Document:

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                                                                    Exhibit 4.10

 THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii) UPON THE DELIVERY BY THE
HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO
COUNSEL FOR THE COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT IS AVAILABLE.

                           EXERCISABLE ON OR BEFORE
                  5:00 P.M., NEW YORK TIME, December 3, 2002

No. ___                                                        ________ Warrants

                             BITWISE DESIGNS, INC.

                         COMMON STOCK PURCHASE WARRANT
      This warrant certificate (the "Warrant Certificate") certifies that
____________________, or registered assigns, is the registered holder of
warrants to purchase up to _______ fully-paid and non-assessable shares, subject
to adjustment in accordance with Article 6 hereof (the "Warrant Shares"), of the
common stock (the "Common Stock"), par value $.001 per share, of BITWISE
DESIGNS, INC., a Delaware corporation (the "Company"), subject to the terms and
conditions set forth herein. The warrants represented by this Warrant
Certificate and any warrants resulting from a transfer or subdivision of the
warrants represented by this Warrant Certificate shall sometimes hereinafter be
referred to, individually, as a "Warrant" and, collectively, as the "Warrants."

      1.    Exercise Period; Exercise Price; Exercise of Warrants.

      1.1. Exercise Period. Each Warrant is exercisable at any time commencing
on the date hereof (the "Exercise Date") until 5:00 P.M. New York City time on
December 3, 2002 (the "Expiration Date").

      1.2. Initial and Adjusted Exercise Price. Each Warrant is initially
exercisable to purchase one Warrant Share at an initial exercise price equal to
$_______ per share, subject to adjustment to prevent dilution. The adjusted
exercise price shall be the price which shall result from time to time from any
and all adjustments of the initial exercise price in accordance with the
provisions of Section 6 hereof. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.

      1.3. Method of Exercise. The rights represented by this Warrant are
exercisable upon the terms and conditions set forth herein at the option of the
Holder in whole at any time and in part from time to time. The Exercise Price
shall be payable in cash, by wire transfer or by certified check to the order of
the Company, or any combination of cash, wire transfer or certified check. Upon
surrender of this Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Warrant Shares

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purchased, at the Company's principal offices, 2165 Technology Drive,
Schenectady, New York 12308 the registered holder of the Warrant Certificate
("Holder" or "Holders") shall be entitled to receive a certificate or
certificates for the Warrant Shares so purchased. The purchase rights
represented by this Warrant Certificate are exercisable at the option of the
Holder hereof, in whole or in part (but not as to fractional shares of Common
Stock). In the case of the purchase of less than all the Warrant Shares
purchasable under this Warrant Certificate, the Company shall cancel this
Warrant Certificate upon the surrender thereof and shall execute and deliver a
new Warrant Certificate of like tenor for the balance of the Warrant Shares
purchasable hereunder.

      2. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for the Warrant Shares purchased pursuant to such
exercise shall be made forthwith (and in any event within seven business days
thereafter) without charge to the Holder thereof including, without limitation,
any tax which may be payable in respect of the initial issuance thereof, and
such certificates shall (subject to the provisions of Article 3 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; 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 any such certificates 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 and shall have
established to the satisfaction of the Company that such transfer is in
compliance with all applicable securities laws.

      The Warrant Certificates and, upon exercise of the Warrants, the
certificates representing the Warrant Shares shall be executed on behalf of the
Company by the manual or facsimile signature of those officers required to sign
such certificates under applicable law.

      3. Restriction on Transfer of Warrants.

      3.1. Agreement that Warrant Acquired for Investment. The Holder of this
Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Warrants and the Warrant Shares issuable upon exercise of the Warrants are being
acquired as an investment and not with a view to the distribution thereof and
that the Holder has no present intention of distributing or selling to others
any of such interest or granting any participation therein. The Holder also
understands that neither the Warrants nor the Warrant Shares have been
registered under the Securities Act of 1933, as amended (the "Act"). The Holder
further acknowledges 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.

