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<TEXT>

================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            ------------------------

                                   FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                       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 NUMBER: 1-13011

                              COMFORT SYSTEMS USA, INC.
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                   76-0526487
    (STATE OR OTHER JURISDICTION                      (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

                             777 POST OAK BOULEVARD
                                   SUITE 500
                              HOUSTON, TEXAS 77056
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       Registrant's telephone number, including area code: (713) 830-9600

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   Yes [X]  No  [ ]

     The number of shares outstanding of the issuer's common stock, as of August
10, 2000, was 37,129,747.

================================================================================
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                               INDEX TO FORM 10-Q
                      FOR THE QUARTER ENDED JUNE 30, 2000

                                                                            PAGE
                                                                            ----
Part I -- Financial Information
     Item 1 -- Financial Statements
          COMFORT SYSTEMS USA, INC.
                Consolidated Balance Sheets..............................      1
                Consolidated Statements of Operations....................      2
                Consolidated Statements of Stockholders' Equity..........      3
                Consolidated Statements of Cash Flows....................      4
                Condensed Notes to Consolidated Financial Statements.....      5
     Item 2 -- Management's Discussion and Analysis of Financial
                  Condition and Results of Operations....................     11
     Item 3 -- Quantitative and Qualitative Disclosures about Market
                  Risk...................................................     15
Part II -- Other Information
     Item 1 -- Legal Proceedings.........................................     16
     Item 2 -- Recent Sales of Unregistered Securities...................     16
     Item 4 -- Submission of Matters to a Vote of Security Holders.......     16
     Item 6 -- Exhibits and Reports on Form 8-K..........................     16
     Item 9 -- Changes and Disagreements with Accountants on
                  Accounting and Financial Disclosure....................     17
     Signature...........................................................     18
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                         DECEMBER 31,     JUNE 30,
                                             1999           2000
                                         ------------    -----------
                                                         (UNAUDITED)
               ASSETS
CURRENT ASSETS:
     Cash and cash equivalents.......      $  3,664       $  8,902
     Accounts receivable.............       314,599        354,922
          Less -- Allowance.........          5,568          6,661
                                           --------       --------
               Accounts receivable,
                  net................       309,031        348,261
     Other receivables...............         4,575          5,711
     Inventories.....................        20,907         20,581
     Prepaid expenses and other......        19,891         23,221
     Costs and estimated earnings in
      excess of billings.............        54,575         52,868
                                           --------       --------
               Total current assets..       412,643        459,544
PROPERTY AND EQUIPMENT, net..........        41,964         45,315
GOODWILL, less accumulated
  amortization of $20,665 and $26,997       474,529        468,179
OTHER NONCURRENT ASSETS..............        14,136          5,543
                                           --------       --------
               Total assets..........      $943,272       $978,581
                                           ========       ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Current maturities of long-term
      debt...........................      $  3,353       $    254
     Current maturities of notes to
      affiliates and former owners...        24,536         19,472
     Accounts payable................        96,032        114,727
     Accrued compensation and
      benefits.......................        36,187         35,807
     Billings in excess of costs and
      estimated earnings.............        52,170         69,929
     Other current liabilities.......        27,799         27,904
                                           --------       --------
               Total current
                  liabilities........       240,077        268,093
DEFERRED INCOME TAXES................         4,547          6,844
LONG-TERM DEBT, NET OF CURRENT
  MATURITIES.........................       225,471        246,119
NOTES TO AFFILIATES AND FORMER
  OWNERS, NET OF CURRENT MATURITIES..        52,473         36,637
OTHER LONG-TERM LIABILITIES..........         1,739          1,257
                                           --------       --------
               Total liabilities.....       524,307        558,950
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
     Preferred stock, $.01 par,
      5,000,000 shares authorized,
      none issued and outstanding....       --              --
     Common stock, $.01 par,
      102,969,912 shares authorized,
      39,258,913 shares issued.......           393            393
     Treasury stock, at cost,
      1,695,524 and 2,129,166 shares,
      respectively...................       (11,978)       (14,273)
     Additional paid-in capital......       342,655        342,513
     Retained earnings...............        87,895         90,998
                                           --------       --------
               Total stockholders'
                  equity.............       418,965        419,631
                                           --------       --------
               Total liabilities and
                  stockholders'
                  equity.............      $943,272       $978,581
                                           ========       ========

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

                                       1
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED             SIX MONTHS ENDED
                                                JUNE 30,                      JUNE 30,
                                         -----------------------       -----------------------
                                           1999           2000           1999           2000
                                         --------       --------       --------       --------
<S>                                      <C>            <C>            <C>            <C>
REVENUES.............................    $341,493       $404,970       $633,419       $767,536
COST OF SERVICES.....................     265,254        334,332        494,002        626,031
                                         --------       --------       --------       --------
          Gross profit...............      76,239         70,638        139,417        141,505
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES...........................      43,333         56,687         88,191        111,515
GOODWILL AMORTIZATION................       2,883          3,149          5,667          6,332
                                         --------       --------       --------       --------
          Operating income...........      30,023         10,802         45,559         23,658
OTHER INCOME (EXPENSE):
     Interest income.................         225            207            392            378
     Interest expense................      (4,628)        (6,681)        (8,816)       (12,778)
     Other...........................          61            (12)           103             90
                                         --------       --------       --------       --------
          Other income (expense).....      (4,342)        (6,486)        (8,321)       (12,310)
                                         --------       --------       --------       --------
REDUCTIONS IN NON-OPERATING
  ASSETS AND LIABILITIES, NET........      --             (5,190)         --            (5,190)
                                         --------       --------       --------       --------
INCOME (LOSS) BEFORE INCOME TAXES....      25,681           (874)        37,238          6,158
PROVISION FOR INCOME TAXES...........      11,036             31         16,029          3,055
                                         --------       --------       --------       --------
NET INCOME (LOSS)....................    $ 14,645       $   (905)      $ 21,209       $  3,103
                                         ========       ========       ========       ========
NET INCOME (LOSS) PER SHARE:
     Basic...........................    $   0.38       $  (0.02)      $   0.55       $   0.08
                                         ========       ========       ========       ========
     Diluted.........................    $   0.37       $  (0.02)      $   0.54       $   0.08
                                         ========       ========       ========       ========
SHARES USED IN COMPUTING NET INCOME
  (LOSS) PER SHARE:
     Basic...........................      38,734         37,496         38,524         37,528
                                         ========       ========       ========       ========
     Diluted.........................      40,644         37,496         40,725         37,538
                                         ========       ========       ========       ========
</TABLE>

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

                                       2
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                            COMMON STOCK          TREASURY STOCK       ADDITIONAL                   TOTAL
                                         -------------------   ---------------------    PAID-IN     RETAINED    STOCKHOLDERS'
                                           SHARES     AMOUNT     SHARES      AMOUNT     CAPITAL     EARNINGS        EQUITY
                                         ----------   ------   ----------   --------   ----------   ---------   --------------
<S>                                      <C>          <C>      <C>          <C>        <C>          <C>         <C>
BALANCE AT DECEMBER 31, 1998.........    38,141,180    $381          --     $   --     $  333,978   $  45,573     $379,932
  Issuance of Common Stock:
    Acquisition of purchased
      companies......................       958,533      10       125,197        885        6,164        --          7,059
    Issuance of Employee Stock
      Purchase Plan shares...........       142,276       2          --         --          2,036        --          2,038
    Issuance of shares for options
      exercised......................        16,924     --           --         --            477        --            477
  Common Stock repurchases...........          --       --     (1,820,721)   (12,863)       --           --        (12,863)
  Net income.........................          --       --           --         --          --         42,322       42,322
                                         ----------    ----    ----------   --------    --------    ---------     ---------
BALANCE AT DECEMBER 31, 1999.........    39,258,913     393    (1,695,524)   (11,978)    342,655       87,895      418,965
  Issuance of Common Stock:
    Issuance of Employee Stock
      Purchase Plan shares
      (unaudited)....................          --       --        127,867        904        (142)        --            762
  Common Stock repurchases
    (unaudited)......................          --       --       (175,513)    (1,224)       --           --         (1,224)
  Shares exchanged in repayment of
    notes
    receivable (unaudited)...........          --       --       (385,996)    (1,975)       --           --         (1,975)
  Net income (unaudited).............          --       --           --         --          --          3,103        3,103
                                         ----------    ----    ----------   --------    --------    ---------     ---------
BALANCE AT JUNE 30, 2000
  (unaudited)........................    39,258,913    $393    (2,129,166)  $(14,273)   $342,513      $90,998     $419,631
                                         ==========    ====    ==========   ========    ========    =========     =========
</TABLE>

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

                                       3
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

                                             SIX MONTHS ENDED
                                                 JUNE 30,
                                         ------------------------
                                           1999           2000
                                         ---------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...........................    $  21,209      $   3,103
Adjustments to reconcile net income
  to net cash provided by operating
  activities  --
     Depreciation and amortization
      expense........................       11,033         12,191
     Bad debt expense................          315          1,875
     Deferred tax expense
      (benefit)......................         (542)           203
     Gain on sale of property and
      equipment......................         (190)          (156)
     Reduction in non-operating
      assets and liabilities, net....       --              5,190
     Changes in operating assets and
      liabilities, net of effects of
      acquisitions of purchased
      companies  --
          (Increase) decrease in  --
               Receivables, net......      (32,480)       (40,570)
               Inventories...........       (2,219)           194
               Prepaid expenses and
                   other current
                   assets............        2,508          4,649
               Costs and estimated
                   earnings in excess
                   of billings.......       (6,375)         1,898
               Other noncurrent
                   assets............        1,376            927
          Increase (decrease) in  --
               Accounts payable and
                   accrued
                   liabilities.......       10,647         10,913
               Billings in excess of
                   costs and
                   estimated
                   earnings..........         (573)        17,605
               Other, net............         (188)          (524)
                                         ---------      ---------
          Net cash provided by
             operating activities....        4,521         17,498
                                         ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and
      equipment......................       (7,692)        (9,430)
     Proceeds from sales of property
      and equipment..................          862            485
     Cash paid for purchased
      companies, net of cash
      acquired.......................      (17,202)         --
     Other...........................         (500)         --
                                         ---------      ---------
          Net cash used in investing
             activities..............      (24,532)        (8,945)
                                         ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on long-term debt......     (100,063)      (148,519)
     Borrowings of long-term debt....      116,582        145,666
     Proceeds from issuance of common
      stock..........................          913            762
     Repurchases of common stock.....       --             (1,224)
                                         ---------      ---------
          Net cash provided by (used
             in) financing
             activities..............       17,432         (3,315)
                                         ---------      ---------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS...................       (2,579)         5,238
CASH AND CASH EQUIVALENTS, beginning
  of period..........................        6,985          3,664
                                         ---------      ---------
CASH AND CASH EQUIVALENTS, end of
  period.............................    $   4,406      $   8,902
                                         =========      =========

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

                                       4

<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 2000
                                  (UNAUDITED)

1.  BUSINESS AND ORGANIZATION:

     Comfort Systems USA, Inc., a Delaware corporation ("Comfort Systems" and
collectively with its subsidiaries, the "Company"), is a leading national
provider of comprehensive heating, ventilation and air conditioning ("HVAC")
installation, maintenance, repair and replacement services. The Company operates
primarily in the commercial and industrial HVAC markets, and performs most of
its services within manufacturing plants, office buildings, retail centers,
apartment complexes, and healthcare, education and government facilities. In
addition to standard HVAC services, the Company provides specialized
applications such as process cooling, control systems, electronic monitoring and
process piping. Certain locations also perform related services such as
electrical and plumbing.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

     These interim statements should be read in conjunction with the historical
Consolidated Financial Statements and related notes of Comfort Systems included
in the Annual Report on Form 10-K as filed with the Securities and Exchange
Commission for the year ended December 31, 1999 (the "Form 10-K").

     There were no significant changes in the accounting policies of the Company
during the periods presented. For a description of the significant accounting
policies of the Company, refer to Note 2 of Notes to Consolidated Financial
Statements of Comfort Systems included in the Form 10-K.

     The accompanying unaudited consolidated financial statements were prepared
using generally accepted accounting principles for interim financial information
and the instructions to Form 10-Q and applicable rules of Regulation S-X.
Accordingly, these financial statements do not include all information or
footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with the Form 10-K. The
Company believes all adjustments necessary for a fair presentation of these
interim statements have been included and are of a normal and recurring nature.
The results of operations for interim periods are not necessarily indicative of
the results for the fiscal year.

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

CASH FLOW INFORMATION

     Cash paid for interest for the six months ended June 30, 1999 and 2000 was
approximately $7.3 million and $11.9 million, respectively. Cash paid for income
taxes for the six months ended June 30, 1999 and 2000 was approximately
$14.8 million and $10.8 million, respectively.

3.  REDUCTIONS IN NON-OPERATING ASSETS AND LIABILITIES, NET

     During the quarter ended June 30, 2000, the Company recorded a non-cash
charge of approximately $5.2 million primarily related to the impairment of
certain non-operating assets. These assets primarily related to notes receivable
from former business owners. In addition, the Company recorded an impairment of
approximately $0.8 million to its minority investment in two entities associated
with the distribution and implementation of high-end engineering and design
software. The Company also recorded a gain of approximately $0.6 million on the
reduction of its subordinated note payable to a former owner in connection with
the settlement of claims with this former owner.

                                       5
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         JUNE 30, 2000 -- (CONTINUED)

4.  BUSINESS COMBINATIONS:

     During fiscal 1999, the Company acquired 25 businesses which were accounted
for as purchases. These companies provide HVAC and related services. The
aggregate consideration paid in these transactions was $38.0 million in cash,
1,151,907 shares of the Company's common stock ("Common Stock") with a fair
value at the dates of acquisition totaling $8.5 million, $2.2 million in the
form of convertible subordinated notes and $21.3 million in the form of
subordinated notes. In addition, the Company received 68,177 shares from a
former owner related to a prior year acquisition. Subsequent to the issuance of
certain of the convertible subordinated notes, the Company entered into
agreements with certain of the convertible noteholders to modify the terms of
$2.1 million of these notes in order to eliminate the provisions relating to
convertibility into Common Stock. The remaining convertible subordinated notes
are convertible in 2000 into 5,133 shares of Common Stock.

     There were no acquisitions during the six months ended June 30, 2000.

     The accompanying balance sheets include allocations of the respective
purchase prices to the assets acquired and liabilities assumed based on
preliminary estimates of fair value and are subject to final adjustment.

     The unaudited pro forma data presented below consists of the income
statement data presented in these consolidated financial statements plus income
statement data for the purchased companies as if the acquisitions were effective
on January 1, 1999 through the respective dates of acquisitions (in thousands,
except per share data):

                                         SIX MONTHS ENDED
                                          JUNE 30, 1999
                                         ----------------
Revenues.............................        $680,269
Net income...........................        $ 21,998
Net income per share -- diluted.....         $   0.55
Shares used in computing net income
  per share -- diluted..............           41,466

     Pro forma adjustments included in the preceding table regarding the
purchased companies primarily relate to (a) certain reductions in salaries and
benefits to the former owners of the purchased companies which the former owners
agreed would take effect as of the acquisition date, (b) amortization of
goodwill related to the purchased companies, (c) interest expense on borrowings
of $38.0 million related to the purchase price of the purchased companies
acquired during 1999 and (d) interest expense related to subordinated notes
issued in connection with the acquisition of certain purchased companies. In
addition, an incremental tax provision has been recorded as if all applicable
purchased companies had been subject to federal and state income taxes.

     The pro forma results presented above are not necessarily indicative of
actual results which might have occurred had the operations and management teams
of the Company and the purchased companies been combined at the beginning of the
period presented.

                                       6
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         JUNE 30, 2000 -- (CONTINUED)

5. LONG-TERM DEBT OBLIGATIONS:

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

                                         DECEMBER 31,         JUNE 30,
                                             1999               2000
                                         ------------       ------------
                                                            (UNAUDITED)

Revolving credit facility............      $225,215           $246,000
Notes to affiliates and former
  owners.............................        77,009             56,109
Other................................         3,609                373
                                           --------           --------
Total debt...........................       305,833            302,482
Less: current maturities.............        27,889             19,726
                                           --------           --------
                                           $277,944           $282,756
                                           ========           ========

REVOLVING CREDIT FACILITY

     The Company has a revolving credit facility ("Credit Facility") provided by
Bank One, Texas, N.A. and other banks (the "Bank Group"). The Credit Facility
provides the Company with a revolving line of credit of up to $300 million
secured by accounts receivable, inventory and the shares of capital stock of the
Company's subsidiaries. The Credit Facility expires on November 1, 2001, at
which time all amounts outstanding under the Credit Facility are due. The
Company currently has a choice of two interest rate options when borrowing under
the Credit Facility. Under one option, the interest rate is determined based on
the higher of the Federal Funds Rate plus 0.5% or the bank's prime rate. An
additional margin of 0.25% to 1.75% is then added to the higher of these two
rates. Under the other interest rate option, borrowings bear interest based on
designated short-term Eurodollar rates (which generally approximate LIBOR) plus
1.25% to 3.00%. The additional margin for both options depends on the ratio of
the Company's debt to EBITDA (as defined). Commitment fees of 0.25% to 0.5% per
annum, also depending on the ratio of debt to EBITDA, are payable on the unused
portion of the facility.

