As filed with the Securities and Exchange Commission on
November 3, 1997. Registration No. 333-
=============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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The Panda Project, Inc.
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(name of registrant as specified in its charter)
Florida 65-0323354
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(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
901 Yamato Road
Boca Raton, Florida 33431
(561) 994-2300
--------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
C. Daryl Hollis
Executive Vice President and Chief Financial Officer
The Panda Project, Inc.
901 Yamato Road
Boca Raton, Florida 33431
(561) 994-2300
---------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than in connection
with dividend or interest reinvestment plans, check the following
box. [ X ]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
--------------------------------------------
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
================================================================
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Maximum Maximum
Class of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered Unit Price Fee(1)
- ------------- ---------- --------- --------- ------------
Common Stock,
$.01 par
value per 107,020
share(1) shares $ 8.5625(1) $916,359(1) $ 275
(1) Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) and based upon
the average of the high and low prices for the Common Stock on
October 29, 1997 reported on the Nasdaq National Market.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION -- DATED OCTOBER 31, 1997
PROSPECTUS
107,020 Shares
THE PANDA PROJECT, INC.
Common Stock
-----------------------
All of the shares of common stock, par value $.01 per share
("Common Stock"), of The Panda Project, Inc. (the "Company")
offered hereby (the "Shares") are being sold by certain
securityholders of the Company (the "Selling Securityholders").
See "Selling Securityholders." The Company will not receive any
of the proceeds from the sale of the Shares by the Selling
Securityholders.
The Selling Securityholders have advised the Company that
they propose to sell the Shares from time to time in the
over-the-counter market, in ordinary brokerage transactions or
otherwise at market prices prevailing at the time of sale or at
negotiated prices. See "Plan of Distribution." The Common Stock
is traded on the Nasdaq National Market under the symbol "PNDA."
On October 29, 1997, the last reported sale price of the Common
Stock on the Nasdaq National Market was $8.5625 per share.
The shares of Common Stock offered hereby represent
approximately .88% of the total number of shares outstanding at
October 29, 1997. Sales of all or part of the Shares offered
hereby could have a negative impact on the market price of the
Common Stock and adversely affect the ability of the Company to
raise capital through the sale of its equity securities. See
"Risk Factors -- Negative Effect of Future Sales of Stock on
Market Prices and Ability to Raise Capital" and "Plan of
Distribution."
The Company will pay all the expenses, estimated to be
$15,000, in connection with this offering, other than selling
expenses and underwriting discounts, if applicable.
-----------------
The Common Stock offered hereby involves a high degree of
risk. See "Risk Factors" beginning on page 3.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------
The date of this Prospectus is October 31, 1997.
<PAGE>
TABLE OF CONTENTS
Page
----
Available Information.....................................3
Incorporation of Certain Documents by Reference...........3
Risk Factors..............................................5
Use of Proceeds...........................................11
Recent Developments.......................................12
Selling Securityholders...................................12
Plan of Distribution......................................13
Experts...................................................14
<PAGE>
AVAILABLE INFORMATION
The Panda Project, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company with the
Commission pursuant to the informational requirements of the
Exchange Act may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional
offices located at 7 World Trade Center, 13th Floor, New York,
New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials also may be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Common Stock of the Company is
traded on the Nasdaq National Market. Reports and other
information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration
Statement on Form S-3 with respect to the Shares (herein,
together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus does not contain
all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, as certain items are
omitted in accordance with the rules and regulations of the
Commission. For further information pertaining to the Company
and the Shares, reference is made to such Registration Statement
and the exhibits and schedules thereto, which may be inspected
without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of which may be
obtained from the Commission at prescribed rates. The Commission
also makes electronic filings publicly available in the Internet
within 24 hours of acceptance. The Commission's Internet address
is http://www.sec.gov. The Commission's Web site also contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the
Commission.
No person has been authorized to give any information or to
make any representations in connection with this offering other
than those contained in this Prospectus and, if given or made,
such other information and representations must not be relied
upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of
any time subsequent to its date. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy
any securities other than the registered securities to which it
relates or an offer to any person in any jurisdiction where such
an offer would be unlawful. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy such
securities in any circumstances in which such offer or
solicitation is unlawful.
Information contained in the Company's Web site shall not be
deemed to be part of this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1997;
(2) The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997;
(3) The Company's Current Report on Form 8-K filed October
6, 1997; and
(4) The Company's Registration Statement on Form 8-A filed
May 5, 1994, registering the Common Stock under Section 12(g) of
the Exchange Act.
All documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date hereof and prior to the termination of
the offering of the Common Stock registered hereby shall be
deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request
of such person, a copy of any or all of the documents
incorporated by reference into this Prospectus (without exhibits
to such documents other than exhibits specifically incorporated
by reference into such documents). Requests for such copies
should be directed to The Panda Project, Inc., 901 Yamato Road,
Boca Raton, Florida 33431, Attention: Chief Financial Officer,
(561) 994-2300.
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the
following factors should be considered carefully in evaluating an
investment in the Common Stock offered by this Prospectus. This
Prospectus contains forward-looking statements that involve risks
and uncertainties. Such forward-looking statements are made only
as of the date of this Prospectus. Without limiting the
foregoing, the words "believes," "anticipates," "plans,"
"expects," "intends" and similar expressions are intended to
identify forward-looking statements. The Company's actual
results may differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a
difference include, but are not limited to, those discussed below
and elsewhere in this Prospectus.
1. LIMITED PRODUCT DEVELOPMENT AND OPERATING HISTORY. The
Company has a limited operating history upon which an evaluation
of its prospects can be made. Such prospects must be considered
in light of the risks, expenses and difficulties frequently
encountered in the establishment of a new business in the
evolving electronics industry, which is characterized by an
increasing number of market entrants and intense competition, as
well as those encountered in the shift from development to
commercialization of new products based on innovative
technologies.
2. LIMITED REVENUES; HISTORY OF SIGNIFICANT LOSSES;
Accumulated Deficit; Anticipated Future Losses. To date, the
Company has generated limited revenues from the sale of its
Archistrat Computers, from licensing fees and from the activities
associated with its grant from the Defense Advanced Research
Projects Agency. The Company does not anticipate deriving larger
revenues from operations until such time, if ever, that greater
numbers of its Archistrat Computers, semiconductor packages and
connectors can be sold, as to which there can be no assurance.
Further, of the $2.4 million of revenues recognized in the year
ended March 31, 1997, $923,000 related to a barter transaction
with a software developer wherein the Company accepted software
licenses, consulting and training services, and services
associated with the certification of one model of the Archistrat
Computers to use the software developer's CAD program and porting
the software onto the product, in exchange for 53 of its
Archistrat Computers. Management believes the amount of revenue
recognized reflects the fair value of the licenses and other
services received and approximated the normal selling price of
the servers. Since inception (April 8, 1992), the Company has
incurred significant net losses, including losses of $1,800,340,
$6,931,346, $23,894,426 and $20,874,101 during the fiscal years
ended March 31, 1994, 1995, 1996 and 1997, respectively, and
$2,662,445 during the fiscal quarter ended June 30, 1997,
resulting in an accumulated deficit of $56,578,346 as of June 30,
1997. In addition, the Company anticipates losses to continue at
least through December 31, 1997. Inasmuch as the Company expects
to continue to incur operating expenses totalling approximately
$1,000,000 per month related to its research and development and
sales and marketing activities (including salaries of executive,
technical and research and development personnel), the Company
anticipates that such losses will continue until such time, if
ever, as the Company is able to generate sufficient revenues to
support its operations. There can be no assurance that the
Company will ever be able to generate sufficient revenues to
achieve profitable operations.
3. SIGNIFICANT CAPITAL REQUIREMENTS; POSSIBLE NEED FOR
ADDITIONAL FINANCING. The Company's capital requirements in
connection with its operations and development activities have
been significant, and such requirements may continue to be
significant if the Company receives large numbers of purchase
orders for its Archistrat Computers, semiconductor packages and
connectors. The Company has been dependent primarily upon the
proceeds of sales of its securities to fund its activities since
inception. During the period from inception through June 30,
1997, the Company raised capital of approximately $63 million
(after deduction of underwriting discounts, commissions and other
selling costs) through the sale of Common Stock, warrants and
subordinated debentures and from the exercise of stock options
and warrants. Since June 1996, the Company has entered into five
agreements to license its VSPA and Compass Connector technologies
and has begun to receive revenues under two of these agreements.
In addition, the Company has taken actions to significantly
reduce its expenses in all areas, including compensation and
benefits, research and development and selling and administrative
expenses.
In the event the Company's working capital, as augmented by
proceeds from any sales revenue, prove to be insufficient to fund
operations (due to unanticipated expenses, delays, problems, or
otherwise), the Company would be required to seek additional
financing. Furthermore, depending upon the Company's progress in
the development of its products and technology and manufacturing
capabilities, acceptance of its products and technology by third
parties, and the state of the capital markets, the Company may
also determine that it is advisable to raise additional equity
capital. In addition, in the event that the Company receives a
larger than anticipated number of purchase orders for its
Archistrat Computers or VSPA semiconductor package, it may
require resources substantially greater than it currently has or
than are otherwise available to the Company, and the Company may
be required to raise additional capital or engage third parties
(as to which engagement there can be no assurance) to assist the
Company in meeting such orders. The Company has no current
arrangements with respect to, or sources of, additional
financing, and there can be no assurance that additional
financing will be available to the Company when needed on
commercially reasonable terms or at all. The inability of the
Company to obtain additional financing when needed would have a
material adverse effect on the Company, including possibly
requiring the Company to significantly curtail or cease its
operations. To the extent that any future financing involves the
sale of the Company's equity securities, the Company's then
existing stockholders may be substantially diluted.
4. UNCERTAINTY OF MARKET ACCEPTANCE. The products and
technologies currently being sold or developed by the Company
utilize newly developed designs. Although the Company believes
that its existing and proposed technology and products represent
significant advancements in semiconductor packaging and computer
technology, demand for the Company's existing and proposed
products is subject to a high degree of uncertainty, as is
typical in the case of newly-developed products. Achieving
marketing acceptance for the Company's technology and existing
and proposed products will require substantial marketing efforts
and expenditure of significant funds to educate key original
equipment manufacturers ("OEMs") and value-added resellers
("VARs") and end users as to the distinctive characteristics and
anticipated benefits of the Company's proposed products and
technologies. Many OEMs and VARs manufacture and/or sell
components and computers competitive with those being developed
by the Company and have achieved significant market acceptance
for their products. Accordingly, due to their commitment to their
own products, such entities may be inhibited from doing business
with the Company. In addition, many OEMs and VARs may be
reluctant to use or sell the Company's products and technologies
until a sufficient number of other OEMs and VARs have already
committed to do so. The Company has recently hired sales and
marketing personnel for its Archistrat Computers and for its VSPA
semiconductor package and Compass Connector, and it has
established a network of twelve independent sales organizations
to supplement the Company's internal sales force. The Company's
ability to generate revenue from the sale of Archistrat Computers
or the licensing or sale of Archistrat Computers, VSPA
semiconductor packages or Compass Connectors will be dependent
upon, among other things, its ability to effectively use the
internal sales force and its network of independent sales
organizations to market its products. There can be no assurance
that the Company's marketing efforts will be successful.
