SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
SCHEDULE 13D*
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
The Panda Project, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
69833F104
(CUSIP Number)
Jeffrey M. Solomon
757 Third Avenue, New York, New York 10017 (212) 845-7909
(Name, address and telephone number of person
authorized to receive notices and communications)
January 18, 2000
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 34 Pages)
________________
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes)
CUSIP No. 69833F104 13D Page 2 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
RCG Halifax Fund, Ltd.
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
WC, 00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
PN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 69833F104 13D Page 3 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Ramius Capital Group, LLC
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
IA
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 69833F104 13D Page 4 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
C4S & Co., L.L.C.
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 69833F104 13D Page 5 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Peter A. Cohen
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
00
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 69833F104 13D Page 6 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Morgan B. Stark
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
00
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT
CUSIP No. 69833F104 13D Page 7 of 34 Pages
____________________________________________________________________________
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS (ENTITIES ONLY)
Thomas W. Strauss
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS **
00
____________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER
-0-
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER
13,049,461
OWNED BY ___________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER
-0-
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER
13,049,461
____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
13,049,461
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
31.5%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON **
00
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT
CUSIP No. 69833F104 13D Page 8 of 34 Pages
Item 1. Security and Issuer.
This statement relates to the common stock, par value $0.01 (the "Common
Stock") of The Panda Project, Inc. (the "Company"), and shares of Common Stock
issuable upon the exchange of Series A Preferred Stock of the Company (the
"Preferred Stock", and together with the Common Stock, the "Stock") which will
be exchanged pursuant to the Exchange Agreement dated May 12, 1999 (the
"Exchange Agreement"), between RCG Halifax Fund, Ltd. (formerly known as AGR
Halifax Fund, Ltd.), the Company and other holders of Preferred Stock, pursuant
to which RCG Halifax Fund, Ltd. and the other holders of Preferred Stock have
agreed to exchange the Preferred Stock for Common Stock. The Company's
principal executive offices are located at 951 Broken Sound Parkway, N.W., Boca
Raton, Florida 33487.
Item 2. Identity and Background.
(a) This statement is filed by:
(i) RCG Halifax Fund, Ltd., a Cayman Islands exempted company
("Halifax"), with respect to the shares of Common
Stock directly owned by it;
(ii) Ramius Capital Group, LLC, a Delaware limited liability
company ("Ramius"), which serves as an investment advisor
of Halifax, with respect to the shares of Common Stock
directly owned by Halifax;
(iii) C4S & Co., L.L.C., a Delaware limited liability
company ("C4S"), which serves as managing member of
Ramius, with respect to the shares of Common Stock
directly owned by Halifax;
(iv) Peter A. Cohen ("Mr. Cohen"), who serves as one of the
Managing Members of C4S, with respect to the shares
of Common Stock directly owned by Halifax;
(v) Morgan B. Stark("Mr. Stark"), who serves as one of the
Managing Members of C4S, with respect to the shares
of Common Stock directly owned by Halifax;
(vi) Thomas W. Strauss ("Mr. Strauss"), who serves as one of
the Managing Members of C4S, with respect to the
shares of Common Stock directly owned by Halifax.
The foregoing persons are hereinafter sometimes
collectively referred to as the "Reporting Persons". Any
disclosures herein with respect to persons other than the
Reporting Persons are made on information and belief after
making inquiry to the appropriate party.
(b) The address of the principal business and principal office of the
Halifax is c/o Citco Fund Services (Cayman Islands) Limited, Corporate Centre,
West Bay Road, Grand Cayman, Cayman Islands, British West Indies. The address
of the principal business and principal office of Ramius, C4S, Mr. Cohen, Mr.
Strauss and Mr. Stark is 757 Third Avenue, New York, New York 10017
CUSIP No. 69833F104 13D Page 9 of 34 Pages
(c) The principal business of Halifax is serving as a private
investment fund. The principal business of Ramius is that of an investment
adviser. C4S serves as Managing Member of Ramius. Mr. Cohen, Mr. Strauss and
Mr. Stark serve as co-Managing Members of C4S
(d) None of the Reporting Persons has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) None of the Reporting Persons has, during the last five years, been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of such proceeding, was, or is subject to, a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) Halifax is a Cayman Islands exempted company. Ramius and C4S are
limited liability companies organized under the laws of the State of Delaware.
Mr. Cohen, Mr. Strauss and Mr. Stark are each United States citizens.
Item 3. Source and Amount of Funds and Other Consideration.
The net investment cost (including commissions, if any) of the shares of
Common Stock directly owned by Halifax, and the Common Stock to be acquired
upon exchange of the Preferred Stock, is approximately $750,000 and
$3,047,622.29, respectively. Neither Ramius, C4S, Mr. Cohen, Mr. Strauss nor
Mr. Stark own directly any shares of Common Stock or Preferred Stock.
The shares of Common Stock and Preferred Stock purchased by Halifax were
purchased with working capital and in payment by the Company of penalties owed
to the holders of the Preferred Stock.
Item 4. Purpose of the Transaction.
