<PAGE>


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

                                     FORM 10-K/A

      [MARK ONE]
      [X]  Annual Report Pursuant to Section 13 or 15(d) 
           of the Securities Exchange Act of 1934

                     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

            For the transition period from _____________ to _____________.

                             Commission File No. 1-10489
                           --------------------------------
                                    KIMMINS CORP.
                           --------------------------------
                (Exact name of registrant as specified in its charter)

                      Delaware                        59-2763096
           ------------------------------- -------------------------------
              (State of Incorporation)             (I.R.S. Employer
                                                 Identification No.)

                    1501 Second Avenue, East, Tampa, Florida 33605
                (Address of registrant's principal executive offices,
                                 including zip code)
                           --------------------------------
                (Registrant's telephone number, including area code):
                                    (813) 248-3878

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

                                                   Name of Exchange
                 Title of Each Class             on Which Registered       
           ------------------------------- -------------------------------
            Common Stock, $.001 par value      New York Stock Exchange

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

                                         NONE

           Indicate  by a 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 filing requirements for the past 90 days.

                                Yes [ ]        No [X]<PAGE>


           Indicate by a check mark if disclosure of delinquent filers pursuant
      to  Item 405  Regulation S-K  is not  contained 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/A or any amendment to this Form 10-K/A.  [ ]

           As of March  31, 1998,  there were outstanding  4,447,397 shares  of
      Common Stock and 2,291,569 shares of Class  B common stock. The aggregate
      market value of the voting stock held by non-affiliates of the registrant
      as of March 31, 1998, was $10,851,000.

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

                         DOCUMENTS INCORPORATED BY REFERENCE:

                                         NONE<PAGE>


                                    KIMMINS CORP.

                                      Form 10-K/A

                                  TABLE OF CONTENTS

                                                                           Page
                                                                            No.
                                                                           ----
      PART I
        Item 1  Business  . . . . . . . . . . . . . . . . . . . . . . . . . . 1
        Item 2  Properties  . . . . . . . . . . . . . . . . . . . . . . . . . 7
        Item 3  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 8
        Item 4  Submission of Matters to a vote of Security Holders . . . . . 9

      PART II
        Item 5  Market for the Registrant's Common Equity and 
                 Related Stockholder Matters  . . . . . . . . . . . . . . . . 8
        Item 6  Selected Financial Data . . . . . . . . . . . . . . . . . . . 9
        Item 7  Management s Discussion and Analysis of 
                 Financial Condition and Results of Operations  . . . . . .  10
        Item 8  Financial Statements and Supplementary Data . . . . . . . .  20

      PART III
        Item 9  Changes in and Disagreements with Accountants on 
                 Accounting and Financial Disclosures . . . . . . . . . . .  34
        Item 10 Directors and Executive Officers of the Registrant  . . . .  34
        Item 11 Executive Compensation  . . . . . . . . . . . . . . . . . .  51
        Item 12 Security Ownership of Certain Beneficial 
                 Owners and Management  . . . . . . . . . . . . . . . . . .  55
        Item 13 Certain Relationships and Related Transactions  . . . . . .  56

      PART IV
        Item 14 Exhibits, Financial Statement Schedules 
                 and Reports on Form 8-K  . . . . . . . . . . . . . . . . .  57<PAGE>


          Note:  The  discussions in  this  Form 10-K/A contain forward looking
      statements that involve risks  and uncertainties. Statements contained in
      this  Form 10-K/A that are  not  historical  facts  are  forward  looking
      statements that are  subject to the  safe harbor created  by the  Private
      Securities Litigation Reform Act  of 1995. A number of  important factors
      could  cause  future results  of Kimmins  Corp.  and its  subsidiaries to
      differ materially and  significantly from those  expressed or implied  in
      past results and in any forward  looking statements made by, or on behalf
      of,  the  Company.  Factors  that  could  cause  or  contribute  to  such
      differences  include,  but  are  not  limited   to,  those  discussed  in
      "Business"  and  "Management's  Discussion   and  Analysis  of  Financial
      Condition  and  Results  of  Operations,"  as  well  as  those  discussed
      elsewhere in this Form 10-K/A. These factors include, without limitation,
      those listed in "Risk Factors" in the Company's Registration Statement on
      Form S-1 (File No. 33-12677).

                                        PART I
      Item 1.   Business

                                     THE COMPANY

          Kimmins Corp.  and  its subsidiaries  (collectively,  the  "Company")
      operates  two business  segments:   solid waste  management services  and
      specialty  contracting  services.    The  Company  provides  solid  waste
      management services through its TransCor Waste Services, Inc., subsidiary
      to commercial,  industrial, residential,  and municipal customers  in the
      state of Florida.  The Company provides specialty contracting services in
      the    south,    including   infrastructure    development;   underground
      construction; road  work; site  remediation services such  as excavation,
      removal  and disposal  of  contaminated soil;  facilities demolition  and
      dismantling; and asbestos abatement.

          The Company's services are as follows:

          *     Solid  waste   management  services  -   Transfer,  collection,
                resource  recovery,  transportation, disposal  of non-hazardous
                waste, and demolition of residential and commercial facilities.

          *     Specialty contracting services

                -    Earthwork and  utility contracting -  Earthwork activities
                     including   commercial  and  residential   site  work  and
                     earthwork  activities for  the phosphate  mining industry.
                     Utility  contracting,  including  infrastructure  services
                     such as sewer lines, water lines, and roads.  

                -    Industrial  demolition,  dismantling,   and  abatement   -
                     Dismantling of facilities or structures including offshore
                     oil  platforms; draining  liquid  wastes  from  pipes  and
                     tanks;   asbestos   removal,   cleanup,    disposal,   and
                     reinsulation;  removal of  above- and  below-ground tanks;
                     removal and disposal or sale of other equipment; and  sale
                     of scrap materials.

                -    Hazardous waste services - Containment  and excavation and
                     removal.<PAGE>


          The  Company's services may be used individually or in combination as
      required  to meet the specific needs of customers. The Company's business
      strategy  is  to draw  upon its  solid  waste management  and contracting
      experience  to  perform complex  projects  requiring  a  broad  range  of
      services.  Although each  of  the Company's  business  lines can  operate
      independently from the other related services, the  Company believes that
      integration  of  these  services  gives  it  a  competitive  advantage by
      relieving  the  customer  of the  burden  of  coordinating  activities of
      multiple contractors.

          During its initial years of operation, the Company  emphasized, among
      other services offered,  a broad  range of contracting  services. As  the
      need for waste-related  and specialty contracting  services has grown  in
      response  to heightened  public  concern and  government regulation,  the
      Company  has   used  its   capabilities  in  facilities   demolition  and
      dismantling  and in  the management of  complex construction  projects to
      become   increasingly   involved   in   solid   waste   management    and
      project-oriented activities.

          The  Company's  strategy  is to  continue  to  focus  on solid  waste
      management   services,  through   its  TransCor   Waste   Services,  Inc.
      subsidiary,  and   specialty   contracting  projects   for  private   and
      governmental customers. To date, the  Company's activities in solid waste
      management have consisted of opening and operating  resource recovery and
      transfer  facilities  in various  cities in  Florida  and bidding  on and
      obtaining  industrial, commercial,  and municipal solid  waste management
      contracts.  The Company  does  not consider  its  business to  be  highly
      seasonable.

      SERVICES

      Solid Waste Management Services:

          The Company, through  its majority-owned  subsidiary, TransCor  Waste
      Services, Inc. ("TransCor"), provides  solid waste management services to
      commercial,   industrial,  residential,   and  municipal   customers.  In
      connection with such  services, the Company  currently owns and  operates
      fully-permitted   construction  and   demolition  ("C&D")   transfer  and
      recycling  ("T&R") facilities in four of the largest metropolitan regions
      in  the state  of Florida.   The  Company has  also, pursuant  to several
      municipal contracts,  commenced the residential curbside  collection of a
      variety of already segregated recyclable forms of  solid waste, including
      such materials  as newspapers, cardboard, plastic, metals,  and glass. In
      addition to  its T&R operations, the Company collects and disposes of all
      types  of  non-hazardous  solid   waste  for  industrial  and  commercial
      customers  in  its T&R  regions.  The Company  also  provides residential
      garbage  collection services  for several  municipalities located  in Lee
      County  and  Hillsborough  County,  Florida.  In  addition,  the  Company
      provides demolition and other  related services with, and as  an economic
      complement to, its solid waste management services.<PAGE>

          The  Company's permits allow it to segregate  and recycle part of the
      C&D  debris  and  yard waste  accepted  at  its  T&R facilities  (thereby
      decreasing  the Company's landfill  disposal costs). The  Company has the
      capability  to haul  the  non-recyclable waste  economically to  outlying
      rural  landfills (where disposal fees generally are much lower than those
      charged by urban landfills). Consequently,  the Company can charge  lower
      rates at its  T&R facilities than those charged by  landfill operators in
      the same vicinities. In addition, disposal of debris at the Company's T&R
      facilities generally requires  less time  and results in  less damage  to
      waste collection vehicles  than landfill  disposal. As  a result,  third-
      party waste  hauling organizations,  including those in  competition with
      the Company's own  collection services, are provided strong  economic and
      other incentives for disposing of their C&D debris and yard  waste at the
      Company's T&R facilities.

          The  Company   provides  demolition   services  for   commercial  and
      residential customers. These services  include the razing and dismantling
      of facilities  and structures,  the recovery  of demolished  material for
      reuse and recycling, and the disposal  of non-recycled demolition debris.
      The  typical demolition projects of the Company are single and multistory
      urban  buildings and  small warehouses,  manufacturing plants,  and other
      facilities.  Typically,  the  Company  enters  into  separate  demolition
      contracts for each project, which are usually for a term of less than six
      months.

      Specialty Contracting:

      Earthwork and Utility Contracting Services

          Since 1988, the  Company has directed its focus  toward environmental
      and  utility contracting,  including  infrastructure  and  reconstructive
      service work.   The Company, through its  subsidiary, Kimmins Contracting
      Corp.,  continues  to  provide  comprehensive  non-hazardous  contracting
      services, including infrastructure services such as water and sewer  line
      installation,  replacement  and  repair   to  private  and   governmental
      customers  primarily  in the  State  of  Florida. Related  infrastructure
      development  includes   road  installation,  repair  and   widening,  and
      installation, repair and enhancement of drainage and wastewater services.

          Kimmins  Contracting  Corp.  has  recently  broadened  its  array  of
      services by  adding earthwork  operations.   These operations  are mainly
      directed toward  the private sector  in the state of  Florida and include
      land reclamation, dam construction and other earthwork operations for the
      phosphate  mining  industry, and  residential  and  commercial site  work
      services.

      Industrial Demolition, Dismantling, and Abatement Services

          The  Company, through  its subsidiaries,  Kimmins  Industrial Service
      Corp.,  Kimmins  Abatement  Corp.,  and  Kimmins   International,  offers
      demolition and dismantling of facilities or structures; asbestos removal;
      cleanup, disposal,  and reinsulation; removal of  above- and below-ground
      storage  tanks; removal and disposal or sale of industrial equipment; and
      the sale of equipment and scrap materials.<PAGE>

          Demolition  and  dismantling  projects  result from  the  closing  or
      retooling of facilities due to such factors as technological obsolescence
      of facilities,  corporate mergers  and consolidations of  operations, and
      the relocation  of manufacturing  operations to  low-cost labor areas  or
      areas  subject  to  less   stringent  regulation,  primarily  in  foreign
      countries.  In addition, site  remediation, particularly  in the  case of
      environmental contamination of a site, frequently requires the demolition
      or dismantling of a contaminated facility. 

          Dismantling  is  the  precise   disassembly  of  a  manufacturing  or
      production facility  on a piece-by-piece  basis to  recover equipment  as
      complete operating  units that  can be reinstalled  at another  location.
      Dismantling enhances the value of the facility above scrap market values.
      The Company  is  paid a  fee  for dismantling  services and,  usually,  a
      commission on the sale of non-relocated equipment.

          Demolition usually  requires wrecking services for  which the Company
      is paid a fee by the customer. In certain projects, the Company  may also
      receive additional revenue from selling the scrap material. The Company's
      services in  these areas include dismantling  large structures (including
      refineries,  and utility plants);  draining liquid wastes  from pipes and
      tanks; removing above-  and below-ground tanks; cleaning and disposing of
      contaminated equipment; and controlled demolition.

          Certain demolition  projects also  involve asbestos  removal, cleanup
      and disposal.  The Company  is continuing  to  de-emphasize its  asbestos
      abatement  services and  generally will  only perform  these services  in
      conjunction with other environmental demolition activities.

      Hazardous Waste Services

          The Company offers  a range of services for  the removal and disposal
      of  hazardous materials.  The  services offered  include construction  of
      containment  systems  and  the  excavation and  removal  of  contaminated
      material.  The Company has de-emphasized its hazardous waste services and
      will only perform these services  in conjunction with other environmental
      demolition activities.

          Containment.  Containment  systems  are constructed  to  prevent  the
      migration  of  hazardous   materials  from  a  site  to  the  surrounding
      groundwater,  surface  water, soil  or air.  While  containment can  be a
      permanent remedial solution, it is also used as an  interim step followed
      by excavation  and removal  or  on-site treatment.  The Company  installs
      containment  systems that  include containment  cells, surface  caps, and
      slurry walls.

          Excavation and removal. Excavation and removal involve the excavation
      of  contaminated materials  for  containment or  off-site disposal.  When
      off-site  disposal is  required, the  Company subcontracts  with licensed
      third  parties  for  the  transportation of  the  material  for  off-site
      disposal. As part of  its quality control program, the  Company regularly
      samples and analyzes excavated materials to verify that the  contaminants
      are consistent with those identified in the remediation plan.<PAGE>

      SEGMENT INFORMATION

          See Note 20 of the Notes to Consolidated  Financial Statements of the
      Company for  the years ended December  31, 1995, 1996, and  1997, for the
      Company's financial segment information. 

      PERFORMANCE BONDS

          The  Company is required to post performance bonds in connection with
      certain   asbestos  abatement,   waste   remediation,   demolition,   and
      construction contracts. For the year ended December 31, 1997, most of the
      Company's  revenue was derived  from contracts or  projects that required
      the Company  to post performance bonds.    The Company's  current bonding
      capacity  for   qualification  purposes  is  $60,000,000  for  individual
      projects and $120,000,000 in the aggregate. This capacity is not intended
      to be  a limitation nor a  commitment as to the  Company's bond capacity,
      but  rather guidelines  for qualification  purposes. It is  customary for
      surety bond companies to  underwrite each surety obligation individually;
      therefore, the potential  for more or less  capacity exists based on  the
      merits  of the obligation.  Historically, the Company has obtained surety
      bond support for individual  projects in the $53,000,000 range  while the
      aggregate  approached $100  million.   The Company  has  obtained bonding
      coverage in amounts up to $8,500,000 for environmental projects. However,
      some environmental  projects either do  not require  a bond or  require a
      bond for less than the complete contract price of the  project value. The
      Company  has obtained  bonding coverage  for environmental  projects more
      than  $8,500,000 as  a  result of  personal  surety bonds  or  collateral
      furnished  by  Mr. Francis  M. Williams,  President  of the  Company. Mr.
      Williams  has  no  obligation  to  provide  surety  bonds, collateral  or
      otherwise  to assist  the Company  in  connection with  bonding coverage.
      Management  believes that bonding coverages are adequate for the size and
      scope of projects being performed.

          In addition  to performance bond requirements,  some jurisdictions in
      the  future may  require  the posting  of  substantial bonds  or  require
      companies engaged  in solid  waste management  and related  activities to
      provide  other financial  assurances covering  the closure,  post-closure
      monitoring and  corrective activities for certain  solid waste management
      facilities.

      MARKETING

          The  Company, through its  majority-owned subsidiary,  TransCor Waste
      Services, Inc.,  generally obtains  solid waste collection  contracts for
      its  services  or for  the operation  of  certain solid  waste management
      facilities through  the process of competitive  bidding, purchase orders,
      or negotiations.  The Company's  marketing  efforts include  door-to-door
      sales, monitoring  trade  journals and  other  industry sources  for  bid
      solicitations by various entities,  including government authorities  and
      related instrumentalities,  and  responding to  such  bid  solicitations,
      which  may  include  requests  for proposals  ("RFPs")  and  requests for
      qualifications ("RFQs").  The Company  also  attempts to  be included  on
      lists  of qualified  bidders frequently  contained in  RFPs and  RFQs. In
      response  to an  RFP or  RFQ,  the soliciting  entity requires  a written
      response  within a specified period. Generally, in  the case of an RFP, a
      bidder  submits a proposal detailing its  qualifications, the services to
      be provided, and the cost of the services to the soliciting entity; then,
      such entity, based on its evaluation of the proposals submitted, awards<PAGE>

      the  contract to the successful  bidder. In the case  of an RFQ, a bidder
      submits  a response  describing  its experience  and qualifications,  the
      soliciting  entity  then  selects the  bidder  believed  to  be the  most
      qualified,  and then  negotiates  all  of  the  terms  of  the  contract,
      including  the cost of the  services. The Company's  single largest solid
      waste collection  contract was  derived through competitive  bidding, and
      the Company expects  that future significant  contracts will be  obtained
      through  competitive bidding.  The  Company has  also obtained  customers
      through recommendations and referrals from existing customers.

          The Company's  specialty contracting business results  primarily from
      customers  for whom the  Company has previously  provided services, prior
      customer references,  and from  direct marketing efforts.  In particular,
      the  Company believes its national reputation as a leading demolition and
      dismantling contractor  has contributed  significantly to its  ability to
      attract specialty service business.

          The   Company's  specialty  contracting   subsidiaries  direct  their
      marketing activities  through the  home  office in  Tampa, Florida.  This
      office  is located in  an area  with a  high concentration  of industrial
      facilities.  The Company  believes that  accurate  bidding is  crucial in
      securing  new contracting  projects and  completing them  profitably. The
      Company uses computerized bidding systems in conjunction with site visits
      to develop bids for contracting projects. While bid price is an important
      factor  in  obtaining contracts,  potential  clients  also  consider  the
      reputation,  experience,  safety record  and  financial  strength of  the
      bidders in awarding contracts.

      CUSTOMERS

          Customers for the Company's  solid waste management services  include
      local  and  regional  contractors,  municipalities,  institutions,  other
      third-party  waste  hauling  organizations,  and  local  businesses.  The
      primary  private  customers  for  the  Company's  specialty   contracting
      services  are Fortune  500 corporations  engaged in  heavy manufacturing,
      such  as  chemical mining,  petroleum,  petrochemical,  paper, and  steel
      companies as  well  as public  utilities  and  federal, state  and  local
      government  agencies.   For the years  ended December 31,  1995, 1996 and
      1997, the Company's specialty  contracting services segment earned  gross
      revenue   of  approximately  $3,953,000,  $14,884,000,  and  $10,648,000,
      respectively, on contracts with the Florida Department of Transportation.
      For the  years  ended December  31, 1995,  1996 and  1997, the  Company's
      specialty   contracting  services   segment  earned   gross  revenue   of
      approximately  $3,999,000, $2,562,000  and $25,061,000,  respectively, on
      contracts  with  IMC-Agrico Company,  a  phosphate  mining  company  with
      operations  on Florida's west coast. These  were the only customers whose
      purchases aggregated more than 10 percent of the Company's revenues.

          For the  year ended  December 31,  1997, 56 percent  and 44  percent,
      respectively, of  the Company's gross  revenue were derived  from private
      and governmental  customers,  respectively. Government  contracts,  which
      represent  a  significant portion  of  the Company's  gross  revenue, are
      subject to  legislation mandating a  balanced budget; delays  in funding;
      lengthy review processes for awarding  contracts; delay or termination of
      contracts at the convenience of the government; termination, reduction or
      modification of  contracts in the  event of  changes in the  government's
      policies or because of  budgetary constraints. Furthermore, increased  or
      unexpected  costs  could  result  in  losses  or  reduced  profits  under
      fixed-price government as well as commercial contracts.<PAGE>

      BACKLOG

          As of December  31, 1997, the  Company had  a backlog of  uncompleted
      projects  under contract aggregating approximately $119,220,000 (compared
      to  approximately  $137,372,000  as  of  December  31,  1996),  of  which
      approximately  $48,826,000  is  attributable  to  earthwork  and  utility
      contracting  services,  approximately   $2,709,000  is  attributable   to
      demolition   and  dismantling   services,  approximately   $1,100,000  is
      attributable   to   asbestos   abatement   services,   and  approximately
      $66,010,000 is  attributable  to  solid waste  management  services.  The
      Company anticipates  that it will recognize  approximately $66,000,000 of
      revenues  from  these projects  by the  end  of 1998  with  the remaining
      revenue to be recognized through the year 2004.

      COMPETITION

          Although  developments in  the solid  waste management  industry have
      resulted  in the  emergence  of  large  private and  public  solid  waste
      management companies and  in consolidating  trends in  the industry,  the
      solid waste  management business is characterized by intense competition.
      The Company believes that  no single company has a  dominant market share
      of the  solid waste management  business in the United  States, including
      Florida. Although  competition varies by  locality and type  of services,
      the Company's  principal sources  of competition  are local  and regional
      solid waste  management companies of varying size  that primarily provide
      collection  or disposal  services to  customers in  a limited  geographic
      area, large regional  and national solid waste management  companies that
      operate over  more  extensive  geographic areas  and  provide  completely
      integrated solid waste management services, own or operate disposal sites
      and engage  in  various transfer  and resource  recovery activities,  and
      counties  and   municipalities  that  maintain  their   own  solid  waste
      collection  and disposal  services  for residents  and businesses  in the
      locality. National  companies that  compete against the  Company include,
      among others, U.S.A. Waste,  Waste Management, Inc., and  Browning-Ferris
      Industries, Inc.

          The Company believes  that the principal  competitive factors in  the
      solid  waste  management   industry  are  price,   reputation,  services,
      managerial experience, financial assurance capability (particularly as it
      relates to municipal contracts), and range of services offered. 

          The  Company believes  that its  ability to  offer  a broad  range of
      specialty contracting  services provides it  with significant competitive
      advantage. Nevertheless,  the Company faces substantial  competition from
      national,  regional  and  local  competitors,  many  of  which  are  well
      established and have much greater marketing, financial, technological and
      other resources than the Company. 

          The  Company  believes  the  principal  competitive  factors  in  the
      specialty contracting services industry are safety, reputation, technical
      proficiency, surety bonding capability, managerial experience, price, and
      breadth of services offered.<PAGE>

      INSURANCE COVERAGE

          The  Company  currently  maintains  comprehensive  general  liability
      insurance,  with total coverage of  $51,000,000 for any single occurrence
      and $53,000,000 for  aggregate claims  relating to damage  to persons  or
      property.  These policies  cover all  activities of  the Company  and its
      subsidiaries  except for  its  asbestos-related  activities  and  certain
      non-asbestos  related  liabilities  such  as  pollution liability  damage
      (sudden or gradual) caused by the discharge or release of any irritant or
      contaminant. In addition, the Company has comprehensive general liability
      coverage that covers, among other things, specific asbestos-related risks
      up to $1,000,000.  In addition, the Company has obtained a $2,000,000 per
      occurrence/$2,000,000  aggregate blanket policy for contractors pollution
      liabilities and  can  obtain additional  coverage  of up  to a  total  of
      $6,000,000 as required on a project-by-project basis.

      GOVERNMENT REGULATION

          The  Company  is  subject to  an  extensive  and frequently  changing
      statutory  and   regulatory  framework  of  federal,   state,  and  local
      environmental,  health,  safety,  and  transportation  authorities, which
      framework  imposes  significant compliance  burdens  and  risks upon  the
      Company.  The Company believes it  is in substantial  compliance with all
      material federal, state, and local  laws governing its material  business
      operations.   Nevertheless,   amendments   to   existing   statutes   and
      regulations, adoption of new  statutes and regulations and the  Company's
      expansion into other  jurisdictions and types of  operations could result
      not  only  in the  additional  risk  of noncompliance,  but  also in  the
      increase in regulatory burden that could cause related increases in costs
      and expenses.

          Two of the statutes  very important to  the Company are the  Resource
      Conservation  and Recovery  Act  of  1976,  as  amended,  and  the  EPA's
      implementing regulations of that  statute (collectively, "RCRA"), and the
      Comprehensive Environmental Response, Compensation  and Liability Act  of
      1980, as  amended ("CERCLA"). RCRA establishes  a comprehensive framework
      for  state and federal regulation of hazardous waste management. It seeks
      to prevent the release  into the environment of hazardous  wastes through
      the development of solid waste management plans and the regulation of the
      generation,  transportation, treatment, storage and disposal of hazardous
      wastes.  On October 9, 1991, the EPA promulgated substantial revisions to
      its existing RCRA Subtitle D implementing regulations.  The revisions set
      forth minimum national  "open dump" criteria  for publicly and  privately
      owned   municipal   solid   waste  landfills.   They   include   location
      restrictions, design  and operating criteria,  groundwater monitoring and
      corrective action standards, closure  and post closure care requirements,
      and  financial  assistance  criteria.  Most  revisions  became  effective
      October 9,  1993, and states have revised  their own laws and regulations
      to   be  consistent  with  the   RCRA  criteria.  Some  revisions  (i.e.,
      groundwater monitoring requirements) have been phased in over a five-year
      period that  began on October 9,  1991, and others relating  to financial
      responsibility became effective April 9, 1994.<PAGE>

          While RCRA was implemented to prevent the release of hazardous wastes
      into  the  environment,  CERCLA  was  designed  to  establish a  national
      strategy to  remedy existing hazardous  environmental conditions.  CERCLA
      establishes liability for  clean up costs  and environmental damages  for
      owners  and operators  of  disposal sites,  as  well as  for  persons who
      generate,  transport  or  arrange  for  transportation  of  wastes  to  a
      particular site. While CERCLA  generally exempts responsible  contractors
      from  liability arising from the  release or threatened  release to which
      the  contractor is responding, it  can impose liability  on a responsible
      contractor for that contractor's negligent and grossly negligent acts.

          Many  states  have  enacted  statutes  similar  to  RCRA  and  CERCLA
      regulating  the handling of hazardous  substances and wastes. The Company
      could be subject to substantial liability under these statutes to private
      parties and government entities for fines or penalties, in some instances
      without any fault on the part of the Company, because  of the mishandling
      or release of any hazardous substances.

      PERMITS AND LICENSES

          Many states  license  such  areas  of  the  Company's  operations  as
      asbestos  abatement  and  general  contracting.  Licensing requires  that
      workers  and supervisors  receive training  from EPA  approved and  state
      certified organizations and pass required tests. The Company is currently
      licensed to perform its services in 33 states.  The Company also operates
      in  certain  states that  do  not have  a  special asbestos  abatement or
      general  contracting  license  requirement;  however, these  states  have
      adopted regulations regarding worker  safety with which the  Company must
      comply.

          The Company may  need additional licenses  to expand its  operations.
      Although there can  be no assurance, based upon the  level of training of
      its  employees and its experience, the Company currently believes that it
      can obtain all such required licenses.

      EMPLOYEES

          The  Company has approximately 980 employees, of which 9 are employed
      in   executive  capacities,   28  in   professional  capacities,   76  in
      administrative  capacities, 166  as field  supervisors and  701  in field
      operations. A total of  11 of the Company's employees are  union members,
      covered by various collective bargaining agreements. The  Company has not
      experienced any strikes or work stoppages and considers its  relationship
      with its employees to be satisfactory.<PAGE>

          The  Company,  through  its  subsidiaries,  has implemented  employee
      safety programs that require each employee to complete a general training
      and  safety program. Training topics include approved work procedures and
      instruction  on personal safety and  the use of  protective equipment. In
      addition,  all employees  engaged  in asbestos  abatement activities  are
      required to attend a minimum three-day to four-day course approved by the
      EPA  and   Occupational  Safety   and  Health  Administration,   and  all
      supervisors of abatement projects are required to attend a 40-hour safety
      course  annually.  Moreover,  employees   are  issued  detailed  training
      materials  and  are  required  to  attend ongoing  safety  seminars.  The
      Company's subsidiaries  also  conduct  job  safety analysis  in  the  job
      bidding  stage. Besides the  precautions taken with  respect to projects,
      the  Company takes additional measures  to protect its  asbestos and site
      remediation workers,  including providing them with additional protective
      equipment and sponsoring periodic medical examinations.

      Item 2.   Properties

          The  Company owns its principal executive offices that are located in
      approximately 20,600 square feet of office space at 1501  and 1502 Second
      Avenue,  East, Tampa,  Florida  33605.  The  offices  are  subject  to  a
      mortgage, securing indebtedness  evidenced by a  promissory note with  an
      outstanding principal  amount at December  31, 1997, of  $1,675,000. This
      variable  rate  note  matures on  August  1,  1999,  and currently  bears
      interest at 1.25 percent above the lender's prime rate.

          The  Company's subsidiary,  TransCor Waste  Services, Inc.,  owns and
      operates the following facilities:

          Clearwater, Pinellas County

          The  Company's Clearwater  facility,  located  on  approximately  ten
          acres,  is zoned  heavy industrial  and  contains a  T&R building  of
          approximately  33,000  square  feet  with  modular  office  space  of
          approximately 3,000 square feet.  The Clearwater facility  is subject
          to a  mortgage securing indebtedness  evidenced by a  promissory note
          with  an  outstanding  principal  amount  at  December  31,  1997, of
          $821,000.  The note matures on January 1, 1999, and bears interest at
          a  rate of 1  percent above the  lender's prime rate.   As additional
          security for the  lender, the Company executed an assignment of rents
          and leases in the event of a default under the mortgage.
      
          Tampa, Hillsborough County

          The Company's  Tampa facility  is located  on approximately  four and
          one-quarter  acres in downtown  Tampa.   The property is  zoned heavy
          industrial  and  contains an  approximately  15,000  square foot  T&R
          building.   The  Tampa facility  is  subject to  a mortgage  securing
          indebtedness  evidenced  by a  promissory  note  with an  outstanding
          principal  amount  at  December 31,  1997,  of $525,000.    This note
          matures on March 1, 2001, and bears interest at a rate of 1.5 percent
          above the lender's prime rate.<PAGE>

          Jacksonville, Duval County

          The Company's  Jacksonville facility is located  on approximately ten
          acres.    The  property is  zoned  light industrial  and  contains an
          approximately  37,500  square foot  recycling building,  2,000 square
          feet of office space, and a 1,500 square  foot maintenance shop.  The
          Jacksonville facility is subject to a mortgage, securing indebtedness
          evidenced by a  promissory note with an  outstanding principal amount
          at December  31, 1997, of $1,314,000.  The note matures on January 1,
          2012, and bears interest at the  rate of 8.75 percent per annum.   As
          additional  security  for  the  payments  under  the  notes  and  the
          Company's  performance  of its  obligations under  the  mortgage, the
          Company executed  a modification to the mortgage  to assign all rents
          from the property or to  appoint a receiver in the event of a default
          under the mortgage.

          Miami, Dade County

          The Company's Miami  facility is  located on  approximately four  and
          one-half acres, is zoned industrial, contains an approximately 60,500
          square   foot  T&R  building,   and  contains   an  office   area  of
          approximately 2,500 square feet that is used for its Miami collection
          operations.   The Miami facility is subject  to a mortgage, which was
          refinanced  during  1995,  securing   indebtedness  evidenced  by   a
          promissory note with an outstanding principal amount at December  31,
          1997, of approximately  $828,000.  The note matures on July 30, 2003,
          and bears  interest at a rate of 1.5  percent above the prime rate of
          CitiBank, N.A.   As additional security  for the lender,  the Company
          executed a  conditional assignment of  leases, rents, and  profits in
          the event of a default under the mortgage.

          Fort Pierce, St. Lucie County
      
          The Company's Fort  Pierce facility is  located on approximately  two
          acres and  is  zoned heavy  industrial.    The facility  contains  an
          approximately  1,000  square  foot  warehouse  and  office  space  of
          approximately 1,000 square feet.  The Fort Pierce facility is subject
          to a  mortgage securing indebtedness  evidenced by a  promissory note
          with  an  outstanding  principal  amount  at  December 31,  1997,  of
          approximately $165,000.  The note matures on March 1, 1999, and bears
          interest at  a rate of  3.75 percent above  the lender's  prime rate.
          The land and  building comprising this facility were  sold in January
          1998.  Operations had  ceased in this facility on  November 1997 when
          the contract with  St. Lucie County was sold.   The mortgage was paid
          in full using  proceeds from  the sale of  the facility. The  Company
          recognized a loss of approximately $90,000 on the sale.<PAGE>

          Lantana, Palm Beach County

          The Company's Lantana facility is located on approximately five acres
          and  is zoned  industrial.   The facility  contains  an approximately
          36,000 square  foot building, an  office area of  approximately 3,900
          square  feet, and a  maintenance shop  of approximately  7,000 square
          feet.    The  Lantana facility  is  subject  to  a mortgage  securing
          indebtedness  evidenced  by a  promissory  note  with an  outstanding
          principal amount of approximately $883,000 at December 31, 1997.  The
          note matures  on October  18, 2010, and  bears interest  at the  rate
          equal to the lender's prime rate.  Operations in the Lantana facility
          ceased in August 1997.

          The  Company's   cost  for   land,  buildings  and   improvements  is
          approximately $2,011,000. As of December 31, 1997, the Company wrote-
          down the recorded value of these assets by $500,000, and the facility
          is for sale.

          Fort Myers, Lee County

          The Company's  Fort Myers  facility is located  on approximately  two
          acres and is zoned industrial.   The facility contains a  building of
          approximately  6,400 square  feet and  office areas  of approximately
          2,200 square feet.   The Fort Myers facility, which  began operations
          on  October 1, 1995, is  subject to a  mortgage securing indebtedness
          evidenced by a promissory  note with an outstanding principal  amount
          at December 31, 1997, of approximately $323,000.  The note matures on
          August 9, 2000, and bears interest at the rate of 9.25 percent.

          As a result of  the recently awarded solid waste  franchise agreement
          with the  City of Cape  Coral, Florida,  the Company  will require  a
          larger  facility to service an increased revenue base. In early 1998,
          the Company made a bid  on a competitor's idle facility,  which would
          meet the Company's expansion needs in the Lee County area. The bid of
          $700,000  was for  land  and buildings.   The  Company  may sell  its
          current facility if its bid for this property is successful.

          Sales of Properties

          Effective May 31, 1998, TransCor sold the Jacksonville property along
         with  certain   other   assets  and   businesses   for   approximately
         $11,600,000, which resulted in a gain to the  Company. In addition, as
         of December 31,  1997, management holds for sale the  Lantana property
         and related businesses.

      Item 3.   Legal Proceedings

          The Company is involved  in various legal actions and  claims arising
      in the ordinary course of its business, none of which is expected to have
      a  material  effect on  the Company's  financial  position or  results of
      operations.

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

          None.<PAGE>

                                       PART II

      Item 5.   Market  for   the  Registrant's  Common   Equity  and   Related
      Stockholder Matters

          The  Company's common  stock has  been traded  on the New  York Stock
      Exchange (symbol "KVN")  since March 30, 1990.  The  following table sets
      forth  for  the  periods indicated  high  and  low  sales  prices of  the
      Company's common stock as reported by the New York Stock Exchange.

                               1997                   High       Low   
              ------------------------------------- --------- ---------
                                                    
              First Quarter . . . . . . . . . . . . $   4.250 $   3.000
              Second Quarter  . . . . . . . . . . . $   4.000 $   2.500
              Third Quarter . . . . . . . . . . . . $   6.000 $   3.813
              Fourth Quarter  . . . . . . . . . . . $   7.000 $   4.500
                                                    
                               1996                   High       Low   
              ------------------------------------- --------- ---------
                                                    
              First Quarter . . . . . . . . . . . . $   7.875 $   5.250
              Second Quarter  . . . . . . . . . . . $   5.750 $   4.875
              Third Quarter . . . . . . . . . . . . $   5.000 $   3.500
              Fourth Quarter  . . . . . . . . . . . $   4.125 $   3.250

          The closing stock  price for the Company's  stock on March  31, 1998,
      was $4.1875.  On March 31,  1998, there were approximately 870 holders of
      record of the common stock. Certain record  holders are brokers and other
      institutions holding shares in "street name" for more than one beneficial
      owner.

      Dividends

          The  payment by the  Company of dividends,  if any, in  the future is
      within the discretion of its Board of Directors and will  depend upon the
      Company's  earnings,  capital  requirements  (including  working  capital
      needs), and  financial  condition, as  well  as other  relevant  factors.
      Certain  agreements  between the  Company  and  its lending  institutions
      prohibit  the Company  from paying  cash dividends  without the  lenders'
      consent. Other  than a three  and one-third  cent per share  of a  common
      stock cash dividend paid in July 1989,  the Company has not paid any cash
      dividends since its inception, and  the Board of Directors does  not plan
      to declare or pay any cash dividends in the future.<PAGE>

      Item 6.   Selected Financial Data

          The  following   selected  financial   data  are  derived   from  the
      consolidated  financial statements of Kimmins  Corp.  The  data should be
      read in  conjunction with the consolidated  financial statements, related
      notes, and other financial information included herein.

      HISTORICAL OPERATING STATEMENT DATA:

                                          Years ended December 31,
                                    (In thousands, except per share data)      
                              ------------------------------------------------
                                 1993      1994     1995      1996      1997   
                              --------- --------- --------- ------------------
                                                            
      Gross revenue . . . . . $ 83,609  $ 96,755  $111,346  $113,241 $ 135,311 
      Net revenue . . . . . .   77,405    85,353    95,426    97,977   113,526 
      Operating income                                      
        (loss) (1)  . . . . .    3,666     2,670     4,596    (7,806)   (5,793)
      Income (loss) from                                    
        operations before                                   
        provision (benefit)                                 
        for income taxes  . .    3,196     1,533     2,833   (10,775)   (9,687)
      Net income                                            
        (loss) (2)  . . . . .    1,753       797     1,343    (8,683)   (8,518)
                                                            
      PER SHARE DATA (3):                                   
                                                            
      Net income (loss) per                                 
        share - basic . . . . $    .39  $    .18  $    .30  $  (1.96)$   (1.97)
      Net income (loss) per                                 
        share - diluted . . . $    .39  $    .18  $    .29  $  (1.96)$   (1.97)
      Weighted average number                               
        of common shares                                    
        outstanding - basic .    4,443     4,443     4,445     4,420     4,318 
      Weighted average number                               
        of common shares                                    
        outstanding - diluted    4,483     4,496     4,578     4,420     4,419 
      Cash dividends per                                    
        share . . . . . . . .     None      None      None      None      None 

      (1) The 1997 operating results include charges of approximately $8,750 in
          the  fourth quarter  related to revisions  of contract  estimates and
          adjustments to contract claims and change order settlements. The 1996
          operating results  include charges  of $6,452  in the  fourth quarter
          related to similar matters.

      (2) The 1997  income tax benefit of $1,168  relates to TransCor, which is
          not consolidated  with  Kimmins  Corp. for  tax  purposes.  The  1996
          results included a benefit for income  taxes of $2,092, which is  net
          of   a  valuation  allowance   of  $1,707   related  to   the  future
          recoverability of deferred tax asset balances.

      (3) The earnings per share  amounts prior to  1997 have been restated  as
          required to comply with  Statement of Financial Standards No.  128, "
          Earnings Per Share." For further discussion of earnings per share and
          the impact  of Statement No. 128,  see the Notes to  the Consolidated
          Financial Statements beginning on page 27.<PAGE>

      HISTORICAL BALANCE SHEET DATA:

                                             As of December 31,
                                               (In thousands)                  
                              ------------------------------------------------
                                 1993      1994     1995      1996      1997   
                              --------- --------- --------- ------------------
                                                            
      Current assets  . . . . $ 33,716  $ 36,200  $ 44,117  $ 41,856 $  45,417 
      Working capital                                       
        (deficiency)  . . . .   12,041    11,205    11,548     5,587   (13,289)
      Total assets  . . . . .   70,192    72,689    93,629    93,083   135,016 
      Long-term debt  . . . .   19,454    17,032    26,540    31,360    69,621 
      Stockholders' equity  .   23,102    24,514    26,381    17,853     9,393 

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

      Introduction

          The  Company  conducts its  business  in  two  segments: solid  waste
      management services  and specialty contracting services.  The solid waste
      management services segment  offers collection, transfer, transportation,
      resource  recovery and disposal  of non-hazardous  waste.   The specialty
      contracting  services segment  provides comprehensive  services including
      facilities demolition and dismantling, installation of sewer lines, water
      lines and roads,  excavation, removal and disposal  of contaminated soil,
      groundwater treatment and asbestos abatement.<PAGE>

      Results of Operations

          The  following table  sets forth  for the  periods indicated  (i) the
      percentage of net revenue  represented by certain items in  the financial
      statements of the Company,  and (ii) the percentage change  in the dollar
      amount of such items from period to period.

                                                                Percentage
                                                            Increase (Decrease)
                                Percentage of Net Revenue       Year ended
                                 Year Ended December 31,       December 31,
                              ----------------------------  -------------------
                                                            1996 vs.  1997 vs.
                                 1995      1996     1997      1995      1996   
                              --------- --------- --------- ------------------
                                                            
      Gross revenue . . . . .   116.7%    115.5%    119.2%      1.7%     19.5% 
      Outside services  . . .    16.7%     15.5%     19.2%     (4.1%)    42.7% 
                              --------- --------- ---------
      Net revenue . . . . . .   100.0%    100.0%    100.0%      2.7%     15.9% 
      Cost of revenue                                       
        earned  . . . . . . .    81.2%     92.1%     91.1%     16.5%     13.7% 
                              --------- --------- ---------
      Gross profit  . . . . .    18.8%      7.9%      8.9%    (57.1%)    44.3% 
      Selling, general and                                  
        administrative                                      
        expense . . . . . . .    14.0%     15.8%     14.0%     16.1%      7.4% 
                              --------- --------- ---------
      Operating income                                      
        (loss)  . . . . . . .     4.8%     (7.9%)    (5.1%)  (269.8%)   (25.8%)
      Minority interest in                                  
        net (income) loss                                                      
        of subsidiary . . . .    (0.3%)     0.1%      0.5%   (140.0%)   292.5% 
      Interest expense,                                     
        net . . . . . . . . .    (1.5%)    (3.2%)    (3.9%)   119.1%     42.8% 
                              --------- --------- ---------
      Income (loss) before                                  
        provision for income                                
        taxes (benefit) . . .     3.0%    (11.0%)    (8.5%)  (480.3%)   (10.1%)
      Provision for income                                  
        taxes (benefit) . . .     1.6%     (2.1%)    (1.0%)
                              --------- --------- ---------
      Net income (loss) . . .     1.4%     (8.9%)    (7.5%)  (746.8%)     1.9% 
                              ========= ========= =========<PAGE>

      Year Ended December 31, 1997, Compared to Year Ended December 31, 1996

          The  Company incurred a  net loss  of $8,518,000  for the  year ended
      December  31, 1997,  compared to a  net loss  of $8,683,000  for the year
      ended December 31, 1996.   Approximately $6,454,000 of the  1997 loss was
      attributable  to the Company's  specialty contracting segment,  and a net
      loss  of  approximately $2,064,000  (net  of the  minority  interest) was
      attributable  to the solid waste  management services segment.   The 1997
      net loss associated with the solid waste management segment was primarily
      attributable to a decrease in revenue and an increase in overhead  costs.
      During 1998,  TransCor has sold  or placed for  sale certain of  the non-
      performing  assets and contracts that contributed to the waste management
      segment losses. Sales of such assets  resulted in proceeds to TransCor in
      1998  of  approximately  $11,600,000.  The  net  loss  in  the  specialty
      contracting  segment was attributable  to a number  of factors, including
      delays  and disruption of contracts during the fourth quarter of 1997 and
      the first  quarter of  1998, caused by  the severe influences  of weather
      patterns  (the  "El  Nino  Effects")  that  affected  the  southeast.  In
      addition, the two remaining contracts in  the Company's Northeastern (New
      York-based) Division,  which the Company has  exited, incurred additional
      losses  in 1997 of approximately  $3,409,000 that were  due to conditions
      that  arose during 1997. Finally,  certain utility and roadwork contracts
      with the Florida Department of Transportation ("FDOT") resulted in losses
      of approximately $3,200,000 related to customer-caused and weather-caused
      delays. The Company has  discontinued any new FDOT contracting,  in order
      to focus on more profitable specialty contracting services.

          A  line-by-line analysis  of the  Company's statements  of operations
      follows below:

          During the year  ended December  31, 1997, net  revenue increased  by
      $15,549,000, or 16 percent, to $113,526,000 from $97,977,000 for the year
      ended  December 31,  1996. The  increase in  revenue associated  with the
      Company's  utility  contracting  services  ($22,435,000 increase  in  net
      revenue)   is  due   to   the   Company's   change   in   focus   towards
      non-environmental  projects.    Revenue  for  land  reclamation  services
      increased  from   approximately  $2,562,000  in  1996   to  approximately
      $25,061,000 in  1997 and represents  27 percent of  specialty contracting
      services and 19 percent of total revenues for 1997. The change in revenue
      associated with the  Company's remediation services  ($6,079,000 decrease
      in net  revenue), asbestos abatement  services ($649,000 increase  in net
      revenue),  and industrial  demolition  services ($1,000  increase in  net
      revenue) is due  to the  Company de-emphasizing these  services and  only
      performing  this work  in  conjunction  with  the  Company's  other  non-
      environmental  activities. The  decrease in  revenue associated  with the
      Company's  solid waste  management services  ($1,497,000 decrease  in net
      revenue) is primarily due to  the closure of two facilities during  1997.
      Utility  contracting services net revenue,  as a percentage  of total net
      revenue,  increased to 57 percent  for the year  ended December 31, 1997,
      from  43 percent  for  the year  ended  December 31,  1996.  Remediation,
      abatement and demolition services combined decreased to 6 percent from 13
      percent. Solid waste management services net revenue comprised 37 percent
      of total  net revenue in 1997 compared to  45 percent in 1996. The impact
      of price increases on net revenue is less than 1 percent.

