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Exhibit 10.6  

 
 

AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT    
  

        THIS AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of March 28, 2003, is entered into between and among, on the one hand, the lenders identified on the signature pages
hereof (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger
and administrative agent for the Lenders ("Agent"), and, on the other hand, MSC.SOFTWARE CORPORATION, a
Delaware corporation ("Borrower"), with reference to the following: 

 
 

W I T N E S S E T H    
  

        WHEREAS, Borrower previously entered into that certain Loan and Security Agreement, dated as of November 18, 2002, as amended by Amendment Number One to
Loan and Security Agreement dated as of December 19, 2002 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), with Agent and Lenders pursuant to which the Lenders have made certain loans and financial accommodations available to Borrower; 

        WHEREAS,
Borrower has requested that the Loan Agreement be amended as set forth herein; and 

        WHEREAS,
subject to the satisfaction of the conditions set forth herein, the Lender Group is willing to so consent to the amendment of the Loan Agreement. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Loan Agreement as follows: 

1.    DEFINITIONS.    Capitalized terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement, as amended hereby. 

2.    AMENDMENTS TO LOAN AGREEMENT.

        (a)    Section 1.1 of the Loan Agreement is hereby amended by amending and restating the following definitions in their
entirety: 

                "EBITDA"
means, with respect to any fiscal period, Borrower's and its Subsidiaries' consolidated net income (or loss), minus
the sum of extraordinary gains and the expenses relative to the development of software that have been capitalized, plus, without duplication and only
to the extent reflected as a charge or reduction in the statement of such consolidated net income (or loss), the sum of interest expense, income taxes, depreciation, amortization (including
amortization of the expenses relative to the development of software that have been capitalized), goodwill impairment required by FASB 141-142 for such period, and commencing with the
fiscal quarter of Borrower ending on December 31, 2002, any non-cash adjustments to Borrower's and its Subsidiaries' consolidated gross revenue corresponding to any unamortized
prepaid lease or license fees for Borrower's conversion sales of MSC.Nastran simulation software, in each case as determined in accordance with GAAP. 

                "Extraordinary Receipts" means any cash or Cash Equivalents received by Borrower or any of its Subsidiaries not in the
ordinary course of business including (a) foreign, United States, state or local tax refunds (other than tax refunds resulting from the overpayment of estimated taxes which are received by
Borrower or any of its Subsidiaries on a date when a Default or an Event of Default has not occurred and is not continuing), (b) pension plan reversions, (c) proceeds of insurance (other
than from liability, workers' compensation, business interruption, larceny, embezzlement, or criminal misappropriation insurance policies), (d) proceeds of judgments, settlements or other
consideration of 

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any kind in connection with any cause of action, (e) proceeds of condemnation awards, (f) indemnity payments, and (g) any purchase price adjustments received in connection with
any purchase agreement. 

        (b)    Section 1.1 of the Loan Agreement is hereby amended by inserting the following new definitions in proper
alphabetical order: 

                "Second Amendment" means that certain Amendment Number Two to Loan and Security Agreement dated as of March 28, 2003,
by and between the Borrower and the Lender Group. 

                "Second Amendment Effective Date" means the date, if ever, that all of the conditions set forth in  Section 4 of the Second Amendment shall be satisfied (or waived
by Agent in its sole discretion). 

                "Second Amendment Fee" has the meaning set forth in Section 2.11(d).

        (c)    Section 2.2(c) of the Loan Agreement is hereby amended and restated in its entirety as follows: 

