-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SOtRAOOJfXbA2zSyzEPSFcApgIcI3COLy7ro6Uv3g/tMR+N68mHMu7jPWQC4dt2W cIh5p+gUWQ5+Uncl+NCjvw== 0001005477-96-000476.txt : 19961118 0001005477-96-000476.hdr.sgml : 19961118 ACCESSION NUMBER: 0001005477-96-000476 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VERNITRON CORP CENTRAL INDEX KEY: 0000206030 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 111962029 STATE OF INCORPORATION: DE FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16182 FILM NUMBER: 96665237 BUSINESS ADDRESS: STREET 1: 645 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2125937900 MAIL ADDRESS: STREET 1: 645 MADISON AVENUE STREET 2: 645 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 1996 Commission file number 0-16182 VERNITRON CORPORATION (Exact name of registrant as specified in its charter) Delaware 11-1962029 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 645 Madison Avenue New York, New York 10022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 593-7900 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 --- --- 2,561,920 shares of Common Stock, $.01 par value, were outstanding as of November 7, 1996. VERNITRON CORPORATION INDEX Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Condensed Consolidated Statements of Operations - Quarter Ended September 30, 1996 and 1995 3 Condensed Consolidated Statements of Operations - Nine Months Ended September 30, 1996 and 1995 4 Condensed Consolidated Balance Sheets - September 30, 1996 and December 31, 1995 5 Condensed Consolidated Statements of Cash Flows- Nine Months Ended September 30, 1996 and 1995 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 14 2 PART 1. FINANCIAL INFORMATION ITEM I. Financial Statements VERNITRON CORPORATION Condensed Consolidated Statements of Operations (Unaudited, dollars in thousands, except per share data) Quarter Ended September 30, ------------------------- 1996 1995 ----------- ----------- Net Sales $ 27,640 $ 15,633 Cost of sales 20,863 11,806 Selling, general and administrative expenses 4,938 2,848 Amortization of intangible assets 79 53 ----------- ----------- Operating income 1,760 926 Interest expense 1,012 497 Other (income) expense (4) 234 ----------- ----------- Income before taxes 752 195 Charge in lieu of taxes 323 76 ----------- ----------- Net income 429 119 Preferred stock dividends 221 159 ----------- ----------- Net income (loss) applicable to common shareholders $ 208 $ (40) =========== =========== Earnings (loss) per share: $ 0.08 $ (0.02) =========== =========== Weighted average common shares outstanding 2,757,746 2,508,155 =========== =========== See notes to condensed consolidated financial statements. 3 VERNITRON CORPORATION Condensed Consolidated Statements of Operations (Unaudited, dollars in thousands, except per share data) Nine Months Ended September 30, ------------------------ 1996 1995 ------------- -------- Net Sales $ 70,733 $ 49,383 Cost of sales 52,781 36,230 Selling, general and administrative expenses 12,784 9,973 Amortization of intangible assets 197 157 ----------- ---------- Operating income 4,971 3,023 Interest expense 2,333 1,534 Other (income) expense (25) 249 ----------- ---------- Income before taxes and extraordinary item 2,663 1,240 Charge in lieu of taxes 1,115 484 ----------- ---------- Income before extraordinary item 1,548 756 Extraordinary loss on early extinguishment of debt, net of tax benefit (173) -- ----------- ---------- Net income 1,375 756 Preferred stock dividends 626 417 ----------- ---------- Net income applicable to common shareholders $ 749 $ 339 =========== ========== Earnings per share: Earnings before extraordinary charge $ 0.34 $ 0.14 Extraordinary charge (0.06) -- ----------- ---------- $ 0.28 $ 0.14 =========== ========== Weighted average common shares outstanding 2,662,650 2,507,789 =========== ========== See notes to condensed consolidated financial statements. 4 VERNITRON CORPORATION Condensed Consolidated Balance Sheets (Dollars in thousands) September 30, December 31, 1996 1995 ------------- ------------- (Unaudited) ASSETS CURRENT ASSETS Cash $ 5,552 $ 91 Accounts receivable - net 13,936 8,525 Inventories - net 28,511 16,544 Other current assets 697 651 ------------- ------------- TOTAL CURRENT ASSETS 48,696 25,811 PROPERTY, PLANT AND EQUIPMENT - net 16,600 7,603 EXCESS OF COST OVER NET ASSETS ACQUIRED - net 9,755 6,624 OTHER ASSETS 1,959 447 ------------- ------------- TOTAL ASSETS $77,010 $40,485 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 8,755 $ 5,315 Accrued expenses and other liabilities 9,211 5,696 Current portion of long-term debt and 4,368 466 capital lease obligations ------------- ------------- TOTAL CURRENT LIABILITIES 22,334 11,477 LONG-TERM DEBT & CAPITAL LEASES, less current portion 34,807 11,047 OTHER LONG-TERM LIABILITIES 2,314 2,697 DEFERRED INCOME 420 519 SHAREHOLDERS' EQUITY: Preferred Stock, issued and outstanding 738,584 shares in 1996 and 781,642 shares in 1995 7 8 Common Stock, issued and outstanding 2,561,920 shares in 1996 and 2,520,821 shares in 1995 26 25 Capital in Excess of Par 15,817 14,712 Retained Earnings 1,285 -- ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 17,135 14,745 ------------- ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $77,010 $40,485 ============= ============= See notes to condensed consolidated financial statements. 5 VERNITRON CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited, dollars in thousands) Nine Months Ended September 30, ------------------- 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,375 $ 756 Adjustments to reconcile net income to cash used in operating activities: Extraordinary loss, net 173 -- Realization of net operating loss carryforward 877 436 Depreciation and amortization 2,334 1,179 Increase in current assets, other than cash (2,566) (1,085) Decrease in current liabilities (946) (1,158) Decrease in long-term liabilities (508) (615) Other - net 354 (343) -------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 1,093 (830) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (1,272) (727) Acquisition of business, net of cash acquired (Note 2) (4,835) -- Proceeds from sale of assets 206 2,929 -------- -------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (5,901) 2,202 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 62,786 51,831 Repayment of borrowings (52,097) (53,149) Redemption of preferred stock odd lot shares (420) -- -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 10,269 (1,318) -------- -------- NET INCREASE IN CASH 5,461 54 CASH AT BEGINNING OF PERIOD 91 27 -------- -------- CASH AT END OF PERIOD $ 5,552 $ 81 ======== ======== See notes to condensed consolidated financial statements. 