<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   Form 10-K

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

                For the fiscal year ended October 31, 1996

                                    OR

            / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from       to

                      Commission file number 0-17430

                         GLOBAL ENVIRONMENTAL CORP.

    (Exact name of registrant as specified in its charter)

         New York                           13-3431486
(State of other jurisdiction of           (IRS Employer
incorporation or organization)          Identification No.)

17500 York Road                               21740
Hagerstown, Maryland                        (Zip Code)
(Address of principal executive offices)

                             (301) 582-2000
         (Registrant's telephone number, including area code)

    Securities registered pursuant to Section 12(b) of the Act: None

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

                       Common Stock ($0.01 par value)
                             (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.

                         YES X                      NO
                            ---                       ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of the 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. / /


<PAGE>

As of October 31, 1996, the aggregate market value of the Company's common 
stock held by non-affiliates of the registrant, based on the average bid and 
ask price, was approximately $918,000.

As of December 31, 1996, the registrant had 13,203,024 shares of common stock 
outstanding.






                                         2

<PAGE>


                                      PART I

ITEM 1. BUSINESS.

History and Development of Business:

Global Environmental Corp. ("Global"), formerly named Affiliated National, 
Inc., was incorporated in New York in 1987. As used herein, the term the 
"Company" refers to Global Environmental Corp., its wholly owned subsidiary 
Danzer Industries Inc. ("Danzer").

In January, 1988, Global completed an initial underwritten public offering of 
400,000 units for an offering price of $1.00 per unit. Each unit consisted of 
one share of common stock, three Class A Warrants and three Class B Warrants.

In August, 1988, Global acquired all of the outstanding capital stock of 
Global Holdings. In June, 1988, Global Holdings purchased all of Danzer's 
outstanding capital stock from Danzer's sole shareholder. Danzer is located 
in Hagerstown, MD and produces and installs a wide range of custom designed 
and engineered fabricated metal products including those used in pollution 
control applications.

In November, 1988, Global Holdings' newly incorporated subsidiary, Texcon, 
purchased certain assets from a manufacturing concern (Texcon Inc., a South 
Carolina corporation), located in Greenville, SC. The assets acquired 
consisted of contracts to produce engineering and design services for 
pollution control systems as well as assets used in air monitoring and 
testing.

In December, 1988, Global Holdings' newly incorporated subsidiary, Rage, 
acquired substantially all of the assets of Rage Engineering, Inc., located 
in Plumsteadville, PA. Rage designs and assembles pneumatic handling systems 
used in the processing of bulk materials in manufacturing and pollution 
control processes.

In August, 1993, the Company acquired the assets of Morrison Industries L.P., 
a manufacturer of specialized utility truck bodies. The Company began 
production of the bodies in December 1993.

In October, 1994, the Company's Texcon subsidiary was closed. All Texcon 
products and systems are marketed under Rage and/or Global Environmental Corp.

In June, 1996, the Company sold Rage Inc to William V. Rice in exchange for 
517,000 shares of Global and cancellation of the employment agreement of 
William Rice

Substantial business developments:

 - The Company suffered a substantial loss during fiscal 1994 due, in part, 
   to the continued recession in the Company's lines of business, production 
   inefficiencies associated with the start-up of the new Morrison product 
   line for manufacturing utility truck bodies and increased competitive 
   pressure on gross profit margins.

 - As a result of the expiration of the lease for the Plumsteadville location 
   on December 31, 1993, the Company relocated to its Bedminster facility 
   during December 1993. The expiration of this lease coincides with the 
   expiration of the employment contract with the former shareholder of Rage 
   Inc. and the expiration of amortization of the favorable lease asset and 
   covenant not to compete.

 - During the fourth quarter of fiscal 1993 and first quarter of fiscal 1994, 
   the Company acquired certain equipment intended to improve manufacturing 
   efficiencies. This equipment consisted of a CNC press brake and a CNC 
   punch plasma unit. The total cost of the equipment was approximately 
   $613,000.

                                         3

<PAGE>

 - During the first quarter of fiscal 1994, the Company entered into a joint 
   venture agreement with Cadema Corporation. During the term of the joint 
   venture terminating December 31, 1998 (unless otherwise extended), the 
   joint venture has the right to contract for the design and installation of 
   air pollution control equipment in the Company's name in all areas of the 
   world outside the United States and its territories. 

 - September, 1994, Global completed a private offering of 7,550 shares of 10% 
   Cumulative Convertible Senior Preferred Stock at $100 per share. Each 10% 
   preferred share is currently convertible into 200 shares of common stock.

 - On December 31, 1994, Renaissance Capital Partners, Ltd. exchanged 
   $1,600,000 principal amount of the Company's 12.5% Convertible Debentures 
   for 16,000 shares of the Company's Series B Cumulative Convertible Senior 
   Preferred Stock at $100 per share. The Company also issued Renaissance a 
   10% Term Note in the principal amount of $211,635 due December 31, 1997 
   representing interest accrued on the Convertible Debentures through 
   September 30, 1994. Each Series B preferred share is currently convertible 
   into 200 shares of common stock.

 - In August 1996, the Company issued 1,200,000 shares through a private 
   placement for $300,000. 1,000,000 shares were issued to R. W. Snyder and 
   200,000 shares were issued to Renaissance Capital Group, Inc.

 - On October 2, 1996, the Company made an offer to the 10% Cumulative 
   Convertible and Series B preferred shareholders to convert their shares 
   and accrued dividends to common stock at a conversion rate of $0.25 per 
   share. The offer was accepted and the conversion was completed in the 
   first calendar quarter of 1997.

 - In March 1997, the Company received $150,000 in the form of convertible 
   debt from Renaissance Capital Group, Inc.

These events are more fully discussed in Management's Discussion and Analysis.

Global's business plan is to develop the businesses acquired, integrate the 
services and capabilities of each business and acquire other complementary 
businesses within the truck body and metal fabrication industry.

Description of the Business:

Global is a holding company and through its operating subsidiary is engaged 
in the manufacturing of fabricated metal products which include truck bodies 
and air movement products.

Manufacturing Capabilities

The Company's manufacturing activities located at Danzer's facility in 
Hagerstown, MD, produce truck bodies and a wide range of custom engineered 
fabricated metal products including, but not limited to environmental 
equipment, ductwork, louvers, penthouses and general sheet metal fabrication 
of materials up to 5/8 of an inch thick. The Company's equipment enables the 
Company to produce certain metal products up to 1-1/2 inches thick. Materials 
used include aluminum, stainless steel, and mild steel in both sheet and 
plate. Danzer offers heliarc and MIG welding, brazing, forming, assembly, and 
dip-coat cleaning and painting services to its customers. Danzer also 
maintains in-house design and engineering capabilities.

                                         4

<PAGE>

Danzer's Airline Products division manufactures louvers, air control dampers 
and penthouses constructed from galvanized steel, aluminum, copper, brass, 
bronze, and stainless steel. These products provide equipment ventilation, 
air control and prevent water penetration in architectural applications, such 
as high rise office buildings and commercial buildings.

Government Regulation:

The Company is subject to regulation by federal, state, and local agencies, 
such as environmental, fire hazard control, and working condition, and other 
similar regulators that have jurisdiction to take actions which could have a 
material adverse affect upon the Company's ability to do business. The 
businesses of the Company do not subject it to any special regulatory 
authority.

Competition:

There are a significant number of companies engaged in metal fabrication in 
the United States. While many of these companies are relatively small and do 
not possess the Company's technical capacity, a number of its competitors are 
larger and possess equal or greater technical and financial resources. The 
Company competes with others in its industry through price and service, with 
price being the most important factor.

Marketing:

The Company's manufacturing operation, at its Danzer subsidiary, generally 
markets to customers within the Eastern United States. The Company utilizes 
an internal sales force in conjunction with independent representatives. The 
Danzer's Morrison division markets its product through representatives which 
have exclusive territories and are paid commissions on all sales from a 
specific territory based upon payments made by the customer. Commission is 
calculated based upon sales effort. Danzer's Airline Products division 
markets its products principally through independent sales representatives 
who are assigned non-exclusive sales areas.

Principal Customers:

During the fiscal year ended October 31, 1996, the Company had two customers 
which each represented 10% or more of total net sales: Mobile Tool 
International, a truck body supplier, for which the Company supplied truck 
bodies (29%) and Schindler, an elevator manufacturer, for which the Company 
supplied component parts (10%).

Manufacturing and Facilities:

The Company purchases its raw materials from numerous suppliers and has not
had any difficulty in obtaining components or raw materials. Danzer purchases
domestically produced and imported sheet metal from a number of distributors and
is not dependent upon any particular source of supply. The Company bears the
risks of its products and systems not conforming to customer specifications, but
in most cases, defects and deficiencies are correctable. Management believes
that the Company's existing manufacturing and office facilities are adequate to
meet its present needs and anticipated growth. Consequently, the Company does
not plan any significant capital expansion of its property, plant and equipment
during fiscal 1998 except for usual upgrades and maintenance.

Employees:

As of October 31, 1996, Danzer has approximately 90 employees. Of these
employees, 22 are involved in sales, administration and engineering, and 68 are
in manufacturing, installation and servicing of Danzer's

                                         5

<PAGE>

products. The 68 employees are represented by a labor union. Danzer believes 
its employee relations are satisfactory.

Patents and Proprietary Technology:

The Company does not rely on any patents, registered trademarks, or special 
licenses to give it a competitive advantage. The Company's position in its 
industry depends mainly on its ability to offer competitive pricing. The 
Company did not incur, during any of its last three fiscal years, and does 
not contemplate incurring, any material research and development expenses.

Insurance:

The Company carries a broad range of insurance coverage which management 
considers sufficient to provide acceptable levels of financial resources to 
protect the employees, assets, and operations of the Company that may be 
negatively affected in the event of a loss. The Company does not currently 
maintain, and in the future may not choose to or may not be able to obtain, 
coverage for liabilities arising from environmental damage or professional 
design deficiencies or other circumstances which could arise as a result of 
the type of business in which the Company engages. To date, the Company has 
not had difficulty in obtaining insurance. However, if the Company should be 
unable to obtain adequate insurance or should decide to operate without 
insurance, a partially or completely uninsured claim against the Company, if 
successful and of sufficient magnitude, could have a material adverse affect 
upon the Company's business or its financial condition.

Seasonality:

The Company's business has not generally been seasonal in the past. However, 
the Company has historically experienced a reduced flow of orders during late 
November and December. No seasonal modification of the Company's production 
schedule or staffing is required under normal business circumstances.

Warranties:

In connection with most contracts for manufacture the Company warrants its 
product to be free from defects in material and workmanship and performance 
under normal use and service for a period of twelve months after shipment. 
The obligation of the Company is generally limited to the repair or 
replacement of the defective product. Warranty related expenses are 
recognized as incurred.

Backlog:

At October 31, 1996, the Company's backlog was approximately $2,300,000, 
which is all expected to be filled within the current 1997 fiscal year

Export Sales:

Sales of goods exported to foreign countries during the fiscal years ended 
October 31, 1996 and 1995 were approximately $15,000 and 50,000, respectively.

ITEM 2. PROPERTIES.

Danzer owns its principal manufacturing facilities which are located in an 
80,000 square foot plant on an eleven acre site in Hagerstown, Maryland, near 
the intersection of two major interstate highways. Approximately 75,000 
square feet are used in manufacturing and 5,000 square feet are used as 
office space. Fremont Financial Corporation has a priority security interest 
on such property.

See Note 3 of the Financial Statements concerning the Plumsteadville Property.

                                         6

<PAGE>

The Company believes that all of its properties, plants and equipment are 
well maintained and adequate for its requirements. The Company also believes 
that all of its properties are adequately covered by insurance.

ITEM 3. LEGAL PROCEEDINGS.

In October, 1994, Jeffrey Richardson, an individual plaintiff, filed a 
complaint against 15 defendants, including Rage Inc., a former Global 
subsidiary, in the superior court of the State of New Jersey, County of 
Burlington, Docket No. BUR-L-03543-93. The complaint alleges that the Company 
supplied a product which caused harm to plaintiff and claimed damages in an 
unspecified amount arising from alleged product liability. Although damages 
claimed by the plaintiff significantly exceed the Company's insurance 
coverage, the Company and outside counsel believe that the case will be 
settled within the Company's insurance policy limits.

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

Not applicable.

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
        STOCKHOLDER MATTERS.

Global's common stock was listed on the National Association of Security 
Dealers Automated Quotations System (NASDAQ) under the symbol "GLEN" until 
September 29, 1993 at which time the Company was "delisted". Global's common 
stock is currently traded on the Over-the-Counter Electronic Bulletin Board. 
The following table sets forth the high and low bid quotations for the common 
stock for the fiscal quarters indicated.

<TABLE>
<CAPTION>
Fiscal 1995
                                                                                 High        Low
                                                                               ---------  ---------
<S>                                                                            <C>        <C>

First Quarter................................................................  $     3/4  $     1/4
Second Quarter...............................................................  $    9/16  $     1/4
Third Quarter................................................................  $    9/16  $    5/16
Fourth Quarter...............................................................  $    9/16  $    9/32


Fiscal 1996
                                                                                High        Low
                                                                              ---------  ---------
First Quarter...............................................................  $     1/2  $    6/25
Second Quarter..............................................................  $    5/16  $    7/32
Third Quarter...............................................................  $    5/16  $    5/32
Fourth Quarter..............................................................  $   11/32  $     1/8
</TABLE>

The above quotations reflect inter-dealer prices, and may not include retail 
mark-up, mark down or commissions and may not necessarily represent actual 
transactions.

At April 1, 1997, there were approximately 803 holders of record of Global's 
common stock. Most of the shares of the common stock are held in street name 
for a larger number of beneficial owners.

                                         7

<PAGE>

To date Global has not paid a cash dividend on its common stock. The payment 
and amount of any future dividends is currently restricted by the terms of 
the Company's 10% Cumulative Convertible Senior Preferred Stock and the 
Series B Cumulative Convertible Senior Preferred Stock, which require payment 
of a 10% dividend on such preferred stock and which restrict the Company's 
ability to pay any dividends on the Company's Common Stock until payment of 
all accrued dividends on the preferred stock. In addition, payment of after 
dividends is restricted by the company's lenders and will unnecessarily 
depend upon conditions then existing, including the Company's earnings, 
financial condition, working capital requirements, and other factors. 
Effective for the year ended October 31, 1996 all Series B and 3,000 10% 
Cumulative Convertible Senior Preferred Stock was converted to common stock 
at $0.25. The balance of the 10% Cumulative Convertible Senior Preferred and 
accumulated dividends were converted by the first calendar quarter of 1997.

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth certain selected consolidated financial 
information concerning the Company. This information is not covered by the 
independent auditor's report. For further information, see the accompanying 
Consolidated Financial Statements of Global Environmental Corp. and 
subsidiary for the years ended October 31, 1996, 1995, and 1994, and the 
information set forth in item 7, "Management's Discussion and Analysis of 
Financial Condition and Results of Operations", and in Item 8, "Financial 
Statements and Supplementary data" below.

