<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-K

(Mark One)


/ X /    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934    [FEE REQUIRED]

For the fiscal year ended December 31, 1997

                                      OR


/   /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934    [NO FEE REQUIRED]

For the transition period from                            to

                         Commission file number 1-8547

                            LINCORP HOLDINGS, INC.
            (Exact name of registrant as specified in its charter)

          DELAWARE                                     23-2161279
(State or Other Jurisdiction of         (I.R.S. Employer Identification Number)
 Incorporation or Organization)

     245 Park Avenue
    New York, New York                                     10167
(Address of Principal Executive                          (Zip Code)
        Offices)

       Registrant's Telephone Number,
           Including Area Code:                        (212) 867-3800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class                  Name of each exchange on which registered
Common Stock, par value $.01 per share                 NONE


<PAGE>


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such requirements for the past 90 days.

                  Yes   X                       No

<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not considered herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

The Company's common stock, which is traded over the counter, had no
identifiable transactions during 1997 and through February 27, 1998. Based on
the last identifiable common stock transaction, the aggregate market value of
the Company's common stock held by non-affiliates of the registrant would be
an indeterminate nominal amount. On February 27, 1998, there were 1,730,559
shares of registrant's common stock outstanding.

                      Documents Incorporated by Reference

     See Item 14 (c) for a listing of exhibits incorporated by reference.


<PAGE>

                                    PART I

Items  1 and 2.                  Business and Properties
--------------                   -----------------------


Recent Developments

         At December 31, 1997, the Company had approximately $170.8 million of
principal and accrued interest (the "Indebtedness") outstanding under its
various debt obligations. The Company's parent company, Unicorp Energy
Corporation ("UEC"), holds all of the Company's Indebtedness. The Company is
in payment default under several of the debt obligations comprising the
Indebtedness. The Indebtedness is secured by a senior security interest in all
of the Company's assets. See Note 5 to the Company's Consolidated Financial
Statements.

         The Company's sources of funds during the year ended December 31,
1997, and to date, have been primarily from it's previously existing cash
balances and borrowings from UEC. The assets being utilized to fund the
Company's operations are part of the collateral package securing the Company's
Indebtedness. Unless the Company's lender continues to defer in realizing on
the pledged collateral and allow the Company to utilize the proceeds from such
collateral to fund its day to day operating expenses, the Company will be
unable to continue as a going concern. The Company hopes that it will be able
to continue as a going concern so that it may seek out opportunities which,
among other matters, will allow it to realize on its intangible assets and tax
attributes. As of December 31, 1997, the Company's stockholders' deficit was
$173.0 million.

Real Estate and Mortgage Loan Transactions

         During the second quarter of 1997, the Company sold its wholly-owned
subsidiary, DB Holdings, Inc. ("DBH") for $50,000. At the time of sale, DBH's
liabilities exceeded its assets by approximately $96,000, resulting in a gain
on the sale of approximately $146,000.

         During the third quarter of 1997 the Company sold its interest in the
Colorado State Bank Building (the "CSBB") to one of the other owners of CSBB
(the "Purchaser") in exchange for $16.5 million of the Company's outstanding
debt ($12.6 million in principal and $3.9 million in accrued interest) which
the Purchaser acquired from UEC. As of the date of sale, the Company's
recorded net book value for the CSBB was $9.9 million and therefore the gain
on the sale was approximately $6.6 million.

         During the fourth quarter of 1997, the Company made a $.6 million
secured first mortgage loan to Republic Development Co. (the "Republic
Mortgage Loan") for the purpose of developing a commercial real estate
property. The Republic Mortgage Loan bears interest at 15% and matures May 19,
1998. The Company has the option, which expires April 17, 1998, to convert the
Republic Mortgage Loan into a 50% ownership interest in the underlying real

estate property. To finance this loan, the Company borrowed funds from UEC.
The UEC borrowing was in the form of a $602,000 discounted note (the "UEC
Republic Note") which matures on May 19, 1998 in the amount of $620,000 and is
secured by the Republic Mortgage Loan.

                                     -1-
<PAGE>

Employees

         The Company presently has no compensated employees.

Item 3.      Legal Proceedings

         A tax assessment (the "Assessment") has been made by the Commonwealth
of Massachusetts against a former wholly-owned subsidiary of the Company,
which was dissolved in July 1990. The Massachusetts Department of Revenue (the
"MDR") stated, in a notice dated February 15, 1992, that the amount due and
owing was $1.2 million and it is believed that additional interest and/or
penalties have been imposed with regard to the Assessment. On November 29,
1993, an Offer in Settlement (the "Offer") was forwarded to the MDR with
respect to the Assessment which was rejected by the MDR on October 26, 1995,
and there have been no subsequent developments on this matter since that date.
The ultimate outcome of the Assessment cannot be determined at this time.

Item 4.       Submission of Matters to a Vote of Security Holders

              Not Applicable.

                                     -2-

<PAGE>

                                    PART II

Item 5.       Market Price of and Dividends on the Registrant's Common Equity
              ----------------------------------------------------------------

              and Related Stockholder Matters
              -------------------------------

         The Company's Common Stock is traded over the counter. During 1997,
there were no identifiable stock transactions.

         On February 27, 1998, there were approximately 765 stockholders of
record of the Company's Common Stock. There were no dividends paid on the
Company's Common Stock in 1997 and 1996.

