NUCO2 INC /FL, SB-2/A, 1996-05-17

NUCO2 INC /FL
SB-2/A, 1996-05-17
CHEMICALS & ALLIED PRODUCTS

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1996

REGISTRATION NO. 333-3352

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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AMENDMENT NO. 1
TO
FORM SB-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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NUCO(2) INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 5098 65-0180800
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
</TABLE>

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2820 SOUTHEAST MARKET PLACE
STUART, FLORIDA 34997
(407) 221-1754
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

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2820 SOUTHEAST MARKET PLACE
STUART, FLORIDA 34997
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)

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EDWARD M. SELLIAN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

NUCO(2) INC.
2820 SOUTHEAST MARKET PLACE
STUART, FLORIDA 34997
(407) 221-1754
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

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Copies to:

<TABLE>
<S> <C>
STEVEN WOLOSKY, ESQ. BRIAN J. WALSH, ESQ.
ERIC M. WECHSLER, ESQ. KEITH WASSERSTROM, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & QUENTEL, P.A.
505 PARK AVENUE 1221 BRICKELL AVENUE
NEW YORK, NEW YORK 10022 MIAMI, FLORIDA 33131
(212) 753-7200 (305) 579-0500
(212) 755-1467 (TELECOPIER) (305) 579-0717 (TELECOPIER)
</TABLE>

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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this registration statement becomes effective.

If this Form is filed to register additional securities of an offering
pursuant to Rule 462(b) under the Securities Act, please 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. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /x/

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT 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 OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A) MAY DETERMINE.

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<PAGE>

NUCO(2), INC.
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
ITEM NUMBER AND HEADING IN
FORM SB-2 REGISTRATION STATEMENT CAPTION OR LOCATION IN PROSPECTUS
------------------------------------------------------ ------------------------------------------------------
<S> <C> <C>
1. Front of Registration Statement and Outside Front
Cover of Prospectus................................. Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front and Outside Back Cover Pages of
Prospectus; Available Information

3. Summary Information and Risk Factors.................. Prospectus Summary; Risk Factors

4. Use of Proceeds....................................... Use of Proceeds

5. Determination of Offering Price....................... Outside Front Cover Page of Prospectus; Underwriting

6. Dilution.............................................. *

7. Selling Security-Holders.............................. Principal and Selling Shareholders

8. Plan of Distribution.................................. Outside Front and Inside Front Cover Pages of
Prospectus; Underwriting

9. Legal Proceedings..................................... Business

10. Directors, Executive Officers, Promoters and Control
Persons............................................. Management

11. Security Ownership of Certain Beneficial Owners and
Management.......................................... Principal and Selling Shareholders

12. Description of Securities............................. Description of Capital Stock

13. Interests of Named Experts and Counsel................ Legal Matters; Experts

14. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... Indemnification For Securities Act Liabilities;
Underwriting

15. Organization Within Last Five Years................... *

16. Description of Business............................... Recent Developments; Industry; Business

17. Management's Discussion and Analysis or Plan of
Operation........................................... Management's Discussion and Analysis of Financial
Condition and Results of Operations

18. Description of Property............................... Business

19. Certain Relationships and Related Transactions........ Certain Transactions

20. Market for Common Equity and Related Stockholder
Matters............................................. Price Range of Common Stock

21. Executive Compensation................................ Management

22. Financial Statements.................................. Financial Statements

23. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure................. Change in Accountants
</TABLE>

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* Not applicable

<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION DATED MAY 17, 1996

PROSPECTUS
2,000,000 SHARES

NUCO(2) INC.

COMMON STOCK

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Of the 2,000,000 shares of Common Stock offered hereby, 1,185,165 shares
are being sold by NuCo(2) Inc. (the 'Company') and 814,835 shares are being sold
by certain shareholders of the Company (the 'Selling Shareholders'). The Company
will not receive any proceeds from the sale of Common Stock by the Selling
Shareholders. See 'Principal and Selling Shareholders.'

The Common Stock is quoted on the Nasdaq National Market under the symbol
'NUCO.' On May 14, 1996, the last sale price of the Common Stock was $27.75 per
share. See 'Price Range of Common Stock.'

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SEE 'RISK FACTORS' BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO

PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS
<S> <C> <C> <C> <C>
Per Share.......................... $ $ $ $
Total(3)........................... $ $ $ $
</TABLE>

(1) The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See 'Underwriting.'

(2) Before deducting expenses estimated at $ , payable by the Company.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
300,000 additional shares of Common Stock, on the same terms and conditions
as the securities offered hereby, solely to cover over-allotments, if any.
If the option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ ,
$ and $ , respectively. See 'Underwriting.'

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The shares of Common Stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
certain other conditions, including the right of the Underwriters to withdraw,
cancel, modify or reject any order, in whole or in part. It is expected that
delivery of the shares will be made on or about June , 1996, at the offices of
Raymond James & Associates, Inc., St. Petersburg, Florida.

RAYMOND JAMES & ASSOCIATES, INC. FIRST ANALYSIS SECURITIES CORPORATION

The date of this Prospectus is , 1996

<PAGE>

[MAP OF CURRENT AREAS OF OPERATION]

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND OTHER SELLING
GROUP MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SEE 'UNDERWRITING.'

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Except as otherwise specified, all data included
herein (i) gives effect to a 3,866-for-1 split of the Common Stock effective
December 15, 1995 and (ii) assumes that the Underwriters' over-allotment option
will not be exercised.

THE COMPANY

NuCo(2) Inc. operates in a relatively new industry which supplies liquid
carbon dioxide ('liquid' or 'bulk CO(2)') to retail establishments for use in
the carbonation and dispensing of fountain beverages. NuCo(2) Inc. is the
largest company in this industry as measured by aggregate purchases of bulk
CO(2) systems from the manufacturers of such systems. Carbon dioxide is
required to dispense carbonated beverages and is presently supplied in most
instances in the form of CO(2) gas, which is transported and stored in high
pressure cylinders. The Company believes high pressure cylinders are being
displaced by bulk CO(2) systems because, from a customer's perspective, bulk
CO(2) systems enjoy several qualitative and economic advantages over high
pressure cylinders. The Company presently has operations in 13 states and
services over 15,000 customers, which consist primarily of restaurants,
convenience stores, taverns, theaters, theme parks, resorts and stadiums. The
Company's objective is to expand its business nationally and establish itself
as the dominant national supplier of bulk CO(2) for beverage applications.

The Company offers its customers two principal services: a stationary bulk
CO(2) system installed on the customer's premises and routine filling of the
system with liquid CO(2) according to a defined schedule. Typically the system
is owned by the Company and leased to the customer under a five year
noncancelable contract, although some customers own their own system. The
Company operates a network of service and supply depots and a fleet of
specialized delivery trucks which deliver liquid CO(2) to customers' locations.
The system utilizes a cryogenic vessel which preserves CO(2) in its liquid form
until its conversion to gaseous form for use in beverage carbonation.
Advantages to users of bulk CO(2) systems include elimination of 'flat' drinks,
elimination of fountain drink dispensing downtime and product waste during
cylinder changeovers, avoidance of employee handling of heavy cylinders,
kitchen space efficiency and enhanced safety. Bulk CO(2) systems are typically
offered to customers at price levels which are comparable to the cost of high
pressure cylinders. Based on data from the manufacturers of bulk CO(2) systems
and restaurant and other industry data, the Company estimates that bulk CO(2)
systems have captured less than 15% of the beverage CO(2) market in the United
States and less than 20% of the beverage CO(2) market within the Company's
primary service area in 10 southeastern states. Based on restaurant and other
industry data, the Company estimates that there are over 600,000 beverage
related CO(2) users in the United States. The first bulk CO(2) systems for
beverage applications were commercialized in 1986 by Minnesota Valley

Engineering, Inc., one of the manufacturers of bulk CO(2) systems.

The competitive strategy of the Company is focused on the bulk CO(2) market
and consists of several elements. Unlike many of its competitors, for whom bulk
CO(2) is a secondary service line, the Company has no material lines of
business at present other than bulk CO(2). The Company's strategy emphasizes
the placement of a Company owned bulk CO(2) system on the customer's premises
under long-term contracts, adding stability to the Company's revenue base. In
fiscal 1995, less than 5% of Company owned bulk CO(2) systems experienced
service termination. Service termination is typically caused by restaurant
closure. There are competitive advantages stemming from scale and delivery
route density in the Company's industry that the Company enjoys as the leading
supplier of bulk CO(2) in most of its current markets. Route density lowers the
average cost per bulk CO(2) delivery and makes entry by new competitors more
difficult by reducing their ability to achieve economies of scale. The Company
differentiates itself through its attention to customer service, including
24-hour, seven day a week service capabilities. The Company offers a broad
range of bulk CO(2) system sizes to access the entire spectrum of potential
customers, and provides rapid installation through its specialized installation
personnel and vehicles.

The Company commenced operations in 1990 with the acquisition of 19 bulk
CO(2) systems in Florida from an industrial gas distributor. As of March 31,
1996, the Company had added 7,864 bulk CO(2) customers through

<PAGE>

internal growth and 5,393 bulk CO(2) customers through nine acquisitions. The
Company significantly expanded the scope of its operations with the acquisition
of Bevtech, Inc. ('Bevtech') in June 1995. Bevtech serviced a total of 3,093
bulk CO(2) systems. On May 15, 1996, the Company acquired the bulk CO(2)
operations in New York, New Jersey and Connecticut of The Coca-Cola Bottling
Company of New York, Inc. The Company acquired approximately 1,030 bulk CO(2)
systems presently in service at customers' locations and, in addition,
contracts to provide bulk CO(2) refill only service to approximately 220
customer owned bulk CO(2) systems. The Company intends to grow primarily
through internal means, but also expects to make acquisitions as a method of
strategically entering new geographic markets and building route density within
existing markets. The Company believes that there are more than 100 businesses
in the United States which service between 250 and 750 bulk CO(2) accounts and
more than 10 businesses which service between 1,000 and 6,000 accounts. The
Company's internal growth initiatives consist of marketing multi-system
placements to corporate and franchised operations of large restaurant,
convenience store and theater chains. The Company has negotiated multi-system
placements or CO(2) supply contracts with numerous customers, including
McDonald's, Pizza Hut, Kentucky Fried Chicken, Burger King, Wendy's, Hardees,
Subway, Shoney's, Chili's, 7-Eleven, Circle K, EZ Serve, Carmike Cinemas, AMC
Theaters, Universal Studios, Walt Disney World and Joe Robbie Stadium. The
Company's relationships with chain customers in one geographic market

frequently help it establish service with these same chains when the Company
expands to new markets. After accessing the chain accounts in a new market, the
Company attempts to rapidly build route density by leasing bulk CO(2) systems
to independent restaurants, convenience stores and theaters.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company................................ 1,185,165 shares

Common Stock offered by the Selling Shareholders................... 814,835 shares

Common Stock to be outstanding after the Offering.................. 6,519,500 shares(1)

Use of Proceeds.................................................... To fund internal growth, for acquisitions, to
repay bank debt and for general corporate
purposes.

Nasdaq National Market Symbol...................................... NUCO
</TABLE>

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(1) Does not include 417,842 shares of Common Stock issuable upon the exercise
of outstanding options and warrants.

<PAGE>

SUMMARY FINANCIAL AND OPERATING DATA
(in thousands, except per share amounts and Operating Data)

The following summary should be read in conjunction with the financial
statements and related notes included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------------------------------- PRO FORMA
NINE MONTHS ------------------------
ENDED YEAR NINE MONTHS
YEAR ENDED JUNE 30, MARCH 31, ENDED ENDED
------------------------------------------------- ----------------- JUNE 30, MARCH 31,
1991 1992 1993 1994 1995 1995 1996 1995(1) 1996(2)
----- ------ ------ ------ ------ ------ ------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:

Net sales............... $ 812 $1,256 $2,247 $4,221 $6,062 $4,088 $8,455 $8,942 $ 8,455
Cost of products sold... 397 615 895 1,897 2,503 1,721 3,637 3,545 3,637
Selling, general and
administrative
expenses.............. 400 549 839 1,093 1,448 965 1,927 2,260 1,927
Depreciation and
amortization.......... 108 205 477 803 1,380 927 1,736 2,218 1,736
----- ------ ------ ------ ------ ------ ------ -------- -----------
Operating income
(loss)................ (93) (113) 36 428 731 475 1,155 919 1,155
Interest expense, net... 99 220 444 953 1,264 893 1,153 259 347
Other expenses.......... 145(3)
----- ------ ------ ------ ------ ------ ------ -------- -----------
Income (loss) before
extraordinary item and
income taxes.......... (192) (333) (408) (670) (533) (418) 2 660 808
Extraordinary item...... 860(4)
----- ------ ------ ------ ------ ------ ------ -------- -----------
Net income (loss) before
income taxes.......... (192) (333) (408) (670) (533) (418) (858) 660 808
Pro forma income tax
provision............. 250 306
Loss from discontinued
operations............ (97) (8)
----- ------ ------ ------ ------ ------ ------ -------- -----------
Net income (loss)....... $(289) $ (341) $ (408) $ (670) $ (533) $ (418) $ (858) $ 410 $ 502
----- ------ ------ ------ ------ ------ ------ -------- -----------
----- ------ ------ ------ ------ ------ ------ -------- -----------
Income (loss) per common
share before
extraordinary item.... $ (.17) $ (.03) $ .08 $ .09
Net income (loss) per
common share.......... $ (.17) $ (.23) $ .08 $ .09
Weighted average shares
outstanding........... 3,379 4,182 5,402 5,440

OTHER DATA:
EBITDA(5)............. $ 15 $ 92 $ 513 $1,231 $2,111 $ 882 $2,891 $3,137 $ 2,891
</TABLE>

Acquisitions................................................ 0 0 368 350 2,027 441
---- ----- ----- ----- ------ ------
Total Company owned bulk CO(2) systems serviced............... 660 1,479 2,558 4,237 7,967 10,733
Customer owned bulk CO(2) systems serviced.................... 2,300 2,524
------ ------
Total bulk CO(2) systems serviced............................. 10,267 13,257
Service and supply depots..................................... 2 2 6 7 15 20
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
MARCH 31, 1996
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ACTUAL AS ADJUSTED(6)
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<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................................................ $ 1,048 $28,687
Total assets......................................................................... 26,238 53,877
Total debt (including short-term debt)............................................... 8,735 6,772
Total shareholders' equity........................................................... 15,844 45,446
</TABLE>

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(1) The pro forma income statement data give effect to: (i) the June 7, 1995
acquisition of the assets of Bevtech as though such acquisition had occurred
on July 1, 1994 and (ii) the Company's sale of 2,022,576 shares of Common
Stock in the Company's initial public offering in December 1995 (the 'IPO')
and the application of the net proceeds therefrom to fund the redemption of
the Company's then outstanding Preferred Stock and the reduction of certain
indebtedness, as if such transactions had occurred on July 1, 1994. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources' and the Unaudited Pro Forma
Combined Statement of Operations of the Company and related notes thereto,
included elsewhere in this Prospectus.

(2) The pro forma income statement data (i) give effect to the Company's sale of
2,022,576 shares of Common Stock in the Company's IPO and the application of
the net proceeds therefrom to fund the redemption of the Company's then
outstanding Preferred Stock and the reduction of certain indebtedness, as if
such transactions had occurred on July 1, 1995, and (ii) do not include a
one time extraordinary charge of approximately $860,000 for the period ended
December 31, 1995 for the write-off of deferred financing costs and
prepayment penalties related to the reduction of certain indebtedness.

(3) Represents costs related to an abandoned financing.

(4) Represents a one time extraordinary charge of approximately $860,000 for the
write-off of deferred financing costs and prepayment penalties in connection
with the reduction of certain indebtedness.

(5) EBITDA represents operating income plus depreciation and amortization.
Information regarding EBITDA is presented because of its use by certain
investors as one measure of an issuer's ability to generate cash flow.
EBITDA should not be considered an alternative to, or more meaningful than,
operating income or cash flows from operating activities as an indicator of
an issuer's operating performance.

(6) Adjusted to give effect to the sale of 1,185,165 shares of Common Stock
hereby offered by the Company (assuming a public offering price of $27 per
share) and the application of the net proceeds therefrom.

<PAGE>

RISK FACTORS

Prospective investors should consider carefully the following factors, in
addition to the other information contained in this Prospectus, in evaluating an
investment in the Common Stock offered hereby.

LIMITED OPERATING HISTORY; LOSSES

The Company was organized in February 1990 and, therefore, has a limited
operating history upon which an evaluation of the Company's future performance
and prospects can be made. The Company has recorded historical net losses for
each quarter from inception through the quarter ended December 31, 1995 and
there can be no assurance that the Company will not incur net losses in the
future. From inception to March 31, 1996, the Company incurred a cumulative net
loss of approximately $3.1 million. See 'Selected Financial Data.'

LACK OF PRODUCT DIVERSITY

Unlike many of its competitors for whom bulk CO(2) is a secondary service
line, the Company has no material lines of business at present other than
leasing of bulk CO(2) systems and sale of bulk CO(2) and does not anticipate
diversifying into other product or service lines in the near future. In the
event the Company experiences a decline in revenues from leasing bulk CO(2)
systems or sale of bulk CO(2), the Company's results of operations would be
materially and adversely effected. See 'Business.'

NEED FOR CAPITAL

The bulk CO(2) systems leasing business is capital intensive and the
Company will continue to require substantial capital in order to expand its

business. Prior to the IPO, the Company depended primarily on debt financing
and private placements of equity for its bulk CO(2) systems purchases. If the
Company is unable to obtain additional equity or debt financing in the future,
the Company may have to limit its growth. After giving effect to the
application of the net proceeds of this offering, the Company's debt to capital
ratio will be reduced to approximately 15%, although the Company expects such
ratio to increase in the future as the Company utilizes borrowed funds to
increase its customer base, for acquisitions, for working capital or other
corporate purposes. The interest rate on the Company's principal credit
facility fluctuates with the prime lending rate resulting in greater interest
costs to the Company in the event of rising interest rates. See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources.'

GROWTH DEPENDENT UPON EXPANSION INTO NEW MARKETS

An important element of the Company's future growth strategy involves the
expansion of the Company's service area into new markets, including markets
which are not contiguous to the Company's existing markets. The ability of the
Company to expand in the future will depend on a number of factors, including
the acceptance by potential customers of the Company's bulk CO(2) systems, the
adaptability of the Company to local market conditions and trade practices, the
availability of skilled management and personnel, adequate financing and other
factors, some of which are beyond the control of the Company. There can be no
assurance that the Company's expansion plans will be achieved. See
'Business--Growth Strategy.'

LIMITED AVAILABILITY OF MANAGERIAL PERSONNEL

The Company is currently experiencing rapid growth that could strain the
Company's managerial and other resources. Since November 1994, the Company's
service area has expanded from Florida to throughout the southeastern United
States and the New York metropolitan area. The Company has opened service and
supply depots in Georgia, Alabama, Louisiana, Mississippi, South Carolina, North
Carolina, Arkansas, Tennessee, New York and New Jersey. In addition, from
December 30, 1994 through March 31, 1996, the number of the Company's full-time
employees increased from 49 to 113, and further increases are anticipated. The
Company intends to open additional service and supply depots and to staff such
depots as needed. For the Company to be able to continue to grow effectively it
will need to continue to improve its operational, financial and other internal
systems, and to attract, train, motivate, manage and retain its employees. If
the Company is unable to manage growth effectively, the Company's results of
operations could be adversely affected.

COMPETITION

The Company competes with other distributors of bulk CO(2) and high
pressure CO(2), including several regional industrial gas companies, numerous
small independent operators and distributors of restaurant supplies and
groceries. Bulk CO(2) systems typically are serviced by industrial gas and
welding supply companies, specialty gas distributors and fountain supply
companies. These suppliers range widely in size. Some of the Company's
competitors have significantly greater financial, technical or marketing
resources than the Company. In addition, certain companies may have an
advantage over the Company with customers who prefer dealing with one

<PAGE>

company that can supply bulk CO(2) as well as fountain syrup. These competitors
could introduce additional products or add features to their existing products
that are superior to the Company's products or that achieve greater market
acceptance. In addition, the Company faces the risk of a well capitalized
competitor's entry into its existing or future markets as there are no major
barriers to entry. The Company believes that its ability to compete depends on a
number of factors, including price, product quality, availability and
reliability, credit terms, name recognition, delivery time and post-sale service
and support. There can be no assurance that the Company will be able to continue
to compete successfully with respect to these factors. See 'Business--
Competition.'

ACQUISITION AVAILABILITY; DIFFICULTY IN ASSIMILATING ACQUISITIONS

An important element of the Company's future growth strategy involves the
acquisition of additional bulk CO(2) systems leasing businesses. A significant
portion of the increase in the Company's net sales since 1992 is attributable to
acquisitions of bulk CO(2) systems leasing businesses, the largest of which was
the acquisition of the assets of Bevtech in June 1995. In January 1996, the
Company acquired two bulk CO(2) businesses, one operating in Arkansas,
Mississippi, Louisiana and Texas and the other operating in Florida, Georgia and
Alabama. In May 1996, the Company acquired the bulk CO(2) business in New York,
New Jersey and Connecticut of The Coca-Cola Bottling Company of New York, Inc.
Although the Company intends to continue to pursue additional acquisitions,
there can be no assurance that the Company will be able to locate or acquire
other suitable acquisition candidates on acceptable terms, or that future
acquired operations will be effectively and profitably integrated into the
Company. Properly managing any growth through acquisition, avoiding the problems
often attendant therewith, and continuing to operate in the manner which has
proven successful to the Company to date will be critical to the future success
of the Company's business. See 'Business--Growth Strategy.'

DEPENDENCE ON FOOD AND BEVERAGE INDUSTRY; SEASONALITY

Approximately 95% of the Company's net sales for the nine months ended
March 31, 1996 were derived from sales to the food and beverage industry. Any

recession experienced by the food and beverage industry could have an adverse
impact on the Company's business. In addition, any significant shift in consumer
preferences away from carbonated beverages to other types of beverages would
have an adverse impact on the Company. Of the Company's 15,000 customers, 3,400
are billed utilizing a 'rental plus per pound charge' program. Additionally,
2,750 accounts own their bulk CO(2) systems and are billed by the pound for
bulk CO(2) delivered. Customers purchasing bulk CO(2) by the pound will tend to
consume less CO(2) in the winter months and the Company's net sales to such
customers will be correspondingly lower in times of cold or inclement weather.
See 'Business--Marketing and Customers.'

LIMITED GROWTH IN RETAIL CO(2) INDUSTRY

The retail CO(2) industry is mature, with only limited growth in total
demand for CO(2) foreseen. Therefore, the Company's ability to grow within the
industry is dependent upon the success of its marketing efforts in acquiring
new customers and their acceptance of bulk CO(2) systems in replacing high
pressure cylinders, the success of the Company in opening new supply and
service depots in additional geographic areas and its ability to acquire other
retail distributors. See 'Business--Growth Strategy.'

PRICING AND INVENTORY RISK; EFFECT ON PROFITABILITY

CO(2) is a commodity and, as such, its unit price is subject to
fluctuations in response to changes in supply or other market conditions over
which the Company has no control. Although the unit price of CO(2) purchased by
the Company has remained relatively stable over time, it could change rapidly.
In the event of future increases in the unit price of CO(2) purchased by the
Company, the Company may not be able to fully pass on such price increases to
its customers. Consequently, the Company's profitability may be sensitive to
changes in wholesale CO(2) prices. See 'Management's Discussion and Analysis of
Financial Conditions and Results of Operations--Overview.'

DEPENDENCE ON SUPPLIERS OF BULK CO(2) SYSTEMS; FEW SOURCES OF SUPPLY

Since the Company does not manufacture bulk CO(2) systems, it must purchase
all of the bulk CO(2) systems it leases. The Company purchases new bulk CO(2)
systems from Minnesota Valley Engineering, Inc. and Taylor-Wharton Cryogenics
(a division of Harsco Corporation), the two major manufacturers of such
equipment. Any event adversely affecting the supply of bulk CO(2) systems,
including the inability of such manufacturers to meet demand for the purchase
of new bulk CO(2) systems, could have a material adverse effect on the
Company's operations. The Company has no control over the manufacturing
process, quality assurance or the timing of delivery of bulk CO(2) systems. The
Company does not have any contracts with either Minnesota Valley

<PAGE>

Engineering, Inc. or Taylor-Wharton Cryogenics for the purchase of bulk CO(2)
systems. See 'Business--Bulk CO(2) Systems.'

NEED TO MEET TECHNOLOGICAL ADVANCES

The Company's success will depend in part on its ability to obtain new bulk
CO(2) customers by converting existing users of high pressure cylinders to bulk
CO(2) systems and to keep pace with possible changes in CO(2) delivery
technology, evolving industry standards and changing client preferences. There
can be no assurance that the Company will be successful in addressing these
developments on a timely basis or that, if addressed, the Company will be
successful in the marketplace. The Company's inability to address these
developments could have a material adverse effect on the Company's business and
operations. See 'Business--Operations.'

DEPENDENCE ON KEY PERSONNEL

The Company will continue to be dependent to a significant extent upon the
efforts and abilities of Edward M. Sellian, its Chairman of the Board and Chief
Executive Officer, and Joseph M. Criscuolo, its President and Chief Operating
Officer. The loss of the services of either Mr. Sellian or Mr. Criscuolo could
have a material adverse effect on the Company. The Company does not maintain key
man life insurance on Mr. Sellian or Mr. Criscuolo. The Company has no
employment agreement with Mr. Sellian or Mr. Criscuolo; however, each of Mr.
Sellian and Mr. Criscuolo has entered into a noncompetition agreement with the
Company. See 'Management--Noncompetition Agreements.' In addition, the Company's
ability to grow successfully will be dependent upon its ability to attract and
retain additional skilled management personnel. See 'Management.'

OPERATING RISKS MAY NOT BE COVERED BY INSURANCE

The Company's operations are subject to all of the operating hazards and
risks normally incidental to handling, storing and transporting bulk CO(2),
which as a compressed gas is classified as a hazardous material. The Company
maintains insurance policies in such amounts and with such coverages and
deductibles as the Company believes are reasonable and prudent. However, there
can be no assurance that such insurance will be adequate to protect the Company
from liabilities and expenses that may arise from claims for personal and
property damage arising in the ordinary course of business or that such levels
of insurance will be maintained by the Company or will be available at
economical prices.

EFFECT OF GOVERNMENTAL REGULATION

The business of the Company is subject to federal and state laws and
regulations adopted for the protection of the environment, the health and
safety of employees and users of the Company's products. The transportation of
bulk CO(2) is subject to regulation by various federal, state and local
agencies, including the U.S. Department of Transportation ('DOT'). These
regulatory authorities have broad powers, and the Company is subject to
regulatory and legislative changes that can affect the economics of the
industry by requiring changes in operating practices or influencing the demand
for, and the cost of providing, its services. See 'Business--Regulatory
Matters.'

CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS

Upon completion of this offering, the directors and executive officers of
the Company will beneficially own or have voting control over approximately
1,143,935 shares of Common Stock, or approximately 17.5% (16.7% if the
Underwriters' over-allotment option is exercised in full) of the then
outstanding shares of Common Stock. Such persons will therefore be in a position
to significantly influence the outcome of matters submitted for shareholder
approval, including election of the Company's directors, and could thereby
affect the selection of management and direct policies of the Company. See
'Principal and Selling Shareholders.'

POSSIBLE VOLATILITY OF STOCK PRICE

The market price of the Common Stock has risen substantially since the IPO.
See 'Price Range of Common Stock.' Macroeconomic and general market factors
beyond the control of the Company may cause the market price for the Common
Stock to be volatile in future periods. Quarterly operating results of the
Company; changes in general conditions in the economy, the financial markets or
the bulk CO(2) industry; and natural disasters or other developments affecting
the Company or its competitors could cause the market price of the Common Stock
to fluctuate substantially. In addition, in recent years the stock market has
experienced extreme price and volume fluctuations. This volatility has had a
significant effect on the market prices of securities issued by many companies
often for reasons unrelated to the operating performance of these companies.

<PAGE>

NO DIVIDENDS ANTICIPATED

The Company intends to retain all future earnings for use in the
development of its business and does not anticipate paying any cash dividends on
the Common Stock in the foreseeable future. In addition, the payment of cash
dividends on the Common Stock is restricted by financial covenants in the
Company's loan agreements. See 'Dividend Policy.'

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 6,519,500 shares of
Common Stock outstanding. All of the 2,000,000 shares offered hereby will be
freely tradeable unless acquired by 'affiliates' of the Company as defined in
Rule 144 promulgated under the Securities Act of 1933, as amended (the
'Securities Act'). 1,728,858 shares will be 'restricted' securities as defined
in Rule 144 and may not be sold unless they are registered under the Securities
Act or are sold pursuant to an exemption from registration, including an
exemption contained in Rule 144. On July 27, 1995, the Securities and Exchange
Commission proposed to reduce the Rule 144(d) holding period for resales of
restricted securities from two years to one year and to reduce the Rule 144(k)
holding period from three years to two years. If the Rule 144 changes are
adopted, the reduced holding periods will apply to all restricted securities.
Each of the directors and officers of the Company and Selling Shareholders have
agreed not to offer, sell or otherwise dispose of any shares of Common Stock
without the prior written consent of Raymond James & Associates, Inc. for a

period of 120 days after the date of this Prospectus. The holders of 555,796
restricted shares of Common Stock have certain rights to require the Company to
register the sale of such shares under the Securities Act. Sales of substantial
amounts of Common Stock, or the perception that such sales could occur, may
adversely affect the market price of the Common Stock prevailing from time to
time. See 'Shares Eligible for Future Sale' and 'Description of Capital Stock--
Registration Rights.'

EFFECTS OF CERTAIN CHARTER PROVISIONS; ANTI-TAKEOVER EFFECTS OF CHARTER AND
FLORIDA LAW

The rights of the holders of the Common Stock will be subject to, and may
be adversely affected by, the rights of the holders of any Preferred Stock that
may be issued in the future. The Board of Directors has the authority to issue
up to 5,000,000 shares of Preferred Stock and to determine the price, rights,
preferences, privileges and restrictions of those shares without any further
vote or action by the shareholders. Although the Company has no present plans to
issue shares of Preferred Stock, the issuance of Preferred Stock could have the
effect of making it more difficult for a third party to acquire a majority of
the outstanding voting stock of the Company or could otherwise dilute the rights
of holders of the Common Stock. Certain provisions of Florida law and the
Company's Articles of Incorporation may discourage persons from making, or make
it more difficult for persons to make a tender offer for, or acquisitions of,
substantial amounts of the Company's Common Stock or from launching other
takeover attempts that a shareholder might consider in such shareholder's best
interest. See 'Description of Capital Stock.'

RECENT DEVELOPMENTS

Since the Company's initial public offering in December 1995 (the 'IPO'),
the Company has added 1,701 bulk CO(2) systems through internal growth. This
growth includes installations resulting from multi-unit agreements with Circle
K, Racetrac Petroleum, EZ Serve, Morrison's Cafeterias and Shoney's. These
locations all operate within the Company's current service area.

In January 1996, the Company added an aggregate of 526 bulk CO(2) customers
through the acquisition of two bulk CO(2) businesses, one operating in Arkansas,
Mississippi, Louisiana and Texas and the other operating in Florida, Georgia and
Alabama. On May 15, 1996, the Company acquired the bulk CO(2) operations in New
York, New Jersey and Connecticut of The Coca-Cola Bottling Company of New York,
Inc. The Company acquired approximately 1,030 bulk CO(2) systems presently in
service at customers' locations and, in addition, contracts to provide bulk
CO(2) refill only service to approximately 220 customer owned bulk CO(2)
systems.

<PAGE>

THE COMPANY

NuCo(2) Inc. is the largest company in a relatively new industry which
supplies liquid CO(2) to retail establishments for use in the carbonation and
dispensing of fountain beverages.

Management of the Company has over 100 years of combined experience in the
beverage industry. Edward M. Sellian, the Chairman and Chief Executive Officer
of the Company, was the president and sole shareholder of Sodasystems, Inc.
('Sodasystems'), a supplier of fountain dispensing equipment, bulk CO(2) systems
and related products operating in the New York, New Jersey and Connecticut
market. Under Mr. Sellian, Sodasystems grew internally and through 20
acquisitions to become the largest such supplier in the New York metropolitan
area. Sodasystems had sales of approximately $30 million annually and over
20,000 customer accounts at the time it was sold in May 1989 to The Coca-Cola
Bottling Company of New York, Inc.

Through Sodasystems, the Company's senior executives first became aware of
bulk CO(2) technology and its appeal to customers. From 1986, when the
technology was first commercialized, until the sale of Sodasystems in 1989,
Sodasystems installed approximately 1,500 bulk CO(2) systems.

The Company entered the bulk CO(2) business in Florida in 1990 with the
acquisition of a fountain syrup distributor with a base of 19 bulk CO(2)
systems. Since that time, the Company has built its leading market position
through a combination of internal growth (8,362 bulk CO(2) customers) and
acquisitions (10 transactions aggregating 6,642 bulk CO(2) customers). The
Company's monthly installation rate has grown with its increasing service area,
from approximately 75 Company owned bulk CO(2) systems in 1993 to approximately
400 currently.

After consolidating its leading position in Florida through internal growth
and the acquisition of five bulk CO(2) distributors, beginning in 1994 the
Company expanded into other regional markets where it believed it had the
potential to achieve market leadership. In January 1995, the Company completed
the acquisition of a bulk CO(2) beverage distributor located in New Orleans. In
1995, the Company also opened depots in Alabama (February) and Mississippi
(March). In June 1995, the Company acquired substantially all of the assets of
Bevtech, a supplier of bulk CO(2) service in Georgia, North Carolina, South
Carolina and Alabama, more than doubling the Company's service area. At the
time of its acquisition by the Company, Bevtech serviced 3,093 bulk CO(2)
systems, of which 1,745 were Bevtech owned and 1,348 were owned by customers
and serviced by Bevtech. Previously, in June 1993 the Company had acquired the
Jacksonville, Florida operations of Bevtech. In January 1996, the Company
acquired two bulk CO(2) businesses, one operating in Arkansas, Mississippi,
Louisiana and Texas and the other operating in Florida, Georgia and Alabama. On
May 15, 1996, the Company acquired the bulk CO(2) operations in New York, New
Jersey and Connecticut of The Coca-Cola Bottling Company of New York, Inc. The
Company acquired approximately 1,030 bulk CO(2) systems presently in service at
customers' locations and, in addition, contracts to provide bulk CO(2) refill
only service to approximately 220 customer owned bulk CO(2) systems. Since the

IPO, the Company has also opened service and supply depots in Raleigh-Durham,
North Carolina; Macon, Georgia; Little Rock, Arkansas; Shreveport and Lake
Charles, Louisiana; Chattanooga, Tennessee; Melville and New Rochelle, New York
and Newark, New Jersey. The Company intends to make further acquisitions and
open new service and supply depots in other market areas where it believes it
has the potential to achieve market leadership. The Company is currently
evaluating several acquisitions in locations contiguous to its existing service
area and in major cities nationwide, as well as 'tuck-in' acquisitions
(acquisitions within an existing service area).

The Company is a Florida corporation. The Company's executive offices are
located at 2820 Southeast Market Place, Stuart, Florida 34997, and its telephone
number is (407) 221-1754.

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
1,185,165 shares of Common Stock offered hereby by the Company (at an assumed
public offering price of $27 per share) are estimated to be approximately $29.6
million ($37.3 million if the Underwriters' over-allotment option is exercised
in full), after deduction of underwriting discounts and commissions and the
estimated offering expenses payable by the Company. The Company will not receive
any proceeds from the sale of Common Stock by the Selling Shareholders.

The Company intends to use the net proceeds to fund internal growth, for
the acquisition of additional bulk CO(2) systems leasing businesses in new
geographic markets and in the Company's existing markets, for the repayment of
approximately $2.0 million of indebtedness outstanding under the Company's
credit facility with NationsBank of Florida, N.A. (the 'NationsBank Facility')
and for general corporate purposes. The indebtedness outstanding under the
NationsBank Facility to be repaid bears interest at a floating rate, currently
8.06% per annum. The NationsBank Facility has a scheduled maturity of November
30, 1998. See 'Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources.' The Company does not
presently have any written agreements or commitments concerning any specific
acquisition. Pending such uses, the net proceeds will be invested in short-term
interest-bearing securities.

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at March
31, 1996, and as adjusted to reflect the net proceeds from the sale by the
Company of 1,185,165 shares of Common Stock pursuant to this offering (at an
assumed public offering price of $27 per share) and the application of the net

proceeds as described under 'Use of Proceeds.' This table should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and the Company's Financial Statements and related
notes contained elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
-------------------------
ACTUAL AS ADJUSTED
------- --------------
(IN THOUSANDS)
<S> <C> <C>
Debt:
Current maturities of long-term debt and short-term debt................................ $ 854 $ 756
------- --------------
------- --------------
Long-term debt, less current maturities:
Bank debt............................................................................. $ 7,465 $ 5,600
Seller and other debt................................................................. 416 416
------- --------------
Total long-term debt.................................................................. 7,881 6,016
Shareholders' equity:
Common Stock, $.001 par value, 5,334,335 shares issued and outstanding, 6,519,500
shares issued and outstanding, as adjusted......................................... 5 7
Additional paid-in capital............................................................ 18,950 48,550
Accumulated deficit................................................................... (3,111) (3,111)
------- --------------
Total shareholders' equity.............................................................. 15,844 45,446
------- --------------
Total capitalization.................................................................... $24,580 $ 52,218
------- --------------
------- --------------
</TABLE>

<PAGE>

DIVIDEND POLICY

The Company has not paid any cash dividends on the Common Stock since its
inception and the Board of Directors does not anticipate declaring any cash
dividends on the Common Stock in the foreseeable future. The Company currently
intends to utilize any earnings it may achieve for the development of its
business and working capital purposes. In addition, the payment of cash
dividends on the Common Stock is restricted by financial covenants in the
Company's credit facility.

PRICE RANGE OF COMMON STOCK

The Common Stock is traded on the Nasdaq National Market under the symbol
'NUCO.'

The following table sets forth, for the periods indicated, the highest and
lowest bid quotations for the Common Stock, as reported by the Nasdaq National
Market. The prices reported reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not reflect actual transactions.

<TABLE>
<CAPTION>
CALENDAR 1995 HIGH LOW
- ------------- ---------- ---------
<S> <C> <C>
Fourth Quarter (from December 19, 1995)................................................. $ 12 3/4 $ 9 1/2

<CAPTION>
CALENDAR 1996
- -------------
<S> <C> <C>
First Quarter........................................................................... 17 1/4 12 1/4
Second Quarter (through May 14, 1996)................................................... 27 1/4 17
</TABLE>

On May 14, 1996, the last reported sale price of the Common Stock on the
Nasdaq National Market was $27 3/4.

As of March 31, 1996, there were approximately 74 holders of record of the
Company's Common Stock. This number does not include an indeterminate number of
shareholders whose shares are held by brokers in 'street name.'

<PAGE>

SELECTED FINANCIAL DATA
(in thousands, except per share amounts and Operating Data)

The following selected financial information for the years ended June 30,
1994 and June 30, 1995 is derived from the Company's financial statements, which
have been audited by the Company's independent auditors. The following selected
financial information for fiscal years ended June 30, 1991 through June 30, 1993
and for the nine months ended March 31, 1995 and March 31, 1996 is derived from
the Company's unaudited financial statements. In the opinion of management, the
unaudited financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments (consisting of only
normal recurring accruals) necessary for a fair presentation of the financial
position and results of operations for such periods. Results for the nine months
ended March 31, 1996 are not necessarily indicative of the results that may be
expected for the year ending June 30, 1996.

