispute arises out of or relates to
this Agreement, or the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation administered by the American
Arbitration Association under its then prevailing Commercial Mediation Rules,
before resorting to arbitration. Thereafter, any unresolved controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration administered by the American

61
<PAGE>
Arbitration Association in accordance with its then prevailing Commercial
Arbitration Rules. The enforcement, interpretation and procedural and
substantive effect of the obligation to arbitrate created by this Section 18.16
shall be governed by the Federal Arbitration Act as amended from time to time, 9
U.S.C. ss.ss. 1 ET SEQ. The parties hereby disclaim any intention to have the
substantive or procedural law of any state or other jurisdiction, other than the
law of the United States as embodied in the Federal Arbitration Act, applied to
such obligation. Any such mediation or arbitration proceeding will be conducted
in Houston, Texas.

18.17 INFORMATION PROVIDED FOR REGISTRATION STATEMENT. For purposes of
this Agreement the information provided by the Company and the Stockholders in
writing specifically for inclusion in the Registration Statement shall include
solely (i) the Financial Statements (in the form that they appear in the
Registration Statement), (ii) any financial statements provided to INCOM
pursuant to Section 7.9, (iii) the description of the Company contained in the
Registration Statement under the caption "The Company", (iv) the description of
the Company's results of operations and its liquidity and capital resources
contained in the Registration Statement under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations", (v)
the description, if any, of matters related to the Company and the Stockholders
contained in the Registration Statement under the caption "Certain Transactions
- - Transactions involving Certain Officers, Directors and Stockholders" [and] [,]
(vi) the biographical description of any Stockholder contained in the
Registration Statement under the caption "Management" [and (vii) the description
of the legal proceedings related to the Company contained in the Registration
Statement under the caption "Business - Legal Proceedings" [for D.C. Taylor
only]].

62
<PAGE>

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

INCOM ROOFING SERVICES, INC.

By:_____________________________
President

[Remainder of page intentionally left blank]

63
<PAGE>
PLEASE PROVIDE NAMES AND ADDRESSES OF ALL STOCKHOLDERS
AND THEIR SPOUSES

STOCKHOLDERS: SPOUSES (SOLELY TO ACKNOWLEDGE THE SALE OF
THE COMPANY STOCK BY THE STOCKHOLDER):

________________________ ______________________________
[Name] [Name]
[Address]

64
<PAGE>
[Annex I for use if Founding Company is a single entity]

ANNEX I

TO THE STOCK PURCHASE AGREEMENT
DATED AS OF JULY ____, 1998
BY AND AMONG
INCOM ROOFING SERVICES, INC.
AND ______________
AND ITS STOCKHOLDERS

CONSIDERATION TO BE PAID TO THE STOCKHOLDERS

Aggregate consideration to be paid to stockholders of __________ (the
"Company"):

$__________ in cash and the value of INCOM Stock assuming an Initial Public
Offering Price (as defined below) of $13.00 per share, consisting of _______
shares of INCOM Stock and $________ of cash, it being agreed that the aggregate
number of shares of INCOM Stock to be issued to the stockholders of the Company
shall remain unchanged while the cash payments described in this Annex I will
depend on the actual Initial Public Offering Price of the INCOM Stock in the
IPO, which may be more or less than $13.00 per share, and the cash payments will
be subject to further adjustment as provided in this Annex I; provided, however
that the aggregate consideration to be paid to all Stockholders of the Company
(excluding the amount of the cash, promissory notes and nonoperating assets
distributed pursuant to the adjustments provided in this Annex I) shall not be
less than the Minimum Value set forth below (as decreased by the amount of any
reductions to the amount of cash or the number of shares of INCOM Stock pursuant
to the adjustments provided in this Annex I). Such cash payments will be the
cash consideration noted below multiplied by a fraction, the numerator of which
is the actual Initial Public Offering Price per share and the denominator of
which is $13.00, subject to further adjustment as provided in this Annex I.

CONSIDERATION TO BE PAID TO THE STOCKHOLDERS OF THE COMPANY:

Shares of
Company Shares of INCOM
Stockholder Common Stock Stock (1) Cash
- ----------- ------------ --------------- -------------

$
------------ --------------- -------------

------------ --------------- -------------
Total $
============ =============== =============
<PAGE>
MINIMUM VALUE (2): $______________

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

(1) After giving effect to the ____-for-one stock split described in
the Registration Statement.

(2) The per share value of the common stock portion of the total consideration,
for purposes of satisfying the Minimum Value, will be equal to the Initial
Public Offering Price.

