8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  November 7, 2009

BLUEGATE CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Nevada
(State or Other Jurisdiction of Incorporation)
000-22711	76-0640970
(Commission File Number)	(IRS Employer Identification No.)

701 North Post Oak, Road, Suite 600, Houston, Texas	77024
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, Including area code: (713) 686-1100

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.01 Disposition of Assets.    

Effective November 7, 2009: 1) the Company entered into an Asset Sale and Purchase Agreement to sell certain Bluegate Corporation Medical Grade Network (“MGN”) assets to Sperco, LLC (a company controlled by Stephen Sperco who is our CEO/President/Director) for $200,000, with payment made by a combination of $100,000 cash and $100,000 forgiveness of debt, plus an adjustment on a dollar for dollar basis for any working capital; 2) the Company entered into a Separation Agreement and Mutual Release in Full of all claims with Manfred Sternberg (former Director/Corporate Officer) in exchange for repayment of a loan plus accrued interest totaling $44,369 to Manfred Sternberg; 3) the Company entered into a Separation Agreement and Mutual Release in Full of all claims with William Koehler (former Director/Corporate Officer) in exchange for repayment of a loan plus accrued interest totaling $44,374 with a direct payment to Mr. Koehler’s American Express account and a $1 payment to William Koehler; 4) the Company entered into an Asset Sale and Purchase Agreement to sell certain Trilliant Technology Group, Inc.’s assets to Trilliant Corporation (a company controlled by William Koehler, former Director/Corporate Officer) for a cash payment of $5,000; and 5) the Company entered into an Asset Sale and Purchase Agreement to sell certain Bluegate Corporation Healthcare Information Management Systems (“HIMS”) assets to SAI Corporation (“SAIC”), a corporation controlled by Sperco in exchange for a Mutual Release in Full of certain claims and a $1 payment to SAIC.

The carrying value of the assets disposed of totaled $17,590 and consisted of furniture, fixtures and equipment. The carrying value of liabilities disposed of totaled $245,741 and consisted of: (i) $100,000 reduction of secured debt to SAI Corporation; (ii) $44,369 payment of a note payable and accrued interest to Manfred Sternberg; (iii) $44,374 payment of a note payable and accrued interest to William Koehler; (iv) $22,499 and $6,000 forgiveness of accrued directors’ fees and accrued vehicle allowances, respectively from Manfred Sternberg; and (v) $22,499 and $6,000 forgiveness of accrued directors’ fees and accrued vehicle allowances, respectively from William Koehler.

Prior to the sale/purchase transaction, the Company obtained a Fairness Opinion.  The Fairness Opinion indicated among other items that: (1) the analysis of the fair value of the assets included in this transaction indicates that if anything, the price is likely a high price; (2) the total tangible collateral in this transaction is something less than $40,000 which means a loan value in the $30,000 range or less; (3) Trilliant Technology Group, Inc. (TTG) has no on-going operations while the Medical Grade Network (MGN) and Healthcare Information Management Systems (HIMS) operations have been trending downward; (4) these three operations are insufficient to support Bluegate Corporation’s overhead and if they were not sold in short order, they will likely cease to exist; and (5) without these transactions, Bluegate Corporation will continue to be in default on its loans and given the state of financial resources, may be forced to file for bankruptcy protection.  The conclusion in the Fairness Opinion indicated that based upon the foregoing evidence and analysis, it is our opinion that this transaction is fair from a financial point of view as it provides the common shareholders with more value than any other likely scenario.  Moreover, the price being paid to Bluegate Corporation is assessed as meeting or exceeding what we have determined to be a fair value for the assets to be sold to Sperco, LLC, Trilliant Corporation and SAI Corporation.

