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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-27460
PERFORMANCE TECHNOLOGIES, INCORPORATED
(Exact name of registrant as specified in its charter)
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Delaware 16-1158413
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
14620
315 Science Parkway, Rochester New York (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (716) 256-0200
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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 .
The number of shares outstanding of the registrant's common stock was
4,798,226 as of November 12, 1996.
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<PAGE>
Performance Technologies, Incorporated and Subsidiaries
Index to Form 10 Q/A
For the Quarter Ended September 30, 1996
Part II. Other Information
Item 6. Exhibits
Exhibit 10.1 - Credit Agreement dated as of October 31, 1996
between Performance Technologies, Inc. and The Chase Manhattan
Bank.
Exhibit 10.2 - Guaranty Agreement dated as of October 31, 1996
between UconX Corporation and The Chase Manhattan Bank.
Signatures
<PAGE>
CREDIT AGREEMENT
dated as of October 31, 1996
PERFORMANCE TECHNOLOGIES, INCORPORATED
and
THE CHASE MANHATTAN BANK
<PAGE>
Page
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS 1
Section 1.01. Definitions 1
Section 1.02. Accounting Terms 11
Section 1.03. Subsidiaries 11
ARTICLE 2. THE CREDIT 11
Section 2.01. Loans 11
Section 2.02. Purpose 12
Section 2.03. Changes of Commitment 12
Section 2.04. Extension of Revolving Credit Termination Date 12
Section 2.05. Letters of Credit 13
Section 2.06. Facility Fee 13
ARTICLE 3. REPAYMENTS; INTEREST; LATE FEES, PREPAYMENTS 13
Section 3.01. Repayment of Loans 13
Section 3.02. Interest 14
Section 3.03. Late Fees 14
Section 3.04. Prepayments 14
ARTICLE 4. PAYMENTS; COMPUTATIONS 15
Section 4.01. Payments 15
Section 4.02. Computations 15
Section 4.03. Certain Notices 15
Section 4.04. Minimum Amounts 16
ARTICLE 5. YIELD PROTECTION AND ILLEGALITY 17
Section 5.01. Additional Costs 17
Section 5.02. Limitation on Types of Loans 18
Section 5.03. Illegality 19
Section 5.04. Certain Conversions Pursuant to 5.01 and 5.03 19
Section 5.05. Compensation 19
Section 5.06. Survival 20
ARTICLE 6. CONDITIONS PRECEDENT 20
Section 6.01. Initial Conditions 20
Section 6.02. Additional Conditions Precedent 21
ARTICLE 7. REPRESENTATIONS AND WARRANTIES 21
Section 7.01. Incorporation, Good Standing and Due Qualification 21
Section 7.02. Corporate Power and Authority; No Conflicts 21
Section 7.03. Legally Enforceable Agreements 22
Section 7.04. Litigation 22
Section 7.05. Financial Statements 22
Section 7.06. ERISA 23
Section 7.07. Subsidiaries and Ownership of Stock 23
Section 7.08. Existing Credit Arrangements and Existing Liens 23
()
Section 7.09. Regulation U 23
Section 7.10. Compliance With Laws 24
Section 7.11. Operation of Business 24
Section 7.12. Hazardous Materials 24
Section 7.13. No Default on Outstanding Judgments or Orders 25
Section 7.14. No Defaults on Other Agreements 25
Section 7.15. Labor Disputes and Acts of God 25
Section 7.16. Governmental Regulation 25
Section 7.17. Partnerships 25
Section 7.18. No Forfeiture 25
Section 7.19. Solvency 25
ARTICLE 8. AFFIRMATIVE COVENANTS 26
Section 8.01. Maintenance of Existence 26
Section 8.02. Conduct of Business 27
Section 8.03. Maintenance of Insurance 27
Section 8.04. Compliance with Laws 27
Section 8.05. Right of Inspection 27
Section 8.06. Reporting Requirements 28
Section 8.07. Audits 32
Section 8.08. Lease Financings 32
ARTICLE 9. NEGATIVE COVENANTS 32
Section 9.01. Debt 32
Section 9.02. Guarantees, Etc 33
Section 9.03. Liens 33
Section 9.04. Investments 33
Section 9.05. Sale of Assets 34
Section 9.06. Mergers, Etc 34
Section 9.07. Acquisitions 34
Section 9.08. No Activities Leading to Forfeiture 34
Section 9.09. Creation of Subsidiaries 34
Section 9.10. No Material Change 34
ARTICLE 10. FINANCIAL COVENANTS 34
Section 10.01. Leverage Ratio 35
Section 10.02. Cash Flow Coverage Ratio 35
Section 10.03. Income or Loss 35
Section 10.04. Current Ratio 35
ARTICLE 11. EVENTS OF DEFAULT 35
Section 11.01. Events of Default 35
Section 11.02. Remedies 39
ARTICLE 12. MISCELLANEOUS 39
Section 12.01. Amendments and Waivers 39
Section 12.02. Survival 39
Section 12.03. Usury 39
Section 12.04. Expenses 40
Section 12.05. Assignment; Participations 40
Section 12.06. Notices 40
Section 12.07. Set-Off 41
Section 12.08. Jurisdiction; Immunities 41
Section 12.09. Captions 42
Section 12.10. Severability 42
Section 12.11. Counterparts 42
Section 12.12. Governing Law 42
EXHIBIT B
ANNUAL COMPLIANCE CERTIFICATE
<PAGE>
CREDIT AGREEMENT dated as of October 31, 1996, between PERFORMANCE
TECHNOLOGIES, INCORPORATED, a corporation organized under the laws of Delaware
(the "Borrower") and THE CHASE MANHATTAN BANK, a banking corporation organized
under the laws of the State of New York (the "Bank").
The Borrower desires that the Bank extend credit as provided herein, and
the Bank is prepared to extend such credit upon the terms hereof. Accordingly,
the Borrower and the Bank hereby agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have the same
meaning when used in the plural and vice versa):
"Acquisition" means any transaction pursuant to which the Borrower or any
of its Subsidiaries (a) acquires equity securities (or warrants, options or
other rights to acquire such securities) of any Person other than the Borrower
or any Person which is not then a Subsidiary of the Borrower, pursuant to a
solicitation of tenders therefor, or in one or more negotiated block, market or
other transactions not involving a tender offer, or a combination of any of the
foregoing, or (b) makes any Person a Subsidiary of the Borrower, or causes any
such Person to be merged into the Borrower or any of its Subsidiaries, in any
case pursuant to a merger, purchase of assets or any reorganization providing
for the delivery or issuance to the holders of such Person's then outstanding
securities, in exchange for such securities, of cash or securities of the
Borrower or any of its Subsidiaries, or a combination thereof, or (c) purchases
all or substantially all of the business or assets of any Person.
"Adjusted Net Profit" means for any period and in respect of any Person the
sum of (i) the net income of such Person (after taxes) computed in accordance
with GAAP and as reported for such period on such Person's statements of income
and cash flow (or similar statements), plus (ii) all noncash expense items,
including the amount reported as depreciation and the amount reported as
amortization of intangible assets on such statements and computed in accordance
with GAAP.
"Affiliate" means any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower or any of its
Subsidiaries; (b) which directly or indirectly beneficially owns or holds 5% or
more of any class of voting stock of the Borrower or any Subsidiary thereof; (c)
5% or more of the voting stock of which is directly or indirectly beneficially
owned or held by the Borrower or Subsidiary thereof; or (d) which is a
partnership in which the Borrower or any Subsidiary thereof is a general
partner. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, Schedules and the like
refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Annual Date" means the anniversary of the date of this Agreement.
"Applicable Margin" means, (a) with respect to each Loan, 0% per year on
Prime Loans and 1.5% per year on Libor Loans.
"Banking Day" means any day on which commercial banks are not authorized or
required to close in Rochester, New York.
"Borrowed Money Obligation" means and includes any obligation for the
payment of borrowed cash, including any sale and lease-back or similar financing
device or scheme by a Person in respect of assets owned by such Person prior to
such financing, but excluding any obligation for payment under any lease,
installment purchase or other title retention agreement by which a Person
acquires the ownership or right to use property not previously included in such
Person's assets in accordance with GAAP.
"Capital Expenditures" means for any period the Dollar amount of gross
expenditures (including obligations under Capital Leases) made for fixed assets,
real property, plant and equipment, and all renewals, improvements and
replacements thereto (but not repairs thereof) which are deemed to be capital
expenditures in accordance with GAAP and which are incurred during such period.
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means the obligation of the Bank to make the Loans and extend
Letters of Credit under this Agreement in an aggregate principal amount up to
$3,000,000, as such amount may be reduced or otherwise modified from time to
time.
"Consolidated Adjusted Net Profit" means for any period the Adjusted Net
Profit of the Borrower and its Consolidated Subsidiaries on a consolidated basis
as determined in accordance with GAAP.
"Consolidated Capital Expenditures" means for any period the dollar amount
of gross expenditures (including Capital Lease Obligations) made for fixed
assets, real property, plant and equipment, and all renewals, improvements and
replacements thereto (but not repairs thereof) which are deemed to be capital
expenditures by the Borrower and its Consolidated Subsidiaries on a consolidated
bases as determined in accordance with GAAP and which are incurred during such
period.
"Consolidated Current Assets" means all assets of Borrower and its
Consolidated Subsidiaries on a consolidated basis which should, in accordance
with GAAP, be classified as current assets, but in any event excluding any
assets which are pledged or deposited as security for, or for the purpose of
paying, any Debt other than the Loans.
"Consolidated Current Liabilities" means all Indebtedness of Borrower and
its Consolidated Subsidiaries on a consolidated basis which should, in
accordance with GAAP, be classified as current liabilities after eliminating
inter-company items in accordance with GAAP, but in any event excluding the
Loans.
"Consolidated Current Portion of Funded Debt" means the principal payments
(including sinking fund payments or redemptions) in respect of Funded Debt of
the Borrower and its Consolidated Subsidiaries on a consolidated basis which
constitute current liabilities as determined in accordance with GAAP and as such
item appears on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries.
"Consolidated Income" means, for any fiscal period, the income (or loss) of
the Borrower and its Subsidiaries on a consolidated after-tax basis computed in
accordance with GAAP and as reported on the Borrower's statements of income and
retained earnings (or similar statements).
