EXHIBIT 99.1
PURCHASE AGREEMENT
AMONG
WATERLINK, INC. AND
XXXXXXXX XXXXXXXXX CORPORATION,
COLLECTIVELY, AS SELLER,
AND
CALGON CARBON CORPORATION
AS BUYER
FEBRUARY 3, 2004
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is effective February 3,
2004 (the "Effective Date"), among Xxxxxxxx Sutcliffe Corporation, an Ohio
corporation ("Xxxxxxxx"), Waterlink, Inc., a Delaware corporation and the sole
shareholder of each of Waterlink UK (as hereinafter defined) and Xxxxxxxx
("Waterlink" and, together with Xxxxxxxx, "Seller") and Calgon Carbon
Corporation, a Delaware corporation, and/or its permitted assignee(s) ("Buyer").
BACKGROUND INFORMATION
1. Seller is an international provider of integrated water and
air purification solutions for both industrial and municipal customers (the
"Business").
2. Each of Waterlink and Xxxxxxxx are debtors-in-possession in a
case (the "Chapter 11 Case") commenced on June 27, 2003 (the "Petition Date")
under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101
et. seq. (as amended, the "Bankruptcy Code"), pending in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), and
assigned Case Nos. 03-11989 (PJW) et seq. Seller desires to sell and assign to
Buyer, and Buyer desires to purchase and assume from Seller, subject to the
approval of the Bankruptcy Court, (1) all of the assets of Seller, (2) all of
the outstanding capital stock of Waterlink (UK) Holdings Limited, formerly known
as Waterlink (UK) Limited ("Waterlink UK"), a company registered in England and
Wales with number 3181974 and the holder, directly or indirectly, of the entire
issued share capital of (a) Sutcliffe Xxxxxxxx Limited ("Xxxxxxxx"), (b)
Sutcliffe Croftshaw Limited and (c) Lakeland Processing Limited (collectively,
the "Subsidiaries" and, individually, a "Subsidiary"), and (3) all of the
Assumed Liabilities (as defined below), in each case upon the terms and
conditions set forth in this Agreement.
STATEMENT OF AGREEMENT
Seller and Buyer (the "Parties") acknowledge the accuracy of the
foregoing Background Information and hereby agree as follows:
ARTICLE I
ASSET PURCHASE AND SALE
Section 1.1. Asset Purchase. On the Closing Date (defined in Article
IV), subject to the terms and conditions of this Agreement, Seller shall sell,
assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire
and accept from Seller, free and clear of all liens, debts and claims (each as
defined in Section 101 of the Bankruptcy Code, "Liens," "Debts" and "Claims,"
respectively) and other encumbrances to the fullest extent permitted by the
Bankruptcy Code (the "Asset Purchase"), all of Seller's right, title and
interest in and to all of the assets, properties, rights and claims, whether
tangible or intangible, owned, held or used by Seller in the operation of the
Business, other than those excluded by Buyer pursuant to Section 1.2 hereof (the
"Assets"). The Assets shall include, without limitation, the following:
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(a) All accounts receivable (including, without
limitation, customer retainages) and all causes of action relating or pertaining
thereto, other than accounts receivable owed by Affiliates (as defined in
Section 101 of the Bankruptcy Code) or Insiders (as defined in Section 101 of
the Bankruptcy Code) of Seller (except that the Assets shall include all
accounts or notes receivable owed to Seller by Waterlink UK or a Subsidiary);
(b) All supplies, goods, materials, work in process,
inventory and stock in trade (collectively, the "Inventory");
(c) Deferred income taxes;
(d) All other current assets as reflected in the
unaudited consolidating balance sheet of Seller as of September 30, 2003;
(e) All furniture, fixtures, equipment, other leasehold
improvements and supplies including without limitation all such property located
on the Columbus Property (defined in Section (j) below) and located at all
facilities presently leased by Seller (excluding any equipment that is the
subject of executory contracts listed on Exhibit A to the Notice of Sale,
Assumption and Assignment of Unexpired Lease or Executory Contract filed
December 24, 2003);
(f) All other tangible personal property (the
"Tangibles");
(g) All licenses, permits, consents, authorizations,
approvals and certificates required for the operation of the Business to the
extent transferable under applicable law or consented to by any third parties
whose consent is required for such transfer, (collectively, the "Permits");
(h) All patents, trademarks, tradenames and service marks
(in each case, including applications therefor), registered and unregistered
copyrights, web sites, domain names, and other intellectual property,
proprietary rights and intangible assets (whether U.S. or foreign), including
without limitation the names "Xxxxxxxx Xxxxxxxxx," "Xxxxxxxxx Xxxxxxxx,"
"Suttcliffe Croftshaw" and "Waterlink" (collectively, the "Proprietary Rights"),
in each case to the extent transferable under applicable law or consented to by
any third parties whose consent is required for such transfer; and
(i) (1) To the extent assignable under the Bankruptcy
Code or to the extent assignment is consented to by the third party or parties
to such agreements, all rights under the executory contracts and unexpired
leases to be identified on Schedule 1.1(i) (collectively, the "Assumed
Contracts"), which schedule (A) shall be provided by Buyer to Seller and
attached hereto prior to the Closing Date, and (B) shall include the Englehard
Supply Contract (the aggregate outstanding pre-and post-petition obligations
with respect to which were approximately $504,028 as of September 30, 2003 and
the Cure Amount with respect to which is $460,840.52) and the Retirement Plan
and the Plan Trust (each as defined in Section 8.9); (2) all rights of Seller
under all confidentiality agreements executed and delivered by all persons who
engaged in due diligence in connection with the contemplated sale of the
Business or the Stock or assets of Waterlink UK or the Subsidiaries, and (3) all
claims, choses in action, policies and all other rights and interests of Seller
to and with respect to insurance coverage under past and
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present policies relating to the Assets or Assumed Liabilities or operation of
the Business (but excluding any rights to receive a return of any premiums paid
with respect to any such policy) (the "Insurance Assets"), provided that such
assignment to Buyer of Insurance Assets will not be effective until the earlier
of (x) 30 days after the bar date for administrative claims set by the
Bankruptcy Court with respect to the Chapter 11 Case or (y) the date upon which
the Chapter 11 Case (or any Chapter 7 case into which it is converted) is
dismissed (the "Effective Time"). Prior to the Effective Time, the parties will
cooperate to ensure that no present or future rights or benefits with respect to
the Insurance Assets are diminished or lost, and in particular, without
limitation, after the date hereof Seller will provide to Buyer access to and the
right to copy any documents evidencing Insurance Assets and business records
relating thereto, and Seller will promptly deliver such notices and take such
other actions as Buyer reasonably requests to preserve rights and benefits
pursuant to and in connection with the Insurance Assets. Notwithstanding the
foregoing section (i)(3), the proceeds of any claim made by Seller prior to the
Effective Time under a policy that is an Insurance Asset will be applied to the
liability with respect to which the claim was made.
(j) All of Xxxxxxxx'x fee simple ownership interest in
all of its owned real property (except to the extent included in Excluded
Assets), including without limitation the real property located at 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx Xxxxxx, Xxxx 00000 (the "Columbus Property"),
and all improvements thereon.
(k) All business records, correspondence and personnel
records, customer lists and records and other information relating to operation
of the Business prior to Closing. All of Seller's choses in action, claims,
warranties, rights and remedies related to the Assets.
Section 1.2. Excluded Assets. Notwithstanding any other provision of
this Agreement to the contrary, (a) the assets of Seller as of the Closing Date
identified on Schedule 1.2, (b) any assets which Seller is prohibited from
selling to Buyer under applicable law, (c) any other assets specifically
identified by Buyer as an Excluded Asset prior to Closing, and (d) the stock of
Xxxxxxxx and any other equity interests directly or indirectly owned by Seller
other than the Stock (collectively, the "Excluded Assets") shall be excluded
from the Assets and shall be retained by Seller.
Section 1.3. Assumed Liabilities.
(a) At the Closing, Buyer shall assume from Seller and
thereafter pay, perform or discharge in accordance with their terms no
liabilities whatsoever, other than liabilities and obligations (i) arising under
the Assumed Contracts and all cure amounts owing under, and reinstatement costs
and expenses relating to, the Assumed Contracts as of the Closing Date (the
"Cure Costs"), and (ii) as set forth on Schedule 1.3. The liabilities to be
assumed pursuant to this Agreement shall be referred to herein as the "Assumed
Liabilities."
(b) Seller acknowledges and agrees that pursuant to the
terms and provisions of this Agreement and under any contract or other
agreement, Buyer will not assume any obligation of Seller other than the Assumed
Liabilities from and after the Closing Date. In furtherance and not in
limitation of the foregoing, neither the Buyer nor any of its affiliates shall
assume, and shall not be deemed to have assumed, any debt, claim, obligation or
other liability of Seller including, but not limited to:
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(i) any liability or obligation for any
fees and expenses incurred or owed in connection with the
administration of the Chapter 11 Case, the fees and expenses
of attorneys, accountants, financial advisors, consultants and
other professionals retained by Seller or the Official
Committee of Unsecured Creditors, incurred or owed in
connection with the administration of the Chapter 11 Case, and
all out of pocket expenses of Seller in connection with the
transactions contemplated under this Agreement;
(ii) Any of Seller's liabilities in
respect of taxes arising from the operation of the Business
and Assets prior to the Closing Date (other than accrued
income taxes in an amount not to exceed $86,035, which amount
is the accrued income taxes of Xxxxxxxx as reflected in the
consolidating balance sheet included in the Consolidating
Financial Statements (defined in Section 6.6) ("Accrued Income
Taxes");
(iii) any indebtedness for borrowed money
of Seller;
(iv) any liability or obligation related
to any Excluded Asset;
(v) all accounts payable arising prior
to the Closing Date (other than Cure Costs and Assumed
Liabilities);
(vi) any liability or obligation of
Seller to any former or current shareholder of Seller and its
Subsidiaries;
(vii) other than Assumed Liabilities, any
liability or obligation relating to, or arising out of (i) the
conduct of the Business or the ownership of the Assets prior
to the Closing Date, or (ii) any act, omission, transaction,
sale of goods or services, or other condition, which occurred
or existed prior to the Closing Date, other than those
liabilities and obligations included in the Assumed
Liabilities; and
(viii) any and all environmental costs and
liabilities arising from Xxxxxxxx'x operation of the Business
prior to the Closing Date including, without limitation, all
environmental costs and liabilities of Xxxxxxxx relating in
any manner to Xxxxxxxx'x direct or indirect handling,
transportation or disposal of any substance regulated under
any environmental law, or any substance defined as or included
in the statutory or regulatory definitions of pollutant,
hazardous or toxic waste, hazardous material or "toxic
substance" under any environmental law.
Section 1.4. Conveyance Documents. At the Closing, Seller shall convey,
assign and transfer the Assets to Buyer through the execution and delivery of
the following documents, each in form and substance reasonably acceptable to
Buyer:
(a) Bills of sale, deeds or assignments transferring the
Assets, in form and content mutually satisfactory to Buyer and Seller;
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(b) An instrument whereby Buyer assumes the Assumed
Contracts from Seller, in form and content mutually satisfactory to Buyer and
Seller;
(c) Such other assignment or conveyance documents as may
be reasonably requested by Buyer.
If consents or approvals of any third parties are required for
any conveyances, assignments or transfers in connection with the Asset Purchase,
Seller shall use commercially reasonable efforts to cause such consents or
approvals to be obtained prior to the Closing. All costs and expenses related to
any consents or approvals related to the Asset Purchase shall be paid by Seller.
Section 1.5. Possession. Buyer shall be entitled to exclusive
possession of the Assets as of the Closing.
ARTICLE II
STOCK PURCHASE AND SALE
Section 2.1. Stock Purchase. On the Closing Date, subject to the terms
and conditions of this Agreement, Waterlink shall sell, transfer, convey, assign
and deliver to Buyer, and Buyer shall purchase and acquire from Waterlink (the
"Stock Purchase"), all of the issued and outstanding shares in the share capital
of Waterlink UK (being 8,126,000 Ordinary Shares of (pound)1 each) (the "Stock")
free and clear of all Liens, Debts and Claims.
Section 2.2. Stock Conveyance Documents. At the Closing, Seller shall
sell, transfer and assign the Stock to Buyer by execution and delivery of the
following:
(a) a duly executed share transfer form in favor of, and
in form and substance reasonably satisfactory to, Buyer in relation to the Stock
together with all share certificates representing the Stock (or, in the case
that any such certificates are missing or lost, an indemnity in relation to such
certificates in a form reasonably acceptable to the Buyer); and
(b) the statutory books, minute books and other corporate
books and records of Waterlink UK and its Subsidiaries.
If consents or approvals of any third parties are required for
any conveyances, assignments or transfers in connection with the Stock Purchase,
Seller shall use commercially reasonable efforts to cause such consents or
approvals to be obtained prior to the Closing. All costs and expenses related to
such consents and approvals shall be paid by Seller. In addition, at Closing,
Seller shall provide all executed documents necessary to release all Liens,
Claims or Encumbrances existing with respect to the assets of Waterlink UK and
the Subsidiaries, other than Liens of the Bank of Scotland in connection with
its existing receivables factoring agreement with Xxxxxxxx (the "Bank of
Scotland Liens").
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ARTICLE III
PURCHASE PRICE; DEPOSIT
Section 3.1. Purchase Price.
(a) In full consideration for the sale and transfer of
the Assets and the Stock to Buyer, Buyer shall assume the Assumed Liabilities
and pay to Seller an amount equal to (i) $35,200,000 (such cash amount, the
"Preadjustment Cash Purchase Price") and (ii) either (A) plus the amount by
which Xxxxxxxx'x and Waterlink UK and Subsidiaries' Closing Date Working Capital
(as defined below) is greater than $18,473,000 or (B) minus the amount by which
Closing Date Working Capital is less than $17,973,000 (the amount of such
adjustment (A) or (B) being referred to herein as the "Adjustment Amount" and
the Preadjustment Cash Purchase Price as increased or decreased by the
Adjustment Amount being referred to herein as the "Purchase Price").
(b) At the Closing, unless otherwise agreed by the
Parties, Buyer shall:
(i) Pay to Seller, in immediately available U.S.
funds by confirmed wire transfer to a bank account to be designated by
Seller or by such other means as are agreed upon by Seller and Buyer,
the Preadjustment Cash Purchase Price plus or minus, as the case may
be, an estimate of the Adjustment Amount (the "Estimated Adjustment
Amount"), which Estimated Adjustment Amount shall be determined in the
same manner as the Adjustment Amount except that, for purposes of
determining the Estimated Adjustment Amount, Closing Date Working
Capital shall be determined from the Preliminary Closing Date Balance
Sheet (as defined below) which shall be prepared by Seller in good
faith in accordance with GAAP and consistent with past practice and
delivered to Buyer on the 5th business day immediately preceding the
Closing Date and reasonably approved by Buyer as to its preparation in
accordance with the foregoing criteria, minus the Deposit (as defined
in Section 3.2 below), minus the Purchase Price Adjustment Escrow
Amount (as defined in Section 3.3 below), in immediately available U.S.
funds by confirmed wire transfer to a bank account to be designated by
Seller or by such other means as are agreed upon by Buyer and Seller;
and
(ii) Pay to the Price Adjustment Escrow Agent (as
defined in Section 3.3) the Purchase Price Adjustment Escrow Amount in
immediately available U.S. funds by confirmed wire transfer to a bank
account to be designated by the Price Adjustment Escrow Agent; and
(iii) Instruct the Deposit Escrow Agent (defined
in Section 3.2) to deliver the Deposit (and interest accrued thereon)
to Seller by such means as Seller and the Deposit Escrow Agent shall
agree.
(c) For purposes hereof, the following terms shall have the
following definitions.
(i) "Closing Date Working Capital" of Xxxxxxxx and
Waterlink UK and the Subsidiaries shall mean, from the Final Closing
Date Balance Sheet (as defined below), (a) the sum of (i) Waterlink UK
and the Subsidiaries' cash, (ii) Xxxxxxxx'x and Waterlink UK and the
Subsidiaries' accounts receivable (other than intercompany trade
receivables
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and intercompany notes receivable) net of reserves, (iii) Xxxxxxxx'x
and Waterlink UK and the Subsidiaries' Inventory net of reserves, (iv)
Xxxxxxxx'x and Waterlink UK and the Subsidiaries' costs in excess of
xxxxxxxx relating to completed jobs and work-in-process, (v) Xxxxxxxx'x
deferred income taxes and (vi) Xxxxxxxx'x and Waterlink UK and the
Subsidiaries' other current assets, less (b) the sum of (i)
post-petition accounts payable of Xxxxxxxx (other than intercompany
trade payables and intercompany notes payable) and accounts payable of
Waterlink UK and the Subsidiaries (other than intercompany trade
payables and intercompany notes payable), (ii) accrued expenses of
Xxxxxxxx and Waterlink UK and the Subsidiaries, (iii) xxxxxxxx in
excess of costs relating to completed jobs and work-in-process of
Xxxxxxxx and Waterlink UK and the Subsidiaries, (iv) Accrued Income
Taxes (as defined in Section 1.3(b)(ii)) and accrued income taxes of
Waterlink UK and the Subsidiaries and (v) Waterlink UK and the
Subsidiaries' current maturities of long-term debt. Notwithstanding the
foregoing, neither any Excluded Assets (nor any excluded liabilities)
shall be taken into account for purposes of computing Closing Date
Working Capital.
(ii) "Preliminary Closing Date Balance Sheet" shall mean
an estimated consolidated balance sheet of Xxxxxxxx, Waterlink UK and
the Subsidiaries as of the Closing Date.
