<PAGE>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------
                                 F O R M   10 - K/A

                                 (AMENDMENT NO. 1)

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

For the fiscal year ended December 31, 1997    Commission file number 0-19737
                                       OR
                  [ ] TRANSITION REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

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

                                NOEL GROUP, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                              13-2649262
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)

    667 Madison Avenue, New York, New York                10021
   (Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (212) 371-1400

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

             Title of each class            Name of exchange on which registered
                    None                              Not Applicable

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

                     Common Stock, par value $.10 per share
                                (Title of Class)

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

      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. [X] Yes [ ] No

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

      The aggregate market value of voting stock held by non-affiliates of the
registrant on March 20, 1998, was approximately $43,733,000. On such date, the
last sale price of registrant's common stock was $2.875 per share. Solely for
the purposes of this calculation, shares beneficially owned by directors and
officers of the registrant and beneficial owners of in excess of 10% of the
registrant's common stock have been excluded, except shares with respect to
which such persons or entities disclaim beneficial ownership. Such exclusion
should not be deemed a determination or admission by registrant that such
individuals or entities are, in fact, affiliates of registrant.

      Indicate number of shares outstanding of each of the registrant's classes
of common stock, as of March 20, 1998.

               Class                               Outstanding on March 20, 1998
               -----                               -----------------------------
Common Stock, par value $.10 per share                         20,567,757

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                               Part of the Form 10-K into which
              Document                         the Document is Incorporated
              --------                         ---------------------------------
Definitive Proxy Statement to Shareholders     Part III, Items 10, 11, 12 and 13
 for 1998 Annual Meeting

<PAGE>

<PAGE>

      This Amendment No.  1 on Form 10-K/A (this "Amendment") is being filed by
Noel Group, Inc. (the "Company") to amend the 1997 operating income (loss)
stated in Note 23 to Notes to Financial Statements ("Note 23") in the Company's
Annual Report on Form 10-K for the fiscal year ended. December 31, 1997 (the 
"Original Report"). Only Note 23 contained in the Original Report is amended
hereby and, as required by Rule 12b-15 promulgated under the Securities Exchange
Act of 1934, as amended, the complete text of Item 14, as amended, is set forth
in this Amendment.


                                       -1-

<PAGE>

<PAGE>


                                     PART IV

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

(a)

      (1) - (2)  Financial statements and financial statement schedules.

            The consolidated financial statements and financial statement
      schedules listed in the accompanying Index to Financial Statements and
      Financial Statement Schedules are filed as part of this annual report.

(b) Reports on Form 8-K.

            On December 15, 1997, Noel filed a Form 8-K reflecting (i) the
December 1, 1997 distribution to its shareholders of 2,205,814 shares of Carlyle
Common Stock at the rate of 0.107246 shares of Carlyle Common Stock for each
share of Common Stock outstanding on the November 21, 1997 record date and (ii)
the receipt by Noel of approximately $4.3 million in cash and a note for
approximately $10.4 million, bearing interest at an annual rate of 7% and
secured by a letter of credit, for all of its holdings of Curtis. No pro forma
financial information was required pursuant to Article 11 of Regulation S-X.


                                      -2-

<PAGE>

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 1 on Form 10-K/A
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                               NOEL GROUP, INC.
                                                  (Registrant)


                                               By /s/ Todd K. West
                                                  ------------------------------
                                                  Todd K. West
                                                  Vice President-Finance,
                                                  Chief Financial Officer
                                                  and Secretary

                                               Date: April 7, 1998

                                       -3-


<PAGE>

<PAGE>

                                NOEL GROUP, INC.
                          INDEX TO FINANCIAL STATEMENTS
                                       AND
                          FINANCIAL STATEMENT SCHEDULES

                               Item 14(a)(1) - (2)

                                                                  Page Reference
                                                                  --------------

     Report of Independent Public Accountants ............................  F-2

Noel Group, Inc.
     Statement of Net Assets in Liquidation
       December 31, 1997 .................................................  F-3

     Statement of Changes in Net Assets in Liquidation
       For the Nine Months Ended December 31, 1997 .......................  F-4

Noel Group, Inc. and Subsidiaries:
     Consolidated Balance Sheet
       December 31, 1996 .................................................  F-5

     Consolidated Statements of Operations
       For the Three Months Ended March 31, 1997 and for the Years Ended
       December 31, 1996 and 1995 ........................................  F-6

     Consolidated Statements of Cash Flows
       For the Three Months Ended March 31, 1997 and for the Years Ended
       December 31, 1996 and 1995 ........................................  F-7

     Consolidated Statements of Changes in Stockholders' Equity
       For the Three Months Ended March 31, 1997 and for the Years Ended
       December 31, 1996 and 1995 ........................................  F-9

     Notes to Financial Statements .......................................  F-10

HealthPlan Services Corporation and Subsidiaries:
     Report of Independent Certified Public Accountants ..................  F-35

Staffing Resources, Inc.:
     Report of Independent Accountants ...................................  F-36

Schedule
  No.
--------

II   Valuation and Qualifying Accounts
       For the Years Ended December 31, 1996 and 1995 ....................  S-1

Financial statement schedules not included in this report have been omitted
because they are not applicable or the required information is shown in the
consolidated financial statements or the notes thereto.


                                       F-1

<PAGE>

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of Noel Group, Inc.

We have audited the accompanying consolidated balance sheet of Noel Group, Inc.,
a Delaware corporation, and subsidiaries as of December 31, 1996, and the
consolidated statements of operations, changes in stockholders' equity and cash
flows for the period from January 1, 1997 to March 31, 1997 and for each of the
two years in the period ended December 31, 1996. We also have audited the
statement of net assets in liquidation as of December 31, 1997, and the related
statement of changes in net assets in liquidation for the period from April 1,
1997 to December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the consolidated
financial statements of HealthPlan Services Corporation ("HPS"), the investment
in which is reflected in the accompanying financial statements using the equity
method of accounting in 1996 and 1995. The investment in HPS represents 18%
of consolidated total assets as of December 31, 1996; the equity in its net
loss is $.5 million for 1996; the equity in its net income is $3.4 million for
1995. We also did not audit the financial statements of Staffing Resources, Inc.
("Staffing"), the investment in which is reflected in the accompanying
consolidated financial statements using the equity method of accounting in 1996.
The investment in Staffing represents 9% of consolidated total assets as of
December 31, 1996, and the equity in its net loss is $1.2 million for 1996.
The financial statements of HPS and Staffing were audited by other auditors
whose reports thereon have been furnished to us and our opinion, insofar as
it relates to the amounts included for HPS in 1996 and 1995 and for
Staffing in 1996, is based solely on the reports of the other auditors.

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

As described in Note 1 to the financial statements, the shareholders of Noel
Group, Inc. approved a plan of complete liquidation and dissolution on March 19,
1997, and the Company commenced carrying out the plan shortly thereafter. As a
result, the Company has changed its basis of accounting for periods subsequent
to March 31, 1997, from the going-concern basis to a liquidation basis.
Accordingly, the carrying values of the remaining assets as of December 31,
1997, are presented at estimated realizable value and liabilities are presented
at estimated settlement amounts.

In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Noel Group, Inc. and subsidiaries as of December 31,
1996, the results of their operations and their cash flows for the period from
January 1, 1997 to March 31, 1997, and for each of the two years in the period
ended December 31, 1996, Noel Group, Inc.'s net assets in liquidation as of
December 31, 1997, and the changes in its net assets in liquidation for the
period from April 1, 1997 to December 31, 1997, in conformity with generally
accepted accounting principles applied on the basis described in the preceding
paragraph.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
consolidated financial statements is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic consolidated financial statements and, in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic consolidated financial statements
taken as a whole.


                               Arthur Andersen LLP
New York, New York
March 25, 1998


                                       F-2

<PAGE>

<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item 1. - Financial Statements

                                NOEL GROUP, INC.
                     STATEMENT OF NET ASSETS IN LIQUIDATION
                               (Liquidation Basis)
                (Dollars in thousands, except per share amounts)

                                                              December 31,
                                                                  1997
                                                              ------------
Assets

Cash and cash equivalents ..................................    $  3,493
                                                                
Short-term investments  ....................................       9,697
                                                                --------
                                                                
Total cash and short-term investments   ....................      13,190
                                                                
Investments (Note 2)  ......................................      58,183
                                                                
Income taxes (Note 4)    ...................................       5,134
                                                                
Other assets (Note 2)  .....................................      12,405
                                                                --------
                                                                
Total assets  ..............................................      88,912
                                                                --------
                                                                
Liabilities                                                     
                                                                
Accounts payable  ..........................................         281
                                                                
Accrued expenses (Note 5)  .................................       5,070
                                                                --------
                                                                
Total liabilities  .........................................       5,351
                                                                --------
                                                                
Net assets in liquidation  .................................    $ 83,561
                                                                ========
                                                             
Number of common shares outstanding  .......................  20,567,757
                                                              ==========

Net assets in liquidation per outstanding share  ...........       $4.06
                                                                   =====

    The accompanying notes are an integral part of this financial statement.


                                       F-3

<PAGE>

<PAGE>

                                NOEL GROUP, INC.
                STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                               (Liquidation Basis)
                             (Dollars in thousands)

                                                                For the Nine
                                                                Months Ended
                                                              December 31,1997
                                                              ----------------

Net assets in liquidation at April 1 (Note 6)  ................  $ 158,353 
Changes in estimated liquidation values of                       
 assets and liabilities (Note 3) ..............................     (9,001)
Distributions to shareholders (Note 8)  .......................    (65,791)
                                                                 ---------
Net assets in liquidation at December 31  .....................  $  83,561
                                                                 =========

    The accompanying notes are an integral part of this financial statement.


                                       F-4

<PAGE>

<PAGE>

                        NOEL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                              (Going-Concern Basis)
                    (Dollars in thousands, except par values)

                                                                    December 31,
                                                                        1996
                                                                    ------------
                                    ASSETS
Current assets:
     Cash and cash equivalents......................................   $  1,117
     Short-term investments.........................................      8,983
     Accounts receivable, less allowance of $3,718 .................     24,023
     Inventories....................................................     34,157
     Other current assets...........................................      4,232
                                                                       --------
Total current assets ...............................................     72,512

Equity investments (Note 11) .......................................     68,026
Other investments ..................................................        639
Property, plant and equipment, net (Note 13)........................     37,671
Intangible assets, net .............................................     46,015
Other assets .......................................................      5,658
                                                                       --------
     Total assets ..................................................   $230,521
                                                                       ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt  (Note 14)...................     $4,719
     Trade accounts payable.........................................     13,226
     Accrued compensation and benefits..............................      5,567
     Net liabilities of discontinued operations (Note 12)...........      3,597
     Other current liabilities......................................      8,417
                                                                       --------
Total current liabilities...........................................     35,526

Long-term debt (Note 14)............................................     60,983
Other long-term liabilities.........................................     29,085
Minority interest...................................................      7,567
                                                                       --------
          Total liabilities.........................................    133,161
                                                                       --------

Stockholders' equity:  (Notes 16 and 17)
     Preferred stock, $.10 par value, 2,000,000 shares authorized,
       none outstanding.............................................         --
     Common stock, $.10 par value, 48,000,000 shares authorized,
       20,222,642 issued............................................      2,022
     Capital in excess of par value.................................    211,633
     Accumulated deficit............................................   (115,123)
     Cumulative translation adjustment..............................       (481)
     Treasury stock at cost, 34,937 shares .........................       (691)
                                                                       --------
Total Stockholders' equity .........................................     97,360
                                                                       --------
          Total liabilities and stockholders' equity................   $230,521
                                                                       ========

    The accompanying notes are an integral part of this financial statement.