The purpose of the acquisition of the shares of Common Stock by the
Reporting Persons was for investment, and the purchases of the shares of Common
Stock by the Reporting Persons were made in the ordinary course of business and
were not made for the purpose of acquiring control of the Company. Although
the acquisition of the shares of Common Stock by the Reporting Persons is for
investment purposes, each Reporting Person may pursue discussions with
management to maximize long-term value for shareholders. The purpose of
entering into the Exchange Agreement and exchanging the Preferred Stock was to
facilitate the acquisition by Silicon Bandwidth, Inc. ("Silicon") of the assets
of the Company in order to maximize return on the Reporting Person's
investment. Each of the Reporting Persons may make further purchases of shares
of Common Stock and Preferred Stock from time to time and may dispose of any or
all of the shares of Common Stock held by him or it at any time. None of the
Reporting Persons has any plans or proposals which relate to, or could result
in, any of the matters referred to in paragraphs (b) through (j), inclusive, of
Item 4 of the Schedule 13D. Each of the Reporting Persons may, at any time and
from time to time, review or reconsider his or its position and formulate plans
or proposals with respect thereto, but has no present intention of doing so
CUSIP No. 69833F104 13D Page 10 of 34 Pages
Item 5. Interest in Securities of the Issuer.
A. RCG Halifax Fund, Ltd.
(a) Aggregate number of shares beneficially owned: 13,049,461
Percentage: 31.5% The percentages used herein and in
the rest of Item 5 are calculated based upon 41,381,267 shares, which reflects
the 29,698,425 shares of Common Stock issued and outstanding as of January 10,
2000, as reflected in the Company's Schedule 14A as filed on January 5, 2000,
and the 11,682,842 shares of Common Stock being issued upon the exchange of
the Preferred Stock held by Halifax. The number of shares does not include
the Preferred Stock being exchanged by the other parties to the Exchange
Agreement, which, if included, would reduce the percentage ownership of the
reporting Persons.
(b) 1. Sole power to vote or direct vote: -0-
2. Shared power to vote or direct vote: 13,049,461
3. Sole power to dispose or direct the disposition: -0-
4. Shared power to dispose or direct the
disposition: 13,049,461
(c) The number of shares of Common Stock acquired by Halifax upon
exchange of its Series A Preferred Stock (the "Preferred Stock") into Common
Stock, and the price per share for such Shares, are set forth in Schedule A and
are incorporated by reference. Halifax did not enter into any other
transactions in the Common Stock or the Preferred Stock within the last sixty
days.
(d) Ramius, the investment advisor of Halifax, has the power to
direct some of the affairs of Halifax, including decisions respecting the
disposition of the proceeds from the sale of the shares. C4S is the Managing
Member of Ramius and in that capacity directs its operations. Mr. Cohen, Mr.
Strauss and Mr. Stark are the Managing Members of C4S and in that capacity
directs its operations.
(e) Not Applicable.
B. Ramius Capital Group, L.L.C.
(a) Aggregate number of shares beneficially owned: 13,049,461
Percentage: 31.5%
(b) 1. Sole power to vote or direct vote: -0-
2. Shared power to vote or direct vote: 13,049,461
3. Sole power to dispose or direct the disposition: -0-
4. Shared power to dispose or direct the
disposition: 13,049,461
(c) Ramius did not enter into any transactions in the Common
Stock or the Preferred Stock within the last sixty days. The transactions in
the Stock within the last sixty days on behalf of Halifax, which were all in
the open market, are set forth in Schedule A, and are incorporated by
reference. Ramius' affiliate, AG Ramius Partners, LLC, manages other funds,
whose holdings include shares of Stock. Such holdings are described in a
separate 13D filed by Angelo, Gordon & Co., L.P., John M. Angelo and Michael
L. Gordon on the date hereof.
(d) Each of the clients of Ramius has the power to direct the
receipt of dividends from or the proceeds of sale of such shares. C4S is the
Managing Member of Ramius and in that capacity directs its operations. Mr.
Cohen, Mr. Strauss and Mr. Stark are the Managing Members of C4S and in that
capacity directs its operations.
(e) Not Applicable.
CUSIP No. 69833F104 13D Page 11 of 34 Pages
D. C4S & Co., L.L.C.
(a) Aggregate number of shares beneficially owned: 13,049,461
Percentage: 31.5%
(b) 1. Sole power to vote or direct vote: -0-
2. Shared power to vote or direct vote: 13,049,461
3. Sole power to dispose or direct the disposition: -0-
4. Shared power to dispose or direct the
disposition: 13,049,461
(c) C4S did not enter into any transactions in the Common Stock
or the Preferred Stock within the last sixty days. The transactions in the
Stock within the last sixty days on behalf of Halifax, which were all in the
open market, are set forth in Schedule A, and are incorporated by reference.
(d) Mr. Cohen, Mr. Strauss and Mr. Stark are the Managing Members
of C4S and in that capacity directs its operations.
(e) Not Applicable.
E. Peter A. Cohen, Morgan B. Stark and Thomas W. Strauss
(a) Aggregate number of shares beneficially owned: 13,049,461
Percentage: 31.5%
(b) 1. Sole power to vote or direct vote: -0-
2. Shared power to vote or direct vote: 13,049,461
3. Sole power to dispose or direct the disposition: -0-
4. Shared power to dispose or direct the
disposition: 13,049,461
(c) Mr. Cohen, Mr. Stark and Mr. Strauss did not enter into any
transactions in the Common Stock or the Preferred Stock within the last sixty
days. The transactions in the Stock within the last sixty days on behalf of
Halifax, which were all in the open market, are set forth in Schedule A, and
are incorporated by reference.
(d) Not Applicable.
