Document:

Blueprint

 

 

EXHIBIT 10.1 

August 1, 2016

 

Mr. Randy Tomlin

6800 Greenhill Ct.

Parker, TX 75002

 

 

Dear Mr. Tomlin,

 

This appointment letter (the "Letter Agreement") shall record all the agreements and understandings between MobileSmith, Inc., a Delaware Corporation (the "Company") and Mr. Randy Tomlin (the “Advisor” or “You”),
in connection with your appointment as an Advisor and Board Member of the Company in a non-executive capacity and for the other purposes listed hereunder.

 

Subject to Company's shareholders’ approval and your execution below, the terms of your engagement with the Company will be as follows:

 

1.

Advisory Services. You will serve as a member of the Company's board of directors and advise the Company's management at reasonable times, on matters related to Company’s actual and planned business, as requested by the Company, including without limitation: (i) corporate strategy, marketing and business development aspects, and product positioning;
(ii) advise the Company's CEO (as defined below) on the strategy and business development of the Company; (iii) use your contacts to connect the Company with high level customers, strategic partners and/or Potential Acquirers (as defined below); and (iv) assist the Company's CEO in closing transactions with Potential Acquirers and other business partners and/or large customers (the tasks listed above are collectively referred to as the “Advisory Services”).

2.

Scope. You will be expected to devote such reasonable time as may be necessary in order to render the Advisory Services to the Company in a good manner. Company's expectation is that you will attend each meeting (either in person or via telephone) of the board of directors/advisors, provided however that you will not be required to arrive in person to more
than one board meeting or meetings outside of the USA per annum. As part of your Advisory Services you will allocate at least one call per month with management of the company. Once a quarter you will be required to attend the Board of Directors meeting either on the phone or in person. 

3.

Fiduciary Duty. You will be subject to all duties, rights and responsibilities under the Company’s articles of incorporation as shall be in force from time to time and under any applicable law.

4.

Options. In consideration for the Advisory Services and subject to the approval of the board of directors of the Company, the Company will grant You Options to purchase 468,860 Shares of the Company (the “Options”) which constitute as of the date hereof 1% of the total shares of the Company on a fully diluted
basis (subject to adjustment to reflect any share dividend, share split or other similar event). The exercise price of the Options shall be USD $1.5 (or market price as of the day of signing this Agreement). The Options shall vest on a quarterly basis over a period of 3 years (0.0833% every three months) beginning on July 1, 2016 (the "Date of Grant").

5.

Acceleration. In the event that following the Date of Grant there shall occur a: (i) consolidation or merger of the Company (where the Company is not the surviving entity or in which the shareholders of the Company immediately prior to the transaction possess less than 50% of the voting power of the surviving entity); or (ii) sale of all or substantially
all of Company's assets or shares, or (iii) consummation of an initial public offering of Company’s securities (each, a “Triggering Event”), then vesting of the Options shall be accelerated, so that upon consummation of such Triggering Event, all Options under Section 4 above shall immediately and automatically vest; provided, however, that this Letter Agreement has not expired or terminated prior thereto. Advisor shall have no more than 30 calendar days
to exercise his Options or he shall forfeit any right and/or Options.

6.

Additional Compensation.

 

     6.1

Monthly retainer of USD 3,333 paid with bank check or wire transfer.

     6.2

In addition to the foregoing, you will introduce the Company to Potential Acquirers (as defined below), for the purpose of consummating a Transaction (as defined below), including without limitation personal involvement and coordination of discussions with Potential Acquirers and follow up with such Potential Acquirers (collectively, referred to as the “Services”).
Prior to approaching any Potential Acquirer, you shall notify the Chief Executive Officer of the Company (the "CEO") of the identity of the Potential Acquirer and shall receive his prior approval.

 

The term "Potential Acquirer" shall mean firm, person, or organization introduced to the Company by the Advisor, during or prior to the term of this Letter Agreement in order to consummate a Triggering Event and added from time to time by mutual consent of the parties to the list set forth
in Exhibit A attached hereto.

The term "Transaction" shall mean the sale of all of the Company's shares or sale of all or substantially all of Company's assets or shares to a Potential Acquirer.

 

     6.3

In the event that during the term of this Letter Agreement and for a tail period of 6 months thereafter (the “Tail Period”) a Transaction is consummated, then the Advisor shall be entitled, subject to the approval of the board of directors of the Company, to an additional 1% of the net proceeds paid by the Potential Acquirer. For avoidance of doubt, if
the Company has consummated a Transaction during the Tail Period, the Advisor shall be entitled also for all accelerated compensation pursuant to Sections 4 and 5 above.

     6.4

During the term of this Agreement, Advisor will help in promoting and marketing all products and services of the Company (“Products and Services”).  Advisor shall promote and market the Products and Services by the means or the activities set forth on Exhibit C, attached hereto and made a part hereof, (“Program”). Advisor shall receive a referral and co-sell commission
(“Commission”) on the net sale of Products and Services to third parties detailed in Exhibit C.  The Commission shall equal to 4% of the total net amount received by the Company for Products and Services, and shall be paid 15 days after the Company collects the payment.  Advisor shall provide details of the opportunity, an introduction to the account, and direct/active assistance during all parts of the sales process as requested by the Company.

 

1

 

 

7.

Each party shall bear its own costs and expenses associated with its responsibilities hereunder. Notwithstanding the above, the Company shall bear any reasonable expenses actually incurred by You in connection with the performance of the Services and/or Advisory Services, provided that such expenses are approved in advance by Company’s CEO in writing and against validly issued receipts. Each party
shall bear its own tax expenses, and without derogating from the above, the Company shall be entitled, subject to any applicable law, to withhold any taxes from any amount transferred under this Letter Agreement. The Advisor will be solely responsible for any tax liability resulting from any payment or grant of shares/options under this Letter Agreement. You are hereby confirming that you had sufficient opportunity to obtain the advice of a tax counsel prior to executing of this Letter Agreement and fully understood
the content of this Section 7.

8.

Your entitlement to the compensation specified in Sections 4-6 (if and when applicable) shall be the sole remuneration, compensation, commission and/or fee in connection with your engagement with the Company.

9.

Either party may terminate this Letter Agreement by providing a 30 days prior written notice to the other party.

10.

You hereby agree and undertake to comply with and observe the terms of the non disclosure undertaking attached hereto as Exhibit B.

11.

Advisor shall not incur or purport to incur any liability or commitment on behalf of the Company or make or give any promises, representations, warranties or guarantees with respect to the Company or the Company's products, except as such are expressly directed by Company in writing.

12.

The Advisor acknowledges that the Company has the exclusive right, interest and title in and to the Company's products and other proprietary information, and shall not, by virtue of this Letter Agreement or otherwise, acquire any proprietary rights whatsoever in or to the products and/or any of the Company's intellectual property rights nor make any representation to having any interest in or to the Company's
products and/or any of the Company's intellectual property rights.

13.

The Advisor's rights and obligations hereunder are personal and may not be assigned or delegated to any consultants, representatives, agents or any other person. This Letter Agreement and the relationship between the Company and the Advisor shall not be construed as a partnership, joint venture, or agreement of employment. The relationship between you and the Company is not of an employer-employee nature,
and you are, and shall be, an independent contractor.

14.

No amendment to this Letter Agreement shall be effective unless it is in writing and signed by the CEO or Chairman of the Company.

15.

If you agree to the terms and provisions set forth above, please sign at the designated space below and return one copy of this Letter Agreement to the undersigned.

 

Very truly yours,

 

 

            Amir Elbaz

            Executive Chairman of the Board 

            MobileSmith, Inc.

 

Acknowledged and agreed:

 

 

/s/ Randy Tomlin

Mr. Randy Tomlin

 

2

 

Exhibit A

 

Potential Acquirer/Investor:

 

1.

 

 

3

 

 

EXHIBIT B - MUTUTAL NON-DISCLOSURE AGREEMENT

 

THIS MUTUTAL NON-DISCLOSURE AGREEMENT (“Agreement”) is made and entered into as of July 1, 2016 between MOBILESMITH, INC., having its principal place of business at 5400 Trinity Rd, suite 280, Raleigh, NC 27607 (“MobileSmith”),
and RANDY TOMLIN having his principal place of business at 6800 Greenhill Ct., Parker, TX 75002 (“Advisor”).  MobileSmith and the Advisor are sometimes referred to individually as a “party” or collectively as the “parties.”

