SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 1999
THE PANDA PROJECT, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 0-24030 65-0323354
(State of other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
951 Broken Sound Parkway
Boca Raton, Florida 33487
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 994-2300
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
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The Panda Project, Inc. and Silicon Bandwidth, Inc. have entered into
Amendment No. 2 to the Asset Purchase Agreement dated October 26, 1999
which extends the expiration from December 30, 1999 to February 24,
2000.
On, October 1, 1999, The Panda Project, Inc. (the "Company")
entered into agreement with Silicon Bandwith, Inc. ("SBI") pursuant
to which SBI has loaned the Company an additional $300,000 totalling
$1,250,000 in connection with the loan, the Company has granted to SBI
a security interest in substantially all of the assets of the Company
pursuant to the Security Agreement, dated August 15, 1999, by and
between the Company and SBI. The loan bears an interest rate of 6%
annum and is due and payable on December 30, 1999.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
4.12 Promissory Note dated October 1, 1999 by and between, The Panda
Project, Inc. and Silicon Bandwidth, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
THE PANDA PROJECT, INC.
By: /s/ Melissa F. Crane
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Melissa F. Crane
Acting Chief Financial
Officer
Dated: October 28, 1999
EXHIBIT 4.12
PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES
LAWS. IT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNDER
CIRCUMSTANCES THAT WOULD RESULT IN A VIOLATION OF THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR
SUCH OTHER LAWS.
AMENDED AND RESTATED SECURED PROMISSORY NOTE
U.S. $ 1,250,000 Dated: October 1, 1999
FOR VALUE RECEIVED, the undersigned, THE PANDA PROJECT,
INC., a Florida corporation (the "borrower"), HEREBY
UNCONDITIONALLY PROMISES TO PAY TO THE ORDER OF SILICON
BANDWIDTH, INC., a Delaware corporation (the "Lender") the
principal sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND
UNITED STATES DOLLARS (U.S. $1,250,000) on December 30,
1999 (the "Maturity Date"). This Amended and Restated
Secured Promissory Note replaces the Secured Promissory Note
of the Borrower dated June 14, 1999.
The Borrower further promises to pay interest on the
outstanding principal amount of this Promissory Note (this
("Note") from June 14, 1999 until maturity (with respect to
$300,000 of the outstanding principal amount hereof), from
July 15 until maturity (with respect to $325,000 of the
outstanding principal amount hereof), from August 17, 1999
until maturity (with respect to $325,00 of the outstanding
principal amount hereof) and from the dates hereof until
maturity (with respect to $300,000 of the outstanding
principal amount hereof) at a rate per annum equal at all
times to six percent (6%) per annum. Accrued interest shall
be payable on the Maturity Date. In the event that any
amount of principal or interest, or any other amount payable
hereunder, is not paid in full when due (whether at stated
maturity, by acceleration or otherwise), the Borrower shall
pay interest on such unpaid principal, interest or other
amount, from the date such amount becomes due until the date
such amount is paid in full, payable on demand, at a rate
per annum equal at all times to ten percent (10%) per annum.
All computations of interest shall be made on the basis of a
year of 365 or 366 days, as the case may be, for the actual
number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable.
The Note is secured by certain collateral more
specifically described in the Security Agreement dated as of
June 14, 1999 between Borrower and Lender (the "Security
Agreement"). Capitalized terms not otherwise defined in
this Note shall have the meanings ascribed to them in the
Security Agreement.
All payments hereunder shall be made in lawful money of
the United States of America and in same day or immediately
available funds, to the Lender, at 1001 Bayhill Drive, Suite
140, San Bruno, California 94066, or to such other office
and account of the Lender as it from time to time shall
designate in a written notice to the Borrower.
Whenever any payment hereunder shall be stated to be
due, or whenever any interest payment date or any other date
specified hereunder would otherwise occur, on a day other
than a Business Day (as defined below), then, except as
otherwise provided herein, such payment shall be made, and
such interest payment date or other date shall occur, on the
next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment
of interest hereunder. As used herein, "Business Day" means
a day (i) other than Saturday or Sunday, and (ii) which
commercial banks are open for business in New York, New
York.
All payments shall be made hereunder unconditionally in
full without deduction, setoff, counterclaim or other
defense, including, without limitation, any deduction or
setoff arising out of or in connections with the Letter of
Intent dated as of May 14, 1999 by and between Lender and
Borrower (the "Letter of Intent"), and the Asset Purchase
Agreement by and between Lender and Borrower to be executed
pursuant to the Letter of Intent (the "Asset Purchase
Agreement"); provided, however, that no payment hereunder
shall be deemed to be a waiver of any right or claim that
the Borrower may have under such agreements. The Borrower
represents and warrants to the Lender that, to the best of
Borrower's knowledge, there is no claim, defense,
counterclaim or set-off which could be asserted by or is
available to the Borrower against the Lender.
