<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
----------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-17575
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CHEMPOWER, INC.
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(Exact name of registrant as specified in its charter)
OHIO 34-1481970
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
807 EAST TURKEYFOOT LAKE ROAD, AKRON, OHIO 44319
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 896-4202
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NOT APPLICABLE
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Former name, former address and former fiscal year, if changed
since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class Outstanding August 1, 1995
-------------------------------- ------------------------------------
Common Stock, $.10 Par Value 7,226,563 shares
<PAGE> 2
<TABLE>
CHEMPOWER, INC.
INDEX
<CAPTION>
PART I. FINANCIAL INFORMATION Page Number
----------------------------- -----------
<S> <C>
Item 1. Financial Statements
Condensed balance sheets--June 30, 1995
and December 31, 1994......................... 3
Condensed statements of income--Three and
six months ended June 30, 1995 and 1994....... 4
Condensed statements of cash flows--Six
months ended June 30, 1995 and 1994........... 5
Notes to condensed financial statements--
June 30, 1995................................. 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
operations.................................... 8-9
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.............. 10
SIGNATURES................................................ 11
</TABLE>
<PAGE> 3
<TABLE>
PART I. FINANCIAL INFORMATION
-----------------------------
CHEMPOWER, INC.
CONDENSED BALANCE SHEETS
<CAPTION>
June 30 December 31
1995 1994
------------ ------------
(Unaudited)
ASSETS (Dollars in thousands)
<S> <C> <C>
CURRENT ISSETS
Cash and cash equivalents $ 11,899 $ 11,864
Trade receivables, less allowances 21,107 18,895
Contracts in Progress 4,477 925
Inventories 4,396 3,867
Other current assets 604 471
------------ ------------
TOTAL CURRENT ASSETS 42,483 36,022
PROPERTY, PLANT &.EQUIPMENT, at cost 13,065 12,417
Less: accumulated depreciation 6,215 5,890
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NET PROPERTY, PLANT & EQUIPMENT 6,850 6,527
INTANGIBLE ASSETS 589 596
OTHER ASSETS 1,041 1,037
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$ 50,963 $ 44,182
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables $ 4,874 $ 3,125
Contracts in progress 2,185 1,120
Payroll related accruals 6,225 5,310
Other current liabilities 1,658 572
------------ ------------
TOTAL CURRENT LIABILITIES 14,942 10,127
DEFERRED INCOME TAXES 73 243
EXCESS OF NET ASSETS ACQUIRED OVER COST 828 220
SHAREHOLDERS' EQUITY
Common stock--par value $.IO per share:
Authorized--15,000,000 shares
Issued--7,417,571 shares at June 30;
7,412,571 shares at December 31 742 741
Additional paid-in capital 19,475 19,463
Retained earnings 15,513 14,218
Treasury stock, at cost, 191,008 shares
at June 30; 103,317 shares at
December 31 (610) (410)
Common Stock Subject to Repurchase -- (420)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 35,120 33,592
------------ ------------
50,963 44,182
============ ============
<FN>
See Notes To Condensed Financial Statements
</TABLE>
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<PAGE> 4
<TABLE>
CHEMPOWER, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------- ---------------------
1995 1994 1995 1994
-------- -------- -------- --------
(Dollars in thousands, except share data)
<S> <C> <C> <C> <C>
Revenues......................... $ 20,227 $ 18,572 $ 39,266 $ 27,851
Cost of revenues................. 15,952 15,310 32,640 23,104
-------- -------- -------- --------
Gross profit................ 4,275 3,262 6,626 4,747
Selling, general and adminis-
trative expenses............... 2,674 1,887 4,758 3,435
-------- -------- -------- --------
Operating income............ 1,601 1,375 1,868 1,312
Financial income................. 118 84 254 180
-------- -------- -------- --------
Income before taxes......... 1,719 1,459 2,122 1,492
Income taxes..................... 685 582 826 565
-------- -------- -------- --------
Net income.................. $ 1,034 $ 877 $ 1,296 $ 927
======== ======== ======== ========
Net income per Common Share...... $ .14 $.12 $.18 $.13
======== ======== ======== ========
Weighted average number
of shares outstanding.......... 7,314,021 7,425,977 7,346,458 7,388,449
========= ========= ========= =========
<FN>
See Notes to Condensed Financial Statements
</TABLE>
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<TABLE>
CHEMPOWER, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
Six Months Ended
June 30
----------------------
1995 1994
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(Dollars in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES............................ $ 5,727 $ 2,604
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment 9 --
Purchase of property, plant and equipment (970) (379)
Acquisition of businesses, net of working
capital acquired....................................... (4,543) (2,424)
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Net cash provided by (used for) investing
activities........................................ (5,504) (2,803)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock.................... 12 83
Purchase of treasury stock................................ (200) (200)
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Net cash used for financing activities............. (188) (117)
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Net increase in cash and cash equivalents.......... 35 (316)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............... 11,864 13,117
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CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................... $ 11,899 $ 12,801
========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURE
Income taxes paid (net of refunds)........................ $ 250 $ 928
========= =========
SUPPLEMENTAL NONCASH FINANCING ACTIVITIES
Portion of acquisition of business purchased
with common stock...................................... -- $ 375
========= =========
<FN>
See Notes To Condensed Financial Statements
</TABLE>
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<PAGE> 6
CHEMPOWER, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of
management, the financial statements reflect all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation. Operating results for the six month
period ended June 30, 1995 are not necessarily indicative of
the results that may be expected for the entire year of 1995.
For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report and
Form 10-K as of December 31, 1994.
NOTE B--ACQUISITION
On May 3, 1995, the Company through its wholly-owned subsidiaries,
Southwick Corp. and Brookfield Corp., purchased all of the issued and
outstanding partnership units of Controlled Power Limited Partnership
("CPC"). CPC is in the business of designing, manufacturing and selling
electrical metalclad switchgear, power distribution systems, bus duct
systems and replacement parts for mass transit authorities, utilities,
and chemical and other industrial facilities throughout the country.
