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EXHIBIT 4.2
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE TRANSFERABILITY OF THIS WARRANT IS
RESTRICTED AS PROVIDED IN SECTION 2
Warrant No.__ ________, 1998
BITWISE DESIGNS, INC.
COMMON STOCK PURCHASE WARRANT
For good and valuable consideration, the receipt of which is hereby
acknowledged by BITWISE DESIGNS, INC., a Delaware corporation (the "Company"),
______________ is hereby granted the right to purchase, at any time from the
date hereof until 5:00 P.M., New York City time, on _________, 2002, up to
________ paid and non-assessable shares of the Company's Common Stock, $.00l par
value per share ("Common Stock").
This Warrant is exercisable at a per share price of $_____ (the "Exercise
Price") payable in cash or by certified or official bank check in New York
Clearing House funds, subject to adjustment as provided in Section l hereof.
Upon surrender of this Warrant with the annexed Subscription Form duly executed,
together with payment of the Exercise Price for the shares of Common Stock
purchased at the Company's principal executive offices (presently located at
Building 00, Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, N.Y. 12306) the registered
holder of the Warrant ("holder") shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased.
l. Exercise of Warrant.
1.l The purchase rights represented by this Warrant are exercisable at the
option of the holder hereof, in whole or in part (but not as to fractional
shares of the Common Stock) during any period in which this Warrant may be
exercised as set forth above. In the case of the purchase of less than all the
shares of Common
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Stock purchasable under this Warrant, the Company shall cancel this Warrant upon
the surrender thereof and shall execute and deliver a new Warrant of like tenor
for the balance of the shares of Common Stock purchasable hereunder.
l.2 The issuance of certificates for shares of Common Stock upon the
exercise of this Warrant shall be made without charge to the holder hereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall be issued in the name of, or in
such names as may be directed by, the holder hereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of such certificate in a name
other than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
1.3 In case at any time or from time to time the Company shall subdivide as
a whole, split its Common Stock or issue a dividend payable in shares or
otherwise, the number of shares of Common Stock then outstanding into a greater
or lesser number of shares, the Warrant Price then in effect shall be increased
or reduced proportionately, and the number of shares issuable upon exercise of
this Warrant shall accordingly be increased or reduced proportionately.
l.4 In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of this Warrant (other than change in par
value, or from par value to no par value, or from no par value to par value, or
as a result or a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common Stock, other than a
change in number of the shares issuable upon exercise of the Warrant) or in case
of any sale or conveyance to another corporation of the property of the Company
as an entirety or substantially as an entirety, the holder of this Warrant shall
have the right thereafter to exercise this Warrant into the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock of the Company for which the
Warrant might have been exercised immediately prior to such reclassification,
change, consolidation, merger, sale or
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conveyance. The above provisions of this Section l.4 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
1.5 The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon exercise of this Warrant as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of this Warrant. The
Company covenants that all shares of Common Stock which shall be so issuable
shall be duly and validly issued and fully-paid and non-assessable.
2. Restrictions on Transfer.
The holder acknowledges that he has been advised by the Company that this
Warrant and the shares of Common Stock (the "Warrant Shares") issuable upon
exercise thereof (collectively the "Securities") have not been registered under
the Securities Act of l933, as amended (the "Securities Act"), that the Warrant
is being issued, and the shares issuable upon exercise of the Warrant will be
issued, on the basis of the statutory exemption provided by section 4(2) of the
Securities Act relating to transactions by an issuer not involving any public
offering, and that the Company's reliance upon this statutory exemption is based
in part upon the representations made by the holder contained herein. The holder
acknowledges that he has been informed by the Company of, or is otherwise
familiar with, the nature of the limitations imposed by the Securities Act and
the rules and regulations thereunder on the transfer of securities. In
particular, the holder agrees that no sale, assignment or transfer of the
Securities shall be valid or effective, and the Company shall not be required to
give any effect to any such sale, assignment or transfer, unless (i) the sale,
assignment or transfer of the Securities is registered under the Securities Act,
and the Company has no obligations or intention to so register the Securities
except as may otherwise be provided herein, or (ii) the Securities are sold,
assigned or transferred in accordance with all the requirements and limitations
of Rule l44 under the Securities Act or such sale, assignment, or transfer is
otherwise exempt from registration under the Securities Act. The holder
represents and warrants that he has acquired this Warrant and will acquire the
Securities for his own account for investment and not with a view to the sale or
distribution thereof or the granting of any participation therein, and that he
has no present intention of distributing or selling to others any of such
interest or granting any participation therein. The holder acknowledges that the
securities shall bear the following legend:
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"These securities have not been registered under the Securities Act of
l933. Such securities may not be sold or offered for sale, transferred,
hypothecated or otherwise assigned in the absence of an effective
registration statement with respect thereto under such Act or an opinion of
counsel to the Company that an exemption from registration for such sale,
offer, transfer, hypothecation or other assignment is available under such
Act."
3. Registration Rights.
3.1 The Company shall advise the holder of this Warrant or of the Warrant
Shares or any then holder of Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written notice at least four
weeks prior to the filing of any registration statement under the Securities Act
of l933 (the "Act") covering securities of the Company, except on Forms S-4 or
S-8, and upon the request of any such holder within ten days after the date of
such invoice, include in any such registration statement such information as may
be required to permit a public offering of the Warrant Shares. The Company shall
supply prospectuses and other documents as the holder may reasonably request in
order to facilitate the public sale or other disposition of the Warrant Shares,
qualify the Warrant Shares for sale in such states as any such holder reasonably
designates and do any and all other acts and things which may be necessary or
desirable to enable such Holders to consummate the public sale or other
disposition of the Warrant Shares, and furnish indemnification in the manner as
set forth in Subsection 3.2 of this Section 3. Such holders shall furnish
information and indemnification as set forth in Subsection 3.2 of this Section
3. For the purpose of the foregoing, inclusion of the Warrant Shares in a
Registration Statement pursuant to this sub-paragraph 3.l under a condition that
the offer and/or sale of such Warrant Shares not commence until a date not to
exceed 90 days from the effective date of such registration statement shall be
deemed to be in compliance with this sub-paragraph 3.l.