                "(c)
In connection with any sale or other disposition (other than Permitted Dispositions, exclusive of Permitted Dispositions under clauses (a) (exclusive of the
first $10,000 thereof in any 12 consecutive month period), (f), (g), or (h) of such definition) of any assets by Borrower or any Guarantor, Borrower shall prepay the outstanding principal
amount of the Term Loan (or, if the Term Loan has been repaid in full, such prepayment amount shall be applied to the outstanding Advances and there shall be a commensurate permanent reduction in the
amount of the Revolver Commitments and the Maximum Revolver Amount and a dollar-for-dollar permanent reserve against the Borrowing Base) in an amount equal to 100% of the Net
Cash Proceeds as and when received by such Person in connection with such sale or other disposition. In the event that Borrower offsets or recoups (x) its rights to payment from Electronic Data
Systems Corporation or any of its Subsidiaries in connection with the licensing of Borrower's MSC.Nastran simulation software to Electronic Data Systems Corporation or any of its Subsidiaries against
(y) any other amounts owed by Borrower to Electronic Data Systems Corporation or any of its Subsidiaries or other Affiliates, Borrower shall (1) give Agent ten days prior written notice
thereof, and (2) upon the effectiveness of such offset or recoupment (as applicable), immediately prepay the Term Loan (or, if the Term Loan has been repaid in full, such prepayment amount
shall be applied to the outstanding Advances and there shall be a commensurate permanent reduction in the amount of the Revolver Commitments and the Maximum Revolver Amount and a
dollar-for-dollar permanent reserve against the Borrowing Base) in an amount equal to 100% of aggregate amount of each such offset or recoupment (net of taxes and expenses
associated with such offset or recoupment (as applicable)). Nothing contained in this Section shall be deemed to permit any sale or other disposition otherwise prohibited by the terms and conditions
of this Agreement." 

        (d)    Section 2.11 of the Loan Agreement is hereby amended by deleting the word "and" at the end of  clause (b), by deleting the period at the end of clause (c) and replacing it with ", and",
and by adding the following new clause (d): 

                "(d)  Second Amendment Fee. An amendment fee in the amount of $7,500 (the "Second Amendment
Fee"), which amendment fee shall be fully earned on the Second Amendment Effective Date, shall be charged to Borrower's Loan Account on such date, and shall be payable to Agent
for the ratable benefit of the Lenders." 

        (e)    Section 6.3(b) of the Loan Agreement is hereby amended by adding the following new clause (v) at the end
thereof: 

                "(v) a
letter, from independent certified public accountants for Borrower which are reasonably acceptable to Agent, which sets forth the non-cash
adjustments to Borrower's and its Subsidiaries' consolidated gross revenue for such fiscal quarter corresponding to any unamortized prepaid lease or license fees for Borrower's MSC.Nastran simulation
software, and certifies that the calculation of such adjustments is accurate and is prepared in accordance with GAAP, and" 

2

 

        (f)    Section 6.3(c) of the Loan Agreement is hereby amended by adding the following new clause (iii) at the end
thereof: 

                "(iii) a
letter, from independent certified public accountants for Borrower which are reasonably acceptable to Agent, which sets forth the non-cash
adjustments to Borrower's and its Subsidiaries' consolidated gross revenue for such fiscal year corresponding to any unamortized prepaid lease or license fees for Borrower's MSC.Nastran simulation
software, and certifies that the calculation of such adjustments is accurate and is prepared in accordance with GAAP, and" 

3.    REPRESENTATIONS AND WARRANTIES.    Borrower hereby represents and warrants to the Lender Group as
follows: 

        (a)  It
has the requisite power and authority to execute and deliver this Amendment and to perform its obligations hereunder and under the Loan Documents to which it is a
party. The execution, delivery, and performance by it of this Amendment and the performance by it of each Loan Document to which it is a party (i) have been duly approved by all necessary
action and no other proceedings are necessary to consummate such transactions; and (ii) are not in contravention of (A) any law, rule, or regulation, or any order, judgment, decree,
writ, injunction, or award of any arbitrator, court or governmental authority binding on it, (B) the terms of its organizational documents, or (C) any provision of any contract or
undertaking to which it is a party or by which any of its properties may be bound or affected; 

        (b)  This
Amendment has been duly executed and delivered by Borrower. This Amendment and each Loan Document to which Borrower is a party is the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, and is in full force and effect except as such validity and enforceability is limited by the laws of insolvency and
bankruptcy, laws affecting creditors' rights and principles of equity applicable hereto; 

        (c)  No
injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein has
been issued and remains in force by any Governmental Authority against Borrower or any Guarantor; 

        (d)  No
Default or Event of Default has occurred and is continuing on the date hereof or as of the date of the effectiveness of this Amendment; and 

        (e)  The
representations and warranties in the Loan Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof, as
though made on such date (except to the extent that such representations and warranties relate solely to an earlier date). 

