UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                -----------------


                                    FORM 10-Q


(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, 2002
                                       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)

              Delaware                                         16-1158413
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
       incorporation of organization)

       205 Indigo Creek Drive, Rochester, New York             14626
        (Address of principal executive offices)            (Zip Code)

                               -------------------

       Registrant's telephone number, including area code: (585) 256-0200

                               -------------------


     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
12,277,453 as of October 31, 2002.
     ---------------------------------------------------------------------
<PAGE>





             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES

                                      INDEX


                                                                            Page

PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

           Consolidated Balance Sheets as of September 30, 2002 (unaudited)
           and December 31, 2001                                              3

           Consolidated Statements of Income For The Three and Nine Months
           Ended September 30, 2002 and 2001 (unaudited)                      4

           Consolidated Statements of Cash Flows For The Nine
           Months Ended September 30, 2002 and 2001 (unaudited)               5

           Notes to Consolidated Financial Statements For The Nine
           Months Ended September 30, 2002 (unaudited)                        6

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                7

Item 3.  Quantitative and Qualitative Disclosures About Market Risk          13

Item 4.  Controls and Procedures                                             13



PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                   14

Item 6.  Exhibits and Reports on Form 8-K                                    14

Signatures                                                                   15

Certifications                                                               16



<PAGE>
                         PART I. FINANCIAL INFORMATION


ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS


                                               September 30,       December 31,
                                                   2002                2001
                                             -----------------  ----------------
                                               (unaudited)

Current assets:
  Cash and cash equivalents                   $25,791,000           $26,913,000
  Marketable securities                         2,011,000
  Accounts receivable, net                      2,532,000             6,905,000
  Inventories, net                              3,892,000             3,756,000
  Prepaid expenses and other                      371,000               359,000
  Deferred taxes                                  626,000               608,000
                                             -----------------  ----------------

       Total current assets                    35,223,000            38,541,000

Property, equipment and improvements, net       2,346,000             2,465,000
Software development costs, net                 2,028,000             1,948,000
Note receivable from unconsolidated company     1,000,000
Investment in unconsolidated company            1,488,000
                                             -----------------  ----------------

       Total assets                           $42,085,000           $42,954,000
                                             =================  ================



                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Accounts payable                            $   557,000           $   417,000
  Income taxes payable                            108,000               350,000
  Accrued expenses                              2,406,000             3,046,000
                                             -----------------  ----------------

       Total current liabilities                3,071,000             3,813,000

Deferred taxes                                    826,000               799,000
                                             -----------------  ----------------
       Total liabilities                        3,897,000             4,612,000
                                             -----------------  ----------------


Stockholders' equity:
  Preferred stock - $.01 par value; 1,000,000
    shares authorized; none issued
  Common stock - $.01 par value; 50,000,000
    shares authorized; 13,260,038 shares issued   133,000               133,000
  Additional paid-in capital                   10,934,000            11,305,000
  Retained earnings                            39,848,000            40,239,000
  Treasury stock - at cost; 979,185 and
    1,024,547 shares held at September 30, 2002
    and December 31, 2001, respectively       (12,663,000)          (13,284,000)
  Accumulated other comprehensive loss            (64,000)              (51,000)
                                             -----------------  ----------------
       Total stockholders' equity              38,188,000            38,342,000
                                             -----------------  ----------------

       Total liabilities and stockholders'
         equity                               $42,085,000           $42,954,000
                                             =================  ================


     The accompanying notes are an integral part of these consolidated financial
statements.


<PAGE>


             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
<TABLE>
<S>                                             <C>                <C>                 <C>                <C>



                                                    Three Months Ended                      Nine Months Ended
                                                       September 30,                          September 30,
                                                  2002               2001               2002                2001
                                             ---------------    ----------------   ----------------    ---------------


Sales                                           $ 3,955,000        $  9,871,000        $16,981,000        $29,015,000
Cost of goods sold                                2,216,000           3,378,000          7,544,000         10,798,000
                                             ---------------    ----------------   ----------------    ---------------
Gross profit                                      1,739,000           6,493,000          9,437,000         18,217,000
                                             ---------------    ----------------   ----------------    ---------------

Operating expenses:
  Selling and marketing                             855,000           1,357,000          3,128,000          4,255,000
  Research and development                        1,576,000           1,897,000          4,757,000          6,157,000
  General and administrative                        558,000             783,000          1,717,000          2,347,000
  Restructuring charges                             410,000                                573,000
  Class action legal settlement                     143,000                                143,000
                                             ----------------   ----------------   ----------------    ---------------
      Total operating expenses                    3,542,000           4,037,000         10,318,000         12,759,000
                                             ----------------   ----------------   ----------------    ---------------

Income (loss) from operations                    (1,803,000)          2,456,000           (881,000)         5,458,000

Other income, net                                    95,000             187,000            332,000            783,000
                                             ---------------    ----------------   ----------------    ---------------
Income (loss) before income taxes
   and minority interest                         (1,708,000)          2,643,000           (549,000)         6,241,000

Provision for income taxes                         (529,000)            873,000           (170,000)         2,060,000
                                             ---------------    ----------------   ----------------    ---------------
Income (loss) before minority
   interest                                      (1,179,000)          1,770,000           (379,000)         4,181,000

Minority interest                                   (12,000)                               (12,000)
                                             ---------------    ----------------   ----------------    ---------------

      Net income (loss)                         $(1,191,000)       $  1,770,000        $  (391,000)       $ 4,181,000
                                             ================   ================   ================    ===============



Basic earnings (loss) per share                 $      (.10)       $        .14        $      (.03)       $       .34
                                             ===============    ================   ================    ===============

Diluted earnings (loss) per share               $      (.10)       $        .14        $      (.03)       $       .33
                                             ===============    ================   ================    ===============



Weighted average number of
  common shares used in basic earnings
  per share                                      12,280,853          12,225,890         12,259,834         12,298,859
Common equivalent shares                                                439,121                               448,528
                                             ---------------    ----------------   ----------------    ---------------

