UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  AMENDMENT 1
                                   Form 10-K/A
                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the fiscal year ended                         Commission file number: 1-448
December 31, 2001

                                  MESTEK, INC.

             (Exact name of registrant as specified in its charter)

Pennsylvania                                                         25-0661650
                                                                     ----------
(State or other jurisdiction of                               (I. R. S Employer
incorporation or organization)                              Identification No.)

                              260 North Elm Street
                         Westfield, Massachusetts 01085
                    (Address of principal executive offices)

Registrant's telephone number, including area code: 413-568-9571

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

                                                          Name of each exchange
Title of each class                                        on which registered
-------------------                                        -------------------
Common Stock, no par value                              New York Stock Exchange


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, and (2) has been subject to such filing requirements
for the past 90 days.
YES       X                                                      NO__
   --------------------------------------------------------------

The aggregate market value of voting common shares held by non-affiliates of the
registrant as of March 29, 2002, based upon the closing price for the
registrant's common stock as reported in The Wall Street Journal as of such date
was $61,623,005. The number of shares of the registrant's common stock issued
and outstanding as of March 20, 2002 was 8,721,603.


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement relating to the annual meeting of shareholders
of the registrant to be held on May 28, 2002 are incorporated by reference into
Part III hereof and the exhibits to filings referenced on Pages 46 through 49 of
Part IV hereof are incorporated by reference into Part IV hereof.


<PAGE>


                                     PART IV


Item 14 - EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K


The purpose of this amendment is:

        (1)  to file Exhibit 10.28, Audited Financial Statements of CareCentric,
Inc.for 2001, as referenced in Item 14 of Mestek's Form 10K for 2001.

        (2)  to file Exhibit 10.13, Second Amendment dated May 31, 2001 to
Amended and Restated Revolving loans and Foreign Exchange facilities Agreement
between Mestek, Inc. and Fleet National Bank.

        (3)  to file Exhibit 10.25, Stock Purchase Agreement dated July 2, 2001
between Formtek, Inc. as purchaser and Roger Steel, Richard D. Nelson, John B.
Strang, and Vivan Steel as sellers.

        (4)  to file Exhibit 10.26, Asset Purchase Agreement date December 14,
2001 between King Company, United Dominion Industries, Inc. and Mestek, Inc.

        (5)  to file Exhibit 10.27, Participation Agreement dated as of December
31, 2001 by and among John E. Reed, Mestek, Inc. and CareCentric, Inc.

                                      INDEX
                                                                      Pages of
                                                                   this report
------------------------------------------------------------------------------


Independent Auditors' Reports                                          Page 22

Financial Statements:

(a)(1)   Consolidated Balance Sheets as of December 31, 2001 and 2000
                                                               Pages 23 and 24

     Consolidated Statements of Income for the Years
     Ended December 31, 2001, 2000, and 1999                           Page 25

     Consolidated Statements of Shareholders' Equity for
     the Years Ended December 31, 2001, 2000, and 1999                 Page 26

     Consolidated Statements of Cash Flows for the Years
         Ended December 31, 2001, 2000, and 1999                       Page 27

     Notes to the Consolidated Financial Statements        Pages 28 through 47

(a)(2)   Financial Statement Schedules                                 Page 49

     II. Valuation and Qualifying Accounts                             Page 50

     All other financial statement schedules required by Item 14(a)(2) have been
omitted because they are inapplicable or because the required information has
been included in the consolidated financial statements or notes thereto.

(a)(3)   Exhibits

     The Exhibit Index is set forth on Pages 51 through 53

     No annual report to security holders as of December 31, 2001 has been sent
to security holders and no proxy statement, form of proxy or other proxy
soliciting material has been sent by the registrant to more than ten of the
registrant's security holders with respect to any annual or other meeting of
security holders held or to be held in 2002. Such annual report to security
holders, proxy statement or form of proxy will be furnished to security holders
subsequent to the filing of this Annual Report on Form 10-K.


     Separate audited 2001 Financial Statements for CareCentric, Inc. will be
filed as an exhibit under Item 14 (d) as soon as they are publicly disclosed by
CareCentric, Inc.

<PAGE>



  EXHIBIT INDEX

         Those documents followed by a parenthetical notation are incorporated
herein by reference to previous filings with the Securities and Exchange
Commission as set forth below.


Exhibit No.
Description
*************

3.1      Articles of Incorporation of Mestek, Inc., as amended             (H)

3.2      Amended and Restated By-laws of Mestek, Inc. as
                amended through December 12, 2000                          (B)

10.1     Employment Agreement dated January 1, 1982 between Mestek
         and John E. Reed                                                  (A)

10.2     Lease Agreement dated January 1, 2000 between Mestek (lessee) and
         Sterling Realty Trust (lessor); 260 North Elm                     (B)

10.3     Lease dated January 1, 1994 between Mestek (lessee) and
         Sterling Realty Trust (lessor); South Complex                     (D)

10.4     Amended and Restated Lease Agreement dated as of July 1, 1997
         between Mestek, Inc. (lessee) and Rudbeek Realty Corp. (lessor)   (J)

10.5     Amended and Restated Lease Agreement dated as of January 1, 1997
         between Vulcan Radiator Division, Mestek, Inc. (lessee) and
         MacKeeber Associates Limited Partnership (lessor).                (H)

10.6     Loan Agreement dated as of May 1, 1984 among the Connecticut
         Development Authority (the "CDA"), MacKeeber Limited Partnership,
         Vulcan Radiator Corporation and the Promissory Notes thereunder;
         Guaranty of Vulcan Radiator Corporation and Reed National Corp.
         to the Connecticut Bank and Trust Company, NA                     (A)

10.7     Indemnification Agreements entered into between Mestek, Inc. and
         its Directors and Officers and the Directors of its wholly-owned
         subsidiaries incorporated by reference as provided herein, except
         as set forth in the attached schedule                             (C)

10.8     Share Purchase Agreement relating to the acquisition of capital
         stock of Ruscio Brothers Refractory, Ltd. And Rainbow Electronics
         Spotwelding Equipment, Ltd. dated April 29, 1998 by and between
         1291893 Ontario, Inc. as Buyer and
         Domenic Ruscio, et al., as Sellers.                               (K)

10.9     Lease Agreement dated July 1, 1998 between Mestek (lessee) and
         Sterling Realty Trust (lessor); 161 Notre Dame                    (L)

10.10    Mortgage Note dated February 1, 1986 between Arrow United Industries,
         Inc. and Chemical Bank; said Note assumed by Mestek, Inc. in the
         purchase of certain assets of Arrow United Industries, Inc.       (D)

10.11    1996 Mestek, Inc. Stock Option Plan.                              (G)

10.12    Amended and Restated Revolving Loans and Foreign Exchange Facilities
         Agreement between Mestek, Inc. and Bank Boston dated
         July 15, 1997.                                                   (I)

10.13    Second Amendment dated May 31, 2001 to Amended and Restated Revolving
         loans and Foreign Exchange facilities Agreement between Mestek, Inc.
         and Fleet National Bank

10.14    Supplemental Executive Retirement Agreements entered into between
         Mestek, Inc. and certain of its officers.                         (I)

10.15    Lease dated July 1, 1999 between Mestek (Lessee) and
         Sterling Realty Trust (Lessor) for 1st floor-Torrington Building. (M)

10.16    Lease dated July 1, 1999 between Mestek (Lessee) and Sterling Realty
         Trust (Lessor) for 3rd & 4th Floor - Torrington Building.         (M)

10.17    Lease dated October 1, 2000 between Mestek (Lessee) and
         Sterling Realty (Lessor); 1st Floor Torrington Building           (B)

10.18    Bill of Sale dated January 1, 1999 between Mestek (Purchaser) and
         Sterling Realty Company (Seller).                                 (M)

10.19    Bill of Sale dated January 1, 1999 between Mestek (Purchaser) and
         Elizabeth C. Reed Trust (Seller).                                 (M)

10.20    Bill of Sale dated January 1, 2000 between Mestek (Purchaser) and
         Machinery Rental Company (Seller)                                 (M)

10.21    Asset Purchase Agreement dated March 18, 1999 among CTS Corporation,
         Dynamics Corporation of America, and Mestek, Inc.                 (E)

10.22    Second Amended and Restated Agreement and Plan of Merger and
         Investment Agreement dated October 25, 1999 among Simione Central
         Holdings, Inc., MCS, Inc., Mestek, Inc., John E. Reed, Stewart B. Reed,
         and E. Herbert Burk.                                              (F)

10.23    Agreement and Plan of Reorganization by and between
         Formtek Acquisition, Inc., Formtek, Inc., and Met-Coil Systems
         Corporation dated March 13, 2000.                                 (M)

10.24    Stock Purchase Agreement dated September 18, 2000 between Mestek, Inc.
         and Alpha Technologies Group, Inc.                                (B)

10.24.1  Amendment No. 1 dated November 10, 2000 to the Stock Purchase
         Agreement dated September 18, 2000 between Mestek, Inc. and
         Alpha Technologies Group, Inc.                                    (B)

10.25    Stock Purchase Agreement dated July 2, 2001 between Formtek, Inc.
         as purchaser and Roger Steel, Richard D. Nelson, John B. Strang,
         and Vivian Steel as sellers.

10.26    Asset Purchase Agreement dated December 14, 2001 between King Company,
         United Dominion Industries, Inc. and Mestek, Inc.

10.27    Participation Agreement dated as of December 31, 2001 by and among
         John E. Reed, Mestek, Inc. and CareCentric, Inc.

10.28    Audited Financial Statements of CareCentric, Inc. for year ended
         December 31, 2001

11.1    Schedule of Computation of Earnings per Common Share.

22.1    Subsidiaries of Mestek, Inc.

        (A)      Filed as an Exhibit to the Registration Statement 33-7101,
                 effective July 31, 1986

        (B)      Filed as an Exhibit to the Annual Report on Form 10-K for the
                 year ended December 31, 2000

        (C)      Filed as an Exhibit to the Annual Report on Form 10-K for the
                 year ended December 31, 1987

        (D)      Filed as an Exhibit to the Annual Report on Form 10-K for the
                 year ended December 31, 1993

        (E) Filed as an Exhibit to the Current Report on Form 8-k dated April 6,
                 1999.

        (F)      Incorporated by reference from the from the Form 10 file by
                 MCS, Inc. with the Securities and Exchange Commission on
                 October 26, 1999, File No. 000-27829.

        (G)      Filed as an Exhibit to the Quarterly Report on Form 10-Q for
                 the quarter ended September 30, 1996.

        (H) Filed as an Exhibit to the Annual Report on Form 10-K for the year
ended December 31, 1996.

        (I)      Filed as an Exhibit to the Quarterly Report on Form 10-Q for
                 the quarter ended September 31, 1997.

(J) Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1997.

(K) Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998.

(L) Filed as an Exhibit to the Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999.

(M) Filed as an Exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1999.

<PAGE>


REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders and the Board of Directors of CareCentric, Inc.:

We have audited the  accompanying  consolidated  balance sheets of  CARECENTRIC,
INC. (a Delaware  corporation) and subsidiaries as of December 31, 2001 and 2000
and the related  consolidated  statements of  operations,  shareholders'  equity
(deficit),  and cash flows for each of the years in the three year period  ended
December 31, 2001. These financial statements and the schedule referred to below
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion  on these  financial  statements  and  schedule  based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  financial  position  of  CareCentric,   Inc.  and
subsidiaries  as of  December  31,  2001  and  2000  and the  results  of  their
operations  and their cash flows for each of the years in the three year  period
ended  December 31, 2001 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

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


                                             /s/ GRANT THORNTON LLP

Boston, Massachusetts
April 12, 2002



                                       47
<PAGE>

                                         CARECENTRIC, INC.
                                    CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                           <C>                   <C>
                                                                          DECEMBER 31,
                                                              --------------------------------------
                                                                   2001                   2000
                                                              ----------------       ---------------
                                   ASSETS
Current assets:
     Cash and cash equivalents                                    $   201,000           $   362,000
     Accounts receivable, net of allowance for
       doubtful accounts of $1,042,000 and $551,000,
       respectively                                                 4,185,000             8,484,000
     Prepaid expenses and other current assets                        608,000               701,000
     Notes receivable                                                 413,000                     -
                                                              ----------------       ---------------
       Total current assets                                         5,407,000             9,547,000

Purchased software, furniture and equipment, net                    1,533,000             1,957,000
Intangible assets, net                                              5,437,000            23,405,000
Other assets                                                          431,000               211,000
                                                              ----------------       ---------------
       Total assets                                             $  12,808,000          $ 35,120,000
                                                              ================       ===============

        LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
Current liabilities:
     Line of credit                                              $  5,572,000          $  5,996,000
     Notes Payable                                                          -               600,000
     Accounts payable                                               2,185,000             1,156,000
     Accrued compensation expense                                     593,000               616,000
     Accrued liabilities                                            6,574,000             7,447,000
     Customer deposits                                              2,120,000             2,496,000
     Unearned revenues                                              3,981,000             5,001,000
                                                              ----------------       ---------------
       Total current liabilities                                   21,025,000            23,312,000


Accrued liabilities, less current portion                             750,000               128,000

Notes payable long-term                                             5,343,000               600,000

Commitments and contingencies

Shareholders' equity (Deficit):
     Preferred Stock ; 10,000,000 shares authorized
     Series B Preferred, $.001 par value;
       5,600,000  issued and outstanding; liquidation
       value $1.27                                                      6,000                 6,000
     Series C Preferred, $.001 par value;
       850,000  issued and outstanding; liquidation
       value $1.35                                                      1,000                 1,000
     Series D Preferred, $.001 par value;
       398,000  issued and outstanding; liquidation
       value $2.92                                                          -                     -
     Series E Preferred, $.001 par value;
       210,000 issued and outstanding; liquidation
       value $1.00                                                          -                     -
     Common stock, $.001 par value; 20,000,000 shares
       authorized;
       4,371,350 shares issued and outstanding at
          December 31, 2001
       3,849,816 shares issued and outstanding at                       4,000                 4,000
          December 31, 2000

     Additional paid-in capital                                    21,070,000            21,070,000
     Stock warrants                                                 1,000,000             1,000,000
     Accumulated deficit                                         (36,391,000)          (11,001,000)
                                                              ----------------       ---------------
       Total shareholders' equity (Deficit)                      (14,310,000)            11,080,000
                                                              ----------------       ---------------
       Total liabilities and shareholders' equity (Deficit)      $ 12,808,000          $ 35,120,000
                                                              ================       ===============
</TABLE>

See notes to consolidated financial statements



                                       48
<PAGE>

                                                CARECENTRIC, INC.
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S>                                                      <C>                  <C>                   <C>
                                                                         YEARS ENDED DECEMBER 31,
                                                         ---------------------------------------------------------
                                                             2001                  2000                 1999
                                                         --------------       ---------------       --------------
Net revenues                                              $ 20,446,000          $ 19,574,000          $16,648,000

Costs and expenses:
    Cost of revenues                                         8,217,000             8,478,000           10,563,000
    Selling, general and administrative                     10,715,000            10,756,000            4,077,000
    Research and development                                 6,158,000             6,174,000            1,051,000
    Amortization and depreciation                            3,865,000             3,481,000              230,000
    Write down of intangibles                               11,799,000                     -                    -
    Restructuring charge                                       675,000                     -                    -
                                                         --------------       ---------------       --------------
    Total costs and expenses                                41,429,000            28,889,000           15,921,000
                                                         --------------       ---------------       --------------

    Loss from operations                                   (20,983,000)           (9,315,000)             727,000

Other income (expense):
    Other income (expense)                                           -               (6,000)                    -
    Interest expense                                       (1,314,000)             (710,000)                    -
    Interest and other income                                   37,000                74,000               45,000
                                                         --------------       ---------------       --------------
Income (loss) before taxes                               $(22,260,000)         $ (9,957,000)            $ 772,000
                                                         ==============       ===============       ==============

    Income tax benefit (expense)                              (15,000)               154,000            (306,000)
                                                         --------------       ---------------       --------------
Income (loss) from continuing operations                 $(22,275,000)          $(9,803,000)            $ 466,000

Discontinued operations
    Loss on disposal of discontinued operations            (2,632,000)                     -                    -

    Income (loss) from operations of
        discontinued segment before taxes                    (483,000)             (442,000)              251,000

    Applicable tax expense                                           -                     -              100,000
                                                         --------------       ---------------       --------------
Net (loss) income from discontinued operations             (3,115,000)             (442,000)              151,000
                                                         --------------       ---------------       --------------

Net  (loss) income                                       $(25,390,000)         $(10,245,000)            $ 617,000
                                                         ==============       ===============       ==============

Cumulative preferred dividends                               (722,000)             (569,000)                    -

Net (loss) income available to common shareholders       $(26,112,000)         $(10,814,000)            $ 617,000
                                                         ==============       ===============       ==============

(Loss) income per share - basic and diluted
    From continuing operations                              $   (5.21)            $   (2.87)             $   0.31
Weighted average common shares -
    basic and diluted                                        4,272,000             3,418,000            1,490,000
                                                         ==============       ===============       ==============
Net (loss) income per share - basic and diluted
   From discontinued operations                            $   (0.73)            $   (0.13)             $   0.10
Weighted average common shares -
    basic and diluted                                        4,272,000             3,418,000            1,490,000
                                                         ==============       ===============       ==============
Net (loss) income per share - basic and diluted             $   (5.94)            $   (3.00)             $   0.41
Weighted average common shares -
    basic and diluted                                        4,272,000             3,418,000            1,490,000
                                                         ==============       ===============       ==============

Net loss (income) per share - basic and diluted available
    to common shareholders                                  $   (6.11)            $   (3.16)             $   0.41

Weighted average common shares -
    basic and diluted                                        4,272,000             3,418,000            1,490,000
                                                         ==============       ===============       ==============

</TABLE>
                 See notes to consolidated financial statements



                                       49
<PAGE>



            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, 1999
<TABLE>
<CAPTION>
<S>                          <C>         <C>         <C>         <C>        <C>         <C>        <C>           <C>
                                     COMMON                PREFERRED        ADDITIONAL                              TOTAL
                             ----------------------- ----------------------  PAID-IN               ACCUMULATED   SHAREHOLDERS'
                               SHARES      STOCK      SHARES      STOCK      CAPITAL    WARRANTS     DEFICIT        EQUITY
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------

Balance at December 31, 1998      1,000     $ 1,000          -     $     -   $ 230,000      $   - $(1,212,000)   $ (981,000)
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------

Net income                                                                                             617,000       617,000

Distribution of ProfitWorks
  Division                                                                      80,000                                80,000
Contribution to Paid in
  Capital                                                                      950,000                               950,000
Dividend paid                                                                                        (161,000)     (161,000)
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------
Balance at December 31, 1999      1,000      $1,000          -     $     -  $1,260,000      $   -   $(756,000)    $  505,000
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------

MCS, Inc. shares eliminated
  in merger                     (1,000)     (1,000)                                                                  (1,000)

CareCentric, Inc.
  Shares post merger, $.001
  par value                   3,850,000      4,000           -           -  19,810,000  1,000,000                 20,814,000

Issuance of $.001 par value
  preferred stock in
  connection with merger              -           -  6,848,000       7,000                                   -         7,000
Series B, 5,600,000 shares
Series C,  850,000 shares
Series D,  398,000 shares                                                -

Net loss                                                                                           (10,245,000)  (10,245,000)
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------
Balance at December 31, 2000  3,850,000      $4,000  6,848,000     $ 7,000  21,070,000  1,000,000  (11,001,000)    11,080,000
                             ----------- ----------- ---------- ----------- ----------- ---------- ------------  -------------

Issuance of $.001 par value
  common stock                  593,000                                                                                    -

Cancellation of $.001 par
  value common stock           (72,000)                                                                                    -

Issuance of $.001 par value
  Series E preferred stock,
  210,000 shares                                             -           -                                                 -

Net loss                                                                                           (25,390,000)  (25,390,000)
                             ----------- ----------- ---------- ---------- ----------- ---------- ------------ --------------
Balance at December 31, 2001  4,371,000      $4,000  6,848,000     $ 7,000 $21,070,000 $1,000,000 $(36,391,000) $(14,310,000)
                             =========== =========== ========== ========== =========== ========== ============ ==============
</TABLE>
                 See notes to Consolidated Financial Statements


                                       50
<PAGE>


                                               CARECENTRIC, INC.
                                     CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
<S>                                                    <C>                <C>                 <C>
                                                                       YEARS ENDED DECEMBER 31,
                                                       ---------------------------------------------------------
                                                            2001                2000                1999
                                                       ----------------   -----------------   ------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income                                         $(25,390,000)     $  (10,245,000)        $     617,000


ADJUSTMENTS  TO  RECONCILE  NET (LOSS)  INCOME TO NET
  CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES:
    Provision for doubtful accounts                             500,000             538,000                    -
    Amortization and depreciation                             4,252,000           3,960,000              240,000
    Loss on discontinued operations                           2,632,000                   -                    -
    Write down of intangibles                                11,799,000                   -                    -

CHANGES IN ASSETS AND LIABILITIES, NET OF
  ACQUISITIONS:
    Accounts receivable                                       2,101,000           (929,000)            (205,000)
    Prepaid expenses and other current assets                    90,000             159,000              115,000
    Other assets                                                138,000           1,122,000            (983,000)
    Accounts payable                                          1,447,000         (2,684,000)              281,000
    Accrued compensation                                       (23,000)            (88,000)            (395,000)
    Accrued liabilities                                        (26,000)           (730,000)              557,000
    Customer deposits                                         (376,000)             949,000            (270,000)
    Unearned revenues                                       (1,020,000)             726,000            (242,000)
                                                       ----------------   -----------------   ------------------
         Net cash used in operating activities              (3,876,000)         (7,222,000)            (285,000)
                                                       ----------------   -----------------   ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Assets and liabilities disposed of                             (16,000)                   -                    -
Purchase of software, furniture and equipment                 (327,000)           (658,000)            (597,000)
                                                       ----------------   -----------------   ------------------
         Net cash used in investing activities                (343,000)           (658,000)            (597,000)
                                                       ----------------   -----------------   ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received in connection with MCS merger                           -           3,547,000                    -
Capital contribution from former parent Mestek to MCS                 -                   -            1,030,000
Payment on notes payable                                              -           (150,000)                    -
Proceeds from notes payable                                           -             600,000                    -
Increase (decrease) in line of credit                         4,058,000           4,198,000                    -
Dividends paid (to Mestek by MCS)                                     -                   -            (161,000)
                                                       ----------------   -----------------   ------------------
         Net cash provided by  financing
           activities                                         4,058,000           8,195,000              869,000
                                                       ----------------   -----------------   ------------------

         Net change in cash and cash equivalents              (161,000)             315,000             (13,000)

Cash and cash equivalents, beginning of period                  362,000              47,000               60,000
                                                       ----------------   -----------------   ------------------

Cash and cash equivalents, end of period                   $    201,000        $    362,000         $     47,000
                                                       ================   =================   ==================
</TABLE>

                 See notes to consolidated financial statements




                                       51
<PAGE>


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MCS AS DEEMED ACQUIRER OF CARECENTRIC, INC.

     On March 7, 2000,  CareCentric,  Inc.  (formerly  known as Simione  Central
Holdings  Inc.)  ("CareCentric")  and MCS, Inc.  ("MCS") merged in a transaction
("the  CareCentric/MCS  merger",  also  described as "the  MCS/Simione  merger")
accounted for as a reverse  acquisition  for financial  reporting  purposes.  In
connection with the  acquisition,  CareCentric  issued  1,489,853  shares of its
common  stock in  exchange  for all the  outstanding  common  stock of MCS,  and
thereby,  the former  shareholders of MCS acquired control of CareCentric.  As a
result,  for  financial  reporting  purposes  MCS is  considered  the  acquiring
company; hence, the historical financial statements of MCS became the historical
financial  statements  of  CareCentric  and include the results of operations of
CareCentric only from the effective acquisition date.

     The weighted average common shares for the year ended December 31, 2000 are
recast in the accompanying  Consolidated Statements of Operations to give effect
to the 1,489,853 shares of CareCentric  common stock that were issued to the MCS
shareholders in connection with the  CareCentric/MCS  merger on March 7, 2000 as
though such shares had been  outstanding  for the entire period.  For the period
from  January 1, 2000  through  March 6, 2000,  therefore,  1,489,853  shares of
issued and  outstanding  CareCentric  common stock are deemed to be owned by the
MCS  shareholders.  For the period from March 7, 2000 through December 31, 2000,
there were 3,849,816 total shares of issued and outstanding Company common stock
(after giving effect to the CareCentric/MCS merger). The weighted average shares
for the year  ended  December  31,  1999 are also  recast to give  effect to the
1,489,853  shares  of  CareCentric  common  stock  that  were  issued to the MCS
shareholders  pursuant to the  CareCentric/MCS  merger as though such shares had
been outstanding for the entire period.

BASIS OF PRESENTATION

     The consolidated  financial  statements prepared by the Company include the
results of operations of the parent  company and its wholly owned  subsidiaries.
All inter-company balances and transactions have been eliminated.

     These financial  statements do not include any adjustments  relating to the
recoverability and classification of recorded asset amounts or classification of
liabilities  that might be necessary should the Company be unable to continue to
operate  in the  normal  course  of  business.  See Note 17 to the  accompanying
Consolidated Financial Statements.

     Certain prior period amounts have been  reclassified to conform to the 2001
financial statement presentation of discontinued operations.

DESCRIPTION OF BUSINESS

     The Company is a provider  of  information  technology  systems and related
services and consulting  services  designed to enable home health care providers
to more  effectively  operate their  businesses  and compete in the  prospective
payment system (PPS) and managed care  environments.  The Company's  focus is to
help home health care  providers  streamline  their  operations and better serve
their patients.  CareCentric offers several  comprehensive  software  solutions.
Each of these software solutions is designed to enable customers to generate and
utilize  comprehensive  financial,  operational  and  clinical  information.  In
addition to its software  solutions and related software support  services,  the
Company's home health care consulting  services  assist  providers in addressing
the challenges of reducing costs,  maintaining quality,  streamlining operations
and  re-engineering   organizational  structures,  as  well  as  assisting  with
regulatory compliance and merger and acquisition due diligence.

                                       52
<PAGE>

MANAGEMENT ESTIMATES

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States 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  as well as the  reported  amounts  of  revenues  and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

REVENUE RECOGNITION

     The Company  recognizes  revenue  under SOP 97-2.  The  Company  recognizes
software  license revenue when the following  criteria are met: (1) a signed and
executed contract is obtained; (2) delivery has occurred; (3) the license fee is
fixed  and  determinable;   (4)  collection  is  probable;   and  (5)  remaining
obligations  under the license  agreement are immaterial.  The Company sells and
invoices software  licenses and maintenance fees as separate contract  elements,
except  with  respect to first year  maintenance  which is sold in the form of a
bundled turnkey system.  The Company has established  vendor specific  objective
evidence related to the value of maintenance fees. Where applicable, the Company
uses the residual value method to allocate software revenue between licenses and
first year maintenance.

     Revenues are derived from the licensing and sub-licensing of software,  the
sale of computer hardware, accessories and supplies, implementation and training
products  and  services,  forms and case plans,  and  software  maintenance  and
support  services.  For the year ended December 31, 2001,  the Company  recorded
total revenues of $20.4  million.  The Company's core product lines of STAT2 and
MestaMed  accounted  for 28.0% and 38.3%  respectively  of the $20.4  million in
revenues.

     To the extent that  software and  services  revenues  result from  software
support,  implementation,  training  and  technical  consulting  services,  such
revenues  are  recognized  monthly as the related  services are rendered or, for
software support revenues, over the term of the related agreement. To the extent
that  software and services  revenues  result from software  licenses,  computer
hardware and third-party  software  revenues,  such revenues are recognized when
the related products are delivered and  collectability  of fees is determined to
be probable, provided that no significant obligation remains under the contract.
Limited amounts of revenues derived from the sale of software licenses requiring
significant modification or customization are recorded based upon the percentage
of completion method using labor hours or contract milestones.  Software support
or  maintenance  allows  customers  to  receive  unspecified   enhancements  and
regulatory data updates in addition to telephone support.

     Third-party software and computer hardware revenues are recognized when the
related  products  are  shipped.   Software  support  agreements  are  generally
renewable  for one-year  periods,  and revenue  derived from such  agreements is
recognized  ratably  over  the  period  of  the  agreements.   The  Company  has
historically  maintained high renewal rates with respect to its software support
agreements. The Company generally charges for software implementation,  training
and technical  consulting services as well as management  consulting services on
an hourly or daily  basis.  The Company is now  offering  "tiered  pricing"  for
implementation  of new  systems  whereby  the  customer  pays a fixed  fee for a
certain  level of  packaged  services  and daily  fees for  services  beyond the
package.

     Revenues for post-contract customer support are recognized ratably over the
term of the support period,  which is typically one year. Post contract customer
support  fees  typically  cover  incremental  product  enhancements,  regulatory
updates  and  correction  of  software  errors.  Separate  fees are  charged for
significant product  enhancements,  new software modules,  additional users, and
migrations to different operating system platforms.

     Subsequent to delivery, the Company frequently delivers a variety of add-on
software and hardware components.  Revenues from these sales are recognized upon
shipment.

     In addition to software  licenses,  software  maintenance and support,  and
related hardware, the Company also provides computer-based training, CD-ROMs and
a number of ancillary  services  including on site  implementation and training,
classroom training,  consulting and "premium" and after-hours support.  Revenues
from such  products  and services are  recognized  monthly as such  products are
delivered and such services are performed.

                                       53
<PAGE>

     Unbilled  receivables  typically represent revenues from ancillary services
performed  and earned in the  current  period but not  billed  until  subsequent
periods,  usually within one month.  Unearned revenues  represent amounts billed
for which revenue recognition has not yet occurred.


PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

     Purchased   software,   furniture   and  equipment  are  carried  at  cost.
Depreciation and amortization are computed using the  straight-line  method over
the estimated  useful lives of the assets.  When assets are retired or otherwise
disposed of, the cost and related accumulated  depreciation are removed from the
accounts and any resulting gain or loss is reflected in income for the period.


SOFTWARE DEVELOPMENT EXPENSES

     Costs  incurred to  establish  the  technological  feasibility  of computer
software  products  are  expensed  as  incurred.  The  Company's  policy  is  to
capitalize  costs  incurred  between  the  point of  establishing  technological
feasibility and general release only when such costs are material. For the years
ended December 31, 2001,  2000,  1999,  the Company had no capitalized  computer
software and development costs.

CASH EQUIVALENTS

     All highly liquid investments  purchased with an original maturity of three
months or less are considered to be cash equivalents.


INTANGIBLE ASSETS AND LONG-LIVED ASSETS

     Statement of Financial  Accounting  Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of"  requires  impairment  losses to be  recorded on  long-lived  assets used in
operations when indicators of impairment are present and the  undiscounted  cash
flows  estimated  to be  generated  by those  assets  are less than the  asset's
carrying amount.  The application of SFAS No. 121 resulted in an impairment loss
of $11.8 million  recorded in the fourth  quarter of 2001,  see Note 7. Prior to
the   impairment   adjustment,   the   intangible   assets   arising   from  the
CareCentric/MCS  merger were amortized using the  straight-line  method over the
estimated  useful lives of the related assets as more fully disclosed in Notes 6
and 7. The  measurement of the recorded  impairment was based upon comparing the
projected  undiscounted  future cash flow from the use of the assets against the
unamortized carrying value of the assets in the financial statements.

     Effective  July 1,  2001,  the  Company  adopted  SFAS No.  141,  "Business
Combinations"  and SFAS No. 142,  "Goodwill  and  Intangible  Assets in 2001" is
effective  January 1, 2002 and SFAS No. 144,  "Accounting  for the Impairment or
Disposal  of  Long-Lived  Assets,"  is  effective  January  1,  2002.  These new
standards  supersedes the Company's  current  accounting  for Intangible  Assets
under  SFAS  No.  121 as  discussed  below  in  the  section  Recent  Accounting
Pronouncements.


INCOME TAXES

     The Company  accounts  for income  taxes using the  asset/liability  method
which  requires  recognition  of  deferred  tax  liabilities  and assets for the
expected future tax consequences of temporary  differences between the financial
statement carrying amount and the tax bases of assets and liabilities.

                                       54
<PAGE>

NET (LOSS) EARNINGS PER SHARE

     The Company calculates earnings per share under SFAS No. 128, "Earnings Per
Share."  Basic  earnings  per share  exclude  any  dilutive  effects of options,
warrants and convertible  securities.  Diluted  earnings per share for the years
2001 and 2000 exclude the effects of options,  warrants and conversion rights as
they would be anti-dilutive, and as a result, basic and diluted earnings are the
same for the years 2001 and 2000.  For the year 1999,  there were no potentially
dilutive instruments outstanding.

<TABLE>
<CAPTION>
<S>                                             <C>                    <C>                    <C>
                                                               FOR YEAR ENDED DECEMBER 31,
                                                ----------------------------------------------------------
                                                     2001                   2000                 1999
                                                ---------------        ---------------        ------------
     Numerator:
        Net (loss) income after cumulative
          deferred dividends                     $(26,112,000)          $(10,814,000)           $ 617,000
                                                ===============        ===============        ============

     Denominator:
        Denominator for basic and diluted
           earnings per share- weighted -
           average shares                            4,272,000              3,418,000           1,490,000
                                                ===============        ===============        ============

     Net (loss) income per share - basic
        and diluted for common shareholders        $   (6.11)             $   (3.16)            $   0.41
                                                ===============        ===============        ============
</TABLE>


STOCK BASED COMPENSATION

     Employee  stock  options  are  accounted  for under  SFAS No.  123 (and its
related  interpretations)  which allows the use of Accounting  Principles  Board
Opinion  No.  25,  "Accounting  for Stock  Issued  to  Employees"  which  allows
providing  disclosure  of  compensation  cost - see Note 12 to the  Consolidated
Financial Statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  following  methods  and  assumptions  were  used  by  the  Company  in
estimating its fair value disclosures for financial instruments:

     Cash and cash  equivalents:  The carrying  amounts  reported in the balance
sheet for cash and cash equivalents approximate their fair value.

     Notes  receivable and payable:  The carrying amounts of the Company's notes
receivable and payable approximates their fair value.

RECENT ACCOUNTING PRONOUNCEMENTS

     In 1998,  the  Financial  Accounting  Standards  Board  issued SFAS No. 133
"Accounting for Derivative  Instruments and Hedging Activities." SFAS No. 133 is
effective for the Company's first quarter of the fiscal year ending December 31,
2001.  The  adoption  of SFAS No.  133 did not  have a  material  impact  on the
Company's financial position or results of operations.

     On December 3, 1999, the SEC released Staff  Accounting  Bulletin 101, (SAB
101) "Revenue  Recognition in Financial  Statements".  This bulletin established
more clearly  defined  revenue  recognition  criteria than  previously  existing
accounting  pronouncements.  On June 26, 2000, the SEC released SAB 101B,  which
delayed the  required  implementation  of SAB 101 until no later than the fourth
quarter of fiscal years ending  December 31, 2000.  The effects of this bulletin
were not material to its financial position, results of operations or cash flow.

                                       55
<PAGE>

     The  Financial  Accounting  Standards  Board  (FASB)  issued  SFAS No. 141,
Business  Combinations and SFAS No. 142, Goodwill and Intangible Assets in 2001.
SFAS No. 141 is effective for all business combinations completed after June 30,
2001.  SFAS No. 142 is effective for fiscal years  beginning  after December 15,
2001; however,  certain provisions of this Statement apply to goodwill and other
intangible  assets acquired  between July 1, 2001 and the effective date of SFAS
No. 142. Major  provisions of these Statements and their effective dates for the
Company are as follows: (i) all business  combinations  initiated after June 30,
2001 must use the purchase method of accounting.  The pooling of interest method
of accounting is prohibited  except for  transactions  initiated  before July 1,
2001, (ii) intangible assets acquired in a business combination must be recorded
separately from goodwill if they arise from contractual or other legal rights or
are separable from the acquired entity and can be sold,  transferred,  licensed,
rented or exchanged, either individually or as part of a related contract, asset
or  liability,  (iii)  goodwill  and  intangible  assets with  indefinite  lives
acquired after June 30, 2001, will not be amortized  (effective January 1, 2002,
all previously  recognized  goodwill and intangible assets with indefinite lives
will no longer be  subject to  amortization),  (iv)  effective  January 1, 2002,
goodwill  and  intangible  assets  with  indefinite  lives  will be  tested  for
impairment  annually and whenever  there is an impairment  indicator and (v) all
acquired goodwill must be assigned to reporting units for purposes of impairment
testing and segment reporting. Following the accounting for impairment discussed
below,  which has been made under the rules of SFAS 121,  the  Company  believes
that the effect of  adopting  SFAS No. 141 and 142 will be limited to changes in
amortization  expense for periods  after  December 31, 2001.  Additionally,  the
assembled workforce intangible asset will be recharacterized as goodwill,  which
will not be amortized under the rules of SFAS No. 142.