Through the purchase of the partnership units, the subsidiaries took
control of CPC's inventory, accounts receivable, patents, real estate,
plant and equipment. Pursuant to the terms of the Purchase Agreement, the
subsidiaries made a cash payment of $4,900,000 at closing.
Pro forma consolidated information assuming ownership of CPC as of
January 1, 1994 is as follows:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30 June 30
1995 1994 1995 1994
------- ------- ------- -------
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues................. $47,198 $47,174 $21,763 $27,513
Net Income (Loss)........ (16) (2,554) 660 (1,073)
Net Income (Loss)
per Common Share...... $ .00 $ (.35) $ .09 $ (.14)
</TABLE>
The pro forma information does not purport to be indicative of results
which would actually have been obtained if the combination had been in
effect for the periods indicated or which may be obtained in the
future.
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<PAGE> 7
CHEMPOWER, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)
June 30, 1995
NOTE C--CONTRACTS IN PROGRESS
Comparative information for fixed-price contracts in progress
as of June 30, 1995 and December 31, 1994 is as follows:
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
--------------- -------------
(Dollars in thousands)
<S> <C> <C>
Costs incurred on uncompleted
contracts.............................. $ 65,247 $ 19,559
Estimated earnings....................... 2,330 2,092
Estimated losses......................... -- (3,314)
--------------- -------------
67,577 18,337
Less billings to date 65,285 18,532
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$ 2,292 $ (195)
=============== =============
Included in the accompanying
balance sheets under contracts
in progress:
Costs and estimated earnings in
excess of related billings on
uncompleted contracts...................$ 4,477 $ 925
Billings in excess of related
costs and estimated earnings
on uncompleted contracts and
provision for estimated losses
on contracts............................. (2,185) (1,120)
--------------- -------------
$ 2,292 $ (195)
=============== =============
</TABLE>
NOTE D--CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a
maturity of 90 days or less when purchased to be cash
equivalents. Cash equivalents consist primarily of money
market securities.
NOTE E--NET INCOME PER COMMON SHARE
The net income per common share amounts have been computed by
dividing net income by the weighted average number of shares
(common and common equivalent) outstanding. For purposes of
this computation, stock options are common equivalent shares.
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Current three months compared to the same period last year:
Revenues for the thirteen week period ended June 30, 1995 were
$20,227,000, an 8.9% increase from last year's second quarter
$18,572,000. The increase in revenues occurred in the products
manufacturing and distribution segment, more than offsetting the
decrease in the contract segment.
Contract revenues decreased 13% from $14,809,000 to $12,892,000
in 1995. These revenues represented 63.7% of total revenues for
the second quarter of 1995, compared to 79.7% for the correspon-
ing period of 1994. This segment's revenues declined due to an
overall decrease in the number of available outages.
Revenues from products manufacturing and distribution increased
to $7,335,000 from the $3,762,000 in the second quarter of 1994.
These revenues represented 36.3% of total revenues, compared to
20.3% for the same period in 1994. The increase was primarily
due to the inclusion of revenues from the recently acquired
Controlled Power Limited Partnership ("CPC").
Cost of contract revenues was 80.1% of contract revenues during
the second quarter of 1995 versus 82.9% in 1994. Cost of
products manufacturing and distribution revenues were 76.8% of
products manufacturing and distribution revenues in 1995 versus
80.6% in 1994. The improvement was due to the addition of the
CPC operations and higher margins experienced by our Owens
Precision Fabricators division.
Selling, general and administrative costs increased $787,000
from $1,887,000 to $2,674,000 in 1995. As a percent of
revenues, these costs increased to 13.2% from 10.2%. The
increase was mainly the result of additional costs resulting
from the recently acquired operations of CPC and costs accrued
for employee incentive programs.
Net income for the second quarter of 1995 and 1994 was
$1,034,000 and $877,000, respectively. The growth was primarily
due to increases in revenues and margins in the products
manufacturing and distribution segment. The Company earned $.14
per share compared to $.12 per share in the second quarter of
1994.
Current six months compared to the same period last year:
Revenues for the twenty-six week period ended June 30, 1995 were
$39,266,000, compared to the $27,851,000 achieved in the same
period of 1994. Contract revenues increased $6,410,000, or
29.6% over 1994 amounts while products manufacturing and
distribution revenues increased $5,005,000, or 81%.
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<PAGE> 9
MANAGEMENTIS DISCUSSION AND ANALYSIS (Continued)
Gross profit was $6,626,000, or 16.9% of revenues for the first
six months of 1995 versus $4,747,000, or 17% for 1994.
Selling, general and administrative expenses increased 38.5%, or
$1,323,000, from the $3,435,000 posted in 1994 to the $4,758,000
in 1995. These expenses, as a percentage of revenues, remained
constant at approximately 12.2% for both 1995 and 1994.
Resulting net income for the first six months of 1995 was
$1,296,000, or $.18 per share, compared to $927,000, or $.13 per
share for the same period in 1994.
Financial condition, liquidity and capital resources:
At June 30, 1995, the Company's working capital (current assets
less current liabilities) was $27,541,000 versus $25,895,000 at
December 31, 1994. The ratio of current assets to current
liabilities (current ratio) was 2.8 at the end of the second
quarter of 1995, compared to 3.6 at December 31, 1994. The
Company currently has a $10,000,000 line of credit with First
National Bank of Ohio. As of June 30, 1995, there were no
borrowings against credit facilities available to the Company.
Gross capital expenditures totaled $766,000 during the second
quarter of 1995.
Management believes that its cash balances, funds available from
the line of credit, and cash flow from operations should be
sufficient to meet current capital requirements and working
capital needs.
Inflation:
The Company's operations have not been materially affected
by inflation or changing prices. A majority of revenues are
pursuant to contracts which enable the Company to pass expected
labor and material cost increases to its customers. Unantic-
ipated levels of inflation could reduce the expected profit on
firm price service or products distribution contracts.
