EXHIBIT 99.1
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THE SUBORDINATED CONVERTIBLE DEBENTURES (THE "DEBENTURES") AND THE WARRANT
ISSUED AND SOLD PURSUANT TO THIS SUBSCRIPTION AGREEMENT (THE "WARRANT"), THE
SHARES OF COMMON STOCK ISSUABLE UNDER SUCH INSTRUMENTS AND/OR THE SHARES OF
COMMON STOCK REFERRED TO IN SECTION 5.6 BELOW (SUCH DEBENTURES, WARRANT AND
SHARES ARE REFERRED TO HEREIN COLLECTIVELY AS, THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR UNDER THE LAWS OF ANY JURISDICTION IN RELIANCE UPON REGULATION S UNDER
THE ACT. UNTIL THE FORTY-FIFTH (45TH) DAY AFTER ISSUANCE OF THE DEBENTURES WITH
RESPECT TO 50% OF THE PRINCIPAL AMOUNT OF THE DEBENTURES AND THE SIXTIETH (60TH)
DAY AFTER ISSUANCE OF THE DEBENTURES WITH RESPECT TO THE BALANCE OF SUCH
PRINCIPAL AMOUNT AND AS OTHERWISE PROVIDED HEREIN OR IN THE DEBENTURES OR THE
WARRANT, THE SECURITIES MAY NOT BE OFFERED , SOLD OR TRANSFERRED (INCLUDING ANY
INTEREST THEREIN) IN THE UNITED STATES OR TO A "U.S. PERSON" (AS DEFINED IN
REGULATION S PROMULGATED UNDER THE ACT) OR FOR THE ACCOUNT AND BENEFIT OF ANY
U.S. PERSON, EXCEPT AS PROVIDED IN REGULATION S PROMULGATED UNDER THE ACT. ANY
RESALE THEREAFTER MUST BE PURSUANT TO REGISTRATION UNDER THE ACT OR AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT, FURTHER, NEITHER THE
PANDA PROJECT, INC. (THE "COMPANY") NOR ITS TRANSFER AGENT SHALL BE OBLIGATED TO
REMOVE ANY LEGEND ON CERTIFICATES REPRESENTING SUCH SECURITIES UNLESS IT SHALL
HAVE RECEIVED AN OPINION OF COUNSEL TO THE HOLDER OF ANY SUCH SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT STATING THAT SUCH
REMOVAL COMPLIES WITH THE REQUIREMENTS OF REGULATION S.
THIS AGREEMENT is made as of the 2nd day of April, 1997, by and between
The Panda Project, Inc., a Florida corporation (the "Company"), Dusseldorf
Securities Limited ("Dusseldorf"), a corporation organized under the laws of The
British Virgin Islands and the Purchasers set forth on Schedule 1 hereto
(collectively "Purchasers", "Purchaser") and Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx &
Xxxxx ("Escrow Agent"). Unless otherwise defined herein, capitalized terms used
herein and not otherwise defined shall have the meanings given to them in
Regulation S ('Regulation S") promulgated under the Act.
WITNESSETH:
WHEREAS in reliance upon the respective representations and warranties
of the Company and Purchaser, and the terms and conditions hereinafter set
forth, the Purchasers (in the principal amount set forth on Schedule 1 hereto)
desire to acquire, and the Company desires to issue, $4,800,000 principal amount
of the Company's 4% Subordinated Convertible Debentures due April 2, 1999
convertible into shares of common stock of the Company, $.01 par value ("Common
Stock"), in the form of Exhibit "A" (the "Debentures") at the purchase price of
U.S. $4,800,000 (the "Purchase Price"); and
WHEREAS Dusseldorf will be issued, in exchange for certain placement
services provided by Dusseldorf to the Company, a warrant (the "Warrant") to
purchase 42,667 shares of the Company's Common Stock exercisable from forty-five
(45) days after the date hereof to five (5)
years after the date hereof with an exercise price set forth in and otherwise in
the form of Exhibit "B". The shares of the Company Common Stock issuable upon
conversion of the Debentures or upon exercise of the Warrant are referred to
herein as the "Shares."
NOW, THEREFORE, in consideration of the premises and the respective
covenants hereinafter set forth, the Company, Purchaser and Escrow Agent hereby
agree as follows:
SALE AND PURCHASE OF SECURITIES.