(e) Not Applicable.
CUSIP No. 69833F104 13D Page 12 of 34 Pages
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Halifax has entered into an Exchange Agreement, dated May 12, 1999, among
Halifax, the Company and other holders of the Preferred Stock of the Company,
in which Halifax agreed to exchange its Preferred Stock for Common Stock of the
Company.
As a condition to entering into the Exchange Agreement, Silicon required
Halifax to enter into a Voting Agreement, dated May 13, 1999, among Halifax,
Silicon and other holders of the Preferred Stock of the Company, in which
Halifax agreed to give its right to vote its shares of Common Stock to Silicon
with respect to the acquisition by Silicon of the assets of the Company.
Additionally, the Reporting Persons have entered into a Joint Acquisition
Statement attached as Exhibit 3 hereto, as required by Rule 13d-1(k) under the
Securities Exchange Act of 1934, as amended.
Item 7. Materials to be Filed as Exhibits.
There is filed herewith the following Exhibits:
Exhibit 1 - Exchange Agreement, dated May 12, 1999, among Halifax
the Company and other holders of the Preferred
Stock of the Company.
Exhibit 2 - Voting Agreement, dated May 13, 1999, among Halifax,
Silicon and other holders of the Preferred
Stock of the Company.
Exhibit 3 - a written agreement relating to the filing of joint
acquisition statements as required by Rule 13d-1(k)
under the Securities Exchange Act of 1934, as amended.
CUSIP No. 69833F104 13D Page 13 of 34 Pages
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
DATED: January 26, 2000
RCG HALIFAX FUND, LTD. RAMIUS CAPITAL GROUP, LLC
By: Ramius Capital Group, LLC, By: C4S & Co., L.L.C.,
as Investment Adviser as Managing Member
By: C4S & Co., L.L.C., By: Morgan B. Stark,
as Managing Member as Managing Member
By: Morgan B. Stark,
as Managing Member
/s/________________________ /s/________________________
C4S & CO., L.L.C. MORGAN B. STARK
By: Morgan B. Stark,
as Managing Member
/s/________________________ /s/________________________
PETER A. COHEN THOMAS W. STRAUSS
/s/________________________ /s/________________________
CUSIP No. 69833F104 13D Page 14 of 34 Pages
Schedule A
RCG HALIFAX FUND, LTD.
Date Requiring Number of Shares Exercise Price Per Share
Filing to be exchanged
1/18/00 11,682,842 $0.261
CUSIP No. 69833F104 13D Page 15 of 34 Pages
EXHIBIT 1
EXCHANGE AGREEMENT
------------------
THIS AGREEMENT is made and entered into as of May 12, 1999, by and among
THE PANDA PROJECT, INC., a Florida corporation (the "Company"), and the
holders of the Company's Series A Preferred Stock executing this Agreement
("Holders").
WHEREAS, each of the Holders owns the number of shares of the Company's
Series A Preferred Stock (as defined in the Company's Articles of
Incorporation, as amended) set forth opposite its name at the foot of this
Agreement; and
WHEREAS, the Company desires to exchange shares of the Company's common
stock for shares of Series A Preferred Stock, and the Holders desire to accept
such shares of Company common stock, on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto do hereby agree as
follows:
1. Exchange of Shares. On the Closing Date, the Company agrees to issue
and deliver to each of the Holders, and each of the Holders agrees to accept,
the number of shares of Company common stock set forth opposite Holder's name
on Schedule A (the "Exchange Shares") in exchange for (a) all of Holder's
shares of Series A Preferred Stock and (b) the amount to be paid by Holders
upon exchange, both as set forth opposite the Holder's name on Schedule A (the
"Exchange"). On or prior to the Closing Date, each of the Holders agrees to
deliver to the Company the certificates representing the shares of Series A
Preferred Stock to be so exchanged, together with stock powers duly endorsed
to transfer the shares to the Company. Closing of the Exchange shall be
conditioned upon the representations, warranties and agreements of the parties
hereto being true and complete on the Closing Date as if they had been made on
such date. The Closing Date for the Exchange will be on any day or days at
least five business days prior the record date for the Company shareholders'
meeting relating to the sale of substantially all of its assets to Silicon
Bandwidth, Inc. ("Silicon") (such sale is referred to herein as the
"Acquisition").
2. Holder's Representations, Warranties and Agreements. Each Holder
represents and warrants to, and agrees with, the Company, with respect to only
itself, that:
(a) Investment Purpose. Such Holder is acquiring the Exchange Shares
for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the Securities Act of 1933, as
amended (the "1933 Act"); provided, however, the Holders may transfer the
Exchange Shares to the extent permitted in the Voting Agreement, dated May 12,
1999, by and among Silicon, the shareholders of the Company listed therein and
the Company (the "Voting Agreement").
(b) Transfer or Resale. Such Holder understands that (i) the Exchange
Shares have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) such Holder
shall have delivered to the Company an opinion of counsel, in a form
CUSIP No. 69833F104 13D Page 16 of 34 Pages
reasonably acceptable to the Company, to the effect that such Exchange Shares
to be sold, assigned or transferred may be sold, assigned or transferred
pursuant to an exemption from such registration or (C) such Holder provides
the Company with reasonable assurance that such Exchange Shares can be sold,
assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act
(or a successor rule thereto) ("Rule 144"); (ii) any sale of the Exchange
Shares made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and, further, if Rule 144 is not applicable, any resale of
the Exchange Shares under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Company nor any other person is under any
obligation to register such Exchange Shares under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder; provided, however, the Holders may transfer the Exchange Shares to
the extent permitted in the Voting Agreement.