Item 6.      Selected Financial Data

<TABLE>
<CAPTION>
                                                                             Year ended December 31,
                                                     ------------------------------------------------------------------
                                                         1997          1996          1995          1994          1993
                                                     ----------    -----------    ----------    -----------    --------
                                                                             (Dollars In Thousands)
<S>                                                  <C>           <C>            <C>           <C>          <C>
INCOME STATEMENT DATA

Interest income...................................   $       19    $       23     $      144    $       47   $        27
Interest expense..................................      (12,418)      (13,720)       (13,316)      (10,751)      (10,786)
Rental income.....................................          357         1,169            487            --            --
Gain on sale of real estate assets................        6,631         1,033             --            --            --
Other income......................................          236           479            253         1,537           176
Other expense.....................................         (190)         (160)          (312)         (375)         (598)
                                                     -----------   ----------     ----------    ----------     ---------
Loss from continuing operations before
     income taxes.................................       (5,365)      (11,176)       (12,744)       (9,542)      (11,181)
Provision for income taxes........................           16            17             23           300           300
                                                     ----------    ----------     ----------    ----------     ---------
Loss from continuing operations...................       (5,381)      (11,193)       (12,767)       (9,842)      (11,481)
Recovery on writedown of investment in the
     Lincoln Savings Bank.........................           --            --             --         6,143            --
Decrease in estimated writedown of assets from
     discontinued real estate operations..........           --            --             --         4,510            --
Reversal of provision for income taxes relating
     to discontinued operations...................           --            --             --         3,370            --
                                                     ----------    ----------     ----------    ----------     ---------
Net income (loss).................................   $   (5,381)   $  (11,193)    $  (12,767)   $    4,181   $   (11,481)
                                                     ===========   ===========    ===========   ==========   ===========
</TABLE>

                                     -3-

<PAGE>


Item 6.      Selected Financial Data, continued

<TABLE>
<CAPTION>

                                                                        At or for the Year ended December 31,
                                                     -------------------------------------------------------------------------
                                                         1997           1996             1995           1994            1993
                                                     -----------     ---------      ------------    -----------    -----------
                                                                      (In Thousands, Except Per Share Amounts)
<S>                                                  <C>             <C>            <C>            <C>             <C>

INCOME STATEMENT DATA

Per share amounts

Basic income (loss) per share of common stock.....   $     (3.11)    $  (6.47)      $     (7.38)   $       2.42    $      (6.63)
                                                     ============    =========      ============   ============    ============

Weighted average shares of common stock

     outstanding..................................          1,731          1,731           1,731          1,731            1,731
                                                     ============    ===========    ============   ============    =============

BALANCE SHEET DATA

Total assets......................................   $      1,535    $    23,978    $     16,181   $        660    $       1,204
                                                     ============    ===========    ============   ============    =============

Other borrowed funds, excluding accrued interest..   $     97,814    $   106,614    $    105,215   $     97,229    $     102,301
                                                     ============    ============   ============   ============    =============

Total stockholders' deficit.......................   $   (173,036)   $  (167,655)   $   (161,666)  $   (148,899)   $    (153,080)
                                                     =============   ============   ============   ============    =============
</TABLE>

                                     -4-

<PAGE>


Item 7.      Management's Discussion and Analysis of Financial Condition and
             Results of Operations

         LIQUIDITY AND GOING CONCERN

             At December 31, 1997 the Company had approximately $170.8 million
of principal and accrued interest (the "Indebtedness") outstanding under its
various debt obligations. The Company's parent company, Unicorp Energy
Corporation ("UEC"), holds all of the Company's Indebtedness. The Company is
in payment default under several of the debt obligations comprising the
Indebtedness. The Indebtedness is secured by a senior security interest in all
of the Company's assets. See Note 5 to the Company's Consolidated Financial
Statements.

         The Company's sources of operating funds during the year ended
December 31, 1997, and to date have been primarily from it's previously
existing cash balances and borrowings from UEC. The assets being utilized to
fund the Company's operations are part of collateral package securing the
above described credit facilities. Unless the Company's lender continues to
defer in realizing on the pledged collateral and allow the Company to utilize
the proceeds from such collateral to fund its ongoing operations, the Company
will be unable to continue as a going concern.

RESULTS OF OPERATIONS

1997 Compared to 1996

         For the year ended December 31, 1997, the Company had a net loss of
$5.4 million compared to a net loss of $11.2 million for the year ended
December 31, 1996. Excluding the gains on sale of real estate assets of $6.6
million in 1997 and $1.0 million in 1996, the comparative net loss for 1997
and 1996 were $12.0 million and $12.2 million, respectively.

         Excluding the gains on sale of real estate assets, total income for
1997 decreased $1.1 million compared to 1996. This decrease is primarily due
to a $.8 million decrease in rental income. The Company's rental income was
generated solely by a subsidiary it sold as of April 30, 1997, which accounts
for the total rental income variance.

         Interest expense decreased $1.3 million primarily as the result of
the Company's debt decreasing $24.8 million during the year.

                                     -5-

<PAGE>


1996 Compared to 1995

         For the year ended December 31, 1996, the Company had a net loss of
$11.2 million compared to a net loss of $12.8 million for the year ended

December 31, 1995.

         Total income for 1996 increased $1.8 million to $2.7 million. The
increase in total income is primarily due to a $1.0 million gain recognized on
the sale of one real estate asset and a $.7 million increase in rental income.
The increase in rental income is attributable to the acquisition of a land
lease during the second quarter of 1996.

         Interest expense increased $.4 million. This increase reflects $.8
million in new interest on the debt incurred to finance a 1996 second quarter
land lease acquisition, offset by a $.4 million decrease in interest relating
to two notes that were restructured as of September 30, 1996.

FINANCIAL POSITION

Material Changes During 1997

         As of September 30, 1997, the Company sold its interest in the
Colorado State Bank Building (the "CSBB") in exchange for $16.5 million of the
Company's outstanding debt ($12.6 million principal and $3.9 million in
accrued interest). The CSBB had a recorded net book value of $9.9 million at
the date of sale.

         On April 30, 1997, the Company sold its wholly-owned subsidiary, DB
Holdings, Inc. thus reducing its consolidated assets and liabilities by $13.1
million and $13.2 million, respectively.

         There were no other significant changes in the Company's financial
position since December 31, 1996.

Item 8.      Financial Statements and Supplementary Data

         The Financial Statements of the Company are set forth in Part IV on
pages F-1 to F-13 and incorporated herein by reference. See "Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K" for a
complete list of Financial Statements and Financial Statement Schedules.

Item 9.      Changes In and Disagreements with Accountants on Accounting and
             Financial Disclosure

             None.

