EXHIBIT 10(z)

Union contract dated September 13, 1996, between Everest & Jennings Inc. and
District No. 9, International Association of Machinists and Aerospace Workers.

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                                      INDEX


                                    1996-1999

                              COLLECTIVE AGREEMENT

                                     BETWEEN

                               EVEREST & JENNINGS

                                       AND

                       THE MACHINIST AND AEROSPACE WORKERS
                                IAMAW DISTRICT #9


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ARTICLE                                                                     PAGE
NUMBER            DESCRIPTION                                             NUMBER
------            -----------                                             ------

               Preamble....................................................  1

Article I      Purpose of Agreement........................................  2

Article II     Recognition.................................................  2

Article III    Union Security..............................................  3

Article IV     Non-Discrimination..........................................  7

Article V      Non-Interruption of Work....................................  7

Article VI     Seniority...................................................  7

Article VII    Hours of Work............................................... 11

Article VIII   Overtime.................................................... 12

Article X      Holidays.................................................... 14

Article XI     Vacation.................................................... 15

Article XII    Perfect Attendance Recognition.............................. 17

Article XIII   Insurance and 401(K) Savings Program........................ 17

Article XIV    Bereavement................................................. 19

Article XV     Leave of Absence............................................ 19

Article XVI    Jury Duty................................................... 21

Article XVII   Grievance and Arbitration Procedure......................... 22

Article XVIII  Disciplinary Action......................................... 23

Article XX     Drug Testing................................................ 24

Article XXI    Management Rights........................................... 25

Article XXII   Alteration of Agreement..................................... 26

Article XXIII  Separability................................................ 26

Article XXIV   Notices..................................................... 26

Article XXV    General..................................................... 27

Article XXVI   Duration.................................................... 27

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               Letter of Agreement "Benefit Programs"                       29
               Letter of Agreement "Severance"                              30
               Amendment A                                            31,32,33
               Amendment B                                               34,35
               Amendment C                                               36,37
               Amendment D                                                  38
               Schedule A                                                39,40

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Preamble

      This Agreement made and entered into by and between Everest & Jennings
Inc. and or its successors and assigns, hereinafter referred to as the "Company"
and District No. 9, International Association Of Machinists and Aerospace
Workers, hereinafter referred to as the "Union" is for the joint use and benefit
of the contracting parties as defined and set forth herein.


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Article I   Purpose of Agreement

      It is the intention of the parties that this Agreement will establish
sound and meaningful relations between the Employer and the Union on behalf of
its employees, which will promote harmony and genuine cooperation to the end
that the Employer and the employees may mutually benefit.

Article II  Recognition

Section 1.0

      The Employer hereby recognizes District No. 9, International Association
of Machinists and Aerospace Workers, its designated agents and representatives
and/or assigns pursuant to the Labor-Management Relations Act, as amended, as
the sole and exclusive collective bargaining agent on behalf of all of the
employees of the Company within the bargaining unit as herein defined with
respect to wages, hours, and working conditions.

The term "employee" as used in this Agreement shall mean and include the
following:

      All production, maintenance, and distribution employees employed by the
      Employer at its 3601 Rider Trail South, Earth City, Missouri 63045
      facility. EXCLUDING Customer Service, Engineering, Sales and Marketing,
      office clerical and professional employees, temporary employees, guards,
      and supervisors as defined in the Act.

      The employees represented by the Union and covered by this Agreement are
sometimes hereinafter collectively referred to as the "employees" or
individually as the "employee".

      This Agreement shall be applied in the same manner to all employees.
Whenever reference is made to the male gender, the word "his" etc. refers to
both genders and is used only for expediency.

Section 2.0   Bargaining Unit Work

      Persons not in the bargaining unit shall not perform work ordinarily
performed by bargaining unit employees except in the event of
testing/experimental work, training, and emergency situations including
unexpected absenteeism and equipment breakdown. Notice of the emergency
situation will be given to the Chief Steward or his/her delegate. (An emergency
situation would be a condition that could not reasonably have been anticipated
to occur during the course of normal operations or that threatens serious
consequences to the Employer's operations.)


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Article III Union Security

Section 1.0

      It shall be a condition of continued employment that all employees of the
Employer covered by this Agreement who are members of the Union on the effective
(execution) date of the Agreement shall remain members and those who are not
members on the effective (execution) date of this Agreement shall, not later
than the sixty-first (61st) day (or such longer periods as the parties may
specify) following the effective (execution) date of this Agreement, become and
remain members in the Union. It shall also be a condition of continued
employment that all employees covered by this Agreement and hired on or after
its effective (execution) date shall, not later than the sixty-first (61st) day
following the beginning of such employment, become and remain members in the
Union.

      The Company will within three (3) working days after receipt of notice
from the Union, via certified mail to the Director of Human Resources at the
address of record, discharge any employee who is not in the Union as required by
the preceding paragraph.

      The Union shall indemnify and save the Employer harmless against any and
all claims, demands and suits, or other forms of liability that shall arise out
of or by reason of action taken by the Employer for the purpose of complying
with any of the provisions of this article.

Section 2.0 Dues Check-off

      Upon receipt of signed authorization from the employee involved, the
Employer shall deduct from the employee's pay the initiation and/or
reinstatement fees and dues payable by him/her to the Union during the period
provided for in said authorization. The amount will be certified by the
Financial Secretary of the Local Lodge.

      Deductions shall be made on account of initiation and/or reinstatement
fees and dues payable from the first pay of the employee after receipt of the
authorization. Deductions shall be made on account of Union dues from the first
pay check of the employee after receipt of the authorization and monthly
thereafter from the first pay of the employee in each month.

      Deductions provided in the first paragraph of this article shall be
remitted to the Financial Secretary of the Union no later than the tenth (10th)
day of the month following the month in which the deduction was made and shall
include all deductions made in the previous month. The Employer shall furnish
the Financial Secretary of the Union, monthly, with a record of those for whom
deductions have been made and the amounts of the deductions, and the names of
those employees for whom deductions were not made and the reason they were not
made.


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The parties agree that check-off authorization shall be in the following form:

      Name of Employee___________________________________________
                              (Please Print)

      Dept. No.   ____________  Clock No.________________________

      Social Security No._________________

Date_____________________

      I hereby authorize and direct ________________ to deduct from my pay
beginning with the current month, initiation and reinstatement fees and my
regular monthly Union dues, as certified to the Company by the Financial
Secretary of the Union, on account of membership dues in Lodge No. of the
International Association of Machinists and Aerospace Workers.

      I submit this authorization and assignment with the understanding that it
will be effective and irrevocable for a period of one (1) year from this date,
or up to the termination date (if any) of the current collective bargaining
agreement between and Lodge No.____________ of the International Association of
Machinists and Aerospace Workers, whichever occurs sooner.

      This authorization and assignment shall continue in full force and effect
for yearly periods beyond the irrevocable period set forth above, and each
subsequent yearly period shall be similarly irrevocable unless revoked by me
within five (5) calendar days prior to the date of termination of any
irrevocable period hereof Such revocation shall be effected by written notice,
sent by Registered Mail, Return Receipt Requested, to the Employer and the Union
within such five (5) work day period.

      Signature____________________________________

      If, due to illness or being on vacation, an employee's dues are not
checked off, such deduction will be made no later than the tenth (10th) day of
the month following his return to work.

Section 3.0 Union Committee

      The Company recognizes and will deal with all accredited members of the
Shop Committee, Stewards, and all other Business Representatives in all matters
relating to grievances, interpretations of the Agreement or in any other matters
which affect, or may affect, the relationship between the Company and the Union.

      A written list of the Shop Committee members and Union Stewards shall be
shed to the Company immediately after their designation, and the Union shall
notify the Company promptly of any changes.