"Consolidated Subsidiary" means, in respect of any Person, any Subsidiary
the accounts of which are or are required to be consolidated with the accounts
of such Person in accordance with GAAP, excluding only UconX Corporation .
"Consolidated Tangible Net Worth" means, as at any date, the sum of the
following items in respect of the Borrower and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP):
a. the amount of capital stock, plus
b. the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit), minus
c. the sum of the following: cost of treasury shares and the book value of
all assets which should be classified as intangibles (without duplication of
deductions in respect of items already deducted in arriving at surplus and
retained earnings) but in any event including goodwill, minority interests,
research and development costs, trademarks, trade names, copyrights, patents and
franchises, unamortized debt discount and expense, all reserves and any write-up
in the book value of assets resulting from a revaluation thereof subsequent to
December 31, 1995, and minus
d. the amount of all retained earnings subsequent to December 31, 1995
derived from unusual items, including without limitation all sales of assets
other than inventory.
"Consolidated Total Liabilities" means the Total Liabilities of the
Borrower and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Current Termination Date" means the Revolving Credit Termination Date as
in effect from time to time under this Agreement.
"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) indebtedness for the deferred purchase price of property
or services (except trade payables in the ordinary course of business); (c)
Unfunded Vested Liabilities of such Person (if such Person is not the Borrower,
determined in a manner analogous to that of determining Unfunded Vested
Liabilities of the Borrower); (d) the face amount of any outstanding letters of
credit issued for the account of such Person; (e) obligations arising under
acceptance facilities; (f) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person,
or otherwise to assure a creditor against loss; (g) obligations secured by any
Lien on property of such Person; and (h) obligations of such Person as lessee
under Capital Leases.
"Default" means any event which with the giving of notice or lapse of time,
or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to the
extent permitted by law, any other amount payable by the Borrower under this
Agreement or the Note, a rate per annum equal to 4% above the Prime Rate as in
effect from time.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances and rules relating to the environment or
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Borrower is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Event of Default" has the meaning given such term in 11.01.
"Existing Liens" means all Liens against the property or assets of the
Borrower and all Subsidiaries on the date of this Agreement and as set forth on
Schedule 2 hereto.
"Facility Documents" means this Agreement, the Note, the Guaranties and the
Security Agreements.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which could reasonably be expected to have a Material Adverse
Effect.
"Funded Debt" means, with respect to any Person, all Debt of such Person
for money borrowed which by its terms matures more than one year from the date
as of which such Debt is incurred, and any Debt of such Person for money
borrowed maturing within one year from such date which is renewable or
extendable at the option of the obligor to a date beyond one year from such date
(whether or not theretofore renewed or extended), including any such Debt
renewable or extendable at the option of the obligor under, or payable from the
proceeds of other Debt which may be incurred pursuant to, the provisions of any
revolving credit agreement or other similar agreement.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in 7.05
(except for changes concurred in by the Borrower's independent public
accountants).
"Guarantor" means UconX and any other Person who hereafter guaranties
payment or collection of the Loans or any part thereof.
"Guaranties" means the Guaranty Agreement of even date herewith granted by
UconX and all other guaranty agreements hereafter granted to the Bank by any
Person whereby such Person guaranties payment or collection of the Loans or any
part thereof.
"Interest Period" shall mean with respect to any Libor Loan, the period
commencing on the date such Loan is made and ending on the numerically
corresponding day in the first, second or third calendar month thereafter, as
the Borrower may select as provided in 4.03 hereof, except that each such
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of such
first, second or third calendar month. Notwithstanding the foregoing, each
Interest Period which would otherwise end on a day which is not a Banking Day
shall end on the next succeeding Banking Day or if such next succeeding Banking
Day falls in the next succeeding calendar month, on the next preceding Banking
Day.
"Lending Office" means the office of the Bank designated as such underneath
the signature of the officer of the Bank executing this Agreement. "Letters of
Credit" means all letters of credit or banker's acceptances now existing or
hereafter issued by Chase for the Borrower as the account party from time to
time.
"Libor Base Rate" means, with respect to each Libor Loan, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by the
Reference Bank at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) two Banking Days prior to the first day of the Interest Period for
such Loans for the offering by the Reference Bank to leading banks in the London
interbank market of Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the principal amount of such Libor Loan
made by the Bank to which such Interest Period relates.
"Libor Loans" means Loans the interest rates on which are determined on the
basis of the Libor Base Rate.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loans" means the revolving credit loans made by the Bank to the Borrower
pursuant to 2.01 hereof, and shall be deemed to include any Reimbursement
Obligation, and "Loan" shall mean any of the Loans.
"Material Adverse Effect" means a material adverse effect on the financial
condition of the Borrower and its Subsidiaries taken as a whole in a Dollar
amount which equals or exceeds 5% of the Borrower's Consolidated Tangible Net
Worth without regard to whether such Dollar amount is reported on the Borrower's
consolidated financial statements in accordance with GAAP, or any change in the
nature of the business of the Borrower and Subsidiaries taken as a whole.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of ERISA
to which contributions have been made by the Borrower or any ERISA Affiliate and
which is covered by Title IV of ERISA.
"Note" means the Revolving Credit Note in the form of Exhibit A annexed
hereto.
"Payment Office" means the office of the Bank designated as such underneath
the signature of the officer of the Bank executing this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means and includes with respect to the Borrower
and its Subsidiaries:
(i) in the case of real properties, easements, restrictions, exceptions,
reservations or defects which, in the aggregate, do not interfere materially
with the continued use of such properties for the purposes for which they are
used and do not affect materially the value thereof;
(ii) liens, if contested in good faith by appropriate proceedings;
(iii) pledges or deposits to secure obligations under workmen's
compensation laws or similar legislation or to secure performance in connection
with bids, tenders and contracts (other than contracts for the payment of
borrowed money) to which the Borrower or any Subsidiary of the Borrower is a
party;
(iv) deposits to secure public or statutory obligations of the Borrower and
any Subsidiary of the Borrower;
(v) materialmen's mechanics', carriers', workmen's or other like liens
arising in the ordinary course of business, or deposits of cash or United States
obligations to obtain the release of such liens;
(vi) deposits to secure surety or appeal bonds in proceedings to which the
Borrower or any Subsidiary of the Borrower is a party;
(vii) existing leases by the Borrower or the Borrower of real and personal
property; and
(viii) purchase money security interests for Debt not exceeding $1,000,000
in the aggregate principal amount incurred during any fiscal year of the
Borrower; and
(ix) Liens on inventory or equipment securing Subordinated Debt, provided
that such Liens are subordinated to the Bank's Liens under a subordination
agreement in form and substance reasonably satisfactory to the Bank which
provides for no foreclosure on other realization of such subordinated Liens
prior to the Bank's foreclosure or other realization of its Liens.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by the Borrower or any ERISA Affiliate
and which is covered by Title IV of ERISA, other than a Multiemployer Plan.
"Prime Loans" means Loans the interest rates on which are determined on the
basis of the Prime Rate.
"Prime Rate" means that rate of interest from time to time announced by the
Bank at its Principal Office as its prime commercial lending rate.
"Principal Office" means the principal office of the Bank, presently
located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, other than an
interest as lessee under a true lease.
"Reference Bank" shall mean the principal London office of The Chase
Manhattan Bank.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means any change after the date of this Agreement in
United States federal, state, municipal or foreign laws or regulations
(including without limitation Regulation D) or the adoption or making after such
date of any interpretations or directives applying to a class of banks including
the Bank of or under any United States, federal, state, municipal or foreign
laws or regulations by any court of competent jurisdiction or governmental or
monetary authority charged with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA as to which events the PBGC by regulation has not waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event, provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall be a Reportable Event
regardless of any waivers given under Section 412(d) of the Code.
"Reimbursement Obligation" means any obligation of the Borrower to
reimburse the Bank as an issuer of a Letter of Credit for any amount paid by
Bank from time to time pursuant to and under any Letter of Credit.
"Revolving Credit Termination Date" means the second anniversary of the
date of this Agreement or such later date to which the Revolving Credit
Termination Date then in effect shall be extended in accordance with the
provisions of 2.04 hereof; provided that if such date is not a Banking Day, the
Revolving Credit Termination Date shall be the next succeeding Banking Day.
"Security Agreements" means and includes, collectively, the Security
Agreements granted by the Borrower to the Bank dated as of April 3, 1985, April
13, 1993, and June 17, 1993, all amendments and modifications thereto, and all
further security agreements which may hereafter be granted by any Person to the
Bank as security for payment of the Loans or any part thereof.
"Subordinated Debt" means Debt which is unsecured or which is secured only
by a Permitted Encumbrance and which shall be subordinated in right of payment
to all Debt of the Borrower and the Guarantors to the Bank (the "Senior Debt")
under a subordination agreement in form and substance satisfactory to the Bank
which permits scheduled payments of principal and interest on the Subordinated
Debt so long as any Senior Debt is outstanding and permits such scheduled
payments of principal and interest only if no default under the Senior Debt
shall have occurred or shall be created by such payment.
"Subsidiary" means, with respect to any Person, any corporation or other
Person of which at least one-half of the securities or other ownership interests
having ordinary voting power (absolutely or contingently) for the election of
directors or other persons performing similar functions are at the time owned
directly or indirectly by such Person.
"Total Liabilities" means, in respect of any Person, the total liabilities
of such Person computed in accordance with GAAP and as such item is reported
from time to time on such Person's balance sheets.
"Unfunded Vested Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all benefit liabilities (within the
meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair market
value of all Plan assets allocable to such benefit liabilities, as determined on
the most recent valuation date of the Plan and in accordance with the provisions
of ERISA for calculating the potential liability of the Borrower or any ERISA
Affiliate under Title IV of ERISA.
"UconX" means UconX Corporation, a Delaware corporation which is a
Subsidiary of the Borrower.
"UconX Loan" means those certain loans made to UconX by the Borrower
pursuant to the Line of Credit and Security Agreement between UconX and the
Borrower dated as of September 1, 1992.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
Section 1.03. Subsidiaries. All references to Subsidiaries or Consolidated
Subsidiaries shall be deemed to mean if any shall exist. For so long as Borrower
has no Subsidiary, all definitions and covenants referring to Borrower and its
Subsidiaries or Consolidated Subsidiaries on a consolidated basis and all
references to consolidated and consolidating financial statements shall be
deemed to refer to Borrower alone and to Borrower's financial statements alone,
respectively, but shall remain applicable in all other respects.
