SIMIONE CENTRAL HOLDINGS INC, S-4, 2000-02-10

SIMIONE CENTRAL HOLDINGS INC
S-4, 2000-02-10
PREPACKAGED SOFTWARE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 2000

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

SIMIONE CENTRAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
---------------------

<TABLE>
<S> <C> <C>
DELAWARE 8082 22-3209241
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

6600 POWERS FERRY ROAD
ATLANTA, GEORGIA 30339
(770) 644-6500
(Address, including zip code, telephone number, including
area code, of registrant's principal executive offices)
---------------------
R. BRUCE DEWEY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
6600 POWERS FERRY ROAD
ATLANTA, GEORGIA 30339
(770) 644-6500
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
---------------------
COPIES TO:

<TABLE>
<S> <C>
ROBERT F. DOW, ESQ. FRANCIS FITZPATRICK, ESQ.
ARNALL GOLDEN & GREGORY, LLP BAKER & MCKENZIE
2800 ONE ATLANTIC CENTER 815 CONNECTICUT AVENUE
1201 WEST PEACHTREE STREET SUITE 900
ATLANTA, GEORGIA 30309-3450 WASHINGTON, D.C. 20006
(404) 873-8500 (202) 452-7051
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement and the
effective time of the merger of MCS, Inc., a Pennsylvania corporation ("MCS"),
with and into Simione Central Holdings, Inc., a Delaware corporation ("Simione"
or the "Registrant") as described in the Second Amended and Restated Agreement
and Plan of Merger and Investment Agreement among Simione, MCS, Mestek, Inc. and
certain major stockholders of Mestek dated as of October 25, 1999 (the "Merger
Agreement"), attached as Appendix A to the Joint Proxy Statement/Prospectus
forming a part of this Registration Statement.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------------------
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE(3)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $.001 par value per
share............................... 11,392,944 Shares $1.3756 $15,672,133 $4,138
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Represents the maximum number of shares of common stock of the Registrant,
$.001 par value per share, estimated to be issuable upon the completion of
the merger of MCS with and into Simione based on the issuance of
approximately 0.84 shares of common stock of the Registrant in exchange for
each share of common stock of MCS, $1.00 par value per share (based on
8,844,403 shares of MCS common stock outstanding as of February 1, 2000)
plus warrants to purchase 2,000,000 shares of common stock and options to
purchase 1,943,708 shares of common stock. This calculation assumes that no
dissenters rights are exercised.

(2) Pursuant to Rules 457(f)(2) under the Securities Act and estimated solely
for the purpose of calculating the registration fee, the proposed maximum
aggregate offering price is equal to the weighted average of (i) 7,449,266
shares at $.33 per share, or one-third of the aggregate par value of the MCS
common stock to be cancelled in the merger, based upon $1.00, the par value
of MCS common stock on September 30, 1999, (ii) 2,000,000 warrants at an
exercise price of $2.175, and (iii) 1,943,708 options at an average exercise
price of $4.55.

(3) A fee of $3,491 was paid in connection with the filing of the preliminary
joint proxy statement/prospectus on October 8, 1999 pursuant to Rule
14a-6(i) promulgated under the Securities Exchange Act of 1934. Accordingly,
pursuant to Rule 457(b) under the Securities Act, such fee is being credited
against the registration fee.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION ON SUCH DATE OR DATES AS MAY
BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [X]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

Simione Central Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ ] No fee required.

[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

Common Stock, $0.001 par value of Simione
------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

7,449,266 shares of common stock of Simione, 5,600,000 shares of Series
B Preferred Stock of Simione, Warrants to purchase 2,000,000 shares of
common stock of Simione, and options to purchase up to 1,943,708
shares of common stock of Simione.
------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
$.33 per share of MCS common stock (8,884,403 shares) pursuant to Rule
0-11(a)(4), one-third of the par value, for the common stock and
warrants to be received in the merger, plus $6,000,000 in cash to be
received for the Series B Preferred Stock and Warrants.
------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

$8,931,853
------------------------------------------------------------------------

(5) Total fee paid:

$1,786
------------------------------------------------------------------------

[X] Fee paid previously with preliminary materials:

$3,491
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing Party:

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

(4) Date Filed:

------------------------------------------------------------------------
<PAGE> 3

SIMIONE CENTRAL HOLDINGS, INC. -- MCS, INC.
JOINT PROXY STATEMENT/PROSPECTUS
MERGER PROPOSED -- YOUR VOTE IS IMPORTANT

Dear Stockholder:

The boards of directors of Simione Central Holdings, Inc. and MCS, Inc.
have unanimously approved a merger of our companies because we believe the
resulting combination will create an opportunity to take advantage of each
company's complementary products in the home health care information systems
market. We cannot complete the merger unless both companies' stockholders
approve it.

If the merger is completed, MCS stockholders will receive approximately
0.8520 shares of Simione common stock in exchange for each share of MCS common
stock that they own for a total of approximately 7,449,266 shares. These shares
will be subject to a two year lockup. Simione stockholders will give up voting
control of Simione if they approve the merger. You should read the description
of the terms of merger beginning on page 5 to enable you to make an informed
vote.

On February 7, 2000, the Simione common stock, which is traded on the
Nasdaq National Stock Market's National Market System under the symbol "SCHI"
closed at $1 13/16. MCS common stock is not listed on any exchange.

In addition, you will be asked to vote on several other matters. These are
listed in the Notice of Meetings for Simione and MCS on the next two pages.

EACH COMPANY'S BOARD HAS UNANIMOUSLY DETERMINED THAT THE MERGER IS IN YOUR
BEST INTERESTS AND RECOMMENDS THAT YOU VOTE IN FAVOR OF THE MERGER. WE ALSO
RECOMMEND THAT YOU APPROVE THE OTHER PROPOSALS.

This document provides you with detailed information about the proposed
merger. We encourage you to read this entire document carefully.

<TABLE>
<S> <C>
/s/ BARRETT C. O'DONNELL /s/ WILLIAM A. THOMASMEYER
Barrett C. O'Donnell William A. Thomasmeyer
Chairman President and Chief Executive Officer
Simione Central Holdings, Inc. MCS, Inc.
</TABLE>

FOR RISKS INVOLVED IN THE MERGER, SEE "RISK FACTORS," BEGINNING ON PAGE 18.

Neither the Securities and Exchange Commission nor any state securities
regulators have approved the Simione common stock that we will issue under this
joint proxy statement/prospectus or determined whether this joint proxy
statement/prospectus is accurate or adequate. Any representation to the contrary
is a criminal offense.

This document is dated February 9, 2000 and is first being mailed to
stockholders on or about February 11, 2000.
<PAGE> 4

SIMIONE CENTRAL HOLDINGS, INC.

NOTICE OF SPECIAL MEETING
INSTEAD OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 7, 2000

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

To Our Stockholders:

We are holding a special meeting of stockholders instead of an annual
meeting. The special meeting will be held at the offices of Simione at 6600
Powers Ferry Road, Atlanta, Georgia, 30339, on March 7, 2000, at 10:00 a.m.,
local time, for the following purposes:

1. To consider and vote on a proposal to approve the merger of MCS,
Inc. into Simione Central Holdings, Inc.;

2. To elect six directors;

3. To approve conversion of the Series A Preferred Stock of Simione,
issued in the recent merger with CareCentric Solutions, Inc., into shares
of Simione common stock;

4. To increase the number of shares of Simione common stock reserved
for issuance under the Simione Omnibus Equity-based Incentive Plan from
1,250,000 shares to 2,250,000 shares;

5. To authorize the board of directors to amend Simione's certificate
of incorporation to effect a reverse stock split of Simione's common stock;

6. To amend Simione's certificate of incorporation to increase the
number of authorized shares of Simione common stock from 20 million shares
to 40 million shares if the reverse stock split is not approved and
completed;

7. The adjournment of the special meeting, if necessary, to permit
further solicitation of proxies if there are not sufficient votes at the
time of the special meeting to approve the merger; and

8. To transact any other business that properly comes before the
meeting.

Stockholders of record as of the close of business on December 30, 1999
will be entitled to vote at the meeting and any adjournment or postponement of
it.

You are welcome to attend the special meeting. Whether or not you plan to
attend the meeting, please complete, date and sign the enclosed proxy card and
return it promptly in the enclosed envelope. You may revoke your proxy at any
time prior to the time it is voted by following the directions on pages 26 to 28
of the joint proxy statement/prospectus.

By Order of the Board of Directors,

/s/ BARRETT C. O'DONNELL

Barrett C. O'Donnell
Chairman

Atlanta, Georgia
February 9, 2000

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 5

MCS, INC.
400 PENN CENTER
PITTSBURGH, PENNSYLVANIA 15235
---------------------

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 7, 2000
---------------------

To the Stockholders:

We are holding a special meeting of stockholders. The special meeting will
be held at our offices at 400 Penn Center, Pittsburgh, PA 15235, at 10:00 A.M.,
local time, on March 7, 2000, for the following purposes:

1. To consider and vote on the merger of MCS into Simione Central Holdings,
Inc.;

2. To select six designees who will be added to the Simione board of
directors after the merger and, except as described on page 161, who will be
nominated as part of management's slate of candidates for the Simione board for
eighteen months after the merger; and

3. To transact any other business that properly comes before the meeting.

You are not asked to vote on the spin-off of MCS common stock from Mestek,
Inc. which will occur on the last business day before the meeting, as the
spin-off does not require stockholder approval. A copy of the Registration
Statement on Form 10 describing the spin-off is also enclosed. You should read
it carefully so that you understand the business of MCS.

Three significant stockholders of MCS, who will collectively have the power
to vote approximately 66% of the outstanding shares of MCS common stock, have
agreed to vote these shares in favor of the proposals to adopt the merger
agreement and the selection of the nominees. Therefore, adoption of the merger
agreement and the selection of the nominees by the MCS stockholders is assured.

The record date for the spin-off of MCS to the holders of Mestek common
stock is the close of business on January 18, 2000. On the day before the
meeting, stockholders of record of Mestek common stock will also become
stockholders of MCS through the spin-off and will be entitled to vote at the
meeting and any adjournment or postponement of it. No MCS share certificates
will be delivered. We will maintain uncertificated share accounts pending the
stockholders meeting.

HOLDERS OF MCS COMMON STOCK ARE ENTITLED TO DISSENTERS RIGHTS UNDER
PENNSYLVANIA LAW IN CONNECTION WITH THE MERGER. SEE "RIGHTS OF DISSENTING
STOCKHOLDERS" ON PAGE 42 FOR A DESCRIPTION OF YOUR DISSENTERS RIGHTS.

By Order of the Board of Directors,

/s/ TIMOTHY P. SCANLAN
Timothy P. Scanlan, Secretary
<PAGE> 6

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 1
The Stockholder Meetings.................................... 2
Questions and Answers About Voting Procedures............... 2
Additional Summary Information About the Merger............. 4
The Companies............................................. 4
Reasons for the Merger.................................... 4
Terms of the Merger Agreement............................. 5
Ownership and Voting Power of Simione Following the
Merger................................................. 8
Recommendation to Stockholders............................ 8
Interests of Executive Officers and Directors in the
Merger................................................. 9
Opinion of Financial Advisor.............................. 9
Risk Factors.............................................. 9
Differences In The Rights Of Stockholders................. 9
Dissenters Rights......................................... 9
Federal Income Tax Consequences........................... 10
Accounting Treatment...................................... 10
The Spin-Off of MCS....................................... 10
Summary Historical Financial Data........................... 11
Summary Historical Financial Data of Simione.............. 12
Summary Historical Financial Data of MCS.................. 13
Comparative Per Share Data.................................. 14
Market Price Information.................................... 16
Simione................................................... 16
MCS....................................................... 17
Price Range................................................. 17
Risk Factors................................................ 18
Risks Relating to the Merger.............................. 18
Risks Relating to the Business of the Combined Company.... 21
The Simione Special Meeting................................. 26
Purpose of the Meeting.................................... 26
Voting Rights............................................. 26
Independent Public Accountants............................ 29
The MCS Special Meeting..................................... 29
Purpose of the Meeting.................................... 29
Voting Rights............................................. 29
Independent Public Accountants............................ 31
Comparison of MCS and Simione Stockholder Rights............ 31
Rights of Dissenting Stockholders........................... 42
Background of The Merger.................................... 46
Recommendation of the Simione Board and Reasons for the
Merger.................................................... 54
Interests of Officers and Directors of Simione............ 58
Recommendation of the MCS Board and Reasons for the
Merger.................................................... 58
Interests of Officers and Directors of MCS and Mestek..... 61
Opinion of Financial Advisor -- HLB Gross Collins........... 61
Valuation of MCS and Simione for Merger Agreement......... 61
Valuation of MCS.......................................... 63
Valuation of Simione...................................... 65
Fees...................................................... 67
Additional Valuation Analysis of Simione Securities....... 68
Selection of Gross Collins................................ 69
The Merger and Investment Agreement......................... 69
General................................................... 69
Exchange of Shares........................................ 69
</TABLE>

i
<PAGE> 7

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Mestek Option............................................. 70
Restrictions on Sales of Merger Shares.................... 70
Mestek Investment......................................... 71
Mestek Loans.............................................. 72
Change in Ownership of Simione............................ 74
Stock Options and Warrants................................ 76
Representations and Warranties............................ 76
Restrictions on the Conduct of MCS and Simione Pending the
Merger................................................. 77
Tax and Accounting Treatment.............................. 78
Registration Rights....................................... 79
Facilitating the Merger................................... 79
Transfer of ProfitWorks Business.......................... 79
Indemnification........................................... 80
Other..................................................... 80
Conditions to the Merger.................................. 80
Termination of the Merger Agreement....................... 81
Voting Agreements........................................... 82
Regulatory Filings and Approvals............................ 83
Accounting Treatment of the Merger.......................... 84
Listing of New Shares of Simione Common Stock on the Nasdaq
Stock Market.............................................. 85
Federal Income Tax Considerations........................... 86
Federal Income Tax Consequences to Mestek, MCS and Their
Stockholders........................................... 87
Federal Income Tax Consequences to Simione and its
Stockholders........................................... 91
Legal Matters............................................... 91
Unaudited Pro Forma Financial Data.......................... 92
The Business of MCS......................................... 104
Overview.................................................. 104
MestaMed.................................................. 104
Regulation................................................ 105
Programming............................................... 105
Customers................................................. 107
Competition............................................... 108
Sales and Marketing....................................... 109
Training.................................................. 109
Customer Service.......................................... 110
Consulting................................................ 110
Proprietary Rights and Licenses........................... 110
Employees................................................. 111
Executive Offices......................................... 111
Properties................................................ 111
Legal Proceedings......................................... 112
MCS Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 112
Overview.................................................. 112
Results of Operations..................................... 113
Results of Operations (Unaudited Interim Data)............ 115
Year 2000 Disclosure...................................... 117
Liquidity and Capital Resources........................... 118
The Business of Simione..................................... 120
Overview.................................................. 120
Recent Developments....................................... 120
Industry Overview......................................... 121
The Simione Central Solutions............................. 122
Strategy.................................................. 123
Information Systems....................................... 123
Service Solutions......................................... 127
</TABLE>

ii
<PAGE> 8

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Customers................................................. 128
Sales and Marketing....................................... 128
Backlog................................................... 128
Technology................................................ 128
Research and Development.................................. 129
Competition............................................... 129
Proprietary Rights and Product Protection................. 131
Government Regulation and Health Care Reform.............. 131
Employees................................................. 134
Properties................................................ 134
Legal Proceedings......................................... 135
Selected Consolidated Historical Financial Data of
Simione................................................... 136
Simione Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 138
Overview.................................................. 138
Results of Operations..................................... 140
Comparison of Nine Month Periods Ended September 30, 1999
and 1998............................................... 140
Comparison of Years Ended December 31, 1998 and 1997...... 142
Comparison of Years Ended December 31, 1997 and 1996...... 144
Backlog................................................... 146
Selected Quarterly Financial Results...................... 146
Liquidity and Capital Resources........................... 148
Impact of New Accounting Standards........................ 151
Year 2000 Issues.......................................... 152
Ownership of Simione Capital Stock.......................... 154
Certain Relationships and Related Transactions.............. 157
Management of Simione Following the Merger.................. 161
Pro Forma Ownership of Simione Capital Stock................ 162
Proposal 2 for Simione and MCS Stockholders -- Election of
Simione Directors and MCS Designees to the Simione
Board..................................................... 165
Nominees to be Voted on by Simione Stockholders........... 165
MCS Designees to be Voted on by MCS Stockholders for
Appointment to the Simione Board of Directors.......... 167
Board of Directors and Committee Meetings................. 168
Voting Agreement.......................................... 169
Director Compensation..................................... 170
Compensation Committee Interlocks and Insider
Participation.......................................... 170
Proposal 3 for Simione Stockholders -- To Approve the
Issuance Upon Conversion of Series A Preferred Stock of
Shares of Common Stock, as Required by Nasdaq Rules....... 170
Rights and Preferences of the Series A Preferred Stock.... 171
Disinterested Transaction................................. 174
Dilutive Effects of Conversion............................ 174
Reasons for the Exchange.................................. 175
Proposal 4 for Simione Stockholders -- Increase in the
Number of Shares Reserved for Issuance Under the Simione
Central Holdings, Inc. Omnibus Equity-Based Incentive
Plan...................................................... 176
Effect of Increase in Shares.............................. 176
Grants of Stock Incentives................................ 176
Exercise Price............................................ 177
Terms of Options.......................................... 177
Stock Appreciation Rights................................. 177
Eligibility to Participate................................ 178
The Compensation Committee................................ 178
Transferability of Stock Incentives....................... 178
Adjustments to Stock Incentives........................... 178
</TABLE>

iii
<PAGE> 9

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Plan Amendments........................................... 178
New Plan Benefits......................................... 179
Federal Income Tax Consequences to Participants........... 179
Proposal 5 for Simione Stockholders -- Reverse Stock Split
Proposal.................................................. 181
Board Discretion to Implement Reverse Split............... 181
Reasons for the Reverse Split............................. 181
Effects of the Reverse Split on the Simione Common
Stock.................................................. 184
Anti-Takeover Effect...................................... 185
Implementation of Reverse Split........................... 185
Amendment Effective Date.................................. 185
Payment for Fractional Shares............................. 186
Exchange of Stock Certificates............................ 186
Federal Income Tax Consequences of the Reverse Split...... 187
Miscellaneous............................................. 187
Vote Required............................................. 188
Proposal 6 for Simione Stockholders -- Amendment to
Simione's Certificate of Incorporation to Increase
Simione's Authorized Common Stock......................... 188
Outstanding Shares........................................ 188
Rights of Holders......................................... 189
Anti-Takeover Effect...................................... 189
Dilutive Effect........................................... 189
Required Vote............................................. 189
Proposal 7 for Simione Stockholders -- Adjournment of
Meeting................................................... 190
Executive Compensation...................................... 190
Compensation Committee Report on Executive Compensation... 190
Stockholder Return Performance Graph...................... 192
Compensation Summary...................................... 193
Grants of Stock Options................................... 195
Option Exercises and Holdings............................. 195
Employment Agreements..................................... 196
Severance Agreements...................................... 196
Other Business.............................................. 197
Solicitation Costs.......................................... 197
Stockholder Proposals and Nominations for the 2000 Annual
Meeting................................................... 197
Experts..................................................... 197
Changes in Registrant's Independent Public Accountants...... 198
Section 16(a) Beneficial Ownership Reporting Compliance..... 199
Where You Can Find More Information......................... 199
Index to Financial Statements............................... F-1
Simione Central Holdings, Inc............................. F-4
MCS, Inc.................................................. F-39
CareCentric Solutions, Inc................................ F-52
Appendix A -- Amended and Restated Agreement and Plan of
Merger and Investment Agreement........................... A-1
Appendix B -- Certificate of Designations -- Series B
Preferred Stock........................................... B-1
Appendix C -- Pennsylvania Dissenters Rights Statute........ C-1
Appendix D -- Certificate of Designations -- Series A
Preferred Stock........................................... D-1
Appendix E -- Amendment to Certificate of Incorporation..... E-1
Appendix F -- Certificate of Designations -- Series C
Preferred Stock........................................... F-1
</TABLE>

iv
<PAGE> 10

SUMMARY

TRANSACTIONS

Simione Central Holdings, Inc., Mestek, Inc., Mestek's wholly-owned
subsidiary MCS, Inc. and three large Mestek stockholders have entered into an
Amended and Restated Agreement and Plan of Merger and Investment Agreement. If
the merger agreement is approved by the stockholders of both MCS and Simione at
the stockholders' meetings, MCS will be merged with and into Simione.

The boards of directors of Simione and MCS have unanimously approved a
merger of our companies because we believe the resulting combination will create
an opportunity to take advantage of each company's complementary products in the
home health care information systems market. We cannot complete the merger
unless both companies' stockholders approve it.

The merger probably will cause Simione's common stock to be delisted from
the Nasdaq National Market, although Simione intends to apply to have the common
stock listed on the Nasdaq SmallCap Market. Simione believes that the common
stock will qualify for the Nasdaq SmallCap Market listing if the Simione
stockholders approve the reverse stock split proposal. See "Listing of New
Shares of Simione Common Stock on the Nasdaq Stock Market" at page 85 for a
discussion of this issue.

The Simione stockholders will be asked to approve a reverse stock split of
the outstanding Simione common stock. The ratio for the reverse stock split has
not been determined, but will be based on requirements to allow for the listing
of the common stock on the Nasdaq National or SmallCap Market. Because the ratio
has not been determined, when we refer to the number of Simione shares in this
joint proxy statement/prospectus, the number has not been adjusted for the
proposed stock split, unless otherwise indicated.

In addition, you will be asked to vote on several other matters. These are
listed beginning on page 26.

At the close of business on the day before the MCS stockholders' meeting,
March 7, 2000, Mestek will distribute in uncertificated form all of its MCS
stock on a pro rata basis to the stockholders of record of Mestek at the close
of business on January 18, 2000. You are not asked to vote on this spin-off as
it does not require stockholder approval.

1
<PAGE> 11

THE STOCKHOLDER MEETINGS

Simione is holding a special meeting of stockholders instead of an annual
meeting. The special meeting will be held at the offices of Simione at 6600
Powers Ferry Road, Atlanta, Georgia 30339 at 10:00 a.m., local time, on March 7,
2000.

MCS is holding a special meeting of stockholders. The meeting will be held
at the offices of MCS at 400 Penn Center, Pittsburgh, Pennsylvania 15235 at
10:00 a.m., local time, on March 7, 2000.

QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES

Q: HOW DO I VOTE?

A: After reading this joint proxy statement/prospectus, please fill out and
sign your proxy card. Then mail your signed proxy card in the enclosed
return envelope as soon as possible so that your shares will be represented
at the meeting.

Q: WHAT HAPPENS IF I DON'T RETURN A PROXY CARD?

A: Your failure to return your proxy card will have the same effect as voting
against the merger, the proposal to approve the reverse stock split, and the
proposal to amend Simione's certificate of incorporation to increase the
authorized common stock. Shares that are not voted will have no effect on
the other proposals to be considered at the meeting.

Q: MAY I VOTE IN PERSON?

A: Yes. You may attend the meeting and vote your shares in person, rather than
signing and mailing your proxy card.

Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

A: Yes. You may change your vote at any time before your proxy is voted at the
special meeting. To do so, you can:

- attend the special meeting and vote in person, which will automatically
revoke your proxy,

- complete a new proxy card or

- send a written notice stating you would like to revoke your proxy. The
written request should be sent to:

<TABLE>
<S> <C>
SIMIONE STOCKHOLDERS MCS STOCKHOLDERS
Simione Central Holdings, Inc. MCS, Inc.
6600 Powers Ferry Road 400 Penn Center
Atlanta, GA 30339 Pittsburgh, PA 15235
Attn: Corporate Secretary Attn: Corporate Secretary
</TABLE>

2
<PAGE> 12

Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE THEM
FOR ME?

A: Yes, but your broker will vote your shares only if you provide instructions
on how to vote. Otherwise, without instructions, your shares will not be
voted. Shares that are not voted will have the same effect as shares voted
against the merger, the proposal to approve the reverse stock split, and the
proposal to amend Simione's certificate of incorporation to increase the
authorized common stock. Shares that are not voted will have no effect on
the other proposals to be considered at the meeting.

Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?

A: You may own both MCS and Simione shares, or your shares may be registered in
different names or at different addresses or are in more than one account.
Sign and return all proxy cards to ensure that all your shares are voted.
Please have all of your accounts registered in the same name and address.
You may do this by contacting Simione's transfer agent, Continental Stock
Transfer & Trust Company, at (212) 509-4000, if you are a Simione
stockholder, or by contacting MCS' transfer agent, EquiServe, at (781)
575-2000, if you are a MCS stockholder.

Q: WHAT DO I NEED TO DO NOW?

A: After you have carefully read this joint proxy statement/prospectus just
complete and sign your proxy card and mail it in the enclosed envelope as
soon as possible. That way, your shares can be represented at the
stockholders meeting.

Q: WHO CAN HELP ANSWER YOUR QUESTIONS?

A: If you have questions about the merger or the stockholders meetings you
should contact:

<TABLE>
<S> <C>
SIMIONE STOCKHOLDERS MCS STOCKHOLDERS
Simione Central Holdings, Inc. MCS, Inc.
6600 Powers Ferry Road 400 Penn Center
Atlanta, Georgia 30339 Pittsburgh, Pennsylvania 15235
Attention: Shareholder Relations Attention: Corporate Secretary
(770) 644-6769 (413) 564-5849
</TABLE>

3
<PAGE> 13

ADDITIONAL SUMMARY INFORMATION ABOUT THE MERGER

To understand the merger fully and for a more complete description of the
legal terms of the merger, you should carefully read this entire document and
the documents to which we have referred you. The merger agreement is included as
Appendix A to this joint proxy statement/prospectus. It is the legal document
that governs the merger. See "Where You Can Find More Information" on page 199
for information on how to get copies of documents which we have referred you to.

THE COMPANIES

SIMIONE CENTRAL HOLDINGS, INC. Simione provides information systems and
consulting to customers nationwide. Simione provides freestanding,
hospital-based and multi-office home health care providers complete information
solutions that address all aspects of home health care operations. Simione is
headquartered in Atlanta, Georgia and has offices nationwide. In 1998, Simione
had approximately $41.6 million in revenues and a net loss of approximately
$12.2 million. As of September 30, 1999, Simione had approximately 2,000
customers. See "The Business of Simione" beginning on page 120 for a complete
description of Simione's business.

On July 12, 1999, Simione entered into a merger agreement with CareCentric
Solutions, Inc., another information systems company for the home health care
industry. The CareCentric merger was completed on August 12, 1999. Under the
CareCentric agreement, Simione issued 3,034,521 shares of Series A Preferred
Stock to the former preferred stockholders and noteholders of CareCentric which
Series A Preferred Stock is convertible into Simione common stock on a
share-for-share basis upon the approval of the conversion by a majority of the
Simione stockholders. See "Background of the Merger" beginning on page 46 for a
more complete description of the terms of the merger agreement with CareCentric.

CareCentric was a leading provider of point-of-care systems in the home
health care information systems marketplace. Simione believes that CareCentric's
system, The Smart ClipBoard(TM), is the home health care industry's leading,
Windows 95, pen-compatible, point-of-care clinical information system. The
financial statements of CareCentric are included in this joint proxy
statement/prospectus beginning on page F-51.

Our executive offices are at 6600 Powers Ferry Road, Atlanta, GA 30339,
telephone 770-644-6700.

MCS, INC. MCS is a leading provider of information systems and services to
the home health care industry, specializing in the needs of home medical
equipment providers, with approximately $14.9 million in revenues from
continuing operations and $1.4 million in net income in 1998. MCS markets its
products under the MestaMed name. As of September 30, 1999, MCS had
approximately 570 active customers. See "The Business of MCS" beginning on page
104 for a complete description of MCS' business.

Our executive offices are at 400 Penn Center, Pittsburgh, PA 15235,
telephone 412-823-7440.

REASONS FOR THE MERGER

Our companies are proposing to merge because we believe the resulting
combination will create an opportunity to achieve significant operating
efficiencies and better exploit the
4
<PAGE> 14

individual companies' complementary products in the home health care information
systems market. The MCS merger is intended to bring Simione the following
resources:

- approximately 570 home medical equipment, home health agency and IV
therapy providers as active customers utilizing MCS' MestaMed system;

- experienced personnel with knowledge about the operations and information
technology needs of home medical equipment providers;

- experienced home medical equipment billing and reimbursement consultants
through MCS' management services division;

- an ability to develop computer-based training programs to train employees
and customers in the support and operation of software;

- knowledge about care plans and outcomes management that can be used with
other computer programs that collect data at the time and place services
are provided (known as "point of care" in the industry) to patients;

- a program to increase customer satisfaction and the efficiency of
customer support that can be used by all of Simione's existing support
providers;

- a specification for the development of a next generation, web-enabled,
home medical equipment software product that if proven feasible, could be
developed and tested within a reasonable period and would be easier to
install, support and use;

- an experienced operations crew that has evidenced an ability to generate
profits; and

- an additional equity infusion from Mestek of approximately $6 million
(consisting of approximately $2 million in cash and $4 million in
forgiveness of debt).

There is no assurance that these goals and benefits will be realized
because of the inherent risks in combining and growing businesses, competition,
limitations on resources and other factors set forth in "Risk Factors" beginning
on page 18.

TERMS OF THE MERGER AGREEMENT

THE MERGER. MCS will be merged with and into Simione and Simione will be
the surviving corporation. Simione will operate the MCS business after the
merger. Individuals who owned MCS common stock before the merger will own
Simione common stock after the merger.

MERGER CONSIDERATION. MCS stockholders will receive approximately 0.8520
shares of Simione common stock for each share of MCS common stock they own. See
"The Merger and Investment Agreement -- Exchange of Shares" beginning on page 69
for a description of how this exchange ratio is calculated and can change.

No fractional shares of Simione common stock will be issued. MCS
stockholders will be paid cash instead of fractional shares. Simione
stockholders will continue to own their existing shares of Simione common stock
following the merger because Simione will be the surviving corporation.
5
<PAGE> 15

The Simione shares received by MCS stockholders in the merger will be
subject to a lockup restriction that prohibits the Simione shares from being
sold or transferred for two years after the merger, except if:

- you sell your Simione shares to Mestek;

- you sell your Simione shares to any person who was an MCS stockholder on
the date of the MCS spin-off; or

- you obtain the prior written consent of Mestek for the sale.

See "The Merger and Investment Agreement -- Restrictions on Sales of Merger
Shares" beginning on page 70 for a complete description of this lockup.

If the merger is completed, Simione will issue shares of Simione common
stock to MCS stockholders who have returned a completed letter of transmittal
supplied by Simione or Simione's exchange agent, Continental Stock Transfer &
Trust Company. See "The Merger and Investment Agreement -- Exchange of Shares"
beginning on page 69 for a complete description of the steps you need to take to
obtain your shares of Simione common stock.

Simione will use its best efforts to cause the shares of Simione common
stock to be issued to MCS stockholders in the merger to be approved for listing
on The Nasdaq Stock Market's National Market System prior to the closing of the
merger.

EFFECTIVE TIME OF THE MERGER. If approved by the stockholders of Simione
and MCS, the merger will become effective when all necessary documentation has
been filed in Delaware and Pennsylvania. Simione plans on filing these documents
promptly after the satisfaction or waiver of the conditions to the merger.

BOARD OF DIRECTORS OF SIMIONE FOLLOWING THE MERGER. If the merger is
completed, the six directors of Simione elected at the Simione stockholders
meeting will continue to be the directors of Simione. Two of these six
directors, Daniel J. Mitchell and Jesse I. Treu, are designees of the former
stockholders of CareCentric Solutions, Inc., which was acquired by Simione on
August 12, 1999. Simione is required to include two CareCentric designees on its
board for 18 months after the completion of the CareCentric merger on August 12,
1999. See "Voting Agreements" at page 82.

In addition, the six designees selected by the MCS stockholders at the MCS
stockholders meeting will be appointed to the Simione board of directors after
the merger and will be nominated as members of management's slate of candidates
for director for 18 months after the merger.

So long as the Series B Preferred Stock remains outstanding, its holders
will have the right to appoint a thirteenth director if the Simione board of
directors is deadlocked. See "Voting Agreements" beginning on page 82 for a
description of when the holders of Series B Preferred Stock can appoint the
additional director.

MESTEK INVESTMENT. On September 9, 1999, Mestek loaned Simione $3 million.
On February 4, 2000, Mestek loaned Simione an additional $1 million. At the
closing of the merger, Mestek will forgive these loans and invest an additional
approximately $2 million in Simione, in exchange for the following Simione
securities:

- 5,600,000 shares of Series B Preferred Stock, which shall have voting
rights equal to two votes of Simione common stock for each preferred
share; and
6
<PAGE> 16

- a warrant to purchase 2,000,000 shares of Simione common stock at a per
share exercise price equal to the greater of $2.175 or the Nasdaq closing
price on the closing date of the merger, not to exceed $3.00 per share.

In addition, on November 11, 1999, Mestek loaned Simione $850,000 under a
promissory note that is convertible at Mestek's option into 850,000 shares of
Series C Preferred Stock of Simione upon completion of the merger. Each share of
Series C Preferred Stock has one vote on all matters voted on by stockholders.
See "The Merger and Investment Agreement -- Mestek Loans" beginning on page 72
for a description of these loans and the securities Mestek can receive.

MESTEK OPTIONS. Mestek will also receive a series of options to purchase a
total of approximately 1,943,708 shares of Simione common stock. See "The Merger
and Investment Agreement -- Mestek Option" beginning on page 70 for a
description of these options.

CONDITIONS TO THE MERGER. The following conditions need to be satisfied in
order to complete the merger:

- the approval of Simione's and MCS' common stockholders;

- the accuracy of the representations and warranties of each party to the
merger agreement, except where the failure of the representations and
warranties to be accurate does not have a material adverse effect on the
party's business or assets exceeding $2 million;

- the transfer by MCS to Mestek of ProfitWorks, a computer order entry,
inventory, purchasing and accounts receivable program for the building
and construction supply industries, and related business and the
assumption by Mestek all of the liabilities related to the ProfitWorks
business;

- the absence of any governmental action which prohibits the merger;

- the non-occurrence of any material adverse change or event having a
material adverse effect on the business or assets of Simione or MCS equal
to or greater than $2 million;

- the closing of the Mestek approximately $6 million investment in Simione;
and

- the spin-off of MCS by Mestek.

Each of the conditions to the merger may be waived by the company entitled to
assert the condition.

TERMINATION OF THE MERGER AGREEMENT. Simione, MCS and Mestek can mutually
agree to terminate the merger agreement without completing the merger, and any
of them can terminate the merger agreement if any of the following events occur:

- the merger is not completed by January 7, 2000, unless the failure to
complete the merger by this date is due to actions or omissions by the
party seeking to terminate the merger agreement;

- the occurrence or discovery of a material adverse change in the business
or assets of Simione or MCS that, taken as a whole, would be equal to or
greater than $2 million; or
7
<PAGE> 17

- Simione or MCS enters into a binding agreement to merge, sell its assets
or sell its stock to a party that is not a party to the merger agreement.

Simione, MCS and Mestek have informally agreed not to terminate the merger
agreement under the deadline provision prior to March 10, 2000.

TERMINATION FEES. The merger agreement requires Simione or MCS to pay the
other party a termination fee of $1.2 million, plus out-of-pocket expenses
incurred in connection with the merger not to exceed $500,000, if the merger
agreement is terminated after either party executes a binding agreement for a
similar type of transaction with a third party.

OWNERSHIP AND VOTING POWER OF SIMIONE FOLLOWING THE MERGER

Immediately following the merger and assuming the conversion of the Series
A Preferred Stock issued in the CareCentric merger and the conversion of the
Mestek promissory note into Series C Preferred Stock, the ownership of Simione
common stock and the total voting power of Simione will be held as follows:

<TABLE>
<CAPTION>
OWNERSHIP OF
COMMON STOCK TOTAL VOTING POWER
------------ ------------------
<S> <C> <C>
Current Simione common stockholders............. 45.5% 28.0%
MCS stockholders................................ 38.7 23.8
Series A Preferred stockholders................. 15.8 9.7
Series B Preferred stockholder.................. -- 35.8
Series C Preferred stockholder.................. -- 2.7
</TABLE>

The conversion of the Series A Preferred Stock to Simione common stock is
subject to the approval of the Simione common stockholders.

Mestek will own all of the Series B Preferred Stock of Simione. The Series
B Preferred Stock has two votes per share. Mestek will have the right to acquire
all of the Series C Preferred Stock upon conversion of its promissory note. The
Series C Preferred Stock has one vote per share. Mestek has informed us that it
intends to convert its promissory note to Series C Preferred Stock upon the
closing of the merger.

After the merger, John E. Reed will have control of approximately 52% of
the voting power of Simione. See "The Merger and Investment Agreement -- Change
in Ownership of Simione" beginning on page 74 and "Accounting Treatment of the
Merger" beginning on page 84.

RECOMMENDATION TO STOCKHOLDERS

The Simione board believes that the merger is fair to Simione stockholders
and in the best interest of Simione stockholders and unanimously recommends that
Simione stockholders vote FOR the proposal to adopt the merger agreement and FOR
each of the other proposals to be considered at the Simione stockholders
meeting.

The MCS board believes that the merger is fair to MCS stockholders and in
the best interests of MCS stockholders, and unanimously recommends that MCS
stockholders vote for the proposal to adopt the merger agreement and FOR the
proposal to select six designees for the Simione board of directors.
8
<PAGE> 18

INTERESTS OF EXECUTIVE OFFICERS AND DIRECTORS IN THE MERGER

SIMIONE. In considering the Simione board's recommendation that you vote
in favor of the merger, you should be aware that directors and officers of
Simione have interests in the merger that are different from, or in addition to,
the interests of Simione stockholders. These include employment by Simione and
conversion of Series A Preferred Stock of Simione. See "Recommendation of the
Simione Board and Reasons for the Merger -- Interests of Officers and Directors
of Simione" beginning on page 58 for description of these interests.

MCS. In considering the MCS' board of directors' recommendation that you
vote for the merger, you should be aware that the officers and directors of MCS
have interests in the merger that are different from, or in addition to, their
rights as MCS stockholders. These include employment by Simione, appointment to
the Simione board of directors and current ownership of Simione common stock and
options. See "Recommendation of the MCS Board and Reasons for the
Merger -- Interests of Officers and Directors of MCS and Mestek" beginning on
page 61 for description of these interests.

OPINION OF FINANCIAL ADVISOR

The Simione board and the MCS board considered the opinion of HLB Gross
Collins, P.C., CPAs, the financial advisor engaged by Simione and Mestek, as to
the relative values of Simione and MCS. A discussion of the opinion received
from Gross Collins is included in this joint proxy statement/prospectus
beginning on page 61. Stockholders of Simione and MCS should read this
discussion to understand the basis of and limitations of the Gross Collins
opinion.

RISK FACTORS

The success of the merger will be influenced by many factors, including the
risks with which each of Simione and MCS contend and other risks which may
impact their combined operations. See "Risk Factors" beginning on page 18 for a
discussion of risk factors relating to the merger and the businesses of Simione
and MCS.

DIFFERENCES IN THE RIGHTS OF STOCKHOLDERS

Upon completion of the merger, the rights of MCS stockholders who become
stockholders of Simione in the merger will be governed by Delaware law, the
Certificate of Incorporation of Simione and the Bylaws of Simione. See
"Comparison of MCS and Simione Stockholder Rights" beginning on page 31 which
provides a comparison of the rights of stockholders of MCS and Simione.

DISSENTERS RIGHTS

Under Pennsylvania law, MCS stockholders who do not wish to approve the
merger have dissenters rights which is the right to be paid the "fair value" for
your MCS shares. See "Rights of Dissenting Stockholders" beginning on page 42
and in Appendix C to this joint proxy statement/prospectus for a description of
dissenters rights and the steps you must take to obtain dissenters rights.

Under Delaware law, Simione stockholders are not entitled to dissenters or
appraisal rights in the merger.
9
<PAGE> 19

FEDERAL INCOME TAX CONSEQUENCES

We have structured the merger so that Simione, MCS, Mestek and their
stockholders should not recognize any gain or loss for federal income tax
purposes as a result of the merger, except for taxes on cash received by MCS
stockholders for fractional shares in the merger or for the exercise of
dissenters rights, and cash received by Simione stockholders for fractional
shares in the reverse stock split. However, the IRS may assert that the spin-
off of shares of MCS to Mestek stockholders may result in the stockholders and
Mestek recognizing taxable gain. The IRS may also assert that the merger will
cause Mestek to recognize taxable gain on the spin-off. See "Federal Income Tax
Considerations" beginning on page 86 for a description of the U.S. federal
income tax consequences.

ACCOUNTING TREATMENT

The merger will be accounted for as a purchase of Simione by MCS for
financial accounting purposes in accordance with generally accepted accounting
principles.

THE SPIN-OFF OF MCS

On the last business day before the MCS stockholders meeting, all of the
outstanding shares of MCS common stock will be distributed, on a pro rata basis,
to the Mestek stockholders of record on January 18, 2000. No MCS share
certificates will be delivered. MCS will maintain uncertificated share accounts
pending the MCS stockholders meeting. The spin-off of MCS will occur whether or
not the merger is completed.
10
<PAGE> 20

SUMMARY HISTORICAL FINANCIAL DATA

Simione, MCS and Mestek are providing the following financial information
to aid you in your analysis of the financial aspects of the merger. This
information is only a summary and you should read it in conjunction with the
historical financial statements and related notes beginning at page F-1 in this
joint proxy statement/prospectus and in the annual reports and other information
that Simione and Mestek have filed with the SEC. See "Where You Can Find More
Information" on page 199 for information on where you can obtain these reports
and other information.

Each of Simione, MCS and Mestek prepares its financial statements on the
basis of a fiscal year ending on December 31. The financial data of Simione for
each of the five years ended December 31, 1998 are derived from consolidated
financial statements of Simione audited by Arthur Andersen LLP or Ernst & Young
LLP.

The financial data of MCS for each of the two years ended December 31, 1998
are derived from consolidated financial statements of MCS audited by Grant
Thornton, LLP. The financial data of MCS for each of the three years ended
December 31, 1996 are unaudited and derived from the consolidated financial
statements of Mestek audited by Grant Thornton, LLP.
11
<PAGE> 21

SUMMARY HISTORICAL FINANCIAL DATA OF SIMIONE

Simione's financial information reflects the effects of recent
acquisitions, non-recurring charges, extraordinary losses and a renegotiation of
its primary headquarters lease. For more details in each case, please refer to
Simione's complete financial statements and the related notes beginning on page
F-2 of this joint proxy statement/prospectus.

The number of shares used to compute the basic and diluted net loss per
share of Simione common stock reflects the 2,994,856 shares issued in the
reorganization of Simione on January 17, 1996. The number of shares has not been
adjusted for the proposed reverse stock split because the ratio has not been
determined. The basic and diluted loss per share of Simione common stock are the
same given the anti-dilutive effect of net losses for all periods presented. See
Notes 1 and 12 of the notes to consolidated financial statements of Simione on
pages F-8 and F-27 for details of how these figures were calculated.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- --------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
----------- ----------- -------- ------- -------- -------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Net revenues............ $20,278 $36,474 $ 41,646 $46,945 $ 25,995 $ 13,222 $12,110
Other charges
(recoveries).......... (1,140) 7,572 5,011 8,127 13,789 -- --
Loss from operations.... (5,350) (10,419) (12,412) (4,789) (15,991) (956) (708)
Net loss................ (5,280) (10,189) (12,171) (4,514) (15,899) (956) (708)
Basic and diluted loss
per share............. (0.60) (1.19) (1.42) (0.63) (3.71) (0.32) (0.24)
CONSOLIDATED BALANCE
SHEET DATA:
Cash and short-term
investments........... 1,228 9,625 10,527 8,267 3,385 323 463
Working capital
(deficit)............. (6,895) 35 1,301 9,019 (1,203) 189 (837)
Total assets............ 27,930 29,808 27,857 28,919 18,776 1,828 1,340
Total long-term
obligations........... 2,249 -- 2,671 -- 2,986 -- --
Stockholders' equity
(deficit)............. 11,982 9,705 7,724 19,489 4,680 650 (837)
</TABLE>

12
<PAGE> 22

SUMMARY HISTORICAL FINANCIAL DATA OF MCS

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------- -----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- ------- -------
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues from Continuing
Operations.................... $12,519 $10,962 $14,901 $15,433 $14,636 $13,865 $13,319
Income from Continuing
Operations.................... 441 691 1,026 1,768 1,708 1,552 1,279
Income from Discontinued
Operations.................... 151 227 403 241 149 101 74
Net income...................... 592 918 1,429 2,009 1,857 1,653 1,353
BASIC AND DILUTED EARNINGS PER
SHARE:
From Continuing Operations.... 441 691 1,026 1,768 1,708 1,552 1,279
From Discontinued
Operations.................. 151 227 403 241 149 101 74
------- ------- ------- ------- ------- ------- -------
592 918 1,429 2,009 1,857 1,653 1,353
======= ======= ======= ======= ======= ======= =======
BALANCE SHEET DATA:
Cash and cash equivalents and
short-term investments........ 33 38 60 40 34 251 160
Working capital................. (1,294) (1,499) (1,745) (2,110) (1,754) (1,092) (607)
Total assets.................... 5,316 5,146 5,279 4,895 4,489 4,650 4,865
Total long-term liabilities..... -- -- -- -- -- -- --
Stockholders' equity............ (470) (723) (981) (1,640) (1,312) (843) (397)
</TABLE>

13
<PAGE> 23

COMPARATIVE PER SHARE DATA

The following table sets forth selected per share data of Simione and MCS
on a historical, pro forma combined and total pro forma combined basis. Each of
Simione and MCS prepares its financial statements on the basis of a fiscal year
ending on December 31. This table combines Simione's and MCS' audited results of
operations for their fiscal years ended December 31, 1998, adjusted for the
effects of the merger. The information presented in this table is derived from
the financial information of Simione and MCS. The information set forth below is
only a summary and you should read it in conjunction with the complete financial
statements of Simione and MCS which can be found beginning on page F-1.

This table is not necessarily indicative of the results of future
operations of Simione or actual results that would have occurred if the merger
had taken place at the beginning of 1998.

<TABLE>
<CAPTION>
EQUIVALENT
SIMIONE PRO FORMA
PRO COMBINED
HISTORICAL HISTORICAL FORMA PER MCS
SIMIONE MCS COMBINED SHARE
---------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Book Value per common share:
September 30, 1999............................... 0.33 (470) 0.78 0.66
December 31, 1998................................ 0.90 (981) 0.76 0.65

Net Income/(loss) from continuing operations per
common share:
Nine months ended September 30, 1999............. (0.60) 441 (0.50) (0.43)
Year ended December 31, 1998..................... (1.42) 1,026 (1.03) (0.88)
</TABLE>

To calculate the table above, we used the following methods:

1. We excluded the liquidation value of the preferred stock from
determining book value per common share.

2. We calculated historical book value per common share by dividing total
stockholders' equity as of September 30, 1999 and December 31, 1998 by the
actual number of common shares outstanding as of each date. We excluded the
liquidation value of the preferred stock from determining book value per common
share. We calculated net income/(loss) per common share by dividing net
income/(loss) for each period by the weighted average number of common shares
outstanding for the periods ended September 30, 1999 and December 31, 1998.

3. We calculated Simione Pro Forma Combined book value per common share by
dividing total pro forma stockholders' equity, pro forma for both Simione and
MCS, as of September 30, 1999 and December 31, 1998 by the pro forma actual
number of common shares outstanding as of each date. We calculated net
income/(loss) per common share by dividing pro forma net income/(loss), pro
forma for both Simione and MCS, for each period by the pro forma weighted
average number of common shares outstanding for the periods ended September 30,
1999 and December 31, 1998. For pro forma purposes, we have assumed the Series A
Preferred Stock will be converted into Simione common stock. If the Series A
Preferred Stock does not convert then Total Pro Forma Combined Book Value per
share as of September 30, 1999 would be $0.78 and Total Pro Forma Combined Net
Loss per share for the nine months ended September 30, 1999 would be ($0.59).
For
14
<PAGE> 24

more detailed information on how we calculated these figures, refer to the
"Unaudited Pro Forma Financial Data" beginning on page 92.

4. We calculated the Equivalent Pro Forma Combined per MCS Share by
multiplying the Simione Pro Forma Combined per share amounts by an exchange
ratio of 0.8520 shares of Simione common stock in exchange for each share of MCS
common stock.

5. We excluded the effect of outstanding options from the above
calculations as the effect is anti-dilutive.
15
<PAGE> 25

MARKET PRICE INFORMATION

SIMIONE

The table below sets forth the high and low sales prices of Simione common
stock as reported on The Nasdaq Stock Market's National Market System for the
calendar periods indicated.

The common stock of Simione has traded on The Nasdaq Stock Market's
National Market System under the symbol SCHI since June 30, 1997 and prior to
June 30, 1997 was traded on the OTC Bulletin Board under the same symbol. As of
February 1, 2000, Simione common stock was held by approximately 2,256 holders
of record. For this purpose, stockholders whose shares are held by brokers on
behalf of stockholders are not separately counted.

The table below shows the reported quarterly high and low bid prices for
Simione common stock on the OTC Bulletin Board for the period January 1, 1997 to
June 29, 1997, and the reported quarterly high and low sales price for the
Simione common stock on the Nasdaq Stock Market for the periods after June 30,
1997. The information set forth below does not include retail mark-ups,
mark-downs or commissions. In addition, over-the-counter prices reflect
inter-dealer prices, and may not necessarily represent actual transactions. The
sales prices after the second quarter of 1997 reflect the value of Simione
common stock following a 1-for-2 reverse stock split which occurred on June 30,
1997. The sales prices do not reflect the effect of the proposed reverse stock
split to be voted on at the special meeting.

<TABLE>
<CAPTION>
1999 1998 1997
------------------- ---------------- ----------------
HIGH LOW HIGH LOW HIGH LOW
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter................. $ 3 1/2 $ 1 5/16 $11 3/8 $ 6 5/8 $ 7 3/4 $ 4 1/4
Second Quarter................ 4 1/4 1 3/8 15 1/2 6 5/8 6 3/4 5
Third Quarter................. 3 1 1/4 8 1 1/4 14 3/4 9 1/2
Fourth Quarter................ 1 7/8 1 3 1 1/4 14 1/8 7
</TABLE>

Simione has never declared or paid cash dividends on Simione common stock.
Simione currently intends to retain future earnings, if any, for future growth
and does not anticipate paying any cash dividends in the foreseeable future.

On May 25, 1999, the last trading day prior to the public announcement of
the merger agreement, the reported high sales price per share of Simione common
stock on The Nasdaq National Market was $4 1/4 and the reported low sales price
was $2 3/4. On September 9, 1999, the last trading day prior to the public
announcement of the amendment to the merger agreement, the reported high sales
price of Simione common stock on Nasdaq was $1 3/4 and the reported low sales
price was $1 13/16. On February 7, 2000, the last practicable trading date for
which results were available for inclusion in this joint proxy
statement/prospectus, the reported high sales price per share of Simione common
stock on Nasdaq was $2 and the reported low sales price was $1 13/16.

The market price of Simione common stock is subject to fluctuation.
Therefore, the market value of the shares of Simione common stock which MCS
stockholders will receive in the merger may increase or decrease prior to or
after the merger.

16
<PAGE> 26

MCS

Prior to the spin-off, MCS was a wholly-owned subsidiary of Mestek. There
is no established public trading market for MCS' stock.

Mestek's common stock is listed on the New York Stock Exchange, under the
symbol MCC. As of February 1, 2000 the number of stockholders of record based on
inquiries of Mestek's transfer agent was 1,292. For this purpose, stockholders
whose shares are held by brokers on behalf of stockholders are not separately
counted. The table below sets forth the high and low sales prices of Mestek
common stock as reported on NYSE for the calendar periods indicated.

The quarterly price ranges of Mestek's common stock during 1999, 1998 and
1997 as reported in the consolidated transaction reporting system were as
follows:

PRICE RANGE

<TABLE>
<CAPTION>
1999 1998 1997
-------------------- ---------------- ----------------
HIGH LOW HIGH LOW HIGH LOW
--------- --------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter................ $20 15/16 $18 3/4 $22 3/8 $18 1/4 $18 1/8 $16 1/8
Second Quarter............... 22 3/8 18 3/8 22 3/4 18 9/16 20 7/8 16 1/4
Third Quarter................ 23 19 3/4 22 18 21 3/8 17 3/4
Fourth Quarter............... 20 1/4 18 1/4 20 3/4 17 1/2 19 3/8 17 3/8
</TABLE>

Other than the MCS spin-off, Mestek has not paid any dividends on its
common stock since 1979. Mestek does not anticipate paying any cash dividends in
the foreseeable future.

MCS paid dividends of $161 per share in 1999, $770 per share in 1998,
$2,337 per share in 1997, and $2,326 per share in 1996 to its sole stockholder,
Mestek. In the event the merger is not completed, MCS does not anticipate paying
any dividends in the future.

No securities issued by Mestek, other than common stock, are listed on a
stock exchange or are publicly traded.

On May 25, 1999, the last trading day prior to the public announcement of
the merger agreement, the reported high sales price per share of Mestek common
stock on the NYSE was $20 and the reported low sales price was $19 5/8. On
September 9, 1999, the last trading day prior to the public announcement of the
amendment to the merger agreement, the reported high sales price of Mestek
common stock on the NYSE was $20 3/4 and the reported low sales price was
$20 3/4. On February 7, 2000, the last practicable trading date for which
results were available for inclusion in this joint proxy statement/prospectus,
the reported high sales price per share of Mestek common stock on the NYSE was
$17 1/8 and the reported low sales price was $17 1/8.

17
<PAGE> 27

RISK FACTORS

You should carefully consider the following risk factors in evaluating
whether to approve the merger agreement.

RISKS RELATING TO THE MERGER

APPROVAL OF THE MERGER AND THE CONVERSION OF THE SERIES A PREFERRED STOCK
WILL CAUSE A CHANGE IN THE VOTING CONTROL OF SIMIONE AND DECREASE SIMIONE
STOCKHOLDERS' ABILITY TO ELECT DIRECTORS AND DIRECT THE MANAGEMENT OF SIMIONE.

If the merger is completed and the Series A Preferred Stock held by former
CareCentric stockholders is converted, current Simione stockholders will no
longer have voting control of Simione. Current Simione stockholders will no
longer be able to control the election of directors, the direction of Simione or
most matters submitted to a vote of the stockholders of Simione. See "The Merger
and Investment Agreement -- Change in Ownership of Simione" beginning on page 74
and "Accounting Treatment of the Merger" beginning on page 84.

John E. Reed, through his ownership of Simione common stock and his control
of Mestek, will have effective control over approximately 52% of Simione's total
voting power after the merger assuming conversion of the Series A Preferred
Stock held by former CareCentric stockholders and the conversion of the Mestek
note to Series C Preferred Stock of Simione. Mr. Reed will be able to control
most matters submitted to a vote of the stockholders of Simione after the
merger, including the election of directors. See "Recommendation of the MCS
Board and Reasons for the Merger -- Interests of Officers and Directors of MCS
and Mestek" beginning on page 61 for a description of Mr. Reed's control.

Mr. Reed's interests may differ from the interests of other Simione
stockholders. For example, because of the tax treatment of the spin-off and the
merger, Mr. Reed may be motivated, in some circumstances, to avoid any sale or
other change of control of Simione for the two year period after the completion
of the merger. Mr. Reed's voting control will enable him to prevent any sale or
other change in control of Simione. See "Federal Income Tax Considerations"
beginning on page 86 for a discussion of the tax treatment of the spin-off.

IF SIMIONE IS UNABLE TO OBTAIN ADDITIONAL FINANCING, IT MAY NOT BE ABLE TO
CONTINUE ITS OPERATIONS AND FULFILL ITS BUSINESS PLAN.

Simione has experienced negative cash flow from operations for the past
several quarters. Simione will require additional funds to continue its
operations and fulfill its business plan past March 2000. If the merger is
completed, Simione will receive an additional cash infusion from Mestek of
approximately $2 million and approximately $1.6 million in additional funds will
become available under Simione's bank line of credit. However, Simione may
require additional funds beyond these sources if Simione is unable to execute
its plan to begin profitable operations. In addition, if the merger is not
completed, Simione must obtain alternate sources of financing. There can be no
assurance that Simione will be able to obtain the additional financing it may
need.

18
<PAGE> 28

IF SIMIONE CANNOT INTEGRATE MCS AND OTHER ACQUISITIONS WITH ITS BUSINESS,
ITS PROFITABILITY MAY DECREASE AND THERE IS NO ASSURANCE ITS ACQUISITIONS WILL
BE SUCCESSFUL OR PROVIDE LONG-TERM BENEFITS OR NOT BE COSTLY.

Simione has, in part, expanded its systems and services through
acquisitions, including the CareCentric acquisition and the merger with MCS. If
Simione is unable to acquire businesses and to integrate these businesses,
including CareCentric and MCS, successfully and realize anticipated economic,
operational and other benefits in a timely manner, its profitability may
decrease. In addition, the failure to integrate acquisitions successfully may
divert management's attention from Simione's existing business and may damage
Simione's relationships with its key customers and suppliers. There can also be
no assurance that any acquisition will result in long-term benefits to Simione
or that management will be able to effectively manage the resulting business.

There is significant competition for acquisition opportunities in the
health care information systems industry, which may intensify and increase the
cost of capitalizing on such opportunities. Simione may compete for acquisition
opportunities with other companies that have significantly greater financial and
management resources, larger installed customer bases, better name recognition
and greater sales and marketing capabilities.

Acquisitions, including the merger with MCS and the CareCentric
acquisition, also involve numerous risks, including:

- the difficulties in the assimilation of operations, systems and services;

- the ability to manage geographically remote units;

- the diversion of management's attention from other business concerns;

- the risks of entering markets in which Simione has limited or no direct
expertise;

- the potential loss of key employees from the acquired companies; and

- the difficulties in merging corporate cultures.

Integration of some businesses, including MCS, may also require the
combination of complex software technology, product lines and software
development plans that may be technically incompatible or too costly or
difficult to integrate. If Simione is unable to integrate MCS successfully, it
may incur substantial costs and delays in increasing its customer base.

INVESTORS MAY HAVE DIFFICULTY TRADING SIMIONE COMMON STOCK AND SIMIONE MAY
HAVE DIFFICULTY RAISING CAPITAL IF SIMIONE IS UNABLE TO MAINTAIN A LISTING OF
THE SIMIONE COMMON STOCK ON NASDAQ.

The merger probably will cause Simione's common stock to be delisted from
the Nasdaq National Market. Even if the merger is not completed, there can be no
assurance that Simione can maintain its listing on the Nasdaq National Market,
especially if it continues to experience operating losses. If the reverse stock
split is not approved by stockholders, Simione will not qualify for listing on
the Nasdaq SmallCap Market. Although Simione believes that it can qualify for
inclusion on the Nasdaq SmallCap Market if the reverse stock split is approved,
there can be no assurance that Simione's application for this market will be
accepted. Even if Simione is successful in satisfying the initial listing
criteria, it must continue to meet the Nasdaq SmallCap Market's

19
<PAGE> 29

maintenance criteria. There is no assurance that Simione will be able to meet
such criteria or that the Nasdaq SmallCap Market will continue to list the
Simione common stock. If our common stock is delisted, investors' interest level
in our common stock may be reduced, which would materially and adversely affect
trading in, and the price of, our common stock. This may cause a decline in the
market price of the common stock. If the Simione common stock were delisted from
the Nasdaq SmallCap Market, Simione may attempt to list the Simione common stock
on another stock exchange or on the OTC Bulletin Board. In such case, an
investor in Simione may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of Simione common stock. This lack of
liquidity may also cause Simione to have difficulty raising capital for its
operations or making acquisitions in the future. In addition, listing on the
Nasdaq National or SmallCap Market of the shares of Simione common stock to be
issued in the MCS merger is a condition to the closing of the merger. Simione
cannot assure that it will be able to comply with, or that MCS will agree to
waive, this condition. See "Proposal 5 for Simione Stockholders -- Reverse Stock
Split Proposal -- Reasons for the Reverse Split" at page 181 and "Listing of New
Shares of Simione Common Stock on the Nasdaq Stock Market" at page 85 for a
discussion of this issue.

THE VALUE OF SIMIONE SHARES TO BE RECEIVED BY MCS STOCKHOLDERS WILL DEPEND
ON THE MARKET PRICE OF SIMIONE COMMON STOCK AT CLOSING AND MAY DECREASE PRIOR TO
THE MERGER.

Because Simione's common stock price fluctuates, its common stock may have
a value less than the per share value on December 30, 1999 and MCS stockholders
will not be able to determine the value of Simione common stock to be issued
until the closing of the merger.

THE MARKET PRICE OF SIMIONE'S COMMON STOCK MAY BE VOLATILE PRIMARILY
BECAUSE ITS BUSINESS IS SUBJECT TO SHARP FLUCTUATIONS IN QUARTERLY RESULTS.

The market price of Simione common stock has been, and the market price of
Simione common stock before and after the merger may continue to be, highly
volatile. Factors that are difficult to predict such as quarterly revenue,
statements and ratings by financial analysts and overall market performance may
have a significant impact on the price for shares of Simione common stock.
Simione's operating results can vary substantially from period to period and the
results of individual quarters are extremely uncertain.

THE SPIN-OFF COULD RESULT IN POTENTIAL ADVERSE FEDERAL INCOME TAX
CONSEQUENCES TO THE MCS STOCKHOLDERS AND MESTEK.

MCS has received an opinion of counsel that the spin-off of MCS shares to
Mestek stockholders should qualify as a tax-free distribution and that the
MCS/Simione merger should qualify as a tax-free reorganization. Simione and MCS
have structured the spin-off and the merger so that MCS stockholders and Mestek
should not recognize any gain or loss for federal income tax purposes. However
there is no assurance that the IRS will determine that the spin-off of MCS
shares to Mestek stockholders is tax-free or that the merger is tax-free. Any
tax liability to either Mestek or the MCS stockholders could be material. See
"Federal Income Tax Considerations" beginning on page 86.

THE LOCKUP OF SHARES OF SIMIONE COMMON STOCK TO BE RECEIVED BY MCS
STOCKHOLDERS MAY PREVENT FORMER MCS STOCKHOLDERS FROM TAKING ADVANTAGE OF
POTENTIAL PRICE INCREASES IN SIMIONE STOCK AND MAY PREVENT TAKEOVERS OF SIMIONE,
EVEN IF IT IS BENEFICIAL TO THE SIMIONE STOCKHOLDERS.

20
<PAGE> 30

The shares of Simione common stock to be received by MCS stockholders will
be subject to a two-year lockup restriction. This restriction may prevent former
MCS stockholders from selling their Simione common stock when they desire or
taking advantage of increases in price. In addition, the lockup may make it
difficult for a third party to acquire control of Simione even if an acquisition
would benefit the former MCS stockholders or other stockholders of Simione. The
terms of the lockup, including when former MCS stockholders can sell, are
described at "The Merger and Investment Agreement -- Restrictions on Sales of
Merger Shares" beginning at page 70, and see "Federal Income Tax
Considerations -- Federal Income Tax Consequences to Mestek, MCS and Their
Stockholders" beginning on page 87 for a discussion of tax consequences that may
prevent Mestek from consenting to sales under the MCS lockups.

RISKS RELATING TO THE BUSINESS OF THE COMBINED COMPANY

INCREASED REGULATION OF THE HEALTH CARE INDUSTRY MAY CAUSE CUTBACKS BY
HEALTH CARE ORGANIZATIONS WHICH COULD DECREASE SIMIONE'S EARNINGS.

The health care industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operations
of home health care organizations. Simione's systems and services are designed
to function within the structure of the health care financing and reimbursement
system currently being used in the United States. If changes are made to this
system, home health care organizations may react to regulatory changes by
curtailing or deferring investments in Simione's and MCS' systems and services
which could have a material effect on their combined earnings. See "The Business
of Simione -- Industry Overview" on page 121 and "-- Government Regulation and
Health Care Reform" on page 131, and "The Business of MCS -- Overview" on page
104 and "-- Regulation" on page 105 for descriptions of the impact of
regulations on Simione and MCS.

SIMIONE INCURRED LOSSES DURING THE YEARS ENDED 1994 THROUGH 1998 AND DURING
THE FIRST NINE MONTHS OF 1999 AND MAY CONTINUE TO INCUR LOSSES.

Simione incurred losses from operations in each of the five prior years and
the current year. There is no assurance that the combined company will be able
to achieve or maintain profitability.

FUTURE CONSOLIDATION IN THE HOME HEALTH CARE INDUSTRY MAY ADVERSELY AFFECT
SIMIONE'S CUSTOMER BASE AND THE DEMAND FOR ITS SERVICES WHICH COULD DECREASE ITS
EARNINGS.

Simione's and MCS' combined earnings may be decreased if:

- Simione's and MCS' installed and potential customer bases are materially
reduced as a result of consolidation in the home health care industry;

- managed care organizations continue to grow;

- other cost containment measures are adopted in the home health care
industry; or

- customers defer purchasing decisions on information systems or
professional services because of concerns about the impact of
consolidation and potential cost containment measures.

Moreover, the home health care enterprises formed as a result of
consolidation could have greater bargaining power, which may lead to price
erosion of Simione's and MCS'

21
<PAGE> 31

systems and services. The failure of Simione and MCS to maintain adequate price
levels would have a material adverse effect on the combined business, financial
condition and results of operations.

For additional discussion of consolidation of the industry due in part to
changes in government regulation, see "The Business of Simione -- Industry
Overview" beginning on page 121 for descriptions of industry consolidations and
"-- Government Regulation and Health Care Reform" on page 131, and "The Business
of MCS -- Customers" beginning on page 107 and "-- Regulation" beginning on page
105.

SIMIONE MAY HAVE POTENTIAL LIABILITY IN CONNECTION WITH THE CURRENT
DEPARTMENT OF LABOR INVESTIGATION AND IRS AUDIT OF SIMIONE'S ESOP.

Simione's ESOP is currently under investigation by the Department of Labor.
The IRS is also auditing issues relating to the ESOP. Neither the Department of
Labor nor the IRS has instituted proceedings against Simione or the ESOP.
Simione cannot predict whether any claims will be asserted against it in the
future. Any claims or litigation, with or without merit, could be costly and
could result in a diversion of management's attention. Moreover, any adverse
determination could have a material adverse effect on Simione's business,
financial condition and results of operations.

In addition, Simione may have liability for a guaranty between its
wholly-owned subsidiary, Simione Central, Inc., and Columbia HCA, including
liability for the Department of Labor investigation of Simione's ESOP and the
IRS audit of the ESOP. For a discussion of the terms of the guaranty see
"Certain Relationships and Related Transactions" beginning on page 157.

As of September 30, 1999, no claims had been made under the guaranty, and
currently Simione does not anticipate incurring any losses associated with the
guaranty. Any obligations arising under the guaranty that must be satisfied by
Simione Central may have a material adverse effect on Simione's business,
financial condition and results of operations.

LONG SALES AND IMPLEMENTATION CYCLES MAY HURT OUR PROFITABILITY.

The sales cycle for home health care information systems is lengthy and
implementation of the combined company's information technology solutions is
expected to require two to six months. If implementation is delayed, then
payments and revenue recognition will also be delayed and this delay could have
a material adverse effect on Simione's and MCS' business, financial condition
and results of operations. See "Simione Management's Discussion and Analysis of
Financial Condition and Results of Operations" on page 138 and "-- Backlog" on
page 146 for a description of the impact of the sales cycle on Simione and MCS.
See "The Business of Simione -- Strategy" on page 123.

SUCCESS IN OUR INDUSTRY REQUIRES A STEADY SUPPLY OF NEW AND ENHANCED
PRODUCTS THAT THE COMBINED COMPANY MAY NOT BE ABLE TO DEVELOP OR COMMERCIALIZE.

The combined company's success will depend upon its ability to continue to
enhance current products and to develop or acquire new products which meet
customer needs and comply with industry standards. The possibility exists that
the combined company's products will be rendered obsolete by technological
advances, or that the combined company will not be able to develop and market
the products required to continue to be competitive. There is no assurance that
products in any of these areas will be commercially successful.

22
<PAGE> 32

SIMIONE AND MCS MAY EXPERIENCE PRODUCT DELAYS AND ERRORS IN THEIR PRODUCTS
WHICH COULD DELAY REVENUES.

Simione and MCS have experienced product delays and undetected errors or
bugs in their products in the past. Although these delays and bugs have not
materially affected either company's results in the past, these types of
problems may materially affect the combined company in the future.

THE COMBINED COMPANY FACES COMPETITORS WITH GREATER FINANCIAL AND TECHNICAL
RESOURCES OR GREATER ABILITY TO RESPOND TO MARKET CHANGES.

The combined company will face intense competition in the market for home
health care information systems and related software from many companies which
offer alternative solutions to the needs addressed by our products and services.
Many of the combined company's direct competitors, such as McKesson HBOC and
SMS/Delta, as well as other large computer software companies that could compete
directly against the combined company in the future, have far greater resources
than Simione and MCS combined. In addition, there are smaller competitors that
may be able to respond more rapidly to changes in the market. Our competitors
also may be able to adapt more quickly to new or emerging technologies and
standards or changes in customer requirements or devote greater resources to the
promotion and sale of their products. There can be no assurance that the
combined company will be able to compete successfully in its markets against its
competitors.

SIMIONE AND MCS DEPEND ON ATTRACTING AND RETAINING SKILLED EMPLOYEES WHICH
MAY BE MORE DIFFICULT DUE TO RECENT EVENTS.

Our businesses are led by a number of key, highly skilled technical,
managerial and marketing personnel, the loss of which could adversely affect the
combined company. Competition for qualified personnel in the software industry
is intense. The success of the combined company will depend in large part upon
its ability to hire and retain such personnel.

Many of Simione's employees are compensated in part with options to
purchase Simione's common stock. The market price for Simione's common stock
declined significantly during 1998 and 1999. Significant decreases in the market
price of Simione's common stock may make it more difficult to retain and attract
qualified employees.

In addition, Simione has recently had layoffs. This may adversely affect
Simione's ability to attract and retain qualified employees.

FUTURE SALES OF PRIVATELY-HELD SIMIONE COMMON STOCK AFTER THE MERGER MAY
NEGATIVELY AFFECT THE PRICE OF SIMIONE COMMON STOCK.

Following the merger, Simione will have a large number of privately held
shares of Simione common stock outstanding and available for resale to the
public. In addition, Simione will have options outstanding for a large number of
shares of Simione common stock. The market price of Simione common stock could
decline as a result of sales of a large number of shares of Simione common stock
in the public market following the merger, or the perception that such sales
could occur. These also might make it more difficult for us to sell equity
securities in the future at a time and at a price that we deem appropriate.

23
<PAGE> 33

The majority of the shares of Simione common stock currently outstanding
are freely tradable. The remaining outstanding shares will become eligible for
sale without registration pursuant to Rule 144 or Rule 145 under the Securities
Act, subject to conditions of Rule 144. Some holders of Simione common stock, as
well as the holders of Simione preferred stock, currently have demand and
piggyback registration rights enabling them to register their shares under the
Securities Act for sale to the public. See "The Merger and Investment
Agreement -- Registration Rights" beginning on page 79 for a description of the
registration rights that some of the holders of Simione common stock and
preferred stock have.

OUR INTELLECTUAL PROPERTY RIGHTS ARE DIFFICULT AND POTENTIALLY COSTLY TO
PROTECT.

Simione and MCS each regard its respective technologies as proprietary and
rely on a combination of copyright, trademark and trade secret laws, contractual
provisions and confidentiality policies to establish and protect its proprietary
rights. These steps may not be sufficient to prevent or deter others from
copying or stealing proprietary rights and do not prevent competitors from
independently developing technology that is equivalent or superior to Simione's
and/or MCS' technology. The software market has traditionally experienced
widespread unauthorized reproduction of products in violation of intellectual
property rights. This activity is difficult to detect and legal proceedings to
enforce intellectual property rights are often burdensome and involve a high
degree of uncertainty and costs.

OUR PRODUCTS COULD INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS,
WHICH COULD BE EXPENSIVE TO DEFEND.

While neither Simione nor MCS believes that its respective products,
trademarks or other proprietary rights infringe upon the proprietary rights of
others, it is possible that others will assert that they do. The cost of
responding to such an assertion may be significant, even if the assertion is
false.

One of Simione's noncore software products is currently the subject of an
infringement inquiry. Although Simione believes that this inquiry is not
material, there is a risk that costs associated with this inquiry could become
significant. This inquiry is described at "The Business of
Simione -- Proprietary Rights and Product Protection" beginning on page 131.

OUR SOFTWARE PRODUCTS, THE THIRD PARTY SOFTWARE THAT WE USE INTERNALLY, AND
THE SOFTWARE AND SYSTEMS THAT OUR CUSTOMERS AND SUPPLIERS USE MAY FAIL TO
PROPERLY PROCESS DATES IN AND BEYOND 1999.

Many currently installed computer systems and software products are coded
to accept or recognize only two digit entries in the date code field. These
systems and software products now need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies and governmental agencies may
need to be upgraded to comply with Year 2000 requirements or risk system failure
or miscalculations causing disruptions of normal business activities. Despite
the diagnosis and preventive efforts of Simione and MCS, these kinds of software
failures in their products or the software on which they depend could have a
significant negative financial impact on the combined company. In addition,
although Simione has conducted due diligence inquiries regarding MCS' Year 2000
compliance, there is a risk that Year 2000 issues with MCS' software products
could be more severe than anticipated by management. See "Simione Management's
Discussion and Analysis of Financial

24
<PAGE> 34

Condition and Results of Operations -- Year 2000 Issues" beginning on page 152
and "MCS Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Year 2000 Disclosure" beginning on page 117 for a more detailed
discussion.

PROVISIONS IN SIMIONE'S CHARTER MAY INHIBIT A TAKEOVER OF SIMIONE EVEN IF
IT IS BENEFICIAL TO STOCKHOLDERS.

Simione's certificate of incorporation currently authorizes Simione's board
of directors to issue up to 10 million shares of its preferred stock. Simione
may issue shares of preferred stock without stockholder approval and upon terms
and conditions, and having such rights, privileges and preferences, as the
Simione board may determine. This could adversely affect the common
stockholders. In particular, the issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or discouraging a third party from acquiring, voting
control of Simione even if an acquisition would benefit stockholders. Other than
shares issued in connection with the CareCentric acquisition and the MCS merger,
Simione has no current plans to issue any shares of preferred stock.

THE CHANGE OF CONTROL OF SIMIONE MAY INHIBIT A TAKE OVER OF SIMIONE EVEN IF
IT IS BENEFICIAL TO STOCKHOLDERS.

John E. Reed's control of approximately 52% of the total voting power of
Simione may enable him to prevent any acquisition of Simione that he decides is
not desirable. Because of possible adverse tax consequences to Mestek, Mr. Reed
may be motivated to prevent an acquisition of Simione for at least two years
after the merger. See "Federal Income Tax Considerations -- Federal Income Tax
Consequences to Mestek, MCS and Their Stockholders" beginning on page 87 for a
discussion of these tax consequences and "Recommendation of the MCS Board and
Reasons for the Merger -- Interests of Officers and Directors of MCS and Mestek"
beginning on page 61 for a description of Mr. Reed's control.

FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE.

EACH COMPANY HAS MADE FORWARD-LOOKING STATEMENTS IN THIS DOCUMENT THAT ARE
SUBJECT TO RISKS AND UNCERTAINTIES. FORWARD-LOOKING STATEMENTS INCLUDE
INFORMATION CONCERNING POSSIBLE OR ANTICIPATED FUTURE RESULTS, SUCH AS COST
SAVINGS AND SYNERGIES RELATING TO THE MERGER. ALSO, WHEN WE USE WORDS SUCH AS
"BELIEVES," "EXPECTS," "ANTICIPATES" OR SIMILAR EXPRESSIONS, WE ARE MAKING
FORWARD-LOOKING STATEMENTS. YOU SHOULD NOTE THAT MANY FACTORS COULD AFFECT THE
FUTURE FINANCIAL RESULTS OF SIMIONE, MCS OR THE COMBINED COMPANY AND COULD CAUSE
THESE RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN OUR FORWARD-LOOKING
STATEMENTS. THESE FACTORS INCLUDE THE VARIOUS RISKS DESCRIBED ABOVE.

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<PAGE> 35

THE SIMIONE SPECIAL MEETING

PURPOSE OF THE MEETING

At the Simione special meeting, the holders of Simione common stock
outstanding as of the record date will be asked to consider and vote upon:

- the proposal to adopt the merger agreement and merge MCS into Simione;

- election of six directors:

-- Barrett C. O'Donnell,

-- James A. Gilbert,

-- Dr. David O. Ellis,

-- William J. Simione, Jr.,

-- Jesse I. Treu, and

-- Daniel J. Mitchell;

- approval of the conversion of the Series A Preferred Stock into shares of
Simione common stock;

- an increase in the number of shares available for issuance under
Simione's Equity-based Incentive Plan from 1,250,000 shares to 2,250,000
shares;

- the proposal to authorize the board of directors to amend Simione's
certificate of incorporation to effect a reverse stock split of Simione's
common stock;

- the proposal to amend Simione's certificate of incorporation to increase
the number of authorized shares of common stock from 20 million shares to
40 million shares if the reverse stock split is not approved and
completed; and

- approval of a proposal to adjourn the meeting if more time is needed to
solicit proxies.

RECOMMENDATION OF THE SIMIONE BOARD OF DIRECTORS. The Simione board has
approved the merger agreement and unanimously recommends that the holders of
Simione common stock vote "FOR" adoption of the merger agreement and the other
proposals. See "Recommendation of the Simione Board and Reasons for the Merger"
on page 54 for a discussion of reasons the Simione board recommends the merger,
and "-- Interests of Officers and Directors of Simione" on page 58 for potential
conflicts of interest.

VOTING RIGHTS

As required by Delaware law and the rules of The Nasdaq Stock Market, the
affirmative vote of the holders of at least a majority of the shares of Simione
common stock outstanding as of the record date is required to adopt the merger
agreement. Abstentions and broker non-votes will have the effect of votes
against the merger proposal.

An affirmative vote of a plurality of the votes of the shares present in
person or represented by proxy at the meeting and actually voting is required to
elect directors. Abstentions and broker non-votes will have no effect on the
outcome of the voting to elect the directors.

26
<PAGE> 36

An affirmative vote of a majority of the shares of common stock present in
person or represented by proxy at the meeting and entitled to vote is required
for the proposal to approve the conversion of the Series A Preferred Stock and
the proposal to approve the increase in the number of shares reserved for
issuance under Simione's Equity-based Incentive Plan. Abstentions will have the
effect of votes against each of these proposals. Broker non-votes will have no
effect on the outcome of the voting.

An affirmative vote of a majority of the shares of common stock outstanding
as of the record date is required for approval of the amendments to Simione's
certificate of incorporation in connection with the reverse stock split proposal
and the proposal to increase the number of authorized shares of common stock.
Abstentions and broker non-votes will have the effect of votes against these two
proposals.

BROKER NON-VOTES. A broker non-vote may occur when a nominee holding
shares of common stock for a beneficial owner does not vote on a proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner.

QUORUM. The presence, either in person or by proxy, of the holders of a
majority of the shares of Simione common stock outstanding as of the record date
is required to constitute a quorum at the Simione special meeting.

SHARES OUTSTANDING. At the record date, there were 8,744,790 shares of
Simione common stock outstanding. Holders of record of Simione common stock
outstanding as of the record date are entitled to one vote per share at the
special meeting.

SERIES A PREFERRED STOCK. The 3,034,521 shares of Series A Preferred Stock
issued in the CareCentric merger are not entitled to vote at this meeting.

VOTES OF EXECUTIVE OFFICERS AND DIRECTORS. Management believes that all of
the executive officers and directors of Simione, who collectively hold
approximately 25% of the outstanding shares of Simione common stock, intend to
vote their shares in favor of the proposal to adopt the merger agreement and the
other proposals.

PROXIES. The Simione board is soliciting proxies so that each holder of
Simione common stock on the Simione record date has the opportunity to vote on
the merger proposal and other proposals to be considered at the Simione special
meeting. When a proxy card is returned properly signed and dated, the shares the
proxy card represents will be voted in accordance with the instructions on the
proxy card. If a stockholder does not return a signed proxy card, that
stockholder's shares will not be voted and thus will have the effect of a vote
against adoption of the merger agreement and the proposals to amend Simione's
certificate of incorporation. Shares which are represented at the meeting but as
to which the holder abstains from voting or has no voting authority in respect
of a particular matter will not be deemed to be voted on such matter. One
example of this is in the case of a broker non-vote, where a broker will not
vote the matter without the approval of the beneficial owner. Since adoption of
the merger agreement and the proposed amendments to Simione's certificate of
incorporation require the affirmative vote of a majority of the outstanding
shares of Simione common stock, abstentions and broker non-votes will have the
effect of negative votes.

27
<PAGE> 37

Stockholders are urged to mark the box on the proxy card to indicate how
their shares of Simione common stock are to be voted. IF A STOCKHOLDER RETURNS A
SIGNED PROXY CARD, BUT DOES NOT INDICATE HOW HIS OR HER SHARES ARE TO BE VOTED,
THE SHARES REPRESENTED BY THE PROXY CARD WILL BE VOTED "FOR":

- adoption of the merger agreement;

- the election of the six nominees for director identified above;

- the conversion of the Series A Preferred Stock into shares of Simione
common stock;

- the approval of an increase in the number of shares reserved for issuance
under the Simione Equity-based Incentive Plan;

- the approval of the proposal to authorize the board of directors to amend
Simione's certificate of incorporation to effect a reverse stock split of
Simione's common stock;

- the approval of the proposal to amend Simione's certificate of
incorporation to increase Simione's authorized common stock if the
reverse stock split is not approved and completed; and

- the adjournment of the special meeting, if necessary, to permit further
solicitation of proxies if there are not sufficient votes to approve the
merger.

The proxy card also gives the individuals appointed by the Simione board
and named on the proxy card discretion to vote the shares represented thereby on
any other matter that is properly presented for action at the Simione special
meeting.

REVOKING YOUR PROXY. Any holder of Simione common stock who executes and
returns a proxy card may revoke the proxy at any time before it is voted by:

- Notifying in writing the Corporate Secretary of Simione at 6600 Powers
Ferry Road, Atlanta, Georgia 30339;

- Signing and mailing a subsequent proxy; or

- Appearing in person and voting at the Simione special meeting. Attendance
at the Simione special meeting will not by itself revoke a proxy.
However, by voting in person at the meeting, you will revoke all prior
proxies signed by you.

ADJOURNMENTS. Simione currently expects that on the scheduled date of the
Simione special meeting, votes will be taken and the polls closed on the
proposal to adopt the merger agreement and the other proposals to be considered
at the meeting. It is possible, however, that there could be proposals for one
or more adjournments or postponements of the meeting in order to permit further
solicitation of proxies. The affirmative vote of a majority of the shares voted
is necessary for approval of any adjournment or postponement proposal. A
separate proposal is being presented to stockholders to give the holder of the
proxy the discretion to vote upon an adjournment or postponement of the meeting.

28
<PAGE> 38

INDEPENDENT PUBLIC ACCOUNTANTS

Representatives of Arthur Andersen, LLP, independent public accountants,
are expected to be present at the Simione meeting to respond to appropriate
questions and will have an opportunity to make a statement if they desire to do
so.

THE MCS SPECIAL MEETING

PURPOSE OF THE MEETING

At the MCS special meeting, the holders of MCS common stock outstanding as
of the MCS record date will be asked to consider and vote upon:

- the proposal to adopt the merger agreement; and

- the selection of six director designees to the Simione board to be
appointed by Simione upon consummation of the merger. The six director designees
are:

-- John E. Reed;

-- Stewart B. Reed;

-- David W. Hunter;

-- Winston R. Hindle, Jr.;

-- R. Bruce Dewey; and

-- Edward K. Wissing.

RECOMMENDATION OF THE MCS BOARD OF DIRECTORS. The MCS board has approved
the merger agreement and unanimously recommends that the holders of MCS common
stock vote "FOR" adoption of the merger agreement and "FOR" the selection of the
six MCS designees to be appointed to the Simione board of directors. See
"Recommendation of the MCS Board and Reasons for the Merger" on page 58 for a
discussion of reasons for the merger, and "-- Interests of Officers and
Directors of MCS and Mestek" on page 61 for potential conflicts of interest.

VOTING RIGHTS

As required by Pennsylvania law, the affirmative vote of the holders of at
least a majority of the shares of MCS common stock outstanding as of the MCS
record date is required to adopt the merger agreement. Abstentions and broker
non-votes will have the effect of votes against the merger proposal.

The affirmative vote of a plurality of the votes of the shares present in
person or represented by proxy at the meeting is required to select the director
designees. Abstentions and broker non-votes will have no effect on the outcome
of the voting to select the director designees.

QUORUM. The presence, either in person or by proxy, of the holders of a
majority of the shares of MCS common stock outstanding as of the MCS record date
is required to constitute a quorum at the MCS special meeting.

29
<PAGE> 39

SHARES OUTSTANDING. At the MCS stockholders meeting, there will be
8,743,103 shares of MCS common stock outstanding.

The record date for the spin-off of MCS to the holders of Mestek common
stock is the close of business on January 18, 2000. The MCS common stock will be
distributed to the Mestek stockholders in uncertificated form on the last
business day prior to the MCS stockholders meeting. Accordingly, holders of
Mestek common stock at the close of business on January 18, 2000 shall be the
MCS stockholders entitled to notice of and to vote at the special meeting.

VOTES OF THREE MCS STOCKHOLDERS. Three significant stockholders of MCS,
John E. Reed, Stewart Reed and Herbert Burk, who collectively have the power to
vote approximately 71% of the outstanding shares of MCS common stock, have
agreed to vote these shares in favor of the proposals to adopt the merger
agreement and the selection of the MCS designees to be appointed to the Simione
board. Therefore, MCS stockholder adoption of the merger agreement and the
selection of the MCS designees to be appointed to the Simione board is assured.

PROXIES. The MCS board is soliciting proxies so that each holder of MCS
common stock on the MCS record date has the opportunity to vote on the merger
proposal to be considered at the MCS special meeting. When a proxy card is
returned properly signed and dated, the shares the proxy card represents will be
voted in accordance with the instructions on the proxy card. If a stockholder
does not return a signed proxy card, that stockholder's shares will not be voted
and thus will have the effect of a vote against adoption of the merger
agreement.

IF A STOCKHOLDER RETURNS A SIGNED PROXY CARD, BUT DOES NOT INDICATE HOW HIS
OR HER SHARES ARE TO BE VOTED, THE SHARES REPRESENTED BY THE PROXY CARD WILL BE
VOTED "FOR":

- ADOPTION OF THE MERGER AGREEMENT; AND

- THE SELECTION OF THE MCS DESIGNEES LISTED ABOVE TO BE APPOINTED TO THE
SIMIONE BOARD.

The proxy card also gives the individuals appointed by the MCS board and
named on the proxy card discretion to vote the shares represented thereby on any
other matter that is properly presented for action at the MCS special meeting.

ADJOURNMENTS. It is currently expected that on the scheduled date of the
MCS special meeting, votes will be taken and the polls closed on the proposals
to adopt the merger agreement and to select the MCS designees to be appointed to
the Simione board. It is possible, however, that there could be proposals for
one or more adjournments or postponements of the meeting in order to permit
further solicitation of proxies. The affirmative vote of a majority of the
shares voted is necessary for approval of any adjournment or postponement
proposal. An instruction to vote a proxy for adoption of the merger agreement
will also be deemed to give the holder of the proxy the discretion to vote upon
an adjournment or postponement proposal.

REVOKING YOUR PROXY. Any holder of MCS common stock who executes and
returns a proxy card may revoke the proxy at any time before it is voted by:

- Notifying in writing the Corporate Secretary of MCS at 400 Penn Center,
Pittsburgh, Pennsylvania 15235;

30
<PAGE> 40

- Signing and mailing a subsequent proxy; or

- Appearing in person and voting at the MCS special meeting. Attendance at
the MCS special meeting will by itself revoke a proxy. However, by voting
in person at the meeting, you will revoke all prior proxies signed by
you.

INDEPENDENT PUBLIC ACCOUNTANTS

Representatives of Grant Thornton LLP, independent public accountants, are
expected to be present at the MCS meeting to respond to appropriate questions
and will have an opportunity to make a statement if they desire to do so.

COMPARISON OF MCS AND SIMIONE STOCKHOLDER RIGHTS

In connection with the merger, you will be converting your shares of MCS
common stock into shares of Simione common stock. The Simione common stock you
will receive is subject to a two-year restriction on resales described at "The
Merger and Investment Agreement -- Restrictions on Sales of Merger Shares" on
page 70.

Simione is a Delaware corporation and MCS is a Pennsylvania corporation,
and Simione's certificate of incorporation, as amended, and amended and restated
bylaws differ from MCS' restated articles of incorporation and bylaws in several
significant respects. Because of the differences between the Delaware General
Corporation Law and the Pennsylvania Business Corporation Law and the
differences in the restated certificate of incorporation and bylaws of Simione
and the restated articles of incorporation and bylaws of MCS, the rights of a
holder of Simione common stock differ from the rights of a holder of MCS common
stock.

This document contains a summary of the material differences between the
Delaware General Corporation Law and the Pennsylvania Business Corporation Law
and the restated certificate of incorporation and bylaws of Simione and the
restated articles of incorporation and bylaws of MCS.

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
CORPORATE GOVERNANCE

Currently governed by Delaware law Currently governed by Pennsylvania
and the certificate of incorporation law and the restated articles of
and bylaws of Simione. incorporation and bylaws of MCS.

Upon completion of the merger, the Upon completion of the merger, the
rights of stockholders of the rights of stockholders of the
combined company will be governed by combined company will be governed by
Delaware law and the restated Delaware law and the restated
certificate of incorporation and certificate of incorporation and
bylaws of Simione, after giving bylaws of Simione, after giving
effect to the amendments to Simione's effect to the amendments to Simione's
certificate of incorporation proposed certificate of incorporation proposed
for adoption at the Simione annual for adoption at the Simione annual
meeting. meeting.
</TABLE>

31
<PAGE> 41

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
AUTHORIZED CAPITAL STOCK

20,000,000 shares of common stock. At 1,000 shares of common stock. Prior
the Simione annual meeting, Simione's to the spin-off, the authorized
stockholders will be asked to vote on common shares will be increased to
a proposal to approve a reverse stock 10,000,000.
split, and a proposal to amend
Simione's certificate of
incorporation to provide for
40,000,000 authorized shares of
common stock if the reverse stock
split is not approved and completed.
The reverse stock split will not
affect the number of authorized
shares.

10,000,000 shares of preferred stock.

SIZE OF THE BOARD OF DIRECTORS
The Simione board may increase or The bylaws of MCS provide for the
decrease the number of directors minimum numbers of directors. The MCS
without a stockholder vote. The board may increase or decrease the
Simione board currently consists of number of directors within these
seven directors. After the merger is limits without a stockholder vote.
completed, the Simione board will be The MCS board currently consists of
comprised of 12 members. The Simione six directors.
board may increase to 13 members in
the event of a deadlock. This
procedure is described at "Voting
Agreements" beginning at page 82.
ELECTION AND CLASSIFICATION OF BOARD OF DIRECTORS
All directors are elected annually. All directors are elected annually.

VOTING RIGHTS
Each common stockholder is entitled Each stockholder is entitled to one
to one vote for every share held. vote for every share held.
Stockholders do not have cumulative Stockholders do not have cumulative
voting rights. voting rights.

After the merger is completed, the
Series B Preferred Stock will have
two votes per share. The Series C
Preferred Stock will have one vote
per share. The Series A Preferred
Stock does not have voting rights.

REMOVAL OF DIRECTORS; FILLING VACANCIES
Directors may be removed by a vote of Directors may be removed by a
the holders of a majority of shares majority vote of the stockholders
entitled to vote at an election of entitled to vote at any regular or
directors. Any vacancy on the Simione special meeting. The successor to any
board may be filled by a majority director so removed shall be elected
vote of the directors then in office, by the remaining directors.
though less than a quorum,
</TABLE>

32
<PAGE> 42

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
or by a plurality of the votes cast
at a meeting of stockholders.

Under the merger agreement, if any of
the Simione board designees selected
by the MCS stockholders is removed or
resigns from the board during the 18
month period after the closing date
of the merger agreement, the
remaining MCS designees shall fill
the vacancy. In addition, a majority
of the MCS designees can remove any
MCS designee from the list of MCS
designees but may not remove them
from their office as a director
before the end of their term.

INTERESTED DIRECTOR TRANSACTIONS

Under Delaware law, contracts or Under Pennsylvania Law, a transaction
transactions in which one or more of between MCS and an interested
Simione's directors has an interest director will not be void or voidable
are not void or voidable because of solely because of this interest if
this interest; provided that either: either:
- - the stockholders or the - the director's interest has been
disinterested directors must disclosed to or the MCS board knows
approve the contract or transaction about the director's interest and
after full disclosure of material authorizes the transaction by the
facts, or affirmative vote of a majority of
the disinterested directors, even
- - the contract or transaction must though the disinterested directors
have been fair as to the are less than a quorum, or
corporation at the time it was
approved. - the director's interest has been
disclosed to the stockholders or the
If board approval is sought, the stockholders entitled to vote know
contract or transactions must be about the director's interest and
approved by a majority of the the contract is specifically
disinterested directors, even though approved in good faith by a vote of
the disinterested directors are less those stockholders, or
than a quorum.
- the transaction is fair to the
corporation as of the time it is
authorized, approved or ratified by
the MCS board or the stockholders.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Simione's bylaws provide that Simione MCS's bylaws provide that, except as
shall indemnify each of its directors prohibited by law, every director and
and officers to the fullest extent officer of MCS is entitled to be
permitted by law in connection with indemnified by MCS in connection with
any actual or threatened civil, any actual or threatened civil,
criminal, administrative or criminal,
</TABLE>

33
<PAGE> 43

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
investigative proceedings arising out administrative, investigative or
of their service to Simione as a other proceeding, whether brought by
director or officer. or in the right of MCS or otherwise,
in which he or she may be involved,
Under Delaware law, other than an as a party or otherwise, by reason of
action brought by or in the right of such person being or having been a
the corporation, this indemnification director or officer of MCS or by
is available if it is determined that reason of the fact that this person
the indemnified person acted: is or was serving at the request of
MCS as a:
- - in good faith and in a manner he or
she reasonably believed to be in or - director,
not opposed to the best interests of
the corporation, and, - officer,
- - with respect to any criminal action - employee,
or proceedings, had no reasonable
cause to believe his or her conduct - fiduciary or
was unlawful.
- other representative of:
In actions brought by or in the right
of the corporation, this -- another corporation,
indemnification is limited to
expenses actually and reasonably -- partnership,
incurred and is permitted only if the
indemnitee acted in good faith and in -- joint venture,
a manner he or she reasonably
believed to be in or not opposed to -- trust,
the best interests of the
corporation. However, no -- employee benefit plan or
indemnification may be made in
respect of any claim, issue or matter -- other entity.
as to which the person is adjudged to
be liable to the corporation, unless This indemnification may include the
the court in which the action was right to have expenses incurred by
brought determines that, despite the the indemnified person in connection
adjudication of liability, but in with the claim, action, suit or
view of all of the circumstances of proceeding paid in advance by MCS
the case, the person is fairly and prior to final disposition of the
reasonably entitled to indemnity for claim, action, suit or proceeding,
the expenses which the court deems subject to the conditions prohibited
proper. To the extent that the by law. Currently, MCS's directors
indemnified person has been and officers have a contractual right
successful in defense of any action, to indemnification under an agreement
suit or proceeding, he must be with Mestek funded by a trust.
indemnified against expenses actually
and reasonably incurred by him in The Pennsylvania Business Corporation
connection with the action. Law permits indemnification unless
the act or omission giving rise to
the claim constitutes willful
misconduct or recklessness.

AMENDMENTS TO THE CERTIFICATE OR ARTICLES OF INCORPORATION

The certificate of incorporation may The MCS articles of incorporation may
be amended by the affirmative vote of be amended by the affirmative vote of
the Simione board followed by the the MCS board followed by the
affirmative vote of the holders of a affirmative vote of a majority of the
majority of the votes cast by all
</TABLE>

34
<PAGE> 44

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
outstanding stock entitled to vote on stockholders entitled to vote on the
it and the majority of the amendment. If any class or series of
outstanding stock entitled to vote on shares is entitled to vote on a
it as a class. proposed amendment as a class, the
amendment must also be approved by
the affirmative vote of a majority of
the votes cast in each class vote.
Unless otherwise provided in the
articles of incorporation, a proposed
amendment of the articles of
incorporation need not be approved by
the MCS board before being submitted
for stockholder approval if it is
proposed by a petition of
stockholders entitled to cast at
least 10% of the votes that all
stockholders are entitled to cast
thereon.

AMENDMENT OF BYLAWS
The stockholders may amend, alter or The stockholders, by the affirmative
repeal the bylaws by the affirmative vote of the holders of a majority of
vote of the holders of a majority of the stock issued and outstanding of
the voting power of the then the class or classes entitled to
outstanding shares of stock entitled vote, may at any meeting, provided
to vote generally in the election of the substance of the proposed
directors, voting together as a amendment shall have been stated in
single class. In addition, the the notice of the meeting, amend,
Simione board, by the affirmative alter or repeal the bylaws. The MCS
vote of a majority of the directors, board, by a majority vote of its
may amend, alter or repeal the members, has the power to make,
bylaws. alter, amend and repeal the bylaws,
subject to the power of the
stockholders to change the action.

POWER TO CALL SPECIAL STOCKHOLDERS MEETING

Special meetings of stockholders may A stockholders' meeting for any
be called only by: purpose may be called at any time by
- the Simione board pursuant to a the MCS board, by the President of
resolution adopted by the board of MCS, or by the holders of at least
directors or one-fifth of all the shares
- the President of Simione. outstanding and entitled to vote at
the meeting. In addition, an
"interested stockholder", as defined
in Section 2553 of the Pennsylvania
Business Corporation Law, may call a
special meeting for the purpose of
approving a business combination
under the Pennsylvania anti-takeover
law.
</TABLE>

35
<PAGE> 45

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
ACTION BY WRITTEN REQUEST

Any action required or permitted to Any action required or permitted to
be taken at a stockholders meeting be taken at a stockholders meeting
may be taken without a meeting if may be taken without a meeting if,
consents are signed by the holders of before or after the action, consents
outstanding stock having not less thereto by all the stockholders who
than the minimum number of votes that would be entitled to vote at a
would be necessary to authorize or meeting for such purpose are filed
take the action at a meeting at which with the Secretary.
all shares entitled to vote on the
action were present and voted.

INSPECTION OF STOCKHOLDERS LIST

The Secretary of Simione must The officer or agent having charge of
prepare, before every stockholders the transfer books for the shares of
meeting, a complete list of the the corporation must make a complete
stockholders entitled to vote at the list of the stockholders entitled to
meeting. This list must be arranged vote at a stockholders meeting. This
in alphabetical order, and show the list must be arranged in alphabetical
address of each stockholder and the order, with the address of and the
number of shares registered in the number of shares held by each
name of each stockholder. The list stockholder. The list must be
must be open to the examination of produced and kept open at the time
any stockholder, for any purpose and place of the meeting and will be
related to the meeting, during subject to the inspection of any
ordinary business hours, for a period stockholder during the whole time of
of at least 10 days before the the meeting. However if the
meeting. The list must also be corporation has 5,000 or more
produced and kept at the time and stockholders, the corporation may,
place of the meeting during the whole instead of making a list, make the
time of the meeting, and may be information available at the meeting
inspected by any stockholder present. by any other means.

DIVIDENDS AND REPURCHASES OF SHARES

Dividends on the stock of Simione of The Pennsylvania Business Corporation
any class are payable: Law provides that, unless otherwise
restricted in the bylaws, a
- only out of assets, profits or distribution may be made unless,
funds of the corporation at the after giving effect thereto,
time legally available to pay
dividends, and - the corporation would be unable to
pay its debts as they become due in
- only when and as declared by the the usual course of its business,
Simione board. or
Dividends may be paid upon common - the total assets of the corporation
stock as and when declared by the would be less than the sum of its
Simione board, subject to all of the total liabilities plus the amount
rights of the preferred stockholders. that would be needed if the
Each series of preferred has dividend corporation were to be dissolved at
rights that have priority over the the time as of which the
rights of the common stockholders. distribution is measured, to
Generally, common stockholders may satisfy the preferential rights
not receive dividends upon dissolution of stockholders
whose preferential rights
</TABLE>

36
<PAGE> 46

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
until the preferred stockholders have are superior to those receiving the
received all of the dividends due to distribution.
them.
MCS has no outstanding preferred
In addition, the Delaware General stock.
Corporation Law generally provides
that a corporation may redeem or The Pennsylvania Business Corporation
repurchase its shares only if the Law also permits corporations to
redemption or repurchase would not acquire their own shares.
impair the capital of the
corporation. The ability of a The MCS board may declare dividends
Delaware corporation to pay dividends from the surplus or net profits
on, or to make repurchases or arising from the business of MCS as
redemptions of, its shares is and when it decides. Before declaring
dependent on the financial status of any dividend, the directors must
the corporation standing alone and reserve out of the accumulated
not on a consolidated basis. In profits funds for working capital or
determining the amount of surplus of as a reserve fund to meet
a Delaware corporation, the assets of contingencies or for equalizing
the corporation, including stock of dividends, or for such other purpose
subsidiaries owned by the as the directors shall think is in
corporation, must be valued at their the best interest of MCS.
fair market value as determined by
the Simione board, regardless of
their historical book value.
</TABLE>

37
<PAGE> 47

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
MERGERS AND MAJOR TRANSACTIONS

Whenever the approval of the Stockholder approval is required for
stockholders of a corporation is the sale, lease, exchange or other
required for an agreement of merger disposition of all or substantially
or consolidation, or for a sale, all of the property and assets of a
lease or exchange of all or corporation when not made in the
substantially all of its assets, it usual and regular course of the
must be approved by the affirmative business of the corporation or for
vote of the holders of a majority of the purpose of relocating all or
outstanding shares entitled to vote substantially all of the business of
on it. the corporation in connection with
the dissolution or liquidation of the
However, unless required by its corporation. In cases where
certificate of incorporation, no vote stockholder approval is required, a
of the stockholders of a corporation merger, consolidation, sale, lease,
surviving a merger is necessary to exchange or other disposition must be
authorize such merger if: approved by a majority of the votes
cast by all stockholders entitled to
- - the agreement of merger does not vote thereon.
amend the certificate of
incorporation of the surviving Stockholder approval is not required
corporation; for a plan of merger or consolidation
if:
- - each share of stock of such
surviving corporation outstanding - the surviving or new corporation is
prior to the merger is to be an a Pennsylvania corporation whose
identical outstanding or treasury articles are identical to the
share of the surviving corporation articles of the corporation;
after the merger; and
- each share of the corporation
- - either: outstanding immediately prior to the
merger or consolidation will
-- no shares of common stock of continue as or be converted into
the surviving corporation and except as otherwise agreed to by the
no shares, securities or holder thereof, an identical share
obligations convertible into of the surviving or new corporation;
be issued under the agreement and
of merger, or
- the plan of merger provides that
-- the number of shares of the stockholders of the corporation
common stock to be issued will hold in the aggregate shares
does not exceed 20% of the of the surviving or new corporation
number of shares of common having at least a majority of the
stock of the surviving votes entitled to be cast generally
corporation outstanding in an election of directors.
immediately prior to such
merger.
In addition, the Pennsylvania
In addition, the Delaware General Business Corporation Law provides
Corporation Law provides that a that stockholder approval is not
parent corporation that is the record required if, prior to the adoption of
holder of at least 90% of the a plan of merger, another corporation
outstanding shares of each class of that is a party to the plan owns 80%
stock of a subsidiary may merge the or more of the outstanding shares of
subsidiary into the parent each class of the corporation.
corporation without the approval of
the subsidiary's stockholders or
board and without the approval of the
parent's stockholders.
</TABLE>

38
<PAGE> 48

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
APPRAISAL RIGHTS/DISSENTERS RIGHTS

The Delaware General Corporation Law The Pennsylvania Business Corporation
generally provides appraisal rights Law provides that stockholders of MCS
in the case of a merger, a sale or have dissenters rights with respect
transfer of all or substantially all to specified corporate actions,
of Simione's assets. However, the including:
Delaware General Corporation Law does
not provide appraisal rights in - a plan of merger, consolidation,
connection with a merger or share exchange or conversion,
consolidation, to stockholders of a
corporation that is either: - certain other plans or amendments
to its articles in which disparate
- - listed on a national securities treatment is accorded to the
exchange or designated as a holders of shares of the same class
national market system security by or series, and
the National Association of
Securities Dealers, or - a sale, lease, exchange or other
disposition of all or substantially
- - held of record by more than 2,000 all of the corporation's property
stockholders, and assets, except if:
unless the applicable agreement of - the sale, lease, exchange or other
merger or consolidation requires disposition is made in connection
that such stockholders will be with the dissolution or liquidation
entitled to receive, in exchange for of the corporation;
their shares of such constituent
corporation, anything except: - the acquiring corporation owns all
of the outstanding shares of the
- shares of stock of the acquired corporation;
resulting or surviving
corporation; - the voting rights, preferences,
limitations or relative rights of
- shares of stock of any other the acquired corporation are not
corporation listed on a altered thereby; or
national securities exchange
or designated as a national - the assets sold, leased, exchanged
market system security on an or otherwise disposed of are
interdealer quotation system by the simultaneously leased back to the
National Association of Securities corporation.
Dealers, Inc. or held of record by
more than 2,000 holders;
- cash in lieu of fractional
shares; or
- any combination of shares of
stock and cash in lieu of
fractional shares described in
the previous three bullet
points.
The Delaware law denies appraisal
rights to the stockholders of the
surviving corporation if the merger
did not require for its approval the
vote of the stockholders of the
surviving corporation.
</TABLE>

39
<PAGE> 49

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
ANTI-TAKEOVER PROVISIONS

Simione is subject to Section 203 of MCS is subject to Section 2555 of the
the Delaware General Corporation Law, Pennsylvania Business Corporation
which generally prohibits a Delaware Law, which generally prohibits
corporation from engaging in a corporations subject to the Exchange
"business combination" with an Act reporting requirements from
"interested stockholder" for a period engaging in a "business combination"
of three years following the date for a period of five years following
that such person became an interested the date that any person became an
stockholder unless one of the interested stockholder unless certain
required conditions is met. A conditions are met. An "interested
"business combination" is defined as stockholder" is defined generally as
a variety of transactions, including a person that is the beneficial owner
mergers, asset sales, issuance of of 20% or more of a corporation's
stock and other transactions outstanding voting stock. A "business
resulting in financial benefit to the combination" is defined as a variety
interested stockholder. An of transactions, including mergers,
"interested stockholder" is defined consolidations, share exchanges,
generally as a person that is the asset sales and dispositions, stock
beneficial owner of 15% or more of a issuances and transfers and other
corporation's outstanding voting transactions resulting in a
stock. disproportionate financial benefit to
an "interested stockholder".
The required conditions are:
- board approval prior to the The Pennsylvania Business Corporation
person becoming an interested Law, unlike the Delaware General
stockholder, Corporation Law, states that, in the
- ownership of 85% of the voting event of the acquisition by any
stock by the interested person or group of shares of an
stockholder, or Exchange Act reporting corporation
- board approval plus approval by that entitles the holder thereof to
2/3 of the outstanding voting at least 20% of the voting power of
stock. the corporation, the acquiring person
or group must give notice to all
stockholders of record of the
corporation that the acquisition has
occurred and any of the stockholders
may demand payment of the fair value
of their shares from the acquiring
person or group.
</TABLE>

40
<PAGE> 50

<TABLE>
<CAPTION>
SIMIONE MCS
------- ---
<S> <C>
DISSOLUTION

If the Simione board decides it is If the MCS board adopts a resolution
advisable that the corporation should recommending to dissolve the
be dissolved and a majority of the corporation, the stockholders must
outstanding stock of the corporation adopt the resolution by the
entitled to vote thereon votes in affirmative vote of a majority of the
favor of the proposed dissolution, votes cast by all stockholders
the corporation shall be dissolved entitled to vote thereon. Unlike
upon the filing of a certificate of Delaware law, Pennsylvania law
dissolution with the Secretary of provides two different procedures for
State of the State of Delaware. The the corporation to provide for the
corporation shall continue after winding up and distribution of the
dissolution for the purposes of corporation's assets. The board may
defending suits and settling its elect that the dissolution shall
affairs for a three-year period. proceed under Section 1975 or under
Delaware law sets forth the payment Subchapter H of the Pennsylvania
and distribution procedures a Business Corporation Law.
dissolving corporation must follow in
connection with winding up its Under Section 1975, MCS must provide
affairs. These procedures include for the liabilities of the
notification requirements, and corporation prior to filing the
obtaining the approval of the articles of dissolution with the
Delaware Court of Chancery. Directors Pennsylvania Department of State.
of a dissolved corporation that Directors of corporations that elect
comply with Delaware law's payment to follow this procedure are held to
and distribution procedures shall not the standard of care that applies to
be personally liable to the claimants all of their other duties.
of the dissolved corporation.

Each series of preferred stock has a The Subchapter H provision is similar
liquidation preference over the to the procedure under Delaware law.
common stock. The common stockholders Under Pennsylvania law, however, the
may not receive any payments in a corporation only continues to exist
dissolution until the preferred for the purpose of settling its
stockholders have received the full affairs for a period of two years. In
amount of their preference and any addition, when the court decides the
accumulated and unpaid dividends on amount of security that shall be
the preferred stock. posted by the dissolved corporation,
it shall consider the amount that
will be sufficient to provide
compensation for claims that are
unknown but that are likely to arise
or become known for a period of only
two years after the dissolution of
the corporation.
MCS has no outstanding preferred
stock.
</TABLE>

41
<PAGE> 51

RIGHTS OF DISSENTING STOCKHOLDERS

For purposes of this section, we use the term "MCS" to refer also to
Simione as the surviving corporation with respect to actions taken after the
effective time of the merger. Under the merger agreement and the Pennsylvania
Business Corporation Law of 1988, stockholders who own MCS shares prior to the
merger will have dissenters rights relating to the merger, under Sections 1571
through 1580 of Subchapter 15D of the Pennsylvania Business Corporation Law.

The MCS stockholders may demand in writing that MCS pay the fair value of
their MCS common stock. If any stockholders exercise dissenters rights in the
merger under Subchapter 15D, any shares of MCS common stock held by these
holders at the effective time will not be converted into the right to receive
Simione common stock. Instead the shares will be converted into the right to
receive the "fair value" of those MCS shares pursuant to Subchapter 15D. The
"fair value" may be less than or greater than the merger consideration.

MCS will not give any notice of the following requirements other than as
described in this joint proxy statement/prospectus and as required by
Pennsylvania law.

GENERAL. Any stockholder who has properly demanded the payment of the fair
value of his or her shares of MCS common stock owned at the effective time under
Subchapter 15D will not, after the effective time, be a stockholder of MCS for
any purpose or be entitled to the payment of dividends or other distributions on
any of the MCS common stock.

MCS STOCKHOLDERS SHOULD NOTE THAT, UNLESS ALL THE REQUIRED PROCEDURES FOR
CLAIMING DISSENTERS RIGHTS ARE FOLLOWED EXACTLY, DISSENTERS RIGHTS WILL BE LOST.
SIMPLY VOTING AGAINST APPROVAL AND ADOPTION OF THE MERGER AGREEMENT, WHETHER IN
PERSON OR BY PROXY, IS NOT SUFFICIENT NOTICE TO PERFECT DISSENTERS RIGHTS.
FILING WRITTEN NOTICE OF INTENTION TO DEMAND "FAIR VALUE" IS ALSO REQUIRED, AS
DESCRIBED BELOW.

Before any MCS stockholder vote is taken on the merger agreement, a
dissenting stockholder must deliver to MCS a written notice of his or her
intention to demand the fair value of his or her MCS common stock if the merger
is effected. This written notice may be sent to the Secretary of MCS at MCS,
Inc., 400 Penn Center, Pittsburgh, PA 15253. Neither the return of a proxy by
the dissenting stockholder with instructions to vote the shares represented
thereby against the approval and adoption of the merger agreement nor a vote
against the approval and adoption of the merger agreement or an abstention from
voting on the approval and adoption of the merger agreement is sufficient to
satisfy the requirement of delivering a written notice to MCS. In addition, the
dissenting stockholder must not make any change in the beneficial ownership of
his or her shares from the date of filing the notice with MCS through the
effective time of the merger, and the dissenting stockholder must not vote his
or her shares for which payment of "fair value" is sought in favor of the
approval and adoption of the merger agreement.

The submission of a signed blank proxy will serve to waive dissenters
rights if not revoked, but a failure to vote, a vote against or an abstention
from voting on the approval and adoption of the merger agreement will not waive
these rights. Proper revocation of a signed blank proxy or of a signed proxy
instructing a vote for approval and adoption of the merger agreement will
prevent the immediate waiver of dissenters rights under the Pennsylvania
Business Corporation Law. Failure by a dissenting stockholder to comply with any
of these requirements will result in the dissenting stockholder's forfeiting any
right to payment of the "fair value" of such dissenting stockholder's MCS common
stock.

42
<PAGE> 52

Instead, the stockholder would receive merger consideration in the form of
shares of Simione common stock.

RECORD AND BENEFICIAL OWNERS. You cannot assert dissenters rights for less
than all the MCS common stock registered in your name unless you dissent with
respect to all the MCS common stock beneficially owned by any one person and
disclose the name and address of the person or persons on whose behalf the
record holder dissents. A beneficial owner who is not the record holder may
assert dissenters rights with respect to MCS common stock held on the beneficial
owner's behalf if the beneficial owner submits to MCS the written consent of the
record holder not later than the time of assertion of dissenters rights. A
beneficial owner may not dissent with respect to less than all the MCS common
stock the beneficial owner owns, whether or not such MCS common stock is
registered in the beneficial owner's name.

NOTICE TO DEMAND PAYMENT. If the merger is approved by the requisite vote
at the MCS special meeting, MCS shall mail to all dissenting stockholders who
gave proper notice of their intention to demand payment of fair value and who
refrained from voting in favor of the merger a notice stating where and when a
demand for payment must be sent. This notice will also inform dissenting
stockholders of the extent to which the transfer of the shares will be
restricted from the time that a demand for payment is received by MCS until
completion of the merger or the release of the restrictions by MCS. The notice
shall be accompanied by a copy of Subchapter 15D and include a form for
demanding payment. This form shall have a request for certification of the date
that beneficial ownership of the MCS common stock was acquired by the dissenting
stockholder or the person on whose behalf the dissenting stockholder dissents.