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Item 9.01                                Exhibits

Exhibit

Number                                Description

____________________________________________________

10.1                      Asset Sale and Purchase Agreement among Registrant and Sperco, LLC.

10.2 Separation Agreement and Mutual Release in Full between Registrant and Manfred Sternberg.

10.3 Separation Agreement and Mutual Release in Full between Registrant and William Koehler.

10.4 Asset Sale and Purchase Agreement among Registrant, Trilliant Technology Group, Inc. and Trilliant Corporation.

10.5                      Asset Sale and Purchase Agreement among Registrant and SAI Corporation.

10.6                      Mutual Release in Full between Registrant and SAI Corporation.

10.7 Fairness Opinion Prepared in Conjunction with a Sale and Purchase of Assets among the Registrant, Sperco LLC, Trilliant Corporation and SAI Corporation.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BLUEGATE CORPORATION
	(signed) /s/ Charles E. Leibold
November 18, 2009	Charles E. Leibold, Director,
	Principal Accounting Officer and
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

ASSET SALE AND PURCHASE AGREEMENT

THIS ASSET SALE AND PURCHASE AGREEMENT (“Agreement”) is made and entered into to be effective the Seventh (7th) day of November, 2009 (“Effective Date”) and to be fully completed as of the Thirty-First (31st) day of December, 2009 (“Completion Date”) by and between Bluegate Corporation, a Nevada corporation (“Bluegate” or the “Seller”), and Sperco, LLC, a Texas corporation (“Purchaser”).

WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Purchaser desires to acquire from Seller full right, title, and interest in and to all of the personal property of every kind or nature used in the Medical Grade Network (“MGN”) operations of Seller (the “Assets”), including, without limitation, the personal property that is more fully described in Article One below but not including the “Excluded Assets” as defined hereinafter, free and clear of any security interest, lien, mortgage, encumbrance, claim, or limitation or restriction on the transfer thereof (collectively, “Encumbrances”); and

WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Seller desires to sell the Assets to Purchaser;

NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations, and warranties set forth hereinafter, and other good and valuable consideration (the receipt, adequacy, and sufficiency of which each of Seller and Purchaser hereby acknowledges) and subject to the terms, provisions, and conditions hereof, each of Seller and Purchaser hereby agree as follows:

ARTICLE ONE

1   Sale and Purchase of Assets.

1.1   In consideration of Purchase Price pursuant to Section 1.3 below, Seller does hereby assign, transfer, and convey to Purchaser (without any further act or deed except as otherwise indicated herein), full right, title, and interest in and to all of the Assets, and Purchaser does hereby acquire and receive full right, title, and interest in and to the Assets, wherever located and regardless of whether or not reflected on Seller's books and records, free and clear of any Encumbrances.  Without any limitation on anything stated above, the Assets consist of all of the following:

1.1.1           The machinery, equipment, computer equipment and systems, telephony systems, appliances, fixtures, furniture, furnishings, and other tangible personal property owned by Seller, including, without limitation, those items listed on Schedule 1.1.1 hereto;

1.1.2   All inventories of raw materials, work-in-process, finished products, supplies, tools, spare parts, and shipping containers and materials, held for use in Seller's business, including, without limitation, those items listed on Schedule 1.1.2 hereto;

1.1.3   All rights of Seller in, to and under any and all contracts, agreements, commitments, leases, licenses, and franchises (including, without limitation, those pertaining to suppliers, customers, employees, equipment, and motor vehicles), to which the MGN operations of Seller are a party or the Assets are subject, including, without limitation, those items listed on Schedule l.l.3 hereto;

1.1.4   All cash, cash equivalents, deposits in transit and interests in bank accounts of Seller, all accounts receivable owed to Seller (the “Accounts Receivable”), and all bills, notes, and securities of Seller, as of the Effective Date as provided for hereby and listed on Schedule 1.1.4 hereto;

1.1.5   Seller's computer programs and software, including, without limitation, those items listed on Schedule 1.1.5 hereto;

1.1.6   All telephone and facsimile numbers (local and toll free), all internet domain sites, all E-Mail, internet and website addresses, and all mailboxes and lockboxes used by Seller, including, without limitation, those items listed on Schedule l.1.6 hereto;

1.1.7   To the extent that they may be lawfully transferred, Seller's licenses, permits, certificates of authority, variances, authorizations, approvals, registrations, franchises, and similar consents granted or issued by any governmental authority (including applications for any of the preceding) denoted as transferable on Schedule 1.1.7 hereto;

1.1.8   All records of Seller's MGN operations in whatever form (copies of which Seller may retain at its cost), including accounting records, property records, personnel records, and credit records, and all of Seller's MGN Operations customer lists, supplier lists, catalogs, and brochures; and

1.1.9   All of Seller's Intellectual Property (as defined in Section 2.8), and any and all other intangible property or rights whatsoever owned by Seller and the goodwill of Seller's business symbolized by such Intellectual Property (in connection with the transfer of the preceding, Seller executed all additional transfer documents requested by Purchaser) including, without limitation, those items listed on Schedule l.l.9 hereto.

