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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____ )*
General Automation, Inc.
(Name of Issuer)
Common Stock, $0.10 par value
(Title of Class of Securities)
369032-10-7
(CUSIP Number)
Glenford J. Myers, President
RadiSys Corporation
RadiSys CPD, Inc.
5445 NE Dawson Creek Drive
Hillsboro, Oregon 97124
(503) 615-1100
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 30, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 369032-10-7 Page 2 of 8 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RadiSys Corporation
93-0945232
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
-------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
- --------------------------------------------------------------------------------
| 7 SOLE POWER TO DIRECT VOTE
|
| 1,808,433**
NUMBER OF |----------------------------------------------------------------
SHARES | 8 SHARED VOTING POWER
BENEFICIALLY |
OWNED BY | 0
EACH |----------------------------------------------------------------
REPORTING | 9 SOLE POWER TO DIRECT DISPOSITION
PERSON |
WITH | 1,808,433**
|----------------------------------------------------------------
| 10 SHARED DISPOSITIVE POWER
|
| 0
|----------------------------------------------------------------
- ---------------|----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,808,433**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.6%**
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
**Reporting Person disclaims beneficial ownership of all shares, except to the
extent of its pecuniary interest therein.
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 369032-10-7 Page 3 of 8 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RadiSys CPD, Inc.
04-2738973
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
| 7 SOLE POWER TO DIRECT VOTE
|
| 1,808,433
NUMBER OF |----------------------------------------------------------------
SHARES | 8 SHARED VOTING POWER
BENEFICIALLY |
OWNED BY | 0
EACH |----------------------------------------------------------------
REPORTING | 9 SOLE POWER TO DIRECT DISPOSITION
PERSON |
WITH | 1,808,433
|----------------------------------------------------------------
| 10 SHARED DISPOSITIVE POWER
|
| 0
|----------------------------------------------------------------
- ---------------|----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,808,433
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 4 of 8 Pages
Item 1. Security and Issuer
This statement relates to the common stock, $0.10 par value ("Common
Stock"), of General Automation, Inc., a corporation organized under the laws of
Delaware ("GA"). GA has its principal executive offices at 17731 Mitchell North,
Irvine, California 92614.
Item 2. Identity and Background
RADISYS CORPORATION. This Statement is filed by RadiSys Corporation, a
corporation organized under the laws of Oregon ("RadiSys"), whose business
address is 5445 NE Dawson Creek Drive, Hillsboro, Oregon 97124. RadiSys'
principal business is designing and manufacturing embedded computer solutions
used by original equipment manufacturers for products in the telecommunications,
manufacturing automation, medical devices, transportation, gaming and
retail/office automation industries. During the past five years, RadiSys has not
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), nor has it been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Set forth below are the names, principal occupations and business
addresses of the executive officers and directors of RadiSys. Each executive
officer and director is a citizen of the United States of America, except for
Jean-Claude Peterschmitt, who is a citizen of France. During the past five
years, none of the executive officers or directors has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Executive Officers of RadiSys:
<TABLE>
Name Position with RadiSys
---- ---------------------
<S> <C>
Dr. Glenford J. Myers Chairman of the Board, President and Chief Executive Officer
Stuart F. Cohen Vice President of Marketing
Ronald A. Dilbeck Vice President and General Manager, Automation Equipment Division
Douglas D. Goodyear Senior Vice President of Sales
Arif Kareem Vice President and General Manager, Telecommunications Division
Stephen F. Loughlin Vice President of Finance and Administration and Chief Financial Officer
John Sonneborn Vice President of Manufacturing
Diane M. Williams Vice President of Human Resources
</TABLE>
The business address of each executive officer is 5445 NE Dawson Creek Drive,
Hillsboro, Oregon 97124.
<PAGE>
Page 5 of 8 Pages
Directors of RadiSys:
<TABLE>
Name Principal Occupation, Address of Employer and Business Address
---- --------------------------------------------------------------
of Director
-----------
<S> <C>
Dr. Glenford J. Myers* Chairman of the Board, President and Chief Executive Officer
RadiSys Corporation
James F. Dalton Vice President and General Counsel, Tektronix, Inc.
MS: 63-862
26600 SW Parkway
PO Box 1000
Wilsonville, OR 97070-1000
Richard J. Faubert President and CEO, SpeedFam Corporation
305 North 54th Street
Chandler, AZ 85226-2416
C. Scott Gibson President, Gibson Enterprises
1900 Twin Points Road
Lake Oswego, OR 97034
Dr. William W. Lattin Executive Vice President, Synopsys, Inc.
19500 NW Gibbs Drive
Beaverton, OR 97006
Jean-Pierre D. Patkay Vice President of Worldwide Manufacturing, 3Com Corp.
5400 Bayfront Plaza
Santa Clara, CA 95052-8145
Jean-Claude Peterschmitt* Retired General Manager, Vice President, Europe and Chairman of the
European Board of Directors, Digital Equipment Corporation
</TABLE>
* Business address is 5445 NE Dawson Creek Drive, Hillsboro, OR 97124
RADISYS CPD, INC. This Statement is filed by RadiSys CPD, Inc., a
corporation organized under the laws of Delaware, a wholly owned subsidiary of
RadiSys ("RadiSys CPD") formerly known as Sequoia Systems, Inc. and also
formerly known as Texas Micro Inc., whose business address is 5445 NE Dawson
Creek Drive, Hillsboro, Oregon 97124. RadiSys CPD's principal business is
designing, manufacturing and marketing embedded computer solutions. During the
past five years, RadiSys CPD has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), nor has it been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Set forth below are the names, principal occupations and business
addresses of the executive officers and directors of RadiSys CPD. Each executive
officer and director is a citizen of the United States of America. During the
past five years, none of the executive officers or directors has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors),
or been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
<PAGE>
Page 6 of 8 Pages
Executive Officers and Directors of RadiSys CPD:
Name Position with RadiSys CPD
---- -------------------------
<TABLE>
<S> <C>
Dr. Glenford J. Myers Chairman of the Board, President and Chief Executive Officer
Stephen F. Loughlin Treasurer, Chief Financial Officer and Director
Douglas D. Goodyear Secretary
John C. Leonardo Vice President and General Manager
</TABLE>
The business address of each executive officer and director is 5445 NE Dawson
Creek Drive, Hillsboro, Oregon 97124.
Item 3. Source and Amount of Funds or Other Consideration
See Item 4 below.