      Neither this Warrant nor any Warrant Share may be offered for sale or
sold, or otherwise transferred or disposed of in any transaction which would
constitute a sale thereof within the meaning of the Act, unless (i) such
security has been registered for sale under the Act and registered or qualified
under applicable state securities laws relating to the offer and sale of
securities, or (ii) exemptions from the registration requirements of the Act and
the registration or qualification requirements of all such state securities laws
are available and the Company shall have received an opinion of counsel
satisfactory to the Company that the proposed sale or other disposition of such

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securities may be effected without registration under the Act and would not
result in any violation of any applicable state securities laws, such counsel
and such opinion to be reasonably satisfactory to the Company.

      3.2. Legend Requirement. This Warrant Certificate and, upon exercise of
the Warrants, in part or in whole, certificates representing the Warrant Shares
shall bear a legend substantially similar to the following:

            "The securities represented by this certificate have not been
            registered under the Securities Act of 1933, as amended ("Act"), and
            may not be offered or sold except (i) pursuant to an effective
            registration statement under the Act or (ii) upon the delivery by
            the holder to the Company of an opinion of counsel, reasonably
            satisfactory to counsel to the Company, stating that an exemption
            from registration under such Act is available."

      4.    Registration Rights.

      4.1. Piggyback Registration Rights. 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 30 days prior to the filing by the Company with the
Securities and Exchange Commission of any registration statement under the
Securities Act of 1933 (the "Act") covering securities of the Company, except on
Forms S-4 or S-8 (or similar successor form), 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 such number of
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 4.3 of this Section 4. Such Holders shall furnish
information and indemnification as set forth in Subsection 4.3 of this Section
4. For the purpose of the foregoing, inclusion of the Warrant Shares by the
Holder in a Registration Statement pursuant to this sub-paragraph 4.1 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 4.1.

      4.2. Demand Registration Rights. At any time during the three-year period
that this Warrant Certificate is exercisable, the Holder shall have the right
(which right is in addition to the piggyback registration rights provided for
under Section 4.1 above), exercisable by written notice to the Company (the
"Demand Registration Request"), to have the Company prepare and file with the
SEC on one occasion, at the sole expense of the Holder, a Registration Statement
on Form S-1 or such other appropriate form (the "Demand Registration Statement")
and such other documents, including a prospectus, as may be necessary (in the
opinion of both counsel for the Company and counsel for such Holder), in order
to comply with the provisions of the Act, so as to permit the public trading of
the Warrant Shares pursuant thereto.

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      Once effective, the Company covenants and agrees to use its best efforts
to maintain the effectiveness of the Demand Registration Statement until the
earlier of (i) the date that all of the Warrant Shares have been sold pursuant
to a Registration Statement or Rule 144 of the General Rules and Regulations
promulgated under the Act ("Rule 144"), or (ii) the date that the Holder(s) of
the Warrant Shares receive an opinion of counsel to the Company that all of the
Warrant Shares may be freely traded (without limitation or restriction as to
quantity or timing and without registration under the Act) pursuant to Rule 144
or otherwise, except that, the Company may suspend the use of the Demand
Registration Statement for a period not to exceed 45 days in any 12- month
period for valid business reasons (not including avoidance of the Company's
obligations hereunder), including the acquisition or divestiture of assets,
public filings with the SEC, pending corporate developments and similar events.

          4.3. The following provisions of this Section 4 shall also be
applicable to the exercise of the registration rights granted under Sections 4.1
and 4.2:

             (a) The foregoing registration rights shall be contingent on the
Holders furnishing the Company with such 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 4.1 of this Section
4 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 4 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, if any, 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

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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, 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 4 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.

      (d) Subsequent to any registration of the Warrant Shares, the Holder
agrees that it will not publicly sell any of the Warrant Shares until June 6,
2000, at which time it shall be entitled to sell up to 50% of the Warrant
Shares. The Holder may publicly sell the balance of the Warrant Shares after
December 6, 2000.

      (e) The Company may withdraw any registration statement filed pursuant to
Section 4.1 or 4.2 at any time.

      5. Adjustments of Exercise Price and Number of Warrant Shares.

      5.1. Dividends and Distributions. In case the Company shall at any time
after the date hereof pay a dividend in Common Stock or make a distribution in
Common Stock, then upon such dividend or distribution, the Exercise Price in
effect immediately prior to such dividend or distribution shall be reduced to a
price determined by dividing an amount equal to the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution
multiplied by the Exercise Price in effect immediately prior to such dividend or
distribution, by the total number of shares of Common Stock outstanding
immediately after such issuance or sale. No adjustments shall be made for any
cash dividends on shares issuable upon exercise of the Warrants. For purposes of
any computation to be made in accordance with the provisions of this Section
5.1, the shares of Common Stock issuable by way of dividend or distribution
shall be deemed to have been issued immediately after the opening of business on
the date following the date fixed for determination of stockholders entitled to
receive such dividend or distribution.

