-----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, MljnioNlaahG8tCLSl7Gyruv0hi3FJvArwFC7x9q6ILTUhqyZ+Elj9ZTN/ihkV8c i3YyHF7Rc/XHXF9uSFfikg== 0000913569-96-000140.txt : 19960816 0000913569-96-000140.hdr.sgml : 19960816 ACCESSION NUMBER: 0000913569-96-000140 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PERCEPTRON INC/MI CENTRAL INDEX KEY: 0000887226 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 382381442 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20206 FILM NUMBER: 96614976 BUSINESS ADDRESS: STREET 1: 23855 RESEARCH DRIVE CITY: FARMINGTON HILLS STATE: MI ZIP: 48335 BUSINESS PHONE: 8104787710 MAIL ADDRESS: STREET 1: 23855 RESEARCH DR CITY: FARMINGTON HILLS STATE: MI ZIP: 48335 10-Q 1 FORM 10-Q REPORT FOR 2ND QUARTER 1996 UNITED STATES 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 quarterly period ended June 30, 1996. Commission file number: 0-20206 PERCEPTRON, INC. (Exact name of registrant as specified in its charter) Michigan 38-2381442 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 23855 Research Drive, Farmington Hills, Michigan 48335-2643 (Address of principal executive offices) (810) 478-7710 (Registrant's telephone number, including area code) 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 proceeding 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 each of the issuer's classes of common stock as of July 26, 1996 was: Common Stock, $0.01 par value 7,017,168 Class Number of shares PERCEPTRON, INC. AND SUBSIDIARIES INDEX PART 1. Financial Information ITEM 1 Financial Statements Condensed Consolidated Balance Sheets -- June 30, 1996 and December 31, 1995 Condensed Consolidated Statements of Income -- Three and Six Months ended June 30, 1996 and 1995 Condensed Consolidated Statements of Cash Flows -- Six Months ended June 30, 1996 and 1995 Notes to Condensed Consolidated Financial Statements ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. Other Information ITEM 6 Exhibits and Reports on Form 8-K PART 1 -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PERCEPTRON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, December 31, 1996 1995 -------- ----------- ASSETS Current assets: Cash and cash equivalents $14,760,000 $14,990,000 Accounts receivable, net of reserves of $166,000 and $35,000 15,554,000 14,292,000 Inventory, net of reserves of $661,000 and $700,000 5,541,000 4,114,000 Prepaid expenses and deferred tax asset 1,251,000 2,658,000 ---------- ---------- Total current assets 37,106,000 36,054,000 ---------- ---------- Property and equipment: Leased equipment 318,000 318,000 Machinery and equipment 8,631,000 7,696,000 Furniture and fixtures 466,000 492,000 Leasehold improvements 95,000 95,000 Construction in progress - building 1,574,000 0 Less accumulated depreciation and amortization (6,389,000) (6,074,000) ---------- --------- Total property and equipment 4,695,000 2,527,000 ---------- ---------- Total assets $41,801,000 $38,581,000 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Capital lease obligations $21,000 $46,000 Accounts payable 1,441,000 2,070,000 Accrued expenses 4,250,000 3,823,000 Accrued compensation and stock option expense 1,525,000 2,284,000 ---------- ---------- Total current liabilities 7,237,000 8,223,000 ---------- ---------- Commitments and Contingencies ---- ---- Shareholders' equity: Preferred stock, no par value, 1,000,000 shares authorized, none issued ---- ---- Common stock, $.01 par value; 19,000,000 shares authorized, 6,999,900 and 6,723,000 issued and outstanding at June 30, 1996 and December 31, 1995, respectively 70,000 67,000 Cumulative translation adjustments (743,000) (474,000) Additional paid-in capital 31,053,000 29,876,000 Retained earnings 4,184,000 889,000 ---------- ---------- Total shareholders' equity 34,564,000 30,358,000 ---------- ---------- Total liabilities and shareholders' equity $41,801,000 $38,581,000 ========== ========== The accompanying notes are an integral part of the condensed consolidated financial statements. PERCEPTRON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, -------------------------- ------------------------ 1996 1995 1996 1995 -------- -------- -------- -------- Net sales $11,663,000 $ 8,603,000 $20,725,000 $14,592,000 Cost of sales 4,617,000 3,353,000 8,372,000 5,736,000 ---------- ----------- ---------- ---------- Gross profit 7,046,000 5,250,000 12,353,000 8,856,000 Selling, general and administrative expense 2,675,000 2,442,000 5,266,000 4,363,000 Engineering, research and development expense 1,559,000 1,048,000 2,719,000 2,106,000 ---------- ---------- ---------- ---------- Income from operations 2,812,000 1,760,000 4,368,000 2,387,000 Interest income, net 178,000 154,000 339,000 260,000 ---------- ---------- ---------- ---------- Income before provision for federal income taxes 2,990,000 1,914,000 4,707,000 2,647,000 Provision for federal income taxes 897,000 0 1,412,000 0 --------- --------- --------- ---------- Net income $2,093,000 $1,914,000 $3,295,000 $2,647,000 ========= ========= ========= ========= Net income per weighted average share $.27 $.27 $.43 $.37 ========= ========= ========= ========= Weighted average common and common equivalent shares 7,677,268 7,126,139 7,583,247 7,101,440 ========= ========= ========= ========= The accompanying notes are an integral part of the condensed consolidated financial statements. PERCEPTRON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, -------------------------------- 1996 1995 -------- -------- Cash flows from operating activities: Net income $3,295,000 $2,647,000 --------- --------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 315,000 367,000 Changes in operating assets and liabilities: Accounts receivable (1,444,000) 288,000 Inventory (1,427,000) (1,253,000) Prepaid expenses and other current assets 1,407,000 (43,000) Accounts payable (629,000) 876,000 Accrued expenses (332,000) (445,000) ---------- ---------- Total adjustments (2,110,000) (210,000) ---------- ---------- Net cash provided by operating activities 1,185,000 2,437,000 ---------- ---------- Cash flows used in investing activities: Capital expenditures (2,483,000) (837,000) ---------- ---------- Cash flows from financing activities: Principal payments under capital lease obligations (25,000) (55,000) Proceeds from issuance of short-term debt ---- 231,000 Proceeds from exercise of options and other 1,180,000 475,000 ---------- ---------- Net cash provided by financing activities 1,155,000 651,000 ---------- ---------- Effect of exchange rates on cash and cash equivalents (87,000) 56,000 ---------- ---------- Net increase (decrease) in cash and cash equivalents (230,000) 2,307,000 Cash and cash equivalents, beginning of year 14,990,000 7,917,000 ---------- ---------- Cash and cash equivalents, end of period $14,760,000 $10,224,000 ========== ========== The accompanying notes are an integral part of the condensed consolidated financial statements. PERCEPTRON, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Financial Statement Presentation Information for the three and six months ended June 30, 1996 and 1995 is unaudited, but includes all adjustments, consisting of normal recurring adjustments, which the management of Perceptron, Inc. ("Perceptron" or the "Company") considers necessary for fair presentation of financial position, results of operations and cash flows. In accordance with the instructions for the completion of the Quarterly Report on Form 10-Q, certain information and footnote disclosures necessary to comply with generally accepted accounting principles have been condensed or omitted. 1995 amounts for engineering, research, and development and selling, general, and administrative expenses have been reclassified to conform to the 1996 presentation. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1995, which contains a summary of Perceptron's accounting principles and other footnote information. The results of operations for any interim period are not necessarily indicative of the results of operations for a full year. Note 2. Three-for-Two-Stock Split The Company's Board of Directors announced a three-for-two stock split of the Company's Common Stock which was effected in the form of a stock dividend payable on November 30, 1995 to shareholders of record on November 20, 1995. All reported historical information has been adjusted accordingly to reflect the impact of this stock split. Note 3. Inventory Inventory is stated at the lower of cost or market. The cost of inventory is determined by the first in, first out (FIFO) method. Inventory, net of reserves, is comprised of the following: June 30, December 31, 1996 1995 -------- ------------ Component parts $3,405,000 $3,022,000 Work in process 1,387,000 641,000 Finished goods 749,000 451,000 --------- --------- Total $5,541,000 $4,114,000 ========= ========= Note 4. Net Income Per Share Net income per common and common equivalent share is calculated based upon the weighted average number of shares of Common Stock outstanding, adjusted for the dilutive effect of stock options and warrants, using the treasury stock method. Note 5. Commitments and Contingencies The Company may, from time to time, be subject to legal proceedings and claims. Litigation involves many uncertainties. Management is currently unaware of any significant pending litigation affecting the Company, other than the indemnification matter and the complaint discussed in the following paragraphs. The Company has been informed that certain of its customers have received allegations of possible patent infringement involving processes and methods used in the Company's products. One such customer is currently engaged in litigation relating to such matter. This customer has notified various companies, including the Company from which it has purchased such equipment, that it expects the suppliers of such equipment to indemnify such customer, on a pro-rata basis, for expenses and damages, if any, incurred in this matter. Management believes, however, that the processes used in the Company's products were independently developed without utilizing any previously patented process or technology. Because of the uncertainty surrounding the nature of any possible infringement and the validity of any such claim or any possible customer claim for indemnity, it is not possible to estimate the ultimate effect, if any, of this matter on the company's financial position. On March 13, 1996, a complaint was filed naming the Company as a defendant along with two other co-defendants, in an action alleging that the Company's TriCam sensor violates a patent held by the plaintiff and seeking preliminary and permanent injunctions and damages. Management believes that its TriCam sensor was independently developed without utilizing any previously patented process or technology and intends to vigorously defend its position. Note 6. Credit Facilities The Company has unsecured bank credit facilities of $4.0 million US and 1.0 million DM, which may be used to finance working capital needs and equipment purchases or capital leases. Any borrowings for working capital needs will bear interest at the bank's prime rate (8.25% as of July 25, 1996) and any borrowings to finance equipment purchases will bear interest at the bank's prime rate plus 1/2%. These credit facilities expire on May 31, 1997 unless canceled earlier by the Company or the bank. At June 30, 1996, the Company had no outstanding liabilities under these facilities. Note 7. Foreign Exchange Contracts The Company has implemented a limited hedging program to minimize the impact of foreign currency fluctuations. As the Company exports products, it generally enters into limited hedging transactions relating to the accounts receivable arising as a result of such shipment. These transactions involve the use of forward contracts. At June 30, 1996, the Company had entered into forward contracts covering $1,047,000 US (1,600,000 DM). These contracts mature on various dates through December 1996. The fair market value of the contracts at June 30, 1996 was $1,050,000, resulting in a net receivable of $3,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1996 AND 1995 Net sales. The Company's net sales increased by 36% from $8.6 million in the second quarter of 1995 to $11.7 million in the second quarter of 1996. The increase of $3.1 million in net sales is primarily attributable to sales to domestic automotive customers of $7.2 million, up by $0.6 million from the same quarter last year, and international automotive sales of $3.8 million, up by $1.8 million from the same quarter last year. The remainder of the net sales increase is due to non-automotive customer deliveries. New order bookings during the second quarter of 1996 totaled $17.7 million compared to $10.9 million in the second quarter of 1995. The increase of $6.8 million is attributable to orders from domestic automotive customers of $13.6 million, up by $5.9 million on a comparative basis over $7.7 million in the second quarter of 1995, combined with $4.1 million in orders during the second quarter of 1996 from European and Asian customers, an increase of $0.9 million as compared to the same period in 1995. New order bookings are dependent on the timing of customer re-tooling programs, and accordingly may vary significantly from quarter to quarter. The amount of new order bookings during any particular period is not necessarily indicative of the future operating performance of the Company. Gross profit. Gross profit increased from $5.3 million in the second quarter of 1995 to $7.0 million in the second quarter of 1996. Gross profit as a percentage of net sales decreased from 61.0% in the second quarter of 1995 to 60.4% in the second quarter of 1996. The decrease is due primarily to lower gross profit percentages on new products which are not being manufactured in significant quantities at this time. Selling, general and administrative expense. Selling, general and administrative expenses increased from $2.4 million in the second quarter of 1995 to $2.7 million in the second quarter of 1996. This change is due principally to increased personnel and related expenses to support the 1996 operating activity. As a percentage of sales, selling, general and administrative expenses decreased from 28.4% in the second quarter of 1995, to 22.9% in the second quarter of 1996, primarily due to the higher sales base. Engineering, research and development expense. Engineering, research and development expenses increased from $1.0 million in the second quarter of 1995, to $1.6 million in the second quarter of 1996, due primarily to increased personnel. As a percentage of net sales, research and development expense increased from 12.2% in the second quarter of 1995 to 13.4% in the second quarter of 1996. Interest income, net. Interest income increased from $154,000 in the second quarter of 1995, to $178,000 in the second quarter of 1996, due primarily to higher cash balances and related investing activities. Income before provision for federal income taxes. During the second quarter of 1995, the Company had income before provision for federal income taxes of $1.9 million, representing 22.2% of net sales, as compared to income before provision for federal income taxes of $3.0 million, representing 25.6% of net sales, in the second quarter of 1996. Provision for federal income taxes. For U.S. federal income tax reporting purposes, as of December 31, 1995, net operating loss carryforwards were available in the approximate amount of $3.6 million. Investment tax and research and development credits of $860,000 were also available to benefit future reported U.S. taxable earnings. These losses and credits expire, if unused, on various dates from 1998 through 2007. The Company also had, as of December 31, 1995, tax loss carryforwards available at foreign subsidiaries of approximately $4.0 million, which may be carried forward indefinitely. Because of the availability of these tax loss carryforwards, there was no provision for federal income taxes during 1995. For financial reporting purposes, because the Company anticipates utilizing certain of these carryforwards and credits in 1996, a deferred tax asset was recorded as of December 31, 1995, representing the estimated tax benefit of these items. For the three months ended June 30, 1996, the Company recorded a $0.9 million provision for federal income taxes, representing an estimated effective tax rate of 30%. Net income. During the second quarter of 1995, the Company had net income of $1.9 million representing 22.2% of net sales, as compared to net income of $2.1 million representing 17.9% of net sales in the second quarter of 1996. SIX MONTHS ENDED JUNE 30, 1996 AND 1995 Net Sales. The Company's net sales increased by 42% from $14.6 million in the first six months of 1995 to $20.7 million in the first six months of 1996. The increase of $6.1 million in net sales is attributable primarily to sales to domestic automotive customers of $14.2 million, up $4.0 million from $10.2 million in the same period last year. International automotive sales for the first six months of 1996 totaled $5.0 million, up $0.6 million from $4.4 million in the same six month period last year. Quarterly fluctuations in these geographic segments is due primarily to the timing of customer delivery requirements. The remainder of the net sales increase