The information set forth below is qualified by reference to and should be
read in conjunction with the Financial Statements and related notes thereto and
'Management's Discussion and Analysis of Financial Condition and Results of
Operations,' which are included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------------------------------------------- ---------------------------
NINE MONTHS
ENDED YEAR NINE MONTHS
YEAR ENDED JUNE 30, MARCH 31, ENDED ENDED
----------------------------------------------- ---------------- JUNE 30, MARCH 31,
1991 1992 1993 1994 1995 1995 1996 1995(1) 1996(2)
------- ------ ------ ------ ------ ------ ------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA:
Net sales........... $ 812 $1,256 $2,247 $4,221 $6,062 $4,088 $8,455 $8,942 $ 8,455
Cost of products
sold.............. 397 615 895 1,897 2,503 1,721 3,637 3,545 3,637
Selling, general and
administrative
expenses.......... 400 549 839 1,093 1,448 965 1,927 2,260 1,927
Depreciation and
amortization...... 108 205 477 803 1,380 927 1,736 2,218 1,736
------- ------ ------ ------ ------ ------ ------ -------- ------
Operating income
(loss)............ (93) (113) 36 428 731 415 1,155 919 1,155
Interest expense,
net............... 99 220 444 953 1,264 893 1,153 259 347
Other expenses...... 145(3)
------- ------ ------ ------ ------ ------ ------ -------- ------

Income (loss) before
extraordinary item
and income
taxes............. (192) (333) (408) (670) (533) (418) 2 660 808
Extraordinary
item.............. 860(4)
------- ------ ------ ------ ------ ------ ------ -------- ------
Net income (loss)
before income
taxes............. (192) (333) (408) (670) (533) (418) (858) 660 808
Pro forma income tax
provision......... 250 306
Loss from
discontinued
operations........ (97) (8)
------- ------ ------ ------ ------ ------ ------ -------- ------
Net income (loss)... $ (289) $ (341) $ (408) $ (670) $ (533) $ (418) $ (858) $ 410 $ 502
------- ------ ------ ------ ------ ------ ------ -------- ------
------- ------ ------ ------ ------ ------ ------ -------- ------
Income (loss) per
common share
before
extraordinary
item.............. $ (.17) $ (.03) $ .08 $ .09
Net income (loss)
per common
share............. $ (.17) $ (.23) $ .08 $ .09
Weighted average
shares
outstanding....... 3,379 4,182 5,402 5,440
OTHER DATA:
EBITDA(5)........... $ 15 $ 92 $ 513 $1,231 $2,111 $ 882 $2,891 $3,137 $ 2,891
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED JUNE 30, ENDED
----------------------------------------- MARCH 31,
1991 1992 1993 1994 1995 1996
---- ----- ----- ----- ------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Company owned bulk CO(2) systems serviced:
Beginning of period................... 66 660 1,479 2,558 4,237 7,967
New installations, net................ 594 819 711 1,329 1,703 2,325
Acquisitions.......................... 0 0 368 350 2,027 441
---- ----- ----- ----- ------ ------
Total Company owned bulk CO(2) systems
serviced.............................. 660 1,479 2,558 4,237 7,967 10,733
Customer owned bulk CO(2) systems
serviced.............................. 2,300 2,524

------ ------
Total bulk CO(2) systems serviced....... 10,267 13,257
Service and supply depots............... 2 2 6 7 15 20
</TABLE>

<TABLE>
<CAPTION>
MARCH 31,
JUNE 30, 1996
----------------------------------------------- ---------
1991 1992 1993 1994 1995 ACTUAL
------ ------ ------ ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......... $ 57 $ 51 $ 21 $ 58 $ 562 $ 1,048
Total assets....................... 2,152 4,026 7,122 9,864 21,143 26,238
Total debt (including short-term
debt)............................ 1,445 2,415 4,330 9,369 17,391 8,735
Total shareholders' equity
(deficit)........................ $ (290) $ 354 $ (54) $ (724) $ 743 $15,844
</TABLE>

<PAGE>

(Footnotes from previous page)
- ------------------

(1) The pro forma income statement data give effect to: (i) the June 7, 1995
acquisition of the assets of Bevtech as though such acquisition had occurred
on July 1, 1994 and (ii) the Company's sale of 2,022,576 shares of Common
Stock in the Company's IPO and the application of the net proceeds therefrom
to fund the redemption of the Company's then outstanding Preferred Stock and
the reduction of certain indebtedness, as if such transactions had occurred
on July 1, 1994. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources' and
the Unaudited Pro Forma Combined Statement of Operations of the Company and
related notes thereto, included elsewhere in this Prospectus.

(3) Represents costs related to an abandoned financing.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the financial statements and related notes contained elsewhere in this
Prospectus.

OVERVIEW

At March 31, 1996 the Company leased 10,733 bulk CO(2) systems to its
customers, principally pursuant to five year noncancelable lease contracts.
These customers include restaurants, convenience stores, theaters, taverns and
other businesses which dispense carbonated beverages. Generally, these contracts
are classified as one of two types: 'budget-plan' service contracts and 'rental
plus per pound charge' contracts. Pursuant to budget plan contracts, customers
pay a fixed monthly charge for the lease of a Company owned bulk CO(2) system
installed on the customer's premises and refills of bulk CO(2) according to a
predetermined schedule. The bulk CO(2) is included in the monthly rental charge
up to a predetermined maximum annual volume. If the maximum annual volume is
exceeded, the customer is charged for additional bulk CO(2) delivered. Pursuant
to rental plus per pound charge contracts, the Company also leases a bulk CO(2)
system to the customer, but the customer is charged on a per pound basis for
all bulk CO(2) delivered. The Company's contracts generally provide for price
increases based upon increases in the consumer price index.

The Company provides some services besides those offered under the above
two types of contracts. As of March 31, 1996, the Company provided 'fill only'
service to approximately 2,500 customers, 88% of which were previously serviced
by acquired businesses. Additionally, 5.8% of the Company's net sales for the
nine months ended March 31, 1996 were derived from customers which the Company
services with CO(2), nitrogen and helium in high pressure cylinder form.

As of March 31, 1996, approximately 5,700 of the Company's 13,200 customers
were billed on a per pound basis which varies with the quantity of bulk CO(2)
delivered. These customers will tend to consume less CO(2) in the winter months,
and this may cause the Company's revenues and earnings for its fiscal quarters
ending in December and March to be relatively lower than for its other quarters.
As of March 31, 1996, approximately 7,500 of the Company's 13,200 customers were
billed at a flat monthly rate which generally does not vary throughout the year.

The Company's installed base of bulk CO(2) systems has increased through
internally generated new customers and through acquisitions. As route density
increases, route profitability increases as the fixed costs associated with the
route are spread over a larger revenue base. Since the Company's inception in
February 1990 to March 31, 1996, 7,864 Company owned bulk CO(2) systems have
been installed and 5,393 customer accounts have been acquired through nine
acquisitions. Approximately 3,100 of these customer accounts resulted from the
acquisition of Bevtech in June 1995. The Company's customer base aggregated
over 13,200 customers at March 31, 1996. The Company believes that reduced
interest expense as a result of the repayment of debt from the net proceeds of
the IPO, combined with economies of scale resulting from internal growth and
acquisitions, have led to, and should sustain, the profitability of the
Company.

The Company intends to continue to grow through a combination of internal
growth and acquisitions. The Company requires significant capital to purchase
and install bulk CO(2) systems at customers' locations and to grow the network
of service and supply depots and specialized CO(2) delivery vehicles required
to service these installations. Once installed, however, there are minimal
additional capital requirements for bulk CO(2) systems in service, and the
Company has generally experienced significant positive cash flows on a per-unit
basis. These cash flows stem from per-unit operating income combined with
per-unit non-cash charges for depreciation and amortization. The Company
believes its current installed base of bulk CO(2) systems is stable, partly due
to the existence of long-term contracts with its customers. In fiscal 1995,
less than 5% of the Company owned bulk CO(2) systems experienced service
termination. Service termination is typically caused by restaurant closure.
Affected bulk CO(2) systems are either removed and reconditioned for use with
other customers, or left in place when prospects for a new restaurant in the
same location are deemed favorable.

The Company believes that cash from operating activities, the net proceeds
from this offering and available borrowings under the NationsBank Facility will
be sufficient to fund proposed operations for at least the next 12 months at its
current rate of growth.

<PAGE>

GENERAL

Under the budget plan, the Company's net sales consist of charges to

customers for the use of Company owned bulk CO(2) systems and a predetermined
quantity of liquid CO(2). On customer invoices, the Company does not separate
charges for equipment use from charges for liquid CO(2) delivered; customers are
presented with a single amount payable. Customers are invoiced monthly in
advance of services rendered. For customers on rental plus per pound charge
contracts, invoices are broken down into the two respective services, with the
charge for liquid CO(2) supply varying with the amount delivered. The Company's
net sales also include revenues received from customers to which it supplies
only CO(2) refill services, based on the amount delivered.

Cost of products sold is comprised of purchased CO(2) and labor, vehicle
and depot costs associated with the Company's storage and delivery of bulk
CO(2) to customers. Selling, general and administrative expenses consist of
salaries, dispatch and communications costs, and expenses associated with
marketing, administration, accounting and employee training. Consistent with
the capital intensive character of its business, the Company incurs significant
depreciation and amortization expenses. These stem from the depreciation of
Company owned bulk CO(2) systems; amortization of bulk system installation
costs; amortization of direct lease origination costs, such as sales
commissions, legal fees and contract documentation costs; and amortization of
goodwill, deferred financing costs and other intangible assets.

With respect to bulk CO(2) systems, the Company only capitalizes costs that
are associated with specific successful placements of such systems with
customers under noncancelable contracts and which would not be incurred by the
Company but for a successful placement. All other service, marketing and
administrative costs are expensed as incurred. Capitalized component parts and
direct costs associated with installation of bulk CO(2) equipment leased to
customers was approximately $1.2 million, $1.8 million and $2.8 million at the
end of fiscal 1994, fiscal 1995 and at March 31, 1996, respectively.
Amortization expense related to capitalized component parts and direct costs
associated with installation was approximately $185,000, $306,000 and $333,000
for fiscal 1994, fiscal 1995 and the nine months ended March 31, 1996,
respectively.

The Company believes EBITDA is useful as a means of measuring the growth
and earning power of its business. In addition, the Company's NationsBank
Facility utilizes EBITDA for its formal calculation of financial leverage,
affecting the amount of funds available to the Company for borrowing under such
credit facility. EBITDA represents operating income plus depreciation and
amortization. Information regarding EBITDA is presented because of its use by
certain investors as one measure of an issuer's ability to generate cash flow.
EBITDA should not be considered an alternative to, or more meaningful than,
operating income or cash flows from operating activities as an indicator of an
issuer's operating performance. EBITDA excludes significant costs of doing
business and should not be considered in isolation from GAAP measures.

In the quarter ended December 31, 1995, the Company wrote-off $785,000 of
deferred financing costs and incurred $75,000 in prepayment penalties related to
debt which was repaid with the proceeds of the IPO.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
relationship which the various items bear to net sales:

YEAR ENDED NINE MONTHS ENDED
JUNE 30, MARCH 31,
----------------- -----------------
1994 1995 1995 1996
----- ----- ----- -----
(UNAUDITED)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales.................................................. 100.0% 100.0% 100.0% 100.0%
Cost of products sold...................................... 44.9 41.3 42.1 43.0
Selling, general and administrative expenses............... 26.0 23.9 23.6 22.8
Depreciation and amortization.............................. 19.0 22.7 22.7 20.5
----- ----- ----- -----
Operating income........................................... 10.1 12.1 11.6 13.7
----- ----- ----- -----
Interest expense, net...................................... 22.6 20.9 21.8 13.7
Other expense.............................................. 3.4 -- -- --
----- ----- ----- -----
Loss before extraordinary item............................. (15.9)% (8.8)% (10.2)% --%
Extraordinary item......................................... -- -- -- (10.1)
----- ----- ----- -----
Net loss................................................... (15.9)% (8.8)% (10.2)% (10.1)%
Other Data:
EBITDA................................................... 29.2% 34.8% 34.3% 34.2%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>

<PAGE>

NINE MONTHS ENDED MARCH 31, 1996 COMPARED TO NINE MONTHS ENDED MARCH 31, 1995

Net sales increased by $4.4 million, or 107%, from $4.1 million in the 1995
period to $8.5 million in the 1996 period. Approximately $2.4 million of the
increase represented net sales resulting from the June 1995 acquisition of
Bevtech. The remainder of the increase in net sales was principally due to
internal growth in the number of Company owned bulk CO(2) systems in service.
During its quarter ended March 31, 1996, the Company was adversely affected by
inclement winter weather conditions in many of its non-Florida markets. Severe
winter weather affects the Company both by depressing volumes of soft drinks

consumed by the public and by disrupting or otherwise raising the costs of
delivery route operations. During the same period in 1995, the Company had
minimal operations outside of the state of Florida.

Cost of products sold increased by $1.9 million from $1.7 million in the
1995 period to $3.6 million in the 1996 period. Expressed as a percentage of net
sales, cost of products sold increased from 42.1% in the 1995 period to 43.0%
in the 1996 period. Such increase is attributable to a greater proportion of
customers which owned their own bulk CO(2) systems in the 1996 period. Service
to customers who own bulk CO(2) systems generally carries higher cost of
products sold as a percentage of net sales than service to customers which
lease systems from the Company. This change in customer mix resulted from the
June 1995 acquisition of Bevtech. Of the bulk CO(2) systems serviced by
Bevtech, only 56% were owned by Bevtech and the remainder by customers. The
Company expects that its customer mix may change over time as a result of
further acquisitions and internal growth. The Company is unable to forecast the
effect of a changing customer mix on operating results, as the percentage of
customer owned systems will vary with each acquisition.

Selling, general and administrative expenses increased by $962,000 from
$965,000 in the 1995 period to $1.9 million in the 1996 period. Expressed as a
percentage of net sales, selling, general and administrative expenses decreased
from 23.6% in the 1995 period to 22.8% in the 1996 period. The decrease as a
percentage of net sales was primarily the result of economies of scale. The
dollar increase was primarily due to the increased number of accounts serviced
in the 1996 period as compared to the 1995 period as well as the increased
number of personnel employed in marketing and administrative capacities. During
the third quarter ended March 31, 1996, the Company experienced approximately
$60,000 of additional insurance, professional fees and other costs associated
with being a public company.

Depreciation and amortization increased by $809,000 from $927,000 in the
1995 period to $1.7 million in the 1996 period. As a percentage of net sales,
such expense decreased from 22.7% in the 1995 period to 20.5% in the 1996
period. Depreciation expense increased by $537,000 from $591,000 in the 1995
period to $1.1 million in the 1996 period principally due to the increase in
bulk CO(2) systems leased to customers. Expressed as a percentage of net sales,
depreciation expense decreased from 14.5% in the 1995 period to 13.3% in the
1996 period. Amortization expense increased by $272,000 from $336,000 in the
1995 period to $608,000 in the 1996 period primarily due to the amortization of
goodwill created from the Bevtech acquisition in June 1995. As a percentage of
net sales, amortization expense decreased from 8.2% to 7.2%, respectively.

Net interest expense increased from $893,000 in the 1995 period to $1.2
million in the 1996 period and decreased as a percentage of net sales from 21.8%
to 13.7%, respectively. The increase in interest expense resulted primarily from

the increased average level of borrowings in the 1996 period prior to the IPO.

For the reasons described above, EBITDA increased from $1.4 million in the
1995 period to $2.9 million in the 1996 period and decreased as a percentage of
net sales from 34.3% to 34.2%, respectively.

For the nine months ended March 31, 1996, the Company wrote-off $785,000 of
deferred financing costs and incurred $75,000 in prepayment penalties related to
debt which was repaid with the proceeds of the IPO.

FISCAL YEAR ENDED JUNE 30, 1995 COMPARED TO FISCAL YEAR ENDED JUNE 30, 1994

Net sales increased $1.8 million, or 43.6%, from $4.2 million in fiscal
1994 to $6.1 million in fiscal 1995. This increase resulted primarily from
internal growth in the number of Company owned bulk CO(2) systems in service. At
June 30, 1995 there were 7,967 Company owned systems in service, an increase of
3,730 over the 4,237 in service at the end of fiscal 1994. Of such increase,
2,027 resulted from acquisitions of businesses completed during fiscal 1995 and
the remaining 1,703 resulted from internal marketing efforts. Approximately 86%
of the acquired systems were obtained through the Bevtech acquisition on June 7,
1995 and, therefore, only

<PAGE>

contributed to net sales for three weeks of fiscal 1995. Increases in net sales
due to price increases were insignificant. The Company's pricing structure has
remained relatively constant and the Company does not anticipate changing its
pricing structure in its current markets or in new markets it enters. The
Company, however, recognizes that it may have to alter its pricing structure as
it enters new markets in response to the characteristics of such markets.

Cost of products sold increased by $607,000 from $1.9 million in fiscal
1994 to $2.5 million in fiscal 1995, but decreased as a percentage of net sales
from 44.9% to 41.3%. This decrease was achieved due to cost efficiencies
associated with greater delivery route density as well as to other fixed
elements of cost of products sold being absorbed over a larger revenue base. The
number of depots operated by the Company at June 30, 1995 increased to 15,
compared to 7 at the end of fiscal 1994. A majority of the new depots were
associated with the Bevtech acquisition and, therefore, only affected cost of
products sold for three weeks of fiscal 1995.

Selling, general and administrative expenses increased by $355,000 from
$1.1 million in fiscal 1994 to $1.4 million in fiscal 1995, but decreased as a
percentage of net sales from 26.0% to 23.9%. The decrease as a percentage of net
sales was primarily a result of higher net sales without corresponding increases
in administrative costs. The dollar increase was attributable to growth in the
number of marketing and administrative personnel and their associated expenses,

as well as the costs of expanding the Company's geographic areas of service. At
June 30, 1994 the Company was operating solely in Florida, and at the end of
fiscal 1995 the Company had operations in seven southeastern states.

Depreciation and amortization increased by $577,000 from $803,000 in fiscal
1994 to $1.4 million in fiscal 1995. As a percentage of net sales, depreciation
and amortization increased from 19.0% to 22.7%. The increase as a percentage of
net sales is attributable to increased amortization of financing costs. The
Company incurred fees and expenses of $508,000 in connection with several new
financings and refinancings concluded in fiscal 1995. The dollar increase was
primarily attributable to growth in the number of Company owned bulk CO(2)
systems in service during fiscal 1995.

Net interest expense increased from $954,000 in fiscal 1994 to $1.3 million
in fiscal 1995. This increase is attributable to borrowings associated with the
acquisition of Bevtech in June 1995 and borrowings to finance new Company owned
bulk CO(2) systems placed in service during fiscal 1995. Other expenses
consisted of professional fees and other costs incurred in connection with an
unsuccessful financing in fiscal 1994. These amounts were written off in fiscal
1994 and no similar amount was incurred in fiscal 1995.

For the reasons described above, the Company's net loss decreased from
$670,000 in fiscal 1994 to $533,000 in fiscal 1995. The Company has made no
provision for income tax expense in either fiscal 1994 or fiscal 1995 due to its
net losses. At June 30, 1995 the Company had net operating loss carryforwards
for federal income tax purposes of $4.7 million, which are available to offset
future federal taxable income through 2010.

For the reasons described above, EBITDA increased from $1.2 million in
fiscal 1994 to $2.1 million in fiscal 1995, and increased as a percentage of net
sales from 29.2% to 34.8%.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash requirements consist principally of capital expenditures
associated with placing new bulk CO(2) systems into service at customers'
locations; payments of principal and interest on its outstanding indebtedness;
payments for acquired businesses; and working capital. Whenever possible, the
Company seeks to obtain the use of vehicles, land, buildings, and other office
and service equipment under operating leases as a means of conserving capital.
The Company anticipates making cash capital expenditures of approximately $4.5
million to $5.2 million during the remaining three months of fiscal 1996,
primarily for purchases of bulk CO(2) systems that it expects to place into
service during this time. Once bulk CO(2) systems are placed into service, the
Company has generally experienced significant positive cash flows on a per-unit
basis, as there are minimal additional capital expenditures required for
ordinary operations. In addition to the capital expenditures related to internal
growth, the Company continually reviews opportunities to acquire bulk CO(2)
service businesses, and may require cash in an amount dictated by the scale and
terms of any such transactions successfully concluded.

Prior to the IPO, the Company's primary sources of liquidity were
borrowings under its then existing credit facility with its secured lender which
was repaid and terminated upon consummation of the IPO; equity and debt

<PAGE>

capital obtained from various venture capital funds and individuals, including
parties that sold businesses to the Company; and cash flows from operations.

Prior to the IPO, the Company had outstanding approximately $2.9 million in
principal amount of Senior Subordinated Notes, a portion of which was
convertible at the option of the holders thereof into Common Stock. See Note 5
of Notes to the Company's Financial Statements. The holders of the Senior
Subordinated Notes converted, effective upon the closing of the IPO,
approximately $407,000 of the principal amount of the Senior Subordinated Notes
into an aggregate of 805,209 shares of Common Stock. The Company repaid the
remaining principal of the Senior Subordinated Notes and accrued interest
thereon with a portion of the net proceeds of the IPO. The Company also had
outstanding 485 shares of Series A Preferred Stock, 500 shares of Series B
Preferred Stock, 500 shares of Series C Preferred Stock and 1,500 shares of
Series D Preferred Stock. See Note 6 of Notes to the Company's Financial
Statements. Effective upon closing of the IPO, (i) the Company redeemed with a
portion of the net proceeds of the IPO all of the outstanding Series A Preferred
Stock and Series B Preferred Stock for an aggregate of $485,500 plus
approximately $226,000 of accrued dividends and (ii) all of the outstanding
Series C Preferred Stock and Series D Preferred Stock automatically converted
into an aggregate of 455,430 shares of Common Stock. The Company used a portion
of the net proceeds of the IPO to pay accrued dividends of approximately $81,000
on the Series C Preferred Stock and Series D Preferred Stock. In addition, the
holders of warrants to purchase an aggregate of 118,167 shares of Common Stock
exercised such warrants effective upon the closing of the IPO.

Following this offering, the Company's capital resources will include cash
flows from operations; the net proceeds from this offering; and available
borrowing capacity under the NationsBank Facility. The Company has available
under the NationsBank Facility an aggregate of $30.0 million, including a $6.0
million term loan that was used, together with a portion of the net proceeds of
the IPO, to refinance the outstanding balance of existing indebtedness under its
prior credit facility; a $13.0 million 'tank revolver' to finance the purchase
and installation of new bulk CO(2) service systems; a $10.0 million acquisition
revolver to finance the purchase of bulk CO(2) service businesses; and a $1.0
million line of credit for general working capital needs. All portions of the
NationsBank Facility require full repayment of all outstanding principal and
interest on November 30, 1998, the maturity date of the NationsBank Facility.
The Company believes that cash from operating activities, the net proceeds from
this offering and available borrowings under the NationsBank Facility will be
sufficient to fund proposed operations for at least the next 12 months at its
current rate of growth. The NationsBank Facility is secured by substantially all
the assets of the Company. The Company is required to meet certain financial
covenants under the NationsBank Facility, and may not access borrowings which
would cause its total debt to exceed 3.25 times EBITDA.

As of March 31, 1996, the Company's total outstanding borrowings aggregated
$8.7 million, as compared to $17.4 million as of June 30, 1995. As of March 31,
1996, borrowings under the term portion of the NationsBank Facility were $6.0
million with interest fixed at 8.51%, as compared to 2.5% over the prime rate on
pre-existing bank debt.

In January 1996, the Company repaid approximately $2.3 million of
indebtedness incurred in connection with the acquisition of Bevtech in June
1995.

Working Capital. At June 30, 1994 and June 30, 1995 the Company had
working capital deficits of $1.6 million and $3.5 million, respectively. At
March 31, 1996, the Company had working capital of $59,000.

Cash Flows from Operating Activities. During fiscal 1994, fiscal 1995 and
the nine months ended March 31, 1996, net cash provided by operating activities
was $340,000, $1.4 million and $35,000, respectively. The increase from fiscal
1994 to fiscal 1995 of $1.1 million is attributable to an increase in
depreciation and amortization, decreased net losses, and an increase in accounts
payable and accrued expenses. Cash flows from operating activities decreased by
$1.0 million for the nine months ended March 31, 1996 compared to the same
period in 1995 primarily due to a reduction in accounts payable and accrued
expenses and an increase in accounts receivable and prepaid expenses.

Cash Flows from Investing Activities. During fiscal 1994, fiscal 1995 and
the nine months ended March 31, 1996, the Company made net capital expenditures
of $2.7 million, $3.5 million and $6.5 million, respectively, primarily for new
bulk CO(2) systems and associated installation and direct placement costs.
During

<PAGE>

the nine months ended March 31, 1996, the Company also made two acquisitions
with a combined purchase price of $1.0 million.

Cash Flows from Financing Activities. During fiscal 1994, fiscal 1995 and
the nine months ended March 31, 1996, cash flows from financing activities were
$2.4 million, $2.5 million and $7.0 million, respectively. For the nine month
period ended March 31, 1996, cash flows from financing activities are primarily
from the issuance of Common Stock in connection with the IPO less the repayment

of long-term debt, redemption of Preferred Stock and additional borrowings used
to finance the placement of bulk CO(2) systems into service.

INFLATION

The modest levels of inflation in the general economy since the Company
began business in 1990 have not affected its results of operations.
Additionally, the Company's contracts with its customers contain an annual lease
rate adjustment clause based on any increases in the consumer price index. The
Company believes that inflation will not have a material adverse effect on its
future results of operations.

<PAGE>

INDUSTRY

MARKET OVERVIEW

CO(2) is universally used for the carbonation and dispensing of fountain
beverages. The bulk CO(2) industry is in its infancy. The Company believes that
bulk CO(2) technology will eventually displace most high pressure cylinders in
the beverage CO(2) market and, therefore, the bulk CO(2) industry presents
substantial opportunity for growth. Major restaurant and convenience store
chains continue to adopt this new technology and search for qualified suppliers
to install and service these systems. Unlike high pressure cylinders which are
typically changed when empty and transported to the supplier's depot for
refilling, bulk CO(2) systems are permanently installed at the customer's site
and are kept charged by filling from a specialized bulk CO(2) truck on a
constant 'stay filled' basis by the supplier. Advantages to users of bulk CO(2)
systems include enhanced safety, improved beverage quality and product yields,
reduced employee handling and cylinder storage requirements, and elimination of
system downtime and product waste during cylinder changeovers.

Based on data from the manufacturers of bulk CO(2) systems and restaurant
and other industry data, the Company estimates that bulk CO(2) systems have
captured less than 15% of the beverage CO(2) market in the United States and
less than 20% of the beverage CO(2) market within the Company's primary service
area in 10 southeastern states. The Company estimates that there are over
600,000 beverage related CO(2) users in the United States. Based on restaurant
and other industry data, there are approximately 9,000 existing bulk CO(2)
system installations in Florida; approximately 18,000 in the seven state
service area where the Company has been operating for more than six months; and
approximately 85,000 in the continental United States. The Company believes its
customers account for more than 70% of all bulk CO(2) installations in Florida
and more than 65% in the seven state service area where the Company has been
operating for more than six months.

Many types of businesses compete in the beverage CO(2) business, and market

share is fragmented. High pressure cylinders and bulk CO(2) service are most
frequently provided by distributors of industrial and welding gases. These
companies generally provide a number of products and services in addition to
CO(2), and often view bulk CO(2) systems as high-service adjuncts to their core
business. Industrial gas distributors generally have been reluctant to attempt
to convert their cylinder CO(2) customers to bulk CO(2) systems for several
reasons, including the capital outlays required to purchase the bulk CO(2)
systems, the idling of high pressure cylinders and associated equipment, and
the inefficiencies that would result from splitting their CO(2) customer base
between two CO(2) technologies. Other competitors in the beverage CO(2) market
include fountain supply companies and distributors of restaurant supplies and
groceries, which firms vary greatly in size. There are a number of small
companies which specialize in bulk CO(2) supply, with a local or regional
geographic scope. Many of these suppliers lack the capital necessary to offer
bulk CO(2) systems to customers on lease, or to purchase additional or
replacement specialized bulk CO(2) trucks and stationary depots.

Management believes that demand for bulk CO(2) systems will be driven by
the safety, product quality and other operating advantages afforded to users by
such systems, and the increasing availability and acceptance within the food
and beverage industry of bulk CO(2) systems. In addition, the Company believes
that qualified suppliers of bulk CO(2) systems do not presently exist in many
regions of the United States.

BULK CO(2) TECHNOLOGY COMPARED TO HIGH PRESSURE CYLINDERS

Bulk CO(2) systems employ state-of-the-art cryogenic (the storage of
liquified gas at low temperatures) vessels which offer substantial benefits
over conventional high pressure cylinders. Cryogenic equipment utilizes liquid
CO(2) stored at substantially lower levels of pressure and delivers CO(2) with
an added degree of efficiency, quality, safety and reliability. Bulk CO(2)
systems feature a vacuum insulated liquified gas vessel, which is filled from
an outside fill port without interrupting the flow of CO(2) to the drink
dispenser.

<PAGE>

As compared to high pressure cylinders, cryogenic technology has the
following benefits:

<TABLE>
<S> <C>
o Reduces Flat As the contents of high pressure cylinders are drawn down, carbonation in
Drinks: fountain beverages is reduced proportionately. Bulk CO(2) systems contain a
built-in pressure builder that maintains pressure at an optimal level at all
times.

o Safer: Bulk CO(2) systems store liquid CO(2) at 150 to 200 lbs. per square inch ('psi') of
pressure versus the 800 to 1,000 psi of pressure required in high pressure
cylinders. Since the risk of explosion inherent in high pressure cylinders is
substantially eliminated, the conversion to bulk CO(2) generally results in lower
insurance and worker's compensation rates for customers. In addition, employee

handling of heavy steel cylinders is eliminated with the installation of
stationary bulk CO(2) systems.

o Requires Less Bulk CO(2) vessels are plumbed to the outside of the customer's place of business
Service and for 24-hour, seven day a week service. Therefore, the system can be refilled from
Eliminates a specialized bulk CO(2) delivery truck without the assistance of customer
Downtime: personnel and during peak and non-business hours. This eliminates the need to
remove or transport high pressure cylinders and avoids the wear and hazards
associated with such handling. With high pressure cylinders, the user experiences
downtime when cylinders are replaced, which often occurs without prior warning
and may result in lost carbonated beverage sales. Bulk CO(2) systems have no
downtime during refilling since the refill process does not interrupt the flow of
CO(2) to drink machines. A continuous flow of CO(2) is critical to customers since
carbonated beverages represent a highly profitable item.

o Reduces Bulk CO(2) systems reduce operating costs by eliminating the need for the customer
Operating to provide manpower to manage and keep track of cylinders, be available to
Costs: receive deliveries and install new cylinders as gas is consumed. Gas usage is
reduced since, unlike cylinders, where invariably gas is lost when less-
than-empty cylinders are changed based on perceived weight, bulk CO(2) vessels
serve as constant reservoirs which are refilled according to a contents gauge.
The Company estimates that users of bulk CO(2) systems will generally experience
savings from less fountain beverage product waste.

o Security: Customer security is enhanced because the delivery of bulk CO(2) generally does not
require inside access to the customer's facility. The Company utilizes a locking
device on the fill port to eliminate the possibility of tampering. Since only the
Company has access to the fill port, it also prevents customers from utilizing
alternative sources of liquid CO(2) while bills owed to the Company remain unpaid.

o Space One 400 lb. vessel (about the size of a 40 gallon household water heater) stores
Efficient: as much CO(2) as twenty 20 lb. high pressure cylinders and takes up substantially
less space within an environment where space is often at a premium.

o Comparable The cost to a customer of bulk CO(2) is comparable to high pressure cylinders
Pricing: (except for lower volume users where the cost may be higher for bulk CO(2)). The
Company has approximately eleven hundred 100 lb. bulk systems leased to lower
volume customers.
</TABLE>

<PAGE>

BUSINESS

COMPETITIVE STRATEGY

The central elements of the Company's competitive strategy are the
following:

FOCUS ON BULK CO(2) MARKET. Unlike many of its competitors for whom bulk
CO(2) is a secondary service line, the Company has no material lines of

business at present other than the provision of bulk CO(2), and does not
anticipate diversifying into other product or service lines in the near future.
All aspects of the Company's operations are guided by its focus on the bulk
CO(2) business, including its selection of operating equipment, design of
delivery routes, location of depots, structure of customer contracts, content
of employee training programs and design of management information and
accounting systems. By restricting its scope of activities to the bulk CO(2)
business, and largely avoiding the dilution of management time and Company
resources that would be required by other service lines, the Company believes
it is able to maximize the level of service it provides to its bulk CO(2)
customers. The Company also believes that its focus on this product line also
helps minimize operating costs through the use of equipment dedicated to bulk
CO(2) applications and through the high level of product experience held by its
employees.

COMPANY OWNED EQUIPMENT. The Company generally places a Company owned bulk
CO(2) system on the customer's premises under a long-term supply contract. This
arrangement is often appealing to the customer since the Company bears the
initial capital cost of the equipment and installation, with the customer only
facing a predictable and modest monthly usage fee. The Company believes that its
ability to place its equipment on the customer's premises helps create customer
loyalty and deter competition.

LONG-TERM CUSTOMER CONTRACTS. The Company typically enters into five year
bulk CO(2) system lease agreements with its customers. Generally, these
contracts are classified as one of two types: 'budget-plan' service contracts
and 'rental plus per pound charge' contracts. Pursuant to budget plan
contracts, customers pay fixed monthly charges for the lease of a Company owned
bulk CO(2) system installed on the customer's premises and refills of bulk
CO(2) according to a predetermined schedule. The bulk CO(2) is included in the
monthly rental charge up to a predetermined maximum annual volume. If the
maximum annual volume is exceeded, the customer is charged for additional bulk
CO(2) delivered. Pursuant to rental plus per pound charge contracts, the
Company also leases a bulk CO(2) system to the customer, but the customer is
charged on a per pound basis for all bulk CO(2) delivered. In exchange for a
noncancelable monthly charge, the Company installs and rents to its customers a
Company owned bulk CO(2) system and, through a delivery routing system,
services the bulk CO(2) system and supplies liquid CO(2) to the customer's site
on a regular basis. Even with customers that own their own bulk CO(2) systems,
the Company seeks to arrange for five year supply contracts. The Company
believes that the use of long-term contracts provides benefits to both itself
and its customers. Customers are able to largely eliminate CO(2) supply
interruptions and the need to operate CO(2) equipment themselves, while the
contract adds stability to the Company's revenue base and may deter potential
competition. After the expiration of the initial term of a contract, the term
of the contract continues in effect until either the Company or the customer
notifies the other of its desire to terminate. Generally, the Company has been
successful contracting with its customers for a new long-term supply contract.
To date, the Company's experience has been that contracts roll-over without a
significant portion of contracts expiring without renewal in any one year. The
largest number (approximately 38%) of the Company's current contracts with
customers expire by their terms in 2000.

CAPTURE ADVANTAGES OF SCALE AND ROUTE DENSITY. In most of its current
markets the Company has established itself as the leading or dominant supplier
of bulk CO(2), and believes it enjoys cost advantages over its competitors due
to the greater density of the Company's route structure, a lower average time
and distance travelled between stops, and a lower average cost per delivery.
Greater scale may also lead to better vehicle and fixed asset utilization, as
well as the ability to spread fixed marketing and administrative costs over a
broader revenue base. The Company believes that it is the largest single
purchaser of bulk CO(2) systems from the two principal manufacturers of such
systems.

SUPERIOR CUSTOMER SERVICE. The Company seeks to differentiate itself
through its attention to customer service. Each bulk CO(2) system serviced by
the Company has a label with a toll-free help line for the customer's use. The
Company has an advanced dispatch and delivery system, including the ability to
communicate by radio with route personnel at all times. The Company responds to
service calls on a 24-hour, seven day a week basis, and the experience level of
its personnel aids in the resolution of equipment failures or other service
interruptions, whether caused by the Company's equipment or not. Recognizing
the public visibility of its

<PAGE>

customers, the Company carefully maintains the appearance of its vehicles and
the professional image of its employees.

RAPID INSTALLATION AND DIVERSE CONFIGURATIONS. The bulk CO(2) system
installed at the customer's site consists of a cryogenic vessel for the storage
of liquid CO(2) and related valves, regulators and gas lines. The Company
operates a fleet of 19 specialized installation vehicles with dedicated
installation personnel. A key attribute in marketing the Company's services to
multi-unit customers is its ability to rapidly install bulk CO(2) systems at
customers' locations with minimal disruption. The Company offers systems
ranging from 100 to 600 pounds of CO(2) capacity. With the recent introduction
of the 100 pound capacity system, the range of system sizes permits the Company
to market its services to a broad range of potential customers.

ATTRACTIVE PRICING TO CUSTOMER. The Company carefully monitors the prices
offered in its markets by providers of high pressure CO(2) cylinders. Despite
the customer-level advantages of bulk CO(2) systems over high pressure
cylinders, the Company generally prices its services comparably to the price of
high pressure cylinders. This has proved an effective inducement to cause
customers to convert from cylinders to bulk systems. When appropriate, the
Company will adjust pricing to meet local market conditions in order to build
route density.

GROWTH STRATEGY

The Company intends to grow by consolidating its position in its existing

markets and expanding into additional geographic markets. The objective of the
Company is to become the dominant national supplier of bulk CO(2) systems for
beverage applications. The Company intends to implement its strategy through (i)
internal market development by which it builds route densities necessary to
become the lowest cost operator and (ii) a program of strategic acquisitions, by
which it typically enters a new market area or consolidates through tuck-in
acquisitions an underpenetrated existing market.

INTERNAL MARKET DEVELOPMENT. The majority of growth is driven by the
conversion of high pressure CO(2) users to bulk CO(2) systems. The Company's
ability to drive conversion is illustrated by its success in the Florida
market, where it continues to rapidly add new bulk CO(2) system installations,
even after actively marketing in the state since 1990. The Company's internal
growth initiatives consist of marketing multi-system placements to corporate
and franchised operations of large restaurant, convenience store and theater
chains. The Company's relationships with chain customers in one geographic
market frequently help it to establish service with these same chains when the
Company expands to new markets. As the Company enters a new market, the Company
may seek to establish an initial presence through acquisition. After accessing
the chain accounts in a new market, the Company attempts to rapidly build route
density by leasing bulk CO(2) systems to independent restaurants, convenience
stores and theaters.

The Company believes that optimal route density is achieved at
approximately 350 accounts per bulk CO(2) truck, and the Company typically
employs targeted sales efforts to build density within an existing route. The
Company maintains a 'hub and spoke' route structure and establishes additional
stationary bulk CO(2) depots as a service area expands through geographic
growth. The Company's route density and market share is highest in Florida, and
is less developed in the other nine southern states and the New York
metropolitan area where the Company presently has operations. The Company's
entry to these states was accomplished largely by recent acquisitions of
businesses with more thinly developed route networks than are typical for the
Company. The Company expects to benefit from route efficiencies and other
economies of scale as it builds its customer base in these states through more
intensive internal marketing initiatives.

