UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
F O R M 10-KSB
(Mark One)
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
(Fee Required)
For the fiscal year ended DECEMBER 31, 1995;
or
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
(No Fee Required)
For the transition period from to
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Commission file #0-15797
XIOX CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 953824750
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(State or other jurisdiction of I.R.S. Employer incorporation
or organization) or Identification Number)
577 Airport Boulevard, Suite #700
Burlingame, California 94010
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (415) 375-8188
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value NASDAQ
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(Title of Each Class) Name of Each Exchange
on Which Registered
Check whether the issuer: (l) has filed all reports required to be filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days Yes X , No
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ____
Issuer's revenues for its most recent fiscal year. $6,753,168
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Exhibit Index on page 24
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The aggregate market value of the voting stock held by non-affiliates as of
March 1, 1996 was approximately $ 1,236,026 (based upon the closing bid price of
$2.25 for shares of the Registrants Common Stock as reported by the National
Association of Securities Dealers Quotations Listing on that date). As of March
1, 1996 the total number of shares of common stock of the Registrant outstanding
was 2,372,384.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into the parts of Form
10-KSB indicated: (1) Xiox Annual Report to Stockholders for the year ended
December 31, 1995 for Part II; (2) Proxy Statement dated April 17, 1996 for
Annual Meeting to be held May 22, 1996 for Part III.
The Business section and other parts of this Report contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those discussed in the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors Affecting
Operating Results and Market Price of Stock."
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
A. THE COMPANY
Xiox Corporation was incorporated in California in September, 1982 and became a
publicly held company in February, 1986. On June 16, 1987, the Company changed
its state of incorporation from California to Delaware.
In October, 1995, the Company sold certain assets of Gemini Telemanagement
Systems, Inc. ("GTS"), a wholly-owned subsidiary, to GTS's former management.
Xiox Corporation designs, develops, manufactures and markets telecommunications
management software and hardware systems which operate on personal computers,
minicomputers, local area networks and stand-alone proprietary hardware. The
Company's systems efficiently provide information to facilitate telephone
expense control; client, department or project billback; and call traffic
monitoring. In addition, the Company markets a complete family of telephone and
network security products.
Since the Company's incorporation, its product line has expanded from a single
software system to a full range of Telecommunication Management Systems, each of
which has been designed to address the needs of small or large businesses in
many different industries. In addition to its software and hardware-based
systems, the Company also provides call costing rate tables and system
enhancements to end users under subscription arrangements.
The Company markets its systems with it's own sales force, through dealers who
include subsidiaries of the Regional Bell Operating Companies (RBOC's), and
through Original Equipment Manufacturers (OEM's). The agreements with the RBOC's
and many other dealers do not include any commitment by such dealers to purchase
a minimum number of systems.
DEVELOPMENTS DURING 1995
In March, 1995 the Company signed a Co-Marketing Agreement with Nortel
Communications Systems ("Nortel"). The agreement calls for Nortel to sell the
Xiox Fort Knox family of products under the Meridian Safe product family. Nortel
manufactures and distributes switches to over 200 distributors including all the
RBOC's and GTE. The agreement does not require Nortel to take a minimum number
of units. The agreement may be cancelled by either party with notice.
In July, 1995 the Company began shipping the full production release of its GBS
for Windows product. The GBS for Windows product is the first Telemanagement
product to be "self-installable". Through proprietary software developed by
Xiox, for which it has applied for a patent, the end user loads the software
onto a PC and the application configures the appropriate interfaces and
electronically downloads the rate tables.
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In November, 1995 the Company introduced Summa Voice, a voice mail product
specifically focused on the 50 to 250-room hotel market. The product is sold
through distributors. The product is designed to reduce the installation time
normally involved in voice mail installations.
B. PRODUCTS
Xiox products are comprised of four product categories: Call Accounting, Traffic
Engineering, Facilities Management, and PBX security systems. Often these
categories are combined into an integrated package called Telecommunications
Management System (TMS). These products are provided on several platforms:
proprietary stand-alone hardware, personal computers, Local Area Networks or as
a Service Bureau offering. The Company has implemented TMS for clients as a
managed outsourcing project when customers are looking for an alternative to
running call accounting themselves.
TMS or Telemanagement products can be used in most industries. The primary
benefits customers look for in implementing a telemanagement system are a
decrease in communications costs through reductions in the number of minutes of
telephone time utilized and a reduction in the cost per minute of
telecommunication usage.
Call Accounting Software
Call Accounting software is used to collect data on telephone calls, generally
from the PBX, and to price these calls by applying interexchange and local
exchange carrier tariffs to them. The rated calls are placed into a database,
and can be sorted, summed and printed in a variety of report formats. Savings
generated by implementing a call accounting system range between 10-40% of the
total number of minutes used each month compared to telecommunication networks
not using a call accounting system. Call Accounting generates savings by
allowing a company to use its telecommunications network more efficiently by
reducing its minutes of usage. If each employee were to reduce phone usage by
five minutes per day, the direct savings for 100 employees at $0.12 per minute
cost would save $15,000 per year.
Call Accounting software systems and related subscription services are designed
to be utilized in connection with the user's computerized telephone system and
personal computer or local area network. The Company does not manufacture the
computers and provides them only upon customer request.
The Company's Call Accounting systems do not require additional expansion boards
to be inserted into the computer. Nor does an end user's computer need to be
dedicated to perform only call accounting functions. Through the use of external
call record storage devices, the computer can be freed for other tasks,
programs, maintenance and repair. These external call storage devices are built
to Xiox's specifications, and are sold by Xiox through its direct sales force
and indirect channels of distribution as part of an integrated system.
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The software is also used by professional and legal firms to pass on, usually
with a mark-up, telephone expenses incurred on behalf of clients. Hotels,
university campuses, hospitals, and shared tenant organizations use the software
to charge guests, students, faculty, patients, and tenants for their telephone
usage.
GBS for Windows(TM) was designed for ease of use. All of the Xiox tools and
reports are accessible with point and click functionality, including macros for
viewing information in colorful graphical formats; Intelligent Configuration(TM)
(patent applied for) for automatic and simple installation; scheduled polling,
processing and reporting; icon management of multiple sites, and rate table
updates at a click of a button.