 

WHEREAS, Each party (the “Disclosing Party”) is in possession of proprietary/confidential information and other information which it desires to disclose to the other party (the “Receiving Party”); and

 

WHEREAS, the information provided by Disclosing Party to the Receiving Party is not public knowledge but is confidential and will be disclosed only under the terms, and pursuant to the intents and purposes, of this Agreement.

 

NOW, THEREFORE, the parties agree as follows:

 

1. Receiving Party. The Receiving Party and/or any of its subsidiaries, affiliates, agents, representatives, consultants, directors, employees, attorneys or accountants receiving Confidential Information, as defined below, shall be referred to herein as the (“Receiving
Party”).

 

2. Disclosing Party. The Disclosing Party and/or any of its representatives, directors, associates, employees, attorneys or accountants disclosing Confidential Information, as defined below, shall be referred to herein as the (“Disclosing
Party”).

 

3. Representatives. The parties’ authorized representatives (“Authorized Representatives”) are:

MOBILESMITH:                                            Amir Elbaz

ADVISOR:                                            Randy Tomlin

 

Unless the Receiving Party’s Authorized Representative states otherwise in writing, Confidential Information is only to be received by the Receiving Party’s Authorized Representative (provided, however, that the Receiving Party’s Authorized Representative may disclose such information to the Receiving Party’s directors, employees, advisors, agents,
or representatives in accordance with Section 6(a) below) and unless the Disclosing Party’s Authorized Representative states otherwise in writing, Confidential Information is only to be disclosed by the Disclosing Party’s Authorized Representative.

 

4. Purpose. The purpose of this Agreement is for the parties to explore the possibility of doing business with each other (the “Transaction”), and in connection with the Transaction, the Disclosing Party may disclose to the Receiving Party certain confidential
technical and business information, which the Disclosing Party desires the Receiving Party to treat as proprietary and confidential. The parties hereby agree to treat Confidential Information as described herein.

 

5. Description of Confidential Information.

 

a. For purposes of this Agreement (“Confidential Information”) means any and all business, technical, financial know-how, trade secrets, concepts, drawings, data, forecast, intellectual property and other information that is disclosed by the Disclosing Party to the Receiving
Party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including without limitation documents or electronic devices). 

Without the prior written consent of the Disclosing Party or except as otherwise permitted by this Agreement, the Receiving Party agrees not to disclose any Confidential Information or the fact that Confidential Information has been made available to them or that discussions are taking place concerning the Transaction or any of the terms, conditions or other facts with respect thereto to any other person. Except
where the confidential nature of the Confidential Information is reasonably apparent, prior to disclosure, the Disclosing Party shall mark written documents as confidential, and indicate the confidential nature of oral or visual disclosures.

 

b. Notwithstanding Section 5(a) above, Confidential Information shall not include any information which: was publicly known and made generally available in the public domain prior to the time of disclosure by the Disclosing Party; becomes publicly known and made generally available after disclosure by the Disclosing Party to the Receiving Party, through no action or inaction
of the Receiving Party and without breaching a duty of confidentiality to the Disclosing Party; is already in the possession of the Receiving Party at the time of disclosure by the Disclosing Party as supported by the Receiving Party’s files and records at the time of disclosure; and the Receiving Party is not otherwise under an obligation of confidentiality with respect to such information; is obtained by the Receiving Party from a third party without a breach of that third party's obligations of confidentiality
to the Disclosing Party or any other party; is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information; or is required by law, regulation, supervisory authority, stock exchange request or other applicable judicial or governmental order to be disclosed by the Receiving Party, provided that, to the extent permitted by applicable laws, the Receiving Party gives the Disclosing Party prompt written notice of such requirement prior to such disclosure
and, if so requested in writing, reasonable assistance in obtaining an order protecting the information from public disclosure. Without the prior written consent of the Receiving Party, the Disclosing Party agrees not to disclose to any third party the fact that the Receiving Party or any of its major shareholders or affiliates is discussing or negotiating for or otherwise participating in or associated with the Transaction
as a co-investor or in any other capacity.

 

6. Use of Confidential Information.

 

a. Upon receiving Confidential Information under this Agreement, the Receiving Party has a duty to protect such Confidential Information. The Receiving Party shall not disclose Confidential Information to any third party individual, corporation, or other entity without the prior written consent of the Disclosing Party. The Receiving
Party shall not use any Confidential Information for any purpose except to evaluate and engage in discussions concerning the Transaction and shall limit its disclosure to directors, employees, advisors, agents, or representatives having a need to know such information and who have a duty to maintain its confidentiality; provided, however, that in no circumstances shall Confidential Information be communicated to the Receiving Party’s securities trading personnel or agents.

 

b. Nothing in the Agreement shall prohibit or limit either party’s use of information (including but not limited to, ideas, concepts, know-how, techniques, and methodologies) (i) previously known to it without obligation of confidence, (ii) independently developed by it, (iii) acquired by it from a third party which is not, to its knowledge, under an obligation of confidence
with respect to such information, or (iv) which is or becomes publicly available through no breach of this Agreement, and which does not otherwise constitute Confidential Information.

 

4

 

 

7. Maintenance of Confidentiality. The Receiving Party shall take reasonable measures to protect the secrecy of and avoid any unauthorized use or disclosure of the Confidential Information. Without limiting the foregoing, the Receiving Party shall use at least that degree
of care that it takes to protect its own confidential information of a similar nature, but in no event less than reasonable care, and shall ensure that its employees, agents, consultants and representatives, including any third party, who have access to Confidential Information have been informed of the confidential nature of such information and comply with the restrictions contained herein. The Receiving Party will promptly notify the Disclosing Party in writing of any unauthorized use or disclosure of the
Confidential Information of which it is aware.

 

8. Obligation. While the parties continue their discussions, nothing herein shall obligate either party to proceed to enter into a business relationship with the other party, and each party reserves the right, in its sole discretion, to terminate the discussions contemplated
by this Agreement. Any agreement for any such transaction shall be at the discretion of the parties and shall be evidenced by separate written agreements executed by the parties.

 

9. Return of Materials. At any time at the request of the Disclosing Party, the Receiving Party shall immediately return or cause to be returned to the Disclosing Party the Confidential Information delivered to the Receiving Party and shall not retain any copies or other
reproductions, reports, extracts, notes or memoranda thereof (whether written, electronic, magnetic or otherwise). The Receiving Party shall at any time at the request of the Disclosing Party destroy or have destroyed all reproductions, memoranda, notes, reports, extracts and documents and all documents prepared by or in the possession of the Receiving Party or its Representatives in connection with the Receiving Party's review of the Confidential Information. Furthermore, at the request of the Disclosing Party,
the Receiving Party shall provide a certificate to the Disclosing Party that the terms and conditions of this paragraph have been complied with. The obligation to return or destroy Confidential Information which is in electronic form ("Electronic Data") shall not apply to such data which has been backed up to a central storage system provided that the Receiving Party and any person to whom Electronic Data is disclosed under the terms of this agreement agrees with
the Disclosing Party not to access such data or permit any other person to access it.

 

10. Term. The obligations of the Receiving Party hereunder shall survive until the earliest of (i) such time as all Confidential Information provided by the Disclosing Party hereunder becomes publicly known
and made generally available through no action or inaction of Receiving Party, (ii) the three years anniversary after the date that the Disclosing Party provided the Confidential Information to the Receiving Party or (iii) three years from the termination of discussions among the parties relating to the Transaction. For the avoidance of doubt, notwithstanding the provisions in this Section 10, the obligations of the Receiving Party under
the first sentence of Section 8 above shall be terminated immediately upon the termination of discussions among the parties relating to the Transaction.

 

11. Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the State of New York, without reference to conflict of laws principles thereof. Each of the parties agrees that any legal action or proceeding with respect to this Agreement shall be brought
exclusively in the courts of the State of Delaware or of the United States in the State of Delaware and waives any objection to venue in any such court or to any claim that any such court is an inconvenient forum.

