SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
DECEMBER 28, 1995
XIOX CORPORATION
(Exact name of registrant as specified in its charter)
577 Airport Boulevard, Suite 700, Burlingame, California 94010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 375-8188
Delaware 0-15797 95-3824750
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number
Page 1 of 3
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ITEM 2. Acquisition or Disposition of Assets
On December 28, 1995, in a private placement transaction, Xiox
Corporation (the "Company") sold 272,334 shares of Xiox Corporation restricted
Common Stock. The purchase price per share for the Common Stock was $1.50.
ITEM 7. Financial Statements and Exhibits.
(b). The transaction discussed in Item 2 is to be accounted for as a
sale of Common Stock. Registrant has attached a completed pro-forma consolidated
balance sheet of Xiox Corporation as of December 31, 1994 and September 30,
1995. The balance sheet numbers for September 30, 1995 include the proceeds from
the transaction referred to in Item 2 above as if the transaction had occurred
on September 30, 1995. Such September 30, 1995 numbers include an accrual of
$5,000 for legal and filing fees. This pro-forma consolidated balance sheet is
attached as sequentially numbered page 3.
(c). Exhibits
Condensed Pro Forma Balance Sheet as of September 30, 1995 and
December 31, 1994.
2.1 Stock Purchase Agreement Registration Rights Agreement
dated December 28, 1995.
2.2 Registration Rights Agreement dated December 28, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized
XIOX CORPORATION
January 11, 1996 By ________________________
Melanie D. Reid
Vice-President, Finance and
Chief Financial Officer
Page 2 of 3
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<TABLE>
PRO-FORMA FINANCIAL INFORMATION
XIOX CORPORATION
CONDENSED CONSOLIDATED PRO-FORMA BALANCE SHEETS
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
(UNAUDITED)* ***
<S> <C> <C>
ASSETS:
CURRENT ASSETS
CASH & CASH EQUIVALENTS $802,065 $52,556
ACCOUNTS RECEIVABLE, NET $1,144,929 $1,468,201
LEASE CONTRACT RECEIVABLE, CURRENT $0 $16,234
INVENTORIES $534,051 $370,052
PREPAID EXPENSES AND OTHER ASSETS $101,477 $62,456
TOTAL CURRENT ASSETS $2,582,522 $1,969,499
PROPERTY & EQUIPMENT, NET $532,098 $583,562
SOFTWARE ACQUISITION, NET $103,403 $126,050
NOTES RECEIVABLE $131,138 $131,138
DEPOSITS & OTHER ASSETS $102,892 $99,851
TOTAL ASSETS $3,452,053 $2,910,100
LIABILITIES/SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES
BANK LINE OF CREDIT $540,000 $270,000
ACCOUNTS PAYABLE $191,091 $356,151
ACCRUED EXPENSES $85,528 $48,782
ACCRUED COMPENSATION $75,532 $274,022
PURCHASE DEPOSITS $312,465 $67,177
DEFERRED REVENUE $813,150 $828,555
TOTAL CURRENT LIABILITIES $2,017,766 $1,844,687
STOCKHOLDERS EQUITY
COMMON STOCK, $.01 par, 10,000,000 Authorized, $20,854 $17,483
2,357,784 and 1,748,316 issued and outstanding
in 1995 and 1994
PAID IN CAPITAL $5,442,504 $4,073,675
ACCUMULATED DEFICIT ($4,029,071) ($3,025,745)
STOCKHOLDERS' EQUITY $1,434,287 $1,065,413
TOTAL LIABILITIES/EQUITY $3,452,053 $2,910,100
<FN>
* Balance Sheet at September 30, 1995 adjusted to give effect to proceeds (less
$5,000 accrued fees) from the sale of 272,334 shares of Common Stock at $1.50
per share on December 28, 1995.