1.1 The Company agrees to sell to Purchasers and Purchasers hereby
agree to purchase from the Company the Debentures set forth above and in the
amount set forth opposite their names on Schedule 1 hereto. Such sale and
purchase shall take place upon payment of the aggregate $4,800,000 Purchase
Price for the Debentures by electronic transfer of immediately available funds
to the Escrow Agent as follows:
Name of Account: Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx & Xxxxx
XXXX Account,
Bank: Chase Manhattan Bank
ABA No. 021-000021
Account No. 128074204665.
The Company hereby acknowledges that it has been advised by the Escrow
Agent that the Escrow Agent is representing Dusseldorf in the transaction
contemplated by this Agreement but is acting herein solely as an Escrow Agent.
1.2. At the closing (the "Closing"), the Company shall deliver the
Debentures and the Warrant to the Escrow Agent. Upon delivery of the Debentures
and Warrant, immediately available funds representing the Purchase Price shall
be wire transferred by the Escrow Agent to a bank account or bank accounts
specified by the Company. The Escrow Agent shall then deliver the Debentures to
the Purchaser in accordance with the Purchaser's instructions and the Warrant to
Dusseldorf in accordance with Dusseldorf's instructions. Closing shall occur no
later than 10 days after the date of this Agreement.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
To the Company's knowledge, which for purposes of this Section 2. shall
include all of its subsidiaries on a consolidated basis, except as set forth in
the attached Schedule of Exceptions, the Company hereby represents, warrants and
covenants to Purchaser and Dusseldorf that as of the date hereof and at the
Closing:
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2.1. The Company has been duly organized, is validly existing
and is in good standing under the laws of the State of Florida.
2.2. The Company has full corporate right, power and authority
to enter into this Agreement, perform its obligations hereunder and to sell the
Debentures to the Purchaser and the Warrant to Dusseldorf. This Agreement, the
Debentures and the Warrant are binding agreements and enforceable against the
Company in accordance with their terms.
2.3. The Company's public filings under the Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (collectively
the "Disclosure Documents"), when read together, do not contain any untrue
statement of any material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
2.4 The Company's common stock is registered pursuant to Section
12(g) of the Exchange Act.
2.5. The Company is, to the best of its knowledge and belief, in
compliance in all material respects with all applicable laws and regulations of
federal, state and local government agencies having jurisdiction over it other
than non-compliance that would not have a material adverse effect on the
Company.
2.6. If the Debentures are converted into Shares and/or the
Warrant is exercised, the Shares, when issued, will be duly authorized, validly
issued, fully paid and non-assessable. Upon delivery to Purchaser of the Shares
pursuant to the provisions of this Agreement and receipt of payment therefor,
Purchaser will acquire valid title in said Shares, free and clear of all liens,
encumbrances, restrictions, claims and commitments of every kind, except for
restrictions arising under federal, state, local and foreign securities laws or
as set forth in this Agreement or the Debenture.
2.7. Neither the execution or delivery of this Agreement nor the
performance by the Company of the transactions contemplated herein violates any
provision of law applicable to the Company or conflicts with or will result in a
breach or termination of any provision of, or constitutes a default, or will
result in the creation of any lien, charge or encumbrance upon any of the
property or assets of the Company under the Company's Articles of Incorporation
(subject to the total authorized number of shares of Common Stock therein and
any increase in such authorized number as may be necessary to provide for the
conversion of the Debentures and exercise of the Warrant) or By-Laws, mortgage,
deed of trust, indenture or other material agreement or instrument, or any
order, judgment, decree, statute, regulation or any other restriction of any
governmental authority to which the Company is a party or by which any of the
assets of the Company may be bound with or without the giving of notice, the
passage of time or both, except with respect to applicable laws affecting
creditors' rights.
2.8. (i) The Company is a Reporting Issuer. The Company is in
full compliance, to the extent applicable, with all reporting obligations under
Section 13(a) or 15(d) of the Exchange Act.
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(ii) The Company has not offered the Debentures, the
Warrant or the Shares to any person in the "United States" (hereinafter, as
defined under Regulation S) or to any identifiable groups of U.S. citizens
abroad or to any U.S. Person.
(iii) At the time the buy order was originated, the
Company and/or its agent reasonably believed the Purchaser was outside of the
United States and was not a U.S. Person.
(iv) The Company and/or its agent believe that the
transaction has not been prearranged with a buyer in the United States.