IF THE COMPANY IS AN S CORPORATION, THE FOLLOWING PROVISIONS WILL APPLY:

1. At any time and from time to time prior to the Closing, an S Corporation
may distribute to its stockholders cash and nonoperating assets identified
on SCHEDULE 5.25 and may issue promissory notes to its stockholders
provided that (i) the aggregate value of such cash, nonoperating assets and
promissory notes distributed or issued to its stockholders does not exceed
the amount of such corporation's "accumulated adjustment account" (as such
term is used in the Internal Revenue Code of 1986, as amended) of such
corporation as of the Consummation Date and (ii) the distribution of cash
and promissory notes does not cause the amount of Working Capital of such
corporation as of the Consummation Date to be less than the amount
reflected in the column entitled "Minimum Working Capital Required" with
respect to such corporation on the last page of this Annex I. For purposes
of clause (i) of the preceding sentence, the "value" of any nonoperating
assets shall be equal to the net book value thereof as reflected on such
corporation's balance sheet as of December 31, 1997 and the "value" of any
promissory note shall be equal to the face amount of the indebtedness
represented thereby. Any such promissory note shall specify that it is
prepayable at any time and that it shall be due and payable one year after
issuance, it shall bear interest at a rate per annum not to exceed 7% and
that interest shall be paid quarterly.

2. The aggregate cash payable to the stockholders as set forth in the "Total"
line of the column entitled "Cash" on page 1 of this Annex I (as adjusted
by the last sentence of the paragraph above the table on page 1) (a) shall
be INCREASED to the extent of (i) the amount, if any, of Excess Working
Capital (as defined below) of such corporation as of the Consummation Date
and (ii) the amount, if any, by which Debt (as defined below) of such
corporation as of the Consummation Date is less than the sum of (x) the
amount of Debt of such corporation as of March 31, 1998 and (y) the amount
by which the amount reflected in the column entitled "Accumulated
Adjustment Account" with respect to the corporation on the last page of
this Annex I exceeds the amount reflected in the column entitled "Excess
Working Capital" on the same page and (b) shall be DECREASED to the extent
of (i) the amount, if any, by which Working Capital of such corporation as
of the Consummation Date is less than the amount reflected in the column
entitled "Minimum Working Capital Required" with respect to such
corporation on the last page of this Annex I and (ii) the amount, if any,
by which Debt of such corporation as of the Consummation Date exceeds the
sum of (x) the amount of Debt of such corporation as of March 31, 1998 and
(y) the amount by which the amount reflected in the column entitled
"Accumulated Adjustment Account" with respect to the corporation on the
last page of this Annex I exceeds the amount reflected in the column
entitled "Excess Working Capital" on the same page. The adjustments in this
paragraph 2

-Page 2 of Annex I-
<PAGE>
shall be determined after taking into account the distributions made
pursuant to paragraph 1 above. The aggregate amount of any net increases or
decreases in the cash amount to be paid to the stockholders of such
corporation pursuant to this paragraph shall be applied on a pro rata basis
to the stockholders of such corporation in the same proportion as the
shares of INCOM Stock to be received by a stockholder as specified on page
1 of this Annex I bears to the total number of shares of INCOM Stock to be
received by such stockholders. In the event that the calculation of the
amount of cash payable to the stockholders of such corporation pursuant to
this Annex I, after application of the adjustments resulting from this
paragraph, results in a negative amount, the aggregate number of shares of
INCOM Stock to be paid to the stockholders of such corporation shall be
reduced by a number of shares of INCOM Stock equal to such negative amount
divided by the Initial Public Offering Price of the INCOM Stock. The amount
of such aggregate reduction in the number of shares of INCOM Stock shall be
applied on a pro rata basis to the stockholders of such corporation in the
same manner as specified in the second preceding sentence.

IF THE COMPANY IS A C CORPORATION, THE FOLLOWING PROVISIONS WILL APPLY:

1. At any time and from time to time prior to the Closing, a C Corporation may
distribute to its stockholders cash and nonoperating assets identified on
Schedule 5.25 provided that (i) the aggregate value of such cash and
nonoperating assets distributed to its stockholders does not exceed the
amount of such corporation's retained earnings as of the Consummation Date
and (ii) the distribution of cash does not cause the amount of Working
Capital of such corporation as of the Consummation Date to be less than the
amount reflected in the column entitled "Minimum Working Capital Required"
with respect to such corporation on the last page of this Annex I. For
purposes of clause (i) of the preceding sentence, the "value" of any
nonoperating assets shall be equal to the net book value thereof as
reflected on such corporation's balance sheet as of December 31, 1997.