Events, Transactions, and Trends:
On May 3, 1995, the Company, through it's wholly-owned
subsidiaries, Southwick Corp. and Brookfield Corp. purchased all
of the partnership interests of CPC. Through the purchase of
the interests, the Company took control of CPC's accounts
receivable, inventory, real estate, plant and equipment, and
patents.
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<PAGE> 10
PART II. OTHER INFORMATION
---------------------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
2.3 Partnership Unit Purchase and Sale
Agreement, dated April 13, 1995 by and
among Canton Power Company, Henry Crown
and Company (Not Incorporated), The
Second Venture, Southwick Corp. and
Brookfield Corp. (incorporated by
reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K
of May 3, 1995)
10.9 Business Loan Agreement and Promissory
Note, dated May 5, 1995, between the
Company and Controlled Power Limited
Partnership
27.1 Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K dated May 3, 1995 was filed
with the Securities and Exchange Commission, as
amended through Form 8-K/A Amendment No. 1, which
includes the Partnership Unit Purchase and Sale
Agreement relating to the Company's acquisition of
May 3, 1995
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<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
CHEMPOWER, INC.
(Registrant)
Date August 11, 1995 /s/ Robert E. Rohr
--------------------- --------------------------------------
Robert E. Rohr
Vice President of Finance and
Treasurer
(on behalf of the Registrant and
as Principal Financial officer)
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<TABLE>
EXHIBIT INDEX
<CAPTION>
Pagination By
Sequential
Exhibit Exhibit Numbering
Number Description System
------ ----------- ------
<S> <C>
2.3 Partnership Unit Purchase and Sale
Agreement, dated April 13, 1995 by
and among, Henry Crown and Company
(Not Incorporated), The Second
Venture, Southwick Corp. and
Brookfield Corp. (incorporated by
reference to Exhibit 2.1 to the
Company's Current Report on Form
8-K of May 3, 1995)
10.9 Business Loan Agreement and Promissory
Note, dated May 5, 1995, between the
Company and Controlled Power Limited
Partnership
27.1 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.9
<PAGE> 2
LOAN AND FINANCING AGREEMENT
----------------------------
THIS AGREEMENT, executed this 5th day of May, 1995, by and between Chempower,
Inc., having its principal office at 807 East Turkeyfoot Lake Road, Akron, Ohio
44319 (hereinafter referred to as "Lender"); and Controlled Power Limited
Partnership, an Illinois limited partnership, having its principal office at
1501 Raff Road, S.W., Canton, Ohio 44710 (hereinafter referred to as
"Borrower");
WITNESSETH :
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WHEREAS, Borrower desires to borrow money from Lender to be secured as
hereinafter provided; and
WHEREAS, it is contemplated that Lender may, from time to time, extend future
advances and/or other financial accommodations to Borrower to be secured as
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual premises and covenants and in
reliance upon the representations and warranties hereinafter contained, subject
to the terms and conditions of this Loan and Financing Agreement, it is hereby
agreed by and between Lender and Borrower as follows:
DEFINITIONS
-----------
1.1 "Indebtedness" means and shall include (i) all indebtedness and
liabilities of whatsoever kind, nature and description owed to Lender by
Borrower, whether direct or indirect (including but not limited to, by way of
guaranty), absolute or contingent, due or to become due, and whether now
existing or hereafter arising and howsoever evidenced or acquired, and whether
joint and/or several; (ii) all future advances made by the Lender for the
protection or preservation of the Lender's rights and interest arising
hereunder or in the Collateral including, by way of illustration but without
limitation, advances for taxes, levies, assessments, insurance and/or
maintenance of the Collateral; and (iii) all costs and expenses incurred by the
Lender in the protection, enforcement and/or collection of any of the foregoing
including, by way of illustration but without limitation, attorneys' fees.
1.2 "Equipment" means and includes all goods, equipment, fixtures,
furniture, machinery, tools and other items of personal property (other than
Inventory) of every kind and description, presently owned or hereafter acquired
by the Borrower and wheresoever located, together with all additions,
attachments, accessions, parts, replacements, substitutions and/or renewals
thereof or therefor.
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1.3 "Inventory" means and includes all goods, merchandise, products and/or
commodities acquired, manufactured or processed by Borrower and intended for
sale and/or lease, and all raw materials, goods in process, finished goods,
materials and supplies of every nature used and/or usable in connection with
such manufacture, processing, packing, shipping, sale and/or lease of goods,
products or services, regardless of where the same may be situated, kept and/or
stored and whether presently owned or hereafter acquired by the Borrower.
1.4 "Collateral" means and includes all, Equipment, and Inventory whether
now owned or hereafter acquired by Borrower.
LINE OF CREDIT
--------------
2.1 Lender may, at its option, make loans to Borrower, from time to time, in
an aggregate principal amount up to, but not exceeding at any one time, the sum
of Three Million Dollars ($3,000,000.00) (hereinafter referred to as "Credit
Loan").
2.2 All such loans and/or advances shall be charged to a Loan Account which
will be maintained in Lender's books in Borrower's name. Lender shall render
to Borrower, from time to time, a statement of the Loan Account which shall be
deemed to be correct, accepted by and binding upon Borrower, unless Lender
receives a written statement of exceptions within Thirty (30) days subsequent
to the date upon which such statement has been rendered to Borrower. Borrower,
at the Lender's request, shall execute and deliver to the Lender, from time to
time, Promissory Note(s), in form and substance as is satisfactory to Lender,
which Promissory Note(s) shall evidence the balances owing by Borrower to
Lender, as evidenced by the aforementioned Loan Account maintained on the
Lender's books; provided, however, that unless and until such Promissory
Note(s) are requested and delivered, the Loan Account maintained on Lender's
books in the name of Borrower, and/or such statement(s) of the Loan Account as
rendered by Lender to Borrower, shall be prima facie evidence of the loan(s)
-----------
and advance(s) owing to Lender by Borrower.