STRATEGIC ACQUISITIONS. It has been the Company's experience that
acquisition opportunities on satisfactory terms have been regularly available.
The Company estimates that there are more than 100 distributors throughout the
United States that service between 250 and 750 bulk CO(2) accounts and more than
10 distributors that each service between 1,000 and 6,000 accounts, many of
which may represent attractive acquisition candidates for the Company. The
Company has generally been able to acquire smaller distributors at prices near
their asset value. Since this cost per system is similar to the Company's
internal installation costs, these acquisitions represent an economic means of
acquiring accounts. The Company's strategy is to target tuck-in operations that
can be easily integrated into established routes. These transactions typically
involve the purchase of installed systems, equipment and customer lists and

require little additional administrative expense to operate. With these
acquisitions, all administrative functions such as billing, dispatching and
accounting are moved to the Company's headquarters in Stuart, Florida.

As the Company enters a new market or consolidates an existing market,
incumbent bulk CO(2) distributors may be willing to be acquired on satisfactory
terms for the following reasons: (i) distributors realize that successful

<PAGE>

competition with the Company will be difficult if the Company has already
achieved greater route density; (ii) a distributor's primary business often is
distribution of other industrial gases and welding supplies, with bulk CO(2) not
representing a key service, and a reasonable offer to purchase a non-core
business is often appealing; (iii) because of the operating efficiencies the
Company brings to the accounts serviced, the accounts have more value for the
Company than for the seller; (iv) a distributor may have little opportunity for
growth because of its inability to access capital; and (v) there are few other
credible buyers competing with the Company.

ADDITIONAL BULK CO(2) USES. CO(2) has recently been introduced as a safe
and cost efficient alternative to the use of hazardous acids to control the pH
balance in swimming pools. As with the beverage market, bulk CO(2) systems are
often advantageous compared to high pressure cylinders in maintaining a safe,
uninterrupted CO(2) supply. As of March 31, 1996, the Company had approximately
455 bulk CO(2) systems placed in swimming pools in Florida. These customers
have been integrated into the Company's existing delivery route network.

MARKETING AND CUSTOMERS

The Company markets its bulk CO(2) systems primarily to large customers
such as restaurant and convenience store chains, movie theater operators and
theme parks. The Company's customers include most of the major national and
regional chains with units in the southeastern United States. With respect to
these large chains, the Company generally approaches their regional corporate
office for approval to become the exclusive supplier of bulk CO(2) within a
designated territory. The Company then directs its marketing efforts to the
managers or owners of the individual or franchised operating units. Whereas the
large chains offer immediate penetration on a regional basis, the small
operators are important accounts because they provide geographic density which
optimizes delivery efficiency and reduces cost. The recent introduction of
smaller bulk CO(2) systems (100 pound capacity vessels), which the Company
helped develop, allows the Company to penetrate the market for lower volume
users of CO(2) such as mall-based food courts, small restaurants and
mass-market retailers.

The Company's sales force is comprised of 28 sales representatives who
focus on non-chain accounts and who are based throughout the Company's service
area. An additional sales representative, based at the Company's headquarters,
directs marketing efforts to chain customers. The efforts of the Company's sales

representatives are supplemented by the Company's executive officers. Also, the
Company often benefits from marketing leads which are generated by bulk CO(2)
systems manufacturers. Each of the two principal manufacturers has a dedicated
sales force for the sole purpose of selling systems directly to end users;
neither manufacturer has bulk CO(2) delivery capabilities.

The Company distributes bulk CO(2) to over 15,000 customers, none of which
accounted for more than 5% of the Company's fiscal 1995 net sales. The following
table lists the Company's largest chain customers, based upon the number of bulk
CO(2) systems serviced (both Company owned and customer owned), as of March 31,
1996:

<TABLE>
<CAPTION>
NUMBER OF BULK CO(2)
SYSTEMS
CHAIN NAME SERVICED(1)
- ---------- ------------------
<S> <C>
McDonald's........................................................... 986
Burger King.......................................................... 715
Pizza Hut............................................................ 684
Hardees.............................................................. 586
Kentucky Fried Chicken............................................... 577
EZ Serve............................................................. 443
Wendy's.............................................................. 430
Taco Bell............................................................ 408
Circle K............................................................. 363
7-Eleven............................................................. 260
Checkers............................................................. 211
Morrison's Cafeterias................................................ 194
Arby's............................................................... 137
Racetrac Petroleum................................................... 131
Ryan's Family Steakhouses............................................ 126
</TABLE>

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

(1) Includes both corporate and franchisee stores.

<PAGE>

The Company generally enters into agreements with its customers with five
year noncancelable terms that may take either of two forms. The majority of
accounts enter into a budget plan agreement whereby the customer pays a monthly
fee for the leasing of the equipment and a continuous supply of CO(2) until
usage reaches a pre-determined maximum yearly level, beyond which the customer
pays for CO(2) on a per pound basis. The second type of agreement provides for
a fixed monthly equipment lease payment plus a charge for pounds of bulk CO(2)

delivered. The budget plan was developed as a marketing concept to enable
prospective customers to readily compare the cost of bulk CO(2) with their
existing high pressure cylinder costs.

The Company also supplies high pressure gases in cylinder form, including
CO(2), helium and nitrogen. The Company estimates that it currently services
approximately 550 high pressure CO(2) customers, most of whom were either
customers of acquired companies or are low volume users for which it is not
economical to convert to bulk CO(2) systems. However, with the introduction of
100 pound capacity bulk CO(2) systems, the Company anticipates that many low
volume users will convert from high pressure cylinders. Helium and nitrogen are
mostly supplied to existing bulk customers in connection with filling balloons
and dispensing beer, respectively.

OPERATIONS

The Company currently operates 24 liquid CO(2) service and supply depots
located throughout its service area from which it operates 47 specialized bulk
CO(2) trucks, 19 installation and service vehicles and one high pressure
cylinder delivery truck. Each specialized bulk CO(2) truck covers up to 350
accounts, depending on market density, refilling customer tanks on a regular
schedule. Service and supply depots are equipped with large storage tanks (up
to 40 tons) which receive liquefied CO(2) from large capacity tanker trucks and
from which the Company's bulk CO(2) trucks refill for delivery to customers. In
most cases, the tank is accessible from the outside of the establishment. All
delivery quantities are measured by flow meters installed on the Company's tank
trucks. This information is then loaded onto the Company's centralized billing
system, which is maintained on an IBM AS/400 computer.

The Company has a record of timely bill collections, with accounts
receivable historically averaging less than 30 days of sales. The Company
attributes its successful collection history to several factors: (i) the
Company generates invoices immediately after delivery; (ii) since fountain soda
is generally a highly profitable item, customers are less likely to risk their
CO(2) supply by not paying their bills; (iii) the Company performs continuous
account monitoring and does not make deliveries to customers that are behind on
their accounts; and (iv) the use of a locking device on the fill port prevents
customers from receiving bulk CO(2) from other sources while bills to the
Company remain unpaid.

All dispatch and billing functions are conducted from the Company's
corporate headquarters, with route drivers, installers and service personnel
operating from the Company's depots.

LIQUID CO(2) SUPPLY

Liquid CO(2) is a readily available commodity product which is processed
and sold by various sources. The Company purchases liquid CO(2) from several
suppliers and often qualifies for volume discounts. The Company is currently
purchasing liquid CO(2) from both Carbonic Industries Corporation and Liquid
Carbonics (a subsidiary of CBI Industries).

BULK CO(2) SYSTEMS

The Company purchases new bulk CO(2) systems from Minnesota Valley
Engineering, Inc. and Taylor-Wharton Cryogenics (a division of Harsco
Corporation), the two major manufacturers of such equipment. The Company
purchases vessels in five sizes (100, 250, 300, 400 or 600 lbs.) depending on
the CO(2) needs of its customers. The Company's vessels are vacuum insulated
containers with extremely high insulation characteristics allowing the storage
of CO(2) in its liquid form at very low temperatures. The vessels operate under
low pressure, are fully automatic and require no electricity. The service life
of the Company's vessels, based upon manufacturers' estimates, is expected to
exceed 20 years with minimal maintenance.

The Company's in-house service department coordinates all installations and
repairs of equipment. In addition to the normal single unit bulk CO(2) system
installation, the Company has performed many complex multi-unit installations in
stadiums (e.g., Joe Robbie Stadium and Miami Arena) and amusement parks (e.g.,
Universal Studios). These installations involve erecting custom-designed piping
systems to link bulk CO(2)

<PAGE>

systems situated in remote locations. The Company's strong technical
capabilities represent an important competitive advantage and have often
resulted in the equipment manufacturers consulting with the Company on product
modifications.

REGULATORY MATTERS

The business of the Company is subject to federal and state laws and
regulations adopted for the protection of the environment, the health and
safety of employees and users of the Company's products. The transportation of
bulk CO(2) is subject to regulation by various federal, state and local
agencies, including the DOT. These regulatory authorities have broad powers,
and the Company is subject to regulatory and legislative changes that can
affect the economics of the industry by requiring changes in operating
practices or by influencing the demand for, and the costs of providing
services. In addition, the Company voluntarily complies with applicable safety
standards. Management believes that the Company is in compliance with all such
laws, regulations and standards currently in effect and that the cost of
compliance with such laws, regulations and standards has not and will not have
a material adverse effect on the Company.

COMPETITION

The Company competes with other distributors of bulk CO(2) and high
pressure CO(2), including several regional industrial gas distributors,
numerous small independent operators and distributors of restaurant supplies
and groceries. Bulk CO(2) systems typically are serviced by industrial and
welding supply companies, specialty gas distributors and fountain supply
companies. These suppliers range widely in size. Some of the Company's

competitors have significantly greater financial, technical or marketing
resources than the Company. The Company believes that its ability to compete
depends on a number of factors, including price, product quality, availability
and reliability, credit terms, name recognition, delivery time and post-sale
service and support.

EMPLOYEES

At March 31, 1996 the Company had 113 full-time employees, of whom 38 are
involved in an executive, marketing or administrative capacity, 57 of whom are
route drivers and 18 of whom are in service/installation functions. None of the
Company's employees is covered by a collective bargaining agreement or is a
member of a union. The Company considers its relationship with its employees to
be good.

PROPERTIES

The Company's headquarters are currently located in a 13,000 square foot
facility in Stuart, Florida. This facility accommodates corporate,
administrative, marketing, sales and warehouse space. The lease expires
September 30, 1998, and the fixed annual rent is $68,900. On June 1, 1996, the
Company will move its headquarters to a larger 22,000 square foot facility also
located in Stuart, Florida. The lease for the new facility expires March 31,
2001, and the fixed annual rent is $157,750. Effective June 1, 1996, the
Company's lease for its current headquarters will terminate. See 'Certain
Transactions.' The Company also leases liquid CO(2) service and supply depots at
the following 24 locations: Florida (Stuart, Miami, Ft. Myers, Jacksonville,
Tallahassee, Orlando and Tampa); Georgia (Atlanta, Savannah and Macon); Alabama
(Birmingham and Mobile); Louisiana (New Orleans, Shreveport and Lake Charles);
Mississippi (Jackson); North Carolina (Charlotte and Raleigh-Durham); South
Carolina (Florence); Arkansas (Little Rock); Tennessee (Chattanooga); New York
(Melville and New Rochelle) and New Jersey (Newark). The properties on which
such facilities are located are leased from third parties (other than the Stuart
and Ft. Myers, Florida service and supply depots, see 'Certain Transactions') on
terms consistent with market rentals prevailing in the location's area. The
Company believes that its other existing facilities are adequate for its current
needs and that additional facilities in its service area are available to meet
future needs.

LEGAL PROCEEDINGS

The Company is not a party to any litigation that, in the judgment of
management, is likely to have a material adverse effect on the Company or its
business.

<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the directors and
executive officers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------

<S> <C> <C>
Edward M. Sellian........................... 54 Chairman of the Board and Chief
Executive Officer

Joseph M. Criscuolo......................... 48 President, Chief Operating Officer
and Director

Jean Houghton............................... 46 Vice President--Administration

Edward W. Dean.............................. 33 Chief Financial Officer

Robert L. Frome............................. 55 Director

John J. O'Neil.............................. 53 Director

Edward F. O'Reilly.......................... 57 Director

William B. Porter........................... 64 Director
</TABLE>

EDWARD M. SELLIAN: Chairman of the Board and Chief Executive Officer
since 1991. From 1965 until May 1989, Mr. Sellian was the president of
Sodasystems, a supplier of fountain dispensing equipment, bulk CO(2) systems
and related products operating in the New York, New Jersey and Connecticut
market. Under Mr. Sellian, Sodasystems grew internally and through 20
acquisitions to become the largest supplier in the New York metropolitan area.
Sodasystems had sales of approximately $30 million annually and over 20,000
customer accounts at the time it was sold in May 1989 to The Coca-Cola Bottling
Company of New York, Inc. ('Coca-Cola'). Mr. Sellian continued to work for
Sodasystems after its purchase by Coca-Cola until December 1989. Mr. Sellian
provides overall executive oversight and is primarily responsible for setting
future strategy and implementing the acquisition program.

JOSEPH M. CRISCUOLO: President, Chief Operating Officer and Director since
1990. Prior to joining the Company, Mr. Criscuolo was employed by Sodasystems
from 1980 until May 1989, joining Sodasystems as a route driver and rising to
vice president--operations. Mr. Criscuolo continued to work for Sodasystems
after its purchase by Coca-Cola until January 1990. He has experience in
warehousing, dispatching, general management and operations. Mr. Criscuolo has

overall responsibility for the day-to-day operations of the Company. Mr.
Criscuolo has a B.A. degree from Lehman College/City University of New York.

JEAN HOUGHTON: Vice President--Administration since 1990. Prior to joining
the Company, Ms. Houghton was employed by Sodasystems from 1984 to 1989 in
office management. She is responsible for managing the back office operations
and support systems of the Company. Ms. Houghton was instrumental in the design,
development and implementation of the Company's data processing system with its
custom designed software package for customer billing and record keeping.

EDWARD W. DEAN: Chief Financial Officer since February 1994. From 1988 to
February 1994, Mr. Dean was employed at Turbo Combuster Technology/DRB
Industries, a leading manufacturer of, and service center for, gas turbine
engines. Mr. Dean rose to controller of Turbo Combuster Technology/DRB
Industries after being promoted from positions as cost accounting manager and
purchasing manager. Mr. Dean has a B.A. degree in accounting from the University
of Alabama and an M.B.A. degree from Nova University.

ROBERT L. FROME: Mr. Frome has been engaged in the practice of law for
more than five years as a senior partner of the law firm of Olshan Grundman
Frome & Rosenzweig LLP. Mr. Frome is a director of the following publicly-held
corporations: Healthcare Services Group, Inc., the nation's leading provider of
housekeeping services to long-term care facilities; VTX Electronics Corp., a
fabricator and distributor of cable and connectors used in computer and
communication equipment. Mr. Frome is chairman of the board of Daytop Village
Foundation, a not-for-profit drug treatment center. Mr. Frome has a B.S. degree
from New York University, a L.L.B. degree from Harvard University and a L.L.M.
degree from New York University.

<PAGE>

JOHN J. O'NEIL: Mr. O'Neil is senior vice president/food and beverage
operations of Restaurant Associates, Inc., an operator of over 125 full-service
restaurants including Acapulco's Mexican-themed restaurants, Charlie Brown's
steakhouses and various institutional dining facilities. He presently oversees
the purchasing, quality control and executive chef functions, and has been
employed by Restaurant Associates since 1968. Mr. O'Neil has a B.A. degree from
St. John's University.

EDWARD F. O'REILLY: Mr. O'Reilly has been involved in the beverage
business for three decades and has diversified experience in various sales,
marketing and administrative positions including chairman of the board and
principal shareholder of the Coca-Cola Bottling Company of Northern New England,
chairman and chief executive officer of the Coca-Cola Bottling Company of New
York, president of The Royal Crown Cola Company and executive vice president,
sales and marketing for Joyce Beverages. Since 1993 Mr. O'Reilly has been a
consultant and entrepreneur in several ventures in which he holds an equity
interest. From 1989 to 1992, Mr. O'Reilly was a managing partner of
Millard-O'Reilly Enterprises, a private investment and consulting firm serving
leading soft drink companies. Mr. O'Reilly holds a B.A. degree from Iona
College.

WILLIAM B. PORTER: Since 1968, Mr. Porter has been chairman of the board
and chief executive officer of the George W. Fowler Company, an industrial gas
and welding equipment supplier. Mr. Porter currently serves on the board of
directors and is a member of the executive committee of the Hospice of
Martin/St. Lucie Counties (Florida). Mr. Porter has a B.A. degree from the
University of the South.

INFORMATION REGARDING THE BOARD OF DIRECTORS

Directors are elected by the shareholders for terms of one year and until
their successors are elected and qualified. Officers serve at the discretion of
the Board of Directors.

The Board of Directors has created an Audit Committee, a Compensation
Committee and a Stock Option Committee. The Audit Committee is composed of a
majority of independent directors and is charged with reviewing the Company's
annual audit and meeting with the Company's independent accountants to review
the Company's internal controls and financial management practices. The
Compensation Committee, which is also composed of a majority of independent
directors, recommends to the Board of Directors compensation for the Company's
key employees. The Stock Option Committee is composed solely of independent
directors and administers the Company's 1995 Stock Option Plan. See '--Stock
Option Plans.'

Directors of the Company who are not executive officers do not receive cash
compensation but are reimbursed for the reasonable expenses of attending
meetings. In addition, each non-employee director is eligible to participate in
the Company's Director's Stock Option Plan. See '--Stock Option Plans.'

EXECUTIVE COMPENSATION

The following table sets forth the total compensation for the Company's
Chief Executive Officer during the fiscal years ended June 30, 1995, 1994 and
1993. No other executive officer's salary and bonus exceeded $100,000 for
services rendered to the Company during such years.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL
FISCAL YEAR COMPENSATION(1)
ENDED -------------------
NAME AND PRINCIPAL POSITION JUNE 30, SALARY BONUS
- --------------------------- ----------- -------- -------
<S> <C> <C> <C>
Edward M. Sellian, Chief Executive Officer ............... 1995 $110,000 $37,500
1994 $ 60,000 --
1993 $ 60,000 --
</TABLE>

- ------------------
(1) The columns for 'Other Annual Compensation' and 'Long-term Compensation'
have been omitted as there is no compensation required to be reported in

such columns. The aggregate amount of perquisites and other personal
benefits did not exceed the lesser of $50,000 or 10% of the total of salary
and bonus.

<PAGE>

LONG-TERM INCENTIVE AND PENSION PLANS

The Company does not have any long-term incentive or defined benefit
pension plans.

NONCOMPETITION AGREEMENTS

The Company has entered into noncompetition agreements with each of Messrs.
Sellian and Criscuolo. Mr. Criscuolo's agreement provides that for as long as he
is President and for two years thereafter, unless he is fired without cause he
shall not, without the prior written consent of the Company, associate with any
competing entity in the State of Florida or within a 500 mile radius of the
State of Florida, or employ, or solicit the employment of any employee of the
Company. Mr. Sellian's agreement provides that for as long as he is Chairman of
the Board of the Company or owns at least 25% of the Company's outstanding
Common Stock and for two years thereafter, he shall not, without the prior
written consent of the Company, associate with any competing entity within the
United States or employ, or solicit the employment of any employee of the
Company.

STOCK OPTION PLANS

1995 STOCK OPTION PLAN. Under the Company's 1995 Stock Option Plan (the
'1995 Plan'), 350,000 shares of Common Stock are reserved for issuance upon the
exercise of stock options. Options to purchase an aggregate of 130,991 shares of
Common Stock are presently outstanding. The 1995 Plan is designed as a means to
attract, retain and motivate key employees. The Stock Option Committee
administers and interprets the 1995 Plan.

The 1995 Plan provides for the granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code) and nonqualified stock
options. Options are granted under the 1995 Plan on such terms and at such
prices as determined by the Stock Option Committee, except that the per share
exercise price of incentive stock options cannot be less than the fair market
value of the Common Stock on the date of grant and the per share exercise price
of nonqualified stock options cannot be less than 75% of the fair market value
of the Common Stock on the date of grant. Each option is exercisable after the
period or periods specified in the option agreement, but no option may be
exercisable after the expiration of ten years from the date of grant. Options
granted under the 1995 Plan are not transferable other than by will or by the
laws of descent and distribution.

DIRECTORS' STOCK OPTION PLAN. The Company's Directors' Stock Option Plan
(the 'Directors' Plan') provides for the grant of options to purchase Common

Stock of the Company to non-employee directors of the Company. The Directors'
Plan authorizes the issuance of a maximum of 60,000 shares of Common Stock.

The Directors' Plan is administered by the Board of Directors. Under the
Directors' Plan each non-employee director will receive options for 6,000 shares
of Common Stock on the date of his or her first election to the Board of
Directors. In addition, on the third anniversary of each director's first
election to the Board, and on each three year anniversary thereafter, each
non-employee director will receive an additional option to purchase 6,000 shares
of Common Stock. The exercise price per share for all options granted under the
Directors' Plan will be equal to the fair market value of the Common Stock as of
the date preceding the date of grant. All options vest in three equal annual
installments beginning on the first anniversary of the date of grant. Each of
Messrs. Frome, O'Neil, O'Reilly and Porter received options to purchase 6,000
shares of Common Stock on the date of his election to the Board.

OTHER. In addition to the above options, as of the date of this
Prospectus, options to purchase an aggregate of 67,934 shares of Common Stock at
an exercise price of $4.40 per share, were held by an executive officer and
employee of the Company. These options become exercisable in June 1996 and are
exercisable for a period of 10 years.

CERTAIN TRANSACTIONS

The Company leases its Stuart, Florida headquarters from Mr. Sellian
pursuant to a lease expiring on September 30, 1998 for $5,742 per month. Rent
expense on this facility totalled $51,675 and $68,900 for the fiscal years ended
June 30, 1994 and 1995, respectively. On June 1, 1996, the Company will move its
headquarters to larger facilities also located in Stuart, Florida. The Company
will lease the new headquarters

<PAGE>

from Mr. Sellian pursuant to a lease expiring on March 31, 2001 for $13,146 per
month, the fair market value for the premises determined by an independent real
estate appraisal. In April 1996, Mr. Sellian purchased the new corporate
headquarters building from William B. Porter, a director of the Company.
Effective June 1, 1996, the Company's lease with Mr. Sellian for its current
headquarters will terminate. The Company also leases its Ft. Myers, Florida and
Stuart, Florida storage depots from Mr. Sellian pursuant to leases expiring on
May 31, 1998 and February 28, 1996, respectively, for $795 and $318 per month,
respectively. Rent expense for these storage depots totalled $9,540 for the
fiscal year ended June 30, 1994 and $10,812 for the fiscal year ended June 30,
1995. The Company leases a C414A Chancellor airplane for a minimum of 250 hours
annually at a cost of $300 per hour from a corporation controlled by Mr.
Sellian. Rent expense for the airplane totalled $19,282 for the fiscal year
ended June 30, 1995. In addition, the Company leases an IBM AS/400 computer from
a corporation controlled by Mr. Sellian, for $2,000 per month through March
2000. Rent expense for the computer totalled $2,000 for the fiscal year ended
June 30, 1995.

There are currently no loans between any of the Company's executive

officers or directors and the Company, nor does the Company anticipate that
there will be any such loans in the future.

The Company was indebted to Mr. Sellian in the aggregate principal amount
of $830,592 pursuant to two Senior Subordinated Notes in the principal amounts
of $788,000 and $42,592, dated July 1, 1993 and May 6, 1994, respectively. The
Senior Subordinated Notes bore interest at the rate of 14% per annum. Pursuant
to the provisions of the Senior Subordinated Notes, $144,608 of the principal
amount of such Senior Subordinated Notes was converted into 226,205 shares of
Common Stock effective with the closing of the IPO. The balance of the principal
amount of such Senior Subordinated Notes, together with accrued interest
thereon, was repaid with a portion of the net proceeds of the IPO. Mr. Sellian's
purchase of such Senior Subordinated Notes and related warrants to purchase
shares of Common Stock was on the same terms and conditions as other Senior
Subordinated Notes and related warrants purchased by non-affiliated
third-parties of the Company simultaneously with Mr. Sellian's purchases. See
Note 5 of Notes to the Company's Financial Statements.

The Company was also indebted to Mr. Sellian in the principal amount of
$725,000 pursuant to a Junior Subordinated Note dated August 30, 1994. The
Junior Subordinated Note bore interest at the rate of 14% per annum. The
principal amount of such Junior Subordinated Note, together with accrued
interest thereon, was repaid with a portion of the net proceeds of the IPO. In
consideration of Mr. Sellian's guarantee in the amount of $500,000 to the
Company's prior bank simultaneously with the issuance of the Junior Subordinated
Note, Mr. Sellian was issued a warrant to purchase shares of Common Stock.
Effective with the closing of the IPO, such warrant was exercised at a price of
$235,195 for an aggregate for 73,042 shares of Common Stock. See Note 5 of Notes
to the Company's Financial Statements.

On November 7, 1995 Mr. Sellian loaned the Company $200,000. Such loan,
together with interest at 14% per annum, was repaid with a portion of the net
proceeds of the IPO.

On May 21, 1992, Mr. Sellian purchased 485 shares of Series A Preferred
Stock and 500 shares of Series B Preferred Stock for aggregate consideration of
$485,000 and $500,000, respectively. Mr. Sellian was the sole holder of all
outstanding shares of the Series A Preferred Stock and Series B Preferred Stock.
All outstanding shares of the Series A Preferred Stock and Series B Preferred
Stock were redeemed for $485,000 and approximately $226,000 of accrued
dividends, and $500, respectively, in connection with the IPO.

Robert Frome is a senior partner of the law firm of Olshan Grundman Frome &
Rosenzweig LLP. This law firm has performed and continues to perform legal
services for the Company. This law firm received $142,071 for services rendered
during the fiscal year ended June 30, 1995.

<PAGE>

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date of this Prospectus by (i)
each person who is known by the Company to be the beneficial owner of more than
5% of the Company's Common Stock, (ii) each director and the Chief Executive
Officer, (iii) all directors and executive officers as a group and (iv) the
Selling Shareholders. Except as otherwise noted, each person maintains a
business address at c/o NuCo(2) Inc., 2820 Southeast Market Place, Stuart,
Florida 34997, and has sole voting and investment power over the shares shown
as beneficially owned.

<TABLE>
<CAPTION>
SHARES SHARES TO BE
BENEFICIALLY OWNED SHARES BENEFICIALLY OWNED
BEFORE OFFERING OFFERED AFTER OFFERING
------------------ ------- ------------------
<S> <C> <C> <C> <C> <C>
Edward M. Sellian...................................... 1,622,793(1) 30.4% 600,000 1,022,793(1) 15.7%
Joseph M. Criscuolo.................................... 187,839(2) 3.5 93,919 93,920(2) 1.4
Joseph Jacobi.......................................... 46,959 * 23,479 23,480 *
Terry R. Lishen........................................ 23,481 * 11,740 11,741 *
William M. DeArman(3).................................. 67,822 1.3 38,791 29,031 *
Bruce R. McMaken(3).................................... 2,003 * 1,000 1,003 *
John I. Mundy(3)....................................... 7,005 * 3,500 3,505 *
The Environmental Private Equity Fund II, L.P.(4) ..... 123,109 2.3 30,777 92,332 1.4
The Productivity Fund II, L.P.(4) ..................... 20,016 * 5,004 15,012 *
The Argentum Group(5).................................. 228,851 4.3 5,125 223,726 3.4
Arnold and Sandra Raynor(6)............................ 5,006 * 1,500 3,506 *
Robert L. Frome........................................ 27,222(7) * -- 27,222(7) *
John J. O'Neil......................................... --(7) -- -- --(7) --
Edward F. O'Reilly..................................... --(7) -- -- --(7) --
William B. Porter...................................... --(7) -- -- --(7) --
Directors and executive officers, as a group (8
persons)............................................. 1,837,854 34.5% 693,919 1,143,935 17.5%
</TABLE>

- ------------------
* less than 1%.

(1) Includes 10,000 shares held of record by Mr. Sellian's wife.

(2) Excludes 75,000 shares of Common Stock issuable upon the exercise of stock
options. No part of such options is currently exercisable.

(3) The business address of each of Messrs. DeArman, McMaken and Mundy is c/o
Sanders Morris Mundy Inc., 3100 Texas Commerce Tower, Houston, Texas 77002.

(4) The business address of each of The Environmental Private Equity Fund II,
L.P. and The Productivity Fund II, L.P. is 9500 Sears Tower, Chicago,
Illinois 60606.

(5) Includes 183,726 shares of Common Stock owned by Argentum Capital Partners,
L.P. The Argentum Group and Argentum Capital Partners, L.P. are affiliates
of each other. The business address of The Argentum Group and Argentum
Capital Partners, L.P. is 405 Lexington Avenue, New York, New York 10174.

(6) The address of Arnold and Sandra Raynor is 11 East 40th Street, New York,
New York 10016.

(7) Excludes 6,000 shares of Common Stock issuable upon the exercise of stock
options. No part of such options is currently exercisable.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, par value $.001 per share, and 5,000,000 shares of Preferred
Stock, par value $.001 per share (the 'Preferred Stock') available for issuance.

COMMON STOCK

Upon the closing of this offering there will be 6,519,500 shares of Common
Stock outstanding. Holders of shares of Common Stock are entitled to one vote
per share, without cumulative voting, on all matters to be voted on by
shareholders. Therefore, the holders of more than 50% of the shares voting for
the election of directors can elect all the directors elected by the holders of
Common Stock, and the remaining holders of Common Stock will not be able to
elect any directors. Subject to preferences that may be applicable to any
outstanding Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. In the event of a liquidation or dissolution of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
outstanding Preferred Stock. Holders of the Common Stock do not have preemptive
rights to purchase any future issues of securities. All of the shares of Common
Stock presently outstanding are fully paid and non-assessable.

PREFERRED STOCK

The Company has 5,000,000 authorized shares of Preferred Stock available
for issuance, none of which are outstanding. The Company has no current plan to
issue any shares of Preferred Stock. The Preferred Stock may be issued from time
to time in one or more series or classes. The Board of Directors is authorized,
subject to any limitations prescribed by Florida law, to provide for the
issuance of Preferred Stock in one or more series or classes, to establish from
time to time the number of shares to be included in each such series or class,
to fix the rights, preferences and privileges of the shares of each wholly
unissued series or class and qualifications, limitations or restrictions
thereon, without any further vote or action by the shareholders. The Board of
Directors may authorize and issue Preferred Stock with voting, dividend,
liquidation, conversion or other rights or preferences that could adversely
affect the voting power or other rights of the holders of Common Stock. For
example, the terms of the Preferred Stock that might be issued could prohibit
the Company's consummation of any merger, reorganization, sale of all or
substantially all its assets, liquidation or other extraordinary corporate
transaction without approval of the outstanding shares of Preferred Stock. Thus,
the issuance of Preferred Stock might have the effect of delaying, deferring or
preventing a change in control of the Company. The Board of Directors could also
issue Preferred Stock with preferential voting, conversion and/or dividend
rights and thereby dilute the voting power and equity of the holders of Common
Stock and adversely affect the market price for Common Stock.

REGISTRATION RIGHTS

Following this offering, the holders of 555,796 shares of Common Stock (the
'Registrable Shares') will have certain rights to register those shares for sale
to the public under the Securities Act. In the event the Company proposes to
register any of its shares of Common Stock under the Securities Act, the holders
of Registrable Shares are entitled to require the Company to include all or a
portion of their Registrable Shares in such registration, provided, among other
considerations, that the underwriter of any such offering has the right to limit
the number of such shares to be included in such registration. In addition, the
holders of Registrable Shares are entitled to require the Company to file on one
occasion a registration statement covering some or all of their Registrable
Shares, subject to certain conditions. All fees, costs and expenses of such
registrations (other than underwriting discounts and commissions) will be borne
by the Company.

ANTI-TAKEOVER PROVISIONS

The Company is subject to several anti-takeover provisions under Florida
law that apply to a public corporation organized under Florida law unless the
corporation has elected to opt-out of such provisions in its Articles of
Incorporation or, depending on the provision in question, its bylaws. The
Company has not elected to

<PAGE>

opt-out of these provisions. The Company is subject to the 'affiliated
transaction' and 'control-share acquisition' provisions of the Florida Business
Corporation Act, Sections 607.0901 and 607.0902, Florida Statutes, respectively.
These provisions provide that, subject to certain exceptions, an 'affiliated
transaction' (certain transactions between a corporation and a holder of more
than 10% of its voting securities) must be approved by a majority of
disinterested directors or the holders of two-thirds of the voting shares other
than those beneficially owned by an 'interested shareholder,' and that 'control
shares' (shares acquired in excess of certain specified thresholds) acquired in
specified control-share acquisitions have voting rights only to the extent
conferred by resolution approved by shareholders, excluding holders of shares
defined as 'interested shares.'

The provisions of the Florida Business Corporation Act and the provisions
of the Company's Articles of Incorporation relating to the issuance of Preferred
Stock described above may have certain anti-takeover effects. Such provisions,
individually or in combination, may discourage other persons from or make it
more difficult for other persons to make a tender offer or acquisitions of
substantial amounts of the Company's Common Stock or from launching other
takeover attempts that a shareholder might consider in such shareholder's best
interest, including those attempts that might result in the payment of a premium
over the market price for the Common Stock held by such shareholder.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Continental Stock
Transfer & Trust Company, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 6,519,500 shares of
Common Stock outstanding. All of the 2,000,000 shares offered hereby will be
freely tradeable unless acquired by 'affiliates' of the Company as defined in
Rule 144 promulgated under the Securities Act. 1,728,858 shares will be
'restricted' securities as defined in Rule 144 and may not be sold unless they
are registered under the Securities Act or are sold pursuant to an exemption
from registration, including an exemption contained in Rule 144. On July 27,
1995, the Securities and Exchange Commission proposed to reduce the Rule 144(d)
holding period for resales of restricted securities from two years to one year
and to reduce the Rule 144(k) holding period from three years to two years. If
the Rule 144 changes are adopted, the reduced holding periods will apply to all
restricted securities. Each of the directors and officers of the Company and
Selling Shareholders have agreed not to offer, sell or otherwise dispose of any
shares of Common Stock without the prior written consent of Raymond James &
Associates, Inc. for a period of 120 days after the date of this Prospectus. The
holders of 555,796 restricted shares of Common Stock have certain rights to
require the Company to register the sale of such shares under the Securities
Act. Sales of substantial amounts of Common Stock, or the perception that such
sales could occur, may adversely affect the market price of the Common Stock
prevailing from time to time.

The Company has reserved an aggregate of 410,000 shares of Common Stock for
issuance pursuant to the Company's 1995 Plan and Directors' Plan (collectively,
the 'Plans') of which options to purchase 130,991 shares and 24,000 shares,
respectively, of Common Stock are currently outstanding. In addition, options to
purchase an aggregate of 67,934 shares of Common Stock are held by an executive
officer and employee of the Company. The Company intends to register the
distribution of such shares on a Registration Statement on Form S-8 or Form S-3
following this offering. Subject to restrictions imposed pursuant to the Plans,
shares of Common Stock issued pursuant to the Plans after the effective date of
any Registration Statement on Form S-8 or Form S-3 will be available for sale in
the public market without restriction. See 'Management--Stock Option Plans.'

UNDERWRITING

The Underwriters named below, acting through their representatives, Raymond
James & Associates, Inc. and First Analysis Securities Corporation (the
'Representatives'), have severally agreed, subject to the terms and conditions
of the underwriting agreement by and among the Company, the Selling Shareholders
and the Underwriters (the 'Underwriting Agreement'), to purchase from the
Company and the Selling Shareholders the

<PAGE>

number of shares of Common Stock set forth below opposite each such
Underwriter's name, at the offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
- -------------------------------------------------- ----------------
<S> <C>
Raymond James & Associates, Inc...................
First Analysis Securities Corporation.............

----------------
Total........................................... 2,000,000
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, and that the
Underwriters will purchase the total number of shares of Common Stock shown
above if any of such shares are purchased.

The Company has been advised by the Representatives that the Underwriters
propose intitially to offer the shares of Common Stock to the public at the
offering price set forth on the cover page of this Prospectus and to certain
dealers, including the Underwriters, at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.

After the offering, the offering price and other selling terms may be changed by
the Representatives.

The Company has granted the Underwriters an over-allotment option,
exercisable not later than 30 days after the date of this Prospectus, to
purchase up to 300,000 additional shares of Common Stock at the offering price,
less the underwriting discounts and commissions set forth on the cover page of
this Prospectus. To the extent that the Underwriters exercise such option, each
Underwriter will be committed, subject to certain conditions, to purchase a
number of the additional shares of Common Stock proportionate to such
Underwriter's initial commitment as indicated in the preceding table, and the
Company will be obligated, pursuant to the option, to sell such additional
shares to the Underwriters. The over-allotment option may be exercised for fewer
than all of the shares subject to such option. The Underwriters may exercise
such option only to cover over-allotments, if any, made in connection with the
sale of the shares of Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as the other
shares being offered hereby.

The Company and the Selling Shareholders have agreed to indemnify the
Underwriters against, or to contribute to, losses arising out of certain
liabilities in connection with this offering, including liabilities under the
Securities Act.

Each of the directors and officers of the Company and the Selling
Shareholders have agreed not to offer, sell or otherwise dispose of any shares
of Common Stock for a period of 120 days after the date of this Prospectus
without the prior written consent of Raymond James & Associates, Inc.

Raymond James & Associates, Inc. has advised the Company that it may
confirm sales aggregating not more than 2% of the shares of Common Stock offered
hereby to accounts over which it exercises discretionary authority. The
Representatives have advised the Company that the Underwriters, other than
Raymond James & Associates, Inc., do not intend to confirm sales to any accounts
over which they exercise discretionary authority.

The foregoing includes a summary of certain principal terms of the
Underwriting Agreement and does not purport to be complete. Reference is made to
the copy of the Underwriting Agreement that is on file as an exhibit

<PAGE>

to the Registration Statement on Form SB-2 under the Securities Act filed by the
Company with the Securities and Exchange Commission (the 'Commission') with
respect to the shares of Common Stock offered hereby, of which this Prospectus
is a part.

In connection with this offering, the Underwriters and other selling group
members may engage in passive market making transactions in the Common Stock on
the Nasdaq National Market in accordance with Rule 10b-6A under the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'). Passive market making
consists of displaying bids on the Nasdaq National Market limited by the prices

of independent market makers and effecting purchases limited by such prices and
in response to order flow. Net purchases by a passive market maker on each day
are limited to a specified percentage of the passive market maker's average
daily trading volume in the Common Stock during a specified prior period and
must be discontinued when such limit is reached. Passive market making may
stabilize the market price of the Common Stock at a level above that which might
otherwise prevail and, if commenced, may be discontinued at any time.

LEGAL MATTERS

The legality of the Common Stock offered by this Prospectus will be passed
upon for the Company by Olshan Grundman Frome & Rosenzweig LLP, New York, New
York. Members of Olshan Grundman Frome & Rosenzweig LLP own 39,444 shares of
Common Stock. Certain legal matters will be passed upon for the Underwriters by
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, Florida.