ARTICLE 2. THE CREDIT.
Section 2.01. Loans. The Bank agrees, on the terms of this Agreement, to
make one or more revolving credit loans and issue Letters of Credit to the
Borrower during the period from and including the date hereof to and including
the Revolving Credit Termination Date in amounts which, when added to the
aggregate amount of all Letter of Credit Exposure and the principal amount of
all Loans outstanding hereunder shall not exceed the amount of the Bank's
Commitment as then in effect. Subject to the terms of this Agreement, during
such period the Borrower may borrow, repay and reborrow up to the amount of the
Commitment. The Loans may be Prime Loans or Libor Loans (each a "type" of Loan).
The Borrower shall give the Bank notice of each borrowing to be made under this
2.01 (other than Loans created as a Reimbursement Obligation) as provided in
4.03 hereof. The Loans made by the Bank (including Loans created as
Reimbursement Obligations) shall be evidenced by the promissory note of the
Borrower in substantially the form of Exhibit A hereto, dated as of the Closing
Date, payable to the order of the Bank in a principal amount of $3,000,000, and
otherwise duly completed. The amount, type and date of each Loan made by the
Bank, and all payments made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of the Note,
endorsed by the Bank on the schedule attached to the Note or any continuation
thereof, provided, however, that the failure of the Bank to endorse the schedule
shall not affect or impair the Borrower's obligation to repay Loans and any
interest thereon or other amounts due hereunder. The proceeds of the Loans to be
made by the Bank (other than Loans created as Reimbursement Obligations) shall,
subject to the terms and conditions of this Agreement, be made available to the
Borrower by depositing such amount, in immediately available funds, in an
account of the Borrower maintained with the Bank.
Section 2.02. Purpose. The Borrower will use the proceeds of the Loans as
working capital for its general corporate purposes and the acquisition of assets
in the ordinary course of the Borrower's business.
Section 2.03. Changes of Commitment. The Borrower shall have the right to
terminate or reduce the amount of the Commitment at any time or from time to
time upon not less than 30 days' prior notice to the Bank of each such
termination or reduction, which notice shall specify the effective date thereof
(which shall be a Banking Day) and the amount of any such reduction and shall be
irrevocable and effective only upon receipt by the Bank. The Commitment once
terminated or reduced may not be reinstated.
Section 2.04. Extension of Revolving Credit Termination Date. The Borrower
may, by written request to the Bank not less than 60 and not more than 90 days
prior to the Current Termination Date, request that such Current Termination
Date be extended to the Annual Date next subsequent to such Current Termination
Date. Within 30 days following receipt of such request the Bank will advise the
Borrower in writing whether it agrees to or denies such extension, provided that
if the Bank shall fail to so advise the Borrower it will be deemed to have
denied such request. If the Bank shall agree thereto, such extension shall
become effective as of such Current Termination Date only upon satisfaction of
the following conditions as of such Current Termination Date, in form and
substance satisfactory to the Bank, unless expressly waived by the Bank: (a) no
Default shall have occurred and be continuing; (b) the representations and
warranties made by the Borrower in 7 hereof shall be true on and as of such date
with the same force and effect as if made on and as of such date; (c) the Bank
and the Borrower shall have executed an extension agreement; and (d) the
Borrower shall have furnished to the Bank such corporate documents and/or
opinions of counsel with respect to such extension, as the Bank may reasonably
request. Each extension request by the Borrower under this 2.04 shall constitute
a certification by the Borrower to the effect set forth in clauses (a) and (b)
of the preceding sentence (both as of the date of such notice and, unless the
Borrower otherwise notifies the Bank prior to the Current Termination Date, as
of the Current Termination Date).
Section 2.05. Letters of Credit. Subject to the terms and conditions of
this Agreement, Bank shall, upon the request of the Borrower and payment of the
Bank's customary fees and expenses in connection therewith, issue Letters of
Credit from time to time from and including the date hereof to but excluding the
Revolving Credit Termination Date up to but not exceeding the lesser of (i) the
aggregate unused amount of the Commitment (after subtracting the Letter of
Credit Exposure), or (ii) the difference between $500,000 and the amount of the
Letter of Credit Exposure which exists immediately prior to the issuance of such
Letter of Credit. The Borrower agrees that each Reimbursement Obligation shall,
immediately upon its creation, be and become a Prime Loan hereunder.
Section 2.06. Facility Fee. Borrower shall pay to Bank in advance on each
Annual Date a yearly Facility Fee of $5,000 if the Facility is to remain in
effect, in whole, subsequent to such Annual Date; provided however that if the
Facility shall be modified or restructured prior to the occurrence of a Default
or an Event of Default and if the Bank remains the lender under such modified or
restructured credit facility, the Bank shall refund to the Borrower a pro rata
portion of the facility fee which the Borrower has paid in advance pursuant to
this 2.06 for the following year based upon the remaining portion of such year
for which the Facility shall not remain in effect. Nothing in this 2.06 shall be
deemed to prevent the Bank from charging a fee which is similar to the Facility
Fee and which is mutually agreed to in writing by the Borrower under any
modified or restructured credit facility.
ARTICLE 3. REPAYMENTS; INTEREST; LATE FEES, PREPAYMENTS. Section 3.01.
Repayment of Loans. All Loans shall be due and payable in full, principal and
interest, on the Revolving Credit Termination Date. In addition, at the end of
each Interest Period, the Borrower will either (i) pay to the Bank the principal
of each Loan which is a Libor Loan, or (ii) convert the principal amount of such
Libor Loan to another Loan hereunder as continuing and subsisting indebtedness.
Section 3.02. Interest. The Borrower will pay to the Bank interest on the
unpaid principal amount of each Loan made by the Bank for the period commencing
on the date of such Loan to but excluding the date such Loan shall be paid in
full, at the following rates per annum:
(a) During such periods such Loan is a Prime Loan, the Prime Rate plus the
Applicable Margin; and
(b) During such periods such Loan is a Libor Loan, for each Interest Period
relating thereto, the Libor Rate for such Libor Loan for such Interest Period
plus the Applicable Margin.
Notwithstanding the foregoing, after an Event of Default and upon written
demand by the Bank, the Borrower will pay to the Bank interest at the applicable
Default Rate on any principal of any Loan made by the Bank, and (to the fullest
extent permitted by law) on any other amount (other than interest) payable to
the Bank by the Borrower hereunder or under the Note, which shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise), for
the period commencing on the date of such written demand, until the same is paid
in full. Accrued interest on each Loan shall be payable monthly on the first day
of each month and upon the payment or prepayment thereof (but only on the
principal so paid or prepaid), except that interest payable at the Default Rate
shall be payable from time to time when due on demand of the Bank. Promptly
after the determination of any interest rate provided for herein or any change
therein, the Bank shall notify the Borrower thereof.
Section 3.03. Late Fees. If any payment of principal or interest on any
Loan is not received by the Bank within five days after the due date thereof, a
late fee shall be imposed on such payment. The amount of the late fee shall be
(i) in respect of payments of interest, 1% of the amount of the payment which
was due, and (ii) in respect of payments of principal, 4% of the amount of the
payment which was due, provided further that in either case such late fee shall
not be less than $25 nor more than $100.
Section 3.04. Prepayments.
(a) The Borrower shall prepay upon demand by the Bank that portion of the
outstanding principal balance of the Loans, if any, which exceeds the
Commitment.
(b) The Borrower shall have the right to prepay Loans at any time or from
time to time, provided that: (i) the Borrower shall give the Bank notice of each
such prepayment as provided in 4.03 hereof; and (ii) no Libor Loan may be
prepaid on any day other than the last day of an Interest Period for such Libor
Loan except upon payment of a penalty computed in accordance with 5.05 hereof.
ARTICLE 4. PAYMENTS; COMPUTATIONS.
Section 4.01. Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement and the Note shall be made in Dollars, in immediately
available funds, to the Bank at the Payment Office for account of the Lending
Office, not later than 2:30 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Banking Day). The Borrower
shall, at the time of making each payment under this Agreement or the Note,
specify to the Bank the Loans or other amounts payable by the Borrower hereunder
to which such payment is to be applied, and if the Borrower fails to so specify
or if an Event of Default has occurred and is continuing, the Bank may apply
such payment in such manner as it may determine to be appropriate, provided that
the Bank shall apply such payments first to the principal of Prime Rate loans,
then to the principal of any other Loans and then to interest on any Loans. If
the due date of any payment under this Agreement or the Note would otherwise
fall on a day which is not a Banking Day, such date shall be extended to the
next succeeding Banking Day and interest shall be payable for any principal so
extended for the period of such extension.
Section 4.02. Computations. Interest on Libor Loans shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable, and
interest on Prime Loans shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. Changes in
interest rate on Prime Loans resulting from changes in the Prime Rate shall be
effective for the full day which constitutes the effective date for such change
in the Prime Rate.
Section 4.03. Certain Notices. Notices by the Borrower to the Bank of the
termination or reduction of the Commitment, and of borrowings and prepayments of
Loans shall be irrevocable and shall be effective only if received by the Bank
not later than 12:00 noon New York time on the date, or the number of days prior
to the date, of the relevant termination, reduction, borrowing or prepayment or
the first day of such Interest Period specified below:
Date or
Number of
Type of Notice Days Prior
Termination or reduction of
Commitment 30 days
Borrowing or prepayment of
Prime Loans Same Banking Day
Borrowing or prepayment of
Libor Loans 2 Banking Days
Each such notice of termination or reduction shall specify the amount of
the Commitment to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the Loans to be borrowed or prepaid and the amount
(subject to 4.04 hereof) and type of the Loans to be borrowed or prepaid, the
date of borrowing or prepayment (which shall be a Banking Day), and the duration
of the Interest Period. Each notice required hereunder shall be in writing,
except that a notice of borrowing may be given orally on the telephone provided
it is confirmed in writing within two Banking Days. In the event that the
Borrower fails to notify the Bank in a timely manner as set forth above of any
Libor Loan borrowing to replace any Libor Loan having an expiring Interest
Period, such Libor Loan will be automatically converted into a Prime Loan on the
last day of the then current Interest Period for such Libor Loan.