Weighted average number of
  common shares used in diluted earnings
  per share                                      12,280,853          12,665,011         12,259,834         12,747,387
                                             ================   ================   ================    ===============
</TABLE>




     The accompanying notes are an integral part of these consolidated financial
statements


<PAGE>


             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                          Nine Months Ended
                                                            September 30,
                                                      2002              2001
                                                --------------    --------------

Cash flows from operating activities:
 Net income (loss)                               $ (391,000)        $ 4,181,000

Non-cash adjustments:
    Depreciation and amortization                 1,592,000           1,187,000
    Minority interest                                12,000
    Other                                           250,000             417,000

Changes in operating assets and liabilities:
    Accounts receivable                           4,185,000            (102,000)
    Inventories                                    (136,000)          1,746,000
    Prepaid expenses and other                      (13,000)            315,000
    Accounts payable and accrued expenses          (503,000)         (1,203,000)
    Income taxes payable                           (243,000)           (219,000)
                                                --------------    --------------
      Net cash provided by operating activities   4,753,000           6,322,000
                                                --------------    --------------
Cash flows from investing activities:
 Purchases of property, equipment and improvements (665,000)         (1,139,000)
 Capitalized software development costs            (949,000)         (1,278,000)
 Purchase of marketable securities               (2,011,000)             (5,000)
 Maturities of marketable securities                                 10,000,000
 Note receivable from unconsolidated company     (1,000,000)
 Investment in unconsolidated company            (1,500,000)
                                                --------------    --------------
      Net cash (used) provided by investing
        activities                               (6,125,000)          7,578,000
                                                --------------    --------------

Cash flows from financing activities:
 Exercise of stock options and warrants             250,000             511,000
 Purchase of treasury stock                                          (6,821,000)
                                                --------------    --------------
      Net cash provided (used) by financing
        activities                                  250,000          (6,310,000)
                                                --------------    --------------

      Net (decrease) increase in cash and
        cash equivalents                         (1,122,000)          7,590,000

Cash and cash equivalents at beginning of period 26,913,000          17,187,000
                                                --------------    --------------

Cash and cash equivalents at end of period      $25,791,000         $24,777,000
                                                ==============    ==============




     The accompanying notes are an integral part of these consolidated financial
statements


<PAGE>



             PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
                                   (Unaudited)


Note - A  The  unaudited  Consolidated   Financial   Statements  of  Performance
Technologies,  Incorporated and Subsidiaries  (the "Company") 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 of the  Securities  and Exchange  Commission.  Accordingly,  the
Consolidated  Financial  Statements  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  have been  included.  The  results  for the
interim periods are not necessarily indicative of the results to be expected for
the year. The accompanying  Consolidated  Financial Statements should be read in
conjunction with the audited Consolidated Financial Statements of the Company as
of December 31, 2001,  as reported in its Annual  Report on Form 10-K filed with
the Securities and Exchange Commission.

Note - B During the nine months ended  September 30, 2002,  45,362 common shares
were issued upon the exercise of stock options.

Note - C  Inventories  consisted  of the  following  at  September  30, 2002 and
December 31, 2001:
                                                September 30,       December 31,
                                                    2002                2001
                                                ------------        ------------

Purchased parts and components                  $1,494,000           $1,329,000
Work in process                                  2,571,000            2,778,000
Finished goods                                     791,000              468,000
                                                ------------        ------------
                                                 4,856,000            4,575,000
Less:  reserve for inventory obsolescence         (964,000)            (819,000)
                                                ------------        ------------
   Net                                          $3,892,000           $3,756,000
                                                ============        ============

Note - D On  September  19,  2002, the Company completed an agreement to  invest
$1.5  million  in  Momentum  Computer,  Inc., a developer of specialized  single
board  computer  solutions for the data  communications,  telecom, military, and
aerospace  markets.   Based  on  the terms of the agreement, the Company  owns a
minority  interest in Momentum  Computer,  Inc.  and loaned  Momentum  Computer,
Inc. $1.0 million to be used for working capital.   The  Company  has the option
to acquire  the  remaining ownership of  Momentum Computer, Inc. during a future
specified period.

Note - E In September  2002, the Company  improved its cost structure  primarily
through  reductions in the Company's staff and by consolidating  the engineering
operations  from its Raleigh,  North Carolina  facility into its Ottawa,  Canada
Signaling Systems Group.   This  plan has  been  completed  and  resulted  in  a
reduction in workforce of  approximately  7%. During the third  quarter of 2002,
the Company recorded a restructuring charge amounting to $410,000.

Note - F In September 2002, the Company signed a Memorandum of Understanding for
settlement of the class action  litigation filed against the Company and certain
of its directors and officers in May 2000. During the third quarter of 2002, the
Company recorded a charge amounting to $143,000 for the class action  settlement
cost.

Note - G On  October  2,  2002,  subsequent  to  the  end of  the third  quarter
2002,  the  Company   acquired  a  portion  of  Intel   Corporation's   Embedded
Communications  Platform Division. The acquisition was completed pursuant to the
Stock Purchase  Agreement,  dated September 12, 2002,  between Intel Corporation
and the  Company to acquire  all the  issued and  outstanding  shares of Ziatech
Corporation  which is located  in San Luis  Obispo,  California  and which was a
wholly owned subsidiary of Intel  Corporation.  The stock purchase was completed
at a cash purchase  price of $2,967,000.  In connection  with the stock purchase
agreement,  the Company entered into certain  arrangements  respecting inventory
and the cross  licensing of  intellectual  property  with Intel.  Following  the
completion  of the  acquisition,  Ziatech  Corporation  became  a  wholly  owned
subsidiary of  Performance  Technologies  and changed its name to PTI California
Corporation.
<PAGE>


ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS

Matters discussed in Management's Discussion and Analysis of Financial Condition
and  Results  of   Operations   and   elsewhere   in  this  Form  10-Q   include
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as  amended,  and are  subject  to the safe  harbor  provisions  of the  Private
Securities  Litigation  Reform Act of 1995.  Actual results of operations  could
differ materially from those discussed in the forward-looking statements.