***Condensed from audited financial statements. Page 3 of 3
</FN>
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</TABLE>
XIOX CORPORATION
STOCK PURCHASE AGREEMENT
December 28, 1995
<PAGE>
TABLE OF CONTENTS
Page
----
1. Purchase and Sale of Stock......................................... 1
1.1 Sale and Issuance of Common Stock..................... 1
1.2 Closing Date; Delivery................................ 1
2. Representations and Warranties of the Company...................... 1
2.1 Organization Good Standing and Qualification.......... 1
2.2 Authorization......................................... 2
2.3 Valid Issuance of Common Stock........................ 2
2.4 Compliance with Other Instruments..................... 2
2.5 SEC Filings........................................... 2
3. Representations and Warranties of the Investors.................... 2
3.1 Authorization......................................... 3
3.2 Purchase Entirely for Own Account..................... 3
3.3 Disclosure of Information............................. 3
3.4 Investment Experience................................. 3
3.5 Restricted Securities................................. 3
3.6 Further Limitations on Disposition.................... 3
3.7 Legends............................................... 4
4. California Commissioner of Corporations............................ 4
4.1 Corporate Securities Law.............................. 4
5. Conditions of Investor's Obligations at Closing.................... 4
5.1 Representations and Warranties........................ 4
5.2 Performance........................................... 5
5.3 Compliance Certificate................................ 5
5.4 Proceedings and Documents............................. 5
5.5 Registration Rights Agreement......................... 5
6. Conditions of the Company's Obligations at Closing................. 5
6.1 Representations and Warranties........................ 5
6.2 Payment of Purchase Price............................. 5
6.3 Qualification......................................... 5
7. Covenants of the Company........................................... 6
7.1 Maintain Listed Status................................ 6
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
----
8. Miscellaneous...................................................... 6
8.1 Survival of Warranties................................ 6
8.2 Successors and Assigns................................ 6
8.3 Governing Law......................................... 6
8.4 Counterparts.......................................... 7
8.5 Titles and Subtitles.................................. 7
8.6 Notices............................................... 7
8.7 Finder's Fee.......................................... 7
8.8 Amendments and Waivers................................ 7
8.9 Severability.......................................... 7
Exhibits:
Exhibit A - Schedule of Investors
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<PAGE>
XIOX CORPORATION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 28th day of December,
1995, by and between Xiox Corporation, a Delaware corporation (the "Company")
and the investors listed on Exhibit A hereto, each of which is herein referred
to as an "Investor" and collectively referred to as the "Investors".
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms
and conditions of this Agreement, each Investor agrees, severally and not
jointly, to purchase and the Company agrees to sell and issue to each Investor
at the Closing, as defined below, that number of shares of the Company's Common
Stock at the Closing set forth opposite each Investor's name on Exhibit A hereto
(the "Shares") for the purchase price set forth thereon.
1.2 Closing Date; Delivery.
(a) Closing Date. The closing of the purchase and
sale of the Common Stock designated for purchase by the Investors at the Closing
shall take place, subject to the satisfaction of the conditions set forth in
Sections 5 and 6, at the offices of Wilson, Sonsini, Goodrich & Rosati, 650 Page
Mill Road, Palo Alto, California, at eleven o'clock a.m., on December 28, 1995,
or at such other time and place as the Company and the Investors participating
in the Initial Closing shall agree (the "Closing Date").
(b) Delivery. At the Closing the Company shall
deliver to each Investor a certificate or certificates representing the Shares
which such Investor is purchasing against delivery to the Company by such
Investor of a check or wire transfer payable to the Company's order, or
cancellation of indebtedness, in the amount of the purchase price therefor set
forth opposite the Investor's name in Exhibit A hereto with respect to each such
Closing, respectively.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor that, effective as of the Closing.
2.1 Organization Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its financial condition, business or properties.
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2.2 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance and
delivery of the Shares being sold hereunder has been taken or will be taken
prior to the Closing at which such action is required, and this Agreement and
the Registration Rights Agreement to be entered into between the Company and the
Investors constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms.
2.3 Valid Issuance of Common Stock. The Shares which are being
purchased by the Investors hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly issued, and will be fully paid and nonassess able and, based in
part upon the representations of the Investors in this Agreement, the Shares
will be issued in compliance with all applicable federal and state securities
laws.