          Outside  services, which  primarily consist  of  subcontractor costs,
      increased as  a percentage of net revenue from 16 percent during the year
      ended December 31, 1996, to 19 percent during 1997. The Company will  use<PAGE>

      the  services  of a  subcontractor when  it  determines that  an economic
      opportunity  exists  regarding  internally providing  the  services.  The
      Company utilized the services of subcontractors to a higher extent during
      1997  than  1996 due  to  the ongoing  contracts  and  the specific  work
      requirements.

          Cost of revenue earned  increased to $103,402,000 for the  year ended
      December 31, 1997, from $90,962,000 for the comparable period of 1996. As
      a result, gross profit during the year ended December 31, 1997, increased
      to $10,124,000 (9  percent of net revenue) from  $7,015,000 (7 percent of
      net revenue) in 1996. The increase in the dollar amount and percentage of
      gross  profit   primarily  is  associated  with   the  Company's  utility
      contracting ($2,949,000 increase in gross profit), demolition contracting
      ($1,293,000  decrease  in  gross   loss),  asbestos  abatement   services
      ($316,000 decrease in gross loss),  and other services ($40,000  increase
      in gross profit) and  were partially offset by decreases  in gross profit
      from  remediation services  ($1,281,000  increase in  gross  loss).   The
      increase   in  gross   profit  from   utility  contracting   services  is
      attributable mainly to new contracts with higher profit margins regarding
      land  reclamation  services for  phosphate  mining  companies, which  was
      partially  offset by  losses on  certain FDOT  contracts. The  Company is
      currently  not bidding  on any  further FDOT  contracts. The  decrease in
      losses  at  the  gross  margin   level  for  remediation,  abatement  and
      demolition operations is directly related to the closure of the northeast
      office. However, losses of $2,948,000, including loss reserves for future
      performance,  were recorded  in 1997  with respect  to the  two remaining
      contracts  in the former Northeast Division service area. Costs for legal
      fees associated  with a  claim comprise  $304,000 of  the  total loss  of
      $405,000 for remediation operations and the majority of costs included in
      the $129,000 loss for abatement operations in the northeast. 
      
          Depreciation and amortization, included in cost of revenue, increased
      to  $8,796,000 in  1997, from  $5,650,000 in  1996. The  increase relates
      primarily to depreciation expense, and resulted from the purchase  during
      the first and  fourth quarters  of 1997 of  approximately $39,000,000  of
      heavy  construction  equipment  that  had previously  been  leased  under
      operating leases.  Because the  equipment purchase  transactions affected
      only  a portion of the year ended December 31, 1997, depreciation expense
      in 1998  will be higher  in respect of  the full year  of depreciation on
      such  equipment. Conversely,  operating lease  expense which  amounted to
      approximately  $11,808,000 and  $11,853,000  in each  of  1996 and  1997,
      respectively, will decline significantly in 1998 with  the elimination in
      1997  of   certain  operating  lease  arrangements.   In  addition,  1998
      amortization expense  will increase approximately $400,000 as a result of
      the  conversion in  the fourth  quarter of  1997 of  certain  real estate
      related notes receivable to  an equity interest, containing  goodwill, in
      the underlying properties. 

          The improvements  in the  special contracting segment  were partially
      offset by decrease in the solid waste managements services segment. Gross
      margin for  solid waste management services  decreased from approximately
      $7,297,000 in  1996 to  approximately  $7,089,000 in  1997. The  $208,000
      decrease in gross margin is mainly attributable to increased competition,
      the  closure of two  regional facilities during  1997, and a  decrease of
      approximately $2,278,000 in revenue at a third facility.<PAGE>

          Included  in  the Company's  operating  results for  the  years ended
      December 31,  1996 and  1997 is  the activity  related to  the settlement
      and/or  resolution of contract claims and unapproved change orders.  This
      activity can be summarized as follows:

                                                     Years ended December 31,  
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
                                                    
      Claim recoveries  . . . . . . . . . . . . . . $  2,013,000  $    431,000 
                                                    
      Cost of recoveries  . . . . . . . . . . . . .    4,916,000     1,278,000 
                                                    ------------- -------------
                                                    
      Loss on resolved claims . . . . . . . . . . . $ (2,903,000) $   (847,000)
                                                    ============= =============

          In addition,  the Company  incurred costs associated  with unresolved
      claims of $2,079,000 and $3,216,000 during 1996 and 1997, respectively.

          The Company had  the following balances recorded relating to contract
      claims and unsigned change orders at December 31, 1996 and 1997:

                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
                                                    
      Claims  . . . . . . . . . . . . . . . . . . . $  5,558,000  $ 11,989,000 
      Unapproved change orders  . . . . . . . . . .    3,392,000             0 
                                                    ------------- -------------
                                                    $  8,950,000  $ 11,989,000 
                                                    ============= =============
                                                    
      Cumulative external claim preparation         
        costs included above  . . . . . . . . . . . $    295,000  $          0 
                                                    ============= =============
                                                    
          During 1997, selling,  general and administrative expenses  increased
      to $15,917,000 (14 percent) from $14,821,000 (15 percent) of net revenues
      for  the year ended  December 31, 1996.  The dollar increase  in selling,
      general,  and  administrative  expenses   primarily  is  attributable  to
      increased overhead  costs, such as  office salaries and  marketing costs,
      associated with higher levels  of operations. The percentage  decrease in
      selling, general and administrative expenses primarily is associated with
      the growth of  the Company's specialty contracting operations,  which has
      historically operated with  a lower overhead structure than the Company's
      solid waste management operations, which  has an overhead structure equal
      to 18 percent of its net revenue in 1997 compared to 14 percent in 1996.<PAGE>

          The  percentage  increase  in  selling,  general  and  administrative
      expenses for the solid waste management segment is primarily attributable
      to non-recurring costs. The increase of $1,593,000 is directly related to
      advertising costs  for  a  new contract  of  approximately  $500,000,  an
      increase  in compensation  expense  of approximately  $563,000  due to  a
      temporary increase in staff levels, and costs associated with the closing
      and sale of facilities and operating assets of approximately  $1,173,000,
      including  an impairment loss of  $590,000 to certain  land and buildings
      held  for sale,  a  write-off of  intangible  assets of  $183,000, and  a
      reserve for doubtful accounts  of $400,000 regarding the sale  of certain
      residential  service contracts. The costs were  partially offset by gains
      of  approximately $445,000 on the  sale of certain  contracts and related
      equipment and approximately $200,000 in savings in other costs.

          The  percentage  decrease  in  selling,  general  and  administrative
      expenses  for specialty  contracting  operations is  attributable to  the
      increase in net revenue of approximately $17,046,000, which represents an
      increase of 47 percent.

          As  a result  of  the foregoing,  the  Company's operating  loss  was
      $5,793,000  (negative 5  percent of  net revenue)  during the  year ended
      December  31, 1997, compared to an operating loss of $7,806,000 (negative
      8 percent of net revenue) during the same period in 1996. 

          Minority interest in net loss of the TransCor subsidiary was $542,000
      for the year  ended December 31,  1997, compared to minority  interest in
      net income of $138,000 for the year ended December 31, 1996. The minority
      interest in net income or loss of such subsidiary reflects an approximate
      26 percent ownership  interest in TransCor's earnings as a  result of the
      March 25, 1993, initial  public offering of TransCor's common  stock. The
      decrease  in TransCor's  earnings between  years is  attributable  to the
      lower profit margins earned on certain solid waste management services in
      1997.

          Interest  expense, net  of interest  income, increased  to $4,436,000
      during the year ended December 31, 1997, compared  to $3,107,000, for the
      year ended December 31,  1996. The increase is attributable  to increases
      in average borrowings during the year and to approximately $43,000,000 of
      heavy construction equipment  financing in the first and  fourth quarters
      of  1997 relating to the specialty contracting segment.  Interest expense
      in 1998 will be higher than amounts  reflected in 1997 in respect of  the
      full year  of interest on  the equipment financing  that occurred  in the
      first and fourth quarters of 1997.

          During  1997, the  Company  contributed approximately  $6,000,000  in
      receivables   from  affiliates   to  Sunshadow   Apartments,  Ltd.,   and
      Summerbreeze  Apartments,   Ltd.,  two   Florida   real  estate   limited
      partnerships (collectively, the "Apartments"), in exchange for 49 percent
      non-controlling,   preferred   limited  partnership   interests   in  the
      Apartments.   The amount in excess of the underlying equity ($12,066,000)
      was  attributed to goodwill  and is being  amortized over 30  years.  The
      Company recorded  equity in  losses  in the  Apartments of  approximately
      $81,000,  which  represents  the  Company's proportionate  share  of  the
      Apartment' net loss for the period October 22, 1997, through December 31,
      1997.  The  Company  also   recorded  equity  in  income   of  Cumberland
      Technologies, Inc. ("Cumberland") of $51,000 for the year  ended December
      31, 1997.<PAGE>

          The  Company's effective tax rate  was negative 12.1  percent for the
      year ended  December 31, 1997,  compared to a  tax rate of  negative 19.5
      percent  for  the year  ended December  31, 1996.    The decrease  in the
      effective tax rate was primarily due to the net operating  loss generated
      by  the Company and the resulting recognition of future tax benefits from
      credit  and loss carryforwards.  The net operating loss ("NOL") generated
      in  the year ended December  31, 1997, was  approximately $7,465,000. The
      NOL will be carried forward to offset any taxable income in future years.
      For  alternative   minimum  tax   purposes,  the  loss   carryforward  is
      approximately $4,933,000.  Management expects to fully utilize these loss
      and credit carryforwards before they expire in the year 2011; however, in
      accordance  with Statement  of  Financial Accounting  Standards No.  109,
      "Accounting  for Income  Taxes," a  valuation allowance  of approximately
      $2,801,000 has been recognized.   In addition to the  loss carryforwards,
      the Company has approximately $697,000 of alternative  minimum tax credit
      carryforwards available  to offset  future federal regular  income taxes.
      This credit does not expire.

          As a result of the foregoing, the Company incurred a net loss for the
      year ended December 31, 1997, of $8,518,000 (negative 7.5  percent of net
      revenue) compared  to a net loss of $8,683,000 (negative 9 percent of net
      revenue) during the same period in 1996.

      Year Ended December 31, 1996, Compared to Year Ended December 31, 1995

          The  Company incurred  a net loss  of $8,683,000  for the  year ended
      December  31, 1996,  compared to  net income of  $1,343,000 for  the year
      ended December 31, 1995.  Approximately  $8,295,000 of the 1996 loss  was
      attributable  to  several  matters  related to  the  Company's  specialty
      contracting segment, and approximately  $388,000 of the net loss  (net of
      the minority  interest) was  attributable to  the solid waste  management
      services segment.   The  1996 net loss  associated with  the solid  waste
      management segment  was primarily  attributable to a  demolition contract
      claim  and  a change  order settlement  which  totaled $395,000.    As it
      relates  to  the  specialty  contracting segment,  the  Company  incurred
      $2,903,000 of pretax  losses related to the  settlement and/or resolution
      of  contract claims  and  unapproved change  orders.   In  addition,  the
      Company  incurred losses  on  two remediation  contracts  located in  the
      northeast region that  resulted in  pretax losses of  $1,369,000.   These
      losses  were attributable to the Company's de-emphasis of work located in
      the  northeastern states  and  focus towards  operations  located in  the
      southeastern  states,  primarily  Florida. This  de-emphasis  resulted in
      operational  inefficiencies, such  as  work  slow  downs, that  were  the
      ultimate causes of the losses.   As management focused on  the resolution
      of  the operating  issues related  to the  northeast region,  operational
      inefficiencies  in  the southeast  region  arose, resulting  in  a pretax
      charge  of  $3,580,000 related  to five  utility  and two  demolition and
      abatement projects.

          Certain of the  above charges occurred in the fourth quarter of 1996,
      resulting in an aggregate pretax loss of $6,452,000.  Information related
      to these matters  substantially arose  during the fourth  quarter of  the
      year.   As it relates  to the specialty contracting  segment, the Company
      incurred $2,455,000  of pretax  losses related  to the  settlement and/or
      resolution of contract  claims and  unapproved change  orders during  the
      fourth  quarter of 1996.  The losses  associated with the remediation and
      utility  contracting contracts  that related  to  the fourth  quarter was
      $1,543,000 and $2,454,000, respectively.<PAGE>

          A  line-by-line analysis  of the  Company's statements  of operations
      follows below:

          During the year  ended December  31, 1996, net  revenue increased  by
      $2,551,000,  or 3 percent, to  $97,977,000 from $95,426,000  for the year
      ended  December 31,  1995. The  increase in  revenue associated  with the
      Company's  solid waste  management services  ($4,492,000 increase  in net
      revenue)  is primarily due to the commencement of two municipal contracts
      during  October  1995 to  provide  residential  collection services.  The
      increase  in revenue  associated with  the Company's  utility contracting
      services ($1,676,000 increase  in net  revenue) is due  to the  Company's
      change  in focus  towards non-environmental  projects.   The  decrease in
      revenue associated with  the Company's  remediation services  ($1,602,000
      decrease  in   net  revenue),  asbestos  abatement  services  ($1,243,000
      decrease in  net revenue),  and industrial demolition  services ($772,000
      decrease  in  net revenue)  is due  to  the Company  de-emphasizing these
      services  and only performing this work in conjunction with the Company's
      other environmental demolition activities.  The impact of price increases
      on net revenue was less than 1 percent.

          Outside  services, which  primarily consist  of  subcontractor costs,
      decreased as a percentage of net revenue from 17 percent  during the year
      ended December 31, 1995, to 16  percent during 1996. The Company will use
      the  services  of a  subcontractor when  it  determines that  an economic
      opportunity  exists  regarding  internally providing  the  services.  The
      Company  utilized the services of subcontractors to a lower extent during
      1996 than  1995  due  to the  ongoing  contracts and  the  specific  work
      requirements.

          Cost  of revenue earned increased  to $90,269,000 for  the year ended
      December 31, 1996, from $77,466,000 for the comparable period of 1995. As
      a result, gross profit during the year ended December 31, 1996, decreased
      to $7,708,000  (8 percent of net revenue) from $17,960,000 (19 percent of
      net revenue) in 1995. The decrease in the dollar amount and percentage of
      gross  profit   primarily  is  associated  with   the  Company's  utility
      contracting  ($3,923,000  decrease  in  gross  profit)   and  remediation
      operations ($3,703,000 decrease in  gross profit). The decrease  in gross
      profit  from   utility  contracting  services  is   directly  related  to
      management's  decision to  stop legal  action  related to  two unapproved
      change orders  and to a project  that failed to perform  to the Company's
      original  projections.   The decrease  in gross  profit from  remediation
      services  is directly  related to  losses incurred  on two  projects that
      failed  to  perform  to  the  Company's  original  projections  and   the
      settlement  of  a  contract  claim that  resulted  in  a  pretax loss  of
      approximately  $448,000.    In  addition, the  Company  incurred  certain
      decreases in  its industrial demolition services  ($1,380,000 decrease in
      gross  profit), solid  waste  management services  ($848,000 decrease  in
      gross  profit), and  asbestos  abatement services  ($398,000 decrease  in
      gross  profit).   The  decrease  in  gross  profit  associated  with  the
      Company's  industrial demolition services is due to a judge's reversal of
      a  previous  jury award  in favor  of the  Company  on a  contract claim,
      resulting in a pretax charge to operations of $1,572,000.<PAGE>

          Included  in  the Company's  operating  results for  the  years ended
      December 31,  1995 and  1996 is  the activity  related to  the settlement
      and/or  resolution of contract claims and unapproved change orders.  This
      activity can be summarized as follows:
                                                     Years ended December 31,  
                                                    ---------------------------
                                                        1995          1996     
                                                    ------------- -------------
                                                    
      Claim recoveries  . . . . . . . . . . . . . . $  1,618,000  $  2,013,000 
                                                    
      Cost of recoveries  . . . . . . . . . . . . .    1,145,000     4,916,000 
                                                    ------------- -------------
                                                    
      Gain (loss) on resolved claims  . . . . . . . $    473,000  $ (2,903,000)
                                                    ============= =============
                                                    

          In addition,  the Company  incurred costs associated  with unresolved
      claims of $6,440,000 and $2,079,000 during 1995 and 1996, respectively.

          The Company had  the following balances recorded relating to contract
      claims and unsigned change orders at December 31, 1995 and 1996:

                                                           December 31,        
                                                    ---------------------------
                                                        1995          1996     
                                                    ------------- -------------
                                                    
      Claims  . . . . . . . . . . . . . . . . . . . $  9,128,000  $  5,558,000 
      Unapproved change orders  . . . . . . . . . .    2,659,000     3,392,000 
                                                    ------------- -------------
                                                    $ 11,787,000  $  8,950,000 
                                                    ============= =============
                                                    
      Cumulative external claim preparation         
        costs included above  . . . . . . . . . . . $  1,226,000  $    295,000 
                                                    ============= =============
                                                    
          During 1996, selling,  general and administrative  expenses increased
      to $14,821,000 from $12,894,000 for the year ended December 31, 1995. The
      dollar  increase  in  selling,   general,  and  administrative   expenses
      primarily  is attributable  to increased overhead  costs, such  as office
      salaries  and   marketing  costs,   associated  with  higher   levels  of
      operations.   The   percentage   increase   in   selling,   general   and
      administrative expenses primarily  is associated with  the growth of  the
      Company's  solid  waste  management  operations, which  has  an  overhead
      structure equal to  15 percent of  its net revenue.  These services  have
      historically operated with a higher overhead structure than the Company's
      specialty contracting  operations, which has an  overhead structure equal
      to 15 percent of its net revenue.

          As a result of the foregoing, the Company incurred  an operating loss
      of $7,806,000 (negative  8 percent of net revenue)  during the year ended
      December  31, 1996, compared to operating income of $4,596,000 (5 percent
      of net revenue) during the same period in 1995. <PAGE>

          Minority interest in net loss of the TransCor subsidiary was $138,000
      for the  year ended December 31,  1996, compared to minority  interest in
      net income of $345,000 for the year ended December 31, 1995. The minority
      interest  in net income or loss of such subsidiary reflects approximately
      26 percent  of TransCor's  earnings as  a result of  the March  25, 1993,
      initial public  offering  of TransCor's  common  stock. The  decrease  in
      TransCor's earnings  between years is attributable to  the profit margins
      earned on certain solid waste management services.

          Interest  expense, net  of interest  income, increased  to $3,107,000
      during the  year ended December 31, 1996, compared to $1,418,000, for the
      year  ended December  31, 1995.   During  1996, the  Company discontinued
      recognition of interest income of approximately $551,000 on certain notes
      receivable  from   affiliates.    The   remainder  of  the   increase  is
      attributable to increases in average borrowings during the year.

          During 1996,  the Company converted a $5,700,000 note receivable from
      Cumberland  into a  common stock  investment, representing  a 30  percent
      interest in Cumberland.   The note was  converted based upon the  current
      stock market price, which was less than the underlying equity in the book
      value of Cumberland.  The  amount in excess of the underlying  equity was
      attributed to goodwill and is being amortized over 20 years.  The Company
      recorded equity in  losses of Cumberland of  approximately $37,000, which
      represents the Company's proportionate share of Cumberland's net loss for
      the period November 5, 1996, through December 31, 1996.

          The  Company's effective  tax rate  was (19.5)  percent for  the year
      ended December 31, 1996, compared to a  tax rate of 52.6 percent for  the
      year ended December 31, 1995.  The decrease in the effective tax rate was
      primarily due  to the net operating loss generated by the Company and the
      resulting  recognition  of future  tax  benefits  from  credit  and  loss
      carryforwards.   The  net operating  loss ("NOL")  generated in  the year
      ended December  31, 1996,  was approximately $11,200,000.   Approximately
      $4,500,000  will be  carried  back  to  prior  tax  years,  resulting  in
      approximately  $900,000 of  federal tax  refunds.   The remaining  NOL of
      approximately $6,700,000  will be carried  forward to offset  any taxable
      income in  future years.  For alternative  minimum tax purposes, the loss
      carryforward is  approximately $6,200,000.   Management expects  to fully
      utilize these loss  and credit  carryforwards before they  expire in  the
      year 2011; however,  in accordance with Statement of Financial Accounting
      Standards No. 109,  "Accounting for Income Taxes,"  a valuation allowance
      of approximately $1,700,000 has been recognized.  In addition to the loss
      carryforwards, the  Company  has approximately  $836,000  of  alternative
      minimum  tax  credit carryforwards  available  to  offset future  federal
      regular income taxes.  This credit does not expire.

          As a result of the foregoing, the Company incurred a net loss for the
      year ended December  31, 1996, of  $8,683,000 (negative 9 percent  of net
      revenue) compared  to  a  net income  of  $1,343,000 (1  percent  of  net
      revenue) during the same period in 1995.<PAGE>

      Liquidity and Capital Resources

          Cash provided  by operating  activities was $4,941,000,   $1,061,000,
      and  $1,124,000 for  the  years  ended  December  1995,  1996  and  1997,
      respectively.  Cash provided or (used) by the operating activities of the
      Company's solid waste management services segment amounted to $4,306,000,
      $4,464,000, and ($131,000  ) in 1995, 1996 and 1997,  respectively.  Cash
      provided  or  (used)  by  the  Company's  specialty  contracting  segment
      amounted  to $635,000,  ($3,403,000), and  $1,255,000 in  1995, 1996  and
      1997, respectively.  Cash was used by the solid waste management services
      segment operations in 1996 at expected  levels.  Cash was provided in the
      specialty contracting  operations  due  to  significant  revenue  growth,
      discussed under results of operations, offset by the increase in payments
      on  accounts payable and accrued  expenses.  Increases  or (decreases) in
      the  Company's   accounts  payable  and  accrued   expenses  amounted  to
      $7,630,000,  $2,834,000,   and  ($116,000)   in  1995,  1996   and  1997,
      respectively.  While these increases in  1995 and 1996 were generally  in
      response to increased  operating levels,  the reduction in  1997 was  the
      result  of  facility  closures in  the  solid  waste management  services
      segment. In  addition, in 1997  cash flow was provided  from decreases in
      accounts  and  notes  receivable   ($4,404,000)  and  income  tax  refund
      receivables ($952,000) and an increase in billings in excess of costs and
      estimated earnings on uncompleted contracts ($3,831,000).

          The Company made capital expenditures of $15,425,000, $6,968,000, and
      $8,341,000 in 1995, 1996, and 1997, respectively. These expenditures were
      primarily related  to the  acquisition of  equipment associated  with the
      Company's solid  waste management and utility  contracting operations. In
      addition  to  cash  expenditures  for  equipment,  the  Company  acquired
      approximately  $39,000,000 of  heavy  construction  equipment during  the
      first and fourth quarters of 1997 that, as further  discussed below, were
      previously  leased  under  operating  leases.  Since  the  equipment  was
      financed by the former lessor, the equipment  acquisitions were accounted
      for as a non-cash financing and investing activities. Management believes
      future capital expenditures will be financed by available cash resources,
      cash flow from operations and available credit resources, as needed.

          During 1997, the Company generated cash from financing  activities of
      $8,022,000.  Borrowings  in 1997  included  $5,522,000  for purchases  of
      equipment in the  solid waste management  services segment, primarily  to
      support  the Hillsborough  County contract  that began  October 1,  1997.
      Other borrowings in 1997 related primarily to working capital drawings of
      $12,200,000 on a new  $16,000,000 working capital line of  credit further
      discussed below in the specialty contract services segment. Approximately
      $7,000,000 of  the drawings on the  new line of  credit were used  to pay
      down an existing line  of credit to approximately  $4,235,000. Subsequent
      to year  end  that existing  line of  credit  was paid  in full  and  the
      available borrowing base was reduced to $2,874,000, and is used  only for
      certain stand-by letters of credit. The 1997 borrowings, coupled with the
      non-cash  equipment financing,  referred to  previously, and  the related
      payments,  resulted in  an  increase in  the  total indebtedness  of  the
      Company  to $86,046,000 at December 31, 1997 ($37,715,000 at December 31,
      1996). Current  maturities of total indebtedness amount to $17,385,000 at
      December 31, 1997 ($7,794,000 at December 31, 1996). 

          Net borrowings on credit lines and debt balances were $10,315,000 and
      $5,229,000 in 1995 and 1996, respectively. <PAGE>

          During  1996 and 1997, the Company purchased 73,828 and 76,600 shares
      of the Company's common stock on the open market for cash of $311,000 and
      $421,000, respectively.  The Company may purchase  additional shares from
      time to time if market conditions warrant such additional purchases.

          On  February 26, 1997,  the Company, through  its Kimmins Contracting
      Corp.  subsidiary, entered  into  a  credit  agreement with  a  financial
      institution that provided for  unrestricted borrowings up to $11,000,000.
      On  November 24, 1997, the credit agreement was increased to $16,000,000.
      As  of December 31, 1997, the Company has drawn approximately $12,200,000
      on the  facility, which, as noted  above, was used to  partially pay down
      bank debt.   Borrowings on this  facility are due in  February 1999.   In
      addition,  on  February  26,   1997,  the  Company  issued  approximately
      $13,041,000  of term debt to acquire heavy construction equipment used in
      the specialty contracting business that  had been leased under  operating
      leases.   The term debt requires periodic payments through February 2004.
      On November 24, 1997, proceeds of  a second term loan of $28,590,000 were
      used  to  finance  additional  operating assets  currently  used  in  the
      specialty contracting  services segment. The term  debt requires periodic
      payments through December 2002 and a balloon payment in January 2003.

          The  Company is subject to  a variety of  restrictive covenants under
      various  debt agreements with one  of its institutional  lenders. In 1997
      the  Company failed to meet the consolidated net income requirement under
      approximately $4,235,000  of its bank debt  and approximately $54,000,000
      of other financial institution debt. As of December 31, 1997, the Company
      obtained waivers for these covenants.  While management believes that the
      Company  will  maintain compliance  under  the terms  of  the agreements,
      including those  conditions amended or  waived, any further  inability to
      achieve compliance  with the  loan covenants could  affect the  Company's
      access to further borrowings or require it to secure additional equity by
      other means.

          During  the years  ended December  31, 1996  and 1997,  the Company's
      average contract and  trade receivables  were outstanding for  76 and  70
      days,  respectively.   The Company  anticipates sustaining  this rate  of
      collection for the year ended December 31, 1998. Management believes that
      the number of days outstanding for its receivables  approximates industry
      norms. Part of the Company's contracting operations is subcontracted, and
      any delay  in collections  of receivables  relating to primary  contracts
      will generally result in a delay of payment to subcontractors. 

          Effective May  31, 1998, certain assets, businesses  and contracts of
      the  waste management  segment, with  a net  book value  of approximately
      $6,100,000,  were sold  for cash  of $11,600,000.  The operations  of the
      businesses  sold had 1997 revenue  of approximately $9,200,000  and a net
      loss  of approximately $1,000,000. Cash from this transaction was used to
      pay approximately $3,800,000 of TransCor debt and $1,300,000 was advanced
      to  Kimmins.  The remaining  cash is  unrestricted  and available  to the
      Company for use in operations.

          In addition to the sales above, the  Company has discontinued the use
      of  certain assets with a net  book value of approximately $4,046,000 and
      has  placed them  for  sale. Of  these  assets, approximately  $1,800,000
      relates  to  assets  from the  discontinuance  of  a certain  remediation
      business in the specialty contracting segment.<PAGE>

          As  a result of the 1997 operating  loss incurred, which included the
      accrual of  losses for future  contract performance on  certain specialty
      contracting contracts,  and the financing  arrangements described  above,
      that had  the affect  of significantly  increasing current maturities  of
      long-term debt over levels  in previous years, the Company  has a working
      capital deficiency as  of December  31, 1997. Management  of the  Company
      anticipates   that   its   projected   operations,   coupled   with   the
      aforementioned  sale of  businesses, will  generate sufficient  levels of
      cash  to fulfill its current and  future obligations in the normal course
      of business.

          The Company had a note receivable in an original amount of $3,638,696
      from  the Apartments,  of  which  Mr. Francis  M.  Williams  is the  sole
      shareholder  of  the  corporate  general partner  and  the  sole  limited
      partner.  The  note  receivable  accrued  interest  at prime  plus  1.375
      percent,  increasing to prime plus 2 percent, with principal and interest
      payable  in  monthly  installments through  December  31,  1998,  and was
      guaranteed by Mr.  Williams. The Company did not receive  any interest or
      principal  payments during 1997 relating to this note receivable, and the
      Company has not  recognized interest  income since 1996.  The amount  due
      from the Apartments at December 31, 1996, was approximately $3,851,000.

          On October 22, 1997,  the Company contributed its note  receivable in
      an  amount of  approximately   $3,851,000 from  the Apartments  and other
      receivables  of $3,059,000  for  a non-controlling  49 percent  preferred
      limited  partnership  interest  in the  Apartments  and  a  receivable of
      $900,000  from the Apartments. The amount of $12,066,000 in excess of the
      underlying  equity was attributed to goodwill and is being amortized over
      thirty  years.  The Company  will be  allocated  49 percent  of operating
      income, losses and  cash flow.   The preference  in the Company's  equity
      interest  in  the  Apartments occurs  upon  the  sale  of the  underlying
      partnership properties. Upon the occurrence of a capital transaction, the
      Company would  receive cash  flows from  the sale or  refinancing of  the
      Apartments' assets equal to  its capital contribution prior to  any other
      partner receiving any proceeds.  The Company accounts for its  investment
      in the Apartments using the equity method.

          The Company's current bonding coverage for non-environmental projects
      is  $60,000,000  for  an  individual  project  and  $120,000,000  in  the
      aggregate.  Historically,  the Company has  obtained bonding coverage  in
      amounts up to  $8,500,000 for environmental projects  and $53,000,000 for
      non-environmental projects. However, bonding  coverage is not  guaranteed
      on  projects up  to the  above limits  because each  project has  its own
      distinct and separate bond  requirements, and it is customary  for surety
      bonding  companies to  underwrite  each surety  obligation  individually.
      Management  believes that bonding coverages are adequate for the size and
      scope of projects being performed.  

          At  December 31, 1997, the  Company had a  single material commitment
      for capital expenditures. As  part of a municipal solid  waste management
      services contract commencing in October 1998, the Company is committed to
      acquire $3,500,000 of vehicles and equipment.

          See Note 20  of Notes  to Consolidated Financial  Statements for  the
      Company's business segment information.<PAGE>

      Effects of Change in Method of Accounting

          In February  1997, the Financial Accounting  Standards Board ("FASB")
      issued Statement of Financial Accounting Standards No. 128, "Earnings per
      Share" ("SFAS No. 128"). SFAS No. 128 replaced the calculation of primary
      and fully diluted  earnings per share with basic and diluted earnings per
      share.  The  Company adopted  the provisions  of  SFAS No.  128 effective
      December  31,  1997.  All earnings  per  share  amounts  for all  periods
      presented have been restated to conform to the SFAS No. 128 requirements.
      
          In  June 1997,  the  FASB issued  Statement  of Financial  Accounting
      Standards No. 130, "Reporting Comprehensive Income ("SFAS No. 130"). SFAS
      No. 130 requires that total comprehensive income and comprehensive income
      per share be disclosed with  equal prominence as net income and  earnings
      per  share. Comprehensive income  is defined as  changes in stockholders'
      equity   exclusive  of   transactions   with  owners   such  as   capital
      contributions and dividends. SFAS  No. 130 is effective for  fiscal years
      beginning after December 15, 1997.  Management is currently assessing the
      impact of SFAS No. 130, but does not expect its effect to be material.

          In June  1997,  the FASB  issued  Statement of  Financial  Accounting
      Standards  No.  131, "Disclosures  about  Segments of  an  Enterprise and
      Related Information" ("SFAS No. 131"), which supercedes SFAS No. 14. SFAS
      No.  131 uses a management  approach to report  financial and descriptive
      information about a Company's  operating segments. Operating segments are
      revenue-producing   components  of  the  enterprise  for  which  separate
      financial   information   is  produced   internally  for   the  Company's
      management.  SFAS No. 131 is  effective for fiscal  years beginning after
      December 31, 1997. Management  is currently assessing the impact  of SFAS
      No. 131, but does not expect its effect to be material.

          In April 1997, the American Institute of Certified Public Accountants
      issued  an Exposure Draft  of a proposed  SOP, Reporting on  the Costs of
      Start-up Activities.  Start-up costs are defined broadly  in the proposed
      SOP  as  those one-time  activities related  to  opening a  new facility,
      introducing  a new  product  or service,  conducting  business in  a  new
      territory,  conducting  business  with   a  new  class  of   customer  or
      beneficiary,  initiating  a  new  process  in  an  existing facility,  or
      commencing some  new operation. Start-up costs,  including organizational
      costs, would be expensed as incurred under the proposed SOP. The proposed
      SOP would be effective for most entities for fiscal years beginning after
      December 15,  1998. The SOP  will require the Company,  upon adoption, to
      write off as a cumulative effect of a change in  accounting principle any
      previously capitalized start-up or  organization costs. Therefore, in the
      first quarter of 1999, the Company will record a change for the remaining
      unamortized  balance  of  contract   start-up  costs  which  approximates
      $875,000 at December 31, 1997.

      Impact of Year 2000

          Some  of the Company's older computer programs were written using two
      digits  rather  than four  digits  to define  the applicable  year.  As a
      result,  those  computer  programs   have  time-sensitive  software  that
      recognize a date using "00" as the  year 1900 rather than the year  2000.
      This could cause a system failure  or miscalculations causing disruptions
      of operations,  including, among other  things, a temporary  inability to
      process transactions, send invoices, or engage in similar normal business
      activities.<PAGE>

          The Company has completed  an assessment and will  have to modify  or
      replace  portions of  its  software so  that  its computer  systems  will
      function properly with respect to dates in the  year 2000 and thereafter.
      The  total Year  2000  project  is  estimated to  be  immaterial  to  the
      financial  statements.  To  date,  the Company's  incremental  costs  for
      assessment  of the  Year 2000  issue, the  development of  a modification
      plan,  and  the  purchase  of  new  software  have  been   insignificant.
      Management believes  that total costs, when completed, will be immaterial
      to the financial statements.

          The majority of software used by the Company is licensed from various
      software providers who  are currently  updating the programs  to be  Year
      2000  compliant. In-house developed programs  comprise a small portion of
      the  total  software utilized,  and the  majority  of these  programs are
      believed to be Year 2000 compliant.

          The project is  estimated to be completed not later than December 31,
      1998, which is prior to any anticipated impact on the Company's operating
      system. The Company believes, with modifications to existing software and
      conversions   to  new  software,  the  Year  2000  issue  will  not  pose
      significant operational  problems for  its computer systems.  However, if
      such modifications and  conversions are  not made, or  are not  completed
      timely,  the  Year  2000 Issue  could  have  a  material  impact  on  the
      operations of the Company.

          The  Company has  initiated  formal communications  with  all of  its
      significant  suppliers and  large customers  to determine  the extent  to
      which  the  Company's interface  systems  are vulnerable  to  those third
      parties' failure  to remediate their  own Year  2000 Issues. There  is no
      guarantee  that the  systems of  other companies  on which  the Company's
      systems  rely will  be  timely converted  and would  not have  an adverse
      effect on the Company's systems.

          The  costs of the project and the  date on which the Company believes
      it  will complete the Year  2000 modifications are  based on management's
      best  estimates, which  were  derived utilizing  numerous assumptions  of
      future events, including the  continued availability of certain resources
      and  other factors.  However,  there  can  be  no  assurance  that  these
      estimates will  be achieved  and actual results  could differ  materially
      from  those anticipated. Specific factors  that might cause such material
      differences include, but are not limited to, the availability and cost of
      personnel trained  in this area,  the ability to  locate and  correct all
      relevant computer codes, and similar uncertainties.<PAGE>

      Forward-Looking Information

          The foregoing discussion in  "Management's Discussion and Analysis of
      Financial Condition  and Results of Operations"  contains forward-looking
      statements that reflect management's current views with respect to future
      events and  financial  performance.   Such statements  involve risks  and
      uncertainties, and  there are certain important factors  that could cause
      actual results to differ materially from those  anticipated.  Some of the
      important factors  that could cause  actual results to  differ materially
      from  those  anticipated  include,  but  are  not  limited  to,  economic
      conditions, competitive  factors, and  other uncertainties, all  of which
      are difficult to predict and many of which  are beyond the control of the
      Company.  Due  to such uncertainties and risk, readers  are cautioned not
      to place undue  reliance on such forward-looking  statements, which speak
      only as of the date hereof.

      Effect of Inflation

          Inflation has not had, and is not expected to have, a material impact
      upon  the Company's operations.  If inflation increases, the Company will
      attempt to  increase its  prices to offset  its increased  expenses.   No
      assurance  can be  given,  however,  that the  Company  will be  able  to
      adequately increase its prices in response to inflation.

      Item 8.   Financial Statements and Supplementary Data


                                    KIMMINS CORP.
                          INDEX TO FINANCIAL STATEMENTS AND 
                             FINANCIAL STATEMENT SCHEDULE
                                                                           Page
                                                                           ----
      Report of Independent Certified Public Accountants  . . . . . . . . .  21

      Consolidated balance sheets at December 31, 1996 and 1997 . . . . . .  22

      Consolidated statements of operations for each of the 
        three years in the period ended December 31, 1997 . . . . . . . . .  24

      Consolidated statements of stockholders' equity for each of the 
        three years in the period ended December 31, 1997 . . . . . . . . .  25

      Consolidated statements of cash flows for each of the three years 
        in the period ended December 31, 1997 . . . . . . . . . . . . . . .  26

      Notes to consolidated financial statements  . . . . . . . . . . . . .  27


      Financial statement schedule:

      Schedule II - Valuation and qualifying accounts . . . . . . . . . . . S-1

           All  other schedules  are omitted since  the required information is
      not present in amounts  sufficient to require submission of  the schedule
      or  because  the  information  required  is  included  in  the  financial
      statements and notes thereto.<PAGE>

                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




      The Board of Directors and Stockholders
      Kimmins Corp.


          We  have  audited the  accompanying  consolidated  balance sheets  of
      Kimmins  Corp. as  of  December  31,  1996  and  1997,  and  the  related
      consolidated statements  of operations,  stockholders'  equity, and  cash
      flows for each of the three years in the period ended December 31,  1997.
      Our audits also included  the financial statement schedule listed  in the
      index  at Item  14(a). These  financial statements  and schedule  are the
      responsibility  of the  Company's  management. Our  responsibility is  to
      express an opinion on  these financial statements and the  schedule 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 consolidated  financial statements  referred to
      above  present  fairly,  in   all  material  respects,  the  consolidated
      financial position  of Kimmins Corp. at  December 31, 1996  and 1997, and
      the consolidated 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.  Also,  in  our opinion,  the
      related financial statement schedule, when considered  in relation to the
      basic  financial  statements taken  as a  whole,  presents fairly  in all
      material respects the information set forth therein.


                                              /s/ Ernst & Young LLP




      Tampa, Florida
      June 18, 1998<PAGE>

                                    KIMMINS CORP.

                             CONSOLIDATED BALANCE SHEETS

                                        ASSETS
      

                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
      Current assets:                               
        Cash  . . . . . . . . . . . . . . . . . . . $    968,638  $  3,674,027 
        Accounts receivable:                        
         Contract and trade   . . . . . . . . . . .   20,060,169    23,627,522 
         Affiliates . . . . . . . . . . . . . . . .    1,648,529       104,658 
        Costs and estimated earnings in excess of   
         billings on uncompleted contracts  . . . .   15,967,872     5,434,123 
        Income tax refund receivable  . . . . . . .    1,199,775       247,561 
        Deferred income tax, net  . . . . . . . . .    1,499,329     1,980,148 
        Property held for sale  . . . . . . . . . .        -           733,658 
        Other current assets  . . . . . . . . . . .      512,110       484,756 
                                                    ------------- -------------
         Total current assets . . . . . . . . . . .   41,856,422    36,286,453 
                                                    ------------- -------------
                                                    
      Property and equipment, net . . . . . . . . .   37,012,994    72,775,007 
      Property held for sale  . . . . . . . . . . .    1,864,527     3,312,397 
      Intangible assets, net  . . . . . . . . . . .      898,853       606,975 
      Non-current portion of costs and estimated    
        earnings in excess of billings on           
        uncompleted contracts . . . . . . . . . .          -         9,130,090 
      Accounts receivable - affiliates  . . . . . .    1,450,716       900,000 
      Note receivable - affiliate . . . . . . . . .    3,850,727         -     
      Investment in the Apartments  . . . . . . . .        -         5,862,067 
      Investment in Cumberland Technologies, Inc. .    5,105,632     4,991,956 
      Other assets, net . . . . . . . . . . . . . .    1,043,036     1,151,045 
                                                    ------------- -------------
                                                    $ 93,082,907  $135,015,990 
                                                    ============= =============


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

                                    KIMMINS CORP.

                             CONSOLIDATED BALANCE SHEETS

                         LIABILITIES AND STOCKHOLDERS' EQUITY


                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
      Current liabilities:                          
        Accounts payable - trade  . . . . . . . . . $ 19,169,607  $ 19,332,517 
        Accrued expenses  . . . . . . . . . . . . .    8,072,187     7,793,596 
        Billings in excess of costs and estimated   
         earnings on uncompleted contracts  . . . .      752,287     4,583,533 
        Current portion of long-term debt . . . . .    7,794,848    17,385,838 
        Current portion of Employee Stock           
         Ownership Plan trust debt  . . . . . . . .      480,000       480,000 
                                                    ------------- -------------
         Total current liabilities  . . . . . . . .   36,268,929    49,575,484 
                                                    ------------- -------------
                                                    
      Long-term debt  . . . . . . . . . . . . . . .   29,920,396    68,660,873 
      Employee Stock Ownership Plan Trust debt  . .    1,440,000       960,000 
      Deferred income taxes   . . . . . . . . . . .    4,159,605     3,527,480 
      Minority interest in subsidiary   . . . . . .    3,440,681     2,898,777 
      Commitments and contingencies (Note 16) . . .        -             -     
                                                    
      Stockholders' equity:                         
        Preferred stock, $.001 par value; 1,000,000 
         shares authorized, none issued and                               -    
         outstanding  . . . . . . . . . . . . . . .         -    
        Common stock, $.001 par value; 32,500,000                        4,447 
         shares authorized; 4,447,397 shares issued 
         and outstanding  . . . . . . . . . . . . .        4,447 
        Class B common stock, $.001 par value;                           2,292 
         10,000,000 shares authorized, 2,291,569
         shares issued and outstanding  . . . . . .        2,292 
        Capital in excess of par value  . . . . . .   18,730,173    18,730,173 
        Retained earnings (deficit) . . . . . . . .    1,228,167    (7,290,073)
        Unearned employee compensation from         
         Employee Stock Ownership Plan Trust  . . .   (1,800,000)   (1,320,000)
                                                    ------------- -------------
                                                      18,165,079    10,126,839 
        Less treasury stock, at cost (73,828 shares 
         and 150,428 shares)  . . . . . . . . . . .     (311,783)     (733,463)
                                                    ------------- -------------
         Total stockholders' equity . . . . . . . .   17,853,296     9,393,376 
                                                    ------------- -------------
                                                    $ 93,082,907  $135,015,990 
                                                    ============= =============

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

                                    KIMMINS CORP.

                        CONSOLIDATED STATEMENTS OF OPERATIONS


                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
      Revenue:                                      
        Gross revenue . . . . . . . . $111,346,075  $113,240,908  $135,311,067 
        Outside services, at cost . .  (15,919,816)  (15,264,042)  (21,785,161)
                                      ------------- ------------- -------------
        Net revenue . . . . . . . . .   95,426,259    97,976,866   113,525,906 
                                                    
      Costs and expenses:                           
        Cost of revenue earned  . . .   77,935,865    90,962,103   103,401,549 
        Selling, general and                        
         administrative expenses  . .   12,894,121    14,821,251    15,917,357 
                                      ------------- ------------- -------------
      Operating income (loss) . . . .    4,596,273    (7,806,488)   (5,793,000)

                                                    
      Minority interest in net                      
        (income) loss of                            
        subsidiary  . . . . . . . . .     (345,320)      138,060       541,904 
                                                    
      Interest expense (net of                      
        interest income of                          
        approximately $1,005,000,                   
        $569,000, and $169,000 for the              
        years ended December 31, 1995,              
        1996, and 1997,                             
        respectively) . . . . . . . .    1,417,802     3,107,000     4,435,853 
                                      ------------- ------------- -------------
      Income (loss) before provision                
        for income taxes (benefit)  .    2,833,151   (10,775,428)   (9,686,949)
                                                    
      Provision for income taxes                    
        (benefit):                                  
         Current  . . . . . . . . . .      661,472      (934,864)      (55,765)
         Deferred . . . . . . . . . .      829,096    (1,157,125)   (1,112,944)
                                      ------------- ------------- -------------
                                         1,490,568    (2,091,989)   (1,168,709)
                                      ------------- ------------- -------------
                                      $  1,342,583  $ (8,683,439) $ (8,518,240)
      Net income (loss)   . . . . . . ============= ============= =============


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

                                    KIMMINS CORP.

                  CONSOLIDATED STATEMENTS OF OPERATIONS (continued)


                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
      Per Share Data:                               
        Basic income (loss)                         
         per share  . . . . . . . . . $        .30  $      (1.96) $      (1.97)
                                      ============= ============= =============
        Diluted income (loss)                       
         per share  . . . . . . . . . $        .29  $      (1.96) $      (1.97)
                                      ============= ============= =============
                                                    
        Weighted average number of                  
         shares outstanding used in
         computation:
          Basic . . . . . . . . . . .    4,444,685     4,420,175     4,318,481 
                                      ============= ============= =============
          Diluted . . . . . . . . . .    4,578,342     4,420,175     4,318,481 
                                      ============= ============= =============

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


      <TABLE>
                                    KIMMINS CORP.

                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
      <CAPTION>                                                                                             
                                                 
                                                 
                                                 
                                                       Class B
                                  Common Stock      Common Stock    Capital in
                               ----------------- -----------------   Excess of
                                 Shares    Amount   Shares   Amount   Par Value 
                               ---------- ------- ---------- ------- -----------
      <S>                      <C>        <C>     <C>        <C>     <C>
      Balance at                                            
       January 1, 1995  . . .   4,442,997 $ 4,443  2,291,569 $ 2,292 $18,710,378
      Stock options                                         
       exercised  . . . . . .       4,400       4      -        -         19,795
      Employee compensation                                 
        from Employee Stock                                 
       Ownership Trust  . . .        -         -        -        -         -
      Net income  . . . . . .        -         -        -        -         - 
                               ---------- ------- ---------- ------- -----------
      Balance at December 31,                               
       1995 . . . . . . . . .   4,447,397   4,447  2,291,569   2,292  18,730,173
                                                            
      Employee compensation                                 
       from Employee Stock                                  
       Ownership Trust  . . .        -        -        -        -         -     
      Purchase of treasury                                  
       stock, at cost . . . .        -        -        -        -         -     
      Net loss  . . . . . . .        -        -        -        -         -
                               ---------- ------- ---------- ------- -----------
      Balance at December 31,                               
        1996  . . . . . . . .   4,447,397   4,447 2,291,569    2,292  18,730,173
      Employee compensation                                 
       from Employee Stock                                  
       Ownership Trust  . . .        -        -        -        -         -     
      Purchase of treasury                                  
        stock, at cost  . . .        -        -        -        -         -     
      Net loss  . . . . . . .        -        -        -        -         -     
                               ---------- ------- ---------- ------- -----------
      Balance at December 31,   4,447,397 $ 4,447  2,291,569 $ 2,292 $18,730,173
        1997  . . . . . . . .  ========== ======= ========== ======= ===========
      </TABLE> 
                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>

      <TABLE>
                                    KIMMINS CORP.

             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)

      <CAPTION>
                                             Unearned  
                                             Employee  
                                              Compen-  
                                              sation   
                                               from    
                                             Employee                   
                                 Retained      Stock                  Total
                                 Earnings    Ownership  Treasury  Stockholders'
                                (Deficit)   Plan Trust    Stock      Equity    
                               ----------------------- --------- -------------
      <S>                      <C>         <C>         <C>       <C>
      Balance at January 1,                            
       1995 . . . . . . . . .  $ 8,569,023 $(2,771,934)$   -     $  24,514,202 
      Stock options                                    
       exercised  . . . . . .       -            -         -            19,799 
      Employee compensation                            
       from Employee Stock                             
       Ownership Trust  . . .       -          504,852     -           504,852 
      Net income  . . . . . .    1,342,583       -         -         1,342,583 
                               ----------- ----------- --------- -------------
      Balance at December 31,                          
       1995 . . . . . . . . .    9,911,606  (2,267,082)    -         26,381,436
                                                       
      Employee compensation                            
       from Employee Stock                             
       Ownership Trust  . . .        -         467,082     -           467,082 
      Purchase of treasury                             
       stock, at cost . . . .        -           -      (311,783)     (311,783)
      Net loss  . . . . . . .   (8,683,439)      -         -        (8,683,439)
                               ----------- ----------- --------- -------------
      Balance at December 31,                          
        1996  . . . . . . . .    1,228,167  (1,800,000) (311,783)   17,853,296 
      Employee compensation                            
       from Employee Stock                             
       Ownership Trust  . . .        -         480,000     -           480,000 
      Purchase of treasury                             
       stock, at cost . . . .        -           -      (421,680)     (421,680)
      Net loss  . . . . . . .   (8,518,240)      -         -        (8,518,240)
                               ----------- ----------- --------- -------------
      Balance at December 31,                          
        1997  . . . . . . . .  $(7,290,073)$(1,320,000)$(733,463)$   9,393,376 
                               =========== =========== ========= =============
      </TABLE> 
                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>

                                    KIMMINS CORP.
      
                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
      Cash flows from operating                     
        activities:
         Net income (loss)  . . . . . $  1,342,583  $ (8,683,439) $ (8,518,240)
          Adjustments to reconcile                  
           net income (loss) to net
           cash provided by operating
           activities:
             Depreciation and                       
              amortization  . . . . .    4,301,711     5,650,341     8,796,152 
             Provision for                          
              uncollectible accounts                
              receivable  . . . . . .      404,455       430,381       772,522 
             Minority interest in                   
              income (loss) of                      
              subsidiary  . . . . . .      345,320      (138,060)     (541,904)
             (Gain) loss on disposal                
              of property and                       
              equipment . . . . . . .     (241,034)      (22,359)      (94,376)
             Accrued interest on term               
              note  . . . . . . . . .     (454,772)     (372,066)        -     
             Equity in losses of                    
              investment  . . . . . .        -            36,766        29,556 
             Deferred income taxes  .      829,096    (1,157,125)   (1,112,944)
             Unearned employee                      
              compensation from                     
              Employee Stock                        
              Ownership Plan Trust  .      504,852       467,082       480,000 
             Changes in operating                   
              assets and liabilities:
               Accounts and notes                   
                receivable  . . . . .     (881,808)    1,520,094    (4,404,372)
               Costs and estimated                  
                earnings in excess of               
                billings on                         
                uncompleted                         
                contracts   . . . . .   (6,835,059)    1,033,414     1,403,660 
               Income tax refund                    
                receivable  . . . . .     (371,087)     (149,150)      952,214 
               Other assets . . . . .     (864,933)     (535,230)     (353,338)
               Accounts payable -                   
                trade   . . . . . . .    4,054,862     1,811,337       162,910 
               Accrued expenses . . .    3,575,357     1,023,055      (278,591)


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

                                    KIMMINS CORP.
      
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
               Billings in excess of                
                costs and estimated                 
                earnings on                         
                uncompleted                         
                contracts   . . . . .     (768,934)      145,673     3,831,246 
                                      ------------- ------------- -------------
                Total adjustments   .    3,598,026     9,744,153     9,642,735 
                                      ------------- ------------- -------------
      Net cash provided by operating                
        activities  . . . . . . . . .    4,940,609     1,060,714     1,124,495 
                                      ------------- ------------- -------------
      Cash flows from investing                     
        activities:
         Capital expenditures                       
          including $500,000 of                     
          business acquisitions                     
          during 1996 . . . . . . . .  (15,425,379)   (6,968,009)   (8,341,461)
         Proceeds from sale of                      
          property and equipment  . .      851,623       486,835     1,900,426 
                                      ------------- ------------- -------------
      Net cash used by investing                    
        activities  . . . . . . . . .  (14,573,756)   (6,481,174)   (6,441,035)
                                      ------------- ------------- -------------
      Cash flows from financing                     
        activities:
         Proceeds from long-term                    
          debt  . . . . . . . . . . .   19,611,436    14,556,332    24,842,174 
         Repayments of long-term                    
          debt  . . . . . . . . . . .   (8,716,731)   (8,535,914)  (15,918,565)
         Repayments of Employee Stock               
          Ownership Plan Trust                      
          debt  . . . . . . . . . . .     (600,000)     (480,000)     (480,000)
         Purchase of treasury                       
          stock . . . . . . . . . . .        -          (311,783)     (421,680)
         Proceeds from stock                        
          options . . . . . . . . . .       19,799         -             -     
                                      ------------- ------------- -------------
      Net cash provided (used) by                   
        financing activities  . . . .   10,314,504     5,228,635     8,021,929 
                                      ------------- ------------- -------------
      Net increase (decrease) in                    
        cash  . . . . . . . . . . . .      681,357      (191,825)    2,705,389 
      Cash, beginning of year . . . .      479,106     1,160,463       968,638 
                                      ------------- ------------- -------------
      Cash, end of year . . . . . . . $  1,160,463  $    968,638  $  3,674,027 
                                      ============= ============= =============

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

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant accounting policies

          Organization - Kimmins Corp.  and its subsidiaries (collectively, the
      "Company")  operate  two  business  segments:    solid  waste  management
      services and specialty contracting services.   The Company provides solid
      waste  management services  to  commercial, industrial,  residential and,
      municipal  customers in  the  state of  Florida.   The  Company  provides
      specialty  contracting services  in  the south  and northeast,  including
      infrastructure  development;  underground construction;  road  work; site
      remediation  services  such  as   excavation,  removal  and  disposal  of
      contaminated  soil; facilities demolition  and dismantling;  and asbestos
      abatement.

          Principles of  consolidation - The consolidated  financial statements
      include the accounts of Kimmins and  its subsidiaries, including TransCor
      Waste Services,  Inc. ("TransCor"), a  74 percent  owned subsidiary.  All
      material intercompany transactions have been eliminated.

          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  amounts
      reported  in  the financial  statements  and  accompanying notes.  Actual
      results could differ from those estimates.

          Concentrations of  credit risk - Financial  instruments which subject
      the Company to concentrations  of credit risk consist primarily  of trade
      receivables in the  State of  Florida.  Trade  receivables are  comprised
      primarily of amounts  due from  solid waste management  customers and  on
      specialty  contracting  contracts.    Credit  is  extended  based  on  an
      evaluation  of  the  customer's   financial  condition.    Collateral  is
      generally not required; however, the Company  has the ability to file for
      a  mechanic's  lien   to  protect  its  interest   in  contract  accounts
      receivable. Credit losses  are provided for  in the financial  statements
      and have been within management's expectations.
      
          A  significant  portion  of  the  Company's  solid  waste  management
      business  is  conducted  under  contracts  with  municipal  customers  in
      Florida.  These contracts have varying terms and are typically subject to
      renegotiation or  reproposal by  the respective municipalities.   Revenue
      from these contracts amount to 15  percent, 24 percent, and 22 percent of
      gross  revenue during 1995, 1996  and 1997, respectively.   No individual
      municipal contract contributed revenue  greater than 10 percent  of total
      net revenue in any year presented.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          Accounts receivable  - trade, net includes $1,322,000 and $217,000 as
      of December 31, 1996 and 1997, respectively, related to a municipal solid
      waste  management contract with St. Lucie County.  Unlike other municipal
      solid  waste management contracts, St. Lucie  County required the Company
      to bill and collect  directly from individual property owners.   Pursuant
      to  St. Lucie County ordinances,  property owners that  are delinquent in
      payment  are subject  to lien  rules.   The Company  has placed  liens on
      approximately   2,250  and   2,120  individual   properties  representing
      approximately $511,000 and $474,000  of the gross balance as  of December
      31, 1996  and 1997, respectively.  Management intends to  file additional
      liens  when considered appropriate, and all such liens will be maintained
      in accordance with  applicable laws  until the  outstanding balances  are
      recovered by payment, judgement, foreclosure, or other action.

          Intangible  assets -  Intangible  assets consist  principally of  the
      excess of costs over fair market value of the net assets  of the acquired
      solid waste management business, which  are amortized on a  straight-line
      basis  over twenty years,  and customer lists,  which are  amortized on a
      straight-line basis  over five  years. Amortization expense  was $67,000,
      $124,000,  and $109,000 for the  years ended December  31, 1995, 1996 and
      1997, respectively.   Accumulated amortization was approximately $191,000
      and $245,000 at December 31, 1996 and 1997, respectively. 

          Investments  -  The Company's  30  percent  investment in  Cumberland
      Technologies,  Inc.  ("Cumberland") is  accounted  for  using the  equity
      method   of  accounting.   The  Company's   49  percent   investments  in
      Summerbreeze  Apartments,  Ltd.,  and  Sunshadow  Apartments,  Ltd.  (the
      "Apartments"),  are  also  accounted  for  using  the  equity  method  of
      accounting. The  original carrying  amounts in  excess of  the underlying
      equity in these companies is amortized over the estimated useful  life of
      the  investment. The  estimated  useful lives  of  these intangibles  are
      twenty years for Cumberland and thirty years for the Apartments.

          Other assets -  Other assets consist primarily  of pre-contract costs
      associated  with residential  solid waste  management  contracts obtained
      during 1996 and  1997, which are amortized on  a straight-line basis over
      five  years,  the  term  of the  contracts,  and  loan  costs, which  are
      amortized over the term of the loans.  Amortization expense was $197,000,
      $280,000, and  $272,000 for the years  ended December 31, 1995,  1996 and
      1997, respectively.   Accumulated amortization was  $637,000 and $909,000
      at December  31,  1996  and  1997,  respectively.  See  "Recently  Issued
      Accounting Standards."

          Income  taxes - Income taxes  have been provided  using the liability
      method.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          Contracts and  revenue recognition - Contracts generally range from 6
      to  18 months in duration,  and earnings from  contracting operations are
      reported   under  the   percentage-of-completion  method   for  financial
      statement purposes. The estimated earnings for each contract reflected in
      the   accompanying  financial  statements  represent  the  percentage  of
      estimated  total earnings that costs  incurred to date  bear to estimated
      total  costs, based on the  Company's current estimates.  With respect to
      contracts that extend over  one or more accounting periods,  revisions in
      costs  and earnings estimates are  reflected in the  period the revisions
      become known. When current  estimates of total contract costs  indicate a
      loss,  provision is  made for  the entire  estimated loss  in the  period
      indications of a  loss become  known. The  estimates can  be affected  by
      uncertainties,  such as  weather  related delays,  and  it is  reasonably
      possible that a change in estimate could occur in the near term.

          Change  orders  are  modifications   to  an  original  contract  that
      effectively change  the scope  and/or price  of the  contract.   They may
      include  changes  in  specifications  or  design,  method  or  manner  of
      performance,  facilities,  equipment,  materials,  site,  or  period  for
      completion of  the work.  Certain  change orders may be  priced under the
      terms of  the contract.  Other  change orders are unpriced;  that is, the
      work to be performed is defined;  however, the adjustment to the contract
      price is negotiated subsequent  to performance.  Finally, in  some cases,
      both scope  and price of a change order may  be unapproved or in dispute.
      Accounting  for change  orders depends  on the  underlying circumstances,
      which  may differ  for each change  order depending on  the customer, the
      contract,  and the  nature of  the change.   The  Company  evaluates each
      change order  according to its  characteristics and the  circumstances in
      which they occur.

          Contract  revenue and  associated  profit are  recognized for  change
      orders  that  have  been approved  by  the  customer  and the  contractor
      regarding both scope  and price to the extent performance  related to the
      change order has occurred.

          Accounting  for change orders, where  either scope or  price have not
      been  determined,  depends on  careful  consideration  of the  underlying
      characteristics  and  the circumstances  in which  they  occur.   For all
      unpriced change orders,  recovery is deemed probable if the  terms of the
      contracts  or other applicable legal principles provide a legal basis for
      recoverability,  the costs  incurred are  objective and  verifiable, and,
      finally,  all future events necessary  for recovery are  more likely than
      not to occur.   The Company considers the following factors in evaluating
      whether recovery is  probable:   the customer's written  approval of  the
      scope and/or  price of the change order,  the objectivity, verifiability,
      and  reasonableness of  underlying  accounting  documentation for  change
      order costs, and the Company's experience in negotiating change orders in
      similar instances.  <PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          The following  guidelines are utilized  by the Company  in accounting
      for  change orders under  which either the  scope or price  have not been
      approved by the customer.

          A.  Costs directly  attributable to change orders  whose scope and/or
              price is not determinable  are charged directly to operations  in
              the period in which the  costs are incurred if it is not probable
              that the costs will be recovered through a change in the contract
              price.

          B.  If it  is probable  that the  costs will  be recovered  through a
              change in the contract  price, the costs are treated  as costs of
              contract performance in the period in which they are incurred and
              contract  revenue  is recognized  to  the  extent  of  the  costs
              incurred.  Costs incurred in excess of amounts that are  probable
              of recovery are charged directly to operations when incurred.

          C.  In the  case of change orders  that are approved as  to scope but
              not price,  profit recognition  is deferred until receipt  of the
              priced change order.

          Contract claims  are  amounts  incurred  by the  Company  related  to
      contract changes that are unapproved  as to both scope and price,  or are
      directly disputed or contested as to either, by the customer.  Claims are
      amounts in excess  of the agreed contract price  (or amounts not included
      in the original contract  price) that are due to  customer-caused delays,
      errors  in specification  and  designs, contract  terminations, or  other
      causes  of  unanticipated  additional  costs.    The  Company  recognizes
      contract revenue relating to claims  to the extent of its costs  incurred
      only if it is probable that the claim will result  in additional contract
      revenue and  if the amount of  contract revenue and related  costs can be
      reliably  estimated.    Those  two  requirements  are  satisfied  by  the
      existence of all of the following conditions:

          A.  The  contract or  other  applicable legal  principles  provides a
              legal basis for the claim; or a legal opinion has  been obtained,
              stating that the Company is entitled to recover amounts under the
              contract or other applicable legal principles.

          B.  Additional costs are caused by circumstances that were unforeseen
              at the  contract date and are  not the result of  deficiencies in
              the contractor's performance.

          C.  Costs incurred by the Company that are associated with the  claim
              are identifiable and reasonable in view of the work performed.

          D.  The evidence supporting the claim is objective and verifiable.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          In evaluating the probability  of recovery and the estimation  of the
      amounts  that  will  be  recovered, the  Company  consults  with  outside
      consultants and legal counsel  as the claims progress through  the stages
      of negotiations, actual filing of formal claims, and/or litigation. Legal
      counsel has been engaged for  the majority of the claims, both  in number
      and recorded amounts.

          For those claims (see Note 5) where outside counsel has  been engaged
      to review  the claim, the recorded amount is not in excess of the amounts
      estimated by outside counsel to be recoverable.

          Except in rare circumstances,  claim preparation and legal  costs are
      expensed as incurred.  Exceptions include instances in which the contract
      document  provides  for their  recovery or  legal  costs are  incurred to
      pursue  approved settlements  by court  ruling, binding  arbitration, and
      otherwise.   In  all instances  where such  amounts are  recorded,  it is
      probable  that the amounts  associated with  claim preparation  and legal
      costs will be recovered.  As of December  31, 1996 and 1997, $295,000 and
      $0, respectively, of the claim preparation and legal costs were deferred.

          Fees  arising from  services  other than  contracting activities  are
      recognized when the negotiated services are provided.

          Advertising  costs - Advertising costs  are expensed as incurred. For
      the  years  ended December  31, 1995,  1996  and 1997,  TransCor expensed
      approximately $88,000, $114,000 and $536,000, respectively in advertising
      costs.

          Stock based compensation  - The  Company grants stock  options for  a
      fixed  number of shares to employees with  an exercise price equal to the
      fair value of the shares  at the date of grant. The  Company accounts for
      stock  option  grants  in  accordance with  Accounting  Principles  Board
      Opinion  No. 25,  "Accounting for  Stock Issued  to Employees"  ("APB No.
      25"), and, accordingly, recognizes no  compensation expense for the stock
      option grants.

          In October  1995, the  Financial Accounting Standards  Board ("FASB")
      issued  Statement No. 123 ("SFAS No. 123"), "Accounting and Disclosure of
      Stock-Based  Compensation,"  which  encourages,  but  does  not  require,
      companies to recognize stock awards based on their fair value at the date
      of grant.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          Recently  issued accounting  standards -  In February 1997,  the FASB
      issued Statement of Financial Accounting Standards No. 128, "Earnings per
      Share" ("SFAS No.  128"), which establishes  standards for computing  and
      presenting  earnings per share. SFAS No. 128 replaces the presentation of
      primary  and  fully diluted  earnings per  share  with basic  and diluted
      earnings  per share, respectively. Basic  earnings per share are computed
      by  dividing income  available  to common  stockholders  by the  weighted
      average number  of  common shares  outstanding  for the  period.  Diluted
      earnings per share  are computed  similar to fully  diluted earnings  per
      share.  All  earnings per share amounts have been  restated to conform to
      SFAS No. 128 requirements. See Note 19 of Notes to Consolidated Financial
      Statements for earnings per share calculations.

          In June  1997,  the FASB  issued  Statement of  Financial  Accounting
      Standards No. 130, "Reporting Comprehensive Income ("SFAS No. 130"). SFAS
      No. 130 requires that total comprehensive income and comprehensive income
      per share be  disclosed with equal prominence as net  income and earnings
      per share. Comprehensive  income is defined  as changes in  stockholders'
      equity   exclusive  of   transactions   with  owners   such  as   capital
      contributions and dividends. SFAS  No. 130 is effective for  fiscal years
      beginning after December 15, 1997.  Management is currently assessing the
      impact of SFAS No. 130, but does not expect its effect to be material.

          In  June  1997, the  FASB  issued Statement  of  Financial Accounting
      Standards  No. 131,  "Disclosures  about Segments  of  an Enterprise  and
      Related   Information"  ("SFAS  No.  131"),  which  supercedes  Financial
      Accounting  Standards No. 14. SFAS No. 131  uses a management approach to
      report financial and descriptive  information about a Company's operating
      segments. Operating  segments  are revenue-producing  components  of  the
      enterprise  for   which  separate   financial  information   is  produced
      internally  for the Company's management.  SFAS No. 131  is effective for
      fiscal years beginning  after December 31, 1997. Management  is currently
      assessing the  impact of SFAS No. 131, but  does not expect its effect to
      be material.

          Proposed accounting standards - In April 1997, the American Institute
      of  Certified Public Accountants issued  an Exposure Draft  of a proposed
      SOP,  Reporting on the Costs  of Start-up Activities.  Start-up costs are
      defined  broadly in the proposed SOP as those one-time activities related
      to  opening a  new  facility,  introducing  a  new  product  or  service,
      conducting  business in a new  territory, conducting business  with a new
      class of customer or beneficiary, initiating a new process in an existing
      facility,  or commencing  some new  operation. Start-up  costs, including
      organizational  costs, would be expensed  as incurred under  the SOP. The
      SOP  is  effective for  most entities  for  fiscal years  beginning after
      December 15,  1998. The SOP  will require the Company,  upon adoption, to
      write off  as a cumulative effect of a change in accounting principle any
      previously capitalized start-up or  organization costs. Therefore, in the
      first  quarter of  1999,  the  Company  will  charge  off  the  remaining
      unamortized  balance  of  contract  start-up  costs   which  approximates
      $875,000 at December 31, 1997.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      1.  Organization and summary of significant 
          accounting policies (continued)

          Supplemental statements of cash flows information - 

                                              Years ended December 31,         
                                      ---------------------------------------- 
                                           1995         1996          1997     
                                      ------------- ------------- -------------
           Cash paid:                               
             Interest . . . . . . . . $  2,423,000  $  3,524,000  $  4,543,000 
             Income taxes . . . . . . $  1,453,000  $     28,000  $     30,000 
           Non-cash investing and                   
           financing activity:
             Seller financing of      $      -      $      -      $ 39,408,000 
             equipment addition . . . 

          Reclassification - Certain amounts in the 1996 consolidated financial
      statements have been reclassified to conform to the 1997 presentation.

      2.  Business acquisitions

          On  March  31,   1995,  KRC  acquired  certain   assets  from  County
      Sanitation, Inc., for $2,267,000  relating to its solid  waste management
      operations.  This acquisition  has been accounted for under  the purchase
      method  of  accounting and,  accordingly,  the  purchase  price has  been
      allocated to the  assets acquired (approximately $1,415,000) based on the
      estimated  fair values at  the date of  acquisition.  The  purchase price
      associated with the acquisition exceeded the fair value of the net assets
      acquired  by approximately  $852,000,  which was  assigned to  intangible
      assets, including goodwill.   The operating results associated with  this
      business acquisition  are included in the  Company's consolidated results
      of operations from April 1, 1995, to December 31, 1997.

      3.  Related party transactions

          Mr.  Francis  M.  Williams,  the  Company's  President  and  majority
      stockholder, also controls Cumberland,  a property and casualty insurance
      company that  provides insurance  for specialty sureties  and performance
      and payment  bonds for contractors.  Through Cumberland, the  Company has
      obtained  performance and payment bonds in connection with certain of its
      contracts and projects. The fees that the Company paid for these services
      for the years ended December 31, 1995, 1996  and 1997, were approximately
      $5,000,  $2,900, and  $43,000, respectively.  The Company  also has  a 30
      percent  investment  in  Cumberland (see  Note  8  of  the Notes  to  the
      Consolidated Financial Statements).<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      3.  Related party transactions (continued)

          Effective  July  1,  1997,   employees  associated  with   TransCor's
      demolition   contracting  services  unit   were  transferred  to  Kimmins
      Contracting Corp. ("KCC"), a wholly-owned  subsidiary of the Company, for
      administrative and accounting purposes. As a result, contracting services
      previously performed by employees of TransCor were subcontracted  to KCC.
      For the year ended December 31, 1997, TransCor paid $3,417,574 to KCC for
      services  rendered by KCC as a subcontractor. In addition, TransCor rents
      equipment from KCC  for use in performing  demolition contracts. TransCor
      incurred approximately $670,000, $2,103,000, and $2,573,000  in equipment
      rental charges with KCC for the years ended December 31,  1995, 1996, and
      1997, respectively.

          During 1995 and 1996, the Company paid landfill fees of approximately
      $88,000  and $139,000, respectively, to a company that is primarily owned
      by  the  brother  of the  Company's  President. In  1997,  there  were no
      transactions  with this related party.  The amounts paid approximated the
      fair market rate for the type of services involved.

      4.  Accounts receivable
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
          Contract and trade:                       
           Billed contract receivables:             
             Completed and uncompleted contracts  . $  8,649,514  $  9,581,464 
             Retainage  . . . . . . . . . . . . . .    3,576,869     6,042,716 
           Unbilled contract receivables  . . . . .    3,808,997     4,924,002 
           Trade receivables  . . . . . . . . . . .    4,641,497     4,000,641 
                                                    ------------- -------------
                                                      20,676,877    24,548,823 
          Less allowance for doubtful accounts  . .     (616,708)     (921,301)
                                                    ------------- -------------
                                                    $ 20,060,169  $ 23,627,522 
                                                    ============= =============

          All unbilled receivables relate to work performed or material shipped
      by the balance  sheet date and are billed as  soon as is administratively
      feasible.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      4.  Accounts receivable (continued)

          The Company had a note receivable in an original amount of $3,638,696
      from Sunshadow  Apartments, Ltd., and Summerbreeze  Apartments, Ltd., two
      Florida    real   estate   limited    partnerships   (collectively,   the
      "Apartments").  The note receivable originally  accrued interest at prime
      plus 1.375 percent,  increasing to prime plus 2 percent  on July 1, 1995,
      with  principal  and interest  payable  in  monthly installments  through
      December  31,  1998,  and was  guaranteed  by  Mr.  Francis M.  Williams,
      majority owner of the Company.   The Company did not receive any interest
      or principal payments during  1997 relating to this note  receivable, and
      management of the Company discontinued recognition of interest income  in
      1996.  The amount  due from  the  Apartments at  December  31, 1996,  was
      approximately  $3,851,000. During  1997,  the note  receivable and  other
      receivables were contributed to the Apartments in exchange for 49 percent
      non-controlling   preferred   limited   partnership  interests   in   the
      Apartments.  See Note 8 of Notes to Consolidated Financial Statements for
      additional information.

          At December 31, 1996, $5,301,000 of the  combined accounts receivable
      -  affiliates  and note  receivable -  affiliate  balances were  due from
      corporate  affiliates   of  Mr.  Francis  M.   Williams.  The  affiliated
      receivables  relate  to  contract  services performed.    Most  of  these
      receivables  were  contributed  as an  investment  in  the Apartments  as
      described above. At December 31, 1997, the balance of accounts receivable
      - affiliates was $1,004,658,  of which $900,000 is classified as  a long-
      term receivable and is guaranteed by Mr. Francis M. Williams.

      5.  Costs and estimated earnings in excess of billings 
           on uncompleted contracts
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
                                                    
          Expenditures on uncompleted               
           contracts  . . . . . . . . . . . . . . . $ 76,218,248  $115,708,567 
          Estimated earnings on uncompleted         
           contracts  . . . . . . . . . . . . . . .    4,490,748     6,141,672 
                                                    ------------- -------------
                                                      80,708,996   121,850,239 
          Less actual and allowable billings on     
           uncompleted contracts  . . . . . . . . .   65,493,411   111,869,559 
                                                    ------------- -------------
                                                    $ 15,215,585  $  9,980,680 
                                                    ============= =============
          Costs and estimated earnings in excess of 
           billings on uncompleted contracts  . . . $ 15,967,872  $ 14,564,213 
          Billings in excess of costs and estimated 
           earnings on uncompleted contracts  . . .     (752,287)   (4,583,533)
                                                    ------------- -------------
                                                    $ 15,215,585  $  9,980,680 
                                                    ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      5.  Costs and estimated earnings in excess of billings 
           on uncompleted contracts (continued)

          During the years ended December 31, 1995, 1996, and 1997, the Company
      recognized  revenue from  contract  claims  of approximately  $1,624,000,
      $38,000,  and  $56,000, respectively.  During  1995, 1996  and  1997, the
      Company  settled contract claims that  resulted in net  gains (losses) of
      approximately $473,000, ($2,903,000), and ($847,000), respectively.

          As of December 31, 1996 and 1997, the costs and estimated earnings in
      excess of billings on uncompleted  contracts includes the Company's  cost
      associated with  unapproved or disputed contract change  orders and costs
      claimed from customers on completed contracts of approximately $9,000,000
      and $12,000,000, respectively. During the performance of these contracts,
      the  Company   encountered  site   conditions  that  differed   from  bid
      specifications. As  a result, the  Company incurred additional  labor and
      equipment  costs in performing the contract. By their nature, recovery of
      these amounts is often subject  to negotiation with the customer  and, in
      certain cases, resolution  through litigation. As a  result, the recovery
      of these  amounts may extend beyond one year. The portion at December 31,
      1997, that  is  not expected  to  be collected  within twelve  months  is
      classified as a non-current asset.

      6.  Property held for sale

          As  a  result of  management's decision  to  cease operations  in the
      northeast and  to de-emphasize  the performance of  certain environmental
      services within the specialty contracting segment, the Company decided to
      sell its thermal incineration unit.   This asset has a carrying  value of
      approximately $1,800,000 and $1,865,000 as of December 31, 1997 and 1996,
      respectively.  A purchase agreement for  the sale of  the incinerator for
      $1,800,000  is currently  pending. The  Company wrote  down the  carrying
      value of the asset by $40,000  to reflect the fair market value based  on
      the purchase agreement.

          In  addition, as  a result  of management's  review of  the Company's
      various regional solid waste operating facilities, a decision was made to
      dispose  of  less profitable  operating  assets.  The Company's  TransCor
      subsidiary sold its  residential solid waste  services contract with  St.
      Lucie  County to  a  competitor and  ceased  operations at  its  Lantana,
      Florida,  facility.  The Lantana  and  St.  Lucie facilities  contributed
      losses  of approximately  $1,111,000 and  $476,000, respectively,  of the
      $2,184,000 operating loss  of TransCor  for the year  ended December  31,
      1997. The Company wrote off intangible assets of $183,000 associated with
      contracts  that were  sold.  Also,  in  accordance  with  SFAS  No.  121,
      "Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
      Of," TransCor  wrote  down certain  land  and buildings  that  management
      believed  had carrying  amounts  higher  than  their fair  market  value,
      resulting in a $590,000 impairment loss.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      6.  Property held for sale (continued)

          TransCor's impairment  loss of  $590,000 was calculated  by comparing
      the carrying amount of  impaired assets of approximately $2,834,000  with
      recent  offers on the properties  held for sale.  The $590,000 impairment
      loss is included in  selling, general and administrative expenses  on the
      consolidated statements  of operations for  the year  ended December  31,
      1997. The land and buildings that were impaired at December 31, 1997, and
      have executed  agreements for sale  are expected  to be sold  during 1998
      and, accordingly,  the carrying  value of  these assets  of approximately
      $734,000,  which is  net of the  related impairment  loss of  $90,000, is
      classified  as a current asset under the caption "Property Held for Sale"
      in this consolidated balance sheet.

      7.     Property and equipment
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
                                                    
           Land   . . . . . . . . . . . . . . . . . $  5,622,769  $  4,323,053 
           Buildings and improvements   . . . . . .    7,909,361     6,235,460 
           Construction and recycling equipment   .   44,195,714    88,085,391 
           Furniture and fixtures   . . . . . . . .    1,508,105     1,503,217 
           Construction in progress   . . . . . . .       33,463        48,419 
                                                    ------------- -------------
                                                      59,269,412   100,195,540 
           Less accumulated depreciation  . . . . .  (22,256,418)  (27,420,533)
                                                    ------------- -------------
                                                    $ 37,012,994  $ 72,775,007 
                                                    ============= =============

          Property and equipment is recorded at  cost. Depreciation is provided
      using the straight-line method over estimated useful lives ranging from 3
      to  30   years.  Depreciation   expense  was   approximately  $4,038,000,
      $5,219,000,  and $8,000,000 for the  years ended December  31, 1995, 1996
      and 1997,  respectively.   Construction in  progress will  be depreciated
      over the estimated  useful lives  of respective assets  when placed  into
      service.

      8.  Investments in Cumberland Technologies, Inc., 
          Summerbreeze Apartments, Ltd., and 
          Sunshadow Apartments, Ltd. 

          In 1988,  Cumberland  Casualty  & Surety  Company  ("CCS")  issued  a
      surplus debenture to  the Company that bears  interest at 10  percent per
      annum in exchange for $3,000,000. In 1992, such debenture was assigned to
      Cumberland  Technologies, Inc.  ("Cumberland"),  a holding  company  that
      provides, among  other services,  reinsurance for specialty  sureties and
      performance and payment bonds for contractors.  Cumberland entered into a
      term note  agreement with the Company  for the outstanding  amount of the
      debenture, including accrued interest.  Interest accrued on the term note
      was  $506,755  at December  31,  1995  ($372,066  in  1996 prior  to  the
      conversion discussed below).<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      8.  Investments in Cumberland Technologies, Inc., 
          Summerbreeze Apartments, Ltd., and 
          Sunshadow Apartments, Ltd. (continued)

          On November 5,  1996, the  Company received 1,723,290  shares, or  30
      percent  of the outstanding common  stock, of Cumberland  common stock in
      exchange for the term note  from affiliate.  The Cumberland  common stock
      had  a fair market value of $3.00 per  share on the date of the exchange,
      based upon  the quoted market  price.   This investment is  accounted for
      under the  equity  method. The  amount  of $3,300,000  in excess  of  the
      underlying  equity was attributed to goodwill and is being amortized over
      twenty  years.  At December 31, 1997,  the market value of the Cumberland
      common stock held  by the Company was approximately $4,739,000 based on a
      stock price of $2.75.

          The following is a summary of the financial position of Cumberland at
      December 31, 1997:

                                                                  December 31,
                                                                      1997     
                                                                  -------------
      
          Cash and cash equivalents . . . . . . . . . . . . . . . $  1,803,000 
          Investments . . . . . . . . . . . . . . . . . . . . . .    6,469,000 
          Accounts receivable - trade, net  . . . . . . . . . . .    1,307,000 
          Reinsurance recoverable . . . . . . . . . . . . . . . .    2,017,000 
          Intangibles . . . . . . . . . . . . . . . . . . . . . .    1,681,000 
          Other . . . . . . . . . . . . . . . . . . . . . . . . .    2,044,000 
                                                                  -------------
           Total assets   . . . . . . . . . . . . . . . . . . . . $ 15,321,000 
                                                                  =============
      
          Policy liabilities and accruals . . . . . . . . . . . . $  7,639,000 
          Long-term debt  . . . . . . . . . . . . . . . . . . . .    1,418,000 
          Other . . . . . . . . . . . . . . . . . . . . . . . . .      255,000 
                                                                  -------------
           Total liabilities  . . . . . . . . . . . . . . . . . . $  9,312,000 
      
          Stockholders' equity  . . . . . . . . . . . . . . . . .    6,009,000 
                                                                  -------------
      
           Total liabilities and stockholders' equity   . . . . . $ 15,321,000 
                                                                  =============

          Cumberland's operating results included revenue of $7,770,000 and net
      income of $171,000 during the year ended December 31, 1997. The Company's
      equity   in  this  net  income   amounted  to  $51,000.     In  addition,
      approximately  $165,000  of  amortization  expense was  recorded  by  the
      Company related to the investment.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      8.  Investments in Cumberland Technologies, Inc., 
          Summerbreeze Apartments, Ltd., and 
          Sunshadow Apartments, Ltd. (continued)

          On October 22, 1997,  the Company contributed its note  receivable in
      an  amount of  approximately   $3,851,000 from  the Apartments  and other
      receivables  of $3,059,000  for  a non-controlling  49 percent  preferred
      limited  partnership  interest in  the  Apartments  and  a receivable  of
      $900,000 from the Apartments. The amount  of $12,066,000 in excess of the
      underlying  equity was attributed to goodwill and is being amortized over
      thirty  years.  The Company  will be  allocated  49 percent  of operating
      income, losses  and cash flow.   The preference  in the Company's  equity
      interest  in  the  Apartments occurs  upon  the  sale  of the  underlying
      partnership properties. Upon the occurrence of a capital transaction, the
      Company would receive  cash flows  from the  sale or  refinancing of  the
      Apartments' assets equal to  its capital contribution prior to  any other
      partner receiving any  proceeds. The Company accounts for  its investment
      in the Apartments using the equity method.

          During the period from  October 22, 1997, through December  31, 1997,
      the Apartments recognized revenue  of $722,000 and net income  of $4,000.
      The  Company has  recorded its  49 percent  share of  the net  results of
      operations.   In addition, approximately $67,000  of amortization expense
      was recorded by the Company related to the investments in the Apartments.
      At December  31, 1997, the Company's  balance in its total  investment in
      the Apartments was $6,762,067.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      8.  Investments in Cumberland Technologies, Inc., 
          Summerbreeze Apartments, Ltd., and 
          Sunshadow Apartments, Ltd. (continued)

          The  following  is  a  summary  of  the  financial  position  of  the
      Apartments at December 31, 1997:

                                                                      Total
                                                                   Investment
                                                                       in
                                                                  Partnerships 
                                                                  -------------
      
          Cash and cash equivalents . . . . . . . . . . . . . . . $     63,000 
          Accounts receivable - affiliate . . . . . . . . . . . .      959,000 
          Land  . . . . . . . . . . . . . . . . . . . . . . . . .    3,800,000 
          Buildings, capitalized construction interest, 
           furniture and equipment, net   . . . . . . . . . . . .   17,194,000 
          Other . . . . . . . . . . . . . . . . . . . . . . . . .      550,000 
                                                                  -------------
           Total assets   . . . . . . . . . . . . . . . . . . . . $ 22,566,000 
                                                                  =============
      
          Accounts payable and accrued expenses . . . . . . . . . $    783,000 
          Accounts payable to affiliates  . . . . . . . . . . . .    1,670,000 
          Mortgage loan payable . . . . . . . . . . . . . . . . .   21,141,000 
          Note payable to partner - Francis M. Williams . . . . .    2,860,000 
                                                                  -------------
           Total liabilities  . . . . . . . . . . . . . . . . . .   26,454,000 
          Partners  deficit . . . . . . . . . . . . . . . . . . .   (3,888,000)
                                                                  -------------
          Total liabilities and partners  deficit . . . . . . . . $ 22,566,000 
                                                                  =============

      9.  Accrued expenses
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
                                                    
          Deferred revenue  . . . . . . . . . . . . $  1,641,857  $    919,631 
          Accrued insurance . . . . . . . . . . . .    3,608,350     3,743,584 
          Accrued disposal costs  . . . . . . . . .      744,229       407,229 
          Accrued interest  . . . . . . . . . . . .      270,133       383,088 
          Accrued real estate taxes . . . . . . . .      441,566       601,682 
          Other . . . . . . . . . . . . . . . . . .    1,366,052     1,738,382 
                                                    ------------- -------------
                                                    $  8,072,187  $  7,793,596 
                                                    ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      10. Long-term debt
      
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
          Notes payable, principal and interest     
          payable in monthly installments through   
          March 1, 2003, interest at varying rates  
          up to 13 percent, collateralized by       
          equipment . . . . . . . . . . . . . . . . $ 19,548,486  $ 63,076,321 
                                                    
          Revolving term bank line of credit,       
          including letters of credit, reduced from 
          $12,390,000 in 1996 to $4,424,000 in 1997 
          (see below), due July 31, 1999, interest  
          payable monthly at lender's base rate     
          (8.5 percent at December 31, 1997) plus   
          .5 percent, permanent quarterly principal 
          reductions of $250,000 begin on July 1,   
          1997  . . . . . . . . . . . . . . . . . .   11,190,002     4,235,377 
                                                    
          Revolving term line of credit,            
          $16,000,000 (none during 1996) maximum,   
          due February 26, 1999, interest payable   
          monthly at lender's base rate of LIBOR    
          (8.2656 percent at December 31, 1997)     
          plus 2.5 percent, collateralized by       
          equipment . . . . . . . . . . . . . . . .        -        12,200,000 
                                                    
          Mortgage notes, principal and interest    
          payable in monthly installments through   
          January 1, 2012, interest at varying      
          rates up to prime (8.5 percent at         
          December 31, 1997) plus 1.75 percent,        6,976,756     6,535,013 
          collateralized by land and buildings  . . ------------- -------------
                                                      37,715,244    86,046,711 
                                                       7,794,848    17,385,838 
           Less current portion   . . . . . . . . . ------------- -------------
                                                    $ 29,920,396  $ 68,660,873 
                                                    ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      10. Long-term debt (continued)

          Annual principal  maturities subsequent to December 31,  1997, are as
      follows:


          1998  . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,385,838 
          1999  . . . . . . . . . . . . . . . . . . . . . . . . .   28,809,807 
          2000  . . . . . . . . . . . . . . . . . . . . . . . . .   12,304,954 
          2001  . . . . . . . . . . . . . . . . . . . . . . . . .   10,544,535 
          2002  . . . . . . . . . . . . . . . . . . . . . . . . .    8,933,115 
          Thereafter  . . . . . . . . . . . . . . . . . . . . . .    8,068,462 
                                                                  -------------
                                                                  $ 86,046,711 
                                                                  =============

          The lenders' base rate under the  revolving term bank line of  credit
      at December  31, 1997, was 8.5  percent. At December 31,  1997, there was
      approximately $88,000  of borrowings  available under the  revolving term
      bank line of credit. The revolving term bank line  of $4,424,000 includes
      the letter of credit facility of $2,526,000 and is secured by a pledge of
      all of the stock of  the Company's subsidiaries and substantially  all of
      the unsecured assets of the Company.  The use of  funds under these lines
      is  limited among certain  subsidiaries, and  repayment is  guaranteed by
      Cumberland.  Subsequent to  year end,  the revolving  term bank  line was
      fully repaid and the borrowing base was reduced to equal  the outstanding
      letters of credit.

          The revolving  term line  of credit  of $16,000,000  is secured  by a
      pledge of the trade receivables of Kimmins Contracting Corp.

          The debt  agreements contain certain covenants,  the most restrictive
      of which  require maintenance of  a consolidated  tangible net worth,  as
      defined,  of not  less than $6,500,000  and net  income of  not less than
      $1,500,000.  In  addition, the covenants prohibit the Company from paying
      dividends without  lender approval. Specifically  regarding the revolving
      term bank line  of credit for  $4,235,000, the Company  did not meet  the
      tangible net worth and net income requirements under the credit agreement
      with the  bank.  The  Company  has obtained  waivers  for  the  financial
      covenants  for the  year  ended December  31, 1997,  and  the year  ended
      December  31,  1998.   As  of  December  31,  1997,  the Company  was  in
      compliance  with or  obtained  waivers for  all loan  covenants,  and the
      Company  may be required to obtain  similar waivers for certain covenants
      in 1998.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      10. Long-term debt (continued)

          During  1997,  Kimmins  Contracting  Corp.  ("KCC"),  a  wholly-owned
      subsidiary of  the Company, entered  into four separate  debt agreements.
      KCC  converted equipment  previously rented  under operating  leases into
      equipment  notes  of  approximately  $13,041,000  in  February  1997  and
      $28,590,000 in November 1997  under terms similar to the  Company's other
      equipment  notes outstanding.  In addition,  KCC obtained  an $11,000,000
      working  capital loan,  of  which  $7,000,000  was  used  to  reduce  the
      Company's outstanding  revolving term  bank line  of credit  during March
      1997.  In  November 1997,  KCC increased  the  working capital  loan from
      $11,000,000  to $16,000,000.  As  of December  31,  1997, KCC  had  drawn
      $12,200,000 on the line of credit.

          The above equipment  notes and  the working  capital loan  agreements
      contain  certain  covenants,  the   most  restrictive  of  which  require
      maintenance of  a total liabilities to adjusted net worth ratio of 8.0 to
      1.0 and a current ratio of 1.5  to 1.0. Regarding the revolving term line
      of   credit  for   $12,200,000  and   outstanding  equipment   notes  for
      approximately  $40,300,000, KCC and  the Company,  as guarantor,  did not
      meet the total liability to net worth ratio, current ratio  or net income
      requirements under  the credit and  note agreements. The  equipment notes
      and  working capital loan are  guaranteed by the  Company and require the
      Company to  maintain a debt to equity ratio not  exceeding 6.5 to 1 and a
      current  ratio of  not  less than  1.2 to  1.  The Company  and KCC  have
      obtained waivers of these financial covenants for the year ended December
      31,  1997.  In  addition, the  Company  received  a  modification of  the
      covenants for the year  ended December 31,  1998, with which the  Company
      believes it will comply.

          Included  in  the  notes  payment of  approximately  $63,076,000  are
      equipment  notes of TransCor  for $5,700,000 that  are due  in July 1998.
      TransCor  has  executed  a   commitment  agreement  that  refinances  the
      $5,700,000 until January 1,  2000. The $5,700,000 is classified  as long-
      term debt as of December 31, 1997.


      11. Employee Stock Ownership Plan Trust Debt

          In March  1990, the  Company's Employee  Stock  Ownership Plan Trust
      ("ESOP") (Note 13)  originally was  funded from a  $5,100,000 loan.  This
      loan was refinanced during December 1995 and bears interest at prime plus
      1/2 percent, with quarterly principal and monthly interest payments 
      through October 2000. The balance at December 31, 1997, was $1,440,000.  
      The loan is guaranteed by the Company as to payment of principal and 
      interest and, therefore, the unpaid balance of the borrowing is reflected 
      as  debt of the  Company. An equivalent amount representing unearned
      employee compensation,  less  the Company's  accrued  contribution
      (Note 13), is recorded as a deduction from stockholders' equity.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      11. Employee Stock Ownership Plan Trust Debt (continued)

          Annual principal  maturities for each of  the next four years  are as
      follows:
      
          1998  . . . . . . . . . . . . . . . . . . . . . . . . . $    480,000 
          1999  . . . . . . . . . . . . . . . . . . . . . . . . .      480,000 
          2000  . . . . . . . . . . . . . . . . . . . . . . . . .      480,000 
                                                                  -------------
                                                                  $  1,440,000 
                                                                  =============

      12. Leasing arrangements

          The  Company  rents equipment  and machinery  as  needed, as  well as
      office  space, under operating leases  for varying periods  not to exceed
      one year. Rental expenses  for the years  ended December 31, 1995,  1996,
      and  1997, were approximately  $9,079,000, $11,808,000,  and $11,853,000,
      respectively.