                                       F-5

<PAGE>

<PAGE>

                        NOEL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Going-Concern Basis)
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                           For the Three
                                                            Months Ended       For the Years Ended
                                                               March 31,           December 31,
                                                                1997           1996           1995
                                                            ------------   ------------   ------------
<S>                                                         <C>            <C>            <C>         
Revenue Items:
       Sales .............................................  $     38,473   $    189,325   $    181,709

Cost and Expense Items:
       Cost of sales .....................................        20,711        106,426        105,318
       Selling, general, administrative and other expenses        17,220         69,246         71,799
       Loss on disposal of Carlyle's thread division .....         4,364             --             --
       Impairment charge (Note 11) .......................            --             --         29,155
       Depreciation and amortization .....................           862          4,459          4,888
                                                            ------------   ------------   ------------
                                                                  43,157        180,131        211,160
                                                            ------------   ------------   ------------
Operating income (loss) ..................................        (4,684)         9,194        (29,451)
                                                            ------------   ------------   ------------

Other Income (Expense):
       Gain on sale of HealthPlan Services Corporation
           (Note 11) .....................................        15,098             --             --
       Other income (Note 18) ............................           237            599          6,703
       Income (Loss) from equity investments .............          (354)        (4,707)         3,761
       Interest expense ..................................        (1,670)        (7,970)        (7,801)
       Minority interest .................................           501         (1,363)        10,923
                                                            ------------   ------------   ------------
                                                                  13,812        (13,441)        13,586
                                                            ------------   ------------   ------------
Income (Loss) from continuing operations before income
  taxes ..................................................         9,128         (4,247)       (15,865)
Benefit (Provision) for income taxes (Note 19) ...........       (10,437)         1,142            284
                                                            ------------   ------------   ------------
Loss from continuing operations ..........................        (1,309)        (3,105)       (15,581)
Income (Loss) from discontinued operations (Note 12) .....            --            448         (6,544)
                                                            ------------   ------------   ------------
            Net loss .....................................  $     (1,309)  $     (2,657)  $    (22,125)
                                                            ============   ============   ============

Basic earnings per share from:
       Continuing operations .............................  $      (0.06)  $      (0.15)  $      (0.77)
       Discontinued operations ...........................          0.00           0.02          (0.33)
                                                            ------------   ------------   ------------
            Net loss .....................................  $      (0.06)  $      (0.13)  $      (1.10)
                                                            ============   ============   ============
Weighted average shares outstanding ......................    20,402,891     20,189,647     20,192,233
                                                            ============   ============   ============
</TABLE>

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


                                       F-6

<PAGE>

<PAGE>

                        NOEL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Going-Concern Basis)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                              For the Three
                                                               Months Ended  For the Years Ended
                                                                 March 31,       December 31,
                                                                   1997        1996       1995
                                                                 --------    --------   --------
<S>                                                              <C>         <C>        <C>      
Cash Flows from Operating Activities:                                        
       Net Loss ...............................................  $ (1,309)   $ (2,657)  $(22,125)
Adjustments to reconcile net income to net cash                              
  provided from (used for) operating activities:                             
       Loss (Income) from equity investments ..................       354       4,707     (3,761)
       Depreciation and amortization ..........................     1,260       6,873      7,717
       Net (gain) loss on securities ..........................   (15,098)         85     (5,533)
       Provisions for doubtful accounts and valuation of                     
       inventories ............................................       174         (40)     1,554
       (Benefit) Provision for deferred income taxes ..........    (2,664)      2,729       (674)
       (Gain) Loss on property and equipment ..................        --        (131)       418
       Minority interest, net .................................      (501)      1,363    (10,923)
       Impairment charge ......................................        --          --     29,155
       Loss on disposal of Carlyle thread division ............     4,364          --         --
       (Income) Loss on disposal of discontinued                             
       operations .............................................        --        (448)     5,234
       Other, net .............................................        86         530        889
                                                                             
Changes in certain assets and liabilities, net of acquisitions:              
       Accounts receivable ....................................      (521)     (2,885)     2,160
       Inventories ............................................      (673)     (1,101)     2,147
       Trade accounts payable .................................       406          53        491
       Income taxes payable ...................................     8,493          --         --
       Accrued compensation and benefits ......................      (430)       (209)       221
       Other, net .............................................     3,251      (5,534)    (6,136)
        Discontinued operations ...............................    (3,141)     (1,331)     8,872
                                                                 --------    --------   --------
                                                                             
                 Total adjustments ............................    (4,640)      4,661     31,831
                                                                 --------    --------   --------
                                                                             
Net cash provided from (used for) operating activities ........    (5,949)      2,004      9,706
                                                                 --------    --------   --------
                                                                                      (continued)
</TABLE>


                                       F-7

<PAGE>

<PAGE>

<TABLE>
<CAPTION>
                                                       For the Three
                                                        Months Ended  For the Years Ended
                                                          March 31,       December 31,
                                                           1997        1996        1995
                                                         ---------   ---------   ---------
<S>                                                              <C>         <C>        <C>      
Cash Flows From Investing Activities:
       Payments for companies purchased, net of cash
       acquired .......................................         --      (6,716)     (3,050)
       Cash of deconsolidated subsidiary ..............         --          --      (4,303)
       (Purchases) Sales of short-term investments, net     (2,752)      9,399       3,845
       Sales (Purchases) of investments ...............     26,400      (8,084)    (11,105)
       Sales of investments ...........................     51,924          --         972
       Sales of discontinued operations ...............         --       8,190      23,977
       Purchases of property, plant and equipment .....       (787)     (4,313)     (4,857)
       Sales of property, plant and equipment .........         --       2,175       1,724
       Other, net .....................................       (148)     (1,653)       (845)
                                                         ---------   ---------   ---------

Net cash provided from (used for) investing activities      74,637      (1,002)      6,358
                                                         ---------   ---------   ---------

Cash Flows From Financing Activities:
       Borrowings from revolving credit line and long-
       term debt ......................................     41,121     135,441     143,848
       Repayments of revolving credit line and long-
       term debt ......................................    (76,698)   (144,528)   (154,950)
       Issuance of common stock, net ..................        910          --          25
       Change in other long-term liabilities ..........         90      (1,287)     (3,012)
       Other, net .....................................        (19)        (95)         --
                                                         ---------   ---------   ---------

Net cash used for financing activities ................    (34,596)    (10,469)    (14,089)
                                                         ---------   ---------   ---------

Effect of exchange rates on cash ......................        (38)        138          22
                                                         ---------   ---------   ---------

Net increase (decrease) in cash and cash equivalents ..     34,054      (9,329)      1,997
Cash and cash equivalents at beginning of period ......      1,117      10,446       8,449
                                                         ---------   ---------   ---------
Cash and cash equivalents at end of period ............  $  35,171   $   1,117   $  10,446
                                                         =========   =========   =========
</TABLE>

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


                                       F-8

<PAGE>

<PAGE>

                        NOEL GROUP, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
   FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND THE YEARS ENDED DECEMBER 31,
                                  1996 AND 1995
                              (Going-Concern Basis)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                            Common Stock      Capital in              Cumulative   Unrealized
                                                            ------------      Excess of  Accumulated  Translation    Holding 
                                                          Shares     Amount   Par Value    Deficit    Adjustment      Gains  
                                                         --------   --------  ---------    --------   ----------     ------- 
<S>                                                       <C>        <C>      <C>          <C>          <C>         <C>      
Balance, January 1, 1995 ............................     20,203     $2,020   $189,716     $(90,341)    $ (639)               
Net loss.............................................         --         --         --      (22,125)        --               
Subsidiary stock transaction (Note 11)...............         --         --     14,442           --         --               
Cumulative translation adjustment....................         --         --         --           --         26               
Other................................................         --         --        308           --         --               
                                                          ------     ------    -------     --------     ------               
Balance, December 31, 1995...........................     20,203      2,020    204,466     (112,466)      (613)               
Net loss.............................................         --         --         --       (2,657)        --               
Subsidiary stock transactions (Note 11)..............         --         --      7,004           --         --               
Purchase of treasury stock...........................         --         --         --           --         --               
Issuance of common stock.............................         19          2        163           --         --               
Cumulative translation adjustment....................         --         --         --           --        132                
                                                          ------     ------   --------     --------     ------         ----  
Balance, December 31, 1996...........................     20,222      2,022    211,633     (115,123)      (481)        $  0  
Net Loss ............................................         --         --         --       (1,309)        --           --  
Subsidiary stock transactions (Note 11) .............         --         --         48           --         --           --  
Issuance of common stock ............................        233         24      1,610           --         --           --  
Unrealized holding gains ............................         --         --         --           --         --          908  
Cumulative translation adjustment ...................         --         --         --           --        (38)          --  
                                                          ------     ------   --------     ---------    ------         ----  
Balance, March 31, 1997..............................     20,455     $2,046   $213,291     (116,432)    $ (519)        $908  
                                                          ======     ======   ========     =========    ======         ====  

<CAPTION>
                                                            Treasury Stock
                                                           -----------------  Stockholders'
                                                           Shares    Amount      Equity
                                                           -------  --------    --------
<S>                                                        <C>      <C>        <C>
Balance, January 1, 1995 ............................         11     $(487)     $100,269
Net loss.............................................         --        --       (22,125)
Subsidiary stock transaction (Note 11)...............         --        --        14,442
Cumulative translation adjustment....................         --        --            26
Other................................................         --        --           308
                                                           -----    ------      --------
Balance, December 31, 1995...........................         11      (487)       92,920   
Net loss.............................................         --        --        (2,657)   
Subsidiary stock transactions (Note 11)..............         --        --         7,004   
Purchase of treasury stock...........................         24      (204)         (204)   
Issuance of common stock.............................         --        --           165   
Cumulative translation adjustment....................         --        --           132    
                                                           -----    ------      --------   
Balance, December 31, 1996...........................         35      (691)       97,360   
Net Loss ............................................         --        --        (1,309)   
Subsidiary stock transactions (Note 11) .............         --        --            48   
Issuance of common stock ............................         --        --         1,634   
Unrealized holding gains ............................         --        --           908   
Cumulative translation adjustment ...................         --        --           (38)   
                                                           -----    ------      --------   
Balance, March 31, 1997..............................         35    $ (691)     $ 98,603   
                                                           =====    ======      ========   
</TABLE>

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


                                       F-9

<PAGE>

<PAGE>

                                NOEL GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS

      This Report on Form 10-K contains, in addition to historical information,
certain forward-looking statements, including those regarding valuation of
assets and liabilities. Such statements, including, as more fully set forth
below, those relating to management's estimates of the net value of the
Company's assets in liquidation, involve certain risks and uncertainties,
including, without limitation, those risks and uncertainties discussed below.
Should one or more of these risks or uncertainties materialize, actual outcomes
may vary materially from those indicated.

LIQUIDATION BASIS STATEMENTS

1. PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION

      On March 19, 1997, the shareholders of Noel Group, Inc. ("Noel") approved
a Plan of Complete Liquidation and Dissolution (the "Plan"), which was adopted
by Noel's Board of Directors on May 21, 1996. Under the Plan, Noel is being
liquidated (i) by the sale of such of its assets as are not to be distributed in
kind to its shareholders, and (ii) after paying or providing for all its claims,
obligations and expenses, by cash and in-kind distributions to its shareholders
pro rata and if required by the Plan or deemed necessary by the Board of
Directors, by distributions of its assets from time to time to one or more
liquidating trusts established for the benefit of the then shareholders, or by a
final distribution of its then remaining assets to a liquidating trust
established for the benefit of the then shareholders.

      As a result of the adoption of the Plan by the shareholders, Noel adopted
the liquidation basis of accounting as of April 1, 1997. Under the liquidation
basis of accounting, assets are stated at their estimated net realizable values
and liabilities are stated at their anticipated settlement amounts. See Note 2
for a specific discussion of the methods used to determine estimated net
realizable values of investments.

      The valuation of assets and liabilities necessarily requires many
estimates and assumptions and there are substantial uncertainties in carrying
out the provisions of the Plan. The actual value of any liquidating
distributions will depend upon a variety of factors including, but not limited
to, the actual market prices of any securities distributed in-kind when they are
distributed, the actual proceeds from the sale or other disposition of any of
Noel's assets, the ultimate settlement amounts of Noel's liabilities and
obligations, actual costs incurred in connection with carrying out the Plan,
including administrative costs during the liquidation period and the actual
timing of distributions.

      The valuations presented in the accompanying Statement of Net Assets in
Liquidation represent management's estimates, based on present facts and
circumstances, of the net realizable values of assets and costs associated with
carrying out the provisions of the Plan based on the assumptions set forth in
the accompanying notes, which assumptions management believes to be reasonable,
based on present facts and circumstances. The actual values and costs are
expected to differ from the amounts shown herein and could be higher or lower
than the amounts recorded. Accordingly, it is not possible to predict the
aggregate net values ultimately distributable to shareholders and no assurance
can be given that the amount to be received in liquidation will equal or exceed
the price or prices at which Noel Common Stock has generally traded or is
expected to trade in the future.