Section 4.04. Minimum Amounts. Except conversions or prepayments made
pursuant to 5 hereof, each borrowing of principal of Loans shall be in an amount
at least equal to $25,000, and each prepayment of principal of Loans shall be in
an amount at least equal to $25,000 (borrowings or prepayments in the case of
Libor Loans having different Interest Periods outstanding at the same time
hereunder to be deemed separate borrowings and prepayments for purposes of the
foregoing, one for each distinct Interest Period). Anything in this Agreement to
the contrary notwithstanding, the aggregate principal amount of Libor Loans of
each type having the same Interest Period shall be at least equal to $300,000
and, if any Libor Loans would otherwise be in a lesser principal amount for any
period, such Libor Loans shall be Prime Loans during such period.
ARTICLE 5. YIELD PROTECTION AND ILLEGALITY.
Section 5.01. Additional Costs.
(a) The Borrower shall pay directly to the Bank from time to time such
amounts as the Bank may reasonably determine to be necessary to compensate it
for any costs which the Bank determines are attributable to its making or
maintaining of any Libor Loans or its obligation to make any Libor Loans, or any
reduction in any amount receivable by the Bank hereunder in respect of any Libor
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to the Bank under this Agreement or the Note in respect of any Libor
Loans (other than taxes imposed on the overall net income of the Bank or of its
Lending Office for any Libor Loans by the jurisdiction in which the Bank has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, the
Bank (including any of such Loans or any deposits referred to in the definition
of "Libor Base Rate" in 1.01 hereof, but excluding any reserve requirement or
deposit insurance assessment already included in the calculation of the Libor
Rate); or (iii) imposes any other condition affecting this Agreement or the Note
(or any of such extensions of credit or liabilities) other than such portion of
the Agreement and the Note which pertains to Prime Loans. If the Bank requests
compensation from the Borrower under this 5.01(a), the Borrower may, by notice
to the Bank, require that the Loans of the type with respect to which such
compensation is requested be converted into Prime Loans in accordance with the
provisions of 5.04 hereof.
(b) Without limiting the effect of the provisions of 5.01(a) hereof, in the
event that, by reason of any Regulatory Change, the Bank either (i) incurs
Additional Costs based on or measured by the excess above a specified level of
the amount of a category of deposits or other liabilities of the Bank which
includes deposits by reference to which the interest rate on Libor Loans is
determined as provided in this Agreement or a category of extensions of credit
or other assets of the Bank which includes Libor Loans or (ii) becomes subject
to restrictions on the amount of such a category of liabilities or assets which
it may hold, then, if the Bank so elects by notice to the Borrower, the
obligation of the Bank to make further Libor Loans shall be suspended until such
Regulatory Change ceases to be in effect.
(c) Without limiting the effect of the foregoing provisions of this 5.01
(but without duplication), the Borrower shall pay directly to the Bank from time
to time on request such amounts as the Bank may reasonably determine to be
necessary to compensate the Bank for any costs which it determines are
attributable to the maintenance by the Bank (or any Lending Office) pursuant to
any law or regulation or any interpretation, directive or request (whether or
not having the force of law) of any court or governmental or monetary authority
following any Regulatory Change, of capital in respect of its Commitment or
Loans (such compensation to include, without limitation, an amount equal to any
reduction of the rate of return on assets or equity of the Bank (or any Lending
Office) which the Bank could have achieved but for such law, regulation,
interpretation, directive or request).
(d) The Bank will notify the Borrower of any event occurring after the date
of this Agreement that will entitle the Bank to compensation under paragraph (a)
or (c) of this 5.01 or to convert Loans under 5.04 as promptly as practicable,
but in any event within 30 days after the Bank obtains actual knowledge thereof;
provided, however, that if the Bank fails to give such notice within 30 days
after it obtains actual knowledge of such an event, the Bank shall, with respect
to compensation payable pursuant to this 5.01 in respect of any costs resulting
from such event, only be entitled to payment under this 5.01 or 5.04 for costs
incurred from and after the date that the Bank does give such notice; and
provided further, that the Bank will designate a different Lending Office for
the Loans of the Bank affected by such event if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
opinion of the Bank, be disadvantageous to the Bank, except that the Bank shall
have no obligation to designate a Lending Office located in the United States of
America. The Bank will furnish to the Borrower a certificate setting forth the
basis and amount of each request by the Bank for compensation under paragraph
(a) or (c) of this 5.01, which amount will be determined in good faith on an
equitable basis such as, if appropriate, an allocation measured by the principal
amount of Loans to the Borrower, or commitments to make Loans to the Borrower,
then outstanding in relation to the total amount of loans, or commitments to
make loans, made by the Bank of the type or character which has given rise to
the Additional Costs. Determinations and allocations by the Bank for purposes of
this 5.01 of the effect of any Regulatory Change pursuant to 5.01(a) or (b)
hereof, or of the effect of capital maintained pursuant to 5.01(c) hereof, on
its costs or rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of the amounts
required to compensate the Bank under this 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable basis.
Section 5.02. Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if the Bank reasonably determines (which determination shall be
conclusive) that interest rates for the relevant deposits referred to in the
definition of "Libor Base Rate" in 1.01 hereof are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining
rates of interest for Libor Loans as provided herein, then the Bank shall give
the Borrower prompt notice thereof, and so long as such condition remains in
effect the Bank shall be under no obligation to make further Libor Loans.
Section 5.03. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Bank or its Lending
Office to honor its obligation to make or maintain Libor Loans hereunder, then
the Bank shall promptly notify the Borrower thereof and the Bank's obligation to
make Libor Loans shall be suspended until such time as the Bank may again make
and maintain Libor Loans and the Bank's outstanding Libor Loans shall be
converted into Prime Loans in accordance with 5.04 hereof.
Section 5.04. Certain Conversions Pursuant to 5.01 and 5.03. If the Loans
of the Bank of a particular type (Loans of such type being herein called
"Affected Loans" and such type being herein called the "Affected Type") are to
be converted pursuant to 5.01 or 5.03 hereof, the Affected Loans shall be
automatically converted into Prime Loans on the last day(s) of the then current
Interest Period(s) for the Affected Loans (or, in the case of a conversion
required by 5.01(b) or 5.03 hereof, on such earlier date as the Bank may specify
to the Borrower) and, unless and until the Bank gives notice as provided below
that the circumstances specified in 5.01 or 5.03 hereof which gave rise to such
conversion no longer exist: (a) to the extent that the Bank's Affected Loans
have been so converted, all payments and prepayments of principal which would
otherwise be applied to such Affected Loans shall be applied instead to its
Prime Loans; and (b) all Loans which would otherwise be made by the Bank as
Loans of the Affected Type shall be made instead as Prime Loans. No conversion
pursuant to this 5.04 shall be deemed to be a prepayment in respect of which any
prepayment premium or penalty shall be due, other than compensation which may be
payable under 5.01 and 5.05 (without duplication of compensation).
Section 5.05. Compensation. The Borrower shall pay to the Bank upon request
such amount or amounts as shall be sufficient (in the reasonable opinion of the
Bank) to compensate it for any loss, cost or expense which the Bank determines
are attributable to:
(a) any payment or prepayment of a Libor Loan made by the Bank, or
conversion of a Libor Loan pursuant to 5.04, on a date other than the last day
of the Interest Period for such Loan; or
(b) any failure by the Borrower to borrow a Libor Loan from the Bank on the
date for such borrowing specified in the relevant notice of borrowing given
pursuant to 4.03 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such payment,
prepayment, conversion or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the interest component of the amount the Bank would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by the Bank). A determination of the Bank as to
the amounts payable pursuant to this 5.05 shall be conclusive absent manifest
error.
Section 5.06. Survival. The obligations of the Borrower under this Article
5 shall survive the repayment of the Loans.
ARTICLE 6. CONDITIONS PRECEDENT.
Section 6.01. Initial Conditions. The obligation of the Bank to make the
initial Loan is subject to the condition precedent that the Bank shall have
received on or before the date of such Loan each of the following, in form and
substance satisfactory to the Bank and its counsel:
(a) Facility Documents. The Facility Documents duly executed by the parties
thereto (other than the Bank);
(b) Corporate Supporting Documents. All such secretarial and officer
certificates of the Borrower pertaining to corporate action, incumbency, and
organizational documents as the Bank may reasonably require;
(c) Opinion of Counsel for Borrower and Subsidiaries. A favorable opinion
of counsel for the Borrower and its Subsidiaries, dated the Closing Date in form
and substance satisfactory to the Bank and its counsel;
(d) Insurance. A certificate of insurance evidencing coverage against loss
in respect of the Borrower's inventory in form and substance satisfactory to the
Bank and naming the Bank as loss payee; and
(e) Other Documents. The Borrower shall have furnished to the Bank such
other documents, certificates, statements, opinions of counsel and information
with respect to the transactions contemplated by this Agreement as the Bank or
its counsel may reasonably request.
Section 6.02. Additional Conditions Precedent. The obligation of the Bank
to make the Loans shall be subject to the further conditions precedent that on
the date of each Loan the following statements shall be true: (i) the
representations and warranties contained in Article 7 of this Agreement are true
and correct, in all material respects, on and as of the date of such Loan as
though made on and as of such date; and (ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loan.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 7.01. Incorporation, Good Standing and Due Qualification. The
Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction where failure to qualify could have a Material Adverse Effect.
Section 7.02. Corporate Power and Authority; No Conflicts. The execution,
delivery and performance by the Borrower of the Facility Documents have been
duly authorized by all necessary corporate action and do not and will not: (a)
require any consent or approval of its stockholders; (b) contravene its charter
or by-laws; (c) violate any provision of, or require any filing, registration,
consent or approval under, any law, rule, regulation (including, without
limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower;
(d) result in a breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected (other than as might be limited by the terms of any
document pertaining to the County of Monroe Industrial Development Agency
$1,600,000 1990 Industrial Development Revenue Bonds (C&J
Enterprises/Performance Technologies Incorporated Facility); (e) result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties now owned or hereafter acquired by the Borrower; or (f) cause the
Borrower to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.