5. UNCERTAINTY OF PRODUCT AND TECHNOLOGY DEVELOPMENT;
TECHNOLOGICAL FACTORS; DEPENDENCE ON THIRD-PARTY PRODUCT DESIGN
CHANGES. The Company's success will depend in part upon its
products and technology meeting acceptable cost and performance
criteria, and upon their timely introduction into the
marketplace. There can be no assurance that the Company's
products and technology will satisfactorily perform the functions
for which they are designed, that they will meet applicable price
or performance objectives or that unanticipated technical or
other problems will not occur which would result in increased
costs or material delays in their development or
commercialization. In addition, technology as complex as that
which will be incorporated into the Company's proposed products
may contain errors which become apparent subsequent to widespread
commercial use. Remedying such errors could delay the Company's
plans and cause it to incur additional costs which would have a
material adverse effect on the Company. The Company's success
will also be dependent upon the Company's ability to adapt its
products to be compatible with the products of third-party
manufacturers of computer products. In addition, the Company will
be dependent on certain potential customers redesigning or
otherwise modifying their products to fully utilize the Company's
proposed products and technology. Although the Company believes
that potential customers will undertake such modifications to
take advantage of the anticipated performance advantages of the
Company's proposed products, the costs of making such adaptations
could prevent them from doing so on a timely basis, or at all.
The failure of the Company to adapt its products and technology
to be compatible with products of third-party manufacturers or
the failure of potential customers to make necessary
modifications or to redesign their products to accommodate the
Company's products could have a material adverse effect on the
Company's ability to sell or license its proposed products or
technology.
6. COMPETITION; TECHNOLOGICAL OBSOLESCENCE. The markets
that the Company intends to enter are characterized by intense
competition. The Company's Archistrat Computers compete with
computers offered by such companies as Silicon Graphics, Inc.,
Digital Equipment Corp., Sun Microsystems, Inc., Hewlett-Packard
Co. and other smaller companies. The Company's Technology
Products compete with semiconductor packages and connectors
offered by numerous manufacturers. Many of these companies have
substantially greater financial, technical, personnel and other
resources than the Company and have established reputations for
success in the development, licensing, sale and servicing of
their products and technology. Certain of these competitors
dominate their industries and have the financial resources
necessary to enable them to withstand substantial price
competition or downturns in the market for semiconductor
packages, related technologies and/or computers. In addition,
certain companies may be developing technologies or products of
which the Company is unaware, which may be functionally similar,
or superior, to some or all of the Company's products and
technologies. Accordingly, the ability of the Company to compete
will depend on its ability to complete development and introduce
to the marketplace in a timely and cost-competitive manner
additional products and technology, to continually enhance and
improve its existing and proposed products, to adapt its products
to be compatible with specific products manufactured by others,
and to successfully develop and market new products. There can
be no assurance that the Company will be able to compete
successfully, that its competitors or future competitors will not
develop technologies or products that render the Company's
products and technology obsolete or less marketable or that the
Company will be able to successfully enhance its products or
technology or adapt them satisfactorily.
7. DEPENDENCE ON MANUFACTURERS AND SUPPLIERS; LACK OF
MANUFACTURING EXPERIENCE AND CAPABILITY. The Company has
developed the ability to manufacture the VSPA semiconductor
package in its own facility in Boca Raton, Florida. The
automated machinery used in the manufacturing process has been
designed and built by the Company to produce VSPA parts based on
anticipated customer demand. The machines have a wide range of
flexibility in terms of the pin count of the VSPA packages they
will produce, and expected production capacity ranges from
235,000 parts per month to 290,000 parts per month, depending
upon the pin count of the package. One automated machine has
been produced and a second is nearing completion. However, no
commercial scale production of the VSPA product has yet been
commenced and there can be no assurance that the Company will be
able to complete additional machines within a reasonable period
of time, or be capable of producing the quantities of VSPA that
are anticipated. In the event the Company is unable to produce
VSPA in high volumes within a reasonable period of time, or at
all, delays in securing alternative manufacturing sources would
result and would have a material adverse effect on the Company's
operations.
The Company has developed the capability to manufacture the
Compass Connector products required for its Archistrat Computers
in its own facility in Boca Raton, Florida. The Company has also
entered into an agreement with Sun Precision Works, Pvt. Ltd. for
the production of the male connector component of the Compass
Connector. Although the Company's supply of this component is
currently adequate to meet its needs, no assurance can be given
that such supplier can produce such component in sufficient
quantities in the future. The Company has an arrangement with LG
Cable & Machinery Ltd. to supply the Compass V Connector which
the Company expects to use in the next series of the Archistrat
Computers. Although the Company anticipates that it will be able
to obtain Compass V Connectors from LG Cable & Machinery Ltd.
under this arrangement, no assurance can be given that the supply
of such component will be in quantities sufficient to meet the
Company's needs.
The Company anticipates that it will be dependent on third
parties for the manufacture and/or assembly of printed circuit
boards, chassis and other subassemblies, as well as for the
supply of various of the components, incorporated into the
Archistrat Computers, and for performing the final assembly
configuration, certain quality control testing and delivery of
such computers. Although the Company has an arrangement with a
contract manufacturer to manufacture certain subassemblies and
has identified an alternative manufacturer for such components,
there can be no assurance that such manufacturers will dedicate
sufficient production capacity to satisfy the Company's
requirements within scheduled delivery times or at all. In
addition, the failure or delay by the Company's suppliers in
fulfilling its anticipated component needs would adversely affect
the Company's ability to develop and market its products and
technology. The Company believes that these components are
available from multiple sources, and the Company anticipates that
it will obtain certain of them from a single or limited number of
sources of supply. In the event that certain of such suppliers
are unable or unwilling to provide the Company with components to
be used in the Archistrat Computers on commercially reasonable
terms, or at all, delays in securing alternative sources of
supply could result in a material adverse effect on the Company's
operations.
At a future date, the Company may determine that the
development of manufacturing capabilities with respect to the
Archistrat Computers (and/or their subassemblies or components)
is necessary or appropriate. The establishment of manufacturing
and/or assembly capabilities may result in significant expense
and is subject to numerous risks, including unanticipated
technological problems and delays. The failure of the Company to
successfully manufacture its Archistrat Computers would have a
material adverse effect on the Company.
8. DEPENDENCE ON KEY PERSONNEL. The success of the Company
will be dependent on the continued personal efforts of Stanford
W. Crane, Jr., its Chairman, President and Chief Executive
Officer and the principal inventor of its proprietary products
and technologies, and certain other key personnel. Although Mr.
Crane has entered into a five-year employment agreement with the
Company, the agreement provides that he may resign by giving six
months' notice at any time. The loss of his services would have a
material adverse effect on the Company. The Company has obtained
key-man insurance on Mr. Crane's life in the amount of
$2,000,000. The success of the Company also is dependent upon its
ability to hire and retain additional qualified executive,
scientific, production and marketing personnel. Although the
Company has been able to hire qualified personnel, there can be
no assurance that the Company will be able to hire additional
qualified personnel or retain such necessary personnel.
9. PATENTS AND PROPRIETARY INFORMATION. The Company's
success will depend on its ability to obtain patents, protect
trade secrets, and operate without infringing on the proprietary
rights of others. As of September 30, 1997, the Company had
obtained eleven United States patents and an aggregate of 37
foreign patents. In addition, the Company had pending a total of
17 United States and 33 foreign patent applications. These
patents and pending applications relate to VSPA, Compass PGA, the
Archistrat Computers design, the use of the Compass Connector in
Compass PGA and in the Archistrat Computers, and a PCB
manufacturing technology known as "Well Tech PCB". The Company's
foreign patent filings have been made in selected countries,
including the Republic of China (Taiwan), Germany, the United
Kingdom, Ireland and France. The Company will continue to file
applications in certain foreign jurisdictions to secure
protection in those jurisdictions in accordance with the Patent
Cooperation Treaty and the Paris Convention for the Production of
Industrial Property (which allows such filings to relate back to
the original filing date in the United States) covering the
Company's technology and proposed products. To the extent
possible, the Company also intends to file patent applications
with respect to products and technology that it may develop in
the future.
There can be no assurance that any of the Company's pending
patent applications will ultimately result in an issued patent.
Moreover, the patent laws of other countries may differ from
those of the United States as to the patentability of the
Company's products or technology, and the degree of protection
afforded by foreign patents may be different from that in the
United States. The failure by the Company to obtain patents for
which applications are currently pending could have a material
adverse effect on the Company's ability to commercialize
successfully its proposed technology and products. Even if the
Company is able to obtain such patents, there can be no assurance
that any such patents will afford the Company commercially
significant protection for its technology or products. In
addition, other companies may independently develop equivalent or
superior technologies or products and may obtain patent or
similar rights with respect to them. Although the Company
believes that its technology has been independently developed and
that its technology does not infringe on the patents or violate
the proprietary rights of others, there can be no assurance that
any of the Company's technology or products, will not be
determined to infringe upon the patents or proprietary rights of
others, or that patents or proprietary rights of others will not
have an adverse effect on the ability of the Company to do
business. If the Company's technology or products were determined
to infringe on the patents, trademarks or proprietary rights of
others, the Company could, under certain circumstances, become
liable for damages, which also could have a material adverse
effect on the Company. Moreover, in the event that the Company's
technology or proposed products were deemed to infringe upon the
rights of others, the Company would be required to obtain
licenses to utilize such technology. There can be no assurance
that the Company would be able to obtain such licenses in a
timely manner or on acceptable terms and conditions, and the
failure to do so could have a material adverse effect on the
Company. If the Company were unable to obtain such licenses, it
could encounter significant delays in product market
introductions while it attempted to design around the infringed
upon patents or rights, or could find the development,
manufacture or sale of products requiring such licenses to be
foreclosed. In addition, patent disputes are common in the
computer industry and there can be no assurance that the Company
will have the financial resources to enforce or defend a patent
infringement or proprietary rights action.
The Company relies on confidentiality and nondisclosure
arrangements with its employees, consultants and others involved
with the Company's product and technological development efforts.
There can be no assurance that these agreements will provide
meaningful protection to the Company or that other companies will
not acquire information which the Company considers proprietary.
Moreover, there can be no assurance that other companies will not
independently develop know-how comparable or superior to that of
the Company.