Selected Consolidated Financial Information

The following information is a summary of the consolidated financial 
statements of the Company included elsewhere and should be read in connection 
with such consolidated financial statements. (Amounts in thousands, except 
per share data)

<TABLE>
<CAPTION>
Operating Data:                                                                         Year Ended October 31,
                                                                               1996       1995       1994       1993
                                                                             ---------  ---------  ---------  ---------
<S>                                                                          <C>        <C>        <C>        <C>
Net sales..................................................................  $   8,154  $   7,526  $   6,648  $   6,233
Income (loss) from operations..............................................       (420)      (275)    (1,001)      (665)
Loss from continuing operations............................................       (502)      (543)    (1,215)      (975)
Loss from discontinued operations..........................................       (210)       154        236       (335)
Loss from sale of Rage Inc.................................................       (215)
Net Loss...................................................................       (928)      (389)      (979)    (1,310)
</TABLE>

                                         8

<PAGE>

<TABLE>
<S>                                                                          <C>        <C>        <C>        <C>
Net loss per share and fully-diluted net loss per share attributable to
  common shareholders (1);

Continuing Operations......................................................      (0.32)     (0.32)     (0.52)     (0.42)
Discontinued Operations....................................................      (0.09)      0.06       0.10      (0.14)
Loss of Disposal...........................................................      (0.09)
Total......................................................................      (0.50)     (0.26)     (0.42)     (0.56)

Weighted average number of shares outstanding (1)..........................      2,340      2,370      2,361      2,333
</TABLE>

Balance Sheet Data: As of October 31,

<TABLE>
                                                                   1996        1995        1994        1993
                                                                ----------  ----------  ----------  ----------
<S>                                                             <C>         <C>         <C>         <C>
Working capital (deficiency)..................................    (401,436)    360,594    (541,111)     94,000
Total assets..................................................   4,306,496   3,891,158   4,777,233   3,826,000
Long-term debt................................................   1,344,182   1,604,567   2,649,783   1,910,000
Stockholders' equity (deficiency).............................     207,056     560,487    (353,062)    (40,000)
</TABLE>

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

(1) The 10% Cumulative Convertible Senior Preferred Stock and assumed 
    conversion of stock options and warrants have not been considered in the 
    calculation of earnings per share, the effect of which would be 
    anti-dilutive.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        RESULTS OF OPERATIONS

Fiscal 1996 Compared to Fiscal 1995

Sales volume increased by $627,932 from its fiscal 1995 level due to 
increased sales of both truck bodies and air movement product lines. The 
Company believes that both markets are firm or expect expansion in 1997.

The Company's gross profit margin increased from 11.9% to 14.2% during fiscal 
1996. The was due to the decrease in inefficiencies of the Morrison product 
line and an increase in manufacturing operations which decreased the effect 
of fixed manufacturing costs on gross profit.

Consolidated backlog at October 31, 1996 was approximately $2,300,000 versus 
approximately $2,000,000 at October 31, 1995.

                                         9

<PAGE>

The selling, general and administrative costs increased from the fiscal 1995 
level by approximately $407,232 as a result of higher sales and marketing 
costs. Selling, general and administrative costs also increased as a 
percentage of net sales from 15.6% to 19.4%.

The Company's net loss before discontinued operations during fiscal 1996 was 
$502,294, a decrease of $40,595 over the fiscal 1995 loss. The decrease in 
loss was primarily due to higher selling, general and administrative costs 
offset by increases in production efficiencies associated with manufacturing 
operations and an increase of net sales.

Fiscal 1995 Compared to Fiscal 1994

Sales volume increased by $877,280 from its fiscal 1994 level due an increase 
in activity in the air movement product lines.

There were several major factors that caused a decline in the Company's gross 
profit margins in fiscal 1994 to 2.2%. In addition to the continued increased 
competition from other providers of similar products and services and the 
continued recession in the Company's lines of business, the Company 
experienced production inefficiencies attributable to the learning process 
associated with the start-up of the Company's new Morrison product line, 
which manufactures utility truck bodies. In fiscal 1995 gross profit margin 
increase to 11.9% due to stronger markets and increases in production 
efficiencies.

Consolidated backlog at October 31, 1995 was approximately $2,000,000 versus 
approximately $1,500,000 at October 31, 1994.

Miscellaneous income for the year ended 1996 includes the sale of securities, 
the value of which was insignificant in prior years.

Interest expense decreased during fiscal 1995 primarily due to the conversion 
of convertible debentures to convertible preferred shares.

The Company's net loss before discontinued operations during fiscal 1995 was 
$542,889, a decrease of $672,692 over the fiscal 1994 loss. The 1994 loss was 
primarily due to certain production inefficiencies associated with the 
start-up of the Morrison product line.

During the first quarter of fiscal 1994, the Company entered into a joint 
venture agreement with Cadema Corporation. The joint venture has been 
capitalized by Cadema with $350,000 in cash and by Global with $1,000. During 
the term of the joint venture terminating December 31, 1998, the joint 
venture has the exclusive right (unless otherwise extended) to contract for 
the design and installation of air pollution control equipment in the 
Company's name in all areas of the world outside the United States and its 
territories. The business of the joint venture is managed by the Company and 
income or loss from the joint venture will be allocated 51% to Cadema and 49% 
to Global. As a result, income or loss reported by the joint venture is 
recorded on Global's books as equity income from a joint venture; net sales 
revenue for the joint venture is not consolidated on Global's books. The 
agreement allows Global to acquire Cadema's interest in the joint venture for 
875,000 shares of Global common stock or $350,000 in cash or an amount equal 
to Cadema's capital account, whichever is greater, subject to certain 
antidilution provisions. The agreement also allows for quarterly 
distributions of income and capital to the partners.

Liquidity and Capital Resources

Cash at October 31, 1996 decreased by $285,971 from the level at October 31, 
1995. This decrease was the result of the increase in accounts receivable, a 
decrease in payment clearing time and pressure from trade account payable 
vendors.

Accounts receivable increased approximately $567,942 from their level at 
October 31, 1995 due to an increased sales volume and an overall slowness in 
collections.

                                         10

<PAGE>

Inventories remained stable over their October 31, 1995 level despite a 8% 
increase in sales due to the reduction of the production cycle which in 
effect decreased work in process.

The Company had working capital of $360,594 at October 31, 1995. Working 
capital at October 31, 1996 was decreased to ($401,436) due to 
reclassification of the joint venture note payable ($345,000) from long term 
to current. The Fremont revolving credit facility was renegotiated increasing 
long term debt and reducing current liabilities in 1995.

It is anticipated that additional working capital may be required in order to 
efficiently execute the Company's work in progress and backlog. The Company's 
weakened financial condition has, in turn, led to tighter credit terms with 
certain vendors and has therefore further strained the Company's working 
capital.

The Company's Danzer subsidiary currently has a credit facility with Fremont 
Financial Corporation comprised of a revolving credit facility and an 
equipment term loan. The term loan is for up to $350,000 and the revolving 
credit facility is for up to $1,150,000 at an interest rate of prime plus 
4.5% maturing on January 31, 1998 with an extension of three years at the 
option of the lender. The loans are collateralized by real estate, Danzer's 
accounts receivable, inventory and equipment. The revolving loan balance 
under the Fremont facility at October 31, 1996 ($942,165) was incurred in 
connection with the refinancing of the Danzer mortgage and is based upon 
eligible accounts receivable and inventory of Danzer as defined. The 
equipment term loan had a balance of $246,500 at October 31, 1996. In 
addition, the Company's Danzer subsidiary is limited to making distributions 
of no more than 75% of its net cash flow (as defined) to the Company's 
parent, providing that Danzer maintains a minimum net worth, which net worth 
was not maintained at October 31, 1996.

The Company was in default on the January 1, April 1, July 1, and October 1, 
1995 interest payments due Renaissance. The Company received a waiver of 
default, including a waiver of remedies due to payment default, from 
Renaissance through November 1, 1995. On December 31, 1994 the Convertible 
Debentures were exchanged for preferred stock, the $211,635 of accrued 
interest thereon was converted to a three-year 10% Term Note and the Company 
paid Renaissance $50,000 representing interest on the Convertible Debentures 
from October 1, 1994 through December 31, 1994.

The 10% Cumulative Convertible Preferred Stock and the Series B Stock require 
the Company to comply with certain affirmative and negative covenants 
including, but not limited to, the timely filing of financial statements. In 
addition, it limits the Company's ability to issue new indebtedness, issue 
other classes of preferred stock, pay dividends on the Company's common 
stock, purchase equity securities, increase executive compensation, enter 
into liens and acquire new businesses, among other items. The Company is also 
subject to registration requirements under certain circumstances. As of 
October 31, 1995, the Company was in violation of certain of the above 
covenants. If certain of the violations remain uncured for twelve consecutive 
months, the holders of the Series B Preferred Stock become entitled to vote 
as a separate class on certain significant matters. As of October 31, 1996 
all Series B and 3,000 shares of the 10% Cumulative Convertible Preferred 
Stock and accumulated dividends were converted to common stock. The balance 
of the 10% Cumulative Convertible Preferred Stock and accumulated dividends 
were converted to common stock during the first calendar quarter of 1997.

As of October 31, 1995, the Company was in default under the Term Note due to 
Renaissance. The lender has waived its right to demand payment of the 
principal amount of the Term Note of $211,635 until December 31, 1996. (The 
original due date was December 31, 1997.) The lender did not waive any 
interest payments. At October 31, 1996 this note and accrued interest was 
converted to common stock.

In early February 1996, the Company's revolving loan payable to Fremont 
Financial Corporation was increased by $200,000. The increase enables the 
Company to borrow $200,000 in excess of their allowed borrowings under the 
revolving loan agreement and provides additional working capital for overall 

                                         11

<PAGE>

business activity. During 1996, the over advance was transferred to the term 
note portion of the financing facility.

In light of the Company's backlog at October 31, 1996, its projected cash 
flow from operations, the market for the Company's products, and the amount 
of short-term debt due in fiscal 1996 it is anticipated that the Company may 
need increased sales, an increase in its profit margin and/or an infusion of 
capital in order to sustain its operations. The company's ability to meet 
certain interest and principal payments, as well as its working capital needs 
to execute its backlog and generate sales volume during fiscal 1997, will be 
dependent upon the success of the company's efforts to increase sales volume, 
as well as the profitability of new business.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See "Index to Consolidated Financial Statements on page F- below.

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

Not Applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The following table sets forth information with respect to all of the 
incumbent directors of the Company.

<TABLE>
<CAPTION>
                                                               Position with                      Director
Name                                                 Age          Company                          Since
-----                                                ---      ---------------                    ---------
<S>                                                  <C>      <C>                                 <C>

Rudolph W. Schuster............................       65   President, Chief Executive              1996
                                                               Officer, Treasurer and Director 
Russell Cleveland..............................       58   Director
William L. Pryor, III..........................       63   Director
</TABLE>

(1) Rudolph W. Schuster has been a director, the President and Chief 
    Executive Officer of the Company since September 1996. From 1989 to 1996 
    Mr. Schuster served as Operations Manager of Snyder General/AAF McQuay 
    Dallas, Texas and from 1974 to 1989 Mr. Schuster served as Vice President 
    of Fischer & Porter Company located in Pennsylvania. 

(2) Russell Cleveland, a chartered financial analyst, became director of the 
    Company on April 26, 1991. Mr. Cleveland has for the past five years been 
    a director, officer and shareholder of Renaissance Capital Group, Inc., 
    which is the managing general partner of Renaissance Capital Partner, 
    Ltd., a business development company. Mr. Cleveland is a director of 
    Greiner Engineering, an engineering company, AFN, Inc., an information 
    processing and data base service, Unico, Inc., a direct mail advertising 
    company, International Movie Group, Inc., and independent foreign 
    distributor of American films and Biopharmaceutics, Inc., a manufacturer 
    of over-the-counter generic and prescription drugs, Mr. Cleveland is 
    Renaissance's designee to the Board of Directors. See "Item 13- Certain 
    Relationships and Related Transactions" herein. 

(3) William L. Pryor, III is the Chairman of Prism Group, Inc. a diskette 
    duplication manufacturing company at 441 Lexington Avenue, Suite 502, New 
    York, NY. Mr. Pryor was the Managing Director of

                                         12

<PAGE>

    Warren Management Chief Executive Officer of Manufacturing Solutions, 
    Inc. (formerly Applicon Corporation), a manufacturer of computer 
    workstations and other electronic and computer peripheral devices. Mr. 
    Pryor is presently a member of the Board of trustees of Kent School, a 
    member of the Board of National Defense University, and a Trustee of IIE 
    (Institute of International Education). Mr. Pryor currently serves as a 
    director of World View, a multi-media CD ROM publisher, MacSimmum, a 
    distributor of Apple and MacIntosh add-on peripherals and of Prism.

Executive Officers

The Company's executive officers are appointed by the Board of Directors and 
hold office at the pleasure of the Board until successors are appointed and 
have qualified.

Compliance with Section 16 (a) of the Securities Exchange Act of 1934 Section 
16 (a) of the Securities Exchange Act of 1934 requires the Company's 
directors, executive officers, and persons who own more than ten percent of 
the Company's Common Stock ("10% Shareholders") to file reports of Ownership 
and reports of changes in ownership of the Company's Common Stock with the 
Securities Exchange Commission ("SEC"). Officers, Directors and Shareholders 
are required by SEC regulation to furnish the Company with copies of all 
forms they file under Section 16 (a). Based solely on its review of the 
copies of such forms received by it with respect to its fiscal year ended 
October 31, 1996 and written representations from certain reporting persons 
that no other reports were required to those persons, the Company believes 
that all Section 16 (a) filing requirements applicable to its officers, 
directors and 10% Shareholders were complied.

ITEM 11. EXECUTIVE COMPENSATION

Summary and Compensation Table

The following table sets forth certain information concerning the 
compensation paid or accrued by the Company for services rendered during the 
Company's fiscal year ended October 31, 1995 by the named officer.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                          Annual Compensation
                                                     ---------------------------------------------------------------

           Name and Principal                              Salary           Common      Other Annual     All Other
                Position                    Year            ($)          Stock Options  Compensation   Compensation
                  (a)                        (b)            (c)               (d)            (e)            (f)
----------------------------------------  ---------  ------------------  -------------  -------------  -------------
<S>                                       <C>        <C>                 <C>            <C>            <C>
William V. Rice,........................       1993           $  60,652             0    $  7,547 (1)   $  8,114 (2)
  Former President                             1994           $  96,250             0    $  7,547 (1)   $  8,543 (3)
                                               1995           $ 140,708        200,000   $  7,547 (1)   $  8,895 (4)
                                               1996           $  21,154             0    $  3,773 (1)   $  4,031 (5)
Lori Beer ..............................       1996           $  60,000             0              0              0
  Former President
Rudolph W. Schuster 
  President and Chief Executive Officer.       1996           $  14,712             0    $         0    $         0
</TABLE>

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

(1) Represents lease payments and automobile insurance paid by the Company 
    for a car provided for the use of Mr. Rice. 

(2) Of the total $8,114 paid to Mr. Rice "in all other compensations," the 
    Company paid $7,181. (amount based on two-thirds of the total cost of the 
    policy) for term life insurance on Mr. Rice in the amount of 1.5 million. 
    The policy provides that the Company will receive one-third of any 
    proceeds from the policy and

                                         13

<PAGE>

    Mr. Rice's beneficiary will receive two-thirds of any such proceeds. 
    An additional $933. was paid by the Company to the account of Mr. Rice as 
    a matching contribution under the Company's Tax Savings Investment Plan, 
    described below. 

(3) Of the total $8,543 paid to Mr. Rice "in all other compensations," the 
    Company paid $7,181. (amount based on two-thirds of the total cost of the 
    policy) for term life insurance on Mr. Rice in the amount of 1.5 million. 
    The policy provides that the Company will receive one-third of any 
    proceeds from the policy and Mr. Rice's beneficiary will receive 
    two-thirds of any such proceeds. An additional $1,362. was paid by the 
    Company to the account of Mr. Rice as a matching contribution under the 
    Company's Tax Savings Investment Plan, described below. 

(4) Of the total $8,895 paid to Mr. Rice "in all other compensations," the 
    Company paid $7,181. (amount based on two-thirds of the total cost of the 
    policy) for term life insurance on Mr. Rice in the amount of 1.5 million. 
    The policy provides that the Company will receive one-third of any 
    proceeds from the policy and Mr. Rice's beneficiary will receive 
    two-thirds of any such proceeds. An additional $1,714. was paid by the 
    Company to the account of Mr. Rice as a matching contribution under the 
    Company's Tax Savings Investment Plan, described below. 

(5) Of the total $4,031 paid to Mr. Rice "in all other compensations," the 
    Company paid $3,250. (amount based on two-thirds of the total cost of the 
    policy) for term life insurance on Mr. Rice in the amount of 1.5 million. 
    The policy provides that the Company will receive one-third of any 
    proceeds from the policy and Mr. Rice's beneficiary will receive 
    two-thirds of any such proceeds. An additional $258. was paid by the 
    Company to the account of Mr. Rice as a matching contribution under the 
    Company's Tax Savings Investment Plan, described below

The Company maintains a Tax Savings Investment Plan (the "Investment Plan") 
which qualifies as a cash deferred salary arrangement under Section 401(K) of 
the Internal Revenue Code. Employees are eligible to participate in the 
Investment Plan if they have been employed for 3 months, and are not members 
of a collective bargaining unit.

