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EXHIBIT 10.25
ANNEX I
WARRANT AGENCY AGREEMENT
Dated as of August 8, 1997
BITWISE DESIGNS, INC.
AND
BANCA DEL GOTTARDO
as Standing Agent
WARRANT AGENCY AGREEMENT dated as of August 8, 1997 between BITWISE DESIGNS,
INC., a Delaware corporation (the "Company\-"), and Banca del Gottardo of
Lugano, Switzerland, as Warrant Agent (the "Warrant Agent") and as Standing
Agent (the "Standing Agent").
WITNESSETH:
WHEREAS, the Company proposed to issue Warrants as hereinafter described (the
"Warrants") (the certificate representing the Warrants being referred to herein
as the "Warrant Certificate"), in connection with the sale by the Company to
issue USD 4'000'000.-- principal amount of 8% Convertible Notes due August 11,
2002 (the "Notes"), one warrant entitling to acquire against consideration
initially one share of Common Stock par value of USD 0.001 per Share of the
Company (the "Common Stock").
WHEREAS, the Board of Directors of the Company has duly authorized the issuance
of the Warrants and the shares issuable upon exercise thereof;
WHEREAS, the Company desires to provide for the issuance of the Warrants and to
provide herein for certain terms and provisions of the Warrants more fully then
is set forth in the Warrants Certificate, and
WHEREAS, the Company desires the Standing Agent and the Warrants Agent to act on
behalf of the Company, and the Standing Agent and the Warrant Agent are willing
so to act, in connection with the issuance of Warrants and other matters as
provided herein;
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the Warrant Certificate and the respective rights and
obligations thereunder of the Company, the holders of the Warrants and the
Standing Agent and Warrant Agent, the parties hereto agree as follows:
SECTION 1
Definitions
In addition to the definitions set forth elsewhere herein. as used herein:
"Deposit Date" shall have the meaning assigned to it in the Terms of Warrants,
as appropriate.
"Holder" shall mean the person depositing the Warrant Certificate with the
Warrant Certificate with the Warrant Agent or Sub-Warrant Agent pursuant to
Section 4.
"Termination Date" shall mean 12.00 Noon. Lugano Time, August 11, 2002.
"Terms of Warrants" shall refer to Annex E of the Note and Warrant Purchase,
Paying and Conversion/Exercise Agency Agreement dated August 8, 1997 made by and
between the Company and Banca del Gottardo.
SECTION 2
Appointment of Standing Agent and Warrant Agent
The Company hereby appoints the Standing Agent and the Warrant Agent to act as
agents for the Company in accordance with the instructions set forth hereinafter
in this Agreement, and the Standing Agent and Warrants Agent hereby accept such
appointments, upon the terms and conditions hereinafter set forth. The Company
may at any time send a representative to count the securities before they are
delivered to investors.
SECTION 3
Number, Form and Execution of Warrant Certificates
The number of Warrant Certificates is limited in each case to 400'000. The
Warrant Certificate shall be in bearer form substantially in the form of Annex F
of the Note and Warrant Purchase. Paying and Conversion/Exercise Agency
Agreement dated August 8, 1997 made by and between the Company and Banca del
Gottardo (the provisions of which are hereby incorporated herein) and may have
such letters, numbers or other marks of
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identification or designation, and such legends, summaries or endorsements,
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto.
The Warrant Certificate shall be signed on behalf of the Company by its
President or a Vice President and by its Secretary or an Assistant Secretary.
Each such signature upon the Warrant Certificate may be in the form of a
facsimile signature of the President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificate. The Company, the Standing Agent and the Warrant Agent may deem and
treat the Holder(s) of the Warrants as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereto any distribution to the
Holder(s) thereof, and for all other purpose, and neither the Company, the
Standing Agent nor the Warrant Agent shall be affected by any notice to the
contrary.
SECTION 4
Exercise; No Fractional Shares
(a) The provisions of Sections 3 and 7 of the Terms of the Warrants are
incorporated herein.
(b) On the Deposit Date, the Warrant Agent shall give notice of the
individual exercise of the Warrants in the form as annexed hereto as
Exhibit 2 to the Standing Agent.
(c) Upon surrender of a Warrant Certificate, and payment of the Exercise
Price, the Standing Agent shall thereupon (i) transfer the Exercise
Price to the Company according to the Company 5 standing instructions,
(ii) promptly requisition. from the transfer agent of the Common Stock
of the Company, one or more certificates for the number of shares to be
purchased, and (iii) promptly after receipt of such certificate or
certificates for shares, cause the same to be delivered in accordance
with the instructions of the Holder of such Warrant Certificate
together with a check in payment for any fraction of a share. The
Company irrevocably authorizes the Standing Agent to make all such
requests for shares and the transfer agent or transfer agents for the
Common Stock of the Company to comply with all such requests.