By utilizing these tools, a Xiox GBS for Windows(TM) user can install, run, and
make high impact graphical presentations within hours. In comparison, DOS-base
and other non-Windows competitive packages can take up to several days to
install, configure, and train with additional time needed to prepare the first
graph. Xiox GBS for Windows(TM) is built upon its predecessor GBS product's
reputation for accuracy, flexibility, and quality of support. Systems are
configured on up to 30,000 extensions.
The Xiox General Business Software Plus (GBP) product line is designed to
operate on Local Area Networks or on a Personal Computer. Systems are configured
to report on up to 30,000 Telephone Extensions and can process an unlimited
number of Call Records.
A menu of standard reports provides selections from a library of up to 126
different detail and summary report topics, or from one of 324 available custom
reports. A pre-select feature allows users to retrieve small, manageable files
quickly from large databases in order to facilitate generation of any of the
systems reports. The flexibility of this table-driven interface provides the
ability to pinpoint call exceptions and offer ad hoc reporting.
Customers may choose from five separate Rate Table products to match their
common carrier rate options for accurate call rating. Specialized carrier
arrangements like SDN's, VPN's, and Tariff 12 offerings can also be integrated.
When coupled with Xiox's table driven interface for Dialing Recognition
Templates and Call Processing Rules, the 99.5% or greater accuracy in matching
actual rates provides increased customer use of the information as a management
tool and subsequently greater savings.
Customers with more than one location may elect to establish a central (host)
site that will poll remote sites over telephone lines or through Wide Area
Networks (WANS). Xiox Central Polling Software works in conjunction with
pollable call storage buffers to create a networked telemanagement system. Since
Xiox systems operate on Local Area Networks, customers may use existing
LAN-to-LAN connectivity to poll data.
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Call Accounting Hardware
The Prophet Series, the Company's hardware-based Call Accounting Systems, are
microprocessor based stand-alone systems. Available with both general business
and lodging firmware, the Prophet systems come in a range of sizes. Call
storage, call processing, and call rating are all performed within the firmware
of the device. An external keypad is available to allow one-button report
generation. Reports may also be generated via a touch-tone telephone. This
series is aimed at the lower-cost end user market and is sold through Xiox's
distribution channels.
An enhancement to the product includes the Prophet Writer software. When
downloaded to a customer-provided PC, call records may be stored to the PC hard
disk. Prophet Writer software greatly enhances the reporting capabilities of the
Prophet system. Also, a polling option allows data from multiple remote Prophet
devices to be collected at a central site.
Traffic Engineering for Windows Software
The Xiox Traffic Engineering for Windows Software (XTES) is a management tool
used to reduce the cost per minute of telecommunications expenses. This is
accomplished by analyzing the same call data used in call accounting, by
analyzing trunk utilization, and by identifying problems with Automatic Route
Selection (also called Least Call Routing) programs in the PBX.
The product greatly simplifies the "Traffic Engineering" function. The "Alerts
and Suggestions" report identifies actions that should be taken to reduce costs
or eliminate blockage.
The Xiox Traffic Engineering Software works in conjunction with the Xiox Call
Accounting Software databases or as a separate application to reduce the user's
cost per minute. The software and resulting improvements to automatic route
selection implementation can reduce most company's cost per minute by over 10%.
Facilities Management Software
The XIOX Facilities Management (XFMS) is a software system that automates record
keeping for voice and data facilities. XFMS provides financial and operational
control by integrating service order processing, equipment inventory management,
cost allocation, trouble management and directory and cable record management
into a powerful database management system.
XFMS enables a user to integrate interrelated tasks with a minimum number of
entries. The system is also used to manage expenses, and can be used in
conjunction with call accounting to provide a consolidated extension report of
all telephony-related expenses incurred by a user or tenant over a specific time
period.
Companies are becoming increasingly aware of this type of product and the
benefits it provides in managing a complex telecommunications installation.
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Fort Knox (R) PBX Security Products
PBX toll fraud costs U. S. businesses billions of dollars each year in lost
resources. Theft of a company's long distance service by criminals erodes
profits and costs the victims additional losses in personnel time, litigation
and problem resolution. In addition to these costs, victims of toll fraud risk
the security of sensitive information conveyed either by telephone or data
networks.
The Company's Fort Knox (R) Family of products provide protection against toll
fraud and other illicit entry to the corporate telecommunications network. The
Fort Knox products can be used singly to protect specific hacker entry points or
in combination to provide protection to the telecommunications network.
The Xiox Hacker Preventer(TM) (XHP) utilizes artificial intelligence and voice
energy analysis to separate hackers from legitimate users. The XHP protects an
entire telecommunications system, while allowing authorized users full use of
all of the system's money saving features. These standard PBX features such as
Direct Inward Dial Access (DISA) are usually disabled to thwart hackers; the XHP
restores the functionality of the PBX back to the users as well as provides
secure access to voicemail and other internal communication destinations.
The Xiox Hacker Deadbolt (R) (XHDB) provides protection for the remote
maintenance and testing ports of the PBX system, Voice Mail systems, and other
customer premises equipment. The XHDB can be purchased as a stand-alone unit or
as an integrated component of the Xiox Hacker Preventer(TM).
The Xiox Hacker Tracker (R) (XHT) is a cost-effective, dedicated software
package that reports on PBX traffic in a similar fashion to call accounting. The
XHT comes pre-configured with the most useful reports for tracking and trapping
illicit hackers. The XHT includes complete, easy to follow software
documentation, and allows a customer to silently monitor system usage and
traffic to potential fraudulent destinations.
XIOX HOSPITALITY INDUSTRY PRODUCT APPLICATIONS
Summa Voice is a voice mail product specifically engineered for 50 to 250-room
hotels. This product enables these properties to offer their guests voice mail
services that are easy to install, operate and use. With a voice mail product
hotels are able to provide accurate, timely and confidential message-taking
service for their guests, thereby improving guest satisfaction. The product also
reduces the amount of time that hotel staff spend writing messages. This
increases the amount of time available for personal service to guests which in
turn improves guest satisfaction.