(v) In regard to this transaction, the Company has not
nor to its knowledge has any affiliate or person acting on behalf of itself or
the Company conducted any "directed selling efforts" as that term is defined in
Rule 902 of Regulation S nor has the Company conducted any general solicitation
relating to the offer and sale of the Debentures, the Warrant or the Shares to
persons resident within the United States or elsewhere.
(vi) The sale of the Debentures, the Warrant and the
Shares are not part of a plan or scheme to evade the registration requirements
of the Act. The Company believes that the Purchase Price is reasonable after
consideration of the applicable restricted period under Regulation S, the
historical volatility of the market price of the Common Stock of the Company,
the current financial condition of the Company, the dilution represented by the
sale of the Debentures, the Warrant, the Shares and any other sales of
debentures, warrant or shares of the Common Stock of the Company occurring
concurrently herewith, current stock market conditions and other relevant
information concerning the Company.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser and only Dusseldorf with respect to the Warrant and the
Shares referred to in Section 5.6 (collectively for purposes of this Section 3,
the "Purchaser") hereby represent, warrant and covenant to the Company that as
of the date hereof and at the Closing:
3.1. The Purchaser understands and acknowledges that the
Securities (as defined in the legend at the beginning of this Agreement)
acquired pursuant to this Agreement have not been registered under the Act, and
are being sold in reliance upon an exemption from registration afforded by
Regulation S promulgated under the Act; and that the Securities have not been
registered with, passed on, reviewed or recommended by any state or foreign
securities commission or authority. The Purchaser: (i) will not, during the
applicable restricted period under Regulation S (the "Restricted Period"),
offer, sell, pledge or otherwise transfer the Securities in the United States,
or to a U.S. Person or for the account or benefit of a U.S. Person; (ii) will,
during the Restricted Period, offer, sell, pledge or otherwise transfer the
Securities only in accordance with Rules 903 or 904 of Regulation S under the
Act, pursuant to registration under the Act or pursuant to an available
exemption from the registration requirements of the Act (and based upon an
opinion of counsel to such Purchaser which is satisfactory to the Company if the
Company so requests), and in accordance
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with all applicable state and foreign securities laws; and (iii) will, after the
expiration of the Restricted Period, offer, sell, pledge or otherwise transfer
the Securities (or create or maintain any derivative position equivalent thereto
only pursuant to registration under the Act or an available exemption therefrom
(and based upon an opinion of counsel to such Purchaser which is satisfactory to
the Company if the Company so requests) and, in any case, in accordance with all
applicable federal, state and foreign securities laws. The Company will not
honor or register and will not be obligated to honor or register any transfer in
violation of these provisions.
3.2. (i) The Purchaser is not a U.S. Person and is not
acquiring the Securities for the account or benefit of any U.S. Person; (ii) if
a corporation, it is not organized or incorporated under the laws of the United
States; (iii) if a corporation, no director or executive officer is a national
or citizen of the United States; and (iv) it is not otherwise deemed to be a
U.S. Person.
3.3. The Purchaser was not formed specifically for the purpose
of acquiring the Securities purchased pursuant to this Agreement. At the time
the offer and buy orders for the Securities were originated, including, without
limitation, at the time Purchaser executed and delivered this Agreement and
otherwise subscribed for or agreed to purchase the Securities Purchaser was
located outside the United States. The transactions contemplated by this
Agreement have not been pre-arranged with a buyer located in the United States
or with a U.S. Person, and are not part of a plan or scheme on the part of
Purchaser, any of its affiliates or any person acting on its or their behalf, to
evade the registration requirements of the Securities Act.
3.4. The Purchaser acknowledges that it has, either alone
and/or through its agents, been afforded access to all material information
concerning the Company and has received responses to all questions specifically
posed to the Company relevant to Purchaser's decision to acquire the Securities.
Without limiting the foregoing, it has alone and/or through its agents, had
adequate opportunity to ask questions of and receive answers from, responsible
officers and/or directors of the Company and to conduct any other investigation
it deems necessary and appropriate concerning the acquisition of the Securities.
Except as set forth herein, the Company has made no representations or
warranties to Purchaser which have induced, persuaded or stimulated it to
subscribe for and acquire the Securities hereunder.