CHANGE IN ACCOUNTANTS

The Company engaged KPMG Peat Marwick LLP to audit its financial statements
for the fiscal year ended June 30, 1995. For the fiscal year ended June 30,
1994, the Company's financial statements were audited by Cooper Selvin &
Strassberg LLP.

The Company believes, and has been advised by Cooper Selvin & Strassberg
LLP that it concurs in such belief, that during the fiscal year ended June 30,
1994, the Company and Cooper Selvin & Strassberg LLP did not have any
disagreement on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of Cooper Selvin & Strassberg LLP, would have
caused it to make reference in connection with its report on the Company's
financial statements to the subject matter of the disagreement.

No report of Cooper Selvin & Strassberg LLP on the Company's financial
statements for either of the past two fiscal years contained an adverse opinion,
a disclaimer of opinion or a qualification, or was modified as to uncertainty,
audit scope or accounting principles. During such fiscal periods, there were no
'reportable events' within the meaning of Item 304(a)(1) of Regulation S-B
promulgated under the Securities Act.

EXPERTS

The financial statements of NuCo(2) Inc. as of June 30, 1995 and for the
year then ended, have been included herein in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.

The financial statements of the Company as of June 30, 1994 and for the
year then ended, the financial statements of Bevtech, Inc., as of June 7, 1995
and June 30, 1994, and for the period July 1, 1994 through June 7, 1995 and the
year ended June 30, 1994, and the statement of net assets to be sold of the

bulk CO(2) operating segment of the BevServ division of The Coca-Cola Bottling
Company of New York, Inc. ('BevServ') as of December 31, 1995 and the related
historical summary of net sales and direct operating expenses for the year then
ended included in this Prospectus have been so included in reliance on the
report of Cooper Selvin & Strassberg LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

<PAGE>

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

The Articles of Incorporation and bylaws of the Company provide that the
Company shall indemnify its officers and directors to the fullest extent
permitted by Florida law.

The Company has also agreed to indemnify each director and executive
officer pursuant to an Indemnification Agreement with each such director and
executive officer from and against any and all expenses, losses, claims, damages
and liability incurred by such director or executive officer for or as a result
of action taken or not taken while such director or executive officer was acting
in his capacity as a director, officer, employee or agent of the Company, to the
fullest extent permitted under Florida law.

The Company has obtained a directors and officers insurance and company
reimbursement policy in the amount of $2,000,000. The policy insures directors
and officers against unindemnified loss arising from certain wrongful acts in
their capacities and would reimburse the Company for such loss for which the
Company has lawfully indemnified the directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company 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 of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
SB-2 (referred to herein, together with all amendments and exhibits, as the
'Registration Statement') under the Securities Act, with respect to the shares
of Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which have

been omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete; with respect to each such contract,
agreement or other document labeled as an exhibit to the Registration Statement,
reference is made to such exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. Copies of the Registration Statement may be inspected without
charge at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be
obtained from the Public Reference Section of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois upon payment of
the prescribed fees.

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at prescribed rates.

<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
NUCO(2) INC.

Reports of Independent Accountants.................................... F-2

Financial Statements:

Balance Sheets as of June 30, 1994 and 1995, and March 31, 1996
(unaudited)...................................................... F-4

Statements of Operations for the Fiscal Years Ended June 30, 1994
and 1995, and the nine months ended March 31, 1995 and 1996
(unaudited)...................................................... F-5

Statements of Shareholders' Equity (Deficit) for the Fiscal Years
Ended June 30, 1994 and 1995, and the nine months ended March 31,
1996 (unaudited)................................................. F-6

Statements of Cash Flows for the Fiscal Years Ended June 30, 1994
and 1995, and the nine months ended March 31, 1995 and 1996
(unaudited)...................................................... F-7

Notes to Financial Statements....................................... F-9

BEVTECH, INC.

Report of Independent Accountants..................................... F-22

Financial Statements:

Balance Sheets as of June 30, 1994 and June 7, 1995................. F-23

Statements of Operations and Retained Earnings for the period July
1, 1994 through June 7, 1995 and the Year Ended June 30, 1994.... F-24

Statements of Cash Flows for the period July 1, 1994 through June 7,
1995 and the Year Ended June 30, 1994............................ F-25

Notes to Financial Statements....................................... F-26

BULK CO(2) OPERATING SEGMENT OF THE BEVSERV DIVISION OF
THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC.

Report of Independent Accountants..................................... F-30

Financial Statements:

Statement of Net Assets to be Sold as of December 31, 1995.......... F-31

Historical Summary of Net Sales and Direct Operating Expenses for
the Year Ended December 31, 1995................................. F-32

Notes to Financial Statements....................................... F-33

Pro Forma Combined Balance Sheet Statements of Operations............. F-34

Notes to Pro Forma Combined Financial Statements...................... F-38
</TABLE>

F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholders
NuCo(2) Inc.
Stuart, Florida

We have audited the accompanying balance sheet of NuCo(2) Inc. as of June 30,
1994, and the related statements of operations, shareholders' equity (deficit),
and cash flows for the year 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 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 on NuCo(2) Inc. as of June 30,
1994, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

COOPER, SELVIN & STRASSBERG LLP

Great Neck, New York
November 16, 1994

F-2

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
NuCo(2) Inc.:

We have audited the accompanying balance sheet of NuCo(2) Inc. as of June 30,
1995, and the related statements of operations, shareholders' equity (deficit)
and cash flows for the year 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 audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NuCo(2) Inc. as of June 30,
1995, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

KPMG PEAT MARWICK LLP

West Palm Beach, Florida
October 6, 1995

F-3

<PAGE>

NUCO(2) INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,
1994 1995 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................... $ 58,213 $ 561,778 $ 1,048,352
Trade accounts receivable, less allowance for
doubtful accounts of $25,000, $77,132 and
$172,468 at June 30, 1994, 1995 and March 31,
1996 (unaudited), respectively................ 346,723 701,918 1,058,409
Inventories..................................... 23,351 40,984 41,093
Prepaid expenses and other current assets....... 55,171 28,580 246,262
----------- ----------- -----------
Total current assets.......................... 483,458 1,333,260 2,394,116
----------- ----------- -----------
Property and equipment, net....................... 8,125,550 15,079,948 19,348,271
----------- ----------- -----------
Other assets:
Goodwill, net................................... 354,688 2,398,987 2,410,657
Deferred charges, net........................... 489,852 758,958 431,066
Customer lists, net............................. 44,180 955,929 832,490
Restrictive covenants, net...................... -- 174,167 129,166
Deferred lease acquisition costs, net........... 346,363 419,737 662,667
Other........................................... 20,115 21,999 29,483
----------- ----------- -----------
1,255,198 4,729,777 4,495,529
----------- ----------- -----------
$ 9,864,206 $21,142,985 $26,237,916
----------- ----------- -----------
----------- ----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term debt............ $ 1,026,685 $ 2,299,159 $ 853,600
Accounts payable................................ 724,867 1,948,001 1,078,840
Accrued expenses................................ 294,382 601,085 358,149
Other current liabilities....................... 21,184 34,465 44,338
----------- ----------- -----------
Total current liabilities..................... 2,067,118 4,882,710 2,334,927

Long-term debt, excluding current maturities...... 8,342,004 15,091,550 7,881,898
Customer deposits................................. 72,142 119,271 176,796
Deferred interest payable......................... 107,362 306,535 --
----------- ----------- -----------

Total liabilities............................. 10,588,626 20,400,066 10,393,621
----------- ----------- -----------
Shareholders' equity (deficit) (note 13):
Series A cumulative deferred preferred stock;
$1,000 stated value;
1,000 shares authorized; issued and
outstanding 485 shares at June 30, 1994 and
1995 and 0 shares at March 31, 1996
(unaudited)................................... 485,000 485,000 --
Series B preferred stock; $1,000 stated value;
1,000 shares authorized; issued and
outstanding 500 shares at June 30, 1994 and
1995 and 0 shares at March 31, 1996
(unaudited)................................... 500,000 500,000 --
Series C convertible preferred stock; $1,000
stated value; 500 shares authorized, issued
and outstanding at June 30, 1994 and 1995 and
0 shares at March 31, 1996 (unaudited)........ -- 500,000 --
Series D convertible preferred stock; $1,000
stated value; 1,500 shares authorized, issued
and outstanding at June 30, 1994 and 1995 and
0 shares at March 31, 1996 (unaudited)........ -- 1,500,000 --
Common stock; par value $.001 per share;
20,000,000 shares authorized; issued and
outstanding 1,932,953 shares at June 30, 1994
and 1995 and 5,334,335 shares at March 31,
1996 (unaudited).............................. 1,933 1,933 5,334
Additional paid-in capital...................... 9,317 9,317 18,949,517
Accumulated deficit............................. (1,720,670) (2,253,331) (3,110,556)
----------- ----------- -----------
Total shareholders' equity (deficit).......... (724,420) 742,919 15,844,295
Commitments and contingencies.....................
----------- ----------- -----------
$ 9,864,206 $21,142,985 $26,237,916
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See accompanying notes to financial statements.

F-4

<PAGE>

NUCO(2) INC.
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JUNE 30, MARCH 31,
------------------------ -------------------------
1994 1995 1995 1996
---------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales............................... $4,220,666 $6,061,911 $4,088,320 $ 8,455,077
---------- ---------- ---------- -----------
Costs and expenses:
Cost of products sold................. 1,896,450 2,503,159 1,720,699 3,636,566
Selling, general and administrative
expenses........................... 1,092,972 1,447,503 965,131 1,926,981
Depreciation and amortization......... 802,939 1,379,592 927,101 1,736,236
---------- ---------- ---------- -----------
3,792,361 5,330,254 3,612,931 7,299,783
---------- ---------- ---------- -----------
Operating income................... 428,305 731,657 475,389 1,155,294
---------- ---------- ---------- -----------
Other expenses:
Interest expense, net................. 953,505 1,264,318 892,872 1,152,997
Expenses related to abandoned
financing.......................... 144,918 -- -- --
---------- ---------- ---------- -----------
Income (loss) before extraordinary
item............................. (670,118) (532,661) (417,483) 2,297
Extraordinary item--loss on
extinguishment of debt........... -- -- -- (859,522)
---------- ---------- ---------- -----------
Net loss........................... $ (670,118) $ (532,661) $ (417,483) $ (857,225)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Dividends on Preferred Stock..... $ (67,900) $ (108,900) $ (74,258) $ (110,917)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Net loss attributable to common
stockholders.................. $ (738,018) $ (641,561) $ (491,741) $ (968,142)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Loss per common share before
extraordinary item............... $ (0.17) $ (.03)
---------- -----------
---------- -----------
Net loss........................... $ (0.17) $ (.23)
---------- -----------
---------- -----------

Weighted average number of common
and common equivalent shares
outstanding...................... 3,379,493 4,182,115
---------- -----------
---------- -----------
</TABLE>

See accompanying notes to financial statements.

F-5

<PAGE>

NUCO(2) INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
PREFERRED STOCK
-------------------------------------------------------------------------------
SERIES A SERIES B SERIES C SERIES D COMMON STOCK
----------------- ----------------- ----------------- ------------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1993........ 485 $485,000 500 $500,000 -- $ -- -- $ -- 1,932,953 $1,933
Net loss...................... -- -- -- -- -- -- -- -- -- --
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------
Balance, June 30, 1994........ 485 485,000 500 500,000 -- -- -- -- 1,932,953 1,933
Issuance of Series C
convertible preferred
stock....................... -- -- -- -- 500 500,000 -- -- -- --
Issuance of Series D
convertible preferred
stock....................... -- -- -- -- -- -- 1,500 1,500,000 -- --
Net loss...................... -- -- -- -- -- -- -- -- -- --
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------
Balance, June 30, 1995........ 485 485,000 500 500,000 500 500,000 1,500 1,500,000 1,932,953 1,933
Redemption of Series A
(unaudited)................. (485) (485,000) -- -- -- -- -- -- -- --
Redemption of Series B
(unaudited)................. -- -- (500) (500,000) -- -- -- -- -- --
Conversion of Series C
(unaudited)................. -- -- -- -- (500) (500,000) -- -- 155,164 155
Conversion of Series D
(unaudited)................. -- -- -- -- -- -- (1,500) (1,500,000) 300,266 300
Conversion of Subordinated
Debt and exercise of
warrants (unaudited)........ -- -- -- -- -- -- -- -- 923,376 923
Issuance of 2,022,576 shares
of common stock
(unaudited)................. -- -- -- -- -- -- -- -- 2,022,576 2,023
Net loss (unaudited).......... -- -- -- -- -- -- -- -- -- --
Dividends declared on
Preferred Stock
(unaudited)................. -- -- -- -- -- -- -- -- -- --
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------
Balance, March 31, 1996
(unaudited)................. -- -- -- -- -- -- -- -- 5,334,335 $5,334
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------
------ -------- ------ -------- ------ -------- ------ ---------- --------- ------

TOTAL

ADDITIONAL SHAREHOLDERS'
PAID-IN ACCUMULATED EQUITY
CAPITAL DEFICIT (DEFICIT)
----------- ----------- -------------
<S> <C> <C> <C>
Balance, June 30, 1993........ $ 9,317 $(1,050,552) $ (54,302)
Net loss...................... -- (670,118) (670,118)
----------- ----------- -------------
Balance, June 30, 1994........ 9,317 (1,720,670) (724,420)
Issuance of Series C
convertible preferred
stock....................... -- -- 500,000
Issuance of Series D
convertible preferred
stock....................... -- -- 1,500,000
Net loss...................... -- (532,661) (532,661)
----------- ----------- -------------
Balance, June 30, 1995........ 9,317 (2,253,331) 742,919
Redemption of Series A
(unaudited)................. -- -- (485,000)
Redemption of Series B
(unaudited)................. 499,500 -- (500)
Conversion of Series C
(unaudited)................. 499,845 -- 0
Conversion of Series D
(unaudited)................. 1,499,700 -- 0
Conversion of Subordinated
Debt and exercise of
warrants (unaudited)........ 655,979 -- 656,902
Issuance of 2,022,576 shares
of common stock
(unaudited)................. 16,146,451 -- 16,146,451
Net loss (unaudited).......... -- (857,225) (857,225)
Dividends declared on
Preferred Stock
(unaudited)................. (361,275) -- (361,275)
----------- ----------- -------------
Balance, March 31, 1996
(unaudited)................. $18,949,517 $(3,110,556) $ 15,844,295
----------- ----------- -------------
----------- ----------- -------------
</TABLE>

See accompanying notes to financial statements.

F-6

<PAGE>

NUCO(2) INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JUNE 30, MARCH 31,
------------------------- --------------------------
1994 1995 1995 1996
----------- ----------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net loss before extraordinary item......................... $ (670,118) $ (532,661) $ (417,483) $ 2,297
Extraordinary item--loss on
extinguishment of debt................................... -- -- -- (859,522)
----------- ----------- ----------- ------------
Net loss................................................... (670,118) (532,661) (417,483) (857,225)
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation of property and equipment.............. 571,535 851,963 591,165 1,128,617
Amortization of other assets........................ 231,404 527,629 335,936 607,619
Loss (gain) on disposal of property and
equipment........................................ 66,681 7,199 12,005 (1,823)
Write-off of expenses related to abandoned
financing........................................ 144,918 -- -- --
Write-off of deferred financing costs............... -- -- -- 784,069
Changes in operating assets and liabilities:
Decrease (increase) in:
Trade accounts receivable........................ (130,849) (355,195) (97,874) (356,491)
Inventories...................................... 6,190 (17,633) (1,507) (109)
Prepaid expenses and other current assets........ 18,440 26,591 (21,600) (217,682)
Other assets..................................... 3,892 (1,884) (1,808) (7,484)
Increase (decrease) in:
Accounts payable................................. (209,802) 573,134 528,383 (869,161)
Accrued expenses................................. 263,844 306,703 74,019 (242,936)
Other current liabilities........................ 9,015 13,281 4,277 4,873
Customer deposits................................ 34,677 47,129 31,575 57,525
----------- ----------- ----------- ------------
Net cash provided by operating activities........ 339,827 1,446,256 1,037,088 34,792
----------- ----------- ----------- ------------
Cash flows from investing activities:
Proceeds from disposal of property and equipment......... 18,200 38,100 86,211 82,600
Purchase of property and equipment....................... (2,409,861) (3,198,328) (2,708,113) (5,477,718)
Increase in intangible assets............................ -- -- -- (105,558)
Acquisition of businesses, less cash acquired............ (125,000) -- -- (29,000)
Increase in deferred lease acquisition costs............. (199,349) (292,937) 72,120 (372,281)
----------- ----------- ----------- ------------
Net cash used in investing activities............ $(2,716,010) $(3,453,165) $(2,549,782) $ (5,901,957)
----------- ----------- ----------- ------------
</TABLE>

F-7

<PAGE>

NUCO(2) INC.
STATEMENTS OF CASH FLOWS--(CONTINUED)

Proceeds from issuance of common stock................... $ -- $ -- $ -- $ 16,148,474
Net Proceeds from issuance of long-term debt............. 3,769,714 6,720,328 7,015,109 9,636,637
Repayment of long-term debt.............................. (1,053,342) (5,900,340) (5,734,537) (18,291,848)
Increase in loan payable to shareholder.................. 725,000 -- 17,786 200,000
Repayment of loan payable to shareholder................. (806,457) -- -- (200,000)
Increase in deferred charges............................. (328,893) (508,687) (364,028) (643,116)
Increase in deferred interest payable.................... 107,362 199,173 147,571 (306,535)
Conversion of subordinated debt and exercise of
warrants.............................................. -- -- -- 656,902
Preferred stock dividends................................ -- -- -- (361,275)
Redemption of Series A preferred stock................... -- -- -- (485,000)
Redemption of Series B preferred stock................... -- -- -- (500)
Proceeds from issuance of Series C convertible preferred
and Series D convertible preferred stock.............. -- 2,000,000 500,000 --
----------- ----------- ----------- ------------
Net cash provided by financing activities...... 2,413,384 2,510,474 1,581,901 6,353,739
----------- ----------- ----------- ------------
Increase (decrease) in cash and cash equivalents........... 37,201 503,565 69,207 486,574
Cash and cash equivalents, beginning of year............... 21,012 58,213 58,213 561,778
----------- ----------- ----------- ------------
Cash and cash equivalents, end of year..................... $ 58,213 $ 561,778 $ 127,420 $ 1,048,352
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest.............................................. $ 831,382 $ 1,064,497 $ 725,655 $ 1,589,856
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Income taxes.......................................... $ -- $ -- $ -- $ --
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Supplemental schedule of noncash investing and financing
activities:
Acquisition of businesses:

Fair value of assets acquired......................... 697,617 5,778,532 729,000 1,027,425
Cost in excess of net assets of business acquired..... -- 2,073,500 -- --
Liabilities assumed or incurred....................... (572,617) (7,852,032) 479,000 --
----------- ----------- ----------- ------------
Cash paid...................................... $ 125,000 $ -- $ 250,000 $ 1,027,425
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
</TABLE>

In 1994, the Company converted $236,329 of accrued interest into
subordinated debt and converted $788,000 of loan payable to shareholder into
long-term debt.

In connection with the IPO in December 1995, the Company converted $2.0
million of Series C and Series D Preferred Stock into common stock. In addition,
the Company converted $3,661,329 of subordinated debt and $499,500 of Series B
Preferred Stock into shares of common stock and additional paid-in capital,
respectively (unaudited).

See accompanying notes to financial statements.

F-8

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

NuCo(2) Inc., formerly known as Fowler Carbonics, Inc. (the 'Company'), a
Florida corporation, is a supplier of bulk CO(2) dispensing systems to customers
in the food, beverage, lodging and recreational industries in the southeastern
United States.

(b) Operations

As indicated in the accompanying financial statements, the Company has
incurred losses from operations during each of the two years ended June 30,
1995. The Company's ability to achieve profitable operations is, in part,
dependent upon successfully developing its existing route density.

The Company filed a registration statement with the Securities and Exchange
Commission in connection with a proposed initial public offering (IPO) of its
common stock. A portion of the proceeds of the IPO were used to repay the
Company's long-term debt. The Company intends to file a second registration
statement with the Securities and Exchange Commission in connection with a
proposed secondary offering of its common stock. Management believes such
proceeds from the second offering will be sufficient to fund proposed operations
for at least the next 12 months at its current rate of growth.

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.

(d) Inventories

Inventories, consisting primarily of carbon dioxide gas, are stated at the
lower of cost or market. Cost is determined by the first-in, first-out method.

(e) Property and Equipment

Property and equipment are stated at cost. The Company does not depreciate
bulk systems held for installation until the systems are in service and leased
to customers. Upon installation, the systems, component parts and direct costs
associated with the installation are transferred to the leased equipment
account. These costs are associated with successful placements of such systems
with customers under noncancelable contracts and which would not be incurred by
the Company but for a successful placement. Upon early service termination, the

unamortized portion of direct costs associated with the installation are charged
to cost of products sold. Depreciation and amortization is computed using the
straight-line method over the estimated useful lives of the respective assets or
the terms for leasehold improvements, whichever is shorter.

The depreciable lives of property and equipment are as follows:

<TABLE>
<CAPTION>
ESTIMATED LIFE
---------------
<S> <C>
Leased equipment................................... 5-20 years
Equipment and cylinders............................ 3-20 years
Vehicles........................................... 3-5 years
Computer equipment................................. 7 years
Office furniture and fixtures...................... 5-7 years
</TABLE>

(f) Other Assets

Goodwill, Net

Goodwill, net, represents costs in excess of net assets of businesses
acquired and is being amortized on a straight-line basis over twenty years.
Accumulated amortization of goodwill was $20,313, $49,514 and $136,735 at June
30, 1994, 1995 and March 31, 1996 (unaudited), respectively. The Company
evaluates the recoverability

F-9

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

of goodwill as well as the amortization periods to determine whether an
adjustment of the carrying value is appropriate.

Deferred Charges, Net

Deferred charges, net, consist of the unamortized portion of financing
costs which are being amortized over the term of the related indebtedness,

ranging from twenty-three to sixty months. Accumulated amortization of deferred
costs was $237,769, $477,350 and $624,885 at June 30, 1994, 1995 and March 31,
1996 (unaudited), respectively. Included in the statement of operations for the
nine month period ended March 31, 1996 is an extraordinary write-off of deferred
financing fees in connection with the reduction of certain indebtedness (note
13).

Customer Lists, Net

Customer lists, net, consist of the unamortized portion of customer lists
acquired in connection with asset acquisitions which are being amortized over
five years, the average life of customer leases. Accumulated amortization of
customer lists was $12,220, $50,671 and $203,110 at June 30, 1994, 1995 and
March 31, 1996 (unaudited), respectively. The Company's policy is to value
customer lists based on the estimated value of future cash flows over the life
of the customer lease.

Restrictive Covenants, Net

Restrictive covenants, net, consist of covenants not to compete arising in
connection with the 1995 asset acquisitions (See Note 2) which are being
amortized over their contractual lives ranging from thirty to sixty months.
Accumulated amortization of restrictive covenants was $833 and $45,834 at June
30, 1995 and March 31, 1996 (unaudited), respectively. The Company's policy is
to value restrictive covenants based on the negotiated contractual value of the
restrictive covenant or a third party appraisal.

Deferred Lease Acquisition Costs, Net

Deferred lease acquisition costs, net, consist primarily of commissions
associated with the acquisition of new leases and are being amortized over the
life of the related leases, generally five years. Accumulated amortization of
deferred lease acquisition costs was $119,726, $339,289 and $497,771 at June 30,
1994, 1995 and March 31, 1996 (unaudited), respectively. Upon early service
termination, the unamortized portion of deferred lease acquisition costs are
charged to cost of products sold.

(g) Revenue Recognition

The Company earns its revenues from the leasing of CO(2) systems and
related gas sales. The Company, as lessor, recognizes revenue from leasing of
CO(2) systems on a straight-line basis over the life of the related leases. The
majority of CO(2) system leases generally include payments for leasing of
equipment and a continuous supply of CO(2) until usage reaches a pre-determined
maximum yearly level, beyond which the customer pays for CO(2) on a per pound
basis. Other CO(2) and gas sales are recorded upon delivery to the customer.

(h) Income Taxes

The Company has adopted Financial Accounting Standards Board Statement No.
109, Accounting for Income Taxes. Statement No. 109 requires recognition of
deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Under Statement No. 109, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. The Company adopted
Statement No. 109 in fiscal 1994. There was no cumulative effect adjustment on
the financial statements as a result of this change in accounting for income
taxes.

F-10

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

(i) Net Loss Per Common Share

Net loss per common share is computed by dividing net loss including
dividends on preferred stock and adding back interest on the convertible portion
of the senior and junior subordinated notes by the weighted average number of
shares of common stock and common stock equivalents outstanding during each
year. In connection with the IPO, 155,164 and 300,266 shares of common stock
were issued upon conversion of the Company's Series C convertible preferred
stock and Series D convertible preferred stock, respectively. An additional
805,209 shares of common stock were issued upon the conversion of the
convertible portion of the Senior Subordinated Notes and 118,167 shares of
common stock upon exercise of warrants. The above shares have been treated as
outstanding for all periods presented. Stock options and warrants to purchase an
additional 152,851 shares of common stock granted during 1995 have also been
treated as outstanding for all periods presented, using the treasury stock
method. In addition, warrants and options to purchase an additional 165,941
shares of Common Stock were issued at the time of the Company's initial public
offering. (See Note 13)

(j) Interim Financial Information (Unaudited)

The unaudited interim financial statements for the nine months ended March

31, 1995 and 1996 and as of March 31, 1996, have been prepared on the same basis
as the Company's audited financial statements as of and for the years ended June
30, 1994 and 1995. In the opinion of management, all adjustments, consisting of
normal, recurring accruals, necessary to present fairly the financial position
of the Company as of March 31, 1995 and 1996, and the results of operations and
cash flows for the nine months ended March 31, 1995 and 1996, have been
included. The results of operations for such interim periods are not necessarily
indicative of the results expected for the full year.

(2) ACQUISITIONS

Effective January 3, 1995, the Company acquired substantially all of the
assets and technology of Carbon Dioxide Equities, Inc. d/b/a Chem Carb CO(2)
(Chem Carb) for $250,000 in cash and $479,000 in notes, payable in monthly
installments through January, 2000. The cash portion of the purchase price was
funded through a borrowing under the Company's $2,500,000 note payable to bank
(see note 5).

Effective June 7, 1995, the Company acquired substantially all of the
assets and technology of Bevtech, Inc. (Bevtech) for $4,000,000 in cash,
$2,348,032 in notes payable in monthly installments through June 2001 and
incurred additional liabilities of $775,000. The cash portion of the purchase
price was funded through a borrowing under the Company's $3,250,000 note payable
to bank and proceeds from the issuance of Series D preferred stock (see notes 5
and 6).

These acquisitions were accounted for by the purchase method of accounting
and, accordingly, the purchase prices and direct costs of the acquisitions have
been allocated to the respective assets and liabilities of the acquired
companies based upon their estimated fair market values at the date of
acquisition. The results of operations of the acquired companies are included in
the Company's financial statements since the effective date of the acquisitions.

The following summarized, unaudited, pro forma results of operations for
the year ended June 30, 1995 assumes the Bevtech acquisition described above
occurred as of July 1, 1994:

<TABLE>
<S> <C>
Net sales.......................................... $ 8,942,108
Net loss........................................... $ (981,157)
Net loss per common share.......................... $ (0.29)
</TABLE>

F-11

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995

AND MARCH 31, 1996 (UNAUDITED)

(3) PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,
1994 1995 1996
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Leased equipment.............. $7,708,168 $14,154,226 $18,590,422
Equipment and cylinders....... 1,133,331 2,010,773 2,488,373
Systems held for
installation................ 294,287 537,453 869,485
Vehicles...................... 85,491 234,531 237,941
Computer equipment............ 48,982 85,404 155,579
Office furniture and
fixtures.................... 31,040 41,287 62,379
Leasehold improvements........ -- -- 21,882
---------- ----------- -----------
9,301,299 17,063,674 22,426,061
Less accumulated
depreciation................ 1,175,749 1,983,726 3,077,790
---------- ----------- -----------
$8,125,550 $15,079,948 $19,348,271
---------- ----------- -----------
---------- ----------- -----------
</TABLE>

Capitalized component parts and direct costs associated with installation
of equipment leased to others included in leased equipment was approximately
$1,222,060, $1,839,945 and $2,800,600 at June 30, 1994, 1995 and March 31, 1996
(unaudited), respectively. Accumulated amortization of these costs were
$406,511, $712,235 and $1,045,134 at June 30, 1994, 1995 and March 31, 1996
(unaudited), respectively.

Depreciation of property and equipment was $571,535, $851,963 and
$1,128,617 for the years ended June 30, 1994, 1995 and the nine months ended
March 31, 1996 (unaudited), respectively.

(4) LEASES

The Company leases equipment to its customers generally pursuant to

five-year noncancelable operating leases which expire on varying dates through
June 2001. At June 30, 1995, future minimum rentals due from customers are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING JUNE 30,
- ---------------------------------------------------
<S> <C>
1996............................................... $ 3,733,614
1997............................................... 3,252,007
1998............................................... 2,630,879
1999............................................... 1,851,856
2000............................................... 785,049
Thereafter......................................... 7,172
-----------
$12,260,577
-----------
-----------
</TABLE>

F-12

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(5) LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,
1994 1995 1996
---------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to bank of $3,250,000, interest only at prime
plus 2.5%, payable monthly beginning June 1, 1995,
principal payments of $54,167 plus interest beginning
September 1, 1995 and maturing on May 15, 1997. Includes
a $75,000 loan agreement amendment fee payable in fifteen
monthly installments of $5,000 each beginning on July 1,
1995.(a)(d).............................................. -- $ 3,325,000 $ --

Note payable to bank of $4,300,000, principal payments of
$65,152 plus interest at prime plus 2.5%, payable monthly
beginning September 30, 1994 and maturing May 15, 1997.
Includes a $175,000 loan agreement amendment fee payable
on the earlier of repayment in full of the note or May
15, 1997.(a)(d).......................................... -- 3,888,636 --

Note payable to bank of $1,300,000, interest only at prime
plus 2.5%, payable monthly beginning September 30, 1994,
principal payments of $19,697 plus interest beginning
September 30, 1995 and maturing on May 15, 1997.(a)(d)... -- 1,300,000 --

Note payable to bank of $2,500,000, advances made under the
note converting to term loans semi-annually from December
31, 1994 through December 31, 1996, monthly payments on
the term loans and advances calculated on a sixty-month
amortization schedule bearing interest at prime plus 2.5%
and maturing on May 15, 1997.(a)(d)...................... -- 1,935,871 --

Note payable to bank of $2,250,000, principal and interest
payments (at 11.71%) of $49,497, payable monthly
beginning August 1, 1993 and maturing June 30,
1998.(a)................................................. $1,920,585 -- --

Note payable to bank of $1,600,000, advances made under the
note converting to term loans on December 31, 1993 and
June 30, 1994, monthly payments on the term loans and
advances calculated on a fifty-four month amortization
schedule bearing interest on the advances at prime plus
2% and bearing interest on the term loans at prime plus
5% and maturing on December 31, 1997.(a)................. 1,508,601 -- --

Note payable to bank of $1,400,000, advances made under the
note converting to term loans on October 1, 1993, monthly
payments on the term loans and advances calculated on a
fifty-four month amortization schedule bearing interest
at prime plus 4% and maturing on March 31, 1997.(a)...... 1,008,504 -- --
</TABLE>

F-13

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(5) LONG-TERM DEBT--(CONTINUED)

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,
1994 1995 1996
---------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to bank of $575,000, advances made under the note
converting to term loans semi-annually August 31, 1994,
monthly payments on the term loans and advances
calculated on a fifty-four month amortization schedule
bearing interest at prime plus 5% and maturing on
December 31, 1998.(a).................................... $ 561,176 -- --

Revolving promissory note payable to bank of $200,000,
interest only at prime plus 2%, payable monthly beginning
August 1, 1993 and maturing July 1, 1994.(a)............. 200,000 -- --

Senior subordinated convertible notes with warrants, interest
only at 14%, payable quarterly if the Company is in
compliance with certain reporting and financial
requirements contained in its amended bank credit
facility, maturing on May 31, 1997 and subordinate to

loans pursuant to the bank credit facility (see (a)). Ten
percent of the original principal amount of the notes or
$150,000 is convertible until maturity into 15% of the
fully diluted common stock of the Company at the rate of
$10,000 per each percent.(b)(d).......................... 1,500,000 $ 1,500,000 --

Senior subordinated convertible notes with warrants, interest
only at 6% on $950,000 and 10% on $250,000, payable
quarterly if the Company is in compliance with certain
reporting and financial requirements contained in its
amended bank credit facility. Additional interest is
deferred at a rate of 8% and 4% per year, respectively,
until the earliest of three events. The notes mature on
June 30, 1998 and are subordinate to loans pursuant to
the bank credit facility (see (a)). Approximately 16% of
the original principal amount of the notes or $197,625 is
convertible until maturity into approximately 13% of the
fully diluted common stock of the Company at an average
rate of approximately $15,555 per each percent.(b)(d).... 1,200,000 1,200,000 --
</TABLE>

F-14

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(5) LONG-TERM DEBT--(CONTINUED)

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,
1994 1995 1996
---------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Senior subordinated convertible notes issued with warrants
(issued in satisfaction of unpaid interest currently due
on previously outstanding senior subordinated convertible
notes (see (b)), interest only at 6% payable quarterly
and deferred at 8% if the Company is in compliance with
certain reporting and financial requirements contained in
its amended credit facility, maturing July 1, 1998 and
subordinate to loans pursuant to the bank credit facility
(see (a))). Twenty-five percent of the original principal
amount of the notes or $59,082 is convertible until

maturity into approximately 1% of the fully diluted
common stock of the Company.(c)(d)....................... $ 236,329 $ 236,329 --

Junior subordinated note payable to a shareholder (converted
from a prior loan payable to shareholder on August 30,
1994), interest only deferred at a rate of 14% per year
(previously interest only at 6% payable quarterly and
deferred at 8%) and payable upon the completion of an
underwritten equity offering of the Company's securities
provided that certain events take place, maturing August
30, 1999 and subordinate to loans pursuant to the bank
credit facility and senior subordinated debt.(a)(d)...... 725,000 725,000 --

Note payable issued in connection with a 1995 asset
acquisition of $2,348,033, interest only at prime plus
1%, payable monthly beginning July 7, 1995, principal
payments of $39,333 plus interest beginning the earlier
of July 7, 1996 or the first day of the month following
the closing of an underwritten public offering. The note
is personally guaranteed by a shareholder of the
Company.................................................. -- 2,348,032 --

Note payable issued in connection with a 1995 asset
acquisition of $479,000, principal and interest (at 7%)
payments of $9,485 payable monthly, maturing June, 2001
and collateralized by the purchased assets with a net
book value of $541,924 at June 30, 1995.................. -- 445,154 $ 381,696

Note payable of $423,698, principal and interest (at 10%)
payments of $9,002 payable monthly, maturing May 1, 1997,
collateralized by certain high pressure cylinders with a
net book value of $173,734 at June 30, 1995 and
personally guaranteed by an officer of the Company....... 272,322 187,747 118,494
</TABLE>

F-15

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(5) LONG-TERM DEBT--(CONTINUED)

<TABLE>
<CAPTION>
JUNE 30,
------------------------- MARCH 31,

1994 1995 1996
---------- ----------- ------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to bank of $6,000,000 under a $30 million
facility, interest only for 12 months and principal
payments of $100,000 plus interest at a fixed rate of
8.51%, payable monthly for the next twenty-three months.
Any accrued interest and one final payment of all unpaid
principal due and payable on November 30, 1998; secured
by substantially all assets of the Company (note 13)..... -- -- $ 6,000,000

Note payable to bank of $13,000,000 under a $30 million
facility, interest only for 12 months at 1/4% over the
bank's prime rate, adjusted daily, with the principal
amount outstanding at the end of 12 months and 24 months
converted to term loans payable over 60 months. Any
accrued interest and one final payment of all unpaid
principal due and payable on November 30, 1998; secured
by substantially all assets of the Company............... -- -- 1,963,486

Note payable of $290,162 for the financing of equipment,
principal and interest (at 8%) payments of $6,045 payable
monthly, maturing August 3, 1997 collateralized by
equipment with a net book value of $214,840 at June 30,
1995 and personally guaranteed by a shareholder of the
Company.................................................. $ 197,627 $ 138,779 91,452

Other note payable issued in connection with a 1995 asset
acquisition, principal payments of $50,000 per annum
beginning July, 1995 through December 31, 1997........... -- 125,000 87,500

Other notes payable........................................... 38,545 35,161 92,870
---------- ----------- ------------
9,368,689 17,390,709 8,735,498
Less current maturities of long-term debt..................... 1,026,685 2,299,159 853,600
---------- ----------- ------------
Long-term debt, excluding current maturities............. $8,342,004 $15,091,550 $ 7,881,898
---------- ----------- ------------
---------- ----------- ------------
</TABLE>

The Company's various debt agreements contain, among other provisions,
requirements for maintaining certain working capital, debt to equity, debt
service and other financial ratios, as well as restrictions on capital
expenditures and incurring additional indebtedness. The Company failed to meet
certain covenant requirements at June 30, 1995 for which the Bank issued the
Company waivers as of June 30, 1995 and also modified such agreements to permit
transactions in the ordinary course of business.

In addition, the Company maintains a revolving promissory note payable to a
bank in the amount of $100,000, interest only at prime plus 2%, payable monthly
and maturing May 15, 1997. At June 30, 1995, no borrowings were outstanding

under the credit arrangements.

- ------------------
(a) The total bank credit facility is collateralized by substantially all of the
assets of the Company. Two of the shareholders have personally guaranteed up
to $1,750,000 of the loans and all of the shareholders have pledged their
stock in the Company as collateral. As consideration for $500,000 of the
guarantee, a five year warrant in September 1994 was issued to a majority
shareholder to purchase 2.5% (73,042 shares) of the

(Footnotes continued on next page)

F-16

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(5) LONG-TERM DEBT--(CONTINUED)

(Footnotes continued from previous page)

fully diluted common stock of the Company at $3.22 per share. In
consideration for the bank credit facility, a 10 year warrant was issued to
the bank in June 1995 to purchase 2.5% (84,917 shares) of the fully diluted
common stock of the Company at $5.00 per share. Prime Rate approximated 9%
at June 30, 1995.

(b) The warrants attached to the $1,500,000 and $1,200,000 senior subordinated
convertible notes, which are exercisable only to the extent that the notes
are not converted, expire on May 31, 1999 and June 30, 1999, respectively,
and contain common stock purchase rights substantially identical to those
which would be obtained by exercising the notes' conversion features. The
value of the warrants was determined by negotiations between the Company and
unrelated third parties. In addition, commencing May 21, 1997 and July 1,
1998, respectively, through May 31, 1999 and June 30, 1999, respectively,
the warrant holders have the right to redeem the warrants, or the stock
obtained either through exercise of the warrants or conversion of the notes
with the Company pursuant to a put option. The redemption price is based on
the value of the Company, as defined, at the time of redemption.

(c) The warrants attached to the $236,329 senior subordinated convertible notes,
which are exercisable only to the extent the notes are not converted, expire
on June 30, 1999, and contain common stock purchase rights substantially
identical to those which would be obtained by exercising the notes'
conversion feature. The value of the warrants was determined by negotiations
between the Company and unrelated third parties. From May 6, 1999 until May
6, 2001, the warrant holders have the right to redeem the warrants, or the

stock obtained either through exercise of the warrants or conversion of the
notes with the Company pursuant to a put option. The redemption price is
based on the value of the Company, as defined, at the time of redemption.