The Company has registered the Archistrat and VSPA
trademarks with the U.S. Patent and Trademark Office and has
applied for appropriate trademark, copyright and other legal
protection for its product names, logos and other
identifications. There can be no assurance that the Company will
not be precluded by others from using any of such identifications
or creating proprietary rights with respect to them.
10. DEPENDENCE ON THE CRANE-PANDA LICENSING AGREEMENT;
POTENTIAL CONFLICTS OF INTEREST. Pursuant to a license agreement
entered into in January 1996 between the Company and Mr. Crane
(the "Crane-Panda License"), Mr. Crane has granted the Company
the nonexclusive right to utilize the Compass Connector, a key
component in the commercialization of the Company's Archistrat
Computers and the development and commercialization of Compass
PGA. The Crane-Panda License was executed in connection with the
conversion to a nonexclusive license of the 3M License described
below and supersedes an earlier license agreement between Mr.
Crane and the Company relating to the Compass Connector. Under
the Crane-Panda License, the Company is required to pay Mr. Crane
a royalty on any sales of Compass Connectors as discrete parts in
the amount of 5% of the net sales price for the first five years
of the term of the agreement, 2.5% of the net sales price for the
next five years of the term of the agreement and 2% of the net
sales price thereafter, provided that no royalty is payable until
aggregate net sales of the Compass Connector as discrete parts
exceed $100,000. The royalty rate will be reduced after the fifth
anniversary of the agreement if no patent remains in effect with
respect to the Compass Connector. No royalty is payable on sales
of the Compass Connector as incorporated in the Archistrat
Computers or other computer system or assembly. The Company may
grant sublicenses under the Crane-Panda License, but only for the
use of products as incorporated in the Archistrat Computers or
other computer system or assembly. To date, there have been no
sales requiring the payment of royalties to Mr. Crane under the
Crane-Panda License. The Crane-Panda License obligates the
Company to maintain proprietary information relating to the
Compass Connector on a confidential basis, notify Mr. Crane of
any evidence of infringement with respect to the Compass
Connector and related technology, and cooperate with Mr. Crane to
contest any such infringement. In the event that the Company
becomes bankrupt or insolvent or defaults in any of its material
obligations under the Crane-Panda License and fails to cure any
such defaults within specified cure periods, Mr. Crane may
terminate the Crane-Panda License. The Company is substantially
dependent upon the Crane-Panda License. The termination of the
agreement under any circumstances would have a material adverse
effect on the Company. There can be no assurance that conflicts
of interest will not arise with respect to the Crane-Panda
License or that such conflicts will be resolved in a manner
favorable to the Company. In addition, Mr. Crane retains
ownership of the Compass Connector technology, and has the right
to grant licenses to or otherwise transfer rights to the Compass
Connector technology to third parties.
In September 1992, Mr. Crane granted an exclusive license
(the "3M License") to Minnesota Mining and Manufacturing Co.
("3M") to develop, manufacture, use and sell the Compass
Connector other than as part of a computer system. In February
1996, Mr. Crane and 3M agreed to convert the 3M License to a
nonexclusive license. The 3M License provides in certain
circumstances for the payment of a royalty to Mr. Crane. As of
the date of this Prospectus, Mr. Crane had received no such
payments.
11. SUBSTANTIAL CONTROL BY MANAGEMENT. As of the date of
this Prospectus, officers and directors of the Company own of
record and beneficially approximately 34% of the issued and
outstanding shares of Common Stock and are thus able to exert
substantial influence over the policies and affairs of the
Company.
12. RISKS RELATING TO POTENTIAL INTERNATIONAL OPERATIONS.
Although the Company currently prices all of its international
sales in U.S. dollars, future sales or licensing of its products
or technologies outside the U.S. may be subject to the risks
associated with fluctuations in currency exchange rates. The
Company may also be subject to other risks associated with
international operations, including tariff regulations and
requirements for export licenses, particularly with respect to
the export of certain technologies (which licenses may on
occasion be delayed or difficult to obtain), unexpected changes
in regulatory requirements, longer accounts receivable
requirements, difficulties in managing international operations,
potentially adverse tax consequences, economic and political
instability, restrictions on repatriation of earnings, and the
burdens of complying with a wide variety of foreign laws. In
addition, the laws of certain countries do not protect the
Company's products and intellectual property rights to the same
extent as do the laws of the United States. There can be no
assurance that such factors will not have a material adverse
effect on the Company's future international sales or licenses
and, consequently, on the Company's business and operations as a
whole.
13. REGISTRATION RIGHTS; OUTSTANDING OPTIONS AND WARRANTS.
The Company has granted to Mr. Crane the right to include up to
approximately 496,000 of his shares of Common Stock (which volume
restrictions will be eliminated after May 16, 1999) each year in
certain Registration Statements which may be filed by the
Company. The possibility that substantial amounts of Common
Stock may be sold in the public market may adversely affect
prevailing market prices for the Common Stock and could impair
the Company's ability in the future to raise additional capital
through the sale of its equity securities.
As of September 30, 1997, the Company has reserved 2,209,321
shares of Common Stock for issuance upon the exercise of
warrants. In addition, the Company has reserved 1,012,882 shares
of Common Stock for issuance to employees, officers, directors
and consultants under its 1995 Employee Stock Incentive Plan,
1993 Performance Incentive Plan and Non-Employee Director Stock
Option Plan. The price which the Company may receive for the
Common Stock issuable upon exercise of such warrants and options
will, in all likelihood, be less than the market price of the
Common Stock at the time of such exercise. Consequently, for the
life of such warrants and options, the holders thereof may have
been given, at nominal cost, the opportunity to profit from a
rise in the market price of the Common Stock. The exercise of
all of the aforementioned securities may also adversely effect
the terms under which the Company could obtain additional equity
capital. Should a significant number of these securities be
exercised, the resulting increase in the amount of the Common
Stock in the public market may reduce the market price of the
Common Stock.
14. ANTITAKEOVER STATUTES. Florida has enacted
legislation that may deter or frustrate takeovers of the Company.
The Florida Control Share Act generally provides that shares
acquired in excess of certain specified thresholds, starting at
20%, will not possess any voting rights unless such voting rights
are approved by a majority vote of a corporation's disinterested
shareholders. The Florida Affiliated Transactions Act generally
requires supermajority approval by disinterested directors or
shareholders of certain specified transactions between a
corporation and holders of more than 10% of the outstanding
voting shares of the corporation or their affiliates.
15. POSSIBLE LACK OF RESOURCES OF SELLING SECURITYHOLDERS.
The Selling Securityholders may be deemed to be Underwriters
pursuant to the Securities Act, and in that regard may become
liable to the purchasers of the Common Stock offered hereby
pursuant to the terms of the Securities Act if certain provisions
of the Securities Act are not complied with by them. There can
be no assurance that any of the Selling Securityholders have the
financial resources to discharge any such liability.
16. GENERAL. Because of factors discussed above and other
factors, past financial performance should not be considered an
indicator of future performance. Investors should not use
historical trends to anticipate future results and should be
aware that the Company's financial condition may be subject to
wide fluctuations in response to quarter-to-quarter variations in
operating results, general conditions in the semiconductor
packaging and computer industries, changes in earnings estimates
and recommendations by analysts and other events.
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of
the Shares by the Selling Securityholders.
RECENT DEVELOPMENTS
DEVELOPMENTS CONCERNING VSPA PRODUCT. In September 1997,
the Company announced it had reached agreement with Grand
Traverse Stamping, a division of Alcoa Fujikura, Ltd.(a joint
venture between Alcoa and Fujikura) under which Grand Traverse
Stamping will supply interconnect pins for the Company's VSPA
semiconductor package. The Company also announced it had entered
into an agreement with Confederate Plastics, Inc. under which
Confederate Plastics will supply the molded frame made of liquid
crystal polymer for the VSPA semiconductor package.
In October 1997, the Company announced it had completed
construction of the first automated machine for the production of
the VSPA product. The Company also announced that it had
received a prototype order from Tamarack Microelectronics, Inc.,
a privately owned-manufacturer of data communications circuits
based in Taiwan.
CHANGE IN FISCAL YEAR. In September 1997, the Board of
Directors of the Company determined to change the fiscal year of
the Company from April 1 through March 31 to January 1 through
December 31. The Company will file an annual report on Form 10-K
with the Securities and Exchange Commission including financial
statements for the transition period (April 1, 1997 through
December 31, 1997).
ANNUAL MEETING. The annual meeting of Shareholders of the
Company was held on August 12, 1997. At the annual meeting, the
Shareholders, among other actions (i) approved an amendment to
the Company's Articles of Incorporation establishing a class of
preferred stock consisting of 2,000,000 shares, issuable in one
or more series and having such terms as are determined by the
Board of Directors; (ii) approved amendments to the Company's
Articles of Incorporation and By-laws providing for the
classification of the Board of Directors into three classes and
providing for amended procedures for changing the number of
directors, removing directors, filling vacancies on the Board and
other related matters; (iii) elected Claud L. Gingrich as a
Director for an initial term expiring at the 1998 annual meeting
of shareholders, Rao R. Tummala as a Director for an initial term
expiring at the 1999 annual meeting of shareholders and James
T.A. Wooder and Stanford W. Crane, Jr. as Directors for initial
terms expiring at the 2000 annual meeting of shareholders; and
(iv) approved an amendment to the Company's Nonemployee Directors
Stock Option Plan providing for the annual grant to each
participant in such plan of an option to purchase 4,000 shares of
the Common Stock of the Company.
MANAGEMENT AND PERSONNEL CHANGES. In September 1997,
William E. Ahearn, formerly Vice President of Technology of the
Company, was named Vice President and Chief Scientist of the
Company. In July 1997, Babar Hamirani resigned as Senior Vice
President of Systems Operations of the Company.
In August 1997, the Company hired Melissa Crane, wife of
Stanford W. Crane, Jr., as Director of Strategic Business. Ms.
Crane's annual salary is $100,000 per year. In September 1997,
Ms. Crane was granted an option to purchase 50,000 shares of
Common Stock of the Company at an exercise price of $6.13 per
share. Such options expire on September 19, 2007. Options to
purchase 10,000 of these shares of Common Stock are exercisable
six months from the date of grant and the remainder become
exercisable in equal annual installments on the first, second,
third and fourth anniversaries of grant.
SELLING SECURITYHOLDERS
All of the shares of Common Stock of the Company offered
hereby are being sold by the Selling Securityholders named below.
The Company will receive none of the proceeds from the sale of
shares offered hereby. To the best knowledge of the Company,
none of the Selling Securityholders beneficially owns 5% or more
of the Company's outstanding Common Stock and none of the Selling
Securityholders has held any office or maintained any material
relationship with the Company or its predecessors or affiliates
over the past three years.