Overview

Business Strategy:  Performance Technologies,  Incorporated (the "Company") is a
global  supplier of innovative  communications,  SS7  signaling  and  networking
equipment.  The  Company's  products  fall into three  distinct  areas:  network
access,  SS7  signaling,  and IP Ethernet  switches.  The Company's  development
efforts are directed at future growth opportunities that utilize the evolving IP
(Internet Protocol) standard.  IP based  communications and systems products are
generally  viewed in the  industry as the  foundation  for data  communications,
next-generation  telecommunications  systems and  services,  as well as embedded
systems for video and mass storage applications. Customer applications utilizing
the Company's products and technologies include:  embedded systems platforms for
a broad range of industries,  data  communications and  telecommunications.  The
Company's  products  are  based  on   open architectures   and  are  focused  on
reliability and high availability requirements.

Traditionally,  the Company has focused on  providing  "Best-of-Breed"  products
that are  integrated  into embedded  systems.  The Company's  development of the
PICMG 2.16 embedded systems standard and the success of the Company's  IPnexusTM
switch  product  family over the past two years led management to seek expansion
of its product  lines to include  more  components  typically  found in embedded
systems.  During the  quarter,  the  Company  initiated  a number of  definitive
actions toward building this expanded capability, as discussed below.

In  early  October  2002,  the  Company  completed the  purchase of a portion of
Intel   Corporation's   Communications   Platform  Division   (formerly  Ziatech
Corporation)  located in San Luis Obispo,  California  for $3.0 million in cash.
The Ziatech line of single board computer processor modules and system platforms
are expected to be important  elements in enabling  Performance  Technologies to
become a leading  supplier of CompactPCI and PICMG 2.16 platforms.  In addition,
this acquisition is expected to provide  synergistic  opportunities  for revenue
growth for the Company's access, signaling and switching products.

In September  2002,  the Company  completed an investment in Momentum  Computer,
Inc., a developer of  specialized  single board  computer  solutions  located in
Carlsbad,  California.  Based  on  the  terms  of  the  agreement,   Performance
Technologies  invested $1.5 million for a minority interest in Momentum Computer
and loaned an additional $1 million to be used for working capital.  In the near
term,  the  relationship  with  Momentum  is  expected  to  provide   additional
opportunities for the Company's products. Within twenty-four months, the Company
will have the option to acquire 100% ownership of Momentum Computer,  based on a
valuation  tied to growth  and  profitability  metrics.

Financial Information.  Revenue  in the third quarter  2002  was  $4.0  million,
compared to $9.9 million in the corresponding  quarter a year earlier.  Net loss
for the third  quarter  2002  amounted  to $1.2  million,  or  $(.10)  per share
including  expenses  associated with  restructuring  and class action settlement
costs.  The  continuing  decline in capital  spending  in the  Company's  target
markets  resulted  in  lower  than  anticipated  Company  revenue  and  prompted
management  to take action in  September  2002 to improve its cost  structure by
reducing   staffing  and  consolidating  the  engineering  and  product  support
functions  performed  in the  Raleigh,  North  Carolina  office into the Ottawa,
Canada  Signaling  Systems  Group.  During the third  quarter,  the Company also
signed  a  Memorandum  of  Understanding  for  settlement  of the  class  action
litigation  outstanding since May 2000. A restructuring  charge amounting to $.4
million  (pre-tax),  or $.02 per  share  and the class  action  settlement  cost
amounting to $.1 million (pre-tax), or $.01 per share were recorded in the third
quarter 2002.  Excluding the restructuring and class action settlement  charges,
net loss for the third quarter 2002 was $.8 million,  or $(.07) per share, based
on 12.3 million shares outstanding. Net income amounted to $1.8 million, or $.14
per share for the third quarter 2001, based on 12.7 million shares outstanding.

Revenue for the nine months ended September 30, 2002 was $17.0 million, compared
to $29.0 million in the  corresponding  period a year earlier.  Net loss for the
first nine months 2002 amounted to $0.4 million,  or $(.03) per share  including
expenses  associated with  restructuring  and class action settlement costs. For
the first nine  months  2002,  restructuring  charges  amounting  to $.6 million
(pre-tax),  or $.03 per share and the class action  settlement cost amounting to
$.1  million  (pre-tax),  or  $.01  per  share  were  recorded.   Excluding  the
restructuring and class action settlement charges, net income for the first nine
months 2002 amounted to $0.1 million,  or $.01 per share on 12.4 million  shares
outstanding.  Net income  amounted  to $4.2  million,  or $.33 per share for the
comparable period in 2001, based on 12.7 million shares outstanding.

Cash, cash  equivalents and marketable  securities  amounted to $27.8 million at
September  30,  2002,  compared  to  $26.9  million  at the end of  2001  and no
long-term  debt existed at either date.  For the first nine months of 2002,  the
Company generated net cash from operating  activities of $4.8 million,  compared
to $6.3 million for the same period in 2001.

The  continuing  decline  in  capital   spending  in  the   communications   and
telecommunications  markets  dramatically  impacted access and signaling product
revenue in the third quarter.  Notwithstanding  these spending  reductions,  the
Company continued to experience  follow-through of orders for its IPnexus switch
products  that  address a broader  range of  markets.  Management  continues  to
believe the Company's  products are well  positioned  when  economic  conditions
improve.

FAS 144 - In August  2001,  the FASB issued SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 addresses  financial
accounting and reporting for the impairment or disposal of long-lived  assets to
be held and used, to be disposed of other than by sale, and to be disposed of by
sale.  On January 1, 2002, the Company  adopted  SFAS No. 144.  Adoption of this
statement  did not have an impact on the results of  operations or the financial
position of the Company.

FAS 146 - In July 2002,  the FASB  issued SFAS No.  146,  "Accounting  for Costs
Associated  with Exit or  Disposal  Activities."  SFAS No. 146  requires  that a
liability for costs  associated with an exit or disposal  activity be recognized
when it is incurred  and measured  initially at fair value.  On July 1, 2002 the
Company adopted SFAS No. 146. Adoption of this statement did not have a material
impact on the results of operations or the financial position of the Company.