                                     -6-

<PAGE>


                                   PART III

Item 10.     Directors and Executive Officers of the Registrant

Directors and Executive Officers

         The term of each director is for one year and thereafter until his

successor shall have been elected and qualified. The Company's executive
officers are elected by, and serve at the discretion of the Board of
Directors.

         The following table sets forth certain information with respect to
each director and executive officer of the Company on March 23, 1998.



                                                               Service with
Name                     Age      Position with Company        Company from

George S. Mann           65       Chairman of the Board (1)         1981

Ronald W. Cantwell       54       Director (1) (2) and              1996
                                  Executive Vice President

Ian G. Cockwell          50       Director                          1994

William Kirschenbaum     53       Director (2)                      1982

Ralph V. Marra           60       Director                          1994

Jack R. Sauer            45       President                         1996



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

(1)      Member of the Executive Committee.
(2)      Member of the Audit Committee.


                                     -7-

<PAGE>


         George S. Mann has served as Chairman of the Board since 1981, and as
President from 1989 through August, 1996. He served as Chairman of the Board
of UEC from 1983, until June 1990, and now serves as a Director.

         Ronald W. Cantwell has been the President and Director of The Catalyst
Group, Inc. since October, 1988. He is also the President, Director and owner
of VC Holdings, Inc, which is the managing member of Trilon Dominion Partners,
LLC. Mr. Cantwell is also a Director of Shepherd Surveillance Solutions, Inc.,
Morrison International, Inc., EPL Technologies, Inc., Wilshire Technologies,
Inc. and Nutricept, Inc. He has been the Executive Vice President of the
Company since 1995 and a Director since August, 1996.

         Ian G. Cockwell has been President of Westcliff Management Services
Inc. since prior to 1988, and UEC since 1992. He has been a Director of the
Company since November 1994.


         William Kirschenbaum has been the Chairman of the Board of Hamilton
Financial Services Corporation, successor to Hamilton Savings Bank, since
prior to 1988.

         Ralph V. Marra has been the Director of Planning at New Plan Realty
Trust since December 1997. From October 1994 through December 1997 he was the
Senior Managing Director of Grubb and Ellis Inc. He was the Chief Financial
Officer of Lincoln Savings Bank F.S.B. ("Lincoln") from November 1989, until
October of 1994, and was the Chief Accounting Officer and Treasurer of Lincoln
from December 1988, through November 1989. From March 1988, to December 1988,
Mr. Marra was the Chief Administrative Officer of Lincoln. From August 1984,
to December 1993, he was a Senior Vice President of the Company and from March
1987, until December 1993, he was the Company's Treasurer. He has been a
Director of the Company since November 1994.

         Jack R. Sauer has been the Vice President and Director of The
Catalyst Group, Inc. since February, 1990. He is also the Vice President and a
Director of VC Holdings, Inc., which is the managing member of Trilon Dominion
Partners, LLC. Mr. Sauer is also a Director of Shepherd Surveillance, Inc. He
has been the President of the Company since August, 1996.

                                     -8-

<PAGE>


Compliance with Section 16(a) of the Exchange Act

         Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons who own more than 10% of the Company's Common Stock to
file initial reports of ownership and reports of changes of ownership (Forms
3, 4 and 5) of the Company's Common Stock with the Securities and Exchange
Commission (the "SEC"). Officers, directors and beneficial owners of more than
10% of the Company's Common Stock are required by the SEC regulations to
furnish the Company with copies of such forms that they file.

         To the Company's knowledge, based solely on the Company's review of
the copies of such reports received by the Company, all Section 16(a) filing
requirements applicable to its officers, directors and beneficial owners of
more than 10% of the Company's Common Stock, were complied with.

Directors Remuneration

         Directors of the Company receive a quarterly fee of $1,500 in
addition to a fee of $600 for actual attendance at each directors' or
committee meeting. For meetings of any committee held on the same day as any
meeting of the Board of Directors, the fee for attendance at the committee
meetings is $300. Where meetings of the Board or committees thereof are held
by telephone conference, directors receive a fee of $150. Fees paid to all
directors for attendance at the Board and committee meetings during the year
ended December 31, 1997, totaled approximately $31,000.

Directors Meeting and Committees


         The Board of Directors of the Company held 4 meetings during the
fiscal year ended December 31, 1997. During fiscal year 1997, four of the
directors attended at least 75% of the meetings and one director attended 50%
of the meetings.

         The Board of Directors has a standing Audit Committee which
represents the Board of Directors in its relations with the Company's
independent accountants and oversees the Company's compliance with operating
procedures and policies. This committee also approves the scope of the
Company's financial statement examinations, monitors the adequacy of the
Company's internal controls and reviews and monitors any other activity that
the committee deems necessary or appropriate. The Company does not have a
standing Compensation or Nominating Committee. The Executive Committee is
authorized to act on behalf of the Board of Directors between Board meetings
and to have such powers and duties which may lawfully be assigned to it under
Delaware law.

                                     -9-

<PAGE>

         The only Committee which held a meeting during the Company's fiscal
year ended December 31, 1997, was the Audit Committee which held one meeting.

Item 11.     Executive Compensation

         No executive officer of the Company, received any compensation for
their services during any of the fiscal years ended December 31, 1997, 1996 or
1995.

         No compensation committee report or performance graph is included
herein because none of the executive officers draws any salary from the
Company.

                                     -10-

<PAGE>


Item 12.       Security Ownership of Directors, Nominees and Officers and Other
               Principal Holders of the Company's Voting Securities

         The table below sets forth information concerning the shares of the
Common Stock beneficially owned by the individual directors, all directors and
officers of the Company as a group without naming them and each person who is
known by the Company to be the beneficial owner of more than five percent of
the Common Stock as of February 28, 1997. The address of each of the directors
is c/o Lincorp Holdings, Inc., 245 Park Avenue, 28th Floor, New York, New York
10167. The address of UEC is 151 Bay Street Suite 2320 Toronto, Ontario,
Canada M5J251.