2.4 Compliance with Other Instruments. The Company is not in
violation or default of any provisions of its Certificate of Incorporation, as
amended, or Bylaws, as amended, or in any material respect of any instrument,
judgment, order, writ, decree or contract to which it is a party or by which it
is bound or, to its knowledge, of any provision of any federal or state statute,
rule or regulation applicable to the Company, except that the Company is
currently operating under an exception to the capital and surplus requirements
promulgated by the National Association of Securities Dealers ("NASD") for
listing on the NASD's automated quotation system in the NASD's Small-Cap Market.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not result in any such violation or
be in conflict with or constitute, with or without the passage of time and
giving of notice, either a default under any such provision, instrument,
judgment, order, writ, decree or contract or an event which results in the
creation of any lien, charge or encumbrance upon any assets of the Company.
2.5 SEC Filings. The Company has previously furnished to the
Investors true and complete copies of (i) its Annual Reports on Form 10-K filed
with the SEC for the fiscal year ended December 31, 1994, (ii) its Quarterly
Reports on Form 10-Q for the three months ended March 31, 1995, June 30, 1995,
and September 30, 1995 as filed with the SEC and (iii) definitive proxy
statements filed by the Company with the SEC for its annual shareholders'
meetings held in 1995. None of the documents referred to in this Section 2.5
contained as of its date any untrue statement of a material fact or omitted as
of its date to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Since December 31, 1992, the Company has made all
public filings required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended, and such filings were made on a
timely basis. The Company will use its best efforts to make available the
information necessary under Rule 144(c) under the Securities Act to enable sales
to be made under Rule 145(d) under the Securities Act.
3. Representations and Warranties of the Investors. Each Investor
severally and not jointly hereby represents and warrants that effective
currently as of each Closing:
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<PAGE>
3.1 Authorization. This Agreement constitutes his valid and
legally binding obligation, enforceable in accordance with its terms.
3.2 Purchase Entirely for Own Account. This Agreement is made
with each Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms that the Shares to be received by such Investor will be acquired
for investment for such Investor's own account, not as nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, each Investor
further represents that such Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares. Each Investor represents that he has full power and authority to enter
into this Agreement.
3.3 Disclosure of Information. He believes he has received all
the information he considers necessary or appropriate for deciding whether to
purchase the Shares. Each Investor further represents that he has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Shares. The foregoing, however, does
not limit or modify the representations and warranties of the Company in Section
2 of this Agreement or the right of the Investors to rely thereon.
3.4 Investment Experience. Each Investor is experienced in
investing in companies similar to the Company, is able to fend for himself, can
bear the economic risk of his investment, and has such knowledge and experience
in financial or business matters that he is capable of evaluating the merits and
risks of the investment in the Shares.
3.5 Restricted Securities. Each Investor understands that the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances. In this connection, each Investor represents that he is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.6 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, each Investor further agrees not
to make any disposition of all or any portion of the Securities unless:
(a) There is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
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<PAGE>
(b) (i) Such Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, (ii) the
transferee has agreed in writing for the benefit of the Company to be bound by
the terms of this Agreement, and (iii) if reasonably requested by the Company,
such Investor shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will not require
registration of such shares under the Act. It is agreed that the Company will
not require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.
3.7 Legends. It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT."
(b) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations.
4. California Commissioner of Corporations.
4.1 Corporate Securities Law. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY Section 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. Conditions of Investor's Obligations at Closing. The obligations of
each Investor to purchase that number Shares set forth on Exhibit A hereto at
the Closing are subject to the fulfillment on or before the Closing Date of each
of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the date
of the Closing.
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<PAGE>
5.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
5.3 Compliance Certificate. The President or Vice President of
the Company shall deliver to each Investor at the Closing a certificate
certifying that the conditions specified in Sections 5.1 and 5.2 have been
fulfilled.
5.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to each Investor.
5.5 Registration Rights Agreement. The Company and the
Investors shall have executed the Registration Rights Agreement.
6. Conditions of the Company's Obligations at Closing. The
obligations of the Company to issue and sell the Shares to each Investor at the
Closing are subject to the fulfillment on or before the Closing Date of each of
the following conditions by that Investor:
6.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true and correct in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the date
of such Closing.
6.2 Payment of Purchase Price. The Investors shall have
delivered the purchase price specified in Section 1.2(b).
6.3 Qualification. Consent or approval of all relevant Blue
Sky authorities shall have been obtained with respect to the offer and sale to
the Investors of the Shares or such offer and sale shall be exempt from such
consent or approval.