Forward  Looking  Guidance for the Fourth  Quarter 2002  (published  October 24,
2002):

The following includes forward-looking  statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 and are subject to the safe harbor provisions of the Private  Securities
Litigation Reform Act of 1995.

The Company`s  communications,  signaling and networking products are integrated
into current and next-generation embedded systems infrastructure. A "design win"
is when a customer or prospective customer notifies the Company that its product
has been selected to be integrated  with their  product.  Traditionally,  design
wins have been an important metric for management to judge the Company's product
acceptance in its marketplace and typically design wins reach production volumes
at varying rates, generally beginning twelve-to-eighteen months after the design
win occurs. A variety of risks such as schedule delays,  cancellations,  changes
in customer  markets and economic  conditions can adversely  affect a design win
before  production  is  reached or during  deployment.  While  management  still
believes  that  design wins are an  important  metric in  evaluating  the market
acceptance  of the Company's  products,  unfortunately  in the current  economic
climate,  fewer  customers are doing new design  activity and a lesser number of
these  design wins are moving into  production  than in the past.  In  addition,
during difficult economic periods,  customer's  visibility  deteriorates causing
delays in the  placement of orders.  These factors often result in a substantial
portion of the  Company's  revenue  being  derived from orders placed within the
quarter and shipped in the final weeks of the quarter.

The  continuing  decline in capital spending  in  the Company's  target  markets
resulted in lower than  anticipated  Company revenue and prompted  management to
take action in September  2002 to improve its cost  structure.  Beginning in the
forth quarter, management expects the Company would be profitable with projected
annual revenue of  approximately  $24 million  (excluding the acquisition of the
Ziatech Corporation).  Furthermore,  new project deployments and design activity
were sluggish during the third quarter. The Company realized six new design wins
for its IPnexus  products during the third quarter,  following twelve new design
wins for the first six months of 2002 and  thirty-five  new design  wins  during
2001.

In early October 2002, the Company completed the purchase of a portion of  Intel
Corporation's Communications Platform Division  (formerly  Ziatech Corporation).
Management  expects this new operation  would be  profitable  for  2003  at  $20
million in revenue.

The  Company's  revenue  during  the  fourth  quarter   will  include  its   new
Computing Products Group (formerly Ziatech Corporation).  Based upon the current
distribution  of business,  the current  backlog and review of sales  forecasts,
management  expects  revenue  during  the  forth  quarter,  including  the newly
acquired  operations,  to be $9.0  million  to $10.0  million.  Gross  margin is
expected to be  approximately  50% to 52% and diluted earnings per share for the
fourth quarter is expected to be $.00 to $.04.

More in-depth  discussions of the Company's  strategy and financial  performance
can be found in the Company's recent Annual and Quarterly Reports,  on Form 10-K
and Form 10-Q, as filed with the Securities and Exchange Commission.

<PAGE>

         Quarter and Nine Months Ended September 30, 2002, Compared with
              the Quarter and Nine Months Ended September 30, 2001

The following table presents the percentage of sales represented by each item in
the Company's consolidated statements of income for the periods indicated:
<TABLE>
<S>                                             <C>                 <C>                <C>                  <C>


                                                  Three Months Ended                      Nine Months Ended
                                                    September 30,                           September 30,
                                                2002                2001               2002                2001
                                             ----------         -----------        -----------         ------------

Sales                                           100.0%              100.0%             100.0%               100.0%
Cost of goods sold                               56.0                34.2               44.4                 37.2
                                             ----------         -----------        -----------         ------------
Gross profit                                     44.0                65.8               55.6                 62.8
                                             ----------         -----------        -----------         ------------
Operating expenses:
  Selling and marketing                          21.6                13.8               18.5                 14.7
  Research and development                       39.9                19.2               28.0                 21.2
  General and administrative                     14.1                 7.9               10.1                  8.1
  Restructuring charges                          10.4                                    3.4
  Class action legal settlement                   3.6                                     .8
                                             ----------         -----------        -----------         ------------
        Total operating expenses                 89.6                40.9               60.8                 44.0
                                             ----------         -----------        -----------         ------------
Income (loss) from operations                   (45.6)               24.9               (5.2)                18.8

Other income, net                                 2.4                 1.9                2.0                  2.7
                                             ----------         -----------        -----------         ------------
Income (loss) before income taxes
   and minority interest                        (43.2)               26.8               (3.2)                21.5

Provision for income taxes                       13.4                (8.9)               1.0                 (7.1)

                                             ----------         -----------        -----------         ------------
Income (loss) before minority
   interest                                     (29.8)               17.9               (2.2)                14.4

Minority interest                                (0.3)                                  (0.1)
                                             ----------         -----------        -----------         ------------
         Net income (loss)                      (30.1)               17.9               (2.3)                14.4
                                             ==========         ===========        ===========         ============
</TABLE>

Sales.  Total revenue for the third  quarter 2002 was $4.0 million,  compared to
$9.9 million for the same quarter in 2001.  Revenue for the first nine months of
2002 was $17.0  million,  compared to $29.0 million for the same period in 2001.
For the  periods  indicated,  the  Company's  products  are  grouped  into three
distinct  categories  in  one  market  segment:  Signaling  and  network  access
products,  IP Switching  products and Other products.  Revenue from each product
category is  expressed  as a  percentage  of sales for the three and nine months
ending September 30, 2002 and 2001:
<TABLE>
<S>                                                      <C>              <C>                 <C>                <C>

                                                       Three Months Ended                    Nine Months Ended
                                                           September 30,                       September 30,
                                                       2002              2001               2002               2001
                                                   ----------        ---------          ----------        -----------

Signaling and network access products                    80%              90%                 86%                87%
IP Switching products                                    17%               4%                 11%                 4%
Other                                                     3%               6%                  3%                 9%
                                                   ----------        ---------          ----------        -----------
   Total                                                100%             100%                100%               100%
                                                   ==========        =========          ==========        ===========
</TABLE>

Signaling  and  Network  Access  Products:  During the past twelve  months,  the
decline in capital  expenditure  investments in the Company's target markets has
significantly reduced signaling and network access product revenue.