(iii) "Final Closing Date Balance Sheet' shall mean the
consolidated balance sheet delivered by Seller to Buyer in accordance
with Section 3.4.1.
Section 3.2. Deposit. Prior to the execution and delivery of this
Agreement by Buyer and Seller, Buyer deposited into escrow (the "Deposit
Escrow") with Xxxxx & Xxxxxxxxx LLP, as escrow agent (the "Deposit Escrow
Agent") a deposit in the amount of $1,000,000 (the "Deposit") in immediately
available funds to be held by the Deposit Escrow Holder in an account pursuant
to this Section 3.2. Interest earned on the Deposit shall be credited to and
become a part of the Deposit. If the Closing occurs, then at the Closing, the
Deposit (and all interest accrued thereon) shall be credited toward the Purchase
Price. In the event that this Agreement is terminated by reason of Buyer's
material default hereunder or the failure of Buyer to fulfill the conditions
specified in Sections 9.2(b), (c) or (e), the Deposit Escrow Holder shall
deliver the Deposit (together with all interest thereon) to Seller without
prejudice to any rights that Seller may otherwise have hereunder. If this
Agreement is terminated pursuant to Section 10.1 of this Agreement (other than a
termination pursuant to Section 10.1(c) or (e)), then the Deposit shall be
returned to Buyer.
Section 3.3. Purchase Price Adjustment Escrow. Notwithstanding anything
to the contrary in this Agreement, Buyer and Seller agree that, at the Closing,
Seller shall deposit (via diversion of a portion of the Purchase Price otherwise
due at Closing) into escrow (the "Purchase Price Adjustment Escrow") with an
escrow agent or company as may be agreed upon by the Parties (the "Price
Adjustment Escrow Agent"), $1,250,000 (the "Purchase Price Adjustment Escrow
Amount") in immediately available U.S. funds pursuant to an escrow agreement
reasonably agreeable to, and by and among, Buyer, Seller and the Price
Adjustment Escrow Agent (the "Price Adjustment Escrow Agreement"). Upon receipt
of the Purchase Price Adjustment Escrow Amount, the Price Adjustment Escrow
Agent shall immediately deposit the Purchase Price Adjustment Escrow Amount into
an interest-bearing account. The Purchase Price Adjustment Escrow Amount shall
be held until such time as the Adjustment Amount is final and binding (the
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"Purchase Price Adjustment Escrow Period"), and shall be used solely as a source
of payment to satisfy Seller's obligation, if any, to pay any difference between
the Estimated Adjustment Amount and the final Adjustment Amount under Section
3.4 hereof. Such Purchase Price Adjustment Escrow Amount shall otherwise be
administered and released during the Purchase Price Adjustment Escrow Period as
specifically provided for herein and in the Price Adjustment Escrow Agreement.
Section 3.4. Post-Closing Purchase Price Adjustment.
3.4.1 Unless the Parties shall have agreed on the
Adjustment Amount on or before the Closing Date, Seller shall, within forty-five
(45) days of the Closing Date, prepare and deliver to Buyer a consolidated
balance sheet of Xxxxxxxx, Waterlink UK and the Subsidiaries as of the Closing
Date (the "Final Closing Date Balance Sheet") based on which Seller will have
determined the Closing Date Working Capital and the Adjustment Amount. Buyer may
object to Seller's determination of the Adjustment Amount by delivery of a
written statement of objections (stating the basis of the objections with
reasonable specificity) to Seller within fifteen (15) days following delivery to
it by Seller of such consolidated balance sheet. If Buyer makes such objection,
then Buyer and Seller shall seek in good faith to resolve all disagreements set
forth in Buyer's written statement of objections within twenty (20) days
following the delivery thereof. In the event Buyer and Seller are unable to
resolve all such disagreements within such twenty (20) day period, then either
of them may elect, by written notice to the other, to have all such unresolved
disagreements resolved by an accounting firm of recognized national standing
acceptable to Buyer and Seller and not then employed by either Seller or Buyer
(the "Selected Accounting Firm"), provided that, if Buyer and Seller cannot
agree upon the accounting firm to serve as the Selected Accounting Firm, then
the Bankruptcy Court shall make the determination, which shall be final and
binding on the Parties. Each of Buyer and Seller shall promptly deliver its
proposed Adjustment Amount and support thereof to the Selected Accounting Firm,
and shall jointly instruct the Selected Accounting Firm to select either Buyer's
or Seller's proposed Adjustment Amount, which selected Adjustment Amount shall
be deemed accepted by Buyer and Seller for all purposes of this Agreement. No
appeal from such determination shall be permitted. The Selected Accounting Firm
shall be further instructed to use every reasonable effort to perform its
services within thirty (30) days after submission to it of the proposed
Adjustment Amounts and, in any case, as soon as practicable after such
submission. The costs and expenses for the services of the Selected Accounting
Firm shall be borne by the Party whose proposed Adjustment Amount is not
selected. Notwithstanding anything to the contrary herein, any obligation of
Seller to Buyer for the post-closing adjustment under this Section 3.4 shall be
limited to, and shall not exceed, the Purchase Price Escrow Amount, and Buyer
shall have no claim against Seller for, or any recourse for recovery of, any
amount beyond the Purchase Price Escrow Amount.
3.4.2 If the Purchase Price as either agreed by the Parties
or selected by the Selected Accounting Firm or determined by the Bankruptcy
Court is less than the Preadjustment Cash Purchase Price plus or minus, as the
case may be, the Estimated Adjustment Amount, then the amount of such short-fall
shall be promptly paid to Buyer by the Price Adjustment Escrow Agent from the
Purchase Price Adjustment Escrow Amount in immediately available U.S. funds by
confirmed wire transfer to a bank account to be designated by Buyer. If such
Purchase Price is greater than the Preadjustment Cash Purchase Price plus or
minus, as the case may be, the Estimated Adjustment Amount, then the amount of
such excess shall be promptly paid to Seller
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by Buyer in immediately available U.S. funds by confirmed wire transfer to a
bank account to be designated by Seller.
3.5 Taxes; Prorations. All stamp and other taxes imposed as a
result of the transfer by Seller of the Assets and the Stock shall be paid by
Buyer, except to the extent exempted by Section 1146(c) of the Bankruptcy Code.
All real, personal and other similar property taxes assessed on the Assets and
the Stock relating to all periods on or prior to the Closing shall be the
responsibility of Seller. All real, personal and other similar property taxes
assessed on the Assets relating to all periods after the Closing shall be the
responsibility of Buyer. All real, personal and similar property taxes which
have accrued but are not due as of the Closing Date shall be prorated on a per
diem basis.
ARTICLE IV
THE CLOSING
The closing of the Asset Purchase and the Stock Purchase (the
"Closing") shall be held at the offices of Xxxxx & Xxxxxxxxx LLP in Columbus,
Ohio on or before February 18, 2004. The date of the Closing shall be referred
to herein as the "Closing Date."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 5.1. Organization and Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 5.2. Power and Authority. Buyer has all requisite power and
authority to enter into this Agreement and perform its obligations under this
Agreement. This Agreement, the Asset Purchase and the Stock Purchase have been
duly and validly authorized by all necessary action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and constitutes the
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.
Section 5.3. Brokers. Buyer is not under any obligation to any broker
or other person (a "Broker") in connection with the transactions contemplated in
this Agreement that would cause Seller to become liable for payment of any fee
or expense with respect thereto (a "Commission").
Section 5.4. No Violations. Neither the execution, delivery, or
performance of this Agreement by Buyer, nor the consummation by Buyer of the
transactions contemplated hereby, nor compliance by Buyer with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or bylaws of Buyer, (b) result in
a violation or beach of, or constitute (with or without due notice or lapse of
time) a default (or give rise to any right of termination, cancellation,
acceleration, vesting, payment, exercise, suspension, or revocation) under any
of the terms, conditions, or provisions of any note, bond, mortgage, deed of
trust, security interest, indenture, license, contract, agreement, plan, or
other instrument or obligation to which Buyer is a party or by which Buyer or
Buyer's properties or
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assets may be bound or affected, or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Buyer or Buyer's properties or
assets.
Section 5.5. Financing. On the date of Buyer's execution and delivery
of this Agreement, at all times thereafter up until the Closing, and on the
Closing Date, Buyer will have cash on hand or committed financing proceeds
sufficient to deliver the Purchase Price to Seller in accordance with the terms
of this Agreement.
Section 5.6. Consents and Approvals. No consent, approval, or
authorization of, or declaration, filing or registration with, any United States
federal or state governmental or regulatory authority is required to be made or
obtained by Buyer in connection with the execution, delivery, and performance of
this Agreement and the consummation of the transactions contemplated hereby.
Section 5.7 Legal Proceedings and Judgments. There are no material
claims, actions, proceedings or investigations pending or, to Buyer's knowledge,
threatened against or relating to Buyer before any court or other governmental
authority acting in an adjudicative capacity that could have a material adverse
effect on Buyer's ability to consummate the transactions contemplated hereby.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
With respect to the Asset Purchase, each Seller hereby jointly and
severally represents and warrants to Buyer as follows:
Section 6.1. Organization and Standing. Xxxxxxxx is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Ohio.
Section 6.2. Power and Authority. Subject to the Bankruptcy Court's
entry of the Sale Order, Xxxxxxxx has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations under this
Agreement. This Agreement and the Asset Purchase have been duly and validly
authorized by all necessary corporate action on the part of Xxxxxxxx. This
Agreement has been duly executed and delivered by Xxxxxxxx and, upon entry by
the Bankruptcy Court of the Sale Order, shall constitute the legal, valid and
binding obligation of Xxxxxxxx, enforceable against Xxxxxxxx in accordance with
its terms. Upon execution of the documents to be executed and delivered at the
Closing or otherwise pursuant to this Agreement by Xxxxxxxx (the "Ancillary
Asset Purchase Documents"), such documents shall constitute the legal, valid and
binding obligations of Xxxxxxxx, enforceable in accordance with their terms,
and, subject to the Bankruptcy Court's entry of the Sale Order, no other action
or proceeding by or in respect of Xxxxxxxx is or was necessary to authorize this
Agreement, the Ancillary Asset Purchase Documents or the consummation of the
Asset Purchase.
Section 6.3. Consents and Approvals. Xxxxxxxx'x execution and delivery
of this Agreement and the Ancillary Asset Purchase Documents and consummation of
the Asset Purchase will not require any action or consent or approval of, or
review by, or registration with, any third party, court or governmental body or
other agency, instrumentality or authority, except (a) for consents,
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approvals, or authorizations of, or declarations or filings with, the Bankruptcy
Court, and (b) for consents, approvals or authorizations which may be required
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act").
Section 6.4. Brokers. Xxxxxxxx is not under any obligation to any
Broker or other third party in connection with the sale of the Assets or the
other transactions contemplated by this Agreement that would cause Buyer to
become liable for payment of any fee or expense with respect thereto.
Section 6.5 Compliance with Laws. The Business and Assets, and the
assets, properties and business of Waterlink UK and the Subsidiaries, have been
operated in material compliance with all applicable laws and all applicable
governmental judgments, decrees, injunctions or similar orders, writs, ruling
directives or other requirements (collectively, the "Governmental Orders") and
each a "Governmental Order") including, without limitation, those relating to
the safe conduct of the Business and the business of Waterlink UK and the
Subsidiaries, environmental protection, consumer protection, equal opportunity
discrimination, health and occupation safety. There are no claims, lawsuits,
demands, suits, inquiries, hearings, investigations, notice of violations,
litigations, proceedings, arbitrations, or other disputes, whether civil,
criminal, administrative or otherwise pending against any Seller or any
Subsidiary, or, to the knowledge of Seller, threatened, nor has Seller or any
Subsidiary received or aware of any written notice, regarding any material
violations of any applicable regulations and Governmental Orders enforced by any
authority claiming jurisdiction over a Seller or any Subsidiary.
Section 6.6 Financial Statements Seller has provided Buyer true,
complete and correct copies of (i) the audited consolidated balance sheets of
Seller (including Waterlink UK and the Subsidiaries) as of September 30, 2002
and 2001, respectively, and the related audited consolidated statements of
operations, changes in stockholders' equity, and cash flows for the fiscal years
then ended (the "Audited Financial Statements"), and (ii) the audited
consolidating balance sheet of Seller (including Waterlink UK and the
Subsidiaries) as of September 30, 2003 and the related audited consolidating
statement of operations for the twelve months ended September 30, 2003 (the
"Consolidating Financial Statements," and together with the Audited Financial
Statements shall be collectively referred to as the "Financial Statements"). A
copy of the Consolidating Financial Statements is attached hereto as Schedule
6.6. The Audited Financial Statements have been audited by Ernst & Young LLP,
and the Consolidating Financial Statements have been audited by outside
independent auditors, in accordance with U.S. generally accepted accounting
principles, consistently applied ("GAAP"). The balance sheets included in the
Financial Statements and the notes thereto fairly present the consolidated
financial position of Seller at the respective date thereof in accordance with
GAAP and such statements of operations, changes in stockholders' equity and cash
flows and the notes thereto included in the Financial Statements fairly present
the result of operations for the periods referred to therein, in accordance with
GAAP, except that the Consolidating Balance Sheet has no notes attached thereto
and does not have year-end audit adjustments (none of which would be material or
recurring). The Financial Statements were prepared from the books and records of
Seller. To Seller's knowledge, there has been, since September 30, 2003, no
material adverse change to the financial performance, past or as currently
budgeted, except for sales declines and other consequences directly attributable
to the filing of the Chapter 11 Case. Each of the consolidated and consolidating
financial statements of Seller and its Subsidiaries, including, in each case,
the notes thereto, made available to Buyer comply, in all material respects,
with applicable
16
accounting requirements and with the published rules and regulations of the
Securities and Exchange Commission with respect thereto. The books and records
of Seller and its Subsidiaries have been, and are being, maintained in
accordance with GAAP and applicable law.
Section 6.7 Properties.
(a) Schedule 6.7 sets forth the description of all real
property which Seller owns in connection with the Business (the "Real
Property").
(b) Xxxxxxxx owns fee simple title to all the Real
Property included in the Assets other than the Real Property in which it has a
leasehold interest. Each of Xxxxxxxx, Waterlink UK and the Subsidiaries is the
undisputed lessee with respect to the Real Property leased by it and has the
right to quiet enjoyment and undisturbed possession of such property, as well as
the right to continue to conduct its Business or business, as the case may be,
without any claims by any lessors, mortgagees or other persons, subject to the
terms and conditions of the Real Property leases thereto and any mortgage, Liens
or other encumbrances affecting any of the Real Property and incurred by the
landlord of any of the Real Property, and except for Liens and security
interests of Seller's lenders (none of which Liens or security interests of
Seller's lenders shall encumber the Assets, or any assets or properties of
Waterlink UK or the Subsidiaries, immediately following Closing). There has been
no disturbance of, or challenge to, the quiet possession of Xxxxxxxx, Waterlink
UK or any Subsidiary under such leases.
(c) At the Closing, Seller will convey good and valid
title to, or a valid leasehold interest in, all tangible personal property
material to the operation of the Business.
(d) As of the Closing Date, Seller will have and will
transfer to the Buyer title to all of the assets (except those subject to
Assumed Contracts) necessary to operate the Business as currently operated, free
and clear of all Liens, Debts, Claims and other encumbrances.
(e) Except as set forth in Schedule 6.7, neither the
Assets nor the assets and properties of Waterlink UK or any Subsidiary include
real property.
Section 6.8 Customer Warranties. There have been no pending, nor to the
best knowledge of Seller, threatened, claims under or pursuant to any warranty,
whether expressed or implied, on products or services sold prior to the Closing
Date by Seller or any Subsidiary that are not disclosed or referred to in the
Financial Statements and, to the best of Seller's knowledge, that are not fully
reserved against in accordance with GAAP. To the best of Seller's knowledge, all
such reserved amounts are sufficient to cover such disclosed or referenced
claims. All of the services rendered by Seller and each Subsidiary (whether
directly or indirectly through independent contractors) have been performed in
conformity with all expressed warranties and, in all material respects, with all
applicable contractual commitments, and Seller does not have nor shall it have
any liability for replacement or repair or for other damages relating to or
arising from any such services, except for amounts incurred in the ordinary
course of business which are immaterial in the aggregate and not required by
GAAP to be disclosed in the Financial Statements. To the best of Seller's
knowledge, there is no reason to expect an increase in warranty claims in the
future.
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Section 6.9. Sufficiency of Assets. The Assets constitute all the
assets necessary for the continued operation of the Business after the Closing
in substantially the same manner as conducted prior to the Closing. The assets
and properties of Waterlink UK and the Subsidiaries constitute all the assets
and properties necessary for the continued operation by them of their respective
businesses after the Closing in substantially the same manner as conducted prior
to the Closing.
ARTICLE VII
WARRANTIES OF WATERLINK
With respect to the Stock Purchase, Waterlink warrants to Buyer as
follows:
Section 7.1. Organization and Standing. Waterlink UK and each
Subsidiary is duly incorporated and validly existing in accordance with the laws
of England and Wales. Waterlink UK and each Subsidiary is duly qualified to do
business and is in good standing under the laws of (i) each jurisdiction in
which it owns or leases property and (ii) each other jurisdiction in which the
conduct of its business or the ownership of its assets requires such
qualification. Waterlink UK and each Subsidiary has all requisite corporate
power and authority to own its properties and carry on its business as presently
conducted.