is due to non-automotive customer deliveries. New order bookings for the six months ended June 30, 1996 totaled $25.3 million compared to $19.0 million in the comparable period of 1995. The increase of $6.3 million is attributable to a $3.2 million increase in orders from domestic automotive customers up to $17.5 million for the first six months of 1996 from $14.3 million in 1995, and an increase of $3.1 million from European and Asian automotive customers, up to $7.8 million for the first six months of 1996 from $4.7 million in 1995. New order bookings are dependent on the timing of customer re-tooling programs, and accordingly may vary significantly from quarter to quarter. The amount of new order bookings during any particular period is not necessarily indicative of the future operating performance of the Company. Backlog at June 30, 1996 totaled $20.8 million compared to $15.8 million at June 30, 1995 and $16.3 million at December 31, 1995. The level of order backlog at any particular time is not necessarily indicative of the future operating performance of the Company. The Company expects to be able to fill substantially all of the orders in backlog by December 31, 1996. Gross profit. Gross profit increased from $8.9 million in the first six months of 1995 to $12.4 million in the first six months of 1996. Gross profit as a percentage of net sales decreased from 60.7% in the first six months of 1995 to 59.6% in the first six months of 1996. The decrease is primarily due to the lower gross profit percentage associated with one specific sale by the Company of a new product, which was integrated into equipment acquired from an original equipment manufacturer ("OEM") and sold as a complete system during the first quarter of 1996. The Company may, in the future, sell this product to OEM's who will in turn resell these systems after integrating them into their equipment. The decrease is also due to lower gross profit percentages on new products which are not being manufactured in significant quantities at this time. Selling, general and administrative expense. Selling, general and administrative expenses increased from $4.4 million in the first six months of 1995 to $5.3 million in the first six months of 1996. This change is due principally to increased personnel and related expenses to support the 1996 operating activity. As a percentage of sales, selling, general and administrative expenses decreased from 29.9% in the first six months of 1995, to 25.4% in the first six months of 1996, due primarily to the higher sales base. Engineering, research and development expense. Engineering, research and development expenses increased from $2.1 million in the first six months of 1995, to $2.7 in the first six months of 1996, due primarily to increased personnel. As a percentage of net sales, research and development expense decreased from 14.4% in the first six months of 1995 to 13.1% in the first six months of 1996 due primarily to the higher sales base, offset partially by the increased personnel costs. Interest income, net. Interest income increased from $260,000 in the first six months of 1995, to $339,000 in the first six months of 1996, due to higher cash balances and related investing activities. Income before provision for federal income taxes. During the first six months of 1995, the Company had income before provision for federal income taxes of $2.6 million, representing 18.1% of net sales, as compared to income before provision for federal income taxes of $4.7 million, representing 22.7% of net sales, in the first six months of 1996. Provision for federal income taxes. For U.S. federal income tax reporting purposes, as of December 31, 1995, net operating loss carryforwards were available in the approximate amount of $3.6 million. Investment tax and research and development credits of $860,000 were also available to benefit future reported U.S. taxable earnings. These losses and credits expire, if unused, on various dates from 1998 through 2007. The Company also had, as of December 31, 1995, tax loss carryforwards available at foreign subsidiaries of approximately $4.0 million, which may be carried forward indefinitely. Because of the availability of these tax loss carryforwards, there was no provision for federal income taxes during 1995. For financial reporting purposes, because the Company anticipates utilizing certain of these carryforwards and credits in 1996, a deferred tax asset was recorded as of December 31, 1995, representing the estimated tax benefit of these items. For the six months ended June 30, 1996, the Company recorded a $1.4 million provision for federal income taxes, representing an estimated effective tax rate of 30%. Net income. During the first six months of 1995, the Company had net income of $2.6 million representing 18.1% of net sales, as compared to net income of $3.3 million representing 15.9% of net sales in the first six months of 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's cash and cash equivalents as of June 30, 1996 totaled $14.8 million, as compared with $15.0 million as of December 31, 1995. This decrease was due primarily to cash outlays to fund increased receivables and inventory levels, capital expenditures and reduced current liabilities, offset by net income and proceeds from stock options exercised during the period. The Company has unsecured credit facilities totaling $4.0 million U.S. and 1.0 million DM. These facilities may be used to finance working capital needs and equipment purchases or capital leases. Any borrowings for working capital needs will bear interest at the bank's prime rate (8.25% as of July 25, 1996) and any borrowings to finance equipment purchases will bear interest at the bank's prime rate plus 1/2%. The credit facilities expire on May 31, 1997 unless canceled earlier by the Company or the bank. As of June 30, 1996 and December 31, 1995, the Company had no short-term or long-term debt other than capital leases outstanding. The Company's working capital increased to $29.9 million at June 30, 1996, from $27.8 million at December 31, 1995. Accounts receivable increased from $14.3 million as of December 31, 1995 to $15.6 million as of June 30, 1996 primarily as a result of increased sales. The increase of approximately $1.4 million in inventory is due primarily to an increase in component parts inventory to support the 1996 production plan. The decrease of $1.0 million in current liabilities is due primarily to the payments of 1995 performance bonuses and decreased accounts payable. Prepaid and deferred tax asset has been reduced $1.4 million as a result of the federal income tax provision established for the six months. The Company does not believe that inflation has had any significant impact on historical operations, and does not expect any significant near-term inflationary impact. On March 28, 1996, the Company exercised its option to purchase, for approximately $5.4 million, certain land and a new facility it had previously agreed to lease. Construction of this facility, which will be financed by the Company, began in April 1996. The Company expects to occupy this facility in December 1996. The Company is currently reviewing permanent financing alternatives for this facility. Through June 30, 1996, $1.6 million in progress payments have been recorded on the new facility. The Company believes that available cash on hand and existing credit facilities will be sufficient to fund its currently anticipated 1996 cash flow requirements. PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits 4.4 Revised Credit Agreement dated May 22, 1996 between Perceptron, Inc., Perceptron GmbH and NBD Bank, N.A. and related Demand Business Loan Note. 10.47 Seventh Amendment to the 1992 Stock Option Plan 10.48 Eighth Amendment to the 1992 Stock Option Plan 10.49 Second Amendment to the Directors Stock Option Plan 10.50 Two Forms of Agreement Not to Compete between the Company and certain officers of the Company 10.51 Development and Purchase Agreement between DeMattia Development Company, Plymouth-West Limited Partnership and Perceptron, Inc. dated June 2, 1996 10.52 Mortgage between DeMattia Development Company and Perceptron, Inc. dated June 2, 1996 11 Statement re: computation of earnings per share 27 Financial Data Schedule (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. Perceptron, Inc. (Registrant) Date: August 14, 1996 By: /S/ Alfred A. Pease -------------------------- Alfred A. Pease, President and Chief Executive Officer Date: August 14, 1996 By: /S/ John G. Zimmerman -------------------------- John G. Zimmerman, Vice President and Chief Financial Officer (Principal Financial Officer) Date: August 14, 1996 By: /S/Paul J. Tripodi --------------------------- Paul J. Tripodi, Controller (Principal Accounting Officer) EX-4.4 2 CREDIT AUTHORIZATION AGREEMENT AND MASTER DEMAND BUSINESS LOAN NOTE Exhibit 4.4 CREDIT AUTHORIZATION AGREEMENT NBD Bank (the "Bank"), 611 Woodward Avenue, Detroit, Michigan 48226-3947, has approved the credit facilities listed below (collectively, the "Credit Facilities," and, individually, as designated below) to: Perceptron, Inc. (the "Borrower"), 23855 Research Drive, Farmington Hills, MI 48335 subject to the terms and conditions set forth in this agreement. 1.0 Credit Facilities. (Check and complete applicable sections). 1.1 Uncommitted Credit Authorizations. The Bank has approved the uncommitted credit authorizations listed below (collectively, the "Credit Authorizations," and, individually, as designated below) subject to the terms and conditions of this agreement and the Bank's continuing satisfaction with the Borrower's financial status. Disbursements under the Credit Authorizations are solely at the Bank's discretion. Any disbursement on one or more occasions shall not commit the Bank to make any subsequent disbursement. [XX] A. Facility A. The Bank has approved an uncommitted Credit Authorization to the Borrower in the principal sum not to exceed $3,500,000.00 in the aggregate at any one time outstanding ("Facility A"). Credit under Facility A shall be in the form of disbursements evidenced by credits to the Borrower's account and shall be repayable as set forth in a Master Demand Note executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes"). The proceeds of Facility A shall be used for the following purpose: working capital. Facility A shall expire on May 31, 1997 unless earlier withdrawn. [ ] B. Facility B (Including Letters of Credit). The Bank has approved an uncommitted Credit Authorization to the Borrower in the principal sum not to exceed $--------------------- in the aggregate at any one time outstanding ("Facility B"). Facility B shall include the issuance of [commercial/standby] letters of credit not exceeding $------------------- in the aggregate at any one time outstanding, expiring not later than -------------------, 199-- [which shall include time drafts expiring not later than ---------------------, 199---] (the "Letters of Credit"). (Strike bracketed words if inapplicable.) Each Letter of Credit shall be in form acceptable to the Bank and shall bear a fee of -------% per year of the face amount of each standby Letter of Credit plus an issuance fee of $---------------- upon issuance of each Letter of Credit. (If no fee is listed, the Letters of Credit shall bear a fee to be agreed upon by the Bank and the Borrower). Credit under Facility B shall be in the form of disbursements evidenced by credits to the Borrower's account and shall be repayable as set forth in a Master Demand Note executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes") or by issuance of a Letter of Credit upon completion of an application acceptable to the Bank. The proceeds of Facility B shall be used for the following purpose: -------------------------------------------- ------------------------------. Facility B shall expire on --------------------, 199--- unless earlier withdrawn. [X] C. Facility C (Purchase Money Term Loans). The Bank has approved an uncommitted credit authorization to the Borrower in the principal sum not to exceed $500,000.00 in the aggregate at any one time outstanding ("Facility C"). Facility C shall be in the form of loans evidenced by the Borrower's notes on the Bank's form (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes"), the proceeds of which shall be used to purchase equipment and vehicles. Interest on each loan shall accrue at a rate to be agreed upon by the Bank and the Borrower at the time the loan is made. The maturity of each note shall not exceed 36 months from the note date. Notwithstanding the aggregate amount of Facility C stated above, the original principal amount of each loan shall not exceed the lesser of 80% of the cost of the equipment purchased with loan proceeds or $500,000.00. Facility C shall expire on May 31, 1997 unless earlier withdrawn. [ ] 1.2 Term Loans. The Bank agrees to extend credit to the Borrower in the form of term loan(s) (whether one or more, the "Term Loans") in the principal sum(s) of ---------------------------- respectively, bearing interest and payable as set forth in the Term Note(s) executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes"). The proceeds of the Term Loans shall be used for the following purpose: ---------------------------------------------------------------- - --------------------------------------------------------------------------. 2.0 Conditions Precedent. 2.1 Conditions Precedent to Initial Extension of Credit. Before the first extension of credit under this agreement, whether by disbursement of a loan, issuance of a letter of credit, or otherwise, the Borrower shall deliver to the Bank, in form and substance satisfactory to the Bank: A. Loan Documents. The Notes; the letter of credit applications required by Section 1.2; the security agreements, financing statements, mortgages and other documents required by Section 5.1; the guaranties required by Section 6.0; the subordination agreements required by Section 7.0; and any other loan documents which the Bank may reasonably require to give effect to the transactions contemplated by this agreement; B. Evidence of Due Organization and Good Standing. Evidence satisfactory to the Bank of the due organization and good standing of the Borrower and every other business entity that is a party to this agreement or any other loan document required by this agreement; and C. Evidence of Authority to Enter into Loan Documents. Evidence satisfactory to the Bank that (i) each party to this agreement or any other loan document required by this agreement is authorized to enter into the transactions contemplated by this agreement and the other loan documents, and (ii) the person signing on behalf of each such party is authorized to do so. 2.2 Conditions Precedent to Each Extension of Credit. Before any extension of credit under this agreement, whether by disbursement of a loan, issuance of a letter of credit, or otherwise, the following conditions shall have been satisfied: A. Representations. The representations contained in Section 10 shall be true on and as of the date of the extension of credit; B. No Event of Acceleration. No event of acceleration shall have occurred and be continuing or would result from the extension of credit. C. Continued Satisfaction. The Bank shall have remained satisfied with the Borrower's managerial and financial status; D. Additional Approvals, Opinions, and Documents. The Bank shall have received such other approvals, opinions and documents as it may reasonably request; and E. Other Conditions. ------------------------------- ------------------------------------------------------ ------------------------------------------------------. 3.0 Borrowing Base/Annual Pay Down. 3.1 Borrowing Base. (complete if applicable) Notwithstanding any other provision of this agreement, the aggregate principal amount outstanding at any one time under (check applicable clauses) [ ] Facility A [ ] Facility B shall not exceed the lesser of the Borrowing Base or $--------------------. Borrowing Base means: (Check and complete applicable clauses) [ ] A. ---------% of the Borrower's trade accounts receivable in which the Bank has a perfected, first priority, security interest, excluding accounts more than 90 days past due from the date of invoice, accounts subject to offset or defense, government, bonded, affiliate and foreign accounts, accounts from trade debtors of which more than ---------% of the aggregate amount owing from the trade debtor to the Borrower is more than ------- days past due, and accounts otherwise unacceptable to the Bank, plus [ ] B. Inventory of the Borrower in which the Bank has a perfected, first priority, security interest, valued at the lower of cost or market, but not exceeding $------------------ in aggregate, as follows: [ ](1) ------------% of aggregate inventory; or [ ](1) ------------% of raw material inventory; and [ ](2) ------------% of work-in-process inventory; and [ ](3) ------------% of finished goods inventory, plus [ ] C. ---------% of the ---------------- value of the Borrower's machinery and equipment in which the Bank has a perfected, first priority, security interest, but not exceeding $----------------------, plus [ ] D. Additional Borrowing Base provisions are contained in the attached addendum. 