      5.2. Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding Common Stock, the Exercise Price shall
forthwith be proportionately decreased on the effective date of any subdivision
or increased on the effective date of any combination.

      5.3. Reclassification, Consolidation, Merger. etc. In case of any
reclassification or change of the outstanding Common Stock (other than a change
in 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 the case of any consolidation of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Common Stock, except a change as a result of a subdivision or combination of
such shares or a change in nominal value, as aforesaid), or in the case of a
sale or conveyance to another corporation of the property of the Company as an
entirety, the Holder shall thereafter have the right to purchase the kind and
number of shares of stock and

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other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder were the owner of the
Warrant Shares issuable upon exercise of the Warrants immediately prior to any
such events at a price equal to the product of (x) the number of Warrant Shares
issuable upon exercise of the Warrants and (y) the Exercise Price in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holder had exercised the
Warrants.

      5.4. Determination of Outstanding Shares. The number of the shares of
Common Stock at any one time outstanding shall include the aggregate number of
shares issued or issuable upon the exercise of outstanding options, rights,
warrants and upon the conversion or exchange of outstanding convertible or
exchangeable securities.

      5.5 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price of the Warrants, pursuant to the provisions of this Section 6,
the number of shares issuable upon the exercise of the Warrants shall be
adjusted to the nearest full amount by multiplying a number equal to the
exercise prices in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon exercise of the Warrants immediately prior
to such adjustment and dividing the product so obtained by the adjusted Exercise
Prices.

      6. Exchange and Replacement of Warrant Certificates. This Warrant
Certificate is exchangeable without expense, upon the surrender hereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.

            Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu thereof and any such lost, stolen, destroyed or mutilated warrant shall
thereupon become void.

      7. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of the shares of Common Stock and
shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up or down to the nearest whole
number of shares of Common Stock.

      8. Reservation of Shares. The Company covenants and agrees that it will at
all times reserve and keep available out of its authorized share capital, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall be equal to the number of Warrant Shares
issuable upon the exercise of the then outstanding Warrants, for issuance upon
such exercise, and that, upon exercise of the Warrants and payment of the
Exercise Price therefor, all Warrant Shares issuable upon issuance in accordance
with the terms hereof shall be duly and validly issued, fully paid,
nonassessable and not subject to the preemptive rights of any stockholder.

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      9. Rights of Warrant Holders. Nothing contained in this Agreement shall be
construed as conferring upon the Holder any rights whatsoever as a stockholder
of the Company, either at law or in equity, including without limitation, or
Holders the right to vote or to consent or to receive notice as a stockholder in
respect of any meetings of stockholders for the election of directors the right
to receive dividends or any other matter. Notwithstanding the foregoing, if at
any time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:

            (a) The Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or distribution
payable otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or

            (b) The Company shall offer to all the holders of its Common Stock
any additional Common Stock or other shares of capital stock of the Company or
securities convertible into or exchangeable for Common Stock or other shares of
capital stock of the Company, or any option, right or warrant to subscribe
therefor; or

            (c) A dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; or

            (d) Reclassification or change of the outstanding Common Stock
(other than a change in par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), consolidation of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Common Stock, except a change as a result of a subdivision or combination of
such shares or a change in par value, as aforesaid), or a sale or conveyance to
another corporation of the property of the Company as an entirety is proposed;
or

            (e) The Company or an affiliate of the Company shall propose to
issue any rights to subscribe for Common Stock or any other securities of the
Company or of such affiliate to all the stockholders of the Company; then, in
any one or more of said events, the Company shall give written notice of such
event at least fifteen (15) days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, convertible or exchangeable securities
or subscription rights, options or warrants, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend or distribution, or the issuance of any convertible or exchangeable
securities or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.

      10. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

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            (a) If to a registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or

            (b) If to the Company, to the address set forth in Section 1 of this
Agreement or to such other address as the Company may designate by notice to the
Holders.

      11. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.