Section 7.2. Power and Authority. Subject to the Bankruptcy Court's
entry of the Sale Order, Waterlink has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations under this
Agreement. This Agreement and the Stock Purchase have been duly and validly
authorized by all necessary corporate action on the part of Waterlink. This
Agreement has been duly executed and delivered by Waterlink and constitutes the
legal, valid and binding obligation of Waterlink, enforceable against Waterlink
in accordance with its terms. Upon execution of the documents to be executed and
delivered at the Closing or otherwise pursuant to this Agreement by Waterlink,
Waterlink UK and/or the Subsidiaries (the "Ancillary Stock Sale Documents"),
such documents shall constitute the legal, valid and binding obligations of each
of them, as applicable, enforceable in accordance with their terms, and no other
action or proceeding by or in respect of any of them is or was necessary to
authorize the Stock Purchase (save in respect of any applicable requirements
under the laws of England and Wales in relation to stamp duty payable on such
Stock Purchase payable by Seller at Closing).
Section 7.3. Consents and Approvals. Waterlink's execution and delivery
of this Agreement and consummation of the Stock Purchase, and execution and
delivery of the Ancillary Stock Purchase Documents by Waterlink, Waterlink UK
and the Subsidiaries, will not require any action or consent or approval of, or
review by, or registration with, any third party, court or governmental body or
other agency, instrumentality or authority other than the Bankruptcy Court's
entry of the Sale Order, and any applicable requirements under the laws of
England and Wales in relation to stamp duty payable on such Stock Purchase,
except for any consents required under Seller's credit agreement with its senior
secured lenders.
Section 7.4. Share Capital and Ownership. Waterlink owns all of the
issued and outstanding issued share capital of Waterlink UK, and Waterlink UK
owns all of the issued and outstanding issued share capital of each Subsidiary.
All such issued and outstanding share capital of Waterlink UK and all of the
issued and outstanding share capital of each Subsidiary is validly issued, fully
18
paid and non-assessable, and all such shares of share capital are owned by
Waterlink and Waterlink UK, respectively, free and clear of all Liens, pledges,
encumbrances, charges, agreements or claims of any kind whatsoever, except as
set forth in Schedule 7.4 hereof. At the Closing, all of the shares of share
capital of Waterlink UK and of each Subsidiary shall be sold, assigned, and
transferred to the Buyer free and clear of all such Liens, pledges,
encumbrances, charges, agreements and claims. There are no outstanding
subscriptions, options, warrants, rights, calls, commitments, conversion rights,
rights of exchange, preemptive rights, rights of purchase, issuance, allotment,
redemption, repayment or transfer or sale of any shares of the share capital of
Waterlink UK or any Subsidiary, other than as contemplated by this Agreement.
Section 7.5. Brokers. Neither Waterlink nor Waterlink UK nor any
Subsidiary is under any obligation to any Broker or other third party in
connection with the sale of the Stock or the other transactions contemplated in
this Agreement that would cause Buyer, Waterlink UK or any Subsidiary to become
liable for payment of any fee or expense with respect thereto.
Section 7.6. Absence of Long-Term Obligations. Neither Waterlink nor
Waterlink UK nor any Subsidiary has any outstanding long-term liabilities or
liabilities not disclosed on the Financial Statements, other than with respect
to obligations under the Sutcliffe Xxxxxxxx Limited Pension and Life Assurance
Scheme (the "UK Pension Obligations").
ARTICLE VIII
COVENANTS OF THE PARTIES
Section 8.1. General. Each Party shall use all reasonable efforts to
take all actions and do all things reasonably necessary, proper or advisable to
consummate the Stock Purchase and the Asset Purchase and to obtain approval and
entry of the Sale Order (defined in Section 8.2(a)(ii)), including satisfying
the closing conditions set forth in Article IX.
Section 8.2. Applications to Bankruptcy Court. As soon as practicable
after execution of this Agreement (and in no event later than 3 business days
thereafter), Seller shall seek from the Bankruptcy Court the entry of an order,
in form and substance satisfactory to Buyer and its counsel, approving this
Agreement and all the transactions contemplated hereby (the "Sale Order"), which
Sale Order shall (i) approve the sale of the Assets and the Stock to Buyer on
the terms and conditions set forth in this Agreement and authorize Seller to
proceed with such sale, (ii) state that the sale of the Property to Buyer shall
be free and clear of all Liens, Debts and Claims, and any other encumbrances
whatsoever (except as expressly provided in this Agreement) to the fullest
extent permitted by the Bankruptcy Code, (iii) fix Cure Amounts for each Assumed
Contract and, to the extent permissible under Section 365 of the Bankruptcy
Code, approve Seller's assumption, and assignment to Buyer, of the Assumed
Contracts pursuant to Section 365 of the Bankruptcy Code and order Buyer to pay
the Cure Amounts as a condition to such assumption and assignment; and (iv)
provided that Buyer is the successful bidder at the Auction, include a specific
finding and conclusion of law that Buyer has acted in good faith in connection
with its purchase of the Property and is entitled to all protections of Section
363(m) of the Bankruptcy Code.
All Parties shall use commercially reasonable efforts to have the Bankruptcy
Court enter the Bid Procedures Order as soon as practicable following the filing
of the motion therefor.
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Section 8.3. Maintenance of Acquired Assets. Seller shall, during the
period from the Effective Date until the Closing Date (or until the termination
of this Agreement pursuant to Article X), maintain the Assets, all properties
and assets of Waterlink UK and the Subsidiaries, and all of Waterlink UK's and
the Subsidiaries' net operating losses, in each case consistent with past
practice, subject to any restrictions imposed by the Bankruptcy Court. From the
date hereof through Closing, none of Seller, Waterlink UK or the Subsidiaries
shall (i) transfer, sell, dispose of, convey or expend assets or properties
except the sale of products of their businesses, consistent with past practices;
(ii) incur any financing or indebtedness (other than ordinary course borrowing
under financing described in Section 2.2); (iii) take any action that could have
the effect of increasing or accelerating the UK Pension Obligations or of
terminating or winding up the associated plans; (iv) enter into any contract or
incur any obligation except as necessary to sell products on terms consistent
with past practices; (v) hire any employee, increase or change the pay or
benefits of any employee; (vi) take any action that will result in an
Encumbrance, Claim or Lien on assets or property of Waterlink UK or the
Subsidiaries; (vii) make any distribution or redemption with respect to equity
or stock; or (viii) take any other action, except as is necessary to sell
products of its business, consistent with past practices. Seller shall maintain
existing and customary insurance coverage on all assets and properties of
Seller, Waterlink UK and the Subsidiaries through Closing.
Section 8.4. Inspections. From and after the Effective Date, Buyer and
its employees, agents and representatives, upon prior written notice to Seller,
shall be allowed reasonable access to the businesses of Xxxxxxxx and Xxxxxxxx at
reasonable times for purposes of inspection, including all business and tax
records; provided, however, that such access shall not unreasonably interfere
with either Seller's operation of its business and shall be at Buyer's expense
and provided further that Seller shall not be required to take any action which
would constitute a waiver of the attorney-client privilege.
Section 8.5. Ability to Pay Purchase Price. As of the Effective Date,
and as necessary or desirable in Seller's discretion until the Closing, Buyer
shall demonstrate to Seller's to Seller's satisfaction, that Buyer has
sufficient cash on hand or available financing proceeds or commitments to pay
the Purchase Price at the Closing.
Section 8.6. Union Contract. Without the prior written consent of
Buyer, Xxxxxxxx shall not enter into a new, or amend or otherwise modify the
existing, union contract with United Steel Workers of America, dated November 1,
2000, a complete copy of which has been provided to Buyer.
Section 8.7 Termination of Note. Seller shall cause amounts payable
under a certain inter company note receivable of Waterlink from Waterlink UK in
the amount of $9,759,537 on September 30, 2003 to be forgiven by Waterlink, and
such note terminated, such that there are no remaining rights or obligations
thereunder at Closing.
Section 8.8 Purchase Price Allocation. Seller shall keep Buyer informed
as to its intentions with respect to allocation of the Purchase Price among the
Assets and Stock and will provide to Buyer a copy of IRS Form 8594 promptly
following final completion of such form.
Section 8.9 U.S. Pension Plan. Effective as of the Closing Date, Buyer
shall assume sponsorship of the Xxxxxxxx Xxxxxxxxx Corporation Retirement
Benefits Plan, E.I.N. #00-0000000
20
Plan No. 001 (the "Retirement Plan"), and become grantor of the trust created
pursuant to the Retirement Plan (the "Plan Trust") and in that connection shall
become responsible for the administration of the Retirement Plan and for the
investment, funding and appointment of a successor trustee of the Plan Trust.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.1. Conditions to Obligations of Buyer. The obligations of
Buyer to consummate the Asset Purchase and the Stock Purchase shall be subject
to Seller's fulfillment on or prior to the Closing Date of each of the following
conditions unless waived by Buyer in writing:
(a) the Bankruptcy Court shall have entered and approved
the Sale Order;
(b) Seller shall have performed and complied in all
material respects with all of its agreements and covenants hereunder on and as
of the Closing Date;
(c) there shall not be any order of any governmental
entity (a "Governmental Order") in effect preventing consummation of the
transactions contemplated by this Agreement;.
(d) the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date;
(e) Buyer shall have received the Preliminary Closing
Date Balance Sheet in accordance with Section 3.1 hereof, which shall have been
prepared by Seller in good faith in accordance with GAAP and consistent with
past practice and reasonably approved by Buyer as to its preparation in
accordance with the foregoing criteria;
(f) Buyer shall have received an opinion of Seller's
counsel reasonably acceptable to Buyer attesting to, among other things, the
validity of the transfer of the Stock; and
(g) Seller shall have delivered, or caused to be
delivered, to Buyer a certificate (or its equivalent) dated not greater than ten
(10) business days prior to the Closing of the Secretary of State (or its
equivalent) of its jurisdiction of organization as to the existence and good
standing (or its equivalent) therein.
(h) Prior to the Closing, Seller shall have taken such
action as is reasonably required to apply for an extension to the exemption
notice received June 21, 1999 from Inland Revenue, U.K., pertaining to the
deduction of tax related to the payment of interest on the Waterlink UK
intercompany note referenced on Schedule 1.2.
Section 9.2. Conditions to Obligations of Seller. The obligation of
Seller to consummate the Asset Purchase and the Stock Purchase shall be subject
to Buyer's fulfillment on or prior to the Closing Date of the following
conditions, unless waived by the Seller in writing:
(a) the Bankruptcy Court shall have approved and entered
the Sale Order;
21
(b) the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date;
(c) Buyer shall have performed and complied in all
material respects with all of its agreements and covenants hereunder on and as
of the Closing;
(d) there shall not be any Governmental Order in effect
preventing consummation of the transactions contemplated by this Agreement; and
(e) Buyer shall have delivered, or caused to be
delivered, to Seller a certificate dated not greater than ten (10) business days
prior to the Closing of the Secretary of State of its jurisdiction of
organization as to the existence and good standing of Buyer in the that State.
Seller may waive any condition specified in this Section 9.2, except for the
condition that the Bankruptcy Court shall have approved and entered the Sale
Order.
ARTICLE X
TERMINATION
Section 10.1. Termination of Agreement. The Parties may terminate this
Agreement prior to the Closing as provided below:
(a) The Parties may terminate this Agreement by mutual
written consent at any time prior to the entry of the Sale Order;
(b) Buyer may terminate this Agreement by giving written
notice to Seller in the event Seller is in material breach of any
material representation, warranty or covenant in this Agreement that is
not qualified by materiality or Seller is in breach of any
representation, warranty or covenant in this Agreement that is so
qualified, and such breach has not been cured within ten (10) business
days following the delivery of written notice thereof to Seller
(provided that Buyer is not then in breach of this Agreement);
(c) Seller may terminate this Agreement by giving written
notice to Buyer in the event (i) Buyer is in material breach of any
material representation, warranty or covenant contained in this
Agreement and (ii) such breach has not been cured within ten (10)
business days following the delivery of written notice thereof to Buyer
(provided that Seller is not then in breach of this Agreement);
(d) Seller may terminate this Agreement if (i) any of the
conditions set forth in Section 9.2(a) or (d) shall have become
incapable of fulfillment, or (ii) any of the conditions set forth in
Section 9.2(b), (c) or (e) shall have become incapable of fulfillment
or cure by Buyer and shall not have been waived by Seller, provided
that Seller is not then in breach of this Agreement;
22
(e) Buyer may terminate this Agreement if any of the
conditions set forth in Section 9.1 shall have become incapable of
fulfillment or cure by Seller and shall not have been waived by Buyer,
provided that Buyer is not then in breach of this Agreement; or
(f) Buyer or Seller may terminate this Agreement if a
motion to dismiss the Chapter 11 Case or a motion to convert the
Chapter 11 Case or the appointment of a trustee, receiver, liquidator
or other similar person for the purpose of liquidating any of the
Assets other than pursuant to this Agreement has been granted in the
Bankruptcy Case; or
(g) Buyer or Seller may terminate this Agreement if a
Closing shall not have occurred on or before February 18, 2004 for
reasons unrelated to the dilatory conduct of the terminating party.
Section 10.2. Default. If this Agreement is terminated under Section
10.1, written notice thereof will forthwith be given to the other Party and this
Agreement will thereafter become void and have no further force and effect and,
except for those provisions that expressly survive the termination of this
Agreement, all further obligations of Seller and the Buyer to each other under
this Agreement will terminate without further obligation or liability of Seller
or Buyer to the other (other than with respect to breaches, if any, of this
Agreement prior to such termination), except that:
(a) Each Party will return all documents, workpapers and
other material of any other party relating to the transactions contemplated by
this Agreement, whether so obtained before or after the execution of this
Agreement, to the Party furnishing the same.
(b) If this Agreement is terminated pursuant to Article
10.1 of this Agreement (other than a termination pursuant to Section 10.1(c) or
(d)(ii)), then within two (2) business days after such termination, the Deposit
shall be returned to Buyer.
(c) If this Agreement is terminated by Seller pursuant to
Section 10.1(c) or (d)(ii), then the Deposit shall be paid to Seller.
(d) In the event of a default by Seller under this
Agreement after entry of the Sale Order by the Bankruptcy Court, the Buyer shall
be entitled to all of its remedies at law and in equity.
Section 10.3. Extension; Waiver. At any time prior to the Closing,
Seller, on the one hand, or Buyer, on the other hand, may (i) extend the time
for the performance of any of the obligations or acts of the other Party, (ii)
waive any inaccuracies in the representations and warranties of the other Party
contained herein or in any document delivered pursuant hereto, (iii) waive
compliance with any of the agreements of the other Party contained herein or
(iv) waive any condition to its obligations hereunder. Any agreement on the part
of Seller, on the one hand, or Buyer, on the other hand, to any such extension
or waiver shall be valid only if set forth in writing.
23
ARTICLE XI
COVENANTS AFTER CLOSING
Section 11.1. Access. During the six-year period following the Closing
Date and during normal business hours, Buyer will, and will cause its
affiliates, successors and assigns to, permit upon reasonable advance, at least
five (5) days, prior written notice (a) Seller and its representatives to have
access to the books, documents and records (including tax returns, files, papers
and related items) of, and relating to, Xxxxxxxx, its business or its employees,
in each case to the extent relating to any period prior to the Closing or the
legitimate business needs of Seller or any of its Affiliates, and permit Seller
and its representatives to make copies of such books, documents and records at
Seller's expense and (b) Seller and its representatives to have reasonable
access to the employees of Buyer and its Affiliates, and direct such employees
to cooperate with each of them, for Seller's or any of its Affiliates'
resolution of Tax, audit, litigation, accounting, securities or similar matters
that relate to any period prior to the Closing (whether such matters arose
before or after the Closing). Without limiting the generality of the foregoing,
Buyer agrees that such legitimate business needs include (i) defending or
pursuing claims, litigation or similar proceedings, (ii) preparing or making
filings contemplated by securities laws or stock exchange rules, (iii) preparing
or filing tax returns or responding to audits, and (iv) administering Seller's
bankruptcy estate.
ARTICLE XII
SURVIVAL
Section 12.1. Survival. None of the representations or warranties
contained herein or in any instrument or document delivered pursuant thereto
will survive the Closing, and none of the Parties nor any of their respective
officers, directors, representatives, employees, advisors or agents shall have
any liability to the other after the Closing for any breach thereof.
Section 12.2. "AS IS" TRANSACTION. BUYER HEREBY ACKNOWLEDGES AND AGREES
THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO (AND SELLER
EXPRESSLY DISCLAIMS AND NEGATES ANY) REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
ASSETS OR ANY OTHER MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, INCOME TO
BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE ASSETS, THE
PHYSICAL CONDITION OF ANY PART OF THE ASSETS, THE ENVIRONMENTAL CONDITION OR
OTHER MATTER RELATING TO THE PHYSICAL CONDITION OF ANY REAL PROPERTY OWNED BY
SELLER OR WHICH ARE THE SUBJECT OF ANY ASSUMED CONTRACT AT THE CLOSING, THE
ZONING OF ANY SUCH REAL PROPERTY, THE VALUE OF THE ASSETS (OR ANY PORTION
THEREOF), THE TRANSFERABILITY OF THE ASSETS, THE TERMS, AMOUNT, VALIDITY OR
ENFORCEABILITY OF ANY ASSUMED LIABILITIES, THE TITLE OF THE ASSETS (OR ANY
PORTION THEREOF), THE MERCHANTABILITY OR FITNESS OF THE ASSETS FOR ANY
PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE ASSETS OR ANY
PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY
24
PORTION OF THE ASSETS. BUYER FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN
INDEPENDENT INSPECTION AND INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS
AND ALL SUCH OTHER MATTERS RELATING TO OR AFFECTING THE ASSETS AS BUYER DEEMED
NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE
ASSETS, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH
HEREIN, BUYER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND
INVESTIGATIONS. ACCORDINGLY, SUBJECT TO BUYER'S RIGHTS UNDER THIS AGREEMENT,
BUYER WILL ACCEPT THE ASSETS AT THE CLOSING "AS IS," "WHERE IS," AND "WITH ALL
FAULTS" AND WITHOUT RECOURSE TO SELLER.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. All notices and other communications under this
Agreement to a Party shall be in writing and shall be deemed given when
delivered personally, sent by facsimile (which is confirmed electronically) to
that Party at the facsimile number for that Party set forth below, mailed by
certified mail (return receipt requested) to that Party at the address for that
Party (or at such other address for such Party as such Party shall have
specified in notice to the other Party), or delivered to Federal Express, UPS,
or any similar express delivery service for delivery to that Party at that
address:
(a) If to Buyer:
Xxxx X. Xxxxxx
Chief Executive Officer
Calgon Carbon Corporation
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: 000-000-0000
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx, LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Xxxxx X. Xxxx, Esq.
