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EXHIBIT 10.24
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (this "Amendment")
is entered into as of September 30, 1999, by and between Comerica Bank -
California ("Bank") and General Automation, Inc. ("Borrower").
RECITALS
A. Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of December 18,1997 (the "Loan Agreement"), as
modified by that certain Modification to Loan and Security Agreement
dated as of January 8, 1998 (the "First Modification"), and that certain
modification to Loan & Security Agreement dated as of May 28, 1998 (the
" Second Modification"), and that certain First Amendment to Loan and
Security Agreement and Forbearance Agreement dated as of December 31,
1998 (the "First Amendment"), collectively, the "Loan Documents".
Borrower and Bank desire to amend the terms of the Loan Documents in
accordance with the terms of the Amendment.
B. As of the date hereof, there is due and owing under the Loan Documents
the principal amount of TWO MILLION ONE HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($2,150,000.00) together with accrued but unpaid
interest, attorneys' fees and costs. Such amount, plus accruing interest
and ongoing attorneys' fees and costs are hereinafter referred to as the
"Existing Debt".
C. Borrower has requested that Bank amend the Loan Documents. Bank has
agreed to amend the Loan Documents, subject to the terms and conditions
as more particularly set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Recitals. The foregoing recitals of facts and understandings of the
parties are incorporated herein.
2. Defined Terms. Capitalized terms not otherwise defined herein shall
have the same meanings as set forth in the Loan Documents.
3. Acknowledgement of Liability. As of the date of this Amendment,
Borrower owes Bank an amount equal to the Existing Debt. Borrower reaffirms all
of its obligations under the Loan Documents and hereby forever waives and
relinquishes any and all claims, offsets or defenses that Borrower may have with
respect to the payment of sums due and the performance of other obligations
under the Loan Documents. The security interests in the Collateral granted to
Bank under the Loan Documents remain perfected, first priority liens.
4. Amendments to Loan Documents. The Loan Documents are amended as
follows:
a. Section 6.6 (k) is deleted in its entirety and replaced with the
following:
"Incur any debts outside the ordinary course of Borrower's business
except renewals or extensions of existing debts an interest thereon, and
debt owing Pacific Mezzanine Fund, LP together with debt owing to
Radisys CPD, Inc. and Boundless Technologies, Inc.;"
b. Section 6.9 (a) is deleted in its entirety and replaced with the
following:
"Borrower will not make any distribution or declare or pay any dividend
(in stock or in cash) to any shareholder or on any of its capital stock,
of any class, whether now or hereafter outstanding, or purchase,
acquire, repurchase, or redeem or retire any such capital stock except
under the terms and conditions as set forth under that certain Loan
Agreement and related documents between
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Borrower and Pacific Mezzanine Fund, LP together with the related
documents between Borrower and Radisys CPD, Inc. or Boundless
Technologies, Inc.;"
4. Fees and Expenses. Borrower agrees to pay to Bank a fee equal to Five
Thousand Dollars ($5,000.00), which fee shall be deemed to be fully earned,
non-refundable and payable in full as of the date hereof (the "Amendment Fee").
In addition, as a condition to the effectiveness of the Amendment, Borrower
shall pay to Bank all Bank expenses incurred in connection with the preparation
and negotiation of this Amendment.
5. Representations and Warranties. Borrower represents and warrants that
all of the Representations and Warranties contained herein and in the Loan
Documents are true and correct as of the date of this Amendment and that no
Event of Default has occurred.
6. Conditions Precedent. The effectiveness of this Amendment is subject
to the following conditions precedent:
a. Receipt of the following (each in form and substance satisfactory
to Bank and its counsel):
1. this Amendment, and such other agreements and instruments
reasonably requested by Bank pursuant hereto (including
such documents as are necessary to create and perfect
Bank's security interest in the Collateral), each duly
executed by Borrower.
2. the Stock Pledge and Security Agreement duly executed by
Borrower and Pacific Mezzanine Fund, LP.
3. the Intellectual Property Security Agreement duly executed
by Borrower.
4. the Subordination Agreement by and between Pacific
Mezzanine Fund, LP and Bank.
b. Receipt by Bank of the Amendment Fee.
c. Payment by Borrower of all Bank expenses incurred in the
preparation and negotiation of this Amendment; and,
d. Receipt of such other documents and completion of such other
matters as Bank may reasonably deem necessary or appropriate.
7. Further Assurances. Borrower will take such other actions as Bank
may reasonably request from time to time to perfect or continue
Bank's security interests in Borrower's property, and to
accomplish the objectives of this Amendment
8. Counterparts. This Amendment may be signed in counterparts and
all of such counterparts when properly executed by the
appropriate parties thereto together shall serve as a fully
executed document, binding upon the parties.
9. Legal Effect. The Loan Documents remain in full force and effect.
If any provision of this Amendment conflicts with applicable law,
such provision shall be deemed severed from this Amendment, and
the balance of the Amendment shall remain in full force and
effect.
10. WAIVER OF JURY. BANK AND BORROWER ACKNOWLEDGE AND AGREE THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY WAIVE, TO THE
EXTENT PERMITTED BY LAW, TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
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ACTION BASED UPON, RELATED TO OR ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZED AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AMENDMENT. EACH PARTY REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
11. Assignment and Indemnity. Borrower consents to Bank's assignment
of all or any part of Bank's rights under this Amendment and the
Loan Documents. Borrower shall indemnify and defend and hold Bank
and any assignee of Bank's interests harmless from any actions,
costs, losses or expenses (including attorneys' fees( arising out
of such assignment , this Amendment and the Loan Documents.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the first date written above.
GENERAL AUTOMATION, INC.
By: _________________________
Xxxxxxx X. Xxxxx
Chief Financial Officer
COMERICA BANK - CALIFORNIA
By:___________________________
Xxxxxx Xxxxxx
Vice President