Xiox Lodging Software is specifically designed for hotels, motels, hospitals and
nursing homes. It immediately prices calls and produces a call receipt which is
posted to the guest's or patient's folio. If the business has a computerized
property management system, the call accounting system prices and processes call
records and communicates them to the property management system for
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automatic integration into a guest's records. Depending upon the specific model,
the number of supported telephone extensions can range up to 6,000 extensions.
Xiox Summa Prophet Lodging Hardware Series can post to the hotel's property
management system, or can provide easy to use guest billback capability for
properties without a Property Management System (PMS). The Lodging system stores
1,000 call records, and is available in two models: the H-3, which manages up to
300 extensions, and the H-10, which manages up to 10,000 extensions.
Both Lodging systems interface with almost all available Property Management
Systems and produce daily and monthly profit reports.
Xiox Summa Pro is a stand-alone call accounting system designed for budget and
economy hotels with up to 500 extensions and provides a call storage capacity of
14,000 call records. The product is compliant with the new North American
Numbering Plan (NANP) changes and allows smaller properties to afford the
revenue-producing benefits of call accounting systems such as accurate tracking
and billing of guest calls. It features smart, easy-to-use commands that allow
any property manager or front desk employee to learn to operate without lengthy
training, and includes one-touch reporting and credit limit with alarm.
The Xiox Summa Pro offers quick buttons for one-step processing of guest
checkout, night audit procedures, credit limit and current call reports.
Additionally, it features an array of system alarms including 911, accurate
tracking and billing of guest calls with separate billing for administrative
extensions and a four line display with easy prompting and descriptive problem
identification. The compact physical size of the Xiox Summa Pro is designed for
the limited space in a front desk environment. The microprocessor,
touch-response keypad and LCD are internal within the hardware with no external
parts required.
The Xiox Summa Call Detection Unit (SCD) is a hardware system offered to lodging
properties to help accurately bill customers and often increase revenue. With a
288-trunk capacity, the SCD can interface with most PBX's and supports direct
T-1 connection. This stand-alone unit provides diagnostics for remote trunk
troubleshooting and alarms for hardware or software failure. Detailed reporting
enables tracking of Answered Calls, Unanswered Calls and Recovered Revenue.
In the lodging industry, a 45-second grace period is usually used to determine
if a call is completed. Guests are charged all calls over this threshold,
including calls to invalid numbers or numbers where no one answered. Shorter
calls, even those completed within 45 seconds, are not charged to the guest.
The SCD tags call records as having an actual answer instead of relying upon a
predetermined time period to presume actual call completion. This definite
tagging allows the typical lodging customer to charge for short calls that would
not have been charged prior to the installation. The average customer's
telephone related revenues are estimated to increase using this device.
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Although hotels have used call accounting to bill guests for some time, these
systems have been unable to determine if calls were actually completed. Lost
revenues from undetected, yet completed calls under the 45-second threshold
result in lost revenue, as well as unrecovered expense. Furthermore, guest
complaints about billed calls not completed have been a problem for hotels,
motels and resorts.
PRODUCT SUPPORT AND SUBSCRIPTION SERVICES
The Company obtains and resells third-party hardware, primarily external
buffers. In addition, the Company charges its customers and its dealers in
certain cases for system installation and training and travel costs associated
with familiarizing customers with the Company's systems.
The Company renews Product Support subscriptions for its customers on an annual
basis. Renewal of Product Support entitles a client to unlimited access to the
Product Support Center. It also entitles the customer to receive any product
enhancements or "bug fixes" throughout that year.
The Company provides end users with call costing rate tables under annual
subscriptions. These rate tables provide the end user with current telephone
tariffs to generate accurate call rating. The Company offers several rate table
options, based on the complexity of the customer's telecommunications
environment. The Company also offers enhancements to and support of its systems
after the first year of use.
C. SALES AND MARKETING
The Company markets its systems to end users primarily through its network of
authorized dealers. The Company sells to over 130 dealers with 45 locations
including three of the RBOC's, (Nortel Communications Systems, US West
Information Systems, and Bellsouth Communications Systems) and several
independent business telephone dealers. Most of the Company's dealer agreements
do not include commitments by such dealers to purchase a minimum number of
systems and typically may be canceled at any time with 30 days prior written
notice.
During each of the years ended December 31, 1995, 1994, and 1993 the Company's
export sales were less than 2% of total sales.
The Company's marketing approach varies depending upon the type of system. A
description of each of these approaches is set forth below:
Xiox General Business Software, Xiox Call Analyzer, Xiox GBS for Windows, Xiox
Traffic Engineering Software, Xiox Facilities Management Software and Fort Knox
(R) Security Products
These systems are typically marketed to large corporations primarily through the
Company's direct sales force, RBOC's or business telephone dealers. In order for
dealers to effectively establish and support their customer base, the Company
must commit technical and sales personnel to training dealers with respect to
installation and application support.
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Xiox Lodging Software ,Telephone Call Detection Devices, Summa Prophet H, Summa
Pro, and Summa Voice.
These products known as the Summa Suite family of products are targeted to both
independent and chain-affiliated properties in the lodging industry. Marketing
of Xiox Lodging Software is through the direct sales force, value-added dealers
specializing in Lodging, and OEM's with Lodging specific systems.
Xiox Prophet Call Accounting Systems. These hardware devices are marketed
exclusively through the Company's distributors and original equipment
manufacturers.
D. REVENUE PATTERNS
The Company's operating history has indicated a sales pattern reflective of both
the telecommunication and computer industries with sales generally weaker in the
first quarter of each calendar year than the last quarter of the previous year.
E. INDUSTRY AND COMPETITION
The telecommunications management systems industry has been characterized by
intense competition and rapid technological and marketing changes. Decisions of
the FCC and the divestiture by AT&T of the RBOC's significantly altered the
marketing and distribution of telecommunications equipment and systems. The
principal competitive factors in the market for telephone management and call
accounting software systems are customer service, dealer coverage, name
recognition, product performance, price and flexibility of product design. Many
of Xiox's competitors have significantly greater financial, marketing and
technical resources.
The actions of these companies may have a material adverse effect on the
Company. In order for Xiox to remain competitive, it must rapidly respond to
such changes, including the enhancement and upgrading of existing products and
the introduction of new products. There can be no assurance that the Company
will be able to respond to such changes.