Fax: 000-000-0000
(b) If to Seller:
Xxxxxxxx Xxxxxxxxx Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
25
Attention: Xxxxxxx Xxxxxxxxxx, CEO
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxxxx LLP
Capitol Square Suite 2100
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Section 13.2. Amendments. Any amendments to this Agreement shall be in
a writing, which may be executed in one or more counterparts and shall be
effective if executed by all Parties, and, to the extent necessary, approved by
the Bankruptcy Court.
Section 13.3. Non-Waiver. No failure by any Party to insist upon strict
compliance with any term or provision of this Agreement, to exercise any option,
to enforce any right, or to seek any remedy upon any default of any other Party
shall affect, or constitute a waiver of, any other Party's right to insist upon
such strict compliance, exercise that option, enforce that right, or seek that
remedy with respect to that default or any prior, contemporaneous or subsequent
default. No custom or practice of the Parties at variance with any provision of
this Agreement shall affect or constitute a waiver of, any Party's right to
demand strict compliance with the provisions of this Agreement.
Section 13.4. Headings. The headings of the various articles and
sections of this Agreement are not part of the context of this Agreement, are
merely labels to assist in locating such articles and sections, and shall be
ignored in construing this Agreement.
Section 13.5. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
Section 13.6. Entire Agreement. This Agreement (including all schedules
and other documents referred to in this Agreement all of which are hereby
incorporated by reference) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the Parties
with respect to its subject matter.
Section 13.7. No Third Party Beneficiaries. Nothing contained in this
Agreement, expressed or implied, is intended or shall be construed to confer
upon or give to any person, firm, corporation or legal entity, other than the
Parties, any rights, remedies or other benefits under or by reason of this
Agreement.
Section 13.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio without regard to
principles of conflicts of law. Any actions brought to enforce this Agreement,
or any breach hereof, or any obligation
26
hereunder, shall be brought in the Bankruptcy Court. Each of the parties hereto
irrevocably and unconditionally consents to submit to the jurisdiction of the
Bankruptcy Court for any litigation arising out of or relating to this Agreement
and the transactions contemplated thereby (and agrees not to commence any
litigation relating thereto except the Bankruptcy Court), waives any objection
to the laying of venue of any such litigation therein, and agrees not to plead
or claim that such litigation has been brought in an inconvenient form.
Section 13.9. Successors; Assignment. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by and against the Parties and
their respective heirs, personal representatives, successors and assigns.
Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be transferred or assigned by any Party without the prior
written consent of the other Parties, provided that Buyer may, subject to the
provisions of Section 8.6, assign any of its rights (or obligations) hereunder
to any one or more affiliate(s), prior to or at the time of Closing.
Section 13.10. Remedies. All rights and remedies of each Party under
this Agreement shall be cumulative and in addition to all other rights and
remedies which may be available to that Party from time to time, whether under
any other agreement, at law, or in equity.
Section 13.11. Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 13.12. Publicity. No Party to this Agreement shall issue any
press release or other publicity concerning the proposed transaction without the
prior approval of the other Party, except as otherwise required by law. Each
Party shall provide to the other Party a reasonable opportunity to review any
press release prior to its issuance.
Section 13.13. Severability; Validity; Parties in Interest. If any of
the provision of this Agreement or the application thereof to any person or
circumstance is held invalid or unenforceable, the remainder of this Agreement,
and the application or such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable. Nothing in this Agreement, express or implied, is
intended to confer upon any person not a party to this Agreement any rights or
remedies of an y nature whatsoever under or by reason of this Agreement.
Section 13.14. Bulk Sales. Buyer hereby waives compliance with any bulk
sales or other similar laws in any applicable jurisdiction in respect of the
transaction contemplated by this Agreement.
Section 13.15. Costs and Expenses. Whether or not a Closing of the
Asset Sale and the Stock Sale as contemplated herein occurs, each party to this
Agreement will pay all costs and expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby except as otherwise provided
herein. The foregoing shall not affect the legal right, if any, that any Party
may have to recover expenses from any other Party that breaches its obligations
hereunder.
27
Section 13.16. Announcements. No Party hereto shall disclose any
information relating hereto without the prior written consent of the other
Parties prior to the public announcement, if any, of this Agreement (which shall
be in accordance with Section 13.12), except for such disclosures to such
professional advisors of either Party as may be necessary or appropriate in
order to enter into this Agreement and consummate the transactions contemplated
by this Agreement. The provisions of this section will be subject to the
Parties' obligations to comply with applicable requirements of federal or state
laws or any governmental order or regulation, including any order of the
Bankruptcy Court, provided, however, that in such case the disclosing Party
shall give the other Party reasonable advance notice of any such disclosure.
Section 13.17 Risk of Loss.
(a) Casualty. Seller will bear all risk of loss occurring
to or upon any portion of the Assets and the assets and properties of Waterlink
UK and the Subsidiary prior to the Closing Date. In the event that any material
portion of the Assets or of the assets and properties of Waterlink UK and the
Subsidiaries is damaged or destroyed prior to Closing Date (i) with respect to
such Assets, the Buyer may, at its option, exclude such Asset from this
Agreement or (ii) terminate this Agreement. If Buyer closes notwithstanding any
unrepaired or unrestored loss to such Assets or assets, Seller will deliver
and/or assign to the Buyer any insurance proceeds with respect to such damage or
destruction and there will be no adjustment to the Purchase Price.
(b) Condemnation. In the event that any portion of the
Assets or the assets and properties of Waterlink UK and the Subsidiaries is
taken by eminent domain or condemnation prior to the Closing Date and such
taking materially and adversely affects the use or utility of the Business or of
the business of Waterlink UK or the Subsidiaries, the Buyer may within ten (10)
days after it receives written notice of such taking either (i) proceed to close
notwithstanding the eminent domain or condemnation proceeding, in which event
Seller will assign to the Buyer its entire right, title and interest in and to
any award with respect to an Asset, (ii) exclude such Asset or (iii) terminate
this Agreement. If the Buyer closes notwithstanding any such condemnation,
Seller will deliver and/or assign to the Buyer any proceeds with respect to such
condemnation and there will be no adjustment to the Purchase Price.
Section 13.18. Severability. If any provision of this Agreement is
finally determined by a court of competent jurisdiction to be unenforceable,
such court shall have jurisdiction to reform such provision so that it is
enforceable to the maximum extent permitted by applicable law, and the Parties
shall abide by such court's determination. If any provision of this Agreement
cannot be reformed, such provision shall be deemed severed from this Agreement,
but every other provision of this Agreement shall remain in full force and
effect.
Section 13.19. Cooperation. Each Party will take all reasonable actions
necessary to comply promptly with all requirements contemplated by this
Agreement and will otherwise cooperate with, and furnish information to, the
other Party.
Section 13.20. Construction. The language used in this Agreement will
be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the
28
context requires otherwise. Use of the word "including" shall mean "including
without limitation" whether or not such words are used.
Section 13.21. Submission to Jurisdiction. Unless and to the extent
otherwise specifically provided herein, the Parties irrevocably submit to the
exclusive jurisdiction of the Bankruptcy Court (or any court exercising
appellate jurisdiction over the Bankruptcy Court) over any dispute arising out
of or relating to this Agreement or any other agreement or instrument
contemplated hereby or entered into in connection herewith or any of the
transactions contemplated hereby or thereby. Each Party hereby irrevocably
agrees that all claims in respect of such dispute or proceedings may be heard
and determined in such courts. The Parties irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of venue of any such dispute or proceeding brought
in such courts or any defense of inconvenient forum in connection therewith.
13.22 Avoidance Actions. Prior to or at the time of Closing, Seller
shall deliver to Buyer a complete release of any potential avoidance actions of
Seller or its bankruptcy estates against Buyer or its affiliates, including
those arising under 11 U.S.C. Section 547.
* * * * * * * *
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON THE FOLLOWING PAGE.
29
Buyer: Seller:
CALGON CARBON CORPORATION WATERLINK, INC.
By /s/ X. X. Xxxxxxx
------------------------
Print Name X. X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxxxxxxx
Title Vice President, General Counsel & -------------------------------
Secretary Print Name Xxxxxxx X. Xxxxxxxxxx
Title President & CEO
XXXXXXXX XXXXXXXXX CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Print Name Xxxxxxx X. Xxxxxxxxxx
Title Chairman
30
SCHEDULE 1.1(i)
ASSUMED CONTRACTS
ASSUMED CONTRACTS
NOTE: THE FINAL VERSION OF THIS SCHEDULE WILL BE PROVIDED BY BUYER TO SELLER
(AND ATTACHED HERETO AND INCORPORATED HEREIN) PRIOR TO THE CLOSING DATE.
31
SCHEDULE 1.2
EXCLUDED ASSETS
- Any of Seller's cash and equivalents whatsoever, whether on hand, in
banks or elsewhere (other than cash or cash equivalents of Seller, if
any, held by or at Waterlink UK or its Subsidiaries).
- All retainers paid by Seller to its professional advisors in connection
with the Chapter 11 Case.
- Except as otherwise provided herein, all of Seller's contract rights to
payment, notes or notes receivable owing.
- All avoidance actions of Seller or its bankruptcy estates, including
those arising under 11 U.S.C. Sections 510, 544-550, and applicable
State law.
- All deposits of Seller other than customer deposits existing as of the
Closing Date in respect of (i) any existing order or work-in-process or
(ii) product orders contemplated to be commenced by any Seller or
Seller affiliate, which shall constitute acquired Assets.
- All supplier credits, insurance refunds, tax refunds or other tax
benefits arising from Seller's operation of its business other than
customer credits existing as of the Closing Date in respect of (i) any
existing order or work-in-process or (ii) product orders contemplated
to be commenced by any Seller or Seller affiliate which shall
constitute acquired Assets.
- Any rights to amounts held in escrow except as otherwise provided
herein.
- Any and all incorporation documents, corporate minutes, financial
records, income tax returns and any other documentation necessary for
Seller to conclude the administration of the chapter 11 bankruptcy
case; provided, however, the foregoing shall not include any
incorporation documents, corporate minute books financial records and
other documentation relating to Waterlink UK or any Subsidiary which
shall constitute acquired Assets.
- Notes receivable existing as of the Closing date, including without
limitation that certain intercompany note payable by Waterlink UK to
Waterlink in the amount of $9,759,537 at September 30, 2003, which
shall be forgiven and terminated prior to closing in accordance with
Section 8.7 of the Agreement.
- All proceeds from causes of action and litigation rights existing in
favor of Seller as of the Closing Date.
- All assets of Waterlink, Inc. (other than the Stock (defined in Section
2.1) transferred by Waterlink to Buyer under Article II).
32
SCHEDULE 1.3
ASSUMED LIABILITIES
- Post-petition accounts payable of Xxxxxxxx (other than intercompany
trade payables and intercompany notes payable) as of the Closing Date
(The Parties acknowledge that, as of September 30, 2003, the amount of
such accounts payable was approximately $1,300,000) if and to the
extent subtracted when calculating Closing Date Working Capital under
Section 3.1(c)(i).
- Accrued expenses of Xxxxxxxx as of the Closing Date (The Parties
acknowledge that, as of September 30, 2003, the amount of such accrued
expenses was approximately $1,472,974) if and to the extent subtracted
when calculating Closing Date Working Capital under Section 3.1(c)(i).
- Xxxxxxxx in excess of costs of Xxxxxxxx as of the Closing Date (The
Parties acknowledge that, as of September 30, 2003, the amount of such
xxxxxxxx was approximately $744,312) if and to the extent subtracted
when calculating Closing Date Working Capital under Section 3.1(c)(i).
- Accrued Income Taxes (as defined in Section 1.3(b)(ii))
33
SCHEDULE 6.6
CONSOLIDATING FINANCIAL STATEMENTS
See attached.