                                    Shares of
                                  Common Stock
                                  Beneficially

      Name of                      Owned as of            Percent of
 Beneficial Owner               February 27, 1998            Class


Unicorp Energy                       1,286,886                74.3%
  Corporation (1)

Ian G. Cockwell (1)                  1,286,886                74.3%

William Kirschenbaum                     3,767                    *

All officers and directors           1,290,653                74.6%
as a group (4 persons) (1)



---------------
*        Less than 1%

(1)      The stockholdings indicated for Mr. Cockwell are all owned directly by
         UEC.  Mr. Cockwell disclaims beneficial ownership of all such shares.

Item 13.     Certain Relationships and Related Transactions

         See Items 1 and 2 - Real Estate and Mortgage Loan Transactions.

                                     -11-

<PAGE>

                                    PART IV

Item 14.

<TABLE>
<CAPTION>
Exhibits, Financial Statement Schedules and Reports on Form 8-K

                                                                                               Page
<S>                                                                                            <C>
       (a) (1)  Consolidated Financial Statements

                Report of Independent Accountants.......................................        F-1

                Consolidated Balance Sheets as of

                  December 31, 1997 and 1996............................................        F-2

                Consolidated Statements of Operations for the years ended

                  December 31, 1997, 1996, and 1995.....................................        F-3

                Consolidated Statements of Changes in Stockholders' Deficit


                  for the years ended December 31, 1997, 1996, and 1995.................        F-4

                Consolidated Statements of Cash Flows for the years ended

                  December 31, 1997, 1996 and 1995......................................        F-5

                Notes to Consolidated Financial Statements..............................        F-7

                All schedules have been omitted because they are not required
                or because the required information is contained in the
                consolidated financial statements or notes thereto.

       (b) Reports on Form 8-K

                None.

       (c) Exhibits

                                                                                               Page

        3.1    Restated Certificate of Incorporation of the Company,                            *
               as amended to date (incorporated by reference to Exhibit 3.1 to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 1987).
</TABLE>

                                     -12-

<PAGE>

<TABLE>
<S>                                                                                          <C>
        3.2    By-Laws of the Company as amended to date (incorporated by                       *
               reference to Exhibit 3.2 to the Company's Annual Report Form
               10-K for the year ended December 31, 1986).

      10.01    Subscription and Purchase Agreement dated December                               *
               31, 1987, between the Company and UEC (incorporated by reference
               to Exhibit 2.2 to the Company's Current Report Form 8-K dated
               January 14, 1988).

      10.02    Letter Agreement re: Line of Credit dated November 30, 1989,                     *
               between UEC and the Company (incorporated by reference to
               Exhibit 10.23 to the Company's Annual Report on Form 10-K for
               the year ended December 31, 1989).

      10.03    Revolving Demand Note dated November 30, 1989,                                   *
               from the Company to UEC (incorporated by reference to Exhibit
               10.24 to the Company's Annual Report on Form 10-K for the year
               ended December 31, 1989).

      10.04    Consulting Agreement dated as of February 13, 1990,                              *
               between the Company and Coscan Inc. (incorporated by reference
               to Exhibit 10.27 to the Company's Annual Report on Form 10-K for

               the year ended December 31, 1989).

      10.05    Letter Agreement re:  Operating Deficit Loan Agreement                           *
               dated February 13, 1990, between the Company and Coscan Inc.
               (incorporated by reference to Exhibit 10.28 to the Company's
               Annual Report on Form 10-K for the year ended December 31, 1989).

      10.06    Form of Promissory Note from the Company to Coscan Inc.                          *
               (incorporated by reference to Exhibit 10.29 to the Company's
               Annual Report on Form 10-K for the year ended December 31,
               1989).
</TABLE>

                                     -13-

<PAGE>

<TABLE>
<S>                                                                                          <C>
      10.07    Closing Agreement, dated as of July 23, 1990, among                              *
               the Company, Coscan Colorado Inc. ("CCI"), Coscan Colorado LHI
               Inc. and Coscan Commercial Limited Partnership, a California
               Limited Partnership ("Coscan California) (incorporated by
               reference to Exhibit 28.1 to the Company's Report on Form 8-K
               dated August 13, 1990).

      10.08    Closing Agreement, dated as of July 23, 1990, among the                          *
               Company, Coscan California Commercial Inc. ("CCC"), Coscan
               California LHI Inc. and Coscan Commercial Limited Partnership, a
               California Limited Partnership ("Coscan California) (incorporated
               by reference to Exhibit 28.2 to the Company's Report on Form 8-K
               dated August 13, 1990).

      10.09    Agreement of Limited Partnership of Coscan Commercial,                           *
               dated as of July 23, 1990 (incorporated by reference to Exhibit
               28.3 to the Company's Report on Form 8-K dated August 13, 1990).

      10.10    Agreement of Limited Partnership of Coscan Commercial,                           *
               dated as of July 23, 1990 (incorporated by reference to Exhibit
               28.3 to the Company's Report on Form 8-K dated August 13, 1990).

      10.11    Letter Agreement, dated as of July 23, 1990, among CCI,                          *
               CCC, the Company, Coscan Commercial and Coscan California,
               regarding loans by CCI and CCC (incorporated by reference to
               Exhibit 28.5 to the Company's Report on Form 8-K dated August 13,
               1990).

      10.12    $24,000,000 Secured Revolving Credit Agreement, dated                            *
               as of July 25, 1990 (the "Senior Credit Agreement"), among the
               Company, Hees International Bancorp Inc. ("Hees"), National Bank
               of Canada ("NBC") and NBC, as Agent (incorporated by reference to
               Exhibit 28.6 to the Company's Report on Form 8-K dated August 13,
               1990).


                                     -14-
<PAGE>


</TABLE>
<TABLE>
<S>                                                                                          <C>
      10.13    Amended and Restated Credit Agreement, dated as of July                          *
               July 25, 1990, between the Company and NBC (incorporated by
               reference to Exhibit 28.7 to the Company's Report on Form 8-K
               dated August 13, 1990).