The following table sets forth information concerning the
beneficial ownership of shares of Common Stock by the Selling
Securityholders as of September 30, 1997 and the number of such
shares included for sale in this Prospectus, assuming the sale of
all Shares being offered by this Prospectus. The Common Stock
offered hereby consists of (i) 42,667 and 27,429 shares,
respectively, issuable upon the exercise of warrants (the
"Warrants") granted by the Company to Dusseldorf Securities
Limited and Jefferies & Company, Inc. in connection with a
private placement by the Company of subordinated convertible
debentures completed on April 14, 1997, and (ii) up to 36,924
shares (the "IIRG Shares") issuable to International Investor
Relations Group, Inc. pursuant to a consulting agreement dated
June 9, 1997 (the "Consulting Agreement"). The Warrants are
exercisable during the period beginning April 14, 1997 and ending
April 2, 2002 at exercise prices of $6.75 per share, in the case
of the Warrant issued to Dusseldorf Securities Limited and $7.00
per share, in the case of the Warrant issued to Jefferies &
Company, Inc. Of the IIRG shares, 9,231 have been issued as of
the date hereof and, unless the Consulting Agreement is
terminated, 9,231 shares shall be issued to IIRG on each of
December 6, 1997, March 6, 1998 and June 6, 1998.
Shares Shares
Owned Shares Owned
Selling Prior to Offered After
Securityholders Offering Hereby Offering
- --------------- -------- ------- --------
Dusseldorf
Securities
Limited 73,585 42,667 30,918
Jefferies
& Company, Inc. 24,429 24,429 --
International
Investor
Relations
Group, Inc. 36,924 (1) 36,924 (1) --
- --------
(1) Assumes issuance by the Company of all of the IIRG Shares.
PLAN OF DISTRIBUTION
The Shares may be offered for sale from time to time by the
Selling Securityholders to various purchasers, or they may be
retained. The Selling Securityholders may elect to sell the
Shares in negotiated transactions at prices and on terms related
to the then-current market price or otherwise, or in market
transactions, or to pledgees, donees or other transferees, in
each case without the participation of underwriters, brokers or
dealers. The Selling Securityholders may also from time to time
offer the Shares through brokers, dealers or agents, or through
underwriters, who may receive underwriting discounts, concessions
or commissions from the Selling Securityholders and/or the
purchasers for whom they act as agent. In that event, the offers
or sales may be made (i) by a block trade in which a broker or
dealer, engaged for the purpose, will attempt to sell the Shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction, (ii) by purchases by a
broker or dealer as principal and resale by such broker or dealer
for its own account, (iii) by ordinary brokerage transactions or
transactions in which the broker solicits purchasers, (iv) with
the permission of the Company, in an underwritten transaction, or
(v) otherwise. In the event that brokers or dealers are engaged
by the Selling Securityholders, such brokers or dealers may
arrange for other brokers or dealers to participate.
Any Shares which qualify for sale pursuant to Rule 144 under
the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
In offering the Shares, the Selling Securityholders and any
broker-dealers and any other participating broker-dealers who
execute sales for the Selling Securityholders may be deemed to be
"underwriters" within the meaning of the Securities Act in
connection with such sales, and any profits realized by the
Selling Securityholders and the compensation of such broker-
dealers may be deemed to be underwriting discounts and
commissions.
The public offering of the Shares by the Selling
Securityholders will terminate on the earlier of (a) two years
from the date of this Prospectus, or (b) the date on which all
Shares have been sold by the Selling Securityholders.
The Company will pay certain expenses incidental to the
offering and sale of the Shares to the public estimated to be
approximately $15,000. The Company will not pay for, among other
expenses, selling expenses or underwriting discounts, if
applicable.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of The Panda Project,
Inc. for the year ended March 31, 1997 have been so incorporated
in reliance on the report (which contains an explanatory
paragraph relating to The Panda Project, Inc.'s ability to
continue as a going concern as described in Note 1 to the
financial statements) of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various expenses in
connection with the sale and distribution of the securities being
registered, other than the underwriting discounts and
commissions. All these expenses will be paid by the Company.
Nature of Expense
- -----------------
SEC registration fee................................. $ 275
Legal and accounting fees and expenses............... 10,000 *
Miscellaneous........................................ 4,775 *
--------
TOTAL $ 15,000*
========
* Estimated
Item 15. Indemnification of Directors and Officers. Florida
Business Corporation Act.
Section 607.0850(1) of the Florida Business Corporation Act
(the "FBCA") provides that a Florida corporation, such as the
Registrant, shall have the power to indemnify any person who is
or was a party to any proceeding (other than an action by, or in
the right of, the corporation), by reason of the fact that he is
or was a director, officer, employee or agent of the corporation
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
liability incurred in connection with such proceeding, including
any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action of proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 607.0850(2) of the FBCA provides that a Florida
corporation shall have the power to indemnify any person who is
or was a party to any proceeding by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses and amounts paid in settlement not
exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion,
actually and reasonably incurred in connection with the defense
or settlement of such proceeding, including any appeal thereof.
Such indemnification shall be authorized if such person acted in
good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation, except
that no indemnification shall be made under Section 607.0850(2)
in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable unless, and only to the
extent that, the court in which such proceeding was brought, or
any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such
court shall deem proper.
Section 607.0850 of the FBCA further provides that, to the
extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in
defense of any proceeding referred to in subsection (1) or
subsection (2), or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith; that
indemnification provided pursuant to Section 607.0850 is not
exclusive; and that the corporation may purchase and maintain
insurance on behalf of a director, officer, employee or agent of
the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status
as such whether or not the corporation would have the power to
indemnify him against such liabilities under Section 607.0850.
Notwithstanding the foregoing, Section 607.0850 of the FBCA
provides that indemnification of advancement of expenses shall
not be made to or on behalf of any director, officer, employee or
agent if a judgment or other final adjudication establishes that
his actions, or omissions to act, were material to the cause of
action so adjudicated and constitute: (a) a violation of the
criminal law, unless the director, officer, employee or agent had
reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful; (b) a
transaction from which the director, officer, employee or agent
derived an improper personal benefit; (c) in the case of a
director, a circumstance under which the liability provisions
regarding unlawful distributions are applicable; or (d) willful
misconduct or a conscious disregard for the best interests of the
corporation in a proceeding by or in the right of the corporation
to procure a judgment in its favor or in a proceeding by or in
the right of a shareholder.
Section 607.0831 of the FBCA provides that a director of a
Florida corporation is not personally liable for monetary damages
to the corporation or any other person for any statement, vote,
decision, or failure to act, regarding corporate management or
policy, by a director, unless: (a) the director breached or
failed to perform his duties as a director, and (b) the
director's breach of, or failure to perform, those duties
constitutes: (1) a violation of the criminal law, unless the
director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful;
(2) a transaction from which the director derived an improper
personal benefit, either directly or indirectly; (3) a
circumstance under which the liability provisions regarding
unlawful distributions are applicable; (4) in a proceeding by or
in the right of someone other than the corporation or a
shareholder, recklessness or an act or omission which was
committed in bad faith or with malicious purpose or in a manner
exhibiting wanton and willful disregard of human rights, safety
or property.
Articles of Incorporation of the Registrant
The Articles of Incorporation of the Registrant (the
"Articles") provide that, to the fullest extent permitted by
applicable law, as amended from time to time, the Registrant will
indemnify any person who is or was a party or is threatened to be
made a party to an action, suit or proceeding (whether civil,
criminal, administrative or investigative) by reason of the fact
that such person is or was a director, officer, employee or agent
of the Registrant or serves or served any other enterprise at the
request of the Registrant. This indemnification includes the
right to advancement of expenses when allowed pursuant to
applicable law.
In addition, the Articles provide that a director of the
Registrant shall not be personally liable to the Registrant or
its shareholders for monetary damages for breach of the
director's fiduciary duty. However, the Articles do not
eliminate or limit the liability of a director for any of the
following reasons: (i) a breach of the director's duty of loyalty
to the Registrant or its shareholders; (ii) acts or omissions not
in good faith or that involve intentional misconduct or knowing
violation of law; (iii) a violation under Section 607.0834 of the
FBCA (which imposes liability upon directors for unlawful
distributions); (iv) a transaction from which the director
derived an improper personal benefit; or (v) an act or omission
occurring before the effective date of the Articles.
Indemnification
The Registrant has entered into or intends to enter into
Indemnification Agreements with its directors (collectively, the
"Agreements") which provide that each director is entitled to
indemnification to the fullest extent permitted by applicable
law. Such indemnification will cover all expenses, liabilities,
judgments (including punitive and exemplary damages), penalties,
fines (including excise taxes relating to employee benefit plans
and civil penalties) and amounts paid in settlement which are
incurred or imposed upon the director if the director is a party
or threatened to be made a party to any threatened, pending or
completed action, suit or proceeding of any kind, whether civil,
criminal, administrative or investigative (including actions by
or in the right of the Registrant and any preliminary inquiry or
claim by any person or authority), by reason of the fact that the
director is or was a director, officer, employee or agent of the
Registrant or is or was serving at the Registrant's request as a
director, officer, employee or agent of another corporation
(including a subsidiary), partnership, joint venture, trust or
other enterprise against liability incurred in connection with
such proceeding, including any appeal thereof (collectively, the
"Covered Matters"). Pursuant to the Agreements, the directors
are presumed to be entitled to indemnification irrespective of
whether the Covered Matter involves allegations of intentional
misconduct, alleged violations of Section 16(b) of the Exchange
Act, alleged violations of Section 10(b) of the Exchange Act
(including Rule 10b-5 thereunder), breach of the director's
fiduciary duties (including duties of loyalty or care) or any
other claim.
In addition to the foregoing, the Company maintains a
director and officer liability insurance policy insuring
directors and officers of the Registrant against certain
liabilities.
Item 16. Exhibits.
See the Exhibit Index included immediately preceding the
Exhibits to this Registration Statement, which is incorporated
herein by reference.
Item 17. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") that are incorporated by reference in this
Registration Statement.
(2) That, for the purposes of determining any liability
under the Securities Act, each post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in
this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective;
and
(2) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boca Raton, State of
Florida, on this 31 day of October, 1997.
THE PANDA PROJECT, INC.
By: /s/ Stanford W. Crane, Jr.
---------------------------
Stanford W. Crane, Jr.
President
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of The Panda
Project, Inc., hereby severally constitute Stanford W. Crane,
Jr., C. Daryl Hollis and Gilbert B. Kaplan and any of them
singly, our true and lawful attorneys with full power to them,
and each of them singly, to sign for us and in our names in the
capacities indicated below, the Registration Statement on Form S-
3 filed herewith and any and all subsequent amendments to said
Registration Statement (including post-effective amendments,
exhibits thereto and other documents in connection therewith) and
any subsequent registration statement filed by the Registrant
pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, which relates to this Registration Statement, and to
file the same, with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange
Commission, and generally to do all such things in our names and
behalf in our capacities as officers and directors to enable The
Panda Project, Inc. to comply with all requirements of the
Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by said
attorneys, or any of them, to said Registration Statement and any
and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Stanford W. Crane, Jr.