4.    CONDITIONS PRECEDENT TO THIS AMENDMENT.    The satisfaction of each of the following shall constitute
conditions precedent to the effectiveness of this Amendment and each and every provision hereof: 

        (a)  The
representations and warranties in the Loan Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though
made on such date (except to the extent that such representations and warranties relate solely to an earlier date); 

        (b)  Agent
shall have received the reaffirmation and consent of each Guarantor, attached hereto as Exhibit A, duly
executed and delivered by an authorized official of such Guarantor; 

        (c)  Agent
shall have received the Second Amendment Fee in full in immediately available funds; 

        (d)  No
Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment; and 

        (e)  No
injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall
have been issued and 

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remain in force by any Governmental Authority against Borrower, any Guarantor, or any member of the Lender Group. 

5.    CONSTRUCTION.    THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. 

6.    ENTIRE AMENDMENT; EFFECT OF AMENDMENT.    This Amendment, and terms and provisions hereof, constitute
the entire agreement among the parties pertaining to the subject matter hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Except for the
amendments to the Loan Agreement expressly set forth in Section 2 hereof, the Loan Agreement and other Loan Documents shall remain unchanged and
in full force and effect. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of any right, power, or remedy of the Lender
Group as in effect prior to the date hereof. The agreements set forth herein are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the
same are based, shall not excuse any non-compliance with the Loan Agreement, and shall not operate as a consent to any matter under the Loan Documents. To the extent any terms or
provisions of this Amendment conflict with those of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall control. This Amendment is a Loan Document. 

7.    COUNTERPARTS; TELEFACSIMILE EXECUTION.    This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed
counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this
Amendment by telefacsimile also shall deliver an original executed counterpart of this Amendment, but the failure to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment. 

8.    MISCELLANEOUS.

        (a)  Upon
the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to
the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 

        (b)  Upon
the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like import
referring to the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment. 

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        IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of the date first written above. 

	 	 	MSC.SOFTWARE CORPORATION,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	 	 	Name:	 	Louis A. Greco

	 	 	Title:	 	Chief Financial Officer

	

 	
 	
FOOTHILL CAPITAL CORPORATION,

a California corporation, as Agent
	

 	
 	

By:	
 	

/s/  NICHOL S. SHUART      

	 	 	Name:	 	Nichol S. Shuart

	 	 	Title:	 	Vice President

	

 	
 	
ABLECO FINANCE LLC,

a Delaware limited liability company, for itself and its Affiliate assigns, as Lenders
	

 	
 	

By:	
 	

/s/  KEVIN GENDY      

	 	 	Name:	 	Kevin Gendy

	 	 	Title:	 	Senior Vice President

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Exhibit A    
  

 
  REAFFIRMATION AND CONSENT    
  

        All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in that certain Loan and Security Agreement by and
among the lenders identified on the signature pages thereof (such lenders, together with their respective successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL
CORPORATION, a California corporation, as the arranger and administrative agent for the Lenders ("Agent"), and, on the other
hand, MSC.SOFTWARE CORPORATION, a Delaware corporation ("Borrower"), dated as of November 18,
2002, (as the same may be further amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement"), or in that certain
Amendment Number Two to the Loan and Security Agreement dated as of March 28, 2003 (the "Amendment"), among Borrower and Agent. The undersigned hereby (a) represent and warrant to the
Lender Group that the execution, delivery, and performance of this Reaffirmation and Consent are within its powers, have been duly authorized by all necessary action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties may be bound or affected; (b) consents to the transaction contemplated by the Amendment; (c) acknowledges
and reaffirms its obligations owing to the Lender Group under any Loan Documents to which it is a party; and (d) agrees that each of the Loan Documents to which it is a party is and shall
remain in full force and effect. Although the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands that the Lender Group has no
obligations to inform it of such matters in the future or to seek its acknowledgment or agreement to future amendments, and nothing herein shall create such a duty. Delivery of an executed counterpart
of this Reaffirmation and Consent by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Reaffirmation and Consent. Any party delivering an executed
counterpart of this Reaffirmation and Consent by telefacsimile also shall deliver an original executed counterpart of this Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the laws of the State of New York. 

[signature
page follows] 

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        IN
WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and Consent to be executed as of the date of the Amendment. 