DISBURSEMENTS
-------------
3.1 From the proceeds of the loan(s) which may be consummated concurrently
with the execution hereof, Lender is hereby authorized and directed to disburse
and pay over to such firms, persons or corporations such amounts as are set
forth in a schedule attached hereto, made a part hereof, and which is entitled
"Disbursement Schedule".
Page 2
<PAGE> 4
SECURITY INTEREST(S)
--------------------
4.1 As security for the payment to Lender of all of the Indebtedness and for
the performance of any and all of the duties and/or obligations of Borrower
hereunder, and any and all other contracts, agreements and/or instruments
executed in connection herewith, Borrower does hereby grant, assign and convey
to Lender a continuing security interest in and to the Collateral, and the
proceeds and products thereof.
4.2 As further security for the payment to Lender of all of the Indebtedness
and for the performance of any and all of the duties and/or obligations of
Borrower hereunder, and any and all other contracts, agreements and/or
instruments executed in connection herewith, Borrower does hereby agree to
grant, assign and convey to Lender such other security interest(s) and/or
mortgage(s) as Lender may, from time to time, require.
4.3 Borrower shall execute and deliver to Lender, concurrently with the
execution of this Loan and Financing Agreement and at any time(s) hereafter,
all financing statements, security agreements, contracts, reports, letters of
authority, pledges, notices and/or other agreements, instruments and documents
which Bank may request, in form and substance satisfactory to Lender, to
perfect and maintain the Security Interest(s), granted to Lender by Borrower in
and to the Collateral, and in order to fully consummate any of the transactions
contemplated hereunder or under any other agreement, instrument or document
hereafter executed by Borrower and delivered to Lender.
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Lender to enter into this Loan and Financing Agreement
and to make the loans and/or advances hereunder, Borrower represents and
warrants to Lender and, as and at the time of each advance, execution and/or
renewal of any Indebtedness and/or Promissory Note(s) in connection herewith
and/or otherwise Borrower shall be deemed to have represented and warranted, as
follows:
5.1 Borrower is a limited partnership duly organized, legally existing and
in good standing under the laws of the State of Illinois and that it is
qualified to do business in any other state in which it conducts its business.
5.2 Borrower does not operate and/or conduct its business and is not
entitled to operate and/or conduct its business under any assumed name.
5.3 Borrower has the power and is duly authorized to enter into this Loan
and Financing Agreement and to execute and to
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<PAGE> 5
deliver to Lender, now and from time to time hereafter, additional agreements,
assignments, guaranties, pledges, mortgages, and other instruments and/or
documents relating to the borrowing of monies from Lender and the granting of
security interest(s) and lien(s) upon the Collateral to secure the payment of
the Indebtedness.
5.4 Borrower has, by appropriate partnership action, authorized, empowered
and directed its respective Partner(s) whose signatures appear hereon, and/or
on any agreements, instruments and/or documents executed and delivered in
connection herewith, to execute the same for and on behalf of Borrower.
5.5 The execution by Borrower of this Loan and Financing Agreement and/or
any other agreement, security agreement, assignment, guaranty, pledge,
mortgage, instrument and/or document which may, from time to time hereafter, be
executed in respect hereto and delivered to Lender, shall not constitute a
breach of any provision(s) contained in its Partnership Agreement and/or any
agreement(s) to which it is now a party, and that the performance by it of its
obligations hereunder or under any agreement(s) now executed by it and
delivered to Lender, shall not constitute an event of default under any other
agreement to which it is now a party.
5.6 All financial statements and/or information relating to Borrower which
have been or which hereafter may be delivered by or for Borrower to Lender or
its representatives are true and correct and have been prepared in accordance
with generally accepted accounting principles, consistently applied, that there
has been no material adverse change in its financial condition since the
submission of any financial information to Lender and no such material adverse
change in its financial condition is imminent or threatened.
5.7 All of its Federal, State and other tax returns, reports, including
reports of or to any governmental authority for the proper maintenance and
operation of its properties, assets and business, that may be required by law
to be filed or paid, have been so filed and paid, and all Federal and other
taxes, assessments fees and other governmental charges (other than those
presently payable, without penalty) imposed upon it, its properties or assets
which are due and payable, have been fully paid.
5.8 All Defined Benefit Pension Plans, as defined in the Employee Retirement
Income Security Act of 1974, as amended, of Borrower (if it maintains such a
Plan) meet, as of the date hereof, the minimum funding standards of Section 302
of ERISA, and no reportable event or prohibited transaction, as defined in
ERISA, has occurred with respect to any such Plan.
5.9 There is no litigation, administrative proceeding, investigation or
other action of any nature pending, or to the
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<PAGE> 6
knowledge of Borrower and/or its officers, threatened, against or affecting it
which involves the possibility of any judgment or liability not fully covered
by insurance or which may materially or adversely affect any of the Collateral
or its right to carry on its business as now conducted. Details of all
litigation, administrative proceedings, investigations or other action of
similar nature, pending or threatened against it, at any time during the term
of this Loan and Financing Agreement will be brought to the attention of
Lender, in writing, forthwith.
5.10 Borrower is the lawful owner of the Collateral and has the right to
grant the Security Interest(s) hereunder to Lender, free and clear of all liens
and Security Interest(s) of others and shall defend the Collateral and the
Security Interest(s) of Lender against the lawful claims and demands of others.
5.11 The records concerning all of the Collateral of Borrower are kept at the
place(s) of business which have hereinbefore or are hereinafter specified, and
such records shall not be removed from such office(s) without the prior written
consent of Lender.
5.12 Borrower is in possession of the Collateral, except such Collateral as
may be in transit or Inventory that may be in storage; the Collateral is
presently located at the address of Borrower hereinbefore specified, or such
other locations as are set forth in a schedule which is attached hereto, made a
part hereof and labeled "Collateral Location"; such Collateral shall not be
removed from such locations without the prior, written, consent of Lender.