3.2 Annual Pay Down. (complete if applicable) Notwithstanding any other provision of this agreement, there shall be no debt outstanding under -------------------------- for a period of ------------------- consecutive months during each fiscal year of the Borrower. 4.0 Fees and Expenses. (complete if applicable) 4.1 Fees. Upon execution of this agreement, the Borrower shall pay the Bank the following fees, all of which the Borrower acknowledges have been earned by the Bank: ---------------------------------------------. 4.2 Out-of-Pocket Expenses. In addition to any fee set forth in Section 4.1 above, the Borrower shall reimburse the Bank for its out-of-pocket expenses and reasonable attorney's fees (including the fees of in-house counsel) allocated to the Credit Facilities. 5.0 Security. 5.1 Payment of all amounts owing under the Credit Facilities shall be secured by the Borrower's grant of a continuing first security interest and/or real estate mortgage, as the case may be, covering its interest in the following property and all its additions, substitutions, increments, proceeds and products, present and future, whether now owned or later acquired, (the "Collateral"): (check and complete applicable clauses) [ ] A. Accounts Receivable. All of the Borrower's accounts, chattel paper, general intangibles, instruments, and documents (as those terms are defined in the Uniform Commercial Code), rights to refunds of taxes paid at any time to any governmental entity, and any letters of credit and drafts under them given in support of the foregoing, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] B. Inventory. All of the Borrower's inventory, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] C. Equipment. All of the Borrower's equipment, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] D. Real Estate. The real property, including improvements, located at ------------------------------------------. The Borrower shall deliver to the Bank an executed mortgage ALTA mortgage title insurance policy without exceptions with mortgage survey certified to the Bank and the title company, and, where applicable, an assignment of rents, subordinations of leases and assignments of land contracts, all in form and substance satisfactory to the Bank. E. ------------------------------------------------- - --------------------------------------------------------------. 5.2 No forbearance or extension of time granted any subsequent owner of the Collateral shall release the Borrower from liability. 5.3 Additional Collateral/Setoff. To further secure payment of all amounts owing under the Credit Facilities and all of the Borrower's other liabilities to the Bank, the Borrower grants to the Bank a continuing security interest in: (i) all securities and other property of the Borrower in the custody, possession or control of the Bank (other than property held by the Bank solely in a fiduciary capacity), and (ii) all balances of deposit accounts of the Borrower with the Bank. The Bank shall have the right at any time to apply its own debt or liability to the Borrower, or to any other party liable for payment of the Credit Facilities, in whole or partial payment of the Credit Facilities or other present or future liabilities, without any requirement of mutual maturity. 5.4 Cross Lien. Any of the Borrower's other property in which the Bank has a security interest to secure payment of any other debt, whether absolute, contingent, direct or indirect, including the Borrower's guaranties of the debts of others, shall also secure payment of and be part of the Collateral for the Credit Facilities. 6.0 Guaranties. (complete if applicable) Payment of the Borrower's liabilities under the Credit Facilities shall be guaranteed by --------------------------------------------, by execution of the Bank's form of guaranty agreement. The liability of the guarantors, if more than one, shall be joint and several. 7.0 Subordination. (complete if applicable) The Credit Facilities shall be supported by the subordination of debt owing from the Borrower to -------------------------------------, including without limitation debt currently owing in the amount of $---------------------- in manner and by agreement satisfactory to the Bank. 8.0 Affirmative Covenants. So long as any debt remains outstanding under the Credit Facilities, the Borrower, and each of its subsidiaries, if any, shall: 8.1 Insurance. Maintain insurance with financially sound and reputable insurers covering its properties and business against those casualties and contingencies and in the types and amounts as shall be in accordance with sound business and industry practices. 8.2 Existence. Maintain its existence and business operations as presently in effect in accordance with all applicable laws and regulations, pay its debts and obligations when due under normal terms, and pay on or before their due date all taxes, assessments, fees and other governmental monetary obligations, except as they may be contested in good faith if they have been properly reflected on its books and, at the Bank's request, adequate funds or security has been pledged to insure payment. 8.3 Financial Records. Maintain proper books and records of account, in accordance with generally accepted accounting principles where applicable, and consistent with financial statements previously submitted to the Bank. 8.4 Notice. Give prompt notice to the Bank of the occurrence of (i) any event of acceleration, and (ii) any other development, financial or otherwise, which would affect the Borrower's business, properties or affairs in a materially adverse manner. 8.5 Collateral Audits. (complete if applicable) Permit the Bank or its agents to perform -------------------- audits of the Collateral. (monthly, annual, etc.) The Borrower shall compensate the Bank for those audits in accordance with the Bank's schedule of fees as may be amended from time to time. Whether or not this section has been completed, the Bank shall retain the right to inspect the Collateral and business records related to it at such times and at such intervals as the Bank may reasonably require. 8.6 Management. (complete if applicable) Maintain ------------- - ---------------------------- as ------------------------------------------. 8.7 Financial Reports. Furnish to the Bank whatever information, books and records the Bank may reasonably request, including at a minimum: (Check and complete applicable clauses. If the Borrower has subsidiaries, all financial statements required will be provided on a consolidated and on a separate basis.) [X] A. Within 60 days after each quarterly period, a balance sheet --------- (monthly, annual, etc.) as of the end of that period and statements of income, retained earnings, and cash flows from the beginning of that fiscal year to the end of that period, certified as correct by one of its authorized agents. [X] B. Within 90 days after and as of the end of each of its fiscal years, a detailed audit, including a balance sheet and statements of -------- (audit, financial statement) (reviewed/complied/certified) income, retained earnings, and cash flows certified by an independent ----------- (audit, financial statement (reviewed/complied/certified) certified public accountant of recognized standing. [ ] C. Within ---- days after and as of the end of each calendar month, the following lists, each certified as correct by one of its authorized agents: (check applicable clauses) [ ] (1) a list of accounts receivable, aged from date of invoice; [ ] (2) a list of accounts payable, aged from date of receipt; [ ] (3) a list of inventory, valued at the lower of cost or market. [ ] D. Within --- days after and as of the end of each calendar year, the signed personal financial statement of --------------------------. (Borrower, Guarantor, other) [ ] E. Within 5 days after filing, a signed copy of the annual tax return, with exhibits, of -----------------------------------------------. (Borrower, Guarantor, other) [ ] F. An Environmental Certificate on the Bank's form on and as of the date of this agreement, and thereafter as required by the Environmental Certificate. [ ] G. ------------------------------------------------------------ - ---------------------------------------------------------------------------. 9.0 Negative Covenants. 9.1 Definitions. As used in this agreement, the following terms have the following respective meanings: A. "Subordinated Debt" means debt subordinated to the Bank in manner and by agreement satisfactory to the Bank. B. "Tangible Net Worth" means total assets less intangible assets and total liabilities. Intangible assets include goodwill, patents, copyrights, mailing lists, catalogs, trademarks, bond discount and underwriting expenses, organization expenses, and all other intangibles. 9.2 Unless otherwise noted, the financial requirements set forth in this section shall be computed in accordance with generally accepted accounting principles applied on a basis consistent with financial statements previously submitted by the Borrower to the Bank. 9.3 Without the written consent of the Bank, so long as any debt remains outstanding under the Credit Facilities, the Borrower shall not: (where appropriate, covenants shall apply on a consolidated basis--clauses H-O apply only if completed.) A. Dividends. Acquire or retire any of its shares of capital stock, or declare or pay dividends or make any other distributions upon any of its shares of capital stock, except dividends payable in its capital stock, and dividends payable to "Subchapter S" corporation shareholders, in amounts sufficient to pay the shareholder(s) income tax obligations related to the Borrower's taxable income. B. Sale of Shares. Issue, sell or otherwise dispose of any shares of its capital stock or other securities, or rights, warrants or options to purchase or acquire any such shares or securities. C. Debt. Incur, or permit to remain outstanding, debt for borrowed money or installment obligations, except debt reflected in the latest financial statement of the Borrower furnished to the Bank prior to execution of this agreement and not to be paid with proceeds of borrowings under the Credit Facilities. For purposes of this covenant, the sale of any accounts receivable shall be deemed the incurring of debt for borrowed money. D. Guaranties. Guarantee or otherwise become or remain secondarily liable on the undertaking of another, except for endorsement of drafts for deposit and collection in the ordinary course of business. Except for up to DEM 1,000,000.00 on behalf of Perceptron GMBH. E. Liens. Create or permit to exist any lien on any of its property, real or personal, except: existing liens known to the Bank; liens to the Bank; liens incurred in the ordinary course of business securing current nondelinquent liabilities for taxes, worker's compensation, unemployment insurance, social security and pension liabilities; and liens for taxes being contested in good faith. F. Advances and Investments. Purchase or acquire any securities of, or make any loans or advances to, or investments in, any person, firm or corporation, except obligation of the United States Government, open market commercial paper rated one of the top two ratings by a rating agency of recognized standing, or certificates of deposit in insured financial institutions. G. Use of Proceeds. Use, or permit any proceeds of the Credit Facilities to be used, directly or indirectly, for the purpose of "purchasing or carrying any margin stock" within the meaning of Federal Reserve Board Regulation U. At the Banks request, the Borrower shall furnish to the Bank a completed Federal Reserve Board Form U-1. H. Working Capital. Permit the difference between its current assets [less all sums owing from stockholders, members or partners, as the case may be, and from officers, managers and directors] and current liabilities [plus all sums (other than Subordinated Debt) owing to stockholders, members or partners, as the case may be, and to officers, managers and directors] to be less than $ ----------. (Strike bracketed words if not applicable.) I. Tangible Net Worth [Plus Subordinated Debt]. Permit its Tangible Net Worth [plus Subordinated Debt] to be less than $ ---. (Strike bracketed words if not applicable.) J. Current Ratio. Permit the ratio of its current assets to its current liabilities to be less than ------- to 1.00. K. Leverage Ratio. Permit the ratio of its total liabilities to its Tangible Net Worth to exceed 1.00 to 1.00. (Strike bracketed words if not applicable.) L. Fixed Assets. Expend for, contract for, lease, rent, or otherwise acquire fixed assets, if the expense to the Borrower, and all subsidiaries, if any, shall exceed $ --------- in the aggregate in any one fiscal year. M. Lease. Contract for or assume in any manner, lease obligations if the aggregate of all payments shall exceed $ ---- in any one fiscal year. N. Compensation. Pay, or award compensation of any kind, in any one fiscal year, to -------------- exceeding $ ---------. O. Debt service coverage ratio not less than 3.00:1.00. Debt service coverage ratio defined as the ratio of net income plus depreciation less capital expenditures financed internally divided by principal and interest owing on all debt due in the ensuing twelve months. 10.0 Representations by Borrower. Each Borrower represents that: (a) the execution and delivery of this agreement and the Notes and the performance of the obligations they impose do not violate any law, conflict with any agreement by which it is bound, or require the consent or approval of any governmental authority or any third party; (b) this agreement and the Notes are valid and binding agreements, enforceable according to their terms; and (c) all balance sheets, income statements, and other financial statements furnished to the Bank are accurate and fairly reflect the financial condition of the organizations and persons to which they apply on their effective dates, including contingent liabilities of every type, which financial condition has not changed materially and adversely since those dates. Each Borrower, if other than a natural person, further represents that: (a) it is duly organized, existing and in good standing under the laws of the jurisdiction under which it was organized; and (b) the execution and delivery of this agreement and the Notes and the performance of the obligations they impose (i) are within its powers; (ii) and have been duly authorized by all necessary action of its governing body, and (iii) do not contravene the terms of its articles of incorporation or organization, its by laws, or any partnership, operating or other agreements governing its affairs. 11.0 Acceleration. 11.1 Events of Acceleration. If any of the following events occur, the Credit Facilities shall terminate and all borrowings under them shall become due immediately, without notice, at the Bank's option, whether or not the Bank has made demand. A. The Borrower or any guarantor of any of the Credit Facilities ("Guarantor") fails to pay when due any amount payable under the Credit Facilities or under any agreement or instrument evidencing debt for borrowed money. B. The Borrower or any Guarantor (a) fails to observe or perform any other term of this agreement or the Notes; (b) makes any materially incorrect or misleading representation, warranty or certificate to the Bank; (c) makes any materially incorrect or misleading representation in any financial statement or other information delivered to the Bank; or (d) defaults under the terms of any agreement or instrument relating to any debt for borrowed money (other than borrowings under the Credit Facilities) such that the creditor declares the debt due before its maturity. C. There is a default under the terms of any loan agreement, mortgage, security agreement or any other document executed as part of the Credit Facilities, or any guaranty of the liabilities under the Credit Facilities becomes unenforceable in whole or in part, or any Guarantor fails to promptly perform under its guaranty. D. A "reportable event" (as defined in the Employee Retirement Income Security Act of 1974 as amended) occurs that would permit the Pension Benefit Guaranty Corporation to terminate any employee benefit plan of the Borrower or any affiliate of the Borrower. E. The Borrower or any Guarantor becomes insolvent or unable to pay its debts as they become due. F. The Borrower or any Guarantor (a) makes an assignment for the benefit of creditors; (b) consents to the appointment of a custodian, receiver or trustee for it or for a substantial part of its assets; or (c) commences any proceeding under any bankruptcy, reorganization, liquidation or similar laws of any jurisdiction. G. A custodian, receiver or trustee is appointed for the Borrower or any Guarantor or for a substantial part of its assets without its consent and is not removed within 60 days after the appointment. H. Proceedings are commenced against the Borrower or any Guarantor under any bankruptcy, reorganization, liquidation, or similar laws of any jurisdiction, and those proceedings remain undismissed for 60 days after commencement; or the Borrower or Guarantor consents to the commencement of the proceedings. I. Any judgment is entered against the Borrower or any Guarantor, or any attachment, levy or garnishment is issued against any property of the Borrower or any Guarantor which is not satisfactorily discharged within 60 days after such judgment is entered. J. The Borrower or any Guarantor dies. K. The Borrower or any Guarantor, without the Bank's written consent, (a) is dissolved, (b) merges or consolidates with any third party, (c) leases, sells or otherwise conveys a material part of its assets or business outside the ordinary course of business, (d) leases, purchases, or otherwise acquires a material part of the assets of any other corporation or business entity, except in the ordinary course of business, or (e) agrees to do any of the foregoing (notwithstanding the foregoing, any subsidiary may merge or consolidate with any other subsidiary, or with the Borrower, so long as the Borrower is the survivor). L. The loan-to-value ratio of any pledged securities at any time exceeds ----%, and such excess continues for five (5) days after notice from the Bank to the Borrower. M. There is a substantial change in the existing or prospective financial condition of the Borrower or any Guarantor which the Bank in good faith determines to be materially adverse. N. The Bank in good faith shall deem itself insecure. 