1.2   Excluded Assets. Seller is not selling to Purchaser, and Purchaser is not acquiring, any of the items listed on Schedule 1.2 hereto, which items shall not constitute “Assets” for any purpose hereof.

1.3   Purchase Price, and Payment. Adjustment and Allocation Thereof.

1.3.1   The aggregate purchase price for the Assets (the “Purchase Price”) shall be composed of: (i) a cash payment of One Hundred Thousand Dollars ($100,000), and (ii) a One Hundred Thousand Dollar ($100,000) reduction of the secured portion of the SAI Corporation Promissory Note to Bluegate.

1.3.2   The parties agree that the cash portion of the Purchase Price will be adjusted to reflect a true-up of the accounts as of the Effective Date with a final reconciliation of the Operating Accounts associated with the transaction being completed by December 31, 2009.  More specifically, the accounts for both Purchaser and Seller will be adjusted to reflect both pre-payments and work not yet billed to arrive at a net change (positive or negative) to the actual amount of cash paid by Purchaser.

1.3.3   Seller and Purchaser agree that they shall prepare and file their respective federal and any state or local income tax returns, and any sales tax returns or other filings.

1.4   Assumed Liabilities. Purchaser hereby agrees to assume and be obligated to pay, perform or discharge only those liabilities that are expressly set forth on Schedule 1.4 hereto, if any (referred to hereinafter as the “Assumed Liabilities”).  Purchaser assumes no obligations, liabilities and debts other than the Assumed Liabilities.  Seller agrees to pay or perform timely any and all obligations, liabilities, and debts of Seller other than for the Assumed Liabilities.

1.5   Consents.  Seller shall use its best efforts to obtain any third party consents necessary to sell the Assets to Purchaser.  To the extent that any of the Assets are not assignable without the consent of another party and such consent has not been obtained on or prior to the date hereof, such Assets shall not be assigned or attempted to be assigned if such assignment or attempted assignment would constitute a breach thereof.  While Seller is trying to procure all necessary consents, Seller and Purchaser shall cooperate in any reasonable arrangements designed to provide to Purchaser the benefits of any such Assets, including enforcement at the cost and for the account of Purchaser of any and all rights of Seller against the other party thereto arising out of a cancellation or breach by such other party or otherwise.  If any consent necessary to sell the Assets to Purchaser is obtained after the date of this Agreement, then the related Asset not previously assigned pursuant to this Section 1.5 shall be immediately assigned upon procurement of such consent without any further act or deed.

1.6   Seller's Deliveries.  Prior to or on the Completion Date hereof, Seller delivered:

a.   Such deeds, bills of sale, covenants of warranty, assignments, endorsements, consents, and other good and sufficient instruments and documents of conveyance and transfer in a form satisfactory to Seller and Purchaser, and necessary documents of title, as shall be necessary and effective to convey, transfer and assign to, and vest in, Purchaser all of Seller's right, title and interest in and to the Assets;

b.   Evidence satisfactory to Purchaser that any and all security interests and liens on the Assets (other than those being assumed) have been released;

c.   Copies of all required third party consents to the sale of the Assets, that are required and have been obtained;

d.   All of the agreements, contracts, commitments, leases, plans, bids, quotations, proposals, licenses, permits, authorizations, instruments, computer programs and software, manuals and guidebooks, price books and price lists, customer lists, supplier lists, sales records, files, correspondence, and other documents, books, records, papers, files and data belonging to Seller which are part of the Assets; and

e.   Actual possession and operating control of the Assets.

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1.7   Purchaser's Deliveries. Prior to or by November 11, 2009, Purchaser delivered:

a.   The cash amount of the Purchase Price (adjustments to be completed by the Completion Date), and

b.   Written notice that the secured portion of the SAI Corporation Promissory Note has been reduced by One Hundred Thousand Dollars ($100,000).