	 	 	MSC.FLYER, LLC,

a Delaware limited liability company
	

 	
 	

By: MSC.SOFTWARE CORPORATION,

a Delaware corporation, its sole member
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	 	 	Name:	 	Louis A. Greco

	 	 	Title:	 	Chief Financial Officer

	

 	
 	
MSC INTERNATIONAL COMPANY,

a California corporation
	

 	
 	
ADVANCED ENTERPRISE SOLUTIONS, INC.,

a Delaware corporation
	

 	
 	
TYRA TECHNOLOGIES, INC.,

a California corporation
	

 	
 	
KNOWLEDGE REVOLUTION, INC.,

a California corporation
	

 	
 	
MSC.SOFTWARE, LTD.,

a company organized under the laws of Ontario
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	 	 	Name:	 	Louis A. Greco

	 	 	Title:	 	Chief Financial Officer of each of the above listed Guarantors

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AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT

W I T N E S S E T H

Exhibit A

REAFFIRMATION AND CONSENTQuickLinks
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Exhibit 10.19  

 
 

COMMON STOCK PURCHASE WARRANT
  REVISED    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 32,967 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and
nonassessable Common Stock of The MacNeal-Schwendler Corporation, a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to
time pursuant to Section 5 hereof (the "Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and
conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on May 15, 2000 and ending May 15, 2003. 

        2.    Warrant Price.

        The
Warrant Price is $11.375 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant 

1

 

representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within such 15 day period. 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

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        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and
the number of shares then purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the
address specified in Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and 

3

 

cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the
earlier of delivery thereof by hand delivery, by courier, or by standard form of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail
with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 15th day of May, 1998. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

4

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

5

 
 
 

COMMON STOCK PURCHASE WARRANT
  REVISED    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 38,216 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of The MacNeal-Schwendler
Corporation, a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the
"Warrant Price"), subject to the provisions and upon the terms and
conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on June 30, 2000 and ending June 30, 2003. 

        2.    Warrant Price.

        The
Warrant Price is $9.8125 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

6

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

7

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

8

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 30th day of June, 1998. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

9

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

10

  

 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 60,606 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of The MacNeal-Schwendler
Corporation, a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the
"Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on September 30, 2000 and ending September 30,
2003. 

        2.    Warrant Price.

        The
Warrant Price is $6.1875 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

11

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

12

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

13

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 30th day of September, 1998. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

14

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

15

 
 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 54,054 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of The MacNeal-Schwendler
Corporation, a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the
"Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on December 30, 2000 and ending December 30, 2003. 

        2.    Warrant Price.

        The
Warrant Price is $6.9375 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

16

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the
number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

17

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

18

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 30th day of December, 1998. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

19

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

20

  

 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 62,500 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of MSC.Software Corporation, a
Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the "Warrant Price"),
subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on March 31, 2001 and ending March 31, 2004. 

        2.    Warrant Price.

        The
Warrant Price is $6.0000 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

21

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

22

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

23

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 31st day of March, 1999. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

24

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

25

 
 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 64,516 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of MSC.Software Corporation, a
Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the "Warrant Price"),
subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on June 30, 2001 and ending June 30, 2004. 

        2.    Warrant Price.

        The
Warrant Price is $5.8125 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

26

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the
number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

27

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

28

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 30th day of June, 1999. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

29

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

30

  

 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to 52,632 shares (subject to adjustment from time to time pursuant to the provisions of Section 5 hereof) of fully paid and nonassessable Common Stock of MSC.Software Corporation, a
Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof (the "Warrant Price"),
subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on November 4, 2001 and ending November 4, 2004. 

        2.    Warrant Price.

        The
Warrant Price is $7.1250 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

31

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

32

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO
THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

33

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 4th day of November, 1999. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

34

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

35

 
 
 

COMMON STOCK PURCHASE WARRANT    
  

THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.  

  
 

    THE MACNEAL-SCHWENDLER CORPORATION    
  

WARRANT TO PURCHASE COMMON STOCK  

        This certifies that, for value received, Kubota Solid Technology Corporation ("KUSCO"), a Japanese corporation ("the Holder") is entitled to subscribe for and
purchase up to                        38,216 shares (subject to adjustment from time to time pursuant to the provisions of
Section 5 hereof) of fully paid and nonassessable Common Stock of
MSC.Software Corporation, a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 5 hereof
(the "Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth and callable by the Company upon the terms and conditions set forth in Section l hereof. 

        As
used herein, the term "Common Stock" shall mean the Company's presently authorized Common Stock, par value $.01 per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged. 

        1.    Term of Warrant.

        The
purchase right represented by this Warrant is exercisable, in whole or in part, at any time during a period beginning on December 30, 2001 and ending December 30, 2004. 

