EXHIBIT 4.11
PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES
LAWS. IT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNDER
CIRCUMSTANCES THAT WOULD RESULT IN A VIOLATION OF THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR
SUCH OTHER LAWS.
AMENDED AND RESTATED SECURED PROMISSORY NOTE
U.S. $ 950,000 Dated: August 17, 1999
FOR VALUE RECEIVED, the undersigned, THE PANDA PROJECT, INC., a
Florida corporation (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES
TO PAY to the order of SILICON BANDWIDTH, INC., a Delaware corporation
(the "Lender"), the principal sum of NINE HUNDRED FIFTY THOUSAND
UNITED STATES DOLLARS (U.S. $950,000), on September 30, 1999 (the
"Maturity Date"). This Amended and Restated Secured Promissory Note
replaces the Secured Promissory Note of the Borrower dated June 14,
1999.
The Borrower further promises to pay interest on the outstanding
principal amount of this Promissory Note (this "Note") from June 14,
1999 until maturity (with respect to $300,000 of the outstanding
principal amount hereof), from July 15 until maturity (with respect to
$325,000 of the outstanding principal amount hereof) and from the date
hereof until maturity (with respect to $325,000 of the outstanding
principal amount hereof) at a rate per annum equal at all times to six
percent (6%) per annum. Accrued interest shall be payable on the
Maturity Date. In the event that any amount of principal or interest,
or any other amount payable hereunder, is not paid in full when due
(whether at stated maturity, by acceleration or otherwise), the
Borrower shall pay interest on such unpaid principal, interest or
other amount, from the date such amount becomes due until the date
such amount is paid in full, payable on demand, at a rate per annum
equal at all times to ten percent (10%) per annum. All computations
of interest shall be made on the basis of a year of 365 or 366 days,
as the case may be, for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest is payable.
This Note is secured by certain collateral more specifically
described in the Security Agreement dated as of June 14, 1999 between
Borrower and Lender (the "Security Agreement"). Capitalized terms not
otherwise defined in this Note shall have the meanings ascribed to
them in the Security Agreement.
All payments hereunder shall be made in lawful money of the
United States of America and in same day or immediately available
funds, to the Lender, at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000, or to such other office and account of the Lender as
it from time to time shall designate in a written notice to the
Borrower.
Whenever any payment hereunder shall be stated to be due, or
whenever any interest payment date or any other date specified
hereunder would otherwise occur, on a day other than a Business Day
(as defined below), then, except as otherwise provided herein, such
payment shall be made, and such interest payment date or other date
shall occur, on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment
of interest hereunder. As used herein, "Business Day" means a day (i)
other than Saturday or Sunday, and (ii) on which commercial banks are
open for business in New York, New York.
All payments shall be made hereunder unconditionally in full
without deduction, setoff, counterclaim or other defense, including,
without limitation, any deduction or setoff arising out of or in
connection with the Letter of Intent dated as of May 14, 1999 by and
between Xxxxxx and Borrower (the "Letter of Intent"), and the Asset
Purchase Agreement by and between Lender and Borrower to be executed
pursuant to the Letter of Intent (the "Asset Purchase Agreement");
provided, however, that no payment hereunder shall be deemed to be a
waiver of any right or claim that the Borrower may have under such
agreements. The Borrower represents and warrants to the Lender that,
to the best of Xxxxxxxx's knowledge, there is no claim, defense,
counterclaim or set-off which could be asserted by or is available to
the Borrower against the Lender.
The Borrower shall pay all amounts due under this Note free and
clear of, and without reduction for or on account of, any present and
future taxes, levies, imposts, duties, fees, assessments, charges,
deductions or withholdings and all liabilities with respect thereto
(collectively "Taxes"). If any Taxes shall be required by law to be
deducted or withheld from any payment, the Borrower shall increase the
amount paid so that the Lender receives when due (and is entitled to
retain), after deduction or withholding for or on account of such
Taxes (including deductions or withholdings applicable to additional
sums payable under this paragraph), the full amount of the payment
provided for in this Note.