ARTICLE TWO

2   Representations, Warranties, and Agreements of Seller.

Seller hereby represents, warrants, and agrees to and with Purchaser that:

2.1   Organization and Standing of Seller.   Seller’s a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada.  Seller has full requisite corporate power and authority to carry on its business as it is now being conducted.

2.2   Capacity to Enter into Agreement.  Seller has full right, power, and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder.  The execution and delivery by Seller that is an entity of this Agreement and all other agreements, documents, and instruments to be executed by Seller in connection herewith have been authorized by all necessary entity action by Seller.  When this Agreement and all other agreements, documents, and instruments to be executed by Seller in connection herewith are executed by Seller and delivered to Purchaser, this Agreement and such other agreements, documents, and instruments will constitute the valid and binding agreements of Seller enforceable against Seller in accordance with their respective terms, except as such enforceability may be limited by or subject to:  (a) any bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

2.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not:  (a) violate, conflict with, or result in the breach or termination of, or otherwise give any other contracting party the right to terminate, or constitute a default (by way of substitution, novation or otherwise) under the terms of, any contract to which Seller is a party or by which Seller is bound or by which any of the assets of Seller is bound or affected, (b) violate any judgment against, or binding upon, Seller or upon the assets of Seller, (c) result in the creation of any lien, charge, or encumbrance upon any assets of Seller pursuant to the terms of any such contract, or (d) violate any provision in the charter documents, bylaws, or any other agreement affecting the governance and control of Seller.

2.4   Consents.  No consent, approval, or authorization of, or declaration, filing or registration with, any governmental or regulatory authority or any court or other tribunal, and no consent or waiver of any party to any material contract to which Seller is a party or is bound is required to be obtained by Seller in connection with the execution, delivery, and performance of this Agreement by Seller, such that the failure to obtain or make any such consent, approval, authorization, declaration, filing, or registration would materially adversely affect the consummation of the transactions contemplated by this Agreement.

2.5   Assets.  Each of the schedules referenced in Section 1.1 is true, correct and complete in all material respects as of the date hereof (or if different, as of the date set forth thereon).

a.   Seller has, and upon the sale of the Assets to Purchaser, Purchaser will receive, good and indefeasible title to all of the Assets, free and clear of all Encumbrances, except liens for current taxes not yet due and payable;

b.   All Assets constituting tangible personal property are in a good state of repair and operating condition, ordinary wear and tear excepted; and

c.   All of the Accounts Receivable reflected Schedule 1.1.4 hereto or created thereafter are valid, subsisting, and genuine, arose out of bona fide transactions and are current and collectible.

2.6   Contracts.  Schedule 1.1.3 contains a true, correct and complete list of Seller's contracts, agreements, commitments, and leases, whether or not made in the ordinary course of business.

a.   All leases, contracts, agreements, arrangement, or commitments to which Seller is a party or the Assets are subject are in good standing, valid, and effective; and

b.   There is not, under any such lease, contract, agreement, arrangement, or commitment, any existing or prospective default or event of default by Seller or event which with notice or lapse of time, or both would constitute a default; and, to Seller's best knowledge, no other party to any such lease, contract, agreement, arrangement, or commitment, is in default or breach thereof nor has any event occurred which with notice or lapse of time would constitute a breach or default of any of such lease, contract, agreement, arrangement, or commitment.

2.7   Permits.  Schedule 1.1.7 contains a true, correct and complete list of Seller's licenses, permits, and authorizations.

a.   Seller holds all licenses, permits, and authorizations required to carry on its business, and all such licenses, permits and authorizations are in good standing;

b.   Seller is in full compliance with and not in default or violation with respect to any term or provision of any of its licenses, permits, and authorizations;

c.   Seller has received no notice of pending, threatened, or possible violation or investigation in connection with, or loss of, any license, permit, or authorization of Seller;

d.   To Seller’s best knowledge, no issuance of such notice is being considered, and no facts or circumstances exist which could form the basis for the issuance of such a notice; and

e.   No license, permit, or authorization of Seller is affected by the transactions provided for herein or contemplated hereby.

