EXHIBIT 10.25
METATOOLS, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this "Agreement") is
dated as of the 31st day of December 1996, by and among MetaTools, Inc., a
Delaware corporation (formerly known as HSC Software Corp.) ("Company"), and the
entities set forth in Schedule 1 attached hereto (individually herein
"Purchaser" and herein collectively referred to as "Purchasers").
Recitals
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WHEREAS Company and the Original Stockholders (as set forth on the
signature pages hereto) are parties to that certain Investors' Rights Agreement,
dated January 21, 1994, as amended by an Amendment dated September 30, 1994 and
an Amendment dated October 25, 1995 (the "Prior Agreement");
WHEREAS pursuant to that certain Stock Purchase Agreement dated the date
hereof (the "Purchase Agreement"), Company is acquiring approximately 97% of the
outstanding capital stock of Real Time Geometry Corp., a Delaware corporation
("RTG"), from certain stockholders of RTG (the "Former RTG Holders") in exchange
for Common Stock of Company (the "Purchase");
WHEREAS in connection with the Purchase, Company shall grant the Option
Holders (as defined in the Purchase Agreement) certain options to purchase
Common Stock of Company (the "Former RTG Options");
WHEREAS in order to induce the Former RTG Holders and the Option Holders to
consummate the Purchase, Company and the Original Stockholders desire that
Company grant to the Former RTG Holders and the Option Holders the registration
and other rights set forth herein.
The parties hereby agree as follows:
1. DEFINITIONS.
1.1 "Agreement" shall mean, and the words "Herein," "Hereof," "Hereunder"
and words of similar import shall refer to this instrument and any amendment
hereto.
1.2 "Commission" shall refer to the Securities and Exchange Commission.
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1.3 "Exchange Act" shall refer to the Securities Exchange Act of 1934, as
amended.
1.4 "Person" shall refer to any corporation, trust, partnership,
individual, association, or other entity.
1.5 "Registrable Securities" shall refer to Company's Common Stock as set
forth on Schedule 2 attached hereto ("Schedule 2") and Common Stock issuable
upon exercise of the Former RTG Options as set forth on Schedule 2; provided,
however, that (i) for the purposes of Section 2.1 (Demand Registration Rights)
Registrable Securities shall not include any securities owned by the Former RTG
Holders, as set forth on Schedule 2, or issuable upon exercise of the Former RTG
Options and (ii) for purposes of Section 2.3 (Form S-3) Registrable Securities
shall not include, until December 31, 1998, any securities owned by any Former
RTG Holder or issuable upon exercise of any Former RTG Options other than any
securities owned by Wexford Capital Partners II, LP and Wexford Overseas
Partners I, LP.
1.6 "Securities Act" shall refer to the Securities Act of 1933, as amended.
1.7 "Seller" as used in Article 2 refers to a holder of the Registrable
Securities selling or otherwise transferring pursuant to this Agreement such
shares.
2. REGISTRATION RIGHTS
2.1 Demand Registration Rights.
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(a) Upon the written request to register Registrable Securities by the
holders of at least forty percent (40%) of the Registrable Securities, Company
shall within ten (10) days of receipt of such request deliver written notice of
such request to all Persons owning Registrable Securities who shall have thirty
(30) days to indicate in writing their desire to be included in such
registration. Company will use its best efforts to expeditiously effect the
registration of all Registrable Securities whose holders request participation
in such registration under the Securities Act, but only to the extent provided
for in the following provisions of this Article 2; provided, however, that
Company shall not be required to effect registration pursuant to requests under
Section 2.1 hereof more than once for the holders of the Registrable Securities
as a group and unless the registration can reasonably be expected to result in
an aggregate sales price to the public of at least One Million Five Hundred
Thousand Dollars ($1,500,000).