 

12. Remedies. The parties agree that in the event of any violation or threatened violation of this Agreement, the injured party shall be authorized and entitled to obtain preliminary and permanent injunctive relief as well as monetary damages available under applicable
laws arising from such violation, which rights and remedies shall be cumulative and in addition to any other rights or remedies at law or in equity to which the injured party may be entitled.

 

THE DISCLOSING PARTY DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY CONFIDENTIAL INFORMATION PROVIDED UNDER THIS AGREEMENT, BUT SHALL FURNISH SUCH CONFIDENTIAL INFORMATION IN GOOD FAITH. WITHOUT RESTRICTING THE GENERALITY OF THE FOREGOING, THE DISCLOSING PARTY DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL, STATUTORY, EXPRESS OR
IMPLIED WITH RESPECT TO THE CONFIDENTIAL INFORMATION WHICH MAY BE PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. THE DISCLOSING PARTY SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER RESULTING FROM RECEIPT OR USE OF THE CONFIDENTIAL INFORMATION BY THE RECEIVING PARTY.

 

This Agreement shall bind and inure to the benefit of the parties hereto and their successors and assigns. This Agreement is not assignable and states the entire agreement between the parties as to its subject matter and merges and supersedes all previous communications with respect to their obligations of confidentiality and no addition to or modification of this Agreement
will be binding on either party, unless reduced to writing and signed by each party. Any failure to enforce any provision of this Agreement shall not constitute a waiver thereof or of any other provision.

 

13. Miscellaneous. Both parties acknowledge that this Agreement is valid and legally binding, that it has been executed by an authorized representative and each party, and confirms and ratifies the terms and conditions herein.

 

In the event that any provision of this Agreement is determined to be invalid, illegal or unenforceable by a court, the remainder of the Agreement shall remain in full force and effect.

Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent.

 

This Agreement may be executed in counterparts and by facsimile, each of which shall be deemed to be an original, and all of which together shall constitute one and the same Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the date and year first above written.

 

MOBILESMITH, INC.                                                                                      RANDY
TOMLIN

 

 

By: /s/ Amir Elbaz                                                                                                  
By: /s/ Randy Tomlin

Name: Amir Elbaz                                                                                                   Name:
Mr. Randy Tomlin

Title: Executive Chairman of the Board                                                                        
 

 

 

 

5

 

Exhibit C

Program to promote Company Products and Services

 

6Exhibit 10.1

EXECUTION COPY

 

 

STANDSTILL AGREEMENT

 

THIS STANDSTILL AGREEMENT (“Agreement”),
dated the 9th day of August, 2016, is made by and between Perceptron, Inc., a Michigan corporation (“Perceptron”),
Harbert Discovery Fund LP, Harbert Discovery Fund GP, LLC, Harbert Fund Advisors Inc. and Harbert Management Corporation (collectively,
the “Holders”).

 

WHEREAS, Perceptron and Holders have agreed
that it is in their mutual interests to enter into this Agreement as hereinafter described.

 

NOW, THEREFORE, in consideration of the premises
and the representations, warranties, and agreements contained herein, and other good and valuable consideration, the parties hereto
mutually agree as follows:

 

1.Representations and Warranties of Holders. Holders,
on behalf of themselves and their affiliates, hereby represent and warrant to Perceptron as follows:

 

a.Holders have the power and authority to execute, deliver
and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby.

 

b.This Agreement has been duly and validly authorized, executed
and delivered by Holders, constitutes the valid and binding obligation and agreement of Holders and is enforceable against Holders
in accordance with its terms.

 

c.Immediately following the termination of the current section
13 “group” relationship with Moab Partners, L.P., Moab Capital Partners, LLC, and Michael M. Rothenberg, Harbert Discovery
Fund LP, Harbert Discovery Fund GP, LLC, Harbert Fund Advisors, Inc., Harbert Management Corporation, Jack Bryant, Kenan Lucas
and Raymond Harbert will have beneficial ownership of 504,100 shares of common stock of Perceptron. No other affiliate or associate
of Holders beneficially owns any shares or rights to acquire shares of common stock or other voting securities of Perceptron. For
purposes of this Agreement, “affiliate” and “associate” have the meanings set forth in the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).

 

d.Other than as relates to Jack Bryant’s position
with Harbert Discovery Fund GP, LLC, the General Partner of Harbert Discovery Fund, LP, and which compensatory or other payment
arrangement was not materially increased in connection with the Holders’ proposal to add Jack Bryant as a Holders Director,
there are no arrangements, agreements or understandings (whether compensatory or otherwise) between Holders and the Holders Directors
(as defined in Section 5(a)); or other than the current section 13 group relationship, there are no agreements or understandings
(whether compensatory or otherwise) between the Holders and Moab Partners, L.P. and Moab Capital Partners, LLC.

 

e. No event has occurred with
respect to Holders Directors that would require disclosure in a Perceptron report or other document filed pursuant to the Securities
Act of 1933, as amended, or the Exchange Act, pursuant to Item 401(f) of Regulation S-K.

 

     

    

    

f.The Holders Directors are “independent” as
defined in the applicable NASDAQ Marketplace Rule.

 

2.Representations and Warranties of Perceptron. Perceptron
hereby represents and warrants to Holders, as follows:

 

a.Perceptron has the power and authority to execute, deliver
and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby.

 

b.This Agreement has been duly and validly authorized, executed
and delivered by Perceptron, constitutes the valid and binding obligation and agreement of Perceptron and is enforceable against
Perceptron in accordance with its terms.

 

3.Holders’ Prohibited Conduct. During the Covered
Period (as defined in Section 9(a)), Holders will not, and will cause its affiliates and associates not to, directly or indirectly,

 

a.(i) effect, seek, offer or propose (whether publicly or
otherwise and whether or not subject to conditions) to effect or seek or become a “participant” in (as such term is
used in Regulation 14A of the Exchange Act), or (ii) announce any intention to effect, seek, or offer or propose (whether publicly
or otherwise and whether or not subject to conditions) to effect or seek or become a participant in or (iii) in any way knowingly
assist, facilitate or encourage any other person to effect, seek, offer or propose (whether publicly or otherwise and whether or
not subject to conditions) to effect or seek or announce any intention to effect, seek, offer or propose (whether publicly or otherwise
and whether or not subject to conditions) to effect or seek or become a participant in, any “solicitation” of “proxies”
to vote (as such terms are used in Regulation 14A of the Exchange Act) or consents for shareholder action in lieu of a meeting
(whether or not related to the election or removal of directors) with respect to any common stock or other voting securities of
Perceptron or any of its subsidiaries, or the initiation, proposal, encouragement or solicitation of shareholders of Perceptron
for the approval of any shareholder proposals, whether pursuant to Rule 14a-8 of the Exchange Act or otherwise, with respect to
Perceptron, or the solicitation, advisement or influence of any person with respect to the voting of any common stock or other
voting securities of Perceptron;

 

b.make or cause to be made, or in any way encourage any
other person to make or cause to be made, any public statement or announcement, including in any document or report filed with
or furnished to the Securities and Exchange Commission (the “SEC”) or through the press, media, analysts or other persons,
that disparages, defames or slanders Perceptron or its affiliates or any of their respective current or former officers, directors,
or employees;

 

c.initiate any litigation against Perceptron or any members
of its Board of Directors (the “Directors”), officers, employees or agents, except to enforce the terms of this Agreement
or alleging fraud;

 

d.acquire, offer or propose to acquire, or agree to acquire
(except, in any case, by way of stock dividends or other distributions or offerings made available to holders of common stock or
other voting securities of Perceptron generally), directly or indirectly, or retain ownership of any common stock or other voting
securities of Perceptron, if when taken together with the common stock or other voting securities of Perceptron beneficially owned
by all of the Holders and their affiliates and associates, in the aggregate, would constitute more than 9.9% of the then outstanding
common stock or other voting securities of Perceptron; provided that “beneficial ownership” shall have the meaning
ascribed thereto under Section 13(d) of the Exchange Act; this 9.9% threshold refers only to the voting securities beneficially
owned by the Holders and their affiliates and associates in the aggregate and does not include any holdings of Moab Partners, LP.
Moab Capital Partners, LLC or Michael Rothenberg;