(c) Legends. Such Holder understands that the certificates or other
instruments representing the Exchange Shares shall bear a restrictive legend
in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Exchange Shares upon
which it is stamped, if, unless otherwise required by state securities laws,
(i) such shares are sold pursuant to registration under the 1933 Act, (ii) in
connection with a sale transaction, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that a
public sale, assignment or transfer of such shares may be made without
registration under the 1933 Act, or (iii) such holder provides the Company
with reasonable assurances that such shares can be sold pursuant to Rule 144
without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
CUSIP No. 69833F104 13D Page 17 of 34 Pages
(d) Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Holder and is a
valid and binding agreement of such Holder enforceable in accordance with its
terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
(e) Risk Factors. Such Holder has read and understands all of the "Risk
Factors" relating to an investment in the Exchange Shares of the Company as
set forth in the Prospectus contained in the Company's Post-Effective
Amendment No. 1 to Form S-3 Registration Statement (No. 333-47595) filed with
the Securities and Exchange Commission on February 8, 1999. Such Risk Factors
are incorporated herein by reference. Receipt of a copy of such Prospectus is
hereby acknowledged by each of the Holders.
3. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, each of the Holders that:
(a) Authorization. The Company has the requisite corporate power and
authority to enter into and perform this Agreement and to issue and deliver
the Exchange Shares in accordance with the terms hereof. This Agreement
constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of creditors' rights
and remedies.
(b) Issuance of Exchange Shares. The Exchange Shares to be issued in
the Exchange and the Penalty Shares (as defined herein) are duly authorized
and, upon issuance in accordance with the terms hereof, shall be validly
issued, fully paid and nonassessable.
(c) Delivery of Converted Shares. The Company agrees (i) to cause
delivery to each of the Holders of stock certificates evidencing the shares of
Company common stock into which such Holder has converted shares of Series A
Preferred Stock prior to this Agreement and (ii) to comply with all the
requirements of the Company's Articles of Incorporation, as amended, when
issuing such shares of Company common stock upon conversion of the Series A
Preferred Stock.
(d) Liabilities. On or prior to the closing of the Acquisition, the
Company agrees to pay or otherwise provide for all of its outstanding accounts
payable.
(e) Registration Statement. The Company agrees to take all actions
necessary to maintain the effectiveness, for at least one year from the date
hereof, of the Registration Statement No. 333-47595 with respect to shares
issuable upon conversion of the Series A Preferred Stock. The Company agrees
to file a post-effective amendment updating Registration Statement No. 333-
47595 on or within one business day after the date of the Company's public
announcement of the expected Silicon Transaction and to use best efforts to
secure effectiveness of such post-effective amendment
CUSIP No. 69833F104 13D Page 18 of 34 Pages
(f) Special Committee Recommendation. The Company agrees to deliver to
the Holders copies of (i) the recommendation of the Special Committee to the
Board of Directors (the "Special Committee") in favor of the acquisition of
certain assets and liabilities of the Company by Silicon (the "Silicon
Transaction") (which shall not be subject to conditions other than receipt of
a fairness opinion) (ii) the recommendation of the Special Committee in favor
of the Silicon Transaction not subject to any conditions and (iii) any
fairness opinion relied upon by the Special Committee in issuing its
recommendation.
(g) Amendment of the Articles of Incorporation. The Company agrees to
amend Section B.3.20 to allow waiver by the Company of the limitation set
forth therein upon sixty-one (61) days' prior written notice by the Holder of
its intent to exceed such limitation.
(h) No Other Representations. Except as set forth above, the Company
makes no other representations or warranties to the Holders with respect to
the Exchange Shares or the Company's business, prospects or financial
condition.
4. Penalty Shares. Upon execution of this Agreement, the Company agrees to
deliver 171 shares of Series A Preferred Stock to the Holders in payment for
penalties owed to such Holders. The Holders hereby agree to waive all
penalties owed by the Company to such Holders pursuant to previously issued
Company securities.
5. Series A Preferred Stock Standstill.
(a) Except as set forth in Section 5(b), from the date hereof through the
Expiration Date (as defined in the Voting Agreement), each of the Holders
agrees not be sell or otherwise transfer or assign any shares of Series A
Preferred Stock and agrees not to convert into Company common stock any shares
of Series A Preferred Stock in accordance with the conversion rights of
holders of the Series A Preferred Stock contained in the Company's Articles of
Incorporation, as amended.
(b) Permitted Sales and Conversions. From the date hereof through the
Expiration Date, each of the Holders may, from time to time, (i) sell or
otherwise transfer or assign the number of Series A Preferred Stock set forth
on Schedule B opposite Holder's name and (ii) convert into Company common
stock the number of shares of Series A Preferred Stock set forth on Schedule B
opposite Holder's name in accordance with the conversion rights of holders of
the Series A Preferred Stock contained in the Company's Articles of
Incorporation, as amended; provided, however, that the aggregate number of
Series A Preferred Stock sold, converted or otherwise transferred pursuant to
this Section 5(b) may not exceed the number of shares set forth on Schedule B
opposite Holder's name.