2.8   Intellectual Property. Schedule 1.1.9 contains a listing and summary description of all of Seller's patents, trademarks, service marks, trade names, trade dress, logos, business names, copyrights, and registered designs, and registrations and applications thereof, trade secrets and confidential know-how, business information and other intellectual property, including, but not limited to, computer software, databases, source code, and documentation; product formulations; drawings; technical specifications; manufacturing data; and test and development data (the foregoing intellectual property is collectively referred to hereinafter. as the “Intellectual Property”).

a.   The MGN Operations possesses all intellectual property necessary to the conduct of its businesses;

b.   Purchaser shall receive a non-exclusive, royalty free, fully paid, perpetual, irrevocable license to use and copy the Intellectual Property of Seller (excluding access to the TTG related Intellectual Property);

   c.  Seller owns all right, title, and interest in and to all of the Intellectual Property;

d.   There have been no claims made against Seller for the assertion of the invalidity, abuse, misuse, or unenforceability of any Intellectual Property, and there are no grounds for the same;

e.   Seller has not has received a notice of conflict with the asserted rights of others; and

f.   The conduct of the MGN Operation's business has not infringed on any rights of others and, to Seller's best knowledge, no other person has infringed the Intellectual Property.

2.9   Employees.  The term “Employees” shall represent all employees of Seller at the time of the Effective Date.

a.   Seller is not a party as an employer to any employment contract, agreement or understandings with the Employees; and

b.   For the Employees, Seller has satisfied (or has made adequate provision for) all salaries, wages, unemployment insurance premiums, worker compensation payments, income tax, FICA, and other deductions and any like payments required by law through and with respect to periods through the Effective Date.

c.   For the Employees, Seller will satisfy (or will make adequate provision for) all salaries, wages, unemployment insurance premiums, worker compensation payments, income tax, FICA, and other deductions and any like payments required by law through and with respect to periods through the Completion Date.

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2.10   Litigation.

a.   Seller and the Assets are not subject to any pending, or to Seller's best knowledge, threatened litigation, proceeding or administrative investigation of any kind or nature (including, without limitation, any matter (including audits) involving the Internal Revenue Service, or other federal or state taxing authorities);

b.   Seller is not in default with respect to any judgment, order, writ, injunction, decree, or award applicable to it or the Assets of any court or other governmental instrumentality or arbitrator; and

c.   Seller has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and to the Seller's best knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

2.11   Compliance with Law.  Seller is not in violation of, or in default with respect to, or in alleged violation of or alleged default with respect to, any applicable law, rule, regulation, permit, or any writ or decree of any court or any governmental commission, board, bureau, agency, or instrumentality, including without limitation, any laws, ordinances, rules, regulations, permits, or orders relating to the MGN business of Seller, or the business operations and practices, health and safety, and employment practices of Seller.  Seller has filed, when due, with all appropriate governmental agencies, all tax returns, estimates, reports, and statements to be filed by it for the MGN related operations (collectively, the “Returns”).  Each of the Returns is true, complete, proper, and accurate in all respects.

2.12   Taxes.  Seller has filed, when due, with all appropriate governmental agencies, all tax returns, estimates, reports, and statements to be filed by it for the MGN related operations (collectively, the “Returns”).  For the MGN related operations:

a.   Each of the Returns is true, complete, proper, and accurate in all respects;

b.   Seller has paid, when due and payable, all requisite income taxes, sales, use, property and transfer taxes, levies, duties, licenses and registration fees, and charges of any nature whatsoever and workers' compensation and unemployment taxes, including interest and penalties thereon;

c.   Seller has withheld all tax required to be withheld under applicable tax laws and regulations, and such withholdings have either been paid to the respective governmental agencies or set aside in accounts for such purpose;

d.   Seller has not given or been requested to give, or executed, any extension of time or waiver of any statute of limitations with respect to Federal, state, or other political subdivision income or other tax for any period;

e.   Seller has not received any notice of deficiency or assessment issued or proposed deficiency or assessment by the Internal Revenue Service or any other taxing authority; and

f.   There is no pending audit or inquiry of Seller, nor has Seller received any oral or written notice of any proposed audit or inquiry by any taxing authority or jurisdiction.

2.13   Finder's Fees.  Neither Seller nor anyone acting on its behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage, or finder's fee, or commission in connection with this Agreement or the transactions contemplated hereby.