      12. No Recourse. 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.

      13. No Waiver. 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.

      14. Amendments. 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.

      15. Headings. 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.

      16. Governing Law. The provisions of this Warrant shall in all respects be
constructed according to, and the rights and liabilities of the parties hereto
shall in all respects be governed by, the laws of the State of New York. This
Warrant shall be deemed a contract made under the laws of the State of New York
and the validity of this Warrant and all rights and liabilities hereunder shall
be determined under the laws of said State.

            IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the 3rd day of December, 1999.

[SEAL]                              BITWISE DESIGNS, INC.

                                    By: _______________________________
                                        John Botti, President

Attest:

______________________________
Ira Whitman, Secretary

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                        [FORM OF ELECTION TO PURCHASE]

            The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ________ Warrant Shares and
herewith tenders in payment for such Warrant Shares cash or a check payable to
the order of Bitwise Designs, Inc. in the amount of $_________, all in
accordance with the terms hereof. The undersigned requests that a certificate
for such Warrant Shares be registered in the name of _______, whose address is
_______________________________________and that such certificate be delivered to
_____________________________ , whose address is______________________________.

Dated:___________________________   Signature: _______________________________
                                                (Signature must conform in all
                                                respects to name of holder as
                                                specified on the face of the
                                                Warrant Certificate.)

                       _________________________________
                        (Insert Social Security or Other
                         Identifying Number of Holder)

STATE OF ___________)
COUNTY OF _________) ss:

      On this __ day of ___________, before me personally came ________, to me
known, who being by me duly sworn, did depose and say that he resides at
__________________, that he is the holder of the foregoing instrument and that
he executed such instrument and duly acknowledged to me that he executed the
same.

                                          __________________________________
                                          Notary Public

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                             [FORM OF ASSIGNMENT]

       (To be executed by the registered holder if such holder desires to
                       transfer the Warrant Certificate.)

            FOR VALUE RECEIVED  ________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________

                  (Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney,
to transfer the within Warrant Certificate on the books of Bitwise Designs,
Inc., with full power of substitution.

Dated:  _________________________   Signature: ______________________________
                                                (Signature must conform in all
                                                respects to name of holder as
                                                specified on the face of the
                                                Warrant Certificate)

___________________________________

___________________________________
(Insert Social Security or Other
Identifying Number of Assignee)

                                      10<PAGE>   1
                                                                   EXHIBIT 10.27

                              EMPLOYMENT AGREEMENT

     AGREEMENT made as of the 1st day of January, 2000, by and between JOHN T.
BOTTI, residing at 325 Loudon Road, Loudonville, New York 12211 (hereinafter
referred to as the "Employee") and BITWISE DESIGNS, INC., a Delaware corporation
with principal offices located at 2165 Technology Drive, Schenectady N.Y. 12308
(hereinafter referred to as the "Company").

                              W I T N E S S E T H :

     WHEREAS, the Company is engaged in the manufacture and distribution of
computers and document imaging systems, providing Internet-based document
authentication services and related business enterprises; and

     WHEREAS, the Company employs and desires to continue the employment of the
Employee for the purpose of securing to the Company the experience, ability and
services of the Employee; and

     WHEREAS, the Employee desires to continue his present employment with the
Company, pursuant to the terms and conditions herein set forth, superseding all
prior agreements between the Company, its subsidiaries and/or predecessors and
Employee;

     NOW, THEREFORE, it is mutually agreed by and between the parties hereto as
follows:

                                    ARTICLE I

                                   EMPLOYMENT

     Subject to and upon the terms and conditions of this Agreement, the Company
hereby employs and agrees to continue the employment of the Employee, and the
Employee hereby accepts such continued employment in his capacity as President
and Chief Executive Officer. In this capacity, Employee will report to the Board
of Directors.

                                   ARTICLE II

                                     DUTIES

         (A) The Employee shall, during the term of his employment with the
Company, perform such services and duties of an executive nature in connection
with the business, affairs and operations of the Company, and its subsidiaries,
as may be reasonably and in good faith assigned or delegated to him from time to
time by or under the authority of the Board of Directors of the Company and
consistent with the position of President and Chief Executive Officer.