(b) Whenever a requested registration pursuant to 2.1(a) is for an
underwritten offering, only Registrable Securities which are to be included in
the underwriting may be included in the registration, and, if the managing
underwriting determines in good faith that the number of Registrable Securities
so included which are to be sold by the holders of the Registrable Securities is
limited due to market conditions, the parties with Registrable Securities in
such underwriting and registration shall share pro rata in
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the number of such Registrable Securities being underwritten and registered for
their account, such sharing to be based on the number of all Registrable
Securities held by such holders, respectively. Except as permitted herein,
Company may not cause any other registration of securities for sale for its own
account (other than a registration effected solely to implement an employee
benefit plan or a transaction to which Rule 145 of the Commission is applicable)
to become effective less than ninety (90) days after the effective date of any
registration required pursuant to Section 2.1.
(c) Company shall file a registration statement covering the
Registrable Securities requested to be registered pursuant to this Section 2.1
or Section 2.10 as soon as practical, but in any event within sixty (60) days
after receipt of such request or requests; provided, however, that if Company
shall furnish to the requesting Purchasers a certificate signed by the President
of Company stating that in the good faith judgment of at least two-thirds of the
members of the Board of Directors it would be seriously detrimental to 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, Company shall have an additional period of not more
than one hundred twenty (120) days after the expiration of the initial sixty
(60) day period within which to file such registration statement. Such right to
delay a request may be exercised by Company not more than once in any two (2)
year period. Nothing in this Section 2.1(c) shall preclude a holder of
Registrable Securities from enjoying registration rights which it might
otherwise possess under Section 2.2 hereof.
2.2 Piggyback Registration. If Company at any time proposes to register any
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of its securities under the Securities Act, either for its own account or the
account of a security holder or holders, (other than a registration effected
solely to implement an employee benefit plan, a transaction to which Rule 145 of
the Commission is applicable or any other form or type of registration in which
Registrable Securities cannot be included pursuant to Commission rule or
practice), it will give written notice to all holders of outstanding Registrable
Securities of its intention to do so. If such registration is proposed to be on
a form which permits inclusion of the Registrable Securities, upon the written
request of any holders of the Registrable Securities given within ten (10) days
after transmittal by Company to the holders of such notice, Company will,
subject to the limits contained in this Section 2.2, use its best efforts to
cause all such Registrable Securities of said requesting holders to be
registered under the Securities Act and qualified for sale under any state blue
sky law, all to the extent requisite to permit such sale or other disposition by
such holder of the Registrable Securities so registered; provided, that if the
underwriter managing such transaction notifies the holders of Registrable
Securities in writing that market or economic conditions limit the amount of
securities which may reasonably be expected to be sold on behalf of selling
stockholders, the number of Registrable Securities which are included in such
registration shall be reduced. Any reduction will first be imposed on holders
without registration rights and holders of registration rights other than the
holders of the Registrable Securities and to the extent that further reduction
is required, such reduction will be imposed pro rata among the holders of
Registrable Securities, based on their respective ownership of Registrable
Securities; provided that such underwriter may limit the Registrable Securities
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sought to be registered by the holders of Registrable Securities on the
Company's registration statement to not less than thirty percent (30%) of the
total number of shares being registered.
2.3 Registration Procedures. If and whenever Company is required by the
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provisions of this Article 2 to use its best efforts to effect the registration
of any of its securities under the Securities Act, Company will, as
expeditiously as possible:
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for a period not in excess of ninety
(90) days (or at the request of a majority of the selling holders, an additional
ninety (90) days);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the seller or sellers of such securities shall desire to sell or
otherwise dispose of the same, but only to the extent provided in this Article
2;
(c) furnish to each seller such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request
in order to facilitate the public sale or other disposition of the securities
owned by such seller;
(d) use every reasonable effort to register or qualify the securities
covered by such registration statement under such other securities or state blue
sky laws of such jurisdictions as each seller shall reasonably request, and do
any and all other acts and things which may be necessary under such securities
or blue sky laws to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the securities owned by such seller, except
that Company shall not for any such purpose be required to qualify to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified;
(e) before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to one counsel selected by the
holders of a majority of Registrable Securities included in such registration
copies of such documents proposed to be filed, which shall be subject to the
reasonable approval of such counsel; and
(f) furnish to each prospective seller of more than fifty thousand
(50,000) shares of Registrable Securities a signed counterpart, addressed to the
prospective seller, of an opinion of counsel for Company, dated the effective
date of the registration statement, covering substantially the same matters with
respect to the registration statement (and the prospectus included therein) as
are customarily covered (at the time of such registration) in opinions of
Company's counsel delivered to the underwriters in underwritten public offerings
of securities.