34
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2003
Specialty Other
Products Corporate Adjustments Eliminations Consolidated
---------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,657,428 $ 8,919 $ 2,666,347
Trade accounts receivable 13,152,785 - 13,152,785
Intercompany accounts receivable 0 - 0
Customer retainage - - -
Other receivables - - -
Inventories 9,606,599 - 9,606,599
Costs in excess of xxxxxxxx 1,167,217 - 1,167,217
Deferred income taxes - - - -
Other current assets 1,301,398 1,451,429 2,752,827
---------------------------------------------------------------------------
Total current assets 27,885,426 1,460,348 - - 29,345,774
Property, plant and equipment 10,309,189 12,532 10,321,721
Accumulated depreciation 4,772,450 12,532 4,784,982
---------------------------------------------------------------------------
Net property, plant and equipment 5,536,738 - - - 5,536,738
Other assets:
Goodwill, net of amortization 3,566,562 - 3,566,562
Patents, net of amortization - - -
Intercompany notes receivable - 35,226,710 (35,226,710) -
Investments in subsidiaries - 10,066,880 (10,066,880) -
Deferred income taxes - - - -
Other assets - 1,019,907 1,019,907
---------------------------------------------------------------------------
Total other assets 3,566,562 46,313,497 - (45,293,590) 4,586,469
---------------------------------------------------------------------------
Total assets $ 36,988,727 $ 47,773,845 $ - $(45,293,590) $ 39,468,982
===========================================================================
35
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET-CONTINUED
SEPTEMBER 30, 2003
Specialty Other
Products Corporate Adjustments Eliminations Consolidated
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,450,926 $ 59,927 $ 6,510,853
Intercompany payables (0) - (0)
Accrued expenses 2,352,797 2,097,790 1,462,992 5,913,579
Reserves for discontinued operations - 1,462,992 (1,462,992) -
Xxxxxxxx in excess of cost 838,980 - 838,980
Accrued income taxes (174,333) 559,788 - 385,455
Current portion of long-term debt 939,237 37,930,615 38,869,852
------------------------------------------------------------------------
10,407,605 42,111,112 - - 52,518,717
Long-term obligations:
Long-term debt - - -
Notes payable - related parties - - -
Subordinated notes - related parties - - -
Subordinated debt - - -
Long-term intercompany note 35,226,710 - (35,226,710) -
Deferred income taxes - - - -
Other long-term liabilities 3,803,000 - 3,803,000
------------------------------------------------------------------------
Total long-term liabilities 39,029,710 - - (35,226,710) 3,803,000
------------------------------------------------------------------------
Total liabilities 49,437,315 42,111,112 - (35,226,710) 56,321,717
Shareholders' equity
Preferred stock - - -
Common stock 10,066,880 19,665 (10,066,880) 19,665
Additional paid-in capital - 92,174,121 92,174,121
Foreign currency adjustment (5,926,862) - (5,926,862)
Retained earnings (deficit) 2,431,177 (85,668,556) (83,237,379)
Current year net income (loss) (19,019,748) (862,497) (19,882,281)
------------------------------------------------------------------------
Total shareholders' equity (deficit) (12,448,588) (5,662,733) - (10,066,880) (16,852,735)
------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 36,988,727 $ 47,773,845 $ - $(45,293,590) $ 39,468,982
========================================================================
ok ok ok ok ok
36
WATERLINK, INC.-SPECIALTY PRODUCTS DIVISION
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2003
1.6615100 1.66151
Xxxxxxxx Xxxxxxxxx Holding
Sutcliffe Xxxxxxxx Company Eliminations Consolidated
------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,840,066 $ 843,695 $ (26,333) $ 2,657,428
Trade accounts receivable 8,869,796 4,282,989 - 13,152,785
Intercompany accounts receivable 32,840 12,946,951 - (12,979,791) 0
Customer retainage - - - -
Other receivables - - - -
Inventories 7,826,994 1,779,605 - 9,606,599
Costs in excess of xxxxxxxx 784,840 382,377 - 1,167,217
Deferred income taxes 650,370 - - (650,370) -
Other current assets 880,727 420,090 582 1,301,398
------------------------------------------------------------------------
Total current assets 20,885,633 20,655,706 (25,752) (13,630,161) 27,885,426
Property, plant and equipment 6,083,143 4,226,046 - 10,309,189
Accumulated depreciation 2,630,686 2,141,764 - 4,772,450
------------------------------------------------------------------------
Net property, plant and equipment 3,452,457 2,084,281 - - 5,536,738
Other assets:
Goodwill, net of amortization 811,046 2,755,516 - 3,566,562
Patents, net of amortization - - - -
Intercompany notes receivable - - - -
Investments in subsidiaries - 99,579 20,133,760 (20,233,339) -
Deferred income taxes - - - - -
Other assets - - 1,463,790 (1,463,790) -
------------------------------------------------------------------------
Total other assets 811,046 2,855,096 21,597,550 (21,697,130) 3,566,562
------------------------------------------------------------------------
Total assets $ 25,149,136 $ 25,595,083 $ 21,571,799 $(35,327,291) $ 36,988,727
========================================================================
37
WATERLINK, INC.-SPECIALTY PRODUCTS DIVISION
CONSOLIDATING BALANCE SHEET-CONTINUED
SEPTEMBER 30, 2003
1.6615 1.6615
Xxxxxxxx Xxxxxxxxx Holding
Sutcliffe Xxxxxxxx Company Eliminations Consolidated
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,339,557 $ 2,111,369 $ - $ 6,450,926
Intercompany payables 276,907 32,840 12,670,052 (12,979,799) (0)
Accrued expenses 1,472,974 862,493 17,330 2,352,797
Reserves for discontinued operations - - - -
Xxxxxxxx in excess of cost 744,312 94,668 - 838,980
Accrued income taxes 86,035 83,935 - (344,303) (174,333)
Current portion of long-term debt - 939,237 - 939,237
-------------------------------------------------------------------------
6,919,785 4,124,541 12,687,382 (13,324,102) 10,407,605
Long-term obligations:
Long-term debt - - - -
Notes payable - related parties - - - -
Subordinated notes - related parties - - - -
Subordinated debt - - - -
Long-term intercompany note 26,651,365 - 9,759,537 (1,184,192) 35,226,710
Deferred income taxes 306,067 - - (306,067) -
Other long-term liabilities - - - 3,803,000 3,803,000
-------------------------------------------------------------------------
Total long-term liabilities 26,957,432 - 9,759,537 2,312,741 39,029,710
-------------------------------------------------------------------------
Total liabilities 33,877,217 4,124,541 22,446,919 (11,011,361) 49,437,315
Shareholders' equity
Preferred stock - - - - -
Common stock - 18,419,000 10,066,880 (18,419,000) 10,066,880
Additional paid-in capital - - - - -
Foreign currency adjustment - 2,229,778 (2,259,710) (5,896,930) (5,026,862)
Retained earnings (deficit) 3,953,558 5,797,569 (7,319,950) 2,431,177
Current year net income (loss) (12,681,639) (4,975,804) (1,362,340) - (19,019,784)
-------------------------------------------------------------------------
Total shareholders' equity (deficit) (8,728,081) 21,470,542 (875,120) (24,315,930) (12,448,588)
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 25,149,136 $25,595,083 $21,571,799 $(35,327,291) $ 36,988,727
=========================================================================
ok ok ok ok ok
38
WATERLINK, INC.-CORPORATE OFFICE
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2003
Other
Management Holdings Adjustments Eliminations Consolidated
---------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 8,919 $ - $ 8,919
Trade accounts receivable - - -
Intercompany accounts receivable - - -
Customer retainage - - -
Other receivables - - -
Inventories - - -
Costs in excess of xxxxxxxx - - -
Deferred income taxes 513,845 - (513,845) -
Other current assets 2,451,429 - (1,000,000) 1,451,429
---------------------------------------------------------------------------
Total current assets 2,974,193 - (513,845) (1,000,000) 1,460,348
Property, plant and equipment 12,532 - 12,532
Accumulated depreciation 12,532 - 12,532
---------------------------------------------------------------------------
Net property, plant and equipment - - - - -
Other assets:
Goodwill, net of amortization - - -
Patents, net of amortization - - -
Intercompany notes receivable 35,226,710 49,308,946 (49,308,946) 35,226,710
Investments in subsidiaries - 10,066,880 10,066,880
Deferred income taxes (1,236,475) - 1,236,475 -
Other assets 19,907 - 1,000,000 1,019,907
---------------------------------------------------------------------------
Total other assets 34,010,142 59,375,826 1,236,475 (48,308,946) 46,313,497
---------------------------------------------------------------------------
Total assets $ 36,984,335 $ 59,375,826 $ 722,630 $(49,308,946) $ 47,773,845
===========================================================================
39
WATERLINK, INC.-CORPORATE OFFICE
CONSOLIDATING BALANCE SHEET-CONTINUED
SEPTEMBER 30, 2003
Other
Management Holdings Adjustments Eliminations Consolidated
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 59,927 $ - $ 59,927
Intercompany payables - - -
Accrued expenses 2,097,790 - 2,097,790
Reserves for discontinued operations 1,462,992 - - 1,462,992
Xxxxxxxx in excess of cost - - -
Accrued income taxes - - 559,788 559,788
Current portion of long-term debt 37,930,615 - 37,930,615
------------------------------------------------------------------------
41,551,324 - 559,788 - 42,111,112
Long-term obligations:
Long-term debt - - -
Notes payable - related parties - - -
Subordinated notes - related parties - - -
Subordinated debt - - -
Long-term intercompany note 49,308,946 - (49,308,946) -
Deferred income taxes (162,842) - 162,842 -
Other long-term liabilities - - -
------------------------------------------------------------------------
Total long-term liabilities 49,146,104 - 162,842 (49,308,946) -
------------------------------------------------------------------------
Total liabilities 90,697,428 - 722,630 (49,308,946) 42,111,112
Shareholders' equity
Preferred stock - - -
Common stock - 19,665 19,665
Additional paid-in capital - 92,174,121 92,174,121
Foreign currency adjustment - - -
Retained earnings (deficit) (52,850,596) (32,817,960) (85,668,556)
Current year net income (loss) (862,497) - - - (862,497)
------------------------------------------------------------------------
Total shareholders' equity (deficit) (53,713,093) 59,375,826 - - 5,662,733
------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 36,984,335 $ 59,375,826 $ 722,630 $(49,308,946) $ 47,773,845
========================================================================
ok ok ok ok ok
40
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 2003
Specialty Other
Products Corporate Adjustments Eliminations Consolidated
------------------------------------------------------------------------
Net sales $ 66,857,957 $ - $ - $ 66,857,957
Cost of goods sold 51,404,799 - - 51,404,799
------------------------------------------------------------------------
Gross profit 15,453,158 - - - 15,453,158
Selling, general and admin. expense 8,882,014 1,153,970 10,035,984
US pension adjustment - - -
Amortization 553,607 - 553,607
------------------------------------------------------------------------
9,435,621 1,153,970 - - 10,589,591
------------------------------------------------------------------------
Operating income 6,017,537 (1,153,970) - - 4,863,567
Other income (expense):
Interest expense (44,241) (2,457,108) (6,398) (2,507,747)
Intercompany interest expense (3,184,438) 3,178,040 6,398 0
Interest income - 178 178
Intercompany management fee (900,000) 900,000 -
Other items, net 3,239 (1,316,635) (1,313,396)
------------------------------------------------------------------------
(4,125,440) 304,475 - - (3,820,965)
------------------------------------------------------------------------
Income before taxes 1,892,097 (849,495) - - 1,042,602
Income taxes 411,881 13,002 424,883
------------------------------------------------------------------------
Income from continuing operations 1,480,216 (862,497) - - 617,719
Cumulative effect-goodwill impairment (20,500,000) - (20,500,000)
------------------------------------------------------------------------
Net income (loss) $(19,019,784) $ (862,497) $ - $ - $(19,882,281)
========================================================================
EBITDA $ 7,515,275 $ (1,148,618) 6,366,657
Key Ratios:
Gross margin 23.1% 23.1%
SG&A expense to sales 13.3% 15.0%
Operating margin 9.0% 7.3%
EBITDA margin 11.2% 9.5%
41
WATERLINK, INC.-SPECIALTY PRODUCTS DIVISION
CONSOLIDATING STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 2003
1.6034492 1.6034492
Xxxxxxxx Xxxxxxxxx Holding
Sutcliffe Xxxxxxxx Company Eliminations Consolidated
---------------------------------------------------------------------------
Net sales $ 47,910,669 $ 19,368,509 $ - $ (421,221) $ 66,857,957
Cost of goods sold 37,272,637 14,553,383 - (421,221) 51,404,799
---------------------------------------------------------------------------
Gross profit 10,638,032 4,815,126 - - 15,453,158
Selling, general and admin. expense 5,921,513 2,940,634 19,867 8,882,014
US pension adjustment - - - -
Amortization - - 553,607 553,607
---------------------------------------------------------------------------
5,921,513 2,940,634 573,474 - 9,435,621
---------------------------------------------------------------------------
Operating income 4,716,519 1,874,491 (573,474) - 6,017,537
Other income (expense):
Interest expense (573) (43,668) - (44,241)
Intercompany interest expense (2,395,571) - (788,867) (3,184,438)
Interest income - - - -
Intercompany management fee (900,000) - - (900,000)
Other items, net 3,239 - - 3,239
---------------------------------------------------------------------------
(3,292,905) (43,668) (788,867) - (4,125,440)
---------------------------------------------------------------------------
Income before taxes 1,423,614 1,830,823 (1,362,340) - 1,892,097
Income taxes 105,253 306,628 - 411,881
---------------------------------------------------------------------------
Income from continuing operations 1,318,361 1,524,196 (1,362,340) - 1,480,216
Cumulative effect-goodwill impairment (14,000,000) (6,500,000) (20,500,000)
---------------------------------------------------------------------------
Net income (loss) $(12,681,639) $ (4,975,804) $ (1,362,340) $ - $(19,019,784)
===========================================================================
EBITDA $ 5,317,055 $ 2,218,087 $ (19,8067) $ - $ 7,515,275
Key Ratios:
Gross margin 22.2% 24.9% 0.0% 23.1%
SG&A expense to sales 12.4% 15.2% -4.7% 13.3%
Operating margin 9.8% 9.7% 136.1% 9.0%
EBITDA margin 11.1% 11.5% 4.7% 11.2%
42
WATERLINK, INC.-CORPORATE OFFICE
CONSOLIDATING STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 2003
Other
Management Holdings Adjustments Eliminations Consolidated
-----------------------------------------------------------------------------
Net sales $ - $ - $ -
Cost of goods sold - - -
-----------------------------------------------------------------------------
Gross profit - - - - -
Selling, general and admin. expense 1,153,970 - 1,153,970
US pension adjustment - - -
Amortization - - -
-----------------------------------------------------------------------------
1,153,970 - - - 1,153,970
-----------------------------------------------------------------------------
Operating income (1,153,970) - - - (1,153,970)
Other income (expense):
Interest expense (2,457,108) - (2,457,108)
Intercompany interest expense 3,178,040 - 3,178,040
Interest income 178 - 178
Intercompany management fee 900,000 - 900,000
Other items, net (1,316,635) - (1,316,635)
-----------------------------------------------------------------------------
304,475 - - - 304,475
-----------------------------------------------------------------------------
Income before taxes (849,495) - - - (849,495)
Income taxes 13,002 - 13,002
-----------------------------------------------------------------------------
Income from continuing operations (862,497) - - - (862,497)
Cumulative effect-goodwill impairment - - - - -
-----------------------------------------------------------------------------
Net income (loss) $ (862,497) $ - $ - $ - $ (862,497)
=============================================================================
EBITDA $ (1,148,618) $ - $ (1,148,618)
Key Ratios:
Gross margin
SG&A expense to sales
Operating margin
EBITDA margin
43
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
QUARTER TO DATE SEPTEMBER 30, 2003
Specialty Other
Products Corporate Adjustments Eliminations Consolidated
--------------------------------------------------------------------------
Net sales $ 18,720,868 $ - $ - $ - $ 18,720,868
Cost of goods sold 14,028,618 - - - 14,028,618
--------------------------------------------------------------------------
Gross profit 4,692,250 - - - 4,692,250
Selling, general and admin. expense 2,227,666 226,525 - - 2,454,191
US pension adjustment - - - - -
Amortization 395,261 - - - 395,261
--------------------------------------------------------------------------
2,622,927 226,525 - - 2,849,452
--------------------------------------------------------------------------
Operating income 2,069,324 (226,525) - - 1,842,799
Other income (expense):
Interest expense (17,338) (1,142) - (1,491) (19,971)
Intercompany interest expense (777,617) 776,126 - 1,491 0
Interest income - - - - -
Intercompany management fee (225,000) 225,000 - - -
Other items, net 206 (1,084,620) - - (1,084,414)
--------------------------------------------------------------------------
(1,019,748) (84,636) - - (1,104,384)
--------------------------------------------------------------------------
Income before taxes 1,049,575 (311,161) - - 738,414
Income taxes 164,926 13,002 - - 177,928
--------------------------------------------------------------------------
Income from continuing operations 884,650 (324,163) - - 560,487
Cumulative effect-goodwill impairment - - -
--------------------------------------------------------------------------
Net income (loss) $ 884,650 $ (324,163) $ - $ - $ 560,487
==========================================================================
EBITDA $ 2,750,945 $ (222,865) $ - $ - $ 2,528,080
Key Ratios:
Gross margin 25.1% 25.1%
SG&A expense to sales 11.9% 13.1%
Operating margin 11.1% 9.8%
EBITDA margin 14.7% 13.5%
44
WATERLINK, INC.-SPECIALTY PRODUCTS DIVISION
CONSOLIDATING STATEMENT OF OPERATIONS
QUARTER TO DATE SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx Holding
Sutcliffe Xxxxxxxx Company Eliminations Consolidated
------------------------------------------------------------------------
Net sales $ 13,509,149 $ 5,293,636 $ - $ (81,917) $ 18,720,868
Cost of goods sold 10,119,918 3,990,616 - (81,917) 14,028,618
------------------------------------------------------------------------
Gross profit 3,389,231 1,303,019 - - 4,692,250
Selling, general and admin. expense 1,443,299 769,394 14,972 - 2,227,666
US pension adjustment - - - - -
Amortization - - 395,261 - 395,261
------------------------------------------------------------------------
1,443,299 769,394 410,233 - 2,622,927
------------------------------------------------------------------------
Operating income 1,945,932 533,625 (410,233) - 2,069,324
Other income (expense):
Interest expense 485 (17,823) - - (17,338)
Intercompany interest expense (585,689) - (191,928) - (777,617)
Interest income - - - - -
Intercompany management fee (225,000) - - - (225,000)
Other items, net 206 - - - 206
------------------------------------------------------------------------
(809,998) (17,823) (191,928) - (1,019,748)
------------------------------------------------------------------------
Income before taxes 1,135,934 515,802 (602,161) - 1,049,575
Income taxes 72,253 92,673 - - 164,926
------------------------------------------------------------------------
Income from continuing operations 1,063,681 423,130 (602,161) - 884,650
Cumulative effect-goodwill impairment - - - - -
------------------------------------------------------------------------
Net income (loss) $ 1,063,681 $ 423,130 $ (602,161) $ - $ 884,650
========================================================================
EBITDA $ 2,143,718 $ 622,200 $ (14,972) $ - $ 2,750,945
Key Ratios:
Gross margin 25.1% 24.6% 0.0% 25.1%
SG&A expense to sales 10.7% 14.5% -18.3% 11.9%
Operating margin 14.4% 10.1% 500.8% 11.1%
EBITDA margin 15.9% 11.8% 18.3% 14.7%
45
WATERLINK, INC.-CORPORATE OFFICE
CONSOLIDATING STATEMENT OF OPERATIONS
QUARTER TO DATE SEPTEMBER 30, 2003
Other
Management Holdings Adjustments Eliminations Consolidated
-------------------------------------------------------------------------
Net sales $ - $ - $ - $ - $ -
Cost of goods sold - - - - -
-------------------------------------------------------------------------
Gross profit - - - - -
Selling, general and admin. expense 226,525 - - - 226,525
US pension adjustment - - - - -
Amortization - - - - -
-------------------------------------------------------------------------
226,525 - - - 226,525
-------------------------------------------------------------------------
Operating income (226,525) - - - (226,525)
Other income (expense):
Interest expense (1,142) - - - (1,142)
Intercompany interest expense 776,126 - - - 776,126
Interest income - - - - -
Intercompany management fee 225,000 - - - 225,000
Other items, net (1,084,620) - - - (1,084,620)
-------------------------------------------------------------------------
(84,636) - - - (84,636)
-------------------------------------------------------------------------
Income before taxes (311,161) - - - (311,161)
Income taxes 13,002 - - - 13,002
-------------------------------------------------------------------------
Income from continuing operations (324,163) - - - (324,163)
Cumulative effect-goodwill impairment - - - - -
-------------------------------------------------------------------------
Net income (loss) $ (324,163) $ - $ - $ - $ (324,163)
=========================================================================
EBITDA $ (222,865) $ - $ - $ - $ (222,865)
Key Ratios:
Gross margin
SG&A expense to sales
Operating margin
EBITDA margin
46
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
MONTH ENDED SEPTEMBER 30, 2003
Specialty Other
Products Corporate Adjustments Eliminations Consolidated
-------------------------------------------------------------------------
Net sales $ 7,080,712 $ - $ - $ - $ 7,080,712
Cost of goods sold 5,135,029 - - - 5,135,029
-------------------------------------------------------------------------
Gross profit 1,945,683 - - - 1,945,683
Selling, general and admin. expense 714,589 91,072 - - 805,661
US pension adjustment - - - - -
Amortization 360,175 - - - 360,175
-------------------------------------------------------------------------
1,074,764 91,072 - - 1,165,836
-------------------------------------------------------------------------
Operating income 870,919 (91,072) - - 779,847
Other income (expense):
Interest expense (13,152) (414) - (1,807) (15,373)
Intercompany interest expense (387,473) 385,667 - 1,807 1
Interest income - - - - -
Intercompany management fee (75,000) 75,000 - - -
Other items, net - (390,827) - - (390,827)
-------------------------------------------------------------------------