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<PAGE>
7. Covenants of the Company.
7.1 Maintain Listed Status. Immediately after the Closing, the
Company shall promptly take all necessary actions to maintain the Company's
listed status on the NASD's Automated Quotation System.
7.2 Rule 144 Reporting. With a view to making available to the
Investors the benefits of certain rules and regulations of the SEC which may
permit the sale of the Common Stock purchased hereby to the public without
registration, the Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act;
(c) So long as an Investor owns any Common Stock purchased
hereby, to furnish to such Investor forthwith upon such Investor's request a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, and of the Securities Act and the Securities
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
Investor may reasonably request in availing itself of any rule or regulation of
the SEC allowing such Investor to sell any such securities without registration.
8. Miscellaneous.
8.1 Survival of Warranties. The warranties, representations
and covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
8.2 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective succes sors and assigns of the parties
(including transferees of any Preferred Stock sold hereunder or any Common Stock
issued upon conversion thereof). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
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<PAGE>
8.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
8.7 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each
Investor from any liability for any commission or compensation in the nature of
a finders' fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
8.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the holders of a majority of
the Shares sold hereunder. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding (including securities into which
such securities are convertible), each future holder of all such securities, and
the Company; provided, however, that no condition set forth in Section 5 or
Section 7 hereof may be waived with respect to any Investor who does not consent
thereto.
8.9 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XIOX CORPORATION
By: MELANIE D. REID
----------------------------
Title: VP of Finance/CFO
----------------------------
Address: 577 Airport Boulevard, Suite 700
Burlingame, CA 94010
INVESTORS:
EDMUND AND MARY SHEA REAL PROPERTY
TRUST TR DTD 10-3-85
-------------------------------------
(signature)
-------------------------------------
(print name)*
DANIEL F. SULLIVAN
-------------------------------------
(signature)
-------------------------------------
(print name)*
MICHAEL F. GREENE
-------------------------------------
(signature)
-------------------------------------
(print name)*
DARRELL L. KRULCE
-------------------------------------
(signature)
-------------------------------------
(print name)*
ATAM LALCHANDANI
-------------------------------------
(signature)
-------------------------------------
(print name)*
ANTHONY DIIULIO
-------------------------------------
(signature)
-------------------------------------
(print name)*
* Please print name exactly as you would like it to appear on your stock
certificate.
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<PAGE>
EXHIBIT A
SCHEDULE OF INVESTORS
NUMBER OF SHARES PURCHASE
INVESTOR OF COMMON STOCK PRICE
- ------------------------------------------ ----------------- ---------
EDMUND AND MARY SHEA TRUST ................... 233,334 $350,001
DANIEL F. SULLIVAN ........................... 10,000 $ 15,000
MICHAEL F. GREENE ............................ 10,000 $ 15,000
DARRELL L. KRULCE ............................ 8,000 $ 12,000
ATAM LALCHANDANI ............................. 8,000 $ 12,000
ANTHONY DIIULIO .............................. 3,000 $ 4,500
------- --------
TOTALS 272,334 $408,501
XIOX CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
December 28, 1995, by and between Xiox Corporation (the "Company") and the
undersigned holders of Common Stock of the Company.
1. Definitions. As used herein:
(a) The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of the effectiveness of such
registration statement.
(b) For the purposes hereof, the term "Registrable Securities"
means shares of (i) any and all Common Stock issued to the Holders pursuant to
those certain Stock Purchase Agreements pursuant to which the Company has sold
Common Stock in private placement transactions since October, 1992, (ii) stock
issued with respect to or in any exchange for or in replacement of stock
included in clause (i) above, or (iii) stock issued in respect of the stock
referred to in (i) and (ii) as a result of a stock split, stock dividend or the
like, which have not been resold to the public in a registered public offering.
(c) The terms "Holder" or "Holders" mean any person or persons
to whom Registrable Securities were originally issued and who execute this
Agreement or qualifying transferees under Section 11 hereof who hold Registrable
Securities.
(d) The term "Initiating Holders" means any Holder or Holders
of in the aggregate at least 30% of the Registrable Securities, which have not
been resold to the public in a registered public offering.