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2.4 Expenses. All expenses incurred in effecting the registration provided
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for in Section 2.1 and for all registrations provided for in Sections 2.2 and
2.10, including without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for Company and fees of one special
counsel of the selling holders of Registrable Securities selected by the holders
of a majority of the Registrable Securities included in the registration but
reasonably acceptable by Company both as to experience and to fees, underwriting
expenses (other than commissions or discounts), expenses of any audits of
Company's financial statements incident to or required by any such registration
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 2.3(d) hereof (all of such expenses referred
to "Registration Expenses") shall be paid by Company, provided, that if an
offering pursuant to any registration commenced pursuant to Section 2.1(a) is
abandoned by the sellers (other than by reason of adverse information pertaining
to Company's business affairs or financial position, as opposed to stock market
conditions, unknown to the sellers and Company prior to the commencement of such
registration proceedings, in which event Company shall bear all Registration
Expenses), such sellers shall bear any costs incurred by Company in conjunction
with such registration or at their option forfeit their demand right under
Section 2.1.
2.5 Indemnification.
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(a) Indemnification by Company. In the event of any registration of
any of its securities under the Securities Act pursuant to this Article, Company
shall indemnify and hold harmless each of the following parties ("Indemnified
Parties"):
(i) the seller of such securities;
(ii) each underwriter (as defined in the Securities Act);
(iii) each other Person who participates in the offering of such
securities; and
(iv) each other Person, if any, who controls (within the meaning
of the Securities Act) such seller, underwriter or participating Person,
against any losses, claims, damages or liabilities, including any legal fees or
other cost or expense incurred for investigating or defending same (collectively
a "Liability"), joint or several, to which such Indemnified Party may become
subject under the Securities Act or any other statute or at common law, insofar
as such Liability (or action in respect thereof) arises out of or is based upon:
(a) any alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or
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(b) any alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
Notwithstanding the foregoing, Company shall not be liable to any Indemnified
Party in any such case to the extent that any such Liability arises out of or is
based upon any alleged untrue statements or alleged omission made in such
registration statement, preliminary or final prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with information
furnished to Company by such Person specifically for use therein. Moreover,
Company shall not be required to indemnify any Person against any Liability
arising from any untrue or misleading statement or omission contained in any
preliminary prospectus if such deficiency is corrected in the final prospectus
or for any liability which arises out of the failure of any such Person to
deliver a prospectus as required by the Securities Act. The indemnity provided
for in this Section 2.5 shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall survive
transfer of such securities by such seller. Any legal fees or other costs and
expenses incurred by an Indemnified Party in connection with any liability
shall, subject to a good faith judgment of the Board of Directors of Company
that there is no reasonable basis for not indemnifying the Indemnified Party
pursuant to the requirements of this Agreement and the receipt of an acceptable
undertaking to reimburse the Indemnifying Party in the event that the
Indemnifying Party is not entitled to indemnification pursuant to the terms of
this Agreement, be reimbursed as incurred by Indemnified Party.