2.14   Untrue Statements.  This Agreement, the schedules, and exhibits hereto, and all other documents and information furnished by Seller or its representatives pursuant hereto or in connection herewith do not include any untrue statement of a material fact or omit to state any material fact that is necessary to make the statements made herein and therein not misleading.

ARTICLE THREE

3   Representations, Warranties, and Agreements of Purchaser

3.1   Organization and Standing of Purchaser.  Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of Texas.  Purchaser has full requisite power and authority to carry on its business.

3.2   Capacity to Enter into Agreement.  Purchaser has full right, power and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder. The execution and delivery by Purchaser of this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith have been authorized by all necessary action by Purchaser.  When this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith are executed by Purchaser and delivered to Seller, this Agreement and such other agreements, documents, and instruments will constitute the valid and binding agreements of Purchaser or enforceable against Purchaser in accordance with their respective terms, except as such enforceability may be limited by or subject to:  (a) any bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to creditors' rights generally; and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not violate any provision in any charter document of Purchaser, or any other agreement affecting the governance and control of Purchaser, such that any such violation, conflict, breach, termination, or creation would materially adversely affect the consummation of the transactions contemplated by this Agreement.

3.4   Consents.  No consent, approval, or authorization of, or declaration, filing or registration with, any governmental or regulatory authority or any court or other tribunal, and no consent or waiver of any party to any material contract to which Purchaser is a party or is bound is required to be obtained by Purchaser in connection with the execution, delivery, and performance of this Agreement by Purchaser, such that the failure to obtain or make any such consent, approval, authorization, declaration, filing, or registration would materially adversely affect the consummation of the transactions contemplated by this Agreement.

3.5   Litigation.  Purchaser has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and the best of Purchaser's knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

3.6   Finder's Fees.  Neither Purchaser nor anyone acting on its behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage or finder's fee, or commission in connection with this Agreement or the transactions contemplated hereby.

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ARTICLE FOUR

4   Certain Agreements

4.1   Further Assurances.  Following the Effective Date, each party shall execute and deliver such other documents, and take such other actions, as may be reasonably requested by the other party to vest in Purchaser full right title and interest in and to the Assets, to complete the transactions contemplated by this Agreement and to allow each party fully to enjoy and exercise the rights accorded to and acquired by it under this Agreement or any other agreement entered into pursuant hereto.

4.2   Accounts Receivable.  Upon the request and at the expense of Purchaser, Seller shall use reasonable and its best efforts to assist Purchaser in collecting the Accounts Receivable.  In the event that Seller shall receive any payment on the Accounts Receivable, Seller shall hold the amount received in trust for the benefit of Purchaser and shall immediately remit to Purchaser the amount received in its entirety.  Seller shall not settle, compromise, or release (in whole or in part) any Accounts Receivable, or take any action or omit to take any action that would adversely affect the Accounts Receivable, without the prior written consent of Purchaser.

4.3   Employees.

4.3.1   Seller shall pay to its employees all compensation, including salaries, commissions, bonuses, deferred compensation, severance, insurance, pensions, profit sharing, vacation pay, sick pay, and other compensation or benefits to which they are entitled for periods prior to the date of Purchaser hiring any of Seller’s employees.  Seller shall be responsible for maintenance and distribution of benefits accrued under any employee benefit plan (as defined in ERISA) maintained by Seller pursuant to the provisions of such plans.  Purchaser shall assume neither any liability for any such accrued benefits nor any fiduciary or administrative responsibility to account for or dispose of any such accrued benefits under any employee benefit plans maintained by Seller.

4.3.2   On the date Seller terminates the employment relationship with such of its employees as Purchaser has expressed an interest in hiring, and Seller paid to each such employee any and all amounts due to them prior to or as a result of such termination that were not expressly assumed by Purchaser.  Purchaser is hereby expressly permitted by Seller to enter into an employment relationship with each of these former employees. Purchaser may, in its sole discretion, offer employment to any or all of the former employees of Seller.  All such persons so employed by Purchaser are referred to hereinafter as a “Hired Employee.”