3.5 The Purchaser has received copies of the following
Disclosure Documents: The Company's Form 10-K for the year ended March 31, 1996
as filed with the Securities and Exchange Commission, the Proxy Statement for
Annual Meeting of Stockholders held on August 16, 1996 and its quarterly report
on Form 10-Q for the quarter ended December 31, 1996 and the Company has made
available to the Purchaser all other public documents filed with the Commission
which have been requested by Purchaser. The Purchaser has received and is
familiar with the risk factors contained in the Company's Form 10-K for the year
ended March 31, 1996 and the Company's Registration Statement on Form S-3
(Registration No. 333-14931).
3.6. The Purchaser acknowledges that the Company is relying
upon the truth and accuracy of the representations, warranties and covenants of
Purchaser made herein in selling the Securities hereunder without registration
and in reliance upon Regulation S promulgated under the Act. It is
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familiar with Regulation S and has consulted with legal counsel familiar with
Regulation S in connection with this transaction.
3.7. The Purchaser has been duly organized, is validly existing
and is in good standing under the laws of the jurisdictions set forth on
Schedule 1 hereto, was not formed for the express purpose of acquiring the
Securities, and if a corporation, all corporate action on its part, necessary
for the authorization, execution, delivery and performance of Purchaser's
obligations under this Agreement has been or shall be taken prior to the closing
of this transaction, and this Agreement, when executed and delivered, shall
constitute a valid and legally binding obligation of the Purchaser enforceable
against Purchaser in accordance with its terms.
3.8. The Purchaser is purchasing the Securities for its own
account, not with a view to any distribution thereof and not for the account or
benefit of a U.S. Person, and no other person has any interest in or
participation in the Securities or any right, option, security interest, pledge
or other interest in or to the Securities. It understands, acknowledges and
agrees it must bear the economic risk of its investment in the Securities for an
indefinite period of time and that prior to any offer or sale of such
securities, the Company may require, as a condition to effecting a transfer of
the Securities, an opinion of counsel to Purchaser acceptable to the Company, as
to the registration or exemption therefrom under the Act. It also understands
that the Company is under no obligation to register the Securities on behalf of
Purchaser or Dusseldorf or to assist it in complying with any exemption from
registration except as provided herein.
3.9. The offer leading to the sale evidenced hereby was made in
an "offshore transaction", for purposes of Regulation S. At the time of the
origination of contact concerning this Agreement and the date of the execution
and delivery of this Agreement, Purchaser was outside the United States.
3.10. Neither the Purchaser nor any affiliate of the Purchaser
or any person acting on its behalf, has made or is aware of any or will make any
"directed selling efforts" (as defined in Regulation S) in the United States or
any activity undertaken for the purpose of, or that could reasonably be expected
to have the effect of, conditioning the market in the United States for any of
the securities being purchased hereby. Purchaser and its affiliates and agents
have complied and will comply with the "offering restrictions" requirements of
Regulation S in making offers and sales of the Securities.
3.11. Except as set forth in the Agreement, no representations
or warranties have been made to the Purchaser by the Company, the officers or
directors of the Company, or any agent, employee or affiliate of any of them,
and in entering into this transaction the Purchaser is not relying upon any
other information, and the results of its own independent investigation. The
Purchaser, in making the decision to purchase the Securities, has relied upon
independent investigations made by it and has not relied on any information or
representations made by third parties and the Buyer believes that the Purchase
Price is reasonably related to the Restricted Period, the historical volatility
of the market price of the Common Stock of the Company, the current financial
condition of the Company, the dilution represented by the sale of the Securities
and any other sales of debentures, warrants or shares of the Common Stock of the
Company occurring concurrently herewith, current stock market
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conditions and other relevant information concerning the Company. The Purchaser
acknowledges that it is a sophisticated investor, that it has invested in other
Regulation S transactions by other issuers, and that an investment in the
Securities involves a high degree of risk.
3.12. If the Purchaser is a corporation or trust or other
entity, the officer or trustee or other person executing this Agreement
represents and warrants that he or she is duly authorized to so sign this
Agreement and to consummate the transactions contemplated hereby and that
Purchaser is authorized by its governing documents to make this investment.
Purchaser has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Securities, and it is able to bear the economic risk of losing up to the entire
amount of its investment therein.