6 VERNITRON CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Note 1 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements include Vernitron Corporation and its subsidiaries (the "Company"). These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. Operating results for the quarter and nine months ended September 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995 and the Company's Current Reports on Form 8-K. Certain reclassifications have been made to previously reported financial statements to conform to current classifications. Earnings per share data for the periods were computed by dividing net income applicable to common shareholders by the weighted average number of shares of common stock outstanding during such periods. The calculation of weighted average number of shares assumes the conversion of those common stock equivalents which have a dilutive effect on earnings for the period presented. Common stock equivalents consist of warrants issued in connection with the Company's new credit facility (see Note 5) and employee stock options. Note 2 - Supplemental Cash Flow Information Nine Months Ended September 30, -------------------- 1996 1995 ------ ------ Cash paid for: Interest $1,395 $1,446 ====== ====== Income Taxes $ 441 $ 55 ====== ====== Non-cash investing and financing acitivities: Equipment acquired under capital leases $ 590 $ -- ====== ====== Note 3 - Acquisition of Precision Aerotech, Inc. On April 25, 1996, the Company completed its previously announced acquisition of Precision Aerotech, Inc. ("PAI"). Pursuant to the Agreement and Plan of Merger dated February 16, 1996, each outstanding share of common stock of PAI was canceled and converted into the right to receive $5.00 per share in cash. Based on 789,208 shares of PAI Common Stock outstanding immediately prior to the acquisition, the aggregate consideration paid therefor was $3.9 million. In addition, the Company repaid $12 million of borrowings under PAI term loans. Precision Aerotech designs, manufactures and markets laser scanners, precision metal optics, high performance air bearings and precision machined parts sold predominantly in commercial markets. 7 VERNITRON CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) The acquisition has been accounted for under the purchase method of accounting and, accordingly, the results of operations of PAI have been included in the accompanying consolidated financial statements since the date of acquisition. The cost of the acquisition has been allocated on the basis of the estimated fair market value of the assets acquired and liabilities assumed. This allocation resulted in an excess of cost over net assets acquired of approximately $3.3 million, which is being amortized over 35 years. Summarized below are the unaudited pro forma results of operations of the Company as if PAI had been acquired at the beginning of the periods presented: Pro Forma Nine Months Ended September 30, -------------------- 1996 1995 ------- -------- Net sales $84,269 $81,848 Income before extraordinary item 1,358 1,890 Net income 1,185 1,890 Earnings per share: Income before extraordinary item 0.27 0.59 Net income 0.21 0.59 The pro forma financial information presented above is not necessarily indicative of either the results of operations that would have occurred had the acquisition taken place at the beginning of the periods presented or the future operating results of the combined companies. Pro forma income before extraordinary item and net income for the nine months ended September 30, 1996 include certain special charges totaling approximately $450. Note 4 - Inventories Inventories have been determined generally by lower of cost (first-in, first-out or average) or market. Inventories consist of: September 30, December 31, 1996 1995 ------- ------- Raw materials $ 9,915 $ 7,203 Work-in-process 13,999 5,293 Finished goods 10,536 9,255 ------- ------- 34,450 21,751 Less reserves 5,939 5,207 ------- ------- $28,511 $16,544 ======= ======= 8 VERNITRON CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Note 5 - Long-Term Debt In order to obtain the funds necessary to finance the Company's acquisition of PAI (see Note 3), to refinance PAI's and the Company's existing debt and pay the fees and expenses related to the acquisition and refinancing, Vernitron entered into a Credit Agreement, dated April 25, 1996 (and subsequently amended as of September 25, 1996), between the Company, the various banks named therein and Banque Paribas, as agent, providing for borrowings under a $37 million senior secured credit facility (the "Credit Facility"). The Credit Facility is comprised of (i) a term loan in the principal amount of $14 million maturing in four years, (ii) a term loan in the principal amount of $12 million maturing in six years and (iii) a revolving credit line in an aggregate principal amount of up to the lesser of $11 million or the borrowing base in effect from time to time, maturing in four years. The Credit Facility contains certain provisions and covenants which, among other things, impose limitations with respect to the incurrence of additional liens and indebtedness, mergers, consolidations and specified sales of assets, and requires the Company to meet certain financial tests including minimum levels of earnings and net worth and various other financial ratios. In addition, the Credit Facility prohibits the payment of cash dividends. The cumulative dividends in arrears on the Company's Preferred Stock as of September 30, 1996 was $536. In connection with the acquisition and financing and before giving effect to the one-for-five reverse stock split (see Note 6), the Company granted to Banque Paribas a warrant (the "Banque Paribas Warrant") to acquire up to 666,312 shares of Common Stock at an exercise price of $.01 per share and a warrant to an affiliate of Banque Paribas, Paribas Principal, Inc., (the "Paribas Principal Warrant"), to acquire up to 776,388 shares of Common Stock at an exercise price of $1.25 per share. In connection therewith, the parties entered into a Warrant Purchase Agreement containing customary terms and conditions. The Company also authorized the granting to an affiliate of Donaldson, Lufkin & Jenrette Securities Corporation of a warrant (the "Donaldson Lufkin Jenrette Warrant") to acquire up to 100,000 shares of Common Stock at an exercise price of $1.25 per share. Adjusted