      10.14    Letter Agreement, dated July 25, 1990, between UEC                               *
               and the Company regarding the revolving line of credit from UCC to
               the Company (incorporated by reference to Exhibit 28.8 to the
               Company's Report on Form 8-K dated August 13, 1990).

      10.15    Securities Pledge Agreement, dated as of July 25, 1990,                          *
               by the Company in favor of UEC (incorporated by reference to
               Exhibit 28.8 to the Company's Report on Form 8-K dated August 13,
               1990).

      10.16    Lincorp Pledge Agreement, dated as of July 25, 1990, by Lincorp                  *
               Inc. in favor of UEC (incorporated by reference to Exhibit
               28.10 to the Company's Report on Form 8-K dated August 13,
               1990).

      10.17    Subsidiaries Pledge Agreement, dated as of July 25, 1990,                        *
               by Unicorp Delaware I, Inc., Unicorp Delaware II, Inc. and ITT
               Missouri Corp. in favor of UEC (incorporated by reference to
               Exhibit 28.11 to the Company's Report on Form 8-K dated August 13,
               1990).

      10.18    Security Agreement, dated as of July 25, 1990, by the                            *
               Company in favor of UEC (incorporated by reference to Exhibit
               28.12 to the Company's Report on Form 8-K dated August 13, 1990).

      10.19    Agreement Relating to the Lincoln Savings Bank, FSB dated as                     *
               of December 31, 1992, among the OTS, the Company and certain
               other parties (incorporated by reference to Exhibit A to the
               Company's Current Report on Form 8-K dated January 20, 1993).

      10.20    Trust Agreement dated as of January 20, 1993, among the                          *
               OTS, the Company and certain other parties (incorporated by
               reference to Exhibit B to the Company's Current Report on Form 8-K
               dated January 20, 1993).
</TABLE>

                                     -15-

<PAGE>

<TABLE>
<S>                                                                                          <C>
      10.21    Consent Agreement dated March 4, 1994, among UEC,                                *
               Union Holdings, Inc., Lincorp, Inc., the Company, Hees

               International Bancorp, Inc., National Bank of Canada, Anthony M.
               Frank, as trustee, the Lincoln Savings Bank, FSB and Anchor
               Savings Bank FSB (incorporated by referenced to Exhibit 10.23 to
               the Company's Annual Report on Form 10-K for the year ended
               December 31, 1993).

      10.22    Loan Modification Agreement dated as of September 28,                            *
               1995, by and between Coscan, Inc. and the Company (incorporated by
               reference to Exhibit B to the Company's Report on Form 8-K dated
               September 28, 1995).

      10.23    Loan Modification Agreement dated as of September 28,                            *
               1995, by and between CCI and the Company (incorporated by
               reference to Exhibit C to the Company's Report on Form 8-K dated
               September 28, 1995.)

      10.24    Agreement dated as of September 5, 1995,by and among                             *
               CCI, the Company, Coscan Limited Partner Corporation, CCC, Coscan
               California Limited Partner Corporation and Coscan, Inc.

     22        Subsidiaries of the Company.
</TABLE>


---------------
*        Incorporated by reference.

                                     -16-

<PAGE>

                                  SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized in New York, New
York.

Dated:   March 26, 1998

                                           LINCORP HOLDINGS, INC.

                                           By:  s/ Jack R. Sauer
                                               ---------------------------
                                                Jack R. Sauer
                                                President

                                     -17-

<PAGE>

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Name                                         Title                                           Date

<S>                                          <C>                                          <C>
s/George S. Mann                             Chairman of the                              March 26, 1998
---------------------------------
George S. Mann                               Board of Directors
                                             (Principal Executive Officer)

s/Jack R. Sauer                              President                                    March 26, 1998
---------------------------------
Jack Sauer                                   (Principal Accounting Officer)

s/Ronald W. Cantwell                         Director                                     March 26, 1998
---------------------------------
Ronald W. Cantwell

s/Ian G. Cockwell                            Director                                     March 26, 1998
---------------------------------
Ian G. Cockwell

s/William Kirschenbaum                       Director                                     March 26, 1998
---------------------------------
William Kirschenbaum

s/Ralph V. Marra                             Director                                     March 26, 1998
---------------------------------
Ralph V. Marra
</TABLE>

                                     -18-

<PAGE>

          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders
Lincorp Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of Lincorp
Holdings, Inc. and subsidiary ("Company") as of December 31, 1997 and 1996, and
the related consolidated statements of operations, changes in stockholders'
deficit, and cash flows for each of the years in the three year period ended
December 31, 1997. These consolidtated 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.

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 our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Lincorp Holdings,
Inc. and Subsidiary as of December 31, 1997 and 1996, 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.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to
the finacial statements, the Comapny is in default on several of its credit
facilities and, at December 31, 1997, has $98.4 million of principal
indebtedness, and $72.4 million of accrued and unpaid interest. In addition, the
Company has a net capital deficiency of $173.0 million as of December 31, 1997.
These matters raise substanital doubt about the Company's ability to continue as
a going concern. The Company's plans in regard to these matters are also
described in Note 1. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ KPMG Peat Marwick LLP

New York, New York
February 20, 1998

    F-1

<PAGE>


                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                       ---------------------------------
                                                                            1997               1996
                                                                       --------------     --------------
                                                                            (dollars in thousands)
<S>                                                                    <C>                <C>

ASSETS
Cash............................................................       $           23     $          210
Investment in real estate and mortgage loans, net...............                1,512             23,608
Other assets....................................................                    -                160
                                                                       --------------     --------------
                                                                       $        1,535     $       23,978
                                                                       ==============     ==============


LIABILITIES  AND  STOCKHOLDERS'  DEFICIT

Liabilities:

   Debt secured by real estate and mortgage loans,

       including accrued interest...............................       $          606     $       16,812
   Other borrowed funds, including accrued interest.............              170,179            171,045
   Other liabilities............................................                3,786              3,776
                                                                       --------------     --------------
                                                                              174,571            191,633
                                                                       --------------     --------------

Commitments and contingent liabilities

Stockholders' deficit:
    Preferred stock, Series A;