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      There shall be one (1) Shop Steward or Committee Person over the employees
in the bargaining, unit. The number and location of Stewards may be adjusted by
mutual agreement of the Company and Union. A Committeeman or Steward will be
permitted to leave his work station to attend grievance meetings provided such
Committeeman or Steward obtains permission from his Supervisor prior to leaving
his workstation and obtains permission from the Supervisor of the area into
which he is going. Such permission shall not be unreasonably withheld. All other
grievance meetings, investigations, and Union business will be conducted during
non-working hours, unless permission is granted by the Company; provided,
however, if any such meeting is called by the Company during working hours, the
Committeeman or Steward will be compensated for the time lost during working
hours.

Section 4.0 New Employees-Notification

      The Employer shall notify the Union in writing within seven (7) days from
date of hiring new employees. The following information will be given:

      1.    Name and home address.
      2.    Social Security number.
      3.    Classification and rate of pay.
      4.    Date of hire.

Copy of the above information will be transmitted to the Local Union.

Section 5.0 Visitation

      A designated Business Representative of the Union may be permitted on the
Company premises for the purpose of conducting his/her duties provided prior
approval is obtained from the Director of Human Resources. It is further
understood every effort will be made to minimize and/or avoid any interference
or disruption with normal production activity. Such designated Business
Representative shall comply with the security regulations as required of all
other facility visitors.

Article IV  Non-Discrimination

      The provisions of this Agreement shall apply to all employees covered by
this Agreement, without discrimination on account of race, color, national
origin, sex, creed, marital status, veteran status, handicap status, or age
contrary to the Age Discrimination Act of 1967, as amended. The Company will not
interfere with, restrain, or coerce the employees covered by this Agreement
because of membership in or activity on behalf of the Union.


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Article V   Non-Interruption of Work

Section 1.0

      During the term of this Agreement, there shall be no lockouts by the
Company and the Union agrees that neither it nor any of the employees covered by
this Agreement will call, cause, instigate, engage in, promote, foment, or
ratify a strike, stoppage, slowdown, or any interference with normal production
of any kind whatsoever.

Section 2.0

      It is agreed that violation of this Article by any employee shall be
considered grounds for disciplinary action up to and including discharge of such
employee for cause.

Article VI  Seniority

Section 1.0 Probationary Period

      A new employee will be a probationary employee for a period of sixty (60)
days after the employee's date of hire. The Company shall have the right, upon
agreement of the Union to extend the probationary period for an additional
thirty (30) days whenever deemed necessary. If an employee is absent from work
due to a Worker's Compensation injury or on Worker's Compensation light or
limited duty, the employee's probationary period shall be extended by the period
of such absence or light duty assignment. During the probationary period, the
Company may discharge a probationary employee, with or without cause, and such
action shall not be the subject matter of any grievance thereunder. Upon
successful completion of the probationary period, the employee's seniority shall
date from the date of hire.

Section 2.0 Definition of Seniority

      Seniority is deemed as an employee's length of service with the Company.
The department that an employee is assigned to at the time of hire is the
employee's "home department". An employee continues to accrue seniority in the
employee's home department. An employee temporarily transferred to another
department remains assigned to the employee's "current department." If an
employee is permanently transferred (via job bid) to another department, then
the employee will thereafter accrue seniority in the reassigned department. An
employee retains all seniority accrued in each department that the employee has
been permanently assigned to during the employee's continuous employment by the
Company.


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Section 3.0

      An employee with seniority rights who is promoted to a non-bargaining unit
position shall retain bargaining unit seniority which was accumulated at the
time he/she was promoted to any non-bargaining unit position. However, all time
spent working in such a non-bargaining unit position will not accumulate
bargaining unit seniority.

      During the initial twelve (12) months immediately following the date of
such promotion, the promoted employee shall retain the right of re-entry into
the bargaining unit in the event of demotion, layoff resulting from lack of work
or should the employee change his/her mind and wish to return to an hourly
bargaining unit job. This right of return with prior seniority rights expires
after twelve (12) months from the date of promotion.

Section 4.0 Termination of Seniority

      The seniority and employment status of an employee shall terminate for any
of the following reasons:

      (a)   Voluntary quit by the employee.
      (b)   Discharge for cause.
      (c)   Three (3) consecutive work days of unreported absence without a bona
            fide reason, acceptable to the Company, for not reporting such
            absence.
      (d)   Failure to report for work within three (3) working days after
            release by the attending doctor when an employee is on a compensable
            injury or illness leave of absence.
      (e)   Failure to report for work when recalled from lay off within five
            (5) working days after the date of notice from the Company.
      (f)   Failure to return to work at the end of any leave of absence.
      (g)   If the employee has performed no work for the Company
            for a period of one year.

Section 5.0 Layoff

      If there is a layoff in a department, an employee that is affected shall
be transferred in inverse order of previous assignments to a department in which
an employee has departmental seniority greater than another employee in that
department. The employee being transferred must be able to demonstrate that the
employee's skill and ability is relatively equal to the incumbent employee to be
displaced by the employee being transferred. If the employee is unable to
displace a less senior employee, m a previously held department the employee
will use their plant seniority to displace the least senior employee in their
home department. If the employee cannot displace the least senior employee in
their home department; then the employee will be


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placed into an entry level position that their plant seniority will allow them
to hold.

Section 6.0 Recall

      The recall of employees from layoff will be in reverse order of the
layoff. An employee recalled to work shall be notified by certified mail, return
receipt requested, addressed to the employee at the employee's last known
address on the Company's records, or the employee may be recalled by telegram or
telephone. Upon receipt of notice to return to work, an employee shall contact
the Company within two (2) working days, indicating the employee's intent to
return to work and shall report for work within five (5) working days after the
date of notice from the Company.

Recall Preference Election Form

In connection with your layoff which was effective __________________, below
indicate your choice for recall.

Please check one.

________    I wish to be recalled to perform any entry level position when my
            seniority would allow me to return.

________    I wish to be recalled to perform in a previously permanently
            assigned position I've held when my seniority would allow me to
            return to such a position.

________    I wish to be recalled to perform my current position 2& when my
            seniority would allow me to return to it.

My signature below acknowledges my understanding of the following recall
conditions:

1.    My recall will be subject to the choice I elected above along with my
      eligibility for recall at such time.

2.    Regardless of my above election I understand I will be recalled to work
      before any new employees are hired into positions for which I am qualified
      to perform.

3.    If I later wish to change my above choice, I must do so in writing in
      person at the Human Resources Department. Any change of my choice will not
      become effective until after five (5) working days following such change.

      Employee Signature:___________________

                               Date:___________________

Section 7.0 Job Bids

      Job bids will be posted for all new or vacant hourly positions.


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      *Bids will be posted on the employee bulletin board for
three (3) working days.

      *Bids will be awarded by seniority under the following
      criteria:

            -The senior employee will be awarded the bid if he/she
            has the skills and ability to perform the job or has
            successfully completed a company training program.

            -If the employee has not been awarded another job bid
            in the last six (6) months.

            -Certification for forklifts must be completed prior to
            the bid coming down.

      *Once a job bid has been taken down and awarded, the awardee cannot
      withdraw from the bid (employee has three (3) days while the bid is on the
      board to investigate the open position), *Once transferred if an employee
      cannot perform the job, he/she will be returned to their previously held
      position if open or any open position for which they are qualified.

Lead positions are chosen by criteria other than seniority. Seniority will be
the determining factor if two (2) candidates are equally qualified in all job
requirements.

      Example: Leads/Trainers

Employee's entire employment record is considered: * Absenteeism

      * Team effort
      * Communication skills
      * Follows company policies
      * Skill (written and/or oral test may be given)

Highly skilled operations are awarded based on skill and ability demonstrated
via performance test. Seniority will be the determining factor if two (2)
candidates are equally qualified in all job requirements.

Job Bids. If a job classification within a department on any shift becomes open,
the senior employee in the same classification will be given the opportunity to
fill the shift opening, provided such a transfer does not adversely affect
normal operations.

Section 8.0 Training

The Company encourages employees to enhance their skills through job relatedness
training programs offered by Everest & Jennings.