     The Credit Facility prohibits payment of dividends by the Company, limits
certain non-Bank Group debt, and restricts outlays of cash by the Company
relating to certain investments, capital expenditures, vehicle leases,
acquisitions and principal repayments of subordinate debt. The Credit Facility
also provides for the maintenance of certain levels of shareholder equity and
EBITDA, and for the maintenance of certain ratios of the Company's EBITDA to
interest expense and debt to EBITDA. Under the terms of the Credit Facility that
were in effect as of June 30, 2000, the Company was in violation of the ratio
requirements of senior debt to EBITDA and subordinate debt repayments, in both
cases by small amounts. The Bank Group has waived these violations. In
connection with these waivers, the Bank Group has agreed to reduce the required
ratios of EBITDA to interest expense and debt to EBITDA through the maturity of
the Credit Facility.

     As of June 30, 2000, the Company had borrowed $246.0 million under the
Credit Facility at an average interest rate of approximately 8.3% per annum for
the first six months of 2000. The Credit Facility's interest rate terms as
summarized above are effective as of August 11, 2000 and will result in an
increase of approximately 0.50% in the additional margin and related costs the
Company pays in excess of the indicated market interest rate in either of the
interest rate options. The Company's unused committed borrowing capacity under
the Credit Facility was $51.6 million at June 30, 2000. As of August 10, 2000,
$257.0 million was outstanding under this facility.

                                       7
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         JUNE 30, 2000 -- (CONTINUED)

INTENDED REFINANCINGS

     Earlier this year, the Company intended to refinance a portion of its
variable-rate debt under the Credit Facility with fixed-rate private placement
debt. In anticipation of this transaction, the Company entered into interest
rate lock agreements to hedge against increases in market interest rates. In the
second quarter, the Company elected not to complete this refinancing and
terminated the interest lock agreements at a nominal gain. In connection with
this refinancing, the Company also had intended to decrease the size of the
Credit Facility. As disclosed by the Company in May, if this had occurred, the
Company would have recognized extraordinary charges of approximately $0.01 to
$0.02 per share for the write-off of a portion of the deferred issuance costs of
the Credit Facility. Because the Company no longer intends to reduce the Credit
Facility, it no longer expects such charges will be necessary.

     The Company is considering steps to extend the maturity of, or otherwise
refinance, its borrowings under the Credit Facility. These amounts currently
mature in November 2001.

NOTES TO AFFILIATES AND FORMER OWNERS

     Subordinated notes were issued to former owners of certain purchased
companies as partial consideration of the acquisition purchase price and had an
outstanding balance of $56.1 million as of June 30, 2000. Of these notes,
$55.8 million bear interest, payable quarterly, at a weighted average interest
rate of 5.81% and $1.4 million of these notes are convertible by the holders
into shares of the Company's Common Stock at a weighted average price of $25.40
per share. The remaining notes in the amount of $0.3 million are non-interest
bearing and require principal payments in equal annual installments in 2001,
2002 and 2003. The terms of the convertible subordinated notes require
$0.2 million of principal payments in 2000, $0.6 million of principal payments
in 2001 and $0.6 million of principal payments in 2002. The terms of the
nonconvertible interest bearing subordinated notes require $5.3 million of
principal payments in 2000, $26.9 million of principal payments in 2001, $21.3
million of principal payments in 2002 and $0.9 million of principal payments in
2003.

     Under the current terms of the Credit Facility, the Company may be
restricted from making scheduled repayments of subordinate debt beginning in
October 2000. If this occurs, the Company has at least one year to regain
compliance with the terms of the subordinate debt. The Company intends to
negotiate the disposition of this issue in connection with pursuing an extension
of the maturity of borrowings outstanding under the Credit Facility as discussed
above.

6. COMMITMENTS AND CONTINGENCIES:

CLAIMS AND LAWSUITS

     The Company is party to litigation in the ordinary course of business.
There are currently no pending legal proceedings that, in management's opinion,
would have a material adverse effect on the Company's operating results or
financial condition. The Company maintains various insurance coverages in order
to limit financial risk associated with certain claims. The Company has provided
accruals for probable losses and legal fees associated with certain of these
actions in the accompanying consolidated financial statements.

     A wholly-owned insurance company subsidiary reinsures a portion of the risk
associated with surety bonds issued by a third party insurance company. Because
no claims have been made against these financial instruments in the past,
management does not expect these instruments will have a material effect on the
Company's consolidated financial statements.

                                       8
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         JUNE 30, 2000 -- (CONTINUED)

7.  STOCKHOLDERS' EQUITY:

TREASURY STOCK

     On October 5, 1999, the Company announced that its Board of Directors had
approved a share repurchase program authorizing the Company to buy up to 4.0
million shares of its Common Stock. During 1999, the Company purchased
approximately 1.8 million shares at a cost of approximately $12.9 million.
During the first six months of 2000, the Company purchased approximately 0.2
million shares at a cost of approximately $1.2 million. The Company does not
expect significant further share repurchases under this program for the
foreseeable future.

RESTRICTED COMMON STOCK

     In March 1997, Notre Capital Ventures II, L.L.C. exchanged 2,742,912 shares
of Common Stock for an equal number of shares of restricted voting common stock
("Restricted Voting Common Stock"). The holders of Restricted Voting Common
Stock are entitled to elect one member of the Company's Board of Directors and
0.55 of one vote for each share on all other matters on which they are entitled
to vote. Holders of Restricted Voting Common Stock are not entitled to vote on
the election of any other directors.

     Each share of Restricted Voting Common Stock will automatically convert to
Common Stock on a share-for-share basis (i) in the event of a disposition of
such share of Restricted Voting Common Stock by the holder thereof (other than a
distribution which is a distribution by a holder to its partners or beneficial
owners, or a transfer to a related party of such holders (as defined in Sections
267, 707, 318 and/or 4946 of the Internal Revenue Code of 1986, as amended)),
(ii) in the event any person acquires beneficial ownership of 15% or more of the
total number of outstanding shares of Common Stock of the Company, or (iii) in
the event any person offers to acquire 15% or more of the total number of
outstanding shares of Common Stock of the Company. After July 1, 1998, the Board
of Directors may elect to convert any remaining shares of Restricted Voting
Common Stock into shares of Common Stock in the event 80% or more of the
originally outstanding shares of Restricted Voting Common Stock have been
previously converted into shares of Common Stock. As of June 30, 2000, 1,270,328
shares of Restricted Voting Common Stock had been converted to shares of Common
Stock.

EARNINGS PER SHARE

     Basic earnings per share ("EPS") is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the year.
Diluted EPS is computed considering the dilutive effect of stock options and
convertible subordinated notes. Options to purchase 4.0 million shares of Common
Stock at prices ranging from $7.625 to $21.438 per share were outstanding for
the six months ended June 30, 2000, but were not included in the computation of
diluted earnings per share because the options' exercise prices were greater
than the respective average market price of the Common Stock. Options had an
anti-dilutive effect for the three months ended June 30, 2000 because the
Company reported a net loss during this period, and therefore, are not included
in the diluted EPS calculation. Diluted EPS is also computed by adjusting both
net earnings and shares outstanding as if the conversion of the convertible
subordinated notes occurred on the first day of the year. The after-tax interest
expense related to the assumed conversion of the convertible subordinated notes
during the three months and six months ended June 30, 1999 was $0.3 million and
$0.7 million, respectively. The convertible subordinated notes had an
anti-dilutive effect during the three months and six months ended June 30, 2000,
and therefore, are not included in the diluted EPS calculation.

                                       9
<PAGE>
                           COMFORT SYSTEMS USA, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         JUNE 30, 2000 -- (CONTINUED)

     The following table reconciles the number of shares outstanding with the
number of shares used in computing basic and diluted earnings per share for each
of the periods presented (in thousands):

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED       SIX MONTHS ENDED
                                                           JUNE 30,                JUNE 30,
                                                     --------------------   --------------------
                                                       1999        2000       1999        2000
                                                     --------    --------   --------    --------
<S>                                                    <C>         <C>        <C>         <C>
Common shares outstanding, end of period .........     38,878      37,130     38,878      37,130
Effect of using weighted average common shares
  outstanding ....................................       (144)        366       (354)        398
                                                     --------    --------   --------    --------
Shares used in computing earnings per share --
  basic ..........................................     38,734      37,496     38,524      37,528
Effect of shares issuable under stock option plans
  based on the treasury stock method .............        286        --          223          10
Effect of shares issuable related to convertible
  notes ..........................................      1,624        --        1,978        --
                                                     --------    --------   --------    --------
Shares used in computing earnings per share --
  diluted ........................................     40,644      37,496     40,725      37,538
                                                     ========    ========   ========    ========
</TABLE>
                                       10

<PAGE>
                           COMFORT SYSTEMS USA, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

INTRODUCTION

     The following discussion should be read in conjunction with the historical
consolidated financial statements of Comfort Systems USA, Inc. ("Comfort
Systems' and collectively with its subsidiaries, the "Company") and related
notes thereto included elsewhere in this Form 10-Q and the Annual Report on Form
10-K as filed with the Securities and Exchange Commission for the year ended
December 31, 1999 (the "Form 10-K"). This discussion contains forward-looking
statements regarding the business and industry of Comfort Systems within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on the current plans and expectations of the Company and
involve risks and uncertanties that could cause actual future activities and
results of operations to be materially different from those set forth in the
forward-looking statements. Important factors that could cause actual results to
differ include risks set forth in "Factors Which May Affect Future Results,'
included in the Form 10-K.

     The Company is a leading national provider of comprehensive HVAC
installation, maintenance, repair and replacement services. The Company operates
primarily in the commercial and industrial HVAC markets, and performs most of
its services within manufacturing plants, office buildings, retail centers,
apartment complexes, and healthcare, education and government facilities. In
addition to standard HVAC services, the Company provides specialized
applications such as process cooling, control systems, electronic monitoring and
process piping. Certain locations also perform related services such as
electrical and plumbing.

     Historical results are not necessarily indicative of future results of the
Company because, among other things, the businesses acquired were not under
common control or management prior to their acquisition. The results of the
Company have historically been subject to seasonal fluctuations. The timing and
magnitude of acquisitions, assimilation costs and the seasonal nature of the
HVAC industry may materially affect operating results. Accordingly, the
operating results for any period are not necessarily indicative of the results
that may be achieved for any subsequent period. These interim historical
statements of operations should be read in conjunction with the historical
consolidated financial statements and related notes of Comfort Systems, filed
herewith, and the additional information and the respective financial statements
and related notes of Comfort Systems included in the Form 10-K.

                                       11
<PAGE>
RESULTS OF OPERATIONS -- (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED                           SIX MONTHS ENDED
                                                        JUNE 30,                                    JUNE 30,
                                         --------------------------------------      --------------------------------------
                                               1999                 2000                   1999                 2000
                                         -----------------    -----------------      -----------------    -----------------
<S>                                      <C>         <C>      <C>         <C>        <C>         <C>      <C>         <C>
Revenues.............................    $341,493    100.0%   $404,970    100.0%     $633,419    100.0%   $767,536    100.0%
Cost of services.....................     265,254     77.7     334,332     82.6       494,002     78.0     626,031     81.6
                                         --------             --------               --------             --------
Gross profit.........................      76,239     22.3      70,638     17.4       139,417     22.0     141,505     18.4
Selling, general and administrative
  expenses...........................      43,333     12.7      56,687     14.0        88,191     13.9     111,515     14.5
Goodwill amortization................       2,883      0.8       3,149      0.8         5,667      0.9       6,332      0.8
                                         --------             --------               --------             --------
Operating income.....................      30,023      8.8      10,802      2.7        45,559      7.2      23,658      3.1
Other income (expense)...............      (4,342)     1.3      (6,486)    (1.6)       (8,321)     1.3     (12,310)   (1.6)
Reductions in non-operating assets
  and liabilities, net...............         --        --      (5,190)    (1.3)          --       --       (5,190)   (0.7)
                                         --------             --------               --------             --------
Income (loss) before income taxes....      25,681      7.5        (874)    (0.2)       37,238      5.9       6,158      0.8
Provision for income taxes...........      11,036       --         31      --          16,029      --        3,055       --
                                         --------             --------               --------             --------
Net income (loss)....................    $ 14,645      4.3    $   (905)    (0.2)     $ 21,209      3.3    $  3,103      0.4
                                         ========             ========               ========             ========
</TABLE>

     REVENUES -- Revenues increased $63.5 million, or 18.6%, to $405.0 million
for the second quarter of 2000 and increased $134.1 million, or 21.2%, to
$767.5 million for the first six months of 2000, compared to the same periods in
1999. For the three months ended June 30, 2000, approximately 13.8% of the
increase in revenues related to internal growth and the remaining 4.8% resulted
from acquisition activity in 1999. Approximately 13.8% of the increase in
revenues for the first six months of 2000 related to internal growth and the
remaining 7.4% resulted from acquisition activity during 1999. Approximately 3%
of the total increase in revenues for both the three and six months ended
June 30, 2000 resulted from the Company's ability to increase volume by
subcontracting portions of projects to other contractors. The Company believes
that the construction industry is continuing to experience capacity issues,
principally relating to shortages of labor, which could hinder the Company's
ability to increase its revenue volume while maintaining its historical margins.

     GROSS PROFIT -- Gross profit decreased $5.6 million, or 7.3%, to
$70.6 million for the second quarter of 2000 and increased $2.1 million, or
1.5%, to $141.5 million for the first six months of 2000, compared to the same
periods in 1999. As a percentage of revenues, gross profit decreased from 22.3%
for the three months ended June 30, 1999 to 17.4% for the three months ended
June 30, 2000 and from 22.0% for the first six months of 1999 to 18.4% for the
first six months of 2000. During the second quarter of 2000, the Company
reported negative gross profit of approximately $4.6 million related to its
operations at a company in the Midwest. These losses were realized in connection
with several projects priced significantly below cost, execution problems and
other management shortfalls. The remaining decrease in gross profit as a
percentage of revenues resulted from increased labor costs, pricing pressures in
certain markets and scheduling and efficiency challenges associated with labor
availability and productivity at the high levels of activity at most of our
operations. The Company has also realized a change in its mix of revenue volume
to include more subcontracting activities which generally carry lower margins.
In addition, the Company also experienced weak performance at several locations
relating to ongoing turnaround efforts and execution difficulties.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") -- SG&A increased
$13.4 million, or 30.8%, to $56.7 million for the second quarter of 2000 and
increased $23.3 million, or 26.4%, to $111.5 million for the first six months of
2000, compared to the same periods in 1999. As a percentage of revenues,
selling, general and administrative expenses increased from 12.7% for the three
months ended June 30, 1999 to 14.0% for the three months ended June 30, 2000 and
from 13.9% for the first six months of 1999 to 14.5% for the first six months of
2000. This increase in SG&A as a percentage of revenues resulted primarily from
1999 acquisitions including Outbound Services where the Company has incurred
additional SG&A to support expansion of its e-commerce

                                       12
<PAGE>
activities. The Company also increased corporate and regional office spending to
support the requirements of a larger organization and expand its focus on
serving national accounts. In addition, as discussed above, the Company has
experienced weak performance at several locations relating to turnaround efforts
and execution difficulties and these companies have realized a disproportionate
amount of SG&A as compared to their revenue volumes.

     OTHER INCOME (EXPENSE) -- Other expense, net, increased $2.1 million, or
49.4%, to $6.5 million for the second quarter of 2000 and increased $4.0
million, or 47.9%, to $12.3 million for the first six months of 2000, compared
to the same periods in 1999. This increase was primarily due to the increase in
interest expense related to the acquisition of purchased companies in 1999 and
repurchases of the Company's common stock ("Common Stock").

     REDUCTIONS IN NON-OPERATING ASSETS AND LIABILITIES, NET -- During the
quarter ended June 30, 2000, the Company recorded a non-cash charge of
approximately $5.2 million primarily related to the impairment of certain
non-operating assets. These assets primarily related to notes receivable from
former business owners. In addition, the Company recorded an impairment of
approximately $0.8 million to its minority investment in two entities associated
with the distribution and implementation of high-end engineering and design
software. The Company also recorded a gain of approximately $0.6 million on the
reduction of its subordinated note payable to a former owner in connection with
the settlement of claims with this former owner.