Dissenting stockholders must return a completed demand notice to MCS within
30 days from the mailing of the notice. Failure by a dissenting stockholder to
timely demand payment according to the notice will cause the dissenting
stockholder to lose all rights to receive payment of the fair value of his or
her MCS common stock. Instead, the stockholder would receive merger
consideration in the form of shares of Simione common stock. All mailings to MCS
are at the risk of the dissenting stockholder. However, MCS recommends that the
notice of intention to dissent and the demand form be sent by certified mail. If
the merger has not been effected within 60 days after the date set for demanding
payment, MCS shall release the shares from any transfer restrictions that MCS
imposed as a result of the demand for payment. MCS, however, may at any later
time send a new notice regarding demand for payment and restrictions on the
transfer of shares.

PAYMENT OF "FAIR VALUE" OF MCS COMMON STOCK. Promptly after the effective
time, or upon timely receipt of demand for payment if the merger has already
been effected, MCS shall either remit to dissenting stockholders who have made
demand and deposited their share certificates the amount MCS estimates to be the
"fair value" of the common stock or give written notice that no remittance will
be made under Subchapter 15D. This remittance or notice shall be accompanied by:

- MCS' closing balance sheet and statement of income for a fiscal year
ending not more than 16 months prior to the date of remittance or notice,
together with the latest available interim financial statements;

- a statement of MCS' estimate of the "fair value" of the MCS common stock;
and

- a notice of the right of a dissenting stockholder to demand payment or
supplemental payment, as the case may be, accompanied by a copy of
Subchapter 15D.

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<PAGE> 53

If MCS does not remit the amount of its estimate of the "fair value" of the
MCS common stock, it will return all share certificates that have been deposited
and may make a notation thereon that a demand for payment has been made. If
shares with respect to which the notation has been made are later transferred,
each new share certificate issued therefor will bear a similar notation,
together with the name of the original dissenting holder or owner of the shares.
A transferee of the shares will not acquire by the transfer any rights in MCS
other than those which the original dissenter had after making demand for
payment of their "fair value".

ESTIMATE BY DISSENTING STOCKHOLDER OF "FAIR VALUE" OF MCS COMMON STOCK. If
a dissenting stockholder believes that the amount estimated or paid by MCS for
his or her MCS common stock is less than its "fair value", the dissenting
stockholder may send to MCS his or her own estimate of its "fair value". This
estimate shall be treated as a demand for payment of the amount of the
deficiency. If the dissenting stockholder does not file his or her own estimate
of the "fair value" within 30 days after the remittance or notice has been
mailed by MCS, the dissenting stockholder will be entitled to no more than the
amount estimated in the notice or remitted by MCS.

VALUATION PROCEEDINGS. MCS may file in court an application for relief
requesting that the "fair value" of the MCS common stock be determined by the
court, if any demands for payment remain unsettled, within 60 days after the
latest of:

- the effective time;

- timely receipt of any demands for payment; or

- timely receipt of any dissenting stockholder estimates of "fair value".

The court may appoint an appraiser to receive evidence and recommend a
decision on the issue of "fair value". Each dissenting stockholder whose demands
have not been settled will be made a party to the proceeding and will be
entitled to recover the amount by which the "fair value" of the dissenting
stockholder's MCS common stock is found to exceed the amount, if any, previously
paid. The dissenting stockholder will also be entitled to interest on this
amount from the effective time until the date of payment. There is no assurance,
however, that MCS will file such an application. If MCS fails to file an
application within the 60-day period, any dissenting stockholder who has not
settled his or her claim may do so in MCS' name within 30 days after the
expiration of the 60-day period. If a dissenting stockholder does not file an
application within this 30-day period, each dissenting stockholder who has not
settled his or her claim will be paid no more than MCS' estimate of the "fair
value" of the common stock and may bring an action to recover any amount not
previously paid.

COSTS AND EXPENSES OF VALUATION PROCEEDINGS. The costs and expenses of any
valuation proceeding, including the reasonable compensation and expenses of any
appraiser appointed by the court, will be determined by the court and assessed
against MCS, except that any part of such costs and expenses may be assessed as
the court deems appropriate against all or some of the dissenting stockholders
whose action in demanding supplemental payment is found by the court to be
dilatory, obdurate, arbitrary, vexatious or in bad faith. The court may also
assess the fees and expenses of counsel and experts for any or all of the
dissenting stockholders against MCS if it fails to comply substantially with
Subchapter 15D or acts in a dilatory, obdurate, arbitrary or vexatious manner or
in bad faith.

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<PAGE> 54

The court can also assess any fees or expenses incurred by MCS against any
dissenting stockholder if the dissenting stockholder is found to have acted in a
dilatory, obdurate, arbitrary or vexatious manner or in bad faith. If the court
finds that the services of counsel for any dissenting stockholder were of
substantial benefit to the other dissenting stockholders and should not be
assessed against MCS, it may award to this counsel reasonable fees to be paid
out of the amounts awarded to the dissenting stockholders who were benefited.

Under the Pennsylvania law, an MCS stockholder has no right to obtain, in
the absence of fraud or fundamental unfairness, an injunction against the
merger, nor any right to valuation and payment of the fair value of the holder's
shares because of the merger, except to the extent provided by the dissenters
rights provisions of Subchapter 15D. Pennsylvania law also provides that absent
fraud or fundamental unfairness, the rights and remedies provided by Subchapter
15D are exclusive.

MCS stockholders who do not follow the requirements of Subchapter 15D will
only be entitled to receive the merger consideration in the form of shares of
Simione common stock.

If holders of 5% or more of the aggregate number of shares of issued and
outstanding MCS common stock shall have exercised, and not withdrawn, dissenters
rights under Pennsylvania law, Simione, MCS and Mestek have agreed to negotiate
in good faith to amend the merger agreement to provide for the payment of cash
amounts to MCS stockholders who perfect, and do not withdraw, their dissenters
rights under Pennsylvania law, and the payment of related legal expenses and
court costs, in a manner mutually satisfactory to Simione and Mestek.

45
<PAGE> 55

BACKGROUND OF THE MERGER

INITIAL APPROACHES. Over the past seven years, Barrett C. O'Donnell,
Chairman of the Board of Simione, initiated several informal conversations with
John E. Reed, Chairman of the Board, President and Chief Executive Officer of
Mestek, regarding a possible acquisition of MCS by Simione. Mestek did not
express any interest in an acquisition of MCS by Simione, and no negotiations,
contracts or understandings resulted, because Mestek did not want to engage in
an outright sale of MCS.

CHANGES IN THE INDUSTRY. However, the health care information systems
industry has experienced substantial and rapid change in the past few years,
characterized by significant regulatory change, intensifying competition and
consolidation. This environment, coupled with the need for a steady supply of
new and enhanced products to meet evolving customer needs, led the board of
directors of Mestek, in November 1997, to begin exploring strategic alternatives
for the expansion of MCS' business.

This environment also led the board of directors of Simione in July 1998 to
begin exploring the possibility of selling Simione. In July 1998, Simione
engaged Hambrecht & Quist to review the possibility of a sale of Simione's
business. Hambrecht conducted a search and met several times with Mr. O'Donnell,
but no serious candidates were identified and no offers were extended. The
Hambrecht engagement was terminated in March 1999. No fee was paid to Hambrecht.

MCS' NEGOTIATION WITH OTHER COMPANIES. In late 1998, MCS investigated
possible business combinations with companies who were strong providers of
information systems and services to home health agencies. MCS felt that this
would compliment MCS' position as a leading provider of information systems and
services to home medical equipment companies. MCS had serious discussions with
three companies.

In late 1998, MCS approached and entered into a letter of intent for the
acquisition of one of these companies by MCS. Negotiations with this company
were abandoned when the companies could not agree on a value for this company.
Negotiations for the other two companies approached by MCS also failed. In one
case, the parent of the potential target was not interested in selling. In the
other case, the potential target was already engaged in serious discussions with
another bidder.

NEGOTIATIONS BETWEEN SIMIONE AND MCS. In early January 1999, Mr. O'Donnell
called R. Bruce Dewey, Senior Vice President and then General Counsel of Mestek,
to discuss a possible acquisition or merger between Simione and MCS. Mr.
O'Donnell was seeking a strategic transaction to respond to the increasingly
competitive health care information systems market. Mestek indicated its
receptiveness to this proposal, because it was not simply a sale of MCS, but
rather a combination of Simione and MCS with the potential to meet Mestek's
strategic goals for expanding MCS' business. This telephone call was followed by
a meeting on January 12, 1999 in Atlanta between Mr. O'Donnell, Mr. Dewey and
William A. Thomasmeyer, President of MCS, to discuss the desirability of a
merger and the initial procedures necessary to negotiate such a transaction. See
"Recommendation of the Simione Board and Reasons for the Merger" beginning on
page 54 for a discussion of the reasons the Simione board thought MCS was an
attractive merger candidate.

In February 1999, Reid Horovitz, then General Counsel of Simione, had
telephone discussions with Mr. O'Donnell and Mr. Dewey to negotiate a
Confidentiality and Nondisclosure Agreement between Mestek and Simione. The
Confidentiality and Nondis-

46
<PAGE> 56

closure Agreement was signed by Mestek and Simione on February 8, 1999. The
Confidentiality and Nondisclosure Agreement provides that Simione, MCS and
Mestek may not disclose to third parties confidential information received from
each other in connection with the merger negotiations. Following execution of
the Confidentiality and Nondisclosure Agreement, the two companies began to
exchange information, including financial data, projections and budgets.

From March 3 to March 5, 1999, meetings were held in Atlanta among Mr.
O'Donnell, Mr. Dewey, Mr. Horovitz, Mr. Thomasmeyer, and several officers of
both companies, including:

<TABLE>
<S> <C>
For MCS:
Stephen M. Shea Senior Vice President -- Finance and Chief Financial
Officer of Mestek
Michael Quinn Vice President of Operations
Don DeCorte Product Manager
For Simione:
Eugene Horn then Senior Vice President of Acquisitions
Lori N. Siegel then Chief Financial Officer
Kathie McClellan Senior Vice President of Customer Services
Jack Arthur Senior Vice President of Product Development
James Hall then Senior Vice President -- Sales and Marketing
</TABLE>

At these meetings, various aspects of a possible business combination of
Simione and MCS were discussed including:

- presentations by the two companies of their respective product
offerings;

- organizational structures; and

- visions of the development of their future products.

The companies' representatives also discussed:

- preliminary calculations of pro forma financial information for a
combined Simione/MCS entity;

- the then-current capital structures and beneficial ownership
characteristics of the two companies; and

- mechanisms to determine the degree to which the companies' operations
and visions were complementary.

At this time, MCS informed Simione that MCS' ProfitWorks product line would
be transferred to Mestek prior to any business combination. ProfitWorks is an
information system utilized by the lumber, electrical, and plumbing industries
rather than the home health care industry. It was operated through Mestek's MCS
subsidiary merely for administrative and accounting convenience. Mestek did not
wish to include ProfitWorks in the merger because it did not fit Mestek's vision
of the total array of MCS' products for the health care industry.

In late March 1999, meetings were held in Westfield, Massachusetts between
Mr. Shea, Mr. Dewey, Winston R. Hindle, Jr., director of MCS and Mestek, and Mr.
Reed for Mestek, and Mr. O'Donnell and Mr. Hall for Simione. At these meetings,
the parties discussed possible structures for a transaction based on the tax
positions of the

47
<PAGE> 57

two companies, and tax and accounting consequences that could result depending
on the form and structure of the transaction. In addition, the parties discussed
their respective views on the relative values of the two companies, though they
came to no agreement on this topic. The parties agreed to continue the
negotiations and it was agreed further that more due diligence and development
of pro forma financial data were needed.

DIFFERENCES IN VALUATION. In early April 1999, the parties expressed their
desire to continue the negotiations despite their inability to agree upon the
relative values of the companies, due in part to the parties' satisfaction with
the shared vision of the two companies' futures. Further discussions were held
in Atlanta between Mr. Dewey and Mr. O'Donnell to resolve the issue of
determining the relative values of the two companies. The parties believed they
were too far apart in their valuations to resolve the difference themselves.
Each company thought that its value was well over half of the combined values of
the two companies. Therefore, they agreed to engage and accept the valuation of
a neutral third party. Both companies agreed to engage the accounting firm, HLB
Gross Collins, LLP, as valuation experts. An engagement letter with Gross
Collins was signed on April 7, 1999. A preliminary structure for the transaction
was agreed upon, pending completion of due diligence, legal review and the work
of Gross Collins.

In mid-April 1999, due diligence meetings were held between the management
teams of the companies. They discussed topics related to the mechanics and
potential costs savings of combining the operations of the two companies.

Also in mid-April 1999, the management of Mestek made a presentation to
representatives of Gross Collins regarding the valuation of MCS, including
information concerning the value and useful condition of equipment and
intangible assets used in MCS' business and pro forma financial information of
MCS. MCS disclosed to Gross Collins that the ProfitWorks product line of MCS
should not be taken into account in determining the value of MCS, to reflect the
fact that the ProfitWorks product line would be transferred to Mestek prior to
any merger between Simione and MCS.

In late April 1999, management of Simione similarly made a presentation to
Gross Collins regarding the valuation of Simione, including information on
equipment, intangible assets and pro forma financial data. Shortly thereafter,
Simione engaged Arnall Golden & Gregory, LLP as its legal counsel in connection
with the merger proposals.

On April 26, 1999, Gross Collins met with Mr. O'Donnell and Mr. Dewey in
Atlanta and presented its valuation report. As agreed to by the parties at the
time Gross Collins was retained, the parties accepted the valuation report as
the dispositive valuation for purposes of determining the relative values of
Simione and MCS. On April 30, Mestek engaged Baker & McKenzie as its legal
counsel for the proposed merger.

On May 6, 1999, Mr. Dewey, Mr. Horn and Richard Caldwell, Acquisitions
Analyst of Mestek, met to discuss due diligence and to finalize the pro forma
financial data for the proposed merger.

DRAFT MERGER AGREEMENT. On May 10, 1999, a joint meeting of several of the
board members of Simione and Mestek was held in Atlanta, and agreed on the
treatment of options and warrants and post-merger composition of management and
the board of directors. At this meeting, the boards confirmed that the Gross
Collins valuation would continue to be used as the basis for the exchange ratio.

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<PAGE> 58

On May 12, 1999, counsel for Simione provided Mestek and its counsel with a
copy of a draft merger agreement. During the next two weeks, the companies,
working with their respective legal counsel, negotiated a merger agreement, and
due diligence was completed.

On May 18, 1999, the Mestek and MCS boards of directors met and approved
the merger, and on May 19, 1999, the Simione board held a telephone conference
call and approved the merger, in both instances giving management and legal
counsel authority to finalize the remaining provisions. The merger agreement was
signed on May 26, 1999, and Simione and Mestek each issued a press release on
that day announcing the proposed merger and the material terms of the merger
agreement.

SIMIONE'S MERGER WITH CARECENTRIC. Throughout the first four months of
1999, Mr. O'Donnell had several conversations with Jerry Knight, the then Chief
Executive Officer of CareCentric, and Jesse Treu, the then Chairman of the Board
of CareCentric. These discussions focused on the possibility of Simione
acquiring CareCentric. The discussions were put on hold as Simione approached
signing the merger agreement with MCS.

After the execution of the MCS merger agreement, Mr. O'Donnell resumed the
discussions with Mr. Knight and Mr. Treu. During late June to early July 1999,
employees of Simione performed due diligence of the products and business of
CareCentric. On July 12, 1999, the board of directors of Simione authorized the
officers of Simione to execute a merger agreement with CareCentric. On July 12,
1999, Simione entered into a merger agreement with CareCentric, and on July 13,
1999 Simione issued a press release announcing the proposed CareCentric merger
and the material terms of the CareCentric merger agreement.

The CareCentric merger required the consent of Mestek, so Mr. Dewey and
other representatives of Mestek, including legal counsel for Mestek, were
actively involved in the negotiations with CareCentric. On July 8, 1999, John E.
Reed of Mestek signed a consent to the CareCentric transaction, which provided
that the shares to be issued in the CareCentric merger would not be taken into
account in calculating the number of shares to be issued to Mestek in the MCS
merger.

Separately, Mestek and several Simione stockholders agreed that their
registration rights would have equal priority with the registration rights to be
granted to the CareCentric stockholders in connection with the CareCentric
merger. In addition, the three large stockholders of MCS, effective as of the
closing of the MCS/Simione merger, and three other Simione stockholders agreed
to vote their shares of Simione common stock in favor of the conversion into
Simione common stock of the preferred stock issued to CareCentric stockholders.
These stockholders are identified in the section entitled "Voting Agreements"
beginning at page 79. The CareCentric merger closed on August 12, 1999. See
"Proposal 3 for Simione Stockholders -- To Approve the Issuance Upon Conversion
of Series A Preferred Stock of Shares of Common Stock, as Required by Nasdaq
Rules" beginning at page 170, for further description of the CareCentric merger.

SIMIONE'S NEGOTIATIONS WITH ANOTHER FIRM. In July 1999, the Chairman of
Simione was approached by a Nasdaq-listed health care company that was
developing an internet strategy, to discuss how Simione and its pending merger
partners might fit into their overall strategy. The board engaged
Robinson-Humphrey LLC for the limited purpose of representing Simione in a
possible sale transaction. The parties signed a nondisclosure

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agreement. The parties exchanged limited due diligence information. Mr.
O'Donnell and other officers of Simione had several meetings with officers of
the potential buyer to discuss their vision of how a business combination would
be structured. No offer was ever received and Simione decided that it was not
interested in selling to this potential buyer. All discussions ended in August
1999. No fee was paid to Robinson-Humphrey.

AMENDING THE MERGER AGREEMENT TO REFLECT THE SPIN-OFF OF MCS, THE MESTEK
INVESTMENT AND OTHER CHANGES. The CareCentric merger did not affect the initial
discussions or negotiations surrounding the Simione/MCS merger. After the
CareCentric merger was completed, it became apparent to the boards of directors
of MCS, Mestek and Simione that the combined company needed a focused management
team to execute its business plan, better utilize its resources, pursue
opportunities, attract talent and obtain access to capital markets.

The Mestek board of directors also concluded at this time that both Mestek
and MCS would benefit in several ways if the two companies were separated.
First, the Mestek board recognized that the combined home health care
information software business which is currently envisioned for Simione
(including the CareCentric and MCS businesses) needed to have widely held and
traded common equity in order to successfully attract and retain talented
management and technical personnel. It is understood that talented personnel in
the home health care information and software industries consider stock-related
compensation as a critical element of their total compensation package. The
Mestek board realized that the combined business would be more attractive to
such personnel as a widely-held, stand-alone high-tech company rather than one
in which substantial common equity was held by a manufacturing company whose
business was of a dramatically different nature. Although the common equity of
high-tech companies is generally more volatile than companies in manufacturing
industries, they frequently attract significant premiums in the equity markets.
The presence of a link to a large industrial enterprise would thus make the
opportunity to work at MCS and Simione less attractive to current and
prospective management and operational employees with talent and experience in
the relevant industries.

The board further recognized that the combined home health care information
business would have greater access to the capital markets as a widely held
public company rather than one in which the dominant common equity was held in
large part by another company, especially one in a very different industry. The
board believed that as a widely-held company the combined company would be
better positioned to raise additional capital through either debt securities or
equity for internal growth or acquisitions in the future.

The Mestek board also concluded at this time that the spin-off of MCS would
provide substantial benefits to Mestek by allowing its management to focus
exclusively on the operation and growth of its HVAC, metals and metal forming
segments. Mestek's core businesses involve skills and operations very different
from those critical to the home health care information and software businesses.
The Mestek board believed that the combined MCS/Simione/CareCentric businesses
did not fit the overall business plan of Mestek and that in the years ahead its
management could not adequately focus on the home health care information and
software business. The board realized that high-tech businesses in emerging
industries where innovation is at a premium often receive less attention and
must compete for resources inside a larger industrial company in a mature
manufacturing industry.

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The Mestek board therefore concluded that spinning off MCS prior to its
merger into Simione would achieve the corporate business objectives of improving
(1) the business prospects of both Mestek and the combined
MCS/Simione/CareCentric company by allowing each company's management to focus
on their respective businesses, (2) the ability of the combined
MCS/Simione/CareCentric company to attract and retain talented management and
operational personnel and (3) the position of the combined MCS/
Simione/CareCentric company to raise debt and equity capital.

In an effort to accomplish these goals, Mestek proposed to spin off MCS to
its stockholders prior to the merger and offered to invest capital from Mestek
into Simione to help cover the additional cash requirements incurred by Simione
in connection with the CareCentric merger and the performance of its business
plan. Mr. O'Donnell appointed David Ellis, a major stockholder of and consultant
to Simione, to negotiate an appropriate amendment to the May 26, 1999 merger
agreement with Mr. Reed, acting on behalf of Mestek.

During the month of August 1999, Mr. Reed and Dr. Ellis negotiated certain
terms and conditions in connection with the issuance to Mestek of Simione Series
B Preferred Stock and a warrant for shares of Simione common stock in exchange
for a cash investment by Mestek. Additionally, Mr. Reed and Dr. Ellis negotiated
an amendment to the MCS merger agreement, to reflect a spin-off of the shares of
MCS to the stockholders of Mestek as a condition to closing the merger, to
increase the number of Mestek board of director designees and to document the
terms of Mestek's additional cash investment in Simione. It was also agreed that
Mr. Dewey should be appointed President and Chief Executive Officer of Simione
upon the signing of the amended merger agreement.

On August 25, 1999, Mr. Reed, Dr. Ellis, Mr. Dewey and Mr. O'Donnell met
and agreed upon the terms and conditions of an amendment to the MCS merger
agreement and the issuance to Mestek of the Series B Preferred Stock and a
warrant upon the completion of the merger.

On August 31, 1999, the executive committee of Mestek approved the terms of
an amendment to the MCS merger agreement and the terms of the Series B Preferred
Stock investment.

On September 2, 1999, the board of directors of Simione met via conference
call and approved the terms of the amended MCS merger agreement, the issuance of
the Series B Preferred Stock and warrants to Mestek, the borrowing of $3 million
from Mestek evidenced by a secured promissory note and the appointment of Mr.
Dewey as President and Chief Executive Officer.

The amendment to the merger agreement required the consent of the
CareCentric stockholders. Representatives of the CareCentric stockholders
required that the amendment should not adversely affect the potential conversion
of the Series A Preferred Stock. Three major stockholders of Mestek agreed to
join in the amended merger agreement and committed to vote their shares of MCS
common stock in favor of the merger and to vote any shares of Simione common
stock received in the merger in favor of the Series A conversion.

From late August 1999 until early September 1999, officers and counsel for
Simione and Mestek prepared documents reflecting the amendment of the merger
agreement and the issuance of the Series B Preferred Stock. On September 9,
1999, an Amended and Restated Agreement and Plan of Merger and Investment
Agreement was executed among

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Simione, MCS, Mestek and three major stockholders of Mestek, which provides for
Mestek's investment of approximately $6 million in Simione in exchange for
shares of Simione Series B Preferred Stock and a warrant to purchase shares of
Simione common stock. A total of $3 million of the approximately $6 million was
funded by Mestek on September 9, 1999 in the form of a loan, and the remaining
$3 million, less accrued interest on the loan, was to be invested by Mestek upon
the closing of the merger. The amendment clarifies that the MCS stockholders and
Mestek would control the merged entity after the MCS/Simione merger. Simione and
Mestek each issued a press release on September 9, 1999 announcing that the
amended merger agreement had been executed and describing its material terms.

In connection with the spin-off of MCS, the amendment of the merger and the
infusion of cash, Mestek agreed to help in the operational management of
Simione. As a consequence, Mr. Dewey assumed the role of day-to-day executive
leadership of Simione as its Chief Executive Officer within the "Office of the
Chairman" of Simione. The Office of the Chairman of Simione, pending the closing
of the merger transaction, will be made up of Mr. Dewey, Mr. O'Donnell, as
Chairman of Simione, and David Ellis, Managing Director of EGL Holdings, Inc., a
large shareholder of Simione. Dr. Ellis is a nominee to join the board of
directors of Simione after the closing of the merger. Mr. Dewey is a nominee to
join the board of directors of Simione after the closing of the merger, as a
designee of the MCS stockholders. Mr. Dewey will remain Senior Vice President
and Secretary of Mestek, allocating up to 75% of his time to tasks at Simione
and the balance to his work with Mestek concentrating in its metalforming
machinery segment.

On September 13, 1999, the board of directors of Mestek approved the
spin-off of MCS shares on a pro-rata basis to Mestek's stockholders as of a
record date to be fixed at a later date by the executive committee of the board.

THE SECOND AMENDMENT. On October 25, 1999, the Second Amended and Restated
Agreement and Plan of Merger and Investment Agreement was executed among
Simione, MCS, Mestek and three major stockholders of Mestek. The second amended
merger agreement was entered into to clarify provisions in the merger agreement
relating to the appointment of designees of the MCS stockholders and designees
of Simione to Simione's board of directors during the 18 month period after
completion of the merger and the right of a majority of the MCS designees to
remove any MCS designee from the board during the 18 month period.

ADDITIONAL FUNDING. On November 1, 1999, Mr. Dewey presented forecasts and
preliminary results of operations of Simione for the third quarter to Mr.
O'Donnell of Simione and John E. Reed of Mestek. Mr. Dewey expressed concern
that Simione might need additional funding pending the closing of the merger.
Mestek was asked and declined to advance further funds to Simione until the
merger was completed. Mestek expressed an interest in loaning additional funds
only if Simione stockholders loaned a significant amount and if the interest
rate and other terms of the loan were satisfactory to it.

On November 9, 1999, when the board of Simione reviewed the results of
operations for the third quarter, the expected date for closing the merger and
continued softness in the home health care market (at least until the proposed
amendments to the Balanced Budget Act of 1997 were passed or voted down), it
became apparent that further funding was needed to meet the business
requirements of Simione. Management presented a plan that effected expense
reductions prior to and after the merger and set forth expected revenue events
that could bring the cash flows to breakeven at the end of the first quarter

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2000. After considering the options of Simione and Mestek's reluctance to
accelerate funding prior to the merger, the Simione board asked management to
negotiate further debt or preferred equity funding from existing corporate or
institutional stockholders or their principals.

Mestek had previously expressed a reluctance to loan further funds without
a material funding commitment from Simione insiders. Subsequently Dr. Ellis
agreed to loan $250,000 to Simione for nine months. Mr. O'Donnell agreed to loan
$500,000 to Simione for 24 months. Both loans have an interest rate of 9%. In
addition, Mr. O'Donnell and Mr. Bremer agreed to defer cash payments for
severance and deferred wages until 2001. Mestek agreed to loan $850,000 to
Simione at an interest rate of 11%. The Mestek loan is convertible into
Simione's Series C Preferred Stock. See "The Merger and Investment Agreement --
Mestek Loans" beginning on page 72 for a description of the Mestek loan and the
Series C Preferred Stock.

In late December 1999, after it became apparent that the merger could not
be completed by the January 9, 2000 deadline, representatives of Mestek, MCS and
Simione discussed extending this deadline. The parties agreed that it was not
necessary to enter into a formal amendment to the merger agreement for this
purpose, but agreed that the merger would not be terminated under the deadline
provision if the merger is closed by March 1, 2000.

On February 3, 2000 the Simione Board met with John E. Reed of Mestek and
Bruce Dewey, CEO of Simione, and discussed Simione's short-term financing needs.
The parties agreed that Mestek would immediately advance an additional $1
million of the total approximately $6 million Mestek's Series B Preferred Stock
investment. The Simione board decided that it was in the best interest of
Simione and its stockholders to accept this loan to provide liquidity to Simione
pending the completion of the merger. On February 4, 2000, Simione signed a $1
million promissory note in favor of Mestek, with an interest rate of BankBoston
prime plus 2% and a maturity date of June 30, 2000. This $1 million loan,
together with the $3 million loan dated September 9, 1999, plus accrued
interest, will be forgiven at the closing of the merger as part of Mestek's
investment in the Series B Preferred Stock.

REVERSE STOCK SPLIT. In January 2000, Nasdaq notified Simione that it
viewed the MCS merger and related transactions as a "change in control" under
Nasdaq rules which requires Simione to file a new listing application and
satisfy the initial listing requirements to remain listed on the Nasdaq National
Market. Nasdaq also noted that Simione did not satisfy these requirements. After
consultation with counsel, Simione decided to appeal Nasdaq's ruling on this
matter and to initiate the reverse stock split to satisfy Nasdaq's minimum bid
price requirements and to achieve the other benefits described in "Proposal 5
for Simione Stockholders -- Reverse Stock Split Proposal" at page 181. The
Simione board approved the reverse stock split proposal at a meeting held on
February 3, 2000. Simione determined that the proposal to amend the certificate
of incorporation to increase the number of authorized shares would not need to
be implemented if the reverse stock split were completed.

The merger agreement provides that listing of the merger shares on the
Nasdaq National Market is a condition to MCS' obligation to close the merger. On
February 4, 2000, the parties agreed informally that a listing on the Nasdaq
SmallCap Market would satisfy this condition, and that the deadline to close the
merger would be extended to March 10, 2000.

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RECOMMENDATION OF THE SIMIONE BOARD AND REASONS FOR THE MERGER

The Simione board:

- has unanimously approved the merger agreement;

- has unanimously determined that the merger is fair to and in the best
interests of Simione and its stockholders; and

- unanimously recommends that the holders of shares of Simione common
stock vote for adoption of the merger agreement.

The Simione board's decision to approve the merger agreement and the merger
was based in significant part upon its assessment of the trends developing in
the home health care information systems market, Simione's performance over the
last two years, and the additional demands which would be placed on Simione as a
result of increasing competition, consolidation and customer demands. The
Simione board compared the benefits and associated risks of the merger with
those of continuing as a stand-alone company, as well as the benefits and risks
of attempting to find another potential merger partner. The merger with MCS was
viewed by the Simione board as being preferable to these alternatives for a
number of reasons which are explained below.

Simione has experienced financial difficulties, as reflected by its
performance over the past two years and resulting limited capital resources.
Simione's board decided that, given Simione's limited capital resources as well
as the risks associated in attaining profitability on an independent basis, the
merger with MCS was a better alternative for the Simione stockholders.

Simione, after the merger of CareCentric, is being combined with MCS in an
attempt to leverage each of the companies' existing customer bases, personnel
and expertise and knowledge of the business of home health providers, in order
to create a market leader in producing information technology products, services
and solutions for the alternate-site health care market. The alternate-site
health care market includes retail pharmacies, home health agencies and
providers of home medical equipment, private duty nursing, IV and respiratory
therapy, rehabilitation equipment, hospice services and long-term and assisted
living care.

In its meetings to discuss the merger, the board considered that the MCS
merger will bring Simione the following resources:

- approximately 570 home medical equipment, home health agency and IV
therapy providers as customers utilizing the MestaMed system;

- experienced personnel with knowledge about the operations and information
technology needs of home medical equipment providers;

- experienced home medical equipment billing and reimbursement consultants
through MCS' management services division;

- an ability to develop computer-based training programs to train employees
and customers in the support and operation of software;

- knowledge content related to care plans and outcomes management developed
in the clinical assistant function of MestaMed that can be used with
other point of care programs;

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- a program to increase customer satisfaction and the efficiency of
customer support that can be used by all of Simione's existing customer
support providers;

- a proven comprehensive software product in MestaMed that is desirable for
home medical equipment providers and those providers who integrate home
medical equipment, IV and/or home health agency operations;

- an experienced operations crew that has evidenced an ability to generate
profits; and

- an additional cash infusion from the Mestek investment of approximately
$6 million, including the immediate loan of $3 million by Mestek to
Simione (later increased by an additional $1 million loan).

The Simione board also considered a potential merger with MCS to be
complementary with Simione's long-term objectives and to provide an opportunity
to attain the following potential strategic benefits:

- The combination of MCS' and Simione's complementary information systems
technologies provides an opportunity for the combined company to offer a
more complete line of products.

- The broader and more complete product offering that will be available
from the combined company will provide potentially increased
cross-selling opportunities with Simione's and MCS' customers.

- Given the technology of the two companies, the combined company will be
able to better address customer needs by creating new product offerings
for home health care information system projects that neither company
could have created on its own. The board concluded that this factor and
the first two above could help Simione to increase revenues to a
profitable level.

- The combined entity could streamline overhead and eliminate duplicative
functions. This factor was considered important to the board given
Simione's ongoing efforts to cut costs to achieve profitability.

- The combined entity could benefit from the systems and personnel that the
combined entity could bring to bear in the home health care information
system market. The board concluded that the expanded systems and
personnel were necessary to make Simione competitive.

- The combination of Simione and MCS would create a combined company with
significantly greater resources and greater sales and marketing
capabilities than those of Simione alone and might enable Simione's
products to compete more effectively with products of competitors in the
consolidating and rapidly changing home health care information system
market. The board concluded that these greater resources were necessary
to remain competitive. The board also noted that MCS had positive cash
flow and earnings, which should help strengthen the combined company's
financial results.

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- MCS' market presence, relatively large customer base and broad sales and
distribution network offer expanded sales and marketing opportunities for
Simione's products. The board concluded that a broader customer base was
needed for Simione's products.

In the initial discussions of the merger between the managements of Mestek
and Simione, it became clear that Mestek desired to retain the ProfitWorks
business, and that Simione was not particularly interested in ProfitWorks
because it did not fit well within Simione's business plan. When Simione's
management presented the merger proposal to the board of Simione, they explained
Mestek's desire to retain ProfitWorks. The board did not consider this a
significant term of the proposal because ProfitWorks was a small part of the
overall MCS business and it did not present any strategic advantage to Simione.

In the course of its deliberations, the Simione board reviewed with
Simione's management a number of other factors relevant to the merger. In
particular, the Simione board considered:

- The financial and other terms of the proposed merger agreement, which the
Simione board determined were reasonable after consultation with its
legal advisors. The Simione board concluded that the terms of the
agreement were in the best interests of Simione stockholders.

- The likelihood of realizing superior benefits through alternative
business strategies, including remaining a stand-alone company. The
Simione board concluded that remaining a stand-alone company was not
optimal due to the competitive market and the need for greater resources.

- The compatibility of the management and businesses of Simione and MCS.
The Simione board concluded that the managements of the two companies
shared a common vision of the future of the market and that the
businesses were compatible in terms of their product offerings.

- The detailed financial analysis presented by Gross Collins, including the
opinions of Gross Collins dated April 26, 1999 as to the value of each of
Simione and MCS, and the relative values of the two companies. The Gross
Collins analysis indicated that the exchange ratio that was to be used in
the merger agreement was a reasonable allocation of the value of the
combined company between the stockholders of the two combining companies.
The Simione board determined that the Gross Collins analysis supported
the board's overall conclusion that the financial terms of the merger
were fair to the Simione stockholders.

The board considered it important that both parties to the merger should be
committed to closing the transaction. To hold the deal in place pending closing,
protective provisions were included in the merger agreement with the concurrence
and approval of the management and the Simione board. These provisions include a
"no shop" clause that prohibits solicitation of third party bids or acceptance
of unsolicited bids, and termination fees if either party refuses to close on
the transaction. The board concluded that these provisions were advantageous to
Simione stockholders because they will increase the likelihood that the
transaction will be successfully completed.

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The Simione board also considered a number of risks that could potentially
arise in connection with the merger, including:

- The potential disruption of Simione's business that might result from
employee, distributor and customer uncertainty and lack of focus
following announcement of the merger in connection with integrating the
operations of Simione and MCS.

- The possibility that the merger might not be consummated.

- The effects of the public announcement of the merger on Simione's sales
and operating results and its ability to attract and retain key
management, sales, marketing and technical personnel.

- The risk that the announcement of the merger could result in decisions by
customers to defer purchases of products or services of Simione or MCS.

- The risk that the price of Simione common stock might decline after the
closing of the merger, given the dilution from the issuance of the shares
of Simione common stock to MCS stockholders and the presence of
registration rights with respect to the shares issued to the MCS major
stockholders.

- The risk that the combined companies would not successfully integrate
their products and operations.

- The risk that the other benefits sought to be achieved by the merger
would not be achieved.

- The other risks set forth in Simione's and Mestek's independent filings
with the SEC.

The Simione board concluded that these risks were outweighed by the
benefits of the merger. In view of the wide variety of factors, both positive
and negative, considered by the Simione board, the Simione board did not find it
practical to, and did not, quantify or otherwise assign relative weights to the
specific factors considered.

In September 1999 the Simione board considered the proposed amendment to
the merger agreement. The board confirmed that the strategic benefits and other
factors discussed above continued to provide a compelling conclusion that the
merger was fair to Simione and its stockholders. In addition, the Simione board
considered these factors:

- The continued weakness in the home health care market;

- Simione's continuing operating losses;

- Simione's need for additional capital and liquidity;

- Mestek's proposed investment of approximately $6 million and proposed
loan, including immediately advancing $3.0 million (later increased by an
additional $1 million advance); and

- The closing of the merger would increase the availability of Simione's
line of credit by approximately $1.6 million.

The Simione board concluded that the merger amendment was in the best
interests of Simione and its stockholders due to the board's continued
commitment to the merger as originally envisioned and Simione's need for
additional capital and liquidity.

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After careful negotiation of the terms of the amendment by David Ellis on
behalf of Simione, and consultation by management with counsel, the board
concluded that the terms of the amendment were fair to Simione and its
stockholders.

After taking into consideration all of the factors set forth above, the
Simione board believes that the merger is in the best interests of Simione and
its stockholders and recommends adoption of the merger agreement.

INTERESTS OF OFFICERS AND DIRECTORS OF SIMIONE

In considering the Simione board's recommendation that you vote in favor of
the merger, you should be aware that officers and directors of Simione have
interests in the merger that are different from, or in addition to, the
interests of Simione stockholders. For example:

- Mr. R. Bruce Dewey, Chief Executive Officer of Simione, was a director of
MCS prior to August 14, 1999, and will:

-- continue as Simione's Chief Executive Officer and President;

-- retain his position as Senior Vice President and Secretary of Mestek;

-- receive from Mestek options to purchase 150,000 shares of Simione
common stock if the merger is completed;

-- receive from Simione options to purchase 150,000 shares of Simione
common stock;

-- receive 307 shares of MCS common stock in the spin-off, which shares
will be converted into Simione common stock; and

-- become a director of Simione, if the merger is completed.

- The Office of the Chairman of Simione will consist of Mr. Dewey, Barrett
C. O'Donnell, Chairman of the Board of Simione, and David O. Ellis, a
large stockholder and board nominee of Simione.

- In connection with the Mestek loan, made in advance of the completion of
the merger, Simione received loans from David Ellis and Barrett
O'Donnell, as described at "The Merger and Investment Agreement -- Mestek
Loans" beginning on page 72.

- Daniel J. Mitchell, a director of Simione, beneficially owns 373,669
shares of Simione Series A Preferred Stock to be converted into Simione
common stock.

- Jesse I. Treu, a director of Simione, beneficially owns 777,120 shares of
Simione Series A Preferred Stock to be converted into Simione common
stock.

RECOMMENDATION OF THE MCS BOARD AND REASONS FOR THE MERGER

The MCS board has unanimously approved the merger agreement, determined
that the merger is fair to and in the best interests of MCS and its stockholders
and recommends that holders of shares of MCS common stock vote for adoption of
the merger agreement.

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The approval of the merger agreement by the MCS board was based upon its
conclusion that the terms of the agreement are fair to MCS and that the sale of
MCS on such terms are in the best interests of MCS. In reaching such conclusion,
the MCS board, in consultation with its management and its financial and legal
advisors and consultants, considered and relied upon a number of factors,
including the following:

- The combination of MCS' and Simione's complementary information systems
technologies provides an opportunity for the combined company to offer a
more complete line of products.

- The broader and more complete product offering that will be available
from the combined company will provide potentially increased
cross-selling opportunities with Simione's and MCS' customers.

- Given the technology of the two companies, the combined company will be
able to more efficiently address customer needs by creating new product
offerings for home health care information system projects that neither
company could have created on its own.

- The combined entity could streamline overhead and eliminate duplicative
functions.

- The combined entity could benefit from the systems and personnel that the
combined entity could bring to bear in the home health care information
system market.

- The merger of Simione and MCS would create a combined company with
significantly greater resources and greater sales and marketing
capabilities than those of MCS alone and might enable MCS' products to
compete more effectively with products of competitors in the
consolidating and rapidly changing home health care information system
market.

- The financial analysis and opinions presented by Gross Collins with
respect to the value of each of Simione and MCS, and the relative values
of the two companies. In this regard, the MCS board noted the decision of
the parties to the merger to accept the valuation of Gross Collins as
determinative for purposes of the merger agreement.

The MCS board also considered a variety of negative factors associated with
the merger, primarily:

- Simione's continued decline in sales.

- The risk that the price of Simione common stock might decline prior to
the closing of the merger, thus reducing the aggregate value to be
received by MCS stockholders, given the volatility that the price of
Simione common stock has experienced, with market prices closing within a
range of $15 1/2 to $1 1/4 per share over the period from April 1998 to
April 1999.

- The possibility that the companies could fail to successfully mix
cultures, and thus could fail to achieve the expected synergies.

- The difficult business climate in the home health care industry.

- The loss of control of MCS after the merger.

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- Potential disruption to MCS' business.

- The difficulty of integrating products.

- The difficulty of developing or acquiring next generation software
products.

The MCS board did not consider those factors in the aggregate to outweigh
the merits of the transaction.

The MCS board was later asked to consider the proposed amendments to the
Plan and Agreement and Plan of Merger. At that time, the MCS board reconsidered
a number of factors listed above, and also considered a number of other factors
in weighing its decision to recommend adoption of the merger by the
stockholders. The MCS board confirmed that the factors listed above continued to
provide a clear basis for the merger. Other factors in favor of proceeding with
the merger which were considered at the later board meeting include:

- After the merger, the MCS stockholders and Mestek will have control of
more than 50% of the voting securities of the combined company, and more
than 50% of its board seats, and operational control of the combined
company will be vested in an officer of Mestek.

- The MCS board believed that with the issuance of revised reimbursement
rules from the federal government for home health agencies due in the
year 2000, customers in the home health field may require new software to
implement these changes, including software provided by the combined
company, and that the new reimbursement rules will reduce or eliminate
the current negative revenue trends in the home health industry.

- The MCS board also believed that as a result of the merger, the combined
company will be in a position to offer to its expanded customer base in
the home health industry the most complete and comprehensive line of
automated solutions.

- The MCS board further determined that as a result of the $3 million
investment in Simione by Mestek, selected workforce reductions and
consolidation of redundant facilities, the financial position of Simione
appeared to have stabilized.

The MCS board also considered additional negative factors in assessing
whether to recommend the merger to the MCS stockholders, including:

- Several businesses and products of Simione have been recently acquired
and will require additional management support to integrate these
businesses and products; however, this integration effort should result
in positioning the combined company after the merger in a leading
position with respect to automation and software sales to the home health
market.

- The MCS board considered the relative performances of Simione and MCS
since the financial analysis of Gross Collins was performed in April
1999. The MCS board discussed the fact that the relative value of Simione
had decreased since that time and the relative value of MCS had
increased; however the MCS board reiterated the earlier decision of the
parties to the merger to accept the valuation of Gross Collins as
determinative for purposes of the merger agreement.

- The effect of the current reimbursement rules on the home health care
industry generally has adversely impacted Simione, which is more
dependent on this

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segment of the market than is MCS; however, as stated previously, the MCS
board believed that the new home health reimbursement rules due for
issuance in 2000 will result in sales increases for software providers,
including the combined company, to address the new reimbursement rules.

The MCS board did not find it practical to, and did not, quantify or
otherwise assign relative values to the specific factors associated with the
merger. The MCS board recognized that Simione's stock price could fluctuate and
change the nominal value of the consideration to be paid for MCS by Simione.
Therefore, the MCS board did not establish any range of value for this
consideration but focused on the exchange ratio.

INTERESTS OF OFFICERS AND DIRECTORS OF MCS AND MESTEK

In considering the MCS board of directors' recommendation that you vote for
the merger, you should be aware that the officers and directors of MCS have
interests in the merger that are different from, or in addition to, their rights
as MCS stockholders. For example:

- John E. Reed, Stewart B. Reed, Winston R. Hindle, Jr. and David W.
Hunter, officers and directors of MCS, have been nominated by the MCS
board to serve as designees to the Simione board;

- John E. Reed owns 20,000 shares of Simione common stock and Mr. Hindle
owns 10,000 shares of Simione common stock;

- Simione anticipates that it will employ the current operating officers of
MCS after the merger;

- John E. Reed, President and Chief Executive Officer of Mestek and
Chairman of MCS, will have effective control over approximately 52% of
Simione's total voting power after the merger and will be able to control
most matters submitted to a vote of the stockholders of Simione including
the election of directors; and

- Bruce Dewey, Senior Vice President of Mestek and formerly a director of
MCS, will continue to serve as Chief Executive Officer of Simione. Mr.
Dewey has been nominated by the MCS board to serve as a designee to the
Simione board. Simione has granted Mr. Dewey an option to purchase
150,000 shares of Simione common stock. In addition, Mestek will transfer
to Mr. Dewey options received from Simione to purchase 150,000 shares of
Simione common stock if the merger is completed. See "Executive
Compensation -- Compensation Committee Report on Executive Compensation"
on page 190.

OPINION OF FINANCIAL ADVISOR -- HLB GROSS COLLINS

VALUATION OF MCS AND SIMIONE FOR MERGER AGREEMENT

On April 7, 1999, Simione and Mestek engaged HLB Gross Collins, P.C., CPAs,
to render an opinion as to the valuation of each of Simione and MCS, and the
relative values on a percentage basis in any merger or business combination.

At an April 26, 1999 meeting with Mr. O'Donnell and Mr. Dewey, Gross
Collins delivered its oral opinion, later confirmed in writing, regarding the
valuation of Simione and MCS. Simione and MCS reviewed the Gross Collins report
and calculated an exchange ratio to determine the number of shares of Simione
common stock that would be

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issued to MCS stockholders upon closing of a merger transaction. The exchange
ratio is based upon a mathematical formula, the core element of which is the
ratio of the value of Simione to the value of MCS, as determined by Gross
Collins. This ratio is 21.0/17.8. The mathematical formula used to calculate the
exchange ratio is more fully described in "The Merger and Investment
Agreement -- Exchange of Shares" on page 69. Simione and Mestek did not impose
any limitations on Gross Collins with respect to the investigations made or
procedures followed in rendering its opinion.

The Gross Collins opinion is addressed to the Simione board and the Mestek
board and does not constitute a recommendation to any Simione stockholder or MCS
stockholder as to how any stockholder should vote at the Simione or MCS special
meeting. In addition, the opinion of Gross Collins is not an opinion of the
fairness, from a financial point of view, of the transaction to the Simione or
MCS stockholders. Moreover, stockholders should not view the Gross Collins
opinion, which was prepared and delivered in April 1999, as an indication of the
then current market value of either Simione or MCS. Rather, stockholders should
consider the Gross Collins opinion as a tool used to arrive at a calculation of
the relative values of Simione and MCS at the time the opinion was rendered,
because the two companies could not reach agreement themselves on such a
calculation. Without this agreed upon calculation, the parties could not have
successfully negotiated a definitive merger agreement.

Gross Collins has informed Simione that in arriving at its opinion, Gross
Collins:

- Reviewed publicly available financial and other data with respect to
Simione and Mestek, including the consolidated financial statements for
Mestek and Simione for the years ended December 31, 1998, 1997 and 1996,
financial statements for the quarter ended March 31, 1999 for Simione and
Mestek, and other relevant financial and operating data relating to
Simione and MCS made available to Gross Collins from published sources
and from the internal records of Simione and Mestek;

- Reviewed internal financial statements of MCS for the years ended
December 31, 1998, 1997 and 1996 and internal financial statements of MCS
for the quarter ended March 31, 1999, made available to Gross Collins
from internal records of MCS and Mestek;

- Reviewed publicly available information concerning the trading of, and
the trading market for, the Simione common stock and Mestek common stock;

- Compared Simione and MCS from a financial point of view with companies in
the home health care software industry which Gross Collins decided were
comparable;

- Considered the financial terms, to the extent publicly available, of
selected recent business combinations of home health care software
companies and the larger software sector which it deemed to be
comparable, as identified below; and

- Reviewed and discussed with representatives of the management of Simione
and MCS information of a business and financial nature regarding Simione
and MCS, including confidential financial forecasts.

In preparing the Gross Collins opinion, Gross Collins did not assume any
obligation independently to verify the financial and other information reviewed
by it for purposes of its opinion and relied on its accuracy and completeness in
all material respects. With respect to the financial forecasts for Simione and
MCS provided to Gross Collins by management, Gross Collins assumed for purposes
of its opinion that the forecasts, including the assumptions regarding potential
operational efficiencies, were reasonably

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prepared on bases reflecting the best available estimates and judgments by
management at the time of preparation. Gross Collins also assumed that these
forecasts provided Gross Collins a reasonable basis upon which Gross Collins
could form its opinion. Gross Collins assumed that there had been no material
changes in Simione's or MCS' assets, financial condition, results of operations,
business or prospects since the respective dates of their last financial
statements made available to Gross Collins. Gross Collins relied upon the advice
of counsel and independent accountants to Simione as to all legal and financial
reporting matters with respect to Simione, the merger and the merger agreement,
including the legal status and financial reporting of litigation involving
Simione.

Gross Collins also assumed that the merger will be consummated in a manner
that complies in all respects with all applicable federal and state statutes,
rules and regulations.

In addition, Gross Collins did not make an independent evaluation,
appraisal or physical inspection of any of the assets or liabilities, whether
contingent or otherwise, of MCS or Simione, and was not furnished with any such
appraisals.

The Gross Collins opinion is based on economic, financial and securities
market and other conditions as in effect on, and the information made available
to it, as of April 26, 1999. It has not been updated to reflect changes since
April 26, 1999.

Set forth below is a brief summary of material financial analyses performed
by Gross Collins in connection with rendering the Gross Collins opinion.

VALUATION OF MCS

Market Approach -- Public Company Comparison

In the public company comparison, Gross Collins used market values of
publicly traded companies that were considered to be similar to MCS to estimate
the possible market value of MCS if MCS' shares were traded on a free and open
market. Market-based valuation ratios or multiples are calculated from the
comparable companies, adjusted for relative differences, and are applied to the
subject entity to indicate value.

Using public and other available information, Gross Collins analyzed a
comprehensive list of publicly traded companies. In conducting its analysis
Gross Collins reviewed information and data of more than 75 other software
companies. From among these comparable companies, Gross Collins then selected
the following ten companies. The companies against whose data and ratios MCS'
data and ratios were compared include:

Cerner Corporation
Dynamic Health Technologies, Inc.
InfoCure Corporation
Quality Systems, Inc.
Medical Manager Corporation
Eclipsys Corporation
IDX Systems Corporation
Medaphis Corporation
QuadraMed Corporation
SunQuest Information Systems, Inc.

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Gross Collins determined that the following market multiples applied to the
most recent trailing twelve months earnings and estimated future earnings for
the next 12 months were most appropriate:

- Price to earnings -- the ratio of the aggregate market value of equity to
adjusted net income.

- Invested capital to net revenues -- the ratio of the aggregate market
value of invested capital to net revenues.

- Invested capital to earnings before depreciation, interest and taxes
(EBDIT) -- the ratio of the aggregate market value of invested capital to
EBDIT.

All multiples for the ten selected companies were based on closing stock
prices as of March 31, 1999 and, with respect to estimates of future earnings
performance for those companies, on analyst reports and other publicly available
information. Gross Collins then applied selected valuation multiples to MCS
based on a comparison of MCS to the guideline company to indicate the value of
MCS as if publicly traded. The control premium of 40% was estimated by analyzing
the premiums at which similar public companies were acquired over the past three
years. The implied valuations using trailing twelve months data and estimated
year forward data were then averaged and then adjusted upward using the control
premium to arrive at an equity value of $18.2 million.

Market Approach -- Transaction Comparison

In this form of the market approach, the value of a company is estimated by
analyzing transactions in the marketplace involving the sale of entire companies
engaged in operations similar to those of the subject company. These market data
are adjusted for significant differences between the acquired companies and the
subject company and to account for specific details regarding the transactions.

Gross Collins examined the consideration paid, to the extent publicly
available, in a number of acquisitions of similarly situated companies. The
transactions reviewed for this analysis included 15 acquisitions completed or
announced between December 9, 1996 and March 30, 1999. A total of 15 comparative
transactions, where entire companies were acquired in arm's-length acquisitions,
were used in the valuation analysis. The companies acquired included the
following:

<TABLE>
<S> <C>
GMIS Inc. Micro-Software Designs, Inc.
Dynacor Inc. Informedics Inc.
AMISYS Managed Care Systems,
Inc. IMNET Systems, Inc.
Enterprise Systems Inc. Transition Systems, Inc.
PHAMIS Inc. HBO & Company
Medicus Systems Corporation OMSystems, Inc.
Professional On-line Computer, Pharmaceutical Marketing
Inc. Services, Inc.
ENVOY Corporation
</TABLE>

Gross Collins reviewed many sources including electronic databases, Forms
8-K and 10-K of public companies, press releases and other sources to locate
recent comparable transactions that could be used to benchmark the value of
Simione and MCS. These comparative transactions were chosen because the acquired
companies were similar to

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Simione and MCS and sufficient data was available on each transaction to
calculate certain valuation multiples. While not identical to Simione and MCS,
almost all of the acquired companies offered similar products and services, and
some were even similar in size and financial performance. Since the parties to
the transactions were unrelated, the total consideration and the resulting
valuation multiples (total consideration to revenue, earnings, and other similar
measures) provided indications of the value willing buyers and willing sellers
place on similar companies.

While the quantity and quality of the data from the comparative
transactions appeared to be sufficient, the results from this analysis were not
meaningful. The valuation multiples indicated by the comparative transactions
varied significantly from any central tendency. As a result the values
calculated for MCS from these wide-ranging multiples also varied significantly
producing less than meaningful results. Therefore these transactions were
considered but not utilized in arriving at a conclusion of value for Simione and
MCS.

Income Approach -- Discounted Cash Flow Analysis

The income approach explicitly recognizes that the current value of an
investment is premised upon the expected receipt of future economic benefits
such as earnings or cash flow. In using this approach, indications of value are
developed by discounting to present value future returns available for
distribution to investors at a rate that reflects both the current return
requirements of the market and the risks inherent in the specific investment.
The underlying concept of this valuation method is that the inherent value of a
company's stock is directly related to the amount and timing of returns to be
derived from this business in the future.

Gross Collins performed a discounted cash flow analysis for MCS based on
estimates of MCS' financial results for the fiscal years 1999 through 2002.
These estimates were based on projections and guidance provided by MCS
management. The analysis aggregated:

(a) the net present value of the projected debt free cash flow from
1999 through 2002; and

(b) the net present value of the estimated terminal value of the debt
free cash flow for the year 2003.

Gross Collins determined an appropriate discount rate of 23% for the
discounted cash flow analysis. The discount rate was estimated by weighting at
the estimated industry capital structure the cost of equity capital and the cost
of debt capital. The cost of equity capital was estimated using a "build-up"
approach known as the Capital Asset Pricing Model. Such analysis indicated a
$17.4 million implied equity value of MCS.

The implied values from the market and income approaches were averaged to
arrive at an equity valuation of MCS of $17.8 million.

VALUATION OF SIMIONE

Market Approach -- Market Capitalization

This form of the market approach is appropriate when the subject company is
a publicly-owned entity with an active trading market. The price per share of
the subject company is multiplied by the total number of shares issued and
outstanding to arrive at the

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value that the market has established for the company's equity. Because this
approach relies on per share pricing data, the indicated value of the equity is
on a minority basis. Consequently, a control premium is applied to adjust the
equity value to a controlling basis. Total interest bearing debt is then added
to the controlling basis equity value to arrive at the total invested capital,
or business enterprise value, of the subject company.

Gross Collins computed the market value of Simione's equity, on a minority
basis, at $15.0 million, by multiplying the company's 8,554,673 shares of common
equity, issued and outstanding at March 31, 1999, by its closing price per share
of $1.75 at March 31, 1999. This minority basis value indication was then
adjusted to a controlling basis by applying an appropriate control premium. The
control premium of 40% was estimated by analyzing the premiums at which similar
public companies were acquired over the past three years. Next, total interest
bearing debt at March 31, 1999 of $5,825 was added to the controlling basis
value indication to arrive at the total value of $21.0 million.

Exchange Ratio Analysis

Based upon the implied values of MCS at $17.8 million and of Simione at
$21.0 million, Gross Collins concluded that the exchange ratio based upon the
relative values of the two companies was 46% MCS and 54% Simione. Simione and
Mestek used the ratio of these two values, which was adjusted for the number of
shares of Simione common stock and MCS common stock outstanding, to determine
the number of shares of Simione common stock that would be exchanged for each
share of MCS common stock.

Pro Forma Financial Analysis

Gross Collins analyzed pro forma effects resulting from the merger,
including, among other things, the impact of the merger on the projected
earnings per share and the projected rate of revenue growth of the combined
company for the fiscal year 1999. Such analysis included the effect of cost
savings that the combined company may realize in its operations, based on
guidance provided by the managements of Simione and MCS. The pro forma analysis
suggested that the combined companies would have earnings in 1999, as opposed to
losses projected for Simione, and they also suggested that the revenue of the
combined companies would grow at a more rapid rate than had been estimated for
Simione in 1999.

The preparation of an appraisal report is a complex process that involves
various determinations as to the most appropriate and relevant methods of
financial analysis and the application of these methods to the particular
circumstances. Several analytical methodologies were used and no one method of
analysis should be regarded as critical to the overall conclusion reached by
Gross Collins. The conclusions reached by Gross Collins are based on all
analyses and factors taken as a whole and also on application of Gross Collins'
own experience and judgment. These conclusions may involve significant elements
of subjective judgment and qualitative analysis. In addition, Gross Collins may
have given various analyses more or less weight than other analyses, and may
have deemed various assumptions more or less probable than other assumptions, so
that the ranges of valuations resulting from any particular analysis should not
be taken to be Gross Collins' view of the actual value of Simione, MCS or the
combined company.

In performing its analyses, Gross Collins made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Simione or MCS. The
analyses performed by Gross

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Collins are not necessarily indicative of actual values or actual future
results, which may be significantly more or less favorable than suggested by
such analyses. Such analyses were prepared solely as part of Gross Collins'
analysis of the relative values of the two companies and were provided to the
Simione board and the Mestek board in connection with the delivery of the Gross
Collins report. The analyses do not purport to reflect the prices at which a
company might actually be sold or the prices at which any securities may trade
at the present time or at any time in the future. Gross Collins used in its
analyses various projections of future results prepared by the managements of
Simione and MCS and by securities analysts. The projections are based on
numerous variables and assumptions which are inherently unpredictable.
Accordingly, actual results could vary significantly from those set forth in the
projections.

The actual results that Simione and MCS have achieved since April 1999 have
varied substantially from the estimates of these projected results used by Gross
Collins to arrive at a valuation of the two companies. In fact, a review of the
projected results contained in the report compared to the actual results as of
September 30, 1999 suggests that the relative value of Simione decreased and the
relative value of MCS increased during this period. This trend may continue
prior to consummation of the merger. The parties agreed at the time Gross
Collins was retained that the resulting valuations in April 1999 would be
accepted by the parties in calculating the relative values of Simione and MCS
and establishing the exchange ratio to be used in the Simione/MCS merger.
Therefore, the parties are not seeking a new valuation or a modification of the
exchange ratio, despite their knowledge of updated financial information
regarding the two companies.

As described above, the Gross Collins report and presentation to the
Simione board and the Mestek board were among the many factors taken into
consideration by the Simione board and the MCS board in making their
determination to approve, and to recommend that their stockholders adopt, the
merger agreement.

FEES

As provided in their engagement letter with Gross Collins, Simione and
Mestek paid Gross Collins a fee of $40,265 for the delivery of the April Gross
Collins report to the Simione board and the Mestek board. In its engagement
letter with Gross Collins, Mestek agreed to pay Gross Collins a fee at their
standard hourly rates for their additional analysis work described in the next
paragraph. The terms of the fee arrangements with Gross Collins, which Simione,
MCS, Mestek and Gross Collins believe are customary in transactions of this
nature, were negotiated at arm's length between Simione, MCS, Mestek and Gross
Collins, and the Simione board, the MCS board and the Mestek board were aware of
such fee arrangements.

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ADDITIONAL VALUATION ANALYSIS OF SIMIONE SECURITIES

On November 21, 1999, Mestek engaged HLB Gross Collins, P.C., CPAs, to
render an opinion as to the values of the various classes of Simione securities
to be received by Mestek and the MCS stockholders in connection with the
Simione/MCS merger, and their values relative to the value of all classes of
stock of the combined company. Specifically, the following interests were valued
in connection with the merger:

1. Simione Series B Preferred Stock;

2. Simione Series C Preferred Stock;

3. All equity interests of the combined company.

This information will be used by Mestek in connection with evaluating its
investment and determining the tax consequences to it of the spin-off and the
merger.

The interests in the combined company were valued using generally accepted
methodologies of the cost approach, the market approach, and the income approach
to valuation. The value of the Simione Series B Preferred Stock was estimated
from the value of the combined company on a control and marketable basis by
discounting the proportionate value in the combined company for the lack of
control and marketability inherent in the investment. The value of the Simione
Series C Preferred Stock was also estimated from the value of the combined
company on a control and marketable basis by discounting the proportionate value
in the combined company for the lack of control and marketability inherent in
the investment. Finally, the public market capitalization of the combined
company was estimated from the current trading price of Simione common stock on
the Nasdaq National Market System and our analysis of the other interests
identified above. The following table summarizes the results of the analyses by
Gross Collins for the equity interests as if the spin-off and merger occurred on
January 18, 2000. The valuation report and these conclusions will be updated by
Gross Collins to reflect actual conditions as of the date of the spin-off and
merger.

<TABLE>
<CAPTION>
INTEREST INDICATED VALUE
-------- -------------------------
<S> <C> <C>
Value of Simione Series B Preferred Stock................. $ 8,240,000
Value of Simione Series C Preferred Stock................. $ 1,250,000
Total Value of Equity Interests........................... $41,330,000
</TABLE>

Based on the exchange ratio in the merger agreement, the aggregate value of
the equity interests held by Mestek and the MCS shareholders after the spin-off
and merger as a percentage of the total value of all classes of equity of the
combined company is approximately 52.8 % assuming the merger occurred on January
18, 2000.

Mestek has agreed to pay Gross Collins a fee for the additional valuation
analysis based on Gross Collins' standard hourly rates. Gross Collins currently
estimates that this fee will be approximately $86,000.

The Gross Collins opinions are addressed to the Mestek board and do not
constitute recommendations to any Simione stockholder or MCS stockholder as to
how any stockholder should vote at the Simione or MCS special meeting.

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SELECTION OF GROSS COLLINS

Gross Collins was retained based on its experience as a valuation expert in
connection with mergers and acquisitions and in securities valuations generally.
The boards of directors of Simione and Mestek initially hired Gross Collins
because they wanted an independent firm to evaluate the relative values of
Simione and MCS after the companies could not agree amongst themselves on such a
calculation.

Gross Collins is an Atlanta-based recognized public accounting and
consulting firm. As part of its valuation business, Gross Collins is regularly
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, private placements and valuations for corporate and
other purposes.

THE MERGER AND INVESTMENT AGREEMENT

GENERAL

The merger agreement provides the legal framework for the merger between
MCS and Simione. It specifies the terms under which the merger will take place,
including:

- the terms under which the MCS shares will be converted and exchanged;

- restrictions on sales of Simione common stock received in the merger;

- the terms of Mestek's investment in Simione;

- the treatment of outstanding options and warrants of Simione;

- representations and warranties of the parties that specific circumstances
exist or that each party has complied with specific requirements;

- restrictions on the conduct of MCS and Simione pending the merger;

- additional agreements relating to matters such as registration rights,
employee benefit plans, tax and accounting treatment, and actions to
facilitate the consummation of the merger;

- conditions that must be satisfied before each party is obligated to
effect the merger; and

- the circumstances under which the merger agreement can be terminated and
the effect of such termination.

The following sections briefly summarize each of the above categories. For
a more complete understanding of the contents of the merger agreement, please
see the merger agreement itself which is attached as Appendix A.

EXCHANGE OF SHARES

In the merger, each share of MCS common stock will be exchangeable into
approximately 0.8520 shares of Simione common stock, as of the closing date of
the merger. The exchange ratio is based on the following mathematical formula:

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- the number of shares of Simione common stock outstanding on the effective
date of the merger,

- multiplied by .851851852,

- divided by the number of shares of MCS common stock outstanding on the
effective date of the merger.

The exchange ratio was derived by the parties based on the valuation
performed by Gross Collins by which the relative values of Simione and MCS were
fixed at $21.0 million and $17.8 million, i.e., 54% and 46% of the combined
enterprise without regard to the effect of the acquisition of CareCentric. The
.851851852 number is calculated by dividing 46% by 54%.

The exchange ratio is designed to determine the proper number of Simione
shares to be issued for each share of MCS held by the MCS stockholders so that
MCS stockholders receive approximately 46% of the Simione common stock
outstanding after the merger, or approximately 39% if the Series A Preferred
Stock is converted. The exact number of Simione shares to be issued can only be
calculated at the effective time of the merger, due to fluctuations in the
number of outstanding shares of common stock of the two companies as a result of
events which may reduce the number of shares outstanding and events which may
increase the number of shares outstanding, such as the issuance of shares as a
result of an exercise of stock options.

If the merger is completed, Simione will send transmittal letters to the
MCS stockholders. MCS stockholders who complete and sign the transmittal letters
and return them to Simione will receive stock certificates for the Simione
common stock to be distributed in the merger. The MCS stockholders should
receive these certificates within approximately three weeks after Simione
receives the signed transmittal letters.

MESTEK OPTION

Mestek was also granted a series of options to purchase a total of
approximately 1,943,708 shares of Simione common stock in the event outstanding
Simione options, warrants and other conversion rights are exercised. The number
of shares subject to Mestek's option represents the .851851852 ratio described
above multiplied by the number of outstanding Simione options, warrants and
conversion rights. These conversion rights represent 29,315 old Simione common
shares that have not been presented for conversion after Simione's one-for-two
reverse stock split effected in July 1997. As these options, warrants and other
conversion rights are exercised by Simione stockholders the same right vests
with Mestek on the same terms. This contingent right was designed to prevent
dilution of Mestek's ownership interest in Simione after the closing of the
merger.

RESTRICTIONS ON SALES OF MERGER SHARES

The shares of Simione common stock received by MCS stockholders in the
merger will be subject to a restriction on transfer. Generally, each MCS
stockholder receiving merger shares may not sell or otherwise dispose of any
merger shares without the prior written consent of Mestek, from the date of the
merger through the date that is two years after the effective date of the
merger. However, the restriction has an exception that allows transfers to
Mestek or any person which was a stockholder of MCS on the date of the spin-off.
In addition, during the lockup period the stockholders may not exercise any
registration rights with respect to any merger shares or any securities
convertible into or exchangeable or exercisable for any merger shares. The stock
certificates representing the

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merger shares will include a legend reflecting the lockup period restriction,
and a stop transfer order shall be placed with Simione's transfer agent.
Potential tax consequences to Mestek that may discourage it from granting
consent are described at "Federal Income Tax Considerations -- Federal Income
Tax Consequences to Mestek, MCS and Their Stockholders" beginning at page 87.

After the lockup period, you may sell your Simione common shares on any
exchange where Simione shares are located or sell, transfer, pledge, or
otherwise dispose of your Simione common shares.

MESTEK INVESTMENT

Under the merger agreement, Mestek will invest approximately $6 million in
Simione in exchange for the following Simione securities:

- 5,600,000 shares of Series B Preferred Stock, which will have
approximately 37% of the voting power of Simione after the merger,
assuming that the Series A Preferred Stock of Simione is converted; and

- A warrant to purchase 2,000,000 shares of Simione common stock at a per
share exercise price equal to the greater of $2.175 or the Nasdaq closing
price on the closing date of the merger, not to exceed $3.00 per share.

The Series B Preferred Stock will have the following terms:

- liquidation preference of $1.07143 per share;

- right to two votes per share on all matters voted on by Simione
stockholders;

- right to appoint an additional director to the Simione board if there is
a deadlock in the board for two consecutive board meetings;

- cumulative dividends at the rate of 9% of the $1.07143 per share original
issuance price per year; and

- the right to receive the same consideration as an outstanding share of
Simione common stock in the event of a change of control transaction.

A change of control transaction is a merger, acquisition or similar
transaction of Simione where voting control of Simione changes ownership.

In addition, for so long as Simione's Series B Preferred Stock remains
outstanding, in the event that Simione's board is unable to reach a decision on
a vote on any matter in two consecutive board meetings, the number of directors
shall be increased by one and the holders of the Series B Preferred Stock shall
have the right to appoint that new director.

The warrant will have the following terms:

- vested immediately upon issue date;

- three year term;

- exercise price equal to the greater of:

- $2.175 per share, or

- the Nasdaq closing price on the closing date of the merger, not to
exceed $3.00 per share;

- adjustment to the number of shares for stock splits, stock dividends, or
share reclassifications; and

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- right to participate in non-cash distributions to Simione common
stockholders for no additional consideration.

The approximately $6 million to be invested by Mestek into Simione will
consist of approximately $2 million in cash and $4 million in cancellation of
the $3 million and $1 million secured promissory notes from Simione to Mestek
dated September 9, 1999 and February 4, 2000. These notes represent a $3 million
loan made to Simione by Mestek at the time the amended merger agreement was
signed and a $1 million loan to Simione by Mestek in February 2000. See
"-- Mestek Loans" immediately below for a description of the terms of these
promissory notes.

The investment of approximately $6 million by Mestek arose in part due to
Mestek's proposal to spin-off MCS to the Mestek stockholders prior to completion
of the Simione/MCS merger. This led to a realization by the parties that the
closing of the merger transaction would be delayed, which in turn would delay
the availability of funds under Simione's line of credit. These delays made it
necessary for a cash infusion by Mestek in order to satisfy Simione's short-term
cash flow needs.

MESTEK LOANS

At the same time as the amendment to the merger agreement in September
1999, Mestek loaned $3 million to Simione under a secured promissory note. This
note bears interest at the BankBoston prime rate plus 2% per year and matures on
January 31, 2000. However, if the merger is not closed by January 31, 2000 and
this failure to close is not due to a breach of the merger agreement by Simione,
the maturity will be extended to the earlier of the actual closing date of the
merger or June 30, 2000.

In February 2000, Mestek loaned an additional $1 million to Simione under a
secured promissory note. This note bears interest at a rate of BankBoston prime
plus 2% and matures on June 30, 2000.

Upon the closing of the MCS merger, Mestek will contribute an additional $2
million, less accrued interest on the September 1999 and February 2000 notes,
and these notes will be cancelled, in return for 5.6 million shares of Simione
Series B Preferred Stock and a warrant to purchase 2 million shares of Simione
common stock.

In November 1999, Mestek loaned an additional $850,000 to Simione under a
secured convertible promissory note. The note bears interest at a rate of 11%
per year and matures in November 2002. At any time after the closing of the MCS
merger, Mestek may convert the note into 850,000 shares of Simione Series C
Preferred Stock. Mestek has informed us that it intends to convert the note upon
the closing of the merger. These shares of Simione Series C Preferred Stock will
be 2.7% of the voting power of Simione when issued. The Series C Preferred Stock
will have the following terms:

- a liquidation preference of $1.00 per share, junior in priority to the
liquidation preferences of the Series A and Series B Preferred Stock;

- right to one vote per share on all matters voted on by Simione
stockholders;

- cumulative dividends at the rate of 11% of the $1.00 per share
liquidation preference per year, junior in priority to dividend rights of
the Series A and Series B Preferred Stock; and

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- the right to receive the same consideration as an outstanding share of
Simione common stock in the event of a change of control transaction.

The purpose of these three loans was to provide working capital for Simione
pending the closing of the merger. All of these notes are secured by a security
interest in substantially all of the assets of Simione. However, the notes and
the security interest are subordinate to the loan with Simione's senior lender.
See "-- Mestek Investment" beginning on page 71 and "Background of the Merger"
beginning on page 46 for further description of the purpose and background of
these loans.

The terms of the two series of preferred stock are described in more detail
in the Certificates of Designations included as Appendices B and F.

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CHANGE IN OWNERSHIP OF SIMIONE

The following diagrams illustrate the change of voting control of Simione
which will occur as a result of the MCS merger. These diagrams assume the
conversion of the Series A Preferred Stock into Simione common stock and the
conversion of the Mestek note into Series C Preferred Stock after the merger.

SIMIONE TODAY

Total voting control of Simione common shares prior to the MCS merger:

Total 8,744,790

(Total Ownership of Shares Prior to Merger Chart)

MESTEK TODAY

The percentages in the following table reflect the present voting control
of Mestek, which will determine the total voting control of MCS common shares
after the spin-off but prior to the merger:

Total 8,743,103

(Total ownership of MCS shares after the spin-off but prior to the merger)

Mr. John E. Reed, Mr. Stewart Reed and Mr. Burk have agreed to vote all
shares controlled by them in favor of the merger.

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SIMIONE COMMON STOCK AFTER THE MERGER

Total voting control of Simione common shares after the MCS merger and the
Series A conversion:

Total 19,228,577

(Total Ownership of Shares Prior to Merger Chart)

VOTING CONTROL OF SIMIONE AFTER THE MERGER

Total Simione voting control of all classes of Simione stock after the MCS
merger, the Series A conversion and the Mestek note conversion:

Total 31,278,577

(Total Voting Power After Merger and Series A Conversion Chart)

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STOCK OPTIONS AND WARRANTS

All stock options and warrants of Simione and Mestek outstanding at the
effective time of the merger will remain outstanding and be unaffected by the
merger and the spin-off. As described in "-- Exchange of Shares" beginning on
page 69, Mestek will receive an option to purchase approximately 1,943,708
shares of Simione common stock.

MCS has no outstanding stock options and warrants. Mestek option holders
who exercise their options prior to the spin-off will receive MCS shares in the
spin-off. These MCS shares will be converted to Simione shares in the merger.
Mestek options which are not exercised prior to the spin-off will not be
convertible into Simione shares in the spin-off or the merger. Mestek currently
has approximately 175,000 outstanding options. If all of these options are
exercised prior to the spin-off, the option holders will receive approximately
149,000 shares of Simione common stock in the merger. Approximately 54,000 of
the Mestek options are currently vested; if all of these are exercised prior to
the spin-off, the option holders will receive approximately 46,000 shares of
Simione common stock.

REPRESENTATIONS AND WARRANTIES

The merger agreement contains various representations and warranties of the
parties. The representations and warranties, which are similar as to Simione, on
the one hand, and MCS, on the other hand, relate to a variety of matters. The
representations and warranties are designed to provide a snapshot of the
companies as they existed at the time of signing or will exist at the time of
closing and to serve a due diligence function. The following is a non-exclusive
list of categories of those representations and warranties:

- corporate power and standing:

-- confirmation that each company has the corporate power to conduct its
business and is in good standing in its state of incorporation;

- capital structure:

-- a summary of the authorized and issued capital stock of each company;

- litigation:

-- a summary of lawsuits pending against each company or its respective
assets;

- labor and employment:

-- confirmation that each company has been in material compliance with
labor and employment laws;

- tax:

-- confirmation that each company has paid all taxes due and has filed all
tax returns in a timely manner;

- insurance:

-- a listing of the insurance policies of each company;

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- intellectual property:

-- a listing of the owned software, licensed software and other
intellectual property of each company;

- liens and encumbrances;

-- confirmation that each company has title to all its assets, free of
liens and encumbrances, except for liens disclosed or reserved against
in its financial statements, liens, as to Simione, in favor of Silicon
Valley Bank and Mestek, or liens that are less than $100,000 in amount;

- Year 2000 compliance:

-- confirmation that each company's computer software is year 2000
compliant in all material aspects; and

- material contracts:

-- a listing of contracts for each company expected to involve the receipt
or expenditure of $25,000 or more during the one year period after the
closing.

Other representations and warranties involve the authority of the parties
to enter into the merger agreement, the enforceability of the agreement and
Simione's and MCS' stockholder vote and board of directors approval.

The merger agreement also contains representations and warranties of
Simione, and of Mestek and MCS, relating to the financial statements of Simione
and MCS, respectively, for the three most recent fiscal years and the accuracy
of the information they contain in accordance with generally accepted accounting
principles.

RESTRICTIONS ON THE CONDUCT OF MCS AND SIMIONE PENDING THE MERGER

The merger agreement contains several restrictions on the conduct of
Simione and MCS pending the merger. These restrictions are designed to commit
both companies to perform or to refrain from performing certain actions in the
period between the signing of the merger agreement and its closing, and
generally to keep the two companies in roughly the same positions they were in
when they signed the merger agreement. In general, the merger agreement provides
that MCS and Simione will, except as otherwise consented to or approved in
advance by the other party:

- operate their businesses in accordance with their ordinary course of
business and in a manner consistent with past practices;

- use reasonable efforts to preserve substantially intact their respective
business organizations;

- keep available the services of their present officers, key employees and
consultants; and

- preserve their present relationships with persons with whom they have
significant business relationships.

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The merger agreement lists several particular actions that MCS, and Simione
and its subsidiaries, have agreed not to take, pending consummation of the
merger, without the prior written consent of the other party, except as
otherwise required to consummate the MCS spin-off. Examples of these restricted
actions include the following:

- changing or amending organizational documents;

- taking actions with respect to the ownership interests of the parties,
such as issuing, pledging, or encumbering the ownership interests or
splitting, combining, or reclassifying any of their capital stock;

- taking actions with respect to the assets of the parties, such as
selling, pledging, disposing of or encumbering the assets or authorizing
major capital expenditures or purchases of fixed assets in excess of
$50,000 or outside the ordinary course of business;

- declaring, setting aside, making, or paying any dividends or
distributions with respect to their common stock;

- amending the terms of, repurchasing, redeeming, or otherwise acquiring
any of their securities;

- selling, transferring, licensing or otherwise disposing of, or amending
or modifying existing agreements with respect to, their intellectual
property;

- acquiring any business organization or division thereof;

- incurring indebtedness, except in the ordinary course of business, or
making loans except for credit transactions with customers on terms
consistent with past practice; and

- increasing compensation, entering into severance agreements or granting
severance pay, or entering into employment agreements or employee benefit
plans with or for the benefit of any current or former directors,
officers, stockholders or employees.

The merger agreement also provides that MCS and Simione shall not, without
the consent of the other, directly or indirectly solicit, encourage, negotiate,
approve, or recommend any inquiries or proposals regarding any merger, sale of
assets or stock, or similar transaction involving that party or any of its
subsidiaries before the effective time of the merger or the termination of the
merger agreement. This restriction is subject to the applicable fiduciary duties
of the respective directors of Simione and MCS.

TAX AND ACCOUNTING TREATMENT

The merger agreement provides that the parties will make reasonable efforts
to take all necessary actions to cause the merger to qualify as a tax free
reorganization. Conversely, the parties will not take any actions, either before
or after completion of the merger, which could prevent the merger from
qualifying for this tax treatment. The companies have determined that the merger
will be accounted for as a purchase transaction of Simione by MCS for financial
accounting purposes. Refer to "Accounting Treatment of the Merger" beginning on
page 84 for more details. For further descriptions on the tax treatment of the
merger, see "Federal Income Tax Considerations" on page 86.

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REGISTRATION RIGHTS

The merger agreement provides Mestek and John E. Reed, Stewart B. Reed and
E. Herbert Burk, MCS' three largest stockholders after consummation of the MCS
spin-off ("MCS Major Stockholders"), with demand and "piggyback" registration
rights with respect to the shares of Simione common stock the MCS Major
Stockholders will receive in the merger and the shares of Simione common stock
underlying the options that Mestek will receive in the merger.

Mestek or any of the MCS Major Stockholders can cause Simione to file a
registration statement for the resale of the MCS Major Stockholders' shares or
Mestek's shares after exercise of its options. Simione is required to pay the
expenses related to any registration. Mestek or any of the MCS Major
Stockholders can require a registration up to three times within six months to
two years after closing the merger, and require Simione to maintain the
effectiveness of each registration statement for up to two years.

Mestek or any of the MCS Major Stockholders also may participate in a
registered sale of Simione common stock initiated by Simione or another
stockholder.

The MCS Major Stockholders' and Mestek's registration rights shall be
senior to any rights granted after the date of the merger agreement, and Mestek
and the MCS Major Stockholders have agreed that the registration rights of the
former CareCentric stockholders will have equal priority with the MCS Major
Stockholders' and Mestek's rights.

FACILITATING THE MERGER

The merger agreement also provides that MCS and Simione will take or cause
to be taken, or use reasonable efforts to take or cause to be taken, actions to
facilitate the completion of the merger. Examples of such actions include:

- obtaining necessary consents;

- making necessary filings;

- affording reasonable access to the other party; and

- taking any other actions that are necessary, proper, or advisable to
complete the transaction and make the merger effective as promptly as
practicable.

TRANSFER OF PROFITWORKS BUSINESS

The merger agreement provides that the ProfitWorks product line will be
retained by Mestek. ProfitWorks is a system utilized by lumber, electrical,
plumbing and manufacturer's representatives to manage order entry, inventory,
purchasing, accounts receivable and reporting.

Early in its negotiations with Simione, Mestek informed Simione that the
ProfitWorks product would be retained by Mestek because of the software's closer
relationship with Mestek's core businesses. The parties agreed that the combined
Simione/MCS entity would be better served to concentrate on its own markets and
products within its core home health care information systems business. The
ProfitWorks product line was therefore not included in the valuation of MCS
conducted by Gross Collins.

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The ProfitWorks business was transferred from MCS to Mestek in the form of
a dividend from MCS to Mestek on September 1, 1999. The dividend included all
accounts receivable, inventory and other assets associated with ProfitWorks.
Mestek assumed all liabilities related to ProfitWorks, including warranty
obligations, and agreed to pay rent for space used by ProfitWorks at MCS'
headquarters through the end of 1999. Any relationship between Simione and
ProfitWorks after the merger will be pursuant to arms' length agreements and
arrangements negotiated by the parties.

INDEMNIFICATION

The merger agreement contains mutual indemnification obligations, under
which Mestek indemnifies Simione and its affiliates, and Simione indemnifies
Mestek and its affiliates, for claims arising from a breach of the
representations, warranties or covenants in the agreement and certain other
undisclosed liabilities. Mestek will also indemnify Simione and its affiliates
for claims arising from the MCS spin-off. Each of Mestek and Simione shall have
no liability under the indemnification obligations until the total of all
indemnification claims as to such party exceeds $1,000,000, at which time all
claims in excess of $1,000,000 shall be indemnified in full. All indemnification
claims of Simione and Mestek shall be satisfied by delivery from the
indemnifying party to the indemnified party of a number of shares of Simione
common stock having a value equal to the amount of the indemnification claim,
based on the market price of Simione common stock as of the date the indemnified
party paid the amounts giving rise to the indemnification claim.

In connection with their respective indemnification obligations, the
representations and warranties in the agreement survive the closing of the
merger for a one year period, except for representations and warranties as to
taxes, employee benefits and ownership of stock, which survive until the end of
the applicable statute of limitation as to such claim.

OTHER

The merger agreement provides that the parties will take a variety of other
actions, some of which relate to Simione's and MCS' obligations to call
stockholder's meetings and solicit proxies to vote upon the approval of the
merger, the parties' obligations to prepare and file this joint proxy
statement/prospectus with the SEC, and Simione's obligation to use best efforts
to ensure that the shares of Simione common stock to be issued in the merger
will be approved for trading on the Nasdaq Stock Market's National Market System
subject to official notice of issuance.

CONDITIONS TO THE MERGER

The merger agreement provides that completion of the merger is subject to
the satisfaction of various conditions. These conditions are:

- Simione's and MCS' stockholders shall have voted in favor of the merger;

- at the closing, the representations and warranties of each of Simione and
MCS shall be true in all material respects and each of the companies
shall have performed their respective covenants in the merger agreement,
except where the failure of these representations and warranties to be
true and correct or the failure of Simione or MCS to comply with these
covenants would not, individually or in the aggregate, have a material
adverse effect on that party's business or assets equal to or greater
than $2,000,000;

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- at the closing, MCS shall have transferred to Mestek all of the assets,
and Mestek shall have assumed all of the liabilities, of MCS' ProfitWorks
applications software and related product line;

- there shall have been no governmental action which prohibits the merger
or limits the rights of Simione because of the merger;

- there shall have been no material adverse change in the business or
assets of Simione or MCS that, taken as a whole, would be equal to or
greater than $2,000,000;

- the parties will receive certificates and opinions from each other and
their respective legal advisors regarding the merger;

- the closing of the Mestek investment in Simione, and related
transactions, described above; and

- the listing on the Nasdaq Stock Market's National Market System of the
shares of Simione common stock to be issued in the merger and upon
exercise by Mestek of the Simione stock options and the warrant granted
in connection with the merger agreement.

The parties have informally agreed that listing on the Nasdaq SmallCap
Market of the Simione common stock will satisfy the last condition mentioned
above.

TERMINATION OF THE MERGER AGREEMENT

The merger agreement provides that the merger agreement may be terminated
prior to the effective time upon the occurrence of any one of the following
contingencies:

- MCS, Simione and Mestek can collectively terminate the agreement prior to
the effective time by mutual written consent of their boards of
directors;

- MCS, Simione or Mestek, each individually, can terminate the merger
agreement if the merger is not completed by January 7, 2000 and such
failure to close by such date is not attributable to actions or omissions
of the party seeking to terminate the agreement;

- MCS or Mestek can terminate the agreement upon the occurrence or
discovery of a material adverse change in the business or assets of
Simione that, taken as a whole, would be equal to or greater than
$2,000,000, and Simione can terminate the agreement upon the occurrence
of a similar material adverse change with respect to MCS; or

- Either Simione or MCS shall be deemed to have terminated the agreement if
it enters into a binding agreement to merge, sell its assets, sell its
stock, consolidate or undertake a similar transaction other than as
contemplated by the merger agreement, except for the CareCentric merger
agreement.

The parties have informally agreed not to terminate the merger agreement
under the deadline provision prior to March 10, 2000.

The merger agreement may be amended by an agreement in writing among the
parties prior to the completion of the merger. However, after approval of the
merger by the

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Simione stockholders and the MCS stockholders, no amendment may be made which by
law requires further approval of these stockholders without securing the further
approval.

The amended merger agreement provides as follows regarding the expenses of the
parties:

- Simione will pay all its own expenses related to the original merger
agreement and original proxy statement;

- Mestek will pay all expenses incurred by Simione as a result of the MCS
spin-off, including the amended merger agreement and this joint proxy
statement/prospectus;

- Mestek will pay all expenses of MCS and Mestek related to the original
and amended merger agreements, if the merger closes;

- Mestek or MCS will pay all expenses of MCS and Mestek related to the
original and amended merger agreements, if the merger does not close;

- MCS will pay all costs incurred by its personnel in connection with the
original and amended merger agreements, whether or not the merger closes;
and

- Simione will pay one-half of all expenses incurred by MCS in connection
with any financial statements and valuation reports necessary for this
joint proxy statement/prospectus.

The merger agreement requires Simione or MCS to pay the other party a
termination fee of $1.2 million, plus out-of-pocket expenses incurred in
connection with the merger not to exceed $500,000, if the merger agreement is
terminated after either party executes a binding agreement for a similar type of
transaction with another third party.

VOTING AGREEMENTS

The MCS merger agreement includes a voting agreement regarding the election
of directors. This voting agreement is intended to ensure that MCS stockholders
will control six of the Simione board positions during the 18 month term of the
voting agreement. Under this agreement, after the merger becomes effective, the
directors of Simione will appoint six individuals designated by MCS'
stockholders at the MCS special meeting to the board of Simione. For a period of
eighteen months after the effective date of the merger, Simione will name the
six MCS designees as nominees to the Simione board in any proxy statement
relating to the election of directors.

The MCS Major Stockholders will vote their Simione shares in favor of all
nominees named in Simione's proxy statements. However, Simione will not be
required to nominate, and the MCS Major Stockholders will not be required to
vote for, a particular candidate if that candidate is subject to
disqualifications related to potential director misconduct.

MCS has nominated John E. Reed, Stewart B. Reed, David W. Hunter, Winston
R. Hindle, Jr., R. Bruce Dewey and Edward K. Wissing as its initial designees to
the Simione board, to be voted upon by MCS' stockholders at the MCS special
meeting.

Under the merger agreement, if any of the Simione board designees selected
by the MCS stockholders is removed or resigns from the board during the 18 month
period after the closing date of the merger agreement, the remaining MCS
designees shall fill the vacancy. In addition, a majority of the MCS designees
can remove any MCS designee

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from the list of MCS designees but may not remove him from his office as a
director before the end of their term.

While Simione's Series B Preferred Stock remains outstanding, in the event
that Simione's board is unable to reach a decision on a vote on any matter in
two consecutive board meetings, the number of directors shall be increased by
one and the holders of the Series B Preferred Stock shall have the right to
appoint that director. This provision will give Mestek the deciding vote in the
event of a deadlock on Simione's board.

The overall effect of these voting arrangements is to give the MCS
stockholders and Mestek, as a group, effective control over the Simione board.
Because John E. Reed controls Mestek and is the largest single MCS stockholder,
he will be able to exercise this control.

The CareCentric stockholders' approval was needed to amend the MCS merger
agreement. To obtain this approval, Mestek has agreed to cause holders of at
least 60% of MCS' outstanding stock to vote their Simione shares in favor of the
conversion to Simione common stock of the Series A Preferred Stock issued to
former CareCentric stockholders if the Simione common stock holders do not
approve of the conversion of the Series A Preferred Stock prior to the merger.
Barrett C. O'Donnell, O'Donnell, Davis, Inc. and Rowan Nominees Limited,
stockholders of Simione, have also entered into similar voting agreements. These
three stockholders control a total of approximately 18% of the shares of Simione
common stock outstanding prior to the closing of the merger. In the event the
proposal to convert the Series A Preferred Stock is approved by the Simione
stockholders, Simione may require the conversion of all of the Series A
Preferred Stock into common stock. Because of the voting arrangements, approval
of the subsequent conversion of the Series A Preferred Stock is assured.

The CareCentric merger agreement also includes a voting agreement designed
to give the former CareCentric stockholders control over two positions on the
Simione board of directors. Under the agreement, the directors appointed two
individuals designated by CareCentric, Daniel J. Mitchell and Jesse I. Treu, to
the board of Simione. For a period of eighteen months after the effective date
of the CareCentric merger, Simione will name these two individuals as nominees
to the Simione in any proxy relating to the election of directors.

Pursuant to a Stock Purchase Agreement between Simione and Eclipsys
Corporation, Eclipsys will vote its 420,000 shares of Simione common stock in
favor of all matters recommended by the Simione board, which includes the MCS
merger and the other proposals to be presented at this special meeting.

REGULATORY FILINGS AND APPROVALS

Because of applicable exemptions, Simione and MCS believe that no filing is
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for the
merger or for Mestek's purchase of Simione Series B Preferred Stock.

Although Simione and MCS consider any governmental antitrust enforcement
action unlikely, at any time before or after consummation of the merger, the
Antitrust Division of the U.S. Justice Department or the Federal Trade
Commission could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the
consummation of the merger or seeking divestiture of part of the assets of MCS.
In addition, at any time after the effective time of the merger, any state

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could take such action under its antitrust laws as it deems necessary or
desirable in the public interest. Such action could include seeking to enjoin
the consummation of the merger or seeking divestiture of assets of MCS. Private
parties may also seek to take legal action under the antitrust laws under
certain circumstances.

Based on information available to them, Simione and MCS believe that the
merger and Mestek's purchase of Simione Series B Preferred Stock, the warrant
and stock options can be effected in compliance with federal and state antitrust
laws. However, no assurance can be given that a challenge to the consummation of
the merger on antitrust grounds will not be made or that, if such a challenge
were made, Simione and MCS would prevail or would not be required to accept
certain conditions, including the divestiture of assets and/or commitments as to
future business practices and other matters, in order to consummate the merger.

MCS and Simione are not aware of any governmental or regulatory
requirements for completion of the merger other than compliance with applicable
state corporate laws and federal and state securities laws.

ACCOUNTING TREATMENT OF THE MERGER

The merger will be accounted for as a purchase transaction of Simione by
MCS for financial accounting purposes in accordance with generally accepted
accounting principles. Subsequent to the MCS merger, approximately 7,449,266
shares of the outstanding common stock of Simione will be owned by the former
MCS stockholders. Assuming that the Simione Series A Preferred Stock is
converted into Simione common stock, the shares received by the former MCS
stockholders will be approximately 39% of the then outstanding Simione common
shares and 24% of the voting power of Simione after the merger.

John E. Reed, through direct ownership and as trustee under various family
trusts, will receive approximately 4.2 million shares of Simione common stock in
the merger. These Simione shares will be approximately 26% of the then
outstanding Simione common shares and 22% of the voting power of Simione after
the merger, assuming the conversion of the Series A Preferred Stock.

The Series B Preferred Stock issued to Mestek in the merger will have
voting rights equal to 11,200,000 shares of Simione common stock, or
approximately 37% of the total voting power, assuming conversion of the Series A
Preferred Stock.

Upon the closing of the merger, Mestek intends to convert its loan to
Simione into 850,000 shares of Series C Preferred Stock. These shares of Series
C Preferred Stock will have 2.7% of the voting power of Simione after the merger
assuming that the Series A Preferred Stock is converted.

Mr. Reed, through direct share ownership and as trustee under various
family trusts, controls more than 50% of the vote on matters to be voted upon by
stockholders of Mestek. Through his shareholdings in Mestek, Mr. Reed can
therefore control how Mestek votes the Series B and Series C Preferred Stock at
the Simione level. Because MCS shares will be issued on a one-for-one basis for
Mestek shares in the MCS spinoff, Mr. Reed, through direct ownership and as
trustee under various family trusts, will control more than 50% of the voting
power of MCS. Accordingly, Mr. Reed will control, through his direct and
indirect control of 22% of Simione common stock and his indirect control of the
Series B and Series C Preferred Stock, approximately 52% of the vote on matters
to

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voted upon by shareholders of Simione. In addition, Mr. Reed will be able to
determine the composition of the MCS board designees to be appointed by the
Simione board, and will be able to select a 13th director to break a deadlock in
the event that Simione's board is unable to reach a decision on a vote on any
matter in two consecutive board meetings.

Based upon a series of transactions, specifically the spin-off of MCS from
Mestek, the shareholder vote on the Simione/MCS merger, the purchase of the
Series B Preferred Stock and the promissory note that is convertible into Series
C Preferred Stock and the subsequent ownership structure, MCS, for accounting
purposes only, is considered the accounting acquirer. MCS will supply a large
share of the top management of the combined entity. Accordingly, the assets and
liabilities of Simione were revalued, and the historical statements of MCS will
become the historical financial statements of Simione. Under this treatment, MCS
will allocate the value of the outstanding stock of Simione to the net assets it
acquires, including intangible assets of $22.7 million. The purchase price
allocation is subject to revision when Simione obtains additional information
concerning asset valuation. See "Unaudited Pro Forma Financial Data" beginning
on page 92.

LISTING OF NEW SHARES OF SIMIONE COMMON STOCK ON THE
NASDAQ STOCK MARKET

Prior to the merger, Simione will use its best efforts to obtain approval
to list on The Nasdaq Stock Market's National Market System or SmallCap Market
the shares of Simione common stock to be issued in the merger and upon the
exercise by Mestek of the Simione stock options and the warrant granted to it in
connection with the merger agreement. This listing is a condition to the closing
of the merger.

While our common stock is currently listed on the Nasdaq National Market,
in order to remain listed, we must meet certain continued listing requirements
with respect to:

- Market capitalization (the market value of all outstanding shares of our
common stock);
- Public float (the number of outstanding shares of common stock held by
non-affiliates of the Company);
- Market value of public float;
- Market price of the common stock;
- Number of market makers;
- Number of shareholders; and
- Net tangible assets (total assets minus total liabilities and goodwill).

Although Simione currently meets the continued listing requirements, there
can be no assurance that it will continue to do so, especially if Simione
continues to experience operating losses which erode its net tangible asset
base.

Nasdaq has informed Simione that it believes the merger will cause a change
in control and a change in the financial structure of Simione under applicable
Nasdaq rules, and that Simione therefore will have to file a new initial listing
application and meet Nasdaq's initial inclusion standards to remain listed on
the Nasdaq National Market after the merger. The initial inclusion standards use
the same set of criteria listed above, but each criterion has a more stringent
requirement than the continued listing requirement. The pro forma financial
statements indicate that the combined company would not meet these more
stringent requirements, including the net tangible asset requirement and the
market value of public float requirement. Therefore, the merger will probably
cause Simione to lose its listing on the Nasdaq National Market. Simione intends
to appeal

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<PAGE> 95

Nasdaq's determination that a new initial listing application must be filed.
Simione expects to have a hearing before a Nasdaq review board on this appeal
sometime after the date of the special meeting. The outcome of this appeal is
uncertain. The appeal will prevent a delisting action until Nasdaq renders a
final decision after the hearing.

If Simione's common stock no longer remains eligible to be listed on the
Nasdaq National Market, Simione intends to apply to have the common stock listed
on the Nasdaq SmallCap Market. The Nasdaq SmallCap Market has a similar but less
stringent set of criteria for initial and continued listing, including less
stringent requirements for net tangible assets and market value of public float.
Simione believes that after the merger it will qualify for listing on the Nasdaq
SmallCap Market, except that Simione's stock price currently falls below the $4
bid price requirement. If the stockholders approve the reverse stock split, and
the stock price increases proportionately to the reverse stock split, then
Simione will meet the bid price requirement. Although Simione believes that it
can qualify for inclusion on the Nasdaq SmallCap Market, there can be no
assurance that this application will be accepted. If we were to fail to meet the
requirements of the Nasdaq National or SmallCap Market, trading of our common
stock could be conducted on an electronic bulletin board established for
securities that do not meet the Nasdaq SmallCap Market listing requirements, the
OTC Bulletin Board, or on an informal network of brokers maintained by NASD, in
what is commonly referred to as the "pink sheets."

FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes the material federal income tax
consequences of the spin-off and the merger under the Internal Revenue Code of
1986 (the "Code"). This discussion is intended only as a summary of selected
principal U.S. federal income tax consequences of the merger and does not
purport to be a complete analysis or listing of all of the potential tax effects
of the merger. The opinion of counsel regarding the federal income tax
consequences of the spin-off and the merger is included as Exhibit 8.1 to the
Registration Statement on Form S-4 of Simione.

The following summary is based on existing IRS regulations, including
final, temporary or proposed, and current administrative rulings and court
decisions. All of these regulations, rulings and decisions are subject to
change. The consequences described in these tax sections assume that the merger
will be completed on the terms described in the merger agreement. This
discussion is based on important assumptions and representations concerning the
merger and the actions of the corporations and stockholders involved. Also, the
following discussion does not address tax consequences arising under state,
local, or foreign laws, and does not address the circumstances of special cases
or individual circumstances of taxpayers. ACCORDINGLY, EACH HOLDER OF SIMIONE
STOCK, MESTEK STOCK AND MCS STOCK SHOULD CONSULT A TAX ADVISOR REGARDING THE TAX
CONSEQUENCES OF THE SPIN-OFF AND MERGER IN LIGHT OF THE HOLDER'S OWN SITUATION,
INCLUDING THE APPLICATION AND EFFECT OF ANY FEDERAL, STATE, LOCAL, OR FOREIGN
INCOME AND OTHER TAX LAWS. The following discussion is based upon federal income
tax laws as in effect on the date of this joint proxy statement/prospectus,
which are subject to change, possibly retroactively. Future legislation,
regulations, administrative rulings, or court decisions may affect these
expectations as to federal income tax consequences.

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<PAGE> 96

FEDERAL INCOME TAX CONSEQUENCES TO MESTEK, MCS AND THEIR STOCKHOLDERS

Mestek, MCS and their stockholders should not recognize any gain or loss as
a result of the spin-off or the merger. The spin-off has been structured with
the intent that it qualify as a tax-free distribution under Code section 355,
and the merger has been structured with the intent that it qualify as a
"reorganization" under Code section 368(a)(1)(A).

SPIN-OFF. Corporations and their stockholders are generally taxed on
distributions of appreciated property unless the transaction falls within one of
the exceptions provided in the Code. One exception is Code section 355 which
provides nonrecognition treatment to certain qualifying spin-offs. Code section
355 provides a set of general requirements designed to limit nonrecognition
treatment for separations of distinct and historic ongoing businesses. Code
section 355 is also intended to prevent two kinds of transactions for which
nonrecognition treatment is considered inappropriate: (1) a disguised
distribution of corporate earnings (i.e., an in-kind dividend of corporate
profits) and (2) a disguised sale of a business to an unrelated buyer. Congress
recently expanded the rules designed to tax disguised sales by enacting an
additional set of requirements (new Code section 355(e)).

In general, there are three possible tax results under Code section 355:

(1) A spin-off that meets all of the Code section 355 requirements is
non-taxable to both the distributing corporation and its stockholders;

(2) A spin-off that fails the general requirements of Code section 355
is taxable to both the distributing corporation and its stockholders; and

(3) A spin-off that meets the general requirements of Code section 355
but fails to meet the requirements of Code section 355(e) is taxable to the
distributing corporation but not to its stockholders.

The general requirements of Code section 355 include:

(1) Control -- that the distributing corporation (referred to as
"distributing") must own at least 80 percent of the total combined voting
power of all classes of stock entitled to vote and at least 80 percent of
the total number of shares of all other classes of stock of the distributed
corporation (referred to as "controlled") before the distribution;

(2) Active trade or business -- distributing and controlled must each
be engaged in the active conduct of a trade or business that has a
five-year history;

(3) Distribution -- the distributing corporation must distribute at
least 80 percent of the controlled shares;

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<PAGE> 97

(4) Device -- the distribution must not be used principally as a
device for the distribution of earnings and profits; and

(5) Business purpose -- the distribution must have a bona fide
business purpose.

If the spin-off fails to meet the general requirements of Code section 355,
the fair market value of the shares of MCS stock received by a Mestek
stockholder would be taxable to the stockholder as follows:

- as a dividend, to the extent paid out of Mestek's current and accumulated
earnings and profits;

- thereafter, as a non-taxable return of capital to the extent of such
stockholder's tax basis in its Mestek shares; and

- thereafter, as capital gain, assuming such stockholder's Mestek stock is
held as a capital asset.

The tax basis of the shares of Mestek held by Mestek stockholders after the
spin-off would be reduced by the portion of the distribution, if any, which was
treated as a non-taxable return of capital and the tax basis of the shares of
MCS would be equal to their fair market value on the date of the distribution.
In addition, Mestek would recognize gain equal to the difference, if any,
between the fair market value of the shares of MCS distributed and Mestek's tax
basis in such shares.

The aggregate tax basis of the Mestek stock and the MCS stock held by a
stockholder after the spin-off will be the same as the tax basis of the Mestek
stock held by such stockholder before the spin-off, allocated between the Mestek
stock and the MCS stock in accordance with the relative fair market value of
such shares.

A completely nontaxable spin-off must meet the general requirements listed
above and also avoid the application of Code section 355(e). Code section 355(e)
generally provides that a distribution by a corporation of the stock of a
subsidiary corporation which is otherwise tax-free will be taxable to the
distributing corporation (but not to its stockholders) under certain
circumstances. This provision applies to any distribution that is part of a
plan, or series of related transactions, pursuant to which one or more persons
acquire, directly or indirectly, stock representing a 50 percent or greater
interest (by vote or value) in either such corporation (a "50% Ownership
Shift"). Any 50% Ownership Shift that occurs within the four-year period
beginning two years before the distribution will be presumed to be pursuant to
such a plan or series of related transactions. However, the presumption may be
rebutted by a showing that the distribution and the 50% Ownership Shift are not
part of a plan or series of related transactions.

Recently released proposed Treasury regulations under Code section 355(e)
contain rules that broadly define a "plan or series of related transactions."
The proposed regulations would expand the meaning of the term to include
acquisitions that were not planned but could have been merely "foreseen." The
proposed regulations also would include certain transactions involving disparate
groups of public stockholders, such as

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<PAGE> 98

public offerings of shares, within the meaning of "plan or series of related
transactions." Generally, proposed regulations are not binding precedent for
transactions that occur before regulations are issued in final form but might be
instructive in that they could indicate the IRS's position with respect to the
underlying statute. The Code section 355(e) proposed regulations are proposed to
be effective only for distributions occurring on or after the date final
regulations are published in the Federal Register, but it is possible that final
regulations could be issued with a retroactive effective date before the date of
the spin-off. In addition, the legislative history of Code section 355(e)
suggests that a 50% Ownership Shift could occur as a result of a public offering
of shares.

The merger is structured so that, immediately after the merger, the former
MCS stockholders will own (1) taking into account certain attribution rules and
the voting power attributable to the Simione Series B and Series C Preferred
Stock to be issued to Mestek in the merger, more than 50 percent of the voting
power of Simione after the merger, and (2) taking certain attribution rules into
account, more than 50 percent of the value of Simione after the merger. Mestek
obtained an appraisal of the equity interests in Simione subsequent to the
merger from Gross Collins, an independent valuation expert. The IRS could
disagree with the appraisal and such disagreement could result in the spin-off
being taxable to Mestek under Code section 355(e).

If the spin-off were taxable under Code section 355(e) because of the
merger or any other reason, Mestek would recognize capital gain equal to the
difference between the fair market value of the MCS stock and Mestek's adjusted
tax basis in such stock (to the extent not otherwise recognized). The amount of
such gain and the resulting tax liability would depend on the fair market value
of the MCS stock at the time of the spin-off and could be material. Neither MCS
nor Simione have agreed to indemnify Mestek for any federal income tax liability
or any other cost resulting from the failure of the spin-off to satisfy the
general requirements of Code section 355, the possible application of Code
section 355(e) or for any other reason.

MERGER. The MCS stockholders should not recognize any gain or loss as a
result of the merger. The merger has been structured with the intent that it
will qualify as a tax-free "reorganization" described in Code section
368(a)(1)(A). Assuming such treatment applies, MCS also should not recognize any
gain or loss as a result of the merger and Simione's tax basis in the former MCS
assets immediately after the merger will be equal to the tax basis MCS had in
such assets immediately prior to the merger. Each former MCS stockholder would
have the same basis in his or her Simione shares that he or she had in the MCS
shares (as computed as described above). If the merger were not to so qualify,
MCS would be treated as if it had disposed of all of its assets in a taxable
sale at their respective fair market values (in the aggregate, such values would
equal the total fair market value of the Simione shares received by the MCS
stockholders in the merger). The MCS stockholders would recognize gain or loss
as if they disposed of all of their MCS shares in a taxable sale in exchange for
the Simione shares each such stockholder received. In each case, any such gain
or loss would be measured by the difference (if any) between (1) the fair market
value of each MCS asset (for MCS's corporate-level gain or loss) or the MCS
shares held by a MCS stockholder (for the stockholder-level gain or loss) and
(2) the tax basis in such asset or shares. Simione would then have a fair market
value tax basis in the former MCS assets and the MCS stockholders would have a
fair market value tax basis in their Simione shares.

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<PAGE> 99

FILING REQUIREMENTS. Current Treasury Regulations require each holder of
Mestek stock who receives shares of MCS pursuant to the spin-off to attach to
his or her U.S. federal income tax return for the year in which the spin-off
occurs a statement setting forth such data as may be appropriate in order to
show the applicability of Code section 355 to the spin-off. Stockholders may
detach the statement below under "IRS Code Section 355 Statement" for such
purpose. Mestek will provide the appropriate information to Mestek's
stockholders after the spin-off.

IRS CODE SECTION 355 STATEMENT (DETACH OR COPY AND ATTACH TO 2000 U.S. TAX
RETURN)

The undersigned, a stockholder owning shares of Mestek during the 2000
calendar year, received a distribution of stock in a controlled corporation
pursuant to Section 355. The names and addresses of the corporations involved
are Mestek, Inc., 260 North Elm Street, Westfield, Massachusetts, 01085
("Parent"), and MCS, Inc., 400 Penn Center, Pittsburgh, Pennsylvania, 15253
("MCS"). No stock or securities in Parent was surrendered by the undersigned.

--------------------------------------
Stockholder (name and signature)

THE SUMMARY OF THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE
MAY NOT BE APPLICABLE TO STOCKHOLDERS WHO RECEIVED THEIR SHARES OF MCS THROUGH
THE EXERCISE OF AN EMPLOYEE STOCK OPTION OR OTHERWISE AS COMPENSATION, WHO ARE
NOT CITIZENS OR RESIDENTS OF THE UNITED STATES OR WHO ARE OTHERWISE SUBJECT TO
SPECIAL TREATMENT UNDER THE CODE. ALL STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE SPIN-OFF TO THEM,
INCLUDING THE APPLICABILITY OF STATE, LOCAL AND FOREIGN LAWS.

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<PAGE> 100

FEDERAL INCOME TAX CONSEQUENCES TO SIMIONE AND ITS STOCKHOLDERS

Existing stockholders of Simione should not recognize any gain or loss as a
result of the merger. The merger has been structured with the intent that it
qualify as a tax-free "reorganization" described in Code section 368(a)(1)(A).
Assuming such treatment applies, Simione also should not recognize any gain or
loss as a result of the merger and Simione's tax basis in the assets of MCS
immediately after the merger will be equal to the tax basis MCS had in such
assets immediately prior to the merger. If the merger were not to so qualify,
gain or loss would still not be recognized by Simione or its existing
stockholders from the merger and Simione would have a basis in the assets of MCS
equal to the fair market value of the consideration given by Simione pursuant to
the merger, including the value of the Simione stock and liabilities of MCS
assumed by Simione pursuant to the merger. As a successor to MCS in the merger,
however, Simione could have liability for any state and federal income taxes of
MCS which might result from the merger failing to qualify as a reorganization.

LEGAL MATTERS

The validity of the shares of Simione common stock issued to the MCS
stockholders in the merger will be passed upon for Simione by Arnall Golden &
Gregory, LLP.

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<PAGE> 101

UNAUDITED PRO FORMA FINANCIAL DATA

The following Unaudited Pro Forma Combining Statements of Operations for
the year ended December 31, 1998 and the nine months ended September 30, 1999
give effect to the following as if they occurred on January 1, 1998:

- the merger of CareCentric and Simione; and

- the merger of Simione and MCS.

Simione, CareCentric and MCS each prepare its financial statements on the
basis of a fiscal year ending on December 31. The following Unaudited Total Pro
Forma Combined Balance Sheet as of September 30, 1999, gives effect to the
merger of Simione and MCS as of September 30, 1999. The merger of CareCentric
and Simione was effected on August 12, 1999 and therefore is reflected in
Simione's historical balance sheet as of September 30, 1999.

The Unaudited Pro Forma Combining Statements of Operations and Unaudited
Pro Forma Combining Balance Sheet set forth below reflect several material
adjustments, including among others, adjustments to reflect the amortization of
the portion of the purchase price allocated to goodwill and other intangible
assets. The purchase price allocation is preliminary and subject to change. Any
changes to the allocation could have a material impact on the Unaudited Pro
Forma Combining Financial Statements. The Unaudited Pro Forma Combining
Statements of Operations do not reflect the effect of the reverse stock split
because the ratio has not been determined. See Note 3 below for a description of
the effect of the reverse stock split using different ratio possibilities.

The Unaudited Pro Forma Combining Financial Statements are derived from the
historical financial statements of Simione, CareCentric, and MCS and the
assumptions and adjustments described in the accompanying notes. Simione
believes that all adjustments necessary to present fairly such unaudited
financial information have been made. The unaudited pro forma financial data
should be read in conjunction with the consolidated financial statements and the
accompanying notes thereto of Simione, CareCentric, and MCS, which begin on page
F-1.

The Unaudited Pro Forma Combining Financial Statements do not claim to
represent what Simione's results of operations actually would have been if the
mergers had occurred as of January 1, 1998 or what such results will be for any
future periods.

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<PAGE> 102

UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS

UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
CARECENTRIC MCS TOTAL
SIMIONE CARECENTRIC PRO FORMA PRO FORMA MCS PRO FORMA PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED HISTORICAL ADJUSTMENTS COMBINED
------------ ----------- ----------- ------------ ----------- ----------- ------------
(2) (4) (3)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
Software and
service............. $ 27,522,926 $ 996,124 $ 28,519,050 $14,901,000 $ $ 43,420,050
Other................ 14,123,209 64,589 14,187,798 -- 14,187,798
------------ ----------- ------------ ----------- ------------
Total revenues...... 41,646,135 1,060,713 42,706,848 14,901,000 57,607,848
Operating expenses
Cost of revenue...... 26,091,299 1,250,657 27,341,956 9,225,000 36,566,956
Development.......... 6,740,829 1,775,402 8,516,231 231,000 8,747,231
Sales, general and
admin............... 13,822,674 3,105,252 16,927,926 3,780,000 20,707,926
Severance............ 5,010,976 -- 5,010,976 -- 5,010,976
Depreciation and
amortization........ 2,392,321 199,313 1,403,002(f) 3,994,636 -- 3,093,318 (g) 5,684,952
(1,403,002)(f)
------------ ----------- ------------ ----------- ----------- ------------
Total operating
expenses.......... 54,058,099 6,330,624 61,791,725 13,236,000 76,718,041
------------ ----------- ------------ ----------- ------------
Operating
income/(loss)....... (12,411,964) (5,269,911) (19,084,877) 1,665,000 (19,110,193)
Interest expense,
net................. 240,481 (231,818) 8,663 47,000 55,663
------------ ----------- ------------ ----------- ------------
Income/(loss) before
taxes............... (12,171,483) (5,501,729) (19,076,214) 1,712,000 (19,054,530)
Income tax
provision........... -- -- -- (686,000) (686,000)
------------ ----------- ------------ ----------- ------------
Income/(loss) from
continuing
operations.......... $(12,171,483) $(5,501,729) $(19,076,214) $ 1,026,000 $(19,740,530)
============ =========== ============ =========== ============
Net loss per share
from continuing
operations.......... $ (1.42) $ (1.64) $ (1.03)
============ ============ ============
Weighted average
shares - basic and
diluted............. 8,556,990 3,100,000 11,656,990 (1) 7,449,266 19,106,256 (1)
============ ========== ============ =========== ============
</TABLE>

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

(1) Pro forma loss per share is calculated based on the number of shares of
common stock outstanding at December 31, 1998, and has been adjusted to give
effect to the issuance of shares of Series A preferred stock that will occur
in connection with the merger. Stock options outstanding at each period end
have not been included in the loss per share calculations as their effect is
antidilutive.

