EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of February
29, 2000 (the "Signing Date"), is made by and between Personify, Incorporated, a
California corporation (together with any successor entity, the "Company"), and
Love Goel, an individual (the "Unit Holder"). The Company and the Unit Holder
are sometimes together referred to as the "Parties," and individually referred
to as a "Party."
PRELIMINARY STATEMENTS
A. The Company and Unit Holder are parties to that certain Restricted
Stock Purchase Agreement dated as of the date hereof (the "Purchase Agreement")
and that certain Employment Agreement dated as of January 6, 2000 (the
"Employment Agreement"); and
B. Pursuant to the Purchase Agreement, on the date hereof, the Unit Holder
received one million six hundred ninety-one thousand (1,691,000) shares of
common stock of the Company (the "Shares").
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, representations and warranties set forth in this Agreement and for
other good, valid and binding consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions. As used in this Agreement, the following terms
will have the meanings ascribed below :
(a) "1933 Act" will mean the Securities Act of 1933, as amended.
(b) "Affiliate" means with respect to a Holder, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with such Holder. For the purposes of this definition, control means the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
Control will be presumed by an individual that is a director, executive officer,
general partner, manager or similar functionary of a Person, or a Person that
beneficially owns more than 10% of any class of securities of such Person having
general voting rights.
(c) "Commission" will mean the Securities and Exchange Commission and
any successor agency.
(d) "Holder" will mean the Unit Holder, his successors and assigns.
(e) "Person" will mean any association, bank, business trust,
corporation, estate, general partnership, governmental authority, individual,
joint stock Company, joint venture, labor union, limited liability Company,
limited partnership, nonprofit corporation, professional association,
professional corporation, trust or any other organization or entity.
(f) "Register," "registered" and "registration" will refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act (as herein defined) and the
declaration or ordering of effectiveness of such registration statement or
document.
(g) "Registrable Stock" will mean any shares of Stock issued to and
held by a Holder. For purposes of this Agreement, any Registrable Stock will
cease to be Registrable Stock when (i) a registration statement covering such
Registrable Stock has been declared effective and such Registrable Stock has
been disposed of pursuant to such effective registration statement, (ii) such
Registrable Stock is sold pursuant to Rule 144 (or any similar provision then in
force) under the 1933 Act, (iii) such Registrable Stock is eligible to be sold
pursuant to Rule 144(k) under the 1933 Act, (iv) such Registrable Stock has been
otherwise transferred, no stop transfer order affecting such stock is in effect
and the Company has delivered new certificates or other evidences of ownership
for such Registrable Stock not bearing any legend indicating that such shares
have not been registered under the 1933 Act, or (v) such Registrable Stock is
sold by a Person in a transaction in which the rights under the provisions of
this Agreement are not assigned.
(h) "Requesting Holders" will mean a Holder or Holders of, in the
aggregate, at least a majority of the Registrable Stock.
(i) "Stock" will mean the common stock of the Company.
Section 1.2 References. References in this Agreement to any rules,
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regulations or forms promulgated by the Commission will include rules,
regulations and forms succeeding to the functions thereof, whether or not
bearing the same designation.
ARTICLE II.
PIGGYBANK REGISTRATION RIGHTS
Section 2.1 Piggybank Registration. At any time after the Signing Date,
if the Company determines that it will file a registration statement under the
1933 Act (other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing securities holders) on any form that would also permit the
registration of the Registrable Stock and such filing is to be on its behalf
and/or on behalf of selling holders of its securities for the general
registration of its securities to be sold for cash, at such
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time the Company will within forty-five (45) days following such determination,
give each Holder written notice by registered mail of such determination setting
forth the date on which the Company proposes to file such registration
statement, which date will be no earlier than thirty (30) days from the date of
such notice, and advising each Holder of its right to have Registrable Stock
included in such registration. Upon the written request of any Holder received
by the Company no later than thirty (30) days after the date of the Company's
notice, the Company will use all reasonable efforts to cause to be registered
under the 1933 Act all of the Registrable Stock that each such Holder has so
requested to be registered. If, in the written opinion of the managing
underwriter or underwriters (or, in the case of a nonunderwritten offering, in
the written opinion of the placement agent, or if there is none, the Company),
the total amount of such securities to be so registered, including such
Registrable Stock, will exceed the maximum amount of the Company's securities
which can be marketed (i) at a price reasonably related to the then current
value of such securities, or (ii) without otherwise materially and adversely
affecting the entire offering, then the amount of Registrable Stock to be
offered for the accounts of Holders will be reduced pro rata to the extent
necessary to reduce the total amount of securities to be included in such
offering to the recommended amount; provided, that if securities are being
offered for the account of other Persons as well as the Company, such reduction
will not represent a greater fraction of the number of securities intended to be
offered by Holders than the fraction of similar reductions imposed on such other
Persons other than the Company over the amount of securities they intended to
offer.