(b) Indemnification by Holders of Registrable Securities. Each holder
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of any Registrable Securities shall, by acceptance thereof, indemnify and hold
harmless each other holder of any Registrable Securities, Company, its directors
and officers, each underwriter and each other Person, if any, who controls
Company or such underwriter or other holder ("Indemnitee") against any liability
(including fees and expenses incurred in investigating and defending same),
joint or several, to which Indemnitee may become subject under the Securities
Act or any other statute or at common law, insofar as such liability (or actions
in respect thereof) arises out of or is based upon:
(i) the disposition by such holder of such Registrable Securities
in violation of the provisions of this Article;
(ii) any alleged untrue statement of any material fact contained,
on the effective date thereof, in any registration statement under which
securities were registered under the Securities Act at the request of such
holder, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto; or
(iii) any alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
Such indemnification in the case of (ii) and (iii) applies to the extent, but
only to the extent, that such alleged untrue statement or alleged omission was
made in such registration state-
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ment, preliminary or final prospectus, amendment or supplement thereto (A) in
reliance upon and in conformity with information furnished to Company by such
holder specifically for use therein, and (B) not based on the authority of an
expert as to which the holder had no reasonable ground to believe, and did not
believe, that the statements made on the authority of such expert were untrue or
that there was an omission to state a material fact. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnitee and shall survive transfer of such securities by such holder.
(c) Liability Exclusion for Holders. No holder of Registrable
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Securities shall be required to indemnify any Person against any liability
arising from any untrue or misleading statement or omission contained in any
preliminary prospectus if such deficiency is corrected in the final prospectus
or for any liability which arises out of the failure of any such Person to
deliver a prospectus as required by the Securities Act. Moreover, the liability
of any holder of Registrable Securities pursuant to this Section 2.5 shall be
limited to an amount equal to the total public offering price, less underwriting
discounts and commissions, for the Registrable Securities sold by such holder
or, in the situation described in (i) of subsection (b), limited to an amount
equal to proceeds of the disposition referred to therein.
(d) Contribution. If the indemnification provided for in Section
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2.5(a) or 2.5(b) is unavailable or insufficient to hold harmless an Indemnified
Party in respect of any Liability, then the person required under such Section
2.5(a) or (b), as the case may be (the "Indemnifying Party"), shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
Liability in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand, and the Indemnified Party on the other,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities, expenses or actions as well as any other relevant
equitable considerations, including the failure to give the notice required
hereunder. The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Company and the holders of Registrable
Securities agree that it would not be just and equitable if contributions
pursuant to this Section 2.5(d) were determined by pro rata allocation or by any
other method of allocation which did not take account of the equitable
considerations referred to above. The amount paid or payable to an Indemnified
Party as a result of the Liabilities shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
contribution provisions of this Section 2.5(d), in no event shall the amount
contributed by any seller of Registrable Securities exceed the aggregate net
offering proceeds received by such seller from the sale of Registrable
Securities to which such contribution or indemnification claim relates. No
person guilty of fraudulent misrepresentations (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation.
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(e) Further Indemnity. Indemnification similar to that specified in
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paragraphs (a) through (d) of this Section shall be given by Company and each
holder of any Registrable Securities (with such modifications as may be
appropriate) with respect to any required registration or other qualification of
the Registrable Securities under any federal or state law or regulation of
governmental authority other than the Securities Act.
(f) Procedures, Rights to Separate Counsel. In the event an
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Indemnified Party or Indemnitee ("Claimant") receives a complaint, claim or
other notice of any loss, claim or damage, liability or action giving rise to a
claim for indemnification under this Section, the Claimant shall promptly notify
the Indemnifying Party of such complaint, notice, claim or action, and such
Indemnifying Party shall have the right to investigate and defend any such loss,
claim, damage, liability or action. The Claimant shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall not be at the expense of the
Indemnifying Party unless the Indemnifying Party fails to promptly defend, in
which case the fees and expenses of such separate counsel shall be borne by the
Indemnifying Party, provided, however, that a Claimant shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnifying Party, if the representation of such Claimant would be
inappropriate due to actual or potential differing interests between the
Claimant and the other party represented by such counsel in such proceeding. In
no event shall an Indemnifying Party be obligated to indemnify any Person for
any settlement of any claim or action effected without the Indemnifying Party's
prior written consent.
2.6 Termination of Registration. Notwithstanding the foregoing provisions
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of this Article 2, the rights to registration and the designation of Registrable
Securities shall terminate as to any particular securities when such securities
shall have been lawfully sold by the holder to the public thereof pursuant to a
registration statement or Rule 144 and as to all Registrable Securities on the
earlier of seven (7) years from the date hereof or December 12, 2000.