(2) Represents the pro forma results of Simione and CareCentric.

(3) Represents the pro forma results of Simione, CareCentric, and MCS.

(4) Reflects continuing operations only. The ProfitWorks product line was
transferred from MCS to Mestek on September 1, 1999. The operations of
ProfitWorks have been removed as a discontinued operation for each period
presented and hence no pro forma adjustment is necessary. Mestek assumed all
liabilities related to ProfitWorks, including warranty obligations. Any
relationship between Simione and ProfitWorks after the merger will be
pursuant to arms' length agreements and arrangements negotiated by the
parties.

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<PAGE> 103

UNAUDITED PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
CARECENTRIC MCS TOTAL
SIMIONE CARECENTRIC PROFORMA PROFORMA MCS PROFORMA PROFORMA
HISTORICAL HISTORICAL ADJUSTMENTS COMBINED HISTORICAL ADJUSTMENTS COMBINED
----------- ----------- ----------- ----------- ----------- ----------- ------------
(5) (2) (4) (3)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
Software and
service............. $11,331,384 $1,097,258 $12,428,642 $12,519,000 $ 24,947,642
Other................ 8,946,780 274,131 9,220,911 -- 9,220,911
----------- ----------- ----------- ----------- ------------
Total revenues...... 20,278,164 1,371,389 21,649,553 12,519,000 34,168,553
Operating expenses
Cost of revenue...... 12,156,167 814,015 13,570,182 7,669,000 20,702,182
Development.......... 2,708,121 836,684 3,544,805 831,000 4,375,805
Sales, general and
admin............... 8,893,843 1,594,411 10,488,254 3,322,000 13,447,254
Severance and other
restructuring....... (1,140,000) -- (1,140,000) -- (1,140,000)
Depreciation and
amortization........ 2,410,295 123,265 818,418(f) 3,351,978 -- 2,319,988(g) 4,853,548
(818,418)(f)
----------- ----------- ---------- ----------- ----------- ---------- ------------
Total operating
expenses.......... 25,628,426 3,368,375 818,418 29,815,219 11,822,000 1,501,570 43,138,789
----------- ----------- ----------- ----------- ------------
Operating
income/(loss)....... (5,350,262) (1,996,986) (8,165,666) 697,000 (8,970,236)
Interest expense,
net................. 69,689 (486,756) (417,067) 28,000 (389,067)
----------- ----------- ----------- ----------- ------------
Income/(loss) before
taxes............... (5,280,573) (2,483,742) (8,582,733) 725,000 (9,359,303)
Income tax
provision........... -- (2,400) (2,400) (284,000) (286,400)
----------- ----------- ----------- ----------- ------------
Income/(loss) from
continuing
operations.......... $(5,280,573) $(2,486,142) $(8,585,133) $ 441,000 $ (9,645,703)
=========== =========== =========== =========== ============
Net loss per share
from continuing
operations.......... $ (0.60) $ (0.73) $ (0.50)
=========== =========== ============
Weighted average
common -- basic and
diluted............. 8,740,559 3,100,000(1) 11,840,559 (1) 7,449,266 19,289,785 (1)
=========== ========== =========== ========== ============
</TABLE>

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

(1) Pro forma loss per share is calculated based on the number of shares of
common stock outstanding at September 30, 1999, and has been adjusted to
give effect to the issuance of shares of preferred stock that will occur in
connection with the merger. Stock options outstanding at each period end
have not been included in the loss per share calculations as their effect is
antidilutive.

(2) Represents the pro forma results of Simione and CareCentric.

(3) Represents the pro forma results of Simione, CareCentric, and MCS.

(5) Represents period from January 1, 1999 through August 12, 1999, the
effective date of the merger with Simione.

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<PAGE> 104

UNAUDITED PRO FORMA COMBINING
BALANCE SHEET AS OF SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
TOTAL
SIMIONE MCS PROFORMA
HISTORICAL HISTORICAL PROFORMA COMBINED
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.... $ 1,228,385 $ 33,000 $ 3,000,000 (a) $ 3,761,385
(500,000)(e)
Accounts receivable, net..... 5,013,621 3,913,000 8,926,621
Prepaids and other current
assets..................... 561,873 546,000 1,107,873
------------ ---------- -----------
Total current assets....... 6,803,879 4,492,000 13,795,879
FIXED ASSETS:
Purchased software, furniture
and equipment, net......... 1,528,171 599,000 2,127,171
Intangibles.................. 18,607,285 -- (18,607,285)(c) 22,671,246
500,000 (e)
Other assets................. 990,499 225,000 22,171,246 (c) 1,215,499
------------ ---------- -----------
Total assets............... $ 27,929,834 $5,316,000 $39,809,795
============ ========== ===========
CURRENT LIABILITIES:
Accounts payable............. 2,910,413 673,000 3,583,413
Accrued liabilities.......... 4,673,894 1,172,000 5,845,894
Customer deposits............ 931,097 487,000 1,418,097
Unearned revenues............ 2,183,782 2,835,000 5,018,782
Note payable................. 3,000,000 (3,000,000)(a)
Payable to parent............ 619,000 619,000
------------ ---------- -----------
Total current
liabilities............. 13,699,186 5,786,000 16,485,186
Accrued liabilities less
current portion............ 2,249,179 -- 2,249,179
------------ ---------- -----------
Total liabilities.......... 15,948,365 5,786,000 18,734,365
STOCKHOLDERS' EQUITY
(DEFICIT):
Preferred stock.............. 3,035 5,600 (a) 5,600
(3,035)(b)
Common stock................. 8,783 1,000 3,035 (b) 19,267
(1,000)(d)
7,449 (c)
Additional paid-in capital... 51,627,680 310,000 4,994,400 (a) 20,831,563
(51,627,680)(d)
15,527,163 (c)
Stock warrants............... -- -- 1,000,000 (a) 1,000,000
Accumulated deficit.......... (39,658,029) (781,000) 39,658,029 (d) (781,000)
------------ ---------- -----------
Total stockholders' equity
(deficit)............... 11,981,469 (470,000) 21,075,430
------------ ---------- -----------
Total liabilities &
stockholders' equity.... $ 27,929,834 $5,316,000 $39,809,795
============ ========== ===========
</TABLE>

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<PAGE> 105

NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

One of the stockholders, John E. Reed, will, by virtue of the spin-off of
MCS to the stockholders of Mestek and the subsequent merger of MCS into Simione,
control approximately 22% of the common stock on matters to be voted upon by
stockholders of Simione. The Series B Preferred Stock issued to Mestek will have
voting rights equal to 11,200,000 shares of Simione common stock, or
approximately 37% of the total voting power, assuming conversion of the Series A
Preferred Stock. The Series C Preferred Stock, when issued to Mestek upon
conversion of its promissory note at the closing of the merger, will have voting
rights equal to 850,000 shares of Simione common stock, or approximately 2.7% of
the total voting power, assuming conversion of the Series A Preferred Stock. Mr.
Reed, through direct share ownership and as trustee under various family trusts,
controls approximately 57% of the vote on matters to be voted upon by
stockholders of Mestek. This voting power at the Mestek level makes Mr. Reed
capable of exercising voting power of the Series B and Series C Preferred Stock
at the Simione level. Accordingly, Mr. Reed will therefore control, through his
direct and indirect control of 22% of Simione common stock and his indirect
control of the Series B and Series C Preferred Stock, approximately 52% of the
vote on matters to be voted upon by shareholders of Simione.

Based upon a series of transactions, specifically the spin-off of MCS from
Mestek, the shareholder vote on the Simione/MCS merger, the purchase of the
Series B Preferred Stock and the promissory note that is convertible into Series
C Preferred Stock, and the subsequent ownership structure, MCS, for accounting
purposes only, is considered the accounting acquirer. In addition, as a result
of these holdings, Mr. Reed will be able to determine the composition of the MCS
board designees to be appointed by the Simione board, and will be able to select
a 13th director to break a deadlock in the event that Simione's board is unable
to reach a decision on a vote on any matter in two consecutive board meetings.
In addition, MCS will supply a large share of the top management of the combined
entity. Accordingly, the assets and liabilities of Simione were revalued, and
the historical statements of MCS will become the historical financial statements
of Simione.

The accompanying Unaudited Pro Forma Combining Statements of Operations for
the year ended December 31, 1998 and the nine months ended September 30, 1999
give effect to the following as if they occurred as of January 1, 1998:

- the merger of CareCentric and Simione; and

- the merger of Simione and MCS.

MCS, CareCentric and Simione each prepare their financial statements on the
basis of a fiscal year ending on December 31. The following Unaudited Pro Forma
Combining Balance Sheet as of September 30, 1999 gives effect to the merger of
Simione and MCS

96
<PAGE> 106
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

as of September 30, 1999. The merger of CareCentric and Simione was effected on
August 12, 1999 and is reflected in Simione's historical balance sheet as of
September 30, 1999.

All material transactions between MCS, CareCentric and Simione during the
periods presented have been eliminated as pro forma adjustments. There are no
material conforming differences between the accounting policies of MCS,
CareCentric and Simione. The pro forma combined provision for income taxes may
not represent amounts that would have resulted had MCS, CareCentric and Simione
filed consolidated income tax returns during the periods presented.

The Series A Preferred Stock is convertible into Simione common stock on a
share-for-share basis only upon the approval of the conversion by a majority of
the Simione stockholders. Simione is seeking stockholder approval of the
conversion at the special meeting. If the Series A Preferred Stock is converted,
it will represent approximately 26% of the outstanding Simione common stock, or
16% if the MCS merger is approved. For pro forma purposes, we have assumed the
Series A Preferred Stock will be converted into Simione common stock. If the
Series A Preferred Stock does not convert then Total Pro Forma Combined Net Loss
per share for the nine months ended September 30, 1999 would be ($0.64).

NOTE 2. PRO FORMA ADJUSTMENTS

The pro forma adjustments are based on Simione's estimates of the value of
the tangible and identifiable intangible assets acquired. A valuation of the
tangible and identifiable intangible assets acquired has been conducted by an
independent third-party appraisal company. An increase in the purchase
consideration and/or a decrease in the working capital would result in a
reallocation of the purchase price and would result in increases in values
assigned to identifiable intangible assets compared to those presented in the
accompanying Unaudited Pro Forma Combining Financial Statements for the year
ended December 31, 1998 and as of September 30, 1999. Under purchase accounting,
the total acquisition cost will be allocated to CareCentric's and Simione's
assets and liabilities based on their relative fair values. The final
allocations may be different from the results reflected herein.

(a) In connection with the MCS merger, Mestek, the former parent company of
MCS, will invest $6.0 million in Simione in exchange for the following:

- 5,600,000 shares of Series B Preferred Stock; and

- A warrant to purchase 2,000,000 shares of Simione common stock at a
per share exercise price equal to the greater of $2.175 or the Nasdaq
closing price of Simione common stock on the closing date of the merger,
not to exceed $3.00 per share.

The fair value of these instruments was estimated by first calculating the
value of the warrants and then assigning the remaining value from the $6.0
million in consideration to the preferred stock. The Series B Preferred Stock is
not redeemable or convertible. The instrument was created to provide Mestek
additional voting rights in the new entity. The

97
<PAGE> 107
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

warrants have no redemption feature. Hence there is no accretion from the
difference between the estimated fair market value of the stock warrants at the
issue date and their estimated redemption prices over the term of the facility.
An independent third party valuation company calculated the fair value of the
warrants as of the date of issuance at $1.0 million. The Black-Scholes value
model was used in this calculation with the following assumptions:

<TABLE>
<S> <C>
Dividend yield.............................................. 0
Expected volatility......................................... 75%
Risk-free interest rate at the date of grant................ 5.8%
Expected life............................................... 3 year
</TABLE>

The option instrument was created to provide Mestek an anti-dilution
feature. There is no material value to this feature as the underlying securities
are (1) stock options to purchase Simione common shares with a weighted average
exercise price greater than the current trading value and (2) a limited amount
of old Simione shares that are not anticipated to be presented for conversion.
The option will be exercisable only to the extent that such Simione options,
warrants or conversion rights are in fact exercised. Specifically, this option
includes:

1. A total of 1,910,596 shares of Simione common stock related to
options and warrants, at exercise prices ranging from $.74 to $14.71 per
share, and a weighted average exercise price of $4.55 per share; and

2. 24,972 shares of Simione common stock issuable for no additional
consideration upon exercise of conversion rights. These conversion rights
represent old Simione common shares that have not been presented for
conversion after Simione's one-for-two reverse stock split effected in July
1997.

A $3.0 million loan and a $1 million loan from Mestek to Simione will be
repaid with a portion of the $6.0 million of proceeds described above. Hence,
upon closing Simione will receive cash of $2.0 million (less accrued interest on
the $3.0 million and $1.0 million loans) from the consideration of $6.0 million.

In addition to the $6.0 million consideration described above, non-cash
consideration will consist of approximately 8,743,103 shares (100% of the
outstanding shares) of MCS common stock. The MCS stock will be exchanged for
approximately 7,449,266 shares of Simione common stock. See note (c) for
discussion about the calculation of the value of intangible assets in this

98
<PAGE> 108
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

reverse acquisition. The following reflects, in tabular format, each component
of the acquisition costs:

<TABLE>
<CAPTION>
MCS
MERGER
-----------
<S> <C>
PURCHASE PRICE:
Simione common stock........................................ 8,782,729
Value per share............................................. $ 1.77
-----------
15,545,430
Series B Preferred Stock.................................... 5,000,000
Warrants.................................................... 1,000,000
-----------
Total purchase price...................................... $21,545,430
===========
</TABLE>

(b) The Series A Preferred Stock is convertible into Simione common stock
on a share-for-share basis only upon the approval of the conversion by a
majority of the Simione common stockholders. Simione is seeking stockholder
approval of the conversion at the special meeting. If the Series A Preferred
Stock is converted, it will represent approximately 26% of the outstanding
Simione common stock, or 16% if the MCS merger is approved. For pro forma
purposes, we have assumed the Series A Preferred Stock will be converted into
Simione common stock.

(c) For financial accounting purposes, the MCS merger is accounted for as
if MCS is acquiring Simione. Accordingly, the assets and liabilities of Simione
are revalued, and the historical statements of MCS will become the historical
financial statements of the registrant. Subsequent to the MCS merger,
approximately 46% or 7,449,266 shares of the outstanding common stock of
Simione, or 39% if the Series A Preferred Stock is converted, will be owned by
the former MCS stockholders. One of the stockholders, John E. Reed, will, by
virtue of the spin-off of MCS to the stockholders of Mestek and the subsequent
merger of MCS into Simione, control approximately 22% of the common stock on
matters to be voted upon by stockholders of Simione. The Series B Preferred
Stock to be issued to Mestek simultaneously with the closing of the merger will
have voting rights equal to 11,200,000 shares of Simione common stock, or
approximately 37% of the total voting power, assuming conversion of the Series A
Preferred Stock. The Series C Preferred Stock, when issued to Mestek upon
conversion of its promissory note at the closing of the merger, will have voting
rights equal to 850,000 shares of Simione common stock, or approximately 2.7% of
the total voting power, assuming conversion of the Series A Preferred Stock. Mr.
Reed, through direct share ownership and as trustee under various family trusts,
controls approximately 57% of the vote on matters to be voted upon by
stockholders of Mestek. This voting power at the Mestek level makes Mr. Reed
capable of exercising voting power of the Series B and Series C Preferred Stock
at the Simione level. Accordingly, Mr. Reed will therefore control, through his
direct and indirect control of 22% of the outstanding Simione common stock and
his indirect control of the Series B and Series C Preferred Stock, approximately
52% of the vote on matters to voted upon by stockholders of Simione. In
addition, as a result of these holdings, Mr. Reed will be able to determine the
composition of the MCS board designees to be appointed by the Simione board, and
will be able to select a 13th director to break a deadlock in the event that
Simione's board is unable to reach a decision on a vote on any matter in two
consecutive

99
<PAGE> 109
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

board meetings. In addition, MCS will supply a large share of the top management
of the combined entity. Accordingly, the assets and liabilities of Simione are
revalued, and the historical statements of MCS will become the historical
financial statements of the registrant.

In a reverse acquisition, the fair value of the issuing company's common
shares is recognized, together with adjustments necessary to reflect the issuing
company's net tangible and identifiable intangible assets at their fair value
with any remainder assigned to goodwill. The total intangibles was determined
based upon the following calculation:

<TABLE>
<CAPTION>
MCS
MERGER
-----------
<S> <C>
Purchase Accounting
Simione common stock........................................ 8,782,729
Value per share............................................. $ 1.77
-----------
Total value of Simione common stock....................... 15,545,430
Net tangible liabilities assumed............................ 6,625,816
Acquisition costs........................................... 500,000
-----------
Total intangibles......................................... $22,671,246
===========
</TABLE>

The impact of the $6 million Series B Preferred Stock and warrant
investment is considered in the calculation of net tangible liabilities assumed.
Outstanding Simione options will remain as they are. Since all option exercise
prices are significantly above Simione's current market price, these options
have been assigned a value of zero in the transaction.

In accordance with EITF 95-19, the value per share of Simione common stock
was determined based on the average per share price on the Nasdaq National
Market System for the 5 days before and after September 9, 1999. This was the
date of the announcement of the Amended and Restated Agreement and Plan of
Merger and Investment Agreement, which provided for the Series B Preferred Stock
and warrants described in Note (a).

Intangible assets of $22.7 million acquired have been allocated to specific
identifiable elements and related useful lives determined based upon an
assessment by an independent third party valuation services company. The
identifiable intangible assets are comprised of developed technology, assembled
workforce, customer base and goodwill. The table below is a summary of the
estimated amounts allocated to the long-lived assets acquired and useful lives:

SIMIONE -- VALUE ASSIGNED TO ASSETS BALANCE SHEET CATEGORY ACQUIRED

<TABLE>
<S> <C> <C>
Developed technology.................................... 8 Years $12.6 million
Assembled workforce..................................... 5 Years 2.3 million
Customer Base........................................... 9 Years 1.7 million
Goodwill................................................ 7 Years 6.1 million
-------------
$22.7 million
-------------
</TABLE>

100
<PAGE> 110
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

DISCLOSURE OF RATIONALE FOR 8 YEAR DEVELOPED TECHNOLOGY LIFE

A life of eight (8) years was assigned to the Developed Technology after
review of the following factors:

- The independent review and valuation of Simione by Gross Collins
recommended a life of between 7 and 9 years.

- Both of the main products of Simione, STAT and DME, are over 10 years old
and are still written in the their original software language.

- A significant percentage of the STAT and DME customer base exceeds 8
years since initial contract date.

- CareCentric's Smart Clipboard customers are all under 2 years old, but
will be integrated with selected modules of STAT and MestaMed which will
provide a link with established customer relationships exceeding 8 years.

- The cost of training and operational significance of the software
selected by the customers represents a capital purchase decision.
Customer buying decisions relate the initial installation and training
cost combined with the annual maintenance cost for the software against
the software license fee. With the limited capital funds available to the
home healthcare industry, Simione expects new software sales to remain
installed and in use in a customer's business at least 8 years.

(d) Adjustment to reflect the elimination of common stock, additional
paid-in capital, and accumulated deficit account balances of MCS.

(e) Represents estimated acquisition expenses of approximately $500,000
related to the MCS merger considered in the purchase price.

(f) Adjustment to reflect the amortization expense of identifiable
intangible assets acquired in the CareCentric merger. These assets will be
amortized over a period of 7 years. The estimated annual amortization charge to
operations related to intangible assets approximates $1.4 million. Assuming the
merger with MCS closes, these intangible assets will be eliminated and revalued
based upon the new entity. See note (c) above for a discussion of how intangible
assets are created in connection with the MCS merger.

For the CareCentric merger, non-cash consideration consisted of 3,034,521
shares of Simione Series A Preferred Stock valued at $2.58. The guaranteed value
of $3.00 per common share of Simione stock after the fourth quarter of 2000 has
been discounted to the purchase date, using an incremental borrowing rate of
10%. The discounted value as of the acquisition is $2.58 per share and coincides
with the average fair market value of Simione common stock as traded just prior
to the announcement of the acquisition. Simione's stock value has not exceeded
this floor subsequent to the announcement of the merger. If Simione common stock
does not meet the guaranteed value, Simione will issue up to an additional
3,034,521 shares of common stock to these stockholders. No additional intangible
assets will be recorded in the future as the purchase price remains the
guaranteed value per share. The only future financial statement impact could be
a reclassification between common stock and additional paid-in-capital for the
additional shares issued.

101
<PAGE> 111
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
CARE-
CENTRIC
MERGER
----------
<S> <C>
PURCHASE PRICE:
Simione Series A Preferred Stock............................ 3,034,521
Guaranteed value per share.................................. $ 2.58
----------
Total value of stock........................................ $7,813,892
Cash........................................................ 218,000
Net liabilities assumed..................................... 1,060,513
----------
Total purchase price...................................... $9,092,405
==========
Guaranteed value per share at December 31, 2000............. $ 3.00
Guaranteed value per share at acquisition date.............. $ 2.58
</TABLE>

All warrants for CareCentric stock were canceled as a result of the merger
with Simione.

Only options held by employees who remained with Simione after the merger
were converted from CareCentric options to Simione options. The conversion of
the options was made such that no vesting or expiration terms changed from the
terms included in the original CareCentric options. The number and strike price
of the options were converted using the same stock ratio and valuation used for
the common stockholders of CareCentric at the date of the merger. As a result,
600,000 CareCentric employee options at a strike price of $0.50 converted into
20,400 Simione options at a strike price of $14.71. Accordingly, all options
exercise prices are significantly above Simione's current market stock price.

The merger was accounted for as a purchase in accordance with Accounting
Principles Board Opinion No. 16, "Business Combinations." Intangible assets of
approximately $9.8 million acquired have been allocated to specific identifiable
elements and related useful lives determined based upon an assessment by an
independent third party valuation services company. The identifiable intangible
assets are comprised of developed technology and goodwill, which have estimated
useful lives of 7 years. The table below is a summary of the estimated amounts
allocated to the long-lived assets acquired:

CARECENTRIC -- VALUE ASSIGNED TO ASSETS BALANCE SHEET CATEGORY ACQUIRED

<TABLE>
<S> <C> <C>
Developed technology..................................... 7 Years $9.1 million
Goodwill................................................. 7 Years 0.7 million
------------
$9.8 million
============
</TABLE>

(g) Adjustment to reflect the amortization expense of identifiable
intangible assets acquired in the MCS merger. These assets will be amortized
over periods ranging from 5 to 9 years. The estimated annual amortization charge
to operations related to intangible assets approximates $3.1 million.

(h) Due to the fact that the following promissory notes were signed
subsequent to the pro forma date, no proceeds will be used to repay any part of
the notes and the stockholders are not voting on approval, we have not effected
the following for pro forma purposes.

102
<PAGE> 112
NOTES TO UNAUDITED PRO FORMA
COMBINING FINANCIAL STATEMENTS -- (CONTINUED)

- a liquidation preference of $1.00 per share, junior in priority to the
liquidation preferences of the Series A and Series B Preferred Stock;

- right to one vote per share on all matters voted on by Simione
stockholders;

- cumulative dividends at the rate of 11% of the $1.00 per share
liquidation preference per year, junior in priority to dividend rights of
the Series A and Series B Preferred Stock; and

- the right to receive the same consideration as an outstanding share of
Simione common stock in the event of a change of control transaction.

In February 2000, Mestek loaned an additional $1 million to Simione under a
secured promissory note. This note bears interest at a rate of BankBoston prime
plus 2% and matures on June 30, 2000.

NOTE 3. POTENTIAL REVERSE STOCK SPLIT

The stockholders of Simione are voting to approve authorization for a
reverse stock split if deemed necessary by Simione's board within one year
following stockholder approval. The following table shows the effect on earnings
per share for the unaudited pro forma combining financial statements for the
year ended December 31, 1998 and the nine months ended September 30, 1999
related to the reverse stock split.

<TABLE>
<CAPTION>
PROPOSED RANGE OF STOCK SPLITS
ADJUSTED EPS
EPS -------------------------------------------
AS PRESENTED ONE-FOR-THREE ONE-FOR-FOUR ONE-FOR-FIVE
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER
31, 1998
Simione historical............ (1.42) (4.26) (5.68) (7.10)
Pro Forma Combined............ (1.64) (4.92) (6.56) (8.20)
Total Pro Forma Combined...... (1.03) (3.09) (4.12) (5.15)
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999
Simione historical............ (0.60) (1.80) (2.40) (3.00)
Pro Forma Combined............ (0.73) (2.19) (2.92) (3.65)
Total Pro Forma Combined...... (0.50) (1.50) (2.00) (2.50)
</TABLE>

103
<PAGE> 113

THE BUSINESS OF MCS

OVERVIEW

MCS is primarily involved in the sales and service of business applications
software for the home health services marketplace. Services to customers
include:

- preparation of computer programs and software to meet customer needs,

- providing computer hardware when required,

- installing the system at the customer's business,

- providing continuing support services, and

- providing classroom and computer-based training on its software.

MCS' primary product is MestaMed(TM), a third-party billing, accounting and
inventory control system for providers of home health services. MCS also
develops and offers for sale computer-based training materials for the MestaMed
system and for other home health issues. In addition, MCS Management Services
division offers management services to home health providers to assist them with
billing and reimbursement and the efficient management and utilization of their
systems.

In addition, MCS developed ProfitWorks, a computer system utilized by
building supply, lumber, electrical, plumbing, and hardware suppliers and
outlets and manufacturer's representatives to manage order entry, inventory,
purchasing, accounts receivable, and reporting. The business of ProfitWorks was
transferred to Mestek on September 1, 1999. The transfer included all accounts
receivable, inventory and other assets associated with ProfitWorks. Mestek
assumed all liabilities related to ProfitWorks, including warranty obligations,
and agreed to pay rent for space used by ProfitWorks at MCS' headquarters
through the end of 1999. For a description of the accounting treatment of the
transfer, see Note 11 to the MCS financial statements on page F-49.

MESTAMED

MestaMed is a third-party billing, accounting and inventory control system
for providers of home health services, including:

- home medical equipment

- home health care

- infusion therapy

- rehabilitation programs, and

- hospice services.

MCS' customers are home health care providers who use MestaMed to track the
provision of home medical equipment and services to patients and to meet the
complex requirements necessary to obtain reimbursement from Medicare/Medicaid
and other third-party payors. MCS believes MestaMed is the only system which
integrates information for operational and financial management for all of these
disciplines for providers of home health services.

MestaMed is comprised of approximately 4 to 6 primary functions, such as
billing, and up to 18 additional functions covering a variety of features that a
customer may choose to include in its particular version of the MestaMed system.
MestaMed is available

104
<PAGE> 114

on a variety of computer systems and operating systems including Open VMS, UNIX,
Windows NT, AIX and various Intel, Alpha and RS 6000 computer systems. One of
MCS' customers uses MestaMed Plus, a customized version of MestaMed.

Customers also may enter into maintenance agreements which provide them
with access to customer support, updates to respond to changes in reimbursement
and regulatory policies, and product enhancements. These maintenance agreements
are typically for one year. The software in installations which do not have
maintenance agreements rapidly becomes obsolete.

MestaMed originally was designed for providers of home medical equipment
such as hospital beds, wheel chairs and oxygen and respiratory equipment. Over
time, MCS expanded MestaMed to include additional functions to meet the needs of
other home health care service providers. MestaMed has also been expanded and
improved in part by requests from customers. These features have been
incorporated into upgrades of MestaMed.

REGULATION

Many of the services provided by the home health care industry are paid for
by the federal government under the Medicare and Medicaid programs or by third
parties such as traditional health insurance companies or HMOs. While Medicare
is administered by the federal government, each state administers the Medicaid
program in its state using its own regulations. Each of these organizations has
elaborate regulations regarding the provision of and payment for services. In
addition, the rules for different types of services such as skilled nursing,
durable medical equipment and infusion therapy are substantially different.

Changes in regulations on reimbursement plans require reprogramming to
update affected MestaMed functions. The federal Health Care Financing Agency
(commonly referred to in the industry as "HCFA") released its interim payment
system (commonly referred to in the industry as "IPS") rules in 1997, and it
released its proposed prospective payment system (commonly referred to in the
industry as "PPS") in October 1999. The final PPS rules are scheduled to be
released in July 2000. The IPS rules did not require extensive reprogramming of
MestaMed. MCS estimates it spent no more than $50,000 in modifying MestaMed to
incorporate the IPS regulations. The impact of these changes is discussed under
"-- Customers" on page 107.

MCS believes that the PPS rules could require extensive reprogramming of
MestaMed. Management is still assessing how much it will cost to update MestaMed
to incorporate the PPS rules. Modifying MestaMed to incorporate regulatory
mandates often requires MCS to divert development personnel and other resources
from scheduled program enhancements and product improvements, and MCS expects
that incorporation of the new PPS rules will also divert resources.

For discussion of proposed federal regulations and recently enacted
legislation that could have a significant effect on MCS' business operations,
see "The Business of Simione -- Government Regulation and Health Care Reform" at
page 131.

PROGRAMMING

MestaMed was developed in what are today regarded as "legacy" environments,
a term used to describe environments that are based on outdated programming
technology.

105
<PAGE> 115

Nevertheless, by utilizing tools developed by others, MCS has been able to
sustain and improve the utility of its legacy products and offer those products
on a variety of current computer systems and operating systems, including
Windows NT.

The chart below sets forth the approximate amounts MCS spent on software
development over the past four years. These costs related primarily to product
improvements and customer requested enhancements to existing products, as well
as to remediation of the year 2000-related issues in certain of MCS' products,
as more fully described under the heading "MCS Management's Discussion and
Analysis of Financial Condition and Results of Operations" on page 112.

<TABLE>
<S> <C>
1996........................................ $1.3 million
1997........................................ $1.6 million
1998........................................ $2.0 million
1999(1)..................................... $1.7 million
</TABLE>

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

(1) Nine months ended September 30, 1999

MCS is limited by its programming resources. As of September 30, 1999, MCS
had 30 employees in its development department. On average MCS' programmers have
been with MCS for 6.5 years. Currently, development and support of MestaMed
requires the use of Synergy, a set of legacy oriented tools based on the DIBOL
computer language. It is increasingly difficult to find programmers who are
skilled in these languages. The MestaMed Plus customer has a full-time
programmer dedicated to supporting and enhancing custom software for that
customer.

MestaMed uses older "green-screen" technology instead of a graphical user
interface now common on many Windows-based consumer and business programs.
"Green-screens" require the operator to use the arrow keys and control keys to
navigate. Operators need more training to efficiently input data in a
"green-screen" environment than in a "point and click" graphical user interface
environment.

In the fourth quarter of 1998, MCS began to update MestaMed to use a
graphical user interface for certain application functions. As of the second
quarter of 1999, all file maintenance functions, such as adding a new doctor or
patient to a client's database, have been converted to use a graphical user
interface. MCS is now limiting its MestaMed graphical user interface conversion
efforts in favor of developing a next generation product. MCS has initiated the
design phase of such a product. In the interim, management expects to continue
to support, enhance and upgrade the existing versions of MestaMed.

The new generation of MestaMed will use modern program architecture and
software languages. MestaMed will also be capable of operating in modern
computer network environments including Internet-based operating environments.
To fully replicate the features and functions of MestaMed and to update its
functions to address the new home health care environment expected and the
forthcoming PPS rules will take substantial time and resources. MCS is using
Winfield Software, Inc., an outside software development company, to design and
develop the program specifications for the first phase of the new MestaMed
product. For a more detailed description of the product, see "MCS Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Overview" on page 112.

Management of MCS based its decision to use an outside software development
company in part on the need for MCS' programmers to continue on-going updating
and customization efforts of the current version of MestaMed and their relative
inexperience

106
<PAGE> 116

with current programming languages and structures. Reliance on an outside
software developer subjects MCS to risks that this supplier may not be able, for
whatever reason, to supply the designs and specifications in a timely and
cost-efficient manner, and/or may not be available to support programming
efforts. MCS believes that it could use alternative vendors for these services
at a similar cost to MCS. Switching vendors could result in substantial delays.

Currently the outside software developer is developing a full set of
specifications and screen layouts for the first phase of the new version of
MestaMed together with MCS' product management team. Under the terms of MCS'
agreement with the outside software developer, MCS retains all ownership rights
associated with the specifications and screen layouts produced. Upon receipt of
the full specifications and screen layouts, MCS can elect to have the software
code necessary to implement the specifications and layouts developed by the
outside software developer or by other programmers, including possibly
programmers in countries with lower labor costs than the United States. In
August 1999, MCS received the first portion of the specifications and layouts
from the developer. The cost of the development of the specifications for the
new version of MestaMed is expected to be approximately $300,000 of which
$80,000 has been incurred and expensed as of September 30, 1999. The balance is
expected to be incurred and expensed prior to March 31, 2000. The cost of
implementing the specifications and the actual software coding for the first
phase of the new version of MestaMed is expected to be approximately $1.2
million.

CUSTOMERS

MCS' customers are typically home health care providers. These providers
include:

- home health agencies, which are typically Medicare-certified
organizations which provide a variety of skilled home care services
from nursing to coordination of a caregiving team to administer
comprehensive home care services,

- hospice care organizations, which provide medical, psychological, and
spiritual care for the terminally ill and support for patients'
families,

- intravenous and infusion therapy companies, which deliver medicinal
and nutritional therapies intravenously or through feeding tubes, and

- home medical equipment and supply dealers, which provide home care
patients with products ranging from breathing equipment to wheelchairs
and walkers.

Almost all of MestaMed users purchase primary functions and additional
functions related to the specific business or businesses of the customer. As of
September 30, 1999, approximately 80% of existing MestaMed customers had
purchased the home medical equipment functions, 25% purchased infusion therapy
functions and 15% purchased home health agency functions of one or more types.
In 1998 and the first nine months of 1999, no single customer accounted for more
than 5% of MCS' total revenues and its five biggest customers represented less
than 10% of its total revenues.

In the last two years, there has been significant reduction in the
aggregate number of home health care providers due to consolidation in the
industry and the departure of many home health care providers as a result of the
adoption of the IPS reimbursement regulations and the resulting overall decrease
in Medicare reimbursement. In 1997, there

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were approximately 10,000 Medicare-certified home health care providers as
reported by the National Association for Home Care on its Internet web site at
www.nahc.org. By 1998, there were only approximately 9,000. MCS had
approximately 800 active customers at December 31, 1997, approximately 750
active customers at December 31, 1998 and approximately 570 active customers at
September 30, 1999. An active MCS customer is one which is current on its
payments under its maintenance contract and has logged at least one telephone
call with the MCS telephone support center within the last six months.

As of September 30, 1999, MCS' backlog was approximately $1,010,000,
compared to approximately $840,000 as of September 30, 1998.

MCS' inventory consists primarily of computer hardware and related
equipment, which is sold together with applications software as an integrated
package, and a supply of third-party software licenses. MCS attempts to maintain
a thirty-day supply of many hardware items so that delivery of completed systems
can be made on a timely basis.

COMPETITION

The market for computer software to support the home health services
information systems industry is intensely and increasingly competitive. Because
of the breadth of its overall product offering, MCS competes with many companies
offering alternative solutions for home health services industry needs. Some of
these firms have greater financial, marketing and technical resources than MCS.
They may be able to adapt more quickly to new or emerging technologies and
standards or changes in customer requirements, and they may be able to devote
greater resources to the promotion and sale of their products than can MCS.

MCS believes that the principal competitive factors affecting the home
health information technology market include technical performance and product
attributes such as:

- features and functionality,

- portability,

- reliability,

- ease of use,

- adaptability and scalability,

- product technology platform,

- product reputation,

- product quality,

- customer service and support,

- price,

- ability to integrate with products produced by other vendors,

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- quality and development assurance,

- the effectiveness of sales and marketing efforts, and

- company reputation and financial strength.

Partly as a consequence of the recent consolidation in the home health care
industry, home health care providers tend to offer a wider variety of services.
MCS believes that its integrated MestaMed system offers an advantage in terms of
convenience and lifetime service costs to such providers over competitors'
stand-alone software designed to address single types of services. Unlike
stand-alone systems, MestaMed's integrated system does not require re-keying
patient, insurance and other data if a provider wishes to offer additional
services to an existing patient. However, the initial cost of MestaMed for a
single use is higher than the cost of many of its stand-alone competitors.

MCS believes that the home health care services industry is increasingly
being dominated by hospital based "integrated delivery networks". MCS has not
established a relationship at this time with a supplier of information systems
to hospital-based delivery systems. It has, however, recently entered into an
agreement with the Volunteer Hospital Association whereby its products are
recommended to the Association's members as the preferred solution for their
home health services information systems needs. The Volunteer Hospital
Association has 1,500 member hospitals of whom 600 have home health agencies,
150 are home medical equipment providers and 130 are home infusion providers.

There can be no assurance that MCS will be successful in competing in the
future with respect to these or other factors.

SALES AND MARKETING

MCS markets MestaMed through its 19 person sales and marketing department.
MCS' sales force is split geographically into east and west divisions. Sales
people specialize in selling primarily to home medical equipment and infusion
providers or home health care agencies. Sales people from both areas work
together to sell to integrated providers. Sales people work from their homes. A
small headquarters sales staff sells add-on software modules, accessories,
supplies and training to existing customers.

MCS markets its products through advertisements in two national home health
care journals, attendance at 30 to 40 trade shows per year and direct mail. Word
of mouth from satisfied customers is an important part of MCS' marketing. MCS'
foreign sales are not significant.

TRAINING

MCS offers its customers training at its Pittsburgh location, at its new
training facility in Pleasanton, California and on-site at the customer's
offices. MestaMed addresses the complex needs of the home health care market. As
a result, it is a complex program and requires substantial effort to train
operators. The "green-screen" technology used by current versions of MestaMed
requires substantial training of customers' operators. Initial training is often
included in the purchase price of new systems. On-going training is billed
separately. MCS expects that the next generation of MestaMed will result in
lower training costs because of the "user friendliness" of graphical user
interfaces and integrated help features of modern development tools. As of
September 30, 1999 MCS had approximately

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38 support service analysts who are available to provide training to customers.
MCS offers three types of classroom training:

- Installation and initial training,

- On-site training services, and

- Training seminars.

In 1999, MCS offered nearly 50 seminars to its customers. These range from
classes on network communications to making home health agency businesses more
efficient.

In February 1998, MCS acquired Mentor/CBT, a computer-based training tool
and content set. Computer-based training allows customers the opportunity to
lower their training costs, especially for small numbers of employees such as
new hires, by purchasing a reusable CD-ROM. As of the second quarter of 1999,
MCS is refocusing its training division to provide more generic industry-wide
content in addition to its product specific content for Internet and
computer-based training. Computer-based training generated revenues of
approximately $128,000 in 1998 and approximately $76,000 for the first nine
months of 1999.

CUSTOMER SERVICE

Customers who have entered into a maintenance agreement have access to MCS'
customer service center at MCS' headquarters in Pittsburgh. The customer service
center provides telephone assistance to customers. As of September 30, 1999, MCS
had 68 support service analysts, including the 38 training analysts described
above. MCS is installing an improved voice mail and telephone communication
system and reorganizing its customer service department to deliver "real-time"
customer support to improve customer service and operating efficiency. MCS
expects to have the reorganization completed in early 2000.

CONSULTING

MCS Management Services division offers customers consulting services
relating to improving accounts receivables, collection and reimbursement
functions and generally improving the efficiency of home medical equipment
businesses. This division has three employees with many years of experience in
validating and collecting accounts receivable generated by home medical
equipment providers. It generated revenues of approximately $808,000 in 1998 and
approximately $634,000 through September 30, 1999.

PROPRIETARY RIGHTS AND LICENSES

MCS depends upon a combination of copyrights and restrictions on access to
its trade secrets to protect its proprietary rights. MCS distributes its
products under software license agreements tied to specific computer units which
grant customers a non-exclusive license to MCS products and contain terms and
conditions prohibiting the unauthorized reproduction or transfer of those
products. Generally, MCS products are furnished to customers in both object and
source code form under an obligation of confidentiality. In addition, MCS
generally enters into confidentiality agreements with its management and
programming staff and limits access to and distribution of its proprietary
information.

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<PAGE> 120

While MCS has not federally registered any of its copyrights, it generally
includes copyright notices in its software. Despite these precautions, it may be
possible for unauthorized third parties to copy aspects of MCS products or to
obtain information that MCS regards as proprietary. Unregistered copyrights are
still protected under federal law, although a copyright holder must first
register a copyright to sue another person for infringement of that copyright
under federal law. This may be done immediately prior to bringing a suit.
Obtaining registered copyrights on software often requires disclosure of at
least portions of the underlying software code. In addition, software code
changes so frequently that constant updates would be required to keep a useful
copyright current. Therefore, MCS has elected not to register its copyrights at
this time, although it is free to do so at any time.

MCS believes that, due to the rapid pace of innovation within the software
industry, factors such as its domain knowledge, the technological and creative
skills of its personnel and ongoing reliable product maintenance and support are
more important in establishing and maintaining a leadership position within the
industry than are the various legal protections of its technology.

All trademarks and registered trademarks used herein are the property of
their respective owners.

EMPLOYEES

Because of the importance of systems development to MCS, programming, sales
and support personnel are a primary resource. As of September 30, 1999, MCS had
a total of 137 employees nationwide, consisting of 19 in sales and marketing, 30
in programming and development, 6 in computer-based training, 3 in the
management services division, 68 in support training and education, and 10 in
executive, finance and administration. These figures do not include 9 employees
who worked on ProfitWorks and who were transferred to Mestek on September 1,
1999.

MCS' success is highly dependent on its ability to attract and retain
qualified employees. Competition for employees is intense in the software
industry, and an inability to attract and retain qualified development and sales
personnel, in particular, could postpone product release schedules and adversely
affect MCS' ability to generate revenue.

None of MCS' employees is represented by a labor union or is the subject of
a collective bargaining agreement with respect to his or her employment with
MCS. MCS has never experienced a work stoppage and believes its relations with
its employees are good.

EXECUTIVE OFFICES

MCS' principal executive offices are located at 400 Penn Center,
Pittsburgh, Pennsylvania 15235 and the telephone number is 412-823-7440.

PROPERTIES

MCS leases office space in Pittsburgh (Monroeville), Pennsylvania, which
houses its principal offices and computer facility used in the computer software
development and system design business. MCS recently extended the term of this
lease until September 30, 2005, with the consent of Simione. MCS has also
recently leased office space in

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Pleasanton, California to provide more convenient training facilities and
support for its West Coast customers.

LEGAL PROCEEDINGS

MCS in not presently involved in any litigation which it believes will
materially and adversely affect its financial condition or results of
operations.

MCS MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

In accordance with the requirements of the MCS/Simione merger agreement,
MCS distributed its ProfitWorks segment to Mestek on September 1, 1999. The
distribution has been accounted for as a disposal of a business segment in
accordance with Accounting Principles Board Opinion No. 30. The assets and
liabilities distributed represent the operating assets and liabilities directly
connected to the operation of the ProfitWorks business. The liabilities
distributed exceeded the accounting basis of the assets distributed and,
accordingly, MCS recorded a contribution to paid-in capital at the time of the
distribution.

The business of MCS is related to the sales and service of business
applications software for the home health services information systems
marketplace. Services to customers include:

- preparation of computer programs and software to meet customer needs,

- providing computer hardware when required,

- installing the system at the customer's business,

- providing continuing support services, and

- providing classroom and computer-based training on its software.

MCS' principal product, MestaMed, does not typically require significant
customization or lengthy implementation periods. Accordingly, MCS invoices its
customers for software licenses and related hardware sales after both hardware
and software have been delivered and accepted and related contracts, including
software licenses, have been executed.

MCS invoices its customers for software maintenance and telephone support
(other than first year maintenance and support) on an annual basis. Such
billings are treated as deferred revenues on MCS' balance sheet and are
thereafter amortized off to revenue over twelve months using the straight-line
method.

In addition to software licenses, software maintenance and support, and
related hardware, MCS also provides a number of ancillary services including
training, consulting and after-hours support. Revenues from such services are
recognized monthly as such services are performed and billed.

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Unbilled receivables represent revenues earned in the current period but
not billed until future dates, usually within one month.

In June 1999, MCS entered into an agreement with Winfield Software, Inc. to
develop specifications and design layouts for Phase I of a new generation of
MestaMed. Phase I is intended to produce a next-generation version of MestaMed
comprising billing and operational functionality targeted to home medical
equipment providers. Phase I is divided into two stages.

The first stage, incorporating the specifications and design layouts being
produced by Winfield Software, will cost $300,000, of which $80,000 has been
incurred and expensed as of September 30, 1999. The balance of the first stage
expenses are expected to be incurred and expensed prior to March 31, 2000. The
second stage of Phase I, implementing the specifications and generating the
software code, is expected to cost approximately $1,200,000 and to be completed
prior to December 31, 2000. MCS expects to finance the cost of the second stage
through its own operating cash flows and, to the extent necessary, through the
combined credit facilities of MCS and Simione subsequent to the merger.

MCS expects that upon completion of Phase I, it will have a next-generation
version of MestaMed that it can market to home medical equipment providers.
Phase II, and other subsequent product development phases, will be primarily
aimed at adding product functions to the next-generation MestaMed software
intended for home health agencies, including integrating the point-of-care and
front office functions already contained in the existing, next-generation
CareCentric product, as well as specifying and developing the billing and other
back office functionality similar to that contained in the MestaMed and Simione
STAT II legacy products. Future development phases are also expected to include
specifying and developing other historical MestaMed and STAT II functions,
including those targeted to other home health service lines such as infusion
therapy, hospice, and rehabilitation.

RESULTS OF OPERATIONS

1998 VS 1997

MCS reported reduced revenues, margins and operating profits in 1998
compared to 1997 as indicated in the following table:

<TABLE>
<CAPTION>
1998 % 1997 %
------- ------ ------- ------
($000) ($000)
<S> <C> <C> <C> <C>
Net sales............................. $14,901 100.00% $15,433 100.00%
Gross profit.......................... 5,676 38.09 6,548 42.43
Operating income...................... 1,665 11.17 2,889 18.72
</TABLE>

Reimbursement restrictions imposed upon Medicare providers, MCS' customer
base, in 1998 by the Balanced Budget Amendment adversely affected the home
health care information systems marketplace and resulted in reduced revenues
both industry-wide and for MCS. In addition, costs incurred by MCS in its
efforts to address year 2000 functionality in certain of its products, and in
other product development initiatives, adversely impacted operating profits in
1998. Profit margins were reduced in 1998 relative to 1997 due in part to the
addition of a number of software support specialists in 1998.

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<PAGE> 123

The following table reflects MCS' revenues and gross profits by reference
to its internal product and services classifications:

<TABLE>
<CAPTION>
1998 1997
--------------------------------- ---------------------------------
GROSS GROSS
SALES % MARGIN % SALES % MARGIN %
------- ------ ------ ----- ------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consulting services.... $ 720 4.83% $ 446 61.94% $ 420 2.72% $ 232 55.24%
Time & material
billing.............. 1,342 9.01 112 8.35 1,188 7.70 119 10.02
Maintenance............ 3,475 23.32 184 5.29 3,268 21.18 477 14.60
Educational services... 543 3.64 49 9.02 496 3.21 45 9.07
Other services......... 884 5.93 32 3.62 922 5.97 65 7.05
MestaMed system
software............. 4,294 28.82 3,412 79.46 5,084 32.94 4,420 86.94
MestaMed system
hardware............. 1,134 7.61 126 11.11 1,606 10.41 145 9.03
Add-on hardware........ 972 6.52 88 9.05 1,390 9.01 122 8.78
Add-on software........ 1,537 10.32 1,227 79.83 1,059 6.86 923 87.16
Total Sales.......... $14,901 100.00% $5,676 38.09% $15,433 100.00% $6,548 42.43%
</TABLE>

The cost of sales for Maintenance includes the cost of MCS' support staff
plus a proportionate share of MCS' product development staff (exclusive of new
product development staff). Revenues related to MestaMed system hardware
represent a portion of revenues from sales of MestaMed systems. The margins
reported for MestaMed system hardware are relatively narrow reflecting MCS'
assumption that its principal "value added" lies in its MestaMed software. The
gross profit margins for Maintenance and MestaMed systems software were reduced
in 1998 compared to 1997 due to increased spending on MCS' support and product
development infrastructure.

MCS' selling expenses, as a percentage of total revenues, increased from
12.47% in 1997 to 14.92% in 1998 due to reduced sales in 1998, as more fully
discussed above, and increases in sales personnel. MCS added four sales
representatives and a marketing coordinator in 1998. MCS' general and
administrative expenses, as a percentage of total revenues, decreased from
11.24% in 1997 to 10.45% in 1998 due to a reduction in MCS' bonus provision for
1998.

1997 VS 1996

MCS reported improved revenues and operating profits in 1997 compared to
1996 as indicated in the following table:

<TABLE>
<CAPTION>
1997 % 1996 %
------- ------ ------- ------
($000) ($000)
<S> <C> <C> <C> <C>
Net sales................................... $15,433 100.00% $14,636 100.00%
Gross profit................................ 6,548 42.43 6,286 42.95
Operating income............................ 2,889 18.72 2,814 19.23
</TABLE>

Increased revenues in 1997 were principally the result of $230,000 in
increased sales of add-on software, and $340,000 in increased revenues from the
Management Services division that was added in 1996. The Management Services
division provides consulting services to home medical equipment providers
regarding accounts receivable and reimbursement management.

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<PAGE> 124

The following table reflects MCS' revenues and gross profits by reference
to its internal product and services classifications:

<TABLE>
<CAPTION>
1997 1996
--------------------------------- ---------------------------------
GROSS GROSS
SALES % MARGIN % SALES % MARGIN %
------- ------ ------ ----- ------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consulting services... $ 420 2.72% $ 232 55.24% $ 128 0.88% $ 13 10.16%
Time & material
billing............. 1,188 7.70 119 10.02 1,047 7.15 86 8.21
Maintenance........... 3,268 21.18 477 14.60 3,040 20.77 156 5.13
Educational
services............ 496 3.21 45 9.07 350 2.39 32 9.14
Other services........ 922 5.97 65 7.05 794 5.42 40 5.04
MestaMed system
software............ 5,084 32.94 4,420 86.94 5,463 37.33 4,940 90.43
MestaMed system
hardware............ 1,606 10.41 145 9.03 1,181 8.07 107 9.06
Add-on hardware....... 1,390 9.01 122 8.78 1,804 12.33 164 9.09
Add-on software....... 1,059 6.86 923 87.16 829 5.66 748 90.23
Total sales......... $15,433 100.00% $6,548 42.43% $14,636 100.00% $6,286 42.95%
</TABLE>

The cost of sales for Maintenance includes the cost of MCS' support staff
plus a proportionate share of MCS' product development staff (exclusive of new
product development staff). Revenues related to MestaMed system hardware
represent a portion of revenues from sales of MestaMed systems. The margins
reported for MestaMed system hardware are relatively narrow reflecting MCS'
assumption that its principal "value added" lies in its MestaMed software. The
gross profit margin on Maintenance improved in 1997 compared to 1996 as a result
of increased revenues and relatively unchanged fixed costs.

MCS' selling expenses as a percentage of total revenues increased slightly
from 12.26% in 1996 to 12.47% in 1997. The principal factor affecting this
increase was an increase in commission expense. MCS' general and administrative
expenses, as a percentage of total revenues, decreased slightly from 11.46% in
1996 to 11.24% in 1997.

RESULTS OF OPERATIONS (UNAUDITED INTERIM DATA)

In the nine-month period ended September 30, 1999, MCS reported increased
revenues and margins, but reduced operating income compared to the nine-month
period ended September 30, 1998, as indicated in the following table:

<TABLE>
<CAPTION>
NINE-MONTHS NINE-MONTHS
ENDED ENDED
SEPTEMBER 30, 1999 % SEPTEMBER 30, 1998 %
------------------ ------ ------------------ ------
($000) ($000)
<S> <C> <C> <C> <C>
Net sales................... $12,519 100.00% $10,962 100.00%
Gross profit................ 4,850 38.74 3,990 36.40
Operating income............ 697 5.57 1,124 10.25
</TABLE>

Sales of MCS' core MestaMed product increased significantly in the first
nine months of 1999, accounting for most of MCS' revenue growth. Significant
product development and product support related costs were also incurred during
this period resulting in decreased operating income for MCS despite the growth
in revenues. MCS is pursuing a number of product development initiatives
designed to assist with the migration of its core products to more modern
operating system environments. MCS is also undertaking a

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redesign of its product support infrastructure with a view to improving the
quality and timeliness of the support function.

The following table reflects MCS' revenues and gross profits by reference
to its internal product and services classifications:

<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 1999 SEPTEMBER 1998
------------------------- -------------------------
GROSS GROSS
SALES % MARGIN % SALES % MARGIN %
------- ------ ------ ----- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consulting
services........... $ 550 4.39% $ 295 53.64% $ 511 4.66% $ 309 60.47%
Time & material
billing............ 972 7.76 20 2.06 1,028 9.38 84 8.17
Maintenance.......... 2,784 22.24 63 2.26 2,632 24.01 138 5.24
Educational
services........... 330 2.64 30 9.09 361 3.29 33 9.14
Other services....... 602 4.81 11 1.83 652 5.95 23 3.53
MestaMed system
software........... 4,408 35.21 3,408 77.31 2,795 25.50 2,275 81.40
MestaMed system
hardware........... 953 7.61 76 7.97 1,054 9.62 95 9.01
Add-on hardware...... 786 6.28 72 9.16 747 6.81 68 9.10
Add-on software...... 1,134 9.06 875 77.16 1,182 10.78 965 81.64
Total
sales..... $12,519 100.00% $4,850 38.74% $10,962 100.00% $3,990 36.40%
</TABLE>

The cost of sales for Maintenance includes the cost of MCS' support staff
plus a proportionate share of MCS' product development staff (exclusive of new
product development staff). Revenues related to MestaMed system hardware
represent a portion of revenues from sales of MestaMed systems. The margins
reported for MestaMed system hardware are relatively narrow reflecting MCS'
assumption that its principal "value added" lies in its MestaMed software. The
gross profit margins for Maintenance and MestaMed systems software were reduced
in the first nine months of 1999 compared to the first nine months of 1998, due
to increased spending on MCS' support and product development infrastructure.

MCS' selling expenses, as a percentage of total revenues, increased from
14.51% in the first nine months of 1998 to 17.08% in the first nine months of
1999 due to the cost associated with engaging an outside marketing consultant to
conduct market research and create strategic planning initiatives for MCS.
Selling expenses were also affected by a revised compensation program for sales
personnel which increased salaries in 1999. MCS' general and administrative
expenses, as a percentage of total revenues, decreased from 10.14% in the first
nine months of 1998 to 9.44% in the first nine months of 1999 reflecting the
effect of increased revenues.

MCS expended approximately $831,000 on new product development in the first
nine months of 1999. These expenditures included the following:

- approximately $507,000 on Mentor, an integrated, networked system for the
development, administration, and delivery of interactive, multimedia
computer based training. No further development costs on this project are
anticipated.

- approximately $134,000 on the development of an Open Data Base
Connectivity (ODBC) interface to MestaMed. The project was 90% complete
at September 30, 1999, and will be available for sale in the first
quarter of 2000. MCS expects that no further development monies will be
expended on the ODBC project.

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- approximately $110,000 on the conversion of MestaMed file maintenance
programs into a Graphical User Interface (GUI), Windows compatible
format. MCS expects that GUI development will continue until the
completion of the next-generation version of MestaMed, but GUI
development costs through the end of 2000 are not expected to be
substantial.

- approximately $80,000 on the development of a next generation of
MestaMed. MCS expects to spend an additional $220,000 to complete Phase I
of this project by March 31, 2000, and an additional $1.2 million to
complete Phase II of this project by December 31, 2000.

In addition to the product development costs referenced above, MCS currently
anticipates spending approximately $160,000 on other product development
projects in 2000.

YEAR 2000 DISCLOSURE

The following information is being provided as a Year 2000 Readiness
Disclosure Statement, and is subject to the provisions of the Year 2000
Information and Readiness Disclosure Act.

MCS released a year 2000 compliant version of its principal product,
MestaMed, in September 1998, known as the MestaMed Version II.8. Version II.8 is
capable of accurately processing calendar date information, including
calculating, comparing and sequencing to or from dates in the twentieth and the
twenty-first centuries.

MestaMed runs on a number of different software operating systems and
hardware platforms. The principal operating environments include Alpha/VMS, from
Compaq (formerly Digital Equipment Corporation), RS6000/AIX from IBM,
Pentium/UNIX from Intel and the Santa Cruz Operation (SCO), and Pentium/Windows
NT from Intel and Microsoft. These hardware and software suppliers have
represented to the public that their respective operating environments are
generally year 2000 compliant.

MCS has worked closely with its customers covered under a current software
maintenance and support agreement, to apply the necessary operating system
patches and to install MestaMed Version II.8. Most of these customers have
completed this process and several have subsequently performed their own
independent year 2000 testing. No year 2000 related problems have been reported
as a result of this additional testing. A small number of eligible customers
remain to be upgraded.

A small percentage of MCS' customers are running MestaMed on relatively
older platforms, primarily a discontinued version of SCO UNIX running on old
Intel X86 processors, for which the vendors earlier announced that they would
not be providing the necessary changes to make these environments year 2000
compatible. Since that announcement in the fall of 1998, MCS has worked
diligently to disclose this situation to these customers and to encourage them
to upgrade to similar, year 2000 compatible hardware and software platforms. MCS
further notified these customers that due to this circumstance outside MCS'
control, MCS would not be able to renew their annual software maintenance and
software contracts unless they so upgraded.

MCS does not expect its customer base to experience broad-scale, year
2000-related failures for any reasons within MCS' control or influence. MCS'
worst-case scenario would be limited to a relatively small number of customers
who for unanticipated reasons might experience a year 2000-caused failure. To
cover such a circumstance, MCS developed a

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year 2000 contingency plan that required special teams to be on-call over the
New Year's holiday period. Should a customer experience what it believes to be a
year 2000-caused failure, the MCS year 2000 contingency team will confirm that
any such failures are in fact year 2000-related and, as necessary, will correct
any defects in MestaMed and/or work with the operating system and hardware
vendors to provide any corrections that may be their responsibility. For the
reasons mentioned above, MCS does not believe that its exposure to its customer
base in relation to year 2000 functionality in its products is or will be
material.

MCS recognizes that both its customers and its suppliers are exposed to
many year 2000 related risks in addition to the risks discussed above regarding
MCS' products. MCS does not have any reliable means to measure the risks faced
in this regard by its customers or suppliers. Should the impact of these
unrelated year 2000 risks be severe for one or more of its key suppliers or one
or more of its key customers, the impact on MCS' operations could be material.

MCS' STATE OF READINESS. For its internal business applications systems
and hardware, MCS believes that from a year 2000 readiness perspective it has
only its financial accounting systems to address. In light of the proposed
merger with Simione, MCS plans to integrate its accounting system with Simione's
accounting system. Due to the delays encountered relative to the planned closing
date of the merger, MCS has implemented for its internal use its upgraded year
2000 compliant general ledger, accounts payable and payroll modules and its
MestaMed Version II.8 for order entry and accounts receivable.

COSTS INCURRED RELATIVE TO YEAR 2000 SOLUTIONS. MCS estimates that its
total cost of addressing year 2000 functionality was approximately $750,000 over
the two-year period ended December 31, 1999. Of this total, MCS had incurred
approximately $598,000 as of December 31, 1998. For the nine-month period ending
September 30, 1999, MCS additionally incurred approximately $102,000.

LIQUIDITY AND CAPITAL RESOURCES

MCS is a wholly owned subsidiary of Mestek, Inc., a public company traded
on the New York Stock Exchange. As such, MCS has historically distributed
substantially all of its free cash flow to Mestek in the form of an annual
dividend. Dividends paid were $161,000 in 1999, $770,000 in 1998, $2,337,000 in
1997 and $2,326,000 in 1996. MCS does not expect to pay dividends in the future.

MCS' historical access to capital has been through an unrestricted
intercompany account with Mestek. Access to capital in this manner will remain
in place for normal recurring operating expenditures through the date of closing
of the merger with Simione. MCS has historically generated positive cash flow
for Mestek each year and, as such, MCS owed no intercompany debt to Mestek, or
other long-term debt, as of December 31, 1998 or December 31, 1997. Accordingly,
MCS reported no interest expense in either 1998 or 1997. MCS' net cash flow to
Mestek subsequent to the date of the merger agreement in May 1999 has been
negative resulting in a net payable to Mestek of $619,000 as of September 30,
1999. As more fully described in Note 1 to the MCS financial statements, if such
payable to Mestek remains outstanding at the closing it will become due and
payable at the closing.

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A number of factors adversely impacted MCS' cash flow during the nine
months ended September 30, 1999 including (1) a change in commission payment
policy from quarter-end to month-end ($344,000), (2) a net reduction in customer
deposits ($201,000) between December 31, 1998 and September 30, 1999, due to an
unusually large receipt of deposits in December 1998, (3) deposits paid by MCS
in relation to software development work being undertaken in 1999 ($127,000) (as
more fully described in Note 4 to the MCS financial statements on page F-44),
(4) a net reduction in trade payables since December 31, 1998 of $177,000,
principally as a result of a change in payroll deposit procedures which
accelerated the payment of monthly payroll tax deposits, (5) the payment of a
dividend in relation to the period January 1, 1999 to March 26, 1999 ($161,000),
and (6) capital spending in the nine months ended September 30, 1999 of
$206,000, of which $138,000 was for computer equipment and furniture, $25,000
was for a new exhibit booth, $18,000 was for software development tools, and
$7,000 was for the purchase of sales tracking software for remote sales
representatives.

MCS' liquidity has also been negatively effected by the financial
conditions prevailing in the home health care marketplace which have
deteriorated over the last several years due to reduced levels of Medicare
reimbursement for home care services. MCS' "days sales outstanding", a measure
of liquidity which expresses a company's receivables in terms of the number of
days of revenue contained therein have increased as follows:

<TABLE>
<S> <C>
1997 80 days
1998 90 days
1999 (nine months) 94 days
</TABLE>

Most of MCS' MestaMed customers are dependent upon Medicare, Medicaid and/or
managed care reimbursement policies, which determine both the level of
reimbursements allowed and timing of reimbursement payments, and MCS' liquidity,
in turn, is directly affected by these policies. While there have been some
recent indications that future reimbursement levels for the home health care
industry may be increased slightly over those which prevailed in 1999,
significant uncertainty remains as to the federal government's long term policy
in this area and accordingly the effects on MCS are difficult to predict.

If the merger is consummated, MCS will no longer have unrestricted access
to capital from Mestek. MCS, as a division of Simione, will be dependent upon
Simione for all its capital needs, including support for the product development
initiatives described earlier. Simione's principal credit facility is a $5.0
million receivables backed commercial line of credit, under which Simione must
maintain certain levels of liquidity and aging of accounts receivable. At
December 31, 1999, Simione had a maximum borrowing capacity of approximately
$1.2 million from this facility. It is expected that MCS' accounts receivable,
inventory, equipment and general intangibles will supplement the "borrowing
base" established under Simione's principal credit facility resulting in
additional borrowing capacity. There can be no assurance, however, that such
additional borrowing capacity will be sufficient for MCS' needs. The cost of
capital, in any event, will be substantially higher than that reflected in MCS'
historical financial statements since MCS has operated historically as a wholly
owned subsidiary of Mestek and, as such, incurred no interest expense. MCS'
long-term access to capital will depend in large part on the success of its
pending next-generation MestaMed product, the collective success of other
divisions of Simione, the ability of MCS to attract capital within the Simione
organization, and the overall financial condition of the home health care
providers which constitute MCS' and Simione's customers.

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<PAGE> 129

THE BUSINESS OF SIMIONE

OVERVIEW

Simione is a leading provider of systems and services designed to help home
health care providers to more effectively operate their businesses and compete
in a managed care environment. Simione offers several flexible software
solutions. Each of these solutions provide a basic set of software applications,
and several specialized modules which can be added based on customer demand.
These software solutions are 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,
Simione's home health care consulting services assist providers in addressing
the challenges of:

- reducing costs;

- maintaining quality;

- streamlining operations;

- re-engineering organizational structures; and

- analyzing and performing due diligence in mergers and acquisitions.

During 1998, Simione had over 2000 customers nationwide, including:

- hospital-based companies;

- free-standing home health care providers;

- alternate-site care organizations;

- home medical equipment providers;

- integrated delivery systems; and

- government-managed organizations.

Simione formerly provided comprehensive agency support services which
included administrative, billing and collection, training, reimbursement and
financial management services, among others. Simione discontinued this line of
business in December 1999.

For information regarding Simione's history and management's plan to
improve Simione's performance, see Notes 1 and 9 to Simione's Notes to
Consolidated Financial Statements beginning on page F-8.

Unless the context otherwise requires, references to Simione include
Simione Central Holdings, Inc. and its subsidiaries. Our executive offices are
located at 6600 Powers Ferry Road, Atlanta, Georgia 30339 and the telephone
number is 770-644-6700.

RECENT DEVELOPMENTS

Effective March 26, 1999, Simione purchased substantially all the assets of
Tropical Software Services, a Windows based home medical equipment management
system. The acquisition was accounted for using the purchase method for
financial reporting purposes. The purchase price of approximately $1,963,000 has
been allocated to the assets acquired

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and liabilities assumed including $1,951,000 of purchased technology. Purchased
technology is being amortized over an estimated three years useful life.

On July 12, 1999, Simione entered into an agreement to acquire CareCentric
Solutions, Inc. pursuant to a merger of CareCentric into a wholly-owned
subsidiary of Simione. The merger was completed on August 12, 1999. See
"Background of the Merger" on page 46 and "Proposal 3 for Simione
Stockholders -- To Approve the Issuance Upon Conversion of Series A Preferred
Stock of Shares of Common Stock, as Required by Nasdaq Rules" beginning at page
170 for a description of the terms of the CareCentric merger.

CareCentric was a leading provider of point-of-care systems in the home
health care information systems' marketplace. Simione believes that
CareCentric's system, The Smart ClipBoard(TM), is the home health care
industry's leading, Windows 95, pen-compatible, point-of-care clinical
information system. The financial statements of CareCentric are included in this
joint proxy statement/prospectus.

INDUSTRY OVERVIEW

Home health care is an important part of the health care industry's
continuum of care services. The increasing importance of home health care has
principally been a result of significant economic pressures within the health
care industry. In recent years, U.S. health care expenditures have increased
rapidly. In response to these escalating expenditures, payors, such as Medicare
and managed care organizations, have applied increasing pressure on physicians,
hospitals and other providers to contain costs. This pressure has led to the
growth of lower cost alternate-site care, such as home health care, and to
reduced hospital admissions and lengths of stay. In addition, home health care
has grown rapidly as a result of advances in medical technology, which have
facilitated the delivery of services in alternate sites, demographic trends,
such as an aging population, and preferences among patients to receive health
care in their homes.

Home health care consists of many elements, including:

- skilled nursing;

- durable medical equipment;

- intravenous and infusion therapy; and

- hospice.

Historically, this industry has been highly fragmented and characterized by
small, local providers offering a limited range of services. With the advent of
managed care and integrated delivery systems, home health care providers have
had to expand their geographic scope and range of product and service offerings.
In addition, the overall growth in the home health care industry has allowed
providers to grow and realize increased operating efficiencies. As a result of
these developments and legislation and regulatory pressures, the home health
care industry has been in a period of rapid consolidation.

Medicare traditionally reimbursed a majority of home health care services
at amounts that could not exceed the costs of services provided, resulting in a
direct relationship between the number of home health care visits and
reimbursement. However, the Balanced Budget Act of 1997, enacted on August 5,
1997, contained provisions that significantly change the manner in which home
health agencies and home care services

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will be reimbursed in the future by Medicare. The legislation created the
interim payment system which lowered the cost per visit limitations and created
restrictions on the amount of cost reimbursement per Medicare beneficiary. In
late January 1998, the Health Care Financing Administration ("HCFA"), the
federal agency that administers Medicare reimbursement for the home health care
industry, published a notice revising the schedule of limits on home health
agency costs for cost reporting periods beginning on or after October 1, 1997,
which reduced the cost per visit limitations. At the same time, HCFA issued a
rule setting forth the surety bond and capitalization requirements for home
health agencies.

As mandated by the Balanced Budget Act, HCFA has also announced the
implementation, effective October 1, 2000, of a prospective payment system,
which would limit reimbursement to a fixed amount for all services rendered per
episode of care. The interim payment system has had a significant impact on the
home health industry, resulting in numerous closings of home health agencies,
consolidation of agencies and decisions by home health agencies to no longer
participate in the Medicare program or serve Medicare beneficiaries. Further,
once fully-implemented, the prospective payment system could also potentially
impact the home health industry in the same manner. In addition to the impact of
the interim payment system and the prospective payment system, the growth in the
number of Medicare members enrolling in managed care plans, which have also
begun to take measures to contain costs, will have a significant impact on how
providers may operate profitably. The uncertainty in the home health care
industry concerning these changing regulations adversely impacted Simione's
business in 1998 as many providers dissolved or delayed purchasing decisions.
Simione cannot predict how new regulations will impact its business in the
future.

As a result of consolidation and measures to address ongoing cost
pressures, home health care providers will increasingly require enhanced
management expertise, specialized industry knowledge and standardized financial,
operational and clinical information in order to compete. Simione believes that
many existing home health care information systems are inadequate to address the
changing needs of home health care providers. Generally, these systems were
designed to generate patient billing information and cost reports for Medicare
reimbursement and, as a result, may be unable to provide the detailed
information required for meaningful business analyses.

THE SIMIONE CENTRAL SOLUTIONS

Simione offers a comprehensive set of solutions to address the changing
needs of home health care providers. These solutions include:

- information systems and support; and

- consulting services.

Simione's systems and services are designed to enable home health care
providers to generate and utilize comprehensive financial, operational and
clinical information and address organizational issues in order to make informed
decisions, more effectively operate their businesses and compete in a managed
care and/or prospective payment system environment. These solutions can be
packaged and customized to serve the individual needs of customers.

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STRATEGY

Simione's objective is to enhance its position as a leading provider of
solutions to the home health care industry. Principal elements of Simione's
strategy include:

- LEVERAGE EXISTING CUSTOMER BASE. Simione currently has a base of over
2000 customers nationwide. Simione believes that a significant
opportunity exists to cross-sell its existing systems and services as
well as introduce new systems and enhancements.

- GENERATE RECURRING REVENUE. Simione generates recurring revenue through
a combination of annually renewable maintenance agreements and multi-year
service contracts. These sources of revenue collectively accounted for
14% of Simione's net revenues in 1998. Simione attempts to maximize
recurring revenue opportunities through a combination of periodic system
enhancements and comprehensive customer service.

- CAPITALIZE ON CHANGING INDUSTRY DYNAMICS. As the home health care
industry consolidates, Simione believes it is well positioned to increase
its market share by leveraging its existing relationships with large
providers such as Tenet, Advocate and Mercy. Simione also believes its
comprehensive solutions will become increasingly important to home health
care providers as they address the challenges presented by health care
reform and as integrated delivery systems become more prevalent.

- EXPAND THROUGH ACQUISITIONS AND STRATEGIC ALLIANCES. Through selective
strategic acquisitions Simione intends to continue to expand its system
and service offerings, expand its customer base and increase its market
share. Simione also intends to selectively establish strategic alliances
to expand its system and service offerings and grow its distribution
capabilities.

INFORMATION SYSTEMS

Simione offers several comprehensive and flexible software solutions to
meet various customers' needs. Each of these solutions offers a core platform of
software applications which address the complete business requirements of home
health care providers. These applications are designed to:

- provide real-time reporting capabilities;

- speed information processing;

- reduce redundant data entry;

- improve efficiencies; and

- assist management with making informed decisions.

In addition to the core elements, Simione offers several specialized
modules that can be integrated with the Simione's core applications based on
customer demand.

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CORE SOFTWARE SOLUTIONS. Simione's core software solutions are as follows:

STAT2. A complete, flexible and fully integrated home health care
management system. The STAT2 core set of software applications includes:

<TABLE>
<S> <C>
Client Intake Billing/Accounts Receivable
Treatment Plans General Ledger
Employee Tracking Accounts Payable
Scheduling Payroll
Electronic Transmission/Remittance
</TABLE>

This core set can be enhanced with specialized features including
hospice, IV Therapy, durable medical equipment, imaging, telephony and cost
reporting. The STAT2 system allows a customer to exchange clinical and
financial information with external systems in either a real-time or batch
mode through interface engine technology or customized interfaces. STAT2 is
designed to increase staff productivity by fully integrating the system's
clinical, financial and operational applications and thereby eliminating
redundant data entry. STAT2 has the ability to customize system features as
well as the ability to expand with the customers' business. A major feature
of the system is its real-time reporting capabilities.

Durable Medical Equipment 6.3 A PC-based software application for
home medical equipment and medical supply businesses. The durable medical
equipment 6.3 core set of software applications includes:

<TABLE>
<S> <C>
Order Entry Billing
Inventory Management Accounts Receivable
General Ledger Purchase Orders
</TABLE>

Durable medical equipment 6.3 features the following add-on features:
retail sales, bar coding and IV therapy. Versions of this software are
available for any size operation. The software provides easy to use data
import/export capabilities.

Tropical. Tropical Management System is a fully integrated home
medical equipment solution. Approximately 30 clients use it to manage their
home medical equipment operations. The Tropical product is based on
client/server architecture utilizing industry standard Microsoft Windows
and SQL Server technologies, providing all the features necessary to manage
a home medical equipment business. This includes retail and rental sales,
scheduling, accounts receivable, accounts payable, claims processing,
inventory control plus reporting and documentation.

Simione discontinued marketing its NAHC IS system during 1998 and
determined to concentrate its development efforts around windows based
technology.

SPECIALIZED SOFTWARE SOLUTIONS. Simione offers the following specialized
software solutions:

The Smart ClipBoard(TM) Home Care System. The Smart ClipBoard is a
clinical information system that enables home health agencies to compete
effectively in the changing health care delivery environment. Originally
designed in 1993, it was the first home health point-of-care information
system developed around pen-based computer technology and home health
clinical processes. The Smart ClipBoard provides a clinical solution
designed to assist home care providers in co-managing the cost and

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quality of the care they deliver by helping them understand their clinical
and administrative processes. The Smart ClipBoard software suite was
released in 1996.

By using The Smart ClipBoard, an agency can use and modify its
existing clinical assessment criteria and care plans. As a result,
structured clinical data is presented and captured in a user-friendly
manner at the point-of-care. Finally, a suite of data analysis reports and
ad-hoc queries help to facilitate clinical process understanding and
improvement. The Smart ClipBoard's point-of-care features assist clinicians
in capturing structured documentation of, and variance from, planned
patient care processes. Other features allow clinicians to have access to
patient caseload data and libraries of medical information. Through a
partnership with Outcome Concept Systems, the system provides entry,
validation, submittal and other OASIS and ORYX reporting capabilities.

The Smart ClipBoard includes several administrative and clinical
components to help improve workflow processes throughout an agency:

- Patient Administration;

- Scheduling;

- Orders Management; and

- Outcomes Management & Reporting.

In 2000 Simione intends to interface Smart ClipBoard to the billing
modules of STAT2 and develop further operational management enhancements
for the system.

REMM. Simione is currently finalizing REMM, a client/server, Windows
based application designed to meet the demanding task of resource
scheduling in home care. A graphical calendar user interface and wizard
style display easily guide users through the scheduling process. Resource
assignment for encounters with clients extends beyond the personnel
disciplines and users may define multiple encounters such as:

- deliveries;

- hospital admissions;

- meals on wheels;

- telephone wellness checks;

- in-service lectures; and

- staff meetings.

The user determines the level of detail needed for attachment to each
encounter. This includes treatments, labs, supplies, medications,
directions and more. REMM also tracks and validates service area, workload,
availability, competency, skill levels and preferences for encounter
matching. Licensure and certifications are also tracked and validated.
Custom report screens allow the user to tailor the information provided on
any of the numerous system reports.

STAT2 Medical Records. STAT2 Medical Records is designed to help
STAT2 customers improve patient care while reducing costs through improved
productivity. STAT2 Medical Records allows field staff, using handheld
point-of-care units, to

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enter, update and transmit patient information from remote locations to the
home office via modem connection, updating the central STAT2 system on a
real-time basis. Customers can use STAT2 Medical Records to measure
outcomes, establish or import clinical pathways and report on variances to
a care plan. STAT2 Medical Records is comprised of modules which are
integrated with other clinical, financial and operational STAT2 system
software modules for collaborative reporting and analysis.

SC STATScan. SC STATScan is a Windows-based imaging system which
scans and stores paper forms into a customer's system. Documents are
scanned, digitized, stored on optical disks, indexed according to user
defined fields and recalled for instant use. SC STATScan also provides an
automated workflow application which allows the user to define the flow of
image information to various groups within the organization. Additionally,
SC STATScan provides its customers with increased security and control of
information, faster information retrieval and an enhanced ability to share
information in a real-time environment.

TEMS. TEMS is an interactive voice response system which records
visit, mileage, payroll and billing data from field staff using telephones
in place of computers. This data can be automatically exported into a
customer's payroll and billing applications. TEMS is designed to provide
users with a more cost effective way to record data and produce records and
can accelerate a customer's billing activities. TEMS is currently the
subject of an infringement inquiry by a telecommunications company.

PharmWorks. PharmWorks is a complete pharmacy management solution
designed to meet the needs of infusion, retail, mail order, institutional,
and hospital outpatient pharmacies. This PC-based application is scalable
and able to meet the business requirements of both large and small
organizations. The software and hardware components are able to accommodate
virtually unlimited growth for the pharmacy. PharmWorks has a modular
architecture and is built around a relational data base for maximum user
flexibility and performance. The core programs that comprise the
application are:

- pharmacy management;

- accounts receivables;

- material management; and

- durable medical equipment.

Additional features are available for Electronic Claims Submission,
Manufacturing Management, and Nursing Home Management. With over 100 reports and
data download capability, the system allows for quick access to the most
critical information.

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SERVICE SOLUTIONS

SOFTWARE SUPPORT SERVICES. Simione believes that providing comprehensive
software support services to customers is critical to its success in the home
health care industry. Simione employs approximately 88 professionals dedicated
to this effort who provide the following services:

<TABLE>
<S> <C>
Implementation: Implementation services include an assessment of
existing customer business processes, project
planning, system training, business process
re-engineering and data conversion assistance.
Training: Training services are offered on a continuing basis to
existing customers either at the customer's site or at
a Simione location.
Software Support: Simione offers on-call telephone software support
seven days a week and provides maintenance releases on
a periodic basis. Releases of software enhancements
are generally made available to customers annually.
These enhancements include unspecified improvements
and regulatory data updates. This support does not
include major functional or computer platform changes
which would be offered to customers as new product
sale opportunities.
Technical Consulting: Simione provides software customization and
integration, technical audits of the customer's
information systems, integration and network planning
and strategic and tactical information systems
planning.
</TABLE>

Support services represent a source of recurring revenue, as these services
are provided through annual renewable service contracts. Other services are
generally charged on a time and materials usage basis. Simione's technical
personnel also provide on-site and on-call hardware support.

CONSULTING SERVICES. Simione's home health care consulting services assist
providers in addressing the challenges of a managed care and/or PPS environment,
such as reducing the cost of delivering care while maintaining or improving
quality of care, streamlining operational structures and re-engineering
organizational structures. Simione's consulting operations, which were acquired
in January 1996, have been providing consulting advice to the home health care
industry since 1963. The consulting staff is comprised of approximately 35
professionals with home health care industry specific experience. Consulting
engagements generally focus on:

<TABLE>
<S> <C> <C>
Strategic Planning Marketing Studies Acquisition Due
Operational Reviews Business Valuations Diligence
Reimbursement Organizational Reviews Quality Assurance
Consultation Management Reviews
Medicare Compliance Medical Records Operational
Re-engineering
Cost Report Preparation
</TABLE>

Simione provides consulting services on a time and materials usage basis.
Simione believes that its consulting services group effectively complements its
software and services, provides a valuable outlook on the changing home health
care industry and is a source of innovative ideas for Simione's information
systems enhancements. Furthermore, consulting services are designed to build new
customer relationships and provide opportunities for the sale of additional
information systems and services.

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CUSTOMERS

During 1998, Simione had over 2000 customers nationwide, including:

- hospital-based companies;

- home health care providers;

- alternate-site care organizations;

- home medical equipment providers;

- integrated delivery systems; and

- government-managed organizations.

Columbia/HCA accounted for 35% of Simione's revenues in 1998 and 11% of
Simione's revenues in the nine months ended September 30, 1999. See "Simione
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Overview" at page 138 for a discussion of Simione's relationship
with Columbia/HCA. No other customer is expected to account for 10% or more of
Simione's consolidated net revenues during the year ending December 31, 1999.

SALES AND MARKETING

Simione markets its systems and services through a direct sales force which
consists of one senior vice president, one vice president and 9 sales and
telemarketing representatives located throughout the United States. Simione also
employs a marketing and sales support staff of 2 people to assist its sales
force. Recognizing the importance of maintaining good communication and
obtaining valuable input from its customers, Simione sponsors national user
group meetings. Regional user group meetings are also held to discuss customer
comments, suggestions, industry trends and related system issues.

BACKLOG

Simione had backlog of $1.6 million on September 30, 1999, $4.1 million on
December 31, 1998, and $7.1 million on December 31, 1997. Backlog consists of
the unrecognized portion of contractually committed software license fees,
hardware, estimated installation fees and professional services. The length of
time required to complete an implementation depends on many factors outside the
control of Simione, including the state of the customer's existing information
systems and the customer's ability to commit the personnel and other resources
necessary to complete the implementation process. As a result, Simione may be
unable to predict accurately the amount of revenue it will recognize in any
period and, therefore, can make no assurances that the amounts in backlog will
be recognized in the next twelve months.

TECHNOLOGY

The STAT2 system operates on multiple operating systems, including Windows,
and is designed for use on microcomputers, network PCs, and IBM and DEC computer
hardware. The STAT2 system allows a customer to exchange clinical and financial
information with external systems in either an immediate connection or by
accumulating data to transmit later in batches or batch mode.

The durable medical equipment 6.3 system operates on the MS-DOS and Windows
operating systems and is designed for use on microcomputers or network PCs.

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Simione's systems are dependent upon many third-party software and hardware
products and related services. There can be no assurance that financial or other
difficulties experienced by such third-party vendors will not have an adverse
effect on Simione's abilities to provide its systems or that Simione will be
able to replace such third-party products and services if they become
unavailable.

The third party software is composed of varying types and contractual
arrangements. The nature and scope of the third party software is described in
the table below. The software licensed from third parties falls into one of the
four categories listed below. All of Simione's products use these third party
software products to some varying degree. Generally, the third party software is
licensed under agreements that have a one-year term. Fees charged by the third
party software vendors are passed on to Simione's customers in the license fees
or maintenance fees charged by Simione. The software is either embedded in
Simione's software prior to sale or accessed by Simione's software as an
external data file.

<TABLE>
<CAPTION>
TERMS OF LICENSE
------------------------------------
MONTHLY ONE TIME PER USER EMBEDDED DATA
MAINTENANCE FEE OR PER SEAT SOFTWARE FILE
----------- -------- ----------- -------- ----
<S> <C> <C> <C> <C> <C>
Operating System X X X X
Medical Content X X X X
Report Writer X X X X
Data Base Manager X X X X
</TABLE>

RESEARCH AND DEVELOPMENT

Simione maintains a staff of approximately 40 programmers, systems
analysts, quality assurance analysts and documentation specialists who monitor
developments in the computer software and health care industries and who
continuously work to enhance Simione's systems. Simione's research and
development expenses were approximately $6.7, $6.7 and $5.7 million for the
years ended December 31, 1998, 1997 and 1996, respectively.

STAT2 system current research and development plans include upgrading key
modules to a graphical user interface. Simione has additional research and
development activities underway to make certain product functionality
web-enabled. Additionally, Simione plans to develop or enhance interface
capabilities between all of its software products.

Simione recognizes the need to respond to the rapid technological change
that is occurring in the software and health care industries. There can be no
assurance, however, that Simione will be able to develop products on a timely
basis or that its future products will fully address the needs of its current or
prospective customers.

COMPETITION

Competition in the market for home health care information systems and
services is intense and is expected to increase. Simione believes that the
primary factors affecting competition are:

- system performance and reliability

- customer support

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- service

- system flexibility and ease of use

- pricing

- potential for providing enhancements

- reputation

- financial stability.

Simione believes it is a strong competitor in system performance and
reliability, customer support and potential for enhancements. Simione provides
customer support through a toll-free call-in number which Simione believes has
been effective in satisfying customer needs. Simione believes it has a
competitive advantage in the service area because it offers a more complete
health care industry consulting service that supplements and supports its
systems-related services, and strengthens customer relationships. Pricing in
this industry is very competitive, with no particular company, including
Simione, having a clear advantage. Simione believes that it has a very good
reputation among the home health care providers who are familiar with Simione's
products, but Simione's name recognition within the market at large is not as
well established as many of the competitors. Simione is at a competitive
disadvantage on the financial stability factor because its financial position is
not as strong as that of its major competitors.

Simione's competitors include other providers of home health care
information systems and services, management companies and home health care
consulting firms. Furthermore, other major health care information companies not
presently offering home health care information systems, or major information
system companies not currently in the health care industry, could develop the
technology and enter Simione's markets. Simione believes its most significant
competitors are:

- Delta Health Systems (owned by Shared Medical Systems Corp.);

- McKesson HBOC;

- Patient Care Technologies, Inc. (partially owned by Meditech);

- Home Care Information Systems, Inc. (owned by Misys PLC);

- 3M Datacron (owned by 3M); and

- MCS.

Increased competition could result in price reductions, reduced gross
margins and loss of market share, any of which could materially adversely affect
Simione's business, financial condition and results of operations. In addition,
many of Simione's competitors and potential competitors have significantly
greater financial, technical, product development, marketing and other resources
and market recognition than Simione. Many of Simione's competitors also
currently have, or may develop or acquire, substantial installed customer bases
in the home health care industry. As a result of these factors, Simione's
competitors may be able to respond more quickly to new or emerging technologies
and changes in customer requirements or to devote greater resources to the
development, promotion and sale of their systems and services than Simione.
There can be no assurance that Simione will be able to compete successfully
against current and future competitors or

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<PAGE> 140

that competitive pressures faced by Simione will not materially adversely affect
its business, financial condition and results of operations.

PROPRIETARY RIGHTS AND PRODUCT PROTECTION

Simione owns the copyrights on its STAT2 system and The Smart ClipBoard
product acquired in the CareCentric merger. Simione depends upon a combination
of trade secret, copyright and trademark laws, license agreements, nondisclosure
and other contractual provisions, confidentiality policies and various security
measures to protect its proprietary rights. There can be no assurance that the
legal protections afforded to Simione or the precautions taken by Simione will
be adequate to prevent misappropriation of Simione's technology. In addition,
these protections do not prevent independent third-party development of
functionally equivalent or superior technologies, systems or services, or the
obtaining of a patent with respect to Simione's technology by third parties. Any
infringement or misappropriation of Simione's proprietary software could have a
material adverse effect on Simione. As the number of home health care software
information systems increases and the functions of these systems further
overlap, health care information systems may increasingly become subject to
infringement claims. Although there has been no litigation with respect to these
claims, there can be no assurance that Simione will not be subject to litigation
in the future or additional infringement claims.

Simione believes that its current systems and products do not infringe on
the patent or trademark rights of any third parties. There has, however, been
substantial litigation and uncertainty regarding copyright, patent and other
intellectual property rights involving computer software companies and there can
be no assurance that Simione will prevail in any infringement litigation brought
against it. One party has initiated an infringement inquiry with Simione
involving its TEMS software. Simione believes that this inquiry will not have a
material adverse effect on its financial position or results of operations since
the settlement and licensing terms currently offered by the inquiring party
would be immaterial to Simione's financial performance. Any claims or
litigation, with or without merit, could be costly and could result in a
diversion of management's attention which could have a material adverse effect
on Simione's business, financial condition and results of operations. Adverse
determinations in such claims or litigation may require Simione to cease selling
certain systems or products, obtain a license and/or pay damages, any of which
could also have a material adverse effect on Simione's business, financial
condition and results of operations.

GOVERNMENT REGULATION AND HEALTH CARE REFORM

The health care industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operations
of home health care organizations. During the past several years, the United
States health care industry has been subject to an increase in governmental
regulation of, among other things, reimbursement rates and certain proposals to
reform various aspects of the United States health care system have periodically
been considered by Congress. These proposals may result in increased government
involvement in home health care and otherwise change the operating environment
for Simione's customers. Home health care organizations may react to these
proposals and the uncertainty surrounding such proposals by curtailing or
deferring investments in Simione's systems and services. Simione cannot predict
what impact, if any, such factors might have on its business, financial
condition and results of operations.

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<PAGE> 141

The Office of Inspector General of the Department of Health and Human
Services has identified in its Work Plan for Fiscal Year 1999 several projects
within the home health industry which will be the focus of the Inspector
General's scrutiny in fiscal year 1999. Each year the Inspector General sets
forth in its Work Plan for that year the areas that will be scrutinized. For
example, the 1999 Work Plan sets forth that the Inspector General will focus on
audits of home health base year costs, location of service requirements,
assessment of the impact of the interim payment system on beneficiary access,
physicians case management billings, utilization patterns of home health
agencies, and claims for home health aides. Additionally, the Inspector General
has focused in recent years on how third party billing companies, such as
Simione, provide billing and collection services to its customers. The Inspector
General has also stressed the importance of compliance programs for aspects of
the health care industry. Although currently implementation of such programs is
voluntary, such compliance programs may become a requirement in the future as a
condition of being reimbursed under any federal or state programs or by private
health plan payors. The Inspector General released in December 1998 a compliance
program intended as guidance to third-party medical billing companies and their
agents and subcontractors in developing internal controls promoting adherence to
applicable law and the program requirements of federal, state and private health
plan payors. Any changes resulting from the Inspector General's review of the
home health industry and how home health services are billed could increase the
costs and time necessary for Simione to provide its administrative services to
its customers and could affect Simione in other respects not currently
foreseeable.

The confidentiality of patient records and the circumstances under which
such records may be released for inclusion in databases maintained on Simione's
systems are subject to substantial regulation by state governments and federal
legislation governing specialized medical information and records. Although
compliance with these laws and regulations is principally the responsibility of
the hospital, physician or other home health care provider with access to
Simione's information systems, regulations governing patient confidentiality
rights are evolving rapidly. For example, the Health Insurance Portability and
Accountability Act of 1996 includes provisions directing the Secretary of the
Department of Health and Human Services to adopt standards governing the
electronic transmission of data in connection with a number of transactions
involving health information, including submission of health claims. These
standards are to cover security measures and safeguards with respect to health
information, as well as standardization of data, assignment of identifiers and
authentication of electronic signatures.

In January 1999, HCFA published an interim final rule and a final rule
requiring home health agencies to report electronically data obtained from the
Outcome and Assessment Information Set ("OASIS") as a condition of participation
by such agencies in the Medicare program. OASIS requires information regarding
patients to be submitted electronically to HCFA, and the January 1999 rules set
forth requirements for maintaining the privacy of patient identifiable
information generated by OASIS. Further, these rules require the home health
agency or its agent to maintain the confidentiality of all patient identifiable
information contained in the clinical record and neither can release such
patient identifiable OASIS information to the public. Any agent acting on behalf
of an agency in connection with the transmission of OASIS data must be doing so
pursuant to a written agreement with the home health agency. Additional
legislation governing the dissemination of medical record information has been
proposed at both the state and federal level. This legislation may require
holders of such information to implement additional security measures which may
be difficult to implement and costly to Simione.

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<PAGE> 142

There can be no assurance that changes to state or federal laws and regulations
will not materially restrict the ability of home health care providers to submit
information from patient records to Simione's systems or impose requirements
which are incompatible with Simione's current systems.

In late October 1999, HCFA released its proposed regulations for the
prospective payment system for reimbursement of home health providers under
Medicare. These proposed rules are subject to comment and are expected to be
finalized by July 2000 and effective October 2000. The proposed rules will
reimburse home health providers fixed amounts for 60 day episodes of care
determined by home health resource group case-mix classifications on the basis
of an initial OASIS assessment adjusted for regional labor cost differences. The
proposed rules state that the reimbursement will be 50% at the start of the
episode and 50% after the final report for the episode with all adjustments has
been transmitted. Adjustments will be allowed for low utilization, partial
episodes, significant changes in condition, delivery of therapy and other
excessive costs situations. Additional submittals required will include a notice
of admission, identification of the appropriate case mix group and a one-line
universal bill submission.

These changes to the Medicare payment system will require extensive changes
to the manner in which home health care providers do business because they will
be required to reduce or manage the costs of care per episode so the costs will
not exceed the allowed reimbursement, while maintaining the quality of medical
outcomes required by the patient, the payor or other governmental regulatory and
self-regulating organizations. Such changes will require extensive changes to
Simione's and MCS' software products. Plans are underway to understand and
address these changes. There is no assurance that:

- these changes can be made correctly or in a timely enough manner given
the resources of Simione and MCS;

- HFCA will not change or delay these requirements;

- other suppliers of home health care software who are competitors will not
supply better versions of such products; or

- Simione's and MCS' customers will have the resources and skills to make
the changes to their operational processes needed to remain in business
or to acquire, install and use the information technology we intend to
sell to address this major regulatory change.

In the Omnibus Consolidated and Emergency Supplemental Appropriation Act of
1999, the portions of the Balanced Budget Act of 1997 that were applicable to
the reimbursement of home health care providers under Medicare were amended to:

- defer the 15% additional funding cut until October 2000;

- provide for three year extended payments of prior Medicare
over-reimbursements with the first year interest-free;

- eliminate the bundling of home medical equipment billings with home
health agency billings; and

- provide other minor relief.

These changes will increase the cash flow of our customers and potential
customers for the next 12 months, but do not provide the permanent relief sought
by the industry. The non-bundling change eliminates an opportunity for MCS which
has a software

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program that would facilitate such bundling of billing. This legislation will
not require significant changes to our software programs.

The United States Food and Drug Administration is responsible for assuring
the safety and effectiveness of medical devices under the Federal Food, Drug and
Cosmetic Act. Computer products are subject to regulation when they are used or
are intended to be used in the diagnosis of disease or other conditions, or in
the cure, mitigation, treatment or prevention of disease, or are intended to
affect the structure or function of the body. Although Simione believes that its
systems are not subject to FDA regulation, the FDA could determine in the future
that predictive applications of Simione's systems could make them clinical
decision tools subject to FDA regulation. Compliance with FDA regulations could
be burdensome, time consuming and expensive. Simione also could become subject
to future legislation and regulations concerning the manufacture and marketing
of medical devices and health care information systems. These could increase the
costs and time necessary to market new systems and could affect Simione in other
respects not presently foreseeable. Simione cannot predict the effect of
possible future legislation and regulation.

EMPLOYEES

As of December 31, 1999, Simione employed approximately 200 individuals.
Simione believes that its future success depends in large part upon recruiting,
motivating and retaining highly skilled and qualified employees in all aspects
of Simione's business. None of Simione's employees is represented by a labor
union. Simione believes that its employee relations are good.

PROPERTIES

Simione's principal executive offices are located at 6600 Powers Ferry
Road, Atlanta, Georgia 30339. The principal executive offices consist of
approximately 56,924 square feet. Simione uses 20,681 square feet of this space
and subleases the remainder to a third party. The lease on this space expires on
December 31, 2002.

Simione also leases office space in the following locations:

<TABLE>
<CAPTION>
LOCATION SQUARE FOOTAGE LEASE EXPIRATION
- -------- -------------- ----------------
<S> <C> <C>
Pompano Beach, Florida.................... 20,291 December 31, 2000
Duluth, Georgia........................... 8,370 March 31, 2001
Hamden, Connecticut....................... 6,500 December 31, 2002
East Brunswick, New Jersey................ 8,540 September 30, 2000
Sugar Land, Texas......................... 7,900 September 30, 2000
Westborough, Massachusetts................ 3,020 August 30, 2001
Huntington Beach, California.............. 976 May 31, 2000
San Diego, California..................... 1,800 February 28, 2000
Irving, Texas............................. 1,645 March 31, 2003
Jacksonville, Florida..................... 1,019 January 31, 2000
</TABLE>

The landlord of the Connecticut office is a company comprised of two
officers and a director of Simione. See "Certain Relationships and Related
Transactions" beginning on page 157 for a description of this lease.

Simione believes that its present facilities are adequate to meet Simione's
current and foreseeable needs.

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<PAGE> 144

LEGAL PROCEEDINGS

Neither Simione nor any of its subsidiaries is currently a party to any
legal proceedings which would be material to the business or financial condition
of Simione on a consolidated basis. Simione was, however, served on July 17,
1997 with an administrative subpoena issued by the United States Department of
Health and Human Services, Office of Inspector General. In connection with that
subpoena, the Department of Justice has advised Simione that aspects of
Simione's past relationship with affiliates of Columbia/HCA are within the scope
of an ongoing grand jury investigation. Simione's relationship with Columbia/HCA
arose based on the sale in October of 1996 to Columbia/HCA of Central Health
Holding Company, Inc, the former parent company of Central Health Management
Services, Inc., a predecessor company of Simione. At the time of such sale,
Simione entered into a number of contracts to provide information systems and
outsourcing services to Columbia/HCA. However, the Justice Department has
confirmed to Simione that neither Simione, nor any of its officers, directors or
employees, is a target in this investigation and, based upon the information
known to the Justice Department at this time, neither Simione, nor any of its
officers, directors or employees, is likely to become one. Simione is
cooperating fully with the government and does not currently believe that this
inquiry will have any material effect on its overall business or financial
condition.

Simione was one of several defendants named in a "whistleblower" lawsuit
related to Medicare fraud filed under the False Claims Act in the Northern
District of Georgia (U.S. ex rel. McLendon v. Columbia/HCA Healthcare Corp., et
al., No. 97-VC-0890 (N.D. Ga.)). The lawsuit involves alleged claims that
Simione participated in a conspiracy with Columbia/HCA and other third parties
to bill inflated and fraudulent claims to Medicare. Simione has learned that the
Justice Department has elected not to join in the claims asserted against
Simione 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
Simione.

Simione has had indications that Mr. McLendon may still pursue
"whistleblower" claims against Simione directly. Simione does not believe that
any of these claims, if asserted against Simione, will have any material effect
on Simione's overall business or financial condition. In the event these claims
are asserted, Simione intends to vigorously defend against them.

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<PAGE> 145

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF SIMIONE

The following table sets forth selected consolidated financial data of
Simione. The selected consolidated financial data in the table as of and for the
nine months ended September 30, 1999 and 1998 are derived from the unaudited
consolidated financial statements of Simione. The selected consolidated
financial data in the table as of and for the years ended December 31, 1998,
1997, 1996, 1995 and 1994 are derived from the audited consolidated financial
statements of Simione. The selected consolidated financial data as of and for
the year ended December 31, 1996 includes the operating results of Simione &
Simione acquired effective January 1, 1996 and InfoMed Holdings, Inc. for the
period October 8, 1996 (the effective date of the InfoMed Acquisition) to
December 31, 1996. The selected consolidated financial data as of and for the
year ended December 31, 1997 includes the operating results of Dezine Healthcare
Solutions, Inc. for the period December 1, 1997 (the effective date of the
Dezine Acquisition) to December 31, 1997. As of and for the years ended December
31, 1994 and 1995, Simione was a subsidiary of Central Health Holdings. The
number of shares used to compute the net loss per share reflects the 2,994,856
shares issued in the reorganization of Simione on January 17, 1996. See Notes 1
and 12 of the Notes to Consolidated Financial Statements of Simione. Amounts in
the 1996 and 1995 Statements of Operations have been reclassified to conform
with the 1997 presentation. All net loss per share amounts have been restated in
accordance with SFAS 128. See Notes 1 and 9 to Notes to Consolidated Financial
Statements for a description of Simione's history. The data should be read in
conjunction with "Simione Management's Discussion and Analysis of Financial
Condition and Results of Operations" beginning on page 138 and the Consolidated
Financial Statements and Notes thereto of Simione included herein.

<TABLE>
<CAPTION>
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ ------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- -------- -------- ------- -------- ------- ------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues:
Software and services........ $11,332 $ 25,564 $ 27,523 $27,356 $ 15,308 $5,387 $4,875
Agency support............... 1,401 5,886 6,936 14,680 7,324 7,835 7,235
Consulting services.......... 5,295 5,024 6,437 4,909 3,363 -- --
Columbia settlement fee...... 2,250 -- 750 -- -- -- --
------- -------- -------- ------- -------- ------ ------
Total net revenues......... 20,278 36,474 41,646 46,945 25,995 13,222 12,110
COSTS AND EXPENSES:
Costs of revenues............ 12,757 21,106 26,091 22,715 14,698 8,154 7,694
Selling, general and
administrative............. 8,893 11,111 13,823 12,508 7,037 3,095 2,959
Research and development..... 2,708 5,326 6,741 6,670 5,677 2,929 2,165
Amortization and
depreciation............... 2,410 1,778 2,392 1,714 785 -- --
Columbia settlement fee...... 900 -- -- -- -- -- --
Purchased in-process research
and development............ -- -- -- 8,127 12,574 -- --
Severance and other
restructuring charges...... (1,140) 7,572 5,011 1,215 -- --
------- -------- -------- ------- -------- ------ ------
Total costs and expenses... 25,628 46,893 54,058 51,734 41,986 14,178 12,818
------- -------- -------- ------- -------- ------ ------
Loss from operations......... (5,350) (10,419) (12,412) (4,789) (15,991) (956) (708)
OTHER INCOME (EXPENSE):
Interest expense............. (116) (74) (183) (215) (115) -- --
Interest and other income.... 186 304 424 490 207 -- --
------- -------- -------- ------- -------- ------ ------
Net loss................... $(5,280) $(10,189) $(12,171) $(4,514) $(15,899) $ (956) $ (708)
======= ======== ======== ======= ======== ====== ======
Net loss per share -- basic
and diluted.............. $ (0.60) $ (1.19) $ (1.42) $ (0.63) $ (3.71) $(0.32) $(0.24)
======= ======== ======== ======= ======== ====== ======
Weighted average common
shares -- basic and
diluted.................... 8,741 8,544 8,557 7,164 4,288 2,995 2,995
======= ======== ======== ======= ======== ====== ======
</TABLE>

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<PAGE> 146

<TABLE>
<CAPTION>
SEPTEMBER 30, AS OF DECEMBER 31,
------------------ ------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- -------- -------- ------- -------- ------- ------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 1,228 $ 9,625 $ 10,527 $ 8,267 $ 3,385 $ 323 $ 463
Working capital
(deficit).............. (6,895) 35 1,301 9,019 (1,203) 189 (837)
Total assets............. 27,930 29,808 27,857 28,919 18,776 1,828 1,340
Long-term obligations.... 2,249 -- 2,671 -- 2,986 -- --
Stockholders' equity
(deficit).............. 11,982 9,705 7,724 19,489 4,680 650 (837)
</TABLE>

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

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<PAGE> 147

SIMIONE MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the consolidated financial condition and
results of operations of Simione for the three years ended December 31, 1998 and
factors that will affect Simione's financial condition. In these discussions,
most percentages and dollar amounts have been rounded to aid presentation; as a
result, all figures are approximations. References to approximations have
generally been omitted.

OVERVIEW

Simione is a leading provider of integrated systems and services designed
to enable home health care providers to more effectively operate their
businesses and compete in a managed care environment. Simione offers several
comprehensive and flexible software solutions, each of which provide a core
platform of software applications and which incorporate selected specialized
modules based on customer demand. These software solutions are 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, Simione's home health care consulting services assist
providers in addressing the challenges of reducing costs, maintaining quality,
streamlining operations and re-engineering organizational structures.

Through 1999, Simione also provided comprehensive agency support services
which included services such as billing and collections, training and financial
management services.

Simione entered into multi-year contracts, generally 3 to 5 years, with its
customers in connection with its provision of agency support services. In
general, these contracts provided for the payment of monthly fees based on the
number of billed home care visits made by the customer. Revenues derived under
these contracts were recognized monthly as the related services were rendered
and typically range from several hundred thousand dollars to several million
dollars per year. The volume in this line of business declined significantly
after the termination of the Columbia/HCA contract. Simione discontinued this
line of business in December 1999.

Simione sells its software pursuant to non-exclusive license agreements
that provide for the payment of a one-time license fee. In accordance with SOP
97-2, these revenues are recognized when products are delivered and the
collectibility of fees is probable, provided that no significant obligations
remain under the contract. Revenues derived from the sale of software products
requiring significant modification or customization are recognized based upon
the percentage of completion method. The price of Simione's software varies
depending on the number of software features licensed and the number of users
accessing the system and can range from ten thousand dollars to a few million
dollars. Simione generally requires payment of a deposit upon the signing of a
customer order as well as some additional payments prior to delivery. As a
result, Simione's balance sheet reflects significant customer deposits.

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 these agreements is
recognized ratably over the period of the agreements. Simione maintains a high
renewal rate with respect to its software support agreements. Simione charges
for software implementation, training and technical

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<PAGE> 148

consulting services as well as management consulting services on an hourly or
daily basis. The price of these services varies depending on the level and
expertise of the related professionals. These revenues are recognized as the
related services are performed.

Simione defines recurring revenues as revenues derived under multi-year
contracts in addition to annual software support agreements. These revenues were
approximately $6.3 million, or 14% of total net revenues, for the year ended
December 31, 1998, $28.2 million, or 60% of total net revenues, for the year
ended December 31, 1997, and $7.4 million, or 29% of total net revenues, for the
year ended December 31, 1996. These revenues were approximately $6.8 million, or
33.7% of total net revenues, for the nine months ended September 30, 1999 and
$6.3 million or 17.3% of total net revenues, for the nine months ended September
30, 1998.

For the ten months ended October 31, 1996, 63% of Simione's total net
revenues were derived from contracts with home health care agencies wholly-owned
by Central Health Holding Company, Inc. Central Health Holding was the former
parent company of Central Health Management Services, Inc., the predecessor
corporation of Simione. These contracts were terminated October 31, 1996, in
connection with the sale of Central Health Holding to Columbia/HCA. Revenues
derived from these contracts were recorded in an amount equal to the costs of
the services provided, and, as a result, Simione recognized no operating profit
under these contracts. Subsequent to the sale of Central Health Holding to
Columbia/HCA, affiliates of Columbia/HCA entered into multi-year contracts with
Simione to provide its information systems and agency support services to
certain of the home health care agencies formerly owned by Central Health
Holding. Simione believes that the contracts with the Columbia/HCA affiliates
were negotiated on an arms-length basis. The historical results of operations
attributable to the terminated Central Health Holding contracts may not
therefore be indicative of future results of operations. For the three months
ended December 31, 1996, Simione derived 39% of its total net revenues from
contracts with affiliates of Columbia/HCA. This amount increased to 48% for the
year ended December 31, 1997 and decreased to 35% for the year ended December
31, 1998.

Simione derived 11% of its total net revenues from contracts with
affiliates of Columbia/HCA for the nine months ended September 30, 1999 and 25%
for the nine months ended September 30, 1998. Columbia/HCA elected to terminate
the contract with Simione based upon a decision to discontinue operations in the
home health care industry given pressures created by the Balanced Budget Act of
1997 and significant reimbursement pressures creating losses throughout the home
health care industry. The contracts with Columbia/HCA were terminated on
December 1, 1998 and a settlement of $7.0 million was agreed to by both parties
for the early termination of the contracts and for specific wind down of
activities to be performed by Simione through March 31, 1999. Columbia/HCA
agreed and paid Simione $4,200,000 in November 1998 and $700,000 each on January
1, 1999, February 1, 1999, March 1, 1999 and April 1, 1999 as a settlement fee
and payment for services performed. Included in the first quarter of 1999 are
revenues totaling $2.2 million from the winding down of some Columbia/HCA
agreements. Without these revenues, Simione would have had a loss for the
quarter.

Simione believes that continued development and enhancement of its software
systems is critical to its future success, and anticipates that the total amount
of research and development expense will increase, but should decrease as a
percentage of total net revenues as Simione grows its revenues. Costs incurred
to establish the technological feasibility of computer software products are
expensed as incurred. Simione's policy is to

139
<PAGE> 149

capitalize costs incurred between the point of establishing technological
feasibility and general release only when the costs are material. During 1998,
Simione wrote off approximately $2.0 million of capitalized software to reflect
the abandonment of certain development projects. Simione's capitalized computer
software development costs were $0 as of December 31, 1998, $616,000 as of
December 31, 1997 and $0 as of December 31, 1996. Simione capitalized $765,000
and $0, respectively, of computer software development costs in the nine months
ended September 30, 1999 and September 30, 1998.

RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, items from the
consolidated statements of operations expressed as a percentage of total net
revenues. Simione's historical operating results are not necessarily indicative
of the results for any future period.

<TABLE>
<CAPTION>
UNAUDITED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------- -----------------------
1999 1998 1998 1997 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PERCENTAGE OF NET REVENUES:
Net Revenues:
Software and services............... 55.9% 70.1% 66.1% 58.3% 58.9%
Agency support...................... 6.9 16.1 16.6 31.3 28.2
Consulting services................. 26.1 13.8 15.5 10.4 12.9
Columbia settlement fee............. 11.1 -- 1.8 -- --
----- ----- ----- ----- -----
Total net revenues............... 100.0 100.0 100.0 100.0 100.0
COSTS AND EXPENSES:
Costs of revenues................... 62.9 57.9 62.6 48.4 56.5
Selling, general and
administrative................... 43.9 30.5 33.2 26.6 27.1
Research and development............ 13.5 14.6 16.2 14.2 21.8
Amortization and depreciation....... 11.7 4.9 5.8 3.6 3.0
Purchased in-process research and
development...................... -- -- -- 17.3 48.4
Severance and other restructuring
charges.......................... (5.6) 19.7 12.0 110.1 4.7
----- ----- ----- ----- -----
Total costs and expenses......... 126.4 127.5 129.8 110.1 161.5
----- ----- ----- ----- -----
LOSS FROM OPERATIONS.................. (26.4) (27.5) (29.8) (10.1) (61.5)
Other income (expense):
Interest expense.................... (0.6) (0.2) (0.4) (0.5) (0.5)
Interest and other income........... 1.0 0.9 1.0 1.0 .8
----- ----- ----- ----- -----
Net loss......................... (26.0)% (26.8)% (29.2)% (9.6)% (61.2)%
===== ===== ===== ===== =====
</TABLE>

COMPARISON OF NINE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

NET REVENUES. Total net revenues for the nine months ended September 30,
1999 decreased $16.2 million, or 44.4%, to $20.3 million as compared to $36.5
million for the nine months ended September 30, 1998. This decrease includes
$9.6 million attributable to reduced revenues from the loss of the Columbia/HCA
contracts, $1.3 million attributable to declining visits and $5.3 million
attributable to a decrease in new software sales and related services.

140
<PAGE> 150

COST OF REVENUES. Total cost of revenues decreased $8.3 million, or 39.6%,
to $12.8 million for the nine months ended September 30, 1999 as compared to the
nine months ended September 30, 1998. This decrease is principally the result of
a reduction in costs associated with the decrease in new software sales and
related services. The 1998 cost of revenue amount also included a write-off of
capitalized software in the amount of approximately $2.0 million. As a
percentage of total net revenues, total costs of revenues increased to 62.9% for
the nine months ended September 30, 1999 from 57.9% for the nine months ended
September 30, 1998. The increase as a percentage of total net revenues is
principally due to the decrease in total net revenues and certain employee
support costs associated with the Columbia/HCA contracts which were incurred
until May and June 1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Total selling, general and
administrative expenses for the nine months ended September 30, 1999 decreased
$2.2 million to $8.9 million as compared to $11.1 million for the nine months
ended September 30, 1998. This decrease is principally attributable to the
restructuring of Simione in late 1998, partially offset by an increase of $1.8
million in the provision for doubtful accounts recorded in September 1999. The
increase in the provision reflects higher liquidity risk of Simione's customers.
The higher liquidity risk has been primarily due to changes in the cost
reimbursement regulations of Medicare for the home health care industry. The
restructuring was a result of the change in the home care business environment
resulting from interim payment system, and the termination of the Columbia/HCA
contracts, coupled with the decision to eliminate certain legacy development
projects. Simione has realized savings in cash flow from salaries and office
rent. As of September 1999 the salary cost was reduced to $1.5 million per month
from $3.9 million per month in 1998. Two floors of the corporate office were
sublet allowing the restructuring reserve to be reduced by $1.1 million and
increasing cash flow by more than $50,000 per month. Depreciation expense has
been reduced but has not had a significant effect on Simione, given the
recurring losses and the non-cash impact. As a percentage of total net revenues,
selling, general and administrative expenses were 43.9% for the nine months
ended September 30, 1999 compared with 30.5% for the nine months ended September
30, 1998.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses for
the nine months ended September 30, 1999 decreased $2.6 million, or 48.5%, to
$2.7 million as compared to $5.3 million for the nine months ended September 30,
1998. The decrease in expenses is principally due to the abandonment of certain
legacy development projects in late 1998. As a percentage of total net revenues,
these expenses were 13.5% for the nine months ended September 30, 1999 compared
with 14.6% for the nine months ended September 30, 1998.

AMORTIZATION AND DEPRECIATION. Amortization and depreciation expenses for
the nine months ended September 30, 1999 increased $633,000, or 35.6%, to $2.4
million as compared to $1.8 million for the nine months ended September 30,
1998. This increase is principally due to the amortization of goodwill resulting
from the Tropical acquisition in March 1999 and the CareCentric merger in August
1999.

OTHER INCOME (EXPENSE). Interest expense for the nine months ended
September 30, 1999 and 1998 relates to borrowings under Simione's line of credit
agreement and capital lease obligations. Interest and other income for the nine
months ended September 30, 1999 and 1998 consists principally of interest income
related to Simione's short-term cash investments and has decreased $118,000.

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INCOME TAXES. At December 31, 1998, Simione had net operating loss ("NOL")
carryforwards for federal and state income tax purposes of $10.6 million, which
expire at various dates through 2013, if not utilized. Simione also has research
and development and alternative minimum tax credits of approximately $90,000
available to reduce future income tax liabilities. The Tax Reform Act of 1986,
as amended, contains provisions that limit the NOL and tax credit carryforwards
available to be used in any given year when certain events occur, including
additional sales of equity securities and other changes in ownership. As a
result, certain of the NOL and tax credit carryforwards may be limited as to
their utilization in any year. Simione concluded that it is more likely than not
that these NOLs and tax credit carryforwards will not be realized based on a
weighing of evidence at September 30, 1999, and as a result, Simione recorded a
100% deferred tax valuation allowance against these assets. For the nine months
ended September 30, 1999, Simione applied a portion of the NOL against income
tax expense for financial reporting purposes.