to give effect to the reverse stock split, the Banque Paribas Warrant entitles the holder thereof to acquire up to 133,263 shares of at an exercise price of $.05 per share, the Paribas Principal Warrant entitles the holder thereof to acquire up to 155,278 shares at an exercise price of $6.25 per share and the Donaldson Lufkin & Jenrette Warrant entitles the holders thereof to acquire up to 20,000 shares at an exercise price of $6.25 per share. Note 6 - Common Stock On July 25, 1996, the Company completed a one-for-five reverse stock split of its $0.01 par value common stock following approval of the reverse stock split by the Company's stockholders at the Company's 1996 Annual Meeting of Stockholders. In conjunction with the split, the Company's Certificate of Incorporation has been amended to reduce the number of shares of Common Stock authorized for issuance to 4,000,000. The reverse stock split reduced the number of shares of common stock outstanding from 12,758,737 to 2,552,195. The stated par value of each share was not changed from $0.01. All earnings per share data presented in this report has been restated to reflect the reverse stock split. 9 VERNITRON CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollars in thousands) Note 7 - Other Information September 30, December 31, 1996 1995 ------ ------ Allowance for doubtful accounts $ 456 $ 278 ====== ====== Accumulated depreciation and amortization of property, plant and equipment $7,136 $5,075 ====== ====== Accumulated amortization of excess of cost over net assets acquired $1,033 $ 836 ====== ====== 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in thousands) Results of Operations On April 25, 1996, the Company completed its acquisition of PAI. The acquisition has been accounted for under the purchase method of accounting and, accordingly, the results of operations of PAI have been included in the Condensed Consolidated Statements of Operations since the date of acquisition. The sales of PAI's laser scanner, precision metal optics and high performance air bearing product lines are included in the Motion Control product group. The sales of the remaining PAI product line, precision machined parts, comprise the new Precision Machining product group. Net sales by product group were as follows: Quarter Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 1996 1995 1996 1995 ------- ------- ------- ------- Motion Control $13,998 $ 5,634 $32,098 $18,681 Industrial Components 10,235 9,999 32,680 30,702 Precision Machining 3,407 5,955 ------- ------- ------- ------- Net Sales $27,640 $15,633 $70,733 $49,383 ======= ======= ======= ======= Quarter Ended September 30, 1996 Compared to the Quarter Ended September 30, 1995 Net sales for the third quarter of 1996 increased by $12 million or 77%, compared to the same period in 1995. The acquisition of PAI accounted for $11 million of the increase. The Motion Control group's sales (electromagnetic components and subsystems, laser scanners, precision metal optics and high performance air bearings) increased in 1996 by $8.4 million, or 149%, as compared to 1995. The acquisition of PAI accounted for $7.6 million of the increase. Bookings for the group were $13.9 million in the third quarter of 1996, an increase of $9.2 million, or 196%, compared to the comparable quarter in 1995. The acquisition of PAI resulted in an increase in bookings of $8.8 million. The nature of the Motion Control group's bookings results in an uneven pattern from quarter to quarter and does not necessarily reflect overall business trends. Backlog at September 30, 1996, was $38.3 million, compared to $16.1 million at December 31, 1995. Of the $38.3 million backlog at September 30, 1996, $24.1 million relates to the PAI product lines. The Industrial Components group's sales (bearings and connectors) increased in 1996 by $.2 million, or 2%, compared to 1995. Bookings for the group were $10 million, a decrease of $.4 million, or 4%, compared to 1995, primarily as a result of lower bookings in the bearing product line reflecting a softening of orders from original equipment manufacturers. Backlog at September 30, 1996 was $10.8 million, compared to $11.9 at December 31, 1995. The sales of the Precision Machining group (precision machined parts), acquired as a result of the acquisition of PAI, were $3.4 million. Bookings were $5.3 million in the third quarter of 1996. Backlog at September 30, 1996 was $16.8 million. Operating income was $1.8 million in 1996, as compared to $.9 million in 1995, representing a $.9 million increase. This increase was primarily due to the higher sales volume. Gross margin on sales was 24.5% in both 1996 and 1995. Selling, general and administrative expenses increased by $2.1 million in 1996 primarily due to the acquisition of PAI. Selling, general and administrative expenses as a percentage of sales was 18% in both 1996 and 1995. 11 Interest expense increased by $.5 million in 1996 as a result of higher average borrowings due to the acquisition of PAI. This was partially offset by the effect of lower interest rates resulting from a lower prime rate and more favorable terms under the Company's new credit facility (see Note 5 to the Condensed Consolidated Financial Statements). Nine Months Ended September 30, 1996 Compared to the Nine Months Ended September 30, 1995 Net sales for the first nine months of 1996 increased by $21.3 million, or 43% compared to the same period in 1995. The acquisition of PAI accounted for $19.3 million of the increase. The Motion Control group's sales (electromagnetic components and sub-systems, laser scanners, precision metal optics and high performance air bearings) increased in 1996 by $13.4 million, or 72%, as compared to 1995. The acquisition of PAI accounted for substantially all of the increase in sales. Bookings for the group were $31.4 million in 1996, an increase of $12.1 million or 63%, compared to 1995. The acquisition of PAI resulted in an increase in bookings of $14.6 million while the remaining product lines in the group had a decrease in bookings of $2.5 million This decrease is primarily due to lower European orders for industrial resolvers and lower government spare parts orders for potentiometers. The nature of the Motion Control group's bookings results in an uneven pattern from quarter to quarter and does not necessarily reflect overall business trends. The Industrial Components group's sales (bearings and connectors) increased in 1996 by $2 million, or 6%, compared to 1995. Sales of bearings were up by 13%, reflecting increased business