3.13. The Purchaser consents to the Company placing an
appropriate stop transfer order against the certificate representing the
Debentures and acknowledges that such certificates will bear a legend in
substantially the following form:
THIS SUBORDINATED CONVERTIBLE DEBENTURE (THE "DEBENTURE") DEBENTURE AND
THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT")
OR UNDER THE LAWS OF ANY OTHER JURISDICTION, IN RELIANCE UPON
REGULATION S UNDER THE ACT. UNTIL THE FORTY-FIFTH (45TH) DAY AFTER
ISSUANCE OF THE DEBENTURES WITH RESPECT TO 50% OF THE PRINCIPAL AMOUNT
OF THE DEBENTURES AND THE SIXTIETH (60TH) DAY AFTER ISSUANCE OF THE
DEBENTURES WITH RESPECT TO THE BALANCE OF SUCH PRINCIPAL AMOUNT, AND AS
OTHERWISE PROVIDED HEREIN, AFTER THE SALE OF THIS DEBENTURE PURSUANT TO
REGULATION S IS COMPLETED, NEITHER THIS CONVERTIBLE DEBENTURE NOR THE
SHARES ISSUABLE HEREUNDER MAY BE OFFERED, SOLD OR TRANSFERRED
(INCLUDING ANY INTEREST THEREIN) IN THE UNITED STATES OR TO A "U.S.
PERSON" (AS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) OR FOR
THE ACCOUNT OR BENEFIT OF ANY U.S. PERSON, EXCEPT AS PROVIDED IN SAID
REGULATION S. ANY RESALE THEREAFTER MUST BE PURSUANT TO REGISTRATION
UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. NEITHER THE PANDA PROJECT, INC. (THE
"CORPORATION") NOR ITS TRANSFER AGENT SHALL BE OBLIGATED TO REMOVE THIS
LEGEND UNLESS IT SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO HOLDER
REASONABLY SATISFACTORY TO THE CORPORATION AND ITS TRANSFER AGENT
STATING THAT SUCH REMOVAL COMPLIES WITH THE REQUIREMENTS OF REGULATION
S.
3.14. In connection with the issuance of the Warrants and the
Shares issuable upon the exercise of the Warrants, the Dusseldorf consents to
the Company placing an appropriate stop transfer order against such Warrant and
agrees to satisfy the following requirements as set forth in
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Rule 902(m) of Regulation S: (i) Each Warrant shall bear a legend stating that
the Warrant and the securities to be issued upon its exercise have not been
registered under the Act and that the Warrant may not be exercised by or on
behalf of any U.S. Person unless registered under the Act or an exemption from
such registration is available; (ii) each person exercising a Warrant will be
required to give: (A) written certification that is not a U.S. Person and the
Warrant is not being exercised on behalf of a U.S. Person; or (B) a written
opinion of counsel acceptable to the Company to the effect that the Warrant and
Shares delivered upon exercise thereof have been registered under the Act or are
exempt from registration thereunder; and (iii) Dusseldorf shall agree to be
bound by procedures to ensure that the Warrant may not be exercised within the
United States and that the securities may not be delivered within the United
States upon exercise, other than in offerings deemed by counsel to the Company
to meet the definition of "offshore transaction" pursuant to paragraph (i)(3) of
Rule 902 of Regulation S, unless registered under the Act or an exemption from
such registration is available. The Company will not honor or register and will
not be obligated to honor or register any transfer in violation of these
provisions.
3.15. Neither the Purchaser nor any of its affiliates directly
or indirectly have within the past ninety (90) days nor will such persons
directly or indirectly enter into any short selling of any equity security of
the Company (including without limitation, the Common Stock) or any hedging
transaction with respect to any equity security of the Company, including
without limitation, puts, calls, or other option transactions, option writing
and equity swaps.
4. APPOINTMENT OF ESCROW AGENT
4.1. The Company, Purchaser and Dusseldorf hereby appoint the
Escrow Agent and the Escrow Agent hereby accepts its appointment as Escrow Agent
pursuant to the terms and conditions hereinafter set forth.
4.2. The Company shall issue the Debenture and the Warrants
with the appropriate Regulation S legend thereon, in the name of the Purchaser,
and deliver the Debenture and the Warrants to the Escrow Agent. Escrow Agent
shall hold the Debenture and the Warrants until it receives, by wire transfer as
hereinbefore set forth, the Purchase Price. Upon receipt of the Purchase Price,
Escrow Agent shall disburse the Purchase Price in accordance with instructions
it receives from the Company. Escrow Agent shall simultaneously therewith,
deliver the Debenture and the Warrants to the Purchaser and Dusseldorf,
respectively, pursuant to their instructions or with respect to the Debenture,
should Dusseldorf received written instructions for reissuance of the Debenture
in the respective principal amount of Dusseldorf's designated accounts, the
Escrow Agent shall deliver such instructions and the Debenture to the Company
within 10 days of the closing for reissuance to Dusseldorf and such accounts as
set forth in such instructions.
