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EXHIBIT 3
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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
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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
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from the Closing until the Notes are repaid. Immediately after execution of
this Agreement, Helix agrees to ▇▇▇▇ 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
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(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
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
HELIX (PEI) INC.
By
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Name:
Title:
SILICON BANDWIDTH, INC.
By
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Name:
Title: