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                                                                    Exhibit 10.3

THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR ASSIGNED EXCEPT (I) PURSUANT TO REGISTRATIONS THEREOF UNDER SUCH
LAWS, OR (II) IF, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO
WATERLINK, INC. THE PROPOSED TRANSFER MAY BE EFFECTED IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS WITHOUT SUCH REGISTRATIONS.

                            13.00 % SUBORDINATED NOTE
                           --------------------------

$500,000                                               Dated:  January 18, 2001

For value received, Waterlink, Inc., a Delaware corporation with its principal
offices at 4100 Holiday Street, Canton, OH 44718(the "Maker"), hereby promises
to pay to the order of BRANTLEY VENTURE PARTNERS III, L.P., a Delaware limited
partnership with its principal offices at 20600 Chagrin Blvd., Suite 1150,
Cleveland, Ohio 44122, or its assigns (collectively, the "Holder"), at its
principal offices or at such other place as the Holder may direct in writing to
the Maker, in lawful money of the United States of America, the principal amount
of Five Hundred Thousand Dollars ($500,000) and interest, as provided herein,
all without relief from valuation or appraisement laws. This Note is one of a
series of notes issued on the date hereof in the aggregate principal amount of
One Million Dollars ($1,000,000) (collectively, the "Notes").

1. PAYMENT OF PRINCIPAL. Subject to acceleration or earlier payment as provided
for elsewhere in this 13.00 % Subordinated Note (the "Note"), the Maker shall
pay to the Holder on January 18, 2002, Five Hundred Thousand Dollars ($500,000)
in principal plus all accrued and unpaid interest on the full principal balance
of this Note as of that date.

2. INTEREST. Interest on the unpaid principal balance hereof existing from time
to time shall accrue at the rate of 13.00 % per annum; provided, however,
interest shall accrue at the rate of 15.00 % per annum so long as an "Event of
Default," as specified in SECTION 4(A), exists hereunder. Interest shall be
calculated on the basis of actual daily balances of outstanding principal for
the exact number of days the principal remains outstanding and shall be computed
on the basis of a 360-day year. Subject to acceleration or earlier payment as
provided elsewhere in this Note, interest shall be payable quarterly in arrears
on each April 18, July 18, October 18 and January 18 until this Note, including
all accrued and unpaid interest, is paid in full.

3. PREPAYMENT. The Maker may prepay all or any portion of the unpaid principal
balance hereof and accrued interest, without premium or penalty; provided,
however, all sums received in prepayment shall first be applied in payment of
accrued but unpaid interest and the excess, if any, shall then be applied to the
unpaid principal balance hereof (with the principal credited to installments of
the principal balance due hereunder in inverse order of their maturity). Any
payments or prepayments made on the Notes, whether principal, interest or
premium (if any), shall be made ratably as to all of the Notes.


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4.       DEFAULT AND REMEDIES.
         (a). If any of the following events (an "Event of Default" or
         collectively "Events of Default") shall have occurred and be
         continuing, that is to say: (i) the Maker defaults in the payment of
         principal of or interest or premium (if any) on this Note when due and
         the Maker does not cure that default within 3 days after the due date;
         (ii) the Maker defaults in the performance of any obligation under this
         Note (other than the payment described in the immediately preceding
         clause) and the Maker does not cure that default within 30 days after
         receipt by the Maker of written notice from the Holder; (iii) the Maker
         defaults in any payment of principal of or interest on any Senior Debt,
         beyond any period of grace provided with respect thereto or in the
         performance of any other term or condition contained in any agreement
         under which any such obligation is created if the effect of such
         default results in Senior Debt in excess of $1,000,000 becoming due
         prior to its stated maturity without such indebtedness being discharged
         or such acceleration being rescinded or annulled within a period of
         sixty (60) days; (iv) an order for relief shall be entered in any
         federal bankruptcy proceeding in which the Maker is the debtor; or
         bankruptcy, receivership, insolvency, reorganization, relief,
         dissolution, liquidation or other similar proceedings shall be
         instituted by or against the Maker or all or any part of the property
         of the Maker under the Federal Bankruptcy Code or any other bankruptcy
         or insolvency law of the United States or any bankruptcy or insolvency
         law of any state of competent jurisdiction unless, if such proceedings
         are instituted against the Maker, such proceedings are dismissed and
         discharged within ninety (90) days after they are instituted; or (v)
         the Maker shall have become insolvent or unable to pay its debts as
         they mature, cease doing business as a going concern, undergo
         dissolution or liquidation, make an assignment for the benefit of
         creditors, admit in writing its inability to pay its debts as they
         become due, or if a trustee, receiver or liquidator shall be appointed
         for the Maker, or for any substantial portion of the assets of the
         Maker, and such appointment shall not be vacated within ninety (90)
         days;