          The  Company s future  minimum  lease  payments under  non-cancelable
      operating leases are as follows:


          1998  . . . . . . . . . . . . . . . . . . . . . . . . . $  3,095,000 
          1999  . . . . . . . . . . . . . . . . . . . . . . . . .    3,095,000 
          2000  . . . . . . . . . . . . . . . . . . . . . . . . .    1,982,000 
          2001  . . . . . . . . . . . . . . . . . . . . . . . . .       16,364 
                                                                  -------------
                                                                  $  8,188,364 
                                                                  =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      13. Pension and other benefit plans 

          Employee Stock Ownership Plan.  On January 1, 1989, the  Company, for
      the benefit of  its employees, formed the ESOP to  purchase shares of the
      Company's common  stock  from time  to  time in  the  open market  or  in
      negotiated transactions at prices  deemed to be attractive. Contributions
      to the ESOP  are made at the discretion of the Board of Directors. During
      1989,  the ESOP acquired from  the Company's President  257,371 shares of
      common  stock at  a  cost  of $5,100,000.  The  shares  were acquired  in
      exchange for a note payable to the Company's President. Simultaneous with
      this purchase, the Company's  President purchased certain receivables and
      interests in certain investments from the Company for a purchase price of
      $5,100,000, which was  paid by the assignment to the  Company of the note
      received from the ESOP. The note originally was funded during March 1990,
      through a long-term  bank financing agreement  guaranteed by the  Company
      (Note 11). As the debt is repaid, shares are released from collateral and
      allocated  to active employees, based  on the proportion  of debt service
      paid in the current year. Debt  of the ESOP is recorded as debt,  and the
      shares  pledged   as  collateral   are  reported  as   unearned  employee
      compensation in the balance sheet.  For financial statement purposes,  as
      of December 31,  1996 and  1997, the unearned  employee compensation  was
      reflected  as   a  reduction  in  stockholders'   equity.  The  Company's
      accounting treatment for  the ESOP  as described above  is in  accordance
      with SOP 76-3 for grandfathered plans established prior to 1993.

          Interest  and  compensation expenses  relating  to  the  ESOP are  as
      follows:

                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
                                                    
          Interest  . . . . . . . . . $    354,449  $    185,728  $    133,023 
          Compensation  . . . . . . . $    504,852  $    467,082  $    480,000 

          The ESOP shares were as follows:
                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997     
                                                    ------------- -------------
          Allocated shares  . . . . . . . . . . . .      159,000       183,000 
          Shares released for allocation  . . . . .        -             -     
          Unreleased shares . . . . . . . . . . . .       96,000        72,000 
                                                    ------------- -------------
          Total ESOP shares . . . . . . . . . . . .      255,000       255,000 
                                                    ============= =============
          Market value of unreleased shares   . . . $    324,000  $    383,000 
                                                    ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      13. Pension and other benefit plans (continued)

          Stock Option Plan. The Company originally reserved 975,000 shares  of
      its common stock for issuance upon  the exercise of options to be granted
      under  the Company's  1987  Stock Option  Plan  (the Company  Plan).  The
      exercise price of  an incentive  stock option granted  under the  Company
      Plan may not  be less than the  fair market value of the  common stock at
      the time the  option is  granted. The exercise  price of a  non-qualified
      stock option granted under the Company  Plan may be any amount determined
      by the  Board of Directors but not less than  the par value of the common
      stock on  the date of the  grant. Options granted under  the Company Plan
      must, in general, expire  no later than  ten years from  the date of  the
      grant.

          The Company's 1987  Stock Option Plan  has the  option to acquire  an
      aggregate  of 975,000  shares  of common  stock  that may  be granted  to
      employees,  officers, directors and consultants of the Company.  The Plan
      authorizes  the Board of Directors (the "Board") to issue incentive stock
      options ("ISOs"), as defined  in Section 422A(b) of the  Internal Revenue
      Code, and stock options that  do not conform to the requirements  of that
      Code section  ("Non-ISOs").   The  Board has  discretionary authority  to
      determine the types  of stock options  to be granted,  the persons  among
      those eligible to whom options  will be granted, the number of  shares to
      be subject to such options, and the terms of the stock option agreements.
      Options may be exercised in the manner and at  such times as fixed by the
      Board, but  may not be exercised after the tenth anniversary of the grant
      of such options.

          The following table summarizes the  transactions for the three  years
      ended December 31, 1997, relating to the Plan:

                                                     Number of     Per Share
                                                       Shares    Exercise Price
                                                    ------------ --------------
                                                    
          Outstanding January 1, 1995 . . . . . . .     205,143  $3.33 - $ 4.50
           Granted  . . . . . . . . . . . . . . . .       7,500  $         4.50
           Exercised  . . . . . . . . . . . . . . .      (4,400) $         4.50
           Canceled   . . . . . . . . . . . . . . .       -      $       -     
                                                    ------------
          Outstanding December 31, 1995:  . . . . .     208,243  $3.33 - $ 4.50
           Granted  . . . . . . . . . . . . . . . .       -      $       -     
           Exercised  . . . . . . . . . . . . . . .       -      $       -     
           Canceled   . . . . . . . . . . . . . . .     (51,167) $ 3.33 - $4.50
                                                    ------------
          Outstanding December 31, 1996:  . . . . .     157,076  $ 3.33 - $4.50
           Granted  . . . . . . . . . . . . . . . .     270,742  $ 2.62 - $3.94
           Exercised  . . . . . . . . . . . . . . .       -      $       -     
           Canceled   . . . . . . . . . . . . . . .    (153,743) $ 3.33 - $4.50
                                                    ------------
          Outstanding December 31, 1997 . . . . . .     274,075  $ 2.62 - $4.50
                                                    ============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      13. Pension and other benefit plans (continued)

          Pro forma information  regarding net income  (loss) and earnings  per
      share  is  required  by  SFAS  No.  123, which  also  requires  that  the
      information  be  determined  as if  the  Company  had  accounted for  its
      employee stock options granted subsequent to December 31, 1993, under the
      fair value  method of that Statement.   The fair value  for these options
      was  estimated at the date of grant  using a Black-Scholes option pricing
      model with the  following weighted-average assumptions for 1995, 1996 and
      1997; risk-free interest rates of 5.5 percent; a  dividend yield of zero;
      volatility factors of the  expected market price of the  Company's common
      stock based on historical trends; and a weighted-average expected life of
      the options of seven years.

          The Black-Scholes option  valuation model  was developed  for use  in
      estimating  the fair  value  of  traded  options  that  have  no  vesting
      restrictions  and are fully transferrable.  In addition, option valuation
      models  require the input of  highly subjective assumptions including the
      expected stock  price volatility.   Because the Company's  employee stock
      options have characteristics significantly different from those of traded
      options  and  because changes  in  the subjective  input  assumptions can
      materially affect the fair  value estimate, in management's opinion,  the
      existing models do not  necessarily provide a reliable single  measure of
      the fair value of its employee stock options.

          For  purposes of pro forma  disclosures, the estimated  fair value of
      the options is amortized to expense over the options' vesting period. The
      Company's pro forma information is as follows:

                                           1995         1996          1997     
                                      ------------- ------------- -------------
          Pro forma net income (loss)               
           attributable to                          
           stockholders   . . . . . . $  1,341,028  $ (8,685,767) $ (8,549,501)
          Pro forma income (loss) per               
           common share:                            
             Basic  . . . . . . . . .          .30         (1.96)        (1.98)
             Diluted  . . . . . . . .          .29         (1.96)        (1.98)

          Multi-Employer Defined Contribution Plan.  The Company makes payments
      to  collectively  bargained,  multi-employer  defined  contribution plans
      covering Company  union employees. Under the  Multi-Employer Pension Plan
      Amendment Act, a withdrawing employer is required to continue funding its
      share  of the  plan's  unfunded vested  benefits.  The Company  does  not
      possess  sufficient information to determine  its portion of the unfunded
      vested benefits, if  any. Contributions to such plans for the years ended
      December 31, 1995, 1996, and 1997, were not significant.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      14. Income taxes

          The Company accounts for  income taxes using the asset  and liability
      method  pursuant  to Statement  of  Financial  Accounting Standards  109,
      "Accounting for  Income Taxes"  (Statement No.  109). Under  this method,
      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 bases. 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.  Under
      Statement No. 109, the effect on deferred tax assets and liabilities of a
      change in tax  rates is recognized in income in  the period that includes
      the enactment date.

          For  the year  ended  December 31,  1997,  the Company  incurred  net
      operating  losses  ("NOL")  for  federal tax  purposes  of  approximately
      $10,989,000.  The NOL consists of $7,465,000 generated by the Company and
      approximately $3,524,000 generated by TransCor, which files separately as
      explained  below.  All  of  the  NOLs  of approximately  $10,989,000  are
      available  as  NOL  carryforwards to  future  periods.    The total  loss
      carryforwards  of   approximately  $13,917,000   for   the  Company   and
      approximately $3,981,000 for TransCor expire through the year 2012 if not
      used.  In   addition,  the   Company  and  TransCor   have  approximately
      $17,070,000  and $5,285,000 of state NOL  carryforwards. The deferred tax
      assets  include a valuation  allowance of approximately  $4,507,740 as an
      offset  to  the   expected  future  benefit   of  the  NOL   carryforward
      attributable  to  the Company  due to  the  uncertainty of  realizing the
      benefit.    For  alternative  minimum  tax  ("AMT")   purposes,  the  NOL
      carryforward  is  approximately  $11,298,000.     The  Company  also  has
      alternative minimum  tax credit  carryforwards of approximately  $697,000
      available to reduce future federal regular income taxes.   The AMT credit
      carryforwards do not expire.

          As a result of TransCor's sale of its common stock in March 1993,  it
      is no longer  consolidated with the Company for income  tax purposes. The
      Company has provided deferred income taxes respect to differences between
      its book and tax basis in TransCor. These differences  result from income
      recognized for book,  not tax, for the  gain on the sale  of TransCor and
      TransCor's post-offering earnings, which  are collectively referred to as
      the  outside basis  difference. The  rate used  to provide  taxes  on the
      outside basis difference  is the  statutory rate for  the first  $785,000
      that represents the Company's share of TransCor's accumulated  deficit at
      the date  of the  sale of its  common stock. The  rate for  the remaining
      difference assumes  the dividend  received deduction because  the Company
      expects to recover its investment through dividends.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      14. Income taxes (continued)

          Deferred  income taxes  reflect  the  net  tax effects  of  temporary
      differences between  the carrying amounts  of assets and  liabilities for
      financial  reporting  purposes  and  the  amounts  used  for  income  tax
      purposes.   Significant  components   of   the  Company's   deferred  tax
      liabilities and assets are as follows:

                                                           December 31,        
                                                    ---------------------------
                                                        1996          1997
                                                    ------------- -------------
          Deferred tax assets:                      
           Net operating loss carryforward  . . . . $  2,598,970  $  6,741,983 
           Valuation allowance  . . . . . . . . . .   (1,707,009)   (4,507,740)
           Allowance for doubtful accounts  . . . .      236,903       354,602 
           Costs deferred for tax expensed for      
             books  . . . . . . . . . . . . . . . .      210,556       304,207 
           Alternate minimum tax credit             
             carryforwards  . . . . . . . . . . . .      836,430       696,623 
           Accrued workers' compensation  . . . . .      907,782     1,217,647 
           Uncompleted long-term contracts  . . . .        -           167,690 
           State tax credit carryforward  . . . . .       32,730        52,730 
           Other  . . . . . . . . . . . . . . . . .      194,293       599,011 
                                                    ------------- -------------
                                                       3,310,655     5,626,753 
                                                    ------------- -------------
                                                    
           Deferred tax liabilities:                
             Excess of tax over book depreciation . $  4,704,561  $  6,488,973 
             Uncompleted long-term contracts  . . .      323,798         -     
             Costs deferred for book expensed for   
              tax . . . . . . . . . . . . . . . . .      337,390       425,864 
             Outside basis difference in TransCor .      605,182       259,248 
                                                    ------------- -------------
                                                       5,970,931     7,174,085 
                                                    ------------- -------------
           Net deferred tax liability   . . . . . .    2,660,276     1,547,332 
           Less current net deferred asset  . . . .    1,499,329     1,980,148 
                                                    ------------- -------------
             Net non-current deferred liability . . $  4,159,605  $  3,527,480 
                                                    ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      14. Income taxes (continued)

          Factors causing the effective  tax rate to differ from  the statutory
      rate are as follows:

                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
                                                    
          Federal statutory rate  . .        34.0%        (34.0%)       (34.0%)
          Valuation allowance . . . .         0.0%         15.9%         30.8% 
          State income taxes  . . . .        10.0%         (3.5%)        (3.4%)
          Additional tax on the                     
           Company's shares of                      
           TransCor's earnings  . . .         8.0%          2.3%         (5.9%)
          Other . . . . . . . . . . .         0.6%         (0.2%)          .4% 
                                      ------------- ------------- -------------
          Effective tax rate  . . . .        52.6%        (19.5%)       (12.1%)
                                      ============= ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      15. Stockholders' equity

          The Company's  Class B  common stock  has the  same voting  rights as
      common stock and is  not entitled to participate in cash  dividends. Upon
      liquidation  or dissolution of the  Company, the holders  of common stock
      are entitled to receive up to $9.00 per share, after which the holders of
      Class  B common  stock are  entitled to  receive up  to $9.00  per share.
      Thereafter, all assets remaining for distribution will be distributed pro
      rata to the  holders of common stock and Class B  common stock. The right
      to convert Class B common stock to common stock occurs in any fiscal year
      in which the  Company achieves net  earnings equal to a  specified amount
      (currently  $.84  per share),  which is  calculated  by adding  the total
      shares outstanding at fiscal year end  to the number of shares that could
      be converted  during the fiscal year.  The holders of the  Class B common
      stock  will thereafter have the right to  convert up to 625,000 shares of
      Class  B common stock  into common  stock on a  share for share  basis as
      follows.  Each cumulative  incremental increase  in  net earnings  in any
      subsequent year of $.21 per  share above the specified level  of earnings
      previously obtained will  afford holders  the right to  convert up to  an
      additional 625,000  shares of Class B common stock into common stock on a
      share for  share basis.  Holders  of Class  B common  stock  will not  be
      entitled to convert  more than 625,000 of such shares  in any fiscal year
      unless the Company achieves  earnings of $1.44 per share  of common stock
      in  any fiscal year, which will entitle  holders to convert all shares of
      Class B common stock into common stock. In addition, conversion occurs if
      a sale of part of the Company's business as to which there is a bona fide
      offer to  purchase would have  resulted in convertibility  of any  of the
      outstanding Class  B Common Stock  and it is  determined by the  Board of
      Directors of  the Company not to  approve such a  transaction, then, upon
      request of the holder or holders of a majority of the outstanding Class B
      Common  Stock, the  number  of shares  thereof  which would  have  become
      convertible  had the  transaction  occurred would  become convertible.  A
      similar provision provides that if there is an independent valuation of a
      part  of  the business  of the  Company  such that  if  such part  of the
      business  were sold, the result would allow conversion of all outstanding
      Class  B Common Stock and  if the Board of  Directors of the Company does
      not authorize such sale, then, upon request of the holder or holders of a
      majority of the outstanding Class B Common Stock, the outstanding Class B
      Common Stock would become convertible.  No shares of Class B common stock
      became eligible for conversion  into common stock during the  years ended
      December 31, 1995, 1996, and 1997.

          The Company has authorized 1,000,000 shares of preferred stock with a
      par  value of  $.001,  none  of  which  is  presently  outstanding.  Such
      preferred  stock may be issued in series and will have such designations,
      rights,  preferences, and  limitations as  may be  fixed by the  Board of
      Directors.

          During  the years  ended  December 31,  1996  and 1997,  the  Company
      acquired  73,828  and 76,600  shares  of  treasury  stock at  a  cost  of
      $311,783, and $267,331, respectively.  At December 31, 1997,  the balance
      of the Company's treasury stock was $733,463.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      16. Contingencies

          The Company is involved  in various legal actions and  claims arising
      in the ordinary course  of its business. After taking  into consideration
      legal counsel's evaluation of  such actions and claims, management  is of
      the opinion that their outcome will not have a material adverse effect on
      the consolidated financial position of the Company.

          At December 31, 1997, TransCor had a commitment to purchase equipment
      in the amount of $3,500,000 for  use in connection with a municipal waste
      management contract that commences in October 1998.

      17. Fourth quarter adjustments

          During  the fourth quarter of 1997, the Company revised its estimates
      of costs  to complete certain  contracts primarily  as a  result of  work
      slowdowns  caused  by excessive  rainfall  and  recorded certain  charges
      related to  contract claim  and change  order settlements. The  aggregate
      effect of these revised estimates on the Company's pretax income for 1997
      was a reduction of approximately $10,000,000. Approximately $1,000,000 of
      the  total fourth  quarter  adjustments  of  $10,000,000 are  related  to
      contract claim and change order settlements.

          During  the  fourth quarter  of  1996, the  Company  recorded certain
      charges  to operations related to contract  estimate changes and contract
      claim  and change  order  settlements.   The  aggregate effect  of  these
      charges  included in  the  Company's pretax  loss  for 1996  amounted  to
      approximately $6,452,000.

      18. Fair value of financial instruments

          The following estimated fair value amounts have been determined using
      available  market  information and  appropriate  valuation methodologies.
      However, considerable  judgment is necessarily  required in  interpreting
      market  data to  develop the  estimates of  fair value.  Accordingly, the
      estimates presented herein  are not necessarily indicative of the amounts
      that the Company  could realize in a current market  exchange. The use of
      different market  assumptions and/or estimation methodologies  may have a
      material effect on the estimated fair value amounts.

          Cash, accounts receivable, note  receivable - affiliate, and accounts
      payable.  The carrying  amount reported  in the  balance sheet  for cash,
      accounts receivable, and accounts payable approximates their fair value. 

          Long-term debt. The fair  values of the Company's long-term  debt are
      estimated using  discounted cash  flow analyses,  based on  the Company's
      current  incremental  borrowing  rates  for similar  types  of  borrowing
      arrangements.  The  carrying  value   of  the  Company's  long-term  debt
      approximates fair value because the debt bears variable interest rates.<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      19. Earnings (loss) per share

          As required by FASB Statement No. 128, the following table sets forth
      the computation of basic and diluted earnings per share:

                                              Years ended December 31,         
                                      ----------------------------------------
                                           1995         1996          1997     
                                      ------------- ------------- -------------
          Numerator:                                
                                                    
          Net income (loss) . . . . . $  1,342,583  $ (8,683,493) $ (8,518,240)
          Adjustment for basic                      
           earnings per share   . . .            0             0             0 
                                      ------------- ------------- -------------
          Numerator for basic                       
           earnings per share -                     
           income available to                      
           common stockholders  . . .    1,342,583    (8,683,439)   (8,518,240)
           Effect of dilutive                       
             securities:
           Less tax effect of                       
             interest . . . . . . . .            0             0             0 
                                      ------------- ------------- -------------
           Numerator for diluted                    
             earnings per share -                   
             income available to                    
             common stockholders after              
             assumed conversions  . . $  1,342,583  $ (8,683,439) $ (8,518,240)
                                      ============= ============= =============
          Denominator:                              
                                                    
          Denominator for basic                     
           earnings per share -                     
           weighted-average                         
           shares   . . . . . . . . .    4,444,685     4,420,175  $  4,318,481 
          Effective of dilutive                     
           securities:
          Stock options . . . . . . .      133,657             0             0 
          Dilutive potential common                 
           shares   . . . . . . . . .            0             0             0 
                                      ------------- ------------- -------------
          Denominator for diluted                   
           earnings per share -                     
           adjusted weighted-average                
           shares and assumed                       
           conversions  . . . . . . .    4,578,342     4,420,175  $  4,318,481 
                                      ============= ============= =============
                                                    
          Basic earnings per share  . $       0.30  $      (1.96) $      (1.97)
                                      ============= ============= =============
          Diluted earnings per share  $       0.29  $      (1.96) $      (1.97)
                                      ============= ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      19. Earnings (loss) per share

          Unexercised options  to purchase 38,000, 92,000 and  56,000 shares of
      common stock for 1995, 1996 and 1997,  respectively, were not included in
      the computations of diluted loss per share because the assumed conversion
      would be antidilutive.

      20. Business segments and major customers

          The Company conducts business  in two segments: specialty contracting
      services and  solid waste management services.  The specialty contracting
      services segment provides comprehensive services including infrastructure
      development,  underground utility  construction, road  work, dismantling,
      asbestos  abatement, excavation,  removal  and  disposal of  contaminated
      soil.  The solid  waste  management services  segment offers  collection,
      transfer, transportation, resource recovery and disposal of non-hazardous
      waste and demolition services.

          For  the years ended December 31, 1995,  1996 and 1997, the Company's
      specialty   contracting  services   segment   earned  gross   revenue  of
      approximately $3,953,000 $14,884,000,  and $10,648,000, respectively,  on
      contracts with  the Florida Department  of Transportation. For  the years
      ended  December  31,  1995,  1996   and  1997,  the  Company's  specialty
      contracting  services  segment  earned  gross  revenue  of  approximately
      $3,999,000, $2,562,000, and $25,061,000, respectively, on  contracts with
      IMC-Agrico  Company,  a  phosphate  mining  company  with  operations  on
      Florida's  west  coast. These  were  the only  customers  whose purchases
      aggregated more than 10 percent of the Company's revenues.

          A summary of information  about the Company's segments for  the years
      ended December 31, 1995, 1996 and 1997, is as follows (in thousands):

                                        Specialty    Solid Waste
                                       Contracting   Management
                    1995                 Services     Services        Total
      ------------------------------- ------------- ------------- -------------
                                                    
      Gross revenue . . . . . . . . . $     70,227  $     41,119  $    111,346 
                                      ============= ============= =============
      Operating income  . . . . . . . $      1,892  $      2,704  $      4,596 
      Interest income . . . . . . . .        1,005         -             1,005 
      Interest expense  . . . . . . .        1,875           548         2,423 
      Minority interest . . . . . . .        -              (345)         (345)
      Income (loss) before income     ------------- ------------- -------------
        taxes . . . . . . . . . . . . $      1,022  $      1,811  $      2,833 
                                      ============= ============= =============
      Identifiable assets . . . . . . $     46,778  $     46,851  $     93,629 
                                      ============= ============= =============
      Depreciation and amortization . $      1,855  $      2,447  $      4,302 
                                      ============= ============= =============
      Capital expenditures  . . . . . $      1,577  $     13,848  $     15,425 
                                      ============= ============= =============<PAGE>

                                    KIMMINS CORP.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      20. Business segments and major customers (continued)

                                        Specialty    Solid Waste
                                       Contracting   Management
                    1996                 Services     Services        Total
      ------------------------------- ------------- ------------- -------------
                                                    
      Gross revenue . . . . . . . . . $     69,048  $     44,193  $    113,241 
                                      ============= ============= =============
      Operating income (loss) . . . . $     (8,298) $        492  $     (7,806)
      Interest income . . . . . . . .          569         -               569 
      Interest expense  . . . . . . .        2,322         1,354         3,676 
      Minority interest . . . . . . .        -               138           138 
      Loss before income tax          ------------- ------------- -------------
        benefit . . . . . . . . . . . $     (9,913) $       (862) $    (10,775)
                                      ============= ============= =============
      Identifiable assets . . . . . . $     47,441  $     45,642  $     93,083 
                                      ============= ============= =============
      Depreciation and amortization . $      2,039  $      3,611  $      5,650 
                                      ============= ============= =============
      Capital Expenditures  . . . . . $      4,429  $      2,539  $      6,968 
                                      ============= ============= =============
                                                    
                                        Specialty    Solid Waste
                                       Contracting   Management
                    1997                 Services     Services        Total
      ------------------------------- ------------- ------------- -------------
                                                    
      Gross revenue . . . . . . . . . $     91,481  $     43,830  $    135,311 
                                      ============= ============= =============
      Operating income (loss) . . . . $     (3,609) $     (2,184) $     (5,793)
      Interest income . . . . . . . .          169         -               169 
      Interest expense  . . . . . . .        3,467         1,138         4,605 
      Minority interest . . . . . . .        -               542           542 
      Income (loss) before income     ------------- ------------- -------------
        tax benefit . . . . . . . .   $     (6,365) $     (3,322) $     (9,687)
                                      ============= ============= =============
      Identifiable assets . . . . . . $     93,169  $     41,847  $    135,016 
                                      ============= ============= =============
      Depreciation and amortization . $      4,643         4,153  $      8,796 
                                      ============= ============= =============
      Capital Expenditures  . . . . . $      2,169  $      6,172  $      8,341 
                                      ============= ============= =============

      21. Subsequent event to December 31, 1997

          On May 31, 1998, TransCor sold its Jacksonville area waste collection
      and recycling operations assets and certain assets of the Miami front-end
      load  and rear-load  commercial waste  and recycling business  to Eastern
      Environmental Services of  Florida, Inc., for $11,600,000  in cash, which
      exceeded the carrying value of the underlying assets.<PAGE>

                                       PART III

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

          None.

      Item 10. Directors and Executive Officers of the Registrant

          The directors and executive officers of the Company are as follows:

                       Name                 Age           Position           
        --------------------------------------- ----------------------------
                                             
        Francis M. Williams . . . . . . . . 56  President, Chief Executive
                                                  Officer, and Director
        Norman S. Dominiak  . . . . . . . . 53  Vice President
        Joseph M. Williams  . . . . . . . . 42  Secretary and Treasurer
        Michael Gold  . . . . . . . . . . . 49  Director
        George Chandler . . . . . . . . . . 68  Director

           All  directors of  the  Company hold  office  until the  next annual
      meeting  of stockholders  and  the election  and  qualification of  their
      successors. Officers of the Company are  elected annually by the Board of
      Directors and hold office at the discretion of the Board of Directors.

           Francis M. Williams  has been President and Chairman of the Board of
      the Company since its inception and Chairman of the Board of Directors of
      TransCor since November 1992.  For more than five years prior to November
      1988, Mr. Williams  was the  Chairman of  the Board  and Chief  Executive
      Officer  of Kimmins  Corp.  and its  predecessors  and  sole owner  of  K
      Management Corp. From June 1981 until January 1988, Mr. Williams was also
      the  President and  a Director of  College Venture Equity  Corp., a small
      business investment company. Mr. Williams has also been a Director of the
      National  Association  of  Demolition Contractors  and  a  member  of the
      Executive Committee of the Tampa Bay International Trade Council.

           Norman S.  Dominiak has  been Vice  President of  the Company  since
      March 1995  and has been employed  by the Company as  its Chief Financial
      Officer  since January 1994. Mr.  Dominiak has also  been Chief Financial
      Officer  of  TransCor  since  January  1994.    Mr.  Dominiak  served  as
      Controller  of ThermoCor Kimmins, Inc., a subsidiary of the Company, from
      October 1991 until January 1994. From May 1988 until September 1991,  Mr.
      Dominiak  served as  Senior Vice  President of  Creative Edge,  a company
      engaged in  the manufacturing  and distribution of  educational products.
      From October  1982 until April 1988,  Mr. Dominiak served as  Senior Vice
      President of  Cecos Environmental Services,  Inc., a  company engaged  in
      treatment,  transportation, and  disposal of  hazardous waste.  From 1965
      until 1982, Mr. Dominiak was employed in various financial capacities for
      the Carborundum Company.<PAGE>

           Joseph  M. Williams  has  been the  Secretary  and Treasurer  of the
      Company since October 1988.  Since September 1997, Mr. Williams  has been
      President  and Chief Executive Officer of TransCor.  Since November 1991,
      Mr.  Williams  has  served  as  President  and  has  been  a Director  of
      Cumberland Technologies,  Inc.,  a  holding  company  whose  wholly-owned
      subsidiaries provide reinsurance  and specialty sureties and  performance
      and payment bonds. Since June 1986,  Mr. Williams has served as President
      and Vice President  and has  been a  Director of  Cumberland Real  Estate
      Holdings, Inc.,  the corporate  general partner of  Sunshadow Apartments,
      Ltd.  ("Sunshadow") and  Summerbreeze Apartments,  Ltd. ("Summerbreeze"),
      both of which are limited partnerships. Mr. Williams has been employed by
      the  Company and  its subsidiaries  in  various capacities  since January
      1984. From January 1982 to December 1983, he was the  managing partner of
      Williams and Grana,  a firm  engaged in public  accounting. From  January
      1978  to December  1981,  Mr.  Williams  was employed  as  a  senior  tax
      accountant with Price Waterhouse  & Co. Joseph M. Williams  is the nephew
      of Francis M. Williams.

           Michael  Gold has  been  a Director  of  the Company  since November
      1987. For more than the  past five years, Mr. Gold has been  a partner in
      the Niagara Falls, New York law firm of Gold and Gold.

           George Chandler has  been a Director  of the  Company since  January
      1990. Since November 1989,  Mr. Chandler has been a  business consultant.
      Mr.  Chandler was Chairman of the Board  from July 1986 to November 1989,
      and President and Chief  Executive Officer from October 1985  to November
      1989 of Aqua-Chem,  Inc., a  manufacturer of packaged  boilers and  water
      treatment equipment. From  May 1983  to October 1985,  he was  President,
      Chief Executive Officer  and a  Director of American  Ship Building  Co.,
      which  is engaged  in the  construction, conversion  and repair  of cargo
      vessels. Mr. Chandler  is also a  Director of The  Allen Group Inc.,  and
      DeVlieg Bullard, Inc.

           Set forth below is  information regarding  certain key employees  of
      the Company:

           Michael  D.  O'Brien,  47,  has  been  employed  by  TransCor  Waste
      Services,  Inc.  (including  its  predecessor) as  Vice  President  since
      October 1992.  From June 1987 to October 1992, Mr. O'Brien served as Vice
      President of  Kimmins  Industrial  Service Corp.,  a  subsidiary  of  the
      Company.  From  July  1983 to  June  1987,  Mr.  O'Brien  served as  Vice
      President  of Jordan  Foster Scrap  Corporation in  Buffalo, New  York, a
      company  specializing in  demolition and preparation  of scrap  for sale.
      From November 1972  to July 1983, Mr. O'Brien was  employed by a national
      demolition contractor.

           John V.  Simon Jr.,  42, has been  President and General  Manager of
      Kimmins   Contracting   Corp.,   responsible   for   supervising  utility
      construction, since  May 1981,  and served  as  a Vice  President of  the
      Company from 1981 until October 1988.  From January 1978 to May 1981, Mr.
      Simon  owned Simon Construction  Company, a  company that  performed site
      work and utilities and demolition projects.<PAGE>

           Section  16(a) Beneficial Ownership  Reporting Compliance.  Pursuant
      to Section  16(a) of the  Securities Exchange Act  of 1934 and  the rules
      issued thereunder, the Company's executive officers and directors and any
      persons holding more  than 10 percent  of the Company's common  stock are
      required  to file with the Securities and Exchange Commission and the New
      York Stock Exchange reports  of their initial ownership of  the Company's
      common stock and any changes in ownership of such common stock.  Specific
      due dates have been established, and the  Company is required to disclose
      in its Annual Report on Form 10-K/A and Proxy Statement any failure to
      file such reports by these dates. Copies of such reports are required to
      be furnished to the  Company. Based solely on its review of the  copies of
      such reports furnished to the Company, or written representations that no
      reports were required, the Company believes that, during 1996, all of its
      executive officers  (including the  Named Executive Officers),  directors
      and persons owning more than 10 percent of its common stock complied with
      the Section 16(a) requirements.

      Item 11. Executive Compensation

          Summary  Compensation  Table. The  following  table  provides certain
      summary  information  concerning  compensation  paid or  accrued  by  the
      Company and its subsidiaries to the Chief Executive Officer and all other
      executive  officers whose salary and bonus exceeded $100,000 for the year
      ended December 31, 1997 (the "Named Executives"):
      <TABLE>
                              SUMMARY COMPENSATION TABLE
      <CAPTION>
                                                                     
                                           Annual Compensation       
                                    -------------------------------
                                                            Other    
                                                            Annual
                                                           Compen-
              Name and                Salary      Bonus     sation
         Principal Position    Year     ($)        ($)       ($)
      ----------------------------- ---------  ---------- ---------
      <S>                     <C>   <C>        <C>        <C>        
      Francis M. Williams      1997 $ 172,120  $       0      $0     
        Chairman of the Board, 1996 $ 184,810  $       0      $0
        President and Chief    1995 $ 271,137  $       0      $0
        Executive Officer
                                                                     
      John V. Simon, Jr.       1997 $ 100,019  $ 108,032      $0     
        President of Kimmins   1996 $  95,000  $  25,000      $0
        Contracting Corp.      1995 $  95,000  $  81,489      $0
                                                                     
      Michael D. O'Brien       1997 $ 105,427  $       0      $0     
        Vice President         1996 $  95,000  $       0      $0
        of TransCor            1995 $  91,261  $  13,740      $0
                                                                     
      (*) Represents the  Company's contribution to  the employee's  account of
          the Company's 401(k) Plan  and premiums paid by the Company  for term
          life insurance  and long-term disability. These plans, subject to the
          terms and conditions of each plan, are available to all employees.
      /TABLE
<PAGE>

      <TABLE>
                        SUMMARY COMPENSATION TABLE (continued)
      <CAPTION>
                                         Long-Term Compensation                
                                    -------------------------------
                                            Awards         Payouts   
                                    --------------------  ----------
                                                                        All
                                    Restricted Securities              Other
                                       Stock   Underlying             Compen-
              Name and               Award(s)   Options/     LTIP      sation
         Principal Position    Year     ($)     SARs (#)  Payouts(s)    ($)    
      ----------------------------- ---------- ---------- ---------- ----------
      <S>                     <C>   <C>        <C>        <C>        <C>
      Francis M. Williams      1997     $0             0      $0     $  996 (*)
        Chairman of the Board, 1996     $0             0      $0     $  995 (*)
        President and Chief    1995     $0             0      $0     $  989 (*)
        Executive Officer
                                                                     
      John V. Simon, Jr.       1997     $0        71,666      $0     $1,698 (*)
        President of Kimmins   1996     $0             0      $0     $1,655 (*)
        Contracting Corp.      1995     $0         3,333      $0     $1,647 (*)

      Michael D. O'Brien       1997     $0         2,000      $0     $  695 (*)
        Vice President         1996     $0             0      $0     $  695 (*)
        of TransCor            1995     $0         5,000      $0     $  695 (*)

      (*) Represents the  Company's contribution  to the employee's  account of
          the Company's 401(k)  Plan and premiums paid by the  Company for term
          life  insurance and long-term disability. These plans, subject to the
          terms and conditions of each plan, are available to all employees.
      /TABLE
<PAGE>


           Stock Option/SAR  Grants in the Last  Fiscal Year.  Stock options or
      stock appreciation  rights granted to  Named Executives  during the  year
      ended December 31, 1997, are summarized in the table below:
      <TABLE>
                                OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
       <CAPTION>
                                           Individual Grants               
                             ----------------------------------------------
                                                                                 Potential
                                                                                Realizable
                                                                                 Value at
                             Number of   Percent of                           Assumed Annual
                             Securities    Total                              Rates of Stock 
                             Underlying Options/SARs                               Price
                              Options/   Granted to   Exercise               Appreciation for
                                SARs     Employees     or Base                Option Term (2)
                              Granted    in Fiscal      Price    Expiration ------------------ 
                Name           (#)(1)       Year      ($/Sh)(1)     Date     5% ($)   10% ($) 
       --------------------  ----------------------  ---------- ----------  -------- ---------
       <S>                   <C>       <C>           <C>        <C>         <C>      <C>
       Joseph M. Williams       50,000        18.5%  $     2.62   04/30/07  $82,385  $208,780 
                                13,333         4.9%  $     2.62   04/30/07  $21,969  $ 55,673 
                                                                            
       John V. Simon, Jr.       50,000        18.5%  $     2.62   04/30/07  $82,385  $208,780 
                                21,666         8.0%  $     2.62   04/30/07  $35,699  $ 90,469 
                                                                            
       George A. Chandler       10,000         3.7%  $     3.94   11/12/07  $24,778  $ 62,793 
                                 8,000         3.0%  $     2.62   04/30/07  $13,182  $ 33,405 
                                                                            
       Michael A. Gold . .      10,000         3.7%  $     3.94   11/12/07  $24,778  $ 62,793 
                                 8,500         3.1%  $     2.62   04/30/07  $14,005  $ 35,493 

       (1)  All  options vest and  are exercisable in 20  percent increments  annually for five
            years after  the date  of grant.  The exercise  price of  all options  is the  fair
            market value of the Company's stock at the time of the grant.

       (2)  These amounts  represent assumed rates of appreciation for  the market value of the
            Company's stock from the date  of the grant until  the end of the option period  at
            rates arbitrarily  set by  the Securities  and Exchange  Commission.  They are  not
            intended to  forecast possible future appreciation  in the Company's stock  and any
            actual gains on exercise of options are dependent on the future performance  of the
            Company's stock.
       /TABLE
<PAGE>

            Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-
      End  Option/SAR Values.  The  following table  summarizes  the net  value
      realized on  the exercise of options in 1997 and the value of outstanding
      options as of December 31, 1997, for the Named Executives.
      <TABLE>
                          AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                 AND FISCAL YEAR-END OPTION/SAR VALUES
       <CAPTION>
                                                                  Number
                                                                    of
                                                                Securities        Value of
                                                                Underlying      Unexercised
                                                               Unexercised      In-the-Money
                                                             Options/SARs at  Options/SARs at
                                     Shares                    Year-End (#)   Year-End ($) (1)
                                    Acquired        Value      Exercisable/     Exercisable/
                  Name          on Exercise (#) Realized ($)  Unexercisable    Unexercisable  
       -----------------------  --------------  ------------ --------------- -----------------
       <S>                      <C>             <C>          <C>             <C>
       John V. Simon, Jr.              0             $0       14,333/57,333   $38,592/$154,369

       (1)  Value is calculated using  the Company's closing stock price on  December 31, 1997,
            of $5.3125 per share less the exercise price for such shares.
       </TABLE>

            No stock  options or stock appreciation rights were exercised by Mr.
      Francis M.  Williams during  the year  ended December  31, 1997, and  Mr.
      Williams does not have any outstanding  stock options or SARs at December
      31, 1997.
      <TABLE>
                                    TEN-YEAR OPTION/SAR REPRICINGS
       <CAPTION>
                                                                                     Length of
                                          Number of     Market                       Original
                                          Securities   Price of  Exercise             Option
                                         Underlining   Stock at  Price at              Term
                                           Options/    Time of    Time of            Remaining
                                             SARs     Repricing  Repricing   New    at Date of
                                         Repriced or     or         or     Exercise  Repricing
                                           Amended   Amendment   Amendment   Price      or
                 Name             Date       (#)         ($)        ($)       ($)    Amendment
       -----------------------  -------- ----------- ----------  --------- -------- ----------
       <S>                      <C>      <C>         <C>         <C>       <C>      <C>
       Norman S. Dominiak       04/30/97        7,500   $2.62      $4.50     $2.62    8 years
       Vice President                                                          
                                                                               
       Joseph M. Williams       04/30/97       13,333   $2.62      $4.50     $2.62    8 years
       Secretary/Treasurer
                                                                               
       Michael D. O'Brien       04/30/97       15,976   $2.62      $4.50     $2.62    8 years
       Vice President of
       TransCor
                                                                               
       John V. Simon, Jr.       04/30/97       21,666   $2.62      $4.50     $2.62    8 years
       President of Kimmins                                                    
       Contracting Corp.
       /TABLE
<PAGE>

            Compensation Committee Interlocks and Insider Participation. During
      the year ended December 31, 1997,  Mr. Francis M. Williams, the Company's
      President and Chairman of the Board of Directors, served as President and
      Chairman of the  Board of Directors  of TransCor, and Norman  S. Dominiak
      served as Chief Financial Officer of the Company and TransCor.

          Compensation of  Directors. During the year ended  December 31, 1997,
      the Company paid non-officer Directors an annual fee of $5,000 and $1,000
      per   board  meeting   attended.   Directors  are   reimbursed  for   all
      out-of-pocket  expenses  incurred in  attending  Board  of Directors  and
      committee meetings.

      Stock Option and Other Plans 

      1987 Stock Option Plan

           The Company adopted  a stock option  plan (the  "Plan") pursuant  to
      which  975,000  shares  of  common stock  were  originally  reserved  for
      issuance to persons  upon exercise  of options  designated as  "incentive
      stock  options," within  the  meaning of  Section  422A of  the  Internal
      Revenue code of 1986  (the "Code"), and non-qualified stock  options. The
      purpose of  the Plan  is to  attract, retain, and  motivate officers  and
      other  full-time employees  of  the Company,  and  certain other  persons
      instrumental to  the success of the  Company, and to provide  them with a
      means to  acquire  a proprietary  interest in  the Company.  The Plan  is
      administered by  a committee consisting of three  members of the Board of
      Directors.  The exercise price of an incentive stock option granted under
      the Plan  may not be less than the fair  market value of the common stock
      at the  time the option is  granted (110 percent of fair  market value in
      the case  of an incentive stock option granted to an employee owning more
      than  10 percent of the voting stock  of the Company). The exercise price
      of a non-qualified stock option granted  under the Plan may be any amount
      determined by the Board of Directors  but not less than the par  value of
      the common stock on the date of the grant. Options granted under the Plan
      must, in  general, expire no  later than ten years  from the date  of the
      grant  (five years  from the date  of grant  in the case  of an incentive
      stock option  granted to an employee  owning more than 10  percent of the
      voting  stock of the Company).  All options granted  to date provide that
      the grantees'  rights vest over  five years  from the date  of grant.  At
      December 31, 1997, Joseph M. Williams held 63,333 options to purchase the
      Company's  stock  at  $2.62   per  share  of  which  12,667   shares  are
      exercisable.  At December  31,  1997, John  V.  Simon, Jr.,  held  71,666
      options to  purchase the  Company's stock at  $2.62 per  share, of  which
      14,333 shares are exercisable.

      Savings and Profit-Sharing Plan

           The  Company offers a savings  and profit-sharing  plan (the "401(k)
      Plan"),  which qualifies  under  Sections 401(a)  and  (k) of  the  Code.
      Employees  of the Company and  certain affiliates who  have been employed
      for a  specified period of time are eligible to participate in the 401(k)
      Plan. All  contributions made by the employees  vest immediately. Amounts
      contributed  by the Company vest 20  percent after three years of service
      and 20 percent each year thereafter.<PAGE>

      Profit and Equity Participation Plan

           The  Company's Profit  and Equity  Participation  Plan (the  "Profit
      Participation Plan"),  a defined  contribution plan, covers  employees of
      the Company and certain affiliates who have been employed for a specified
      period of time. Contributions  to the Profit Participation Plan  are made
      at the  discretion of the  Board of  Directors. Employees' rights  in the
      Profit  Participation Plan vest 20  percent after three  years of service
      and  20 percent each year  thereafter. The Profit  Participation Plan was
      merged  into  The  Kimmins  Environmental Service  Corp.  Employee  Stock
      Ownership Plan Trust ("ESOP") on January 1, 1989. 

      Employee Stock Ownership Plan

           Effective  January 1,  1989,  the Company  formed  the ESOP  for the
      benefit  of the employees of the Company and its subsidiaries to purchase
      shares of the Company's common stock from time to time on the open market
      or  in negotiated  transactions at  prices deemed  to be  attractive and,
      simultaneously, the Profit Participation  Plan was merged into  the ESOP.
      Contributions to  the ESOP  are made  at the discretion  of the  Board of
      Directors and, for the year ended December 31, 1989, was $200,000. During
      1989,  the  ESOP  acquired  from the  Company's  President  approximately
      772,000 shares of  common stock at a cost of  $5,100,000. The shares were
      acquired  in exchange for a note payable to the President. Simultaneously
      with  such  purchase, the  President  purchased  certain receivables  and
      interests in certain investments from the Company for a purchase price of
      $5,100,000, which was paid by  the assignment to the Company of  the note
      received from the ESOP. The note was funded, during March 1990, through a
      long-term bank  financing agreement  guaranteed by the  Company. Expenses
      with  respect to  the ESOP  include the  recognition of  interest expense
      relating to the ESOP debt and to earned compensation. For  the year ended
      December 31, 1997, interest expense  and compensation expense relating to
      the ESOP were  $133,000 and  $480,000, respectively. As  of December  31,
      1997,  the  unpaid  ESOP  debt  is  also  reflected  as  a  reduction  in
      stockholders' equity.<PAGE>


      Item 12. Security Ownership of Certain Beneficial Owners and Management

          The following table sets forth the number of  shares of the Company's
      common  stock beneficially  owned as of  March 31,  1998, by  (i) persons
      known  by  the Company  to  own  more than  5  percent  of the  Company's
      outstanding  common stock, (ii) by  each Named Executive  and director of
      the  Company, and  (iii)  all executive  officers  and directors  of  the
      Company as a group:
      <TABLE>
       <CAPTION>
                                                                                       Percent
                                                                                        of
           Name and Address of                                               Percent    Total
             Beneficial Owner                                                  of      Voting
                   (1)                Title of Class     Number of Shares     Class     Power 
       --------------------------- -------------------- ------------------ ----------  -------
       <S>                         <C>                  <C>         <C>    <C>         <C>
       Francis M. Williams         Common Stock           1,858,975   (2)       41.8%    61.6%
                                   Class B Common Stock   2,291,569            100.0% 
                                                                                      
       Joseph M. Williams          Common Stock             366,917   (3)         8.2%    5.4%
                                                                                      
       John V. Simon, Jr.          Common Stock              24,617   (4)          *       *  
                                                                                      
       Michael Gold                Common Stock              13,523   (5)          *       *  
                                                                                      
       George Chandler             Common Stock               6,714   (6)          *       *  
                                                                                      
       All executive officers      Common Stock           2,280,354 (2)(3)       51.1%
       and directors as a group                                     (5)(7)               67.8%
       (five persons)              Class B Common Stock   2,291,569   (8)       100.0%
       </TABLE>

       (1) The addresses of all  officers and directors of the Company above are
          in care  of the Company at  1501 Second Avenue, East,  Tampa, Florida
          33605.