2. Requested Registration.
(a) Request for Registration. In case the Company shall
receive from Initiating Holders a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(i) within ten (10) days after its receipt thereof
give written notice of the proposed registration to all other Holders; and
(ii) as soon as practicable, use its best efforts
to effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualifications under
the applicable blue sky or other state securities laws and appropriate
compliance with exemptive regulations issued under the Securities Act and any
other governmental requirements or regulations) as may be so requested and as
would permit or facilitate the sale and
<PAGE>
distribution of all or such portion of such Holder's or Holders' Registrable
Securities as is specified in such request, together with all or such portion of
the Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request given within 20 days after receipt of such
written notice from the Company; provided that the Company shall not be
obligated to take any action to effect such registration pursuant to this
Section 2:
(A) In any particular jurisdiction in which
the Company would be required to execute a general consent to service of process
in effecting such registration; or
(B) Within six (6) months after the
effective date of any such registration; or
(C) After the Company has effected two such
registrations pursuant to this subsection 2(a) and such registrations have been
declared or ordered effective.
Subject to the foregoing clauses (A) through (C), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company and its shareholders for such registration statement to be filed at
the date filing would be required and it is therefore essential to defer the
filing of such registration statement, the Company shall have an additional
period of not more than sixty (60) days after the expiration of the initial
ninety (90) day period within which to file such registration statement.
(b) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2 and the Company shall include such information in the
written notice referred to in subsection 2(a)(i). In such event, if so requested
in writing by the Company, the Initiating Holders shall negotiate with an
underwriter selected by the Company with regard to the underwriting of such
requested registration; provided, however, that if a majority in interest of the
Initiating Holders have not agreed with such underwriter as to the terms and
conditions of such underwriting within 20 days following commencement of such
negotiations, a majority in interest of the Initiating Holders may select an
underwriter of their choice. The right of any Holder to registration pursuant to
Section 2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. The Company
shall (together with all Holders proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders, provided, however, that the
managing underwriter shall be approved by the Company, which approval shall not
be unreasonably withheld. Notwithstanding any other provision
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<PAGE>
of this Section 2, if the underwriter advises the Initiating Holders in writing
that marketing factors require a limitation of the number of shares to be
underwritten, the Initiating Holders shall so advise all Holders of Registrable
Securities who have elected to participate in such offering, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all such Holders thereof in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities held
by such Holders. If any Holder of Registrable Securities disapproves of the
terms of the underwriting, he may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders. Any Registrable
Securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from such underwriting shall be
withdrawn from such registration. If the underwriter has not limited the number
of Registrable Securities to be underwritten, the Company, employees of the
Company and other holders of the Company's Common Stock may include securities
for its (or their) own account in such registration if the underwriter so agrees
and if the number of Registrable Securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
3. Company Registration.
(a) If at any time or from time to time, the Company proposes
to register any of its securities, for its own account or the account of any of
its shareholders other than the Holders, (other than a registration relating
solely to employee stock option or purchase plans, or a registration on Form S-4
relating solely to an SEC Rule 145 transaction, or a registration on any other
form, other than Form S-1, S-2 or S-3, or their successor forms, or any
successor to such forms which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities) the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance with applicable laws), and
in any underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 20 days after receipt of such
written notice from the Company, by any Holder or Holders to be included in any
such registration, except as set forth in subsection 3(b) below.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subsection 3(a)(i). In such event the right of any Holder to
registration pursuant to Section 3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of
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<PAGE>
this Section 3, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
the number of Registrable Securities to be included in the registration and
underwriting. Notwithstanding the foregoing, in no event shall the amount of
securities of the selling Holders included in the offering be reduced below
fifteen percent (15%) of the total amount of the securities included in such
offering, in which case the selling Holders may be excluded if the underwriters
make the determination described above and no other shareholders' securities are
included. In the event of a cutback by the underwriters of the number of
Registrable Securities to be included in the registration and underwriting, the
Company shall advise all Holders of Registrable Securities which would otherwise
be registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated first among all of such Holders, in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If, after such Holders participate to the full extent they desire in
such registration and underwriting, the underwriters determine that additional
shares of Registrable Securities may be included, the number of such shares
shall be allocated as the Company determines. If any Holder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. Any Registrable Securities excluded
or withdrawn from such underwriting shall be withdrawn from such registration.