     On  October  3,  2001,  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment  or Disposal  of  Long-Lived  Assets,"  that  replaced  SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To
Be Disposed  Of." The primary  objectives  of this  project  were to develop one
accounting  model  based  on the  framework  established  in  SFAS  No.  121 for
long-lived  assets  to be  disposed  of by  sales  and  to  address  significant
implementation issues. The accounting model for long-lived assets to be disposed
of by sale applies to all long-lived assets,  including discontinued operations,
and replaces the  provisions of Account  Principles  Board (APB) Opinion no. 30,
Reporting Results of  Operations-Reporting  the Effects of Disposal of a Segment
of a Business, for the disposal of segments of a business. SFAS No. 144 requires
that those long-lived assets be measured at the lower of carrying amount or fair
value  less  cost to sell,  whether  reported  in  continuing  operations  or in
discontinued  operations.  Therefore,  discontinued operations will no longer be
measured at net realizable  value or include  amounts for operating  losses that
have not yet occurred.  The provisions of SFAS No. 144 will apply to the Company
effective  January 1, 2002.  The Company is  currently  reviewing  the impact of
these provisions.


NOTE 2 -- DISCONTINUED OPERATIONS

     The discontinued operations reported in the Company's results of operations
for the year ending December 31, 2001 relate to the Company's Simione Consulting
segment which was sold on September 28, 2001. The Consulting business,  previous
to its sale, was the Company's  only  separately  reported  segment of business.
Accordingly,  the Company no longer reports segment information.  The Consulting
business  segment was discontinued  through a transaction  which sold certain of
the assets of the Company's wholly-owned subsidiary,  Simione Consulting,  Inc.,
to Simione  Consultants,  L.L.C.  ("Simione"),  which is owned and controlled by
William  Simione,  Jr., a director  of the  Company.  The total  sales price was
approximately  $2.0  million  plus the  assumption  of  certain  liabilities  by
Simione.  The Company's net pre-tax loss on the disposal was approximately  $2.6
million and resulted from a write-off of the intangible  assets  associated with
the  Consulting  segment as  identified at the merger date of March 7, 2000 with
MCS.

     Summarized financial information for the discontinued Consulting segment is
as follows:

                                       56
<PAGE>

                                                               000'S
                                                       ----------------------
                                                          2001       2000
                                                       ----------- ----------
Operating Revenue                                          $3,417     $5,393

(Loss) before Provision for Income Taxes                    (484)      (442)

(Loss) from Discontinued Operations
   Net of Income Tax                                        (484)      (442)

Current Assets                                                 --      1,033
Total Assets                                                   --      4,472

Net Assets of Discontinued Operations                       $  --     $1,643

     The discontinued operations reported in the Company's results of operations
for the year ending December 31, 1999 relate to MCS's Profitworks  segment which
was  distributed  to MCS's former parent  company,  Mestek Inc., on September 1,
1999.


NOTE 3 -  RESTRUCTURING CHARGE

     A  restructuring  charge  of  $675,000  (including  terminated  leases  and
contracts of $244,000 and severance of $431,000,  respectively)  was incurred in
April 2001 as the  result of the  Company  approving  a plan to close one remote
support office and to downsize the workforce at its remaining facilities.  As of
December 31, 2001,  that plan was fully completed and the  restructuring  charge
was completely expended.


NOTE 4 - CARECENTRIC/MCS MERGER

     On March 7, 2000, MCS completed the merger with CareCentric, Inc. (formerly
known as Simione  Central  Holdings Inc.)  ("CareCentric").  CareCentric  issued
1,489,853  shares of common stock to MCS stockholders in exchange for all of the
outstanding  shares of MCS common stock. This number of shares has been adjusted
to reflect a one-for-five  reverse stock split that was completed by CareCentric
immediately  prior to the merger.  In connection with the closing of the merger,
Mestek  invested $6.0 million in  CareCentric in exchange for 5.6 million shares
of Series B preferred stock and warrants to purchase  400,000 shares (on a split
adjusted  basis) of  CareCentric  common stock and $0.87 million in exchange for
170,000 shares of Series C Preferred Stock.

     As required by Generally Accepted Accounting Principles (GAAP), the effects
of the merger on the Company's  assets and  liabilities  have been excluded from
the operating section of the cash flow statement for reporting purposes.

     Pro-forma unaudited results assuming the merger took place as of January 1,
1999, and further assuming that the acquisition of CareCentric  Solutions,  Inc.
by CareCentric on August 12, 1999 took place on January 1, 1999, are as follows:

                                       57
<PAGE>

<TABLE>
<CAPTION>
<S>                                                         <C>                     <C>
                                                                   FOR YEAR ENDED DECEMBER 31,
                                                                  2000                    1999
                                                            -----------------       ------------------
Revenue                                                       $   23,586,000           $   35,221,000
(loss) continuing operations                                  $ (11,654,000)           $ (12,066,000)
(loss) discontinued operations                                $            -           $       15,100
(loss) per share -continuing basic and diluted                $       (3.41)           $       (8.10)
(loss) per share -discontinuing basic and diluted             $         0.00           $         0.64
Net (loss) per share - basic and diluted                      $       (3.41)           $       (7.45)
</TABLE>


NOTE 5 - NOTES RECEIVABLE

     The Company has certain Notes  Receivable of varying  maturities which have
resulted from the sale of the assets of the Consulting  segment,  financing to a
customer for purchase of a new software system,  and the employment  contract of
Mr. Jack Arthur,  former Senior Vice  President of Information  Technology.  The
Consulting  segment  Note  Receivable  is due  from  Mr.  William  Simione  Jr.,
currently a Director  of the  Company,  and the  President  and Chief  Executive
Officer of the acquirer of the Consulting business, Simione Consulting, LLC, and
past Chief Executive  Officer of the Consulting  segment when it was part of the
Company.  The Customer note occurred in the normal course of business.  The Note
receivable  from Mr. Jack Arthur was the final balance  resulting from a term in
Mr. Arthur's employment  agreement with the Company. Mr. Arthur's employment was
terminated  during 2001 and the balance of the note was  forgiven as part of the
restructuring charge discussed in Note 3 above.

     The amounts and term of each note is summarized in the table below.

                                           NOTES RECEIVABLE
                           -------------------------------------------------
                                                       CUSTOMER
                           CONSULTING   MR. ARTHUR       NOTE       TOTAL
                           -----------  ------------   ---------  ----------
Balance 12-31-00                    -      $157,000           -    $157,000
                           ===========  ============   =========  ==========
Balance 12-31-01             $707,000             -    $137,000    $844,000
                           ===========  ============   =========  ==========

Interest Rate                   8.50%         7.00%       5.65%

Obligation Term

Principal amounts due
        2002                 $298,000             -    $115,000    $413,000
        2003                 $215,000             -     $22,000    $237,000
        2004                 $194,000             -           -    $194,000
                           -----------  ------------   ---------  ----------
                             $707,000       $    --    $137,000    $844,000
                           ===========  ============   =========  ==========


NOTE 6 - PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

     Purchased software, furniture and equipment consisted of the following:

                                       58
<PAGE>
                                                              DEPRECIATION
                                DECEMBER        DECEMBER       ESTIMATED
                                31, 2001        31, 2000      USEFUL LIVES
                               ------------    ------------   -------------

Furniture and Fixtures         $ 1,428,000      $1,551,000      10 years
Computer equipment and
  purchased software             6,237,000       6,050,000      5 years
                               ------------    ------------
                                 7,665,000       7,601,000

Accumulated depreciation       (6,132,000)     (5,644,000)
                               ------------    ------------

                               $ 1,533,000     $ 1,957,000
                               ============    ============


NOTE 7 - INTANGIBLE ASSETS

     As a  result  of the  merger  with  MCS  on  March  7,  2000,  the  Company
capitalized  $26.5 million of  intangible  assets.  Those assets were  amortized
according to various lives ranging from five to nine years.  In accordance  with
Financial  Accounting  Standard No. 121, the Company is required to periodically
review the value of its  intangible  assets.  During the fourth quarter of 2001,
the Company's  analysis and review,  utilizing the  methodology of SFAS No. 121,
resulted in an $11.8 million  impairment  loss of the  intangible  assets of the
Company.  The major  reasons  for the  impairment  were new  technologies  being
integrated in the  Company's  current and future  products  causing its existing
product platforms to have reduced future revenue generation  capability,  and an
expectation that immediate  opportunities  for new software sales are lower than
were forecasted at the time of the merger with MCS.

     The following table  summarizes the Company's  changes in account  balances
for its Intangible Assets during the year ended December 31, 2001.

<TABLE>
<CAPTION>
<S>                        <C>            <C>            <C>            <C>            <C>            <C>
                                                                                        12/31/01
                             ORIGINAL       ASSETS        IMPAIRMENT    ACCUMULATED     NET BOOK      AMORTIZATION
                               COST        DISPOSED       WRITE-DOWN    AMORTIZATION      VALUE          PERIOD
                           -------------  ------------   -------------  -------------  -------------  --------------
Developed technology        $10,650,000       $     -    $(4,220,000)   $(2,441,000)    $ 3,989,000      8 years
Customer base                 1,700,000     (510,000)               -      (242,000)       $948,000      9 years
Assembled workforce           2,300,000     (422,000)       (941,000)      (437,000)        500,000      5 years
Goodwill                     11,851,000   (2,484,000)     (6,639,000)    (2,728,000)              -            -
                           -------------  ------------   -------------  -------------  -------------
                            $26,501,000   $(3,416,000)   $(11,800,000)  $(5,848,000)     $5,437,000
                           =============  ============   =============  =============  =============

</TABLE>

                                       59
<PAGE>

NOTE 8 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
<TABLE>
<CAPTION>
<S>                                                        <C>                <C>
                                                           DECEMBER 31,         DECEMBER
                                                               2001             31, 2000
                                                           --------------     -------------
SHORT TERM:
Line of Credit                                                $5,572,000        $5,996,000
Note Payable  - Mestek                                                 -           600,000
                                                           --------------     -------------
                                                              $5,572,000        $6,596,000
                                                           ==============     =============
LONG TERM:
Convertible Note Payable - B.C. O'Donnell                      $ 600,000         $ 600,000
Convertible Note Payable - J.E. Reed (1)                       3,500,000                 -
Note Payable  - Mestek                                         1,019,000                 -
Note Payable  - Mestek Capitalized Interest                       40,000                 -
Note Payable  - J.E. Reed Capitalized interest                   184,000                 -
                                                           --------------     -------------
                                                              $5,343,000         $ 600,000
                                                           ==============     =============
</TABLE>

(1)  Includes Mestek's participation in the J.E. Reed Facility

Line of Credit:

     On July 12, 2000, the Company entered into a $6.0 million Loan and Security
Agreement  facility  with  Wainwright  Bank and Trust  Company  (the  Wainwright
Facility),  a commercial  bank, under which the Company granted a first priority
position on substantially all of its assets as security. The Wainwright Facility
was  used to pay off the  line of  credit  with  Silicon  Valley  Bank,  certain
short-term  loans from Mestek,  Inc. (a related party,  See Note 14), and a loan
from David O. Ellis.  Borrowings under the Wainwright  Facility accrue interest,
at the bank's  prime rate per annum,  require  monthly  payments of interest and
mature on July 12, 2002. The Company's obligations under the Wainwright Facility
are  guaranteed  by Mestek in  consideration  of which the  Company has issued a
warrant to Mestek to purchase  104,712  shares of the Company's  common stock as
more fully explained in Note 12 to these Financial Statements.

Convertible Note Payable - Barrett C. O'Donnell:

     On November 11, 1999,  Simione borrowed  $500,000 from Barrett C. O'Donnell
and  $250,000  from David O. Ellis,  both on an  unsecured  basis,  and executed
promissory  notes in  connection  therewith.  Dr.  Ellis and Mr.  O'Donnell  are
directors of the Company. When the CareCentric/MCS merger was completed on March
7, 2000, the Company succeeded to both of these obligations. The note payable to
Dr. Ellis,  which accrued interest at 9% per annum, was paid in full on July 12,
2000 in  advance  of its  August  15,  2000  maturity.  The note  payable to Mr.
O'Donnell  included interest at 9% per annum, was scheduled to mature on May 11,
2002, and required  quarterly  payments of accrued interest.  On August 8, 2000,
the $500,000 note payable to Mr.  O'Donnell,  together with $100,000 of deferred
salary, was cancelled in exchange for a $600,000 subordinated note,  convertible
into  CareCentric  common  stock at a strike  price of  $2.51  per  share,  with
interest at 9% per annum and a five-year  maturity.  In January 2002,  this loan
was amended to change the interest  rate to prime plus two percent and to change
the terms of  payment  of  interest  for 2002 to require  that  one-half  of the
accrued  interest  be timely  paid each  quarter  and the  balance to be paid on
December 31, 2003 or to be converted into an additional convertible note.

Note Payable - Mestek:

     The Company is obligated under an eighteen month unsecured  promissory note
in the  principal  amount of  $1,019,000  payable  to Mestek  Inc.  which  bears
interest at prime plus one and one half percent  (1.5%),  with interest  payable
semiannually and which matures on June 30, 2003. This note covers funds advanced
by Mestek to  CareCentric  to cover  payroll and  accounts  payable  obligations
incurred by the Company  during the period of its  transition of senior  lenders
from  Silicon  Valley Bank to  Wainwright  Bank and Trust  Company,  accrued and


                                       60
<PAGE>

unpaid interest thereon and the unreimbursed portion of Mr. Bruce Dewey's salary
for the  periods  from  November  9, 1999 to October  31, 2001 when he was Chief
Executive Officer of the Company.

J.E. Reed Facility:

     On June 22, 2000, the Company entered into a new financing facility (the J.
E. Reed  Facility)  provided by John E. Reed,  Chairman of  CareCentric  and the
Chairman and Chief  Executive  Officer of Mestek,  Inc. The J. E. Reed  Facility
consists of a $6.0 million subordinated line of credit,  convertible into common
stock of the Company at a strike price of $2.51 per share,  with  interest at 9%
per annum and a five-year maturity. The J. E. Reed Facility can be drawn down by
the Company as needed in $500,000 increments and is secured by a second position
on  substantially  all of the Company's  assets.  No borrowings were outstanding
under the J. E. Reed  Facility as of December 31, 2000;  however,  borrowings at
December 31, 2001 stand at $3,500,000,  $1,000,000 of which was  participated to
Mestek, Inc. effective December 31, 2001 and $2,500,000 of which remains held by
Mr. Reed. On December 31, 2001,  the facility was amended to change the interest
rate to prime plus two  percent,  to change  the  payment  term for unpaid  2001
interest to require  payment at December 31, 2003, or to convert the outstanding
unpaid  interest to additional  convertible  notes, in the amount of $184,438 at
the  option of Mr.  Reed,  and in the amount of $40,463 at the option of Mestek,
and to change the terms of payment of interest for 2002 to require that one-half
be timely paid each  quarter and the balance be paid on December  31, 2003 or be
converted to additional convertible notes.

     The  Company  is  obligated  under a number of  capital  lease  obligations
originally  entered into by CareCentric  related to computer  equipment formerly
used in CareCentric's business.

     Cash paid  interest  was  $491,000,  $510,000 and $0 during the years ended
December 31, 2001, 2000 and 1999, respectively.

     Maturities of long-term  debt in each of the next five years are as follows
in thousands:

                2002                    $   -
                2003                    1,243
                2004                        -
                2005                    4,100
                2006
                                   -----------
                      Total            $5,343
                                   ===========

     The fair value of the Company's  long-term  debt is estimated  based on the
current  interest  rates  offered  to the  Company  for debt  offered  under the
liquidity conditions and credit profile of the Company.  Management believes the
carrying value of debt and the contractual values of the outstanding  letters of
credit approximate their fair values as of December 31, 2001.


NOTE 9 - COMMITMENTS AND CONTINGENCIES

     CONTINGENCIES

     The Company is engaged in various legal and regulatory  proceedings arising
in the normal  course of  business  which  management  believes  will not have a
material adverse effect on its financial position or results of operations.

     Simione Central Holding,  Inc., a subsidiary of CareCentric now known as SC
Holding,  Inc.  ("SC  Holding")  was  one  of  several  defendants  named  in  a
"whistleblower"  lawsuit related to alleged Medicare fraud filed under the False
Claims  Act in the  Northern  District  of  Georgia  (U.S.  ex re.  McLendon  v.
Columbia/HCA  Healthcare  Corp., et al., No. 97-VC-0890 (N.D. Ga.)). The lawsuit
involves alleged claims that SC Holding  allegedly  participated in a conspiracy


                                       61
<PAGE>

with Columbia/HCA and other third parties to bill inflated and fraudulent claims
to Medicare.  On July 21, 1999, the Justice Department issued notice that it had
elected  not to join  in the  claims  asserted  against  SC  Holding  by  Donald
McLendon,  who  is a  former  employee  of  an  unrelated  service  provider  to
Columbia/HCA.  Although  the Justice  Department  joined the suit with regard to
other  defendants,  it  specifically  declined  to  intervene  with regard to SC
Holding.  In late 2000,  CareCentric was advised by Mr. McLendon's attorney that
notwithstanding the declination by the Justice Department,  Mr. McLendon intends
to pursue "whistleblower" claims against SC Holding directly.  Through March 22,
2002,  no such  action has been taken and  nothing  further  has been heard from
McLendon's attorney over one year.  Management believes that this claim has been
abandoned. In the event a claim is asserted, however, CareCentric and SC Holding
intend to vigorously defend against it.

     COMMITMENTS

     The  Company  leases its office  facilities  and  certain  equipment  under
various  operating  lease  agreements.  These leases  require the Company to pay
taxes,  insurance,  and maintenance  expenses and provide for renewal options at
the then fair market rental value of the property.

     Aggregate annual rental payments for operating  leases with  non-cancelable
lease  terms in excess  of one year,  net of  non-cancelable  subleases,  are as
follows:

                                     LEASE OBLIGATIONS
                              --------------------------------
                                                   Net of
          Years Ending            Gross           Sublease
          December 31,         Obligations       Agreements
        ------------------    --------------    --------------
        2002                    $ 2,359,000       $ 1,160,000
        2003                      1,154,000         1,145,000
        2004                        960,000           960,000
        2005                        719,000           719,000
        2006                        443,000           443,000
        Thereafter                  110,000           110,000
                              --------------    --------------
                    Total       $ 5,745,000       $ 4,537,000
                              ==============    ==============

     Aggregate  annual rental payments for operating  leases with  noncancelable
     lease terms in excess of one year.

     Rent expense approximated $1.1 million,  $1.2 million, and $0.3 million for
the years ended December 31, 2001, 2000 and 1999, respectively.


                                       62
<PAGE>



NOTE 10 - INCOME TAXES

     Deferred  income  taxes  reflect  the net effect of  temporary  differences
between the financial  reporting  carrying amounts of assets and liabilities and
income tax carrying  amounts of assets and  liabilities.  The  components of the
Company's deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
<S>                                                   <C>                 <C>
                                                            YEARS ENDED DECEMBER 31,
                                                       -----------------------------------
                                                          2001                 2000
                                                      --------------      ---------------
Deferred tax assets:
     Net operating loss                               $  13,946,000       $ 10,900,000
     Severance and other restructuring charges              837,000            837,000
     Allowance for doubtful accounts                        396,000            929,000
     Deferred revenue                                     2,264,000          2,864,000
     Depreciation                                            33,000            226,000
     Other                                                  333,000            575,000
                                                      --------------     ---------------
Total deferred tax assets                                17,809,000         16,331,000
Valuation allowance                                    (17,809,000)       (16,331,000)
                                                      --------------     ---------------
                                                      $           -      $           -
                                                      ==============     ===============
</TABLE>

     The Company has  approximately  $36.7 million of net  operating  losses for
income tax purposes,  including  approximately $22.0 million incurred by Simione
Central Holdings, Inc. prior to the merger on March 7, 2000, available to offset
future taxable income.  Such losses begin expiring in 2006. The Company's use of
the net operating  losses  incurred by Simione prior to the merger is subject to
limitations  in the Internal  Revenue Code relating to changes in  ownership.  A
valuation  allowance  reducing the total net deferred tax assets set forth above
to zero has been  recorded  based on  management's  assessment  that it is "more
likely than not" that this net asset is not realizable as of December 31, 2001.

     Actual income tax expense differs from the "expected"  amount  (computed by
applying the U.S.  Federal  corporate  income tax rate of 34% to the loss before
income taxes) as follows:

<TABLE>
<CAPTION>
<S>                                                  <C>                <C>                    <C>
                                                                     YEARS ENDED DECEMBER 31,
                                                         2001               2000                    1999
                                                     --------------    ----------------        ---------------

Federal tax benefit computed at statutory rates      $  (7,853,000)       $(3,483,000)           $     262,000
State income taxes, net of federal effect               (1,351,000)          (615,000)                  44,000
Other, net                                                5,217,000            463,000                       -
Change in valuation allowance                             4,002,000          3,481,000                       -
                                                     --------------    ----------------        ---------------
Income tax expense (Benefit)                         $       15,000        $ (154,000)           $     306,000
                                                     ==============    ================        ===============

</TABLE>


NOTE 11 - EMPLOYEE BENEFIT PLANS

     The  Company  has  adopted  401(k)  plans  that  cover   substantially  all
employees.  The Company contributes to the plans based upon the dollar amount of
each participant's  contribution.  The Company made contributions to these plans
of  approximately  $140,000,  $189,000  and  $76,000  in 2001,  2000  and  1999,
respectively.  These contributions relate to the MCS 401(k) Plan for 1999 and to
the  CareCentric,  Inc.  401(k) Plan (formerly  Simione Central  Holdings,  Inc.
Plan), which survived the merger, for 2001 and 2000.


                                       63
<PAGE>

NOTE 12 - SHAREHOLDERS' EQUITY

     Subsequent to the  CareCentric/MCS  Merger on March 7, 2000,  the Company's
Shareholders'  Equity  (all  on a  split-adjusted  basis)  is  comprised  of the
following:

     Common Shares - 20,000,000 shares  authorized,  $.001 par value,  4,371,350
shares issued and outstanding as of December 31, 2001.  1,489,853 of such shares
were issued on March 7, 2000 to the former MCS common  shareholders.  606,904 of
such shares were  issued on March 7, 2000 to the former  preferred  shareholders
and noteholders of CareCentric Solutions, Inc., which shares were converted from
Series A Preferred  Stock into  CareCentric  (formerly  known as Simione Central
Holdings Inc.) common shares in connection with the merger.

     Pursuant  to the  terms of the  July 12,  1999  Merger  Agreement  by which
Simione  acquired  the stock of  CareCentric  Solutions,  Inc.,  the Company was
required  to issue up to an  additional  606,904  shares of common  stock to the
former preferred  shareholders  and noteholders of CareCentric  Solutions if the
average  closing  price of the  Company's  stock for the period  October 1, 2000
through  December  31,  2000 is not equal to or greater  than  $15.00 per share.
Since the Company's  average  closing stock price for the fourth quarter of 2000
was less than $15.00 per share,  on March 19, 2001,  the Company  issued 593,688
shares of its common stock to the former preferred  shareholders and noteholders
of  CareCentric   Solutions.   As  required  by  generally  accepted  accounting
principles, no value was assigned to these shares as it was deemed not to impact
total consideration paid. The Company asserted that it was not required to issue
13,216 additional shares of its common stock as well as 150,740 shares of common
stock that were being  held by it in escrow  under the terms of the  CareCentric
Solutions  Merger  Agreement  based upon  various  indemnification  and  expense
overages  claims it believes it had  against  the former  CareCentric  Solutions
preferred shareholders and noteholders. On May 16, 2001, the Company finalized a
settlement  of these claims with the  representative  of the former  CareCentric
Solutions  parties pursuant to which 88,586 shares of common stock were released
from  escrow and  distributed  to the  former  CareCentric  Solutions  preferred
shareholders and noteholders, the remaining 62,154 escrow shares were cancelled,
no additional shares of common stock will be issued,  and the parties executed a
comprehensive settlement agreement.

     Pursuant to a comprehensive  settlement agreement on June 28, 2001, between
Sterling  Star,  Inc.,  Mr.  Wade  (President  of Sterling  Star,  Inc.) and the
Company, certain disputes related to the acquisition of a product named Tropical
software,  were  settled.  Under the terms of the  settlement,  10,000 shares of
stock  originally  issued to Sterling Star were returned to the Company and were
cancelled.

     Preferred Stock-10,000,000 shares authorized

     Series B Preferred  Stock -$.001 par value,  5,600,000  shares issued.  The
shares of Series B Preferred  Stock are held by Mestek,  Inc.  (Mestek) and were
issued in  consideration  of $6,000,000  paid to  CareCentric,  Inc. on March 7,
2000, in the form of cash and debt  forgiveness.  The Series B Preferred shares,
as originally issued,  carried 2,240,000 common share votes (on a split-adjusted
basis) and were entitled to a 9%  cumulative  dividend,  among other rights.  In
connection  with the Company's  application  for listing on the Nasdaq  SmallCap
Market,  the Company  reached an agreement  with Mestek on June 12, 2000,  under
which Mestek agreed to allow the aforementioned  number of common share votes to
be reduced to  1,120,000  in  consideration  for the  issuance by the Company to
Mestek of a warrant to acquire up to 490,396 shares of CareCentric common stock,
as more fully described below.

     Series C Preferred  Stock - $.001 par value,  850,000  shares  issued.  The
shares of Series C Preferred Stock are held by Mestek,  Inc. and result from the
conversion at the March 7, 2000 merger of a  pre-existing  $850,000  convertible
note payable to Mestek,  Inc. The Series C Preferred shares carry 170,000 common
share votes (on a split  adjusted  basis) and are entitled to an 11%  cumulative
dividend, among other rights.

     Series D Preferred  Stock - $.001 par value,  398,406  shares  issued.  The
shares of Series D  Preferred  Stock are held by John E. Reed and were issued on
June 12, 2000 in  consideration of $1.0 million paid to the Company in cash. The
Series D Preferred shares have a 9% annual cumulative dividend,  are convertible


                                       64
<PAGE>

into common stock at an initial  conversion price of $2.51 per share,  limit the
ability to issue dilutive stock options and have voting rights equal to those of
the common stock, among other rights.

     Series E Preferred  Stock - $.001 par value,  210,000 shares issued under a
restricted  stock award. The shares of Series E Preferred Stock are held by John
R. Festa and the rights to those shares were  granted on November 10, 2001.  The
Series E Preferred shares are entitled to certain voting, dividend,  liquidation
and conversion rights.

     Common  Stock  Warrants - In  connection  with the issuance of the Series B
Preferred Stock described above,  Mestek,  Inc. received a warrant to acquire up
to 400,000  shares of the Company's  common stock at a per share  exercise price
equal to  $10.875.  In  connection  with the waiver by Mestek,  Inc.  of certain
voting  rights  previously  granted to it,  Mestek  received on June 12, 2000, a
warrant to acquire up to 490,396 shares of the Company's common stock for a term
of 3 years at a per share  exercise  price equal to $3.21.  In  connection  with
Mestek's  guarantee of the Company's  obligations  under the line of credit from
Wainwright  Bank and Trust Company,  as more fully  explained in Note 5 to these
Financial Statements,  Mestek received on July 12, 2000, a warrant to acquire up
to 104,712  shares of the Company's  common stock for a term of 3 years at a per
share exercise price equal to $2.51. The aforementioned number of shares and per
share prices are all on a split-adjusted basis. Other warrants existing prior to
the merger  transaction  to acquire up to 25,000  shares of common  stock remain
outstanding.

     STOCK OPTIONS - Options  totaling 1,000 shares were  outstanding and vested
under the now discontinued 1997 SCHI NQ (Directors) Plan at an exercise price of
$60.00.   Non-plan  options  totaling  107,453  shares,   of  which  90,787  are
exercisable,  were  outstanding at exercise prices ranging from $2.51 to $45.00.
The Simione Central Holding Inc. 1997 Omnibus  Equity-Based Plan (the "Plan") is
the only  continuing  stock  option  plan of the  Company.  The Plan offers both
incentive  stock  options  and  non-qualified  stock  options.  The  Company  is
authorized  to grant options of up to 900,000  shares of common  stock.  Options
totaling  464,206  shares  were   outstanding,   of  which  176,045  shares  are
exercisable,  at exercise prices ranging from $1.25 to $73.55. In 2001,  options
totaling  152,500 shares of common stock were granted to directors and employees
of the Company, (127,500 incentive options to employees and 25,000 non-qualified
options to  directors),  pursuant to the Plan at exercise  prices  ranging  from
$1.25 to $3.25 per share.  The foregoing  information is provided as of April 8,
2002.


     A summary of the Company's  stock option activity from December 31, 1999 is
as follows:

                                                           WEIGHTED
                                                           AVERAGE
                                             NUMBER OF     EXERCISE
                                              OPTIONS        PRICE
                                            ------------   -----------
Outstanding at December 31, 1999                      -             -
                                            ------------   -----------
Options Assumed                                 398,452       $ 24.10
Granted                                         274,800       $  3.70
Exercised                                             -       $     -
Forfeited and Cancelled                       (101,593)       $ 33.65
                                            ------------   -----------
Outstanding at December 31, 2000                571,659       $ 12.45
                                            ------------   -----------
Granted                                         152,500       $  2.15
Exercised                                             -       $     -
Forfeited and Cancelled                       (145,870)       $ 16.11
                                            ------------   -----------
Outstanding at December 31, 2001                578,289       $  8.11
                                            ============   ===========



                                       65
<PAGE>
<TABLE>
<CAPTION>
<S>                             <C>               <C>             <C>                 <C>             <C>
                                                             AS OF DECEMBER 31, 2001
                                -----------------------------------------------------------------------------------
                                              OPTIONS OUTSTANDING                         OPTIONS EXERCISABLE
                                -------------------------------------------------    ------------------------------
                                                     WEIGHTED
                                                     AVERAGE         WEIGHTED                           WEIGHTED
                                                    REMAINING         AVERAGE                           AVERAGE
                                    NUMBER         CONTRACTUAL       EXERCISE           NUMBER          EXERCISE
RANGE OF EXERCISE PRICES          OUTSTANDING     LIFE IN YEARS        PRICE          EXERCISABLE        PRICE
-----------------------------   ----------------  ---------------  --------------    ---------------  -------------
$  2.50            $    7.36            385,500        9.10            $    3.09             77,672       $   3.71
$  7.36            $   14.71            122,288        6.20            $    9.96            111,288       $  10.07
$ 14.71            $   22.07             13,000        4.20            $   15.96             13,000       $  15.96
$ 29.42            $   36.78             40,965        5.30            $   32.22             40,965       $  32.22
$ 36.78            $   44.13              5,000        4.70            $   42.50              5,000       $  42.50
$ 44.13            $   51.49              8,000        6.00            $   45.00              8,000       $  45.00
$ 51.49            $   58.84              2,080        5.00            $   55.63              2,080       $  55.63
$ 58.84            $   66.20              1,000        5.40            $   60.00              1,000       $  60.00
$ 66.20            $   73.55                456        2.40            $   73.55                456       $  73.55
                                ----------------  ---------------  --------------    ---------------  -------------
                                        578,289        8.00            $    8.11            259,461       $  14.33
                                ================                                     ===============
</TABLE>


     In  connection  with the  Simione/MCS  merger on March 7, 2000,  Mestek was
granted a series of options to purchase a total of approximately  378,295 shares
of the Company's  common stock (on a  split-adjusted  basis).  These options are
exercisable only to the extent that outstanding CareCentric options, warrants or
other  conversion  rights are exercised.  These options were designed to prevent
dilution of Mestek's  ownership  interest  in the Company  after the merger.  As
options,  warrants and other common rights are forfeited or cancelled,  Mestek's
option rights are correspondingly reduced. Due to the contingent nature of these
options,  they have been  excluded  from the above table.  At December 31, 2001,
159,573  shares of such  options  were  available  under the  original  terms of
issuance.

     For the purposes of pro forma disclosures,  the estimated fair value of the
stock  options  is  amortized  to expense  over the  options'  vesting  periods.
Risk-free  interest rates of 4.31% and 5.34%; no dividends;  a volatility factor
of the  expected  market  price of the  Company's  common  stock of 1.40685  and
1.40685;  and a weighted-average  expected life of the options of 3.97 years and
7.10 years for 2001 and 2000,  respectively.  The  weighted  average  fair value
assigned to options granted in 2001 and 2000 was $1.35 and $3.86,  respectively.
For 2001 and 2000 respectively the Company's pro forma net loss and net loss per
share (basic and diluted) are  $25,390,000  and  $10,941,000 and $5.94 and $3.20
for 2001 and 2000 respectively.


STOCK PURCHASE WARRANTS

     At December  31,  2001,  the Company had  outstanding  warrants to purchase
shares of the Company's common stock as follows:


                                       66
<PAGE>
                            EXERCISE
        COMMON SHARES        PRICE         EXPIRATION DATE
        ---------------  --------------   -------------------
                25,000         $  5.00    February 24, 2005
               104,712         $  2.51    July 12, 2003
               490,396         $  3.21    June 30, 2003
               400,000         $ 10.88    March 7, 2003
        ---------------
             1,020,108
        ===============


NOTE  13  -- SELECTED QUARTERLY INFORMATION (UNAUDITED)

     The table below sets forth  selected  quarterly  information  for each full
quarter of 2001 and 2000.
<TABLE>
<CAPTION>
<S>                                      <C>            <C>           <C>             <C>
                                                             FISCAL YEAR 2001
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                         ---------------------------------------------------------
                                            MAR. 31,       JUNE 30,      SEPT. 30,      DEC. 31,
                                         -------------  ------------- -------------- -------------
Net revenues:                                 $ 5,679         $5,302        $ 4,769        $4,696

Costs and expenses:
    Cost of revenues                            2,108          2,004          1,646         2,459
    Selling, general and administrative         2,825          2,711          2,550         2,629
    Research and development                    1,767          1,609          1,413         1,369
    Write down of intangibles                       -              -              -        11,799
    Amortization and depreciation                 951            950          1,011           952
    Restructuring Charges                           -            675              -             -
                                         -------------  ------------- -------------- -------------
    Total costs and expenses                    7,651          7,949          6,620        19,209
                                         -------------  ------------- -------------- -------------

(Loss) from operations                        (1,972)        (2,647)        (1,851)      (14,513)

Other (expense) income:
    Interest expense                            (300)          (327)          (219)         (466)
    Interest and other income                     126             68             29         (187)
                                         -------------  ------------- -------------- -------------
(Loss) before taxes                           (2,146)        (2,906)        (2,041)      (15,166)
                                         -------------  ------------- -------------- -------------

    Income tax benefit (expense)                    -              -              -          (15)
                                         -------------  ------------- -------------- -------------
Net (loss) income from continuing
   operations                                 (2,146)        (2,906)        (2,041)      (15,181)
                                         -------------  ------------- -------------- -------------

Discontinued operation
    Loss on disposal of discontinued
      operations                                    -              -        (2,632)             -

    Income from operations of
    discontinued segment before taxes           (185)           (73)          (226)             -

    Applicable tax expense                          -              -              -             -

Net (loss) from operations and disposal
   of discontinued segment                      (185)           (73)        (2,858)             -
                                         -------------  ------------- -------------- -------------
Net  (loss) income                          $ (2,331)      $ (2,979)      $ (4,899)    $ (15,181)
                                         =============  ============= ============== =============

Cumulative preferred dividends                  (176)          (178)          (180)         (186)

Net (loss) available to
    common shareholders                     $ (2,507)      $ (3,157)      $ (5,079)    $ (15,367)
                                         =============  ============= ============== =============

</TABLE>

                                       67
<PAGE>
<TABLE>
<CAPTION>
<S>                                      <C>            <C>           <C>             <C>

(Loss) per share - basic and
   diluted from continuing operations       $  (0.55)       $ (0.66)       $ (0.47)     $  (3.47)
Weighted average common shares -
   basic and diluted                            3,922          4,418          4,371         4,371
                                         =============  =============== ============= =============
Net (loss) per share - basic and diluted
   From discontinued operations             $  (0.05)       $ (0.02)       $ (0.65)       $     -
Weighted average common shares -
   basic and diluted                            3,922          4,418          4,371         4,371
                                         =============  =============== ============ =============
Net (loss) per share - basic and diluted     $ (0.59)       $ (0.67)       $ (1.12)      $ (3.47)
Weighted average common shares -
   basic and diluted                            3,922          4,418          4,371         4,371
                                         =============  ============== ============== =============

Net (loss) per share - basic and diluted
   available to common shareholders          $ (0.64)       $ (0.71)       $ (1.16)      $ (3.52)

Weighted average common shares -
   basic and diluted                            3,922          4,418          4,371         4,371
                                         =============  ============= ============== =============


                                                                FISCAL YEAR 2000
                                                     (in thousands, except per share data)
                                         ---------------------------------------------------------
                                           MAR. 31,       JUNE 30,      SEPT. 30,      DEC. 31,
                                         -------------  -------------  -------------  ------------

Net revenues:                                 $ 4,000        $ 6,257        $ 7,177        $2,140

Costs and expenses:
       Cost of revenues                         2,547          3,954          2,621         (644)
       Selling, general and
         administrative                         1,453          1,624          3,253         4,426
       Research and development                   711          1,780          1,897         1,786
       Amortization and depreciation              426          1,183          1,027           845
                                         -------------  -------------  -------------  ------------
       Total costs and expenses                 5,137          8,541          8,798         6,413
                                         -------------  -------------  -------------  ------------

(Loss) from operations                        (1,137)        (2,284)        (1,621)       (4,273)

Other (expense) income:
       Other (expense) income                     (6)              -              -             -
       Interest expense                          (76)          (189)          (265)         (180)
       Interest and other income                   12             28             68          (34)
                                         -------------  -------------  -------------  ------------
(Loss)  income before taxes                   (1,207)        (2,445)        (1,818)       (4,487)
                                         -------------  -------------  -------------  ------------

       Income tax benefit (expense)               157              -            (6)             3
                                         -------------  -------------  -------------  ------------
(Loss) income from continuing
   operations                                 (1,050)        (2,445)        (1,824)       (4,484)
                                         -------------  -------------  -------------  ------------

Discontinued operation
       Loss on disposal of
         discontinued operations                    -              -              -             -

       Income from operations of
         discontinued segment before
         taxes                                      -          (303)           (21)          (118)

       Applicable tax expense                       -              -              -             -

</TABLE>

                                       68
<PAGE>
<TABLE>
<CAPTION>
<S>                                      <C>            <C>           <C>             <C>


Net (loss) from operations and disposal
   of discontinued segment                           -          (303)           (21)         (118)
                                         -------------  -------------  -------------  ------------
Net  (loss) income                           $(1,050)       $(2,748)       $(1,845)      $(4,602)
                                         =============  =============  =============  ============

Cumulative preferred dividends                   (42)          (161)          (185)         (181)

Net (loss) available to common
   shareholders                              $(1,092)       $(2,909)       $(2,030)      $(4,783)
                                         =============  =============  =============  ============

(Loss) per share - basic and diluted
   From continuing operations                 $(0.50)        $(0.64)        $(0.47)      $ (1.16)
Weighted average common shares -
   basic and diluted                            2,113          3,850          3,850         3,850
                                         =============  ============================  ============
Net (loss) per share - basic and diluted
   From discontinued operations                 $   -        $(0.08)        $(0.01)      $ (0.03)
Weighted average common shares -
   basic and diluted                            2,113          3,850          3,850         3,850
                                         =============  ============================  ============

Net (loss) per share - basic and diluted      $ (0.50)       $ (0.71)       $ (0.48)       $(1.20)

Weighted average common shares
   - basic and diluted                          2,113          3,850          3,850         3,850
                                         =============  ============================  ============

Net (loss) per share - basic and diluted
    available to common shareholders         $ (0.52)       $ (0.76)       $ (0.53)       $(1.24)

Weighted average common shares -
       basic and diluted                        2,113          3,850          3,850         3,850
                                         =============  ============================  ============

</TABLE>

     Quarterly  earnings per share figures do not arithmetically add to the full
years  2001 and 2000  earnings  per share due to  interim  changes  in  weighted
average shares outstanding during 2001 and 2000 and due to rounding. The numbers
below  reflect  the effect of a one for five  reverse  stock  split  effected in
connection  with the  MCS/Simione  merger on March 7,  2000.  The basic loss per
share for the year 2000 has been  changed to conform  with the 2001  calculation
which includes the dividends associated with each Series of cumulative Preferred
Stock.