Time spent in training programs not offered during the employees normal work
hours Will not be paid by the Company. At no time will overtime premium be paid
for employee attendance in training initiated by the employee.


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Section 9.0

Management reserves the right to temporarily transfer employees to any job
deemed necessary. The Company will make every attempt to select employees based
on seniority, provided they have the skill and ability to perform the work
available.

Temporary transfers shall not exceed thirty (30) work days without mutual
agreement between the Union and the Company. Temporary transfers due to leave of
absence are not bound by the thirty (30) day restriction. The Chief Steward or
designate shall be informed of all temporary transfers.

Article VII Hours of Work

Section 1.0

      Forty (40) hours per week, Monday through Friday, eight (8) consecutive
hours per day exclusive of an unpaid lunch period, shall constitute a normal
work week. It is understood, however, that the Company does not guarantee to
provide forty (40) hours of work weekly or eight (8) hours of work daily to any
employee. At the execution date of this Agreement, the shift starting times are
as follows: 1st shift 6:00 A.M.; 2nd shift 3:00 P.M. The Company may change
these starting times during the term of this Agreement and may vary such
starting times for different individuals, groups or departments, but the Union
will be advised in advance.

Section 2.0 Break/Lunch Periods

      Two (2) rest periods will be given to the employees, one (1) in the first
half of the shift consisting of fifteen (15) minutes, and one in the second half
of the shift consisting of ten (10) minutes. A thirty (30) minute unpaid lunch
period shall be provided as near as practical to the middle of the shift.

Article VIII Overtime

Section 1.0

      All work performed in excess of eight (8) hours during a day or in excess
of forty (40) hours during the work week shall be paid for at the rate of time
and one half (1-1/2). All work performed on Sunday shall be paid for at the rate
of double time, provided such employee worked a minimum of forty (40) hours in
that work week and all scheduled hours on Saturday. Holiday and vacation time
will be considered as a day worked for computation of overtime pay.


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Section 2.0

      There shall be no pyramiding of overtime rates. It is also agreed that
overtime and other premiums shall not be paid more than once for any hour
worked.

Section 3.0 Overtime Notice

      The Company recognizes that it is in the best interest of the employees
and the Company to have as much notice of overtime as possible. The parties also
recognize, however, that because of customer demands, it is not always possible
to give advance notice of overtime. Whenever possible the Company agrees to post
a notice of Saturday or Sunday overtime by 11:00 A.M. on the preceding Thursday;
provided that if conditions change the Company may cancel such overtime on
Friday. Notice of week day overtime will be given at least one full shift in
advance; provided, however, because of customer demands, employee absenteeism,
or other such emergencies, overtime can be scheduled without such notice upon
notification to the Chief Steward or other union official of the reason
therefore. (Second shift employees working a full shift on Friday will not be
required to report until eight (8) hours have elapsed since the end of the shift
on Friday. It must be understood, however, such employees win work the full
scheduled number of hours, as posted, on Saturday).

Section 4.0    Overtime Assignment

      Preference for overtime work shall be given to employees (excluding
probationary employees) regularly employed on such job or operation and where
less than all the employees regularly employed on such job or operation are
needed for overtime work. Preference for such work shall be in the first
instance given to employees in order of seniority. In the event an insufficient
number of employees choose to work the overtime, then the least senior employee
shall be required to work. Nothing in this paragraph shall be construed to
require the Company to pay twice for the same work done; if the parties agree
that a qualified employee has been neglected as to the offer of overtime,
his/her remedy shall be the offer of additional future overtime. Where practical
overtime will be distributed equally on a rotational basis. It is agreed that in
order to equally distribute overtime, the principle of availability for work
must prevail. In view of the above, if an employee is offered overtime, he/she
will be charged with overtime credit as though he/she had actually worked.
Nothing in this Section shall affect the right of the Company to require the
entire plant and/or an entire department or classification to work overtime, in
which case the entire department or classification will be required to work.


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Article IX  Wages

Section 1.0

      Wages will be paid as per Schedule A with the exception of the eleven (11)
red circled employees who are above the job rate as of the date of ratification.

      Effective September 13, 1996  $.15
      Effective September 13, 1997  $.25
      Effective September 13, 1998  $.25

Section 2.0    Reporting Pay

      If an employee reports for work at his/her regularly scheduled starting
time without having been previously notified not to report, he/she shall be
given four (4) hours work at the employees regular rate of pay. If no work is
available the employee shall receive four (4) hours pay; provided, however, that
all of the foregoing shall not be applicable in the case of labor disputes or
contingencies such as an "act of God," fire, power failure, riots, civil
disturbances, or other causes beyond the Company's reasonable control. An
employee who does not elect to do the work assigned to him/her will not receive
any pay under this section.

Section 3.0    Night Shift Premium

      Employees assigned to the second shift will be paid a shift premium of
twenty-five ($.25) per hour for each hour worked on that shift. The third shift
pay differential shall be thirty-five ($.35) per hour.

Article X   Holidays

Section 1.0

      All employees who have completed their probationary period shall be
eligible to receive the following holidays with pay irrespective of the day of
the week on which the holiday falls:

      New Year's Day          Day After Thanksgiving
      Good Friday             Christmas Eve Day
      Memorial Day            Christmas Day
      July 4th                Floating Holiday
      Labor Day               Employee's Birthday
      Thanksgiving Day

Section 2.0

      Should any of the holidays fall on Saturday or Sunday, the day celebrated
as such shall be either Friday or Monday. Regarding the designated Floating
Holiday, each December the


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Company will provide a list of potential Floating Holiday alternatives for the
next year time frame which do not conflict with key production or shipping days
of the Company. Such fists will then be voted on by all Company employees. The
alternative day receiving the most votes will become the designated Floating
Holiday to be celebrated during the next year. Employees shall be entitled to
use their birthday as a holiday. Such holiday shall be taken within the contract
year or be lost.

Section 3.0

      The pay for each holiday shall be eight (8) times the individual
employee's current hourly base rate.

Section 4.0

      An employee who is absent from work without reasonable cause on the
workday before or the workday after a holiday shall not be entitled to holiday
pay. For the purpose of determining eligibility for holiday pay, Saturday work
shall not be considered "the workday before or the workday after" a holiday.

Section 5.0

      Employees on an authorized leave of absence for any reason shall be
entitled to holiday pay unless such employees are absent from work as follows:

      a.    The entire week immediately preceding the week in which
            such paid holiday occurs; and
      b.    The entire week during which such paid holiday occurs;
            and
      c.    The entire week immediately following the week in which
            such paid holiday occurs.

Section 6.0

In the event an employee works on one (1) of the above mentioned legal holidays,
then such employee shall be compensated at the rate of time and one-half (1-1/2)
for those hours worked in addition to all holiday pay to which the employee is
entitled.

Article XI  Vacation

Section 1.0

      Within any calendar year, an employee shall be eligible for vacation as
follows:

      a.    Employees who have completed one (1) year through four (4) years of
            continuous service shall receive two (2) weeks paid vacation.


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      b.    Employees who have completed five (5) years through fourteen (14)
            years of employment shall receive three (3) weeks paid vacation.
      c.    Employees who have completed fifteen (15) through twenty-four (24)
            years of employment shall receive four (4) weeks paid vacation.
      d.    Employees who have completed twenty-five (25) or more
            years of employment shall receive five (5) weeks paid
            vacation.

Section 2.0

      Every effort shall be made by the Employer to provide the opportunity for
employees to take vacations at times desired by them, giving due consideration
to the operating needs of the Employer if requests for vacation periods are
submitted at least s (60) days prior to the first day of the vacation period
request. In the event of a conflict in dates requested, vacation periods shall
be granted on the basis of seniority.

Section 3.0

      In the event that a paid holiday falls within a vacation period, employees
entitled to holiday pay shall be entitled to either receive such holiday pay in
addition to the vacation pay herein provided, or the employee may upon request
add to the vacation the day or days covered by the holiday.