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997

NET REVENUES. Total net revenues decreased $5.3 million, or 11.3%, to
$41.6 million in 1998 from $46.9 million in 1997. This decrease in total net
revenues includes a $6.2 million increase attributable to the business acquired
in the Dezine acquisition which was completed in December 1997, a $1.5 million
increase in consulting revenues, a $1.0 million decrease attributable to the
declining number of visits, an $8.7 million attributable to the ultimate
termination of the Columbia/HCA contracts, and a $3.5 million decrease in new
software sales and related services.

Net revenues from Software and Services include revenues from software
licenses, service fees, computer hardware sales, software support,
implementation, training and technical consulting services. These revenues
decreased $167,000, or 0.4%, to $27.5 million in 1998 from $27.4 million in
1997. This decrease includes a $6.2 million increase attributable to the
business acquired in the Dezine acquisition which was offset by a $3.5 million
decrease in new software sales and related services, and a $2.7 million decrease
attributable to the declining revenue associated with the Columbia/HCA
contracts.

Net revenues from Agency Support decreased $7.0 million, or 47.6%, to $7.7
million in 1998 from $14.7 million in 1997. This decrease includes a $1.0
million decrease attributable to the declining number of visits and a $6.0
million decrease resulting from the ultimate termination of the Columbia/HCA
contracts.

Net revenues from Consulting Services increased $1.5 million, or 31.0%, to
$6.4 million in 1998 from $4.9 million in 1997 and was attributable to revenues
from new customers.

COST OF REVENUES. Cost of revenues increased $3.4 million, or 14.9%, to
$26.1 million in 1998 from $22.7 million in 1997. As a percentage of total net
revenues, cost of revenues increased to 62.6% in 1998 from 48.4% in 1997. This
dollar increase includes $2.5 million in costs attributable to the business
acquired in the Dezine acquisition, the writeoff of $2.0 million of capitalized
software, offset by a $1.4 decrease in costs attributable to the terminated
Columbia/HCA contracts. The increase as a percentage of total net revenues is
principally due to the decrease in new software sales and related services.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased $1.3 million, or 10.4%, to $13.8 million in 1998 from $12.5
million in 1997. As a percentage of total net revenues, selling, general and
administrative expenses were 33.2% in 1998 and 26.6% in 1997. This dollar
increase was attributable to approximately $2.1

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<PAGE> 152

million in costs related to the business acquired in the Dezine acquisition
offset by approximately $1.0 million in restructuring charges.

RESEARCH AND DEVELOPMENT. Research and development expenses remained
constant at $6.7 million in 1998 and 1997. As a percentage of total net
revenues, research and development expenses increased to 16.2% in 1998 from
14.2% in 1997. This percentage increase reflects the decrease in total net
revenues compared to a relatively constant level of dollar expenditures.

AMORTIZATION AND DEPRECIATION. Amortization and depreciation increased by
$700,000 to $2.4 million in 1998 from $1.7 million in 1997. This increase
includes approximately $300,000 of amortization expenses attributable to the
Dezine acquisition and approximately $400,000 associated with the depreciation
and amortization of purchased software, furniture, and equipment acquired in
1998.

PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT. In connection with the
Dezine acquisition in 1997, the purchase price of $9.4 million was allocated
based on relative fair value of the assets acquired and liabilities assumed.
Pursuant to a study conducted by an independent third party valuation firm, $8.1
million related to the Dezine acquisition purchase price was allocated to
purchased in-process research and development and, in accordance with generally
accepted accounting principles, was charged to operations as it was not deemed
to have reached technological feasibility and had no alternative future use.
Additionally, Simione has a two year plan for the expansion of the durable
medical equipment product line, to include a Windows-based graphical user
interface/open system.

SEVERANCE AND OTHER RESTRUCTURING CHARGES. Simione recorded a
restructuring charge totaling $5.0 million as a result of the change in the home
care business environment resulting from revisions to the Medicare reimbursement
system, and the termination of the Columbia/HCA contracts, coupled with the
decision to eliminate certain legacy development projects including the AS400
effort. Total charges were $9.6 million and included $2.1 million in severance
from a reduction in force, $3.7 million in costs to terminate contracts with
third party vendors, and $3.7 million in costs related to excess capacity and
other charges. These charges were offset by $4.0 million of the $7.0 million
settlement fee resulting from the termination of the Columbia/HCA contracts. The
settlement fee of $4.0 million created a large reduction in these expenses
during the fourth quarter of 1998.

Simione planned to terminate 160 employees across all groups of the
organization including senior executives, administrative personnel, shared
service personnel, information systems developers, and consultants. Of these
employees, 153 were terminated as of September 30, 1999. All seven of the
remaining employees were offered special bonuses totaling $37,648 to remain
working until certain critical projects were completed. Three of the remaining
seven employees were terminated on December 31, 1999. One of the remaining
employees will be terminated by March 31, 2000. Due to termination of additional
employees combined with resignations during 1999, the final three employees have
resumed their full-time employee status with Simione.

OTHER INCOME (EXPENSE). Interest expense relates to the borrowings under
Simione's line of credit agreements and capital lease obligations and has
remained constant at approximately $200,000. Interest and other income consists
principally of interest income related to Simione's short term cash investments
and has remained constant at approximately $450,000.

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INCOME TAXES. Simione has not incurred or paid any income taxes since its
inception. At December 31, 1998, Simione had net operating loss ("NOL")
carryforwards for federal and state income tax purposes of $10.6 million, such
losses expire in years 2010 through 2013, if not utilized. Simione also has
research and development and alternative minimum tax credits of approximately
$90,000 available to reduce future income tax liabilities. The Tax Reform Act of
1986, as amended, contains provisions that limit the NOL and tax credit
carryforwards available to be used in any given year when certain events occur,
including additional sales of equity securities and other changes in ownership.
As a result, certain of the NOL and tax credit carryforwards may be limited as
to their utilization in any year. Simione concluded that it is more likely than
not that these NOL and tax credit carryforwards will not be realized based on a
weighing of available evidence at December 31, 1998, and as a result, Simione
recorded a 100% deferred tax valuation allowance against these assets.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1996

NET REVENUES. Total net revenues increased $20.9 million, or 80.4%, to
$46.9 million in 1997 from $26.0 million in 1996. This increase in total net
revenues includes $11.7 million attributable to the business acquired in the
InfoMed acquisition which was completed in October 1996, $16.4 million in
additional revenues from contracts with affiliates of Columbia/HCA and a
decrease of $12.0 million resulting from the termination of contracts with home
health care agencies wholly-owned by Central Health Holdings. The remaining
increase was principally attributable to revenues from new customers.

Net revenues from Agency Support increased $7.4 million, or 101.4%, to
$14.7 million in 1997 from $7.3 million in 1996. This increase includes $10.0
million in additional revenues from contracts with affiliates of Columbia/HCA
and a decrease of $1.3 million resulting from the termination of contracts with
home health care agencies wholly-owned by Central Health Holdings.

Net revenues from Consulting Services increased $1.5 million, or 44.1%, to
$4.9 million in 1997 from $3.4 million in 1996 and was attributable to revenues
from new customers.

COST OF REVENUES. Cost of revenues increased $8.0 million, or 54.4%, to
$22.7 million in 1997 from $14.7 million in 1996. As a percentage of total net
revenues, cost of revenues decreased to 48.4% in 1997 from 56.5% in 1996. This
dollar increase includes $3.3 million in costs attributable to the business
acquired in the InfoMed acquisition and the remaining increase primarily results
from the increased cost of personnel and the cost of computer and communication
technology. The reduction as a percentage of total net revenues is principally
due to the higher margins related to the business acquired in the InfoMed
acquisition, and increased margins derived from new customers.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased $5.5 million to $12.5 million in 1997 from $7.0 million in
1996. As a percentage of total net revenues, selling, general and administrative
expenses were 26.6% in 1997 and 27.1% in 1996. This dollar increase was
attributable to approximately $3.8 million in costs

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related to the business acquired in the InfoMed acquisition and the remainder
principally relates to increased administrative personnel to support growth.

RESEARCH AND DEVELOPMENT. Research and development expenses increased $1.0
million to $6.7 million in 1997 from $5.7 million in 1996. As a percentage of
total net revenues, research and development expenses decreased to 14.2% in 1997
from 21.8% in 1996. This dollar increase was attributable principally to the
business acquired in the InfoMed acquisition. During 1997, Simione capitalized
$616,000 in software development costs.

AMORTIZATION AND DEPRECIATION. Amortization and depreciation expenses
increased by approximately $900,000 to $1.7 million in 1997 from $800,000 in
1996. This increase includes approximately $600,000 of amortization expenses
attributable to the InfoMed acquisition in October of 1996 and approximately
$300,000 associated with the depreciation and amortization of purchased
software, furniture, and equipment acquired in 1997.

In connection with the InfoMed acquisition in 1996, the purchase price of
$16.8 million was allocated based on relative fair value of the assets acquired
and liabilities assumed. Pursuant to a study conducted by an independent third
party valuation firm, $12.6 million related to the IMI acquisition purchase
price was allocated to purchased in-process research and development and, in
accordance with generally accepted accounting principles, was charged to
operations as it was not deemed to have reached technological feasibility and
had no alternative future use. Subsequent to the InfoMed acquisition, Simione
completed the development of certain in-process versions of software products,
SC STATScan and TEMS, and has scheduled further enhancements to each of these
products.

SEVERANCE AND OTHER RESTRUCTURING CHARGES. As a result of the change in
focus of Simione's business from providing services to affiliates of Central
Health Holding, Simione incurred severance and certain other restructuring costs
totaling $1.2 million in the fourth quarter of 1996. These expenses primarily
relate to the severance of several key employees and costs to buy out a lease of
equipment no longer useful to Simione.

OTHER INCOME (EXPENSE). Interest expense relates to the borrowings under
Simione's line of credit agreements and capital lease obligations and increased
by $100,000 to $200,000 in 1997 from $100,000 in 1996. This increase is
principally attributable to the increased borrowings under the line of credit
agreements. Interest and other income consists principally of interest income
related to Simione's short term cash and restricted cash investments and
increased by $300,000 to $500,000 in 1997 from $200,000 in 1996. This increase
is principally attributable to the interest received on the $17.7 million in net
proceeds from the issuance of 2,000,000 shares of common stock at $10.00 per
share in July 1997 in conjunction with a Registration Statement filed with the
Securities and Exchange Commission.

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INCOME TAXES. Simione has not incurred or paid any income taxes since its
inception. At December 31, 1997, Simione had NOL carryforwards for federal and
state income tax purposes of $4.6 million, and $1,824,000 of these carryforwards
expire in 2010 and $2,816,000 in 2011, if not utilized. Simione also has
research and development and alternative minimum tax credits of approximately
$96,000 available to reduce future income tax liabilities. The Tax Reform Act of
1986, as amended, contains provisions that limit the NOL and tax credit
carryforwards available to be used in any given year when certain events occur,
including additional sales of equity securities and other changes in ownership.
As a result, certain of the NOL and tax credit carryforwards may be limited as
to their utilization in any year. Simione concluded that it is more likely than
not that these NOL and tax credit carryforwards will not be realized based on a
weighing of available evidence at December 31, 1997, and as a result Simione
recorded a 100% deferred tax valuation allowance against these assets. Of the
$4.4 million deferred tax asset at December 31, 1997, approximately $500,000
relates to the InfoMed acquisition and, if and when realized, will result in a
credit to intangible assets recorded in the acquisition.

BACKLOG

Simione had backlog associated with its software of approximately $1.6
million on September 30, 1999, and $5.2 million on September 30, 1998. Backlog
consists of the unrecognized proportion of contractually committed software
license fees, hardware, estimated installation fees and professional services.
The length of time required to complete an implementation depends on many
factors outside the control of Simione, including the state of the customer's
existing information systems and the customer's ability to commit the personnel
and other resources necessary to complete the implementation process. As a
result, Simione may be unable to predict accurately the amount of revenue it
will recognize in any period and therefore can make no assurance that the
amounts in backlog will be recognized in the next twelve months.

SELECTED QUARTERLY FINANCIAL RESULTS

Simione's quarterly operating results have been and will likely continue to
be subject to significant fluctuations. Simione believes that the timing of
strategic acquisitions may cause fluctuations in its operating results. Revenues
can be expected to vary significantly as a result of the acceleration or delay
of system implementations due to customer requirements or other factors beyond
Simione's control, fluctuations in demand for existing systems and services and
Simione's ability to manage successfully any future growth. The sales cycles
related to its systems offerings and agency support contracts can be long and
difficult to predict, resulting in variability of revenues. In addition, the
implementation period related to Simione's information systems can range from
three months to one year. The unpredictability of revenues could in any quarter
result in a shortfall relative to quarterly expectations. Many other factors may
contribute to fluctuations in Simione's operating results. Accordingly, Simione
believes that period-to-period comparisons of results of operations are not
necessarily meaningful and should not be relied upon as any indication of future
performance.

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The following table sets forth unaudited consolidated quarterly financial
data for each of the eleven quarters for the period ended September 30, 1999.
This information is unaudited, but, in the opinion of Simione's management,
includes all adjustments, consisting only of normal recurring adjustments,
necessary for fair presentation of the information in accordance with generally
accepted accounting principles. Some of the amounts in both 1998 and 1997
quarterly income statements have been reclassified to conform with the
presentation of the 1998 audited financial statements. All net income (loss) per
share amounts have been restated in accordance with SFAS 128. These quarterly
results of operations are not necessarily indicative of future operating
results.
<TABLE>
<CAPTION>
(IN 000'S)
-------------------------------------------
FISCAL YEAR 1998 FISCAL YEAR 1997
------------------------------------------- -------------------
MAR. 31, JUNE 30, SEPT. 30, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1999 1999 1999 1998 1998 1998 1998 1997 1997
-------- -------- --------- -------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenues:
Software and
services............ $4,496 $ 3,562 $ 3,274 $ 9,165 $ 9,951 $ 6,447 $ 1,960 $ 5,682 $ 6,480
Agency support........ 667 544 190 2,808 1,859 1,219 1,050 4,552 3,615
Consulting services... 1,497 1,920 1,878 1,447 1,764 1,814 1,412 1,194 1,145
Columbia settlement
fee................. 2,250 -- -- -- -- -- 750 -- --
------ ------- ------- ------- ------- -------- ------- ------- --------
Total net
revenues......... 8,910 6,026 5,342 13,420 13,574 9,480 5,172 11,428 11,240
------ ------- ------- ------- ------- -------- ------- ------- --------
Costs and expenses:
Costs of revenues..... 4,474 4,267 4,016 6,325 6,658 8,109 4,999 5,473 5,142
Selling, general and
administrative...... 2,368 2,204 4,321 4,129 3,803 3,179 2,712 3,083 3,381
Research and
development......... 1,038 843 826 1,816 1,588 1,936 1,401 1,756 1,686
Amortization and
depreciation........ 623 777 1,011 558 601 618 615 424 403
Purchased in-process
research and
development......... -- -- -- -- -- -- -- -- --
Severance and other
restructuring
charges............. -- -- (1,140) -- -- 7,172(a) (2,161)(a) -- --
------ ------- ------- ------- ------- -------- ------- ------- --------
Total costs and
expenses......... 8,503 8,090 9,034 12,828 12,650 21,814 7,566 10,736 10,612
------ ------- ------- ------- ------- -------- ------- ------- --------
Income (loss) from
operations............ 407 (2,064) (3,692) 592 924 (11,534) (2,394) 692 628
Other income (expense):
Interest expense...... (69) (2) (45) (16) (9) (50) (108) (77) (68)
Interest and other
income.............. 80 82 23 111 96 97 120 28 17
------ ------- ------- ------- ------- -------- ------- ------- --------
Net income (loss).. $ 418 $(1,984) $(3,714) $ 687 $ 1,011 $(11,487) $(2,382) $ 643 $ 577
====== ======= ======= ======= ======= ======== ======= ======= ========
Net income (loss)
per
share -- basic... $ 0.05 $ (0.23) $ (0.42) $ 0.08 $ 0.12 $ (1.34) $ (0.28) $ 0.11 $ 0.10
====== ======= ======= ======= ======= ======== ======= ======= ========
Weighted average
common
shares -- basic.. 8,656 8,782 3,783 8,523 8,536 8,571 8,596 5,977 6,027
====== ======= ======= ======= ======= ======== ======= ======= ========
Net income (loss)
per
share -- diluted $ 0.05 $ (0.23) $ (0.42) $ 0.07 $ 0.11 $ (1.34) $ (0.28) $ 0.09 $ 0.08
====== ======= ======= ======= ======= ======== ======= ======= ========
Weighted average
common shares and
common equivalent
shares -- diluted 8,782 8,782 8,783 9,222 9,573 8,571 8,596 7,364 7,234
====== ======= ======= ======= ======= ======== ======= ======= ========

FISCAL YEAR 1997
--------------------
SEPT. 30, DEC. 31,
1997 1997
--------- --------
<S> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenues:
Software and
services............ $ 7,467 $ 7,727
Agency support........ 3,435 3,078
Consulting services... 1,207 1,363
Columbia settlement
fee................. -- --
------- -------
Total net
revenues......... 12,109 12,168
------- -------
Costs and expenses:
Costs of revenues..... 5,516 6,584
Selling, general and
administrative...... 3,320 2,725
Research and
development......... 1,731 1,496
Amortization and
depreciation........ 411 476
Purchased in-process
research and
development......... -- 8,127
Severance and other
restructuring
charges............. -- --
------- -------
Total costs and
expenses......... 10,978 19,408
------- -------
Income (loss) from
operations............ 1,131 (7,240)
Other income (expense):
Interest expense...... (41) (29)
Interest and other
income.............. 202 243
------- -------
Net income (loss).. $ 1,292 $(7,026)
======= =======
Net income (loss)
per
share -- basic... $ 0.16 $ (0.82)
======= =======
Weighted average
common
shares -- basic.. 8,216 8,515
======= =======
Net income (loss)
per
share -- diluted $ 0.14 $ (0.83)
======= =======
Weighted average
common shares and
common equivalent
shares -- diluted 9,052 8,515
======= =======
</TABLE>

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

(a) Approximately $400,000 was improperly charged to the restructuring charge in
the third quarter of 1998. This amount has been restated and shown in the
fourth quarter of 1998 and reversed from the third quarter of 1998.

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LIQUIDITY AND CAPITAL RESOURCES

NINE MONTHS ENDED SEPTEMBER 30, 1999. As of September 30, 1999, Simione
had a working capital deficit of $6.9 million and cash and cash equivalents of
$1.2 million. Net cash used in operating activities for the nine months ended
September 30, 1999 was $3.5 million.

In March 1999, Simione completed the Tropical acquisition for $1.8 million
in cash and 100,000 shares of common stock at the then fair value of $1.63 per
share. Also in March 1999, Simione repaid a $5 million line of credit obligation
to a bank.

In May 1999, Simione entered into a definitive agreement to merge with MCS,
Inc., a wholly owned subsidiary of Mestek. For every share of outstanding
Simione common stock, Simione agreed to issue approximately .85 shares of its
common stock to Mestek in the exchange. MCS is a leading provider of information
systems and services to the home health care industry with approximately $14.9
million (excluding ProfitWorks) in revenues and $1.4 million in net income in
1998.

In August 1999, Simione acquired CareCentric Solutions, Inc. pursuant to a
merger for approximately 3.0 million shares of Simione's Series A Preferred
Stock. The preferred stock was valued at $3.00 per share at closing. Under the
terms of the merger, Simione may have to issue up to an additional approximately
3.0 million shares of common stock if Simione's common stock does not meet
certain price targets during the fourth quarter of 2000. On June 30, 2001, the
Series A Preferred Stock is convertible into Simione common stock, subject to
stockholder approval. If the stockholder approval for conversion is not obtained
by June 30, 2000, the Series A holders will be given a right to sell the Series
A Preferred Stock to Simione for cash. In conjunction with the CareCentric
merger Simione assumed a loan from a bank with an outstanding balance of $1.5
million. The $1.5 million bank loan was retired through use of a new loan
extended by Mestek in September 1999.

In September 1999, Simione obtained a $5.0 million commercial line of
credit with a national bank. Simione's trade accounts receivable are used as
collateral for the line and must be maintained at certain levels of aging to
support availability of advancement under the line. This line of credit is
secured by a lien on substantially all of the assets of Simione. Actual
availability under the terms of the line was about $1.7 million at December 31,
1999.

Also in September 1999, in connection with an amendment of the MCS merger
agreement, Simione received $3.0 million of loan proceeds from Mestek, the
parent company of MCS. The Mestek loan accrues interest at the BancBoston prime
rate plus 2%. The loan proceeds were used to retire $1.5 million of term loans
assumed with the acquisition of CareCentric and to fund operating needs. If the
MCS merger is completed at any time prior to June 30, 2000, Mestek's note
evidencing the loan will be converted into Series B Preferred Stock and Mestek
will pay additional funds for the Series B Preferred Stock and a warrant to
purchase Simione common stock. If the MCS merger is not completed by June 30,
2000, Mestek's $3.0 million note plus accrued interest will immediately be due
and payable.

YEARS ENDED: DECEMBER 31, 1998 AND DECEMBER 31, 1997. As of December 31,
1998, Simione had working capital of $1.3 million and cash and cash equivalents
of $10.5

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<PAGE> 158

million. Simione's current liabilities as of December 31, 1998 include customer
deposits of $1.1 million and unearned revenues of $1.9 million.

Net cash used in operating activities for the year ended December 31, 1996
totalled $1.8 million. This amount decreased to $1.4 million for the year ended
December 31, 1997, and decreased further to $1.1 million for the year ended
December 31, 1998. The changes were principally due to increases in working
capital requirements for research and development and changes in accrued
liabilities.

Net cash used in investing activities for the year ended December 31, 1998
totalled $1.0 million, and totalled $10.3 million for the year ended December
31, 1997, and $2.9 million for the year ended December 31, 1996. Simione made
capital expenditures (including capital leases) totaling approximately $600,000
in 1998, $1.2 million in 1997 and $1.3 million in 1996. In January 1996, Simione
completed the acquisition of Simione & Simione for $2.0 million in cash. In
October 1996, Simione completed the InfoMed acquisition resulting in an
increased cash balance of approximately $700,000. In December 1997, Simione
completed the Dezine acquisition for a purchase price of $9.4 million.

Net cash provided by financing activities was $4.3 million for the year
ended December 31, 1998, $16.6 million for the year ended December 31, 1997, and
$7.8 million for the year ended December 31, 1996. In January 1996, Central
Health Holdings made a cash capital contribution of $4.0 million to Simione as
part of the funding for Simione, in connection with the spin-off of Simione from
Central Health Holdings. Additionally, in March 1996, Simione issued common
stock that netted $3.1 million, $2.2 million of which was collected in 1996 and
$900,000 of which was collected in 1997. In July 1997, Simione filed a
registration statement on Form S-1 with the Securities and Exchange Commission
and sold 2,000,000 shares of its Common Stock for $10.00 per share and received
approximately $17.7 million in net cash proceeds from this offering for general
corporate purposes and working capital, including potential strategic
acquisitions.

In January 1996, Simione established line of credit agreements which
provided for aggregate borrowing of $2.5 million which had been fully drawn as
of December 31, 1996. During 1997, Simione repaid these lines of credit and
terminated them.

In June 1997, Simione established a revolving credit facility pursuant to
which the maximum principal amount at any time outstanding could not exceed the
lesser of $5 million or the "Borrowing Base" (as defined in the revolving credit
facility agreement). During 1998, Simione repaid this line of credit and
terminated it.

In May 1998, Simione entered into a new loan and security agreement with a
bank. Pursuant to the agreement, the bank agreed to make available to Simione a
revolving credit facility, the maximum principal amount of which at any time
must be equal to the lesser of $25 million or the "margin requirement" then in
effect. As of December 31, 1998, there was a balance of $5 million outstanding.
Simione terminated this credit facility and repaid all obligations to the bank
in 1999.

CURRENT FINANCING AND EFFECTS OF MERGER. In November 1999 Simione received
$1.6 million of loans from Mestek ($850,000) and two stockholders of Simione
($750,000),

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Barrett O'Donnell and David Ellis, to fund operating needs and continue the
execution of product strategies in the fourth quarter of 1999. The $1.6 million
of loans have varying terms and maturities as disclosed in Note 12 of the
financial statements.

In February 2000, Simione received an additional $1.0 million of loan
proceeds from Mestek. The loan proceeds are being used to fund Simione's
operating needs until completion of the merger with MCS. This $1.0 million loan
carries the same terms and security as the $3.0 million loan received by Simione
from Mestek in September 1999. At completion of the merger with MCS, Mestek will
pay an additional approximately $2.0 million in cash and the $4.0 million in
loans plus accrued interest will be exchanged (in total $6.0 million) for the
issuance by Simione to Mestek of Series B Preferred Stock and a warrant to
purchase shares of common stock of Simione.

The completion of the MCS merger will result in the following events
affecting the liquidity of Simione:

- the consolidation of the account receivable of MCS into Simione's bank
line of credit, is expected to provide Simione with an additional $1.6
million of borrowing capacity;

- the investment of an additional $2.0 million (less accrued but unpaid
interest on Mestek's $4.0 million in loans to Simione) by Mestek in
exchange for the issuance by Simione to Mestek of Series B Preferred
Stock and a warrant to purchase shares of common stock; and

- the payment to Mestek of $619,000 at the closing of the merger for
repayment of intercompany debt owed by MCS to Mestek. See "MCS
Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Liquidity and Capital Resources" at page 118.

Simione's liquidity has further eroded over the last several months.
Operating losses have been heavier than originally forecast and Simione has
incurred significant problems collecting its accounts receivable because of the
depressed operating condition of its customers due to the negative effects of
the current government limits over home medical cost reimbursement. The success
of the business will depend upon increases in sales and installation performance
including an emphasis on the CareCentric acquired business. Simione is currently
developing its business plans for the post MCS merger period. The proposed
changes in government reimbursement regulations (the PPS regulations scheduled
to take effect in October 2000), combined with the competitive nature of
Simione's product development and marketing initiatives following the merger,
increase the importance of timely execution or acceleration of those plans. To
fully implement those plans, Simione will require additional financing within
the 60 to 90 days following the merger. In the event the additional financing is
not available, the product development and marketing initiatives may be delayed
or cut back. Given the terms of the merger, the past performance, recent
financial condition of Simione and the current investment environment, Simione
expects that this capital will be expensive and could result in further dilution
of the existing shareholders.

Assuming no material adverse change in the operation of its business and
assuming the completion of the MCS merger and Mestek investment, Simione
believes that the

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combination of its available cash, cash equivalents, cash to be generated from
its future results of operations and funds that will be made available with the
bank line of credit will be sufficient to meet its operating requirements for at
least the next twelve months.

IMPACT OF NEW ACCOUNTING STANDARDS

In 1998, the Financial Accounting Standards Board issued SFAS No. 133
("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 is effective for Simione's fiscal year ending December
31, 2000. Simione's management does not believe that the adoption of SFAS No.
133 will have a material impact on Simione's position or results of operations.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. SFAS No. 130 requires that an enterprise classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of the statement
of financial position. SFAS No. 130 is effective for fiscal years beginning
after December 15, 1997 and was adopted by Simione in 1998. For Simione, there
is no difference between comprehensive income (loss) and net income (loss).

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS No. 131"). SFAS No. 131 requires that a public business enterprise report
financial and descriptive information about its reportable operating segments.
Operating segments are components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. SFAS No. 131 requires reporting segment profit or loss, certain
specific revenue and expense items, and segment assets. It requires
reconciliations of total segment revenues, total segment profit or loss, total
segment assets, and other amounts disclosed for segments to corresponding
amounts in the enterprise's general-purpose financial statements. It requires
that all public business enterprises report information about the revenues
derived from the enterprise's products or services (or groups of similar
products and services), about the countries in which the enterprise earns
revenues and holds assets, and about major customers regardless of whether that
information is used in making operating decisions. SFAS 131 is effective for
financial statements for periods beginning after December 15, 1997 and was
adopted by Simione in 1998. See Note 13 for detailed segment information.

In October 1997, the American Institute of Certified Public Accountants
issued Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2"),
which supersedes SOP 91-1 and is effective for transactions entered into for
fiscal years beginning after December 15, 1997. While some principles remain the
same, there are several key differences between the two pronouncements,
including accounting for multiple element arrangements. SOP 97-2 addresses
revenue recognition from a conceptual level and does

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not specifically provide implementation guidance. Simione's adoption of SOP 97-2
had no material impact on the financial statements of Simione.

YEAR 2000 ISSUES

The following information is being provided as a Year 2000 Readiness
Disclosure Statement, and is subject to the provisions of the Year 2000
Information and Readiness Disclosure Act.

INTRODUCTION. Year 2000 issues arise because many computer software and
hardware systems use only two digits to represent the year. As a result, these
systems may not process dates beyond 1999, which may cause errors in information
or system failures. Therefore, some computer software and hardware will need to
be modified prior to the Year 2000 in order to remain functional.

STATE OF READINESS. Simione has assessed both the readiness of its
internal computer systems and the compliance of its software and computer
products licensed and sold to customers for handling Year 2000 issues. Simione
appointed a Year 2000 Project Manager and established a Task Force to evaluate
Simione's products and services, business operations, and relationships with
customers and business partners. The mission of the Task Force was to actively
prepare Simione's systems and assist Simione's customers for Year 2000 issues,
as well as prepare contingency plans for the potential compromise in the
performance of critical systems and services. Simione believes that it has
implemented successfully the systems and programming changes necessary to
address the Year 2000 issues of its major software products. Simione has also
assessed the possible effects on Simione's operations of the Year 2000 readiness
of key vendors and third party software providers. Simione's reliance on vendors
and third party software providers, and therefore, on the proper functioning of
their information systems and software, means that their failure to address Year
2000 issues could have a material impact on Simione's operations and financial
results. Simione has contacted such vendors and suppliers and while it has not
discovered any material Year 2000 issues during either Simione or customer year
2000 testing activities, Simione cannot guarantee the performance or
representations of such entities.

COSTS. Simione has incurred costs of approximately $800,000 in addressing
Year 2000 issues, consisting primarily of programming, quality assurance and
testing expenses and replacing of technology which was not Year 2000 compliant.
Since it does not anticipate any further Year 2000 programming expenses or
purchases of replacement equipment, Simione does not believe there are any
substantial remaining costs associated with achieving Year 2000 readiness that
could have a material effect on Simione's results of operations or financial
condition.

RISKS. Simione believes there are no critical assets under its control
that present a material risk of not being year 2000 compliant. Less than a dozen
Simione customers, which in the aggregate do not represent a material part of
Simione's business, have not completed testing of Simione products in their
operational environments. For these customers, year 2000 risk exists due to the
use of Simione software on untested third party hardware or in interaction with
untested third party software in the customer environment. In these cases the
risk and cost of correction of any year 2000 problems will be the

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responsibility of the customer. Simione's training and product support personnel
organizations will provide assistance to these customers as quickly as possible
in early 2000 if and when problems arise. Based on the exhaustive testing of
Simione's products by both Simione and its customers, Simione believes it has
prepared for and will successfully manage the continuation of its business into
the year 2000.

CONTINGENCY PLANS. The Year 2000 Task Force has currently developed
contingency plans for Year 2000 failures. Simione believes it has identified and
addressed all material Year 2000 risks, and has the personnel and resources to
address any additional contingencies that may arise after January 1, 2000.

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OWNERSHIP OF SIMIONE CAPITAL STOCK

The following table sets forth information, as of February 1, 2000, known
to Simione regarding the beneficial ownership of Simione's common stock by:

- each director and director nominee of Simione;

- the chief executive officers of Simione who served during 1998;

- each of the four other most highly compensated executive officers, and
two former executive officers, of Simione based on Simione's fiscal year
1998 compensation;

- all executive officers and directors of Simione as a group; and

- each person known by Simione to be the beneficial owner of more than 5%
of Simione's common stock.

Unless otherwise indicated below, the persons and entities named in the
table have sole voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where applicable. Shares
of common stock subject to options that are exercisable at or within 60 days of
February 1, 2000 are deemed to be outstanding and to be beneficially owned by
the person holding such options for the purpose of computing the percentage
ownership of such person but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.

Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
beneficial ownership of a security consists of sole or shared voting power,
including the power to vote or direct the vote, and/or sole or shared investment
power, including the power to dispose or direct the disposition, with respect to
a security through any contract, arrangement, understanding or relationship.
Percentages were calculated based on the ratio of the number of shares of
Simione common stock beneficially owned by such beneficial owner as of February
1, 2000 to the sum of (a) 8,744,790, the total number of outstanding shares of
Simione common stock as of February 1, 2000, and (b) the number of shares of
Simione common stock issuable upon exercise of options or warrants held by the
applicable beneficial owner exercisable within 60 days as of February 1, 2000.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
NAME AND ADDRESS ----------------------
OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------- --------- ----------
<S> <C> <C>
Barrett C. O'Donnell(1)................................... 1,286,973 13.8%
P.O. Box 7395
Princeton, NJ 08543
R. Bruce Dewey............................................ -- --
6600 Powers Ferry Road
Atlanta, GA 30339
O'Donnell Davis, Inc.(2).................................. 961,973 10.6
P.O. Box 7395
Princeton, NJ 08543
</TABLE>

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<PAGE> 164

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
NAME AND ADDRESS ----------------------
OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------- --------- ----------
<S> <C> <C>
Dr. David O. Ellis(3)..................................... 987,172 11.2
3495 Piedmont Road
10 Piedmont Center, Suite 412
Atlanta, GA 30305
Gary M. Bremer(4)......................................... 895,957 10.0
6600 Powers Ferry Road
Atlanta, GA 30339
Rowan Nominees Limited(5)................................. 884,873 10.1
33 King William Street
London, EC4R 9AS
Merrill Lynch Asset Management Group(6)................... 853,930 9.8
World Financial Center, North Tower
250 Vesey Street
New York, NY 10381
Dimensional Fund Advisors, Inc.(7)........................ 506,800 5.8
1299 Ocean Avenue
Santa Monica, CA 90901
Howard B. Krone(8)........................................ 440,622 5.0
3633 Tuxedo Road
Atlanta, GA 30305
Greg Wilson(9)............................................ 420,000 4.8
777 E. Atlantic Avenue, Suite 800
Delray Beach, FL 33483
James R. Henderson(10).................................... 141,527 1.6
511 Butler National Drive
Duluth, GA 30136
William J. Simione, Jr.(11)............................... 139,428 1.6
4130 Whitney Avenue
Hamden, CT 06518
Robert J. Simione(12)..................................... 54,654 *
4130 Whitney Avenue
Hamden, CT 06518
Murali Anantharaman(13)................................... 35,265 *
120 Breakwater Circle
Atlanta, GA 30328
Gary W. Rasmussen(14)..................................... 33,207 *
2450 Regency Lake Drive
Marietta, GA 30062
James A. Gilbert(15)...................................... 32,083 *
235 North Mill Road
Atlanta, GA 30338
</TABLE>

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<PAGE> 165

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
NAME AND ADDRESS ----------------------
OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------- --------- ----------
<S> <C> <C>
Erin Dosdourian(16)....................................... 21,834 *
5094 NW 50th Court
Coconut Creek, GA 30338
Lori Nadler Siegel(17).................................... 3,156 *
1240 Beach Haven Road
Atlanta, Georgia 30324
Daniel J. Mitchell(18).................................... -- --
4430 Arapahoe Ave., Suite 220
Boulder, CO 80303
Jesse I. Treu(18)......................................... -- --
One Palmer Square, Suite 515
Princeton, NJ 08542
All directors and executive officers as a group (14
persons)(19)............................................ 3,039,790 31.7
</TABLE>

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

* Less than 1%

(1) Includes 135,000 shares issuable upon exercise of warrants and 420,981
shares issuable upon exercise of options. Mr. O'Donnell is a stockholder,
director and officer of ODD. Accordingly, pursuant to Rule 13d-3 under the
Exchange Act, he is deemed to be an indirect beneficial owner of Simione's
securities beneficially owned by ODD.

(2) Includes 135,000 shares issuable upon exercise of warrants and 170,981
shares issuable upon exercise of options

(3) Includes 853,930 shares held by, and 30,943 shares issuable upon exercise
of options by, Rowan Nominees Limited ("Rowan"). Rowan is nominee for EGL
Holdings, Inc. Mr. Ellis is president and a director of EGL Holdings, Inc.
Includes 9,184 shares held by Mr. Ellis' wife. Includes 40,098 shares
issuable upon exercise of options.

(4) Includes 171,213 shares issuable upon exercise of options. Excludes any
interest Mr. Bremer has in the Simione Central Holdings, Inc. Profit
Sharing Plan Trust (the "Profit Sharing Plan").

(5) Includes 30,943 shares issuable upon exercise of options.

(6) The information in the table is based on a Schedule 13G dated February 4,
2000. Merrill Lynch is a registered investment advisor. The shares are
held by asset management subsidiaries of Merrill Lynch.

(7) The information in the table is based on a Schedule 13G/A dated February 3,
2000. Dimensional is a registered investment advisor. According to the
Schedule 13G/A, these shares are owned by advisory clients of Dimensional.
None of these clients owns more than 5% of the Simione common stock.

(8) Includes 125,135 shares owned by Mr. Krone's wife, as to which Mr. Krone
may be deemed to have sole dispositive and voting power.

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<PAGE> 166

(9) Represents 420,000 shares owned by Eclipsys Corporation of which Mr. Wilson
is an officer.

(10) Includes 125,843 shares issuable upon exercise of options.

(11) Includes 85,557 shares issuable upon exercise of options.

(12) Includes 43,612 shares issuable upon exercise of options.

(13) Includes 19,801 shares issuable upon exercise of options.

(14) Includes 17,433 shares issuable upon exercise of options. Excludes any
interest Mr. Rasmussen has in the Profit Sharing Plan.

(15) Includes 20,833 shares issuable upon exercise of options.

(16) Represents 21,834 shares issuable upon exercise of options.

(17) Excludes any interest Ms. Siegel has in the Profit Sharing Plan.

(18) Does not include 373,669 shares and 777,120 shares of Series A Preferred
Stock beneficially owned by Mr. Mitchell and Mr. Treu, respectively. The
Series A Preferred Stock is non-voting stock and convertible into common
stock only upon Simione stockholder approval.

(19) Includes 701,825 shares issuable upon exercise of options and 135,000
shares issuable upon exercise of warrants.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On January 1, 1996, InfoMed Holdings, Inc., a predecessor corporation of
Simione, entered into a lease agreement with Gateway LLC with respect to
Simione's Pompano Beach, Florida office. O'Donnell Davis, Inc. owns 70% of
Gateway LLC and more than 5% of Simione's common stock. In addition, Mr. Barrett
C. O'Donnell, Chairman of the Board of Simione, is the Chairman of the Board,
President and Chief Executive Officer and a 75% stockholder of ODD. Reid
Horovitz, former General Counsel and Secretary of Simione, owns 10% of Gateway
LLC. Pursuant to the lease agreement, Gateway LLC leases approximately 20,291
square feet to Simione for a term of five years that commenced on January 1,
1996. In addition, on October 24, 1997 a subsidiary of Simione entered into a
written addendum extending the Pompano lease through December 31, 2001. Simione
has an option to renew the lease for an additional five year term. Rental
payments from Simione for the year ended December 31, 1998 totaled $384,528. In
addition to these lease payments, Simione is obligated to pay its share of the
office building's operating expenses. The lease payments were determined by
negotiation between the parties. Simione believes that the terms of the lease
agreement are at least as favorable as could have been obtained elsewhere for
similar facilities from unaffiliated third parties. Gateway LLC sold the Pompano
lease to an unrelated third party in August 1998.

On January 1, 1998, Simione replaced an oral lease agreement with S&S
Realty for Simione's Hamden, Connecticut office with a written agreement. Mr.
William J. Simione, Jr. owns 45% of S&S Realty. Pursuant to the lease agreement,
S&S Realty leases approximately 6,500 square feet to Simione for a term expiring
on December 31, 2002. Rental payments for the year ended December 31, 1998
totaled $130,000. The scheduled annual rental payments for each year of the
remaining term may, upon thirty (30) days' written notice from S&S Realty, be
increased by $5,850. In addition to these lease

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<PAGE> 167

payments, Simione is obligated to pay its share of the office building's
operating expenses, other than water, which is provided by S&S Realty. The lease
payments were determined by negotiation between the parties. Simione believes
that the terms of the lease agreement are at least as favorable as could have
been obtained elsewhere for similar facilities from unaffiliated third parties.

On November 1, 1996, Simione Central, Inc., a wholly-owned subsidiary of
Simione ("SCI"), entered into various information, support and management
service agreements with certain affiliates of Columbia/HCA Healthcare
Corporation. As part of the negotiation of the Columbia agreements, Columbia/HCA
required that SCI, formerly a subsidiary of Central Health Holding Company,
guarantee indemnification obligations of the former stockholders of Central
Health Holding, including Mr. Bremer, to those Columbia/HCA affiliates for
potential liabilities relating to the Central Health Holding Company Employee
Stock Ownership Plan Trust or its participants, including potential liabilities
resulting from a then ongoing investigation of the plan by the Department of
Labor and the Internal Revenue Service's then ongoing audit of issues related to
the plan. Columbia/HCA became indirectly responsible for these plan obligations
as a result of its acquisition of Central Health Holding by purchasing all of
Central Health Holding's stock. Because all of the former Central Health Holding
stockholders were also stockholders of Simione as a result of the January 1996
spin-off of Simione from Central Health Holding, SCI agreed to undertake the
guaranty. Also, on November 1, 1996, the plan was converted into the Simione
Central Holdings, Inc. Profit Sharing Plan and sponsorship of the plan was
transferred from Central Health Holding to Simione. Under the terms of the
guaranty, SCI guarantees Columbia/HCA against:

- plan losses arising from a fiduciary breach, prohibited transaction or
other violation of law relating to the plan; or

- liabilities related to the plan which are not paid by the former
stockholders of Central Health Holding other than the plan.

These liabilities are guaranteed only to the extent that they are not
recovered by Columbia/HCA through other indemnity provisions of the stock
purchase agreement. Columbia/HCA's other sources of potential recovery include
amounts accrued on Central Health Holding's closing balance sheet at the time of
sale and escrow accounts established for the benefit of Columbia/HCA by the
former stockholders of Central Health Holding. SCI's maximum liability under the
guaranty is limited to:

- $20 million for obligations arising before November 1, 1997;

- $17.5 million for obligations arising before November 1, 1998;

- $15 million for obligations arising before November 1, 1999;

- $15 million for obligations arising before November 1, 2000; and

- $0 thereafter.

At no time during the term of the guaranty will SCI's liability exceed $20
million in the aggregate. Pursuant to the guaranty, SCI agreed that on each date
that a guaranteed obligation is required to be paid to Columbia/HCA, SCI would
grant Columbia/HCA a security interest equal to the amount of such guaranteed
obligation in SCI's accounts receivable. SCI also granted to Columbia/HCA and
the parties to the Columbia Agreements the right to offset any liability arising
under the guaranty against any payments due from such parties to SCI for
information, management and support services.

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<PAGE> 168

At September 30, 1999, no claims had been made under the guaranty, and currently
Simione does not anticipate incurring any losses associated with the guaranty.

On April 17, 1998, Simione was a party to a Stock Purchase Agreement among
Eclipsys Corporation and certain stockholders of Simione including Gary M.
Bremer, a former director and officer of Simione, and William J. Simione, Jr.,
Vice Chairman of the Board and Executive Vice President of Simione. Pursuant to
the Stock Purchase Agreement, Eclipsys Corporation purchased from the
stockholders 420,000 shares, including 187,500 shares from Mr. Bremer and 25,000
shares from Mr. Simione, of Simione's Common Stock at a price of $13.25 per
share. Additionally, in the event Simione receives an offer from a third party
to purchase more than 5% of its common stock, Eclipsys Corporation will have the
option to purchase from Simione up to an additional 4.9% of Simione's Common
Stock at $13.25 per share. This option is available in connection with the MCS
merger, and Eclipsys has been provided with notice of such option. Management of
Simione does not expect Eclipsys to exercise its option, unless the market price
of Simione common stock equals or exceeds the option's exercise price of $13.25
per share. On February 7, 2000, the last practicable trading date for which
results were available for inclusion in this proxy statement, the reported high
sales price per share of Simione common stock on Nasdaq was $2 and the reported
low sales price was $1 13/16. If Eclipsys exercises its option, the ownership
interests of other Simione stockholders, including former MCS stockholders, will
be diluted by up to 4.9%.

The Stock Purchase Agreement allows Eclipsys Corporation to designate one
member to the board of directors of Simione until April 17, 2001. The Eclipsys
director designee is currently Greg Wilson. Mr. Wilson is not seeking reelection
to the board at the special meeting. Eclipsys has not exercised its right to
designate a replacement for Mr. Wilson. The Stock Purchase Agreement also states
that Eclipsys Corporation will vote its shares in favor of all the nominees to
the board of directors of Simione and in favor of all such matters recommended
by the board of directors.

Also, on April 17, 1998, Simione Central National, Inc., a wholly-owned
subsidiary of Simione now known as Simione Central National, L.L.C., and
Eclipsys Corporation entered into a remarketing agreement. Under the remarketing
agreement, Eclipsys has the exclusive right to market and sub-license Simione's
software to Eclipsys' current and potential customers and Simione is required to
provide installation, implementation, maintenance and support services to
Eclipsys' customers who sub-license Simione's software. Eclipsys is responsible
for responses to requests for proposals, software demos, and providing front
line support to such customers and prospects concerning Simione's software
products. For all Simione software products licensed by Eclipsys to an Eclipsys
customer or prospect, Eclipsys pays a one-time royalty to Simione plus an annual
maintenance fee. The initial term of the agreement expires on April 17, 2000 and
automatically renews for successive two-year terms unless terminated by Simione
or Eclipsys. Through the date of this joint proxy statement/prospectus, no
product/service revenues or royalty fees under this agreement have been received
or recognized.

Mr. Robert J. Simione, the brother of Mr. William J. Simione, Jr. who is
Vice Chairman of the Board and Executive Vice President of Simione, is currently
serving as a Senior Vice President of Simione. In addition, Mr. William J.
Simione, III, the son of Mr. William J. Simione, Jr., is currently serving as a
Consulting Manager of Simione. As compensation for his services, Mr. William J.
Simione, III was paid $76,610 in 1998. See "Executive Compensation" on page 190
for further information.

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On January 19, 1999, Simione advanced $200,000 in cash to Jack Arthur,
Simione's Senior Vice President of Product Development, pursuant to an unsecured
promissory note with recourse. Under the terms of the promissory note, payments
are to be made as follows: a lump sum payment of $100,000 on January 19, 2001
and $8,333.33 each month thereafter for 12 months. Interest on the outstanding
principal balance of the note from the date of the note until it is fully paid
will accrue at the prime interest rate announced from time to time by Wachovia
Bank. The note provides that the payment obligations of Mr. Arthur may be
forgiven, in whole or in part, by Simione in the event Mr. Arthur achieves
annual performance objectives to be established by Simione and Mr. Arthur. The
annual objectives shall be set at the beginning of each calendar year for the
years 1999, 2000 and 2001 with one third of the loan forgiven upon successful
performance each year. The objectives for 1999 consisted principally of cost
reduction in Simione's development efforts and realignment of product
development to integrate technologies of acquired products with existing company
products. The performance objectives for 2000 and 2001 have not been
established. Simione shall, through its Chief Executive Officer, have sole
discretion concerning whether to forgive any of such payment obligations. The
1999 objectives were met and accordingly $66,667 was forgiven on January 19,
2000. The principal amount and interest forgiven will be recorded as
compensation expense.

In connection with the execution of the amended merger agreement, Mr. Dewey
was appointed President and Chief Executive Officer of Simione. Mr. Dewey
retained his position of Senior Vice President and Secretary of Mestek. Mr.
Dewey is paid $175,000 per year, three-quarters of which is paid by Simione, and
the remaining one-quarter of which is paid by Mestek. This allocation reflects
the expectation that Mr. Dewey will devote approximately three-quarters of his
working time to his duties as President and Chief Executive Officer of Simione.
Mr. Dewey is eligible to receive a performance bonus of up to 50% of his annual
salary during 2000 by determination of Simione's Compensation Committee. Mr.
Dewey is entitled to severance equal to 12 months salary plus any applicable
bonus in the event he is terminated without cause and does not return to full-
time employment at Mestek.

In addition to his base salary, Mr. Dewey was granted an option to purchase
150,000 shares of Simione common stock at a price of $1.75 per share, which
option vests ratably over three years. Mestek will assign to Mr. Dewey options
to purchase an additional 150,000 shares of Simione common stock to be obtained
by Mestek in the MCS merger at an exercise price of $2.00 per share. These
options vest in the event outstanding Simione options are exercised.

For a description of a severance agreement between Simione and Gary M.
Bremer, a former director and officer of Simione, see "Executive
Compensation -- Severance Agreements" on page 196. For a description of a
consulting agreement between Simione and a director of Simione, see "Proposal 2
for Simione and MCS Stockholders -- Election of Simione Directors and MCS
Designees to the Simione Board" beginning on page 165 and "-- Director
Compensation" on page 170. For a description of a consulting arrangement between
Simione and an affiliate of Mr. Anantharaman and Dr. Ellis, see "-- Compensation
Committee Interlocks and Insider Participation" on page 170.

On November 11, 1999, Barrett O'Donnell, Chairman of the Board of Simione,
loaned $500,000 to Simione for 24 months and David Ellis, a stockholder and
director designee of Simione, loaned $250,000 to Simione for nine months. Both
loans have an interest rate of 9%. See "The Merger and Investment
Agreement -- Mestek Loans" beginning on page 72 for additional discussion of
these loans.

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MANAGEMENT OF SIMIONE FOLLOWING THE MERGER

Following the merger, it is expected that the persons listed below will
serve as directors and executive officers of Simione.

Background biographies of current directors and nominees to be voted on by
Simione stockholders appear at "Proposal 2 for Simione and MCS
Stockholders -- Election of Simione Directors and MCS Designees to the Simione
Board -- Nominees to be Voted on by Simione Stockholders" beginning on page 165.
Background biographies of director designees of MCS appear at "Proposal 2 for
Simione and MCS Stockholders -- Election of Simione Directors and MCS Designees
to the Simione Board" "-- MCS Designees to be Voted on by MCS Stockholders for
Appointment to the Simione Board of Directors" beginning on page 167.

After the merger, Mr. Dewey will be retaining his position as Senior Vice
President and Secretary of Mestek, and he will devote approximately
three-quarters of his working time to his duties as President and Chief
Executive Officer of Simione.

<TABLE>
<S> <C> <C>
Barrett C. O'Donnell................ 46 Chairman of the Board, and Nominee
to Board
R. Bruce Dewey...................... 48 Chief Executive Officer, President,
and Director Designee of MCS
William J. Simione, Jr.............. 57 Executive Vice President and
Director, and Nominee to Board
Jack Arthur......................... 61 Senior Vice President of Product
Development and Product Management
George Hare......................... 44 Senior Vice President and Chief
Financial Officer
Kathryn McClellan................... 45 Senior Vice President of Customer
Services and Support
Charles N. Mead, M.D................ 52 Chief Medical and Technology Officer
Michael Quinn....................... 46 Senior Vice President of Operations,
HME Division
Robert J. Simione................... 49 Senior Vice President of Consulting
William A. Thomasmeyer.............. 45 President HME Division and Senior
Vice President of Sales and
Marketing
Other Director Designees of MCS:
Winston R. Hindle, Jr............. 68 Director
David W. Hunter................... 70 Director
John E. Reed...................... 84 Director
Stewart B. Reed................... 51 Director
Edward K. Wissing................. 62 Director
Simione Nominees/Director Designees of CareCentric:
Daniel J. Mitchell................ 42 Director
Jesse I. Treu..................... 52 Director
Other Simione Nominees:
Dr. David O. Ellis................ 57 Director
James A. Gilbert.................. 51 Director
</TABLE>

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<PAGE> 171

Jack Arthur has served as Senior Vice President of Product Development and
Product Management of Simione since January of 1999. From July of 1998 until
December of 1998, Mr. Arthur was a manager of product development with Eclipsys,
Inc., an information systems provider. From October of 1995 until June of 1998,
Mr. Arthur was the owner of Healthcare Consulting, Inc., a health care
information systems consulting company. From June of 1985 until October of 1995,
Mr. Arthur held various product development management positions with SMS, Inc.,
an information systems provider.

George Hare has served as the Senior Vice President and Chief Financial
Officer of Simione since May 1999. Since March of 1999, Mr. Hare has been a
Partner with Tatum CFO Partners, LLP. From February of 1988 to 1999, Mr. Hare
worked for ADT Security Services and its subsidiaries in various capacities. Mr.
Hare is a Certified Public Accountant.

Kathryn McClellan has served as Senior Vice President of Customer Services
and Support of Simione since November of 1998. From June of 1996 until November
of 1998, Ms. McClellan held various operational and customer services positions
with Simione. From April of 1991 until June of 1996, Ms. McClellan was an
administrator and director of Memorial Medical Center.

Charles N. Mead, M.D. has served as Chief Science and Technology Officer of
Simione since August 1999. From June 1993 to August 1999, Dr. Mead was Vice
Chairman, Chief Scientist and a director of CareCentric, which he co-founded in
1993. Dr. Mead has a long-standing involvement in biomedical computing and the
application of computers to medicine.

Michael Quinn has served as Senior Vice President of Operations of MCS
since 1977.

Robert J. Simione has served as Senior Vice President of Consulting of
Simione since October of 1996. From January of 1976 until September of 1996, Mr.
Simione was a principal of Simione & Simione.

William A. Thomasmeyer has served as President and Chief Executive Officer
of MCS since January of 1999. From 1996 until December of 1998, Mr. Thomasmeyer
was President of Mestek Technology, a Mestek subsidiary founded to pursue the
acquisition of software companies in market segments complementary to MCS. From
1989 through 1996, Mr. Thomasmeyer was President and C.E.O. of Virtual
Microsystems, Inc. and Logicraft Information Systems, two software companies
based in the CD-ROM networking market.

PRO FORMA OWNERSHIP OF SIMIONE CAPITAL STOCK

The following table sets forth information as to the number of shares of
Simione common stock that will be owned immediately after giving effect to the
merger, and as adjusted to give effect to the conversion of the Series A
Preferred Stock, by:

- each person expected to be a director of Simione;

- the person expected to be the Chief Executive Officer and the persons
expected to be the four other most highly compensated executive officers
of Simione;

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<PAGE> 172

- all persons expected to be Simione directors and executive officers, as a
group; and

- each person, entity, or group of affiliated persons expected to
beneficially own more than 5% of Simione's common stock, based on that
person's or entity's ownership of Simione common stock and the number of
outstanding shares of Simione common stock as of February 1, 2000.

For purposes of this table, beneficial ownership of securities is defined
according to the rules of the SEC and means generally the power to vote or
exercise investment discretion with respect to securities, regardless of any
economic interests therein. Except as otherwise indicated, MCS and Simione
believe that the beneficial owners of shares of Simione common stock listed
below will have sole investment and voting power with respect to such shares,
subject to community property laws where applicable. In addition, for purposes
of this table, a person or group is deemed to have beneficial ownership of any
shares which such person has the right to acquire within 60 days after the date
as of which these data are presented. For purposes of calculating the percentage
of outstanding shares held by each person named above, any shares which this
person has the right to acquire within 60 days after the date as of which these
data are presented are deemed to be outstanding, but not for the purpose of
calculating the percentage ownership of any other person.

The percentages were calculated based on the ratio of the number of shares
of Simione common stock beneficially owned by such beneficial owner as of
February 1, 2000 to the sum of:

- 8,744,790, the total number of outstanding shares of common stock as of
February 1, 2000,

- 7,449,266, the number of shares to be issued to the MCS stockholders upon
completion of the merger, and

- the number of shares of common stock issuable upon exercise of options or
warrants held by the applicable beneficial owner exercisable within 60
days of February 1, 2000.

The table does not reflect ownership of the Series B Preferred Stock and
the Series C Preferred Stock. None of this stock is currently outstanding. The
Series B Preferred Stock has two-for-one voting rights and the Series C
Preferred Stock has one-for-one voting rights. Neither the Series B Preferred
Stock nor the Series C Preferred Stock is convertible into common stock. If the
merger is completed, Mestek will own 100% of the Series B Preferred Stock and,
if Mestek converts its $850,000 note from Simione into Simione Series C
Preferred Stock (as it expects to upon the closing of the merger), it will own
100% of the Series C Preferred Stock.

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<PAGE> 173

The percentages in the "Adjusted" column have been adjusted to reflect the
conversion of 3,034,521 shares of Series A Preferred Stock into common stock.
For information regarding addresses, except where indicated, and indirect
beneficial ownership, see the table beginning at page 149.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
---------------------- ADJUSTED
NAME OF BENEFICIAL OWNER NUMBER PERCENT PERCENT
- ------------------------ --------- ---------- ----------
<S> <C> <C> <C>
Mestek, Inc.(1)(2)................................ 2,000,000 11.0 10.4
John E. Reed(1)(2)(3)............................. 4,829,944 26.5 22.8
Stewart B. Reed(2)(4)............................. 1,883,286 11.6 9.8
Barrett C. O'Donnell.............................. 1,286,973 7.7 6.5
O'Donnell Davis, Inc.............................. 961,973 5.8 4.9
Dr. David O. Ellis................................ 987,172 6.1 5.1
Gary M. Bremer.................................... 895,957 5.5 4.6
Rowan Nominees Limited............................ 884,873 5.5 4.6
Merrill Lynch Asset Management Group.............. 853,930 5.3 4.4
William J. Simione, Jr............................ 139,428 * *
Robert J. Simione................................. 54,654 * *
R. Bruce Dewey(2)................................. 261 * *
Dr. Charles N. Mead............................... -- -- --
William A. Thomasmeyer............................ -- -- --
Michael Quinn..................................... 3,062 * *
Jack Arthur(5).................................... -- -- --
James A. Gilbert.................................. 32,083 * *
Winston R. Hindle, Jr.(2)......................... 7,668 * *
David W. Hunter(2)(6)............................. 12,269 * *
Kathryn McClellan(5)(7)........................... 15,465 * *
Daniel J. Mitchell(8)............................. -- -- 1.9
Jesse I. Treu(8).................................. -- -- 4.0
Edward K. Wissing(2).............................. -- -- --
All directors and executive officers as a group
(22 persons)(9)................................. 9,321,021 49.0 47.5
</TABLE>

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

* Less than 1%.

(1) Includes 2,000,000 shares issuable upon exercise of a warrant to be issued
to Mestek in the MCS merger. Does not include approximately 1,943,708
shares issuable upon an option to be issued to Mestek in the MCS merger.
This option only vests as existing Simione options, warrants or conversion
rights are exercised. For purposes of this table, we have assumed that John
E. Reed has voting control of the securities held by Mestek.

(2) The address is 260 North Elm Street, Westfield, Massachusetts 01085.

(3) Excludes 7,965 shares of common stock which will be held by Mr. Reed's wife
and 11,319 shares of common stock which will be held by a family trust for
which he is not trustee, to which he disclaims ownership. Excludes
1,456,808 shares of common stock which will be held by John E. Reed as
trustee for various family trusts, but for which he disclaims beneficial
ownership; of the 1,456,808 shares disclaimed by John E. Reed, 1,127,748
shares are included in the shares listed as beneficially owned by his son,
Stewart B. Reed, as described in note (4) below. Includes 446,558 shares of
common stock owned by Sterling Realty Trust, a Massachusetts business

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<PAGE> 174

trust of which John E. Reed is the trustee and of which he and a family
trust are the beneficiaries.

(4) Includes 1,127,748 shares of common stock which will be owned by the
Stewart B. Reed Trust, of which Stewart B. Reed is the beneficiary and John
E. Reed is the trustee.

(5) The address is 6600 Powers Ferry Road, Atlanta, Georgia 30339. Includes
25,000 shares issuable upon exercise of options

(6) Excludes 7,965 shares of Simione common stock held by his spouse to which
he disclaims ownership.

(7) Includes 15,000 shares issuable upon exercise of options.

(8) Does not include 373,669 shares of Simione Series A Preferred Stock
beneficially owned by Mr. Mitchell and approximately 777,120 shares of
Simione Series A Preferred Stock beneficially owned by Mr. Treu.

(9) Includes 701,825 shares issuable upon exercise of options and 2,135,000
shares issuable upon exercise of warrants.

PROPOSAL 2 FOR SIMIONE AND MCS STOCKHOLDERS -- ELECTION OF SIMIONE DIRECTORS AND
MCS DESIGNEES TO THE SIMIONE BOARD

The board of directors of Simione consists of seven members. The current
terms of all existing directors expire upon the election and qualification of
the directors to be selected at this Annual Meeting.

NOMINEES TO BE VOTED ON BY SIMIONE STOCKHOLDERS

The board of directors has nominated the six individuals indicated below
for election to the board of directors at the special meeting, each to serve for
a one-year term to expire at the 2000 Annual Meeting.

The nominees have consented to being named herein and to serve if elected.
If any of them should become unavailable for election prior to the special
meeting, the proxies will be voted for a substitute nominee or nominees
designated by the board of directors.

The following sets forth information concerning each of the nominees for
election to the board of directors, including his name, age, principal
occupation or employment during at least the past five years and the period
during which such person has served as a director of Simione.

Barrett C. O'Donnell, age 46, has served as Chairman of the Board of
Simione since June 15, 1998, and served as Chief Executive Officer and President
from June 15, 1998 to September 9, 1999. Mr. O'Donnell has been a director of
Simione since October 1996. From October 1992 until October 1996, Mr. O'Donnell
served as Chairman of the Board of InfoMed Holdings, Inc., a Delaware
corporation that merged with Simione Central Holding, Inc., a Georgia
corporation, to form Simione effective October 8, 1996. Mr. O'Donnell also
served as Chief Executive Officer of InfoMed from November 1994 to October 1996.
From 1978 to present, Mr. O'Donnell has been Chairman of the Board,

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President and Chief Executive Officer of O'Donnell Davis, Inc., which is in the
consulting and investment advisory services business.

James A. Gilbert, age 51, has served as a director of Simione since May
1997 and as Secretary of Simione since February 2000. Mr. Gilbert has been
General Partner of Live Oak Equity Partners, a venture capital firm, since July
1998. From September 1996 to November 1997, Mr. Gilbert served as President,
Chief Operating Officer and a director of IMNET Systems, Inc., a provider of
electronic information and document management systems to the health care
industry. From January 1995 to September 1996, Mr. Gilbert served as Senior Vice
President and General Counsel at HBO & Company, a health care information
company. From 1988 to December 1994, Mr. Gilbert held several other positions at
HBO & Company.

Dr. David O. Ellis, age 57, is President and a director of EGL Holdings,
Inc., an Atlanta-based merchant banking group providing investment services and
capital to United States middle market companies. He has been with EGL and the
predecessor company, Corporate Finance Associates, since 1982. Dr. Ellis is
currently a director of several privately-held companies.

William J. Simione, Jr., age 57, is a certified public accountant who has
served as Vice Chairman of the Board and Executive Vice President of Simione
since October 1996. From January 1996 until October 1996, Mr. Simione served as
the President of Simione Central, Inc., a wholly-owned subsidiary of Simione.
From January 1975 until December 1995, Mr. Simione was Managing Partner of the
Home Health Care Consulting Division of Simione & Simione, CPAs. Since September
1995, Mr. Simione has also served as a director and an audit committee member of
Personnel Group of America, Inc., a leading provider of information technology
services and commercial staffing solutions. Mr. Simione has 32 years of
experience in the home health care industry.

Jesse I. Treu, age 52, became a director of Simione in August 1999. Since
1995, he has been Chairman of the board of directors of CareCentric. Jesse I.
Treu, Ph.D. has been a general partner of Domain Associates, L.L.C. and a member
of Biotechnology Investments Limited's U.S. Venture Capital advisory group since
Domain's inception 13 years ago. Prior to the formation of Domain, Dr. Treu had
twelve years' health care experience at GE and Technicon Corporation in a number
of research, marketing management, and corporate staff positions. As a venture
capitalist, he has been a director of over 18 early-stage health care companies,
11 of which have become public companies. Dr. Treu has served as founder,
president, and chairman of several of these companies. Dr. Treu received his
B.S. from Rensselaer Polytechnic Institute, and his M.A. and Ph.D. degrees from
Princeton University. Mr. Treu was elected to the board pursuant to the
CareCentric merger agreement.

Daniel J. Mitchell, age 42, became a director of Simione in August 1999.
Since 1995 he has been a director of CareCentric. Mr. Mitchell is a General
Partner of Capital Health Venture Partners, a venture capital firm that manages
the American Healthcare Fund and the American Healthcare Fund II and founding
manager of Sequel Venture Partners. Prior to co-founding Capital Health in 1985,
he was with the Institutional Venture Capital Fund at the First National Bank of
Chicago from 1983 to 1985, and with the Bank's Trust Investment Management
Division from 1981 to 1982. He holds a BS from the University of Illinois and an
MBA from the University of California, Berkeley. Mr. Mitchell was elected to the
board pursuant to the CareCentric merger agreement.

Mr. Anantharaman and Mr. Wilson are not seeking reelection to the board.

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THE BOARD OF DIRECTORS OF SIMIONE RECOMMENDS THAT SIMIONE STOCKHOLDERS VOTE
"FOR" THE ELECTION OF THE SIX NOMINEES LISTED ABOVE AS DIRECTORS.

MCS DESIGNEES TO BE VOTED ON BY MCS STOCKHOLDERS FOR APPOINTMENT TO THE SIMIONE
BOARD OF DIRECTORS

The board of directors of MCS has nominated the six individuals indicated
below to be designated by MCS stockholders for appointment by Simione to its
board of directors upon consummation of the merger.

The designees have consented to being named herein and to serve if elected
and subsequently appointed by Simione to its board of directors. If any of them
should become unavailable for election prior to the special meeting, the proxies
will be voted for a substitute designee or designees designated by the remaining
MCS designees.

The following sets forth information concerning each of the designees,
including his name, age, principal occupation or employment during at least the
past five years and the period during which such person has served as a director
or officer of Mestek.

R. Bruce Dewey has served as Senior Vice President and General Counsel of
Mestek since 1994 and Secretary of Mestek since 1992. Mr. Dewey was Vice
President -- Administration prior to 1994. Prior to joining Mestek in 1990, Mr.
Dewey was an attorney in private practice in Seattle, Washington most recently
with Cairncross, Ragen & Hempelmann from 1987 to 1990. Prior to the merger of
Mestek, Inc. and Reed National Corp., Mr. Dewey had been Assistant to the
President of Reed from 1979 to 1983 and had been affiliated with the
Cooper-Weymouth, Peterson division of Reed from 1975 to 1979. In accordance with
the terms of the merger agreement, Mr. Dewey was appointed the Chief Executive
Officer of Simione as of September 9, 1999. Mr. Dewey will remain Senior Vice
President and Secretary of Mestek and will spend approximately 75% of his time
on Simione. Mr. Dewey was a director of MCS from June 1992 to August 1999.

Winston R. Hindle, Jr. has been a director of Mestek since 1994. Mr. Hindle
was Senior Vice President of Digital Equipment Corporation, Maynard,
Massachusetts, prior to his retirement in July, 1994. In his 32 years with
Digital, he managed both corporate functions and business units and was a member
of Digital's Executive Committee. Mr. Hindle is a member of Mestek's Executive
Committee. Mr. Hindle serves as a director of National Northeast Corporation and
MCS, Inc., subsidiaries of Mestek. Mr. Hindle is also a director of Keane, Inc.,
of Boston, Massachusetts and CP Clare Corporation of Beverly, Massachusetts.

David W. Hunter has served as a director of Mestek since 1985. Mr. Hunter
has been Chairman of Hunter Associates, Inc., an investment banking firm in
Pittsburgh, Pennsylvania since 1992. From 1990 to 1992 he was Chairman Emeritus
of Parker/Hunter, Inc., an investment banking firm in Pittsburgh, Pennsylvania,
where he was Chairman from 1978 until 1990. Mr. Hunter is also a director of
Lockhart Companies, Kiene Diesel Accessories, Inc., Justifacts, Quanterra, Inc.
and U.S. Tool & Die Corporation. He served as Chairman of the Board of Governors
of the National Association of Securities Dealers, Inc. from 1986 to 1987.

John E. Reed has been the Chairman of the Board of MCS since 1986. Mr. Reed
has been a director of Mestek since 1986. Mr. J.E. Reed has been Chairman of the
Board, President and Chief Executive Officer of Mestek since 1989, is a member
of the Executive Committee and serves on the boards of Mestek's subsidiaries.
From 1986 until 1989 he

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was President and Chief Executive Officer and prior to the 1986 merger of
Mestek, Inc. and Reed National Corp., had been President and Chief Executive
Officer of Reed since he founded it in 1946. Mr. Reed is also a director of
Wainwright Bank & Trust Co., Boston, Massachusetts.

Stewart B. Reed has been a director of MCS since 1987. Mr. Reed is also a
director of Mestek, a position he has held since 1986. Mr. Reed served as
Executive Vice President of Mestek from 1986 to 1996. Prior to the 1986 Merger
of Mestek, Inc. and Reed National Corp., Mr. Reed had been Executive Vice
President of Reed National Corp. in charge of corporate development. Mr. Reed
had been employed by Reed National Corp. since 1970. Mr. Reed is the son of John
E. Reed, Chairman of the Board, President and Chief Executive Officer of Mestek
and the Chairman of the Board of MCS.

Edward K. Wissing retired in 1998 from American HomePatient of Nashville,
Tennessee, a regional provider of home health care products and services, a
company which he founded. He maintains an active role in the home health care
industry and has twice chaired the Health Industry Distributors Association
(HIDA). Mr. Wissing has also served as chairman of HIDA's Educational Foundation
and serves on the board of American HomePatient and Psychiatric Solutions, Inc.,
a Nashville-based mental health services provider.

Under the merger agreement, if any of the Simione board designees selected
by the MCS stockholders is removed or resigns from the board during the 18 month
period after the closing date of the merger, the remaining MCS designees shall
fill the vacancy. In addition, a majority of the MCS designees can remove any
MCS designee from the list of MCS designees but may not remove him from his
office as a director before the end of the designee's term.

THE BOARD OF DIRECTORS OF MCS RECOMMENDS THAT MCS STOCKHOLDERS VOTE "FOR" THE
SELECTION OF THE SIX DESIGNEES LISTED ABOVE TO BE APPOINTED BY SIMIONE TO ITS
BOARD OF DIRECTORS UPON CONSUMMATION OF THE MERGER.

BOARD OF DIRECTORS AND COMMITTEE MEETINGS

The board of directors of Simione held five meetings during 1998. The board
of directors has established an Audit Committee and a Compensation Committee.
The Audit Committee:

- reviews Simione's accounting practices and financial results;

- consults with and reviews the services provided by Simione's independent
accountants; and

- reviews and approves, with the concurrence of a majority of the
disinterested directors of Simione, transactions, if any, with affiliated
parties.

Currently, the only member of the Audit Committee is Mr. Anantharaman. The
Audit Committee held one meeting during 1998.

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The Compensation Committee:

- reviews and recommends to the board of directors the compensation and
benefits of all the executive officers of Simione;

- administers Simione's compensation and benefit plans; and

- reviews general policies relating to compensation and benefits of
employees of Simione.

The members of the Compensation Committee during 1998 were Messrs.
Anantharaman and Gilbert. The Compensation Committee held two meetings during
1998.

Each of Simione's directors in 1998 attended at least 75% of the meetings
of the board of directors and the Committees, if any, on which they served.

If the MCS merger is approved, the board of directors intends to reorganize
its committee structure. Management anticipates that the committee memberships
will be as follows:

<TABLE>
<S> <C>
Executive Committee: R. Bruce Dewey (Chairman)
John E. Reed
Barrett C. O'Donnell
Compensation Committee: John E. Reed (Chairman)
David O. Ellis
Jesse I. Treu
Audit Committee: David O. Ellis (Chairman)
James A. Gilbert
Winston R. Hindle, Jr.
Nominating Committee: David W. Hunter (Chairman)
James A. Gilbert
William J. Simione, Jr.
</TABLE>

VOTING AGREEMENT

The merger agreement contains a voting agreement regarding the election of
directors. Under this agreement, the directors of Simione will appoint six
individuals designated by MCS' stockholders at the MCS special meeting to the
board of Simione. For a period of eighteen months after the effective date of
the merger, Simione will name the six MCS designees as nominees to the Simione
board in any proxy statement relating to the election of directors.

For so long as Simione's Series B Preferred Stock remains outstanding, in
the event that Simione's board is unable to reach a decision on a vote on any
matter in two consecutive board meetings, the number of directors shall be
increased by one member and the holders of the Series B Preferred Stock shall
have the right to appoint such member.

The three major stockholders of MCS, John E. Reed, Stewart Reed and Herbert
Burk, are obligated to vote their Simione shares in favor of the merger and all
nominees named in Simione's proxy statements. However, Simione will not be
required to nominate, and the major stockholders of MCS will not be required to
vote for, a particular candidate if that candidate is subject to
disqualifications related to potential director misconduct. The slate of
designees to be voted on by the MCS stockholders are John E. Reed, Stewart B.
Reed, David W. Hunter, Winston R. Hindle, Jr., R. Bruce Dewey and Edward K.
Wissing as their initial designees to the Simione board, to be voted upon by
MCS' stockholders at

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<PAGE> 179

the MCS special meeting. The three major MCS stockholders will control
approximately 66% of the MCS common stock. Therefore selection of the slated
designees and approval of the merger agreement by the MCS stockholders is
assured.

DIRECTOR COMPENSATION

Directors who are officers of Simione receive no additional compensation
for serving on the Board of Directors. Directors who are not officers of Simione
receive fees of $1,000, $500 and $250 for each board, Committee and telephone
meeting, respectively, attended. All directors receive reimbursement for
expenses in connection with attendance at board and Committee meetings. See
"Compensation Committee Interlocks and Insider Participation" below for a
discussion of consulting arrangements with an affiliate of Mr. Anantharaman and
Dr. Ellis.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the board of directors is currently comprised
of Messrs. Anantharaman and Gilbert. Neither of these directors ever served as
an officer or employee of Simione or any of its subsidiaries.

Simione had a consulting agreement with EGL Holdings, a venture capital
firm, with EGL providing consulting services on general business operations and
corporate investments including financial analysis, review of industry trends
and assistance with respect to merger or acquisition opportunities. Mr.
Anantharaman, a director of Simione, was a partner at EGL from 1987 until June
1998. Dr. David O. Ellis, a Simione board nominee, is a partner of EGL. The
consulting agreement expired on June 30, 1999 and provided for a monthly
consulting fee of $5,000, plus reimbursement of out-of-pocket expenses. The fees
were determined by negotiation between the parties. The amount paid to EGL by
Simione in consulting fees totaled $60,027 in the year ended December 31, 1998.

PROPOSAL 3 FOR SIMIONE STOCKHOLDERS -- TO APPROVE THE
ISSUANCE UPON CONVERSION OF SERIES A PREFERRED STOCK OF
SHARES OF COMMON STOCK, AS REQUIRED BY NASDAQ RULES.

Nasdaq rules require Simione to obtain stockholder approval for the
issuance of securities involving the sale of 20% or more of its common stock.
Nasdaq may delist the securities of any issuer that fails to obtain this
stockholder approval before the issuance of the securities.

On July 12, 1999, Simione entered into a merger agreement with CareCentric
Solutions, Inc. To facilitate the closing of the merger, Simione agreed to
complete the merger without stockholder approval and issue Series A Preferred
Stock, which is convertible into common stock only after stockholder approval.
Simione received a letter from Nasdaq approving the issuance of the Series A
Preferred Stock on this basis.

The CareCentric merger was completed on August 12, 1999, for consideration,
part in cash and part in Series A Preferred Stock, worth a total of $9,312,460.
Under the merger agreement, CareCentric merged into a wholly-owned subsidiary of
Simione, and Simione issued 3,034,521 shares of Series A Preferred Stock to the
former preferred stockholders and noteholders of CareCentric, and paid $3.00 per
share in cash to the former common stockholders of CareCentric, or approximately
$200,000 cash in the aggregate. The Series A Preferred Stock is convertible into
Simione common stock on a share-for-share basis only upon the approval of the
conversion by a majority of the Simione stockholders.

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If the Series A Preferred Stock is converted, it will represent approximately
25.8% of the outstanding Simione common stock, and if the MCS merger also is
completed, it will represent approximately 15.8% of the outstanding Simione
common stock and approximately 10% of the total voting power of all classes of
Simione stock.

In connection with the merger agreement, Barrett O'Donnell, Chairman of
Simione, O'Donnell Davis, Inc., a corporation controlled by Mr. O'Donnell, and
Rowan Nominees Limited each signed a voting agreement to vote their Simione
shares in favor of the conversion. A total of 1,584,922 shares, representing
18.1% of the common stock, are subject to these voting agreements. In addition,
Mestek has agreed to cause holders of at least 60% of MCS' outstanding stock to
vote their Simione shares in favor of the conversion of the Series A Preferred
Stock. The three major MCS stockholders have committed to vote the shares of
Simione common stock that they will receive in the MCS merger in favor of the
conversion. If the MCS merger is completed, these three stockholders will
control a total of approximately 33% of the outstanding Simione common stock.
Because the MCS merger will not be completed until after the special meeting, if
at all, these major stockholders will not be able to vote these shares at the
special meeting.

The former CareCentric preferred stockholders and noteholders will receive
additional shares of Simione common stock, up to a maximum of 3,034,521
additional shares, if the average closing market price of Simione common stock
during the fourth quarter of 2000 is less than $3.00 per share.

The number of additional shares to be issued is computed on a sliding
scale, based on the average market price of Simione common stock during the
fourth quarter of 2000. The table below illustrates the way the formula
operates:

<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
AVERAGE MARKET ADDITIONAL
PRICE, FOURTH QUARTER 2000 SHARES
- -------------------------- ----------
<S> <C>
$1.00 3,034,521
1.50 3,034,521
2.00 1,517,260
2.50 606,904
3.00 0
</TABLE>

The number of shares of common stock that may be acquired upon conversion
of the Series A Convertible Preferred Stock is subject to adjustment in the
event of a stock split, stock dividend, reorganization or reclassification. The
numbers shown above have not been adjusted to reflect the proposed reverse stock
split.

RIGHTS AND PREFERENCES OF THE SERIES A PREFERRED STOCK

Certificate of Designations. The Series A Preferred Stock will have
designations, voting rights, preferences, limitations and special rights as set
forth in the Certificate of Designations, Preference and Rights of Series A
Preferred Stock filed with the Secretary of State of Delaware on August 6, 1999,
as amended by a subsequent filing with the Secretary of State of Delaware on
January 10, 2000, copies of which are included as Appendix D to this joint proxy
statement/prospectus.

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<PAGE> 181

Conversion Rights. Pursuant to the Series A Certificate of Designations
setting forth the terms of the Series A Preferred Stock, the Series A Preferred
Stock is convertible into shares of Simione common stock, if Simione satisfies
one of these conversion conditions:

- obtains approval of the conversion from the holders of the majority of
the outstanding shares of Simione common stock;

- receives a ruling from the Nasdaq that Simione stockholder approval is
not necessary for the conversion under Nasdaq rules;

- receives an opinion from counsel that Simione stockholder approval is not
necessary under Nasdaq rules; or

- ceases to have a class of its equity securities listed on Nasdaq for
reasons unrelated to the issuance or conversion of the Series A Preferred Stock.

Upon a conversion, each share of Series A Preferred Stock will convert into one
share of Simione common stock, with adjustments for share dividends,
subdivisions or recombinations. At any time after the satisfaction of a
conversion condition, each holder of Series A Preferred Stock can convert all or
some of that holder's shares into shares of Simione common stock upon written
notice to Simione as provided in the Certificate of Designations. Alternately,
at any time after the satisfaction of a conversion condition, Simione may
require the conversion of all of the Series A Preferred Stock upon notice to the
holders of such stock. Simione intends to require conversion of the Series A
Preferred Stock if stockholder approval is obtained.

If a conversion condition is not satisfied by June 30, 2000, penalties
attach in favor of the holders of Series A Preferred Stock, including:

- liquidation preferences;

- preferred dividends; and

- redemption rights for the Series A Preferred Stock.

Beginning after June 30, 2000, cumulative dividends will accrue at the rate
of 8% per year of the original issuance price of $3.00 per share. Each share of
Series A Preferred Stock has a liquidation preference equal to $3.00 per share,
plus accrued dividends at the rate of 8% per year from the later of June 30,
2000 or the date of issuance for each share of Series A Preferred Stock. The
redemption rights would require Simione to redeem shares of Series A Preferred
Stock at a price tied to the market price of Simione common stock as of the date
Simione receives the redemption notice from the holder of Series A shares.

Voting Rights. Series A Preferred Stock has no voting rights, except as
otherwise required under the Delaware General Corporation Law.

Dividends and Distributions. Currently, the Series A Preferred Stock does
not pay dividends. If our stockholders do not approve the conversion of the
Series A Preferred Stock into common stock by June 30, 2000, the Series A
Preferred Stock will pay dividends quarterly at a per year rate of 8% from the
later of the date of issuance or June 30, 2000.

Mandatory Redemption. After June 30, 2000, Simione is obligated to redeem
any outstanding shares of Series A Preferred Stock at the request of the holder.
Simione must pay for the Series A Preferred Stock in cash at a price equal to
the average market price per share of Simione common stock for the ten trading
days prior to the redemption request.

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<PAGE> 182

Registration Rights. Because the shares of Series A Preferred Stock and
the shares of Simione common stock into which the Series A Preferred Stock will
be convertible will not be registered, Simione has granted registration rights
to the recipients of shares of Simione Series A Preferred Stock in the
CareCentric merger (the "Series A Rights Holders"). The registration rights
consist of one "demand" registration and an unlimited number of "piggy-back"
registrations as described below.

The "demand" right provides that at any time between January 1, 2001 and
December 31, 2002, the Series A Rights Holders are entitled to make one demand
that Simione register their shares of Simione common stock. This registration
will be made upon the request of Series A Rights Holders holding an aggregate of
at least 40% of the total registrable shares held by the Series A Rights
Holders. Simione, however, will not be required to file a registration statement
if it has de-registered the Simione common stock under the Exchange Act as a
result of a going private transaction. Generally, the "piggy-back" rights
provide that at any time from the closing date of the CareCentric merger until
December 31, 2002, if Simione proposes to register any of its securities under
the Securities Act, the Series A Rights Holders will have the right to include
in the registration statement as many of their registrable shares as they
request within thirty days of notice from Simione of the registration. Simione
must keep any registration statement filed pursuant to the above registration
rights effective for a maximum of two years from the date of filing.

In connection with any registration, Simione is obligated to use its best
efforts to effect the requested registration under the Securities Act. However,
Simione may defer the filing of any registration statement or suspend the use of
a prospectus under a currently effective registration statement for "good
cause," generally defined in the CareCentric merger agreement to include Simione
being engaged in active negotiations with respect to the acquisition of a
"significant subsidiary" as defined in Regulation S-X promulgated by the
Commission, or if in the opinion of Simione's counsel, the filing would require
the inclusion therein of certified financial statements other than those in
respect of Simione's most recently ended full fiscal year and any preceding full
fiscal year. Further, if the managing underwriter in an underwritten offering
elects to limit the number or amount of securities to be included in any
registration, all holders of registration rights of Simione who request
registration, including the Series A Rights Holders, Mestek and the major
stockholders of MCS will be equal in priority and will participate pro rata
based upon the ratio of the number of securities requested by each security
holder to be included in the offering to the total number of securities to be
offered. This right to participate pro rata is subject, however, to the waiver
of prior holders of registration rights pursuant to a Registration Rights
Agreement dated October 6, 1996, by and among InfoMed Holdings, Inc. and the
stockholders of Simione named therein. Simione is obligated to obtain a waiver
of this agreement from the largest stockholders and has agreed to use reasonable
efforts to obtain the waiver from certain stockholders. However, to the extent
that these holders do not execute the waiver, their registration rights will be
prior to those of the Series A Rights Holders.

Simione has agreed to pay all expenses and fees in connection with any
registration pursuant to the registration rights provided in the CareCentric
merger agreement, except any:

- commissions;

- underwriting discounts;

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<PAGE> 183

- applicable transfer taxes; or

- fees of any attorneys or other advisors retained by the Series A Rights
Holders.

The Series A Rights Holders have agreed to indemnify Simione, and Simione has
agreed to indemnify the Series A Rights Holders, against liabilities in
connection with any registration statement.

Protective Provision. The Company has agreed that it will not, without the
consent of a majority of the holders of the Series A Preferred Stock, amend the
Series A Preferred Stock in a manner which materially and adversely affects the
rights of its holders.

Change of Control. If the Company merges into, sells substantially all of
its assets to, or incurs a change of control with respect to, an unaffiliated
third party (other than in the proposed transaction with Mestek and MCS), then
the holders of the Series A Preferred Stock shall receive the same consideration
as a holder of outstanding Simione common stock. In addition, a Series A
Preferred Stockholder may require Simione to purchase the Series A Preferred
Stock for $3.00 per share, as adjusted for stock splits, in the event of a
similar change of control transaction.

DISINTERESTED TRANSACTION

Daniel J. Mitchell and Jesse I. Treu, directors of Simione, became
beneficial owners of 373,669 shares and 777,120 shares, respectively, of
non-voting Series A Preferred Stock as part of the CareCentric merger. Upon
stockholder approval, the Series A Preferred Stock will be exchanged for Simione
common stock, which will have voting rights. If all of the Series A Preferred
Stock were converted into Simione common stock, Mr. Mitchell would be the
beneficial owner of approximately 3.1% of outstanding Simione common stock and
Mr. Treu would be the beneficial owner of 6.6% of the outstanding Simione common
stock. These percentages will decline to 1.9% for Mr. Mitchell and 4.0% for Mr.
Treu if the MCS merger is consummated.

If the proposal is approved by a majority of votes cast by holders of
common stock other than Mr. Mitchell and Mr. Treu, then the transaction will
have been approved by a disinterested majority of shares as provided for under
the relevant provisions of the Delaware General Corporation Law. The Delaware
General Corporation Law does not require a majority of disinterested directors
of Simione to approve the issuance of Simione common stock upon conversion of
the Series A Preferred Stock.

DILUTIVE EFFECTS OF CONVERSION

The conversion of Series A Preferred Stock will increase the number of
outstanding shares of Simione common stock by 3,034,521 additional shares. Up to
an additional 3,034,521 shares of Simione common stock will be required to be
issued by Simione if the closing market price of Simione common stock does not
average $3.00 during the fourth quarter of 2000. All of these shares will be
listed for trading on the Nasdaq Stock Market. We are uncertain whether the
current market price of Simione has fully reflected the overhang effect of this
potential issuance. If the market price does not reflect this, the conversion
could cause the market price to decline. In addition, the conversion will dilute

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<PAGE> 184

the approximate ownership percentages of current Simione stockholders, as
illustrated by the following table.

<TABLE>
<CAPTION>
CURRENT SIMIONE
STOCKHOLDERS
-------------------
VOTING
OWNERSHIP CONTROL
--------- -------
<S> <C> <C>
Before conversion or merger................................. 100.0% 100.0%
After conversion............................................ 74.2 74.2
----- -----
After MCS merger and conversion............................. 45.5 28.0
----- -----
After conversion with maximum price protection shares....... 59.0 59.0
----- -----
After MCS merger and conversion with maximum price
protection................................................ 39.3 25.5
----- -----
</TABLE>

REASONS FOR THE EXCHANGE

If this proposal to convert the Series A Preferred Stock into common stock
is not approved, the following negative consequences to Simione and to its
stockholders may occur:

- Simione will have to begin paying dividends from the later of the date of
issuance of the Series A Preferred Stock or June 30, 2000, at a dividend
rate of 8% on the Series A Preferred Stock;

- the Series A Preferred Stock would not be redeemable at Simione's option;
and

- because the Series A Preferred Stock is not convertible, Simione would be
obligated to redeem the Series A Preferred Stock for cash after June 30,
2000.

These mandatory redemption requirements could create a situation in which
Simione could be forced to enter into unfavorable financing transactions in
order to obtain the required funds. There can be no assurance that Simione can
obtain financing to satisfy this obligation.

However, if this proposal is approved and Simione is able to issue the
common stock in exchange for the currently outstanding shares of Series A
Preferred Stock, Simione's stockholders could benefit because:

- no dividends will be paid on the Series A Preferred Stock at an annual
rate of 8%;

- Simione will convert the Series A Preferred Stock into common stock; and

- there will be no cash redemption, thereby avoiding the need for Simione
to obtain additional financing to satisfy the redemption obligation.

THE BOARD OF DIRECTORS OF SIMIONE RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL
OF THE ISSUANCE OF SHARES OF SIMIONE COMMON STOCK UPON CONVERSION OF THE
SIMIONE SERIES A CONVERTIBLE PREFERRED STOCK.

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<PAGE> 185

PROPOSAL 4 FOR SIMIONE STOCKHOLDERS -- INCREASE IN THE NUMBER OF SHARES RESERVED
FOR ISSUANCE UNDER THE SIMIONE CENTRAL
HOLDINGS, INC. OMNIBUS EQUITY-BASED INCENTIVE PLAN

Simione maintains the Simione Central Holdings, Inc. Omnibus Equity-based
Incentive Plan, as amended, which allows Simione to grant equity-based
compensation to key employees, officers, directors and consultants of Simione or
an affiliate. There are currently 1,250,000 shares of Simione common stock
authorized to be granted under the incentive plan. The number of shares of
Simione common stock associated with any forfeited Stock Incentive, as described
below, is added back to the number of shares that can be issued under the
incentive plan. The incentive plan was adopted by Simione's board of directors
on March 26, 1997 and approved by the Simione's stockholders on June 21, 1997.

The board has proposed to increase the number of shares of Simione common
stock available for grant under the incentive plan as of June 8, 1999 by
1,000,000 to a total of 2,250,000, subject to stockholder approval. The number
of shares is subject to adjustment for the reverse stock split, if it is
completed. Awards under the incentive plan are to be determined by the
compensation committee of the Simione board of directors. The incentive plan
permits the compensation committee to make awards of a variety of equity-based
incentives, including stock awards, incentive stock options and non-qualified
stock options to purchase shares of Simione common stock, stock appreciation
rights, phantom shares, performance unit appreciation rights, and dividend
equivalent rights (collectively, "Stock Incentives"). Through January 31, 2000,
there were options to purchase 1,004,243 shares of Simione common stock
outstanding under the incentive plan.

EFFECT OF INCREASE IN SHARES

The proposed amendment will increase the maximum number of shares that may
be issued under the incentive plan. The other terms of the incentive plan will
remain unchanged. These terms are described below.

The amendment to increase the number of shares may have the effect of
increasing the number of outstanding shares of Simione common stock. Simione
intends to register the additional shares under the Securities Act of 1933 and
list them on the Nasdaq National Market or SmallCap Market. Although Simione
intends to grant stock options under the incentive plan at an exercise price
equal to the market price on the date of grant, the exercise of the options
could have a dilutive effect if the stock price later increases. For information
regarding the market value of the common stock underlying the stock options and
other awards under the incentive plan see "Market Price Information" on page 16.

GRANTS OF STOCK INCENTIVES

The number of shares of common stock as to which a Stock Incentive is
granted and to whom any Stock Incentive is granted shall be determined by the
compensation committee, subject to the provisions of the incentive plan. Stock
Incentives issuable may be made exercisable or settled at such prices and may be
made forfeitable or terminable under such terms as are established by the
compensation committee, to the extent not otherwise inconsistent with the terms
of the incentive plan. Each Stock Incentive will be evidenced by a Stock
Incentive agreement or made subject to the terms of a Stock

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<PAGE> 186

Incentive program, each containing terms and restrictions as the compensation
committee may deem appropriate. Under the incentive plan as amended to date, no
participant may be granted during any one year period rights to shares of common
stock under options and stock appreciation rights which, in the aggregate,
exceed 250,000 shares of common stock.

EXERCISE PRICE

The incentive plan allows for the grant of incentive stock options and
non-qualified stock options. The compensation committee will determine whether
an option is an incentive stock option or a non-qualified stock option at the
time the option is granted. The exercise price of an option is established by
the compensation committee. The exercise price of an incentive stock option may
not be less than the fair market value of the common stock on the date of the
grant, or less than 110% of the fair market value if the participant controls
more than 10% of the voting power of Simione or a subsidiary. Non-qualified
stock options may be made exercisable at a price equal to, less than or more
than the fair market value of the common stock on the date that the option is
awarded. The compensation committee may permit an option exercise price to be:

- paid in cash or by the delivery of previously-owned shares of common
stock;

- satisfied through a cashless exercise executed through a broker; or

- satisfied by having a number of shares of common stock otherwise issuable
at the time of exercise withheld.

TERMS OF OPTIONS

The term of an option will be specified in the applicable Stock Incentive
agreement. The term of an incentive stock option may not exceed ten years from
the date of grant. However, any incentive stock option granted to a participant
who controls more than 10% of the voting power of Simione or a subsidiary will
not be exercisable after the expiration of five years after the date the option
is granted. Subject to any further limitations in a Stock Incentive agreement,
in the event of a participant's termination of employment, an incentive stock
option will become unexercisable no later than three months after the date of
such termination of employment. However, if termination of employment is due to
death or disability, one year will be substituted for the three-month period.

STOCK APPRECIATION RIGHTS

Stock appreciation rights may be granted separately or in connection with
another Stock Incentive, and the Compensation Committee may provide that they
are exercisable at the discretion of the holder or that they will be paid at a
time or times certain or upon the occurrence or non-occurrence of certain
events. Stock appreciation rights may be settled in shares of common stock or in
cash, according to terms established by the Compensation Committee with respect
to any particular award.

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<PAGE> 187

ELIGIBILITY TO PARTICIPATE

The classes of persons eligible to participate in the incentive plan, and
the approximate number of persons in each class, are listed below.

<TABLE>
<CAPTION>
APPROXIMATE NUMBER
CLASS OF PARTICIPANTS
- ----- ------------------
<S> <C>
Executive Officers 7
Non-Executive Employees 190
Non-Employee Directors 7
</TABLE>

THE COMPENSATION COMMITTEE

The compensation committee may grant shares of Simione common stock to a
participant as stock awards, subject to such restrictions and conditions, if
any, as the compensation committee may determine. Dividend equivalent rights,
performance units and phantom shares may be granted in such numbers or units and
may be subject to such conditions or restrictions as the compensation committee
may determine and will be payable in cash or shares of common stock, as the
compensation committee may determine. The compensation committee may make cash
awards designed to cover tax obligations of employees that result from the
receipt or exercise of a Stock Incentive. The compensation committee currently
consists of Murali Anantharaman and James Gilbert.

TRANSFERABILITY OF STOCK INCENTIVES

Stock Incentives generally are not transferable or assignable during a
holder's lifetime. However, Stock Incentives may include exercise, conversion or
settlement rights to a holder's estate or personal representative in the event
of the holder's death or disability. At the compensation committee's discretion,
Stock Incentives that are subject to termination upon termination of employment
may be canceled, accelerated, paid or continued, subject to the terms of the
applicable Stock Incentive agreement and to the provisions of the incentive
plan.

ADJUSTMENTS TO STOCK INCENTIVES

The number of shares of common stock reserved for issuance in connection
with the grant or settlement of Stock Incentives or to which a Stock Incentive
is subject, as the case may be, and the exercise price of each option are
subject to adjustment in the event of any recapitalization of Simione. In the
event of certain corporate reorganizations, Stock Incentives may be substituted,
canceled, accelerated, cashed-out or otherwise adjusted by the compensation
committee, provided such adjustment is not inconsistent with the terms of the
incentive plan or any agreement reflecting the terms of a Stock Incentive.

PLAN AMENDMENTS

Although the incentive plan may be amended by the board of directors of
Simione without stockholder approval, the board of directors also may condition
any such amendment upon stockholder approval if stockholder approval is deemed
necessary or appropriate in consideration of tax, securities or other laws. No
such action by the board of directors may adversely affect the rights of a
holder of a Stock Incentive without the holder's consent. Because the listing
requirements of The Nasdaq Stock Market and the

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<PAGE> 188

federal tax regulations governing incentive stock options require stockholder
approval for certain stock-based management incentive plans, Simione is
submitting this proposal for approval by Simione's stockholders.

The affirmative vote of a majority of the shares of common stock present in
person or represented by proxy at the annual meeting or a special meeting of
stockholders and actually voting is required for approval of the increase in the
number of shares reserved for issuances under the incentive plan.

NEW PLAN BENEFITS

The amount of future stock incentives under the incentive plan to

- Simione's Chief Executive Officer;

- Simione's named executive officers;

- all current executive officers as a group; and

- all employees, including all officers who are not executive officers, as
a group

are not determinable because, under the terms of the incentive plan, grants are
made in the discretion of the compensation committee. Future option exercise
prices under the incentive plan are not determinable because they are based upon
the fair market value of Simione's common shares on the date of grant.

FEDERAL INCOME TAX CONSEQUENCES TO PARTICIPANTS

A participant will not recognize income upon the grant of an option or at
any time prior to the exercise of the option or a portion thereof. At the time a
participant exercises a non-qualified option or portion thereof, he or she will
recognize compensation taxable as ordinary income in an amount equal to the
excess of the fair market value of the common stock on the date the option is
exercised over the price paid for the common stock, and Simione will then be
entitled to a corresponding deduction.

A participant who exercises an incentive stock option will not be taxed at
the time he or she exercises his or her option or a portion thereof. Instead, he
or she will be taxed at the time he or she sells the common stock purchased
pursuant to the option. A participant will be taxed on the difference between
the price he or she paid for the stock and the amount for which he or she sells
the stock. If a participant does not sell the stock prior to two years from the
date of grant of the option and one year from the date the stock is issued to
him or her, the gain will be capital gain and Simione will not get a
corresponding deduction. If a participant sells the stock at a gain prior to
that time, the difference between the amount the participant paid for the stock
and the lesser of the fair market value on the date of exercise or the amount
for which the stock is sold will be taxed as ordinary income and Simione will be
entitled to a corresponding deduction. If the stock is sold for an amount in
excess of the fair market value on the date of exercise, the excess amount is
taxed as capital gain. If a participant sells the stock for less than the amount
he or she paid for the stock prior to the one or two year periods indicated, no
amount will be taxed as ordinary income and the loss will be taxed as a capital
loss. Exercise of an incentive stock option may subject a participant to, or
increase a participant's liability for, the alternative minimum tax.

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<PAGE> 189

A participant generally will not recognize income upon the grant of a stock
appreciation right, dividend equivalent right, performance unit appreciation
right or phantom share. At the time a participant receives payment under any of
these equity incentives, he or she generally will recognize compensation taxable
as ordinary income in an amount equal to the cash or the fair market value of
the common stock received, and Simione will then be entitled to a corresponding
deduction.

A participant will not be taxed upon the grant of a stock award if such
award is not transferable by the participant or is subject to a "substantial
risk of forfeiture," as defined in the Internal Revenue Code. However, when the
shares of common stock that are subject to the stock award become transferable
by the participant and are no longer subject to a substantial risk of
forfeiture, a participant will recognize compensation taxable as ordinary income
in an amount equal to the fair market value of the stock subject to the stock
award, less any amount paid for such stock, and Simione will then be entitled to
a corresponding deduction. However, if a participant so elects at the time of
receipt of a stock award that is subject to a substantial risk of forfeiture, he
or she may include the fair market value of the stock subject to the stock
award, less any amount paid for such stock, in income at the time of grant and
Simione also will be entitled to a corresponding deduction at that time.

This proposal is being presented to the stockholders of Simione as a
separate proposal from the merger proposal, and is not a condition to the
approval of the merger proposal or the completion of the merger.

THE BOARD OF DIRECTORS OF SIMIONE RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE INCREASE IN THE NUMBER OF SHARES OF SIMIONE COMMON STOCK RESERVED FOR
ISSUANCE UNDER THE INCENTIVE PLAN.

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PROPOSAL 5 FOR SIMIONE STOCKHOLDERS -- REVERSE STOCK SPLIT PROPOSAL

The Simione board has approved this proposal for inclusion into this Proxy
Statement. This proposal seeks stockholder authorization to effect an amendment,
if deemed necessary by the Simione board in its sole discretion, to Simione's
Certificate of Incorporation to effect, at any time within one year following
stockholder approval, a reverse stock split of the Simione common stock, on the
basis of one of the following ratios:

- one share in exchange for every three issued and outstanding shares,

- one share in exchange for every four issued and outstanding shares or

- one share in exchange for every five issued and outstanding shares.

The Simione board will have the discretion to determine the appropriate
ratio immediately prior to effecting the reverse split. The Simione board
believes that stockholder approval of the one-for-three, one-for-four or
one-for-five exchange ratio (as opposed to approval of one specified ratio) in
which the reverse split may be effected will provide the Simione board with the
maximum flexibility to achieve the purposes of the reverse split and is in the
best interests of Simione and its stockholders.

BOARD DISCRETION TO IMPLEMENT REVERSE SPLIT

If the reverse split proposal is approved by the Simione stockholders, the
reverse split will be implemented only if the Simione board determines that it
is in the best interests of Simione and its stockholders at any time within one
year following stockholder approval. The determination by the Simione board to
select one of the three exchange ratios and abandon the others or,
alternatively, to reject all of the exchange ratios and not effectuate the
reverse split, will be based upon certain factors including:

- the minimum bid criteria of the Nasdaq National Market (or the Nasdaq
SmallCap Market or any other securities exchange, if applicable),

- the existing and expected marketability and liquidity of the Simione
common stock,

- prevailing market conditions, and

- the likely effect on the market price of the Simione common stock.

The Simione board may, in its sole discretion, determine not to effect the
reverse split. If the reverse split is not effected within one year following
stockholder approval, the reverse split will be abandoned without further action
by the stockholders pursuant to Section 242(c) of the Delaware General
Corporation Law.

REASONS FOR THE REVERSE SPLIT

The Simione board believes that the reverse split is desirable for several
reasons. The reverse split may be necessary for Simione to continue to be listed
on the Nasdaq National Market. Shares of the Simione common stock have been
listed and traded on the Nasdaq National Market since June 1997. On January 6,
2000, Simione received a telephone call from the Nasdaq National Market
expressing its belief that consummation of the MCS merger will require Simione
to submit a new initial listing application and to comply with the initial
listing criteria for the Nasdaq National Market. Simione responded to the Nasdaq
National Market by letter dated January 11, 2000 stating that Simione does not

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<PAGE> 191

believe that the consummation of the Merger should require Simione to comply
with the Nasdaq National Market's initial listing criteria. On January 21, 2000,
Simione received a letter from the Nasdaq National Market confirming its
position that Simione must comply with the Nasdaq National Market's initial
listing criteria and on February 4, 2000 Simione submitted a letter to the
Nasdaq National Market requesting a hearing to appeal this determination. If the
hearings panel does not find in Simione's favor, Simione will be required to
submit an initial listing application.

In general, to meet the Nasdaq National Market's requirements a company
must comply with one of three entry standards relating to its financial
condition, results of operations and trading market for its securities. Simione
is currently unable, and based on the recent trading history of the Simione
common stock may continue to be unable, to meet the minimum bid price
requirement of each applicable entry standard. In addition, Simione does not
meet the net tangible assets and the public float requirements for the Nasdaq
National Market entry standard.

If the Simione common stock is delisted from the Nasdaq National Market,
management of Simione intends to apply for its listing on the Nasdaq SmallCap
Market. Simione is currently unable to meet the minimum bid price requirement of
the entry standards for the SmallCap Market. Simione currently meets all of the
other entry standards for the SmallCap Market.

Simione believes that if the reverse split proposal is approved by the
Simione stockholders and a reverse split is effectuated, the Simione common
stock will likely have a minimum bid price in excess of the $5.00 per share
required for initial listing by the Nasdaq National Market, and in excess of the
$4.00 per share required for initial listing by the Nasdaq SmallCap Market.
Simione cannot assure its stockholders that it will be successful in

- obtaining a favorable result from the Nasdaq National or SmallCap Market
(whether directly or through the appeals process) or

- satisfying the initial listing requirements if the Nasdaq National or
SmallCap Market determines Simione must comply with such requirements.

In addition, the rules of Nasdaq require a company to satisfy at least one
of several alternative maintenance requirements in order to continue to be
listed on the Nasdaq National Market or SmallCap Market. While Simione believes
that it currently satisfies all of the applicable maintenance criteria, it is
possible that Simione will be unable to continue to satisfy these maintenance
criteria in the future.

If the reverse split proposal is not approved by the Simione stockholders,
it is likely, depending on the volatility of the Simione common stock and the
outcome of the appeals process, if any, that Simione will not meet the
requirements for listing on the Nasdaq National Market. The delisting of the
Simione common stock from the Nasdaq National Market could adversely affect the
liquidity of the Simione common stock and the ability of Simione to raise
capital, especially if Simione common stock is not approved for listing on
another exchange. If the Simione common stock is delisted from the Nasdaq
National Market, management may apply for listing on the Nasdaq SmallCap Market
or another securities exchange and the Simione board may effect the reverse
split in order to enable Simione to meet any applicable minimum bid
requirements. If shares of Simione common stock are not approved for listing on
the Nasdaq National Market, Nasdaq SmallCap Market or any other securities
exchange, the shares of Simione common stock would likely

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<PAGE> 192

be quoted in the over-the-counter market on an electronic bulletin board
established for securities or in the "pink sheets." Market interest in the
Simione common stock may decrease because investors would find it more difficult
to obtain accurate quotations for the price of the Simione common stock and the
spread between the bid and ask price of shares of Simione common stock is likely
to be greater. If the Simione common stock is delisted, it could severely limit
the ability of stockholders to trade their Simione common stock in the public
market.

The Simione board also believes that an increased bid price for Simione
common stock resulting from the reverse split may improve the marketability and
liquidity of the Simione common stock by appealing to a broader market and may
encourage interest and trading in the Simione common stock. Brokerage
commissions on low priced stocks generally represent a higher percentage of the
stock price than those of higher priced stock. The current average market price
therefore results in transaction costs that represent a higher percentage of the
total stock price than if the price were higher. In addition, due to the
volatility of low priced stocks, some brokers are reluctant to or will not
recommend that their clients purchase lower priced stocks or will not make a
market in such stocks, and institutional investors may be prohibited from
purchasing such stocks as a matter of policy. These practices may adversely
affect the liquidity of the Simione common stock and the ability of Simione to
raise additional equity capital. The Simione board believes that additional
interest in the Simione common stock by the investment community is desirable
and, if it occurs as a result of a reverse stock split, could result in a more
stable trading market for the Simione common stock. Although the Simione board
believes that the reverse stock split may result in these favorable effects on
the trading market for Simione common stock, there is no assurance that these
effects will be achieved.

Another reason for the reverse stock split is to increase the number of
shares of Simione common stock available for future issuances. Simione's Amended
and Restated Certificate of Incorporation currently authorizes the issuance of
up to 20,000,000 shares of common stock, par value $0.001 per share, and
10,000,000 shares of preferred stock, par value $0.001 per share. As of February
1, 2000, Simione had 8,744,790 shares of common stock issued and outstanding and
2,277,358 shares issuable upon the exercise of outstanding options and warrants
and preferred share and debenture conversions. Accordingly, Simione requires
additional authorized shares of common stock in order to fully reserve for the
exercise of outstanding options and warrants and preferred share and debenture
conversions, as well as to have shares available for future issuances. The
reverse stock split, by decreasing the number of outstanding shares of common
stock and the number of shares of common stock the holders of outstanding
options, warrants and convertible securities are entitled to acquire, will
increase the number of shares available for future issuances to approximately
16.3 million shares (assuming a full one-for-five reverse stock split and
assuming Simione does not change the number of authorized shares of common
stock). As an alternative to this proposal, Proposal 6 provides for an increase
in the authorized common stock to 40,000,000 shares. See "Proposal 6 for Simione
Stockholders -- Amendment to Simione's Certificate of Incorporation to Increase
Simione's Authorized Common Stock" at page 188.

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<PAGE> 193

EFFECTS OF THE REVERSE SPLIT ON THE SIMIONE COMMON STOCK

The principal effect of the reverse split would be to decrease the number
of outstanding shares of Simione common stock. The approximate number of shares
after the reverse split under the three proposed ratios is shown below:

<TABLE>
<CAPTION>
OUTSTANDING SHARES AFTER
OUTSTANDING SHARES MERGER AND REVERSE
RATIO AFTER REVERSE SPLIT SPLIT
- ----- ------------------- ------------------------
<S> <C> <C>
One-for-three............................ 2,914,930 5,398,019
One-for-four............................. 2,186,198 4,048,514
One-for-five............................. 1,748,958 3,238,811
</TABLE>

The precise number of outstanding shares depends upon the number of fractional
shares which will be converted to cash. Simione has not determined this number,
but estimates that less than 10,000 shares of common stock will be converted to
cash.

The effect of a reverse split on the market price for the Simione common
stock cannot be accurately predicted. Specifically, Simione cannot assure that
prices for shares of the Simione common stock following the reverse split will
be proportionately increased by the stock split ratio selected. In addition,
Simione cannot assure that the reverse split will achieve the desired results as
outlined above. Simione cannot assure that the reverse split will not adversely
affect the market price of the Simione common stock, or that any increase in the
price per share that may occur immediately after the proposed reverse split
could be sustained for any prolonged period of time.

Proportionate voting rights and other rights of the holders of Simione
common stock will not be affected by the reverse split (other than as a result
of the payment of cash in lieu of fractional shares as described below). For
example, a holder of 2% of the voting power of the outstanding shares of Simione
common stock immediately prior to the effective time of the reverse split will
continue to hold approximately 2% of the voting power of the outstanding shares
of Simione common stock after the reverse split.

Although the reverse split will not affect the rights of stockholders or
any stockholder's proportionate equity interest in Simione (subject to the
treatment of fractional shares), the number of authorized shares of Simione
common stock will not be reduced. This will increase the ability of the Simione
board to issue such authorized and unissued shares without further stockholder
action. For example, Simione may use authorized but unissued shares as
consideration for acquisitions as part of its business strategy. The number of
stockholders of record will not be affected by the reverse split (except to the
extent that any stockholder holds only a fractional share interest and receives
cash for such interest in connection with the reverse split).

Under Delaware law, Simione may issue additional authorized but unissued
shares of Simione common stock without the need to obtain stockholder approval.
To the extent additional shares are issued in this manner, the percentage
interest of the Simione stockholders and holders of options and warrants
convertible into common stock could be significantly reduced. The effective
increase in the number of authorized but unissued shares of Simione common stock
may be construed as having an antitakeover effect by permitting the issuance of
shares to purchasers who might oppose a hostile takeover bid.

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<PAGE> 194

Simione also has outstanding certain stock options and warrants to purchase
shares of Simione common stock. Under the terms of the outstanding stock options
and warrants, the reverse split will cause:

- a reduction in the number of shares of Simione common stock issuable upon
exercise of the stock options and warrants in proportion to the exchange
ratio of the reverse split, and

- a proportionate increase in the per share exercise price of the stock
options and warrants.

ANTI-TAKEOVER EFFECT

Although not a factor in the board's decision to propose the amendment, the
amendment could have an anti-takeover effect. For example, if Simione were the
subject of a hostile takeover attempt, it could try to impede the takeover by
issuing available shares of common stock, thereby diluting the voting power of
the other outstanding shares and increasing the potential cost of the takeover.
The availability of this defensive strategy to Simione could discourage
unsolicited takeover attempts, thereby limiting the opportunity for Simione's
stockholders to realize a higher price for their shares than is generally
available in the public markets. The board of directors is not aware of any
attempt, or contemplated attempt, to acquire control of Simione, and this
proposal is not being presented with the intent that it be utilized as a type of
anti-takeover device.

IMPLEMENTATION OF REVERSE SPLIT

If the stockholders approve the reverse split proposal, a reverse split
will be effected only upon a determination by the Simione board that a reverse
split is in the best interest of Simione and its stockholders. When making this
determination, the board of directors, in its discretion, will select either the
one-for-three, one-for-four or one-for-five reverse split ratio and the
remaining alternatives will be abandoned by the Simione board pursuant to
Section 242(c) of the Delaware General Corporation Law, without any further
action by the stockholders of Simione. In the alternative, the Simione board may
determine not to effect a reverse split and abandon all alternatives pursuant to
Section 242(c) of the Delaware General Corporation Law, without any further
action by the Simione stockholders.

AMENDMENT EFFECTIVE DATE

The reverse split would become effective at the time of the filing of a
certificate of amendment to the Simione certificate of incorporation with the
Secretary of State of the State of Delaware or at such later time as may be
specified therein. At the amendment effective time, each share of Simione common
stock issued and outstanding immediately prior to the amendment effective time
will be automatically and without any further action on the part of the
stockholders, reclassified into either 1/3, 1/4 or 1/5 of a share of Simione
common stock. For example, if a person held 120 shares of pre-split Simione
common

185
<PAGE> 195

stock prior to the amendment effective time, at the amendment effective time
such person would hold

- 40 shares of post-split Simione common stock if a one-for-three ratio
were selected,

- 30 shares of post-split Simione common stock if a one-for-four ratio were
selected and

- 24 shares of post-split Simione common stock if a one-for-five ratio were
selected.

PAYMENT FOR FRACTIONAL SHARES

No fractional shares of post-split Simione common stock will be issued as a
result of the reverse split. In lieu of any fractional shares, each holder of
pre-split Simione common stock who would otherwise receive a fractional share of
post-split Simione common stock will be entitled to receive cash in an amount
equal to the product obtained by multiplying:

(1) the closing sales price of the Simione common stock on the day
before the date of the amendment effective time as reported on the Nasdaq
National Market (or, if applicable, the Nasdaq SmallCap Market or any
exchange that the Simione common stock may be traded on at the time of the
reverse split) by

(2) the number of shares of pre-split Simione common stock held by the
holder that would otherwise have been exchanged for the fractional share
interest.

EXCHANGE OF STOCK CERTIFICATES

As soon as practicable after the amendment effective time, each holder of
record of pre-split Simione common stock will receive instructions for the
surrender of certificate(s) representing the pre-split shares to an exchange
agent designated by Simione. The instructions will include a form of transmittal
letter to be completed and returned to the exchange agent. Upon proper
completion and execution of the letter of transmittal and return thereof to the
exchange agent, together with the certificate(s) representing the pre-split
Simione common stock into which the surrendered shares have been reclassified, a
stockholder will be entitled to receive a certificate representing the number of
full shares of the post-split Simione common stock along with payment of any
amount to be paid in cash in lieu of any fractional shares. Until surrendered as
contemplated herein, each certificate representing old Simione common stock
shall be deemed at and after the reverse split to represent the corresponding
number of full shares of post-split Simione common stock contemplated by the
preceding sentence as well as the right to receive cash in lieu of fractional
shares.