<PAGE>   2

         (B) The Employee agrees to use his best efforts in the promotion and
advancement of the Company and its welfare and business. Employee agrees to
devote his primary professional time to the business of the Company as Employee
deems reasonably necessary; provided, however, that the Company acknowledges
that Employee shall be entitled to pursue unrelated personal business ventures
that do not materially conflict with the performance of Employee's duties to the
Company.

         (C) Employee shall be based in the Schenectady, New York area, and
shall undertake such occasional travel, within or without the United States as
is or may be reasonably necessary in the interests of the Company.

                                   ARTICLE III

                                  COMPENSATION

         (A) Commencing with the commencement date hereof, the Company shall pay
to Employee a salary at the rate of $250,000 per annum for the first l2 months
that this Agreement shall be in effect (payable in equal weekly installments or
pursuant to such regular pay periods adopted by the Company) (the "Base
Salary"). On each anniversary date of this Agreement the Base Salary shall be
increased l0% of the Base Salary for the previous l2 month period.

         (B) Employee shall be entitled to receive a bonus (the "Bonus") during
each year of this Agreement, determined as follows:

               The amount to be paid as a Bonus shall be determined as of each
June 30 based upon the fiscal year end and shall be equal to three (3%) percent
of the net pre-tax profit of the Company as determined by the Company's
independent auditors no later than 90 days following the end of the Company's
fiscal year without giving effect to loss carryforwards or non-cash items and
giving effect to and including revenues received by the Company during the
fiscal year and which revenues may have otherwise been excluded in computing net
pre-tax profit by reason of any revenue recognition rules otherwise utilized in
the application of generally accepted accounting principles, and excluding any
expense deduction attributed to such Bonus paid to any other executive officer
of the Company (the "Net Pre-Tax Profit"); provided that, in the event the Net
Pre-Tax Profit of the Company, as determined for any fiscal year is less than
$600,000 during the term of this Agreement, no bonus shall be paid by the
Company to the Employee pursuant to this subparagraph (B). Such determination,
for Bonus purposes only, shall be made in accordance with generally accepted
accounting principles, as modified by these resolutions.

         (C) Employee may receive such other additional compensation as may be
determined from time to time by the Board of Directors. Nothing herein shall be
deemed or construed to require the Board to award any bonus or additional
compensation.

         (D) The Company shall deduct from Employee's compensation all federal,
state and local taxes which it may now or may hereafter be required to deduct.

                                        2

<PAGE>   3

                                   ARTICLE IV

                                    BENEFITS

         (A) During the term hereof, (i) the Company shall provide Employee with
Blue Cross/Blue Shield or equivalent health insurance benefits and major medical
insurance; (ii) Employee shall be reimbursed by the Company upon presentation of
appropriate vouchers for all business expenses incurred by the Employee on
behalf of the Company; (iii) the Company shall provide the Employee with an
automobile suitable for his position and reimburse reasonable automobile
expenses including repairs, maintenance, gasoline charges, mobile phone etc.

         (B) In the event the Company wishes to obtain Key Man life insurance on
the life of Employee, Employee agrees to cooperate with the Company in
completing any applications necessary to obtain such insurance and promptly
submit to such physical examinations and furnish such information as any
proposed insurance carrier may request.

         (C) The Company will obtain and maintain during the full term hereof
and at its sole cost and expense a policy of life insurance on the life of
Employee in the face amount of $500,000 payable to a beneficiary named and
designated by Employee. Upon the conclusion of this Agreement, all right, title
and interest in the policy shall be transferred to the Employee, and the
Employee shall be responsible for any premiums due after such transfer.

         (D) For each year of the term hereof, Employee shall be entitled to
four weeks paid vacation.

                                    ARTICLE V

                                 NON-DISCLOSURE

     The Employee shall not, at any time during or after the termination of his
employment hereunder except when acting on behalf of and with the authorization
of the Company, make use of or disclose to any person, corporation, or other
entity, for any purpose whatsoever, any trade secret or other confidential
information concerning the Company's business, finances, methods, operations,
marketing information, research and development, customers, pricing and
information relating to proposed expansion of the Company or the Company's
business plans (collectively referred to as the "Proprietary Information"). For
the purposes of this Agreement, trade secrets and confidential information shall
mean information disclosed to the Employee or known by him as a consequence of
his employment by the Company, whether or not pursuant to this Agreement, and
not generally known in the industry, concerning the business, finances, methods,
operations, marketing information, research and development, customers, pricing
and information relating to proposed expansion of the Company or the Company's
business plans. The Employee acknowledges that trade secrets and other items of
confidential information, as they may exist from time to time, are valuable and
unique assets of the Company, and that disclosure of any such information would
cause

                                        3

<PAGE>   4

substantial injury to the Company.