LIQUIDITY AND CAPITAL RESOURCES

     For the six months ended June 30, 2000, net cash provided by operating
activities was $17.5 million and represents an increase of $13.0 million over
the comparable period of the prior year. During the current year, the Company
has focused on improving its cash flow. The increase is primarily as a result of
the increase in accounts payable and accrued liabilities and the increase in
billings in excess of costs and estimated earnings. Cash provided by operating
activities for the six months ended June 30, 1999 was $4.5 million primarily due
to an increase in accounts payable and accrued liabilities.

     Cash used in investing activities was $8.9 million for the six months ended
June 30, 2000, primarily in connection with purchases of property and equipment
for $9.4 million. Cash used in investing activities for the six months ended
June 30, 1999 was $24.5 million, primarily for the acquisition of purchased
companies.

     Cash used in financing activities for the six months ended June 30, 2000
was $3.3 million and was primarily attributable to net payments of long-term
debt of $2.9 million. Net cash provided by financing activities for the six
months ended June 30, 1999 was $17.4 million and was primarily attributable to
net borrowings of long-term debt related to the acquisition of purchased
companies.

     The Company has a revolving credit facility ("Credit Facility") provided by
Bank One, Texas, N.A. and other banks ("the Bank Group"). The Credit Facility
provides the Company with a revolving line of credit of up to $300 million
secured by accounts receivable, inventory and the shares of capital stock of the
Company's subsidiaries. The Credit Facility expires on November 1, 2001, at
which time all amounts outstanding under the Credit Facility are due. The
Company currently has a choice of two interest rate options when borrowing under
the Credit Facility. Under one option, the interest rate is determined based on
the higher of the Federal Funds Rate plus 0.5% or the bank's prime rate. An
additional margin of 0.25% to 1.75% is then added to the higher of these two
rates. Under the other interest rate option, borrowings bear interest based on
designated short-term Eurodollar rates (which generally approximate LIBOR) plus
1.25% to 3.00%. The additional margin for both options depends on the ratio of
the Company's debt to EBITDA (as defined). Commitment fees of 0.25% to 0.5% per
annum, also depending on the ratio of debt to EBITDA, are payable on the unused
portion of the facility.

     The Credit Facility prohibits payment of dividends by the Company, limits
certain non-Bank Group debt, and restricts outlays of cash by the Company
relating to certain investments, capital expenditures, vehicle leases,
acquisitions and principal repayments of subordinate debt. The Credit Facility
also provides for the maintenance of certain levels of shareholder equity and
EBITDA, and for the maintenance of certain ratios of the Company's EBITDA to
interest expense and debt to EBITDA. Under the terms of the Credit Facility that
were in effect as of June 30, 2000, the Company was in violation of the ratio
requirements of

                                       13
<PAGE>
senior debt to EBITDA and subordinate debt repayments, in both cases by small
amounts. The Bank Group has waived these violations. In connection with these
waivers, the Bank Group has agreed to reduce the required ratios of EBITDA to
interest expense and debt to EBITDA through the maturity of the Credit Facility.

     As of June 30, 2000, the Company had borrowed $246.0 million under the
Credit Facility at an average interest rate of approximately 8.3% per annum for
the first six months of 2000. The Credit Facility's interest rate terms as
summarized above are effective as of August 11, 2000 and will result in an
increase of approximately 0.50% in the additional margin and related costs the
Company pays in excess of the indicated market interest rate in either of the
interest rate options. The Company's unused committed borrowing capacity under
the Credit Facility was $51.6 million at June 30, 2000. As of August 10, 2000,
$257.0 million was outstanding under this facility.

     Earlier this year, the Company intended to refinance a portion of its
variable-rate debt under the Credit Facility with fixed-rate private placement
debt. In anticipation of this transaction, the Company entered into interest
rate lock agreements to hedge against increases in market interest rates. In the
second quarter, the Company elected not to complete this refinancing and
terminated the interest lock agreements at a nominal gain. The Company is
considering steps to extend the maturity of, or otherwise refinance, its
borrowings under the Credit Facility. These amounts currently mature in November
2001.

     Subordinated notes were issued to former owners of certain purchased
companies as partial consideration of the acquisition purchase price and had an
outstanding balance of $56.1 million as of June 30, 2000. Of these notes, $55.8
million bear interest, payable quarterly, at a weighted average interest rate of
5.81% and $1.4 million of these notes are convertible by the holders into shares
of the Company's Common Stock at a weighted average price of $25.40 per share.
The remaining notes in the amount of $0.3 million are non-interest bearing and
require principal payments in equal annual installments in 2001, 2002 and 2003.
The terms of the convertible subordinated notes require $0.2 million of
principal payments in 2000, $0.6 million of principal payments in 2001 and $0.6
million of principal payments in 2002. The terms of the nonconvertible interest
bearing subordinated notes require $5.3 million of principal payments in 2000,
$26.9 million of principal payments in 2001, $21.3 million of principal payments
in 2002 and $0.9 million of principal payments in 2003.

     Under the current terms of the Credit Facility, the Company may be
restricted from making scheduled repayments of subordinate debt beginning in
October 2000. If this occurs, the Company has at least one year to regain
compliance with the terms of the subordinate debt. The Company intends to
negotiate the disposition of this issue in connection with pursuing an extension
of the maturity of borrowings outstanding under the Credit Facility as discussed
above.

     On October 5, 1999, the Company announced that its Board of Directors had
approved a share repurchase program authorizing the Company to buy up to 4.0
million shares of its Common Stock. During 1999, the Company purchased
approximately 1.8 million shares at a cost of approximately $12.9 million.
During the first six months of 2000, the Company purchased approximately 0.2
million shares at a cost of approximately $1.2 million. The Company does not
expect significant further share repurchases under this program for the
foreseeable future.

     The Company anticipates that available borrowings under its Credit Facility
and cash flow from operations will be sufficient to meet the Company's normal
working capital and capital expenditure needs. The Company will need to extend
the maturity of its borrowings under the Credit Facility, and may also need to
extend maturities of some of its subordinate debt to affiliates and former
owners. As discussed above, the Company is considering alternatives to
accomplish these steps. There can be no assurance that extensions can be
obtained, or that if the Company needs additional financing, that such financing
can be secured when needed or on terms the Company deems acceptable.

YEAR 2000

     Computers, software, and other equipment utilizing embedded technology that
use only two digits to identify a year in a date field may be unable to
accurately process certain date-based information at or after

                                       14
<PAGE>
the year 2000. This is commonly referred to as the "Year 2000 issue." The
Company implemented a Year 2000 program and used both internal and external
resources to assess and replace or reprogram computers, software and other
equipment as needed. Key areas of the Company's operations that were addressed
included external customers, external suppliers and internal computers, software
and potential back-up and contingency plans. To date, the Company has not
experienced any significant Year 2000 issues.

     The Company's initial assessment identified Year 2000 issues within the
Company's operating systems. The total cost of Year 2000 enhancements was
approximately $800,000 and was funded from operating cash flows. The majority of
such costs was for the acquisition of hardware and software and was capitalized.
The remaining costs were expensed as incurred and did not have a material effect
on the results of operations.

     The ability of third parties with which the Company transacts business to
adequately address remaining Year 2000 issues is outside of the Company's
control. There can be no assurance that the failure of the Company, or such
third parties, to adequately address their respective remaining Year 2000 issues
will not have a material adverse effect on the Company's financial condition or
results of operations. Accordingly, as part of the Year 2000 program,
contingency plans were developed to respond to any failures. At this time, the
Company does not expect that any failure of the Company or third parties to
achieve Year 2000 compliance will adversely affect the Company.

SEASONALITY AND CYCLICALITY

     The HVAC industry is subject to seasonal variations. Specifically, the
demand for new installation and replacement is generally lower during the winter
months due to reduced construction activity during inclement weather and less
use of air conditioning during the colder months. Demand for HVAC services is
generally higher in the second and third calendar quarters due to increased
construction activity and increased use of air conditioning during the warmer
months. Accordingly, the Company expects its revenues and operating results
generally will be lower in the first and fourth calendar quarters.

     Historically, the construction industry has been highly cyclical. As a
result, the Company's volume of business may be adversely affected by declines
in new installation projects in various geographic regions of the United States.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risk primarily related to potential
adverse changes in interest rates. Management is actively involved in monitoring
exposure to market risk and continues to develop and utilize appropriate risk
management techniques.

                                       15
<PAGE>
                           COMFORT SYSTEMS USA, INC.
                         PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company is party to litigation in the ordinary course of business.
There are currently no pending legal proceedings that, in management's opinion,
will have a material adverse effect on the Company's consolidated operating
results or financial condition.

ITEM 2.  RECENT SALES OF UNREGISTERED SECURITIES

     During the three month period ended June 30, 2000, the Company did not
issue any unregistered shares of its common stock.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its annual meeting of stockholders in Houston, Texas on
May 18, 2000. The following sets forth matters submitted to a vote of
stockholders:

     (a)  The following individuals were elected to the Board of Directors as
          stated in the Company's Proxy Statement dated April 24, 2000, for
          terms expiring at the 2003 annual stockholders' meeting or until their
          successors have been elected and qualified -- Class III directors are
          Alfred J. Giardinelli, Samuel M. Lawrence, Robert M. Powers, Diane D.
          Sanders, and Steven S. Harter. Every director was elected by more than
          a majority of the outstanding shares of Common Stock of the Company,
          except for Mr. Harter who was elected by more than a majority of the
          outstanding shares of Restricted Voting Common Stock. Mr. Giardinelli
          had 30,304,902 shares voted in favor, with 546,103 shares withheld,
          Mr. Harter had 1,273,004 shares voted in favor, with no shares
          withheld, Mr. Lawrence had 30,304,844 shares voted in favor, with
          546,161 shares withheld, Mr. Powers had 30,304,776 shares voted in
          favor, with 546,229 shares withheld, Diane D. Sanders had 31,640,800
          shares voted in favor, with 295,926 shares withheld.

     (b)  A majority of the outstanding shares of Common Stock of the Company
          approved the amendment of the 1998 Employee Stock Purchase Plan to
          increase the number of shares issuable by 600,000 shares. Shares voted
          in favor 24,239,970, with 872,151 shares against, and 108,637 shares
          abstained.

     (c)  A majority of the outstanding shares of Common Stock of the Company
          approved the adoption of the 2000 Incentive Plan, and to authorize the
          issuance of up to 3,500,000 options to purchase shares. Shares voted
          in favor 23,271,825, with 3,071,061 shares against, and 150,839
          abstained.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

         10.1 -- Severance and General Release Agreement between Fred M.
                  Ferreira and the Company dated June 30, 2000. (Filed
                  herewith).

         10.2 -- Employment Agreement between William F. Murdy and the Company
                  dated June 27, 2000. (Filed herewith).

         10.3 -- Note Modification Agreement between Mark Shambaugh and the
                  Company dated August 8, 2000. (Filed herewith).

         10.4 -- Note Termination Agreement among Salvatore Fichera and
                  Salvatore Giardina, Sorce Properties LLC, and F&G Mechanical
                  Corporation dated June 23, 2000. (Filed herewith).

         10.5 -- Third Amendment to Credit Agreement dated as of August 11,
                  2000 amending the Third Amended and Restated Credit Agreement
                  dated December 14, 1998 among the Company and its
                  subsidiaries, Bank One, Texas, N.A., as agent and the banks
                  listed therein. (Filed herewith).

                                       16
<PAGE>
         10.6 -- Amendment to 1998 Employee Stock Purchase Plan dated May 18,
                  2000. (Filed herewith).

         10.7 -- Comfort Systems USA, Inc. 2000 Incentive Plan. (Filed
                  herewith).

         27.1 -- Financial Data Schedule. (Filed herewith)

     (b)  Reports on Form 8-K

          None.

ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

     None.

                                       17
<PAGE>
                                   SIGNATURE

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                                          COMFORT SYSTEMS USA, INC.

                                          By:   /s/  J. GORDON BEITTENMILLER
                                                 J. GORDON BEITTENMILLER
                                                EXECUTIVE VICE PRESIDENT,
                                           CHIEF FINANCIAL OFFICER AND DIRECTOR

Dated:  August 14, 2000

                                       18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

                                                                    EXHIBIT 10.1

                     SEVERANCE AND GENERAL RELEASE AGREEMENT

      THIS SEVERANCE AND GENERAL RELEASE AGREEMENT (the "Agreement") is entered
into as of the 30th day of June, 2000, by and between Comfort Systems USA, Inc.,
a Delaware corporation (the "Company") and Fred Ferreira (the "Employee"). The
Company and the Employee each hereby covenant and agree as follows:

1. TERMINATION. Employee's last active day of employment with the Company will
be June 30, 2000 (the "Termination Date"). Employee's employment with the
Company will terminate effective on that date.

2. SEVERANCE PAYMENTS. As consideration for the Employee's commitments set forth
in this Agreement, the Company agrees to pay to Employee upon expiration of the
revocation period provided in paragraph 6 below a single cash payment equal to
$300,000. The Company also agrees that for a period of 18 months it will
reimburse Employee for amounts paid by him to continue welfare benefits under
COBRA. The payments provided for in this paragraph will be made promptly after
expiration of the revocation period described in paragraph 6 and shall be in
full and complete satisfaction of, without limitation, any claim for salary,
benefits, compensation of any sort, or any other claim for anything of economic
value which the Employee may have arising out of his or her employment with the
Company, or the termination thereof. Employee agrees and acknowledges that as a
result of his separation any outstanding options held by him shall immediately
terminate, and he agrees to return his option certificates.

      The payment will be made in accordance with the Company's standard pay
practices, and thus the Company will make all legally required deductions for
FICA, taxes, etc. The check will be mailed to the Employee, unless otherwise
advised in writing, at the Employee's home address as indicated in the Company's
records.

3. RETURN OF MATERIALS, CONFIDENTIALITY, NONDISPARAGEMENT. In consideration for
the payments and benefits described in Section 2 the Employee hereby agrees that
Employee will promptly return to the Company all documents, files, books, keys,
passes, identification materials and other properties of the Company and will
vacate his office and the premises of the Company. The Employee agrees that he
shall not disclose and shall protect all of the Company's proprietary
information, including without limitation its customers, plans, agreements,
attributes, processes, documents, etc. The Employee further agrees that he will
not disparage the Company or those associated with it, and that he will take no
steps and make no statements detrimental to the reputation or interests of the
Company or those associated with it and will keep the terms of this Agreement
strictly confidential.

4. NONCOMPETITION AGREEMENT. The Employee acknowledges that he has certain valid
noncompetition obligations to the Company as contained in his Employment
Agreement and in agreements executed in connection with the Company's formation
and initial public offering.

5. GENERAL RELEASE OF CLAIMS. This letter constitutes the entire agreement
between the Employee and the Company (and supersedes any prior communication,
written or oral without limitation the Employment Agreement except as set forth
herein) with respect to all matters relating hereto. The Employee hereby agrees
that he has no additional rights to salary, benefits,
<PAGE>
or compensation of any sort or any other thing of economic value from the
Company except as explicitly set forth in this letter. This letter shall be in
complete and final settlement of any and all causes of action or claims that the
Employee may have had, now has or may have in any way related to or arising out
of such employment and its termination or pursuant to any federal, state or
local employment and its termination or pursuant to any federal, state or local
employment laws, regulations, orders or other requirements including without
limitation Title VII of the Civil Rights Act of 1964, the Employee Retirement
Income Security Act of 1974, the Age Discrimination in Employment Act of 1967,
the Rehabilitation Act of 1973, the Older Workers Benefit Protection Act, and
the Americans with Disabilities Act of 1990, as they may be amended. In
consideration of the special benefits that the Employee will receive under this
Agreement, the Employee, personally and on behalf of his heirs, assigns and
representatives, hereby releases, waives and discharges any and all such causes
of action or claims against the Company and their respective past, present and
future affiliates, directors, trustees, officers, agents, employees, successors
and assigns, and agrees never to bring any such claim or cause of action in any
forum.

6. REVOCATION PERIOD. For a period of seven days following the Employee's
execution of this Agreement the Employee may revoke this Agreement, and the
Agreement shall not be effective or enforceable until this seven day revocation
period has expired. After such revocation period, the parties intend that this
Agreement shall have the effect of a sealed instrument under the laws of the
State of Texas.

      In signing this Agreement the Employee acknowledges that he or she
understands its provisions, and that such Agreement is knowing and voluntary,
that he or she has been afforded a full and reasonable opportunity to consider
its terms and to consult with or seek advice from any attorney or other person
of Employee's choosing, and that Employee has been advised by the Company to
consult with an attorney prior to executing this Agreement. This offer of
severance shall be valid until the Employee has considered it for a period 21
days without accepting it, after which it will automatically expire.

EMPLOYEE:                                COMFORT SYSTEMS USA, INC.