      (2) Includes 1,479,136 shares owned directly by Mr. Francis  M. Williams;
          133,333  shares owned  by Summerbreeze  and  121,750 shares  owned by
          Sunshadow, both of which Mr. Williams  is the sole shareholder of the
          corporate  general partner and a 50 percent limited partner (see Item
          13, "Certain  Relationships and Related Transactions"); 48,908 shares
          owned by Mr. Williams'  wife; 30,493 shares  held by Mr. Williams  as
          Trustee for his wife and children; 37,913 shares held by Mr. Williams
          as Custodian under the New  York Uniform Gifts to Minors Act  for his
          children; 6,375 shares held by the Company's 401(k) and ESOP Plans of
          which Mr. Williams is fully vested; and 1,067  shares held by Kimmins
          Realty Investment, Inc., which is owned 100 percent by Mr. Williams.

      (3) Includes 10,000 shares owned by Mr. Joseph M. Williams; 12,667 shares
          issuable upon exercise of  currently exercisable stock options; 3,030
          shares  held  by the  Company's 401(k)  and ESOP  Plans of  which Mr.
          Williams  is fully vested; and  341,220 shares held  by the Company's
          401(k) Plan and ESOP of  which Mr. Williams is a trustee  with shared
          voting and investment power.<PAGE>

      (4) Includes 1,500 shares owned by Mr. Simon; 14,333 shares issuable upon
          exercise  of currently  exercisable stock  options; and  8,334 shares
          held  by the Company's  401(k) and ESOP  plans of which  Mr. Simon is
          fully vested.

      (5) Includes 1,150 shares owned by Mr. Gold; 5,775 shares currently owned
          by Mr. Gold's wife; 2,898 held by Mr. Gold  as trustee for Mr. Gold's
          minor children;  and 3,700 shares issuable upon exercise of currently
          exercisable stock options.

      (6) Includes  3,114  shares  owned  by  Mr.  Chandler;  and 3,600  shares
          issuable upon exercise of currently exercisable stock options. 

      (7) Includes   38,995  shares   issuable  upon   exercise   of  currently
          exercisable stock options; 23,102 shares held by the Company's 401(k)
          and ESOP  Plans of which  certain officers of  the Company are  fully
          vested;  and 341,471  shares held  by the  Company's 401(k)  and ESOP
          Plans of which the Secretary of the Company is a trustee.

      (8) Includes  1,500 shares that may be purchased by Mr. Dominiak pursuant
          to  immediately exercisable  options. Does  not include  6,000 shares
          issuable to him  upon exercise  of options vesting  at various  times
          commencing  in April  1998. Also  includes 3,195  shares that  may be
          purchased by Mr. O'Brien pursuant to immediately exercisable options.
          Does  not  include 14,581  shares issuable  to  him upon  exercise of
          options vesting at various times commencing in April 1998.

          *  Less than one percent.

      Item 13. Certain Relationships and Related Transactions

          During  1995,  1996  and 1997,  the  Company  paid  landfill fees  of
      approximately $88,000, $139,000, and $0, respectively, to  a company that
      is owned primarily by the brother of Mr. Francis M.  Williams. The amount
      paid approximated fair market rates for the type of services involved.

           The  Company  had  a  note  receivable  in  an  original  amount  of
      $3,638,696 from Sunshadow Apartments, Ltd., and Summerbreeze  Apartments,
      Ltd.,  two Florida  real estate  limited partnerships  (collectively, the
      "Apartments"), of which Mr.  Francis M. Williams is the  sole shareholder
      of the corporate  general partner and was  the sole limited partner.  The
      note receivable originally accrued interest at prime  plus 1.375 percent,
      increasing to  prime plus 2 percent  on July 1, 1995,  with principal and
      interest payable in monthly  installments through December 31, 1998,  and
      was guaranteed by Mr.  Williams. The Company did not receive any interest
      or principal payments during  1997 relating to this note  receivable, and
      management of the Company discontinued recognition of interest  income of
      approximately $551,000 for the year.  Amounts due from the  Apartments at
      December 31, 1996, were approximately $3,851,000.<PAGE>

          On October 22, 1997,  the Company contributed its note  receivable in
      an original amount of approximately $3,851,000 from Sunshadow Apartments,
      Ltd.,  and  Summerbreeze  Apartments,  Ltd.,  and  other  receivables  of
      $3,059,000 for a non-controlling 49 percent preferred limited partnership
      interest in the Apartments.  The  Company will be allocated 49 percent of
      operating income, losses and  cash flow. The preference in  the Company's
      equity interest in the Apartments occurs  upon the sale of the underlying
      partnership properties. Upon the occurrence of a capital transaction, the
      Company would  receive cash flows  from the  sale or  refinancing of  the
      Apartments' assets equal to  its capital contribution prior to  any other
      partner  receiving  any proceeds.  See Note  7  of Notes  to Consolidated
      Financial Statements for additional information.

          On  November  5,  1996,  the Company  received  1,723,290  shares  of
      Cumberland common  stock in exchange for the  term note of $5,169,870 due
      from Cumberland.  The Cumberland common stock had a fair  market value of
      $3.00 per share on the date of the exchange, based upon the quoted market
      price.  This investment is accounted for under the equity method, and the
      Company's  interest  in  Cumberland  represents  an  ownership  share  of
      approximately 30  percent.  At  December 31,  1996 and  1997, the  market
      value   of  the  Cumberland  common   stock  held  by   the  Company  was
      approximately $5,170,000 and $4,739,000, respectively.

          Effective  July   1,  1997,  employees   associated  with  TransCor's
      demolition  contracting   services  unit  were  transferred   to  Kimmins
      Contracting Corp.  ("KCC"), a wholly-owned subsidiary of the Company, for
      administrative and accounting purposes. As a result, contracting services
      previously performed by employees of TransCor  were subcontracted to KCC.
      For the year ended December 31, 1997, TransCor paid $3,417,574 to KCC for
      services  rendered by Kimmins  as a subcontractor.  In addition, TransCor
      rents  equipment from  KCC for  use in  performing  demolition contracts.
      TransCor incurred  approximately $670,000, $2,103,000, and  $2,573,000 in
      equipment rental  charges with KCC for the years ended December 31, 1995,
      1996, and 1997, respectively.<PAGE>

                                       PART IV

      Item  14. Exhibits, Financial  Statement, Schedules, and  Reports on Form
      8-K

      (a) List of documents filed as part of this Report

          1.  Financial Statements

              - Report of Independent Certified Public Accountants
              - Consolidated balance sheets at December 31, 1996 and 1997
              - Consolidated statements of operations for each of 
                  the three years in the period ended December 31, 1997
              - Consolidated statements of stockholders' equity for each of
                  the three years in the period ended December 31, 1997
              - Consolidated statements of cash flows for each of 
                  the three years in the period ended December 31, 1997
              - Notes to consolidated financial statements

          2.  Financial Statement Schedule

              Schedule                                                    Page 
              Number                                                     Number

              II  -  Valuation and Qualifying Accounts  . . . . . . . . .  S-1 

          All other Schedules are omitted since the required information is not
      present or is  not present in amounts sufficient to require submission of
      the Schedules, or  because the  information required is  included in  the
      financial statements and notes thereto.

          3.  The following documents are filed as exhibits to this 
              Annual Report on Form 10-K/A:

              3(a)   -- Restated Certificate of Incorporation of Registrant, 
                          as amended.
              3(b)*  -- By-laws of Registrant
              10.1** -- Stock Option Plan
              10.2   -- Form of Stock Option Agreement for Executives
              10.3   -- Partnership Agreements
              10.4   -- Term Notes for Equipment Financed with
                          Caterpillar Financial Services
              21     -- Subsidiaries of the Registrant
              23     -- Consent of Ernst & Young LLP
              27     -- Financial Data Schedule (for SEC use only)
              27.1   -- Restated Financial Data Schedule-1996 
                          (for SEC use only)
              27.2   -- Restated Financial Data Schedule-1995 
                          (for SEC use only)

              * Previously filed  on March  17, 1987,  as part  of Registrant's
                Registration  Statement on  Form S-1,  File  No. 33-12677,  and
                incorporated herein by reference thereto.
             ** Previously  filed on  June 29,  1989, as  part of  Registrant's
                Form  S-8,  File  No.  33-29612,  and  incorporated  herein  by
                reference thereto.

      (b) Reports on Form 8-K. - None.<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, thereunder duly authorized.

                                       KIMMINS CORP.
                                  
                                  
      Date:   July 6, 1998         By: /s/ Francis M. Williams                 
             ---------------------     ----------------------------------------
                                       Francis M. Williams
                                       President
      
           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.
      
      Date:   July 6, 1998             /s/ Francis M. Williams                 
             ---------------------     ----------------------------------------
                                       Francis M. Williams
                                       President and Director
                                       (Chief Executive Officer)
                                  
      Date:   July 6, 1998             /s/ Joseph M. Williams                  
             ---------------------     ----------------------------------------
                                       Joseph M. Williams
                                       Secretary/Treasurer
                                  
      Date:  July 6, 1998              /s/ Norman S. Dominiak                  
             ---------------------     ----------------------------------------
                                       Norman S. Dominiak
                                       Vice President and 
                                       Chief Financial Officer
                                       (Principal Accounting and 
                                        Financial Officer)
                                  
      Date:   July 6, 1998             /s/ Michael A. Gold                     
             ---------------------     ----------------------------------------
                                       Michael A. Gold, Director
                                   
      Date:   July 6, 1998             /s/ George A. Chandler                  
             ---------------------     ----------------------------------------
                                       George A. Chandler, Director
      <PAGE>

                                                                     EXHIBIT 21

                            SUBSIDIARIES OF THE REGISTRANT




                                                      State or Providence
                                                        of Incorporation
                          Company                       or Organization
        ------------------------------------------- ------------------------

        Kimmins Contracting Corp. . . . . . . . . . Florida
        Kimmins Ltd.  . . . . . . . . . . . . . . . Ontario, Canada

        Kimmins Industrial Service Corp.  . . . . . Delaware

        Kimmins Abatement Corp. . . . . . . . . . . Delaware
        ThermoCor Kimmins, Inc. . . . . . . . . . . Florida
          (f/k/a Kimmins Thermal Corp.)

        Kimmins Specialty Contracting, Inc. . . . . Florida

        Kimmins Associates, Inc.  . . . . . . . . . Delaware

        Kimmins Equipment Leasing Corp. . . . . .   Florida
        TransCor Waste Services, Inc. . . . . . . . Florida

        Kimmins Recycling Corp. . . . . . . . . . . Florida

        Bay Area Recycling and Fibers, Inc. . . . . Florida

        Kimmins Incorporated  . . . . . . . . . . . Texas
        Kimmins International . . . . . . . . . . . Florida

        Fourth Avenue Holdings, Inc.  . . . . . . . Florida

        40th Street, Inc. . . . . . . . . . . . . . Florida

        Lantana Eighth Avenue Corp. . . . . . . . . Florida
        Factory Street Corporation  . . . . . . . . Tennessee<PAGE>

                                                                     EXHIBIT 23








                 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


          We  consent to  the incorporation  by reference  in  the Registration
      Statement (Form S-8  No. 33-29612)  pertaining to the  1987 Stock  Option
      Plan of  Kimmins Corp. and in the related Prospectus, of our report dated
      June  18, 1998, with respect to the consolidated financial statements and
      schedule of Kimmins Corp. included in  the Annual Report (Form 10-K)  for
      the year ended December 31, 1997.








                                                   /s/ Ernst & Young LLP




      Tampa, Florida
      June 30, 1998<PAGE>

                                    KIMMINS CORP.

                   Schedule II - Valuation and Qualifying Accounts

                           Allowance for Doubtful Accounts


                                                        
                                             Additions   Deductions
                                  Balance at Charged to     from    Balance at
                                  Beginning  Costs and   Allowances   End of
              Description         of Period   Expenses      (a)       Period   
      --------------------------  ---------- ---------- ----------- ----------
                                                              
      Year ended                  $ 662,997  $ 404,455  $ (670,241) $  397,211 
        December 31, 1995 . . .  
      Year ended                  $ 397,211  $ 430,381  $ (210,884) $  616,708 
        December 31, 1996 . . .  
      Year ended                  $ 616,708  $ 772,522  $ (467,929) $  921,301 
        December 31, 1997 . . .  


      (a) Balance represents the write-off of uncollectible accounts.






























                                         S-1<PAGE>


                                                                   EXHIBIT 10.4
                            TERM LOAN PROMISSORY NOTE FORM

                                   PROMISSORY NOTE

      Borrower: Kimmins Equipment Leasing Corp.
         1501 Second Avenue, East
         Tampa, Florida 33605

      Lender:  Caterpillar Financial Services
         Corporation
         3322 West End Avenue
         Nashville, Tennessee 37203-1071

      Principal Amount: $28,589,773.52                   Date of Note: 11-24-97

      Promise to Pay. For Value Received, Borrower promises to pay to the order
      of Lender,  in immediately available funds  at the address of  Lender set
      forth  above or at such other place  as Lender or the holder hereof shall
      designate in writing, the  principal amount of Twenty Eight  Million Five
      Hundred and Eighty-Nine Thousand  Seven Hundred and Seventy-Three Dollars
      and 52/100ths  Dollars ($28,589,773.52) with interest  on the outstanding
      principal from and including the date  hereof at the per annum rate equal
      to that  set forth below, until  the indebtedness evidenced by  this Note
      has been paid in full.

      Payment Schedule. Monthly payments of  principal and interest in arrears,
      each in an amount equal to Five Hundred and One  Thousand and One Hundred
      and Twenty-Seven Dollars and 02/100ths Dollars ($501,127.02 shall be made
      commencing on the 15th day  of January, 1998, and continuing on  the 15th
      day  of each  month  thereafter through  and  including the  15th day  of
      December, 2002, [and  a final balloon payment equal  to all principal and
      interest outstanding  at  the time  shall  be made  on  the 15th  day  of
      January,  2003,  for a  total of  Sixty-One  (61) payments.  All payments
      received  shall be  applied  first to  accrued  interest and  other  non-
      principal  amounts then  owing  under this  Note  or the  Loan  Agreement
      (defined  below)  and  then to  the  principal  balance outstanding.  The
      acceptance  of any  payment which  is less  than payment  in full  of all
      amounts  due  and owing  at  such  time shall  not  constitute waiver  of
      Lender's or the holder's right to receive payment in full  of all amounts
      due and owing at such time or any prior or subsequent time.

      Interest. Interest shall be calculated at the fixed per annum. rate equal
      to Seven  and 75/100ths percent  (7.75%). All interest  payable hereunder
      shall be calculated on  the basis of the actual number of days elapsed in
      a year of three hundred sixty (360) days.

      Time. Time  is of  the essence  hereof. If  any payment  or portion  of a
      payment or  other sum due hereunder is  not paid within ten  (10) days of
      when due,  there shall  be immediately due  and payable from  Borrower to
      Lender a late fee equal to five percent (5%) of the scheduled payment.<PAGE>

      Prepayment. Borrower may prepay this Note in full on any payment due date
      by giving  Lender at least  thirty (30)  days advance written  notice and
      paying  the then  unpaid  principal balance  of  this Note,  all  accrued
      interest and all other amounts payable hereunder.

      Savings.  If at  any time  implementation of  any provision  hereof shall
      raise  or be deemed to raise the  interest rate per annum contracted for,
      charged  in or  collectible  under this  Note  above the  lawful  maximum
      interest  rate per annum  in effect from  time to time  in the applicable
      jurisdiction, then such interest rate per annum shall be limited to  such
      lawful  maximum interest rate; provided, however,  that if the applicable
      state law is amended or the law of  the United States of America preempts
      the applicable state  law, so that  it becomes lawful  for the Lender  to
      receive a greater  interest rate  per annum, than  is presently  allowed,
      Borrower  agrees that,  on  the  effective  date  of  such  amendment  or
      preemption, as  the case may  be, the lawful  maximum hereunder shall  be
      increased to the maximum interest rate  per annum, allowed by the  higher
      of the amended state  law or the law of the United  States of America. If
      from  any  circumstance,  Lender or  any  holder  shall  ever receive  as
      interest or otherwise an  amount which will exceed the  applicable lawful
      maximum rate,  such amount  which would be  excessive shall  be deemed  a
      mistake  and shall be either refunded or  applied to the reduction of any
      principal owing under this Note, as Lender or the holder may elect.

      Default. The following  actions and/or failures  to act shall  constitute
      events of default under this Note:

           Default Under This Note.  Should Borrower default in the  payment of
      any  sum  when due  under  this  Note  and  such default  shall  continue
      unremedied for ten (10) days thereafter.

           Other Defaults  in Favor  of Lender.  Should Borrower  default under
      any other promissory note, loan, extension of credit, security agreement,
      or obligation in favor of Lender.

           False Statements. Should any representation  or warranty of Borrower
      or any guarantor made in connection with obtaining the loan  evidenced by
      this  Note or  any  security agreement  directly  or indirectly  securing
      repayment  of  this Note  prove  to  be incorrect  or  misleading in  any
      material respect.

           Default Under Loan  and Security Agreement. Should  Borrower default
      under  that certain Tenn Loan  and Security Agreement  dated November 20,
      1997, entered into between Borrower and Lender (the "Loan Agreement"), or
      should Borrower  default under any  other security agreement  directly or
      indirectly securing repayment of this Note.

           Insecurity.  Should Borrower  have a  material  adverse change  with
      respect to its financial condition which results, in Lender's opinion, in
      an impairment of the prospect of repayment of this Note.<PAGE>

           Default in Favor  of Third  Parties. Should  Borrower default  under
      any  material  promissory  note,  loan,  extension  of  credit,  security
      agreement,  purchase or sales agreement, or any other agreement, in favor
      of any other creditor or person.

           Insolvency, Bankruptcy. Should  Borrower become unable, or  admit in
      writing its inability,  to pay its  debts as they  mature, or become  the
      subject of proceedings  in bankruptcy  or insolvency, or  make a  general
      assignment for the  benefit of  creditors, or enter  into an  arrangement
      with  a group of creditors, or enter into  any action for the purposes of
      accomplishing any of the preceding.

           Cease to do Business.  Should Borrower or any affiliate  of Borrower
      wind up,  liquidate, cease to  do business, dissolve,  reorganize, merge,
      consolidate  or sell, assign, transfer, lease or otherwise dispose of all
      or  substantially  all  of its  assets,  or  become  the subject  of  any
      proceeding for any of the foregoing purposes.

      Lender's Rights Upon  Default. Should any one  or more events of  default
      occur or exist under this Note,  as provided above, Lender shall have all
      rights and remedies  reserved to Lender under the  Term Loan and Security
      Agreement,  and shall  further have  the right,  at  its sole  option, to
      accelerate the maturity and  insist upon immediate payment in full of the
      unpaid principal balance and  all accrued interest and all  other amounts
      then outstanding  under this Note (including  additional interest accrued
      on past  due payments and any prepayment  premium, as provided herein and
      under the Loan and Security Agreement), together with Lender's attorney's
      fees, costs, expenses  and other  fees and charges,  as provided  herein.
      Lender  shall have  the  further  right, again  at  its  sole option,  to
      accelerate the maturity and  to insist upon immediate payment in  full of
      each  and every other loan,  extension of credit,  debt, liability and/or
      obligation of every nature and kind that Borrower may then owe to Lender,
      whether direct  or indirect or by way of assignment, and whether absolute
      or  contingent,  liquidated or  unliquidated,  voluntary  or involuntary,
      determined  or undetermined,  secured or  unsecured, whether  Borrower is
      obligated alone  or with others on a joint, several or solidary basis, as
      a principal obligor or  otherwise, all without further notice,  demand or
      putting in default, unless Lender shall otherwise elect.

      Attorney's   Fees.  If  Lender  refers  this  Note  to  an  attorney  for
      collection, or files  suit against Borrower to  collect this Note, or  if
      Borrower  files for bankruptcy  or other relief  from creditors, Borrower
      agrees  to pay Lender's reasonable  attorney's fees and  all other costs,
      expenses and fees  incurred by Lender in any such  action. All such fees,
      costs  and expenses shall become a part  of the indebtedness evidenced by
      this  Note, and  shall bear interest  at the  rate of  interest in effect
      under this Note from time to time.<PAGE>

      Right  of  Offset. As  collateral security  for  the prompt  and punctual
      payment  and  satisfaction  of  this  Note,  Borrower  grants   Lender  a
      continuing security interest in the form of a pledge of any and all funds
      that  Borrower  may have  at  any  time on  deposit  with  Lender or  any
      affiliated companies of  Lender and  hereby consents and  agrees, in  the
      event  of   default  hereunder,   to  Lender's  offsetting   against  the
      obligations of Borrower  hereunder any sums owing from time  to time from
      Lender or  any subsidiary or  affiliate of Lender  (including Caterpillar
      Inc.) to Borrower.

      Waivers.  Borrower, and  each  guarantor, surety,  endorser or  any other
      party who may at any  time become liable for payment of  the indebtedness
      evidenced  by  this   Note  (each,  an  "Other  Obligor"),  hereby  waive
      presentment for payment, demand for  payment, protest, notice of protest,
      notice of  nonpayment,  notice of  dishonor, notice  of acceleration  and
      notice  of intent  to  accelerate hereunder,  and  all other  notices  in
      connection with this Note, filing of suit and diligence in collecting any
      sums due under this Note or enforcing any of the security for  this Note,
      and  severally  agree that  their obligations  and liabilities  to Lender
      hereunder shall  be  on  a  "joint and  several"  basis.  To  the  extent
      permitted  by  law, Borrower  and each  Other  Obligor hereby  waives all
      rights to plead any statute of limitations  as a defense to any action on
      this Note. BORROWER AND  EACH OTHER OBLIGOR FURTHER  WAIVES THE RIGHT  TO
      TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
      ARISING  OUT  OF  OR  RELATED TO  THIS  NOTE,  AND  ACKNOWLEDGE  THAT THE
      FOREGOING  WAIVER  IS A  MATERIAL INDUCEMENT  TO  LENDER MAKING  THE LOAN
      EVIDENCED  HEREBY AND THAT LENDER  IS RELYING UPON  THE FOREGOING WAIVER.
      BORROWER  AND EACH  OTHER  OBLIGOR WARRANTS  THAT  IT HAS  KNOWINGLY  AND
      VOLUNTARILY WAIVED ITS  JURY TRIAL  RIGHTS. IN THE  EVENT OF  LITIGATION,
      THIS NOTE  MAY BE FILED  AS A WRITTEN  CONSENT TO A  TRIAL BY  THE COURT.
      Borrower and each Other Obligor further severally agree that discharge or
      release of  any  party  who  is  or may  be  liable  to  Lender  for  the
      indebtedness  represented hereby, or  the release or  substitution of any
      collateral directly  or indirectly  securing repayment hereof,  shall not
      have the effect of releasing any other party or parties, who shall remain
      liable to  Lender,  or of  releasing  any other  collateral that  is  not
      expressly   released  by   Lender.  Borrower   and  each   Other  Obligor
      additionally  agree that  Lender's  acceptance of  payment other  than in
      accordance  with the terms of this Note, or Lender's subsequent agreement
      to any extension of time, renewal, waiver or modification of this Note or
      any  of  its provisions  (without limitation  as to  number or  term), or
      Lender's failure or delay in exercising any rights or remedies granted to
      Lender, shall likewise  not have the effect of  releasing Borrower or any
      other party or parties from their respective obligations to Lender, or of
      releasing any  collateral that  directly or indirectly  secures repayment
      hereof. In  addition, any  failure  or delay  on the  part  of Lender  to
      exercise any of the rights and  remedies granted to Lender shall not have
      the effect of  waiving any of  Lender's rights and remedies.  Any partial
      exercise   of  any  rights  and/or   remedies  granted  to  Lender  shall
      furthermore  not  be  construed  as  a waiver  of  any  other  rights and
      remedies, it being Borrower's intent  and agreement that Lender's  rights
      and remedies<PAGE>

      shall  be cumulative in nature.  Borrower and each  Other Obligor further
      agree that, should  any event of default occur or  exist under this Note,
      any waiver  or forbearance on the part of Lender to pursue the rights and
      remedies available to  Lender shall be  binding upon Lender  only to  the
      extent  that Lender specifically agrees to any such waiver or forbearance
      in writing. A waiver or forbearance on the part of Lender as to one event
      of default shall not be  construed as a waiver  of forbearance as to  any
      other event of default.

      Successors  and  Assigns  Liable.  Borrower's and  each  Other  Obligor's
      obligations  and  agreements  under  this  Note  shall  be  binding  upon
      Borrower's   and  each  Other  Obligor's  respective  successors,  heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this  Note shall inure to the benefit of
      Lender's successors  and assigns, as well as  to any subsequent holder or
      holders of this Note.

      Caption Headings, Plural  and Singular. Caption headings  of the sections
      of this Note are for convenience purposes only and are not  to be used to
      interpret  or  to define  their provisions.  In  this Note,  whenever the
      context so requires, the singular includes the plural and the plural also
      includes the singular.

      Severability, Integration.  If any provision of  this Note is held  to be
      invalid, illegal or unenforceable  by any court, that provision  shall be
      deleted from this Note and the  balance of this Note shall be interpreted
      as  if the  deleted provision  never existed.  This Note  constitutes the
      entire agreement of Borrower with respect  to the repayment to Lender  of
      the  indebtedness  evidenced hereby  and may  not  be altered  or amended
      except by  a Note,  any waiver or  forbearance on the  part of  Lender to
      pursue the rights and remedies available to Lender shall  be binding upon
      Lender  only to the  extent that Lender  specifically agrees to  any such
      waiver or  forbearance in writing. A waiver or forbearance on the part of
      Lender as to one event  of default shall not be construed as  a waiver of
      forbearance as to any other event of default.

      Successors  and  Assigns  Liable.  Borrower's and  each  Other  Obligor's
      obligations  and  agreements  under  this  Note  shall  be  binding  upon
      Borrower's  and  each  Other   Obligor's  respective  successors,  heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this  Note shall inure to the benefit of
      Lender's  successors and assigns, as well  as to any subsequent holder or
      holders of this Note.

      Caption Headings, Plural  and Singular. Caption headings  of the sections
      of this Note are for convenience purposes  only and are not to be used to
      interpret  or  to define  their provisions.  In  this Note,  whenever the
      context so requires, the singular includes the plural and the plural also
      includes the singular.<PAGE>

      Severability, Integration. If any  provision of this Note  is held to  be
      invalid, illegal or unenforceable  by any court, that provision  shall be
      deleted from  this Note and the balance of this Note shall be interpreted
      as  if the  deleted provision  never existed.  This Note  constitutes the
      entire agreement of Borrower  with respect to the repayment  to Lender of
      the  indebtedness  evidenced hereby  and may  not  be altered  or amended
      except by a writing signed by Lender.

      Applicable  Law.  This  Note  shall  be  governed  by  and  construed  in
      accordance  with the  internal laws  of the  State of  Tennessee, without
      regard to the conflicts of laws principles thereof.

      Borrower has  read and fully  understands all  of the provisions  of this
      Note.


      -----------------------------
      Borrower



      Signature:    /s/ John V. Simon, Jr.
                    ----------------------
      Name (print): John V. Simon, Jr.
                    ----------------------
      Title:        President
                    ----------------------


      Signature:    /s/ Hubert Freund
                    ----------------------
      Name (print): Hubert Freund
                    ----------------------
      Title:        Regional Sales Manager
                    ----------------------<PAGE>

                         AMENDED AND RESTATED PROMISSORY NOTE


      Borrower: Kimmins Contracting Corp.
         1501 Second Avenue, East
         Tampa, Florida 33605

      Lender:  Caterpillar Financial Services
         Corporation
         3322 West End Avenue
         Nashville, Tennessee 37203-1071

      Principal Amount: U.S. $16,000,000.00              Date of Note: 11-20-97


      Restatement. This Amended and Restated Promissory Note ("Note") is issued
      in  conjunction  with  that certain  Working  Capital  Loan  and Security
      Agreement  dated  February  26, 1997,  and  amended  March  11, 1997  and
      November 20, 1997 (as  the same may be further amended from time to time,
      the "Loan Agreement"),  between Borrower  and Lender, and  Lender is  and
      shall  be entitled  to all  benefits  thereof and  of all  Loan Documents
      executed  and delivered  in connection  therewith. This  Note  amends and
      restates  one or more notes dated prior  to the date hereof (individually
      and  collectively, the "Original Note"), and is given in substitution and
      replacement  for  the  Original  Note.  The  delivery  of  this  Note  in
      substitution  and replacement of the Original Note shall not constitute a
      novation or other  release or satisfaction of  the indebtedness evidenced
      thereby and hereby. The provisions of the Loan Agreement are incorporated
      herein  by this  reference.  All capitalized  terms  used herein,  unless
      otherwise  defined herein, shall have the meanings ascribed to such terms
      in the Loan Agreement.

      Promise to Pay. For Value Received, Borrower promises to pay to the order
      of Lender, in immediately  available funds at the  address of Lender  set
      forth above or at  such other place as Lender or  the holder hereof shall
      designate  in  writing, the  above Principal  Amount  for this  Loan with
      interest  on the outstanding principal from and including the date hereof
      pursuant to the  terms of the Loan Agreement referred  to below until the
      indebtedness evidenced by this Note has  been paid in full, and  Borrower
      hereby ratifies all previous Notes evidencing Loans made pursuant
      to such Loan Agreement.

      Payment  Schedule. Monthly  payments  of  interest  in arrears  with  the
      principal becoming  due and  owing  pursuant to  the  terms of  the  Loan
      Agreement.  All  payments received  shall  be  applied first  to  accrued
      interest  and other non-principal amounts  then owing under  this Note or
      the Loan Agreement  and then  to the principal  balance outstanding.  The
      acceptance  of any  payment which  is less  than payment  in full  of all
      amounts due  and  owing  at such  time  shall not  constitute  waiver  of
      Lender's or the holder's right to  receive payment in full of all amounts
      due and owing at such time or any prior or subsequent time.<PAGE>

      Interest. Interest shall be  calculated pursuant to the terms of the Loan
      Agreement.  All interest  payable  hereunder shall  be calculated  on the
      basis of the actual  number of days  elapsed in a  year of three  hundred
      sixty (360) days.

      Time.  Time is  of the  essence hereof.  If any  payment or portion  of a
      payment or other sum due hereunder is not paid within  fourteen (14) days
      of when due, there shall be  immediately due and payable from Borrower to
      Lender a late fee equal to five percent (5%) of the scheduled payment.

      Prepayment. Borrower may prepay this Note in full on any payment due date
      by paying the  then unpaid  principal balance of  this Note, all  accrued
      interest and all other amounts payable hereunder.

      Savings.  If at  any time  implementation of  any provision  hereof shall
      raise  or be deemed to raise the  interest rate per annum contracted for,
      charged  in or  collectible  under this  Note  above the  lawful  maximum
      interest  rate per annum  in effect from  time to time  in the applicable
      jurisdiction, then such interest rate per annum  shall be limited to such
      lawful  maximum interest rate; provided, however,  that if the applicable
      state  law is amended or the law of the United States of America preempts
      the applicable state  law, so that  it becomes lawful  for the Lender  to
      receive  a greater  interest rate  per annum  than is  presently allowed,
      Borrower  agrees that,  on  the  effective  date  of  such  amendment  or
      preemption,  as the case  may be, the  lawful maximum  hereunder shall be
      increased to the maximum interest rate per annum allowed by the higher of
      the amended state law or the law of the United States of America. If from
      any circumstance, Lender  or any holder shall ever receive as interest or
      otherwise an amount which will exceed the applicable lawful maximum rate,
      such amount  which would be excessive shall be deemed a mistake and shall
      be either  refunded or applied  to the reduction  of any  principal owing
      under this Note, as Lender or the holder may elect.

      Default. The following  actions and/or failures  to act shall  constitute
      events of default under this Note:

           Default Under This Note.  Should Borrower default in the  payment of
      any  sum  when  due under  this  Note  and  such default  shall  continue
      unremedied for fourteen (14) days thereafter.

           Other Defaults  in Favor  of Lender.  Should Borrower  default under
      any other promissory note, loan, extension of credit, security agreement,
      or obligation in favor of Lender.

           False Statements. Should any representation  or warranty of Borrower
      or any guarantor made in connection  with obtaining the loan evidenced by
      this  Note or  any  security agreement  directly  or indirectly  securing
      repayment  of  this Note  prove  to be  incorrect  or  misleading in  any
      material respect.<PAGE>

           Default Under Loan  and Security Agreement. Should  Borrower default
      under  that certain  Working  Capital Loan  and Security  Agreement dated
      February 26, 1997, and amended  March 11, 1997 and November 20,  1997 (as
      the  same may be further amended from  time to time) entered into between
      Borrower and  Lender (the "Loan  Agreement"), or should  Borrower default
      under  any  other  security  agreement directly  or  indirectly  securing
      repayment of this Note.

           Insecurity.  Should Borrower  have a  material  adverse change  with
      respect to its financial condition which results, in Lender's opinion, in
      an impairment of the prospect of repayment of this Note.

           Default in  Favor of  Third Parties.  Should Borrower default  under
      any  material  promissory  note,  loan,  extension  of  credit,  security
      agreement,  purchase or sales agreement, or any other agreement, in favor
      of any other creditor or person.

           Insolvency, Bankruptcy. Should  Borrower become unable, or  admit in
      writing its inability,  to pay its  debts as they  mature, or become  the
      subject of proceedings  in bankruptcy  or insolvency, or  make a  general
      assignment for the  benefit of  creditors, or enter  into an  arrangement
      with a group of  creditors, or enter into any action  for the purposes of
      accomplishing any of the preceding.

           Cease to do Business.  Should Borrower or any affiliate  of Borrower
      wind up,  liquidate, cease to  do business, dissolve,  reorganize, merge,
      consolidate  or sell, assign, transfer, lease or otherwise dispose of all
      or  substantially  all  of  its  assets, or  become  the  subject  of any
      proceeding for any of the foregoing purposes.

      Lender's Rights  Upon Default. Should  any one or more  events of default
      occur or exist under this Note,  as provided above, Lender shall have all
      rights  and remedies  reserved to  Lender under  the Loan  Agreement, and
      shall  further have  the right,  at its  sole option,  to  accelerate the
      maturity  and insist  upon  immediate  payment  in  full  of  the  unpaid
      principal balance and  all accrued  interest and all  other amounts  then
      outstanding  under this  Note (including  additional interest  accrued on
      past  due payments  and any  prepayment premium,  as provided  herein and
      under the Loan Agreement), together with Lender's attorney's fees, costs,
      expenses and other  fees and  charges, as provided  herein. Lender  shall
      have  the  further right,  again at  its sole  option, to  accelerate the
      maturity and to insist upon  immediate payment in full of each  and every
      other  loan, extension  of credit, debt,  liability and/or  obligation of
      every  nature and  kind that  Borrower may  then  owe to  Lender, whether
      direct  or indirect  or by  way of  assignment, and  whether  absolute or
      contingent,  liquidated  or   unliquidated,  voluntary  or   involuntary,
      determined  or undetermined,  secured or  unsecured, whether  Borrower is
      obligated alone  or with others on a joint, several or solidary basis, as
      a principal obligor or  otherwise, all without further notice,  demand or
      putting in default, unless Lender shall otherwise elect.<PAGE>

      Attorney's   Fees.  If  Lender  refers  this  Note  to  an  attorney  for
      collection, or  files suit against Borrower  to collect this Note,  or if
      Borrower  files for bankruptcy  or other relief  from creditors, Borrower
      agrees  to pay Lender's reasonable  attorney's fees and  all other costs,
      expenses and fees  incurred by Lender in any such  action. All such fees,
      costs and expenses shall become a  part of the indebtedness evidenced  by
      this  Note, and  shall bear interest  at the  rate of  interest in effect
      under this Note from time to time.

      Right  of  Offset. As  collateral security  for  the prompt  and punctual
      payment  and  satisfaction  of  this  Note,  Borrower  grants   Lender  a
      continuing security interest in the form of a pledge of any and all funds
      that  Borrower  may have  at  any  time on  deposit  with  Lender or  any
      affiliated companies of  Lender and  hereby consents and  agrees, in  the
      event  of   default  hereunder,   to  Lender's  offsetting   against  the
      obligations of Borrower hereunder  any sums owing from time  to time from
      Lender or  any subsidiary or  affiliate of Lender  (including Caterpillar
      Inc.) to Borrower.

      Waivers.  Borrower, and  each  guarantor, surety,  endorser or  any other
      party who may at any  time become liable for payment of  the indebtedness
      evidenced  by  this   Note  (each,  an  "Other  Obligor"),  hereby  waive
      presentment for payment, demand for  payment, protest, notice of protest,
      notice of  nonpayment,  notice of  dishonor, notice  of acceleration  and
      notice  of intent  to  accelerate hereunder,  and  all other  notices  in
      connection with this Note, filing of suit and diligence in collecting any
      sums due under this Note  or enforcing any of the security for this Note,
      and  severally  agree that  their obligations  and liabilities  to Lender
      hereunder  shall  be on  a  "joint  and  several"  basis. To  the  extent
      permitted  by  law, Borrower  and each  Other  Obligor hereby  waives all
      rights to plead any statute of limitations as a defense to any  action on
      this Note. BORROWER AND  EACH OTHER OBLIGOR  FURTHER WAIVES THE RIGHT  TO
      TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
      ARISING OUT  OF  OR  RELATED  TO  THIS NOTE,  AND  ACKNOWLEDGE  THAT  THE
      FOREGOING  WAIVER  IS A  MATERIAL INDUCEMENT  TO  LENDER MAKING  THE LOAN
      EVIDENCED  HEREBY AND THAT LENDER  IS RELYING UPON  THE FOREGOING WAIVER.
      BORROWER  AND EACH  OTHER  OBLIGOR WARRANTS  THAT  IT HAS  KNOWINGLY  AND
      VOLUNTARILY WAIVED ITS  JURY TRIAL  RIGHTS. IN THE  EVENT OF  LITIGATION,
      THIS NOTE  MAY BE FILED  AS A  WRITTEN CONSENT TO  A TRIAL BY  THE COURT.
      Borrower and each Other Obligor further severally agree that discharge or
      release  of  any  party  who  is  or may  be  liable  to  Lender  for the
      indebtedness  represented hereby, or  the release or  substitution of any
      collateral directly  or indirectly  securing repayment hereof,  shall not
      have the effect of releasing any other party or parties, who shall remain
      liable  to  Lender, or  of releasing  any  other collateral  that  is not
      expressly   released  by   Lender.  Borrower   and  each   Other  Obligor
      additionally  agree that  Lender's  acceptance of  payment other  than in
      accordance  with the terms of this Note, or Lender's subsequent agreement
      to any extension of time, renewal, waiver or modification of this Note or
      any of  its provisions  (without limitation  as to  number  or term),  or
      Lender's failure or delay in exercising any rights or remedies granted to
      Lender, shall likewise not have the effect of releasing<PAGE>


      Borrower  or any other party or parties from their respective obligations
      to Lender, or  of releasing  any collateral that  directly or  indirectly
      secures repayment hereof. In addition,  any failure or delay on the  part
      of Lender  to exercise any of  the rights and remedies  granted to Lender
      shall not have the effect of waiving any of Lender's rights and remedies.
      Any  partial exercise  of any  rights and/or  remedies granted  to Lender
      shall furthermore  not be construed as  a waiver of any  other rights and
      remedies, it being Borrower's  intent and agreement that Lender's  rights
      and  remedies  shall be  cumulative in  nature.  Borrower and  each Other
      Obligor further agree that,  should any event  of default occur or  exist
      under  this Note,  any waiver  or forbearance  on the  part of  Lender to
      pursue the rights and  remedies available to Lender shall be binding upon
      Lender only  to the extent  that Lender  specifically agrees to  any such
      waiver or forbearance in writing. A  waiver or forbearance on the part of
      Lender as to one event of  default shall not be construed as a  waiver of
      forbearance as to any other event of default.

      Successors  and  Assigns  Liable.  Borrower's and  each  Other  Obligor's
      obligations  and  agreements  under  this  Note  shall  be  binding  upon
      Borrower's  and  each  Other  Obligor's   respective  successors,  heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this Note shall inure to  the benefit of
      Lender's  successors and assigns, as well as  to any subsequent holder or
      holders of this Note.

      Caption Headings, Plural and  Singular. Caption headings of the  sections
      of  this Note are for convenience purposes only and are not to be used to
      interpret  or  to define  their provisions.  In  this Note,  whenever the
      context so requires, the singular includes the plural and the plural also
      includes the singular.

      Severability, Integration. If any  provision of this  Note is held to  be
      invalid, illegal or unenforceable  by any court, that provision  shall be
      deleted from this Note and the balance of this Note  shall be interpreted
      as  if the  deleted provision  never existed.  This Note  constitutes the
      entire agreement of Borrower with  respect to the repayment to Lender  of
      the  indebtedness  evidenced hereby  and may  not  be altered  or amended
      except by a writing signed by Lender.

      Applicable  Law.  This  Note  shall  be  governed  by  and  construed  in
      accordance  with the  internal laws  of the  State of  Tennessee, without
      regard to the conflicts of laws principles thereof.<PAGE>

      Borrower has read  and fully  understands all of  the provisions of  this
      Note.

      Signature:     /s/ John V. Simon, Jr.
                     ----------------------
      Name (print):  John V. Simon, Jr.
                     ----------------------
      Title:         President
                     ----------------------


      Signature:     /s/ Hubert Freund
                     ----------------------
      Name (print):  Hubert Freund
                     ----------------------
      Title:         Regional Sales Manager
                     ----------------------<PAGE>


                         Working Capital Loan Promissory Note

                                   PROMISSORY NOTE

      Borrower: Kimmins Contracting Corp.
         1501 Second Avenue, East
         Tampa, Florida 33605

      Lender:  Caterpillar Financial Services
         Corporation
         3322 West End Avenue
         Nashville, Tennessee 37203-1071

      Principal Amount: U.S. $11,000,000.00              Date of Note: 02/26/97


      Promise to Pay. For Value Received, Borrower promises to pay to the order
      of Lender,  in immediately available funds  at the address of  Lender set
      forth  above or at such other place  as Lender or the holder hereof shall
      designate  in writing, the outstanding principal balance of all Loans, up
      to the  Principal Amount set forth  above, made pursuant to  the terms of
      the  Loan  Agreement  referred  to  below  on  the  date  on  which  such
      outstanding principal amounts become due and payable pursuant to the Loan
      Agreement, in strict accordance with the terms thereof. Borrower likewise
      promises to pay to Lender interest from and after the date hereof at such
      interest rates, payable at such times, and computed in such manner as are
      specified  in the  Loan Agreement,  in strict  accordance with  the terms
      thereof. All principle  amounts of the Loans  made by Lender  to Borrower
      pursuant  to  the Loan  Agreement, and  all  accrued interest  and unpaid
      interest thereon, shall be  deemed outstanding under this Note  and shall
      continue to be  owing by Borrower  in accordance with  the terms of  this
      Note and the Loan Agreement.

      Payment  Schedule. Monthly  payments  of  interest  in arrears  with  the
      principal  becoming due  and  owing pursuant  to the  terms  of the  Loan
      Agreement.  All  payments received  shall  be  applied first  to  accrued
      interest  and other non-principal amounts  then owing under  this Note or
      the Loan Agreement  and then  to the principal  balance outstanding.  The
      acceptance  of any  payment which  is less  than payment  in full  of all
      amounts  due and  owing  at  such time  shall  not  constitute waiver  of
      Lender's or the holder's right to  receive payment in full of all amounts
      due and owing at such time or any prior or subsequent time.

      Interest. Interest  shall be calculated pursuant to the terms of the Loan
      Agreement.  All interest  payable hereunder  shall be  calculated on  the
      basis  of the actual  number of days  elapsed in a year  of three hundred
      sixty (360) days.<PAGE>

      Time. Time  is of  the essence  hereof. If  any payment  or portion of  a
      payment or other sum due hereunder  is not paid within fourteen (14) days
      of when  due, there shall be immediately due and payable from Borrower to
      Lender a late fee equal to five percent (5%) of the scheduled payment.

      Prepayment. Borrower may prepay this Note in full on any payment due date
      by paying  the then unpaid  principal balance  of this Note,  all accrued
      interest and all other amounts payable hereunder.

      Savings.  If at  any time  implementation of  any provision  hereof shall
      raise or be  deemed to raise the interest rate  per annum contracted for,
      charged  in or  collectible  under this  Note  above the  lawful  maximum
      interest rate per  annum in effect  from time to  time in the  applicable
      jurisdiction, then such interest rate per annum shall  be limited to such
      lawful maximum interest rate; provided,  however, that if the  applicable
      state law  is amended or the law of the United States of America preempts
      the applicable  state law, so  that it becomes  lawful for the  Lender to
      receive  a greater  interest rate  per annum  than is  presently allowed,
      Borrower  agrees that,  on  the  effective  date  of  such  amendment  or
      preemption, as  the case may  be, the lawful  maximum hereunder  shall be
      increased to the maximum interest rate per annum allowed by the higher of
      the amended state law or the law of the United States of America. If from
      any circumstance, Lender or  any holder shall ever receive as interest or
      otherwise an amount which will exceed the applicable lawful maximum rate,
      such amount which would be excessive shall be deemed a  mistake and shall
      be either refunded  or applied to  the reduction of  any principal  owing
      under this Note, as Lender or the holder may elect.

      Default. The  following actions and/or  failures to act  shall constitute
      events of default under this Note:

           Default Under This Note. Should  Borrower default in the  payment of
      any  sum  when  due  under this  Note  and  such  default shall  continue
      unremedied for fourteen (14) days thereafter.

           Other Defaults  in Favor  of Lender.  Should Borrower default  under
      any other promissory note, loan, extension of credit, security agreement,
      or obligation in favor of Lender.

           False Statements. Should any representation or  warranty of Borrower
      or any guarantor made in connection with  obtaining the loan evidenced by
      this Note  or  any security  agreement  directly or  indirectly  securing
      repayment  of  this  Note prove  to  be incorrect  or  misleading  in any
      material respect.