ARTICLE III.
CERTAIN RESTRICTIONS
Section 3.1 Holdback Agreement - Restrictions on Public Sale by Holders.
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To the extent not inconsistent with applicable law, each Holder whose
Registrable Stock is included in a registration statement agrees not to effect
any public sale or distribution of the issue being registered or a similar
security of the Company, or securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under the
1933 Act, during the ninety (90) days prior to, and during the one hundred
eighty (180) day period beginning on, the effective date of such registration
statement (except as part of the registration), if and to the extent requested
by the Company in the case of a nonunderwritten public offering or if and to the
extent requested by the managing underwriter or underwriters in the case of an
underwritten public offering.
Section 3.2 Restrictions on Public Sale by the Company and Others. The
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Company agrees (i) not to effect any public sale or distribution of any
securities similar to those being registered, or any securities convertible into
or exchangeable or exercisable for such securities, during the fourteen (14)
days prior to, and during the thirty (30) day period beginning on, the effective
date of any registration statement in which Holders are participating (except as
part of such registration), if and to the extent requested by the Holders in the
case of a nonunderwritten public offering or if and to the extent requested by
the managing underwriter or underwriters in the case of an underwritten public
offering; and (ii) that any agreement entered into after the Signing Date
pursuant to which the Company issues or agrees to issue any securities
convertible into or exchangeable or exercisable for such securities (other than
pursuant to an effective registration statement) will contain a provision under
which holders of such securities agree not to effect any
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public sale or distribution of any such securities during the periods described
in (i) above, in each case including a sale pursuant to Rule 144 under the 1933
Act.
ARTICLE IV.
EXPENSES
Section 4.1 Expenses of Registration. The Company will bear all expenses
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incurred in connection with each registration pursuant to Section 2.1 of this
Agreement, excluding underwriters' discounts and commissions, but including,
without limitation, all registration, filing and qualification fees, word
processing, duplicating, printers' and accounting fees (including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance), exchange listing fees or National Association of
Securities Dealers' fees, messenger and delivery expenses, all fees and expenses
of complying with securities or blue sky laws, and fees and disbursements of
counsel for the Company. The selling Holders will bear and pay the underwriting
commissions and discounts applicable to the Registrable Stock offered for their
account and fees and disbursements of counsel to the selling Holders in
connection with any registrations, filings and qualifications made pursuant to
this Agreement.
ARTICLE V.
INDEMNIFICATION
Section 5.1 Indemnification by the Company. The Company agrees to
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indemnify, to the fullest extent permitted by law, each Holder, its officers,
directors and agents and each Person who controls such Holder (within the
meaning of the ▇▇▇▇ ▇▇▇) against all losses, claims, damages, liabilities and
expenses caused by any untrue or allegedly untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein (in the light of the
circumstances under which they were made) not misleading. The Company will not
indemnify any Holder against losses, claims, damages, liabilities and expenses
caused by any untrue statement of material fact contained in any registration
statement that was provided by Holder pursuant to Section 5.2.
Section 5.2 Disclosure and Indemnification by Holders. In connection with
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any registration statement in which a Holder is participating, each such Holder
will furnish to the Company in writing such information with respect to such
Holder as the Company reasonably requests for use in connection with any such
registration statement or prospectus and agrees to indemnify, to the fullest
extent permitted by law, the Company, its directors and officers and each Person
who controls the Company (within the meaning of the ▇▇▇▇ ▇▇▇) against any
losses, claims, damages, liabilities and expenses resulting from any untrue or
alleged untrue statement of a material fact or any omission or alleged omission
of a material fact required to be stated in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in light of the
circumstances under which they were made) not misleading, to the extent that
such untrue statement or omission is contained in any information furnished to
the Company by such Holder.