11.2 Remedies. If the amounts owing under the Credit Facilities are not paid at maturity, whether by demand, acceleration, or otherwise, the Bank shall have all of the rights and remedies provided by any law or agreement. Any requirement of reasonable notice shall be met if the Bank sends the notice to the Borrower at least seven (7) days prior to the date of sale, disposition or other event giving rise to the required notice. The Bank is authorized to cause all or any part of the Collateral to be transferred to or registered in its name or in the name of any other person, firm or corporation, with or without designation of the capacity of such nominee. The Borrower shall be liable for any deficiency remaining after disposition of any Collateral. The Borrower is liable to the Bank for all reasonable costs and expenses of every kind incurred in the making or collection of the Credit Facilities, including, without limitation, reasonable attorneys' fees and court costs (whether attributable to the Bank's in-house or outside counsel.) These costs and expenses shall include, without limitation, any costs or expenses incurred by the Bank in any bankruptcy, reorganization, insolvency or other similar proceeding. 12.0 Miscellaneous. 12.1 Notice from one party to another relating to this agreement shall be deemed effective if made in writing (including telecommunications) and delivered to the recipient's address, telex number or fax number set forth under its name below by any of the following means: (a) hand delivery, (b) registered or certified mail, postage prepaid, with return receipt requested, (c) first class or express mail, postage prepaid, (d) Federal Express, or like overnight courier service, or (e) fax, telex or other wire transmission with request for assurance of receipt in a manner typical with respect to communication of that type. Notice made in accordance with this section shall be deemed delivered upon receipt if delivered by hand or wire transmission, three (3) business days after mailing if mailed by first class, registered or certified mail, or one business day after mailing or deposit with an overnight courier service if delivered by express mail or overnight courier. 12.2 No delay on the part of the Bank in the exercise of any right or remedy shall operate as a waiver. No single or partial exercise by the Bank of any right or remedy shall preclude any other future exercise of it or the exercise of any other right or remedy. No waiver or indulgence by the Bank of any default shall be effective unless in writing and signed by the Bank, nor shall a waiver on one occasion be construed as a bar to or waiver of that right on any future occasion. 12.3 This agreement, the Notes, and any related loan documents embody the entire agreement and understanding between the Borrower and the Bank and supersede all prior agreements and understandings relating to their subject matter. If any one or more of the obligations of the Borrower under this agreement or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Borrower shall not in any way be affected or impaired, and such validity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of the obligations of the Borrower under this agreement or the Notes in any other jurisdiction. 12.4 The Borrower, if more than one, shall be jointly and severally liable. 12.5 This agreement is delivered in the State of Michigan and governed by Michigan law. This agreement is binding on the Borrower and its successors, and shall inure to the benefit of the Bank, its successors and assigns. 12.6 Section headings are for convenience of reference only and shall not affect the interpretation of this agreement. 13.0 Waiver of Jury Trial. The Bank and the Borrower, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this agreement or any related instrument or agreement, or any of the transactions contemplated by this agreement, or any course of conduct, dealing, statements (whether oral or written), or actions of either of them. Neither the Bank nor the Borrower shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Bank or the Borrower except by a written instrument executed by both of them. Executed by the parties on: 5/22/96 (Date) "BANK": "BORROWER" NBD Bank Perceptron, Inc. By: /S/ Andrew W. Ottaway By:/S/ James A. Ratigan ------------------------- ----------------------------- Andrew W. Ottaway, Loan Officer James A. Ratigan, Executive Vice President ADDRESS FOR NOTICES: ADDRESS FOR NOTICES: 38601 Twelve Mile Road 23855 Research Drive Farmington Hills, MI 48331 Farmington Hills, MI 48331 Fax/Telex No. 810-488-0633 Fax/Telex No. MASTER DEMAND BUSINESS LOAN NOTE Due on Demand $3,500,000.00 No.-------------------- Date May 22, 1996 Promise to Pay: For value received, the undersigned (the "Borrower") promises to pay On Demand to NBD Bank (the "Bank"), or order, at any office of the Bank in the State of Michigan, the sum of Three Million Five Hundred Thousand and 00/100 ($3,500,000.00), or such lesser sum as is indicated on Bank records, plus interest computed on the basis of the actual number of days elapsed in a year of 360 days at the rate of: --------- % per annum until demand or maturity, whether by acceleration or otherwise (the "Note Rate") and at the rate of 3% per annum above the Note Rate on overdue principal from the date when due until paid or; 0.00 % per annum above the rate announced from time to time by the Bank as its "prime" rate (the "Note Rate"), which rate may not be the lowest rate charged by the Bank to any of its customers, until maturity, whether by demand, acceleration or otherwise, and at the rate of 3% per annum above the Note Rate on overdue principal from the date when due until paid. Each change in the "prime" rate will immediately change the Note Rate. In no event shall the interest rate exceed the maximum rate allowed by law; any interest payment which would for any reason be deemed unlawful under applicable law shall be applied to principal. Interest will be computed on the unpaid principal balance from the date of each borrowing. The Borrower will pay this sum on demand. Until demand, the Borrower will pay consecutive monthly installments of interest only commencing May 31, 1996. Master Demand Note: The Bank has authorized an uncommitted credit facility to the Borrower in a principal amount not to exceed the face amount of this note. The credit facility is in the form of loans made from time to time by the Bank to the Borrower at the Bank's sole discretion. This note evidences the Borrower's obligation to repay those loans. The aggregate principal amount of debt evidenced by this note shall be the amount reflected from time to time in the records of the Bank but shall not exceed the face amount of this note. The Borrower acknowledges and agrees that no provision of this note and no course of dealing by the Bank shall commit the Bank to make loans to the Borrower and that notwithstanding any provision of this note or any other instrument or document, all loans evidenced by this note are due and payable on demand, which may be made by the Bank at any time, whether or not any event of acceleration then exists. Credit Agreement: This note evidences a debt under the terms of a Credit Authorization Agreement between the Bank and the Borrower dated concurrently and any amendments. Security: To secure the payment of this note and any other present or future liability of the Borrower, whether several, joint, or joint and several, the Borrower pledges and grants to the Bank a continuing security interest in the following described property and all of its additions, substitutions, increments, proceeds and products, whether now owned or later acquired ("Collateral"): 1. All securities and other property of the Borrower in the custody, possession or control of the Bank (other than property held by the Bank solely in a fiduciary capacity); 2. All property or securities declared or acknowledged to constitute security for any past, present or future liability of the Borrower to the Bank; 3. All balances of deposit accounts of the Borrower with the Bank; 4. The following additional property: ----------------------- ----------------------------------------------------------- -----------------------------------------------------------. Bank's Right to Setoff: The Bank shall have the right at any time to apply its own debt or liability to the Borrower or to any other party liable on this note in whole or partial payment of this note or other present or future liabilities, without any requirement of mutual maturity. Representations by Borrower: Each Borrower represents that: (a) the execution and delivery of this note and the performance of the obligations it imposes do not violate any law, conflict with any agreement by which it is bound, or require the consent or approval of any governmental authority or any third party; (b) this note is a valid and binding agreement, enforceable according to its terms; and (c) all balance sheets, income statements, and other financial statements furnished to the Bank are accurate and fairly reflect the financial condition of the organizations and persons to which they apply on their effective dates, including contingent liabilities of every type, which financial condition has not changed materially and adversely since those dates. Each Borrower, if other than a natural person, further represents that: (a) it is duly organized, existing and in good standing under the laws where it is organized; and (b) the execution and delivery of this note and the performance of the obligations it imposes (i) are within its powers; (ii) have been duly authorized by all necessary action of its governing body; and (iii) do not contravene the terms of its articles of incorporation or organization, its bylaws, or any agreement governing its affairs. Waiver of Jury Trial: The Bank and the Borrower, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this note or any related instrument or agreement or any of the transactions contemplated by this note or any course of conduct, dealing, statements (whether oral or written), or actions of either of them. Neither the Bank nor the Borrower shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Bank or the Borrower except by a written instrument executed by both of them. See reverse side for additional terms and conditions including events of default. Address: 23855 Research Drive Perceptron, Inc. Borrower: Farmington Hills, MI 48335 38-2381442 By: /S/ James A. Ratigan ---------------------------- James A. Ratigan, Executive Vice President Additional Terms and Conditions Events of Default/Acceleration: If any of the following events occurs, this note shall be due immediately without notice at the Bank's option whether or not the Bank has made demand. 1. The Borrower or any guarantor of this note ("Guarantor") fails to pay when due any amount payable under this note or under any agreement or instrument evidencing debt to any creditor; 2. The Borrower or any Guarantor (a) fails to observe or perform any other term of this note; (b) makes any materially incorrect or misleading representation, warranty, or certificate to the Bank; (c) makes any materially incorrect or misleading representation in any financial statement or other information delivered to the Bank; or (d) defaults under the terms of any agreement or instrument relating to any debt for borrowed money (other than the debt evidenced by this note) such that the creditor declares the debt due before its maturity; 3. There is a default under the terms of any loan agreement, mortgage, security agreement, or any other document executed as part of the loan evidenced by this note, or any guaranty of the loan evidenced by this note becomes unenforceable in whole or in part, or any Guarantor fails to promptly perform under its guaranty; 4. A "reportable event" (as defined in the Employee Retirement Income Security Act of 1974 as amended) occurs that would permit the Pension Benefit Guaranty Corporation to terminate any employee benefit plan of the Borrower or any affiliate of the Borrower; 5. The Borrower or any Guarantor becomes insolvent or unable to pay its debts as they become due; 6. The Borrower or any Guarantor (a) makes an assignment for the benefit of creditors; (b) consents to the appointment of a custodian, receiver, or trustee for itself or for a substantial part of its assets; or (c) commences any proceeding under any bankruptcy, reorganization, liquidation, insolvency or similar laws of any jurisdiction; 7. A custodian, receiver, or trustee is appointed for the Borrower or any Guarantor or for a substantial part of its assets without its consent and is not removed within 60 days after such appointment; 8. Proceedings are commenced against the Borrower or any Guarantor under any bankruptcy, reorganization, liquidation, or similar laws of any jurisdiction, and such proceedings remain undismissed for 60 days after commencement; or the Borrower or Guarantor consents to the commencement of such proceedings; 9. Any judgment is entered against the Borrower or any Guarantor, or any attachment, levy, or garnishment is issued against any property of the Borrower or any Guarantor; 10. The Borrower or any Guarantor dies; 11. The Borrower or any Guarantor, without the Bank's written consent, (a) is dissolved, (b) merges or consolidates with any third party, (c) leases, sells or otherwise conveys a material part of its assets or business outside the ordinary course of business, (d) leases, purchases or otherwise acquires a material part of the assets of any other corporation or business entity except in the ordinary course of business, or (e) agrees to do any of the foregoing (notwithstanding the foregoing, any subsidiary may merge or consolidate with any other subsidiary, or with the Borrower so long as the Borrower is the survivor); 12. The loan-to-value ratio of any pledged securities at any time exceeds ---------%, and such excess continues for five (5) days after notice from the Bank to the Borrower; 13. There is a substantial change in the existing or prospective financial condition of the Borrower or any Guarantor which the Bank in good faith determines to be materially adverse; 14. The Bank in good faith deems itself insecure. Remedies: If this note is not paid at maturity, whether by demand, acceleration or otherwise, the Bank shall have all of the rights and remedies provided by any law or agreement. Any requirement of reasonable notice shall be met if the Bank sends the notice to the Borrower at least seven (7) days prior to the date of sale, disposition or other event giving rise to the required notice. The Bank is authorized to cause all or any part of the Collateral to be transferred to or registered in its name or in the name of any other person, firm or corporation, with or without designation of the capacity of such nominee. The Borrower shall be liable for any deficiency remaining after disposition of any Collateral. The Borrower is liable to the Bank for all reasonable costs and expenses of every kind incurred in the making or collection of this note, including, without limitation, reasonable attorneys' fees and court costs. These costs and expenses shall include, without limitation, any costs or expenses incurred by the Bank in any bankruptcy, reorganization, insolvency or other similar proceeding. Waiver: Each endorser and any other party liable on this note severally waives demand, presentment, notice of dishonor and protest, and consents to any extension or postponement of time of its payment without limit as to the number or period, to any substitution, exchange or release of all or part of the Collateral, to the addition of any party, and to the release or discharge of, or suspension of any rights and remedies against, any person who may be liable for the payment of this note. No delay on the part of the Bank in the exercise of any right or remedy shall operate as a waiver. No single or partial exercise by the Bank of any right or remedy shall preclude any other future exercise of it or the exercise of any other right or remedy. No waiver or indulgence by the Bank of any default shall be effective unless in writing and signed by the Bank, nor shall a waiver on one occasion be construed as a bar to or waiver of that right on any future occasion. Miscellaneous: The Borrower, if more than one, shall be jointly and severally liable, and the term "Borrower" shall mean any one or more of them. This note shall be binding on the Borrower and its successors, and shall benefit the Bank, its successors and assigns. Any reference to the Bank shall include any holder of this note. This note is delivered in the State of Michigan and governed by Michigan law. Section headings are for convenience of reference only and shall not affect the interpretation of this note. - --------------------------------------------------------------- Payment Guaranteed By: - ---------------------------------------------------------------- (Signature) Address - ---------------------------------------------------------------- (Signature) Address - ---------------------------------------------------------------- (Signature) Address - ---------------------------------------------------------------- For Bank Use Only - ---------------------------------------------------------------- Facility Authorized to Lend Under - ---------------------------------------------------------------- - --------------------------------------------------------------- Method Of Disbursement - --------------------------------------------------------------- - --------------------------------------------------------------- Loan Classification - --------------------------------------------------------------- [BANK CODES] EX-10.47 3 SEVENTH AMENDMENT TO 1992 STOCK OPTION PLAN SEVENTH AMENDMENT TO THE PERCEPTRON, INC. 1992 STOCK OPTION PLAN Pursuant to the Amendment provisions in Section 9.2 of the Perceptron, Inc. 1992 Stock Option Plan ("Plan") and the approval of the Board of Directors of Perceptron, Inc. ("Company"), the Plan is hereby amended as set forth below. 