           Default Under Loan  and Security Agreement. Should  Borrower default
      under  that certain  Working  Capital Loan  and Security  Agreement dated
      February 26, 1997  entered into  between Borrower and  Lender (the  "Loan
      Agreement"),  or  should  Borrower   default  under  any  other  security
      agreement directly or indirectly securing repayment of this Note.<PAGE>

           Default  in Favor  of Third  Parties. Should  Borrower default under
      any  material  promissory  note,  loan,  extension  of  credit,  security
      agreement,  purchase or sales agreement, or any other agreement, in favor
      of any other creditor or person.

           Insolvency, Bankruptcy. Should  Borrower become unable, or  admit in
      writing its inability,  to pay its  debts as they  mature, or become  the
      subject of proceedings  in bankruptcy  or insolvency, or  make a  general
      assignment for the  benefit of  creditors, or enter  into an  arrangement
      with  a group of creditors, or enter into  any action for the purposes of
      accomplishing any of the preceding.

           Cease to do Business. Should  Borrower or any affiliate  of Borrower
      wind up,  liquidate, cease to  do business, dissolve,  reorganize, merge,
      consolidate  or sell, assign, transfer, lease or otherwise dispose of all
      or  substantially  all  of its  assets,  or  become  the subject  of  any
      proceeding for any of the foregoing purposes.

      Lender's Rights Upon  Default. Should any one  or more events of  default
      occur or exist under this Note,  as provided above, Lender shall have all
      rights  and remedies  reserved to  Lender under  the Loan  Agreement, and
      shall  further have  the right,  at its  sole  option, to  accelerate the
      maturity  and insist  upon  immediate  payment  in  full  of  the  unpaid
      principal balance and  all accrued  interest and all  other amounts  then
      outstanding  under this  Note (including  additional interest  accrued on
      past  due payments  and any  prepayment premium,  as provided  herein and
      under the Loan Agreement), together with Lender's attorney's fees, costs,
      expenses and other  fees and  charges, as provided  herein. Lender  shall
      have  the further  right, again  at its  sole option,  to accelerate  the
      maturity and to insist upon  immediate payment in full of each  and every
      other loan,  extension of  credit, debt,  liability and/or obligation  of
      every  nature and  kind that  Borrower  may then  owe to  Lender, whether
      direct  or indirect  or by  way of  assignment,  and whether  absolute or
      contingent,  liquidated  or   unliquidated,  voluntary  or   involuntary,
      determined  or undetermined,  secured or  unsecured, whether  Borrower is
      obligated alone  or with others on a joint, several or solidary basis, as
      a principal obligor or  otherwise, all without further notice,  demand or
      putting in default, unless Lender shall otherwise elect.

      Attorney's   Fees.  If  Lender  refers  this  Note  to  an  attorney  for
      collection, or files  suit against Borrower to  collect this Note, or  if
      Borrower  files for bankruptcy  or other relief  from creditors, Borrower
      agrees  to pay Lender's reasonable  attorney's fees and  all other costs,
      expenses and fees  incurred by Lender in any such  action. All such fees,
      costs  and expenses shall become a part  of the indebtedness evidenced by
      this  Note, and  shall bear interest  at the  rate of  interest in effect
      under this Note from time to time.<PAGE>

      Right  of  Offset. As  collateral security  for  the prompt  and punctual
      payment  and  satisfaction  of  this  Note,  Borrower  grants   Lender  a
      continuing security interest in the form of a pledge of any and all funds
      that  Borrower  may have  at  any  time on  deposit  with  Lender or  any
      affiliated companies of  Lender and  hereby consents and  agrees, in  the
      event  of   default  hereunder,   to  Lender's  offsetting   against  the
      obligations of Borrower  hereunder any sums owing from time  to time from
      Lender or  any subsidiary or  affiliate of Lender  (including Caterpillar
      Inc.) to Borrower.

      Waivers.  Borrower, and  each  guarantor, surety,  endorser or  any other
      party who may at any  time become liable for payment of  the indebtedness
      evidenced  by  this   Note  (each,  an  "Other  Obligor"),  hereby  waive
      presentment for payment, demand for  payment, protest, notice of protest,
      notice of  nonpayment,  notice of  dishonor, notice  of acceleration  and
      notice  of intent  to  accelerate hereunder,  and  all other  notices  in
      connection with this Note, filing of suit and diligence in collecting any
      sums due under this Note or enforcing any of the security for  this Note,
      and  severally  agree that  their obligations  and liabilities  to Lender
      hereunder shall  be  on  a  "joint and  several"  basis.  To  the  extent
      permitted  by  law, Borrower  and each  Other  Obligor hereby  waives all
      rights to plead any statute of limitations  as a defense to any action on
      this Note. BORROWER AND  EACH OTHER OBLIGOR FURTHER  WAIVES THE RIGHT  TO
      TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
      ARISING  OUT  OF  OR  RELATED TO  THIS  NOTE,  AND  ACKNOWLEDGE  THAT THE
      FOREGOING  WAIVER  IS A  MATERIAL INDUCEMENT  TO  LENDER MAKING  THE LOAN
      EVIDENCED  HEREBY AND THAT LENDER  IS RELYING UPON  THE FOREGOING WAIVER.
      BORROWER  AND EACH  OTHER  OBLIGOR WARRANTS  THAT  IT HAS  KNOWINGLY  AND
      VOLUNTARILY WAIVED ITS  JURY TRIAL  RIGHTS. IN THE  EVENT OF  LITIGATION,
      THIS NOTE  MAY BE FILED  AS A WRITTEN  CONSENT TO A  TRIAL BY  THE COURT.
      Borrower and each Other Obligor further severally agree that discharge or
      release of  any  party  who  is  or may  be  liable  to  Lender  for  the
      indebtedness  represented hereby, or  the release or  substitution of any
      collateral directly  or indirectly  securing repayment hereof,  shall not
      have the effect of releasing any other party or parties, who shall remain
      liable to  Lender,  or of  releasing  any other  collateral that  is  not
      expressly   released  by   Lender.  Borrower   and  each   Other  Obligor
      additionally  agree that  Lender's  acceptance of  payment other  than in
      accordance  with the terms of this Note, or Lender's subsequent agreement
      to any extension of time, renewal, waiver or modification of this Note or
      any  of  its provisions  (without limitation  as to  number or  term), or
      Lender's failure or delay in exercising any rights or remedies granted to
      Lender, shall likewise  not have the effect of  releasing Borrower or any
      other party or parties from their respective obligations to Lender, or of
      releasing any  collateral that  directly or indirectly  secures repayment
      hereof. In  addition, any  failure  or delay  on the  part  of Lender  to
      exercise any of the rights and  remedies granted to Lender shall not have
      the effect of  waiving any of  Lender's rights and remedies.  Any partial
      exercise   of  any  rights  and/or   remedies  granted  to  Lender  shall
      furthermore  not  be  construed  as  a waiver  of  any  other  rights and
      remedies, it being Borrower's intent  and agreement that Lender's  rights
      and remedies<PAGE>

      shall  be cumulative in nature.  Borrower and each  Other Obligor further
      agree that, should  any event of default occur or  exist under this Note,
      any waiver  or forbearance on the part of Lender to pursue the rights and
      remedies  available to  Lender shall be  binding upon  Under only  to the
      extent  that Lender specifically agrees to any such waiver or forbearance
      in writing. A waiver or forbearance on the part of Lender as to one event
      of default shall not be  construed as a waiver  of forbearance as to  any
      other event of default.

      Successors  and  Assigns  Liable.  Borrower's and  each  Other  Obligor's
      obligations  and  agreements  under  this  Note  shall  be  binding  upon
      Borrower's   and  each  Other  Obligor's  respective  successors,  heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this  Note shall inure to the benefit of
      Lender's successors  and assigns, as well as  to any subsequent holder or
      holders of this Note.

      Caption Headings, Plural  and Singular. Caption headings  of the sections
      of this Note are for convenience purposes only and are not  to be used to
      interpret  or  to define  their provisions.  In  this Note,  whenever the
      context so requires, the singular includes the plural and the plural also
      includes the singular.

      Severability, Integration.  If any provision of  this Note is held  to be
      invalid, illegal or unenforceable  by any court, that provision  shall be
      deleted from this Note and the  balance of this Note shall be interpreted
      as  if the  deleted provision  never existed.  This Note  constitutes the
      entire agreement of Borrower with respect  to the repayment to Lender  of
      the  indebtedness  evidenced hereby  and may  not  be altered  or amended
      except by a writing signed by Lender.

      Applicable  Law.  This  Note  shall  be  governed  by  and  construed  in
      accordance  with the  internal laws  of the  State of  Tennessee, without
      regard to the conflicts of laws principles thereof.

      Borrower  has read and  fully understands all  of the  provisions of this
      Note.

      Signature:   /s/ John V. Simon, Jr.
           ----------------------
      Name (print): John V. Simon, Jr.
          ----------------------
      Title:   President
          ----------------------


      Signature:   /s/ Hubert Freund
           ----------------------
      Name (print): Hubert Freund
          ----------------------
      Title:   Regional Sales Manager
          ----------------------<PAGE>

                            Term Loan Promissory Note Form

                                   PROMISSORY NOTE

      Borrower: Kimmins Contracting Corp.
         1501 Second Avenue, East
         Tampa, Florida 33605

      Lender:  Caterpillar Financial Services
         Corporation
         3322 West End Avenue
         Nashville, Tennessee 37203-1071

      Principal Amount: $13,041,370.93                   Date of Note: 02/26/97


      Promise to Pay. For Value Received, Borrower promises to pay to the order
      of Lender,  in immediately available funds  at the address of  Lender set
      forth  above or at such other place  as Lender or the holder hereof shall
      designate in writing, the principal amount of Thirteen  Million Forty-One
      Thousand  Three Hundred  Seventy and  93/100ths  Dollars ($13,041,370.93)
      with  interest on the outstanding  principal from and  including the date
      hereof at the  per annum rate  equal to that  set forth below, until  the
      indebtedness evidenced by this Note has been paid in full.

      Payment Schedule.  Monthly payments of principal and interest in arrears,
      each  in an  amount equal  to the  sum of  (a) an  amount of  Two Hundred
      Twenty-Seven  Thousand Nine  Hundred  Ninety-Two  and  52/100ths  Dollars
      ($227,992.52) shall be made commencing on the 1st day of April, 1997, and
      continuing on the lst day of each  month thereafter through and including
      the lst day of March, 2003, for a total of Seventy-Two (72) payments. All
      payments  received shall be applied  first to accrued  interest and other
      non-principal  amounts then owing under  this Note or  the Loan Agreement
      (defined  below) and  then  to  the  principal balance  outstanding.  The
      acceptance  of any  payment which  is less  than payment  in full  of all
      amounts due  and  owing at  such  time  shall not  constitute  waiver  of
      Lender's or the holder's right to receive payment in full  of all amounts
      due and owing at such time or any prior or subsequent time.

      Interest. Interest shall be calculated at  the fixed per annum rate equal
      to Seven  and 88/100ths percent  (7.88%). All interest  payable hereunder
      shall be  calculated on the basis of the actual number of days elapsed in
      a year of three hundred sixty (360) days.

      Time.  Time is  of the  essence hereof.  If any  payment or portion  of a
      payment or other sum due hereunder is not paid within four-teen (14) days
      of when due, there shall be  immediately due and payable from Borrower to
      Lender a late fee equal to five percent (5%) of the scheduled payment.<PAGE>

      Prepayment. Borrower may prepay this Note in full on any payment due date
      by giving  Lender at least  thirty (30)  days advance written  notice and
      paying  the then  unpaid  principal balance  of  this Note,  all  accrued
      interest and all other amounts payable hereunder.

      Savings.  If at  any time  implementation of  any provision  hereof shall
      raise  or be deemed to raise the  interest rate per annum contracted for,
      charged  in or  collectible  under this  Note  above the  lawful  maximum
      interest  rate per annum  in effect from  time to time  in the applicable
      jurisdiction, then such interest rate per annum shall be limited to  such
      lawful  maximum interest rate; provided, however,  that if the applicable
      state law is amended or the law of  the United States of America preempts
      the applicable state  law, so that  it becomes lawful  for the Lender  to
      receive  a greater  interest rate  per annum  than is  presently allowed,
      Borrower  agrees that,  on  the  effective  date  of  such  amendment  or
      preemption, as  the case may  be, the lawful  maximum hereunder shall  be
      increased to the maximum interest rate per annum allowed by the higher of
      the amended state law or the law of the United States of America. If from
      any circumstance, Lender or any holder shall  ever receive as interest or
      otherwise an amount which will exceed the applicable lawful maximum rate,
      such amount  which would be excessive shall be deemed a mistake and shall
      be  either refunded  or applied to  the reduction of  any principal owing
      under this Note, as Lender or the holder may elect.

      Default. The following  actions and/or failures  to act shall  constitute
      events of default under this Note:

           Default Under This Note. Should  Borrower default in the  payment of
      any  sum  when due  under  this  Note  and  such default  shall  continue
      unremedied for fourteen (14) days thereafter.

           Other Defaults  in Favor  of Lender.  Should Borrower default  under
      any other promissory note, loan, extension of credit, security agreement,
      or obligation in favor of Lender.

           False Statements. Should any representation  or warranty of Borrower
      or any guarantor made in connection with obtaining the loan  evidenced by
      this  Note or  any  security agreement  directly  or indirectly  securing
      repayment  of  this Note  prove  to  be incorrect  or  misleading in  any
      material respect.

           Default Under Loan  and Security Agreement. Should  Borrower default
      under  that certain Term Loan  and Security Agreement  dated February 24,
      1997, entered into between Borrower and Lender (the "Loan Agreement"), or
      should Borrower  default under any  other security agreement  directly or
      indirectly securing repayment of this Note.

           Insecurity.  Should Borrower  have a  material  adverse change  with
      respect to its financial condition which results, in Lender's opinion, in
      an impairment of the prospect of repayment of this Note.<PAGE>

           Default  in Favor  of Third  Parties. Should  Borrower default under
      any  material  promissory  note,  loan,  extension  of  credit,  security
      agreement,  purchase or sales agreement, or any other agreement, in favor
      of any other creditor or person.

           Insolvency, Bankruptcy. Should  Borrower become unable, or  admit in
      writing its inability,  to pay its  debts as they  mature, or become  the
      subject of proceedings  in bankruptcy  or insolvency, or  make a  general
      assignment for the  benefit of  creditors, or enter  into an  arrangement
      with  a group of creditors, or enter into  any action for the purposes of
      accomplishing any of the preceding.

           Cease to do Business. Should  Borrower or any affiliate  of Borrower
      wind up,  liquidate, cease to  do business, dissolve,  reorganize, merge,
      consolidate  or sell, assign, transfer, lease or otherwise dispose of all
      or  substantially  all  of its  assets,  or  become  the subject  of  any
      proceeding for any of the foregoing purposes.

      Lender's Rights Upon  Default. Should any one  or more events of  default
      occur or exist under this Note,  as provided above, Lender shall have all
      rights  and remedies  reserved  to Lender  under  the Loan  and  Security
      Agreement,  and shall  further have  the right,  at  its sole  option, to
      accelerate the maturity and  insist upon immediate payment in full of the
      unpaid principal balance and  all accrued interest and all  other amounts
      then outstanding  under this Note (including  additional interest accrued
      on past  due payments and any prepayment  premium, as provided herein and
      under the Loan and Security Agreement), together with Lender's attorney's
      fees, costs, expenses  and other  fees and charges,  as provided  herein.
      Lender  shall have  the  further  right, again  at  its  sole option,  to
      accelerate the maturity and  to insist upon immediate payment in  full of
      each  and every other loan,  extension of credit,  debt, liability and/or
      obligation of every nature and kind that Borrower may then owe to Lender,
      whether direct  or indirect or by way of assignment, and whether absolute
      or  contingent,  liquidated or  unliquidated,  voluntary  or involuntary,
      determined  or undetermined,  secured or  unsecured, whether  Borrower is
      obligated alone  or with others on a joint, several or solidary basis, as
      a principal obligor or  otherwise, all without further notice,  demand or
      putting in default, unless Lender shall otherwise elect.

      Attorney's   Fees.  If  Lender  refers  this  Note  to  an  attorney  for
      collection, or files  suit against Borrower to  collect this Note, or  if
      Borrower  files for bankruptcy  or other relief  from creditors, Borrower
      agrees  to pay Lender's reasonable  attorney's fees and  all other costs,
      expenses and fees  incurred by Lender in any such  action. All such fees,
      costs  and expenses shall become a part  of the indebtedness evidenced by
      this  Note, and  shall bear interest  at the  rate of  interest in effect
      under this Note from time to time.<PAGE>

      Right  of  Offset. As  collateral security  for  the prompt  and punctual
      payment  and  satisfaction  of  this  Note,  Borrower  grants   Lender  a
      continuing security interest in the form of a pledge of any and all funds
      that  Borrower  may have  at  any  time on  deposit  with  Lender or  any
      affiliated companies of  Lender and  hereby consents and  agrees, in  the
      event  of   default  hereunder,   to  Lender's  offsetting   against  the
      obligations of Borrower  hereunder any slim owing from time  to time from
      Lender or  any subsidiary or  affiliate of Lender  (including Caterpillar
      Inc.) to Borrower.

      Waivers.  Borrower, and  each  guarantor, surety,  endorser or  any other
      party who may at any  time become liable for payment of  the indebtedness
      evidenced  by  this   Note  (each,  an  "Other  Obligor"),  hereby  waive
      presentment for payment, demand for  payment, protest, notice of protest,
      notice of  nonpayment,  notice of  dishonor, notice  of acceleration  and
      notice  of intent  to  accelerate hereunder,  and  all other  notices  in
      connection with this Note, filing of suit and diligence in collecting any
      sums due under this Note or enforcing any of the security for  this Note,
      and  severally  agree that  their obligations  and liabilities  to Lender
      hereunder shall  be  on  a  "joint and  several"  basis.  To  the  extent
      permitted  by  law, Borrower  and each  Other  Obligor hereby  waives all
      rights to plead any statute of limitations  as a defense to any action on
      this Note. BORROWER AND  EACH OTHER OBLIGOR FURTHER  WAIVES THE RIGHT  TO
      TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
      ARISING  OUT  OF  OR  RELATED TO  THIS  NOTE,  AND  ACKNOWLEDGE  THAT THE
      FOREGOING  WAIVER  IS A  MATERIAL INDUCEMENT  TO  LENDER MAKING  THE LOAN
      EVIDENCED  HEREBY AND THAT LENDER  IS RELYING UPON  THE FOREGOING WAIVER.
      BORROWER  AND EACH  OTHER  OBLIGOR WARRANTS  THAT  IT HAS  KNOWINGLY  AND
      VOLUNTARILY WAIVED ITS  JURY TRIAL  RIGHTS. IN THE  EVENT OF  LITIGATION,
      THIS NOTE  MAY BE FILED  AS A WRITTEN  CONSENT TO A  TRIAL BY  THE COURT.
      Borrower and each Other Obligor further severally agree that discharge or
      release of  any  party  who  is  or may  be  liable  to  Lender  for  the
      indebtedness  represented hereby, or  the release or  substitution of any
      collateral directly  or indirectly  securing repayment hereof,  shall not
      have the effect of releasing any other party or parties, who shall remain
      liable to  Lender,  or of  releasing  any other  collateral that  is  not
      expressly   released  by   Lender.  Borrower   and  each   Other  Obligor
      additionally  agree that  Lender's  acceptance of  payment other  than in
      accordance  with the terms of this Note, or Lender's subsequent agreement
      to any extension of time, renewal, waiver or modification of this Note or
      any  of  its provisions  (without limitation  as to  number or  term), or
      Lender's failure or delay in exercising any rights or remedies granted to
      Lender, shall likewise  not have the effect of  releasing Borrower or any
      other party or parties from their respective obligations to Lender, or of
      releasing any  collateral that  directly or indirectly  secures repayment
      hereof. In  addition, any  failure  or delay  on the  part  of Lender  to
      exercise any of the rights and  remedies granted to Lender shall not have
      the effect of  waiving any of  Under's rights and  remedies. Any  partial
      exercise   of  any  rights  and/or   remedies  granted  to  Lender  shall
      furthermore  not  be  construed  as  a waiver  of  any  other  rights and
      remedies, it being Borrower's intent  and agreement that Lender's  rights
      and remedies<PAGE>

      shall  be cumulative in nature.  Borrower and each  Other Obligor further
      agree that, should  any event of default occur or  exist under this Note,
      any waiver or forbearance on  the part of Under to pursue the  fights and
      remedies available to  Lender shall be  binding upon Lender  only to  the
      extent  that Lender specifically agrees to any such waiver or forbearance
      in writing. A waiver or forbearance on the part of Lender as to one event
      of default shall not be  construed as a waiver  of forbearance as to  any
      other event of default.

      Successors  and  Assigns  Liable.  Borrower's and  each  Other  Obligor's
      obligations  and  agreements  under  this  Note  shall  be  binding  upon
      Borrower's   and  each  Other  Obligor's  respective  successors,  heirs,
      legatees, devisees, administrators, executors and assigns. The rights and
      remedies granted to Lender under this  Note shall inure to the benefit of
      Lender's successors  and assigns, as well as  to any subsequent holder or
      holders of this Note.

      Caption Headings, Plural  and Singular. Caption headings  of the sections
      of this Note are for convenience purposes only and are not  to be used to
      interpret  or  to define  their provisions.  In  this Note,  whenever the
      context so requires, the singular includes the plural and the plural also
      includes the singular.

      Severability, Integration.  If any provision of  this Note is held  to be
      invalid, illegal or unenforceable  by any court, that provision  shall be
      deleted from this Note and the  balance of this Note shall be interpreted
      as  if the  deleted provision  never existed.  This Note  constitutes the
      entire agreement of Borrower with respect  to the repayment to Lender  of
      the  indebtedness  evidenced hereby  and may  not  be altered  or amended
      except by a writing signed by Lender.

      Applicable  Law.  This  Note  shall  be  governed  by  and  construed  in
      accordance  with the  internal laws  of the  State of  Tennessee, without
      regard to the conflicts of laws principles thereof.

      Borrower  has read and  fully understands all  of the  provisions of this
      Note.

      Signature:     /s/ John V. Simon, Jr.
                     ----------------------
      Name (print):  John V. Simon, Jr.
                     ----------------------
      Title:         President
                     ----------------------


      Signature:     /s/ Hubert Freund
                     ----------------------
      Name (print):  Hubert Freund
                     ----------------------
      Title:         Regional Sales Manager
                     ----------------------<PAGE>

                                                                   EXHIBIT 10.3
                              FIRST AMENDED AND RESTATED
                            LIMITED PARTNERSHIP AGREEMENT
                                          OF
                             SUNSHADOW APARTMENTS, LTD.,
                            A FLORIDA LIMITED PARTNERSHIP

        THIS  FIRST  AMENDED  AND  RESTATED  LIMITED  PARTNERSHIP  AGREEMENT  is
      entered into  and effective as  of the 22nd day  of October 1997,  by and
      between SUNSHADOW,  INC. (the "General Partner"),  a Florida corporation,
      as  the general partner, CUMBERLAND REAL ESTATE HOLDINGS, INC., a Florida
      corporation (the "Withdrawing General  Partner"), FRANCIS M. WILLIAMS, as
      the original limited  partner, and KIMMINS  CORP., a Florida  corporation
      (the "Additional  Limited Partner"),  pursuant to  the provisions  of the
      Florida Revised Uniform Limited Partnership  Act, on the following  terms
      and conditions:

                                       RECITALS

        WHEREAS,  the  Withdrawing General  Partner  and  the  Original  Limited
      Partner formed the Partnership on July 16, 1987, and

        WHEREAS,  the Withdrawing  General Partner  has transferred  all of  its
      interest in  the Partnership  to the  General Partner  who desires  to be
      admitted as a substitute general partner of the Partnership, and

        WHEREAS, the  Additional Limited  Partner desires  to be  admitted as  a
      limited partner in the Partnership in  exchange for a release of  certain
      claims it has against the Partnership, and

        WHEREAS, the parties hereto  desire to amend  the partnership  agreement
      of the Partnership to  reflect the withdrawal of the  Withdrawing General
      Partner, the admission of General Partner as a substitute general partner
      and  the admission  of the  Additional Limited  Partner as  an additional
      limited partner and to  restate the partnership agreement to  reflect the
      agreement of the parties hereto.

        NOW, THEREFORE, in consideration of the  foregoing the parties agree  as
      follows:

                                      SECTION 1

                                   THE PARTNERSHIP

        1.1. Continuation  and  Partnership   Name.  The  parties  continue  the
      Partnership  as a limited partnership  pursuant to the  provisions of the
      Act. This Agreement  supersedes any  and all other  agreements among  the
      parties, whether  oral or written and the  terms and conditions set forth
      in this Agreement shall  govern their relations as Partners.  The name of
      the  Partnership  shall continue  to  be  SUNSHADOW APARTMENTS,  LTD.,  a
      Florida limited partnership, and all business of the Partnership shall be
      conducted in  that name. The General  Partner may change the  name of the
      Partnership on ten (10) days written notice to the  Limited Partners. The
      Partnership shall hold all of its property in the name of the Partnership
      and not in the name of any Partner.<PAGE>

        1.2.  Withdrawal and  Admission  of Certain  Partners.  The  Withdrawing
      General  Partner hereby withdraws as a general partner of the Partnership
      and  the General  Partner is  hereby admitted  as the  substitute general
      partner.  The  Additional  Limited  Partner  is  hereby  admitted  as  an
      additional limited partner.

        1.3. Purpose. The purpose  of the Partnership shall be to acquire,  own,
      develop, construct,  improve, lease, manage, operate,  and otherwise deal
      with the Property, to own or lease such personalty and/or fixtures as may
      be reasonably related to the ownership or operation of the Property,  and
      to  conduct  such  other  business  activities  and  operations   as  are
      consistent  with and reasonably related to the foregoing purposes, and in
      connection therewith, to enter into contracts and leases, to borrow money
      necessary  for  the  Partnership's   business,  to  pledge,  mortgage  or
      otherwise encumber all or any part of the Partnership's assets.

        1.4.  Principal Place of  Business. The  principal place  of business of
      the  Partnership  shall be  determined by  the  General Partner,  and the
      General  Partner  may  change the  principal  place  of  business of  the
      Partnership to any  other place upon ten (10) days  written notice to the
      Limited Partners.

        1.5.  Term.  The term  of  the Partnership  commenced  on  the  date the
      certificate  of limited partnership  described in Section  620.108 of the
      Act (the "Certificate") was filed in the office of the Florida Department
      of State in accordance with the  Act and shall continue until the winding
      up  and  liquidation of  the Partnership  and  its business  is completed
      following a Liquidating Event, as provided in Section 11.

        1.6. Filings; Agent for Service of Process.

         (a)  The General  Partner shall take all  actions reasonably necessary
      to maintain  the status of the Partnership as a limited partnership under
      the laws of Florida.  The General Partner shall  cause amendments to  the
      Certificate to be filed whenever required  by the Act. Any amendments may
      be executed by the General Partner.

         (b) The  agent  for service  of process  on the  Partnership shall  be
      Carlton, Fields, Ward, Emmanuel,  Smith & Cutler, P.A., or  any successor
      as appointed by the General Partner. The address of the registered office
      of the Partnership at which the  registered agent is located shall be One
      Harbour Place, 5th Floor, Tampa, Florida 33602.

         (c) Upon the dissolution of the Partnership, the General Partner  (or,
      in the event there  is no remaining General  Partner, any Person  elected
      pursuant to  Section 11.2) shall promptly  execute and cause to  be filed
      certificates of cancellation in accordance  with the Act and the laws  of
      any  other states  or jurisdictions  in which  the Partnership  has filed
      certificates  and   shall  promptly   notify  the  Limited   Partners  of
      dissolution.<PAGE>

        1.7. Independent  Activities. Each Limited  Partner may, notwithstanding
      this Agreement,  engage in whatever  activities they choose,  whether the
      same  or competitive with the Partnership or otherwise, without having or
      incurring any obligation to offer any interest in such activities  to the
      Partnership  or any  Partner.  Neither this  Agreement  nor any  activity
      undertaken  pursuant  hereto  shall  prevent  any  Limited  Partner  from
      engaging in such activities, or require any Limited Partner to permit the
      Partnership or any Partner to participate in  any such activities, and as
      a material part of the consideration for the execution  of this Agreement
      by each Partner, each Partner hereby  waives, relinquishes, and renounces
      any such right or claim of participation.

        1.8. Definitions. Capitalized words  and phrases used in this  Agreement
      have the following meanings:

         (a)  "Act" means the Florida Revised  Uniform Limited Partnership Act,
      as set forth in Chapter 620 of the Florida Statutes, as amended from time
      to time (or any corresponding provisions of succeeding law).

         (b)  "Additional Limited Partner" means Kimmins Corp.

         (c)  "Adjusted Capital  Account  Deficit" means,  with respect  to any
      Interest Holder, the deficit  balance, if any, in that  Interest Holder's
      Capital Account as of the  end of the relevant Fiscal Year,  after giving
      effect to the following adjustments:

          (i) Credit to such  Capital Account any amounts that  Interest Holder
      is obligated to restore pursuant to any provision of this Agreement or is
      deemed to be obligated  to restore pursuant to the  penultimate sentences
      of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

          (ii) Debit to such Capital Account the items described in Regulations
      Sections  1.704-1(b)(2)(ii)(d)(4),   1.704-1(b)(2)(ii)(d)(5)  and  1.704-
      1(b)(2)(ii)(d)(6).

      The foregoing definition of Adjusted  Capital Account Deficit is intended
      to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d)
      and shall be interpreted consistently therewith.

         (d)  "Affiliate" means,  with respect to any Person, any Person owning
      or controlling 50%  or more of the  outstanding voting interests of  such
      Person.

         (e) " Capital Account"  means, with respect to any General  Partner or
      Interest Holder, the Capital Account  maintained for such General Partner
      or Interest Holder in accordance with the following provisions.

          (i) To each  Person's Capital  Account there shall  be credited  such
      Person's  Capital Contributions,  such  Person's  distributive  share  of
      Profits,  and the amount of  any Partnership liabilities  assumed by such
      Person or which are secured by any Property distributed to such Person.<PAGE>

          (ii)  To each  Person's Capital  Account there  shall be  debited the
      amount of cash  and the Gross Asset Value of  any Property distributed to
      such  Person pursuant to any  provision of this  Agreement, such Person's
      distributive share  of Losses, and the amount  of any liabilities of such
      Person  assumed by the Partnership  or which are  secured by any property
      contributed by such Person to the Partnership.

          (iii) In the event all or a portion of an interest in the Partnership
      is  transferred in  accordance  with the  terms  of this  Agreement,  the
      transferee shall succeed to the Capital Account of the transferor to  the
      extent it relates to the transferred interest.

          (iv) In determining the amount of any liability, there shall be taken
      into account Code Section  752(c) and any other applicable  provisions of
      the Code and Regulations.

         The foregoing  provisions and  the other provisions of  this Agreement
      relating  to the maintenance of  Capital Accounts are  intended to comply
      with Regulations Section 1.7041(b), and shall  be interpreted and applied
      in a  manner consistent with  such Regulations. In the  event the General
      Partner shall  determine that it is prudent to modify the manner in which
      the Capital  Accounts,  or  any debits  or  credits  thereto  (including,
      without limitation, debits  or credits relating to  liabilities which are
      secured  by contributed or distributed  property or which  are assumed by
      the  Partnership Partners),  are computed  in order  to comply  with such
      Regulations,  the General  Partner may  make such  modification, provided
      that  it  is not  likely  to  have  a  material  effect  on  the  amounts
      distributable to any Person  pursuant to Section 11 upon  the dissolution
      of  the  Partnership.  The  General  Partner  also  shall  (i)  make  any
      adjustments  that  are  necessary  or appropriate  to  maintain  equality
      between   the  Capital  Accounts  of  the  Partners  and  the  amount  of
      Partnership  capital reflected  on  the Partnership's  balance sheet,  as
      computed for book purposes, in accordance with Regulations Section 1.704-
      1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the  event
      unanticipated events might otherwise  cause this Agreement not to  comply
      with Regulations Section 1.704-1(b).  As of the date hereof,  the Capital
      Account balances of  the Partners is  as set out  in Schedule A  attached
      hereto.

         (f) "Capital Contributions"  means, with  respect to any Partner,  the
      amount of money and the initial  Gross Asset Value of any property (other
      than money) contributed to  the Partnership with respect to  the interest
      in  the Partnership  held  by  such  Partner,  and in  the  case  of  the
      Additional  Limited  Partner,  the   current  unpaid  balance  (including
      interest) of the obligations of the Partnership to the Additional Limited
      Partner  forgiven by the Additional Limited Partner upon its admission to
      the Partnership.

         (g)  "Code" means the  Internal Revenue Code of 1986, as  amended from
      time to time (or any corresponding provisions of succeeding law).<PAGE>

         (h) "Depreciation"  means, for each  fiscal year or  other period,  an
      amount equal  to the depreciation,  amortization, or other  cost recovery
      deduction allowable  with  respect to  an asset  for such  year or  other
      period, except that if the Gross Asset Value of an asset differs from its
      adjusted basis for federal  income tax purposes at the  beginning of such
      year or  other period,  Depreciation shall be  an amount which  bears the
      same ratio to such beginning Gross Asset Value as the  federal income tax
      depreciation,  amortization, or  other cost  recovery deduction  for such
      year  or other  period  bears  to  such  beginning  adjusted  tax  basis;
      provided,  however,   that  if  the  federal   income  tax  depreciation,
      amortization, or other  cost recovery  deduction for such  year is  zero,
      Depreciation shall be  determined with reference to such  beginning Gross
      Asset Value using any reasonable method selected by the General Partner.

         (i) "Fiscal  Year" means  that period of  time from January  1 to  the
      following December 3 1, except for the first fiscal year, when the fiscal
      year  began on  the date  the  Partnership was  formed and  ended on  the
      following December 31.

         (j) "General Partner" means any  Person who (i) is referred to as such
      in the  first paragraph of this Agreement or has become a General Partner
      pursuant to the terms of this Agreement, and (ii)  has not ceased to be a
      General  Partner  pursuant  to  the terms  of  this  Agreement.  "General
      Partners" means all such Persons.

         (k)  "Gross Asset Value" means, with respect to any asset, the asset's
      adjusted basis for federal income tax purposes, except as follows:

          (i)  The initial  Gross Asset  Value of  any asset  contributed by  a
      Partner to the Partnership shall  be the gross fair market value  of such
      asset, as determined by the contributing Partner and the Partnership;

          (ii)  The Gross  Asset  Values of  all  Partnership assets  shall  be
      adjusted  to  equal  their  respective  gross  fair  market  values,   as
      determined by  the General Partner,  as of  the following times:  (a) the
      acquisition  of an additional  interest in the Partnership  by any new or
      existing  Partner  in  exchange  for  more  than  a  de  minimis  Capital
      Contribution; (b) the  distribution by  the Partnership to  a Partner  of
      more  than  a de  minimis  amount  of Property  as  consideration for  an
      interest in the Partnership;  and (c) the liquidation of  the Partnership
      within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided,
      however, that adjustments pursuant to clauses (a) and (b)  above shall be
      made  only  if  the  General  Partner  reasonably  determines  that  such
      adjustments are necessary or appropriate to reflect the relative economic
      interests of the Partners in the Partnership; 

          (iii) The Gross Asset  Value of any Partnership asset  distributed to
      any Partner  shall be the  gross fair market value  of such asset  on the
      date of distribution; and<PAGE>

          (iv)  The Gross Asset Values of Partnership assets shall be increased
      (or decreased) to  reflect any adjustments to the adjusted  basis of such
      assets pursuant to Code Section  734(b) or Code Section 743(b), but  only
      to the extent that such adjustments are taken into account in determining
      Capital  Accounts pursuant  to  Regulations Section  1.7041(b)(2)(iv)(m);
      provided, however, that Gross Asset Values shall not be adjusted pursuant
      to this Section 1.7(k)(iv)  to the extent the General  Partner determines
      that  an adjustment  pursuant  to  Section  1.7(k)(ii)  is  necessary  or
      appropriate in connection with a  transaction that would otherwise result
      in an adjustment pursuant to this Section 1.7(k)(iv).

      If the  Gross Asset Value  of an  asset has been  determined or  adjusted
      pursuant to Section 1.7(k)(i), Section 1.7(k)(ii), or Section 1.7(k)(iv),
      such Gross Asset Value  shall thereafter be adjusted by  the Depreciation
      taken into  account with respect to such  asset for purposes of computing
      Profits and Losses.

         (l)  "Interest"  means  an   ownership  interest  in  the  Partnership
      representing a Capital  Contribution set  forth in Sections  2.1 or  2.2,
      including any  and all benefits to  which the holder of  such an Interest
      may  be entitled  as  provided  in  this  Agreement,  together  with  all
      obligations  of such  Person to comply  with the terms  and provisions of
      this Agreement.

         (m)  "Interest  Holder"  means  any  Person  who  holds  an  Interest,
      regardless of whether that Person has been admitted to the Partnership as
      a Limited Partner. "Interest Holders" means all such Persons.

         (n) "Limited Partner" means any  Person (i) named as such in the first
      paragraph of this Agreement who has become  a Limited Partner pursuant to
      the terms  of this Agreement,  and (ii) who  holds an  Interest. "Limited
      Partners" means all  such Persons. All references in  this Agreement to a
      majority in interest or a specified percentage of the Limited Partnership
      shall mean Limited Partners whose combined Interests represent more  than
      50%  or such  specified percentage,  respectively, of the  Interests then
      held by all Limited Partners.

         (o)  "Original Limited Partner" means Francis M. Williams.

         (p) "Partners" means  all General  Partners and all Limited  Partners,
      where no distinction is required by the context in which the term is used
      herein.  "Partner" means any one of  the Partners. All references in this
      Agreement to  a majority  in interest or  a specified  percentage of  the
      Partners shall mean Partners who are entitled to receive more than 50% or
      such specified percentage, respectively, of any distributions pursuant to
      Section 4. 1.

         (q)  "Partnership"  means  the  partnership  formed  pursuant  to  the
      Certificate  and   described  in  this  Agreement   and  the  partnership
      continuing the business of  this Partnership in the event  of dissolution
      as herein provided.

         (r)  "Person" means  any individual,  partnership, corporation, trust,
      or other entity.<PAGE>

         (s) "Profits" and "Losses" mean, for each Fiscal Year or other period,
      an amount equal to the Partnership's taxable income or loss for such year
      or  period, determined in accordance  with Code Section  703(a) (for this
      purpose, all items  of income, gain,  loss, or deduction  required to  be
      stated separately pursuant to Code Section 703(a)(1) shall be included in
      taxable income or loss), with the following adjustments:

          (i) Any income of the Partnership that  is exempt from federal income
      tax  and not otherwise taken into  account in computing Profits or Losses
      pursuant to this Section 1.7(s) shall be added to such  taxable income or
      loss;

          (ii) Any expenditures  of the Partnership  described in Code  Section
      705(a)(2)(B)  or   treated  as  Code  Section  705(a)(2)(B)  expenditures
      pursuant  to Regulations Section  1.704-1(b)(2)(iv)(e), and not otherwise
      taken  into account  in  computing Profits  or  Losses pursuant  to  this
      Section 1.7(q) shall be subtracted from such taxable income or loss;

          (iii) In the event the Gross Asset Value of any  Partnership asset is
      adjusted to Section 1.7(k)(ii) or Section 1.7(k)(iii), the amount of such
      adjustment  shall  be  taken  into  account  as  gain  or  loss  from the
      disposition of such asset for purposes of computing Profits or Losses;

          (iv) Gain or  loss resulting  from any disposition  of Property  with
      respect to  which  gain or  loss  is recognized  for federal  income  tax
      purposes shall be  computed by reference to the Gross  Asset Value of the
      property disposed of, notwithstanding that the adjusted tax basis of such
      property differs from its Gross Asset Value; and

          (v) In  lieu  of  the  depreciation,  amortization,  and  other  cost
      recovery  deductions taken into account  in computing such taxable income
      or loss, there  shall be taken into account  Depreciation for such Fiscal
      Year or other period, computed in accordance with Section 1.7(h).

         (t) "Property" means the real property acquired by the Partnership and
      described in Schedule B hereto and any improvements and personal property
      acquired  by  the Partnership  relating thereto,  and shall  include both
      tangible and intangible property.

         (u) "Regulations"  means the Income Tax  Regulations promulgated under
      the Code, as such regulations may be amended from time to time (including
      corresponding provisions of succeeding regulations).

         (v)  "Transfer"  means,  as  a  noun,  any  voluntary  or  involuntary
      transfer, sale,  pledge, hypothecation,  or other  disposition and,  as a
      verb,   voluntarily  or   involuntarily   to   transfer,  sell,   pledge,
      hypothecate, or otherwise dispose of.

         (w)   "Withdrawing  General  Partner"  means  Cumberland  Real  Estate
      Holdings, Inc.<PAGE>

                                      SECTION 2

                      IDENTITY OF PARTNERS CAPITAL CONTRIBUTIONS

        2.1. General Partner.  The name and address  of the  General Partner are
      as follows:

         Sunshadow, Inc.
         4311 W. Waters Avenue
         Suite 600
         Tampa, Florida 33614

        2.2. Limited Partners. The name and address  of the Limited Partners are
      as follows:

         Francis M. Williams
         1501 Second Avenue
         Tampa, Fl, 33605

         Kimmins Corp.
         1501 Second Avenue
         Tampa, FL 33605

        2.3. Capital Contributions.

         (a) Except as  otherwise provided in this Agreement, no  Partner shall
      demand  or receive a return of its Capital Contributions or withdraw from
      the Partnership without the consent of  all Partners. Under circumstances
      requiring  a return of any  Capital Contributions, no  Partner shall have
      the  right  to  receive  property  other  than  cash  except  as  may  be
      specifically provided herein.

         (b) Except as  otherwise provided in this Agreement, no  Partner shall
      receive  any interest,  salary, or  drawing with  respect to  its Capital
      Contributions or its Capital  Account or for services rendered  on behalf
      of the Partnership or otherwise in its capacity as a Partner.

         (c)  Except  as  otherwise  provided  by  this Agreement,  no  Limited
      Partner shall be  liable for  the debts, liabilities,  contracts, or  any
      other obligations  of the  Partnership. Except  as otherwise provided  by
      this Agreement,  any other agreements  among the Partners,  or applicable
      state  law, a Limited  Partner shall be  liable only to  make its Capital
      Contributions  and  shall not  be  required  to  lend any  funds  to  the
      Partnership or, after its  Capital Contributions have been paid,  to make
      any additional contributions to the Partnership. No General Partner shall
      have  any  personal   liability  for   the  repayment   of  any   Capital
      Contributions of any Limited Partner.

                                      SECTION 3

                                     ALLOCATIONS

        3.1. Profits.  After giving effect to  the special  allocation set forth
      in  Section 3.3, profits  for any Fiscal  Year shall be  allocated in the
      same proportion  as net  cash  flow is  distributed  to the  Partners  in
      accordance with Section 4. 1.<PAGE>


        3.2. Losses. After giving effect to the special allocation  set forth in
      Section 3.3, losses  for any Fiscal Year shall be  allocated as set forth
      in  Section 3.2(a)  below, subject  to the  limitation in  Section 3.2(b)
      below:

         (a) Losses  for  any  Fiscal  Year  shall be  allocated  in  the  same
      proportion as net cash flow is  distributed to the Partners in accordance
      with Section 4. 1.

         (b) The Losses  allocated pursuant to Section 3.2(a) shall  not exceed
      the maximum amount of Losses that can be so allocated without causing any
      Interest Holder to have an Adjusted Capital Account Deficit at the end of
      any Fiscal Year. In  the event some but not  all of the Interest  Holders
      would  have  Adjusted Capital  Account Deficits  as  a consequence  of an
      allocation of Losses pursuant to Section 3.2(a), the limitation set forth
      in this Section 3.2(b) shall be applied on an Interest Holder by Interest
      Holder basis  so as  to allocate the  maximum permissible Losses  to each
      Interest  Holder  under  Regulations  Section  1.704-1(b)(2)(ii)(d).  All
      Losses in excess  of the  limitations set  forth in  this Section  3.2(b)
      shall be allocated to the General Partner.

        3.3.  Section  754 Adjustments.  To  the  extent  an  adjustment to  the
      adjusted  tax basis  of any  Partnership asset  pursuant to  Code Section
      734(b)  or  Code  Section  743(b) is  required,  pursuant  to Regulations
      Section  1.704-1(b)(2)(iv)(m), to  be taken  into account  in determining
      Capital Accounts, the amount  of such adjustment to the  Capital Accounts
      shall be  treated as an  item of  gain (if the  adjustment increases  the
      basis of the asset) or loss (if the adjustment decreases  such basis) and
      such gain or loss shall be specially allocated to the Persons in a manner
      consistent with the manner  in which their Capital Accounts  are required
      to be adjusted pursuant to such Section of the Regulations.

        3.4.  Tax  Allocations:  Code Section  704(c). In  accordance  with Code
      Section  704(c) and  the Regulations thereunder,  income gain,  loss, and
      deduction with respect to any property  contributed to the capital of the
      Partnership  shall,  solely for  tax  purposes,  be allocated  among  the
      Partners  so as  to take account  of any  variation between  the adjusted
      basis of such property to the Partnership for federal income tax purposes
      and  its initial Gross Asset  Value (computed in  accordance with Section
      1.7(k)(i)).

        In the event the Gross Asset Value of  any Partnership asset is adjusted
      pursuant to  Section 1.70)(ii),  subsequent allocations of  income, gain,
      loss, and deduction with respect to  such asset shall take account of any
      variation between the adjusted basis of such asset for federal income tax
      purposes  and its  Gross Asset  Value in  the same  manner as  under Code
      Section 704(c) and the Regulations thereunder.