Under the Investment Plan, participants may defer up to 15% of the pre-tax 
salary. The Company will match 50% of the participant's deferral up to 2% of 
salary and 25% of the next 4% of salary. The Company's matching will be 
invested in the money market fund. The participant's pre-tax salary deferrals 
will be invested, at the participant's direction, in an Index Fund, Bond 
Fund, Money Market Fund, or in combination of these funds.

Participant's are vested in their salary deferrals and all earnings on those 
deferrals. However, the Company's matching contribution and earnings thereon 
become vested only upon the third year of vesting services with the Company, 
with 33% vesting being given up for each year up to the third year.

Investment Plan benefits will be paid upon retirement, termination of 
employment, disability, or death. In addition, benefits may be distributed to 
a participant in the event of financial hardship.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal year end 
  Option/SR Values

There were no stock options held by any of the Company's officer as of 
October 31, 1996. During the year ended October 31, 1996, no stock options 
were exercised.

Warrants totaling 300,000 were issued to L. Beer during the current year. 
Conversion is at $0.50 per share and they expire in 1999.


The Company maintains a Stock Option Plan (the "Plan") under which options of 
purchase 800,000 shares of the Company's Common Stock, par value $.001 per 
share, have been reserved. Pursuant to the Plan, the Company is permitted to 
issue incentive stock options ("Incentive Stock Options") and non-qualified 
stock options ("Non-Qualified Stock Options") to employees or directors of 
the Company; provided, however, that no incentive Stock Options shall be 
granted to a non-employee director. Incentive

                                         14

<PAGE>

Stock Options under the Plan are intended to qualify for the tax treatment 
accord under Section 422A of the Internal Code of 1986, as amended (the 
"Code). Non-Qualified Options under the plan are intended to be options which 
do not qualify for the tax treatment accorded under Section 422A of the Code.

All directors and key employees of the Company and its subsidiaries are 
eligible to participate in the Plan. The Plan is administered by the Board of 
Directors of the Company which, to the extent it determine, may delegate its 
power with respect to the administration of the Plan to a compensation 
advisory committee consisting of not less than three members, at least of 
whom two shall be directors for the Company.

Under the Plan, Incentive Stock Options to purchase shares of the Company's 
Common Stock may not be granted for less than 100 percent of fair market 
value of the Common Stock on the date the Incentive Stock Option is granted; 
provided, however, that in the case of an Incentive Stock Option granted to 
any person then owning 10 percent of the voting power of all classes of the 
Company's stock, the Purchase Price per share of all classes of the Company's 
stock, the Purchase Price per share subject to the Incentive Stock Option may 
not be less than 110 percent of the fair market value of the stock on the 
date of the grant of the option. The option price per share with respect to 
each Non-Qualified Stock Option granted under the Plan is to be determined by 
the Board of Directors, but may not be less than 85% of the fair market value 
of the Common Stock on the date the Non-Qualified Stock Option is granted.

                                       15
<PAGE>


Options under the Plan may not have a term of more than 10 years: provided, 
however, that an Incentive Stock Option granted to a person then owing more 
than 10 percent of the voting power of all classes of the Company's stock may 
not be exercised more than 5 years after the date such option is granted. In 
addition, the aggregate fair market value, determined at the time the options 
granted, of the stock with respect to which Incentive Stock Options are 
exercised for the first time by an employee in any calendar year under the 
Plan may not exceed $100,000.

Compensation of Directors

Directors who are not employees of the Company are entitled to a board 
meeting attendance fee of $750 plus reimbursement of expenses.

Employment Agreements

Mr. Rice had a five year employment agreement terminating April 15, 1996, 
which was automatically renewable for successive one year terms, unless 
otherwise canceled 60 days prior to the end of the initial terms of any 
successive term. The contract required a salary of approximately $115,000 per 
annum with an increase each year of not less than 5% of the prior's years 
salary. The agreement provided a bonus payment of up to 35% of base 
compensation, the amount of which will be based upon the realization by the 
Company of certain levels of pre-tax income. Under the argument, the employee 
may elect to require the Company to provide life insurance for such employee 
in the amount of $1,000,000. The agreement may be terminated by the Company 
for certain events constituting "cause" upon death or upon disability. Upon 
disability, the employee would receive fifty percent of his salary for the 
remaining term of the agreement. Upon death, the employee's beneficiary would 
receive fifty percent of his base salary for a period of twelve months. If 
the Company discharges the employee (other than a discharge for "cause" or a 
discharge as a result of the employee's disability) or if he terminates the 
agreement because of the company's breach, he is entitled to the salary due 
him for the remaining term of the agreement and is entitled to continue to 
receive employee benefits provided under the agreement through the end of the 
then-current.

Mr. Rice resigned May 1996 and the employment contract was canceled June 1966 
with the sale of Rage Inc. Current management in not under an employment 
contract.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



                                        16

<PAGE>


The following table sets forth, as of April 1, 1997 information concerning 
the shares of the Company's Common Stock beneficially owned by (a) each 
person or group known to the Company to be the beneficial owner of more than 
5% of the outstanding shares of the Common Stock, (b) each director and 
nominee, and (c) all directors and officers as a group. The outstanding 
voting securities of the Company as of the record date consisted of 
15,174,693 shares of common stock. Except as otherwise indicated, each person 
named or included in a group has sole voting and investment power with 
respect to his or its shares of Common Stock.



Name and Address of Beneficial          Amount and Nature of      Percent
Owner or Identity of Group              Beneficial Ownership      of Class (1)
----------------------------------      --------------------      ------------

Renaissance Capital Partners, Ltd.      9,443,792                 57.4%
8080 No. Central Expressway,
Suite 219-L869
Dallas, TX 75206-1857

Richard W. & Robert M. Snyder           2,006,667 (2)             12.2%
c/o Snyder Capital Group
3219 McKinney Ave.
Dallas, TX 75204

Russell G. Cleveland                    40,000 (3)                 0.2%
c/o Renaissance Capital Group, Inc. 
8080 N. Central Expressway,
Suite 210L869
Dallas, TX 75206-1847

William L. Pryor, III                   25,000 (4)                 0.2%
Prism Group, Inc.
441 Lexington Avenue, Suite 502
New York, NY 10017

(1) Common Stock which is not outstanding but which a person has a right to 
acquire with 60 days of the record date are considered as Common stock 
outstanding for purposes of computing the percentage of Common Stock owned by 
such person, but such Common stock is not deemed outstanding for purposes of 
computing the percentage of common Stock owned by any other person.

(2) Includes 100,000 shares of common stock issuable upon exercise of 
warrants granted to Mr. Synder.

(3) Mr. Cleveland is a director, officer and principal shareholder of 
Renaissance Capital Group inc., the managing general partner of Renaissance 
Capital Partners, Ltd., and may be deemed to share voting and investment 
control over such shares.

(4) Represents 25,000 shares of common stock issuable upon exercise of 
options granted to Mr. pryor under the Company's Stock Option Plan.

Changes in Control


                                         17



<PAGE>

Renaissance Capital Partners, Ltd. acquired control of the company on 
December 31, 1994, pursuant to a Purchase Agreement with the Company (the 
"Purchase Agreement") under which Renaissance exchanged $1,600,000 principal 
amount of the Company's 12.5% Convertible Debentures (the "Debentures") for 
16,000 shares of the Company's Series B Preferred Stock. The Company also 
issued Renaissance a 10% Term Note originally due December 31, 1997 in the 
principal amount of $211,635.40 (representing interest on the Debentures 
accrued through September 30, 1994) and paid Renaissance $50,000 
(representing interest on the Debentures from October 1, 1994 through 
December 31, 1994. At October 31, 1996, Renaissance converted Series A and B 
Preferred Stock, accumulated dividends, accumulated interest and note payable 
to common stock at a conversion rate of $0.25per share.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
On April 25, 1991, the Company issued to Renaissance a convertible debenture 
(the "1991 Debenture") in the principal amount of $1,250,000 which was then 
convertible into the Company's common stock at a conversion price of $.90 per 
share. The 1991 Debenture bore interest at the rate of 12.5% per annum. The 
principal of the 1991 Debenture was repayable in quarterly installments of 
$40,000 each, beginning on July 1, 1994 and was payable in full at maturity 
on March 31, 1998. The conversion price of the 1991 Debenture was reduced to 
$.70 per share in December, 1992.
 
On December 30, 1992, the Company issued to Renaissance a second convertible 
debenture in the amount of $350,000 (the: 1992 Debenture"). The 1992 
Debenture bore interest at an annual rate of 12.5%. The principal of the 1992 
Debenture was repayable in quarterly installments of $10,500 each, beginning 
on July 1, 1994, and was payable in full at maturity on March 31, 1998. The 
1992 Debenture was convertible into the Company's common stock at a 
conversion price of $.70 per share.
 
On December 31, 1994, Renaissance exchanged the Debenture for 16,000 shares 
of the Company's Series B Preferred Stock. The Company also issued 
Renaissance a 10% Term Note due December 31, 1996 in the principal amount of 
approximately $211,635 for unpaid accrued interest on the Debentures and paid 
Renaissance $50,000 (representing interest on the Debentures from October 1, 
1994 through December 31, 1994). Renaissance currently may convert the Series 
B Preferred Stock into 3,200,000 shares of the Company's common stock at the 
rate of $.50 per share, subject to adjustment. See "PRINCIPAL 
SHAREHOLDERS--Change in Control".
 
On October 31, 1996, Renaissance converted Series A and B Preferred Stock, 
accumulated dividends, accumulated interest and note payable to common stock 
at a conversion rate of $0.25per share.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
         ON FORM 8-K.
 
(a) Documents filed as part of this Annual Report on Form 10-K: 

         (1) Financial Statements.
 
         See "Index to Consolidated Financial Statements and Financial Statement
         Schedules" on page F-1 herein. 

                                      18

<PAGE>


         (2) Financial Statement Schedules Required to be Filed by Item 8 on 
             this Form.
 
                NONE
 
         (3) Exhibits.
 
<TABLE>
<CAPTION>



                                                                  INCORPORATED BY REFERENCE
EXHIBIT NO.    DESCRIPTION                                        OR FILED HEREWITH
-------------  ----------------------------------------           ------------------------------------
<S>            <C>                                                <C>
3(i)(a)        Certificate of Incorporation as                    Incorporated by reference to
               amended through August 18, 1994                    Exhibit 3(i) to Registrant's Form
                                                                  10-Q for the period ended July 31,
                                                                  1994

3(i)(b)        Certificate of Amendment to Certificate            Incorporated by reference to
               of Incorporation filed December 30, 1994           Exhibit 4.1 to Registrant's Form 8-
                                                                  K dated December 31, 1994

3(ii)          By Laws                                            Incorporated by reference to
                                                                  Exhibit 3.3 to the Registration
                                                                  Statement on Form S-18 (No. 33-
                                                                  18636-NY) (the "Registration
                                                                  Statement").

4(a)           Stock Certificate                                  Incorporated by reference to
                                                                  Exhibit 4.1 to the Registration
                                                                  Statement.

4(b)           Certificate of                                     Incorporated by reference to 
               Amendment to Certificate                           Exhibit 4 of Registrant's Form 
               of Incorporation filed                             10-Q for the period ended  
               August 18, 1994 (with terms of                     July 31, 1994.
               10% Senior Preferred Stock)         

4(c)           Certificate of                                     Incorporated by reference to
               Amendment to Certificate                           Exhibit 4.1 to Registrant's Form 
               of Incorporation filed                             8-K dated December 31, 1994.
               December 30, 1994 (with terms
               of Series B Senior Preferred Stock)
                        
10(a)          Employment                                         Incorporated by reference to
               Agreement dated                                    Exhibit 10(c) to Form 10-K
               April 16, 1991, between                            Report dated January 28, 1993.
               Global Environmental Corp.
               and William V. Rice

10(b)          Global                                             Incorporated by reference to
               Environmental Corp.                                Exhibit 10(j) to the October
               Stock Option Plan                                  31, 1990 Form 10-K.

10(c)          Mortgage Note and                                  Incorporated by reference to 
               Mortgage Agreement                                 Exhibit 10(k) to the October
               dated April 3, 1990 of Global                      31, 1990 Form 10-K.
               Environmental Corp.
               with Continental Bank

</TABLE>
                                      19

<PAGE>

<TABLE>
<CAPTION>



                                                                  INCORPORATED BY REFERENCE
EXHIBIT NO.    DESCRIPTION                                        OR FILED HEREWITH
-------------  ----------------------------------------           ------------------------------------
<S>            <C>                                                <C>

10(d)          Convertible                                        Incorporated by reference to
               Debenture Agreement                                Exhibit 10(c) to Form 10-K
               in the amount of                                   Report dated January 28, 1993.
               $1,250,000 dated April 25, 1991  
               between Global Environmental
               Corp. and Renaissance Capital
               Partners, Ltd.

10(e)          First Amendment                                    Incorporated by reference to
               dated December 30,                                 Exhibit (10j) to Form 10-K
               1992 to Convertible                                Report dated January 28, 1993.
               Debenture Agreement in the amount of 
               $1,250,000 dated April 25, 1991
               between Gobal Environmental Corp.
               and Renaissance Capital Partners, Ltd.

10(f)          Convertible                                        Incorporated by reference
               Debenture Agreement                                to Exhibit (10k) to Form 10-K 
               in the amount of                                   Report dated January 28, 1993.
               $350,000 dated December 30, 1992
               between Global Environmental Corp.
               and Renaissance Capital Partners, Ltd. II

10(g)          Loan and Security                                  Incorporated by reference to
               Agreement dated                                    Exhibit 10(h) to Form 10-K Report 
               May 28, 1993 between                               dated January 28, 1994.
               Danzer Metal Works Co.
               and Fremont Financial Corporation

10(h)          Asset purchase agreement dated                     Incorporated by reference to Exhibit 10() to Form
               August 25, 1993 between                            10-K Report dated January 28, 1994. 
               Morrison Industries L.P. and Global        
               Environmental Corp.

10(I)          Joint Venture Agreement dated December             Incorporated by reference to Exhibit 10(j)
               31, 1993 between Global Environmental              to Form 10-K Report dated
               Corp. and Cadema Corporation.                      January 28, 1994.
               

10(j)          Equipment Purchase and Security                    Incorporated by reference to Exhibit 10(k) to
               Agreement dated September 17, 1993                 Form 10-K Report dated January 28, 1994.
               between U.S. Amada, Ltd. and
               The Danzer Metal Works Co.

10(k)          Equipment Purchase and Security                    Incorporated by reference to
               Agreement dated                                    Exhibit 10(l) to Form 10-K Report
               September 17, 1993                                 dated January 28, 1994.
               between U.S. Amada, Ltd. and    
               The Danzer Metal Works Co.

</TABLE>

                                         20

<PAGE>

<TABLE>
<CAPTION>



                                                                  INCORPORATED BY REFERENCE
EXHIBIT NO.    DESCRIPTION                                        OR FILED HEREWITH
-------------  ----------------------------------------           ------------------------------------
<S>            <C>                                                <C>


10(l)          Equipment Purchase and Security Agreement dated    Incorporated by reference to Exhibit 10(m) to
               September 17, 1993 between U.S. Amada, Ltd. and    Form 10-K Report dated January 28, 1994
               The Danzer Metal Works Co.

10(m)          Purchase Agreement dated December 31, 1994         Incorporated by reference to Exhibit 99.1 to
               between Global Environmental Corp.                 Registrant's Form 8-K dated December 31, 1994.
               and Renaissance Capital Partners,
               Ltd. to exchange $1,600,000 of
               Convertible Debentures for 16,000
               Series B Cumulative Convertible 
               Senior Preferred Stock.