         then, except as provided below with respect to an Event of Default
         under paragraph (a) of this Section 4, the holder of the Note if only
         one Note shall be outstanding, or the holders of at least a majority of
         the principal amount of the Notes, if more than one Note shall be
         outstanding, may at its or their option, after notice in writing to the
         Maker, declare the Note or all of the Notes, as the case may be, to be
         forthwith due and payable and thereupon the Note, or all of the Notes,
         shall be and become due and payable, together with interest and all
         other amounts accrued thereon (provided that if an Event of Default
         results from the filing of a voluntary petition in any bankruptcy
         proceeding or the filing of an involuntary petition in any bankruptcy
         proceeding which is not dismissed and discharged within ninety (90)
         days, the Notes thereupon shall immediately become due and payable,
         with interest accrued thereon, without any notice from the holders of
         the Notes or otherwise), and, subject to the provisions of Section 5
         hereof, the holder or holders of the Note or Notes may take any action
         or proceeding at law or in equity which it or they deem advisable for
         the protection of its or their interests to collect and enforce payment
         and the Maker shall pay all expenses, court costs and reasonable
         attorneys' fees incurred in connection with or arising out of any
         default hereunder. Notwithstanding the foregoing, in case an Event of
         Default under paragraph (a) of this Section 4 shall occur,

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         the holders shall have none of the rights and remedies otherwise
         contemplated by this Section 4 (including, without limitation, the
         right to accelerate the maturity of the Notes) UNLESS AND UNTIL (i) the
         Blocking Period (as defined herein) shall have expired without the same
         having been cured or waived; and (ii) the Blocking Period shall have
         expired without any holder of Senior Debt having accelerated the
         maturity of such Senior Debt, but in such event, upon the satisfaction
         of said conditions (i) and (ii) above, the holders will have the rights
         and remedies contemplated by this Section 4.

                  In the event that the holders of Senior Debt in excess of
         $1,000,000 shall accelerate the maturity of any such Senior Debt, as a
         result of a default under the Loan Documents (as defined herein) or the
         Subsequent Loan Documents (as defined herein), then the indebtedness
         outstanding on the Notes, including all accrued and unpaid interest,
         principal and premium, if any, as well as any fees and expenses payable
         to the holders of the Notes (unless waived by the holders of Senior
         Debt in excess of $1,000,000), shall be simultaneously accelerated. If
         any acceleration is rescinded or annulled by the holders of Senior Debt
         within sixty (60) days from such acceleration of such Senior Debt, the
         acceleration of the Notes will automatically be rescinded.

         (b). If this Note is collected or attempted to be collected by the
         initiation or prosecution of any suit or through any bankruptcy court,
         or by any judicial proceeding, or is placed in the hands of attorneys
         for collection, then the Maker shall pay, in addition to all other
         amounts owing hereunder, all court costs and reasonable attorney's fees
         incurred by the Holder.