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Section 5.3 Conduct of Indemnification Proceedings. Any Person entitled
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to indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment of such
indemnified party, a conflict of interest may exist between such indemnified
party and the indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claims with counsel reasonably
satisfactory to such indemnified party. Whether or not such defense is assumed
by the indemnifying party, the indemnifying party will not be subject to any
liability for any settlement made without its consent (but such consent will not
be unreasonably withheld). Failure by such Person to provide said notice to the
indemnifying party will itself not create liability except to the extent of any
injury caused thereby. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation. If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, it will not be obligated to pay the fees and expenses of more than one
(1) counsel with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other such indemnified parties with respect to such claim, in
which event the indemnifying party will be obligated to pay the fees and
expenses of such additional counsel or counsels.
Section 5.4 Contribution. If for any reason the indemnity provided for in
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this Article V is unavailable to, or is insufficient to hold harmless, an
indemnified party, then the indemnifying party will contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other, but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties will be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above will be deemed to include, subject to Section
5.3, any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The Parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the ▇▇▇▇ ▇▇▇) will be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
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If indemnification is available under this Article V, the indemnifying
parties will indemnify each indemnified party to the full extent provided in
Sections 5.1 and 5.2, without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided for in
this Article V.
ARTICLE VI.
PARTICIPATION
Section 6.1 Participation in Underwritten Registrations. No Holder may
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participate in any underwritten registration hereunder unless such Holder (a)
agrees to register and/or sell such Holder's securities on the basis provided in
any underwriting arrangements approved by the Holders entitled hereunder to
approve such arrangements, and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Amendment. No amendment of this Agreement will be effective
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unless in a writing signed by the Parties.
Section 7.2 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which will be deemed to be an original agreement, but all
of which will constitute one and the same agreement.
Section 7.3 Entire Agreement. This Agreement, together with the Purchase
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Agreement (including all exhibits thereto) and the Employment Agreement,
constitutes the entire agreement and understanding between the Parties and
supersedes all other prior agreements and understandings, both written and oral,
with respect to the subject matter of this Agreement.
Section 7.4 Governing Law; Venue. This Agreement shall be governed by and
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construed in accordance with the laws of the State of California. The parties
agrees that any action brought by either party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and
does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company's principal place of
business.
Section 7.5 No Assignment. No Party may assign its benefits or delegate
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its duties under this Agreement without the prior written consent of the other
Party. Any attempted assignment or delegation without such prior consent will be
void.
Section 7.6 No Third Party Beneficiaries. This Agreement is solely for
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the benefit of the Parties and no other Person will have any right, interest or
claim under this Agreement.
Section 7.7 Notices. All claims, consents, designations, notices, waivers
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and other communications in connection with this Agreement will be in writing.
Such claims, consents, desig-
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nations, notices, waivers and other communications will be considered received
(a) on the day of actual transmittal when transmitted by facsimile with written
confirmation of such transmittal, (b) on the next business day following actual
transmittal when transmitted by a nationally recognized overnight courier, or
(c) on the third business day following actual transmittal when transmitted by
certified mail, postage prepaid, return receipt requested; in each case, when
transmitted to a Holder at the address set forth below (or to such other address
to which such Party has notified the other Party in accordance with this Section
7.7):
Company: Personify, Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Unit Holder: Mr. Love Goel
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 7.8 Severability. Any provision of this Agreement that is
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prohibited or unenforceable in any jurisdiction will not invalidate the
remaining provisions of this Agreement or affect the validity or enforceability
of such provision in any other jurisdiction. In addition, any such prohibited or
unenforceable provision will be given effect to the extent possible in the
jurisdiction where such provision is prohibited or unenforceable.
Section 7.9 Successors. This Agreement will be binding upon and will
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inure to the benefit of each Party and its heirs, legal representatives,
permitted assigns, and successors, provided that this Section will not permit
the assignment or other transfer of this Agreement, whether by operation of law
or otherwise, if such assignment or other transfer is not otherwise permitted
under this Agreement.
Section 7.10 Time of the Essence. Time is of the essence in the
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performance of this Agreement and all dates and periods specified in this
Agreement.
Section 7.11 Waiver. No provision of this Agreement will be considered
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waived unless such waiver is in writing and signed by the Party that benefits
from the enforcement of such provision. No waiver of any provision in this
Agreement, however, will be deemed a waiver of a subsequent breach of such
provision or a waiver of a similar provision. In addition, a waiver of any
breach or a failure to enforce any term or condition of this Agreement will not
in any way affect, limit, or waive a Party's rights under this Agreement at any
time to enforce strict compliance thereafter with every term and condition of
this Agreement.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, each Party has executed or caused a duly authorized
officer to execute, this Agreement as of the Signing Date.
PERSONIFY, INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Financial Officer
/s/ Love Goel
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LOVE GOEL
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