10(n)          10% Term Note in principal amount of               Incorporated by reference to Exhibit 10(n) to
               $211,635 due December 31, 1997.                    Registrant's Form 8-K dated December 31, 1994

10(o)          Loan and Security Agreement                        Incorporated by reference to Exhibit 10(o) to
               dated June 23, 1995 between                        Form 10-K dated April 1, 1996
               Danzer Metal Works Co. and Fremont         
               Financial Corporation

10(p)          Mortgage Note and Mortgage Agreement dated         Incorporated by reference to Exhibit 10(p) to
               January 25, 1996 of Global Environmental Corp.     Form 10-K dated April 1, 1996
               with Midlantic Bank

10(q)          Loan and Security Agreement dated May 1, 1996,     Filed herewith Exhibit 10 (q)
               between Danzer Industries, Inc and Fremont
               Financial Corporation

10( r)         Common Stock Purchase Agreement between William    Filed herewith Exhibit 10 ( r)
               V. Rice and the Company dated May 21, 1996

21             List of Subsidiaries                               Incorporated by reference to Exhibit 22 to the
                                                                  October 31, 1989 Form 10-K.

(b)            Reports on Form 8-K No reports on Form 8-K were
               filed during the last quarter of the fiscal year
               ended October 31, 1996
</TABLE>
 


                                         21


<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant had duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 



                                GLOBAL ENVIRONMENTAL CORP.
 

                                BY:  /S/ RUDOLPH W. SCHUSTER
                                     -----------------------------------------
                                      Rudolph W. Schuster, Director,
                                      President and Chief Operating Officer
 



                                          22

<PAGE>


APRIL 1, 1997
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.


 

April 1, 1997


                                 By: /s/William F. Clarke
                                     --------------------------------------
                                     William F. Clarke
                                     Chief Financial and Accounting Officer


April 1, 1997


                                By: /s/Russell G. Cleveland 
                                    -----------------------------------------
                                    Russell G. Cleveland, Director


April 1, 1997



                                By: /s/William L. Pryor
                                    -----------------------------------------
                                    William L. Pryor, Director
 







                                           23


<PAGE>


                    GLOBAL ENVIRONMENTAL CORP AND SUBSIDIARY
 

Exhibit No. 10 (p)
 
                                FOURTH AMENDMENT
                         TO LOAN AND SECURITY AGREEMENT
                       BETWEEN DANZER METAL WORKS COMPANY
                       AND FREMONT FINANCIAL CORPORATION
 
    This THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
made as of May 1,1996 by and between FREMONT FINANCIAL CORPORATION ("Fremont")
and DANZER INDUSTRIES. INC. ("Borrower"), in light of the following:
 
    WHEREAS, Borrower and Fremont entered into a Loan and Security Agreement
dated May 28, 1993 (as amended from time to time, the "Loan Agreement":
Capitalized terms used herein shall have them earnings set forth in the Loan
Agreement unless specifically defined herein); and
 
    WHEREAS, Borrower and Fremont wish to amend the Loan Agreement as set forth
herein.
 
    NOW THEREFORE, in consideration of the mutual promises and agreements of the
parties hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged the parties hereto agree
as follows:
 
    1.  The first sentence of Section 3.1 of the Loan Agreement is deleted in 
its entirely and replaced with the following:

    3.1 This Agreement shall become effective upon acceptance by Fremont and 
shall continue in full force and effect for a term ending January 31, 1998 
(the Renewal Date) and from year to year thereafter, unless sooner terminated 
pursuant to the terms hereof.
 
     2.  Borrower reaffirms, ratifies and confirms its Obligations under the 
Loan Agreement, acknowledges that all the terms and conditions in the Loan 
Agreement (except as amended herein) remain in full force and effect and 
further acknowledges that the security interest granted to Fremont in the 
Collateral is valid and perfected.
 
    3.  Borrower is not aware of any events which now constitute, or with the 
passage of time or the giving of notice would constitute ,an Event of Default 
under the Loan Agreement.


                                           24

<PAGE>



    4.  This Amendment constitutes the entire agreement of the parties in 
connection with the agreement of the parties in connection with the subject 
matter of this Agreement and cannot be changed or terminated orally. All 
prior agreements, understandings, representations, warranties and 
negotiations regarding the subject matter hereof, if any, are merged into 
this Amendment.
 
    5.  This Amendment may be executed in counterparts, each of which, when 
so executed and delivered shall be deemed an original, and all of such 
counterparts together shall constitute but one and the same agreement.
 
    6.  This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
 
    IN WITNESS WHEREOF, Borrower and Fremont have executed this Amendment as of
the date first written above.
 
                                FREMONT FINANCIAL
                                   CORPORATION,
                                a California corporation,
 

                                By: --------------------------------
                                Print Name:
                                Title/Capacity:
 

                                DANZER INDUSRIES,INC
                                a Maryland corporation,
 

                                By: ---------------------------------
                                Print Name:
                                Title/Capacity:
 




                                         25

<PAGE>


                    GLOBAL ENVIRONMENTAL CORP AND SUBSIDIARY
 
Exhibit No. 10 (r)
 

                        COMMON STOCK PURCHASE AGREEMENT
 


This Common Stock Purchase Agreement (the "Agreement") is made on May 22,
1996, by and between Global Environmental Corp., a New York corporation
("Global"), Global Environmental Holdings, Inc., a Delaware corporation
("Holdings") (Global and Holdings shall be referred to collectively in the
remainder of this Agreement as "Global," except where specifically indicated to
the contrary), Rage, Inc., a Delaware corporation ("Rage"), and William V. Rice
("Rice").
 
    WHEREAS, Global Environmental Corp. is a public company which operates its
businesses through subsidiaries;
 
    WHEREAS, Holdings is a wholly-owned subsidiary of Global;
 
    WHEREAS, Rage is a wholly-owned subsidiary of Holdings;
 
    WHEREAS, Global Environmental Corp. and Global Environmental Holdings, Inc.
desire to sell their subsidiary, Rage, and Rice desires to acquire Rage from
Global Environmental Holdings, Inc. through the purchase of all the issued and
outstanding capital stock of Rage upon the terms and conditions set forth in
this Agreement; and
 
    NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants, representations, and warranties herein contained, and intending to be
legally bound, the parties hereby agree as follows:
 
    1. Sale of Rage by Global. In reliance upon the representation and
warranties contained and subject to the terms and conditions hereof, and in
consideration of the transfer of assets described in paragraph 2, Global will
assign and deliver to Rice, and Rice will acquire from Global, at the Closing,
the following:
 
        (a) Forty-five (45) shares of common stock of Rage, representing all the
    issued and outstanding shares of Rage (the "Rage Stock") (assigned value of
    $100,000);
 
        (b) The real property and improvements, commonly referred to as
    Bedminster Industrial Park, Unit One, Apple Tree Lane, Township of 
    Bedminster, Bucks County, Pennsylvania (the "Real Property"). The transfer
    of said property shall

                    
 
                                         26

<PAGE>

be accomplished and set forth in a separate Agreement of Sale for Real Estate
("Real Estate Sale Agreement"), a copy of which is attached hereto as Exhibit A
(assigned value of $500,000);

        (c) $104,600, payable as follows:
 
        (i) Twenty-six (26) equal payment of $2,100 each, to be paid by Global
    to Rice on a bi-weekly basis, commencing May 17, 1996 and continuing
    bi-weekly thereafter until paid in full;
 
        (ii) $25,000 paid by Global on May 10, 1996;
 
       (iii) $25,000 to be paid by Global May 25, 1996.
 
    2. Purchase by Rice. In reliance upon the representation and warranties of
Global contained herein, and subject to the terms and conditions hereof, and in
consideration of the transfer of assets described above in paragraph 1, Rice
shall deliver the following to Global at Closing:
 
        (a) 517,000 shares of Common Stock of Global representing all of the
    common shares owned by Rice and all the right, title, and interest in Global
    (the "Global Stock") (assigned value of $105,000);
 
        (b) All securities representing all of Rice's employee stock options
    and/or any derivative rights relating to Global and its subsidiaries, other
    than Rage (the "options") (upon execution of this Agreement, all these
    derivative rights shall be canceled);
 
        (c) Release by Rice of all amounts payable to Rice under the terms of
    the Employment Agreement by and between Rice and Global Environmental Corp.,
    dated April 16, 1991 (assigned value of $145,000). Upon execution of this
    Agreement, said Employment Agreement shall be canceled, and Rice's
    employment with Global Environment Corp. shall terminate.
 
        (d) Assumption by Rice of all mortgage debt on the Real Property
    (approximately $350,000).
 
    3. Closing. The purchase and sale of the assets described above in
paragraphs 1 and 2, and the execution of the Real Estate Sale Agreement, and the
delivery of the documents and the performance of the other matters described in
paragraphs 1, 2, 4 and 5 hereof, shall take place at the offices of Global,
Bedminster Industrial Park, Unit One, Apple Tree Lane, Township of Bedminster,
Bucks County, Pennsylvania, on May 22, 1996, or at any later date mutually
agreed upon by Rice and Global. The closing is referred to in this Agreement as
the "Closing". The agreed upon date of the closing is referred to in this
Agreement as the "Closing Date".
 

                                      27


<PAGE>

    4. Documents to be delivered by Global. At the Closing, Global shall deliver
to Rice the following documents:
 
        (a) any certificate or certificates and stock powers as shall be
    necessary to convey and vest in Rice all Global's right, title, and interest
    in and to all of the Rage Stock;
 
        (b) The executed Real Estate Agreement of Sale and other documents as
    shall be necessary to convey and vest in Rice all of Global's right, title,
    and interest to the property commonly referred to as Bedminster Industrial
    Park, Unit One, Apple Tree Lane, Township of Bedminster, Bucks County,
    Pennsylvania.
 
    5. Documents to be delivered by Rice. At the Closing, Rice shall deliver to
Global the following:
 
        (a) 517,000 shares of Common Stock of Global, represented by such stock
    certificate or certificates and/or stock powers as shall be necessary to
    convey and vest in Global all the Global Stock;
 
        (b) all certificates or other securities evidencing all the Options and
    any securities powers as shall be necessary to convey and/or cancel the
    Options;
 
        (c) all original signature copies of Rice's employment contract, which
    shall be marked "Canceled" at the Closing and initialed by Rice and Global.
 
    6. Representation and Warranties by Global. Global represents and warrants
to Rice as follows:
 
        (a) Corporate Status. Global Environmental Corp. and Global Holdings,
    Inc. are corporations duly organized, validly existing, and in good standing
    under the laws of the State of New York and Delaware, respectively, with
    full corporate power and authority to carry on their businesses, as now
    conducted at 17500 York Road, Hagerstown, MD, 21740. Global Environmental
    Corp. owns 100% of the issued and outstanding shares of capital stock of
    Global Environment Holdings, Inc. and Global Environmental Holdings, Inc.
    owns 100% of the issued and outstanding stock of Rage, Inc.
 
        (b) Authority of the Agreement. The Board of Directors of Global
    Environmental Corp., and the Board of Directors of Global Environmental
    Holdings, Inc. have unanimously approved the sale of Rage and has instructed
    the Secretary to deliver a proxy statement to Global's common shareholders
    calling for a special to ratifying this transaction. Global anticipates
    holding this meeting on or around July 22, 1996. The Board of Directors of
    



                                          28

<PAGE>


    Global has given the requisite authority to Lawrence Beer to negotiate and
    execute all documents relating to this transaction. Upon ratification by the
    common shareholders of Global, this Agreement shall constitute the valid and
    legally binding obligation of Global, enforceable against Global in
    accordance with its terms, except to the extent, if any, that such
    enforceability may be limited by bankruptcy, insolvency, reorganization, or
    other laws affecting the enforcement of creditors' rights generally, now or
    hereafter in effect and subject to the application of equitable principles
    and the availability of equitable remedies. The execution, delivery, and
    performance of this Agreement and the other instruments and agreements to be
    executed, delivered, and performed by Global pursuant hereto and the
    consummation of the transaction contemplated hereby and thereby by Global do
    not and will not, with or without the giving of notice and/or the passage of
    time, violate or conflict with or result in a breach or termination of any
    provision of, or constitute a default under, any order, judgment, decree,
    statute, regulation, contract, agreement, or other restriction of any kind
    or description to which Global may be bound.
 
        (c) Stock Ownership. Global Environmental Corp. is the lawful record and
    beneficial owner of 100% of the issued and outstanding capital stock of
    Global Environmental Holdings, Inc. and Global Environmental Holdings, Inc.
    is the lawful record and beneficial owner of 100% of the issued and
    outstanding capital stock of Rage and the Rage Stock is free of all security
    interests, liens, encumbrances, claims, pledges, rights, or any obligations
    of any kind, except for the lien filed by Patriot Funding as more fully
    described in the UCC-1 filed by Patriot Funding. Global has the full right,
    power, and authority to sell the Global Stock pursuant to the terms and
    conditions of this Agreement, to the effect that Rice, immediately after the
    Closing, shall be the lawful record and beneficial owner of Rage Stock,
    which, as of the date hereof, shall comprise 100% of the issued and
    outstanding Common Stock of Rage and shall be free of all encumbrances,
    except as otherwise described herein and except as may arise from acts or
    omissions of Rice.
 
        (d) Complete Transfer. As evidenced by the transfer of all the Rage
    Stock, Global is conveying all assets owned or associated with Rage, and all
    liabilities associated with Rage, both those asserted and those nonasserted,
    as listed to the greatest extent possible on Exhibit B.
 
        (e) Capitalization of Rage. Rage is authorized by its Article of
    Incorporation to issue 1000 shares, no par value, all of which are of the
    same class and all of which are to be designated as Common Stock. Rage has
    no authorized, issued or outstanding shares of preferred stock.
 
    7. Representation and Warranties of Rice. Rice represents and warrants to
Global as follows:
 
                                      29


<PAGE>


        (a) Individual Status. Rice is an individual living at 4895 Gloucester,
    Doylestown, Pennsylvania, 18901.
 
        (b) Authority for Agreement. Rice has the power and authority to execute
    and deliver this Agreement and to carry out its obligations hereunder. Rice
    owns all of the securities being transferred pursuant to this Agreement,
    owns the securities individually, and does not own any of these securities
    in common with any other individual, including, but not limited to, his
    spouse. This Agreement constitutes a valid and legally binding obligation of
    Rice, enforceable against Rice in accordance with its terms, except as the
    same may be limited by bankruptcy, insolvency, reorganization, or other laws
    affecting the enforcement of creditors' rights generally now or hereafter in
    effect and subject to the application of equitable principles and the
    availability of equitable remedies.
 
        (c) Complete Transfer. As evidenced by the transfer of all Global Stock,
    Rice is conveying all assets owned or associated with Global, and all
    liabilities owned or associated with Global, both those asserted and those
    nonasserted, as listed to the greatest extent possible in Exhibit B.
 
        (d) Stock Ownership. Rice is the lawful record and beneficial owner of
    517,000 shares of Common Stock of Global, and has an option or a derivative
    right in     additional shares of Global Common Stock. These securities are
    free and clear of any and all security interest, liens, encumbrances,
    claims, pledges, rights, charges, escrow, options, rights of first refusal,
    contracts, commitments, understandings and obligations of any kind. Rice has
    the full right, power, and authority to sell the Stock to be transferred by
    him pursuant to the terms and conditions of this Agreement, and these
    securities represent 100% of Rice's ownership interest in Global.
    Immediately after the Closing, Global shall be the lawful and beneficial
    owner of 517,000 shares of Global, free and clear of any and all security
    interests, liens, encumbrances, claims, pledges, rights, charges, escrow,
    options, rights of first refusal, contracts, commitments, understandings or
    obligation of any kind, except as may arise from acts or omissions of
    Global. The execution, delivery, and performance of this Agreement and the
    other instruments and agreements to be executed, delivered, and performed by
    Rice pursuant hereto, and the consummation of the transaction contemplated
    hereby and thereby do not and will not, with or without the giving of notice
    and/or the passage of time, violate or conflict with or result in a breach
    or termination of any provision of, or constitute a default under, any
    order, judgment, decree, stature, regulation, contract, agreement, or any
    other restriction of any kind or description to which Rice is a party or by
    which Rice may be bound. Rice acknowledges that he was the founder of Global
    and its predecessor companies and is fully aware of the financial conditions
    of both Global and Rage, and that until April 9,1996, Rice held the position
    of President and member of the Board of Directors. Rice acknowledges that



                                       30

<PAGE>


    Global makes no representations or warranties as to the present or future
    financial health of Rage.
 