2. INVESTMENTS AND OTHER ASSETS

      Investments:

      Investments are recorded at their estimated net realizable value in
liquidation. For investments where a public market exists, and the entity is
subject to the periodic reporting requirements of the Securities Exchange Act of
1934, as amended, the estimated liquidation basis amount is calculated by
multiplying the market price by the number of


                                      F-10

<PAGE>

<PAGE>

common shares owned without adjustment for whether the shares owned are
registered for sale, any other restriction on transfer, control premiums, or
whether the market has sufficient liquidity to support the sale of the volume of
securities owned at the quoted prices.

      This valuation may not be reflective of actual amounts obtained when and
if these investments are distributed or of prices that might be obtained in
actual future transactions. Because of the inherent uncertainty of the valuation
of securities both where a public market exists and where it does not exist, the
estimated liquidation basis amounts shown may materially differ from the actual
amounts which may be received in the future.

      Noel's holding of the common shares of Lincoln Snacks Company ("Lincoln")
and Staffing Resources, Inc. ("Staffing") are unregistered except for 421,000
shares of Lincoln which are subject to restrictions under Rule 144. Lincoln
trades on the Nasdaq Stock Market's Small Cap Market under the symbol SNAX.

<TABLE>
<CAPTION>
                                                                                            Estimated
                                                                                        Liquidation Basis
                                                                  Common     Price Per       Amount
                                                               Shares Owned    Share    December 31, 1997
                                                               ------------  ---------  -----------------
                                                          (Dollars in thousands, except per share amounts)
<S>                                                              <C>         <C>             <C>    
Carlyle Industries, Inc. ("Carlyle") preferred stock (a)                                     $21,000

Staffing (b)                                                     2,026,104   $11.0000         22,287

Ferrovia Novoeste, S.A.  ("Novoeste") (c)                                                      8,000

Lincoln (d)                                                      3,769,755     1.5625          5,890

Other holdings                                                                                 1,006
                                                                                             -------
Total investments at estimated liquidation basis amounts                                     $58,183
                                                                                             =======
</TABLE>

(a)   Recorded based on management's assessment of a variety of market factors
      including, but not limited to, comparisons to transactions of publicly
      traded preferred stock, and an evaluation of the projected operating
      results of Carlyle. Because of the unique characteristics of the
      investment in Carlyle and non-marketability of the Carlyle preferred
      stock, the valuation of this investment is highly judgmental and subject
      to an unusual degree of uncertainty. The eventual amount realized in an
      actual transaction may be substantially less than the recorded value.
      Also, for various reasons, included those stated below, there may be
      delays in realizing Noel's holding of Carlyle preferred stock.

      Noel holds 19,312,837.5 shares of Carlyle series B preferred stock which
      has an annual dividend rate of 6%. As of December 31, 1997, Carlyle is in
      default on its obligation to Noel to redeem $11,588,000 of the liquidation
      preference of its preferred stock plus accumulated unpaid dividends of
      $3,899,000 through December 31, 1997, to the extent of its legally
      available funds. Noel and Carlyle are engaged in discussions with a view
      of satisfying Carlyle's obligations to the holders of the preferred stock
      in accordance with the terms of its charter and consistent with Carlyle's
      resources. Discussions have dealt with the amount and timing of payments
      and possible modifications of the terms of the preferred stock. Any such
      modifications would require the agreement of Carlyle and the holders of
      the preferred stock. Carlyle has informed Noel that it intends to fulfill
      its obligations to its preferred shareholders, as required by Carlyle's
      charter, to the extent that Carlyle has cash resources in excess of those
      required to operate its business. Carlyle has also informed Noel that, as
      Carlyle believes that it does not currently have such excess resources,
      its ability to make payments on account of the preferred stock in the
      future will depend on Carlyle's future cash flow, the timing of the
      settlement of the liabilities recorded on its financial 


                                      F-11

<PAGE>

<PAGE>

      statements, the outcome of its negotiations with Noel described above and
      the ability of Carlyle to obtain additional financing.

      The Carlyle board of directors is continuing its review of Carlyle's
      strategic alternatives, including, among other things, the sale of Carlyle
      through merger, sale of stock or otherwise, possible acquisitions by
      Carlyle and possible refinancing. Any such transaction and/or the
      discussions between the companies may result in the modification of the
      terms of the preferred stock or in the acceleration of the redemption of
      the preferred stock and/or the reduction in the total amounts eventually
      received by Noel for its holdings of Carlyle preferred stock.

      In addition, Carlyle has agreed to notify the Pension Benefits Guaranty
      Corporation ("PBGC") prior to making any dividend or redemption payments.
      Carlyle's decision to make any such payments will depend on the successful
      resolution of any issues which may arise with the PBGC relating to
      Carlyle's unfunded liability to its benefit plan.

      In December 1997, Carlyle notified the PBGC that it intends to redeem $10
      million of preferred stock as soon after year end as is practicable, but
      only to the extent of legally available funds as determined by its board
      of directors and after appropriate bank financing has been satisfactorily
      obtained. Following such notice, the PBGC indicated that it would not take
      any action with respect to such payments. Carlyle is currently exploring
      the possibility of securing bank financing which would enable such
      payments to be made, assuming the board of directors determines that there
      are sufficient legally available funds.

(b)   Recorded based upon Noel's review of an analysis completed by Staffing and
      its independent advisors. This analysis determined Staffing's value based
      upon actual and projected results in relation to comparable companies.
      Compared to the quoted price on the limited trading market for Staffing
      shares, Noel believes that, at the present time, this analysis is a better
      estimate of the value in liquidation of its Staffing shares at December
      31, 1997, because the trading market for Staffing is so limited, Staffing
      is not subject to periodic reporting requirements under the Securities
      Exchange Act of 1934, as amended, and Noel's shares of Staffing are not
      registered to trade in this market. This valuation may not be reflective
      of actual amounts obtained when and if this investment is distributed or
      of prices that might be obtained in an actual future transaction. The
      closing over-the-counter bid price on December 31, 1997 and March 20,
      1998, was $6.00 and $6.25 per common share of Staffing, respectively. Noel
      management is currently assessing the most advantageous way to realize its
      investment in Staffing and does not expect a transaction to occur until
      the second half of 1998, at the earliest.

      Subsidiaries of Staffing and Career Blazers Personnel Services, Inc. and
      its affiliated companies ("Career Blazers") merged on December 31, 1997,
      to form ("SRI/Career Blazers"). The merged company is being renamed Career
      Blazers Inc. effective March 31, 1998. SRI/Career Blazers offers training,
      temporary and permanent staffing services across the Northeastern,
      Mid-Atlantic, Southeastern, Southwestern and Rocky Mountain regions of the
      United States, as well as Canada and Puerto Rico.

(c)   Recorded at cost. This investment was made in March and June of 1996.
      Novoeste was organized to acquire a railroad in Brazil via a privatization
      transaction. In the absence of a ready market, or other transactional
      evidence, Noel management believes that cost is the best indicator of the
      value of this investment. Realization of this investment is dependent upon
      establishing successful operations in Brazil and a sale by Noel of its
      interest in Novoeste and is subject to the risks of operations in Brazil,
      including foreign currency risk. The actual amount realized for this
      investment could be lower or higher than the amount recorded.

(d)   Recorded based on the closing market price of the common stock on December
      31, 1997. Using the closing market price of $2.00 on March 20, 1998, this
      investment would have been valued at $7,540,000.


                                      F-12

<PAGE>

<PAGE>

Other Assets:

The components of other assets at December 31, 1997, are as follows (dollars in
thousands):

Note receivable for Curtis sale                                          $10,454

TDX distribution receivable (Note 12)                                        892

Other                                                                      1,059
                                                                         -------
                                                                         $12,405
                                                                         =======

On November 6, 1997, an agreement was signed merging Curtis Industries, Inc.
("Curtis") with a subsidiary of Paragon Corporate Holdings, Inc. Under this
agreement, Curtis shareholders received a total of $22,200,000 for all of the
outstanding shares of Curtis preferred and common stock, comprising cash
totaling $6,500,000 and two year, 7% interest bearing notes in the aggregate
principal amount of $15,700,000, secured by letters of credit. Under the
agreement, Noel received $14,712,000 for its entire holding of Curtis,
comprising $4,258,000 in cash and a note for $10,454,000, which is included in
other assets in the Statement of Net Assets in Liquidation. The investment in
Curtis was valued at $18,438,000 on the date that the liquidation basis of
accounting was adopted by Noel, March 31, 1997. Noel expects to be able to
monetize this note at approximately face value, but there can be no assurance
that a lesser amount will not be realized.

3. CHANGES IN NET ASSETS IN LIQUIDATION

      The changes in the estimated liquidation values of assets and liabilities
for the nine month period ended December 31, 1997, are as follows (dollars in
thousands):

To adjust investments to estimated liquidation value, net               $(6,387)

To adjust estimated accrued expenses                                      2,523

To adjust estimated income taxes                                            679

To adjust other assets                                                     (364)
                                                                        -------

Total adjustments                                                        (3,549)

To reflect impact of settlement of options and warrants (Note 7)         (5,452)
                                                                        -------

                                                                        $(9,001)
                                                                        =======

4. INCOME TAXES

      The income tax asset at December 31, 1997, reflects the liquidation basis
of accounting. Estimated income taxes are calculated at a 35% rate on the
taxable income and losses which would be generated if the assets were realized
and liabilities settled at the amounts shown. This estimate is subject to
significant variation if, among other things, the actual values of assets
distributed, sold or otherwise disposed of varies from current estimates. The
income tax asset is projected to be realized in part through the filing of the
1998 tax return and assumes that the liquidation will be completed by December
31, 1998.


                                      F-13

<PAGE>

<PAGE>

The components of the income tax asset at December 31, 1997, are as follows
(dollars in thousands):

Net unrealized capital gain                                            $   (222)

Net realized capital gain                                               (16,130)

Realizable net operating loss carryforwards                               3,280

Loss from the settlement of recorded liabilities                          8,442
                                                                       --------

Net income tax liability                                                 (4,630)

Estimated taxes paid in 1997 and refund carryforwards                     9,764
                                                                       --------

Net income tax asset                                                   $  5,134
                                                                       ========

      Noel had additional net operating loss carryforwards of approximately
$8,117,000 at December 31, 1997, which expire from 2003 through 2011. Noel has
undergone "ownership changes" within the meaning of Section 382 of the Internal
Revenue Code of 1986, as amended. Consequently, future utilization of these
Federal tax loss carryforwards is significantly limited. If Noel's assets
and liabilities are realized at the values recorded at December 31, 1997, these
carryforwards will not be realizable because Noel will not generate future
taxable income.

      In February 1998, Noel received $3,531,000 as a partial refund of the
estimated over-payment of taxes paid to the IRS in 1997.

5. ACCRUED EXPENSES

      Accrued expenses include estimates of costs to be incurred in carrying out
the Plan and provisions for known liabilities. These costs include a provision
for costs to be incurred in connection with the distribution, sale or other
disposition of Noel's investments including legal and investment banking fees
and salaries and related expenses of officers and employees assigned to effect
the distribution, sale or other disposition of specific investments.

      The components of accrued expenses at December 31, 1997, are as follows
(dollars in thousands):

Salaries and benefits                                                     $2,414

Rent and other expenses                                                    1,147

Professional fees                                                            823

Other, net                                                                   686
                                                                          ------

                                                                          $5,070
                                                                          ======

      Included in rent and other expenses at December 31,1997, are minimum 1998
rental payments under noncancellable operating leases of $793,000.

      The actual costs incurred could vary significantly from the related
accrued expenses due to uncertainty related to the length of time required to
complete the Plan, the exact method by which each of Noel's assets will be
realized and contingencies.

      For the nine months ended December 31, 1997, Noel's cash operating
expenses exceeded the return on its cash and cash equivalents and short-term
investments by $5,910,000. Cash operating expenses exclude payments made to
settle preexisting contractual obligations which have been accrued for. These
obligations primarily include employee 


                                      F-14

<PAGE>

<PAGE>

benefit programs and consulting arrangements, payments for which total
$2,582,000 for the nine month period ended December 31, 1997.