1. Subject to shareholder approval, Section 4.1 of the Plan (Shares Available for Options) shall be amended and restated in its entirety to read as follows: 4.1 Shares Available for Options. The Board of Directors shall reserve for purposes of this Plan, out of the authorized but unissued Stock or out of shares of Stock held in the Company's Treasury, or partly out of each, a total of 1,814,286 shares of Stock, after taking into account the Company's reverse stock split effected on May 5, 1992 and stock split effected November 30, 1995, (or the number and kind of shares of Stock or other securities which, in accordance with Section 8 of this Plan, shall be substituted for such shares or to which such shares shall be adjusted). THIS SEVENTH AMENDMENT is hereby adopted as of June 3, 1996. Perceptron, Inc. By:/S/ Alfred A. Pease ---------------------- Alfred A. Pease, President and Chief Executive Office EX-10.48 4 EIGHTH AMENDMENT TO 1992 STOCK OPTION PLAN EIGHTH AMENDMENT TO THE PERCEPTRON, INC. 1992 STOCK OPTION PLAN Pursuant to the Amendment provisions in Section 9.2 of the Perceptron, Inc. 1992 Stock Option Plan ("Plan") and the approval of the Board of Directors of Perceptron, Inc. ("Company"), the Plan is hereby amended as set forth below. 1. Section 4.4 of the Plan (Option Price) shall be amended and restated in its entirety to read as follows: 4.4 Option Price. The Committee shall, in its discretion, establish, at the time at which any option is granted, the purchase price of each share of stock covered by such option; provided, however, that the option price of an option shall not be less than 100% of the fair market value of the shares covered by the option on the date such option is granted. The option price will be subject to adjustment in accordance with the provisions of Section 8 of this Plan. For purposes of this Plan, the fair market value of each share shall be deemed to be: (a) the mean between the highest and lowest reported sale prices on any domestic stock exchanges on which the Stock is then listed; or (b) if the Stock is not listed on any domestic stock exchange, the mean between the closing high bid and low asked price as reported by the National Association of Securities Dealers Automated Quotation System (or, if not so reported, by the system then regarded as the most reliable source of such quotations); or (c) if the Stock is listed on a domestic exchange or quoted in the domestic over-the-counter market, but there are no reported sales or quotations, as the case may be, on the given date, the value determined pursuant to (a) or (b) above, using the reported sale prices or quotations on the last previous date on which so reported; or (d) if none of the foregoing clauses apply, the fair value as determined in good faith by the Committee. THIS EIGHTH AMENDMENT is hereby adopted as of July 11, 1996. PERCEPTRON, INC. By:/S/ Alfred A. Pease -------------------------- Alfred A. Pease, President and Chief Executive Officer EX-10.49 5 SECOND AMENDMENT TO DIRECTORS STOCK OPTION PLAN SECOND AMENDMENT TO THE PERCEPTRON INC. DIRECTORS STOCK OPTION PLAN Pursuant to the Amendment provisions in Section 5.6 of the Perceptron, Inc. Directors Stock Option Plan (the "Plan"), the Plan is hereby amended as set forth below. 1. Subject to shareholder approval at the Company's next Annual Meeting, effective June 3, 1996, Section 1.4 (Stock) shall be amended and restated in its entirety to read as follows: 1.4 Stock. The total number of shares of Common Stock available for grants under the Plan shall not, in the aggregate, exceed 175,500 shares of Common Stock, after taking into account the Company's stock split effected November 30, 1995, as adjusted from time to time in accordance with Article IV. Shares subject to any unexercised portion of a terminated, forfeited, cancelled or expired Option granted hereunder shall be available for subsequent grants under the Plan. In the event that an option granted under the Plan is exercised by the delivery of shares of Common Stock previously acquired upon the exercise of Options issued under the Plan or through the retention of options procedure as described in Section 2.6 below, the shares of Common Stock so delivered to the Company or underlying such retained options shall be available for subsequent grants under the Plan. THIS SECOND AMENDMENT is hereby adopted as of June 3, 1996. PERCEPTRON, INC. By: /S/ Alfred A. Pease ------------------------ Alfred A. Pease, President and Chief Executive Officer EX-10.50 6 TWO FORMS OF AGREEMENT NOT TO COMPETE PERCEPTRON, INC. Executive Agreement Not to Compete I recognize that Perceptron, Inc., a Michigan corporation (the "Company"), desires to insure that I do not compete with the Company, as specified below, in the event my employment with the Company is terminated. In consideration of the Company's employment of me, and other good and valuable consideration, the receipt of which is hereby acknowledged, I agree as follows: 1. During the term of my employment by the Company (which period shall be referred to as "my Engagement"), and thereafter during the longer of (i) any period in which the Company is obligated to make payments to me (the "Payment Completion Period"), or (ii) 24 months from the end of my Engagement (the "Non-Compete Period"), I shall not engage, directly or indirectly, as officer, director, shareholder, partner, member, associate, consultant, owner, agent, independent contractor, employee or otherwise of any person, firm, corporation or other business engaged, anywhere in the world, (i) in any business conducted by the Company during my Engagement, or any business which the Company contemplated or planned, during my Engagement, to engage in, or (ii) in any business involving the design, development, manufacture, sale or servicing of laser-based three-dimensional machine vision sensors and systems utilizing electro-optical techniques or component parts utilized in such sensors or system (the "Non-Compete Provisions"); provided that the ownership of one (1%) percent or less of the stock in any publicly traded corporation in such a business shall not be violative of the foregoing covenant. In the event that I shall fail to comply with any of my obligations under this Agreement, in addition to any other remedies that the Company may have at law or in equity, my employment with the Company as an employee shall automatically terminate and the Company's obligations to me shall automatically terminate. 2. I understand that nothing in this Agreement shall affect my obligations under the "Proprietary Information and Inventions Agreement" between the Company and myself dated ------------. 3. (a) If, after the expiration of the first 12 months of the Non-Compete Period ("Initial Non-Compete Period"), and after a conscientious and diligent search of at least 120 days duration (including searches conducted during the Initial Non-Compete Period) for a position permitted by Paragraph 1 herein, I notify the Company in writing that I am unable, primarily due to such restrictions, to obtain a comparable position which shall be as compensatory to me as my remuneration with the Company when my employment was terminated, then (i) the Company shall have the option to retain me as a consultant by notifying me, at my last address as it appears in the Company's records, within 30 days of the receipt of my notice, of its desire to so retain me and (ii) the Company may at any time notify me that I shall thereafter cease to be bound by any of the restrictions of Paragraph 1 herein, and upon receipt of such notice, irrespective of the Company's prior election to retain me as a consultant, the Company shall cease to be bound to retain me as a consultant or liable for any other obligation pursuant to this Paragraph 3. (b) Whether or not I am retained as a consultant of the Company, I shall notify the Company, for a period of 24 months after termination, of any change in my address and each subsequent employment or business activity (stating the name and address of the employer or business, the nature of the business of such employer or business and the nature of my position) in which I engage during such 24 months. (c) If the Company retains me as a consultant, I shall, during the period of such retention, hold myself available to render consulting services to or at the direction of the Company in my area of expertise or special competence, at such places and times determined by the Company, for the remainder of the Non-Compete Period. Such consulting services shall be for not more than 40 hours per month, for which the Company shall pay me monthly an amount equal to my monthly basic salary paid by the Company at the time of termination of my employment, less an amount equal to all other compensation, in whatever form, paid or payable to me from any other person, corporation, or other entity for services rendered by me in such month (the "Consulting Fee"). In the event I am requested to render such consulting services to the Company during any month, but am unable to do so for any reason, then the Consulting Fee payable to me for such month shall be determined as follows: the monthly Consulting Fee times the number of hours of consulting performed by me for the Company in the month divided by the number of hours of consulting services requested by the Company to be rendered by me in such month (up to a maximum of 40 hours). (d) During the period of my retention as a consultant, I agree to continue to make a conscientious and diligent search for a position permitted by Paragraph 1 herein and agree to accept any such position offered to me. (e) During any period in which I am subject to the restrictions of Paragraph 1 herein, I shall, if requested by the Company, provide the Company with detailed written reports of efforts made by me to search for a position permitted by Paragraph 1 herein and provide the Company with such other information and documentation relating to such search as the Company may request from time to time. Such written reports shall include, but not be limited to, the name of all potential employers contacted, the business of the potential employer, the dates of contact, the manner of contact, the response received, all efforts taken to identify potential employers and all other efforts taken to search for a position permitted by Paragraph 1 herein. I hereby acknowledge that it is my sole obligation to establish to the Company's complete satisfaction that I am making a conscientious and diligent search for a position permitted by Paragraph 1 herein, and the Company shall have no obligation to make any payments of the Consulting Fee during any period in which I have not established to the Company's complete satisfaction that I have made and am making a conscientious and diligent search for a position permitted by Paragraph 1 herein. 4. I acknowledge that this Agreement, embodies the entire agreement and understanding between the parties hereto and there are no other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof, and, that this Agreement shall supersede all previous agreements, negotiations, commitments and writings with respect to the subject matter hereof. No waiver and no modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by the party to be bound thereby. 5. I hereby acknowledge that, in the event any provision of this Agreement or portion thereof is found to be wholly or partially invalid, illegal or unenforceable in any judicial proceeding, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. 6. I acknowledge that the Company may assign its rights under this Agreement to any affiliate or any person who acquires or succeeds to any part of the business or assets of the Company. 7. I acknowledge that if there is a breach or threatened breach of the provisions of this Agreement, the Company shall be entitled to an injunction restraining me from such breach, in addition to any other remedies available to the Company for such breach or threatened breach. 8. I acknowledge that this Agreement may be executed in one or more counterpart copies; each of those fully executed copies shall be considered as original, but together shall constitute one agreement. 9. I acknowledge that this Agreement has been negotiated, executed, and delivered in, and will be governed by the laws of, the State of Michigan, and I acknowledge and agree to submit to the jurisdiction of the courts of and in the State of Michigan with respect thereto. Date: By: ---------------------------- ACCEPTED AND AGREED TO: PERCEPTRON, INC. By: ----------------------------- Title: -------------------------- PERCEPTRON, INC. Agreement Not To Compete I recognize that Perceptron, Inc., a Michigan Corporation (the "Company"), desires to insure that I do not compete with the Company, as specified below, in the event my employment with the Company is terminated. In consideration of one or more of the following: (i) the Company's employment of me, (ii) the Company's change in my compensation, or (iii) other good and valuable consideration, the receipt of which is hereby acknowledged, I agree as follows: 1. I will not, for a period of two years, commencing with the termination of my employment with the Company, engage in any activities (directly or indirectly in any capacity), similar or reasonably similar to those in which I shall have engaged as an employee of the Company or render services similar or reasonably related thereto for any trade or business which directly competes with the Company in any place where the Company or any of its subsidiaries does or may do business, or has sold or may sell its products or services, in any line of business engaged in (or planned to be engaged in by the Company) at the time of such termination by the Company, whether now existing or hereafter established. Further I will not engage in such activities nor render such services to any other person or entity engaged or about to become engaged in such activities to, for or on behalf of any such trade or business. 2. I understand that nothing in this agreement shall affect my obligations under the "Proprietary Information and Inventions Agreement" between the Company and myself dated June 11, 1996. 