The aggregate maturities of long-term debt for each of the five years
subsequent to June 30, 1995 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
- -----------------------------------------------------------
<S> <C>
1996....................................................... $ 2,299,159
1997....................................................... 10,813,400
1998....................................................... 1,781,999
1999....................................................... 1,538,568
2000....................................................... 957,583
-----------
$17,390,709
-----------
-----------
</TABLE>

(d) See note 13 for discussion of conversion and repayment of certain debt.

(6) SHAREHOLDERS' EQUITY

(a) Preferred Stock

The holder of Series A cumulative deferred preferred stock is entitled to
receive cash dividends, as declared, at a rate of 14% per annum, payable
semi-annually in arrears on June 15 and December 15 commencing December 15,
1992, 9% of which will be deferred until the Company's obligations relative to
the credit facilities (see note 5(a)) and subordinated debt (see note 5(b)) are
paid in full.

The holder of Series B preferred stock is not entitled to receive any
dividends.

The holders of Series C convertible preferred stock are entitled to receive
cash dividends, as declared, at a rate of 8% per annum. The entire 8% is
deferred until the earlier of (1) an initial underwritten public offering of
common stock with gross proceeds of at least $7,500,000 at a price per share
equal to or greater than 200% of the Series C conversion price, (2) liquidation,
or (3) redemption. The holders of Series C preferred stock may convert their
shares at any time prior to an initial underwritten public offering into
approximately 5.18% of the fully diluted common stock, subject to adjustment.

F-17

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(6) SHAREHOLDERS' EQUITY--(CONTINUED)

The holders of Series D convertible preferred stock are entitled to receive
cash dividends, as declared, at a rate of 8% per annum. The entire 8% is
deferred until the earlier of (1) an initial underwritten public offering of
common stock with gross proceeds of at least $7,500,000, at a price per share
equal to or greater than 150% of the Series D conversion price, (2) liquidation,
or (3) redemption. The holders of Series D preferred stock may convert their
shares at any time prior to an initial underwritten public offering into
approximately 8.84% of the fully diluted common stock, subject to adjustment.

See note 13 for discussion of conversion and repayment of Preferred Stock.

As of June 30, 1994 and 1995, no dividends had been declared. Total
cumulative dividends in arrears at June 30, 1994 and 1995 were $141,458 and
$250,358, respectively, including $90,938 and $175,587 representing the deferred
portion at June 30, 1994 and 1995, respectively. On December 19, 1995, current
and deferred dividends of $361,275 were paid from the proceeds of the IPO
(unaudited).

(b) Other

During 1995, the Company granted options to purchase 67,934 shares of
common stock at $4.40 per share to certain officers and employees. These options
vest one year after date of grant and are exercisable for 10 years. The Company
has also granted options to purchase 45,125 shares of Common Stock at
approximately $3.00 per share to The Argentum Group in connection with the
issuance of the senior subordinated convertible notes in 1992.

(7) INCOME TAXES

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1994 1995
---------- -----------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts.......................................... $ 9,400 $ 29,000
Accrued interest payable 22,400 1,600
Deferred interest payable................................................ 35,700 91,500
Other.................................................................... 1,500 22,100
Net operating loss carryforwards......................................... 1,124,700 1,760,400
---------- -----------

Total gross deferred tax assets..................................... 1,193,700 1,904,600
Less valuation allowance................................................... (356,500) (554,900)
---------- -----------
Net deferred tax assets............................................. 837,200 1,349,700
Deferred tax liabilities:
Depreciation expense..................................................... (837,200) (1,349,700)
---------- -----------
Total gross deferred tax liabilities................................ (837,200) (1,349,700)
---------- -----------
Net deferred taxes.................................................. $ -- $ --
---------- -----------
---------- -----------
</TABLE>

At June 30, 1995, the Company had net operating loss carryforwards for
Federal income tax purposes of $4,682,000, which are available to offset future
Federal taxable income, if any, in varying amounts through June 2010. The
valuation allowance for deferred tax assets as of July 1, 1994 was $356,500. The
net change in the total valuation allowance for the year ended June 30, 1995 was
an increase of $198,400.

(8) RELATED PARTY TRANSACTIONS

The Company entered into leases with the majority shareholder for its
warehouse and office facilities with annual rentals of approximately $80,000 per
year through 1998 and approximately $17,225 for 1999. Rental expense was $61,215
and $79,640 in 1994 and 1995, respectively, under these leases.

F-18

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(8) RELATED PARTY TRANSACTIONS--(CONTINUED)

The Company is indebted to its majority shareholder for an aggregate
principal amount of $1,555,592 pursuant to two Senior Subordinated Notes and
Junior Subordinated Note. (See Note 5.)

The Company also leases an aircraft from a Company owned by the majority
shareholder for a minimum 250 hours annually at a cost of $300 per hour. Rent
expense for the year ended June 30, 1995 was $19,282 for this aircraft. The
Company also leases computer equipment from a shareholder for $2,000 per month
through March, 2000. The Company has agreed to pay The Argentum Group financial
advisory fees of $175,000 in connection with the acquisition of Bevtech and
$100,000 in connection with the IPO.

(9) LEASE COMMITMENTS

The Company leases office equipment, trucks and warehouse and office
facilities under operating leases that expire at various dates through January,
2002. Future minimum lease payments under noncancelable operating leases (that
have initial or remaining noncancelable lease terms in excess of one year) are
as follows:

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
- ------------------
<S> <C>
1996........................................................ $ 479,276
1997........................................................ 432,047
1998........................................................ 355,188
1999........................................................ 229,874
2000........................................................ 140,125
Thereafter.................................................. 91,689
----------
$1,728,199
----------
----------
</TABLE>

Total rental expense under noncancelable operating leases was approximately
$312,700 and $446,300 in 1994 and 1995, respectively.

(10) CONCENTRATION OF CREDIT AND BUSINESS RISKS

The Company's business activity is with customers located within the
southeastern United States. As of June 30, 1994 and 1995, the Company's sales to
customers in the food and beverage industry were approximately 95% and 94%,
respectively.

There were no customers that accounted for greater than 5% of total sales
for the years ended June 30, 1994 or 1995, nor were there any customers that
accounted for greater than 5% of total accounts receivable at June 30, 1994 or
1995.

(11) ABANDONED FINANCING

Professional fees incurred in connection with a proposed financing in 1994
were expensed during the year ended June 30, 1994 as this financing was
abandoned.

(12) COMMITMENTS AND CONTINGENCIES

(a) Employment Agreement

The Company has an employment agreement with an employee that provides
minimum annual compensation of $58,000 per year through December 31, 1995 and
$70,000 per year thereafter. The contract provides for additional compensation
in the form of bonuses based on performance, medical insurance coverage, and a

company vehicle. The employment agreement also includes a covenant against
competition with the Company which extends for two years after termination for
any reason. The contract expires in December, 1997.

F-19
<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(12) COMMITMENTS AND CONTINGENCIES--(CONTINUED)

(b) Other

The Company is a defendant in legal actions which arise in the normal
course of business. In the opinion of management, the outcome of these matters
will not have a material effect on the Company's financial position or results
of operations.

(13) SUBSEQUENT EVENTS (UNAUDITED)

(a) Initial Public Offering

The Company filed a registration statement with the Securities and Exchange
Commission in connection with an initial public offering (IPO) of its common
stock. In connection therewith, the Company offered 2,022,576 shares of common
stock. In addition, representatives of the Underwriters acquired warrants to
purchase up to 110,000 shares of common stock. Such warrants are exercisable for
a period of five years, at an exercise price of $10.80.

The gross proceeds the Company received from the sale of the 2,022,576
shares of Common Stock were $18,203,184. After deducting the underwriters'
discounts and commissions, the net proceeds were $16,232,804.

Prior to the IPO, the Company had outstanding approximately $2.9 million in
principal amount of Senior Subordinated Notes, a portion of which was
convertible at the option of the holders thereof into Common Stock. The holders
of the Senior Subordinated Notes converted, effective upon the closing of the
IPO, approximately $407,000 of the principal amount of the Senior Subordinated
Notes into an aggregate of 805,209 shares of Common Stock. The Company repaid
the remaining principal of the Senior Subordinated Notes and accrued interest
thereon with a portion of the net proceeds of the IPO. The Company also had
outstanding 485 shares of Series A Preferred Stock, 500 shares of Series B
Preferred Stock, 500 shares of Series C Preferred Stock and 1,500 shares of
Series D Preferred Stock. Effective upon closing of the IPO, (i) the Company
redeemed with a portion of the net proceeds of the IPO all of the outstanding
Series A Preferred Stock and Series B Preferred Stock for an aggregate of
$485,500 plus approximately $226,000 of dividends and (ii) all of the

outstanding Series C Preferred Stock and Series D Preferred Stock automatically
converted into an aggregate of 455,430 shares of Common Stock. The Company used
a portion of the net proceeds of the IPO to pay dividends of approximately
$81,000 on the Series C Preferred Stock and Series D Preferred Stock. In
addition, the holders of warrants to purchase an aggregate of 118,167 shares of
Common Stock exercised such warrants effective upon the closing of the IPO.

Prior to the IPO, the board of directors approved, among other things, an
increase in the number of shares authorized of common stock of the Company to
20,000,000 shares, reduced the par value to $.001 per share, and increased the
number of authorized shares of preferred stock to 5,000,000 shares.

The Company's board of directors also declared an approximate 3,866--for--1
stock split of the Company's common stock. This stock split resulted in the
issuance of an additional 1,932,453 shares of common stock of the Company. All
share, per share and conversion amounts relating to common stock, stock options
and warrants, included in the accompanying financial statements have been
restated to reflect this stock split.

(b) Stock Option Plans

The board of directors adopted the 1995 Stock Option Plan (the '1995
Plan'). Under the 1995 Plan, the Company has reserved 350,000 shares of common
stock for employees of the Company. Under the terms of the 1995 Plan, options
granted may be either incentive stock options or non qualified stock options, or
both. The exercise price of incentive options shall be at least equal to 100% of
the fair market value of the Company's common stock at the date of the grant,
and the exercise price of non qualified stock options issued to employees may
not be less than 75% of the fair market value of the Company's common stock at
the date of the grant. The maximum term for all options is 10 years. At June 30,
1995, there were no options granted under the Plan. Options to purchase 55,991
shares of Common Stock were issued at the time of the Company's IPO.

F-20

<PAGE>

NUCO(2) INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 30, 1994 AND 1995
AND MARCH 31, 1996 (UNAUDITED)

(13) SUBSEQUENT EVENTS (UNAUDITED)--(CONTINUED)

The board of directors of the Company adopted the Directors' Stock Option
Plan (the 'Directors' Plan'). Under the Directors' Plan each non-employee
director will receive options for 6,000 shares of Common Stock on the date of
his or her first election to the board of directors. In addition, on the third
anniversary of each director's first election to the Board, and on each three
year anniversary thereafter, each non-employee director will receive an
additional option to purchase 6,000 shares of Common Stock. The exercise price

per share for all options granted under the Directors' Plan will be equal to the
fair market value of the Common Stock as of the date of grant. All options vest
in three equal annual installments beginning on the first anniversary of the
date of grant. As of March 31, 1996, options to purchase a total of 24,000
shares of Common Stock had been issued.

The Company entered into three operating leases for warehouse facilities in
August, 1995 with aggregate annual rentals of $31,080 expiring at various dates
through July, 1998. The Company entered into operating leases for warehouse
facilities from November 1995 through March 1996 with aggregate annual rentals
of $51,792 expiring at various dates through December 1998.

(d) Loan Agreement

On November 7, 1995, the Chairman of the Board and Chief Executive Officer
of the Company loaned the Company $200,000, this was repaid at the closing of
the IPO together with interest thereon at 14% per annum.

(e) Long-term Debt

The Company entered into an agreement for a $30 million credit facility
with NationsBank of Florida, N.A. simultaneously with the closing of the IPO and
all loans with the Company's previous bank were repaid. At December 31, 1995, $6
million was outstanding pursuant to the new facility. Interest only is payable
on this loan at 8.51% for twelve months, principal of $100,000 plus interest is
payable for the next 23 months with the balance due on November 30, 1998.

(f) Repayment of Seller's Note

In January 1996, the Company repaid an outstanding loan for $2,348,083 to
the former owner of Bevtech Inc.

(g) Acquisitions

In January 1996, the Company purchased certain assets from two companies,
Holox, Ltd. and Fire-Quip Corporation. Holox, a Georgia limited partnership,
having its principal place of business in Atlanta, Georgia, sold assets for an
aggregate purchase price of $545,000. Fire-Quip, a Louisiana corporation, having
its principal place of business in Monroe, Louisiana sold assets for an
aggregate purchase price of $462,000. The Company paid cash for both of these
transactions.

On May 15, 1996, the Company purchased substantially all of the assets
associated with the bulk CO(2) operating segment of the BevServ Division of The
Coca-Cola Bottling Company of New York, Inc. for approximately $3.6 million. The
Company financed a portion of this acquisition through available borrowings
under its $30 million credit facility.

F-21

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholder
Bevtech, Inc.
Decatur, Georgia

We have audited the accompanying balance sheets of Bevtech, Inc. as of June 30,
1994 and June 7, 1995 and the related statements of operations and retained
earnings and cash flows for the year ended June 30, 1994 and for the period July
1, 1994 through June 7, 1995. 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 our 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Bevtech, Inc. as of June 30,
1994 and June 7, 1995, and the results of its operations and its cash flows for
the year ended June 30, 1994 and for the period July 1, 1994 through June 7,
1995 in conformity with generally accepted accounting principles.

COOPER, SELVIN & STRASSBERG LLP

Great Neck, New York
August 11, 1995

F-22

<PAGE>

BEVTECH, INC.
BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30, JUNE 7,
1994 1995
---------- ----------
<S> <C> <C>
ASSETS (NOTE 1)
Current Assets:
Cash and cash equivalents....................... $ 119,808 $ 14,503
Accounts receivable--net of allowance for
doubtful accounts of $9,000
at each date................................. 217,633 258,615
Inventory....................................... 32,195 41,856
Deferred expenses--sale of assets (Note 1)...... -- 99,812
Prepaid expenses and other current assets....... 59,968 --
---------- ----------
Total Current Assets......................... 429,604 414,786
---------- ----------
Property and equipment--at cost, net of
accumulated depreciation and amortization of
$744,646 and and $1,026,293, respectively (Note
3).............................................. 2,439,646 2,824,013
---------- ----------

OTHER ASSETS
Other........................................... 4,136 1,836
Restrictive covenant, net of accumulated
amortization of $73,604 and $85,427,
respectively................................. 52,575 40,752
---------- ----------
Total Other Assets........................... 56,711 42,588
---------- ----------
$2,925,961 $3,281,387
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note
5).......................................... $ 90,269 $ 106,468
Accounts payable............................. 151,719 13,657
Accrued expenses............................. 57,560 9,343
---------- ----------
Total Current Liabilities.................. 299,548 129,468
---------- ----------
Long-term debt, excluding current maturities (Note
5).............................................. 846,744 740,276
---------- ----------
Commitments and Contingencies (Note 6)
Shareholder's Equity:

Common stock, no par value, 1,000 shares
authorized, 2 shares issued
and outstanding............................ 600 600
Paid-in capital.............................. 300,000 300,000
Retained earnings............................ 1,479,069 2,111,043
---------- ----------
Total Shareholder's Equity................. 1,779,669 2,411,643
---------- ----------
$2,925,961 $3,281,387
---------- ----------
---------- ----------
</TABLE>

See Notes to Financial Statements.

F-23

<PAGE>

BEVTECH, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEAR ENDED JUNE 30, 1994 AND THE PERIOD
JULY 1, 1994 THROUGH JUNE 7, 1995

<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Net Sales......................................... $2,666,444 $2,880,197
---------- ----------
Costs and Expenses:
Cost of products sold........................ 1,102,912 1,042,276
Selling, general and administrative
expenses.................................... 678,140 811,844
Depreciation and amortization................ 269,170 315,547
---------- ----------
2,050,222 2,169,667
---------- ----------
Operating Income.................................. 616,222 710,530
---------- ----------
Other Expense:
Interest expense, net........................ (89,600) (78,556)
---------- ----------
Total other expense........................ (89,600) (78,556)
---------- ----------
Net Income........................................ 526,622 631,974
Retained Earnings--Beginning...................... 952,447 1,479,069
---------- ----------
Retained Earnings--Ending......................... $1,479,069 $2,111,043
---------- ----------
---------- ----------
Pro Forma Income Data (Unaudited) (Note 2f):
Income Before Pro Forma Income Tax

Provision................................... $ 526,622 $ 631,974
Pro Forma Income Tax Provision............... 199,900 239,900
---------- ----------
Pro Forma Net Income......................... $ 326,722 $ 392,074
---------- ----------
---------- ----------
</TABLE>

See Notes to Financial Statements.

F-24

<PAGE>

BEVTECH, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1994 AND THE PERIOD
JULY 1, 1994 THROUGH JUNE 7, 1995

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income................................... $526,622 $631,974
-------- --------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization........... 269,170 315,547
(Gain) loss on disposal of property and
equipment.............................. (9,276) 25,374
(Increase) in accounts receivable....... (1,211) (40,982)
Decrease in other receivables........... 1,450 --
(Increase) decrease in inventory........ 8,573 (9,661)
Decrease in prepaid expenses and other
current assets......................... 98 59,968
(Increase) decrease in other long-term
assets................................. (150) 2,300
Increase (decrease) in accounts
payable................................ 75,398 (138,062)
(Decrease) in accrued expenses.......... (41,357) (48,217)
-------- --------
Total Adjustments..................... 302,695 166,267
-------- --------
Net Cash Provided by Operating
Activities.......................... 829,317 798,241
-------- --------
Cash Flows from Investing Activities:
Proceeds from disposal of property and
equipment................................... 48,145 3,363
Purchase of property and equipment........... (801,563) (716,828)
(Increase) in deferred expenses--sale of
assets...................................... -- (99,812)
Decrease in note receivable.................. 202,357 --
-------- --------
Net Cash (Used in) Investing
Activities.......................... (551,061) (813,277)
-------- --------
Cash Flows from Financing Activities:
Repayment of long-term debt.................. (617,673) (90,269)
-------- --------
Net (Decrease) in Cash and Cash Equivalents....... (339,417) (105,305)
Cash and Cash Equivalents--beginning.............. 459,225 119,808
-------- --------
Cash and Cash Equivalents--ending................. $119,808 $ 14,503

-------- --------
-------- --------
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest..................................... $ 90,931 $ 78,310
-------- --------
-------- --------
Income taxes................................. $ 1,882 $ 2,387
-------- --------
-------- --------
</TABLE>

See Notes to Financial Statements.

F-25

<PAGE>

BEVTECH, INC.
NOTES TO FINANCIAL STATEMENTS

JUNE 7, 1995

NOTE 1--SALE OF ASSETS

Effective June 7, 1995, the Company sold substantially all of its assets,
except cash and accounts receivable, to NuCo(2) Inc., formerly Fowler
Carbonics, Inc. ('NuCo(2)') a Florida corporation for $6,348,033. The
transaction resulted in a net gain of $3,341,600.

The transaction is summarized as follows:

<TABLE>
<S> <C> <C>
Sales price....................................................... $6,348,033
Less: Expenses of sale............................................ (99,812)
----------
Adjusted selling price...................................... $6,248,221
Assets sold:
Property and equipment.......................................... 2,824,013
Inventory....................................................... 41,856
Restrictive covenant............................................ 40,752
----------
2,906,621
----------
Net gain on sale............................................. $3,341,600
----------
----------
</TABLE>

At closing, the Company received cash of $4,000,000, and a promissory note
in the amount of $2,348,033. The principal amount of the note is payable by
NuCo(2) in 60 equal monthly installments of $39,134 with the first installment
due and payable the earlier of (i) June 7, 1996 or (ii) the first of the month
following the closing of an underwritten public offering of NuCo(2)'s common
stock pursuant to an effective registration statement filed with the United
States Securities and Exchange Commission. Interest on unpaid principal is due
monthly in arrears at the prime rate plus one percent per annum.

Payment of the promissory note has been personally guaranteed by both the
Chairman of the Board of Directors of NuCo(2) and his wife. The guarantee will
terminate, however, if and to the extent that NuCo(2) provides the Company with
a first lien and security interest in accounts receivable and leased equipment
with a fair market value of at least 120% of the principal amount of the
promissory note then outstanding.

Additionally, as a condition of the above sale NuCo(2) entered into an
employment agreement which includes a non-compete provision, with an employee of
the Company. In consideration of the non-compete provision, the employee will

receive an aggregate of $125,000 over the term of the agreement.

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies followed by the Company in
preparation of the accompanying financial statements is set forth below:

a) Business:

Since its inception in 1988, the Company's principal business activities
have consisted of the leasing of bulk CO(2) cylinders and the selling of
carbonic gas in the southeastern United States including Georgia, Alabama and
the Carolinas.

b) Cash And Cash Equivalents:

For purposes of the statements of cash flows, the Company considers cash
and cash equivalents to include cash on hand, amounts due from banks and all
other highly liquid debt instruments purchased with an original maturity of
three months or less.

F-26

<PAGE>

BEVTECH, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 7, 1995

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

c) Inventory:

Inventory is valued at the lower of cost (on a first-in, first-out basis)
or market and consists primarily of carbon dioxide gas.

d) Property and Equipment:

Depreciation of property and equipment is computed on the straight-line
basis over the estimated useful lives of the related assets. Cost and the
related accumulated depreciation are deducted from the accounts on retirement or
disposal and any resulting gain or loss is reflected in income. Maintenance and
repairs are charged to expense when incurred. Betterments and major renewals or
replacements are capitalized.

Uninstalled cylinders are included in property and equipment and not
depreciated. Upon installation, the cylinders, component part, and capitalized
labor and overhead associated with installation are transferred to the leased
equipment account.

e) Income Recognition:

Income is generated from leasing of CO(2) systems and gas sales. Income

from CO(2) systems leasing is recognized under the operating method in
accordance with Statement No. 13, as amended, of the Financial Accounting
Standards Board. Rentals are reported as revenue as billed over the life of the
lease and expenses (including depreciation and maintenance) are charged against
such revenue as incurred. Future rentals under existing lease contracts are not
recorded as assets. The Company capitalizes the cost of leased equipment.

f) Income Taxes:

Effective July 18, 1988, the shareholder elected to be taxed pursuant to
the provisions of subchapter 'S' of the Internal Revenue and Georgia Tax Codes.
Therefore, the shareholder is taxed directly on the net income of the Company
for both Federal and Georgia State purposes.

The pro forma income tax provisions (unaudited) represent the approximate
Federal and State income taxes that the Company would have incurred had the
Company been a 'C' corporation during the periods presented and, accordingly,
subject to Federal and State income taxes.

g) Restrictive Covenant:

Represents the unamortized portion of a restrictive covenant (acquired in
connection with an asset acquisition) which is being amortized over the ten year
term of the related agreement.

NOTE 3--PROPERTY AND EQUIPMENT

Property and equipment is reflected at cost and is summarized as follows:

<TABLE>
<CAPTION>
JUNE 30, JUNE 7,
1994 1995 LIFE
---------- ---------- -----------
<S> <C> <C> <C>
Equipment and cylinders............................. $2,606,540 $3,265,581 3-20 years
Transportation equipment............................ 378,053 454,006 5-20 years
Data processing equipment........................... 78,802 75,460 7 years
Equipment held for installation..................... 65,638 --
Furniture and fixtures.............................. 40,191 40,191 5-7 years
Leasehold improvements.............................. 15,068 15,068 5 years
---------- ----------
3,184,292 3,850,306
Accumulated depreciation and amortization........... 744,646 1,026,293
---------- ----------
$2,439,646 $2,824,013
---------- ----------
---------- ----------
</TABLE>

F-27

<PAGE>

BEVTECH, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 7, 1995

NOTE 3--PROPERTY AND EQUIPMENT--(CONTINUED)

Capitalized labor and overhead costs associated with the installation of
equipment leased to others was $106,735 and $140,449 for the year ended June 30,
1994 and the period ended June 7, 1995, respectively.

NOTE 4--LEASED EQUIPMENT

The Company leases equipment to some of its customers pursuant to five year
noncancelable operating leases which expire on varying dates through June 2000.
Other customers do not have signed leases and are on a month to month basis. The
future minimum rental payments as of June 30, 1995 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
JUNE 30,
- -----------
<S> <C>
1996.................................................................. $ 386,146
1997.................................................................. 313,995
1998.................................................................. 218,445
1999.................................................................. 114,574
2000.................................................................. 43,820
-----------
$ 1,076,980
-----------
-----------
</TABLE>

NuCo(2) is currently attempting to obtain signed contracts from the
Company's remaining customers.

NOTE 5--LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
JUNE 30, JUNE 7,
1994 1995
-------- --------
<S> <C> <C>
Notes payable--shareholder (a).................................................. $860,000 $782,500
Note payable--other (b)......................................................... 77,013 64,244
-------- --------
937,013 846,744
Less current portion............................................................ 90,269 106,468
-------- --------

$846,744 $740,276
-------- --------
-------- --------
</TABLE>

- ------------------
a) Notes payable--shareholder represents a series of notes, all of which bear
interest at the rate of 9.39% per annum. Principal is payable in varying
annual installments through 2001.

b) Note payable--other consists of the remaining balance of a note issued in
connection with an asset acquisition in September 1988. The note is due in
annual installments of $20,000, including interest at the rate of 9.39% per
annum, through September 1998.

Aggregate annual maturities applicable to long-term debt are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
JUNE 30,
- -----------
<S> <C>
1996.................................................................. $ 106,468
1997.................................................................. 107,779
1998.................................................................. 139,214
1999.................................................................. 145,783
2000.................................................................. 97,500
-----------
596,744
Thereafter............................................................ 250,000
-----------
$ 846,744
-----------
-----------
</TABLE>

Interest expense for the year ended June 30, 1994 and the period ended June
7, 1995 was $89,600 and $78,556, respectively.

F-28

<PAGE>

BEVTECH, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JUNE 7, 1995

NOTE 6--COMMITMENTS AND CONTINGENCIES:

a) The Company conducts its operations from leased office, warehouse
and storage facilities. All of the Company's leases are operating leases
and none have initial or remaining noncancelable lease terms in excess of

one year as of June 7, 1995.

Total rent expense for the year ended June 30, 1994 and the period
ended June 7, 1995 approximated $45,300 and $45,800, respectively.

b) The Company may be subject to various claims, legal actions and
complaints arising in the ordinary course of business. The Company is not
aware of any such matters.

NOTE 7--REGIONAL CONCENTRATION OF CREDIT AND BUSINESS RISKS

For the period ended June 7, 1995, virtually all of the Company's sales
were to customers in the food and beverage industry in the southeastern United
States.

During the period ended June 7, 1995, no one customer accounted for more
than 5% of total sales and no customer's accounts receivable balance exceeded 5%
of the Company's total accounts receivable at June 7, 1995.

F-29

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Shareholders
NuCo(2) Inc.
Stuart, Florida

We have audited the accompanying Statement of Net Assets to be Sold of the
bulk CO(2) operating segment of the BevServ division of The Coca-Cola Bottling
Company of New York, Inc. (the "Company") as of December 31, 1995 and the
related Historical Summary of Net Sales and Direct Operating Expenses for the
year then ended. The Statement and the Historical Summary are the
responsibility of the Company's management. Our responsibility is to express
an opinion on the Statement and Historical Summary 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 Statement and Historical Summary are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Statement and the Historical
Summary. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Statement and the Historical Summary. We believe that our
audit provides a reasonable basis for our opinion.

The accompanying Statement was prepared to present the net assets of the
bulk CO(2) operating segment of the BevServ division of The Coca-Cola Bottling
Company of New York, Inc. which are to be sold to NuCo(2) Inc. pursuant to an
Asset Purchase Agreement. In addition, the Statement and the accompanying
Historical Summary were prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in the
registration statement on Form SB-2 of NuCo(2) Inc.) as described in Note 2 and
are not intended to be a complete presentation of the Company's assets and
liabilities or revenues and expenses.

In our opinion, the Statement and Historical Summary referred to above
present fairly, in all material respects, the net assets to be sold of the bulk
CO(2) operating segment of the BevServ division of The Coca-Cola Bottling
Company of New York, Inc. as of December 31, 1995 pursuant to the purchase
agreement referred to in Note 2, and its net sales and direct operating
expenses for the year then ended in conformity with generally accepted
accounting principles.

COOPER, SELVIN & STRASSBERG LLP

Great Neck, New York
May 15, 1996

F-30

<PAGE>

BULK CO(2) OPERATING SEGMENT OF THE BEVSERV DIVISION OF
THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC.
STATEMENT OF NET ASSETS TO BE SOLD
AS OF DECEMBER 31, 1995

<TABLE>
<S> <C>
Property and Equipment:
Leased equipment...................................................... $ 3,296,504
Vehicles.............................................................. 205,298
------------
3,501,802
Accumulated depreciation.............................................. 1,604,362
------------
$ 1,897,440
------------
------------
</TABLE>

See accompanying notes to financial statements.

F-31

<PAGE>

BULK CO(2) OPERATING SEGMENT OF THE BEVSERV DIVISION OF
THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC.
HISTORICAL SUMMARY OF NET SALES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<S> <C>
Net Sales............................................................... $ 1,383,796
------------
Costs and Expenses:
Cost of products sold................................................. 748,007
Salesman's salary and related expenses................................ 105,202
Depreciation.......................................................... 336,155
------------
1,189,364
------------
Net sales less direct operating expenses................................ $ 194,432
------------
------------
</TABLE>

See accompanying notes to financial statements.

F-32

<PAGE>

BULK CO(2) OPERATING SEGMENT OF THE BEVSERV DIVISION OF
THE COCA-COLA BOTTLING COMPANY OF NEW YORK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business

The bulk CO(2) operating segment of the BevServ Division of The Coca-Cola
Bottling Company of New York, Inc. ('BevServ') is a supplier of bulk CO(2)
dispensing systems to customers in the food, beverage, lodging and recreational
industries in the New York Metropolitan area.

(b) Property and Equipment

The depreciable lives of property and equipment are as follows:

<TABLE>
<CAPTION>
ESTIMATED LIFE
---------------
<S> <C>
Leased equipment............................................. 5-20 years
Vehicles..................................................... 5 years
</TABLE>

The Company earns its revenue from the leasing of CO(2) systems and related
gas sales. The Company, as lessor, recognizes revenue from the related leases.
The majority of CO(2) system leases generally include payments for leasing of
equipment and a continuous supply of CO(2) until usage reaches a pre-determined
maximum yearly level, beyond which the customer pays for CO(2) on a per pound
basis. Other CO(2) sales are recorded upon delivery to the customer.

(d) 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.

(2) ASSET PURCHASE AGREEMENT

On April 18, 1996, The Coca-Cola Bottling Company of New York, Inc.
('Coca-Cola') and NuCo(2) Inc. ('NuCo(2)') entered into an Asset Purchase
Agreement ('Agreement') pursuant to the terms of which NuCo(2) would acquire
certain assets of and the business comprising the Bulk CO(2) Operating Segment
of the BevServ Division of Coca-Cola.

The accompanying Statement of Net Assets to be Sold and the Historical
Summary of Net Sales and Direct Operating Expenses of the Bulk CO(2) Operating
Segment of the BevServ Division of Coca-Cola were prepared for purposes of Nu
Co(2) complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the assets and
liabilities or the revenues and expenses of BevServ.

The Statement of Net Assets to be Sold presents only those assets of the
Company which are to be sold to NuCo(2) pursuant to the Agreement. The
Historical Summary of Net Sales and Direct Operating Expenses includes only
those expenses of the Company which relate solely to its bulk CO(2) operating
segment. Other expenses, principally consisting of rent and general and
administrative expenses, which are not attributable solely to the bulk CO(2)
operating segment are not included herein.

See accompanying notes to financial statements.

F-33

<PAGE>

NUCO(2) INC.
PRO FORMA COMBINED BALANCE SHEET AND STATEMENTS OF OPERATIONS
(UNAUDITED)

The following pro forma combined balance sheet and statements of operations
give effect to the purchase of substantially all of the assets of Bevtech, Inc.
('Bevtech') effective June 7, 1995 and the purchase of the assets of the Bulk
CO(2) Operating Segment of The BevServ Division of The Coca-Cola Bottling
Company of New York, Inc. ('BevServ') effective May 15, 1996 by NuCo(2) Inc.
(the 'Company'). As of June 30, 1995, the financial statements of the Company
include the acquired assets of Bevtech and include the results of its operations
for the period from June 7, 1995 through June 30, 1995.

The pro forma information is based on the historical financial statements
of the Company, Bevtech and BevServ and gives effect to the transactions under
the purchase method of accounting and the assumptions and adjustments in the
accompanying notes to pro forma combined balance sheet and statements of
operations. The unaudited pro forma combined statement of operations for the
year ended June 30, 1995 combines the results of operations of Bevtech for the
period from July 1, 1994 to June 7, 1995 (date of Acquisition) and the results
of operations of BevServ for the period July 1, 1994 to June 30, 1995 with the
results of operations of the Company for the year ended June 30, 1995 as though
both acquisitions had occurred on July 1, 1994. The unaudited pro form combined
balance sheet as of March 31, 1996 combines the statement of net assets to be
sold of BevServ as of March 31, 1996 with the balance sheet of the Company as
of March 31, 1996 as though the acquisition of BevServ had occurred on March 31,
1996. The unaudited pro forma combined statement of operations for the nine
months ended March 31, 1996 combines the results of operations of BevServ for
the period July 1, 1995 to March 31, 1996 with the results of operations of the
Company for the nine months ended March 31, 1996, as though the acquisition of
BevServ had occurred on July 1, 1995.

The pro forma combined balance sheet and statements of operations have been
prepared by Company management based upon the financial statements of Bevtech
included elsewhere herein as well as upon unaudited financial statements of
BevServ for the periods presented. Financial statements of BevServ for the year
ended December 31, 1995 are included elsewhere herein. These pro forma
statements may not be indicative of the results that actually would have
occurred if the combinations had been in effect on the dates indicated or which
may be obtained in the future. The pro forma combined balance sheet and
statements of operations should be read in conjunction with the audited
financial statements and notes of the Company, Bevtech and BevServ contained
elsewhere herein.

F-34

<PAGE>
NUCO2 INC.
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
-------------------------
MARCH 31, 1996 PRO FORMA PRO FORMA
------------------------- ----------- -----------
NUCO2 BEVSERV ADJUSTMENTS COMBINED
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................... $ 1,048,352 $(1,114,374)(b) $ (66,022)
Trade accounts receivable, less allowance for doubtful
accounts of $172,468...................................... 1,058,409 1,058,409
Inventories.................................................. 41,093 41,093
Prepaid expenses and other current assets.................... 246,262 246,262
----------- ---------- ----------- -----------
Total current assets................................. 2,394,116 (1,114,374) 1,279,742
----------- ---------- ----------- -----------
Property and equipment, net.................................... 19,348,271 $1,829,166 997,608(b) 22,175,045
----------- ---------- ----------- -----------

Other assets:
Goodwill, net................................................ 2,410,657 700,000(b) 3,110,657
Deferred charges, net........................................ 431,066 431,066
Customer lists, net.......................................... 832,490 87,600(b) 920,090
Restrictive covenants, net................................... 129,166 129,166
Deferred lease acquisition costs, net........................ 662,667 662,667
Other........................................................ 29,483 29,483
----------- ---------- ----------- -----------
4,495,529 787,600 5,283,129
----------- ---------- ----------- -----------
$26,237,916 $1,829,166 $ 670,834 $28,737,916
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt......................... $ 853,600 $ 2,500,000 $ 3,353,600
Accounts payable............................................. 1,078,840 1,078,840
Accrued expenses............................................. 358,149 358,149
Other current liabilities.................................... 44,338 44,338
----------- ---------- ----------- -----------
Total current liabilities................................. 2,334,927 2,500,000 4,834,927

Long-term debt, excluding current maturities................... 7,881,898 7,881,898
Customer deposits.............................................. 176,796 176,796
----------- ---------- ----------- -----------
Total liabilities......................................... 10,393,621 2,500,000 12,893,621

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

Shareholders' equity:
Common stock; par value $.001 per share; 20,000,000 shares
authorized; issued and outstanding 5,334,335 shares....... 5,334 5,334
Additional paid-in capital................................... 18,949,517 18,949,517
Accumulated (deficit)........................................ (3,110,556) (3,110,556)
Equity in bulk CO2 BevServ assets............................ -- $1,829,166 (1,829,166) --
----------- ---------- ----------- -----------
Total shareholders' equity................................ 15,844,295 1,829,166 (1,829,166) 15,844,295
Commitments and contingencies..................................
----------- ---------- ----------- -----------
$26,237,916 $1,829,166 670,834 $28,737,916
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
</TABLE>

See Notes to Pro Forma Combined Statements of Operations.
F-35

<PAGE>

NUCO(2) INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
NUCO(2) BEVTECH BEVSERV
---------- ---------- ----------
FOR THE FROM FROM BEVTECH BEVSERV
YEAR ENDED 7/1/94 TO 7/1/94 TO PRO FORMA PRO FORMA PRO FORMA
6/30/95 6/7/95 6/30/95 ADJUSTMENTS ADJUSTMENTS COMBINED
---------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales................................ $6,061,911 $2,880,197 $1,298,462 $10,240,570
---------- ---------- ---------- ----------- ----------- -----------
Costs and expenses:
Cost of products sold.................. 2,503,159 1,042,276 748,007 $ 90,000(b) 4,383,442
Selling, general and administrative
expenses............................ 1,447,503 811,844 105,202 72,000(b) 2,436,549
Depreciation and amortization.......... 1,379,592 315,547 336,155 $ 96,830(a) 19,000(b) 2,608,672
60,000(a) 35,000(b)
366,548(a)
---------- ---------- ---------- ----------- ----------- -----------
5,330,254 2,169,667 1,189,364 523,378 216,000 9,428,663
---------- ---------- ---------- ----------- ----------- -----------
Operating income....................... 731,657 710,530 109,098 (523,378) (216,000) 811,907
Other expenses:
Interest expenses, net................. (1,264,318) (78,556) -- (557,092) -- (1,899,966)
---------- ---------- ---------- ----------- ----------- -----------
(1,264,318) (78,556) -- (557,092)(a) -- (1,899,966)
---------- ---------- ---------- ----------- ----------- -----------
Income (loss) before income taxes........ (532,661) 631,974 109,098 (1,080,470) (216,000) (1,088,059)
---------- ---------- ---------- ----------- ----------- -----------
Net income (loss)........................ $ (532,661) $ 631,974 $ 109,098 $(1,080,470) $(216,000) $(1,088,059)
---------- ---------- ---------- ----------- ----------- -----------
---------- ---------- ---------- ----------- ----------- -----------
Net income (loss) per share.............. $ (0.16) $ (0.32)
---------- -----------
---------- -----------
Weighted number of common and common
equivalent of shares outstanding....... 3,382,900 3,382,900
---------- -----------
---------- -----------
</TABLE>

See Notes to Pro Forma Combined Financial Statements.