- ---------------------- Chief Executive ) October 31, 1997
Stanford W. Crane, Jr. Officer, President )
and Director )
(Principal Executive )
Officer) )
/s/ C. Daryl Hollis )
- --------------------- Executive Vice ) October 31, 1997
C. Daryl Hollis President and )
Chief Financial )
Officer (Principal )
Financial and )
Accounting Officer) )
/s/ James T.A. Wooder )
- ---------------------- Director ) October 31, 1997
James T. A. Wooder )
)
)
/s/ Claud L. Gingrich )
- ---------------------- Director ) October 31, 1997
Claud L. Gingrich )
)
/s/ Rao R. Tummala )
- ---------------------- Director ) October 31, 1997
Rao R. Tummala )
<PAGE>
Exhibit Index
-------------
Exhibit Description of Exhibit Page
3.1 -- Amended and Restated Articles of
Incorporation of the Company,
as amended
3.2 -- Amended and Restated By-Laws of the
Company
4.1 -- Specimen Certificate of Common Stock of
the Company (filed as Exhibit 4.1 to the
Company's Registration Statement on
Form SB-2 (File No. 33-76694-A))
5.1 -- Opinion of Holland & Knight
23.1 -- Consent of Holland & Knight (included in
Exhibit 5.1)
23.2 -- Consent of Price Waterhouse LLP
24.1 -- Power of Attorney (included on page II-7)
- -----------------------
* Incorporated herein by reference.
Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE PANDA PROJECT, INC.
Pursuant to Section 607.1007 of the Florida Statutes, The
Panda Project, Inc., a Florida corporation (the "Corporation"),
certifies that:
(1) The original Articles of Incorporation of the
Corporation were filed with the Secretary of State of the State
of Florida on April 8, 1992.
(2) The Articles of Amendment to Articles of Incorporation
of the Corporation were filed with the Secretary of State of the
State of Florida on December 22, 1993.
(3) The Second Amendment to Articles of Incorporation of
the Corporation were filed with the Secretary of State of the
State of Florida on January 11, 1994.
(4) These Amended and Restated Articles of Incorporation
contain amendments requiring the approval of the holders of a
majority of the issued and outstanding shares of the common stock
of the Corporation. The holders of a majority of the issued and
outstanding shares of the Corporation's outstanding common stock
approved such amendments pursuant to a written consent dated as
of March 15, 1994. The number of votes cast for the amendment
was sufficient for approval by the holders of common stock of the
Corporation. These Amended and Restated Articles of
Incorporation were duly adopted by the Board of Directors of the
Corporation at a meeting held March 14, 1994.
The text of the Articles of Incorporation of the Corporation
is hereby amended and restated in its entirety, effective as of
the date of filing with the Secretary of State, to read as
follows:
ARTICLE I - NAME
The name of the corporation is The Panda Project, Inc.
(hereinafter called the "Corporation").
ARTICLE II - PURPOSE
The Corporation is organized for the purpose of transacting
any or all lawful business for which corporations may be
incorporated under The Florida Business Corporation Act.
ARTICLE III - CAPITAL STOCK
The aggregate number of shares which the Corporation shall
have the authority to issue is 20,000,000 shares of Common Stock,
par value $0.01 per share.
Except as otherwise provided by law, the shares of stock of
the Corporation, regardless of class, may be issued by the
Corporation from time to time in such amounts, for such
consideration and for such corporate purposes as the Board of
Directors may from time to time determine.
ARTICLES IV - REGISTERED AGENT
The street address of the registered office of the
Corporation is 6421 Congress Avenue, Suite 114, Boca Raton,
Florida 33487; and the name of the registered agent of the
Corporation at that address is Mr. Stanford W. Crane, Jr.
ARTICLE V - PRINCIPAL PLACE OF BUSINESS
The principal place of business and the mailing address of
the Corporation is 6421 Congress Avenue, Suite 114, Boca Raton,
Florida 33487.
ARTICLE VI - INDEMNIFICATION
The corporation shall indemnify to the fullest extent
authorized or permitted by the Florida Business Corporation Act,
as amended from time to time (the "Act"), including any
additional indemnification rights allowable pursuant to future
amendments to the Act, any person, and his or her heirs,
executors, administrators and legal representatives, who is made
or threatened to be made a party to an action, suit or proceeding
(whether civil, criminal, administrative or investigative) by
reason of the fact that such person is or was a director,
officer, employee or agent of the Corporation or serves or served
any other enterprise at the request of the Corporation (an
"Indemnifiable Party"). Such indemnification shall include,
without limitation, the advancement of expenses when allowed
pursuant to applicable law.
In addition, a director of the Corporation shall not be
personally liable to the Corporation or its shareholders for
monetary damages for breach of the director's fiduciary duty.
However, this Article VI shall not eliminate or limit the
liability of a director for any of the following:
a breach of the director's duty of loyalty to the
Corporation or its shareholders;
acts or omissions not in good faith or that involve
intentional misconduct or knowing violation of law;
a violation under Section 607.0834 of the Act;
a transaction from which the director derived an improper
personal benefit; or
an act or omission occurring before the effective date of
this Article VI.
Any repeal or modification of this Article VI by the
shareholders of the Corporation shall not adversely affect any
right or protection of any director of the Corporation existing
at the time of, or for or with respect to, any acts or omissions
occurring before such repeal or modification.
The foregoing director liability provisions are intended to
be in addition to, and not in lieu or in limitation of, the
director liability standards set forth in Section 607.0831 of the
Act, and no provision of this Article VI shall be construed to
limit the ability of the Company to indemnify or make advances to
an Indemnifiable Party under the Act.
IN WITNESS WHEREOF, the undersigned officer and director of
the Corporation has executed these Amended and Restated Articles
of Incorporation as of March 15, 1994.
THE PANDA PROJECT, INC.
a Florida corporation
/s/ Drew L. Taylor
By: Drew L. Taylor
Its: Vice President and Director
<PAGE>
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
THE PANDA PROJECT, INC.
Pursuant to Section 607.1007 of the Florida Statutes, The
Panda Project, Inc., a Florida corporation (the "Corporation"),
certifies that:
(1) The original Articles of Incorporation of the
Corporation were filed with the Secretary of State of the State
of Florida on April 8, 1992.
(2) The Articles of Amendment to Articles of Incorporation
of the Corporation were filed with the Secretary of State of the
State of Florida on December 22, 1993.
(3) The Second Amendment to Articles of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Florida on January 11, 1994.
(4) Amended and Restated Articles of Incorporation of the
Corporation were filed with the Secretary of State of the State
of Florida on March 17, 1994.
(5) These Articles of Amendment of Amended and Restated
Articles of Incorporation contain an amendment which was approved
by the shareholders of the Corporation at a meeting on August 16,
1996 by the number of votes sufficient for approval by the
shareholders of the Corporation. These Articles of Amendment of
Amended and Restated Articles of Incorporation were duly adopted
by the Board of Directors of the Corporation at a meeting held
June 19, 1996.
The text of the Amended and Restated Articles of Incorporation
of the Corporation is hereby amended, effective as of the date of
filing of these Articles of Amendment with the Secretary of
State, by deleting Article III of the Amended and Restated
Articles of Incorporation in its entirety and inserting in lieu
thereof the following:
ARTICLE III - CAPITAL STOCK
The aggregate number of shares which the Corporation shall
have the authority to issue is 50,000,000 shares of Common Stock,
par value $0.01 per share.
Except as otherwise provided by law, the shares of stock of
the Corporation, regardless of class, may be issued by the
Corporation from time to time in such amounts, for such
consideration and for such corporate purposes as the Board of
Directors may from time to time determine.
IN WITNESS WHEREOF, the undersigned officer of the
Corporation has executed these Articles of Amendment of Amended
and Restated Articles of Incorporation as of August 23, 1996.
THE PANDA PROJECT, INC.
a Florida corporation
By: /s/ C. Daryl Hollis
--------------------------
C. Daryl Hollis
Vice President
<PAGE>
SECOND ARTICLES OF AMENDMENT
OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
THE PANDA PROJECT, INC.
Pursuant to Section 607.1007 of the Florida Statutes, The
Panda Project, Inc., a Florida corporation (the "Corporation"),
certifies that:
(1) The original Articles of Incorporation of the
Corporation were filed with the Secretary of State of the State
of Florida on April 8, 1992.
(2) The Articles of Amendment to Articles of Incorporation
of the Corporation were filed with the Secretary of State of the
State of Florida on December 22, 1993.
(3) The Second Amendment to Articles of Incorporation of the
Corporation was filed with the Secretary of State of the State of
Florida on January 11, 1994.
(4) Amended and Restated Articles of Incorporation of the
Corporation were filed with the Secretary of State of the State
of Florida on March 17, 1994.
(5) Articles of Amendment to such Amended and Restated
Articles of Incorporation were filed with the Secretary of State
of the State of Florida on September 6, 1996.
(6) These Second Articles of Amendment of Amended and
Restated Articles of Incorporation contain amendments which were
approved by the shareholders of the Corporation at a meeting on
August 12, 1997 by the number of votes sufficient for approval by
the shareholders of the Corporation. These Second Articles of
Amendment of Amended and Restated Articles of Incorporation were
duly adopted by the Board of Directors of the Corporation at a
meeting held May 8, 1997.
The text of the Amended and Restated Articles of
Incorporation of the Corporation is hereby amended, effective as
of the date of filing of these Articles of Amendment with the
Secretary of State:
1. By deleting Article III of the Amended and Restated
Articles of Incorporation in its entirety and inserting in lieu
thereof the following:
ARTICLE III--CAPITAL STOCK
A. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 52,000,000
shares, consisting of (i) 50,000,000 shares of Common Stock, $.01
par value (the "Common Stock") and (ii) 2,000,000 shares of
Preferred Stock, $.01 par value ("Preferred Stock").
B. The designations, powers, preferences and relative,
participating, optional or other special rights of, and the
qualifications, limitations or restrictions upon, each class or
series of stock shall be as follows:
1. COMMON STOCK.
(a) General. The voting, dividend and liquidation rights
of the holders of the Common Stock are subject to and qualified
by the rights of the holders of the Preferred Stock of any series
as may be designated by the Board of Directors upon any issuance
of the Preferred Stock of any series.
(b) Voting. The holders of the Common Stock are entitled
to one vote for each share held at all meetings of shareholders
(and written actions in lieu of meetings). There shall be no
cumulative voting.
(c) Dividends. Dividends may be declared and paid on the
Common Stock from funds lawfully available therefor as and when
determined by the Board of Directors and subject to any
preferential dividend rights of any then outstanding Preferred
Stock.