If the Lender is required by law to make any payment on account
of Taxes, or any liability in respect of any Tax is imposed, levied or
assessed against the Lender, the Borrower shall indemnify the Lender
for and against such payment or liability, together with any
incremental taxes, interest or penalties, and all costs and expenses,
payable or incurred in connection therewith, including Taxes imposed
on amounts payable under this paragraph whether or not such payment or
liability was correctly or legally asserted. A certificate of the
Lender as to the amount of any such payment shall, in the absence of
manifest error, be conclusive and binding for all purposes.
Anything herein to the contrary notwithstanding, if during any
period for which interest is computed hereunder, the amount of
interest computed on the basis provided for in this Note, together
with all fees, charges and other payments which are treated as
interest under applicable law, as provided for herein or in any other
document executed in connection herewith, would exceed the amount of
such interest computed on the basis of the Highest Lawful Rate, the
Borrower shall not be obligated to pay, and the Lender shall not be
entitled to charge, collect, receive, reserve or take, interest in
excess of the Highest Lawful Rate, and during any such period the
interest payable hereunder shall be computed on the basis of the
Highest Lawful Rate. As used herein, "Highest Lawful Rate" means the
maximum non-usurious rate of interest, as in effect from time to time,
which may be charged, contracted for, reserved, received or collected
by the Lender in connection with this Note under applicable law.
Any of the following events which shall occur shall constitute
an "Event of Default":
(a) The Borrower shall fail to pay when due any amount of
principal or interest on this Note or any other amount payable under
this Note, the Security Agreement or any other Document.
(b) Any representation or warranty by the Borrower under or
in connection with this Note, the Security Agreement or any other
Document shall prove to have been incorrect in any material respect
when made or deemed made.
(c) The Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Note, the Security
Agreement or any other Document on its part to be performed or
observed and any such failure shall remain unremedied for a period of
10 days from the occurrence thereof.
(d) The Borrower shall fail to make payment when due on any
other indebtedness for money borrowed with an aggregate principal
amount outstanding of $ 10,000.00 or more, or otherwise fails to
perform any covenant in or otherwise breaches the terms of any
instrument relating to such indebtedness which failure or breach
permits the holder of such indebtedness to accelerate the maturity of
such indebtedness.
(e) Any levy upon, seizure or attachment of the Collateral or
any part thereof, or any material impairment in the value of the
Collateral or the priority of the Lender's lien thereon.
(f) The Borrower or any other Person shall challenge the
validity of this Note, or the Security Agreement, or the grant of the
security interest thereunder.
(g) The Borrower shall (i) liquidate, wind up or dissolve (or
suffer any liquidation, wind-up or dissolution), (ii) suspend its
operations other than in the ordinary course of business, or (iii)
take any corporate action to authorize any of the actions or events
set forth above in this paragraph (g).
(h) A final judgment or order for the payment of money in
excess of $10,000.00 (excluding the settlement of the lawsuit between
Borrower and Promethean LLC for up to $35,000.00) which is not fully
covered by third-party insurance shall be rendered against the
Borrower; or any non-monetary judgment or order shall be rendered
against the Borrower which has or would reasonably be expected to have
a material adverse effect upon the operations, properties, business or
condition (financial or otherwise) of the Borrower; and in each case
there shall be any period of 20 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(i) The Borrower shall merge with or consolidate into or
acquire all or a substantial part of the assets of another Person or
sell, lease, transfer or otherwise dispose of all or a substantial
part of its assets.
(j) The Borrower shall form any subsidiaries, alter its
capital structure, declare or pay any dividends or purchase, redeem or
retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, return capital to its shareholders or
distribute assets to its shareholders; provided, however, that the
Borrower may, pursuant to the terms and conditions of its existing
stock option and stock purchase agreements between the Borrower and
its employees and consultants, issue stock options and repurchase
unvested shares of common stock of the Borrower.