        Any elections or other decisions relating  to such allocations shall  be
      made by the  General Partner in any  manner that reasonably  reflects the
      purpose and intention of this Agreement.<PAGE>

                                      SECTION 4

                                    DISTRIBUTIONS<PAGE>


        4.1. Net  Cash Flow. Except  as otherwise  provided in  Section 4.2  and
      Section  11, all  net cash  flow, if  any, as  determined by  the General
      Partner, shall be distributed, at  such times as the General Partner  may
      determine, as follows:

         (a) 1% to the General Partner, 50% to the Original Limited Partner and
      49% to the Additional  Limited Partner until the Capital  Account balance
      of  the Additional  Limited  Partner  has  been  reduced  to  zero,  then
      thereafter

         (b)  1%  to the General  Partner, 49% to the  Original Limited Partner
      and 50% to the Additional Limited Partner.

        4.2.  Net Cash  Flow  from  Capital Transactions.  Except  as  otherwise
      provided  in  Section 11,  all net  cash flow  arising  from the  sale or
      refinancing of  any Partnership  assets  outside the  ordinary course  of
      business shall be distributed as follows:

         (a)  100%  to  the Additional  Limited  Partner  until  the Additional
      Limited  Partner has received distributions pursuant  to this Section 4.2
      equal to its Capital Contributions, then thereafter

         (b)  100% to the  Original Limited Partner until  the Original Limited
      Partner  has received distributions pursuant to this Section 4.2 equal to
      his Capital Contributions, then thereafter

         (c)  1%  to the General  Partner, 49% to the  Original Limited Partner
      and 50% to the Additional Limited Partner.

        4.3.  Amounts Withheld. All amounts withheld pursuant to the Code or any
      provision of  any state or local tax law, with  respect to any payment or
      distribution  by the  Partnership to  the Partners,  shall be  treated as
      amounts  distributed to  the Partner pursuant  to this Section  4 for all
      purposes  under this Agreement. The General Partner may allocate any such
      amounts among the  General Partners  and Limited Partners  in any  manner
      that is in accordance with applicable law.<PAGE>

                                      SECTION 5

                                      MANAGEMENT

        5.1. Authority  of the General Partner.  Except to  the extent otherwise
      provided  herein, the General Partner  shall have the  sole and exclusive
      right to manage the business of the Partnership and shall have all of the
      rights and powers  which may be possessed  by general partners under  the
      Act including,  without limitation, the  right and power to  make any and
      all  elections  for federal,  state,  and local  tax  purposes including,
      without  limitation, any election, if permitted by applicable law: (i) to
      adjust  the basis of the Property pursuant  to Code Sections 754, 734(b),
      and 743(b), or comparable provisions of state or local law, in connection
      with transfers  of Partnership  interests and Partnership  distributions;
      (ii)  to  extend  the  statute  of  limitations  for  assessment  of  tax
      deficiencies  against  Partners  with   respect  to  adjustments  to  the
      Partnership's  federal,  state,  or  local  tax  returns;  and  (iii)  to
      represent the Partnership, the General  Partner, and the Limited Partners
      before  taxing  authorities or  courts of  competent jurisdiction  in tax
      matters  affecting the Partnership, the General  Partner, and the Limited
      Partners in their capacities  as such, and  to execute any agreements  or
      other  documents relating  to or  affecting such  tax  matters, including
      agreements or other documents that bind the Partners with respect to such
      tax  matters or otherwise affect  the rights of  the Partnership, General
      Partner,  and  Limited  Partners.  The General  Partner  is  specifically
      authorized to act as the "Tax Matters Partner" under the Code and in  any
      similar capacity under state or local law.

        5.2.  Right to  Rely on  General Partner.  Any Person  dealing with  the
      Partnership may rely (without duty of further inquiry) upon a certificate
      signed by any General Partner as to:

         (a) The identity of any General Partner or Limited Partners;

         (b) The existence or nonexistence of any fact or facts that constitute
      a condition  precedent to acts by a  General Partner or which  are in any
      other manner germane to the affairs of the Partnership;

         (c)  The  Persons  who are  authorized  to  execute  and  deliver  any
      instrument or document of the Partnership; or

         (d) Any act or  failure to act by the Partnership on  any other matter
      whatsoever involving the Partnership or any Partner.

        5.3. Restrictions on Authority of General Partner.

         Without the consent of all  of the Partners, no General  Partner shall
      have the authority to:

         (a)  Do any act in contravention of this Agreement;

         (b)  Do any  act  which would  make  it  impossible to  carry  on  the
      ordinary  business of  the Partnership,  except as otherwise  provided in
      this Agreement;

         (c)  Confess a judgment against the Partnership;<PAGE>

         (d)  Possess the Property,  or assign rights in specific parts  of the
      Property, for other than a Partnership purpose;

         (e)  Knowingly perform  any act that would subject any Limited Partner
      to liability as a general partner in any jurisdiction;

         (f)  File a bankruptcy or insolvency.  petition or otherwise institute
      insolvency proceedings;

         (g)  Dissolve,  liquidate,   consolidate,  merge,  or   sell  all   or
      substantially all of the assets of the Partnership;

         (h)  Cause the Partnership  to engage  in any other business  activity
      inconsistent  with the purpose of the Partnership provided in Section 1.3
      hereof; or

         (i)  Amend this Agreement.

        5.4. Duties and Obligations of General Partner.

         (a) The General Partner shall take all actions which may  be necessary
      or appropriate  (i)  for  the continuation  of  the  Partnership's  valid
      existence as a limited partnership under the laws of the State of Florida
      (and of each  other jurisdiction in which such existence  is necessary to
      protect  the limited liability  of the Limited Partners  or to enable the
      Partnership to conduct the business in  which it is engaged) and (ii) for
      the  accomplishment  of   the  Partnership's   purposes,  including   the
      acquisition, development, maintenance, preservation, and operation of the
      Property  in  accordance  with  the  provisions  of  this  Agreement  and
      applicable laws and regulations.

         (b) The  General Partner shall devote to the  Partnership such time as
      may be  necessary for the proper performance of all duties hereunder, but
      the  General Partner  shall not be  required to  devote full  time to the
      performance of such duties.

         (c) The General Partner shall be under a fiduciary duty to conduct the
      affairs of the Partnership  in the best interests of  the Partnership and
      of the  Limited Partners, including the safekeeping and use of all of the
      Property  and  the  use   thereof  for  the  exclusive  benefit   of  the
      Partnership. Any transaction between the  Partnership and an Affiliate of
      the  General  Partner  shall  be  permitted  only  upon  such  terms  and
      conditions  as would be expected  in an arm's  length transaction between
      unaffiliated parties.

        5.5. Indemnification of General Partner.

        (a) The Partnership, its receiver, or  its trustee shall indemnify, save
      harmless,  and pay all judgments  and claims against  any General Partner
      relating  to  any liability  or  damage  incurred by  reason  of any  act
      performed  or  omitted  to  be  performed  by  such  General  Partner  in
      connection  with the  business of  the Partnership,  including attorneys'
      fees  incurred by such General Partner  in connection with the defense of
      any action based on any  such act or omission, which attorneys'  fees may
      be paid as  incurred, including  all such liabilities  under federal  and
      state  securities laws (including the Securities Act of 1933, as amended)
      as permitted by laws.<PAGE>

        (b) In the event of any action by a Limited Partner  against any General
      Partner, including  a Partnership derivative suit,  the Partnership shall
      indemnify, save harmless, and  pay all expenses of such  General Partner,
      including attorneys' fees,  incurred in  the defense of  such action,  if
      such General Partner is successful in such action..

        (c)  The  Partnership  shall  indemnify,  save  harmless,  and  pay  all
      expenses,  costs, or  liabilities  of any  General  Partner who  for  the
      benefit of the  Partnership makes  any deposit, acquires  any option,  or
      makes any other similar  payment or assumes any obligation  in connection
      with any  property proposed  to be  acquired by the  Partnership and  who
      suffers any financial loss as the result of such action.

        (d)  Notwithstanding the  provisions  of Sections  5.5(a),  5.5(b),  and
      5.5(c)  above, no General Partner shall be indemnified from any liability
      for fraud, bad faith, willful misconduct, or gross negligence.

        (e)  Notwithstanding the  provisions  of Sections  5.5(a),  5.5(b),  and
      5.5(c)  above, the obligation of the Partnership to indemnify the General
      Partner shall be fully subordinated to the secured obligations payable to
      the  Partnership's secured  creditors and  shall  not constitute  a claim
      against the Partnership in the event that  net cash flow in excess of the
      amounts  necessary to pay such secured obligations is insufficient to pay
      such obligations.

        5.6. Compensation and Loans.

        (a)  Compensation and  Reimbursement. Except  as otherwise  provided  in
      this Section 5.6,  no Partner shall receive any salary,  fee, or draw for
      services  rendered  to or  on behalf  of the  Partnership, nor  shall any
      Partner be reimbursed for any expenses incurred by such Partner on behalf
      of the Partnership.

        (b) Expense.  The General  Partner may  charge the  Partnership for  any
      direct expenses reasonably incurred  in connection with the Partnership's
      business.

        (c) Loans.  Any Person  may, with  the consent  of the  General Partner,
      lend or advance money to  the Partnership. If any Partner shall  make any
      loan  or loans  to the Partnership  or advance  money on  its behalf, the
      amount of  any such loan  or advance  shall not be  treated as a  Capital
      Contribution but  shall be a debt due from the Partnership. The amount of
      any such loan or  advance by a lending Partner shall  be repayable out of
      the Partnership's  cash and  shall  bear interest  at  such rate  as  the
      General Partner and the lending Partner shall agree. If a General Partner
      is  the lending Partner, the rate of  interest shall be determined by the
      General Partner taking into consideration, without limitation, prevailing
      interest rates and the interest rates such General Partner is required to
      pay  in the event such General Partner  has itself borrowed funds to loan
      or advance to the Partnership. None of the Partners shall be obligated to
      make any loan or advance to the Partnership.<PAGE>

        5.7. Operating Restrictions.

        (a) All  Property in the  form of cash  not otherwise  invested shall be
      deposited   in  one  or  more   accounts  maintained  in  such  financial
      institutions  as the General Partner shall determine or shall be invested
      in   short-term  liquid  securities  or  shall  be  left  in  escrow  and
      withdrawals  shall  be made  only in  the  regular course  of Partnership
      business  on  such signature  or signatures  as  the General  Partner may
      determine from time to time.

        (b)  The  signature  of  any  General  Partner  shall  be  necessary and
      sufficient to convey title  to any real property owned by the Partnership
      or  to execute  any promissory  notes, trust  deeds, mortgages,  or other
      instruments of hypothecation, and all  of the Partners agree that a  copy
      of  this Agreement may  be shown to  the appropriate parties  in order to
      confirm the  same, and further  agree that the  signature of any  General
      Partner  shall be sufficient to execute any "statement of partnership" or
      other  documents necessary to effectuate  this or any  other provision of
      this Agreement. All of the Partners do hereby appoint the General Partner
      as their  attorney-in-fact  for  the  execution of  any  or  all  of  the
      documents described herein.

                                      SECTION 6

                               ROLE OF LIMITED PARTNERS

        6.1. Rights or Powers. Except as otherwise set  forth in Section 6.2, no
      Limited  Partner  shall have  any  right or  power  to take  part  in the
      management or control  of the Partnership or its business  and affairs or
      to act for or bind the Partnership in any way.

        6.2. Voting Rights.  The Limited Partners shall  have the  right to vote
      on the matters explicitly set forth in this Agreement.

                                      SECTION 7

                                  BOOKS AND RECORDS

        7.1. Books  and Records. The Partnership  shall keep  adequate books and
      records at  its principal  place of  business, setting  forth a  true and
      accurate  account  of all  business transactions  arising  out of  and in
      connection  with the  conduct  of the  Partnership.  Any Partner  or  its
      designated representative  shall have the right, at  any reasonable time,
      to have  access to  and inspect and  copy the  contents of such  books or
      records.  The  Partnership's  books  and records,  deposit  accounts  and
      stationary shall  be separately  maintained and the  Partnership's assets
      shall not be commingled with the assets of any other party.

        7.2. Annual  Reports. Within a reasonable  period after the  end of each
      Partnership Fiscal Year,  each Partner shall be  furnished with pertinent
      information  regarding the  Partnership  and its  activities during  such
      period.

        7.3. Tax  Information. Necessary tax information  shall be delivered  to
      each Partner after the end of each Fiscal Year of  the Partnership. Every
      effort shall be made to furnish such information within 75 days after the
      end of each Fiscal Year.<PAGE>

                                      SECTION 8

                           ADDITIONAL CAPITAL CONTRIBUTIONS

                        This Section left blank intentionally.

                                      SECTION 9

                                TRANSFER OF INTERESTS

                        This Section left blank intentionally.

                                      SECTION 10

                                 ADDITIONAL PARTNERS

        10.1.  Additional  Partners.  No  Person  shall   be  admitted  to   the
      Partnership as a General Partner or Limited Partner without the unanimous
      consent of the Partners. In the event  the General Partner withdraws from
      the  Partnership, whether  or  not in  violation  of this  Agreement,  no
      successor general  partner shall  be admitted to  the Partnership  unless
      such successor is a corporation  whose sole purpose, as reflected  in its
      articles  of  incorporation, is  to act  as  the general  partner  of the
      Partnership.  In the  event  of  the filing  of  any  petition under  any
      bankruptcy  law  by the  General Partner  or  any successor  thereto, the
      Partnership  shall  appoint  an  additional general  partner  whose  sole
      purpose, as  reflected in its articles of incorporation, is to act as the
      general partner of the Partnership.

        10.2.  Covenant  Not  to  Withdraw,  Transfer,  or  Dissolve.  Except as
      otherwise  permitted  by  this  Agreement,  the  General  Partner  hereby
      covenants and agrees not to (a)  withdraw or attempt to withdraw from the
      Partnership,  (b)  exercise  any power  under  the  Act  to dissolve  the
      Partnership, or  (c) Transfer all or  any portion of its  interest in the
      Partnership  as a  General Partner.  Further, the General  Partner hereby
      covenants  and agrees to  continue to carry  out the duties  of a General
      Partner  hereunder  until the  Partnership  is  dissolved and  liquidated
      pursuant to Section 11.

        10.3. Termination of Status as General Partner.

         (a) If  a  General  Partner ceases  to  be a  Partner for  any  reason
      hereunder,  such Person shall continue to be  liable as a Partner for all
      debts and obligations of the Partnership existing at the time such Person
      ceases to be a General Partner, regardless of whether, at such time, such
      debts  or  liabilities were  known or  unknown,  actual or  contingent. A
      Person shall not be liable as a General Partner for Partnership debts and
      obligations arising after such Person ceases to be a General Partner. Any
      debts, obligations, or liabilities  in damages to the Partnership  of any
      Person who  ceases to be  a General Partner  shall be collectible  by any
      legal means and  the Partnership is authorized, in addition  to any other
      remedies   at  law  or  in   equity,  to  apply   any  amounts  otherwise
      distributable or payable  by the  Partnership to such  Person to  satisfy
      such debts, obligations, or liabilities.<PAGE>


         (b)  It is  the intention  of  the Partners  that the  Partnership not
      dissolve as a result of the  cessation of any General Partner's status as
      a  General Partner; provided, however, that if a dissolution nevertheless
      occurs  under  the Act,  the  Partnership's property  and  business shall
      continue to be held and conducted in a new limited partnership under this
      Agreement  with any remaining  General Partners as  general partners, the
      Limited  Partners as  limited partners, and  any unadmitted  assignees of
      Interests as Interest holders.  Notwithstanding any provision of the  Act
      to the contrary, each Partner (including any successor to the Partnership
      interest  of a General  Partner) hereby (1)  waives any rights  that such
      Partner may have as a result of any such unintended dissolution to demand
      or  receive an  accounting  of the  Partnership  or any  distribution  in
      satisfaction  of  such Partner's  interest  in  the  Partnership  or  any
      security  for the  return  or distribution  thereof,  and (2)  agrees  to
      indemnify and hold harmless  the Partnership and the other  Partners from
      all cost, liability, and damage that any of such indemnified Partners may
      incur  (including,  without  limitation,  incremental  tax  liability and
      lawyer's fees  and expenses of enforcing  this indemnity) as a  result of
      any action inconsistent with part (1) of this sentence.

         (c) Notwithstanding any provision to the contrary herein, if a  Person
      ceases  to be  a General  Partner, the  remaining General  Partners shall
      refile the Certificate as if the Partnership had dissolved as a result of
      such cessation and a new limited partnership were formed pursuant to this
      Agreement  to  hold  the   assets  and  continue  the  business   of  the
      Partnership.

         (d) If at the time a Person ceases to be a General Partner such Person
      is also a Limited Partner or an Interest Holder with respect to Interests
      other than its  interest as a General  Partner, such cessation shall  not
      affect  such Person's rights and  obligations with respect  to such other
      Interests.

                                      SECTION 11

                              DISSOLUTION AND WINDING UP

        11.1. Liquidating  Events. The Partnership  shall dissolve and  commence
      winding  up  and liquidating  upon  the  first to  occur  of  any of  the
      following ("Liquidating Events"):

         (a)  July 16, 2037;

         (b)  The sale of all or substantially all of the Property;

         (c)  The  vote  by all  of  the  Partners to  dissolve,  wind  up, and
      liquidate the Partnership;

         (d)  The  happening  of  any  other  event  that  makes  it  unlawful,
      impossible, or impractical to  carry on the business of  the Partnership;
      or<PAGE>

         (e)  Any event which causes there to be no General Partner.

      The Partners hereby agree that, notwithstanding any provision of the Act,
      the  Partnership  shall  not  dissolve  prior  to  the  occurrence  of  a
      Liquidating Event. Furthermore, if an  event specified in Section 11.1(e)
      occurs, the Limited Partners may,  within 90 days of the date  such event
      occurs,  unanimously  vote  to  elect  a  successor  General  Partner and
      continue the  Partnership business, in  which case the  Partnership shall
      not dissolve. If it is determined, by a court  of competent jurisdiction,
      that  the Partnership  has dissolved  (i)  prior to  the occurrence  of a
      Liquidating Event, or (ii) upon  the occurrence of an event  specified in
      Section 11. 1(e) following  which the Limited Partners elect  a successor
      General Partner pursuant  to the previous  sentence, the Partners  hereby
      agree to continue the business of the Partnership without a winding up or
      liquidation.

        11.2. Winding  Up.  Upon the  occurrence  of  a Liquidating  Event,  the
      Partnership  shall continue  solely for  the purposes  of winding  up its
      affairs  in an orderly manner, liquidating its assets, and satisfying the
      claims of  its creditors and  Partners. No Partner shall  take any action
      that is inconsistent with,  or not necessary  to or appropriate for,  the
      winding up of the Partnership's business and affairs. The General Partner
      (or,  in the  event there  is no  remaining General  Partner,  any Person
      elected  by a  majority in  interest of  the Limited  Partners) shall  be
      responsible  for  overseeing  the  winding  up  and  dissolution  of  the
      Partnership and  shall take full account of the Partnership's liabilities
      and Property and the Partnership Property shall be liquidated as promptly
      as is consistent  with obtaining the fair value thereof, and the proceeds
      therefrom, to  the  extent  sufficient  therefor, shall  be  applied  and
      distributed in proportion to the positive Capital Account balances of the
      Partners.

        No General  Partner shall  receive any  additional compensation for  any
      services perf pursuant to this Section 11.

        11.3. Rights of Interest Holders. Except  as otherwise provided in  this
      Agreement, (a) each  Limited Partner shall  look solely to the  assets of
      the Partnership for the return of its Capital Contribution and shall have
      no right or power to demand or receive property other than cash from  the
      Partnership,  and (b)  no Limited  Partner shall  have priority  over any
      other  Limited Partner  as to  the return  of its  Capital Contributions,
      distributions, or allocations.<PAGE>


                                      SECTION 12

                                  POWER OF ATTORNEY

        12.1. General Partner  as Attorney-In-Fact. Each Limited Partner  hereby
      makes, constitutes, and appoints each General Partner  and each successor
      General Partner, with full power of substitution and resubstitution,  its
      true and lawful attorney-in-fact for it and in its name, place, and stead
      and  for its  use and  benefit, to  sign, execute,  certify, acknowledge,
      swear  to,  file,  and record  (a)  this  Agreement  and all  agreements,
      certificates, instruments, and other  documents amending or changing this
      Agreement as now or  hereafter amended which the General Partner may deem
      necessary,  desirable,  or  appropriate  including,  without  limitation,
      amendments or changes to reflect  (i) the exercise by an General  Partner
      of any power  granted to him  under this Agreement;  (ii) any  amendments
      adopted by the Partners  in accordance with the terms  of this Agreement;
      (iii)  the admission of any substituted Partner; and (iv) the disposition
      by  any  Partner  of  its  interest  in  the  Partnership;  and  (b)  any
      certificates, instruments, and documents as may be required by, or may be
      appropriate under, the laws of the State of Florida or any other state or
      jurisdiction in which the Partnership is doing or intends to do business.
      Each Limited Partner  authorizes each such attorney-in-fact to full power
      and authority  to do and perform  each and every act  or thing whatsoever
      requisite or  advisable to be  done in  connection with the  foregoing as
      fully  as such Limited  Partner might or could  do personally, and hereby
      ratifying  and  confirming  all  that  any  such  attorney-in-fact  shall
      lawfully do or cause to be done by virtue thereof or hereof.

        12.2. Nature  as Special Power. The  power of  attorney granted pursuant
      to this Section 12:

         (a) Is  a special power  of attorney coupled  with an  interest and is
      irrevocable;

         (b) May  be exercised  by  any such  attorney-in-fact by  listing  the
      Limited Partners  executing  any agreement,  certificate, instrument,  or
      other document with  the single  signature of  any such  attorney-in-fact
      acting as attorney-in-fact for such Limited Partners; and

         (c) Shall survive the death, disability, legal incapacity, bankruptcy,
      insolvency, dissolution, or  cessation of existence of  a Limited Partner
      of the whole or a portion of its interest in the Partnership, except that
      where the assignment is of such Limited Partner's entire interest in  the
      Partnership and the assignee, with the consent of the General Partner, is
      admitted  as a substituted Limited  Partner, the power  of attorney shall
      survive the delivery of such assignment  for the sole purpose of enabling
      any such attorney-in-fact to effect such substitution.<PAGE>

                                      SECTION 13

                                    MISCELLANEOUS

        13.1. Notices.  Any notice, payment,  demand, or communication  required
      or  permitted to be given by any  provision of this Agreement shall be in
      writing and shall be delivered personally to the Person or  to an officer
      of  the  Person  to whom  the  same  is  directed,  or sent  by  regular,
      registered, or certified  mail, addressed  as follows, or  to such  other
      address as such  Person may from  time to time  specify by notice to  the
      Partners:

         (a) If  to the Partnership, to  the address set forth  in Section 1.3;
      and

         (b) If to a Partner, to the address set forth in Section 2. 1 or 2.2.

      Any such  notice shall be deemed to be delivered, given, and received for
      all  purposes as of the date so  delivered, if delivered personally or if
      sent by regular mail, or  as of the date on which the  same was deposited
      in a regularly  maintained receptacle  for the deposit  of United  States
      mail,  if sent  by  registered or  certified  mail, postage  and  charges
      prepaid. Any Person may from time  to time specify a different address by
      notice to the Partnership and the Partners.

        13.2. Binding Effect.  Except as otherwise  provided in  this Agreement,
      every  covenant, term, and provision  of this Agreement  shall be binding
      upon and inure to the benefit of the Partners and their respective heirs,
      legatees, legal representatives, successors, transferees, and assigns.

        13.3.  Construction.  Every  covenant,  term,  and  provision  of   this
      Agreement  shall be  construed  according to  its  fair meaning  and  not
      strictly for or against any Partner.

        13.4. Time. Time is of the essence with respect to this Agreement.

        13.5.  Headings. Sections and other headings contained in this Agreement
      are  for  reference  purposes only  and  are  not  intended to  describe,
      interpret,  define, or  limit  the  scope,  extent,  or  intent  of  this
      Agreement or any provision hereof.

        13.6. Severability. Every provision of this  Agreement is intended to be
      severable. If any term or provision hereof is illegal or  invalid for any
      reason  whatsoever, such  illegality or  invalidity shall not  affect the
      validity or legality of the remainder of this Agreement.

        13.7. Incorporation  by Reference.  Every exhibit,  schedule, and  other
      appendix  attached to  this Agreement  and referred  to herein  is hereby
      incorporated in this Agreement by reference.

        13.8. Further  Action. Each  Partner, upon  the request  of any  General
      Partner, agrees to perform all further acts and execute, acknowledge, and
      deliver any  documents which may be reasonably necessary, appropriate, or
      desirable to carry out the provisions of this Agreement.

        13.9.  Variation of  Pronouns. All  pronouns and  any variations thereof
      shall be deemed to refer to  masculine, feminine, or neuter, singular, or
      plural, as the identity of the Person or Persons may require.<PAGE>


        13.10. Governing Law. The  laws of the State of Florida shall govern the
      validity  of this  Agreement,  the construction  of  its terms,  and  the
      interpretation of the rights and duties of the Partners.

        13.11. Waiver of Action for Partition.  Each of the Partners irrevocably
      waives any  right that it may  have to maintain any  action for partition
      with respect to any of the Partnership Property.

        13.12.  Counterpart Execution.  This Agreement  may be  executed in  any
      number of counterparts with the same effect as if all of the Partners had
      signed the  same document. All  counterparts shall be  construed together
      and shall constitute one agreement.

        13.13. Sole  and Absolute  Discretion. Except as  otherwise provided  in
      this Agreement, all  actions which any  General Partner may take  and all
      determinations  which any  General  Partner  may  make pursuant  to  this
      Agreement may  be taken and made  at the sole and  absolute discretion of
      such General Partner.

        13.14. Special Restrictions.  So long as the Partnership's mortgage loan
      from  Nomura  Asset Capital  Corporation  ("Nomura")  (together with  any
      assignment or  renewal thereof,  the "Nomura Loan")  remains outstanding,
      without  the prior written consent of Nomura  (or any successor holder of
      the Nomura Loan), the Partnership shall not:

         (a)  Dissolve, merge,  liquidate or  otherwise sell or dispose  of its
      assets (other than in the ordinary course of the Partnership's day-to-day
      operations);

         (b)  Incur  any  indebtedness  outside  the  ordinary  course  of  the
      Partnership's day-to-day operations,

         (c)  Permit any transfer,  directly or indirectly, of  any interest in
      the  Partnership  such that  the transferee  owns,  as a  result  of such
      transfer, a greater than 49% interest in the Partnership, or

         (d) Amend the Partnership Agreement.

         (e) Upon the admission of an additional or successor general  partner,
      the Partnership shall deliver  an acceptable non-consolidation opinion to
      the holder of the Nomura Loan.<PAGE>


        IN  WITNESS WHEREOF,  the parties  have  entered  into this  Amended and
      Restated  Agreement of  Limited Partnership  as of  the date  first above
      written.

             GENERAL PARTNER:

             SUNSHADOW, INC., 
             a Florida Corporation

             By:  /s/Joseph M. Williams
              -------------------------------------
              Joseph M. Williams, President

             WITHDRAWING GENERAL PARTNER:

             CUMBERLAND REAL ESTATE
             HOLDINGS, INC., a Florida corporation

             By:  /s/Joseph M. Williams
              -------------------------------------
              Joseph M. Williams, President

             ORIGINAL LIMITED PARTNER:

              /s/Francis M. Williams
              -------------------------------------
              FRANCIS M. WILLIAMS

             ADDITIONAL LIMITED PARTNER:

             KIMMINS CORP., a Florida corporation

             By:  /s/Francis M. Williams
              -------------------------------------
              Francis M. Williams, President<PAGE>


                                      SCHEDULE A


      <TABLE>
                             PARTNERSHIP CAPITAL ACCOUNTS
                               FOR SUNSHADOW APARTMENTS
      <CAPTION>
                                                          Francis
                                  CREH         CREH       Williams      Other
              Name of            General     Limited      Limited      Limited
            Partnership          Partner     Partner      Partner      Partner
      <S>                    <C>            <C>       <C>             <C>
      Sunshadow Apartments:                           
      -----------------------
      Original capital                                
       contribution          $        1.00  $    0.00 $        99.00  $    0.00
      Losses to                                       
       December 31, 1996        (61,001.97)      0.00  (6,039,209.69)      0.00
      Losses for nine                                 
       months ending                                  
       September 30, 1997        (3,959.31)      0.00    (391,971.87)      0.00
                             -------------  --------- --------------- --------
      Total capital                                   
       accounts              $  (64,960.28) $    0.00 $(6,431,082.56) $    0.00
                             =============  ========= =============== ========
      /TABLE
<PAGE>


                              FIRST AMENDED AND RESTATED
                            LIMITED PARTNERSHIP AGREEMENT
                                          OF
                            SUMMERBREEZE APARTMENTS, LTD.,
                            A FLORIDA LIMITED PARTNERSHIP

        THIS  FIRST  AMENDED  AND  RESTATED  LIMITED  PARTNERSHIP  AGREEMENT  is
      entered  into and effective as  of the 22nd day of  October, 1997, by and
      between   SUMMERBREEZE,  INC.   (the   "General   Partner"),  a   Florida
      corporation,  as the  general partner,  CUMBERLAND REAL  ESTATE HOLDINGS,
      INC., a Florida corporation  (the "Withdrawing General Partner"), FRANCIS
      M.  WILLIAMS, as  the  original limited  partner,  and KIMMINS  CORP.,  a
      Florida corporation  (the "Additional Limited Partner"),  pursuant to the
      provisions of the Florida Revised Uniform Limited Partnership Act, on the
      following terms and conditions:

                                       RECITALS

        WHEREAS,  the  Withdrawing General  Partner  and  the  Original  Limited
      Partner formed the Partnership on July 16, 1987, and

        WHEREAS,  the Withdrawing  General Partner  has transferred  all  of its
      interest in  the Partnership  to the  General Partner  who desires to  be
      admitted as a substitute general partner of the Partnership, and

        WHEREAS, the  Additional Limited  Partner desires  to be  admitted as  a
      limited partner in the  Partnership in exchange for a  release of certain
      claims it has against the Partnership, and

        WHEREAS, the  parties hereto desire  to amend  the partnership agreement
      of the Partnership to  reflect the withdrawal of the  Withdrawing General
      Partner, the admission of General Partner as a substitute general partner
      and  the admission  of the  Additional Limited  Partner as  an additional
      limited partner and to  restate the partnership agreement to  reflect the
      agreement of the parties hereto.

        NOW, THEREFORE, in consideration of the  foregoing the parties agree  as
      follows:

                                      SECTION 1

                                   THE PARTNERSHIP

        1.  1.  Continuation and  Partnership  Name.  The  parties continue  the
      Partnership  as a limited partnership  pursuant to the  provisions of the
      Act. This Agreement  supersedes any  and all other  agreements among  the
      parties, whether oral or written  and the terms and conditions set  forth
      in this  Agreement shall govern their relations  as Partners. The name of
      the Partnership  shall continue  to be  SUMMERBREEZE APARTMENTS, LTD.,  a
      Florida limited partnership, and all business of the Partnership shall be
      conducted in  that name. The General  Partner may change the  name of the
      Partnership on ten (10) days written notice  to the Limited Partners. The
      Partnership shall hold all of its property in the name of the Partnership
      and not in the name of any Partner.<PAGE>


        1.2.  Withdrawal and  Admission  of Certain  Partners.  The  Withdrawing
      General  Partner hereby withdraws as a general partner of the Partnership
      and  the General  Partner is  hereby admitted  as the  substitute general
      partner.  The  Additional  Limited  Partner  is  hereby  admitted  as  an
      additional limited partner.

        1.3. Purpose. The purpose  of the Partnership shall be to acquire,  own,
      develop, construct,  improve, lease, manage, operate,  and otherwise deal
      with the Property, to own or lease such personalty and/or fixtures as may
      be reasonably related to the ownership or operation of the Property,  and
      to  conduct  such  other  business  activities  and  operations   as  are
      consistent  with and reasonably related to the foregoing purposes, and in
      connection therewith, to enter into contracts and leases, to borrow money
      necessary  for  the  Partnership's   business,  to  pledge,  mortgage  or
      otherwise encumber all or any part of the Partnership's assets.

        1.4.  Principal Place of  Business. The  principal place  of business of
      the  Partnership  shall be  determined by  the  General Partner,  and the
      General  Partner  may  change the  principal  place  of  business of  the
      Partnership to any  other place upon ten (10) days  written notice to the
      Limited Partners.

        1.5.  Term.  The term  of  the Partnership  commenced  on  the  date the
      certificate  of limited partnership  described in Section  620.108 of the
      Act (the "Certificate") was filed in the office of the Florida Department
      of State in accordance with the  Act and shall continue until the winding
      up  and  liquidation of  the Partnership  and  its business  is completed
      following a Liquidating Event, as provided, in Section 11.

        1.6. Filings; Agent for Service of Process.

         (a) The General Partner shall take all actions reasonably necessary to
      maintain the status of the Partnership as a limited partnership under the
      laws  of Florida.  The  General Partner  shall  cause amendments  to  the
      Certificate to be filed whenever required  by the Act. Any amendments may
      be executed by the General Partner.

         (b) The  agent  for service  of process  on the  Partnership shall  be
      Carlton, Fields, Ward, Emmanuel,  Smith & Cutler, P.A., or  any successor
      as appointed by the General Partner. The address of the registered office
      of the Partnership at which the  registered agent is located shall be One
      Harbour Place, 5th Floor, Tampa, Florida 33602.

         (c) Upon the dissolution of the Partnership, the General Partner  (or,
      in the event there  is no remaining General  Partner, any Person  elected
      pursuant to  Section 11.2) shall promptly  execute and cause to  be filed
      certificates of cancellation in accordance  with the Act and the laws  of
      any  other states  or jurisdictions  in which  the Partnership  has filed
      certificates  and   shall  promptly   notify  the  Limited   Partners  of
      dissolution.<PAGE>


        1.7. Independent  Activities. Each Limited  Partner may, notwithstanding
      this Agreement,  engage in whatever  activities they choose,  whether the
      same  or competitive with the Partnership or otherwise, without having or
      incurring any obligation to offer any interest in such activities  to the
      Partnership  or any  Partner.  Neither this  Agreement  nor any  activity
      undertaken  pursuant  hereto  shall  prevent  any  Limited  Partner  from
      engaging in such activities, or require any Limited Partner to permit the
      Partnership or any Partner to participate in  any such activities, and as
      a material part of the consideration for the execution  of this Agreement
      by each Partner, each Partner hereby  waives, relinquishes, and renounces
      any such right or claim of participation.

        1.8. Definitions. Capitalized words  and phrases used in this  Agreement
      have the following meanings:

         (a)  "Act" means the Florida Revised  Uniform Limited Partnership Act,
      as set forth in Chapter 620 of the Florida Statutes, as amended from time
      to time (or any corresponding provisions of succeeding law).

         (b)  "Additional Limited Partner" means Kimmins Corp.

         (c)  "Adjusted Capital  Account  Deficit" means,  with respect  to any
      Interest Holder, the deficit  balance, if any, in that  Interest Holder's
      Capital Account as of the  end of the relevant Fiscal Year,  after giving
      effect to the following adjustments:

          (i) Credit to such  Capital Account any amounts that  Interest Holder
      is obligated to restore pursuant to any provision of this Agreement or is
      deemed to be obligated  to restore pursuant to the  penultimate sentences
      of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

          (ii) Debit to such Capital Account the items described in Regulations
      Sections  1.704-1(b)(2)(ii)(d)(4),   1-704-1(b)(2)(ii)(d)(5)  and  1.704-
      1(b)(2)(ii)(d)(6).

      The foregoing definition of Adjusted  Capital Account Deficit is intended
      to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d)
      and shall be interpreted consistently therewith.

         (d) "Affiliate" means,  with respect to any Person, any  Person owning
      or controlling 50%  or more of the  outstanding voting interests of  such
      Person.

         (e)  "Capital Account" means,  with respect to any  General Partner or
      Interest Holder, the Capital Account  maintained for such General Partner
      or Interest Holder in accordance with the following provisions.

          (i) To each  Person's Capital  Account there shall  be credited  such
      Person's  Capital Contributions,  such  Person's  distributive  share  of
      Profits,  and the amount of  any Partnership liabilities  assumed by such
      Person or which are secured by any Property distributed to such Person.

          (ii)  To each  Person's Capital  Account there  shall be  debited the
      amount of cash and the  Gross Asset Value of any Property  distributed to
      such  Person pursuant to any  provision of this  Agreement, such Person's
      distributive  share of Losses, and the amount  of any liabilities of such
      Person assumed  by the Partnership or  which are secured by  any property
      contributed by such Person to the Partnership.<PAGE>


          (iii) In the event all or a portion of an interest in the Partnership
      is  transferred in  accordance  with the  terms  of this  Agreement,  the
      transferee shall succeed to the Capital Account of  the transferor to the
      extent it relates to the transferred interest.

          (iv) In determining the amount of any liability, there shall be taken
      into account Code Section  752(c) and any other applicable  provisions of
      the Code and Regulations.

         The foregoing provisions  and the other  provisions of  this Agreement
      relating  to the maintenance of  Capital Accounts are  intended to comply
      with  Regulations Section 1.704l(b), and shall be interpreted and applied
      in a  manner consistent with such  Regulations. In the event  the General
      Partner shall determine that it is  prudent to modify the manner in which
      the  Capital  Accounts,  or  any debits  or  credits  thereto (including,
      without limitation,  debits or credits relating to  liabilities which are
      secured  by contributed or distributed  property or which  are assumed by
      the  Partnership Partners),  are computed  in order  to comply  with such
      Regulations,  the General  Partner may  make such  modification, provided
      that  it  is  not  likely  to  have a  material  effect  on  the  amounts
      distributable to any Person  pursuant to Section 11 upon  the dissolution
      of  the  Partnership.  The  General  Partner  also  shall  (i)  make  any
      adjustments  that  are  necessary  or appropriate  to  maintain  equality
      between   the  Capital  Accounts  of  the  Partners  and  the  amount  of
      Partnership  capital reflected  on  the Partnership's  balance sheet,  as
      computed for book purposes, in accordance with Regulations Section 1.704-
      1(b)(2)(iv)(q), and (ii) make any  appropriate modifications in the event
      unanticipated events might otherwise  cause this Agreement not  to comply
      with Regulations Section 1.704-1(b).  As of the date hereof,  the Capital
      Account  balances of the  Partners is as  set out in  Schedule A attached
      hereto.

         (f) "Capital Contributions" means,  with respect to  any Partner,  the
      amount of money and the initial Gross Asset Value of  any property (other
      than money) contributed to  the Partnership with respect to  the interest
      in  the  Partnership  held  by  such Partner,  and  in  the  case  of the
      Additional  Limited  Partner,  the   current  unpaid  balance  (including
      interest) of the obligations of the Partnership to the Additional Limited
      Partner  forgiven by the Additional Limited Partner upon its admission to
      the Partnership.

         (g)  "Code" means the Internal  Revenue Code of 1986,  as amended from
      time to time (or any corresponding provisions of succeeding law).

         (h) "Depreciation"  means, for each  fiscal year or  other period,  an
      amount equal to  the depreciation, amortization,  or other cost  recovery
      deduction allowable  with  respect to  an asset  for such  year or  other
      period, except that if the Gross Asset Value of an asset differs from its
      adjusted basis for federal  income tax purposes at the  beginning of such
      year or  other period,  Depreciation shall be  an amount which  bears the
      same ratio  to such beginning Gross Asset Value as the federal income tax
      depreciation,  amortization, or  other cost  recovery deduction  for such
      year  or other  period  bears  to  such  beginning  adjusted  tax  basis;
      provided,  however,   that  if  the  federal   income  tax  depreciation,
      amortization, or other  cost recovery  deduction for such  year is  zero,
      Depreciation  shall be determined with reference  to such beginning Gross
      Asset Value using any reasonable method selected by the General Partner.<PAGE>


         (i) "Fiscal Year"  means that period  of time  from January  1 to  the
      following December 31, except for the  first fiscal year, when the fiscal
      year  began  on the  date the  Partnership was  formed  and ended  on the
      following December 31.

         (j)  "General Partner" means any Person who (i) is referred to as such
      in the first paragraph of this Agreement or has become  a General Partner
      pursuant to the terms of this Agreement, and (ii)  has not ceased to be a
      General  Partner  pursuant  to  the terms  of  this  Agreement.  "General
      Partners" means all such Persons.

         (k)  "Gross Asset Value" means, with respect to any asset, the asset's
      adjusted basis for federal income tax purposes, except as follows:

          (i) The  initial Gross  Asset  Value of  any asset  contributed by  a
      Partner  to the Partnership shall be the  gross fair market value of such
      asset, as determined by the contributing Partner and the Partnership;

          (ii)  The Gross  Asset  Values of  all  Partnership assets  shall  be
      adjusted  to  equal  their  respective  gross  fair  market   values,  as
      determined  by the General  Partner, as of  the following times:  (a) the
      acquisition of  an additional interest in  the Partnership by  any new or
      existing  Partner  in  exchange  for  more  than  a  de  minimis  Capital
      Contribution; (b) the  distribution by  the Partnership to  a Partner  of
      more than  a  de minimis  amount  of  Property as  consideration  for  an
      interest in the Partnership;  and (c) the liquidation of  the Partnership
      within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided,
      however, that adjustments  pursuant to clauses (a) and (b) above shall be
      made  only  if  the  General  Partner  reasonably  determines  that  such
      adjustments are necessary or appropriate to reflect the relative economic
      interests of the Partners in the Partnership;

          (iii) The Gross Asset  Value of any Partnership asset  distributed to
      any Partner shall  be the gross  fair market value  of such asset  on the
      date of distribution; and

          (iv)  The Gross Asset Values of Partnership assets shall be increased
      (or decreased) to reflect  any adjustments to the adjusted  basis of such
      assets pursuant to Code Section 734(b)  or Code Section 743(b), but  only
      to the extent that such adjustments are taken into account in determining
      Capital  Accounts pursuant  to  Regulations Section  1.7041(b)(2)(iv)(m);
      provided, however, that Gross Asset Values shall not be adjusted pursuant
      to this Section 1.7(k)(iv)  to the extent the General  Partner determines
      that  an adjustment  pursuant  to  Section  1.7(k)(ii)  is  necessary  or
      appropriate in connection with a  transaction that would otherwise result
      in an adjustment pursuant to this Section 1.7(k)(iv).

      If the  Gross Asset Value  of an  asset has been  determined or  adjusted
      pursuant to Section 1.7(k)(i), Section 1.7(k)(ii), or Section 1.7(k)(iv),
      such Gross Asset Value  shall thereafter be adjusted by  the Depreciation
      taken into account  with respect to such asset for  purposes of computing
      Profits and Losses.<PAGE>

         (l)  "Interest"  means  an   ownership  interest  in  the  Partnership
      representing  a Capital  Contribution set  forth in  Section 2.1  or 2.2,
      including any  and all benefits to  which the holder of  such an Interest
      may  be entitled  as  provided  in  this  Agreement,  together  with  all
      obligations  of such Person to  comply with the  terms and provisions, of
      this Agreement.

         (m)  "Interest  Holder"  means  any  Person  who  holds  an  Interest,
      regardless of whether that Person has been admitted to the Partnership as
      a Limited Partner. "Interest Holders" means all such Persons.

         (n)  "Limited Partner" means any Person (i) named as such in the first
      paragraph of this Agreement who has  become a Limited Partner pursuant to
      the  terms of this  Agreement, and (ii)  who holds  an Interest. "Limited
      Partners" means  all such Persons. All references  in this Agreement to a
      majority in interest or a specified percentage of the Limited Partnership
      shall mean  Limited Partners whose combined Interests represent more than
      50% or  such specified  percentage, respectively,  of the  Interests then
      held by all Limited Partners.

         (o)  "Original Limited Partner" means Francis M. Williams.

         (p) "Partners"  means all General  Partners and  all Limited Partners,
      where no distinction is required by the context in which the term is used
      herein. "Partner" means any one  of the Partners. All references in  this
      Agreement  to a  majority in interest  or a  specified percentage  of the
      Partners shall mean Partners who are entitled to receive more than 50% or
      such specified percentage, respectively, of any distributions pursuant to
      Section 4. 1.

         (q)  "Partnership"  means  the  partnership  formed  pursuant  to  the
      Certificate  and   described  in  this  Agreement   and  the  partnership
      continuing the business of  this Partnership in the event  of dissolution
      as herein provided.

         (r)  "Person" means any individual,  partnership, corporation,  trust,
      or other entity.

         (s) "Profits" and "Losses" mean, for each Fiscal Year or other period,
      an amount equal to the Partnership's taxable income or loss for such year
      or  period, determined in accordance  with Code Section  703(a) (for this
      purpose, all  items of income,  gain, loss, or  deduction required  to be
      stated separately pursuant to Code Section 703(a)(1) shall be included in
      taxable income or loss), with the following adjustments:

          (i) Any income of the Partnership  that is exempt from federal income
      tax and not otherwise taken  into account in computing Profits or  Losses
      pursuant to  this Section 1.7(s) shall be added to such taxable income or
      loss;

          (ii)  Any expenditures of  the Partnership described  in Code Section
      705(a)(2)(B)  or  treated  as  Code  Section  705(a)(2)(B)   expenditures
      pursuant to  Regulations Section 1.704-1(b)(2)(iv)(e), and  not otherwise
      taken  into account  in  computing Profits  or  Losses pursuant  to  this
      Section 1.7(q) shall be subtracted from such taxable income or loss;<PAGE>

          (iii) In the event the Gross Asset Value of any  Partnership asset is
      adjusted to Section 1.7(k)(ii) or Section 1.7(k)(iii), the amount of such
      adjustment  shall  be  taken  into  account  as  gain or  loss  from  the
      disposition of such asset for purposes of computing Profits or Losses;

          (iv) Gain or  loss resulting  from any disposition  of Property  with
      respect  to which  gain  or loss  is recognized  for  federal income  tax
      purposes shall be  computed by reference to the Gross  Asset Value of the
      property disposed of, notwithstanding that the adjusted tax basis of such
      property differs from its Gross Asset Value; and 

          (v) In  lieu  of  the  depreciation,  amortization,  and  other  cost
      recovery  deductions taken into account  in computing such taxable income
      or loss, there shall be  taken into account Depreciation for such  Fiscal
      Year or other period, computed in accordance with Section 1.7(h).

         (t) "Property" means the real property acquired by the Partnership and
      described in Schedule B hereto and any improvements and personal property
      acquired  by  the Partnership  relating thereto,  and shall  include both
      tangible and intangible property.