2.7 Compliance with Rule 144. At the request of any holder of Registrable
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Securities who proposes to sell the Registrable Securities in compliance with
Rule 144 of the Commission, Company shall forthwith furnish to such holder or
holders a written statement of compliance with the filing requirements of the
Commission as set forth in such Rule, as such Rule may be amended from time to
time and make available to the public and such holders such information as will
enable the holders to make sales of Registrable Securities pursuant to Rule 144.
2.8 Consent to be Bound. Each subsequent holder of Registrable Securities
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must consent in writing to be bound by the terms and conditions of this Article
2 in order to acquire the rights granted pursuant to Article 2 and shall be
required to execute such customary underwriting agreements as may be proposed by
the managing underwriter.
2.9 Amendments. The provisions of this Agreement may be amended, and
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Company may take any action herein prohibited or omit to perform any act herein
required to
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be performed by it, only if Company has obtained the written consent of the
holders of at least two thirds (2/3) of the Registrable Securities.
2.10 Form S-3. As of December 20, 1996, the Company is, and it shall use
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its best efforts to remain, qualified for registration on Form S-3. The holders
of the 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 such shares by such holder or holders). Company shall
not be required to effect a registration pursuant to this Section 2.10 if, in
the good faith judgment of Company, such registration will hinder or interfere
with a concurrent or proposed security issuance of, or acquisition by, Company
or if the holder or holders requesting registration propose to dispose of shares
of the Registrable Securities having an aggregate disposition price (before
deduction of underwriting discounts and expenses of sale) of less than Five
Hundred Thousand Dollars ($500,000). This Section shall not be interpreted to
restrict Company from acquiring its own shares or to require Company to sell its
own shares. Company shall give notice to all holders of the Registrable
Securities of the receipt of a request for registration pursuant to this Section
2.10 and shall provide a reasonable opportunity for other holders to participate
in the registration. Subject to the foregoing, Company will use its best
efforts, in each case, to effect promptly the registration of all shares of the
Registrable Securities on Form S-3 to the extent requested by the holder or
holders thereof for purposes of disposition.
2.11 Assignability of Registration. Subject to Section 2.8 hereof, the
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registration rights set forth in this Article 2 are assignable to each assignee
of Registrable Securities conveyed in accordance herewith (i) who agrees in
writing to be bound by the terms and conditions of this Agreement and (ii) who
after such transfer owns at least fifty thousand (50,000) shares of Registrable
Securities or is an affiliate of such transferror or is a Purchaser.
2.12 Designation of Underwriter. In the case of any registration effected
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pursuant to this Article 2, Company shall have the right to designate the
managing underwriter, subject to the approval of Purchasers, which approval will
not be unreasonably withheld.
2.13 Rights Which May Be Granted to Subsequent Investors. Company may not
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grant any registration rights to third parties which are senior to or on a
parity with those granted to Purchasers pursuant to this Agreement without
consent of two thirds (2/3) of the shares of Registrable Securities held by
Purchasers.
2.14 Information by Seller. The holder or holders of Registrable
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Securities included in any registration shall furnish to Company such
information regarding such holder or holders, the Registrable Securities held by
them and the distribution proposed by such holder or holder as Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Article.
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2.15 Standstill. As consideration for Company's agreeing to its
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obligations under this Article 2, in connection with any registration of the
Common Stock of Company, each holder of Registrable Securities does hereby, upon
the request of the underwriters managing any underwritten offering of Company's
securities, agree not to sell or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of Company or such underwriters, as the case may be, for such period of
time (not to exceed one hundred eighty (180) days) from the effective date of
such registration as the Company and underwriters may specify. Such agreement
is conditioned upon each executive officer, director and holder of three percent
(3%) or more of Company's Common Stock (on a fully diluted basis) entering into
a like agreement.
2.16 Restrictions on Transfer.
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(a) Unless and until otherwise permitted by this Agreement, each
certificate for the securities issued to a Purchaser (the "Securities") or to
any subsequent transferee of any such certificate shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of 1933.