F-36

<PAGE>

NUCO(2) INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
FOR THE NINE MONTHS ENDED
MARCH 31, 1996
------------------------------------------------------ PRO FORMA PRO FORMA
NUCO(2) BEVSERV ADJUSTMENTS COMBINED
------------------------- ------------------------- ----------- ----------

<S> <C> <C> <C> <C>
Net Sales............................... $ 8,455,077 $ 1,031,266 $ -- $9,486,343
------------- ------------- ----------- ----------

Costs and expenses:

Cost of products sold.............. 3,636,566 561,004 67,500(b) 4,265,070

Selling, general and administrative
expenses......................... 1,926,981 78,901 54,000(b) 2,059,882

Depreciation and amortization...... 1,736,236 252,116 14,500(b) 2,028,852

26,000(b)
------------- ------------- ----------- ----------

7,299,783 892,021 162,000 8,353,804
------------- ------------- ----------- ----------

Operating income................. 1,155,294 139,245 (162,000) 1,132,539
------------- ------------- ----------- ----------

Other expenses:

Interest expenses, net............. 1,152,997 -- -- 1,152,997
------------- ------------- ----------- ----------

Income (loss) before
extraordinary item............ 2,297 139,245 (162,000) (20,458)

Extraordinary item--loss on
extinguishment of debt........... (859,522) -- -- (859,522)
------------- ------------- ----------- ----------

Net income (loss)....................... $ (857,225) $ 139,245 $(162,000) $ (879,980)
------------- ------------- ----------- ----------
------------- ------------- ----------- ----------

Dividends on Preferred Stock....... $ (110,917) $ -- $ -- $ (110,917)
------------- ------------- ----------- ----------
------------- ------------- ----------- ----------

Net income (loss) attributable to common
stockholders.......................... $ (968,142) $ 139,245 $(162,000) $ (990,897)
------------- ------------- ----------- ----------
------------- ------------- ----------- ----------

Loss per common share before
extraordinary item................. $ (.03) $ (.03)
------------- ----------
------------- ----------

Net loss per common share............. $ (.23) $ (.24)
------------- ----------
------------- ----------

Weighted average number of common and
common equivalent shares
outstanding........................ 4,182,115 4,182,115
------------- ----------
------------- ----------
</TABLE>

See Notes to Pro Forma Combined Financial Statements.

F-37

<PAGE>

NUCO(2) INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)

(a) Effective June 7, 1995, the Company acquired substantially all of the
assets of Bevtech for $7,123,032. The Company financed 100% of the acquisition
through the issuance of notes payable to a bank in the amount of $3,250,000
bearing interest at the Prime Rate plus 2 1/2% (12%), a promissory note to the
seller in the amount of $2,348,032 bearing interest at the Prime Rate plus 1%
(10 1/2%), a portion of Series D Preferred Stock and additional liabilities of
$775,000.

The pro forma statement of operations combines their results of operations
for the year ended June 30, 1995 as though the acquisition occurred on July 1,
1994. In combining the entities, the following pro forma adjsutments have been
made:

(i) Under purchase accounting, Bevtech's assets and liabilities are
required to be adjusted to reflect their fair values. The
adjusted amounts have been based on computational techniques
designed to approximate their fair value. The following
adjustments have been made:

<TABLE>
<S> <C>
Assets as reported by Bevtech:
Acquired assets....................................................... $3,010,639

Fair value adjustments:
Property and equipment................................................ 1,056,361
Customer lists........................................................ 814,200
Restrictive covenants................................................. 175,000
----------
5,056,200
Goodwill.............................................................. 2,066,832
----------
Purchase price........................................................ $7,123,032
----------
----------
</TABLE>

(ii) For purposes of presenting the pro forma combined statement of

operations the following adjustments (which are expected to be
recurring) have been made:

<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30,
1995
----------
<S> <C>
DECREASE (INCREASE) IN INCOME:
Amortization of goodwill (20-year life)................................. $ 96,830
Amortization of restrictive covenants (2.5 to 5-year life).............. 60,000
Depreciation and amortization of property and equipment................. 366,548
Interest expense on notes issued to effect the acquisition**............ 557,092
Tax effects of the above adjustments*................................... 0
----------
Net adjustments....................................................... $1,080,470
----------
----------
</TABLE>

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

* Due to the losses incurred on a pro forma basis, no income tax provision has
been provided.

** A 1/8 of 1% (.125%) change in the interest rate would result in a $6,550
change in interest expense for the pro forma period.

(b) Effective May 15, 1996, the Company acquired the Bulk CO(2) Operating
Segment of the BevServ Division of The Coca-Cola Bottling Company of New York,
Inc. ('BevServ') for $3,614,374. The Company financed a portion of the
acquisition through the issuance of notes payable to a bank in the amount of
$2,500,000 bearing interest at the Prime Rate plus .25% (8.5% as of May 15,
1996). The Company intends to repay these notes payable with a portion of the
proceeds of this offering.

The pro forma balance sheet as of March 31, 1996 combines the net assets
to be sold of BevServ as of March 31, 1996 with the balance sheet of the
Company as of March 31, 1996 as though the acquisition of BevServ had occurred
on March 31, 1996. The pro forma statements of operations combines their
results of operations for the year ended June 30, 1995 and the nine months ended
March 31, 1996 as though the acquisition occurred on July 1, 1994. In combining
the entities, the following pro forma adjustments have been made:

F-38

<PAGE>

NUCO(2) INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)--(CONTINUED)

(i) Under purchase accounting, BevServ's assets are required to be
adjusted to reflect their fair values. The adjusted amounts have
been based on computational techniques designed to approximate
their fair value. The following adjustments have been made:

<TABLE>
<CAPTION>
As of As of
May 15, 1996 March 31, 1996
------------ --------------
<S> <C> <C>
Assets as reported by BevServ:
Acquired assets....................................................... $1,795,026 $1,829,166

Fair value adjustments:
Property and equipment................................................ 1,031,748 997,608
Customer lists........................................................ 87,600 87,600
---------- ----------
2,914,374 2,914,374
Goodwill.............................................................. 700,000 700,000
---------- ----------
Purchase price........................................................ $3,614,374 $3,614,374
---------- ----------
---------- ----------
</TABLE>

(ii) For purposes of presenting pro forma combined statements of
operations the following adjustments (which are expected to be
recurring) have been made:

<TABLE>
<CAPTION>
YEAR NINE MONTHS
ENDED ENDED
JUNE 30, MARCH 31,
1995 1996
-------- -----------
<S> <C> <C>
DECREASE (INCREASE) IN INCOME:
Rental expense--depots.......................................................... $ 90,000 $ 67,500
Administrative salaries and miscellaneous office expenses....................... 72,000 54,000
Depreciation and amortization of property and equipment......................... 19,000 14,500
Amortization of goodwill (20-year life)......................................... 35,000 26,000
Interest expense on notes issued to effect the acquisition*..................... 0 0
Tax effects of the above adjustments**.......................................... 0 0
-------- -----------
$216,000 $ 162,000
-------- -----------
-------- -----------
</TABLE>

(iii) For purposes of presenting the pro forma combined balance sheet
the following additional adjustments have been made:

<TABLE>
<S> <C>
Issuance of notes payable bank............................... $2,500,000
Cash......................................................... 1,114,374
----------
Purchase Price $3,614,374
----------
----------
</TABLE>

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

* Inasmuch as the Company intends to finance the acquisition only until the
proceeds of this offering are received, no interest expense has been included
herein.

** Due to the losses incurred on a pro forma basis, no income tax provision has
been provided.

F-39

upper left photo - Bulk Co(2) systems
upper right photo - High pressure cylinders
middle photo - installation vehicle
bottom photo - specialized delivery vehicle

<PAGE>

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
SHAREHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM
IT IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 7
Recent Developments............................ 10
The Company.................................... 11
Use of Proceeds................................ 11
Capitalization................................. 12
Dividend Policy................................ 13
Price Range of Common Stock.................... 13
Selected Financial Data........................ 14
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 16
Industry....................................... 22
Business....................................... 24
Management..................................... 29
Certain Transactions........................... 31
Principal and Selling Shareholders............. 33
Description of Capital Stock................... 34
Shares Eligible for Future Sale................ 35
Underwriting................................... 35
Legal Matters.................................. 37
Change in Accountants.......................... 37
Experts........................................ 37
Indemnification for Securities Act
Liabilities.................................. 38
Available Information.......................... 38
Index to Financial Statements.................. F-1
</TABLE>

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

2,000,000 SHARES

NUCO(2) INC.

COMMON STOCK

------------------------
P R O S P E C T U S
------------------------

RAYMOND JAMES &
ASSOCIATES, INC.

FIRST ANALYSIS
SECURITIES CORPORATION
, 1996

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

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Articles of Incorporation and by laws of the Company provide that the
Company may indemnify to the fullest extent permitted by Florida law any person
whom it may indemnify thereunder, including directors, officers, employees and
agents of the Company.

The Company has obtained a directors' and officers' insurance and company
reimbursement policy in the amount of $2,000,000. The policy insures directors
and officers against unindemnified loss arising from certain wrongful acts in
their capacities and would reimburse the Company for such loss for which the
Company has lawfully indemnified the directors and officers.

See the second and third paragraphs of Item 28 below for information
regarding the position of the Securities and Exchange Commission with respect to
the effect of any indemnification for liabilities arising under the Securities
Act.

Section 607.0850 of the Florida Business Corporation Act.

INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS.--(1) A
corporation shall have power to indemnify any person who was or is a party to
any proceeding (other than an action by, or in the right of, the corporation),
by reason of the fact that he is or was a director, officer, employee, or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against liability incurred in connection
with such proceeding, including any appeal thereof, if he 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 action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

(2) A corporation shall have power to indemnify any person, who was or is a
party to any proceeding by or in the right of the corporation to procure a

judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized 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, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.

(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsection (1) or subsection (2), or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.

II-1

<PAGE>

(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:

(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;

(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;

1. Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or

2. If a quorum of the directors cannot be obtained for paragraph
(a) and the committee cannot be designated under paragraph (b),
selected by majority vote of the full board of directors (in which
directors who are parties may participate); or

(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who were not parties to such proceeding or, if no such quorum
is obtainable, by a majority vote of shareholders who were not parties to
such proceeding.

(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.

(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.

(7) The indemnification and advancement of expenses provided pursuant to
this section are not exclusive, and a corporation may make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:

(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful;

(b) A transaction from which the director, officer, employee, or agent
derived an improper personal benefit;

(d) Willful misconduct or a conscious disregard for the best interests
of the corporation in a proceeding by or in the right of the corporation to
procure a judgment in its favor or in a proceeding by or in the right of a
shareholder.

(8) Indemnification and advancement of expenses as provided in this section
shall continue as, unless otherwise provided when authorized or ratified, to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person, unless otherwise provided when authorized or ratified.

II-2

<PAGE>

(9) Unless the corporation's articles of incorporation provide otherwise,
notwithstanding the failure of a corporation to provide indemnification, and
despite any contrary determination of the board or of the shareholders in the
specific case, a director, officer, employee, or agent of the corporation who is
or was a party to a proceeding may apply for indemnification or advancement of
expenses, or both, to the court conducting the proceeding, to the circuit court,
or to another court of competent jurisdiction. On receipt of an application, the
court, after giving any notice that it considers necessary, may order
indemnification and advancement of expenses, including expenses incurred in
seeking court-ordered indemnification or advancement of expenses, if it
determines that:

(a) The director, officer, employee, or agent is entitled to mandatory
indemnification under subsection (3), in which case the court shall also
order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;

(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7); or

(c) The director, officer, employee, or agent is fairly and reasonably
entitled to indemnification or advancement of expenses, or both, in view of
all the relevant circumstances, regardless of whether such person met the
standard of conduct set forth in subsection (1) subsection (2), or
subsection (7).

(10) For purposes of this section, the term 'corporation' includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.

(11) For purposes of this section:

(a) The term 'other enterprises' includes employee benefit plans;

(b) The term 'expenses' includes counsel fees, including those for
appeal;

(c) The term 'liability' includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with respect to
any employee benefit plan), and expenses actually and reasonably incurred
with respect to a proceeding;

(d) The term 'proceeding' includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal;

(e) The term 'agent' includes a volunteer;

(f) The term 'serving at the request of the corporation' includes any
service as a director, officer, employee, or agent of the corporation that
imposes duties on such persons, including duties relating to an employee
benefit plan and its participants or beneficiaries; and

(g) The term 'not opposed to the best interest of the corporation'
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.

(12) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.

II-3

<PAGE>

taken or not taken while such director or executive officer was acting in his
capacity as a director, officer, employee or agent of the Company, to the
fullest extent permitted under Florida law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated costs and expenses to be borne
by the Company in connection with the offering described in the Registration
Statement, other than underwriting commissions and discounts.

<TABLE>
<S> <C>
SEC Registration Fee.............................................................. $ 13,979
National Association of Securities Dealers, Inc. Fee.............................. 4,565
Nasdaq Listing Fee................................................................ 17,500
Legal Fees and Expenses........................................................... 125,000
Accounting Fees and Expenses...................................................... 50,000
Printing and Engraving Expenses................................................... 100,000
Blue Sky Fees and Expenses........................................................ 25,000
Transfer Agent's and Registrar's Fees............................................. 5,000
Miscellaneous Expenses............................................................ 296,456

--------
Total............................................................................. $637,500
--------
--------
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

During the past three years, the following securities were sold by the
Company without registration under the Securities Act of 1933, as amended (the
'Act'). In every case the securities were sold by the Company in reliance upon
the exemption provided by Section 4(2) of the Act and no discounts or
commissions were paid.

(i) On July 12, 1993, the Registrant sold an aggregate of $1,200,000 of 14%
Senior Subordinated Convertible Notes and warrants to purchase shares of Common
Stock to Argentum Capital Partners, L.P. ($150,000), Norwood Venture Corp.
($250,000), Edward M. Sellian ($788,000), Steven Wolosky ($6,000), and Robert L.
Frome ($6,000).

(ii) On May 6, 1994, the Registrant sold an aggregate of $236,329 of 14%
Senior Subordinated Convertible Notes and warrants to purchase shares of Common
Stock to Argentum Capital Partners, L.P. ($57,000), Fifty-Third Street Ventures,
L.P. ($77,583), Advisor Trust ($5,542), Norwood Venture Corp. ($53,042), Edward
M. Sellian ($42,592), Steven Wolosky ($285), and Robert L. Frome ($285).

(iii) On August 30, 1994, the Registrant sold a 14% Junior Subordinated
Convertible Note in the principal amount of $725,000 to Edward M. Sellian.

(iv) On August 30, 1994, the Registrant in consideration of Mr. Sellian's
guarantee in the amount of $500,000 to the Registrant's secured lender issued
him a warrant to purchase shares of Common Stock of the Company. The warrant was
exercised for 73,042 shares of Common Stock.

(v) On September 2, 1994, the Registrant sold an aggregate of 500 shares of
Series C Preferred Stock to the following persons for aggregate consideration of
$500,000: Don A. Sanders (125 shares), William M. DeArman (125 shares), John E.
Drury (125 shares), John I. Mundy (25 shares), Ben T. Morris (25 shares),
Sanders Morris Mundy Inc. (25 shares), David Bromberg (25 shares) and George L.
Ball (25 shares).

(vi) On June 7, 1995, the Registrant issued a Common Stock Purchase Warrant
to State Street Bank and Trust Company. The warrant is exercisable for 84,917
shares of Common Stock.

(vii) On June 7, 1995, the Registrant sold an aggregate of 1,500 shares of
Series D Preferred Stock to the following persons for aggregate consideration of
$1,500,000: Don A. Sanders (175 shares), William M. DeArman (175 shares), John
E. Drury (175 shares), John I. Mundy (35 shares), Ben T. Morris (35 shares),
Sanders Morris Mundy Inc. (35 shares), David Bromberg (25 shares), George L.
Ball (35 shares), Raymond L. Nelson, Jr. (50 shares), Bruce McMaken (10 shares),

Environmental Private Equity Fund II, L.P. (615 shares),

II-4

<PAGE>

The Argentum Group (10 shares), Arnold and Sandra Raynor jtwros (25 shares), The
Productivity Fund II, L.P. (100 shares).

ITEM 27. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
***1 -- Form of Underwriting Agreement.
**3.1 -- Amended and Restated Articles of Incorporation of the Registrant.
**3.2 -- Bylaws of the Registrant.
5 -- Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect to the legality of the Common Stock.
**10.1 -- 1995 Stock Option Plan.
**10.2 -- Directors' Stock Option Plan.
**10.3 -- Noncompetition Agreement between the Registrant and Joseph M. Criscuolo, dated November 30, 1995.
**10.4 -- Noncompetition Agreement between the Registrant and Edward M. Sellian, dated November 30, 1995.
**10.5 -- Asset Purchase Agreement among the Registrant, Bevtech, Inc., E. Reid Hunter, Edward M. Sellian and
Suzan Sellian.
**10.6 -- Lease for 2528 North Tamiami Trail, Ft. Myers, Florida, between the Registrant and Edward M.
Sellian.
**10.7 -- Lease for 2820 Southeast Market Place, Stuart, Florida between the Registrant and Edward M. Sellian.
**10.8 -- Lease for supply and storage depot, Ault Road, Stuart, Florida, between the Registrant and Edward M.
Sellian.
**10.9 -- Airplane lease dated March 30, 1995 between the Registrant and Suzan Charters, Inc.
**10.10 -- IBM AS/400 computer lease dated April 1, 1994 between the Registrant and EMS Bandit Inc.
**10.11 -- Form of Indemnification Agreement between the Registrant and directors and officers of the
Registrant.
**10.12 -- Form of Representatives' Warrant dated December 1995 among the Registrant, Raymond James &
Associates, Inc. and First Analysis Securities Corporation.
10.13 -- Lease for 2800 Southeast Market Place, Stuart, Florida between the Registrant and Edward M. Sellian.
10.14 -- Asset Purchase Agreement between the Registrant and The Coca-Cola Bottling Company of New York,
Inc., dated April 18, 1996.
10.15 -- Amendment No. 1 to Asset Purchase Agreement between the Registrant and The Coca-Cola Bottling
Company of New York, Inc., dated May 15, 1996.
11.1 -- Statement re: computation of per share earnings.
**16 -- Letter of Cooper Selvin & Strassberg dated December 11, 1995
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Cooper Selvin & Strassberg LLP.
23.3 -- Consent of Olshan Grundman Frome & Rosenzweig LLP, included in Exhibit 5.
***24 -- Power of Attorney.
</TABLE>

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

* To be filed by amendment.
** Incorporated by reference to the Registrant's Registration Statement on Form
SB-2, filed with the Commission on November 7, 1995 (Commission File No.
33-99078), as amended.

*** Previously filed.

II-5

<PAGE>

ITEM 28. UNDERTAKINGS.

The undersigned small business issuer will provide to the Representative at
the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Representatives to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer 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 and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
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 small business issuer 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 of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

The undersigned small business issuer will:

(1) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration statement as
of the time the Commission declared it effective.

(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and the offering of the securities at that time as the initial
bona fide offering of those securities.

II-6

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Stuart, State of Florida, on the 15th day of May, 1996.

By: /s/ JOSEPH CRISCUOLO
Name: Joseph Criscuolo
Title: President

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
- --------------------------------------------- ------------------------------------------- ------------------
<S> <C> <C>
* Chairman of the Board and Chief Executive May 15, 1996
- --------------------------------------------- Officer (Principal Executive Officer)
Edward M. Sellian

/s/ JOSEPH M. CRISCUOLO President, Chief Operating Officer May 15, 1996
- --------------------------------------------- and Director
Joseph M. Criscuolo

* Chief Financial Officer (Principal May 15, 1996
- --------------------------------------------- Financial Officer and Principal Accounting
Edward W. Dean Officer)

* Director May 15, 1996
- ---------------------------------------------
Robert L. Frome

* Director May 15, 1996
- ---------------------------------------------
John J. O'Neil

* Director May 15, 1996
- ---------------------------------------------
Edward F. O'Reilly

* Director May 15, 1996
- ---------------------------------------------
William B. Porter

* By: /s/ JOSEPH CRISCUOLO
- ---------------------------------------------
Joseph Criscuolo
Attorney-in-Fact
</TABLE>

II-7

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBIT NUMBER
- -------- ------------------------------------------------------------------------------------------ -------
<S> <C> <C> <C>
***1 -- Form of Underwriting Agreement.

**3.1 -- Amended and Restated Articles of Incorporation of the Registrant.

**3.2 -- Bylaws of the Registrant.

5 -- Opinion of Olshan Grundman Frome & Rosenzweig LLP with respect to the legality of the
Common Stock.

**10.1 -- 1995 Stock Option Plan.

**10.2 -- Directors' Stock Option Plan.

**10.3 -- Noncompetition Agreement between the Registrant and Joseph M. Criscuolo, dated November
30, 1995.

**10.4 -- Noncompetition Agreement between the Registrant and Edward M. Sellian, dated November 30,
1995.

**10.5 -- Asset Purchase Agreement among the Registrant, Bevtech, Inc., E. Reid Hunter, Edward M.
Sellian and Suzan Sellian.

**10.6 -- Lease for 2528 North Tamiami Trail, Ft. Myers, Florida, between the Registrant and Edward
M. Sellian.

**10.7 -- Lease for 2820 Southeast Market Place, Stuart, Florida between the Registrant and Edward
M. Sellian.

**10.8 -- Lease for supply and storage depot, Ault Road, Stuart, Florida, between the Registrant and
Edward M. Sellian.

**10.9 -- Airplane lease dated March 30, 1995 between the Registrant and Suzan Charters, Inc.

**10.10 -- IBM AS/400 computer lease dated April 1, 1994 between the Registrant and EMS Bandit Inc.

**10.11 -- Form of Indemnification Agreement between the Registrant and directors and officers of the
Registrant.

**10.12 -- Form of Representatives' Warrant dated December 1995 among the Registrant, Raymond James &
Associates, Inc. and First Analysis Securities Corporation.

10.13 -- Lease for 2800 Southeast Market Place, Stuart, Florida between the Registrant and Edward
M. Sellian.

10.14 -- Asset Purchase Agreement between the Registrant and The Coca-Cola Bottling Company of New
York, Inc., dated April 18, 1996.

10.15 -- Amendment No. 1 to Asset Purchase Agreement between the Registrant and The
Coca-Cola Bottling Company of New York, Inc., dated May 15, 1996.

11.1 -- Statement re: computation of per share earnings.

**16 -- Letter of Cooper Selvin & Strassberg dated December 11, 1995

23.1 -- Consent of KPMG Peat Marwick LLP.

23.2 -- Consent of Cooper Selvin & Strassberg LLP.

23.3 -- Consent of Olshan Grundman Frome & Rosenzweig LLP, included in Exhibit 5.

***24 -- Power of Attorney.
</TABLE>

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

* To be filed by amendment.

** Incorporated by reference to the Registrant's Registration Statement on Form
SB-2, filed with the Commission on November 7, 1995 (Commission File No.
33-99078), as amended.

*** Previously filed.

<PAGE>

May 15, 1996

Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549

Re: NuCo(2) Inc.
Registration Statement on Form SB-2 (File No. 333-3352)

Ladies and Gentlemen:

Reference is made to the Registration Statement on Form SB-2
(File No. 333-3352) dated April 11, 1996, as amended this date (the
"Registration Statement"), filed with the Securities and Exchange Commission by
NuCo(2) Inc., a Florida corporation (the "Company"). The Registration Statement
relates to an aggregate of 2,300,000 shares of common stock, par value $.001 per
share (the "Common Stock"). Of the Common Stock being registered, 1,185,165
shares, will be issued and sold by the Company (the "Company Shares"), and
1,114,835 shares, inclusive of 300,000 shares subject to an over-allotment
option granted to the Underwriters, will be sold by certain selling shareholders
(the "Selling Shareholder Shares"). All capitalized terms not defined herein
shall have the meanings accorded them in the Registration Statement.

We advise you that we have examined originals or copies
certified or otherwise identified to our satisfaction of the Articles of
Incorporation and By-laws of the Company, minutes of meetings of the Board of
Directors and shareholders of the Company, the Registration Statement, the
Underwriting Agreement and such other documents, instruments and certificates of
officers and representatives of the Company and public officials, and we have
made such examination of the law as we have deemed appropriate as

<PAGE>

May 15, 1996
Page -2-

the basis for the opinion hereinafter expressed. In making such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to original documents
of documents submitted to us as certified or photostatic copies.

Based upon the foregoing, we are of the opinion that:

(a) The Company Shares, when issued and paid for in accordance
with the terms and conditions set forth in the Registration Statement, will be
duly and validly issued, fully paid and non-assessable; and

(b) The Selling Shareholder Shares have been duly and
validly issued and are fully paid and non-assessable.

We advise you that Robert L. Frome, who will be a director of
the Company, is a shareholder of the Company and a member of this firm. Other
members of the firm are also shareholders of the Company.

We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and we further consent to the reference to this
firm under the caption "Legal Matters" in the Registration Statement and the
Prospectus forming a part thereof.

Very truly yours,

OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP

<PAGE>

LEASE

LANDLORD:
EDWARD M. SELLIAN

TENANT:
NuCO(2), INC.

Prepared By:
McCarthy, Summers, Bobko, McKey, Wood & Sawyer, P.A.

<PAGE>

LEASE SUMMARY

LANDLORD: EDWARD M. SELLIAN

ADDRESS: 6794 Isle Way, Stuart, Florida 34996

TENANT: NUCO(2), INC.

ADDRESS: P.O. BOX 2280, Stuart, Florida 34995

PREMISES:

ADDRESS: 2800 S.E. Market Place, Stuart, Florida

COMMENCEMENT DATE: APRIL 1, 1996

SECURITY DEPOSIT: $13,145.85

TERM: FIVE (5 YEARS)

USE:

EXHIBIT LIST: A - LEGAL DESCRIPTION

<PAGE>

INDEX TO LEASE

<TABLE>
<S> <C> <C>
ARTICLE I PREMISES............................................................................ 5
Section 1. Premises ........................................................................... 5
Section 2. Condition of Premises............................................................... 5

ARTICLE II TERM................................................................................ 6
Section 1. Commencement........................................................................ 6
Section 2. Abandonment......................................................................... 6
Section 3. Option to Renew..................................................................... 6

ARTICLE III RENT AND ADDITIONAL CHARGES......................................................... 6
Section 1. Minimum Rent........................................................................ 6
Section 2. Rent Adjustments.................................................................... 6
Section 3. Late Payments....................................................................... 7
Section 4. Taxes and Insurance................................................................. 7
Section 5. First Month's Rent, and Security Deposit............................................ 8

ARTICLE IV IMPROVEMENTS........................................................................ 8
Section 1. Alterations, Mechanics Liens........................................................ 8

ARTICLE V USE OF PREMISES AND ASSIGNMENT...................................................... 9
Section 1. Use................................................................................. 9
Section 2. Hazardous Wastes.................................................................... 9
Section 3. Assignment.......................................................................... 10
Section 4. Assignment Expenses................................................................. 10

ARTICLE VI MAINTENANCE AND REPAIR.............................................................. 11
Section 1. Responsibilities of Tenant.......................................................... 11
Section 2. Pest Service........................................................................ 12

ARTICLE VII INSURANCE AND INDEMNITY............................................................. 12
Section 1. Insurance by Tenant................................................................. 12
Section 2. Landlord's Insurance................................................................ 13
Section 3. Increase in Premiums................................................................ 13
Section 4. Indemnification and Release......................................................... 13

ARTICLE VIII SUBORDINATION AND ATTORNMENT........................................................ 13
Section 1. Subordination....................................................................... 14
Section 2. Governmental Regulations............................................................ 15

ARTICLE IX DAMAGE BY FIRE OR OTHER CAUSE....................................................... 15
Section 1. Reconstruction...................................................................... 15
Section 2. Damage to Premises.................................................................. 15
Section 3. Damage in Last Year................................................................. 15
Section 4. Compensation........................................................................ 15
15

ARTICLE X EMINENT DOMAIN...................................................................... 16
Section 1. Total Condemnation.................................................................. 16

</TABLE>

-2-

<PAGE>

<TABLE>
<S> <C> <C>
Section 2. Partial Condemnation................................................................ 16
Section 3. Landlord's Damages.................................................................. 16
Section 4. Tenant's Damages.................................................................... 16
Section 5. Sale Under Threat of Condemnation................................................... 17

ARTICLE XI DEFAULTS AND REMEDIES............................................................... 17
Section 1. Default ........................................................................... 17
Section 2. Remedies............................................................................ 18
Section 3. Landlord's Cure..................................................................... 19
Section 4. Redemption Waiver................................................................... 19
Section 5. Injunction and Landlord's Non-waiver................................................ 19
Section 6. Landlord's Default.................................................................. 20

ARTICLE XII NOTICES............................................................................. 20

ARTICLE XIII MISCELLANEOUS....................................................................... 21
Section 1. Holdover ........................................................................... 21
Section 2. Ownership of Improvements........................................................... 21
Section 3. End of Term......................................................................... 21
Section 4. Waivers ........................................................................... 22
Section 5. No Other Waivers or Modifications................................................... 22
Section 6. Estoppel Certificates............................................................... 23
Section 7. Unavoidable Delays.................................................................. 23
Section 8. Waiver of Landlord's Liability...................................................... 23
Section 9. Guarantor........................................................................... 24
Section 10. Successor and Assigns............................................................... 24
Section 11. Lender's Modifications.............................................................. 24
Section 12. Interpretation...................................................................... 24
Section 13. Complete Agreement.................................................................. 25
Section 14. Recording........................................................................... 25
Section 15. Counterparts........................................................................ 25
Section 16. Landlord's Right to Show Premises................................................... 25
Section 17. Litigation.......................................................................... 25
Section 18. Waivers of Subrogation.............................................................. 25
Section 19. Tenant - Corporation or Partnership................................................. 25
Section 20. Licenses ........................................................................... 26
Section 21. No Brokers.......................................................................... 26
Section 22. Number and Gender................................................................... 26
Section 23. Time of Essence..................................................................... 26
Section 24. Utilities........................................................................... 26
Section 25. Financing........................................................................... 26
</TABLE>

Exhibit "A" - Legal Description

-3-

<PAGE>

AGREEMENT OF LEASE

THIS AGREEMENT OF LEASE, executed in duplicate as of the ____ day of
___________________, 1996, by and between EDWARD M. SELLIAN (hereinafter
referred to as "Landlord"), and NuCO(2), INC.
(hereinafter referred to as "Tenant").

W I T N E S S E T H:

WHEREAS, the Landlord desires to lease to the Tenant the certain
premises hereinafter described upon the terms, covenants, conditions and
provisions hereinafter in this Lease set forth, and the Tenant desires to lease
the same from the Landlord upon such terms, covenants, conditions and
provisions;

NOW, THEREFORE, in consideration of the various provisions herein
contained, together with the sum of TEN DOLLARS ($10.00), receipt of which is
hereby acknowledged by each party from the other, the Lease of such premises is
granted by the Landlord and accepted by the Tenant upon the terms, covenants,
conditions and provisions contained in this Lease, and the Landlord and the
Tenant hereby covenant and agree with each other as follows:

ARTICLE I

PREMISES

Section 1. Premises. The Landlord hereby leases to Tenant and
Tenant hereby rents from Landlord certain premises, the legal description of
which is attached hereto as Exhibit "A" (Said premises are hereinafter referred
to as the "premises").

Section 2. Condition of Premises. The taking of possession
of the premises by Tenant shall be conclusive evidence with respect to Tenant:

(a) that it accepts the premises "as is" and it
acknowledges the premises to be suitable for the purposes of which
they are leased;

(b) that it accepts the premises and each and
every part and appurtenance thereof as being in a good and satisfactory
condition; and

-4-

<PAGE>

ARTICLE II

TERM

Section 1. Commencement. The term of this Lease Agreement
shall be for five (5) years (hereinafter referred to as the "term"), commencing
on April 1, 1996.

Section 2. Abandonment. Tenant shall not vacate or abandon the
premises at any time during the term of this Lease, nor permit the premises to
remain unoccupied for a period longer than thirty (30) consecutive days during
the term of this Lease.

Section 3. Option to Renew. The Tenant shall have the right,
power and ability to renew this Lease for an additional term of five (5) years
upon the expiration of the term set forth in Section 1 above. In order to so
renew this Lease for such additional term, the Tenant must give written notice
to the Landlord of its intent to renew. In order to be effective, such written
notice must be received by the Landlord no more than 240 days prior to the
expiration of the initial five (5) year term and no less than 180 days prior to
the expiration of the initial five (5) year term of this Lease as set forth in
Section 1 above. In the event the Tenant properly renews the Lease and extends
the term as aforesaid, the rent during such extended term shall be adjusted
pursuant to the provisions of Section 2 of Article III hereof.

ARTICLE III

RENT AND ADDITIONAL CHARGES

Section 1. Minimum Rent. Subject to adjustments in the amount
of minimum rent, pursuant to the provisions of this Lease, Tenant agrees to pay
to Landlord at such places as may be designated from time to time by Landlord,
and Landlord agrees to accept as minimum rent (hereinafter as adjusted referred
to as "minimum rent") for the premises the annual amount of ONE HUNDRED
FIFTY-SEVEN THOUSAND SEVEN HUNDRED FIFTY AND 20/100 DOLLARS ($157,750.20), plus
applicable sales tax, in lawful money of the United States, payable in equal
consecutive monthly installments in advance, on the first day of each month
during the term of this Lease. All minimum rent shall be paid without any setoff
or deduction and with applicable sales taxes.

Section 2. Rent Adjustments. In the event the Tenant properly
exercises its option to renew and extend the term of this Lease as set forth in
Section 3 of Article II hereof, during the extended five (5) year term, the rent
shall be adjusted as follows:

(a) At the time that the Tenant gives notice
that it intends to exercise its option to renew, the Landlord shall order an
appraisal of the premises. Said appraisal shall be performed by an MAI
appraiser selected by the Landlord and instructed to determine the fair market
value of the premises including all improvements located thereon.

-5-

<PAGE>

(b) All costs associated with said appraisal
shall be borne by the Tenant.

(d) The new rent shall be determined by taking
the appraised value of the premises as determined by the appraisal as
aforesaid, and multiplying such amount of 10.75%. The result of this
multiplication shall be the new annual rent hereunder payable in monthly
installments, plus tax, as set forth in Section 1 above. Provided, however, in
no event shall rent for the renewal term be less than the current rent set
forth in Section 1 above.

Tenant's obligation to pay the rent adjustments for the full
term of this Lease shall survive the expiration or termination of this Lease.

Tenant shall pay to Landlord the minimum rent and the rent
adjustments and any other sums owing under this Lease promptly when due without
notice or demand therefore and without any abatement, deduction, counterclaim or
setoff for any reason whatsoever, except as may be expressly provided in this
Lease. No payment by Tenant or receipt or acceptance by Landlord of a lesser
amount that the correct minimum rent or rent adjustments shall be deemed to be
other than the payment on account, nor shall any endorsement or statement on any
check or letter accompanying any payment be deemed an accord or satisfaction,
and Landlord may accept such payment without prejudice to it right to recover
the balance or pursue any other remedy in this Lease or at law.

Section 3. Late Payments. If any payment of rent or other sums
due hereunder is made later than the tenth (10th) day of each month, a late fee
equal to five percent (5%) of any payment received after the tenth (10th) day of
such month shall be paid by Tenant, without demand by Landlord, unless a lesser
rate shall then be the maximum rate permissible by law, in which event said
lesser rate shall be charged. Acceptance of such late charge by Landlord shall
in no event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any other rights and remedies
granted hereunder.

Section 4. Taxes and Insurance. The Tenant shall pay all ad
valorem taxes levied against the premises. In addition, the Tenant shall pay for
the cost of the Landlord's insurance pursuant to Section 2 of Article VII
hereof. On the first day of each month, in addition to making the monthly rental
payments required in Section 1 hereof, the Tenant shall pay to the Landlord an
amount equal to 1/12 of the yearly amount due from the Tenant to the Landlord
for taxes and insurance. This monthly figure shall be established by the
Landlord in a written notice to the Tenant on January 1st of each Lease year. At

such time as the annual bill for ad valorem taxes and insurance is received by
the Landlord, the Landlord shall send a copy thereof to the Tenant and in the
event the sums collected by the Landlord from the Tenant on a monthly

-6-

<PAGE>

basis are insufficient to pay either or both of the ad valorem taxes and
insurance, the Tenant shall pay any such shortage within 30 days of demand
therefore from the Landlord. In the event the sums collected from the Tenant by
the Landlord on a monthly basis are in excess of the actual bills for ad valorem
taxes and/or insurance, the Landlord shall make an appropriate adjustment of the
monthly payment required hereunder for the next ensuing year. Upon the
expiration of the term hereof, the Landlord and the Tenant shall account one to
the other for any excess or shortage paid or due for taxes and insurance.
Failure of Tenant to make the monthly payments required hereunder, or failure of
the Tenant to pay any shortage required for taxes and/or insurance, as required
hereunder, shall constitute a default under this Lease.

Section 5. First Month's Rent, and Security Deposit. Upon
the execution hereof, the Tenant shall pay to the Landlord the sum of
$26,291.70 representing rent for the first month, $13,145.85, and a security
deposit of $13,145.85 for the full and faithful performance by the Tenant of
the terms, conditions and covenants of this Lease on the Tenant's part to be
performed and for the cost of any repair or correction of damage in excess of
normal wear and tear. The security deposit shall be placed by the Landlord in
an interest bearing account with a banking institution located in Stuart,
Florida. The security deposit or any balance thereof shall be returned with
interest after the Tenant has vacated and left the Premises in an acceptable
condition (following a personal inspection by Landlord) and surrendered all
keys. If Landlord determines that any loss, damages, or injury chargeable to
the Tenant hereunder exceeds the security deposit, with interest, the Landlord,
at his option, may retain the said sum as liquidated damages or may apply the
sum against any actual loss, damage, or injury and the balance thereof will be
the responsibility of Tenant. Landlord's determination of the amount, if any,
to be returned to the Tenant shall be final. It is further understood and
agreed that the said security deposit is not to be considered as the last
payment under the Lease.

ARTICLE IV

IMPROVEMENTS

Section 1. Alterations, Mechanics Liens. Tenant
shall not make or permit any repairs, improvements, installations
or alterations whatsoever to be made to the premises without prior
written consent of Landlord. Any addition to or alteration of the
premises (except furniture and trade fixtures) shall become at once
a part of the realty and belong to Landlord. As a condition of
such consent, Landlord may require Tenant to provide such documents

and other evidence as Landlord may, in its sole discretion, deem
appropriate, including, but not limited to: (a) proposed plans and
specifications for any such repairs, improvements, installations or
alterations, and (b) all documents necessary to show permits have
been obtained and that the proposed work will not in any way affect
the structural integrity of the premises. Tenant shall supply to
Landlord as-built drawings of all such work within thirty (30) days

-7-

<PAGE>

after completion of such work. Tenant will post notices of Landlord's
non-responsibility for material supplied, labor performed, and any injuries or
accidents at all entrances to the premises prior to commencement of the said
work. Not later than the last day of the term, Tenant, at its expense, shall
remove all of Tenant's personal property which has not become the property of
Landlord and Tenant's furniture and trade fixtures, repair all injury done by or
in connection with the installation or removal of same, and surrender the
premises in as good condition as they were at the beginning of the term,
reasonable wear and tear expected.