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<PAGE> 196

FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SPLIT

A summary of the federal income tax consequences of the proposed reverse
split to Simione and to individual stockholders is set forth below. The
following discussion is based upon present federal income tax law. The
discussion is not intended to be, nor should it be relied on as, a comprehensive
analysis of the tax issues arising from or relating to the proposed reverse
split. In addition, Simione has not and will not seek an opinion of counsel or a
ruling from the Internal Revenue Service regarding the federal income tax
consequences of the proposed reverse split. ACCORDINGLY, STOCKHOLDERS ARE
ADVISED TO CONSULT THEIR OWN TAX ADVISORS FOR MORE DETAILED INFORMATION
REGARDING THE EFFECTS OF THE PROPOSED REVERSE SPLIT ON THEM UNDER APPLICABLE
FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX LAWS.

1. Except with respect to any cash received for fractional shares, the
reverse split will be a tax-free recapitalization for Simione and its
stockholders.

2. The shares of post-split Simione common stock in the hands of a
stockholder will have an aggregate basis for computing gain or loss equal
to the aggregate basis of shares of pre-split Simione common stock held by
that stockholder immediately prior to the reverse split, reduced by the
basis allocable to any fractional shares which the stockholder is treated
as having sold for cash (see paragraph 4 below).

3. A stockholder's holding period for the new Simione common stock
will be the same as the holding period of the old Simione common stock
exchanged.

4. Stockholders who receive cash for all of their holdings (as a
result of owning fewer than two, three or four shares, depending on the
chosen ratio) will recognize a gain or loss for federal income tax purposes
as a result of the disposition of their shares of old Simione common stock.
Although the tax consequences to other stockholders who receive cash for
fractional shares are not entirely certain, these stockholders will
probably be treated for federal income tax purposes as having sold their
fractional shares and will recognize gain or loss in an amount equal to the
difference between the cash received and the portion of their basis for the
old Simione common stock allocated to the fractional shares. It is possible
that such Stockholders will recognize gain based on the entire amount of
cash received for fractional shares without offset for an allocable portion
of their tax basis in their shares prior to the exchange. Stockholders who
do not receive any cash for their holdings will not recognize any gain or
loss for federal income tax purposes as a result of the reverse split.

MISCELLANEOUS

The Simione common stock is currently registered under the Exchange Act
and, as a result, Simione is subject to the periodic reporting and other
requirements of the Exchange Act. The reverse split will not affect the
registration of the Simione common stock under the Exchange Act. The par value
of the Simione common stock will not change as a result of the reverse split.
Accordingly, the Simione common stock account on Simione's consolidated balance
sheet will be reduced with the additional paid-in capital account being credited
with the amount by which the Simione common stock account was reduced.

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<PAGE> 197

VOTE REQUIRED

Approval of the reverse split proposal requires the affirmative vote of a
majority of the shares of Simione common stock outstanding as of the record
date. The Simione board has unanimously determined that the reverse split
proposal is advisable and in the best interest of Simione and the stockholders
of Simione.

THE BOARD OF DIRECTORS OF SIMIONE UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE REVERSE SPLIT PROPOSAL.

IN ACCORDANCE WITH DELAWARE GENERAL CORPORATION LAW, NOTWITHSTANDING
STOCKHOLDER APPROVAL OF THE REVERSE SPLIT PROPOSAL, AT ANY TIME PRIOR TO THE
EFFECTIVENESS OF THE REVERSE SPLIT, THE SIMIONE BOARD MAY ABANDON THE REVERSE
SPLIT PROPOSAL WITHOUT FURTHER ACTION BY THE STOCKHOLDERS.

PROPOSAL 6 FOR SIMIONE STOCKHOLDERS -- AMENDMENT TO SIMIONE'S
CERTIFICATE OF INCORPORATION TO INCREASE
SIMIONE'S AUTHORIZED COMMON STOCK

The board of directors of Simione has approved and recommends that the
stockholders of Simione approve a proposal to amend Simione's certificate of
incorporation to increase the number of authorized shares of Simione's common
stock from 20 million shares to 40 million shares if the reverse stock split is
not completed. The board of directors of Simione believes the increase in the
authorized shares is necessary to provide Simione with the flexibility to act in
the future with respect to financing programs, acquisitions and other corporate
purposes without the delay and expense associated with obtaining special
stockholder approval each time an opportunity requiring the issuance of shares
may arise.

OUTSTANDING SHARES

On January 31, 2000, Simione had 8,744,790 shares of common stock issued
and outstanding. Also on that date, Simione had 2,277,356 shares of common stock
subject to outstanding warrants and options under Simione's stock option plans.
If the merger with MCS is approved, Simione will issue approximately an
additional 7,449,266 shares of common stock to MCS' stockholders and Mestek will
receive an option to purchase approximately an additional 1,943,708 shares of
Simione common stock in the event outstanding Simione options, warrants and
other conversion rights are exercised and a warrant to purchase an additional
2,000,000 shares of Simione common stock. The board of directors believes that
the lack of authorized common stock available for issuance would unnecessarily
limit Simione's ability to pursue opportunities for future financings,
acquisitions, mergers and other transactions.

Upon completion of the CareCentric merger, Simione issued approximately 3.0
million shares of Series A Preferred Stock, which will convert on a
share-for-share basis into common stock only upon separate stockholder approval
of such conversion. Simione is separately seeking stockholder approval for this
conversion at the meeting. In addition, Simione is obligated to issue additional
shares of common stock to the former CareCentric stockholders, up to a maximum
of approximately 3.0 million shares, if the average closing price of Simione's
common stock is less than $3.00 during the fourth quarter of 2000.

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<PAGE> 198

RIGHTS OF HOLDERS

The additional shares of common stock to be authorized by adoption of the
amendment to the certificate of incorporation would have rights identical to the
currently outstanding shares of common stock of Simione. Adoption of the
proposed amendment to the certificate of incorporation would not affect the
rights of holders of currently outstanding shares of common stock.

ANTI-TAKEOVER EFFECT

The availability of authorized but unissued shares of common stock might be
deemed to have the effect of preventing or discouraging an attempt by a third
party to obtain control of Simione because the additional shares could be issued
by the board of directors which could dilute the stock ownership of such third
party. Simione has no plans for such issuances and this proposal is not being
proposed in response to a known effort to acquire control of Simione.

DILUTIVE EFFECT

The authorization of additional shares of common stock pursuant to this
proposal will have no dilutive effect upon the proportionate voting power of the
present stockholders of Simione. However, to the extent that shares are
subsequently issued to persons other than the present stockholders and/or in
proportions other than the proportion that presently exists, this issuance could
have a substantial dilutive effect on present stockholders. If this proposal is
approved, the board of directors would be free to issue common stock without
further action on the part of the stockholders, unless approval is otherwise
required by applicable law or The Nasdaq Stock Market or stock exchange rules.

REQUIRED VOTE

Adoption of the amendment to the certificate of incorporation to increase
Simione's authorized common stock requires the vote of a majority of the shares
of common stock outstanding as of the record date. If this proposal is approved
and the reverse stock split proposal is not approved and not implemented,
Simione intends to file an amendment to the certificate of incorporation shortly
after the special meeting. The amendment to the certificate of incorporation
will be effective immediately upon acceptance of filing by the Secretary of the
State of Delaware. If the reverse stock split proposal is approved and
implemented, the Simione board intends to abandon this proposal pursuant to
Section 242(c) of the Delaware General Corporation Law. See "Proposal 5 for
Simione Stockholders -- Reverse Stock Split Proposal" at page 181 for a
discussion of the reverse stock split.

THE BOARD OF DIRECTORS OF SIMIONE RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE AMENDMENT TO SIMIONE'S CERTIFICATE OF INCORPORATION TO INCREASE SIMIONE'S
AUTHORIZED COMMON STOCK.

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<PAGE> 199

PROPOSAL 7 FOR SIMIONE STOCKHOLDERS -- ADJOURNMENT OF MEETING

In the event that Simione does not have sufficient votes for a quorum or to
approve the merger agreement or the other proposals at the special meeting,
Simione intends to adjourn the meeting to permit further solicitation of
proxies. Simione can only use proxies received by Simione at the time of the
special meeting to vote for adjournment, if necessary, by submitting the
question of adjournment to the stockholders as a separate matter for
consideration.

The board of directors of Simione recommends that stockholders vote their
proxies in favor of the adjournment proposal so that their proxies may be used
to vote for an adjournment if necessary. The proxy holders will vote properly
executed proxies in favor of the adjournment proposal unless the proxies
indicate otherwise. If Simione adjourns the special meeting, the only notice we
will give of the time and place of the adjourned meeting will be an announcement
at the special meeting.

THE BOARD OF DIRECTORS OF SIMIONE RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF
THE PROPOSAL TO ADJOURN THE SPECIAL MEETING IF THERE ARE NOT ENOUGH VOTES TO
APPROVE THE MERGER OR THE OTHER PROPOSALS.

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The compensation committee consists entirely of nonemployee directors and
determines the compensation paid to the chief executive officer. The
compensation committee also determines, along with the chief executive officer,
all compensation paid to the other executive officers of Simione. The
compensation committee believes that for Simione to be successful long-term and
for it to increase stockholder value it must be able to hire, retain, adequately
compensate and financially motivate talented and ambitious executives. The
compensation committee attempts to reward executives for both individual
achievement and overall company success.

Executive compensation is made up of three components:

BASE SALARY: An executive's base salary is initially determined by
considering the executive's level of responsibility, prior experience and
compensation history. Published salaries of executives in similar positions at
other companies of comparable size, in sales and/or number of employees, is also
considered in establishing base salary.

i. Cash Bonus: Simione maintains an incentive bonus plan to provide
annual cash bonuses to certain executives. These bonuses are based, in
part, on Simione's financial performance during the previous fiscal year
including data in connection with earnings per share and profitability and
performance as compared to Simione's approved profit plan. In addition,
objective individual measures of performance compared to the individual's
business unit profit performance are considered. A subjective rating of the
executive's personal performance is also considered.

ii. Stock options: The compensation committee believes that the
granting of stock options is directly linked to increased executive
commitment and motivation and to the long-term success of Simione. The
compensation committee thus awards stock options to certain executives. The
compensation committee uses both subjective

190
<PAGE> 200

appraisals of the executive's performance and Simione's performance and
financial success during the previous year to determine option grants.

Mr. R. Bruce Dewey, who became Chief Executive Officer of Simione on
September 9, 1999, is paid an annual base salary of $175,000. Since Mr. Dewey
will devote 25% of his time to his duties as Senior Vice President of Mestek,
25% of this salary will be paid directly by Mestek. Mr. Dewey was granted
150,000 options at an exercise price of $1.75 per share upon his hiring on
September 9, 1999, and Mestek will assign Mr. Dewey options to purchase an
additional 150,000 shares of Simione common stock to be obtained by Mestek in
the MCS merger at an exercise price of $2.00 per share. Mr. Dewey is entitled to
severance equal to 12 months salary plus any applicable bonus in the event he is
terminated without cause and does not return to full-time employment at Mestek.

Mr. Barrett C. O'Donnell, who was Chief Executive Officer of Simione from
June 15, 1998 to September 9, 1999, was entitled to an annual base salary of
$450,000. However, Mr. O'Donnell elected to waive $100,000 of such annual salary
and therefore was compensated based on an annual salary of $350,000 from August
1998 to September 9, 1999. Mr. O'Donnell was not granted any options in 1998 but
was granted 250,000 options under Simione's incentive plan on January 8, 1999.
Mr. O'Donnell does not have an employment agreement with Simione.

Mr. James R. Henderson, who served as Simione's Chief Executive Officer
from April 1997 until June 1998, was paid an annual base salary of $225,000. Mr.
Henderson was not granted any options in 1998.

The compensation committee considered the salaries of other chief executive
officers in the health care information systems industry in establishing the
chief executive officer's salary. In addition, the compensation committee can
consider awarding the chief executive officer cash bonuses and stock option
grants.

It should be noted that:

- exceptions to the general principles stated above are made when the
compensation committee deems them appropriate to stockholder interest;

- the compensation committee regularly considers other forms of
compensation and modifications of its present policies, and will make
changes it deems appropriate; and

- the competitive opportunities to which Simione's executives are exposed
frequently come from private companies or divisions of large companies,
for which published compensation data is often unavailable, with the
result that the compensation committee's information about such
opportunities is often anecdotal.

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<PAGE> 201

Section 162(m) of the Code establishes a limit on the deductibility of
annual compensation for certain executive officers that exceeds $1,000,000 per
year unless certain requirements are met. Simione does not anticipate that any
employee will exceed such $1,000,000 cap in the near future but will make
necessary adjustments if and when this occurs.

Compensation Committee

Murali Anantharaman
James A. Gilbert

STOCKHOLDER RETURN PERFORMANCE GRAPH

The following graph shows a comparison for the past five years of
cumulative total returns for the Simione common stock, the Standard & Poor's
Smallcap 600 Index and the Standard & Poor's Computer (Software and
Services) -- Mid-Cap Index. The comparisons in this table are required by the
SEC and, therefore, are not intended to forecast or be indicative of possible
future performance of the common stock.

<TABLE>
<CAPTION>
SIMIONE CENTRAL COMPUTER (SOFTWARE & S&P SMALLCAP 600
HOLDINGS INC SVC)-MID INDEX
--------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Dec 93 100.00 100.00 100.00
Dec 94 110.00 109.84 95.23
Dec 95 65.00 192.26 123.76
Dec 96 172.48 194.95 150.14
Dec 97 180.00 281.16 188.56
Dec 98 37.50 819.25 186.10
</TABLE>

Total Return assumes reinvestment of dividends

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<PAGE> 202

COMPENSATION SUMMARY

The following table sets forth all compensation paid by Simione for the
years ended December 31, 1998, 1997 and 1996 to each of the individuals who
served as chief executive officer during 1998, the four most highly compensated
other executive officers, and two individuals for whom disclosure would have
been provided but for the fact that such individuals were not serving as
executive officers of Simione at the end of the last fiscal year (together, the
"Named Executive Officers"). The amounts in the All Other Compensation column
represents group life and disability insurance premium payments.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------ NUMBER OF
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) GRANTS(#) ($)
- --------------------------- ---- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell...... 1998 $191,667 -- -- -- --
Chairman of the Board, 1997 144,000 -- -- -- --
Chief Executive Officer 1996 186,533 -- -- 183,962 --
and President(1)
James R. Henderson........ 1998 118,125 -- -- -- $ 1,368
Former President and 1997 225,000 -- -- 100,000 6,872
Chief Executive 1996 225,000(3) -- -- 202,526 --
Officer(2)
William J. Simione, Jr. ... 1998 300,000 -- -- 75,000 4,500
Vice Chairman of the 1997 300,000 -- -- -- 6,134
Board and Executive 1996 300,000(3) -- -- 60,557 --
Vice President
Robert J. Simione......... 1998 225,000 -- -- 41,000 1,653
Senior Vice President of 1997 225,000 -- -- -- 1,443
Consulting 1996 225,000(3) -- -- -- 609(3)
Lori N. Siegel............ 1998 147,500 -- -- 67,500 524
Former Chief 1997 135,000 -- -- -- 3,715
Financial Officer(2) 1996 135,000(3) -- -- 22,661 2,610(3)
Gary M. Bremer............ 1998 248,764 -- $140,113(4) -- 3,000
Former Chairman of the 1997 329,000 -- 45,934(5) -- 29,909(6)
Board(2) 1996 346,335(3) $42,623 -- 183,324 46,492(3,6)
Gary W. Rasmussen......... 1998 155,000 -- -- 50,000 699
Former Chief Operating 1997 200,000 -- -- -- 4,891
Officer(2) 1996 200,000(3) -- -- 24,773 4,444(3)
Erin Dosdourian........... 1998 163,299 -- -- 15,000 399
Former Senior Vice 1997 126,518 -- -- -- 345
Vice President of 1996 62,700 -- -- -- --
Product Management(2)
</TABLE>

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

(1) Mr. O'Donnell became Chairman, Chief Executive Officer and President on June
15, 1998. The amounts listed under "Salary" for 1997 and 1996 represent
amounts paid to O'Donnell Davis, Inc. for consulting services.

193
<PAGE> 203

(2) Mr. Henderson resigned as President and Chief Executive Officer in June
1998, Mr. Bremer resigned as Chairman of the Board in June 1998, Mr.
Rasmussen resigned as Chief Operating Officer in September 1998, Ms.
Dosdourian resigned as Senior Vice President of Product Management in
January 1999, and Ms. Siegel resigned as Chief Financial Officer in April
1999.

(3) Represents the annualized salary and group life insurance and disability
insurance premium payments the executive officer would have received had he
or she joined Simione on January 1, 1996. Messrs. Bremer, Henderson,
Simione, Jr., Simione, Rasmussen, and Ms. Siegel joined Simione on October
8, 1996. The annualized salary and insurance and disability payments set
forth herein for 1996 are based on payments made by Simione from October 8,
1996 until December 31, 1996.

(4) Represents amounts paid pursuant to a severance agreement dated July 22,
1998, as described at "Executive Compensation -- Severance Agreements" on
page 196.

(5) Represents certain car allowance, club membership and insurance expense
reimbursements.

(6) Includes $20,698 and $37,294 of interest imputed to Mr. Bremer in 1997 and
1996, respectively, in connection with a promissory note to Simione for
$900,000 entered into on March 5, 1996 by Mr. Bremer. Simione forgave all
interest, at 5.05% per year, that accrued on the outstanding principal
balance of this promissory note. In July 1997, Mr. Bremer repaid in full the
then outstanding principal balance of $850,000.

194
<PAGE> 204

GRANTS OF STOCK OPTIONS

The following table sets forth certain information with respect to
individual grants of stock options by Simione to the Named Executive Officers
during the year ended December 31, 1998.

The stock options reflected in this table vest as to 33 1/3% of the shares
of common stock covered thereby on the first, second and third anniversary of
the date of grant. The exercise price of all stock options reflected in this
table is equal to the fair market value of the common stock on the date of
grant.

The dollar amounts under the Potential Realizable Value columns represent
the potential realizable value of each grant of option assuming that the market
price of the common stock appreciates in value from the date of grant at the 5%
and 10% annual rates prescribed by the SEC. The dollar amounts are not intended
to forecast possible future appreciation, if any, of the price of the common
stock. The actual value, if any, that an executive officer may ultimately
realize will depend on the excess of the stock price over the exercise price on
the date the stock option is exercised. Therefore, there can be no assurance
that the value realized by an executive officer upon actual exercise of the
stock options granted in 1998 will be at or near the Potential Realizable Value
indicated in the table.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES % OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM
GRANTED EMPLOYEE IN PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ---------- ------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell...... -- -- -- -- --
James R. Henderson........ -- -- -- -- --
William J. Simione,
Jr. .................... 75,000 8.22% $6.75 06/16/08 $ 0 $ 0
Robert J. Simione......... 15,000 1.64% 2.00 11/30/08 18,867 47,812
25,000 2.74% 6.75 06/16/08 0 0
Lori N. Siegel............ 15,000 1.64% 2.00 11/30/08 18,867 47,812
42,500 4.66% 6.75 06/16/08 0 0
Gary M. Bremer............ -- -- -- -- -- --
Gary W. Rasmussen......... 50,000 5.48% 6.75 06/16/08 0 0
Erin Dosdourian........... 15,000 1.64% 6.75 06/16/08 0 0
</TABLE>

OPTION EXERCISES AND HOLDINGS

The following table sets forth information concerning options exercised
during the fiscal year ended December 31, 1998 and the value of unexercised
stock options held at the end of the fiscal year ended December 31, 1998 by each
Named Executive Officer.

195
<PAGE> 205

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

Dollar values of options were calculated by determining the difference
between the fair market value of the underlying securities at December 31, 1998
($1 7/8 per share) and the exercise price of the options.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF IN-THE-MONEY
OPTIONS AT DECEMBER 31, OPTIONS AT DECEMBER 31,
SHARES VALUE 1998(#) 1998 ($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Barrett C. O'Donnell.... 81,600 $153,618 252,581 -- $92,616 --
James R. Henderson...... -- -- 125,843 58,333 0 $0
William J. Simione,
Jr. .................. -- -- 53,217 82,340 0 0
Robert J. Simione....... -- -- 25,690 44,588 0 0
Lori N. Siegel.......... -- -- 15,921 64,870 0 0
Gary M. Bremer.......... -- -- 171,213 -- 0 --
Gary M. Rasmussen....... -- -- 17,433 -- 0 --
Erin Dosdourian......... -- -- 21,834 18,666 0 0
</TABLE>

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

EMPLOYMENT AGREEMENTS

A Simione subsidiary has an employment agreement with Mr. William J.
Simione, Jr., Vice Chairman of the Board and an Executive Vice President of
Simione, which provides for a base salary of $300,000, plus benefits, and a
potential bonus payable at the discretion of the board of directors. The
agreement was signed on January 1, 1996 and has an initial five year term that
can be renewed for additional one year terms unless terminated by either party.
The agreement provides for severance upon a change of control of Simione equal
to three times his average annual compensation for the five year period
preceding the date of the change of control of Simione. The agreement also
contains a non-compete provision prohibiting Mr. Simione from competing with
Simione during the term of the agreement and for an additional three year period
if he is terminated in connection with a change in control.

SEVERANCE AGREEMENTS

Simione entered into a severance agreement with Gary M. Bremer, a former
director and officer of Simione, on July 22, 1998. Mr. Bremer was Chairman of
the Board of Simione from October 1996 until June 1998 and also served as
Simione's Chief Executive Officer from October 1996 until April 1997. Pursuant
to such severance agreement, Mr. Bremer receives, from the period July 1, 1998
until December 10, 2000, severance at an annual rate of $400,000 payable in
semi-monthly installments plus a total payment of $50,000 and reimbursement of
COBRA premiums payable over the same period. Under the severance agreement, Mr.
Bremer retained rights to all his vested Simione options on the date of the
agreement but forfeited any rights to non-vested stock options. The severance
agreement was amended in October and November of 1999 to allow the Company to
defer $89,470.24 of payments due Mr. Bremer through December 31, 1999 until
December 10, 2000 pursuant to a promissory note with an annual interest rate of
9%.

196
<PAGE> 206

OTHER BUSINESS

As of the date of this joint proxy statement/prospectus, management knows
of no other business that will be presented for consideration at the special
meeting. However, if other proper matters are presented at the special meeting,
it is the intention of the proxy holders named in the accompanying proxy to take
such action as shall be in accordance with their judgment on such matters. The
quorum requirement for convening the special meeting is the holders of a
majority of the common stock issued and outstanding and entitled to vote being
present in person or represented by proxy at the special meeting.

SOLICITATION COSTS

Mestek will pay the cost of preparing this joint proxy
statement/prospectus, and Simione and MCS will pay the cost of mailing it to
their respective stockholders and the other costs of the proxy solicitation made
by each company's board of directors. Employees of Simione and MCS may solicit
votes from their company's stockholders. These employees will not receive
additional compensation for soliciting proxies. Simione has hired a proxy
solicitation firm to assist in the distribution of proxy materials and
solicitation of votes. Simione estimates the fees for this firm will not exceed
$10,000. Simione and MCS will reimburse stockbrokers and other custodians,
nominees and fiduciaries for their reasonable out-of-pocket expenses for
forwarding proxy and solicitation material to the owners of common stock.

STOCKHOLDER PROPOSALS AND NOMINATIONS FOR THE 2000 ANNUAL MEETING

A stockholder desiring to submit an otherwise eligible proposal for
inclusion in Simione's proxy statement for the 2000 Annual Meeting of
Stockholders of Simione must deliver the proposal so that it is received by
Simione no later than 120 days before the expected mailing date of that proxy
statement. Simione expects to mail the proxy statement by September 10, 2000.
This would mean that proposals would need to be submitted by May 12, 2000. A
stockholder desiring to submit a proposal for consideration at the 2000 Annual
Meeting of Stockholders but not inclusion in Simione's proxy statement for the
2000 Annual Meeting of Stockholders, must deliver the proposal so that it is
received by Simione no later than July 26, 2000. If these dates change, Simione
will publish the revised dates in Quarterly Report on Form 10-Q for the quarter
ended March 31, 2000. Simione requests that all such proposals be addressed to
George Hare, Senior Vice President and Chief Financial Officer, 6600 Powers
Ferry Road, Atlanta, Georgia 30339 and mailed by certified mail, return receipt
requested.

EXPERTS

The audited consolidated financial statements and schedule of Simione
Central Holdings, Inc. and its subsidiaries included in this joint proxy
statement/prospectus and elsewhere in the Registration Statement of which this
joint proxy statement/prospectus is a part, to the extent and for the periods
indicated in their report, have been audited by Arthur Andersen LLP, independent
public accountants, and are included herein in reliance upon the authority of
said firm as experts in giving said report.

197
<PAGE> 207

The consolidated financial statements of Simione Central Holdings, Inc. and
its subsidiaries at December 31, 1997 and for each of the two years in the
period ended December 31, 1997 appearing in this joint proxy
statement/prospectus have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.

The consolidated financial statements of MCS as of December 31, 1998 and
1997 and for each of the three years in the period ended December 31, 1998
included in this proxy statement have been audited by Grant Thornton, LLP,
independent auditors, as stated in their report appearing herein which expresses
an unqualified opinion.

The financial statements of CareCentric Solutions, Inc. at December 31,
1998 and 1997 and for the two years in the period ended December 31, 1998
appearing in this joint proxy statement/prospectus have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon appearing
elsewhere herein, and are included in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.

CHANGES IN REGISTRANT'S INDEPENDENT PUBLIC ACCOUNTANTS

Effective February 8, 1999, Simione appointed Arthur Andersen LLP as
Simione's independent accountants for the fiscal year ended December 31, 1998
and dismissed Ernst & Young LLP. The decision to change accountants was approved
by the audit committee of the board of directors of Simione acting pursuant to
authority delegated by the board of directors of Simione.

Ernst & Young LLP's reports on Simione's consolidated financial statements
for the years ended December 31, 1997 and 1996 contained no adverse opinion or a
disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles.

During the years ended December 31, 1997 and 1996 and in the subsequent
interim period to February 8, 1999, there were no disagreements between Simione
and Ernst & Young LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Ernst & Young LLP, would
have caused it to make a reference to the subject matter of the disagreements in
connection with its reports.

None of the "reportable events" described in Item 304(a)(1)(v) of
Regulation S-K occurred with respect to Simione during the years ended December
31, 1997 and 1996 or in the subsequent interim period to February 8, 1999.

During the years ended December 31, 1997 and 1996 and subsequent interim
period to February 8, 1999, Simione did not consult with Arthur Andersen LLP
regarding any of the matters or events set forth in Item (304)(a)(2)(i) and (ii)
of Regulation S-K.

Arthur Andersen LLP served as Simione's independent public accountants for
the fiscal year ended December 31, 1998 and is currently serving in such
capacity for the year ending December 31, 1999.

198
<PAGE> 208

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the federal securities laws, Simione's directors and executive
officers, and any persons holding more than 10% of the common stock outstanding,
are required to report their initial ownership of common stock and any
subsequent changes in that ownership to the SEC and The Nasdaq Stock Market.
Specific due dates have been established and Simione is required to disclose in
this joint proxy statement/prospectus any failure to file by these dates during
Simione's most recent fiscal year. To Simione's knowledge, all of these filing
requirements were satisfied, except (1) Mr. O'Donnell filed one Form 5 to report
one late sale and two late option exercises, (2) Mr. Arthur filed one late Form
4 to report five purchases, (3) Mr. Treu filed a Form 5 in lieu of filing a
timely Form 3, (4) Mr. Mitchell filed one late Form 3 and (5) George Hare filed
one late Form 3. In making these disclosures, Simione has relied solely on its
review of copies of the reports that have been submitted to Simione, and
questionnaires completed by each director and executive officer, with respect to
its most recent fiscal year.

WHERE YOU CAN FIND MORE INFORMATION

Each of Mestek and Simione file annual, quarterly and special reports,
proxy statements and other information with the SEC. In addition, MCS has filed
a Form 10 with the SEC. You may read and copy any reports, statements or other
information filed by Mestek, MCS and Simione at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. All
of Mestek's, MCS' and Simione's SEC filings are also available to the public
from commercial document retrieval services and, for filings filed
electronically since 1996, at the Web site maintained by the SEC at
"http://www.sec.gov."

Simione filed a registration statement on Form S-4 to register with the SEC
the Simione common stock to be issued to MCS stockholders in the merger. This
joint proxy statement/prospectus is a part of that registration statement and
constitutes a prospectus of Simione in addition to being a proxy statement of
Simione and MCS for the special meetings. As allowed by SEC rules, this joint
proxy statement/prospectus does not contain all the information you can find in
the registration statement or the exhibits to the registration statement.

You should rely only on the information contained in this joint proxy
statement/ prospectus to vote on the merger and the other proposals to be voted
on at the Simione special meeting. We have not authorized anyone to provide you
with information that is different from what is contained in this proxy
statement. This joint proxy statement/ prospectus is dated February 9, 2000. You
should not assume that the information contained in this joint proxy
statement/prospectus is accurate as of any date other than February 9, 2000, and
neither the mailing of the joint proxy statement/prospectus to stockholders nor
the issuance of Simione common stock in the merger shall create any implication
to the contrary.

199
<PAGE> 209

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SIMIONE CENTRAL HOLDINGS, INC.
Report of Independent Public Accountants.................... F-2
Report of Independent Auditors.............................. F-3
Consolidated Financial Statements
Consolidated Balance Sheets -- December 31, 1998 and 1997
and September 30, 1999 (unaudited)..................... F-4
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997 and 1996 and the nine months
ended September 30, 1999 and 1998 (unaudited).......... F-5
Consolidated Statements of Stockholders' Equity (Deficit)
for the years ended December 31, 1998, 1997 and 1996
and for the nine months ended September 30, 1999
(unaudited)............................................ F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996 and the nine months
ended September 30, 1999 and 1998 (unaudited).......... F-7
Notes to Consolidated Financial Statements................ F-8
Schedule II -- Valuation and Qualifying Accounts............ F-37
MCS, INC.
Report of Independent Certified Public Accountants.......... F-38
Consolidated Financial Statements
Balance Sheets -- December 31, 1998 and 1997 and September
30, 1999 (unaudited)................................... F-39
Statements of Income for the years ended December 31,
1998, 1997 and 1996 and the nine months ended September
30, 1999 and 1998 (unaudited).......................... F-40
Statements of Stockholder's Equity (Deficit) for the years
ended December 31, 1998, 1997 and 1996................. F-41
Statement of Cash Flows for the years ended December 31,
1998, 1997 and 1996 and for the nine months ended
September 30, 1999 and 1998 (unaudited)................ F-42
Notes to Financial Statements............................. F-43
CARECENTRIC SOLUTIONS, INC.
Report of Independent Auditors.............................. F-51
Balance Sheets.............................................. F-52
Statements of Operations.................................... F-53
Statements of Redeemable Convertible Preferred Stock and
Stockholders' Deficit..................................... F-54
Statements of Cash Flows.................................... F-55
Notes to Financial Statements............................... F-56
</TABLE>

F-1
<PAGE> 210

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of Simione Central Holdings, Inc.:

We have audited the accompanying consolidated balance sheet of Simione
Central Holdings, Inc. (a Delaware corporation) and subsidiaries as of December
31, 1998 and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for the year then ended. 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 audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Simione Central Holdings,
Inc. and subsidiaries as of December 31, 1998 and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index of
financial statement schedules 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 audit 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/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP

Atlanta, Georgia
March 12, 1999

F-2
<PAGE> 211

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
of Simione Central Holdings, Inc.:

We have audited the accompanying consolidated balance sheet of Simione
Central Holdings, Inc. as of December 31, 1997 and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
two years in the period ended December 31, 1997. Our audits also include the
information related to the years ended December 31, 1997 and 1996 included in
the financial statement schedule listed in the Index to Financial Statements.
These financial statements and schedule 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. 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Simione Central Holdings, Inc. as of December 31, 1997 and the consolidated
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1997, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information related to the years ended December 31, 1997 and 1996 set forth
therein.

/s/ Ernst & Young

ERNST & YOUNG LLP
Atlanta, Georgia
February 23, 1998

F-3
<PAGE> 212

SIMIONE CENTRAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------- SEPTEMBER 30,
1998 1997 1999
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents...................... $ 10,526,816 $ 8,266,860 $ 1,228,385
Accounts receivable, net of allowance for
doubtful accounts of $1,674,404, $1,915,120
and $3,290,333, respectively................. 7,679,524 9,025,666 5,013,621
Prepaid expenses and other current assets...... 555,770 1,157,168 561,873
------------ ------------ ------------
Total current assets......................... 18,762,110 18,449,694 6,803,879
Purchased software, furniture and equipment,
net.......................................... 1,852,405 2,365,508 1,528,171
Intangible assets, net......................... 7,137,857 7,448,911 18,607,285
Other assets................................... 104,232 655,377 990,499
------------ ------------ ------------
Total assets................................. $ 27,856,604 $ 28,919,490 $ 27,929,834
============ ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit................................. $ 5,000,000 $ 773,599 $ --
Accounts payable............................... 1,627,328 1,876,688 2,910,413
Accrued compensation expense................... 577,964 560,334 358,857
Accrued liabilities............................ 7,231,417 3,174,762 4,315,037
Customer deposits.............................. 1,144,557 1,460,653 931,097
Unearned revenues.............................. 1,870,538 1,527,173 2,183,782
Note payable................................... -- -- 3,000,000
Current portion of capital lease obligations... 9,141 57,622 --
------------ ------------ ------------
Total current liabilities.................... 17,460,945 9,430,831 13,699,186
------------ ------------ ------------
Other liabilities, less current portion........ 2,671,477 -- 2,249,179
------------ ------------ ------------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; 10,000,000
shares authorized; 3,034,530 issued and
outstanding.................................. -- -- 3,035
Common stock, $.001 par value; 20,000,000
shares authorized 8,597,729, 8,522,978 and
8,782,729 shares issued and outstanding at
December 31, 1998 and 1997 and September 30,
1999, respectively........................... 8,598 8,523 8,783
Additional paid-in capital..................... 42,093,040 41,686,109 51,627,680
Accumulated deficit............................ (34,377,456) (22,205,973) (39,658,029)
------------ ------------ ------------
Total stockholders' equity................... 7,724,182 19,488,659 11,981,469
------------ ------------ ------------
Total liabilities and stockholders' equity... $ 27,856,604 $ 28,919,490 $ 27,929,834
============ ============ ============
</TABLE>

See notes to consolidated financial statements

F-4
<PAGE> 213

SIMIONE CENTRAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------ ---------------------------
1998 1997 1996 1999 1998
------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET REVENUES:
Software and
services........... $ 27,522,926 $ 27,355,995 $ 15,307,906 $ 11,331,384 $ 25,563,765
Agency support....... 6,936,363 14,680,310 7,323,540 1,401,633 5,886,094
Consulting
services........... 6,436,846 4,908,965 3,363,195 5,295,147 5,024,076
Columbia settlement
fee................ 750,000 -- -- 2,250,000 --
------------ ------------ ------------ ------------ ------------
Total net
revenues......... 41,646,135 46,945,270 25,994,641 20,278,164 36,473,935
------------ ------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of revenues..... 26,091,299 22,715,095 14,698,177 12,756,167 21,105,442
Selling, general and
administrative..... 13,822,674 12,508,512 7,037,446 8,893,843 11,111,181
Research and
development........ 6,740,829 6,669,500 5,676,898 2,708,121 5,325,918
Amortization and
depreciation....... 2,392,321 1,714,207 784,502 2,410,295 1,777,765
Purchased in-process
research and
development........ -- 8,126,947 12,573,931 -- --
Severance and other
restructuring
charges............ 5,010,976 -- 1,214,669 (1,140,000) 7,172,630
------------ ------------ ------------ ------------ ------------
Total costs and
expenses......... 54,058,099 51,734,261 41,985,623 25,628,426 46,492,936
------------ ------------ ------------ ------------ ------------
Loss from
operations......... (12,411,964) (4,788,991) (15,990,982) (5,350,262) (10,019,001)
OTHER INCOME
(EXPENSE):
Interest expense..... (183,495) (214,508) (114,817) (116,541) (74,626)
Interest and other
income............. 423,976 489,830 206,902 186,230 304,345
------------ ------------ ------------ ------------ ------------
Net loss............. $(12,171,483) $ (4,513,669) $(15,898,897) $ (5,280,573) $ (9,789,282)
============ ============ ============ ============ ============
Net loss per share --
basic.............. $ (1.42) $ (0.63) $ (3.71) $ (0.60) $ (1.14)
============ ============ ============ ============ ============
Weighted average
common
shares -- basic.... 8,556,990 7,164,398 4,287,956 8,740,559 8,543,770
============ ============ ============ ============ ============
Net loss per
share -- diluted... $ (1.42) $ (0.63) $ (3.71) $ (0.60) $ (1.14)
============ ============ ============ ============ ============
Weighted average
common
shares -- diluted... 8,556,990 7,164,398 4,287,956 8,740,559 8,543,770
============ ============ ============ ============ ============
</TABLE>

See notes to consolidated financial statements

F-5
<PAGE> 214

SIMIONE CENTRAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL STOCK
COMMON PREFERRED PAID-IN SUBSCRIPTION ACCUMULATED
SHARES STOCK SHARES STOCK CAPITAL RECEIVABLE DEFICIT
--------- ----------- ---------- ------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996.......... 11 $ 2,443,013 $ -- $ -- $ -- $ -- $ (1,793,407)
Capital contribution from former
parent company................... -- 4,000,000 -- -- -- -- --
Distribution of 2,994,856 shares of
no par common stock and
cancellation of 11 shares of
common stock held by CHHC........ 2,994,845 -- -- -- -- -- --
Issuance of no par Class A common
stock............................ 964,418 3,051,369 -- -- -- (850,000) --
Purchase and cancellation of no par
Class A common stock not
exchanged in reverse
acquisition...................... (918) (9,866) -- -- -- -- --
Exchange of 3,958,356 shares of no
par Class A and B common stock
for 3,958,356 shares of IMHI
$.001 par value common stock..... -- (9,480,558) -- 9,480,558 -- --
Issuance of 1 shares of IMHI $.001
par value common stock for
purchase of IMHI in reverse
acquisition...................... 1,949,269 1,949 -- 13,514,288 -- --
Issuance of $.001 par value common
stock as compensation and from
exercise of stock options and
warrants......................... 44,541 45 -- -- 221,204 -- --
Net loss........................... -- -- -- -- -- -- (15,898,897)
--------- ----------- ---------- ------ ----------- --------- -------------
Balance at December 31, 1996........ 5,952,166 5,952 23,216,050 (850,000) (17,692,304)
Issuance of $.001 par value common
stock from exercise of stock
options and warrants............. 555,259 555 -- -- 548,403 -- --
Issuance of $.001 par value common
stock for purchase Benchmark
Consulting, Inc.................. 15,553 16 -- -- 199,984 -- --
Issuance of $.001 par value common
stock, net of offering costs..... 2,000,000 2,000 -- -- 17,721,672 -- --
Payment of stock subscription...... -- -- -- -- -- 850,000 --
Net loss........................... -- -- -- -- -- -- (4,513,669)
--------- ----------- ---------- ------ ----------- --------- -------------
Balance at December 31, 1997........ 8,522,978 8,523 -- -- 41,686,109 -- (22,205,973)
Issuance of $.001 par value common
stock from exercise of stock
options.......................... 32,432 33 -- -- 110,948 -- --
Issuance of $.001 par value common
stock for purchase Benchmark
Consulting, Inc.................. 42,319 42 -- -- 295,983 -- --
Net loss........................... -- -- -- -- -- -- (12,171,483)
--------- ----------- ---------- ------ ----------- --------- -------------
Balance at December 31, 1998........ 8,597,729 $ 8,598 -- -- $42,093,040 $ -- $(34,377,456)
Issuance of $.001 par value
common stock from exercise of
stock options (unaudited)...... 85,000 85 -- -- 62,815 -- --
Issuance of $.001 par value
common stock related to
acquisitions (unaudited)....... 100,000 100 -- -- 162,400 -- --
Issuance of $.001 par value
preferred stock related to
acquisitions................... -- -- 3,034,530 3,035 9,309,425 -- --
Net loss (unaudited)............. -- -- -- -- -- -- (5,280,573)
--------- ----------- ---------- ------ ----------- --------- -------------
Balance at September 30, 1999
(unaudited)........................ 8,782,729 $ 8,783 3,034,530 $3,035 $51,672,680 -- $(39,658,029)
========= =========== ========== ====== =========== ========= =============

TOTAL
EQUITY
------------
<S> <C>
Balance at January 1, 1996.......... $ 649,606
Capital contribution from former
parent company................... 4,000,000
Distribution of 2,994,856 shares of
no par common stock and
cancellation of 11 shares of
common stock held by CHHC........ --
Issuance of no par Class A common
stock............................ 2,201,369
Purchase and cancellation of no par
Class A common stock not
exchanged in reverse
acquisition...................... (9,866)
Exchange of 3,958,356 shares of no
par Class A and B common stock
for 3,958,356 shares of IMHI
$.001 par value common stock..... --
Issuance of 1 shares of IMHI $.001
par value common stock for
purchase of IMHI in reverse
acquisition...................... 13,516,237
Issuance of $.001 par value common
stock as compensation and from
exercise of stock options and
warrants......................... 221,249
Net loss........................... (15,898,897)
------------
Balance at December 31, 1996........ 4,679,698
Issuance of $.001 par value common
stock from exercise of stock
options and warrants............. 548,958
Issuance of $.001 par value common
stock for purchase Benchmark
Consulting, Inc.................. 200,000
Issuance of $.001 par value common
stock, net of offering costs..... 17,723,672
Payment of stock subscription...... 850,000
Net loss........................... (4,513,669)
------------
Balance at December 31, 1997........ 19,488,659
Issuance of $.001 par value common
stock from exercise of stock
options.......................... 110,981
Issuance of $.001 par value common
stock for purchase Benchmark
Consulting, Inc.................. 296,025
Net loss........................... (12,171,483)
------------
Balance at December 31, 1998........ $ 7,724,182
Issuance of $.001 par value
common stock from exercise of
stock options (unaudited)...... 62,900
Issuance of $.001 par value
common stock related to
acquisitions (unaudited)....... 162,500
Issuance of $.001 par value
preferred stock related to
acquisitions................... 9,312,460
Net loss (unaudited)............. (5,280,573)
------------
Balance at September 30, 1999
(unaudited)........................ $ 11,981,469
============
</TABLE>

See notes to consolidated financial statements
F-6
<PAGE> 215

SIMIONE CENTRAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------ --------------------------
1998 1997 1996 1999 1998
------------ ------------ ------------ ----------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................ $(12,171,483) $ (4,513,669) $(15,898,897) $(5,280,573) $(10,189,282)
Adjustments to reconcile net income (loss) to
net cash (used in) provided by operating
activities:
Purchased in-process research and
development............................... -- 8,126,947 12,573,931 -- --
Provision for doubtful accounts............. 791,335 1,329,563 395,046 2,789,642 636,208
Amortization and depreciation............... 2,392,321 1,714,207 784,502 2,413,423 1,777,765
Write-off of capitalized R&D................ 2,005,790 -- -- -- 36,997
Write-off of excess furniture & fixtures.... 64,279 -- -- -- 2,005,790
Value assigned to stock purchase warrant.... -- -- 100,000 -- --
Stock compensation expense.................. -- -- 58,500 -- --
Loss on sale of assets...................... -- 25,887 3,636 -- --
Changes in assets and liabilities:
Accounts receivable......................... 590,645 (3,919,939) (3,305,003) 428,344 (1,172,435)
Prepaid expenses and other current assets... 582,210 (29,355) (553,630) 67,796 222,164
Other assets................................ (1,478,984) (577,322) (26,925) (899,787) (1,530,015)
Accounts payable............................ (249,359) (1,598,616) 2,264,539 955,429 360,812
Accrued compensation expense................ 17,630 (106,316) 142,867 (228,294) 167,047
Accrued liabilities......................... 3,701,494 (525,519) 768,284 (3,669,443) 5,878,136
Customer deposit............................ (317,096) (218,912) 272,724 (213,460) (530,045)
Unearned revenues........................... 343,365 (1,150,135) 616,518 150,730 259,337
Long term liabilities....................... 2,671,477 -- -- -- --
------------ ------------ ------------ ----------- ------------
Net cash (used in) provided by operating
activities.............................. (1,056,376) (1,443,179) (1,803,908) (3,486,193) (2,077,521)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of acquired companies, net of cash
acquired.................................... (476,238) (9,807,587) (1,249,798) (2,130,577) (405,191)
Purchase of software, furniture and
equipment................................... (495,352) (915,581) (635,997) (236,616) (377,994)
(Increase) decrease in restricted cash....... -- 1,000,000 (1,000,000) -- --
Increase in other intangible assets.......... -- (585,000) (64,123) -- (71,046)
------------ ------------ ------------ ----------- ------------
Net cash used in investing activities..... (971,590) (10,308,168) (2,949,918) (2,367,193) (854,231)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution from former parent
company..................................... -- -- 4,000,000 -- --
Proceeds from repayment of stock
subscription................................ -- 850,000 -- -- --
Proceeds from (payment on) notes payable..... 4,226,401 (1,726,201) 2,499,800 (3,500,000) 4,226,401
Issuance of common stock, net of cash
expenses.................................... -- 17,723,672 2,191,503 -- --
Advances from (payments to) former parent
company..................................... -- -- (1,076,855) -- --
Repayment (issuance) of note receivable from
officer..................................... -- -- 252,075 -- --
Payments on capital lease obligations........ (48,480) (732,778) (45,741) (7,945) (45,293)
Payments of related party notes.............. (980) (30,172) (68,000) -- (980)
Proceeds from exercise of stock options and
warrants.................................... 110,981 548,958 62,749 62,900 109,470
------------ ------------ ------------ ----------- ------------
Net cash (used in) provided by financing
activities.............................. 4,287,922 16,633,479 7,815,531 (3,445,045) 4,289,598
------------ ------------ ------------ ----------- ------------
Net increase (decrease) in cash and cash
equivalents............................. 2,259,956 4,882,132 3,061,705 (9,298,431) 1,357,846
Cash and cash equivalents, beginning of
year........................................ 8,266,860 3,384,728 323,023 10,526,816 8,266,860
------------ ------------ ------------ ----------- ------------
Cash and cash equivalents, end of year....... $ 10,526,816 $ 8,266,860 $ 3,384,728 $ 1,228,385 $ 9,624,706
============ ============ ============ =========== ============
Supplemental disclosure of non-cash investing
and financing activities:
Software, furniture and equipment obtained
through capital lease..................... $ -- $ -- $ 690,490 -- --
============ ============ ============ =========== ============
</TABLE>

See notes to consolidated financial statements

F-7
<PAGE> 216

SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998

(INFORMATION AS OF SEPTEMBER 30, 1999 AND FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1999 AND 1998 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

BACKGROUND: Incorporated in September 1991, as a wholly-owned subsidiary
of Central Health Holding Company, Inc. ("CHHC"), Central Health Management
Services, Inc. ("CHMS") provided information and management support services to
home health care providers. Central Health Services, Inc. ("CHS"), also a
wholly-owned subsidiary of CHHC, provided similar services to home health care
agencies owned by CHHC. On January 1, 1996, CHHC transferred at book value the
assets and employees related to CHS's information services and certain clinical
and financial support services to CHMS. On January 17, 1996, CHHC completed a
pro-rata distribution of the outstanding common stock of CHMS to its
stockholders.

On October 8, 1996, InfoMed Holdings, Inc. ("IMHI") and CHMS merged in a
transaction accounted for as a reverse acquisition for financial reporting
purposes. In connection with the merger, IMHI issued 3,958,356 shares of its
common stock in exchange for all the outstanding common stock of CHMS, and
thereby, the former stockholders of CHMS acquired control of IMHI. As a result,
CHMS is considered the acquiring company; hence, the historical financial
statements of CHMS became the historical financial statements of IMHI and
include the results of operations of IMHI only from the effective acquisition
date. On December 19, 1996, IMHI changed its name to Simione Central Holdings,
Inc. (the "Company").

OVERVIEW: The Company is a leading provider of integrated systems and
services designed to enable home health care providers to more effectively
operate their businesses and compete in a managed care environment. The Company
offers several comprehensive and flexible software solutions, each of which
provide a core platform of software applications and which incorporate selected
specialized modules based on customer demand. These software solutions are
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. The Company also provides comprehensive agency support services
which include administrative, billing and collection, training, reimbursement
and financial management services, among others.

F-8
<PAGE> 217
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MANAGEMENT'S PLAN

The Company has incurred significant losses in each fiscal year since 1994
and declining revenues in 1998. The Company has been challenged by the changes
in the health care industry. During fiscal year 1998, the Company experienced
operating losses of $13,412,000. The fiscal 1998 loss is attributable to a
number of factors:

- cancellation of customer contract with Columbia/HCA which had generated
35%, 48% and 22% of the Company's total revenues for the years ended
1998, 1997 and 1996 respectively.

- decision to eliminate certain legacy development projects

- changes to the government's reimbursement methodology from cost
reimbursement to set prospective payments which affected the Company's
customers.

In response to these losses, the Company has taken the following steps:

- significant change in senior management

- reduce fixed and variable expenditures, including restructuring charges

- improve operating efficiencies

- continue leveraging existing customer base

- continue generating recurring revenue

- capitalize on changing industry dynamics

- expand through acquisitions and strategic alliances

Some steps taken to improve the Company's performance will not provide immediate
results; however, Management believes that the steps taken in fiscal 1998 will
yield long term benefits, creating an organization that is well suited to take
advantage of market opportunities. Management plans to continue to aggressively
market the Company's services, monitor costs and fund development to ensure that
the Company's products continue to incorporate state-of-the-art technologies and
provide customers with value added solutions.

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated.

MANAGEMENT ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of

F-9
<PAGE> 218
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

revenues and expenses during the reporting period. Actual results could differ
from those estimates.

REVENUE RECOGNITION

In 1998, the Company adopted the American Institute of Certified Public
Accountants ("AICPA") Statement of Position 97-2, "Software Revenue
Recognition," ("SOP 97-2"), which supersedes SOP 91-1 and is effective for
transactions entered into for fiscal years beginning after December 31, 1997.
While some principles remain the same, there are several key differences between
the two pronouncements, including accounting for multiple element arrangements.
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)
shipment of the product has occurred; (3) the license fee is fixed and
determinable; (4) collectibility is probable; and (5) remaining obligations
under the license agreement are insignificant. The Company sells and invoices
software licenses and maintenance fees as separate contractual elements. Prices
net of discounts are separately identifiable at the time of sale for each
element. The Company has established vendor specific objective evidence related
to the value of maintenance fees. The Company uses the residual value method to
allocate between software licenses and first year maintenance. The adoption of
SOP 97-2 did not have a material impact on the Company's financial statements.

Revenues are derived from the licensing and sub-licensing of software, the
sale of computer hardware, professional and technical consulting services,
implementation and training services, software maintenance and support services,
outsourcing services, as well as home health care management consulting
services. Outsourcing services are provided under contractual arrangements with
terms typically ranging from three to five years.

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 collectibility 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 percentage of
completion using labor hours or contract milestones. The Company had one such
contract in 1997. Software support or maintenance, allow customers to receive
unspecified enhancements and regulatory data updates in addition to telephone
support. Agency support, software support, other services, and consulting
services revenues are recognized monthly as the related services are performed.

CONCENTRATIONS AND MAJOR CUSTOMERS

The Company sells its systems and services to various companies in the
health care industry. The Company performs ongoing credit evaluations of its
customers' financial condition and, generally, requires no collateral from its
customers. Current operations are
F-10
<PAGE> 219
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

charged with an allowance for doubtful accounts based upon experience and any
unusual circumstances which affect the collectibility of receivables. Amounts
deemed uncollectible are charged against this allowance.

Through October 1996, the Company derived the majority of its revenue from
services provided to its former parent company, see Note 14. See Note 2 for
discussion of the Company's major customer.

The Company is dependent upon certain third party software arrangements as
well as certain contractual arrangements for provision of certain of its
services, see Note 16.

The Company had software revenue representing 7% and 5% of total net
revenue for the year ended December 31, 1998 and the nine months ended September
30, 1999. The Company had hardware revenue representing 5% of total net revenues
for the year ended December 31, 1998 and the nine months ended September 30,
1999.

CASH EQUIVALENTS

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

PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

Purchased software, furniture and equipment is stated at cost. Depreciation
is calculated for financial reporting purposes using the straight-line method
over the estimated useful lives (ranging from 1 to 10 years) of the assets or
lease term, whichever is shorter.

SOFTWARE DEVELOPMENT COSTS

Costs incurred to establish the technological feasibility of computer
software products are research and development expense and are charged to
expense as incurred. The Company capitalizes costs incurred between the point of
establishing technological feasibility and general release when such costs are
material. During 1998, the Company wrote-off approximately $2 million of
capitalized software to reflect the abandonment of certain development projects
(see Note 2). The Company capitalized $616,000 of software development costs for
the year ended December 31, 1997 and $1.4 million in 1998 prior to the decision
to abandon the development project.

INTANGIBLE ASSETS AND LONG-LIVED ASSETS

In 1996, the Company adopted Statement of Financial Accounting "SFAS" No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." SFAS No. 121 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 assets carrying amount. SFAS No. 121 also addresses the
accounting for long-lived assets that are

F-11
<PAGE> 220
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

expected to be disposed of. The adoption of SFAS No. 121 did not have an impact
on the Company's financial statements.

Intangible assets, arising principally from the accounting for acquired
businesses, are amortized using the straight-line method over the estimated
useful lives of the related assets which range from 4 to 11 years. The Company
reviews its long-lived and intangible assets for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. The measurement of possible impairment is based upon determining
whether projected undiscounted future cash flow from the use of the asset is
less than the carrying amount of the asset. As of December 31, 1998, in the
opinion of management, there has been no such impairment.

INCOME TAXES

The Company accounts for income taxes using the 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.

NET LOSS PER SHARE

In 1997, the Company adopted SFAS No. 128, "Earnings Per Share". SFAS No.
128 replaced the calculation of primary and fully diluted earnings per share
with basic and diluted earnings per share. Unlike primary earnings per share,
basic earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. Per share amounts for all
periods have been presented in conformity with SFAS No. 128 requirements.

Net loss per share is computed on the basis of the weighted average number
of common shares outstanding during the period. The 2,994,856 shares of Class A
common stock issued in the reorganization of the Company on January 17, 1996
(see Note 12) have been treated as outstanding since January 1, 1996. Due to the
net loss incurred by the Company in each year, basic and diluted loss per share
do not differ. Common stock equivalents relate to shares potentially issuable
under outstanding options and warrant agreements and are included in the diluted
loss per share calculation if dilutive.

The following table sets forth the computation of basic and diluted net
loss per share:

<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- ------------
<S> <C> <C> <C>
NUMERATOR:
Net loss.............................. $(12,171,483) $(4,513,669) $(15,898,897)
DENOMINATOR:
Denominator for basic and diluted
earnings per share -- weighted-average
shares................................ 8,556,990 7,164,398 4,287,956
Net loss per share -- basic and
diluted............................... $ (1.42) $ (0.63) $ (3.71)
</TABLE>

F-12
<PAGE> 221
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

STOCK BASED COMPENSATION

Stock options are accounted for under Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and related interpretations.
The Company has included in these consolidated financial statements the pro
forma equivalent disclosure information required by SFAS No. 123 "Accounting for
Stock-Based Compensation", see Note 12.

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 payable: The carrying amounts of the Company's notes payable
approximate their fair value.

RECENTLY ADOPTED ACCOUNTING STANDARDS

The Company adopted SFAS No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130") which is effective for the fiscal year ended December 31, 1998. SFAS
No. 130 establishes standards for the reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
For the Company, there is no difference between comprehensive income (loss) and
net income (loss).

The Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131") for the fiscal year ended
December 31, 1998. SFAS No. 131 requires that a public business enterprise
report financial and descriptive information about its reportable operating
segments. Operating segments are components of an enterprise about which
separate financial information is available and used regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. See Note 13 for detailed segment information.

In 1998, the Financial Accounting Standards Board issued SFAS No. 133
("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 is effective for the Company's fiscal year ending
December 31, 2000. The Company's management does not believe that the adoption
of SFAS No. 133 will have a material impact on the Company's position or results
of operations.

RECLASSIFICATIONS

Certain prior years' amounts have been reclassified to conform to the 1998
financial statement presentation.

F-13
<PAGE> 222
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INTERIM UNAUDITED FINANCIAL INFORMATION

The consolidated financial statements as of September 30, 1999 and for the
nine months ended September 30, 1999 and 1998 are unaudited; however, in the
opinion of management, all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of the unaudited consolidated
financial statements for these interim periods have been included. The results
of interim periods are not necessarily indicative of the results to be obtained
for a full year.

2. SEVERANCE, RESTRUCTURING AND OTHER CHARGES

As a result of the change in focus of the Company's business from providing
services to affiliates of CHHC, the Company incurred severance and certain other
restructuring costs totaling $1,215,000 in the fourth quarter of 1996. These
costs primarily relate to severance of seven terminated key employees and costs
to buyout a lease of equipment no longer useful to the Company. As of December
31, 1997 and 1996, payments of $855,000 and $347,000, respectively had been made
against the accrued severance and other restructuring charges.

As a result of the change in the home care business environment resulting
from the interim payment system ("IPS") which lowered the cost per visit
limitations and created restrictions on the amount of cost reimbursement per
Medicare beneficiary, the termination of the Columbia/HCA contracts (which
accounted for 35%, 48% and 22% of the Company's total revenue for the years
ended December 31, 1998, 1997 and 1996, respectively) and the decision to
eliminate certain legacy development projects including the AS400 effort, the
Company incurred severance, restructuring, and certain other costs totaling
$11.6 million in 1998.

Terminated Contracts

Simione had a contractual relationship with IBM to provide services to
Simione's largest customer, Columbia/HCA. When Columbia/HCA elected to cancel
contractual agreements with Simione, Simione in turn canceled related contracts
with IBM to provide services to Columbia/HCA through Simione. Simione's
management executed an exit plan, in accordance with EITF 94-3, that resulted in
the incurrence of incremental termination costs that had no future economic
benefit. As a specific part of the termination of the contract with IBM, Simione
contractually had to pay a termination fee ($800,000) as well as wind down costs
($810,000) in addition to minimum quarterly payment requirements ($2,600,000).
Simione estimated this cost during the third quarter of 1998, but based upon
actual visits during the fourth quarter of 1998, Simione was not required to pay
as large a penalty as originally estimated. Simione recorded this change in
estimate of $150,000 as a reduction to the "severance and other restructuring
charge" line item on the income statement during the fourth quarter of 1998.

F-14
<PAGE> 223
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Excess Capacity

The following is a detailed discussion of the specific components included
within excess capacity. The following table is a detailed summary:

Office Space -- approximately $2,775,000

This amount relates to abandoned office space at the Company's corporate
headquarters in Atlanta. Simione will not benefit from it in the future.
During fiscal year 1998, Simione unsuccessfully searched to sublease
this space. Management estimated that the Company would be unsuccessful
given the following factors: 1) the layout of the abandoned office
space, 2) partial use of the building would be difficult to renovate to
a mixed company building, 3) the current real-estate market, and 4) a
smaller portion of the space had to be rented separately due to a
contractual sublease agreement Simione previously entered. Simione
recorded an accrual for the full amount of these leases from the time of
vacancy until the end of the contractual lease term.

Furniture and Fixtures -- approximately $715,000

This amount relates to certain furniture and fixtures located in the
abandoned office space at the Company's corporate headquarters in
Atlanta. Simione will not benefit from them in the future. Management
estimated that the Company would be unsuccessful in realizing the book
value of these assets. Additionally, the Company would have to pay
certain cancellation fees on operating leases. Management stopped
depreciating these assets and updated the estimates of salvage value.

Of the original additions recorded as part of the restructuring charge
during the third and fourth quarters of 1998, $200,000 was reduced
during the fourth quarter because the amounts were not supportable under
EITF 94-3. The support could not be provided for these assets as well as
the eventual resale value of these fixtures upon sublease or sale.

Legal Fees and Other -- approximately $265,000

This amount primarily relates to expected fees associated with legal
issues as a result of the cancellation of the above agreements. As these
amounts were only expected and no invoices existed, the costs were not
allowable under EITF 94-3. The company recognized this fact and reduced
the accrual by $200,000 during the fourth quarter of 1998.

Severance

Simione planned to terminate 160 employees across all groups of the
organization including senior executives, administrative personnel, shared
service personnel, information systems developers, and consultants. Of these
employees, 153 were terminated as of September 30, 1999. The majority of the
remaining seven employees will be terminated by March 31, 2000. We will pay
these seven employees $37,648 in bonus for remaining employed until certain
critical work effort is completed. If the employees terminate prior to

F-15
<PAGE> 224
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the end of this period they will receive zero bonus. We anticipate these
employees will remain employed until the work is completed. In accordance with
EITF 94-3 no amounts were accrued for the special bonuses for these individuals.

The remaining balance of $0.4 million in the severance accrual as of
September 30, 1999 represents amount due to the previous CEO's severance package
under a multiple-year service agreement and has been classified as a long term
liability. No amount of the accrual related to services performed or obligations
for continued service. The remaining accrual of $0.4 million will be paid as
follows: $0.1 million is for the remainder of 1999 and $0.3 million in 2000.

Columbia/HCA Termination

In December of 1998, Columbia/HCA terminated its contracts with the Company
and paid a settlement fee of $7.0 million. Of this settlement fee, $750,000 was
for services provided in December 1998, $2.3 million for services to be provided
in 1999 and $4 million reduced the restructuring charges incurred in 1998. The
allocation of the settlement between services and restructuring charges is based
upon allocating revenue over the periods in which additional services were
performed. The agreement required Simione to assist Columbia/HCA with the
completion of certain services through the end of March 1999. This required the
maintaining of the Company's service support system and certain staffing levels.
Simione calculated a margin percentage using an estimated allocation of staffing
costs for the two prior years. This margin was then applied to reflect the
reduction of certain staffing positions. To match the revenue to the expenses at
the same ratio, Simione recognized $750,000 per month for January, February, and
March 1999.

Product Related

The product related charge relates solely to the abandonment of the
conversion of the company's legacy product to the AS400 platform. The product
was called Synergy. The full amount of $2.1 million represents the write-off of
amounts originally capitalized by the company under SFAS No 86. These costs
represented amounts capitalized subsequent to the point of establishing
technological feasibility and prior to general release of the product. The
Company's decision to abandon this effort and the related charge was recorded in
accordance with SFAS No. 86. SFAS No. 86 requires an impairment loss be recorded
when impairment indicators are present and the unamortized capitalized costs of
a computer software product exceed the net realizable value of that asset. The
net realizable value is the estimated future gross revenue from that product
reduced by the estimated future costs of completing and disposing of that
product. The Company had no sales of this product, as it was never generally
available to the public.

F-16
<PAGE> 225
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table presents a roll forward of the one time charges
incurred by the Company in 1998. Of these charges, $2.0 million of the product
related component and $0.4 million of the excess capacity component do not have
a cash impact to the Company.

<TABLE>
<CAPTION>
BALANCE BALANCE
DECEMBER 31, DECEMBER 31,
1997 ADDITIONS REDUCTIONS USAGE 1998
------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Terminated
contracts........... -- $ 3,714,597 $(150,000) $(1,315,328) $ 2,249,269
Excess capacity....... -- 3,755,476 (400,000) (401,696) 2,953,780
Severance............. -- 2,090,903 -- (758,307) 1,332,596
Columbia/HCA
termination fee..... -- (4,000,000) -- 4,000,000 --
---------- ----------- --------- ----------- -----------
Total restructuring
costs............ -- $ 5,560,976 $(550,000) $ 1,524,669 $ 6,535,645
========== =========== ========= =========== ===========
Accrued liability less
current portion..... -- (3,864,168)
---------- -----------
Accrued liability,
long term........... $ -- $ 2,671,477
========== ===========
Product related
(included in cost of
revenues)........... $ -- $ 2,005,970 $ -- $(2,005,790) $ --
========== =========== =========== ===========
</TABLE>

The reduction of $1.1 million of excess capacity charges for the nine
months ended September 30, 1999, results from the subleasing of excess space in
the Company's headquarters office in Atlanta. The following table presents a
roll forward of the one time charges incurred by the Company. The majority of
the current portion of remaining restructuring costs are comprised of the IBM
termination costs, which are payable upon demand. The $1.6 million long term
portion of remaining restructuring costs are composed primarily of $1.4 million
of excess office and equipment leases having terms ending after September 2000.

<TABLE>
<CAPTION>
BALANCE BALANCE
DECEMBER 31, SEPTEMBER 30,
1998 ADDITIONS REDUCTIONS USAGE 1999
------------ ----------- ----------- ----------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Terminated
contracts.......... $ 2,249,269 $ -- $ -- $ (245,269) $ 2,004,000
Excess capacity...... 2,953,780 -- (1,140,000) (231,310) 1,582,470
Severance............ 1,332,596 -- -- (939,777) 392,819
----------- -------- ----------- ----------- -----------

Total restructuring
costs........... 6,535,645 $ -- $(1,140,000) $(1,416,356) $ 3,979,289
=========== ======== =========== =========== ===========
Accrued liability
less current
portion......... (3,864,168) (2,377,886)
----------- -----------
Accrued liability,
long term....... $ 2,671,477 $ 1,601,403
=========== ===========
</TABLE>

F-17
<PAGE> 226
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LEASE RECEIVABLES

The Company provides lease financing to certain customers related to sales
of software licenses and computer hardware. Lease terms are generally five
years. Future minimum lease payments under these sales-type leases as of
December 31, 1998, of which the 1999 portion is classified in accounts
receivable, are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1999........................................................ $13,248
2000........................................................ 5,760
Thereafter.................................................. 480
-------
Future minimum lease payments............................... 19,488
Interest portion............................................ (2,273)
-------
Present value of future minimum lease payments.............. $17,215
=======
</TABLE>

4. PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT

Purchased software, furniture and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
Equipment............................................. $ 2,043,108 $ 1,736,907
Purchased software.................................... 1,114,306 949,203
Furniture............................................. 510,185 664,901
Leasehold improvements................................ 166,378 152,472
----------- -----------
3,833,977 3,503,483
Accumulated depreciation.............................. (1,981,572) (1,137,975)
----------- -----------
$ 1,852,405 $ 2,365,508
=========== ===========
</TABLE>

5. INTANGIBLE ASSETS

Intangible assets consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------- AMORTIZATION
1998 1997 PERIOD
----------- ----------- ------------
<S> <C> <C> <C>
Developed technology....................... $ 2,881,041 $ 2,809,995 3-5 years
Goodwill................................... 4,239,200 3,204,179 9-10 years
Trade name................................. 1,142,000 1,142,000 11 years
Other...................................... 1,695,021 1,695,021 6-10 years
----------- -----------
9,957,262 8,851,195
Accumulated amortization................... (2,819,405) (1,402,284)
----------- -----------
$ 7,137,857 $ 7,448,911
=========== ===========
</TABLE>

F-18
<PAGE> 227
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

On June 6, 1997, the Company entered into a Loan and Security Agreement
with a bank. Pursuant to the Agreement, the bank agreed to make available to the
Company a revolving credit facility, the maximum principal amount of which at
any time must be equal to the lessor of $5 million or the "borrowing base" then
in effect. Interest accrues at a variable rate per annum equal to the prime rate
plus 0.25% (8.75% as of December 31, 1997). Under the terms of the Agreement,
the Company granted to the bank a security interest in all accounts receivables,
inventory, equipment, and general intangibles. Additionally, borrowings under
this agreement are secured by the outstanding capital stock of the Company's
subsidiaries. The Company's subsidiaries have also guaranteed the Company's
obligations to the bank under the Agreement. As of December 31, 1997, $774,000
was outstanding and $4,226,000 was available under this agreement.

On May 11, 1998, the Company entered into a new Loan and Security Agreement
with a bank. Pursuant to the Agreement, the bank agreed to make available to the
Company a revolving credit facility, the maximum principal amount of which at
any time must be equal to the lesser of $25 million or the "margin requirement"
then in effect. Interest will accrue at a variable rate per annum equal to the
prime rate for prime borrowings (7.75% as of December 31, 1998) or the LIBOR
Rate plus 1.5%-3.0% per annum (depending on the leverage ratio measured
quarterly) for the LIBOR borrowings (5.54% as of December 31, 1998). Under the
terms of the agreement, the Company granted to the bank a security interest in
all accounts, inventory, equipment, and general intangibles. Additionally, the
Company's subsidiaries have also guaranteed the Company's obligations to the
bank under the Agreement. As of December 31, 1998 there was a balance of $5
million outstanding. The Company terminated this credit facility and has no line
of credit facility currently available for use. The Company repaid all
obligations to the bank in 1999.

The Company has entered into lease agreements with a related party (see
Note 15) for certain office and computer equipment and furniture with
approximate aggregate cost and net book value of $690,000 and $624,000,
respectively, at December 31, 1996. In December 1997, the Company opted for
early termination of these leases and purchased the equipment from the lessor
for $579,000. Additionally, the Company has other equipment under capital leases
with third party lessors with approximate aggregate cost of $29,000 and $139,000
and net book value of $7,000 and $52,000, at December 31, 1998 and 1997,
respectively. Amortization of capital leased assets is included in the Company's
depreciation expense and amounted to approximately $45,000, $283,000 and $84,000
for 1998, 1997 and 1996, respectively.

7. OPERATING LEASES

The Company leases its office facilities and certain furniture and
equipment under various operating lease agreements, some of which are with
related parties (see Note 15). 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. Amounts expensed under operating
leases were approximately $3,048,000, $2,847,000, and $3,699,000 for the years
ended December 31, 1998, 1997, and 1996, respectively.

F-19
<PAGE> 228
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Aggregate annual rental payments for operating leases with noncancelable
lease terms in excess of one year are as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,
- -------------------------
<S> <C>
1999........................................................ $2,562,495
2000........................................................ 2,215,818
2001........................................................ 1,625,536
2002........................................................ 180,986
Thereafter.................................................. 8,226
----------
Total..................................................... $6,593,061
==========
</TABLE>

8. COMMITMENTS AND CONTINGENCIES

On November 1, 1996, Simione Central, Inc. ("SCI"), a wholly-owned
subsidiary of the Company, entered into a series of five year contracts to
provide agency support services to several affiliates of Columbia/HCA Health
Care Corporation ("Columbia/HCA"). As part of the negotiation of these contracts
with SCI, Columbia/HCA required that this subsidiary, formerly a subsidiary of
CHHC, guarantee certain indemnification obligations of the former stockholders
of CHHC, as such indemnification obligations relate to the administration and
potential liabilities to the Central Health Holding Company, Inc. Employee Stock
Ownership Plan ( the "Plan") or its participants. Columbia/HCA became indirectly
responsible for these Plan obligations as a result of its acquisition of the
CHHC stock. As a result of the fact that all former CHHC stockholders are also
stockholders of the Company by virtue of the January 1996 spin-off of the
Company, SCI agreed to undertake this contingent obligation. Under the terms of
this guaranty agreement (the "Guaranty"), SCI agreed to guarantee Columbia/HCA
against losses arising from the following: (i) liabilities relating to the Plan
for losses resulting from a fiduciary breach, prohibited transaction or other
violation of law relating to the Plan and (ii) liabilities relating to the Plan
which are not paid by the former stockholders of CHHC other than the Plan, but
only to the extent such losses are not recovered by Columbia/HCA through other
indemnity provisions of its agreement with the former stockholders of CHHC.
These indemnity provisions include any potential recovery from CHHC's insurance
policies as well as recoveries from escrow accounts established for the benefit
of Columbia/HCA by CHHC's former stockholders. This subsidiary's maximum
liability under the Guaranty is $17,500,000 for claims arising before November
1, 1998, and $15,000,000 for claims arising before November 1, 2000. There is no
liability for any claims arising after November 1, 2000. Further, the aggregate
maximum liability under the Guaranty is $20,000,000. Pursuant to the Guaranty,
the subsidiary agreed that on each date that a guaranteed obligation is required
to be paid to Columbia/HCA, the subsidiary shall grant to Columbia/HCA a
security interest equal to the amount of the guaranteed obligation in all the
subsidiary's accounts receivable. This subsidiary also granted to Columbia/HCA
the right to offset any liability arising under the Guaranty against any
obligation of Columbia/HCA or its affiliates to the subsidiary. At December 31,
1998, no claims had been made under the Guaranty and the Company does not
currently anticipate incurring any loss associated with the Guaranty.
Columbia/HCA sold the home care agencies under

F-20
<PAGE> 229
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

contract with the Company during 1998 and opted for an early termination of the
contracts, due to expire in 2001, with the Company. See Note 2 for settlement
details.

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. The
Company was, however, served on July 17, 1997 with an administrative subpoena
issued by the United States Department of Health and Human Services, Office of
Inspector General. In connection with that subpoena, the Department of Justice
("DOJ") had advised the Company that certain aspects of the Company's past
relationship with affiliates of Columbia/HCA are within the scope of an ongoing
grand jury investigation. However, the DOJ has confirmed to the Company that
neither the Company, nor any of its officers, directors or employees, is a
target in this investigation and, based upon the information known to the DOJ at
this time, neither the Company, nor any of its officers, directors or employees,
is likely to become one. The Company is cooperating fully and does not currently
believe that this inquiry will have any material effect on its overall business
or financial condition.

9. ACQUISITIONS

Effective January 1, 1996, the Company purchased certain assets of Simione
& Simione, CPA's -- Consulting Division (a division of Simione & Simione, CPAs,
a Partnership) ("Simione & Simione") for $2,000,000 in cash. Simione & Simione
provided a wide range of home health care consulting services. This acquisition
was accounted for using the purchase method. The entire purchase price was
allocated to goodwill and is being amortized over 10 years.

On October 8, 1996, IMHI merged with CHMS. IMHI provided a comprehensive
package of software applications for home health care providers marketed under
the name STAT 2. In connection with the acquisition, each issued and outstanding
share of CHMS common stock was converted into and exchanged for the right to
receive .22021 shares of IMHI common stock as of the effective date. As a
result, IMHI issued 3,958,356 shares of common stock to CHMS's stockholders. In
addition, each of the outstanding shares of IMHI Class A Convertible Preferred
Stock was converted into and exchanged for shares of IMHI common stock and all
outstanding options and warrants to purchase CHMS common stock as of the
effective date were converted into the right to purchase shares of IMHI common
stock, provided that the number of shares to be so purchased and the respective
exercise prices thereof have been adjusted by the exchange ratio. The merger was
accounted for as a reverse acquisition under the purchase method of accounting.
As a result, for accounting purposes CHMS was considered as having acquired
IMHI. The historical financial statements of CHMS became the historical
financial statements of IMHI and include the results of operations of both
companies from the effective date. All share amounts have been retroactively
restated giving effect to the .22021 exchange ratio of CHMS shares for IMHI
shares. CHMS had been on a December 31 fiscal year end, and, therefore, the
fiscal year end of IMHI was changed to December 31. Effective December 19, 1996,
IMHI changed its name to Simione Central Holdings, Inc. (the "Company").

F-21
<PAGE> 230
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The purchase price of $16,796,676 consisted of the estimated value assigned
to the outstanding shares, options and warrants of IMHI totaling $13,516,237,
plus $760,000 of acquisition costs and net liabilities assumed of $2,521,000.
The $13,516,237 estimated value of outstanding IMHI shares, options and warrants
consists of $9,746,348 assigned to the value of outstanding shares and
$3,769,889 assigned to the value of outstanding options and warrants assumed in
the transaction. The value of the shares, options and warrants was estimated
based on an independent appraisal of the value of the Company's shares as of the
date the merger agreement was executed.

The purchase price was allocated based on the relative fair values of the
assets acquired and liabilities assumed. Approximately $12,574,000 of the
purchase price was allocated to purchased in-process research and development.
This in-process research and development had not reached technological
feasibility and had no alternative future use, and therefore, was charged to
operations as of the acquisition date. In addition, $4,223,000 of the purchase
price was allocated to certain identifiable intangible assets and is being
amortized over the related assets estimated useful life, as follows:

IMHI -- VALUE ASSIGNED TO ASSETS BALANCE SHEET CATEGORY ACQUIRED

<TABLE>
<S> <C> <C>
Purchased Technology............................. 4 Years $2.1 million
Trade Names...................................... 11 Years 1.1 million
Customer List.................................... 9 Years 0.4 million
Assembled Workforce.............................. 6 Years 0.6 million
------------
$4.2 million
============
</TABLE>

The valuations were determined by the Company using the income approach. A
description of the acquired in-process technology and the estimates of the fair
value of in-process R&D made by the Company for the business combination are set
forth below.

A summary of the four major projects included in In-process R&D are:

- Stat 2 -- Open/GUI: complete redesign of the Stat 2 V3.6 to a Windows
based GUI (Graphical User Interface) architecture including a new
scheduling module for home care visits and creation of interfacing links
for the STATScan and Tel Time projects

- Stat 2 Medical Records -- Open/GUI: migration of the Medical Records
product to a Windows based GUI architecture and allow for pen-based
technology. HL/7 messaging & data management in an integrated environment
with the STATScan project.

- STATScan: a new product feature allowing conversion of Windows-based
imaging of paper forms into digitized data files thereby providing direct
customer management of information without redundant data entry and
reduced data errors at the point of entry.

F-22
<PAGE> 231
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- Tel Time: a new interactive voice response telephone based product
allowing efficient documentation of time of service and mileage
information needed for home medical visit cost reimbursement.

Estimated net cash inflows from the acquired in-process technology related
to IMHI were projected to commence in the year 1997, peak in 1998 and steadily
decline through 2003. The in-process technology was expected to be completed
during fiscal years 1997 and 1998. As of the date of acquisition, it was
estimated that approximately $1 million had been expended to develop these R&D
projects. The estimated cost to complete the projects was approximately $2
million.

The fair value assigned to purchased in-process technology was determined
by estimating the contribution of the purchased in-process technology to
developing commercially viable products and estimating the resulting cash flows
from the expected product sales of such products. In arriving at the cash flows,
a contributory asset charge was applied for the use of working capital, fixed
assets, developed technology and other intangibles. The resulting cash flows
were discounted to their present value using a rate of 23%. The discount rate
was based on an analysis of IMHI's weighted average cost of capital, and venture
capital rates given the risk of the value added assets. There were no material
anticipated changes from historical pricing, margins and expense trends.
Acquired developed technology of approximately $2.1 million was capitalized at
the acquisition date and is being amortized over 3-5 years on a straight-line
basis.

After InfoMed and Simione merged, STAT 2/GUI and the STAT 2 Medical
Records/GUI projects were determined to be similar in customer target with the
Synergy project which was under development at Simione. The competing product
development projects were consolidated and full effort was focused on the
Synergy project. Since the Synergy project was the major project abandoned in
the third quarter 1998 restructuring, the expected benefits of the IMHI projects
have not been realized. The non-GUI versions of the STAT 2 and STAT 2 Medical
Records products are being integrated with CareCentric's SmartClipboard product.
Due to the financial difficulties currently occurring in the home health
industry, revenue forecasts for the combined products are less aggressive than
the original forecasts made in 1996. Due to the importance of the development
projects for STAT, the delay in market entry caused by the abandonment of the
Synergy project in the 1998 restructuring of Simione has significantly added to
Simione's current financial difficulties.

The Tel Time and STATScan projects were completed. However, both of these
projects were significantly less important to revenue generation than the STAT 2
and STAT 2 Medical Records projects. Since Tel Time is used in conjunction with
nurse's visits, the reduction in nurse's visits has further depressed revenue
generation from original expectations. Due to changes in scanning technology
since 1996, the Company has decided to partner with scanning suppliers and
create interfacing software to utilize the STATScan product.

Effective December 1, 1997, the Company purchased substantially all the
assets of Dezine Healthcare Solutions, Inc. ("Dezine"). Dezine provided a
comprehensive package of software applications for home medical equipment
providers. This acquisition was

F-23
<PAGE> 232
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accounted for using the purchase method. The purchase price of approximately
$9,379,000 (including $200,000 of acquisition costs and net liabilities assumed
of $71,000) was paid in cash and allocated based on the relative fair values of
the assets acquired and liabilities assumed. Approximately $8,127,000 of the
purchase price was allocated to purchased in-process research and development.
This in-process research and development had not reached technological
feasibility and had no alternative future use, and therefore, was charged to
operations as of the acquisition date.

In-process research and development for Dezine included two projects at the
time of Simione's purchase of Dezine. In the valuation report on intangible
assets, prepared by independent appraisers, both projects were identified as
critical to Dezine's long-term competitiveness. The independent valuation method
used was a forecast of future revenues and expenses applied in a discounted cash
flow model. The forecast assumptions, technology life cycles and discount rates
used were developed through conversations with management and review of industry
research and industry analyst reports.

- Enterprise 7.0; complete redesign of the import and export interface
features of Dezine's DOS based utilities program to provide standardized
database structure, enhanced security, interaction with pop-up date
fields, standardized function/editing keys and HL7 compatible file
structure.

- Gen2000: Windows-based program with a suite of market driven segments for
home medical equipment management reporting and enterprise solution for
interaction with an integrated healthcare provider having home medical
equipment services.

The Enterprise 7.0 project was an internal test phase at the time of
Simione's acquisition, but Dezine management estimated to have 7 more man-years
of work to be completed before market testing could begin. The data base
management implications of Enterprise 7.0 required interaction with nearly all
features included in the existing medical equipment software products sold by
Dezine. This development complexity was further complicated by the fact that the
DOS based utilities being converted in the project were no longer commercially
supported by the authors of the utilities. The need for internally audited
accuracy in data acquisition and transfer by the post Enterprise 7.0 product
also added a need for significant testing to assure marketability.

The Gen2000 project was a complete rewrite and enhancement of the
functionality of Dezine's existing products. It was estimated that at the time
of the acquisition, Dezine had spent 4 man-years developing the project and had
two man-years of feature-design work remaining. At the time of the acquisition,
it was estimated that 10 man-years of work were needed to complete a marketable
product. The software design requirements of Gen2000 required SQL and Delphi
skills which were just being learned by the developers employed by Dezine.

Enterprise 7.0 and Gen2000 had expected completion dates of the end of 1998
and 1999, respectively. Neither project had completed any market test work at
the time of acquisition.

At the same time as changes in the cost reimbursement rules for home health
care became understood in 1998, the capital available for long-term development
projects within

F-24
<PAGE> 233
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Simione and its subsidiaries was reduced. None of Dezine's pre-acquisition
programs were ever completed. Additionally, Simione's own product development
efforts were using all available programming personnel.

In addition, $1,323,000 of the purchase price was allocated to certain
identifiable intangible assets and will be amortized over the related assets
estimated useful life, as follows:

DEZINE -- VALUE ASSIGNED TO ASSETS BALANCE SHEET CATEGORY ACQUIRED

<TABLE>
<S> <C> <C>
Purchased Technology.............................. 5 Years 0.9 million
Customer List..................................... 10 Years 0.4 million
-----------
1.3 million
===========
</TABLE>

The Company's consolidated statement of operations for the period ended December
31, 1997 includes the operating results of Dezine for the period December 1,
1997 (the effective date of the Dezine acquisition) to December 31, 1997.

Pro forma information (unaudited) giving effect to the acquisitions as if
they took place on January 1, of each year, is as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Net revenues...................................... $ 53,397,919 $ 42,239,681
Net income (loss)................................. 3,657,552 (23,829,188)
Net income (loss) per share -- basic.............. $ 0.51 $ (4.15)
Net income (loss) per share -- diluted............ $ 0.44 $ (4.15)
</TABLE>

The 1996 pro forma net loss includes the $8,127,000 charged to operations
for the in-process research and development purchased in the Dezine transaction.
This pro forma information does not purport to be indicative of the results that
actually would have occurred if the acquisitions had been effective on January
1, 1997 and 1996 or which may be obtained in the future.

Effective March 26, 1999, the Company purchased substantially all the
assets of Tropical Software Services ("Tropical"), a Windows based Home Medical
Equipment (HME) Management System. The acquisition was accounted for using the
purchase method for financial reporting purposes. The purchase price was
comprised of $1.8 million in cash and $0.2 million in Simione stock (valued at
the average trading value for a reasonable period of time before and after the
announcement of the purchase). The purchase price of approximately $1,963,000
has been allocated to the assets acquired and liabilities assumed including
$1,951,000 of purchased technology. Purchased technology is being amortized over
an estimated three years useful life.

F-25
<PAGE> 234
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES

The Company has not incurred or paid any income taxes since its inception.

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>
DECEMBER 31,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
DEFERRED TAX ASSETS:
Net operating loss.................................... $ 4,040,000 $ 1,760,000
Purchased intangible assets........................... 2,880,000 3,090,000
Severance and other restructuring charges............. 2,690,000 --
Allowance for doubtful accounts....................... 630,000 620,000
Other................................................. 370,000 520,000
----------- -----------
Total deferred tax assets........................... 10,610,000 5,990,000
DEFERRED TAX LIABILITIES:
Purchased intangible assets........................... (1,480,000) (1,480,000)
Depreciation.......................................... (330,000) (150,000)
Total deferred tax liabilities...................... (1,810,000 (1,630,000)
----------- -----------
Net deferred tax assets............................... 8,800,000 4,360,000
Valuation allowance................................... (8,800,000) (4,360,000)
----------- -----------
$ -- $ --
=========== ===========
</TABLE>

The Company has approximately $10.6 million of net operating losses for
income tax purposes available to offset future taxable income. Such losses
expire beginning in 2010 and may be subject to certain limitations for prior
changes in ownership. A valuation allowance reducing the net deferred tax assets
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, 1998.

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>
YEARS ENDED DECEMBER 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Federal tax benefit computed at statutory
rates................................... $(4,140,000) $(1,530,000) $(5,400,000)
State income taxes, net of Federal
effect.................................. (490,000) (180,000) (640,000)
Other, net................................ 190,000 (650,000) 4,800,000
Change in valuation allowance............. 4,440,000 2,360,000 1,240,000
----------- ----------- -----------
Income tax expense........................ $ -- $ -- $ --
=========== =========== ===========
</TABLE>

Prior to 1996, the Company's taxable loss was included in the consolidated
tax return of its former parent company. The former parent company utilized net
operating losses

F-26
<PAGE> 235
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

generated by the Company and did not allocate any benefit from use of the net
operating losses to the Company.

11. EMPLOYEE BENEFIT PLANS

CHHC sponsored the Central Health Holding Company, Inc. Employee Stock
Ownership Plan (the "Plan"), which covered substantially all full-time employees
of CHHC and its wholly-owned subsidiaries and was funded by cash contributions
from CHHC and its wholly-owned subsidiaries. The major asset of the Plan was
shares of CHHC common stock acquired by the Plan. In connection with the pro
rata distribution of the common stock of CHMS (see Note 1), the Plan received
shares of the Company's common stock. All of the Plan's assets are allocated to
each eligible employee's account and are held in trust until the employee's
termination, retirement, total disability or death. In connection with the sale
of CHHC to Columbia/HCA, the Plan was converted from an employee stock ownership
plan to the Simione Central Holdings, Inc. Profit Sharing Plan Trust, and the
sponsorship of the Plan was transferred from CHHC to the Company. All expenses
are funded by the plan.

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 $171,000 $94,000 and $54,000 in 1998, 1997 and 1996,
respectively.

12. STOCKHOLDERS' EQUITY

CHMS was a separate legal entity and a wholly-owned subsidiary of CHHC as
of December 31, 1995. On January 6, 1996, CHMS formed CHMS Transitory Corp.
("Transitory Corp."). Transitory Corp. issued 2,994,856 shares of Class A Common
Stock and one share of Class B Common Stock, all of which were held by CHMS. On
January 16, 1996, CHMS and Transitory Corp. merged with Transitory Corp. as the
survivor. The 11 shares of CHMS Common Stock held by CHHC were canceled and CHHC
received the Class A and Class B Common Stock of Transitory Corp. Immediately
subsequent to the merger, Transitory Corp. amended it articles of incorporation
and changed its name to Central Health Management Services, Inc. On January 17,
1996, CHHC completed a pro-rata distribution to its stockholders of all the
outstanding capital stock of CHMS. The distribution was accomplished through the
issuance of 3.411 Class A shares of CHMS common stock for each share of CHHC's
common stock held by the respective stockholder.

On January 17, 1996, CHHC made a $4,000,000 cash capital contribution to
CHMS. On March 5 and 22, 1996, employees of CHMS purchased 964,418 shares of
Class A Common Stock for aggregate consideration of $3,051,369. These shares
were purchased 964,418 shares of Class A Common Stock for aggregate
consideration of $3,051,369. These shares were purchased under the terms of a
stock subscription agreement whereby 10% was due at the date of purchase and the
remainder was due on December 5, 1996. Stock subscription receivable of $850,000
reported as a reduction to common stock represents the amount not yet collected
as of December 31, 1996. During 1997, this amount was paid in full by the major
stockholder and executive officer of the Company.
F-27
<PAGE> 236
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Holders of approximately 4.2 million shares of common stock and warrants
and options to purchase 1.4 million shares of common stock have certain demand
or piggyback registration rights, subject to certain conditions and limitations,
which entitle the holders to require the Company to register all or part of
their shares for public resale.

On July 1, 1997, a Registration Statement, filed by the Company with the
Securities and Exchange Commission on Form S-1, became effective. In conjunction
with the effectiveness of the Registration Statement, the Company effected a
one-for-two reverse stock split of the Company's outstanding common stock. The
Company sold 2,000,000 (post-reverse split) shares of its common stock for
$10.00 per share and received approximately $17.7 million in net proceeds. A
stockholder also sold 1,220,000(post-reverse split) shares for $10.00 per share.
The Company did not receive any of the proceeds from the sale of shares by the
selling stockholder.

All share and per share amounts included in these consolidated financial
statements have been restated to reflect the reverse stock split.

As of December 31, 1998, the Company has reserved 2,839,000 shares of
common stock for future issuance upon the exercise of warrants and options to
purchase common stock.

STOCK OPTIONS

The Company has established several stock option plans, under which the
Company is authorized to grant options to purchase an aggregate of 1,903,504
shares of common stock. Options granted under these plans must have an exercise
price not less than the fair market value at the date of grant. In addition to
options granted under these plans, the Company has granted non-plan options to
certain related parties. Such non-plan options were granted with exercise prices
equal to fair market value on the date of grant.

F-28
<PAGE> 237
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company had no stock option activity prior to 1996. A summary of the
Company's stock option activity for 1996, 1997 and 1998 follows:

<TABLE>
<CAPTION>
WEIGHTED
NUMBER AVERAGE
OF EXERCISE
OPTIONS PRICE
--------- --------
<S> <C> <C>
Granted in 1996............................................ 751,260 $ 6.08
Assumed in IMHI purchase................................... 722,174 $ 2.90
Exercised.................................................. (26,748) $ 1.04
Forfeited.................................................. (40,049) $ 5.00
--------- ------
Outstanding at December 31, 1996........................... 1,406,637 $ 4.58
Granted.................................................... 339,300 $10.88
Exercised.................................................. (179,266) $ 1.21
Forfeited.................................................. (408) $ 2.20
--------- ------
Outstanding at December 31, 1997........................... 1,566,263 $ 6.36
Granted.................................................... 742,000 $ 5.91
Exercised.................................................. (32,432) $ 3.69
Forfeited.................................................. (391,204) $ 8.46
--------- ------
Outstanding at December 31, 1998........................... 1,884,627 $ 5.77
========= ======
</TABLE>

The following table summarizes information about options outstanding at
December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------------
WEIGHTED OPTIONS EXERCISABLE
AVERAGE ----------------------
REMAINING WEIGHTED WEIGHTED
CONTRACTUAL AVERAGE AVERAGE
NUMBER LIFE EXERCISE NUMBER EXERCISE
RANGE OF EXERCISE PRICES OUTSTANDING IN YEARS PRICE EXERCISABLE PRICE
- ------------------------ ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$0.74 - $2.26.............. 409,219 6.5 $ 1.73 249,219 $ 1.68
$3.00 - $5.26.............. 470,322 6.6 3.72 444,449 3.65
$6.25 - $10.50............. 895,582 8.1 8.02 349,835 8.48
$11.13 - $14.00............. 109,504 7.8 11.27 45,278 11.42
--------- ---------
1,884,627 7.4 5.77 1,088,781 5.06
========= =========
</TABLE>

Pro forma information regarding net loss and net loss per share is required
by SFAS No. 123 as if the Company had accounted for employee stock option grants
under the fair value method of SFAS No. 123. The fair value for options was
estimated at the date of grant using the Black-Scholes options pricing model
with the following weighted-average assumptions for 1998: risk-free interest
rates of 5.95%; no dividends; a volatility factor of the expected market price
of the Company's common stock of 1.5427; and a weighted-average expected life of
the options of 3.48 years; for 1997: risk-free interest rates of 6.232%; no
dividends; a volatility factor of the expected market price of the Company's
common stock of 0.856; and a weighted-average expected life of the options of 5
years; for

F-29
<PAGE> 238
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1996: risk-free interest rates of 6%; no dividends; a volatility factor of the
expected market price of the Company's common stock of 0.6; and a
weighted-average expected life of the options of 3.5 years. In addition, options
assumed in the purchase of IMHI have been included in the fair value estimates
as if the options assumed were granted by the Company on the purchase date and
using an assumed exercise price of the value of IMHI shares issued in the
acquisition. The weighted average fair value of options granted during 1998,
1997 and 1996 was $0.90, $7.74 and $1.80, respectively.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

For the purposes of pro forma disclosures, the estimated fair value of the
stock options is amortized to expense over the options' vesting periods. The
Company's pro forma net loss and net loss per share (basic and diluted) are
$14,117,771 and $1.65, respectively for 1998, $5,268,821 and $0.74, respectively
for 1997 and $17,492,350 and $4.08, respectively for 1996.

STOCK PURCHASE WARRANTS

At December 31, 1998, the Company had outstanding warrants to purchase
shares of the Company's common stock as follows:

<TABLE>
<CAPTION>
EXERCISE
COMMON SHARES PRICE EXPIRATION DATE
- ------------- -------- -----------------
<S> <C> <C> <C>
125,000................. $ 1.00 February 24, 2005
51,679................. $ 6.22 October 8, 1999
10,000................. $11.26 May 27, 2000
- --------
186,679
========
</TABLE>

All outstanding warrants are exercisable.

During 1996, the Company issued, and the holder exercised, a warrant for
the purchase of 11,010 shares of common stock at $3.16 per share. During 1997,
warrants were exercised for 375,000 shares of common stock at $1.00 per share.

13. SEGMENT RESULTS

The Company has two reportable segments: product related and consulting.
The Company's product related segment sells comprehensive and flexible software
solutions and services to enable home health care providers to more effectively
operate their businesses and compete in the managed care environment. The
consulting segment assists home

F-30
<PAGE> 239
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

health care providers in addressing the challenges of a reducing costs,
maintaining quality, streamlining operations and re-engineering organizational
structures.

The Company evaluates performance and allocates resources based on profit
or loss from operations before income taxes, not including gains and losses on
the Company's investment portfolio. The accounting policies of the reportable
segments are the same as those describe in the summary of significant accounting
policies (Note 1). The revenues, operating losses and assets of the Company by
business segment are as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
--------------------------
1999 1998 1998 1997 1996
------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenues
Product related........... $ 14,983,000 $31,450,000 $ 35,209,000 $42,036,000 $ 22,632,000
Consulting................ 5,295,000 5,024,000 6,437,000 4,909,000 3,363,000
------------ ----------- ------------ ----------- ------------
Total................. $ 20,278,000 $36,474,000 $ 41,646,000 $46,945,000 $ 25,995,000
============ =========== ============ =========== ============
Cost of sales
Product related........... 8,732,000 $17,055,000 $ 20,646,000 $18,184,000 $ 11,371,000
Consulting................ 4,024,000 4,050,000 5,445,000 4,531,000 3,327,000
Total................. $ 12,756,000 $21,105,000 $ 26,091,000 $22,715,000 $ 14,698,000
============ =========== ============ =========== ============
Research and development
Product related........... $ 2,708,000 $ 5,326,000 $ 6,741,000 $ 6,670,000 $ 5,677,000
Depreciation and
amortization
Product related........... 1,964,000 $ 1,433,000 $ 1,914,000 $ 1,174,000 $ 635,000
Consulting................ 289,000 284,000 394,000 430,000 150,000
Unallocated amounts
Corporate overhead...... 157,000 60,000 84,000 110,000 --
------------ ----------- ------------ ----------- ------------
Total................. $ 2,410,000 $ 1,777,000 $ 2,392,000 $ 1,714,000 $ 785,000
============ =========== ============ =========== ============
Purchased R&D
Product related........... $ -- $ -- $ -- $ 8,127,000 $ 12,574,000
Consulting................ -- -- -- -- --
Unallocated amounts
Corporate overhead...... -- -- -- -- --
------------ ----------- ------------ ----------- ------------
Total................. $ -- $ -- $ -- $ 8,127,000 $ 12,574,000
============ =========== ============ =========== ============
Restructure expenses
Product related........... $ (1,140,000) $ 7,573,000 $ 5,011,000 $ -- $ 1,215,000
Consulting................ -- -- -- -- --
Unallocated amounts
Corporate overhead...... -- -- -- -- --
------------ ----------- ------------ ----------- ------------
Total................. $ (1,140,000) $ 7,573,000 $ 5,011,000 $ -- $ 1,215,000
============ =========== ============ =========== ============
Operating Loss
Product related........... $ (8,537,000) $ (460,000) $(16,027,000) $ (460,000) $(16,027,000)
Consulting................ 484,000 (126,000) 36,000 (126,000) 36,000
</TABLE>

F-31
<PAGE> 240
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
--------------------------
1999 1998 1998 1997 1996
------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Unallocated amounts
Corporate overhead...... (4,358,000) (4,203,000) -- (4,203,000) --
Interest income/
Expense -- net........ 240,000 275,000 92,000 275,000 92,000
------------ ----------- ------------ ----------- ------------
Total................. $(12,171,000) $(4,514,000) $(15,899,000) $(4,514,000) $(15,899,000)
============ =========== ============ =========== ============
Assets
Product related........... $ 11,894,000 $17,188,000 $ 16,118,000 $17,188,000 $ 16,118,000
Consulting................ 4,713,000 3,874,000 2,658,000 3,874,000 2,658,000
Unallocated corporate
assets net of
eliminations............ 11,250,000 7,857,000 -- 7,857,000 --
------------ ----------- ------------ ----------- ------------
Total................. $ 27,857,000 $28,919,000 $ 18,776,000 $28,919,000 $ 18,776,000
============ =========== ============ =========== ============
</TABLE>

14. TRANSACTIONS WITH FORMER PARENT COMPANY

The Company derived revenue from charges for the services provided to the
home health care agencies owned by CHHC. The charges were recorded, for purposes
of these consolidated financial statements, in an amount equal to the cost of
the services being provided and therefore generated no operating profit.
Revenues of $12,051,000 were recognized in 1996. In addition, CHHC charged the
Company a management fee for the services provided related to legal and
executive. CHHC's charges included direct costs identified and allocations of
shared costs based on statistical and operational data such as square footage,
hours, and direct operating costs. In the opinion of management, the method of
allocation is reasonable. A management fee in the amount of $432,000 was
incurred in 1996. These arrangements terminated effective October 31, 1996.

15. RELATED PARTY TRANSACTIONS

Gateway LLC, a company owned in part by the Chief Executive Officer and
another officer of the Company, leases an office facility to the Company under
the terms of an agreement, which expires December 31, 2001. Rent expense and
related operating expenses paid to Gateway LLC by the Company were $266,000,
$356,000 and $82,000 in 1998, 1997 and 1996, respectively. Gateway LLC sold the
lease to a third party in August of 1998.

A major stockholder and executive officer along with certain other
executive officers of the Company are stockholders of National Leasing, Inc.
("National"). During 1997 and 1996, the Company entered into various three-year
capital leases with National. In December 1997, the Company opted for early
termination of all the outstanding capital leases with National and purchased
the equipment under lease for approximately $579,000. Payments, excluding the
purchase, to National under these lease agreements totaled $260,000 and $70,000
in 1997 and 1996, respectively.

F-32
<PAGE> 241
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A stockholder of the Company owns a Company which leased computer equipment
to the Company during 1996 under an operating lease which expired in December
1996. Total payments in 1996 related to this lease were approximately $497,000.

A stockholder and executive officer of the Company is a partner in an
entity that leases an office facility to the Company under an operating lease
that expires in December, 2002. Rent expense and related operating expenses paid
to this entity were $130,000, $130,000 and $112,000 in 1998, 1997 and 1996,
respectively. Future annual rental payments under this lease are approximately
$136,000 per year for 1999 through 2002.

The Company has consulting agreements with two entities in which certain
directors of the Company have ownership interests. Aggregate monthly consulting
fees paid to these two entities approximate $20,000 through July, 1998 and
$5,000 thereafter. The fees totaled $149,000, $205,000 and $59,000 in 1998, 1997
and 1996, respectively.

16. LICENSE AGREEMENTS

Certain software applications of the Company's NAHC IS software solution
incorporates software licensed from a third party. Under this license agreement,
the Company is obligated to pay royalties based on the volume of transactions
processed by the Company. Royalty rates per transaction vary based on the volume
of transactions processed and totaled $77,000, $255,000 and $117,000 in 1998,
1997 and 1996, respectively.

Another license agreement obligates the Company to pay royalties based on a
percentage of net collected revenues from sales of certain covered systems.
Royalty expense under this agreement totaled $113,000, $161,000 and $500,000 in
1998, 1997 and 1996, respectively.

The Company obtains data processing and network communication services
under an agreement with IBM Global Services ("IBM"). The agreement with IBM
expires December 31, 2005, and requires the Company to pay fees based on the
volume of transactions processed. This agreement was canceled during 1998
effective January 31, 1999. Termination and wind down costs are included in the
restructuring charges for 1998. (see Note 2)

17. SUBSEQUENT EVENTS (UNAUDITED)

Effective August 3, 1999, the Company purchased a product called Outcomes
Planner(TM), a clinical documentation package that meets both OASIS and ORYX
requirements. The Outcomes Planner(TM) system is a clinical pathway and care
plan solution that defines and measures outcomes on each visit or patient
encounter as it relates to Disease State and episode of care. The Company is
integrating the content of Outcomes Planner(TM) into its other products to
enhance the products' ability to manage patient outcomes and meet the regulatory
reporting requirements of the Company's customers. The $150,000 purchase price
of Outcomes Planner(TM) was capitalized as purchased technology and will be
amortized over an estimated three year useful life.

F-33
<PAGE> 242
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CareCentric Merger

Effective on August 12, 1999 the Company acquired 100% of the common stock
of CareCentric Solutions, an emerging provider of point-of-care systems in the
home health care information systems marketplace, for approximately 3.0 million
shares of newly issued preferred stock of the Company. Non-cash consideration
consisted of 3,034,521 shares of Simione Series A Preferred Stock valued at
$2.58. The guaranteed value of $3.00 per common share of Simione stock after the
fourth quarter of 2000 has been discounted to the purchase date (considering an
incremental borrowing rate of 10%.) The discounted value as of the acquisition
is $2.58 per share and coincides with the average fair market value of Simione
common stock as traded just prior to the announcement of the acquisition.
Simione's stock value has not exceeded this floor subsequent to the announcement
of the merger. If Simione common stock does not meet the guaranteed value,
Simione will issue up to an additional 3,034,521 shares of common stock to these
stockholders. No additional intangible assets will be recorded in the future as
the purchase price remains the guaranteed value per share. The only future
financial statement impact could be a reclassification between common stock and
additional paid-in-capital for the additional shares issued.

<TABLE>
<CAPTION>
CARE-
CENTRIC
MERGER
----------
<S> <C>
PURCHASE PRICE:
Simione Series A Preferred Stock............................ 3,034,521
Guaranteed value per share.................................. $ 2.58
----------
Total value of stock........................................ $7,813,892
Cash........................................................ 218,000
Net liabilities assumed..................................... 1,060,513
==========
Total purchase price $9,092,405
==========
Guaranteed value per share at December 31, 2000............. $ 3.00
Guaranteed value per share at acquisition date.............. $ 2.58
</TABLE>

All warrants for CareCentric stock were canceled as a result of the merger
with Simione.

Only options held by employees who remained with Simione after the merger
were converted from CareCentric options to Simione options. The conversion of
the options was made such that no vesting or expiration terms changed from the
terms included in the origin CareCentric options. The numbers and strike price
of the options were converted using the same stock ratio and valuation used for
the common stock holders of CareCentric at the date of the merger. As a result,
600,000 CareCentric employee options at a strike price of $0.50 converted into
20,400 Simione options at a strike price of $14.71. Accordingly, all options
exercise prices are significantly above Simione's current market stock price.

The merger was accounted for as a purchase in accordance with accounting
Principles Board Opinion No. 16, "Business Combinations." Intangible assets of
approximately $9.8

F-34
<PAGE> 243
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

million acquired have been allocated to specific identifiable elements and
related useful lives determined based upon an assessment by an independent third
party valuation services company. The identifiable intangible assets are
comprised of developed technology and goodwill, which have estimated useful
lives of 7 years. The table below is a summary of the estimated amounts
allocated to the long-lived assets acquired:

CARECENTRIC -- VALUE ASSIGNED TO ASSETS BALANCE SHEET CATEGORY ACQUIRED

MCS Merger

On May 26, 1999, the Company entered into a definitive agreement to merge
with MCS, Inc., a wholly owned subsidiary of Mestek. For every share of
outstanding Mestek common stock, the Company agreed to issue approximately .85
shares of its common stock to Mestek in the exchange. MCS is a leading provider
of information systems and services to the home health care industry with
approximately $14.9 million in revenues from continuing operations and $1.4
million in net income in 1998. MCS markets its product under the MestaMed name.
As of September 30, 1999, MCS had approximately 570 active customers.

In September 1999, the Board of Directors of Mestek resolved to distribute
all of the capital stock of MCS to the Mestek stockholders, on a pro rata basis,
prior to the Merger of MCS into the Company. Also in September 1999, the Board
of Directors of Mestek resolved to invest $3.0 million into the Company in the
form of a loan note. Under the terms of the note, Mestek is a subordinate
creditor to the bank holding the commercial line of credit. The terms of the
note also provide for interest accrual at prime plus 2.0% per annum. If the
merger is completed, the interest will be abated and Mestek will invest
approximately another $3.0 million into the Company. The total investment of
$6.0 million by Mestek will then be converted from a note to 5.6 million shares
of Series B Preferred Stock carrying a coupon rate of 9.0%. The Series B
Preferred Stock will carry two votes per share. In connection with the purchase
of the preferred stock, Mestek will receive a warrant to purchase 2.0 million
shares of common stock of the Company.

The proposed merger with MCS is subject to approval by the common
stockholders of the Company. If approved, the proposed merger and stockholder
investment in the Company by Mestek is expected to be completed before the end
of February 2000.

New Loans

In July, 1999, the Company reached agreement of terms with a bank for use
of a commercial line of credit. It is expected that the line of credit will be
fully operational by September 1999. The terms of the line will require certain
levels of liquidity, and aging of accounts receivable to be maintained.
Additionally, as is normally the case with lines of credit, certain operating
results for future periods have been identified in order to maintain the
availability of the line for future use.

F-35
<PAGE> 244
SIMIONE CENTRAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In November 1999, the Company received $1.6 million of new loans from two
stockholders and Mestek, the parent company of MCS ($750,000 from stockholders
of the Company and $850,000 from Mestek). The loans were obtained to provide
additional funding for the Company's operations and have maturity terms ranging
from a minimum of 9 months to a maximum of 36 months. The stockholder loans of
$750,000 are not secured and include an interest rate of 9.0%. The $850,000
Mestek loan has an 11.0% interest rate and is secured by the assets of the
Company. Additionally, Mestek has the option to convert the loan to Series C
Preferred Stock of Simione on or after the MCS merger.

F-36
<PAGE> 245

SIMIONE CENTRAL HOLDINGS, INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS
CHARGED
BALANCE AT TO ADDITIONS BALANCE AT
BEGINNING COSTS AND DUE TO END OF
OF PERIOD EXPENSES ACQUISITIONS DEDUCTIONS(1) PERIOD
---------- ---------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C>
Nine months ended September
30, 1999
Allowance for Doubtful
Accounts (unaudited).... $1,674,404 $2,789,641 -- $1,173,712 $3,290,333
========== ========== ======== ========== ==========
Year ended December 31, 1998
Allowance for Doubtful
Accounts................ $1,915,120 $ 791,235 $ -- $1,031,951 $1,674,404
========== ========== ======== ========== ==========
Year ended December 31, 1997
Allowance for Doubtful
Accounts................ $1,063,014 $1,329,563 $253,593 $ 731,050 $1,915,120
========== ========== ======== ========== ==========
Year ended December 31, 1996
Allowance for Doubtful
Accounts................ $ 13,600 $ 395,046 $780,701 $ 126,333 $1,063,014
========== ========== ======== ========== ==========
</TABLE>

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

(1) Write-offs of uncollectible accounts.

F-37
<PAGE> 246

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholder
of MCS, Inc.:

We have audited the accompanying balance sheets of MCS, Inc. as of December
31, 1998 and 1997, and the related statements of income, stockholder's equity
(deficit), and cash flows for each of the years in the three-year period ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of MCS, Inc. as of December 31,
1998 and 1997, and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 1998 in conformity with
generally accepted accounting principles.

/s/ GRANT THORNTON LLP
GRANT THORNTON LLP

Boston, Massachusetts
July 9, 1999 (except for Notes 1, 9, 11, and 12
as to which the date
is September 9, 1999)

F-38
<PAGE> 247

MCS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1999 1998 1997
------------- ------------ ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................. $ 33 $ 60 $ 40
Accounts receivable -- net................ 3,666 3,837 3,734
Unbilled accounts receivable.............. 247 286 248
Inventories............................... 222 264 393
Other current assets...................... 324 68 10
------ ------- -------
Total current assets................. 4,492 4,515 4,425
Property and equipment -- net............. 599 501 315
Capitalized software -- net............... 187 240 93
Other assets.............................. 38 23 62
------ ------- -------
Total assets......................... $5,316 $ 5,279 $ 4,895
====== ======= =======
LIABILITIES AND STOCKHOLDER
CURRENT LIABILITIES:
Accounts payable.......................... $ 673 $ 856 $ 1,107
Deferred revenue.......................... 2,835 3,150 3,205
Customer deposits......................... 487 689 659
Accrued commissions....................... 444 787 874
Payable to parent company................. 619 -- --
Other accrued liabilities................. 728 778 690
------ ------- -------
Total current liabilities............ 5,786 6,260 6,535
------ ------- -------
STOCKHOLDERS' EQUITY:
Common stock -- par value $1 per share,
1,000 shares issued..................... 1 1 1
Paid in capital........................... 310 230 230
Retained earnings (deficit)............... (781) (1,212) (1,871)
------ ------- -------
Total stockholders' equity
(deficit).......................... (470) (981) (1,640)
------ ------- -------
Total liabilities and stockholders'
equity (deficit)................... $5,316 $ 5,279 $ 4,895
====== ======= =======
</TABLE>

See accompanying notes to financial statements.

F-39
<PAGE> 248

MCS, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- ---------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net service revenues................ $12,519 $10,962 $14,901 $15,433 $14,636
Cost of service revenues............ 7,669 6,972 9,225 8,885 8,350
------- ------- ------- ------- -------
Gross profit........................ 4,850 3,990 5,676 6,548 6,286
Selling expense..................... 2,139 1,591 2,223 1,924 1,794
General and administrative
expense........................... 1,183 1,112 1,557 1,735 1,678
New product development............. 831 163 231 -- --
------- ------- ------- ------- -------
Operating profit.................... 697 1,124 1,665 2,889 2,814
Other income (expense), net......... 28 34 47 74 52
------- ------- ------- ------- -------
Income from continuing operations
before taxes...................... 725 1,158 1,712 2,963 2,866
Income taxes........................ 284 467 686 1,195 1,158
------- ------- ------- ------- -------
Income from continuing operations... $ 441 $ 691 $ 1,026 $ 1,768 $ 1,708
Discontinued operations (Note 11):
Income from operations of
discontinued segment before
taxes............................. 251 379 671 401 249
Applicable income tax expense....... 100 152 268 160 100
------- ------- ------- ------- -------
Income from operations of
discontinued segment.............. 151 227 403 241 149
------- ------- ------- ------- -------
Net income........................ $ 592 $ 918 $ 1,429 $ 2,009 $ 1,857
======= ======= ======= ======= =======
Basic and diluted weighted average
shares outstanding................ 1,000 1,000 1,000 1,000 1,000
======= ======= ======= ======= =======
Basic and diluted earnings per
share:
Continuing Operations............. $ 441 $ 691 $ 1,026 $ 1,768 $ 1,708
Discontinued Operations........... 151 227 403 241 149
------- ------- ------- ------- -------
$ 592 $ 918 $ 1,429 $ 2,009 $ 1,857
======= ======= ======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-40
<PAGE> 249

MCS, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
COMMON PAID IN RETAINED CUMULATIVE
STOCK CAPITAL EARNINGS TOTAL
------ ------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance (Deficit) December 31, 1995........ $1 $230 $(1,074) $ (843)
Net income............................... 1,857 1,857
Dividends paid........................... (2,326) (2,326)
------- -------
Balance (Deficit) December 31, 1996........ 1 230 (1,543) (1,312)
Net income............................... 2,009 2,009
Dividends paid........................... (2,337) (2,337)
------- -------
Balance (Deficit) December 31, 1997........ 1 230 (1,871) (1,640)
Net income............................... 1,429 1,429
Dividends paid........................... (770) (770)
------- -------
Balance (Deficit) December 31, 1998........ 1 230 (1,212) (981)
Net income............................... 592 592
Distribution of ProfitWorks Division
(Note 11)............................. 80 80
Dividends paid........................... (161) (161)
-- ---- ------- -------
Balance (Deficit) September 30, 1999
(unaudited).............................. $1 $310 $ (781) $ (470)
== ==== ======= =======
</TABLE>

See accompanying notes to financial statements.