(475,626) 69,426 - - (406,200)
-------------------------------------------------------------------------
Income before taxes 395,293 (21,646) - - 373,647
Income taxes 81,879 13,002 - - 94,881
-------------------------------------------------------------------------
Income from continuing operations 313,414 (34,648) - - 278,766
Cumulative effect-goodwill impairment - - -
-------------------------------------------------------------------------
Net income (loss) $ 313,414 $ (34,648) $ - $ - $ 278,766
=========================================================================
EBITDA $ 1,368,477 $ (87,788) $ - $ - $ 1,280,689
Key Ratios:
Gross margin 27.5% 27.5%
SG&A expense to sales 10.1% 11.4%
Operating margin 12.3% 11.0%
EBITDA margin 19.3% 18.1%
47
WATERLINK, INC.-SPECIALTY PRODUCTS DIVISION
CONSOLIDATING STATEMENT OF OPERATIONS
MONTH ENDED SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx Holding
Sutcliffe Xxxxxxxx Company Eliminations Consolidated
-------------------------------------------------------------------------
Net sales $ 5,147,658 $ 1,950,419 $ - (17,365) $ 7,080,712
Cost of goods sold 3,729,203 1,423,191 - (17,365) 5,135,029
-------------------------------------------------------------------------
Gross profit 1,418,455 527,228 - - 1,945,683
Selling, general and admin. expense 431,507 268,267 14,815 - 714,589
US pension adjustment - - - - -
Amortization - - 360,175 - 360,175
-------------------------------------------------------------------------
431,507 268,267 374,990 - 1,074,764
-------------------------------------------------------------------------
Operating income 986,948 258,961 (374,990) - 870,919
Other income (expense):
Interest expense - (13,152) - - (13,152)
Intercompany interest expense (195,229) - (192,244) - (387,473)
Interest income - - - - -
Intercompany management fee (75,000) - - - (75,000)
Other items, net - - - - -
-------------------------------------------------------------------------
(270,229) (13,152) (192,244) - (475,626)
-------------------------------------------------------------------------
Income before taxes 716,719 245,808 (567,234) - 395,293
Income taxes 70,253 11,626 - - 81,879
-------------------------------------------------------------------------
Income from continuing operations 646,466 234,182 (567,234) - 313,414
Cumulative effect-goodwill impairment - - - - -
-------------------------------------------------------------------------
Net income (loss) $ 646,466 $ 234,182 $ (567,234) $ - $ 313,414
=========================================================================
EBITDA $ 1,095,234 $ 288,059 $ (14,815) $ - $ 1,368,477
Key Ratios:
Gross margin 27.6% 27.0% 0.0% 27.5%
SG&A expense to sales 8.4% 13.8% -85.3% 10.1%
Operating margin 19.2% 13.3% 2159.4% 12.3%
EBITDA margin 21.3% 14.8% 85.3% 19.3%
48
WATERLINK, INC.-CORPORATE OFFICE
CONSOLIDATING STATEMENT OF OPERATIONS
MONTH ENDED SEPTEMBER 30, 2003
Other
Management Holdings Adjustments Eliminations Consolidated
-------------------------------------------------------------------------
Net sales $ - $ - $ - $ - $ -
Cost of goods sold - - - - -
-------------------------------------------------------------------------
Gross profit - - - - -
Selling, general and admin. expense 91,072 - - - 91,072
US pension adjustment - - - - -
Amortization - - - - -
-------------------------------------------------------------------------
91,072 - - - 91,072
-------------------------------------------------------------------------
Operating income (91,072) - - - (91,072)
Other income (expense):
Interest expense (414) - - - (414)
Intercompany interest expense 385,667 - - - 385,667
Interest income - - - - -
Intercompany management fee 75,000 - - - 75,000
Other items, net (390,827) - - - (390,827)
-------------------------------------------------------------------------
69,426 - - - 69,426
-------------------------------------------------------------------------
Income before taxes (21,646) - - - (21,646)
Income taxes 13,002 - - - 13,002
-------------------------------------------------------------------------
Income from continuing operations (34,648) - - - (34,648)
Cumulative effect-goodwill impairment - - - - -
-------------------------------------------------------------------------
Net income (loss) $ (34,648) $ - $ - $ - $ (34,648)
=========================================================================
EBITDA $ (87,788) $ - $ - $ - $ (87,788)
Key Ratios:
Gross margin
SG&A expense to sales
Operating margin
EBITDA margin
49
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
TWELVE MONTHS ENDED SEPTEMBER 30, 0000
XXX exchange rate 1.60345 1.60345
Xxxxxxxx Xxxxxxxxx UK Holding Waterlink
Sutcliffe Xxxxxxxx Company Management
-----------------------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 1,318,361 $ 1,524,196 $(1,362,340) $ (862,497)
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization 600,536 2,309,841 (1,412,639) 287,843
Deferred income taxes (318,654) 306,629 - 331,656
Other - - - -
Changes in working capital:
Accounts receivable (1,268,843) (444,420) - -
Intercompany receivables 1,980 (4,139,689) - -
Inventories 580,029 450,419 - -
Costs in excess of xxxxxxxx 465,142 176,389 - -
Prepaids and other assets (246,814) (21,530) (561) (205,603)
Accounts payable 735,304 (1,195,493) - (22,471)
Intercompany payables 169,982 (3,901) 3,981,759 -
Accrued expenses 74,664 (495,920) (1,122) (7,726)
Xxxxxxxx in excess of cost 555,241 47,055 - -
Accrued income taxes 16,931 38,427 - -
-----------------------------------------------------
Net cash provided (used) by operating activities 2,683,859 (1,447,998) 1,205,096 (478,798)
INVESTING ACTIVITIES
Purchases of equipment, net (744,261) (470,179) - -
Sale of businesses, net - - - 250,000
-----------------------------------------------------
Net cash provided (used) by investing activities (744,261) (470,179) - 250,000
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 906,415 - -
Payments on long-term borrowings - - - (1,743,210)
Intercompany long-term borrowings (79,237) - (1,219,110) 1,287,702
Proceeds from sale of common stock - - - (81,821)
-----------------------------------------------------
Net cash provided (used) by financing activities (79,237) 906,415 (1,219,110) (537,329)
Cash flows from discontinued operations - - -
Effect of exchange rate changes on cash - 69,169 (1,168) -
-----------------------------------------------------
Increase (decrease) in cash 1,860,361 (942,593) (15,182) (766,127)
Cash at beginning of period (20,295) 1,786,288 (11,151) 775,046
-----------------------------------------------------
Cash at end of period $ 1,840,066 $ 843,695 $ (26,333) $ 8,919
=====================================================
ok (0) (0) ok
Waterlink Eliminations
Holdings & Other Total
---------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ - $ - $ 617,719
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization - 1,785,581
Deferred income taxes - 319,631
Other - -
Changes in working capital:
Accounts receivable - (1,713,263)
Intercompany receivables - 4,137,709 -
Inventories - 1,030,448
Costs in excess of xxxxxxxx - 641,531
Prepaids and other assets - (474,508)
Accounts payable - (482,660)
Intercompany payables (54) (4,147,786) -
Accrued expenses - (430,104)
Xxxxxxxx in excess of cost - 602,296
Accrued income taxes - 55,358
---------------------------------------
Net cash provided (used) by operating activities (54) (10,077) 1,952,029
INVESTING ACTIVITIES
Purchases of equipment, net - (1,214,440)
Sale of businesses, net - 250,000
---------------------------------------
Net cash provided (used) by investing activities - - (964,440)
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 906,415
Payments on long-term borrowings - (1,743,210)
Intercompany long-term borrowings - 10,645 -
Proceeds from sale of common stock 54 81,821 54
---------------------------------------
Net cash provided (used) by financing activities 54 92,466 (836,741)
Cash flows from discontinued operations (81,821) (81,821)
Effect of exchange rate changes on cash - (569) 67,432
---------------------------------------
Increase (decrease) in cash - - 136,459
Cash at beginning of period - - 2,529,888
---------------------------------------
Cash at end of period $ - $ - $ 2,666,347
=======================================
ok (0)
50
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
QUARTER TO DATE SEPTEMBER 30, 2003
Xxxxxxxx Sutcliffe UK Holding Waterlink
Sutcliffe Carbons Company Management
-----------------------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 1,063,681 $ 581,476 $ (760,507) $ (324,163)
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization 197,786 2,054,820 (1,412,639) 54,289
Deferred income taxes (318,654) 92,673 - 331,656
Other - - - -
Changes in working capital: - - - -
Accounts receivable 106,832 (533,902) - -
Intercompany receivables 15,257 (2,135,327) - -
Inventories (468,395) 401,433 - -
Costs in excess of xxxxxxxx (543,524) 178,016 - -
Prepaids and other assets (357,747) (185,177) (561) 535,033
Accounts payable 734,106 56,931 - 11,257
Intercompany payables 153,900 (14,864) 1,987,206 -
Accrued expenses 175,079 (416,047) 9,962 194,658
Xxxxxxxx in excess of cost (391,682) 4,416 - -
Accrued income taxes 62,565 (1,817) - -
-----------------------------------------------------
Net cash provided (used) by operating activities 429,204 82,631 (176,539) 802,730
INVESTING ACTIVITIES
Purchases of equipment, net (30,798) (227,538) - -
Sale of businesses, net - - - -
-----------------------------------------------------
Net cash provided (used) by investing activities (30,798) (227,538) - -
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 68,000 - -
Payments on long-term borrowings - - - -
Intercompany long-term borrowings 620,741 - 170,986 (795,180)
Proceeds from sale of common stock - - - (972)
-----------------------------------------------------
Net cash provided (used) by financing activities 620,741 68,000 170,986 (796,152)
Cash flows from discontinued operations - - - -
Effect of exchange rate changes on cash - 2,936 (253) -
-----------------------------------------------------
Increase (decrease) in cash 1,019,147 (73,971) (5,806) 6,578
Cash at beginning of period 820,919 917,666 (20,527) 2,341
-----------------------------------------------------
Cash at end of period $ 1,840,066 $ 843,695 $ (26,333) $ 8,919
=====================================================
ok (0) (0) ok
Waterlink Eliminations
Holdings & Other Total
---------------------------------------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ - $ - $ 560,487
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization - - 894,256
Deferred income taxes - - 105,675
Other - - -
Changes in working capital: - -
Accounts receivable - - (427,070)
Intercompany receivables - 2,120,070 -
Inventories - - (66,962)
Costs in excess of xxxxxxxx - - (365,508)
Prepaids and other assets - - (8,452)
Accounts payable - - 802,294
Intercompany payables - (2,126,242) -
Accrued expenses - - (36,349)
Xxxxxxxx in excess of cost - - (387,266)
Accrued income taxes - - 60,748
---------------------------------------
Net cash provided (used) by operating activities - (6,172) 1,131,854
INVESTING ACTIVITIES
Purchases of equipment, net - - (258,336)
Sale of businesses, net - - -
---------------------------------------
Net cash provided (used) by investing activities - - (258,336)
FINANCING ACTIVITIES
Proceeds from long-term borrowings - - 68,000
Payments on long-term borrowings - - -
Intercompany long-term borrowings - 3,453 -
Proceeds from sale of common stock - 972 -
---------------------------------------
Net cash provided (used) by financing activities - 4,425 68,000
Cash flows from discontinued operations - (972) (972)
Effect of exchange rate changes on cash - 2,719 5,402
---------------------------------------
Increase (decrease) in cash - (0) 945,948
Cash at beginning of period - - 1,720,399
---------------------------------------
Cash at end of period $ - $ (0) $ 2,666,347
=======================================
ok 0 ok
51
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
MONTH ENDED SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx UK Holding Waterlink
Sutcliffe Xxxxxxxx Company Management
----------- ----------- ----------- ----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 646,466 $ 427,614 $ (760,666) $ (34,648)
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization 108,286 1,995,343 (1,412,639) 20,160
Deferred income taxes (318,654) 11,626 - 331,656
Other - - - -
Changes in working capital:
Accounts receivable 368,569 (550,574) - -
Intercompany receivables (985) (2,104,432) - 363,333
Inventories 83,837 266,577 - -
Costs in excess of xxxxxxxx (644,874) 319,362 - -
Prepaids and other assets (346,871) (169,409) (2) (53,277)
Accounts payable 825,371 635,883 - 8,545
Intercompany payables (235,240) (12) 1,988,264 -
Accrued expenses (444,874) (511,367) 13,153 169,511
Xxxxxxxx in excess of cost (572,591) 717 - -
Accrued income taxes 60,625 (2,752) - -
----------- ----------- ----------- ----------
Net cash provided (used) by operating activities (470,935) 318,577 (171,889) 805,280
INVESTING ACTIVITIES
Purchases of equipment, net - (67,165) - -
Sale of businesses, net - - - -
----------- ----------- ----------- ----------
Net cash provided (used) by investing activities - (67,165) - -
FINANCING ACTIVITIES
Proceeds from long-term borrowings - (206,859) - -
Payments on long-term borrowings - - - -
Intercompany long-term borrowings 620,741 - 170,249 (803,179)
Proceeds from sale of common stock - - - (972)
----------- ----------- ----------- ----------
Net cash provided (used) by financing activities 620,741 (206,859) 170,249 (804,151)
Cash flows from discontinued operations - - - -
Effect of exchange rate changes on cash - 44,462 (1,249) -
----------- ----------- ----------- ----------
Increase (decrease) in cash 149,806 89,016 (2,890) 1,129
Cash at beginning of period 1,690,260 754,679 (23,443) 7,790
----------- ----------- ----------- ----------
Cash at end of period $ 1,840,066 $ 843,695 $ (26,333) $ 8,919
=========== =========== =========== ==========
ok (0) (0) ok
Waterlink Eliminations
Holdings & Other Total
--------- ------------ -----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ - $ - $ 278,766
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization - - 711,150
Deferred income taxes - - 24,628
Other - - -
Changes in working capital:
Accounts receivable - - (182,005)
Intercompany receivables - 1,742,084 -
Inventories - - 350,414
Costs in excess of xxxxxxxx - - (325,512)
Prepaids and other assets - - (569,559)
Accounts payable - - 1,469,799
Intercompany payables - (1,753,012) -
Accrued expenses - - (773,577)
Xxxxxxxx in excess of cost - - (571,874)
Accrued income taxes - - 57,873
--------- ------------ -----------
Net cash provided (used) by operating activities - (10,928) 470,105
INVESTING ACTIVITIES
Purchases of equipment, net - - (67,165)
Sale of businesses, net - - -
--------- ------------ -----------
Net cash provided (used) by investing activities - - (67,165)
FINANCING ACTIVITIES
Proceeds from long-term borrowings - - (206,859)
Payments on long-term borrowings - - -
Intercompany long-term borrowings - 12,189 -
Proceeds from sale of common stock - 972 -
--------- ------------ -----------
Net cash provided (used) by financing activities - 13,161 (206,859)
Cash flows from discontinued operations - (972) (972)
Effect of exchange rate changes on cash - (1,261) 41,952
--------- ------------ -----------
Increase (decrease) in cash - - 237,061
Cash at beginning of period - - 2,429,286
--------- ------------ -----------
Cash at end of period $ - $ - $ 2,666,347
========= ============ ===========
ok ok ok
52
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
PRIOR MONTH YEAR TO DATE
YTD exchange rate
Xxxxxxxx Sutcliffe UK Holding Waterlink
Sutcliffe Xxxxxxxx Company Management
----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 671,895 $ 1,096,581 $ (601,674) $ (827,849)
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization 492,250 314,498 - 267,683
Deferred income taxes - 295,003 - -
Other - - - -
Changes in working capital:
Accounts receivable (1,637,412) 106,154 - -
Intercompany receivables 2,965 (2,035,257) - (363,333)
Inventories 496,192 183,842 - -
Costs in excess of xxxxxxxx 1,110,016 (142,973) - -
Prepaids and other assets 100,057 147,879 (560) (152,326)
Accounts payable (90,067) (1,831,377) - (31,016)
Intercompany payables 405,222 (3,889) 1,993,495 -
Accrued expenses 519,538 15,447 (14,276) (177,237)
Xxxxxxxx in excess of cost 1,127,832 46,337 - -
Accrued income taxes (43,694) 41,179 - -
----------- ----------- ----------- -----------
Net cash provided (used) by operating activities 3,154,794 (1,766,575) 1,376,986 (1,284,078)
INVESTING ACTIVITIES
Purchases of equipment, net (744,261) (403,015) - -
Sale of businesses, net - - - 250,000
----------- ----------- ----------- -----------
Net cash provided (used) by investing activities (744,261) (403,015) - 250,000
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 1,113,274 - -
Payments on long-term borrowings - - - (1,743,210)
Intercompany long-term borrowings (699,978) - (1,389,359) 2,090,881
Proceeds from sale of common stock - - - (80,849)
----------- ----------- ----------- -----------
Net cash provided (used) by financing activities (699,978) 1,113,274 (1,389,359) 266,822
Cash flows from discontinued operations - - -
Effect of exchange rate changes on cash - 24,707 81 -
----------- ----------- ----------- -----------
Increase (decrease) in cash 1,710,555 (1,031,609) (12,292) (767,256)
Cash at beginning of period (20,295) 1,786,288 (11,151) 775,046
----------- ----------- ----------- -----------
Cash at end of period $ 1,690,260 $ 754,679 $ (23,443) $ 7,790
=========== =========== =========== ===========
YTD exchange rate
Waterlink Eliminations
Holdings & Other Total
---------- ------------ -----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ - $ - $ 338,954
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization - 1,074,431
Deferred income taxes - 295,003
Other - -
Changes in working capital:
Accounts receivable - (1,531,258)
Intercompany receivables - 2,395,625 -
Inventories - 680,034
Costs in excess of xxxxxxxx - 967,043
Prepaids and other assets - 95,051
Accounts payable - (1,952,460)
Intercompany payables (54) (2,394,773) -
Accrued expenses - 343,473
Xxxxxxxx in excess of cost - 1,174,169
Accrued income taxes - (2,515)
---------- ------------ -----------
Net cash provided (used) by operating activities (54) 852 1,481,924
INVESTING ACTIVITIES
Purchases of equipment, net - (1,147,276)
Sale of businesses, net - 250,000
---------- ------------ -----------
Net cash provided (used) by investing activities - - (897,276)
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 1,113,274
Payments on long-term borrowings - (1,743,210)
Intercompany long-term borrowings - (1,544) -
Proceeds from sale of common stock 54 80,849 54
---------- ------------ -----------
Net cash provided (used) by financing activities 54 79,305 (629,882)
Cash flows from discontinued operations (80,849) (80,849)
Effect of exchange rate changes on cash - 692 25,480
---------- ------------ -----------
Increase (decrease) in cash - - (100,602)
Cash at beginning of period - - 2,529,888
---------- ------------ -----------
Cash at end of period $ - $ - $ 2,429,286
========== ============ ===========
53
WATERLINK, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
PRIOR QUARTER YEAR TO DATE
YTD exchange rate
Xxxxxxxx Sutcliffe UK Holding Waterlink
Sutcliffe Xxxxxxxx Company Management
----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ 254,680 $ 942,720 $ (601,833) $ (538,334)
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization 402,750 255,021 - 233,554
Deferred income taxes - 213,956 - -
Other - - - -
Changes in working capital:
Accounts receivable (1,375,675) 89,482 - -
Intercompany receivables (13,277) (2,004,362) - -
Inventories 1,048,424 48,985 - -
Costs in excess of xxxxxxxx 1,008,666 (1,627) - -
Prepaids and other assets 110,933 163,647 - (740,636)
Accounts payable 1,198 (1,252,424) - (33,728)
Intercompany payables 16,082 10,963 1,994,553 -
Accrued expenses (100,415) (79,872) (11,084) (202,384)
Xxxxxxxx in excess of cost 946,923 42,638 - -
Accrued income taxes (45,634) 40,244 - -
----------- ----------- ----------- -----------
Net cash provided (used) by operating activities 2,254,655 (1,530,629) 1,381,635 (1,281,528)
INVESTING ACTIVITIES
Purchases of equipment, net (713,463) (242,641) - -
Sale of businesses, net - - - 250,000
----------- ----------- ----------- -----------
Net cash provided (used) by investing activities (713,463) (242,641) - 250,000
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 838,416 - -
Payments on long-term borrowings - - - (1,743,210)
Intercompany long-term borrowings (699,978) - (1,390,096) 2,082,882
Proceeds from sale of common stock - - - (80,849)
----------- ----------- ----------- -----------
Net cash provided (used) by financing activities (699,978) 838,416 (1,390,096) 258,823
Cash flows from discontinued operations - - -
Effect of exchange rate changes on cash - 66,233 (915) -
----------- ----------- ----------- -----------
Increase (decrease) in cash 841,214 (868,622) (9,376) (772,705)
Cash at beginning of period (20,295) 1,786,288 (11,151) 775,046
----------- ----------- ----------- -----------
Cash at end of period $ 820,919 $ 917,666 $ (20,527) $ 2,341
=========== =========== =========== ===========
YTD exchange rate
Waterlink Eliminations
Holdings & Other Total
--------- ------------ -----------
OPERATING ACTIVITIES
Income (loss) from continuing operations $ - $ - $ 57,232
Adjustments to reconcile income (loss)
to cash provided (used) by operating activities:
Depreciation and amortization - 891,325
Deferred income taxes - 213,956
Other - -
Changes in working capital:
Accounts receivable - (1,286,193)
Intercompany receivables - 2,017,639 -
Inventories - 1,097,409
Costs in excess of xxxxxxxx - 1,007,039
Prepaids and other assets - (466,056)
Accounts payable - (1,284,954)
Intercompany payables (54) (2,021,543) -
Accrued expenses - (393,755)
Xxxxxxxx in excess of cost - 989,561
Accrued income taxes - (5,390)
--------- ------------ -----------
Net cash provided (used) by operating activities (54) (3,904) 820,174
INVESTING ACTIVITIES
Purchases of equipment, net - (956,104)
Sale of businesses, net - 250,000
--------- ------------ -----------
Net cash provided (used) by investing activities - - (706,104)
FINANCING ACTIVITIES
Proceeds from long-term borrowings - 838,416
Payments on long-term borrowings - (1,743,210)
Intercompany long-term borrowings - 7,192 -
Proceeds from sale of common stock 54 80,849 54
--------- ------------ -----------
Net cash provided (used) by financing activities 54 88,041 (904,740)
Cash flows from discontinued operations (80,849) (80,849)
Effect of exchange rate changes on cash - (3,288) 62,030
--------- ------------ -----------
Increase (decrease) in cash - - (809,489)
Cash at beginning of period - - 2,529,888
--------- ------------ -----------
Cash at end of period $ - $ - $ 1,720,399
========= ============ ===========
54
BALANCE SHEET DISCLOSURES AND DETAILS
WATERLINK, INC.