AFFIRMATIVE COVENANTS
---------------------
The Borrower hereby covenants and agrees with Lender that so long as Borrower
shall be indebted to Lender and, until payment, in full, of the Indebtedness
and the performance of any and all other obligations of Borrower, it will:
6.1 Keep all of its assets insured, at its own expense, against loss or
damage by fire, explosion and such other risks ordinarily insured against by
other owners or users of property in similar businesses for the full insurable
value thereof, by policies of insurance in such form, in such amounts and with
such companies as may be satisfactory to Lender, insuring Borrower and payable
to Lender. Certified copies of all such insurance policies shall be delivered
to Lender upon demand. All proceeds payable under any of such policies shall
be payable, in any event, to Lender and applied to the Indebtedness of Borrower
to Lender. Borrower hereby grants Lender a continuing security interest in and
to all of said policies, and the proceeds thereof, to secure the Indebtedness
of Borrower to Lender. Each insurer shall agree by endorsement upon the policy
or policies issued by it to Borrower as
Page 5
<PAGE> 7
required above or by independent instruments furnished to Lender, that it will
give the Lender a Ten (10) day written notice prior to the alteration or
cancellation of any such policy or policies and that no act or default of
Borrower or of any other persons shall affect the right of Lender to recover
under said policy or policies.
6.2 Maintain, preserve and keep its assets and properties and every part
thereof in good repair, working order and condition and, from time to time,
make all needful and proper repairs, renewals, replacements, additions,
improvements and such maintenance thereto, so that at all times the efficiency
thereof shall be fully preserved and maintained. Borrower shall, upon request,
immediately deliver to Lender evidence of ownership and/or certificates of
title relative to Collateral and shall place on or otherwise identify the
Collateral with such marks or other methods of identification sufficient to
give notice of Borrower's ownership thereof.
6.3 Promptly pay and discharge all taxes, assessments and governmental
charges upon or against Borrower or its respective property and/or assets prior
to the date upon which penalties attach thereto, unless and to the extent that
such taxes are being diligently contested, in good faith and by appropriate
proceedings, and appropriated reserves therefor have been established and
further, promptly pay and discharge all lawful claims, whether for labor,
material, supplies, services or otherwise which might or could, if unpaid,
become a lien or charge upon the properties and/or assets of Borrower, unless
and to the extent only, that same are being diligently contested, in good faith
and by appropriate proceedings, and appropriate reserves therefor have been
established.
6.4 Carry on and conduct its business in substantially the same manner and
in substantially the same fields as such business is now or has heretofore been
carried on, and maintain its partnership existence and comply with all valid
and applicable statutes, rules and/or regulations.
6.5 Furnish to Lender such other information as Lender may, from time to
time, request and allow Lender, by or through its officers, agents, attorneys
and/or accountants, to examine and inspect the books and records of Borrower
and to make abstracts and copies thereof, and further, to visit and inspect any
of the Collateral or other property of Borrower wherever the same may be
located. The costs and expenses incurred by Lender hereunder shall, prior to a
default hereunder, be borne by Lender and, after a default hereunder, shall be
borne by Borrower, payable on demand and secured by the Collateral.
6.6 Notify Lender forthwith of any material loss or depreciation in the
value of the Collateral.
Page 6
<PAGE> 8
6.7 Notify Lender forthwith of any default on any payment of principal or
interest on any obligation to any other person for borrowed money or of any
default in performance of any term, condition and/or covenant contained in any
other note(s) or agreement(s) which in itself, or with the giving of notice of
lapse of time, or both, may allow acceleration of the maturity of the entire
outstanding indebtedness of any liability.
NEGATIVE COVENANTS
------------------
The Borrower hereby covenants and agrees with Lender so long as any of the
Indebtedness shall remain outstanding and unpaid to Lender, Borrower will not,
without the express, prior, written consent of Lender:
7.1 Substantially change the character of its business as presently
conducted;
7.2 Invest in, organize or participate in the organization and/or creation
of any other corporation, partnership, association, proprietorship and/or any
other business organization or merge, consolidate with or into any other
corporation, partnership, proprietorship, and/or any other business
organization;
7.3 Sell, lease or otherwise dispose of any of its assets, properties or
business other than in the ordinary course of business;
7.4 Other than Permitted Encumbrances, suffer or permit any security
interest, lien and/or encumbrance upon any of its properties, assets and
interests in property or assets, except to Lender;
7.5 Incur any debts, whether by borrowing or otherwise, outside of the
ordinary course of business, or guaranty or otherwise become in any way liable
with respect to the obligation of any other firm, person or corporation, except
by endorsement of the instruments or items of payment for deposit to the
general account of Borrower which are transmitted or turned over to Lender on
account of the Indebtedness owing from Borrower to Lender;
7.6 Make any advances, directly or indirectly, by way of loan, guaranty or
otherwise, to any firm, person or corporation, including any companies
controlled by or affiliated with the Borrower, or to any officer, director,
stockholder or employee of Borrower;
7.7 Purchase, lease or otherwise acquire, or enter into any commitment to
purchase, lease or otherwise acquire, capital assets other than in the ordinary
course of business.
Page 7
<PAGE> 9
EVENTS OF DEFAULT
-----------------
Upon the occurrence of any of the following Events of Default, Lender may, at
its option, declare by written notice to Borrower, the principal of and
interest on the Promissory Note(s) and/or all Indebtedness of Borrower then
remaining unpaid, to be immediately due and payable, all without demand,
presentment and/or other notice of any kind, all of which are hereby expressly
waived.