F-41
<PAGE> 250

MCS, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE NINE
MONTHS FOR THE YEARS
ENDED ENDED
SEPT. 30, DECEMBER 31,
------------- ------------------------
1999 1998 1998 1997 1996
----- ----- ------ ------ ------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................. $592 $918 $1,429 $2,009 $1,857
Adjustments to reconcile net income to net
cash provided by operating activities
depreciation and amortization............. 151 125 194 119 94
Provision for losses on accounts receivable,
net of write-offs......................... 163 85
CHANGES IN ASSETS AND LIABILITIES NET OF
EFFECTS OF ACQUISITIONS AND DISPOSITIONS:
Accounts receivable......................... 171 70 (266) (455) 9
Unbilled accounts receivable................ 39 (50) (38) (74) (35)
Inventory................................... 42 36 129 37 131
Accounts payable............................ (183) (279) (251) 288 265
Other liabilities........................... 613 38 89 120 10
Deferred revenue............................ (315) (191) (55) 306 (5)
Customer deposits........................... (202) 188 30 (111)
Accrued commissions......................... (343) (371) (87) 76 126
Other....................................... (305) 9 (19) (2) (28)
---- ---- ------ ------ ------
Net cash provided by operating
activities............................. 260 493 1,318 2,509 2,313
---- ---- ------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures -- Continuing
operations................................ (206) (494) (527) (158) (198)
Capital expenditures -- Discontinued
operations................................ -- (1) (1) (8) (6)
---- ---- ------ ------ ------
Net cash (used in) investing activities... (206) (495) (528) (166) (204)
---- ---- ------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contribution to paid in capital (Note 11)... 80 -- -- -- --
Dividends paid.............................. (161) -- (770) (2,337) (2,326)
---- ---- ------ ------ ------
Net cash (used in) financing activities... (81) -- (770) (2,337) (2,326)
---- ---- ------ ------ ------
Net increase (decrease) in cash and cash
equivalents............................ (27) (2) 20 6 (217)
Cash and cash equivalents -- beginning of
period.................................... 60 40 40 34 251
---- ---- ------ ------ ------
Cash and cash equivalents -- end of
period.................................... $ 33 $ 38 $ 60 $ 40 $ 34
==== ==== ====== ====== ======
</TABLE>

See accompanying notes to financial statements.

F-42
<PAGE> 251

MCS, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(INFORMATION AS OF SEPTEMBER 30, 1999 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND 1998 IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

MCS, Inc. (the Company) provides information systems and services to the
home health care industry under the name MestaMed. As more fully described in
Note 11, the Company's former ProfitWorks segment was distributed to the
Company's parent, Mestek, Inc., on September 1, 1999.

The Company is a wholly owned subsidiary of Mestek, Inc., a public company
traded on the New York Stock Exchange. Inter-company transactions between Mestek
and the Company are generally limited to management fees, federal income tax
allocations, cash advances and cash distributions. The net effect of cash flows
between Mestek and the Company, whether net contributions from Mestek or net
distributions to Mestek, are reflected at year-end in the Stockholder's Equity
section of the Company's balance sheet as paid in capital or inter-company
dividends, respectively. At interim periods, the net effect of such cash flows
are generally recorded as an open intercompany account.

In conjunction with the merger agreement, as more fully explained in Note
12, Mestek, Inc. and Simione Central Holdings, Inc. ("Simione") agreed that
Mestek will not initiate or accept dividend distributions from MCS relative to
its earnings, after April 1, 1999. The parties further agreed that if MCS'
intercompany account with Mestek represents a net payable to Mestek at the date
of the closing, the liability will be treated as a non-interest bearing loan and
will be due and payable at the closing unless otherwise agreed in writing by the
parties prior to the closing.

Mestek, Inc. and MCS have maintained a long standing practice relative to
consolidated federal income tax allocations under which a portion of Mestek's
consolidated federal income tax liability, including as appropriate deferred
taxes, is allocated to MCS each year and is recorded by both entities as an
intercompany receivable/payable. Mestek, Inc. and Simione have agreed pursuant
to the Merger Agreement to continue this practice through the date of the
closing. Similarly, an allocation of Mestek, Inc. corporate overhead is recorded
by both parties on a monthly basis through the intercompany account. Pursuant to
the merger agreement, Mestek, Inc. and Simione agreed that monthly management
fees will continue through the date of the closing.

USE OF ESTIMATES

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

F-43
<PAGE> 252
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE RECOGNITION

In 1998, the Company adopted the American Institute of Certified Public
Accountants ("AICPA") Statement of Position ("SOP") 97-2, "Software Revenue
Recognition", which supersedes SOP-91. The adoption of SOP 97-2 did not have a
material impact on the Company's Financial Statements.

The Company typically delivers its principal product, MestaMed, in the form
of bundled, turnkey systems, including hardware, software, and first year
software maintenance and support. The Company typically recognizes revenues for
these systems upon receipt of a signed purchase agreement, payment of a 20%
deposit, and delivery of the system. Total payment for these systems is fixed,
determinable, and probable. These systems do not typically require significant
post-delivery obligations. The Company's revenue recognition method for MestaMed
is in accordance with the "residual value method" as provided in SOP 98-9.

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, "bug fixes", etc.
Separate fees are charged for new modules, additional users, and migrations to
different operating system platforms.

Subsequent to system shipment, 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 a number of ancillary services
including training, consulting and after-hours support. Revenues from such
services are recognized monthly as such services are performed.

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.

PROPERTY AND EQUIPMENT

Property 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

SFAS No. 86 requires that software development costs incurred subsequent to
the establishment of technological feasibility for the product be capitalized.
The Company has no capitalized development costs.

F-44
<PAGE> 253
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NEW ACCOUNTING STANDARDS

Statement of Financial Accounting Standard (SFAS) No. 130, "Reporting
Comprehensive Income" established standards for the reporting and display of
comprehensive income. For the years ended December 31, 1998, December 31, 1997
and December 31, 1996, respectively, the components of other comprehensive
income were not material.

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard No. 131, which was effective for fiscal years beginning
after December 15, 1997. SFAS 131 requires, in general, a "management approach"
rather than an "industry approach" to the disclosure of segment information. The
Company adopted SFAS 131 in 1998 and prepared its segmental reporting
accordingly as reflected in Note 9 to the Financial Statements.

RECLASSIFICATION

Reclassifications are made periodically to previously issued financial
statements to conform to the current year presentation.

INTERIM FINANCIAL STATEMENTS

The Financial Statements as of, and for the nine months ended, September
30, 1999 and 1998 are unaudited and, in the opinion of management, include all
material adjustments, consisting solely of normal recurring adjustments,
necessary for a fair presentation of the Company's financial position, results
of operations and cash flows. The results for interim periods are not
necessarily indicative of results for the entire year.

2. INVENTORIES

Inventories consist principally of computer equipment held for resale and
related operating system licenses. Inventories are valued at the lower of cost
or market.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, DEPRECIATION AND
SEPTEMBER 30, ---------------------------------- AMORTIZATION EST.
1999 1998 1997 1996 USEFUL LIVES
------------- ---------- --------- --------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Furniture and
fixtures........... $ 299,000 $ 180,000 $ 153,000 $ 143,000 10 years
Computer equipment... 1,108,000 1,021,000 734,000 578,000 5 years
---------- ---------- --------- ---------
1,407,000 1,201,000 887,000 721,000
Accumulated
depreciation....... (808,000) (700,000) (572,000) (481,000)
---------- ---------- --------- ---------
$ 599,000 $ 501,000 $ 315,000 $ 240,000
========== ========== ========= =========
</TABLE>

F-45
<PAGE> 254
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Depreciation expense was $128,000, $100,000 and $76,000 for the years ended
December 31, 1998, 1997 and 1996, respectively.

Depreciation expense was $116,000 and $73,000 for the nine-month periods
ended September 30, 1999 and 1998, respectively.

4. CAPITALIZED SOFTWARE

In June 1999, the Company entered into an agreement with Winfield Software,
Inc. to develop specifications and design layouts for Phase I of a new
generation of MestaMed. Phase I is intended to produce a next-generation version
of MestaMed comprising billing and operational functionality targeted to home
medical equipment providers. Phase I is divided into two stages.

The first stage, incorporating the specifications and design layouts being
produced by Winfield Software, will cost $300,000, of which $80,000 has been
incurred and expensed as of September 30, 1999. The balance of the first stage
expenses are expected to be incurred and expensed prior to March 31, 2000. At
the conclusion of the first stage, the Company expects that technological
feasibility will have been established and, accordingly, stage two of the
development project, which is expected to cost approximately $1,200,000, will
begin. Stage two will consist of implementing the specifications and generating
the software code. It is expected that stage two will be completed prior to
December 31, 2000. In accordance with SFAS No. 86, the Company expects to
capitalize and amortize the cost of stage two over an appropriate period.

The Company's capitalized software represents Mentor/CBT, a computer-based
training tool and content set acquired from a third party in February 1998 at a
cost of approximately $213,000. Mentor/CBT is being amortized over sixty months
using the straight-line method. Mentor/CBT is used by the Company to develop and
organize training programs and other CBT (computer-based training) content to
assist in the implementation of MestaMed and other software applications.

5. INCOME TAXES

Income Tax Expense consisted of the following:

<TABLE>
<CAPTION>
SEPT. 30 SEPT. 30
1999 1998 1998 1997 1996
-------- -------- ---- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Current federal income tax............... $222 $365 $534 $ 936 $ 886
Current state income tax................. 62 102 152 259 272
---- ---- ---- ------ ------
$284 $467 $686 $1,195 $1,158
==== ==== ==== ====== ======
</TABLE>

F-46
<PAGE> 255
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Total Income Tax Expense was essentially equal to "expected" income tax
expense computed by applying the U.S. Federal Income Tax rate of 35 percent, and
related state corporate income tax rates, to earnings before income tax.

Deferred income tax assets and liabilities were not material at September
30, 1999, December 31, 1998, September 30, 1998, December 31, 1997, or December
31, 1996.

For Federal Income Tax purposes, the Company files a consolidated return
with its parent, Mestek, Inc. The Company's income tax provision,
notwithstanding, is computed on a stand-alone basis.

6. STOCKHOLDER'S EQUITY (DEFICIT)

The Company has authorized common stock of 1,000 shares with a par value of
$1 per share. One thousand shares are issued and outstanding and are held by
Mestek, Inc. as of December 31, 1998, 1997 and 1996, and September 30, 1999 and
1998.

7. LEASES

The Company leases office space in suburban Pittsburgh, Pennsylvania on an
operating lease basis. In addition to a basic annual rental of $349,000, the
Company is obligated to pay property taxes on the premises to the extent they
exceed those in effect in 1990. No such excess occurred in either 1998, 1997 and
1996.

Rent expense under the lease totaled $302,000, $252,000 and $277,000 for
the years ended December 31, 1998, 1997 and 1996 respectively, and $335,000 and
$223,000 for the nine month periods ended September 30, 1999 and 1998. Amounts
prior to 1999 are less than the basic annual rental for 1999 as less space was
in use in these years.

Future minimum lease payments under the lease agreement as of December 31,
1998 are as follows:

<TABLE>
<CAPTION>
OPERATING
YEAR ENDING DECEMBER 31, LEASES
- ------------------------ ---------
<S> <C>
1999........................................................ $349,000
2000........................................................ 262,000
--------
Total minimum lease payments.............................. $611,000
========
</TABLE>

8. EMPLOYEE BENEFIT PLAN

The Company maintains a qualified defined contribution target benefit
pension plan, which covers substantially all of its employees. Pension costs are
accrued annually based on contributions earned by participants under plan
provisions. The total expense related to this plan for the twelve months ended
December 31, 1998, 1997 and 1996 was $88,000, $65,000 and $70,000, respectively.
The total expense related to this plan for the nine months ended September 30,
1999 and 1998 was $59,000 and $59,000, respectively.

The Company maintains bonus plans for its officers and other key employees.
The plans generally allow for annual bonuses for individual employees based upon
the operating

F-47
<PAGE> 256
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

results of related profit centers in excess of a percentage of the Company's
investment in the respective profit centers.

The Company maintains a qualified 401(k) Plan for its employees who choose
to participate. Participants may elect to have up to fifteen percent (15%) of
their compensation withheld, up to the maximum allowed by the Internal Revenue
Code. Participants may also elect to make nondeductible voluntary contributions
up to an additional ten percent (10%) of their gross earnings each year within
the legal limits. The Company contributes $0.25 of each $1.00 deferred by
participants and deposited to the Plan not to exceed one and five tenths percent
(1.5%) of an employee's compensation. The Company does not match any amounts for
withholdings from participants in excess of six percent (6%) of their
compensation or for any nondeductible voluntary contributions. Contributions are
funded on a current basis. Employer contributions to the Plan were $66,704,
$60,004, and $54,490 for the years ended December 1998, 1997, and 1996,
respectively. Employer contributions to the Plan were $61,479 and $52,003 for
the nine month periods ended September 30, 1999 and 1998, respectively.

9. SEGMENT INFORMATION

The Company has only one reportable segment, MestaMed, which develops
computer software for the home health care and durable medical equipment
marketplaces. As more fully described in Note 11, the Company's former
ProfitWorks Segment was distributed to Mestek, Inc. on September 1, 1999. The
results of operations for the ProfitWorks segment prior to that date are
accounted for under Discontinued Operations in accordance with APB 30.

10. RELATED PARTY

The Company is a wholly owned subsidiary of Mestek, Inc. (the Parent) a
public company traded on the New York Stock Exchange. As such, the Company has
historically distributed substantially all of its free cash flow to the Parent
in the form of an annual dividend. The Company's historical access to capital
has been through an open intercompany account with the Parent. The Company has
historically generated positive cash flow to the Parent each year and, as such,
had no outstanding intercompany debt to the Parent, or other long-term debt, as
of December 31, 1998, December 31, 1997 or December 31, 1996 and accordingly,
reported no interest expense in 1998, 1997 or 1996. The Company's results of
operations for the nine months ended September 30, 1999, and 1998, and the years
1998, 1997 and 1996 reflect intercompany management fee charges from the Parent
of $74,000, $55,000, $74,000, $78,000 and $84,000, respectively. As described in
Note 1, at interim dates the Company reports its net cash flow activity to or
from the Parent as an open intercompany payable or receivable as appropriate.

F-48
<PAGE> 257
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. DISCONTINUED OPERATIONS

On September 1, 1999, the Company distributed to its parent, Mestek, Inc.,
substantially all of the operating assets and liabilities, including product
warranty obligations, of its former ProfitWorks segment. The ProfitWorks segment
develops and markets software for the building supplies distribution
marketplace. ProfitWorks modules include order entry, inventory control,
billing, accounts receivable and general ledger. ProfitWorks does not
participate in the health care information systems marketplace. The Company has
accounted for the operations of ProfitWorks prior to that date as a discontinued
operation in accordance with APB 30. The liabilities distributed by the Company
and assumed by Mestek, Inc. exceeded the accounting basis of the assets
distributed to Mestek, Inc. by $80,000. The Company has accounted for this
difference as a contribution to Paid in Capital on September 1, 1999. Corporate
overhead costs originally allocated to the Discontinued Operations of
ProfitWorks have been reallocated to the remaining MestaMed business in the
accompanying financial statements, in accordance with APB 30 and are illustrated
in the following table.

<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------- ---------------------
1999 1998 1998 1997 1996
---- ----- ----- ----- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues from Discontinued Segment........... 942 1,182 1,729 1,596 1,478
Overhead reallocated to MestaMed............. 168 120 166 182 180
</TABLE>

ProfitWorks' assets are included in the Company's historical balance sheets
presented herein as follows:

12. SUBSEQUENT EVENT

On May 26, 1999, Mestek entered into a definitive agreement, (the
Agreement), to merge its wholly owned subsidiary, MCS, Inc. (MCS) into Simione
Central Holdings, Inc. (Simione). Under the terms of the Agreement, for every
share of outstanding Simione common stock, Simione will issue approximately .85
shares of its common stock to Mestek in the exchange. As a result, Mestek would
own approximately 46% of outstanding Simione common stock after the merger is
completed. Under the terms of the Agreement, MCS' ProfitWorks segment will be
distributed to Mestek prior to the merger.

Simione is a provider of information systems and services to the Home
Health Care industry. Simione provides information systems, consulting and
agency support services to customers nationwide. Simione provides freestanding,
hospital based and multi-office Home Health Care Providers (including certified,
private duty, staffing, HME, IV therapy, and hospice) with information solutions
that address all aspects of home care operations. Simione maintains offices
nationwide and is headquartered in Atlanta, Georgia.

Under the terms of the Agreement, if either party terminates the Agreement
in favor of an alternative acquisition proposal the terminating party shall be
obligated to pay the

F-49
<PAGE> 258
MCS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

other party up to $1,700,000 in termination fees. The Agreement is subject to
regulatory and stockholder approvals and is expected by the parties to close
prior to the end of 1999.

On September 9, 1999, Mestek, Inc. ("Mestek") announced that it had entered
into an amendment to the Agreement (the "First Amendment"), whereby the shares
of common stock of MCS shall be distributed to the Mestek common stock
stockholders in a spin-off transaction. Immediately prior to the distribution,
MCS will increase its outstanding shares to equal the number of outstanding
shares of Mestek common stock via a stock dividend. MCS shall then be merged
with and into Simione, and MCS' stockholders will receive approximately .85
shares of Simione common stock for each share of MCS common stock.

In connection with the First Amendment, Mestek loaned to Simione the sum of
$3,000,000 on a short-term basis. Upon the closing of the above-mentioned
merger, the $3,000,000 loan will be canceled, and Mestek shall contribute an
additional $3,000,000 to the capital of Simione in return for newly issued
Series B Preferred Stock of Simione. The Series B Preferred Stock issued to
Mestek will have voting rights equivalent to 11.2 million shares of Simione
common stock. Mestek will also receive as part of its capital contribution to
Simione a warrant for the subsequent purchase of 2 million shares of Simione
common stock.

On October 25, 1999, Mestek announced that it had entered into a second
amendment to the Agreement (the "Second Amendment"), which was entered into to
clarify provisions in the merger agreement relating to the appointment of
designees of the MCS stockholders and designees of Simione to Simione's board of
directors during the 18 month period after completion of the merger and the
right of a majority of such MCS designees to remove any MCS designee from the
board during such 18 month period.

The Merger of MCS with and into Simione will be accounted for as a reverse
merger due to the fact that the MCS stockholders will effectively hold more than
50% of the value of all equity securities and more than 50% of the common
shareholder votes of the merged entity through the effect of the Series B
Preferred Stock mentioned above. Accordingly, MCS will be treated as the deemed
acquirer, notwithstanding its technical dissolution, and Simione will be treated
as the acquired entity in accordance with APB 16.

F-50
<PAGE> 259

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
CareCentric Solutions, Inc.

We have audited the accompanying balance sheets of CareCentric Solutions,
Inc. as of December 31, 1998 and 1997, and the related statements of operations,
redeemable convertible preferred stock and stockholders' deficit and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audits 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, based on our audits, the financial statements referred to
above present fairly, in all material respects, the financial position of
CareCentric Solutions, Inc. at December 31, 1998 and 1997, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 1 to the financial statements, in 1998 the Company
changed its method of accounting for depreciation.

The accompanying financial statements have been prepared assuming
CareCentric Solutions, Inc. will continue as a going concern. As more fully
described in Note 1, the Company has incurred recurring operating losses and has
a working capital deficiency. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. These financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability of assets or the amounts and classifications of liabilities that
may result from the outcome of this uncertainty.

/s/ Ernst & Young

Ernst & Young LLP
Atlanta, Georgia
February 26, 1999

F-51
<PAGE> 260

CARECENTRIC SOLUTIONS, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
JUNE 30, -----------------------------
1999 1998 1997
------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 46,777 $ 234,171 $ 2,237,162
Accounts receivable, net of allowance of
$20,000 at June 30, 1999 and December 31,
1998..................................... 421,973 260,799 125,000
Interest receivable........................ 1,563 9,788 22,516
Current portion of note receivable from
employee................................. 19,209 18,847 4,800
Prepaid expenses and deposit............... 33,000 77,393 2,538
------------ ------------- -------------
Total current assets..................... 522,522 600,998 2,392,016
Restricted cash.............................. 100,000 273,526 273,526
Property and equipment, net.................. 269,617 336,095 426,585
Note receivable from employee, net of current
portion.................................... 30,697 53,388 71,158
Other assets................................. 12,654 12,654 12,654
------------ ------------- -------------
Total assets............................. $ 935,490 $ 1,276,661 $ 3,175,939
============ ============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable........................... $ 286,031 $ 112,113 $ 87,281
Deferred revenue........................... -- 271,602 55,020
Accrued liabilities........................ 422,826 163,764 290,037
Term note payable to bank.................. 1,500,000 1,392,000 --
Demand notes payable to stockholders....... 3,253,453 1,982,057 --
Current portion of capital lease
obligations.............................. 44,551 37,617 64,491
------------ ------------- -------------
Total current liabilities................ 5,506,861 3,959,153 496,829
Capital lease obligations, net of current
portion.................................... 101,452 94,366 100,700
Redeemable convertible preferred stock, $0.01
par value, 23,193,171 shares authorized,
issuable in series:
Series A, 3,069,189 shares issued and
outstanding (liquidation preference of
$5,981,639 at June 30, 1999)............. 5,981,639 5,797,488 5,429,185
Series B, 5,123,981 issued and outstanding
(liquidation preference of $9,287,803 at
June 30, 1999)........................... 9,234,225 8,918,496 8,286,898
Series C, 1,994,791 shares issued and
outstanding (liquidation preference of
$3,363,709 at June 30, 1999)............. 3,334,286 3,210,457 2,962,733
Series D, no shares issued or
outstanding.............................. -- -- --
Stockholders' deficit:
Common stock, $0.01 par value, 41,008,330
shares authorized and 1,888,672,
1,881,168 and 1,858,520 shares,
respectively, issued and outstanding..... 19,220 19,145 18,919
Paid-in capital............................ -- -- 532,873
Treasury stock............................. (50,000) (50,000) (50,000)
Accumulated deficit........................ (23,192,193) (20,672,444) (14,602,198)
------------ ------------- -------------
Total stockholders' deficit.............. (23,222,973) (20,703,299) (14,100,406)
------------ ------------- -------------
Total liabilities and stockholders'
deficit............................... $ 935,490 $ 1,276,661 $ 3,175,939
============ ============= =============
</TABLE>

See accompanying notes.

F-52
<PAGE> 261

CARECENTRIC SOLUTIONS, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31,
--------------------------- ---------------------------
1999 1998 1998 1997
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
License fees............ $ 1,097,258 $ -- $ 996,124 $ 25,842
Service fees............ 266,798 -- 62,017 125,000
Hardware fees........... 1,785 -- 2,572 --
------------ ------------ ------------ ------------
Total revenues....... 1,365,841 -- 1,060,713 150,842
Operating expenses:
Cost of revenues........ 725,192 -- 1,250,657 --
Product development..... 733,437 1,625,545 1,775,402 3,257,247
Sales and marketing..... 409,303 581,201 1,151,837 1,102,764
General and
administrative....... 1,060,300 1,033,745 2,152,728 2,150,839
------------ ------------ ------------ ------------
Total operating
expenses........... 2,928,232 3,240,491 6,330,624 6,510,850
------------ ------------ ------------ ------------
Operating loss............ (1,562,391) (3,240,491) (5,269,911) (6,360,008)
Other income (expense):
Interest income......... 2,280 45,829 61,260 135,605
Interest expense........ (339,605) (28,450) (293,078) (25,881)
Other................... -- (4,804) -- (39,750)
------------ ------------ ------------ ------------
Total other income
(expense).......... (337,325) 12,575 (231,818) 69,974
------------ ------------ ------------ ------------
Net loss............. $ (1,899,716) $ (3,227,916) $ (5,501,729) $ (6,290,034)
============ ============ ============ ============
</TABLE>

See accompanying notes.

F-53
<PAGE> 262

CARECENTRIC SOLUTIONS, INC.

STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
REDEEMABLE CONVERTIBLE COMMON STOCK
PREFERRED STOCK, -------------------
IN SERIES STOCK
------------------------ PAR PAID-IN SUBSCRIPTION
SHARES AMOUNT SHARES VALUE CAPITAL RECEIVABLE
---------- ----------- --------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997................... 6,413,878 $10,815,420 1,674,085 $17,074 $1,388,390 $(34,755)
Issuance of Series B preferred stock for
cash, $1.70 per share, net of issuance
costs of $32,333......................... 1,176,471 1,967,668 -- -- -- --
Exercise of common stock options........... -- -- 34,435 345 16,873 --
Restricted stock grant..................... -- -- 150,000 1,500 73,500 --
Receipt of stock subscription.............. -- -- -- -- -- 34,755
Issuance of Series C preferred stock for
cash, $1.50 per share, net of issuance
costs of $42,349......................... 1,437,596 2,114,045 -- -- -- --
Issuance of Series C preferred stock for
note payable reduction in lieu of cash,
$1.50 per share.......................... 557,195 835,793 -- -- -- --
Issuance of Series B preferred stock for
the reduction in stock price from $1.70
per share to $1.50 per share............. 602,821 6,028 -- -- (6,028) --
Accretion on redeemable convertible
preferred stock.......................... -- 939,862 -- -- (939,862) --
Net loss................................... -- -- -- -- -- --
---------- ----------- --------- ------- ---------- --------
Balance at December 31, 1997................. 10,187,961 16,678,816 1,858,520 18,919 532,873 --
Exercise of common stock options........... -- -- 22,648 226 11,098 --
Issuance of warrants related to debt
financing................................ -- -- -- -- 135,137 --
Accretion on redeemable convertible
preferred stock.......................... -- 1,247,625 -- -- (679,108) --
Net loss................................... -- -- -- -- -- --
---------- ----------- --------- ------- ---------- --------
Balance at December 31, 1998................. 10,187,961 17,926,441 1,881,168 19,145 -- --
Exercise of common stock options............. -- -- 7,504 75 3,676 --
Accretion on redeemable convertible preferred
stock...................................... -- 623,709 -- -- (3,676) --
Net loss..................................... -- -- -- -- -- --
---------- ----------- --------- ------- ---------- --------
Balance June 30, 1999........................ 10,187,961 $18,550,150 1,888,672 $19,220 $ -- $ --
========== =========== ========= ======= ========== ========

TREASURY ACCUMULATED
STOCK DEFICIT TOTAL
----------- ------------ ------------
<S> <C> <C> <C>
Balance at January 1, 1997................... $ (50,000) $ (8,312,164) $ (6,991,455)
Issuance of Series B preferred stock for
cash, $1.70 per share, net of issuance
costs of $32,333......................... -- -- --
Exercise of common stock options........... -- -- 17,218
Restricted stock grant..................... -- -- 75,000
Receipt of stock subscription.............. -- -- 34,755
Issuance of Series C preferred stock for
cash, $1.50 per share, net of issuance
costs of $42,349......................... -- -- --
Issuance of Series C preferred stock for
note payable reduction in lieu of cash,
$1.50 per share.......................... -- -- --
Issuance of Series B preferred stock for
the reduction in stock price from $1.70
per share to $1.50 per share............. -- -- (6,028)
Accretion on redeemable convertible
preferred stock.......................... -- -- (939,862)
Net loss................................... -- (6,290,034) (6,290,034)
----------- ------------ ------------
Balance at December 31, 1997................. (50,000) (14,602,198) (14,100,406)
Exercise of common stock options........... -- -- 11,324
Issuance of warrants related to debt
financing................................ -- -- 135,137
Accretion on redeemable convertible
preferred stock.......................... -- (568,517) (1,247,625)
Net loss................................... -- (5,501,729) (5,501,729)
----------- ------------ ------------
Balance at December 31, 1998................. (50,000) (20,672,444) (20,703,299)
Exercise of common stock options............. -- -- 3,751
Accretion on redeemable convertible preferred
stock...................................... -- (620,033) (623,709)
Net loss..................................... (1,899,716) (1,899,716)
----------- ------------ ------------
Balance June 30, 1999........................ $ (50,000) $(23,192,193) $(23,222,973)
=========== ============ ============
</TABLE>

See accompanying notes.

F-54
<PAGE> 263

CARECENTRIC SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31
--------------------------- ---------------------------
1999 1998 1998 1997
------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss............................... $ (1,899,716) $ (3,227,916) $ (5,501,729) $ (6,290,034)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization........ 107,482 91,380 199,313 197,107
Issuance of warrants related to debt
financing.......................... -- -- 135,137 --
Provision for doubtful accounts...... -- -- 20,000 --
Common and preferred stock issued for
services, salaries and as reduction
of notes payable................... -- -- -- 910,793
Loss on disposal of assets........... -- -- -- 45,252
Changes in operating assets and
liabilities:
Accounts receivable.................. (161,173) 37,602 (155,799) (91,880)
Interest receivable.................. 8,225 -- 12,728 (12,458)
Prepaid expenses and deposit......... 44,393 (22,750) (74,855) 19,272
Restricted cash...................... 173,526 -- -- (4,931)
Accounts payable..................... 209,752 (59,713) 24,832 (150,393)
Deferred revenue..................... (271,602) 98,473 216,582 (15,000)
Accrued liabilities.................. 223,227 (177,932) (126,273) 279,434
------------ ------------ ------------ ------------
Net cash used in operating
activities....................... (1,565,886) (3,260,856) (5,250,064) (5,112,838)
INVESTING ACTIVITIES
Purchase of property and equipment,
net.................................. (2,681) (74,014) (108,823) (137,993)
Other, net............................. 22,328 2,978 3,723 1,774
Issuance of notes receivable........... -- -- -- (1,000)
------------ ------------ ------------ ------------
Net cash provided by (used in)
investing activities................. 19,647 (71,036) (105,100) (137,219)
FINANCING ACTIVITIES
Payments on capital lease
obligations.......................... (24,303) (25,149) (33,208) (28,574)
Proceeds from issuance of notes
payable.............................. 1,379,396 1,472,138 3,374,057 --
Net proceeds from issuance of common
stock................................ 3,752 -- 11,324 17,218
Net proceeds from issuance of preferred
stock................................ -- -- -- 4,116,468
------------ ------------ ------------ ------------
Net cash provided by financing
activities........................... 1,358,845 1,446,989 3,352,173 4,105,112
------------ ------------ ------------ ------------
Net decrease in cash and cash
equivalents.......................... (187,394) (1,884,903) (2,002,991) (1,144,945)
Cash and cash equivalents, beginning of
year................................. 234,171 2,237,162 2,237,162 3,382,107
------------ ------------ ------------ ------------
Cash and cash equivalents, end of
year................................. $ 46,777 $ 352,259 $ 234,171 $ 2,237,162
============ ============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest was $47,467 and $25,881 during 1998 and 1997,
respectively.
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITY
The Company acquired $112,962 of furniture and equipment under
capital leases during the year ended December 31, 1997.
</TABLE>

See accompanying notes.

F-55
<PAGE> 264

CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

CareCentric Solutions, Inc. (the "Company"), formerly Smart Clipboard
Corporation, was incorporated on March 25, 1993. The Company develops and
delivers information systems and services for home health agencies. The
commercial release of the Company's initial product, the Smart ClipBoard(TM)
Home Care System, occurred in the first quarter of 1998. As of December 31,
1998, the Company had eight customer sites in various stages of implementation.
The 1998 financial statements reflect the first year the Company is not
considered to be in the development stage.

BASIS OF PRESENTATION

Since inception, the Company's efforts have been directed principally
toward development of its products and services and establishment of a market
for its products and services. As a result of these efforts, the Company has
experienced significant losses from operations. During 1998, the Company was
dependent upon additional financing to meet its operational needs. Management is
in the process of raising capital to fund operations, continue its product
development, and expand its sales and marketing capabilities. Without such
additional financing, the Company may have to discontinue operations. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

REVENUE RECOGNITION

In October 1997, the AICPA issued Statement of Position 97-2, "Software
Revenue Recognition" ("SOP 97-2"), which supersedes SOP 91-1 for periods
beginning after December 15, 1997. The Company adopted the provisions of SOP
97-2 effective January 1, 1998. The Company's contracts to date are for software
licenses that require significant production or modification. Revenues from
these contracts are recognized under the percentage of completion method using
labor costs. Revenue related to development arrangements is recognized on a
percentage of completion basis or as such services are performed, depending on
the terms of the contract. Software support revenues are recognized ratably over
the term of the related agreement.

CONCENTRATIONS AND CREDIT RISK

Financial instruments that potentially subject the Company to concentration
of credit risk consist primarily of accounts receivable. Accounts receivable
represent trade receivables and are unsecured. The Company performs periodic
credit evaluations of its customers' financial condition and generally does not
require collateral to support customer receivables.

F-56
<PAGE> 265
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CASH AND CASH EQUIVALENTS

For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments, including investments in commercial paper, with
a maturity of three months or less when purchased to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, less accumulated depreciation and
amortization. The straight-line method of depreciation was adopted for all
assets placed in service after January 1, 1998. For assets acquired prior to
January 1, 1998 depreciation is based on an accelerated method. The Company
believes the new method will more appropriately reflect its financial results by
better allocating the costs of new property over the useful lives of these
assets. The effect of this change on net loss for 1998 was not material.

Estimated useful lives range from 3 to 7 years. Maintenance and repairs are
charged to expense as incurred. Depreciation expense includes amortization of
assets under capital leases.

INCOME TAXES

The Company accounts for income taxes using the liability method. Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

ADVERTISING EXPENSE

Advertising and sales promotion costs are expensed as incurred. Advertising
expense was approximately $12,000 and $16,000 for the years ended December 31,
1998 and 1997, respectively.

ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could vary from these estimates.

STOCK BASED COMPENSATION

Stock options are accounted for under Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and related interpretations.
The Company has included the pro forma disclosure information required by SFAS
No. 123. (See Note 10.)

F-57
<PAGE> 266
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited financial statements as of June 30, 1999 and
1998 and the six-month periods then ended have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the results of
operations have been included.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the 1998
financial statement presentation.

2. LEASE RECEIVABLES

The Company provides lease financing to certain customers related to sales
of software licenses and computer hardware. Lease terms are generally 3 years.
Future minimum lease payments under these sales-type leases as of December 31,
1998, which are classified in accounts receivable, are as follows:

<TABLE>
<S> <C>
1999........................................................ $32,342
2000........................................................ 32,342
2001........................................................ 10,781
-------
75,465
Interest portion............................................ (9,173)
-------
Present value of future minimum lease payments $66,292
=======
</TABLE>

3. PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 1998 and 1997 consists of the
following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1998 1997
-------- --------
<S> <C> <C>
Computer equipment......................................... $634,219 $557,045
Office equipment........................................... 192,795 175,649
Furniture and fixtures..................................... 32,204 28,149
Leasehold improvements..................................... 12,158 11,772
-------- --------
871,376 772,615
Accumulated depreciation................................... (535,281) (346,030)
-------- --------
$336,095 $426,585
======== ========
</TABLE>

F-58
<PAGE> 267
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. PRODUCT DEVELOPMENT COSTS

5. RELATED PARTY TRANSACTIONS

In 1996, the Company entered into a note receivable (the "Related Note")
with one of its key employees. The Related Note bears interest at 7% per annum
and is scheduled to be repaid in December 2001.

In 1997, the Company entered into a severance agreement with one of its
officers. This agreement included the continuation of salary and benefits for a
nine-month period beginning July 29, 1997, a restricted stock grant of 150,000
shares of common stock, and the reimbursement of related taxes, totaling
approximately $270,000 which was expensed in 1997.

6. NOTES PAYABLE

In April 1998, the Company entered into a bridge loan in the form of demand
notes payable (the "Notes") with several of its existing stockholders. The
cumulative amount outstanding at December 31, 1998, under the Notes was
$1,982,057. The Notes bear interest at a rate of 10% per annum payable upon
demand. The holders of the Notes received warrants to purchase 6,606,856 shares
of the Company's common stock at an exercise price of $0.10 per share, through
August 28, 2004. (See Note 9.)

In October 1998, the Company entered into a $1,500,000 term note payable to
Silicon Valley Bank (the "SVB Note"). The SVB Note bears interest at prime rate
plus 1/2% per annum (8.25% as of December 31, 1998), payable monthly. The SVB
Note expires on February 1, 1999. The holder of the SVB Note received warrants
to purchase 150,000 shares of the Company's common stock at an exercise price of
$0.10 per share, exercisable through October 1, 2008. (See Note 9.)

As of December 31, 1998, the Company had $1,392,000 outstanding on the SVB
Note. Subsequent to December 31, 1998, the Company received an extension on the
SVB Note through March 1, 1999. Under the extension, the interest rate increased
to prime plus 1 1/2% per annum and a warrant to purchase an additional 37,500
shares was issued with the same terms as the above warrants.

7. COMMITMENTS

The cost of equipment that is acquired under terms of leases, which
substantially transfer all of the rights and risks of ownership, is capitalized
by the Company. Assets acquired under capitalized leases are depreciated
principally on the same basis as other similar assets or over the lease term, if
shorter.

F-59
<PAGE> 268
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The original cost and related accumulated depreciation on equipment under
capital leases included in property and equipment on the balance sheet are as
follows:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Cost....................................................... $112,962 $112,962
Accumulated depreciation................................... (58,740) (22,592)
-------- --------
Net book value............................................. $ 54,222 $ 90,370
======== ========
</TABLE>

The Company is obligated under terms of noncancelable operating leases for
future minimum rentals on its office facility and certain furniture and
equipment. Total operating lease expense was $277,902 and $267,256 for the years
ended December 31, 1998 and 1997, respectively.

The Company was obligated at December 31, 1998 for required lease payments
as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
---------- ---------
<S> <C> <C>
Year ending December 31:
1999.................................................... $ 56,332 $258,404
2000.................................................... 45,387 188,422
2001.................................................... 45,387 32,906
2002 and thereafter..................................... 26,674 7,988
---------- --------
Total required lease payments........................... 173,780 $487,720
========
Less interest included in required lease payments....... 41,797
----------
Principal amount of lease payments................... $ 131,983
==========
</TABLE>

At December 31, 1998, the Company had outstanding letters of credit of
approximately $274,000, which was required by specific suppliers to guarantee
availability of office furniture and office space for lease.

8. INCOME TAXES

At December 31, 1998, the Company had net operating loss carryforwards of
approximately $17,475,000, and research and development tax credit carryforwards
of approximately $293,000. These carryforward items are available to offset
future taxable income principally through December 31, 2013 and 2012,
respectively. For financial reporting purposes, a valuation allowance has been
recognized to reduce to zero the net deferred tax asset resulting principally
from these carryforward items.

F-60
<PAGE> 269
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Reconciliations of the provision for income tax benefit to the federal
statutory rate for the years ended December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------
1998 1997
---- ----
<S> <C> <C>
Tax at federal statutory rates.............................. (34%) (34%)
State taxes, net of federal benefit......................... (4%) (4%)
Research and development tax credits........................ (1%) (2%)
Other....................................................... 2% 2%
Change in valuation allowance............................... 37% 38%
---- ----
-- --
==== ====
</TABLE>

9. PREFERRED STOCK AND WARRANTS

In October 1995, the Company issued 3,069,189 shares of Series A Redeemable
Convertible Preferred Stock ("Series A") for $1.50 per share. In September 1996,
the Company issued 3,344,689 shares of Series B Redeemable Convertible Preferred
Stock ("Series B") for $1.70 per share. In April 1997, the Company issued
additional 1,176,471 shares of Series B for $1.70 per share. In December 1997,
the Company issued 602,821 shares of Series B as a stock split effected in the
form of a dividend in order to reduce the stock price from $1.70 per share to
$1.50 per share. In December 1997, the Company also issued 1,994,791 shares of
Series C Redeemable Convertible Preferred Stock ("Series C") for $1.50 per
share.

Each share of Series A, B, and C stock is convertible into one share of the
Company's common stock. The Series A, B, and C stock may be converted into the
Company's common stock at any time by the holders, or automatically if the
Company conducts an initial public offering at a gross selling price per share
of common stock of not less than $4.50 and which results in aggregate gross
proceeds of not less than $15,000,000. The holders of the Series A, B, and C
stock are entitled to cumulative annual dividends of 8% of the respective
issuance prices payable when authorized by the Board of Directors, upon
liquidation, upon business combination, or upon redemption or conversion of the
Series A, B, and C stock into the Company's common stock. Accumulated undeclared
dividends on Series A, Series B, and Series C stock totaled $2,739,932 at
December 31, 1998. In general, the Series A, B, and C stock have preference at
liquidation equal to the respective issuance prices, plus any accrued, unpaid
dividends whether or not declared. Each Series A, B and C stockholder has the
right to vote as if their shares had been converted to common stock at the then
current conversion rate.

On October 4, 2001, 2002, 2003 and 2004, any holder of the Series A, B, and
C stock can require the Company to redeem 25% of the outstanding Series A, B,
and C stock at the redemption price. The redemption price is equal to the
original issuance prices of the Series A, B, and C stock plus any cumulative
unpaid dividends.

On October 2, 1998, the stockholders approved the authorization of
13,000,000 shares of Series D preferred shares representing 12,500,000 shares to
be sold by the Company and

F-61
<PAGE> 270
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

500,000 to be subject to a warrant reserved for the investment banking firm
retained by the Company to assist in the offering. The warrant is to be issuable
upon the closing of the Series D offering. As of December 31, 1998, no shares of
Series D have been issued.

In conjunction with the issuance of Series C in December 1997, the Company
issued 997,396 Common Stock Warrants ("Warrants") which entitle the holder to
purchase shares of the Company's common stock at a price of $0.15 per share at
any time for a five-year exercise period. The value assigned to these warrants
was nominal.

In connection with a financing agreement entered into with certain of the
Company's investors on April 30, 1998, as amended on September 1, 1998, the
Company issued Warrants to purchase 6,606,856 shares of the Company's common
stock at $0.10 per share which were fully exercisable and outstanding at
December 31, 1998. The Warrants have a six-year exercise period. A value of
$132,137 was assigned to the Warrants and was amortized to interest expense over
the estimated period balances were expected to be outstanding under the
financing agreement during 1998.

In connection with a financing agreement entered into with Silicon Valley
Bank on October 2, 1998, the Company issued a Warrant to purchase 150,000 shares
of the Company's common stock at $0.10 per share which was fully exercisable and
outstanding at December 31, 1998. The Warrant has a ten-year exercise period. A
value of $3,000 was assigned to the Warrants and was amortized to interest
expense over the term of the financing agreement. If the debt remains
outstanding at the end of the financing arrangement and is extended, the Company
will be required to grant additional shares under the Warrant. (See Note 6.)

The values of warrants issued in 1998 and 1997 were estimated using the
Black-Scholes model with the following assumptions in 1998 and 1997: risk-free
interest rates of 5.5% and 6.3%, respectively; volatility of zero; a dividend
yield of zero; an expected life of the warrants of 5 years; and the estimated
fair value of the underlying common stock of $.10 per share.

The Company has reserved 34,805,251 shares of common stock for issuance
upon conversion of the Series A, Series B, Series C, and Series D preferred
stock and upon the exercise of warrants and options.

10. STOCK OPTION PLAN

The Company has elected to follow Accounting Principles Board Opinion No.
25 "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under SFAS
No. 123, "Accounting for Stock-Based Compensation," requires use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, when the exercise price of the Company's employee stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

In 1998 the stockholders approved the authorization of an additional
500,000 shares of common stock to be reserved for future grant under its
Incentive Stock option Plan (the

F-62
<PAGE> 271
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

"Plan"). Under the Plan, the Company is authorized to grant options to employees
for up to 3,857,829 shares of the Company's common stock. Options granted have
10 year terms and vest evenly over zero to four years from the date of grant.

SFAS No. 123 requires reporting pro forma net loss as if the Company had
accounted for its employee stock options granted subsequent to December 31, 1994
under the fair value method of that Statement. The fair value for these options
was estimated at the date of grant using the Black-Scholes model with the
following weighted-average assumptions for both 1998 and 1997: risk-free
interest rates of 5.5% and 6.3%, respectively; a volatility of zero; a dividend
yield of 0%; and a weighted-average expected life of the options of 5 years. The
estimated weighted-average fair value per share of options granted during 1998
and 1997 is $0.00 and $0.15, respectively. For purposes of pro forma
disclosures, the estimated fair value of the options is amortized to expense
over the options' vesting period. The Company's pro forma net loss for the years
ended December 31, 1998 and 1997 is approximately ($5,530,000) and ($6,293,000),
respectively. Because SFAS No. 123 is applicable only to options granted
subsequent to December 31, 1994, its pro forma effect will not be fully
reflected until the year 2001.

The Black-Scholes model was developed for use in estimating the fair value
of traded options that have no vesting restrictions and are fully transferable.
In addition, option valuation models require the input of highly subjective
assumptions. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

A summary of the Company's stock option activity, and related information
for the years ended December 31 follows:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Outstanding at December 31, 1996..................... 1,211,000 $0.59
Granted............................................ 860,500 $0.50
Exercised.......................................... (34,435) $0.50
Forfeited.......................................... (802,065) $0.50
--------- -----
Outstanding at December 31, 1997..................... 1,235,000 $0.59
Granted............................................ 2,217,761 $0.50
Exercised.......................................... (22,648) $0.50
Forfeited.......................................... (557,352) $0.70
--------- -----
Outstanding at December 31, 1998..................... 2,872,761 $0.50
========= =====
Exercisable at December 31, 1997..................... 149,125 $0.88
Exercisable at December 31, 1998..................... 443,712 $0.50
</TABLE>

Exercise prices for options outstanding as of December 31, 1998 were $0.50.
The weighted-average remaining contractual life of those options is 9.2 years.

The Company had 927,686 shares available for future grant under the Plan.

F-63
<PAGE> 272
CARECENTRIC SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

11. PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan (the "Plan") covering
employees who have six months service and are at least 21 years of age.
Participants may contribute up to 15% of their eligible compensation. The
Company, at its discretion, may provide a matching contribution as well as a
profit sharing contribution. For the years ended December 31, 1998 and 1997, the
Company made no matching or profit sharing contributions to the Plan.

12. SUBSEQUENT EVENTS (UNAUDITED)

NOTES PAYABLE

On March 1, 1999 the Company extended its term note payable to Silicon
Valley Bank through July 3, 1999. Under the extension, the interest rate
increased to prime plus 3 1/4% per annum and an additional warrant to purchase
56,250 shares was issued with terms consistent with all warrants previously
issued in connection with the term note. The value of this warrant was estimated
to be approximately $1,000 using the method and assumptions described in Note 9.

Between March 26 and June 15, 1999, the Company entered into additional
demand notes payable to a number of its preferred stockholders for $1,271,396 in
the aggregate. These notes bear interest at a rate of 5% per month and are due
with accrued interest at the demand of the holders of the notes.

RELATED PARTY TRANSACTION

The Related Note from one of its key employees as discussed in Note 5 had
principal amounts due of $49,906, $72,235 and $75,958 at June 30, 1999, December
31, 1998 and December 31, 1997, respectively. In January 1999, $13,012 of
principle and $1,988 of accrued interest on the Related Note were forgiven.
Additionally, the interest rate was reduced to 4.57% from 7% per annum. The
Related Note was not collateralized, without recourse and the principal and
interest forgiven was recorded as compensation expense.

SALE OF COMPANY

On August 12, 1999, the Company was merged into Simione Central Holdings
Inc., a NASDAQ traded company that provides integrated systems and services,
agency support and consulting to the home health industry. Under the terms of
the merger, total consideration at closing was $9,092,405.

The merger agreement also resulted in the assumption of the Company's
$1,500,000 term note payable to Silicon Valley Bank, and cancellation of any
warrants for the purchase of CareCentric Stock.

The Company discontinued operations the day after closing.

F-64
<PAGE> 273

APPENDIX A

SECOND AMENDED AND RESTATED AGREEMENT
AND PLAN OF MERGER AND INVESTMENT AGREEMENT

DATED AS OF OCTOBER 25, 1999

AMONG

MCS, INC.,

MESTEK, INC.,

SIMIONE CENTRAL HOLDINGS, INC.,

JOHN E. REED, STEWART B. REED

AND E. HERBERT BURK
<PAGE> 274

SECOND AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AND INVESTMENT AGREEMENT

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1. DEFINITIONS; LOAN AND INVESTMENT........................... A-2

1.1. Defined Terms.............................................. A-2

1.2 Loan....................................................... A-6

1.3. Spinoff.................................................... A-7

1.4. Parent Investment.......................................... A-7

1.5. Mestek Warrant............................................. A-7

ARTICLE 2. THE MERGER................................................. A-7

2.1. The Merger................................................. A-7

2.2. Effective Time............................................. A-7

2.3. Effect of the Merger....................................... A-8

2.4. Subsequent Actions......................................... A-8

2.5. Certificate of Incorporation; Bylaws; Directors and
Officers................................................... A-8

2.6. Stockholders' Meeting...................................... A-10

2.7. Tax Consequences........................................... A-10

ARTICLE 3. MERGER CONSIDERATION....................................... A-10

3.1. Conversion of Company Capital Stock........................ A-10

3.2. Fractional Shares.......................................... A-10

3.3. Stock Options and Warrants................................. A-11

3.4. Delivery of Merger Shares.................................. A-11

3.5. Closing.................................................... A-12

ARTICLE 4. ADDITIONAL COVENANTS....................................... A-12

4.1. Registration Rights........................................ A-12

4.2. Stockholders' Meeting...................................... A-16

4.3. Best Efforts to List Shares and Maintain S-3 and NASDAQ
NMS Status................................................. A-16

4.4. ProfitWorks Agreement...................................... A-16

4.5. Parent Plan and Company Plan............................... A-16

4.6. Company Financial Statements............................... A-17

4.7. Conduct of Business by Purchaser and the Company Pending
Merger..................................................... A-17

4.8. Expenses................................................... A-18

4.9. Tax Matters................................................ A-19

4.10. Notification of Certain Matters............................ A-21

4.11. Public Announcements....................................... A-21

4.12. Tax Free Reorganization.................................... A-22

4.13. Access and Inspection...................................... A-22

4.14. Ongoing Business........................................... A-22

4.15. Certain Filings, Consents and Arrangements................. A-22

4.16. No Solicitation............................................ A-22

4.17. Registration............................................... A-24
</TABLE>

A-i
<PAGE> 275

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
4.18. Affiliates................................................. A-25

4.19. Dissenters Rights.......................................... A-26

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND PARENT... A-26

5.1. Organization and Authority................................. A-26

5.2. Corporate Power and Authority; Due Authorization........... A-26

5.3. Ownership of Assets........................................ A-27

5.4. No Conflict; Required Consents............................. A-27

5.5. Capitalization............................................. A-27

5.6. Compliance with Laws; Filings with the SEC................. A-28

5.7. Licenses and Permits....................................... A-28

5.8. Liabilities and Obligations of the Company................. A-29

5.9. Taxes...................................................... A-29

5.10. Contracts, Agreements and Instruments Generally............ A-31

5.11. Customer Contracts......................................... A-31

5.12. Intellectual Property; Computer Software................... A-32

5.13. Labor Matters.............................................. A-33

5.14. Work-in-Process, Orders and Returns........................ A-33

5.15. Absence of Certain Changes................................. A-34

5.16. Leases..................................................... A-35

5.17. Litigation................................................. A-35

5.18. Employee Benefit Plans: Employees.......................... A-35

5.19. Accuracy of Representations................................ A-38

5.20. Brokers Fees and Expenses.................................. A-38

5.21. Bank Accounts.............................................. A-38

5.22. Business Practices......................................... A-38

5.23. Insurance.................................................. A-38

5.24. Tax Free Reorganization.................................... A-38

5.25. No Existing Discussion..................................... A-39

ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER................ A-39

6.1. Organization of Purchaser.................................. A-39

6.2. Corporate Power and Authority; Due Authorization........... A-39

6.3. No Conflict; Consents...................................... A-39

6.4. Ownership of Assets........................................ A-40

6.5. Capitalization............................................. A-40

6.6. Compliance with Laws....................................... A-40

6.7. Licenses and Permits....................................... A-41

6.8. Liabilities and Obligations of Purchaser................... A-41

6.9. Taxes...................................................... A-42

6.10. Contracts, Agreements and Instruments Generally............ A-43

6.11. Customer Contracts......................................... A-43

6.12. Intellectual Property; Computer Software................... A-44

6.13. Labor Matters.............................................. A-45

6.14. Work-in-Process, Orders and Returns........................ A-45

6.15. Absence of Certain Changes................................. A-45

6.16. Leases..................................................... A-46
</TABLE>

A-ii
<PAGE> 276

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
6.17. Litigation.................................................. A-47

6.18. Employee Benefit Plans: Employees........................... A-47

6.19. Brokers Fees and Expenses................................... A-49

6.20. Bank Accounts............................................... A-50

6.21. Business Practices.......................................... A-50

6.22. Insurance................................................... A-50

6.23. Tax Free Reorganization..................................... A-50

6.24. No Existing Discussion...................................... A-50

6.25. Shares to be Delivered...................................... A-50

6.26. Accuracy of Securities Filings; Financial Statements........ A-50

6.27. Approvals................................................... A-51

6.28. Accuracy of Representations................................. A-51

6.29. NASDAQ Rules................................................ A-52

ARTICLE 7. INDEMNIFICATION............................................. A-52

7.1. Indemnification by Parent................................... A-52

7.2. Indemnification by Surviving Corporation.................... A-52

7.3. Provisions Regarding Indemnification........................ A-52

7.4. Survival.................................................... A-53

7.5. Limitations................................................. A-53

7.6. No Recourse Against the Company............................. A-53

7.7. Effect of Insurance......................................... A-54

ARTICLE 8. CONDITIONS TO OBLIGATIONS OF PURCHASER TO CLOSE............
A-54
8.1. Representations and Warranties True at Closing.............. A-54

8.2. Obligations Performed....................................... A-54

8.3. Consents.................................................... A-54

8.4. Closing Deliveries.......................................... A-54

8.5. No Challenge................................................ A-55

8.6. No Material Adverse Consequence............................. A-55

8.7. Revised Schedules........................................... A-55

8.8. Repayment of Debts.......................................... A-55

8.9. Releases.................................................... A-56

8.10. Spinoff..................................................... A-56

8.11. Registration Statement...................................... A-56

ARTICLE 9. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND PARENT TO
CLOSE....................................................... A-56
9.1. Representations and Warranties True at Closing.............. A-56

9.2. Obligations Performed....................................... A-56

9.3. Consents.................................................... A-56

9.4. Closing Deliveries.......................................... A-56

9.5. No Challenge................................................ A-57

9.6. Revised Schedules........................................... A-57

9.7. No Material Adverse Consequence............................. A-57

9.8. Spinoff..................................................... A-57

9.9. Registration Statement...................................... A-57
</TABLE>

A-iii
<PAGE> 277

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 10. TERMINATION............................................... A-58
Termination............................................... A-58
10.1.
Effect of Termination..................................... A-58
10.2.

ARTICLE 11. MISCELLANEOUS PROVISIONS.................................. A-58
Severability.............................................. A-58
11.1.
Modification.............................................. A-58
11.2.
Assignment, Survival and Binding Agreement................ A-58
11.3.
Counterparts.............................................. A-59
11.4.
Notices................................................... A-59
11.5.
Entire Agreement; No Third Party Beneficiaries............ A-59
11.6.
Governing Law............................................. A-59
11.7.
Arbitration............................................... A-59
11.8.
Headings.................................................. A-60
11.9.
Incorporation of Exhibit and Schedules.................... A-60
11.10.
Waiver.................................................... A-60
11.11.
Time of Essence........................................... A-60
11.12.
Appointment of Agent...................................... A-60
11.13.
Provision of Assistance................................... A-60
11.14.
</TABLE>

A-iv
<PAGE> 278

SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF
MERGER AND INVESTMENT AGREEMENT

This SECOND AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER AND
INVESTMENT AGREEMENT, dated as of the 25th day of October, 1999 (the
"Agreement"), is by and among MCS, INC., a Pennsylvania corporation (the
"Company"), MESTEK, INC., a Pennsylvania corporation ("Parent"), SIMIONE CENTRAL
HOLDINGS, INC., a Delaware corporation ("Purchaser"), JOHN E. REED, STEWART B.
REED and E. HERBERT BURK.

WITNESSETH:

WHEREAS, the Company, Parent and Purchaser entered into that certain
Agreement and Plan of Merger dated as of May 26, 1999 (the "Original Agreement")
under which the parties contemplated the acquisition by Purchaser of the Company
pursuant to the merger of the Company with and into Purchaser in accordance with
the terms and conditions set forth in the Original Agreement ("Merger");

WHEREAS, Purchaser acquired the stock of CareCentric Solutions, Inc.
("CareCentric") pursuant to a merger that was consummated on August 12, 1999
(the "CareCentric Acquisition");

WHEREAS, subsequent to the execution of the Original Agreement, the parties
decided that, in order to fulfill the original business plan underlying the
Original Agreement and to fully realize the benefits of the CareCentric
Acquisition, it was necessary to amend the Original Agreement to provide for
additional financial investment in Purchaser by Parent (to satisfy certain
CareCentric liabilities and other business needs) (the Original Agreement, as
amended and restated as of September 9, 1999, is referred to hereafter as the
"First Amended Agreement");

WHEREAS, in connection with the First Amended Agreement, the parties
decided that it is was necessary for Parent and its shareholders to collectively
control Purchaser after the Merger in order to reflect Parent's additional
financial investment in Purchaser and to ensure that the business plan for
Purchaser after the Merger envisioned by the parties can be implemented;

WHEREAS, contemporaneously with the execution and delivery of the First
Amended Agreement, Parent made a $3 million loan to Purchaser ("Loan");

WHEREAS, prior to Closing, Parent intends to effect a spinoff under Section
355 of the Code pursuant to which Parent will distribute its Company Capital
Stock to its stockholders pro rata in accordance with their respective ownership
interests in Parent's common stock ("Spinoff");

WHEREAS, at Closing Parent intends to purchase from Purchaser newly-issued
Series B Preferred Stock of Purchaser ("Purchaser Series B Preferred") for a
total consideration of $6 million ("Mestek Investment");

WHEREAS, the Loan shall be deemed repaid upon the closing of the Mestek
Investment;

A-1
<PAGE> 279

WHEREAS, Purchaser shall issue Parent a warrant ("Mestek Warrant") to
purchase 2,000,000 shares of Purchaser Common Stock ("Warrant Shares") upon the
closing of the Mestek Investment; and

WHEREAS, the parties desire to amend and restate the First Amended
Agreement to make certain changes that conform to the proposed structure of the
Merger;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS; LOAN AND INVESTMENT

1.1. DEFINED TERMS. As used in this Agreement:

"Acquisition Proposal" shall have the meaning ascribed to it in Section
4.16(a) hereof.

"Affiliate" shall have the meaning ascribed to it in Paragraphs (c) and (d)
of Rule 145 under the Securities Act.

"Affiliated Group" means any affiliated group within the meaning of Section
1504(a) of the Code or any similar group defined under a similar provision of
state, local or foreign law.

"Agreement" means the Agreement and Plan of Merger, and all Schedules and
Exhibits hereto.

"Assets" means all of the assets of the Company (other than those assets
relating to the Company's ProfitWorks applications software system and related
product line, which shall be disposed of by the Company prior to the Closing
Date) or of Purchaser (as the context shall require), of every kind and nature.

"CareCentric" shall have the meaning ascribed to it in the Recitals hereof.

"CareCentric Acquisition" shall have the meaning ascribed to it in the
Recitals hereof.

"Certificate" and "Certificates" shall have the meanings set forth in
Section 3.4 hereof.

"Certificate of Designations" shall have the meaning ascribed to it in
Section 1.4 hereof.

"Closing" and "Closing Date" shall have the meaning ascribed to such terms
in Section 3.5 hereof.

"Closing Balance Sheet" shall mean the Company's balance sheet to be dated
as of September 30, 1999.

"Closing Documents" means this Agreement and all other documents to be
executed and delivered either simultaneously herewith or at Closing in
connection with the Transactions.

A-2
<PAGE> 280

"COBRA" shall have the meaning ascribed to it in Section 5.18(e) hereof.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company Capital Stock" shall have the meaning ascribed to it in Section
3.1 hereof.

"Company Employees" shall have the meaning ascribed to it in Section
5.18(a) hereof.

"Company Financial Statements" shall have the meaning ascribed to it in
Section 5.8(a) hereof.

"Company Information" shall have the meaning ascribed to it in Section
4.17(a) hereof.

"Company Software" shall have the meaning ascribed to it in Section 5.12(d)
hereof.

"Company Stockholder Approval" means with respect to the Company the
requisite approval by holders of the Company's capital stock of this Agreement,
the Merger and the Certificates of Merger.

"Company Stockholders" means the holders of all of the issued and
outstanding Company Capital Stock, after giving effect to the consummation of
the Spinoff.

"Confidentiality Agreement" shall mean that certain Confidentiality and
Nondisclosure Agreement dated as of February 8, 1999 by and among Purchaser,
Parent and the Company.

"Customer Contract" shall have the meaning ascribed to it in Section 5.11
hereof, and shall apply with respect to Purchaser in Section 6.11 hereof.

"Delaware Act" means the General Corporation Law of the State of Delaware.

"Disqualification" shall have the meaning ascribed to it in Section 2.5
hereof.

"DOL" shall have the meaning ascribed to it in Section 5.18(b) hereof.

"Effective Time" shall have the meaning ascribed to it in Section 2.2
hereof.

"Employee Benefit Plan" shall have the meaning ascribed to it in Section
5.18(a) hereof, and shall apply with respect to Purchaser in Section 6.18
hereof.

"Environmental Laws" shall have the meaning ascribed to it in Section
5.6(c) hereof.

"ERISA" shall have the meaning ascribed to it in Section 5.18(a) hereof.

"ERISA Affiliate" shall have the meaning ascribed to it in Section 5.18(a)
hereof, and shall apply with respect to Purchaser in Section 6.18 hereof.

"Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and all regulations promulgated pursuant thereto.

"Exchange Ratio" shall have the meaning ascribed to it in Section 3.1(a)
hereof.

"GAAP" means United States generally accepted accounting principles as in
effect from time to time.

A-3
<PAGE> 281

"Governmental Authority" shall include any and all governmental or quasi-
governmental bodies, agencies, bureaus, departments, boards, commissions,
instrumentalities or other entities having or asserting jurisdiction over
Purchaser, Parent or the Company, as applicable.

"HSR" shall have the meaning ascribed to it in Section 4.15 hereof.

"Immigration Laws" shall have the meaning ascribed to it in Section 5.13
hereof.

"IRS" shall have the meaning ascribed to it in Section 5.18(b) hereof.

"knowledge" or "known" means or refers to the actual knowledge of the
president, chief financial officer or general counsel as to Purchaser and as to
Parent, and the president or chief financial officer, as to the Company.

"Licensed Software" shall have the meaning ascribed to such term in Section
5.12(c) hereof, and shall apply with respect to Purchaser in Section 6.12(c)
hereof.

"Loan" shall have the meaning ascribed to it in the Recitals hereof.

"Lockup Period" shall have the meaning ascribed to it in Section 3.4(b)
hereof.

"Material Adverse Consequence" means a material adverse effect upon, or in,
or circumstances likely to result in, a material adverse change in the business,
assets, liabilities, operations, results of operations, properties (including
intangible properties), regulatory status or condition (financial or otherwise)
of the Company or Purchaser, as the case may be, taken as a whole, the effect of
which is equal to or greater than $2,000,000.

"Material Adverse Effect" means a material adverse effect upon, or in, or
circumstances likely to result in, a material adverse change in (i) the
business, assets, liabilities, operations, results of operations, properties
(including intangible properties), regulatory status or condition (financial or
otherwise) of the Company or Purchaser, as the case may be, taken as a whole,
the effect of which is equal to or greater than $100,000, (ii) the legality,
validity, binding effect or enforceability of this Agreement, or (iii) the
ability of the Company or Purchaser, as the case may be, to perform its
respective obligations under this Agreement.

"Material Contracts" shall have the meaning ascribed to it in Section 5.10
hereof, and shall apply with respect to Purchaser in Section 6.10 hereof.

"MCS Major Stockholders" means any of John E. Reed, Stewart B. Reed and E.
Herbert Burk.

"Merger" shall have the meaning ascribed to it in the preamble.

"Merger Option Agreement" shall have the meaning ascribed to it in Section
3.3(a) hereof.

"Merger Options" shall have the meaning ascribed to it in Section 3.3(a)
hereof.

"Merger Shares" shall have the meaning ascribed to it in Section 3.1(a)
hereof.

"Mestek Investment" shall have the meaning ascribed to it in the Recitals
hereof.

"Mestek Warrant" shall have the meaning ascribed to it in the Recitals
hereof.

"Note" shall have the meaning ascribed to it in Section 1.2 hereof.

A-4
<PAGE> 282

"Options" shall have the meaning ascribed to it in Section 3.3(a) hereof.

"Owned Software" shall have the meaning ascribed to it in Section 5.11
hereof, and shall apply with respect to Purchaser in Section 6.11 hereof.

"PBGC" shall have the meaning ascribed to it in Section 5.18(b) hereof.

"Parent Affiliated Group" shall have the meaning ascribed to it in Section
5.9(f) hereof.

"Parent Designee" shall have the meaning ascribed to it in Section 2.5(c)
hereof.

"Parent Plan" shall have the meaning ascribed to it in Section 4.5 hereof.

"Pennsylvania Act" means the Pennsylvania Business Corporation Law.

"Person" means an individual, corporation, limited liability company,
limited liability partnership, limited partnership, trust, joint venture,
association or unincorporated organization or a Governmental Authority.

"Pre-Closing Tax Periods" shall have the meaning ascribed to it in Section
4.9(a) hereof.

"ProfitWorks Business" shall have the meaning ascribed to it in Section 4.4
hereof.

"Public Reports" has the meaning set forth in Section 5.6(d) hereof.

"Purchaser Common Stock" shall have the meaning ascribed to it in Section
3.1 hereof.

"Purchaser Conversion Rights" shall have the meaning ascribed to it in
Section 6.5 hereof.

"Purchaser Employees" shall have the meaning ascribed to it in Section
6.18(a) hereof.

"Purchaser Financial Statements" shall have the meaning ascribed to it in
Section 6.8(a) hereof.

"Purchaser Plan" shall have the meaning ascribed to it in Section 4.5
hereof.

"Purchaser Series B Preferred" shall have the meaning ascribed to it in the
Recitals hereof.

"Purchaser Software" shall have the meaning ascribed to it in Section
6.12(d).

"Purchaser Stockholder Approval" means with respect to the Purchaser the
requisite approval by holders of Purchaser's capital stock of this Agreement,
the Merger, the Mestek Investment, the Mestek Warrant and the Certificates of
Merger.

"Registrable Shares" means the Merger Shares, the Option Shares (as defined
in the Merger Option Agreement), the Mestek Warrant, the Warrant Shares and any
shares of Purchaser Common Stock to be issued pursuant to the indemnification
provisions of Article 7 hereof.

"Registration Rights Agreements" shall have the meaning ascribed to it in
Section 4.1.

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"Registration Statement" shall have the meaning ascribed to it in Section
4.17(a) hereof.

"Revised Schedules" shall have the meaning ascribed to it in Section 8.7
hereof.

"Rights Holder" and "Rights Holders" shall have the meaning ascribed to
such terms in Section 4.1(l) hereof.

"Rule 145 Letter" shall have the meaning ascribed to it in Section 4.18
hereof.

"SEC" shall mean the U.S. Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and all
regulations promulgated thereunder.

"Securities Filings" shall mean all filings made by Purchaser with the SEC
from and after January 1, 1996 pursuant to the Securities Act and the Exchange
Act.

"Security Agreement" shall have the meaning ascribed to it in Section 1.2
hereof.

"Spinoff" shall have the meaning ascribed to it in the Recitals hereof.

"Spinoff Date" means the date of the consummation of the Spinoff.

"Surviving Corporation" shall have the meaning ascribed to it in Section
2.1 hereof.

"Tax" or "Taxes" means all taxes, charges, fees, interest, fines,
penalties, additions to tax or other assessments imposed by any Tax Authority,
including without limitation, income, excise, environmental, property, sales,
gross receipts, gains, transfer, occupation, privilege, employment (including
social security and unemployment), use, value added, capital stock or surplus,
franchise, advance corporate, withholding, unemployment, estimated and customs
duties taxes.

"Tax Authority" means any United States federal, foreign, national, state,
county or municipal or other local government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising any
taxing authority or any other authority exercising tax regulatory authority.

"Tax Return" means any return, declaration, report, claim for refund or
information return filed or to be filed with any Tax Authority in connection
with the determination, assessment, collection or administration of any Tax,
including any schedule or attachment thereto and any amendment thereof.

"Termination Date" means the date on which this Agreement may be terminated
pursuant to Section 10.1 hereof.

"Transaction Documents" shall have the meaning ascribed to such term in
Section 7.1 hereof.

"Transactions" means the transactions contemplated by this Agreement.

"Warrant Shares" shall have the meaning ascribed to it in the Recitals
hereof.

"Warrants" shall have the meaning ascribed to it in Section 3.3(a) hereof.

1.2. LOAN. Simultaneously with the execution and delivery of this
Agreement, Parent is making the Loan to Purchaser. The Loan is evidenced by that
certain secured

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promissory note from Purchaser in favor of Parent of even date herewith in the
original principal amount of $3,000,000 attached hereto as Exhibit 1.2(a) (the
"Note"). The Note is secured by the grant of a security interest from Purchaser
to Parent pursuant to a security agreement of even date herewith attached hereto
as Exhibit 1.2(b) ("Security Agreement"). Purchaser shall execute any Uniform
Commercial Code financing statements or other documents reasonably required by
Parent in order to perfect its security interest in Purchaser's assets granted
under the Security Agreement. The parties hereto acknowledge and agree that
Parent's security interest under the Security Agreement is expressly
subordinated to the lien on Purchaser's assets currently held by Silicon Valley
Bank.

1.3. SPINOFF. Parent and the Company shall consummate the Spinoff on or
before the Closing. The closing of the Spinoff shall be an express condition to
the closing of the Merger.

1.4. PARENT INVESTMENT. Simultaneously with the Closing, Parent shall
purchase from Purchaser 5,600,000 shares of Purchaser Series B Preferred in
consideration for the payment in immediately available funds of (x) $6,000,000,
less (y) the outstanding principal balance and all accrued but unpaid interest
under the Note. The Note, Security Agreement and any Uniform Commercial Code
financing statements and any other documents executed by Purchaser in connection
with the Loan shall be marked "cancelled" or terminated upon the closing of the
Mestek Investment. Immediately prior to the Closing, Purchaser shall cause to be
filed with the Delaware Secretary of State's office a Certificate of
Designation, Rights and Preferences setting forth the relative rights and
preferences of the Series B Preferred ("Certificate of Designations"). The form
of the Certificate of Designations is set forth as Exhibit 1.4 attached hereto.
As additional consideration for the Mestek Investment, Parent shall receive the
Merger Options, as described in Section 3.3(a) hereof.

1.5. MESTEK WARRANT. At Closing, Purchaser shall deliver the Mestek
Warrant to Parent in the form attached hereto as Exhibit 1.5. Purchaser shall
take all corporate action necessary to reserve for issuance a sufficient number
of shares of Purchaser Common Stock for delivery upon exercise of the Mestek
Warrant. In addition, Purchaser will cause the Warrant Shares to be listed on
the NASDAQ National Market, if not previously listed.

ARTICLE 2.

THE MERGER

2.1. THE MERGER. At the Effective Time (as defined in Section 2.2) and
subject to and upon the terms and conditions of this Agreement, the Pennsylvania
Act and the Delaware Act, the Company shall be merged into Purchaser, the
separate corporate existence of the Company shall cease, and Purchaser shall
continue as the surviving corporation. Purchaser as the surviving corporation
after the Merger shall be governed by the Delaware Act, and is hereinafter
sometimes referred to as the "Surviving Corporation".

2.2. EFFECTIVE TIME. As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Article 8 and Article 9, the parties
hereto shall cause the Merger to be consummated by filing a Certificate of
Merger with the Secretary of State of each of Pennsylvania and Delaware in such
form as required by, and executed in accordance with, the relevant provisions of
the Pennsylvania Act and the Delaware Act (the effective time

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of the last such filing being the "Effective Time"). At the Effective Time,
Purchaser shall deliver to the Company Stockholders in the manner provided in
this Article 2 the certificates evidencing the Merger Shares issued in the
Merger.

2.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Pennsylvania Act and
Delaware Act. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all property, rights, privileges, powers and
franchises of the Company shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company immediately prior to the Effective
Time shall become the debts, liabilities and duties of the Surviving
Corporation.

2.4. SUBSEQUENT ACTIONS.

(a) If, at any time after the Effective Time, the Surviving Corporation
shall consider or be advised that any deeds, bills of sale, assignments,
assurance or any other actions or things are necessary or desirable to (i) vest,
perfect or confirm of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights, properties or assets
of the Company acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or (ii) otherwise to carry out this
Agreement, then the officers and directors of the Surviving Corporation shall be
authorized to (x) execute and deliver, in the name and on behalf of the Company,
all such deeds, bills of sale, assignments and assurances and (y) to take and
do, in the name of and on behalf of each such corporation or otherwise, all such
other actions and things as may be necessary or desirable, to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.

(b) If, at any time after the Effective Time, Parent shall consider or be
advised that any assignments, conveyances, assurance or any other actions or
things are necessary or advisable to (i) vest, perfect or confirm of record or
otherwise in the Company Stockholders their right, title or interest in the
Merger Shares, or (ii) otherwise to carry out this Agreement, then the officers
and directors of Parent shall be authorized to (x) execute and deliver, in the
name and on the behalf of the Surviving Corporation, all such assignments,
conveyances and assurances, and (y) to take and do all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest to the Merger Shares in the Company Stockholders or
otherwise to carry out this Agreement.

2.5. CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS.

(a) Unless otherwise determined by Purchaser, Parent and the Company before
the Effective Time, at the Effective Time the Certificate of Incorporation of
Purchaser, as in effect immediately before the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation.

(b) The Bylaws of Purchaser, as in effect immediately before the Effective
Time, shall be the Bylaws of the Surviving Corporation until thereafter amended
as provided by law, the Certificate of Incorporation of the Surviving
Corporation and such Bylaws.

(c) The directors of Purchaser in office immediately before the Effective
Time shall, by virtue of the approval of this Agreement by the stockholders and
directors of Purchaser

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and the Company, be the directors of the Surviving Corporation, all of whom
shall hold their directorships until the election and qualification of their
respective successors or until their tenure is otherwise terminated by law, or
in accordance with the Bylaws of the Surviving Corporation. Purchaser shall
submit for approval by its stockholders in the joint proxy statement/prospectus
included in the Registration Statement a proposal to elect six (6) directors to
its board of directors, two (2) of whom shall be designees of CareCentric. For a
period of eighteen (18) months after the Effective Time, Purchaser shall submit
for approval by its stockholders in any subsequent proxy statement of the
Surviving Corporation relating to an annual or special meeting of stockholders
at which Directors will be elected a proposal to elect six (6) Directors to its
Board of Directors. Upon consummation of the Merger, the directors of Purchaser
shall appoint six designees of the MCS shareholders (each, an "MCS Designee,"
which term shall include any successor designee, or any replacement designee
selected by the remaining MCS Designees), as designated by the MCS stockholders
prior to the Effective Time and named in the Registration Statement, to be
elected to the board of directors of the Surviving Corporation. For a period of
eighteen (18) months after the Effective Time, (a) Purchaser will use its best
efforts to cause the MCS Designees to be named as nominees for election to the
board of directors in each proxy statement of the Surviving Corporation relating
to an annual or a special meeting of stockholders at which directors will be
elected, and (b) the MCS Major Stockholders will vote their Merger Shares in
favor of all nominees selected in accordance with the provisions hereof and
recommended by the Surviving Corporation board of directors in any such proxy
statement. Notwithstanding the foregoing, the Surviving Corporation may decline
to name an MCS Designee as a nominee for any of the following reasons (each a
"Disqualification"):

(i) the MCS Designee has been convicted of a felony;

(ii) the MCS Designee has been named as a target in an SEC investigation
due to alleged misconduct in connection with the MCS Designee's service as a
director of any publicly held company (including but not limited to Purchaser);

(iii) the SEC has barred the MCS Designee from service on the board;

(iv) the presence of the MCS Designee will cause the Surviving
Corporation's directors and Officers' insurance carrier to decline to provide
coverage at standard rates, unless such coverage may be obtained from the same
carrier and the Company agrees to pay for the additional premiums related to
such MCS Designee's service on the board; or

(v) based on a written opinion from legal counsel, it cannot nominate MCS
Designee without breaching its duties to its stockholders.

Likewise, the Company's stockholders (including the MCS Major Stockholders)
may decline to vote for any nominee to the Board of Directors who is subject to
a Disqualification for any of the reasons stated above.

Upon the appointment of the MCS Designees to the Surviving Corporation
Board of Directors immediately after the Effective Time, a majority of the MCS
Designees during such eighteen (18) month period may remove any MCS Designee
from the list of MCS Designees to be voted upon at a subsequent stockholders
meeting of the Surviving Corporation, provided, however, that such MCS Designee
may not be removed from his office as a Director before the end of his term. If
any MCS Designee is removed or resigns from the Surviving Corporation Board of
Directors during the eighteen (18) month period after the Effective Time, the
remaining MCS Designees shall fill such vacancy.

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2.6. STOCKHOLDERS' MEETING. Purchaser and the Company, acting through
their respective Boards of Directors, shall:

(a) promptly furnish a copy of the proxy statement/prospectus included in
the Registration Statement to each of their stockholders after the Registration
Statement has become effective with the SEC;

(b) duly call, give notice of, convene and hold a special joint meeting of
their stockholders and submit this Agreement and the Merger and any related
matters, as appropriate, to a vote of the Purchaser's and Company's stockholders
as soon as practicable for the purpose of considering and taking action upon
this Agreement and any such related matters; and

(c) use their reasonable best efforts, subject to the provisions of Section
4.16 of this Agreement, to obtain the necessary approval of the Merger by their
stockholders.

2.7. TAX CONSEQUENCES. It is intended that the Merger shall constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"), and that this Agreement shall
constitute a "plan of reorganization" for the purposes of Section 368 of the
Code. The business purpose of the Merger is to combine the business operations
of Purchaser and Company so as to give the Surviving Corporation the critical
mass and resources necessary to compete in an ever-changing marketplace and to
deliver software and service solutions that meet customers' requirements.

ARTICLE 3.

MERGER CONSIDERATION

3.1. CONVERSION OF COMPANY CAPITAL STOCK. The manner and basis of
converting shares of the capital stock of the Company (the "Company Capital
Stock") into shares of common stock of Purchaser, $0.01 par value ("Purchaser
Common Stock"), shall be as follows:

(a) Except as provided in Section 3.2, each share of Company Capital Stock
which shall be outstanding immediately prior to the Effective Time shall at the
Effective Time, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into only the right to receive a number of
shares of Purchaser Common Stock to be computed as set forth on Schedule 3.1(a)
(the "Exchange Ratio"). The shares to be issued with respect to previously
outstanding Company Capital Stock are hereinafter referred to as "Merger
Shares". No Company Capital Stock shall be deemed to be outstanding or to have
any rights other than those set forth above in this Section 3.1 after the
Effective Time.

(b) Each share of Company Capital Stock, if any, held in the treasury of
the Company shall automatically be canceled and extinguished without any
conversion thereof and no payment will be made with respect thereto.

3.2. FRACTIONAL SHARES. No scrip or fractional shares of Purchaser Common
Stock shall be issued in the Merger, nor will any outstanding fractional share
interest entitle the owner thereof to vote, to receive dividends or to exercise
any other right of a stockholder of Purchaser. All fractional shares of
Purchaser Common Stock to which a Company Stockholder immediately prior to the
Effective Time would otherwise be entitled at the

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Effective Time shall be aggregated. If a fractional share results from such
aggregation, such Company Stockholder shall be entitled, at the Effective Time,
to recover cash in lieu of such fractional shares, with the cash amount due to
be computed based on the closing sales prices of the Purchaser Common Stock as
reported on the NASDAQ National Market on the business day next preceding the
day the Merger is consummated.

3.3. STOCK OPTIONS AND WARRANTS.

(a) All stock options of Purchaser (the "options") outstanding at the
Effective Time, as identified on Schedule 3.3(a), shall remain outstanding
following the Effective Time. All warrants of Purchaser ("Warrants") outstanding
at the Effective Time, as identified on Schedule 3.3(a) (including the Mestek
Warrant and the Merger options, whether or not included on Schedule 3.3(a)),
shall remain outstanding following the Effective Time. As part of the
consideration for entering into the Merger, Parent shall receive options to
purchase additional shares of Purchaser Common Stock (the "Merger options")
equal to .8518518 multiplied by the aggregate number of shares of Purchaser
Common Stock issuable upon exercise of the options and Warrants (other than the
Mestek Warrant) and issuable in connection with the Purchaser Conversion Rights,
as set forth in an agreement in the form of Exhibit 3.3(a) attached hereto (the
"Merger Option Agreement"). As part of the consideration for entering into the
Mestek Investment, Parent shall receive the Mestek Warrant.

(b) Purchaser shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Purchaser Common Stock for delivery
upon exercise of the Merger options. In addition, Purchaser will cause such
shares to be listed on the NASDAQ National Market, if not previously listed.

(c) Approval by the stockholders of Purchaser of this Agreement shall
constitute authorization and approval of any and all of the actions described in
this Section 3.3.

3.4. DELIVERY OF MERGER SHARES.

(a) At the Closing (as defined herein), each Company Stockholder's
certificate or certificates that immediately prior to the Effective Time
represented outstanding shares of Company Capital Stock ("Certificate" or
"Certificates") shall be cancelled, and each Company Stockholder shall be issued
the appropriate number of Merger Shares as set forth in Section 3.1(a) hereof.

(b) The Merger Shares will be subject to a restriction on transfer such
that each Company Stockholder receiving Merger Shares may not, directly or
indirectly, without the prior written consent of, or notice of waiver by, Parent
(i) from the date hereof through the date that is two years after the effective
date of the Merger (the "Lockup Period") offer, sell, contract to sell, pledge,
grant any option for the sale of, or otherwise dispose, contract to dispose of
or cause the disposition of, any Merger Shares, except to Parent or any Person
which was a stockholder of Parent on the record date set in connection with the
Spinoff, or (ii) during the Lockup Period exercise any registration rights,
whether held by the recipient of Merger Shares on the Closing Date or thereafter
acquired, with respect to any Merger Shares or any securities convertible into
or exchangeable or exercisable for any Merger Shares. The stock certificates
representing the Merger Shares will include a legend reflecting the Lockup
Period restriction, and a stop transfer order shall be placed with the
Purchaser's transfer agent.

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(c) The Merger Shares shall be registered pursuant to the Registration
Statement. The Merger Shares issuable to the MCS Major Stockholders shall also
have registration rights in accordance with Section 4.1 of this Agreement.

3.5. CLOSING. The closing of the Transactions (the "Closing") shall take
place on or before January 7, 2000, at the offices of Purchaser's counsel in
Atlanta, or another mutually agreed upon location as soon as practicable
following compliance or waiver of the terms, conditions and contingencies
contained herein or such other date as is mutually agreed upon by the parties
hereto (such date to be herein referred to as the "Closing Date"). All
computations, adjustments, and transfers for the purposes hereof shall be
effective as of the close of business on the Closing Date. Each of the parties
will take all lawful actions as may be necessary or appropriate in order to
effectuate the Merger as promptly as possible subject to the satisfaction of the
closing conditions set forth in Articles 8 and 9.

ARTICLE 4.

ADDITIONAL COVENANTS

4.1. REGISTRATION RIGHTS.

(a) Upon request by one (1) or more of the Rights Holders, Purchaser will
use its best efforts to file within 45 days of a request from such Rights
Holders a registration statement with the SEC (utilizing Form S-3 or a successor
form thereto and Rule 415 to the extent available) to register Registrable
Shares as requested by such Rights Holders. Purchaser shall not be required to
file more than three such registration statements (excluding any registration
statement which is delayed pursuant to clause (e)below and through which the
Rights Holders are unable to register eighty percent (80%) or more of the amount
of Registrable Shares that they originally requested to register in such
registration statement), and no such filing shall be made prior to the date
which is six months after the Closing Date.

(b) If Purchaser at any time proposes to register an offering of its
securities under the Securities Act, either for its own account or for the
account of or at the request of one or more Persons holding securities of
Purchaser, Purchaser will:

(i) give written notice thereof to each of the Rights Holders (which shall
include a list of the jurisdictions in which Purchaser intends to attempt to
qualify such securities under the applicable blue sky or other state securities
laws) within 10 days of its receipt of a request from one or more Persons
holding securities of Purchaser to register securities, or from its decision to
effect a registration of securities for its own account, whichever first occurs;
and

(ii) use its best efforts to include in such registration and in any
underwriting involved therein, all the Registrable Shares specified in a written
request by any Rights Holder made within 30 days after receipt of such written
notice from Purchaser, except as set forth in Section 4.1(e) below and subject
to the currently existing piggyback rights referenced in Section 4.1(g).

(c) Without regard to whether the registration statement relating to the
proposed sale of the Registrable Shares is made effective or the proposed sale
of such shares is carried out, Purchaser shall pay the fees and expenses in
connection with any such registration

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including, without limitation, legal, accounting and printing fees and expenses
in connection with such registration statements, the registration filing and
examination fees paid under the Securities Act and state securities laws and the
filing fees paid to the National Association of Securities Dealers, Inc.
Notwithstanding the foregoing, each Rights Holder shall be responsible for the
payment of underwriting discounts and commissions, if any, and applicable
transfer taxes relating to the Registrable Shares sold by such Rights Holder and
for the fees and charges of any attorneys or other advisers retained by such
Rights Holder.

(d) If and whenever pursuant to the provisions of this Section 4.1
Purchaser effects registration of Registrable Shares under the Securities Act of
1933 and state securities laws, Purchaser shall:

(i) Prepare and file with the SEC a registration statement with respect to
such securities and use its best efforts to cause such registration statement to
become and remain effective for a period not to exceed two years after the
filing (but which period shall be extended by the duration of any delay periods
under clause (e)below);

(ii) Use its best efforts to register or qualify the securities covered by
such registration statement under the securities or blue sky laws of such
jurisdictions as any Rights Holder shall reasonably request, and do any and all
other acts and things which may be necessary or advisable (in the reasonable
opinion of such Rights Holder) to enable such Rights Holder to consummate the
disposition thereof; provided, however, that in no event shall Purchaser be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to the service of process
in suits other than those arising out of the offer or sale of the securities
covered by such registration statement in any jurisdictions where it is not now
so subject.

(e) Anything in this Section 4.1 to the contrary notwithstanding:

(i) Purchaser shall not be obligated pursuant to Section 4.1(a) or Section
4.1(b) to effect any registration with respect to any Registrable Shares that
have been sold by a Rights Holder pursuant to Rule 144.

(ii) Purchaser may defer the filing ("Filing") of any registration
statement or suspend the use of a prospectus under a currently effective
registration statement under Section 4.1(a) at its discretion for "Good Cause."
"Good Cause" means either if (1) Purchaser is engaged in active negotiations
with respect to the acquisition of a "significant subsidiary" as defined in
Regulation S-X promulgated by the SEC under the Exchange Act and the Securities
Act which would in the opinion of counsel for Purchaser be required to be
disclosed in the Filing; or (2) in the opinion of counsel for Purchaser, the
Filing would require the inclusion therein of certified financial statements
other than those in respect of Purchaser's most recently ended full fiscal year
and any preceding full fiscal year, and Purchaser may then, at its option, delay
the imposition of its obligations pursuant to Section 4.1(a) hereof until the
earlier of (A) the conclusion or termination of such negotiations, or the date
of availability of such certified financial statements, whichever is applicable,
or (B) 60 days from the date of the registration request.

In the event Purchaser has deferred a requested Filing, pursuant to the
preceding paragraph, such deferral period shall end if Purchaser registers
shares for resale by another stockholder of Purchaser. In the event Purchaser
undertakes an underwritten public offering to issue Purchaser securities for
cash during any period in which a requested Filing has been deferred or if the
registration of which Purchaser gives notice under

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Section 4.1(b)(i) is for an underwritten public offering to issue Purchaser
securities for cash, Purchaser shall include the Registrable Securities in such
underwritten offering subject to (A) the right of the managing underwriters to
object to including such shares, (B) Section 4.1(g), and (C) the condition that
the Rights Holders selling Registrable Shares in such underwritten offering
shall cooperate in the registration process in all material respects, including
execution by such Rights Holders of the underwriting agreement agreed to by
Purchaser and the underwriters.

If the managing underwriter elects to limit the number or amount of
securities to be included in any registration referenced in the preceding
paragraph or in Section 4(b)(ii), all Persons holding securities of the
Purchaser (including the Rights Holders) who hold registration rights and who
have requested registration (collectively, the "Security Holders") shall
participate in the underwritten public offering pro rata based upon the ratio of
the total number or amount of securities to be offered in the offering by the
total number or amount of securities held by each Security Holder (including the
number or amount of securities which each such Security Holder may then be
entitled to receive upon the exercise of any option or warrant, or the exchange
or conversion of any security, held by each Security Holder). If any such
Security Holder would thus be entitled to include more securities than such
Security Holder requested to be registered, the excess shall be allocated among
the other Security Holders pro rata in a manner similar to that described in the
previous sentence. Notwithstanding the foregoing, the holders of registration
rights under the Registration Rights Agreements (as defined in Section 4.1(g))
shall have priority in accordance with the terms of such agreements, if
applicable, but only to the extent that such rights have not been waived or
amended.

(iii) Purchaser may amend any registration statement to withdraw
registration of a Rights Holder's Registrable Shares if that Rights Holder shall
fail or refuse to cooperate in full and in a timely manner with all reasonable
requests relating to such registration and the public offering generally made by
Purchaser, the underwriters (if any), their respective counsel and Purchaser's
auditors.

(f) (i) Notwithstanding anything contained to the contrary in, and in
addition to the indemnification provisions of Section 7.1 hereof, with respect
to any registration statement relating to any Registrable Shares sold by any
Rights Holder, such Rights Holder will indemnify Purchaser and each person, if
any, who controls Purchaser within the meaning of the Securities Act, in
writing, in form and substance acceptable to counsel for Purchaser, against any
and all expenses, claims, damages or liabilities to which Purchaser may become
subject under the Securities Act, Exchange Act, any applicable state securities
laws, or otherwise, insofar as such expenses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any preliminary prospectus, registration
statement, final prospectus or any amendment or supplement thereto, or any
filing made pursuant to the Exchange Act, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make statements contained therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made therein in
reliance upon and in conformity with written information furnished to Purchaser
by such Rights Holder expressly for use in the preparation thereof.

(ii) With respect to any registration statement relating to any Registrable
Shares held by any Rights Holder, Purchaser will indemnify such Rights Holder,
each underwriter of the Registrable Shares, and each person, if any, who
controls such Rights Holder or any

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such underwriter within the meaning of the Securities Act, against all expenses,
claims, damages or liabilities to which such Rights Holder, any such
underwriter, or any such controlling person may become subject, under the
Securities Act, the Exchange Act, any applicable state securities law, or
otherwise, insofar as such expenses, claims, damages or liabilities arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any preliminary prospectus, registration statement,
final prospectus or any amendment or supplement thereto, or any filing under the
Exchange Act, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements contained therein not misleading; provided, however, that
(x) Purchaser shall not be liable to any Rights Holder or to any controlling
person of such Rights Holder in any such case to the extent that such expenses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
Purchaser by such Rights Holder expressly for use in the preparation thereof;
and (y) Purchaser shall not be liable to any underwriter or any controlling
person of such underwriter in any such case to the extent that such expenses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
Purchaser by such underwriter expressly for use in the preparation thereof.

(g) The parties hereto acknowledge that the rights to registration
contained herein shall (i) be subject to the prior rights of holders under those
certain Registration Rights Agreements ("Registration Rights Agreements") dated
October 6, 1996 by and among IMHI Holdings, Inc. (as predecessor in interest to
the Purchaser) and certain shareholders of Purchaser named therein, copies of
which have been provided to Parent, the Right Holders and the Company, but only
to the extent that such rights have not been waived or amended, and (ii) be
equal in priority to the rights of certain parties as described in Section
4.1(g) of that certain Agreement and Plan of Merger dated as of July 12, 1999 by
and among Purchaser, Simione Acquisition Corporation and CareCentric.

(h) Purchaser shall as promptly as practicable prepare and file with the
SEC such amendments and supplements to any registration statement and prospectus
used pursuant to or in connection with this Section 4.1 as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement or for such shorter
period as may be required herein.

(i) Purchaser shall furnish to each selling Rights Holder such number of
conformed copies of its registration statement and of each such amendment and
supplement thereto (in each case including all exhibits, such number of copies
of the prospectus comprised in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, and such other related documents) as such
Rights Holder may reasonably request in order to facilitate the disposition of
the Registrable Shares to be registered.

(j) Purchaser will not grant any right of registration under the Securities
Act relating to any of its equity securities to any person or entity other than
pursuant to this Agreement unless the Rights Holders shall be entitled to have
included in such registration all Registrable Shares requested by the Rights
Holders to be so included prior to the inclusion

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of any securities requested to be registered by the persons or entities entitled
to any such other registration rights, other than securities subject to the
Registration Rights Agreements, which shall have priority (but only to the
extent that such prior rights have not been waived or amended).

(k) For so long as the Rights Holders collectively own securities
representing 20% or more of the voting power of Purchaser on a fully diluted
basis, and except as expressly set forth in Section 4(g) hereof, no other Person
shall be entitled to "piggyback" or participate in any of the demand
registrations that any Rights Holder initiates pursuant to Section 4.1(a)
without such Rights Holder's prior written consent.

(l) For purposes of this Section 4.1, "Rights Holder" shall mean any MCS
Major Stockholder or Parent, and "Rights Holders" shall mean the MCS Major
Stockholders and Parent.

4.2. STOCKHOLDERS' MEETING. Purchaser, acting through its Board of
Directors, shall duly call, give notice of, convene and hold a meeting of its
stockholders and submit this Agreement and the Merger and any related matters,
as appropriate, to a vote of Purchaser's stockholders as soon as practicable for
the purpose of considering and taking action upon this Agreement and any such
related matters, and shall use its reasonable best efforts to obtain the
necessary approval of the Merger by its stockholders.

4.3. BEST EFFORTS TO LIST SHARES AND MAINTAIN S-3 AND NASDAQ NMS STATUS.
Purchaser shall use all of its efforts to ensure that, prior to the Effective
Time, the Registrable Shares will be approved for trading on the NASDAQ National
Market System subject to official notice of issuance. After the Closing,
Purchaser shall use its best efforts to ensure that it shall remain eligible to
(i) register the Registrable Shares on Form S-3 under the Securities Act or any
successor form thereof, and (ii) maintain approval for trading of the
Registrable Shares on the NASDAQ National Market System.

4.4. PROFITWORKS AGREEMENT. Prior to the Effective Time, Parent and the
Company shall consummate a transaction pursuant to which Parent shall acquire
from the Company all of the assets, and assume all of the liabilities, of the
Company's ProfitWorks applications software and related product line
("ProfitWorks Business"). Such acquisition by Parent shall expressly provide
that the Company shall have no further obligation to provide service, pay monies
or otherwise have any future obligations (other than obligations in respect of
the Company's warranties to Parent regarding title to its assets transferred to
Parent) with respect to the ProfitWorks Business.

4.5. PARENT PLAN AND COMPANY PLAN. Parent agrees that it will cause the
account balance, if any, of each Company Employee (as defined in Section 5.18)
under the Mestek, Inc. Savings & Retirement Plan (the "Parent Plan") to be fully
vested as of the Spinoff Date. Subject to and in accordance with Code Section
401(k) and other applicable law, Company Employees shall be eligible to receive
a distribution of their vested account balances under the Parent Plan within a
reasonable time period following the Spinoff Date, and Purchaser and Parent
agree to cooperate with respect to the timing of such distribution, including
distribution of plan loan offset amounts. Purchaser agrees that it will timely
loan funds to Company Employees who have participant loans outstanding under the
Parent Plan as of the Spinoff Date, who become participants in The Simione
Central Holdings, Inc. 401(k) Retirement Plan (the "Purchaser Plan"), and who
elect direct rollovers of their entire remaining account balances under the
Parent Plan (net of outstanding loan balances) to the Purchaser Plan, to permit
such Company Employees to

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roll over their outstanding participant loan balances in full to the Purchaser
Plan within 60 days of the date the plan loan offset amount is distributed from
the Parent Plan. As of the Spinoff Date, the Company shall cease to be an
adopting employer under the Parent Plan and under any other Employee Benefit
Plan sponsored by Parent. Parent and the Company agree to take all actions
necessary to terminate the participation of the Company in the Parent Plan as of
the Spinoff Date. On or prior to the Closing Date, the Company shall terminate
the Employees' Retirement Plan of MCS, Inc., with the manner of such termination
to be conducted in accordance with applicable law.

4.6. COMPANY FINANCIAL STATEMENTS. Parent has delivered to Purchaser
audited Company financial statements for the Company's fiscal years ended
December 31, 1997 and December 31, 1998 and an unaudited balance sheet for the
Company as of June 30, 1999 and the Company's related statement of income,
stockholder's equity and cash flow for the period from January 1, 1999 through
June 30, 1999. By no later than November 15, 1999, Parent or the Company will
deliver to Purchaser an unaudited balance sheet for the Company as of September
30, 1999 and the Company's related statements of income, stockholder's equity
and cash flows for the period from January 1, 1999 through September 30, 1999.

4.7. CONDUCT OF BUSINESS BY PURCHASER AND THE COMPANY PENDING
MERGER. Except as set forth on Schedule 4.7, and except in connection with the
Spinoff, each of Purchaser and the Company covenants and agrees that, unless the
other party shall otherwise consent in writing or except as otherwise set forth
herein, between the date hereof and the Closing, the businesses of the Company
and Purchaser shall be conducted only in, and the Company and Purchaser shall
not take any action except in, the ordinary course of business and in a manner
consistent with past practice; and the Company and Purchaser will use respective
best efforts to preserve intact respective business organizations, to keep
available the services of their present officers, employees and consultants and
to preserve respective present relationships with customers, suppliers and other
persons with which they have significant business relations; provided, however,
that nothing herein shall obligate Purchaser or the Company to pay any
additional compensation to any such persons. Each of the Company and Purchaser
covenants that, between the date hereof and the Closing, it will not, directly
or indirectly, do any of the following without the prior written consent of the
other party:

(a) except in connection with the Spinoff, (i) issue, sell (other than upon
exercise of outstanding options or Warrants, whose terms shall not be changed)
pledge, dispose of, encumber, authorize, or propose the issuance, sale, pledge,
disposition, encumbrance or authorization of any shares of its capital stock of
any class, or any options, warrants, convertible securities or other rights of
any kind to acquire any shares of its capital stock; (ii) amend or propose to
amend its Certificate or Articles of Incorporation or Bylaws; (iii) split,
combine or reclassify any outstanding share of its capital stock, or declare,
set aside or pay any dividend or distribution payable in cash, stock, property
or otherwise with respect to its capital stock; (iv) redeem, purchase or
otherwise acquire or offer to redeem, purchase or otherwise acquire any shares
of its capital stock; or (v) authorize or propose or enter into any contract,
agreement, commitment or arrangement with respect to any of the matters set
forth in this Section 4.7(a);

(b) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) directly or indirectly, any Person or any business owned by such Person;
(ii) except in the ordinary course of business and in a manner consistent with
past practices, sell, pledge, dispose of, or encumber or authorize or propose
the sale, pledge, disposition or encumbrance of any of

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its assets; (iii) enter into any material contract or agreement, except in the
ordinary course of business; (iv) authorize any capital expenditure in excess of
$50,000 or outside the ordinary course of business; or (v) enter into or amend
any contract, agreement, commitment or arrangement with respect to any of the
matters prohibited by this Section 4.7(b);

(c) take any action other than in the ordinary course of business and in a
manner consistent with past practice (none of which actions shall be
unreasonable or unusual) with respect to increasing compensation of any officer,
director, stockholder or employee or with respect to the grant of any severance
or termination pay (otherwise than pursuant to policies in effect on the date
hereof and fully disclosed to the other parties hereto prior to the date hereof)
or with respect to any increase of benefits payable under its severance or
termination pay policies in effect on the date hereof;

(d) make any payments except in the ordinary course of business and in
amounts and in a manner consistent with past practice (none of which payments
shall be unreasonable or unusual), under any employee benefit plan or otherwise
to any of its employees, independent contractors or consultants, enter into any
employee benefit plan, any employment or consulting agreement, grant or
establish any new awards under any such existing employee benefit plan or
agreement, or adopt or otherwise amend any of the foregoing, except as otherwise
required by applicable law;

(e) except in the ordinary course of business or as permitted herein, take
any action to incur or increase prior to Closing any indebtedness for borrowed
money from banks or other financial institutions or cancel, without payment in
full, any notes, loans or receivables except in the ordinary course of business;

(f) directly or indirectly loan or advance monies to any Person under any
circumstance whatsoever except for credit transactions with customers on terms
consistent with past practices; or

(g) fail to pay, perform or discharge as they become due any of its
liabilities or obligations, the failure of which to pay, perform or discharge
would have a Material Adverse Effect; or

(h) do any act or omit to do any act which might reasonably be expected to
cause a breach of any contract, commitment or obligation.

4.8. EXPENSES. All of the expenses previously incurred by Purchaser in
connection with the authorization, preparation, execution and performance of the
Original Agreement and other agreements referred to therein, including, without
limitation, all fees and expenses of agents, representatives, brokers, counsel,
financial printers and accountants for Purchaser, shall be paid by Purchaser.
All of the expenses incurred by Purchaser in connection with the authorization,
preparation, execution and performance of this Agreement, the Note, the Security
Agreement, the Certificate of Designations, the Mestek Warrant, or otherwise
incurred by Purchaser as a result of the Spinoff including, without limitation,
expenses relating to revising the proxy statement relating to the Merger
previously filed with the SEC and converting such filing into the Registration
Statement, and all fees and expenses of agents, representatives, financial
printers, brokers, counsel and accountants for Purchaser in connection
therewith, shall be paid by Parent regardless of whether or not the Merger is
consummated. All reasonable expenses incurred by the Company and/or Parent in
connection with the authorization, preparation, execution and performance of
this Agreement on behalf of the Company and/or Parent and the other

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agreements referred to herein, including without limitation, all reasonable fees
and expenses of advisors, agents, representatives, brokers, counsel and
accountants, shall be paid by Parent or the Company if the Merger is not
consummated, and shall be paid by Parent if the Merger is consummated; provided,
however, that Parent shall not be required to pay costs incurred by Company
personnel in connection with the Transactions; and provided, further, that
Purchaser shall be responsible for one-half (1/2) of all expenses incurred by
the Company (including, without limitation, the expenses of the Company's
accountants, Grant Thornton, LLP) in connection with the preparation of
financial statements required for filing in the Registration Statement and any
valuation reports not yet produced that Purchaser and Parent reasonably
determine are necessary in connection with the Transactions.

4.9. TAX MATTERS.

(a) Parent shall prepare or cause to be prepared and file or cause to be
filed all Tax Returns for the Company for all periods ending on or prior to the
Closing Date which are filed after the Closing Date ("Pre-Closing Tax Periods").
Parent shall permit Purchaser to review and comment on each such Tax Return
described in the preceding sentence prior to filing. Parent shall reimburse
Purchaser for Taxes of the Company with respect to such Pre-Closing Tax Periods
within fifteen (15) days after payment by Purchaser of such Taxes to the extent
such Taxes exceed in the aggregate the reserve for Tax liability (other than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) shown on the face of the Closing Balance Sheet. Purchaser
will remit to Parent within fifteen (15) days of receipt any refunds it may
receive from any Tax Authority with respect to Pre-Closing Tax Periods.

(b) The parties anticipate that the Merger will terminate all Tax periods
for the Company. With respect, however, to any Tax periods of the Company which
are determined to begin before the Closing Date and end after the Closing Date,
Purchaser shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Company. Parent will remit to Purchaser within fifteen
(15) days after the date on which Taxes are paid with respect to such periods an
amount equal to the portion of such Taxes which relates to the portion of such
Taxable period ending on the Closing Date to the extent such Taxes exceed in the
aggregate the reserve for Tax liability (other than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
shown on the face of the Closing Balance Sheet. Purchaser shall reimburse Parent
for any refund of Taxes of the Company with respect to such periods within
fifteen (15) days after receipt by Purchaser of such refund. For purposes of
this Section, in the case of any Taxes that are imposed on a periodic basis and
are payable for a Tax period that includes (but does not end on) the Closing
Date, the portion of such Tax which relates to the portion of such Tax period
ending on the Closing Date shall (i) in the case of any Taxes other than Taxes
based upon or related to income or receipts, be deemed to be the amount of such
Tax for the entire Tax period multiplied by a fraction the numerator of which is
the number of days in the Tax period ending on the Closing Date and the
denominator of which is the number of days in the entire Tax period, and (ii) in
the case of any Tax based upon or related to income or receipts be deemed equal
to the amount which would be payable if the relevant Tax period ended on the
Closing Date. Any credits relating to a Tax period that begins before and ends
after the Closing Date shall be taken into account as though the relevant Tax
period ended on the Closing Date. All determinations necessary to give effect to
the foregoing allocations shall be made in a

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manner consistent with prior practice of the Company. This Section 4.9(b) shall
not apply to the federal income taxes associated with the Parent Affiliated
Group.

(i) Parent and the Company have allocated, and will continue to allocate
through the Closing Date, Federal income taxes in accordance with consolidated
return regulations. Such Federal income tax allocations shall be set forth on
the Closing Balance Sheet. Any tax sharing agreement between Parent and the
Company shall be terminated as of the Closing Date and will have no further
effect for any taxable period. Parent will not elect to retain any net operating
loss carryovers or capital loss carryovers of the Company under Treasury Reg.
ss. 1.1502-20(g).

(ii) Parent will include the income of the Company (including any deferred
income triggered into income by Treasury Reg. ss. 1.1502-13 and Treasury Reg.
ss. 1.1502-14 and any excess loss accounts taken into income under Treasury Reg.
ss. 1.1502-19) on the Parent's consolidated federal income Tax Returns for all
periods through the Closing Date and pay any federal income Taxes attributable
to such income. Purchaser will furnish Tax information within ninety (90) days
after the Closing Date concerning the Company to Parent for inclusion in
Parent's federal consolidated income Tax Return for the period which includes
the Closing Date in accordance with the Company's past custom and practice.
Parent will allow the Purchaser an opportunity to review and comment upon such
Tax Returns (including any amended returns) to the extent that they relate to
the Company. Parent will take no position on such Tax Returns that relate to the
Company that would adversely affect the tax liability of Purchaser after the
Closing Date. The income of the Company will be apportioned to the period up to
and including the Closing Date and the period after the Closing Date by closing
the books of the Company as of the end of the Closing Date.

(iii) Parent will allow Purchaser and its counsel to participate in any
audits of Parent consolidated federal income Tax Returns to the extent that such
returns relate to the Company. Parent will not settle any such audit in a manner
which could adversely affect the tax liability of Purchaser after the Closing
Date without the prior written consent of Purchaser, not to be unreasonably
withheld. Parent will not file an amended consolidated federal income Tax Return
with respect to any income Tax matters of the Company that could adversely
affect the tax liability of Purchaser without the prior written consent of
Purchaser, not to be unreasonably withheld.

(iv) Purchaser and Parent shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other proceeding
with respect to Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Purchaser and
Parent agree (i) to retain all books and records with respect to Tax matters
pertinent to the Company relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Purchaser or Parent, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any Tax Authority, and (ii) to give the other party reasonable
written notice prior to transferring, destroying or discarding any such books
and

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records and, if the other party so requests, Purchaser or Parent, as the case
may be, shall allow the other party to take possession of such books and
records.

(v) For federal income Tax purposes, the parties intend that the Merger
shall be treated as a reorganization within the meaning of Section 368(a)(1)(A)
of the Code. None of the parties hereto shall take a position on any Tax Return
which is inconsistent with such Tax treatment.

4.10. NOTIFICATION OF CERTAIN MATTERS.

(a) Purchaser shall give prompt notice to Parent and the Company of the
following:

(i) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (A) any representation, warranty
or agreement of Purchaser contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the Closing, or (B)
directly or indirectly, any Material Adverse Effect; or

(ii) any material failure of Purchaser, any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.

(b) Parent and the Company shall give prompt notice to Purchaser of the
following:

(i) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (A) any representation or warranty
of Parent or the Company contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to the Closing, or (B)
directly or indirectly, any change in or effect on the business of the Company
that is or will be materially adverse to the business, operations, properties
(including intangible properties), condition (financial or otherwise), assets,
liabilities or regulatory status of the Company, or (C) a material adverse
effect upon the legality, validity, binding effect or enforceability of this
Agreement, or the ability of Parent or the Company to perform its respective
obligations hereunder; or

(ii) Any material failure of Parent or the Company, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.

(c) Notwithstanding the foregoing, the delivery of any notice pursuant to
this Section shall not waive or release Parent, the Company or Purchaser from
its covenants, representations or warranties under this Agreement.

4.11. PUBLIC ANNOUNCEMENTS.

(a) Except for and to the extent of any public announcement or disclosures
relating to the Transactions previously made by any of the parties hereto, as
may be required by law or stock exchange requirements, or as provided in this
Section, each of the Company, Purchaser and Parent agree that until the
consummation of the Transactions, each of such parties will not, and will direct
its directors, officers, employees, representatives and agents who have
knowledge of the Transactions not to, disclose to any Person who is not a
participant in discussions concerning the Transactions (other than Persons whose
consent is required to be obtained hereunder), any of the terms, conditions or
other facts with respect to the Transactions.

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(b) The Company and Parent shall obtain the prior oral or written consent
of Purchaser, and Purchaser shall obtain the prior oral or written consent of
the Company and Parent, before issuing any press release or otherwise making any
public statements with respect to the Transactions and shall not issue any such
press release or make any such public statement prior to receiving such consent,
except as may be, in the good faith belief of the party issuing such press
release, required by law or stock exchange requirements. The parties acknowledge
and agree that Purchaser and Parent expect to issue press releases with respect
to the Transactions immediately after execution of this Agreement, as well as
after the Closing.

4.12. TAX FREE REORGANIZATION. After the Closing, Parent and Purchaser
shall use their best efforts to protect the parties' intended tax treatment of
the Merger as a tax free reorganization, as provided in Section 2.7 hereof.
Purchaser will continue after the Closing the historical business operation of
the Company pursuant to Regulation 1.368-1(d) of the Code.

4.13. ACCESS AND INSPECTION. On reasonable notice, each party hereto shall
provide the other party (or parties) full access during normal business hours
from and after the date hereof until the Closing to all of the books and records
of such party as they relate to the business and affairs of Purchaser or the
Company (or, as to Parent only, the business and affairs of the Company) as may
be requested, in each case for the purpose of making such continuing
investigation of such party and its respective predecessors as it may desire.
Each party shall cause appropriate personnel to assist the other party (or
parties) in such continuing investigation and shall cause personnel, counsel,
accountants and other non-employee representatives to be reasonably available to
such party (or parties) in connection with its continuing investigation.

4.14. ONGOING BUSINESS. Prior to Closing, neither Purchaser nor the
Company will engage in any activities outside the ordinary course of business,
except as contemplated herein.

4.15. CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Subject to compliance
with applicable law, Purchaser, Parent and the Company will (a) cooperate with
one another (i) in promptly determining whether in connection with this
Agreement any filings, including qualifications to conduct business as a foreign
corporation, are required to be made with, or consents, approvals, permits or
authorizations are required to be obtained from, any Governmental Authority
under any federal, state or foreign law or regulation or from any other third
party under any Material Contract (as defined herein) and (ii) in promptly
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such consents, approvals, permits or
authorizations and (b) provide one another with copies of all filings made by
such party with any Governmental Authority in connection with this Agreement. In
the event that the parties determine that a filing under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR") is required to consummate
the Transactions, Purchaser and Parent shall each bear one-half (1/2) of the
cost of the filing fee.

4.16. NO SOLICITATION.

(a) In consideration of the expenses to be incurred by each of the parties
hereto in negotiating toward this Agreement and in conducting its due diligence
investigation, each of the parties hereto shall not, directly or indirectly,
through any officer, director, employee, financial advisor, representative or
agent of such party, (i) solicit, initiate, or

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encourage any inquiries or proposals that constitute, or could reasonably be
expected to lead to, a proposal or offer for a merger, consolidation, business
combination, sale or transfer of substantial assets, sale of any shares of
capital stock (including without limitation by way of a tender offer),
acquisition of shares of capital stock or assets, or similar transaction
involving it or any of its subsidiaries, other than the Transactions (any of the
foregoing inquiries or proposals being referred to in this Agreement as an
"Acquisition Proposal"), or (ii) engage in negotiations or discussions
concerning, or provide any non-public information to any person or entity
relating to, any Acquisition Proposal, or agree to or recommend any Acquisition
Proposal; provided, however, that nothing contained in this Section 4.16(a)
shall prevent any of the parties hereto or its respective Board of Directors,
from (A) furnishing non-public information, or entering into discussions or
negotiations, with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal by such person or entity or agreeing to or
recommending an unsolicited bona fide written Acquisition Proposal to its
stockholders, if and only to the extent that (1) the Board of Directors of such
party believes in good faith (after consultation with its advisors) that such
Acquisition Proposal is reasonably capable of being completed on the terms
proposed and, after taking into account the strategic benefits anticipated to be
derived from the Acquisition Proposal, would, if consummated, result in a
transaction more favorable to such party over the long term than the transaction
contemplated by this Agreement, and such Board of Directors determines in good
faith after receipt of an opinion from outside legal counsel to the effect that
such action is likely necessary for such Board of Directors to comply with its
fiduciary duties to stockholders under applicable law and (2) prior to
furnishing such non-public information to, or entering into discussions or
negotiations with, such person or entity, such Board of Directors receives from
such person or entity an executed confidentiality agreement with terms no more
favorable to such party than those contained in the Confidentiality Agreement;
or (B) complying with Rule 14e-2 promulgated under the Exchange Act with regard
to an Acquisition Proposal.

(b) Notwithstanding the foregoing, nothing in this Agreement shall prohibit
Parent from soliciting, negotiating, agreeing to or consummating any Acquisition
Proposals involving subsidiaries or divisions of Parent other than the Company.

(c) If either Purchaser or the Company enters into a definitive agreement
pursuant to an Acquisition Proposal, such party shall be deemed to have
terminated this Agreement and shall pay the non-terminating party a termination
fee within three business days of its entering into such a definitive agreement.
The termination fee shall be the sum of (i) the non-terminating party's
out-of-pocket costs incurred in connection with the Transactions through the
date of termination, not to exceed $500,000 in the aggregate, and (ii)
$1,200,000. The payment of a termination fee pursuant to this subsection, which
is agreed to be a fair estimate of the expenses and damages which would be
suffered by the non-terminating party in such event, shall be the sole and
exclusive remedy of the non-terminating party against the terminating party and
its respective directors, officers, employees, attorneys, agents, advisors or
other representatives (including its stockholders), with respect to the
occurrences giving rise to such payment. Should any court of competent
jurisdiction determine that, consistent with applicable law, the termination fee
set forth above is unenforceable or otherwise contrary to public policy, the
parties hereto agree to any reformation of this Agreement by a court that would
result in such termination fee being upheld and given effect.