5.       SUBORDINATION.

         (a). SUBORDINATION TO SENIOR DEBT. Notwithstanding anything to the
         contrary contained in this Note, the Maker covenants and agrees, and
         the Holder by acceptance of this Note likewise covenants and agrees,
         that the Maker's indebtedness under this Note shall be junior and
         subordinate to the Senior Debt (as hereafter defined) to the extent and
         in the manner set forth in this SECTION 5, except to the extent
         otherwise agreed to in writing by the Holder and any Senior Lender (as
         defined herein) with respect to the Senior Debt held by or payable to
         that Senior Lender. Each subsection of this SECTION 5 shall be given
         independent effect so that if a particular payment or action is
         prohibited by any one of these subsections, it shall be prohibited
         although it otherwise would not be prohibited by another subsection.
         Without the prior written consent of the Senior Lender (or, in the case
         of the Senior Credit Facility, of the agent thereof), the Maker
         covenants and agrees, and the Holder by acceptance of this Note
         likewise covenants and agrees, that so long as such Senior Debt is
         outstanding or commitments under the Senior Credit Facility shall
         remain in effect, (i) the Maker will not make and the Holder will not
         receive any voluntary prepayments hereunder, (ii) the Maker will not
         grant and the Holder will not receive any collateral as security for
         obligations hereunder, and (iii) the Maker and the Holder will not
         amend any provision of this Section 5 nor amend in any way adverse to
         any Senior Lender any other provision of this Note.


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         (b). PAYMENT DEFAULT ON SENIOR DEBT. If at any time a default occurs in
         the payment when due (whether at maturity or upon acceleration or
         mandatory prepayment, or on any principal installment payment date or
         interest payment date, or otherwise) ("Payment Default") of any Senior
         Debt, then at all times thereafter until (i) the Payment Default has
         been cured, (ii) the Payment Default or the benefits of this sentence
         have been waived in writing by or on behalf of the Senior Lenders
         holding that Senior Debt, or (iii) payment in full of all affected
         Senior Debt, the Maker shall not, directly or indirectly, make any
         Distribution of Assets (as hereinafter defined) or Payment (as
         hereinafter defined) with respect to this Note.

         (c). DISSOLUTION, LIQUIDATION OR REORGANIZATION OF MAKER. In the event
         of (i) any insolvency or bankruptcy proceeding brought by or against
         the Maker; (ii) any receivership, liquidation, reorganization or other
         similar proceeding relative to the Maker or to its property, including
         its Subsidiaries; or (iii) any proceedings for voluntary liquidation,
         dissolution or other winding up of the Maker, whether or not involving
         insolvency or bankruptcy, the holders of Senior Debt shall be entitled
         to receive payment in full in cash of all principal, premium (if any),
         fees and charges in respect of, and interest on, all Senior Debt
         (including interest thereon accruing after the commencement of any such
         proceedings) before the holders of the Notes shall be entitled to
         receive any payment or distribution in respect of the Notes. Pursuant
         to the foregoing, the holders of Senior Debt (until payment in full in
         cash of all principal, premium (if any), fees and charges in respect
         of, and interest on, all Senior Debt, including interest thereon
         accruing after the commencement of any such proceedings at the rate
         specified in the applicable Senior Debt whether or not such interest is
         an allowable claim in such case or proceeding) shall be entitled to
         receive for application and payment thereof any payment or distribution
         of any kind or character, whether in cash or property or securities,
         which may be payable or deliverable in any such proceedings in respect
         of the Notes (including any such payment or distribution which may be
         payable or deliverable by virtue of the provisions of, or any security
         for, any securities which are subordinate and junior in right of
         payment of the Notes). The holders of the Notes shall not exercise or
         attempt to exercise any right of set off or counterclaim in respect of
         any obligations of the holders of the Notes to the Maker against the
         obligations of the Maker under the Notes if the effect thereof shall be
         to reduce the amount of any such payment or distribution to which the
         holders of Senior Debt would be entitled in the absence of such set off
         or counterclaim; and if and to the extent that notwithstanding the
         foregoing, the holders of the Notes are required by any mandatory
         provision of law to exercise any such right of set off or counterclaim
         each reduction of the amount owing on account of the principal of or
         interest on the Notes by reason of such set off or counterclaim shall
         be deemed to be a payment by the Maker in a like manner in respect of
         the Notes to which the second sentence of this subsection (c) shall
         apply.