2. The aggregate cash payable to the stockholders as set forth in the "Total"
line of the column entitled "Cash" on page 1 of this Annex I (as adjusted
by the last sentence of the paragraph above the table on page 1) (a) shall
be INCREASED to the extent of (i) the amount, if any, of Excess Working
Capital of such corporation as of the Consummation Date and (ii) the
amount, if any, by which Debt (as defined below) of such corporation as of
the Consummation Date is less than the amount of Debt of such corporation
as of March 31, 1998 and (b) shall be DECREASED to the extent of (i) the
amount, if any, by which Working Capital of such corporation as of the
Consummation Date is less than the amount reflected in the column entitled
"Minimum Working Capital Required" with respect to such corporation on the
last page of this Annex I and (ii) the amount, if any, by which Debt of
such corporation as of the Consummation Date exceeds the amount of Debt of
such corporation as of March 31, 1998. The adjustments in this paragraph 2
shall be determined after taking into account the distributions made
pursuant to paragraph 1 above. The aggregate amount of any net increases or
decreases in the cash amount to be paid to the stockholders of such
corporation pursuant to this paragraph shall be applied on a pro rata basis
to the stockholders of such corporation in the same proportion as the
shares of INCOM Stock to be received by a stockholder as specified on page
1 of this Annex I bears to the total number of shares of INCOM Stock to be
received by such stockholders. In the event that the

-Page 3 of Annex I-
<PAGE>
calculation of the amount of cash payable to the stockholders of such
corporation pursuant to this Annex I, after application of the adjustments
resulting from this paragraph, results in a negative amount, the aggregate
number of shares of INCOM Stock to be paid to the stockholders of such
corporation shall be reduced by a number of shares of INCOM Stock equal to
such negative amount divided by the Initial Public Offering Price. The
amount of such aggregate reduction in the number of shares of INCOM Stock
shall be applied on a pro rata basis to the stockholders of such
corporation in the same manner as specified in the second preceding
sentence.

DEFINITIONS

"Working Capital" for a corporation means, as of any date, the amount of
which current assets of such corporation exceeds its current liabilities, as
determined in accordance with GAAP, except that (a) "current assets" shall
include (i) $_________ of the reserve for bad debt expense and (ii) $______ of
the reserve for obsolete inventory and shall not include $__________ of deferred
tax assets and (b) "current liabilities" shall not include (i) the current
portion of long-term debt nor current notes payable with respect to borrowed
money, (ii) $______ of the billings in excess of costs and estimated earnings on
uncompleted contracts and (iii) $_____ for warranty claims and shall include
$_________ of deferred tax liabilities, provided that the amount of "Working
Capital" as of the Consummation Date shall be increased by the amount of
transaction expenses incurred by such corporation up to a maximum amount of
$17,000, provided that the Company produce appropriate documentation supporting
such expense.

"Excess Working Capital" for a corporation means, as of any date, the
amount by which the Working Capital of such corporation exceeds the amount
reflected in the column entitled "Minimum Working Capital Required" on the last
page of this Annex I.

"Debt" means, as of any date, (i) indebtedness for borrowed money which is
int erest-bearing and (ii) the amount of the liability that would be required to
be capitalized under GAAP.

"Initial Public Offering Price" means the price per share at which the
underw riters agree to sell the INCOM Stock to the public in the IPO, without
deducting any discounts, commissions or expenses.

-Page 4 of Annex I-
<PAGE>

Excess
Working Capital Minimum Working Capital
as of Working Capital as of
Company March 31, 1998 Required March 31, 1998
- ------- ------------------- ---------------- --------------
[an amount equal [difference
to 5% of 1997 between amounts
[from March 31 revenue of the in columns 1 and
balance sheet] corporation] 2]

All capitalized terms used herein but not defined herein have the meanin gs
ascribed thereto in the Stock Purchase Agreement to which this Annex I is
attached. References to "as of the Consummation Date" are to be determined after
giving effect to the transactions occurring on the Consummation Date pursuant to
the Stock Purchase Agreement.

-Page 5 of Annex I-
<PAGE>
[Annex I for use if Founding Company is comprised of multiple entities]

ANNEX I

TO THE STOCK PURCHASE AGREEMENT
DATED AS OF JULY ____, 1998
BY AND AMONG
INCOM ROOFING SERVICES, INC.
AND ______________, ______________ AND ______________
AND THEIR STOCKHOLDERS

CONSIDERATION TO BE PAID TO THE STOCKHOLDERS

Aggregate consideration to be paid to stockholders of __________ ("Company A"),
______________ ("Company B") and ______________ ("Company C") (collectively, the
"Companies"):