      Noel's cash operating expenses for the nine months ended December 31,
1997, were as follows (dollars in thousands):

Salaries and benefits                                                     $3,924

Rent and other office expenses                                             1,679

Insurance                                                                    499

Professional fees                                                            695
                                                                          ------

                                                                          $6,797
                                                                          ======

6. ADJUSTMENTS FROM GOING-CONCERN TO LIQUIDATION BASIS OF ACCOUNTING

      The adjustments from stockholders' equity on the going-concern basis to
net assets in liquidation on the liquidation basis of accounting at March 31,
1997, were as follows (dollars in thousands):

Stockholders' equity at March 31, 1997, (Going-Concern Basis)         $  98,603
                                                                      ---------

To increase investments to estimated net realizable values               71,307

To increase liabilities to anticipated settlement amounts                (8,939)

To adjust other assets                                                   (2,618)
                                                                      ---------

Total adjustments                                                        59,750
                                                                      ---------

Net assets in liquidation at March 31, 1997 (Liquidation Basis)       $ 158,353
                                                                      =========

7. OPTIONS AND WARRANTS

      On July 7, 1997, as authorized by the Stock Option and Compensation
Committee of the Board of Directors, Noel settled 2,840,107 options and warrants
outstanding for the purchase of Noel Common Stock. As a result of the settlement
and exercise of the options and warrants, Noel issued 146,718 shares of Noel
Common Stock, transferred 108,570 shares of HealthPlan Services Corporation
("HPS") common stock, paid $10,537,000 in cash for payroll taxes and settlement
amounts and received $722,000 in cash exercise proceeds. Noel's federal income
tax benefit for the compensation expense related to the settlement was
approximately $4,363,000.

8. LIQUIDATING DISTRIBUTIONS

      On April 25, 1997, Noel distributed 3,754,675 shares of HPS common stock
valued at $14.375 per HPS share for a total value of $53,974,000 to Noel
shareholders of record on April 18, 1997. The distribution rate was 0.1838631 of
a share of HPS common stock per share of Noel Common Stock and the value of the
distribution was $2.6430 per share of Noel Common Stock.

      On October 6, 1997, Noel distributed 412,601 shares of HPS common stock
valued at $21.1565 per HPS share for a total value of $8,729,000 to Noel
shareholders of record on September 29, 1997. The distribution rate was 0.02006
of a share of HPS common stock per share of Noel Common Stock and the value of
the distribution was $.4244 per share of Noel Common Stock.


                                      F-15

<PAGE>

<PAGE>

      On December 1, 1997, Noel distributed 2,205,814 shares of Carlyle common
stock valued at $1.40 per Carlyle share for a total value of $3,088,000 to Noel
shareholders of record on November 21, 1997. The distribution rate was .107246
of a share of Carlyle common stock per share of Noel Common Stock and the value
of the distribution was $.1501 per share of Noel Common Stock.

      On March 27, 1998, Noel distributed $.70 per outstanding Noel share for a
total value of $14,397,000 to shareholders of record at the close of business on
March 20, 1998.

9. COMMITMENTS AND CONTINGENCIES

      Certain of Noel's holdings are involved in various legal proceedings
generally incidental to their businesses. While the result of any litigation
contains an element of uncertainty, management believes that the outcome of any
known, pending or threatened legal proceeding or claim, or all of them combined,
will not have a material adverse effect on Noel's financial position.

GOING-CONCERN BASIS STATEMENTS

10. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL:

      Prior to the approval of the Plan, Noel conducted its principal operations
through small and medium-sized companies in which Noel held controlling or other
significant equity interests.

Consolidation:

      The consolidated financial statements include the accounts of Noel and its
subsidiaries, Carlyle, Curtis, and Lincoln, (collectively the "Company"), after
the elimination of significant intercompany transactions.

      Following HPS', initial public offering on May 19, 1995 and Noel's
simultaneous exchange of its entire holding of HPS preferred stock and accrued
dividends into HPS common stock, Noel's voting interest in HPS dropped below
50%. Therefore, for the year ended December 31, 1995, HPS is accounted for under
the equity method of accounting as if HPS had been an equity investment for all
of 1995. Noel's equity in HPS' results is included in income (loss) from equity
investments on the consolidated statements of operations.

Cash and Cash Equivalents and Short-term Investments:

      The Company considers all highly liquid investments with a maturity of
three months or less, at the date of acquisition, to be cash equivalents.
Carrying amounts of short-term investments approximate fair value.

Investments in Debt and Equity Securities:

      The Company's marketable securities and its other investments in equity
securities that have readily determinable fair values are classified as
available-for-sale securities. The equity method of accounting is used for (i)
common equity investments in which the Company's voting interest is from 20%
through 50%, (ii) for investments where Noel's voting interest is below 20% but
Noel has the ability to exercise significant influence over an investee and
(iii) for limited partnership investments. The cost method of accounting is used
for common equity investments in which the Company's voting interest is less
than 20% for which fair values are not readily determinable and for which
significant influence 


                                      F-16

<PAGE>

<PAGE>

cannot be exercised. A non-temporary decline in the value of any equity or cost
basis investment is expensed at the time such decline is identified.

Use of Estimates:

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

Inventories:

      Inventories, net of reserves, consist of the following (dollars in
thousands):

                                                  December 31,
                                                      1996
                                                  ------------
      
      Raw materials and supplies                    $ 7,189
      Work in process                                 4,201
      Finished goods                                 22,767
                                                    -------
                                                    $34,157
                                                    =======

      Inventories are stated at lower of cost or market, determined principally
by the FIFO method. At December 31, 1996, inventories of $18,533,000 are valued
by the LIFO method. If the FIFO method had been used, the stated amounts of
inventories would not have been materially affected.

Property, Plant and Equipment:

      Property, plant and equipment are carried at cost. Depreciation is
provided primarily using the straight-line method over the estimated useful
lives of the related assets as follows:

      Machinery and equipment                      3 - 25 years
      Buildings and leasehold improvements         7 - 35 years
      Furniture and fixtures                       3 - 30 years

      Leasehold improvements are depreciated using the straight-line method over
the lives of the related leases or their estimated useful lives, whichever are
shorter. The cost of repairs and maintenance is charged to expense as incurred,
while renewals and betterments are capitalized.

Intangible Assets:

      Intangible assets, primarily costs in excess of the fair value of net
assets acquired, are being amortized using the straight-line method over periods
ranging from 3 to 30 years. Intangible assets consist of the following (dollars
in thousands):

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

      Goodwill                                                  $53,180
      Other                                                         612
                                                                -------
                                                                 53,792
      Less: Accumulated amortization                             (7,777)
                                                                -------
                                                                $46,015
                                                                =======


                                      F-17

<PAGE>

<PAGE>

      The realizability of goodwill is evaluated by segment. The Company adopted
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
("SFAS 121"), effective January 1, 1995. The adoption of SFAS 121 did not have a
material impact on the Company's financial position or results of operations.

Minority Interest:

      Minority interest includes $4,193,000 related to redeemable preferred
stock of subsidiaries at December 31, 1996.

Financial Instruments:

      The carrying amount of the Company's financial instruments, for which it
was practicable to determine fair value, approximates fair value.

Foreign Currency Translation:

      Assets and liabilities of foreign operations are translated into U.S.
dollars using period-end exchange rates, while revenue and expenses are
translated at average exchange rates throughout the period. Adjustments
resulting from translation are recorded as a separate component of stockholders'
equity. Gains and losses resulting from foreign currency transactions are
recognized in the results of operations in the period incurred.

Revenue:

      Revenue from product sales is recorded at the time of shipment.

Other Income:

      Interest income is accrued and reported as earned only to the extent that
management anticipates such amounts to be collectible. Accrued interest is
evaluated periodically and an allowance for uncollectible interest income is
established when necessary.

Basic Earnings per Share:

      In 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share." SFAS No. 128 replaced the calculation of primary and
fully diluted earnings per shares with basic and diluted earnings per share.
Basic earnings per share excludes the dilutive effects of options, warrants, and
convertible securities. Diluted earnings per share gives effect to all dilutive
securities that were outstanding during the period. All earnings per share
amounts have been presented or restated to conform to the SFAS No. 128
requirements. Diluted earnings per share have not been presented since the
computation would be antidilutive.

11. INVESTMENTS AND ACQUISITIONS

Ferrovia Novoeste, S.A.

      On March 5, 1996, a consortium led by Noel and Chase Capital Partners,
formerly Chemical Venture Partners, purchased by auction the concession for the
Brazilian federal railroad's western network for approximately $63.6 million.
The purchase of the network consists of a 30-year concession and a lease of the
federal railroad's equipment. Noel invested $8.0 million for approximately 34%
of the concession holder, Ferrovia Novoeste, S.A., ("Novoeste"), which began
operating the railroad on July 1, 1996.


                                      F-18

<PAGE>

<PAGE>

      Summarized financial information for Novoeste is as follows (dollars in
thousands):

                                          December 31,
                                              1996
                                       --------------------
      Current assets                   $             4,999
      Noncurrent assets                $            71,652
      Current liabilities              $             3,178
      Noncurrent liabilities           $            61,311

                                        Three Months Ended    Six Months Ended
                                          March 31, 1997     December 31, 1996
                                       --------------------  -----------------
      Revenue from services            $             6,858   $          17,498
      Operating costs and expenses     $             7,877   $          19,959
      Net loss                         $            (2,705)  $          (7,350)

Staffing Resources, Inc.

            On July 31, 1995, Noel received 1,026,104 shares of common stock of
Staffing Resources, Inc. ("Staffing") as payment for its $8,190,000 face value
subordinated note from Brae Group, Inc. ("Brae Note"), plus accrued interest of
$3,097,000. Noel recognized a gain of $6,598,000 on the payment of the Brae
Note.

            On November 15, 1995, Noel purchased an additional 1,000,000 shares
of Staffing common stock for $11,000,000 in a private placement offering.

            Staffing was recorded as a cost basis investment at December 31,
1995. During 1996, Noel began accounting for Staffing under the equity method of
accounting and recorded an equity loss of $1,174,000 representing its share of
Staffing's losses from July 31, 1995, the date of Noel's acquisition of the
Staffing shares, through December 31, 1996. Staffing issued additional common
shares in 1996 and 1995, diluting Noel's common ownership percentage to
approximately 16%. These share issuances were recorded as subsidiary stock
transactions by Noel with an increase of $1,199,000, net of taxes of $618,000,
recorded directly to capital in excess of par value in 1996.

            Summarized financial information for Staffing is as follows (dollars
in thousands):

                                         December 31,
                                             1996
                                     --------------------
      Current assets                 $            43,536
      Noncurrent assets              $           140,514
      Current liabilities            $            25,690
      Noncurrent liabilities         $            69,340

                                      Three Months Ended         Year Ended
                                         March 31, 1997      December 31, 1996
                                     --------------------   -------------------
      Revenue from services          $            73,711    $           300,898
      Operating costs and expenses   $            74,370    $           297,978
      Net loss                       $            (1,527)   $            (2,405)


                                      F-19

<PAGE>

<PAGE>

HealthPlan Services Corporation

            Pursuant to a Stock Purchase Agreement dated September 2, 1994, by
and among The Dun & Bradstreet Corporation, its wholly-owned subsidiary Dun &
Bradstreet Plan Services, Inc., Noel, HPS, formerly GMS Acquisition Company, and
certain other investors, HPS purchased all of the outstanding stock of
HealthPlan Services, Inc. for a cash purchase price of $19,000,000, excluding
$1,309,000 of related expenses, and the assumption of designated liabilities.
Noel and other investors capitalized HPS with $20,000,000 and arranged a
$20,000,000 line of credit to support working capital requirements.

            The acquisition was accounted for as a purchase. The excess of the
allocated purchase price over the fair value of the net tangible assets
acquired, $30,730,000, was recorded as goodwill and is being amortized over a 25
year period.

            On May 19, 1995, HPS completed an initial public offering of
4,025,000 newly issued common shares, raising net proceeds of $50,806,000.
Following HPS' initial public offering and Noel's exchange of its entire holding
of HPS preferred stock and accrued dividends into common equity, Noel's common
equity ownership percentage of HPS decreased from approximately 58% to
approximately 42%. The offering was recorded as a subsidiary stock transaction
by Noel with an increase of $14,421,000, net of taxes of $1,012,000, recorded
directly to capital in excess of par value. Following Noel's exchange of its
holding of HPS preferred stock, Noel's holding of HPS common stock increased to
5,595,846 shares.