/s/ Fred Ferreira                        /s/ William George
FRED FERREIRA                                WILLIAM GEORGE
                                             SENIOR VICE PRESIDENT
Date Executed:_______________________
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

      This Employment Agreement (this "AGREEMENT") by and among COMFORT SYSTEMS
USA (TEXAS), L.P., a Texas limited partnership (the "COMPANY"), and William F.
Murdy ("EMPLOYEE") is hereby entered into and effective as of the 27th day of
June, 2000.

                                    R E C I T A L S

A. The Company is engaged primarily in the heating, ventilation, air
conditioning, plumbing, electrical, fire protection and process piping industry.

B. Company desires to employ Employee hereunder in a confidential relationship
wherein Employee, in the course of his employment, will become familiar with and
aware of information as to the Company's customers, specific manner of doing
business, processes, techniques and trade secrets and future plans with respect
thereto, all of which have been and will be established and maintained at great
expense to the Company, which information is a trade secret and constitutes the
valuable good will of the Company; and

      NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, it is hereby agreed as follows:

                                  A G R E E M E N T S

1.    EMPLOYMENT AND DUTIES.

      (a) Company hereby employs Employee to serve as Chief Executive Officer of
the Company. As such, Employee shall have responsibilities, duties and authority
customarily accorded to and expected of an officer holding such position
directly with the Company. Employee hereby accepts this employment upon the
terms and conditions herein contained and agrees to devote his full time,
attention and efforts to promote and further the business of Company.

      (b) Employee shall faithfully adhere to, execute and fulfill all policies
established by Company from time to time.

2. COMPENSATION. For all services rendered by Employee, Company shall compensate
Employee as follows:

(a) BASE SALARY; PERFORMANCE BONUS; COMPANY STOCK OPTIONS. Effective as of the
Effective Date, the base salary payable to Employee shall be $400,000 per year,
payable on a regular basis in accordance with Company's standard payroll
procedures but not less frequently than monthly. On at least an annual basis,
Company will review Employee's performance and may, in its sole discretion, (i)
make

                                       1
<PAGE>
increases to such base salary; (ii) pay a performance bonus; or (iii) recommend
Employee for the grant of Company stock options.

      (b) EMPLOYEE PERQUISITES, BENEFITS AND OTHER COMPENSATION. Employee shall
be entitled to receive additional benefits and compensation from Company in such
form and to such extent as specified below:

      (i) Coverage, subject to contributions required of executives of the
      Company generally, for Employee and his dependent family members under
      health, hospitalization, disability, dental, life and other insurance
      plans that Company may have in effect from time to time. Benefits provided
      to Employee under this clause (i) shall be equal to such benefits provided
      to other Company employees of the same level.

      (ii) Reimbursement for all business travel and other out-of-pocket
      expenses reasonably incurred by Employee in the performance of services
      pursuant to this Agreement. All reimbursable expenses shall be
      appropriately documented in reasonable detail by Employee upon submission
      of any request for reimbursement, and in a format and manner consistent
      with Company's expense reporting policy.

      (iii) Company shall provide Employee with other employee perquisites as
      may be available to or deemed appropriate for Employee by Company and
      participation in all other Company-wide employee benefits as are available
      from time to time.

3.    NONCOMPETITION AGREEMENT.

      (a) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require his services in the operation or affairs of the companies
or enterprises in which such investments are made nor violate the terms of this
paragraph 3. Employee will not, during the period of his employment by or with
Company, and for a period of two (2) years immediately following the termination
of his employment under this Agreement, except as provided below, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:

      (i) engage, as an officer, director, shareholder, owner, partner, joint
      venturer, or in a managerial capacity, whether as an employee, independent
      contractor, consultant or advisor, or as a sales representative, in any
      business in direct competition with Company or any of its subsidiaries and
      affiliates within 100 miles of where the Company or any of its
      subsidiaries and affiliates conduct

                                       2
<PAGE>
      business, including any territory serviced by the Company or any of such
      subsidiaries (the "TERRITORY");

      (ii) call upon any person who is, at that time, an employee of Company or
      any of its subsidiaries or affiliates sales or managerial capacity for the
      purpose or with the intent of enticing such employee away from or out of
      the employ of Company or any of its subsidiaries or affiliates or any its
      subsidiaries or affiliates;

      (iii) call upon any person or entity which is, at that time, or which has
      been, within one (1) year prior to that time, a customer of the Company or
      any of its subsidiaries or affiliates for the purpose of soliciting or
      selling products or services in direct competition with the Company or any
      of its subsidiaries or affiliates; or

      (iv) call upon any prospective acquisition candidate, on Employee's own
      behalf or on behalf of any competitor, which candidate was, to Employee's
      actual knowledge after due inquiry, either called upon by Company or any
      of its subsidiaries or affiliates or for which Employee participated in an
      acquisition analysis for the purpose of acquiring such entity or all or
      substantially all of such entity's assets.

      Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as a passive investment not more than two
percent (2%) of the capital stock of a competing business the stock of which is
traded on a national securities exchange or on an over-the -counter or similar
market.

      (b) Because of the difficulty of measuring economic losses to Company or
any of its subsidiaries or affiliates as a result of a breach of the foregoing
covenant, and because of the immediate and irreparable damage that could be
caused to Company or any of its subsidiaries or affiliates for which they would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by Company or any of its subsidiaries or affiliates in the event of
breach or threatened breach by Employee, by injunctions, restraining orders and
other appropriate equitable relief.

      (c) It is agreed by the parties that the foregoing covenants in this
paragraph 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company on the date of the execution of this Agreement and
the current plans of the Company or any of its subsidiaries or affiliates; but
it is also the intent of the Company and Employee that such covenants be
construed and enforced in accordance with the changing activities, business and
locations of the Company or any of its subsidiaries or affiliates throughout the
term of this covenant, whether before or after the date of termination of the
employment of Employee. For example, if, during the term of this Agreement, the
Company or any of its subsidiaries or affiliates engages in new and different
activities, enters a new business or establishes new locations for its current
activities or business in addition to or other than the activities or business
enumerated under the Recitals above or the locations currently established
therefor, then Employee

                                       3
<PAGE>
will be precluded from soliciting the customers or Employees of such new
activities or business or from such new location and from directly competing
with such new business within 100 miles of its then-established operating
location(s) through the term of this covenant.

      It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company or any of its
subsidiaries or affiliates, or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of
paragraph 3(a), Employee shall not be chargeable with a violation of this
paragraph 3 if the Company or any of its subsidiaries or affiliates shall
thereafter enter the same, similar or a competitive (i) business, (ii) course of
activities or (iii) location, as applicable.

      (d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth herein are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and this
Agreement shall thereby be reformed.

      (e) All of the covenants in this paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against Company or any of
its subsidiaries or affiliates, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Company or any
of its subsidiaries or affiliates of such covenants. It is specifically agreed
that the period of two (2) years following termination of employment stated at
the beginning of this paragraph 3, during which the agreements and covenants of
Employee made in this paragraph 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this paragraph 3.

4.    PLACE OF PERFORMANCE; RELOCATION RIGHTS.

      (a) Employee understands that he may be requested by Company or any of its
subsidiaries or affiliates to relocate from his present residence to another
geographic location in order to more efficiently carry out his duties and
responsibilities under this Agreement or as part of a promotion or other
increase in duties and responsibilities. In such event, if Employee agrees to
relocate, Company or any of its subsidiaries or affiliates will pay all
relocation costs to move Employee, his immediate family and their personal
property and effects. Such costs may include, by way of example, but are not
limited to, pre-move visits to search for a new residence, investigate schools
or for other purposes; temporary lodging and living costs prior to moving into a
new permanent residence; duplicate home carrying costs; all closing costs on the
sale of Employee's present residence and on the purchase of a comparable
residence in the new location; and added income taxes that Employee may incur if
any relocation costs are not deductible

                                       4
<PAGE>
for tax purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use his best efforts to incur only those costs
which are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of Company or any of
its subsidiaries or affiliates and the personal life of Employee and his family.

      (b) Notwithstanding the above, if Employee is requested by Company to
relocate and Employee refuses, such refusal shall not constitute "CAUSE" for
termination of this Agreement under the terms of paragraph 5(a)(iii).

5.    TERM; TERMINATION; RIGHTS ON TERMINATION.

      (a) TERM. The term of this Agreement shall begin on the date hereof and
 continue for three (3) years (the "INITIAL TERM") unless terminated sooner as
 herein provided, and shall automatically renew after the Initial Term on a
 year-to-year basis on the same terms and conditions contained herein in effect
 as of the time of renewal unless the Company notifies Employee at least 60 days
 prior to such expiration (the "TERM"). This Agreement and Employee's employment
 may be terminated in any one of the following ways:

      (i)   TERMINATION AS A RESULT OF THE EMPLOYEE'S DEATH. The death of
            Employee shall immediately terminate this Agreement and upon such
            termination Employee's Estate shall receive from the Company, in a
            lump-sum payment, the base salary at the rate then in effect for one
            (1) year, provided, however, that such lump-sum payment shall be
            reduced by the amount, if any, of benefit payable under any life
            insurance policies to the extent such policies are procured and paid
            for by the Company.

      (ii)  TERMINATION ON ACCOUNT OF DISABILITY. If, as a result of incapacity
            due to physical or mental illness or injury, Employee shall have
            been absent from his full-time duties hereunder for four (4)
            consecutive months, then thirty (30) days after receiving written
            notice (which notice may occur before or after the end of such four
            (4) month period, but which shall not be effective earlier than the
            last day of such four (4) month period), Company may terminate
            Employee's employment hereunder provided Employee is unable to
            resume his full-time duties with or without reasonable accommodation
            at the conclusion of such notice period. Also, Employee may
            terminate his employment hereunder if his health should become
            impaired to an extent that makes the continued performance of his
            duties hereunder hazardous to his physical or mental health or his
            life, provided that Employee shall have furnished Company with a
            written statement from a qualified doctor to such effect and
            provided, further, that, at Company's request made within thirty
            (30) days of the date of such written statement, Employee shall
            submit to an examination by a doctor selected by Company who is
            reasonably

                                       5
<PAGE>
            acceptable to Employee or Employee's doctor and such doctor shall
            have concurred in the conclusion of Employee's doctor. In the event
            this Agreement is terminated as a result of Employee's disability,
            Employee shall receive from Company, in a lump-sum payment due
            within ten (10) days of the effective date of termination, the base
            salary at the rate then in effect for whatever time period is
            remaining under the Initial Term of this Agreement or for one (1)
            year, whichever amount is greater; provided, however, that any such
            payments shall be reduced by the amount of any disability insurance
            payments payable to the Employee as a result of such disability.

      (iii) TERMINATION BY THE COMPANY FOR CAUSE. Company may terminate this
            Agreement immediately for "CAUSE," which shall be: (1) Employee's
            willful and material breach of this Agreement (which breach cannot
            be cured or, if capable of being cured, is not cured within ten (10)
            days after receipt of written notice to cure); (2) Employee's gross
            negligence in the performance or intentional nonperformance of any
            of Employee's material duties and responsibilities hereunder; (3)
            Employee's willful dishonesty, fraud or misconduct with respect to
            the business or affairs of Company or any of its subsidiaries or
            affiliates which materially and adversely affects the operations or
            reputation of Company or any of its subsidiaries or affiliates; (4)
            Employee's conviction of a felony crime; (5) Employee's confirmed
            positive illegal drug test result; (6) confirmed sexual harassment
            by Employee; or (7) Employee's material and willful violation of the
            Company's Compliance and Business Ethics Policies. In the event of a
            termination for Cause, as enumerated above, Employee shall have no
            right to any severance compensation.

      (iv)  TERMINATION WITHOUT CAUSE. At any time after the commencement of
            employment, either Employee or Company may, voluntarily or without
            cause, respectively, terminate this Agreement and Employee's
            employment, effective thirty (30) days after written notice is
            provided to the other. Should Employee be terminated by Company
            without Cause during the Initial Term, Employee shall receive from
            Company, in a lump-sum payment due on the effective date of
            termination, the base salary at the rate then in effect for whatever
            time period is remaining under the Initial Term of this Agreement or
            for one (1) year, whichever amount is greater. Should Employee be
            terminated by Company without Cause after the Initial Term, Employee
            shall receive from Company, in a lump-sum payment due on the
            effective date of termination, the base salary at the rate then in
            effect equivalent to one (1) year of salary. Further, any
            termination without Cause by Company shall operate to shorten the
            period set forth in paragraph 3(a) and during which the terms of
            paragraph 3 apply to one (1) year from the date of termination of
            employment. Except as provided in paragraph 12 below,

                                       6
<PAGE>
            if Employee resigns or otherwise terminates this Agreement, the
            provisions of paragraph 3 hereof shall apply, except that Employee
            shall receive no severance compensation. If Employee is terminated
            by the Company without Cause, or if the Employee terminates his
            employment for Good Reason pursuant to paragraph 12(c) below, then
            the Company shall make the insurance premium payments contemplated
            by COBRA for a period of twelve (12) months immediately following
            such termination.

            (b) CHANGE IN CONTROL OF THE COMPANY. In the event of a Change in
            Control of the Company (as defined below) during the Term, paragraph
            12 below shall apply.

            (c) EFFECT OF TERMINATION. Upon termination of this Agreement for
            any reason provided above, Employee shall be entitled to receive all
            compensation earned and all benefits and reimbursements due through
            the effective date of termination. Additional compensation
            subsequent to termination, if any, will be due and payable to
            Employee only to the extent and in the manner expressly provided
            herein. All other rights and obligations of Company and Employee
            under this Agreement shall cease as of the effective date of
            termination, except that Company's obligations under paragraph 9
            herein and Employee's obligations under paragraphs 3, 6, 7, 8 and 10
            herein shall survive such termination in accordance with their
            terms.

            (d) BREACH BY COMPANY. If termination of Employee's employment
            arises out of Company's material failure to pay Employee on a timely
            basis the amounts to which he is entitled under this Agreement or as
            a result of any other breach of this Agreement by Company, as
            determined by a court of competent jurisdiction or pursuant to the
            provisions of paragraph 16 below, Company shall pay all amounts and
            damages to which Employee may be entitled as a result of such
            breach, including interest thereon and all reasonable legal fees and
            expenses and other costs incurred by Employee to enforce his rights
            hereunder. Further, none of the provisions of paragraph 3 shall
            apply in the event this Agreement is terminated as a result of a
            breach by Company.

6. RETURN OF COMPANY PROPERTY. All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other property delivered to
or compiled by Employee by or on behalf of the Company or its representatives,
vendors or customers which pertain to the business of the Company shall be and
remain the property of the Company and be subject at all times to its discretion
and control. Likewise, all correspondence, reports, records, charts, advertising
materials and other similar data pertaining to the business, activities or
future plans of the Company which is collected by Employee shall be delivered
promptly to the Company without request by it upon termination of Employee's
employment.

                                       7
<PAGE>
7. INVENTIONS. Employee shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of the Company and which Employee conceives as a result of his
employment hereunder. Employee hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.

8. TRADE SECRETS. Employee agrees that he will not, during or after the Term of
this Agreement, disclose the specific terms of the Company's relationships or
agreements with their respective significant vendors or customers or any other
significant and material trade secret of the Company, whether in existence or
proposed, to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever, except and only to the extent required by law or
legal process following notice to the Company.

9. INDEMNIFICATION. In the event Employee is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by Company against
Employee), by reason of the fact that he is or was performing services under
this Agreement, then Company shall indemnify Employee against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Employee in connection therewith, to the
maximum extent permitted by applicable law. The advancement of expenses shall be
mandatory to the extent permitted by applicable law. In the event that both
Employee and Company are made a party to the same third-party action, complaint,
suit or proceeding, Company agrees to engage counsel, and Employee agrees to use
the same counsel, provided that if counsel selected by Company shall have a
conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and Company shall pay all reasonable
attorneys' fees of such separate counsel. Company shall not be required to pay
the fees of more than one law firm except as described in the preceding
sentence, and shall not be required to pay the fees of more than two law firms
under any circumstances. Further, while Employee is expected at all times to use
his best efforts to faithfully discharge his duties under this Agreement,
Employee cannot be held liable to Company for errors or omissions made in good
faith where Employee has not exhibited gross, willful and wanton negligence or
misconduct or performed criminal or fraudulent acts.

10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to Company and
the Company that the execution of this Agreement by Employee and his employment
by Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former Company, client or any other person or
entity. Further, Employee agrees to indemnify Company and the Company for any
claim,

                                       8
<PAGE>
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against Company or any of its subsidiaries or affiliates based upon or
arising out of any noncompetition agreement, invention or secrecy agreement
between Employee and such third party which was in existence as of the date of
this Agreement.

11. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been selected
for employment by Company and/or the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.