NOTE 14 - RELATED PARTY TRANSACTIONS

     The Company has subleased  certain space to  Healthfield,  Inc.  which is a
Mestamed  customer and has a significant  shareholder who was a former member of
the board of directors of the Company.  The original lease and related  sublease
expires on December 31, 2002 and requires annual sublease  payments equal to the
original lease payments of approximately $730,000.

     R. Bruce Dewey is President and Chief Operating Office of Mestek,  Inc. and
Winston R. Hindle, Jr., a director of the Company, is a director of Mestek, Inc.
Mestek has certain investments in the Company in the form of notes,  convertible
notes,  warrants,  stock options and preferred  stock as described in Note 8 and
Note 12 to these Financial Statements.

     The Company has a note receivable from Simione Consultants, LLC of $707,000
at December  31, 2001.  On September  28,  2001,  the Company  discontinued  its
Consulting  business segment by closing the sale of certain of the assets of its
wholly-owned  subsidiary,  Simione  Consulting,  Inc.  ("Consulting") to Simione
Consultants,  LLC, which is owned and  controlled by William J. Simione,  Jr., a
director  and  former  officer  of  CareCentric.   The  total  sales  price  was
approximately $2.0 million plus the assumption of certain liabilities.  The sale
was made  pursuant to an asset  purchase  agreement.  William  Simione,  Jr. has
resigned as an officer of CareCentric,  however,  William Simione, Jr. remains a
director  of  CareCentric.  The assets  sold under the  agreement  included  the
Consulting accounts receivable,  computer equipment,  and miscellaneous  prepaid
expenses. Consideration received consisted of approximately $1.0 million in cash
and $1.0  million in notes,  $770,000  with a 36-month  term and  $230,000  with
5-month  term.  The cash proceeds  were used to pay down  CareCentric's  line of
credit.

     As of December 31, 2001, the Company had a promissory  note  outstanding to
Barrett C. O'Donnell, a director of the Company, as described in Note 8 to these
Financial Statements.

     John  E.  Reed  is a  director  and a  significant,  but  not  controlling,
shareholder  of the  Wainwright  Bank and Trust  Company  which has provided the
Company with a $6.0 million line of credit, as more fully explained in Note 8 to
the Financial Statements.

                                       69
<PAGE>

     John E. Reed,  Chairman  of the Company and  Chairman  and Chief  Executive
Officer of Mestek,  Inc.,  has  provided the Company with a $6.0 million line of
credit  (unrelated to the Wainwright  Bank and Trust $6.0 million line of credit
described  above) as more fully described in Note 8 to the Financial  Statements
and has also purchased $1.0 million of the Company's Series D Preferred Stock on
June 12, 2000, as more fully described in Note 12 to these Financial Statements.
An  independent  committee of the Company's  Board of  Directors,  consisting of
Barrett C. O'Donnell and David O. Ellis, negotiated the terms of Mr. Reed's debt
and equity investments in the Company.  The issuance of 398,406 shares of Series
D Preferred  Stock to Mr. Reed for his $1.0 million equity  investment was based
on a per share  price of $2.51,  which was the 5-day  average  closing  price of
CareCentric common stock as of the date of the final negotiation of the terms of
Mr.  Reed's  purchase.  The  conversion  price for Mr. Reed's $6.0 million loan,
which converts into CareCentric common stock as described in more detail in Note
8 to these Financial Statements,  is also $2.51 per share. On December 31, 2001,
$3.5 million was outstanding under this credit facility, $2.5 million payable to
Mr.  Reed,  and $1.0  million  payable  to Mestek  pursuant  to a  participation
agreement.

     Warrants  were granted in June 2000 and July 2000 by the Company to Mestek,
Inc. in connection with its waiver of certain voting rights  previously  granted
to it and in connection  with its guarantee of the loan from Wainwright Bank and
Trust  Company to the Company.  The terms of the warrants (as  described in more
detail in Note 12 to these Financial  Statements)  were based on negotiations by
independent committees of the Boards of Directors of the Company and Mestek.


 NOTE 15 -  LICENSE AGREEMENTS

     The Company  licenses  certain  software  products  from third  parties for
incorporation  in, or other use  with,  its  products  and is  obligated  to pay
license fees in connection  with such  products.  The Company  sublicenses  such
products  to  its  customers   and  collects   fees  in  connection   with  such
sublicensees.


NOTE 16 -  EXECUTIVE COMPENSATION

     The Company has entered into an employment agreement with its President and
Chief Executive  Officer,  Mr. John Festa.  Among other specific  contents,  Mr.
Festa i) has been granted 210,000 shares of Series E preferred  stock,  one half
of which vest evenly over the course of three years from his hire date dependent
upon his  continued  employment  as President  and CEO and one half of which are
forfeitable  pro rata over a three year period if certain  financial  milestones
are not met,  ii) payment of an annual  bonus of up to 50% of his annual  salary
based on completion of annual  performance  objectives,  iii) the possibility of
receiving a special  bonus which varies in dollar amount in the event there is a
sale of the Company  while Mr.  Festa is  President  and CEO and for nine months
thereafter.


NOTE 17 - LIQUIDITY

     As disclosed in the financial  statements,  the Company's  operations  used
significant  amounts of cash in 2001. The Company has a working  capital deficit
of $15.6 million at December 31, 2001.  During the fourth  quarter of 2001,  the
Company  continued  to use its  Wainwright  Bank Credit Line and the Reed Credit
Line in order to meet its working capital needs.

     The merger with  Simione  added  additional  products  and  resources  and,
importantly,  added to the Company's  critical  mass of installed  sites but the
Company's  longer term success will depend upon increased  sales of new software
systems and successful  installation  performance.  Additionally,  the Company's
continuing  efforts to  develop  new  products  using the  latest  software  and
hardware platforms will be most important to its long-term success.

     As  of  April  8,  2002,  the  Company  has  untapped  credit  capacity  of
approximately  $0.6  million  from  combined  Wainwright  Bank and  Reed  credit
facilities.  As discussed in Note 18 below, and pending shareholder and board of
director  approval,  which are  expected to be  obtained,  certain  terms of the


                                       70
<PAGE>

Wainwright and Reed credit facilities will be changed. The Company believes that
a successful completion and closing of the refinancing and recapitalization plan
(described in more detail in Note 18), in combination  with the funds  available
from cash to be generated from future operations, will be sufficient to meet the
Company's  operating  requirements  through at least June 30, 2003,  assuming no
material   adverse   change  in  the  operation  of  the   Company's   business.
Notwithstanding  the  financial   conditions   prevailing  in  the  home  health
marketplace,  the Company  continued  to fund  significant  product  development
initiatives  during 2001 and intends to do so throughout  2002,  reinvesting the
moneys  saved in its  re-engineering  undertaken  beginning  February  5,  2002.
Notwithstanding,  until revenues increase  sufficiently to cover fluctuations in
forward-looking  costs and operating expenses,  the Company remains dependent on
its  majority  shareholder  for its working  capital  financing.  The  Company's
majority shareholder has stated his intention and ability to continue to advance
cash to the Company in accordance with the terms of his credit facility.


 NOTE 18 - SUBSEQUENT EVENTS

     In  January  of  2002,  Dennis   Brauckman,   Chief  Financial  Officer  of
CareCentric  resigned as an officer and  employee of the Company to pursue other
personal interests.  In the absence of an employed Chief Financial Officer,  the
Company has  designated H. Forest Ralph, a financial  consultant  engaged by the
Company since January 2002, as the Company's  principal financial and accounting
officer for purposes of signing this Form 10-K.

     In February 2002,  CareCentric  reorganized its management structure.  This
reorganization  was designed to i) streamline  management  and shorten  decision
processes,  ii) reallocate  funds to the  development of new generation  product
platforms,  iii) create single line functional responsibility and accountability
in the management staff, and iv) reduce  unnecessary  overhead  operating costs.
The  reorganization  reduced  management  and cut  head  count  by  nearly  25%.
Management  believes  that this  reduction  of costs  will  free up  substantial
resources  to be  reallocated  to the  development  of new  systems and the next
generation platforms.

     On April 8, 2002,  the  Company  secured  two  commitments  for  additional
financing,  both from  existing  shareholders.  John E. Reed,  a director of the
Company,  agreed to provide $871,117 in short-term funds, to be refinanced along
with other debt of the Company due Mr. Reed upon the  obtaining  of  shareholder
approval in June,  2002.  The  refinancing  would be  evidenced  by a $3,555,555
subordinated,  secured convertible term note, with principal payable in a single
balloon payment in 60 months and with interest at a fixed rate of 6.25% deferred
and capitalized  for 24 months.  Interest would then be payable  quarterly.  The
note would be  convertible  at any time for common stock at a price of $1.00 per
share. The conversion  rights of Mr. Reed's 398,406 shares of Series D Preferred
Stock would also be amended to increase the  conversion  exchange  rate from one
share of common  stock for one share of  Series D  Preferred  to 2.51  shares of
common stock for one share of Series D Preferred Stock.

     Mestek,  Inc., a preferred  shareholder  of the Company,  agreed to provide
$1,092,000 in short-term  funds,  to be refinanced  along with other debt of the
Company due Mestek upon the obtaining of shareholder approval in June, 2002. The
refinancing would be evidenced by a $4,000,000 subordinated, secured convertible
term note,  with principal  payable in a single balloon payment in 60 months and
with interest at a fixed rate of 6.25% deferred and  capitalized  for 24 months.
Interest would then be payable  quarterly.  The note would be convertible at any
time for common  stock of the Company at a price of $1.00 per share.  The rights
of Mestek's  5,600,000  shares of Series B Preferred Stock would also be amended
to provide for a conversion  exchange  rate of 1.0714 shares of common stock for
one  share of  Series B  Preferred  Stock.  Mestek  will  also give up its stock
options  and a warrant it holds for the  purchase  of  104,712  shares of common
stock and will exchange a warrant it holds for 400,000 shares of common stock at
$10.875 per share,  expiring  March 7, 2003, for a Warrant for 400,000 shares of
common stock at $1.00 per share, expiring June 15, 2004. It will also exchange a
warrant it holds for 490,396 shares of common stock at $3.21 per share, expiring
March 7, 2003,  for a Warrant  for 490,396  shares of common  stock at $1.00 per
share, expiring June 15, 2004.

     A condition to the refinancing of the Company's debt to Mestek and Mr. Reed
is that the present $6.0 million Wainwright Bank line of credit facility be paid
down by the  Company  to $5.9  million  or less on or before  July 31,  2002 and


                                       71
<PAGE>

continue to be reduced by no less than $100,000 each month  thereafter until all
amounts  have been  repaid  to  Wainwright  or the  Wainwright  Facility  or any
replacement thereof is obtained by CareCentric without a guarantee of Mestek.

     The refinancing and  recapitalization  transactions between the Company and
each of Mestek and Reed are subject to the  satisfaction of various  conditions,
including approval by the Company's  shareholders at its annual meeting expected
to be held in June 2002 and  approvals by Mestek's  board of  directors  and the
Company's  senior  lender.  The  transactions  contemplated  by  the  commitment
letters,  if approved,  would i) reduce the total  financing  facilities  of the
Company by approximately $0.3 million,  ii) extend the guaranty by Mestek of the
Company's  senior line of credit with  Wainwright  Bank  through the end of June
2003,  iii)  refinance  existing  debt owed by the Company to Mestek and Reed to
provide a deferral of both  interest and principal for a period of two (2) years
following  the  date  that  the  commitment  letters  are  approved,   and  (iv)
restructure  certain of the Company's  existing  voting  securities and warrants
held by Mestek and Reed.

     Management believes the required shareholder approvals will be obtained.


                                       72
<PAGE>


                                CARECENTRIC, INC.

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
<S>                                      <C>              <C>             <C>                <C>
                                                            ADDITIONS
                                           BALANCE AT      CHARGES TO
                                          BEGINNING OF      COST AND                          BALANCE AT
                                             PERIOD          EXPENSE       DEDUCTIONS (1)    END OF PERIOD
                                         ---------------  --------------  ----------------   --------------
Year ended December 31, 2001
Allowance for Doubtful Accounts              $  551,000       $ 500,000          $  9,000       $1,042,000
                                         ===============  ==============  ================   ==============

Year ended December 31, 2000
Allowance for Doubtful Accounts               $ 166,000       $ 538,000         $ 153,000        $ 551,000
                                         ===============  ==============  ================   ==============

Year ended December 31, 1999
Allowance for Doubtful Accounts               $ 166,000         $     -            $    -        $ 166,000
                                         ===============  ==============  ================   ==============
</TABLE>


(1) Write-offs of uncollectible accounts

            SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING LOANS
                    AND FOREIGN EXCHANGE FACILITIES AGREEMENT

This SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING LOANS AND FOREIGN
EXCHANGE FACILITIES AGREEMENT (the "Amendment") is made as of this 31st day of
May, 2001, by and between MESTEK, INC., a Pennsylvania corporation having a
principal place of business at 260 North Elm Street, Westfield, Massachusetts
01085 (the "Borrower") and FLEET NATIONAL BANK, formerly known as BankBoston,
N.A., a national banking association having a usual place of business at One
Monarch Place, Springfield, Massachusetts 01101 (the "Bank").

                                    RECITALS

         The Borrower and the Bank are parties to a certain Amended and Restated
Revolving Loans and Foreign Exchange Facilities Agreement dated as of July 15,
1997, as amended by a First Amendment to Amended and Restated Revolving Loans
and Foreign Exchange Facilities Agreement dated July 17, 2000 (the "Loan
Agreement"), pursuant to which the Bank has extended certain financial
accommodations to the Borrower including, without limitation, those evidenced by
an Amended and Restated Revolving Line of Credit Note dated July 17, 2000 in the
face amount of $70,000,000 and a Revolving Line of Credit Note dated July 15,
1997 in the face amount of $5,000,000 (Canadian), all as more fully described in
the Loan Agreement. The Borrower has requested and the Bank has agreed to modify
certain financial accommodations the Bank has made available to the Borrower
including, without limitation, (i) decreasing from $70,000,000.00 to
$50,000,000.00 the amount of the Commitment under the Revolving Line of Credit,
(ii) allowing for borrowings in excess of the $5,000,000 Canadian Commitment
subject to sufficient availability under the Revolving Line of Credit
Commitment, and (iii) adding, eliminating and modifying certain financial
covenants under the Loan Agreement, all as more fully described and set forth
hereinbelow. Capitalized terms not otherwise defined in this Amendment shall
have their meanings as defined in the Loan Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrower and the Bank agree
that the Loan Agreement is amended as follows:

1.     Section 1.1 is amended by deleting the definition of "Canadian LIBOR
Interest Rate" in its entirety and replacing it with the following:

                  "Canadian LIBOR Interest Rate" means the LIBOR rate determined
on the basis of Canadian Dollars.

2. Section 1.1 is amended by adding the following defined terms and definitions:

         "Cash Flow Coverage Ratio" for any period shall mean the ratio, all as
         calculated on a consolidated basis, of the Borrower's and its
         Subsidiaries EBITDA, minus cash taxes actually paid, minus dividends
         actually paid, minus capital expenditures; to the Borrower's and its
         Subsidiaries interest expense, plus scheduled payments of principal on
         indebtedness which has a maturity of more than one year from the date
         the indebtedness was incurred.

         "EBITDA" for any period shall mean, all as calculated on a consolidated
         basis, the sum of the Borrower's and its Subsidiaries (i) net income
         for such period, plus, to the extent deducted in determining
         consolidated net income for such period, (ii) interest expense for such
         period, (iii) all provisions for any income or similar taxes paid or
         accrued during such period, and (iv) depreciation and amortization for
         such period.

         "U.S. LIBOR Loan" means any Loan when and to the extent that the
         interest rate therefore is determined by reference to the U.S. LIBOR
         Interest Rate.

         "LIBOR Rate" means, as applicable to any U.S. LIBOR Loan or Canadian
         LIBOR Loan, as the case may be, the rate per annum as determined on the
         basis of the offered rates for deposits in U.S. Dollars or Canadian
         Dollars, as the case may be, for a period of time comparable to such
         U.S. LIBOR Loan or Canadian LIBOR Loan, as the case may be, which
         appears on the Telerate page 3750 as of 11:00 a.m. London time on the
         day that is two London Banking Days preceding the first day of such
         U.S. LIBOR Loan or Canadian LIBOR Loan, as the case may be, provided,
         however, if the rate described above does not appear on the Telerate
         System on any applicable interest determination date, the LIBOR Rate
         shall be the rate (rounded upward, if necessary, to the nearest one
         hundred-thousandth of a percentage point), determined on the basis of
         the offered rates for deposits in U.S. Dollars or Canadian Dollars, as
         the case may be, for a period of time comparable to such U.S. LIBOR
         Loan or Canadian LIBOR Loan, as the case may be, which are offered by
         four major banks in the London interbank market at approximately 11:00
         a.m. London time, on the day that is two (2) London Banking Days
         preceding the first day of such U.S. LIBOR Loan or Canadian LIBOR Loan,
         as the case may be, as selected by the Bank. The principal London
         office of each of the four major London banks will be requested to
         provide a quotation of its U.S. Dollars or Canadian Dollars, as the
         case may be, deposit offered rate. If at least two such quotations are
         provided, the rate for that date will be the arithmetic mean of the
         quotations. If fewer than two quotations are provided as requested, the
         rate for that date will be determined on the basis of the rates quoted
         for loans in U.S. Dollars or Canadian Dollars, as the case may be, to
         leading European banks for a period of time comparable to such U.S.
         LIBOR Loan or Canadian LIBOR Loan, as the case may be, offered by major
         banks in New York City at approximately 11:00 a.m. New York City time,
         on the day that is two London Banking Days preceding the first day of
         such U.S. LIBOR Loan or Canadian LIBOR Loan, as the case may be. In the
         event that the Bank is unable to obtain any such quotation as provided
         above, it will be deemed that a LIBOR Rate pursuant to a U.S. LIBOR
         Loan or Canadian LIBOR Loan, as the case may be, cannot be determined.
         In the event that the Board of Governors of the Federal Reserve System
         shall impose a Reserve Percentage with respect to LIBOR deposits of the
         Bank, then for any period during which such Reserve Percentage shall
         apply, LIBOR shall be equal to the amount determined above divided by
         an amount equal to 1 minus the Reserve Percentage. "Reserve Percentage"
         shall mean the maximum aggregate reserve requirement (including all
         basic, supplemental, marginal and other reserves) which is imposed on
         member banks of the Federal Reserve System against "Eurocurrency
         Liabilities" as defined in Regulation D."

         "U.S. LIBOR Interest Rate" means the LIBOR Rate determined on the basis
         of U.S. Dollars.

3. Section 1.1 is amended by deleting the definitions of "Eurodollar Interest
Rate," "Eurodollar Loan," "Eurocurrency Reserve Requirement," "Foreign Exchange
Facility," "FX Facility," "London Interbank Offered Rate," "$3,000,000 FX
Facility" and "$3,000,000 Back-up Foreign Exchange Facility Note" in their
entirety.

4.     All references throughout the Loan Agreement to the defined term
       "Eurodollar Interest Period" are changed to U.S. LIBOR Interest Period."

5.     All references throughout the Loan Agreement to the defined term
       "Eurodollar Interest Rate" are changed to "U.S. LIBOR Interest Rate."

6.     All references throughout the Loan Agreement to the term Eurodollar Loan
       are changed to U.S. LIBOR Loan.

7. All references throughout the document to "Foreign Exchange Facility," "FX
Facility," "$3,000,000 FX Facility and "$3,000,000 Back-up Foreign Exchange
Facility Note" are deleted in their entirety.

8.     Section 1.1 is amended by changing the date in the definition of
       "Termination Date" from April 30, 2001 to April 30, 2002.

9.    Section 2.1 is amended by changing the amount of the Commitment from
      $70,000,000 to $50,000,000.

10.    Section 2.1A is modified by adding the following sentence to the end of
       that section:

         "Canadian Revolving Line of Credit Loans to the Borrower up to the
         equivalent of $5,000,000 U.S. Dollars in excess of the Canadian
         Commitment shall be permitted provided, and to the extent that,
         sufficient borrowing availability exists under the Commitment described
         in Section 2.1 hereof to fully cover that amount of any such Canadian
         Revolving Line of Credit Loan requested by the Borrower in excess of
         the Canadian Commitment."

11.    Section 2.18 is deleted in its entirety.

12. The last paragraph of Section 2.3, including clauses (a) and (b) thereof, is
deleted in its entirety and replaced with the following:

                  "Upon default (whether or not the Bank has accelerated payment
         of any of the Notes) or after maturity, demand or after judgment has
         been rendered on any of the Notes, or in the Event of Default as
         defined in Section 9 of this Agreement, the Borrower's right to select
         pricing options shall cease and the unpaid principal of all advances
         shall, at the option of the Bank, bear interest at a rate which is two
         percentage points (2.00%) per annum greater than that which would
         otherwise be applicable."

13.    A new Section 2.7A is added as follows:

                  "2.7A. Application of Payments. All payments shall be applied
         first to the payment of all fees, expenses and other amounts due to the
         Bank (excluding principal and interest), then to accrued interest, and
         the balance on account of outstanding principal; provided however, that
         after the occurrence of an Event of Default and while such Event of
         Default is continuing, payments shall be applied to the Obligations as
         the Bank determines in its sole discretion."

14.    Section 2.9 is deleted in its entirety and replaced with the following:

                  "2.9. Late Payment. If the entire amount of any required
         principal and/or interest is not paid in full within fifteen (15) days
         after the same is due, the Borrower shall pay to the Bank a late fee
         equal to five percent (5.00%) of the required payment."

15.    Section 8.1.1. is modified to eliminate the requirement that the Borrower
       furnish to the Bank consolidating balance sheets and consolidating
       statements of income and retained earnings of the Borrower and its
       Subsidiaries on a quarterly basis.

16.    Section 8.2.1.is deleted in its entirety and replaced with the following:

                  "8.2.1. Cash Flow Coverage Ratio. The Borrower shall maintain
         a Cash Flow Coverage Ratio of not less than 1.50 to 1.00 as tested on a
         rolling quarterly basis as of March 31, June 30, September 30 and
         December 31 of each year based upon the financial results of the
         Borrower for the four most recent fiscal quarters then ended.

17.    Section 8.2.2.is deleted in its entirety and replaced with the following:

                  "8.2.2. Funded Debt to EBITDA Ratio. The ratio of Borrower's
         Consolidated Funded Debt; to the Borrower's EBITDA shall not exceed
         3.00 to 1.00 as tested on a rolling four quarters basis as of March 31,
         June 30, September 30 and December 31 of each year based upon the
         consolidated financial results of the Borrower and its Subsidiaries for
         the four most recent fiscal quarters then ended. For the purposes of
         this financial covenant, the Borrower's EBITDA shall be adjusted for
         acquisitions, based upon management prepared financial statements for
         the acquired company for the twelve (12) month period following the
         date of acquisition, with the EBITDA of the acquired company to be
         added on a pro rata basis in equal amounts to the actual EBITDA of the
         Borrower over the four (4) fiscal quarters following the date of
         acquisition."

18.    Section 8.2.3.is deleted in its entirety and replaced with the following:
       --------------

                  "8.2.3. Minimum Consolidated Net Worth. The Borrower shall
         maintain a Consolidated Net Worth of $95,000,000 as of fiscal year end
         December 31, 2000, with such Consolidated Net Worth to increase by not
         less than fifty percent (50%) of the Borrower's Consolidated Net Income
         as of each fiscal year end thereafter."

19.    Section 8.2.4. is deleted in its entirety.

20.    Section 10 is deleted in its entirety and replaced with the following:

                  "10. Right of Setoff. The Borrower and all Guarantors of the
         Loans hereby grant to the Bank, a continuing lien, security interest
         and right of setoff as security for all liabilities and obligations to
         the Bank, whether now existing or hereafter arising, upon and against
         all deposits, credits, collateral and property, now or hereafter in the
         possession, custody, safekeeping or control of the Bank or any entity
         under the control of FleetBoston Financial Corporation and its
         successors and assigns, or in transit to any of them. At any time
         following the occurrence of an Event of Default and while such Event of
         Default is continuing, without demand or notice (any such notice being
         expressly waived by the Borrower and such Guarantors), the Bank may set
         off the same or any part thereof and apply the same to any liability or
         obligation of the Borrower and any Guarantor even though unmatured and
         regardless of the adequacy of any other collateral securing the Loans.
         ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR
         REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS,
         PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
         CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY
         KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED."

21.    Section 12.5. is deleted in its entirety and replaced with the following:

                  "Payment of Fees and Expenses. The Borrower shall pay on
         demand all expenses of the Bank in connection with the preparation,
         administration, default, collection, waiver or amendment of loan terms,
         or in connection with the Bank's exercise, preservation or enforcement
         of any of its rights, remedies or options hereunder, including, without
         limitation, fees of outside legal counsel, accounting, consulting,
         brokerage or other similar professional fees or expenses, and any fees
         or expenses associated with travel or other costs relating to any
         appraisals or examinations conducted in connection with the loan or any
         collateral thereof, and the amount of all such expenses shall, until
         paid, bear interest at the rate applicable to principal hereunder
         (including any default rate) and be an obligation secured by any
         collateral."

22.    Section 12.6. is deleted in its entirety and replaced with the following:

                  "12.6. Integration. The Loan Documents, as amended, are
         intended by the parties as the final, complete and exclusive statement
         of the transactions evidenced thereby. All prior or contemporaneous
         promises, agreements and understandings, whether oral or written, are
         deemed to be superceded by the Loan Documents, as amended, and no party
         is relying on any promise, agreement or understanding not set forth in
         the Loan Documents. The Loan Documents may not be amended or modified
         except by a written instrument describing such amendment or
         modification executed by the Borrower and the Bank."

23.    Section 12.8. is deleted in its entirety and replaced with the following:

                  "12.8. Choice of Law. This Agreement and the Notes and the
         rights and obligations of the parties hereunder and thereunder shall be
         deemed to be documents executed under seal and shall be construed and
         interpreted in accordance with the laws of the Commonwealth of
         Massachusetts (excluding the laws applicable to conflicts or choice of
         law)."

24. A new Section 12.12 is added as follows:

                  "12.12. Pledge to the Federal Reserve. The Bank may at any
         time pledge all or any portion of its rights under the Loan Documents
         including any portion of any of the Notes to any of the twelve (12)
         Federal Reserve Banks organized under Section 4 of the Federal Reserve
         Act, 12 U.S.C. Section 341. No such pledge or enforcement thereof shall
         release the Bank from its obligations under any of the Loan Documents."

25.    A new Section 12.13 is added as follows:

                  "12.13. Sell a Portion of Loan to Prospective Participant. The
         Bank shall have unrestricted right at any time and from time to time,
         and without the consent of or notice to the Borrower or any Guarantor,
         to grant to one or more banks or other financial institutions (each, a
         "Participant") participating interests in any or all of the Loans held
         by the Bank hereunder. In the event of any such grant by the Bank of a
         participating interest to a Participant, whether or not upon notice to
         the Borrower or any Guarantor, the Bank shall remain responsible for
         the performance of its obligations hereunder and the Borrower shall
         continue to deal solely and directly with the Bank in connection with
         the Bank's rights and obligations hereunder. The Bank may furnish any
         information concerning the Borrower in its possession from time to time
         to prospective Participants, provided that the Bank shall require any
         such prospective Participant to agree in writing to maintain the
         confidentiality of such information."

26. A new Section 12.14 is added as follows:

                  12.14. Usury Laws as Applicable. All agreements between the
                         Borrower

         and/or Guarantors and the Bank are hereby expressly limited so that in
         no contingency or event whatsoever, whether by reason of acceleration
         of maturity of the indebtedness evidenced hereby or otherwise, shall
         the amount paid or agreed to be paid to the Bank for the use or the
         forbearance of the indebtedness evidenced hereby or by the Notes exceed
         the maximum permissible under applicable law. As used herein, the term
         "applicable law" shall mean the law in effect as of the date hereof
         provided, however that in the event there is a change in the law which
         results in a higher permissible rate of interest, then this Agreement
         and the Notes shall be governed by such new laws as of its effective
         date. In this regard, it is expressly agreed that it is the intent of
         the Borrower and the Bank in the execution, delivery and acceptance of
         this Agreement and the Notes to contract in strict compliance with the
         laws of the Commonwealth of Massachusetts from time to time in effect.
         If, under or from any circumstances whatsoever, fulfillment of any
         provision hereof or of any of the Loan Documents at the time of
         performance of such provision shall be due, shall involve transcending
         the limit of such validity prescribed by applicable law, then the
         obligation to be fulfilled shall automatically be reduced to the limits
         of such validity, and if under or from circumstances whatsoever the
         Bank should ever receive as interest an amount which would exceed the
         highest lawful rate, such amount which would be excessive interest
         shall be applied to the reduction of the principal balance evidenced by
         this Agreement and the Notes and not to the payment of interest. This
         provision shall control every other provision of all agreements between
         the Borrower and/or any of the Guarantor(s) and the Bank."

27.    A new Section 12.15 is added as follows:

                  "12.15. Replacement Promissory Note. Upon receipt of an
         affidavit of an officer of the Bank as to the loss, theft, destruction
         or mutilation of any of the Notes or any other Loan Document which is
         not of public record, and, in the case of any such loss, theft,
         destruction or mutilation, upon surrender and cancellation of any such
         Note or other Loan Document, the Borrower will issue, in lieu thereof,
         a replacement Note or other Loan Document in the same principal amount
         thereof and otherwise of like tenor."

28. Except as amended, modified or supplemented by this Amendment, all of the
terms, conditions, covenants, provisions, representations, warranties and
conditions of the Loan Agreement shall remain in full force and effect and are
hereby acknowledged, ratified, confirmed and continued as if fully restated
hereby.

29. The invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of any other term or provision hereof or
contained in the Loan Agreement.

30. It is the intention of the parties hereto that this Amendment shall not
constitute a novation and shall in no way adversely affect or impair performance
of the obligations of the Borrower under the Loan Agreement.

31.   The Borrower hereby confirms and ratifies the obligations established
      under the Loan Agreement, as amended hereby.

32.   This Amendment is to be governed and construed in accordance with the laws
      of the Commonwealth of Massachusetts.

                         [SIGNATURES ON FOLLOWING PAGE]


<PAGE>



IN WITNESS WHEREOF, the foregoing has been executed as an instrument under seal
as of the date first above written.

WITNESS:                                     MESTEK, INC.


/S   Timothy P. Scanlan                      By: /S   Stephen M. Shea
-----------------------                      ----------------------------------
                                             Its: Senior Vice President-Finance

                                             FLEET NATIONAL BANK


/S   Cynthia G. Reynolds                     By:  /S   Sheryl McQuade
------------------------                     ----------------------------------
                                             Its:  Vice President


<PAGE>


                            ASSET PURCHASE AGREEMENT





         THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of this ___
day of December, 2001 by and between THE KING COMPANY, a Minnesota corporation
("Seller"), United Dominion Industries, Inc., a Delaware corporation ("Parent"),
and Mestek, Inc., a Pennsylvania corporation, or its nominee ("Purchaser").

                                    RECITALS

A. Seller is the owner of certain assets including real property, machinery,
equipment, and other tangible personal property, inventory, accounts or notes
receivable, intellectual property, rights under agreements, permits, goodwill
and books, records, information and materials located at facilities in
Bishopville, South Carolina and Owatonna, Minnesota the ("Facilities") which are
required or appropriate for the continued operation of that certain business
that designs, develops, engineers, manufactures, markets and sells specialized
air handling and air purification equipment, and specialized heating,
ventilating and air conditioning equipment, and the repair and service parts
related thereto under the trade name "King Company" (the "King Business").

B.       Seller  desires and  intends to sell and  transfer  the assets and
certain  liabilities  of Seller  associated  with the King Business to Purchaser
at the price and on the terms and conditions hereinafter set forth.

C. In order to induce Purchaser to purchase the assets and assume certain
liabilities of Seller associated with the King Business, Parent has agreed to
guaranty the obligations of Seller under this Agreement.

D.       Purchaser desires and intends to purchase the assets and assume certain
liabilities of Seller associated with the King Business at the price and on the
terms and conditions hereinafter set forth.