Section 4.0

      Vacation pay shall be paid on the payday immediately preceding the
vacation period. Provided one week's notice is given. Vacation pay for forty
(40) hours or more will be paid via a separate check.

Section 5.0

      Employees who are absent from work due to a leave of absence for any
reason prior to the commencement of a vacation period shall receive pro rata
vacation pay (but not length of vacation) as follows:

Percentage of workdays absent                              Percentage of
in last twelve (12) month period                           vacation
or since last vacation period,                             pay to which
whichever period of time is shorter                        the employee is
                                                           entitled.
-----------------------------------------------            -------------------
      16% or less                                                 100%
      17%-25%                                                      90%
      26%-33%                                                      80%
      34%-42%                                                      70%
      43%-50%                                                      60%


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      51%-60%                                                      50%
      61%-70%                                                      40%
      71%-75%                                                      30%
      76%-80%                                                      20%
      81%-90%                                                      10%
      91%-100%                                                      0%

Section 6.0

      Employees who have completed one (1) year or more of continuous service
with the Company will be granted pro rata vacation pay, if they resign with two
(2) weeks prior notice.

      Employees discharged for cause will not receive pro rata vacation pay.

Section 7.0

      When unforeseen circumstances arise during the normal work week which
cause an employee to miss work, such time away can be used as vacation time
provided a minimum of 48 hours advance notice is given, (this may be modified if
the Company believes that extenuating circumstances justify an exception), and
such time off is limited to four (4) hour or eight (8) hour increments per
instance.

A maximum of five (5) vacation days can be utilized in this fashion per year.
Such circumstances shall include medical, legal, or financial appointments which
cannot be scheduled around normal working hours.

Section 8.0

Vacation must be taken in the year earned. Unused vacation hours will not be
carried over to the next anniversary year.

Section 9.0

Employees who voluntarily work with the consent of the Company during their
vacation periods shall receive pay as aforesaid in addition to regular earned
pay for such periods. Vacation not used prior to the employee's anniversary date
will be paid in a lump sum payment to the employee.

Article XII Perfect Attendance Recognition

      Employees may earn a bonus of two (2) hours of base earnings for each
quarter year (3 months) of perfect attendance. Missing time one quarter will not
jeopardize earnings for any other quarter, but the bonus hours will be forfeited
for that quarter. Quarters of the year are: 1) January, February, March; 2)
April,


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May, June; 3) July, August, September; 4) October, November, and December.

      To earn bonus hours, employees must work an entire quarter without any
lost time. In checking attendance for this program, an absence is defined as any
scheduled work day missed for reasons other than death in the family, jury duty,
or approved leave of absence. A scheduled day includes properly notified
mandatory overtime, and voluntary overtime (when an employee volunteers to work
overtime the time becomes a scheduled work day).

      The Company may pay off at each employee's current hourly rate after each
quarter if requested by the employee. The maximum accumulation of eight hours
per year will be paid out at the end of the fourth quarter reconciliation.

      Employees who have worked an entire year (January I through December 3 1)
without any absence under program rules will be awarded a fifty dollar ($50)
U.S. Savings Bond at a designated time after the year has ended.

Article XIII Insurance and 401(K) Savings Program

Section 1.0    Group Insurance

Eligibility: First of month following successful completion of
probationary period.

      o     Life Insurance/Accidental Death & Dismemberment insurance benefit:
            One (1) times base salary.

      o     Medical Insurance: Point of Service Plan that includes indemnity
            plan benefits, and Preferred Provider Organization (PPO). Current
            Medical Plan includes vision coverage if Preferred Provider is
            utilized.

      o     Dental Insurance: Indemnity coverage up to $1,500 coverage per
            person per year, or Dental Maintenance Organization benefits for
            using preferred providers.

Employee Co-Pay Medical & Dental

                  Base Annual Earnings    Base Annual Earnings
                  of $20,000 or less      over $20,000
Medical
Employee                $1.28/week              $2.57/week
Employee + 1            $3.78/week              $6.3 1 /week
Employee + Family       $7.54/week              $11.96/week

Dental
Employee                $.58/week
Employee + 1            $1.83/week
Employee + Family       $2.67/week


                                       16
<PAGE>

      o     Short Term Disability Insurance: 60% regular weekly base salary to a
            maximum of $250 per week for up to 26 weeks beginning 8th day of
            disability.

      o     Voluntary Supplemental Accidental Death & Dismemberment Program:
            Coverage available from $25,000 to $500,000 at Employee cost.

Section 2.0    401 (k) Savings Plan

Eligibility: The first quarter after reaching age 21 with one (1) year of
service.

Benefits:

      o     Variety of investment options.

      o     Voluntary employee pre-tax contributions from 1%-15% of annual
            salary.

      o     Each employee will be permitted to participate in the Employer's
            401(k) Plan, as currently in effect on the date hereof It being
            expressly understood that the Employer does not currently contribute
            to its 401(k) plan. In the event the Employer contributes to its
            401(k) plan for its non-union employees, the Employer agrees that it
            will also contribute in the same manner for Union employees.

Article XIV Bereavement

If a regular, full-time employee on the active payroll is absent from work for
the sole purpose of arranging for or attending the funeral of a member of his
immediate family, as defined below, the Company shall pay him for eight (8)
hours at his straight time hourly rate for each day of such absence up to a
maximum of three (3) days, provided: (a) The employee notifies the Company of
the purpose of his absence, (b) the days of the absence are the day before, the
day of and the day after the funeral; (c) the day of absence is a day during
which the employee was scheduled to work and would have actually worked but for
the absence, and (d) the employee, upon request furnished proof satisfactory to
the Company of the death, his relationship to the deceased, the date of the
funeral and the employee's actual attendance at the funeral. For purpose of his
Section, a member of the immediate family means the employee's spouse, children,
parents/or legal guardian, brothers, sisters, grandparents, mother in-law or
father in-law.

Article XV  Leave of Absence

Section 1.0

      Leave of absence may be granted to an employee, who has completed his/her
probationary period for good cause subject to


                                       17
<PAGE>

reasonable extension; provided, the employee requests such extensions prior to
the expiration of his leave of absence.

Section 2.0

      An employee desiring a leave of absence shall make application at least
five (5) working days prior to the desired effective date. This requirement is
waived in cases of actual emergencies.

Section 3.0

      Good cause for granting leaves of absence shall include personal illness
or accident, death or serious illness in the immediate family, Union business,
and other reasons acceptable to the Company. Written substantiation satisfactory
to the Company must be submitted.

      The Company and the Union agree to abide by the Family Medical Leave Act
A). Duration of the leave shall not exceed the Act.

Section 4.0

      Any employee who may require off to attend Union conventions, meetings, or
other official Union functions shall be granted such leave without pay, but with
continued accumulation of seniority; provided:

      a.    The employee gives the Company two (2) weeks advance notification.
      b.    There will only be two (2) employees per one hundred (100) employees
            in the bargaining unit allowed at any one time.
      c.    There will only be one (1) employee from any one (1) department
            allowed at any one time.
      d.    Such leave shall not last longer than two (2) weeks.

Section 5.0

      An employee certified by the Union to be a full time Union official shall,
at the request of the Union, receive a leave of absence to engage in work
pertaining to the business of the Union. Such an employee shall accumulate
seniority throughout the period of leave of absence. However, only one (1)
employee will be allowed such leave at any one (1) time which will be limited to
six (6) months, and may be extended for an additional six (6) months upon mutual
agreement between the Company and the Union.

Section 6.0

      Leaves of absence shall not be granted for the purpose of allowing an
employee to take another position, to seek or try out new work, or to enter
business for himself, and similar reasons.


                                       18
<PAGE>

Section 7.0

      Leaves of absence will be granted only when the manning requirements of
the Company permit, except in cases of actual emergencies.

Section 8.0

      If application for leave of absence is denied and the employee leaves, or
if the employee fails to return to work at the expiration of a granted leave of
absence, then such employee shall be considered to have voluntarily quit.