        (e) Restricted Securities. Rice understands that the stock of Rage is
    not registered under the Securities Act on the grounds that the sale
    provided for in this Agreement is exempt from registration under the
    Securities Act, pursuant to Section 4.2 thereof. The Shares are and will be
    "restricted securities," as the term is defined in Rule 144 of the Rules and
    Regulations promulgated under the Act. The Shares may not be sold or
    otherwise transferred unless they first have been registered under the Act
    and all applicable state securities laws, or unless exemptions from such
    registration provisions are available with respect to said resale or
    transfer. Global's reliance on such exemption is predicated in part on
    Rice's representation that he is an "Accredited Investor". The term
    "Accredited Investor" as used herein shall be defined pursuant to the Rules
    and Regulations of the SEC.
 
        (f) Exemptions. Rice understands that the Shares are being offered and
    sold in reliance on specific exemptions from the registration requirements
    of United States Federal and State securities laws and that the Company is
    relying upon the truth and accuracy of the representations, warranties,
    agreements, acknowledgments, and understandings of Rice set forth herein in
    order to determine the applicability of such exemptions and the suitability
    of Rice to acquire the Shares, and Rice acknowledges that it is solely
    Rice's responsibility to satisfy himself as to the full observance by this
    offering and the sale of the Shares.
 
        (g) Legends. Rice's stock certificates, representing all shares of Rage
    owned by Rice, shall be endorsed with the legends set forth below:
 
        (1) The following legend under the Securities Act:

            "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
            TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL
            REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
            OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY
            AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
 
       (2) Any legend imposed or required by the Company's Bylaws or applicable
           state securities laws.
 
        (h) Receipt of Information. Rice acknowledges that he has had extensive
    access to all relevant information necessary to his consideration of whether



                                        31

<PAGE>


    or not this transaction is appropriate for him. Rice represents that he is
    experienced in evaluating these types of transactions, that he can bear the
    economic risk of such a transaction, and that he possesses such knowledge
    and experience in financial and business matters as to render him capable of
    evaluating the merits and risks of the transaction.
 
        (i) Capitalization. Rice warrants that Global Environmental Corp. owns
    100% of the issued and outstanding shares of capital stock of Global
    Environment Holdings, Inc. and Global Environmental Holdings, Inc. owns 100%
    of the issued and outstanding stock of Rage, Inc.
 
        (j) Vote of stock. Rice agrees to vote all his shares held in Global in
    favor of the transaction contemplated herein.
 
        (k) Confidentiality. Rice agrees not to approach Morrison Industries,
    Inc., or Buffalo Ventures for the purpose of obtaining a license to make
    truck bodies or to obtain truck bodies from Morrison for period of two (2)
    years from the date of this Agreement.
 
     8. Conditions to Effectiveness of Transactions.
 
    (a) Board of Director and Shareholder approval by Global is a condition
precedent;
 
    (b) Renaissance Capital Partners, Ltd. must give a signed letter to the
parties of this transaction that it will agree to vote all of its shares held in
Global in favor of the transaction contemplated herein;
 
    (c) The Real Estate Sale Agreement must be executed;
 
    (d) All inter-company transaction (debit and credits) shall have been
canceled prior to Closing; and
 
    (e) Assumption by Rice of the lease on his personal automobile.
 
    9. Tax Aspects of the Transaction. Global shall be responsible for taxes
incurred by Rage for all periods prior to the Closing. Rice shall be responsible
for all taxes incurred by Rage in periods beginning after the Closing. Any taxes
incurred in the transfer of the Real Property shall be paid equally by Rice and
Global. Rice shall be allocated the corresponding Net Operating Loss carry
forward applicable to Rage, less any taxes incurred by Rage by the cancellation
of inter-company accounts.
 

                                        32

<PAGE>


    10. Release by Rice. Rice does hereby, and for anyone claiming by or through
or under him, fully remise, release, acquit, and forever discharge Global and
any subsidiary or affiliated corporation, their partners, agents, lenders,
employees, stockholders, directors, officers, successors and assigns, jointly
and severally (collectively, "Released Parties"), of any from any and all
rights, claims, demands, actions, and causes of action, of any nature
whatsoever, whether arising at law or in equity, including accrued vacation
or sick leave and travel expenses, which Rice may have had, may now have, or may
hereafter have, against the Released Parties by reason of any matter, cause,
happening or thing occurring prior to and including the date of this Agreement.
It is intended by Rice by this Agreement to forever remise, acquit, waiver,
release and forever discharge the Released Parties from all claims, demands for
losses, injuries, and damages, rights known or unknown, direct or indirect,
arising from the aforementioned described matters, and from any other matter
occurring prior to the date of this Agreement, it being understood that all
rights which Rice or any person who claims by, through, or under him may have
against Released Parties shall be forever barred from bringing or asserting the
same in their own name or names, jointly with or through any person, natural or
corporate, for or upon or by reason of any act, matter, transaction, cause or
thing whatsoever. In addition, Rice hereby agrees to refrain at all times from
any defamation, libel, or slander of the Company and any of its officers or
directors.
 
    11. Release by Global. Global does hereby, and for anyone claiming by or
through or under it, fully remise, release, acquit, and forever discharge Rice,
Rage and any subsidiary or affiliated corporation, their partners, agents,
lenders, employees, stockholders, directors, officers, successors and assigns,
jointly and severally (collectively, "Released Parties"), (the "Released
Parties"), of any from any and all rights, claims, demands, actions, and causes
of action, of any nature whatsoever, whether arising at law or in equity, which
Global may have had, may now have, or may hereafter have, against the Released
Parties by reason of any other matter, cause, happening or thing occurring prior
to and including the date of this Agreement. Global intends, by this Agreement,
to forever remise, acquit, waive, release, and forever discharge the Released
Parties from all claims, demands for losses, injuries and damages, rights known
or unknown, direct or indirect, arising from the aforementioned described
matters, and from any other matter occurring prior to the date of this
Agreement, it being understood that all rights which Global or any person who
claims by, through, or under it may have against the Released Parties shall be
forever barred from bringing or asserting the same in their own name or names,
jointly with or through any person, natural or corporate, for or upon or by
reason of any act, matter, transaction, cause or thing whatsoever. In addition,
Global hereby agrees to refrain at all times from any defamation, libel or
slander of the Released Parties.
 
    12. Indemnification.
 
    (a) From time to time, and after the date hereof, Global will indemnify and
hold harmless Rice against any and all liability, damage, deficiency, loss,
cost, or expense (including reasonable attorneys' fees and expenses) that are
based upon or that arise out of any misrepresentation or breach of any warranty


                                         33

<PAGE>

or agreement made by Global herein. Global agrees to indemnify Rage against any
and all claims and liabilities of Global asserted against Rage.
 
    (b) From and after the date hereof, Rice will indemnify and hold harmless
Global against any and all liability, damage, deficiency, loss, cost, or expense
(including reasonable attorneys' fees and expenses) that are based upon or that
arise out of any warranty or agreement made by Rice herein. Rice agrees to
indemnify Global against any and all claims and liabilities of Rage asserted
against Global.
 
    (c) Each party entitled to indemnification under this Agreement (the 
"Indemnified Party") shall give notice to the party required to provide 
indemnification (the "indemnifying Party") promptly after each indemnified 
Party has actual knowledge of any third-party claim as to which indemnity may 
be sought, and shall permit the Indemnifying Party (at its expense) to assume 
the defense of any claim or any litigation resulting therefrom; provided that 
counsel for the Indemnifying Party who shall conduct the defense of such 
claim or litigation, shall be reasonably satisfactory to the Indemnified 
Party, and the Indemnified Party may participate in such defense, but only at 
such Indemnified Party's expense; and provided further that the omission by 
any Indemnified Party to give notice as provided herein shall not relieve the 
Indemnifying Party of its indemnification obligations under this Agreement 
except to the extent that the omission results in a failure of actual notice 
to the Indemnifying Party and such Indemnifying Party is damaged as a result 
of the failure to give notice. No Indemnifying Party, in the defense of such 
claim or litigation, shall, except with the consent of each Indemnified 
Party, consent to entry of any judgment or enter into any settlement which 
does not include as an unconditional term thereof the giving by the claimant 
or plaintiff to such Indemnified Party of a release from all liability with 
respect to such claim or litigation. In the event that the Indemnifying Party 
does not accept the defense of any matter as above provided, the Indemnified 
party shall have the full right to defend against any such claim or demand, 
and shall be entitled to settle or agree to pay in full such claim or demand 
in its sole discretion. In any event, Global and Rice shall cooperate in the 
defense of such action and the records of each shall be available to the 
other with respect to such defense.
 
    13. Severability. If any provision of this Agreement shall be held or deemed
to be or shall, in fact, be inoperative or unenforceable as applied to any
particular case because it conflicts with any other provision or provisions
hereof or any constitution or statute or rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the provision
in question inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatever. The invalidity of any one
or more phrases, sentences, clauses, section, or subsections of this Agreement
shall not affect the remaining portions of this Agreement.
 
    14. Further Assurances. At any time, and from time to time after the
Closing, each party shall, without further consideration, execute and deliver to


                                         34
<PAGE>

the other party such other instruments of transfer and assumption, and shall
take such other actions as the other party may reasonably request to carry out
the transfers contemplated by this Agreement.
 
    15. Miscellaneous. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect of the subject matter
hereof and may not be modified or amended except in writing signed by both
parties hereto. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same instrument. this Agreement shall be governed in all respects, including
validity, interpretation, and effect, by the laws of the Commonwealth of
Pennsylvania, applicable to contracts made and to be performed in Pennsylvania.
This agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of the parties hereto. This Agreement
shall not be assignable by either party without the prior written consent of the
other, such consent not to be unreasonably withheld. The rights and obligations
contained in this Agreement are solely for the benefit of the parties hereto and
are not intended to benefit or be enforceable by any other party, under the
third party beneficiary doctrine or otherwise. All representations and
warranties made by Rice and Global herein shall survive delivery of the
securities and the execution of this Agreement.
 
    All matters affecting the interpretation, form, validity, enforcement and
performance of this Agreement shall be decided under the laws of the
Commonwealth of Pennsylvania and in a forum located in Bucks County,
Pennsylvania. Both parties consent to the jurisdiction of the Federal Court for
the Eastern District of Pennsylvania with respect to any claims or litigation
arising out of this Agreement. Any and all disputes concerning the rights and
obligation of the parties hereto shall be resolved by binding arbitration under
the supervision of three (3) arbitrators appointed under and pursuant to the
rules of the American Arbitration Association.
 
    16. PENNSYLVANIA SECURITY LAWS:
 
    RICE AGREES TO COMPLY WITH THE PROVISIONS OF THE PENNSYLVANIA SECURITIES
LAWS WITH RESPECT TO THE RAGE STOCK BEING ACQUIRED PURSUANT TO THE TERMS OF THIS
AGREEMENT.
 
    UNDER PROVISION OF THE PENNSYLVANIA SECURITIES ACT OF 1972 (THE "1972 
ACT"), EACH PENNSYLVANIA RESIDENT SHALL HAVE THE RIGHT TO WITHDRAW HIS 
ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE SELLER, UNDERWRITER (IFANY) 
OR ANY OTHER PERSON, WITHIN TWO BUSINESS DAYS FROM THE DATE OF RECEIPT BY 
THEISSUER OF HIS WRITTEN BINGING CONTRACT OF PURCHASE OR IN THE CASE OF A 
TRANSACTION IN WHICH THERE IS NO WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN 
TWO BUSINESS DAYS AFTER HE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING 


                                        35

<PAGE>


OFFERED. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER 
OR TELEGRAM TO THE SELLING AGENT AT THE ADDRESS SET FORTH IN THE TEXT OF THE 
MEMORANDUM, INDICATING HIS OR HER INTENTION TO WITHDRAW. SUCH LETTER OR 
TELEGRAM SHOULD BE SENT OR POSTMARKED PRIOR TO THE END OF THE AFOREMENTONED 
SECOND BUSINESS DAY. IT IS PRUDENT TO SEND SUCH LETTER BY CERTIFIED MAIL, 
RETURN RECEIPT REQUESTED, TO ENSURE THAT IT WAS RECEIVED AND ALSO TO EVIDENCE 
THE TIME WHEN IT WAS MAILED. IF THE REQUEST IF MADE ORALLY (IN PERSON OR BY 
TELEPHONE, TO THE SELLING AGENT AT THE NUMBER LISTED IN THE NTEXT OF THE 
MEMORANDUM), A WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD 
BE REQUESTED.
 
    The parties have duly executed this Agreement as of the date first above
written.
 
                                  GLOBAL ENVIRONMENTAL CORP.
 

                                  By:----------------------------
                                     Lawrence Beer
                                     President
 

                                  GLOBAL ENVIRONMENTAL HOLDINGS, INC.
 
                                  By:-------------------------------
                                     Lawrence Beer
                                     President
 
                                  WILLIAM V. RICE
 
                                  By: -------------------------------
                                      William V. Rice
                                      Individually
 


I, Leonora C. Rice, understand that this contract transfers legal title to
securities and assets that I may have an ownership interest in based on
community property laws. I hereby consent to this contract and shall be legally
bound by its terms and conditions.
 
                                  By:----------------------------------
                                     Leonora C. Rice
 



                                             36

<PAGE>


                           GLOBAL ENVIRONMENTAL CORP.
                                 AND SUBSIDIARY
 
                                  YEARS ENDED
                        OCTOBER 31, 1996, 1995 AND 1994
 










                                            37

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                          PAGE(S)
                                                          -------
<S>                                                       <C>
CONSOLIDATED FINANCIAL STATEMENTS:
Independent Auditors' Report                              F-1
Consolidated Balance Sheets--October 31, 1996 and 1995    F-2
Consolidated Statements of Operations--Years Ended        F-3
  October 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Stockholders'       F-4
  Equity (Deficiency) Years Ended October 31, 1996, 1995
  and 1994
Consolidated Statements of Cash Flows--Years Ended        F-5 to F-6
  October 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements                F-7 to F-22
</TABLE>

<PAGE>


                         INDEPENDENT AUDITORS' REPORT
 
Board of Directors
Global Environmental Corp.
Hagerstown, Maryland
 
    We have audited the accompanying consolidated balance sheets of Global
Environmental Corp. and Subsidiary as of October 31, 1996 and 1995, and the
related consolidated statements of operations, changes in stockholders' equity
(deficiency) and cash flows for each of the three years in the period ended
October 31, 1996. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Global
Environmental Corp. and Subsidiary as of October 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended October 31, 1996, in conformity with generally
accepted accounting principles.
 
    The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has experienced substantial losses from
operations and at October 31, 1996 had a working capital deficiency. These
circumstances raise substantial doubt about the Company's ability to continue as
a going concern. Management's plans in regard to these matters are also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
    As discussed in Note 6 to the financial statements, the Company adopted
Statement of Financial Accounting Standards 109, "Accounting for Income Taxes,"
effective November 1, 1993.
 
January 15, 1997,
 Except for the last paragraph of Note 2, 
    which is as of March 25, 1997 
Plymouth Meeting, Pennsylvania

                                      F-1
<PAGE>
 
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                          CONSOLIDATED BALANCE SHEETS
 
                           OCTOBER 31, 1996 AND 1995
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                        1996         1995
                                                                     -----------  -----------
<S>                                                                  <C>          <C>
CURRENT ASSETS
  Cash.............................................................  $    50,008  $   335,979
  Accounts receivable, net of allowance for doubtful accounts of
   $52,188, 1996 and $38,409, 1995.................................    1,436,339      906,897
  Inventories......................................................      791,758      790,903
  Prepaid expenses and other.......................................       75,717       52,919
                                                                     -----------  -----------
    Total current assets...........................................    2,353,822    2,086,698
                                                                     -----------  -----------
PROPERTY, PLANT AND EQUIPMENT
  Land.............................................................       25,797       25,797
  Building and improvements........................................    1,385,502    1,370,328
  Equipment........................................................    2,273,920    2,383,102
                                                                     -----------  -----------
                                                                       3,685,219    3,779,227
  Less--accumulated depreciation and amortization..................   (2,076,765)  (2,015,605)
                                                                     -----------  -----------
    Total property, plant and equipment, net.......................    1,608,454    1,763,622
                                                                     -----------  -----------
OTHER ASSETS
  Property under agreement of sale.................................      344,127      --
  Miscellaneous....................................................           93       40,838
                                                                     -----------  -----------
                                                                         344,220       40,838
                                                                     -----------  -----------
                                                                     $ 4,306,496  $ 3,891,158
                                                                     -----------  -----------
                                                                     -----------  -----------
</TABLE>
 
    See Notes to Consolidated Financial Statements.
 