         In the event that any default shall occur and be continuing with
         respect to any Senior Debt permitting the holders, with or without the
         making of demand, the giving of notice or otherwise, of such Senior
         Debt to accelerate the maturity thereof, the Maker shall not pay and
         the Holders shall not be entitled to receive any Payment or
         Distribution of Assets in

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         respect of the Notes of any kind, whether of principal, premium (if
         applicable) or interest or, except to the extent otherwise provided in
         subsection (d) below, institute any judicial or legal proceedings or
         seek to enforce any other rights or remedies whatsoever UNLESS AND
         UNTIL (i) a period of one hundred seventy-five (175) days (the
         "Blocking Period") shall have elapsed from the date of such default
         without the same having been cured or waived; and (ii) the Blocking
         Period shall have elapsed without any holder of Senior Debt having
         accelerated the maturity of such Senior Debt, but in such event, upon
         the satisfaction of the conditions set forth in (i) and (ii) above, the
         holders of the Notes will have the rights and remedies contemplated by
         the Notes.

                  Each holder of the Notes will at all times retain the right to
         vote its claims and otherwise act and participate in any insolvency,
         bankruptcy or reorganization proceeding relative to the Maker;
         provided, however, no holder of the Notes in their capacity as such
         shall take any action or vote its claims in the course of any such
         bankruptcy, insolvency or reorganization proceedings so as to:

                  (i) contest the validity or the enforceability of the
                  agreements governing Senior Debt including the Loan Documents
                  or any Subsequent Loan Documents, the promissory notes issued
                  to the holders of Senior Debt, or the liens and security
                  interests to the extent granted with respect to the Senior
                  Debt;

                  (ii) contest the rights and duties of the holders of Senior
                  Debt established in the agreements or instruments governing
                  the same or any security agreement with respect to such liens
                  and security interests;

                  (iii) contest the validity or enforceability of this Section
                  5;

                  (iv) contest the validity or enforceability of this Note or
                  any agreement or instrument to the extent evidencing or
                  relating to the indebtedness of Maker to such holder; or

                  (v) compromise their claims so as to deprive the holders of
                  Senior Debt of the benefit of receiving all amounts otherwise
                  payable to the holders of the Notes pursuant to the
                  reorganization or liquidation of the Maker resulting from such
                  proceeding.

         (d). SUBROGATION. No Distribution of Assets or Payment to which the
         Holder would have been entitled except for the provisions of SECTION 5
         and which are received by or paid over to the Senior Lenders or their
         Representative (as hereinafter defined) shall, as between the Maker and
         its creditors other than the Senior Lenders and the Holder, be deemed
         to be a payment by the Maker to the Senior Lenders or on account of the
         Senior Debt, and the Holder shall be subrogated (without any duty on
         the part of the Senior Lenders to warrant, create, effectuate, preserve
         or protect such subrogation) to the then or thereafter existing rights
         of the Senior Lenders to receive Distributions of Assets or payments
         made on the Senior Debt until this Note shall be paid in full.


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         (e). PAYMENTS HELD IN TRUST. If the Holder receives any Distribution of
         Assets or Payment which the Holder is not entitled to retain under the
         provisions of this SECTION 5, any such Distribution of Assets or
         Payment so received shall be held in trust for the Senior Lenders,
         shall not be commingled with any other assets of the Holder, and shall
         be paid to the Senior Lenders, pro rata, to the extent necessary to
         make payment in full, after giving effect to any concurrent payment or
         distribution to or for the benefit of the Senior Lenders.