            During 1996, Noel's ownership percentage of HPS was further diluted
to approximately 37% when HPS issued 1,561,067 common shares related to the
acquisition of two new operating units. These and other share issuances were
also recorded as subsidiary stock transactions by Noel, with an increase of
$5,792,000, net of taxes of $2,984,000, recorded directly to capital in excess
of par value.

            On February 7, 1997, pursuant to an agreement dated December 18,
1996 by and among Noel, Automated Data Processing, Inc. ("ADP") and HPS, Noel
sold to ADP 1,320,000 shares of its common stock of HPS for an aggregate
purchase price of $26,400,000 in cash. Following the transaction, Noel's
ownership percentage of HPS dropped to approximately 26%.

            Summarized financial information for HPS is as follows (dollars in
thousands):

                                      December 31,
                                          1996
                                    ----------------
     Current assets                 $         46,495
     Noncurrent assets              $        198,206
     Current liabilities            $         73,424
     Noncurrent liabilities         $         62,494

                                   Three Months Ended   Years Ended December 31,
                                     March 31, 1997       1996          1995
                                    ----------------    ---------     --------
     Revenue from services          $         73,593    $ 191,493     $ 98,187
     Operating costs and expenses   $         67,355    $ 199,314     $ 84,550
     Net income (loss)              $          2,799    $  (6,716)    $  9,535

      After performing a review for impairment of long-lived assets related to
each of HPS' acquired businesses and applying the principles of measurement
contained in FASB 121, HPS recorded a charge against earnings of $13,700,000 in
the third quarter of 1996, representing approximately 7.6% of HPS' pre-charge
goodwill. This charge was attributable to impairment of goodwill recorded on the
acquisitions made in 1995. Any further significant declines in HPS' projected
net cash flows, with respect to such acquisitions, may result in additional
write-downs of remaining goodwill.


                                      F-20

<PAGE>

<PAGE>

      Starting in 1994, HPS pursued contracts with state-sponsored health care
purchasing alliances, initially in Florida, and in 1995 and 1996, in North
Carolina, Kentucky, and Washington. HPS incurred substantial expenses in
connection with the start-up of these contracts, and, through December 31, 1996,
the alliance business was unprofitable. HPS recorded a pre-tax charge related to
these contracts in the amount of $2,600,000 in the third quarter of 1996
resulting from increased costs and lower than anticipated revenues in Florida
and North Carolina.

      In the third quarter of 1996, HPS recorded a charge of $1,400,000 to
reflect the cost of exiting certain excess office space and terminating
employees.

      HPS is a provider of marketing, administration and risk management
services and solutions for benefit programs. HPS' clients include managed care
organizations, integrated health care delivery systems, insurance companies,
self-funded benefit plans, and health care purchasing alliances.

Carlyle Industries, Inc.

      On July 21, 1993, BH Acquisition Corporation ("BH Acquisition"), a wholly
owned subsidiary of Noel, concluded a tender offer (the "Offer") for the
outstanding common stock of Carlyle at $30.25 per share in cash. Following the
Offer, on October 29, 1993, BH Acquisition owned 72.8% of the outstanding shares
and was merged with and into Carlyle (the "Merger"). The Offer and the Merger
are referred to together as the "Acquisition".

      The Acquisition was financed by a $41,500,000 equity contribution from
Noel and by borrowings from a group of banks. The total purchase price including
banking, advisory and other fees, and shares acquired following the Offer was
approximately $64,500,000.

      The Acquisition was accounted for as a purchase. The excess of the
allocated purchase price over the fair value of the net tangible assets
acquired, $40,000,000, was recorded as goodwill and is being amortized over a 30
year period.

      In February 1994, Noel spun off its entire common equity interest in the
recapitalized Carlyle to Noel stockholders at a rate of .175434 new Carlyle
share for every Noel share held. Pursuant to the accounting rules for spin-offs,
no gain was recognized.

      In December 1994, Noel exchanged $18,813,000 of preferred stock and
$3,216,000 of accrued dividends for 2,205,814 shares or 30% of Carlyle's
outstanding common stock. Noel retained voting control through its remaining
holding of Carlyle preferred stock. Because Noel had both a substantial common
equity interest and voting control of Carlyle as of December 31, 1994, Carlyle
was consolidated as of that date.

      During 1995, Carlyle's thread division results were substantially below
historical levels and the levels expected when Carlyle was acquired in 1993.
Based on this performance and projected future levels of operations, Carlyle's
management determined that certain assets were impaired and recorded an
impairment charge of $25,000,000. This charge represents a write-off of goodwill
of $17,400,000, a charge of $6,400,000 to adjust the book value of assets to
their December 1995 fair value and other related charges of $1,200,000. Noel
also recorded a charge of $4,155,000 to write off its goodwill related to
Carlyle's thread division.

      On March 26, 1997, pursuant to an asset purchase agreement dated as of
December 12, 1996, Carlyle sold its thread division to Hicking Pentecost PLC for
aggregate cash consideration of approximately $54,900,000, subject to
adjustment, plus the assumption of certain liabilities. The estimated loss on
disposal on the sale of this division was $11,300,000, but the actual loss
recorded could differ significantly from this estimate depending on the
resolution of certain contingencies. The net proceeds from this sale were used
to pay off Carlyle's outstanding bank indebtedness. Accordingly, Carlyle
currently has no outstanding bank indebtedness.

      Carlyle distributes a line of craft products, principally buttons.


                                      F-21

<PAGE>

<PAGE>

Curtis Industries, Inc.

      On August 17, 1992, Noel purchased newly-issued equity securities of
Curtis for $15,000,000 for approximately 65% of Curtis' equity. The acquisition
was accounted for as a purchase. The excess of the allocated purchase price over
the fair value of the net tangible assets acquired, $17,592,000, was recorded as
goodwill and is being amortized over a 30 year period. On November 13, 1995,
Curtis sold its retail division to SDI Operating Partners, LP, ("SDI") in order
to focus on its automotive and industrial division.

      In May 1996, Curtis acquired certain assets of the Mechanics Choice
business of Avnet, Inc. for approximately $6,600,000. Mechanics choice is a
distributor, selling industrial maintenance and repair operations products
similar to the existing product line Curtis offers. The acquisition was
accounted for as a purchase by Curtis. The excess of the allocated purchase
price over the fair value of net tangible assets acquired, $2,900,000 was
recorded as goodwill and is being amortized over a 20 year period.

      Curtis is a national distributor of fasteners, security products,
chemicals, automotive replacement parts, fittings and connectors, tools and
hardware.

Lincoln Snacks Company

      On August 31, 1992, Lincoln purchased certain assets of the Lincoln Snack
Company, a division of Sandoz Nutrition Corporation. The purchase price, which
was paid in cash, was $13,000,000, including expenses. The acquisition was
accounted for as a purchase. The excess of the allocated purchase price over the
fair value of the net tangible assets acquired, $3,528,000, was recorded as
goodwill and is being amortized over a 30 year period.

      On January 14, 1994, Lincoln completed an initial public offering of
2,472,500 shares of newly issued common stock which raised $9,593,000 for
Lincoln, net of expenses. At the time of the offering, Noel converted its entire
holding of shares of Lincoln preferred stock and accrued dividends for 1,728,755
shares of Lincoln common stock. Noel's interest in Lincoln's common equity was
approximately 58% following the offering. The offering was recorded as a
subsidiary stock transaction by Noel, with an increase of $2,438,000 recorded
directly to capital in excess of par value.

      Lincoln is one of the leading manufacturers and marketers in the United
States and Canada of caramelized pre-popped popcorn with a product line that
includes Poppycock'r', Fiddle Faddle'r', and Screaming Yellow Zonkers'r'. On
July 17, 1995, an exclusive distribution agreement with the Planters Company, an
operating unit of Nabisco, Inc., commenced for the sale and distribution of
Fiddle Faddle and Screaming Yellow Zonkers in the United States. On February 28,
1997, this agreement was amended, extending the term until December 31, 1997.
Also, under the amendment, Lincoln resumed sales and distribution of Screaming
Yellow Zonkers on May 1, 1997. Although the amendment and extension contained
provisions designed to effect a smooth transfer of the distribution business
back to Lincoln, there can be no assurance that this will be the case.

12. DISCONTINUED OPERATIONS

      The historical financial statements reflect Simmons Outdoor Corporation
("Simmons"), Carlyle's home furnishings division, Curtis' retail division and
TDX Corporation ("TDX") as discontinued operations.

      As a result of Carlyle's decision to divest its home furnishings
operations, Carlyle recorded an estimated loss on disposal of $18,000,000, net
of income tax benefit, including $7,599,000 of goodwill write-off, in the fourth
quarter of 1995. Noel recorded a charge of $1,813,000 to write off its goodwill
related to Carlyle's home furnishings division. These charges, the related
minority interest benefit of $8,584,000 and Carlyle's best estimate of the
amounts to be realized on the sale of its home furnishings division were
included in discontinued operations in the 1995 statement of operations. On July
31, 1996, Carlyle completed the sale of the division. Proceeds received on the
sale, adjusted for closing costs and changes in the net asset value of the
division subsequent to the contract date totaling $8,200,000 were


                                      F-22

<PAGE>

<PAGE>

used to repay outstanding bank indebtedness. This division had sales of
approximately $19,200,000 and $30,084,000 for the period ended July 31, 1996 and
the year ended December 31, 1995, respectively.

      On December 19, 1995, S.O.C. Corporation, a wholly-owned subsidiary of
Blount Inc., completed a $10.40 per share cash tender offer for the outstanding
shares of common stock of Simmons. Pursuant to the tender offer, Noel sold
1,666,163 shares for $17,328,000. Simmons had revenue of $40,857,000 through
December 19, 1995. Simmons imports, distributes and markets optical products for
the sporting goods industry in the United States and Canada, including
riflescopes, binoculars and telescopes.

      On November 13, 1995, Curtis sold its retail division to SDI for
$7,200,000 and no gain or loss was realized on this sale. Retail sales for the
period ended November 13, 1995, were $13,937,000.

      In December 1995, Noel's Board of Directors authorized the sale of Noel's
holding of TDX common stock. TDX had revenue of approximately $5,110,000, and
$6,700,000 during 1996 and 1995 respectively, and had a net loss of
approximately $501,000 during 1996. Noel sold TDX during 1997 for a nominal
amount and received a cash distribution from TDX of $892,000 in January 1998.

      The remaining net liabilities of Carlyle's home furnishings division at
December 31, 1996, of $3,597,000 have been segregated in the consolidated
balance sheet. The net assets of TDX in 1996 of $268,000 are included in other
assets at December 31, 1996.

      The components of loss from discontinued operations are as follows
(dollars in thousands):

                                                        Years Ended December 31,
                                                          1996           1995
                                                        --------       --------
Income (Loss) from operations:
   Simmons                                              $     --       $    832
   Carlyle                                                    --             46
   Curtis                                                     --         (1,489)
   TDX                                                        --           (306)
                                                        --------       --------
                                                              --           (917)
Less: Income tax provision                                    --           (393)
                                                        --------       --------
                                                        $     --       $ (1,310)
                                                        ========       ========

Income (Loss) on disposal:
   Simmons                                              $     --       $  7,026
   Carlyle                                                   709        (14,819)
   TDX                                                        --           (379)
                                                        --------       --------
                                                             709         (8,172)
   Add: Income tax benefit (provision)                      (261)         2,938
                                                        --------       --------
                                                        $    448       $ (5,234)
                                                        ========       ========


                                      F-23

<PAGE>

<PAGE>

13. PROPERTY, PLANT AND EQUIPMENT

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

                                                          December 31,
                                                             1996
                                                           --------
            Land                                           $  2,157
            Buildings and leasehold improvements             20,330
            Machinery and equipment                          27,816
            Furniture and fixtures                              170
                                                           --------
                                                             50,473
            Less:  Accumulated depreciation                 (12,802)
                                                           --------
                                                           $ 37,671
                                                           ========

14. LONG-TERM DEBT

      Long-term debt consists of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                                    1996
                                                                                  --------
<S>                                                                               <C>     
Carlyle senior bank facilities                                                    $ 36,929
Carlyle Connecticut Development Authority note payable, 5%, due 1999                    65
Curtis note payable on equipment purchase, 9 1/2%, due 1997                             71
Curtis revolving line of credit, LIBOR plus 3% or prime plus 1%, due 1999            7,898
Curtis senior secured subordinated notes, 12%, due 1999                             12,000
Curtis subordinated debentures, 13 1/8%, due 2002                                    9,189
Curtis note payable on leasehold improvement, 10% due 2006                             491
Lincoln term loan,  prime plus 1 3/4% or a Eurodollar rate plus 3 1/4%, due 1997       450
Capital lease obligations                                                              276
                                                                                  --------
                                                                                    67,369
Less:
Current portion                                                                     (4,719)
Unamortized discount                                                                (1,667)
                                                                                  --------
                                                                                  $ 60,983
                                                                                  ========
</TABLE>

      On December 30, 1996, Carlyle entered into a new credit facility in the
aggregate amount of $42,000,000, consisting of two term loans aggregating
$22,000,000 and a $20,000,000 revolving credit facility. The term loans bear
interest, at Carlyle's option, at prime plus 1.5% or LIBOR plus 3.5% on the
first $14,000,000 borrowed ("Term Loan A") and prime plus 1.75% or LIBOR plus
3.75% on the remaining $8,000,000 in borrowings ("Term Loan B"). The revolving
loan bears interest, at Carlyle's option, at prime plus 1.25% or LIBOR plus
3.25%.