with original equipment manufacturers. Industrial Component's bookings were $31.7 million, a decrease of $.3 million, or 1%, compared to 1995. The sales and bookings of the Precision Machining group (precision machined parts), acquired as a result of the acquisition of PAI, were $6 million and $8.9 million, respectively. Operating income was $5 million in 1996, as compared to $3 million in 1995, representing a $2 million increase. This increase was primarily due to the higher sales volume partially offset by an unfavorable sales mix of lower margin products in the Motion Control Group. Gross margin on sales was 25.4% in 1996, as compared to 26.6% in 1995. Selling, general and administrative expenses increased by $2.8 million in 1996 primarily due to the acquisition of PAI. Selling, general and administrative expenses as a percentage of sales decreased to 18% in 1996, compared to 20% in 1995. Interest expense increased $.8 million in the first nine months of 1996 as a result of higher average borrowings due to the acquisition of PAI. This was partially offset by the effect of lower interest rates resulting from a lower prime rate and the more favorable terms under the Company's new credit facility (see Note 5 to the Condensed Consolidated Financial Statements). Liquidity and Capital Resources Cash provided by operations was $1 million in 1996 as compared to cash used of $.8 million in 1995. This improvement was primarily due to higher cash earnings in the current year partially offset by an increased level of investment in working capital. Cash used in investing activities was $5.9 million in 1996 as compared to cash provided of $2.2 million in 1995. During the second quarter of 1996 the Company acquired PAI (see Note 3 to the Condensed Consolidated Financial Statements). During the first nine months of 1995, $2.9 million was generated from the sale of assets of the Electronics Components business which was discontinued during 1994 and from the sale of its idle Deer Park, New York facility. Cash provided by financing activities was $10.3 million in 1996 as compared to cash used of $1.3 million in 1995. The increase is primarily due to the borrowings used to fund the aforementioned acquisition of PAI (see Note 3 to the Condensed 12 Consolidated Financial Statements) and an unusually high cash balance at the end of the quarter due to the timing of cash receipts and reductions of borrowing under the Company's revolving credit line. The Company had no material commitments for capital expenditures as of September 30, 1996. As discussed in Note 5 to the Condensed Consolidated Financial Statements, the Company entered into a new $37 million senior secured credit facility in connection with its acquisition of PAI. The Company believes this new credit facility and cash generated from the combined operations will be sufficient to meet the future capital expenditure and working capital requirements of the combined companies and required debt amortization under its new credit facility. 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) Exhibits: Exhibit 3: Amendment to Articles of Incorporation Exhibit 10: Amendment No. 1 to Bank Credit Agreement Exhibit 27: Financial Data Schedule (for SEC use only). Exhibit 99: Press release, dated October 7, 1996. b) Reports on Form 8-K None. 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. Date: November 13, 1996 VERNITRON CORPORATION By: /s/ Stephen W. Bershad ---------------------------- Stephen W. Bershad Chief Executive Officer By: /s/ Raymond F. Kunzmann ---------------------------- Raymond F. Kunzmann Vice President - Finance, Controller and Chief Financial Officer EX-3 2 AMENDMENT EXHIBIT 3 --------- State of Delaware Office of the Secretary of State -------------------------------- I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "VERNITRON CORPORATION", FILED IN THIS OFFICE ON THE TWENTY-FIFTH DAY OF JULY, A.D. 1996, AT 9 O'CLOCK A.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDED OF DEEDS FOR RECORDING. ----------------------------------- GREAT SEAL OF THE STATE OF DELAWARE [LOGO] * 1793 * 1847 * 1907 * ----------------------------------- [SEAL] /s/ Edward J. Freel ----------------------------------- Edward J. Freel, Secretary of State AUTHENTICATION: 8042612 DATE: 07-26-96 Exhibit 3 --------- CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF VERNITRON CORPORATION Vernitron Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify: FIRST, that by action by written consent by the Board of Directors of the Corporation, resolutions were duly adopted setting forth a proposed amendment to the Certificate of Incorporation of the Corporation, declaring the amendment to be advisable and calling for consideration thereof at the Annual Meeting of Stockholders of the Corporation. The proposed amendment is as follows: Section 4 of the Certificate of Incorporation of the Corporation shall be amended by: (i) amending and restating in its entirety Section 4(a) thereof, said Section 4(a) to read, as amended and restated, as follows: "4(a) The aggregate number of shares which the Corporation shall have authority to issue is 8,000,000, of which 4,000,000 shares of the par value $.01 per share shall be designated "Preferred Stock", and 4,000,000 shares of the par value $.01 per share shall be designated "Common Stock"; and (ii) by adding to the end of Section 4 the following: "Upon the filing with the Secretary of the State of the State of Delaware of a Certificate of Amendment whereby Section 4(a) of the Certificate of Incorporation of the Corporation is so amended and restated, each share of common stock, par value $.01, of the Corporation issued and outstanding immediately prior thereto shall be combined into 0.20 shares of Common Stock. In lieu of the issuance of a fractional share that would otherwise result from the reverse stock split, the Corporation shall deliver to any stockholder that would otherwise receive a fractional share one additional share." SECOND, that, thereafter the Annual Meeting of Stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the proposed amendment. THIRD, that the proposed amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed by Stephen W. Bershad, its Chairman of the Board and Chief Executive Officer and attested by Elliot N. Konopko, its Secretary, this 25th day of July, 1996. VERNITRON CORPORATION By: /s/ Stephen W. Bershad --------------------------------- Stephen W. Bershad Chairman of the Board and Chief Executive Officer ATTEST: /s/ Elliot N. Konopko - ---------------------------- Elliot