8.1 Borrower shall default in any payment of the principal of or interest on
its Indebtedness to Lender when and as the same shall have become due and
payable, whether at maturity, by acceleration or otherwise, and Borrower shall
fail to cure such default within 10 days thereof;
8.2 Borrower shall default in the performance or observation of any other
obligation to Lender or there shall be a breach of any covenant, warranty or
condition hereof, or any representation herein, is or has become untrue;
8.3 Borrower shall default in any payment of principal or interest in any
obligation to any other person for borrowed money; or Borrower shall default in
the performance of any term, condition or covenant contained in any other
note(s) or agreement(s);
8.4 Any judgment, decree or order aggregating (alone or with other
judgments, decrees or orders) $10,000.00 not fully covered by insurance shall
have been entered by a court of competent jurisdiction against Borrower, or any
writ or warrant of attachment or any similar process shall have been filed
against Borrower or against any property or asset of Borrower, and such
judgment, decree, order, writ or warrant of attachment or similar process shall
have remained unsatisfied, unvacated, unbonded or unstayed for a period of
Fifteen (15) days;
8.5 Borrower shall have become insolvent (subject to the Thirty (30) day
period provisions hereinafter recited) or admit, in writing, its inability to
meet its obligations as they mature; or is generally not paying its debts as
such debts become due; or shall have an order for relief entered against it; or
shall apply for the appointment of a custodian, trustee or receiver for
Borrower or any substantial portion of its properties, or any such custodian,
trustee or receiver shall be appointed, and if appointed in a proceeding
brought against Borrower, Borrower, by any action shall indicate its approval
of, consent to or acquiescence in such appointment, or any such custodian,
trustee or receiver shall not be discharged within Thirty (30) days; or any
proceeding involving Borrower shall be instituted under any bankruptcy,
reorganization, arrangement, insolvency or other similar statute of the United
States or any State thereof, and if such proceeding shall be
Page 8
<PAGE> 10
instituted against Borrower, Borrower shall, by any action, indicate its
approval of, consent to, or acquiescence therein, or the same shall remain
undismissed for Thirty (30) days;
8.6 Any guarantor of the Indebtedness shall default in the performance or
observation of any obligation now or hereafter owing to Lender, or any
individual guarantor of the Indebtedness shall die, or any guarantor of the
Indebtedness shall have become insolvent (subject to the Thirty (30) day period
provisions hereinafter recited) or admit, in writing, its inability to meet its
obligations as they mature; or is generally not paying its debts as such debts
become due; or shall have an order for relief entered against it; or shall
apply for the appointment of a custodian, trustee or receiver for any guarantor
or any substantial portion of its properties, or any such custodian, trustee or
receiver shall be appointed, and if appointed in a proceeding brought against
guarantor, such guarantor, by any action shall indicate its approval of,
consent to or acquiescence in such appointment, or any such custodian, trustee
or receiver shall not be discharged within Thirty (30) days; or any proceeding
involving any guarantor shall be instituted under any bankruptcy,
reorganization, arrangement, insolvency or other similar statute of the United
States or any State thereof, and if such proceeding shall be instituted against
any guarantor, such guarantor shall, by any action, indicate its approval of,
consent to, or acquiescence therein, or the same shall remain undismissed for
Thirty (30) days;
8.7 Any failure to perform and discharge any of the obligations, covenants
and agreements required to be performed under the provisions of any instruments
evidencing and/or securing the Indebtedness and/or any other present and future
borrowings, or any agreements in relation thereto, within the time period
called for thereunder, including any cure period set forth in such agree-
ments, or any default by a guarantor(s) of the Indebtedness in the payment or
performance of any obligation now or hereafter owing by such guarantor(s) to
Lender, shall be a default under the provisions of this Loan and Financing
Agreement entitling Lender to exercise any and all rights and remedies provided
hereby. Any Event of Default under the terms and conditions of this Loan and
Financing Agreement, as defined herein, shall also constitute a default under
all other instruments evidencing and/or securing any other present or future
borrowings, or any agreements in relation thereto, entitling Lender to exercise
any and all rights and remedies provided therein.
RIGHTS AND REMEDIES IN THE EVENT OF DEFAULT
-------------------------------------------
9.1 Upon the occurrence of any of the above Events of Default, and at any
time thereafter, Lender shall have, in addition to any and all other rights and
remedies available to it under the provisions hereof or of any other agreement
taken pursuant to the
Page 9
<PAGE> 11
provisions hereof, or under any other laws of the State of Ohio, the remedies
of a secured party under the Ohio Commercial Code and, where applicable, under
the laws of any state (regardless of whether the Code has been enacted in the
jurisdiction where rights or remedies are asserted) including, by way of
illustration but without limitation, the right in Lender's sole discretion to
take possession and dispose of all or any portion of the Collateral, and for
that purpose, Lender may, so far as Borrower can give authority therefore,
enter upon any premises on which the Collateral may be situated and remove the
same therefrom. If Lender elects to take possession of Collateral it may
maintain such possession on the Borrower's premises, or may remove the same, or
any part thereof, to such other place as Lender may desire. Upon Lender's
demand, Borrower will assemble the Collateral and make it available to Lender
at a place designated by Lender which is reasonably convenient to Lender and to
Borrower. Unless the Collateral is perishable or threatens to decline speedily
in value, or is of a type customarily sold on a recognized market, Lender shall
give to Borrower reasonable notice of the time and place of any public sale
thereof, or of the time at which private sale or other intended disposition
thereof is to be made. Requirements of reasonable notice shall be met if such
notice is mailed, postage prepaid, to the address of Borrower set forth in this
Loan and Financing Agreement, at least Five (5) days prior to the date of the
aforesaid sale and/or disposition.
9.2 In the Event of Default, Lender or any of its agents or representatives,
shall have the right to enter upon the premises of Borrower, or any other
place(s) where the books and records of Borrower may then be kept and
maintained, and in the Event of Default remove therefrom all such books and
records including, by way of illustration but without limitation, all books and
records referred to in this Loan and Financing Agreement, to the premises of
Lender or any agent of the Lender, for such time as Lender may desire in order
to effectively collect and liquidate the Collateral.