SEPTEMBER 30, 2003
A/R A/A
Allowance Goodwill Headcount
--------- --------- ---------
ALLOWANCES
Xxxxxxxx Xxxxxxxxx 261,176 15,795,939 175
Sutcliffe Xxxxxxxx 33,230 8,069,188 68
UK Holdings - - -
--------- ---------- ---------
Specialty Products Total 294,406 23,865,127 243
Waterlink Management - - 1
--------- ---------- ---------
Consolidated 294,406 23,865,127 244
========= ========== =========
Raw Mat'ls Work in Finished
& Supplies Process Goods Total
---------- --------- --------- ---------
INVENTORY DETAIL
Xxxxxxxx Xxxxxxxxx 2,917,482 1,560,702 3,348,810 7,826,994
Sutcliffe Xxxxxxxx 1,078,031 172,063 529,512 1,779,605
UK Holdings - - - -
---------- --------- --------- ---------
Specialty Products Total 3,995,513 1,732,765 3,878,322 9,606,599
Waterlink Management - - - -
---------- --------- --------- ---------
Consolidated 3,995,513 1,732,765 3,878,322 9,606,599
========== ========= ========= =========
ok
Land, Bldgs. Machinery Office
& Improve. & Equip. Equipment Total
----------- ----------- ----------- -----------
FIXED ASSET DETAIL
Xxxxxxxx Sutcliffe 1,226,258 4,500,690 356,195 6,083,143
Sutcliffe Xxxxxxxx 884,847 2,867,730 473,469 4,226,046
UK Holdings - - - -
----------- ----------- ----------- -----------
Specialty Products Total 2,111,105 7,368,420 829,664 10,309,189
Waterlink Management - - 12,532 12,532
----------- ----------- ----------- -----------
Consolidated 2,111,105 7,368,420 842,196 10,321,721
=========== =========== =========== ===========
ok
Xxxxxxxx Sutcliffe
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
CONTRACT BILLING STATUS
Contract costs incurred 8,215,539 5,432,456 13,647,995
Estimated profits 3,075,267 2,544,740 5,620,007
----------- ----------- -----------
Contract revenue earned 11,290,806 7,977,196 19,268,002
Less xxxxxxxx 11,250,278 7,689,488 18,939,766
----------- ----------- -----------
Net position 40,528 287,708 328,236
=========== =========== ===========
Costs in excess of xxxxxxxx 784,840 382,377 1,167,217
Xxxxxxxx in excess of costs (744,312) (94,668) (838,980)
----------- ----------- -----------
Net position 40,528 287,709 328,237
=========== =========== ===========
(0) (1) (1)
55
YEAR-TO-DATE BACKLOG PROGRESSION
WATERLINK, INC.
SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
TOTAL BACKLOG
Beginning of year backlog $12,851,533 $ 2,364,860 $15,216,393
Current bookings/change orders 45,920,168 18,602,982 64,523,150
Currency and other adjustments - 131,098 131,098
Revenue earned on backlog 47,847,492 19,010,465 66,857,957
----------- ----------- -----------
Ending backlog $10,924,209 $ 2,088,475 $13,012,684
=========== =========== ===========
Gross profit in backlog $ 2,216,658 $ 538,301 $ 2,754,959
=========== =========== ===========
Margin in backlog 20.3% 25.8% 21.2%
=========== =========== ===========
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
RECURRING REVENUE
Beginning of year backlog $10,778,533 $ 2,210,071 $12,988,604
Current bookings/change orders 40,715,083 16,773,974 57,489,057
Currency and other adjustments - 236,495 236,495
Revenue earned on backlog 43,815,317 17,334,341 61,149,658
----------- ----------- -----------
Ending backlog $ 7,678,299 $ 1,886,199 $ 9,564,498
=========== =========== ===========
Gross profit in backlog $ 1,497,268 $ 471,550 $ 1,968,818
=========== =========== ===========
Margin in backlog 19.5% 25.0% 20.6%
=========== =========== ===========
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
SYSTEMS AND EQUIPMENT
Beginning of year backlog $ 2,073,000 $ 154,789 $ 2,227,789
Current bookings/change orders 5,205,085 1,829,008 7,034,093
Currency and other adjustments - (105,398) (105,398)
Revenue earned on backlog 4,032,175 1,676,124 5,708,299
----------- ----------- -----------
Ending backlog $ 3,245,910 $ 202,276 $ 3,448,186
=========== =========== ===========
Gross profit in backlog $ 719,390 $ 66,751 $ 786,141
=========== =========== ===========
Margin in backlog 22.2% 33.0% 22.8%
=========== =========== ===========
56
QUARTER-TO-DATE BACKLOG PROGRESSION
WATERLINK, INC.
SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- ------------
TOTAL BACKLOG
Beginning of quarter backlog $13,929,975 $ 2,364,712 $ 16,294,687
Current bookings/change orders 10,502,906 4,957,060 15,459,966
Currency and other adjustments - (21,100) (21,100)
Revenue earned on backlog 13,508,672 5,212,196 18,720,868
----------- ----------- ------------
Ending backlog $10,924,209 $ 2,088,476 $ 13,012,685
=========== =========== ============
Gross profit in backlog $ 2,216,658 $ 538,301 $ 2,754,959
=========== =========== ============
Margin in backlog 20.3% 25.8% 21.2%
=========== =========== ============
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
RECURRING REVENUE
Beginning of quarter backlog $10,457,856 $ 1,596,833 $12,054,689
Current bookings/change orders 9,433,506 4,720,405 14,153,911
Currency and other adjustments - 231,658 231,658
Revenue earned on backlog 12,213,063 4,662,696 16,875,759
----------- ----------- -----------
Ending backlog $ 7,678,299 $ 1,886,200 $ 9,564,499
=========== =========== ===========
Gross profit in backlog $ 1,497,268 $ 471,550 $ 1,968,818
=========== =========== ===========
Margin in backlog 19.5% 25.0% 20.6%
=========== =========== ===========
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
SYSTEMS AND EQUIPMENT
Beginning of quarter backlog $ 3,472,119 $ 767,879 $ 4,239,998
Current bookings/change orders 1,069,400 236,655 1,306,055
Currency and other adjustments - (252,759) (252,759)
Revenue earned on backlog 1,295,609 549,500 1,845,109
----------- ----------- -----------
Ending backlog $ 3,245,910 $ 202,276 $ 3,448,186
=========== =========== ===========
Gross profit in backlog $ 719,390 $ 66,751 $ 786,141
=========== =========== ===========
Margin in backlog 22.2% 33.0% 22.8%
=========== =========== ===========
57
PREVIOUS QUARTER'S YTD BACKLOG PROGRESSION
WATERLINK, INC.
SEPTEMBER 30, 2003
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
TOTAL BACKLOG
Beginning of year backlog $12,851,533 $ 2,364,860 $15,216,393
Current bookings/change orders 35,417,262 13,645,922 49,063,184
Currency and other adjustments - 152,198 152,198
Revenue earned on backlog 34,338,820 13,798,269 48,137,089
----------- ----------- -----------
Ending backlog $13,929,975 $ 2,364,711 $16,294,686
=========== =========== ===========
Gross profit in backlog $ - $ - $ -
=========== =========== ===========
Margin in backlog 0.0% 0.0% 0.0%
=========== =========== ===========
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
RECURRING REVENUE
Beginning of year backlog $10,778,533 $ 2,210,071 $12,988,604
Current bookings/change orders 31,281,577 12,053,569 43,335,146
Currency and other adjustments - 4,837 4,837
Revenue earned on backlog 31,602,254 12,671,645 44,273,899
----------- ----------- -----------
Ending backlog $10,457,856 $ 1,596,832 $12,054,688
=========== =========== ===========
Gross profit in backlog $ - $ - $ -
=========== =========== ===========
Margin in backlog 0.0% 0.0% 0.0%
=========== =========== ===========
Xxxxxxxx Xxxxxxxxx
Sutcliffe Xxxxxxxx Total
----------- ----------- -----------
SYSTEMS AND EQUIPMENT
Beginning of year backlog $ 2,073,000 $ 154,789 $ 2,227,789
Current bookings/change orders 4,135,685 1,592,353 5,728,038
Currency and other adjustments - 147,361 147,361
Revenue earned on backlog 2,736,566 1,126,624 3,863,190
----------- ----------- -----------
Ending backlog $ 3,472,119 $ 767,879 $ 4,239,998
=========== =========== ===========
Gross profit in backlog $ -
=========== =========== ===========
Margin in backlog 0.0% 0.0% 0.0%
=========== =========== ===========
58
GEOGRAPHIC SALES BREAKDOWN
WATERLINK, INC.
TWELVE MONTHS ENDED SEPTEMBER 30, 2003
Industrial Municipal Total
Sales % Sales % Sales %
----------- ----- ------------ ----- ----------- -----
United States $39,794,931 61.8% $ 2,449,315 100.0% $42,244,246 63.2%
Canada 3,830,935 5.9% - 0.0% 3,830,935 5.7%
Europe 15,165,119 23.5% - 0.0% 15,165,119 22.7%
Latin America 674,140 1.0% - 0.0% 674,140 1.0%
Asia Pacific 3,810,600 5.9% - 0.0% 3,810,600 5.7%
Middle East 1,132,916 1.8% - 0.0% 1,132,916 1.7%
Other Regions - 0.0% - 0.0% - 0.0%
----------- ----- ------------ ----- ----------- -----
$64,408,642 100.0% $ 2,449,315 100.0% $66,857,957 100.0%
=========== ===== ============ ===== =========== =====
ok
----------- ------------ -----------
96.3% 3.7% 100.0%
----------- ------------ -----------
59
BUDGET VARIANCE SUMMARY
WATERLINK, INC.
SEPTEMBER 30, 2003
Month Ended September 30, 2003 Twelve Months Ended September 30, 2003
----------------------------------- ---------------------------------------
Actual Plan Variance Actual Plan Variance
--------- --------- -------- ---------- ---------- ----------
Sales:
Xxxxxxxx Xxxxxxxxx 5,147,658 4,870,000 277,658 47,910,669 51,000,000 (3,089,331)
Sutcliffe Xxxxxxxx 1,950,419 1,512,000 438,419 19,368,509 18,400,000 968,509
Corporate/Elim (17,365) - (17,365) (421,221) - (421,221)
--------- --------- -------- ---------- ---------- ----------
Total 7,080,712 6,382,000 698,712 66,857,957 69,400,000 (2,542,043)
--------- --------- -------- ---------- ---------- ----------
Gross profit:
Xxxxxxxx Xxxxxxxxx 1,418,455 1,196,000 222,455 10,638,032 11,460,000 (821,968)
Sutcliffe Xxxxxxxx 527,228 330,000 197,228 4,815,126 4,208,000 607,126
Corporate/Elim - - - - - -
--------- --------- -------- ---------- ---------- ----------
Total 1,945,683 1,526,000 419,683 15,453,158 15,668,000 (214,842)
--------- --------- -------- ---------- ---------- ----------
SG&A expense:
Xxxxxxxx Sutcliffe 431,507 530,000 98,493 5,921,513 6,360,000 438,487
Sutcliffe Xxxxxxxx 643,257 245,000 (398,257) 3,514,108 2,908,000 (606,108)
Corporate 91,072 85,000 (6,072) 1,153,970 900,000 (253,970)
--------- --------- -------- ---------- ---------- ----------
Total 1,165,836 860,000 (305,836) 10,589,591 10,168,000 (421,591)
--------- --------- -------- ---------- ---------- ----------
Operating income:
Xxxxxxxx Sutcliffe 986,948 666,000 320,948 4,716,519 5,100,000 (383,481)
Sutcliffe Xxxxxxxx (116,029) 85,000 (201,029) 1,301,018 1,300,000 1,018
Corporate (91,072) (85,000) (6,072) (1,153,970) (900,000) (253,970)
--------- --------- -------- ---------- ---------- ----------
Total 779,847 666,000 113,847 4,863,567 5,500,000 (636,433)
Interest expense (15,373) (288,000) 272,627 (2,507,747) (3,512,000) 1,004,253
Other items (390,827) (15,000) (375,827) (1,313,218) (180,000) (1,133,218)
--------- --------- -------- ---------- ---------- ----------
Income before taxes 373,647 363,000 10,647 1,042,602 1,808,000 (765,398)
Income taxes 94,881 62,000 (32,881) 424,883 361,000 (63,883)
--------- --------- -------- ---------- ---------- ----------
Net income 278,766 301,000 (22,234) 617,719 1,447,000 (829,281)
========= ========= ======== ========== ========== ==========
ok ok ok ok
Month Ended September 30, 2003 Twelve Months Ended September 30, 2003
----------------------------------- ---------------------------------------
Actual Plan Variance Actual Plan Variance
--------- --------- -------- ---------- ---------- ----------
EBITDA:
Xxxxxxxx Sutcliffe 1,095,234 717,000 378,234 5,317,055 5,676,000 (358,945)
Sutcliffe Xxxxxxxx 273,243 117,000 156,243 2,198,220 1,660,000 538,220
Corporate (87,788) (86,000) (1,788) (1,148,618) (900,000) (248,618)
--------- --------- -------- ---------- ---------- ----------
Total 1,280,689 748,000 532,689 6,366,657 6,436,000 (69,343)
========= ========= ======== ========== ========== ==========
ok ok ok ok
60
SCHEDULE 6.7
REAL PROPERTY
The real property described on the attached Exhibit A to Schedule 6.7.