 

    	 	2	 

    

    

e.make any proposal, offer or public announcement involving,
or propose to enter into, or assist or encourage any other person with respect to, directly or indirectly, any merger, consolidation,
business combination, tender or exchange offer, sale or purchase of assets, sale or purchase of securities, dissolution, liquidation,
restructuring, recapitalization or similar transactions of or involving Perceptron or take any action which would reasonably be
expected to require Perceptron to make a public announcement regarding any of the foregoing actions; provided that nothing herein
shall limit Holders’ ability to discuss with the Directors through non-public communications (which may, but need not, be
at a meeting of the Perceptron’s Board of Directors (the “Board”)) or to propose as a Director through non-public
communications (which may, but need not, be at a meeting of the Board) that the Board consider any of the foregoing types of transactions,
and to vote as a Director at a meeting of the Board upon any such transaction. Nothing herein shall restrict the ability of the
Holders to make any filings under the Exchange Act or any other securities laws that are legally required to be made, as determined
based on the advice of counsel (which advice need not be a formal opinion of counsel) that is mutually acceptable to Perceptron
and the Holders, as a result of Jack Bryant proposing as a Director through non-public communications that the Board consider any
of the foregoing types of transactions or vote at a meeting of the Board upon any such transaction. Holders shall provide Perceptron
and its counsel with a copy of such filing within a reasonable period (and, in any event, at least one business day) in advance
of filing such filing with the SEC in order to provide Perceptron with a reasonable opportunity to review such materials. Holders
and Perceptron shall mutually agree on the disclosure in such filing relating to such actions by Jack Bryant. Notwithstanding the
foregoing, in the event Holders and Perceptron do not agree on the wording of the filing prior to the due date of the filing, nothing
herein shall prevent Holders from timely filing such filing without incorporating Perceptron’s comments, if they have, in
good faith, taken reasonable efforts to incorporate Perceptron’s comments into the applicable materials;

 

f.Other than the current section 13 “group”
that exists between the Holders, Moab Capital Partners, LLC, Moab Partners, LP, and Michael M. Rothenberg, which will be terminated
promptly following the execution of this Agreement and not reformed during the term of this Agreement, form, join or in any way
participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to common stock
or other voting securities of Perceptron;

 

g.deposit any common stock
or other voting securities of Perceptron in any voting trust or subject any common stock or other voting securities of Perceptron
to any arrangement or agreement with respect to the voting of any common stock or other voting securities of Perceptron, including,
without limitation, lend any common stock or other voting securities of Perceptron to an person or entity for the purpose of allowing
such person or entity to vote such common stock or other voting securities of Perceptron in connection with any shareholder vote
or consent;

 

    	 	3	 

    

    

h. otherwise act, alone or in concert with others, to control
or seek to control or influence or seek to influence the shareholders, management, the Board or policies of Perceptron, other than
through non-public communications with the Directors of Perceptron (which may, but need not, be at a meeting of the Board); provided,
that nothing herein shall limit the Holders Directors from acting in their capacity as Directors of Perceptron in accordance with
their fiduciary duties at any meeting of the Board;

 

i.alone or in concert with others, (i) call or seek to call
any meeting of shareholders, including by written consent, or provide to any third party a proxy, consent or requisition to call
any meeting of shareholders, (ii) seek to have the shareholders authorize or take corporate action by written consent without a
meeting, solicit any consents from shareholders or grant any consent or proxy for a consent to any third party seeking to have
the shareholders authorize or take corporate action by written consent without a meeting, (iii) seek representation on the Board
or its subsidiaries, except as permitted herein, (iv) seek, or vote for or support another party seeking the removal of any member
of the Perceptron Board or any of its subsidiaries except as permitted herein, (v) conduct or seek to conduct a referendum of shareholders,
(vi) make a request for a shareholder list or (vii) make a request for other books and records of Perceptron, except that the Holders
Directors may request such other book and records in their capacity as, and as required to fulfill their fiduciary duties as, directors
of Perceptron.

 

j.take any action in support of or make any proposal
or request that constitutes: (i) advising, controlling, changing or influencing the Board or management of Perceptron, including
any plans or proposals to change the number or term of directors, the removal of any Directors, or to fill any vacancies on the
Board; (ii) any material change in the capitalization, stock repurchase programs and practices or dividend policy of Perceptron;
(iii) any other material change in Perceptron’s management, business or corporate structure; (iv) seeking to have
Perceptron waive or make amendments or modifications to Perceptron’s Articles of Incorporation or Bylaws, or other actions
that may impede or facilitate the acquisition of control of Perceptron by any person; (v) causing a class of securities of
Perceptron to be delisted from, or to cease to be authorized to be quoted on, any securities exchange; or (vi) causing a class
of securities of Perceptron to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange
Act; provided that nothing herein shall limit Holders’ ability to discuss with the Directors through non-public communications
(which may, but need not, be at a meeting of the Board) or to propose as a Director through non-public communications (which may,
but need not, be at a meeting of the Board) that the Board consider any of the foregoing types of transactions, and to vote as
a Director at a meeting of the Board upon any such matter;

 

k. engage in (i) any short sale with respect to common
stock or other voting securities of Perceptron or (ii) any purchase, sale or grant of any option, warrant, convertible security,
stock appreciation right, or other similar right (including, without limitation, any hedging, put or call option or “swap”
transaction) with respect to common stock or other voting securities of Perceptron to the extent that it would cause the Holders
to beneficially own less than five percent of the outstanding shares of common stock or other voting securities of Perceptron,
treating any common stock or other voting securities of Perceptron subject to one or more of the foregoing arrangements not to
be beneficially owned by the Holders;

 

    	 	4	 

    

    

l. make any proposal, or take, cause or seek to cause others
to take, directly or indirectly, any action inconsistent with any of the foregoing regarding any of the foregoing; or

 

m. publicly make or disclose any request to amend, waive
or terminate any provision of this Agreement.

 

4. Holders’ Affirmative Conduct.

 

a.At all meetings of shareholders during the Covered Period,
or in connection with any consent for shareholder action in lieu of a meeting, Holders shall cause all shares of common stock or
other voting securities of Perceptron beneficially owned, directly or indirectly by them, or by any of their affiliates or associates,
to be present for quorum purposes and to be voted for each of Perceptron’s nominees for election to the Board, in favor of
Perceptron’s “say-on-pay” proposal, for the ratification of the appointment of Perceptron’s independent
auditors and, in other matters, in accordance with the recommendation of the Board. If requested by Perceptron, Holders shall consider
but shall not be required to publicly support the election of each of Perceptron’s nominees for election to the Board.

 

b. Holders shall promptly file an amendment to their current
Schedules 13D reporting entry into this Agreement, amending applicable items to conform to their obligations hereunder and appending
or incorporating by reference this Agreement as an exhibit thereto. Holders shall provide Perceptron and its counsel with a copy
of such amendment within a reasonable period (and, in any event, at least one business day) in advance of filing such amendment
with the SEC in order to provide Perceptron with a reasonable opportunity to review and comment on such materials. Holders shall,
in good faith, take into consideration the comments received from Perceptron and its counsel on such amendment and shall take reasonable
efforts to incorporate such comments into the applicable materials. Notwithstanding the foregoing, in the event Holders do not
receive comments from Perceptron and its counsel with sufficient time to consider and/or incorporate such comments prior to the
due date of such filing, nothing herein shall prevent Holders from timely filing such amendment without incorporating Perceptron’s
comments.

 

c.This Agreement shall constitute a voting agreement under
Section 461 of the Michigan Business Corporation Act.