12 CHANGE IN CONTROL.

      (a)   Upon notice by Employee at any time during the 90 days following a
            Change in Control, the Employee may elect to terminate his
            employment and shall be entitled to receive in a lump-sum payment
            due upon the date of such termination the amount equal to three (3)
            times his annual base salary then in effect, and the noncompetition
            provisions of paragraph 3 shall apply for a period of one (1) year
            immediately following the effective date of termination.

      (b)   Upon a Change in Control, any options outstanding to Employee that
            have not previously vested shall be immediately vested.

      (c)   In any Change in Control situation, if Employee is terminated by
            Company without Cause at any time during the twelve (12) months
            immediately following the closing of the transaction giving rise to
            the Change in Control, or Employee terminates this Agreement for
            Good Reason (as defined below) at any time during the twelve (12)
            months immediately following the closing of the transaction giving
            rise to the Change in Control, Employee shall be entitled to receive
            in a lump-sum payment, due on the effective date of termination, the
            amount equal to three (3) times the greater of (i) his annual base
            salary then in effect or (ii) his annual base salary in effect
            immediately prior to the closing of the transaction giving rise to
            the Change in Control, and the noncompetition provisions of
            paragraph 3 shall apply for a period of one (1) year immediately
            following the effective date of termination. For purposes of this
            Agreement, Employee shall have "GOOD REASON" to terminate this
            Agreement and his employment hereunder if, without Employee's
            consent, (x) Employee is demoted by means of a reduction in
            authority, responsibilities, duties or title to a position of
            materially less stature or importance within the Company than as
            described in paragraph 1 hereof or (y) the Company breaches this
            Agreement in any material respect and fails to cure such breach
            within ten (10) days after Employee delivers written notice and a
            written

                                       9
<PAGE>
            description of such breach to the Company, which notice shall
            specifically refer to this section of this Agreement.

      (d)   For purposes of applying paragraph 5 under the circumstances
            described in (b) above, the effective date of termination will be
            the closing date of the transaction giving rise to the Change in
            Control and all compensation, reimbursements and lump-sum payments
            due Employee must be paid in full by Company at or prior to such
            closing. Further, Company shall ensure that Employee will be given
            sufficient time and opportunity to elect whether to exercise all or
            any of his vested options to purchase the Company's Common Stock,
            including any options with accelerated vesting under the provisions
            of the Company's 1998 Long-Term Incentive Plan (or other applicable
            plan then in effect), such that he may convert the options to shares
            of the Company's Common Stock at or prior to the closing of the
            transaction giving rise to the Change in Control, if he so desires.

      (e)   A "CHANGE IN CONTROL" shall be deemed to have occurred if:

            (i) any person, other than Comfort Systems USA, Inc., a Delaware
            corporation and the beneficial owner of the Company ("CSUSA"), or an
            employee benefit plan of CSUSA, or any entity controlled by either,
            acquires directly or indirectly the Beneficial Ownership (as defined
            in Section 13(d) of the Securities Exchange Act of 1934, as amended)
            of any voting security of the CSUSA and immediately after such
            acquisition such Person is, directly or indirectly, the Beneficial
            Owner of voting securities representing fifty percent (50%) or more
            of the total voting power of all of the then-outstanding voting
            securities of CSUSA;

            (ii) the following individuals no longer constitute a majority of
            the members of the Board of Directors of CSUSA: (A) the individuals
            who, as of the date hereof, constitute the Board of Directors of
            CSUSA (the "ORIGINAL DIRECTORS"); (B) the individuals who thereafter
            are elected to the Board of Directors of the CSUSA and whose
            election, or nomination for election, to the Board of Directors of
            CSUSA was approved by a vote of at least two-thirds (2/3) of the
            Original Directors then still in office (such directors becoming
            "ADDITIONAL ORIGINAL DIRECTORS" immediately following their
            election); and (C) the individuals who are elected to the Board of
            Directors of CSUSA and whose election, or nomination for election,
            to the Board of Directors of CSUSA was approved by a vote of at
            least two-thirds (2/3) of the Original Directors and Additional
            Original Directors then still in office (such directors also
            becoming "ADDITIONAL ORIGINAL DIRECTORS" immediately following their
            election);

            (iii) the stockholders of CSUSA shall approve a merger,
            consolidation, recapitalization, or reorganization of CSUSA, a
            reverse stock split of outstanding voting securities, or
            consummation of any such transaction if

                                       10
<PAGE>
            stockholder approval is not obtained, other than any such
            transaction which would result in at least seventy-five percent
            (75%) of the total voting power represented by the voting securities
            of the surviving entity outstanding immediately after such
            transaction being Beneficially Owned by at least seventy-five
            percent (75%) of the holders of outstanding voting securities of
            CSUSA immediately prior to the transaction, with the voting power of
            each such continuing holder relative to other such continuing
            holders not substantially altered in the transaction; or

            (iv) the stockholders of CSUSA shall approve a plan of complete
            liquidation of CSUSA or an agreement for the sale or disposition of
            all or a substantial portion of the CSUSA's assets (i.e., fifty
            percent (50%) or more of the total assets of CSUSA).

            (f) Employee must be notified in writing by Company or any of its
            subsidiaries or affiliates at anytime that either Company or any of
            its subsidiaries or affiliates anticipates that a Change in Control
            may take place.

      (f)   If it shall be determined that any payment or distribution by
            Company, the Company or any other person to or for the benefit of
            the Employee (a "PAYMENT") would be subject to the excise tax
            imposed by Section 4999 of the Internal Revenue Code of 1986, as
            amended (the "EXCISE TAX"), as a result of the termination of
            employment of the Employee in the event of a Change in Control, then
            Company, the Company or the successor to the Company shall pay an
            additional payment (a "GROSS-UP PAYMENT") in an amount such that
            after payment by the Employee of all taxes, including, without
            limitation, any income taxes and Excise Tax imposed on the Gross-Up
            Payment, the Employee retains an amount of the Gross-Up Payment
            equal to the Excise Tax imposed on the Payments. Such amount will be
            due and payable by Company, the Company or the successor to the
            Company within ten (10) days after the Employee delivers written
            request for reimbursement accompanied by a copy of the Employee's
            tax return(s) or other tax filings showing the excise tax actually
            incurred by the Employee.

13. COMPLETE AGREEMENT. This Agreement sets forth the entire agreement of the
parties hereto relating to the subject matter hereof and supersedes any other
employment agreements or understandings, written or oral, between or among
Company, the Company and Employee. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with Company or any of its subsidiaries or affiliates or any of its officers,
directors or representatives covering the same subject matter as this Agreement.
This Agreement is the final, complete and exclusive statement and expression of
the agreement between Company and Employee and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Agreement
may not be later modified except by a further writing signed by a duly
authorized officer of Company and Employee, and

                                       11
<PAGE>
no term of this Agreement may be waived except in writing signed by the party
waiving the benefit of such term.

14. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:

      To Company:       Comfort Systems USA (Texas), L.P.
                        777 Post Oak Blvd, Suite 500
                        Houston, Texas  77056
                        Attention: Law Department

      To Employee:      William F. Murdy
                        ---------------------------------------
                        ---------------------------------------

      Notice shall be deemed given and effective on the earlier of three (3)
days after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually received
by means of hand delivery, delivery by Federal Express or other courier service,
or by facsimile transmission. Either party may change the address for notice by
notifying the other party of such change in accordance with this paragraph 14.1

15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The paragraph
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of this Agreement
or of any part hereof.

16. ARBITRATION. With the exception of paragraphs 3 and 7, any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three (3)
arbitrators in Houston, Texas, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
("AAA") then in effect, provided that Employee shall comply with Company's
grievance procedures in an effort to resolve such dispute or controversy before
resorting to arbitration, and provided further that the parties may agree to use
arbitrators other than those provided by the AAA. The arbitrators shall not have
the authority to add to, detract from, or modify any provision hereof nor to
award punitive damages to any injured party. The arbitrators shall have the
authority to order back-pay, severance compensation, vesting of options (or cash
compensation in lieu of vesting of options), reimbursement of costs, including
those incurred to enforce this Agreement, and interest thereon in the event the
arbitrators determine that Employee was terminated without disability or Cause,
as defined in paragraphs 5(a)(ii) and 5(a)(iii), respectively, or that Company
has breached this Agreement in any material respect. A decision by a majority of
the arbitration panel shall be final and binding. Judgment may

                                       12
<PAGE>
be entered on the arbitrators' award in any court having jurisdiction. The
direct expense of any arbitration proceeding shall be borne by Company.

17. GOVERNING LAW. This Agreement shall in all respects be construed according
to the laws of the State of Texas.

18. COUNTERPARTS. This Agreement may be executed simultaneously in two (2) or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

19. THIRD-PARTY BENEFICIARY. The Company is intended to be a third-party
beneficiary under this Agreement, and shall be entitled to enforce the
provisions hereof benefiting the Company.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              COMFORT SYSTEMS USA (TEXAS), L.P.

                              By: Comfort Systems USA G.P., Inc.



                              By: /s/ William George
                                  WILLIAM GEORGE
                                  VICE PRESIDENT

                              COMFORT SYSTEMS USA, INC.



                              By: /s/ William George
                                  WILLIAM GEORGE
                                  SENIOR VICE PRESIDENT AND GENERAL COUNSEL


                              EMPLOYEE:



                              /s/ William F. Murdy
                              WILLIAM F. MURDY

                                       13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>

                                                                    EXHIBIT 10.3

                           NOTE MODIFICATION AGREEMENT

      THIS NOTE MODIFICATION AGREEMENT is entered into effective as of August 8,
2000, and is binding on Mark Shambaugh (the "Holder"), and all of his assignees,
successors in interest and any other person or entity claiming by or through any
of them. Reference is hereby made to (i) each of those four certain Convertible
Subordinated Note(s) due November 15, 2001, each in the original principal
amount of $7,437,500 made by the Comfort Systems USA, Inc., a Delaware
corporation (the "Company"), in favor of the Holder, each as amended effective
as of July 1, 1999 (each individually a "Note", and collectively, the "Notes"),
and (ii) the Agreement and Plan of Merger dated November 15, 1998 by and among
the Company, CS42 Acquisition Corp., a Delaware corporation, Shambaugh & Son,
Inc., an Indiana corporation ("S&S") and the Holder (the "Merger Agreement").

      WHEREAS, the Company has notified the holder pursuant to the Merger
Agreement of certain liabilities (the "Potential Liabilities") to which S&S is
or may be liable and which relate to the fire protection activities of the
Company with GTE North, Incorporated and its affiliates ("GTE") prior to the
date of the Merger Agreement; and

      WHEREAS, the parties to such dispute have indicated that they are willing
to settle all civil liabilities with respect to such matter upon the payment by
S&S a cash settlement (the "Settlement Amount") to GTE; and

      WHEREAS, payment of the Settlement Amount would constitute Damages under
the Merger Agreement; and

      WHEREAS, pursuant to the Merger Agreement the Company is entitled to
offset Damages as set forth therein against amounts payable pursuant to the
Notes; and

      WHEREAS, the civil liabilities satisfied and released as consideration for
the Settlement Amount do not necessarily comprise all of the Potential
Liabilities; and

      WHEREAS, the Holder and the Company desire to document and clarify the
note modification required to effectuate such right of offset,

      NOW THEREFORE, the Holder and the Company hereby agree as follows:

      1.  Holder hereby represents that he is the holder of the Notes free and
          clear of all liens and obligations, that he has not transferred or
          alienated his interest in the Notes, and that he has full power to
          enter into this Agreement and thereby modify the Notes.

      2.  Holder acknowledges and agrees that, if and when the Company pays the
          Settlement Amount, the Company may offset such payment by reducing the
          principal of each Note by an amount equal to the Settlement Amount
<PAGE>
          minus the Indemnification Threshold divided by four. Such amounts
          shall be taken from the principal amounts due and payable on January
          1, 2001. The offset and reduction shall be effective as of the date
          that the Company actually pays the Settlement Amount.

      3.  To the extent that the Company has additional, valid Damages with
          respect to the Potential Liabilities, such Damages shall be gathered
          and itemized by the Company and reported to Holder by the Company.
          Such offset amounts, once determined, shall be taken from the
          principal amounts due and payable on January 1, 2001. The offset and
          reduction shall be effective as of the date that the Company delivers
          a final itemized accounting to the Holder pursuant to this Agreement.

Except for the offsets and reductions specifically set forth under this
Agreement, each of the Notes, as amended, are hereby reaffirmed in all respects.

COMFORT SYSTEMS USA, INC.



/s/ William Murdy                   /s/ Mark Shambaugh
WILLIAM MURDY                       MARK SHAMBAUGH
CHIEF EXECUTIVE OFFICER
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                                                                    EXHIBIT 10.4

                           NOTE TERMINATION AGREEMENT

      THIS NOTE TERMINATION AGREEMENT is entered into effective as of June 23,
2000, by and among Salvatore Fichera and Salvatore Giardina (collectively, the
"Pledgors"), Sorce Properties LLC, a New Jersey limited liability company
("Borrower"), and F&G Mechanical Corporation, a Delaware corporation ("Lender").
Reference is hereby made to (i) that certain Promissory Note by Borrower in
favor of Lender dated February 12, 1998 in the principal amount of $5,600,000
(the "Note") and (ii) that certain Pledge Agreement dated as of February 12,
1998 by the Pledgors in favor of Lender (the "Pledge Agreement"). Terms not
otherwise defined herein shall have the same definition as is set forth in the
Pledge Agreement.

      Lender hereby represents that it is the holder of the Note free and clear
of all liens and obligations, that it has not transferred or alienated its
interest in the Note, and that it has full power to enter into this agreement
and thereby terminate the Note. Each of the Pledgors hereby represents that he
is the holder of the Pledged Stock designated in his name free and clear of all
liens and obligations, that he has not transferred or alienated his interest in
the Note, and that he has full power to enter into this agreement and deliver
the Pledged Stock.

      Each of the Pledgors hereby irrevocably transfers all of its right, title
and interest in the Collateral (represented by Stock Certificates CS0520 in the
name of Salvatore Fichera, and CS0524 in the name of Salvatore P. Giardina, each
for 180,262 shares of the Common Stock of Comfort Systems USA, Inc.), and
simultaneously with his execution hereof will deliver stock powers, executed in
blank, pertaining to the Pledged Shares. The Lender agrees that upon receipt of
a fully executed Note Termination and the required stock powers it will, without
other payment in respect thereof, cancel the Obligations and deliver to the
Borrower the original Note marked "Cancelled".

      IN WITNESS WHEREOF, the parties set forth above hereby execute this Note
Termination at the date set forth above.

F&G MECHANICAL CORPORATION       SORCE PROPERTIES LLC



/s/ William George               /s/ Santo Sorce
WILLIAM GEORGE                   SANTO SOURCE
VICE PRESIDENT                   PRESIDENT



/s/ Salvatore Fichera            /s/ Salvatore P. Giardina
SALVATORE FICHERA                SALVATORE P. GIARDINA
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>0006.txt
<TEXT>

                                                                    EXHIBIT 10.5

                            COMFORT SYSTEMS USA, INC.

                       THIRD AMENDMENT TO CREDIT AGREEMENT

      This THIRD AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated as of
August 11, 2000 and entered into by and among COMFORT SYSTEMS USA, INC., a
Delaware corporation (the "COMPANY"), the other Credit Support Parties (as
defined in Section 4 hereof), the Subsidiaries of the Company listed on the
signature pages hereto as Guarantors (together with each other Person who
subsequently becomes a Guarantor, collectively the "GUARANTORS"), the banks and
other financial institutions listed on the signature pages hereto under the
caption "BANKS" (together with each other Person who becomes a Bank,
collectively the "BANKS"), BANK ONE, TEXAS, N.A., individually as a bank ("BOT")
and as administrative agent for the other Banks (in such capacity together with
any other Person who becomes the administrative agent, the "ADMINISTRATIVE
AGENT"), BANKERS TRUST COMPANY, individually as a Bank ("BTCO") and as
syndication agent for the other Banks (in such capacity together with any other
Person who becomes the syndication agent, the "SYNDICATION AGENT"), BANK OF
AMERICA, N.A. (formerly known as NationsBank, N.A.), individually as a Bank
("BOFA") and as documentation agent for the other Banks (in such capacity
together with any other Person who becomes the documentation agent, the
"DOCUMENTATION AGENT"; and together with the Administrative Agent and the
Syndication Agent, the "AGENTS"), and CREDIT LYONNAIS, individually as a Bank
and Co-Agent, NATIONAL CITY BANK, individually as a Bank and as Co-Agent, and
THE BANK OF NOVA SCOTIA, individually as a Bank and as Co-Agent (collectively,
the "CO-AGENTS"), and is made with reference to that certain Third Amended and
Restated Credit Agreement dated as of December 14, 1998, by and among the
Company, the Guarantors, the Banks, the Agents and the Co-Agents, as amended by
that certain First Amendment dated as of January 14, 1999, and that certain
Second Amendment dated as of August 18, 1999 (as so amended, the "CREDIT
AGREEMENT"), and to other Loan Documents. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement, as amended hereby (the "AMENDED CREDIT AGREEMENT").