IP Switching Products:  The  Company's IPnexus  switch  product family has  been
designed for the embedded  systems market and is based on the PICMG 2.16 systems
architecture,  which  was  ratified  in  September  2001.  While  still a modest
percentage of the Company's revenue,  IP switch product revenue increased by 59%
to $.7 million in the third quarter 2002,  compared to the respective quarter in
2001.  During the third quarter,  the Company  realized its first design win for
the CPC6400, a 24 port gigabit switch.

Other  product  revenue:  This revenue is related to legacy  products.  Customer
demand for these products has declined significantly over the past twelve months
as  customers  move to newer  technology.  Many of these  products  are  project
oriented and shipments can fluctuate on a quarterly basis.

Gross  profit.   Gross  profit  consists  of  sales,  less  cost of  goods  sold
including  material  costs,  manufacturing  expenses,  amortization  of software
development costs,  expenses associated with engineering contracts and technical
support function expenses. Gross margin was 44.0% of sales for the third quarter
2002,  compared to 65.8% in the third  quarter of 2001.  Fixed  expenses such as
certain  manufacturing  labor and overhead costs,  technical  support costs, and
software amortization spread over lower sales volumes impacted gross margin as a
percentage of sales during the third quarter 2002.  The decrease in gross margin
in the third  quarter  2002 is also  attributable  to the  write off of  certain
software capitalization projects of $.3 million and an increase in the inventory
obsolescence reserve of $.1 million.

Selling  and  marketing  expenses  were $.9  million and $1.4  million  for  the
third  quarter 2002 and 2001,  respectively.  For the nine  months,  selling and
marketing  expenses  were  $3.1  million  and $4.3  million  in 2002  and  2001,
respectively.  The decrease in expense  during 2002 is  primarily  the result of
lower personnel and commission expenses,  and reductions in advertising,  travel
and trade show  participation.  During  the second  quarter  2002,  the  Company
increased  its  allowance  for  doubtful  accounts  by $.1  million to reserve a
specific customer receivable.

Research and  development  expenses  were  $1.6 million  and  $1.9  million  for
the third quarter 2002 and 2001, respectively. For the nine months, research and
development  expenses  were  $4.8  million  and $6.2  million  in 2002 and 2001,
respectively.  This  decrease  in expense  is  primarily  attributable  to lower
engineering  staff levels.  Despite these  reductions,  management  continues to
commit  significant  resources to the development of new  products.  In addition
the Company  capitalizes  certain software  development costs, which reduce  the
amount of software  development charged to operating expense.   During the third
quarter, amounts capitalized were $.3 million and $.4 million for 2002 and 2001,
respectively.  During the nine months,  amounts capitalized were $.9 million and
$1.3 million for 2002 and 2001, respectively.

General  and  administrative  expenses  were $.6 million and $.8 million for the
third quarter 2002 and 2001,  respectively.  For the first nine months,  general
and administrative expenses were $1.7 million and $2.3 million in 2002 and 2001,
respectively.  This decrease in expense is the result of tightened  control over
general and administrative expenses and lower personnel related expenses.

Restructuring  charges were $.4 million and zero for the third  quarter 2002 and
2001,  respectively.  For the first nine months,  restructuring charges were $.6
million and zero in 2002 and 2001, respectively.  In September 2002, the Company
reduced staffing levels by  approximately 7% primarily in signaling  engineering
and marketing, and closed the Raleigh,  North Carolina engineering facility.  In
January   2002,  the  Company  reduced  staffing  levels  by  approximately  10%
throughout  the organization.

Class action  legal  settlement  charges were $.1 million for the third  quarter
2002. In September  2002, the Company signed a Memorandum of  Understanding  for
settlement of the class action litigation outstanding since May 2000.

Other  income,  net.  Other income  consists  primarily of interest  income from
marketable securities and cash equivalents.  The funds are primarily invested in
high quality Municipal and U.S. Treasury securities with maturities of less than
one  year.  Over the past  twelve  months,  interest  rates  have  declined  and
investment balances have increased.

Income  taxes.  The  provision  for income taxes for the third quarter and first
nine  months  of 2002 is  based  on the  combined  federal,  state  and  foreign
effective tax rate of 31%,  compared to 33% for the comparable  periods in 2001.
Canadian tax incentives contributed to a lower effective tax rate in 2002.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2002,  the Company's  primary  source of liquidity  included
cash and  cash  equivalents  of $25.8  million,  marketable  securities  of $2.0
million and  available  borrowings  of $5.0  million  under a  revolving  credit
facility with a bank. No amounts were outstanding  under this credit facility as
of  September  30,  2002.  The Company had working  capital of $32.2  million at
September 30, 2002, compared to $34.7 million at December 31, 2001.

Cash provided by operating activities for the first nine months of 2002 was $4.8
million, compared to $6.3 million for the same period in 2001.

In September  2002,  the Company  completed an investment in Momentum  Computer,
Inc.  The Company  invested  $1.5  million  for a minority  interest in Momentum
Computer,  Inc.  and loaned an  additional  $1  million  to be used for  working
capital.

Capital equipment purchases amounted to $.7 million for the first nine months of
2002,  compared to $1.1 million for the same period in 2001.  Capitalization  of
certain  software  development  costs amounted to $.9 million for the first nine
months of 2002, compared to $1.3 million for the same period in 2001.

In August 2002,  the Board of Directors  authorized a plan to repurchase up to 1
million shares of the Company's Common Stock. The Company did not repurchase any
shares  during  the  first  nine  months of 2002,  compared  to  541,000  shares
repurchased  at a total cost of $6.8  million  during  the first nine  months of
2001.  In March  2001,  the Board of  Directors  authorized  a one-year  plan to
repurchase up to an  additional  500,000  shares of the  Company's  Common Stock
under which the Company repurchased 206,000 shares. In August 2000, the Board of
Directors  authorized  the repurchase of up to 1 million shares of the Company's
Common Stock and the Company completed this repurchase program in March 2001.