Tenant shall keep the premises and therein free from any liens
arising out of any work performed, material furnished or obligations incurred by
Tenant; and failure to do so shall constitute a default by Tenant. Tenant,
within thirty (30) days after notice from Landlord, shall discharge any
construction lien for materials or labor claimed to have been furnished to the
Premises on Tenant's behalf. Landlord, at its sole option, may require Tenant to
post a bond to guarantee payment of obligations of Tenant which could be secured
with liens recordable against the premises. In the event Tenant fails to so
discharge such liens, Tenant shall be in default of this Lease whereupon
Landlord shall have the right to take any action necessary to satisfy,
compromise or bond any such liens, whereupon Tenant shall be liable to Landlord,
on demand, for all costs and expenses incurred by Landlord to obtain a discharge
or bond of such lien.

ARTICLE V

USE OF PREMISES AND ASSIGNMENT

Section 1. Use. It is understood, and the Tenant so agrees,
that the demised premises, during the term may be used and occupied only for
the following purpose: The current uses implied by the Tenant at its other
locations.

Section 2. Hazardous Wastes. Tenant hereby agrees to
indemnify Landlord and hold Landlord harmless from and against any and all
losses, liabilities, including strict liability, damages, injuries, expenses,
including attorneys' fees, costs of any settlement or judgment and claims of
any and every kind whatsoever paid, incurred or suffered by or asserted against
Landlord by any person or entity or Governmental agency for, with respect to,

or the escape, seepage, leakage, spillage, discharge, omission, discharging or
release from the Premises of any hazardous substance (including, without
limitation, any losses, liabilities, including strict liability, damages,
injuries, expenses, including reasonable attorneys' fees, costs of any
settlement or judgment or claims asserted or arising under the Comprehensive
Environmental Response Compensation and Liability Act, any so called federal,
state or local SuperFund, SuperLien Laws, statutes, law, ordinance, code, rule,
regulation, order or decree regulating with respect to or opposing liability,
including strict liability, substances or standards of conduct concerning any
hazardous substance), (ii) any additional costs required to take necessary
precautions to protect

-8-

<PAGE>

against the release of hazardous substances located on, in, under, or affecting
the Premises into the air, any body of water, or other public domain, or into
any surrounding areas, and (iii) any costs incurred to comply in connection with
all or any portion of the Premises with all applicable laws, orders, judgments
and regulations with respect to hazardous wastes, whether or not Landlord is
still the owner of the Premises.

For purposes of this instrument "hazardous substances" shall
mean and include those elements or compounds which are contained in the list of
hazardous substances adopted by the United States Environmental Protection
Agency (EPA) or the list of toxic pollutants designated by Congress or the EPA
or defined by any other federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to or imposing liability
or standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material as now or at any time in effect.

Section 3. Assignment. Tenant will not transfer, assign,
mortgage, or otherwise encumber this Lease in whole or in part, nor sublet all
or any part of the premises, without the prior written consent of Landlord,
which consent Landlord shall have the right to unreasonably withhold. The
consent by Landlord to any assignment or subletting shall not constitute a
waiver of the necessity for such consent to any subsequent assignment or
subletting. This prohibition against assigning or subletting shall be construed
to include a prohibition against any assignment or subletting by operation of
law. Any consent by Landlord to an assignment or subletting shall not release
the Tenant of any liability for all obligations arising out of this Lease. In
the event the Tenant is a corporation, any transfer or new issue of more than
thirty (30%) percent of the stock of the corporation shall be deemed an
assignment of the Lease.

Section 4. Assignment Expenses. In the event Tenant desires to
assign or sublet the premises, Tenant shall submit a written request to
Landlord, containing such documentation as may be reasonably required by the
Landlord to review any proposed assignment or sublease, together with the
payment of an advance fee in the sum of ONE HUNDRED AND 00/100 DOLLARS

($100.00), representing an initial payment towards reimbursement to landlord of
its administrative and legal costs in reviewing such an assignment or sublease.
Tenant shall, nonetheless, pay to Landlord, upon demand, reimbursement of
Landlord's actual expenses for such review. In the event Landlord's actual
expenses are less than said $100.00 prepaid fee, Tenant shall be entitled to a
refund of such excess. The intent of this provision is to require Tenant to pay
to Landlord all of (but not more than) Landlord's expenses incurred as a result
of Tenant's proposed assignment or sublease, regardless of whether or not
Landlord consents thereto.

ARTICLE VI

MAINTENANCE AND REPAIR

-9-

<PAGE>

Section 1. Responsibilities of Tenant.

(a) Tenant agrees to repair and maintain in good
and operational order and condition the interior and exterior portions of the
leased premises, including the store front, doors, windows, plate and window
glass, floor covering, plumbing, heating, air conditioning, electrical
facilities installed by Tenant, sewage system facilities, appliances,
furnishings and personal property, the lawn, shrubbery, parking facilities and
any drainage facilities. Tenant, at its sole cost, shall maintain the air
conditioning unit(s) and duct(s) for the leased premises (including heating
unit(s) and duct(s) for the leased premises) in good and operational condition
and repair throughout the term of this Lease.

(b) Tenant will not install any equipment which
exceeds the capacity of the utility lines leading into the leased
premises or the building.

(c) Tenant, its employees, or agents, shall not
mark, paint, drill or in any way deface any walls, ceilings, partitions, floors,
wood, stone, plaster or drywall or ironwork without Landlord's prior written
consent.

(d) Tenant shall comply with the requirement of
all laws, orders, ordinances and regulations of all governmental authorities
and will not permit any waste of to be committed and will take care of and keep
the premises in a neat, clean and sanitary condition at all times.

(e) Tenant shall give Landlord prompt written
notice of any accident, fire or damage occurring on or to the leased premises,
and of any lawsuits filed against Tenant with regard to same.

(f) Neither Landlord nor Landlord's agents or

servants shall be liable for any damages caused by or growing out of any
breakage, leakage, or defective condition of the electric wiring, air
conditioning or heating pipes and equipment, closets, plumbing, appliances,
sprinklers, other equipment, or other facilities, serving the leased premises.
Neither Landlord nor Landlord's agents or servants shall be liable for any
damages caused by or growing out of any defect in the leased premises or any
part thereof by fire, rain, wind or other cause.

(g) All belonging to Tenant or any occupancy of
the leased premises or the building shall be there at the risk of Tenant or
such other person only, and Landlord shall not be liable for damage thereto to
theft or misappropriation thereof.

(h) At the expiration of the Lease, Tenant
shall surrender the leased premises in the same condition as the leased
premises were in upon delivery of possession to Tenant under this Lease,
reasonable wear and tear and alterations excepted, and shall surrender all keys
for the leased premises to Landlord. Tenant's

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<PAGE>

obligation to observe or perform this covenant shall survive the expiration or
other termination of the term of the Lease.

Section 2. Pest Service. The Tenant shall maintain,
at its own expense, a monthly pest extermination service so as to
keep the premises free of same.

ARTICLE VII

INSURANCE AND INDEMNITY

Section 1. Insurance by Tenant. Tenant shall maintain the
following insurance: (a) comprehensive general public liability insurance in
respect of the premises including surrounding landscaped areas and paved areas
and the conduct or operation of business therein, with Landlord as an additional
named insured, with limits and with companies as may be required by Landlord,
(b) fire insurance and extended coverage insurance in respect to all of Tenant
in the Premises in not less than 90% of the full insurable value of the covered
and not less than the amount sufficient to avoid the effect of the co-insurance
provisions of the applicable policy or policies. Tenant shall deliver to
Landlord and any additional named insured such fully paid policies at least ten
(10) days before the commencement date of this Lease. Tenant shall procure and
pay for renewals of such insurance from time to time before the expiration
thereof, and Tenant shall deliver to Landlord and any additional named insured
such renewal policy at least thirty (30) days before the expiration of any
existing policy. All such policies shall be issued by companies of recognized
responsibility licensed to do business in the State of Florida, and all such
policies shall contain a provision whereby the same cannot be canceled unless

Landlord and any additional insured are given at least ten (10) days prior
written notice of such cancellation. Tenant shall add as additional insureds to
such insurance policies any mortgagee(s) of Landlord as requested in writing by
Landlord from time to time.

Section 2. Landlord's Insurance. Landlord shall be responsible
for providing and maintaining fire and extended coverage insurance covering the
subject premises and all of Landlord's fixtures, furniture and equipment in
amounts and with companies as are satisfactory to Landlord in its sole and
absolute discretion.

Section 3. Increase in Premiums. Tenant shall not do, permit
or suffer to be done any act, matter, thing or failure to act in respect of the
premises, or use or occupy the premises or conduct or operate Tenant's business
in any manner objectionable to insurance companies whereby the fire insurance or
any other insurance now in force or hereafter to be placed on the premises or
any part thereof shall become void or suspended, or whereby any premiums in
respect of insurance maintained by Landlord shall be higher than those which
would normally have been in effect for the occupancy contemplated under the
specified permitted use. In case of a breach of this covenant, in addition to
all other rights and

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<PAGE>

remedies of Landlord hereunder, Tenant shall (a) indemnify and hold harmless
Landlord from and against any loss which would have been covered by insurance
which shall become void or suspended because of such breach by Tenant and (b)
pay to Landlord any and all increases of premiums on any insurance, including,
without limitation, rent insurance, resulting from any such breach.

Section 4. Indemnification and Release. Tenant shall
defend and indemnify Landlord and hold Landlord harmless from and
against any and all injuries, losses, claims, actions, damages,
liabilities and expenses (including attorney's fees and expenses)
to persons or arising from, related to or in connection with the
use or occupancy of the premises or the conduct or operation of
business therein or any default in the performance of any
obligation of Tenant under this Lease. Landlord shall not be
liable or responsible for, and Tenant hereby releases Landlord
from, all liability or responsibility to Tenant or any person
claiming by, through or under Tenant, by way of subrogation or
otherwise, for any injury, loss or damage, and Tenant shall require
its insurer(s) to include in all of Tenant's insurance policies
which could give rise to right of subrogation against Landlord a
clause or endorsement whereby the insurer(s) shall waive any rights
of subrogation against Landlord where it is agreeable by Tenant's
insurance carrier.

ARTICLE VIII

SUBORDINATION AND ATTORNMENT

Section 1. Subordination. This Lease shall be subject and
subordinate to all mortgages which may now or hereafter affect the real
property, and to all advances made or hereafter made under all such mortgages;
to all ground and underlying leases now and hereafter in effect, and also to all
renewals, modifications, and consolidations and replacements of said mortgages
and underlying leases now and hereafter in effect; and also to all renewals,
modifications, consolidations and replacements of said mortgages and underlying
leases. Although no instrument or act on the part of Tenant shall be necessary
to effectuate such subordination, Tenant, nonetheless, shall execute and deliver
such further instruments, confirming such subordination of this Lease as may be
desired by the holders of said mortgages or by any of the lessors under such
underlying leases. Tenant hereby appoints Landlord attorney-in-fact,
irrevocably, to execute and deliver any such instrument for Tenant. If any
ground or underlying lease under which Landlord then shall be the tenant shall
terminate or be terminated for any reason, or if the holder of any mortgage or a
purchaser at foreclosure sale shall succeed to the rights of Landlord hereunder,
Tenant agrees at the election and upon demand of any owner of the real property,
or of the holder of any mortgage secured by the real property, or of any
mortgagee in possession or purchaser at foreclosure of the real property, or the
building, or of any tenant under any other ground or underlying lease covering
real property, to attorn, from time to time, to any such owner, holder,
purchaser, or tenant, upon the then executory

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terms and conditions of this Lease, for the remainder of the term originally
demised in this Lease, and upon such attornment this Lease shall continue in
full force and effect as, or as if it were, a direct lease between any such
owner, holder, purchaser, tenant or lessor. The foregoing provisions of this
paragraph shall enure to the benefit of any such owner, holder, purchaser, or
tenant, upon the then executory terms and conditions of this Lease, for the
remainder of the term originally demised in this Lease, and upon such
attornment this Lease shall continue in full force and effect as, or as if it
were, a direct lease between any such owner, holder, purchaser, tenant or
lessor. The foregoing provisions of this paragraph shall enure to the benefit
of any such owner, holder, purchaser, or tenant; shall apply notwithstanding
that, as a matter of law, this Lease may terminate upon the termination of any
such ground or underlying lease, or the foreclosure of any such mortgage. The
subordination of this Lease and the provisions of the paragraph shall be
self-operative upon any such demand, and no further instrument shall be
required to give effect to said provisions. Tenant, however, upon demand of
such owner, holder, purchaser, or tenant, agrees to execute, from time to time,
instruments in confirmation of the foregoing provisions of this paragraph,
satisfactory to any such owner, holder, purchaser, or lessee, acknowledging
such attornment and setting forth the terms and conditions of its tenancy.
Nothing contained in this paragraph shall be construed to impair any right
otherwise exercisable by any such owner, holder, purchaser or tenant.

Section 2. Governmental Regulations. Tenant shall faithfully

observe in the use of the premises all municipal and county ordinances and codes
and state and federal statutes and regulations now in force or which may
hereafter be in force, together with any order or direction of any public
officer or official made pursuant to law.

ARTICLE IX

DAMAGE BY FIRE OR OTHER CAUSE

Section 1. Reconstruction. Subject to provisions of Sections 2
and 3 of this Article IX, in case of damage to the premises, by fire or other
casualty against which Landlord is insured, Tenant shall give immediate notice
to Landlord, who shall, to the extent originally provided and only if the
proceeds from the insurance are sufficient, cause the damage to be repaired,
with reasonable speed at the expense of Landlord from insurance proceeds,
subject to delays which may arise by reason of adjustment of loss under
insurance policies and for delays beyond the reasonable control of Landlord.
Rent under this Lease during the period of restoration shall be reduced
proportionately based upon the percentage of square footage remaining occupied
by Tenant.

Section 2. Damage to Premises. If the premises are
damaged or destroyed by any cause whatsoever, and if, in the reasonable opinion
of Landlord, the premises cannot be rebuilt or made fit for the purposes of
Tenant within one hundred eighty (180)

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days of the damage or destruction, Landlord may, at its option, terminate this
Lease by giving Tenant, within sixty (60) days after such damage or
destruction, notice of termination and thereupon rent and any other payments
for which Tenant is liable under this Lease shall be apportioned and paid to
the date of such damage, and Tenant shall immediately deliver up possession of
the premises to Landlord, provided, however, that those provisions of this
Lease which are designated to cover matters of termination and the period
thereafter shall survivor the termination hereof.

Section 3. Damage in Last Year. No damages, compensation or
claim shall be payable by Landlord for inconvenience, loss of business or
annoyance arising from any repair or restoration of any portion of the premises.
Landlord shall use its best efforts to effect such repairs promptly and in such
manner as not unreasonably to interfere with Tenant's occupancy.

Section 4. Compensation. No damages, compensation or claim
shall be payable by Landlord for inconvenience, loss of business or annoyance
arising from any repair or restoration of any portion of the premises. Landlord
shall use its best efforts to effect such repairs promptly and in such manner as
not unreasonably to interfere with Tenant's occupancy.

ARTICLE X

EMINENT DOMAIN

Section 1. Total Condemnation. If the whole of the leased
premises shall be acquired or condemned by eminent domain for any public or
quasi-public use or purpose, then the term shall cease and terminate as of the
date of title vesting in the condemning governmental body or other authority
pursuant to such proceeding and all rent and other charges shall be paid up to
that date and Tenant shall have no claim against Landlord for the value of any
unexpired term of this Lease.

Section 2. Partial Condemnation. If a part of the leased
premises shall be acquired or condemned by eminent domain for any public or
quasi-public use or purpose, and such partial taking or condemnation shall
render the leased premises unsuitable for the permitted use, then the term of
this Lease shall cease and terminate as of the date of title vesting in the
condemning governmental body or other authority pursuant to such proceeding and
Tenant shall have no claim against Landlord for the value of any unexpired term
of this Lease. In the event of a partial taking or condemnation which is not
extensive enough to render the leased premises unsuitable for the permitted use,
then Landlord at Landlord's expense shall promptly restore the leased premises
to a condition comparable to its condition at the time of such condemnation less
the portion lost in the taking, and this Lease shall continue in full force and
effect except that the fixed minimum annual rent shall be reduced in proportion
to the portion of the leased premises lost in the taking.

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Section 3. Landlord's Damages. In the event of any
condemnation or taking as hereinbefore provided, whether whole or partial,
Tenant shall not be entitled to any part of the award, as damages or otherwise,
for such condemnation and Landlord is to receive the full amount of such award,
Tenant hereby expressly waives any right or claim to any part thereof.

Section 4. Tenant's Damages. Although all damages in the event
of any condemnation are to belong to Landlord whether such damages are awarded
as compensation for diminution in value of the leasehold or the fee of the
leased premises, Tenant shall have the right to claim and recover from the
condemning authority, but not from Landlord, such compensation as may be
separately awarded or recoverable by Tenant in Tenant's own right on account of
any damage to Tenant's business by reason of the condemnation and for or on
account of any cost or loss to which Tenant might be put in removing Tenant's
merchandise, furniture, fixtures, leasehold improvements and equipment.

Section 5. Sale Under Threat of Condemnation. A sale by
Landlord to any authority having the power of eminent domain, either under
threat of condemnation or while condemnation proceedings are pending, shall be
deemed a taking under the power of eminent domain for all purposes under this
Article.

ARTICLE XI

DEFAULTS AND REMEDIES

Section 1. Default. The occurrence of any one or
more of the following events shall constitute a material default
and breach of this Lease by Tenant:

(a) The vacation or abandonment of the premises
by Tenant.

(b) The failure by Tenant to make any payment of
rent or any other payment required to be made by Tenant hereunder, as and when
due, where such failure shall continue for a period of three (3) days after
written notice thereof from Landlord to Tenant.

(c) The failure of Tenant to observe or perform
any of the covenants with respect to an assignment, sublease or transfer of the
Lease or the tenancy hereof, as required herein.

(d) The failure of Tenant to observe or perform
any other covenant, condition or provision of this Lease to be observed or
performed by Tenant, other than described in paragraphs (a), (b), and (c)
above, where such failure shall continue for a period of thirty (30) days after
written notice thereof from Landlord to Tenant. If the nature of the Tenant's
obligation is such that more than thirty (30) days are required for
performance, then Tenant shall not be in default if Tenant commences
performance within such

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thirty (30) day period and thereafter diligently prosecutes the same to
completion.

(e) The making by Tenant of any general
assignment for the benefit of creditors; the filing by or against Tenant of a
petition to have Tenant adjudged bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy; the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets located
at the premises or of Tenant's interest in this Lease, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located on the premises or of Tenant's interest in this Lease.

Section 2. Remedies. In the event of any such default or
breach by Tenant, Landlord may at any time thereafter, with or without notice or
demand, and without limiting Landlord in the exercise of any other right or
remedy which Landlord may have, exercise any one of the following remedies:

(a) Landlord may immediately re-enter and remove
all persons and from the premises, storing said in a public warehouse or
elsewhere at Tenant's expense, without liability on the part of Landlord. Should

Landlord elect to re-enter as herein provided, or should Landlord take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, then the termination by Landlord of Tenant's right to possession shall,
at Landlord's election, cause this Lease to terminate, but the Tenant shall
remain liable to the Landlord as hereinafter provided.

(b) In the case of any such default, re-entry,
expiration or dispossession by summary proceeding, at Landlord's election, the
rent shall become due thereupon and be paid up to the time of such re-entry,
expiration or dispossession and the Landlord may relet the premises or any part
or parts thereof either in the name of the Landlord or otherwise, for a term or
terms which may, at the Landlord's option, be less than, or exceed, the period
which would have otherwise constituted the balance of the term of this Lease;
and the Tenant shall also pay the Landlord as minimum damages any deficiency
between the rent hereby reserved and the new amount, if any, of the rents
collected on account of the lease or leases of the premises for each month of
the period which would have otherwise constituted the balance of the term of
this Lease.

(c) Landlord may declare the entire amounts of
the minimum rent and additional rent which would become due and payable during
the remainder of the term of this Lease to be due and payable immediately, in
which event Tenant shall be obliged to pay the same to Landlord at once. The
acceptance by Landlord of any payment of rent shall not constitute a waiver of
any default then existing or thereafter occurring.

(d) In computing such minimum damages, there
should be added to the said deficiencies such expenses as Landlord may incur in
connection with reletting, such as brokerage and preparation for reletting. The
Landlord, at the Landlord's option,

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may make such alterations, repairs, replacements and decorations of the
premises as the Landlord, in the Landlord's sole judgment, considers advisable
and necessary for the purpose of reletting the premises, and the making of such
alterations, repairs or replacements or decoration shall not operate or be
construed to release the Tenant from liability hereunder. Landlord shall in no
event be liable in any way for failure to relet the premises or, in the event
the premises are relet, for failure to collect the rent thereof under such
reletting, and in no event shall Tenant be entitled to receive the excess, if
any, of such net rents collected over the sums payable by Tenant to Landlord
hereunder.

Section 3. Landlord's Cure. If Tenant shall default in the
performance of any of Tenant's obligations under this Lease, Landlord, without
thereby waiving such default, may (but shall not be obligated to) perform the
same for the account and at the expense of Tenant (without notice in a case of
emergency), and in any other case, only if such default continues after the

expiration of the later of: (a) five (5) days from the date Landlord gives
Tenant written notice of intention to do so, or (b) the applicable grace period
provided, if any, elsewhere in this Lease for cure of such default.

Bills for any expense incurred by Landlord in connection with
any such performance by it for the account of Tenant, and bills for all costs,
expenses and disbursement of every kind and nature whatsoever, including,
without limitation, reasonable counsel fees and reasonable fees in appellate
review involved in collection or endeavoring to collect the rent or any part
thereof, liquidated damages, or enforcing or endeavoring to enforce any right
against Tenant, under or in connection with this Lease, or pursuant to law,
including any such cost, expense and disbursement involved in instituting and
prosecuting summary proceedings, as well as bills for any material, labor or
service provided, furnished, or rendered, by Landlord or at its instance to
Tenant, may be sent by Landlord to Tenant monthly, or immediately, at Landlord's
option. The amount of said bills, together with interest thereon at the lower of
(i) eighteen percent (18%) per annum, or (ii) the highest rate permitted by law,
shall constitute additional rent due to Landlord hereunder and shall be payable
on demand by Tenant.

Landlord reserves the right, without liability to Tenant, and
without any basis for claim of constructive eviction, to suspend furnishings or
rendering to Tenant any material, labor, utility or other service whenever
Landlord is obligated to render or furnish the same, in the event that Tenant is
in arrears in the payments due Landlord under this Lease.

Section 4. Redemption Waiver. Tenant hereby waives all
right of redemption to which Tenant or any person claiming under Tenant might
be entitled by law now or hereafter in force.

Section 5. Injunction and Landlord's Non-waiver. In case of
any breach or threatened breach by Tenant of any provisions

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of this Lease, Landlord shall be entitled to an injunction of the violation or
attempted or threatened violation of any of the covenants, conditions or
provisions of this Lease or specific performance of any such covenants,
conditions or provisions. Tenant hereby stipulates that such harm or threatened
harm constitutes irreparable injury to the Landlord.

No provision of this Lease shall be deemed to have been waived
by Landlord unless such waiver be in writing signed by Landlord. The rights
granted to Landlord in this Lease shall be cumulative of every other right or
remedy which Landlord may otherwise have at law or in equity, and the exercise
of one or more rights or remedies shall not prejudice or impair the concurrent
or subsequent exercise of other rights or remedies. No act or thing done by
Landlord or its agents during the term hereof shall be deemed an acceptance of
an attempted surrender of the premises, and no agreement to accept a surrender

of the premises shall be valid unless made in writing and signed by Landlord. No
re-entry or taking possession of the premises by Landlord shall be construed as
an election on its part to terminate this Lease, unless a written notice of such
intention be given to Tenant. Notwithstanding any such reletting or re-entry or
taking possession, Landlord may at any time thereafter elect to terminate this
Lease for a previous default. Landlord's acceptance of rent following an event
of default hereunder shall not be construed as Landlord's waiver of such event
of default. No waiver by Landlord of any violation or breach of any of the
terms, provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants herein contained. Forbearance by Landlord to enforce
one or more the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of any other violation or default.

Section 6. Landlord's Default. Landlord shall not be deemed in
default unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord, specifying wherein
Landlord has failed to perform such obligation and provided that Tenant is not
itself in default as aforesaid. If the nature of Landlord's obligation is such
that more than thirty (30) days are required for performance, the Landlord shall
not be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.

ARTICLE XII

NOTICES

Each provision of this Lease and other requirements with
reference to the sending, mailing or delivery of any notice or with reference to
the making of any payment by Tenant to Landlord, shall be deemed to be complied
with when and if the following steps are taken:

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(a) All rent and other payments required to be
made by Tenant to Landlord hereunder shall be payable to Landlord at the
address set forth herein or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith.

(b) Any notice or document required to be
delivered hereunder shall be deemed to be delivered, whether actually received
or not, forty-eight (48) hours after deposited in the United States mail,
postage prepaid, registered or certified mail. return receipt requested,
addressed to the parties hereto at the respective addresses set forth herein or
at such other address as they have theretofore specified by written notice, or
if to Tenant, at the premises. Any notice to Tenant may be sent by hand
delivery to, or posting upon, the premises.

The address of Landlord is: 6794 Isle Way, Stuart,
Florida 34996.

ARTICLE XIII

MISCELLANEOUS

Section 1. Holdover. In the event Tenant remains in possession
of the premises after the expiration of the term, Tenant shall be deemed to be
occupying the premises as a tenant from month to month at the sufferance of
Landlord subject to all of the provisions of this Lease, except that the rent
shall be double the existing rent. This provision shall not waive Landlord's
right to seek an eviction of Tenant for failure to surrender the premises in a
timely fashion.

Section 2. Ownership of Improvements. All installations,
alterations, additions, betterments and improvements upon the premises, made by
any party, including without limitation, window blinds, carpeting, all pipes,
ducts, conduits, wiring, paneling, partitions, railings, galleries, gasoline
tanks, pumps, signs, canopies, and the like shall become the of Landlord when
installed and shall remain upon and be surrendered with the premises as a part
thereof at the expiration or sooner termination of the term. Notwithstanding
anything herein to the contrary, furniture and trade fixtures are to remain the
property of Tenant and may be removed at Tenant's discretion, provided Tenant
repairs all injury done by or in connection with the installation or removal of
same, and surrenders the premises in as good condition as they were at the
beginning of the term, reasonable wear and tear excepted.

Section 3. End of Term. At the expiration or sooner
termination of the term, Tenant shall quit and surrender to Landlord the
premises, clean and in good order and condition, ordinary wear and tear
excepted. At such expiration or sooner termination, Tenant shall remove all of
Tenant, and Tenant shall repair all damage to the premises caused by removal
and restore the

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premises to the condition in which it was prior to the installation of the
items removed.

Section 4. Waivers. Tenant, for itself, and any and all
persons claimed by, through or under Tenant, including creditors of all kinds,
does hereby waive and surrender all right and privilege which they or any of
them might have under or by reason of any present or future law, to redeem the
premises or to have a continuance of this Lease for the term hereby demised
after being dispossessed or ejected therefrom by process of law or under the
terms of this Lease or after the termination of this Lease as herein provided.

In the event that Tenant is in arrears in payment of minimum
rent or additional rent hereunder, Tenant waives Tenant's right, if any, to
designate the items against which any payments made by Tenant are to be
credited, and Tenant agrees that Landlord may apply any payments made by Tenant
to any items Landlord sees fit, irrespective of and notwithstanding any
designation or request by Tenant as to the items against which any such payments

shall be credited.

Section 5. No Other Waivers or Modifications. The failure
of Landlord to insist in any one or more instances upon the strict performance
of any one or more of the obligations of the Lease, or to exercise any election
herein contained, shall not be construed as a waiver or relinquishment for the
future of the performance of such one or more obligations of this Lease or of
the right to exercise such election, but the same shall continue and remain in
full force and effect with respect to any subsequent breach, act or omission.
The rights and remedies created by this Lease are cumulative and the use of one
remedy shall not be taken to include or waive the right to use another. No
agreement hereafter made between landlord and Tenant shall be effective to
change, modify, waive, release, discharge, terminate or effect an abandonment
of this Lease, in whole or in part, unless such agreement is in writing, refers
expressly to this Lease and is signed by the party against whom enforcement of
this change, modification, waiver, release, discharge, termination or
abandonment is sought.

The following specific provisions of this Section shall not be
deemed to limit the generality of any of the foregoing provisions of this
Article:

(a) No agreement to accept a surrender of all or
any part of the premises shall be valid unless in writing and
signed by the Landlord.

(b) The receipt by Landlord of rent with or
without knowledge of the breach of any obligation of this Lease shall not be
deemed a waiver of such breach.

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due hereunder shall be deemed to be other than a payment on account, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment be deemed an accord and satisfaction, and Landlord may accept such
check or payment without prejudice to Landlord's right to recover the balance
or pursue any other remedy in this Lease or at law provided.

(d) The receipt and retention by Landlord of
rent from any party other than Tenant shall not be deemed a waiver by Landlord
of any provision of this Lease or the acceptance of such party as a lessee or
the release of Tenant from the further performance by Tenant of the provisions
of this Lease.

Section 6. Estoppel Certificates. Tenant shall, at any time
and from time to time, within ten (10) business days following notice by

Landlord execute, acknowledge and deliver to Landlord a statement in writing
certifying that this Lease is unmodified and in full force and effect, or if
there shall have been any modifications that the same is in full force and
effect as modified and stating the modifications, and the date to which the rent
has been paid in advance, and stating whether or not the Landlord is in default
hereunder, and, if so, specifying each such default.

Section 7. Unavoidable Delays. The time of Landlord to perform
any of its obligations hereunder shall be extended if and to the extent that the
performance thereof shall be prevented due to any strikes, lockouts, civil
commotions, war-like operations, invasions, rebellions, hostilities, military or
usurped power, governmental regulations or controls, inability to obtain labor
or materials despite due diligence, acts of God, or other causes beyond the
control of the Landlord.

Section 8. Waiver of Landlord's Liability. Notwithstanding any
provision to the contrary, Tenant shall look solely to the equity of Landlord in
and to the portion of premises then owned by Landlord or, if this Lease becomes
subordinate to any ground or underlying lease, the leasehold interest of
Landlord as lessee under such ground or underlying lease, in the event of a
breach or default by Landlord pursuant to the provisions of the Lease; and
Tenant agrees that Landlord shall have no personal liability whatsoever under
this Lease and that the liability of Landlord under this Lease shall not exceed
the value of such equity of Landlord in said premises or said leasehold
interest, as the case may be. No other properties or assets of Landlord shall be
subject to levy, execution or other enforcement procedures for the satisfaction
of any judgment (or other judicial process) arising out of, or in connection
with, this Lease. If Tenant shall acquire a lien on any such other properties or
assets by judgment or otherwise, Tenant shall promptly release such lien on such
other properties and assets by execution, acknowledging and delivering to
Landlord an instrument to that effect prepared by Landlord's attorney.

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Section 9. Guarantor. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. If there
be a guarantor of Tenant's obligations hereunder, the obligations hereunder
imposed upon Tenant shall be joint and several obligations of Tenant and such
guarantor, and Landlord need not first proceed against Tenant hereunder before
proceeding against such guarantor, nor shall any such guarantor be released from
its guarantee for any reason whatsoever, including (without limitation) any
amendment of this Lease, any forbearance by Landlord or waiver of any of
Landlord's rights, the failure to give Tenant or such guarantor any notices, or
the release of any party liable for the payment of Tenant's obligations
hereunder.

Section 10. Successor and Assigns. The provisions of this
Lease, except as herein otherwise specifically provided, shall extend to, bind

and inure to the benefit of the parties hereto and their respective personal
representatives, heirs, successors and permitted assigns. Landlord shall have
the right to transfer, assign and convey, in whole or in part, the premises and
any and all of its rights under this Lease, and in the event Landlord assigns
its rights under this Lease, Landlord shall thereby be released from any further
obligations hereunder, and Tenant agrees to look solely to such successor in
interest of the Landlord for performance of such obligations.

Section 11. Lender's Modifications. Tenant agrees that
within ten (10) days receipt of a request, Tenant shall execute and deliver to
Landlord such instruments providing for reasonable modification of this Lease
as may be requested by any holder of a mortgage, now or hereafter existing,
which encumbers the real estate; provided, however, that said modifications
shall not change the amount of rent or security deposit, the area of the
premises, or the duration of the term.

Section 12. Interpretation. Irrespective of the place of
execution or performance, this Lease shall be governed by and construed in
accordance with the laws of the State of Florida. If any provision of this Lease
or the application thereof to any person or circumstance shall, for any reason
and to any extent, be invalid or unenforceable, the remainder of this Lease and
the application of that provision to other persons or circumstances shall not be
affected but rather shall be enforced to the extent permitted by law. The table
of contents, captions, headings and titles in this Lease are solely for
convenience of reference and shall not affect its interpretation. This Lease
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this Lease to be drafted. Each covenant,
agreement, obligation or other provision of this Lease shall be deemed and
construed as a separate and independent covenant of the party bound by,
undertaking or making same, not dependent on any other provision of this Lease
unless otherwise expressly provided. All terms and words used in this Lease,
regardless of the number of gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.

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Section 13. Complete Agreement. There are no representations,
agreements, arrangements or understanding, oral or written between the parties
relating to the subject matter of this Lease which are not fully expressed in
this Lease. This Lease cannot be changed or terminated orally or in any manner
other than by a written agreement executed by both parties.

Section 14. Recording. Tenant shall not record this Lease
among the Public Records of the County in Florida in which the premises is
located.

Section 15. Counterparts. This Lease may be executed in any
number of counterparts, each of which shall be an original, but all of which

shall together constitute one Lease.

Section 16. Landlord's Right to Show Premises. Landlord may
show the premises to prospective purchasers and mortgagees and, during the six
(6) months prior to termination of this Lease, to prospective lessees during
business hours upon reasonable notice to Tenant.

Section 17. Litigation. In the event of any litigation arising
hereunder, jurisdiction and venue shall be in Martin County, Florida, and
Landlord, upon being the prevailing party, shall be entitled to recover
reasonable attorneys' fees and costs, including those fees and costs in
appellate proceedings. Tenant shall pay to Landlord, upon demand, whether or not
litigation be instituted, all attorneys' fees and costs of Landlord incurred in
enforcing any of Tenant's obligations under this Lease.

Section 18. Waivers of Subrogation. Notwithstanding the
provisions hereof in the event of loss or damage to the premises and/or any
contents, each party shall look first to any insurance in its favor before
asking any claim against the other party; and to the extent possible without
additional cost, each party shall obtain for each policy of such insurance,
provisions permitting waiver of any claim against the other party for loss or
damage within the scope of the insurance, and each party, to such extent
permitted, for itself and its insurers waives all such insured claims against
the other party.

Section 19. Tenant - Corporation or Partnership. In case
Tenant is a corporation, Tenant represents and warrants that this Lease has
been duly authorized, executed and delivered by and on behalf of the Tenant and
constitutes the valid and binding agreement of the Tenant in accordance with
the terms hereof. In case Tenant is a partnership, Tenant represents and
warrants that all of the persons who are general or managing partners in said
partnership have executed and delivered pursuant to and in conformity with a
valid and effective authorization therefor by all of the general or managing
partners of such partnership, and is and constitutes the valid and binding
agreement of the partnership and each and every partner therein in accordance
with its terms. Also, it is agreed that each and every present and future
partner in Tenant shall be and remain at all times jointly and severally

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liable hereunder and that the death, resignation or withdrawal of any partner
shall not release the liability of such partner under the terms of this Lease
unless and until the Landlord shall have consented in writing to such release.

Section 20. Licenses. If any governmental or professional
license or permit shall be required or the proper and lawful conduct of Tenant's
business, Tenant, prior to occupying the premises, shall procure and maintain
such license or permit, and submit the same for inspection by Landlord. Tenant
shall at all times comply with the terms and conditions of such license or

permit.

Section 21. No Brokers. Tenant acknowledges that it has not
dealt with any broker or other individual or entity which could make a claim for
any commission or finder's fee arising out of this Lease; and Tenant indemnifies
and holds harmless Landlord from and against any claim, demand, liability or
judgment relating to such a commission or finder's fee.

Section 22. Number and Gender. Whenever the singular number is
used in this Lease and when required by the context, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders,
and the word "person" shall include corporation, firm or association. If there
is more than one lessee, the obligations imposed under this Lease upon Tenant
shall be joint and several.

Section 23. Time of Essence. Time is of the essence of each
term and provision of this Lease.

Section 24. Utilities. From the beginning date of the term of
this Lease and thereafter throughout such term, Tenant shall pay before
delinquency for all water, gas, electricity, power, sewage, telephone,
janitorial and all other services supplied to or consumed in or upon the
premises, including, without limitation, utility service charges, hook-up fees
and any such related fees and charges.

Section 25. Financing. In the event any present or future
mortgage lender of the real property and the building located thereon, requires
any financial documents from the Tenant who established the Tenant's liability
under the Lease, the Tenant agrees to supply such financial documents
immediately upon request of the Landlord.

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<PAGE>

IN WITNESS WHEREOF, Landlord and Tenant have hereunto executed
this Lease as of the day and year first above written.

WITNESSES: LANDLORD

BY: /s/ Edward M. Sellian
- --------------------------- -----------------------
EDWARD M. SELLIAN

- ---------------------------
As to Landlord
TENANT:

NUCO(2), INC.

/s/ Jean Houghton
- ---------------------------
BY: /s/ Joseph Criscuolo
-----------------------

- ---------------------------
As to Tenant

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<PAGE>

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT made the 18th day of April, 1996 by and
between NUCO(2) INC., a Florida corporation having its principal place of
business at 2820 S.E. Market Place, Stuart, Florida 34997 ("Purchaser") and THE
COCA-COLA BOTTLING COMPANY OF NEW YORK, INC., a Delaware corporation having a
place of business at 35 Winthrop Avenue, New Rochelle, New York 10805
("Seller").

WHEREAS, Seller is engaged in the business of, among other things,
leasing and renting bulk CO(2) cylinders and distributing and selling carbonic
gas in the States of New York, New Jersey and Connecticut (the "Business");

WHEREAS, Purchaser is engaged in the business of leasing and renting
bulk CO(2) cylinders and distributing and selling carbonic gas; and

WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
certain assets of Seller described in this Agreement relating to the Business on
the terms and conditions stated herein;

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of
the parties, Seller and Purchaser agree as follows:

IT IS THEREFORE AGREED:

1. Sale of Assets. Subject to the terms and conditions of this
Agreement, on May 3, 1996, or such other date as the parties shall agree
(hereinafter referred to as the "Closing Date"), Seller shall sell, transfer and
assign to Purchaser the following assets and properties of Seller described
below used by Seller in the Business (the "Assets"):

(i) the bulk CO(2) cylinders owned by Seller and
leased or rented to customers of the
Business listed on Exhibit A hereto, which
Exhibit A shall include the serial numbers
of such bulk CO(2) cylinders (collectively,
the "Trade Cylinders");

(ii) the contracts or accounts with customers of
Seller listed on Exhibit B hereto
(collectively, the "Trade Cylinder
Contracts");

(iii) the contracts or accounts with customers who
own their own bulk CO(2) cylinders and to
whom Seller distributes and sells carbonic
gas listed on Exhibit C hereto (the "Gas
Only Customer Lists");

<PAGE>

(iv) the bulk CO(2) cylinders owned by the Seller
and held in Seller's inventory listed on
Exhibit D hereto (collectively, the
"Inventory Cylinders");

(v) all of Seller's service records for the
period from October 1, 1995 until the
Closing Date with respect to the Trade
Cylinders, the Inventory Cylinders and bulk
CO(2) cylinders owned by customers of the
Business to which Seller distributes and
sells carbonic gas (collectively, the
"Service Records");

(vi) the five vehicles with delivery units and
hoses, fittings, gauges, regulators, etc.
listed on Exhibit E hereto (collectively,
the "Vehicles"); and

(vii) all route lists, customer CO(2) usage
records, bulk CO(2) systems rental
registers, customer lists, customer
payment histories from October 1, 1995
until the Closing Date, relating to the
Business.