Original Equipment Manufacturers. Currently, the Xiox products compete with
systems offered by manufacturers of computerized telephone systems. The Company
competes with these companies on the basis that its products operate on standard
personal computers and are typically offered at lower prices since these
competitive products require a significant hardware investment.
Independent Hardware and Software Developers. Xiox also competes directly or
through dealers with numerous independent hardware and software developers.
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The Company believes it effectively competes with other companies on the basis
of price, performance and more sophisticated features. However, because the
market in which the Company competes is intensely competitive, there can be no
assurance that the Company will remain competitive in respect to some or all of
these factors.
No single customer or dealer accounted for 10% or more of total revenues during
the years of 1995, 1994 and 1993.
F. PRODUCT DEVELOPMENT
Xiox is committed to the development of new products and to the continued
enhancement of its existing products. The GBS for Windows Call Accounting
Software products began general production in July 1995. During 1995 and 1994,
research and development expenses were $1,130,795 and $1,018,004, respectively.
The 1995 figures reflect R&D efforts towards further development of Windows
versions of the Company's call accounting products and the stand-alone Summa Pro
call accounting system.
G. PATENTS, COPYRIGHTS, TRADEMARKS AND LICENSES
The Company has filed for copyrights on its computer programs and algorithms.
The Company has filed or received trademark protection for its service marks
under its Fort Knox (R) Family of products including Hacker Tracker(R), Hacker
Preventer(TM), Hacker Deadbolt(R), and Hacker Stopper (R). The Company applied
for a patent on its intelligent configuration and remote rate table delivery
system as well as its technology in the Xiox Hacker Preventer(TM).
H. PRODUCTION AND BACKLOG
The Company produces its products from a library of master diskettes upon
receipt of firm orders. Software orders are usually placed on an as needed
basis, and are shipped by the Company shortly after receipt of an order. As a
result, the Company does not have a substantial backlog, and the Company's
backlog at any particular time is generally not indicative of its future level
of sales. The Company's hardware products are manufactured to Xiox
specifications by outside suppliers. These products are also available from
alternate domestic suppliers. The company defers substantial revenue from annual
subscriptions for its annual rate table and maintenance and support agreement
subscriptions. This deferred revenue is amortized over the life of the
subscription.
I. EMPLOYEES
The Company had 53 full-time employees as of December 31, 1995. The Company is
not a party to any collective bargaining agreement and considers its
relationship with its employees to be satisfactory. In August, 1995, the Company
reduced full-time headcount by 20 employees as a reduction in force.
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J. INDUSTRY SEGMENT
The Company operates in a single industry segment and information regarding the
Company's revenue, operating profit or loss and identifiable assets are set
forth in the Company's financial statements (see Item 7).
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ITEM 2. DESCRIPTION OF PROPERTY
Xiox leases approximately 13,168 square feet of office space at 577 Airport
Boulevard, Suite 700, Burlingame, California, 4,330 square feet of which is
subleased. The lease expires in July 2000. In addition, Xiox leases 8,205 square
feet of multi-use space at 150 Dow Court, Manchester, N. H. under a five-year
lease expiring in December, 1997. Xiox also leased 2,915 square feet of
multi-use space at 5025 South Ash Boulevard, Tempe, Arizona under a two-year
lease which expired in December 1995. Xiox relocated in January, 1996 to a
734-square foot facility at 600 E. Baseline, Suite B2, Tempe, Arizona under a
one-year lease which expires January 1, 1997.
ITEM 3. LEGAL PROCEEDINGS
The Company is engaged in the following legal actions:
On July 25, 1994, the Company filed a complaint in the Alameda County
(California) Superior Court seeking to recover software, hardware and
intellectual property which it contends Melvin Hale, a former employee and
independent contractor for the Company had misappropriated. Hale filed a
cross-complaint against the Company on September 2, 1994, in which he alleges
that the Company is liable for damages for breach of contract and fraud in
connection with Hale's work for the Company.
At the beginning of the case, the Company obtained a preliminary
injunction against Hale ordering him to return all of the Company's property and
prohibiting him from using the Company's trade secrets or confidential
information. The parties have recently agreed in principle to a settlement of
all claims between them. Under the settlement the Company will retain title to
all intellectual property which Hale helped develop while an employee or
independent contractor of the Company or in which he claims an ownership
interest. Hale will agree not to use any of the Company's trade secrets or
confidential information and neither side will pay any money to the other. A
settlement agreement and mutual release of claims is currently being prepared.
On October 18, 1994, CHI/COR Information Management, Inc., an Illinois
Corporation ("CHI/COR") with whom Mr. Hale was formerly employed, filed an
action in the Chancery Division of the Circuit Court of Cook county, Illinois
against the Company, one of CHI/COR's former employees Melvin Hale and Intra
Network Services. CHI/COR claimed that Hale, while in CHI/COR's employ,
developed a certain computer program which he took with him upon his departure
and sold to the Company which, CHI/COR alleged, in turn was sold to the public.
CHI/COR made claims of misappropriation of trade secret computer software in
violation of Illinois law. The Company successfully moved to dismiss CHI/COR's
claims on the grounds of lack of jurisdiction. The plaintiff, however, was given
leave to replead in an attempt to establish jurisdiction. At that time, the
case was resolved by settlement for an amount less than
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$11,000 which the Company had accrued as of December 31, 1995. The case was
dismissed pursuant to settlement on March 13, 1996.
The Company is not a party to any other litigation, the adverse outcome of
which, in management's opinion, would have a material effect upon the Company's
financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not have any submissions of matters to a vote of security
holders during the fourth quarter of 1995.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
This information is set forth under the caption "Stock Trading Information" on
page 16 of the Company's 1995 Annual Report to Stockholders (the "Annual
Report"), and is hereby incorporated by reference.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This information is set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 2 and 3 of
the Annual Report, and such information is hereby incorporated by reference.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements of the Company and the auditors' report
appearing on pages 4 through 15 of the Annual Report are hereby incorporated
herein by reference.
o Consolidated Balance Sheets as of December 31, 1995 and 1994
o Consolidated Statements of Operations for the years ended
December 31,1995 and 1994
o Consolidated Statements of Cash Flows for the years ended
December 31,1995 and 1994
o Consolidated Statements of Stockholders' Equity for the years ended
December 31,1995 and 1994
o Notes to Consolidated Financial Statements
o Report of Independent Auditors
The Company's 1995 Annual Report, except for those portions which are expressly
incorporated by reference in this filing, is furnished for the information of
the Securities and Exchange Commission and is not to be deemed as filed as part
of this Report on Form 10-KSB.