As a result of the net loss  in  the  third  quarter  2002  the  Company  was in
violation  of  one  of  the  covenants  under  the  revolving  credit  facility.
Subsequent  to the end of the quarter the default on the covenant  violation was
waived and the Company's  revolving  credit facility with a bank was amended and
extended through December 31, 2002.

Subsequent to the end of the third quarter 2002, the Company  acquired a portion
of  Intel  Corporation's   Embedded   Communications   Platform  Division.   The
acquisition  was  completed  pursuant  to the Stock  Purchase  Agreement,  dated
September 12, 2002, between Intel Corporation and the Company to acquire all the
issued and  outstanding  shares of Ziatech  Corporation.  The stock purchase was
completed at a cash purchase price of $3.0 million.  The Company  expects to add
working  capital  of $3 to $4  million  to this  business  over the next  twelve
months, or so.

With  the  Ziatech  acquisition  and  assuming there  is no further  significant
change in the  Company's  business,  management  believes that its current cash,
cash  equivalents  and marketable  securities  together with cash generated from
operations and available  borrowings  under the Company's loan agreement will be
sufficient to meet the Company's  anticipated  needs,  including working capital
and  capital  expenditure  requirements,  for at least the next  twelve  months.
However,  management is continuing its strategic  acquisition program to further
accelerate new product and market penetration  efforts.  This program could have
an impact on the Company's working capital, liquidity or capital resources.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This Quarterly Report on Form 10-Q contains  forward-looking  statements,  which
reflect the Company's  current views with respect to future events and financial
performance, within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the  Securities  Exchange Act of 1934 and are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain risks and uncertainties,
including  those  identified  below,  which could cause actual results to differ
materially from historical results or those  anticipated.  The words "believes,"
"anticipates,"  "plans," "may," "intend," "estimate," "will," "should," "could,"
"feels," "is optimistic," "expects," and other expressions which indicate future
events and trends also identify forward-looking statements. However, the absence
of such words does not mean that a statement is not forward-looking.

The  Company's  future  operating  results  are subject  to  various  risks  and
uncertainties   and  could  differ   materially  from  those  discussed  in  the
forward-looking  statements  and may be affected  by various  trends and factors
which are beyond the Company's  control.  These  include,  among other  factors,
general  business  and  economic  conditions,  rapid or  unexpected  changes  in
technologies,  cancellation or delay of customer orders including those relating
to the "design wins"  referenced  above,  unreliability  of customer  forecasts,
changes  in  the  product  or  customer  mix of  sales,  delays  in new  product
development,  delays or lack of availability of electronic components,  customer
acceptance of new products, and customer delays in qualification of products and
difficulties of integrating Ziatech's operations. Furthermore, if the Court does
not accept and approve the settlement  agreement in the outstanding class action
litigation  this could have a material  adverse effect on the Company's  working
capital.  This  report  on Form  10-Q  should  be read in  conjunction  with the
Consolidated Financial Statements,  the notes thereto,  Management's  Discussion
and Analysis of Financial Condition and Results of Operations as of December 31,
2001 and "Risk Factors" as reported in the Company's Annual Report on Form 10-K,
and other reports as filed with the Securities and Exchange Commission.


ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks in the normal course of business,
primarily  interest rate risk and changes in the market value of its investments
and believes its exposure to such risk is minimal. The Company's investments are
made in accordance with the Company's investment policy and primarily consist of
U.S. Treasury securities,  municipal securities and corporate  obligations.  The
Company  does  not  participate  in  the  investment  of  derivative   financial
instruments.


ITEM 4.           CONTROLS AND PROCEDURES

Based on their most recent  evaluation,  which was  completed  within 90 days of
this filing of this Form 10-Q, the Company's Chief  Executive  Officer and Chief
Financial Officer believe the Company's  disclosure  controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) are  effective.  There were not
any  significant  changes in internal  controls or in other  factors  that could
significantly  affect these controls subsequent to the date of their evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1.          LEGAL PROCEEDINGS

On  September  25, 2002  the  Company  announced  it had signed a  Memorandum of
Understanding for the settlement of the class action  litigation  filed  against
the Company and certain of its directors and officers in May 2000 in the  United
States District Court for the Western District of New York.

Following the Company's announcement on May 19, 2000  regarding its  preliminary
results of operations for the second quarter, several class action lawsuits were
filed  against  the  Company,  as well as several of its officers and directors,
alleging violations of federal securities laws.

The terms of the settlement outlined in the memorandum between the  Company  and
the  class action plaintiffs  are being submitted to the  Court in the form of a
settlement  agreement.   This proposed  settlement  will  be  subject  to  Court
acceptance and approval.


ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K

                  A.       Exhibits
                           10.1     Revolving  Credit  Agreement   dated  as  of
                                    December 30, 1998 between the Registrant and
                                    The Chase Manhattan Bank, N.A. - as amended.
                           99.1     Certification Pursuant to 18 U.S.C.  Section
                                    1350, as Adopted Pursuant to Section 1906 of
                                    the Sarbanes-Oxley Act of 2002.
                           99.2     Certification Pursuant to 18 U.S.C.  Section
                                    1350, as Adopted Pursuant to Section 1906 of
                                    the Sarbanes-Oxley Act of 2002.

                  B.       Reports on Form 8-K

                           The  following reports were filed during the  quarter
                           for which  this  Quarterly  Report on  Form  10-Q  is
                           filed:

                           On September 20, 2002 the  Company  filed  a  Current
                           Report on  Form 8-K,  Item 5 - Other;  announcing  an
                           agreement with Intel Corporation to acquire a portion
                           of  its  Embedded  Communications  Platform  Division
                           located  in    San  Luis  Obispo,  California,  in  a
                           sale-of-stock  transaction.   No financial statements
                           were filed with the Form 8-K.