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(d) Parent and the Company hereby consent to Purchaser's negotiation, but
not consummation, of potential acquisitions that Purchaser has disclosed in
writing to Parent at or prior to the date hereof.

4.17. REGISTRATION.

(a) The Company shall furnish to Purchaser such information, (including
information about the Company and its affiliates), as may be necessary to enable
Purchaser to prepare and file with the SEC a registration statement on Form S-4
under the Securities Act, and the rules and regulations promulgated thereunder,
in respect of the Purchaser Common Stock to be issued by reason of the Merger,
the Mestek Warrant, and the Purchaser Common Stock reserved for issuance under
the Mestek Warrant (such registration statement, including the proxy
statement/prospectus included therein which is to be furnished to the holders of
the Company Capital Stock and/or to the holders of Purchaser Common Stock, in
each case together with any amendments or supplements thereto, being referred to
in this Agreement as the "Registration Statement"). The Company covenants that
the Company Information (as defined below) included in the Registration
Statement shall not, at the time the Registration Statement is declared
effective, at the time the proxy statement/prospectus contained therein is first
mailed to the Company's stockholders, or at the time of the meeting of the
Company's stockholders held to approve the Merger Agreement, contain any
statement which, at the time and in light of the circumstances under which it is
made, is false or misleading with respect to any material fact, or omit to state
a material fact necessary in order to make the statements therein not false or
misleading. If at any time prior to the Effective Time any event or circumstance
should come to the attention of the Company with respect to the Company
Information that is required to be set forth in an amendment or supplement to
the Registration Statement, the Company shall promptly notify Purchaser and
shall assist Purchaser in appropriately amending or supplementing the
Registration Statement in the manner contemplated in Section 4.17(d) below. An
amendment or supplement may be accomplished, to the extent permitted by law,
rule or regulation, by including such information in a filing under the Exchange
Act that is incorporated by reference into the Registration Statement. The
Company covenants that the Registration Statement insofar as it relates to
information concerning the Company, or any of its businesses, assets, directors,
officers, or stockholders or any other affiliates or other matters pertaining to
the Company that is supplied by the Company for inclusion in the Registration
Statement, including by incorporation by reference to SEC filings (the "Company
Information") shall comply as to form and substance in all material respects
with the applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and regulations
thereunder; except that the Company shall have no liability or obligation for
any information other than the Company Information.

(b) The Company shall instruct its accountants, Grant Thornton, LLP, to
deliver and shall use its reasonable best efforts to cause such accountants to
deliver to Purchaser letters dated at the time the Registration Statement
becomes effective and as of the Closing Date, addressed to Purchaser, each
containing such matters as are customarily contained in auditors' letters
regarding information about the Company included in the Registration Statement,
which auditors' letters shall be in form and substance reasonably satisfactory
to Purchaser.

(c) Purchaser shall file the Registration Statement and use its reasonable
best efforts to have it declared effective by the SEC as promptly as
practicable, and shall use its reasonable best efforts to take any action
required to be taken to comply in all material

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respects with any applicable federal or state securities laws in connection with
the issuance of Purchaser Common Stock in the Merger, the Mestek Warrant, and
the Purchaser Common Stock reserved for issuance under the Mestek Warrant;
except that such covenant of Purchaser is made, as to those portions of the
Registration Statement containing or required to contain Company Information,
assuming and relying solely on timely and full compliance with Sections 4.17(a)
and 4.17(b). Purchaser will, in a timely manner, provide the Company with copies
of any written communications to or from the SEC and notify the Company of any
material oral communications to or from the SEC with respect to the Registration
Statement or the transactions contemplated thereby.

(d) Purchaser covenants that the information included in the Registration
Statement shall not, at the time the Registration Statement is declared
effective, at the time the proxy statement/prospectus contained therein is first
mailed to the Company's stockholders, or at the time of the meeting of the
Company's stockholders held to approve the Merger, contain any statement which,
at the time and in light of the circumstances under which it is made, is false
or misleading with respect to any material fact, or omit to state a material
fact necessary in order to make the statements therein not false or misleading;
except that Purchaser makes no covenant as to those portions of the Registration
Statement containing or required to contain Company Information. If at any time
prior to the Effective Time any event or circumstance should come to the
attention of Purchaser that is required to be set forth in an amendment or
supplement to the Registration Statement, Purchaser shall use its reasonable
efforts to amend or supplement appropriately the Registration Statement. An
amendment or supplement may be accomplished, to the extent permitted by law,
rule or regulation, by including such information in a filing under the Exchange
Act that is incorporated by reference into the Registration Statement.

(e) The Registration Statement and all other documents required to be filed
by Purchaser with the SEC in connection with the Transactions shall comply as to
form and substance in all material respects with the applicable requirements of
the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder; except that Purchaser shall have no
liability or obligation for any failure to comply with such requirements arising
out of the Company Information.

(f) Purchaser shall use all reasonable efforts to take such action as may
be necessary to ensure that the requirements of Rule 144(c) under the Securities
Act are satisfied so as to enable any Affiliates of the Company to offer or sell
the Purchaser Stock received by them in the Merger pursuant to paragraph (d) of
Rule 145 (subject to compliance with the provisions of paragraphs (e), (f) and
(g) of Rule 144).

(g) Each party will provide to the other parties, or their counsel, drafts
of the information related to or customarily provided by such party to be
included in the Registration Statement on Form S-4 and will generally cooperate
with each other in the preparation thereof.

4.18. AFFILIATES. The Company shall use its reasonable best efforts to
cause each person that is an Affiliate of the Company on the date immediately
preceding the date of the filing of the Registration Statement to deliver to
Purchaser on such date a written agreement substantially in the form attached
hereto as Exhibit 4.18 ("Rule 145 Letter"), and, in the event that any other
person becomes an affiliate of the Company thereafter, to cause such person to
provide a Rule 145 Letter to Purchaser at the Closing.

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4.19. DISSENTERS RIGHTS. In the event that, in obtaining Company
Stockholder Approval, holders of five percent (5%) or more of the aggregate
number of shares of issued and outstanding Company Capital Stock shall have
exercised (and not withdrawn) dissenters rights under the Pennsylvania Act, the
parties shall negotiate in good faith to amend this Agreement to provide for the
payment of cash amounts to Company Stockholders who perfect (and do not
withdraw) their dissenters rights under the Pennsylvania Act, and the payment of
related legal expenses and court costs, in a manner mutually satisfactory to
Purchaser and Parent.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND PARENT

In order to induce Purchaser to enter into this Agreement and consummate
the Transactions, each of the Company and Parent represents and warrants to
Purchaser as follows, each of which warranties and representations is material
to and relied upon by Purchaser:

5.1. ORGANIZATION AND AUTHORITY. The Company is a corporation duly
organized and validly existing under the laws of the Commonwealth of
Pennsylvania. The states in which the Company is qualified to do business are
set forth on Schedule 5.1. The Company has all necessary corporate power and
authority to own, lease and operate its properties and conduct its business as
it is currently being conducted. The Company does not own, directly or
indirectly, any equity interest in any corporation, partnership, joint venture,
or other entity and does not have any subsidiaries, which for purposes of this
Agreement means any corporation or other legal entity of which the Company
(either alone or through or together with any other Affiliate of the Company)
owns, directly or indirectly, more than 20% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.

5.2. CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. The Company has
full corporate power and authority to execute and deliver this Agreement and
each of the Closing Documents to which the Company is or will be a party and to
consummate the Transactions. The Board of Directors of the Company at a meeting
duly called and held has determined that the Merger is advisable and in the best
interest of the Company and has approved it, and has recommended it to the
Company's stockholders. The directors of the Company have also duly approved and
authorized the execution and delivery of this Agreement and each of the Closing
Documents to which the Company is or will be a party and the consummation of the
Transactions, and, other than the requisite stockholder vote, no other corporate
proceeding on the part of the Company is necessary to approve the Transactions.
Assuming that this Agreement and each of the Closing Documents to which
Purchaser is a party constitutes a valid and binding agreement of Purchaser,
this Agreement and each of the Closing Documents to which the Company or Parent
is or will be a party constitutes, or will constitute when executed and
delivered, a valid and binding agreement of the Company or Parent, as the case
may be, in each case enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency or
other similar laws relating to the enforcement of creditors' rights generally
and by the application of general principles of equity. The duly elected
officers and directors of the Company are set forth on Schedule 5.2 attached

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hereto. Copies of the Articles of Incorporation, the Bylaws and all minutes of
the Company are contained in the minute books of the Company. True, correct and
complete copies of the minute books of the Company have been delivered to
Purchaser.

5.3. OWNERSHIP OF ASSETS. The Company has title to all of its properties
and assets, other than leased or licensed property, in each case free and clear
of any liens, security interests, claims, charges, options rights of tenants or
other encumbrances, except as disclosed or reserved against in Schedule 5.3 or
reserved against in the Company Financial Statements (as defined in Section
5.8(a) (to the extent and in the amounts so disclosed or reserved against)) and
except for liens arising from current Taxes not yet due and payable and other
liens not having a Material Adverse Effect. All buildings, machinery and
equipment owned or leased by the Company are in good operating condition and
reasonable state of repair, subject only to ordinary wear and tear. The Company
has not received any notice of violation of any applicable zoning regulation,
ordinance or other law, regulation or requirement relating to its operations and
properties, whether owned or leased. All of the accounts receivable of the
Company as of the Effective Time will reflect actual transactions and will have
arisen in the ordinary course of business.

5.4. NO CONFLICT; REQUIRED CONSENTS. Schedule 5.4 lists all third party
consents or approvals required with respect to the Company for consummation of
the Transactions, which consents the Company agrees to use its best reasonable
efforts to obtain. Assuming all such consents, approvals, authorizations and
other actions have been obtained or taken and assuming the appropriate filings
are made by Purchaser, Parent and the Company to effectuate the Merger under the
Pennsylvania Act and the Delaware Act, and under the Securities Act and the
Exchange Act, the execution and delivery by the Company of this Agreement and
the Closing Documents and the consummation by the Company of the Transactions do
not and will not (a) require the consent, approval or action of, or any filing
or notice to, any corporation, firm, Person or other entity or any public,
governmental or judicial authority (except for such consents, approvals,
actions, filings or notices the failure of which to make or obtain will not in
the aggregate have a Material Adverse Effect); (b) violate the terms of any
instrument, document or agreement to which the Company is a party, or by which
the Company or the property of the Company is bound, or be in conflict with,
result in a breach of or constitute (upon the giving of notice or lapse of time
or both) a default under any such instrument, document or agreement, or result
in the creation of any lien upon any of the property or assets of the Company
except for such violations, conflicts, breaches and defaults which, individually
or in the aggregate, would not have a Material Adverse Effect; (c) violate the
Company's Articles of Incorporation or Bylaws; or (d) violate any order, writ,
injunction, decree, judgment, ruling, law, rule or regulation of any federal,
state, county, municipal, or foreign court or Governmental Authority applicable
to the Company, or the business or assets of the Company, except for such
violations which would not, individually or in the aggregate, have a Material
Adverse Effect. The Company is not subject to, or a party to, any mortgage,
lien, lease, agreement, contract, instrument, order, judgment or decree or any
other material restriction of any kind or character which would prevent or
hinder the continued operation of the business of the Company after the Closing
on substantially the same basis as theretofore operated.

5.5. CAPITALIZATION. The authorized and outstanding capital stock of the
Company is set forth on Schedule 5.5, which shall be updated at or prior to
Closing to reflect the Spinoff, and no shares of the Company's Capital Stock are
held in the treasury of the Company. All outstanding Company Capital Stock has
been duly authorized, and is validly issued, fully paid and nonassessable. No
party has any preemptive (whether statutory or

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contractual) rights in any capital stock of the Company. The Company has no
convertible securities, options, warrants, or other contracts, commitments,
agreements, understandings, arrangements or restrictions by which it is bound to
issue any additional shares of its capital stock or other securities. All
securities of the Company were offered and sold in compliance with applicable
Federal and state securities laws. Each and every dividend of the Company, if
any, whether paid in cash or other property, has been declared and paid in
compliance with applicable law, and the Company has no further obligation with
respect to such payment.

5.6. COMPLIANCE WITH LAWS; FILINGS WITH THE SEC.

(a) The Company is in compliance with, and the Company operated any
businesses previously owned by it in compliance with all applicable laws,
orders, rules and regulations of all Governmental Authorities, including
applicable Environmental Laws, except for such noncompliance as would not,
individually or in the aggregate, have a Material Adverse Effect. The Company
has not received notice of any noncompliance with the foregoing.

(b) Neither the Company nor any other Persons providing services for the
Company have, to the knowledge of the Company or Parent, engaged in any
activities which would be a basis for exclusion from any otherwise available
Medicare, Medicaid or other federally funded programs under Section 1320a - 7a
of Title 42 of the United States Code, or prohibited under any applicable
portions of Section 1320a - 7b of such Title 42, or regulations promulgated
thereunder, or related state or local statutes or regulations, including any
"fraud and abuse" provisions, except where such noncompliance has and will have,
individually and in the aggregate, no Material Adverse Effect.

(c) Without limiting the foregoing, the Company and any other person or
entity for whose conduct the Company is legally held responsible are in
compliance with all applicable federal, state, regional, local or provincial
laws, statutes, ordinances, judgments, rulings and regulations relating to any
matters of pollution, protection of the environment, health or safety, or
environmental regulation or control (collectively, "Environmental Laws"), except
where such noncompliance has and will have, individually or in the aggregate, no
Material Adverse Effect. Neither the Company, nor any other person or entity for
whose conduct the Company is legally responsible has received any notice,
demand, request for information, or administrative inquiry relating to any
violation of an Environmental Law or the institution of any suit, action, claim,
or proceedings alleging such violation or investigation by any Governmental
Authority or any third party of any such violation.

(d) Parent has made all filings with the SEC that it has been required to
make under the Securities Act and the Exchange Act since January 1, 1996
(collectively, the "Public Reports"), and has done so in a timely manner. Each
of the Public Reports has complied with the Securities Act and the Exchange Act
in all material respects. None of the Public Reports, as of their respective
dates, to the Parent's knowledge, contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.

5.7. LICENSES AND PERMITS. The Company holds and is in compliance with all
licenses, permits, concessions, grants, franchises, approvals and authorizations
necessary or required for the use or ownership of its assets and the operation
of its business, except where the failure to hold such license, permit,
concession, grant, franchise, approval or

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authorization has and will have, individually or in the aggregate, no Material
Adverse Effect. The Company has not received notice of any violations in respect
of any such licenses, permits, concessions, grants, franchises, approvals or
authorizations, which violations, individually or in the aggregate, would have a
Material Adverse Effect. No proceeding is pending or, to the knowledge of the
Company, threatened, which seeks revocation or limitation of any such licenses,
permits, concessions, grants, franchises, approvals or authorizations, nor is
there any basis therefor, the revocation or limitation of which, individually or
in the aggregate, would have a Material Adverse Effect.

5.8. LIABILITIES AND OBLIGATIONS OF THE COMPANY.

(a) Attached hereto as Schedule 5.8 are true, correct and complete copies
of the Company's unaudited balance sheets as of December 31, 1997 and December
31, 1998, and unaudited balance sheet as of June 30, 1999, and the related
statements of income, stockholders' equity and cash flows for the years and six
months then ended, together, except in the case of the financial statements
dated June 30, 1999, with the reports of Grant Thornton thereon (collectively,
the "Company Financial Statements"). The Company Financial Statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, fairly present in all material respects the financial
condition of the Company as of the respective dates thereof, and disclose all
liabilities of the Company, whether absolute, contingent, accrued or otherwise,
existing as of the date thereof that are of a nature required to be reflected in
financial statements prepared in accordance with generally accepted accounting
principles, except for liabilities that, individually or in the aggregate, would
not have a Material Adverse Effect; provided, however, that the interim
financial statements are subject to normal year-end adjustments which are not
expected to be material in amount.

(b) The Company has no liability or obligation (whether accrued, absolute,
contingent or otherwise) including, without limitation, any liability that might
result from an audit of its Tax Returns by any Tax Authority, except for (i)
liabilities that, individually or in the aggregate, would not have a Material
Adverse Effect, (ii) the liabilities and obligations of the Company that are
disclosed or reserved against in the Company Financial Statements or Schedule
5.8 hereto, to the extent and in the amounts so disclosed or reserved against,
and (iii) liabilities incurred or accrued in the ordinary course of business
since June 30, 1999 and liabilities incurred in connection with the
Transactions.

(c) Except as disclosed in the Company Financial Statements or Schedule
5.8, the Company is not in default with respect to any liabilities or
obligations, except for defaults that, individually or in the aggregate, would
not have a Material Adverse Effect and all such liabilities or obligations shown
or reflected in the Company Financial Statements or Schedule 5.8 and such
liabilities incurred or accrued subsequent to June 30, 1999 were incurred in the
ordinary course of business except as indicated in Schedule 5.8, except for
liabilities and obligations that, individually or in the aggregate, would not
have a Material Adverse Effect.

5.9. TAXES.

Except as to any noncompliance with any of the following provisions that
would not, individually or in the aggregate, have a Material Adverse Effect:

(a) The Company has timely filed all Tax Returns that it was required to
file. All such Tax Returns were correct and complete in all respects. Except as
set forth in

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Schedule 5.9, the Company currently is not the beneficiary of any extension of
time within which to file any Tax Return. There are no liens or other security
interests on any of the assets of any of the Company 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.

(b) The Company has timely paid, withheld and/or remitted to the
appropriate Tax Authority all Taxes required to be paid, withheld and/or
remitted on or before the Closing Date. The reserves for Taxes to be reflected
on the Closing Balance Sheet (other than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) will be
adequate to cover all Tax liabilities, contingent or otherwise, as of the
Closing Date.

(c) No employee of the Company or any of its subsidiaries responsible for
Tax matters has received notice that any Tax Authority proposes to assess any
additional Taxes against the Company for any period for which Tax Returns have
been filed. There is no dispute or claim concerning any Tax liability of the
Company either (i) claimed or raised by any Tax Authority in writing, or (ii) as
to which any employee of the Company or the Parent responsible for Tax matters
has knowledge based upon personal contact with any agent of such Tax Authority.

(d) Except as set forth in Schedule 5.9, the Company has not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

(e) The Company has not filed a consent under Section 341(f) of the Code
concerning collapsible corporations. The Company has not made any payments which
have not yet been reported on any Tax Return, is not obligated to make any
payments, and is not a party to any agreement that under certain circumstances
could obligate the Company to make any payments that will not be deductible
under Section 280G of the Code. The Company has disclosed on its federal income
Tax Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the
Code.

(f) The Company is not a party to any Tax allocation or sharing agreement
other than concerning federal income taxes for an Affiliated Group the common
parent of which is Parent (such group, the "Parent Affiliated Group"). The
Company has not been a member of an Affiliated Group or filed or been included
in a combined, consolidated or unitary Tax Return other than a consolidated
federal income Tax Return for the Parent Affiliated Group. The Company has no
contractual obligation to indemnify any other person with respect to the payment
of any Taxes of the other person which could have a Material Adverse Effect.
With respect to the Parent Affiliated Group:

(i) The Parent Affiliated Group has filed all federal income Tax Returns
that it was required to file for each taxable period during which the Company
was a member of the group. All such Tax Returns were correct and complete in all
material respects in so far as they relate to the Company. All income Taxes owed
by such Affiliated Group (whether or not shown on any Tax Return) have been paid
for each taxable period during which the Company was a member of the group;
provided however, that Taxes for the taxable year which includes the Closing
Date shall be paid when due.

(ii) No employee of any of Parent and any of its subsidiaries responsible
for Tax matters expects any authority to assess any additional income Taxes
against the Parent Affiliated Group for any taxable period during which the
Company was a member of the

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group. There is no dispute or claim concerning any income Tax liability of the
Parent Affiliated Group for any taxable period during which the Company was a
member of the group either (A) claimed or raised by any authority in writing or
(B) as to which any employees of any of Parent and its subsidiaries responsible
for Tax matters has knowledge based upon personal contact with any agent of such
authority. Except as set forth on Schedule 5.9, the Parent Affiliated Group has
not waived any statute of limitations in respect of any income Taxes or agreed
to any extension of time with respect to an income Tax assessment or deficiency
for any taxable period during which the Company was a member of the group.

5.10. CONTRACTS, AGREEMENTS AND INSTRUMENTS GENERALLY. Schedule 5.10
hereto consists of a true and complete list of all contracts, agreements,
commitments and other instruments (identified by title, date and parties)
(whether oral or written) to which the Company is a party that involve a receipt
or an expenditure by the Company or require the performance of services or
delivery of goods to, by, through, on behalf of or for the benefit of the
Company, which in each case relates to a contract, agreement, commitment or
instrument that requires (or is reasonably expected to require) payments or
provides (or is reasonably expected to provide) for receipts in excess of
$25,000 from the Closing Date until the first (1st) anniversary thereof.

The contracts, agreements, commitments and other instruments listed or
required to be listed on Schedule 5.10 or listed on a Schedule referred to in
Section 5.12 hereof are herein referred to as the "Material Contracts". All of
the Material Contracts are in full force and effect.

None of the Company, and, to the knowledge of the Company and Parent, any
other party to any such contract, commitment or arrangement has breached any
provision of, or is in default under, the terms thereof, the breach of or
default under which would, individually or in the aggregate, have a Material
Adverse Effect; and there are no existing facts or circumstances known to the
Company or Parent that would prevent the work in process of the Company or its
contracts and agreements from maturing upon performance by the Company into
collectible accounts receivable in the aggregate in amounts consistent with
historical experience. Except as set forth on Schedule 5.10 or as reserved
against in the Company Financial Statements, there are no contracts or
commitments that require the performance of services or provision of goods by
the Company at a direct cost for each such contract or commitment known by the
Company to be in excess of the revenue to be derived pursuant to the terms of
such contract or commitment, which, individually, or in the aggregate, would
have a Material Adverse Effect. Except for terms specifically described in
Schedule 5.10, the Company has not received any payment from any contracting
party in connection with or as an inducement for entering into any contract,
agreement, policy or instrument except for payment for actual services rendered
or to be rendered by the Company consistent with amounts historically charged
for such services.

5.11. CUSTOMER CONTRACTS. With respect to each contract, agreement,
commitment or other instrument in effect to which the Company is a party with
any customer of the Company (each, a "Customer Contract") all performance
warranties with respect to computer software represented in writing as owned by
or proprietary to the Company ("Owned Software") made by the Company in any
Customer Contract, including warranties with respect to capacity, availability,
downtime and response time, and Year 2000 compliance have been satisfied in all
material respects upon the terms and conditions and to the extent provided for
in such Customer Contract, except for failures to satisfy which, individually or
in the aggregate, would not have a Material Adverse Effect.

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5.12. INTELLECTUAL PROPERTY; COMPUTER SOFTWARE.

(a) Schedule 5.12(A) hereto sets forth (i) a complete and correct list of
all trademarks, trade names, service marks, service names, and brand names
(whether or not any of the same are registered), and all patents and registered
copyrights and all applications for the foregoing, if any, (setting forth the
registration, issue or serial number of the patents and registered copyrights
and a description of the same) applicable to or used in the business of the
Company; (ii) the owner of such intellectual property and any registration
thereof or application thereof; and (iii) a complete list of all licenses
granted by or to the Company with respect to any of the above (identified by
title, date and parties) (not inclusive of Customer Contracts). All such
trademarks, trade names, service marks, service names, brand names, copyrights
and patents are owned by the Company free and clear of all liens, claims,
security interests and encumbrances, except for such liens, claims, security
interests and encumbrances as would, individually or in the aggregate, not have
a Material Adverse Effect. Except as set forth on Schedule 5.12(A), the Company
is not currently in receipt of any notice of any violation of, and, to the
Company's and Parent's knowledge, the Company is not violating the rights of
others in any trademark, trade name, service mark, copyright, patent, trade
secret, know-how or other intangible asset, except such violations as,
individually or in the aggregate, would not have a Material Adverse Effect.

(b) Schedule 5.12(B) contains a complete and accurate list of all Owned
Software. Except as set forth on Schedule 5.12(B), the Company has title to the
Owned Software, free and clear of all claims, including claims or rights of
employees, agents, consultants, inventors, customers, licensees or other parties
involved in the development, creation, marketing, maintenance, enhancement or
licensing of such computer software. Except as set forth on Schedule 5.12(B) and
except for commercially available, over-the-counter "shrink-wrap" software, the
Owned Software is not dependent on any Licensed Software (as defined in
subsection (c) below) in order to operate fully in the manner in which it is
intended. The source code to the Owned Software has not been published or
disclosed to any other parties, except as set forth in the Customer Contracts or
as set forth on Schedule 5.12(B), and except pursuant to contracts requiring
such other parties to keep the Owned Software confidential. To the knowledge of
the Company and Parent, no such other party has breached any such obligation of
confidentiality.

(c) Schedule 5.12(C) contains a complete and accurate list of all software
(other than commercially available over-the-counter "shrink-wrap" software)
under which the Company is a licensee, lessee or otherwise has obtained the
right to use (the "Licensed Software"). The Company has the right and license to
use, sublicense, modify and copy Licensed Software to the extent set forth in
the respective license, lease or similar agreement pursuant to which the
Licensed Software is licensed to the Company, free of any other limitations or
encumbrances, and the Company is in compliance with all applicable provisions of
such agreements, except for failures to comply which, individually or in the
aggregate, would not have a Material Adverse Effect. Except as disclosed on
Schedule 5.12(C), none of the Licensed Software has been incorporated into or
made a part of any Owned Software or any other Licensed Software. The Company
has not published or disclosed any Licensed Software to any other party except
in accordance with and as permitted by any license, lease or similar agreement
relating to the Licensed Software and except pursuant to contracts requiring
such other parties to keep the Licensed Software confidential. No party to whom
the Company has disclosed Licensed Software has, to the knowledge of the Company
and Parent, breached such obligation of

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confidentiality, except for such publications and disclosures that, individually
or in the aggregate, would not have a Material Adverse Effect.

(d) The Owned Software and Licensed Software and commercially available
over-the-counter "shrink-wrap" software constitute all software used in the
businesses of the Company (collectively, the "Company Software"). The
Transactions will not cause a breach or default under any licenses, leases or
similar agreements relating to the Company Software or impair Purchaser's
ability to use the Company Software in the same manner as such computer software
is currently used by the Company. To the knowledge of the Company and Parent,
(i) the Company is not infringing any intellectual property rights of any other
person or entity with respect to the Company Software, and (ii) no other person
or entity is infringing any intellectual property rights of the Company with
respect to the Company Software, except for infringements that, individually or
in the aggregate, would not have a Material Adverse Effect.

5.13. LABOR MATTERS. Except as set forth on Schedule 5.13, within the last
three (3) years the Company has not been the subject of any known union activity
or labor dispute, nor has there been any strike of any kind called or, to the
knowledge of the Company or Parent, threatened to be called against the Company.
The Company has not violated any applicable federal or state law or regulation
relating to labor or labor practices, except where such violation has and will
have, individually or in the aggregate, no Material Adverse Effect. Schedule
5.13 sets forth a true, correct and complete list of employer loans or advances
from the Company to their respective employees. The Company is in compliance
with all applicable requirements of the Immigration and Nationality Act of 1952,
as amended by the Immigration Reform and Control Act of 1986 and the regulations
promulgated thereunder (hereinafter collectively referred to as the "Immigration
Laws"), except where such noncompliance has and will have, individually or in
the aggregate, no Material Adverse Effect.

5.14. WORK-IN-PROCESS, ORDERS AND RETURNS.

(a) Except as set forth on Schedule 5.14(A), as of the date hereof, except
for any claims specifically disclosed on other Schedules hereto, to the
Company's and the Parent's knowledge, there are no claims nor does the Company
reasonably expect to make or receive any claims to terminate Customer
Agreements, or material licenses, services, or other orders, or for refunds
relating to Customer Agreements, licenses, maintenance agreements, or other fees
by reason of alleged dissatisfaction with the Company's capabilities or
performance (including those related to Company Software), or defective or
unsatisfactory services or products, except as would not result in, individually
or in the aggregate, a Material Adverse Effect.

(b) Except as set forth on Schedule 5.14(B), neither the Company nor Parent
has been notified that the consummation of the Transactions will result in any
cancellations or withdrawals of accepted and unfilled orders for services or
Company Software, or maintenance or other services and the Company will inform
Purchaser promptly upon receipt of any notification to that effect received
after the date hereof, except for cancellations or withdrawals that,
individually or in the aggregate, would not have a Material Adverse Effect. To
the knowledge of the Company and Parent, neither the execution of this Agreement
nor the consummation of the Transactions will result in any material
cancellations or withdrawals of accepted and unfilled orders for the license or
sales of Company Software, services or merchandise, except for cancellations or

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withdrawals that, individually or in the aggregate, would not have a Material
Adverse Effect.

5.15. ABSENCE OF CERTAIN CHANGES. Except as reflected on Schedule 5.15, or
elsewhere in this Agreement or specifically identified on any Schedules hereto,
and since June 30, 1999, the Company has not and at the Closing Date will not
have:

(a) Suffered a Material Adverse Effect, or become aware of any
circumstances which might reasonably be expected to result in such a Material
Adverse Effect; or suffered any material casualty loss to the Assets (whether or
not insured), except for losses that, individually or in the aggregate, would
not have a Material Adverse Effect;

(b) Incurred any obligations specifically related to the Assets (including
Customer Agreements), except in the ordinary course of business consistent with
past practices;

(c) Permitted or allowed any of the Assets to be mortgaged, pledged, or
subjected to any lien or encumbrance, except for liens for Taxes not yet due and
payable and liens and encumbrances that, individually or in the aggregate, would
not have a Material Adverse Effect;

(d) Written down the value of any inventory, contract or other intangible
asset, or written off as uncollectible any notes or accounts receivable or any
portion thereof, except for write-downs and write-offs in the ordinary course of
business, consistent with past practice and at a rate no greater than during the
latest complete fiscal year; cancelled any other debts or claims, or waived any
rights of substantial value, or sold or transferred any of its material
properties or assets, real, personal, or mixed, tangible or intangible, except
in the ordinary course of business and consistent with past practice, and except
for those that, individually or in the aggregate, would not have a Material
Adverse Effect;

(e) Sold, licensed or transferred or agreed to sell, license or transfer,
any of the Assets, except in the ordinary course of business and consistent with
past practice;

(f) To the Company's and Parent's knowledge, received notice of any pending
or threatened adverse claim or an alleged infringement of proprietary material,
whether such claim or infringement is based on trademark, copyright, patent,
license, trade secret, contract or other restrictions on the use or disclosure
of proprietary materials;

(g) Incurred obligations to refund money to customers, except in the
ordinary course of business, all of which will have no Material Adverse Effect;

(h) Become aware of any event, condition or other circumstance relating
solely to the Assets (as opposed to any such event, condition, or circumstance
which is, for example, national or industry-wide in nature) which might
reasonably be expected to materially adversely affect the Assets;

(i) Made any capital expenditures or commitments, any one of which is more
than $50,000, for additions to property, plant, or equipment;

(j) Made any material change in any method of accounting or accounting
practice;

(k) Paid, loaned, guaranteed, or advanced any material amount to, or sold,
transferred, or leased any material properties or assets (real, personal, or
mixed, tangible or intangible) to, or entered into any agreement, arrangement,
or transaction with any of the Company's officers or directors, or any business
or entity in which any officer or director of

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the Company, or any affiliate or associate of any of such Persons has any direct
or indirect interest; or

(l) Agreed to take any action described in this Section 5.15.

5.16. LEASES. Schedule 5.16 contains a list of all leases pursuant to
which the Company leases real or personal property, and copies of all such
leases have been delivered to Purchaser. All such leases are in full force and
effect, and except as set forth on Schedule 5.16, no event has occurred which is
a default or which with the passage of time will constitute a default by the
Company thereunder, nor has any such event occurred to the knowledge of the
Company or Parent which is a default by any other party to such lease. All
property leased by the Company or Parent as lessee is in the possession of the
Company. Except as indicated in Schedule 5.16, no consent of any lessor is
required in connection with the Transactions.

5.17. LITIGATION. Except as set forth in Schedule 5.17, (i) there are no
actions, proceedings or regulatory agency investigations against the Company or,
to the Company or Parent's knowledge, involving the Assets pending (served) or
threatened against the Company or against Parent, (ii) neither the Company nor
Parent knows of any such action, proceeding or investigation against the
Company, and (iii) no such action, proceeding, or regulatory agency
investigation has been pending (served) during the three-year period preceding
the date of this Agreement.

5.18. EMPLOYEE BENEFIT PLANS: EMPLOYEES.

Except as to any noncompliance with any of the following provisions that
would not, individually, or in the aggregate, have a Material Adverse Effect:

(a) Schedule 5.18 sets forth a list of each "employee benefit plan" (as
defined by Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), and any other bonus, profit sharing, pension,
compensation, deferred compensation, stock option, stock purchase, fringe
benefit, severance, scholarship, disability, sick leave, vacation, bonus,
retention, or other plan, agreement, or arrangement (each such plan, agreement
or arrangement is referred to herein as an "Employee Benefit Plan", and
collectively, the "Employee Benefit Plans") that is currently in effect for the
benefit of (i) directors or employees of the Company, (ii) former directors or
employees of the Company, or (iii) beneficiaries of anyone described in (i) or
(ii) (collectively, "Company Employees") or with respect to which the Company or
any "ERISA Affiliate" (hereby defined to include any trade or business, whether
or not incorporated, other than the Company, which has employees who are treated
pursuant to Section 4001(a)(14) of ERISA and/or Section 414 of the Code as
employees of a single employer which includes the Company) has any obligation on
behalf of any Company Employee. Except as disclosed on Schedule 5.18 attached
hereto, there are no other benefits to which any Company Employee is entitled
for which the Company has any obligation.

(b) Parent has delivered to Purchaser, with respect to each Employee
Benefit Plan, true and complete copies of (i) the documents embodying the plan,
including, without limitation, the current plan documents and documents creating
any trust maintained pursuant thereto, all amendments, group annuity contracts,
insurance contracts, the most recent summary plan description, if any, and
employee handbooks, (ii) annual reports including but not limited to Forms 5500,
990 and 1041 for the last two (2) years for the plan and any related trust;
(iii) any communication involving the plan or any related trust to or from the
Internal Revenue Service ("IRS"), Department of Labor ("DOL"),

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Pension Benefit Guaranty Corporation ("PBGC") or any other governmental
authority since January 1, 1998, but excluding any IRS determination letter
submission; and (iv) the most recent determination letter received from the IRS
pertaining to any Employee Benefit Plan intended to qualify under Sections
401(a) or 501(c)(9) of the Code.

(c) The Company has no obligation to contribute to or provide benefits
pursuant to, and has no other liability of any kind with respect to, (i) a
"multiple employer welfare arrangement" (within the meaning of Section 3(40) of
ERISA), or (ii) a "plan maintained by more than one employer" (within the
meaning of Section 413(c) of the Code).

(d) Except as otherwise set forth on Schedule 5.18 attached hereto, the
Company is not liable for, and neither the Company nor Purchaser will be liable
for, any contribution, tax, lien, penalty, cost, interest, claim, loss, action,
suit, damage, cost assessment or other similar type of liability or expense of
any ERISA Affiliate (including predecessors thereof) with regard to any Employee
Benefit Plan maintained, sponsored or contributed to by an ERISA Affiliate (if a
like definition of Employee Benefit Plan were applicable to the ERISA Affiliate
in the same manner as it applies to the Company), including, without limitation,
withdrawal liability arising under Title IV, Subtitle E, Part 1 of ERISA,
liabilities to the PBGC, or liabilities under Section 412 of the Code or Section
302(a) of ERISA.

(e) The Company has complied in all respects with the applicable
requirements of Section 4980B of the Code and Section 601 et seq. of ERISA (such
statutory provisions and predecessors thereof are referred to herein
collectively as "COBRA").

(f) With respect to each Employee Benefit Plan and except as otherwise set
forth on Schedule 5.18 attached hereto:

(i) each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the IRS to
the effect that the Employee Benefit Plan is qualified under Section 401 of the
Code and that any trust maintained pursuant thereto is exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred or, to
the knowledge of the Company and Parent, is expected to occur that caused or
could reasonably be expected to cause the loss of such qualification or
exemption or the imposition of any penalty or tax liability;

(ii) all payments required by the Employee Benefit Plan or by law
(including all contributions, insurance premiums, premiums due the PBGC or
intercompany charges) with respect to all periods through the date hereof have
been made;

(iii) there are no violations of or failures to comply with ERISA and the
Code with respect to the filing of applicable reports, documents, and notices
regarding the Employee Benefit Plan with DOL, the IRS, the PBGC or any other
governmental authority, or any of the assets of the Employee Benefit Plan or any
related trust;

(iv) no claims, lawsuit, arbitration or other action has been asserted or
instituted or, to the knowledge of the Company and Parent, threatened in writing
against the Employee Benefit Plan, any trustee or fiduciaries thereof, the
Company or any ERISA Affiliate, any director, officer or employee thereof, or
any of the assets of the Employee Benefit Plan or any related trust, except for
routine claims for benefits;

(v) any bonding required with respect to the Employee Benefit Plan in
accordance with the applicable provisions of ERISA has been obtained and is in
full force and effect;

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(vi) the Employee Benefit Plan complies in all respects with and has been
maintained and operated in all respects in accordance with its respective terms
and the terms and the provisions of applicable law, including, without
limitation, ERISA and the Code (including rules and regulations thereunder);

(vii) no "prohibited transaction" (within the meaning of Section 4975 of
the Code and Section 406 of ERISA) has occurred or is reasonably expected to
occur with respect to the Employee Benefit Plan (and the transactions
contemplated by this Agreement will not constitute or directly or indirectly
result in such a "prohibited transaction") which has subjected or, to the
knowledge of Company and Parent, could reasonably be expected to subject the
Company, any ERISA Affiliate or Purchaser, or any officer, director or employee
of the Company, any ERISA Affiliate or Purchaser, or the Employee Benefit Plan
trustee, administrator or other fiduciary, to a tax or penalty on prohibited
transactions imposed by either Section 502 of ERISA or Section 4975 of the Code
or any other liability with respect thereto, which tax, penalty or liability
could have a Material Adverse Effect;

(viii) to the knowledge of the Company and Parent, the Employee Benefit
Plan is not under audit or investigation by the IRS or the DOL or any other
governmental authority and no such completed audit, if any, has resulted in the
imposition of any tax, interest or penalty.

(g) The Company is not subject to any liens, excise or other taxes under
ERISA, the Code or other applicable law relating to any Employee Benefit Plan.

(h) None of the Employee Benefit Plans is subject to Title IV of ERISA.

(i) In the case of any Employee Benefit Plan that is a Multiemployer Plan,
the Company has no withdrawal liability under Part 1 of Subtitle E of Title IV
of ERISA as a result of either a "complete withdrawal" (as defined in Section
4203 of ERISA) or a "partial withdrawal" (as defined in Section 4205 of ERISA)
by the Company from such Employee Benefit Plan occurring on or prior to the date
hereof.

(j) The consummation of the Transactions will not give rise to any
liability for any employee benefits, including, without limitation, liability
for severance pay, unemployment compensation, termination pay or withdrawal
liability, or accelerate the time of payment or vesting or increase the amount
of compensation or benefits due to any Company Employee.

(k) No amounts payable under any Employee Benefit Plan will fail to be
deductible for federal income tax purposes by virtue of Section 280G of the Code
as such Section of the Code is currently in effect.

(l) Except as set forth on Schedule 5.18, attached hereto, no Employee
Benefit Plan provides for any health benefits (other than under COBRA, the
Federal Social Security Act or any Employee Benefit Plan qualified under Section
401(a) of the Code) to any Company Employee who, at the time the health benefit
is to be provided, is a former director or former employee of the Company (or a
beneficiary of any such person), nor, to the knowledge of the Company and
Parent, have any representations, agreements, covenants or commitments been made
to provide such health benefits.

(m) Since June 30, 1999 and through the date hereof, except as set forth on
Schedule 5.18 attached hereto or as required by applicable law or consistent
with past practice, neither the Company nor any ERISA Affiliate has, nor will
it, (i) institute or

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agree to institute any new employee benefit plan or practice for any Company
Employee, (ii) make or agree to make any change in any Employee Benefit Plan,
(iii) make or agree to make any increase in the compensation payable or to
become payable by the Company or any ERISA Affiliate to any Company Employee,
other than regularly scheduled increases, or (iv) except pursuant to this
Agreement and except for contributions required to provide benefits pursuant to
the provisions of the Employee Benefit Plans, pay or accrue or agree to pay or
accrue any bonus, percentage of compensation, or other like benefit to, or for
the credit of, any Company Employee.

(n) Any contribution, insurance premium, excise tax, interest charge or
other liability or charge imposed or required with respect to any Employee
Benefit Plan which is attributable to any period or any portion of any period
prior to the Closing shall, to the extent required by GAAP, be reflected as a
liability on the Closing Balance Sheet, including, without limitation, any
portion of the matching contribution required with respect to the Parent Plan
for the plan year ending after the Closing which is attributable to elective
contributions made by Company Employees in such plan prior to the Closing.

5.19. ACCURACY OF REPRESENTATIONS. No representation or warranty by the
Company or Parent contained in this Agreement and no statement contained in any
certificate or schedule furnished to Purchaser pursuant to the provisions hereof
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein not misleading. To the
knowledge of the Company and Parent, there is no current event or condition of
any kind or character pertaining to the Company that may reasonably be expected
to have a Material Adverse Effect, except as disclosed herein.

5.20. BROKERS FEES AND EXPENSES. Neither the Company nor Parent or any
affiliate thereof has retained or utilized the services of any advisor, broker,
finder or intermediary, or paid or agreed to pay any fee or commission to any
other Person or entity for or on account of the Transactions, or had any
communications with any Person or entity which would obligate Purchaser to pay
any such fees or commissions.

5.21. BANK ACCOUNTS. Schedule 5.21 contains a true, complete and correct
list showing the name and location of each bank or other institution in which
the Company has any deposit account or safe deposit box, together with a listing
of account numbers and names of all Persons authorized to draw thereon or have
access thereto.

5.22. BUSINESS PRACTICES. Neither the Company nor anyone acting on its
behalf has made any payment of funds of the Company prohibited by law, and no
funds of the Company have been set aside to be used for any payment prohibited
by law.

5.23. INSURANCE. Schedule 5.23 lists all of the insurance policies
maintained by the Company, which Schedule includes the name of the insurance
company, the policy number, a description of the type of insurance covered by
such policy, the dollar limit of the policy, and the annual premiums for such
policy. The Company shall maintain such insurance policies in full force and
effect at least through the Closing Date.

5.24. TAX FREE REORGANIZATION. To the knowledge of the Company there is no
fact pertaining to it that would prevent the Merger from qualifying as a
tax-free reorganization under the Code.

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5.25. NO EXISTING DISCUSSION. As of the date hereof, the Company is not
engaged directly or indirectly, in any discussion or negotiations with any other
party with respect to an Acquisition Proposal.

ARTICLE 6.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

In order to induce the Company and Parent to enter into this Agreement and
consummate the Transactions, Purchaser represents and warrants to the Company
and Parent as follows, each of which representations and warranties is material
to and relied upon by the Company and Parent:

6.1. ORGANIZATION OF PURCHASER. Purchaser is a corporation duly organized
and validly existing under the laws of the State of Delaware. The states in
which Purchaser is qualified to do business are set forth on Schedule 6.1.
Purchaser has all necessary corporate power and authority to own, lease and
operate its properties and conduct its business as it is currently being
conducted. Except as set forth on Schedule 6.1, Purchaser does not own, directly
or indirectly, any equity interest in any corporation, partnership, joint
venture, or other entity and does not have any subsidiaries.

6.2. CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION. Purchaser has full
corporate power and authority to execute and deliver this Agreement and each of
the Closing Documents to which Purchaser is or will be a party and to consummate
the Transactions. The board of directors of Purchaser has duly approved and
authorized the execution and delivery of this Agreement and each of the Closing
Documents to which it is or will be a party and the consummation of the
Transactions and has resolved to submit the Merger to and recommend approval of
the Merger by the stockholders of Purchaser, and, except for shareholder
approval, no other corporate proceedings on the part of Purchaser are necessary
to approve and authorize the execution and delivery of this Agreement and such
Closing Documents and the consummation of the Transactions. Assuming that this
Agreement and each of the Closing Documents to which Purchaser is a party
constitutes a valid and binding agreement of Company and/or Parent, as the case
may be, this Agreement and each of the Closing Documents to which Purchaser is a
party constitutes, or will constitute when executed and delivered, a valid and
binding agreement of Purchaser in each case enforceable against Purchaser in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency or other similar laws relating to the
enforcement of creditors' rights generally and by the application of general
principles of equity.

6.3. NO CONFLICT; CONSENTS. Except as set forth on Schedule 6.3 hereto,
and except for the applicable requirements of the Securities Act, the Exchange
Act, state blue sky laws and the rules of the NASDAQ Stock Market, Inc., the
execution and delivery by Purchaser of this Agreement, the Closing Documents to
which it is or will be a party and the consummation by Purchaser of the
Transactions do not and will not (a) require the consent, approval or action of,
or any filing or notice to, any corporation, firm, Person or other entity or any
public, governmental or judicial authority; (b) violate the terms of any
instrument, document or agreement to which Purchaser is a party, or by which
Purchaser or the property of Purchaser is bound, or be in conflict with, result
in a breach of or constitute (upon the giving of notice or lapse of time, or
both) a default under any such instrument, document or agreement or result in
the creation of any lien upon any of the

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property or assets of Purchaser, except for such violations, conflicts, breaches
and defaults which, individually or in the aggregate, would not have a Material
Adverse Effect; (c) violate Purchaser's Certificate of Incorporation or Bylaws;
or (d) violate any order, writ, injunction, decree, judgment, ruling, law, rule
or regulation of any federal, state, county, municipal, or foreign court or
Governmental Authority applicable to Purchaser, the business or assets of
Purchaser, or the Merger, except for such violations which would not,
individually or in the aggregate, have a Material Adverse Effect. Purchaser is
not subject to, or a party to, any mortgage, lien, lease, agreement, contract,
instrument, order, judgment or decree or any other material restriction of any
kind or character which would prevent or hinder the continued operation of the
business of Purchaser after the Closing on substantially the same basis as
theretofore operated.

6.4. OWNERSHIP OF ASSETS. Purchaser has title to all of its properties and
assets, other than leased or licensed property, in each case free and clear of
any liens, security interests, claims, charges, options rights of tenants or
other encumbrances, except as disclosed or reserved against in Schedule 6.4 or
reserved against in Purchaser's financial statements (as described in Section
6.8(a) (to the extent and in the amounts so disclosed or reserved against)) and
except for liens arising from current Taxes not yet due and payable and other
liens not having a Material Adverse Effect. All buildings, machinery and
equipment owned or leased by Purchaser are in good operating condition and
reasonable state of repair, subject only to ordinary wear and tear. Purchaser
has not received any notice of violation of any applicable zoning regulation,
ordinance or other law, regulation or requirement relating to its operations and
properties, whether owned or leased. All of the accounts receivable of Purchaser
as of the Effective Time will reflect actual transactions and will have arisen
in the ordinary course of business.

6.5. CAPITALIZATION. The authorized capital stock of Purchaser consists of
10,000,000 shares of preferred stock, $.001 par value per share, of which
3,034,521 shares of Series A Preferred Stock are outstanding, and 20,000,000
shares of common stock, $.001 par value per share, of which 8,741,713 shares are
outstanding as of the date hereof. In addition, rights to receive 32,392 shares
of Purchaser Common Stock, relating to unconverted shares from Purchaser's 1997
reverse stock split ("Purchaser Conversion Rights"), are outstanding as of the
date hereof. All outstanding shares of Purchaser Common Stock and Purchaser's
Series A Preferred Stock have been duly authorized, and are validly issued,
fully paid and nonassessable. Except as set forth in Schedule 6.5, no party has
any preemptive (whether statutory or contractual) rights in any capital stock of
Purchaser. Except for the Purchaser Conversion Rights, and the options and the
Warrants identified on Schedule 3.3(a), Purchaser has no convertible securities,
options, warrants, or other contracts, commitments, agreements, understandings,
arrangements or restrictions by which it is bound to issue any additional shares
of its capital stock or other securities. All securities of Purchaser were
offered and sold in compliance with applicable Federal and state securities
laws. Each and every dividend of the Purchaser, if any, whether paid in cash or
other property, has been declared and paid in compliance with applicable law,
and the Purchaser has no further obligation with respect to such payment.

6.6. COMPLIANCE WITH LAWS.

(a) Purchaser is in compliance with, and Purchaser operated any businesses
previously owned by it in compliance with all applicable laws, orders, rules and
regulations of all Governmental Authorities, including applicable Environmental
Laws, except for such noncompliance as would not, individually or in the
aggregate, have a Material Adverse Effect. Purchaser has not received notice of
any noncompliance with the foregoing.

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(b) Neither Purchaser nor any other Persons providing services for
Purchaser have, to the knowledge of Purchaser, engaged in any activities which
would be a basis for exclusion from any otherwise available Medicare, Medicaid
or other federally funded programs under Section 1320a - 7a of Title 42 of the
United States Code, or prohibited under any applicable portions of Section
1320a - 7b of such Title 42, or regulations promulgated thereunder, or related
state or local statutes or regulations, including any "fraud and abuse"
provisions, except where such noncompliance has and will have, individually and
in the aggregate, no Material Adverse Effect.

(c) Without limiting the foregoing, Purchaser and any other person or
entity for whose conduct Purchaser is legally held responsible are in compliance
with all Environmental Laws, except where such noncompliance has and will have,
individually or in the aggregate, no Material Adverse Effect. Neither Purchaser,
nor any other person or entity for whose conduct Purchaser is legally
responsible has received any notice, demand, request for information, or
administrative inquiry relating to any violation of an Environmental Law or the
institution of any suit, action, claim, or proceedings alleging such violation
or investigation by any Governmental Authority or any third party of any such
violation.

6.7. LICENSES AND PERMITS. Purchaser holds and is in compliance with all
licenses, permits, concessions, grants, franchises, approvals and authorizations
necessary or required for the use or ownership of its assets and the operation
of its business, except where the failure to hold such license, permit,
concession, grant, franchise, approval or authorization has and will have,
individually or in the aggregate, no Material Adverse Effect. Purchaser has not
received notice of any violations in respect of any such licenses, permits,
concessions, grants, franchises, approvals or authorizations, which violations,
individually or in the aggregate, would have a Material Adverse Effect. No
proceeding is pending or, to the knowledge of Purchaser, threatened, which seeks
revocation or limitation of any such licenses, permits, concessions, grants,
franchises, approvals or authorizations, nor is there any basis therefor, the
revocation or limitation of which, individually or in the aggregate, would have
a Material Adverse Effect.

6.8. LIABILITIES AND OBLIGATIONS OF PURCHASER.

(a) Attached hereto as Schedule 6.8 are true, correct and complete copies
of Purchaser's balance sheets as of December 31, 1997 and December 31, 1998, and
unaudited balance sheet as of June 30, 1999, and the related statements of
income, stockholders' equity and cash flows for the years and six months then
ended, together (except in the case of the financial statements dated June 30,
1999) with the reports of independent public accountants thereon (collectively,
the "Purchaser Financial Statements"). The Purchaser Financial Statements are
complete, have been prepared in accordance with generally accepted accounting
principles, consistently applied, fairly present in all material respects the
financial condition of Purchaser as of the respective dates thereof, and
disclose all liabilities of Purchaser, whether absolute, contingent, accrued or
otherwise, existing as of the date thereof that are of a nature required to be
reflected in financial statements prepared in accordance with generally accepted
accounting principles, and except for liabilities that, individually or in the
aggregate, would not have a Material Adverse Effect; provided, however, that the
interim financial statements are subject to normal year-end adjustments which
are not expected to be material in amount.

(b) Purchaser has no liability or obligation (whether accrued, absolute,
contingent or otherwise) including, without limitation, any liability that might
result from an audit of its

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Tax Returns by any Tax Authority, except for (i) liabilities that, individually
or in the aggregate, would not have a Material Adverse Effect, (ii) the
liabilities and obligations of Purchaser that are disclosed or reserved against
in the Purchaser Financial Statements or Schedule 6.8 hereto, to the extent and
in the amounts so disclosed or reserved against, and (iii) liabilities incurred
or accrued in the ordinary course of business since June 30, 1999 and
liabilities incurred in connection with the Transactions.

(c) Except as disclosed in the Purchaser Financial Statements or Schedule
6.8, Purchaser is not in default with respect to any liabilities or obligations,
except for defaults that, individually or in the aggregate would not have a
Material Adverse Effect, and all such liabilities or obligations shown or
reflected in the Purchaser Financial Statements or Schedule 6.8 and such
liabilities incurred or accrued subsequent to June 30, 1999 were incurred in the
ordinary course of business except as indicated in Schedule 6.8, and except for
liabilities and obligations, that, individually or in the aggregate, would not
have a Material Adverse Effect.

6.9. TAXES.

Except as to any noncompliance with any of the following provisions that
would not, individually or in the aggregate, have a Material Adverse Effect:

(a) All Tax Returns required to be filed by Purchaser and/or its Affiliated
Group on or before the date hereof have been timely filed with the appropriate
Tax Authorities in all jurisdictions in which such Tax Returns are required to
be filed and all amounts shown as owing thereon have been paid. All Taxes which
have become due or payable on or prior to the date hereof, whether disputed or
not, have been paid in full. All Taxes which are required to be collected or
withheld by Purchaser and its Affiliated Group on or prior to the date hereof
have been so collected or withheld. All deposits required by law to be made by
Purchaser and its Affiliated Group on or prior to the date hereof with respect
to employees' withholding Taxes have been duly made. No employee of Purchaser or
any member of its Affiliated Group responsible for Tax matters (i) has received
notice from any Tax Authority of the assessment or proposed assessment of Tax
liabilities, disallowances, or assessments which remain unpaid and, (ii) has
knowledge of any fact or facts which exist(s) or has existed which would
constitute grounds for the assessment of any Tax liability. There is no
examination currently in progress of the Tax Returns of Purchaser or its
Affiliated Group by any Taxing Authority for which any employee of Purchaser or
any of its Affiliated Group has received any notice, and, to the knowledge of
employees of Purchaser or any member of its Affiliated Group responsible for Tax
matters based upon personal contact with any agent of such Tax Authority, no
such examination has been threatened by any Taxing Authority.

(b) Purchaser has not filed a consent under Section 341(f) of the Code
concerning collapsible corporations. Purchaser has not made any payments which
have not yet been reported on any Tax Return, is not obligated to make any
payments, and is not a party to any agreement that under certain circumstances
could obligate the Purchaser and its Affiliated Group to make any payments that
will not be deductible under Section 280G of the Code. Purchaser and its
Affiliated Group has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Section 6662 of the Code.

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(c) Neither Purchaser nor its Affiliated Group has any contractual
obligation to indemnify any other person with respect to the payment of any
Taxes of the other person which could have a Material Adverse Effect.

(d) Purchaser and its Affiliated Group's financial statements for the year
ended December 31, 1998 and the unaudited interim quarter ending June 30, 1999
reflect an adequate reserve for deferred taxes established for timing
differences between book and tax accounting income/asset basis. Purchaser and
its Affiliated Group have not recognized a net tax asset for the future benefit
of net operating loss carryovers and research and experimentation tax credit
carryovers.

6.10. CONTRACTS, AGREEMENTS AND INSTRUMENTS GENERALLY. Schedule 6.10
hereto consists of a true and complete list of all contracts, agreements,
commitments and other instruments (identified by title, date and parties)
(whether oral or written) to which Purchaser is a party that involve a receipt
or an expenditure by Purchaser or require the performance of services or
delivery of goods to, by, through, on behalf of or for the benefit of Purchaser,
which in each case relates to a contract, agreement, commitment or instrument
that requires (or is reasonably expected to require) payments or provides (or is
reasonably expected to provide) for receipts in excess of $25,000 from the
Closing Date until the first (1st) anniversary thereof.

The contracts, agreements, commitments and other instruments listed or
required to be listed on Schedule 6.10 or listed on a Schedule referred to in
Section 6.12 hereof are herein referred to as the "Material Contracts". All of
the Material Contracts are in full force and effect.

None of the Company, and, to the knowledge of Purchaser, any other party to
any such contract, commitment or arrangement has breached any provision of, or
is in default under, the terms thereof, the breach of or default under which
would, individually or in the aggregate, have a Material Adverse Effect; and
there are no existing facts or circumstances known to Purchaser that would
prevent the work in process of Purchaser or its contracts and agreements from
maturing upon performance by Purchaser into collectible accounts receivable in
the aggregate in amounts consistent with historical experience. Except as set
forth on Schedule 6.10 or as reserved against in the Purchaser Financial
Statements, there are no contracts or commitments that require the performance
of services or provision of goods by Purchaser at a direct cost for each such
contract or commitment known by Purchaser to be in excess of the revenue to be
derived pursuant to the terms of such contract or commitment, which,
individually or in the aggregate, would have a Material Adverse Effect. Except
for terms specifically described in Schedule 6.10, Purchaser has not received
any payment from any contracting party in connection with or as an inducement
for entering into any contract, agreement, policy or instrument except for
payment for actual services rendered or to be rendered by Purchaser consistent
with amounts historically charged for such services.

6.11. CUSTOMER CONTRACTS. With respect to each Customer Contract, all
performance warranties with respect to Owned Software made by Purchaser in any
Customer Contract, including warranties with respect to capacity, availability,
downtime and response time, and Year 2000 compliance have been satisfied in all
material respects upon the terms and conditions and to the extent provided for
in such Customer Contract, except for failures to satisfy which, individually or
in the aggregate, would not have a Material Adverse Effect.

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6.12. INTELLECTUAL PROPERTY; COMPUTER SOFTWARE.

(a) Schedule 6.12(A) hereto sets forth (i) a complete and correct list of
all trademarks, trade names, service marks, service names, and brand names
(whether or not any of the same are registered), and all patents and registered
copyrights and all applications for the foregoing, if any, (setting forth the
registration, issue or serial number of the patents and registered copyrights
and a description of the same) applicable to or used in the business of
Purchaser; (ii) the owner of such intellectual property and any registration
thereof or application thereof; and (iii) a complete list of all licenses
granted by or to Purchaser with respect to any of the above (identified by
title, date and parties) (not inclusive of Customer Contracts). All such
trademarks, trade names, service marks, service names, brand names, copyrights
and patents are owned by Purchaser free and clear of all liens, claims, security
interests and encumbrances, except for such liens, claims, security interests
and encumbrances as would, individually or in the aggregate, not have a Material
Adverse Effect. Except as set forth on Schedule 6.12(A), Purchaser is not
currently in receipt of any notice of any violation of, and, to Purchaser's
knowledge, Purchaser is not violating the rights of others in any trademark,
trade name, service mark, copyright, patent, trade secret, know-how or other
intangible asset, except such violations as, individually or in the aggregate,
would not have a Material Adverse Effect.

(b) Schedule 6.12(B) contains a complete and accurate list of all Owned
Software. Except as set forth on Schedule 6.12(B), Purchaser has title to the
Owned Software, free and clear of all claims, including claims or rights of
employees, agents, consultants, inventors, customers, licensees or other parties
involved in the development, creation, marketing, maintenance, enhancement or
licensing of such computer software. Except as set forth on Schedule 6.12(B) and
except for commercially available, over-the-counter "shrink-wrap" software, the
Owned Software is not dependent on any Licensed Software (as defined in
subsection (c) below) in order to operate fully in the manner in which it is
intended. The source code to the Owned Software has not been published or
disclosed to any other parties, except as set forth in the Customer Contracts or
as set forth on Schedule 6.12(B), and except pursuant to contracts requiring
such other parties to keep the Owned Software confidential. To the knowledge of
Purchaser, no such other party has breached any such obligation of
confidentiality.

(c) Schedule 6.12(C) contains a complete and accurate list of all Licensed
Software. Purchaser has the right and license to use, sublicense, modify and
copy Licensed Software to the extent set forth in the respective license, lease
or similar agreement pursuant to which the Licensed Software is licensed to
Purchaser, free of any other limitations or encumbrances, and Purchaser is in
compliance with all applicable provisions of such agreement, except for failures
to comply which, individually or in the aggregate, would not have a Material
Adverse Effect. Except as disclosed on Schedule 6.12(C), none of the Licensed
Software has been incorporated into or made a part of any Owned Software or any
other Licensed Software. Purchaser has not published or disclosed any Licensed
Software to any other party except in accordance with and as permitted by any
license, lease or similar agreement relating to the Licensed Software and except
pursuant to contracts requiring such other parties to keep the Licensed Software
confidential. No party to whom Purchaser has disclosed Licensed Software has, to
the knowledge of Purchaser, breached such obligation of confidentiality, except
for such publications and disclosures that, individually or in the aggregate,
would not have a Material Adverse Effect.

(d) The Owned Software and Licensed Software and commercially available
over-the-counter "shrink-wrap" software constitute all software used in the
businesses of

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Purchaser (collectively, the "Purchaser Software"). The Transactions will not
cause a breach or default under any licenses, leases or similar agreements
relating to Purchaser Software or impair Purchaser's ability to use Purchaser
Software in the same manner as such computer software is currently used by
Purchaser. To the knowledge of Purchaser, (i) Purchaser is not infringing any
intellectual property rights of any other person or entity with respect to
Purchaser Software, and (ii) no other person or entity is infringing any
intellectual property rights of Purchaser with respect to Purchaser Software,
except for infringements that, individually or in the aggregate, would not have
a Material Adverse Effect.

6.13. LABOR MATTERS. Except as set forth on Schedule 6.13, within the last
three (3) years Purchaser has not been the subject of any known union activity
or labor dispute, nor has there been any strike of any kind called or, to the
knowledge of Purchaser, threatened to be called against Purchaser. Purchaser has
not violated any applicable federal or state law or regulation relating to labor
or labor practices, except where such violation has and will have, individually
or in the aggregate, no Material Adverse Effect. Schedule 6.13 sets forth a
true, correct and complete list of employer loans or advances from Purchaser to
its employees. Purchaser is in compliance with all applicable requirements of
the Immigration Laws, except where such noncompliance has and will have,
individually or in the aggregate, no Material Adverse Effect.

6.14. WORK-IN-PROCESS, ORDERS AND RETURNS.

(a) Except as set forth on Schedule 6.14(A), as of the date hereof, except
for any claims specifically disclosed on other Schedules hereto, to Purchaser's
knowledge, there are no claims nor does Purchaser reasonably expect to make or
receive any claims to terminate Customer Agreements, or material licenses,
services, or other orders, or for refunds relating to Customer Agreements,
licenses, maintenance agreements, or other fees by reason of alleged
dissatisfaction with Purchaser's capabilities or performance (including those
related to Purchaser Software), or defective or unsatisfactory services or
products, except as would not result in, individually or in the aggregate, a
Material Adverse Effect.

(b) Except as set forth on Schedule 6.14(B), Purchaser has not been
notified that the consummation of the Transactions will result in any material
cancellations or withdrawals of accepted and unfilled orders for services or
Purchaser Software, or maintenance or other services and Purchaser will inform
Purchaser promptly upon receipt of any notification to that effect received
after the date hereof, except for cancellations or withdrawals that,
individually or in the aggregate, would not have a Material Adverse Effect. To
the knowledge of Purchaser, neither the execution of this Agreement nor the
consummation of the Transactions will result in any material cancellations or
withdrawals of accepted and unfilled orders for the license or sales of
Purchaser Software, services or merchandise, except for cancellations or
withdrawals that, individually or in the aggregate, would not have a Material
Adverse Effect.

6.15. ABSENCE OF CERTAIN CHANGES. Except as reflected on Schedule 6.15, or
elsewhere in this Agreement or specifically identified on any Schedules hereto,
and since June 30, 1999, Purchaser has not and at the Closing Date will not
have:

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(b) Incurred any obligations specifically related to the Assets (including
Customer Agreements), except in the ordinary course of business consistent with
past practices;

(d) Written down the value of any inventory, contract or other intangible
asset, or written off as uncollectible any notes or accounts receivable or any
portion thereof, except for write-downs and write-offs in the ordinary course of
business, consistent with past practice and at a rate no greater than during the
latest complete fiscal year; cancelled any other debts or claims, or waived any
rights of substantial value, or sold or transferred any of its material
properties or assets, real, personal, or mixed, tangible or intangible, except
in the ordinary course of business and consistent with past practice and except
for those that, individually or in the aggregate, would not have a Material
Adverse Effect;

(e) Sold, licensed or transferred or agreed to sell, license or transfer,
any of the Assets, except in the ordinary course of business and consistent with
past practice;

(f) To Purchaser's knowledge, received notice of any pending or threatened
adverse claim or an alleged infringement of proprietary material, whether such
claim or infringement is based on trademark, copyright, patent, license, trade
secret, contract or other restrictions on the use or disclosure of proprietary
materials;

(g) Incurred obligations to refund money to customers, except in the
ordinary course of business, all of which will have no Material Adverse Effect;

(i) Made any capital expenditures or commitments, any one of which is more
than $50,000, for additions to property, plant, or equipment;

(j) Made any material change in any method of accounting or accounting
practice;

(k) Paid, loaned, guaranteed, or advanced any material amount to, or sold,
transferred, or leased any material properties or assets (real, personal, or
mixed, tangible or intangible) to, or entered into any agreement, arrangement,
or transaction with any of Purchaser's officers or directors, or any business or
entity in which any officer or director of Purchaser, or any affiliate or
associate of any of such Persons has any direct or indirect interest; or

(l) Agreed to take any action described in this Section 6.15.

The Company and Parent acknowledge and agree that a decrease in the market
price of Purchaser Common Stock is not a material adverse change.

6.16. LEASES. Schedule 6.16 contains a list of all leases pursuant to
which Purchaser leases real or personal property, and copies of all such leases
have been delivered to the Company and Parent. All such leases are in full force
and effect, and except as set forth on Schedule 6.16, no event has occurred
which is a default or which with the passage of time will constitute a default
by Purchaser thereunder, nor has any such event occurred to

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the knowledge of Purchaser which is a default by any other party to such lease.
All property leased by Purchaser as lessee is in the possession of Purchaser.
Except as indicated in Schedule 6.16, no consent of any lessor is required in
connection with the Transactions.

6.17. LITIGATION. Except as set forth in Schedule 6.17, (i) there are no
actions, proceedings or regulatory agency investigations against Purchaser or,
to Purchaser's knowledge, involving the Assets pending (served) or threatened
against Purchaser, (ii) Purchaser does not know of any such action, proceeding
or investigation against Purchaser, and (iii) no such action, proceeding, or
regulatory agency investigation has been pending (served) during the three-year
period preceding the date of this Agreement.

6.18. EMPLOYEE BENEFIT PLANS: EMPLOYEES.

Except as to any noncompliance with any of the following provisions that
would not, individually, or in the aggregate, have a Material Adverse Effect.

(a) Schedule 6.18 sets forth a list of each Employee Benefit Plan that is
currently in effect for the benefit of (i) directors or employees of Purchaser,
(ii) former directors or employees of Purchaser, or (iii) beneficiaries of
anyone described in (i) or (ii) (collectively, "Purchaser Employees") or with
respect to which Purchaser or any ERISA Affiliate has any obligation on behalf
of any Purchaser Employee. Except as disclosed on Schedule 6.18 attached hereto,
there are no other benefits to which any Purchaser Employee is entitled for
which Purchaser has any obligation.

(b) Purchaser has delivered to Parent and the Company, with respect to each
Employee Benefit Plan, true and complete copies of (i) the documents embodying
the plan, including, without limitation, the current plan documents and
documents creating any trust maintained pursuant thereto, all amendments, group
annuity contracts, insurance contracts, the most recent summary plan
description, if any, and employee handbooks, (ii) annual reports including but
not limited to Forms 5500, 990 and 1041 for the last two (2) years for the plan
and any related trust; (iii) any communication involving the plan or any related
trust to or from the IRS, DOL, PBGC or any other governmental authority since
January 1, 1998, but excluding any IRS determination letter submission; and (iv)
the most recent determination letter received from the IRS pertaining to any
Employee Benefit Plan intended to qualify under Sections 401(a) or 501(c)(9) of
the Code.

(c) Purchaser has no obligation to contribute to or provide benefits
pursuant to, and has no other liability of any kind with respect to, (i) a
"multiple employer welfare arrangement" (within the meaning of Section 3(40) of
ERISA), or (ii) a "plan maintained by more than one employer" (within the
meaning of Section 413(c) of the Code).

(d) Except as otherwise set forth on Schedule 6.18 attached hereto,
Purchaser is not liable for any contribution, tax, lien, penalty, cost,
interest, claim, loss, action, suit, damage, cost assessment or other similar
type of liability or expense of any ERISA Affiliate (including predecessors
thereof) with regard to any Employee Benefit Plan maintained, sponsored or
contributed to by an ERISA Affiliate (if a like definition of Employee Benefit
Plan were applicable to the ERISA Affiliate in the same manner as it applies to
Purchaser), including, without limitation, withdrawal liability arising under
Title IV, Subtitle E, Part 1 of ERISA, liabilities to the PBGC, or liabilities
under Section 412 of the Code or Section 302(a) of ERISA.

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(e) Purchaser has complied in all respects with COBRA.

(f) With respect to each Employee Benefit Plan and except as otherwise set
forth on Schedule 6.18 attached hereto:

(i) each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the IRS to
the effect that the Employee Benefit Plan is qualified under Section 401 of the
Code and that any trust maintained pursuant thereto is exempt from federal
income taxation under Section 501 of the Code, and nothing has occurred or, to
the knowledge of Purchaser, is expected to occur that caused or could reasonably
be expected to cause the loss of such qualification or exemption or the
imposition of any penalty or tax liability;

(iv) no claims, lawsuit, arbitration or other action has been asserted or
instituted or, to the knowledge of Purchaser, threatened in writing against the
Employee Benefit Plan, any trustee or fiduciaries thereof, Purchaser or any
ERISA Affiliate, any director, officer or employee thereof, or any of the assets
of the Employee Benefit Plan or any related trust, except for routine claims for
benefits;

(v) any bonding required with respect to the Employee Benefit Plan in
accordance with the applicable provisions of ERISA has been obtained and is in
full force and effect;

(vii) no "prohibited transaction" (within the meaning of Section 4975 of
the Code and Section 406 of ERISA) has occurred or is reasonably expected to
occur with respect to the Employee Benefit Plan (and the transactions
contemplated by this Agreement will not constitute or directly or indirectly
result in such a "prohibited transaction") which has subjected or, to the
knowledge of Purchaser, could reasonably be expected to subject Purchaser, any
ERISA Affiliate or the Company, or any officer, director or employee of
Purchaser, any ERISA Affiliate, or the Company, or the Employee Benefit Plan
trustee, administrator or other fiduciary, to a tax or penalty on prohibited
transactions imposed by either Section 502 of ERISA or Section 4975 of the Code
or any other liability with respect thereto, which tax, penalty or liability
could have a Material Adverse Effect;

(viii) to the knowledge of Purchaser, the Employee Benefit Plan is not
under audit or investigation by the IRS or the DOL or any other governmental
authority and no such completed audit, if any, has resulted in the imposition of
any tax, interest or penalty.

(g) Purchaser is not subject to any liens, excise or other taxes under
ERISA, the Code or other applicable law relating to any Employee Benefit Plan.

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(h) None of the Employee Benefit Plans is subject to Title IV of ERISA.

(i) In the case of any Employee Benefit Plan that is a Multiemployer Plan,
Purchaser has no withdrawal liability under Part 1 of Subtitle E of Title IV of
ERISA as a result of either a "complete withdrawal" (as defined in Section 4203
of ERISA) or a "partial withdrawal" (as defined in Section 4205 of ERISA) by
Purchaser from such Employee Benefit Plan occurring on or prior to the date
hereof.

(k) No amounts payable under any Employee Benefit Plan will fail to be
deductible for federal income tax purposes by virtue of Section 280G of the
Code, as such Section of the Code is currently in effect.

(l) Except as set forth on Schedule 6.18 attached hereto, no Employee
Benefit Plan provides for any health benefits (other than under COBRA, the
Federal Social Security Act or any Employee Benefit Plan qualified under Section
401(a) of the Code) to any Purchaser Employee who, at the time the health
benefit is to be provided, is a former director or former employee of Purchaser
(or a beneficiary of any such person), nor, to the knowledge of Purchaser, have
any representations, agreements, covenants or commitments been made to provide
such health benefits.

(m) Since June 30, 1999 and through the date hereof, except as set forth on
Schedule 6.18 attached hereto or as required by applicable law or consistent
with past practice, neither Purchaser nor any ERISA Affiliate has, nor will it,
(i) institute or agree to institute any new employee benefit plan or practice
for any Purchaser Employee, (ii) make or agree to make any change in any
Employee Benefit Plan, (iii) make or agree to make any increase in the
compensation payable or to become payable by Purchaser or any ERISA Affiliate to
any Purchaser Employee, other than regularly scheduled increases, or (iv) except
pursuant to this Agreement and except for contributions required to provide
benefits pursuant to the provisions of the Employee Benefit Plans, pay or accrue
or agree to pay or accrue any bonus, percentage of compensation, or other like
benefit to, or for the credit of, any Purchaser Employee.

(n) Any contribution, insurance premium, excise tax, interest charge or
other liability or charge imposed or required with respect to any Employee
Benefit Plan which is attributable to any period or any portion of any period
prior to the Closing shall, to the extent required by GAAP, be reflected as a
liability on the Purchaser Financial Statements, including, without limitation,
any portion of the matching contribution required with respect to the Purchaser
Plan for the plan year ending after the Closing which is attributable to
elective contributions made by Purchaser Employees in such plan prior to the
Closing.

6.19. BROKERS FEES AND EXPENSES. Neither Purchaser nor any affiliate
thereof has retained or utilized the services of any advisor, broker, finder, or
intermediary, or paid or agreed to pay any fee or commission to any other Person
or entity for or on account of the Transactions, or had any communications with
any Person or entity which would obligate the Company or Parent to pay any such
fees or commissions.

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6.20. BANK ACCOUNTS. Schedule 6.20 contains a true, complete and correct
list showing the name and location of each bank or other institution in which
Purchaser has any deposit account or safe deposit box, together with a listing
of account numbers and names of all Persons authorized to draw thereon or have
access thereto.

6.21. BUSINESS PRACTICES. Neither Purchaser nor anyone acting on its
behalf has made any payment of funds of Purchaser prohibited by law, and no
funds of Purchaser have been set aside to be used for any payment prohibited by
law.

6.22. INSURANCE. Purchaser maintains property, fire, casualty, general
liability insurance and other forms of insurance relating to its assets and the
operation of its business against risks of the kind customarily insured against
and in amounts customarily insured (and, where appropriate, in amounts not less
than the replacement cost of the assets). Purchaser shall maintain such
insurance policies in full force and effect at least through the Closing Date.
Schedule 6.22 lists all of the insurance policies maintained by Purchaser, which
Schedule includes the name of the insurance company, the policy number, a
description of the type of insurance covered by such policy, the dollar limit of
the policy, and the annual premiums for such policy.

6.23. TAX FREE REORGANIZATION. To the knowledge of Purchaser there is no
fact pertaining to it that would prevent the Merger from qualifying as a
tax-free reorganization under the Code. Purchaser has no present intention to
redeem or reacquire any of its stock to be issued pursuant to the Merger.
Purchaser has no present intention to dispose of any of the assets of the
Company acquired in the Merger, except for dispositions made in the ordinary
course of business or transfers described in Code Section 368(a)(2)(C).

6.24. NO EXISTING DISCUSSION. As of the date hereof, Purchaser is not
engaged directly or indirectly, in any discussion or negotiations with any other
party with respect to an Acquisition Proposal.

6.25. SHARES TO BE DELIVERED. The Merger Shares to be issued with respect
to previously outstanding Company Capital Stock when issued and delivered to
Company Stockholders pursuant to this Agreement will be duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of Purchaser. Upon
delivery of the Merger Shares after the Closing, Company Stockholders will
receive good and unencumbered title to the Merger Shares, free and clear of all
liens, restrictions, charges, encumbrances and other security interests of any
kind or nature whatsoever, except for restrictions existing under applicable
securities laws regarding transferability of the Merger Shares, and except for
any restrictions set forth on the legends of the stock certificates evidencing
the Merger Shares.

6.26. ACCURACY OF SECURITIES FILINGS; FINANCIAL STATEMENTS.

(a) Except as set forth in Schedule 6.26, Purchaser has made all filings
with the SEC that it has been required to make under the Securities and Exchange
Act, and has done so in a timely manner. Purchaser has furnished, or otherwise
made available, the Securities Filings to the Company and Parent. Each of the
Securities Filings has complied with the Securities Act and the Exchange Act in
all material respects. None of the Securities Filings, as of their respective
dates, to Purchaser's knowledge, contain any untrue statement of any material
fact or omit to state a material fact required therein to be stated or omit to
state a material fact in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by or on behalf of Purchaser for
inclusion in the Proxy

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Statement will, at the date of the filing of the Proxy Statement with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.

(b) The financial statements of Purchaser included and/or incorporated by
reference into the Securities Filings (including the related notes and
schedules) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, present fairly the financial
condition of Purchaser as of the indicated dates and the results of operations
of Purchaser for the indicated periods, are consistent with the books and
records of Purchaser and, except as disclosed on Schedule 6.26, do not contain
any material item of special or non-recurring or other income not earned in the
ordinary course of business; provided, however, that the interim financial
statements are subject to normal year-end adjustments which are not expected to
be material in amount.

(c) Except as and to the extent specifically disclosed in this Agreement,
on the date hereof, there are, and prior to Closing will be, no liabilities or
obligations of Purchaser of any nature, whether liquidated, accrued, absolute,
continued or otherwise except for those (i) that are specifically reflected or
reserved against as to amount in the latest balance sheet contained in the
Securities Filings, or (ii) that arose thereafter in the ordinary course of
business, or (iii) that it specifically set forth on Schedule 6.8 attached
hereto; and at the Closing, there will be no liabilities or obligations of
Purchaser of any nature, whether liquidated or unliquidated, accrued, absolute,
contingent or otherwise which are material individually or in the aggregate,
except for those (A) that are specifically reflected or reserved against as to
amount in the latest balance sheet contained in the Securities Filings, or (B)
that arise after the date of such balance sheet in the ordinary course of
business (and are immaterial) or (C) that are specifically set forth on Schedule
6.26.

6.27. APPROVALS. The execution and delivery of this Agreement and the
consummation of the Transactions by Purchaser will not require the consent,
approval, order or authorization of any governmental entity or regulatory
authority or any other Person under any statute, law, rule, regulation (other
than applicable federal and state securities laws), permit, license, agreement,
indenture or other instrument to which Purchaser is a party or to which any of
its properties are subject, except for such consents, approvals, actions,
filings or notices the failure of which to make or obtain will not have a
Material Adverse Effect on Purchaser, and except for any federal or state
filings required by applicable securities laws (such as the Registration
Statement), and the filing of the listing application for the Merger Shares with
NASDAQ National Market, no declaration, filing or registration with any
governmental entity or regulatory authority is required by Purchaser in
connection with the execution and delivery of this Agreement, the consummation
of the Transactions, or the performance by Purchaser of its obligations
hereunder.

6.28. ACCURACY OF REPRESENTATIONS. No representation or warranty by
Purchaser contained in this Agreement and no statement contained in any
certificate or schedule furnished to the Company or Parent pursuant to the
provisions hereof contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein not
misleading. To the knowledge of Purchaser, there is no current event or
condition of any kind or character pertaining to Purchaser that may reasonably
be expected to have a Material Adverse Effect, except as disclosed herein.

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6.29. NASDAQ RULES. The consummation of the Transactions will not result
in violation by Purchaser of any applicable NASDAQ rules or requirements.

ARTICLE 7.

INDEMNIFICATION

7.1. INDEMNIFICATION BY PARENT. Parent hereby indemnifies and holds
harmless Purchaser and each of its affiliates, directors, officers, employees,
advisors and agents from and against all claims, liabilities, lawsuits, costs,
damages or expenses (including, without limitation, reasonable attorneys' fees
and expenses incurred in litigation or otherwise) arising out of and sustained
by any of them due to (a) any misrepresentation or breach of any representation,
warranty, covenant or agreement of Company or Parent contained in this Agreement
or any document executed and delivered by Parent or the Company in connection
with the Transactions ("Transaction Documents"); (b) the ownership or use of the
Assets, including, without limitation, any and all claims, liabilities, Taxes,
debts, contracts, agreements, obligations, damages, costs and expenses, known or
unknown, fixed or contingent, claimed or demanded by third parties against the
Surviving Corporation arising out of the operation of the Company's business
prior to the Closing Date or as a result of the Transactions, which were not
specifically disclosed herein or in the Schedules attached hereto; or (c) the
Spinoff (collectively all claims described in this Section 7.1, being "Section
7.1 Indemnified Claims").

7.2. INDEMNIFICATION BY SURVIVING CORPORATION. The Surviving Corporation,
hereby indemnifies and holds harmless Parent and each of its affiliates,
directors, officers, employees, advisors and agents from and against all claims,
liabilities, lawsuits, costs, damages or expenses (including, without
limitation, reasonable attorneys' fees and expenses incurred in litigation or
otherwise) arising out of and sustained by any of them due to (a) any
misrepresentation or breach of any representation, warranty, covenant or
agreement of Purchaser contained in this Agreement or any of the Transaction
Documents; or (b) the ownership or use of the Assets, including, without
limitation, any and all claims, liabilities, Taxes, debts, contracts,
agreements, obligations, damages, costs and expenses, known or unknown, fixed or
contingent, claimed or demanded by third parties against the Parent arising out
of the operation of the Purchaser's business prior to or after the Closing Date
(except as to Purchaser's business previously owned and operated by the Company,
only after the Closing Date) or as a result of the Transactions, which were not
specifically disclosed herein or in the Schedules attached hereto (collectively
all claims described in this Section 7.2, being "Section 7.2 Indemnified
Claims").

7.3. PROVISIONS REGARDING INDEMNIFICATION. The indemnified party (or
parties) shall promptly notify the indemnifying party (or parties) of any claim,
demand, action or proceeding for which indemnification will or may be sought
under Section 7.1 or 7.2 of this Agreement and, if such claim, demand, action or
proceeding is a third party claim, demand, action or proceeding, the
indemnifying party will have the right, at its expense, to assume the defense
thereof using counsel reasonably acceptable to the indemnified party. The
indemnified party shall have the right to participate in at its own expense, but
not control, the defense of any such third party claim, demand, action or
proceeding. In connection with any such third party claim, demand, action or
proceeding, Parent and Purchaser shall cooperate with each other. No such third
party claim, demand, action or proceeding shall be settled without the prior
written consent of the indemnified party provided, however, that if a firm,
written offer is made to settle any such third party claim,

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demand, action or proceeding (which offer does not involve the admission of
guilt or wrongdoing by any indemnified party) and the indemnifying party
proposes to accept such settlement and the indemnified party refuses to consent
to such settlement, then: (i) the indemnifying party shall be excused from, and
the indemnified party shall be solely responsible for, all further defense of
such third party claim, demand, action or proceeding; and (ii) the maximum
liability of the indemnifying party relating to such third party claim, demand,
action or proceeding shall be the amount of the proposed settlement if the
amount thereafter recovered from the indemnified party on such third party
claim, demand, action or proceeding is greater than the amount of the proposed
settlement.

7.4. SURVIVAL. The representations and warranties contained in this
Agreement and in the Transaction Documents delivered at the Closing shall
survive the Closing for a period ending on the first (1st) anniversary date of
the Closing and shall thereafter cease to be of any force and effect, except for
(a) claims as to which notice has been given in accordance with Section 7.3
hereof prior to such date and which are pending on such date and (b)
representations and warranties relating to: (i) title to the Assets (Sections
5.3 and 6.4 hereof), (ii) ownership of stock of the Company and Purchaser
(Sections 5.5 and 6.5 hereof), (iii) Taxes (Sections 5.9 and 6.9 hereof) and
(iv) employee benefits (Sections 5.18 and 6.18 hereof), each of which shall
survive until the end of the statute of limitations applicable to the underlying
claim for which indemnification is sought.

7.5. LIMITATIONS.

(a) Notwithstanding anything to the contrary contained herein, Purchaser
will not assert a claim against Parent under this Article 7 until the total of
all Section 7.1 Indemnified Claims exceeds in the aggregate $1,000,000 (the
"Base Amount"), at which time all Section 7.1 Indemnified Claims in excess of
such Base Amount may be claimed in full and, if indemnifiable under this Article
7, shall be indemnified in full.

(b) Notwithstanding anything to the contrary contained herein, Parent will
not assert a claim against Purchaser under this Article 7 until the total of all
Section 7.2 Indemnified Claims exceeds the Base Amount, at which time all
Section 7.2 Indemnified Claims in excess of such Base Amount may be claimed in
full and, if indemnifiable under this Article 7, shall be indemnified in full.

(c) All Section 7.1 or Section 7.2 Indemnified Claims shall be satisfied by
delivery from the indemnifying to the indemnified party of a number of shares of
Purchaser Common Stock having a value equal to the amount of the Section 7.1 or
Section 7.2 Indemnified Claims, based on the market price of Purchaser Common
Stock as of the date the indemnified party paid the amount(s) giving rise to the
Section 7.1 Indemnified Claim or Section 7.2 Indemnified Claim.

(d) Any indemnification claims of Purchaser or Parent pursuant to Section
4.1 hereof shall not be subject to any of the terms or limitations described in
this Article 7.

(e) The satisfaction of all Section 7.1 Indemnified Claims and Section 7.2
Indemnified Claims shall be deemed to constitute adjustments to the aggregate
consideration paid by Purchaser pursuant to the Merger.

7.6. NO RECOURSE AGAINST THE COMPANY. Parent hereby irrevocably waives any
and all right to recourse against the Company with respect to any breach of any
representation, warranty, covenant, or noncompliance with any conditions or
covenants, given or made by Parent or the Company in this Agreement or any
document, certificate or agreement

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entered into or delivered pursuant hereto. Parent shall not be entitled to
contribution from, subrogation to or recovery against the Company with respect
to any liability of Parent or the Company that may arise under or pursuant to
this Agreement or the Transactions.

7.7. EFFECT OF INSURANCE. With respect to any indemnifiable claim
hereunder, the amount recoverable by the party seeking indemnification shall
take into account any reimbursements realized by such party from insurance
policies or other indemnification sources, arising from the same incident or set
of facts or circumstances giving rise to the claim for indemnification. Upon the
payment of the indemnified claim from the indemnifying party to the indemnified
party, the indemnifying party shall have a right of subrogation with respect to
any insurance proceeds or other rights to third party reimbursement for such
claims held by the indemnified party.

ARTICLE 8.

CONDITIONS TO OBLIGATIONS
OF PURCHASER TO CLOSE

Each and every obligation of Purchaser under this Agreement to be performed
on or prior to the Closing shall be subject to the fulfillment, on or prior to
the Closing, of each of the following conditions, which conditions each of the
Company and Parent agrees to use best efforts to satisfy:

8.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties made by the Company and Parent in or pursuant to the Agreement or
given on their behalf hereunder shall be true and correct in all respects on and
as of the Closing Date, in each case with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date (except to the extent expressly made as of an earlier date, in which case
such representations and warranties shall be true and correct as of such date),
except where the failure of such representations and warranties to be so true
and correct does not have, and is not likely to have, individually or in the
aggregate, a Material Adverse Consequence.

8.2. OBLIGATIONS PERFORMED. The Company shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing, except where the failure to
perform or comply does not have, and is not likely to have, individually, or in
the aggregate, a Material Adverse Consequence.

8.3. CONSENTS. Purchaser shall have obtained Purchaser Stockholder
Approval, and the Company shall have obtained Company Stockholder Approval, and
any waiting period applicable to this Agreement, the Merger and the Transactions
under HSR shall have expired or early termination thereof shall have been
granted.

8.4. CLOSING DELIVERIES. The Company shall have delivered to Purchaser
each of the following:

(a) a certificate of the President of the Company certifying as to the
matters set forth in Sections 8.1, 8.2 and 8.3 hereof and as to the satisfaction
of all other conditions set forth in this Article 8;

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(b) Certificates of Merger duly executed by an officer of the Company for
filing in accordance with the provisions of Section 2.2 hereof;

(c) the corporate minute books, seals and stock transfer books of the
Company certified by the corporate secretary of the Company as true, correct and
complete, including minutes authorizing the Merger and the Transactions;

(d) an executed agreement reasonably satisfactory to Purchaser pursuant to
which the Company has disposed of certain assets of its ProfitWorks applications
software and related product line, consistent with the provisions of Section 4.4
hereof;

(e) the audited Company financial statements, as more fully described in
Section 4.6 hereof, and an unaudited Closing Balance Sheet;

(f) an opinion of counsel to the Company and Parent reasonably satisfactory
to Purchaser and addressing only the issues of incorporation in Pennsylvania,
qualification in other states, corporate power and authority to execute this
Agreement and the Merger Option Agreement and to consummate the Transactions,
the enforceability of this Agreement and the Merger Option Agreement, and no
conflicts with the Articles of Incorporation or By-Laws of the Company or
Parent;

(g) the Merger Option Agreement duly executed by an officer of Parent;

(h) a shareholder voting agreement executed by holders of at least sixty
percent (60%) of the Merger Shares as required pursuant to Section 3 of that
certain Shareholder Voting Agreement dated as of August 12, 1999 by and among
Parent, Purchaser and Daniel J. Mitchell, as designated agent of certain
shareholders of CareCentric;

(i) receipt in immediately available funds of $6,000,000 less the
outstanding principal balance and all accrued but unpaid interest due under the
Note as of the Closing Date; and

(j) evidence of termination of the Note and Security Agreement, and
executed Uniform Commercial Code UCC-3 termination statements.

8.5. NO CHALLENGE. There shall not be pending or threatened any action,
proceeding or investigation before any court or administrative agency or any
pending action by any other Person, challenging or seeking damages in connection
with the Merger and having a Material Adverse Consequence on Purchaser.

8.6. NO MATERIAL ADVERSE CONSEQUENCE. Since the date of execution of this
Agreement, there shall have been no Material Adverse Consequence as to the
Company.

8.7. REVISED SCHEDULES. The Company shall have provided Purchaser with
revised Schedules dated as of the Closing Date (the "Revised Schedules"), with
all material changes through such date duly noted thereon, and the Revised
Schedules will not contain any disclosures which (i) should have been but were
not disclosed on the Schedules attached hereto or (ii) set forth material
changes which in the opinion of Purchaser, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Consequence as to the
Company unless such disclosures are approved in writing by Purchaser.

8.8. REPAYMENT OF DEBTS. At the Closing, all officers, directors,
stockholders and employees of the Company shall repay to the Surviving
Corporation in full any outstanding indebtedness, if any, owed to the Company by
them or their families.

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8.9. RELEASES. Each of the officers and directors of the Company shall
have executed releases in favor of the Company in form reasonably satisfactory
to Purchaser and its counsel.

8.10. SPINOFF. The Spinoff shall have been consummated in compliance in
all material respects with the Exchange Act and any other applicable federal or
state securities laws or regulations.

8.11. REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective by the SEC.

ARTICLE 9.

CONDITIONS TO OBLIGATIONS
OF THE COMPANY AND PARENT TO CLOSE

Each and every obligation of the Company and Parent under this Agreement to
be performed on or prior to the Closing, shall be subject to the fulfillment, on
or prior to the Closing, of each of the following conditions, which conditions
Purchaser agrees to use best efforts to satisfy:

9.1. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The representations
and warranties made by Purchaser in or pursuant to the Agreement or given on its
behalf hereunder shall be true and correct in all respects on and as of the
Closing Date, in each case with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case such
representations and warranties shall be true and correct as of such date),
except where the failure of such representations and warranties to be so true
and correct does not have, and is not likely to have, individually or in the
aggregate, a Material Adverse Consequence.

9.2. OBLIGATIONS PERFORMED. Purchaser shall have performed and complied
with all of its obligations under this Agreement which are to be performed or
complied with by it prior to or at the Closing, except where the failure to
perform or comply does not have, and is not likely to have, individually, or in
the aggregate, a Material Adverse Consequence.

9.3. CONSENTS. Purchaser shall have obtained Purchaser Stockholder
Approval, and the Company shall have obtained Company Stockholder Approval; any
waiting period applicable to this Agreement, the Merger and the Transactions
under HSR shall have expired or early termination thereof shall have been
granted; and the Registrable Shares shall have been listed and eligible for
trading on the NASDAQ National Market System subject only to official notice of
issuance.

9.4. CLOSING DELIVERIES. Purchaser shall have delivered to the Company
Stockholders and the Company each of the following:

(a) delivery of the Merger Shares to Parent;

(b) certified copies of the corporate resolutions of Purchaser authorizing
the execution, delivery and performance of this Agreement by Purchaser, together
with an incumbency certificate with respect to the respective officers of
Purchaser executing documents or instruments on behalf of Purchaser;

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(c) a certificate of the President or any Senior Vice President of
Purchaser certifying as to the matters set forth in Sections 9.1, 9.2 and 9.3
hereof and as to the satisfaction of all other conditions set forth in this
Article 9;

(d) an opinion of counsel to Purchaser reasonably satisfactory to Parent
and the Company and addressing only the issues of incorporation in Delaware,
qualification in other states, corporate power and authority to execute and
deliver this Agreement and consummate the Transactions, the enforceability of
this Agreement and the Merger Option Agreement, and no conflicts with the
Certificate of Incorporation or By-Laws of Purchaser;

(e) Certificates of Merger duly executed by an officer of Purchaser for
filing in accordance with Section 2.2, or evidence of such filing;

(f) the Merger Option Agreement duly executed by an officer of Purchaser;

(g) evidence that the Certificate of Designations was duly filed with the
Delaware Secretary of State;

(h) a certificate for 5,600,000 shares of Purchaser Series B Preferred
issued to Parent; and

(i) the Mestek Warrant, duly executed by an officer of Purchaser.

9.5. NO CHALLENGE. There shall not be pending or threatened any action,
proceeding or investigation before any court or administrative agency by any
government agency or any pending action by any other Person, challenging or
seeking damages from Parent or the Company in connection with the Merger and
having a Material Adverse Consequence on the Company or Purchaser.

9.6. REVISED SCHEDULES. Purchaser shall have provided the Company and
Parent with Revised Schedules dated as of the Closing Date, with all material
changes through such date duly noted thereon, and the Revised Schedules will not
contain any disclosures which (i) should have been but were not disclosed on the
Schedules attached hereto or (ii) set forth material changes which in the
opinion of the Parent and the Company, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Consequence as to Purchaser,
unless such disclosures are approved in writing by Parent and the Company.

9.7. NO MATERIAL ADVERSE CONSEQUENCE. Since the date of execution of this
Agreement, there shall have been no Material Adverse Consequence as to
Purchaser.

9.8. SPINOFF. The Spinoff shall have been consummated in compliance in all
material respects with the Exchange Act and any other applicable federal or
state securities laws or regulations.

9.9. REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective by the SEC.

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ARTICLE 10.

TERMINATION

10.1. TERMINATION. This Agreement may be terminated at any time (the
"Termination Date") before the Closing Date:

(a) by mutual written consent of Purchaser, Parent and the Company;

(b) by Purchaser upon the occurrence or upon its discovery of a Material
Adverse Consequence as to the Company;

(c) by Parent or the Company upon the occurrence or upon their discovery of
a Material Adverse Consequence as to Purchaser;

(d) by Purchaser or the Company pursuant to Section 4.16 hereof; or

(e) by Purchaser, Parent or the Company if the Closing is not consummated
on or before January 7, 2000, unless the failure to close by such date is
attributable to actions or omissions of the party seeking to terminate this
Agreement under this subsection.

10.2. EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Sections 10.1(a), 10.1(b), 10.1(c) or 10.1(e) above, no party shall
have any obligations to the others hereunder except for those obligations with
respect to confidentiality and the return of confidential information set forth
below and in the Confidentiality Agreement. If this Agreement is terminated
pursuant to Section 10.1(d), the remedies available to the non-terminating party
set forth in Section 4.16(c) hereof shall apply. If this Agreement is
terminated, each party shall promptly return to each other all copies of the due
diligence materials previously provided to such party or their representatives,
and the obligations in respect of confidentiality set forth in the
Confidentiality Agreement shall remain in effect.

ARTICLE 11.

MISCELLANEOUS PROVISIONS

11.1. SEVERABILITY. If any provision of this Agreement is prohibited by
the laws of any jurisdiction as those laws apply to this Agreement, that
provision shall be ineffective to the extent of such prohibition and shall, to
the extent possible, be modified to conform with such laws, without invalidating
the remaining provisions hereto.

11.2. MODIFICATION. This Agreement may not be changed or modified except
in writing specifically referring to this Agreement and signed by each of the
parties hereto.

11.3. ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT. Except as provided
pursuant to the Spinoff, this Agreement and the Closing Documents may not be
assigned by Purchaser and may not be assigned by the Company or Parent without
the prior written consent of Purchaser. The terms and conditions hereof shall
survive the Closing as provided herein and shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns. By their execution and delivery of this
Agreement, the MCS Major Stockholders hereby covenant and agree to vote their
shares of Parent's common stock, and Company Capital Stock to be issued to them
after the Spinoff, in favor of the Merger.

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

11.5. NOTICES. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below.

<TABLE>
<S> <C>
If to Company or Parent: Mestek, Inc.
260 North Elm Street
Westfield, Massachusetts 01085
Attention: Chief Executive
Officer
Telefax: (413) 568-7428

with a copy to: Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078
Attn: Marc R. Paul, Esq.
Telefax: (202) 452-7074

If to Purchaser: Simione Central Holdings, Inc.
6600 Powers Ferry Road
Atlanta, Georgia 30339
Attention: Chief Executive
Officer
Telefax: (770) 644-6558

with a copy to: Arnall Golden & Gregory, LLP
2800 One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3450
Attention: Sherman A. Cohen, Esq.
Telefax: (404) 873-8631
</TABLE>

or at such other address as any party hereto notifies the other parties
hereof in writing.

11.6. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. Except for the
Confidentiality Agreement, the restrictions and obligations of which shall
survive according to its terms, this Agreement, together with the Exhibits and
Schedules attached hereto, constitutes the entire agreement and supersedes any
and all other prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof and,
except as otherwise expressly provided herein, is not intended to confer upon
any Person other than Purchaser, the Company, and Parent, any rights or remedies
hereunder. No provision of this Agreement shall be construed against any party
on the ground that such party drafted the provision or caused it to be drafted
or the provision contains a covenant of such party.

11.7. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, excluding
those relating to conflicts of laws.

11.8. ARBITRATION. Any claim arising out of or related to this Agreement
or the alleged breach of a representation, warranty or covenant thereof or
arising out of any of the Transactions, which has not been resolved by mutual
agreement of the parties after a sixty (60) day negotiation period in which the
parties try to resolve the claim, shall be finally

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settled by arbitration. Such arbitration shall be conducted in Wilmington,
Delaware in accordance with the Commercial Rules of the American Arbitration
Association then in effect, as modified or supplemented herein, or as the
parties mutually agree otherwise. Notwithstanding the rules of the arbitral
body, the parties hereto agree (a) that any arbitration shall be presided over
by a single arbitrator, who shall have been admitted to the practice of law, and
be in good standing or on retirement status in any of the fifty United States or
the District of Columbia, (b) that the arbitrator shall base his decision on the
facts as presented into evidence, and (c) that the arbitrator shall prepare a
written memorandum of decision setting forth the findings of fact and
conclusions of law. The arbitrator shall be selected by Purchaser and Parent. If
they cannot agree on such selection within a thirty (30) day period, they shall
ask the American Arbitration Association to appoint an arbitrator. The decision
of the arbitrator shall be final, and judgment may be entered upon it in
accordance with the applicable law in any court having jurisdiction. Any claim
for relief made pursuant to this Agreement shall be made within one (1) year
from the date upon which the party claiming relief knew or should have known of
the cause of action constituting such claim. All costs of the arbitration shall
be borne by the party determined to be the losing party by the arbitrator. For
purposes of determining the prevailing and losing party, the arbitrator may
consider offers of settlement by either Purchaser or Parent, or both of them.

11.9. HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

11.10. INCORPORATION OF EXHIBIT AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

11.11. WAIVER. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived by any
other party to whom such compliance is owed. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.

11.12. TIME OF ESSENCE. Time is of the essence in this Agreement.

11.13. APPOINTMENT OF AGENT. By operation of this Agreement and upon the
approval of this Agreement by the holders of Company Capital Stock, Parent shall
be appointed as the designated agent of the Company Stockholders for the purpose
of enforcing the rights of the Company Stockholders pursuant to Section 7.2 of
this Agreement. The Company Stockholders shall be bound by any actions taken by
Parent on their behalf pursuant to Section 7.2 or otherwise under this
Agreement.

11.14. PROVISION OF ASSISTANCE.

(a) After the date of the Amendment Agreement and prior to the Closing
Date, upon reasonable request from the Purchaser, Parent will use its
commercially reasonable efforts to make Parent's and the Company's employees
available to Purchaser on a consulting basis. The cost of such assistance will
be equal to Parent's and the Company's out-of-pocket expenses plus a per
employee consulting fee based on the employee's skill, experience and workload,
to be determined by Parent or the Company after consultation with Purchaser.
Notwithstanding Section 4.8, the cost of such assistance will be billed to
Purchaser at the earlier of the Closing Date or the Termination Date and shall
be due and payable by Purchaser upon Purchaser's receipt of such bills.

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(b) Purchaser, Parent and the Company will negotiate in good faith to enter
into, on or prior to the Closing Date, an agreement for services such as those
described in Section 11.14(a) to be provided after the Closing Date; provided,
however, that such services agreement shall not be a condition to the Closing.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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

<TABLE>
<S> <C>
COMPANY: PURCHASER:
MCS, INC. SIMIONE CENTRAL HOLDINGS,
INC.

By: By:
-----------------------------------------------
- ----------------------------------------------- Name:
Name: -----------------------------------------------
- ----------------------------------------------- Title:
Title:

PARENT:
MESTEK, INC.

By:
-----------------------------------------------
Name:
-----------------------------------------------
Title:
-----------------------------------------------

MCS MAJOR STOCKHOLDERS

------------------------------------------------
John E. Reed

------------------------------------------------
Stewart B. Reed

------------------------------------------------
E. Herbert Burk
</TABLE>

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AMENDED AND RESTATED AGREEMENT AND
PLAN OF MERGER AND INVESTMENT AGREEMENT

LIST OF SCHEDULES AND EXHIBITS

<TABLE>
<CAPTION>
SCHEDULES* DESCRIPTION
- ---------- -----------
<S> <C> <C>
Schedule 3.1(a) -- Exchange Ratio
Schedule 3.3(a) -- Options and Warrants
Schedule 4.7 -- Exceptions to conduct of Purchaser and Company pending
Merger
Schedule 5.1 -- States of Qualification -- Company
Schedule 5.2 -- Officers and Directors -- Company
Schedule 5.3 -- Encumbrances -- Company
Schedule 5.4 -- Required Consents and Approvals -- Company
Schedule 5.5 -- Capitalization of the Company
Schedule 5.8 -- Company Financial Statements; Liabilities not disclosed on
Financials -- Company
Schedule 5.9 -- Taxes
Schedule 5.10 -- Material Contracts -- Company
Schedule 5.12(A) -- Intellectual Property -- Company
Schedule 5.12(B) -- Owned Software -- Company
Schedule 5.12(C) -- Licensed Software -- Company
Schedule 5.13 -- Labor Matters -- Company
Schedule 5.14(A) -- Work-in-Process, Orders and Returns -- Company
Schedule 5.14(B) -- Cancellations Arising from Transactions -- Company
Schedule 5.15 -- Exceptions to Absence of Certain Changes -- Company
Schedule 5.16 -- Leases -- Company
Schedule 5.17 -- Litigation -- Company
Schedule 5.18 -- Employee Benefit Plans of All Kinds -- Company
Schedule 5.21 -- Bank Accounts -- Company
Schedule 5.23 -- Insurance -- Company
Schedule 6.1 -- States of Qualification -- Purchaser
Schedule 6.3 -- Purchaser Consents
Schedule 6.4 -- Encumbrances -- Purchaser
Schedule 6.5 -- Capitalization -- Purchaser
Schedule 6.8 -- Purchaser Financial Statements; Liabilities not disclosed on
Financials -- Purchaser
Schedule 6.10 -- Schedule Material Contracts -- Purchaser
Schedule 6.12(A) -- Schedule Intellectual Property -- Purchaser
Schedule 6.12(B) -- Owned Software -- Purchaser
Schedule 6.12(C) -- Licensed Software -- Purchaser
</TABLE>

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<TABLE>
<CAPTION>
SCHEDULES* DESCRIPTION
- ---------- -----------
<S> <C> <C>
Schedule 6.13 -- Labor Matters -- Purchaser
Schedule 6.14(A) -- Work-in-Process, Orders and Returns -- Purchaser
Schedule 6.14(B) -- Cancellations Arising from Transactions -- Purchaser
Schedule 6.15 -- Exceptions to Absence of Certain Changes -- Purchaser
Schedule 6.16 -- Leases -- Purchaser
Schedule 6.17 -- Litigation -- Purchaser
Schedule 6.18 -- Employee Benefit Plans of All Kinds -- Purchaser
Schedule 6.20 -- Bank Accounts -- Purchaser
Schedule 6.22 -- Insurance -- Purchaser
Schedule 6.26 -- Exceptions regarding Securities Filings -- Purchaser
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS
-------- DESCRIPTIONS
<S> <C> <C>
Exhibit 1.2(a) -- (1) Note
Exhibit 1.2(b) -- (2) Security Agreement
Exhibit 1.4 -- (3) Certification of Designations
Exhibit 1.5 -- (4) Mestek Warrant
Exhibit 3.3(a) -- (5) Merger Option Agreement
</TABLE>

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

* In accordance with Item 601(b)(2) of Regulation S-K, the schedules have been
omitted. There is a list of schedules at the end of the Exhibit, briefly
describing them. The Registrant will furnish supplementary a copy of any
omitted schedule to the Commission upon request.

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APPENDIX B

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B PREFERRED STOCK
OF SIMIONE CENTRAL HOLDINGS, INC.

It is hereby certified that:

1. The name of the corporation is Simione Central Holdings, Inc. (the
"Corporation").

2. Section 1 of Article III of the Certificate of Incorporation of the
Corporation authorizes the issuance of up to 10,000,000 shares of preferred
stock, par value, 1/10th of 1 cent, and Section 3 of Article III of the
Certificate of Incorporation of the Corporation expressly vests in the Board of
Directors of the Corporation the authority provided therein to issue shares of
preferred stock at any time and from time to time, in one or more series, and to
fix or alter the designations, preferences and relative, participating, optional
or other special rights and qualifications, limitations or restrictions of such
shares of preferred stock, including without limitation of the generality of the
foregoing, dividend rights, dividend rates, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption
price or prices and liquidation preferences of any wholly unissued series of
preferred shares and the number of shares constituting any of such series and
the designation thereof, or any of them.

3. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Board of Directors adopted on the [ ] day
of [ ], 1999 the resolutions set forth below: (a) creating a series of
shares of preferred stock designated "Series B Preferred Stock"; and (b) setting
forth the designations, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions, of the
shares of the Series B Preferred Stock. No shares of Series B Preferred Stock
have been previously issued.

Resolutions of the Board of Directors of the Corporation adopted on the day
of [ ], 1999:

"RESOLVED, that pursuant to authority granted to and vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation of the Corporation, the Board of Directors hereby
creates a series of preferred stock, par value 1/10th of 1 cent per share, of
the Corporation and states its designation and number of shares and fixes the
relative rights, preferences and limitations thereof as follows:

A. Designation. The designation shall be "Series B Preferred Stock" (the
"Series B Preferred Stock"). Each share of the Series B Preferred Stock shall be
identical in all respects with the other shares of Series B Preferred Stock.

B. Number. The number of shares of Series B Preferred Stock shall be
5,600,000, which number from time to time may be increased or decreased (but not
below the number then outstanding) by the Board of Directors of the Corporation.
Any shares of Series B Preferred Stock purchased by the Corporation shall be
canceled and shall revert to authorized but unissued shares of preferred stock
undesignated as to series.

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C. Voting. Each share of the Series B Preferred Stock shall have two (2)
votes in all matters to be voted upon by the stockholders of the Corporation.
The Series B Preferred Stock shall vote on any matter upon which stockholders of
the Corporation are entitled to vote, together as a single class with such
stockholders.

D. Director. For so long as the Series B Preferred Stock shall remain
outstanding, in the event that the Board of Directors of the Corporation is
unable to reach a decision on a vote on any matter properly before the Board of
Directors in two consecutive meetings of the Board of Directors, the number of
directors of the Board of Directors shall be increased by One (1) member and the
holders of the Series B Preferred Stock shall have the right to appoint such
member of the Board of Directors. Any director who has been appointed by the
holders of the Series B Preferred Stock may be removed during such director's
term of office, whether with or without cause, only by the affirmative vote of
the holders of a majority of the Series B Preferred Stock.

E. Dividends. The holder of each share of Series B Preferred Stock shall
be entitled to receive, prior and in preference to any distribution to the
holders of common stock, and subject to the dividend rights of the holders of
the Series A Preferred Stock pursuant to the provisions of the Certificate of
Designations, Preferences and Rights of Series A Preferred Stock, cumulative
dividends at the rate per annum of nine percent (9%) of the One Dollar and Seven
and 143/1000 cents ($1.07143) original issuance price per share (the "Original
Issuance Price") of the Series B Preferred Stock declared by the Board of
Directors out of funds legally available therefor. All accrued but unpaid
dividends on outstanding shares of the Series B Preferred Stock must be paid in
full before any cash dividend may be declared on the common stock.

F. Mergers. In the event of a Change of Control Transaction (as defined
below), each share of Series B Preferred Stock shall be entitled to receive the
same consideration as an outstanding share of common stock, but in any event not
less than the Original Issuance Price, plus accumulated but unpaid dividends.
For the purposes of this Section F, a "Change of Control Transaction" with
respect to the Corporation means (i) the acquisition of the Corporation by a
non-affiliated third party pursuant to a merger, consolidation or business
combination; (ii) the sale of all or a substantial part of the assets of the
Corporation to a non-affiliated third party; (iii) the occurrence of a
transaction pursuant to which any entity or person shall, alone or in
combination with any affiliate (as defined in the Securities and Exchange Act of
1934 as amended and all regulations promulgated pursuant thereto, (the "Exchange
Act")) become the beneficial owner (as defined in Rules 13(d) and 13(d)-5 under
the Exchange Act) of fifty percent (50%) or more of any outstanding class of
capital stock of the Corporation having ordinary voting power in the election of
its directors; or (iv) the Corporation shall cease to own less than eighty
percent (80%) of the voting stock of any of its subsidiaries (unless such
failure is due to the merger of any subsidiary with and into the corporation).
The transactions among the Corporation, Mestek, Inc. and MCS, Inc. contemplated
in that certain Agreement and Plan of Merger dated as of May 26, 1999, as
amended, by and between such parties shall not be deemed to constitute a Change
of Control Transaction under this Section F.

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G. Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, the assets of the
Corporation available for distribution to its stockholders shall be distributed
in the following order of priority:

1. The remaining assets, if any, of the Corporation available for
distribution to the stockholders shall be distributed in accordance with the
provisions of the Certificate of Designations, Preferences and Rights of Series
A Preferred Stock.

2. After distribution of the amount set forth above, the holder of each
share of Series B Preferred Stock then outstanding shall be entitled to receive,
prior and in preference to any distribution to the holders of common stock, an
amount equal to One Dollar and Seven and 143/1000 cents ($1.07143) per share
(the "Liquidation Price") plus an amount equal to the Original Issuance Price
multiplied by nine (9%) percent per annum from the date of original issuance of
the Series B Preferred Stock to the date of distribution, provided such amount
shall be reduced by an amount equal to all dividends declared and paid with
respect to such shares of Series B Preferred Stock since the original date of
issuance. If the assets and funds of the Corporation available for distribution
to the holders of Series B Preferred Stock shall be insufficient to permit the
payment of the full preferential amount set forth in this Section, then all the
assets of the Corporation available for distribution shall be distributed to the
holders of Series B Preferred Stock pro rata so that each share receives the
same percentage of its respective liquidation interest.

3. After distribution of the amount set forth above, the remaining assets,
if any of the Corporation available for distribution to the stockholders shall
be distributed to holders of shares of common stock to the exclusion of the
holders of Series A Preferred Stock and Series B Preferred Stock until such
holders of common stock have been paid an amount equal to the aggregate
liquidation price of the Series A Preferred Stock and the Series B Preferred
Stock, and then, if any assets remain, the balance shall be distributed ratably
to the holders of common stock and to the holders of Series A Preferred Stock
and the holders of Series B Preferred Stock.

H. The Corporation will not amend this Certificate in a manner which
materially and adversely impacts the rights of the Series B Preferred Stock
hereunder or recombine or reclassify the Series B Preferred Stock without the
prior written approval of holders of a majority of the shares of Series B
Preferred Stock then outstanding.

FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the Series B Preferred Stock and fixing the
powers, designations, preferences and relative, optional, participating, and
other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said series, be deemed to be included in and be a part of the Certificate of
Incorporation of the corporation pursuant to the provisions of Sections 104 and
151 of the General Corporation Law of the State of Delaware."

The effective time and date of the Series B Preferred Stock herein
certified shall be the filing date of this Certificate of Designations with the
Secretary of State of Delaware.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its Senior Vice President, and such authorized officer hereby
declares, under penalty of perjury under the laws of the State of Delaware, that
he signed this Certificate in the official capacity set forth beneath his
signature and that the statements set forth in this Certificate are true and
correct to his own knowledge this [ ] day of [ ], 1999.

--------------------------------------
George M. Hare
Senior Vice President

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APPENDIX C

PA ST 15 Pa.C.S.A. sec. 1571
15 Pa.C.S.A. sec. 1571

PURDON'S PENNSYLVANIA STATUTES AND CONSOLIDATED STATUTES ANNOTATED
PURDON'S PENNSYLVANIA CONSOLIDATED STATUTES ANNOTATED
TITLE 15. CORPORATIONS AND UNINCORPORATED ASSOCIATIONS
PART II. CORPORATIONS
SUBPART B. BUSINESS CORPORATIONS
ARTICLE B. DOMESTIC BUSINESS CORPORATIONS GENERALLY
CHAPTER 15. CORPORATE POWERS, DUTIES AND SAFEGUARDS
SUBCHAPTER D. DISSENTERS RIGHTS

sec. 1571. Application and effect of subchapter

(A) GENERAL RULE. -- Except as otherwise provided in subsection (b), any
stockholder of a business corporation shall have the right to dissent from, and
to obtain payment of the fair value of his shares in the event of, any corporate
action, or to otherwise obtain fair value for his shares, where this part
expressly provides that a stockholder shall have the rights and remedies
provided in this subchapter. See:

Section 1906(c) (relating to dissenters rights upon special treatment).