4.3. It is understood and agreed by the parties to this
Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed to be a
trustee for any party for any purpose and is merely acting as a depository and
in a ministerial capacity hereunder with the limited duties herein prescribed.
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(b) The Escrow Agent does not have and shall not be deemed to
have any responsibility in respect of any instruction, certificate or notice
delivered to it other than faithfully to carry out the obligations undertaken in
this Agreement and to follow the directions in such instruction or notice
provided in accordance with the terms hereof.
(c) The Escrow Agent is not and shall not be deemed to be
liable for any action taken or omitted by it in good faith and may rely upon,
and act in accordance with, the advice of its counsel without liability on its
part for any action taken or omitted in accordance with such advice. In any
event, its liability hereunder shall be limited to liability for gross
negligence, willful misconduct or bad faith on its part.
(d) The Escrow Agent may conclusively rely upon and act in
accordance with any certificate, instruction notice, letter, telegram, cablegram
or other written instrument believed by it to be genuine and signed by the
Company and Purchaser.
(e) The Company and Purchaser agree to hold harmless, indemnify
and defend the Escrow Agent for, from and against any loss, damage, liability,
judgment, cost and expense whatsoever, including attorney's fees, suffered or
incurred by it by reason of, or on account of, any misrepresentation made to it
or as to its status or activities as Escrow Agent under this Agreement except
for any loss, damage, liability, judgment, cost or expense resulting from gross
negligence, willful misconduct or bad faith on the part of the Escrow Agent.
(f) The Escrow Agent shall not be required to defend any legal
proceeding which may be instituted against it in respect of the subject matter
of this Agreement. If any such legal proceeding is instituted against it, the
Escrow Agent agrees promptly to give notice of such proceeding to the Company
and Purchaser. The Escrow Agent shall not be required to institute legal
proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay, omission or
otherwise, be deemed to have waived any right or remedy it may have either under
this Agreement or generally, unless such waiver be in writing, and no waiver
shall be valid unless it is in writing, signed by the Escrow Agent, and only to
the extent expressly therein set forth. A waiver by the Escrow Agent under the
terms of this Agreement shall not be construed as a bar to, or waiver of, the
same or any other such right or remedy which it would otherwise have on any
other occasion.
(h) The Escrow agent may refrain from taking any action other
than keeping all property held by it in escrow if it is uncertain concerning its
duties or rights under this Escrow Agreement or receives claims or demands from
any person or entity or receives a final judgment by a court of competent
jurisdiction if it deems that necessary or advisable.
5. MISCELLANEOUS.
5.1. The terms and conditions of this Agreement shall inure to
the benefit of and be binding
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upon the respective successors and assigns of the parties hereto. Nothing in
this Agreement, express or implied is intended to confer upon any party, other
than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
5.2. Any notice under the provisions of this Agreement shall be
given in writing and delivered by hand, overnight courier or messenger service,
against signed receipt or acknowledgment of receipt, or by registered or
certified mail, return receipt requested, or telecopier or similar means of
communication if receipt is confirmed or if transmission is confirmed by mail as
provided in this paragraph 5.2, to the Purchaser at its address set forth above
and/or its telecopier number set forth on the signature page hereof or to the
Company at its address set forth above and/or its telecopier number set forth on
the signature page hereof, or to the Escrow Agent at its address set forth above
and/or its telecopier number set forth on the signature page hereof. Any party
may by like notice, change the address to which notice should be given. This
Agreement and the Debentures and Warrant may be executed by the parties hereto
by exchange of signatures by telecopier or similar means in the manner provided
herein.
5.3 This Agreement shall be governed by and construed in
accordance with the laws of the state of Florida.
5.4 This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
5.5 The warranties and representations of the Company and the
Purchaser contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the closing hereunder.