(d) Liquidation. Upon the dissolution or liquidation of
the Corporation, whether voluntary or involuntary, holders of
Common Stock will be entitled to receive all assets of the
Corporation available for distribution to its shareholders,
subject to any preferential rights of any then outstanding
Preferred Stock.
2. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or
more series, each of such series to have such terms as stated or
expressed herein and in the resolution or resolutions providing
for the issue of such series adopted by the Board of Directors of
the Corporation as hereinafter provided. Any shares of Preferred
Stock which may be redeemed, purchased or acquired by the
Corporation may be reissued except as otherwise provided by law.
Different series of Preferred Stock shall not be construed to
constitute different classes of shares for the purposes of voting
by classes unless expressly provided.
Authority is hereby expressly granted to the Board of
Directors from time to time to issue the Preferred Stock in one
or more series, and in connection with the creation of any such
series, by resolution or resolutions providing for the issue of
the shares thereof, to determine and fix such voting powers, full
or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special
rights, and qualifications, limitations or restrictions thereof,
including without limitation thereof, dividend rights, conversion
rights, redemption privileges and liquidation preferences, as
shall be stated and expressed in such resolutions, all to the
full extent now or hereafter permitted by the Florida Business
Corporation Act. Except as provided herein or to the extent
class or series voting is otherwise required by law or agreement,
without limiting the generality of the foregoing, the resolutions
providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be
junior to the Preferred Stock of any other series to the extent
permitted by law. Except as provided herein or to the extent
class or series voting is otherwise required by law or agreement,
no vote of the holders of the Preferred Stock or Common Stock
shall be a prerequisite to the issuance of any shares of any
series of the Preferred Stock authorized by and complying with
the conditions of the Articles of Incorporation, the right to
have such vote being expressly waived by all present and future
holders of the capital stock of the Corporation.
2. By adding the following as new Article VII:
This Article is inserted for the management of the business
and for the conduct of the affairs of the Corporation, and it is
expressly provided that it is intended to be in furtherance and
not in limitation or exclusion of the powers conferred by the
statutes of Florida.
A. Number of Directors. The number of directors which shall
constitute the whole Board of Directors shall be determined by
resolution of a majority of the Board of Directors, but in no
event shall be less than three nor more than nine. The number of
directors may be decreased at any time and from time to time by a
majority of the directors then in office, but only to eliminate
vacancies existing by reason of death, resignation, removal or
expiration of the term of one or more directors. The directors
shall be elected at the annual meeting of shareholders by such
shareholders as have the right to vote on such election.
Directors need not be shareholders of the Corporation.
B. Classes of Directors. The Board of Directors shall be and
is divided into three classes: Class I, Class II and Class III.
No one class shall have more than one director more than any
other class. If a fraction is contained in the quotient arrived
at by dividing the authorized number of directors by three, then,
if such fraction is one-third, the extra director shall be a
member of Class III and, if such fraction is two-thirds, one of
the extra directors shall be a member of Class II and the other
extra director shall be a member of Class III, unless otherwise
provided for from time to time by resolution adopted by a
majority of the Board of Directors.
C. Terms of Office. Each director shall serve for a term
ending on the date of the third annual meeting following the
annual meeting at which such director was elected; provided,
however, that each initial director in Class I shall serve for a
term ending on the date of the 1998 annual meeting of
shareholders; each initial director in Class II shall serve for a
term ending on the date of the 1999 annual meeting of
shareholders; and each initial director in Class III shall serve
for a term ending on the date of the 2000 annual meeting of
shareholders.
D. Allocation of Directors Among Classes in the Event of
Increases or Decreases in the Number of Directors. In the event
of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall
nevertheless continue as director of the class of which he is a
member until the expiration of his current term or his prior
death, retirement, or resignation and (ii) the newly created or
eliminated directorships resulting from such increase or decrease
shall be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent
possible, consistent with the foregoing rule, any newly created
directorships shall be added to those classes whose terms of
office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be
subtracted from those classes whose terms of office are to expire
at the earliest dates following such allocation, unless otherwise
provided for from time to time by resolution adopted by a
majority of the directors then in office, although less than a
quorum.
E. Tenure. Notwithstanding any provisions to the contrary
contained herein, each director shall hold office until his
successor is elected and qualified, or until his earlier death,
resignation or removal.
F. Vacancies. Any vacancy in the Board of Directors, however
occurring, including a vacancy resulting from an enlargement of
the Board, may be filled only by vote of a majority of the
directors then in office, although less than a quorum, or by a
sole remaining director. A director elected to fill a vacancy
shall be elected for the unexpired term of his predecessor in
office, if applicable, and a director chosen to fill a position
resulting from an increase in the number of directors shall hold
office until the next election of the class for which such
director shall have been chosen and until this successor is
elected and qualified, or until his earlier death, resignation or
removal.
G. Quorum. A majority of the total number of the whole Board
of Directors shall constitute a quorum at all meetings of the
Board of Directors. In the event one or more of the directors
shall be disqualified to vote at any meeting, then the required
quorum shall be reduced by one for each such director so
disqualified; provided, however, that in no case shall less than
one-third (1/3) of the number so fixed constitute a quorum. In
the absence of a quorum at any such meeting, a majority of the
directors present may adjourn the meeting from time to time
without further notice other than announcement at the meeting,
until a quorum shall be present.
H. Action at Meeting. At any meeting of the Board of
Directors at which a quorum is present, the vote of a majority of
those present shall be sufficient to take any action, unless a
different vote is specified by law or the Corporation's Articles
of Incorporation or By Laws.
I. Removal. Any one or more of the directors may be removed,
with or without cause, by the holders of a majority of the shares
then entitled to vote at an election of directors; provided that,
if and for so long as the Board of Directors is classified
pursuant to Section 607.0806 of the Florida Business Corporation
Act, or any successor statute, shareholders may effect such
removal only for cause.
J. Amendments to Article. Notwithstanding any other
provisions of law, these Amended and Restated Articles of
Incorporation or the Corporation's By Laws, as amended, and
notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (662/3%) of the votes which all
the shareholders would be entitled to cast at any annual election
of directors or class of directors shall be required to amend or
repeal, or to adopt any provision inconsistent with, this Article
VII.
IN WITNESS WHEREOF, the undersigned officer of the Corportion
has executed these Second Articles of Amendment of Amended and
Restated Articles of Incorporation as of August 20, 1997.
THE PANDA PROJECT, INC.
a Florida corporation
By:
---------------------------
C. Daryl Hollis
Executive Vice President
Exhibit 3.2
AMENDED AND RESTATED BY-LAWS
OF
THE PANDA PROJECT, INC.
ARTICLE I. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders of this corporation shall be held at the time and
place designated by the Board of Directors of the corporation.
The annual meeting shall be held within four months after the
close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen
months after the last preceding annual meeting of shareholders or
as soon thereafter as practicable. Business transacted at the
annual meeting shall include the election of Directors of the
corporation.
Section 2. Special Meetings. Special meetings of the
shareholders shall be held when directed by the President or the
Board of Directors, or when requested in writing by the holders
of not less than ten percent of all the shares entitled to vote
at the meeting. A meeting requested by shareholders shall be
called for a date not less than ten nor more than sixty days
after the request is made, unless the shareholders requesting the
meeting designate a later date. The call for the meeting shall
be issued by the Secretary, unless the President, Board of
Directors, or shareholders requesting the meeting shall designate
another person to do so.
Section 3. Place. Meetings of shareholders may be held
within or without the State of Florida.
Section 4. Notice. Written notice stating the place, day
and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than sixty days before the
meeting, either personally or by first class mail, by or at the
direction of the President, the Secretary, or the Officer or
persons calling the meeting to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall
be deemed to be delivered when deposited in the United States
mail addressed to the shareholder at his address as it appears on
the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings. When a meeting is
adjourned to another time or place, it shall not be necessary to
give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted on the
original date of the meeting. If, however, after the adjournment
the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given as
provided in this section to each shareholder of record on the new
record date entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the
stock transfer books shall be closed for a stated period but not
to exceed, in any case, sixty days. If the stock transfer books
shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days immediately
preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any
determination of shareholders, such date in any case to be not
more than sixty days and, in case of a meeting of shareholders,
not less than ten days prior to the date on which the particular
action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to
notice or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record for such
determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof, unless the Board of Directors fixes a new record date
for the adjourned meeting.
Section 7. Voting Record. The Officers or agent having
charge of the stock transfer books for shares of the corporation
shall make, at least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to
vote at such meeting or any adjournment thereof, with the address
of and the number and class and series, if any, of shares held by
each. The list, for a period of ten days prior to such meeting,
shall be kept on file at the registered office of the
corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar
of the corporation and any shareholder shall be entitled to
inspect the list at any time during the usual business hours.
The list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been
substantially complied with, the meeting on demand of any
shareholder in person or by proxy, shall be adjourned until the
requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. Except as
otherwise provided by law, the Articles of Incorporation or these
By-Laws, a majority of the shares entitled to vote, represented
in person or by proxy, shall constitute a quorum at a meeting of
shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
shares of such class or series shall constitute a quorum for the
transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority
of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the shareholders unless
otherwise provided by law or the Articles of Incorporation.
After a quorum has been established at a shareholders'
meeting, the subsequent withdrawal of shareholders, so as to
reduce the number of shareholders entitled to vote at the meeting
below the number required for a quorum, shall not affect the
validity of any action taken at the meeting or any adjournment
thereof.
Section 9. Voting of Shares. Except as otherwise provided
by law, the Articles of Incorporation or these By-Laws, each
outstanding share, regardless of class, shall be entitled to one
vote on each matter submitted to a vote at a meeting of
shareholders.
Treasury shares, shares of stock of this corporation owned
by another corporation the majority of the voting stock of which
is owned or controlled by this corporation, and shares of stock
of this corporation held by it in a fiduciary capacity shall not
be voted, directly or indirectly, at any meeting, and shall not
be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed
in writing by the shareholder or his duly authorized
attorney-in-fact.
Except as otherwise provided by law, the Articles of
Incorporation or these By-Laws, at each election for Directors
every shareholder entitled to vote at such election shall have
the right to vote, in person or by proxy, the number of shares
owned by him for as many persons as there are Directors to be
elected at that time and for whose election he has a right to
vote.
Shares standing in the name of another corporation, domestic
or foreign, may be voted by the Officer, agent, or proxy
designated by the By-Laws of the corporate shareholder; or, in
the absence of any applicable By-Laws, by such person as the
Board of Directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a
certified copy of the By-Laws or other instrument of the
corporate shareholder. In the absence of any such designation,
or in case of conflicting designation by the corporate
shareholder, the Chairman of the Board, President, any Vice
President, Secretary and Treasurer of the corporate shareholder
shall be presumed to possess, in that order, authority to vote
such shares.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority so to do be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee or his nominee
shall be entitled to vote the shares to transferred.