                                   AGREEMENTS

NOW, THEREFORE, in consideration of the terms hereof, the parties hereto,
intending to be legally bound hereby, agree as follows:



<PAGE>








1.   Purchase and Sale of Assets

1.1.                           The Assets. Upon the closing of the transactions
                               contemplated under this Agreement on December 31,
                               2001 (the "Closing Date"), and subject to the
                               terms and conditions contained in this Agreement,
                               Seller shall sell, transfer, convey, and assign
                               to Purchaser, and Purchaser shall purchase,
                               acquire and accept from Seller, free and clear of
                               all liens, encumbrances, restrictions and adverse
                               charges of any nature whatsoever, other than
                               Permitted Liens, all of the assets, rights,
                               interests, properties and goodwill of every
                               nature whatsoever, tangible or intangible located
                               at the Facilities and used in the continued
                               operation of the King Business (collectively, the
                               "Assets"). The Assets are set forth below:

                  1.1.1 Machinery & Equipment. All of the machinery, equipment,
office and computer equipment, furniture, furnishings, fixtures, jigs, dies,
tooling, patterns, tooling fixtures, trucks, motor vehicles and all other fixed
tangible assets set forth on the fixed assets ledger attached as Schedule 1.1.1
hereto (the "Machinery & Equipment"), together with any rights of Seller to all
warranties, if any, and to the extent assignable, received from the
manufacturers and sellers of such items;

1.1.2 Inventory. All inventory owned by Seller and used in the conduct of the
King Business as of the Closing Date, including raw materials, work-in-process,
and finished goods (the "Inventory"), and including all Inventory to be
physically counted by Seller prior to the Closing Date, listed, valued in
accordance with Section 3.3 hereof and attached to this Agreement as Schedule
1.1.2;

1.1.3 Material Agreements. Subject to required consents by third parties, all
right, title and interest of Seller in, to and under all contracts, contract
rights and agreements including sales purchase orders to provide equipment,
repair parts and services to the customers of Seller, sales representative
agreements, leases of real or personal property, licenses, service and
maintenance agreements, and vendor purchase orders related solely to the
ownership or operation of the King Business, including, without limitation,
those agreements listed on Schedule 1.1.3 (collectively, the "Assumed
Contracts");

                  1.1.4 Intellectual Property. All patents, patent applications,
trademarks, trademark applications, service marks, tradenames, including the
tradename "KING COMPANY," copyrights and copyright applications, and licenses
with respect to any of the foregoing, identified in Schedule 1.1.4, subject to
any maintenance fees that may accrue after the Closing Date, and all inventions,
inventor's notes, discoveries, trade secrets, ideas, product designs,
proprietary processes and formulae, improvements, engineering drawings,
computer-assisted design and manufacturing data, bills of material, designs and
specifications (including design choices), computer software and laboratory
certifications, proprietary and trade rights and data, ideas and know-how,
whether patentable or not, and all shop rights, manufacturing data, licenses,
and other intellectual property owned by Seller, and all correspondence related
thereto, that are used in the conduct of the King Business, whether in written,
graphic, or electromagnetic format (all of which are hereinafter collectively
referred to as the "Intellectual Property");

                  1.1.5    Receivables.  All accounts or notes  receivable and
all contract rights relating thereto of Seller as of the Closing Date, including
those identified in Schedule 1.1.5 attached hereto (the "Receivables");


1.1.6    Real Property.  The real property commonly known as 227 Browntown Road,
Bishopville, South Carolina and legally described as set forth in Schedule 1.1.6
attached hereto (the "Real Property");

                  1.1.7 Permits. All of Seller's right, title and interest in
and to any and all permits, licenses, authorizations, certifications, consents,
orders, registrations and approvals of any federal, state or local governmental
entity or certifying or regulatory agency or authority held by Seller for the
operation of the King Business as set forth on Schedule 1.1.7 attached hereto
(the "Permits") to the extent the same are transferable or assignable to
Purchaser;

                  1.1.8 Books and Records. All of Seller's right, title and
interest in or to all books of account, records, files and invoices, including
all invoice files kept by serial number, model or customer and correspondence
related thereto, all production data, testing data, equipment maintenance data,
employee files, payroll information, accounting records, inventory records,
purchasing records, engineering records, environmental records, sales and sales
promotional data, advertising materials, and art work including logos
(excluding, however, any logos or marks containing the names "SPX" or "United
Dominion Industries" or any derivations thereof) customer lists and customer
data, cost and pricing information, supplier and vendor lists, installation and
maintenance manuals, business plans, supply reference catalogs and any other
records and data maintained by Seller at the Facilities and used in the conduct
of the King Business (whether in written, graphic or electromagnetic format)(the
"Books and Records"), other than financial records and information prepared or
maintained by Parent, SPX Corporation ("SPX") or their affiliates (other than
Seller), financial records and information not related solely to Seller,
originals of tax returns and records, the corporate charter, by-laws, minute
book and records of shareholder and director actions of Seller; and

                  1.1.9    Goodwill.  The goodwill associated with the
King Business (the "Goodwill"); but excluding therefrom the Excluded Assets
(as defined below).

1.2 Conveyance of Assets. The sale, transfer, conveyance and assignment of the
Assets provided for in this Article 1 shall be made by the following
documentation as appropriate.

                  1.2.1 A duly executed bill of sale, evidencing the warranty
provisions of this Agreement, and substantially in the form of Exhibit 1.2.1
attached hereto (the "Bill of Sale");

1.2.2 A duly executed special warranty deed transferring the Real Property
substantially in the form of Exhibit 1.2.2(a) attached hereto (the "Deed"), and
pursuant to the real estate agreement substantially in the form of Exhibit
1.2.2(b) attached hereto (the "Real Estate Agreement");

1.2.3 A duly executed Assignment and Assumption Agreement substantially in the
form attached hereto as Exhibit 1.2.3 attached hereto;

1.2.4    A Patent Assignment substantially in the form of Exhibit 1.2.4 attached
 hereto;

1.2.5    A Trademark Assignment substantially in the form attached hereto as
Exhibit 1.2.5;

1.2.6    An Assignment of Lease substantially in the form of Exhibit 1.2.6
attached hereto; and such other good and sufficient instruments of conveyance
and transfer as shall be reasonably necessary to vest in Purchaser as of the
Closing Date title to the Assets being sold, transferred, conveyed, assigned and
delivered hereunder in accordance with the terms of this Agreement.

         1.3. Off-Site Assets. All material tangible Assets held at any location
other than the Facilities as of the date of this Agreement are described in
Schedule 1.3 attached to this Agreement, which schedule includes a description
of each of such assets, its type, the name and address of the vendor or customer
holding such assets and, if such asset is held pursuant to an agreement, a copy
or description of such agreement is attached as an exhibit to the schedule.

2.       Excluded Assets. Notwithstanding any other provision of this Agreement,
 the following rights, properties and assets of the King Business or Seller as
the same shall exist as of the Closing shall be excluded assets
("Excluded Assets"):

         2.1 all cash and cash equivalent items held by King Business as of the
Closing, including checks or drafts received by the King Business before the
Closing Date for which Seller has not received funds on or prior to the Closing
Date, certificates of deposit, time deposits and marketable securities;



<PAGE>






                                        1




         2.2 all rights, properties and assets of Seller used by the King
Business that shall have been transferred or disposed of by Seller to third
parties in bona fide arms-length transactions and excluding Parent and SPX prior
to the Closing in transactions conducted in the ordinary course of business,
consistent with past practice and not in breach of this Agreement;

         2.3     All intercompany or intracompany accounts or other receivables;

         2.4 All current and deferred federal, state and local income tax assets
and refunds (including interest) arising out of the conduct of the King Business
prior to the Closing;

         2.5      All rights of recovery relating to the Excluded Liabilities
and Excluded Assets;

         2.6 All amounts prepaid on any insurance policy and any rights to
recoveries under any insurance policy maintained by Seller on behalf of the King
Business prior to the Closing;

         2.7 All bank accounts, including deposits, provided, however, that any
Receivables collections received by Seller after the Closing Date shall be
remitted to Purchaser pursuant to Section 10.4 hereof;

         2.8 All rights to any trademarks, trade names and logos used by Parent,
SPX or any of their affiliates in their other business or business units, other
than "King Company" (which shall be conveyed to Purchaser as part of the
Assets), and specifically excluding from the Assets the marks "SPX" and "United
Dominion Industries" or any combination thereof;

         2.9      Except as described in Section 1.1.4, all intellectual
property owned by Parent, or SPX;

        2.10 All assets related to the selling, general and
administrative functions of the King Business afforded to the King Business by
SPX, United Dominion Industries or their affiliates as set forth on Schedule
2.___ attached hereto [please provide schedule], including any site license for
the corporate financial reporting system or other information systems or any
license held by SPX or United Dominion Industries with respect the King Business
which is not dedicated exclusively to the conduct of the King Business; and

         2.11     Seller's and Parent's rights under this Agreement and the
Related Agreements (as defined below); and

3.   Purchase Price

         3.1 Purchase Price. The purchase price payable to Seller under this
Agreement for the Assets by Purchaser shall be Two Million One Hundred
Twenty-Five Thousand and 00/100 Dollars ($2,125,000.00) (the "Purchase Price"),
subject to the net working capital adjustment set forth in Section 3.3 of this
Agreement.

         3.2 Payment of Purchase Price. On the Closing Date, the Escrow Agent
(as defined below) shall deliver to Seller in cash by wire transfer or other
immediately available funds the Purchase Price.

         3.3 Net Working Capital Adjustment to Purchase Price. The Purchase
Price shall be adjusted dollar-for-dollar, upward or downward as the case may
be, by the difference between (a) $1,423,000.00 (which is the net working
capital of Seller as of September 30, 2001) (the "Net Working Capital Target")
and (b) the net working capital of Seller as at the Closing Date (the "Actual
Net Working Capital") as determined in accordance with the principles set forth
hereinafter (the "Net Working Capital Determination").

                  3.3.1. For purposes of this Section 3.3, the results of the
physical count of the Inventory taken by Seller prior to the Closing Date, and
any additions or deletions thereto as reflected in the Books and Records and
occurring in the ordinary course of business prior to the Closing Date, shall be
used for purposes of calculating the Actual Net Working Capital; provided, that
in no event shall the value of the Inventory be reduced by slow moving or
obsolete inventory or inventory of a quality and quantity not commercially
usable and salable in the ordinary course of business

                  3.3.2 Within 60 days after the Closing Date, Purchaser will
prepare and deliver to Seller a balance sheet of the King Business as of the
Closing Date containing all items constituting the current assets and the
current liabilities of the King Business (the "Closing Date Balance Sheet")
setting forth the Actual Net Working Capital, which shall be based upon the
principles and standards set forth in Section 3.3.24. Upon receipt of the
Closing Date Balance Sheet, Seller and its authorized representatives will be
entitled to review, during normal business hours, the books, records and work
papers of Purchaser regarding the Actual Net Working Capital of the King
Business. If within thirty (30) days after receipt of the Closing Date Balance
Sheet, Seller disagrees in good faith with such computation, Seller shall give
written notice to Purchaser within such 30 day period setting forth Seller's
computation of the Actual Net Working Capital as of the Closing Date and
specifying in reasonable detail Seller's basis for its disagreement. If
Purchaser and Seller are unable to resolve any disagreement between them with in
thirty (30) days after the date of Seller's notice of disagreement, either party
may refer the calculation of the Net Working Capital Determination to the
Chicago office of PricewaterhouseCoopers ("Accountants") as promptly as
practicable, and the decision by the Accountants regarding the Net Working
Capital Determination shall be final, binding and conclusive on both Purchaser
and Seller. The parties shall use reasonable efforts to cause the Accountants to
make its determination within thirty (30) calendar days after accepting its
selection. The fees and expenses of the Accountants shall be borne equally by
the parties.

                  3.3.3. Any additional amount due and owing to one party
pursuant to the final Net Working Capital Determination shall be paid by the
other party in cash by wire transfer or other immediately available funds within
five (5) business days after the final determination of the Net Working Capital
Determination.

                  3.3.4. For purposes of the Net Working Capital Determination
under this Agreement, the following shall apply:

                  (A) For purposes of this Agreement, "net working capital"
means, as of the date of computation the difference between (i) the sum of (a)
trade accounts receivable (net of reserves for doubtful accounts), and (b)
inventory (net of reserves for damage or obsolescence), and (ii) the sum of (x)
trade accounts payable, (y) all accrued expenses incurred in the ordinary course
of business, and (z) all other current liabilities, all as calculated on a basis
consistent with the September 30, 2001 Balance Sheet of the King Business;

                  (B) The Inventory as counted by Seller prior to the Closing
Date shall be valued in a manner consistent with the September 30, 2001 balance
sheet of Seller provided to Buyer.

                  (C) The value of the Receivables shall be valued in a manner
consistent with the September 30, 2001 balance sheet of Seller provided to
Purchaser, which shall not conflict with the representations and warranties set
forth in Section 7.12; and

                  (D) The liabilities of Seller shall be those that are
expressly assumed by Purchaser pursuant to Article 5 hereof, and no adjustment
shall be made to the reserves reflected on the September 30, 2001 balance sheet
of Seller provided to Purchaser.

                  (E) The valuation of the Assets and the Assumed Liabilities
under this Section 3.4 shall be determined in a manner consistent with the
September 30, 2001 balance sheet of Seller provided to Purchaser, which shall
not conflict with representations and warranties set forth in Sections 7.4.,
7.5, 7.12 and 7.15 of the Agreement and the covenants of Seller set forth in
Section 22.8 of this Agreement.

4. Allocation of Purchase Price. Within sixty (60) calendar days after Purchaser
and Seller reach final agreement on the Closing Date Balance Sheet or the
Accountants make their determination on the Net Working Capital Determination,
as applicable, Purchaser and Seller shall use their reasonable best efforts to
reach an agreement in good faith regarding how the Purchase Price and the
aggregate dollar amount of the Assumed Liabilities shall be allocated among the
Assets for tax purposes in accordance with Section 1060 of the Code. Upon having
reached such an agreement, Purchaser and Seller shall file all tax returns and
statements, forms and schedules in connection therewith consistent with such
allocation and shall take no position contrary thereto unless required by law.
Purchaser and Seller shall treat the purchase and sale of assets under this
Agreement as an "applicable asset acquisition" within the meaning of Section
1060 of the Code, and shall prepare and timely file Internal Revenue Service
Form 8594 (and any required exhibits thereto) in a manner consistent with the
allocation of the Purchase Price under this Section 4. Notwithstanding any
allocation by the parties, Purchaser has agreed to purchase and Seller has
agreed to sell all of the Assets, and the allocation is not intended and shall
not be deemed to constitute an agreement between the parties to transfer less
than all of the Assets. Furthermore, such allocation has been made solely to
ascribe fair value to the Assets and any benefits deriving therefrom shall not
inure to any other third party.

5.   Assumption of Liabilities

         Upon the Closing Date, Purchaser shall assume or discharge the
following liabilities of Seller as and when due:

         5.1 Assumed Liabilities.  Those trade accounts payables, customer
deposits and other obligations of Seller as specifically set forth by Purchaser
 in Schedule 5.1; and

         5.2 Assumption of Assumed Contracts. The obligations and liabilities of
Seller with respect to the assignment to Purchaser of the Assumed Contracts
described in Section 1.1.3 and listed on Schedule 1.1.3.

         5.3 Limits on Assumption. Except for the assumptions or discharges of
liabilities described in Sections 5.1 and 5.2 (collectively, the "Assumed
Liabilities"), Purchaser shall not assume any other liabilities, obligations and
commitments of Seller, whether fixed or contingent, legal or equitable, mature
or inchoate, written or oral, express or implied, known or unknown, of any kind
or nature whatsoever, and the indemnification provisions contained in Article 16
of this Agreement shall apply to any liability of Seller which is not assumed by
Purchaser and which is asserted or claimed by any person against Purchaser.

         5.4. Assignment of Contracts and Rights. Notwithstanding anything in
this Agreement to the contrary, this Agreement shall not constitute an agreement
to assign any particular Material Agreement or any claim, contract, license,
lease, commitment, sales order, purchase order or any claim or right or any
benefit arising thereunder or resulting therefrom if the agreement to assign or
attempt to assign, without the consent of a third party, would constitute a
breach thereof or in any way adversely affect the rights of Purchaser or Seller
thereunder. Until such consent is obtained, or if an attempted assignment
thereof would be ineffective or would affect the rights of Seller thereunder so
that the Purchaser would not in fact receive all such rights, Purchaser and
Seller will cooperate with each other in any reasonable arrangement designed to
provide for Purchaser the benefits of, and to permit Purchaser to assume,
insofar as expressly set forth herein, the stated liabilities under the
particular Material Agreement(s) including enforcement at the request and
expense and for the benefit of Purchaser of any and all rights of Seller against
a third party thereto arising out of the breach or cancellation thereof by such
third party or otherwise. Any transfer or assignment to Purchaser by Seller of
any property or property rights or any contract or agreement which shall require
the consent or approval of a third party shall be made subject to such consent
or approval being obtained.

6. Covenant Against Competition; Nonsolicitation. In consideration of Purchaser
entering into this Agreement with Seller and Parent, Seller and Parent hereby
agree effective as of the Closing Date, and for a period of four (4) years
thereafter (the "Noncompete Period"), that Seller and Parent or any one of them
shall not, and Parent shall cause each of its controlled affiliates to not,
engage in, or provide any technical or marketing assistance to, or permit its
name to be used by any individual, organization or enterprise engaging in, the
design, development, production, manufacture, assembly, sale or distribution of
products directly competitive with the specialized air handling and air
purification equipment, and specialized heating, ventilating and air
conditioning equipment and the components thereof manufactured by the King
Business as of the Closing Date (the "Restricted Business"). The restriction in
the foregoing sentence shall not apply to the acquisition, purchase or other
procurement by Parent of any entity or any division thereof engaged in the
Restricted Business with annual consolidated gross revenues relating to the
Restricted Business of less than $5 million at the time of such acquisition,
purchase or procurement; provided, however, in the event any such acquisition,
purchase or other procurement would exceed the $5 million threshold referenced
above, Parent shall use its best efforts to dispose of the Restricted Business
within twelve months after the closing of the given transaction. Parent will be
in violation of the first sentence of this Section if, and only if, it engages
in any of the activities set forth in the first sentence hereof directly on its
own account or indirectly through any person, including, without limitation, its
partners, joint venturers, employees, agents, salespeople, consultants, officers
or directors or as an equity holder of any entity in which Parent owns, directly
or indirectly, more than fifty percent (50%) of any of the equity interests. The
parties agree that this covenant is reasonably designed to protect Purchaser's
substantial investment and is reasonable with respect to its duration,
geographical area and scope.

         6.1 No Solicitation. Seller and Parent covenant and agree that neither
they nor their affiliates shall at any time (a) from the date hereof until one
(1) year from the Closing Date solicit any Potential Employee or Accepting
Employee, as defined in Section 10.5.2, below, or (b) within a three (3) year
period immediately following the Closing Date interfere with, induce or entice
away from Purchaser any agent, representative, distributor or supplier employed
or engaged in the King Business.

         6.2 Remedies. Without waiving the Purchaser's rights to monetary
damages, all parties to this Agreement acknowledge that the breach of the
obligations contained in this Article 6 may result in substantial but
indeterminable harm to Purchaser, that the restraints imposed are reasonable,
that there may be no adequate remedy at law for a breach of such obligations,
and that therefore injunctive relief, specific performance or other equitable
remedies may be appropriate to enforce the obligations undertaken in this
Article 6. In the event that a court finds that the term, territory, or scope of
this Article 6 is too broad to be enforceable, Seller and Purchaser further
agree that a reformation of the terms of this Article 6 is appropriate and
should be undertaken by the court in order to protect the value of the Assets
being conveyed pursuant to this Agreement as a going concern, and to provide for
the enforceability of the obligations contained in this Article 6 to the fullest
extent allowed by law and equity.

7.       Representations and Warranties of Seller

         Seller represents and warrants to Purchaser as of the date of this
Agreement and as of the Closing Date as follows:

         7.1 Corporate Existence. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota.
Seller is in good standing and is qualified to transact business as a foreign
corporation in all states in which the nature of the King Business or the Assets
requires it to be so qualified. Seller has full corporate power and authority to
own, lease and operate its properties and carry on and conduct the King Business
as it is now being conducted.

         7.2 Due Authorization and Enforceability. Seller has the requisite
corporate power and authority to execute and deliver this Agreement and the Bill
of Sale, the Deed, the Patent Assignment, the Trademark Assignment and the Real
Estate Agreement, and the other documents, instruments and agreements to which
it is a party and which are to be delivered upon the Closing Date (collectively,
the "Related Agreements"), and to consummate the transactions contemplated
hereby and thereby. Parent has the requisite corporate power and authority to
execute and deliver the guaranty set forth on the signature page of this
Agreement (the "Guaranty"). The execution and delivery of this Agreement and the
Related Agreements by Seller, and the execution and delivery of the Guaranty by
Parent, and the consummation of the transactions contemplated hereby and thereby
has been duly authorized by all necessary corporate actions of Seller and
Parent, including appropriate action of the directors and of the shareholder of
Seller, and no other corporate action or proceeding on the part of Seller or
Parent is necessary to authorize the execution and delivery of this Agreement or
the Related Agreements or the Guaranty, or the consummation by Seller or Parent
(as the case may be) of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by Seller, and this Agreement and
the Related Agreements to which Seller is a party (when executed and delivered
at the Closing Date) are or will be legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms. The Guaranty
(when executed and delivered at the Closing Date) will be the legal, valid and
binding obligation of Parent, enforceable against it in accordance with its
terms.

         7.3 No Conflicts. Except as set forth on Schedule 7.3, neither the
execution and delivery of this Agreement, the Related Agreements, the Guaranty,
nor the consummation of the transactions contemplated hereby or thereby will (i)
conflict with or violate any provision of the Articles of Incorporation, Bylaws
or other Charter documents of Seller or Parent, as applicable, (ii) violate any
law, rule, regulation, ordinance, order, writ, injunction, judgment or decree
applicable to the King Business or by which any of the Assets are bound or
affected or (iii) conflict with or result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination or cancellation of,
or accelerate the performance required by or maturity of, or result in the
creation of any security interest, lien, charge or encumbrance on any of the
Assets pursuant to any of the terms, conditions or provisions of, any note,
bond, mortgage, indenture, any of the Material Agreements, or any of the Permits
set forth in Schedule 1.1.7.

         7.4 Financial Statements. Attached hereto as Schedule 7.4 are the
balance sheets of Seller for the fiscal years ended December 31, 1999 and
December 31, 2000, and as of the interim period ended September 30, 2001, and
the related statements of income, for the respective fiscal years and interim
period then ended (all of the foregoing referred to above in this Section 7.4
are herein collectively referred to as the "Seller Financial Statements"). The
Seller Financial Statements fairly present in all material respects the assets,
liabilities and financial position of Seller as of the respective dates set
forth therein and the results of operations of Seller for the respective periods
set forth therein.

         7.5 No Material Adverse Change. Since September 30, 2001, there has
been no material adverse change in the nature, business, operations, properties,
assets, liabilities (actual or contingent), of the King Business, or in the
condition (financial or otherwise) thereof, or in the manner of conducting the
King Business, or from the condition or position of the King Business as set
forth in the Seller Financial Statements, other than changes in the ordinary
course of business which in the aggregate are not material and adverse. Since
September 30, 2001, there has been no event or condition of any character which,
either individually or in the aggregate, might reasonably be expected to affect
in a material adverse manner the operations, properties, assets, liabilities or
financial condition of the King Business or the Assets. Without limiting the
generality of the foregoing, and since September 30, 2001, Seller has not:

                  7.5.1    paid any dividend, made any distribution or made any
other actual, constructive or deemed distribution in respect of the Assets;

                  7.5.2    suffered any damage, destruction or loss of any
Asset, whether or not covered by insurance, which exceeds $25,000;

                  7.5.3 sold, leased, transferred, assigned, distributed or
otherwise disposed of any tangible Asset with a value in excess of $10,000, or
any intangible Asset, except for the sale of finished goods or repair parts in
the ordinary course of business;

                  7.5.4 changed its payment practices relative to trade payables
in such a manner that the average age of Seller's trade payables outstanding at
the Closing Date would be materially inconsistent with Seller's historical
practice as reflected in the Seller Financial Statements;

                  7.5.5 offered any cash discounts on trade receivables
inconsistent with the Seller's historical practices as reflected in the Seller
Financial Statements.
         7.6 All Necessary Assets. Other than the Excluded Assets, the Assets
being sold, transferred, conveyed, assigned and delivered by Seller under this
Agreement constitute all of the assets used by Seller in the conduct of the King
Business.

         7.7 Title to Assets. Seller warrants that Seller has good and
marketable title to the Assets transferred hereunder and, upon consummation of
the transactions contemplated by this Agreement, including execution and
delivery of the Bill of Sale, the Deed, the Assignment and Assumption Agreement,
the Patent Assignment and the Trademark Assignment, or other instruments of
transfer, Purchaser will acquire title to the Assets, free and clear of all
mortgages, pledges, liens, security interests, assignments, conditional sales
agreements, encumbrances, claims or charges of any kind ("Liens"), except for
(i) Liens created by Purchaser, or (ii) the Permitted Liens. At the Closing
Date, none of the Assets will be subject to any commitment or other arrangement
for its sale or use by third parties except under Assumed Contracts. The term
"Permitted Liens" means liens for current real or personal property taxes and
installments for special assessments and other governmental charges which are
not yet due and payable or which may thereafter be paid without. Notwithstanding
anything to the contrary in this Agreement, the only representations relating to
title of the Real Property are made in the Real Estate Agreement.

         7.8 Condition of Assets. The Machinery & Equipment included in the
Assets set forth in Schedule 1.1.1 are in good operating condition and repair,
ordinary wear and tear excepted and except any such assets which are idle, in
process of changeover for new production, retained for spare parts or are idled
for scheduled or normal maintenance.

         7.9 Compliance with Laws. Except as set forth on Schedule 7.9, the
operation of the King Business and the use of the Assets comply in all material
respects with all applicable laws, ordinances, rules, decrees, orders and
regulations, including federal and state and local health and safety laws, rules
and regulations, and laws related to employment practices and payroll in effect
as of the date hereof, other than Environmental Laws (collectively the "Laws").
Except as set forth on Schedule 7.9, Seller has obtained all necessary permits,
licenses, certificates, exemptions, orders and approvals and has filed all
required notices with federal, state and local governmental bodies that are
required by applicable law for the use of the Assets and in order to conduct the
King Business as presently conducted, all of which are valid and effective on
the date of this Agreement and will be valid at the Closing Date, and all
payments, fees and costs thereof have been paid in full to the date of this
Agreement and will be paid in full at the Closing Date. Except as set forth on
Schedule 7.9, in the past five years, Seller has not received any written notice
of any violations of any Laws or regulations or any covenants or contracts with
respect to the King Business or any of the Assets, and to Seller's knowledge, no
such notice of violations is pending or has been threatened.

         7.10 Absence of Litigation. There are no judgments or other judicial or
administrative orders outstanding against Seller. Except as set forth in
Schedule 7.10, there is no action, suit or proceeding at law or in equity or by
or before any governmental or administrative instrumentality or other agency now
pending or, to the knowledge of Seller, threatened against or affecting Seller,
the Assets or any of Seller's property or rights which, if adversely determined,
might materially impair the right or ability of Seller to carry on the King
Business as it is now conducted or as proposed to be conducted by Purchaser or
would materially adversely affect the financial condition of Seller. A true and
correct summary of all suits or proceedings at law, in equity or by or before
any governmental or administrative instrumentality or other agency and other
litigation (whether material or not) pending or to Sellers knowledge, threatened
against Seller, or settled within the last five (5) years is attached hereto as
Schedule 7.10. Seller is not in violation in any material respect under any
applicable Law.

         7.11     Material Agreements.   Except as set forth on Schedule 7.11(a)
 ( the "Material Agreements") Seller is not a party to any written:

                  (a) agreement, contract or commitment providing for annual
cash payments of more than $50,000, which may not be terminated without penalty
or upon less than three months notice, with any present or former employee or
consultant, or for the employment of any Person, including any consultant, who
is engaged in the conduct of the King Business;

                  (b) agreement, contract or commitment for the required future
purchase of, or payment for, supplies or products, or for the performance of
services by a third party, used in the conduct of the King Business which has a
term of longer than one year, or requires the payment of $100,000 or more during
the remaining balance of the term thereof;

                  (c) agreement, contract or commitment to sell or supply
products or to perform services in connection with the King Business which has a
term of longer than one year, or requires the payment of $100,000 or more during
the remaining balance of the term thereof;

                  (d)      distribution, dealer, representative or sales agency
agreement, contract or commitment relating to the King Business;

                  (e)      agreement for the acquisition of any real property,
or any interest relating to real property, or any construction of any
improvement to real property involving the payment of $100,000 or more;

                  (f) lease under which Seller is either lessor or lessee
relating to the Assets or any property at which the Assets are located, and in
the case of any personal property leases, involving in any one case required
annual payments of $100,000 or more;

                  (g) agreements relating to any obligations, representations
and warranties, indemnities or commitments arising out of any prior agreements
for the merger or acquisition of Seller, which obligations, representations,
warranties, indemnifications or commitments shall have survived the closing of
such merger or acquisition;

                  (h)      commitment or agreement for any required capital
expenditure or leasehold improvement in excess of $100,000 (individually or in
the aggregate) relating to the King Business

                  (i) agreement, contract or commitment limiting or restraining
the King Business or any successor thereto from engaging or competing in any
manner or in any King Business, nor, to Seller's Knowledge, is any employee of
Seller engaged in the conduct of the King Business subject to any such
agreement, contract or commitment;

                  (j)      agreement, contract or commitment relating to joint
venture, partnerships or limited liability companies;

                  (k)      agreement, contract or commitment relating to the
acquisition by the King Business of any operating business or the equity
interests of any other business, entity or organization;

                  (l)      agreement, contract or commitment with any labor
union or association representing any employee;

                  (m)      capitalized lease, pledge, conditional sale or title
retention agreement involving the payment or receipt of more than
$100,000 annually;

                  (n)      mortgage, indenture, note, bond, letter of credit or
other agreement relating to the King Business and the borrowing of money; or

                  (o) license, franchise, distributorship or other agreement
including the required payment or receipt of more than $100,000 during the
remaining balance of the term thereof which relates in whole or in part to any
of the Intellectual Property.

         Schedule 7.11(a) is an accurate and complete list of all of Seller's
Material Agreements which Purchaser shall assume from Seller. There are no other
Material Agreements being assumed by Purchaser under this Agreement. Each of the
Material Agreements is valid and effective against Seller, and to Seller's
knowledge, the other party thereto, in accordance with its terms. True and
correct copies of the Material Agreements have been supplied to Purchaser by
Seller. Seller is not, and to Seller's knowledge, the other party to any of the
Material Agreements is not, in material default thereunder and no event has
occurred with respect to Seller and, to Seller's knowledge, with respect to the
other party thereto, which with the passage of time or the giving of notice or
both would constitute a material default under any of the Material Agreements.
Notwithstanding the foregoing, Purchaser shall not assume from Seller any of
Seller's Material Agreements which appear on Schedule 7.11(b).

         7.12 Receivables. Subject to the reserves on the September 30, 2001
balance sheet of Seller provided by Seller to Purchaser, the Receivables being
conveyed hereunder, will, at the Closing Date, be owned by Seller free and clear
of all claims, encumbrances, credits; to Seller's knowledge, backcharges and
counterclaims, setoffs and deductions, and are not subject to additional
requirements of performance by Seller, and such Receivables have not been billed
or collected for a greater percentage of the work done or materials supplied
than has actually been performed or supplied by Seller.

         7.13 Intellectual Property. Schedule 1.1.4 lists all patents,
trademarks, tradenames, service marks, registered copyrights and all
applications therefor, and all licenses, owned by Seller and used by Seller in
the conduct of the King Business. All of the Intellectual Property is owned or
lawfully used by Seller in the conduct of the King Business. None of the
Intellectual Property has been held or stipulated to be invalid in any
litigation which has been concluded, and the validity of the Intellectual
Property has not been questioned in any litigation currently pending or which,
to the knowledge of Seller, has been threatened. Seller will have assigned to
Purchaser at the Closing Date all Intellectual Property owned by Seller . The
Intellectual Property does not, to the knowledge of Seller, infringe any patent,
trademark, tradename, service mark, copyright or other rights owned by others,
nor has Seller received any written notice of conflict thereof with the asserted
rights of others in the past five years. All registration and maintenance fees
due and payable on or before the Closing Date with respect to any registered
patent, trademark, service mark, or copyright has been or will be paid prior to
the Closing Date. Each registered patent, trademark, service mark, or copyright
set forth in Schedule 1.1.4 is valid and in full force and effect, and has not
been allowed to lapse or expire by the failure of Seller to elect to continue
the registration thereof or to pay any registration or maintenance fees with
respect therewith.

         7.14 Related Party Agreements. Except as set forth on Schedule 7.14, no
affiliate, officer or director of Seller or Parent, nor any related person has,
directly or indirectly, entered into any transaction with Seller relating to the
King Business. For purposes of this Agreement, the term "related person" shall
mean and include any person related to any affiliate, officer or director of
Seller or Parent by blood or by marriage, or any corporation, partnership,
proprietorship, trust or other entity in which any officer or director of Seller
or Parent (or any spouse, ancestor or descendant of the same) has more than a
five percent (5%) legal or beneficial interest.

         7.15 Inventory. Subject to the reserves on the September 30, 2001
balance sheet of Seller provided by Seller to Purchaser, the value at which the
Inventory is shown on the Seller Financial Statement has been determined in
accordance with the standard valuation policy of Seller, consistently applied.
All items of Inventory (and their location) held at locations other than at the
Facilities or in transit at the date of this Agreement shall be fully disclosed
to Purchaser on Schedule 1.3.

         7.16 Taxes. With respect to the King Business and the Assets being
conveyed under this Agreement, Seller has filed or will file all federal, state,
county and local tax returns, including information returns, which it is
required by law to file and has paid all income, payroll, withholding, gross
receipts, excise, business and occupation, sales, use or other taxes,
assessments and other governmental charges due in respect of such returns,
except to the extent that any such taxes are being contested in good faith and
as to which adequate reserves have been set aside and Seller has accrued all
taxes not yet due. Since September 30, 2001, Seller has not incurred any taxes
other than taxes incurred in the ordinary course of business, and all such taxes
are fully reserved against on the books of Seller. Seller is not delinquent in
the payment of any amount of taxes, and there are no Liens for any taxes upon
the Assets of Seller, except Liens for current taxes not yet due that are fully
reserved for on the Seller Financial Statements . All taxes that Seller was or
is required by law to withhold or collect, have been and are being withheld or
collected by it and have been or are being held by it for such payment. All tax
returns required to be filed by or on behalf of Seller have been prepared and
filed in accordance with all applicable laws or requirements and accurately
reflect the taxable income (or other measure of tax) of the party filing the tax
returns. All such tax returns, estimates, reports and declarations are complete
and accurate and disclose all taxes required to be paid for the periods covered
thereby. Except as set forth on Schedule 7.16, no audit, action, suit,
investigation, claim, assessment or examination with respect to taxes is now
pending or currently in progress with respect to Seller and, to the Seller's
knowledge, there is no basis therefor. Seller has not received from the Internal
Revenue Service or from any other tax authority of any state, foreign, county,
local, or other jurisdiction a notice of underpayment of taxes, a proposed
assessment of taxes, a proposed adjustment to any tax return filed or other
deficiency that has not been paid.

         7.17 No Misrepresentation or Material Non-disclosures. To the knowledge
of Seller, neither this Agreement nor the Related Agreements, nor any other
document, certificate or statement furnished to Purchaser in connection herewith
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.

         7.18 No Defective Products. The products of the King Business
previously manufactured and sold by Seller have, where necessary, been qualified
under and comply in all material respects with the specifications and
requirements of applicable rating and compliance agencies and safety standards
and contain, to Seller's knowledge, no defects that will result in an epidemic
failure of the products. For purposes of this Agreement "epidemic failure" shall
mean the failure of any unit produced by the King Business, or any prime
component thereof, that results in a failure of such unit to perform as
warranted, and which failure occurs in five percent (5%) or more of the total
number of such units produced by Seller during the twelve (12) month period
prior to the Closing Date; and shall apply separately to each product model of
the King Business, or to any two or more product models of the King Business if
the failure is caused by a prime component which is common to, and in
application is identical to, two or more of the product models of the King
Business.

         7.19 Employment Activity. Seller is in material compliance with all
applicable laws respecting employment, employment practices, employment
benefits, non-discrimination in employment, and conditions of employment and
payment of wages, and is not engaged in any unfair labor practice. There is no
employment discrimination or unfair labor practice charge or complaint against
Seller pending before the National Labor Relations Board, the Equal Employment
Opportunity Commission or any other federal, state or local governmental agency
arising out of Seller's activities, and Seller has no knowledge of any facts or
information which could reasonably be expected to give rise thereto. There is no
labor strike or labor disturbance pending or threatened against Seller nor is
any grievance currently being asserted; and Seller has not experienced within
the last three (3) years a work stoppage or other material labor difficulties.

         7.20 Employee Benefit Plans To the extent reasonably requested by
Purchaser, Seller has made available to Purchaser copies of all employee benefit
plans as that term is defined in Section 3(3) of ERISA, maintained or
contributed to by Seller or Parent with respect to any of Seller's employees
(the "Seller Plans"). There are no liabilities or obligations relating to any
employee benefit plan (as that term is defined in Section 3(3) of ERISA)
maintained or contributed to by Seller, Parent or any ERISA Affiliate which
would impose a material liability on Purchaser

         7.21 No Indebtedness. Seller does not have any outstanding indebtedness
to any person or entity, except for such indebtedness as is set forth on
Schedule 7.21 attached hereto, which indebtedness shall, be fully satisfied by
Seller at the Closing. Prior to the Closing Date, the lenders of any such
indebtedness have agreed to terminate all Liens by delivery of appropriate
release documents. For purposes of the Agreement, "Indebtedness" shall mean all
interest bearing obligations which in accordance with GAAP would be included in
determining total liabilities, whether or not secured by any Lien on property
owned or acquired by Seller, and whether or not such a liability shall have been
assumed, including liabilities in respect of all capital leases determined in
accordance with GAAP, and guarantees, indemnities, endorsements (other than for
collection in the ordinary course of business) and any other contingent
obligations required to be reflected on the balance sheet of Seller in
accordance with GAAP, whether secured or not in respect to the obligations of
other persons or entities.