Section 1930 (relating to dissenters rights).

Section 1931(d) (relating to dissenters rights in share exchanges).

Section 1932(c) (relating to dissenters rights in asset transfers).

Section 1952(d) (relating to dissenters rights in division).

Section 1962(c) (relating to dissenters rights in conversion).

Section 2104(b) (relating to procedure).

Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).

Section 2325(b) (relating to minimum vote requirement).

Section 2704(c) (relating to dissenters rights upon election).

Section 2705(d) (relating to dissenters rights upon renewal of election).

Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions).

Section 7104(b)(3) (relating to procedure).

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(B) EXCEPTIONS. --

(1) Except as otherwise provided in paragraph (2), the holders of the
shares of any class or series of shares that, at the record date fixed to
determine the stockholders entitled to notice of and to vote at the meeting at
which a plan specified in any of section 1930, 1931(d), 1932(c) or 1952(d) is to
be voted on, are either:

(i) listed on a national securities exchange; or

(ii) held of record by more than 2,000 stockholders;

shall not have the right to obtain payment of the fair value of any such shares
under this subchapter.

(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the case
of:

(i) Shares converted by a plan if the shares are not converted solely into
shares of the acquiring, surviving, new or other corporation or solely into such
shares and money in lieu of fractional shares.

(ii) Shares of any preferred or special class unless the articles, the plan
or the terms of the transaction entitle all stockholders of the class to vote
thereon and require for the adoption of the plan or the effectuation of the
transaction the affirmative vote of a majority of the votes cast by all
stockholders of the class.

(iii) Shares entitled to dissenters rights under section 1906(c) (relating
to dissenters rights upon special treatment).

(3) The stockholders of a corporation that acquires by purchase, lease,
exchange or other disposition all or substantially all of the shares, property
or assets of another corporation by the issuance of shares, obligations or
otherwise, with or without assuming the liabilities of the other corporation and
with or without the intervention of another corporation or other person, shall
not be entitled to the rights and remedies of dissenting stockholders provided
in this subchapter regardless of the fact, if it be the case, that the
acquisition was accomplished by the issuance of voting shares of the corporation
to be outstanding immediately after the acquisition sufficient to elect a
majority or more of the directors of the corporation.

(C) GRANT OF OPTIONAL DISSENTERS RIGHTS. -- The bylaws or a resolution of
the board of directors may direct that all or a part of the stockholders shall
have dissenters rights in connection with any corporate action or other
transaction that would otherwise not entitle such stockholders to dissenters
rights.

(D) NOTICE OF DISSENTERS RIGHTS. -- Unless otherwise provided by statute,
if a proposed corporate action that would give rise to dissenters rights under
this subpart is submitted to a vote at a meeting of stockholders, there shall be
included in or enclosed with the notice of meeting:

(1) a statement of the proposed action and a statement that the
stockholders have a right to dissent and obtain payment of the fair value of
their shares by complying with the terms of this subchapter; and

(2) a copy of this subchapter.

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(E) OTHER STATUTES. -- The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part that
makes reference to this subchapter for the purpose of granting dissenters
rights.

(F) CERTAIN PROVISIONS OF ARTICLES INEFFECTIVE. -- This subchapter may not
be relaxed by any provision of the articles.

(G) CROSS REFERENCES. -- See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished)
and 2512 (relating to dissenters rights procedure).

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sec. 1572. Definitions

The following words and phrases when used in this subchapter shall have the
meanings given to them in this section unless the context clearly indicates
otherwise:

"CORPORATION." The issuer of the shares held or owned by the dissenter
before the corporate action or the successor by merger, consolidation, division,
conversion or otherwise of that issuer. A plan of division may designate which
of the resulting corporations is the successor corporation for the purposes of
this subchapter. The successor corporation in a division shall have sole
responsibility for payments to dissenters and other liabilities under this
subchapter except as otherwise provided in the plan of division.

"DISSENTER." A stockholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every act
required up to the time involved for the assertion of those rights.

"FAIR VALUE." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects, taking into account all
relevant factors, but excluding any appreciation or depreciation in anticipation
of the corporate action.

"INTEREST." Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all the
circumstances, taking into account all relevant factors, including the average
rate currently paid by the corporation on its principal bank loans.

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PA ST 15 Pa.C.S.A. sec. 1573
15 Pa.C.S.A. sec. 1573

sec. 1573. Record and beneficial holders and owners

(A) RECORD HOLDERS OF SHARES. -- A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of the
same class or series beneficially owned by any one person and discloses the name
and address of the person or persons on whose behalf he dissents. In that event,
his rights shall be determined as if the shares as to which he has dissented and
his other shares were registered in the names of different stockholders.

(B) BENEFICIAL OWNERS OF SHARES. -- A beneficial owner of shares of a
business corporation who is not the record holder may assert dissenters rights
with respect to shares held on his behalf and shall be treated as a dissenting
stockholder under the terms of this subchapter if he submits to the corporation
not later than the time of the assertion of dissenters rights a written consent
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner, whether
or not the shares so owned by him are registered in his name.

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sec. 1574. Notice of intention to dissent

If the proposed corporate action is submitted to a vote at a meeting of
stockholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair value of his shares must file with the corporation,
prior to the vote, a written notice of intention to demand that he be paid the
fair value for his shares if the proposed action is effectuated, must effect no
change in the beneficial ownership of his shares from the date of such filing
continuously through the effective date of the proposed action and must refrain
from voting his shares in approval of such action. A dissenter who fails in any
respect shall not acquire any right to payment of the fair value of his shares
under this subchapter. Neither a proxy nor a vote against the proposed corporate
action shall constitute the written notice required by this section.

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sec. 1575. Notice to demand payment

(A) GENERAL RULE. -- If the proposed corporate action is approved by the
required vote at a meeting of stockholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice of
intention to demand payment of the fair value of their shares and who refrained
from voting in favor of the proposed action. If the proposed corporate action is
to be taken without a vote of stockholders, the corporation shall send to all
stockholders who are entitled to dissent and demand payment of the fair value of
their shares a notice of the adoption of the plan or other corporate action. In
either case, the notice shall:

(1) State where and when a demand for payment must be sent and certificates
for certificated shares must be deposited in order to obtain payment.

(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is received.

(3) Supply a form for demanding payment that includes a request for
certification of the date on which the stockholder, or the person on whose
behalf the stockholder dissents, acquired beneficial ownership of the shares.

(4) Be accompanied by a copy of this subchapter.

(B) TIME FOR RECEIPT OF DEMAND FOR PAYMENT. -- The time set for receipt of
the demand and deposit of certificated shares shall be not less than 30 days
from the mailing of the notice.

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sec. 1576. Failure to comply with notice to demand payment, etc.

(A) EFFECT OF FAILURE OF STOCKHOLDER TO ACT. -- A stockholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by a notice pursuant to section 1575 (relating
to notice to demand payment) shall not have any right under this subchapter to
receive payment of the fair value of his shares.

(B) RESTRICTION ON UNCERTIFICATED SHARES. -- If the shares are not
represented by certificates, the business corporation may restrict their
transfer from the time of receipt of demand for payment until effectuation of
the proposed corporate action or the release of restrictions under the terms of
section 1577(a) (relating to failure to effectuate corporate action).

(C) RIGHTS RETAINED BY STOCKHOLDER. -- The dissenter shall retain all other
rights of a stockholder until those rights are modified by effectuation of the
proposed corporate action.

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sec. 1577. Release of restrictions or payment for shares

(A) FAILURE TO EFFECTUATE CORPORATE ACTION. -- Within 60 days after the
date set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall return
any certificates that have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for payment.

(B) RENEWAL OF NOTICE TO DEMAND PAYMENT. -- When uncertificated shares have
been released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.

(C) PAYMENT OF FAIR VALUE OF SHARES. -- Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment if the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the shares, or give written notice that no remittance under
this section will be made. The remittance or notice shall be accompanied by:

(1) The closing balance sheet and statement of income of the issuer of
the shares held or owned by the dissenter for a fiscal year ending not more
than 16 months before the date of remittance or notice together with the
latest available interim financial statements.

(2) A statement of the corporation's estimate of the fair value of the
shares.

(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.

(D) FAILURE TO MAKE PAYMENT. -- If the corporation does not remit the
amount of its estimate of the fair value of the shares as provided by subsection
(c), it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such certificate
or on the records of the corporation relating to any such uncertificated shares
that such demand has been made. If shares with respect to which notation has
been so made shall be transferred, each new certificate issued therefor or the
records relating to any transferred uncertificated shares shall bear a similar
notation, together with the name of the original dissenting holder or owner of
such shares. A transferee of such shares shall not acquire by such transfer any
rights in the corporation other than those that the original dissenter had after
making demand for payment of their fair value.

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sec. 1578. Estimate by dissenter of fair value of shares

(A) GENERAL RULE. -- If the business corporation gives notice of its
estimate of the fair value of the shares, without remitting such amount, or
remits payment of its estimate of the fair value of a dissenter's shares as
permitted by section 1577(c) (relating to payment of fair value of shares) and
the dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the fair
value of the shares, which shall be deemed a demand for payment of the amount or
the deficiency.

(B) EFFECT OF FAILURE TO FILE ESTIMATE. Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the corporation.

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sec. 1579. Valuation proceedings generally

(A) GENERAL RULE. -- Within 60 days after the latest of:

(1) effectuation of the proposed corporate action;

(2) timely receipt of any demands for payment under section 1575 (relating
to notice to demand payment); or

(3) timely receipt of any estimates pursuant to section 1578 (relating to
estimate by dissenter of fair value of shares);

if any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.

(B) MANDATORY JOINDER OF DISSENTERS. -- All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served on
each such dissenter. If a dissenter is a nonresident, the copy may be served on
him in the manner provided or prescribed by or pursuant to 42 Pa.C.S. Ch. 53
(relating to bases of jurisdiction and interstate and international procedure).

(C) JURISDICTION OF THE COURT. -- The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value. The appraiser shall have
such power and authority as may be specified in the order of appointment or in
any amendment thereof.

(D) MEASURE OF RECOVERY. -- Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found to
exceed the amount, if any, previously remitted, plus interest.

(E) EFFECT OF CORPORATION'S FAILURE TO FILE APPLICATION. -- If the
corporation fails to file an application as provided in subsection (a), any
dissenter who made a demand and who has not already settled his claim against
the corporation may do so in the name of the corporation at any time within 30
days after the expiration of the 60-day period. If a dissenter does not file an
application within the 30-day period, each dissenter entitled to file an
application shall be paid the corporation's estimate of the fair value of the
shares and no more, and may bring an action to recover any amount not previously
remitted.

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sec. 1580. Costs and expenses of valuation proceedings

(A) GENERAL RULE. -- The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally), including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.

(B) ASSESSMENT OF COUNSEL FEES AND EXPERT FEES WHERE LACK OF GOOD FAITH
APPEARS. -- Fees and expenses of counsel and of experts for the respective
parties may be assessed as the court deems appropriate against the corporation
and in favor of any or all dissenters if the corporation failed to comply
substantially with the requirements of this subchapter and may be assessed
against either the corporation or a dissenter, in favor of any other party, if
the court finds that the party against whom the fees and expenses are assessed
acted in bad faith or in a dilatory, obdurate, arbitrary or vexatious manner in
respect to the rights provided by this subchapter.

(C) AWARD OF FEES FOR BENEFITS TO OTHER DISSENTERS. -- If the court finds
that the services of counsel for any dissenter were of substantial benefit to
other dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefited.

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sec. 1930. Dissenters rights.

(A) GENERAL RULE. -- If any stockholder of a domestic business corporation
that is to be a party to a merger or consolidation pursuant to a plan of merger
or consolidation objects to the plan of merger or consolidation and complies
with the provisions of Subchapter D of Chapter 15 (relating to dissenters
rights), the stockholder shall be entitled to the rights and remedies of
dissenting stockholders therein provided, if any. See also section 1906(c)
(relating to dissenters rights upon special treatment).

(B) PLANS ADOPTED BY DIRECTORS ONLY. -- Except as otherwise provided
pursuant to section 1571(c) (relating to grant of optional dissenters rights),
Subchapter D of Chapter 15 shall not apply to any of the shares of a corporation
that is a party to a merger or consolidation pursuant to section 1924(b)(1)(i)
(relating to adoption by board of directors).

(C) CROSS REFERENCES. -- See sections 1571(b)(relating to exceptions) and
1904 (relating to de facto transaction doctrine abolished). (Last amended by Act
169, L. '92, eff. 2-16-93.)

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APPENDIX D

CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK

SIMIONE CENTRAL HOLDINGS, INC.

It is hereby certified that:

1. The name of the corporation is Simione Central Holdings, Inc. (the
"Corporation").

2. Section 3 of Article Three of the Certificate of Incorporation of the
Corporation authorizes the issuance of 10,000,000 shares of Preferred Stock, par
value $.001, and expressly vests in the Board of Directors of the Corporation
the authority provided therein to issue shares of Preferred Stock at any time
and from time to time, in one or more series, and to fix or alter the
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions of such shares of
Preferred Stock, including without limitation of the generality of the
foregoing, dividend rights, dividend rates, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption
price or prices and liquidation preferences of any wholly unissued series of
preferred shares and the number of shares constituting any of such series and
the designation thereof, or any of them.

3. The Board of Directors of the Corporation, pursuant to the authority
expressly conferred upon them as aforesaid, adopted a resolution creating a
series of shares of Preferred Stock designated "Series A Preferred Stock." No
shares of Series A Preferred Stock have been previously issued.

4. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Board of Directors adopted on August 3, 1999 the
following resolutions setting forth the designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions, of the shares of the Series A Preferred Stock:

"RESOLVED, that pursuant to authority granted to and vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, the Board of Directors hereby creates a series of
Preferred Stock, par value $.001 per share, of the Corporation and states its
designation and number of shares and fixes the relative rights, preferences and
limitations thereof as follows:

1. Designation. The designation shall be "Series A Preferred Stock" (the
"Series A Preferred Stock"). Each share of the Series A Preferred Stock shall be
identical in all respects with the other shares of Series A Preferred Stock.

2. Number. The number of shares of Series A Preferred Stock shall be
6,200,000, which number from time to time may be increased or decreased (but not
below the number then outstanding) by the Board of Directors. Any shares of
Series A Preferred

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Stock purchased by the Corporation shall be cancelled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.

3. Non-Voting. The Series A Preferred Stock shall not have any voting
rights, unless otherwise required by law.

4. Dividends; Mergers; Rights upon Liquidation.

(a) The holders of Series A Preferred Stock shall be entitled to receive,
prior and in preference to any distribution to the holders of Common Stock,
cumulative dividends at the rate per annum of 8% of the $3.00 original issuance
price per share ("Original Issuance Price") of the Series A Preferred Stock from
the later of the date of issuance or June 30, 2000, when and to the extent
declared by the Board of Directors out of funds legally available therefor. All
accrued but unpaid dividends on outstanding shares of the Series A Preferred
Stock must be paid in full before any cash dividend may be declared on the
Common Stock.

(b) In the event of a Change of Control Transaction (as defined in Section
4(d) hereof), each share of Series A Preferred Stock shall be entitled to
receive the same consideration as an outstanding share of Common Stock.
Notwithstanding the foregoing, any stockholder of record holding shares of
Series A Preferred Stock at such time may require that the Corporation purchase
for cash at a price equal to $3.00 per share (as adjusted for share splits,
share dividends and share recombinations with respect to the Common Stock from
the date of this Certificate through the closing date of the Change of Control
Transaction) the shares of Series A Preferred Stock held by such registered
holder. Such right of sale shall be exercised by the holder thereof by giving
written notice to the Corporation no later than five (5) business days prior to
the closing of the Change of Control Transaction that the holder elects to sell
a stated number of shares of Series A Preferred Stock for the per share price
stated above and by surrendering a certificate or certificates for the Series A
Preferred Stock so to be sold to the Corporation at its principal office (or
such other office or agency of the Corporation as the Corporation may designate
by notice in writing to the holder or holders of the Series A Preferred Stock)
at any time during its usual business hours by the date set forth in such
notice, together with any reasonable and customary stock transfer documentation.
The closing of such redemption shall occur within five (5) business days of
receipt of such share certificates and stock transfer documentation.

(c) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation prior to June 30, 2000, the assets of the
Corporation available for distribution to its stockholders shall be distributed
ratably to the holders of Common Stock and to the holders of Series A Preferred
Stock on an as-converted basis.

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation from and after June 30, 2000, the assets of the
Corporation available for distribution to its stockholders shall be distributed
in the following order of priority:

(i) The holders of Series A Preferred Stock shall be entitled to receive,
prior and in preference to any distribution to the holders of Common Stock, an
amount equal to $3.00 per share (the "Liquidation Price") plus an amount equal
to the Original Issuance Price multiplied by 8% per annum from the later of June
30, 2000 or the date of issuance for each share of Series A Preferred Stock then
outstanding, provided such amount shall be reduced by an amount equal to all
dividends declared and paid with respect to such shares of Series A Preferred
Stock since the date of issuance. If the assets and funds of the

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Corporation available for distribution to the holders of Series A Preferred
Stock shall be insufficient to permit the payment of the full preferential
amount set forth in this Section 4(c)(i), than all the assets of the Corporation
available for distribution shall be distributed to the holders of Series A
Preferred Stock pro rata so that each share receives the same percentage of its
respective liquidation interest.

(ii) After distribution of the amount set forth in Section 4(c)(i) hereof,
the remaining assets, if any, of the Corporation available for distribution to
the stockholders shall be distributed to the holders of shares of Common Stock
to the exclusion of the holders of Series A Preferred Stock until such holders
of Common Stock have been paid an amount equal to the Liquidation Price, and
then, if any assets remain, the balance shall be distributed ratably to the
holders of Common Stock and to the holders of Series A Preferred Stock on an
as-converted basis.

(d) For purposes of Section 4(b), a "Change of Control Transaction" with
respect to the Corporation means (i) the acquisition of the Corporation by an
unaffiliated third party pursuant to a merger, consolidation or business
combination; (ii) the sale of all or a substantial part of the assets of the
Corporation to an unaffiliated third party; (iii) the occurrence of a
transaction pursuant to which any entity or person shall, alone or in
combination with any affiliate (as defined in the Securities and Exchange Act of
1934 as amended, and all regulations promulgated pursuant thereto (the"Exchange
Act")), become the beneficial owner (as defined in Rules 13(d) and 13(d)-5 under
the Exchange Act) of 50% or more of any outstanding class of capital stock of
the Corporation having ordinary voting power in the election of its directors;
or (iv) the Corporation shall cease to own 100% of the voting stock of each of
its subsidiaries (unless such failure is due to the merger of any subsidiary
with and into the Corporation). The transactions among the Corporation, Mestek,
Inc. and MCS, Inc. contemplated in that certain Agreement and Plan of Merger
dated as of May 26, 1999 among such parties shall not be deemed to constitute a
Change of Control Transaction under this Section 4(d).

5. Conversion.

(a) Condition Precedent to Conversion. Anything in these resolutions to
the contrary notwithstanding, no conversion of the Preferred Stock into Common
Stock may occur unless the Corporation: (a) receives approval of the conversion
from the holders of a majority of the outstanding shares of Common Stock
("Stockholder Approval"), (b) receives a ruling from The Nasdaq Stock Market
("Nasdaq") that Stockholder Approval is not required for the conversion under
its rules, (c) receives an opinion from counsel that Stockholder Approval is not
required under the Nasdaq rules, or (d) ceases to have a class of its equity
securities listed on Nasdaq for reasons unrelated to the issuance or conversion
of the Preferred Stock (item (a), (b), (c) or (d), a "Conversion Condition").

(b) Right of Holder to Convert. At any time after the satisfaction of a
Conversion Condition each holder of Series A Preferred Stock may convert any or
all of such Series A Preferred Stock into fully paid and non-assessable shares
of Common Stock, by giving written notice to the Corporation. Such notice shall
set forth the number of shares of Series A Preferred Stock being so converted
and be accompanied by a certificate evidencing such shares, duly executed by
such holder of record. The aggregate number of shares of Common Stock issuable
upon such conversion shall be calculated as follows: multiply the number of
shares of Series A Preferred Stock being so converted times the "Series A
Conversion Ratio." The Series A Conversion Ratio shall initially be 1.0, and

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shall be adjusted as hereinafter provided. If the Corporation shall (i) declare
a dividend or make a distribution in shares of Common Stock, (ii) subdivide or
reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding Common Stock into a
smaller number of shares, the Series A Conversion Ratio in effect at the time of
the record date of such dividend or distribution or on the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the holder of any shares of Series A Preferred Stock
surrendered for conversion after such date shall be entitled to receive the
number of shares of Common Stock which he or she would have owned or been
entitled to receive had such Series A Preferred Stock been converted immediately
prior to such date. Successive adjustments in the Series A Conversion Ratio
shall be made whenever any event specified above shall occur.

(c) Right of Corporation to Cause Conversion. At any time after the
satisfaction of a Conversion Condition, at the election of the Corporation upon
giving notice, all, but not less than all, of the Series A Preferred Stock shall
be converted into shares of Common Stock of the Corporation. The aggregate
number of shares of Common Stock to be received shall be calculated in the same
manner as set forth in Section 5(b) above.

(d) Effect of Conversion. After notice of conversion is delivered pursuant
to Section 5(b) or 5(c), the converted shares of Series A Preferred Stock shall
be deemed to have been cancelled and no longer issued and outstanding, and the
Corporation shall promptly issue and deliver to the converting holders
certificates for the number of shares of Common Stock to which such holders
shall be entitled upon receipt of the cancelled Series A Preferred Stock from
such holders.

(e) No Fractional Shares. Notwithstanding any term or provision containing
herein to the contrary, the Corporation shall not issue any fractional shares of
Common Stock. In the event the holder would have been entitled to fractional
shares, then the Corporation shall, in lieu thereof, issue payment in cash to
such holder for the value of such fractional shares not issued in the
conversion. The value of such shares shall be the "Common Stock Price" (as
defined below) for the ten days prior to the conversion.

6. Limited Rights of Holder to Sell Preferred Stock to Corporation. In the
event that the Corporation fails to satisfy a Conversion Condition by June 30,
2000 ("Condition Deadline"), then the terms and provisions of this Section 6
shall apply. At any time during the twelve-month period beginning on the date of
the Condition Deadline, any stockholder of record holding shares of Series A
Preferred Stock at such time may require that the Corporation purchase at a
price equal to the "Common Stock Price," all or a portion of the shares of
Series A Preferred Stock held by such registered holder. Such right of sale
shall be exercised by the holder thereof by giving written notice to the
Corporation prior to the end of such twelve-month period that the holder elects
to sell a stated number of shares of such Series A Preferred Stock and by
surrendering a certificate or certificates for the Series A Preferred Stock so
to be sold to the Corporation at its principal office (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the holder or holders of the Series A Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with any
appropriate stock transfer documentation. "Common Stock Price" is the product of
(i) the Series A Conversion Ratio, multiplied by (ii) the average per share
closing price (as reported by The Wall Street Journal) of the Corporation's
Common Stock for the ten trading days preceding the applicable date that the
Corporation receives a written notice of sale from a holder of Series A
Preferred Stock, or if the closing price for the Common Stock is not

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reported in The Wall Street Journal during such period, a per share share value
determined by an independent appraisal firm selected by the Board of Directors
of the Corporation (as adjusted for share splits, share dividends and share
recombinations with respect to the Common Stock between the date of this
Certificate and the date the notice of sale is received by the Corporation).
Notwithstanding the foregoing, any holder of Series A Preferred Stock shall
forfeit the right of sale under this Section 6 if such holder (a) fails to vote
in favor of the Stockholder Approval in any proposal submitted to stockholders
to the extent that such holder holds the power to so vote, or (b) takes any
action that materially impedes the Corporation's efforts to satisfy a Conversion
Condition.

7. The Corporation will not amend this Certificate in a manner which
materially and adversely impacts the rights of the Series A Preferred Stock
hereunder or recombine or reclassify the Series A Preferred Stock without the
prior written approval of holders of a majority of the shares of Series A
Preferred Stock then outstanding.

FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the Series A Preferred Stock and fixing the
powers, designations, preferences and relative, optional, participating, and
other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said series, be deemed to be included in and be a part of the certificate of
incorporation of the corporation pursuant to the provisions of Sections 104 and
151 of the General Corporation Law of the State of Delaware."

The effective time and date of the Series A Preferred Stock herein
certified shall be the filing date of this Certificate of Designations with the
Secretary of State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its President and Chief Executive Officer, and such authorized officer
hereby declares, under penalty of perjury under the laws of the State of
Delaware, that he signed this Certificate in the official capacity set forth
beneath his signature and that the statements set forth in this Certificate are
true and correct to his own knowledge this [ ] day of August, 1999.

--------------------------------------
Barrett C. O'Donnell
President, Chief Executive Officer

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CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK

SIMIONE CENTRAL HOLDINGS, INC.

The undersigned, George M. Hare, Senior Vice President and Chief Financial
Officer of Simione Central Holdings, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "Code"), does hereby certify:

1. The name of the corporation is Simione Central Holdings, Inc.

2. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation and Section 151(g) of the Code, the Board of
Directors adopted on August 3, 1999 a resolution setting forth the designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions of the shares of the Series A
Preferred Stock (the "Resolution") and the Corporation caused a Certificate of
Designations, Preferences and Rights of Series A Preferred Stock containing the
Resolution to be signed and filed.

3. The Board of Directors adopted on December 21, 1999 the following
resolutions regarding the amendment of the Resolution:

"RESOLVED, that the entire last sentence of Section 4(d) of the resolution
of the Board of Directors adopted on August 3, 1999 setting forth the
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions of the shares of the
Series A Preferred Stock be deleted and replaced in its entirety with the
following: 'The transactions among the Corporation, Mestek, Inc., MCS, Inc.,
John E. Reed, Stewart B. Reed, and E. Herbert Burk contemplated in the Agreement
and Plan of Merger dated as of May 26, 1999, the First Amended and Restated
Agreement and Plan of Merger and Investment Agreement dated as of September 9,
1999, and the Second Amended and Restated Agreement and Plan of Merger and
Investment Agreement dated as of October 25, 1999 among such parties, or any
subsequent amendment to such agreement, shall not be deemed to constitute a
Change of Control Transaction under this Section 4(d)."'

"RESOLVED, that the Board of Directors recommends that the holders of
Series A Preferred Stock approve such amendment."

4. The Certificate of Designations, Preferences and Rights of Series A
Preferred Stock of the Corporation is hereby amended as described above in part
3 of this Certificate.

5. The amendment herein certified has been duly adopted by the Board of
Directors of the Corporation in accordance with Sections 141 and 242 of the
Code.

6. On December 21, 1999, holders of 60.0% of the outstanding shares of
Series A Preferred Stock executed written consents approving the amendment to
the Certificate of Designations, Preferences and Rights of Series A Preferred
Stock set forth in part 3 above.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its Senior Vice President and Chief Financial Officer, and such
authorized officer hereby declares, under penalty of perjury under the laws of
the State of Delaware, that he signed this Certificate in the official capacity
set forth beneath his signature and that the statements set forth in this
Certificate are true and correct to his own knowledge this 5th day of January,
2000.

--------------------------------------
George M. Hare
Senior Vice President and Chief
Financial Officer

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APPENDIX E

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SIMIONE CENTRAL HOLDINGS, INC.
-------------------------

Adopted in accordance with the provisions of
Section 242 of the
General Corporation Law of the State of Delaware

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

SIMIONE CENTRAL HOLDINGS, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), does hereby certify as
follows:

FIRST: The Corporation has received payment for its capital stock.

SECOND: In accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware, the Board of Directors of
the Corporation has duly adopted a resolution setting forth and declaring
advisable the amendment to Article III of the Certificate of Incorporation
of the Corporation set forth below.

THIRD: The stockholders owning a majority of the outstanding common
stock, par value $.001 per share, of the Corporation entitled to vote
thereon in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware duly authorized, adopted and
approved a resolution amending Article III of the Certificate of
Incorporation of the Corporation as set forth below.

FOURTH: Section 1 of Article III of the Certificate of Incorporation
of Simione Central Holdings, Inc., a Delaware corporation, is hereby
deleted in its entirety and the following is inserted in lieu thereof:

"SECTION 1. AUTHORIZED CAPITAL STOCK. The aggregate number of
shares which the Corporation shall have the authority to issue is
50,000,000 shares, consisting of 40,000,000 shares of common stock,
$.001 par value ("Common Stock") and 10,000,000 shares of preferred
stock, $.001 par value ("Preferred Stock").

FIFTH: This Certificate of Amendment shall be effective upon its
filing with the Secretary of State for the State of Delaware.

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed and sealed by George M. Hare, its Senior Vice President,
and attested by Reid Horovitz, its Secretary, this [ ] day of [ ],
1999.

SIMIONE CENTRAL HOLDINGS, INC.

By:
--------------------------------------
George M. Hare
Senior Vice President

[Corporate Seal]

ATTEST:

- --------------------------------
Reid Horovitz
Secretary and General Counsel

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APPENDIX F

CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES C PREFERRED STOCK
OF SIMIONE CENTRAL HOLDINGS, INC.

It is hereby certified that:

1. The name of the corporation is Simione Central Holdings, Inc. (the
"Corporation").

2. Section 1 of Article III of the Certificate of Incorporation of the
Corporation authorizes the issuance of up to 10,000,000 shares of preferred
stock, par value, 1/10th of 1 cent, and Section 3 of Article III of the
Certificate of Incorporation of the Corporation expressly vests in the Board of
Directors of the Corporation the authority provided therein to issue shares of
preferred stock at any time and from time to time, in one or more series, and to
fix or alter the designations, preferences and relative, participating, optional
or other special rights and qualifications, limitations or restrictions of such
shares of preferred stock, including without limiting the generality of the
foregoing, dividend rights, dividend rates, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption
price or prices and liquidation preferences of any wholly unissued series of
preferred shares and the number of shares constituting any of such series and
the designation thereof, or any of them.

3. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation and Section 151(g) of the General Corporation Law
of the State of Delaware, the Board of Directors adopted on the [ ] day of
December, 1999 the resolutions set forth below: (a) creating a series of shares
of preferred stock designated "Series C Preferred Stock"; and (b) setting forth
the designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions, of the shares of
the Series C Preferred Stock. No shares of Series C Preferred Stock have been
previously issued.

Resolutions of the Board of Directors of the Corporation adopted on the
[ ] day of December, 1999:

"RESOLVED, that pursuant to authority granted to and vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation of the Corporation, the Board of Directors hereby
creates a series of preferred stock, par value 1/10 of 1 cent per share, of the
Corporation and states its designation and number of shares and fixes the
relative rights, preferences and limitations thereof as follows:

A. Designation. The designation shall be "Series C Preferred Stock" (the
"Series C Preferred Stock"). Each share of the Series C Preferred Stock shall be
identical in all respects with the other shares of Series C Preferred Stock. The
par value of the Series C Preferred Stock shall be 1/10th of 1 cent per share.

B. Number. The number of shares of Series C Preferred Stock shall be
850,000, which number from time to time may be increased or decreased (but not
below the number then outstanding) by the Board of Directors of the Corporation.
Any shares of

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Series C Preferred Stock purchased by the Corporation shall be canceled and
shall revert to authorized but unissued shares of preferred stock undesignated
as to series.

C. Voting. Each share of the Series C Preferred Stock shall have one (1)
vote in all matters to be voted upon by the shareholders of the Corporation. The
Series C Preferred Stock shall vote on any matter upon which shareholders of the
Corporation are entitled to vote, together as a single class with such
shareholders.

D. Dividends. The holder of each share of Series C Preferred Stock shall
be entitled to receive, prior and in preference to any distribution to the
holders of common stock, and subject to the dividend rights of the holders of
the Series A Preferred Stock pursuant to the provisions of the Certificate of
Designations, Preferences and Rights of Series A Preferred Stock and the
dividend rights of the holders of the Series B Preferred Stock pursuant to the
provisions of the Certificate of Designations, Preferences and Rights of Series
B Preferred Stock, cumulative dividends at the rate per annum of eleven percent
(11%) of the Liquidation Price (as defined in Section F.3 below) payable
annually to the extent declared by the Board of Directors out of funds legally
available therefor and in preference to any dividends paid on account of the
common stock of the Corporation and any subsequently issued series of preferred
stock. All accrued but unpaid dividends on outstanding shares of the Series C
Preferred Stock must be paid in full before any cash dividend may be declared on
the common stock.

E. Mergers. In the event of a Change of Control Transaction (as defined
below), each share of Series C Preferred Stock shall be entitled to receive the
same consideration as an outstanding share of common stock of the Corporation,
but in any event not less than the Liquidation Price, plus accumulated but
unpaid dividends. For the purposes of this Section E, a "Change of Control
Transaction" with respect to the Corporation means (i) the acquisition of the
Corporation by a non-affiliated third party pursuant to a merger, consolidation
or business combination; (ii) the sale of all or a substantial part of the
assets of the Corporation to a non-affiliated third party; (iii) the occurrence
of a transaction pursuant to which any entity or person shall, alone or in
combination with any affiliate (as defined in the Securities and Exchange Act of
1934 as amended and all regulations promulgated pursuant thereto (the "Exchange
Act")) become the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of fifty percent (50%) or more of any outstanding class of
capital stock of the Corporation having ordinary voting power in the election of
its Directors; or (iv) the Corporation shall cease to own less than eighty
percent (80%) of the voting stock of any of its subsidiaries (unless such
failure is due to the merger of any subsidiary with and into the corporation).
The transactions among the Corporation, Mestek, Inc., MCS, Inc., John E. Reed,
Stewart B. Reed and E. Herbert Burk contemplated in that certain Second Amended
and Restated Agreement and Plan of Merger and Investment Agreement dated as of
October 25, 1999 by and among such parties, as such agreement may be amended
from time to time, shall not be deemed to constitute a Change of Control
Transaction under this Section E.

F. Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, the assets of the
Corporation available for distribution to its shareholders shall be distributed
in the following order of priority:

1. The remaining assets, if any, of the Corporation available for
distribution to the shareholders shall be distributed in accordance with the
provisions of the Certificate of Designations, Preferences and Rights of Series
A Preferred Stock.

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2. After distribution of the amount set forth above, the remaining assets,
if any, of the Corporation available for distribution to the shareholders shall
be distributed in accordance with the provisions of the Certificate of
Designations, Preferences and Rights of Series B Preferred Stock.

3. After distribution of the amounts set forth above, the holder of each
share of Series C Preferred Stock then outstanding shall be entitled to receive,
prior and in preference to any distribution to the holders of common stock, an
amount equal to One Dollar ($1.00) per share (the "Liquidation Price") plus an
amount equal to accrued but unpaid interest at the rate of eleven percent (11%)
per annum of the Liquidation Price from the date of original issuance of the
Series C Preferred Stock to the date of distribution, provided such amount shall
be reduced by an amount equal to all dividends declared and paid with respect to
such shares of Series C Preferred Stock since the original date of issuance. If
the assets and funds of the Corporation available for distribution to the
holders of Series C Preferred Stock shall be insufficient to permit the payment
of the full preferential amount set forth in this Section, then all the assets
of the Corporation available for distribution shall be distributed to the
holders of Series C Preferred Stock pro rata so that each share receives the
same percentage of its respective liquidation interest.

4. After distribution of the amounts set forth above, the remaining assets,
if any, of the Corporation available for distribution to the shareholders shall
be distributed to holders of shares of common stock to the exclusion of the
holders of Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock until such holders of common stock have been paid an amount
equal to the aggregate liquidation price of the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock and then, if any
assets remain, the balance shall be distributed ratably to the holders of common
stock and to the holders of Series A Preferred Stock, the holders of Series B
Preferred Stock and the holders of the Series C Preferred Stock.

G. The Corporation will not amend this Certificate in a manner which
materially and adversely impacts the rights of the Series C Preferred Stock
hereunder or recombine or reclassify the Series C Preferred Stock without the
prior written approval of holders of a majority of the shares of Series C
Preferred Stock then outstanding.

FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the Series C Preferred Stock and fixing the
powers, designations, preferences and relative, Optional, participating, and
other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said series, be deemed to be included in and be a part of the Certificate of
Incorporation of the Corporation pursuant to the provisions of Sections 104 and
151 of the General Corporation Law of the State of Delaware."

The effective time and date of the Series C Preferred Stock herein
certified shall be the filing date of this Certificate of Designations with the
Secretary of State of Delaware.

F-3
<PAGE> 371

--------------------------------------
George M. Hare
Senior Vice President and Chief
Financial Officer

F-4
<PAGE> 372

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Simione is organized under the laws of the State of Delaware. The Delaware
General Corporation Law, as amended (the "DGCL"), provides that a Delaware
corporation has the power generally to indemnify its directors, officers,
employees and other agents (each, a "Corporate Agent") against expenses and
liabilities (including amounts paid in settlement) in connection with any
proceeding involving such person by reason of his being a Corporate Agent, other
than a proceeding by or in the right of the corporation, if such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal proceeding,
such person had no reasonable cause to believe his conduct was unlawful. In the
case of an action brought by or in the right of the corporation, indemnification
of a Corporate Agent against expenses is permitted if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation; however, no indemnification is permitted in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
Court of Chancery or the court in which such proceeding was brought shall
determine upon application that despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to such indemnification. To the extent that a Corporate Agent has been
successful on the merits of such proceeding, whether or not by or in the right
of the corporation, or in the defense of any claim, issue or matter therein, the
corporation is required to indemnify the Corporate Agent for expenses in
connection therewith. Expenses incurred by a Corporate Agent in connection with
a proceeding may, under certain circumstances, be paid by the corporation in
advance of the final disposition of the proceeding as authorized by the board of
directors. The power to indemnify and advance the expenses under the DGCL does
not exclude other rights to which a Corporate Agent may be entitled under the
certificate of incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.

Under the DGCL, a Delaware corporation has the power to purchase and
maintain insurance on behalf of any Corporate Agent against any liabilities
asserted against and incurred by him in such capacity, whether or not the
corporation has the power to indemnify him against such liabilities under the
DGCL.

As permitted by the DGCL, the Simione's Certificate of Incorporation, as
amended, and Bylaws, as amended, contain a provision which limit the personal
liability of directors for monetary damages for breach of their fiduciary duties
as directors except to the extent such limitation of liability is prohibited by
the DGCL. In accordance with the DGCL, these provisions do not limit the
liability of any director for any breach of the director's duty of loyalty to
the Simione or its stockholders; for acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; for certain
unlawful payments of dividends or stock repurchases under Section 174 of the
DGCL; or for any transaction from which the director derives an improper
personal benefit. These provisions do not limit the rights of Simione or any
stockholder to seek an injunction or any other non-monetary relief in the event
of a breach of a director's fiduciary duty. In addition, these provisions apply
only to claims against a director arising out of his role as a director

II-1
<PAGE> 373

and do not relieve a director from liability for violations of statutory law,
such as certain liabilities imposes on a director under the federal securities
laws.

In addition, Simione's Certificate of Incorporation, as amended, and
Bylaws, as amended, provide for the indemnification of directors and officers
for certain fines, liabilities, costs and expenses incurred by them in
connection with the defense or settlement of claims asserted against them in
their capacities as directors and officers to the fullest extent authorized by
the DGCL.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<C> <S> <C>
5.1* -- Opinion of Arnall Golden & Gregory, LLP with respect to
legality of the securities to be registered
8.1* -- Opinion of Baker & McKenzie regarding tax matters
23.1* -- Consent of Arthur Andersen LLP
23.2* -- Consent of Ernst & Young LLP
23.3* -- Consent of Grant Thornton, LLP
23.4 -- Consent of Arnall Golden & Gregory, LLP (included in the
opinion filed as Exhibits 5.1 to this Registration
Statement)
23.5 -- Consent of Baker & McKenzie (included in the opinion filed
as Exhibit 8.1 to this Registration Statement)
24.1 -- Powers of Attorney (included in the signature page of this
Registration Statement)
99.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of October 25, 1999, by and between Simione, MCS,
Inc., Mestek, Inc. and certain major stockholders of Mestek,
Inc. (attached as Appendix A to the Proxy Statement/
Prospectus included as a part of this Registration
Statement)
99.2 -- Form of Warrant exercisable by Mestek, Inc. (incorporated
herein by reference to Exhibit 10.2 to the Registrant's
Current report on Form 8-K filed on September 15, 1999)
99.3 -- Form of Merger Option Agreement between Registrant and
Mestek, Inc. (incorporated herein by reference to Exhibit
10.2 to the Registrant's Current report on Form 8-K filed on
September 15, 1999)
99.4 -- Form of Proxy Card for Simione Central Holdings Inc.
Stockholders Meeting
99.5 -- Form of Proxy Card for MCS, Inc. Stockholders Meeting
</TABLE>

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

* Filed herewith

(b) Financial Statement Schedules -- None

ITEM 22. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes as follows:

1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

II-2
<PAGE> 374

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

4. That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the Registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.

5. That every prospectus (i) that is filed pursuant to the paragraph
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933 and is used in connection with an
offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for the purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

6. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-3
<PAGE> 375

7. That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first-class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-4
<PAGE> 376

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta and State of
Georgia, on the ninth day of February, 2000.

Simione Central Holdings, Inc.

By: /s/ BARRETT C. O'DONNELL
-----------------------------------
Barrett C. O'Donnell
Chairman

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby constitutes and appoints Barrett C. O'Donnell and George M. Hare, or any
one of them, as such person's true and lawful attorney-in-fact and agent with
full power of substitution for such person and in such person's name, place and
stead, in any and all capacities, to sign and to file with the Securities and
Exchange Commission, any and all amendments and post-effective amendments to
this Registration Statement, with exhibits thereto and other documents in
connection therewith, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or any substitute therefor,
may lawfully do or cause to be done by virtue thereof.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ R. BRUCE DEWEY President and Chief February 9, 2000
- --------------------------------------------- Executive Officer
R. Bruce Dewey (principal executive
officer)

/s/ BARRETT C. O'DONNELL Chairman of the Board of February 9, 2000
- --------------------------------------------- Directors
Barrett C. O'Donnell

/s/ GEORGE M. HARE Chief Financial Officer February 9, 2000
- --------------------------------------------- and Treasurer (principal
George M. Hare financial and accounting
officer)

/s/ WILLIAM J. SIMIONE, JR. Executive Vice President February 9, 2000
- ---------------------------------------------
William J. Simione, Jr.

/s/ MURALI ANANTHARAMAN Director February 9, 2000
- ---------------------------------------------
Murali Anantharaman
</TABLE>

II-5
<PAGE> 377

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GARY M. BREMER Director February 9, 2000
- ---------------------------------------------
Gary M. Bremer

/s/ JAMES A. GILBERT Director February 9, 2000
- ---------------------------------------------
James A. Gilbert

/s/ GREG WILSON Director February 9, 2000
- ---------------------------------------------
Greg Wilson

/s/ DANIEL J. MITCHELL Director February 9, 2000
- ---------------------------------------------
Daniel J. Mitchell

/s/ JESSE I. TREU Director February 9, 2000
- ---------------------------------------------
Jesse I. Treu
</TABLE>

II-6
<PAGE> 378

EXHIBIT INDEX

(a) Exhibits

<TABLE>
<C> <C> <S>
5.1* -- Opinion of Arnall Golden & Gregory, LLP with respect to
legality of the securities to be registered
8.1* -- Opinion of Baker & McKenzie regarding tax matters
23.1* -- Consent of Arthur Andersen LLP
23.2* -- Consent of Ernst & Young LLP
23.3* -- Consent of Grant Thornton, LLP
23.4 -- Consent of Arnall Golden & Gregory, LLP (included in the
opinion filed as Exhibits 5.1 to this Registration
Statement)
23.5 -- Consent of Baker & McKenzie (included in the opinion filed
as Exhibit 8.1 to this Registration
24.1 -- Powers of Attorney (included in the signature page of this
Registration Statement)
99.1 -- Amended and Restated Agreement and Plan of Merger, dated as
of October 25, 1999, by and between Simione, MCS, Inc.,
Mestek, Inc. and certain major stockholders of Mestek, Inc.
(attached as Appendix A to the Proxy Statement/Prospectus
included as a part of this Registration Statement)
99.2 -- Form of Warrant exercisable by Mestek, Inc. (incorporated
herein by reference to Exhibit 10.2 to the Registrant's
Current report on Form 8-K filed on September 15, 1999)
99.3 -- Form of Merger Option Agreement between Registrant and
Mestek, Inc. (incorporated herein by reference to Exhibit
10.2 to the Registrant's Current report on Form 8-K filed on
September 15, 1999)
99.4* -- Form of Proxy Card for Simione Central Holdings Inc.
Stockholders Meeting
99.5* -- Form of Proxy Card for MCS, Inc. Stockholders Meeting
</TABLE>

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

* Filed herewith.

II-7

<PAGE> 1
EXHIBIT 5.1

February 9, 2000

SIMIONE CENTRAL HOLDINGS, INC.
6600 Powers Ferry Road
Atlanta, Georgia 30339

Re: Simione Central Holdings, Inc. Corporation Registration
Statement on Form S-4 (No. 333_____)

Ladies and Gentlemen:

We refer to the registration statement on Form S-4 referenced above,
including amendments and exhibits thereto (the "Registration Statement") filed
under the Securities Act of 1933, as amended (the "Securities Act"), by Simione
Central Holdings, Inc., a Delaware corporation ("Simione"), with respect to the
issuance by Simione of up to 11,392,974 shares (the "Shares") of its common
stock, $.001 par value per share, upon completion of the proposed merger of MCS,
Inc. and Simione Central Holdings, Inc. (the "Merger") pursuant to a Second
Amended and Restated Agreement and Plan of Merger and Investment Agreement among
Simione, MCS, Mestek, Inc. and certain major stockholders of Mestek dated as of
October 25, 1999.

We have examined the originals or certified copies of such corporate
records, certificates of officers of Simione and/or public officials and such
other documents, and have made such other factual and legal investigations, as
we have deemed relevant and necessary as the basis for the opinions set forth
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies and the authenticity of the originals of such copies.

Based on our examination described above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that (i) the issuance by Simione of
the Shares in connection with the Merger has been duly authorized, and (ii) when
issued as described in the Registration Statement, the Shares will be legally
and validly issued, fully paid and non-assessable shares of common stock.

This opinion is limited to the general corporation laws of the State of
Delaware and the laws of the United States of America and we express no opinion
herein as to the effect of any other laws.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the Joint Proxy Statement/Prospectus which forms a part of the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the General Rules and Regulations of the Securities and
Exchange Commission.

Very truly yours,

/s/ ARNALL GOLDEN & GREGORY, LLP
--------------------------------
ARNALL GOLDEN & GREGORY, LLP

<PAGE> 1

Form of Tax Opinion

[DATE OF MERGER]

Stephen M. Shea
Chief Financial Officer
Mestek, Inc.
260 North Elm Street
Westfield, Massachusetts 01805

RE: OPINION AS TO U.S. FEDERAL INCOME TAX CONSEQUENCES OF MCS
TRANSACTIONS

Dear Sirs:

You have requested our opinion regarding certain federal income tax
consequences of the transaction (the "Transaction") consisting of a spin-off of
the shares of MCS, Inc., a Pennsylvania corporation ("MCS"), by Mestek, Inc., a
Pennsylvania corporation ("Mestek"), followed by a merger of MCS with and into
Simione Central Holdings, Inc., a Delaware corporation ("Simione").
Specifically, you have asked us whether the spin-off of MCS shares by Mestek to
its shareholders (the "Spin-off") and merger of MCS with Simione (the "Merger")
should qualify as non-recognition transactions for federal income tax purposes
under certain provisions of the Internal Revenue Code.

I. BASIS FOR OPINION

The opinion set forth herein is based upon: (i) the facts set forth
below, (ii) certain stated assumptions which we have made with your permission;
and (iii) representations of Mestek and Simione set forth in the representation
letters of this date attached to this opinion as Attachment A and Attachment B,
respectively. In rendering our opinion, we have reviewed copies of the documents
listed in Attachment C. With your permission, we have assumed their authenticity
and proper execution and that the transactions referred to therein have been (or
would have been) or will be carried out in accordance with the terms thereof. We
have not undertaken independently to verify the accuracy or completeness of any
of the matters referred to. In the event that any one or more of the above
matters is inaccurate or incomplete, the conclusions reached in this opinion may
be adversely affected.

<PAGE> 2
Mestek, Inc.
[Date of Merger]
Page 2

II. FACTS

A. Parties and Stock Ownership

Mestek is a public company whose common stock is traded on the New York
Stock Exchange. Mestek is principally engaged in the business of manufacturing
and selling HVAC equipment, metal forming equipment and extruded aluminum
products. Mestek itself, through its officers and employees, performs
substantial management and operational functions and activities necessary to
generate gross income and earn profit from its HVAC, metal forming and extruded
aluminum products business (hereinafter referred to as the "HVAC business" or
"Mestek business"). Mestek has approximately [ ] employees and officers engaged
in its HVAC business. Approximately $[ ] of Mestek's assets are devoted to the
HVAC business, which constitutes well in excess of five percent of Mestek's
total assets. Mestek has actively and continuously conducted its HVAC business
for more than the last five years and the HVAC business was not acquired within
the last five years. Mestek has not added or disposed of assets or changed or
altered its HVAC business in so substantial and fundamental a manner as to
constitute the acquisition or creation of a new or different business. Mestek
does not have a substantial amount of non-business assets.

Approximately [37] percent of the shares of Mestek are beneficially
owned by its largest shareholder, John E. Reed.

MCS is a wholly-owned subsidiary of Mestek. Mestek has owned all of the
shares of MCS since before 1995. MCS is primarily involved in the sales and
service of business applications software for the home health care services
marketplace (hereinafter referred to as the "home healthcare information systems
business" or "MCS business"). MCS itself, through its officers and employees,
performs substantial management and operational functions and activities
necessary to generate gross income and earn profit from its home healthcare
information systems business. MCS has approximately [ ] employees and officers
engaged in its home healthcare information systems business. Approximately $[ ]
of MCS's assets are devoted to the MCS business, which constitutes well in
excess of five percent of MCS's total assets. MCS has actively and continuously
conducted its home healthcare information systems business for more than the
last five years and the MCS business was not acquired within the last five
years. MCS has not added or disposed of assets or changed or altered its home
healthcare information systems business in so substantial and fundamental a
manner as to constitute the acquisition or creation of a new or different
business. MCS does not have a substantial amount of non-business assets.

Simione is a public company whose common stock is listed on the Nasdaq
National Market. Simione provides information systems, consulting and agency
support services to freestanding, hospital-based, and multi-office home health
care providers. Immediately prior

<PAGE> 3
Mestek, Inc.
[Date of Merger]
Page 3

to the Merger, Simione had [# OF C/S SHARES AFTER THE CONVERSION OF THE SERIES A
P/S - 11,817,259 - THEN ADJUSTED FOR THE REVERSE STOCK SPLIT] shares of common
stock issued and outstanding.

Nasdaq has informed Simione that it believes the Merger will require
Simione to file a new listing application for its common stock. This will
require Simione to satisfy criteria more stringent than those required for
continuing its existing listing on the Nasdaq National Market. Simione believes
that its common stock probably will not satisfy the more stringent criteria and
thus may be delisted from the Nasdaq National Market. Simione intends to appeal
Nasdaq's determination that a new listing application is require in these
circumstances.

If Simione's common stock loses its eligibility to be listed on the
Nasdaq National Market, Simione intends to apply to have its common stock listed
on the Nasdaq SmallCap Market. The Nasdaq SmallCap Market has similar but
somewhat less stringent criteria for listing. As a precautionary step, Simione
intends to engage in a reverse stock split so that its common stock price will
meet the requirements for the Nasdaq SmallCap Market. The reverse stock split
will be a one for [ ] split. Simione has represented that it believes its common
stock will qualify for listing on the Nasdaq SmallCap Market after the reverse
stock split and the Merger.

B. Background

This section describes the background of the Spin-off and Merger and
the development of the Transaction. The Transaction steps are further discussed
below in Paragraph II.C. of this opinion.

1. Original Simione-MCS Merger Agreement

Simione and Mestek commenced discussions in January 1999,
regarding a possible business combination between Simione and MCS. After
substantial negotiations and the requisite board of directors' approvals, the
parties executed a merger agreement (the "Original Merger Agreement") on May 26,
1999. The principal terms of the Original Merger Agreement are outlined as
follows:

(a) Mestek agreed to exchange its shares of MCS
for approximately 7.4 million shares of Simione stock, thus becoming the largest
shareholder of the merged Simione-MCS entity;

(b) Mestek will receive an option to purchase up
to 1,935,568 shares of Simione common stock (as adjusted for changes in
outstanding options prior to closing) in the event outstanding Simione options,
warrants and other conversion rights are exercised. To the extent that these
options, warrants and other

<PAGE> 4
Mestek, Inc.
[Date of Merger]
Page 4

conversion rights are exercised by Simione stockholders, the same rights vest
with Mestek on the same terms (including the same exercise price). This
contingent right was designed to prevent dilution of Mestek's ownership interest
in Simione after the closing of the Merger. Mestek has represented that it
intends to exercise these options as they become exercisable.

2. Simione-CareCentric Merger Agreement

Prior to execution of the Original Merger Agreement, Simione
began preliminary discussions with CareCentric Solutions, Inc. ("CareCentric")
about the possibility of acquiring CareCentric. On July 12, 1999, before closing
of the Original Merger Agreement could be consummated, Simione entered into a
merger agreement with CareCentric and acquired CareCentric pursuant to a merger
that was consummated on August 12, 1999. Pursuant to the CareCentric Merger
Agreement, CareCentric was merged into a wholly-owned subsidiary of Simione. The
merger agreement with CareCentric required Mestek's prior consent pursuant to
the Original Merger Agreement. As consideration for the merger, Simione issued
3,034,521 shares of convertible Simione Series A Preferred Stock ("Series A
Preferred Stock") to the former preferred stockholders and noteholders of
CareCentric and paid $3.00 per share in cash to the former common stockholders
of CareCentric (approximately $200,000 in the aggregate). All of these shares
were converted into 3,034,521 shares of Simione common stock on ____________
(i.e., on a one for one basis) pursuant to the terms of the Series A Preferred
Stock and the vote of the Simione shareholders on _______________.

Separately, the CareCentric Merger Agreement grants the former
CareCentric preferred stockholders the right to receive additional shares of
Simione common stock (up to a maximum of 3,034,521 additional shares) or, at
Simione's option, additional cash consideration if the average closing market
price of Simione common stock during the fourth quarter of 2000 is less than
$3.00 per share. The aggregate additional consideration due is the amount by
which the fourth quarter 2000 average Simione common stock price is below $3.00
(but not more than $1.50) times 3,034,521 (the original number of Simione
convertible Series A Preferred Stock issued to the former CareCentric preferred
shareholders). The former CareCentric preferred shareholders' contingent right
to receive additional consideration is a separate contract right conferred by
the CareCentric Merger Agreement and was not made part of the terms of the
Simione convertible Series A Preferred Stock. The right is not voluntarily
assignable by the former CareCentric preferred shareholders. Although the
Simione convertible Series A Preferred Stock was not registered, it was
transferable by private transaction such as a private placement. Similarly,
although the Simione common stock received by such shareholders is not
registrable (pursuant to the CareCentric Merger Agreement) until January 1,
2001, it is transferable by private transaction such as a private placement. If
Simione engages in a reverse stock split as expected, Simione intends to revise
the CareCentric Merger Agreement to adjust the price at which the former
CareCentric shareholders will be entitled to receive additional consideration.

<PAGE> 5
Mestek, Inc.
[Date of Merger]
Page 5

Simione has represented that it currently intends to exercise
its option to pay cash rather than issue additional Simione common stock to the
extent additional consideration becomes due to the former CareCentric preferred
shareholders.

3. First Amended and Restated Merger Agreement

The CareCentric merger did not affect the initial discussions
or negotiations surrounding the Simione-MCS merger. After the CareCentric merger
was completed, however, it became apparent to the boards of directors of Mestek,
MCS and Simione that the combined company needed a focused management team to
execute its business plan, better utilize its resources, pursue opportunities,
attract talent and obtain access to capital markets. In an effort to accomplish
these goals, Mestek proposed to spin-off MCS and invest in a new class of
Simione preferred stock to help cover the additional cash requirements incurred
by Simione in connection with the CareCentric merger and the performance of its
business plan.

The Mestek board of directors concluded at this time that both
Mestek and MCS would benefit in several ways if the two companies were
separated. First, the Mestek board recognized that the combined home health
information software business envisioned for Simione (including the CareCentric
and MCS businesses) needed to have widely held and traded common equity in order
to successfully attract and retain talented management and technical personnel.
It understood that talented personnel in the home healthcare information and
software industries consider stock-related compensation as a critical element of
their total compensation package. The Mestek board realized that the combined
business would be more attractive to such personnel as a widely held,
stand-alone, high-tech company rather than one in which substantial common
equity was held by a manufacturing company whose business was of a dramatically
different kind. Although the common equity of high-tech companies is generally
more volatile than companies in manufacturing industries, they frequently
attract significant premiums in the equity markets. The presence of a link to a
large industrial enterprise would thus make the opportunity to work at Simione
less attractive to current and prospective management and operational employees
with talent and experience in the relevant industries.

The Mestek board further recognized that the combined home
health information business would have greater access to the capital markets as
a widely held public company rather than one in which the dominant common equity
was held in large part by another company, especially one in a very different
industry. The board believed that, as a widely-held company, the combined
company would be better positioned to raise additional capital through either
debt securities or equity for internal growth or acquisitions in the future.

<PAGE> 6
Mestek, Inc.
[Date of Merger]
Page 6

The Mestek board also concluded at this time that the spin-off
of MCS would provide substantial benefits to Mestek by allowing its management
to focus exclusively on the operation and growth of its HVAC business. Mestek's
core businesses, including its HVAC business, involve skills and operations very
different from those critical to the home healthcare information and software
businesses. The Mestek board believed that the combined MCS/Simione/CareCentric
businesses did not fit the overall business plan of Mestek and that in the years
ahead its management could not adequately focus on the home healthcare
information and software business. The board realized that high-tech businesses
in emerging industries where innovation is at a premium often receive less
attention inside a larger industrial company in a mature manufacturing industry.

The Mestek board therefore concluded that spinning-off MCS
prior to its merger into Simione would achieve the corporate business objectives
of improving (1) the business prospects of both Mestek and the combined
MCS/Simione/CareCentric company by allowing each company's management to focus
on their respective businesses, (2) the ability of the combined
MCS/Simione/CareCentric company to attract and retain talented management and
operational personnel and (3) the position of the combined
MCS/Simione/CareCentric company to raise debt and equity capital.

In addition to the Spin-off, the parties determined that it
was necessary to amend the Original Merger Agreement to provide for investment
by Mestek in Simione preferred stock. The parties determined that the Spin-off
would delay the closing of the Merger, which in turn would delay the
contribution of the MCS cash reserves to the combined enterprise. These delays
made it necessary for a cash infusion by Mestek in order to satisfy Simione's
short-term cash flow needs. Consequently, the Original Merger Agreement was
amended on September 9, 1999 (the "First Amended and Restated Merger Agreement")
to reflect the occurrence of the Spin-off prior to the closing of the
Simione/MCS merger and to reflect the Mestek financial investment in the merged
entity.

Specifically, the First Amended and Restated Merger Agreement
made the Spin-off a condition precedent to the Merger. Mestek also agreed in the
First Amended and Restated Merger Agreement to invest $6 million in Simione in
exchange for (i) 5,600,000 shares of Simione Series B Preferred Stock ("Series B
Preferred Stock"), which will have voting rights equal to 11,200,000 shares of
Simione common stock, or approximately [36] percent of the voting power of
Simione after the Merger (assuming conversion of the Series A Preferred Stock of
Simione) and (ii) warrants to purchase 2,000,000 shares of Simione common stock
at a per share exercise price equal to the greater of $2.175 or the Nasdaq
closing price on the closing date of the Merger (not to exceed $3.00 per share),
both to be issued to Mestek at the closing of the Merger. The First Amended and
Restated Merger Agreement provided that the $6 million to be invested by Mestek
in Simione would consist of $3 million in cash and $3 million in forgiveness of
debt. The debt forgiveness will be a

<PAGE> 7
Mestek, Inc.
[Date of Merger]
Page 7

cancellation upon closing of the Merger of the $3 million secured promissory
note from Simione to Mestek dated September 9, 1999. This note represents a loan
made to Simione by Mestek at the time the First Amended and Restated Merger
Agreement was signed.

The First Amended and Restated Merger Agreement also provides
that the Simione board will consist of twelve directors, six of which will be
appointed by Mestek. In the event that the board of directors is deadlocked, the
Series B preferred shareholders will have the right to appoint a thirteenth
director.

4. Second Amended and Restated Merger Agreement

On October 25, 1999, the parties executed an amendment to the
First Amended and Restated Merger Agreement (as amended, the "Second Amended and
Restated Merger Agreement") regarding the right to designate six directors who
will be appointed to the Board of Directors of Simione after the Merger. The
amendment provides that the right to designate the six directors will vest in
the MCS shareholders rather than Mestek. These nominees will be nominated as
candidates for director as part of Simione's slate for 18 months after the close
of the Merger. In the event of a tie the owner of the Series B Preferred Stock
has the right to elect a thirteenth director.

5. Issuance of Simione Notes

In November 1999, Mestek loaned Simione $850,000, and Simione
issued a promissory note for $850,000 to Mestek (the "Simione Note"). The
Simione Note has a November 2002 maturity date and requires interest to be paid
at a rate of 11 percent per annum. The Simione Note is convertible at Mestek's
option upon or after the Merger into Simione Series C Preferred Stock ("Series C
Preferred Stock") on the basis of one share of Series C Preferred Stock for each
dollar of outstanding debt. The Series C Preferred Stock issued would have a par
value of one dollar, would receive cumulative dividends at the rate of 12
percent per year and would have the right to vote as a class on all matters to
be voted on by the shareholders of Simione. Mestek has represented that as part
of the Transaction it intends to exercise its option to convert the "Simione
Note" on or immediately after the closing date of the Merger.

On February 4, 2000, Mestek loaned Simione an additional
$1,000,000 and Simione issued a note to Mestek with terms substantially similar
to those under which Mestek earlier lent Simione $3,000,000. The additional
$1,000,000 debt will be forgiven in exchange for the Series B Preferred Stock to
be issued to Mestek upon closing of the Merger. Accordingly, at closing of the
Merger, Mestek will invest $2,000,000 in Simione and will forgive a total of
$4,000,000 of debt in exchange for the Series B Preferred Stock and the warrants
described above.

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C. Transaction

The Transaction will be comprised of the following steps:

1. Spin-off

Mestek will distribute all of the stock of MCS to the Mestek
shareholders on a pro rata basis, without the surrender of any Mestek stock, in
a transaction intended to qualify as a nontaxable spin-off under Section
355(a)(1) of the Internal Revenue Code. After the Spin-off the shareholders who
own common stock in Mestek will own the same proportion of the common stock of
MCS.

2. Merger

After the Spin-off, MCS will merge with and into Simione under
Delaware and Pennsylvania law pursuant to the Second Amended and Restated Merger
Agreement, with Simione being the surviving corporation. The shareholders of MCS
will receive approximately [0.8506] shares of Simione common stock for each
share of MCS common stock they own. No fractional shares will be issued in the
transaction. Shareholders will be entitled to cash in lieu of any fractional
shares in an amount computed based on the Nasdaq price of Simione common stock
on the day after the merger is consummated.

The Simione shares received by the former shareholders of MCS
will be subject to a two-year "lock-up" restriction on resale after the
completion of the Merger, so that, after the Merger, MCS stockholders will
directly own a total of approximately [7,481,584] shares or approximately [38.7
PERCENT] of the outstanding common stock of Simione.

Accordingly, immediately following the Transaction and
assuming the conversion of the Series A Preferred Stock issued in the
CareCentric merger and the conversion of the Mestek promissory note into Series
C Preferred Stock, the former MCS shareholders will hold [7,481,584] shares of
Simione common stock out of a total of [16,264,313] shares of Simione common
stock. Thus, the former MCS shareholders will hold [7,481,584] out of
[16,264,313] total votes available on Simione common stock. In addition, for
reasons discussed in Paragraph IV.A.7. of this opinion, the former MCS
shareholders will also be considered to hold all of the Series B Preferred Stock
and the Series C Preferred Stock and thus hold an additional [12,050,000] votes
for the relevant federal income tax purposes.

- --------------------
1 All section references are to the Internal Revenue Code of
1986, as amended. All regulation references are to the Income
Tax Regulations thereunder.

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Accordingly, the former MCS shareholders will hold approximately [62.3] percent
of the total voting power of the combined company after the Transaction.

Mestek engaged HBL Gross Collins, P.C., CPAs ("Gross Collins"), to
render an opinion as to the fair market value of the equity interests in Simione
after completion of the Transaction. Gross Collins opined that the fair market
value of the equity interests held by the former MCS shareholders (which, for
the relevant federal income tax purposes, includes the Series B Preferred Stock
and the Series C Preferred Stock owned by Mestek) after completion of the
Transaction exceeds 50% of the total value of all equity interests in Simione.
In rendering our opinion, we assume that the Gross Collins valuation is true and
accurate and will remain so on the dates of the Spin-off and Merger.

III. OPINION

Based solely on the facts, representations and stated assumptions
described herein, it is our opinion that the Spin-off and the Merger should
qualify as nontaxable transactions for federal income tax purposes, except with
respect to dissenting MCS shareholders who receive cash in lieu of Simione
shares and also MCS shareholders who receive cash in lieu of fractional shares
of Simione stock. More specifically, for such purposes:

Spin-off

A. Pursuant to section 355(c), Mestek should not recognize
taxable income, gain or loss upon the Spin-off;

B. Pursuant to section 355(a)(1), the shareholders of Mestek
should not recognize taxable income, gain or loss on the
receipt of all of the shares of MCS in the Spin-off;

C. Pursuant to section 358(a)(1), the basis of MCS and Mestek
shares in the hands of each shareholder following the Spin-off
should be the same as the basis of the Mestek shares held
immediately before the Spin-off, allocated in proportion to
the fair market value of each; and

D. Pursuant to section 1223(l), the holding period of the MCS
shares in the hands of each Mestek shareholder should include
the period during which the shares of Mestek have been held by
each such shareholder as a capital asset or a section 1231
asset.
<PAGE> 10
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Merger

AA. The statutory merger of MCS with and into Simione should
constitute a reorganization within the meaning of section
368(a)(1)(A);

BB. MCS and Simione should be parties to the reorganization under
section 368(b);

CC. Pursuant to section 361(a), no taxable income, gain or loss
should be recognized by MCS on the transfer of its assets to
Simione and the assumption by Simione of the liabilities of
MCS;

DD. Pursuant to section 362(b), the basis of the assets of MCS in
the hands of Simione should be the same as the basis of those
assets in the hands of MCS immediately before the merger;

EE. Pursuant to section 1223(l), the holding period of the MCS
assets in the hands of Simione should include the period
during which the assets were held by MCS;

FF. Pursuant to section 354(a), MCS shareholders, except for
dissenting shareholders, should not recognize taxable income,
gain or loss upon their receipt of Simione stock in exchange
for all of the outstanding stock of MCS;

GG. Pursuant to section 1223(l), The holding period of the Simione
stock received by the MCS shareholders should include the
period during which the stock of MCS was held by the MCS
shareholders.

HH. Simione should succeed and take into account the items of MCS
described in section 381(c);

II. Simione should succeed to and take into account the earnings
and profits or deficit in earnings and profits of MCS as of
the date of the merger; and

JJ. The payment of cash by Simione to MCS shareholders in lieu of
fractional shares of Simione stock and the payment of cash by
Simione to dissenting MCS shareholders should be taxable as a
redemption of the exchanged MCS stock under section 302.

The above opinions are based upon the provisions of the Code,
its legislative history, existing Treasury Regulations promulgated thereunder,
pertinent judicial authorities, published rulings of the Internal Revenue
Service and such other authorities as we have considered relevant, in each case
as existing on the date hereof. We express no opinion on any matter or the
application of any provision of the Code other than those expressly referred to
herein.

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IV. ANALYSIS

A. Qualification of Spin-off under Section 355

1. Spin-off of Control

Section 355(a)(1)(A) provides that in order for a spin-off to
qualify for section 355 treatment, the distributing corporation must distribute
stock or securities of "a corporation. . . which it controls immediately before
the spin-off." Control is defined as ownership of at least 80 percent of the
total combined voting power of all classes of stock entitled to vote and at
least 80 percent of all other classes of stock. The transaction should meet the
requirements of section 355(a)(1)(A)(i) and (D)(i) because Mestek (which is the
"distributing corporation" or "distributing" within the meaning of section 355
and the regulations), will distribute to the Mestek shareholders all of the
outstanding shares of MCS, a corporation that Mestek controlled immediately
before the spin-off (which is the "controlled corporation" or "controlled"
within the meaning of section 355 and the regulations thereunder). The spin-off
so qualifies even though it is not part of a section 368(a)(1)(D)
reorganization.(2)

2. Independent Business Purpose

The transaction will be carried out for an independent
corporate business purpose as required by Treas. Reg. ss.1.355-2(b). Such a
purpose is a non-federal tax purpose germane to the business of the distributing
corporation, the controlled corporation, or the affiliated group of which the
distributing corporation is a member. In this case, the affiliated group is the
group of which Mestek is the parent.(3) The business purposes for the Spin-off
are described in the representation letter from Mestek in Attachment A. We
believe that these purposes constitute independent corporate business purposes
within the meaning of the above-cited regulation.

The Service has published a set of ruling guidelines for
purposes of determining whether the Service will issue a private letter ruling
that a spin-off qualifies as a section 355 spin-off.(4) The ruling guidelines
include a non-exclusive list of business purposes which may

- -------------------------------------
2 Section 355(a)(2)(C).

3 See the definition set forth in Treas. Reg.
ss.1.355-3(b)(4)(iv).

4 Rev. Proc. 96-30, 1996-1 C.B. 696.

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be relied upon in seeking a private letter ruling for a spin-off.(5) For ruling
purposes, the Service generally recognizes a "fit and focus" business purpose as
valid support for the issuance of a favorable section 355 ruling. A fit and
focus spin-off is specifically described as a separation which is intended to
"enhance the success of the businesses by enabling the corporations to resolve
management, systemic, or other problems that arise (or are exacerbated) by the
taxpayer's operation of different businesses within a single corporation or
affiliated group." The Service's description of a "fit and focus" business
purpose therefore is consistent with the business purpose which Mestek
represents to be among the business purposes for the Spin-off.

The Service's letter ruling procedure, however, generally limits "fit
and focus" rulings to cases in which the distributing corporation is (i)
publicly traded and (ii) has no "significant shareholders." A "significant
shareholder" is defined as any person who directly or indirectly, or together
with related persons, owns 5 percent or more of any class of stock of the
distributing or controlled corporations and who actively participates in the
management or operation of the distributing or controlled corporations.(6) The
Service, however, has demonstrated a willingness to issue favorable rulings in
circumstances involving 5 percent shareholders. For example, in Private Letter
Ruling 199948022, the Service provided a favorable "fit and focus" ruling where
a more than five percent shareholder had represented that the shareholder's
ownership was in the nature of a passive investment. Although John E. Reed's
ownership is in excess of 5 percent of Mestek, it has been represented that he
will act only as an outside director of Simione, will not be an officer of
Simione or be involved in the day-to-day management of the company.(7) In
addition, it should be noted that the significant shareholder limitation for a
fit and focus business purpose is a ruling guideline only, and is not
substantive law. Therefore, we believe that Mestek's stated corporate business
purpose for the Spin-off should be valid for section 355 purposes.

3. The Device Requirement

Under section 355(a)(1)(B), a spin-off transaction must not be
used principally as a device for the distribution of the earnings and profits of
the distributing or the controlled corporation. Whether a transaction is such a
"device" is determined based upon all the facts and circumstances, including,
but not limited to, the existence or absence of specified "device

- -----------------------------------
5 Id.

6 Section 2.05(3) of Rev. Proc. 96-30, 1996-1 C.B. 696.

7 See, also, e.g., PLR 9843015 (July 21, 1998) (pro rata
spin-off qualified under section 355 with a "fit and focus"
business purpose notwithstanding the presence of a greater
than 5% shareholder where such shareholder was only an outside
director of the controlled corporation, was not an officer of
the controlled corporation and was not involved in the
day-to-day management of the controlled corporation).

<PAGE> 13
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factors" and "non-device factors."(8) In this case, the only applicable "device"
factor is that the MCS stock will be distributed pro rata to all Mestek
shareholders. A post-spin exchange of the controlled corporation's stock may be
a device factor. However, under the regulations, an exchange of stock for stock
in pursuance of a plan of reorganization in which an insubstantial amount of
gain or loss is recognized is not taken into account under the device clause.(9)
The fact that neither Mestek nor MCS has a substantial amount of non-active
business assets will be taken as a non-device factor. Moreover, the Transaction
(including the Spin-off) is motivated by sound corporate business purposes.
Therefore, balancing the above factors, the Spin-off should not offend the
device requirement.

4. The Active Business Test

The distributing and the controlled corporation must each be
engaged immediately after the Spin-off in the active conduct of a trade or
business.(10) This requires that each corporation engage in a specific group of
activities for the purpose of earning income or profit; the corporation itself
(through its own officers and employees) must perform active and substantial
management and operational functions.(11) There is no requirement in Section
355(b) that any specific percentage of a corporation's assets be devoted to the
active conduct of a trade or business.(12) The Internal Revenue Service will
rule that an active business satisfies the requirement of Section 355(a)(2)(A)
if the value of the assets of that business equal at least 5 percent of the
total assets of the corporation conducting the business.(13) It has been
represented to us that Mestek actively conducts its HVAC business and MCS
actively conducts its home healthcare information systems business,
respectively, with their own respective officers and employees performing
substantial management and operational functions. Mestek has also represented
that more than five percent of the assets of Mestek and MCS are devoted to the
conduct of the HVAC and the home healthcare information systems businesses,
respectively. As a result, the Merger should meet the active business test in
terms of the value of the assets used in the active conduct of a trade or
business.

- -----------------
8 Treas. Reg. ss.1.355-2(d)(2)(i)-(iv).

9 Treas. Reg. ss.1.355-2(d)(2)(iii)(E).

10 Section 355(b)(1)(A).

11 Treas. Reg. ss.1.355-3(b).

12 Rev. Rul. 73-44, 1973-1 C.B. 182.

13 Section 4.01(33) of Rev. Proc. 99-3, I.R.S. 1991-1, 103.

<PAGE> 14
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The active business of the distributing and controlled
corporations must also have been conducted for at least five years prior to the
spin-off (the "five-year period") under section 355(b)(2)(B). The fact that a
business has undergone changes in the five-year period is immaterial so long as
the change is not fundamental enough to constitute the acquisition or adoption
of a new business.(14) The trade or business must not have been acquired within
the five-year period in a transaction in which gain or loss was recognized in
whole or in part under section 355(b)(2)(C). Mestek has represented that both
Mestek and MCS have been actively conducting the Mestek and MCS businesses,
respectively, for at least the last five years. It has been further represented
that neither business has been altered or modified so substantially or
fundamentally that a new or different business was created or acquired. As a
result, the Spin-off should meet the five-year requirement of the active
business test.

Section 355(b)(2)(D) requires, in addition, that control of a
corporation conducting an active trade or business not have been acquired by the
distributing corporation within the five-year period except solely through
transactions in which no taxable gain or loss was recognized. Mestek has
represented that it has had continuous control of MCS since before 1995, so the
control prong of the active business requirement should also be met.

5. Continuity of Interest Requirement

Section 355 only applies to a spin-off if it merely effects a
readjustment of continuing interests in the property of the distributing and
controlled corporations.(15) Section 355 requires that one or more persons, who,
directly or indirectly, were the owners of the enterprise prior to the spin-off
or exchange own, in the aggregate, an amount of stock establishing a continuity
of interest in each of the modified corporate forms in which the enterprise is
conducted after the separation. Under Treas. Reg. ss.1.355-2(c), a planned
post-division sale for cash of either distributing or controlled corporation
stock could result in a violation of the continuity of interest requirement even
if the device clause were not implicated. However, a merger in which stock
consideration is received by the historic distributing corporation shareholders
should not violate the continuity of interest rule.(16) Consequently, the
planned Spin-off of the shares in MCS to Mestek's shareholders should meet the
continuity of interest requirement.

- -------------------------------
14 Treas. Reg. ss.1.355-3(b)(ii).

15 Treas. Reg. ss.1.355-2(c).

16 See Rev. Rul. 75-406, 1975-2 C.B. 125.

<PAGE> 15
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6. Inapplicability of Section 355(d)

Section 355(d) provides that in the case of a "disqualified
distribution," the distributing corporation will recognize taxable gain on the
shares of the controlled corporation, which it distributes. A spin-off is a
disqualified spin-off if, immediately after it is made, any person holds
"disqualified stock" in either the distributing or controlled corporation
representing fifty percent or more of the voting power or value of the stock of
such corporation. As relevant here, "disqualified stock" means (i) stock
acquired by purchase within the five-year period ending on the date of a
spin-off, and (ii) stock received in a spin-off with respect to stock described
in (i). Paragraphs (5) through (8) of section 355(d) set forth a complex set of
rules determining what constitutes a "purchase."

It has been represented that no one person (treating all
related persons within the meaning of section 267(b) as one person) has acquired
50 or more percent of the common stock of Mestek within the five years preceding
the date of the Spin-off. Accordingly, section 355(d) should be inapplicable to
the Spin-off.

7. Inapplicability of Section 355(e)

Under Section 355(e), if section 355 otherwise applies to a
spin-off but the spin-off is part of a plan or series of related transactions
pursuant to which one or more persons acquire directly or indirectly a "50
percent or greater interest," measured either by the total combined voting power
or the total combined value of all shares of all stock in the distributing
corporation or the controlled corporation, then the distributing corporation
recognizes gain on the shares of the controlled corporation that are
distributed.(17) A plan is presumed to exist under Section 355(e)(2)(B) if one
or more persons acquire a 50 percent or greater interest in a corporation within
two years before or two years after a spin-off.

There has been no authoritative guidance from the Internal
Revenue Service to date regarding the application of section 355(e).
Specifically, there has been no authoritative guidance on what constitutes a "50
percent or greater interest" specifically for purposes of section 355(e) (beyond
the cross-reference in Section 355(e)(4)(A) to the definition of that term
provided by section 355(d)(4)). On August 19, 1999, Proposed Regulations under
section 355(e) were issued which provide guidance on the application of the
"plan or series of related transactions" provisions of section 355(e).(18) While
these proposed regulations are instructive, they are proposed to be effective
only with respect to spin-offs occurring on or after the date final regulations
are published in the federal register. The only authoritative guidance available
on the application of section 355(e) is in the legislative history and committee
reports relating to the provision.

- --------------------------------
17 Section 355(e)(2)(A).

18 Proposed Treas. Reg.ss.1.355-7, 64 Fed. Reg. 46155 (1999).

<PAGE> 16
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That portion of the "Blue Book" describing section 355(e)
states that a public offering of sufficient size can result in an acquisition
that causes gain recognition under Section 355(e).(19) Whether a corporation is
"acquired" for section 355(e) purposes is determined under the rules similar to
those of section 355(d), except that acquisitions are not restricted to
"purchase" transactions stock." According to the staff of the Joint Committee on
Taxation, "[w]hether a corporation is acquired is determined under rules similar
to those of present section 355(d), except that acquisitions would not be
restricted to purchase transactions."(20)

(a) Vote

(i) Attribution. Section 355(e)(4)(C)(ii)
attributes all of the stock held by a corporation to its shareholders for
section 355(e) purposes, without regard to the percentage of stock held by the
shareholder. Under this rule, all of the voting power of the Series B Preferred
Stock and the Series C Preferred Stock held by Mestek will be attributed to its
shareholders.

(ii) Voting Power. The Service and the courts
generally measure voting rights by reference to the ability of holders of a
class of shares to elect members of the board of directors. Measurement of
voting rights is unaffected by whether the stock is common or voting
preferred.(21) The Series B Preferred Stock and the Series C Preferred Stock
carry the ability to elect members to the board of directors and should be
treated as voting stock for purposes of the section 368(c) control test.

The Series C Preferred Stock has the same voting power as the
Simione common stock: one vote per share. A share of the Series B Preferred
Stock, however, carries more voting rights than a share of the Simione common
stock. Each share of Series B Preferred Stock has twice the voting power of a
share of Simione common stock: two votes per share. The voting power represented
by a share of preferred is greater than the voting power of common stock of
equivalent value. The courts, however, have respected the voting interests of
shares even when the voting interest is disproportionately large with respect to
fair market

- -------------------
19 General Explanation of Tax Legislation Enacted in 1997,
prepared by the staff of the Joint Committee on Taxation,
December 17, 1997 (the "Blue Book") at 199.

20 Blue Book at 199.

21 See, Rev. Rul. 69-126, 1969-1 C.B. 218 (preferred stock with
the ability to elect three out of eight members of the
company's board of directors represented 3/8 of the voting
power of all classes of stock).

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value.(22) The Service has also issued several favorable private letter rulings
in which control of a subsidiary corporation was established through the use of
stock with voting rights that were disproportionate to value.(23) Therefore, the
Series B Preferred Stock should be respected as voting stock, with each share of
Series B Preferred Stock representing twice the amount of voting power as each
share of Simione common stock.

After the Transaction, the former MCS shareholders will hold
[7,481,584] shares of Simione common stock out of a total of [16,264,313] shares
of Simione common stock. Thus, the former MCS shareholders will hold [7,481,584]
out of [16,264,313] total votes available on Simione common stock. In addition,
the former MCS shareholders will also be considered to hold all of the Simione
Series B Preferred Stock and the Simione Series C Preferred Stock and thus hold
an additional [12,050,000] votes. Accordingly, the former MCS shareholders will
hold approximately [62.3] percent of the total voting power of the combined
company after the Transaction.

(iii) Interim Voting Agreement Regarding the
Simione Board. As described above, voting power is generally determined on the
basis of power to elect directors.(24) Based on the share ownership described
above, the former MCS shareholders generally will be able to elect the majority
of the Simione directors. Pursuant to the Second Amended and Restated Merger
Agreement, for the 18-month period following completion of the Transaction, the
former MCS shareholders will have the ability to elect six out of twelve
directors and, in the event of a tie, will be able to elect a thirteenth
director. Accordingly, the former MCS shareholders should be viewed as having
more than 50% of the total voting

- ----------------------
22 In Anderson-Clayton Securities Corporation v. Commissioner, 35
B.T.A. 795 (1937), the court held that parent and subsidiary
corporations were affiliated where the parent owned 100
percent of the preferred stock and 64 percent of the common
stock of the subsidiary. The Preferred Stock held by the
parent corporation had 50 votes per share, and the common
stock had one vote per share.

23 See, e.g., PLR 9802048 (July 11, 1997) (disproportionate
voting rights respected where class of stock distributed to
shareholders in spin-off represented 80% of voting power but
only 30% of value); PLR 9547049 (June 2, 1995) (preferred
stock with a fair market value of less than 5% of outstanding
shares but with the right to elect 55% of the directors
treated as possessing 55% of voting power); PLR 9409043
(December 9, 1993) (disproportionate voting rights between two
classes of common stock respected where the first class
received three votes per share and second class received one
vote per share). PLR 8631014 (April 28, 1986)
(disproportionate voting rights respected for two classes of
common stock, one with 0.6 votes per share and the other with
1.4 votes per share); PLR 8030007 (April 14, 1980) (section
368(c) control test met where distributing corporation held
stock representing 80% of voting power but only 40% of value
and disproportionate voting rights automatically terminated
after a period of years).

24 See Rev. Rul. 69-126, 1969-1 C.B. 218 (voting power determined
on basis of vote for directors under Section 1504(a)).

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power of Simione after the Transaction both during the period in which the
interim voting agreement is in place and thereafter.

(b) Value

(i) Attribution. Section 355(e)(4)(C)(ii)
attributes all of the stock held by a corporation to its shareholders for
section 355(e) purposes, without regard to the percentage of stock held by the
shareholder. Under this rule, the value of the Series B Preferred Stock and the
Series C Preferred Stock held by Mestek will be attributed to its shareholders.

(ii) Valuation Study. Mestek engaged HBL Gross
Collins, P.C., CPAs ("Gross Collins"), to render an opinion as to the fair
market value of the equity interests in Simione after completion of the
Transaction. Gross Collins opined that the fair market value of the equity
interests held by the former MCS shareholders after completion of the
Transaction exceeds 50% of the total value of all equity interests in Simione.
In rendering our opinion, we assume that the Gross Collins valuation is true and
accurate and will remain so on the dates of the Spin-off and Merger.

B. Qualification of the Merger under Section
368(a)(1)(A)

1. Statutory Requirements

A reorganization under Section 368(a)(1)(A) is
defined as "a statutory merger or consolidation." In a statutory merger, one
corporation directly acquires all of the assets and liabilities of a target
corporation by operation of law, and the target corporation ceases to exist. In
order to qualify as a merger under Section 368(a)(1)(A), the merger or
consolidation must be effected pursuant to the applicable corporate laws of the
United States, a state or territory of the United States, or the District of
Columbia. It is our assumption that the Merger of MCS and Simione will be
accomplished in full compliance with the applicable laws of the states of
Delaware and Pennsylvania.(25) Accordingly, we believe that the statutory merger
requirement of Section 368(a)(1)(A) will be satisfied.

2. Judicial Requirements of Reorganizations

Reorganizations not only need to satisfy the
statutory requirements, but also need to satisfy three judicial requirements in
order for a transaction to qualify as a tax-free reorganization. These judicial
requirements are business purpose, continuity of business

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25 Treas. Reg. ss.1.368-2(b)(1).

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enterprise, and the continuity of shareholder interest. The judicial
requirements of reorganizations have been developed through case law over the
years and have been adopted in the Treasury Regulations under section 368.

(a) Business Purpose

There must be a valid corporate business purpose for
the reorganization.(26) This requirement is codified in Treas. Regs.
ss.1.368-1(b), ss.1.368-1(c), and ss.1.368-2(g). A valid business purpose is
generally any reasonable non-tax purpose for undertaking a transaction.

The business purposes for the Merger are described
in the representation letters from Mestek and Simione in Attachment A and
Attachment B, respectively. We believe that these satisfy the business purpose
requirements.

(b) Continuity of Business Enterprise

The second judicial requirement, the continuity of
business requirement, is codified in Treas. Reg. ss.1.368-1(d). Treas. Reg.
ss.1.368-1(d)(1) requires the surviving corporation, Simione, to either continue
a line of MCS's historic business or use a significant portion of the target
corporation's historic business assets in a business. An example in the
regulations provides that the continuity of business enterprise requirement may
be met where one of three equal lines of an acquired corporation's business is
continued by the acquiring corporation.(27)

It has been represented that Simione intends continue
the historic business of MCS or to use a significant portion of MCS's historic
business assets in its business after the Transaction. Accordingly, the
continuity of business enterprise requirement should be met.

The third judicial requirement, codified in Treas.
Reg. ss.1.368-1(e), is the continuity of shareholder interest requirement. The
purpose of this requirement is to prevent transactions that resemble sales from
qualifying for the nonrecognition of gain or loss available to corporate
reorganizations. Accordingly, the continuity of interest requirement

- -----------------------
26 Gregory v. Helvering, 293 U.S. 465 (1935).

27 Treas. Reg. ss.1.368-1(d)(5), Ex. 1.

<PAGE> 20
Mestek, Inc.
[Date of Merger]
Page 20

focuses on the character of the consideration received on the acquisition by the
former shareholders of the acquired corporate. The general rule is that equity
consideration received in the acquisition establishing a continuity of
interest.(28) For Internal Revenue Service ruling purposes, at least 50 percent
of the total consideration received by shareholders of the acquired corporations
must be in the form of equity.(29) In the Merger, the continuity of interest
requirement should be satisfied because the value of the Simione stock received
is more than 50 percent of the value of the total consideration provided in the
transaction. Generally, post-acquisition dispositions of Simione common stock by
MCS shareholders should not violate the continuity of interest requirement.(30)
However, redemptions by Simione or acquisitions of the Simione stock held by the
former MCS shareholders by persons related to Simione could violate the
continuity of interest requirement. For purposes of the continuity of interest
requirement, related persons include corporations that would be subject to
Section 304(a)(2).(31) However, Simione has represented that it has no plan or
intention to redeem its common stock or otherwise acquire, directly or
indirectly, Simione common stock held by former MCS shareholders.

3. Investment Companies

Section 368(a)(2)(F) provides that a transaction involving two
or more investment companies shall not be treated as a tax-free reorganization
with respect to any such investment company (and its shareholders) that is
considered undiversified. The definition of an "investment company" includes
corporations holding stock or securities worth 50 percent or more of the value
of its total assets where 80 percent or more of the value of its total assets
are held for investment. Whether a company is an investment company is
determined "immediately before" the transaction. It has been represented to us
that neither MCS nor Simione is an investment company within the meaning of
section 368(a)(2)(F) and thus the prohibition on nontaxable reorganizations of
investment companies should not apply.

- ------------------------
28 Helvering v. Minnesota Tea Co., 296 U.S. 378 (1935).

29 Section 3.02 of Rev. Proc. 77-37, 1977-2 C.B. 568.

30 Note, however, that any dispositions of Simione stock by the
former MCS shareholders could affect the section 355(e)
analysis. See Paragraph IV.A.7., supra.

31 Treas. Reg. ss.1.368-1(e)(2)(3).

<PAGE> 21
Mestek, Inc.
[Date of Merger]
Page 21

4. Cash Payments to Dissenting MCS shareholders and in
Lieu of Fractional Shares

Cash paid by an acquiring corporation in a Section 368(a)(1)
(A) reorganization that represents a separately bargained-for consideration may
be treated as the receipt of additional consideration under Sections 361(b) and
356(a) (i.e., "boot").(32) However, where a cash payment by the acquiring
corporation instead represents a mere mechanical rounding-off of the fractions
in the exchange and is not bargained for, the payment is treated under Section
302 as a redemption of the fractional share interests.(33) Similarly, cash
payments to dissenting shareholders in reorganizations are treated under Section
302 as a taxable redemption of the dissenters' shares.(34) As represented above,
the payment of cash in lieu of fractional shares of stock of Simione will not be
separately bargained for consideration and will be made for the purpose of
saving Simione the expense and inconvenience of issuing fractional shares.
Accordingly, in our opinion, the cash paid by Simione to the dissenters and to
the MCS shareholders in lieu of fractional shares should be treated under
Section 302 as a taxable redemption of the dissenters' shares and the fractional
share interests.

Very truly yours,

--------------------------
Baker & McKenzie

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

32 Tenney Ross v. United States, 173 F.Supp. 793 (1959).

33 Mills, et. al. v. Commissioner, 331 F.2d 321 (1964); Rev. Rul.
66-365, 1966-2 C.B. 116.

34 Rev. Rul. 73-102, 1973-1 C.B. 186.
<PAGE> 22
ATTACHMENT A

[Mestek letterhead]

[date of Spin-off]

Baker & McKenzie
815 Connecticut Avenue, N.W.
Suite 900
Washington, D.C. 20006

Gentlemen:

The undersigned, in his capacity as Chief Financial Officer of Mestek,
Inc., a Pennsylvania corporation ("Mestek") on its behalf and on behalf of MCS,
Inc., a Pennsylvania corporation ("MCS"), hereby certifies that the facts,
assumptions and representations that relate to Mestek and its affiliates with
respect to the distribution (the "Spin-off") of all of the outstanding shares of
MCS followed by the merger (the "Merger") of MCS with and into Simione Central
Holdings, Inc., ("Simione") and related transactions (the Spin-off, Merger and
related transactions are referred to collectively as the "Transaction") which
are described herein and are more fully described in the opinion of Baker &
McKenzie dated [date of Spin-off], are true, correct and complete in all
material respects, and particularly certifies as follows:

1. Mestek is a public company whose common stock is traded on the New
York Stock Exchange. Mestek is principally engaged in the business of
manufacturing and selling HVAC equipment, metal forming equipment and extruded
aluminum products. Mestek itself, through its officers and employees, performs
substantial management and operational functions and activities necessary to
generate gross income and earn profit from its HVAC, metal forming and extruded
aluminum products business (hereinafter referred to as the "HVAC business" or
"Mestek business"). Mestek has approximately [ ] employees and officers engaged
in its HVAC business. Approximately $[ ] of Mestek's assets are devoted to the
HVAC business, which constitutes well in excess of five percent of Mestek's
total assets. Mestek has actively and continuously conducted its HVAC business
for more than the last five years and the HVAC business was not acquired within
the last five years. Mestek has not added or disposed of assets or changed or
altered its HVAC business in so substantial and fundamental a manner as to
constitute the acquisition or creation of a new or different business. Mestek
does not have a substantial amount of non-business assets.

<PAGE> 23
Page 2

2. MCS is a wholly-owned subsidiary of Mestek. Mestek has owned
all of the shares of MCS since before 1995. MCS is primarily involved in the
sales and service of business applications software for the home health care
services marketplace (hereinafter referred to as the "home healthcare
information systems business" or "MCS business"). MCS itself, through its
officers and employees, performs substantial management and operational
functions and activities necessary to generate gross income and earn profit
from its home healthcare information systems business. MCS has approximately [
] employees and officers engaged in its home healthcare information systems
business. Approximately $[ ] of MCS's assets are devoted to the MCS business,
which constitutes well in excess of five percent of MCS's total assets. MCS has
actively and continuously conducted its home healthcare information systems
business for more than the last five years and the MCS business was not
acquired within the last five years. MCS has not added or disposed of assets or
changed or altered its home healthcare information systems business in so
substantial and fundamental a manner as to constitute the acquisition or
creation of a new or different business. MCS does not have a substantial amount
of non-business assets.

3. Immediately prior to the Spin-off, Mestek had outstanding
[8,879,505] shares of common stock; it had no other shares outstanding.

4. No one person (treating all related persons within the
meaning of section 267(b)(1) as one person) has acquired 50 or more percent of
the common stock of Mestek within the five years preceding the date of the
Spin-off.

5. In the aggregate, less than 50 percent of the common stock
of Mestek was transferred in the two years preceding the date of the Spin-off.

6. MCS had no indebtedness outstanding which would be treated
as stock for federal income tax purposes.

7. No part of the consideration to be distributed by Mestek in
the Spin-off will be received by a shareholder as a creditor, employee, or in
any capacity other than that of a shareholder of Mestek.

8. Following the Transaction, Mestek and MCS will continue the
active conduct of the Mestek and MCS businesses, respectively, independently
and each with its separate officers and employees.

9. The distribution of ProfitWorks by MCS prior to the
Transaction does not materially alter the MCS business.

10. The Spin-off is being carried out for the corporate business
purpose of improving (1) the business prospects of both Mestek and the combined
MCS/Simione company

- --------
(1) All section references are to the Internal Revenue Code of 1986, as
amended, unless otherwise specified.

<PAGE> 24
Page 3

by allowing each company's management to focus on their respective businesses,
(2) the ability of the combined MCS/Simione company to attract and retain
talented management and operational personnel and (3) the position of the
combined MCS/Simione company to raise debt and equity capital. The Spin-off is,
in whole or substantial part, motivated by this corporate business purpose.

11. Other than the ongoing Mestek stock buyback program, there is
no plan or intention by Mestek or MCS, directly or through any subsidiary
corporation, to purchase any of it's outstanding stock after the Transaction.

12. There is no plan or intention to liquidate Mestek, or to sell
or otherwise dispose of the assets of Mestek after the Transaction except in
the ordinary course of business.

13. Other than an approximately $600,000 intercorporate debt owed
by MCS to Mestek which was incurred in the ordinary course of business, no
intercorporate debt will exist between Mestek and MCS at the time of, or
subsequent to, the Spin-off. No indebtedness has been or will be canceled in
connection with the transaction.

14. There are no planned or intended transactions between Mestek
and MCS following the Spin-off, or between Mestek and Simione following the
Merger, either directly or indirectly, or, in the event there should be any
such transactions, payments made in connection with all such continuing
transactions will be for fair market value based on terms and conditions
arrived at by the parties bargaining at arms-length.

15. Mestek intends to exercise the approximately [1,943,708]
options to acquire Simione common stock to the extent they become exercisable.

16. Neither Mestek nor MCS is an investment company as defined in
section 368(a)(2)(F)(iii) and (iv).

17. Neither Mestek nor MCS is an S corporation (within the
meaning of section 1361(a)), and there is no plan or intention by Mestek or MCS
to make an S corporation election pursuant to section 1362(a).

18. No part of the consideration to be distributed by Mestek will
be received by a shareholder as a creditor, employee, or in any capacity other
than that of a shareholder of the corporation.

19. As part of the Transaction, Mestek intends to exercise its
option to convert the "Simione Note" into the Series C Preferred Stock on or
immediately after the Merger.

20. Pursuant to the Merger, MCS will merge with and into Simione,
with Simione surviving. The merger of MCS with and into Simione will be a valid
merger under the laws of Delaware and Pennsylvania.

<PAGE> 25
Page 4

21. The parties to the Merger are engaging in the Merger for the
corporate business purpose that the resulting combination will create an
opportunity to achieve significant operating efficiencies and better exploit
the individual companies complementary products in the home health care
information systems market.

22. The fair market value of the Simione stock and other
consideration received by each MCS shareholder in the Merger will be
approximately equal to the fair market value of the MCS stock surrendered in
the exchange.

23. The liabilities of MCS to be assumed by Simione and the
liabilities to which the transferred assets of MCS will be subject were
incurred by MCS in the ordinary course of its business.

24. Simione will not pay any expenses of MCS or the shareholders
of MCS, if any, incurred in connection with the transaction.

25. There is no intercorporate indebtedness existing between MCS
and Simione that was issued, acquired, or will be settled at a discount.

26. The parties to the Merger intend that the total fair market
value of all consideration other than Simione common stock received by the
shareholders of MCS in the Merger (including, without limitation, cash and
notes paid to shareholders) will not exceed fifty percent (50%) of the
aggregate fair market value of stock of MCS outstanding immediately prior to
the Merger. In addition, the amount of cash payments to dissenting shareholders
will not exceed five percent of the total consideration provided.

27. The parties to the Merger intend that (i) none of the
compensation received by any shareholder-employees of MCS will be separate
consideration for, or allocable to, any of their shares of MCS stock; (ii) none
of the shares of Simione common stock received by any shareholder-employees of
MCS will be separate consideration for, or allocable to, any employment
agreement or any covenants not to compete; and (iii) the compensation paid to
any shareholder-employees of Simione will be for services actually rendered and
will be commensurate with amounts paid to third parties bargaining at
arm's-length for similar services.

28. MCS intends to treat the Merger as a tax-free reorganization
under section 368.

29. MCS is not under the jurisdiction of a court in a title 11
or similar case within the meaning of section 368(a)(3)(a).

30. The fair market value of the assets of MCS transferred to
Simione in the Merger will equal or exceed the sum of the liabilities assumed
by Simione, plus the amount of liabilities, if any, to which the transferred
assets are subject.

31. The payment of cash to MCS shareholders in lieu of fractional
shares of Simione stock is not separately bargained for consideration and is
solely for the purpose of
<PAGE> 26

Page 5

saving Simione the expense and inconvenience of issuing fractional shares. The
total cash consideration that will be paid in the Merger to the MCS shareholders
instead of issuing fractional shares of Simione stock will not exceed 1% of the
total consideration to be issued in the transaction to MCS shareholders in
exchange for their shares of MCS stock. The fractional share interests of each
MCS shareholder will be aggregated and no MCS shareholder will receive cash for
fractional shares in an amount equal to or greater than the value of one full
share of Simione stock.

32. The undersigned is duly authorized to make all of the
representations set forth herein on behalf of Mestek.

Sincerely,

Mestek, Inc.

By: Stephen M. Shea
Chief Financial Officer

<PAGE> 27

ATTACHMENT B

[Simione letterhead]

[date of Spin-off]

Baker & McKenzie
815 Connecticut Avenue, N.W.
Suite 900
Washington, D.C. 20006

Gentlemen:

The undersigned, in his capacity as Chief Executive Officer and
President of Simione Central Holdings, Inc., a Delaware corporation ("Simione),
on its behalf hereby certifies that the facts, assumptions and representations
that relate to Simione and its affiliates with respect to the distribution by
Mestek Inc., a Pennsylvania corporation ("Mestek") of the all of the outstanding
shares of its subsidiary, MCS, Inc., a Pennsylvania corporation ("MCS"),
followed by the merger (the "Merger") of MCS with and into Simione Central
Holdings, Inc., ("Simione") and related transactions (the Spin-off, Merger and
related transactions are referred to collectively as the "Transaction") which
are described herein and are more fully described in the opinion of Baker &
McKenzie dated [date of Spin-off], are true, correct and complete in all
material respects, and particularly certifies as follows:

1. Simione is a public company whose common stock is listed on the
Nasdaq National Market. Simione provides information systems, consulting and
agency support services to freestanding, hospital-based, and multi-office home
health care providers. Immediately prior to the merger, Simione had [# OF C/S
SHARES AFTER THE CONVERSION OF THE SERIES A P/S - 11,817,259 - THEN ADJUSTED FOR
THE REVERSE STOCK SPLIT] shares of common stock issued and outstanding.

2. There are no planned or intended transactions between Mestek and
Simione following the Merger, either directly or indirectly or, in the event
there should be any such transactions, payments made in connection with all such
continuing transactions will be for fair market value based on terms and
conditions arrived at by the parties bargaining at arms-length.

3. In the event that the former CareCentric preferred shareholders are
entitled to receive additional consideration pursuant to the CareCentric Merger
Agreement, Simione will not issue additional Simione common stock in an amount
equal to or in excess of a number
<PAGE> 28
Page 2

that, when taken into account together with the total issued and outstanding
equity of Simione immediately following the Transaction and any shares issued in
accordance with paragraphs 4 and/or 5, below, would cause Mestek and the former
MCS shareholders to hold 50% or less of either (i) the total combined voting
power of Simione or (ii) the total value of all classes of shares of Simione.
Simione will elect to pay cash in lieu of Simione common stock as necessary to
abide by the preceding sentence. For purposes of this representation, Simione
common stock issued within two years of the date of the Spin-off pursuant to
exercise of the warrants issued to Mestek at closing of the Merger shall be
taken into account in determining the number of additional shares of Simione
common stock that may be issued.

4. Other than Simione common stock issued pursuant to options, warrants
or other rights existing on or issued on the date of the Merger, Simione does
not have a plan or intention to issue equity to the public or to any Simione
shareholder (as of the date of the Transaction) other than a former MCS
shareholder in amounts that, when taken into account with the total issued and
outstanding equity of Simione immediately following the Transaction and any
shares issued in accordance with paragraph 3, above, and 5, below, would cause
the MCS shareholders to hold 50% or less of either (i) the total combined voting
power of Simione or (ii) the total value of all classes of shares of Simione.

5. Other than Simione common stock issued pursuant to options, warrants
or other rights existing on or issued on the date of the Merger, Simone will not
issue equity to the public or to any Simione shareholder (as of the date of the
Transaction) other than a former MCS shareholder within the two years following
the Merger in amounts that would, when taken into account with the total issued
and outstanding equity of Simione immediately following the Transaction and any
shares issued in accordance with paragraphs 3 and 4, above, cause the MCS
shareholders to hold 50% or less of either (i) the total combined voting power
of Simione or (ii) the total value of all classes of shares of Simione.

6. Pursuant to the Merger, MCS will merge with and into Simione, with
Simione surviving. The merger of MCS with and into Simione will be a merger
effected under the laws of Delaware and Pennsylvania.

7. The parties to the Merger are engaging in the Merger for the
corporate business purpose that the resulting combination will create an
opportunity to achieve significant operating efficiencies and better exploit the
individual companies complementary products in the home health care information
systems market.

8. Neither Simione nor any person related to Simione, as defined under
Treas. Reg. ss.1.368-1(e), presently has any plan or intention to reacquire any
of the Simione common stock issued pursuant to the Merger.

9. Simione intends to continue the historic business of MCS or use a
significant portion of the historic business assets of MCS in a business.
<PAGE> 29

Page 3
10. Simione has no plan or intention to sell or otherwise dispose of
the assets of MCS acquired in the transaction, except for dispositions made in
the ordinary course of business or transfers described in section
368(a)(2)(c).(1)

11. Simione will not pay any expenses of MCS or the shareholders of
MCS, if any, incurred in connection with the transaction.

12. There is no intercorporate indebtedness existing between MCS and
Simione that was issued, acquired, or will be settled at a discount.

13. Simione is not "investment company" as defined in section
368(a)(2)(F)(iii) and (iv).

14. The parties to the Merger intend that the total fair market value
of all consideration other than Simione common stock received by the
shareholders of MCS in the Merger (including, without limitation, cash and notes
paid to shareholders) will not exceed fifty percent (50%) of the aggregate fair
market value of stock of MCS outstanding immediately prior to the Merger.

15. The parties to the Merger intend that (i) none of the compensation
received by any shareholder-employees of MCS will be separate consideration for,
or allocable to, any of their shares of MCS stock; (ii) none of the shares of
Simione common stock received by any shareholder-employees of MCS will be
separate consideration for, or allocable to, any employment agreement or any
covenants not to compete; and (iii) the compensation paid to any
shareholder-employees of Simione will be for services actually rendered and will
be commensurate with amounts paid to third parties bargaining at arm's-length
for similar services.

16. Simione intends to treat the transaction as a tax-free
reorganization under section 368.

17. The fair market value of the assets of MCS transferred to Simione
will equal or exceed the sum of the liabilities assumed by Simione, plus the
amount of liabilities, if any, to which the transferred assets are subject.

18. The payment of cash to MCS shareholders in lieu of fractional
shares of Simione stock is not separately bargained for consideration and is
solely for the purpose of saving Simione the expense and inconvenience of
issuing fractional shares. The total cash consideration that will be paid in the
merger to the MCS shareholders instead of issuing fractional shares of Simione
stock will not exceed 1% of the total consideration to be issued in the
transaction to MCS shareholders in exchange for their shares of MCS stock. The
fractional share interests of each MCS shareholder will be aggregated and no MCS
shareholder will receive cash for fractional shares in an amount equal to or
greater than the value of one full share of Simione Stock.

- --------
(1) All section references are to the Internal Revenue Code of 1986, as
amended, unless otherwise specified.

<PAGE> 30

Page 4

19. John E. Reed will act only as an outside director of Simione; he
will not be an officer of Simione and will not be involved in the day-to-day
management of the company.

20. In the event Simione's common stock is delisted from the Nasdaq
National Market, Simione intends to list its common stock on the Nasdaq SmallCap
Market and it believes that its common stock will qualify for such listing.

21. The undersigned is duly authorized to make all of the
representations set forth herein on behalf of Simione.

Sincerely,

Simione Central Holdings, Inc.

By: R. Bruce Dewey
Chief Executive Officer and President

<PAGE> 31

ATTACHMENT C

We have relied upon the following documents in rendering our
opinion without undertaking independently to verify the accuracy and
completeness of the matters covered thereby. Some or all of the conclusions
reached in this opinion might be adversely affected in the event any one of the
representations is incorrect.

a. Agreement and Plan of Merger Between CareCentric
Solutions, Inc., Simione Acquisition Corporation, and Simione Central Holdings,
Inc., dated July 12, 1999.

b. The First Amendment to the Agreement and Plan of
Merger and Investment Agreement among MCS, Inc, Mestek, Inc., Simione Central
Holdings, Inc., John E. Reed, Stewart B. Reed, and E. Herbert Burk, dated
September 9, 1999.

c. The Second Amendment to the Agreement and Plan of
Merger and Investment Agreement among MCS, Inc, Mestek, Inc., Simione Central
Holdings, Inc., John E. Reed, Stewart B. Reed, and E. Herbert Burk, dated
October 25, 1999.

d. MCS, Inc., Form 10/A: General Form for
Registration of Securities Pursuant to Section 12(G) of the Securities Exchange
Act of 1934, dated [draft].

e. Form S-4 of Simione Central Holding, Inc., dated
[ ].

f. [THE $850,000 NOTE AND TERMS OF SERIES C PREFERRED
STOCK]

g. [WAIVER LETTER AGREEMENT]

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report dated March 12, 1999 relating to the consolidated financial statements of
Simione Central Holdings, Inc. and subsidiaries as of December 31,1998 and for
the year ended December 31, 1998 and all references to our Firm included in or
made part of this Form S-4 registration statement.

/s/ ARTHUR ANDERSEN LLP
- -----------------------
ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 8, 2000

<PAGE> 1

EXHIBIT 23.2

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Summary
Historical Financial Data" and "Experts" and to the use of our reports dated
February 23, 1998 pertaining to Simione Central Holdings, Inc. and February 26,
1999 pertaining to CareCentric Solutions, Inc., in the Registration Statement
(Form S-4 No. 333-______) and related Prospectus of Simione Central Holdings,
Inc. for the registration of 11,392,974 shares of its common stock.

Atlanta, Georgia
February 8, 2000

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated July 9, 1999 (except for Notes 1, 9, 11
and 12, as to which the date is September 9, 1999) accompanying the financial
statements of MCS, Inc. as of December 31, 1998 and 1997 and for each of the
years in the three year period ended December 31, 1998. We hereby consent to
the inclusion of said report which appears in the Registration Statement of
Simione Central Holdings, Inc. on Form S-4, relating to MCS, Inc.'s above
described financial statements.

We also consent to the reference to us under the headings "Summary
Historical Financial Data" and "Experts" in such Registration Statement.

/s/ Grant Thornton LLP

Boston, Massachusetts
February 9, 2000

<PAGE> 1

SIMIONE CENTRAL HOLDINGS, INC.
SPECIAL MEETING IN LIEU OF AN ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Barrett C. O'Donnell and R. Bruce Dewey as
proxies to represent the undersigned at the Annual Meeting of Stockholders to be
held at the offices of the Company, 6600 Powers Ferry Road, Atlanta, Georgia
30339, on March 7, 2000 at 10:00 a.m. and at any adjournment thereof, and to
vote the shares of stock the undersigned would be entitled to vote if personally
present, as indicated below.

1. Proposal to approve the Second Amended and Restated Agreement and Plan of
Merger and Investment Agreement dated as of October 25, 1999 (the
"Agreement"), by and among Simione, MCS, Inc., Simione Central Holdings,
Inc., Mestek, Inc. and certain major stockholders of Mestek pursuant to which
MCS will merge with and into Simione and each share of MCS' common stock will
be converted into approximately 0.85 shares of Simione common stock and
Mestek will invest a total of $6 million into Simione in exchange for Series
B Preferred Stock, warrants and options, and under such other terms and
conditions as are set forth in the Agreement:

FOR [ ] AGAINST [ ] ABSTAIN [ ]

<TABLE>
<S> <C> <C>
2. ELECTION OF DIRECTORS FOR all nominees below (except WITHHOLD AUTHORITY to vote for
as marked to the contrary below) [ ] all nominees below [ ]
</TABLE>

Barrett C. O'Donnell, James A. Gilbert,
Dr. David O. Ellis, William J. Simione, Jr., Jesse I. Treu and Daniel J.
Mitchell

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, PRINT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.

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

3. To approve the conversion of the Series A Preferred Stock into shares of
Simione common stock.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

4. To approve the increase in the number of shares reserved for issuance under
the Simione Central Holdings, Inc. Omnibus Equity-based Incentive Plan from
1,250,000 shares to 2,250,000 shares of Common Stock, $.001 par value per
share.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

5. To authorize the board of directors to amend Simione's certificate of
incorporation to effect a reverse stock split.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE

6. To amend Simione's Certificate of Incorporation to increase Simione's
authorized common stock, par value $.001 per share, from 20 million shares to
40 million shares if the reverse stock split is not completed.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

7. The adjournment of the special meeting, if necessary, to permit further
solicitation of proxies if there are not sufficient votes at the time of the
special meeting to approve the merger agreement.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

8. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
CONTRARY INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED FOR THE PROPOSAL TO
APPROVE THE AGREEMENT AND PLAN OF MERGER, FOR THE ELECTION OF THE NOMINEES AND
FOR EACH OF THE OTHER PROPOSALS LISTED ABOVE.

Dated:

---------------------------------- , 2000

----------------------------------
Signature

----------------------------------
Signature if held jointly

Please date, sign as name appears
at the left, and return promptly.
If the shares are registered in
the names of two or more persons,
each should sign. When signing as
Corporate Officer, Partner,
Executor, Administrator, Trustee
or Guardian, please give full
title. Please note any changes in
your address alongside the address
as it appears on the proxy.

PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.

<PAGE> 1

MCS, INC.
SPECIAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints William A. Thomasmeyer and Timothy P. Scanlan
as proxies to represent the undersigned at the Special Meeting of Stockholders
to be held at the offices of the Company, 400 Penn Center, Pittsburgh,
Pennsylvania 15235, on March 7, 2000 at 10:00 a.m. and at any adjournment
thereof, and to vote the shares of stock the undersigned would be entitled to
vote if personally present, as indicated below.

1. Proposal to approve the Second Amended and Restated Agreement and Plan of
Merger and Investment Agreement dated as of October 25, 1999 (the
"Agreement"), by and among, MCS, Inc., Simione Central Holdings, Inc.,
Mestek, Inc. and certain major stockholders of Mestek, pursuant to which MCS
will merge with and into Simione and each share of MCS' common stock will be
converted into approximately 0.85 shares of Simione common stock and Mestek
will invest a total of $6 million into Simione in exchange for Series B
Preferred Stock, warrants and options, and under such other terms and
conditions as are set forth in the Agreement:

FOR [ ] AGAINST [ ] ABSTAIN [ ]

<TABLE>
<S> <C> <C>
2. SELECTION OF DIRECTORS FOR all nominees below (except WITHHOLD AUTHORITY to vote for
as marked to the contrary below) [ ] all nominees below [ ]
</TABLE>

John E. Reed, Stewart B. Reed, David W. Hunter, Winston R. Hindle, Jr.,
R. Bruce Dewey and Edward K. Wissing

INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, PRINT THAT
NOMINEE'S NAME ON THE LINE PROVIDED BELOW.

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

THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE

3. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

Dated:

---------------------------------- , 2000

----------------------------------
Signature

----------------------------------
Signature if held jointly

PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY USING THE ENCLOSED
POSTAGE-PAID ENVELOPE.