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): August 11, 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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On Friday, July 15, 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 $325,000 totaling
$625,000 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 July 15, 1999, by and
between the Company and SBI. The loan bears an interest rate of 6%
annum and is due and payable on September 30, 1999.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
2.1 Agreement between The Panda Project, Inc. and Silicon Bandwidth,
Inc.
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Page 3
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
-----------------------
Melissa F. Crane
Acting Chief Financial
Officer
Dated: August 11, 1999
Exhibit 2.1
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. $ 625,000 Dated: July 15, 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 SIX HUNDRED TWENTY FIVE THOUSAND UNITED
STATES DOLLARS (U.S. $625,000), on September 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) and from
the date hereof (with respect to 325,000 of the outstanding
principal amount hereof) at a rate per annum equal at all
times to six per cent (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 per cent (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.
This 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) on 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 connection 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 receives 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 Highest Lawful Rate. As used herein,
"Highest Lawful Rate" means 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 or any other
amount payable under this Note, the Security Agreement or any
other Document.
(b) Any representation or warranty by the Borrower
under or in connection with this Note, the Security Agreement
or any other Document 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 its 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 Lender's
lien thereon.
(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 its 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 judgment or order for the 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 be rendered against the Borrower; or any
non-monetary judgment 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
judgment 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 its assets.
(j) The Borrower shall form any subsidiaries, alter
its capital structure, declare or pay any dividends or
purchase, redeem or retire or otherwise acquire for value any
of its capital stock now or hereafter outstanding, return
capital to its shareholders or distribute assets to its
shareholders; provided, however, that the Borrower may,
pursuant to the terms and conditions of its existing stock
option and stock purchase agreements between the Borrower and
its 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 and be forthwith 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 otherwise 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 address or facsimile
number 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
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 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 to perform or observe its
obligations contained herein. In addition, the Borrower agrees
to indemnify the Lender against and hold 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 of and be enforceable by the Borrower, the Lender and
their respective successors and assigns.
The Borrower shall not have the right to assign its
rights and obligations hereunder or any interest herein
without the prior written consent of the Lender. The Lender
may sell, assign, transfer or grant participations 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 its Subsidiaries.
THIS NOTE SHALL 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 ENFORCEABILITY OF THIS
NOTE, THE SECURITY AGREEMENT OR ANY OTHER DOCUMENT OR ANY
PROVISION THEREOF.
IN WITNESS WHEREOF, the Borrower has duly executed
this Note, as of the date first above written.
THE PANDA PROJECT, INC..
By
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