THIS WARRANT AND THE STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND CAN BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES
LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT, UNLESS, IN THE OPINION OF
COUNSEL FOR THE COMPANY OR COUNSEL FOR THE REGISTERED HOLDER (WHICH SHALL BE IN
FORM AND FROM SUCH COUNSEL AS SHALL BE REASONABLY SATISFACTORY TO THE COMPANY),
SUCH REGISTRATION IS NOT THEN REQUIRED.
MICROWARE SYSTEMS CORPORATION
COMMON STOCK PURCHASE WARRANT
1. ISSUANCE. In consideration of good and valuable consideration,
the receipt of which is hereby acknowledged by MICROWARE SYSTEMS CORPORATION,
an Iowa corporation (the "Company"), ________________, a
______________________, or registered assigns (the "Holder") is hereby
granted the right to purchase at any time until 5:00 P.M., Pacific Coast
time, on ________________, 2005 (the "Expiration Date"), ________________
(____________) fully paid and nonassessable shares of the Company's Common
Stock, no par value per share (the "Common Stock") at an exercise price of
$____ per share (the "Exercise Price") subject to further adjustment as set
forth in Section 6 hereof.
2. EXERCISE OF WARRANTS. This Warrant is exercisable in whole or in
part for whole shares of the Company's Common Stock at the Exercise Price per
share of Common Stock payable hereunder, payable in cash or by certified or
official bank check. In lieu of paying cash to exercise this Warrant, the Holder
may (if the Common Stock then deliverable to Holder is either not freely
saleable by Holder or is not then registered for resale pursuant to an effective
registration statement), by designating a "cashless" exercise on the Notice of
Exercise Form, acquire a number of whole shares of the Company's Common Stock
equal to (a) the difference between (i) the Market Value of the Company's Common
Stock and (ii) the Exercise Price, multiplied by (b) the number of shares of
Common Stock purchasable under the portion of the Warrant tendered to the
Company, divided by (c) the Market Value of the Company's Common Stock. Upon
surrender of this Warrant Certificate with the annexed Notice of Exercise Form
duly executed, together with payment of the Exercise Price for the shares of
Common Stock purchased, the Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. For the purposes of
this Section 2, "Market Value" shall be an amount equal to the average closing
bid price of a share of Common Stock for the five (5) business days immediately
preceding the Company's receipt of the Notice of Exercise Form duly executed.
3. RESERVATION OF SHARES. The Company hereby agrees that at all
times during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").
4. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. ADJUSTMENTS TO EXERCISE TERMS.
If the Company at any time prior to the full execution of this
Warrant shall, by subdivision, combination, merger, spin-off, re-classification
or like capital adjustment of the securities, change any of the securities to
which purchase rights under this Warrant exist into the same or different number
of securities of any class or classes, this Warrant shall thereafter entitle the
Holder to acquire such number and kind of securities as would have been issuable
as a result of such change with respect to the securities acquirable immediately
prior to such transaction. If shares of the securities acquirable upon exercise
of this Warrant are subdivided into a greater number of securities, including
any stock dividend, or if such securities are combined into a lesser number of
securities, then the purchase price for the securities acquirable upon exercise
of this Warrant and the securities acquirable pursuant to this Warrant shall be
proportionately and equitably adjusted.
7. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION RIGHTS.
(a) This Warrant has not been registered under the Securities Act of
1933, as amended, (the "Act") and has been issued to the Holder for investment
and not with a view to the distribution of either the Warrant or the Warrant
Shares. Neither this Warrant nor any of the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may be sold, transferred,
pledged or hypothecated in the absence of an effective registration statement
under the Act and applicable state securities laws relating to such security,
unless in the opinion of counsel satisfactory to the Company, such registrations
are not required under the Act. Each certificate for the Warrant, the Warrant
Shares and any other security issued or issuable upon exercise of this Warrant
shall contain a legend on the face thereof, in form and substance satisfactory
to counsel for the Company, setting forth the restrictions on transfer contained
in this Section.
(b) The Company agrees to file a registration statement, which shall
include the Warrant Shares, on Form S-1 or another available form (the
"Registration Statement"), pursuant to the Act, pursuant to a Registration
Rights Agreement between the Company and Holder dated as of the date hereof (the
"Registration Rights Agreement").
8. NOTICES. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two days after the date of deposit in the United States mails, as
(i) if the to Company, to:
Microware Systems Corporation
0000 Xxxxxxxxx 000xx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(ii) if to the Holder, to:
c/o Navigator Management
X.X. Xxx 000
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Any party may give notice in accordance with this Section to the other parties
designating another address or person for receipt of notices hereunder.
9. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties hereto with
respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. GOVERNING LAW. This Warrant shall be deemed to be a contract made
under the laws of the State of California and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
11. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
__ day of ___________, 2000.
MICROWARE SYSTEMS CORPORATION, an Iowa
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice
Financial Officer and
Chief Operating Officer