ITEM 8. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information contained in Xiox's Proxy Statement dated April 17, 1996 for its
1995 Annual Meeting of Stockholders under the captions "Nominees" and "Business
Experience of Directors" and "Executive Officers" is hereby incorporated by
reference.
ITEM 10. EXECUTIVE COMPENSATION
Information contained in Xiox's Proxy Statement dated April 17, 1996 for its
1995 Annual Meeting of Stockholders under the caption "Executive Compensation"
is hereby incorporated by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information contained in Xiox's Proxy Statement dated April 17, 1996 for its
1995 Annual Meeting of Stockholders under the captions "Principal Stockholders"
and "Security Ownership of Management" is hereby incorporated by reference.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information contained in Xiox's Proxy Statement dated April 17, 1996 for its
1995 Annual Meeting of Stockholders under the caption "Certain Relationships and
Related Transactions" is hereby incorporated by reference.
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ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
A. Documents filed as part of this report:
l. Financial Statements:
The following financial statements of Xiox Corporation are included in Part
II, Item 7 of this Report on Form 10-KSB and are hereby incorporated by
reference from its 1995 Annual Report to Stockholders, filed as Exhibit
13.l to this Report on Form 10-KSB.
Page(s) in 1995
Annual Report
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Report of Independent Auditors 15
Consolidated Balance Sheets as of 4
December 31, 1995 and 1994
Consolidated Statements of Operations 5
for the years ended December 31, 1995 and 1994
Consolidated Statements of Cash Flows 6-7
for the years ended December 31, 1995 and 1994
Consolidated Statements of Stockholders' Equity for 7
the years ended December 31, 1995 and 1994
Notes to Consolidated Financial Statements 8-14
All other financial statements and schedules not listed above are omitted
as the information is not required or because information is presented in
the financial statements or related notes.
17
<PAGE>
2. Exhibits:
2.1 Proposed Agreement and Plan of Merger between the Company
and Xiox Corporation, a Delaware Corporation, to affect the
reincorporation of the Company in Delaware, filed as Exhibit
2.1 to the Company's Report on Form 10-K for the year ended
December 31, 1986, is hereby incorporated by reference.
3.l Certificate of Incorporation as filed with the Secretary of
State of the State of Delaware on April 7, 1987 filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1987, is hereby incorporated by
reference.
3.2 Bylaws, filed as Exhibit 3.2 to the Company's Annual Report
on Form 10-K for the year ended December 31,1987, is hereby
incorporated by reference.
4.1 Reference is made to Exhibits 3.l and 3.2.
10.02 Authorized Dealer Sales Agreement dated April 25, 1985
between Registrant and PacTel InfoSystems, filed as Exhibit
10.2 to the Registration Statement, is hereby incorporated
by reference.
10.04 Xiox Corporation Restated 1984 Stock Option Plan filed as
Exhibit 28.1 to the Company's Registration Statement on Form
S-8 (File No. 33-42433 ), filed with the SEC is hereby
incorporated by reference.
10.05 Form of Notice of Grant and Stock Option Agreement to
Restated 1984 Stock Option Plan to be used in connection
with the Plan, filed as Exhibit 28.2 to the Company's
Registration Statement on Form S-8 (file No. 33-37686) filed
with the SEC (the "S-8 Registration Statement"), is hereby
incorporated by reference.
10.06 Form of Stock Purchase Agreement generally used in
connection with the exercise of an immediately exercisable
option granted under the Restated 1984 Stock Option Plan,
filed as Exhibit 28.3 to the S-8 Registration Statement, is
hereby incorporated by reference.
10.07 Form of Automatic Option Agreement for use in connection
with Restated 1984 Option Plan, filed as Exhibit 28.4 to the
S-8 Registration Statement, is hereby incorporated by
reference.
18
<PAGE>
10.08 Form of Stock Purchase Agreement generally used in
connection with the exercise of an automatic option granted
under the 1984 Restated Option Plan, filed as Exhibit 28.5
to the S-8 Registration Statement, is hereby incorporated by
reference.
10.09 Lease Agreement between the Company and Bay Park Plaza dated
March 20, 1987, filed as Exhibit 10.12 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1987, is hereby incorporated by reference.
10.091 Amended Lease Agreement between the Company and Bay Park
Plaza dated July 28, 1994, filed as Exhibit 10.091 to the
Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995, is hereby incorporated by reference.
10.092 Sublease and Lease Agreements between the Company and
Hands-On Technology dated November 8, 1995, filed as Exhibit
10.092 to the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1995, is hereby attached as Exhibit
10.092.
10.13 Form of Director Indemnity Agreement filed as Exhibit 10.22
to the Company's Annual Report on Form 10-K for the year
ended December 31,1987, is hereby incorporated by reference.
10.14 Xiox Corporation 1994 Stock Plan, filed as Exhibit 4.1 to
the Company's Registration Statement under Form S-8 (File
No. 33-88996 ) with the SEC on February 1, 1995, is hereby
incorporated by reference.
10.15 Form Stock Option Agreement to 1994 Stock Plan to be used in
connection with the Plan, filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-8 (file No.
33-88996) filed with the SEC (the "S-8 Registration
Statement"), is hereby incorporated by reference.
10.25 Agreement for the Purchase and Sale of Stock of SFX, Inc.
(formerly Summa Four Business Products, Inc.) dated March
27,1991 filed under Form 8-K on March 27,1991 as amended on
June 7,1991, is hereby incorporated by reference.
10.26 Agreement for Business Combination by and among Xiox
Corporation and Gemini Telemanagement Systems (principal
shareholders Richard Alter, Gregory Bell and Darrell Krulce)
dated August 17, 1994, filed under Form 8-K on August 29,
1994 as amended on October 28, 1994, is hereby incorporated
by reference.
