XIOX CORPORATION
STOCK PURCHASE AGREEMENT
September 29, 1995
TABLE OF CONTENTS
Page
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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.................3
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.................4
3.7 Legends............................................4
4. California Commissioner of Corporations.........................4
4.1 Corporate Securities Law...........................4
5. Conditions of Investor's Obligations at Closing.................5
5.1 Representations and Warranties.....................5
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
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TABLE OF CONTENTS
(continued)
Page
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6.2 Payment of Purchase Price..........................5
6.3 Qualification......................................5
7. Covenants of the Company........................................6
7.1 Maintain Listed Status.............................6
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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XIOX CORPORATION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 29th day of September,
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, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx, at eleven o'clock a.m., on September 29, 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.
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 nonassessable 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, and the six months ended
June 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.
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3. Representations and Warranties of the Investors. Each Investor severally
and not jointly hereby represents and warrants that effective currently as of
each Closing:
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.
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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
(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.
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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.
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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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 successors 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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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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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XIOX CORPORATION
By: XXXXXXX X. XXXX
--------------------------------
Title: V.P. FINANCE/CFO
-----------------------------
Address: 000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
INVESTORS:
-----------------------------------
Xxxxxxx X. Xxxxxxx
XXXXXX AND XXXX XXXX REAL PROPERTY
TRUST TR DTD 10-3-85
By: XXXXXX X. XXXX, XX.
--------------------------------
Title:
-----------------------------
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EXHIBIT A
SCHEDULE OF INVESTORS
Number of Shares
Investor of Common Stock Purchase Price
-------------------------- ---------------- --------------
Xxxxxxx X. Xxxxxxx 50,000 $150,000.00
Xxxxxx and Xxxx Xxxx Trust 50,000 $150,000.00
Total 100,000 $300,000.00
XIOX CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of September
29, 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 that
certain Stock Purchase Agreement dated as of September 29, 1995, (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 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 of this
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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 X-0, X-0 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. Not-
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withstanding any other provision of 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
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participants in such offering. 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
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
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(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
underwriters, 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 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).
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(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, 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
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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 transferee 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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(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
000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
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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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
XIOX CORPORATION
By: XXXXXXX X. XXXX
-----------------------------------------
Title: V.P. FINANCE/CFO
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INVESTORS:
--------------------------------------------
Xxxxxxx X. Xxxxxxx
XXXXXX AND XXXX XXXX REAL PROPERTY
TRUST TR DTD 10-3-85
By: XXXXXX X. XXXX, XX.
-----------------------------------------
Title:
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