      Loans outstanding as of December 31, 1996, under Term Loan B total
$8,000,000 and are repayable in consecutive quarterly installments of $1,000,000
each beginning March 31, 1997. Loans outstanding under Term Loan A total
$14,000,000 and are repayable in consecutive quarterly installments of
$1,000,000 beginning March 31, 1999 through December 31, 2000 and consecutive
quarterly installments of $1,500,000 from December 31, 2001, to December 30,
2001.

      The senior bank facilities are secured by a first priority lien or
security interest in substantially all the assets of Carlyle. The senior bank
facilities contain representations and warranties, covenants and events of
default customary for credit facilities of this nature. Such customary covenants
include restrictions on the ability to borrow more debt, acquire other
companies, pay dividends, and the use of proceeds from the sale of assets.
Carlyle must maintain certain current asset and debt to equity ratios. In
addition, Carlyle must meet certain coverage tests related to interest and cash
flow. The Loan and Security Agreement also provides that it shall be an event of
default if, prior to December 31, 1997,


                                      F-24

<PAGE>

<PAGE>

Noel ceases to control at least 35% of the voting stock of Carlyle as a result
of Noel's "private sale" (as defined) of shares of preferred stock of Carlyle
without the consent of the lenders (which consent may be withheld only under
certain circumstances). The term "private sale" does not include any
distribution by Noel of preferred stock or common stock of Carlyle to Noel's
stockholders or the redemption by Carlyle of such shares pursuant to the terms
of Carlyle's Restated Certificate of Incorporation.

      In 1996, Curtis entered into a new credit facility which provides for a
revolving line of credit which aggregates up to a maximum principal amount of
$15,000,000. At December 31, 1996, based on available collateral, $7,102,000 was
available under the line of credit. A fee of 3/8% per annum is required on the
unused portion of the revolving credit commitment. The credit agreement is
secured by substantially all of the assets of Curtis and contains financial and
other covenants and ratios. At December 28, 1996, Curtis was in violation of a
covenant limiting capital expenditures, for which it received a waiver. Curtis
was in compliance with all other loan covenants. Included in the agreement is a
provision for the issuance of letters of credit up to a maximum of $2,000,000.
There were no letters of credit outstanding at December 31, 1996. Curtis'
subordinated debentures are redeemable at the option of Curtis.

      The Lincoln term loan bears interest at a variable rate which was 8.65% at
December 31, 1996, and were paid in 1997.

      The carrying amount of long-term debt, for which it was practicable to
determine fair value, approximates fair value at December 31, 1996. At December
31, 1996, long-term debt, including capital leases, matures as follows (dollars
in thousands):

               1997                                $   4,719
               1998                                    4,106
               1999                                   24,014
               2000                                    4,067
               2001                                   20,974
               Thereafter                              9,489
                                                   ---------
                                                   $  67,369
                                                   =========

15. LEASES

      The Company's rent expense for the period ended March 31, 1997 and for the
years ended December 31, 1996 and 1995 was $486,000, $2,438,000 and $2,789,000,
respectively.

16. STOCKHOLDERS' EQUITY

Preferred Stock:

      Noel is authorized to issue 2,000,000 shares of Preferred Stock. Noel's
Certificate of Incorporation provides that the Board of Directors of Noel,
without stockholder approval, has the authority to issue Preferred Stock from
time to time in series and to fix the designation, powers (including voting
powers, if any), preferences and relative, participating, conversion, optional,
and other special rights, and the qualifications, limitations, and restrictions
of each series.

Distributions:

      In 1994, 1993 and 1992, Noel made distributions of certain common equity
holdings to its stockholders (the "Distributions"). On February 28, 1994, Noel
distributed to Noel stockholders substantially all of Noel's holdings in Carlyle
common stock. On December 6, 1993, Noel distributed to Noel stockholders
substantially all of Noel's holdings in Sylvan Inc. ("Sylvan"). On September 21,
1992, Noel distributed to Noel stockholders substantially all of Noel's holdings
in Global Natural Resources Inc. ("Global"), Garnet Resources Corporation
("Garnet") and VISX, Incorporated ("VISX").


                                      F-25

<PAGE>

<PAGE>

      For financial accounting purposes, the Distributions have been treated as
common stock dividends recorded at the book values of the shares distributed,
which were $708,000, $9,124,000 and $22,329,000 in 1994, 1993 and 1992,
respectively, and deducted from capital in excess of par value. The excesses of
the fair values of the shares distributed over their book values on the date of
distribution, $2,620,000 and $30,760,000, in 1993 and 1992, respectively, were
not reflected as income in the Company's financial statements in accordance with
the financial accounting requirements for the spin-off of equity basis
affiliates. The fair value of the Carlyle shares distributed approximated their
book value on the date of their distribution in 1994.

      The fair market value on the date of distribution of one share of common
stock of Carlyle, Sylvan, Global, Garnet and VISX was $.20, $8.375, $6.56, $4.92
and $9.57, respectively. The value of the Distributions per Noel share was
$.0351, $.5816 and $2.6291, in 1994, 1993 and 1992, respectively. The
Distributions were classified for tax purposes as a dividend in 1994 and as
returns of capital to Noel stockholders in 1993 and 1992.

17. STOCK BASED COMPENSATION

      In the first quarter of 1995, Noel issued a total of 1,120,000 warrants to
certain Noel officers. Each warrant represents the right to purchase one share
of Noel Common Stock. Warrants were issued to purchase 800,000 and 320,000
shares at $5.00 and $5.625 per share, respectively, the trading price of Noel
Common Stock on the date that the warrants were granted. The weighted average
grant-date fair value of these warrants was $2.01 and $2.22, respectively, using
the Black-Scholes option-pricing model with risk-free interest rates of 7.8% and
7.04%, respectively, expected lives of 3 years, expected volatility of 48%, and
no expected dividends. The warrants vest 50% at issuance, 75% after one year and
100% after two years and expire ten years after the date of grant.

      Noel adopted a stock option plan in 1988 (as amended, the "1988 Plan") and
in 1995 (the "1995 Plan"; and together with the 1988 Plan, the "Employee Plans",
each being an Employee Plan), providing for the grant of options to purchase up
to an aggregate of 2,000,000 shares and 1,000,000 shares, respectively, of
Noel's Common Stock. Options under the Employee Plans may be granted to
employees of Noel and its subsidiaries, including officers who are directors,
and any other persons who perform substantial services for or on behalf of Noel,
or any of its subsidiaries, affiliates or any entity in which Noel has an
interest. Each option granted under either Employee Plan terminates no later
than ten years from the date of grant. Options issued under either Employee Plan
may be either incentive options or non-incentive options.

      To date, non-incentive options have been granted under the 1988 Plan at
the fair market value on the date of grant. No options have been granted under
the 1995 Plan. Non-incentive options previously granted to employees under the
1988 Plan generally vest over a four-year period, so that 20% of the option is
exercisable immediately and an additional 20% of the option becomes exercisable
on each of the first four anniversaries of the date of grant. Non-incentive
options previously granted to non-employees under the 1988 Plan generally vest
immediately. Non-incentive options previously granted under the 1988 Plan
generally terminate ten years after the date of grant or, in the case of
employees, one year after the termination of the status with Noel which
qualified the option holder to receive such option, if earlier.

      Incentive options granted under either Employee Plan may only be exercised
while an option holder is employed by Noel or one of its subsidiaries or within
three months after the termination of employment, to the extent that the right
to exercise such incentive option had accrued at the time of termination. The
terms of incentive options, none of which has been granted under either Employee
Plan, are subject to additional restrictions.

      In 1995, Noel adopted a non-employee directors' stock option plan (the
"Directors' Plan"), providing for the grant of non-incentive options to purchase
an aggregate of 50,000 shares of Noel Common Stock to directors who are not
employees of Noel. Under the Directors' Plan each non-employee director serving
as a director immediately following the 1995 Annual Meeting of Shareholders, who
had not previously been granted an option to purchase Noel Common Stock under
any of Noel's stock option plans, was granted a fully vested option to purchase
8,334 shares of Common Stock at an exercise price per share equal to the fair
market value on the date of shareholder approval of the plan (the "Plan Approval
Date"). Every individual who becomes a director after the Plan Approval Date,
who has not previously


                                      F-26

<PAGE>

<PAGE>

been granted options to purchase shares of Common Stock under any of Noel's
stock option plans and who is not an employee of Noel, shall be granted a vested
option to purchase 8,334 shares of Noel Common Stock, to have an exercise price
equal to the fair market value on the date of grant. Each option granted under
the Directors' Plan terminates no later than 10 years from the date of grant.

      Share and price information for the 1988 Plan, the 1995 Plan and the
Directors' Plan is as follows:

<TABLE>
<CAPTION>
                                            Number of     Option Price   Weighted Average
                                              Shares        per Share     Exercise Price
<S>                                         <C>          <C>                  <C>   
     Outstanding, January 1, 1995           1,861,125    $5.50 - $45.00       $8.470

        Granted                               116,668      5.25 - 6.875        5.366

     Outstanding, December 31, 1995         1,977,793      5.25 - 45.00        8.289

        Exercised                             (24,352)        8.355            8.355

     Outstanding, December 31, 1996         1,953,441      5.25 - 45.00        8.289

        Exercised                            (233,334)        8.355            8.355

     Outstanding, March 31, 1997            1,720,107      5.25 - 45.00        8.279

     Available for grant, March 31, 1997    1,072,207
</TABLE>

      See Note 7 for a description of the settlement of the outstanding options
and warrants.

      In connection with the 1993 and 1992 Distributions, Noel retained shares
of the distributees to give to the 1988 Plan option holders upon the exercise of
options granted prior to the Distributions. Accordingly, the option exercise
prices were not adjusted for the Distributions. In February 1994, the retained
shares of common stock were unstapled from the options and sold, recognizing a
$8,476,000 capital gain. Upon exercise, Option holders with options outstanding
at the time of the Distributions will therefore receive cash, representing the
value of the distributed shares sold, along with Noel shares. Noel recorded both
a long-term liability and an expense in the amount of $4,853,000 representing
the value of the outstanding options on the new measurement date. This liability
is valued at $4,784,000 at December 31, 1996.

      Noel applies APB Opinion No. 25 and related Interpretations in accounting
for its plans. Had compensation expense for the three months ended March 31,
1997, and for the years ended December 31, 1996 and 1995 option and warrant
grants of Noel been determined consistent with FASB Statement No. 123
"Accounting for Stock Based Compensation"("SFAS 123"), net loss and net loss per
common share for the three months ended March 31, 1997, and for the years ended
December 31, 1996 and 1995 would approximate the pro forma amounts below
(dollars in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                   1997                    1996                    1995
                          ----------------------  ----------------------  ----------------------
                          As Reported  Pro Forma  As Reported  Pro Forma  As Reported  Pro Forma
                          -----------  ---------  -----------  ---------  -----------  ---------
<S>                         <C>         <C>        <C>          <C>        <C>          <C>      
Net loss                    $(1,309)    $(1,405)   $(2,657)     $(3,040)   $(22,125)    $(22,891)
                            ========    ========   ========     ========   =========    =========
Basic net loss per share    $ (0.06)    $ (0.07)   $ (0.13)     $ (0.15)   $  (1.10)    $  (1.13)
                            ========    ========   ========     ========   =========    =========
</TABLE>

      The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. SFAS 123 does not apply to awards prior to 1995.