3.2 The following provisions of this Section 3 shall also be applicable to
the exercise of the registration rights granted under this Section 3.l:
(A) The foregoing registration rights shall be contingent on the
holders furnishing the Company with such
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appropriate information (relating to the intentions of such holders) as the
Company shall reasonably request in writing. Following the effective date of
such registration, the Company shall upon the request of any owner of Warrants
and/or Warrant Shares forthwith supply such number of prospectuses meeting the
requirements of the Act as shall be requested by such owner to permit such
holder to make a public offering of all Warrant Shares from time to time offered
or sold to such holder, provided that such holder shall from time to time
furnish the Company with such appropriate information (relating to the
intentions of such holder) as the Company shall request in writing. The Company
shall also use its best efforts to qualify the Warrant Shares for sale in such
states as such holder shall reasonably designate.
(B) The Company shall bear the entire cost and expense of any registration
of securities initiated by it under Subsection 3.l of this Section 3
notwithstanding that Warrant Shares subject to this Warrant may be included in
any such registration. Any holder whose Warrant Shares are included in any such
registration statement pursuant to this Section 3 shall, however, bear the fees
of his own counsel and any registration fees, transfer taxes or underwriting
discounts or commissions applicable to the Warrant Shares sold by him pursuant
thereto.
(C) The Company shall indemnify and hold harmless each such holder and each
underwriter, within the meaning of the Act, who may purchase from or sell for
any such holder any Warrant Shares from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereto or any registration statement under the Act or
any prospectus included therein required to be filed or furnished by reason of
this Section 3 or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or alleged untrue statement
or omission or alleged omission based upon information furnished or required to
be furnished in writing to the Company by such holder or underwriter expressly
for use therein, which indemnification shall include each person, if any, who
controls any such underwriter within the meaning of such Act; provided, however,
that the Company shall not be obliged so to indemnify any such holder or
underwriter or controlling person unless such holder or underwriter shall at the
same time agree to indemnify the Company, its directors, each officer signing
the related registration statement and each person, if any, who controls the
Company within the meaning of such Act,
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from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained in
any registration statement or any prospectus required to be filed or furnished
by reason of this Section 3 or caused by any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or alleged untrue statement or omission based
upon information furnished in writing to the Company by any such holder or
underwriter expressly for use therein.
4. Miscellaneous.
4.l All the covenants and agreements made by the Company in this Warrant
shall bind its successors and assigns.
4.2 No recourse shall be had for any claim based hereon or otherwise in any
manner in respect hereof, against any incorporator, stockholder, officer or
director, past, present or future, of the Company or of any predecessor
corporation, whether by virtue of any constitutional provision or statute or
rule of law, or by the enforcement of any assessment or penalty or in any other
manner, all such liability being expressly waived and released by the acceptance
hereof and as part of the consideration for the issue hereof.
4.3 No course of dealing between the Company and the holder hereof shall
operate as a waiver of any right of any holder hereof, and no delay on the part
of the holder in exercising any right hereunder shall so operate.
4.4 This Warrant may be amended only by a written instrument executed by
the Company and the holder hereof. Any amendment shall be endorsed upon this
Warrant, and all future holders shall be bound thereby.
4.5 All communications provided for herein shall be sent, except as may be
otherwise specifically provided, by registered or certified mail: if to the
holder of this Warrant, to the address shown on the books of the Company; and if
to the Company, to Technology Center, Rotterdam Industrial Park, Schenectady,
N.Y. 12306, attention: Office of the President, or to such other address as the
Company may advise the holder of this Warrant in writing. Notices shall be
deemed given when mailed.
4.6 The provisions of this Warrant shall in all respects be constructed
according to, and the rights and liabilities of the
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parties hereto shall in all respects be governed by, the laws of the State of
Delaware. This Warrant shall be deemed a contract made under the laws of the
State of Delaware and the validity of this Warrant and all rights and
liabilities hereunder shall be determined under the laws of said State.
4.7 The headings of the Sections of this Warrant are inserted for
convenience only and shall not be deemed to constitute a part of this Warrant.
IN WITNESS WHEREOF, BITWISE DESIGNS, INC. has caused this Warrant to be
executed in its corporate name by its officer, and its seal to be affixed
hereto.
Dated: _________, 1998
Schenectady, N.Y.
BITWISE DESIGNS, INC.
By:
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Xxxx X. Xxxxx
Chairman of the Board
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SUBSCRIPTION FORM
TO: BITWISE DESIGNS, INC.
Technology Center
Rotterdam Industrial Park
Schenectady, NY 12306
The undersigned holder hereby irrevocably elects to exercise the right to
purchase shares of Common Stock covered by this Warrant according to the
conditions hereof and herewith makes full payment of the Exercise Price of such
shares.
Kindly deliver to the undersigned a certificate representing the Shares.
INSTRUCTIONS FOR DELIVERY
Name:
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(please typewrite or print in block letters)
Address:
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Dated:
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Signature
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