Item 4. Purpose of Transaction
On September 30, 1999, RadiSys CPD and GA entered into a
Letter Agreement, a copy of which is attached hereto as Exhibit A and
incorporated by reference herein. Pursuant to the terms of the Letter Agreement,
to satisfy indebtedness it owes to RadiSys CPD, GA (a) made a cash payment of
$1.5 million to RadiSys CPD on September 30, 1999, (b) issued one promissory
note to RadiSys CPD evidencing a principal amount of $250,000 and a second
promissory note evidencing a principal amount of $500,000 (the "$500,000 Note")
and (c) agreed to issue 1,133,333 shares of GA's common stock to RadiSys CPD. GA
must issue the shares of its common stock to RadiSys CPD on or before October
30, 1999.
If GA is unable to obtain financing before January 28, 2000,
it may, in its sole discretion, elect to satisfy its entire obligation under the
$500,000 Note by executing and delivering to RadiSys CPD or any other holder of
the $500,000 Note (1) a secured convertible promissory note (the "Secured Note")
with an original principal amount equal to the sum of the then outstanding
principal balance of the $500,000 Note and all accrued but unpaid interest then
owed on the $500,000 Note and (2) a warrant to purchase, for $0.45 per share,
shares of GA common stock equal to (a) the original principal amount of the
Secured Note divided by (b) $8.00. Interest accrues on the $500,000 Note at the
rate of 10% per annum. The outstanding balance on the Secured Note may be
converted into shares of GA common stock at a rate equal to $0.73 per share. A
copy of the $500,000 Note is included as an exhibit to this statement and is
incorporated herein by reference.
The foregoing summaries of the Letter Agreement and the
$500,000 Note are qualified in their entirety by reference to the full
agreements which are filed as exhibits.
Other than the transactions contemplated by the Letter
Agreement, neither RadiSys nor RadiSys CPD has any plans or proposals required
to be disclosed in this Item 4.
Item 5. Interest in Securities of the Issuer
(a) - (c) By reason of the Letter Agreement, RadiSys CPD
directly beneficially owns 1,133,333 shares (the "Current Shares") of GA common
stock. RadiSys CPD owned 675,100 shares, which were acquired as described in
Sequoia Systems, Inc.'s Schedule 13D filed as of October 11, 1996 (the "Prior
Shares"), before acquiring the Current Shares, bringing its present total
beneficial ownership to 1,808,433 shares of GA common stock (the "Shares"). The
Shares represent approximately 15.6% of the outstanding shares of GA common
stock. RadiSys CPD has sole power to
<PAGE>
Page 7 of 8 Pages
dispose of and vote the Shares. Except as described in this statement, neither
RadiSys, RadiSys CPD nor, to the best knowledge of RadiSys and RadiSys CPD, any
of the persons listed in Item 2 above beneficially owns any shares of GA common
stock. Except as described in this statement, neither RadiSys, RadiSys CPD nor,
to the best of its knowledge, any of the persons listed in Item 2 above has
effected any transactions in GA common stock during the past 60 days.
Because RadiSys owns 100% of the outstanding shares of RadiSys CPD
common stock, it may be deemed to beneficially own the Shares. RadiSys has sole
power to direct the vote and disposition of the Shares. RadiSys disclaims
beneficial ownership of the Shares except to the extent of its pecuniary
interest therein.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
See Item 4 with respect to the Letter Agreement, the $500,000 Note,
the Secured Note and the form of warrant.
In addition, GA and RadiSys CPD have entered into a Registration
Rights Agreement, dated September 30, 1999 (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement, RadiSys CPD is
entitled to include the shares issued to it under the Letter Agreement (the
"Registrable Shares") in certain registrations initiated by GA under the
Securities Act of 1933, as amended (the "Securities Act"). GA is obligated to
pay the expenses of any such registration, with certain exceptions. The
Registration Rights Agreement terminates at such time as RadiSys CPD ceases to
hold any Registrable Shares and GA has no obligation to issue any further
Registrable Shares to RadiSys CPD pursuant to the Letter Agreement. The
Registration Rights Agreement includes certain limitations on the rights of
Holders thereunder and contains other customary provisions. The Registration
Rights Agreement is filed as an exhibit to this Schedule 13D and is incorporated
herein by reference.
Item 7. Material to be Filed as Exhibits
The following documents are filed as exhibits:
A Letter Agreement, dated September 30, 1999 by and between RadiSys
CPD, Inc. (formerly Sequoia Systems, Inc.) and General
Automation, Inc.
B Convertible Promissory Note dated September 30, 1999 issued by
General Automation, Inc. to RadiSys CPD, Inc. in the principal
amount of $500,000.
C Registration Rights Agreement, dated September 30, 1999 by and
between RadiSys CPD, Inc. (formerly Sequoia Systems, Inc.) and
General Automation, Inc.
<PAGE>
Page 8 of 8 Pages
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: October 12, 1999 RADISYS CORPORATION
RADISYS CPD, INC.
By: STEPHEN F. LOUGHLIN
--------------------------------
Stephen F. Loughlin
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
A Letter Agreement, dated September 30, 1999 by and between
RadiSys CPD, Inc. (formerly Sequoia Systems, Inc.) and
General Automation, Inc.
B Convertible Promissory Note dated September 30, 1999 issued
by General Automation, Inc. to RadiSys CPD, Inc. in the
principal amount of $500,000.
C Registration Rights Agreement, dated September 30, 1999 by
and between RadiSys CPD, Inc. (formerly Sequoia Systems,
Inc.) and General Automation, Inc.
September 30, 1999
RadiSys CPD, Inc.
5959 Corporate Drive
Houston, Texas 77036
Gentlemen:
This letter sets forth the agreement which has been reached concerning the
satisfaction of all of the indebtedness of General Automation, Inc., a Delaware
corporation ("GA"), to RadiSys CPD, Inc., a Delaware corporation formerly known
as Sequoia Systems, Inc. and also formerly known as Texas Micro, Inc.
("RadiSys"), and the release by RadiSys of all other obligations owed to it by
GA in exchange for (a) a cash payment by GA to RadiSys; (b) the issuance of two
promissory notes by GA to RadiSys; and (c) the issuance of shares of GA's common
stock to RadiSys. That agreement is as follows:
1. Payment by GA. Concurrently with the execution of this letter agreement,
GA will pay to RadiSys the amount of $1,500,000, by wire transfer to an account
designated by RadiSys (the "Cash Payment").