         7.22 Environmental Matters. Seller has all permits, licenses, and other
authorizations which are required as of the date of this Agreement and which
will be required as of the Closing Date for the operation of the King Business
under the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901, et seq., as
amended ("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss.9601, et seq., as amended ("CERCLA"), the Clean Air
Act, 42 U.S.C. ss.7401, et seq., as amended ("CAA"), the Clean Water Act, 33
U.S.C. ss.1251, et seq. ("CWA"), the Toxic Substance Control Act, 15 U.S.C.
ss.2601, et seq. ("TSCA"), Hazardous Materials Transportation Act, 49 USC 1801
et seq. ("HMTA") and any other applicable federal, state or local laws,
statutes, regulations and ordinances relating to the physical or environmental
condition of property and to the maintenance, record-keeping and disposition of
any underground tanks and relating to emissions, discharges, releases or
threatened releases, of pollutants, contaminants, petroleum oils, chemicals or
industrial, hazardous or toxic materials or waste into the environment
(including, without limitation, ambient water, surface water, groundwater, land
surface or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum oils, chemicals or industrial,
hazardous toxic materials or waste, or any order, decree or judgment issued,
entered, promulgated or approved thereunder as in effect on the date hereof (the
"Environmental Laws"). Except as set forth on Schedule 7.22 with respect to the
conduct of its business, its operations, its properties, and its use of owned
and leased properties, Seller is in compliance in all material respects with all
terms and conditions of the required permits, licenses and authorizations
necessary under the Environmental Laws, and is also in compliance in all
material respects with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws as in effect on the date hereof. There is no
pending civil or criminal litigation, notice of violation or administrative
proceeding arising out of the business or activities of Seller or any
affiliates, including without limitation any pending litigation, notice or
proceeding, relating in any way to the Environmental Laws (including notices,
demands, letters or claims under RCRA, CERCLA, CAA, CWA, TSCA, HMTA and similar
foreign, state and local laws). Except as set forth on Schedule 7.22 to Seller's
knowledge, there is no threatened civil or criminal litigation, notice of
violation or administrative action arising out of the business activities of
Seller, including without limitation, any threatened litigation, notice or
proceeding relating in any way to the Environmental Laws. Except as set forth on
Schedule 7.22 Seller is not aware of any past or present events, conditions,
circumstances, practices, incidents or actions which may give rise to any legal
liability, or otherwise form the basis of any claim, action, suit, proceeding,
hearing or investigation against or involving Seller arising out of any
violation or alleged violation of the Environmental Laws or any circumstances
which could reasonably be expected to interfere with or prevent continued
compliance with the Environmental Laws in effect on the date hereof or the
Closing Date. Except as set forth on Schedule 7.22 to Seller's knowledge, no
hazardous substances, pollutants, petroleum oils or fraction, contaminants or
hazardous waste including, but not limited to, asbestos, "PCB's" and urea
formaldehyde are contained in or have been, from any source whatsoever,
released, spilled, disposed, or deposited over, beneath or on the current
Owatanna, Minnesota facility or the Bishopville, South Carolina facility of
Seller, or on properties adjacent thereto, by Seller, or, to Seller's knowledge,
any other person.

         7.23 Approvals and Consents. Except as set forth on Schedule 7.2, no
material consent, authorization or approval of, or waiver or exemption by, or
filing with any other person or entity is required in connection with the
execution, delivery or performance of this Agreement by Seller or the
consummation by Seller of the transactions contemplated hereby.

         7.24 Insurance. Attached hereto as Schedule 7.24 is a complete and
correct list of all policies of insurance of which Seller is the owner, insured
or beneficiary, or covering the King Business or any of the Assets for any
policy period after January 1, 1999. All premiums under such policies for
periods through the date hereof have been paid and through the Closing Date will
be paid. No notice of cancellation or non-renewal with respect to or
disallowance of any claim under, or increase of the premium for any such
insurance policy has been received by Seller.

         7.25 Other Intangibles. The engineering drawings, bills of material,
manufacturing data and other intangibles conveyed to Purchaser as described in
Section 1.1.7 of this Agreement are all of such items used in the King Business
that are in the possession of Seller. There exists no actual or, to the
knowledge of Seller, threatened termination, cancellation or material limitation
of, or material modification in, the business relationship of Seller with any
customer or supplier.

         7.26 Warranties. Set forth on Schedule 7.26 attached hereto are the
current express warranty terms and disclaimers for all forms of express
warranties given (or extended express warranties sold) by Seller during the
three-year period prior to the Closing Date with respect to the King Business
for product sold or services related thereto provided by Seller. Schedule 7.26
contains the warranty claim history for the King Business for the past five
years.

8.       Representations and Warranties of Purchaser

Purchaser represents and warrants to Seller as of the date of this Agreement and
as of the Closing Date as follows:

         8.1      Corporate Existence.  Purchaser is a corporation organized and
existing in good standing under the laws of the Commonwealth of Pennsylvania.
Purchaser has full power and authority to own its assets and to carry on its
business as and where such business is now conducted.

         8.2 Due Authorization and Enforceability. Purchaser has full power and
authority to execute and deliver this Agreement and the Related Agreements to
which it is a party, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Related Agreements
to which it is a party, by Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action and no other
action or proceeding on the part of Purchaser is necessary to authorize the
execution and delivery by Purchaser of this Agreement or Related Agreements to
which it is a party or the consummation by Purchaser of the transactions
contemplated hereby or thereby. This Agreement and the Related Agreements to
which Purchaser is a party have been duly executed and delivered by Purchaser
and this Agreement and the Related Agreements to which Purchaser is a party are
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their terms.

         8.3 No Conflicts. Neither the execution and delivery of this Agreement
or the Related Agreements to which Purchaser is a party, nor the consummation of
the transactions contemplated hereby or thereby will (i) conflict with or
violate any provision of the Articles of Incorporation, Bylaws or other Charter
documents of Purchaser, (ii) conflict with or violate any law, rule, regulation,
ordinance, order, writ, injunction, judgment or decree applicable to Purchaser
or by which any of its properties or assets are bound or affected or (iii)
conflict with or result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights or termination or cancellation of, or result in the
creation of any lien, charge or encumbrance on any of their assets or properties
pursuant to any of the terms, conditions, or provisions of, any note, bond,
mortgage, indenture, permit, license, franchise agreement, lease, contract, or
other instrument or obligation to which Purchaser is a party or by which any of
Purchaser's properties or assets are bound or affected; except, in the case of
(ii) and (iii) above, for such conflicts, violations, breaches, defaults,
terminations, cancellations and accelerations which in the aggregate will not
have a material adverse effect on the ability of Purchaser to consummate the
transactions contemplated by this Agreement and the Related Agreements to which
it is a party.

         8.4 Full Disclosure. Purchaser has not received from Seller any written
documents which clearly demonstrate the material breach of the representations
or warranties made by Seller and contained in this Agreement as modified by the
disclosure schedules, or any Related Agreement, except those which have been or
will be, as the case may be, promptly disclosed by Purchaser to Seller in
writing prior to the Closing Date.

9. Survival of Representations and Warranties. The representations and
warranties made in this Agreement or pursuant hereto shall survive the execution
and delivery of this Agreement and the conclusion and closing of the
transactions contemplated hereby for a period of eighteen (18) months after the
Closing Date, except for representations in Section 7.18 (No Defective Products)
which shall survive for a period of thirty-six months (36) months.

10.      Covenants

         10.1 Retention of Records. Purchaser hereby covenants that for a period
of five (5) years following the Closing Date, Purchaser will retain, at
Purchaser's sole expense, the Books and Records of Seller relating to the
operation of the King Business prior to the Closing Date. During such period,
Purchaser will afford to Seller, its counsel and accountants, during normal
business hours, reasonable access to such books, records and other data, to the
extent that such access may reasonably be required to facilitate the preparation
by Seller of such tax returns as they may be required to file with respect to
Seller and the investigation, litigation and final disposition of any claims
which may be made against Seller. Following the expiration of such five (5) year
period, Purchaser may dispose of any such books, records and other data;
provided, however, that before disposing of any such materials it will first
notify Seller and permit Seller at its sole expense, to remove such materials.

         10.2 Further Actions. Upon the terms and subject to the conditions
hereof, each of the parties hereto agrees to use its reasonable best efforts or
take or cause to be taken all action and to do or cause to be done all things
necessary, proper and advisable to consummate the transactions contemplated by
this Agreement (provided that neither party shall be required to waive its
respective conditions precedent to closing contained in Section 12 or 13 of this
Agreement), the Related Agreements and other documents necessary to close this
transaction, and shall use its reasonable best efforts to obtain all necessary
waivers (provided that neither party shall be required to obtain any waiver of
any of the conditions precedent to closing contained in Section 12 or 13 of this
Agreement), consents and approvals and to effect all necessary registrations and
filings. In addition, Seller covenants and agrees that it will take all actions
and execute and deliver all reasonable documents, instruments, and agreements
necessary to assist Purchaser in the removal of all Liens, assuming Purchaser
has satisfied its obligations pursuant to its assumption of Seller's liabilities
as set forth in Article 5 of this Agreement.

         10.3 Press Releases. Purchaser and Seller will consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange, including the New York Stock Exchange. It is
contemplated that the parties will issue press releases to announce the
execution of this Agreement and the expected Closing.

         10.4 Receipt of Funds. After the Closing Date, each of Purchaser and
Seller shall segregate any monies or other amounts paid to either of them in
respect of receivables or assets that belong to the other party, and each party
shall promptly pay over and remit to the other party any such monies and amounts
weekly after receipt thereof. Each of Purchaser and Seller shall take all
reasonable actions, including the giving of timely notices to assure that the
covenants set forth in this Section 10.4 are faithfully and timely fulfilled.

         10.5      Employees

                  10.5.1 Potential Employees. Except for those persons listed on
Schedule 10.5.1 attached hereto, Purchaser or an affiliate of Purchaser shall
offer employment, effective as of the Closing Date, to any of Seller's personnel
then working full-time at Seller's Facilities ("Potential Employee"). Any
Potential Employee who accepts an offer of employment and who commences
employment with Purchaser upon the terms of such offer on or after the Closing
Date is an "Accepting Employee." Seller shall be responsible and liable for any
required notification and payments under the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN") for any plant closing or mass layoff occurring
up to and including the Closing Date. Purchaser shall be responsible and liable
for any required notification and payments under WARN for any plant closing or
mass layoff occurring after the Closing Date.

                10.5.2 Seller's Benefits. Purchaser will not assume or have any
liability, responsibility or obligation under any of the Seller Plans. Seller
also will be responsible and liable for the costs of administration and
compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") for any qualifying event with respect to Seller's employees occurring
before the Closing Date (collectively such costs and those set forth in the
sentence prior hereto shall be defined as "Separation Benefits"). Seller shall
cause its retirement savings plan to permit the roll-over of the account
balances of any Accepting Employee to a retirement savings plan sponsored by
Purchaser. Seller, Parent or its applicable ERISA Affiliates shall retain all
responsibility and liability for any and all benefits, obligations, and
commitments for any employee benefit plans maintained by Seller, Parent or any
ERISA Affiliate for the benefit of the employees of the King Company prior to
the Closing Date. For purposes of the Agreement, "ERISA Affiliate" means (i) any
corporation which at any time on or before the Closing Date is or was a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as Seller; (ii) any partnership, trade or business (whether
or not incorporated) which at any time on or before the Closing Date is or was
under common control (within meaning of Section 414(c) of the Code) with Seller;
and (iii) any entity which at any time on or before the Closing Date is or was a
member of the same affiliated service group (within the meaning of Section
414(m) of the Code) as either Seller, any corporation described in clause (i) or
any partnership, trade or business described in clause (ii).

                10.5.3 Purchaser's Benefits for Accepting Employees. Effective
upon the Closing, Purchaser shall employ any Accepting Employee and pay each
Accepting Employee at the same rate of pay as then in effect on the Closing
Date; provided, however, that Purchaser may subsequently modify the wages or
salaries of any Accepting Employee, whether by increase or decrease, to
accommodate annual performance reviews or in response to business or economic
circumstances. Effective as of the Closing Date, Purchaser shall offer to
Accepting Employees standard employee benefit plans currently maintained by
Purchaser for its other employees, including without limitation, medical,
dental, prescription, life, disability, retirement, vacation, holiday, and other
employee benefit plans, programs or policies, as then in effect, and subject to
the terms and conditions of such plans, programs or policies. Purchaser shall
waive any waiting periods, actively at work requirements, non-confinement
requirements, and pre-existing conditions clauses relating to benefits provided
by Purchaser that would apply to a Accepting Employees or dependent solely as a
result of being treated as a new employee of Purchaser.

                10.5.4 Claims of Accepting Employees. Seller hereby agrees to
indemnify and hold harmless Purchaser, its agents, officers or directors,
employees, and affiliates against any liabilities, costs or expenses (including
reasonable attorneys' fees) resulting from claims made by any Potential
Employees, any prior employees of Seller and/or any applicants for employment
with Seller for Separation Benefits relating to acts or omissions of Seller with
respect to employment of Potential Employees, prior employees and/or any
applicants for employment with Seller prior to the Closing Date. Purchaser
hereby agrees to indemnify Seller, its agents, officers, directors, employees
and subsidiaries against any liabilities, costs or expenses including reasonable
attorney's fees) resulting from claims made by any Accepting Employees relating
to acts and omissions of Purchaser with respect to the employment of such
Accepting Employees by Purchaser after the Closing Date.

          10.6. Name Change. No later than 30 days after the Closing Date,
Seller shall change its name so as not to use "King Company" or any variant
thereof. Purchaser agrees, after the Closing, subject to the provisions in this
Section 10.6, to affix a label covering, any of the trademarks, trade names and
logos not included in the Acquired Assets and printed on materials distributed
by the King Business, and, within ninety (90) days after the Closing Date, to
discontinue any use of such marks by the King Business. Seller may continue its
current use of the "King" name for a period not to exceed ninety (90) days on
any brochures or general marketing materials currently on hand.

         10.7 Material Changes in Operations. From the date of this Agreement
through the Closing Date, Seller shall refrain, except as otherwise allowed in
this Agreement or approved in advance by Purchaser, from (i) making any
purchases, sales or transfers of any Assets other than for the sale of finished
goods Inventory or repair parts in the ordinary course of business or Excluded
Assets; (ii) entering into any contracts, leases or commitments, or amending or
modifying any contracts, leases or commitments, other than in the ordinary
course of business; (iii) mortgaging, pledging, subjecting to lien or otherwise
encumbering any Asset; (iv) granting a pay raise, price increase or decrease or
making any change in the compensation or benefits payable to employees, agents
or sales representatives of Seller, or making any bonus payment or arrangement
other than in connection with annual performance reviews and consistent with
past practice; (v) granting any release, discharge, compromise, discount or
credit with respect to the Receivables, except in the ordinary course of
business and consistent with past practice; (vi) failing to pay any trade
payable in accordance with the terms thereof, except in the case of a bona fide
dispute regarding the goods or services provided with respect to such payable;
or (vii) violating any federal, state or local laws with respect to the
operation of the King Business or the use of the Assets. Seller shall use its
reasonable best efforts to pay all liabilities and taxes in a timely manner, to
preserve the King Business intact, to keep the services of the present officers
and key employees and to preserve the goodwill of all suppliers, customers,
sales representatives and others having material business relations with Seller.
Except with Purchaser's prior written consent, which will not be unreasonably
withheld, Seller shall not allow the coverage of any of the liability or
property insurance of the King Business to be diminished in any material
respect. Seller will exercise all due diligence in safeguarding and maintaining
secure all of the Books and Records of Seller. Seller shall not enter into,
engage in or initiate any negotiations or discussions regarding (i) a merger,
consolidation, reorganization, restructuring or similar transaction regarding
Seller or (ii) the sale, of any of Seller's capital stock or rights related
thereto or the Assets. Seller shall refrain from declaring, setting aside, or
making any non-cash dividend or other non-cash distribution with respect to any
capital stock of Seller or other rights in respect of or related thereto.

         10.8 Access to Information. Seller shall furnish to Purchaser and its
representatives reasonable access at all reasonable times to the employees,
Assets, Books and Records of Seller and shall promptly furnish all information
with respect to the King Business as Purchaser reasonably requests from time to
time.

         10. 9 Short Swing Tax Return. Purchaser shall reasonably cooperate with
Seller in its preparation of a short period tax return, and any and all other
documents as may be required by the Internal Revenue Service, for the King
Business for the period dating from the previous tax return filed by Seller
relating to the King Business and ending as of the Closing Date.

         10.10 Tax Clearances. Purchaser, at Purchaser's expense, may obtain, as
of the date of transfer of any tangible property to Purchaser, all state sales
and personal property tax clearances or similar clearances in connection with
the transactions contemplated by this Agreement in the State of South Carolina
or any other jurisdiction that Purchaser deems necessary

         10.11  No Additional Representations; Disclaimer.
                -----------------------------------------

                10.11.1 Purchaser acknowledges that neither Seller, nor any of
its Affiliates, nor any other Person acting on behalf of Seller or any of its
Affiliates (i) has made any representation or warranty, express or implied,
including any implied representation or warranty as to the condition,
merchantability, suitability or fitness for a particular purpose of any of the
assets owned by Seller or any of its Affiliates or used in their respective
businesses or (ii) has made any representation or warranty, express or implied,
as to the accuracy or completeness of any information regarding Seller or any of
its Affiliates or their respective businesses, in each case except as expressly
set forth in this Agreement or as and to the extent required by this Agreement
to be set forth in the Schedules hereto. Purchaser further agrees that neither
Seller nor any other Person will have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser, or
Purchaser's use of, any such information, including the Confidential Executive
Summary prepared by Lincoln Partners LLC and any information, document or
material made available to Purchaser or its Affiliates in certain "data rooms,"
management presentations or any other form in expectation of the transactions
contemplated by this Agreement.

                10.11.2 In connection with Purchaser's investigation of Seller
and its Affiliates, Purchaser has received from or on behalf of Seller certain
projections, including projected statements of operating revenues and income
from operations of Seller (including from the operations of the Business) and
its Affiliates for the fiscal year ending December 31, 2001 and for subsequent
fiscal years and certain business plan information for such fiscal year and
succeeding fiscal years. Purchaser acknowledges that there are uncertainties
inherent in attempting to make such estimates, projections and other forecasts
and plans, that Purchaser is familiar with such uncertainties, that Purchaser is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and plans so
furnished to it (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts), and that Purchaser shall have no claim
against Seller with respect thereto. Accordingly, Seller makes no
representations or warranties whatsoever with respect to such estimates,
projections and other forecasts and plans (including the reasonableness of the
assumptions underlying such estimates, projections and forecasts).

         10.12 Update of Schedules. Seller shall promptly disclose to Purchaser
any information contained in its representations and warranties or the
disclosure schedules that is incomplete or is no longer correct as of all times
after the date of this Agreement until the Closing Date; provided, however, that
none of such disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Seller or the disclosure schedules for the
purposes of this Agreement, unless Purchaser shall have consented thereto in
writing; provided, further, that the sole remedy to Purchaser if it fails or
refuses to consent to such an update shall be the right to terminate this
Agreement by notice to Seller within five (5) business days after receipt of the
revised disclosure schedules with an extension of the Closing Date if delivered
less than five (5) business days prior to Closing.

         10.13 Environmental Matters. Subject to the requirements of
Environmental Laws, Purchaser and its affiliates and their respective officers,
directors, employees, agents and representatives agree not to directly or
indirectly communicate with, contact, solicit, prompt, suggest to or otherwise
encourage or cause any governmental authority to order or otherwise require the
investigation, remediation or clean-up of environmental conditions affecting the
King Business or the Real Property.

         10.14. Sales Taxes Notwithstanding any other provision in this
Agreement, any sales or use Taxes imposed by reason of the transfers of Assets
provided in this Agreement and any related deficiency, interest or penalty shall
be borne by Purchaser.

11. Closing. The closing of the transaction contemplated by this Agreement (the
"Closing") shall be held on December 31, 2001 or such other date as mutually
agreed by the parties, at the offices of Purchaser or at such other place or by
means of facsimile transmission and wire transfer of funds as the parties may
agree. The effective time of the Closing shall be 11:59 p.m., Eastern time, on
the Closing Date. On the date of this Asset Purchase Agreement, each of
Purchaser and Seller shall deliver to Chicago Title Insurance Company who shall
act as escrow agent for the Closing (the "Escrow Agent"), originals of all of
the instruments, agreements, certificates and documents set forth in this
Section 11, and as otherwise mutually agreed to by Purchaser and Seller
("Closing Documents") together with the amount of the Purchase Price under this
Agreement and under the Real Estate Agreement and any other funds to be paid by
Purchaser or Seller hereunder or thereunder (the "Escrowed Funds"). The Escrow
Agent shall hold the Closing Documents and the Escrowed Funds in trust until the
Closing Date, and shall, release the Closing Documents and the Escrowed Funds to
the appropriate party in accordance with the provisions of the Escrow Agreement
in the form attached hereto as Exhibit 11.1.

12.      Conditions to Purchaser's Obligation to Complete Closing

         The obligation of Purchaser to purchase and pay for the Assets at
Closing shall be subject to the satisfaction, prior to or concurrently with the
Closing Date, of each of the following express conditions precedent, unless
waived by Purchaser:

         12.1.    Consents and Releases.  Seller shall have delivered to Escrow
Agent the release of letter executed by Chase Manhattan so that the Assets may
be transferred by Seller to Purchaser free and clear of all liens
and encumbrances.

         12.2.    Accuracy of Representations.  The representations and
warranties of Seller set forth in Section 7.7 (Title to Assets) and Section 7.8
(Condition of Assets) shall be true and correct in all material respects at the
Closing Date.

         12.3. No Prohibition. No order, statute, rule, regulation, executive
order, injunction, stay, decree or restraining order shall have been enacted,
entered, promulgated or enforced by any court or competent jurisdiction or
governmental or regulatory authority or instrumentality that prohibits the
consummation of the transactions contemplated hereby.

         12.4.    Bankruptcy.  Seller shall not be the subject of a petition for
reorganization or liquidation under the Federal bankruptcy laws, or under state
insolvency laws, nor shall an assignment for the benefit of creditors or any
similar protective proceeding or act or event of bankruptcy have occurred.

13.      Conditions to Seller's Obligation to Complete the Closing

         The obligation of Seller to sell and convey the Assets at the Closing
shall be subject to the satisfaction, prior to or concurrently with the Closing
Date, of each of the following express conditions precedent:

         13.1.    Accuracy of Representations.  The representations and
warranties of Purchaser shall be true and correct in all material respects at
the Closing Date, and for Purchaser shall have complied with all of its
covenants set forth in this Agreement.

         13.2. No Prohibition. No order, statute, rule, regulation, executive
order, injunction, stay, decree or restraining order, shall have been enacted,
entered, promulgated or enforced by any court or competent jurisdiction or
governmental or regulatory authority or instrumentality that prohibits the
consummation of the transactions contemplated hereby.

14.       Bulk Transfer. The parties agree to waive compliance with the
requirements of any applicable bulk sales law provisions of the Uniform
Commercial Code  of the jurisdictions in which the Assets are situated or which
may otherwise be applicable to the transactions contemplated  hereby.

15.      Amendment and Waiver

         15.1.    Amendment.  This Agreement may be amended only by a writing
executed by the authorized representatives of Purchaser and Seller.

         15.2. Waiver. Any party hereto may (a) agree to extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (c) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the part
of the party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the authorized representative of
such party.

16.      Indemnification

         16.1. Purchaser Indemnification. Purchaser hereby agrees to indemnify
and hold Seller harmless, from and against any and all loss, liability (whether
known or unknown, actual or contingent, legal or equitable, mature or inchoate,
as guarantor or principal obligor, howsoever arising), claim, damage and
expense, including, but not limited to, reasonable attorneys' fees and amounts
reasonably expended in settlement of litigation, pending or threatened, arising
out of or relating to: (i) any liabilities or obligations relating to the
Assumed Liabilities (as defined in Section 5.1); (ii) any misrepresentation or
breach of any of Purchaser's representations, warranties, covenants or
agreements set forth in this Agreement, the Related Agreements, the Real Estate
Agreement or any certificate, instrument or document delivered by Seller at the
Closing; (iii) the acts and omissions of the Purchaser and its affiliates
relating to the operations, ownership or conduct of the King Business, the
Assets or the Real Property after the Closing Date; (iv) any liabilities or
obligations relating to any breach by Purchaser, its affiliates or successors or
assigns of the provisions of the Noncompetition Undertaking dated October 27,
2000 by Parent in favor of Lumen, L.L.C., including, without limitations, any
litigation or proceedings by Lumen, L.L.C. or its predecessors, successors or
assigns relating to such Noncompetition Undertaking; or (v) any liabilities or
obligations relating to any enforcement or threatened enforcement by Purchaser,
its affiliates, successors or assigns of the Noncompetition Undertaking dated
October 27, 2000 by Thomas L. Miller and Tom Miller Investment, LLC in favor of
Parent.

         16.2. Seller Indemnification. Seller hereby agrees to indemnify and
hold Purchaser harmless from and against any and all loss, liability (whether
known or unknown, actual or contingent, legal or equitable, mature or inchoate,
howsoever arising), damage and expense, including but not limited to reasonable
attorneys' fees and amounts reasonably expended in settlement of litigation,
pending or threatened, arising out of or relating to: (i) any liabilities
arising at or prior to Closing, or any events occurring at or prior to Closing
giving rise to liability before or after the Closing, relating to Seller, the
Assets or the Acquired Businesses other than the Assumed Liabilities (as defined
in Section 5.1); (ii) any misrepresentation or breach of any of Seller's
representations, warranties, covenants or agreements set forth in this
Agreement, the Related Agreements, the Real Estate Agreement or any certificate,
instrument or document delivered by Seller at the Closing, or (iii) any
liabilities of Seller arising subsequent to the Closing (whether such
liabilities were known, unknown or could not be known by Seller at or prior to
Closing) except for the Assumed Liabilities (as defined in Section 5.1).

         16.3.    Procedure of Indemnification

                  16.3.1. Neither Purchaser nor Seller are required to take any
action or make any claim to any third person as a precondition of seeking
indemnification from the other(s) hereunder. The party seeking indemnification
(the "Claimant") shall promptly give notice to the indemnifying party or parties
of any matter or item which forms a basis for indemnification hereunder (a
"Claim"). The Claimant shall afford the indemnifying party or parties, or their
authorized representatives, the opportunity to defend, discharge or compromise
such Claim and examine the books and records of the Claimant insofar as they
relate to such Claim and to copy or make extracts therefrom, and will (at the
expense of the indemnifying party) provide full cooperation of itself and its
employees and agents with respect to such Claim. At an indemnifying party's
request and expense, the Claimant will assign any claims or rights which the
Claimant may have against any third party in an action against the third
parties, and, at the indemnifying party's expense, the Claimant will cooperate
fully with the indemnifying party in pursuing any such claim or right.

                  16.3.2. The indemnifying party or parties may, within thirty
(30) days after the Claimant has given notice of the Claim, give notice to the
Claimant that the indemnifying party or parties intend to litigate or otherwise
attempt to resolve the claim identified in the Claimant's notice. Upon such
notice from the indemnifying party or parties to the Claimant: (i) the
indemnifying party or parties, or any of them, shall have the right, at their
sole cost and expense and without liability, cost or expense, to Claimant, to
prosecute any such proceeding, defend any such Claim or otherwise attempt to
resolve the Claim (including, but not limited to, settling such claim by paying
all amounts in settlement), and (ii) Claimant shall have the right to
participate at its expense in the defense of any such Claim. The indemnifying
party or parties shall keep the Claimant appraised of all material developments
in connection with any such Claim.

                  16.3.3. So long as any indemnifying party shall make a
determination that monies are payable by Claimant to a third person, the
indemnifying party or parties will not be obligated to pay to Claimant the
monies so claimed.

                  16.3.4. Notwithstanding the foregoing Section 16.3.3; if as a
result of any Claim, a judgment is entered against Claimant in a court of
competent jurisdiction, or a lien attaches to any property or asset of Claimant,
or any injunction, order or decree is obtained in any court of competent
jurisdiction which materially and adversely affects or threatens to materially
affect the assets, property, business or operations of Claimant, Claimant will
be entitled to discharge, compromise or settle such Claim in good faith without
the consent of the indemnifying party or parties.

                  16.3.5. All amounts incurred or paid by the Claimant for which
it is entitled to indemnification by the indemnifying party or parties pursuant
to the terms and conditions of this Agreement shall be promptly reimbursed to it
by the indemnifying party or parties if not reimbursed within thirty (30) days
of written request therefor, Claimant shall have the right to offset from any
other amounts it owes or may owe to the indemnifying party or parties. In the
event Claimant collects or retains an amount in excess of the amount of claim or
lien, including reasonable costs and expenses including attorneys' fees,
Claimant shall return such funds to the indemnifying party. Claimant shall
cooperate in accordance with its best business judgment, in attempting to cause
third parties who are liable to it or to the indemnifying party, to cause such
third parties to reimburse the indemnifying party for payment made by it to
Claimant; and Claimant shall subrogate the indemnifying party to Claimant's
rights against third parties, with respect to claims paid by the indemnifying
party to Claimant.

         16.4.    Insurance  Effect.  If a claim of an indemnified party is
covered by insurance of a party, the indemnified Party agrees to use reasonable
efforts to recover the amount of such claim from the insurer before seeking
indemnification hereunder.

         16.5.    Limitations.  Anything to the contrary in this Article XVI
notwithstanding:

                  16.5.1. The party entitled to indemnification shall take all
reasonable steps to mitigate indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to give
rise to any liabilities and damages that are indemnifiable hereunder.

                  16.5.2. To the extent that the indemnifying party discharges
any claim for indemnification hereunder, such party shall be subrogated to all
rights of the indemnified party and its affiliates against third parties.

                  16.5.3 Anything to the contrary contained herein
notwithstanding, Purchaser shall not be entitled to any recovery from Seller for
the breach of any representation or warranty or any covenant contained in this
Agreement until Purchaser has incurred claims, calculated on a cumulative basis
and not a per item basis (the "Basket Amount"), shall exceed $50,000, at which
time all claims in excess of the Basket Amount may be claimed, but in no event
shall Seller and/or Parent be liable to Purchaser, in an aggregate amount in
excess of $1,600,000 (the "Cap Amount") for such claims; provided, however, that
any claims for the breach of Seller's representations and warranties set forth
in Section 7.7 and in the Real Estate Agreement shall be limited to $4,000,000.
The Basket Amount and Cap Amount shall not be applicable to claims arising from
any willful misconduct or fraud by Seller. Purchaser shall have no right to
indemnification under this Article 16 with respect to any Claim to the extent
Purchaser shall have received an adjustment to the Purchase Price under the Net
Working Capital Determination on account of such Claim.

         16.6. Exclusive Remedy. The remedies provided in this Article 16 shall
be the parties sole and exclusive remedy under this Agreement and the Related
Agreements, except for (a) remedies expressly set forth elsewhere in this
Agreement (b) any specific performance or injunctive relief to which a party may
be entitled to under applicable law so long as claims for specific performance
or injunctive relief are made within thirty-six (36) months of the Closing Date.
The provisions of this Article 16 shall survive the consummation of the
transactions contemplated by this Agreement.

17. Notices. Any notices or other communications required or permitted hereunder
or otherwise in connection herewith shall be in writing and shall be deemed to
have been duly given when delivered in person , on receipt after dispatch by
express, registered or certified mail, postage prepaid, addressed as follows:

If to Seller:              The King Company
                           c/o Specialty Engineered Products Group
                           SPX Corporation
                           100 Corporate North
                           Suite 207
                           2801 Lakeside Drive
                           Chicago, IL 60015
                           Attention: Roya Behnia, Esq.
                           Telecopy Number: 847.604.3121

with copy to:              SPX Corporation
                           700 Terrace Point Drive
                           Muskegon, MI   49443-3301
                           Attention: General Counsel
                           Telecopy Number: 231.724.5940

with copy to:              Gardner, Carton & Douglas
                           321 North Clark Street
                           Suite 3400
                           Chicago, IL   60610
                           Attention:  Stephen A. Tsoris, Esq.
                           Telecopy Number: 312.644.3381

If to Purchaser:  Mestek, Inc.
                           260 North Elm Street
                           Westfield, Massachusetts 01085
                           Attention: John W. Kaddaras, Vice President
                           Telecopy Number: 413.568.7428

with copy to:              Mestek, Inc.
                           260 North Elm Street
                           Westfield, Massachusetts 01085
                           Attention: Timothy P. Scanlan, Esq.
                           Telecopy Number: 413.568.7428

or such other address as the person to whom notice is to be given has furnished
in writing to the other parties.

18.      Further Assurance -- After Closing

         18.1. Assurance of Seller. At any time and from time to time after the
Closing Date, at Purchaser's request and without further consideration, Seller
shall cooperate in good faith and promptly execute and deliver all such further
instruments or documents and perform such other and further acts as Purchaser
may reasonably request is in order to fully conclude the purchase and sale
contemplated hereby.

19.      Confidentiality

         19.1. Proprietary information. Purchaser acknowledges its receipt of
substantial information from Seller concerning the King Business pursuant to the
Confidentiality Agreement dated July 16, 2001. All such information is
hereinafter called the "Proprietary Information".

         19.2. Nondisclosure. Seller acknowledges that it is now in possession
of the same Proprietary Information concerning the King Business as described
above in Section 19.1. Seller agrees to keep all of the Proprietary Information
confidential after the Closing Date in accordance with the terms of the above
Confidentiality Agreement, except such Proprietary Information that becomes
public information without the fault of Seller.

         20. Entire Agreement -- Binding Effect. This Agreement (together with
the Exhibits and Schedules hereto, the Related Agreements and the other
agreements executed at the Closing) sets forth the entire integrated
understanding and agreement of the parties with respect to the subject matter
hereof and supersedes all prior agreements whether written or verbal. This
Agreement may not be modified, amended or terminated except in a writing signed
by all of the parties hereto.

21. Assignment. No party to this Agreement shall have the right to assign any of
its rights and obligations hereunder without the prior written consent of the
other parties hereto; provided, however, that either party may assign its
rights, remedies, and obligations hereunder to any of its subsidiaries upon
prior written notice to the other party; provided, however, that any such
assignment shall not release the assigning party from any liability or
obligation hereunder. To the extent that such consent is given, this Agreement
and all provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

22.      Miscellaneous

         22.1.    Expenses.  Except as otherwise  agreed herein,  each party
hereto shall bear its own expenses  incurred in connection with this Agreement
and the consummation of the transactions contemplated hereby.

         22.2. Counterparts; Facsimile. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original instrument,
but all such counterparts together shall constitute one and the same instrument.
The Agreement may be executed and delivered by facsimile transmissions, and a
facsimile signature of any party shall be effective as an original signature.

         22.3.    Governing Law.  This Agreement is being made in and shall be
governed by and construed and enforced in accordance with the laws of the State
of Illinois and the United States of America, except for the conflicts laws of
those jurisdictions.

         22.4. No Third Party Rights. This Agreement, the Related Agreements and
the other agreements entered into at the Closing are solely for the benefit of
the parties hereto. No third person shall acquire any rights or claims by reason
of or under this Agreement, the Related Agreements or the other agreements
entered into at the Closing.

         22.5. Severability. Should any terms, provision or clause hereof, or of
any other agreement or document which is required by this Agreement, be held to
be invalid, such invalidity shall not affect or render invalid any other
provisions or clauses hereof or thereof the consideration or mutuality of which
can be given effect without such invalid provision, and all of which shall
remain in full force and effect. If any provision of this Agreement is so broad
as to be unenforceable, such provision shall be interpreted to be only so broad
as is enforceable under applicable law.

         22.6.    Headings.  The headings to the sections of this Agreement are
inserted for convenience and reference only and are not intended to define or
limit the substance of any section.

         22.7.    Singular and Plural.  Singular terms in this Agreement may be
 deemed to include plural, and plural terms to include the singular.

         22.8. Brokerage Fees. Neither Seller nor Purchaser, nor any of their
officers, directors or employees, has incurred any liability for any brokerage
fees, commissions, finders' fees or similar fees or expenses for which either
Seller or Purchaser may be liable, and each party shall indemnify the other for
any obligations therefor or related thereto. Seller acknowledges that it has
engaged Lincoln Partners as an advisor to this transaction, and Seller shall be
responsible for any payments to Lincoln Partners arising out of the transactions
contemplated by this Agreement and the Real Estate Agreement.

         22.9.    Exhibits and Schedules.  The exhibits and schedules referenced
in this Agreement and attached hereto shall be deemed to be a part of this
Agreement and are incorporated herein by this reference.

         22.10.   Knowledge.  "Knowledge" or "awareness" or words of similar
import means the actual knowledge of the management of Purchaser or Seller, as
the case may be, consisting, with respect to  the individuals identified in
Schedule 22.10.

           22.11.   Dispute Resolution.

                  22.11.1 Mediation. With respect to any dispute, claim or
controversy between the parties arising out of or relating to this Agreement,
the parties agree that they will attempt in good faith to resolve the matter
through negotiation. Any party may initiate mediation by giving the other party
written notice of any matter the party giving notice contends is in dispute. The
party initiating mediation shall also serve a copy of the written notice on the
mediator by in hand delivery, express delivery with proof of receipt, or
certified mail, return receipt requested. Within thirty (30) days of receiving
the initial notice described above, the other party shall serve a written
response to the request for mediation. The responding party shall also serve a
copy of the written response on the mediator. However, a party's failure to
serve a response will not delay the mediation schedule. The notice and response
shall contain a detailed description of the parties' positions as to the matter
or matters in dispute. The parties will cooperate with the mediation service and
with one another in selecting a neutral mediator and in scheduling the mediation
proceedings. The parties covenant that they will use commercially reasonable
efforts in participating in the mediation. The parties agree that the mediator's
fees and expenses and the costs incidental to the mediation will be shared
equally between the parties. The parties further agree that all offers,
promises, conduct and statements, whether oral or written, made in the course of
the mediation by any of the parties, their agents, employees, experts and
attorneys, and by the mediator and any employees of the mediation service, are
confidential, privileged and inadmissible for any purpose, including
impeachment, in any litigation or other proceeding involving the parties,
provided that evidence that is otherwise admissible or discoverable shall not be
rendered inadmissible or non-discoverable as a result of its use in the
mediation. Either party may commence an arbitration proceeding in accordance
with Section 22.11.2 with respect to the matter submitted to mediation at any
time after the completion of the initial mediation session, or ninety (90) days
after the date of filing the written request for mediation, whichever occurs
first.