Section 7.03. Legally Enforceable Agreements. Each Facility Document is, or
when delivered under this Agreement will be, a legal, valid and binding
obligation of the Borrower or the Guarantor, as the case may be, enforceable
against the Borrower or the Guarantor in accordance with its terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
Section 7.04. Litigation. Except as disclosed to the Bank, there are, as of
the Closing Date, no actions, suits or proceedings pending or, to the knowledge
of any officer of the Borrower, threatened, against or affecting the Borrower
directly before any court, governmental agency or arbitrator, which have a
reasonable likelihood that they may, in any one case or in the aggregate, have a
Material Adverse Effect or materially impair the ability of the Borrower to
perform its obligations under the Facility Documents.
Section 7.05. Financial Statements. The consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries as at December 31, 1995 for the
fiscal year then ended and as at September 30, 1996 for the nine month period
then ended, copies of which have been furnished to the Bank, are complete and
correct and fairly present the financial condition of the Borrower and its
Consolidated Subsidiaries as at such dates and the results of the operations of
the Borrower and its Consolidated Subsidiaries for the periods covered by such
statements, all in accordance with GAAP consistently applied (subject to year
end adjustments in the case of the interim financial statements). There are no
liabilities of the Borrower or any of its Consolidated Subsidiaries, fixed or
contingent, which are material as to the Borrower and its Subsidiaries taken as
a whole but are not reflected in the financial statements or in the notes
thereto, other than liabilities arising in the ordinary course of business since
September 30, 1996 to the Closing Date. No information, exhibit or report
furnished by the Borrower to the Bank in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein not
materially misleading. Since September 30, 1996 to the Closing Date, there has
been no material adverse change in the condition (financial or otherwise),
business or operations of the Borrower and its Subsidiaries taken as a whole.
Section 7.06. ERISA. Each of the Borrower and the ERISA Affiliates has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code, has not incurred
any liability to the PBGC or any Plan aggregating in excess of $100,000 which it
has failed to pay when due, and does not have Unfunded Vested Liabilities in
excess of $100,000.
Section 7.07. Subsidiaries and Ownership of Stock. Schedule 1 is as of the
Closing Date a complete and accurate list of the Subsidiaries of the Borrower,
showing the jurisdiction of incorporation of each and showing the percentage of
the Borrower's ownership of the outstanding stock of each such Subsidiary,
together with all other investments, loans, advances, guaranties or other
liabilities undertaken by the Borrower in respect of such Subsidiary. All of the
outstanding capital stock of each such Subsidiary has been validly issued, is
fully paid and nonassessable and is owned by the Borrower free and clear of all
Liens.
Section 7.08. Existing Credit Arrangements and Existing Liens. Schedule 2
is as of the Closing Date a complete and correct list of all credit agreements,
indentures, guaranties and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of credit in respect
of which the Borrower or any of its Subsidiaries is or may be in any manner
directly or contingently obligated; and the maximum principal or face amounts of
the credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens of any nature given or agreed to be given as security
therefor are correctly described or indicated in such Schedule. Schedule 2 is
also a complete list as of the Closing Date of all Liens pertaining to any and
all property or assets of the Borrower and its Subsidiaries.
Section 7.09. Regulation U. The Borrower warrants as of the date of this
Agreement that it does not own, directly or indirectly any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System), as supplemented from time to time, and the Borrower warrants as of the
date of each Loan that it does not own "margin stock" as of the date of such
Loan having an aggregate fair market value equal to or greater than 25% of the
fair market value of all of the Borrower's assets, unless the Borrower shall
have executed a Form FR U-1 (OMB No. 7100-1115) prior to obtaining the proceeds
of the Loan and, in such case, the Borrower further warrants that the proceeds
of such Loan are not used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any "margin stock".
Section 7.10. Compliance With Laws. Each of the Borrower and its
Subsidiaries have complied in all respects with all applicable laws, rules,
regulations, and orders, including without limitation, compliance with all laws
related to the disposal or handling of toxic waste, and paying before the same
became delinquent all taxes, assessments and governmental charges imposed upon
it or its property, except (a) in the case of taxes, where contested in good
faith and by proper proceedings if appropriate reserves are maintained with
respect thereto, or (b) where the failure to comply with a law (including the
failure to pay taxes, assessments and governmental charges) would not have a
Material Adverse Effect.
Section 7.11. Operation of Business. Each of the Borrower and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto (collectively, "Permits"), to
conduct its business substantially as now conducted and as presently proposed to
be conducted, except where the absence of any Permit would not have a Material
Adverse Effect and, to the best of Borrower's knowledge, neither the Borrower
nor any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
Section 7.12. Hazardous Materials. Except as set forth on Schedule 3
hereto:
(a) Borrower is in substantial compliance with all Environmental Laws
applicable to Borrower and has not received any written notice from any
government alleging that Borrower is not so in compliance, except where
noncompliance would not have a Material Adverse Effect;
(b) Borrower possesses all licenses, permits, registrations and
authorizations required by applicable Environmental Laws for the current
operation of Borrower's business and is in substantial compliance therewith,
except where the failure to possess same or to comply therewith would not have a
Material Adverse Effect; and
(c) To the best of Borrower's knowledge, the Borrower's assets do not
contain asbestos containing materials, polychlorinated biphenyls, urea
formaldehyde, underground storage tanks, or hazardous materials, as defined by
any Environmental Law, which have been discarded or otherwise released by
Borrower in a quantity and manner requiring that notice thereof be given by
Borrower to any government, except where such notice has been given.
Section 7.13. No Default on Outstanding Judgments or Orders. Each of the
Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, or order of any court, arbitrator or federal, state,
municipal or other governmental authority, commission, board, bureau, agency or
instrumentality, domestic or foreign, except where such non-satisfaction or
default is not likely to have a Material Adverse Effect.
Section 7.14. No Defaults on Other Agreements. Neither the Borrower nor any
of its Subsidiaries is in default in any respect in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any agreement or instrument material to its business to which it is a party,
except where such default is not likely to have a Material Adverse Effect.
Section 7.15. Labor Disputes and Acts of God. Neither the business nor the
properties of the Borrower or of any of its Subsidiaries, has been affected
during the previous two years by any strike, lockout or other labor dispute,
materially and adversely affecting such business or properties or the operation
of the Borrower or such Subsidiary.
Section 7.16. Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Investment Company Act of 1940, the Interstate Commerce Act,
the Federal Power Act or any other statute or regulation limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.
Section 7.17. Partnerships. Except as disclosed on Schedule 4 hereto,
neither the Borrower nor any of its Subsidiaries is a partner in any
partnership.
Section 7.18. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and, to the best knowledge of Borrower, no Forfeiture Proceeding
against any of them is pending or threatened.
Section 7.19. Solvency.
(a) The present fair market value of the assets of the Borrower (as a going
concern) after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities, as recorded on the Borrower's consolidated balance sheets
described in 7.05, of the Borrower and its Subsidiaries as they mature.
(b) To the best knowledge of the Borrower, the Property of the Borrower
does not constitute unreasonably small capital for the Borrower to carry out its
business as now conducted and as proposed to be conducted in the immediate
future including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower presently recorded on the
Borrower's consolidated balance sheet when such amounts are required to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages that are currently pending could reasonably be
expected to be rendered at a time when, or in an amount such that, the Borrower
will be unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum reasonable amount of such judgments in
any such actions and the earliest reasonable time at which such judgments might
be rendered). The cash available to the Borrower after taking into account all
other anticipated uses of the cash of the Borrower (including the payments on or
in respect of debt referred to in paragraph (c) of this 7.19), is anticipated to
be sufficient to pay all such judgments promptly in accordance with their terms.
ARTICLE 8. AFFIRMATIVE COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank shall
have any Commitment under this Agreement, the Borrower shall:
Section 8.01. Maintenance of Existence. Preserve and maintain its corporate
existence and good standing in the jurisdiction of its incorporation (which may
be any state of the United States of America and may be changed from time to
time), and qualify and remain qualified as a foreign corporation in each
jurisdiction where failure to qualify could have a Material Adverse Effect.
Section 8.02. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in an efficient and economical manner in a
business of the same general type as conducted by it on the date of this
Agreement, provided, however, that nothing in this 8.02 shall prevent the
abandonment or termination of a line of business or of any Subsidiary if the
Borrower or a Subsidiary determines that the preservation of such line of
business is no longer desirable in the conduct of the business of the Borrower
or such Subsidiary.
Section 8.03. Maintenance of Insurance. The Borrower shall maintain
insurance against risk of loss on its inventory in amounts, under policies and
with insurers reasonably acceptable to the Bank. In addition, to the extent that
other insurance is available to the Borrower and each of its Subsidiaries at a
price comparable to the price paid by other Persons in the same or similar types
of business conducted by the Borrower and each Subsidiary, maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof. To the extent such other insurance is not
obtained, adopt, in lieu of or supplemental to such insurance, such other plan
or method of protection, whether by the establishment of an insurance fund or
reserve to be held and applied to make good losses from casualties, or
otherwise, and conforming to the practices of similar corporations maintaining
systems of self-insurance.
Section 8.04. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders, such compliance to include without limitation,
compliance with all laws related to the disposal or handling of toxic waste, and
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, except (a) in the case of taxes,
where contested in good faith and by proper proceedings if appropriate reserves
are maintained with respect thereto, or (b) where the failure to comply with a
law would not have a Material Adverse Effect.
Section 8.05. Right of Inspection. Upon reasonable notice and during normal
business hours, permit the Bank or any agent or representative thereof, to
examine and make copies of and abstracts from the financial records of, and
visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers and directors and the
Borrower's independent accountants, provided that the Borrower shall receive
reasonable notice of any such meetings with the Borrower's independent
accountants and the Borrower shall have the right to be present at such
meetings.
Section 8.06. Reporting Requirements. Furnish to the Bank:
(a) Audited Annual Financial Statements. As soon as available and in any
event within 120 days after the end of each fiscal year of the Borrower:
(i) if the Borrower shall have no Consolidated Subsidiaries, the balance
sheet of the Borrower as of the end of such fiscal year and statements of
income, statements of cash flows and statements of changes in shareholders'
equity of the Borrower for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the corresponding date
and period in the prior fiscal year, and all prepared in accordance with GAAP,
and accompanied by an opinion thereon acceptable to the Bank by Price Waterhouse
llp or other independent accountants of national standing selected by the
Borrower, each of such statements to be prepared in accordance with GAAP; or
(ii) if the Borrower shall have any Consolidated Subsidiaries, the
consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and consolidated statements of income, statements
of cash flows and statements of changes in shareholders' equity of the Borrower
and its Consolidated Subsidiaries for such fiscal year, all in reasonable detail
and stating in comparative form the respective consolidated figures for the
corresponding date and period in the prior fiscal year, and all prepared in
accordance with GAAP, and as to the consolidated statements accompanied by an
opinion thereon acceptable to the Bank by Price Waterhouse llp or other
independent accountants of national standing selected by the Borrower, together
with consolidating statements in respect of all of the foregoing described
consolidated financial statements, each of such consolidating statements to be
prepared in accordance with GAAP and certified by the chief financial officer of
the Borrower.