       200 shares authorized;

       no shares issued and outstanding.........................                    -                  -
    Preferred stock, $.01 par value;
       10,000 shares authorized;

       no shares issued and outstanding.........................                    -                  -
    Common stock, $.01 par value;
       1,990,000 shares authorized;


       1,730,559 shares issued and outstanding..................                   17                 17
    Capital contributed in excess of par value..................              153,638            153,638
    Accumulated deficit.........................................             (326,691)          (321,310)
                                                                       --------------     --------------
                                                                             (173,036)          (167,655)
                                                                       --------------     --------------
                                                                       $        1,535     $       23,978
                                                                       ==============     ==============
</TABLE>

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

                                      F-2

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                  -------------------------------------------------
                                                                        1997              1996            1995
                                                                  --------------      ------------     ------------
                                                                                  (in thousands, except
                                                                                   per share amounts)
<S>                                                               <C>                 <C>              <C>
Income:
      Rental income.......................................        $          357      $      1,169     $        487
      Interest income.....................................                    19                23              144
      Gain on sale of real estate assets..................                 6,631             1,033                -
      Other income........................................                   236               479              253
                                                                  --------------      ------------     ------------
           Total income...................................                 7,243             2,704              884
                                                                  --------------      ------------     ------------

Expense:

      Interest expense....................................                12,418            13,720           13,316
      General and administrative expense..................                   190               160              312
                                                                  --------------      ------------     ------------
           Total expense..................................                12,608            13,880           13,628
                                                                  --------------      ------------     ------------

Loss before income taxes..................................                (5,365)          (11,176)         (12,744)

Provision for state and local income taxes................                    16                17               23
                                                                  --------------      ------------     ------------

Net loss..................................................        $       (5,381)     $    (11,193)    $    (12,767)
                                                                  ==============      ============     ============

Basic loss per share of common stock outstanding..........        $        (3.11)     $      (6.47)    $      (7.38)
                                                                  ==============      ============     ============

Weighted average shares of common stock...................                 1,731              1,731           1,731
                                                                  ==============      =============    ============
</TABLE>

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

                                     F-3

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                                                             Capital
                                                                                           contributed
                                                                      Common               in excess             Accumulated
                                                                       stock              of par value             deficit
                                                                ----------------       -------------------   -----------------
                                                                                     (dollars in thousands)
<S>                                                             <C>                    <C>                   <C>

Balances, December 31, 1994...............................      $             17       $       148,434       $       (297,350)

    Net loss..............................................                     -                     -                (12,767)
                                                                ----------------       ---------------       ----------------

Balances, December 31, 1995...............................                    17               148,434               (310,117)

    Debt forgiveness by parent company....................                     -                 5,204                      -

    Net loss..............................................                     -                     -                (11,193)
                                                                ----------------       ---------------       ----------------

Balances, December 31, 1996...............................                    17               153,638               (321,310)

    Net loss..............................................                     -                     -                 (5,381)
                                                                ----------------       ---------------       -----------------

Balances, December 31, 1997...............................      $             17       $       153,638       $       (326,691)
                                                                 ===============        ==============        ================
</TABLE>


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

                                      F-4

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                   -------------------------------------------------
                                                                       1997               1996             1995
                                                                   -------------     ------------    ---------------
                                                                                 (dollars in thousands)
<S>                                                                <C>               <C>               <C>

OPERATING ACTIVITIES

Net loss........................................................   $      (5,381)    $   (11,193)      $     (12,767)

Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
      Gain on sale of subsidiary................................            (146)              -                   -
      Gain on sale of real estate assets........................          (6,631)         (1,033)                  -
      Equity income from real estate partnership................             (60)           (254)                (26)
      Decrease in marketable securities.........................               -               -                 535
      Decrease (increase) in other assets.......................              74             (86)                274
      Increase (decrease) in other liabilities..................              10            (419)                694
      Decrease in income taxes payable..........................               -               -                (129)
      Increase in interest payable..............................          11,840          13,033               8,797
                                                                   -------------    ------------     ---------------


Net cash provided by (used in) operating activities.............            (294)             48              (2,622)
                                                                   --------------   ------------     ----------------


INVESTING ACTIVITIES

Proceeds from sale of subsidiary................................              50               -                   -
Proceeds from sale of real estate assets........................               -           6,649               6,930
Investment in real estate and mortgage loans....................            (745)           (498)             (3,450)
                                                                   --------------   -------------      --------------

Net cash provided by (used in) investing activities.............            (695)          6,151               3,480
                                                                   --------------   ------------       -------------
</TABLE>

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

                                      F-5

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                   --------------------------------------------------
                                                                       1997               1996             1995
                                                                   -------------     ------------      --------------
                                                                                 (dollars in thousands)
<S>                                                                <C>               <C>               <C>

FINANCING ACTIVITIES

Funds borrowed   ...............................................             802               -               8,877
Repayment of borrowed funds.....................................               -          (6,649)             (9,200)
                                                                   -------------     ------------      --------------

Net cash provided by (used in) financing activities.............             802          (6,649)               (323)
                                                                   -------------     -----------       --------------

Net increase (decrease) in cash.................................            (187)           (450)                535

Cash, beginning of year.........................................             210             660                 125
                                                                   -------------     -----------       -------------

Cash, end of year...............................................   $          23     $       210       $         660
                                                                   =============     ===========       =============

SUPPLEMENTAL DISCLOSURE OF CASH
      FLOW INFORMATION
Cash paid during the year for:

      Interest..................................................   $         579     $       706       $       4,519
      Income taxes..............................................              16              17                  23

Noncash investing and financing activities:

      Assets sold...............................................   $      22,989    $          -       $           -
      Liabilities sold..........................................          13,210               -                   -
      Debt repurchased..........................................          16,506               -                   -
      Fair value of assets acquired.............................               -          13,025                   -
      Liabilities assumed.......................................               -          13,025                   -
      Debt forgiveness..........................................               -           5,204                   -
</TABLE>

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

                                      F-6

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - LIQUIDITY AND GOING CONCERN

         At December 31, 1997, Lincorp Holdings, Inc. (the "Company") had
approximately $170.8 million of principal and accrued interest
(the"Indebtedness") outstanding under its various debt obligations. The
Company's parent company, Unicorp Energy Corporation ("UEC") holds all of the
Company's Indebtedness. The Company is in payment default under several of the
debt obligations comprising the Indebtedness. The Indebtedness is secured by a
senior security interest in all of the Company's assets.