                                      F-2
<PAGE>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                 1996        1995
                                             ----------  -----------
<S>                                          <C>         <C>
CURRENT LIABILITIES
  Current portion of long-term debt........  $  544,725   $  182,061
  Mortgage payable.........................     344,127           --
  Accounts payable.........................   1,337,117    1,044,159
  Accrued salaries and wages...............     147,807      124,787
  Accrued expenses, other..................     381,482      322,420
    Net liabilities of discontinued
     operations............................         --        52,677
                                             ----------   ----------
    Total current liabilities..............   2,755,258    1,726,104
                                             ----------   ----------
LONG-TERM DEBT, net of current portion.....   1,344,182    1,604,567
                                             ----------   ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common stock, par value $.0001 per share;
  20,000,000 shares authorized, 13,815,603
  and 2,465,144 shares issued in 1996 and
  1995, respectively.......................       1,382          247
Preferred stock, $.001 par value, 5,000,000
  shares authorized; Class of 10%
  Cumulative Convertible Senior Preferred
  Stock, 10,500 shares authorized, 4,550
  and 7,550 shares issued and outstanding
  in 1996 and 1995, respectively (total of
  $399,044, 1996 and $662,150, 1995);
Series B Cumulative Convertible Senior
  Preferred Stock, 16,000 shares
  authorized, no shares issued and
  outstanding in 1996 and 16,000 shares
  issued and outstanding in 1995 (total of
  $1,511,319)..............................      399,04    2,173,469
Additional paid-in capital.................   4,554,102    1,877,784
Accumulated deficit........................  (4,654,412)  (3,491,013)
Less: Treasury stock, at cost
 612,579 shares, 1996 and 95,579 shares, 
 1995.....................................      (93,060)          --
                                             ----------   ----------
    Total stockholders' equity.............     207,056      560,487
                                             ----------   ----------
                                             $4,306,496   $3,891,158
                                             ----------   ----------
                                             ----------   ----------
</TABLE>
 
                                      F-3
<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                                              1996          1995          1994
                                                                          ------------  ------------  ------------
<S>                                                                       <C>           <C>           <C>
NET SALES...............................................................  $  8,153,689  $  7,525,757  $  6,648,477
COST OF GOODS SOLD......................................................     6,993,068     6,627,237     6,501,534
                                                                          ------------  ------------  ------------
  Gross profit..........................................................     1,160,621       898,520       146,943
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES............................     1,580,394     1,173,162     1,147,586
                                                                          ------------  ------------  ------------
  Loss from operations..................................................      (419,773)     (274,642)   (1,000,643)
                                                                          ------------  ------------  ------------
INTEREST EXPENSE........................................................      (239,310)     (265,542)     (332,465)
INTEREST INCOME.........................................................           931         3,522         2,348
OTHER INCOME............................................................       155,858        (6,227)      115,179
                                                                          ------------  ------------  ------------
LOSS FROM CONTINUING OPERATIONS.........................................      (502,294)     (542,889)   (1,215,581)
                                                                          ------------  ------------  ------------
DISCONTINUED OPERATIONS
  Income (loss) from operations of discontinued segment.................      (210,195)      153,955       236,921
  Loss on disposal of segment...........................................      (215,406)      --            --
                                                                          ------------  ------------  ------------
    Loss from discontinued operations...................................      (425,601)      153,955       236,921
                                                                          ------------  ------------  ------------
NET LOSS                                                                     ($927,895)    ($388,934)    ($978,660)
                                                                          ------------  ------------  ------------
                                                                          ------------  ------------  ------------
PER COMMON SHARE DATA
  Loss from continuing operations......................................          ($.32)        ($.32)        ($.52)
  Income (loss) from operations of discontinued segment                           (.09)          .06           .10
  Loss on disposal of segment..........................................           (.09)           --            --
                                                                          ------------  ------------  ------------
  Net loss.............................................................          ($.50)        ($.26)        ($.42)
                                                                          ------------  ------------  ------------
                                                                          ------------  ------------  ------------
WEIGHTED AVERAGE SHARES OUTSTANDING.....................................     2,339,756     2,369,565     2,360,966
                                                                          ------------  ------------  ------------
                                                                          ------------  ------------  ------------
</TABLE>
 
    See Notes to Consolidated Financial Statements.
 
                                      F-4
<PAGE>

<TABLE>
<CAPTION>
                                     GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF CHANGES IN
                                         STOCKHOLDERS' EQUITY (DEFICIENCY)
                                    YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

                                                                                                PREFERRED STOCK
                                                                                                10% AND SERIES B
                                                                       COMMON STOCK             PREFERRED STOCK
                                                                    SHARES       AMOUNT       SHARES       AMOUNT
                                                                 ------------  ---------   -----------  -----------
<S>                                                              <C>           <C>         <C>          <C>
Balance, October 31, 1993......................................    2,434,374    $   243            --    $       --

Issuance of 30,770 common shares...............................       30,770          4            --            --

Issuance of 7,550 preferred shares.............................           --         --         7,550       662,150

Net loss.......................................................           --         --            --            --

Dividends on preferred stock...................................           --         --            --            --
                                                                 ------------  ---------   -----------  -----------
Balance, October 31, 1994......................................     2,465,144       247         7,550       662,150

Issuance of 16,000 Series B preferred shares...................           --         --        16,000     1,511,319

Net loss.......................................................           --         --            --            --

Dividends on preferred stock...................................           --         --            --            --
                                                                 ------------  ---------   -----------  -----------
Balance, October 31, 1995......................................     2,465,144       247        23,550     2,173,469

Acquisition of treasury stock in connection with disposal of
  segment......................................................           --         --            --            --

Issuance of 1,200,000 common shares............................     1,200,000       120            --            --

Conversion of Series A (3,000) and Series B (16,000) preferred
  shares and Renaissance term note and related accrued interest
  and dividends................................................    10,150,459     1,015       (19,000)   (1,774,425)

Net loss.......................................................           --         --            --            --

Dividends on preferred stock...................................           --         --            --            --
                                                                 ------------  ---------   -----------  -----------

Balance, October 31, 1996......................................    13,815,603   $ 1,382         4,550    $  399,044
                                                                 ------------  ---------   -----------  -----------
                                                                 ------------  ---------   -----------  -----------
</TABLE>
                                 See Notes to Consolidated Financial Statements.

                                                         F-5

<PAGE>

<TABLE>
<CAPTION>
                                                                 ADDITIONAL                     TREASURY STOCK
                                                                  PAID-IN    ACCUMULATED   ----------------------------
                                                                  CAPITAL      DEFICIT     SHARES    AMOUNT    TOTAL
                                                                 ----------  ------------  -------  --------  ---------
<S>                                                              <C>         <C>           <C>      <C>       <C>
Balance, October 31, 1993......................................  $1,865,288  ($ 1,902,842)  95,579   $    --   ($37,311)
                                                                 
Issuance of 30,770 common shares...............................      12,496            --       --        --     12,500
                                                                 
Issuance of 7,550 preferred shares.............................          --            --       --        --    662,150
                                                                 
Net loss.......................................................          --      (978,660)      --        --   (978,660)
                                                                 
Dividends on preferred stock...................................          --       (11,742)      --        --    (11,742)
                                                                 ----------  ------------  -------  --------  ---------

Balance, October 31, 1994......................................   1,877,784    (2,893,244)  95,579        --   (353,063)
                                                                 
Issuance of 16,000 Series B preferred shares...................          --            --       --        --  1,511,319
                                                                 
Net loss.......................................................          --      (388,934)      --        --   (388,934)
                                                                 
Dividends on preferred stock...................................          --      (208,835)      --        --   (208,835)
                                                                 ----------  ------------  -------  --------  ---------

Balance, October 31, 1995......................................   1,877,784    (3,491,013)  95,579        --    560,487
                                                                 
Acquisition of treasury stock in connection with disposal of     
  segment......................................................          --            --  517,000   (93,060)   (93,060)
                                                                          
Issuance of 1,200,000 common shares............................     299,880            --       --        --    300,000
                                                                         
Conversion of Series A (3,000) and Series B (16,000) preferred           
  shares and Renaissance term note and related accrued interest          
  and dividends................................................   2,376,438            --       --        --    603,028
                                                                 
Net loss.......................................................          --      (927,895)      --        --   (927,895)
                                                                 
Dividends on preferred stock...................................          --      (235,504)      --        --   (235,504)
                                                                 ----------  ------------  -------  --------  ---------
                                                               
Balance, October 31, 1996......................................  $4,554,102  ($ 4,654,412) 612,579  ($93,060)  $207,056
                                                                 ----------  ------------  -------  --------  ---------
                                                                 ----------  ------------  -------  --------  ---------

</TABLE>
                                                               F-6

<PAGE>

<TABLE>
<CAPTION>
                                          GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                              
                                                                                          1996         1995          1994
                                                                                       ----------   ----------   ------------
<S>                                                                                    <C>          <C>          <C>
OPERATING ACTIVITIES
  Net loss                                                                             ($927,895)   ($388,934)   ($  978,660)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
      Depreciation and amortization................................................      183,623      250,648        242,683
      Write-off of deferred financing fees.........................................           --       86,569             --
      Provision for bad debts......................................................       38,500       38,500         21,618
      Gain on sale of equipment....................................................           --           --        (26,227)
      Net loss on disposition of items
        included in discontinued segment...........................................       21,843           --            --
  Changes in operating assets and liabilities:
    (Increase) decrease in:
      Accounts receivable..........................................................     (567,942)     320,797       (234,812)
      Inventories..................................................................         (855)     267,898        (75,801)
      Net assets from discontinued operations......................................           --      133,114         (2,748)
      Prepaid expenses and other...................................................      (22,798)      22,159        (54,078)
      Other assets, net............................................................       40,745      (19,447)            879
    Increase (decrease) in:
      Accounts payable.............................................................      292,958      288,355        138,804
      Net liabilities from discontinued operations.................................     (167,580)          --             --
      Accrued salaries and wages...................................................       23,020      (78,600)       203,387
      Accrued expenses, other......................................................      226,326     (181,008)      (193,914)
                                                                                       ----------   ----------   ------------
          Net cash provided by (used in) operating activities......................     (860,055)     740,051       (958,869)
                                                                                       ----------   ----------   ------------
INVESTING ACTIVITIES
  Purchase of property, plant and equipment........................................      (65,199)     (93,337)      (153,452)
  Investment in joint venture......................................................           --         (320)        (8,630)
  Proceeds from sale of equipment..................................................       36,744           --         46,286
                                                                                       ----------   ----------   ------------
          Net cash used in investing activities....................................      (28,455)     (93,657)      (115,796)
                                                                                       ----------   ----------   ------------
FINANCING ACTIVITIES
  Net borrowings (repayments) under revolving loan agreement.......................      497,111     (288,485)       333,530
  Proceeds from the issuance of long-term debt.....................................           --           --        575,891
  Payments of long-term debt.......................................................     (183,197)    (235,140)      (199,565)
  Payment of legal fees in connection with conversion of
    debt to preferred stock........................................................           --      (88,681)            --
  Payments of loan acquisition fees................................................           --           --        (15,000)
  Net proceeds from the issuance of preferred stock................................           --           --        662,150
  Net proceeds from the issuance of common stock...................................      300,000           --             --
  Payment of dividends on preferred stock..........................................      (11,375)     (46,708)       (11,742)
                                                                                       ----------   ----------   ------------
          Net cash provided by (used in) financing activities......................      602,539     (659,014)     1,345,264
                                                                                       ----------   ----------   ------------
NET INCREASE (DECREASE) IN CASH....................................................     (285,971)     (12,620)       270,599
CASH, BEGINNING....................................................................      335,979      348,599         78,000
                                                                                       ----------   ----------   ------------
CASH, ENDING.......................................................................    $  50,008    $ 335,979     $  348,599
                                                                                       ----------   ----------   ------------
                                                                                       ----------   ----------   ------------
</TABLE>
                                 See Notes to Consolidated Financial Statements.

                                                              F-7

<PAGE>

<TABLE>
<CAPTION>

                                                                        YRS ENDED OCTOBER 31,
                                                                        ---------------------
                                                                    1996         1995         1994
                                                                  --------    ----------    --------
<S>                                                               <C>         <C>           <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
  Cash paid for interest.......................................   $239,310    $  210,984    $362,465
                                                                  --------    ----------    --------
                                                                  --------    ----------    --------

  NON-CASH FINANCING ACTIVITIES:
    Conversion of Renaissance debt to preferred stock..........         --    $1,600,000          --
                                                                              ----------
                                                                              ----------

    Reclass of revolving loan to long-term debt                
      due to modification of loan agreement....................         --    $  933,530          --
                                                                              ----------
                                                                              ----------

    Conversion of 10% (3,000) and Series B (16,000)        
      Preferred Shares and related accrued dividends 
      and Renaissance term note and related accrued
      interest to common stock.................................   $603,028            --          --
                                                                  --------
                                                                  --------

    Accrual of dividends on Senior Preferred Stock
      10% Cumulative Convertible...............................   $ 75,504    $   28,794          --
                                                                  --------    ----------
                                                                  --------    ----------
    Series B Cumulative Convertible............................   $160,000    $  133,333          --
                                                                  --------    ----------
                                                                  --------    ----------

    Issuance of long-term debt in connection with                      
      purchase of equipment....................................         --            --    $439,100
                                                                                            --------
                                                                                            --------

    Issuance of 30,770 shares of common stock                        
      in connection with a legal settlement....................         --            --    $ 12,500
                                                                                            --------
                                                                                            --------

    Reclass of accrued interest to long-term debt                      
      in connection with Renaissance conversion................         --            --    $ 28,298
                                                                                            --------
                                                                                            --------

NON-CASH INVESTING ACTIVITIES:
  Reclass of deposit on equipment purchase.....................         --            --    $ 21,451
                                                                  --------    ----------    --------
                                                                  --------    ----------    --------
  Reclass of property to property under        
    agreement of sale in connection with
    disposal of Rage and reclass of related
    mortgage payable...........................................   $344,127
                                                                  --------
                                                                  --------


</TABLE>
                                 See Notes to Consolidated Financial Statements.

                                                              F-8
<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 1.      BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES
 
        Basis of Presentation and Description of Business
 
    Global Environmental Corp. (the "Company") was incorporated on October 6, 
1987. Effective August 1, 1988, Global Environmental Corp. acquired all of 
the issued and outstanding common shares of Global Environmental Holdings, 
Inc. ("Global Holdings").     
    Danzer Industries, Inc.("Danzer"), a wholly-owned subsidiary of Global 
Holdings, is principally engaged in the design, manufacture and installation 
of fabricated metal products. Products produced are normally based upon 
specifications received from customers. Danzer's revenues (subsequent to the 
sale of the Company's Rage subsidiary as described below) represent 
approximately 100% of the Company's revenues and are generated throughout the 
United States.
 
    Rage Inc. ("Rage") was a wholly-owned subsidiary of Global Holdings through
April 30, 1996 and was engaged in the business of engineering and supplying
pneumatic material handling systems throughout the United States. Effective
April 30, 1996, Rage was sold to a third party. Accordingly, the results of
Rage's operations for the fiscal year ended October 31, 1996 are presented as
"discontinued operations" in the consolidated statement of operations (Note 3).
The results of Rage's operations for the fiscal years ended October 31, 1995 and
1994 have been reclassified to conform with the 1996 method of presentation.
 