The Borrower shall pay all amounts due under this Note
free and clear of, and without reduction for or on account
of, any present and future taxes, levies, imposts, duties,
fees, assessments, charges, deductions or withholdings and
all liabilities with respect thereto (collectively "Taxes").
If any Taxes shall be required by law to be deducted or
withheld from any payment, the Borrower shall increase the
amount paid so that the Lender received when due (and is
entitled to retain), after deduction or withholding for or
on account of such Taxes (including deductions or
withholdings applicable to additional sums payable under
this paragraph), the full amount of the payment provided for
in this Note.
If the Lender is required by law to make any payment on
account of Taxes, or any liability in respect of any Tax is
imposed, levied or assessed against the Lender, the Borrower
shall indemnify the Lender for and against such payment or
liability, together with any incremental taxes, interest or
penalties, and all costs and expenses, payable or incurred
in connection therewith, including Taxes imposed on amounts
payable under this paragraph whether or not such payment or
liability was correctly or legally asserted. A certificate
of the Lender as to the amount of any such payment shall, in
the absence of manifest error, be conclusive and binding for
all purposes.
Anything herein to the contrary notwithstanding, if
during any period for which interest is computed hereunder,
the amount of interest computed on the basis provided for in
this Note, together with all fees, charges and other
payments which are treated as interest under applicable law,
as provided for herein or in any other document executed in
connection herewith, would exceed the amount of such
interest computed on the basis of the Highest Lawful Rate,
the Borrower shall not be obligated to pay, and the Lender
shall not be entitled to charge, collect, receive, reserve
or take, interest in excess of the Highest Lawful Rate, and
during any such period the interest payable hereunder shall
be computed on the basis of the maximum non-usurious rate of
interest, as in effect from time to time, which may be
charged, contracted for, reserved, received or collected by
the Lender in connection with this Note under applicable
law.
Any of the following events which shall occur shall
constitute an "Event of Default"
(a) The Borrower shall fail to pay when due any amount
of principal or interest on this note, the security
agreement or any other Document.
(b) Any representation or warranty by the Borrower
under or in connection with this Note, shall prove to have
been incorrect in any material respect when made or deemed
made.
(c) The Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Note,
the Security Agreement or any other Document on it's part to
be performed or observed and any such failure shall remain
unremedied for a period of 10 days from the occurrence
thereof.
(d) The Borrower shall fail to make payment when due
on any other indebtedness for money borrowed with an
aggregate principal amount outstanding of $10,000.00 or
more, or otherwise fails to perform any covenant in or
otherwise breaches the terms of any instrument relating to
such indebtedness which failure or breach permits the
holder of such indebtedness to accelerate the maturity of
such indebtedness.
(e) Any levy upon, seizure or attachment of the
Collateral or any part thereof, or any material impairment
in the value of the Collateral or the priority of the
Lenders lien thereof.
(f) The Borrower or any other Person shall challenge
the validity of this Note, or the Security Agreement, or the
grant of the security interest thereunder.
(g) The Borrower shall (i) liquidate, wind-up or
dissolve (or suffer any liquidation, wind-up or
dissolution), (ii) suspend it's operations other than in the
ordinary course of business, or (iii) take any corporate
action to authorize any of the actions or events set forth
above in this paragraph (g).
(h) A final judgement or order for payment of money in
excess of $10,000.00 (excluding the settlement of the
lawsuit between Borrower and Promethean LLC for up to
$35,000.00) which is not fully covered by third-party
insurance shall bee rendered against the borrower; or any
non-monetary judgement or order shall be rendered against
the Borrower which has or would reasonably be expected to
have a material adverse effect upon the operations,
properties, business, or condition (financial or otherwise)
of the Borrower; and in each case there shall be any period
of 20 consecutive days during which a stay of enforcement of
such judgement or order, by reason of a pending appeal or
otherwise, shall not be in effect.
(i) The Borrower shall merge with or consolidate into
or acquire all or a substantial part of the assets of
another Person or sell, lease, transfer or otherwise dispose
of all or a substantial part of it's assets.
(j) The Borrower shall form any subsidiaries, alter
it's capital structure, declare or pay any dividends or
purchase, redeem or retire or otherwise acquire for value
any of it's capital stock not or hereafter outstanding,
return capital to it's shareholders; provided, however, that
the Borrower may, pursuant to the term s and conditions of
it's existing stock option and stock purchase agreements
between the Borrower and it's employees and consultants ,
issue stock options and repurchase unvested shares of common
stock of the Borrower.