2. Issuance of Promissory Notes. Concurrently with the execution of this
letter agreement, GA will execute and deliver to RadiSys two Promissory Notes,
one in the original principal amount of $250,000 in the form of Exhibit A
attached to this letter agreement (the "First Note"), and one in the original
principal amount of $500,000 in the form of Exhibit B attached to this letter
agreement (the "Second Note"). The First Note and the Second Note are at times
referred to collectively in this letter agreement as the "Notes").
3. Issuance of Stock. GA shall issue to RadiSys 1,133,333 shares of GA's
common stock (the "Shares") as soon as is reasonably practicable after the date
of this letter agreement, but in any event within thirty (30) days after the
date of this letter agreement, GA will cause its transfer agent to issue and
deliver to RadiSys a stock certificate, standing in the name of RadiSys,
representing the Shares.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 2
4. Registration Rights Agreement. Concurrently with the execution and
delivery of this letter agreement, GA and RadiSys will execute and deliver a
Registration Rights Agreement pertaining to the Shares in the form of Exhibit C
attached to this letter agreement.
5. Satisfaction of GA's Obligations Under the Second Note. The Second Note
provides that it is due and payable in full upon the earlier to occur of (i) the
date which is one hundred twenty (120) days following the date of the Second
Note (the "Maturity Date"); or (ii) the third business day following the closing
of a loan to GA pursuant to that certain Loan Agreement (the "Loan Agreement")
of even date herewith between GA and Pacific Mezzanine Fund LLP ("PMF"), which
loan yields net proceeds to GA of not less than One Million Dollars
($1,000,000), excluding the initial $3,150,000 loaned by PMF to the Company
pursuant to the Loan Agreement (a "Qualifying Financing"). (A copy of the Loan
Agreement is attached to this letter agreement as Exhibit D.) The Second Note
also provides, however, that in the event that a Qualifying Financing has not
been consummated on or before the Maturity Date, GA may, in its sole discretion,
elect to satisfy GA's entire obligation under the Second Note by executing and
delivering to the holder of the Second Note (the "Holder") a Secured Convertible
Promissory Note with an original principal amount equal to the sum of the then
outstanding principal balance of the Second Note and all accrued but unpaid
interest then owed on the Second Note. If GA elects to satisfy its obligations
under the Second Note in the manner referred to in the immediately preceding
sentence, it shall send written notification of that election to the Holder (the
"Notice"). Within ten (10) business days following the Holder's receipt of the
Notice:
(a) GA shall execute and deliver to the Holder, against Holder's
execution and delivery to GA of the documents and instruments referred to in
Section 5(b) below, the following:
(i) A Secured Convertible Promissory Note in substantially the
form of Exhibit E attached to this letter agreement (the "Secured Note"), in an
original principal amount equal to the sum of the then outstanding principal
balance of the Second Note and all accrued but unpaid interest then owed on the
Second Note (the conversion rate on which Secured Convertible Promissory Note
shall be the same as the "Conversion Rate" specified in Section 2.08 of the Loan
Agreement); and
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 3
(ii) A Warrant in substantially the form of Exhibit F attached to
this letter agreement, covering a number of shares (rounded to the nearest whole
share) calculated by dividing the original principal amount of the Secured Note
by $8.00; and
(iii) Such documents as may reasonably be requested by the Holder
for the purpose of making the Holder a party to the Loan Agreement as a "Lender"
thereunder (provided, however, that (A) in no event shall RadiSys become
obligated thereby to make any loan or advance to GA, other than the loan
evidenced by the Secured Note in the original principal amount specified in
Section 5(a)(i) above, and (B) notwithstanding Section 3.01(j) of the Loan
Agreement, no opinion of GA's counsel will be delivered to RadiSys in connection
with the transactions contemplated by this Section 5); and
(iv) Such documents as may reasonably be requested by the Holder
for the purpose of making the Holder a party to, and a "Secured Party" under,
that certain Security Agreement of even date herewith entered into by PMF and
GA, a copy of which is attached to this letter agreement as Exhibit G; and
(v) Such documents as may reasonably be requested by the Holder
for the purpose of making the Holder a party to, and an "Investor" under, that
certain Investors' Rights Agreement of even date herewith entered into by PMF
and GA, a copy of which is attached to this letter agreement as Exhibit H; and
(vi) Such other documents and instruments (including but not
limited to amendments to the documents referred to in this Section 5(a)) as may
reasonably be requested by the Holder for the purpose of effectuating the
purposes and intent of this Section 5.
(b) The Holder shall deliver to GA for cancellation the original of
the Second Note, and shall also execute and deliver to GA, against GA's
execution and delivery to the Holder of the documents and instruments referred
to in Section 5(a) above, the following:
(i) A Subordination Agreement in favor of each of the Company's
Senior Lenders (as defined in the Loan Agreement), in substantially the form of
Exhibit I attached to this letter agreement; and
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 4
(ii) An Intercreditor Agreement in substantially the form of
Exhibit J attached to this letter agreement; and
(iii) Such other documents and instruments (including but not
limited to amendments to the documents referred to in this Section 5(b) and
Section 5(a) above) as may reasonably be requested by GA for the purpose of
effectuating the purposes and intent of this Section 5.
6. Investment Representations of RadiSys. RadiSys understands that the
Shares will be issued to RadiSys without registration under the Securities Act
of 1933, as amended (the "Act"), and without qualification or registration under
the applicable securities laws of any state (the "State Laws") in reliance on
exemptions from such registration and qualification for non-public offerings.
RadiSys further understands that GA is relying on the representations and
warranties set forth in this letter agreement in determining that such
exemptions are available.
RadiSys hereby represents and warrants to GA as follows:
(a) Investment Intent. The acquisition of the Shares is for investment
for RadiSys' own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof or interest therein. RadiSys will not
offer to sell or sell the Shares or any portion thereof or interest therein to
others except in compliance with the Act and the State Laws. The undersigned
does not have any present intention of distributing or selling any of the
Shares.
(b) Lack of Registration; Legend on Certificates. RadiSys has been
advised by GA as to the circumstances under which RadiSys is required to take
and hold the Shares, including, without limitation, the following:
(i) The Shares have not been registered with the Securities and
Exchange Commission (the "SEC") under the Act and must be held for investment
unless subsequently registered under the Act or an exemption from registration
is available.