(c) Conversion Price. The Company agrees to convert any shares of Series A
Preferred Stock converted into Company common stock pursuant to Section 5(b)
using a Conversion Date Market Price of $.261 per common stock share received.
CUSIP No. 69833F104 13D Page 19 of 34 Pages
6. Voting Agreement. In consideration of the Exchange and as an inducement
for Silicon to enter into the definitive agreement relating to the Silicon
Transaction, each of the Holders agrees, on the date hereof, to enter into,
and deliver to Silicon, the Voting Agreement.
7. Indemnification. The Company, on the one hand, and each Holder (severally
and not jointly), on the other hand, shall indemnify the other against any
loss, cost or damages (including reasonable attorneys' fees and expenses)
suffered or incurred as a result of such party's breach of any representation,
warranty, covenant or agreement in this Agreement. The Company shall
indemnify each Holder against any loss, cost or damages (including reasonable
attorneys' fees and expenses) suffered or incurred as a result of Holder's (i)
entrance into this Agreement or (ii) entrance into the Voting Agreement.
8. Releases.
(a) In consideration of this Agreement, the Company does hereby release,
acquit, satisfy and forever discharge each of the Holders, in the absence of
willful misconduct by such Holder, from and against all actions, causes of
action, indebtedness, accounts, claims and demands of every kind and
character, known or unknown, liquidated or contingent, which it has or may
have from the beginning of time to the date hereof, except as created by this
Agreement.
(b) In consideration of this Agreement, each of the Holders does hereby
release, acquit, satisfy and forever discharge the Company, in the absence of
will misconduct by the Company, from and against all actions, causes of
action, indebtedness, accounts, claims and demands of every kind and
character, known or unknown, liquidated or contingent, which it has or may
have from the beginning of time to the date hereof, except as created by this
Agreement.
9. Termination. This Agreement, including all rights and obligations of the
parties hereunder, shall terminate upon the Expiration Date (as defined in the
Voting Agreement); provided, however, that the provisions of Section 8(a),
including all rights and obligations of the parties thereunder, will survive
the termination of the Agreement under this Section 8 if the Holders have not
breached this Agreement.
10. Opinion of Counsel. The obligations of the Holders under this Agreement
are subject to their receipt of an opinion from Morgan, Lewis & Bockius LLP,
counsel to the Company, dated May 12, 1999, to the effect that this Agreement
constitutes the valid and legally binding obligation of the Company under the
laws of the State of Florida, enforceable against the Company in accordance
with its terms except as such enforceability may be subject to bankruptcy,
moratorium, insolvency, reorganization, arrangement, fraudulent conveyance and
other similar laws affecting the rights of creditors and except as such
enforceability may be subject to the effect of general principles of equity.
11. Public Announcement. Upon the execution of the agreement and all related
documents for the Silicon Transaction, the Company agrees to issue a press
release announcing the agreement. The Company also agrees to issue a pres
CUSIP No. 69833F104 13D Page 20 of 34 Pages
release announcing the closing of the acquisition of substantially all of the
Company's assets by Silicon.
12. Governing Law; Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Florida without regard to the
principles of conflict of laws.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, each or all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. In the event all of the Holders
do not execute and deliver this Agreement, it will be and remain a binding
agreement among the Company and the Holders which do execute and deliver the
Agreement.
(c) Entire Agreement; Amendments. This Agreement supersedes all other prior
oral or written agreements between the Holders, the Company, their affiliates
and persons acting on their behalf with respect to the matters discussed
herein, and this Agreement contains the entire understanding of the parties
with respect to the matters covered herein.
(d) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns.
CUSIP No. 69833F104 13D Page 21 of 34 Pages
IN WITNESS WHEREOF, the Company and the Holders have caused this
Agreement to be duly executed of the date first written above.
COMPANY:
THE PANDA PROJECT, INC.
By___________________________
Name: Stanford W. Crane, Jr.
Title: President
AGR HALIFAX FUND, LTD.
By: AG Ramius Partners, LLC.
Investment Advisor
By______________________
Name:
Title:
LEONARDO, L.P.
By: Angelo, Gordon & Co., L.P.
General Partner
By_______________________
Name: Michael L. Gordon
Title: Chief Operating Officer
GAM ARBITRAGE INVESTMENTS, INC.
By: Angelo, Gordon & Co., L.P.,
Investment Advisor
By________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
CUSIP No. 69833F104 13D Page 22 of 34 Pages
AG SUPER FUND INTER-
NATIONAL PARTNERS, L.P.
By: Angelo, Gordon & Co., L.P.,
General Partner
By______________________
Name: Michael L. Gordon
Title: Chief Operating Officer
RAPHAEL, L.P.
By_______________________
Name: Michael L. Gordon
Title: Chief Operating Officer
RAMIUS FUND, LTD.
By: AG Ramius Partners, LLC.
Investment Advisor
By_________________________
Name: Michael L. Gordon
Title: Managing Officer
CUSIP No. 69833F104 13D Page 23 of 34 Pages
SCHEDULE A
Exchange Shares
Shares of
Common Stock
Shares of Series A Received upon
Preferred Shares Exchange of Amount to be Paid by
Holder to be Exchanged Series A Preferred Stock Holders upon Exchange
- ------ --------------- ------------------------ ---------------------
A-1
CUSIP No. 69833F104 13D Page 24 of 34 Pages
SCHEDULE B
Permitted Sales and Conversions
Number of Shares of
Series A Preferred Stock
Which May Be Converted into
Holder Common Stock Prior to Closing
------ -----------------------------
AGR Halifax Fund, Ltd.