 

d.During the Covered Period, Holders constitute and appoint
W. Richard Marz and David Watza, or either of them, each with the power of substitution, and hereby authorizes them to represent
and vote the shares of common stock or other voting securities of Perceptron beneficially owned by Holders, at any meeting of the
shareholders of Perceptron and to give consent with respect to any action proposed to be taken by consent in lieu of a shareholders
meeting, as provided for under this Agreement, but only to the extent that the Holders fail to vote such shares or voting securities
as required by this Agreement. Holders hereby ratify all that the proxies named herein or substitutes may lawfully do or cause
to be done by virtue hereof and revokes all former proxies. Holders hereby affirm that the irrevocable proxy set forth in this
Section 4 is coupled with an interest. The proxy may not be revoked during the Covered Period. Holders shall cause their affiliates
and associates who, to the actual knowledge of Holders as of the date hereof (without any obligation to inquire or conduct any
investigation), beneficially own shares of common stock or other voting securities of Perceptron to take all actions under this
Section 4(d) as though they were Holders. For the avoidance of doubt, the proxy described in this Section 4(d) shall be revoked
automatically upon the termination of this Agreement and may be revoked by the Holders after the expiration of the Covered Period.

 

    	 	5	 

    

    

5.Directorships.

 

a. Perceptron agrees that subject to the full execution
of this Agreement, (i) upon Perceptron’s receipt of a written reaffirmation from William Taylor, James Ratigan and Jack Bryant
(each a “Holders Director” and collectively the “Holders Directors”) to serve as a Director, each of the
Holders Directors will be immediately appointed to the Board to fill vacancies left by the resignations of Kenneth R. Dabrowski
and Philip J. DeCocco, and the Board will be expanded to seven members; (ii) Jack Bryant will immediately be added as a member
of the Nominating and Corporate Governance Committee; (iii) William Taylor will be immediately added as a member of the Management
Development Committee; (iv) James Ratigan will be immediately added as a member of the Audit Committee; (v) Jack Bryant, William
Taylor, and James Ratigan may also serve on additional existing or newly created Committees of the Board; (vi) the Board size will
be set at seven members and maintained at that Board size; and (vii) upon the appointment of a new President and Chief Executive
Officer, the new President and Chief Executive Officer will be appointed to the Board to fill a vacancy left by the resignation
of either Robert S. Oswald or Terryll R. Smith, who will resign at that time to facilitate such appointment.

 

b. The Nominating and Corporate Governance Committee of
the Board and the Board will nominate, recommend and support each of the Holders Directors for election at each Annual Meeting
of the Shareholders of Perceptron during the Covered Period. Perceptron agrees to solicit proxies for the Holders Directors during
the Covered Period pursuant to this Section 5(b) and include the Holders Directors in its slate of nominees (the “Company
Slate”) for election as directors of Perceptron during the Covered Period in the same manner as it does for all the other
incumbent members of the Company Slate.

 

c. As a condition to the Holders Directors’ nomination
for election to the Board during the Covered Period, Holders and the Holders Directors agree to provide to Perceptron the information
required to be disclosed for directors, candidates for directors and their affiliates and representatives in a proxy statement
or other filings under applicable law or stock exchange rules or listing standards, information in connection with assessing eligibility,
independence and other criteria applicable to directors, and satisfying other compliance requirements and legal obligations in
the same manner as any other director, a fully completed copy of Perceptron’s standard director questionnaire and such other
information as reasonably requested by Perceptron from time to time with respect to Holders and the Holders Directors.

 

    	 	6	 

    

    

d.Each of the Holders Directors agrees that, at all times
while serving as a member of the Board, he will (i) meet all director independence standards of Perceptron, The NASDAQ Stock
Market and the SEC and applicable provisions of the Exchange Act, and the rules and regulations promulgated thereunder, and (ii) be
qualified to serve as a director under the Michigan Business Corporation Act.

 

e. At all times while serving as a Director, each of the
Holders Directors will receive the same benefits of directors’ and officers’ insurance and any indemnity and exculpation
arrangements available generally to the other non-executive Board members and the same compensation and other benefits for his
service as a director as the compensation and other benefits received by the other non-executive Board members for service as a
director.

 

f. Holders shall cause the Holders Directors to comply with
all corporate and Board policies and principles of Perceptron in force from time to time and applicable to Directors of Perceptron
generally, and to provide Perceptron with signed agreements from the Holders Directors to that effect.

 

g. Other than any incentive, compensation or other payment
Jack Bryant may receive in his employment roles with the Holders, which arrangements will not be materially increased in connection
with or as a result of Jack Bryant becoming or serving as a Holders Director, the Holders Directors will not accept any incentive,
compensation or other payment that would influence any of them to recommend that Perceptron enter into a transaction for the sale
of Perceptron or to recommend any other significant initiative affecting Perceptron and its shareholders, but nothing herein will
prevent Holders Directors from recommending such transactions or initiatives as specifically permitted in this Agreement.

 

h. Except as otherwise set forth in this Section 5(h), each
Holders Director shall comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to Directors
(as each may be amended from time to time for all Directors) and will execute the Non-Disclosure Agreement substantially in the
form attached hereto as Exhibit A (the “Confidentiality Agreement”).   Notwithstanding the foregoing,
Jack Bryant may discuss confidential information with officers and managers of the Holders in accordance with and subject to the
terms of the Confidentiality Agreement after the Confidentiality Agreement has been mutually executed and delivered to Perceptron
by Jack Bryant, and, if applicable, officers and managers of the Holders who will receive confidential information, and subject
to full compliance with Perceptron’s insider trading policies.

 

i.Perceptron agrees that if any of the Holders Directors
are unable to serve as a director, resign as a director or are removed as a director, Holders shall have the ability to recommend
a substitute person who satisfies all of the requirements for board candidates set forth in Section 1(f) and 5, and, except for
a substitute for Jack Bryant, is not an affiliate or associate of any shareholder who owns more than five percent of the outstanding
shares of Common Stock of Perceptron, (“Replacement Director”) for approval by the Nominating and Corporate Governance
Committee of the Board, in good faith after exercising its fiduciary duties, which approval shall not be unreasonably withheld.
Upon the recommendation of a Replacement Director nominee by the Nominating and Corporate Governance Committee of the Board, the
Board shall vote on the appointment of such Replacement Director to the Board no later than ten (10) business days after the Nominating
and Corporate Governance Committee recommendation of such Replacement Director; provided, however, that if the Board does not elect
such Replacement Director to the Board, the parties shall continue to follow the procedures of this section 5(i) until a Replacement
Director is elected to the Board.

 

    	 	7	 

    

    

6.Litigation. Perceptron will not, directly or indirectly,
initiate any litigation against Holders, except to enforce the terms of this Agreement or alleging fraud.

 

7.Dispositions. Except as provided below, Holders
may dispose of any shares of Perceptron common stock in any manner and at any time.

 

a.Holders agree that they will not transfer or dispose of
any shares of Perceptron common stock in an open market transaction if, to the actual knowledge of Holders (without any obligation
to inquire or conduct any investigation), the person making such acquisition will beneficially own, together with its affiliates
and any member of a “group” (within the meaning of the Exchange Act) in which such acquirer is a party, immediately
following such acquisition 5% or more of the Perceptron common stock then outstanding.

 

b.Holders
agree that they will not transfer or dispose of any shares of Perceptron common stock in a private transaction if, to the actual
knowledge of Holders (after reasonable inquiry or investigation), the person making such acquisition will beneficially own, together
with its affiliates and any member of a “group” (within the meaning of the Exchange Act) in which such acquirer is
a party, immediately following such acquisition 5% or more of the Perceptron common stock then outstanding. For these purposes,
a representation from the person making such acquisition that it will not beneficially own, together with its affiliates and any
member of a “group” in which such acquirer is a party, immediately following such acquisition, 5% or more of the Perceptron
common stock then outstanding, shall be deemed a reasonable inquiry or investigation.

 

c.The restrictions set forth in Section 7(a) and 7(b) above
shall not apply to any dispositions made in connection with any merger, consolidation, business combination, tender or exchange
offer, sale or purchase of assets, sale or purchase of securities, dissolution, liquidation, restructuring, recapitalization or
similar transactions of or involving Perceptron that is supported by a majority of the Directors (as defined in Section 3(c) above).

 

8. Certification. At any time and from time to time
during the Covered Period (as defined in Section 9(a)), Holders shall, upon request of Perceptron, certify to Perceptron as to
the number of shares of common stock or other voting securities of Perceptron they and their affiliates and associates beneficially
own and that they and their affiliates and associates have voted such common stock and securities as required by this Agreement.

