-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JqvCeI8DeV2J5kDC5ub60ElKtpRpcJru++jDRcx+9SHhgHcWGaGdIqMwA0wmwiZc UyGw93QB7PLX0wuQifo2Dg== 0000893877-99-000652.txt : 19991018 0000893877-99-000652.hdr.sgml : 19991018 ACCESSION NUMBER: 0000893877-99-000652 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19991012 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL AUTOMATION INC CENTRAL INDEX KEY: 0000040443 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952488811 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-10877 FILM NUMBER: 99727015 BUSINESS ADDRESS: STREET 1: 17731 MITCHELL NORTH CITY: IRVINE STATE: CA ZIP: 92714 BUSINESS PHONE: 7147784800 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RADISYS CORP CENTRAL INDEX KEY: 0000873044 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 930945232 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 5445 NE DAWSON CREEK DR CITY: HILLSBORO STATE: OR ZIP: 97124 BUSINESS PHONE: 5036461800 SC 13D 1 SCHEDULE 13D OMB APPROVAL OMB Number: 3235-0145 Expires: December 31, 1997 Estimated average burden hours per form 14.90 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). 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. 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 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: Name Position with RadiSys ---- --------------------- 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
The business address of each executive officer is 5445 NE Dawson Creek Drive, Hillsboro, Oregon 97124. Page 5 of 8 Pages Directors of RadiSys: Name Principal Occupation, Address of Employer and Business Address ---- -------------------------------------------------------------- of Director ----------- 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
* 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 6 of 8 Pages Executive Officers and Directors of RadiSys CPD: Name Position with RadiSys CPD ---- ------------------------- 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
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 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 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 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. EX-99.A 2 LETTER AGREEMENT 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. 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 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 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: 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 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. 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 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. 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. 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. 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. 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) 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. EX-99.B 3 $500,000 PROMISSORY NOTE 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. 1 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 EX-99.C 4 REGISTRATION RIGHTS AGREEMENT 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 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 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 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 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 5 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. 6 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. 7 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) 8 -----END PRIVACY-ENHANCED MESSAGE-----