(iii) accompanying the financial statements delivered pursuant to this
Subsection (a), a certificate, in substantially the form of Exhibit B hereto, by
an appropriate officer of the Borrower certifying that the Borrower was in
compliance with 10.02 and 10.03 as at the end of the fiscal year to which such
financial statements relate, or if Borrower was not in such compliance,
describing any non-compliance in detail, and that no Default or Event of Default
has occurred during the corresponding period, or if a Default or Event of
Default has occurred, describing the same and the steps taken by the Borrower to
cure the same,and setting forth in reasonable detail calculations showing
compliance with the covenants set forth under Article 10 hereof.
(b) Quarterly Financial Statements. As soon as available and in any event
within 45 days after the end of each of the Borrower's first three fiscal
quarter during each fiscal year of Borrower:
(i) if the Borrower shall have no Consolidated Subsidiaries, the balance
sheet of the Borrower as of the end of such quarter and statement of income, of
the Borrower and its Consolidated Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such fiscal quarter,
all in reasonable detail and stating in comparative form the respective figures
for the corresponding date and period in the previous fiscal year, and all
prepared in accordance with GAAP, and certified by an appropriate officer of the
Borrower (subject to year-end adjustments); or
(ii) if the Borrower shall have any Consolidated Subsidiaries, the
consolidating and consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and consolidating and
consolidated statement of income, of the Borrower and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such fiscal quarter, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date and period in the previous fiscal year, and all prepared in
accordance with GAAP, and certified by an appropriate officer of the Borrower
(subject to year-end adjustments); and
(iii) accompanying the financial statements delivered pursuant to this
Subsection (b), a certificate, in substantially the form of Exhibit C hereto, by
an appropriate officer of the Borrower certifying that the Borrower was in
compliance with 10.01 hereof at all times during such quarter and was in
compliance with 10.03 and 10.04 as at the end of the quarter to which such
financial statements relate, or if Borrower was not in such compliance,
describing any non-compliance in detail, and that no Default or Event of Default
has occurred during the corresponding period, or if a Default or Event of
Default has occurred, describing the same and the steps taken by the Borrower to
cure the same,and setting forth in reasonable detail calculations showing
compliance with the covenants set forth under Article 10 hereof.
(c) Notice of Litigation. Promptly after the notice of the commencement
thereof is received by any officer of the Borrower, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, directly
affecting the Borrower or any of its Subsidiaries which either (a) relate to the
clean-up of toxic or chemical waste, or (b) if determined adversely to the
Borrower or such Subsidiary, could have a Material Adverse Effect;
(d) Notice of Defaults and Events of Default. As soon as reasonably
practicable, and in any event within 10 days after the occurrence of each
Default or Event of Default, a written notice setting forth the details of such
Default or Event of Default and the action which is proposed to be taken by the
Borrower with respect thereto;
(e) General Information. Such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its Subsidiaries
as the Bank may from time to time reasonably request.
(f) ERISA Notices. Promptly after notifying the government, if government
notice is required, and otherwise within ten days after the Borrower knows that
any of the events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by a senior
financial officer of the Borrower setting forth details respecting such event or
condition and the action, if any, which the Borrower or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or notice
required to be filed with or given to PBGC by the Borrower or an ERISA Affiliate
with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA, with
respect to a Plan, as to which PBGC has not by regulation waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA including, without limitation,
the failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable
event regardless of the issuance of any waivers in accordance with Section
412(d) of the Code) and any request for a waiver under Section 412(d) of the
Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of intent to
terminate any Plan or any action taken by the Borrower or an ERISA Affiliate to
terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan,
or the receipt by the Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by the
Borrower or any ERISA Affiliate that results in liability under Section 4201 or
4204 of ERISA (including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt of the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary or any Multiemployer
Plan against the Borrower or any ERISA Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA would result in the loss of
tax-exempt status of the trust of which such Plan is a part if the Borrower or
an ERISA Affiliate fails to timely provide security to the Plan in accordance
with the provisions of said Sections.
(g) ERISA Reports. Promptly after the request of the Bank, copies of each
annual report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(h) Reports to Other Lenders. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other party pursuant to the terms of
any indenture, loan or credit or similar agreement to which the Borrower is a
party and not otherwise required to be furnished to the Bank pursuant to any
other clause of this 8.06;
(i) Proxy Reports, Etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements which the
Borrower or any such Subsidiary files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange;
(j) Notice of Forfeiture Proceeding. Promptly after the commencement
thereof or promptly after the Borrower knows of the commencement or threat
thereof, notice of any Forfeiture Proceeding;
Section 8.07. Audits. The Bank shall have the right to conduct an audit
from time to time of the Borrower's inventory, operations and books and records,
including but not limited to the Borrower's accounts receivable. The costs of
one such audit per calendar year, computed at the Bank's standard rates for
audit charges, shall be paid by the Borrower upon demand by the Bank and the
Bank may, but is not required to, add such costs to the amount of the Prime
Loans outstanding under the Note as a borrowing hereunder.
Section 8.08. Lease Financings. Provide Bank with an opportunity to furnish
a quotation on any lease financing to be undertaken by the Borrower or any of
its Consolidated Subsidiaries.
ARTICLE 9. NEGATIVE COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank shall
have any Commitment under this Agreement, the Borrower shall not:
Section 9.01. Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries other than UconX to create, incur, assume or suffer to exist
any Debt, except:
(a) Debt of the Borrower under this Agreement or the Note;
(b) Debt currently outstanding and reflected on the balance sheet of the
Borrower described in 7.05 hereof, but no renewals, extensions, increases or
refinancings thereof;
(c) Purchase money Debt not exceeding an aggregate principal amount of
$1,000,000 incurred during any fiscal year of the Borrower;
(d) Subordinated Debt (provided that the incurrence of such Subordinated
Debt does not cause the Borrower to be in violation of the Covenants set forth
in Article 10); and
(e) All leases which qualify as "operating leases" under Financial
Accounting Standards No. 13.
Section 9.02. Guarantees, Etc. Assume, guarantee, endorse or otherwise be
or become directly or contingently responsible or liable, or permit any of its
Subsidiaries other than UconX to assume, guarantee, endorse or otherwise be or
become directly or contingently responsible or liable (including, but not
limited to, an agreement to purchase any obligation, stock, assets, goods or
services or to supply or advance any funds, assets, goods or services, or an
agreement to maintain or cause such Person to maintain a minimum working capital
or net worth or otherwise to assure the creditors of any Person against loss)
for the obligations of any Person, except (i) guarantees by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (ii) the Corporation Guaranty Agreement dated as of
September 1, 1990 granted by the Borrower to Chase Lincoln First Bank, N.A., and
(iii) the Guaranty Agreement dated August 31, 1995 granted by the Borrower to
the City of Rochester.
Section 9.03. Liens. (a) Create, incur, assume, or suffer to exist or
permit any of its Subsidiaries other than UconX to create, incur, assume, or
suffer to exist at any one time, any Lien, upon or with respect to any of its
Property, including without limitation, inventory, accounts, accounts
receivable, contract rights, chattel paper, instruments, acceptances, drafts and
general intangibles, all as defined in the Uniform Commercial Code of the State
of New York, except for (i) Existing Liens, (ii) Permitted Encumbrances, and
(iii) Liens granted to the Bank.
(b) Enter into any sale and lease-back or similar financing device or
scheme in respect of its Property owned prior to such financing, or permit any
Subsidiary other than UconX to do so.
Section 9.04. Investments. Make, or permit any of its Subsidiaries to make,
any loan or advance to any Person or purchase or otherwise acquire, or permit
any such Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations or other securities of, make any capital contribution to, or
otherwise invest in, or acquire any interest in, any Person, except: (a)
investment grade securities; (b) deposits in financial institutions; (c)
investments in UconX as of the date of this Agreement and listed on Schedule 1
hereto; and (d) loans or advances to employees not to exceed $50,000 in the
aggregate during any fiscal year of the Borrower; provided further that each
such loan advance shall be required to be repaid within one year from the date
such advance shall be made (and, if not, the Borrower shall take appropriate
action for collection).
Section 9.05. Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, assign, transfer
or otherwise dispose of any of its now owned or hereafter acquired assets,
(including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests and including any transfers to
any parent corporation of the Borrower or to any other Affiliate of the
Borrower), except for (i) inventory disposed of in the ordinary course of
business and (ii) not more than twenty percent (20%) of each or any class of
capital stock of any Subsidiary, and (iii) other assets disposed of having an
aggregate fair market value not exceeding $200,000 during any fiscal year of the
Borrower and sold for a price which is within a fair market value for such
assets.
Section 9.06. Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired), to any Person, or acquire all or substantially all of the
stock or assets or the business of any Person, or permit any of its Subsidiaries
to do so.
Section 9.07. Acquisitions. Make any Acquisition or permit any Subsidiary
to do so.
Section 9.08. No Activities Leading to Forfeiture. Engage or permit any
Subsidiaries to engage in the conduct of any business or activity which could
reasonably be expected to result in a Forfeiture Proceeding.
Section 9.09. Creation of Subsidiaries. Create or permit to exist any
Subsidiary unless such Subsidiary shall have first executed and delivered a
Guaranty to the Bank, together with corporate supporting documentation and a
favorable opinion of counsel in respect of such Guaranty, all in form and
substance satisfactory to the Bank.
Section 9.10. No Material Change. Make or permit any material change in the
management or direction of the Borrower's business or operations, including, but
not limited to, a change in its executive management, which is not satisfactory
to the Bank.
ARTICLE 10. FINANCIAL COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank shall
have any Commitment under this Agreement:
Section 10.01. Leverage Ratio. The Borrower shall not permit the ratio of
Consolidated Total Liabilities to Consolidated Tangible Net Worth to exceed .75
to 1.0 at any time.