Such shares may not be sold or transferred in the absence of such
registration or unless the Company receives an opinion of counsel or other
evidence reasonably acceptable to it stating that such sale or transfer is
exempt from the registration requirements of said act. Copies of the
agreement covering the purchase of these shares and restricting their
transfer may be obtained from the secretary of the Company."
(b) Prior to any transfer or attempted transfer of any Securities
bearing the legend set forth in paragraph (a) of this Section, the holder
thereof shall give Company written notice of its intention to transfer. If, in
the written opinion of counsel for the holder, accompanying such notice and in
form and substance satisfactory to Company and its counsel, addressed to Company
and the holder, the proposed transfer may be effected without registration of
such security, the securities proposed to be transferred may be transferred in
accordance with the terms of said notice and in compliance with applicable state
securities laws and regulations. Company shall not be required to effect any
such transfer prior to the receipt of such favorable opinion or opinions;
provided that, if the proposed transfer is governed by Rule 144 promulgated by
the Commission, or any successor rule, such opinion shall not be required, but
Company may prevent such transfer until it receives evidence satisfactory to it
and its counsel that the transfer complies with Rule 144. Each transfer shall
comply with all applicable Commissioner's rules and applicable state securities
laws. Each certificate evidencing securities transferred as above provided
shall bear the restrictive legend set forth in paragraph (a) of this Section
2.16, unless the transfer is made pursuant to Rule 144 or the opinion of counsel
referred to above is to the further effect that such legend is not required in
order to establish compliance with the Securities Act. Upon the removal of
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the restrictive legend, all obligations of a holder pursuant to this Section
2.16 shall immediately terminate.
(c) The proposed transfer of such securities may not be effected
without registration thereof under the Securities Act, such holder shall not
consummate the proposed transfer. Company may order its transfer agents to stop
the transfer of any Securities bearing the legend required by this Section until
the conditions herein with respect to transfer of such securities have been
satisfied.
3. COVENANTS OF COMPANY.
3.1 Financial Statements and Other Information.
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Company will deliver to each holder of at least fifty thousand (50,000)
shares of Registrable Securities within ten (10) days of transmission thereof,
copies of all financial statements, proxy statements and reports that Company
sends to its stockholders, and copies of all registration statements and all
regular, special or periodic reports which it or any of its officers or
directors file with the Commission or with any securities exchange on which any
of its securities are then listed, and copies of all press releases and other
statements made available generally by Company to the public concerning material
developments in Company's business. The right to receive materials under this
Section shall not be transferable unless the transferee and any affiliates after
such transfer own at least fifty thousand (50,000) shares of Registrable
Securities.
4. MISCELLANEOUS.
4.1 Consent to Amendments. Except as otherwise expressly provided herein
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and except for amendments of this Section (which require the unanimous consent
of the holders of the Registrable Securities), the provisions of this Agreement
may be amended and Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by them, only if it has obtained
the written consent of holders of at least two thirds (2/3) of the Registrable
Securities. No course of dealing between Company and the holder of any security
issued pursuant to this Agreement or any delay in exercising any rights
hereunder will operate as a waiver of any rights of any such holders.
4.2 Successors and Assigns. Except as otherwise expressly provided
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herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
4.3 Severability. Whenever possible, each provision of this Agreement
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will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
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4.4 Counterparts. This Agreement may be executed in two or more
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counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts when taken together will constitute one and the
same Agreement.
4.5 Descriptive Headings. The descriptive headings of this Agreement are
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inserted for convenience only and do not constitute a part of this Agreement.
4.6 Notices. Any approvals, consents or notices required or permitted to
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be sent or given shall be delivered in writing personally or mailed, certified
mail, return receipt requested, to the following addresses and shall be deemed
to have been received upon such personal delivery or within five (5) days after
such mailing:
If to holders
of Registrable
Securities: To the Addresses set forth on Schedule 1
If to Company: MetaTools, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a Copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional
Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
4.7 Governing Law. The validity, meaning and effect of this Agreement
-------------
shall be determined in accordance with the laws of California applicable to
contracts made and to be performed in that state.