                                    RECITALS

      WHEREAS, the Company has advised the Banks that certain Events of Default
will arise on August 14, 2000 as a result of the Company's failure to comply
with certain financial covenants contained in the Credit Agreement with respect
to the fiscal quarter of the Company ended June 30, 2000;

      WHEREAS, the Banks have advised the Company that they are willing to waive
such Events of Default only if the Company, the Credit Support Parties and the
Guarantors accept the amendments to the Credit Agreement set forth herein, which
amendments include, without limitation, (i) the revision of certain financial
covenants and (ii) the addition of an event of default

                                      -1-
<PAGE>
that occurs if the Company makes scheduled principal payments against its
subordinated indebtedness at any time that the Company is not in compliance with
the financial covenants currently set forth in the Credit Agreement;

      NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

      SECTION 1.  AMENDMENT TO THE CREDIT AGREEMENT

      1.1   AMENDMENTS TO SECTION 1.1: DEFINITIONS.

            The definition of "EBITDA" is hereby deleted in its entirety and the
following is substituted therefor:

            ""EBITDA" means, for any period, the consolidated pre-tax income for
            such period, plus the aggregate amount which was deducted for such
            period in determining such consolidated, pre-tax income in respect
            of Interest Expense (including amortization of debt discount,
            imputed interest and capitalized interest), depreciation and
            amortization, provided, the calculations of EBITDA after the
            acquisition of assets or entities permitted under Section 8.5(d)
            shall include pro forma adjustments consistent with the regulations
            and practices of the United States Securities and Exchange
            Commission (whether or not applicable) to account for such acquired
            entity's historical EBITDA for the relevant period or similar
            adjustments in the case of an asset acquisition. For the second
            fiscal quarter of 2000, (and only for the second fiscal quarter of
            2000) an amount, not in excess of $5,500,000, of non-cash unusual
            charges incurred during the second fiscal quarter of 2000 may be
            added back to determine EBITDA."

            The definition of "Financial Compliance" is added in proper
alphabetical order to read as follows:

            ""FINANCIAL COMPLIANCE" means that the Company is in compliance with
            the following financial standards and has delivered the compliance
            certificate in accordance with SECTION 7.1(D) evidencing such
            compliance for the most recent period:

                  (1) The Company will not as of the last day of any fiscal
            quarter permit the ratio of its total Funded Senior Debt on such day
            to EBITDA for the rolling four (4) quarters then ended to be greater
            than 2.50 to 1.00 at any time during the term hereof.

                                      -2-
<PAGE>
                  (2) The Company will not as of the last day of any fiscal
            quarter permit the ratio of (i) its Total Funded Debt on such day to
            (ii) EBITDA for the four consecutive fiscal quarters then ended to
            be greater than 3.50 to 1.00 at any time during the term hereof.

                  (3) The Company will not permit as of the last day of any
            fiscal quarter the ratio of EBITDA for the four consecutive fiscal
            quarters ended on such day to cash Interest Expense for such period
            to be less than 4.00 to 1.00. This interest coverage ratio shall be
            calculated on a rolling four quarter basis.

            The definition of "Margin" is hereby amended by deleting the grid
contained in the definition of "Margin" and substituting the following therefor:

-------------------------------------------------------------------------------
 TOTAL FUNDED DEBT/EBITDA       EURODOLLAR RATE           ALTERNATE BASE
          RATIO                     ADVANCE                RATE ADVANCE
-------------------------------------------------------------------------------
greater than or equal to 3.50       3.000 %                   1.750 %
-------------------------------------------------------------------------------
greater than or equal to 3.00
  but less than 3.50                2.750 %                   1.500 %
-------------------------------------------------------------------------------
greater than or equal to 2.50
  but less than 3.00                2.250 %                   1.000 %
-------------------------------------------------------------------------------
greater than or equal to 2.00
  but less than 2.50                2.000 %                   0.750 %
-------------------------------------------------------------------------------
greater than or equal to 1.50
  but less than 2.00                1.750 %                   0.500 %
-------------------------------------------------------------------------------
greater than or equal to 1.00
  but less than 1.50                1.500 %                   0.250 %
-------------------------------------------------------------------------------
less than 1.00                      1.250 %                   0.250 %
-------------------------------------------------------------------------------

      1.2   AMENDMENT TO SECTION 4.1: FEES.

            Section 4.1(a) of the Credit Agreement is hereby amended by deleting
the grid contained in Section 4.1(a) and substituting the following therefor:

                FUNDED DEBT/EBITDA         COMMITMENT FEE RATE
            -------------------------------------------------------

            greater than or equal to 3.5x           50
            greater than or equal to 3.0x
              and less than 3.5x                    50
            greater than or equal to 2.5x
              and less than 3.0x                    50
            greater than or equal to 2.0x
              and less than 2.5x                  37.5
            greater than or equal to 1.5x
              and less than 2.0x                  37.5
            greater than or equal to 1.0x
              and less than 1.5x                  37.5
            less than 1.0x                          25

                                      -3-
<PAGE>
      1.3   AMENDMENT TO SECTION 8.5: INVESTMENTS.

            Section 8.5(d) of the Credit Agreement is hereby amended by deleting
the reference to "$15,000,000" contained therein and substituting "$5,000,000"
therefor.

      1.4   AMENDMENT TO SECTION 8.8: CHANGE OF CERTAIN INDEBTEDNESS.

            Section 8.8 is hereby deleted in its entirety and the following
substituted therefor:

            "The Company will not, and will not permit any of its Subsidiaries,
            after the occurrence and during the continuance of any Event of
            Default or at any time the Company is not in Financial Compliance,
            to make any voluntary prepayments of principal or interest on any
            other of the Company's Indebtedness."

      1.5   AMENDMENT TO SECTION 8.10: FUNDED SENIOR DEBT TO EBITDA RATIO.

            Section 8.10 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of its total Funded Senior Debt on such day to
            EBITDA for the four consecutive fiscal quarters then ended to exceed
            the amounts set forth below:

                     DATE(S)                 RATIO
                     -------                 -----
                     09/30/00                3.30x
               12/31/00 - 03/31/01           3.15x
             06/30/01 and thereafter         3.00x

      For purposes of calculating the ratio in this Section 8.10, the
      calculation of Funded Senior Debt after the acquisition of assets or
      entities permitted under this Agreement shall

                                      -4-
<PAGE>
      include adjustments to account for the total Funded Senior Debt of or
      applicable to such acquired assets or entities during the relevant period.

      1.6   AMENDMENT TO SECTION 8.11: TOTAL FUNDED DEBT TO EBITDA RATIO.

            Section 8.11 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of (i) its Total Funded Debt on such day to (ii)
            EBITDA for the four consecutive fiscal quarters then ended to exceed
            the amounts set forth below:

                     DATE(S)                 RATIO
                     -------                 -----
                     09/30/00                4.00x

               12/31/00 - 03/31/01           3.90x

             06/30/01 and thereafter         3.65x

      For purposes of calculating the ratios in SECTIONS 8.10 and 8.11, the
      calculations of Total Funded Debt and Funded Senior Debt after the
      acquisition of assets or entities permitted under this Agreement shall
      include adjustments to account for such acquired entity's Total Funded
      Debt immediately prior to the acquisition and Funded Senior Debt for the
      relevant period."

      1.7   AMENDMENT TO SECTION 8.14: INTEREST COVERAGE RATIO.

            Section 8.14 of the Credit Agreement is deleted in its entirety and
the following is substituted therefor:

            "The Company will not, as of the last day of any fiscal quarter,
            permit the ratio of EBITDA for the four consecutive fiscal quarters
            then ended to cash Interest Expense for such period to be less than
            the amounts set forth below:

                     DATE(S)                 RATIO
                     -------                 -----
                     09/30/00                3.20x
                     12/31/00                3.00x
                     03/31/01                2.80x
             06/30/01 and thereafter         2.90x

                                      -5-
<PAGE>
      1.8   ADDITION OF SECTION 8.15: MINIMUM EBITDA.

            A new Section 8.15 is hereby added to read as follows:

            "Section 8.15 MINIMUM EBITDA. The Company will not, as of the last
            day of any fiscal quarter specified in the table below, permit its
            EBITDA for the three (3) months then ended to be less than the
            amounts set forth below:

                     DATE(S)            QUARTERLY EBITDA
                     -------            ----------------
                     09/30/00             $22,000,000
                     12/31/00             $21,500,000
                     03/31/01             $15,000,000
                     06/30/01             $18,500,000
                     09/30/01             $23,500,000

      1.9   AMENDMENTS TO SECTION 10.1:  EVENTS OF DEFAULT.

            Section 10.1(d) of the Credit Agreement is hereby amended by adding
the following language at the end of Section 10.1(d):

            ", provided that, the failure of the Company to make the Restricted
            Subordinated Debt Payments proscribed by SECTION 10.1(J) shall not
            constitute an Event of Default"

            A new Section 10.1(j) is hereby added to read as follows:

            "(j) During any period in which the Company is not in Financial
            Compliance, the Company shall make any Restricted Subordinated Debt
            Payments which (but for the operation of this SECTION 10.1(J), would
            be permitted by SECTION 8.6(C), PROVIDED, the Company's $1,600,000
            payment of scheduled third fiscal quarter of 2000 Subordinated Debt
            made on July __, 2000 shall not be an Event of Default hereunder."

      1.10  WAIVER OF EVENTS OF DEFAULT

                                      -6-
<PAGE>
            The provisions of Section 8.6(ii)(c) are hereby waived by the Banks,
retroactively to the extent required to avoid an Event of Default under the
Credit Agreement caused solely by the Borrowers making payments on Subordinated
Debt during the continuation of an Event of Default during the second fiscal
quarter of 2000. The provisions of Section 8.10 are hereby waived by the Banks,
retroactively to the extent required to avoid an Event of Default under the
Credit Agreement caused solely by the Borrowers exceeding the maximum Funded
Senior Debt to EBITDA Ratio during the second fiscal quarter of 2000. This
limited waiver shall not constitute a waiver of any other Default or Event of
Default except as expressly set forth herein.

      SECTION 2.  CONDITIONS TO EFFECTIVENESS

      Section 1 of this Amendment shall become effective only upon the prior or
concurrent satisfaction of all of the following conditions precedent (the date
of satisfaction of such conditions being referred to herein as the "AMENDMENT
EFFECTIVE DATE"):

      A. On or before the Amendment Effective Date, the Company shall deliver to
the Banks (or to the Agents for the Banks) the following, each, unless otherwise
noted, dated the Amendment Effective Date:

            1. A certificate of the secretary or an assistant secretary of the
Company and of the Guarantors certifying: (i) that the resolutions of the Board
of Directors of the Company and of the Guarantors approving and authorizing the
execution, delivery, and performance of the Amended Credit Agreement and
amendments thereto delivered on the Effective Date, are in full force and effect
and have not been amended, supplemented or otherwise modified since December 14,
1998 and (ii) the signature and incumbency of the officers of each of the
Company and of the Guarantors who are authorized to sign on behalf of the
Company or such Guarantor.

            2. Counterparts of this Amendment executed by the Majority Banks and
each of the other parties hereto.

            3. Payment to each of the Banks approving this Amendment, subject to
Majority Bank approval, of an amendment fee equal to fifteen one hundredths of
one percent (0.15%) of such Bank's Commitment if approved by such Bank prior to
5:00 P.M. (CST) August 9, 2000. Payment to each of the Banks approving this
Amendment, subject to Majority Bank approval, of an amendment fee equal to
twelve and one-half one hundredths of one percent (0.125%) of such Bank's
Commitment if approved by such Bank prior to 5:00 P.M. (CST) August 11, 2000.

      B. On or before the Amendment Effective Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agents, acting on behalf of the Banks, and

                                      -7-
<PAGE>
their counsel shall be satisfactory in form and substance to the Agents and such
counsel, and the Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as the Agents may
reasonably request.

      SECTION 3.  REPRESENTATIONS AND WARRANTIES

      In order to induce the Banks to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, the Company and each Guarantor
party hereto represents and warrants to each Bank that the following statements
are true, correct and complete as to itself:

      A. CORPORATE POWER AND AUTHORITY. The Company and each Guarantor party
hereto has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated hereby and the Company
and each Guarantor party hereto has all requisite corporate power and authority
to carry out the transactions contemplated by, and perform its obligations
under, the Amended Credit Agreement.

      B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Credit Agreement have been duly
authorized by all necessary corporate action on the part of the Company and each
Guarantor party hereto, as the case may be.

      C. NO CONFLICT. The execution and delivery by the Company and each
Guarantor party hereto of this Amendment and the performance by the Company and
each Guarantor of this Amendment and the performance by the Company of the
Amended Credit Agreement do not and will not (i) violate any provision of any
law or any governmental rule or regulation applicable to the Company or any of
its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of the
Company or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on the Company or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any material agreement (other than
failure to pay the notes evidencing the Subordinated Debt in acordance with this
Amendment) to which the Company or any of its Subsidiaries is a party or by
which it is bound or to which it is subject, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries (other than any Liens created under any of
the Loan Documents in favor of the Agents on behalf of the Banks), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any material agreement to which the Company or any of its Subsidiaries is
a party or by which it is bound or to which it is subject.

      D. GOVERNMENTAL CONSENTS. The execution and delivery by the Company and
each Guarantor party hereto of this Amendment and the performance by the Company
and each Guarantor of this Amendment and the performance by the Company and each
Guarantor of the Amended Credit

                                      -8-
<PAGE>
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.

      E. BINDING OBLIGATION. This Amendment has been duly executed and delivered
by the Company and each Guarantor party hereto and this Amendment and the
Amended Credit Agreement are the legally valid and binding obligations of the
Company and each Guarantor, enforceable against the Company and each Guarantor
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.

      F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM AMENDED CREDIT
AGREEMENT. The representations and warranties contained in Article VI of the
Amended Credit Agreement are and will be true, correct and complete in all
material respects on and as of the Amendment Effective Date to the same extent
as though made on and as of that date, except (i) to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date, and (ii) to the extent such representations and warranties
relate to a default of any Subordinated Debt resulting from a failure to pay the
notes evidencing such Subordinated Debt in accordance with this amendment
resulting from the Company not being in Financial Compliance.

      G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would, after giving effect to this Amendment, constitute an Event of
Default or a Default.

      SECTION 4.  ACKNOWLEDGMENT AND CONSENT

      The Company is a party to certain Collateral Documents pursuant to which
the Company has created Liens in favor of the Agents on certain Collateral to
secure the Obligations. Each of the Guarantors party hereto is a party to
certain Collateral Documents and the Guaranty, pursuant to which each such
Guarantor has (i) guarantied the Obligations and (ii) created Liens in favor of
the Administrative Agent on certain Collateral to secure the Guaranteed
Obligations of such Guarantor under the Guaranty. The Guarantors party hereto
are collectively referred to herein as the "CREDIT SUPPORT PARTIES", and the
Collateral Documents and the Guaranty are collectively referred to herein as the
"CREDIT SUPPORT DOCUMENTS".

      Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement, the Collateral Documents and the
Guaranty and this Amendment and consents to the further amendment of the Credit
Agreement effected pursuant to this Amendment. Each Credit Support Party hereby
confirms that each Credit Support Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to guaranty or secure,
as the case may be, to the fullest extent possible the payment and performance

                                      -9-
<PAGE>
of all "Obligations," "Guarantied Obligations" and "Secured Obligations," as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance of
all such "Obligations," "Guarantied Obligations" or "Secured Obligations," as
the case may be, in respect of the Obligations of the Company now or hereafter
existing under or in respect of the Amended Credit Agreement and the Notes.

      Each Credit Support Party acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Amended Credit
Agreement and the other Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Amendment Effective Date to the same extent as though made on and as
of that date, except (i) to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date, and (ii)
to the extent such representations and warranties relate to a default of any
Subordinated Debt resulting from a failure to pay the notes evidencing such
Subordinated Debt in accordance with this amendment resulting from the Company
not being in Financial Compliance.

      Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit Support
Party is not required by the terms of the Credit Agreement or any other Loan
Document to consent to the amendments to the Credit Agreement effected pursuant
to this Amendment and (ii) nothing in the Amended Credit Agreement, this
Amendment or any other Loan Document shall be deemed to require the consent of
such Credit Support Party to any future amendments to the Amended Credit
Agreement.