Section 9.0

      Upon return to work from a medical leave of absence, not in excess of six
(6) months, the employee shall be reinstated to their regular assigned job if
the employee returns to work with a written physician's statement within three
(3) working days after their release. For approved personal leaves of up to
thirty (30) days, the employee shall be reinstated to their regular assigned
job.

      In the case the job has been abolished during an employee's leave of
absence, such decisions shall apply to re-employment as would have applied had
such employee been at work at the time the job was abolished.

Section 10.0

      The Chief Shop Steward shall be notified of all leaves of absence granted.

Section 11.0   Military Service

      A. An employee, who is drafted, volunteers, or is recalled to active duty
      in the United States Military Service, upon completion of his first
      service period, having served no more than four years (five if required to
      serve a fifth year due to war or other emergency) shall if application is
      made within ninety (90) days after he is honorably discharged from active
      duty, be reinstated to his last held job classification with full
      seniority rights as if he had been actively employed by the Company during
      the period of his military service. Provided, the employee is still
      qualified to perform the duties of his last held job classification and
      provided, further, the Company's circumstances have not so changed to make
      it impossible or unreasonable to employ him.

      B. An employee reinstated, as provided in Section I above, shall receive
      an hourly rate of pay equal to his rate of pay at time of entering
      military service together with any adjustments having been made in the
      rate of pay of his job classification, during his absence. Time spent in
      the


                                       19
<PAGE>

      military service shall not be considered as employment for the purpose of
      calculating any periodic increases which he would have received had he
      been actively employed by the Company.

      C. An employee required to serve Military Reserve or National Guard Duty
      will be granted an unpaid leave of absence without break in continuous
      service, provided military orders are presented in advance of such leave
      or upon return when reporting in advance was not possible. Employees on
      approved military leave may use vacation pay during this period.

Article XVI Jury Duty

      An employee who has completed Its probationary period, who is summoned for
jury service and who presents to the Company proper evidence as to jury service
and the amount of compensation received for such service, shall be paid the
difference between his compensation as a juror and an amount equal to eight (8)
times his hourly base rate of pay for each day of jury service performed during
the regular workweek on which the employee otherwise would have been scheduled
to work but not to exceed (20) days in any one calendar year. (Mileage
reimbursement received for jury service shall not be considered as jury
compensation for the purpose of calculating differential pay.) The provisions of
this Article are not applicable to an employee, who, without being summoned,
volunteers for Duty. Employees who are released from Jury Duty during the first
half of their regular shift, when reasonable, are to report to work to complete
the remaining hours of work on that shift.

Article XVII    Grievance and Arbitration Procedure

Section 1.0

      The Company and the Union agree to meet and deal with each other through
their duly accredited officers, committees and representatives on all matters
relating to hours, wages, and other conditions of employment relating to the
employees of the Company covered by this Agreement. Should any employee feel
that he has been aggrieved, there shall be no suspension of work on account of
such differences, but an earnest effort shall be made to settle such differences
in the following manner:

      Step 1. The grievance shall be taken up with the employee's supervisor by
      the employee, or by the employee and his/her shop steward, within two (2)
      regular working days after the event causing the grievance. No action or
      matter shall be considered the subject of a grievance unless a complaint
      is made within two (2) regular working days of its occurrence. The
      supervisor shall give his answer to the grievance within two (2) regular
      working days after receipt of the grievance.


                                       20
<PAGE>

      If the grievance is not resolved at this Step, it shall be referred to
      Step 2 within two (2) regular working days after receipt of the reply of
      the supervisor.

      Step 2. If settlement is not reached in Step 1, the Chief Shop Steward
      shall present to the foreman for his forwarding to the designated Company
      Representative, a written statement of the grievance by the aggrieved
      employee, giving all pertinent information relative to the grievance and
      indicating the relief requested. The designated Company Representative
      shall give his written reply to the grievance within three (3) regular
      working days. If the grievance is not resolved at this Step, it shall be
      referred to Step 3 within three (3) regular working days after receipt of
      the reply from the designated Company Representative.

      Step 3. If a settlement is not reached at Step 2, the grievance shall be
      referred to the designated Company Representative within three (3) regular
      working days who will arrange a meeting with the Business Representative
      of the Union on a mutually satisfactory date. At this meeting, the final
      decision of the Company will be given unless otherwise agreed upon. It is
      agreed that upon request the employee filing the grievance, and the Chief
      Shop Steward shall be allowed to be present at the meeting described in
      this Step.

      Step 4. In the event the grievance is not resolved in the preceding steps,
      the grievance may be appealed to arbitration, by the Union, by submitting
      a letter of intent to arbitrate within thirty (30) days of the Company's
      final decision sent to the Director of Human Resources at the address of
      record. At which time the parties will request from Federal Mediation and
      Conciliation Service a fist of seven (7) names, one of who will act as
      arbitrator. The arbitrator will be selected by the parties by first
      flipping a coin as to who will strike the first name and then will
      alternately strike until one is left who will be the arbitrator.

      The arbitrator shall have no authority to modify or subtract from or
change any of the terms or conditions of this Agreement. The decision of the
arbitrator shall be final and binding upon the employee, the Union and the
Employer. The expense of the arbitrator and the conduct of the hearing,
excluding any expenses incidental to the production of witnesses, shall be
shared equally by the parties.

Section 2.0

      Failure of the Employer to answer in any of the steps above within the
time limits will permit the Union to move the grievance to the next step.


                                       21
<PAGE>

Section 3.0

      Should the Union fail to move the grievance to the next step within the
time limits specified, the grievance is settled in that step based on the
Employers answer, unless the Union notifies the Employer of its intent to
proceed to the next step.

Section 4.0

      Employees may be disciplined for violation thereof under the terms of this
Agreement, but only for just cause and in a fair and impartial manner. A
grievance concerning the discharge or suspension of an employee may be filed by
the Chief Shop Steward or his alternate, within five (5) regular working days
and shall be initially referred to the Third Step.

Section 5.0

      The time limits set forth in this Article may be extended by mutual
agreement.


Article XVIII  Disciplinary Action

      It is the policy of Everest & Jennings, Inc. to develop and encourage a
just and equitable system of administering discipline. Plant rules and
procedures will be distributed to all employees at the time of hire and be
posted on the Company bulletin board. Violations of such rules, other than those
identified as dischargeable offenses, will be addressed utilizing progressive
discipline, however, rule infractions will be handled separately. Rule
infractions, other than those rules identified as dischargeable disciplinary
action will include a verbal warning, written warning, suspension and discharge
for repeated offenses. However, the Company reserves the right to consider all
factors involved including the type of conduct and whether it was injurious to
security, personal safety, employee welfare or Company operations in dispensing
disciplinary action.

      With the exception of discharge, disciplinary warnings shall become
ineffective as soon as twelve (12) months have passed without the employee
receiving any further warnings or disciplinary action.

      It is understood by the parties the Absentee Control Program is
administered separately.


Article XIX    Safety

Section 1.0

The Company shall make reasonable provisions for the safety and health of its
employees at the plant and warehouse during the


                                       22
<PAGE>

hours of employment. There shall be a Joint Safety Committee which will meet
monthly to:

      1.    Establish and maintain an accident prevention program;

      2.    Investigate accidents and recommend actions to help prevent
            recurrence;

      3.    Establish, review, and maintain safety rules and regulations as
            necessary;

      4.    Make safety tours for the purpose of accident prevention and to
            promote good housekeeping throughout the facility;

      5.    Assist Company to comply with all applicable municipal, state, and
            federal safety regulations.

Article XX  Drug Testing

Section 1.0

      Employees are prohibited from the use, sale, dispensing, distribution,
      possession, or manufacturing of illegal drugs and narcotics or alcoholic
      beverages on Company property or work sites. In addition, employees are
      prohibited from the off-premises possession, use, or sale of illegal drugs
      when such activities adversely affect job performance, job safety, or the
      Company's reputation in the community.