 

9. Termination.

 

a. This Agreement is effective as of the date hereof and
shall remain in full force and effect for the period (the “Covered Period”) commencing on the date hereof and ending
on the earlier of (i) date that is thirty (30) days prior to the deadline for a shareholder to submit nominations at the 2017 Annual
Meeting of the Shareholders of Perceptron (the “2017 Annual Meeting”) in accordance with the provisions set forth in
Perceptron’s Bylaws in effect at such time, or (ii) the termination of this Agreement as set forth in Section 9(b)(ii).

 

    	 	8	 

    

    

b. Unless previously terminated pursuant to Section 9(a),
(i) Sections 5(a)(vi) and (vii) and 5(i) of this Agreement shall terminate, and Holders shall cause Jack Bryant to tender his resignation
from the Board, following the vote of a majority of Directors other than the Holders Directors in favor of such resignation, upon
Holders taking any action that results in Holders having beneficial ownership of less than five percent of the outstanding shares
of common stock of Perceptron (or, while Holders have beneficial ownership of less than five percent of the outstanding shares
of Common Stock of Perceptron, Holders disposing of more than 1% of the outstanding shares of Common Stock of Perceptron in the
aggregate) or (ii) this Agreement shall terminate, and Holders shall cause the Holders Directors to tender their resignations from
the Board, following the vote of a majority of Directors other than the Holders Directors in favor of such termination and resignation,
upon any person becoming the beneficial owner of more than 50% of Perceptron’s voting stock, including any merger, acquisition
or other type of business combination.

 

10. Public Announcement. Perceptron shall promptly
disclose the existence of this Agreement after its execution pursuant to a press release substantially in the form attached hereto
as Exhibit B; however, neither party shall disclose the existence of this Agreement until the press release is issued. Holders
shall not make any public announcement or public statement that is inconsistent with or contrary to the statements made in the
press release.

 

11. Remedies. Perceptron and Holders acknowledge
and agree that a breach or threatened breach by either party may give rise to irreparable injury inadequately compensable in damages,
and accordingly each party shall be entitled to injunctive relief to prevent a breach of the provisions hereof and to enforce specifically
the terms and provisions hereof in any state or federal court having jurisdiction, in addition to any other remedy to which such
aggrieved party may be entitled to at law or in equity.

 

12.Notices. All notice requirements and other communications
shall be deemed given when delivered personally or by email, or on the following business day after being sent by overnight courier
with a nationally recognized courier service such as Federal Express, addressed to Holders and Perceptron as follows:

 

Perceptron:

 

David Watza

Perceptron,
Inc.

47827 Halyard
Drive

Plymouth,
MI 48170

dwatza@perceptron.com

 

    	 	9	 

    

    

With a copy to:

Thomas S. Vaughn.

Dykema Gossett PLLC

Address: 400 Renaissance Center

Detroit, Michigan 48243

Email: tvaughn@dykema.com

 

Holders:

 

Jack Bryant

Harbert Discovery Fund LP

2100 Third Avenue North

Suite 600

Birmingham, AL 35203

jbryant@harbert.net

 

With a copy to:

Kevin McGovern

Harbert Management Corporation

2100 Third Avenue North, Suite 600

Birmingham, AL 35203

kmcgovern@harbert.net

 

13.Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties in connection therewith not referred to herein.

 

14. Counterparts; Facsimile. This Agreement may be
executed in any number of counterparts and by the parties hereto in separate counterparts, and signature pages may be delivered
by facsimile, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

15. Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

16. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Michigan, without regard to the conflict of law principles thereof. The
parties and their respective Representatives: (a) irrevocably and unconditionally consent and submit to the jurisdiction of state
courts located in Michigan and federal courts located in Wayne County, Michigan, for purposes of any action, suit or proceeding
arising out of or relating to this Agreement; (b) agree that service of any process, summons, notice or document by U.S. registered
mail to the address set forth in Section 12 of this Agreement shall be effective service of process for any action, suit or proceeding
brought against them; (c) irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding
arising out of or relating to this Agreement in any state court located in Michigan or federal court located in Wayne County, Michigan;
and (d) irrevocably and unconditionally waive the right to plead or claim, and irrevocably and unconditionally agree not to plead
or claim, that any action, suit or proceeding arising out of or relating to this Agreement that is brought in any state court located
in Michigan or federal court located in Wayne County, Michigan, has been brought in an inconvenient forum.

 

    	 	10	 

    

    

17. Severability. In the event one or more of the
provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained herein.

 

18. Successors and Assigns. This Agreement shall
not be assignable by any of the parties to this Agreement. This Agreement, however, shall be binding on successors of the parties
hereto.

 

19. Survival of Representations, Warranties and Agreements.
All representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement,
but will not survive the termination of this Agreement, provided, however, that any claim that a party may have for a breach of
this Agreement occurring prior to the termination of this Agreement shall survive such termination.

 

20. Amendments. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a written agreement executed by all of the parties hereto.

 

21. Further Action. Each party agrees to execute
any and all documents, and to do and perform any and all acts and things necessary or proper to effectuate or further evidence
the terms and provisions of this Agreement.

 

22. Expenses. Each party agrees to bear its own expenses
in connection with the transactions contemplated hereby.

 

23.Compliance. Holders shall be responsible for any
breach or failure to comply with the terms of this Agreement on the part of any of their affiliates or associates.

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

 

    	 	11	 

    

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

 

	 	PERCEPTRON, INC.	 
	 	 	 	 
	 	By: 	/s/ W. Richard Marz	 
	 	Name: W. Richard Marz	 
	 	Title: Chairman of the Board, President and Chief Executive Officer
	 	 	 	 
	 	 	 	 
	 	HARBERT DISCOVERY FUND, LP	 
	 	By: Harbert Discovery Fund GP, LLC	 
	 	 	 	 
	 	By: 	/s/ Kevin A. McGovern	 
	 	Name:  Kevin A. McGovern	 
	 	Title:  Vice President and Associate General Counsel
	 	 	 	 
	 	 	 	 
	 	HARBERT DISCOVERY FUND, GP, LLC	 
	 	 	 	 
	 	By: 	/s/ Kevin A. McGovern	 
	 	Name:  Kevin A. McGovern	 
	 	Title:  Vice President and Associate General Counsel
	 	 	 	 
	 	 	 	 
	 	HARBERT FUND ADVISORS, INC.	 
	 	 	 	 
	 	By: 	/s/ John W. McCollough	 
	 	Name:  John W. McCollough	 
	 	Title:  Executive Vice President and General Counsel
	 	 	 	 
	 	 	 	 
	 	HARBERT MANAGEMENT CORPORATION
	 	 	 	 
	 	By: 	/s/ John W. McCollough	 
	 	Name:  John W. McCollough	 
	 	Title:  Executive Vice President and General Counsel

 

 

 

 

 

 

    	 	12	 

    

    

EXHIBIT A

 

NON-DISCLOSURE AGREEMENT[1]

 

The undersigned (the “Director”), being [a
director and co-portfolio manager of Harbert Discovery Fund GP, LLC, the General Partner of Harbert Discovery Fund LP (collectively
with Harbert Fund Advisors, Inc. and Harbert Management Corporation (“Harbert”) and] a member of the Board of
Directors of Perceptron, Inc., a Michigan corporation (the “Company”), may be provided certain information and data
in connection with serving as a director of the Company which the Company wishes to keep confidential, including, but not limited
to, information (whether furnished in writing or electronic format or orally) regarding the Company’s governance, board of
directors, management, plans, strategies, business, finances or operations, including information relating to financial statements,
evaluations, plans, programs, customers, plants, equipment and other assets, products, processes, manufacturing, marketing, research
and development, know-how and technology, intellectual property and trade secrets and information which the Company has obtained
from third parties and with respect to which the Company is obligated to maintain confidentiality (collectively, “Confidential
Information”). Except as provided in this Agreement, the Director will not (i) disclose any Confidential Information in any
manner whatsoever, (ii) use any Confidential Information other than in connection with serving as a director of the Company [or
(iii), in the case of Jack Bryant, notwithstanding clause (ii) of this paragraph, use any Confidential Information other than in
connection with decisions by Harbert to purchase or sell common stock of the Company in compliance with the terms of this Agreement],
without securing the prior written consent of the Company.