Leonardo, L.P.
GAM Arbitrage Investments, Inc.
AG Super Fund International Partners, L.P.
Raphael, L.P.
Ramius Fund, Ltd.
B-1
CUSIP No. 69833F104 13D Page 25 of 34 Pages
EXHIBIT 2
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is made and entered into as
of May 13, 1999, among Silicon Bandwidth, Inc., a Delaware corporation
("Purchaser), each undersigned shareholder ("Shareholder") of The Panda
Project, Inc., a corporation existing under the laws of Florida ("Seller"),
and Seller.
RECITALS
WHEREAS, pursuant to a letter of agreement dated as of even date
herewith, by and between Purchaser and Seller (such agreement as it may be
amended or restated is hereinafter referred to as the "Letter Agreement"), the
parties agreed that on the signing of the Letter Agreement, Purchaser and each
Shareholder would execute and deliver a Voting Agreement containing the terms
and conditions set forth in the Letter Agreement together with such other
terms and conditions as may be agreed to by the parties to the Letter
Agreement acting reasonably;
WHEREAS, a special committee of the board of directors of Seller has
determined that the transactions contemplated by the Letter Agreement are fair
to, and in the best interests of, the shareholders of Seller and has approved
such transactions;
WHEREAS, Purchaser has agreed to acquire substantially all of the
assets of Seller (the "Acquisition") in exchange for common stock of Purchaser
("Purchaser Common Stock") and the assumption of certain Seller liabilities by
Purchaser;
WHEREAS, in order to induce Purchaser to consummate the Acquisition,
Seller has agreed to use its best efforts to solicit the proxy of certain
shareholders of Seller on behalf of Purchaser, and to cause certain
shareholders of Seller to execute and deliver voting agreements to Purchaser;
WHEREAS, each Shareholder is the registered and beneficial owner of
at least such number of (i) shares of the outstanding capital stock of Seller
as is indicated on the signature page of this Agreement (the "Shares") and/or
(ii) securities convertible into or exercisable for shares of capital stock of
Seller as indicated on the signature page of the Agreement (the "Share
Equivalents");
WHEREAS, each Helix (PEI), Inc. ("Helix") is an undersigned
Shareholder and holder of a security interest in certain assets of Seller (the
"Security Interest"); and
WHEREAS, in order to induce Purchaser to consummate the Acquisition,
Helix and Seller have agreed to renegotiate the terms of the Security
Interest.
CUSIP No. 69833F104 13D Page 26 of 34 Pages
NOW, THEREFORE, the parties agree as follows:
<PAGE>
CUSIP No. 69833F104 13D Page 27 of 34 Pages
1. Share Ownership and Agreement to Retain Shares.
----------------------------------------------
1.1 Transfer and Encumbrance.
------------------------
(a) Purchaser acknowledges and agrees that, subject to
Section 1.2 hereof, this Agreement only pertains to the number of Shares and
Share Equivalents indicated on the signature page and that Shareholder may be
the beneficial owner of Shares and Share Equivalents which are not subject to
this Agreement.
(b) Each Shareholder is the beneficial owner of that
number of Shares and Share Equivalents set forth opposite such Shareholder's
name on the signature page hereto and, except as otherwise set forth on the
signature page hereto, has held such Shares and Share Equivalents at all times
since the date set forth on such signature page. No other person or entity
not a signatory to this Agreement has a beneficial interest in or a right to
acquire such Shares or Share Equivalents or any portion of such Shares or
Share Equivalents. The Shares and Share Equivalents are and will be at all
times up until the Expiration Date free and clear of any liens, claims,
options, charges or other encumbrances.
(c) Each Shareholder agrees not to transfer (except as may
be specifically required by this Agreement, court order or by operation of
law), sell, exchange, pledge or otherwise dispose of or encumber the Shares,
Share Equivalents or any New Shares (as defined below), or to make any offer
or agreement relating thereto, at any time prior to the Expiration Date. As
used herein, the term "Expiration Date" shall mean the earlier to occur of
(i) the Closing Date (as defined in the Letter Agreement) of the Acquisition,
and (ii) six months after the date of the termination of the Letter Agreement.
1.2 New Shares.
----------
(a) Each Shareholder agrees that to the extent necessary
to achieve approval of such matters (if it is described in Section (a)(i) or
rejection of such matters described in Section 2(a)(ii)) shares of capital
stock of Seller that such Shareholder purchases or with respect to which such
Shareholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date ("New Shares") (such New Shares to
exclude an aggregate of 1,057,471 shares of Common Stock of Seller to be
issued to AGR Halifax Fund, Ltd., Leonardo, L.P., GAM Arbitrage Investments,
Inc., AG Super Fund International Partners, L.P., Raphael, L.P. and Ramius
Fund, L.P. upon the conversion of 27.6 shares of Series A Preferred Stock of
Seller) shall be subject to the terms and conditions of this Agreement to the
same extent as if they constituted Shares.