                                      F-27

<PAGE>

<PAGE>

18. OTHER INCOME (EXPENSE)

      Other income consists of the following (dollars in thousands):

<TABLE>
<CAPTION>
                                                  Three Months       Years Ended
                                                 Ended March 31,     December 31,
                                                      1997         1996      1995
                                                     -------      -------   -------
<S>                                                  <C>          <C>       <C>    
Interest income                                      $   308      $   856   $ 1,148
Gain (Loss) on sale of marketable securities              --           --    (1,052)
Gain (Loss) on sale on non-marketable securities          (7)         (85)    6,657
Other                                                    (64)        (172)      (50)
                                                     -------      -------   -------
                                                     $   237      $   599   $ 6,703
                                                     =======      =======   =======
</TABLE>
                                                               
      Income (Loss) from equity investments consists of the following (dollars
in thousands):

                                     Three Months          Years Ended
                                    Ended March 31,        December 31,
                                        1997             1996        1995
                                       -------          -------     -------
HPS                                    $   964          $  (500)    $ 3,371
Novoeste                                  (927)          (3,066)         --
Staffing                                  (356)          (1,174)         --
Other                                      (35)              33         390
                                       -------          -------     -------
                                       $  (354)         $(4,707)    $ 3,761
                                       =======          =======     =======


                                      F-28

<PAGE>

<PAGE>

19. INCOME TAXES

      The components of the benefit (provision) for income taxes are as follows
(dollars in thousands):

                                 Three Months Ended  Years Ended December 31,
                                   March 31, 1997       1996         1995
                                 ------------------  -----------  -----------
                                                     
Current tax benefit (expense):                       
Federal                               $(8,780)        $ 4,063      $    --
State                                    (717)           (195)        (375)
Foreign                                    (6)            (63)         (15)
                                      -------         -------      -------
                                      $(9,503)        $ 3,805      $  (390)
                                      =======         =======      =======
Deferred tax benefit (expense):                       
Federal                               $  (516)        $(2,484)     $   681
State                                    (418)           (179)          (7)
                                      -------         -------      -------
                                      $  (934)        $(2,663)     $   674
                                      =======         =======      =======
                                                         
      A reconciliation of the Company's income tax benefit (provision) and the
amount computed by applying the statutory tax rate of 34% to loss before income
taxes is as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                           Three Months Ended
                                                March 31,      Years Ended December 31,
                                                  1997             1996       1995
                                                --------         --------   --------
<S>                                             <C>              <C>        <C>     
Tax benefit (provision) at statutory rates      $ (3,104)        $  1,444   $  5,394
State and local, net of Federal benefit             (742)            (231)      (257)
Minority interest                                    170             (463)     3,714
Reversal of prior valuation allowances                --               --        904
Losses generating no current benefit                (324)              --       (820)
Amortization and write-off of excess                            
   purchase costs                                 (6,349)            (485)    (8,703)
Benefit from book loss carryforward                   --              879         --
Other                                                (88)              (2)        52
                                                --------         --------   --------
Benefit (Provision) for income taxes            $(10,437)        $  1,142   $    284
                                                ========         ========   ========
</TABLE>


                                      F-29

<PAGE>

<PAGE>

      Significant components of the Company's net deferred income tax assets and
liabilities are as follows (dollars in thousands):

                                                                   December 31,
                                                                       1996
                                                                     --------
Accounts receivable allowances                                       $  1,201
Accruals                                                                2,799
Depreciation and amortization                                          (6,272)
Investments                                                            (3,325)
Deferred compensation and benefits                                      6,104
Loss on discontinued operations                                           264
Tax net operating loss carryforwards                                   20,148
Other                                                                   2,274
                                                                     --------
Subtotal                                                               23,193
Valuation allowance                                                   (20,813)
                                                                     --------
                                                                     $  2,380
                                                                     ========

      The deferred tax assets and liabilities include the following (dollars in
thousands):

                                                                    December 31,
                                                                       1996
                                                                     --------
Current deferred tax asset                                           $  4,153
Valuation allowance                                                    (2,180)
                                                                     --------

Net current deferred tax asset                                       $  1,973
                                                                     ========

Long-term deferred tax asset                                         $ 19,755
Valuation allowance                                                   (19,030)
                                                                     --------

Net long-term deferred tax asset                                     $    725
                                                                     ========

Long-term deferred tax liability                                     $ (1,860)
                                                                     ========

      Lincoln and Curtis recorded a valuation allowance equal to 100% of their
net deferred tax assets based upon their historical losses and significant net
operating loss carryforwards. Noel recorded a valuation allowance on certain of
its deferred tax assets because they are not projected to be realized through
future taxable income. The valuation allowance at December 31, 1996, includes
$10,365,000 related to temporary differences which existed on the dates of
acquisitions of certain of Noel's subsidiaries.

20. RETIREMENT PLANS

      The Company sponsors a number of defined contribution retirement plans.
Participation in these plans is available to substantially all employees. The
Company's contributions to these plans are based on a percentage of employee
contributions. The expense of these plans for the years ended December 31, 1996
and 1995 totaled $763,000, and $898,000, respectively.

      Carlyle and Curtis sponsor defined benefit pension plans. Carlyle's plan
covers substantially all of its employees and requires no contributions from
employees. Benefits are based on years of service and compensation levels within
these years. Carlyle's plan was frozen as of December 31, 1994, after which no
new employees were eligible to join the plan. Additionally, employees covered
under Carlyle's plan will not receive any additional accruals for service
rendered after December 31, 1994. Curtis' plan covers former manufacturing
employees who were members of UAW


                                      F-30

<PAGE>

<PAGE>

Local 70, based on years of service. In 1995, Curtis recorded a $480,000
curtailment loss as a result of shutting down its manufacturing operations. Both
plans fund pension costs as required by ERISA. The projected unit cost method is
used to determine both pension costs and funding requirements for the plans. The
net periodic pension costs included in the statement of operations for the years
ended December 31, 1996 and 1995 were a benefit of $109,000 and an expense of
$634,000, respectively.

      The actuarial present value of accumulated benefit obligations ("ABO") is
as follows (dollars in thousands):

                                                           December 31,
                                                   ---------------------------
                                                        1996           1996
                                                     Pension ABO  Pension Assets
                                                   Exceeds Assets   Exceed ABO
                                                   --------------   ----------
Vested benefit obligation                             $ 19,488       $  1,860
                                                      --------       --------
Accumulated benefit obligation                        $ 19,525       $  1,860
                                                      ========       ========
Projected benefit obligation                          $ 19,525       $  1,860
Plan assets at fair value                               19,877          2,188
                                                      --------       --------
Plan assets less projected benefit obligation              352            328
                                                        (1,854)            --
                                                      --------       --------
Unrecognized net gain                                             

Net pension asset (liability)                         $ (1,502)      $    328
                                                      ========       ========
                                                                  
Major assumptions at year end:
                                                                1996
                                                                ----
Discount rate                                                    7.7%
Rate of increase of compensation levels                          n/a
Expected long-term rate of return on assets                      9.4%

      At December 31, 1996, Curtis' plan assets were invested in a bank fixed
income fund, and Carlyle's plan assets consisted principally of common stock,
United States government and corporate obligations.

21. POSTRETIREMENT BENEFITS

      Carlyle provides certain health and life insurance benefits for eligible
retirees and their dependents. Curtis provides health care benefits for retired
members of UAW Local 70. Both plans are not funded and pay the costs of benefits
as incurred. The net periodic postretirement benefit costs included in the
statements of operations for the years ended December 31, 1996 and 1995 are not
material.

      Carlyle's predecessor adopted, effective January 1, 1993, Statement of
Financial Accounting Standards No. 106 and elected to amortize the accrual for
postretirement benefits over a 20 year period. As required by the purchase
method of accounting, a similar accrual was recorded when Carlyle was acquired
by Noel.


                                      F-31

<PAGE>

<PAGE>

      The estimated accumulated postretirement benefit obligation at December
31, 1996, at a weighted average discount rate of 7.7% is estimated as follows
(dollars in thousands):

                                                             December 31, 1996
                                                             -----------------
Retirees                                                                $5,861
Fully eligible active plan participants                                    299
Other active participants                                                  371
                                                                       -------
                                                                         6,531
Unrecognized net loss                                                     (133)
                                                                       -------
                                                                        $6,398
                                                                       =======

      The assumed health care cost trend rate used by Carlyle in measuring the
accumulated postretirement benefit obligation at December 31, 1996, was 10.0%
for 1996, gradually declining to 5.5% in 2005. For Curtis' measurement purposes,
a 7.5% annual rate of increase in the per capita cost of covered health care
claims was assumed for 1997 and the rate was assumed to decrease gradually to
5.5% by the year 2000 and remain at that level thereafter. A one percentage
point increase in the assumed health care cost trend rate would increase the
accumulated postretirement benefit obligation as of December 31, 1996, by
$190,000 and the sum of service costs and interest costs on an annual basis by
$14,000.

22. SUPPLEMENTAL CASH FLOWS INFORMATION

      Non-cash investing and financing activities are as follows (dollars in
thousands):

<TABLE>
<CAPTION>
                                                             Three Months
                                                            Ended March 31,  Years Ended December 31,
                                                                 1997              1996     1995 
                                                               -------           -------  -------
<S>                                                            <C>               <C>      <C>    
Increase in investment in HPS related to share issuances       $    74           $ 8,776  $    --
                                                               =======           =======  =======
Increase in investment in Staffing related to share issuances  $    --           $ 1,817  $    --
                                                               =======           =======  =======
Gain on payment of Brae Note with Staffing common stock        $    --           $    --  $ 6,598
                                                               =======           =======  =======
Increase in investment in HPS related to HPS' initial public                     
 offering                                                      $    --           $    --  $15,433
                                                               =======           =======  =======
                                                                                 
Interest paid                                                  $ 2,003           $ 7,883  $ 8,184
                                                               =======           =======  =======
                                                                                 
Income taxes paid                                              $    41           $   784  $ 1,473
                                                               =======           =======  =======
</TABLE>


                                      F-32

<PAGE>

<PAGE>

23. INDUSTRY SEGMENT INFORMATION

      The Company is classified into three business segments. Summarized
financial information by business segment for the periods of Noel's consolidated
control is as follows (dollars in thousands):

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                       Operating   Identifiable  Depreciation and    Capital
1997                       Sales     income (loss)    assets       amortization    expenditures
-----------------------------------------------------------------------------------------------
<S>                      <C>          <C>           <C>              <C>            <C>      
Fasteners & Security
Products Distribution    $  19,513    $     (73)          N/A        $     565      $     589
Snack Foods                  4,310           43           N/A              188             55
Industrial Threads &
Buttons                     14,650       (2,763)          N/A              489            143
Noel - Investments              --           --           N/A               --             --
Noel - Corporate                --       (1,891)          N/A               18             --
                         ---------     --------                      ---------      ---------
                         $  38,473     $ (4,684)                     $   1,260      $     787
                         =========     ========                      =========      =========
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                       Operating   Identifiable  Depreciation and    Capital
1996                       Sales     income (loss)    assets       amortization    expenditures
-----------------------------------------------------------------------------------------------
<S>                      <C>          <C>           <C>              <C>            <C>      
Fasteners & Security
Products Distribution    $  77,072    $   4,331     $  49,806        $   2,537      $   3,120
Snack Foods                 23,648        1,471        13,158              796            164
Industrial Threads &
Buttons                     88,605       11,131        85,160            3,462          1,003
Noel - Investments              --           --        68,026               --             --
Noel - Corporate                --       (7,739)       14,371               78             26
                         ---------    ---------     ---------        ---------      ---------
                         $ 189,325    $   9,194     $ 230,521        $6,873 (1)     $   4,313
                         =========    =========     =========        =========      =========
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                       Operating   Identifiable  Depreciation and    Capital
1995                       Sales     income (loss)    assets       amortization    expenditures
-----------------------------------------------------------------------------------------------
<S>                      <C>          <C>           <C>              <C>            <C>      
Fasteners & Security
Products Distribution    $  68,842    $   2,067     $  43,680        $   3,046      $     743
Snack Foods                 24,213       (1,118)       14,335              944            214
Industrial Threads &
Buttons                     88,654      (22,715)       98,066            3,646          3,820
Noel - Investments              --           --        34,520               --             --
Noel - Corporate                --       (7,685)       49,156               81             80
                         ---------    ---------     ---------        ---------      ---------
                         $ 181,709    $ (29,451)    $ 239,757        $   7,717(1)   $   4,857
                         =========    =========     =========        =========      =========
</TABLE>

(1)   Amounts include $398,000, $2,414,000 and $2,829,000 which were included in
      cost of sales for the period ended March 31, 1997 and the years ended
      December 31, 1996 and 1995, respectively.