4. Form S-3. After the Company has qualified as a registrant whose
securities may be sold pursuant to Form S-3, it shall upon the request of any
Holder notify such Holder that it so qualifies. After the Company has qualified
for the use of Form S-3, Holders of not less than one percent (1%) of
Registrable Securities shall have the right to request unlimited registrations
on Form S-3 (such requests shall be in writing and shall state the number of
shares of Registrable Securities to be disposed of and the intended method of
disposition of Shares by such Holders), subject only to the following:
(a) The Company shall not be required to effect a registration
pursuant to this Section 4 within 180 days of the effective date of any
registration referred to in Sections 2 and/or 3 above.
(b) The Company shall not be required to effect a registration
pursuant to this Section 4 unless the Holder or Holders requesting registration
propose to dispose of shares of Registrable Securities having an aggregate
disposition price (before deduction of underwriting discounts and expenses of
sale) of at least $200,000.
(c) The Company shall not be required to effect more than two
registrations pursuant to this Section 4 in any consecutive 12 month period.
The Company shall promptly give written notice to all Holders of
Registrable Securities of the receipt of a request for registration pursuant to
this Section 4 and shall provide a reasonable opportunity for other Holders to
participate in the registration, provided that if the registration is for an
underwritten offering, the terms of subsection 2(b) shall apply to all
participants in such offering.
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<PAGE>
Subject to the foregoing, the Company will use its best efforts to effect
promptly the registration of all shares of Registrable Securities on Form S-3 to
the extent requested by the Holder or Holders thereof for purposes of
disposition. Any registration pursuant to this Section 4 shall not be counted as
a registration pursuant to Section 2.
5. Expenses of Registration. All expenses incurred in connection with
any registration, qualification or compliance pursuant to this Agreement,
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Company except as follows:
(a) The Company shall not be required to pay for expenses of
any registration proceeding begun pursuant to Section 2, the request for which
has been subsequently withdrawn by the Initiating Holders, in which such case,
such expenses shall be borne by the Holders requesting such withdrawal;
provided, however, that if at the time of such withdrawal (i) the Holders have
learned of a material adverse change in the condition, business or prospects of
the Company from that known to the Holders at the time of their request, and
(ii) the Company knew or had reason to know of the likelihood of such material
adverse change at the time of their request and did not inform the Holders
thereof, then the Company shall be required to pay such expenses and the Holders
shall retain their rights pursuant to Section 2.
(b) The Company shall not be required to pay underwriters'
fees, discounts or commissions relating to the Registrable Securities or the
fees of legal counsel of a Holder.
6. Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
(a) Keep such registration, qualification or compliance
pursuant to Sections 2, 3 or 4 effective for a period of 120 days or until the
Holder or Holders have completed the distribution described in the registration
statement relating thereto, whichever first occurs; and
(b) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them; and
(c) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
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<PAGE>
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(d) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities are not being sold
through under writers, on the date that the registration statement with respect
to such securities becomes effective, (i) a copy of an opinion, dated such date,
of the counsel representing the Company for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a copy of a
letter dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any.
7. Indemnification.
(a) The Company will indemnify and hold harmless each Holder
of Registrable Securities, each of its officers, directors and partners, and
each person controlling such Holder, with respect to which such registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any preliminary or final prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation or alleged violation by the Company
relating to action or inaction required of the Company in connection with any
rule or regulation promulgated under the Securities Act or any state securities
law applicable to the Company and will reimburse each such Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, for any
reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by an instrument duly executed by such Holder or
underwriter specifically for use therein, and provided further that the
agreement of the Company to indemnify any underwriter and any person who
controls such underwriter contained herein with respect to any such preliminary
prospectus shall not inure to the benefit of any underwriter, from whom the
person asserting any such claim, loss, damage, liability or action purchased the
stock which is the subject thereof, if at or prior to the written confirmation
of the sale of such stock, a copy of the prospectus (or the prospectus as
amended or supplemented) was not sent or delivered to such person, excluding the
documents
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<PAGE>
incorporated therein by reference, and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
prospectus (or the prospectus as amended or supplemented).