(ii) Any and all certificates representing the Shares and any and
all replacements thereof shall bear and be subject to a legend in substantially
the following form affecting the transferability of the Shares:
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 5
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
ACT OF 1933 (THE "FEDERAL ACT") OR QUALIFIED UNDER THE SECURITIES LAWS
OF ANY STATE, IN RELIANCE ON EXEMPTIONS FROM SUCH REGISTRATION AND
QUALIFICATION FOR NONPUBLIC OFFERINGS. ACCORDINGLY, THE SALE, TRANSFER
OR OTHER DISPOSITION OF SUCH SECURITIES OR ANY INTEREST THEREIN MAY
NOT BE ACCOMPLISHED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE FEDERAL ACT AND QUALIFICATION UNDER APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED.
(c) Documents Reviewed by RadiSys. RadiSys has reviewed the following
documents pertaining to GA (the "GA SEC Reports"):
(i) GA's Report on Form 10-K for the fiscal year ended September
30, 1998, as filed with the SEC; and
(ii) GA's Proxy Statement relating to the Annual Meeting of GA's
shareholders held on March 25, 1999; and
(iii) GA's Reports on Form 10-Q for the quarters ended December
31, 1998, March 31, 1999 and June 30, 1999, as filed with the
SEC; and
(iv) GA's Reports on Form 8-K filed with the SEC on February 19,
1999 and July 14, 1999, respectively.
(d) Availability of Additional Information. RadiSys acknowledges that
inquiries with respect to GA or the documents referred to in Section 6(c) above
may be made by RadiSys to Mr. Richard Nance, GA's Chief Financial Officer, in
writing at 17731 Mitchell North, Irvine, California 92714, or by telephone at
(714) 250-4800. RadiSys has been afforded the opportunity to make inquiries of,
and has received answers from, the officers and directors of GA concerning its
operations, plans and financial condition, and has further been afforded the
opportunity to obtain any additional material
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 6
necessary to verify the information so obtained (to the extent GA possesses such
material or could acquire it without unreasonable effort or expense.)
(e) No Reliance on Other Information. RadiSys has not been furnished
with any oral or written information concerning GA other than the documents
referred to in Section 6(c) above, and the information furnished or made
available to RadiSys by GAI described in Section 6(d) above, and RadiSys has
relied solely on the foregoing in connection with its decision to acquire the
Shares.
(f) Accredited Investor. RadiSys is an "accredited investor" within
the meaning of Rule 501(a)(3) promulgated by the SEC under the Act.
7. Representations and Warranties of GA. GA hereby represents and warrants
to RadiSys as follows:
(a) Organization, Powers and Good Standing. GA is a corporation duly
organized, validly existing and in good standing under the laws of Delaware, and
having its principal place of business in the State of California, and has all
requisite corporate power and authority and the legal right to own and operate
its properties and to carry on its business as heretofore conducted and as
proposed to be conducted. GA is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure so to qualify would have
a material adverse effect on GA. GA has all requisite power and authority to
enter into this letter agreement and to execute and deliver the Notes and to
carry out the transactions contemplated hereby and thereby.
(b) Authorization, Binding Effect No Conflict, Etc.
(i) All corporate action on the part of GA necessary for the
authorization, execution and delivery of this letter agreement and the Notes,
the performance of all of GA's obligations hereunder and thereunder and the
authorization, issuance and delivery of the Notes and the Shares has been taken.
This letter agreement and each of the Notes has been duly executed and delivered
by GA. This letter agreement and each of the Notes is a legal, valid and binding
obligation of GA, enforceable against it in accordance with its respective
terms, except as may be affected by bankruptcy, insolvency, reorganization,
moratorium or other similar laws or by equitable principles relating to or
limiting the rights of creditors generally.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 7
(ii) The execution, delivery and performance by GA of this letter
agreement and the Notes, and the consummation of the transactions contemplated
thereby (including the issuance of the Shares), do not and cannot (A) conflict
with any provision of GA's Certificate of Incorporation or Bylaws, (B) conflict
with, result in a breach of, or constitute (or, with the giving of notice or
lapse of time or both, would constitute) a default under, or require the
approval or consent of any person or entity pursuant to, any material agreement,
contract or instrument to which GA is a party, or violate any provision of
applicable law binding on GA, or (C) result in the creation or imposition of any
lien upon any asset of GA.
(iii) No governmental approval is or will be required in
connection with the execution, delivery and performance by GA of this letter
agreement or the Notes or the transactions contemplated thereby or to ensure the
legality, validity or enforceability thereof.
(c) Financial Information Relating to GA. The financial statements
contained in the GA SEC Reports are complete and correct in all material
respects, subject to the absence of footnotes, the absence of a statement of
cash flows and normal year-end adjustments in the case of the interim financial
statements included, and have been prepared in accordance with GAAP. Without
limiting the foregoing, the financial statements contained in the GA SEC Reports
accurately set out and describe the financial condition and operating results of
GA as of the dates, and for the periods, indicated therein.
(d) Litigation. Except as disclosed in the GA SEC Reports, there are
no actions, suits or proceedings pending or, to the best knowledge of GA,
threatened against or affecting GA, or its assets or properties before any
governmental authority (i) that, if adversely determined, could have a material
adverse effect on GA, (ii) that in any manner draw into question the validity or
the enforceability of this letter agreement or any transaction contemplated
hereby, or (iii) that might result in any change in the current equity ownership
of GA, nor, to GA's Best Knowledge, is there any basis for any matter described
in the foregoing Section 7(d), except as disclosed on Schedule 7(d) attached
hereto. There are no any actions pending or threatened (or any basis therefor
known to GA) involving the prior employment of any of GA's employees, their use
in connection with the businesses of GA of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. GA is not a party or subject to the
provisions of any order (except as imposed
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 8
by laws of general application), writ, injunction, judgment or decree (except as
imposed by laws of general application) of any court, governmental authority or
government agency or instrumentality. There is no action, suit, proceeding or
investigation by GA currently pending or which GA intends to initiate (as
plaintiff), which, if adversely determined, would be material to GA or its
business or prospects.
(e) Disclosure. GA has fully provided RadiSys with all of the
information which RadiSys has requested for deciding whether to enter into the
transactions contemplated by this letter agreement. The information in any
document, certificate or written statement furnished to RadiSys by or on behalf
of GA with respect to the business, assets, results of operation, financial
condition or prospects of GA for use in connection with the transactions
contemplated by this letter agreement is, when considered as a whole, true and
correct and does not omit to state any material fact required to be stated
therein to make the furnished information not misleading. To GA's best
knowledge, there is no fact (other than matters of a general economic nature)
that has materially and adversely affected or could reasonably be expected to
have a material adverse effect, which has not been disclosed herein, in such
other documents, certificates and statements, or the GA SEC Reports.