61
EXHIBIT "A"
PARCEL ONE - TRACT ONE
Situated in the State of Ohio, County of Franklin, City of Columbus, being
located in Quarter Xxxxxxxx 0, Xxxxxxxx 0, Xxxxx 00, Xxxxxx Xxxxxx Military
Lands and being those tracts of land conveyed to Barnaby & Sutcliffe Corp.
(formerly Xxxxxxx Xxxxxx Co.) by deeds of record in Deed Book 2247, Page 380,
Deed Book 1852, Page 582, Deed Book 1852, Page 586, Deed Book 1853, Page 282,
Deed Book 1852, Page 579, Deed Book 1852, Page 580, Deed Book 1852, Page 597,
Deed Book 2387, Page 201 and Deed Book 2479, Page 116, all references being to
records in the Recorder's Office, Franklin County, Ohio and bounded and
described as follows:
Beginning at a point in the centerline of Xxxxxxx Avenue at the
intersection of said centerline with the northerly right-of-way line of Conrail
Railroad, said point also being the southeasterly corner of the Barnaby &
Sutcliffe Corp. 3.09 acre tract;
thence North 86 (degrees) 10' 00" West, along said right-of-way line of
Conrail Railroad, a distance of 20.11 feet to an iron pin at an angle point in
said line;
thence South 9 (degrees) 30' 45" West, continuing along said right-of-way
line of Conrail Railroad, a distance of 6.12 feet to an angle point in said
line;
thence North 86 (degrees) 10' 00" West, along said right-of-way line, a
distance of 103.02 feet to a point of curvature of a curve to the left;
thence continuing along said right-of-way line, being the arc of said curve
(Delta = 11 (degrees) 00' 40", Radius = 3198.23 feet), a chord bearing and
distance of South 88 (degrees) 19' 40" West, 613.71 feet to a point of tangency;
thence South 82 (degrees) 40' 40" West, continuing along said right-of-way
line, a distance of 245.72 feet to an angle point in said line;
thence South 84 (degrees) 51' 30" West, continuing along said right-of-way
line, a distance of 100.00 feet to an angle point in said line;
thence North 84 (degrees) 49' 55" West, continuing along said right-of-way
line, a distance of 683.84 feet to a point in Alum Creek;
thence North 5 (degrees) 10' 35" East, along a line in Alum Creek, a
distance of 97.64 feet to a point;
Continued....
62
Page 3 of 11
-Page Two-
thence South 86(degrees) 23' 10" East, along the southerly line of those
tracts of land conveyed to The Lutheran Senior City, Inc., by deed of record in
Deed Book 2433, Page 28, a distance of 681.38 feet to an iron pin at the
southeasterly corner of said tracts;
thence along the easterly line of said Lutheran Senior City, Inc. tracts,
the following courses and distances:
North 3(degrees) 50' 00" East, 184.45 feet to a point;
North 4(degrees) 04' 00" West, 87.50 feet to a point;
North 3(degrees) 50' 00" East, 204.00 feet to a point;
North 10(degrees) 10' 10" East, 109.00 feet to a point; and
North 3(degrees) 50' 00" East, 295.00 feet to the southwesterly corner of
The Lutheran Senior City, Inc. 0.092 acre tract;
thence North 55(degrees) 10' 00" East, along the southeasterly line of
said 0.092 acre tract, a distance of 128.08 feet to a point in a southerly line
of The Lutheran Senior City, Inc. tracts;
thence along said southerly line of The Lutheran Senior City, Inc. tracts,
the following courses and distances:
South 86(degrees) 10' 55" East, 218.44 feet to a point;
North 3(degrees) 46' 49" East, 79.58 feet to a point;
South 76(degrees) 10' 55" East, 691.32 feet to a point of curvature of a
curve to the right;
South 61(degrees) 10' 55" East, 7.76 feet, a chord bearing and distance
(Delta = 30(degrees) 00' 00", Radius = 15.00 feet), to a point;
South 46(degrees) 10' 55" East, 11.50 feet to a point of curvature of a
curve to the left;
South 61(degrees) 10' 55" East, 7.76 feet, a chord bearing and distance
(Delta = 30(degrees) 00' 00", Radius = 15.00 feet), to a point;
Continued...
63
Page 4 of 11
- Page Three -
South 76(degrees) 10' 55" East, 100.00 feet to a point of curvature of a
curve to the right;
South 43(degrees) 19' 58" East, 32.55 feet, a chord bearing and distance
(Delta = 65(degrees) 41' 55", Radius = 30.00 feet), to a point; and
South 10(degrees) 29' 00" East, 43.03 feet to a point in the centerline of
Xxxxxxx Avenue;
thence South 9(degrees) 30' 45" West, along said centerline of Xxxxxxx
Avenue, a distance of 158.06 feet to the northeasterly corner of the 1.197 acre
tract conveyed to Xxxxxx X. Xxxxxxxx, by deed of record in Deed Book 3394, Page
542;
thence North 86(degrees) 09' 15" West, along the northerly line of said
Xxxxxx X. Xxxxxxxx 1.197 acre tract, a distance of 289.96 feet to an angle point
in said line;
thence North 86(degrees) 24' 15" West, continuing along said northerly line
of the 1.197 acre tract, a distance of 100.00 feet to the northwesterly corner
of said tract;
thence South 3(degrees) 35' 45" West, along the westerly line of said 1.197
acre tract, a distance of 136.65 feet to an iron pin at the southwesterly corner
of said tract;
thence South 86(degrees) 24' 15" East, along the southerly line of said
1.197 acre tract, passing an iron pin at 355.82 feet, a distance of 375.93 feet
to a point in the centerline of Xxxxxxx Avenue;
thence South 9(degrees) 30' 45" West, along the centerline of Xxxxxxx
Avenue, a distance of 521.02 feet to the point of beginning, containing 26.035
acres, more or less.
Bearings contained herein are based on the same meridian as bearings in
deed of record in Deed Book 1852, Page 579.
64
Page 5 of 11
PARCEL ONE -- TRACT TWO
Situated in the State of Ohio, County of Franklin, City of Columbus, being
located in Quarter Xxxxxxxx 0, Xxxxxxxx 0, Xxxxx 00, Xxxxxx Xxxxxx Military
Lands and being Lots 33 and 34 of "BEXLEY VIEW NO. 3", of record in Plat Book
17, Page 58 and part of a vacated Alley as conveyed to Barneby & Sutcliffe Corp.
(formerly Barneby Xxxxxx), by deed of record in Deed Book 1852, Page 584, all
references being to records in the Recorder's Office, Franklin County, Ohio and
bounded and described as follows:
Beginning at the point of intersection of the westerly right-of-way line
of Xxxxxxx Avenue (60 feet in width) with the southerly right-of-way line of
Conrail Railroad, said point also being the northeasterly corner of Lot 33;
thence South 9 (degrees) 13' 50" West, along the westerly right-of-way
line of Xxxxxxx Avenue, a distance of 84.51 feet to an iron pin at the
northeasterly corner of Lot 35;
thence North 86 (degrees) 16' 40" West, along the northerly line of Lot 35
and said line produced westerly, a distance of 143.96 feet to an iron pin in
the centerline of an Alley (vacated);
thence North 9 (degrees) 15' 00" East, along said centerline of the Alley,
a distance of 82.31 feet to an iron pin in the southerly right-of-way line of
Conrail Railroad;
thence South 87 (degrees) 09' 00" East, along said right-of-way line of
Conrail Railroad, a distance of 144.16 feet to the point of beginning,
containing 0.274 acre, more or less.
Bearings contained herein are based on the same meridian as bearings in
deed of record in Deed Book 1852, Page 584.
65
Page 6 of 11
PARCEL ONE - TRACT THREE
Situated in the State of Ohio, County of Franklin, City of Columbus, being
located in Quarter Xxxxxxxx 0, Xxxxxxxx 0, Xxxxx 00, Xxxxxx Xxxxxx Military
Lands and being Lots 25 and 26 of "BEXLEY VIEW NO. 3", of record in Plat Book
17, Page 58 and part of Seventh Avenue (vacated) and Xxxxxx Avenue (vacated), as
conveyed to Barneby & Sutcliffe Corp. (formerly Barneby Xxxxxx), by deed of
record in Deed Book 1852, Page 584, all references being to records in the
Recorder's Office, Franklin County, Ohio and bounded and described as follows:
Beginning at an iron pin in the easterly right-of-way line of an Alley at
the southwesterly corner of Lot 25, the northwesterly corner of Lot 24;
thence North 4 (degrees) 52' 10" East, along said easterly right-of-way
line of the Alley, a distance of 117.51 feet to a point in the southerly
right-of-way line of the Conrail Railroad;
thence North 84 (degrees) 02' 30" East, along said right-of-way line of
Conrail Railroad, a distance of 121.06 feet to an angle point in said line;
thence South 87 (degrees) 09' 00" East, continuing along said right-of-way
line of Conrail Railroad, a distance of 25.00 feet to a point in the centerline
of Xxxxxx Avenue (50 feet in width);
thence South 4 (degrees) 52' 10" West, along said centerline of Xxxxxx
Avenue (vacated), a distance of 141.00 feet to an iron pin;
thence North 85 (degrees) 11' 00" West, crossing Xxxxxx Avenue (vacated)
and along the northerly line of Lot 24, a distance of 143.89 feet to the point
of beginning, containing 0.432 acre, more or less.
Bearings contained herein are based on the same meridian as bearings in
deed of record in Deed Book 1852, Page 584.
66
Page 7 of 11
PARCEL ONE - TRACT FOUR
Situated in the State of Ohio, County of Franklin and City of Columbus:
Being Lot Number Twenty (20) of NORTH BEXLEY VIEW ADDITION as the same is
numbered and delineated on the recorded plat thereof, of record in Plat Book 17,
pages 4 and 5, Recorder's Office, Franklin County, Ohio's said Lot having been
now re-subdivided and forms a part of Lot 4, in High Bank Addition, as shown on
Plat Book No. 17, page 280, Recorder's Office, Franklin County, Ohio.
67
Page 8 of 11
PARCEL TWO - TRACT ONE
DESCRIPTION OF A 1.485 ACRE TRACT
NORTH OF FIFTH AVENUE
WEST OF XXXXXXX AVENUE
TRACT 1
Situated in the State of Ohio, County of Franklin, City of Columbus, being
a part of Quarter Township Xx. 0, Xxxxxxxx Xx. 0, Xxxxx 00, Xxxxxx Xxxxxx
Military Lands and being 1.485 acres out of Wye Transportation Company in
Official Record Volume 4108 E12 (all references to deeds and plats being to
records in the Recorder's Office, Franklin County, Ohio) and being more fully
described as follows:
Beginning at an iron pin set at the northwest corner of North Xxxxxx View
Addition (P.B. 17, Pg. 4) a southerly line of said Wye Transportation Company;
Thence North 1(degree)05'06" West a distance of 25.36 feet along the
easterly line of Renite Company (D.B. 3702, Pg. 665), the southerly line of said
Wye Transportation Company to an iron pin set;
Thence along a curve to the right (delta=9(degrees)36'36", radius=1457.68
feet) a chord bearing South 88(degrees)29'19" West a distance of 244.21 feet,
along the northerly line of said Renite, to an iron pin set;
Thence North 88(degrees)42'23" West a distance of 205.00 feet along the
northerly line of said Renite to an iron pin set;
Thence South 1(degree)17'37" West a distance of 25.00 feet along the
westerly line of said Renite to an iron pin set;
Thence North 88(degrees)42'23" West a distance of 200.53 feet along the
northerly line of Renite Company (D.B. 2920, Pg. 587), the southerly line of
said Wye Transportation Company to a point in the centerline of Alum Creek;
Thence North 1(degree)17'37" East a distance of 93.63 feet along the
centerline of said Alum Creek to a point;
Thence South 88(degrees)43'45" East a distance of 670.79 feet, along the
northerly line of said Wye Transportation Company the southerly line of Xxxxxxxx
Xxxxxx Co. (D.B. 2247, Pg. 380), to an iron pin set;
Thence North 81(degrees)01'30" East a distance of 100.00 feet, along the
northerly line of said Wye Transportation Co., the southerly line of Xxxxxxxx
Xxxxxx Co. (D.B. 2479, Pg. 116) to an iron pin set;
Thence North 78(degrees)50'40" East a distance of 186.91 feet, along the
northerly line of said Wye Transportation Co., the southerly line of said
Xxxxxxxx Xxxxxx Co., to an iron pin set;
68
Page 9 of 11
Thence South 1(degree) 05'06" East a distance of 45.55 feet along the
easterly line of said Wye Transportation Co., to an iron pin set on the
southerly line of said Wye Transportation Co.;
Thence South 76(degrees) 57'59" West a distance of 117.37 feet along the
southerly line of said Wye Transportation Co., the northerly line of said North
Bexley View Addition to an iron pin set;
Thence South 74(degrees) 29'35" West a distance of 198.41 feet to the Point
of Beginning containing 1.485 acres more or less according to an actual field
survey made by Hockaden and Associates, Inc. in June of 1997.
HOCKADEN AND ASSOCIATES, INC.
Consulting Engineers
[STATE OF OHIO]
[SURVEYOR SEAL] /s/ Xxxxx X. Xxxx 10 Sept 97
-----------------------------------
Xxxxx X. Xxxx
Professional Surveyor No. 6615
40803091097F1
69
PARCEL TWO - TRACT TWO
DESCRIPTION OF A 0.923 ACRE TRACT
NORTH OF FIFTH AVENUE
WEST OF XXXXXXX AVENUE
TRACT 2
Situated in the State of Ohio, County of Franklin, City of Columbus, being
a part of Quarter Township Xx. 0, Xxxxxxxx Xx. 0, Xxxxx 00, Xxxxxx Xxxxxx
Military Lands, and being 0.923 acres out of that 9.697 acre tract as described
in a deed to Xxxxxxx Transportation Co. in Official Record Volume 3465 H09, (all
references to deeds and plats being to records in the Recorder's Office,
Franklin County, Ohio) and being more fully described as follows:
Beginning at a point on the easterly right of way line of said Xxxxxxx
Avenue with the centerline of a railroad;
Thence South 04(degrees)50'02" West a distance of 38.48 feet along the
easterly right of way line of said Xxxxxxx Avenue to a point;
Thence North 90(degrees)00'00" West a distance of 204.01 feet along the
northerly line of North Bexley View Addition No. 3 (P.B. 17, Pg. 58), the
southerly line of said Xxxxxxx Transportation Co. to an existing iron pin;
Thence South 89(degrees)01'00" West a distance of 307.55 feet along the
northerly line of said North Bexley View Addition No. 3, the southerly line of
said Xxxxxxx Transportation to an existing iron pin;
Thence South 80(degrees)12'30" West a distance of 259.04 feet along the
northerly line of North Bexley View Addition (P.B. 17, Page 4), the southerly
line of said Xxxxxxx Transportation to an iron pin set;
Thence South 76(degrees)57'59" West a distance of 51.11 feet along the
southerly line of said Xxxxxxx Transportation Co., the northerly line of said
North Bexley View Addition to an iron pin set;
Thence North 01(degrees)05'06" West a distance of 45.55 feet along the
westerly line of said Xxxxxxx Transportation Co., the easterly line of Caprail
Railroad (O.R.V. 19163 E09) to an iron pin set;
Thence North 78(degrees)50'40" East a distance of 50.85 feet along the
northerly line of said Xxxxxxx Transportation Co. the southerly line of said
Xxxxxxxx Xxxxxx Co. to an iron pin set;
Thence along a curve to the right (radius=3197.77 feet, delta=
11(degrees)09'20") a chord bearing North 84(degrees)25'20" East a distance of
621.63 feet along the northerly line of said Xxxxxxx Transportation Co. the
southerly line of said Xxxxxxxx Xxxxxx to an iron pin set;
70
Page 11 of 11
Thence North 90 (degrees) 00'00" East a distance of 103.02 feet along the
northerly line of said Xxxxxxx Transportation Co., the southerly line of said
Xxxxxxxx Xxxxxx Co. (D.B. 1852, Pg. 582, and D.B. 1852, Pg. 586) to an existing
iron pin;
Thence North 09 (degrees) 23'28" East a distance of 5.50 feet to an
existing iron pin;
Thence South 90 (degrees) 00'00" East a distance of 50.05 feet to a point
on the easterly right of way line of said Xxxxxxx Avenue;
Thence South 04 (degrees) 50'02" West a distance of 22.08 feet along the
easterly right of way line of said Xxxxxxx Avenue to the Point of Beginning
containing 0.923 acres more or less according to an actual field survey of the
premises made by Hockaden and Associates, Inc. in June of 1997.
HOCKADEN AND ASSOCIATES, INC.
Consulting Engineers
/s/ Xxxxx X. Xxxx
-----------------------------
Xxxxx X. Xxxx
Professional Surveyor No. 6615
40803de.ng1
71
SCHEDULE 7.4
SHARE CAPITAL AND OWNERSHIP (OF WATERLINK UK AND SUBSIDIARY)
That certain Pledge Agreement between Waterlink, Inc. and Bank of America
Illinois (now know as Bank of America, N.A.) as Collateral Agent, dated as of
June 27, 1997, as amended
72