    The accompanying consolidated financial statements present the accounts 
of Global Environmental Corp. and its wholly-owned subsidiary. The entities 
are collectively referred to herein as the "Company". All significant 
intercompany transactions and balances have been eliminated in consolidation.
 
    The Company uses the equity method of accounting for a 49% owned interest 
in a joint venture. The original investment is recorded at cost, adjusted for 
the Company's share of undistributed earnings or losses. The operations of 
the joint venture are presently immaterial.
 
         Revenue Recognition

    Revenues from the manufacture of sheet metal products and fabrications 
are generally recognized when products are shipped to the customer.

                                    F-9

<PAGE> 
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 1.      BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
             OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

             Inventories
 
    Inventories are stated at the lower of cost (first-in, first-out) or 
market and, at October 31, 1996 and 1995 are comprised of the following 
components:
 
<TABLE>
<CAPTION>
                                                           1996       1995
                                                           ----       ----
<S>                                                       <C>         <C>
         Raw materials and supplies................  $  420,469  $  443,965
         Work-in-process...........................     286,122     161,960
         Finished goods............................      85,167     184,978
                                                     ----------  ----------
                                                     $  791,758  $  790,903
                                                     ----------  ----------
                                                     ----------  ----------
</TABLE>
 
    Work-in-process and finished goods include purchased materials, direct labor
and allocated overhead.
 
            Property, Plant and Equipment
 
    Property, plant and equipment are stated at cost and are depreciated on 
the straight-line method over the following estimated useful lives:
 
<TABLE>
                     <S>                                <C>
            Building and improvements              10 to 30 years
            Equipment                               5 to 20 years
</TABLE>
 
    Depreciation expense of property, plant and equipment for the years ended 
October 31, 1996, 1995 and 1994 included in continuing operations was 
$183,623, $184,547, and $164,443, respectively.
 
         Concentration of Credit Risk
 
    The Company maintains cash balances at a bank, which at various times 
throughout the year, exceeded the Federal Deposit Insurance Corporation 
(FDIC) limit.
                                    F-10

<PAGE> 
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 1.      BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
             OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

             Major Customers

    The following is a list of the Company's customers which represent 10% or 
more of consolidated net sales (from continuing operations):

<TABLE>
<CAPTION>

                         TOTAL PERCENTAGE OF NET SALES
                             YEAR ENDED OCTOBER 31,
                             ---------------------- 
                                   1996         1995         1994
                                   ----         ----         ----
<S>                                 <C>          <C>          <C>
Elevator Manufacturer.....          10%          11%          10%
Truck Body Manufacturer...          29%          32%          32%

</TABLE>
 
         Use of Estimates
    The preparation of financial statements in conformity with generally 
accepted accounting principles requires Management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during the 
reporting period. Actual results could differ from those estimates.
 
         Reclassifications 
    Certain amounts in the 1995 and 1994 financial statements have been 
reclassified to conform to the 1996 presentation.
 
         Recently Issued Accounting Standards 
    In March 1995, FASB issued Statement  121, "Accounting for the Impairment 
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" 
("Statement"). The Statement established accounting standards for the 
impairment of long-lived assets, certain identifiable intangibles, and 
goodwill related to those assets to be held and used, and for long-lived 
assets and certain identifiable intangibles to be disposed of. The Statement 
requires that long-lived assets and certain identifiable intangibles to be 
held and used by an entity be reviewed for impairment whenever events or 
changes in circumstances indicate that the carrying amount of an asset may 
not be recoverable. Measurement of an impairment loss for long-lived assets 
and identifiable intangibles that an entity expects to hold and use should be 
based on the fair value of the asset. The standard is effective for the 
Company's fiscal year beginning November 1, 1996. The Company has not 
determined the effect, if any, that this Statement will have on its financial 
position or results of operations.
                                    F-11

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 1.      BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
             OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              Recently Issued Accounting Standards (Continued)

    In October 1995, FASB issued SFAS _123, "Accounting for Stock-Based 
Compensation," ("Statement") which provides an alternative method of 
accounting for stock-based compensation arrangements, based on fair value of 
the stock-based compensation utilizing various assumptions regarding the 
underlying attributes of the options and the Company's stock, rather than the 
existing method of accounting for stock-based compensation which is provided 
in Accounting Principles Board Opinion _25, "Accounting for Stock Issued 
To Employees" (APB _25). FASB encourages entities to adopt the fair 
value-based method but does not require adoption of this method. The Standard 
will be effective for the Company's fiscal year beginning November 1, 1996. 
The Company anticipates that it will continue its current accounting policy; 
SFAS _123 is not expected to have a material impact on its financial 
position or its results of operations.
 
    In February 1997, the FASB issued SFAS _128 "Earnings per Share" and
SFAS _129, "Disclosure of Information About Capital Structures" (the
"Statements") which specify new computation, presentation and disclosure
requirements for earnings per share for entities with publicly held common stock
or potential common stock and require additional information to be disclosed for
capital structures of certain companies. The Statements are effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods. The Company has not yet determined the effect the
Statements will have on its financial condition or results of operations.
 
          NOTE 2. FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S
                     PLANS
 
    The Company had net sales of $8,153,689 for the year ended October 31, 
1996 (an 8% increase over the prior year) and a loss from continuing 
operations of $502,294. Working capital decreased from 1995 to 1996 to a 
deficiency of $401,436 at October 31, 1996. This was due primarily to the 
reclassification from long-term debt of the note payable to joint venture of 
$345,000 and mortgage payable of $344,127 to current liabilities. 
Stockholders' equity decreased by $353,431 to $207,056 at October 31, 1996 
due to dividends accrued and a net loss incurred, offset by the issuance of 
common stock and the conversion of certain debt, and accrued interest and 
dividends on common stock.
                                    F-12

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 2.      FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S PLANS
               (Continued)

    During the first quarter of fiscal 1994, the Company entered into a joint 
venture agreement (the "Agreement") with Cadema Corporation ("Cadema"). The 
joint venture was capitalized by Cadema with $350,000 in cash and by Global 
with $1,000 in cash. The joint venture's principal objective is to provide 
the partners with current income by contracting for the design and 
installation of air pollution control equipment in its name in all areas of 
the world outside the United States and its territories. The term of the 
Agreement expires December 31, 1998, unless otherwise extended. Income or 
loss from the joint venture will be allocated 51% to Cadema and 49% to the 
Company. The Agreement allows Global, subject to certain conditions, to 
acquire Cadema's interest in the joint venture for 875,000 shares of Global 
common stock or $350,000 in cash or an amount equal to Cadema's capital 
account, whichever is greater, subject to certain antidilution provisions. 
The Agreement also allows for quarterly distributions of income and capital 
to the joint venture partners. The Company had borrowed approximately 
$364,000 from the joint venture as of October 31, 1996. Because of the sale 
of the Company's Rage Subsidiary (Note 3), it is not anticipated that the 
Joint Venture will provide significant revenue or earnings for the Company in 
the future. In addition, Management is presently negotiating with the other 
party to the Joint Venture with respect to payment by the Company of the loan 
due to the Joint Venture.
 
    In September 1994, the Company completed a 10% Cumulative Convertible 
Senior Preferred Stock offering whereby 7,550 shares were issued. The Company 
realized $662,150 of net proceeds, after placement fees and expenses of 
approximately $93,000. The funds were used to expand the Company's new 
Morrison product line and provide working capital for overall business 
activity. During 1996, 3,000 of such shares were converted to common stock 
and subsequent to October 31, 1996, shareholders representing the remaining 
4,550 shares agreed to convert their preferred shares and related accrued 
dividends to common stock (see Note 7).
 
    Effective December 31, 1994, Renaissance exchanged the $1,600,000 
aggregate amount of 1991 and 1992 convertible debentures for an aggregate of 
16,000 shares of the Company's Series B Cumulative Convertible Senior 
Preferred Stock. At October 31, 1996, such preferred shares, related accrued 
dividends, a related term note and accrued interest were converted to common 
stock (see Note 7).
 
    As of October 31, 1996, the Company was in violation of certain loan 
covenants with Fremont Financial Corporation and has received waivers of such 
noncompliance through November 1, 1997. In addition, the terms of the Loan 
and Security Agreement with Fremont were modified in 1996 and extend payment 
of principal until January 1998.
                                    F-13

<PAGE>
 
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 2.FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S PLANS(Continued)

    In February 1996, the Company's revolving loan payable to Fremont 
Financial Corporation was increased by $200,000. The increase enabled the 
Company to borrow $200,000 in excess of their previously allowed borrowings 
under the revolving loan agreement and provided additional working capital 
for overall business activity. During fiscal 1996, this increase in the 
revolving loan was reclassified as a term loan (Note 5). 
    The Company's ability to meet certain interest and principal payments and 
its working capital needs in order to execute its backlog and generate sales 
volume during fiscal 1997, will be dependent upon the success of the 
Company's efforts to increase sales volume, the profitability of new business 
generated and the ability to secure additional financing. 
    In March 1997, the Company received $150,000 from Renaissance Capital 
Group, Inc. in the form of convertible debt. The debt bears interest at 10% 
per annum. Principal and any accrued and unpaid interest is due and payable 
in March 1999. The loan is convertible to common shares upon the Company 
obtaining a loan secured by certain land and building owned by the Company. 
In addition, between November 1, 1996 and March 25, 1997, shareholders of the 
Company's remaining 4,550 shares of preferred stock agreed to convert such 
preferred stock to common stock (Note 7). The Company is also in negotiations 
for the closing of a $650,000 mortgage on its Hagerstown, Maryland facility, 
which funds are expected to repay certain term debt and to provide working 
capital.
 
NOTE 3.     DISCONTINUED OPERATIONS 
    On April 30, 1996, the Company adopted a formal plan to sell its Rage 
subsidiary to the past President and Chief Executive Officer of the Company 
("Buyer"). On May 22, 1996, the Company completed the sale of all of the 
outstanding stock of Rage. The net assets of Rage consisted primarily of 
accounts receivable, inventories, and property, plant and equipment less 
accounts payable and accrued expenses. The transaction required the Company 
to pay $104,600 in cash, and transfer certain real property and improvements 
with a net book value of approximately $464,000 in exchange for 517,000 
shares of the common stock of the Company owned by the Buyer, cancellation of 
an employment agreement with the Buyer and assumption by the Buyer of the 
Company's mortgage amounting to approximately $349,000 related to the real 
property transferred. The common stock previously owned by the Buyer was 
recorded as treasury stock in the amount of $93,060 based upon the fair value 
of the Company's common stock at the date of the transaction.
                                    F-14

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 3.      DISCONTINUED OPERATIONS (Continued)
    Operating results of Rage, Inc. for the year ended October 31, 1996 are 
shown separately in the accompanying statement of operations as discontinued 
operations for the period November 1, 1995 through April 30, 1996. The 
statements of operations for 1995 and 1994 have been similarly reclassified.
 
    Net sales of Rage Inc. were approximately $1,118,000, $5,001,000 and 
$5,064,000 for the six months ended April 30, 1996 and the years ended 
October 31, 1995 and 1994, respectively. These amounts are not included in 
net sales in the accompanying statements of operations.
 
    The loss from operations of Rage totaled $210,195 for the six months 
ended April 30, 1996. The loss on sale of Rage was $215,406.
 
    Assets and liabilities relating to discontinued operations have been 
reclassified as of October 31, 1995 and have been separately classified in 
the accompanying balance sheet at October 31, 1995 as "net liabilities of 
discontinued operations". Assets and liabilities of Rage sold effective April 
30, 1996 and "net liabilities of discontinued operations" at October 31, 1995 
consisted of:

<TABLE>
<CAPTION> 

                                        APRIL 30,1996  OCTOBER 31, 1995
                                        -------------  ----------------
      <S>                                          <C>            <C>
Accounts receivable, net                  $   364,000    $     814,000
Inventories                                   134,000          142,000
Property, plant and equipment, net            521,000          532,000
Other assets                                  209,000          323,000
                                          -----------    -------------
                                            1,228,000        1,811,000
Accounts payable and accrued expenses       (749,000)      (1,509,000)
Mortgage payable                            (350,000)        (355,000)
                                          -----------    -------------

      Net assets (liabilities)            $   129,000      ($  53,000)
                                          -----------    -------------
                                          -----------    -------------
</TABLE>

    In accordance with the terms of the Common Stock Purchase Agreement (the 
"Agreement"), the Buyer assumed certain mortgage debt on real property and 
improvements sold by Global to the Buyer and has been making the required 
monthly payments. As of October 31, 1996, the Company has not been released 
by the mortgagor from this obligation and, accordingly, has recorded 
"property under agreement of sale" and "mortgage payable" in the amount of 
$344,127 in the accompanying October 31, 1996 balance sheet. The terms of the 
mortgage require monthly principal and interest payments, with a final 
payment due April 30, 1997. Interest is at 9% and the loan is collateralized 
by certain land and building.


                                   F-15

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

NOTE 4.        NOTE PAYABLE
 
    Effective May 28, 1993, Danzer entered into a loan and security agreement 
(the "Agreement") with Fremont Financial Corporation comprised of a revolving 
credit facility (the "Facility") and an equipment term loan (the "Term 
Loan"). The amount available under the Facility is based on a defined 
percentage of eligible accounts receivable and inventory. The Company had 
drawn $942,165 at October 31, 1996. The maximum amounts available under the 
Facility and the term loan are $1,150,000 and $350,000, respectively. 
Borrowings under the Agreement accrue interest at prime plus 4.5% (13.25% at 
October 31, 1996). The Agreement was amended on May 21, 1996, extending the 
term of the Agreement to January 31, 1998 (Note 5).
 
    Under the terms of the Agreement, borrowings are collateralized by real 
estate and Danzer's accounts receivable, inventory and equipment. The 
Agreement provides for certain restrictions including, but not limited to, 
the Company's ability to: a) sell, lease, transfer, exchange or otherwise 
dispose of any assets except in the ordinary course of business; b) enter 
into any merger, consolidation, or acquisition of any other business 
organization; c) guaranty or otherwise become in any way liable with respect 
to the obligations of any third party; or d) change its ownership by greater 
than 10%. The Agreement also restricts: payment of compensation and loans and 
advances to executives, officers, directors and certain others; capital 
expenditures to a specified level; and distributions to Danzer's Parent. For 
the year ended October 31, 1996, the Company was in violation of certain 
covenants and received a waiver through November 1, 1997 for such 
noncompliance.


NOTE 5.     LONG-TERM DEBT
 
          Consolidated long-term debt consists of the following: 
<TABLE>
<CAPTION>
                                                              OCTOBER 31,
                                                              -----------
<S>                                                               <C>                                           <C>         <C>
                                                             1996      1995
                                                             ----      ----

      Revolving note payable to Fremont Financial
        due January 1998 (Note 4)                       $ 942,165  $ 645,045
      Note payable to joint venture; 
        interest-free, principal due December 31, 1996    345,000    345,000
      10% Term Note payable to Renaissance Capital 
       Partners, Ltd. (Renaissance):
       interest payable quarterly commencing March 31,  
       1995; converted to common stock in 1996 (Note 7)         -    211,635
</TABLE>
                                    F-16

<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

 
NOTE 5.        LONG-TERM DEBT (Continued)

<TABLE>
<CAPTION>

                                                                   OCTOBER 31,
                                                                   -----------
<S>                                                           <C>          <C>
                                                            1996          1995
                                                            ----          ----
     Term Loan payable to Fremont Financial; 
   monthly principal payments of $5,833 plus 
   interest at prime plus 4.5%; through May 2000
   (Note 4)                                         $    246,500  $    116,667
Term Loans payable to US Amada, Ltd.; 
   monthly principal payments ranging from $3,450 
   to $9,063 plus interest at 8.5% to 8.75%; final 
   balance due October 1, 1999; collateralized by
   equipment                                             355,242       465,037
Other                                                          -         3,244
                                                      -----------   ----------
                                                       1,888,907     1,786,628
   Less- current portion                               (544,725)     (182,061)
                                                      -----------   ----------

   Total long-term debt                               $1,344,182    $1,604,567
                                                      -----------   ----------
                                                      -----------   ----------
</TABLE>
 
      Maturities on long-term debt as of October 31, 1996 are as follows:
 
<TABLE>
<CAPTION>
      YEARS ENDING
       OCTOBER 31,                                        AMOUNT
       -----------                                        ------
<S>                                                         <C>
         1997                                             $ 544,725
         1998                                             1,148,652
         1999                                               159,018
         2000                                                36,512
                                                         ----------
                                                         $1,888,907
                                                         ----------
                                                         ----------
</TABLE>

    The President of the managing General Partner of Renaissance is also a 
Director of the Company. Interest expense incurred to Renaissance in 1996, 
1995 and 1994 was $21,164, $21,164 and $200,000, respectively.
                                    F-17

<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 6.     INCOME TAXES
 
    The Company files a consolidated income tax return for Federal tax 
purposes. Global Environmental Corp., Global and each of Global's 
subsidiaries file separate state income tax returns. Effective November 1, 
1993, the Company changed its method of accounting for income taxes to comply 
with Statement of Financial Accounting Standards (SFAS) _109, "Accounting for 
Income Taxes." A requirement of SFAS _109 is that deferred tax assets and 
liabilities be recorded for any temporary differences between the financial 
statement and tax bases of assets and liabilities, using the currently 
enacted tax rate expected to be in effect when the taxes are actually paid or 
recovered. In accordance with SFAS _109, the Company elected to adopt this 
statement prospectively in fiscal year 1994 by determining an adjustment for 
the cumulative effect on prior years of the change in method of accounting 
for income taxes. At November 1, 1993, the cumulative effect on prior years 
of adopting SFAS _109 was $-0-.
 