         (f). CHANGES IN SENIOR DEBT. Any Senior Lender may at any time and from
         time to time with notice to the Holder: (i) extend, renew, modify,
         waive or amend the terms of the Senior Debt; (ii) sell, exchange,
         release or otherwise deal with any property pledged, mortgaged or
         otherwise securing the Senior Debt; (iii) release any guarantor or any
         other person liable in any manner for the Senior Debt or amend or waive
         the terms of the Senior Debt; (iv) exercise or refrain from exercising
         any rights against the Maker or any other persons; (v) apply in any
         order any sums by whomever paid or however realized to the Senior Debt;
         and (vi) take any other action which otherwise might be deemed to
         impair the Holder's rights. Any and all of such actions may be taken by
         the Senior Lenders without incurring responsibility to the Holder and
         without impairing or releasing the Holder's obligations to the Senior
         Lenders.

         (g). THIRD-PARTY BENEFICIARY, ETC.. The foregoing provisions regarding
         subordination are solely for the purpose of defining the relative
         rights of the Senior Lenders on the one hand and the Holder on the
         other hand. Such provisions are for the benefit of the Senior Lenders
         (and their successors and assigns) and shall be enforceable by them
         directly against the Holder except to the extent otherwise agreed to in
         writing by the Holder and any other Senior Lender.

         (h). DEFINITIONS. As used in this SECTION 5 (or as elsewhere used in
         this Note) the following terms shall have the meanings indicated:

         "Distribution of Assets" means any distribution of assets of the Maker
         or any of its subsidiaries of any kind or character, whether a payment,
         purchase or other acquisition or retirement for cash, property, or
         securities, with respect to the Maker's obligations under this Note.

         "Payment" means payment (including any setoff by the Holder of
         obligations owed by the Holder to the Maker against obligations of the
         Maker hereunder) of any obligation now or hereafter existing under this
         Note (as it may hereafter be amended, supplemented, or otherwise
         modified from time to time), whether created directly or acquired by
         assignment or otherwise, and interest and premiums, if any, thereon and
         all other amounts payable in respect thereof or in connection
         therewith.

         "Representative" means, with respect to any Senior Debt, the trustee,
         agent, or other representative for one or more of the Senior Lenders,
         if any, designated in the indenture,

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         agreement or document creating, evidencing or governing such Senior
         Debt or pursuant to which it was issued, or otherwise designated by the
         holders of such Senior Debt.

         "Senior Debt" means all indebtedness and other obligations specified
         below whether outstanding on the date of this Note or hereafter
         created, incurred or assumed by the Maker:

                  (i) the obligations of the Maker and its subsidiaries,
                  including, without limitations the principal of, and premium
                  and interest on, all loans, letters of credit bankers'
                  acceptances and other extensions of credit under the Loan
                  Documents (as defined in that certain Amended and Restated
                  Credit Agreement dated as of February 11, 2000, as heretofore
                  and as hereafter amended, among the Maker and Bank of America,
                  NA, as agent, and the other financial institutions party
                  thereto (the "Senior Credit Facility")) and all commitment,
                  facility and other fees and all expenses, reimbursements,
                  indemnities and other amounts payable by the Maker thereunder;

                  (ii) all other indebtedness of the Maker which by its express
                  terms is made senior to the Notes; provided, however, that any
                  indebtedness incurred by the Maker under this clause (ii) must
                  be created in connection with or arise out of a transaction in
                  which the Maker or any subsidiaries of the Maker received cash
                  loan proceeds, property or credit support in the form of a
                  letter of credit, guaranty or like instrument;

                  (iii) all interest accrued or accruing on Senior Debt after
                  the commencement of any insolvency, bankruptcy or receivership
                  case or proceeding in accordance with and at the contract rate
                  (including, without limitation, any rate applicable upon
                  default) specified in the agreement or instrument creating,
                  evidencing or governing any such Senior Debt, whether or not,
                  pursuant to applicable law or otherwise, the claim for such
                  interest is allowable as a claim in such case or proceeding;
                  and

                  (iv) any refinancings, refundings, renewals or extensions, in
                  whole or in part, of any indebtedness or other obligation
                  described in clauses (i) or (ii) above under any loan
                  documents (the "Subsequent Loan Documents") entered into in
                  connection with any credit facility entered into after the
                  termination of the Senior Credit Facility or otherwise.

