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
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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)
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]
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
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
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
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:
---------------------------
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
=========
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.
Exhibit 11
PERCEPTRON, INC. AND SUBSIDIARIES
EXHIBIT 11, STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Earnings Per Share Earnings Per Share
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- -------------------------
1996 1995 1996 1995
-------- ------- -------- -------
<S> <C> <C> <C> <C>
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
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 14,760,000
<SECURITIES> 0
<RECEIVABLES> 15,720,000
<ALLOWANCES> (166,000)
<INVENTORY> 5,541,000
<CURRENT-ASSETS> 37,106,000
<PP&E> 11,084,000
<DEPRECIATION> (6,389,000)
<TOTAL-ASSETS> 41,801,000
<CURRENT-LIABILITIES> 7,237,000
<BONDS> 0
<COMMON> 70,000
0
0
<OTHER-SE> 34,494,000
<TOTAL-LIABILITY-AND-EQUITY> 41,801,000
<SALES> 20,725,000
<TOTAL-REVENUES> 20,725,000
<CGS> (8,372,000)
<TOTAL-COSTS> (7,985,000)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 339,000
<INCOME-PRETAX> 4,707,000
<INCOME-TAX> (1,412,000)
<INCOME-CONTINUING> 3,295,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,295,000
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