      SECTION 5.  MISCELLANEOUS

      A. REFERENCE TO AND EFFECT ON THE AMENDED CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

            (i) On and after the Amendment Effective Date, each reference in the
      Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
      words of like import referring to the Credit Agreement, and each reference
      in the other Loan Documents to the "Credit Agreement", "thereunder",
      "thereof" or words of like import referring to the Credit Agreement shall
      mean and be a reference to the Amended Credit Agreement.

            (ii) Except as specifically amended by this Amendment, the Credit
      Agreement and the other Loan Documents shall remain in full force and
      effect and are hereby ratified and confirmed.

                                      -10-
<PAGE>
            (iii) The execution, delivery and performance of this Amendment
      shall not, except as expressly provided herein, constitute a waiver of any
      provision of, or operate as a waiver of any right, power or remedy of any
      Agent or any Bank under, the Credit Agreement or any of the other Loan
      Documents.

      B. FEES AND EXPENSES. Company acknowledges that all reasonable costs, fees
and expenses as described in Section 12.4 of the Credit Agreement incurred by
the Agents and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the Company.

      C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

      D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

      E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1, which
shall become effective upon the satisfaction of each of the conditions set forth
in Section 2) shall become effective upon the execution of a counterpart hereof
by the Company, the Credit Support Parties, the Guarantors and the Majority
Banks and receipt by the Company and the Agents of written or telephonic
notification of such execution and authorization of delivery of such
counterpart.

                  [Remainder of page intentionally left blank]

                                      -11-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.

                                    COMPANY:

                                    COMFORT SYSTEMS USA, INC.


                                    By: ________________________________________
                                            J. Gordon Beittenmiller
                                            Senior Vice President and
                                            Chief Financial Officer
<PAGE>
                              CREDIT SUPPORT PARTIES AND GUARANTORS:

                                    ADAMS MECHANICAL SERVICES, INC.
                                    ACCURATE AIR SYSTEMS, INC.
                                    AIR POWER SYSTEMS, INC.
                                    ALLSTATE MECHANICAL, INC.
                                    ATLAS AIR CONDITIONING COMPANY
                                    ATLAS COMFORT SERVICES USA, INC.
                                    BATCHELOR'S MECHANICAL CONTRACTORS, INC.
                                    BCM CONTROLS CORPORATION
                                    CEL, INC.
                                    CONTRACT SERVICE, INC.
                                    DESIGN MECHANICAL INCORPORATED
                                    DYNASTAR, INC.
                                    EASTERN HEATING & COOLING, INC.
                                    EASTERN REFRIGERATION CO., INC.
                                    EDS, INC.
                                    F&G MECHANICAL CORPORATION
                                    FRED HAYES MECHANICAL CONTRACTORS, INC.
                                    FREEWAY HEATING & AIR CONDITIONING, INC.
                                    GMS AIR CONDITIONING, INC.
                                    HELM CORPORATION
                                    HILLCREST SHEET METAL, INC.
                                    JAMES AIR CONDITIONING ENTERPRISES, INC.
                                    KUEMPEL SERVICE, INC.
                                    LAWRENCE SERVICE, INC.
                                    LOWRIE ELECTRIC CO., INC.
                                    MANDELL MECHANICAL CORPORATION
                                    MARTIN HEATING, INC.
                                    MEADOWLANDS FIRE PROTECTION CORP.
                                    MECHANICAL SERVICE GROUP, INC.
                                    MJ MECHANICAL SERVICES, INC.
                                    NOGLE & BLACK MECHANICAL, INC.
                                    NORTH JERSEY MECHANICAL CONTRACTORS, INC.
<PAGE>
                                    OK SHEET METAL & AIR CONDITIONING, INC.
                                    QUALITY AIR HEATING & COOLING, INC.
                                    RHC ACQUISITION CORP.
                                    RIVER CITY MECHANICAL, INC.
                                    SALMON & ALDER, INC.
                                    SEASONAIR, INC.
                                    S&K AIR CONDITIONING CO., INC.
                                    S.M. LAWRENCE COMPANY, INC.
                                    STANDARD HEATING & AIR CONDITIONING COMPANY
                                    TECH HEATING AND AIR CONDITIONING, INC.
                                    TECH MECHANICAL, INC.
                                    TEMP-RIGHT SERVICE, INC.
                                    TRI-CITY MECHANICAL, INC.
                                    TROOST SERVICE CO.
                                    WALKER-J-WALKER, INC.
                                    WESTERN BUILDING SERVICES, INC.


                                    By: ________________________________________
                                                  J. Gordon Beittenmiller
                                                  Vice President
<PAGE>
AMOUNT OF COMMITMENT:            ADMINISTRATIVE AGENT/BANK:

$45,000,000.00                   BANK ONE, TEXAS, N.A.,
                                 AS ADMINISTRATIVE AGENT AND INDIVIDUALLY
                                 AS A BANK

                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________

AMOUNT OF COMMITMENT:            SYNDICATION AGENT/BANK:

$35,000,000.00                   BANKERS TRUST COMPANY,
                                 AS SYNDICATION AGENT AND INDIVIDUALLY AS A BANK



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            DOCUMENTATION AGENT/BANK:

$42,500,000.00                   BANK OF AMERICA, N.A. (FORMERLY KNOWN AS
                                 NATIONSBANK, N.A.), AS DOCUMENTATION AGENT
                                 AND INDIVIDUALLY, AS A BANK

                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________
<PAGE>
AMOUNT OF COMMITMENT:            CO-AGENT/BANK:

$25,000,000.00                   CREDIT LYONNAIS, NEW YORK BRANCH,
                                 AS CO-AGENT AND INDIVIDUALLY, AS A BANK



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            CO-AGENT/BANK:

$25,000,000.00                   NATIONAL CITY BANK,
                                 AS CO-AGENT AND INDIVIDUALLY, AS A BANK



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            CO-AGENT/BANK:

$25,000,000.00                   THE BANK OF NOVA SCOTIA, AS CO-AGENT AND
                                 INDIVIDUALLY, AS A BANK

                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________
<PAGE>
AMOUNT OF COMMITMENT:            BANK:

$20,000,000.00                   UNION BANK OF CALIFORNIA, N.A.



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            BANK:

$15,000,000.00                   COMERICA BANK



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            BANK:

$5,000,000.00                    BANK POLSKA, KASA OPIEKI S.A., PEKOA S.A.
                                 GROUP, NEW YORK BRANCH

                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________
<PAGE>
AMOUNT OF COMMITMENT:            BANK:

$30,000,000.00                   FIRSTAR BANK, NATIONAL ASSOCIATION



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            BANK:

$20,000,000.00                   LASALLE BANK NATIONAL ASSOCIATION



                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________


AMOUNT OF COMMITMENT:            BANK:

$12,500,000.00                   GENERAL ELECTRIC CAPITAL
                                 CORPORATION

                                 By: ___________________________________________
                                 Name: _________________________________________
                                 Title: ________________________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>7
<FILENAME>0007.txt
<TEXT>

                                                                    EXHIBIT 10.6

                                    AMENDMENT
                                     TO THE
                            COMFORT SYSTEMS USA, INC.
                        1998 EMPLOYEE STOCK PURCHASE PLAN

      This Amendment to the Comfort Systems USA, Inc. (the "Company") 1998
Employee Stock Purchase Plan (the "Amendment") is executed pursuant to Section
8.1 of the Company's 1998 Employee Stock Purchase Plan (the "Plan"). All
capitalized and undefined terms used herein shall have the meanings ascribed to
such terms in the Plan.

      WHEREAS, the Company's Board of Directors (the "Board") is authorized by
Section 8.1 of the Plan to amend the Plan from time to time, subject to any
required stockholder approval of any such amendments; and

      WHEREAS, at a meeting of the Board on March 3, 2000 the Board authorized
an increase in the number of shares authorized for issuance under the Purchase
Plan by 600,000; and

      WHEREAS, at the annual meeting of stockholders held on May 18, 2000, the
Company's stockholders approved the Amendment.

      NOW, THEREFORE, in order to amend Section 4.1 of the Purchase Plan as
authorized by the Board and approved by the stockholders:

      1. The first sentence of Section 4.1 of the Purchase Plan is hereby
revised in its entirety to read as follows:

            "Subjects to the adjustments in Sections 4.2 and 4.3, an aggregate
            of Nine Hundred Thousand (900,000) shares of Common Stock shall be
            available for purchase by Participants pursuant to the provisions of
            the Plan."

      2. Except as amended hereby, the terms and provisions of the Plan shall
remain in full force and effect, and the Plan and this Amendment shall be read,
taken and construed as one and the same instrument.

            IN WITNESS WHEREOF, and as conclusive evidence of the adoption of
the foregoing Amendment to the Plan by the directors of the Company and approval
and adoption thereof by the stockholders of the Company, the Company has caused
this Amendment to be duly executed in its name and behalf by its proper officers
thereunto duly authorized as of the 20th day of May, 2000.

                                    COMFORT SYSTEMS USA, INC.

                                    By:/s/ William George
                                           WILLIAM GEORGE
                                           SENIOR VICE PRESIDENT
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>8
<FILENAME>0008.txt
<TEXT>

                                                                    EXHIBIT 10.7

                            COMFORT SYSTEMS USA, INC.
                               2000 INCENTIVE PLAN

1.    PURPOSE

      The purpose of this Incentive Plan (the "Plan") is to advance the
interests of Comfort Systems USA, Inc. (the "Company") and its subsidiaries by
enhancing their ability to attract and retain employees and other persons or
entities who are in a position to make significant contributions to the success
of the Company and its subsidiaries through ownership of shares of the common
stock, no par value per share (the "Stock"), of the Company and cash incentives.

      The Plan is intended to accomplish these goals by enabling the Company to
grant awards in the form of Options, Restricted Stock Awards, or Performance
Awards (each as defined below), or combinations thereof (each, an "Award"), as
more fully described below.

2.    ADMINISTRATION

      The Plan will be administered by the Board of Directors of the Company
(the "Board"). The Board will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock, if any, subject
to the Award; (c) determine the type or types of each Award; (d) determine the
terms and conditions of each Award; (e) waive compliance by a holder of an Award
with any obligations to be performed by such holder under an Award and waive any
terms or conditions of an Award; (f) amend or cancel an existing Award in whole
or in part (and if an Award is canceled, grant another Award in its place on
such terms and conditions as the Board shall specify), except that the Board may
not, without the consent of the holder of an Award, take any action under this
clause with respect to such Award if such action would adversely affect the
rights of such holder; (g) prescribe the form or forms of instruments that are
required or deemed appropriate under the Plan, including any written notices and
elections required of Participants (as defined below), and change such forms
from time to time; (h) adopt, amend and rescind rules and regulations for the
administration of the Plan; and (i) interpret the Plan and decide any questions
and settle all controversies and disputes that may arise in connection with the
Plan. Such determinations and actions of the Board, and all other determinations
and actions of the Board made or taken under authority granted by any provision
of the Plan, will be conclusive and will bind all parties. Nothing in this
paragraph shall be construed as limiting the power of the Board to make
adjustments under Section 7.2 or Section 8.6.

                                       1
<PAGE>
      The Board may, in its discretion, delegate some or all of its powers with
respect to the Plan to a committee (the "Committee"), in which event all
references (as appropriate) to the Board hereunder shall be deemed to refer to
the Committee. The Committee, if one is appointed, shall consist of at least two
directors. A majority of the members of the Committee shall constitute a quorum,
and all determinations of the Committee shall be made by a majority of its
members. On and after registration of the Stock under the Securities Exchange
Act of 1934 (the "1934 Act"), the Board shall delegate the power to select
directors and officers to receive awards under the Plan and the timing, pricing,
and amount of such awards to a committee, all members of which shall be
disinterested persons within the meaning of Rule 16b-3 under the 1934 Act and
"outside directors" within the meaning of section 162(m)(4)(c)(i) of the
Internal Revenue Code of 1986, as amended (the "Code").

3.    EFFECTIVE DATE AND TERM OF PLAN

      The Plan will become effective on the date on which it is approved by the
stockholders of the Company. Awards may be made prior to such stockholder
approval (but after Board adoption of the Plan) if made subject thereto. No
Award may be granted under the Plan after April 16, 2010, but Awards previously
granted may extend beyond that date.

4.    SHARES SUBJECT TO THE PLAN

      Subject to adjustment as provided in Section 8.6, the aggregate number of
shares of Stock that may be delivered pursuant to Awards granted under the Plan
shall not exceed 3,500,000. If any Award is forfeited or otherwise terminated
without the delivery of Stock, shares of Stock are surrendered or withheld from
any Award to satisfy any income tax withholding obligations, or if any Award
payable in Stock or cash is satisfied in cash rather than Stock, then the number
of shares of Stock covered by such terminated or forfeited Award or which are
equal to the number of shares surrendered, withheld or terminated or for which
cash was substituted will be available for future grants under this Plan.

      Subject to Section 8.6(a), the maximum number of shares of Stock as to
which Options may be granted to any Participant in any one calendar year is
1,000,000, which limitation shall be construed and applied consistently with the
rules under Section 162(m) of the Code.

      Stock delivered under the Plan may be either authorized but unissued Stock
or previously issued Stock acquired by the Company and held in treasury. No
fractional shares of Stock will be delivered under the Plan.

                                       2
<PAGE>
5.    ELIGIBILITY AND PARTICIPATION

      Each key employee of the Company or any of its subsidiaries (an
"Employee") and each other person or entity (including without limitation
non-Employee directors of the Company or a subsidiary of the Company) who, in
the opinion of the Board, is in a position to make a significant contribution to
the success of the Company or its subsidiaries, will be eligible to receive
Awards under the Plan (each such Employee, person or entity receiving an Award,
"a Participant"). A "subsidiary" for purposes of the Plan shall mean a
corporation in which the Company owns, directly or indirectly, stock possessing
50% or more of the total combined voting power of all classes of stock.

6.    TYPES OF AWARDS

      6.1. OPTIONS

      (A) NATURE OF OPTIONS. The Board may grant Awards giving the recipient the
right on exercise thereof to purchase Stock (each, an "Option").

      Both "incentive stock options," as defined in Section 422(b) of the Code
(any Option intended to qualify as an incentive stock option under the Code
being hereinafter referred to as an "ISO"), and Options that are not ISOs, may
be granted under the Plan. ISOs shall be awarded only to Employees. An Option
awarded under the Plan shall be a non-ISO unless it is expressly designated as
an ISO at time of grant.

      (B) EXERCISE PRICE. The exercise price of an Option will be determined by
the Board subject to the following:

            (i) The exercise price of an ISO or an Option intended to qualify as
      performance based compensation under Section 162(m) of the Code shall not
      be less than 100% (110% in the case of an ISO granted to a ten-percent
      stockholder) of the fair market value of the Stock subject to the Option,
      determined as of the time the Option is granted. For this purpose, "fair
      market value" in the case of ISOs shall have the same meaning as it does
      in the provisions of the Code and the regulations thereunder applicable to
      ISOs; and "ten-percent stockholder" shall mean any participant who at the
      time of grant owns directly, or by reason of the attribution rules set
      forth in Section 424(d) of the Code is deemed to own, stock possessing
      more than 10% of the total combined voting power of all classes of stock
      of the Company or of any of its parent or subsidiary corporations.

            (ii) In no case may the exercise price paid for Stock which is part
      of an original issue of authorized Stock be less than the par value per
      share of the Stock.

      (C) DURATION OF OPTIONS. The latest date on which an Option may be
exercised will be the tenth anniversary (the fifth anniversary in the case of an
ISO granted to a ten-percent stockholder

                                       3
<PAGE>
as defined in 6.1(b) above) of the day immediately preceding the date the Option
was granted, or such earlier date as may have been specified by the Board at the
time the Option was granted.

      (D) EXERCISE OF OPTIONS. An Option will become exercisable at such time or
times, and on such conditions, as the Board may specify. The Board may at any
time and from time to time accelerate the time at which all or any part of an
Option may be exercised. Any exercise of an Option must be in writing, signed by
the proper person and delivered or mailed to the Company, accompanied by (1) any
documents required by the Board and (2) payment in full in accordance with
paragraph (e) below for the number of shares for which the Option is exercised.

      (E) PAYMENT FOR STOCK. Stock purchased on exercise of an Option must be
paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the Board at
or after the grant of the Option or by the instrument evidencing the Option, (i)
through the delivery of shares of Stock which have been held for at least six
months (unless the Board approves a shorter period) and which have a fair market
value equal to the exercise price, (ii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iii) by any combination of the
foregoing permissible forms of payment.

      (F) DISCRETIONARY PAYMENTS. If (i) the fair market value as reasonably
determined by the Board of shares of Stock subject to an Option exceeds the
exercise price of the Option at the time of its exercise and (ii) the person
exercising the Option so requests the Board in writing, the Board may in its
sole discretion cancel the Option and cause the Company to pay in cash or in
shares of Common Stock (at a price per share equal to the fair market value per
share) to the person exercising the Option an amount equal to the difference
between the fair market value of the Stock which would have been purchased
pursuant to the exercise (determined on the date the Option is canceled) and the
aggregate exercise price which would have been paid.