3. (a) During any period in which I am subject to the restrictions of Paragraph 1 herein, if after a conscientious and diligent search of at least 120 days duration for a position permitted by Paragraph 1 herein, I notify the Company in writing that I am unable, primarily due to such restrictions, to obtain a comparable position which shall be as compensatory to me as my remuneration with the Company when my employment was terminated, then (i) the Company shall have the option to retain me as a consultant by notifying me, at my last address as it appears in the Company's records, within 30 days of the receipt of my notice, of its desire to so retain me and (ii) the Company may at any time notify me that I shall thereafter cease to be bound by any of the restrictions of Paragraph 1 herein, and upon receipt of such notice, irrespective of the Company's prior election to retain me as a consultant, the Company shall cease to be bound to retain me as a consultant or liable for any other obligation pursuant to this Paragraph 3. (b) Whether or not I am retained as a consultant of the Company, I shall notify the Company for a period of 24 months after termination of any change in my address and each subsequent employment or business activity (stating the name and address of the employer or business, the nature of the business of such employer or business and the nature of my position) in which I engage during such 24 months. (c) If the Company retains me as a consultant, I shall, during the period of such retention, hold myself available to render consulting services to or at the direction of the Company in my area of expertise or special competence, at such places and times determined by the Company, for up to two years following the termination of my employment with the Company. Such consulting services shall be for not more than 40 hours per month, for which the Company shall pay me monthly an amount equal to my monthly basic salary paid by the Company at the time of termination of my employment, less an amount equal to all other compensation, in whatever form, paid or payable to me from any other person, corporation, or other entity for services rendered by me in such month (the "Consulting Fee"). In the event I am requested to render such consulting services to the Company during any month, but am unable to do so for any reason, then the Consulting Fee payable to me for such month shall be determined as follows: the monthly Consulting Fee times the number of hours of consulting performed by me for the Company in the month divided by the number of hours of consulting services requested by the Company to be rendered by me in such month (up to maximum of 40 hours). (d) During the period of my retention as a consultant, I agree to continue to make a conscientious and diligent search for a position permitted by Paragraph 1 herein and agree to accept any such position offered to me which is comparable to my position with the Company. (e) During any period in which I am subject to the restrictions of Paragraph 1 herein, I shall, if requested by the Company, provide the Company with detailed written reports of efforts made by me to search for a position permitted by Paragraph 1 herein and provide the Company with such other information and documentation relating to such search as the Company may request from time to time. Such written reports shall include, but not be limited to, the name of all potential employers contacted, the business of the potential employer, the dates of contact, the manner of contact, the response received, all efforts taken to identify potential employers and all other efforts taken to search for a position permitted by Paragraph 1 herein. I hereby acknowledge that it is my sole obligation to establish to the Company's complete satisfaction that I am making a conscientious and diligent search for a position permitted by Paragraph 1 herein, and the Company shall have no obligation to make any payments of the Consulting Fee during any period in which I have not established to the Company's complete satisfaction that I have made and am making a conscientious and diligent search for a position permitted by Paragraph 1 herein. 4. I acknowledge that this agreement, embodies the entire agreement and understanding between the parties hereto and there are no other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof, and, that this agreement shall supersede all previous agreements, negotiations, commitments and writings with respect to the subject matter hereof. No waiver and no modification or amendment of any provision of this agreement shall be effective unless specifically made in writing and duly signed by the party to be bound thereby. 5. I hereby acknowledge that, in the event any provision of this agreement or portion thereof is found to be wholly or partially invalid, illegal or unenforceable in any judicial proceeding, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this agreement, as the case may require, and this agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. 6. I acknowledge that the Company may assign its rights under this agreement to any affiliate or any person who acquires or succeeds to any part of the business or assets of the Company. 7. I acknowledge that if there is a breach or threatened breach of the provisions of this agreement, the Company shall be entitled to an injunction restraining me from such breach, in addition to any other remedies available to the Company for such breach or threatened breach. 8. I acknowledge that this agreement may be executed in one or more counterpart copies; each of those fully executed copies shall be considered as original, but together shall constitute one agreement. 9. I acknowledge that this agreement has been negotiated, executed, and delivered in, and will be governed by laws of, the State of Michigan, and I acknowledge and agree to submit to the jurisdiction of the courts of and in State of Michigan with respect thereto. Date: June 26, 1996 By: -------------------------- ACCEPTED AND AGREED TO: PERCEPTRON, INC. By: --------------------------- EX-10.51 7 DEVELOPMENT AND PURCHASE AGREEMENT DEVELOPMENT AND PURCHASE AGREEMENT This Development and Purchase Agreement is made this 2nd day of June, 1996, by and among DeMattia Development Company, a Michigan corporation, with business offices located at 45501 Helm Street, Plymouth, Michigan 48170, as Developer and Seller ("DeMattia"), Plymouth-West Limited Partnership, a Michigan limited partnership, with business offices located at 45501 Helm Street, Plymouth, Michigan 48170 ("Plymouth-West"), and Perceptron, Inc., a Michigan corporation, with business offices located at 23855 Research Drive, Farmington Hills, Michigan 48335-2643, as Purchaser ("Perceptron") upon the following terms and conditions: RECITALS: A. On March 5, 1996, Demco XVI Limited Partnership, a Michigan limited partnership, as Landlord ("Demco XVI") entered into a Lease with Perceptron, as Tenant, which Lease was modified by a letter agreement dated March 8, 1996 (collectively, the "Lease") . B. The Lease provided for the development and construction of an office, research and development and distribution facility ("Perceptron Facility") as described in the Lease upon a Site (as defined in the Lease) pursuant to certain Plans (as defined in the Lease) in accordance with the terms and conditions of the Lease including, but not limited to, Sections 3.1 through 3.6 and 4.1 through 4.4. C. A certain letter agreement dated December 21, 1995, by the R.A. DeMattia Company, a Michigan corporation ("DeMattia Co."), provided Perceptron with an option to purchase the proposed facility and Perceptron exercised the option by written notice on March 28, 1996. D. DeMattia and Perceptron desire to set forth the terms and conditions for the development, construction and purchase of the Site and Perceptron Facility. NOW, THEREFORE, for and in consideration of the foregoing Recitals, the mutual covenants of DeMattia and Perceptron contained herein, and other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, DeMattia and Perceptron agree as follows: 1. DeMattia is providing the Site and constructing the Perceptron Facility on the Site in accordance with the Plans (as defined in the Lease) and the requirements of the Lease, including, but not limited to, Sections 3.1 through 3.6 and 4.1 through 4.4, for an aggregate purchase price of Five Million Three Hundred Ninety-Six Thousand Six Hundred Fifty- Five ($5,396,655) Dollars ("Purchase Price"). DeMattia shall construct the Perceptron Facility in compliance with the recorded Building and Use Restrictions for the Metro-West Technology Park Subdivision recorded in Liber 23026, Page 347, Wayne County Register of Deeds and Records. 2. In addition to the Purchase Price, Perceptron shall pay to DeMattia all costs and expenses incurred by DeMattia or any of its affiliates in connection with the Lease and sale transaction within five (5) business days of written request for payment identifying the costs in detail, which costs are identified on attached Exhibit A. 3. DeMattia acknowledges receipt of a deposit of Fifty Thousand ($50,000) Dollars paid by Perceptron pursuant to the Proposal to be applied toward the Purchase Price. 4. Perceptron shall pay the Purchase Price as follows: a. An amount monthly equal to a percentage of construction completed ("Progress Payment") as of the date of the request for payment ("Draw Request"), which Draw Request shall be accompanied by a certification by DeMattia of the percentage of completion of construction. The Progress Payment, less a retainage of ten (10%) percent, shall be paid by Perceptron within five (5) business days of the Draw Request. b. The retainage of ten (10%) percent shall be paid by Perceptron upon the Substantial Completion Date (as defined in the Lease) less an amount agreed upon by DeMattia and Perceptron for "Punchlist Work" as defined in Section 4.1 of the Lease. c. The amount withheld for Punchlist Work as and when the Punchlist Work is completed. 5. In the event Perceptron and DeMattia disagree upon the percentage of completion, Perceptron shall pay the amount of the Progress Payment based upon the percentage of completion determined by it and the dispute will be submitted to arbitration in accordance with Section 3.5 of the Lease. 6. All taxes and assessments (including special assessments) affecting the Property for which bills have been issued prior to the date of Closing shall be paid by Seller and all such taxes and assessments for which bills are issued after the date of Closing shall be paid by the Purchaser, notwithstanding the fact that such taxes or assessments have become a lien upon or assessed against the Site as a result of Public Acts 80 and 219 of 1994. Current Taxes (as hereinafter defined), shall be prorated and adjusted as of the date of Closing in accordance with the due date basis (i.e. July 1 and December 1) of the municipality or taxing unit in which the Site is located, with all taxes being deemed paid in advance. All special assessments levied against the Site and providing for installment payments due after the date of Closing shall be paid by Sellers. Current Taxes shall mean the winter and summer tax bills issued for the Site within twelve (12) months immediately preceding the date of Closing. 7. The transaction shall be closed upon the Substantial Completion Date (as defined in Section 3.4 of the Lease) and upon Closing the following shall occur: a. DeMattia and Perceptron shall execute and deliver a Closing Statement identifying the Purchase Price, costs and expenses for the transaction, tax prorations and similar costs and expenses. b. DeMattia shall execute and deliver to Perceptron a warranty deed in the form attached as Exhibit B. c. Perceptron shall pay DeMattia the amount of any outstanding and unpaid Progress Payments and the ten (10%) percent retainage, less the mutually agreed upon amount for Punchlist Work. Perceptron shall pay DeMattia the amounts for such Punchlist Work as and when completed. d. Perceptron shall pay any costs and expenses required under Paragraph 2 which are due and unpaid as of the date of Closing. e. DeMattia shall provide Perceptron with a commitment for an owner's title insurance policy issued by First American Title Insurance Company of Mid-America ("Title Company") in the amount of the Purchase Price, have the title commitment "marked" at Closing and direct the Title Company to issue an owner's title insurance policy to Perceptron in accordance with the "marked" commitment as soon as practicable, provided Perceptron pays the cost of such title insurance together with any endorsements requested by Perceptron. f. DeMattia shall deliver to Perceptron a construction warranty incorporating the warranties contained in the Lease. g. Perceptron shall execute and deliver an easement agreement granting a non-exclusive perpetual easement over the Site as contemplated by Section 33.8 of the Lease for the benefit of the approximately 13 acre parcel of property owned by Plymouth-West Limited Partnership, an entity affiliated with DeMattia, pursuant to an easement agreement mutually acceptable to Perceptron and DeMattia. 8. The Lease shall remain in full force and effect until the sale of the Site and Perceptron Facility is closed and upon closing the Lease shall automatically terminate without the necessity of executing any agreements or documents and Demco XVI and Perceptron shall be released of any and all liabilities of any nature arising under the Lease. Effective the date of this Development and Purchase Agreement, DeMattia shall assume and perform all of the obligations of and be entitled to all the benefits due Demco XVI under the Lease and the letter agreement of March 8, 1996. The DeMattia Co. shall retain all obligations and liabilities under the letter agreement of March 8, 1996 9. Perceptron shall remain liable to perform all of the covenants, agreements and obligations under the Lease until the purchase of the Perceptron Facility is closed, at which time the Lease shall terminate and be of no further force and effect and DeMattia and Perceptron will be released from all further obligations under the Lease. 10. Plymouth-West, an entity related to DeMattia and the current owner of the Site joins in the execution of this Development and Purchase Agreement solely for the purpose of acknowledging agreement to convey the Site to either DeMattia or Perceptron, as is appropriate, when construction of the Perceptron Facility is completed and the terms and conditions of this Development and Purchase Agreement has been performed by DeMattia and Perceptron. Except for such conveyance obligation, Plymouth-West shall have no other obligations, responsibilities or liabilities under this Development and Purchase Agreement. IN WITNESS WHEREOF, this Development and Purchase Agreement is executed by DeMattia and Perceptron on the day and year first above written. IN THE PRESENCE OF: DeMattia Development Company, a Michigan corporation /S/ Jeff Becker By: /S/ Gary D. Roberts - ---------------------- ------------------------------- Jeff Becker Gary D. Roberts President Plymouth-West Limited Partnership, a Michigan limited partnership /S/ Jeff Becker By: /S/ Robert A. DeMattia - ---------------------- ---------------------------- Jeff Becker Robert A. DeMattia General Partner Perceptron, Inc., a Michigan corporation /S/ James A. Ratigan By:/S/ A. A. Pease - ---------------------- ------------------------- James A. Ratigan Alfred A. Pease Its: EXHIBIT A (Transaction Costs and Expenses) The following transaction costs and expenses shall be paid by Perceptron in addition to the Purchase Price: 1. Legal $16,349.00 (Leasing and Equity) 2. Transfer Tax County Transfer Tax (1.10 per 1,000) $ 5,936.70 State Transfer Tax (7.50 per 1,000) 40,477.50 --------- Subtotal $46,414.20 46,414.20 3. Owners Title Insurance Premium (All other title expenses including endorsements to be paid by Purchaser) 117.00 4. DeMattia Development Expenses (Personnel and Miscellaneous Leasing) 3,200.00 --------- Total: $66,080.20 ========= EX-10.52 8 FUTURE ADVANCE MORTGAGE Exhibit 10.52 THIS IS A FUTURE ADVANCE MORTGAGE THIS MORTGAGE is made on ------------------------, 19--, between DeMattia Development Company, a Michigan corporation whose address is 45501 Helm Street, Plymouth, MI 48170 (the "Mortgagor"), and Perceptron, Inc., a Michigan corporation (the "Mortgagee"), whose address is 23855 Research Drive, Farmington Hills, MI 48335. The Mortgagor MORTGAGES AND WARRANTS to the Mortgagee real property and all the buildings, structures and improvements on it described as: Land located in the Township of Plymouth, County of Wayne, State of Michigan: Lot 27, Metro-West Technology Park Subdivision, according to the Plate thereof recorded in Liber 102, pp. 8-13, Wayne County Register of Deeds Records (the "Premises") Commonly known as: -------------------------- Tax Parcel Identification No. 78-008-01-0027-000. The Premises shall also include all of the Mortgagor's right, title and interest in and to the following: (1) All easements, rights-of-way, licenses, privileges and hereditaments. (2) Land lying in the bed of any road, or the like, opened, proposed or vacated, or any strip or gore, adjoining the Premises. (3) All machinery, apparatus, equipment, fittings, fixtures, and articles of personal property of every kind and nature whatsoever located now or in the future in or upon the Premises and used or useable in connection with any present or future operation of the Premises (all of which is called "Equipment"). It is agreed that all Equipment is part of the Premises and appropriated to the use of the real estate and, whether affixed or annexed or not, shall for the purposes of this Mortgage unless the Mortgagee shall otherwise elect, be deemed conclusively to be real estate and mortgaged and warranted to the Mortgagee. (4) All mineral, oil, gas and water rights, royalties, water and water stock, if any. (5) All awards or payments including interest made as a result of: the exercise of the right of eminent domain, the alteration of the grade of any street, any loss of or damage to any building or other improvement on the Premises, any other injury to or decrease in the value of the Premises, any refund due on account of the payment of real estate taxes, assessments or other charges levied against or imposed upon the Premises, and the reasonable attorney fees, costs and disbursements incurred by the Mortgagee in connection with the collection of any such award or payment. (6) All of the rents, issues, income and profits of the