2. Purchase Price. Subject to adjustment as set forth in Section 3
below, the purchase price for the Assets shall be Three Million Seven Thousand
Nine Hundred Dollars ($3,007,900) (the "Purchase Price"). The Purchase Price
shall be allocated among the Assets in accordance with Exhibit F hereto.

3. Payment of Purchase Price. (a) Purchaser shall pay the Purchase
Price to Seller on the Closing Date in immediately available funds by wire
transfer, or by certified or bank check, as adjusted by the Defective Cylinder
Adjustment (as defined in Section 4 below) and the Bulk Cylinder Adjustment (as
defined in Section 5 below).

(b) On the Closing Date, Seller and Purchaser shall make such
customary proration adjustments as are reasonably required relating to the
Assets, including, but not limited to, adjustments for prepaid rent under any
lease contract transferred to Purchaser pursuant to the terms hereof, and for
customer deposits as provided in Section 6 through May 1, 1996 (the "Adjustment
Date"). All adjustments shall be made as if Purchaser acquired the Assets as of
12:01 a.m. on the Adjustment Date. If subsequent to the Closing Date, Seller
receives any payments under any Trade Cylinder Contract or Gas Only Customer
Lists which relate to any period on or after the Adjustment Date, then such

portion of the payment which relates to the period from and after the Adjustment
Date shall be immediately turned over to Purchaser. If subsequent to the Closing
Date, Purchaser receives any payments under any Trade Cylinder Contract or Gas
Only Customer Lists which relates to any period prior to the Adjustment Date,
then such portion of the payment which relates to the period prior to the
Adjustment Date shall be immediately turned over to Seller.

4. Defective Cylinders. On the Closing Date, the Purchase Price shall
be reduced by an amount in dollars equal to 475 times the number of Trade
Cylinders and Inventory Cylinders purchased by Purchaser from Seller that are
reasonably determined by Purchaser to

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<PAGE>

have faulty vacuum seals, provided that prior to the Closing Date Purchaser has
delivered to Seller a report or reports listing which of such Trade Cylinders
and Inventory Cylinders have faulty vacuum seals (the "Defective Cylinder
Adjustment"). Purchaser shall, upon commencement of its due diligence
investigation provided for in Section 13(d) hereof and no later than two
business days prior to the Closing Date, notify Seller every other day of the
Trade Cylinders and Inventory Cylinders that it has determined to have faulty
vacuum seals and Seller shall have until the Closing Date to either repair any
such faulty vacuum seals or submit to Purchaser an independent assessment that
such vacuum seal is not faulty, otherwise the Purchase Price shall be reduced by
each such Defective Cylinder Adjustment.

5. Cylinder Adjustment. On the Closing Date, the Purchase Price shall
be reduced or increased, as the case may be, by (i) an amount equal to $2,500
times that number which represents the deficiency or surplus, respectively,
between 1,039 Trade Cylinders and the actual number of bulk CO(2) cylinders
listed on Exhibit A determined by Purchaser to have been owned by Seller and
leased pursuant to a current Trade Cylinder Contract (i.e., current shall mean
the contract expires after the Closing Date) with a customer of Seller on the
Closing Date as to which the customer is current in the payment of all lease
obligations (i.e., the last payment has been made no less than 45 days prior to
the Closing Date) and does not dispute the existence of the contract (and in the
case of Trade Cylinder Contracts, that the bulk CO(2) cylinder is owned by
Seller and the customer does not have a right to purchase such bulk CO(2)
cylinder), as determined on or before the Closing Date, (ii) an amount equal to
$1,500 times that number which represents the deficiency or surplus,
respectively, between 72 Inventory Cylinders and the actual number of bulk CO(2)
cylinders listed on Exhibit D (as supplemented through the Closing Date) owned
by Seller and held in Seller's inventory on the Closing Date and (iii) an amount
equal to $400 times that number which represents the deficiency or surplus,
respectively, between 380 accounts (i.e., a customer shall be considered one
account even if there is more than one CO(2) cylinder at a customer location)
listed on Exhibit C (as supplemented through the Closing Date) and the actual

number of accounts listed on Exhibit C determined by Purchaser to have been
supplied by Seller with bulk CO(2) pursuant to a current Gas Only Customer Lists
with a customer of Seller on the Closing Date as to which the customer is
current in the payment of all service obligations and does not dispute the
existence of the contract (collectively, the "Bulk Cylinder Adjustment"). Seller
and Purchaser shall mutually agree to the cylinder adjustments no later than the
Adjustment Date. For example, if on the Closing Date (a) the number of bulk
CO(2) cylinders listed on Exhibit A on the Closing Date determined by Purchaser
to have been owned by Seller and leased pursuant to a current Trade Cylinder
Contract with a customer of Seller on the Closing Date as to which the customer
is current in the payment of all lease obligations and does not dispute the
existence of the contract totals 1029, (b) the number of bulk CO(2) cylinders
owned by Seller and held in Seller's inventory on the Closing Date totals 72 and
(c) the number of accounts listed on Exhibit C on the Closing Date determined by
Purchaser to have been supplied by Seller with bulk CO(2) pursuant to a current
Gas Only Customer Lists with a customer of Seller on the Closing Date as to
which the customer is current in the payment of all service obligations and does
not dispute the existence of the contract totals 379, the Purchase Price would
be decreased by $25,400.

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<PAGE>

6. Liabilities. Except with respect to the Trade Cylinder Contracts and
Gas Only Contracts assigned by Seller to Purchaser with respect to which
Purchaser shall assume the obligations of Seller thereunder from and after the
Closing Date, Purchaser will not assume any liabilities or obligations of
Seller, including, but not limited to, any accounts payable, administrative
claims, and executory contracts of Seller, provided, however, that in the event
that Seller holds a deposit in respect of any account of a customer, Purchaser
shall assume such liabilities based upon a payment at Closing from Seller to
Purchaser equal to the aggregate amount of all deposits. Seller represents and
warrants that the only such customer deposits are those as set forth on Exhibit
G.

7. Closing. The closing (the "Closing") of this transaction shall take
place on the Closing Date at the offices of Purchaser's counsel, Olshan Grundman
Frome & Rosenzweig LLP, 505 Park Avenue, New York, New York 10022 or at such
other location as the Seller and the Purchaser shall mutually agree.

8. Deliveries and Closing.

(a) At the Closing, Seller shall deliver to Purchaser the
following:

(i) Revised Exhibits A, B, C and D to the extent
there are any changes to any one of those
exhibits between the date of this Agreement
and the Closing Date;

(ii) A bill of sale and assignment in the form

attached hereto as Exhibit H conveying the
Trade Cylinders, the Inventory Cylinders,
the Trade Cylinder Contracts and Gas Only
Customer Lists, the Service Records and the
Vehicles;

(iii) True and complete copies of the written
Trade Cylinder Contracts and Gas Only
Customer Lists;

(iv) the Inventory Cylinders;

(v) The Service Records;

(vi) The Vehicles and the titles thereto duly
executed by Seller together with a bill of
sale for each such Vehicle in form
acceptable for transfer of such Vehicle by
the New York State Department of Motor
Vehicles;

(vii) A certificate executed by its President,
dated the Closing Date, certifying as to the
fulfillment of the conditions specified in
subsections (a) and (b) of Section 13; and

(viii) A letter to customers of Seller in the form
attached hereto as Exhibit I executed by
Seller's President.

-4-

<PAGE>

(b) At the Closing, Purchaser shall deliver to Seller the
following:

(i) An assignment and assumption of the Trade
Cylinder Contracts and Gas Only Customer
Lists in the form attached hereto as Exhibit
J;

(ii) Purchase Price, as adjusted pursuant to the
terms of this Agreement;

(iii) A certificate executed by its Chairman,
dated the Closing Date, certifying as to the
fulfillment of the conditions specified in
subsections (a) and (b) of Section 14; and

(iv) A letter to customers of Seller in the form
attached hereto as Exhibit K executed by

Purchaser's Chairman.

9. Representations and Warranties of Seller to Purchaser. As an
inducement for Purchaser to enter into and perform its obligations under this
Agreement, Seller hereby represents and warrants to Purchaser, which
representations shall be deemed made as of the date hereof and as of the Closing
Date, that:

(a) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware, has full corporate power and
authority to own, operate and lease its properties
and to carry on the Business as now being conducted,
and is duly qualified or licensed to do business and
is in good standing as a foreign corporation in every
jurisdiction in which the conduct of the Business or
the ownership or leasing of the Assets requires it to
be so qualified or licensed, except where the failure
to be so qualified or licensed, would not have a
material adverse effect on the Business. Seller is
duly qualified to do business and is in good standing
in the States of New York and Connecticut.

(b) The Seller has full corporate power and authority to
enter into and perform this Agreement and to execute
and deliver this Agreement, and when executed and
delivered by Seller, this Agreement will constitute a
valid and legally binding obligation of Seller
enforceable in accordance with its terms, except as
enforceability may be limited by the United States
Bankruptcy Code, as amended, or other laws affecting
creditor's rights and except as the application of
equitable principles may limit the right to specific
performance or other equitable remedies.

(c) (i) Seller has good and marketable title to all
of the Assets being sold hereunder free and clear of
all liens, claims, charges, options or other
encumbrances. Each of the delivery units on the
Vehicles meets the

-5-

<PAGE>

standards of the U.S. Department of Transportation

("DOT") relating to the delivery of liquid CO(2) and
is certified to meet DOT MC-331 standards. The
Vehicles are in working order. Each of the Trade
Cylinders and Inventory Cylinders was, when
purchased, accompanied by a Form U-1A Manufacturer's
Data Report for Pressure Vessels in accordance with
specifications issued by the American Society of
Mechanical Engineers respecting that pressure vessel.

(ii) Each of the Trade Cylinders and Inventory
Cylinders are manufactured by Taylor-Wharton
Cryogenics and are operative under New York City Fire
Department COA No. 4680, expiring March 31, 1999.

Except as set forth in this subsection, Seller makes
no representation or warranty whatsoever to Purchaser
with regard to the Trade Cylinders and Inventory
Cylinders and such cylinders shall be sold "AS IS,
WHERE IS" with no other warranty, including, without
limitation, any warranty of merchantability or
fitness for use.

(d) There are no claims, actions, suits, proceedings or
investigations pending or, to the best knowledge of
Seller, threatened against or affecting Seller with
respect solely to the Business or the Assets before
any federal, state, local or foreign court or other
governmental body. Seller is not subject to or in
default with respect to any judgment, order, writ,
injunction or decree or any governmental restriction,
which relates to or restricts the transfer of the
Assets to Purchaser or the operation of the Business.

(e) Seller has all requisite corporate power and
authority to enter into this Agreement, perform its
obligations hereunder and to consummate the
transactions contemplated hereby without the approval
of any third party. Prior to the Closing Date the
execution, delivery and performance of this Agreement
shall have been approved by the Board of Directors of
Seller and Seller shall have taken all necessary
corporate action to authorize the same.

(f) The execution, consummation and performance of this
Agreement by Seller and Seller's right to conduct the
Business does not violate any federal, state or local
statute, law or regulation (other than zoning
restrictions) or any contract or agreement to which
Seller is a party.

(g) Seller is not a party to any written or oral
agreements of any kind whatsoever relating to the
Assets, except as set forth in Exhibits B and C
attached hereto and made a part hereof. To the

knowledge of Seller, (a) the written Trade Cylinder
Contracts set forth in Exhibit B and the Gas Only
Customer Lists, set forth in Exhibit C are valid,
legal and binding obligations enforceable in
accordance with their terms and there are no defenses
that any party or other entity may assert against the
enforceability

-6-

<PAGE>

of such contracts or the consummation and performance
of this Agreement and (b) to the knowledge of Seller,
there is no default or event that with notice or
lapse of time, or both, would constitute a default by
any party to any of the Trade Cylinder Contracts and
Gas Only Customer Lists. True and complete copies of
the Trade Cylinder Contracts and Gas Only Customer
Lists will be delivered to Purchaser on or before the
Closing Date.

(h) Seller has not dealt with or retained any finder or
broker for whose fees or expenses Purchaser would be
responsible in connection with this Agreement or the
transactions contemplated hereby.

(i) No consent, approval or authorization of, or
declaration, filing or registration with, or the
giving of notice to, any public body or authority or
other person, firm or entity is necessary in
connection with the execution and delivery by Seller
of this Agreement or the consummation by Seller of
the transactions contemplated hereby.

10. Representations and Warranties of Purchaser. As an inducement for
Seller to enter into and perform its obligations under this Agreement, Purchaser
hereby represents and warrants to Seller, which representations shall be deemed
made as of the date hereof and as of the Closing Date, that:

(a) Purchaser has been duly incorporated in, and is now
validly existing and in good standing under the laws
of the State of Florida with full power to own, lease
and operate its property and carry on its business as
now presently conducted.

(b) The Purchaser has full corporate power and authority
to enter into and perform this Agreement and to
execute and deliver this Agreement, and, when
executed and delivered by Purchaser, this Agreement

will constitute a valid and legally binding agreement
and obligation of Purchaser enforceable in accordance
with its terms except as enforceability may be
limited by the United States Bankruptcy Code, as
amended, or other laws generally affecting creditor's
rights and except as the application of equitable
principles may limit the right to specific
performance or other equitable remedies.

(c) Other than as set forth in Section 13(e) hereof, no
consent, approval or authorization of, or
declaration, filing or registration with, or the
giving of notice to, any public body or authority or
any other person, firm or entity is necessary in
connection with the execution and delivery by
Purchaser of this Agreement, and the consummation of
the transactions contemplated herein.

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<PAGE>

(d) Purchaser has not dealt with or retained any finder
or broker for whose fees or expenses Seller would be
responsible in connection with this Agreement or the
transactions contemplated herein.

(e) The execution, delivery and performance of this
Agreement has been approved by the Board of Directors
of Purchaser and Purchaser has taken all necessary
corporate action to authorize the same.

11. Conduct of Business Pending Closing. Seller covenants that,
pending the Closing:

(a) Seller shall conduct the Business in the ordinary
course and in substantially the same manner as
heretofore conducted and in conformity in all
material respects with applicable laws, rules and
regulations.

(b) Seller will not enter into any contract or commitment
relating to the Assets or encumber or otherwise
transfer or dispose of any of the Assets, except in
the ordinary course of the Business and consistent
with past practices of the Seller.

ordinary wear and tear excepted.

(d) Seller will conduct the Business in all material
respects in accordance with the licenses, permits and
other authorizations issued to it by any governmental
agency.

(e) Seller will maintain in force the existing hazard and
liability insurance policies, or comparable coverage,
for the Assets, and will use the proceeds of any such
policies to repair or restore any damaged Assets.

(f) Where the consent of any third party is required
under the terms of any agreements to be assigned by
it hereunder, Seller will use its best efforts to
obtain such consent on terms and conditions not less
favorable than as in effect on the date hereof.

(g) Seller shall give Purchaser notice of any litigation
or proceedings against the Assets from and after the
date hereof, together with copies of all pleadings
relating thereto.

12. Access to Information. (a) From and after the date hereof, Seller
shall make available to Purchaser such information relating to the Assets as is
reasonably requested by Purchaser and Seller shall permit Purchaser to inspect
the Assets and conduct such other due diligence as Purchaser may desire.
Purchaser shall retain and preserve all records and books of Seller delivered to
Purchaser for a period of three (3) years from the date hereof and upon written

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<PAGE>

request of Seller, shall provide Seller with reasonable access to such business
records and copies of such documents when requested at Seller's expense;
provided that Purchaser may dispose, destroy or discard any such records if it
shall have given Seller at least sixty (60) days prior written notice of its
intent and Seller shall have not requested Purchaser to deliver such records to
a location designated by Seller within such period. Purchaser acknowledges that
Seller shall retain unpaid accounts receivable records relating to the Business
before the Closing Date.

(b) From and after the date hereof, including subsequent to
the Closing Date, Seller shall also provide Purchaser and its accountants with
such accounting and financial information relating to the Assets and the
Business as Purchaser shall reasonable request in order for Purchaser to prepare
and complete audits by Purchaser's independent certified public accountants and
to file such other financial information relating to the Assets and the Business
as shall be required to be filed by Purchaser with the Securities and Exchange

Commission.

13. Conditions Precedent for Purchaser. All obligations of the
Purchaser under this Agreement are, at its option, subject to the fulfillment
prior to or at the Closing of each of the following conditions and those
contained elsewhere in this Agreement. If the conditions precedent are not
fulfilled by Seller, or if Purchaser for any reason is not satisfied, no later
than two (2) business days prior to the Closing Date, with its due diligence
review under Section 13(d), Purchaser may cancel this Agreement at or prior to
Closing.

(a) Seller's, representations and warranties contained in this
Agreement shall be true and correct in all material respects at the time of
Closing as though such representations and warranties were made at such time,
subject, however, to the changes in the number, type and location of cylinders
in Exhibits A, B, C and D and the addition or deletion of Trade Cylinder
Contracts in Exhibit B and Gas Only Customer Lists in Exhibit C, as contemplated
in Section 5.

(b) Seller shall have substantially and materially 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.

(c) The Business and Assets shall not have been adversely
affected in any material way as a result of any work stoppage or slowdown,
strike, lock-out, accident or other casualty or act of God or the public enemy,
or any actual judicial, administrative or governmental proceedings.

(d) Purchaser's completion of its due diligence review, to
Purchaser's satisfaction, of Seller, the Business and the Assets no later than
two business days prior to the Closing Date. The Purchaser shall notify Seller,
in writing, of its election to terminate this Agreement pursuant to the
preceding sentence on or before two business days prior to the Closing Date. In
the event Purchaser fails to so notify Seller of its election to terminate and
cancel this Agreement, the provisions hereof are deemed waived by Purchaser and
of no further force and effect. Any such notice shall be in writing, and
addressed to the addresses shown herein, and post marked with postage pre-paid
on/or before said due date.

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<PAGE>

(e) The consent to the transactions contemplated by this
Agreement by NationsBank of Florida, N.A.

(f) Seller shall have delivered to Purchaser a certificate
executed by its President, dated the Closing Date, certifying as to the
fulfillment of the conditions specified in subsections (a) and (b) of this

Section 13.

(g) Purchaser shall have received all the financial
information required for Purchaser to prepare and file audited financial
statements for the Business and Assets certified by its independent certified
public accountants with the Securities and Exchange Commission the required
financial information relating to the Business and Assets for any period prior
to the Closing Date.

14. Conditions Precedent for Seller. All obligations of Seller under
this Agreement are subject to the fulfillment, prior to or at the Closing, of
each of the following conditions, any one or more of which may be waived by
Seller, in its sole discretion, in whole or in part:

(a) Purchaser's representations and warranties contained
in this Agreement shall be true and correct in all
material respects at the time of Closing as though
such representations and warranties were made at
Closing;

(b) Purchaser shall have substantially and materially
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;

(d) Purchaser shall have delivered to Seller a
certificate executed by its Chairman, dated the
Closing Date, certifying as to the fulfillment of the
conditions specified in subsections (a) and (b) of
this Section 14; and

(e) The execution, delivery and performance of this
Agreement shall have been approved by the Board of
Directors of Seller.

15. Seller's Indemnity of Purchaser. Seller shall defend, indemnify and
hold Purchaser harmless from and against any and all losses, liabilities,
damages, costs, claims, judgments and expenses (including attorney's fees)
(collectively "Damages") whatsoever arising out of or resulting from:

(a) Any breach of warranty or misrepresentation by Seller
contained herein, or the non-performance of any
covenant or obligation to be performed by Seller or
from any misrepresentation, omission or inaccuracy in
any schedule, exhibit, certificate, instrument or
paper delivered or to be delivered by Seller upon
execution of this Agreement or at the Closing in
connection with the transactions herein contemplated;

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<PAGE>

(b) Any liability or matter arising out of the conduct of
the Business prior to the Closing Date (other than
liabilities accruing after the Closing Date with
respect to agreements, leases or other obligations
specifically assumed by Purchaser);

(c) Any attempt (whether or not successful) by any person
to cause or require Purchaser to pay or discharge any
debt, obligation or liability relating to Seller
(other than any debt, obligation or liability
accruing after the Closing Date with respect to the
Contracts assumed by Purchaser under this Agreement);

(d) Any and all losses asserted against Purchaser
incurred in connection with the termination by Seller
of its employees or independent contractors, whether
covered by a collective bargaining agreement or not,
including labor costs, severance pay, pension
benefits, employee benefits, vacation and holiday
benefits, sick pay, multiemployer withdrawal
liability, any and all employee benefits, and any
other costs associated therewith, and

(e) Any claim which may be asserted against any of the
Assets by any third party, but only to the extent
arising on or before the Closing Date.

The foregoing indemnifications by Seller shall be limited to the purchase price
paid to Seller pursuant to this Agreement. Purchaser shall make no claim against
the Seller for indemnity under this Section 15 unless and until the aggregate
amount of such Damages exceeds $30,000 (the "Basket Amount"), in which event
Purchaser may seek to recover all Damages in excess of $30,000.

16. Purchaser's Indemnity of Seller. Purchaser shall indemnify and
hold Seller forever harmless from and against any and all Damages whatsoever
arising out of or resulting from:

(a) Any breach of warranty or misrepresentation by
Purchaser contained herein, or the non-performance of
any covenant or obligation to be performed by
Purchaser or from any misrepresentation, omission or
inaccuracy in any exhibit, certificate, instrument or
paper delivered or to be delivered by Purchaser upon
execution of this Agreement or at the Closing in
connection with the transaction herein contemplated;

(b) the non-performance or non-payment of any obligations
or liabilities incurred or assumed by the Purchaser
under this Agreement;

17. Procedure Regarding Indemnity. A party seeking indemnification
under Section 15 or Section 16 ("Indemnitee") shall give notice to the other
party or parties

-11-

<PAGE>

("Indemnitor") of facts that are the basis of the indemnification claim (a
"Claim") within the time period set forth in Section 23. The amount of the Claim
as set forth in the notice shall be based upon the Indemnitee's good faith
honest opinion of the maximum exposure to Indemnitee (including, but not limited
to, attorneys' and other professionals' fees) presented under the circumstances
of the Claim; provided, however, the amount set forth in the notice of Claim
shall not limit Indemnitee's rights to indemnification under Section 15 or
Section 16 if the ultimate loss, damage, liability, cost or expense to
Indemnitee shall exceed the amount set forth in the notice of Claim, subject to
the limit set forth in Section 15 or Section 16.

18. Non-Compete. (a) Seller covenants and agrees that for a period of
five (5) years from and after the Closing Date, Seller will not, without prior
written consent of Purchaser, directly, indirectly or in association with
others, manage, operate, join, control or participate or become interested in,
or be connected with as a partner, shareholder (other than a beneficial holder
of no more than 1% of the outstanding voting securities of a publicly held
company having at least 500 beneficial holders of voting stock), investor or
otherwise in the operation of any business involving the distribution or sale of
or leasing or rental of bulk CO(2) cylinders within the geographic areas in the
States of New York, New Jersey and Connecticut where the Seller conducts any
business as of the Closing Date provided, however, nothing herein contained
shall limit the Seller's ability to continue to engage in the high pressure
CO(2) cylinder business. Seller covenants and agrees that for a period of five
(5) years from and after the Closing Date, Seller will use its reasonable
efforts to refer to Purchaser all requests made to Seller to supply bulk CO(2)
service. By reason of the fact that irreparable harm would be sustained by
Purchaser if there is any breach by Seller of this Section 18(a), it is agreed
that in addition to any other rights which Purchaser may have under this
Agreement or at law or in equity, Purchaser shall be entitled to apply to any
court of competent jurisdiction for, and obtain, injunctive relief against
Seller in order to prevent any breach or threatened breach of the provisions of
this Section 18(a).

(b) Purchaser covenants and agrees that for a period of five
(5) years from and after the Closing Date, Purchaser will not, without prior
written consent of Seller, directly, indirectly or in association with others,
manage, operate, join control or participate or become interested in, or be
connected with as a partner, shareholder (other than a beneficial holder of no
more than 1% of the outstanding voting securities of a publicly held company
having at least 500 beneficial holders of voting stock), investor or otherwise
in the operation of any business involving the sale of soda fountain syrup
within the geographic areas in the States of New York, New Jersey and
Connecticut where the Seller conducts any business as of the Closing Date.
Purchaser covenants and agrees that for a period of five (5) years from and
after the Closing Date, Purchaser will use its reasonable efforts to refer to
Seller all requests made to Purchaser to supply soda fountain syrup. By reason
of the fact that irreparable harm would be sustained by Seller if there is any
breach by Purchaser of this Section 19(b), it is agreed that in addition to any
other rights which Seller may have under this Agreement or at law or in equity,
Seller shall be entitled to apply to any court of competent jurisdiction for,
and obtain, injunctive relief against Purchaser in order to prevent any breach
or threatened breach of the provisions of this Section 18(b).

-12-

<PAGE>

19. Sale or Transfer Taxes. Any liability for sales, transfer and/or
documentary taxes (but not income or similar type taxes) in connection with the
sale and delivery of the Assets and rights acquired by Purchaser hereunder shall
be paid by Purchaser at Closing.

20. Bulk Sales. Seller hereby agrees to defend, indemnify and forever
hold Purchaser harmless from and against any and all liability (including any
claims, suits or demands against Purchaser), loss, cost (including attorney's
fees), expense or damage of any kind which Purchaser may suffer as a result of
any provision of any applicable bulk sales law. Purchaser shall cause to be
filed on or before the Closing Date the appropriate sales (bulk sales) tax
notice required by Section 1141(c) of the Tax Law of the State of New York.

21. Entire Agreement and Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and no amendment thereof or modifications hereof, or additions hereto
shall be valid or effective unless the same shall be in writing and signed by
each of the parties hereto.

22. Binding Agreement; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and to their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,

interests of obligations hereunder may be assigned by either party without the
prior written consent of the other party.

23. Survival of Warranties and Representations. All representations,
covenants, warranties and indemnities made by the parties hereto shall survive
the Closing for the a period of one (1) year and shall be deemed material and to
have been relied upon by the parties.

24. 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.

25. Headings. The headings contained in this Agreement have been
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

26. Notices. Except during the continuance of a known interruption of
service in the method of delivery used, all notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if the same
shall be in writing and shall be delivered personally, sent via facsimile
transmission or sent by registered or certified mail, postage prepaid, and
addressed as set forth below:

-13-

<PAGE>

(a) If to Purchaser:

NuCo(2) Inc.
2820 S.E. Market Place
Stuart, Florida 34997
Attn: Edward M. Sellian, Chairman of the Board

Copies to:

Steven Wolosky, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022

(b) If to Seller:

The Coca-Cola Bottling Company of New York, Inc.
20 Horse Neck Lane
Greenwich, Connecticut 06836

Attn: Michael Young, Esq., General Counsel

Copies to:

William J. Collier, Esq.
Pirro Collier Cohen & Halpern LLP
Suite 701
140 Grand Street
White Plains, New York 10601

Any party hereto may change the address to which notices are to be
addressed by giving the other party notice in the manner herein set forth. All
notices shall be effective upon delivery.

27. Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated or abandoned at any time on or prior to
the Closing Date:

(a) by the written consent of Seller and Purchaser.

(b) by Purchaser if there has been a material
misrepresentation in this Agreement or any schedules
hereto by Seller or a material breach by Seller of
any of the warranties or covenants of Seller set
forth herein which has not been cured after ten (10)
days written notice to Seller, or a failure of any
condition which has not been waived in writing by
Purchaser on or prior to the Closing Date.

(c) by Seller, if there has been a material
misrepresentation in this Agreement by Purchaser or a
material breach by Purchaser of any of the warranties
or covenants of Purchaser set forth herein which has
not been cured after

-14-

<PAGE>

ten (10) days written notice to Purchaser, or a
failure of any condition which has not been waived
in writing by Seller on or prior to the Closing Date.

Termination for a material breach of this Agreement shall terminate the
right of the non- breaching party to make an indemnity claim or a claim for
specific performance hereunder, provided, however, Seller shall have the right,
whether or not the Agreement is terminated, to sell any part or all of the
Assets to a third party if Purchaser defaults hereunder. Notwithstanding
anything herein to the contrary, the provisions of Section 27 of this Agreement
shall survive any termination.

28. Remedies. Purchaser and Seller agree that included among the

remedies available to them for a breach by the other of this Agreement shall be
the remedy of specific performance.

29. Expenses. All costs and expenses incurred in connection with this
Agreement or any of the transactions contemplated hereby including, but not
limited to, accounting, consulting and attorney's fees shall be paid by the
party incurring such expenses.

30. Governing Law/Jurisdiction and Venue. This Agreement shall be
construed and governed by the internal laws of the State of New York, without
regard to principles of conflicts of law.

31. Attorney's Fees. The parties agree that in connection with any
litigation arising out of this Agreement, the prevailing party shall be entitled
to recover all costs incurred including reasonable attorney's fees, and costs
and reasonable attorney's fees in any appellate proceeding(s).

32. Confidentiality. In recognition of the confidential nature of
certain of the information which will be provided by Seller to Purchaser,
Purchaser agrees to retain in confidence, and to require its directors,
officers, employees, consultants, professional representatives and agents
(collectively its "Representatives") to retain in confidence, all confidential
information transmitted or disclosed to it by Seller, and further agrees that it
will not use for its own benefit and will not use or disclose to any third
party, or permit the use or disclosure to any third party of, any confidential
information obtained from or revealed by Seller, except that Purchaser may
disclose the confidential information to those of its Representatives who need
the information for the proper performance of their assigned duties with respect
to the consummation of the transactions contemplated hereby. Purchaser agrees
that it shall be liable for any damages resulting from its Representatives'
breach of this Section 32 by disseminating written information prepared by
Seller. Notwithstanding anything to the foregoing, such information may be
disclosed (i) where it is necessary to any regulatory authorities or
governmental agencies, (ii) if it is required by court order or decree or
applicable law, (iii) if it is information generally available to the public
other than as a result of disclosure by Purchaser or its Representatives, (iv)
if it is received from a third party not known to the recipient to be under an
obligation to keep such information confidential, or (v) if the reception
can demonstrate

-15-

<PAGE>

such information was in its possession prior to disclosure thereof in
connection with the Agreement and was not obtained from Seller
or pursuant to a confidentiality agreement with Seller.

33. Publicity. Seller and Purchaser agree that they will not make any
press releases or other announcements prior to or at the time of Closing with
respect to the transactions contemplated hereby, except as required by
applicable law, without the prior approval of the other party, which approval
will not be unreasonably withheld.

34. Best Efforts. Each party hereto agrees to use its best efforts to
cause the conditions to its obligations hereunder to be satisfied on or prior to
the Closing Date and otherwise to consummate the transactions contemplated by
the Agreement.

35. References. Whenever reference is made in this Agreement to any
Article, Section, Exhibit or Schedule, such reference shall mean the specified
Article or Section of this Agreement or the specified Exhibit or Schedule to
this Agreement.

36. Words of Inclusion. The term "including" and other words of
inclusion used herein shall not be construed as terms of limitation, and
references to "included" matters shall be regarded as non-exclusive,
non-characterizing enumerations.

37. Third Party Beneficiaries. With the exception of the parties to
this Agreement, there shall exist no right of any person to claim a beneficial
interest in this Agreement or any rights occurring by virtue of this Agreement.

-16-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

NUCO(2) INC.

By: Edward M. Sellian
Name: Edward M. Sellian
Title: Chief Executive Officer

THE COCA-COLA BOTTLING COMPANY OF
NEW YORK, INC.

By: Thomas F. Foristel
Name: Thomas F. Foristel
Title: Vice President

-17-

<PAGE>

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT made the 15th day of May, 1996
by and between NUCO2 INC., a Florida corporation having its principal place of
business at 2820 S.E. Market Place, Stuart, Florida 34997 ("Purchaser") and THE
COCA-COLA BOTTLING COMPANY OF NEW YORK, INC., a Delaware corporation having a
place of business at 35 Winthrop Avenue, New Rochelle, New York 10805
("Seller").

WHEREAS, the Purchaser and the Seller entered into an Asset Purchase
Agreement on the 18th day of April, 1996 (the "Agreement"); and

WHEREAS, the parties desire to amend the Agreement pursuant to this
Amendment No. 1 as set forth below;

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties, the Seller and the Purchaser agree as follows:

IT IS THEREFORE AGREED:

1. Section 1 of the Agreement is amended by adding the following as
subparagraph (viii):

(viii) the new and unused spare parts and additional parts for
the Business (the "Spare Parts") as set forth in the Bill
of Sale and certain fifty pound high-pressure cylinders
(the "High-Pressure Cylinders") (collectively, the
"Additional Assets").

2. The Purchase Price in Section 2 shall be adjusted as of the Closing
Date to Two Million Nine Hundred Fourteen Thousand Three Hundred Seventy Four
Dollars ($2,914,374) as per Schedule 1 attached hereto to reflect all
adjustments required by Section 4 and Section 5 of the Agreement, to reflect
the sale of the Additional Assets and to provide that the Purchaser shall be
entitled to all May rents under any and all Trade Cylinder Contracts
transferred to Purchaser pursuant to this Agreement and to reflect the customer
deposits assumed by the Purchaser pursuant to Exhibit G.

3. Section 8(a)(ii) is amended to reflect that the bill of sale and
assignment in the form attached as Exhibit H to the Agreement shall also
include the Spare Parts and High-Pressure Cylinders.

4. The letter agreement attached hereto as Exhibit AA is hereby
incorporated in this Amendment No. 1 as if specifically set forth herein.

5. Except as amended hereby, the Agreement shall remain in full force
and effect.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be executed on the day and year first above written.

NUCO2 INC.

By: Edward M. Sellian
------------------------------------
Name: Edward M. Sellian
Title: Chief Executive Officer

THE COCA-COLA BOTTLING COMPANY OF NEW
YORK, INC.

By: Thomas F. Foristel
------------------------------------
Name: Thomas F. Foristel
Title: Vice President

-2-

<PAGE>

EXHIBIT AA

The Coca-Cola Bottling Company of New York, Inc.
35 Winthrop Avenue
New Rochelle, NY 10805

May 15, 1996

NUCO2 Inc.
2820 S.E. Market Place
Stuart, FL 34997

Gentlemen:

Reference is made to the Asset Purchase Agreement dated April 18, 1996
between you and us (the "Agreement"). Terms not otherwise defined herein shall
have the meanings set forth in the Agreement.

Pursuant to Sections 12(b) and 13(g) of the Agreement, you have requested
that Seller provide you with certain financial information listed and described
on Exhibit A annexed hereto (the "Information") which you have informed Seller
is required by the Securities and Exchange Commission (the "SEC") in connection
with the reporting obligations of the Purchaser under the Securities Exchange
Act of 1934 and a pending registration statement filed by Purchaser on April
11, 1996 under File No. 333-3352 relating to the proposed secondary offering of
certain of its securities (the "Offering"). The provision of the Information
is a condition precedent to the Closing of the transaction pursuant to Section
13(g) of the Agreement.

Seller is prepared to provide you with the Information on the following
terms and conditions:

(i) Seller makes no representation, warranty or covenant of any kind
or nature to Purchaser or to any other party with respect to the Information
except as provided in the Agreement. The Information provided is raw data from
the books and records of the Seller and Seller has no reason to believe such
Information is not accurate in all material respects.

(ii) Purchaser shall use the Information only in connection with the
Offering and only in compliance with all applicable laws, rules and regulations
applicable to the Offering, including without limitation the Securities Act of
1933, the Securities Exchange Act of 1934, and any applicable state laws, all
as the same may be amended from time to time. Purchaser shall use the
Information in a manner which is limited only to compliance with the
aforementioned laws, rules and regulations and shall take no action which could
reasonably be construed to suggest that the use of the Information was in any
way the responsibility of or carried any endorsement of the Seller.

(iii) Purchaser shall provide Seller with copies of any document or
filing which utilizes the Information in any way prior to the filing thereof

with any applicable agency. Seller may, but undertakes no obligation to,
provide Purchaser with comments with respect to the use of the Information.

(iv) Purchaser shall indemnify and hold Seller forever harmless from
and against any and all Damages whatsoever arising out of or resulting from the
use by Purchaser of the Information in connection with the Offering or
otherwise (other than claims relating to breach of or default under the
Agreement by Seller). The indemnity provided for herein is in addition to
those indemnity obligations of Purchaser to Seller set forth in the Agreement
and not in limitation thereof.

(v) This letter shall be attached as an Exhibit to Amendment No. 1
to the Agreement and shall be timely filed in the public records of the SEC in
accordance with the requirements of applicable law.

If the foregoing is acceptable to you, please so indicate on the
space provided below and return a fully executed copy of this letter to the
undersigned.

Very truly yours,

THE COCA-COLA BOTTLING COMPANY OF NEW
YORK, INC.

By:
------------------------------------
Name:
Title:
ACCEPTED, ACKNOWLEDGED AND AGREED:

NUCO2 INC.

By:
---------------------------------
Name:
Title:

<PAGE>

EXHIBIT 11.1

NUCO(2) INC.
STATEMENTS RE COMPUTATION OF NET LOSS PER SHARE
FOR THE YEAR ENDED JUNE 30, 1995
AND THE NINE-MONTH PERIOD ENDED MARCH 31, 1996 (UNAUDITED)

<TABLE>
<CAPTION>
NET LOSS PER SHARE JUNE 30, 1995 MARCH 31, 1996
- ------------------ ------------- --------------
(UNAUDITED)
<S> <C> <C>
Net loss:
Net loss........................................ (532,661) (857,225)
Undeclared dividends on Preferred Stock......... (108,900) (110,917)
Interest on convertible portion of senior and
junior convertible notes..................... 56,150 24,537
----------- ------------
(585,411) (943,605)
----------- ------------
----------- ------------
Shares:
Weighted average number of common shares
outstanding during the period................ 1,932,953 4,076,660
Incremental shares representing:
Options and warrants............................ 67,734 105,455
Conversion of Preferred Stock and convertible
portion of senior and junior convertible
notes........................................ 1,378,806 --
----------- ------------
Weighted average number of shares used in
calculating net loss per share............... 3,379,493 4,182,115
----------- ------------
----------- ------------
Net Loss Per Share................................ (0.17) (0.23)
----------- ------------
----------- ------------
</TABLE>

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors
NuCo(2) Inc.

We consent to the use of our report included herein and to the reference to
our firm under the heading 'Experts' in the prospectus.

KPMG PEAT MARWICK LLP

West Palm Beach, Florida
May 15, 1996

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form SB-2 of
our report dated November 16, 1994, which includes the form of the report which
we will be prepared to issue as stated therein relating to the Financial
Statements of NuCo(2) Inc., and to the reference to our Firm under the caption
'Experts' in this Prospectus.

COOPER, SELVIN & STRASSBERG LLP

Great Neck, New York
May 15, 1996