N. Konopko, Secretary EX-10 3 FIRST AMENDMENT TO CREDIT AGREEMENT FIRST AMENDMENT TO CREDIT AGREEMENT FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment"), dated as of September 25, 1996, among VERNITRON CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Borrower"), the financial institutions party to the Credit Agreement referred to below (each a "Bank" and, collectively, the "Banks"), and BANQUE PARIBAS, as agent (the "Agent"). All capitalized terms used herein and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement. W I T N E S S E T H : WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit Agreement, dated as of April 25, 1996 (the "Credit Agreement"); WHEREAS, the Borrower desires to purchase the business and certain assets (the "Purchased Assets") of Lockheed Martin Beryllium Corporation and enter into related transactions for an aggregate purchase price of approximately $5,000,000 and to pay related fees and expenses not to exceed $200,000 in the aggregate (collectively, the "Acquisition"), and the Banks are willing to consent to the Acquisition, subject to and on the terms and conditions set forth herein; and WHEREAS, the Borrower has requested that the Banks agree to amend certain provisions of the Credit Agreement, and the Banks are willing to amend such provisions, subject to and on the terms and conditions set forth herein; NOW, THEREFORE, it is agreed: 1. Notwithstanding anything to the contrary contained in the Credit Agreement, the undersigned Banks hereby consent to the Borrower effecting the Acquisition, provided that (i) approximately $1,500,000 of the purchase price for the Acquisition shall be obtained by the Borrower from the sale (including as part of a sale-leaseback transaction) by the Borrower, contemporaneous with the closing of the Acquisition, of a portion of the Purchased Assets, (ii) in connection with the Acquisition, and promptly after the consummation thereof, the Borrower shall receive cash proceeds (together with the proceeds described in clause (i) above, the "Specified Proceeds") of approximately $800,000 from the sale of a second portion of the Purchased Assets and (iii) no later than thirty days after the closing of the Acquisition the Borrower shall grant to the Collateral Agent a first priority perfected security interest in all Purchased Assets (other than the property sold in the manner described in clauses (i) and (ii) above), as set forth in Section 8.17 of the Credit Agreement. Notwithstanding anything to the contrary contained in the Credit Agreement, the Banks SCHEDULE I Page 2 hereby further agree that (i) the Specified Proceeds shall not be required to be applied as a mandatory repayment or commitment reduction, (ii) the acquisition of the Purchased Assets shall not constitute a Capital Expenditure and (iii) the Borrower shall be permitted to make an intercompany loan or advance to Speedring, Inc. in connection with the consummation of the Acquisition. 2. Section 1.01(c)(iii) of the Credit Agreement is hereby amended by (1) inserting the text "the sum of (I)" immediately after the clause heading "(y)" appearing therein; and (2) inserting the following new clause (II) immediately after the text "at such time" appearing at the end of existing clause (y): "and (II) the aggregate principal amount of all Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) then outstanding". 3. Section 1.01 of the Credit Agreement is hereby further amended by inserting in the appropriate order the following new paragraphs (d) and (e): "(d) Subject to and upon the terms and conditions set forth herein, the Swingline Bank agrees to make at any time and from time to time after the First Amendment Effective Date and prior to the Swingline Expiry Date, a loan or loans (each a "Swingline Loan," and collectively, the "Swingline Loans") to the Borrower, which Swingline Loans: (i) shall be made and maintained as Base Rate Loans; (ii) may be repaid and reborrowed in accordance with the provisions hereof; (iii) shall not exceed in aggregate principal amount at any time outstanding, when combined with (x) the aggregate principal amount of all Revolving Loans then outstanding and (y) the amount of all Letter of Credit Outstandings at such time, an amount equal to the Total Revolving Loan Commitment at such time (after giving effect to any reductions to the Total Revolving Loan Commitment on such date); and (iv) shall not exceed in aggregate principal amount at any time outstanding the Maximum Swingline Amount. SCHEDULE I Page 3 The Swingline Bank shall not be obligated to make any Swingline Loans at a time when a Bank Default exists unless the Swingline Bank has entered into arrangements satisfactory to it to eliminate the Swingline Bank's risk with respect to the Bank which is subject of such Bank Default, including by cash collateralizing such Bank's Percentage of the outstanding Swingline Loans. Notwithstanding anything to the contrary contained in this Section 1.01(d), the Swingline Bank shall not make any Swingline Loan after receiving a written notice from the Borrower or the Required Banks stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Bank shall have received written notice of (i) rescission of all such notices from the party or parties originally delivering such notice, (ii) the waiver of such Default or Event of Default by the Required Banks or (iii) the Agent in good faith believes that such Default or Event of Default has ceased to exist. (e) On any Business Day, the Swingline Bank may, in its sole discretion, give notice to the Banks that its outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under Section 10.05 or upon the exercise of any of the remedies provided in the last paragraph of Section 10), in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day from all Banks with a Revolving Loan Commitment (without giving effect to any terminations and/or reductions thereto pursuant to the last paragraph of Section 10) pro rata on the basis of their respective Percentages (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the proceeds thereof shall be applied directly to the Swingline Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make Revolving Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the minimum amount for Borrowings otherwise required hereunder, (ii) whether any conditions specified in Section 5 or 6 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing, and (v) the amount of the Total Revolving Loan Commitment at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under SCHEDULE I Page 4 the Bankruptcy Code with respect to the Borrower), then each such Bank hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Bank such participations in the outstanding Swingline Loans as shall be necessary to cause such Banks to share in such Swingline Loans ratably based upon their respective Percentages (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 10); provided, that (x) all interest payable on the Swingline Loans shall be for the account of the Swingline Bank until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Bank shall be required to pay the Swingline Bank interest on the principal amount of participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter. 4. Section 1.02 of the Credit Agreement is hereby amended by inserting the following proviso to the first sentence appearing therein: "provided that Mandatory Borrowings shall be in the amounts required by Section 1.01(e)". 