Premises under present or future leases, or otherwise, including but not limited to all rights conferred by Act No. 210 of Michigan Public Acts of 1953, as amended. (MCL 554.231 et seq.) The Premises are unencumbered except as follows: See attached Exhibit A ("Permitted Encumbrances"). If the Premises are encumbered by Permitted Encumbrances, the Mortgagor shall perform all obligations and make all payments as required by the Permitted Encumbrances. The Mortgagor shall provide copies of all writings pertaining to Permitted Encumbrances, and the Mortgagee is authorized to request and receive that information from any other person without the consent or knowledge of the Mortgagor. THE DEBT. This Mortgage secures the following (the "Debt"): See attached Addendum. (i) - (iii) [Subparagraphs Reserved] (iv) Future Advances and Cross-Lien: All other present and future, direct and indirect obligations and liabilities of the Mortgagor, or any one or more of them, with or without others, however evidenced, to the Mortgagee, and all future advances, whether obligatory or optional, from the Mortgagee to the Mortgagor, or any one of more of them, with or without others. (This shall not apply to any obligation or debt incurred for personal, family or household purposes unless the note or guaranty expressly states that it is secured by this Mortgage.) Notwithstanding, the foregoing, if this Mortgage is a residential future advance mortgage, as defined in MCL 565.901, the maximum principal amount secured by this Mortgage is $----------------, excluding protective advances as defined in MCL 565.901. This Mortgage shall also secure the performance of the promises and agreements contained in this Mortgage. This Mortgagor promises and agrees as follows: 1. PAYMENT OF DEBT; PERFORMANCE OF OBLIGATIONS. The Mortgagor shall promptly pay when due, whether by acceleration or otherwise, the Debt for which the Mortgagor is liable, and shall promptly perform all obligations to which the Mortgagor has agreed under the terms of this Mortgage and any loan documents evidencing the Debt. 2. TAXES. The Mortgagor shall pay, when due, and before any interest, collection fees or penalties shall accrue, all taxes, assessments, fines, impositions, and other charges which may become a lien prior to this Mortgage. Should the Mortgagor fail to make such payments, the Mortgagee may, at its option and at the expense of the Mortgagor, pay the amounts due for the account of the Mortgagor. Upon the request of the Mortgagee, the Mortgagor shall immediately furnish to the Mortgagee all notices of amounts due and receipts evidencing payment. The Mortgagor shall promptly notify the Mortgagee of any lien on all or any part of the Premises and shall promptly discharge any unpermitted lien or encumbrance. 3. CHANGE IN TAXES. In the event of the passage of any law or regulation, state, federal or municipal, subsequent to the date of this Mortgage in any manner changing or modifying the laws now in force governing the taxation of mortgages or debts secured by mortgages, or the manner of collecting such taxes, the Debt shall become due and payable immediately at the option of the Mortgagee. 4. INSURANCE. Until the debt is fully paid the Mortgagor shall keep the Premises and the present and future buildings and other improvements on the Premises, constantly insured for the benefit of the Mortgagee, against fire and such other hazards and risks customarily covered by the standard form of extended coverage endorsement available in the State of Michigan, including risks of vandalism and malicious mischief, and shall further provide flood insurance (if the Premises are situated in an area designated as a flood risk area by the Director of the Federal Emergency Management Agency or as otherwise required by the Flood Disaster Protection Act of 1973 and regulations issued under it), and such other appropriate insurance as the Mortgagee may require from time to time. All insurance policies and renewals must be acceptable to Mortgagee, must provide for payment to the Mortgagee in the event of loss, must require 30 days notice to the Mortgagee in the event of nonrenewal or cancellation, and must be delivered to the Mortgagee. Should the Mortgagor fail to insure or fail to pay the premiums on any insurance or fail to deliver the policies or certificates or renewals to the Mortgagee, then the Mortgagee at its option may have the insurance written or renewed and pay the premiums for the account of the Mortgagor. In the event of loss or damage, the proceeds of the insurance shall be paid to the Mortgagee alone. No loss or damage shall itself reduce the Debt. The Mortgagee is authorized to adjust and compromise a loss without the consent of the Mortgagor, to collect, receive and receipt for any proceeds in the name of the Mortgagee and the Mortgagor and to endorse the Mortgagor's name upon any check in payment of proceeds. The proceeds shall be applied first toward reimbursement of all costs and expenses of the Mortgagee in collecting the proceeds and then toward payment of the Debt or any portion of it, whether or not then due or payable, or the Mortgagee at its option may apply the proceeds, or any part to the repair or rebuilding of the Premises provided that Mortgagor is not then or any time during the course of restoration of the Premises in default under this Mortgage and has complied with all requirements for application of the proceeds to restoration of the Premises as Mortgagee, in its sole discretion may establish. 5. (Paragraph Reserved) 6. WASTE. The Mortgagor shall keep the Premises in good repair, shall not commit or permit waste on the Premises nor do any other act causing the Premises to become less valuable. Non-payment of taxes and cancellation of insurance shall each constitute waste as provided by MCL 600.2927. Should the Mortgagor fail to effect the necessary repairs, the Mortgagee may at its option and at the expense of the Mortgagor make the repairs for the account of the Mortgagor. the Mortgagor shall use and maintain the Premises in conformance with all applicable laws, ordinances and regulations. The Mortgagee or its authorized agent shall have the right to enter upon and inspect the Premises at all reasonable times. 7. ALTERATIONS, REMOVAL. No building, structure, improvement, fixture or personal property constituting any part of the Premises shall be removed, demolished or substantially altered without the prior written consent of the Mortgagee. 8. PAYMENT OF OTHER OBLIGATIONS. The Mortgagor shall also pay all other obligations which may become liens or charges against the Premises for any present or future repairs or improvements made on the Premises, or for any other goods, services, or utilities furnished to the Premises and shall not permit any lien or charge of any kind securing the repayment of borrowed funds (including the deferred purchase price for any property) to accrue and remain outstanding against the Premises. 9. ASSIGNMENT OF LEASES AND RENTS. As additional security for the Debt, the Mortgagor assigns to the Mortgagee all oral or written leases, and the rents, issues, income and profits under all leases or licenses of the Premises, present and future, including all rights conferred by MCL 554.231 et seq. and MCL 554.211 et seq. This assignment shall be operative in the event of default and during any foreclosure or other proceeding taken to enforce this Mortgage, and during any redemption period. The Mortgagor will comply with all terms of all leases. 10. ASSIGNMENT OF INTEREST AS TENANT OR PURCHASER. If the Mortgagor's interest in the Premises is that of a tenant or a purchaser, the Mortgagor also assigns, mortgages and warrants to the Mortgagee, as additional security for the Debt, all of the Mortgagor's right, title and interest in and to any leases, land contracts or other agreements by which the Mortgagor is leasing or purchasing any part or all of the premises, including all modifications, renewals and extensions and all of the Mortgagor's right, title or interest in any purchase options contained in any lease or other agreement. The Mortgagor agrees to pay each installment of rent, principal and interest required to be paid by it under the lease, land contract or other agreement when each installment becomes due and payable whether by acceleration or otherwise. The Mortgagor further agrees to pay and perform all of its other obligations under the lease, land contract or other agreement. If the Mortgagor defaults in the payment of any installment of rent, principal, interest or in the payment or performance of any other obligation under the lease, land contract or other agreement, the Mortgagee shall have the right, but not the obligation, to pay the installment or installments and to pay or perform the other obligations on behalf of and at the expense of the Mortgagor. On receipt by the Mortgagee from the landlord or seller under the lease, land contract or other agreement of any written notice of default by the Mortgagor, the Mortgagee may rely on the notice as cause to take any action it deems necessary or reasonable to cure a default even if the Mortgagor questions or denies the existence or nature of the default. 11. SECURITY AGREEMENT. This Mortgage also constitutes a security agreement within the meaning of the Michigan Uniform Commercial Code ("UCC") and Mortgagor grants to Mortgagee a security interest in any Equipment and other personal property included within the definition of Premises. Accordingly, Mortgagee shall have all of the rights and remedies available to a secured party under the UCC. Upon the occurrence of an event of default under this Mortgage, the Mortgagee shall have in addition to the remedies provided by this Mortgage, the right to use any method of disposition of collateral authorized by the UCC with respect to any portion of the Premises subject to the UCC. 12. REIMBURSEMENT OF ADVANCES. If Mortgagor fails to perform any of its obligations under this Mortgage, or if any action or proceeding is commenced which materially affects Mortgagee's interest in the Premises (including but not limited to a lien priority dispute, eminent domain, code enforcement, insolvency, bankruptcy or probate proceedings), then Mortgagee at its sole option may make appearances, disburse sums and take any action it deems necessary to protect its interest (including but not limited to disbursement of reasonable attorney's fees and entry upon the Premises to make repairs. Any amounts disbursed shall become additional Debt, shall be immediately due and payable upon notice from the Mortgagee to the Mortgagor, and shall bear interest at the highest rate payable on the Debt. 13. DUE ON TRANSFER. If all or any part of the Premises or any interest in the Premises is transferred without Mortgagee's prior written consent, Mortgagee may, at its sole option, declare the Debt to be immediately due and payable. 14. NO ADDITIONAL LIEN. Mortgagor covenants not to execute any mortgage, security agreement, assignment of leases and rentals or other agreement granting a lien against the interest of Mortgagor in the Premises without the prior written consent of Mortgagee, and then only when the document granting that lien expressly provides that it shall be subject to the lien of this Mortgage for the full amount secured by this Mortgage, and shall also be subject and subordinate to any then existing or future leases affecting the Premises. 15. (Paragraph reserved). 16. ENVIRONMENTAL MATTERS. The Mortgagor represents and warrants to the Mortgagee that (a) the Mortgagor has not used Hazardous Materials (as defined below), on, from or affecting the premises in any manner which violates any Governmental Regulation (as defined below) governing the use, storage, treatment, transportion, manufacture, refinement, handling, production or disposal of Hazardous Materials and, to the best of the Mortgagor's knowledge, no prior owner of the Premises or any existing or prior tenant, or occupant has used Hazardous Materials on, from or affecting the Premises in any manner which violates any Governmental Regulation governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials; (b) the Mortgagor has never received any notice of any violations (and is not aware of any existing violations) of Governmental Regulations governing the use, storage, treatment, transportation, manufacture, refinement, handling, production or disposal of Hazardous Materials at the Premises and, to the best of the Mortgagor's knowledge, there have been no actions commenced or threatened by any party for noncompliance which affects the Premises; (c) Mortgagor shall keep or cause the Premises to be kept free of Hazardous Materials except to the extent that such Hazardous Materials are stored and/or used in compliance with all applicable Governmental Regulation and, without limiting the foregoing, Mortgagor shall not cause or permit the Premises to be used to generate, manufacture, refine, transport, treat, store, handle, dispose of, transfer, produce, or process Hazardous Materials, except in compliance with all applicable Governmental Regulation, nor shall Mortgagor cause or permit, as a result of any intentional or unintentional act or omission on the part of Mortgagor, a release, spill, leak or emission of Hazardous Materials onto the Premises or onto any other contiguous property; (d) the Mortgagor shall conduct and complete all investigations, including a comprehensive environmental audit, studies, sampling, and testing and all remedial, removal and other actions necessary to clean up and remove all Hazardous Materials on, under, from or affecting the Premises as required by all applicable Governmental Regulation, and in accordance with the orders and directives of all federal, state and local governmental authorities. If the Mortgagor fails to conduct an environmental audit required by such governmental authorities, then the Mortgagee may at its option and at the expense of the Mortgagor, conduct such an audit. Any such audit conducted by Mortgagee shall be conducted solely for the benefit of and to protect the interests of Mortgagee and shall not be relied upon by Mortgagor or any third party for any purpose whatsoever, including, but not limited to Mortgagor's or any third party's obligation, if any, to conduct an independent environmental investigation of its own. By conducting any such audit, Mortgagee does not assume any control over the environmental affairs or operations of Mortgagor nor assume any obligation or liability to Mortgagor or any third party. Subject to the limitations set forth below, the Mortgagor shall defend, indemnify and hold harmless the Mortgagee, its employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs or expenses, including, without limitation, attorney's and consultant's fees, investigation and laboratory fees, court costs and litigation expenses, known or unknown, contingent or otherwise, arising out of or in any way related to (a) the presence, disposal, release or threatened release of any Hazardous Materials on, over, under, from or affecting the Premises or the soil, water, vegetation, buildings, personal property, persons or animals; (b) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials on the Premises, (c) any lawsuit brought or threatened, settlement reached or government order relating to such Hazardous Materials with respect to the Premises, and/or (d) any violation of laws, orders, regulations, requirements or demands of government authorities, or any policies or requirements of the Mortgagee, which are based upon or in any way related to such Hazardous Materials used on the Premises. The Indemnity obligations under this paragraph are specifically limited as follows: (i) The Mortgagor shall have no indemnity obligation with respect to Hazardous Materials that are first introduced to the Premises or any part of the Premises subsequent to the date that the Mortgagor's interest in and possession of the premises or any part of the Premises shall have fully terminated by foreclosure of this Mortgage or acceptance of a deed in lieu of foreclosure; (ii) The Mortgagor shall have no indemnity obligation with respect to any Hazardous Materials introduced to the Premises or any part of the Premises by the Mortgagee, its successors or assigns. The Mortgagor agrees that in the event this Mortgage is foreclosed or the Mortgagor tenders a deed in lieu of foreclosure, the Mortgagor shall deliver the Premises to the Mortgagee free of any and all Hazardous Materials which are then required to be removed (whether over time or immediately) pursuant to applicable federal, state and local laws, ordinances, rules or regulations affecting the Premises. The provisions of this section shall be in addition to any and all other obligations and liabilities the Mortgagor may have to the Mortgagee under the Debt, any loan document, and in common law, and shall survive (a) the repayment of all sums due for the debt, (b) the satisfaction of all of the other obligations of the Mortgagor in this Mortgage and under any loan document, (c) the discharge of this Mortgage, and (d) the foreclosure of this Mortgage or acceptance of a deed in lieu of foreclosure. Notwithstanding anything to the contrary contained in this Mortgage, it is the intention of the Mortgagor and the Mortgagee that the indemnity provisions of this section shall only apply to an action commenced against any owner or operator of the Premises in which any interest of the Mortgagee is threatened or any claim is made against the Mortgagee for the payment of money. For purposes of this Mortgage, "Hazardous Materials" means any materials or substance: (i) which is or becomes defined as a "hazardous substance", "pollutant" or "contaminant" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 USC 9601 et seq.) and amendments thereto and regulations promulgated thereunder: (ii) containing gasoline, oil, diesel fuel or other petroleum products; (iii) which is or becomes defined as a "hazardous waste" pursuant to the federal Resource Conservation and Recovery Act (42 USC 6901 et seq.) and amendments thereto and regulations promulgated thereunder; (iv) containing polychlorinated byphenyls (PCBs); (v) containing asbestos; (vi) which is radioactive; (vii) the presence of which requires investigation or remediation under any Governmental Regulation; or (viii) which is or becomes defined as a "hazardous waste", "hazardous substance", "pollutant", "contaminant" or biologically hazardous material under any Governmental Regulation. "Governmental Regulation(s)" means any law, regulation, rule, policy, ordinance or similar requirement of the United States, any state, and any county, city or other agency or subdivision of the United States or any state. 