         "Senior Lender" or "Senior Lenders" means one or more of the holders of
Senior Debt.

6. NOTICES. All notices, requests, demands, or and other communications that are
required or may be given pursuant to the terms of this Note shall be in writing
and delivery shall be deemed sufficient and to have been duly given on the date
of service if delivered personally or by facsimile transmission if receipt is
confirmed to the party to whom notice is to be given or on the


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third day after mailing if mailed by first-class mail, return receipt requested,
and properly addressed as follows:

If to the Maker, to:
                           Waterlink, Inc.
                           4100 Holiday Street NW
                           Canton, Ohio 44718-2532
                           Attention: President
                           Fax: (330)-649-4008
         Copies to:
                           Benesch, Friedlander, Coplan & Aronoff LLP
                           2300 BP Tower
                           200 Public Square
                           Cleveland, Ohio 44114
                           Attention: Douglas Haas, Esq.
                           Fax: (216)-363-4588
If to the Holder, to:
                           Brantley Venture Partners III, L.P.
                           20600 Chagrin Blvd.
                           Suite 1150
                           Cleveland, Ohio 44122
                           Attention: Mr. Robert P. Pinkas
                           Fax: (216)-283-5324

or to such other address as may be specified in writing by any of the above.

7.       REMEDIES. The remedies provided by this Note shall be cumulative, and
shall be in addition to and not exclusive of other remedies available under or
pursuant to the Investment Agreement, at law, or in equity. The exercise or
waiver by the Holder of any right or remedy available under this Note shall not
be deemed to be a waiver of any other right or remedy available under this Note,
the Investment Agreement, at law, or in equity.

8.       MISCELLANEOUS.

         (a). Whenever used herein, the singular includes the plural and the
         plural includes the singular. The term "Maker" means the corporation
         named in the opening paragraph hereof and its successors and assigns.

         (b). Ohio law shall govern the interpretation, construction, and
         enforcement of this Note and all transactions contemplated hereby,
         notwithstanding any state's choice of law rules to the contrary.

         (c). The Holder, by acceptance of this Note, hereby represents and
         warrants that (i) this Note has been acquired by the Holder for
         investment only and not for resale or distribution hereof and (ii) the
         Holder is an "accredited investor" as defined in Rule



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         501(a) under the Securities Act of 1933, as amended (the "Act"). The
         Holder, by acceptance of this Note, further understands, covenants and
         agrees that the Maker is under no obligation and has made no commitment
         to provide for registration of this Note under the Act or state
         securities laws, or to take such steps as are necessary to permit the
         sale of this Note without registration under those laws.

         (d). The captions of the sections of this Note are solely for
         convenient reference and shall not be deemed to affect the meaning or
         interpretation of any provision of this Note.

IN WITNESS WHEREOF, the Maker has executed, acknowledged and delivered this Note
as of the day and year first above written.

WATERLINK, INC.

By: /s/ Mark E. Brody
  Mark E. Brody, Chief Financial Officer

Accepted and agreed to as of this 18th day of January, 2001:

BRANTLEY VENTURE PARTNERS III, L.P.
By:   BRANTLEY VENTURE MANAGEMENT III, L.P., as General Partner
By:   PINKAS FAMILY PARTNERS, L.P., a General Partner

By:  /s/ Robert P. Pinkas
  Robert P. Pinkas, General Partner