Section 10.02. Cash Flow Coverage Ratio. The Borrower will not permit the
ratio of (i) the difference of Consolidated Adjusted Net Profit minus
Consolidated Capital Expenditures to (ii) the Consolidated Current Portion of
Funded Debt to be less than 1.5 to 1.0 measured as at the end of each fiscal
year of the Borrower.
Section 10.03. Income or Loss. The Borrower shall not permit Consolidated
Income to be a negative amount (a loss) for any fiscal quarter commencing on or
after July 1, 1996 or for any fiscal year commencing on or after January 1,
1996.
Section 10.04. Current Ratio. The Borrower will not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be less than
3.5 to 1.0 measured as at the end of each fiscal quarter of the Borrower.
ARTICLE 11. EVENTS OF DEFAULT.
Section 11.01. Events of Default. Any of the following events shall be an
"Event of Default":
(a) The Borrower shall fail to pay the principal of or interest on the Note
within 15 Banking Days after such principal or interest shall be due and
payable, or shall fail to pay any amount of a fee or any other amount payable
under this Agreement within 30 Banking Days after such amount or fee shall be
due and payable;
(b) Any representation or warranty made or deemed made by the Borrower in
this Agreement or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Facility Document shall prove to have been incorrect in any material respect
on or as of the date made;
(c) The Borrower shall fail to perform or observe any term, covenant or
agreement contained in 8.03, 8.04, 8.05 or 8.06, and, if the Borrower provided
the Bank with the notice required under 8.06(d), such failure shall remain
unremedied for 15 consecutive calendar days after written notice thereof shall
have been given to the Borrower by the Bank, and if such notice under 8.06(d) is
not provided, then such failure shall remain unremedied for 30 consecutive days
after its occurrence; provided, however, that if a breach or failure specified
in this Subsection (c) be such that (i) it is not a breach of 8.03 or 8.05 and
(ii) it can be corrected but not within the period specified herein, it shall
not constitute the basis of an event of default hereunder (a) if corrective
action capable of remedying such breach or failure is instituted by the Borrower
within 5 days of notice of such breach or failure and diligently pursued until
such breach or failure is corrected, (b) if the Borrower shall within such 5 day
period furnish to the Bank a certificate executed by the President of the
Borrower and the Chairman of the Borrower (if such office shall exist)
certifying (i) that such breach or failure is such that it can be corrected but
not within the applicable period, (ii) that corrective action capable of
remedying such breach or failure has been instituted and is being diligently
pursued and will be diligently pursued until the breach or failure is corrected,
and (iii) that the Borrower shall notify the Bank by certificate executed as
above when such breach or failure has been corrected, and (c) such breach or
failure shall be fully corrected within a reasonable period mutually agreed to
in writing by the Bank and the Borrower not exceeding 30 days;
(d) The Borrower or any Guarantor shall fail to perform or observe any
term, covenant or agreement contained in any Facility Document (other than the
obligations described in (a) and (c) above on its part to be performed or
observed) and such failure shall remain unremedied for 30 consecutive calendar
days after written notice thereof shall have been given by the Bank to the other
parties to such Facility Document in the manner required by such Facility
Document; provided, however, that if a breach or failure specified in this
Subsection (d) be such that (i) it is not a breach of 8.02, 8.07, 9.01, 9.02,
9.03(a), 9.03(c), 9.04, 9.05, 9.06, 9.07, 9.09, 10.01, 10.02, 10.03, or 10.04
and (ii) it can be corrected but not within the period specified herein, it
shall not constitute the basis of an event of default hereunder (a) if
corrective action capable of remedying such breach or failure is instituted by
the Borrower within 5 days of notice of such breach or failure and diligently
pursued until such breach or failure is corrected, (b) if the Borrower shall
within such 5 day period furnish to the Bank a certificate executed by the
President of the Borrower and the Chairman of the Borrower (if such office shall
exist) certifying (i) that such breach or failure is such that it can be
corrected but not within the applicable period, (ii) that corrective action
capable of remedying such breach or failure has been instituted and is being
diligently pursued and will be diligently pursued until the breach or failure is
corrected, and (iii) that the Borrower shall notify the Bank by certificate
executed as above when such breach or failure has been corrected, and (c) such
breach or failure shall be fully corrected within a reasonable period mutually
agreed to in writing by the Bank and the Borrower not exceeding 30 days;
(e) The Borrower or any of its Subsidiaries shall: (i) fail to pay any
Borrowed Money Obligation of the Borrower or any Subsidiary in an aggregate
principal amount outstanding exceeding One Hundred Thousand Dollars ($100,000)
(other than the payment obligations described in (a) above), or any interest or
premium thereon, within 15 days of when due after any applicable grace or cure
period for such payment (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) fail to perform or observe any
material term, covenant or condition on its part to be performed or observed
under any agreement or instrument relating to any such indebtedness referred to
in (i) above, when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, after the giving of notice or passage of time, or both, the maturity of such
indebtedness, whether or not such failure to perform or observe shall be waived
by the holder of such indebtedness; or any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(f) The Borrower or any of its Subsidiaries which in accordance with GAAP
would be deemed to be a material Subsidiary: (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its debts as such
debts become due in the ordinary course of business, except for failure to pay
trade creditors provided that such delay in payment is in accordance with normal
business practices; or (ii) shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its assets; or (iii) shall
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether, now or hereafter in effect; or (iv) shall have had any
such petition or application filed, or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered and which remains undismissed or unstayed for a period of
90 days or more; or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its properties; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 90 days or more;
(g) One or more judgments, decrees or orders for the payment of money in
excess of One Hundred Thousand Dollars ($100,000) in the aggregate shall be
rendered against the Borrower and any of its Subsidiaries or any such judgments,
decrees or orders shall continue unsatisfied and in effect for a period of 30
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;
(h) Any of the following events shall occur or exist with respect to the
Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan; (ii) any Reportable Event shall occur with respect to any Plan; (iii) the
filing under Section 4041 of ERISA of a notice of intent to terminate any Plan
or the termination of any Plan; (iv) any event or circumstance exists which
might constitute grounds entitling the PBGC to institute proceedings under
Section 4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of any such
proceedings; (v) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the reorganization, insolvency, or
termination of any Multiemployer Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, could in the
opinion of the Bank subject the Borrower to any tax, penalty, or other liability
to a Plan, Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed or may exceed $100,000.
(i) (A) any Forfeiture Proceeding shall have been commenced or the Borrower
shall have given the Bank written notice of the commencement of any Forfeiture
Proceeding as provided in 8.06(j) or (B) the Bank has a good faith basis to
believe that a Forfeiture Proceeding has been threatened or commenced;
(j) any of the Guaranties shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by any of the Guarantors or any of the Guarantors shall deny it has
any further liability or obligation thereunder or shall fail to perform its
obligations thereunder; provided further, however that with respect to the death
or incompetency of any Guarantor who is a natural person, the Borrower shall
have 30 days after notice from the Bank to provide the Bank with a substitute or
replacement guaranty satisfactory to the Bank in its sole discretion;
(k) the Security Agreements shall at any time and for any reason cease: (A)
to create a valid and perfected priority security interest in and to the
property subject to such Agreements, other than if due to the Bank's actions or
omissions; or (B) to be in full force and effect or shall be declared null and
void, or the validity or enforceability thereof shall be contested by the
Borrower or the Borrower shall deny it has any further liability or obligation
under the Security Agreements or the Borrower shall fail to perform any of its
obligations thereunder after the expiration of any cure, waivers or grace
periods; or (l) there shall occur any "Event of Default" as defined and
described in 8 of the Letter of Credit and Reimbursement Agreement dated as of
September 1, 1990 between C&J Enterprises and Chase Lincoln First Bank, N.A. (as
predecessor to the Bank) or there shall occur any "Event of Default" as defined
and described in 8.01 of the Indenture of Trust dated as of September 1, 1990
between the County of Monroe Industrial Development Agency and Key Trust
Company, as Trustee, pertaining to the County of Monroe Industrial Development
Agency's 1990 Industrial Development Revenue Bonds (C&J Enterprises/Performance
Technologies Incorporated Facility).
Section 11.02. Remedies. If any Event of Default shall occur, the Bank may,
by notice to the Borrower, (a) declare the Commitment to be terminated,
whereupon the same shall forthwith terminate, and (b) declare the outstanding
principal of the Note, all interest thereon and all other amounts payable under
this Agreement and the Note to be forthwith due and payable, whereupon the Note,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided that, in the case
of an Event of Default referred to in 11.01(f) above, the Commitment shall be
automatically terminated, and the Note, all interest thereon and all other
amounts payable under this Agreement shall be automatically immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE 12. MISCELLANEOUS.
Section 12.01. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose which given. No failure on
the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof or preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 12.02. Survival. All representations and warranties made herein
shall survive the borrowings hereunder.
Section 12.03. Usury. Anything herein to the contrary notwithstanding, the
obligations of the Borrower under this Agreement and the Note shall be subject
to the limitation that payments of interest shall not be required to the extent
that receipt thereof would be contrary to provisions of law applicable to the
Bank limiting rates of interest which may be charged or collected by the Bank.
Section 12.04. Expenses. The Borrower shall reimburse the Bank for all
reasonable costs, expenses, and charges (including, without limitation, fees and
charges of external legal counsel for the Bank and costs allocated by its
internal legal department) incurred by the Bank in connection with the
preparation, performance or enforcement of this Agreement.
Section 12.05. Assignment; Participations. This Agreement shall be binding
upon, and shall inure to the benefit of, the Borrower, the Bank and their
respective successors and assigns (except that the Borrower may not assign or
transfer its rights or obligations hereunder), and such successors and assigns
shall thereupon become vested with all the benefits in respect thereof granted
to the Bank herein or otherwise; provided, however, that (i) the Bank may assign
all or any part of any Loan or Loans made by it only with the prior consent of
the Borrower (which shall not be unreasonably withheld), and (ii) the Bank may
sell participations therein, only to a bank, insurance company, trust company,
brokerage house, pension fund, or other financial institution, in which event
(a) in the case of an assignment, the assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits and
obligations as it would have if it were the Bank hereunder and (b) in the case
of a participation, the participant shall not have any rights under this
Agreement, the Note, or any other documents referred to herein (the
participant's rights against the Bank in respect of such participation to be
those set forth in the agreement executed by the Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower under
Article 5 hereof shall be determined as if the Bank had not sold such
participation, provided, however, that the Bank may not sell participations
under any agreement which gives the participant a right to approve or disapprove
of any consent, waiver or amendment by the Bank with respect to any provision of
this Agreement (except for any provision hereof relating to the payment of any
amount, the date on which such payment is due, the rate at which interest
accrues on any Loan or any other amount payable hereunder, or the release of any
guarantee of, or the substitution or release of any collateral security for,
such Loans). The Bank may furnish any information concerning the Borrower in the
possession of the Bank from time to time to assignees and participants
(including prospective assignees and participants).