         The Company's sources of operating funds during the year ended
December 31, 1997, and to date, have been primarily from it's previously
existing cash balances and borrowings from UEC. The assets being utilized to
fund the Company's operations are part of collateral package securing the
above described credit facilities. Unless the Company's lender continues to
defer in realizing on the pledged collateral and allow the Company to utilize
the proceeds from such collateral to fund its ongoing operations, the Company
will be unable to continue as a going concern.

NOTE 2 - REAL ESTATE OPERATIONS

         During the second quarter of 1997, the Company sold its wholly-owned
subsidiary, DB Holdings, Inc. ("DBH") for $50,000. At the time of sale, DBH's
liabilities exceeded its assets by approximately $96,000, resulting in a gain
on the sale of approximately $146,000.

         During the third quarter of 1997, the Company sold its interest in
the Colorado State Bank Building (the "CSBB") to one of the other owners of
CSBB (the "Purchaser") in exchange for $16.5 million of the Company's
outstanding debt ($12.6 million in principal and $3.9 million in accrued
interest) which the Purchaser acquired from UEC. As of the date of sale, the
Company's recorded net book value for the CSBB was $9.9 million and therefore
the gain on the sale was approximately $6.6 million.

         During the fourth quarter of 1997, the Company made a $0.6 million
secured first mortgage loan to Republic Development Co. (the "Republic
Mortgage Loan") for the purpose of developing a commercial real estate
property. The Republic Mortgage Loan bears interest at 15% and matures May 19,
1998. The Company has the option, which expires April 17, 1998, to convert the
Republic Mortgage Loan into a 50% ownership interest in the underlying real
estate property. To finance this loan, the Company borrowed funds from UEC.
The UEC borrowing was in the form of a $602,000 discounted note (the "UEC
Republic Note") which matures on May 19, 1998 in the amount of $620,000 and is
secured by the Republic Mortgage Loan.

         During the second quarter of 1996, the Company acquired through DBH,
a parcel of land (the "DBH Land") underlying a commercial real estate project
in Minneapolis, Minnesota. The DBH Land was acquired for $13.0 million, with

the total purchase price

                                     F-7

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

funded from a senior unsecured obligation of DBH (the "DBH Loan"). The DBH
Loan was with a company affiliated to UEC.

         During the third quarter of 1996, the Company sold its real estate
investment in the Montgomery St. Land Lease ("MSLL") for $6.6 million
resulting in a gain of $1.0 million. The proceeds from this sale were used to
paydown a portion of the secured debt (the "MSLL Note").

         During 1995, the Company made a $.9 million loan to a developer to
refinance land previously purchased by the developer for residential home
development. During the fourth quarter of 1996, the Company contributed its
$.9 million loan to a newly formed limited partnership (the "Cambridge Park
Partnership") in exchange for a 28.125% limited partnership interest. The
purpose of the Cambridge Park Partnership is to develop, construct, and sell
approximately 232 townhouse units. At December 31, 1997, the project is still
in the construction phase. Under the terms of the partnership agreement, the
Company is to receive a 18% priority return on its investment. Depending upon
when the project is sold, the Company will also receive between approximately
8.4% and 14% of any profits from the partnership. The Company uses equity
accounting to account for it's interest in this partnership.

         The following summarizes the Company's net investment in real estate
and mortgage loans:

                                                   December 31,
                                    -----------------------------------------
                                         1997                       1996
                                    --------------             --------------

                                              (dollars in thousands)

     CSBB                           $            -             $        9,683
     DBH Land                                    -                     13,025
     Cambridge Park Partnership                900                        900
     Republic Mortgage Loan                    612                          -
                                    --------------             --------------
                                    $        1,512             $       23,608
                                    ==============             ==============


                                     F-8

<PAGE>


                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - DEBT RESTRUCTURING

         During the fourth quarter of 1996, the Company and UEC agreed to
restructure certain debt between the companies. This debt restructuring, which
was effective September 30, 1996, dealt with two notes held by UEC, the CSBB
Note and the MSLL Note, and forgave all interest accrued on these two notes as
of September 30, 1996, and through February 6, 1997. UEC also forgave a
portion of the principal of each note. For accounting purposes, the total of
the principal and interest forgiven ($3.0 million on the CSBB Note and $2.2
million on the MSLL Note), has been recorded as a capital contribution by UEC
in the fourth quarter of 1996. After the restructuring, the new principal
amount owing as of September 30, 1996, on the MSLL Note and the CSBB Note was
$1.4 million and $3.6 million, respectively. The terms of the two notes were
also changed to reflect an extension of the principal and interest maturity
date to June 30, 2005, and a decrease in the interest rate to 6.38%. See Note
5.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INCOME TAXES

         Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of change in tax rates is recognized in
income in the period that includes the enactment date.

USE OF ESTIMATES

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

LONG-LIVED ASSETS

The Company follows the Financial Accounting Standards Board issued 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."
This statement establishes the recognition and measurement standards related
to the impairment of long-lived assets.

                                  F-9

<PAGE>


                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - DEBT SECURED BY REAL ESTATE AND MORTGAGE LOANS AND OTHER BORROWED FUNDS

         The Company's debt secured by real estate and mortgage loans are as
follows:

                                               December 31,
                                    ----------------------------------
                                       1997                     1996
                                    -----------            -----------
                                          (dollars in thousands)

UEC Republic Note(a)........        $       606            $         -
CSBB Note (b)...............                  -                  3,628
DBH Loan (c)................                  -                 13,184
                                    -----------            -----------

                                    $       606            $    16,812
                                    ===========            ===========

(a)   See Note 2.