If any Event of Default shall occur, the Lender may (i)
by notice to the Borrower, declare the entire unpaid
principal amount of this Note, all interest accrued and
unpaid hereon and all other amounts payable hereunder to be
forthwith due and payable, whereupon all unpaid principal
under this Note, all such accrued interest and all such
other amounts shall become due and payable, without
presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower,
and (ii) whether or not the actions referred to in clause
(i) have been taken, exercise any or all of the Lender's
rights and remedies under the Security Agreement and proceed
to enforce all other rights and remedies available to the
Lender under applicable law.
No amendment or waiver of any provision of this Note,
nor any consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in
writing and signed by the Lender and then such amendment,
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
All notices and other communications provided for
hereunder shall, unless stated herein, be in writing
(including by facsimile) and mailed, sent or delivered to
the respective parties hereto at or to the following
addresses or facsimile numbers (or at or to such other
addresses or facsimile numbers as shall be designated by any
party in a written notice to the other parties hereto):
If to the Lender: Silicon Bandwidth, Inc.
1001 Bayhill Drive, Suite 140
San Bruno, CA 94066
Attn Chief Executive Officer
Facsimile: (650) 869-6078
If to the Borrower: The Panda Project, Inc.
951 Broken Sound Parkway
Boca Raton, FL 33487
Attn: Chief Executive Officer
Facsimile: (561) 994-0191
All such notices and communications shall be effective (i)
if delivered by hand, upon delivery; (ii) if sent by mail,
upon the earlier of the date of receipt or five Business
Days after deposit in the mail, first class (or air mail,
with respect to communications to be sent to or from the
United States), postage prepaid; and (iii) if sent by
facsimile, when sent.
No failure on the part of the Lender to exercise, and
no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Note
are cumulative and not exclusive of any rights, remedies,
powers and privileges that may otherwise be available to the
Lender.
Whenever possible, each provision of this Note shall be
interpreted in such a manner as to be effective and valid
under all applicable laws and regulations. If, however, any
provision of this Note shall be prohibited by or invalid
under any such law or regulation in any jurisdiction, it
shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so
modified, it shall be ineffective and invalid only to the
extent of such prohibition or invalidity without affecting
the remaining provisions of this Note, or the validity or
effectiveness of such provision in any other jurisdiction.
The Borrower agrees to pay on demand all costs and
expenses of the Lender, and the fees and disbursements of
counsel (including the allocated costs of internal counsel),
in connection with (i) any amendments, modifications or
waivers of the terms hereof, (ii) any Event of Default,
(iii) the enforcement or attempted enforcement of, and
preservation of any rights under, this Note, and (iv) any
out-of-court workout or other refinancing or restructuring
or in any bankruptcy case, including, without limitation,
any and all losses, costs and expenses sustained by the
Lender as a result of any failure by the Borrower o perform
or observe it's obligations contained herein. In addition,
the Borrower, agrees to indemnify the Lender against and
holt it harmless from any and all present and future stamp,
transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by
reason of the execution, delivery, performance and
enforcement of this Note.
This Note shall be binding upon, inure to the benefit
or and be enforceable by the Borrower, the Lender and their
respective successors and assigns.
The Borrower shall not have the right to assign it's
rights and obligations hereunder or any interest herein
without the prior written consent of the Lender. The Lender
may sell, assign, transfer or grant participation in all or
any portion of the Lender's rights and obligations
hereunder. In the event of any such assignment the assignee
shall be deemed the "Lender: for all purposes of this Note
and any other documents and instruments relating hereto with
respect to the rights and obligations assigned to it. The
Borrower agrees that in connection with any such grant or
assignment, the Lender may deliver to the prospective
participant or assignee financial statements and other
relevant information relating to the Borrower and it's
subsidiaries.
THIS NOTE SHAL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
THE BORROWER AND LENDER HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
NOTE, THE SECURITY AGREEMENT OR ANY OTHER DOCUMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES AGAINST ANY OTHER PARTIES THERETO. THE BORROWER
AND LENDER HEREBY AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT IN ANY WAY LIMITING THE FOREGOING, THE BORROWER AND
LENDER FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCABILITY
OF THIS NOTE, THE SECURITY AGREEMENT OR ANY OTHER DOCUMENT
OR PROVISION THEREOF.
IN WITNESS THEREOF, the Borrower has duly executed this
Note, as of the date first above written.
THE PANDA PROJECT, INC.
By
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Title:
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