On or after the date on which a written notice of redemption
of redeemable shares has been mailed to the holders thereof and a
sum sufficient to redeem such shares has been deposited with a
bank or trust company with irrevocable instructions and authority
to pay the redemption price to the holders thereof upon surrender
of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding
shares.
Section 10. Proxies. Every shareholder entitled to vote at
a meeting of shareholders or to express consent or dissent
without a meeting or a shareholders' duly authorized
attorney-in-fact may authorize another person or persons to act
for him by proxy.
Every proxy must be signed by the shareholder or his
attorney-in-fact. No proxy shall be valid after the expiration
of eleven months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of
the shareholder executing it, except as otherwise provided by
law.
The authority of the holder of a proxy to act shall not be
revoked by the incompetence or death of the shareholder who
executed the proxy unless, before the authority is exercised,
written notice of an adjudication of such incompetence or of such
death is received by the corporate officer responsible for
maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or
more persons and does not otherwise provide, a majority of them
present at the meeting, or if only one is present then that one,
may exercise all the powers conferred by the proxy; but if the
proxy holders present at the meeting are equally divided as to
the right and manner of voting in any particular case, the voting
of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint
in writing a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of
this corporation may create a voting trust for the purpose of
conferring upon a trustee or trustees the right to vote or
otherwise represent their shares, as provided by law. Where the
counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been
deposited with the corporation as provided by law, such documents
shall be subject to the same right of examination by a
shareholder of the corporation, in person or by agent or
attorney, as are the books and records of the corporation, and
such counterpart and such copy of such record shall be subject to
examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time
for any proper purpose.
Section 12. Shareholders' Agreements. Two or more
shareholders, or this corporation may enter an agreement
providing for the exercise of voting rights in the manner
provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall
impair the right of this corporation to treat the shareholders of
record as entitled to vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any
action required by law, these By-Laws, or the Articles of
Incorporation of this corporation to be taken at any annual or
special meeting of shareholders of the corporation, or any action
which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were
present and voted. If any class of shares is entitled to vote
thereon as a class, such written consent shall be required of the
holders of a majority of the shares of each class of shares
entitled to vote as a class thereon and of the total shares
entitled to vote thereon.
Within ten days after obtaining such authorization by
written consent, notice shall be given to those shareholders who
have not consented in writing. The notice shall fairly summarize
the material features of the authorized action and, if the action
be a merger, consolidation or sale or exchange of assets for
which dissenters' rights are provided under the Florida Business
Corporation Act, the notice shall contain a clear statement of
the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further
provisions of the Florida Business Corporation Act regarding the
rights of dissenting shareholders.
ARTICLE II. DIRECTORS
Section 1. Function. All corporate powers shall be
exercised by or under the authority of, and the business and
affairs of a corporation shall be managed under the direction of,
the Board of Directors.
Section 2. Qualification. Directors need not be residents
of this state or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have
authority to fix the compensation of Directors.
Section 4. Duties of Directors. A Director shall perform
his duties as a Director, including his duties as a member of any
committee of the Board upon which he may serve, in good faith, in
a manner he reasonably believes to be in the best interests of
the corporation, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances.
In performing his duties, a Director shall be entitled to
rely on information, opinions, reports or statements, including
financial statements and other financial data, in each case
prepared or presented by:
(a) one or more Officers or employees of the corporation
whom the Director reasonably believes to be reliable and
competent in the matters presented,
(b) counsel, public accountants or other persons as to
matters which the Director reasonably believes to be within such
person's professional or expert competence, or
(c) a committee of the Board upon which he does not
serve, duly designated in accordance with a provision of the
Articles of Incorporation or the By-Laws, as to matters within
its designated authority, which committee the Director reasonably
believes to merit confidence.
A Director shall not be considered to be acting in good
faith if he has knowledge concerning the matter in question that
would cause such reliance described above to be unwarranted.
A person who performs his duties in compliance with this
section shall have no liability by reason of being or having been
a Director of the corporation.
Section 5. Presumption of Assent. A Director of the
corporation who is present at a meeting of its Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless he votes
against such action or abstains from voting in respect thereto
because of an asserted conflict of interest.
Section 6. Number. The number of directors which shall
constitute the whole Board of Directors shall be determined by
resolution of a majority of the Board of Directors, but in no
event shall be less than three nor more than nine. The number of
directors may be decreased at any time and from time to time by a
majority of the directors then in office, but only to eliminate
vacancies existing by reason of death, resignation, removal or
expiration of the term of one or more directors. The directors
shall be elected at the annual meeting of shareholders by such
shareholders as have the right to vote on such election.
Directors need not be shareholders of the Corporation.
Section 7. Classes of Directors. The Board of Directors
shall be and is divided into three classes: Class I, Class II
and Class III. No one class shall have more than one director
more than any other class. If a fraction is contained in the
quotient arrived at by dividing the authorized number of
directors by three, then, if such fraction is one-third, the
extra director shall be a member of Class III and, if such
fraction is two-thirds, one of the extra directors shall be a
member of Class II and the other extra director shall be a member
of Class III, unless otherwise provided for from time to time by
resolution adopted by a majority of the Board of Directors.
Section 8. Terms of Office. Each director shall serve for
a term ending on the date of the third annual meeting following
the annual meeting at which such director was elected; provided,
however, that each initial director in Class I shall serve for a
term ending on the date of the annual meeting next following the
end of the Corporation's fiscal year ending March 31, 1998; each
initial director in Class II shall serve for a term ending on the
date of the annual meeting next following the end of the
Corporations fiscal year ending March 31, 1999; and each initial
director in Class III shall serve for a term ending on the date
of the annual meeting next following the end of the Corporation's
fiscal year ending March 31, 2000.
Section 9. Allocation of Directors Among Classes in the
Event of Increases or Decreases in the Number of Directors. In
the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall
nevertheless continue as director of the class of which he is a
member until the expiration of his current term or his prior
death, retirement, or resignation and (ii) the newly created or
eliminated directorships resulting from such increase or decrease
shall be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more
than one director more than any other class. To the extent
possible, consistent with the foregoing rule, any newly created
directorships shall be added to those classes whose terms of
office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be
subtracted from those classes whose terms of office are to expire
at the earliest dates following such allocation, unless otherwise
provided for from time to time by resolution adopted by a
majority of the directors then in office, although less than a
quorum.
Section 10. Tenure. Notwithstanding any provisions to the
contrary contained herein, each director shall hold office until
his successor is elected and qualified, or until his earlier
death, resignation or removal.
Section 11. Vacancies. Any vacancy in the Board of
Directors, however occurring, including a vacancy resulting from
an enlargement of the Board, may be filled only by vote of a
majority of the directors then in office, although less than a
quorum, or by a sole remaining director. A director elected to
fill a vacancy shall be elected for the unexpired term of his
predecessor in office, if applicable, and a director chosen to
fill a position resulting from an increase in the number of
directors shall hold office until the next election of the class
for which such director shall have been chosen and until this
successor is elected and qualified, or until his earlier death,
resignation or removal.
Section 12. Quorum. A majority of the total number of the
whole Board of Directors shall constitute a quorum at all
meetings of the Board of Directors. In the event one or more of
the directors shall be disqualified to vote at any meeting, then
the required quorum shall be reduced by one for each such
director so disqualified; provided, however, that in no case
shall less than one-third (1/3) of the number so fixed constitute
a quorum. In the absence of a quorum at any such meeting, a
majority of the directors present may adjourn the meeting from
time to time without further notice other than announcement at
the meeting, until a quorum shall be present.
Section 13. Action at Meeting. At any meeting of the
Board of Directors at which a quorum is present, the vote of a
majority of those present shall be sufficient to take any action,
unless a different vote is specified by law or the Corporation's
Articles of Incorporation or By Laws.
Section 14. Removal. Any one or more of the directors
may be removed, with or without cause, by the holders of a
majority of the shares then entitled to vote at an election of
directors; provided that, if and for so long as the Board of
Directors is classified pursuant to Section 607.0806 of the
Florida Business Corporation Act, or any successor statute,
shareholders may effect such removal only for cause.
Section 15. Director Conflicts of Interest. No contract or
other transaction between this corporation and one or more of its
Directors or any other corporation, firm, association or entity
in which one or more of the Directors are Directors or Officers
or are financially interested, shall be either void or voidable
because of such relationship or interest or because such Director
or Director or Directors are present at the meeting of the Board
of Directors or a committee thereof which authorizes, approves or
ratifies such contract or transaction or because his or their
votes are counted for such purpose, if:
(a) The fact of such relationship or interest is
disclosed or known to the Board of Directors or committee which
authorizes, approves or ratifies the contract or transaction by a
vote or consent sufficient for the purpose without counting the
votes or consents of such interested Directors; or
(b) The fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they
authorize, approve or ratify such contract or transaction by vote
or written consent; or
(c) The contract or transaction is fair and reasonable
as to the corporation at the time it is authorized by the Board,
a committee or the shareholders.
Common or interested Directors may be counted in determining
the presence of a quorum at a meeting of the Board of Directors
or a committee thereof which authorizes, approves or ratifies
such contract or transaction.
Section 16. Executive and Other Committees. The Board of
Directors, by resolution adopted by a majority of the full Board
of Directors, may designate from among its members an executive
committee and one or more other committees each of which, to the
extent provided in such resolution, shall have and may exercise
all the authority of the Board of Directors, except that no
committee shall have the authority to:
(a) approve or recommend to shareholders actions or
proposals required by law to be approved by shareholders,
(b) designate candidates for the office of Director, for
purposes of proxy solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any
committee thereof,
(d) amend the By-Laws,
(e) authorize or approve the reacquisition of shares
unless pursuant to a general formula or method specified by the
Board of Directors, or
(f) authorize or approve the issuance or sale of, or any
contract to issue or sell, shares or designate the terms of a
series of a class of shares, except that the Board of Directors,
having acted regarding general authorization for the issuance or
sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general
formula or method specified by the Board of Directors, by
resolution or by adoption of a stock option or other plan,
authorize a committee to fix the terms of any contract for the
sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price,
the rate or manner of payment of dividends, provisions for
redemption, sinking fund, conversion, voting or preferential
rights, and provisions for other features of a class of shares,
or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the
terms thereof and to authorize the statement of the terms of a
series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance
with this section, may designate one or more Directors as
alternate members of any such committee, who may act in the place
and stead of any absent member or members at any meeting of such
committee.
Section 17. Place of Meetings. Regular and special
meetings of the Board of Directors may be held within or without
the State of Florida.
Section 18. Time, Notice and Call of Meetings. Regular
meetings of the Board of Directors shall be held without notice
immediately following the annual meeting of shareholders.
Written notice of the time and place of special meetings of the
Board of Directors shall be given to each Director by either
personal delivery, telegram or cablegram at least two days before
the meeting or by notice mailed to the Director at least five
days before the meeting.