Section 2.0

      At the discretion of Employer, employees may be required to submit to a
      drug test, to determine if the employee is using, under the influence of,
      or is otherwise impaired by (illegal) drugs or alcohol. Employees are
      warned of the lingering effects of certain drugs in their system.
      Employees may be selected to submit to a drug test where either: the
      Employer has reasonable suspicion to believe that an individual employee
      or group of employees is in violation of this Article and/or violation of
      Company policy; or by being selected randomly if the employee is in a
      safety-sensitive position.

Section 3.0

      Failure to submit to any examination allowed under this section, or any
      attempt to tamper with specimens or falsify or alter test results shall
      constitute just cause for discharge. The Employer may elect to have a
      supervisor accompany the employee to the testing site. All urine specimens
      shall be subject to an initial screen using an EMIT-type analysis. All
      positive results from an initial screen shall be confirmed via gas
      chromatography-mass


                                       23
<PAGE>

      spectrometry techniques. No specimen shall be identified as "positive"
      except upon receipt of the results of the confirmation test.

Section 4.0

      While employees may be subject to disciplinary action up to and including
      immediate dismissal, for violations of the policy expressed in this
      Article, the Employer shall offer a reasonable accommodation as required
      by law, to employees who request such accommodation.

Article XXI Management Rights

Section 1.0

Except as limited by a specific provision of this Agreement, the Employer
retains the exclusive right to manage its business and direct the working force
including, but not limited to, the rights hereinafter enumerated: to decide on
the products to be manufactured, the methods of manufacture, the materials to be
used, and the discontinuance of any product, material, or method of production;
to introduce new equipment, machinery, or processes; and to change or eliminate
existing equipment, machinery, or processes; to decide on the nature of
materials, supplies, equipment, or machinery to be used, and the price to be
paid; to select the working force in accordance with requirements determined by
management; to establish reasonable rules governing employment and working
conditions; and to determine the size of the work force. The existing practice
of subcontracting or outsourcing of such work as deemed necessary shall win not
subcontract work for the sole purpose of continue. However, the Company will not
subcontract work for the sole purpose of eroding the bargaining unit.

Section 2.0

      The above rights of management are not all inclusive, but indicate the
type of matters or rights witch belong to and are inherent to management. Any of
the rights, powers, and authority the Company had prior to entering into
collective bargaining are retained by the Company except as expressly and
specifically abridged, deleted, granted, or modified by this Agreement.

Section 3.0

Failure by the Company to exercise any of its management rights at any time
shall not be considered to be an abandonment of such rights.

Article XXII   Alteration of Agreement


                                       24
<PAGE>

      No agreement, alteration, understanding, variation, waiver, or
modification of any of the terms, conditions, or covenants contained herein
shall be made by employee or group of employees with the Company and in no case
shall it be binding upon the parties hereto unless such agreement is made and
executed in writing between the parties hereto.

      The waiver of any breach or condition of this Agreement by either party
shall not constitute a precedent in the future enforcement of all the terms and
conditions herein.

Article XXIII   Separability

      If any section or part thereof of this Agreement is in conflict with any
applicable Federal or State law or regulation, such section shall be amended or
deleted from this Agreement or shall be deemed to be in effect only to the
extent permitted by such law or regulation. In the event that any provision of
this Agreement is thus tendered inoperative, the remaining sections shall
nevertheless remain in full force and effect.

Article XXIV   Notices

Section 1.0

      Any notices required under the terms of this Agreement shall be given in
writing to the following addresses of record:

      a)    To the Company - addressed to:

            Everest & Jennings Inc.
            3601 Rider Trail South
            Earth City, MO 63045

      b)    To the Union - addressed to:

            International Association of Machinist and Aerospace
               Workers
            12365 St. Charles Rock Road
            Bridgeton, MO 63044

Section 2.0

      Either party desiring to change the identity of the person to be addressed
as set forth in Section 1.0 may do so at any time by giving notice thereof to
the other party in writing by certified mail.


                                       25
<PAGE>

Article XXV    General

Section 1.0

      Temporary agency employees brought into the factory or warehouse will be
hired or released after thirty days consistent with the Union security and
seniority sections of the labor agreement.

Section 2.0

      The Company will provide a designated area of the lunch room's bulletin
board to the Union for the purpose of posting notices relating to Union
business. All notices so posted will be authorized in advance by Human
Resources.

Section 3.0

      Plant Rules and Procedures; Safety Rules; Attendance Policy and the DRUG
AND ALCOHOL FREE WORKPLACE ACT OF 1988 have been promulgated as set forth in
Amendments A through D attached. Said work and safety rules may be amended by
the Company from time to time at the discretion of the Company. The Union will
be
notified prior to implementation.


Article XXVI   Duration

      This Agreement shall remain in full force and effect from September 13,
1996, and shall expire at midnight September 13, 1999. If either party desires
to cancel or amend this Agreement as of said expiration date, such party shall
give written notice to the other party at least sixty (60) days prior to said
date. In the absence of such notice, this Agreement shall become automatically
renewed for an additional year, and from year to year thereafter, subject to
sixty (60) days' written notice of termination prior to any anniversary of such
expiration date.

      IN WITNESS WHEREOF, this Agreement has been executed by the Parties the
12th day of November, 1996.

EVEREST & JENNINGS, INC.                     District No. 9,
                                             INTERNATIONAL ASSOCIATION
                                             OF MACHINISTS AND
________________________________             AEROSPACE WORKERS
Cherie L. Antoniazzi
Executive Director Human
Resources                                    ________________________________
                                             Phil Gruber
                                             Union Business Representative
________________________________
Melenie Broyles


                                       26
<PAGE>

Manager, Human Resources                     ________________________________
                                             Everday Wilkins
                                             Chief Steward


                                             ________________________________
                                             Catarino Velazquez
                                             Union Negotiating Committee


                                             ________________________________
                                             Scott Grohs
                                             Union Negotiating Committee


                                       27
<PAGE>

                               LETTER OF AGREEMENT

November 12, 1996

BENEFIT PROGRAMS

This "Letter of Agreement" confirms mutual understanding between the Company and
the Union that upon consummation of the acquisition of all of the shares of the
Company by Graham-Field Health Products, Inc., a review of the benefit programs
will be undertaken. The Company agrees that the benefits offered to the
employees will be, in the aggregate, equal to the value of the benefits
currently provided. The Company will discuss any proposed changes to the
benefits structure with the Union.

Notwithstanding anything to the contrary contained in this Agreement, the
benefits and plans of insurance referred to above are qualified in their
entirety by reference to the underlying policies and contracts of insurance or
statues or regulations. The terms of any contract, statute or regulation in
respect thereof by any insurance agency or governmental agency shall be
controlling in all matters pertaining to the existence of and extent of benefits
and conditions.

The undersigned agree with the terms of the above letter.


FOR THE COMPANY                              FOR THE UNION


________________________________             ________________________________
Cherie L. Antoniazzi                         Phil Gruber
Executive Director Human                     Union Business Representative
Resources

                                             ________________________________
________________________________             Everday Wilkins
Melenie Broyles                              Chief Steward
Manager, Human Resources

                                             ________________________________
                                             Catarino Velazquez
                                             Union Negotiating Committee


                                             ________________________________
                                             Scott Grohs Union Negotiating
                                             Committee


                                       28
<PAGE>

                               LETTER OF AGREEMENT

November 12, 1996

SEVERANCE

      Everest & Jennings will make severance payments to employees with
seniority, whose employment is terminated by the Company as a result of the
closing of the operations covered by this Agreement as follows:

                 $750 or $100 per year of service, whichever is
                     greater to a maximum amount of $1,500.

      For purposes of calculating severance benefits, partial years of service,
as of the date of termination of employment, will be rounded off to the next
full year. Severance benefits will be paid to employees in full at the time of
termination, as the result of the plant closing.