                  22.11.2 Arbitration. Any controversy, dispute or claim arising
out of or relating in any way to this Agreement or the transactions arising
hereunder which has not been resolved pursuant to Section 22.11.1 shall be
settled exclusively by arbitration in the City of Chicago, Illinois. Such
arbitration shall be administered by the American Arbitration Association
("AAA") in accordance with its then prevailing rules, by one independent and
impartial arbitrator who shall be admitted to practice law and shall be in good
standing or on retirement status in any of the United States, and as selected in
accordance with such rules. Notwithstanding anything to the contrary provided in
Section 15.8 hereof, the arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. ss. 1 et seq. The fees and expenses of the AAA and the
arbitrator shall be shared equally by the parties and advanced by them from time
to time as required; provided that at the conclusion of the arbitration, the
arbitrator shall award costs and expenses (including the costs of the
arbitration previously advanced and the fees and expenses of attorneys,
accountants and other experts) to the prevailing party. No pre-arbitration
discovery shall be permitted, except that the arbitrator shall have the power in
his sole discretion, on application by any party, to order pre-arbitration
examination solely of those witnesses and documents that any other party intends
to introduce in its case-in-chief at the arbitration hearing. The parties shall
instruct the arbitrator to render his award within thirty (30) days following
the conclusion of the arbitration hearing. The arbitrator's decision and award
shall be in writing, setting forth findings of facts and conclusions of law with
respect to all material issues raised in the arbitration proceeding and in the
parties submittals to the arbitrator. The arbitrator shall not be empowered to
award to any party any damages of the type not permitted to be recovered under
this Agreement in connection with any dispute between or among the parties
arising out of or relating in any way to this Agreement or the transactions
arising hereunder, and each party hereby irrevocably waives any right to recover
such damages. Notwithstanding anything to the contrary provided in this Section
and without prejudice to the above procedures, either party may apply to any
court of competent jurisdiction for temporary injunctive or other provisional
judicial relief if such action is necessary to avoid irreparable damage or to
preserve the status quo until such time as the arbitrator is selected and
available to hear such party's request for temporary relief. The award rendered
by the arbitrator shall be final and not subject to judicial review and judgment
thereon may be entered in any court of competent jurisdiction.

                      [Signature page immediately follows]





<PAGE>



29Apr02 - 11:53AM


         IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement on the date first above written.



SELLER:

                         THE KING COMPANY



                         By:____________________________



PARENT:
                         UNITED DOMINION INDUSTRIES INC.



                         By:____________________________



PURCHASER:
                         MESTEK, INC.



                         By:____________________________




<PAGE>


                                    GUARANTY



         The undersigned ("Guarantor"), being the indirect parent of Seller, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby continuously, irrevocably, unconditionally and absolutely
guarantees the prompt payment and performance when due of all obligations of
Seller under this Asset Purchase Agreement and the Real Estate Agreement.



                         UNITED DOMINION INDUSTRIES INC.



                         By:____________________________





<PAGE>


                            STOCK PURCHASE AGREEMENT


         THIS AGREEMENT (the "Agreement") is made as of this ____ day of July,
2001, by and between Formtek, Inc., a Delaware corporation ("Purchaser"); and
Roger K. Steel, Richard D. Nelson, John B. Strang and Vivian Steel (collectively
the "Sellers") who collectively own twelve (12) shares of the Stock (the
"Shares"), which is all of the issued and outstanding capital stock (the
"Stock") of SNS Properties, Inc., an Ohio corporation. The Purchaser and Seller
are sometimes collectively referred to herein as the "Parties", and either one
of the Parties is sometimes referred to as a "Party".`

                                   WITNESSETH

         WHEREAS, the Sellers are all of the beneficial and record owners of the
issued and outstanding shares of the Stock;

         WHEREAS, SNS Properties, Inc., by and through its subsidiary,
Krasny-Kaplan Corporation and its divisions Yoder Manufacturing and Mentor AGVS
(collectively, the "Company"), is engaged in the business of designing,
manufacturing, fabricating, assembling, and selling roll forming equipment, tube
mills, pipe mills, custom engineered material handling equipment, automated
guided vehicle systems, and related machinery and equipment and repair parts
under the trade names "Yoder"(R), "Krasny Kaplan" and "Mentor" (the "Acquired
Businesses");

         WHEREAS, Sellers have through their collective efforts contributed to
the growth and value of the Company's intangible assets, which growth the
Parties expect to continue for several years after the consummation of the
transaction contemplated herein;

         WHEREAS, pursuant to this Agreement, Seller shall cause the Company to
divest itself of its subsidiary, North Coast Distributing, Inc. prior to the
closing of the transactions contemplated by this Agreement, reserving unto the
Company the assets, rights and properties of the Acquired Businesses;

         WHEREAS, the Company will retain or possess as of the closing all such
assets, goodwill, properties and contractual and other rights that have been
used to conduct the Acquired Businesses (the "Assets"); and

         WHEREAS, Purchaser desires to purchase all of the issued and
outstanding shares of the Stock from Sellers, and Sellers desire to sell the
Shares to Purchaser, upon the terms and conditions specified in this Agreement
(the "Transactions").

         NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the Parties
hereto, intending to be legally bound, hereby agree as follows:


<PAGE>



                                       137
29Apr02 - 11:53AM


                                    ARTICLE I
                             PURCHASE OF THE SHARES

         Sellers hereby agree to sell, assign, transfer, and convey to
Purchaser, for the consideration set forth and payable in accordance with the
provisions of Article II of this Agreement, all of Sellers= rights, title, and
interest in and to the Shares, free and clear of all liens, encumbrances and
adverse charges of any nature whatsoever. The actual consummation of the
Transactions contemplated by this Agreement (the "Closing") shall take place on
June 29, 2001 at 9 a.m. at the offices of Mansour Gavin Gerlack & Manos Co LPA
or such other date or at such other place as shall be otherwise agreed by the
Parties (the "Closing Date"). At the Closing, Sellers shall deliver to Purchaser
certificates representing the Shares validly endorsed in blank or accompanied by
stock powers properly executed with respect to such Shares.

                                                     ARTICLE II
                                                   PURCHASE PRICE

         2.1 Consideration. Subject to the terms and conditions set forth
herein, Purchaser hereby agrees to pay to Sellers at the Closing, as
consideration for the purchase of the Shares and for Sellers= representations,
warranties and covenants contained herein, the amount of Twelve Million One
Hundred Thousand and 00/100 Dollars ($12,100,000.00) in cash or other currently
available funds payable as set forth in Section 2.2 of this Agreement (the
"Purchase Price").

         2.2 Payment of Purchase  Price.  On the Closing Date  (defined in
Article IX below),  Purchaser  shall pay the Purchase  Price as follows:

                  (a) the amount of Two Million One Hundred Thousand and 00/100
Dollars ($2,100,000.00) ("Escrow Amount") to the account of Chicago Title
Insurance Company to be held and distributed in accordance with the terms of the
Escrow and Disbursement Agreement dated as of June 29, 2001 and substantially in
the form attached hereto as Exhibit 2.2(a);

                  (b) the outstanding principal balance of all of the Debt of
the Company, plus accrued interest through the Closing Date, and any related
fees or charges, including the Debt appearing on Schedule 3.22, to the holder(s)
of such obligations;

                  (c) the amount of  $______________ to the account of
Mansour,  Gavin Gerlack & Manos Co., L.P.A.,  Sellers' attorneys for fees
incurred in respect of the Transaction;

                  (d) the amount of  $______________  to the account of
________________,  Sellers'  accountants  for fees incurred in respect of the
Transaction; and



<PAGE>


                  (e) the balance of the Purchase Price to each of Sellers in
respect of their individual percentage interest in the Shares, and in the
amounts set forth opposite their names as provided in Schedule 2.2(b).


         2.3 Transfer of Funds. All amounts of Purchase Price payable at Closing
under this Agreement shall be wired according to the instructions provided in
writing to Purchaser by the intended recipient of such funds as assembled into
Schedule 2.3 attached hereto.

         2.4 Adjustment of the Purchase Price. The Purchase Price shall be
adjusted dollar-for-dollar for any reduction or increase in the net worth
(defined as the excess of the total assets over the total liabilities exclusive
of the Debt (as defined below)) of the Company as of the Closing Date ("Final
Net Worth") from a net worth of Four Million Seven Hundred Thousand and 00/100
($4,700,000) ("Net Worth Target") provided, however, that there shall be no
adjustment to the Purchase Price unless the reduction or increase (as the case
may be) in the Final Net Worth exceeds Three Hundred Thousand ($300,000) Dollars
("Net Worth Basket").

                           2.4.1 On the Closing Date,  (a) the Inventory of the
Company (as defined in Section 3.25 of this  Agreement)
shall be physically counted according to procedures acceptable to Purchaser and
Sellers and valued as set forth in Section 3.25 hereof and (b) the Company shall
close its books and make such accounting entries and closing adjustments as
would be necessary or desirable to prepare the Closing Date Financial Statement
(as defined below).

                           2.4.2  Within  ninety  (90) days after the  Closing
Date,  financial  statements  of the  Company as at the
Closing Date ("Closing Date Financial Statement") shall be prepared by Purchaser
(or the Purchaser shall cause the Company to prepare such Closing Date Financial
Statement) pursuant to the principles set forth in Section 2.4.4. On the basis
of the Closing Date Financial Statement, Purchaser shall make a determination of
the "Final Net Worth" of the Company (the "Purchaser's Net Worth Determination")
and shall communicate it and the Closing Date Financial Statement to Seller in
writing. If Sellers disagree with Purchaser's Net Worth Determination, Sellers
may so advise Purchaser within thirty (30) days of receiving the Purchaser's Net
Worth Determination, failing which the Purchaser's Net Worth Determination shall
become the conclusive determination of the Final Net Worth. If Sellers do advise
Purchaser that they disagree with Purchaser's Net Worth Determination, the
parties shall endeavor to reach an agreement on the Final Net Worth of the
Company. If the parties cannot agree on the Final Net Worth of the Company
within one hundred fifty (150) days after the Closing Date, an independent
certified public accountant shall be selected by the parties, and such
independent certified public accountant's determination of the Final Net Worth
of the Company shall be conclusive, final and binding on both parties. Any such
independent certified public accountant's costs and fees shall be shared equally
by the parties.



<PAGE>


                           2.4.3 If the Final Net Worth of the  Company as at
the Closing  Date,  subject to the Net Worth  Basket,  is
either greater than or less than the Net Worth Target, then the purchase price
shall be adjusted upward or downward as the case may be, dollar for dollar, by
the amount which the reduction or increase (as the case may be) in the Final Net
Worth of the Company over the Net Worth Target exceeds the Net Worth Basket (the
"Adjustment") and (a) if the Adjustment is in excess of the Net Worth Target,
Purchaser shall pay Sellers, or (b) if the Adjustment is less than the Net Worth
Target, Purchaser shall offset the difference against the amount of money held
in escrow upon the acceptance or determination of the Final Net Worth of the
Company as provided in Section 2.4.2 above. The acceptance or determination of
the Final Net Worth of the Company, the Closing Financial Statements, and the
calculation of the adjustment to the Purchase Price, if any, shall be set forth
in a memorandum of understanding prepared and executed by the authorized
representatives of each other parties (the "Memorandum of Understanding").

                           2.4.4 For purposes of the determination of the Final
Net Worth of the Company  under this Section 2.4, the following shall apply:

                                    (a)    The provisions of the representations
and warranties of Sellers set forth in Article III shall be applied to the
assets, liabilities, and operations of the Company.

                                    (b) Except as otherwise set forth herein,
the value of the assets and  liabilities  of the Company shall be calculated as
at the Closing Date in accordance with generally accepted accounting principles
 ("GAAP"), consistently applied;

                                    (c) The Intellectual  Property (as defined
in Section 3.14 below),  the equipment of the Company as described in Section
3.25 below and the former assets of North Coast  Distributing,  Inc. set forth
on Schedule  3.28,  shall be valued at their respective book values; and

                                    (d) The  Inventory  (as defined in Section
3.24  below) as counted at or around the  Closing  Date shall be valued as set
forth in Section 3.24 of this Agreement.


                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

         All representations and warranties contained herein shall survive the
Closing until such time(s) as stated in Article XVI, and none shall merge into
any Closing document. Any reference in this Article III to "Seller's Knowledge"
shall mean that the Sellers actually knew, or should have known of, the
information which is the subject of such qualification. Sellers represent and
warrant the following as of the date of this Agreement and as of the Closing
Date:

         3.1  Corporate Organization.



<PAGE>


                  3.1.1 Company. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Ohio. The
Company has full corporate power and authority to own, lease and operate its
properties and to carry on and conduct the Acquired Businesses and is in good
standing and is qualified to transact business as a foreign corporation in all
states in which the nature of the Acquired Businesses or the Assets require it
to be qualified. All corporate actions undertaken by the Company and requiring
under applicable law the approval, consent or ratification of the board of
directors and the shareholders of the Company, or any one of them, has been
approved, consented to or ratified at a meeting duly called and held, or by
unanimous written consent by the Company=s board of directors or shareholders,
as the case may be. Schedule 3.1.1 sets forth a list of the jurisdictions in
which the Company is organized, and each jurisdiction in which it is qualified
to conduct business as a foreign corporation. The Company is in good standing
under the laws of the states listed under their names in Schedule 3.1.1.

                  3.1.2 Subsidiaries. Schedule 3.1.2 contains a complete and
accurate list of all of the subsidiaries of the Company; excluding, however,
North Coast Distributing, Inc. (the "Subsidiaries"). Each Subsidiary of the
Company is a corporation or other legal entity duly organized, validly existing
and (if applicable) in good standing under the laws of the jurisdiction of its
organization and has all requisite corporate, partnership or similar power and
authority to own its properties and conduct its business and operations as
currently conducted. All corporate, partnership or company actions undertaken by
any Subsidiary and requiring under applicable law the approval, consent, or
ratification of the board of directors or governing body of the Subsidiary has
been approved, consented to or ratified by the board of directors or governing
body of the Subsidiary at a meeting duly called and held, or approved by
unanimous written consent. The Company owns all shares of any class of stock of
the Subsidiaries ("Subsidiary Shares") free and clear of all liens,
encumbrances, claims, options or restrictions of any nature and there are no
other classes of capital stock as authorized by the Subsidiaries= Articles of
Incorporation. The Subsidiary Shares constitute all of the issued and
outstanding capital stock of the Subsidiaries. There are no agreements,
arrangements, convertible rights or other rights (vested or contingent) to
acquire any of the capital stock of any of the Subsidiaries and no such
agreements, arrangements, convertible rights or other rights, to acquire any of
the capital stock of any of the Subsidiaries will be issued, entered into or
granted prior to the Closing Date. There are no agreements arrangements, plans
or understandings between any of the Subsidiaries and any third party providing
any stock appreciation rights or other rights granting to such third party the
right to be paid money or other property based on the value of capital stock of
the Subsidiary, or on the value of the Shares, the Company or the Acquired
Businesses, or on the amount of the Purchase Price, or otherwise in connection
with or in respect of the Transactions. Schedule 3.1.2 sets forth a list of the
jurisdictions in which each Subsidiary of the Company is organized, and each
jurisdiction in which it is qualified to conduct business as a foreign
corporation. Each Subsidiary is in good standing under the laws of the states
listed under their names in Schedule 3.1.2.



<PAGE>


         3.2 Authority and Non-Contravention. Each of Sellers has the full
power, authority and capacity to enter into, execute, deliver and perform this
Agreement and all Exhibits to which he or she is a party. This Agreement and
such Exhibits, when executed and delivered by Sellers, shall be valid and
binding obligations of Sellers, enforceable against each of them in accordance
with the terms hereof and thereof, subject to bankruptcy, insolvency and other
similar laws affecting the rights of creditors generally and except that the
remedies of specific performance, injunction and other forms of mandatory
equitable relief may not be available. Neither the execution and delivery of
this Agreement nor the execution and delivery of the agreements, certificates
and documents set forth as Exhibits hereto, nor the consummation of the
Transactions contemplated hereby or thereby, will (i) conflict with or violate
any provision of the Articles of Incorporation or Bylaws of the Company, (ii)
conflict with or violate any law, rule, regulation, ordinance, order, writ,
injunction, judgment or decree applicable to Sellers or the Company or by which
any of their assets are bound or affected, or (iii) conflict with or result in
any breach or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination or cancellation of, or accelerate the performance required by or
maturity of, or result in the creation of any security interest, lien, charge or
encumbrance on any of Sellers= property or the Assets, pursuant to any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, permit,
license, franchise, lease, contract, or other instrument or obligation to which
Sellers or the Company are a party or by which any of their assets are bound or
affected. Neither Sellers nor the Company are required to submit any notice,
declaration, report or other filing or registration with any governmental or
regulatory authority or instrumentality, and no approvals or non-objections are
required to be obtained or made by Sellers or the Company in connection with the
execution, delivery or performance by Sellers of this Agreement or any Exhibit
or the consummation of the Transactions contemplated hereby or thereby.

         3.3 Authorized Capitalization. The Company is a Ohio corporation having
authorized capital stock consisting of five hundred (500) shares of voting
common stock, of which twelve (12) shares are issued and outstanding. There are
no other classes of common stock, or any classes of preferred stock, authorized
under the Company=s Articles of Incorporation and issued by the Company.
Schedule 3.3 attached hereto sets forth all persons or entities owning shares of
any class of stock of the Company, as well as the nature and amount of the Stock
held by such person or entity. All of the Shares are validly issued, fully paid
and non-assessable. Sellers are the record and beneficial owners of the Shares,
and have good, marketable and indefeasible title thereto, free and clear of any
liens, claims, options, encumbrances or restrictions of any nature whatsoever.
Sellers have the absolute and indefeasible right, power and capacity to sell,
assign, transfer and deliver the Shares to Purchaser. There are no classes of
the capital stock of the Company or any persons or individuals that may be
entitled to or possess any pre-emptive rights with respect thereto. There are no
agreements, arrangements, convertible rights or other rights (vested or
contingent) to acquire any of the Stock, and no such agreements, arrangements,
convertible rights or other rights (vested or contingent) to acquire any of the
Stock will be issued, entered into, or granted prior to the Closing Date without
the prior written approval of the Purchaser. There are no agreements
arrangements, plans or understandings between the Company and any third party
providing any stock appreciation rights or other rights granting to such third
party the right to be paid money or other property based on the value of Shares,
the Company or the Acquired Businesses, or on the amount of the Purchase Price,
or otherwise in connection with or in respect of the Transactions.



<PAGE>


         3.4 Operation of the Company=s Business. The Company has good and
marketable title to and owns and retains all of the Assets, tangible or
intangible, and all contractual, license and leasehold rights necessary or
desirable for the Purchaser (i) to operate the Acquired Businesses as the
Company operates them on the date hereof, and (ii) to utilize the Assets and the
contractual, license and leasehold rights in the same manner as they
historically have been used, and except as reflected in the Financial
Statements, and since the Balance Sheet Date, free and clear of all mortgages,
deeds of trust, liens, security interests, pledges, encumbrances, encroachments,
easements, leases, agreements, covenants, charges, restrictions, options, joint
ownership or adverse claims or rights whatsoever. With the exception of those
Assets used in the Acquired Businesses pursuant to license and leasehold rights
in favor of the Company and disclosed to Purchaser, all of the Assets used in
the Acquired Businesses are owned by the Company, and none are owned by any
other party. The portion of the Assets that are tangible are in good operating
condition and repair, ordinary wear and tear excepted, and are satisfactory for
the purposes for which the Assets are being used in Acquired Businesses. Other
than in the ordinary course of business, no Asset having a value in excess of
$500 per item, or $5,000 in the aggregate, and no intangible asset, has been
disposed of since March 31, 2001.

         3.5 Financial Statements. Attached hereto as Schedule 3.5 are the
internal balance sheets and the income statements of the Company for the years
ended June 30, 1999, December 31, 1999 (short year) and December 31, 2000 (the
"Annual Financial Statements") and the interim period ended March 31, 2001 (the
"Interim Financial Statement"). The Annual Financial Statements and the Interim
Financial Statement shall be collectively referred to as the Financial
Statements. The Financial Statements represent bona fide transactions, are true,
accurate and complete, have been prepared from the books and records of the
Company, and fairly and accurately present the properties, assets, liabilities,
financial position, results of operations and condition of the Company as of
their respective dates. The Financial Statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis. As of the date hereof, the outstanding principal balance of all Debt is
less than $6,000,000.00.

         3.6 Employee Wages, Salaries and Benefits. The Company has provided
Purchaser with an accurate list of all present employees of the Company (whether
full-time, part-time or temporary), and the current rate of compensation for
each such employee (including a separate statement of bonuses, fringe benefits
and accrued vacation, sick pay and other perquisites to which they are or may be
entitled). Except as set forth on Schedule 3.6, there is no liability for unpaid
salary or wages, bonuses, vacation time, or other employee benefits due or
accrued, nor liability for withheld or deducted amounts from employees'
earnings, for the period ending on or immediately prior to March 31, 2001 (the
"Balance Sheet Date"), including without limitation commission payments to
agents, representatives or employees, except as listed in the Financial
Statements, plus recent adjustments made and in possession of Purchaser, or in
Schedule 3.8.1 or Schedule 3.8.9. Within the past five years, there have not
been any, and currently there are no labor disputes, strikes, work stoppages or
other concerted interruptions in service or performance pending or threatened,
and all relationships between the Company and its employees are generally stable
and satisfactory.



<PAGE>


          3.7 Compliance with Laws. To the best of Seller's Knowledge, the
operation of the Acquired Businesses and the use of the Assets are in material
compliance with all applicable laws, including but not limited to Federal,
state, and local antitrust, environmental, workplace safety, employment, labor
and employee benefits (collectively the "Laws"). To the best of Seller's
Knowledge, the Company has all requisite licenses, permits and certificates from
Federal, state and local governmental authorities as may be necessary to conduct
the Acquired Businesses and to own and operate the Assets, and such permits are
valid and in full force and effect. Sellers and the Company have not received
any notice alleging any material or unresolved violations by the Company of any
Laws, or of investigations or audits of the Company initiated by governmental,
regulatory or administrative agencies, and, to the knowledge of the Company, no
allegations or investigations are pending or, to Sellers=s knowledge, have been
threatened.

         3.8   Employee Benefit Plans

                  3.8.1 Except as set forth on Schedule 3.8.1 attached hereto,
with respect to all employees and former employees of the Company, neither the
Company nor any ERISA Affiliate (as defined herein below) of the Company
presently maintains, contributes to or has any liability under:

                           (a) any  bonus,  incentive  compensation,  profit
sharing,  retirement,  pension,  group  insurance,  death
benefit, group health, medical expense reimbursement, cafeteria, dependent care,
stock option, stock purchase, stock appreciation rights, savings, deferred
compensation, consulting, severance pay or termination pay, vacation pay, life
insurance, welfare or other employee benefit or fringe benefit plan, program or
arrangement;

                           (b) any plan,  program or arrangement  which is an
"employee  pension  benefit plan" as such term is defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or an "employee welfare benefit plan" as such term is defined
in Section 3(1) of ERISA.

For purposes of this Agreement, "ERISA Affiliate" shall mean each person (as
defined in Section 3(9) of ERISA) that, together with the Company (or any person
whose liabilities the Company has assumed or is otherwise subject to), currently
or in the past would be treated as a single employer under section 4001(b) of
ERISA or that would be deemed to be a member of the same "controlled group"
within the meaning of section 414(b), (c), (m) and (o) of the Internal Revenue
Code of 1986, as amended (the "Code"). The plans, programs and arrangements set
forth on Schedule 3.8.1 are herein referred to as the "Employee Benefit Plans."

                  3.8.2 With respect to all employees and former employees of
the Company, neither the Company nor any ERISA Affiliate of the Company
presently maintains, contributes to or has any liability under any funded or
unfunded medical, health or life insurance plan or arrangement for present or
future retirees or present or future terminated employees except as required by
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"). Neither the Company nor any ERISA Affiliate of the Company maintains
or contributes to a trust, organization or association described in any of
Sections 501(c)(9), 501(c)(17) or 501(c)(20) of the Code.



<PAGE>


                  3.8.3 Favorable determination letters have been received from
the Internal Revenue Service with respect to each Employee Benefit Plan which is
intended to comply with the provisions of Section 401(a) of the Code, evidencing
compliance with the relevant provisions of the Tax Equity and Fiscal
Responsibility Act of 1982, the Tax Reform Act of 1984 and the Retirement Equity
Act of 1984. Each such Employee Benefit plan complies in form and in operation
with the requirements of the Code and meets the requirements of a "qualified
plan" under Section 401(a) of the Code. Additionally, amendments have been made
to each such Employee Benefit Plan for the Tax Reform Act of 1986 and subsequent
legislation and regulations to the extent they are required. A proper and timely
application for a favorable determination letter with respect to each such
Employee Benefit Plan, as amended, has been made with the Internal Revenue
Service, and no unfavorable responses have been received with respect to any
such application from the Internal Revenue Service. There have been no changes
to any Employee Benefit Plan since the Balance Sheet Date.

                  3.8.4 To the best of Seller's Knowledge, with respect to each
Employee Benefit Plan which is subject to Title I of ERISA, neither the Company
nor any ERISA Affiliate of the Company has failed to comply with any of the
applicable reporting, disclosure or other requirements of ERISA and the Internal
Revenue Code, and there has been no "prohibited transaction" as described in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA.

                  3.8.5 To the best of Seller's Knowledge, neither the Company
nor any ERISA Affiliate of the Company, nor any of their respective directors,
officers, employees or any other "fiduciary", as such term is defined in Section
3(21) of ERISA, has any liability for failure to comply with ERISA or the
Internal Revenue Code for any action or failure to act in connection with the
administration or investment of the Employee Benefit Plans.

                  3.8.6 With respect to any Employee Benefit Plan which is
subject to Section 412 of the Code or Section 302 of ERISA, if any, there has
been no "accumulated funding deficiency" within the meaning of Section 302 of
ERISA or Section 412 of the Code (whether or not waived). With respect to the
Employee Benefit Plans, all applicable contributions and premium payments for
all periods ending prior to the Closing Date (including periods from the first
day of the then current plan year to the Closing Date) have been made or
properly accrued, and shall be made or properly accrued prior to the Closing
Date in accordance with past practice and, with respect to each Employee Benefit
Plan subject to Title IV of ERISA, the recommended contribution in the
applicable actuarial report.

                  3.8.7 To the best of Sellers= Knowledge, the actuarially
determined present value of all accrued benefits under each Employee Benefit
Plan subject to Title IV of ERISA (computed on a plan termination basis), if
any, does not exceed the fair market value of the assets of each such Employee
Benefit Plan.

                  3.8.8 Neither the Company nor any ERISA Affiliate of the
Company presently maintains, contributes to or has any liability (including
current or potential withdrawal liability) with respect to any "multiemployer
plan" as such term is defined in Section 3(37) of ERISA.


<PAGE>



                  3.8.9  Except as set forth on Schedule 3.8.9 attached hereto:
                                                --------------

                            (a) The Company is not a party to any  employment
 agreement,  whether  written or oral, or any contract or
agreement containing a change in control or similar provisions, or collective
bargaining agreement or contract with any labor union relating to any employees
or former employees of the Company;

                             (b) The Company  does not have  outstanding  any
loan or loans to any current or former  employees  of the
Company, nor has the Company guaranteed such loans;

                             (c) No amount  payable to an employee  or former
employee  of the  Company  will be an "excess  parachute
payment" which is non-deductible under Section 28OG of the Code.

                  3.8.10 Neither the Company nor any ERISA Affiliate of the
Company has maintained an employee pension benefit plan that has been the
subject of a "reportable event," as that term is defined in Section 4043 of
ERISA, as to which notices would be required to be filed with the Pension
Benefit Guaranty Corporation ("PBGC"), or of any event requiring disclosure
under Section 4063(a) of ERISA. Neither the Company nor any ERISA Affiliate of
the Company has incurred any outstanding liability under Section 4062 of ERISA
to the PBGC. All premiums or other amounts due and payable to the PBGC have been
paid. Neither the Company nor any ERISA Affiliate of the Company has terminated
any employee pension benefit plan subject to Title IV of ERISA, and no
proceeding by the PBGC to terminate any employee pension benefit plan pursuant
to Title IV of ERISA has ever been instituted or (to Sellers= knowledge)
threatened, no notice of any such termination has been received and no condition
exists which presents a material risk of termination of an Employee Benefit
Plan.

                  3.8.11 There is no pending or, to Sellers= knowledge,
threatened legal action, proceeding or investigation against or involving any
Employee Benefit Plan maintained by the Company or any ERISA Affiliate of the
Company (other than routine claims for benefits) and, to the Sellers= knowledge,
there is no basis for or fact which could give rise to any such legal action,
proceeding or investigation. Any bonding required with respect to the Employee
Benefit Plans in accordance with applicable provisions of ERISA has been
obtained and is in full force and effect.

                  3.8.12 There has been no act or acts which would result in a
disallowance of a deduction or the imposition of a tax pursuant to Section
4980B, or with regard to plan years beginning before December 31, 1988, Section
162(i) of the Code as in effect immediately prior to the enactment of the
Technical and Miscellaneous Revenue Act of 1988, or any regulations promulgated
thereunder, whether final, temporary or proposed. No event has occurred with
respect to which the Company or any ERISA Affiliate of the Company could be
liable for a tax imposed by any of Sections 4972, 4976,4977, 4979, 4980 or 4980B
of the Code, or for a civil penalty under Section 502(c) of ERISA.



<PAGE>


                  3.8.13 With respect to each of the Employee Benefit Plans,
Sellers and the Company have delivered to Purchaser true and complete copies of:
(i) the plan documents, including any related trust agreements, insurance
contracts or other funding arrangements, or a written summary of the terms and
conditions of the plan if there is no written plan document; (ii) the most
recent determination letter received from the Internal Revenue Service; (iii)
the most recent IRS Form 5500; (iv) the most recent actuarial valuation; (v) the
most recent financial statement; (vi) all correspondence with the Internal
Revenue Service, the Department of Labor and the Pension Benefit Guaranty
Corporation with respect to the past three plan years other than IRS Form 5500
filings and PBGC premium payments; and (vii) the most recent summary plan
description.

         3.9 No Material Adverse Change. There has been no material adverse
change since the Balance Sheet Date in the nature, business, operations,
properties, assets, liabilities (actual or contingent), of the Company and the
Acquired Businesses, or either of them, or in the prospects or condition
(financial or otherwise) thereof, or in the manner of conducting the Acquired
Businesses, or from the condition, position or prospects of the Acquired
Businesses as set forth in the Financial Statements other than changes in the
ordinary course of business which in the aggregate are not material and adverse.
There has been no material change since the Balance Sheet Date in the Company's
payables payment practices and receivables collection practices as more fully
described in Sections 3.9.1 (k) and 3.9.1 (l) below. Since the Balance Sheet
Date, there has been no event or condition of any character which, either
individually or in the aggregate, might reasonably be expected to affect in a
material adverse manner the business prospects, operations, properties, assets,
liabilities, earnings or financial condition of the Company, the Acquired
Businesses or the Assets.

              3.9.1 Except as set forth on Schedule 3.9.1, without limiting the
generality of the foregoing, and since the Balance Sheet Date, the Company has
not:

(1)                        paid any dividend, made any distribution or made any
                           other actual, constructive or deemed distribution in
                           respect of the Shares, or otherwise make any payments
                           to the shareholders of the Company in their capacity
                           as such;
(2)                        received any material cancellation notice with
                           respect to any current customer order placed with the
                           Company or entered into any customer contract which
                           will result in a loss to the Company;
(3) incurred any Debt or entered into any bonds, guarantees, sureties, letters
of credit, or other similar credit agreements; (4) subjected any Asset to any
mortgage, pledge, lien, security interest, encumbrance, restriction or charge of
any kind
                           whatsoever;
(5)      suffered any damage, destruction or loss of any Asset, whether or not
covered by insurance, which exceeds $25,000;
(6)      canceled or waived any claims, rights or remedies of the Company with
a value in excess of $25,000 ;(1)

<PAGE>


(7)                        sold, leased, transferred, assigned, distributed or
                           otherwise disposed of any tangible Asset with a value
                           in excess of $10,000, or any intangible Asset, except
                           for the sale of finished goods or repair parts in the
                           ordinary course of business;
(8)                        changed any method of accounting, or created,
                           eliminated, or made a material adjustment to any
                           reserves established on the Financial Statements, or
                           made any changes to the methods of accrual;
(9)      made any payment, or otherwise discharged or satisfied any  liabilities
                           or obligations of the Company in excess of $25,000,
                           except in the ordinary course of business;
(10)     made or committed any capital expenditure for additions to property,
                           plant or equipment,  or leasehold interests which
                           exceed $25,000;
(11)                       changed its payment practices relative to trade
                           payables in such a manner that the average age of the
                           Company's trade payables outstanding at the Closing
                           Date is inconsistent with the Company's historical
                           practice as reflected in the December 31, 2000 and
                           March 31, 2001 financial statements;
(12)                       offered any cash discounts on trade receivables not
                           consistent with the Company's historical practices as
                           reflected in the December 31, 2000 and March 31, 2001
                           financial statements.

         3.10 Insurance. The Company maintains in effect, and has at all times,
from April 1983 to present, maintained in effect, product liability insurance,
motor vehicle and comprehensive general liability insurance and workers'
compensation insurance covering the Acquired Businesses and fire and extended
coverage insurance with respect to the Current Property (as defined in Section
3.13.1 below) and the Assets. Schedule 3.10 attached hereto is a complete copy
of the commercial general liability and umbrella insurance policies in effect
for the two (2) years immediately prior to the Closing Date, together with a
list of all of the Company=s insurance policies (including the identity of the
carrier, policy number, policy period, amount of coverage and exclusions
thereunder) in effect for the five years immediately prior to the Closing Date,
and as to product liability and comprehensive general liability, in effect from
April 1983 to the present. All such insurance policies are owned solely and
exclusively by the Company and there are no beneficiaries thereunder except the
Company. All commercial general liability insurance policies have been written
on an "occurrence" basis for the five year period preceding the Closing Date. To
the best of Sellers= knowledge, no event has occurred that may enable an insurer
to rescind, revoke or cancel any such policies or to seek any additional or
retroactive premium, charge, fee or penalty.



<PAGE>


         3.11 Litigation. A true, correct and complete list of all suits or
proceedings at law, in equity or by or before any governmental, administrative
instrumentality or other agency and other litigation or arbitration proceedings
(whether material or not) pending, threatened or settled within the last five
(5) years against the Company, the Subsidiaries, the Assets, the Stock or the
Sellers with respect to the Shares or the Acquired Businesses, and which claims
each exceed $25,000, is set forth on Schedule 3.11 Other than as set forth on
Schedule 3.11 attached hereto, there are no claims, counterclaims, suits,
orders, writs, injunctions or decrees, proceedings, actions, or investigations
pending, in force or notice of which has been received, or, to the knowledge of
Sellers, threatened against the Company, the Assets, the Stock or the Sellers
with respect to the Shares or the Acquired Businesses. Neither Sellers nor the
Company nor any of its subsidiaries, directors, officers, employees or agents is
a plaintiff or defendant in any litigation or proceeding arising out of or
related to the Acquired Businesses other than as set forth in Schedule 3.11.

         3.12 Agreements, Leases and Licenses. Schedule 3.12 attached hereto
accurately and completely sets forth all leases, licenses, contracts and other
material agreements to which the Company or a Subsidiary is a party or otherwise
bound including all amendments or modifications thereto (collectively the
"Contracts"). Each of the Contracts is valid, effective and enforceable in
accordance with its terms. Neither the Company nor any other party to any of the
Contracts is in material default under any of the Contracts. No event has
occurred which with the passage of time or the giving of notice or both would
constitute a material default under any of the Contracts. Each of the Contracts
is necessary and appropriate in nature and scope to the conduct of the Acquired
Businesses as it exists at the date hereof and Schedule 3.12 does not omit any
contract, agreement, arrangement or understanding which presently exists between
the Company and a third party which is necessary or desirable in the conduct of
the Acquired Businesses or in the operations of the Company. Other than the
Contracts, there are no leases, licenses, contracts or agreements necessary (i)
to operate the Acquired Businesses as it is operated as at the date hereof, or
(ii) to utilize the Assets and contractual, license and leasehold rights in the
same manner as the Company utilizes such assets and contractual, license and
leasehold rights as at the date hereof. No purchase commitment for materials,
supplies, component parts or other items of the Inventory of the Acquired
Businesses to which the Company is a party is in excess of the ordinary, normal,
usual and current requirements of the Acquired Businesses or at a price
materially in excess of the current reasonable market price. No Contract
obligates the Company (i) to provide products or services to third parties which
the Company knows or has reason to believe are at prices which would result in a
net loss on the sale or provision of such products or services, or which are
pursuant to terms or conditions it cannot reasonably expect to satisfy or
fulfill in their entirety, or (ii) to purchase or acquire services, information,
products, inventory or equipment in excess of the normal, ordinary, usual and
current requirements of the Acquired Businesses or at a price in excess of the
current reasonable market price. The Company has not waived any material right
under any of the Contracts. The Company is not a party to, nor are any of the
Assets bound by, any agreement that is materially adverse to the Acquired
Businesses. Neither Sellers nor the Company has received notice that any party
to any of the Contracts intends to cancel or terminate any contract or to
exercise or not exercise any option under any Contract.

