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EXHIBIT 10.2
[COMERICA BANK-CALIFORNIA LETTERHEAD]
MODIFICATION TO LOAN & SECURITY AGREEMENT
This First Modification to Loan & Security Agreement (this "Modification")
is entered into by and between General Automation, Inc. ("Borrower") and
Comerica Bank-California ("Bank") as of this 28TH day of MAY, 1998, at San Jose,
California.
RECITALS
A. Bank and Borrower have previously entered into or are concurrently
herewith entering into a Loan & Security Agreement (Accounts & Inventory) (the
"Agreement") dated December 18, 1997.
B. Borrower has requested, and Bank has agreed, to modify the Agreement as
set forth below.
AGREEMENT
For good and valuable consideration, the parties agree as set forth below:
Incorporation by Reference. The Agreement as modified hereby and the
Recitals are incorporated herein by this reference.
Section 2.1 Upon the request of the Borrower, made at any time and from
time to time during the term hereof, and so long as no Event
of Default has occurred, Bank shall lend to Borrower an amount
equal to the Borrowing Base; provided, however, that in no
event shall Bank be obligated to make advances to Borrower
under this Section 2.1 whenever the Daily Balance exceeds, at
any time, either the Borrowing Base or the sum of TWO MILLION
TWO HUNDRED THOUSAND AND N0/100 DOLLARS ($2,200,000.00), such
amount being referred to herein as "Overadvance".
Section 6.16 b Borrower shall deliver to Bank within thirty (30) days after
the end of each month, a Company Prepared balance sheet and
profit and loss statement covering Borrower's operations and
deliver to Bank within ninety (90) days after the
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end of each of Borrower's fiscal years a(n) ANNUAL CPA
UNQUALIFIED AUDITED statement of the financial condition and
10-K of the Borrower for each such fiscal year, including but
not limited to, a balance sheet and Profit and loss statement
and any other report requested by Bank relating to the
Collateral and the financial condition of Borrower, and a
certificate signed by an authorized employee of Borrower to
the effect that all reports, statements, computer disk or tape
files, computer printouts, computer runs, or other computer
prepared information of any kind or nature relating to the
foregoing or documents delivered or caused to be delivered to
Bank under this subparagraph are complete, correct and
thoroughly present the financial condition of Borrower and
that there exists on the date of delivery to Bank no condition
or event which constitutes a breach or Event of Default under
this Agreement.
Section 6.16 c In addition to the financial statements requested above, the
Borrower agrees to provide Bank with the following schedules:
Accounts Receivable Agings on a monthly basis within 20 days
of each month end;
Accounts Payable Agings on a monthly basis within 20 days of
each month end;
Borrowing Base Certificates detailing eligible accounts
receivable for both product sales and service contracts on a
weekly basis and upon any new advances;
10-Q and Company prepared financial statements and Covenant
Compliance Certificates on a quarterly basis within 45 days of
each quarter-end;
Listing of open Sequoia service contracts on a quarterly
basis.
Section 6.17 l All advances to be approved by Officer.
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Legal Effect. Except as specifically set forth in this Modification, all
of the terms and conditions of the Agreement remain in full force and effect.
Integration. This is an integrated Modification and supersedes all prior
negotiations and agreements regarding the subject matter hereof. All amendments
hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
COMERICA BANK-CALIFORNIA
By: /s/ XXXXX XXXX
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Xxxxx Xxxx
Title: Vice President
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BORROWER:
GENERAL AUTOMATION, INC.
By: /s/ X. X. XXXXX
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Title: Vice Chairman
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