      It is understood by the parties that employees whose service with the
Company is terminated as a result of the cessation of operations covered by this
Agreement, waive any and all rights accruing under the current Labor Agreement,
and that paid severance benefits are full and final settlement of any and all
claims by employees and the Union.

      This agreement shall remain in effect through the term of the Collective
Bargaining Agreement.


FOR THE COMPANY                              FOR THE UNION


________________________________             ________________________________
Cherie L. Antoniazzi                         Phil Gruber
Executive Director Human                     Union Business Representative
Resources

                                             ________________________________
________________________________             Everday Wilkins
Melenie Broyles                              Chief Steward
Manager, Human Resources

                                             ________________________________
                                             Catarino Velazquez
                                             Union Negotiating Committee


                                             ________________________________
                                             Scott Grohs Union Negotiating
                                             Committee


                                       29
<PAGE>

                                                                       Amendment

                            Everest & Jennings, Inc.
                           Plant Rules and Procedures

The following conduct is prohibited and will not be tolerated by the Company.

Examples of disciplinary infractions which may lead to discharge as a result of
the progressive disciplinary system are:

1.    Disorderly, immoral, or questionable conduct on Company property.

2.    Disregard of safety and health regulations.

3.    Repeated negligence resulting in inferior or poor work, or wastage of
      materials.

4.    Using threatening, abusive, or profane language to an employee or visitor
      on Company premises.

5.    Performing work of a personal nature, visiting other departments, or
      deliberately loitering on the job, or idling in restrooms or elsewhere
      during working hours.

6.    Engaging in or encouraging horseplay of any kind such as g, scuffling,
      throwing things, distracting, or startling others, creating confusion, or
      acting in a disorderly manner.

7.    Failure to perform work in accordance with blueprints, operation sheets,
      actions, or established standard, both as to quality and quantity.

8.    Failure to be in place and ready to start work at the beginning of the s
      after breaks, and lunch.

9.    Failure to attain goals satisfactorily as established by management both
      verbally and in writing.

10.   Failure to comply with all traffic, speed, and parking regulations while
      on Company premises, as well as other Company policies.

11.   Creating or contributing to unsanitary or disorderly housekeeping
      conditions.

12.   Leaving your work station without permission from your supervisor, or
      proper relief during absence.

13.   Gambling or any illegal form of lottery on Company premises.


                                       30
<PAGE>

14.   Unauthorized overtime.

15.   Unauthorized use of Company equipment, time, materials, or facilities.

These lists of prohibited conduct are illustrative only; other types of conduct
injurious to security, personal s, employee welfare and the Company's operation
also may be prohibited.

The above stated policies supersede any previous written or verbal policies in
accordance with the standards of conduct of Everest & Jennings, Inc.


                                       31
<PAGE>

                            Everest & Jennings, Inc.
                           Plant Rules and Procedures

It is the policy of Everest & Jennings, Inc. to develop and encourage a just and
equitable system of administering discipline in the workforce. A disciplinary
system is required to protect the majority of employees against the action of a
few who do not conform to recognized standards of business conduct.

Employees at Everest & Jennings, Inc. must cooperate in observing all rules
established for their protection and guidance. Therefore, without prejudice, the
following are considered cause for discharge in accordance with the Company's
procedure for disciplinary action:

1.    Possession of firearms or unauthorized weapons on Company premises.

2.    Fighting, provoking a fight, unlawful harassment or attempted bodily
      injury.

3.    Destruction or misuse of property; deliberate abuse of tools, machines, or
      materials; damaging or defacing Company or another employee's property.

4.    Posting or removal of notices, signs, or written material of any form on
      bulletin boards or Company property at any time without specific written
      authorization from the Human Resources Department.

5.    A general attitude of insolence or disrespect, or inability to work
      harmoniously and cooperatively with one's fellow workers.

6.    Theft or borrowing an employee's or Company property without prior
      authorization.

7.    Punching another's timesheet, falsifying any Company document, including
      time records, or giving false information in connection with your own
      work, the work of any other employee, or any job related or Company
      activity.

8.    Making or publishing of false, vicious, or malicious statements concerning
      any employee, manager, the Company, its products or its reputation.

9.    Reporting to work or on the Company premises while under the influence of
      intoxicants (liquor or drugs), or use or possession of the same on Company
      property. (Use of prescription drugs on Company premises is permitted with
      advanced approval of the Human Resources Department).

10.   Selling, buying, or furnishing alcoholic beverages, drugs, or controlled
      substances to others on Company property.


                                       32
<PAGE>

11.   Tardiness or excessive absences from work, including no report/no call
      absences as defined in the Absentee policy.

12.   Insubordination - refusal to carry out instructions, work assignments, or
      orders given by management.

13.   False reporting of an on-the-job accident, injury, or occupational
      illness.

14.   Walking off the job.

15.   Sleeping on duty.


                                       33
<PAGE>

                                                                     Amendment B

Everest & Jennings, Inc.
                          Plant Rules and Procedures

1.    Report all accidents to your supervisor immediately, no matter how minor.

2.    No running or jumping in the plant at any time.

3.    Throwing materials of any kind is prohibited.

4.    Pallets must not be placed or stored on end. Pallets must be stored flat.
      The pallet stack cannot exceed five feet. Stacked, broken down boxes
      cannot exceed five feet unless shrink wrapped.

5.    No horseplay is allowed at any time.

6.    Work areas must be kept clean and orderly at all times.

7.    Sliding down hand rails on stairs or ladders is prohibited.

8.    Employees must walk on the outside of aisles, never in the center, and be
      alert for forklift traffic at all times.

9.    Equipment and machinery (including forklifts) are to be operated by
      trained and authorized personnel only.

10.   The trash compactor is operated by authorized personnel only.

11.   Passengers are not allowed on forklifts or handjacks.

12.   Use or being under the influence of, or possession, sale or consumption of
      any intoxicants, drugs, illegal substances or narcotics of any nature is
      prohibited and is cause for immediate discharge.

13.   Tools and equipment are to be used for their designed purpose only.

14.   Do not converse with forklift operators while forklift is in motion.

15.   Proper equipment guards must be in place at all times while equipment is
      operating. If guards are removed, they must be replaced before equipment
      is restarted. If guards are misadjusted, they must be properly adjusted
      before the equipment is restarted.

16.   Safe work procedures must be used at all times, short cutting safety
      devices is prohibited.


                                       34
<PAGE>

17.   Proper safety protective equipment must be worn on all jobs requiring this
      equipment. When in doubt, ask your supervisor.

18.   Air hoses are not allowed to be used to blow off clothing or exposed areas
      of the body. An air bubble in the blood stream can be fatal!

19.   Safety cages or safety harness must be used when lifting employees off the
      floor with forklifts.

20.   Shoes must be of sturdy leather or leather-like construction. Heavy
      leather-like athletic shoes will be permitted. No open-toed, open-back
      canvas type, nylon, or suede shoes are permitted. All shoes must have a
      heavy sole; moccasins are not permitted. The only exception are drivers
      and visitors who are not employees of Everest & Jennings who are walking
      in designated aisles to a designated job site or area.

21.   The wearing of halter tops, half shirts, sleeveless shirts, shorts, or
      culottes are prohibited.

22.   Smoking is restricted to designated areas only. Note: You must be 50 feet
      away from any site that has a warning "FLAMMABLE" posted.

23.   Drawers on desks, file cabinets, etc. should be closed when not in use. Do
      not have more than one drawer open on a file cabinet at a time to prevent
      tipping.

24.   All four legs of chairs should be on the ground while in use. NO TIPPING
      BACKWARDS.

25.   Electrical outlets should be used only as intended and not overloaded.

26.   Never use chairs or tables as ladders or platforms.

27.   Wearing of radio headphones in the facility is prohibited. Portable
      battery operated radios may be used, if the volume is kept to a minimum.
      Abuse will result in the ban of all radios.

28.   Machinery must be turned off when leaving your work area for an extended
      time period, breaks, lunch, and at the end of your shift.