19
<PAGE>
10.27 Assets Purchase Agreement of Instor Systems Corporation
dated October 12, 1994 with Closing on December 1, 1994,
filed under Form 8-K on December 15, 1994, is hereby
incorporated by reference.
11.1 Computation of earnings per share for the two years ended
December 31, 1995 and 1994 are included in the Company's
1995 Annual Report under Notes to Consolidated Financial
Statements.
13.1 1995 Annual Report to Stockholders is hereby incorporated
by reference and attached as Exhibit 13.1.
22.1 The wholly owned subsidiaries of the Company are listed
under the caption "Principles of Consolidation" on Page 8 of
the Company's 1995 Annual Report.
23.1 Consent of Independent Auditors.
B. Reports on Form 8-K.
The following events occured in 1995 and were filed under Form 8-K or 8-K/A:
Stock Purchase and Registration Rights Agreement and required financial
statements, dated June 19, 1995, filed June 22, 1995.
Stock Purchase and Registration Rights Agreement and required financial
statements, dated July 13, 1995, filed July 13, 1995.
Stock Purchase and Registration Rights Agreement and required financial
statements, dated September 29, 1995, filed October 13, 1995. Amended
8-K/A filed January 12, 1996.
Disposition of Assets of Gemini Telemanagement Systems, dated October
14, 1995, filed October 27, 1995. Amended 8K/A filed December 22, 1995.
Stock Purchase and Registration Rights Agreement and required financial
statements, dated December 28, 1995, filed January 11, 1996.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Xiox Corporation
March 29, 1996 William H. Welling
-----------------------------------------
William H. Welling
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
March 29, 1996 William H. Welling
-------------------------------------
William H. Welling
Chairman and Chief Executive Officer
(Principal Executive Officer) and Director
March 29, 1996 Mark A. Parrish, Jr.
-------------------------------------
Mark A. Parrish, Jr.
Director
March 29, 1996 Marc Michel
-------------------------------------
Marc Michel
Director and Secretary
March 29, 1996 Bernard T. Marren
-------------------------------------
Bernard T. Marren
Director
March 29, 1996 John T. Boatwright
-------------------------------------
John T. Boatwright
Director
21
<PAGE>
SIGNATURES (CON'T)
March 29, 1996 Robert K. McAfee
-------------------------------------
Robert K. McAfee
Director
March 29, 1996 Richard Alter
-------------------------------------
Richard Alter
Director
March 29, 1996 Melanie D. Reid
-------------------------------------
Melanie D. Reid
Vice President of Finance/Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)
22
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Xiox Corporation:
We consent to incorporation by reference in the registration statements (Nos.
33- 4989, 33-16019 and 33-37686) on Form S-8 of Xiox Corporation of our report
dated February 16, 1996, relating to the consolidated balance sheets of Xiox
Corporation and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated-statements of operations, stockholders' equity, and cash flows each
for the years then ended, which report which is incorporated by reference in the
December 31, 1995, annual report on Form 10-KSB of Xiox Corporation.
KPMG Peat Marwick LLP
San Jose, California
March 28, 1996
23
<PAGE>
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBER NUMBERED PAGE
- ---------------- -----------------
10.092 Sublease and Lease Agreements between 25-30
the Company and Hands-On Technology
13.1 1995 Annual Report to Stockholders
(incorporated by reference)
24
EXHIBIT 10.092
XIOX CORPORATION 10-KSB FOR DECEMBER 31, 1995
SUBLEASE AGREEMENT
This Sublease is made on November 8 , 1995, between XIOX Corporation
("Sublessor"), whose address is 577 Airport Blvd., Suite 700, Burlingame, CA
94010, and Hands-On Technology (Sublessee"), whose address is 577 Airport Blvd.,
Suite 450, Burlingame, CA 94010, and Bay Park Plaza Associates, L.P.
("Landlord").
Recitals. This Sublease is made with reference to the following facts and
objective:
a. Sublessor entered into that certain office lease dated March 20, 1986 and
amended on October 24, 1990 and May 31, 1994 ("Master Lease") with Bay Park
Plaza Associates, L.P., ("Landlord") for certain premises consisting of
approximately 13,168 square feet ("original premises") commonly known as 577
Airport Blvd., Suite 700 Burlingame, CA 94010, as more particularly described in
the Master Lease. A copy of the Master Lease is attached hereto as Exhibit A and
made a part hereof.
b. Sublessor (XIOX Corporation) desires to sublease to Sublessee ( Hands-On
Technology) and Sublessee desires to sublease from Sublessor a portion of the
original premises now called "Premises" as defined in Section 1. below under the
terms and conditions set forth herein.
Now, therefore, Sublessor and Sublessee agree as follows:
1. Premises: Sublessor leases to Sublessee and Sublessee from said Sublessor the
following described premises together with the appurtenances, situated in the
City of Burlingame, County of San Mateo, State of California commonly known as
Bay Park Plaza Office Building consisting of approximately 4,339 square feet on
the seventh floor, Suite 700 as more particularly set forth in Exhibit C
("Premises"). Sublessee shall take Premises in an "As-is" excepting normal wear
and tear, broom clean, professional appearing condition. Sublessor makes no
representations or warranties of any kind with respect to the improvements, or
physical conditions on, or bearing on, the use of the Premises. Sublessee shall
rely solely on Sublessee's own inspection and examination of such items and not
on any representations of Sublessor, whether expressed or implied. Landlord
shall consent to this Sublease by its execution hereof. This Sublease shall take
effect on November 15, 1995, and Sublessor shall give possession of the Premises
to Sublessee on that date. In the event that Landlord fails to execute this
Sublease as evidence of its consent, this Sublease shall be of no force and
effect and neither party shall have any obligation to each other.
Sublessee further agrees to return the premises to the Sublessor in the same
condition as Sublessee took possession of Premises including but not limited to
any modifications to cabling, wiring, network configurations, and other areas
within the Premises. Any such modifications by Sublessee must have the prior
written approval of Sublessor and Landlord.