         3.13  Environmental and Health and Safety Matters



<PAGE>


                  3.13.1 Set forth on Schedule 3.13.1 attached hereto is a true,
accurate and complete list of all real property owned, leased or operated,
currently or previously, by the Company since its incorporation with the dates
of ownership or operation set forth (the "Property"). Those locations currently
owned and operated by the Company, including the real property located at 26800
Richmond Road (the "Current Property") are specifically noted on Schedule
3.13.1. The real property commonly known as 26565 Miles Road, Warrensville
Heights, Ohio shall also be included on Schedule 3.13.1. if after the Closing
Date the Company becomes a tenant in the building located thereat.

                  3.13.2 Except as set forth in Schedule 3.13.2 attached hereto,
and, to the best of Seller's Knowledge, the Company in its ownership and
operation, as the case may be, of the Property has been at all times and is in
material compliance with the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Superfund Amendments and Reauthorization Act, the Federal Water Control Act, the
Occupational Safety and Health Act, and all other federal, state and local laws,
as amended, relating to pollution, safety, health or protection of the
environment, including, without limitation, those relating to containment,
emissions, discharges, releases or threatened releases of industrial, toxic or
hazardous substances, materials or wastes or other pollutants, contaminants,
petroleum products, asbestos, polychlorinated biphenyls ("PCBs"), or chemicals
(collectively, "Hazardous Substances") into the environment (including without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacturing, processing, distribution,
use, treatment, labeling, storage, disposal, abatement, transport or handling of
Hazardous Substances (the "Environmental Laws").

                  3.13.3 To the best of Seller's Knowledge, the Company has
obtained, and is in material compliance with all permits, licenses and other
consents or authorizations which are required with respect to the operation of
the Acquired Businesses under the Environmental Laws, including without
limitation those that are required to (a) operate or install any equipment or
facilities and (b) generate, manufacture, formulate, store, treat, handle,
transport, discharge, emit or dispose of Hazardous Substances generated or
handled by the Acquired Businesses.

                  3.13.4 To the best of Sellers= Knowledge, and except as set
forth on Schedule 3.13.2, there are or were no polychlorinated biphenyls (PCBs),
Tetrachloroethylene (PCE), Trichlorethylene (TCE), or friable and unencapsulated
asbestos generated, used, treated, stored, maintained, disposed of, or otherwise
located on the Property during the Company=s ownership or operation, or on the
Current Property. Except as set forth in Schedule 3.13.2 of this Agreement, and
to the best of Seller's Knowledge, there are and were no underground storage
tanks whether or not excluded from regulation under Environmental Laws used,
stored, maintained, located on, out of service, closed, abandoned,
decommissioned or otherwise related to the Property during the Company=s
ownership or operation, or the Current Property. To the best of Seller's
Knowledge, the Company has removed and properly disposed of all used or other
obsolete materials regulated by Environmental Laws, including Hazardous
Substances and other wastes generated by the Acquired Businesses or otherwise on
the Current Property.

                  3.13.5 To the best of Seller's Knowledge, there has been no
"release" as defined in 42 U.S.C. ' 9601(22) or, to the knowledge of Sellers,
threat of a "release" of any Hazardous Substance on, from, over or under the
Property or into the environment from the Property.



<PAGE>


                  3.13.6 Neither Sellers nor the Company has received notice
that any of them have any potential liability with respect to the contamination,
investigation, or cleanup of any site at which Hazardous Substances have been or
have alleged to have been generated, treated, stored, released, discharged,
emitted, transported over or disposed of into or onto, and there are no past or
present (or, to the knowledge of Sellers, future) events, facts, conditions or
circumstances which may interfere with or prevent compliance by the Acquired
Businesses with the Environmental Laws, or with any order, decree, judgment,
injunction, notice or demand issued, entered, promulgated or approved
thereunder, or which may give rise to any common law or other legal liability,
including, without limitation, liability under any of the Environmental Laws, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, notice of violation, study or investigation, based on or related to the
manufacture, process, distribution, use, treatment, storage, disposal, transport
or handling, or the emission, discharge, release or threatened release into the
environment of any Hazardous Substances by the Company or a predecessor, as a
result of any act or omission of the Company or a predecessor or a third party.

                  3.13.7 The Company currently maintains a true, correct and
complete listing of all Hazardous Substances used by the business of the Company
in the conduct of the Acquired Businesses, and the Company has available at the
location of the Acquired Businesses a list of the methods used by the Company
(including, but not limited to, a list of past and present disposal or recycling
sites, waste haulers, and manifest numbers and copies of manifests used to
transport Hazardous Substances) to dispose of or recycle Hazardous Substances
generated by or handled in the course of the operations of the Acquired
Businesses.

                  3.13.8 To the best of Sellers= Knowledge, all of the Company's
disposal, transportation and recycling practices relating to Hazardous
Substances have been accomplished in accordance with all applicable
Environmental Laws.



<PAGE>


         3.14 Intellectual Property. Schedule 3.14 lists all registered patents,
trademarks, service marks, tradenames and copyrights and all of the applications
thereof which are used in the Acquired Businesses (the "Registered Rights") and
the Company owns all of the Registered Rights. The Registered Rights and all
inventions, inventor=s notes, discoveries, trade secrets, ideas, proprietary
processes and formulae, whether patentable or not, improvements, engineering
drawings, computer-assisted design and manufacturing data, bills of material,
designs and specifications, computer software (including the most recent version
of all executable computer program files, source code, and documentation
relating thereto), laboratory certifications, proprietary and trade rights and
data, ideas and know-how, and all shop rights, manufacturing data, licenses, and
other intellectual property and all correspondence related thereto that are used
in the Acquired Businesses (all of which, including the Registered Rights, are
hereinafter collectively referred to as the "Intellectual Property"), are owned
or lawfully used by the Company. All registration and maintenance fees due and
payable on or before the Closing Date with respect to the Registered Rights have
been or will be paid prior to the Closing Date. Each patent, registered
trademark, service mark, or copyright set forth in Schedule 3.14 is valid and in
full force and effect, and have not been allowed to lapse or expire, or have not
been otherwise canceled, terminated suspended, or otherwise adversely affected
by the failure of the Company to elect to continue the registration thereof or
to pay any registration or maintenance fees with respect therewith. None of the
Intellectual Property has been held or stipulated to be invalid in any
litigation or proceeding. The validity of the Intellectual Property, and of the
Company's rights to the Intellectual Property, has not been questioned in any
litigation or proceeding currently pending or which, to the knowledge of
Sellers, has been threatened, and there exists no basis for a claim against the
Company for infringement of any third party's intellectual property rights.
Neither Sellers nor the Company has received any notice to the effect that any
product the Company makes or sells, or the distribution or use by it of any
process or product, or any services it performs in the course of the Acquired
Businesses, may infringe any patent, trademark, service mark, tradename,
copyright, trade secret, trade dress, knowhow or similar legally protectable
right of another. All patentable inventions utilized or first reduced to
practice in connection with the Acquired Businesses or pursuant to or in
connection with the employment or engagement by the Company of individuals are
the property of the Company. The Company has not entered into and is not a party
to any development, work for hire, license or other agreement pursuant to which
the Company has secured the right or obligation to use, or granted others the
right or obligation to use, any patents, trademarks, service marks, tradenames,
copyrights, trade secrets or knowhow (except as set forth in Schedule 3.14
attached hereto). No person has a right to receive a royalty or similar payment
in respect of the Intellectual Property pursuant to any contractual arrangements
entered into by the Company, and the Company has no licenses granted by or to it
and nor is the Company a party to any other agreements relating in whole or in
part to any of the Intellectual Property. All documents, computer files and
media on which the Intellectual Property is recorded are adequate for the
purposes of conducting the Acquired Businesses as the same are conducted on the
date hereof, are current, accurate, complete, and accessible.

         3.15 Related Party Transactions. None of Sellers nor any officer or
director of the Company, or of any of the Subsidiaries or any affiliate thereof
has, directly or indirectly, entered into any contract, agreement, arrangement,
or transaction with the Company by which such officer or director may receive
any compensation, consideration or benefit. For purposes of this Section 3.15
only, the term "affiliate" of the Company shall mean and include any officer or
director or shareholder of the Company, or any person related to any officer,
director or shareholder of the Company by blood or by marriage, or any
corporation, partnership, proprietorship, trust or other entity in which such
officer or director of the Company (or any spouse, ancestor or descendant of the
same) has more than a five percent (5%) legal or beneficial interest, or any
corporation, partnership, proprietorship, trust or other entity which controls,
is controlled by, or is under common control with, the Company.

         3.16 Increases in Salaries and Wages. The Company has not, since March
31, 2001, paid any salaries, wages, bonus payments or any other benefits to its
directors, officers and employees at rates exceeding the respective rates paid
to such officers and employees which were in effect thereat except for routine
salary increases in the ordinary course of business or pursuant to any Employee
Benefit Plan.



<PAGE>


         3.17 Taxes. As to any Taxes (as defined in Section 12.1 below) imposed
by the Federal government, or any state government or any subdivision or
municipality thereof, or the government of any other country or political
subdivision thereof, including, without limitation, (i) taxes imposed on or
measured by income, (ii) taxes based on employment (including amounts withheld
from employees' compensation), and (iii) any property, franchise, or sales or
use tax, which, in each case, relates to or could cause a lien or encumbrance
upon any of the Assets, the Stock or the Acquired Businesses, the Company, and
as applicable, Sellers, have timely, properly and lawfully filed all returns and
elections necessary to be filed and has paid in full the applicable Taxes
(including any penalties, assessments and deficiencies in respect of such taxes)
due on such returns; and no claims for any unpaid Taxes, interest or penalties
are being asserted by any governmental authority, for any period, against the
Company, the Stock or any Assets of the Company. The Company has not paid and is
not required to pay any income, excise, franchise, sales or use taxes to any
state or states other than Ohio. The Company, and as applicable, Sellers has
timely filed and paid all Taxes and estimated Taxes due on or prior to March 31,
2001, if any, and has made accruals on the Financial Statements for all Taxes
properly accruable with respect to the period ended at the Closing Date. There
are no liens or other security interests on any of the Assets that arose in
connection with any failure (or alleged failure) to pay any Tax, other than
liens, if any, for Taxes not yet due and payable. The Company has furnished
Purchaser with true and complete copies of each of the Federal, state, local and
foreign income and excise tax returns, sales and use, payroll and franchise tax
returns, and any amendments thereto, of the Company, as they relate to taxable
periods since June 30, 1998, and the Company has made available to Purchaser all
reports of and communications from Internal Revenue Service agents and the
corresponding agents of other state, local and foreign governmental agencies who
have examined or intend to audit or examine the books and records of the Company
at any time including and since the commencement of the last IRS audit. No audit
or examination of the Company or the Stock by any taxing authority or agency is
now pending or currently in progress, nor has the Company received from any
taxing authority or agency any notice of such an audit or examination. The
Company has paid all deficiencies and altered all practices proposed as a result
of the audits and examinations. No waiver of any statute of limitations has been
given and is in effect in respect to the assessment of any Taxes against the
Company. There are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any return of the Company for any period with
respect to any Tax. There are no tax sharing agreements or arrangements to which
the Company is now or ever has been a party. Due to S corporation status, no
deferred Taxes are required by the Company whether set forth on the Financial
Statements or otherwise. Sellers is not a "foreign person" within the meaning of
Section 1445(b)(2) of the Internal Revenue Code.



<PAGE>


         3.18 Accounts Payable. Except as set forth on Schedule 3.18, the
accounts payable of the Company as set forth in the Financial Statements
represent bona fide claims which creditors have against the Company for sales or
services furnished to the Company, are not subject to counterclaims, setoffs or
deductions by the Company, are not subject to additional requirements of
performance due to the Company All of the Company's then outstanding accounts
payable are presented in the Financial Statements. All of the accounts payable
have been created pursuant to receipt of goods or services conforming to the
terms of purchase orders executed in favor of unrelated third parties in the
ordinary course of business of the Company.

         3.19 Absence of Undisclosed Liabilities. Except as specifically and
explicitly reserved against in the Financial Statements, the Company is not
subject to any Debt, or any material liability or financial obligation (known or
unknown, direct or indirect, absolute, contingent, accrued or otherwise), other
than liabilities or financial obligations arising in the ordinary course of
business. Sellers know of no facts or circumstances which might reasonably serve
as the basis for any material liabilities or financial obligations with respect
to the Company or the Stock which are not disclosed pursuant to this Agreement.

         3.20 Customer and Supplier Relationships: Warranty Claims. The Company
has not received any notice that any customer or supplier of the Company intends
to discontinue or materially alter the prices or terms of, or substantially
diminish, its relationship with the Company. Except as set forth on Schedule
3.20, there are no outstanding material warranty claims against the Company by
any of its customers or sales representatives with respect to products sold or
services rendered by the Company which are in each instance greater than two
percent (2%) of the sales price of such products sold or services rendered.

         3.21 Accounts Receivable and Notes Receivable. The accounts receivable
and notes receivable of the Company as set forth in the Financial Statements,
represent bona fide claims which the Company has against unrelated debtors for
actual sales made, services performed or funds advanced by the Company in the
ordinary course of business arising on or before the Closing Date, are not
subject to counterclaims, setoffs or deductions of any kind other than trade
discounts, and are not subject to additional requirements of performance by the
Company. Such receivables have been recorded in accordance with the Company's
historical revenue recognition policy and have been collected or are collectable
in accordance with their terms at their full face amount. The aggregate amount
of customer advance payments or deposits (i.e., payments in excess of actual
work performed or materials supplied as of the date of such payment) received by
the Company with respect to such accounts are set forth in the Financial
Statements.

         3.22 Notes, Loans, Bonds, Guarantees. Set forth in Schedule 3.22, are
all interest bearing notes, loans, indebtedness or debt obligations of the
Company ("Debt"), and all bonds, guarantees, sureties, letters of credit, or
other similar credit agreements which have been entered into by the Company. The
Company is not in default on the payment of any principal or interest on any
Debt, or in the performance or observance of its representations, warranties,
covenants, or obligations under any agreement, contract, or instrument executed
in connection therewith, nor is the Company otherwise in default under any
indemnity, fidelity or contract bond or letter of credit, guarantee or other
credit agreement or debt obligation or instrument.



<PAGE>


         3.23 Charter Documents. The Company has delivered to Purchaser the
originals or certified copies of its Articles of Incorporation and By-laws of
the Company, and the originals or certified copies of the Articles of
Incorporation and By-laws of each of its Subsidiaries, each as amended to date,
as well as copies of the minute books of each of the Company and the
Subsidiaries covering the period from the date of their respective incorporation
to the date of this Agreement. Such Articles of Incorporation, Bylaws and minute
books of the Company and the Subsidiaries contain a complete, correct and
current record of all meetings and other corporate actions of their respective
stockholders and board of directors since the date of incorporation, and
appropriate stock ledger containing all information on the issuance, transfer,
surrender, cancellation or disposition of all of the issued shares of the
Company=s and the Subsidiaries= capital stock.

         3.24 Inventories. Any and all inventories of the Company reflected in
the Financial Statements, plus any replacements for such items acquired on or
before the Closing Date, and minus any such items sold or leased by the Company
in the ordinary course of business on or before the Closing Date (the
"Inventory"), are properly valued in accordance with generally accepted
accounting principles consistently maintained and applied, notwithstanding
anything else herein contained. The books and records of the Company with
respect to the Inventory are current, accurate and complete, and all inventory
items appearing on the books and records of the Company are in the physical
possession or control of the Company. For purposes of the physical count of the
Inventory on the Closing Date, the Inventory shall be valued as follows: In the
case of raw material or purchased components the acquisition cost. In the case
of work-in-progress and finished goods, the sum of the value of raw material and
purchased components, direct labor at standard work center rates which includes
applicable factory burden. The standard work center rates are substantially
unchanged from those in effect and used by the Company to value its work in
process and finished goods inventories, and related unbilled revenue, as of
December 31, 2000 and March 31, 2001. The Company's inventory value at Closing
shall not include the cost of (x) wages, fringe costs and expenses of any
engineering activities that are not directly related to application engineering,
(y) the wages, fringe costs and expenses of any sales, marketing and service
activities, and (z) any other costs, including general administrative costs,
inconsistent with generally accepted accounting principles in the calculation of
factory burden. Except for damaged, defective, obsolete and slow-moving (defined
as parts other than repair parts that are not consumed in the manufacturing
process or sold within 24 months) items of Inventory which have been fully
written off and except for items sold in the ordinary course of business, the
Inventory consisted of at the Balance Sheet Date, and currently consists of all
items purchased, fabricated or otherwise identified for or with any order,
contract or commitment for goods or services to be provided to a customer of the
Company, and all such items are of a quality and quantity currently usable and
saleable in the ordinary course of business without markdown or discount. With
respect to Inventories in the hands of suppliers for which the Company is
committed as of the date of this Agreement, such Inventory is reasonably
expected to be usable in the ordinary course of business as the Acquired
Businesses is presently being conducted. All items included in the Inventory are
the property of the Company. No items in the Inventory are held by the Company
on consignment from others. The items of Inventory are free of defects and, to
the extent that they consist of finished or semi-finished goods, also comply
with the specifications submitted by the intended purchasers thereof pursuant to
valid and non-cancelable purchase orders.



<PAGE>


         3.25 Machinery and Equipment. All material machinery, equipment,
patterns, tools, tooling dies, jigs, fixtures, vehicles, trucks, furniture and
communications, computer and office equipment which are used, have been used, or
which are necessary to conduct the Acquired Businesses or the engineering,
manufacturing, finance, sales and marketing, personnel and support functions of
the Company; all of the Company's software and computer programs used in the
conduct of the Acquired Businesses, including any software or computer programs
not wholly-owned by the Company; and all of the engineering drawings, bills of
material, specifications and manufacturing data possessed or owned by the
Company; are all of such items that are necessary to manufacture the products
presently being manufactured by the Company, and to provide the services
rendered by the Company, in connection with the Acquired Businesses.

         3.26 No Material Misrepresentations or Nondisclosures. Neither the
representations and warranties contained in this Agreement nor any Exhibit or
Schedule attached hereto contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein or therein not misleading. To the best of Seller's Knowledge, there are
no facts which have not been disclosed to Purchaser by Sellers that materially
adversely affect the Company, the Stock, the Acquired Businesses or the Assets.

         3.27 "S" Corporation Status. Since July 1, 1999, the Company has been
qualified as an "S" corporation within the meaning of Section 1361(a)(1) of the
Internal Revenue Code (and under any comparable state law) and will be so
qualified until the Closing of the Transactions.

         3.28 Availability of Assets. Upon the Closing of the Transactions, (a)
the Company shall own of all of the Assets which are owned as of the date of
this Agreement and which are used, have historically been used or are otherwise
necessary or desirable to conduct the Acquired Businesses as they are currently
conducted on the date hereof, including without limitation any Assets
historically maintained on the books and records, or in the facility, of North
Coast Distributing, Inc., but excluding any Assets which may be disposed in the
ordinary course of business and in accordance with the terms and conditions of
this Agreement, and (b) the Company shall have no claims, demands, debts,
liabilities, obligations, costs or expenses whatsoever arising from or relating
to North Coast Distributing, Inc., or the business and operations thereof, or
the Required Disposition (as defined below). Set forth on Schedule 3.28 are all
assets formerly owned by North Coast Distributing, Inc. and which have been
transferred to the Company pursuant to the Required Distribution.

         3.29 No Brokers. Neither the Sellers, nor the Company has entered into
any agreement, contract, arrangement or understanding, or otherwise engaged, any
third party to act as a broker or finder, and there are no brokerage or finders'
fees or commissions or similar payments which will accrue and become payable in
respect of the Transactions.

         3.30 No  Expenses.  The Company has not paid or become  obligated  for
any fees or expenses  incurred by Sellers in respect of the Transactions.



<PAGE>


         3.31 Required Disposition. Sellers have caused the Company to (a) sell
and assign the assets and liabilities of North Coast Distributing, Inc., a
subsidiary of the Company ("NCD"), to an unrelated third party in a bona fide
arms-length transaction ("NCD Sale"), (b) pay all or part of the proceeds of the
NCD Sale to pay off the outstanding principal balance of the intercompany debt
owed by NCD to the Company, (c) apply any excess amounts as a distribution to
the Company, and (d) spin-off, sell or transfer the capital stock of NCD to the
Sellers, together with all liabilities of NCD which are not assumed pursuant to
the NCD Sale (the "Required Disposition"). The Company has not sold, conveyed,
alienated or transferred as part of the Required Disposition any assets of NCD
which are used, have historically been used or are otherwise necessary for
Purchaser to conduct the Acquired Businesses as they are currently conducted on
the date hereof. The Required Disposition has been completed and as of the date
hereof, the Company owns and possesses all of the Assets of the Company,
including all Assets necessary to conduct the Acquired Businesses, (b) is
obligated only for the liabilities incurred with respect to the Acquired
Businesses and the corporate and administrative functions of the Company, and
(c) employs those employees who immediately prior to the Required Disposition,
were assigned to positions engaged in or primarily supporting the Acquired
Businesses.

                                   ARTICLE IV
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

          All representations and warranties contained herein shall survive the
Closing until such time(s) as stated in Article XVI, and none shall merge into
any Closing documents. Purchaser represents and warrants the following as of the
date of this Agreement and of the Closing Date:

         4.1 Corporate Standing. Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
Purchaser has full corporate power and authority to own, lease and operate its
properties and businesses, and is in good standing and is qualified to transact
business as a foreign corporation in all states in which the nature of its
business or the properties owned by it require it to be qualified.



<PAGE>


         4.2 Authority and Non-Contravention. Purchaser has the full corporate
power and authority to enter into, execute, deliver and perform this Agreement
and all Exhibits to which it is a party. The execution, delivery and performance
of this Agreement and such Exhibits, and the consummation of all transactions
contemplated herein and therein, have been duly authorized by all necessary
corporate action of Purchaser. This Agreement and such Exhibits, when executed
and delivered by Purchaser, shall be valid and binding obligations of Purchaser,
enforceable against it in accordance with the terms hereof and thereof, subject
to bankruptcy, insolvency and other similar laws affecting the rights of
creditors generally and except that the remedies of specific performance,
injunction and other forms of mandatory equitable relief may not be available.
Except for approvals of governmental authorities, neither the execution and
delivery of this Agreement nor the execution and delivery of the certificates
and documents set forth as Exhibits hereto nor the consummation of the
transactions contemplated hereby or thereby will (i) conflict with or violate
any provision of the Articles or Certificate of Incorporation or By-laws of
Purchaser, (ii) conflict with or violate any law, rule, regulation, ordinance,
order, writ, injunction, judgment or decree applicable to Purchaser, or by which
any of Purchaser's assets are bound or affected, or (iii) conflict with or
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination or cancellation of, or accelerate the performance required
by or maturity of, or result in the creation of any security interest, lien,
charge or encumbrance on any of Purchaser's assets pursuant to any of the terms,
conditions or provisions of, any note, bond, mortgage, indenture, permit,
license, franchise, lease, contract, or other instrument or obligation to which
Purchaser is a party or by which any of its assets are bound or affected.
Purchaser is not required to submit any notice, declaration, report or other
filing or registration with any governmental or regulatory authority or
instrumentality, and no approvals or non-objections are required to be obtained
or made by Purchaser in connection with the execution, delivery or performance
by Purchaser of this Agreement or any Exhibit or the consummation of the
Transactions contemplated hereby or thereby.

         4.3  Investment  Intent.  Purchaser is acquiring the Shares for its own
account for the purpose of  investment  and not with a view to or for sale in
connection with any distribution thereof.

         4.4 Financing. As of the Closing, Purchaser will have the financial
capacity to perform its obligations under this Agreement.

                                    ARTICLE V

                            [Intentionally Omitted.]

                                   ARTICLE VI

                                              [Intentionally Omitted.]


                                   ARTICLE VII
                  CONDITIONS PRECEDENT TO CLOSING BY PURCHASER

         Purchaser shall not be required to proceed on the Closing Date with the
Transactions contemplated by this Agreement unless the following conditions
precedent shall have been fulfilled and satisfied prior to or at the Closing, or
shall have been waived in writing by Purchaser:

         7.1 Representations and Warranties. Each of the representations and
warranties of Sellers contained herein shall be true and correct as of the date
of this Agreement.

         7.2      Intentionally Omitted.


<PAGE>


         7.3 Corporate Authorization. There shall have been obtained by means in
conformity with all applicable provisions of Ohio law, the approval of the
Company=s Board of Directors and shareholders to the Required Disposition. The
Required Disposition shall have been fully performed prior to the execution of
this Agreement, and Sellers shall have furnished to Purchaser evidence
reasonably satisfactory to Purchaser that all of Seller's obligations thereunder
have been fully performed.

         7.4 Sellers= and Officers= Certificate. Sellers shall have delivered to
Purchaser a certificate of Sellers, and a certificate of the President and Chief
Financial Officer of the Company, dated as of the Closing Date, certifying in
such detail as Purchaser reasonably requests, to the accuracy of Sellers=
representations and warranties contained herein, and to the fulfillment of
Sellers= covenants and the conditions precedent to Purchaser's obligations to
consummate the Transactions contemplated by this Agreement ("Sellers and Company
Certificate").

         7.5 Good  Standing.  Sellers  shall have  delivered to Purchaser a
certificate  of good standing for the Company and for each of the Subsidiaries
from the State of Ohio.

         7.6 Legal Opinion. Sellers shall have delivered to Purchaser a legal
opinion, in substantially the form attached hereto as Exhibit 7.6, from counsel
to Sellers ("Sellers= Opinion").

         7.7 Governmental Approvals. Sellers, the Company and/or Purchaser, as
the case may be, shall have received all governmental and regulatory consents,
non-objections or permits from all Federal, state, local and foreign
governmental authorities necessary to permit Sellers, Purchaser, and the Company
to consummate the Transactions, and to enable the Company to conduct the
Acquired Businesses after the Closing Date in all material respects as the
Company conducted such Acquired Businesses on the date of this Agreement.

         7.8 Bill of Sale. Sellers shall have caused SNS Realty, an Ohio general
partnership and affiliate of the Company, to enter an agreement to sell the
cranes, hoists, bridges, rails, and docks, dock equipment located on the Yoder
Property pursuant to a bill of sale substantially in the form attached hereto as
Exhibit 7.8 ("Bill of Sale").

         7.9      Intentionally Omitted.

         7.10 Due  Conveyance:  Consents.  The Shares,  at Closing,  will be
conveyed and  assigned to Purchaser  free and clear of all liens,  charges,
encumbrances  and third party adverse claims,  and all necessary  consents of
other parties to transfer of the Shares and the Contracts, shall have been
obtained without burdensome limitations or conditions.

         7.11     Intentionally Omitted.



<PAGE>


         7.12 Environmental Audit. The parties acknowledge hereby that a Phase I
environmental audit has been performed on behalf of Purchaser with respect to
the Current Property, the results of which have been received by Purchaser.

         7.13 Debt. Sellers shall provide to Purchaser a letter or letters from
all of the holders of the Debt setting forth the outstanding principal balances
thereof as of a certain date not more than 15 days prior to the Closing Date,
and all accrued interest thereon, and fees payable therefor, with a per diem
rate for the interest accrual from the date of such letter(s) to the Closing
Date. At the Closing Date the Company shall have no debt, other than trade
accounts payable incurred and expenses accrued in the ordinary course of
business, and the Assets shall be free and clear of all liens and encumbrances,
including without limitation, any financing statements filed pursuant to Article
9 of the Uniform Commercial Code as then enacted in the State of Ohio. The total
aggregate amount of the Debt of the Company shall be less than the amount of the
Purchase Price, less the Escrow Amount, and less the expenses payable under
Sections 2.2(c) and (d) hereof.

         7.14 Directors. All the current directors of the Company and each of
the Subsidiaries shall have resigned in writing from the Board of Directors of
the Company and from the respective Subsidiary effective immediately prior to
the Closing.

         7.15 Non-Fulfillment Date. In the event that one or more of the
foregoing conditions in this Article VII is not fulfilled as of July 15, 2001,
(the "Non-Fulfillment Date"), Purchaser may, upon notice to the Company and on
or prior to the Closing Date, elect either (i) to waive the condition and
proceed to Closing; or (ii) not to consummate the Transactions and terminate
this Agreement without any further liability on the part of either of the
Parties, except that the foregoing shall not relieve either of the Parties from
liability for damages actually incurred as a result of any breach of this
Agreement.

         7.16 Real Estate Agreements. Purchaser or its designee shall have
entered into agreements with SNS Realty, an Ohio general partnership and
affiliate of the Company, to (a) purchase the real property, and all buildings
and improvements thereon, commonly known as 26800 Richmond Road, Bedford
Heights, Ohio ("Yoder Property"), pursuant to a purchase agreement substantially
in the form attached hereto as Exhibit 7.16(a) ("Real Estate Agreement"), and
(b) lease the real property and the buildings and improvements thereon commonly
known as 4899 Commerce Parkway, Warrensville Heights, Ohio, pursuant to a lease
agreement substantially in the form attached hereto as Exhibit 7.16(b) ("Lease
Agreement").

         7.17  Employment  Agreement.  The Company shall have entered into
employment  agreements with Messrs.  R. Steel, D. Muchnicki, R. Evans, C. Seman
and interim employment  agreement with R. Hinkle effective upon the Closing Date
on terms and conditions  acceptable to Purchaser, the effectiveness of which
shall be contingent upon the Closing.





<PAGE>


                                  ARTICLE VIII
                 CONDITIONS PRECEDENT TO CLOSING BY THE SELLERS

         Sellers shall not be required to proceed on the Closing Date with the
Transactions contemplated by this Agreement unless the following conditions
precedent shall have been fulfilled and satisfied prior to or at Closing, or
shall have been waived in writing by Sellers:

         8.1 Representations and Warranties. Each of the representations and
warranties of Purchaser contained herein shall be true and correct as of the
date of this Agreement and shall be true and correct as of the Closing Date as
if then originally made.

         8.2      Intentionally Omitted.

         8.3 Officers= Certificate. Purchaser shall have delivered to Sellers a
certificate of its President or Senior Vice President and its Chief Financial
Officer, dated the Closing Date, certifying in such detail as Sellers reasonably
request to the accuracy of Purchaser's representations and warranties contained
herein, and to the fulfillment of Purchaser's covenants and the conditions
precedent to Sellers= obligations to consummate the Transactions contemplated by
this Agreement ("Purchaser=s Certificate").

         8.4  Good Standing.  Purchaser shall have delivered to Sellers a
certificate of its good standing from the State of Delaware.

         8.5 Legal Opinion.  Purchaser  shall have  delivered to Sellers a legal
opinion,  in  substantially  the form attached  hereto as Exhibit 8.5, from
counsel to Purchaser. ("Purchaser=s Opinion").

         8.6 Governmental Approvals. Sellers, Purchaser and/or the Company, as
the case may be, shall have received the any necessary governmental and
regulatory consents, non-objections or permits necessary to permit the Parties
to consummate the Transactions.

         8.7      Intentionally Omitted.

         8.8 Lawsuits. No action, suit or proceeding shall have been instituted
or threatened before a court, arbitration panel or governmental body with
respect to the Transactions, and no regulatory enforcement proceeding shall be
pending before any governmental agency or body with respect to the Transactions.

         8.9 Corporate  Authorizations.  There shall have been  obtained,  by
means in  conformity  with all  applicable  provisions of Delaware law, the
approval of Purchaser's Board of Directors to the Transactions.



<PAGE>


         8.10 Non-Fulfillment Date. In the event that one or more of the
foregoing conditions in this Article VIII is not fulfilled as of the
Non-Fulfillment Date, Sellers may, upon notice to Purchaser and on or prior to
the Closing Date, elect either (i) to waive the condition and proceed to
Closing; or (ii) not to consummate the Transactions and terminate this Agreement
without any further liability on the part of either of the Parties, except that
the foregoing shall not relieve either of the Parties from liability for damages
actually incurred as a result of any breach of this Agreement.

         8.11  Consulting Agreement. Purchaser shall have executed and delivered
consulting  agreements  with Messrs. R. Steel, R. Nelson and J. Strang, on terms
and conditions  acceptable to the Parties  substantially in the form of Exhibit
8.11 attached hereto the effectiveness  of which shall be contingent upon the
Closing and further with respect to Mr. R. Steel,  contingent upon the
termination of the employment agreement referenced in Sections 7.17 and 8.12.

         8.12  Employment  Agreement.  The Company shall have entered into an
employment  agreement  with Mr. R. Steel,  effective upon the Closing Date on
terms and conditions acceptable to Purchaser, the effectiveness of which shall
be contingent upon the Closing.

         8.14 Real Estate Agreements. Purchaser or its designee shall have
entered into agreements with SNS Realty, an Ohio general partnership and
affiliate of the Company, to (a) purchase the real property, and all buildings
and improvements thereon, commonly known as 26800 Richmond Road, Bedford
Heights, Ohio ("Yoder Property"), pursuant to a purchase agreement substantially
in the form attached hereto as Exhibit 7.16(a) ("Real Estate Agreement"), and
(b) lease the real property and the buildings and improvements thereon commonly
known as 4899 Commerce Parkway, Warrensville Heights, Ohio, pursuant to a lease
agreement substantially in the form attached hereto as Exhibit 7.16(b) ("Lease
Agreement").

                                   ARTICLE IX
                             [Intentionally omitted]

                                    ARTICLE X
                           OBLIGATIONS AT THE CLOSING

         10.1  Sellers= Obligations. Prior to or at  the Closing, Sellers shall
deliver to Purchaser:

                  10.1.1   The Sellers and Company Certificate;

                  10.1.2   A certificate of good standing for the Company and
for each of the Subsidiaries from the State of Ohio;

                  10.1.3   Sellers= Opinion;



<PAGE>


                  10.1.4 The certificates representing all of the Shares,
together with appropriate stock powers or forms of transfer in a form
satisfactory to Purchaser and executed by each of Sellers selling, assigning and
transferring such certificate(s) to Purchaser, free and clear of any liens,
claims, options, encumbrances or restrictions of any nature whatsoever;

                  10.1.5 The original or certified copy of the Company=s
Articles of Incorporation, by-laws, minutes of all meetings or actions of the
Company=s shareholders and board of directors, and stock ledger documenting the
issued and outstanding shares of the Stock;

                  10.1.6 The original or certified copy of each of the
Subsidiaries' Articles of Incorporation, by-laws, minutes of all meetings or
actions of the Subsidiaries' shareholders and board of directors, and stock
ledger documenting the issued and outstanding shares of the stock; and

                  10.1.7   The resignations of all of the directors of the
Company and each of the Subsidiaries.

         10.2  Purchaser's Obligations.  Prior to or at the Closing, Purchaser
shall deliver to Sellers:

                  10.2.1    Purchaser=s Certificate;

                  10.2.2    Purchaser=s Opinion;

                  10.2.3   The Purchase Price as provided in Section 2.2.


                                   ARTICLE XI
                   FURTHER COVENANTS OF SELLERS AND PURCHASER

         Sellers and Purchaser shall, as described below, each perform the
indicated tasks designated to be performed by them:

         11.1 Joint Notice. After the Closing, Sellers and Purchaser shall
cooperate, to the extent practicable and reasonable, in giving joint notice of
the consummated Transactions to each customer, creditor, distributor, sales
representative and supplier of the Acquired Businesses.



         11.2     Prior Stock  Appreciation  Rights.  Sellers shall discharge
their obligations with respect to the stock  appreciation rights  previously
granted to R. Evans,  D.  Muchnicki,  C. Seman and R.  Hinkle,  each of whom are
current  employees of the Company, pursuant to the letter dated July 2 , 2001
from Richard D. Nelson to Stephen M. Shea.



<PAGE>


         11.3 Further Assurances. Sellers agrees that, from time to time and
without further consideration, they will execute and deliver such further
documents and take such other action as Purchaser may require more effectively
to transfer to and vest in Purchaser and put Purchaser in possession of the
Shares and all rights, title and interest therein.

         11.4 Contracts. If any of the Contracts require the consent of a third
party in order not to be discontinued or terminated due to the transfer of
Shares consummated hereunder, and such consent cannot be obtained prior to
Closing despite the Parties' best efforts, the Parties shall continue to use
their best efforts to obtain the third party's consent after the Closing Date.