(f) Valid Issuance. The outstanding shares of GA's common stock have
been duly authorized, issued and delivered and are validly outstanding, fully
paid and nonassessable. The Shares, when issued, sold and delivered pursuant to
this letter agreement, will be duly and validly issued, fully paid and
nonassessable. Assuming the accuracy of the representations of RadiSys contained
in Section 6 above, the issuance and sale of the Shares to RadiSys pursuant to
this letter agreement are exempt from the registration requirements of Section 5
of the Securities Act of 1933, as amended, (the "Securities Act") by reason of
the exemption from registration set forth in Section 4(2) of the Securities Act.
(g) Compliance with Laws and Agreements. Except as disclosed in the GA
SEC Reports or Schedule 7(d) attached hereto, GA is not in violation or default
of any provisions of any material agreement, contract or instrument to which it
is a party or by which it is bound or of any provision of any applicable law,
which violation or default could have a material adverse effect on GA.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 9
(h) PMF Consent. PMF has consented to the terms and conditions of the
Second Note, the issuance of the Secured Note in accordance with the provisions
of Section 5 above, and the other transactions contemplated by Section 5 above.
8. Representations and Warranties of RadiSys. RadiSys hereby represents and
warrants to GA as follows:
(a) Organization, Powers and Good Standing. RadiSys is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. RadiSys has all requisite power and authority to enter into this
letter agreement and to carry out the transactions contemplated hereby.
(b) Authorization, Binding Effect No Conflict, Etc.
(i) All corporate action on the part of RadiSys necessary for the
authorization, execution and delivery of this letter agreement and the
performance of all of RadiSys's obligations hereunder has been taken. This
letter agreement has been duly executed and delivered by RadiSys, and is a
legal, valid and binding obligation of RadiSys, enforceable against it in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or by equitable principles
relating to or limiting the rights of creditors generally.
(ii) The execution, delivery and performance by RadiSys of this
letter agreement, and the consummation of the transactions contemplated thereby,
do not and cannot (A) conflict with any provision of RadiSys's Certificate of
Incorporation or Bylaws, (B) conflict with, result in a breach of, or constitute
(or, with the giving of notice or lapse of time or both, would constitute) a
default under, or require the approval or consent of any person or entity
pursuant to, any material agreement, contract or instrument to which RadiSys is
a party, or violate any provision of applicable law binding on RadiSys, or (C)
result in the creation or imposition of any lien upon any asset of RadiSys.
(iii) No governmental approval is or will be required in
connection with the execution, delivery and performance by RadiSys of this
letter agreement or the transactions contemplated hereby or to ensure the
legality, validity or enforceability thereof.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 10
9. Satisfaction of Indebtedness and Release of Other Obligations.
(a) Acknowledgment of Satisfaction; Release of Claims by RadiSys.
RadiSys acknowledges that payment of the Cash Payment to RadiSys and the
issuance of the Notes and the Shares to RadiSys will constitute satisfaction in
full of all of GA's indebtedness to RadiSys and satisfaction in full of all
other obligations of GA to RadiSys, known or unknown. Accordingly, RadiSys
hereby releases and discharges GA, as well as all of its officers, directors,
employees and agents, whether past, present or future (the "GA Released
Parties"), from any and all claims, demands, costs, liabilities, obligations,
damages, expenses, and actions and causes of action of every nature, whether in
law or in equity, known or unknown or suspected or unsuspected (collectively,
"Claims"), which RadiSys ever had or now has or makes claim to have against the
GA Released Parties, or any of them, directly or indirectly arising out of or in
connection with any event, condition, action, failure to act or other
circumstance on or before the date hereof, including but not limited to any and
all Claims arising out of or related to (i) the Asset Purchase Agreement dated
October 3, 1996 entered into by GA and RadiSys (the "Asset Purchase Agreement");
(ii) the Registration Rights Agreement dated October 11, 1996 entered into by GA
and RadiSys (the "Prior Registration Rights Agreement"); (iii) the Common Stock
Purchase Warrant dated October 11, 1996 granted by GA to RadiSys (the "Prior
Warrant"); (iv) the Assumption Agreement dated October 11, 1996 executed by GA
in favor of RadiSys (the "Assumption Agreement"); (v) the letter agreement dated
October 1, 1997 entered into by GA and RadiSys (the "Prior Letter Agreement");
and (vi) the Promissory Note dated October 1, 1997 in the original principal
amount of $1,428,899 payable by GA to the order of RadiSys (the "Promissory
Note").
(b) Release of Claims by GA. GA hereby releases and discharges
RadiSys, as well as all of its officers, directors, employees and agents,
whether past, present or future (the "RadiSys Released Parties"), from any and
all claims, demands, costs, liabilities, obligations, damages, expenses, and
actions and causes of action of every nature, whether in law or in equity, known
or unknown or suspected or unsuspected (collectively, "Claims"), which GA ever
had or now has or makes claim to have against the RadiSys Released Parties, or
any of them, directly or indirectly arising out of or in connection with any
event, condition, action, failure to act or other circumstance on or before the
date hereof, including but not limited to any and all Claims arising out of or
related to (i) the Asset Purchase Agreement; (ii) the Prior Registration Rights
Agreement; (iii) the Prior Warrant; (iv) the Assumption Agreement; (v) the Prior
Letter Agreement; and (vi) the Promissory Note.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 11
(c) Waiver of Unknown Claims. RadiSys and GA each understands that
Section 1542 of the Civil Code of California provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor."
SECTION 1542 OF THE CIVIL CODE OF CALIFORNIA IS HEREBY EXPRESSLY WAIVED BY
RADISYS AND GA.
(d) Non-Assignment. RadiSys hereby represents and warrants to GA that
there has been no assignment of any Claims or any other rights which are the
subject of the release set forth in Section 7(a) above. GA hereby represents and
warrants to RadiSys that there has been no assignment of any Claims or any other
rights which are the subject of the release set forth in Section 7(b) above.
10. Termination of Prior Agreements. RadiSys and GA hereby terminate in
their entirety each of the following agreements and instruments (collectively,
the "Terminated Agreements"): (i) the Asset Purchase Agreement; (ii) the Prior
Registration Rights Agreement; (iii) the Prior Warrant; (iv) the Assumption
Agreement; (v) the Prior Letter Agreement; and (vi) the Promissory Note. GA and
RadiSys each agrees that neither party hereto has any ongoing liability to the
other party under any of the Terminated Agreements. Concurrently with the
execution of this letter agreement, RadiSys will deliver to GA for cancellation
the original of each of the Prior Warrant and the Promissory Note.