    Total income tax benefit from continuing operations amounted to $-0- in 
each of 1996, 1995 and 1994 (effective tax rates of 0%,in each of the three 
years) compared to income tax benefit of ($171,000), ($185,000), and 
($413,000) computed by applying the statutory rate of 34.0% to continuing 
loss before income taxes. These differences are accounted for as follows:

<TABLE>
<CAPTION>
                                                      1996       
                                                      ----
                                                                 PERCENT OF
                                                     AMOUNT      PRETAX LOSS
                                                     ------      -----------
<S>                                                    <C>        <C>
Computed "expected" tax benefit                    ($171,000)          (34.0%)
Decrease in benefit due to valuation allowance 
         provided for deferred tax assets          171,000             34.0%
                                                  ---------            -----
                                                    $     -               0%
                                                  ---------              ---
                                                  ---------              ---
                                                       1995
                                                       ----
</TABLE>
    
<TABLE>
                                                                   PERCENT OF
                                                       AMOUNT      PRETAX LOSS
                                                      ---------  -------------
<S>                                                      <C>        <C>
Computed "expected" tax benefit                      ($185,000)        (34.0%)
Decrease in benefit due to valuation allowance 
      provided for deferred tax assets                  185,000          34.0%
                                                      ---------          -----
                                                        $     -             0%
                                                      ---------          -----
                                                      ---------          -----
</TABLE>
                                    F-18

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 6.        INCOME TAXES (Continued)

<TABLE>
<CAPTION>
                                                                   PERCENT OF
                                                       AMOUNT      PRETAX LOSS
                                                      ---------  -------------
<S>                                                      <C>        <C>
Computed "expected" tax benefit                      ($413,000)        (34.0%)
Decrease in benefit due to valuation allowance 
      provided for deferred tax assets                  413,000          34.0%
                                                      ---------          -----
                                                        $     -             0%
                                                      ---------          -----
                                                      ---------          -----

</TABLE>
 
    Deferred income tax assets (liabilities) result from differences in the 
recognition of revenues and expenses for income tax and financial reporting 
purposes.
 
    The net deferred tax assets at October 31, 1996 and 1995 include the 
following:
 
<TABLE>
<CAPTION>
                                                           1996         1995
                                                           ----         ----
<S>                                                         <C>           <C>
Deferred tax asset                                   $1,484,000      $770,000
Deferred tax liability                                (173,000)     (125,000)
Valuation allowance for deferred tax asset          (1,311,000)     (645,000)
                                                   ------------    ----------
                                                        $     -       $     -
                                                   ------------    ----------
                                                   ------------    ----------
</TABLE>
 
    The Company has recorded a valuation allowance for its entire net 
deferred tax asset at October 31, 1996 and 1995 since management believes 
that it is more likely than not that the deferred tax asset will not be 
realized.
 
    The tax effect of major temporary differences that gave rise to the 
Company's net deferred tax assets at October 31, 1996 and 1995 are as follows:
 
<TABLE>
<CAPTION>
                                                             1996         1995
                                                             ----         ----
<S>                                                          <C>           <C>
Net operating loss carryforward                        $1,484,000     $770,000
Depreciation                                            (173,000)    (125,000)
                                                     ------------   ----------
                                                       $1,311,000     $645,000
                                                     ------------   ----------
                                                     ------------   ----------
</TABLE>
                                    F-19

<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 6.        INCOME TAXES (Continued)

    As of October 31, 1996, the Company has available Federal net operating 
loss carryforwards of approximately $3,709,000 that may be applied against 
future taxable income. These carryforwards expire at various dates through 
fiscal 2011.
 
NOTE 7.        STOCKHOLDERS' EQUITY
 
    On May 7, 1990, the Company's stockholders approved a stock option plan 
to issue both "qualified" and "non-qualified" stock options. Under the Plan, 
800,000 options to purchase shares of the Company's common stock may be 
issued at the discretion of the Company's Board of Directors. The option 
price per share will be determined by the Company's Board of Directors, but 
in no case will the price be less than 85% of the fair value of the common 
stock on the date of grant. Options under the Plan will have a term of not 
more than ten years with accelerated termination upon the occurrence of 
certain events. As of October 31, 1996 there were 25,000 options outstanding 
with an exercise price of $.48 per share. During the year ended October 31, 
1995, 350,000 options were granted and 280,000 operations were terminated. 
During the year ended October 31, 1995, there were 375,000 options 
outstanding. Exercise prices at October 31, 1995 ranged from $.30 to $.48 per 
share with 200,000 options, 150,000 options and 25,000 options exercisable at 
$.30, $.35, and $.48 per share, respectively. No options were exercised 
during the years ended October 31, 1996 or 1995. During the year ended 
October 31, 1996, no options were granted and 350,000 options were terminated.
 
    In connection with a legal settlement during 1994, the Company issued 
30,770 shares of common stock, par value $.0001 per share, and warrants to 
purchase 75,000 shares of common stock through February 9, 1997 at $1.00 per 
share, subject to adjustment as defined. No warrants have been exercised 
through October 31,1996. Subsequent to October 31, 1996, such warrants 
expired without being exercised.

    In connection with a consulting agreement effective November 2, 1994, the 
Company issued warrants to purchase 100,000 shares of common stock through 
November 1, 1999 at $.50 per share, subject to adjustment as defined. No 
compensation was recorded in connection with the issuance of such warrants. 
No warrants were exercised through October 31, 1996.
 
    In connection with the resignation of the Company's President and Chief 
Executive Officer in 1996, the Company issued warrants to purchase 200,000 
shares of common stock through August 1999 at $.50 per share, subject to 
adjustment as defined. No compensation was recorded in connection with the 
issuance of such warrants. No warrants were exercised through October 31, 
1996.
                                    F-20

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 6.        STOCKHOLDERS' EQUITY (Continued)
 
    During 1994, Global Environmental Corp. completed a private placement 
offering by selling 7,550 shares of its 10,500 authorized shares of 10% 
Cumulative Convertible Senior Preferred Stock (the "10% Senior Preferred 
Stock") at a stated value of $100 per share. The Company raised $662,150, net 
of placement fees of $92,850 as a result of the offering. Commencing 
September 30, 1994, dividends are cumulative, payable quarterly in arrears at 
an annual rate of $10 per share. Total dividends declared and/or accrued were 
$75,504 in each of 1996 and 1995. The 10% Senior Preferred Stock is voting 
and convertible into the Company's Common Stock. Effective April 30, 1995, 
the Company registered the shares of common stock issuable upon conversion of 
the Senior Preferred Stock under the Securities Act of 1933. At October 31, 
1996, 3,000 shares and related accrued dividends were converted at a rate of 
$.25 per share to common stock. Between November 1, 1996 and March 25, 1997, 
the shareholders of the remaining 4,550 shares agreed to convert such shares 
plus accrued dividends to common stock at the same conversion rate of $.25.
 
    Effective December 31, 1994, Renaissance exchanged the $1,600,000 
aggregate amount 12% convertible debentures for an aggregate of 16,000 shares 
of the Company's Series B Cumulative Convertible Senior Preferred Stock (the 
"Series B Stock"), par value $.001 per share, stated value $100 per share. 
The Company raised $1,511,319, net of legal and other costs of $88,681 
incurred in connection with the offering. Commencing December 31, 1994, 
dividends were cumulative, payable quarterly in arrears at an annual rate of 
$10 per share. Total dividends declared and/or accrued during 1996 and 1995 
were $160,000 and $133,333, respectively. On October 31, 1996, Renaissance 
converted the 16,000 shares of Series B Stock, a $211,635 term note (see Note 
5), accrued interest and accrued dividends to common stock at the conversion 
rate of $.25 per share.
 
    The 10% Cumulative Convertible Preferred Stock and the Series B Stock 
required the Company to comply with certain affirmative and negative 
covenants including, but not limited to, the timely filing of financial 
statements. In addition, the covenants limited the Company's ability to issue 
new indebtedness, issue other classes of preferred stock, pay dividends on 
the Company's common stock, purchase equity securities, increase executive 
compensation, enter into liens and acquire new businesses, among other items. 
The Company was also subject to registration requirements under certain 
circumstances. As of October 31, 1996 and 1995, the Company was in violation 
of certain of the above covenants.
 
    In August 1996, the Company issued 1,200,000 common shares for $300,000, 
through a private placement. 1,000,000 shares were issued to a private 
investor and 200,000 shares were issued to Renaissance Capital Group, Inc.
                                    F-21

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 8.         NET LOSS PER SHARE AMOUNTS AND QUARTERLY DATA
 
    Net loss per share is calculated after deducting dividends earned on 
preferred stock of $235,504 in 1996, $208,835 in 1995 and $11,742 in 1994 
from the net loss and dividing by the weighted average number of shares of 
common stock outstanding during the period. The assumed conversions of the 
10% and Series B Cumulative Convertible Senior Preferred Stock at October 31, 
1995 and assumed exercise of stock options and warrants for 1996 and 1995 
have not been considered in the calculations of loss per share, since the 
effect of such conversions/exercises would be antidilutive.
 
    At October 31, 1996, the Company recorded certain adjustments which 
increased its net loss by approximately $390,000 or $.17 per share of which 
approximately $215,000 or $.09 per share related to loss from discontinued 
operations and approximately $175,000 or $.08 per share related to loss from 
continuing operations, and which were material to its fourth quarter results 
of operations. Such adjustments related to inventory, accruals of 
manufacturing costs and accruals of other selling, general and administrative 
expenses.
 
NOTE 9. COMMITMENTS AND CONTINGENCIES
 
    The Company leases certain equipment under operating leases expiring at 
various times through July 2001. Rent expense was approximately $16,000, 
$25,000 and $25,000 for the years ended October 31, 1996, 1995 and 1994, 
respectively. The following is a schedule of future minimum rental payments 
under operating leases as of October 31, 1996:
 
<TABLE>
<CAPTION>
              YEAR ENDING
              OCTOBER 31,                                        AMOUNT
              -----------                                        ------
                  <S>                                             <C>

                  1997                                          $88,000
                  1998                                           62,000
                  1999                                           55,000
                  2000                                           16,000
                  2001                                           11,000
                                                               --------
                                                               $232,000
                                                               --------
                                                               --------
</TABLE>
 
    Certain of the Company's employees are currently represented by a labor 
union, the United Brotherhood of Carpenters and Joiners of America, Local 
Union _340 whose contract is in effect to February 1998.
                                    F-22

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

   NOTE 9.  COMMITMENTS AND CONTINGENCIES (Continued)

    Danzer has a contributory defined benefit pension plan covering all 
eligible employees who have elected to participate in the Plan. It is the 
Company's policy to fund pension costs as determined by the Plan's actuary. 
The weighted average discount rate and expected rate of return on long-term 
assets used in determining the actuarial present value of the projected 
benefit obligation were 7% each for the Plan's year ended December 31, 1996. 
The actuarial information included below, which is as of January 1, 1996, is 
for the Plan's fiscal year ended December 31, 1996, and is the most recent 
available information.

      Pension expense for the year ended December 31, 1996, was as follows:
 
<TABLE>
<S>                                                                  <C>
Benefits earned (service cost)                                      $  17,845
Interest expense on projected benefit obligation                       27,397
Actual return on Plan assets                                         (38,270)
Other items                                                            15,103
                                                                     ---------
                                                                    $  22,075
                                                                     ---------
                                                                     ---------
</TABLE>
 
    A summary of the status of the Plan as of December 31, 1996 is as follows:
 
<TABLE>
<S>                                                                 <C>
Pension benefit obligation:
   Projected benefit obligation:
   Vested                                                         ($435,962)
   Non-vested                                                          (659)
                                                                  ----------
                                                                   (436,621)
                                                                   ---------
Plan assets at fair value                                            300,787
                                                                   ---------
Funded status                                                      (135,834)
Unrecognized gain/(loss)                                             (9,235)
Deferred transition gain/loss                                         63,310
                                                                   ---------
Accrued pension expense                                           ($ 81,759)
                                                                   ---------
                                                                   ---------
</TABLE>
 
    The Company also has a defined contribution 401(k) plan which permits 
voluntary employee contributions up to 15% of compensation and which provides 
Company matching contributions up to 3% of employee compensation. 401(k) plan 
expense for each of the years ended October 31, 1996, 1995 and 1994 was 
approximately $9,000, $13,000 and $12,000, respectively.
                                    F-23

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                  YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994


NOTE 9.        COMMITMENTS AND CONTINGENCIES (Continued)

    On August 25, 1993, Global Environmental Corp. (the "Company") entered 
into a royalty agreement structured as an asset sale and purchase agreement 
(the "Agreement") with Morrison Industries, L.P., DIP, a Delaware Limited 
Partnership, (the "Seller"), to buy certain "Intangible" and "Tangible" 
assets of the Seller, as defined. In consideration of the sale, the Company 
is required to pay monthly to the Seller, 5% of "Qualified Revenues" as 
defined, during years 1 through 5 of the Agreement and 2% of Qualified 
Revenues, up to $2,000,0000 and 5% of Qualified Revenues in excess of 
$2,000,000 during years 6 through 10 of the Agreement. In addition, the 
Agreement stipulates certain annual and quarterly minimum sales levels and 
requires the Seller to enter into a non-compete agreement indefinitely. 
Royalty expenses for 1996, 1995 and 1994 were $100,000, $66,000 and $58,000, 
respectively.
 
    The Company is subject to certain unassserted claims; the probability of 
assertion cannot be determined and the range of any possible loss also cannot 
be determined. In addition, the Rage subsidiary which the Company sold as of 
April 30, 1996, is subject to certain litigation which, if adversely 
concluded, could materially affect Rage's financial position and results of 
its operations. Management of the Company does not believe that any such 
litigation against Rage could adversely affect the Company's financial 
position.
 
NOTE 10.     PARENT COMPANY FINANCIAL STATEMENTS
 
    The financial statements of the Parent Company (Global Environmental 
Corp. or "Corp.") include assets comprised of investments in and advances to 
subsidiaries and property under agreement of sale. All of the Company's 
common and preferred stock and substantial amounts of long-term debt and 
accrued expenses are also recorded on Corp.'s balance sheet. Substantially 
all of Corp.'s equity relates to its investment in its subsidiary.
 
    Since Corp.'s only significant source of revenue and cash to pay interest 
on debt, dividends on preferred stock and corporate overhead results from 
management fees charged to its subsidiaries, and such management fees are 
limited, due to the lack of profitability and positive cash flow of these 
subsidiaries as well as certain restrictions on the ability of these 
subsidiaries to pay distributions or dividends to Corp., available cash to 
pay interest and principal on debt, dividends on preferred stock and/or 
dividends on common stock, is severely constrained.
                                    F-24