                           On September 25, 2002 the  Company  filed  a  Current
                           Report on Form 8-K,  Item 5 - Other;  announcing  the
                           completion of an agreement to invest, as  a  minority
                           interest, $1.5 million in Momentum Computer, Inc. The
                           Company also agreed to lend $1.0 million to  Momentum
                           Computer, Inc.  to  be used  for working capital.  No
                           financial statements were filed with the Form 8-K.


<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 4, 2002                        By: /s/           Donald L. Turrell
                                        ----------------------------------------
                                                          Donald L. Turrell
                                                            President and
                                                        Chief Executive Officer




November 4, 2002                        By: /s/           Dorrance W. Lamb
                                        ----------------------------------------
                                                          Dorrance W. Lamb
                                                     Chief Financial Officer and
                                                       Vice President, Finance



<PAGE>


                    CERTIFICATI0N OF CHIEF EXECUTIVE OFFICER


I, Donald L. Turrell, certify that:

1.  I  have  reviewed  this  quarterly   report  on  Form  10-Q  of  Performance
Technologies, Incorporated;

2.  Based on my knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) Evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  Presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5.  The registrant's other certifying  officers and I have disclosed,  based  on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or persons  performing  the  equivalent
function):

     a) All  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

6.  The registrant's other certifying officers  and  I  have  indicated  in this
quarterly report whether or not  there  were  significant  changes  in  internal
controls  or in other factors  that could significantly affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

November 4, 2002

                                               /s/ Donald L. Turrell
                                               ------------------------------
                                                   Donald L. Turrell
                                           President and Chief Executive Officer

<PAGE>



                    CERTIFICATION OF CHIEF FINANCIAL OFFICER


I, Dorrance W. Lamb, certify that:

1.  I  have  reviewed  this  quarterly  report  on   Form  10-Q  of  Performance
Technologies, Incorporated;

2.  Based on  my  knowledge,  this  quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period  covered by  this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and other  financial
information  included  in this quarterly report, fairly  present in all material
respects the financial  condition,  results of operations and cash flows of  the
registrant  as of, and for,  the  periods  presented  in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I  are responsible  for
establishing and maintaining  disclosure controls and procedures  (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

     b) Evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

     c)  Presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5.  The registrant's other certifying officers  and I  have disclosed,  based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's  board  of  directors  (or  persons  performing  the  equivalent
function):

     a) All  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

6.  The registrant's  other  certifying  officers  and  I have indicated in this
quarterly report whether or not  there  were  significant  changes  in  internal
controls or in other factors that could significantly affect  internal  controls
subsequent to the date of our most recent evaluation, including  any  corrective
actions with regard to significant deficiencies and material weaknesses.

November 4, 2002

                                               /s/ Dorrance W. Lamb
                                               ------------------------------
                                                   Dorrance W. Lamb
                                               Chief Financial Officer


<PAGE>



                                                      EXHIBIT 10.1 - AS AMENDED




                                AMENDMENT TWO TO
                                CREDIT AGREEMENT

                         dated as of October 30th, 2002

                                     between

                          JPMORGAN CHASE BANK, formerly
                        known as The Chase Manhattan Bank

                                       and

                     PERFORMANCE TECHNOLOGIES, INCORPORATED





<PAGE>
                    AMENDMENT NUMBER TWO TO CREDIT AGREEMENT

     This  Amendment  is dated as of October  30,  2002,  is made by and between
PERFORMANCE  TECHNOLOGIES,   INCORPORATED,   a  Delaware  corporation  with  its
principal  office located at 205 Indigo Creek Drive,  Rochester,  New York 14626
("Borrower")  and JPMORGAN  CHASE BANK,  formerly  known as The Chase  Manhattan
Bank, with an office at One Chase Square, Rochester, New York 14643 ("Bank").

                            Statement of the Premises

     Borrower and Bank have previously  entered into, among other agreements,  a
Credit  Agreement,  dated as of December 30, 1998 which was amended by Amendment
Number One,  dated November 1, 2000 (the "Credit  Agreement").  The Borrower and
the Bank desire to amend the Credit Agreement as referenced herein.

                           Statement of Consideration

     Accordingly,  in  consideration  of the premises and under the authority of
Section 5-1103 of the New York General  Obligations Law, Borrower and Bank agree
as follows:

                                    Agreement

     1.  Defined  Terms.  The terms "this  Agreement,"  "hereunder"  and similar
references  in the  Credit  Agreement  shall be  deemed  to refer to the  Credit
Agreement as amended by this Amendment  Number Two.  Capitalized  terms used and
not otherwise  defined herein shall have the meanings  ascribed to such terms in
the Credit Agreement.

     2. Amendment.  Effective upon the satisfaction of all conditions  specified
in Section 4 hereof, the Credit Agreement is hereby amended as follows:

                  A. The  definition of "Revolving  Credit Termination  Date" is
                  superseded  and replaced in its entirety and  amended to read:

                  "Revolving  Credit Termination Date" means  December 31, 2002;
                  provided that if such date is not a Banking Day, the Revolving
                  Credit Termination  Date shall be the next succeeding  Banking
                  Day.

     3. Waiver of Existing Covenant Violation. The Borrower has advised the Bank
that it is not in compliance with its financial  covenant  obligations under the
Credit Agreement, Section 10.03, as a result of negative Consolidated Income for
the fiscal quarter ending September 30, 2002, (the "Existing Event of Default").
The Bank,  hereby waives the Existing Event of Default,  together with the right
of the Bank as a consequence thereof to assert an Event of Default under Article
11 of the Credit Agreement. Nothing herein shall be construed as a waiver of any
other condition,  event or act which,  with the giving of notice or the lapse of
time or both, would constitute an Event of Default.