5. Section 1.03 of the Credit Agreement is hereby amended by (1) inserting the following parenthetical immediately after the text "Whenever the Borrower desires to make a Borrowing hereunder" appearing in the first sentence of paragraph (a): "(excluding Borrowings of Swingline Loans and Mandatory Borrowings)"; (2) redesignating paragraph "(b)" as paragraph "(c)"; (3) inserting the text ", the Swingline Bank" immediately after the word "Agent" each place it appears in the new paragraph (c); (4) inserting the text ", the Swingline Bank's" immediately after the word "Agent's" where it appears in the new paragraph (c); and (5) inserting the following new paragraph (b): "(b) (i) Whenever the Borrower desires to make a Borrowing of Swingline Loans hereunder, it shall give the Swingline Bank not later than 1:00 p.m. (New York SCHEDULE I Page 5 time) on the date that a Swingline Loan is to be made, written notice (or telephonic notice confirmed in writing) of each Swingline Loan to be made hereunder. Each such notice shall be irrevocable and specify in each case (A) the date of Borrowing (which shall be a Business Day) and (B) the aggregate principal amount of Swingline Loans to be made pursuant to such Borrowing. (ii) Mandatory Borrowings shall be made upon the notice specified in Section 1.01(e), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as set forth in Section 1.01(e)." 6. Section 1.04 of the Credit Agreement is hereby amended by deleting the first sentence appearing therein in its entirety and inserting in lieu thereof the following new sentence: "No later than 12:00 Noon (New York time) on the date specified in each Notice of Borrowing (or (x) in the case of Swingline Loans, no later than the close of business on the date specified pursuant to Section 1.03(b)(i) or (y) in case of Mandatory Borrowings, not later than 12:00 Noon (New York time) on the date specified in Section 1.01(e)), each Bank with a Commitment of the respective Tranche will make available its pro rata portion of each Borrowing requested to be made on such date (or in the case of Swingline Loans, the Swingline Bank shall make available the full amount thereof)." 7. Section 1.05(a) of the Credit Agreement is hereby amended by (1) deleting the word "and" appearing immediately before clause (iii); inserting the word "and" immediately after clause (iii); and (3) inserting in the appropriate order the following new clause (iv): "(iv) if Swingline Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-4, with blanks appropriately completed in conformity herewith (the "Swingline Note")". 8. Section 1.05 of the Credit Agreement is hereby further amended by inserting in the appropriate order the following new paragraph (f): "(f) The Swingline Note issued to the Swingline Bank shall (i) be executed by the Borrower, (ii) be payable to the order of the Swingline Bank or its registered SCHEDULE I Page 6 assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal amount equal to the Maximum Swingline Amount and be payable in the principal amount of the outstanding Swingline Loans evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to voluntary repayment as provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement and the other Credit Documents." 9. Section 1.06 of the Credit Agreement is hereby amended by inserting after the text "of the outstanding principal amount of the Loans" the first time it appears therein the following parenthetical: "(other than Swingline Loans which may not be converted pursuant to this Section 1.06)". 10. Section 1.12(x)(i) of the Credit Agreement is hereby amended by (1) deleting the word "and" appearing immediately before clause (y); inserting the word "and" immediately after clause (y); and inserting in the appropriate order the following new clause (z): "(z) the Swingline Bank an amount equal to such Replaced Bank's Percentage of any Mandatory Borrowing to the extent such amount was not theretofore funded by such Replaced Bank". 11. Section 2.01(c) of the Credit Agreement is hereby amended by inserting the text "and Swingline Loans" immediately after the text "all Revolving Loans" appearing in clause (i)(y). 12. Section 4.01 of the Credit Agreement is hereby amended by (1) inserting immediately after the text "one Business Day's prior written notice in the case of Base Rate Loans" appearing in clause (i) the following parenthetical: "(or same day notice in the case of Swingline Loans provided such notice is given prior to 12:00 noon (New York time))"; and (2) inserting immediately after the number "$100,000" appearing in clause (ii) the following parenthetical: SCHEDULE I Page 7 "(or, in the case of Swingline Loans, $50,000 and, if greater, in an integral multiple of $50,000)". 13. Section 4.02(A)(a) of the Credit Agreement is hereby amended by (1) inserting immediately after the text "the aggregate outstanding principal amount of the Revolving Loans" appearing in the first sentence, the new text ", Swingline Loans"; (2) inserting immediately after the text "the Borrower shall prepay" appearing in the first sentence, the new text "on such day principal of Swingline Loans and after the Swingline Loans have been repaid in full,"; and (3) inserting immediately before the text "all outstanding Revolving Loans" appearing in the second sentence, the new text "all outstanding Swingline Loans and". 14. The Credit Agreement is hereby further amended by deleting Section 4.02(B)(c) in its entirety and inserting in lieu thereof the following new Section 4.02(B)(c): "(c) Notwithstanding anything to the contrary contained elsewhere in this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on the Swingline Expiry Date and (ii) all other outstanding Loans under each Tranche shall be repaid in full on the Maturity Date applicable to such Tranche." 