$__________ in cash and the value of INCOM Stock assuming an Initial Public
Offering Price (as defined below) of $13.00 per share, consisting of _______
shares of INCOM Stock and $________ of cash, it being agreed that the aggregate
number of shares of INCOM Stock to be issued to the stockholders of the
Companies shall remain unchanged while the cash payments described in this Annex
I will depend on the actual Initial Public Offering Price of the INCOM Stock in
the IPO, which may be more or less than $13.00 per share, and the cash payments
will be subject to further adjustment as provided in this Annex I; provided,
however that the aggregate consideration to be paid to all Stockholders of the
Companies (excluding the amount of the cash, promissory notes and nonoperating
assets distributed pursuant to the adjustments provided in this Annex I) shall
not be less than the Minimum Value (as set forth below decreased by the amount
of any reductions to the amount of cash or the number of shares of INCOM Stock
pursuant to the adjustments provided in this Annex I). Such cash payments will
be the cash consideration noted below multiplied by a fraction, the numerator of
which is the actual Initial Public Offering Price and the denominator of which
is $13.00, subject to further adjustment as provided in this Annex I.
<PAGE>
CONSIDERATION TO BE PAID TO THE STOCKHOLDERS OF THE COMPANIES:

Shares of
Company A Shares of
Stockholder Common Stock INCOM Stock(1) Cash
- ----------- ------------ -------------- ---------------

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

Total $
============ ============== ===============

Minimum Value for Company A(2): $________________

Shares of
Company B Shares of
Stockholder Common Stock INCOM Stock(1) Cash
- ----------- ------------ -------------- ---------------

------------ -------------- ---------------
Total $
============ ============== ===============

Minimum Value for Company B(2): $____________

Shares of
Company C Shares of
Stockholder Common Stock INCOM Stock(1) Cash
- ----------- ------------ -------------- ---------------

- --------------------------------------------------------------------------------
<PAGE>
------------ -------------- ---------------
Total $
============ ============== ===============

Minimum Value for
Company C(2): $_________________

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

(1) After giving effect to the ___-for-one stock split described in
the Registration Statement.

(2) The per share value of the common stock portion of the total consideration,
for purposes of satisfying the Minimum Value, will be equal to the Initial
Public Offering Price.

WITH RESPECT TO ANY OF THE COMPANIES THAT IS AN S CORPORATION, THE FOLLOWING
PROVISIONS WILL APPLY:

2. The aggregate cash payable to the stockholders as set forth in the "Total"
line of the column entitled "Cash" on page 2 of this Annex I with respect
to such corporation (as adjusted by the last sentence of the paragraph on
page 1) (a) shall be INCREASED to the extent of (i) the amount, if any, of
Excess Working Capital (as defined below) of such corporation as of the
Consummation Date and (ii) the amount, if any, by which Debt (as defined
below) of such corporation as of the Consummation Date is less than the sum
of (x) the amount of Debt of such corporation as of March 31, 1998 and (y)
the amount by which the amount reflected in the column entitled
"Accumulated Adjustment Account" with respect to such corporation

-Page 3 of Annex I-
<PAGE>
on the last page of this Annex I exceeds the amount reflected in the column
entitled "Excess Working Capital" (or $0 if the Excess Working Capital is
less than $0) on the same page and (b) shall be DECREASED to the extent of
(i) the amount, if any, by which Working Capital of such corporation as of
the Consummation Date is less than the amount reflected in the column
entitled "Minimum Working Capital Required" with respect to such
corporation on the last page of this Annex I and (ii) the amount, if any,
by which Debt of such corporation as of the Consummation Date exceeds the
sum of (x) the amount of Debt of such corporation as of March 31, 1998 and
(y) the amount by which the amount reflected in the column entitled
"Accumulated Adjustment Account" with respect to such corporation on the
last page of this Annex I exceeds the amount reflected in the column
entitled "Excess Working Capital" on the same page. The adjustments in this
paragraph 2 shall be determined after taking into account the distributions
made pursuant to paragraph 1 above. The aggregate amount of any net
increases or decreases in the cash amount to be paid to the stockholders of
such corporation pursuant to this paragraph shall be applied on a pro rata
basis to the stockholders of such corporation in the proportion of their
ownership of stock in such corporation as specified on page 2 of this Annex
I. In the event that the calculation of the amount of cash payable to the
stockholders of such corporation pursuant to this Annex I, after
application of the adjustments resulting from this paragraph, results in a
negative amount, the aggregate number of shares of INCOM Stock to be paid
to the stockholders of such corporation shall be reduced by a number of
shares of INCOM Stock equal to such negative amount divided by the Initial
Public Offering price. The amount of such aggregate reduction in the number
of shares of INCOM Stock shall be applied on a pro rata basis to the
stockholders of such corporation in the same manner as specified in the
second preceding sentence.