                                   ARTICLE XII
                                   TAX MATTERS

         12.1 Certain Definitions. For purposes of this Article XII, "Taxes"
means all Federal, state, local or foreign net or gross income, gross receipts,
sales, use, ad valorem, value-added, franchise, withholding, "tollgate",
payroll, employment, excise, property or similar taxes, assessments, duties,
fees, levies or other governmental charges (including, without limitation, any
liability for taxes arising from a consolidated or Subchapter "S" return or
imposed by Treasury Regulations section 1.1502-6) together with any interest
thereon, penalties, additions to tax or additional amounts with respect thereto
and any interest in respect of such penalties, additions or additional amounts,
and "Carryforwards" means any federal or state tax loss carryforwards,
investment tax credits, and foreign tax credits of the Company arising from
taxable years or periods prior to the Closing Date.

         12.2  Tax Indemnification

                  12.2.1 Notwithstanding any other provision of this Agreement,
Sellers hereby agree to indemnify Purchaser against and hold it harmless from
(i) all liability for Taxes of the Company attributable to taxable years or
periods ending on or before the Closing Date and, in the case of taxable years
or periods beginning before and ending after the Closing Date, the portion of
such years or periods ending at the close of business on the Closing Date (the
"Pre-Closing Tax Period"), (ii) all liability whenever incurred for Taxes of
North Coast Distributing, Inc., and any Taxes incurred in respect of the sale,
disposition or transfer of North Coast Distributing, Inc., (iii) all liability
whenever incurred for Taxes of Sellers, and (iv) any liability resulting from a
failure of Sellers to fulfill their obligations under this Article XII.

                  12.2.2 Notwithstanding any other provision of this Agreement,
Purchaser hereby agrees to indemnify Sellers and hold them harmless from (i) any
liability for Taxes of the Company attributable to any taxable periods or
portions thereof commencing after the Pre-Closing Tax Period, and (ii) any
liability resulting from a failure of Purchaser to fulfill its obligations under
this Article XII.



<PAGE>


                  12.2.3 [Is this applicable?] In addition to, and not in
derogation of, the foregoing, in the event that the amount of any Carryforward
is reduced from the amount set forth in Section 12.2 for any reason whatsoever,
including, without limitation, as a result of a final determination of taxable
income for taxable periods ending on or before the Closing Date, Sellers hereby
agrees to indemnify Purchaser against and hold it harmless from any additional
liability for Taxes that the Purchaser and/or the Company incurs as a result of
the reduction of the amount of such Carryforward.

                  12.2.4 Purchaser hereby agrees to indemnify Seller after the
date on which Purchaser has first made claims under Article XV of this Agreement
in the total aggregate amount of One Hundred Ten Thousand and 00/100
($110,000.00), dollar-for-dollar, for any tax benefit that the Purchaser and/or
the Company receives relating to pre-closing taxes.

         12.3 Closing of Taxable Period. Sellers agree to cause the Company upon
consultation with Purchaser to file all appropriate Federal, state, local and
foreign tax returns (the "Tax Returns") on the basis that the relevant taxable
period ended as of the close of business on the Closing Date, unless the
relevant taxing authority will not accept a Tax Return filed on that basis.
Purchaser agrees to cooperate with Sellers with respect to any tax elections for
year end cut-offs based on the Company's books and records as of the Closing
Date.

         12.4 Preparation and Filing of Tax Returns by Sellers. Sellers shall
prepare and timely file or shall cause the preparation and timely filing of all
appropriate Tax Returns that include, on a consolidated or any other basis, the
income of the Company for all periods ending on or before the Closing Date for
those jurisdictions which permit or require a short period tax return ending as
of the close of business on the Closing Date. Purchaser will cooperate with
Sellers in making available to them any records necessary to enable them to
comply with this Section 12.4. At the request of Sellers, Purchaser shall cause
the Company to grant a Power of Attorney to such persons as Sellers may
designate to file such Tax Returns in the name of the Company.

         12.5 Preparation and Filing of Tax Returns by the Company. Purchaser
and/or the Company shall prepare and timely file or shall cause the preparation
and timely filings of (i) all Tax Returns with those jurisdictions not allowing
a short period Tax Return ending as of the close of business on the Closing Date
and (ii) all other Tax Returns of any kind with respect to Company that are due
after the Closing Date (other than Tax Returns to be filed by Sellers pursuant
to Section 12.4). Sellers will cooperate with Purchaser and the Company in
making available to Purchaser any records necessary to enable Purchaser and the
Company to comply with this Section 12.5. For all tax periods commencing after
the Closing Date, Purchaser and the Company shall have responsibility for the
preparation and filing of all Tax Returns relating to the assets, operations and
income of the Company.

         12.6 Payment of Taxes by Sellers Directly to Taxing Authorities. Except
as provided in Section 12.7, Sellers shall pay or cause to be paid all Taxes due
with respect to Tax Returns which they are required to file pursuant to Section
12.4.



<PAGE>


         12.7 Payment of Taxes by Sellers to Purchaser. With respect to any
jurisdiction which does not permit or require a short period Tax Return ending
as of the close of business on the Closing Date, Sellers shall compute or cause
to be computed the Tax liability which would be reflected on an Tax Return for
the Company for that jurisdiction for the period through and including the
Closing Date (as if such a short taxable period existed and a return was
permitted or requested in respect thereof), and Sellers shall pay such amount
(less any estimated tax payments paid prior to the Closing Date) to Purchaser or
the Company on or before the due date, including extensions for the payment of
taxes to such jurisdiction with respect to the Tax Return to be filed by
Purchaser and/or Company. In the event that the estimated tax payment paid prior
to the Closing Date exceeds the amount of tax to be paid by the Company on a tax
return required under this Section 12.7, Purchaser shall pay or cause to be paid
such excess to Sellers. If applicable, any tax credits and any exemptions,
allowances or deductions that are calculated on an annual basis, such as the
deduction for depreciation, shall be apportioned on a per diem basis.

         12.8 Tax Attribute Carryforwards. If applicable, Sellers agree to
permit Purchaser to cause the Company to elect, where permitted by law, to carry
forward any net operating loss, net capital loss, charitable contribution or
other item arising after the Closing Date that would, absent such election, be
carried back to a taxable period of the Company ending on or before the Closing
Date.

         12.9 Cooperation in Preparing and Filing Returns. Sellers and Purchaser
shall, and Sellers and Purchaser shall cause the Company to, cooperate fully
with each other in connection with the preparation and filing of the Tax Returns
or other tax returns, including but not limited to the furnishing or making
available of records, books of account and any other information necessary for
the preparation of any tax returns. Purchaser shall, and Purchaser shall cause
the Company to, provide Sellers with tax return information packages for the
Company including, but not limited to, all supporting documentation as required
in prior years within one hundred twenty (120) days after the Closing Date, for
taxable periods ending on or prior to or including but not ending on the Closing
Date. Sellers shall furnish Purchaser with completed Federal and state Tax
Returns or with pro-forma returns for the Company by the earlier of ninety (90)
days after receipt of all information required for the proper completion of such
returns or on or before thirty (30) days prior to the due date of such returns.

         12.10  [Intentionally Left Blank.]

         12.11  Transfer Taxes. Sellers shall be liable for any stock  transfer,
conveyance, stamp and other taxes arising from the sale, assignment and transfer
of the Shares and the Required Disposition.



<PAGE>


         12.12 Negotiation, Settlement or Contest of Tax Disputes. Sellers and
their duly appointed representatives shall have the sole right to supervise or
otherwise coordinate any tax examination process and to negotiate, resolve,
settle or contest any asserted Tax deficiencies or assert and prosecute any
claim for refund of Taxes (a "Tax Claim") for taxable periods ending on or
before the Closing Date. In addition, Sellers shall be entitled to participate
at their expense in the defense of any Tax Claim relating to any year or period
that includes the Closing Date for which Sellers may be required to pay amounts
to Purchaser and/or the Company pursuant to this Article XII, and with the
written consent of Purchaser and/or the Company, subject to Section 12.2 hereof,
and at Sellers= sole expense, may assume the entire defense of such Tax Claim.
Purchaser shall not, and shall not allow the Company to, settle any Tax Claim
for a year or period ending on or before the Closing Date without the consent of
Sellers (which consent shall not be unreasonably withheld) if, with respect to
such claim, Sellers would be required to pay amounts to Purchaser and/or the
Company pursuant to this Article XII.

         12.13 Cooperation in Connection with Examinations. Purchaser shall, and
shall cause the Company to, give prompt notice to Sellers of the assertion of
any claim, or the commencement of any suit, action, proceeding, investigation or
audit with respect to any Tax Return for any period or portion thereof ending on
or before the Closing Date that includes the operations of the Company,
describing in reasonable detail the facts pertaining thereto and the amount or
an estimate of the amount of the liability arising therefrom. Sellers and
Purchaser shall, and the Purchaser shall cause the Company to, cooperate fully
in any such action by furnishing or making available records, books of account
or other materials or taking such other actions as may be necessary or helpful
for the defense against the assertions of any taxing authority as to any
consolidated, combined or separate Tax Return for such periods.

         12.14 Assignment of Tax Refunds. Purchaser shall, and shall cause the
Company to, assign to Sellers all Tax refunds, including interest, relating to
the Company with respect to any taxable year or period ended as of or prior to
the close of business on the Closing Date, and, with respect to any taxable year
or period that includes the Closing Date, the portion of such year or period
ending on and including the Closing Date. Purchaser shall, and shall cause the
Company to, pay over to Sellers promptly upon receipt all such refunds received
directly by any of them.

         12.15 Records Retention. Purchaser shall cause the Company to retain,
full and complete records for all tax periods which remain subject to audit by
action of statute or waiver for all periods or portions thereof through and
including the Closing Date. To the extent that such records are currently
maintained in both a hard copy and an electronic media format, the Parties agree
to cause both such types of records that pertain to the income or operations of
the Company prior to the close of business on the Closing Date to be retained by
Company and not to be destroyed without prior written approval of Sellers or
Purchaser, as the case may be. The Parties agree to cause the Company to enter
into such record retention agreements as may be requested by the Internal
Revenue Service with respect to all tax periods ending on or prior to the
Closing Date.

         12.16 Termination of Tax Allocation Agreement. Any tax allocation
agreement or arrangement with respect to the Company that may have been entered
into by Sellers or its affiliates on the one hand and the Company on the other
hand shall be terminated as of the Closing Date, and no payments that are owed
by or to the Company pursuant thereto shall be of effect or enforceable, except
that any provision in such tax allocation agreement to provide information
regarding attributes or characteristics of the Company relevant to the
determination of any Taxes to the Company upon departure from the consolidated
group of which Sellers may have been a member shall be carried out by, and
enforceable against, Sellers or as provided for in such tax allocation
agreement.


<PAGE>



         12.17 Survival. All rights and obligations provided for in this Article
XII shall remain in force until such time as the applicable Statute of
Limitations ends for any given pre-Closing tax. notwithstanding any other
provision of this Agreement, except in the event of termination of this
Agreement pursuant to Section 7.15 or Section 8.10.

         12.18 Priority of Article. In the event of a conflict between the
provisions of this Article XII and any other provision of this Agreement, the
provisions of this Article XII shall control.

                                  ARTICLE XIII
                      EXPENSES WITH RESPECT TO TRANSACTION

         Except as otherwise set forth in this Agreement, Sellers agree that
they will pay all fees, costs and expenses incurred by Seller in connection with
the Transactions and the Closing thereof, including, without limitation, the
fees and expenses of their attorneys, accountants and other persons, and no
portion thereof shall be paid by Purchaser or the Company. Purchaser agrees that
it will pay all fees, costs and expenses incurred by it in connection with the
Transactions and the Closing thereof, including, without limitation, the fees
and expenses of its attorneys, accountants and other persons, and no portion
thereof shall be paid by Sellers. Notwithstanding the foregoing, Sellers and
Purchaser shall share equally any fees of filings required to be made to
governmental agencies in connection with the Transactions.

                                   ARTICLE XIV
                                     BROKERS

         Each of the Parties hereby agrees to indemnify and save and hold
harmless the other Party, its shareholders, directors and officers or their
heirs or executors, as the case may be, from and against any and all claims,
losses, damages, costs or expenses of any kind or character (including
attorneys' fees) arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made by such party with any broker or finder
in connection with this Agreement or the Transactions.

                                   ARTICLE XV
                                 INDEMNIFICATION

         15.1  Mutual Indemnification

                  15.1.1 Notwithstanding any other provisions of this Agreement,
from and after the Closing, Sellers and their respective heirs, executors,
successors, permitted assigns and personal representatives hereby jointly and
severally indemnify Purchaser, its affiliates, successors and assigns, and
agrees to hold Purchaser, its affiliates, successors and assigns, harmless from
all Losses (as hereinafter defined) resulting from:



<PAGE>


                           (a) a breach by Sellers of any representation,
warranty,  covenant or agreement under this Agreement or the Closing documents,
including without limitation the Real Estate Agreement;

                           (b)any  liabilities  arising at or prior to Closing,
or any events occurring at or prior to Closing giving rise to liability, whether
known or unknown, relating to the Company, the Assets or the Acquired
Businesses;

                           (c) any  liabilities  arising at, prior to or
subsequent  to the Closing  (whether  such  liabilities  where known, unknown or
could not be known by Sellers at or prior to Closing) relating to North Coast
Distributing, Inc., including without limitation the business, operations,
products, services, contracts, intercompany debt, agreements, taxes, employees,
employee benefit plans, thereof, and any claims for indemnification made by any
purchaser or transferee thereof.

                  15.1.2 From and after the Closing Date, Purchaser, on behalf
of its affiliates and its successors and assigns, hereby indemnifies Sellers,
and their respective heirs, executors, successors, permitted assigns, and
personal representatives, and agrees to hold Sellers, and their respective
heirs, executors, successors, permitted assigns and personal representatives,
harmless from all Losses resulting from (i) a breach by Purchaser of any
representation, warranty, covenant or agreement under this Agreement or the
Closing documents, including without limitation the Real Estate Agreements, or
(ii) any liabilities arising after the Closing Date relating to the transfer of
the Shares and concomitant ownership and control of the Company.

         15.2 Procedures.

                  15.2.1 As used in this Agreement, the term "Indemnifying
Party" shall mean the person or persons against whom a party (the "Indemnified
Party") makes a claim for indemnification hereunder.

                  15.2.2 The Indemnified Party shall give written notice to the
Indemnifying Party of any claim or event known to it which does or may give rise
to a claim by the Indemnified Party against the Indemnifying Party based on this
Agreement, stating the nature and basis of said claims or events and the amounts
thereof, to the extent known. Such notice shall be given in accordance with
Article XVI hereof. The giving of such notice shall be a condition precedent to
any liability of the Indemnifying Party hereunder. Such notice shall be given
reasonably promptly, but the fact that the Indemnified Party failed to give
notice with reasonable promptness shall not defeat a claim made pursuant hereto
except to the extent that the Indemnifying Party can establish that it has been
injured by such delay.



<PAGE>


                  15.2.3 In the event of any claim, action, suit or proceeding
made or brought by third parties against the Indemnified Party, the Indemnified
Party shall give written notice as described in Section 15.1.4 above of such
claim, action, suit or proceeding with a copy of the claim, process and all
legal pleadings with respect thereto. After notification, the Indemnifying Party
shall participate in, and jointly with any other Indemnifying Party similarly
notified, assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Party at the time of such assumption. The Indemnified Party
shall have the right to employ its own counsel and such counsel may participate
in such action, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party, when and as incurred, unless (1) the
employment of counsel by such Indemnified Party has been authorized by the
Indemnifying Party, or (2) the Indemnifying Party shall not in fact have
employed counsel to assume the defense of such action reasonably satisfactory to
the Indemnified Party at the time of the Indemnifying Party's assumption of the
defense. If clause (2) of the preceding sentence shall be applicable, then
counsel for the Indemnified Party shall have the right to direct the defense of
such claim, action, suit or proceeding on behalf of the Indemnified Party. The
Indemnified Party and the Indemnifying Party, as the case may be, shall be kept
fully informed of such claim, action, suit or proceeding at all stages thereof
whether or not such party is represented by its own counsel.

                  15.2.4 As used in this Agreement, "Losses" means any and all
claims, demands, costs, expenses, losses, damages, penalties, fines, assessments
and liabilities of or payable to any third party or government entity. The term
"Losses" includes reasonable attorneys' fees and costs incurred in the
investigation and defense of a claim, demand, cost, loss or liability; provided,
however, that the term "Losses" does not include remuneration to the Indemnified
Party's employees for time spent investigating or litigating any claim or
demand.

                  15.2.5 The representations and warranties of Sellers set forth
in Article III of this Agreement and the covenants of Sellers wherever set forth
in this Agreement shall survive closing for 36 months from the Closing Date
except Sections 3.1, 3.2, 3.3, and 3.31 shall survive closing forever. The
representations and warranties of the Purchaser set forth in Sections 4.1 and
4.2 shall survive Closing forever, that set forth in Section 4.3 shall survive
for a period of 36 months from the Closing Date and that set forth in Section
4.4 shall not survive the Closing.

                  15.2.6 To partially secure the indemnities of Sellers, whose
liability thereof shall be joint and several, the Purchaser shall deposit Two
Million One Hundred Thousand Dollars ($2,100,000) of the Purchase Price into an
escrow account to be held for a maximum period of thirty-six (36) months, and
subject to the Escrow Agreement attached hereto as Exhibit 2.2. So long as
sufficient Escrowed Funds remain under the Escrow Agreement, Purchaser shall
seek indemnification thereunder to satisfy its Losses under this Agreement;
provided, however, that nothing in this Section 15.1.8 shall prohibit or limit
Purchaser=s right to seek any equitable remedy in appropriate circumstances.

         15.3 Remedies Cumulative. All rights and remedies of each of the
Parties existing under this Agreement are cumulative with, and not exclusive of,
each other, and are cumulative with any legal or equitable rights or remedies
otherwise available to such Party.



<PAGE>


         15.4 Limitations on Indemnity or Reimbursement. Sellers shall not be
liable to Purchaser until the aggregate amount of claims under this Article XV,
whether indemnification or otherwise, exceeds $110,000, and, upon reaching such
amount, Sellers shall be liable to Purchaser for the first dollar of all such
claims, up to a maximum of the amount of $6,500,000; provided, however, that any
breach of Sellers' representations and warranties set forth in Sections 3.3 and
3.31 shall not be subject to any limitations in this Section 15.4.

                                   ARTICLE XVI
                                     NOTICES

         16.1 Notice. All notices and other communications required to be given
under the terms of this Agreement or which any of the Parties may desire to give
hereunder shall be in writing and delivered personally or sent by express
delivery, or by facsimile, or by registered or certified mail, with proof of
receipt, postage and expenses prepaid, addressed as follows:

                  (a)      As to Purchaser, addressed to:


                           Formtek, Inc,
                           260 North Elm Street
                           Westfield, Massachusetts 01085
                           Attn.: John E. Reed, President
                           Fax: (413) 568-7428

with a copy to:
                           R. Bruce Dewey, Esq.
                           Formtek, Inc,
                           260 North Elm Street
                           Westfield, Massachusetts 01085
                           Fax: (413) 568-7428

or to such other address or addresses and to the attention of such other person
or persons as Purchaser may from time to time designate in writing to Sellers:

                  (b)  As to Sellers, addressed to:

                           Richard D. Nelson
                           4360 Southeast Frazier Court
                           Stuart, FL  34997
                           and

                           Roger K. Steel
                           245 College Street
                           Hudson, Ohio 44236

and


<PAGE>


                           John B. Strang
                           23699 Bahama Point, #1116
                           Fernandina Beach, FL  32034

with a copy to:
                           David Cathcart, Esquire
                           Mansour Gavin Gerlack & Manos, Co., LPA
                           55 Public Square, Suite 2150
                           Cleveland, OH  44113
                           Fax:  (216) 523-1705

or to such other address or addresses and to the attention of such other person
or persons as Sellers may from time to time designate in writing to Purchaser.

         16.2 Receipt of Notice. Any notice given in accordance with this
Article XVI shall be deemed to have been given when delivered personally, or
when received if sent via express delivery, facsimile, or registered or
certified mail, return receipt requested.

                                  ARTICLE XVII
                            [Intentionally Omitted.]

                                  ARTICLE XVIII
                  EFFECTIVENESS AND ASSIGNABILITY OF AGREEMENT

         This Agreement shall become effective when executed and delivered by
Purchaser and Sellers, and shall be binding in all respects upon the respective
successors and permitted assigns of each of the Parties hereto. No Party hereto
may assign this Agreement in whole or in part without first obtaining the
written consent of the other Party, except that Purchaser may assign its rights
and obligations under this Agreement to one or more affiliates so long as
Purchaser remains responsible for its performance hereunder.

                                   ARTICLE XIX
                                    ANNOUNCEMENT OF TRANSACTION

         Subject to the provisions of Section 11.1, no Party shall make a public
announcement of the Transactions contemplated by this Agreement without approval
of the other Party, unless required by law or by applicable stock exchange
requirements ("Required Disclosure"). In the event of Required Disclosure, such
person shall provide notice accompanied by a copy of all proposed announcements
to the other Party. Nothing in this Agreement shall be construed to inhibit
Purchaser from communicating with its employees nor Sellers from communicating
with the employees of the Company regarding this Agreement, so long as Sellers
or Purchaser, as the case may be, use their best efforts to make such employees
comply with the confidentiality obligations contained that certain
Confidentiality Agreement dated August 20, 1999 (the "Confidentiality
Agreement").


<PAGE>



                                       139
29Apr02 - 11:53AM

                                   ARTICLE XX
                            COMPLETENESS OF AGREEMENT

         This Agreement and the Schedules and Exhibits hereto and Closing
documents represent the entire contract between the Parties with respect to the
subject matter hereof and thereof and supersede all prior offers, proposals,
statements, representations and agreements with respect to the subject matter
hereof, including but not limited to that certain Letter of Intent dated April
19, 2001. The terms and conditions of confidentiality referenced in the
Confidentiality Agreement shall not survive the Closing of this Agreement. The
Exhibits and Schedules hereto and the Closing documents are incorporated herein
by reference, and shall be deemed to be included in any reference to this
Agreement. This Agreement may not be amended except by action of each of the
Parties hereto set forth in an instrument in writing signed on behalf of each of
the Parties hereto.




                                   ARTICLE XXI
                                    CAPTIONS

         The captions to the Articles and Sections contained in this Agreement
are for reference only, do not form a substantive part of this Agreement and
shall not restrict nor enlarge any substantive provision of this Agreement.

                                  ARTICLE XXII
                                 APPLICABLE LAW

         This Agreement, the Schedules and Exhibits, and all other documents
given in connection herewith, shall be construed in accordance with the laws of
the Commonwealth of Massachusetts without regard to the principles of conflicts
of laws.

                                  ARTICLE XXIII
                            [Intentionally Omitted.]

                                  ARTICLE XXIV
                                  COUNTERPARTS

         This Agreement may be executed in any number of counterparts, each of
which shall be considered an original but all of which shall constitute but one
and the same Agreement by and among the Parties.

                                   ARTICLE XXV
                           NO THIRD PARTY BENEFICIARY


<PAGE>



         This Agreement is intended to inure to the benefit of Purchaser and
Sellers only; and no third party shall have any rights, express or implied, by
reason of this Agreement.


                                  ARTICLE XXVI
               UNILATERAL RIGHT TO WAIVE FAILURES OF OTHER PARTIES

         26.1      Waiver.  Any of the Parties may:

                  26.1.1 Extend in writing the time for the performance of any
of the obligations  herein contained to be performed for the benefit of
such Party;

                  26.1.2 Waive in writing any inaccuracies in the
representations and warranties made to it contained in this Agreement or any
Exhibit or Schedule hereto or any certificate or certificates delivered by
another Party to this Agreement;

                  26.1.3   Waive in writing the failure in performance of any of
 the conditions herein expressed for its benefit; and

                  26.1.4   Waive in writing compliance with any of the covenants
 herein contained for its benefit.

         26.2 Effect of Waiver. No such waiver or extension shall be valid
unless in writing and signed by the Party granting the waiver or extension, and
no such waiver or extension shall be construed to excuse or mitigate any
subsequent breach or violation of this Agreement not specifically covered by
such waiver.

                                  ARTICLE XXVII
                                  SEVERABILITY

         The invalidity or unenforceability of any provision of this Agreement
shall not affect the other provisions hereof, and the Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted. Furthermore, upon the request of any Party hereto, the Parties to this
Agreement shall add, in lieu of such invalid or unenforceable provisions,
provisions as similar in terms to such invalid or unenforceable provisions as
may be possible and legal, valid and enforceable.

                 [Signatures Follow on the Next Immediate Page.]


<PAGE>








         IN WITNESS WHEREOF, the Parties have caused this Stock Purchase
Agreement to be executed as of the day and year first above written.


Purchaser:                                  FORMTEK, INC.,
WITNESS:                                    a Delaware corporation

_________________________                   By:__________________________
Name:____________________                   Name:_______________________
                                            Its:__________________________

Sellers:
WITNESS:



Name:                                       ROGER K. STEEL



Name:                                       RICHARD D. NELSON



Name:                                       JOHN B. STRANG



Name:                                       VIVIAN STEEL


<PAGE>


                             PARTICIPATION AGREEMENT

         THIS AGREEMENT dated as of December 31, 2001, by and among John E.
Reed, an individual (hereinafter together with his heirs, executors, successors
and assigns, "Lender"), Mestek, Inc., a Pennsylvania corporation (hereinafter
together with its successors and assigns, the "Participant") and CareCentric,
Inc., a Delaware corporation (hereinafter together with its successors and
assigns, the "Borrower").

                              W I T N E S S E T H:

         WHEREAS, Lender and CareCentric, Inc. (f/k/a Simione Central Holdings,
Inc.) (hereinafter together with its successors and assigns, the "Borrower")
have entered into that certain Secured Convertible Credit Facility and Security
Agreement dated as of June 12, 2000 (the "Loan Agreement") providing for a
credit facility to be made available to the Borrower by Lender in an amount not
to exceed $6,000,000.00; and

         WHEREAS, Lender has agreed to sell and the Participant has agreed to
purchase a participation in all loans made by Lender to Borrower under the Loan
Agreement, on the terms and conditions herein set forth; and

         WHEREAS, Participant has agreed to make a participation in such loans
to provide additional funds to Borrower for working capital and improved cash
flow purposes;

         NOW, THEREFORE, in consideration of the premises and the mutual
undertakings herein contained, Lender and the Participant hereby agree as
follows:



<PAGE>








1.       Definitions.  For the purposes of this Agreement, the following terms
shall have the following respective meanings:

1.

<PAGE>








(a) "Loans" shall mean all loans made by Lender to the Borrower pursuant to the
Loan Agreement (whether currently outstanding or made from time to time after
the date hereof). As of the date of this Agreement, the outstanding principal
amount of the Loans made by Lender to Borrower under the Loan Agreement is
$3,500,000.00.

(b) "Loan Documents" shall mean the Loan Agreement, that certain Promissory Note
dated June 12, 2000 in the maximum principal amount of $6,000,000.00 issued by
the Borrower to Lender to evidence the Loans, the right to convert any or all of
the loans into fully paid and non-assessable shares of the common stock of
Borrower as provided in Section 2.5 of the Loan Agreement, and all other
instruments and documents executed and delivered by the Borrower pursuant to the
Loan Agreement.

(a)

<PAGE>


                                                 Page 144
(c)      "Participation  Percentage"  shall mean the percentage  interest of the
Participant  in the principal  amount of Loans at any time outstanding.



2. Participation. Lender hereby assigns and conveys to the Participant and the
Participant hereby assumes from Lender, an undivided interest in the Loans equal
to One Million Dollars ($1,000,000) or approximately 28.6% of the Loans made
under the Loan Agreement (the "Participation") and approximately 16.7% of the
full amount of the credit facility. The interest of the Participant under this
Agreement shall include participation in the receipt of the payments of
principal of and interest under the Loans and in all amounts payable by or
distributed in respect of the Borrower under the Loan Documents, and
participation in any security therefor, all for the pro rata account and risk of
the Participant in accordance with its Participation Percentage.

3. Payment of Consideration. Lender, Participant and Borrower hereby acknowledge
and agree that the advances made by Participant to Borrower on behalf of Lender
in the amount of One Million Dollars ($1,000,000) that have not been reimbursed
(the "Advances"), upon the execution of this Agreement, shall be deemed to be,
and do hereby constitute, authorized Loans under the Loan Agreement, as fully as
if the Advances were made in strict accordance with the terms of the Loan
Agreement; and by entering into this Agreement, Participant shall be separately
possessed of all rights and remedies of Lender under the Loan Agreement with
respect to its Participation Percentage.

4. Recomputation of Participation Percentage. From and after the date hereof, in
the event of any additional loan(s) against the remaining open principal amount
of the Note pursuant to Section 2.2 of the Loan Agreement ("New Loan"), upon the
receipt by Borrower of the amount of any New Loans, the Participation Percentage
shall be recomputed to take into account the amount of such New Loans. Upon
completion of any conversion of Loans into Borrower common stock by either
Participant or Lender, the Participation Percentage shall be recomputed to take
into account the amount of the Loans so converted.

5. Application of Payments. Promptly upon receipt by Lender of any payment of
principal of or interest under the Loans (including the net cash proceeds
received from any realization upon security therefor) or of any fees payable by
the Borrower under the Loan Agreement, Lender shall remit to the Participant by
wire transfer in immediately payable funds its pro rata share thereof (after
deducting any amount due from the Participant to Lender under this Agreement) in
accordance with its Participation Percentage.

6. Enforcement of Loans. Upon ten (10) days' prior written notice to
Participant, Lender may take any action which it determines in its sole
discretion to be suitable or fitting to enforce payment of the Loans or
respecting performance by the Borrower of its obligations under any of the Loan
Documents or compliance with the terms thereof. Lender shall not without the
consent of the Participant (a) agree to any amendment or modification of the
Loan Agreement which would extend the maturity of the Loans or increase the
amount of the "Revolving Loan Commitment" (as defined in the Loan Agreement) or
decrease the interest on or fees payable with respect to the Loans, (b) release
any security or any guarantor for the Loans other than in accordance with the
terms of the Loan Documents or (c) waive any default or forbear from enforcement
of any default arising under any Loan Document; provided, however, if the
Participant shall refuse to consent to any requested amendment, modification or
waiver, Lender may, at its option, at any time thereafter purchase the
participation interest of the Participant in the Loans by paying to the
Participant an amount equal to its Participation Percentage of the unpaid
principal and accrued interest on the Loans, and upon such payment this
Agreement shall be terminated (except as to any obligations then outstanding
between Lender and the Participant) and the Participant shall have no further
interest in the Loans or any of the Loan Documents.
7. Conversion Rights. Participant may effect the conversion of those Loans that
it has purchased hereunder, into the common stock of Borrower as provided in
Article 10 of the Loan Agreement, and independently of Lender's intent to
convert or not convert any of its portion of the Loans into the common stock of
Borrower. In the event at any time during which any of the Loans are outstanding
Participant elects to convert all or any part of the Loans in which it has
purchased hereunder into the common stock of Borrower, it shall provide written
notice of such election to Lender and Borrower. Participant and Borrower each
agree to comply with Section 9.2 of the Loan Agreement in connection with any
such conversion. Borrower agrees to accept Participant's instructions with
regard to any such conversion as if it were made by Lender. Borrower agrees to
forward to Participant all information which Lender is entitled to receive from
Borrower, if any, regarding the conversion price for such shares, and any
adjustments thereto as provided in Section 9.3 of the Loan Agreement. Upon the
issuance of any shares pursuant to Participant's conversion of any of the Loans
purchased hereunder, Lender shall also assign all of its rights under Article 10
of the Loan Agreement to the registration of such shares in accordance with the
Securities Act of 1933, as permitted by Section 10.10 of the Loan Agreement.

8. Reports, Etc. Lender shall promptly furnish to the Participant copies of all
reports and financial statements received from the Borrower pursuant to the Loan
Agreement and shall promptly notify the Participant of the occurrence of any
event of default under any of the Loan Documents of which Lender has actual
knowledge and of any information as to any actual or potential event of default
received by Lender from any source which Lender believes to be accurate and
reliable, but Lender shall have no responsibility to the Participant for any
errors or omissions in any such reports, financial statements or other
information.

9. Participant's Investigation; No Reliance on Lender. The Participant
acknowledges that (a) the Participant has performed and will continue to perform
its own credit analysis of the Borrower and its own investigation of the risks
involved in the transactions contemplated by the Loan Documents and in entering
into this Agreement and purchasing an interest in the Loan hereunder, and it has
not and will not rely on Lender with respect thereto, (b) the Participant has
reviewed and approved the form and substance of each of the Loan Documents and
(c) Lender has not made and shall not at any time be deemed to make any
representation or warranty, express or implied, with respect to the validity or
enforceability of any of the Loan Documents or the validity, enforceability,
value or sufficiency of, or title to, any security for the Loans or as to the
financial condition or creditworthiness of the Borrower. 10. No Recourse;
Limitation of Lender's Liability. Except for the failure of Lender to comply
with the terms of this Agreement, the Participant shall have no recourse against
Lender for any payment of principal of or interest on the Loans or for any fees
or other amounts payable by the Borrower under any of the Loan Documents.
Lender's only obligation with respect to such payments shall be to remit to the
Participant its pro rata share thereof when, as and if received by Lender.
Although Lender will endeavor to exercise the same care in administering the
Loans as if the Loans were made entirely for Lender's own account, Lender shall
have no liability to the Participant for any loss except as loss due to Lender's
own gross negligence or willful misconduct. Without limiting the foregoing,
Lender shall be fully protected in relying upon any certificate, document or
other communication which appears to it to be genuine and to have been signed or
presented by the proper person or persons and upon the advice of legal counsel,
independent accountants and other appropriate experts and shall not be required
to make any inquiry concerning the performance by the Borrower of its
obligations under or compliance by the Borrower with the terms and conditions of
any of the Loan Documents.
11. Reimbursement and Indemnification. The Participant shall reimburse Lender on
demand for its Participation Percentage of all out-of-pocket expenses, including
reasonable attorneys' fees, incurred by Lender in connection with the making or
collection of the Loans, to the extent not recovered from the Borrower. The
obligations under this paragraph 11 shall survive the payment in full of the
Loans and termination of the Loan Documents.
12. Sharing of Payments. If the Participant, Lender or any other participant
(and in granting any such other participation Lender will cause the participant
similarly so to agree) shall receive from any person, by voluntary payment or
through exercise of the right of set-off, counterclaim, crossclaim or otherwise,
any amount applicable to the payment of the Loans or any other obligation of the
Borrower under the Loan Documents, the Participant, Lender or such other
participant shall make such disposition thereof or such arrangement with the
others as shall ensure that each party shall receive its pro rata share of such
amount at the time it was received. If any part thereof is, for any reason,
required to be refunded, appropriate adjustments shall be made among the
Participant, Lender and any other participant.
13. Notices and Payments. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed to be given when delivered to
the designated party at the address or the telefax number set forth beside the
signature line of such party, or if given by mail on the third day following the
deposit thereof in the United States mail, registered or certified, with postage
prepaid, addressed to the designated party at the address set forth beside the
signature line of such party. All amounts payable by either party to the other
party hereunder shall be paid in lawful currency of the United States and in
immediately available funds at the address set forth beside the signature line
of such party. Either party may change the address to which notices and payments
are to be sent by notice of such change to the other party given as provided
herein. 14. Entire Agreement. This Agreement embodies the entire agreement and
understanding between Lender and the Participant and supersedes any and all
prior agreements and understandings with respect to the subject matter hereof.
This Agreement may not be amended or in any manner modified unless such
amendment or modification is in writing and signed by both parties. 15. Benefits
and Binding Effect. The Participant shall not sell, assign or otherwise transfer
its rights under this Agreement without the prior consent of Lender. Subject to
the foregoing, all provisions contained in this Agreement or any document or
agreement referred to herein or relating hereto shall inure to the benefit of
and shall be binding upon the respective permitted successors and assigns of
Lender and the Participant.
16.      Governing  Law.  This  Agreement  shall be  governed by and  construed
in  accordance  with the laws of the  Commonwealth  of Massachusetts without
regard to its conflict of laws.

                      [Signature page immediately follows]





<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Participation
Agreement as of the date first written above.


LENDER:

Address for Notices and payments:

John E. Reed
                                                --------------------------------
10 Tekoa Terrace                                JOHN E. REED
Westfield, MA 01085 Facsimile: 413.564-5814

PARTICIPANT:

Address for Notices and payments:               MESTEK, INC.

Mestek, Inc.
260 North Elm Street                            By:
                                                -------------------------------
Westfield, MA 01085                             Stephen M.. Shea
Facsimile: 413.568.7428                         Senior Vice President-Finance


AGREEMENT OF BORROWER:

         CareCentric, Inc., Borrower under the Loan Agreement, hereby (i)
consents to the Participation of Participant in the Loans, (ii) acknowledges the
rights of Participant with respect to the Loans created under the foregoing
Participation Agreement, (iii) agrees to perform the obligations applicable to
it under the foregoing Participation Agreement and (iv) acknowledges the
Participant as a third-party beneficiary under the Loan Agreement.


                                        CARECENTRIC, INC.


CareCentric, Inc.                       By:
                                        ---------------------------------------
2625 Cumberland Parkway                  Dennis Brauckman
Suite 310                                Chief Financial Officer
Atlanta, GA 30339
Facsimile: 770.384.1603