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SECTION 5
Authorization; Reservation of Shares; Listing; Reports to Warrantholders, etc.
The provisions of Section 4 of the Terms of Warrants are incorporated herein.
SECTION 6
Loss or Mutilation
The provisions of Section II of the Terms of Warrants are incorporated herein.
SECTION 7
Adjustment of Exercise Price and Number of Share Deliverable
The provisions of Section 5 of the Terms of Warrants are incorporated herein.
SECTION 8
Concerning the Standing Agent and the Warrant Agent
1. The Standing Agent and the Warrant Agent act hereunder solely as agents
for the Company and each of its shall be determined solely by the provisions
hereof. The Standing Agent and the by delivering Warrant Agent shall not. g the
Warrant Certificate or by any other act hereunder, be deemed to make any
representations as to the validity. of this Warrant Agency Agreement (except its
valid execution) or the validity. or value or authorization of the Warrant
Certificate or Warrants represented thereby or of any shares or other property
delivered upon exercise of any Warrants or whether any such shares or other
shares are fully paid and non-assessable. The Standing Agent and the Warrant
Agent shall not at any time be under any duty or responsibility to any Holder of
the Warrants to make or cause to be made any adjustment of the Exercise Price or
any adjustment to the number of shares of Common Stock issuable upon exercise of
the Warrants provided in this Agreement. or to determine whether any fact exists
which may require any such adjustment. or with respect to the nature or extent
of any such adjustment, when made, or with respect to the method employed in
making the same Each shall not (i) be liable for the correctness of any recital
or statement of fact contained herein or in the Warrant Certificate or for any
action taken, suffered, or omitted by them in reliance on any Warrant
Certificate or other document or instrument believed by them in good faith to be
genuine and to have been signed, sent or presented by the proper party or
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parties. (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificate. or (iii) be liable for any act or omission in
connection with this Agreement except for their own negligence or wilful
misconduct
2. The Standing Agent or the Warrant Agent may at any time consult with
counsel satisfactory to them (who may be counsel to the Company) and shall incur
no liability or responsibility to the Company or to any Holder of any Warrant or
any other person or corporation for any action taken. suffered or omitted by
them in good faith in accordance with the opinion or advice of such counsel.
3. Any notice, statement. instruction. request. direction, order, election
or demand of the Company shall be sufficiently. evidenced by an instrument
signed by its President, any of its Vice Presidents, its Secretary, any of its
Assistant Secretaries or its Treasurer (unless other evidence in respect thereof
is herein specifically prescribed). The Standing Agent or the Warrant Agent
shall not be liable for any action taken. suffered or omitted by them in
accordance with such notice, statement, instruction. request, direction. order
or demand believed b the Standing Agent or Warrant Agent to be genuine and to
have been signed. sent or presented by the proper party or parties.
4. The Company agrees to pay the Standing Agent and the Warrant Agent
reasonable compensation for each of its services hereunder and to reimburse it
for all expenses (e.g. telex, cable, postage, telephone, etc.), including
counsel fees, taxes and governmental charges and other charges of any kind and
nature. incurred by the Standing Agent and the Warrant Agent. In consideration
for the services rendered by the Warrant Agent. the Company undertakes to pay
upon demand to the Warrant Agent in USD a commission which is USD -.10 for each
Common Stock Warrant exercised.
5. The Company further agrees to indemnity the Standing Agent or the
Warrant Agent and save each of them harmless against any and all losses.
expenses and liabilities, including judgments. costs and counsel fees, for any
thing done or omitted by the Standing Agent or Warrant Agent in the execution of
their duties and powers hereunder, except losses, expenses and liabilities
arising as a result of the Standing Agent's or the Warrant Agent's negligence or
willful misconduct. The Company will not be liable for any Swiss taxes that may
be payable for or in respect of the deposit or surrender of the Warrants. or the
issue and delivery of shares or the surrender of the Warrants.
6. Neither Banca del Gottardo nor the Warrantholders shall have any
obligation to pay to the Standing Agent and Stock Transfer Agent any commission,
fees. costs or charges in connection vith
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the exercise of Warrants and the making available of the respective Shares as
provided hereafter.