WITH RESPECT TO ANY OF THE COMPANIES THAT IS A C CORPORATION, THE FOLLOWING
PROVISIONS WILL APPLY:

1. At any time and from time to time prior to the Closing, a C Corporation may
distribute to its stockholders cash and nonoperating assets identified on
SCHEDULE 5.25 provided that (i) the aggregate value of such cash and
nonoperating assets distributed to its stockholders does not exceed the
amount of such corporation's retained earnings as of the Consummation Date
and (ii) the distribution of cash does not cause the amount of Working
Capital of such corporation as of the Consummation Date to be less than the
amount reflected in the column entitled "Minimum Working Capital Required"
with respect to such corporation on the last page of this Annex I. For
purposes of clause (i) of the preceding sentence, the "value" of any
nonoperating assets shall be equal to the net book value thereof as
reflected on such corporation's balance sheet as of December 31, 1997.

-Page 4 of Annex I-
<PAGE>
Consummation Date is less than the amount of Debt of such corporation as of
March 31, 1998 and (b) shall be DECREASED to the extent of (i) the amount,
if any, by which Working Capital of such corporation as of the Consummation
Date is less than the amount reflected in the column entitled "Minimum
Working Capital Required" with respect to such corporation on the last page
of this Annex I and (ii) the amount, if any, by which Debt of such
corporation as of the Consummation Date exceeds the amount of Debt of such
corporation as of March 31, 1998. The adjustments in this paragraph 2 shall
be determined after taking into account the distributions made pursuant to
paragraph 1 above. The aggregate amount of any net increases or decreases
in the cash amount to be paid to the stockholders of such corporation
pursuant to this paragraph shall be applied on a pro rata basis to the
stockholders of such corporation in the proportion of their ownership of
stock in such corporation as specified on page 2 of this Annex I. In the
event that the calculation of the amount of cash payable to the
stockholders of such corporation pursuant to this Annex I, after
application of the adjustments resulting from this paragraph, results in a
negative amount, the aggregate number of shares of INCOM Stock to be paid
to the stockholders of such corporation shall be reduced by a number of
shares of INCOM Stock equal to such negative amount divided by the Initial
Public Offering price. The amount of such aggregate reduction in the number
of shares of INCOM Stock shall be applied on a pro rata basis to the
stockholders of such corporation in the same manner as specified in the
second preceding sentence.

DEFINITIONS

"Working Capital" for a corporation means, as of any date, the amount of
whi ch current assets of such corporation exceeds its current liabilities, as
determined in accordance with GAAP, except that for Company A (a) "current
assets" shall include (i) $_________ of the reserve for bad debt expense and
(ii) $______ of the reserve for obsolete inventory and shall not include
$_________ of deferred tax assets and (b) "current liabilities" shall not
include (i) the current portion of long-term debt nor current notes payable with
respect to borrowed money, (ii) $______ of billings in excess of costs and
estimated earnings on uncompleted contracts and (iii) $_______ for warranty
claims and shall include $________ of deferred tax liabilities, provided that
the amount of "Working Capital" as of the Consummation Date shall be increased
by the amount of transaction expenses incurred by the Companies up to a maximum
aggregate amount of $30,000, provided that the Company produce appropriate
documentation supporting such expense.

"Debt" means, as of any date, (i) indebtedness for borrowed money which is
int erest-bearing and (ii) the amount of the liability that would be required to
be capitalized under GAAP.

-Page 5 of Annex I-
<PAGE>
"Initial Public Offering Price" means the price per share at which the
underw riters agree to sell the INCOM Stock to the public in the IPO, without
deducting any discounts, commissions or expenses.

-Page 6 of Annex I-
<PAGE>
Excess
Working Capital Minimum Working Capital
as of Working Capital as of
Company A March 31, 1998 Required March 31, 1998
- --------- ------------------- ---------------- --------------
[an amount equal [difference
to 5% of 1997 between amounts
[from March 31 revenue of the in columns 1 and
balance sheet] corporation] 2]

Excess
Working Capital Minimum Working Capital
as of Working Capital as of
Comapny B March 31, 1998 Required March 31, 1998
- --------- ------------------- ---------------- --------------
[an amount equal [difference
to 5% of 1997 between amounts
[from March 31 revenue of the in columns 1 and
balance sheet] corporation] 2]

Excess
Working Capital Minimum Working Capital
as of Working Capital as of
Company C March 31, 1998 Required March 31, 1998
- --------- ------------------- ---------------- --------------
[an amount equal [difference
to 5% of 1997 between amounts
[from March 31 revenue of the in columns 1 and
balance sheet] corporation] 2]

-Page 7 of Annex I-
<PAGE>
All capitalized terms used herein but not defined herein have the meanings
as cribed thereto in the Stock Purchase Agreement to which this Annex I is
attached. References to "as of the Consummation Date" are to be determined after
giving effect to the termination occurring on the Consummation Date pursuant to
the Stock Purchase Agreement.