11. Miscellaneous.
(a) Entire Agreement. This letter agreement is entered into by each of
the parties hereto without reliance upon any statement, representation, promise,
inducement or agreement not expressly contained within this letter agreement.
This letter agreement constitutes the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior oral or written
agreements and understandings concerning such subject matter.
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 12
(b) Modification. This letter agreement shall not be amended or
modified except in a writing signed by both GA and RadiSys.
(c) Attorneys' Fees. If any litigation is brought concerning this
letter agreement or the rights or duties of any person in relation thereto, the
prevailing party in such litigation shall be entitled to recover from the other
party reasonable attorneys' fees and costs in such litigation in addition to any
other relief to which such prevailing party may be entitled.
(d) Governing Law. The internal laws of the State of California shall
govern this letter agreement in all respects, including, but not limited to,
matters of construction, validity, enforcement and interpretation.
To acknowledge your agreement to the foregoing and your intent to be bound
thereby, please execute the additional copy of this letter which is enclosed,
and return it to the undersigned.
Very truly yours,
GENERAL AUTOMATION, INC.
By: JANE CHRISTIE
--------------------------------------
Jane Christie, Chief Executive Officer
The foregoing is accepted and approved.
RADISYS CPD, INC.
By: GLENFORD J. MYERS
--------------------------------------
(Signature)
Its: Glenford J. Myers, President
-------------------------------------
(Please print name and title)
<PAGE>
RadiSys CPD, Inc.
September 30, 1999
Page 13
SCHEDULE 7(d)
GA is in default of its payment obligations under that certain Promissory
Note payable by GA to NCR Corporation dated May 4, 1998 in the original
principal amount of $1,723,921, the remaining balance of which is approximately
$739,000.
PROMISSORY NOTE
---------------
$500,000 September 30, 1999
Irvine, California
The undersigned, General Automation, Inc., a Delaware corporation, for
value received, promises to pay to the order of Radisys CPD, Inc., or any
assignee (the "Holder"), the sum of Five Hundred Thousand Dollars ($500,000),
together with interest on unpaid principal as provided below. This Note has been
executed and delivered pursuant to that certain letter agreement of even date
herewith between the undersigned and Radisys CPD, Inc. (the "Letter Agreement").
The following is a statement of the rights of the Holder of this Note and
the conditions to which this Note is subject:
1. Interest. The unpaid principal balance of this Note outstanding from
time to time shall bear interest from the date hereof until paid at the rate of
ten percent (10%) per annum.
2. Payments. Subject to Section 3 below, the entire principal amount of
this Note, together with all accrued interest thereon, shall be due and payable
on the earlier to occur of (a) the date which is one hundred twenty (120) days
following the date of this Note (the "Maturity Date"); or (b) the third business
day following the closing of a loan to the undersigned pursuant to that certain
Loan Agreement (the "Loan Agreement") of even date herewith between the
undersigned and Pacific Mezzanine Fund LLP ("PMF"), which loan yields net
proceeds to the undersigned of not less than One Million Dollars ($1,000,000),
excluding the initial $3,150,000 loaned by PMF to the Company pursuant to the
Loan Agreement (a "Qualifying Financing").
3. Satisfaction of Obligations by Undersigned. Notwithstanding Section 2
above, in the event that a Qualifying Financing has not been consummated on or
before the Maturity Date, the undersigned may, in its sole discretion, by
written notice given by the undersigned to the Holder, elect to satisfy the
undersigned's entire obligation under this Note by executing and delivering to
the Holder a Secured Convertible Promissory Note with an original principal
amount equal to the sum of the then outstanding principal balance of this Note
and all accrued but unpaid interest then owed on this Note, upon and subject to
the terms and conditions stated in the Letter Agreement.
4. Prepayment. The undersigned may at any time prepay this Note in whole or
in part. All payments made on this Note shall be applied first to accrued
interest, and the balance of such payment, if any, shall be applied to
principal, and interest shall thereupon cease upon the principal so credited.
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<PAGE>
5. Headings. The headings of this Note have been inserted as a matter of
convenience and shall not affect the construction hereof.
6. Applicable Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of California.
7. Time is of the Essence. Time is of the essence of this Note.
8. Attorneys' Fees. In the event this Note is placed in the hands of an
attorney for collection, or if the Holder incurs any costs incident to the
collection of the indebtedness evidenced hereby, the undersigned and any
endorsers hereof agree to pay to the Holder an amount equal to all such costs,
including without limitation all actual reasonable attorney's fees and all court
costs.
9. Waiver. The payor and any guarantors and endorsers hereof expressly
waive diligence, presentment, protest and demand, and notice of protest, demand,
dishonor and nonpayment of this Note. No acceptance of a partial payment or
other indulgences granted from time to time shall be construed as a novation of
this Note or as a waiver of the right of the Holder thereafter to insist upon
strict compliance with the terms of this Note or to prevent the exercise of any
right granted hereunder or by applicable laws. No extension of the time for
payment of the indebtedness evidenced hereby, made by agreement with any person
now or hereafter liable for payment of the indebtedness evidenced hereby, shall
operate to release, discharge, modify, change or affect the original liability
of the undersigned hereunder or that of any other person now or hereafter liable
for payment of the indebtedness evidenced hereby, either in whole or in part,
unless the Holder agrees otherwise in writing. This Note may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
IN WITNESS WHEREOF, the undersigned, General Automation, Inc., has executed
this Note.
GENERAL AUTOMATION, INC.
By: JANE CHRISTIE
------------------------------------
Its: President and CEO
-----------------------------------
2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT, dated September 30, 1999, is entered
into by General Automation, Inc., a Delaware corporation (the "Company"), and
Radisys CPD, Inc., a Delaware corporation formerly known as Texas Micro, Inc.
and also formerly known as Sequoia Systems, Inc. (" Radisys").
1. Definitions. Unless the context otherwise requires, the terms defined in
this Section 1 shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined.
1.1 Agreement. "Agreement" means this Registration Rights Agreement.
1.2 Board. "Board" means the Board of Directors of the Company.
1.3 Commission. "Commission" means the United States Securities and
Exchange Commission.
1.4 Common Stock. "Common Stock" means the Common Stock of the
Company.
1.5 Holder. "Holder" of any security means the record owner of such
security.