         (u) "Regulations"  means the Income Tax  Regulations promulgated under
      the Code, as such regulations may be amended from time to time (including
      corresponding provisions of succeeding regulations).

         (v)  "Transfer"  means,  as  a  noun,  any  voluntary  or  involuntary
      transfer, sale,  pledge, hypothecation,  or other  disposition and,  as a
      verb,   voluntarily   or   involuntarily  to   transfer,   sell,  pledge,
      hypothecate, or otherwise dispose of.

         (w)  "Withdrawing  General  Partner"  means  Cumberland   Real  Estate
      Holdings, Inc.

                                      SECTION 2

                      IDENTITY OF PARTNERS CAPITAL CONTRIBUTIONS

        2.1. General Partner.  The name and address  of the  General Partner are
      as follows:

         Summerbreeze, Inc.
         4311 W. Waters Avenue
         Suite 600
         Tampa, Florida 33614

        2.2. Limited Partners. The name and address  of the Limited Partners are
      as follows:

         Francis M. Williams
         1501 Second Avenue
         Tampa, FL 33605

         Kimmins Corp.
         1501 Second Avenue
         Tampa, FL 33605

        2.3. Capital Contributions.<PAGE>

         (a) Except as  otherwise provided in this Agreement, no  Partner shall
      demand or receive a return of  its Capital Contributions or withdraw from
      the  Partnership without the consent of all Partners. Under circumstances
      requiring  a return of any  Capital Contributions, no  Partner shall have
      the  right  to  receive  property  other  than  cash  except  as  may  be
      specifically provided herein.

         (b) Except as  otherwise provided in this Agreement, no  Partner shall
      receive  any interest,  salary, or  drawing with  respect to  its Capital
      Contributions or its Capital  Account or for services rendered  on behalf
      of the Partnership or otherwise in its capacity as a Partner.<PAGE>

         (c) Except as otherwise provided by this Agreement, no Limited Partner
      shall  be  liable for  the debts,  liabilities,  contracts, or  any other
      obligations  of the  Partnership. Except  as  otherwise provided  by this
      Agreement,  any other agreements among  the Partners, or applicable state
      law, a  Limited  Partner  shall  be  liable  only  to  make  its  Capital
      Contributions  and  shall  not  be  required to  lend  any  funds  to the
      Partnership or, after its  Capital Contributions have been paid,  to make
      any additional contributions to the Partnership. No General Partner shall
      have  any   personal  liability   for  the   repayment  of   any  Capital
      Contributions of any Limited Partner.

                                      SECTION 3

                                     ALLOCATIONS

        3.1. Profits.  After giving effect to  the special  allocation set forth
      in Section  3.3, profits for  any Fiscal Year  shall be allocated  in the
      same  proportion as  net  cash flow  is distributed  to  the Partners  in
      accordance with Section 4. 1.

        3.2. Losses. After giving effect  to the special allocation set forth in
      Section  3.3, losses for any Fiscal Year  shall be allocated as set forth
      in  Section 3.2(a)  below, subject  to the  limitation in  Section 3.2(b)
      below:

         (a)  Losses  for any  Fiscal  Year  shall  be allocated  in  the  same
      proportion  as net cash flow is distributed to the Partners in accordance
      with Section 4. 1.

         (b) The Losses  allocated pursuant to Section 3.2(a) shall  not exceed
      the maximum amount of Losses that can be so allocated without causing any
      Interest Holder to have an Adjusted Capital Account Deficit at the end of
      any Fiscal Year. In the  event some but not  all of the Interest  Holders
      would  have  Adjusted Capital  Account Deficits  as  a consequence  of an
      allocation of Losses pursuant to Section 3.2(a), the limitation set forth
      in this Section 3.2(b) shall be applied on an Interest Holder by Interest
      Holder basis so  as to allocate  the maximum permissible  Losses to  each
      Interest  Holder  under  Regulations  Section  1.704-1(b)(2)(ii)(d).  All
      Losses  in excess  of the  limitations set  forth in this  Section 3.2(b)
      shall be allocated to the General Partner.

        3.3.  Section  754 Adjustments.  To  the  extent  an  adjustment to  the
      adjusted  tax basis  of any  Partnership asset  pursuant to  Code Section
      734(b)  or  Code  Section 743(b)  is  required,  pursuant  to Regulations
      Section  1.704-1(b)(2)(iv)(m), to  be taken  into account  in determining
      Capital Accounts, the amount  of such adjustment to the  Capital Accounts
      shall be  treated as  an item  of gain (if  the adjustment  increases the
      basis of  the asset) or loss (if the adjustment decreases such basis) and
      such gain or loss shall be specially allocated to the Persons in a manner
      consistent with the manner  in which their Capital Accounts  are required
      to be adjusted pursuant to such Section of the Regulations.<PAGE>


        3.4.  Tax  Allocations: Code  Section 704(c).  In  accordance with  Code
      Section 704(c)  and the Regulations  thereunder, income  gain, loss,  and
      deduction with respect to any property contributed to  the capital of the
      Partnership shall,  solely  for  tax purposes,  be  allocated  among  the
      Partners  so as  to take  account of any  variation between  the adjusted
      basis of such property to the Partnership for federal income tax purposes
      and  its initial Gross Asset  Value (computed in  accordance with Section
      1.7(k)(i)).

        In the event the  Gross Asset Value of any Partnership asset is adjusted
      pursuant to  Section 1.70)(ii),  subsequent allocations of  income, gain,
      loss, and  deduction with respect to such asset shall take account of any
      variation between the adjusted basis of such asset for federal income tax
      purposes  and its  Gross Asset  Value in  the same  manner as  under Code
      Section 704(c) and the Regulations thereunder.

        Any elections or other decisions relating  to such allocations shall  be
      made by  the General Partner in  any manner that reasonably  reflects the
      purpose and intention of this Agreement.

                                      SECTION 4

                                    DISTRIBUTIONS

        4.1. Net  Cash Flow.  Except as  otherwise provided in  Section 4.2  and
      Section  11, all  net cash  flow, if  any, as  determined by  the General
      Partner, shall be distributed,  at such times as the  General Partner may
      determine, as follows:

         (a) 1% to the General Partner, 50% to the Original Limited Partner and
      49%  to the Additional Limited Partner until the Capital Account balance,
      of  the Additional  Limited  Partner  has  been  reduced  to  zero,  then
      thereafter

         (b)  1%  to the General  Partner, 49% to the  Original Limited Partner
      and 50% to the Additional Limited Partner.

        4.2.  Net  Cash  Flow  from Capital  Transactions.  Except  as otherwise
      provided  in  Section 11,  all net  cash flow  arising  from the  sale or
      refinancing  of any  Partnership assets  outside the  ordinary  course of
      business shall be distributed as follows:

         (a)  100%  to  the Additional  Limited  Partner  until the  Additional
      Limited Partner has received  distributions pursuant to this Section  4.2
      equal to its Capital Contributions,
      then thereafter

         (b)  100% to the  Original Limited Partner until  the Original Limited
      Partner  has received distributions pursuant to this Section 4.2 equal to
      his Capital Contributions, then thereafter

         (c)  1%  to the General  Partner, 49% to the  Original Limited Partner
      and 50% to the Additional Limited Partner.<PAGE>


        4.3. Amounts Withheld. All amounts withheld pursuant to the  Code or any
      provision of any state or local tax  law, with respect to any payment  or
      distribution  by the  Partnership to  the Partners,  shall be  treated as
      amounts distributed to  the Partner pursuant  to this Section  4 for  all
      purposes  under this Agreement. The General Partner may allocate any such
      amounts among the  General Partners  and Limited Partners  in any  manner
      that is in accordance with applicable law.

                                      SECTION 5

                                      MANAGEMENT

        5.1. Authority  of the General Partner.  Except to  the extent otherwise
      provided  herein, the General Partner  shall have the  sole and exclusive
      right to manage the business of the Partnership and shall have all of the
      rights  and powers which may  be possessed by  general partners under the
      Act including, without  limitation, the right and  power to make  any and
      all  elections for  federal,  state, and  local  tax purposes  including,
      without  limitation, any election, if permitted by applicable law: (i) to
      adjust  the basis of the Property  pursuant to Code Sections 754, 734(b),
      and 743(b), or comparable provisions of state or local law, in connection
      with  transfers of Partnership  interests and  Partnership distributions;
      (ii)  to  extend  the  statute  of  limitations  for  assessment  of  tax
      deficiencies  against  Partners  with   respect  to  adjustments  to  the
      Partnership's  federal,  state,  or  local  tax  returns;  and  (iii)  to
      represent the  Partnership, the General Partner, and the Limited Partners
      before  taxing authorities  or courts  of competent  jurisdiction in  tax
      matters affecting the Partnership,  the General Partner, and  the Limited
      Partners in  their capacities as such,  and to execute any  agreements or
      other  documents relating  to or  affecting  such tax  matters, including
      agreements or other documents that bind the Partners with respect to such
      tax  matters or otherwise affect  the rights of  the Partnership, General
      Partner,  and  Limited  Partners.  The General  Partner  is  specifically
      authorized  to act as the "Tax Matters Partner" under the Code and in any
      similar capacity under state or local law.

        5.2. Right  to Rely  on  General Partner.  Any Person  dealing with  the
      Partnership may rely (without duty of further inquiry) upon a certificate
      signed by any General Partner as to:

         (a) The identity of any General Partner or Limited Partners;

         (b) The existence or nonexistence of any fact or facts that constitute
      a condition precedent  to acts by a General  Partner or which are  in any
      other manner germane to the affairs of the Partnership;

         (c)  The Persons  who  are  authorized  to  execute  and  deliver  any
      instrument or document of the Partnership; or

         (d) Any act or failure  to act by the Partnership on any  other matter
      whatsoever involving the Partnership or any Partner.

        5.3. Restrictions on Authority of General Partner.

         Without the consent of  all of the Partners, no General  Partner shall
      have the authority to:

         (a)  Do any act in contravention of this Agreement;<PAGE>


         (b)  Do any  act which  would  make it  impossible to  carry  ordinary
      business  of  the  Partnership,  except  as  otherwise  provided in  this
      Agreement;

         (c)  Confess a judgment against the Partnership;

         (d)  Possess the Property,  or assign rights in specific parts  of the
      Property, for other than a Partnership purpose;

         (e)  Knowingly perform any act that  would subject any Limited Partner
      to liability as a general partner in any jurisdiction;

         (f) File a  bankruptcy or  insolvency petition or otherwise  institute
      insolvency proceedings;

         (g)  Dissolve,  liquidate,   consolidate,  merge,   or  sell   all  or
      substantially all of the assets of the Partnership;

         (h)  Cause the Partnership  to engage in  any other  business activity
      inconsistent  with the purpose of the Partnership provided in Section 1.3
      hereof; or

         (i)  Amend this Agreement.

        5.4. Duties and Obligations of General Partner.

         (a) The General Partner shall take all actions which may be  necessary
      or  appropriate  (i)  for the  continuation  of  the Partnership's  valid
      existence as a limited partnership under the laws of the State of Florida
      (and of each other  jurisdiction in which such existence is  necessary to
      protect the  limited liability of  the Limited Partners or  to enable the
      Partnership to conduct the business in  which it is engaged) and (ii) for
      the   accomplishment  of   the  Partnership's  purposes,   including  the
      acquisition, development, maintenance, preservation, and operation of the
      Property  in  accordance  with  the  provisions  of  this  Agreement  and
      applicable laws and regulations.

         (b) The General  Partner shall devote to the Partnership  such time as
      may be necessary  for the proper performance of all duties hereunder, but
      the  General Partner  shall not be  required to  devote full  time to the
      performance of such duties.

         (c) The General Partner shall be under a fiduciary duty to conduct the
      affairs of the Partnership in  the best interests of the  Partnership and
      of the  Limited Partners, including the safekeeping and use of all of the
      Property  and  the  use   thereof  for  the  exclusive  benefit   of  the
      Partnership. Any transaction between the Partnership and an  Affiliate of
      the  General  Partner  shall  be  permitted  only  upon  such  terms  and
      conditions  as would be expected  in an arm's  length transaction between
      unaffiliated parties.<PAGE>


        5.5. Indemnification of General Partner.

        (a) The Partnership, its receiver, or  its trustee shall indemnify, save
      harmless,  and pay all judgments  and claims against  any General Partner
      relating to  any  liability  or damage  incurred  by reason  of  any  act
      performed  or  omitted  to  be  performed  by  such  General  Partner  in
      connection  with the  business of  the Partnership,  including attorneys'
      fees incurred by such  General Partner in connection with the  defense of
      any action based on any  such act or omission, which attorneys'  fees may
      be paid as  incurred, including  all such liabilities  under federal  and
      state  securities laws (including the Securities Act of 1933, as amended)
      as permitted by laws.

        (b) In the event of any action by a Limited Partner  against any General
      Partner, including  a Partnership derivative suit,  the Partnership shall
      indemnify, save harmless, and  pay all expenses of such  General Partner,
      including attorneys' fees,  incurred in  the defense of  such action,  if
      such General Partner is successful in such action.

        (c)  The  Partnership  shall  indemnify,  save  harmless,  and  pay  all
      expenses,  costs, or  liabilities  of any  General  Partner who  for  the
      benefit of the  Partnership makes  any deposit, acquires  any option,  or
      makes any other similar  payment or assumes any obligation  in connection
      with any  property proposed  to be  acquired by  the Partnership  and who
      suffers any financial loss as the result of such action.

        (d)  Notwithstanding the  provisions  of Sections  5.5(a),  5.5(b),  and
      5.5(c)  above, no General Partner shall be indemnified from any liability
      for fraud, bad faith, willful misconduct, or gross negligence.

        (e)  Notwithstanding the  provisions  of Sections  5.5(a),  5.5(b),  and
      5.5(c)  above, the obligation of the Partnership to indemnify the General
      Partner shall be fully subordinated to the secured obligations payable to
      the Partnership's  secured creditors  and  shall not  constitute a  claim
      against the Partnership in the event that  net cash flow in excess of the
      amounts  necessary to pay such secured obligations is insufficient to pay
      such obligations.

      5.6. Compensation and Loans.

        (a)  Compensation and  Reimbursement. Except  as otherwise  provided  in
      this Section 5.6, no Partner  shall receive any salary, fee, or  draw for
      services  rendered to  or on  behalf  of the  Partnership, nor  shall any
      Partner be reimbursed for any expenses incurred by such Partner on behalf
      of the Partnership.

        (b) Expense.  The General  Partner may  charge the  Partnership for  any
      direct expenses reasonably incurred  in connection with the Partnership's
      business.<PAGE>


        (c) Loans.  Any Person may,  with the  consent of  the General  Partner,
      lend or advance  money to the Partnership. If any  Partner shall make any
      loan or  loans to the  Partnership or  advance money on  its behalf,  the
      amount of  any such  loan or advance  shall not be  treated as  a Capital
      Contribution but shall be a debt  due from the Partnership. The amount of
      any  such loan or advance by a  lending Partner shall be repayable out of
      the  Partnership's cash  and  shall bear  interest at  such  rate as  the
      General Partner and the lending Partner shall agree. If a General Partner
      is the lending Partner, the  rate of interest shall be determined  by the
      General Partner taking into consideration, without limitation, prevailing
      interest rates and the interest rates such General Partner is required to
      pay in the event such  General Partner has itself borrowed funds  to loan
      or advance to the Partnership. None of the Partners shall be obligated to
      make any loan or advance to the Partnership.

        5.7. Operating Restrictions.

        (a) All  Property in the  form of cash  not otherwise  invested shall be
      deposited  in  one  or   more  accounts  maintained  in   such  financial
      institutions  as the General Partner shall determine or shall be invested
      in   short-term  liquid  securities  or  shall  be  left  in  escrow  and
      withdrawals  shall  be made  only in  the  regular course  of Partnership
      business  on  such signature  or signatures  as  the General  Partner may
      determine from time to time.

        (b)  The  signature  of  any  General  Partner  shall  be  necessary and
      sufficient  to convey title to any real property owned by the Partnership
      or  to execute  any promissory  notes, trust  deeds, mortgages,  or other
      instruments of hypothecation,  and all of the Partners agree  that a copy
      of  this Agreement may  be shown to  the appropriate parties  in order to
      confirm the  same, and further  agree that the  signature of  any General
      Partner  shall be sufficient to execute any "statement of partnership" or
      other  documents necessary to effectuate  this or any  other provision of
      this Agreement. All of the Partners do hereby appoint the General Partner
      as  their  attorney-in-fact for  the  execution  of  any  or all  of  the
      documents described herein.

                                      SECTION 6

                               ROLE OF LIMITED PARTNERS

        6.1. Rights or Powers. Except as otherwise set  forth in Section 6.2, no
      Limited  Partner  shall have  any  right or  power  to take  part  in the
      management or control of the  Partnership or its business and  affairs or
      to act for or bind the Partnership in any way.

        6.2. Voting Rights.  The Limited Partners shall  have the  right to vote
      on the matters explicitly set forth in this Agreement.<PAGE>


                                      SECTION 7

                                  BOOKS AND RECORDS

        7.1. Books  and Records. The Partnership  shall keep  adequate books and
      records  at its  principal place  of business,  setting forth a  true and
      accurate  account  of all  business transactions  arising  out of  and in
      connection  with the  conduct  of the  Partnership.  Any Partner  or  its
      designated representative shall  have the right, at  any reasonable time,
      to  have access  to and inspect  and copy  the contents of  such books or
      records.  The  Partnership's  books  and records,  deposit  accounts  and
      stationary shall  be separately  maintained and the  Partnership's assets
      shall not be commingled with the assets of any other party.

        7.2. Annual Reports. Within  a reasonable period  after the end of  each
      Partnership Fiscal  Year, each Partner shall be  furnished with pertinent
      information  regarding the  Partnership  and its  activities during  such
      period.

        7.3. Tax Information.  Necessary tax  information shall be delivered  to
      each Partner  after the end of each Fiscal Year of the Partnership. Every
      effort shall be made to furnish such information within 75 days after the
      end of each Fiscal Year.

                                      SECTION 8

                           ADDITIONAL CAPITAL CONTRIBUTIONS

                        This Section left blank intentionally.

                                      SECTION 9

                                TRANSFER OF INTERESTS

                        This Section left blank intentionally.

                                      SECTION 10

                                 ADDITIONAL PARTNERS

        10.1.  Additional  Partners.   No  Person  shall  be  admitted  to   the
      Partnership as a General Partner or Limited Partner without the unanimous
      consent of the Partners. In the event the General Partner withdraws  from
      the  Partnership, whether  or  not in  violation  of this  Agreement,  no
      successor general  partner shall  be admitted  to the  Partnership unless
      such successor is  a corporation whose sole purpose, as  reflected in its
      articles of  incorporation,  is to  act  as the  general partner  of  the
      Partnership.  In  the event  of  the filing  of  any  petition under  any
      bankruptcy  law  by the  General Partner  or  any successor  thereto, the
      Partnership  shall  appoint  an  additional general  partner  whose  sole
      purpose, as  reflected in its articles of incorporation, is to act as the
      general partner of the Partnership.<PAGE>


        10.2.  Covenant  Not  to  Withdraw, Transfer,  or  Dissolve.  Except  as
      otherwise  permitted  by  this  Agreement,  the  General  Partner  hereby
      covenants and  agrees not to (a) withdraw or attempt to withdraw from the
      Partnership,  (b)  exercise  any power  under  the  Act  to dissolve  the
      Partnership, or  (c) Transfer all or  any portion of its  interest in the
      Partnership  as a General  Partner. Further,  the General  Partner hereby
      covenants and agrees  to continue to  carry out the  duties of a  General
      Partner  hereunder  until the  Partnership  is  dissolved and  liquidated
      pursuant to Section 11.

        10.3. Termination of Status as General Partner.

         (a) If  a  General Partner  ceases to  be  a Partner  for  any  reason
      hereunder, such Person  shall continue to be liable as  a Partner for all
      debts and obligations of the Partnership existing at the time such Person
      ceases to be a General Partner, regardless of whether, at such time, such
      debts  or  liabilities were  known or  unknown,  actual or  contingent. A
      Person shall not be liable as a General Partner for Partnership debts and
      obligations arising after such Person ceases to be a General Partner. Any
      debts, obligations, or liabilities  in damages to the Partnership  of any
      Person  who ceases to  be a General  Partner shall be  collectible by any
      legal means and the Partnership  is authorized, in addition to  any other
      remedies   at  law  or  in   equity,  to  apply   any  amounts  otherwise
      distributable or payable  by the  Partnership to such  Person to  satisfy
      such debts, obligations, or liabilities.

         (b) It  is  the intention  of the  Partners that  the Partnership  not
      dissolve as a result of the cessation of any General  Partner's status as
      a General Partner; provided, however, that if a  dissolution nevertheless
      occurs under  the  Act, the  Partnership's  property and  business  shall
      continue to be held and conducted in a new limited partnership under this
      Agreement with  any remaining General  Partners as general  partners, the
      Limited  Partners as limited  partners, and  any unadmitted  assignees of
      Interests as  Interest holders. Notwithstanding any provision  of the Act
      to the contrary, each Partner (including any successor to the Partnership
      interest  of a General  Partner) hereby (1)  waives any  rights that such
      Partner may have as a result of any such unintended dissolution to demand
      or  receive an  accounting  of the  Partnership  or any  distribution  in
      satisfaction of  such  Partner's  interest  in  the  Partnership  or  any
      security  for the  return  or distribution  thereof,  and (2)  agrees  to
      indemnify and hold harmless  the Partnership and the other  Partners from
      all cost, liability, and damage that any of such indemnified Partners may
      incur  (including,  without  limitation,  incremental  tax liability  and
      lawyer's fees  and expenses of enforcing  this indemnity) as  a result of
      any action inconsistent with part (1) of this sentence.

         (c) Notwithstanding any provision to the contrary herein, if a  Person
      ceases  to be  a General  Partner, the  remaining General  Partners shall
      refile the Certificate as if the Partnership had dissolved as a result of
      such cessation and a new limited partnership were formed pursuant to this
      Agreement  to  hold  the   assets  and  continue  the  business   of  the
      Partnership.

         (d) If at the time a Person ceases to be a General Partner such Person
      is also a Limited Partner or an Interest Holder with respect to Interests
      other than its interest  as a General Partner,  such cessation shall  not
      affect  such Person's rights and  obligations with respect  to such other
      Interests.<PAGE>


                                      SECTION 11

                              DISSOLUTION AND WINDING UP

        11.1. Liquidating  Events. The Partnership  shall dissolve and  commence
      winding  up  and liquidating  upon  the  first to  occur  of  any of  the
      following ("Liquidating Events"):

         (a)  July 16, 2037;

         (b)  The sale of all or substantially all of the Property;

         (c)  The  vote  by all  of  the  Partners to  dissolve,  wind  up, and
      liquidate the Partnership;

         (d)  The  happening  of  any  other  event  that  makes  it  unlawful,
      impossible, or impractical to  carry on the business of  the Partnership;
      or 

         (e)  Any event which causes there to be no General Partner.

      The Partners hereby agree that, notwithstanding any provision of the Act,
      the  Partnership  shall  not  dissolve  prior  to  the  occurrence  of  a
      Liquidating Event. Furthermore, if an event specified  in Section 11.1(e)
      occurs,  the Limited Partners may, within 90  days of the date such event
      occurs,  unanimously vote  to  elect  a  successor  General  Partner  and
      continue the  Partnership business, in  which case the  Partnership shall
      not dissolve. If  it is determined, by a court of competent jurisdiction,
      that  the Partnership  has dissolved  (i) prior  to the  occurrence of  a
      Liquidating Event, or (ii)  upon the occurrence of an event  specified in
      Section 11. 1 (e) following which the Limited Partners  elect a successor
      General Partner  pursuant to the  previous sentence, the  Partners hereby
      agree to continue the business of the Partnership without a winding up or
      liquidation.

        11.2. Winding  Up.  Upon the  occurrence  of  a Liquidating  Event,  the
      Partnership  shall continue  solely for  the purposes  of winding  up its
      affairs  in an orderly manner, liquidating its assets, and satisfying the
      claims of its  creditors and Partners. No  Partner shall take  any action
      that is  inconsistent with, or not  necessary to or appropriate  for, the
      winding up of the Partnership's business and affairs. The General Partner
      (or,  in the  event  there is  no remaining  General Partner,  any Person
      elected  by a  majority in  interest  of the  Limited Partners)  shall be
      responsible  for  overseeing  the  winding  up  and  dissolution  of  the
      Partnership and shall take full  account of the Partnership's liabilities
      and Property and the Partnership Property shall be liquidated as promptly
      as is consistent with obtaining the fair value  thereof, and the proceeds
      therefrom,  to  the extent  sufficient  therefor,  shall  be applied  and
      distributed in proportion to the positive Capital Account balances of the
      Partners.

        No General  Partner shall  receive any  additional compensation  for any
      services perf pursuant to this Section 11.<PAGE>


        11.3. Rights of Interest Holders. Except  as otherwise provided in  this
      Agreement, (a)  each Limited Partner shall  look solely to the  assets of
      the Partnership for the return of its Capital Contribution and shall have
      no right or power to demand or  receive property other than cash from the
      Partnership,  and (b)  no Limited  Partner shall  have priority  over any
      other  Limited Partner  as to  the return  of its  Capital Contributions,
      distributions, or allocations.

                                      SECTION 12

                                  POWER OF ATTORNEY

        12.1. General Partner  as Attorney-In-Fact. Each Limited Partner  hereby
      makes, constitutes, and appoints each  General Partner and each successor
      General Partner, with full power of substitution  and resubstitution, its
      true and lawful attorney-in-fact for it and in its name, place, and stead
      and  for its  use and  benefit, to  sign, execute,  certify, acknowledge,
      swear  to,  file,  and record  (a)  this  Agreement  and all  agreements,
      certificates, instruments, and other  documents amending or changing this
      Agreement as now or hereafter amended which the General  Partner may deem
      necessary,  desirable,  or  appropriate  including,  without  limitation,
      amendments or changes to reflect  (i) the exercise by an  General Partner
      of any power  granted to  him under this  Agreement; (ii) any  amendments
      adopted by the  Partners in accordance with the terms  of this Agreement;
      (iii)  the admission of any substituted Partner; and (iv) the disposition
      by  any  Partner  of  its  interest  in  the  Partnership;  and  (b)  any
      certificates, instruments, and documents as may be required by, or may be
      appropriate under, the laws of the State of Florida or any other state or
      jurisdiction in which the Partnership is doing or intends to do business.
      Each  Limited Partner authorizes each such attorney-in-fact to full power
      and authority  to do and perform  each and every act  or thing whatsoever
      requisite  or advisable to  be done in  connection with the  foregoing as
      fully as  such Limited Partner might  or could do  personally, and hereby
      ratifying  and  confirming  all  that  any  such  attorney-in-fact  shall
      lawfully do or cause to be done by virtue thereof or hereof.

        12.2. Nature  as Special Power. The  power of  attorney granted pursuant
      to this Section 12:

         (a) Is  a special power of  attorney coupled with  an interest and  is
      irrevocable;

         (b) May  be exercised  by  any such  attorney-in-fact by  listing  the
      Limited  Partners executing  any agreement,  certificate, instrument,  or
      other document  with the  single signature  of any  such attorney-in-fact
      acting as attorney-in-fact for such Limited Partners; and

         (c) Shall survive the death, disability, legal incapacity, bankruptcy,
      insolvency,  dissolution, or cessation of  existence of a Limited Partner
      of the whole or a portion of its interest in the Partnership, except that
      where the assignment is of such  Limited Partner's entire interest in the
      Partnership and the assignee, with the consent of the General Partner, is
      admitted  as a substituted Limited  Partner, the power  of attorney shall
      survive the delivery of such assignment for the sole purpose of  enabling
      any such attorney-in-fact to effect such substitution.<PAGE>


                                      SECTION 13

                                    MISCELLANEOUS

        13.1. Notices.  Any notice, payment,  demand, or communication  required
      or  permitted to be given by any  provision of this Agreement shall be in
      writing and shall be delivered personally to the Person or  to an officer
      of  the  Person  to whom  the  same  is  directed,  or sent  by  regular,
      registered, or certified  mail, addressed  as follows, or  to such  other
      address as such  Person may from  time to time  specify by notice to  the
      Partners:

        (a) If to the Partnership, to the address set forth in Section 1.3; and

        (b) If to a Partner, to the address set forth in Section 2.1 or 2.2.

      Any such notice shall be deemed  to be delivered, given, and received for
      all purposes as of the  date so delivered, if delivered personally  or if
      sent  by regular mail, or as of the  date on which the same was deposited
      in a regularly  maintained receptacle  for the deposit  of United  States
      mail,  if sent  by  registered or  certified  mail, postage  and  charges
      prepaid. Any Person may from time to time specify a  different address by
      notice to the Partnership and the Partners.

        13.2.  Binding Effect. Except  as otherwise  provided in this Agreement,
      every  covenant, term, and provision  of this Agreement  shall be binding
      upon and inure to the benefit of the Partners and their respective heirs,
      legatees, legal representatives, successors, transferees, and assigns.

        13.3.  Construction.  Every  covenant,  term,  and  provision  of   this
      Agreement  shall be  construed  according to  its  fair meaning  and  not
      strictly for or against any Partner.

        13.4. Time. Time is of the essence with respect to this Agreement.

        13.5. Headings. Sections and other headings contained in this  Agreement
      are  for  reference  purposes only  and  are  not  intended to  describe,
      interpret,  define, or  limit  the  scope,  extent,  or  intent  of  this
      Agreement or any provision hereof.

        13.6. Severability. Every provision of this  Agreement is intended to be
      severable. If  any term or provision hereof is illegal or invalid for any
      reason  whatsoever, such  illegality or invalidity  shall not  affect the
      validity or legality of the remainder of this Agreement.

        13.7. Incorporation  by Reference.  Every exhibit,  schedule, and  other
      appendix  attached to  this Agreement  and referred  to herein  is hereby
      incorporated in this Agreement by reference.

        13.8. Further  Action. Each  Partner, upon  the request  of any  General
      Partner, agrees to perform all further acts and execute, acknowledge, and
      deliver any documents which may be reasonably necessary, appropriate,  or
      desirable to carry out the provisions of this Agreement.

        13.9.  Variation of  Pronouns. All  pronouns and any  variations thereof
      shall be deemed to  refer to masculine, feminine, or neuter, singular, or
      plural, as the identity of the Person or Persons may require.<PAGE>


        13.10. Governing Law. The  laws of the State of Florida shall govern the
      validity  of this  Agreement,  the construction  of  its terms,  and  the
      interpretation of the rights and duties of the Partners.

        13.11. Waiver of Action for Partition.  Each of the Partners irrevocably
      waives any  right that it may  have to maintain any  action for partition
      with respect to any of the Partnership Property.

        13.12.  Counterpart Execution.  This Agreement  may be  executed in  any
      number of counterparts with the same effect as if all of the Partners had
      signed the  same document. All  counterparts shall be  construed together
      and shall constitute one agreement.

        13.13. Sole  and Absolute  Discretion. Except as  otherwise provided  in
      this Agreement, all  actions which any  General Partner may take  and all
      determinations  which any  General  Partner  may  make pursuant  to  this
      Agreement may  be taken and made  at the sole and  absolute discretion of
      such General Partner.

        13.14. Special Restrictions.  So long as the Partnership's mortgage loan
      from  Nomura  Asset Capital  Corporation  ("Nomura")  (together with  any
      assignment or  renewal thereof,  the "Nomura Loan")  remains outstanding,
      without  the prior written consent of Nomura  (or any successor holder of
      the Nomura Loan), the Partnership shall not:

         (a)  Dissolve, merge,  liquidate or  otherwise sell or dispose  of its
      assets (other than in the ordinary course of the Partnership's day-to-day
      operations);

         (b)  Incur  any  indebtedness  outside  the  ordinary  course  of  the
      Partnership's day-to-day operations,

         (c)  Permit any transfer,  directly or indirectly, of  any interest in
      the  Partnership  such that  the transferee  owns,  as a  result  of such
      transfer, a greater than 49 % interest in the Partnership, or

         (d) Amend the Partnership Agreement.

         (e) Upon the admission of an additional or successor general  partner,
      the Partnership shall deliver  an acceptable non-consolidation opinion to
      the holder of the Nomura Loan.<PAGE>


        IN  WITNESS WHEREOF,  the parties  have  entered  into this  Amended and
      Restated  Agreement of  Limited Partnership  as of  the date  first above
      written.

             GENERAL PARTNER:

             SUMMERBREEZE, INC., 
             a Florida Corporation

             By:  /s/Joseph M. Williams
                  -------------------------------------
                  Joseph M. Williams, President

             WITHDRAWING GENERAL PARTNER:

             CUMBERLAND REAL ESTATE
             HOLDINGS, INC., a Florida corporation


             By:   /s/Joseph M. Williams
                   -------------------------------------
                   Joseph M. Williams, President

             ORIGINAL LIMITED PARTNER:

                   /s/Francis M. Williams
                  -------------------------------------
                  FRANCIS M. WILLIAMS

             ADDITIONAL LIMITED PARTNER:

             KIMMINS CORP., a Florida corporation

             By:   /s/Francis M. Williams
                   -------------------------------------
                   Francis M. Williams, President<PAGE>


                                      SCHEDULE A


      <TABLE>
                             PARTNERSHIP CAPITAL ACCOUNTS
                             FOR SUMMERBREEZE APARTMENTS
      <CAPTION>
                                                         Francis
                                  CREH        CREH       Williams      Other
               Name of           General    Limited      Limited      Limited
             Partnership         Partner    Partner      Partner      Partner
      <S>                     <C>          <C>       <C>             <C>
      Summerbreeze Apartments:                       
      ------------------------
      Original capital                               
       contribution           $      1.00  $    0.00 $    39,943.24  $     0.00
      Losses to                                      
       December 31, 1996       (38,772.63)      0.00  (3,838,393.01)       0.00
      Losses for nine                                
       months ending                                 
       September 30, 1997       (1,746.17)      0.00    (172,870.53)       0.00
                              -----------  --------- --------------- ---------
      Total capital                                  
       accounts               $(40,517.80) $    0.00 $(3,971,320.30) $     0.00
                              ===========  ========= =============== =========
      /TABLE
<PAGE>


                                      EXHIBIT A

                                  LEGAL DESCRIPTION

      All of Parcel "A" of SUMMERBREEZE, according to the Plat thereof recorded
      in  Plat Book  132, Page  36, of  the Public  Records of  Broward County,
      Florida.<PAGE>


                 AMENDMENT TO THE CERTIFICATE OF LIMITED PARTNERSHIP
                           OF SUMMERBREEZE APARTMENTS, LTD.

        THIS AMENDMENT TO THE CERTIFICATE OF LIMITED PARTNERSHIP is
      made  this 22nd  day of  October 1997, by  Summerbreeze, Inc.,  a Florida
      corporation,  which   is  the   sole  general  partner   of  Summerbreeze
      Apartments,  Ltd.,  a  Florida limited  partnership  ("Partnership"). The
      undersigned certifies as follows:

        1. The  name of  the limited  partnership  is Summerbreeze  Apartments,
      Ltd.

        2. The date of the filing  of the Partnership's certificate  of limited
      partnership was July 15, 1987.

        3. Cumberland  Real Estate Holdings,  Inc., has  withdrawn as  the sole
      general  partner of  the  Partnership and  Summerbreeze,  Inc., has  been
      admitted  to the  Partnership  as the  new sole  general  partner of  the
      Partnership.

        4. This  Certificate  of  Amendment  to  the   Certificate  of  Limited
      Partnership  is duly executed and made in accordance with Section 620.109
      of the Florida Statutes.

             SUMMERBREEZE, INC., 
             a Florida corporation, general partner


             By:  /s/Joseph M. Williams
                  -----------------------------
                  Joseph M. Williams, President<PAGE>


                                                                   EXHIBIT 10.2

                                                                Option No. ____

                               STOCK OPTION AGREEMENT 

        AGREEMENT made as of  this            day of __________________ 19__, by
      and  between KIMMINS CORP., a Delaware corporation, having its office and
      principal place of business  located at 1501 Second Avenue,  East, Tampa,
      Florida 33605 (the "Company"); and Name                                  
      Address                                                                  
        INITIALS."

                                    W I T N E S S E T H  :

             WHEREAS, on _________________________________ (Date), the Board of
      Directors of the  Company authorized the grant to  Initials  of an option
      to purchase an aggregate of __________________________ (Number of Shares)
      shares of the authorized but unissued Common  Stock of Kimmins Corp. (the
      "Company"),  $.001  par  value  (the  "Common  Stock"),  pursuant to  the
      Company's 1987 Stock Option Plan (the "Plan"), conditioned upon Initials'
      acceptance  thereof upon  the  terms and  conditions  set forth  in  this
      Agreement; and

        WHEREAS, Initials  desires  to acquire  said  option  on the  terms  and
      conditions set forth in this Agreement;

        NOW,  THEREFORE, and in consideration of the foregoing  and of the terms
      and conditions herein contained, the parties hereto agree as follows:

        21.  The Company  hereby grants  to Initials,  as a  matter of  separate
             agreement and not in lieu  of salary or any  other compensation for
             services, the right and  option to purchase all  or any part  of an
             aggregate  of shares of  Common Stock  (the "Option")  on the terms
             and conditions set forth herein.

        2. This  option shall  be  deemed to  be  a non-qualified  stock option
           within the meaning of the Internal Revenue Code of 1986.

        3. The purchase  price of  each share  of Common Stock  subject to  the
           Option ("Option Shares") shall  be $                     (Price) per
           share.

        4. (a) The Option shall  be exercisable during the ten (10) year period
           commencing on the date hereof  ("Date of Grant") and  terminating at
           the  close of business on                                (Day before
           original date  in paragraph  1) (the  "Exercise Period");  provided,
           however, that  the Option shall  only be  exercisable in  cumulative
           installments, during the Exercise  Period, as follows: 20 percent of
           the Option Shares may be  purchased commencing on the Date of Grant,
           an  additional 20  percent  of the  Option  Shares may  be purchased
           commencing  on  the first  anniversary  of  the  Date  of Grant;  an
           additional  20  percent  of  the  Option  Shares  may  be  purchased
           commencing on  the  second anniversary  of  the  Date of  Grant;  an
           additional  20  percent  of  the  Option  Shares  may  be  purchased
           commencing on the third  anniversary of the Date  of Grant; and  the
           final 20  percent of the Option  Shares may  be purchased commencing
           on the fourth anniversary of the Date of Grant.<PAGE>


        4. (b) In the event of Initials' death, the Option will fully vest  and
           be exercisable  immediately by  Initials' executor or  administrator
           or  by  Initials' distributee  to  whom  the  Option  may have  been
           transferred  by will  or  by the  laws  of descent  and distribution
           within  one year  after  such death  (subject  to the  provisions of
           Section 5 hereof).

        5. Notwithstanding  anything to the  contrary herein contained, neither
           this option nor any rights represented  hereby shall be transferable
           or assignable by  Initials otherwise than by will  or by the laws of
           descent  and distribution,  and  this  option shall  be  exercisable
           during Initials'  lifetime only  by  Initials,  and any  attempt  to
           transfer or assign this option  in violation of the  foregoing shall
           be void and  of no  force or effect.  No transfer of  the Option  by
           Initials  by will or  by laws  of descent and  distribution shall be
           effective to bind  the Company unless  the Company  shall have  been
           furnished with  written notice thereof  and a copy  of the  will and
           such other evidence as the  Company may deem necessary  to establish
           the validity  of the transfer and  the acceptance  by the transferee
           of the terms and conditions of the Option.

        6. The purchase price of  the Option  Shares shall be  paid in full  in
           cash  at the  time of  exercise, as  hereinafter provided.  Initials
           shall not have  any of the rights  of a shareholder with  respect to
           the  Option Shares until such shares  have been issued after the due
           exercise of the  Option. It shall  be a condition to  the obligation
           of the Company to  issue or transfer shares of Common Stock upon the
           exercise of the  Option that Initials pay  to the Company,  upon its
           demand,  such amount  as may  be requested  by the  Company for  the
           purposes of satisfying its  liability to withhold federal,  state or
           local income  or other taxes  incurred by reason of  the exercise of
           the Option or the transfer of such shares upon such exercise.

        7. In  the event  of  a  stock  dividend, subdivision,  combination  or
           reclassification  of shares,  or any other  change in  the corporate
           structure or  shares of  the Company,  the Company  shall make  such
           reasonable  adjustment  as it  may  deem appropriate  in the  number
           shares  covered  by   the  Option   and  upon  the   dissolution  or
           liquidation of  the Company, or  upon any  merger, consolidation  or
           other  form of reorganization, the Company  may make such adjustment
           with respect  to the Option  or take such  other action as it  deems
           necessary or  appropriate to  reflect, or  in anticipation  of, such
           dissolution,   liquidation,  merger   or  consolidation,  including,
           without  limitation,  the   substitution  of  new  options   or  the
           termination of the Option.

        8. The Company hereby  represents and warrants to Initials that (a) the
           Company, by  appropriate and all required action, is duly authorized
           to enter into  this Agreement and consummate all of the transactions
           contemplated hereunder; and  (b) the Option Shares, when  issued and
           delivered by  the Company to Initials  in accordance  with the terms
           and conditions hereof,  will be duly  and validly  issued and  fully
           paid and non-assessable.<PAGE>


        9. Anything   in  this  Agreement   to  the  contrary  notwithstanding,
           Initials  hereby agrees  that  he shall  not  sell, transfer  by any
           means or  otherwise dispose  of the  Option Shares  acquired by  him
           without  registration under the Securities act  of 1933 (the "Act"),
           or in  the event  that they  are not  so registered,  unless (a)  an
           exemption from  the Act  is available  thereunder, and  (b) Initials
           has furnished the  Company with notice of such proposed transfer and
           the Company's legal counsel, in  its reasonable opinion, shall  deem
           such proposed transfer to be so exempt. 

        10.  Initials hereby acknowledges that:

         ( a ) He must bear the economic risk of the investment proposed herein
               for  an indefinite period of time because the Option Shares will
               not have been registered under the Act and cannot be sold by him
               unless  they  are  registered  under  the  Act  or  an exemption
               therefrom is available thereunder.

         ( b ) He will have made available to him,  both the opportunity to ask
               questions of and receive answers from the officers and directors
               of the Company and  all persons acting on its  behalf concerning
               the terms and  conditions of  this Agreement and  to obtain  any
               information concerning the Company or its business to the extent
               the  Company possesses or  may possess  such information  or can
               acquire it  without unreasonable effort or  expense necessary to
               verify   the  accuracy  of  the  information  obtained  pursuant
               thereto.

         ( c ) The  Company shall place stop transfer  orders with its transfer
               agent against the transfer  of the Option Shares in  the absence
               of  registration  under  the   Act  or  an  exemption  therefrom
               thereunder as provided herein.

         ( d ) The  certificates evidencing  the Option  Shares shall  bear the
               following legends substantially, as follows:

           "The  shares  represented   by  this  certificate  have  not   been
           registered under the Securities Act of  1933. The shares may not be
           sold  or transferred  in the  absence  of  such registration  or an
           exemption therefrom under said Act."

           "The  shares represented  by this  certificate have  been  acquired
           pursuant to an option agreement dated as of                       
                   (Original Date),  a  copy of  which  is  on file  with  the
           Company, and may not be transferred,  pledged or disposed of except
           in accordance with the terms and conditions thereof."<PAGE>


        11.  Subject to the terms and conditions  of this Agreement, the  Option
             may be exercised by written notice to the Company at its  principal
             place  of  business.  Such  notice  shall  state  the  election  to
             exercise the Option and  the number of Option  Shares in respect to
             which it is  being exercised and shall be  signed by the person  or
             persons so  exercising the Option. Such notice shall be accompanied
             by payment  of the full  purchase price of  the Option Shares,  and
             the Company  shall issue a  certificate or certificates  evidencing
             the Option  Shares  as soon  as  practicable  after the  notice  is
             received. Payment of the purchase  price shall be made  in cash (by
             certified or cashier's check payable to  the order of the Company),
             or in shares of  Commons Stock valued at  the fair market  value at
             the  time of exercise  (or any  combination of  the foregoing). The
             certificate or certificates  evidencing the Option Shares shall  be
             registered in the name  of the person or  persons so exercising the
             Option.

        12.  No amendment  or modification  of the  Plan shall  be construed  as
             disqualifying  the Option  granted  under this  Agreement.  In  the
             event  of a  conflict between  the provisions  of the Plan  and the
             provisions of this Agreement, the provisions  of the Plan shall  in
             all respects be controlling.

        13.  All notices,  requests,  deliveries,  payments, demands  and  other
             communications  which are required  or permitted  to be given under
             this Agreement  shall be in writing  and shall  be either delivered
             personally or sent by registered or certified mail, return  receipt
             requested,  postage prepaid  to  the parties  at  their  respective
             addresses set  forth herein,  or to  such other  address as  either
             shall  have specified by notice in writing to the other. Same shall
             be deemed duly  given hereunder when so delivered or mailed, as the
             case may be.

        14.  The waiver  by any  party hereto  of a  breach of any  provision of
             this agreement  shall not operate  or be construed  as a waiver  of
             any other or subsequent breach.

        15.  This  Agreement,  as  controlled  by the  provisions  of  the Plan,
             constitutes the entire  agreement between the parties with  respect
             to the subject matter hereof.

        16.  This Agreement shall  inure to the  benefit of and be  binding upon
             the parties hereto and to the  extent not prohibited herein,  their
             respective heirs, successors, assigns and representatives.  Nothing
             in this Agreement, expressed or implied,  is intended to confer  on
             any  person other than  the parties  hereto and  as provided above,
             their  respective heirs,  successors, assigns  and  representatives
             any rights, remedies, obligations or liabilities.<PAGE>


        17.  This  Agreement shall  be governed  by and construed  in accordance
             with the laws of the State of Delaware.




        IN WITNESS WHEREOF, the parties hereto have signed this Agreement as  of
      the day and year first above written.


               KIMMINS CORP.


               By:  /s/Initials
                    ----------------------------------
                    Initials


                    /s/Francis M. Williams
                    -----------------------------------
                    Francis M. Williams<PAGE>