2. Rental: Sublessee shall pay to Sublessor without deduction, off set, prior
notice or demand, as rental the sum of $1.50 per rentable square foot per month
for the Premises defined in paragraph 1 upon commencement of sublease on
November 15, 1995 through July 31, 1996. As of August 1, 1996 through November
14, 1996, Tenant shall pay $1.585 per rentable square foot per month for the
Premises defined in paragraph 1. Rent shall be paid on the fifteenth (15th) day
of each month in lawful money of the United States of America, commencing on the
15th day of November, 1995, and continuing throughout the balance of the term.
Monthly rental for any particular month shall be prorated at the rate of 1/30th
of the monthly rental per day. Rent shall be paid in currency of the United
Stated of America to Sublessor at 577 Airport Blvd., Suite 700, Burlingame, CA
94010 or at such other place or places as Sublessor may from time to time
direct.
3. Operating Expenses: Sublessee shall pay to Sublessor Sublessee's prorata
share of Sublessor's operating expense increases as defined in Section 8 of the
Master Lease. Such expenses will be separately billed to Sublessee by Sublessor.
25
SUBLEASE AGREEMENT, XIOX CORPORATION AND HANDS-ON TECHNOLOGY
<PAGE>
4. Prepaid Rent: Security Deposit: Receipt of $6,508.50 is hereby acknowledged
for rental for the first month, and the additional amount of $6,508.50 as
security deposit for the faithful performance of this Sublease as a security
deposit. In the event Sublessee has performed all of the terms and conditions of
this Sublease throughout the term, upon Sublessee vacating the Premises, the
amount paid shall be returned to Sublessee after first deducting any sums owing
to Sublessor.
5. Term: The term of this Sublease shall be for a period of twelve (12) months
commencing on the 15th day of November, 1995 and ending on the 14th day of
November, 1996.
6. Use: Sublessee shall use the Premises for general office purposes and for no
other purpose. No shipping or receiving function shall be allowed.
Sublessee's business shall be established and conducted throughout the term
hereof in a first class manner. Sublessee shall not use the Premises for, or
carry on, or permit to be carried on, any offensive, noisy or dangerous trade,
business, manufacture or occupation nor permit any auction sale to be held or
conducted on or about the Premises. Sublessee shall not do or suffer anything to
be done upon the Premises which will cause structural injury to the premises or
the building of which the same form a part. The Premises shall not be overloaded
and no machinery, apparatus or other appliance shall be used or operated upon
the Premises which will in any manner injure, vibrate or shake the premises or
the building of which it is a part. No use shall be made of the Premises which
will in any way impair the efficient operation of the sprinkler system (if any)
within the building containing the Premises. Sublessee shall not leave the
Premises unoccupied or vacant during the term. No musical instrument of any
sort, or any noise making device will be operated or allowed upon the premises
for the purpose of attracting trade or otherwise. Sublessee shall not use or
permit the use of the Premises or any part thereof for any purpose which will
increase the existing rate of insurance upon the building in which the Premises
are located, or cause a cancellation of any insurance policy covering the
building or any part thereof. If any act on the part of Sublessee or use of the
premises shall cause directly or indirectly, any increase of Sublessor's
insurance expense, said additional expense shall be paid by Sublessee or
Sublessor upon demand. No such payment by Sublessee shall limit Sublessor in the
exercise of any other rights or remedies, or constitute a waiver of Sublessor's
right to require Sublessee to discontinue such act or use.
7. Sublessor's Liability: Sublessor shall remain liable for the performance of
the provisions of the Master Lease.
8. Sublessee to Hold Sublessor Harmless: Sublessor warrants that as of the
commencement date of this Sublease, there will be no uncured default under the
Master Lease. If Sublessee defaults under this Sublease or causes a breach or
default the Master Lease, Sublessee shall indemnify, defend, protect and hold
Sublessor harmless from and against any and all damages, liabilities, costs and
expenses (including without limitation reasonable attorney's fees) resulting
from Sublessee's default or breach. If Sublessee defaults in its obligations
under this Sublease or causes a breach or default under the Master Lease, and
Sublessor elects, in its sole discretion, to pay rent to Landlord or fulfill any
of Sublessee's other obligations in order to prevent Sublessee from being in
default, Sublessee immediately shall reimburse Sublessor for the amount of rent
or costs incurred by Sublessor in fulfilling Sublessee's obligations under this
Sublease, together with interest on those sums at the rate of nine percent ( 9%)
per annum, or the highest legal rate.
9. Amendment of Sublease: Sublessee and Sublessor shall not enter into any
agreement that amends the Sublease without such amendment being in writing and
being signed by Sublessor and Sublessee, and Landlord. Any agreement in
violation of this provision shall have no force or effect on Sublessor.
10. Miscellaneous:
a. Attorney's Fees: If any party commences an action against any of the parties
arising out of or in connection with the Sublease, the prevailing party or
parties shall be entitled to recover from the losing party or parties reasonable
attorney's fees and cost of suit.
26
SUBLEASE AGREEMENT, XIOX CORPORATION AND HANDS-ON TECHNOLOGY
<PAGE>
10. Miscellaneous (con't):
b. Notice: Any notice, demand, consent, approval or communication that either
party desires or is required to give to the other party or other person shall be
in writing and either served personally or sent by prepaid, first-class mail.
Any notice, demand, request, consent, approval, or communication that either
party desires or is required to give to the other party shall be addressed to
the other party at the address set forth in the introductory paragraph of this
Sublease. Either party may change its address by notifying the other party of
the change of address. Notice shall be deemed communicated within 72 hours from
the time of mailing, if mailed as provided in this paragraph.
c. This Sublease shall be subject to all of the terms, convenants and conditions
of the Master Lease. In addition to Sublessee's obligations under this Sublease,
Sublessee agrees to perform all of Sublessor's convenants, conditions and
obligations under the Master Lease relating the the Premises and accruing or
arising during the term of this Sublease in the manner and within the time
required under the Master Lease, except for convenants, conditions and
obligations which Sublease is unable to perform because Sublessor is
specifically required to perform them under the Master Lease; provided, however,
that in no event shall Sublessee have the right to exercise any of Sublessor's
rights or options under the Master Lease, including , without limitation, any
options to extend the Master Lease term or to lease additional space. Sublessee
shall not commit or permit to be committed any act or omission which shall
violate any terms, convenants or conditions of the Master Lease. The Sublease
shall automatically terminate if the Master Lease is terminated. Sublessor shall
have no liability to Sublessee for any termination of this Sublease or any other
matters as a result of the termination of this Sublease if the Master Lease is
terminated for any reason.
d. Sublessor hereby agrees to immediately notify Sublessee of any and all
defaults by Sublessor in the Master Lease. Sublessee shall have the right to
cure any such default, so as to keep the Master Lease in force, without cost to
Sublessor.
e. Sublessee shall have the option to extend for an additional six (6) months
solely at the discretion of the Sublessor at the same terms and conditions with
the exception of Rental amount which may be increased to the same sum per
rentable square foot as Sublessor is required to pay under Master Lease. Such
option to extend the Sublease shall be determined and communicated to the
Sublessee by the Sublessor by six (6) months prior to the end of this Sublease.