(b)   This was a $9 million promissory note line of credit with UEC which was
      secured by the Company's investment in CSBB and was used to fund the
      Company's share of any operating shortfalls of CSBB. As explained in
      Notes 2 and 3, the CSBB Note was restructured effective September 30,
      1996 and was part of the debt that was acquired by the Company in 1997
      in exchange for its investment in CSBB.

(c) This debt was sold as part of the sale of DBH in 1997. See Note 2.

The Company's other borrowed funds are as follows:

                                               December 31,
                                    ----------------------------------
                                       1997                     1996
                                    -----------            -----------
                                          (dollars in thousands)

Principal

Senior secured revolving credit
  facility (a)......................$    10,921            $    19,921
Subordinated term loan (b)..........     65,000                 65,000
Junior line of credit (c)...........     20,494                 20,294
MSLL Note (d).......................      1,399                  1,399
                                    -----------            -----------
                                         97,814                106,614
Accrued interest....................     72,365                 64,431

                                    -----------            -----------
                                    $   170,179            $   171,045
                                    ===========            ===========

                                     F-10

<PAGE>

                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(a)   At December 31, 1996, $12.0 million of the outstanding principal on this
      facility was held by UEC and during 1997, UEC acquired the remaining
      balance of this facility ($7.9 million).

      In connection with the 1997 sale of the Company's investment in CSBB,
      $9.0 million of the debt held by UEC was acquired from the Purchaser of
      CSBB. See Note 2.

      This debt facility expired in August 1991 and the Company has made no
      interest payments on this facility since its expiration.

(b)   This $65 million facility with UEC matured in August 1997, and calls for
      interest-only payments at a fixed rate of 11.4 %, payable semi-annually.
      The Company may prepay the loan at any time in whole or in amounts
      aggregating $1 million or any larger multiple of $1 million. The term
      loan includes convenants, among others, that require the maintenance of
      a minimum level of tangible net worth and limit aggregate levels of
      additional indebtedness. As a result of the losses incurred by the
      Company, it was not in compliance with the above covenants and it has
      not paid its semi-annual interest payment since August 1991.

(c) In November 1989, the Company entered into an agreement with UEC that
provided the Company with a line of credit in the aggregate amount of $30
million (amended to $25 million on July 25,1990) due on demand with an
interest rate of prime plus 3.5% and a standby fee of one quarter of one
percent of the unused portion of the commitment. During 1997, $.2 million was
borrowed under this line of credit.

(d) This note matures June 30, 2005, and has an interest rate of 6.38. See
Note 3.

         During 1997, the weighted average amount of total principal debt
outstanding was $111.5 million (1996 - $127.5 million) and the weighted
average interest cost of these funds during the year was 10.94 % (1996 - 10.76
%). The maximum amount of borrowed principal funds outstanding at any one time
during 1997 and 1996 was approximately $123.2 million and $133.2 million,
respectively.

         SFAS No. 107 "Disclosures about Fair Value of Financial Instruments"
requires entities to disclose the fair value of on and off-balance sheet
financial instruments. In view of the financial position of the Company at

December 31, 1997, management has determined it is not practicable to estimate
the fair value of debt and other borrowed funds.


                                     F-11

<PAGE>


                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES

         Set forth below is an analysis of the Company's provision for income
taxes for the years ended December 31, 1997, 1996 and 1995.



                                            1997         1996         1995
                                          ---------    ---------    ---------
                                                (dollars in thousands)

Current provision:

     State and local income taxes......   $      16    $      17    $      23
                                          =========    =========    =========


         A reconciliation of the total provision for income taxes to amounts
computed by applying the federal tax rate to income is as follows:

                                            1997         1996         1995
                                          ---------    ---------    ---------
                                                (dollars in thousands)

Computed at statutory rate.............   $  (1,824)   $  (3,800)   $  (4,333)
State and local income taxes...........          16           17           23
Effect of no benefit recognized for
  net operating losses.................       1,824        3,800        4,333
                                          ---------    ---------    ---------
Provision for income taxes.............   $      16    $      17    $      23
                                          =========    =========    =========

         The accompanying balance sheets reflect no deferred tax assets or
liabilities as of December 31, 1997 and 1996.

         As part of the sale of Lincoln, the Company's debt previously owed to
the National Bank of Canada ("NBC") of approximately $77 million plus accrued
and unpaid interest was transferred to UEC. The debt acquired from NBC by UEC
was acquired at a cost of $4.7 million. As a result of the transfer of the
debt to an affiliate of the Company, the amount of debt transferred which is
in excess of the face amount is, for federal and state income tax purposes,

considered forgiveness of debt of the Company and therefore is required to be
included as taxable income by the Company. The Company will not have to pay
federal or state taxes on this income because of its insolvency pursuant to
Internal Revenue Service Code Section 108 (Discharge of Indebtedness).
However, tax attributes of the Company (net operating loss carry forwards,
capital losses and built-in losses) will be reduced to the extent of the
forgiveness of indebtedness. Additionally, for federal tax purposes, the
Company may realize a bad debt loss of approximately $85 million, as well as
certain as yet undetermined and unrealized potential capital losses. The
Company has fully reserved any deferred tax benefit associated with the net
operating loss carryforwards.

         In May 1990, a subsidiary of the Company conveyed a property to one
of its lenders, in the form of a deed in lieu of foreclosure, resulting in a
tax assessment of $1.2

                                     F-12

<PAGE>


                     LINCORP HOLDINGS, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

million being made by the Massachusetts Department of Revenue (the"MDR") on
such transfer. Shortly thereafter, this subsidiary was dissolved but the tax
liability remains outstanding. On November 29, 1993, an Offer of Settlement
was forwarded to the MDR with respect to this assessment which was rejected by
the MDR on October 26, 1995, and there have been no subsequent developments on
this matter since that date. The ultimate outcome of this assessment cannot be
determined at this time.

                                     F-13

<PAGE>

                                 EXHIBIT INDEX
 -------------

Exhibit No.       Document Name

21                Subsidiaries of the Company