1.6 Radisys' Registrable Securities. "Radisys' Registrable Securities"
means (a) the 1,133,333 shares of Common Stock to be issued by the Company to
Radisys pursuant to that certain letter agreement of even date herewith between
the Company and Radisys ; and (b) any securities issued or issuable with respect
to the Common Stock referred to in clause (a) above by way of a stock dividend
or stock split or in connection with a combination of shares, reclassification,
recapitalization, merger or consolidation or reorganization; provided, however,
that such shares of Common Stock shall only be treated as Radisys' Registrable
Securities if and so long as they have not been (i) sold to or through a broker
or dealer or underwriter in a public distribution or a public securities
transaction; or (ii) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof or other applicable exemption so that all transfer restrictions and
restrictive legends with respect to such Common Stock are removed upon the
consummation of such sale.
1.7 Other Registrable Securities. "Other Registrable Securities" means
all Common Stock, whether now outstanding or hereafter issued, which the Company
has agreed to register, or may hereafter agree to register.
EXHIBIT C
<PAGE>
1.8 Person. "Person" includes any natural person, corporation, trust,
association, company, partnership, joint venture and other entity and any
government, governmental agency, instrumentality or political subdivision.
1.9 Register, Registered and Registration. The terms "register,"
"registered" and "registration" refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and
the declaration or ordering of the effectiveness of such registration statement.
1.10 Registrable Securities. "Registrable Securities" means the Other
Registrable Securities and Radisys' Registrable Securities, collectively.
1.11 Securities Act. "Securities Act" means the United States
Securities Act of 1933, as amended.
2. Incidental Registration.
2.1 Notice to Radisys , Etc. Each time the Company shall determine to
file a registration statement under the Securities Act (other than on Form S-4,
S-8 or a registration statement on any form covering solely an employee benefit
plan) in connection with the proposed offer and sale for money of any of its
securities for its own account, the Company agrees to promptly give written
notice of its determination to Radisys . Upon the written request of Radisys
given within twenty (20) days after the receipt of such written notice from the
Company, subject to Section 2.3 below, the Company agrees to cause all of
Radisys' Registrable Securities, or such portion thereof as Radisys has
specified to the Company in writing, to be included in such registration
statement and registered under the Securities Act, all to the extent requisite
to permit the sale or other disposition by Radisys of Radisys' Registrable
Securities to be so registered.
2.2 Inclusion in Underwriting. If the registration of which the
Company gives written notice pursuant to Section 2.1 is for a public offering
involving an underwriting, the Company agrees to so advise Radisys as a part of
its written notice. In such event, the right of Radisys to registration pursuant
to this Section 2 shall be conditioned upon Radisys' participation in such
underwriting and the inclusion of Radisys' Registrable Securities in the
underwriting to the extent provided herein. If any of Radisys' Registrable
Securities are to be distributed through such underwriting, Radisys shall enter
into (together with the Company and the other Holders distributing their
securities through such underwriting) an underwriting agreement with the
underwriter or underwriters selected for such underwriting by the Company,
provided that such underwriting agreement is in customary form.
2.3 Limitations. Notwithstanding any other provision of this Section
2, if the managing underwriter of an underwritten distribution advises the
Company in writing that in its
2
<PAGE>
good faith judgment the number of shares of Registrable Securities requested to
be registered exceeds the number of shares of Registrable Securities which can
be sold in such offering, then the number of shares of Registrable Securities so
requested to be included in the offering shall be reduced to that number of
shares which in the good faith judgment of the managing underwriter can be sold
in such offering. Such reduced number of shares to be included in the
registration shall be allocated as follows: (a) first to the Company with
respect to all of the shares to be registered for the account of the Company;
and (b) second, to the Holders of shares of Registrable Securities requesting to
participate in such registration, on a pro rata basis based on the total number
of shares of Registrable Securities held by each such Holder. All shares of
Radisys' Registrable Securities which are excluded from the underwriting by
reason of the underwriter's marketing limitation and all shares of Radisys'
Registrable Securities not originally requested to be so included shall not be
included in such registration.
2.4 Abandonment of Registration. Notwithstanding any other provision
of this Agreement, the Company may at any time, at the discretion of the Board,
abandon or terminate any registration statement, either prior to or after its
filing with the Commission, without liability or obligation to Radisys.
3. Expenses.
3.1 Registration Expenses. Subject to Section 3.2 below, the Company
agrees to bear all fees, costs and expenses with respect to the inclusion of
shares of Radisys' Registrable Securities in any registration statement pursuant
to Section 2 hereof.
3.2 Company Expenses; Expenses of Radisys. The fees, costs and
expenses of registration to be borne as provided in Section 3.1 above shall
consist of all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, fees and disbursements
of counsel for the underwriter or underwriters of such securities (if the
Company and/or selling security holders are otherwise required to bear such fees
and disbursements), and all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified. The fees, costs
and expenses to be borne by the Company under Section 3.1 above shall not
include the fees, costs or expenses of any counsel to Radisys or stock transfer
taxes or underwriters' discounts and commissions relating to any of Radisys'
Registrable Securities.
4. Indemnification.
4.1 Indemnification by Company. The Company hereby agrees to indemnify
and hold harmless Radisys, its officers, directors and each Person who controls
Radisys within the meaning of the Securities Act, from and against, and agrees
to reimburse Radisys, its officers,
3
<PAGE>
directors and controlling Persons with respect to, any and all claims, actions
(actual or threatened), demands, losses, damages, liabilities, costs and
expenses, including without limitation attorneys' fees, to which any such
indemnified Person may become subject under the Securities Act or otherwise,
insofar as such claims, actions, demands, losses, damages, liabilities, costs or
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such claim, action, demand, loss, damage, liability,
cost or expense suffered by Radisys, its officers, directors and controlling
Persons is caused by an untrue statement or alleged untrue statement or omission
or alleged omission so made in strict conformity with written information
furnished by Radisys specifically for use in the preparation thereof; provided,
further, that with respect to an untrue statement or alleged untrue statement or
omission or alleged omission made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement becomes effective (or an amended prospectus filed with
the Commission pursuant to Rule 424(b)) (the "Final Prospectus"), or made in the
Final Prospectus but eliminated in any amendment or supplement filed subsequent
to the Final Prospectus (a "Subsequent Amendment"), this indemnity shall not
inure to the benefit of Radisys, its officers, directors or controlling Persons
if, having previously been furnished by or on behalf of the Company with copies
of the Final Prospectus or Subsequent Amendment, as applicable, Radisys
thereafter fails to deliver, prior to or concurrently with the sale of
securities to such person, a copy of the Final Prospectus or Subsequent
Amendment, as applicable, to the person asserting the claim, action, demand,
loss, damage, liability, cost or expense.