15. Section 4.03 of the Credit Agreement is hereby amended by inserting immediately after the parenthetical "(New York time)" appearing therein the following new parenthetical: "(or 1:00 p.m. (New York time) in the case of Swingline Loans)". 16. The Credit Agreement is hereby further amended by deleting Section 6.04(a) in its entirety and inserting in lieu thereof the following new Section 6.04(a): "(a) Prior to the making of each Loan (other than a Swingline Loan or a Mandatory Borrowing), the Agent shall have received a Notice of Borrowing meeting the requirements of Section 1.03. Prior to the making of each Swingline Loan, the Swingline Bank shall have received the notice referred to in Section 1.03(b)(i)." SCHEDULE I Page 8 17. Section 7.08(b) of the Credit Agreement is hereby amended by inserting immediately after the text "All proceeds of Revolving Loans" where it appears therein, the text "and Swingline Loans". 18. Section 11 of the Credit Agreement is hereby amended by deleting the definitions of 'Applicable Margin', 'Bank Default', 'Base Rate Loan', 'Borrowing', 'Loan', 'Note', 'Required Banks', 'Total Unutilized Revolving Loan Commitment' and 'Tranche', and inserting in lieu thereof the following new definitions in the appropriate alphabetical order: "'Applicable Margin' shall mean a percentage per annum equal to (i) (A) in the case of A Term Loans, Revolving Loans and Swingline Loans which are maintained as Base Rate Loans, 1.75% and (B) in the case of B Term Loans which are maintained as Base Rate Loans, 2.25% and (ii) (A) in the case of A Term Loans and Revolving Loans which are maintained as Eurodollar Loans, 3.25% and (B) in the case of B Term Loans which are maintained as Eurodollar Loans, 3.75%. 'Bank Default' shall mean (i) the refusal (which has not been retracted) of a Bank to make available its portion of any Borrowing (including a Mandatory Borrowing) or to fund its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the Agent that it does not intend to comply with its obligations under Section 1.01 or 2, including in either case as a result of any takeover of such Bank by any regulatory authority or agency. 'Base Rate Loan' shall mean (i) each Swingline Loan and (ii) each Loan designated or deemed designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. 'Borrowing' shall mean the borrowing of one Type of Loan of a single Tranche from all the Banks having Commitments with respect to such Tranche (or from the Swingline Bank in the case of Swingline Loans) on a pro rata basis on a given date (or resulting from a conversion or conversions on such date) having in the case of Eurodollar Loans the same Interest Period; provided, that Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans. 'Loan' shall mean each Term Loan, each Revolving Loan and each Swingline Loan. SCHEDULE I Page 9 'Note' shall mean each A Term Note, each B Term Note, each Revolving Note and the Swingline Note. 'Required Banks' shall mean Banks the sum of whose outstanding Term Loans, Term Loan Commitments (to the extent not theretofore terminated) and Revolving Loan Commitments (or after the termination thereof, the sum of outstanding Revolving Loans, Swingline Loans and Letter of Credit Outstandings), represent an amount greater than 50% of the sum of all outstanding Term Loans, the then Total Term Loan Commitments (to the extent not theretofore terminated) and the Total Revolving Loan Commitment (or after the termination thereof, the sum of the then total outstanding Revolving Loans, Swingline Loans and Letter of Credit Outstandings). 'Total Unutilized Revolving Loan Commitment' shall mean, at any time, an amount equal to the remainder of (x) the then Total Revolving Loan Commitment, less (y) the sum of the aggregate principal amount of Revolving Loans and Swingline Loans then outstanding plus the then aggregate amount of Letter of Credit Outstandings. 'Tranche' shall mean the respective facility and commitments utilized in making Loans hereunder, with there being four separate Tranches, i.e., whether A Term Loans, B Term Loans, Revolving Loans or Swingline Loans." 19. Section 11 of the Credit Agreement is hereby further amended by inserting into the definition of 'Excess Cash Flow' the text "or Swingline Loans" immediately after the term "Revolving Loans" appearing in the parenthetical contained in the proviso to clause (ii)(b). 20. Section 11 of the Credit Agreement is hereby further amended by inserting the following new definitions in the appropriate alphabetical order: "'First Amendment' shall mean the First Amendment, dated as of September 25, 1996, to this Agreement. 'First Amendment Effective Date' shall have the meaning provided in the First Amendment. SCHEDULE I Page 10 'Mandatory Borrowings' shall have the meaning provided in Section 1.01(e). 'Maximum Swingline Amount' shall mean $2,000,000. 'Swingline Bank' shall mean Banque Paribas, in its capacity as the lender of Swingline Loans. 'Swingline Expiry Date' shall mean the date which is three Business Days prior to the Revolving Loan Maturity Date. 'Swingline Loans' shall have the meaning provided in Section 1.01(d). 'Swingline Note' shall have the meaning provided in Section 1.05(a)." 21. Section 13.12 of the Credit Agreement is hereby amended by inserting the following new clause "(t)" in the appropriate order in the second proviso to paragraph (a): "(t) without the consent of the Swingline Bank, amend, modify or waive any provision relating to the rights or obligations of the Swingline Bank or with respect to Swingline Loans (including, without limitation, the obligations of the other Banks with Revolving Loan Commitments to fund Mandatory Borrowings); or". 22. The Credit Agreement is hereby further amended by inserting Exhibit B-4 attached hereto as a new Exhibit thereto. 23. On and after the First Amendment Effective Date, Schedule I to the Credit Agreement is hereby amended by deleting the same in its entirety and inserting in lieu thereof as a new Schedule I thereto the Schedule I attached hereto which increases the Total Revolving Loan Commitment from $10,000,000 to $11,000,000. Banque Paribas, in its capacity as a Bank, (the "Increasing Bank") hereby acknowledges and agrees that from and after the First Amendment Effective Date its Revolving Loan Commitment shall be the amount set forth opposite the Increasing Bank's name on Schedule I attached hereto, as such amount may be reduced from time to time in accordance with the terms of the Credit Agreement. 