9.3 Borrower shall pay to the Lender, on demand, any and all expenses,
including reasonable attorney's fees and legal expenses incurred or paid by
Lender in protecting or enforcing its rights upon or under the Indebtedness or
this Loan and Financing Agreement. Lender shall apply the net proceeds of any
sale or other disposition of Collateral, after deducting all costs and expenses
of every kind incurred therein or incidental to the retaking, holding,
preparing for sale, or other disposition of Collateral, or in any way relating
to the rights of Lender hereunder, to the payment of Indebtedness, in whole or
in part, whether due or not due, absolute or contingent, making proper rebate
for interest or discount on items not then due, and only after so applying such
net proceeds and ascertainment by Lender of any other amounts required by an
existing or future provision of law, need Lender account to Borrower for
surplus, if any. Borrower
Page 10
<PAGE> 12
shall remain liable to Lender for the payment of any deficiency of or on the
Indebtedness, together with interest thereon, until paid. Lender shall not be
required to proceed against any other party, or against any other security for
the Indebtedness or pursue any other right or remedy hereunder, or under any
other instrument or agreement, but all such rights and remedies shall be
cumulative and in addition to all other such rights and remedies of Lender.
9.4 In the event Lender seeks to take possession of any and/or all of the
Collateral by court process, Borrower, hereby irrevocably waives any bonds
and/or surety or security relating thereto required by any statute, court rule
or otherwise, as incident to such possession, and waives any demand for
possession and the right to trial by jury with respect thereto and/or any other
action in which Lender is a party.
9.5 Borrower covenants and agrees that neither Lender nor any of its agents
will be liable for any acts or omissions, or for any error of judgment or
mistake of fact or law in exercising any of the rights or remedies granted to
the Lender hereunder, and further agrees that Lender shall have no duty with
respect to the Collateral except for the safe custody thereof.
9.6 Lender shall have the right in its own name or in the name of Borrower
to petition a court of competent jurisdiction to appoint a trustee or receiver
to carry on the business of the Borrower; Borrower does hereby irrevocably
make, constitute and appoint Lender, any of its officers, employees and/or
agents, effective upon an Event of Default hereunder, their true and lawful
attorney, with power to so petition a court of competent jurisdiction for
the aforesaid appointment of a trustee or a receiver, and to execute in their
names such documents as may be required and/or convenient to fully effect this
remedy and effectively operate the business of Borrower.
MISCELLANEOUS PROVISIONS
------------------------
10.1 All notices, requests and/or communications shall be in writing and the
sending or giving of such notices, requests and/or communications shall be
sufficient in all respects if sent by certified mail with postage fully prepaid
thereon, or delivered personally, to the other party at the address provided
for herein which shall be deemed to be the last known address of said party
unless, by proper written notice hereunder, said party shall change the address
to which the aforesaid notices, requests and/or communications shall thereafter
be sent.
10.2 All representations, warranties and provisions hereof shall survive the
date hereof and shall be binding upon the parties hereto while there exists
unpaid any Indebtedness to Lender.
Page 11
<PAGE> 13
10.3 This Loan and Financing Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and/or assigns.
If, at any time(s) by assignment or otherwise, Lender should transfer the
Promissory Note(s) in connection herewith, such transfer shall carry with it
Lender's rights, powers and remedies of and under this Loan and Financing
Agreement pro tanto, and the transferee shall become vested with said rights,
---------
powers and remedies, whether or not they are specifically referred to in the
transfer. If and to the extent that Lender retains any portion of the
Promissory Note(s) in connection herewith, Lender will continue to have the
rights, powers and remedies herein set forth with respect thereto. Borrower
shall not have the right to assign this Loan and Financing Agreement without
the prior, written consent of Lender.
10.4 The laws of the State of Ohio shall govern this Loan and Financing
Agreement and all rights and obligations hereunder, including matters of
construction, validity and performance, as well as the security provided for
herein. If, by reason of the location of the Collateral, or otherwise, the
creation, validity or perfection of security interest(s) provided for herein
are governed by the laws of a State other than Ohio, Borrower shall take such
steps and execute and deliver such documents as Lender may, from time to time,
request in order to comply with the Uniform Commercial Code or other laws of
such State(s).
10.5 Borrower shall reimburse Lender for all costs and expenses, including
attorneys' fees incurred by Lender in the preparation of the closing of the
transactions herein contemplated.
10.6 The Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
10.7 No course of dealing on the part of Lender, its officers and/or
employees, nor any failure or delay by Lender with respect to the exercise of
any right, power or remedy under this Loan and Financing Agreement shall
operate as a waiver thereof, and any single or partial exercise of any such
right, power or remedy shall not preclude any later exercise thereof or any
exercise of any other right, power or remedy hereunder. No waiver of default
shall be effective unless in writing, signed by an officer of Lender. No
waiver of any default or forebearance on the part of Lender in enforcing any of
its rights under this Loan and Financing Agreement shall operate as a waiver of
any other default or right, or of the same default or right on a future
occasion.
Page 12
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Loan and Financing
Agreement to be duly executed on the date first above written.
"LENDER"
Chempower, Inc., an Ohio Corporation
BY: /s/ T.J. KUKK
----------------------------------
President
"BORROWER"
Controlled Power Limited Partnership,
an Illinois Limited Partnership
BY: /s/ JAMES G. OWENS
----------------------------------
President
"GENERAL PARTNER"
Southwick Corp., an Ohio Corporation
BY: /s/ JAMES G. OWENS
----------------------------------
President
Page 13
<PAGE> 15
MASTER GRID NOTE
----------------
Akron, Ohio
May 5, 1995
$3,000,000.00
FOR VALUE RECEIVED, the undersigned Controlled Power Limited
Partnership, a limited partnership organized under the laws of Illinois
("Borrower"), hereby promises to pay, upon demand, to the order of Chempower,
Inc., an Ohio corporation ("Lender"), in lawful money of the United States, the
principal sum of
THREE MILLION DOLLARS
---------------------
(or, if less, the unpaid principal balance shown on the reverse side or any
allonge thereto), and to pay interest on the unpaid principal balance of this
Note from time to time outstanding on the first day of the month next
succeeding the date hereof, and continuing on the first day of each month
thereafter and computed (on the basis of a 360-day year and on the actual
number of days elapsed) at a rate equal to the prime rate ("Prime Rate" means
the rate of interest publicly announced from time to time by First National
Bank, in Akron, Ohio, as its Prime Rate), with each change in the Prime Rate
automatically and immediately changing the rate thereafter applicable to this
Note.