4.8 Schedules and Exhibits. All schedules and exhibits are an integral
----------------------
part of this Agreement.
4.9 Litigation Costs. If any legal action or any arbitration or other
----------------
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
4.10 Remedies. Any Person having any rights under any provision of this
--------
Agreement will be entitled to enforce such rights specifically, to recover
damages by reason of any breach of any provision of this Agreement, and to
exercise all other rights granted by law, which rights may be exercised
cumulatively and not alternatively. Moreover, the parties
-12-
acknowledge that each party's obligation under this Agreement is unique. If any
party should default in its obligations under this Agreement, the parties each
acknowledge that it would be extremely impracticable to measure the resulting
damages; accordingly, the nondefaulting party, in addition to any other
available rights or remedies, may ▇▇▇ in equity for specific performance and the
parties each expressly waive the defense that a remedy in damages will be
adequate.
4.11 Final Agreement. This Agreement constitutes the final agreement of
---------------
the parties concerning the matters herein, and supersedes all prior and
contemporaneous agreements and understandings (including, but not limited to,
the Prior Agreement, which shall be of no further force or effect).
-13-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
December 31, 1996.
METATOOLS, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Its: Chairman and CEO
-------------------------
ORIGINAL STOCKHOLDERS:
LAGUNITAS PARTNERS, L.P.
By: /s/▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇. ▇▇▇▇▇▇▇▇▇ McBaine
Its: General Partner
-------------------------
GT AMERICAN SPECIAL SITUATIONS
FUND
By:
---------------------------
Its:
--------------------------
--------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇ ▇▇▇▇▇▇
-14-
SPUME & COMPANY
By:
---------------------------
Its:
--------------------------
▇▇▇▇▇ & COMPANY
By:
---------------------------
Its:
--------------------------
JAPAN ASSOCIATED FINANCE CO., LTD.
By:
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
JAFCO G-3 INVESTMENT ENTERPRISE
PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
Marina Capital II
Japan Associated Finance Co., Ltd.
Its: Executive Partner
JAFCO G-4 INVESTMENT ENTERPRISE
PARTNERSHIP
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
Japan Associated Finance Co., Ltd.
Its: Executive Partner
-15-
JAFCO G-5 INVESTMENT ENTERPRISE
PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
Japan Associated Finance Co., Ltd.
Its: Executive Partner
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
CUSTODIAN FBO: ▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇)
A/C #6325-3945
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Its: Custodian FBO ▇▇▇
-------------------------
MARINA CAPITAL II
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Managing General Partner
-------------------------
▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇,
TRUSTEES FBO ▇▇▇▇▇▇ AND
▇▇▇▇▇▇ ▇▇▇▇▇ LIVING TRUST UTD 6/8/92
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇
-16-
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RISA, INC.
By:
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
UNITED STATES TRUST COMPANY OF
NEW YORK, AS TRUSTEE U/D
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ DATED 7/20/88,
ACCOUNT #▇▇▇▇▇▇▇▇
By:
---------------------------
Its:
--------------------------
------------------------------
▇▇▇▇▇▇ ▇▇▇▇
VULCAN VENTURES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
-17-
FORMER RTG HOLDERS:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
WEXFORD MANAGEMENT I, L.P.
By: Wexford Management LLC
Its: Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Sr. Vice President
-----------------------
WEXFORD MANAGEMENT II, L.P.
By: Wexford Management LLC
Its: Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Sr. Vice President
-----------------------
RTG OPTION HOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-18-
SCHEDULE 1
----------
To The Investors' Rights Agreement
----------------------------------
NAME AND ADDRESS NAME AND ADDRESS
Lagunitas Partners ▇▇▇▇▇ & Company
Attn: ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Vulcan Ventures Incorporated Japan Associated Finance Co., Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇-▇ Investment Enterprise Partnership
550 JAFCO G-4 Investment Enterprise Partnership
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇ JAFCO G-5 Investment Enterprise Partnership
Bellevue, WA 98004-5840 Attn: H.C. Thor
International Operations Department
GT American Special 10th Floor Toshiba Building
Situation Fund 1-1-1 Shibaura Minato-Ku
Attn: ▇▇▇▇▇ Duarino Tokyo, Japan 105
GT Capital
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, Trustees FBO ▇▇▇▇▇▇ and
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Living Trust UTD 6/8/92
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Marina Capital II
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ & Company PaineWebber, Inc.