                                      F-33

<PAGE>

<PAGE>

The snack foods segment had one customer that accounted for approximately 68%
and 49% of sales in 1997 and 1996, respectively.

The Company's revenue and assets attributable to operations outside of the
United States are not significant.

24. QUARTERLY FINANCIAL DATA
    (Unaudited, dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Quarters Ended                            March 31,  June 30,  September 30,  December 31,

1996                                                                          
------------------------------------------------------------------------------------------
<S>                                       <C>       <C>          <C>           <C>     
Revenue                                   $ 43,119  $   47,139   $ 50,266      $ 48,801

Operating Income                               824       1,862      3,372         3,136

Income (Loss) from continuing operations      (297)        717     (3,016)         (509)

Income from discontinued operations             42          --        290           116

Net income (loss)                             (255)        717     (2,726)         (393)

Basic earnings per share from:                                                
                                                                              
  Continuing operations                      (0.01)       0.03      (0.15)        (0.02)

  Discontinued operations                       --          --       0.02            --

  Net income (loss)                          (0.01)       0.03      (0.13)        (0.02)

Diluted earnings per share from:                                              
                                                                              
   Continuing operations                       N/A        0.03        N/A           N/A

   Discontinued operations                     N/A          --        N/A           N/A

   Net income (loss)                           N/A        0.03        N/A           N/A
</TABLE>

All earnings per share amounts have been restated to comply with Statement of
Financial Accounting Standards No. 128, "Earnings per Share".


                                      F-34

<PAGE>

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
and Stockholders of
HealthPlan Services Corporation

In our opinion, the consolidated financial statements of HealthPlan Services
Corporation and its subsidiaries (the "Company") (not presented separately
herein) present fairly, in all material respects, the financial position of
HealthPlan Services Corporation and its subsidiaries at December 31, 1996, and
the results of their operations and their cash flows for each of the two years
in the period ended December 31, 1996, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.


PRICE WATERHOUSE LLP

Price Waterhouse LLP
Tampa, Florida
March 14, 1997


                                      F-35


<PAGE>
 

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board
of Directors of Staffing Resources, Inc.:

               We have audited the accompanying consolidated balance sheet of
Staffing Resources, Inc. as of December 31, 1996, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated statements based on our audit.

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

               In our report dated March 31, 1997, we expressed a qualified
opinion on the 1996 consolidated financial statements because of a scope
limitation related to December 31, 1996 accounts receivable from one customer,
the uncollected balance of which was approximately $1,209,000 at March 28, 1997.
As described in Note 20, the Company has obtained previously unavailable
financial information on this customer as of December 31, 1996 and March 29,
1997, and based on this information has provided an additional $600,000
allowance for this accounts receivable as of December 31, 1996 and has restated
its 1996 consolidated financial statements to reflect this provision.
Accordingly, our present opinion on the 1996 consolidated financial statements,
as present herein is different from that expressed in our previous report.

               In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Staffing Resources, Inc. as of December 31, 1996 and the
consolidated results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.

               As discussed in Note 17 to the consolidated financial statements,
during the year ended December 31, 1996, the Company changed its method of
accounting for staff employees' vacation accruals and adjusted its previously
reported December 31, 1995 retained earnings for this change in accounting and
for understatements of its workers' compensation claim accrual and its accounts
payable.


Coopers & Lybrand L.L.P


Dallas, Texas
March 31, 1997, except for Note 20
 as to which the date is July 3, 1997


                                      F-36

<PAGE>
<PAGE>
                                                                     SCHEDULE II
                        Noel Group, Inc. and Subsidiaries
                       Valuation and Qualifying Accounts
                 For the Years Ended December 31, 1996 and 1995
                             (dollars in thousands)

<TABLE>
<CAPTION>
Column A                              Column B                  Column C                     Column D      Column E
                                                               Additions
                                                  ------------------------------------
                                                     (1)        (2)            (3)
                                                                           Acquisition
                                      Balance     Charged to  Charged to  Cost Allocated  Payments     Balance at
                                    Beginning of  Costs and     Other       to Assets       and          End of
Description                            Period     Expenses     Accounts     Purchased     Charges       Period
-----------                         ------------  ----------  -----------  -------------  -------      -----------
<S>                                 <C>           <C>         <C>         <C>             <C>           <C>
Year Ended December 31, 1996

  Allowance for doubtful accounts      $2,013       $  724     $   -        $    -         $907 (a)     $1,830

  Allowance for returns and discounts  $  854       $1,181     $   -        $    -         $147 (a)     $1,888

  Inventory reserve                                                                        $641 (a)
                                       $3,113       $  274       $135         $1,800       $974 (b)     $3,707



Year Ended December 31, 1995

  Allowance for doubtful accounts      $2,075       $  823       $433           $161     $1,479 (a)     $2,013

  Allowance for returns and discounts  $1,017       $  289     $   -        $    -         $452 (a)       $854

  Inventory reserve                    $2,247       $2,190       $399       $    -       $1,723 (a)     $3,113

</TABLE>




(a) Write-offs
(b) Dispositions
                                       S-1

<PAGE>
<PAGE>

                                INDEX OF EXHIBITS

Item No.          Item Title                                         Exhibit No.
--------          ----------                                         -----------

(2)               Plan of acquisition, reorganization, 
                  liquidation or succession:

                  (A)   Stock Purchase Agreement dated as of
                        December 18, 1996 by and among Noel
                        Group, Inc., Automatic Data
                        Processing, Inc. and HealthPlan
                        Services Corporation.                              (a)

                  (B)   Plan of Complete Liquidation and
                        Dissolution of Noel Group, Inc.                    (b)

(3)               Articles of Incorporation and By-Laws.

                  (A)   Certificate of Incorporation, as
                        amended.                                           (c)

                  (B)   Composite copy of the Certificate of
                        Incorporation, as amended.                         (d)

                  (C)   By-Laws, as amended and restated.                  (e)

(4)               Instruments defining the rights of security
                  holders, including indentures:

                  (A)   Excerpts from Certificate of
                        Incorporation, as amended.                         (c)

                  (B)   Excerpts from By-Laws, as amended
                        and restated.                                      (e)

(9)               Voting Trust Agreements:  None

(10)              Material Contracts:

                  (A)   Letter Agreement dated March 22,
                        1995 by and between Noel Group, Inc.
                        and Karen Brenner with respect to
                        Ms. Brenner serving as Chairman and
                        Acting Chief Executive Officer of
                        Lincoln Snacks Company.                            (e)

                  (B)   Letter Agreement dated March 1,
                        1996, as amended, by and between
                        Noel Group, Inc. and Karen Brenner
                        with respect to Ms. Brenner's
                        employment by Noel.                                (f)

                  (C)   Letter Agreements dated March 9,
                        1995 by and between Noel Group, Inc.
                        and William L. Bennett.                            (e)

                  (D)   Sublease Agreement dated January 1,
                        1995 by and between The Prospect
                        Group, Inc. and Noel Group, Inc.                   (f)

                  (E)   Life Insurance Agreement dated July
                        27, 1995 between Noel Group, Inc.
                        and Howard M. Stein as Trustee u/a
                        dated June 10, 1993 between Joseph
                        S. DiMartino, Grantor and Howard M.
                        Stein, Trustee.                                    (f)

<PAGE>

<PAGE>

Item No.          Item Title                                         Exhibit No.
--------          ----------                                         -----------

                  (F)   Assignment of Life Insurance Policy
                        as Collateral dated as of July 27,
                        1995 by Howard M. Stein as Trustee
                        u/a dated June 10, 1993 between
                        Joseph S. DiMartino, Grantor and
                        Howard M. Stein, Trustee, to Noel
                        Group, Inc.                                        (f)

                  (G)   Life Insurance Agreement dated as of
                        May 17, 1995 between Noel Group,
                        Inc. and Karen Brenner.                            (g)

                  (H)   Assignment of Life Insurance Policy
                        as Collateral dated as of May 17,
                        1995 by Karen Brenner to Noel Group,
                        Inc.                                               (g)

                  (I)   Tax Allocation Agreement dated as of
                        January 20, 1995 by and between Noel
                        Group, Inc. and Carlyle Industries,
                        Inc.                                               (f)

                  (J)   Tender and Option Agreement dated
                        November 13, 1995 by and among
                        Blount, Inc., S.O.C. Corporation,
                        Noel Group, Inc. and The Forschner
                        Group, Inc.                                        (h)

                  (K)   Asset Purchase Agreement dated as of
                        December 12, 1996 among Carlyle
                        Industries, Inc., certain of its
                        subsidiaries, Hicking Pentecost PLC
                        and its subsidiary HP
                        Belt-Acquisition Corporation.                      (i)

                  (L)   Agreement and Plan of Merger dated
                        November 6, 1997 among Paragon
                        Corporate Holdings, Inc., Curtis
                        Acquisition Corp. and Curtis
                        Industries, Inc.                                   (j)

(11)              Statement re computation of per share
                  earnings is not required because the
                  relevant computations can be clearly
                  determined from the material contained in
                  the financial statements included herein.

(12)              Statements re Computation of Ratios: Not
                  Applicable.

(13)              Annual Report to security holders: Not
                  Applicable.

(16)              Letter re Change in Certifying
                  Accountant: Not Applicable.

(18)              Letter re Change in Accounting
                  Principles: Not Applicable.

(21)              Subsidiaries of the registrant.                          (21)

(22)              Published Report re Matters Submitted to
                  Vote of Security Holders: Not Applicable.

(23)              Consents: None

(24)              Power of Attorney: Not Applicable.

(27)              Financial Data Schedule                                  (27)

<PAGE>

<PAGE>

Item No.          Item Title                                         Exhibit No.
--------          ----------                                         -----------

(99)              Additional Exhibits: None

-------

(a)   This exhibit was filed as an exhibit to the Company's Current Report on
      Form 8-K dated February 7, 1997 and is incorporated herein by reference.

(b)   This exhibit was filed as an exhibit to the Company's Proxy Statement for
      the Special Meeting of Shareholders held on March 19, 1997 and is
      incorporated herein by reference.

(c)   These exhibits were filed as exhibits to the Company's Registration
      Statement on Form S-1, Registration No. 33-44178, effective January 29,
      1992, and are incorporated herein by reference.

(d)   These exhibits were filed as exhibits to the Company's Annual Report on
      Form 10-K for the fiscal year ended December 31, 1992, and are
      incorporated herein by reference.

(e)   These exhibits were filed as exhibits to the Company's Annual Report on
      Form 10-K for the fiscal year ended December 31, 1994, and are
      incorporated herein by reference.

(f)   These exhibits were filed as exhibits to the Company's Annual Report on
      Form 10-K dated December 31, 1995, and are incorporated herein by
      reference.

(g)   These exhibits were filed as exhibits to the Company's Quarterly Report on
      Form 10-Q for the quarter ended September 30, 1995 are incorporated herein
      by reference.

(h)   This exhibit was filed as an exhibit to the Company's Current Report on
      Form 8-K dated December 29, 1995, and is incorporated herein by reference.

(i)   This exhibit was filed as an exhibit to the Proxy Statement for the
      Special Meeting of Stockholders of Carlyle Industries, Inc. (f/k/a Belding
      Heminway Company, Inc.) held on March 26, 1997, and is incorporated herein
      by reference.

(j)   This exhibit was filed as an exhibit to Company's Current Report on Form
      8-K dated December 1, 1997 and is incorporated herein by reference.



                             STATEMENT OF DIFFERENCES

The registered trademark symbol shall be expressed as......................'r'




<PAGE>