                                   ARTICLE VI

                              RESTRICTIVE COVENANT

         (A) In the event of the voluntary termination of employment with the
Company or Employee's discharge in accordance with Article IX paragraph (C),
Employee agrees that he will not, for a period of one year following such
termination, directly or indirectly enter into or become associated with or
engage in any other business (whether as a partner, officer, director,
shareholder, employee, consultant, or otherwise), which business is primarily
involved in the manufacture, development and/or distribution of computers and/or
document imaging systems in the same geographical areas of operation of the
Company.

         (B) If any court shall hold that the duration of non-competition or any
other restriction contained in this paragraph is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable or in the alternative such judicially substituted term may be
substituted therefor.

                                   ARTICLE VII

                                      TERM

     This Agreement shall be for a term commencing on the date first set forth
above and terminating January 1, 2003, unless sooner terminated pursuant to the
terms hereof, and renewable as provided for herein, for one additional period of
one year. The Company agrees to notify Employee in writing of its intent to
negotiate an extension of this Agreement six months prior to the expiration of
the original term hereof. If the Company fails to so notify Employee, or after
having timely notified Employee of its intention to extend, fails to reach
agreement with Employee on the terms of such extension, this Agreement shall be
renewable, at the option of the Employee, for an additional period of one year
from the date on which this Agreement would have expired without such renewal
(the "Renewal Term"), except that Employee's base salary shall be increased l0%
above the prior year. If the Company elects not to seek to negotiate an
extension and has so timely notified Employee, then the Company shall pay
Employee, upon the expiration of the original term of this Agreement, or the
Renewal Term, whichever is applicable, a severance benefit equal to Employee's
annual Base Salary and Bonus for the year immediately preceding the termination
of this Agreement, payable in twelve equal monthly installments commencing on
the termination date of this Agreement.

                                        4

<PAGE>   5

                                  ARTICLE VIII

                             DISABILITY DURING TERM

     In the event that the Employee becomes totally disabled so that he is
unable or prevented from performing substantially all of his usual duties
hereunder for a period of four (4) consecutive months, and the Company elects to
terminate Employee under Article IX(B) then, and in that event, the Company
shall continue to compensate Employee and Employee shall receive his Base Salary
as provided under Article III of this Agreement for a period of twelve (l2)
months commencing from the date of such termination. The aforesaid obligations
of the Company shall not extend beyond the term of this Agreement. The
obligation of the Company to make the aforesaid payments shall be modified and
reduced and the Company shall receive a credit for all disability insurance
payments which Employee may receive or to which he may become entitled.

                                   ARTICLE IX

                                   TERMINATION

     The Company may terminate this Agreement:

         (A) Upon the death of Employee during the term hereof, except that the
Employee's legal representatives, successors, assigns and heirs shall have those
rights and interests as otherwise provided in this Agreement, including the
right to receive accrued but unpaid Bonus compensation, if any.

         (B) Subject to the terms of Article VIII herein, upon written notice
from the Company to the Employee, if Employee becomes totally disabled and as a
result of such total disability, has been prevented from and unable to perform
all of his duties hereunder for a consecutive period of four (4) months.

         (C) Upon written notice from the Company to Employee, if Employee is
convicted of a felony, or has directly derived personal monetary gain from
actual fraud committed by Employee against the Company.

                                    ARTICLE X

                           EXTRAORDINARY TRANSACTIONS

         The Company's Board of Directors has determined that it is appropriate
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Employee, to their assigned duties
without distraction in potentially disturbing circumstances arising from the
possibility of a change in control of the Company. A "Change in Control" of the
Company shall be deemed to have occurred if there shall be consummated (i)(x)
any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into

                                        5

<PAGE>   6

cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders of the
Company approved any plan or proposal for the liquidation or dissolution of the
Company, or (iii) any person (as such term is used in Sections 13(d) and
l3(d)(2) of the Securities Exchange Act of l934, as amended (the "Exchange
Act"), who is not a beneficial owner (within the meaning of Rule l3d-3 under the
Exchange Act) of 20% or more of the Company's outstanding Common Stock on the
date hereof, shall become the beneficial owner (within the meaning of Rule l3d-3
under the Exchange Act) of 20% or more of the Company's outstanding Common
Stock, or (iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the entire Board of Directors shall
cease for any reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period.