4.2 Indemnification by Radisys. If any shares of Radisys' Registrable
Securities are included in a registration statement pursuant to the provisions
of this Agreement, Radisys shall indemnify and hold harmless the Company, its
officers, directors, legal counsel and accountants and each Person who controls
the Company within the meaning of the Securities Act, from and against, and
agrees to reimburse the Company, its officers, directors, legal counsel,
accountants and controlling Persons with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs or expenses, including
without limitation attorneys' fees, to which the Company, its officers,
directors, legal counsel, accountants or such controlling Persons may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are caused by any
untrue or alleged untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any amendment or
supplement thereto, or are caused by the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was so made in reliance upon and in strict conformity with written
information furnished by Radisys specifically for use in the preparation
thereof.
4
<PAGE>
4.3 Indemnification Procedure. Promptly after receipt by a party
indemnified pursuant to the provisions of Section 4.1 or 4.2 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim therefor is to be
made against the indemnifying party pursuant to the provisions of Section 4.1 or
4.2, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 4 and
shall not relieve the indemnifying party from liability under this Section 4;
provided that if the indemnifying party has not received notice of the claim and
the indemnified party fails to vigorously defend the claim or settles or
compromises the claim without the approval of the indemnifying party, the
indemnifying party shall be relieved of liability under this Section 4. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party shall have the right,
at its own cost and expense, to select separate counsel (in which case the
indemnifying party shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties). Upon the permitted assumption by
the indemnifying party of the defense of such action, and approval by the
indemnified party of counsel, the indemnifying party shall not be liable to such
indemnified party under Section 4.1 or 4.2 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs of investigation) unless (i) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time, (ii) the indemnifying party and its counsel do not actively and vigorously
pursue the defense of such action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim or
litigation.
4.4 Contribution. If the indemnification provided for in Section 4.1
or 4.2 is held by a court of competent jurisdiction to be unavailable to a party
to be indemnified with respect to any claims, actions, demands, losses, damages,
liabilities, costs or expenses referred to therein, then each indemnifying party
under any such Section, in lieu of indemnifying such indemnified party
thereunder, hereby agrees to contribute to the amount paid or payable by such
indemnified party as a result of such claims, actions, demands, losses, damages,
liabilities, costs or expenses, including without limitation attorneys' fees, in
such proportion as is appropriate to
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reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
which resulted in such claims, actions, demands, losses, damages, liabilities,
costs or expenses, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
4.5 Limitation on Radisys' Obligations. Notwithstanding the foregoing,
in no event shall Radisys' indemnification or contribution obligations under
this Section 4 exceed an amount equal to the per share public offering price
(less any underwriting discount and commissions) multiplied by the number of
shares of Radisys' Registrable Securities sold pursuant to the registration
statement which gives rise to such obligation to contribute or indemnify (less
the aggregate amount of any damages which Radisys has otherwise been required to
pay in respect of such claim, action, demand, loss, damage, liability, cost or
expense or any substantially similar claim, action, demand, loss, damage,
liability, cost or expense arising from the sale of Radisys' Registrable
Securities).
4.6 Exceptions in Event of Fraud. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution hereunder from any person who was not guilty
of such fraudulent misrepresentation.
5. Radisys Information. If any shares of Radisys' Registrable Securities
are to be included in any registration to be effected pursuant to this
Agreement, the Company may require Radisys to furnish the Company with such
information with respect to Radisys and the distribution of such shares of
Radisys' Registrable Securities as the Company may from time to time reasonably
request in writing to comply with such disclosure obligations as shall be
required by law or by the Commission in connection therewith, and Radisys shall
furnish the Company with such information.
6. Forms. All references in this Agreement to particular forms of
registration statements are intended to include, and shall be deemed to include,
references to all successor forms which are intended to replace, or to apply to
similar transactions as the forms herein referenced.
7. Transfer of Registration Rights. The rights to cause the Company to
register securities granted to Radisys pursuant to this Agreement may not be
transferred or assigned by Radisys.
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8. Miscellaneous.
8.1 Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by the Company and Radisys.
8.2 Notices. All notices, requests, demands, and other communications
required to or permitted to be given under this Agreement shall be in writing
and shall be conclusively deemed to have been duly given (i) when hand delivered
to the other party; or (ii) when received when sent by facsimile at the address
and number set forth below (provided, however, that notices given by facsimile
shall not be effective unless either (a) a duplicate copy of such facsimile
notice is promptly given by depositing the same in a United States post office
with first-class postage prepaid and addressed to the parties as set forth
below, or (b) the receiving party delivers a written confirmation of receipt for
such notice either by facsimile or any other method permitted under this
Section; additionally, any notice given facsimile shall be deemed received on
the next business day if such notice is received after 5:00 p.m. (recipient's
time) or on a nonbusiness day); or (iii) three (3) business days after the same
have been deposited in a United States post office with first class or certified
mail return receipt requested postage prepaid and addressed to the parties as
set forth below; or (iv) the next business day after the same have been
deposited with a national overnight delivery service reasonably approved by the
parties (Federal Express and DHL WorldWide Express being deemed approved by the
parties), postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider.
To: General Automation, Inc.
17731 Mitchell North
Irvine, CA 92614
Attention: Chief Financial Officer
FAX: (949) 752-6772
To: Radisys CPD , Inc.
5959 Corporate Drive
Houston, TX 77036
Attention: President
FAX: (503) 615-1114
Each party shall make an ordinary, good faith effort to ensure that it will
accept or receive notices that are given in accordance with this Section, and
that any person to be given notice actually receives such notice. A party may
change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section by giving the other party written notice
of the new address in the manner set forth above.
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8.3 Severability. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby.
8.4 Headings. The headings of the sections, subsections and paragraphs
of this Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.
8.5 Choice of Law. It is the intention of the parties that the
internal substantive laws, and not the laws of conflicts, of the State of
California should govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties.
8.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
In witness whereof, the parties hereto have executed this Agreement.
GENERAL AUTOMATION, INC. RADISYS CPD, INC.
By: JANE CHRISTIE By: GLENFORD J. MYERS
------------------------------- ------------------------------------
Jane Christie, President
Its: Glenford J. Myers, President
-----------------------------------
(Please print name and title)
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