17. (Paragraph reserved). 18. REMEDIES UPON DEFAULT. Upon the occurrence of any of the events of default set forth in this Mortgage, the Mortgagee is authorized to commence foreclosure proceedings against the Premises through judicial proceedings or by advertisement, at the option of the Mortgagee, and to sell the Premises at public auction pursuant to law, and out of the proceeds to retain all sums due the Mortgagee, including the costs of the sale and reasonable attorney's fees, rendering any surplus to the Mortgagor. The Premises may be sold in one parcel as an entirety or in such parcels, manner and order as Mortgagee may elect. By executing this Mortgage, the Mortgagor waives, in the event of foreclosure of this Mortgage, or the enforcement by the Mortgagee of any other rights and remedies in this Mortgage, any right otherwise available in respect to marshalling of assets which secure the Debt or to require the Mortgagee to pursue its remedies against any other such assets. The Mortgagor waives all rights to a hearing prior to sale in connection with any foreclosure of this Mortgage by advertisement and all notice requirements except as set forth in any applicable state statute providing for foreclosure by advertisement. 19. (Paragraph reserved). 20. REPRESENTATIONS. If the Mortgagor is a corporation, it represents that it is a corporation duly organized, existing and in good standing under the laws of its state of incorporation, and that the execution and delivery of this Mortgage and the performance of the obligations it imposes are within its corporate powers, have been duly authorized by all necessary action of its board of directors, and do not contravene the terms of its articles of incorporation or by-laws. If the Mortgagor is a general or limited partnership, it represents that it is duly organized and existing and that the execution and delivery of this Mortgage and the performance of the obligations it imposes do not conflict with any provision of its partnership agreement and have been duly authorized by all necessary action of its partners. Each Mortgagor represents that the execution and delivery of this Mortgage and the performance of the obligations it imposes do not violate any law and do not conflict with any agreement by which it is bound, and that no consent or approval of any governmental authority or any third party is required for the execution or delivery of this Mortgage or the performance of the obligations it imposes and that this Mortgage is a valid and binding agreement, enforceable in accordance with its terms. 21. NOTICES. Notice from one party to another relating to this Mortgage shall be deemed effective if made in writing (including telecommunications) and delivered to the recipient's address, telex number or telecopier number set forth above by any of the following means: (a) hand delivery, (b) registered or certified mail, postage prepaid, with return receipt requested, (c) first class or express mail, postage prepaid, (d) Federal Express, Purolator Courier or like overnight courier service or (e) telecopy, telex, or other wire transmission with request for assurance of receipt in a manner typical with respect to communication of that type. Notice made in accordance with this paragraph shall be deemed delivered upon receipt if delivered by hand or wire transmission, 3 business days after mailing if mailed by first class, registered or certified mail or one business day after mailing or deposit with an overnight courier service if delivered by express mail or overnight courier. This notice provision shall be inapplicable to any judicial or non-judicial proceeding where Michigan law governs the manner and timing of notices in foreclosure or receivership proceedings. 22. MISCELLANEOUS. If any provision of this Mortgage is in conflict with any statute or rule of law or is otherwise unenforceable for any reason whatsoever, then the provision shall be deemed null and void to the extent of such conflict or unenforceability and shall be deemed severable from but shall not invalidate any other provisions of this Mortgage. No waiver by the Mortgagee of any right or remedy granted or failure to insist on strict performance by the Mortgagor shall affect or act as a waiver of any right or remedy of the Mortgagee, nor affect the subsequent exercise of the same right or remedy by the Mortgagee for any subsequent default by the Mortgagor, and all rights and remedies of the Mortgagee are cumulative. These promises and agreements shall bind and these rights shall be to the benefit of the parties and their respective heirs, successors and assigns. If there is more than one Mortgagor or Pledgor(s), the obligations under this Mortgage shall be joint and several. This Mortgage shall be governed by Michigan law except to the extent it is preempted by federal law or regulation. 23. (Paragraph reserved). WITNESSES: DEMATTIA DEVELOPMENT COMPANY, a Michigan corporation - ------------------------------- By: --------------------------- Its: --------------------------- PLYMOUTH-WEST LIMITED PARTNERSHIP, a Michigan limited partnership By: ------------------------------- Its: ------------------------------- STATE OF MICHIGAN ) ) SS. COUNTY OF -----------) The foregoing Addendum to Mortgage was acknowledged before me this - ----- day of May, 1996 by----------------------------, the - ----------------------- of DeMattia Development Company, a Michigan corporation, on behalf of the corporation. ------------------------------ Notary Public, --------------- County, Michigan My Commission Expires:-------- STATE OF MICHIGAN ) )SS. COUNTY OF -------- ) The foregoing Addendum to Mortgage was acknowledged before me this - ----- day of May, 1996 by----------------------------, the - ----------------------- of DeMattia Development Company, a Michigan corporation, on behalf of the corporation. ------------------------------ Notary Public, --------------- County, Michigan ADDENDUM TO MORTGAGE DATED JUNE 6, 1996 BETWEEN DEMATTIA DEVELOPMENT COMPANY, AS MORTGAGOR AND PECEPTRON, INC., AS MORTGAGEE THIS ADDENDUM is made this 6th day of June, 1996, by and among DeMattia Development Company, a Michigan corporation, with business offices located at 45501 Helm Street, Plymouth, Michigan 48170 (as "Mortgagor"), Plymouth-West Limited Partnership, a Michigan limited partnership, with business offices located at 45501 Helm Street, Plymouth, Michigan 48170 ("Plymouth-West"), and Perceptron, Inc., a Michigan corporation, with business offices located at 23855 Research Drive, Farmington Hills, Michigan 48335-2643 (as "Mortgagee") for purposes of modifying and amending a certain Mortgage between Mortgagor and Mortgagee dated June 6, 1996, as follows: 1. The Mortgage secured the advances and payments made by Mortgagee and the obligation to convey the Premises pursuant to a certain Development and Purchase Agreement between Mortgagor and Mortgagee dated June 6, 1996 (the "Development Agreement") which provides for the development of the Premises and construction of the Perceptron Facility by Mortgagor and the purchase of the Premises and Perceptron Facility by Perceptron upon completion of such construction. "Debt" shall mean the amount of funds advanced by Mortgagee to Mortgagor pursuant to the Development Agreement through the date of closing. All references to the Debt being due, maturity or maturity date shall mean the closing date for the sale and transfer of the Premises and Perceptron Facility to Mortgagee. This Mortgage shall be deemed satisfied and paid in full upon the closing and purchase of the Premises and Perceptron Facility and shall be discharged by Mortgagee at such closing. 2. Paragraph 4 of the Mortgagee shall be modified and amended as follows, notwithstanding any contrary language contained therein: A. In the event of loss or damage due to fire or other casualty, the insurance proceeds shall be used for repair or rebuilding unless Mortgagee has closed the purchase of the Premises and Perceptron Facility, in which event this Mortgage shall be cancelled and the insurance proceeds may be used by Mortgagee for any purpose determined by Mortgagee in its sole discretion. 3. Paragraph 15 of the Mortgagee shall be deleted in its entirety and replaced as follows: A. In the event of a taking of the entire Premises under the power of eminent domain, the Mortgagor shall have the right, at its sole cost and expense, to collect and compromise the condemnation award, with the consent of the Mortgagee, which consent shall not be unreasonably withheld. The Mortgagee shall be entitled to the proceeds of the condemnation award in an amount equal to the Debt and the Mortgagor shall be entitled to all proceeds in excess thereof. Notwithstanding the foregoing, in the event the Mortgagee closes the purchase of the Premises and the Perceptron Facility and pays Mortgagor the full purchase price as set forth in the Development Agreement, Mortgagee shall be entitled to collect and compromise the condemnation award, without the consent of Mortgagor and shall be entitled to the entire condemnation award. In the event of less than an entire taking under the power of eminent domain, Mortgagor and Mortgagee shall mutually determine whether the proceeds of the condemnation award should be used for repair and restoration of the Premises or the Development Agreement terminated and the Debt repaid to Mortgagee. 4. Paragraph 17 of the Mortgage shall be deleted in its entirety and replaced as follows: 17. Events of Default/Acceleration. Upon the occurrence of any of the following events of default ("Events of Default") which are not cured within thirty (30) days of written notice by Mortgagee to Mortgagor, the Mortgagee shall be entitled to exercise its remedies under this Mortgage or as otherwise provided by law: (1) Mortgagor defaults in the terms and conditions of the Development Agreement or the Lease (as defined in the Development Agreement) and the Mortgagee has terminated the Development Agreement and Lease in accordance with their respective terms, or (2) Mortgagor defaults under paragraphs 6, 7, 8, 9, 12, 13, 14 or 16 of this Mortgage and any such default (i) prevents the Mortgagor from completing construction of the Perceptron Facility, and (ii) Mortgagee has terminated the Development Agreement and Lease in accordance with their respective terms. 5. Plymouth-West, an entity related to Mortgagor and the current owner of the Premises joins in the execution of this Mortgage solely for the purpose of acknowledging its agreement to convey the Premises to either Mortgagor or Mortgagee, as is appropriate, when construction of the Perceptron Facility is completed and the terms and conditions of the Development Agreement has been performed by Mortgagor and Mortgagee. Except for such conveyance obligation, Plymouth-West shall have no other obligations, responsibilities or liabilities under the Mortgage or this Addendum. IN WITNESS WHEREOF, the parties have executed this Addendum to Mortgage as of the day and year first set forth above. IN THE PRESENCE OF: DEMATTIA DEVELOPMENT COMPANY, a Michigan corporation /S/ Kelly Matthews By: /S/ Gary D. Roberts - ---------------------- --------------------------- Kelly Matthews Gary. D. Robert President /S/ Edie Easterwood - ---------------------- Edie Easterwood PLYMOUTH-WEST LIMITED PARTNERSHIP, a Michigan limited partnership /S/ Kelly Matthews By: /S/ Robert A. DeMattia - ----------------------- --------------------------- Kelly Matthews Robert A. Demattia General Partner /S/ Edie Easterwood - ----------------------- Edie Easterwood PERCEPTRON, INC., a Michigan corporation By: -------------------------- Its: -------------------------- STATE OF MICHIGAN ) ) SS. COUNTY OF WAYNE ) The foregoing Addendum to Mortgage was acknowledged before me this 6th day of June, 1996 by Gary Roberts, the President of DeMattia Development Company, a Michigan corporation, on behalf of the corporation. /S/ Edwina Sue Easterwood ------------------------- Edwina Sue Easterwood Notary Public, Wayne County, MI My Commission Expires: 9/25/97 STATE OF MICHIGAN ) ) SS. COUNTY OF WAYNE ) The foregoing Addendum to Mortgage was acknowledged before me this 6th day of June, 1996 by Robert DeMattia, the CEO of DeMattia Development Company, a Michigan corporation, on behalf of the corporation. /S/ Edwina Sue Easterwood ------------------------- Edwina Sue Easterwood Notary Public, Wayne County, MI My Commission Expires: 9/25/97 STATE OF MICHIGAN ) ) SS. COUNTY OF WAYNE ) The foregoing Addendum to Mortgage was acknowledged before me this - - --- day of June, 1996 by --------------, the ---------------------------- of Perceptron, Inc., a Michigan corporation, on behalf of the corporation. ------------------------------- Notary Public, Wayne County, MI My Commission Expires: Drafted By and When Recorded Return To: Robert R. Nix II, Esq. Kerr, Russell and Weber, PLC 500 Woodward Avenue, Ste. 2500 Detroit, MI 48226 EXHIBIT A Permitted Encumbrances 1. Building and Use Restrictions, recorded in Liber 23026, page 347, Register No. 86-283643, Wayne County Records. 2. Easements for public utilities are reserved over portions of subject property, as shown on the recorded Plat. 3. Agreement between the Charter Township of Plymouth and Plymouth-West Limited Partnership for the installation and maintenance of a storm sewer system through Metro-West Technology Park Subdivision, as recited in Liber 23432, Page 294, Register No. 87-091446 and in Liber 23257, Page 743, Register o. 87-168902, Wayne County Records. 4. Agreement between the County of Wayne and The Charter Township of Plymouth with respect to public roadways, right of ways, storm sewers and the storm drainage system within Metro-West Technology Park, as recited in Liber 23432, Page 303, Register No. 87-091443 and in Liber 23257, Page 733, Register No. 87-168903, Wayne County Records. EX-11 9 STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE Exhibit 11 PERCEPTRON, INC. AND SUBSIDIARIES EXHIBIT 11, STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Earnings Per Share Earnings Per Share Three Months Ended June 30, Six Months Ended June 30, -------------------------- ------------------------- 1996 1995 1996 1995 -------- ------- -------- ------- A. Net Income $2,093,000 $1,914,000 $3,295,000 $2,647,000 --------- --------- --------- --------- Weighted average number of common shares outstanding 6,891,308 6,470,558 6,823,955 6,460,952 Effect of the issuance of stock options and assumed exercise of stock options at prices which are lower than the average market price of the common shares during the period, using the treasury stock method 785,960 655,581 759,292 640,488 B. Weighted average number of common shares and common equivalent shares for primary earnings per share 7,677,268 7,126,139 7,583,247 7,101,440 ---------- ---------- ---------- ---------- Weighted average number of common shares outstanding 6,891,308 6,470,558 6,823,955 6,460,952 Effect of the issuance of stock options and assumed exercised of stock options at prices which are lower than the market price of the common shares at the end of the period, using the treasury stock method 825,855 724,515 869,909 720,945 C. Weighted average number of common shares and common equivalent shares for fully diluted earnings per share 7,717,163 7,195,073 7,693,864 7,181,897 ---------- ---------- ---------- ---------- Primary earnings per share (A/B) $ .27 $ .27 $ .43 $ .37 ========== ========== ========== ========== Fully diluted earnings per share (A/C) $ .27 $ .27 $ .43 $ .37 ========== ========== ========== ==========
EX-27 10 FINANCIAL DATA SCHEDULE
5 1 6-MOS DEC-31-1996 JUN-30-1996 14,760,000 0 15,720,000 (166,000) 5,541,000 37,106,000 11,084,000 (6,389,000) 41,801,000 7,237,000 0 70,000 0 0 34,494,000 41,801,000 20,725,000 20,725,000 (8,372,000) (7,985,000) 0 0 339,000 4,707,000 (1,412,000) 3,295,000 0 0 0 3,295,000 .43 .43
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