6.2.  RESTRICTED STOCK.

      (A) RESTRICTED STOCK. Subject to the terms and provisions of the Plan, the
Board may grant shares of Stock or allow the purchase shares of Stock in such
amounts and upon such terms and conditions as the Board shall determine subject
to the restrictions, if any, described below ("Restricted Stock").

      (B) RESTRICTED STOCK AGREEMENT. The Board may require, as a condition to
an Award of Restricted Stock (a "Restricted Stock Award"), that a recipient of a
Restricted Stock Award enter into a restricted stock award agreement, setting
forth the terms and conditions of the Award or that the recipient execute other
instruments including, but not limited to, any stockholders agreement of the
Company (any instrument governing the Restricted Stock being a "Restricted Stock
Award Agreement"). In lieu of a Restricted Stock Award Agreement, the Board may
provide the terms and conditions of an Award in a notice to the Participant of
the Award, on the stock certificate

                                       4
<PAGE>
representing the Restricted Stock, in the resolution approving the Award, or in
such other manner as it deems appropriate.

      (C) TRANSFERABILITY AND OTHER RESTRICTIONS. Except as otherwise provided
in this Section 6.2, the shares of Restricted Stock granted herein may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable period or periods, if any, established by the
Board and the satisfaction of any other conditions or restrictions, if any,
established by the Board (such period during which a share of Restricted Stock
is subject to such restrictions and conditions is referred to as the "Restricted
Period"). Except as the Board may otherwise determine under Section 7.1 or
Section 7.2 or except as set forth in the Restricted Stock Award Agreement, if a
Participant dies or suffers a Status Change (as defined at Section 7.2(a)) for
any reason during the Restricted Period, the Company may purchase the shares of
Restricted Stock subject to such restrictions and conditions for the amount of
cash paid by the Participant for such shares; PROVIDED, that any shares of
Restricted Stock for which no cash was paid by the Participant shall be
automatically forfeited to the Company.

      During the Restricted Period, if any, with respect to any shares of
Restricted Stock, the Company shall have the right to retain in the Company's
possession the certificate or certificates representing such shares.

      (D) REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Section
6.2 and subject to any other restrictions on transfer of the Restricted Stock,
including, but not limited to, those restrictions contained in any stockholders
agreement of the Company, a share of Restricted Stock covered by a Restricted
Stock Award shall become freely transferable by the Participant upon completion
of the Restricted Period, if any, including the passage of any applicable period
of time and satisfaction of any conditions to vesting. The Board, in its sole
discretion, shall have the right at any time immediately to waive all or any
part of the restrictions and conditions with regard to all or any part of the
shares held by any Participant.

      (E) VOTING RIGHTS, DIVIDENDS AND OTHER DISTRIBUTIONS. During the
Restricted Period, if any, Participants holding shares of Restricted Stock
granted hereunder may exercise full voting rights and shall receive all regular
cash dividends paid with respect to such shares. Except as the Board shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock, including any dividends
and distributions paid in shares, shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to which they were
paid.

      (F) OTHER AWARDS SETTLED WITH RESTRICTED STOCK. The Board may, at the time
any Award described in this Section 6 is granted, provide that any or all of the
Stock delivered pursuant to the Award will be Restricted Stock.

                                       5
<PAGE>
      (G) NOTICE OF SECTION 83(B) ELECTION. Any Participant making an election
under Section 83(b) of the Code with respect to Restricted Stock must provide a
copy thereof to the Company within 10 days of filing such election with the
Internal Revenue Service.

      6.3. PERFORMANCE AWARDS; PERFORMANCE GOALS.

      (A) NATURE OF PERFORMANCE AWARDS. A performance award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Board) following the
attainment of Performance Goals (as hereinafter defined) (a "Performance
Award"). Performance Goals may be related to personal performance, corporate
performance, departmental performance or any other category or combination of
categories of performance established by the Board. The Board will determine the
Performance Goals, the period or periods during which performance is to be
measured and all other terms and conditions applicable to the Award.

      (B) OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION. The Board may, at the
time any Award described in this Section 6.3 is granted, impose the condition
(in addition to any conditions specified or authorized in this Section 6 or any
other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award. Any such
Award made subject to the achievement of Performance Goals (other than an
Option) shall be treated as a Performance Award for purposes of Section 6.3(c)
below.

      (C) LIMITATIONS AND SPECIAL RULES. In the case of any Performance Award
intended to qualify for the performance-based remuneration exception described
in Section 162(m)(4)(C) of the Code and the regulations thereunder (an "Exempt
Award"), the Board shall in writing preestablish specific Performance Goals. A
Performance Goal must be established prior to passage of 25% of the period of
time over which attainment of such goal is to be measured. "Performance Goal"
means criteria based upon any one or more of the following (on a consolidated,
divisional, subsidiary, line of business or geographical basis or any
combinations thereof): (i) sales; revenues; assets; expenses; earnings before or
after deduction for all or any portion of interest, taxes, depreciation or
amortization, whether or not on a continuing operations or an aggregate or per
share basis; return on equity, investment, capital or assets; inventory level or
turns; one or more operating ratios; borrowing levels, leverage ratios or credit
rating; market share; capital expenditures; cash flow; stock price; stockholder
return; or any combination of the foregoing; or (ii) acquisitions and
divestitures (in whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations; recapitalizations,
restructurings, financings (issuance of debt or equity) and refinancings; or
(iii) any combination of the foregoing. A Performance Goal and targets with
respect thereto determined by the Board need not be based upon an increase, a
positive or improved result or avoidance of loss. The maximum Exempt Award
payable to any Participant in respect of any such Performance Goal for any year
shall not exceed $2,500,000.

                                       6
<PAGE>
7.    EVENTS AFFECTING OUTSTANDING AWARDS

      7.1. TERMINATION OF SERVICE

      If a Participant who is an Employee ceases to be an Employee for any
reason, or if there is a termination (other than by reason of death) of the
consulting, service or similar relationship in respect of which a non-Employee
Participant was granted an Award hereunder (such termination of the employment
or other relationship being hereinafter referred to as a "Status Change"), the
following will apply:

      (a) Except as otherwise determined by the Board, all Options held by the
Participant that were not exercisable immediately prior to the Status Change
shall terminate at the time of the Status Change. Any Options that were
exercisable immediately prior to the Status Change will continue to be
exercisable within the three month period following the Status Change (or such
longer period as the Board may determine), and shall thereupon terminate, unless
the Award provides by its terms for immediate termination in the event of a
Status Change (unless otherwise determined by the Board) or unless the Status
Change results from a discharge for cause (as determined by the Board) below) in
which case all Options shall terminate immediately. In no event, however, shall
an Option remain exercisable beyond the latest date on which it could have been
exercised without regard to this Section 7. For purposes of this paragraph, in
the case of a Participant who is an Employee, a Status Change shall not be
deemed to have resulted by reason of (i) a sick leave or other bona fide leave
of absence approved for purposes of the Plan by the Board, so long as the
Employee's right to reemployment is guaranteed either by statute or by contract,
or (ii) a transfer of employment between the Company and a subsidiary or between
subsidiaries, or to the employment of a corporation (or a parent or subsidiary
corporation of such corporation) issuing or assuming an option in a transaction
to which Section 424(a) of the Code applies.

      (b) Except as otherwise determined by the Board and provided in a
Restricted Stock Award Agreement, all Restricted Stock held by the Participant
at the time of the Status Change which remains subject to restrictions, if any,
pursuant to the Restricted Stock Award or Restricted Stock Award Agreement must
be transferred to the Company (and, in the event the certificates representing
such Restricted Stock are held by the Company, such Restricted Stock will be so
transferred without any further action by the Participant) in accordance with
Section 6.2(c) above.

      (c) Any payment or benefit under a Performance Award to which the
Participant was not irrevocably entitled prior to the Status Change will be
forfeited and the Award cancelled as of the date of such Status Change unless
otherwise determined either by the Board or the terms of the Performance Award
established at the time of grant.

      7.2. CERTAIN CORPORATE TRANSACTIONS.

      Except as otherwise provided by the Committee at the time of grant, in the
event of a consolidation or merger in which the Company is not the surviving
corporation or which results in

                                       7
<PAGE>
the acquisition of substantially all the Company's outstanding Stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all the Company's assets
or a dissolution or liquidation of the Company (a "Covered Transaction"), the
following rules shall apply:

      (a) Subject to paragraph (b) below, all outstanding Awards requiring
          exercise will cease to be exercisable, and all other Awards to the
          extent not fully vested (including Awards subject to conditions not
          yet satisfied or determined) will be forfeited, as of the effective
          time of the Covered Transaction, provided that the Committee may in
          its sole discretion, on or prior to the effective date of the covered
          transaction, (1) make any outstanding Option exercisable in full, (2)
          remove the restrictions from any Restricted Stock, (3) cause the
          Company to make any payment and provide any benefit under any
          Performance Award and (4) remove any performance or other conditions
          or restrictions on any Award; or

      (b) With respect to an outstanding Award held by a participant who,
          following the Covered Transaction, will be employed by or otherwise
          providing services to an entity which is a surviving or acquiring
          entity in the covered transaction or an affiliate of such an entity,
          the Committee may at or prior to the effective time of the covered
          transaction, in its sole discretion and in lieu of the action
          described in paragraph (a) above, arrange to have such surviving or
          acquiring entity or affiliate assume any Award held by such
          participant outstanding hereunder or grant a replacement award which,
          in the judgment of the Committee, is substantially equivalent to any
          Award being replaced.

8.    GENERAL PROVISIONS

      8.1. DOCUMENTATION OF AWARDS.

      Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Board from time to time. Such instruments may be in the form
of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.

                                       8
<PAGE>
      8.2. RIGHTS AS A STOCKHOLDER, DIVIDEND EQUIVALENTS.

      Except as specifically provided by the Plan, the receipt of an Award will
not give a Participant rights as a stockholder; the Participant will obtain such
rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, only upon the issuance of Stock. However, the Board may,
on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Stock subject to the Participant's Award had such Stock been outstanding.
Without limitation, the Board may provide for payment to the Participant of
amounts representing such dividends, either currently or in the future, or for
the investment of such amounts on behalf of the Participant.

      8.3. CONDITIONS ON DELIVERY OF STOCK.

      The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove any restriction from shares previously delivered under
the Plan (a) until all conditions of the Award have been satisfied or removed,
(b) until, in the opinion of the Company's counsel, all applicable federal and
state laws and regulations have been complied with, (c) if the outstanding Stock
is at the time listed on any stock exchange or The Nasdaq Stock Market, until
the shares to be delivered have been listed or authorized to be listed on such
exchange or market upon official notice of notice of issuance, and (d) until all
other legal matters in connection with the issuance and delivery of such shares
have been approved by the Company's counsel. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act and may require that the certificates evidencing such
Stock bear an appropriate legend restricting transfer.

      If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.

      8.4. TAX WITHHOLDING.

      The Company will withhold from any cash payment made pursuant to an Award
an amount sufficient to satisfy all federal, state and local withholding tax
requirements (the "withholding requirements").

      In the case of an Award pursuant to which Stock may be delivered, the
Board will have the right to require that the Participant or other appropriate
person remit to the Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the Board with regard
to such requirements, prior to the delivery of any Stock or removal of
restrictions thereon. If and to the extent that such withholding is required,
the Board may permit the Participant or such other person to elect at such time
and in such manner as the Board provides to have the Company hold back from the
shares to be delivered, or to deliver to the Company, Stock having a

                                       9
<PAGE>
value calculated to satisfy the withholding requirement. The Board may make such
share withholding mandatory with respect to any Award at the time such Award is
made to a Participant.

      If at the time an ISO is exercised the Board determines that the Company
could be liable for withholding requirements with respect to the exercise or
with respect to a disposition of the Stock received upon exercise, the Board may
require as a condition of exercise that the person exercising the ISO agree (a)
to provide for withholding under the preceding paragraph of this Section 8.4, if
the Board determines that a withholding responsibility may arise in connection
with tax exercise, (b) to inform the Company promptly of any disposition (within
the meaning of Section 424(c) of the Code) of Stock received upon exercise, and
(c) to give such security as the Board deems adequate to meet the potential
liability of the Company for the withholding requirements and to augment such
security from time to time in any amount reasonably deemed necessary by the
Board to preserve the adequacy of such security.

      8.5. TRANSFERABILITY OF AWARDS.

      Unless otherwise permitted by the Board, no Award may be transferred other
than by will or by the laws of descent and distribution.

      8.6. ADJUSTMENTS IN THE EVENT OF CERTAIN TRANSACTIONS.

      (a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to holders of Stock other than normal cash dividends, after
the effective date of the Plan, the Board will make any appropriate adjustments
to the maximum number of shares that may be delivered under the Plan under the
first paragraph of Section 4 above and to the limits described in the second
paragraph of Section 4 and in Section 6.3(c).

      (b) In any event referred to in paragraph (a), the Board will also make
any appropriate adjustments to the number and kind of shares of Stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Board may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Board that adjustments are
appropriate to avoid distortion in the operation of the Plan; PROVIDED, that
adjustments pursuant to this sentence shall not be made to the extent it would
cause any Award intended to be exempt under Section 162(m)(4)(c) of the Code to
fail to be so exempt.

      (c) In the case of ISOs, the adjustments described in (a) and (b) above
will be made only to the extent consistent with continued qualification of the
Option under Section 422 of the Code (in the case of an ISO) or Section 162(m)
of the Code.

                                       10
<PAGE>
      8.7. EMPLOYMENT RIGHTS, ETC.

      Neither the adoption of the Plan nor the grant of Awards will confer upon
any person any right to continued retention by the Company or any subsidiary as
an Employee or otherwise, or affect in any way the right of the Company or
subsidiary to terminate an employment, service or similar relationship at any
time. Except as specifically provided by the Board in any particular case, the
loss of existing or potential profit in Awards granted under the Plan will not
constitute an element of damages in the event of termination of an employment,
service or similar relationship even if the termination is in violation of an
obligation of the Company to the Participant.

      8.8. DEFERRAL OF PAYMENTS.

      The Board may agree at any time, upon request of the Participant, to defer
the date on which any payment under an Award will be made.

      8.9. PAST SERVICES AS CONSIDERATION.

      Where a Participant purchases Stock under an Award for a price equal to
the par value of the Stock, the Board may determine that such price has been
satisfied by past services rendered by the Participant.

9.    EFFECT, AMENDMENT AND TERMINATION

      Neither adoption of the Plan nor the grant of Awards to a Participant will
affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.

      The Board may at any time or times amend the Plan or any outstanding Award
for any purpose which may at the time be permitted by law, or may at any time
terminate the Plan as to any further grants of Awards, provided that no such
amendment shall materially impair any rights or materially increase any
obligations of the Participant under any Award theretofore made under the Plan
without the consent of the Participant, and provided further that (except to the
extent expressly required or permitted by the Plan) no such amendment will,
without the approval of the stockholders of the Company, effectuate a change for
which stockholder approval is required in order for the Plan to continue to
qualify for the award of ISOs under Section 422 of the Code or for the award of
performance-based compensation under Section 162(m) of the Code.

                                       11
</TEXT>
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<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>9
<FILENAME>0009.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM FORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                               DEC-31-2000
<PERIOD-END>                                    JUN-30-2000
<CASH>                                                8,902
<SECURITIES>                                              0
<RECEIVABLES>                                       354,922
<ALLOWANCES>                                          6,661
<INVENTORY>                                          20,581
<CURRENT-ASSETS>                                    459,544
<PP&E>                                              103,995
<DEPRECIATION>                                      (58,680)
<TOTAL-ASSETS>                                      978,581
<CURRENT-LIABILITIES>                               268,093
<BONDS>                                             282,756
<PREFERRED-MANDATORY>                                     0
<PREFERRED>                                               0
<COMMON>                                                393
<OTHER-SE>                                          419,238
<TOTAL-LIABILITY-AND-EQUITY>                        978,581
<SALES>                                             767,536
<TOTAL-REVENUES>                                    767,536
<CGS>                                               626,031
<TOTAL-COSTS>                                       626,031
<OTHER-EXPENSES>                                    121,162
<LOSS-PROVISION>                                      1,875
<INTEREST-EXPENSE>                                   12,778
<INCOME-PRETAX>                                       6,158
<INCOME-TAX>                                          3,055
<INCOME-CONTINUING>                                   3,103
<DISCONTINUED>                                            0
<EXTRAORDINARY>                                           0
<CHANGES>                                                 0
<NET-INCOME>                                          3,103
<EPS-BASIC>                                            0.08
<EPS-DILUTED>                                          0.08


</TABLE>
</TEXT>
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</SUBMISSION>