24. The Company hereby agrees that on or after the First Amendment Effective Date and upon the request of the Collateral Agent, it will execute such amendments SCHEDULE I Page 11 to the Mortgages as the Collateral Agent shall require in connection with the transactions contemplated by this First Amendment. 25. In order to induce the Banks to enter into this First Amendment, the Borrower hereby represents and warrants that on the First Amendment Effective Date, both before and after giving effect to this First Amendment, (1) no Default or Event of Default shall exist and (2) all of the representations and warranties contained in the Credit Documents shall be true and correct in all material respects, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date). 26. This First Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document. 27. This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Agent. 28. THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 29. The headings of the several sections of this First Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision hereof. 30. This First Amendment shall become effective as of the date hereof (the "First Amendment Effective Date") when (1) each of the Borrower, each Bank and the Collateral Agent shall have signed a copy hereof (whether the same or different copies) and shall have delivered (including by way of telecopier) the same to the Agent, (2) the Borrower shall have executed and delivered to the Agent for the benefit of the Increasing Bank a new Revolving Note reflecting the increase in the Revolving Loan Commitment of the Increasing SCHEDULE I Page 12 Bank and (4) the Borrower shall have executed and delivered to the Agent for the benefit of the Swingline Bank a Swingline Note in the form of Exhibit B-4 hereto. * * * SCHEDULE I Page 13 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this First Amendment to be duly executed and delivered as of the date first above written. VERNITRON CORPORATION By /s/ Elliot N. Konopko --------------------------------- Name: Elliot N. Konopko Title: Vice President BANQUE PARIBAS, Individually, as Agent and as Collateral Agent By /s/ Donald J. Ercole --------------------------------- Name: Donald J. Ercole Title: Vice President By /s/ Judith A. Kirstsner --------------------------------- Name: Judith A. Kirstsner Title: Assistant Vice President PRIME INCOME TRUST By /s/ /Rafael Scolari --------------------------------- Name: Rafael Scolari Title: Vice President - Portfolio Manager SCHEDULE I Page 14 FIRST SOURCE FINANCIAL LLP, By First Source Financial, Inc., its Agent/Manager By /s/ Thomas F. Thompson --------------------------------- Name: Thomas F. Thompson Title: Assistant Vice President IBJ SCHRODER BANK & TRUST COMPANY By /s/ Alllan J. Pagnotta --------------------------------- Name: Allan J. Pagnotta Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO By /s/ S. Thomas Knoff --------------------------------- Name: S. Thomas Knoff Title: Vice President SCHEDULE I Page 15 COMMITMENTS A Term Loan B Term Loan Revolving Loan Bank Commitment Commitment Commitment - ---- ----------- ----------- -------------- Banque Paribas $4,700,000 $ 0 $4,300,000 Prime Income Trust 0 4,000,000 0 First Source 3,500,000 3,000,000 2,500,000 Financial LLP IBJ Schroder Bank & 2,900,000 2,500,000 2,100,000 Trust Company The First National 2,900,000 2,500,000 2,100,000 Bank of Chicago ----------- ----------- ----------- Totals: $14,000,000 $12,000,000 $11,000,000 EXHIBIT B-4 SWINGLINE NOTE $2,000,000 New York, New York April 25, 1996 FOR VALUE RECEIVED, VERNITRON CORPORATION, a Delaware corporation (the "Borrower"), hereby promises to pay to the order of BANQUE PARIBAS (the "Bank"), in lawful money of the United States of America in immediately available funds, at the office of Banque Paribas (the "Agent") located at 787 Seventh Avenue, New York, New York 10019, on the Swingline Expiry Date (as defined in the Agreement referred to below) the principal sum of TWO MILLION DOLLARS ($2,000,000) or, if less, the then unpaid principal amount of all Swingline Loans (as defined in the Agreement referred to below) made by the Bank pursuant to the Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Agreement referred to below. This Note is the Swingline Note referred to in the Credit Agreement, dated as of April 25, 1996, among the Borrower, the financial institutions from time to time party thereto (including the Bank) and the Agent (as from time to time in effect, the "Agreement") and is entitled to the benefits thereof. This Note is also entitled to the benefits of the Subsidiaries Guaranty (as defined in the Agreement) and is secured by and entitled to the benefits of the Security Documents (as defined in the Agreement). As provided in the Agreement, this Note is subject to voluntary prepayment and mandatory repayment prior to the Swingline Expiry Date, in whole or in part. In case an Event of Default (as defined in the Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may be declared to be due and payable in the manner and with the effect provided in the Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. VERNITRON CORPORATION By__________________________ Title: EX-27 4 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET OF VERNITRON CORPORATION AS OF SEPTEMBER 30, 1996 AND THE RELATED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 5,552 0 14,392 456 28,511 48,696 23,736 7,136 77,010 22,334 0 0 7 26 15,817 77,010 70,733 70,733 52,781 52,781 12,981 0 2,333 2,663 1,115 1,548 0 (173) 0 1,375 .28 .28
EX-99 5 PRESS RELEASE CONTACT: Elliot Konopko Vernitron Corporation (212) 593-7900 New York, New York, October 7, 1996 -- Vernitron Corporation (NASDAQ: VRNT) announced today that its subsidiary, Speedring, Inc., has acquired substantially all of the assets of Lockheed Martin Beryllium Corporation (formerly Loral American Beryllium Corporation). Both Speedring, Inc. and Lockheed Martin Beryllium are engaged in the precision machining of beryllium and other exotic materials for use in commercial satellite systems and other aerospace applications. The purchase price was not disclosed. Vernitron Corporation manufactures and distributes precision actuation and optical scanning systems and related components, including precision metal optics, motor and position feedback devices, ball and air bearings and interconnect devices for use in high-performance commercial, industrial and defense applications. -----END PRIVACY-ENHANCED MESSAGE-----