-Page 8 of Annex I-
<PAGE>
SEYFORTH EARN-OUT

II. ADDITIONAL CONSIDERATION

In addition to the consideration to be delivered to the Stockholders on
the Consummation Date as set forth in Section I of this Annex I, INCOM shall pay
the Stockholders such additional consideration (the "Additional Consideration")
as shall be determined in accordance with the following provisions:

1. CALCULATION OF ADDITIONAL CONSIDERATION.

(a) If the Company generates Net Income (as defined below) in 1999
in excess of Target Net Income (as defined below), the
Stockholders shall be entitled to receive Additional
Consideration in accordance with the following formula:

A = (B - C) x D x .75, where

A represents the amount of Additional Consideration earned
(provided that Additional Consideration shall only be paid in
the event that A is a positive number);

B represents the amount of Net Income generated by the
Company;

C represents Target Net Income; and

D represents the sum of (i) 10.63214 and (ii) .81786
multiplied by a number which is determined by subtracting
$13.00 from the Initial Public Offering
Price.

(b) Net Income of the Company shall be calculated:

(i) in accordance with GAAP applied on a basis consistent
with that used in preparing the Financial Statements;

(ii) exclusive of an allocation of selling, general or
administrative expense from INCOM;

(iii) exclusive of an allocation of amortization of goodwill
associated with the consummation of the INCOM Plan of
Organization;
<PAGE>
(iv) assuming a level of interest expense consistent with
that recorded in the Company's 1997 audited financial
statements included in the Registration Statement; and
<PAGE>
(v) assuming that the Company is subject to an 40% effective
tax rate.

2. MAXIMUM ADDITIONAL CONSIDERATION. Notwithstanding the foregoing
formula, the maximum aggregate Additional Consideration ("Maximum
Additional Consideration") to be received by the Stockholders is
$2,799,485, assuming the Initial Public Offering Price is $13.00;
PROVIDED, HOWEVER, that if the Initial Public Offering Price is other
than $13.00, the Maximum Additional Consideration will be the sum of
(i) $2,799,485 and (ii) $215,345 multiplied by a number which is
determined by subtracting $13.00 from the Initial Public Offering
Price.

3. FORM AND PAYMENT OF ADDITIONAL CONSIDERATION.

(a) FORM. The Additional Consideration shall be paid 25% in cash and
75% in INCOM Stock. The number of shares of INCOM Stock shall be
derived by dividing 75% of the amount of Additional Consideration
to be paid in INCOM Stock by the average closing price on the New
York Stock Exchange (or other exchange or quotation system as the
INCOM Stock may be traded at such time) for INCOM Stock for the
last five trading days of 1999; PROVIDED, HOWEVER, that in no
case shall the number of shares of INCOM Stock issued as
Additional Consideration exceed 569,923.

(b) PAYMENT. Any Additional Consideration to be paid shall be
delivered by INCOM to the Stockholders within 30 days of receipt
by INCOM of the Company's 1999 audited financial statements. The
Stockholders shall receive such Additional Consideration in
proportion to their ownership of Company Stock as of the date of
the Agreement.
<PAGE>
BRAZOS EARN-OUT

II. ADDITIONAL CONSIDERATION

1. CALCULATION OF ADDITIONAL CONSIDERATION.

(a) The Stockholders shall be entitled to Additional Consideration
for operating results in each of 1998, 1999 and 2000 (each an
"Earn-Out Year") as shall be calculated in accordance with the
following formula:

A = (B - C) x E, where
---------
D

A represents the number of shares of INCOM Stock earned
(provided that Additional Consideration for any Earn-Out Year
shall only be paid in the event that A is a positive number);

B represents the amount of Net Income (as defined below)
generated by the Company in the applicable Earn-Out Year;

C represents Target Net Income (as defined below) for the
applicable Earn-Out Year;

D represents $905,958; and

E represents 740,944 shares of INCOM Stock.

(b) Net Income of the Company shall be calculated:

(i) for Company A and Company B, on a combined basis, in
accordance with GAAP applied on a basis consistent with
that used in preparing the Financial Statements;

(ii) exclusive of an allocation of selling, general or
administrative expense from INCOM;
<PAGE>
(iii) exclusive of an allocation of amortization of goodwill
associated with the consummation of the INCOM Plan of
Organization;

(iv) assuming a level of interest expense consistent with
that recorded in the Company's 1997 audited financial
statements included in the Registration Statement; and

(v) assuming that the Company is subject to a 40% effective
tax rate.

(i) for 1998, $311,128;

(ii) for 1999, the greater of (A) $326,684 and (B) 1.05 x Net
Income generated by the Company in 1998; and

(iii) for 2000, the greater of (A) $343,019 and (B) 1.05 x Net
Income generated by the Company in 1999.