CUSIP No. 69833F104 13D Page 28 of 34 Pages
2. Agreements Regarding Shares and Share Equivalents.
-------------------------------------------------
(a) Prior to the Expiration Date, at every meeting of the
shareholders of Seller called with respect to any of the following, and at
every adjournment thereof, and on every action or approval by written
resolution of the shareholders of Seller with respect to any of the following,
each Shareholder shall vote the Shares and any New Shares (i) in favor of
approval of the Acquisition and any matter that could reasonably be expected
to facilitate the Acquisition and (ii) against any proposal for any
recapitalization, merger, sale of assets or other business combination (other
than the Acquisition) between Seller and any person or entity other than
Purchaser.
(b) Prior to the record date set for the first
shareholders meeting relating to any matter covered by Section 2(a) above,
each undersigned holder of Share Equivalents shall exercise or convert such
number of Share Equivalents, as the case may be, into capital stock of Seller,
pro rata in the amount determined by Purchaser to be necessary to achieve
approval of such matters (if it is described in Section 2(a)(i))or rejection
of such matters (if it is described in Section 2(a)(ii)), and vote such shares
as set forth in Section 2(a) above.
3. Irrevocable Proxy.
-----------------
Each Shareholder is hereby delivering to Purchaser a duly executed
proxy in the form attached hereto as Exhibit 1 (the "Proxy") with respect to
---------
each meeting of shareholders of Seller, such Proxy to cover the total number
of Shares and New Shares in respect of which each Shareholder is entitled to
vote at any such meeting. Upon the execution of this Agreement by each
Shareholder, each Shareholder hereby revokes any and all prior proxies given
by it with respect to the Shares and agrees not to grant any subsequent
proxies with respect to the Shares or any New Shares until after the
Expiration Date.
4. Agreements Regarding Security Interest.
--------------------------------------
(a) Prior to the record date set for the first
shareholders meeting relating to any matter covered by Section 3(a) above,
Seller and Helix shall enter into an agreement to restructure the indebtedness
of Seller (the "Secured Debt") currently secured by Helix's security interest
in certain assets of Seller in the form attached hereto as Exhibit 2 (the
"Restructuring Agreement"), and effective as of the Closing Seller and Helix
shall effectuate such restructuring.
(b) The Restructuring Agreement shall provide that (i)
Helix shall release its security interest in all assets of Seller other than
its intellectual property assets and (ii) the terms of the Secured Debt shall
be modified so that (A) the Secured Debt accrues interest after the Closing at
<PAGE>
CUSIP No. 69833F104 13D Page 29 of 34 Pages
a rate of 6% per annum, calculated on a monthly basis, (B) any interest
accrued with respect to the Secured Debt prior to the Closing is forgiven by
Helix and (C) the Secured Debt shall be subject to (x) a principal payment
obligation of $1,000,000 immediately after the Closing and (y) principal and
interest payments aggregating $100,000 per month on each of the monthly
anniversaries of the Closing (and such lesser amount on the eleventh monthly
anniversary of the Closing as shall satisfy all remaining principal and
interest on the Secured Debt).
5. Representations and Warranties of Shareholder.
---------------------------------------------
Each Shareholder hereby represents and warrants to Purchaser as
follows: (a) such Shareholder has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby;
(b) this Agreement has been duly authorized, executed and delivered by such
Shareholder and constitutes a valid and binding obligation of such Shareholder
enforceable against such Shareholder in accordance with its terms; (c) if such
Shareholder is a natural person and is married, and the Shares constitute
community property or otherwise need spousal or other approved for this
Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Shareholder's spouse, enforceable against such spouse in
accordance with its terms, and (d) no trust of which such Shareholder is a
trustee requires the consent of any beneficiary to the execution and delivery
of this Agreement or to the consummation of the transactions contemplated
hereby.
6. Additional Documents.
--------------------
Each Shareholder hereby covenants and agrees to execute and
deliver any additional documents reasonably required for the consummation of
the Acquisition or to carry out the purpose and intent of this Agreement.
7. Consent and Waiver.
------------------
Each Shareholder hereby gives any consents or waivers that are
reasonably required for the consummation of the Acquisition under the terms of
any agreement to which such Shareholder is a party or pursuant to any rights
such shareholder may have.
8. Termination.
-----------
This Agreement and the Proxy delivered in connection herewith
shall terminate and shall have no further force or effect as of the Expiration
Date.
CUSIP No. 69833F104 13D Page 30 of 34 Pages
9. Miscellaneous.
-------------
9.1 Severability.
------------
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment.
------------------------------
This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of
the parties without the prior written consent of the other. This Agreement is
intended to bind each Shareholder as a shareholder of Seller only with respect
to the specific matters set forth herein.
9.3 Amendment and Modification.
--------------------------
This Agreement may not be modified, amended, altered or
supplemented except by the execution and delivery of a written agreement
executed by the parties hereto.
9.4 Specific Performance; Injunctive Relief.
---------------------------------------
The parties hereto acknowledge that Purchaser will be
irreparably harmed and that there will be no adequate remedy at law for a
violation of any of the covenants or agreements of each Shareholder set forth
herein. Therefore, it is agreed that, in addition to any other remedies that
may be available to Purchaser upon any such violation, Purchaser shall have
the right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to Purchaser at law or in
equity and each Shareholder hereby waives any and all defenses which could
exist in its favor in connection with such enforcement and waives any
requirement for the security or posting of any bond in connection with such
enforcement.