27
SUBLEASE AGREEMENT, XIOX CORPORATION AND HANDS-ON TECHNOLOGY
<PAGE>
AGREES AND ACCEPTED;
Landlord
Bay Park Plaza Associates, L.P.
n/a
- -----------------------------------
- -----------------------------------
By:________________________________
Its:________________________________
Date:______________________________
Sublessor: Sublessee:
XIOX Corporation Hands-On Technology
- ----------------------------------- ---------------------------------
Melanie D. Reid Kent Daniel
- ----------------------------------- ---------------------------------
By: Melanie D. Reid By: Kent Daniel
- ----------------------------------- ---------------------------------
Its: Vice President of Finance/CFO Its: Vice President/COO
- ----------------------------------- ---------------------------------
Date: November 8, 1995 Date: November 8, 1995
------------------------------- ---------------------------
28
SUBLEASE AGREEMENT, XIOX CORPORATION AND HANDS-ON TECHNOLOGY
<PAGE>
EXHIBIT 10.092
XIOX CORPORATION 10-KSB FOR DECEMBER 31, 1995
LEASE AGREEMENT
This Lease Agreement is made on November 8 , 1995, between XIOX Corporation
("Lessor"), whose address is 577 Airport Blvd., Suite 700, Burlingame, CA 94010,
and Hands-On Technology ("Lessee"), whose address is 577 Airport Blvd., Suite
450, Burlingame, CA 94010.
Recitals. This Lease Agreement is made with reference to the following facts and
objective:
a. Lessor (XIOX Corporation) entered into that certain office sublease dated
October 25, 1995 with, Lessee (Hands-On Technology) and Bay Park Plaza
Associates, L.P. (Landlord) for certain premises consisting of approximately
4,339 square feet commonly known as 577 Airport Blvd., Suite 700, Burlingame, CA
94010, as more particularly described in the Sublease Agreement. A copy of the
Sublease Agreement is attached hereto as Exhibit A and made a part hereof.
b. Lessor (XIOX Corporation) desires to lease to Lessee ( Hands-On Technology)
and Lessee desires to lease from Lessor the "Furniture" as defined below under
the terms and conditions set forth herein.
Now, therefore, Lessor and Lessee agree as follows:
Furniture: Lessor leases to Lessee and Lessee from said Lessor the following
described furniture situated within the Premises as defined in Paragraph 1 of
the Sublease Agreement (Exhibit A).
- Twenty-six assembled office cubicles including desks
- Thirty-one chairs
- One stand-alone desk
- Two stand-alone circular tables
- One Lanier copy machine
Lessee shall take Furniture in an "As-is" excepting normal wear and tear, broom
clean, professional appearing condition. Lessor makes no representations or
warranties of any kind with respect to the improvements, or physical conditions
on, or bearing on, the use of the Furniture. Lessee shall rely solely on
Lessee's own inspection and examination of such items and not on any
representations of Lessor, whether expressed or implied. This Lease shall take
effect on November 15, 1995, and Lessor shall give possession of the Furniture
to Lessee on that date.
Lessee further agrees to return the furniture to the Lessor in the same
condition, excepting normal wear and tear, as Lessee took possession of said
furniture.
2. Rental: Lessee shall pay to Lessor without deduction, off set, prior notice
or demand, as rental the sum of $0.18 per rentable square foot per month of the
Premises defined in Paragraph 1 of Sublease Agreement (Exhibit A) upon
commencement of Lease on November 15, 1995 through November 14, 1996. Rent shall
be paid on the fifteenth (15th) day of each month in lawful money of the United
States of America, commencing on the 15th day of November, 1995, and continuing
throughout the balance of the term. Monthly rental for any particular month
shall be prorated at the rate of 1/30th of the monthly rental per day. Rent
shall be paid in currency of the United Stated of America to Lessor at 577
Airport Blvd., Suite 700, Burlingame, CA 94010 or at such other place or places
as Lessor may from time to time direct.
3. Prepaid Rent: Security Deposit: Receipt of $781.02 is hereby acknowledged for
rental for the first month, and the additional amount of $781.02 as security
deposit for the faithful performance of this Lease as a security deposit. In the
event Lessee has performed all of the terms and conditions of this Lease
throughout the term, upon Lessee returning the Furniture, the amount paid shall
be returned to Lessee after first deducting any sums owing to Lessor.
4. Term: The term of this Lease shall be for a period of twelve (12) months
commencing on the 15th day of November, 1995 and ending on the 14th day of
November, 1996. 29
29
<PAGE>
5. Use: Lessee shall use the Furniture for general office purposes and for no
other purpose.
6. Amendment of Lease: Lessee and Lessor shall not enter into any agreement that
amends the Lease without such amendment being in writing and being signed by
Lessor and Lessee. Any agreement in violation of this provision shall have no
force or effect on Lessor.
7. Miscellaneous:
a. This Lease shall be subject to all of the terms, convenants and conditions of
the Sublease Agreement. (Exhibit A).
AGREES AND ACCEPTED:
Lessor: Lessee:
XIOX Corporation Hands-On Technology
- ----------------------------------- -----------------------------------
Melanie D. Reid Kent Daniel
- ----------------------------------- -----------------------------------
By: Melanie D. Reid By: Kent Daniel
- ----------------------------------- -----------------------------------
Its: Vice President of Finance/CFO Its: Vice President/COO
- ----------------------------------- -----------------------------------
Date: November 8, 1995 Date: November 8, 1995
- ----------------------------------- -----------------------------------
30