In the event the undersigned fails to make any payment of principal
and/or interest within fifteen (15) days of when due hereunder, the then
outstanding principal balance hereof, together with all overdue interest, shall
automatically and immediately draw interest at a rate equal to three percent
(3%) per annum in excess of Prime Rate until such default is cured.
Lender shall endorse on the reverse side (or any allonge thereto) the
date and amount of each advance and the identifying mark of the person making
the endorsement. The undersigned agree that each such endorsement shall be
prima facie evidence that the advance indicated was made on the date indicated.
There is no limit to the amount of such advances, except that the maximum
unpaid principal balance outstanding at any one time shall not exceed the face
amount of this Note.
Presentment, notice of dishonor and protest are hereby waived by all
debtors, sureties, guarantors and endorsers.
The undersigned may prepay this Note, in whole or in part, at any time
before maturity without premium or penalty.
Page 1
<PAGE> 16
In the event the undersigned fails to make any payment of principal or
interest within fifteen (15) days of when due hereunder, or in the event the
undersigned voluntarily files, or has filed against it, any complaint or action
for relief under any bankruptcy or insolvency laws, or for the appointment of a
receiver, or if Lender shall deem itself insecure, in good faith believing that
the prospect of payment of this Note is impaired, or in the event the
undersigned is in default under any bank or any other funded indebtedness or in
the event there is a breach in any term or condition of said mortgage, or in
the event there is a death or insolvency of any person which has executed a
Guaranty of Payment of this Note to the Lender; then, in any such event, the
Lender may, at its option, accelerate the maturity of this Note, and the entire
unpaid principal amount, together with interest thereon, shall be immediately
due and payable, without demand or notice, both of which are expressly waived
by the undersigned.
The undersigned hereby represents and warrants to Lender that all
funds received in consideration of the making and delivery of this Note shall
be used for business or commercial purposes.
The undersigned hereby authorizes any attorney-at-law to appear in any
Court of Record in the State of Ohio or any other State or Territory of the
United States after this Note becomes due by acceleration or otherwise, and
waive the issuing and service of process and confess judgment against the
undersigned in favor of Lender or other holder of this Note for the amount then
appearing due and the cost of suit, and thereupon to release all heirs and
waive all rights of appeal and stay of execution.
Notwithstanding anything contained in this Note to the contrary, any
agreement, obligation or liability of the Borrower under this Note binds only
the assets of the Borrower (which assets shall not include the net worth or
assets of any of the persons or entities, or both, who or which from time to
time may be partners of the Borrower), and no partner of the Borrower assumes
or shall be held to any personal liability for the payment of this Note, except
to the extent that any such partner endorses or guarantees this Note, or a
portion thereof, in an individual capacity. Without limiting the generality of
the foregoing, the execution of this Note and actions taken hereunder on behalf
of the Borrower by the general partner shall not constitute a personal or
individual obligation of the general partner except to the extent that a
general partner endorses or guarantees this Note, or a portion thereof, in an
individual capacity. With respect to any action brought against the Borrower
for the payment of this Note, no general partner shall be sued or named, nor
shall service or process be made against any general partner except as may be
necessary to secure jurisdiction of the Borrower and any property of the
Borrower, and in the event an amount less than the amount set forth in any
judgment is recovered, the docket shall be satisfied insofar as any general
partner is concerned, except to
Page 2
<PAGE> 17
the extent that any such partner endorses or guarantees this Note, or a portion
thereof, in an individual capacity, and the holder of the judgment shall waive,
abandon and forfeit any and all further rights it may or could have against any
general partner for the payment of this Note. All of the foregoing shall inure
to the benefit of and be enforceable by any general partner and respective
heirs, personal representatives, successors and assigns thereof and shall
survive the dissolution of the Borrower and its reformation, the incorporation
of the Borrower and merges and consolidations affecting either the Borrower or
any resultant corporation.
"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
----------------------------------------------------------------------
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
---------------------------------------------------------------------
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN
----------------------------------------------------------------------
BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE
-----------------------------------------------------------------
AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE
----------------------------------------------------------------------
ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY CAUSE"
-------------------------------------------------------
BORROWER :
----------
CONTROLLED POWER LIMITED PARTNERSHIP
BY: /s/ JAMES G. OWENS
--------------------------------------
President
"GENERAL PARTNER"
SOUTHWICK CORP.
BY: /s/ JAMES G. OWENS
--------------------------------------
President
Page 3
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000847595
<NAME> CHEMPOWER, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 11,899
<SECURITIES> 0
<RECEIVABLES> 25,663
<ALLOWANCES> 79
<INVENTORY> 4,396
<CURRENT-ASSETS> 42,483
<PP&E> 13,065
<DEPRECIATION> 6,215
<TOTAL-ASSETS> 50,963
<CURRENT-LIABILITIES> 14,942
<BONDS> 0
<COMMON> 742
0
0
<OTHER-SE> 34,378
<TOTAL-LIABILITY-AND-EQUITY> 50,963
<SALES> 39,266
<TOTAL-REVENUES> 39,266
<CGS> 32,640
<TOTAL-COSTS> 32,640
<OTHER-EXPENSES> 4,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,122
<INCOME-TAX> 826
<INCOME-CONTINUING> 1,296
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,296
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