9.5 Notices.
-------
All notices, requests, demands or other communications that
are required or may be given pursuant to the terms of this Voting Agreement
shall be in writing and shall be deemed to have been duly given upon receipt
by delivery in person, by telecopy or facsimile, by registered or certifie
CUSIP No. 69833F104 13D Page 31 of 34 Pages
mail or by a nationally recognized courier service to the respective parties
as follows:
(a) If to a Shareholder, at the address set forth below
such Shareholder's signature at the end hereof.
(b) if to Purchaser to:
Silicon Bandwidth, Inc.
1001 Bayhill Drive, Suite 140
San Bruno, CA 94066
Attention: Alan E. Salzman
Facsimile No.: (650) 869-6078
with a copy to:
Brobeck, Phleger & Harrison LLP
One Market Plaza
Spear Street Tower
San Francisco, CA 94105
Attention: Steve L. Camahort
Facsimile No.: (415) 442-1010
(c) if to Seller, to:
The Panda Project
951 Broken Sound Parkway
Boca Raton, FL 33487
with a copy to:
5300 First Union Financial Center
200 South Biscayne Blvd.
Miami, FL 33131-2339
Attention: John Fletcher
Facsimile No.: (305) 579-0321
or to such other address as any party hereto may designate for itself by
notice given as herein provided.
9.6 Governing Law.
-------------
This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of New York, except to the extent
mandatorily governed by the laws of the State of Florida.
CUSIP No. 69833F104 13D Page 32 of 34 Pages
9.7 Entire Agreement.
----------------
This Agreement and the Proxy contain the entire
understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
9.8 Counterpart.
-----------
This Agreement may be executed in several counterparts,
each of which shall be an original but all of which together shall constitute
one and the same agreement.
9.9 Effect of Headings.
------------------
The section headings herein are for convenience only and
shall not affect the construction or interpretation of this Agreement.
<PAGE>
CUSIP No. 69833F104 13D Page 33 of 34 Pages
EXHIBIT 3
----------
The undersigned shareholder of The Panda Project, Inc., a Florida
corporation ("Seller"), hereby irrevocably (to the full extent permitted by
the Florida Business Corporations Act) appoints the members of the Board of
Directors of Silicon Bandwidth, Inc., a Delaware corporation ("Purchaser"),
and each of them, or any other designee of Purchaser, as the sole and
exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of Seller that now are or
hereafter may be beneficially owned by the undersigned, and any and all other
shares or securities of Seller issued or issuable in respect thereof on or
after the date hereof (collectively, the "Shares") in accordance with the
terms of this Irrevocable Proxy. The Shares beneficially owned by the
undersigned shareholder of Seller as of the date of this Irrevocable Proxy are
listed on the final page of this Irrevocable Proxy. Upon the undersigned's
execution of this Irrevocable Proxy, any and all prior proxies given by the
undersigned with respect to any Shares are hereby revoked and the undersigned
agrees not to grant any subsequent proxies with respect to the Shares until
after the Expiration Date (as defined below).
This Irrevocable Proxy is irrevocable (to the extent provided in
the Florida Business Corporations Act), is coupled with an interest,
including, but not limited to, that certain Voting Agreement dated as of even
date herewith by and among Purchaser, Seller, and the undersigned, and is
granted in consideration of Purchaser entering into that certain letter
agreement dated of even date herewith between Seller and Purchaser (the
"Letter Agreement"), which agreement provides for the acquisition by Purchaser
of substantially all of the assets of Seller (the "Acquisition"). As used
herein, the term "Expiration Date" shall mean the earlier to occur of (i) such
date and time as the Acquisition shall become effective in accordance with the
terms and provisions of the Letter Agreement, and (ii) six months after the
date of termination of the Letter Agreement.
The attorneys and proxies named above, and each of them are hereby
authorized and empowered by the undersigned, at any time prior to the
Expiration Date, to act as the undersigned's attorney and proxy to vote the
Shares, and to exercise all voting and other rights of the undersigned with
respect to the Shares (including, without limitation, the power to execute and
deliver written consents pursuant to the Florida Business Corporations Act),
at every annual, special or adjourned meeting of the shareholders of Seller
and in every written consent in lieu of such meeting (i) in favor of approval
of the Acquisition, in favor of any matter that could reasonably be expected
to facilitate the Acquisition and against any proposal for any
recapitalization, merger, sale of assets or other business combination
relating to the Seller (other than the Transaction) and (ii) against any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Seller
under
<PAGE>
CUSIP No. 69833F104 13D Page 34 of 34 Pages
EXHIBIT 3
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13D-1(k)
The undersigned acknowledge and agree that the foregoing statement on Schedule
13D, is filed on behalf of each of the undersigned and that all subsequent
amendments to this statement on Schedule 13D, shall be filed on behalf of each
of the undersigned without the necessity of filing additional joint
acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason
to believe that such information is inaccurate.
Dated: January 26, 2000
RCG HALIFAX FUND, LTD. RAMIUS CAPITAL GROUP, LLC
By: Ramius Capital Group, LLC, By: C4S & Co., L.L.C.,
as Investment Adviser as Managing Member
By: C4S & Co., L.L.C., By: Morgan B. Stark,
as Managing Member as Managing Member
By: Morgan B. Stark,
as Managing Member
/s/________________________ /s/________________________
C4S & Co., L.L.C. MORGAN B. STARK
By: Morgan B. Stark,
as Managing Member
/s/________________________ /s/________________________
PETER A. COHEN THOMAS W. STRAUSS
/s/________________________ /s/________________________