7. The Standing Agent or the Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Standing Agent's ovn negligence or willful
misconduct). after giving thirty days' prior written notice to the Company. At
least fifteen days prior to the date such resignation is to become effective,
the Standing Agent or the Warrant Agent shall cause a copy of such notice of
resignation to be published in the manner set forth in Section 10. Upon such
resignation, the Company shall appoint in writing a new Standing Agent or
Warrant Agent and if the Company shall fail to make - 80 - such appointment
within a period of thirty days after it has notified in writing of such
resignation by the resigning Standing Agent or Warrant Agent. then the Holders
of any Warrant may apply to any court of competent jurisdiction for the
appointment of such successor Standing Agent or Warrant Agent and if such
successor Standing Agent or the Warrant Agent shall be carried out by the
Company pending such appointment.
After acceptance in writing of such appointment by the successor Standing Agent
or Warrant Agent is received by the Company. such successor Standing Agent or
Warrant Agent shall be vested with the same powers, rights. duties and
responsibilities
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as if it had been originally named herein as the Standing Agent or the Warrant
Agent, without any further assurance, conveyance, act or deed. Not later than
the effective date of any such appointment the Company shall file notice thereof
with the resigning Standing Agent or Warrant Agent and shall cause a copy of
such notice to be published in the manner set forth in Section 10. Any
corporation into which the Standing Agent or the Warrant Agent or any successor
Standing Agent or Warrant Agent may be converted or merged or any corporation
resulting from any consolidation succeeding to the corporate trust business of
the Standing Agent or the Warrant Agent, shall be a successor Standing Agent or
Warrant Agent under this Agreement without any further act. Any such successor
Standing Agent or Warrant Agent shall promptly cause notice of its succession as
Standing Agent or Warrant Agent to be mailed to the Company and notice published
in the manner set forth in Section 10.
The Warrant Agent, its subsidiaries and affiliates. and any of its officers,
directors, stockholders, or employees may buy and hold or sell Warrants or other
securities of the Company and otherwise deal \ith the Company in the same
manner and to the same extent and with like effect as though it were not Warrant
Agent. Nothing herein shall preclude the Standing Agent or the Warrant Agent
from acting in any other capacity for the Company or for any other legal entity.
SECTION 9
Modification of Agreement
The Standing Agent, the Warrant Agent and the Company may, by supplemental
agreement, make any changes or corrections in this Agreement that they shall
deem appropriate to cure any ambiguity or to correct any defective or
inconsistent provisions or manifest mistake or error herein contained.
SECTION 10
Notices
The provisions of Section 12 of the Terms of Warrants are incorporated herein.
SECTION 11
Governing Law
The provisions of Section 13 of the Terms of Warrants are
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incorporated herein.
SECTION 12
Persons Benefiting
This Agreement shall be binding upon and inure to the benefit of the Company,
the Standing Agent, the Warrant Agent and their respective successor and
assigns, and. to the extent that the provisions hereof are incorporated in the
Warrants by the terms thereof, shall be binding upon and shall inure to the
benefit of the Holders form time to time of the Warrants, and their respective
successor and assigns. Nothing in this Agreement is intended or shall be
construed to confer upon any other person or corporation any legal or equitable
remedy, or claim or to impose upon any other persons any duty, liability or
obligation.
SECTION 13
Notices
All notices required under this Agreement shall be deemed to have been duly
given if sent by cable, telex or facsimile transmission (confirmed in writing,
sent by registered airmail) to the following addresses:
If to the Company:
BITWISE DESIGNS, INC
Xxxxxxxx 00, Xxxxxxxxx Xxxxxxxxxx Xxxx
Duanesburg Rd., Route 7
Schenectady, N.Y. 12306. U.S.A.
Attention: Chief Financial Officer
Facsimile: (000) 000 0000
If to the Warrant Agent and to the Standing Agent:
BANCA DEL GOTTARDO
Xxxxx Xxxxxxx Xxxxxxxxx 0
0000 Xxxxxx, Xxxxxxxxxxx
Attention: New Issue Department
Telex: 841 052
Facsimile: 01141918081843
or to such other address as at the party receiving the notice shall xxxx
notified to the other party in writing. Such cable,
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telex or facsimile transmission notice shall be deemed to have been duly given
at the time of dispatch. Any party receiving a notice by cable, telex or
facsimile transmission will be protected by relying upon the cabled, telexed or
transmitted notice even though such notice is not subsequently confirmed in
writing.
SECTION 14
Descriptive Headings
The descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
SECTION 15
Termination
This Agreement shall terminate on the Termination Date of Warrants. subject to
completion of actions taken on or prior thereto pursuant to this Agreement, or
on any earlier date if all the Warrants have been exercised.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
BITWISE DESIGNS, INC.
By: ________________________
Its: _________________________
BANCA DEL GOTTARDO
As Warrant Agent and Standing Agent
By: _________________________
Its: ___________________________
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