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify and hold
harmless the Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company within the meaning of the Securities Act, and
each other such Holder, each of its officers, directors and partners and each
person controlling such Holder, against all claims, losses, expenses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any preliminary or final prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder
specifically for use therein, and provided further that the agreement of the
Holder to indemnify any underwriter and any person who controls such underwriter
contained herein with respect to any such preliminary prospectus shall not inure
to the benefit of any underwriter, from whom the person asserting any such
claim, loss, damage, liability or action purchased the stock which is the
subject thereof, if at or prior to the written confirmation of the sale of such
stock, a copy of the prospectus (or the prospectus as amended or supplemented)
was not sent or delivered to such person, excluding the documents incorporated
therein by reference, and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the prospectus (or the
prospectus as amended or supplemented); provided, however, that in no event
shall the indemnification provided by any Holder hereunder exceed the gross
proceeds received by such Holder for the sale of such Holder's securities
pursuant to such registration.
(c) Each party entitled to indemnification under this Section
7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. The
Indemnified Party shall promptly permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably be withheld). The Indemnified Party may participate in such
defense and hire counsel at such party's own expense. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder,
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<PAGE>
unless such failure is materially prejudicial to an Indemnifying Party's ability
to defend such action. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of the Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Any Indemnified Party shall cooperate with the Indemnifying Party in
the defense of any claim or litigation brought against such Indemnified Party.
8. Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
9. Termination of Registration Rights. The right of any Holder to
request registration or inclusion in any registration pursuant to this Agreement
shall terminate when such Holder may immediately sell his Registrable Securities
under Rule 144 during any 90-day period.
10. Transfer of Registration Rights. A Holder's rights under Sections
2, 3, and 4 may be assigned by any Holder to a transferee or assignee of the
Registrable Securities not sold to the public, or a transferee or assignee of
any shares of its Registrable Securities not sold to the public that is a
partner or affiliate of such Holder, provided, that the Company is given written
notice by the Holder at the time of or within thirty (30) days after said
transfer, stating the name and address of said trans feree or assignee and
identifying the securities with respect to which such registration rights are
being assigned. No such transfer or assignment shall be effective until such
transferee or assignee agrees in writing to become subject to the obligations of
the transferring Holder hereunder.
11. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities, enter
into any agreement with any holder or perspective holder of any securities of
the Company which would allow such holder or prospective holder to include such
securities in any registration filed under Section 2 or 3 hereof, unless under
the terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of his
or its securities will not reduce the amount of the Registrable Securities of
the Holders which is included.
12. Miscellaneous.
(a) Any term of this Agreement may be amended and the
observance of any such term may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Company and Holders holding at least a majority of the outstanding
Registrable Securities. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon the parties hereto and their successors and
assigns.
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<PAGE>
(b) This Agreement shall be governed in all respects by the
laws of the State of California, without regard to their conflicts of laws
provisions.
(c) This Agreement constitutes the full and entire
understanding and agreement between the parties with respect to the subject
hereof and it supersedes, merges, and renders void any and all prior
understandings and/or agreements, written or oral, with respect to such subject
matter.
(d) All notices and other communications required or permitted
hereunder shall be in writing and shall be personally delivered, mailed by
certified or registered mail, postage prepaid, or delivered by overnight
delivery or express courier, addressed to the Holder's address set forth herein
or, if to the Company, at the following address:
Xiox Corporation
577 Airport Boulevard
Suite 700
Burlingame, CA 94010
Attn: President
or at such other address as the Company or any Holder shall hereafter furnish in
writing. All notices that are mailed shall be deemed delivered five (5) days
after deposit in the United States mail.
(e) In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XIOX CORPORATION
By: MELANIE D. REID
-----------------------------
Title: VP of Finance/CFO
-----------------------------
INVESTORS:
EDMUND AND MARY SHEA REAL PROPERTY
TRUST TR DTD 10-3-85
By:
-----------------------------------
Title:
--------------------------------
DANIEL F. SULLIVAN
By:
-----------------------------------
Title:
--------------------------------
MICHAEL F. GREENE
By:
-----------------------------------
Title:
--------------------------------
DARRELL L. KRULCE
By:
-----------------------------------
Title:
--------------------------------
ATAM LALCHANDANI
By:
-----------------------------------
Title:
--------------------------------
ANTHONY DIIULIO
By:
-----------------------------------
Title:
--------------------------------
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