     4. Representations. The Borrower hereby represents and warrants to the Bank
that: (i) the covenants,  representations and warranties set forth in the Credit
Agreement  are true and correct on and as of the date of execution  hereof as if
made on and as of said  date  and as if each  reference  therein  to the  Credit
Agreement were a reference to the Credit Agreement as amended by this Amendment;
(ii) no Event of Default specified in the Credit Agreement and no event,  which,
with the giving of notice or lapse of time or both,  would  become such an Event
of Default has occurred and is  continuing,  except as has been disclosed to the
Bank and is being waived pursuant to Section 3 hereinabove; (iii) since the date
of the  Credit  Agreement,  there  has been no  material  adverse  change in the
financial  condition or business  operations of the Borrower  which has not been
disclosed  to Bank;  (iv) the making and  performance  by the  Borrower  of this
Amendment have been duly authorized by all necessary  corporate action;  and (v)
the  security  interest  granted by the  Borrower  to the Bank  pursuant  to the
Security  Agreement  constitutes  a valid,  binding  and  enforceable,  first in
priority lien on all Collateral subject to such Security Agreement.

     5. Conditions of Effectiveness. This Amendment (including Section 4 hereof)
shall become effective when and only when Bank shall have received  counterparts
of  this  Amendment   executed  by  Borrower  and  Bank,  and  Bank  shall  have
additionally received the following:

                  A. A  secretarial  certificate  of  the  Borrower  in  a  form
                  reasonably acceptable to  Bank, certifying that  the  December
                  30, 1998  secretary's  certificate  of  Borrower is  true  and
                  correct as of October 31, 2000 and as of the date of execution
                  hereof, and the authorizing resolutions and  the incumbency of
                  officers of the Borrower remain in full force and effect.

                  B. Payment  of  all  legal  and  audit  expenses  incurred  by
                  Borrower  relating to the Agreement as amended hereby.

     6. Reference to and Effect on Loan Documents.


                  A. Upon the effectiveness hereof, each reference in the Credit
                  Agreement   to  "this  Agreement,"   "hereunder,"   "hereof,"
                  "herein," or words of like import, and each  reference in  the
                  other Loan Documents to the Credit Agreement shall mean and be
                  a reference to the Credit Agreement as amended hereby.

                  B. Except  as   specifically   amended    above,  the   Credit
                  Agreement,  and all  other Loan Documents shall remain in full
                  force and effect and are hereby ratified and confirmed.

                  C. The execution, delivery and effectiveness of this Amendment
                  shall not operate as a waiver of any right, power or remedy of
                  Bank  under any of the Loan Documents, nor constitute a waiver
                  of any provision of any of the Loan Documents.

     7.  Costs and  Expenses.  Borrower  agrees  to pay on demand  all costs and
expenses of Bank in connection with the  preparation,  execution and delivery of
this Amendment and the other documents  related  hereto,  including the fees and
out-of-pocket expenses of counsel for Bank.

     8.  Governing  Law.  This  Amendment  shall be governed  and  construed  in
accordance  with  the  laws of the  State  of New  York  without  regard  to any
conflicts-of-laws  rules which would require the  application of the laws of any
other jurisdiction.

     9. Headings.  Section  headings in this  Amendment are included  herein for
convenience  of reference only and shall not constitute a part of this Amendment
for any other purpose.

     10. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate  counterparts,  each
of which when so executed  and  delivered  shall be deemed to be an original and
all or which taken together shall constitute but one and the same instrument.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
executed by their respective representatives thereunto duly authorized as of the
date first above written.

                                        PERFORMANCE TECHNOLOGIES, INCORPORATED

                                            By: /s/ Dorrance W. Lamb
                                                ------------------------------
                                                    Dorrance W. Lamb
                                            Its:    Chief Financial Officer and
                                                    Vice President of Finance

                                            JPMORGAN CHASE BANK

                                            By: /s/ Hollie Calderon
                                                ------------------------------
                                                    Hollie Calderon
                                            Its: Vice President


<PAGE>

                            CERTIFICATE OF SECRETARY

                                       OF

                     PERFORMANCE TECHNOLOGIES, INCORPORATED


     I, Reginald T. Cable, Secretary of Performance Technologies,  Incorporated,
a Delaware corporation ("Company"),  do CERTIFY in connection with the Amendment
Number  Two to the  Credit  Agreement  ("Amendment")  between  the  Company  and
JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, as follows:

     1. The resolutions attached to the Secretary Certificate dated December 30,
1998 have not been  rescinded  or modified  and remain in full force and effect.
The  Resolution  authorize  the  Amendment  and  authorize  the execution of the
Amendment, the transactions contemplated therein, and the execution and delivery
of all documents thereunder.

     2. The officers  identified in the Secretary's certificate  dated  December
30, 1998 remain duly and  validly  elected and  qualified  to the offices of the
Corporation set forth in the certificate.

     IN WITNESS  WHEREOF,  I have  executed  this  Certificate  this 30th day of
October, 2002.



                                            /s/Reginald T. Cable
                                            --------------------------
                                               Reginald T. Cable
                                               Secretary
<PAGE>



                                                                   Exhibit 99.1





     Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to

                  Section 906 of the Sarbanes-Oxley Act of 2002



     I,  Donald  L.  Turrell,   the  Chief  Executive   Officer  of  Performance
Technologies, Incorporated, certify that (i) the Form 10-Q for the quarter ended
September 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities  Exchange Act of 1934 and (ii) the  information  contained in the
Form 10-Q fairly presents, in all material respects, the financial condition and
results of operations of Performance Technologies, Incorporated.

                                          By:/s/   Donald L. Turrell
                                                   -----------------------
                                                   Donald L. Turrell
                                                   Chief Executive Officer

                                                   November 4, 2002


<PAGE>


                                                                   Exhibit 99.2





     Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to

                  Section 906 of the Sarbanes-Oxley Act of 2002



     I,  Dorrance  W.  Lamb,   the  Chief   Financial   Officer  of  Performance
Technologies, Incorporated, certify that (i) the Form 10-Q for the quarter ended
September 2002 fully complies with the requirements of Section 13(a) or 15(d) of
the Securities  Exchange Act of 1934 and (ii) the  information  contained in the
Form 10-Q fairly presents, in all material respects, the financial condition and
results of operations of Performance Technologies, Incorporated.

                                          By:/s/   Dorrance W. Lamb
                                                   ----------------------
                                                   Dorrance W. Lamb
                                                   Chief Financial Officer

                                                   November 4, 2002