2. MAXIMUM ADDITIONAL CONSIDERATION. Notwithstanding the foregoing
formula, the maximum aggregate Additional Consideration ("Maximum
Additional Consideration") to be received by the Stockholders is
740,944 shares of INCOM Stock. Accordingly, the Additional
Consideration to be paid with respect to Net Income generated by the
Company in 1998, 1999 or 2000, when taken together with all other
Additional Consideration paid pursuant to this Section II of Annex I,
if any, cannot exceed the Maximum Additional Consideration; PROVIDED,
HOWEVER, that if the Stockholders would have been entitled to
Additional Consideration for an Earn-Out Year which, when added to any
Additional Consideration for any prior Earn-Out Year, would exceed the
Maximum Additional Consideration by 10%, $1,000,000 of such Additional
Consideration will be paid in cash rather than INCOM Stock (with the
reduction in shares of INCOM Stock to be paid as Additional
Consideration to be calculated based on the average closing price for
INCOM Stock on the New York Stock Exchange (or such other exchange or
quotation system as the INCOM Stock may be traded at such time) for
the last five trading days of the Earn-Out Year in which the
Additional Consideration was earned; PROVIDED, FURTHER, that the
foregoing proviso does not modify the prohibition of payment of
Additional Consideration in excess of the Maximum Additional
Consideration. The Company hereby reserves the right to issue up to
the Maximum Additional Consideration to the Stockholders at any time
in its sole discretion in complete satisfaction of its obligation to
pay the Additional Consideration to the Stockholders hereunder.

3. FORM AND PAYMENT OF ADDITIONAL CONSIDERATION.
<PAGE>
(a) FORM. The Additional Consideration shall be paid by the issuance
of a number of shares of INCOM Common Stock as is calculated in
accordance with paragraph 1 above.

(b) PAYMENT. Any Additional Consideration to be paid pursuant hereto
shall be delivered by INCOM to the Stockholders within 30 days of
receipt by INCOM of the Company's audited financial statements
for the Earn-Out Year in which the Additional Consideration is
earned. The Stockholders shall receive such Additional
Consideration in proportion to the aggregate amount of cash each
Stockholder will receive on the Consummation Date pursuant to
Section I of this Annex I in respect of Company A and Company B.

4. REIMBURSEMENT OF CERTAIN TAX COSTS.

(a) INCOM shall advance to each of the Stockholders cash in an amount
sufficient to cover such Stockholder's federal income tax
liability resulting from payment of the Additional Consideration
(the "FIT Advance"). In exchange for such advance, each such
Stockholder will deliver to INCOM a promissory note (the "FIT
Note") in a principal amount which is equal to the FIT Advance
for such Stockholder. FIT Notes shall be secured by a pledge of
the INCOM Stock held by such Stockholder, shall be due within 90
days following the expiration of the transfer restrictions
contained in Section 15 of the Agreement, shall be prepayable at
any time and shall bear interest at a rate per annum not to
exceed the weighted average interest rate for INCOM's commercial
borrowings.

(b) INCOM shall further reimburse the Stockholders for 50% of the
difference between the capital gains rate and the federal income
tax rate associated with imputed interest income arising from the
Stockholders' receipt of the Additional Consideration.

(c) INCOM shall further reimburse the Stockholders for any federal
income tax liability associated with the treatment of the receipt
of Additional Consideration by the Stockholders as ordinary
income rather than capital gains for federal income tax purposes
as a result of a joint election by INCOM and the Stockholders
under 338(h)(10) of the Internal Revenue Code of 1986 to treat
the acquisition of the Company as an asset purchase.

(d) INCOM shall reimburse or advance the tax payments required in
paragraphs (a)-(c) above at the reasonable request of the
Stockholders and no more than 30 days prior to such Stockholders'
obligation to pay the applicable tax (either on a quarterly
estimated basis or in connection with the filing of the
applicable tax return).
<PAGE>
BETA CONSTRUCTION COMPANY

By: Paul V. Gordon
President

STOCKHOLDERS:
Paul V. Gordon
Jeremy O. Brown
Steven W. Wilt
Joseph R. Koller
Dan Gordon

HAMPTON SUPPLY, INC.

By: Paul V. Gordon
President

STOCKHOLDERS:
Paul V. Gordon
Jeremy O. Brown
Steven W. Wilt
Joseph R. Koller
Dan Gordon

BOONE BROTHERS ROOFING, INC.

By: Allan E. Boone
President

STOCKHOLDERS:
Allan E. Boone
Lloyd Boone
Ronald Allan Boone

BRAZOS ROOFING INTERNATIONAL, INC.

By: Steven Smith
President

STOCKHOLDERS:
Steven Smith
Jancie Smith
J. D. Martin
<PAGE>
Adren Martin Estate
By: Candace Martin Sheppard
Executrix of Adren Martin Estate

BOSQUE ENVIRONMENTAL, INC.