 

Nothing contained in this Agreement shall prevent the Director from
privately disclosing Confidential Information to (i) officers, directors, accountants and counsel for the Company, (ii) the Director’s
legal counsel (“Director Representative”) who need to know such information for the sole purpose of advising the Director
on his actions as a director of the Company [or (iii) officers, directors, accountants and
legal counsel of Harbert (“Harbert Representatives”);  provided however, that the Director shall not disclose
Confidential Information to the extent such disclosure would be reasonably likely to constitute waiver of the attorney-client privilege
between the Company and its counsel or the Company’s attorney work product privilege. Any Director Representative shall only
be provided Confidential Information by the Director to the extent that they are informed of the confidential nature of the Confidential
Information and agree or are otherwise obligated to keep such information confidential and to restrict the use of such confidential
information in accordance with the terms of this Agreement. Prior to the disclosure of Confidential Information from the Director,
the Director Representatives [or Harbert Representatives] who will receive Confidential
Information shall agree in writing to keep the Confidential Information confidential, to restrict the use of Confidential Information
in accordance with the terms of this Agreement, to be bound by this Agreement on the same terms as the Director and to permit the
Company to enforce such agreement, and a copy of such writing executed by the Director Representatives [or
Harbert Representatives] who will receive Confidential Information shall be delivered to the Company.

 

 

_________________________________

1 NTD: Highlighted text
to be included in Jack Bryant’s agreement only.

    	 	13	 

    

    

 

The term “Confidential Information” shall not include
information which (a) is at the time of disclosure or thereafter becomes generally available to the public other than as a result
of a disclosure by the Director, a Director Representative, [Harbert or Harbert Representatives]
in violation of this Agreement; (b) was, prior to disclosure by the Company, already in the possession of the Director, a Director
Representative, [Harbert or Harbert Representatives], provided that the source of
such information was, to such person’s knowledge after reasonable inquiry, not bound by a confidentiality agreement with
or other contractual, legal or fiduciary obligation of confidentiality to the Company; (c) becomes available to the Director, a
Director Representative [, Harbert or Harbert Representatives] on a non-confidential
basis from a source (other than the Company, a Company affiliate or a Company agent, representative, attorney, advisor, director,
officer or employee (collectively, the “Company Representatives”)) that is, to such person’s knowledge after
reasonable inquiry, not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality
to the Company, and is not, to such person’s knowledge after reasonable inquiry, under an obligation to the Company not to
transmit the information to such person; or (d) was independently developed by the Director, a Director Representative [,
Harbert or Harbert Representatives] without reference to or use of the Confidential Information.

 

The Director is aware, and will advise any Director Representative
[, Harbert or Harbert Representatives] who is informed of the matters that are the
subject of this Agreement, that the Confidential Information may constitute material, non-public information and of the restrictions
imposed by the United States securities laws on the purchase or sale of securities by any person who has received material, non-public
information from a publicly traded company and on the communication of such information to any other person who may purchase or
sell such securities in reliance upon such information. The Director, any Director Representative [,
Harbert or Harbert Representatives] to whom the Director transmits Confidential Information under this Agreement will comply
with all applicable federal and state securities laws in connection with the purchase or sale, directly or indirectly, of securities
of the Company or any other entity of which the Director is provided material non-public information in his capacity as a director
of the Company for as long as the Director, any Director Representative [, Harbert or Harbert
Representatives] are in possession of material non-public information about the Company or such other entity. The Director
and the Company acknowledge that none of the provisions hereto shall in any way limit the Director’s [or
Harbert or Harbert Representative’s] activities in the ordinary course of [his/their]
businesses if such activities will not violate applicable securities laws or the obligations specifically agreed to under this
Agreement.

 

The Director, any Director Representative [,
Harbert or any Harbert Representative] to whom the Director transmits Confidential Information under this Agreement acknowledges
that none of the Company, any Company affiliate or any Company Representative makes any representation or warranty, express or
implied, as to the accuracy or completeness of the Confidential Information. None of the Company, any Company affiliate or any
Company Representative shall have any liability to the Director, any Director Representative [,
Harbert or Harbert Representative] hereunder relating to or resulting from the use of the Confidential Information by the
Director, any Director Representative [, Harbert or Harbert Representative] or any
errors in or omissions from the Confidential Information.

 

    	 	14	 

    

    

In the event that the Director or any Director Representative [,
Harbert or Harbert Representative] is requested in any proceeding or governmental inquiry to disclose any Confidential Information,
the Director will give the Company prompt written notice, to the extent not legally prohibited, of such request so that the Company
may seek an appropriate protective order or waive compliance with the applicable provisions of this Agreement. If the Company seeks
a protective order, the Director [and Harbert ] agree, [and
shall cause Harbert], to provide such cooperation as the Company shall reasonably request and in no event will they oppose
action by the Company to obtain a protective order or other relief to prevent the disclosure of Confidential Information or to
obtain reliable assurance that confidential treatment will be afforded to the Confidential Information. If in the absence of a
protective order, the Director, any Director Representative [, Harbert or Harbert Representatives],
based upon the advice of counsel, is legally required to disclose Confidential Information, or if the Company waives compliance
with this Agreement, such person or entity may disclose without liability under this Agreement such portion of the Confidential
Information which counsel advises that the Director, any Director Representative [, Harbert
or Harbert Representatives] is legally required to disclose if the recipient of such Confidential Information is informed
of this Agreement and the confidential nature of such Confidential Information. For the avoidance of doubt, there shall be no legal
requirement applicable to the Director [, Harbert or Harbert Representatives] to
disclose any Confidential Information solely by virtue of the fact that, absent such disclosure, such parties would be prohibited
from purchasing, selling, or engaging in derivative or other voluntary transactions with respect to the Company’s securities.

 

The Director [and Harbert]
agrees that in the event of a breach of this Agreement, monetary damages alone may be inadequate, and the Company shall be entitled
to seek injunctive or other equitable relief to prevent breaches of this Agreement in addition to any and all other remedies that
may be available to the Company.

 

This Agreement may not be amended except in writing signed by all
the parties hereto. No failure or delay by either party in exercising any right hereunder or any partial exercise thereof shall
operate as a waiver thereof or preclude any other or further exercise of any right hereunder.

 

The provisions of this Agreement relating to confidentiality shall
terminate one (1) year after the Director ceases to be a director of the Company, except that any Confidential Information constituting
trade secrets of the Company (as defined in 18 U.S.C. § 1839(3)) shall be kept confidential in accordance with the obligations
of this Agreement for such longer time as such information constitutes a trade secret of the Company. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or enforceability of any other provision.

 

This Agreement shall be governed by the laws of the state of Michigan,
without giving effect to any conflicts of laws principles thereof, and shall be binding on each party’s successors and assigns.

 

All Confidential Information shall remain the property of the Company
and none of the Director [, Harbert, or any Harbert Representative] shall by virtue
of any disclosure of or use of any Confidential Information acquire any rights with respect thereto, all of which rights (including
all intellectual property rights) shall remain exclusively with the Company. At any time after the date on which the Director is
no longer a director of the Company, upon the request of the Company for any reason, the Director promptly return to the Company
or destroy all hard copies of the Confidential Information and use reasonable best efforts to permanently erase or delete all electronic
copies of the Confidential Information in the possession or control of the Director [, Harbert
or Harbert Representatives]. Notwithstanding anything to the contrary contained in this paragraph, the Director [,
Harbert Representatives and Harbert] shall be permitted to retain such Confidential Information as is necessary to enable
them to comply with any applicable document retention requirements under applicable law or regulation or its internal compliance
procedures, and to retain any computer records and computer files containing any Confidential Information if required pursuant
to their respective current automatic archiving and backup procedures; provided, however, that such retention shall be solely for
legal, regulatory or archival purposes, as the case may be, and the provisions of this Agreement shall continue as to such information
as long as it is retained by such person irrespective of the termination provisions set forth above.