     The Company agrees that, if during the term hereof, or during such time as
the Employee is otherwise employed by the Company, a Change in Control shall
occur, all options to purchase Common Stock of the Company held by Employee,
either pursuant to this Agreement or otherwise, shall immediately vest and
become exercisable on the first day following a Change in Control. Further, the
options shall be deemed amended to provide that in the event of termination of
Employee after an event enumerated in this Article X, the options shall remain
exercisable for the duration of their term; and further, at the Employee's
option, an amount equal to three times the aggregate annual compensation paid to
the Employee during the calendar year preceding the Change in Control shall be
credited against the exercise price of any options held by Employee at the time
Employee elects to exercise such options; provided, however, that if the lump
sum severance payment under this Article X, either alone or together with other
payments which the Employee has the right to receive from the Company, would
constitute a "parachute payment" (as defined in Section 280G of the Internal
Revenue Code of l954, as amended (the "Code")), such credit shall be reduced to
the largest amount as will result in no portion of the credit under this Article
X being subject to the excise tax imposed by Section 4999 of the Code.

                                   ARTICLE XI

                         TERMINATION OF PRIOR AGREEMENTS

     This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements between the parties, whether oral or written,
without prejudice to Employee's right to all accrued compensation prior to the
effective date of this Agreement.

                                        6

<PAGE>   7

                                   ARTICLE XII

                                   ARBITRATION

     Any dispute arising out of the interpretation, application and/or
performance of this Agreement with the sole exception of any claim, breach or
violation arising under Articles V or VI hereof shall be settled through final
and binding arbitration before a single arbitrator in the City of New York, the
State of New York in accordance with the rules of the American Arbitration
Association. The arbitrator shall be selected by the Association and shall be an
attorney at law experienced in the field of corporate law. Any judgment upon any
arbitration award may be entered in any court, federal or state, having
competent jurisdiction of the parties.

                                  ARTICLE XIII

                                  SEVERABILITY

     If any provision of this Agreement shall be held invalid and unenforceable,
the remainder of this Agreement shall remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.

                                   ARTICLE XIV

                                     NOTICE

     All notices required to be given under the terms of this Agreement shall be
in writing and shall be deemed to have been duly given only if delivered to the
addressee in person or mailed by certified mail, return receipt requested, as
follows:

    IF TO THE COMPANY:        BITWISE DESIGNS, INC.
                              2165 Technology Drive
                              Schenectady, NY 12308

    IF TO THE EMPLOYEE:       JOHN T. BOTTI
                              325 Loudon Road
                              Loudonville, NY 12211

or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph. Any such written notice
shall be effective upon receipt, but not later than four (4) days after the
deposit with the U.S. Postal Service.

                                        7

<PAGE>   8

                                   ARTICLE XV

                                     BENEFIT

     This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Employee.

                                   ARTICLE XVI

                                     WAIVER

     The waiver by either party of any breach or violation of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of construction and validity.

                                  ARTICLE XVII

                                  GOVERNING LAW

     This Agreement has been negotiated and executed in the State of New York,
and New York law shall govern its construction and validity.

                                  ARTICLE XVIII

                                  JURISDICTION

     Any or all actions or proceedings which may be brought by the Company or
Employee under this Agreement shall be brought in courts having a situs within
the State of New York and Employee hereby consents to the jurisdiction of any
local, state or federal court located within the State of New York.

                                   ARTICLE XIX

                                ENTIRE AGREEMENT

     This Agreement contains the entire agreement between the parties hereto. No
change, addition or amendment shall be made hereto, except by written agreement
signed by the parties hereto.

                                        8

<PAGE>   9

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.

(Corporate Seal)                            BITWISE DESIGNS, INC.

                                            By__________________________
                                                 J. Edward Sheridan
                                                 Chairman - Compensation
                                                 Committee

                                              __________________________
                                                 JOHN T. BOTTI (Employee)

                                        9

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