Financial Square ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
The ARCA Group, Inc. U.S. ▇▇▇▇▇ ▇▇, ▇.▇. ▇▇▇ ▇▇▇
764 Mt. Moro Road Woodstown, NJ 08098-0169
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NAME AND ADDRESS NAME AND ADDRESS
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ United States Trust Company of New York, as
S/3/ Incorporated Trustee
2880 San ▇▇▇▇▇ Expressway U/D ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated 7/20/88, Account
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ #24297300
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Custodian FBO: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
(▇▇▇) A/C #6325-3945 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RISA Incorporated ▇▇▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ S/3/ Incorporated
[get new address] ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Spume & Co. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Real Time Geometry Corp.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Real Time Geometry Corp. Real Time Geometry Corp.
51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Parkway 51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Real Time Geometry Corp. Real Time Geometry Corp.
51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Parkway 51 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Wexford Overseas Partners I, L.P.
Real Time Geometry Corp. Wexford Capital Partners II, L.P.
▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇▇▇▇ Management LLC
Suite 303 Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-2-
SCHEDULE 2
----------
To the Investors' Rights Agreement
----------------------------------
CURRENT METATOOLS NUMBER OF
SHAREHOLDERS HOLDING SHARES OF
REGISTRATION RIGHTS COMMON STOCK
----------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 20,000
▇▇▇▇▇ & Company 110,000
GT American Special Situations Fund 24,000
Spume and Co. (U.S. Small Companies Fund) 136,000
JAFCO G-3 Investment Enterprise Partnership 109,863
JAFCO G-4 Investment Enterprise Partnership 82,398
JAFCO G-5 Investment Enterprise Partnership 95,738
Japan Associated Finance Co. Ltd. 72,001
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇ Account) 6,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 608,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. (warrants) 260,055
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Trust) 180,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Trust) (warrant) 5,100
▇▇▇ ▇▇▇▇▇▇ (warrant) 94,445
Lagunitas Partners 100,000
Mr. & ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ 1,000
Marina Capital II 40,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 108,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 8,000
RISA Inc. (▇▇▇▇▇ ▇▇▇▇▇▇) (warrant) 600
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,000
Vulcan Ventures Incorporated 2,000,000
▇▇▇▇▇ ▇▇▇▇▇ 4,100
▇▇▇▇▇ ▇▇▇▇▇ 400
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (warrants) 28,333
▇▇▇▇▇▇ ▇▇▇▇ 20,000
---------
TOTAL 4,126,533
=========
SCHEDULE 2
----------
To the Investors' Rights Agreement
----------------------------------
----------------------------------------------------------------------
SHARE AND OPTION EXCHANGE IN ACQUISITION
----------------------------------------------------------------------
NUMBER OF
NUMBER OF RTG SHARES OF
SHARES CLASS METATOOLS
CURRENTLY OF COMMON STOCK
STOCKHOLDERS HELD STOCK TO BE ISSUED
----------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 700 Common 815,469
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 75 Common 91,283
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 25 Common 30,427
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 25 Common 30,427
Wexford Overseas 38 Preferred 69,207
Partners I, L.P.
Wexford Capital 162 Preferred 295,043
Partners II, L.P.
NUMBER OF
OPTIONS TO
PURCHASE NUMBER OF EXERCISE
RTG RTG SHARES METATOOLS PRICE
OPTION CURRENTLY OPTIONS TO PER
HOLDERS HELD BE ISSUED SHARE
----------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇ 75 90,165 $ 5.03
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 5 6,011 $ 0.08