5.6 The Company agrees to pay Dusseldorf a fee in the amount of
8% of $4,800,000, equal to a fee of $384,000 whereof $192,000 will be paid in
cash out of Escrow on the date of closing, and the remaining $192,000 will be
paid by the Company issuing 30,918 shares of common stock registered on Form S-8
or Form S-3 (provided a form S-3 is filed with the SEC no later than 30 days
after the date of closing). Dusseldorf undertakes not to sell such shares
registered under such registration statement for a period of, at a minium, four
(4) months after the date of execution of the Subscription Agreement.
5.7 The Company represents and warrants that it is not at
present engaged in discussions, and will not be so engaged through August 31,
1997 with any persons, except Dusseldorf, for the placement of any equity
financing for the Company pursuant to a Regulation S or offshore (outside North
America) Regulation D offering and the Company will not be permitted to issue
any of its equity securities (or instruments convertible into or exercisable for
equity securities) in any Regulation S or offshore (outside North America)
Regulation D offering except to Dusseldorf or the Purchasers or other parties
contacted by Dusseldorf in a period from today's date until August 31, 1997. For
the period August 31, 1997 until February 28, 1998, the Company shall give
Dusseldorf fifteen (15) business days prior written notice ("Company Notice") of
its intention to conduct any Regulation S
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or offshore Regulation D offering and Dusseldorf shall have right of first
refusal with respect to any such offerings. If Dusseldorf declines to exercise
its rights of first refusal, or fails to do so within the prescribed time
periods, the Company may proceed with the proposed offering on the terms
described in the Company Notice. Nothing in this section shall be deemed to
prevent the Company from conducting, of onshore Regulation D offerings or an
offshore offering to a strategic major corporate investor.
5.8. In the event that the Securities and Exchange Commission
amends Regulation S under the Act to increase the 40-day restricted period under
Regulation S (the "Amendment"), the Amendment is effective within 45 days of the
date hereof, and the Amendment extends the holding period applicable to the
Shares underlying the Debentures and the Warrant held by the Purchaser and
Dusseldorf then, upon receipt of a written request by the Company from the
Purchaser to effect registration of the Shares, the Company shall, subject to
the limitations set forth below, within thirty (30) days, use reasonable efforts
to file a registration statement covering all Shares that the Purchaser has
requested to be registered. The Company may require each Purchaser and
Dusseldorf as a condition of participating in such registration to execute and
deliver a letter in the form of Exhibit C. The Company shall not be obligated to
effect, or take any action to effect, any such registration under this section
5.8 if (i) in the good faith judgment of the Board of Directors of the Company
such registration would adversely affect the Company and the Board of Directors
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (ii) the Company shall furnish to the
Purchaser a certificate signed by the President or the Chief Executive Officer
of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would adversely affect the Company for such registration
statement to be filed in the near future and that it is, therefore, essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for the period during which such filing would
adversely affect the Company, provided that the Company may not defer the filing
for a period of more than one hundred and eighty (180) days after the receipt of
the request by the Purchaser. The registration statement filed pursuant to the
request of the Purchaser may include other securities of the Company, with
respect to which registration rights have been granted, and may include
securities of the Company being sold for the account of the Company. The Company
shall not be required to effect a registration pursuant to this Section 5.8 on
more than one occasion, but shall be required to keep the registration statement
effective until all shares are sold or can be sold pursuant to Rule 144(k) under
the act, or to cause any registration of the Debentures or the Warrant. In
addition, the Company shall not be obligated to effect, or to take any action to
effect, any such registration during the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred twenty (120) days after the effective date of,
a registration statement otherwise filed by the Company covering shares newly
issued by the Company or held by selling shareholders, or both; provided that
the Company is actively employing in good faith all reasonable efforts to cause
such prior registration statement to become effective.
5.9 Except as herein provided, any provision of this Agreement
may be amended or waived by a written instrument signed by the parties hereto.
11
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals as
of the date and year first written above.
Country in which this Agreement is executed by Purchaser:
Dusseldorf Securities Limited
By: _______________________________________
Name: Title:
Telecopier: No.:___________________________
___________________________________________
By: _______________________________________
Name: Title:
Telecopier No.:____________________________
___________________________________________
By:________________________________________
Name: Title:
Telecopier No.:____________________________
___________________________________________
By:________________________________________
Name: Title:
The Panda Project, Inc.
By:
----------------------------------------
Name: Title:
Telecopier No.: ___________________________
Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx & Xxxxx
By:
---------------------------------------
(Escrow Agent)
Telecopier No.: (000) 000-0000
12