Section 12.06. Notices. Except in respect of service of process in respect
of any legal action or proceeding arising out of or relating to this Agreement,
unless the party to be notified otherwise notifies the other party in writing,
notices shall be given to the Bank and to the Borrower by ordinary mail or telex
addressed to such party at its address on the signature page of this Agreement.
Notices to the Bank shall be effective upon receipt.
Section 12.07. Set-Off. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or counterclaim the
Bank may otherwise have, the Bank shall be entitled, at its option, to offset
balances held by it for the account of the Borrower at any of the Bank's
offices, in Dollars or in any other currency, against any principal of or
interest on any of the Loans or any other amount payable by the Borrower under
this Agreement or the Note, which is not paid when due, in which case it shall
promptly notify the Borrower thereof; provided that the Bank's failure to give
such notice shall not affect the validity thereof.
Section 12.08. Jurisdiction; Immunities. (a) The Borrower hereby
irrevocably submits to the jurisdiction of any New York State or United States
Federal court sitting in Monroe County, New York over any action or proceeding
arising out of or relating to this Agreement or the Note, and the Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Borrower agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. The Borrower further waives any
objection to venue in such State and any objection to an action or proceeding in
such State on the basis of forum non conveniens. The Borrower further agrees
that any action or proceeding brought against the Bank shall be brought only in
New York State or United States Federal court sitting in Monroe County.
(b) Nothing in this 12.08 shall affect the right of the Bank to serve legal
process in any other manner permitted by law or affect the right of the Bank to
bring any action or proceeding against the Borrower or its property in the
courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Agreement and the Note.
Section 12.09. Captions. The captions and headings hereunder are for
convenience only and shall not affect the interpretation or construction of this
Agreement.
Section 12.10. Severability. The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.11. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 12.12. Governing Law. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York;
provided that the foregoing is not intended to limit the maximum rate of
interest which may be charged or collected by the Bank hereunder if, under the
laws applicable to it, the Bank may charge or collect such interest at a higher
rate than is permissible under the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PERFORMANCE TECHNOLOGIES,
INCORPORATED
By
Name: Dorrence Lamb
Title: Vice President of Finance
Address for notices:
315 Science Parkway
Rochester, New York 14620
Attn: President
THE CHASE MANHATTAN BANK
By
Name: John F. Sorensen
Title: Vice President
Lending and Payment Office:
The Chase Manhattan Bank
One Chase Square
Rochester, New York 14643
Address for notices:
The Chase Manhattan Bank
One Chase Square
Rochester, New York 14643
Attention: Performance
Technologies Account
Representative
<PAGE>
EXHIBIT A
REVOLVING CREDIT NOTE
$3,000,000 October 31, 1996
FOR VALUE RECEIVED, Performance Technologies, Incorporated, a Delaware
corporation (the "Borrower"), hereby promises to pay to The Chase Manhattan Bank
(the "Bank"), for account of its Lending Office provided for by the Credit
Agreement dated as of October 31, 1996 between the Borrower and the Bank (the
"Credit Agreement"), or order, at the Payment Office the principal sum of Three
Million Six Hundred Thousand and No/100 Dollars ($3,000,000) or such portion
thereof as may have been advanced by the Bank pursuant to Article 2 of the
Credit Agreement, in lawful money of the United States of America and in
immediately available funds, on the dates and in the amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount hereof from
time to time outstanding, at such office, in like money and funds, for the
period commencing on the date of this Note until such principal sum shall be
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The amount, type and date of each Loan made by the Bank to the Borrower,
and each payment made on account of the principal thereof, shall be recorded by
the Bank on its books and, prior to any transfer of this Note, endorsed by the
Bank on the schedule attached hereto or any continuation thereof, provided,
however, that the failure of the Bank to endorse the schedule shall not affect
or impair the Borrower's obligation to repay any Loan or any interest thereon or
any other amount due under the Credit Agreement.
This Note is the Note referred to in the Credit Agreement and evidences all
Loans made by the Bank thereunder. Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
PERFORMANCE TECHNOLOGIES,
INCORPORATED
By:
Dorrance W. Lamb
Title: Vice President of Finance
ANNEX TO NOTE
Principal Principal
Date Type Amount Amount Unpaid
of of of Paid or Principal Notation
Loan Loan Loan Prepaid Amount Made By
<PAGE>
EXHIBIT B
ANNUAL COMPLIANCE CERTIFICATE
This Compliance Certificate is rendered to The Chase Manhattan Bank (the
"Bank") by Performance Technologies, Incorporated (the "Borrower") pursuant to
8.06(a)(iii) of the Credit Agreement between the Bank and the Borrower dated
October 31, 1996 (the "Credit Agreement").
The undersigned hereby certifies that in respect of the fiscal year ending
December __, 199__ (the "Year"):
1. The Borrower was in compliance with 10.02 and 10.03 of the Credit
Agreement as at the end of the Year [except __________].
2. No "Default" or "Event of Default" (as defined in the Credit Agreement)
occurred during the Year [except _________].
Dated: Performance Technologies,
Incorporated
_______________, 199__
By:_________________________
Title:______________________
<PAGE>
EXHIBIT C
QUARTERLY COMPLIANCE CERTIFICATE
This Compliance Certificate is rendered to The Chase Manhattan Bank (the
"Bank") by Performance Technologies, Incorporated (the "Borrower") pursuant to
8.06(b)(iii) of the Credit Agreement between the Bank and the Borrower dated
October 31, 1996 (the "Credit Agreement").
The undersigned hereby certifies that in respect of the fiscal quarter
ending ______________, 199__ (the "Quarter"):
1. The Borrower was in compliance with 10.01 of the Credit Agreement at all
times during the Quarter [except ________] and the Borrower was in compliance
with 10.03 and 10.04 of the Credit Agreement as at the end of the Quarter
[except __________].
2. No "Default" or "Event of Default" (as defined in the Credit Agreement)
occurred during the Quarter [except _________].
Dated: Performance Technologies,
Incorporated
_______________, 199__
By:_________________________
Title:______________________
<PAGE>
SCHEDULE 1
Schedule of Subsidiaries and
Investments in Subsidiaries ( 7.07)
Schedule 1
Schedule of Subsidiaries and Investments in Subsidiaries (section 7.07)
UconX Corporation
6540 Lusk Boulevard C-113
San Diego, California 92121
State of Incorporation: Delaware
Percentage Ownership of Borrower: 100%
Qualified to do business in California as UconX Delaware on 12/8/92.
As part of the acquisition of UconX Corporation on September 1, 1992, PTI
agreed to lend UconX Corporation (at that time a 52 1/2% owned subsidiary of
PTI) up to $400,000. As of October 31, 1996, the loan outstanding to UconX was
$450,000, which includes accrued but unpaid interest.
<PAGE>
SCHEDULE 2
Existing Credit Arrangements and Liens ( 7.08)
Schedule 2
Existing Credit Arrangements and Liens (section 7.08)
Start Collateral Monthly
Date Description Payment Term
M & M Associates Leases:
5/1/92 Sun Equipment $154.00 60 months
11/1/93 Sparcstation 10 $257.60 36 months
7/1/95 486DX2-80-PC $ 82.15 36 months
Analyzer CH Digital
Scope
Fleet Credit Corp. Leases:
3/30/93 Harris Scicards $4,535.57 60 months
1/15/92 Various equipment $2,403.54 48 months
3/15/93 Minx Software $2,205.95 48 months
U.S. Bancorp Leasing and Financial:
January, 1996
Production and data $2,242.15 48 months
processing/computer equipment
Chase Manhattan Bank:
Line of Credit
machinery, equipment, fixtures
accounts, inventory, general
intangibles, chattel paper and
insurance.
Electrovert Hydrocleaner.
<PAGE>
Schedule 2 - Continued
Existing Credit Arrangements and Liens
Start Collateral Monthly
Date Description Payment Term
City of Rochester: $80,000 Loan from City of Rochester
secured by Chase Manhattan Bank Letter
of Credit
Guaranties
Performance Technologies, Incorporated ("PTI") has co-guaranteed approximately
$1,250,000 of the mortgage obtained to finance the building located at 315
Science Parkway, Rochester, New York 14620.
On December 2, 1993, the PTI received from the City of Rochester a Section 108
loan in the amount of $500,000 (the "City Loan"). Pursuant to the spin-off of
Performance Telecom Corporation ("PTC") from PTI, the City Loan and all related
security agreements and other loan documentation were assigned from PTI to PTC.
In connection with that assignment, PTI agreed to guaranty the collection and
payment of the City Loan. As of October 31, 1996, the outstanding principal
indebtedness on the City Loan was $470,000.
As part of the acquisition of UconX Corporation on September 1, 1992, PTI agreed
to lend UconX Corporation (at that time a 52 1/2% owned subsidiary of PTI) up to
$400,000. As of October 31, 1996, the loan outstanding to UconX was $450,000,
which includes accrued but unpaid interest.
<PAGE>
SCHEDULE 3
Schedule of Hazardous Materials ( 7.12)
Schedule 3
Schedule of Hazardous Materials (section 7.12)
None
<PAGE>
SCHEDULE 4
Schedule of Partnerships and Joint Ventures ( 7.17)
Schedule 4
Schedule of Partnerships and Joint Ventures (section 7.17)
None
<PAGE>
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.
PERFORMANCE TECHNOLOGIES, INCORPORATED
November 19, 1996 By: s/Charles E. Maginness
-----------------------------
Charles E. Maginness
Chairman of the Board of Directors and
Chief Executive Officer
November 19, 1996 By: s/Dorrance W. Lamb
-----------------------------
Dorrance W. Lamb
Chief Financial Officer and
Vice President, Finance