 

    	 	15	 

    

    

The Director agrees to be bound by the terms and conditions of the
Standstill Agreement, dated ________, 2016, by and between the Company, Harbert Discovery Fund LP, Harbert Discovery Fund GP, LLC,
Harbert Fund Advisors, Inc. and Harbert Management Corporation, by executing and delivering to the Company a Joinder Agreement
in the form attached to this Agreement as Exhibit A.

 

Acceptance of the above terms shall be indicated by having this
letter countersigned by the Director [and Harbert].

 

	 	Sincerely,
	 	PERCEPTRON, INC.
	 	 
	 	By:_____________________________
	 	Name: __________________________
	 	Title: ___________________________
	 	 
	 	Received and consented to this ___ day of _______________, 2016 
	 	______________________________
	 	[Director]
	 	 
	 	[ACKNOWLEDGED AND AGREED:
	 	HARBERT DISCOVERY FUND LP
	 	 
	 	By:
    _____________________________
	 	Name:
    ___________________________
	 	Title:
    ____________________________
	 	 

 

    	 	16	 

    

    

	 	 
	 	HARBERT DISCOVERY FUND GP, LLC
	 	 
	 	By:
    _____________________________
	 	Name:
    ___________________________
	 	Title:
    ____________________________
	 	 
	 	HARBERT FUND ADVISORS, INC. 
	 	 
	 	By:
    _____________________________
	 	Name:
    ___________________________
	 	Title:
    ____________________________ 
	 	 
	 	 
	 	HARBERT MANAGEMENT CORPORATION 
	 	 
	 	By:
    _____________________________
	 	Name:
    ___________________________
	 	Title:
    ____________________________]

 

 

 

 

 

    	 	17	 

    

    

 

Exhibit A

 

Form of Joinder Agreement

 

JOINDER AGREEMENT

 

This Joinder Agreement (the “Agreement”),
dated as of _____________________, is delivered pursuant to the Non-Disclosure Agreement (the “Confidentiality Agreement”),
dated ________________, 2016, by and between Perceptron, Inc. (the “Company”) [,
Harbert Discovery Fund LP (“Harbert”)] and the undersigned. Capitalized terms not otherwise defined herein have
the meaning set forth in the Standstill Agreement (the “Standstill Agreement”), dated _____________, 2016, by and between
the Company, Harbert Discovery Fund LP, Harbert Discovery Fund GP, LLC, Harbert Fund Advisors, Inc., and Harbert Management Corporation,
a copy of which is attached to this Agreement as Exhibit A.

 

The undersigned wishes to be elected as a Director.
As a condition precedent to being elected as Director, the undersigned is required to become a party to the Standstill Agreement.

 

By executing and delivering this Agreement,
the undersigned hereby becomes a party to the Standstill Agreement and shall be fully bound by, and subject to, all of the covenants,
terms and conditions of the Standstill Agreement as though an original party to such agreement and shall be deemed a Holders Director
for all purposes of such agreement.

 

 

 

 

 

 

	 	 	 
	 	[Name]	 

 

 

 

 

 

 

 

 

 

 

    	 	18	 

    

    

 

EXHIBIT B

 

PRESS RELEASE

 

[ATTACHED]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	19	 

    

    

Perceptron Appoints William C. Taylor, James A. Ratigan and John F. Bryant to the Board of Directors

PLYMOUTH, Mich., Aug.  09, 2016  (GLOBE NEWSWIRE) -- Perceptron, Inc. (NASDAQ:PRCP) today announced that William C. Taylor, James A. Ratigan and John F. Bryant have joined the Company’s Board of Directors.  The new directors fill vacancies left by the resignations of Kenneth R. Dabrowski and Philip J. DeCocco and the expansion of the Board from six to seven members.

“We are grateful to Ken and Phil for their many years of service to Perceptron and thank them for their contributions as members of our Board,” stated W. Richard Marz, Chairman of the Board, President and CEO.  “At the same time, we welcome Bill, Jim and Jack to the Board and look forward to working with them as we continue to build value for our shareholders.”

In connection with these appointments, on August 9, 2016, the Company entered into a Standstill Agreement with Harbert Discovery Fund, LP and certain of Harbert’s affiliates and a Voting Agreement with Moab Partners, L.P. and Moab Capital Partners, LLC, copies of which were filed by the Company with the Securities and Exchange Commission as exhibits to the Company’s Form 8-K.

William C. Taylor
Mr. Taylor has served as President of the Economic Development Partnership of Alabama (the “EDPA”), a private, statewide organization that works to attract and retain business and industry and address other critical issues affecting economic development such as workforce development, since 2009.  Prior to joining the EDPA, Mr. Taylor worked for Mercedes-Benz U.S. International, Inc., where he served as President and CEO from 1999 to 2009 and Vice President Operations from 1993 to 1999.  Prior to joining Mercedes-Benz, Mr. Taylor served as the Vice President Manufacturing of Toyota Motor Manufacturing Canada from 1987 to 1993 and held various roles with Ford Motor Company Canada from 1969 to 1987.  Mr. Taylor holds a B.A in Business Administration from the University of Western Ontario, Canada.

James A. Ratigan
Mr. Ratigan has served as an Adjunct Professor of Business Administration at Delaware Valley University since 2015.  Prior to that, he served as Chief Financial Officer of Nitric BioTherapeutics, Inc., a privately held specialty pharmaceutical, drug delivery systems and biotechnology company, from 2005 to 2014.  From August 2003 to April 2006, Mr. Ratigan was an independent consultant providing consultative services to two specialty pharmaceutical companies, a biotechnology company and a private equity firm.  Mr. Ratigan was Executive Vice President, Chief Financial Officer and Secretary of Orapharma, Inc. from June 1997 to August 2003, a publicly-held specialty pharmaceutical company that was acquired by Johnson and Johnson, Inc.  Mr. Ratigan was a director of Perceptron from 1989 to 1996 and from 2003 to 2013. He served as Perceptron’s Chief Operating Officer from May 1994 to April 1996 and Chief Financial Officer from December 1993 to June 1996. Mr. Ratigan holds a B.S. in Accounting and Finance from LaSalle University.

John F. Bryant
Mr. Bryant has been a Director and Co-Portfolio Manager of the Harbert Discovery Fund GP, LLC, an investment management firm that serves as the General Partner of Harbert Discovery Fund, LP, since 2014.  Prior to joining Harbert, from 2007 until 2012, Mr. Bryant served as Vice President of BlackRock, Inc., a multinational investment corporation, where he focused on developing, seeding, and launching new proprietary investment funds.  Mr. Bryant holds an MBA from the Darden School of Business at the University of Virginia and a B.A in Economics from The University of the South.

About Perceptron® 
Perceptron (NASDAQ:PRCP) supplies a comprehensive range of automated industrial metrology products and solutions to manufacturing organizations for dimensional gauging, dimensional inspection and 3D scanning. Products include 3D machine vision solutions, robot guidance, coordinate measuring machines, laser scanning, and advanced analysis software. Automotive, aerospace and other manufacturing companies globally rely on Perceptron's metrology solutions to assist in managing their complex manufacturing processes to improve quality, shorten product launch times and reduce costs.  Headquartered in Plymouth, Michigan, USA, Perceptron has subsidiary operations in Brazil, China, Czech Republic, France, Germany, India, Italy, Japan, Singapore, Slovakia, Spain and the UK.  For more information, please visit www.perceptron.com.

Safe Harbor Statement
Certain statements in this press release may be "forward-looking statements" within the meaning of the Securities Exchange Act of 1934. Whenever possible, we have identified these forward-looking statements by words such as "will," "should," "believes," "expects," "anticipates," "estimates," "prospects," "outlook" or similar expressions. We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. While we believe that our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which speak only as of the date made. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the risks and uncertainties discussed from time to time in our periodic reports filed with the Securities and Exchange Commission, including those listed in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for fiscal 2015. Except as required by applicable law, we do not undertake, and expressly disclaim, any obligation to publicly update or alter our statements whether as a result of new information, events or circumstances occurring after the date of this report or otherwise.

Contact:

Bob Burton
Lambert, Edwards & Associates 
investors@perceptron.com 
(616) 233-0500

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