AGREEMENT
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THIS AGREEMENT is made and entered into as of May 12, 1999, by
and among THE PANDA PROJECT, INC., a Florida corporation (the
"Company"), HELIX (PEI) INC., a Xxxxxx Xxxxxx Island, Canada
corporation ("Helix"), and SILICON BANDWIDTH, INC., a Delaware
corporation ("SBI").
WHEREAS, Helix holds the three promissory notes (the "Notes")
payable to it by the Company described below:
Principal Amount Date of the Note
---------------- ----------------
US$750,000 May 28, 1998
US$1,000,000 June 22, 1998; and
US$250,000 July 17, 1998
WHEREAS, the Notes are in default and the parties desire to
provide for the actions described in this Agreement in order to settle
the default;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto
do hereby agree as follows:
1. Initial Payment and Accrued Interest Forgiveness. Upon
the closing of the acquisition of certain assets of the Company by SBI
(the "Closing"), SBI will pay $1,000,000 to Helix, with such payment
being applied solely toward principal on the Notes. In consideration
of such payment and the issuance of Panda common stock to Helix
pursuant to the Letter Agreement attached as Exhibit A, Helix hereby
forgives and irrevocably releases Panda from payment of all accrued
interest on the Notes remaining unpaid as of the date of such payment
of $1,000,000.
2. Forbearance. Helix agrees that all of the accrued and
unpaid interest and principal amount of each of the Notes shall be due
and payable in eleven payments. The first ten payments will be in the
amount of $100,000 each and are due on the first day of each of the
first ten months following the Closing. Helix will apply these ten
payments first toward accrued and unpaid interest and then principal
on the Notes. The eleventh and final payment will be in an amount
equal to all unpaid principal and interest outstanding on the Notes
and will be due on the first day of the eleventh month following
Closing. Helix agrees that, as a result, the Notes are no longer in
default. Interest on the Notes shall accrue at a rate of 6% per annum
from the Closing until the Notes are repaid. Immediately after
execution of this Agreement, Helix agrees to xxxx each of the Notes as
follows: "This Promissory Note has been modified and amended by that
certain Agreement dated as of May 12, 1999, by and between Payor,
Payee and Silicon Bandwidth, Inc."
3. Release of Security Interest. On the Closing Date, Helix
agrees to release its security interest in all royalties and fees
arising from the use or license of the Collateral as defined in that
certain Intellectual Property Security Agreement dated as of May 28,
1998 between Helix and the Company and that certain Intellectual
Property Security Agreement dated as of June 22, 1998 between Helix
and the Company. Helix's remaining security interest in the assets of
the Company will be released upon repayment in full of the Notes
pursuant to the terms of this Agreement or any promissory notes
replacing, or substituted for, the Notes provided for in Section 4
hereof.
4. Assumption. Helix agrees that the obligation to pay the
Notes may, at the Company's option, be assumed, without recourse to
the Company, by SBI. In the event of such assumption, Helix agrees to
cause SBI to issue a new note in lieu of the Notes, and to return the
original of each of the Notes to the Company, marked "Replaced."
Except for any different terms or conditions provided for in this
Agreement, Helix and SBI agree that such new note will include the
same terms and conditions as the Notes, as modified and amended by
this Agreement.
5. Indemnification. The Company, on the one hand, and
Helix, 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 Helix against any loss, cost or damages
(including reasonable attorneys' fees and expenses) suffered or
incurred as a result of Helix's (i) entrance into this Agreement or
(ii) entrance into the Voting Agreement.
6. 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.
(c) Entire Agreement; Amendments. This Agreement, together
with the Notes, the Voting Agreements of even date among SBI, the
Company and certain Company shareholders, and the letter agreements,
supersede all other prior oral or written agreements between Helix,
the Company, their affiliates and persons acting on their behalf with
respect to the matters discussed herein, and contain the entire
understanding of the parties with respect to the matters covered
therein.
(d) Termination. If the Closing Date has not occurred by
October 31, 1999, this agreement will terminate by written notice by
either party, with no continuing obligations of either party.
(e) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective successors and assigns.
IN WITNESS WHEREOF, the Company and Helix have caused this
Agreement to be duly executed of the date first written above.
THE PANDA PROJECT, INC.
By ______________________________
Name: Xxxxxxxx X. Xxxxx, Xx.
Title: President
HELIX (PEI) INC.
By ______________________________
Name:
Title:
SILICON BANDWIDTH, INC.
By ______________________________
Name:
Title:
EXHIBIT A
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