        2.    Warrant Price.

        The
Warrant Price is $9.8125 per share, subject to adjustment from time to time pursuant to the provisions of Section 5 hereof. 

        3.    Method of Exercise; Payment; Issuance of New Warrant.

        Subject
to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto, as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal
to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of
the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully
exercised or expired, a new Warrant representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within
such 15 day period. 

36

 

        4.    Stock Fully Paid; Reservation of Shares.

        All
Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all United States
taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant. 

        5.    Adjustment of Purchase Price and Number of Shares.

        The
kind of securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of the following events: 

                (a)    Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding
securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a Merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall
execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder
of one share of Common Stock; provided, however, that the Board of Directors of the Company may determine that, upon the occurrence of any of the following listed events, this Warrant will become
immediately exercisable, in whole or in part, on such date of occurrence and if unexercised, in whole or in part, by the Holder, will thereupon terminate: (i) a stockholder approved dissolution
or liquidation of the Company; (ii) a stockholder approved sale of substantially all of the Company's business and/or assets to a person or entity that is not a subsidiary or affiliate of the
Company; or (iii) any consolidation or merger of the Company with or into one or more entities that are not subsidiaries or other affiliates of the Company where the Company does not survive.
Any new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subparagraph
(a) shall similarly apply to successive reclassification, changes, consolidations, and mergers. 

                (b)    Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and
unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination or dividend. 

                (c)    Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to any of subparagraphs
(a) through (c) of this Section 5, the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying
the
number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter. 

        6.    Notice of Adjustments.

        Whenever
any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Company shall prepare a certificate signed by its chief financial officer setting forth, in
reasonable detail, the event 

37

 

requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then
purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in
Section 10(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 

        7.    Fractional Shares.

        No
fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefore on
the basis of the Warrant Price then in effect. 

        8.    Compliance with Securities Act.

        The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it
will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a
legend substantially in the following form: 

"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS
FURNISHED TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 

        9.    Transfer and Exchange of Warrant.

        This
Warrant is not transferable or exchangeable without the consent of the Company. 

        10.    Miscellaneous.

                (a)    No Rights as Shareholder. The Holder of this Warrant shall not be entitled to vote or receive dividends or
be deemed the Holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, merger, conveyance or other vise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

                (b)    Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at the Holder's expense, will execute and deliver, in lieu of this Warrant, a
new Warrant of like tenor. 

                (c)    Notice. Any notice given to either party under this Warrant shall be in writing, and shall be addressed as
follows, or to such other address as the party receiving such notice shall have 

38

 

previously specified to the party sending such notice. Any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form
of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid. 

	 	 	If to the Holder:
	 	 	Kubota Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN
	 	 	Attention:	 	Mr. Hironao Ichinohe

Manager of Administration
	 	 	Telephone:	 	81-3-3438-3868
	 	 	Telefax:	 	81-3-3438-3473
	

 	
 	
If to the Company:
	 	 	815 Colorado Boulevard

Los Angeles, CA 90041-1777
	 	 	Attention:	 	Louis A. Greco

Chief Financial Officer
	 	 	Telephone:	 	(213) 259-3841
	 	 	Telefax:	 	(213) 259-4969

                (d)    Governing Law. This Warrant shall be governed and construed
under the laws of the
State of California. 

        This
Warrant is executed as of this 30th day of December, 1999. 

	 	 	THE MACNEAL-SCHWENDLER CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      

	

 	
 	

Name:	
 	

Louis A. Greco

	

 	
 	

Title:	
 	

Chief Financial Officer

39

 
 
 

EXHIBIT 1    
  

 
  NOTICE OF EXERCISE    
  

TO:    THE MACNEAL-SCHWENDLER CORPORATION  

        1.    The
undersigned hereby elects to purchase                        shares of Common Stock of The MacNeal-Schwendler Corporation pursuant
to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full. 

        2.    Please
issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: 

Kubota
Solid Technology Corporation ("KUSCO")

1-7 Higashishinbasi-2 chome

Minato-ku,

Tokyo 105-0021 JAPAN 

        3.    The
undersigned represents that the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. 

	 	 	Kubota Solid Technology Corporation ("KUSCO")
	

 	
 	

 
	 	 	
 (Signature of Holder)

40

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