29.   No open food containers or beverages are allowed in the work areas.


                                       35
<PAGE>

                                                                     Amendment C

Everest & Jennings, Inc.
                                    Policy

================================================================================
SUBJECT:  Absenteeism                                              Page 1 of 2
================================================================================

This policy supersedes any prior absenteeism policy.

General:

Your attendance at work is very important to the Company as well as to your
fellow employees. Absenteeism and tardiness interrupt the flow of work which
causes imbalances in the availability of work. Therefore, employees who miss
work penalize those who do not. Your record of attendance is an important part
of your personnel file and may affect your ability to secure a promotion or
future employment. Excessive and habitual absenteeism or tardiness, regardless
of cause, cannot be tolerated.

Definition:

An absence is defined as any scheduled work day missed for reasons other than
death in the family, jury duty, or approved leave of absence. A scheduled day
includes properly notified mandatory overtime, and voluntary overtime (when an
employee volunteers to work overtime the time becomes a scheduled work day).

An illness of two (2) or more days will be counted as one (1) absence, ONLY if
the employee produces a doctor's excuse. A one (1) day's absence with a doctor's
excuse counts as one absence. In no case may an employee return to work without
a doctor's excuse after three (3) days or more of illness or injury.

Section I:

A tardy will be counted on your record as follows:

a.    If you clock in one minute after your scheduled starting time, but less
      than 61 minutes, you will be marked with one tardy on your attendance
      record. Three tardies will equal one absence.

b.    If you are tardy more than 60 minutes, but less than 240 minutes, this
      will count as a half-day absence. Two half-day absences will be counted as
      one absence.

c.    Tardiness of 240 minutes or more, will count as one whole day absent.


                                       36
<PAGE>

When an employee knows that he/she will be absent or late, the department
supervisor must be contacted or a message must be left on the attendance phone
(314) 770-5051, no later than one (1) hour after starting time, or it will be
considered a no-report absence. Any notification of an absence later than one
(1) hour after starting time, will be considered a no-report absence, unless
extenuating circumstances justify an exception.

Section II:

Each employee's daily attendance record will be kept by the department
supervisor and will be monitored by the Human Resources Department, so the
policy is applied consistently. Disciplinary action will be administered in the
following manner.

      Step 1 - Verbal Warning:

      If an employee is absent three (3) times (any combination of the
      aforementioned definitions) within a 6-month period, that employee will be
      given a verbal warning. This is recorded on a standard warning form and
      filed in his/her personnel file.

      Step 2 - Written Warning:

      If an employee is absent four (4) times within a 6-month period, (any
      combination of the definitions), the employee will receive a written
      warning. At this time a discussion between the employee and supervisor
      will be held to review the employee's attendance record.

      Step 3 - Suspensions:

      If an employee is absent five (5) times within a 6-month period, the
      employee win receive a three (3) day suspension without pay. Two (2)
      suspensions within one year will result in termination. At s time, a
      discussion between the employee, supervisor, and Director of Human
      Resources will be held to review the employee's attendance record and
      possible avenues of correction.

      Step 4 - Termination:

      If an employee is absent six (6) times within a 6-month period, or has had
      one suspension and eligible to receive a second suspension within a one
      year period, the employee will be subject to termination.

Section III -  No Report Absences:

An employee who does not call in to report his/her absence will be given an
immediate written warning (Step 2). Re-occurrences of not calling in (whether
consecutive or not) will result in progressive disciplinary action (Step 3 and
4) as outlined in


                                       37
<PAGE>

Section II. Three no calls during length of employment will constitute
discharge. "Any notification of an absence later than one (1) hour after
starting time will be considered a no-call."

Exceptions:

The action described above may be modified if the Company believes that
extenuating circumstances justify an exception.


                                       38
<PAGE>

                                                                     Amendment

                   DRUG AND ALCOHOL-FREE WORKPLACE ACT OF 1988

The Everest & Jennings Company is committed to providing a drug and alcohol-free
workplace. Drug and alcohol abuse in the workplace is a threat to the safety and
health of our employees, and it jeopardizes the efficiency of our operations and
the quality of our products.

For these reasons, coming to work under the influence of drugs or alcohol, or
the unlawful manufacture, distribution, dispensation, possession or use of a
controlled substance in the workplace is prohibited. Further, employees must
notify the Human Resources Department of any criminal drug statute conviction
for a violation occurring on Company premises not later than five (5) days after
the conviction.

Pursuant to the Drug-Free Workplace Act of 1988, compliance with this policy is
specifically made a condition of employment at Everest & Jennings. An employee
who violates this policy will be subject to disciplinary action, up to and
including discharge.

Employees who believe they may have a drug or alcohol abuse problem are urged to
voluntarily and confidential come forward, so the company can assist them in
finding appropriate counseling and rehabilitation services. An employee who
voluntarily comes forward to seek such assistance before becoming involved in a
work related instance of policy violation will not be discharged.


                                       39
<PAGE>

Schedule A
<TABLE>
<CAPTION>
                                         Effective                Effective               Effective
                                     September 13, 1996       September 13, 1997       September 13, 1998
                                   Prob. Rate   Job Rate    Prob. Rate   Job Rate    Prob. Rate   Job Rate
<S>                                   <C>          <C>         <C>          <C>         <C>         <C>
Group 1
Prod. Fab. 1                          7.18         7.48        7.43         7.73        7.68        7.98
Warehouse Worker B                    7.18         7.48        7.43         7.73        7.68        7.98

Group 2
Warehouse Worker A                    7.93         8.23        8.18         8.48        8.43        8.73
Prod. Fab. 3                          7.93         8.23        8.18         8.48        8.43        8.73
Inline Inspector                      7.93         8.23        8.18         8.48        8.43        8.73
Parts Picker                          7.93         8.23        8.18         8.48        8.43        8.73
Polisher                              7.93         8.23        8.18         8.48        8.43        8.73

Group 3
Custom Upholstery                     8.33         8.63        8.58         8.88        8.83        9.13
Hand Brazer                           8.33         8.63        8.58         8.88        8.83        9.13
Lathe Mill/CNC Operator               8.33         8.63        8.58         8.88        8.83        9.13
Parts Coordinator                     8.33         8.63        8.58         8.88        8.83        9.13

Group 4
Custom Assembler                      8.78         9.08        9.03         9.33        9.28        9.58
Tig Welder                            8.78         9.08        9.03         9.33        9.28        9.58
Utility Warehouser                    8.78         9.08        9.03         9.33        9.28        9.58

Group 5
Machine Set Up/Operator               9.23         9.53        9.48         9.78        9.73       10.03
Receiving Inspector                   9.23         9.53        9.48         9.78        9.73       10.03
</TABLE>


                                       40
<PAGE>

<TABLE>
<S>                                   <C>         <C>          <C>         <C>         <C>         <C>
Group 6
Custom Brazer                         9.73        10.03        9.98        10.28       10.23       10.53
Group Lead Assembly                   9.73        10.03        9.98        10.28       10.23       10.53
Custom Fabricator                     9.73        10.03        9.98        10.28       10.23       10.53
Custom/Fab./Welding                   9.73        10.03        9.98        10.28       10.23       10.53
Inspector

Group 7
CNC Programmer                       10.33        10.63       10.58        10.88       10.83       11.13
Group Lead Brazing                   10.33        10.63       10.58        10.88       10.83       11.13
Group Lead Custom                    10.33        10.63       10.58        10.88       10.83       11.13
Group Lead Shipping                  10.33        10.63       10.58        10.88       10.83       11.13
Group Lead Warehouse                 10.33        10.63       10.58        10.88       10.83       11.13
Sr. Quality Auditor                  10.33        10.63       10.58        10.88       10.83       11.13
Sr. Custom Brazer                    10.33        10.63       10.58        10.88       10.83       11.13

Group 8
Truck Driver/CDL                     10.88        11.18       11.13        11.43       11.38       11.68

Group 8
Maintenance Technical                13.35        13.65       13.60        13.90       13.85       14.15
</TABLE>


                                       41