By: Steven Smith
President

STOCKHOLDERS:
J. D. Martin
Steven Smith
Ron Haddock
Tom McAdams
Ken Smith
Yates Malone

BURNS & SCALO ROOFING COMPANY, INC.

By: John F. Scalo
President

STOCKHOLDERS:

John F. Scalo
John T. Scalo

CUDDY ROOFING COMPANY

By: John F. Scalo
President

STOCKHOLDERS:
John F. Scalo
Carole M. Scalo

SCALO INCORPORATED
By: John F. Scalo

STOCKHOLDER:
John F. Scalo

CHAMBERLIN WATERPROOFING & ROOFING SYSTEMS, INC.
<PAGE>
By: John M. Kafka
President

STOCKHOLDERS:
John M. Kafka
Martin H. Stroud

D. C. TAYLOR CO.

By: William W. Taylor
Chief Executive Officer

STOCKHOLDERS:
William W. Taylor
Mary T. Suess

EVANS SERVICE COMPANY, INC.
By: Philip McKinney
Chief Executive Officer

STOCKHOLDERS:
William L. Allington
Philip McKinney
Kevin J. Kennedy
Wayne D. Mercer
Richard A. Taylor
William Fischer
Steve Allington
Garey A. Stout
Russell V. McGlynn
Dan E. Root
Robert J. Pringle

KELLEY BROTHERS ROOFING, INC.

By: Robert D. Kelley
President

STOCKHOLDERS:
Robert D. Kelley
Troy Michael Kelley

MARK ENTERPRISES, INC.
<PAGE>
By: Troy Michael Kelley
President

STOCKHOLDERS:
Robert D. Kelley
Troy Michael Kelley

M. J. DALSIN COMPANY, INC.

By: Michael J. Dalsin
President

STOCKHOLDER:
Michael J. Dalsin

M. J. DALSIN COMPANY OF SOUTH DAKOTA, INC.
By: Michael J. Dalsin
President

STOCKHOLDER:
Michael J. Dalsin

NU-TEC ROOFING CONTRACTORS, INC.

By: Bruce Bubenzer
President

STOCKHOLDERS:
Bruce Bubenzer
Dorwin Burdine
Michael Hutchings
Stephen Ball
Jeffrey Bubenzer

SEYFORTH ROOFING COMPANY, INC.

By: Dan B. Hand
President

STOCKHOLDER:
Dan B. Hand
<PAGE>
SRC, INC.

By: Dan B. Hand

STOCKHOLDER:
Dan B. Hand

SEYFORTH ROOFING, S.A. DE CV

By: Dan B. Hand

STOCKHOLDERS:
Dan B. Hand
Seyforth Roofing Co., Inc.
By: Dan B. Hand

SUTTER ROOFING COMPANY OF FLORIDA

By: Stephen F. Sutter
President

STOCKHOLDER:
Stephen F. Sutter

SUTTER ROOFING COMPANY OF S.W. FLORIDA

By: Stephen F. Sutter
President

STOCKHOLDERS:
Stephen F. Sutter
Douglas C. Sutter
Bradley W. Sutter

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports listed below included in or made part of this registration statement on
Form S-1 to be filed on or about July 24, 1998:

INCOM Roofing Services, Inc....................... July 20, 1998

Beta Construction Company and Affiliate........... June 18, 1998

D. C. Taylor Co................................... June 5, 1998

Seyforth Roofing Company, Inc. and Affiliate...... June 22, 1998

Brazos Roofing International of South Dakota,
Inc. and Affiliate.............................. June 22, 1998

Nu-Tec Roofing Contractors, Inc................... June 5, 1998

Evans Service Company, Inc. and Subsidiaries...... June 4, 1998

Burns & Scalo Roofing Company, Inc., Cuddy Roofing
Company, Inc. and Scalo, Inc.................... June 5, 1998

Chamberlin Waterproofing & Roofing Systems, Inc....... June 11,
1998

Boone Brothers Roofing, Inc....................... June 5, 1998

Sutter Roofing Company of Florida and Sutter Roofing
Company of SW Florida........................... June 5, 1998

M. J. Dalsin Company, Inc. and M. J. Dalsin Company
of South Dakota, Inc............................ June 5, 1998

ARTHUR ANDERSEN LLP

Houston, Texas
July 20, 1998

<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM INCOM ROOFING SERVICES, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 103,000
<PP&E> 6,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 109,000
<CURRENT-LIABILITIES> 108,000
<BONDS> 0
0
0
<COMMON> 26,000
<OTHER-SE> (25,000)
<TOTAL-LIABILITY-AND-EQUITY> 109,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>