Notice of a meeting of the Board of Directors need not be
given to any Director who signs a waiver of notice either before
or after the meeting. Attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting and waiver of
any and all obligations to the place of the meeting, the time of
the meting, or the manner in which it has been called or
convened, except when a Director states, at the beginning of the
meeting, any objection to the transaction of business because the
meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting.
A majority of the Directors present, whether or not a quorum
exists, may adjourn any meeting of the Board of Directors to
another time and place. Notice of any such adjourned meeting
shall be given to the Directors who were not present at the time
of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment,
to the other Directors.
Meetings of the Board of Directors may be called by the
Chairman of the Board, by the President of the corporation, or by
any two Directors.
Members of the Board of Directors may participate in a
meeting of such Board by means of a conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in
person at a meeting.
Section 19. Action Without a Meeting. Any action required
to be taken at a meeting of the Directors of a corporation, or
any action which may be taken at a meeting of the Directors or a
committee thereof, may be taken without a meeting if a consent in
writing, setting forth the action so to be taken, signed by all
of the Directors, or all the members of the committee, as the
case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same
effect as a unanimous vote.
Section 20. Amendments to Article. Notwithstanding any
other provisions of law, the Articles of Incorporation or these
By Laws, and notwithstanding the fact that a lesser percentage
may be specified by law, the affirmative vote of the holders of
at least sixty-six and two-thirds percent (66-2/3%) of the votes
which all the shareholders would be entitled to cast at any
annual election of directors or class of directors shall be
required to amend or repeal, or to adopt any provision
inconsistent with, this Article II.
ARTICLE III. OFFICERS
Section 1. Officers. The Officers of this corporation
shall consist of a President, a Secretary and a Treasurer, each
of whom shall be elected by the Board of Directors. Such other
Officers and Assistant Officers and agents as may be deemed
necessary may be elected or appointed by the President from time
to time. Any two or more offices may be held by the same person.
Section 2. Duties. The Officers of this corporation shall
have the following duties:
The President shall be the chief executive officer of the
corporation, shall have general and active management of the
business and affairs of the corporation subject to the directions
of the Board of Directors, and shall preside at all meetings of
the shareholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of
the corporate records except the financial records, shall record
the minutes of all meetings of the shareholders and Board of
Directors, send all notices of meetings out, and perform such
other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of
receipts and disbursements and render accounts thereof at the
annual meetings of shareholders and whenever else required by the
Board of Directors or the President, and shall perform such other
duties as may be prescribed by the Board of Directors or the
President.
Section 3. Removal of Officers. Any Officer or agent
elected or appointed by the Board of Directors may be removed by
the Board whenever in its judgment the best interests of the
corporation will be served thereby; any officer other than the
President may be removed by the President and, in the case of the
Secretary or Treasurer, a person appointed to fill such office by
the President subject to ratification by the Board at its next
meeting.
Any Officer or agent elected by the shareholders may be
removed only by vote of the shareholders, unless the shareholders
shall have authorized the Directors to remove such Officer or
agent.
Any vacancy, however occurring, in any office may be filled
by the Board of Directors, unless the By-Laws shall have
expressly reserved such power to the shareholders.
Removal of any Officer shall be without prejudice to the
contract rights, if any, of the person so removed; however,
election or appointment of an Officer or agent shall not of
itself create contract rights.
Section 4. Compensation. The compensation of the
President, Secretary, Treasurer and such other Officers elected
or appointed by the Board of Directors shall be fixed by the
Board of Directors and may be changed from time to time by a
majority vote of the Board. The fact that an Officer is also a
Director shall not preclude such person from receiving
compensation as either a Director of Officer, nor shall it affect
the validity of any resolution by the Board of Directors fixing
such compensation. The President shall have authority to fix the
salaries of all employees of the corporation other than Officers
elected or appointed by the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
Section 1. Issuance. Every holder of shares in this
corporation shall be entitled to have a certificate, representing
all shares to which he is entitled. No certificate shall be
issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this
corporation shall be signed by the President or Vice President
and the Secretary or an Assistant Secretary and may be sealed
with the seal of this corporation or a facsimile thereof. The
signatures of the President or Vice President and the Secretary
or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar,
other than the corporation itself or an employee of the
corporation. In case any Officer who signed or whose facsimile
signature has been placed upon such certificate shall have ceased
to be such Officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such
Officer at the date of its issuance.
Every certificate representing shares which are restricted
as to the sale, disposition or other transfer of such shares
shall state that such shares are restricted as to transfer and
shall set forth or fairly summarize upon the certificate, or
shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such
restrictions.
Each certificate representing shares shall state upon the
face thereof: the name of the corporation; that the corporation
is organized under the laws of Florida; the name of the person or
person to whom issued; the number and class of shares, and the
designation of the series, if any, which such certificate
represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par
value.
Section 3. Transfer of Stock. The corporation shall
register a stock certificate presented to it for transfer if the
certificate is properly endorsed by the holder of record or by
his duly authorized attorney, and the signature of such person
has been guaranteed by a commercial bank or trust company or by a
member of the New York or American Stock Exchange.
Section 4. Lost, Stolen, or Destroyed Certificates. The
corporation shall issue a new stock certificate in the place of
any certificate previously issued if the holder of record of the
certificate (a) makes proof in affidavit form that it has been
lost, destroyed or wrongfully taken; (b) requests the issue of a
new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good
faith and without notice of any adverse claim; and (c) satisfies
any other reasonable requirements imposed by the corporation;
including bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar
against any claim that may be made on account of the alleged
loss, destruction or theft of a certificate.
ARTICLE V. BOOKS AND RECORDS
Section 1. Books and Records. This corporation shall keep
correct and complete books and records of account and shall keep
minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.
This corporation shall keep at its registered office or
principal place of business, or at the office of its transfer
agent or registrar, a record of its shareholders, giving the
names and addresses of all shareholders, and the number, class
and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in
any other form capable of being converted into written form
within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who
shall have been a holder of record of shares or of voting trust
certificates therefor at least six months immediately preceding
his demand or shall be the holder of record of, or the holder of
record of voting trust certificates for, at least five percent of
the outstanding shares of any class or series of the corporation,
upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any
reasonable time or times, for any proper purpose its relevant
books and records of accounts, minutes and records of
shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four
months after the close of each fiscal year, this corporation
shall prepare a balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its
fiscal year, and a profit and loss statement showing the results
of the operations of the corporation during its fiscal year.
This requirement may be modified by a resolution of the
shareholders not later than four months after the close of each
fiscal year.
Upon written request of any shareholder or holder of voting
trust certificates for shares of the corporation, the corporation
shall mail to such shareholder or holder of voting trust
certificates a copy of the most recent such balance sheet and
profit and loss statement.
The balance sheets and profit and loss statements shall be
filed in the registered office of the corporation in Florida,
shall be kept for at least five years, and shall be subject to
inspection during business hours by any shareholder or holder of
voting trust certificates, in person or by agent.
ARTICLE VI. DIVIDENDS
The Board of Directors of this corporation may, from time to
time, declare and the corporation may pay dividends on its shares
in cash, property or its own shares, except when the corporation
is insolvent or when the declaration or payment thereof would be
contrary to any restrictions contained in the Articles of
Incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and
paid, except as otherwise provided in this section, only out of
the unreserved and unrestricted earned surplus of the corporation
or out of capital surplus, howsoever arising, but each dividend
paid out of capital surplus shall be identified as a distribution
of capital surplus, and the amount per share paid from such
surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the
corporation's own treasury shares.
(c) Dividends may be declared and paid in the
corporation's own authorized but unissued shares out of any
unreserved and unrestricted surplus of the corporation upon the
following conditions:
(1) If a dividend is payable in shares having a par
value, such shares shall be issued at not less than the par value
thereof and there shall be transferred to stated capital at the
time such dividend is paid an amount of surplus equal to the
aggregate par value of the shares to be issued as a dividend.
(2) If a dividend is payable in shares without par
value, such shares shall be issued at such stated value as shall
be fixed by the Board of Directors by resolution adopted at the
time such dividend is declared, and there shall be transferred to
stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect
of such shares; and the amount per share so transferred to stated
capital shall be disclosed to the shareholders receiving such
dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be
paid to the holders of shares of any other class unless the
Articles of Incorporation so provide or such payment is
authorized by the affirmative vote or the written consent of the
holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any
class into a greater number of shares of the same class without
increasing the stated capital of the corporation shall not be
construed to be a share dividend within the meaning of this
section.
ARTICLE VII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
following:
The Panda Project, Inc.
1992
Florida
ARTICLE VIII. AMENDMENT
These By-Laws may be repealed or amended, and new By-Laws
may be adopted, by either the Board of Directors or the
shareholders, but the Board of Directors may not amend or repeal
any By-Law adopted by shareholders if the shareholders
specifically provide such By-Law is not subject to amendment or
repeal by the Directors.
Exhibit 5.1
October 31, 1997
The Panda Project, Inc.
901 Yamato Road
Boca Raton, FL 33431
RE: The Panda Project, Inc. (the "Company") - Registration
Statement on Form S-3
Gentlemen:
You have requested our opinion in connection with the above-
referenced Registration Statement (the "Registration Statement"),
under which certain shareholders and warrantholders (collectively,
the "Selling Shareholders") intend to offer and sell in a public
offering, from time to time, an aggregate of 107,020 shares of the
common stock, $.01 par value per share, of the Company (the "Common
Stock"), consisting of : (i) 36,924 shares of Common Stock issued
and outstanding in the name of certain Selling Shareholders (the
"Selling Shareholder Shares"); and (ii) an aggregate of 70,096
shares of Common Stock (the "Warrant Shares") issuable upon
exercise of warrants held by certain Selling Shareholders (the
"Warrants").
We have reviewed copies of the Articles of Incorporation and Bylaws
of the Company, and have examined such corporate documents and
records and other certificates, and have made such investigations
of law, as we have deemed necessary in order to render the opinion
hereinafter set forth.
Based upon and subject to the foregoing, we render the following
opinions:
The Selling Shareholder Shares are duly authorized, validly issued,
fully paid and nonassessable.
The Warrant Shares are duly authorized, and when issued in
accordance with the terms of the Warrants, will be, assuming no
change in the applicable law or pertinent facts, validly issued,
fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby
admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
Holland & Knight LLP
By: /s/ Teresita H. Garcia
------------------------
Teresita H. Garcia
Exhibit 23.2
Consent of Independent Certified Public Accounts
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on Form
S-3 of our report dated May 22, 1997, except as to Note 16, which
is as of June 23, 1997, appearing of page F-2 of The Panda Project
Inc.'s Annual Report on Form 10-K for the year ended March 31,
1997. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
--------------------
Price Waterhouse LLP
Fort Lauderdale, Florida
October 31, 1997