If any Event of Default shall occur, the Lender may (i) by
notice to the Borrower, declare the entire unpaid principal amount of
this Note, all interest accrued and unpaid hereon and all other
amounts payable hereunder to be forthwith due and payable, whereupon
all unpaid principal under this Note, all such accrued interest and
all such other amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower, and (ii)
whether or not the actions referred to in clause (i) have been taken,
exercise any or all of the Lender's rights and remedies under the
Security Agreement and proceed to enforce all other rights and
remedies available to the Lender under applicable law.
No amendment or waiver of any provision of this Note, nor any
consent to any departure by the Borrower therefrom, shall in any event
be effective unless the same shall be in writing and signed by the
Lender and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given.
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by
facsimile) and mailed, sent or delivered to the respective parties
hereto at or to the following addresses or facsimile numbers (or at or
to such other address or facsimile number as shall be designated by
any party in a written notice to the other parties hereto):
If to the Lender: Silicon Bandwidth, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Chief Executive Officer
Xxxxxxxxx: (000) 000-0000
If to the Borrower: The Panda Project, Inc.
000 Xxxxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
Attn: Chief Executive Officer
Xxxxxxxxx: (000) 000-0000
All such notices and communications shall be effective (i) if
delivered by hand, upon delivery; (ii) if sent by mail, upon the
earlier of the date of receipt or five Business Days after deposit in
the mail, first class (or air mail, with respect to communications to
be sent to or from the United States), postage prepaid; and (iii) if
sent by facsimile, when sent.
No failure on the part of the Lender to exercise, and no delay
in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Note are
cumulative and not exclusive of any rights, remedies, powers and
privileges that may otherwise be available to the Lender.
Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under all
applicable laws and regulations. If, however, any provision of this
Note shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be
deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it
shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions
of this Note, or the validity or effectiveness of such provision in
any other jurisdiction.
The Borrower agrees to pay on demand all costs and expenses of
the Lender, and the fees and disbursements of counsel (including the
allocated costs of internal counsel), in connection with (i) any
amendments, modifications or waivers of the terms hereof, (ii) any
Event of Default, (iii) the enforcement or attempted enforcement of,
and preservation of any rights under, this Note, and (iv) any out-of-
court workout or other refinancing or restructuring or in any
bankruptcy case, including, without limitation, any and all losses,
costs and expenses sustained by the Lender as a result of any failure
by the Borrower to perform or observe its obligations contained
herein. In addition, the Borrower agrees to indemnify the Lender
against and hold it harmless from any and all present and future
stamp, transfer, documentary and other such taxes, levies, fees,
assessments and other charges made by any jurisdiction by reason of
the execution, delivery, performance and enforcement of this Note.
This Note shall be binding upon, inure to the benefit of and be
enforceable by the Borrower, the Lender and their respective
successors and assigns.
The Borrower shall not have the right to assign its rights and
obligations hereunder or any interest herein without the prior written
consent of the Lender. The Lender may sell, assign, transfer or grant
participations in all or any portion of the Lender's rights and
obligations hereunder. In the event of any such assignment the
assignee shall be deemed the "Lender" for all purposes of this Note
and any other documents and instruments relating hereto with respect
to the rights and obligations assigned to it. The Borrower agrees
that in connection with any such grant or assignment, the Lender may
deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Borrower and
its Subsidiaries.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
THE BORROWER AND XXXXXX XXXXXX AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR
ANY OTHER DOCUMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTIES THERETO. THE BORROWER
AND XXXXXX XXXXXX AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT IN ANY WAY LIMITING
THE FOREGOING, THE BORROWER AND XXXXXX FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS NOTE, THE SECURITY AGREEMENT OR ANY OTHER
DOCUMENT OR ANY PROVISION THEREOF.
IN WITNESS WHEREOF, the Borrower has duly executed this
Note, as of the date first above written.
THE PANDA PROJECT, INC.
By
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