4.3.3   All claims and obligations under, pursuant to, or in connection with any welfare, medical, insurance, disability, or other employee benefit plans of Seller or arising under any legal requirement applicable to Seller affecting employees of Seller incurred on or before the date of Purchaser’s hiring the Hired Employee or resulting or arising from events or occurrences occurring or commencing on or prior to that date shall remain the responsibility of Seller, whether or not such employees are hired by Purchaser after the Effective Date.  Purchaser shall have and assume no obligation or liability under or in connection with any such plan and, shall assume no obligation with respect to any pre-existing condition of any employee of Seller who is hired as an employee of Purchaser.

4.3.4         Commencing with the day after the Effective Date, Purchaser will contract with Seller for support from the Seller’s employees at the rate listed on Schedule 4.3.4.  At all times the relationship of Purchaser and Seller is that of independent contractor only and is not employer-employee.  It is expressly understood and agreed that Seller and Seller’s Staff shall perform services under the control of Purchaser as to the result of such services only, and not as to the means by which such result is accomplished.  Seller and Seller’s employees shall not be entitled to participate in programs, health plans or other benefits of Purchaser.  Purchaser shall have no obligation to pay or withhold any taxes or other amounts in respect of benefits with respect to Seller, Seller’s Staff or other employees.  Seller is not an agent of Purchaser and has no authority whatsoever to bind Purchaser by agreement of any kind.

4.4   Publicity.  The parties hereto shall jointly prepare any press release or other public announcement relating to this Agreement, except that the foregoing shall not prevent any party hereto or any affiliate thereof from issuing any press release required by applicable law.

ARTICLE FIVE

5   Survival and Indemnity

5.1   Survival of Representations and Warranties.  All of the representations and warranties made by the parties hereto in this Agreement or pursuant hereto, shall be continuing and shall survive the closing hereof and the consummation of the transactions contemplated hereby, notwithstanding any investigation at any time made by or on behalf of any party hereto, for a period of two (2) years after the date of this Agreement.

5.2   Indemnification by Seller.  Seller shall indemnify and hold harmless Purchaser and Purchaser's shareholders, directors, officers, employees, agents, affiliates, successors, and assigns from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, judgments, losses, damages, injuries, liabilities, obligations, expenses, and costs (including costs of litigation and attorneys' fees), arising from any breach of any agreement, representation or warranty made by any of them in this Agreement.

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ARTICLE SIX

6   Miscellaneous

6.1   Notices.  Any notices, requests, demands, or other communications herein required or permitted to be given shall be in writing and may be personally served, sent by United States mail, sent by an overnight courier who keeps proper records regarding its deliveries, faxed, or emailed. Notice shall be deemed to have been given if personally served, when served, or if mailed, on the third business day after deposit in the United States mail with postage pre-paid by certified or registered mail and properly addressed, or if sent by overnight courier as aforesaid with charges being billed to the sender, when received by the party being notified, or if faxed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the fax was properly received, or if E-Mailed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the E-Mail was properly received. As used in this Agreement, the term “business day” means days other than Saturday, Sunday, and holidays recognized by Federal banks.  For purposes of this Agreement, the physical addresses, fax numbers, and e-mail addresses of the parties hereto shall be the physical addresses, fax numbers, and e-mail addresses as set forth on the signature pages of this Agreement.  Any party to be notified hereunder may change its physical address, fax number, and e-mail address by notifying each other party hereto in writing as to the new physical address, fax number, and e-mail address for sending notices.

6.2   Counterparts.  This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one and the same instrument.

6.3   Amendments and Waivers.  This Agreement may be amended, modified, or superseded only by written instrument executed by all parties hereto.  Any waiver of the terms, provisions, agreements, covenants, representations, warranties, or conditions hereof shall be made only by a written instrument executed and delivered by the party waiving compliance.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right to enforce the same.  No waiver by any party of any condition, or of the breach of any term, provision, agreements, covenant, representation, or warranty contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or the breach of any other term, provision, agreements, covenant, representation, or warranty.

6.4        Time of Essence.  Time is of the essence in the performance of this Agreement.

6.5   Captions.  The captions contained in this Agreement are solely for convenient reference and shall not be deemed to affect the meaning or interpretation of any Article, Section, or paragraph hereof.

6.6   Entire Agreement.  This Agreement (including the schedules and exhibits hereto, the Financial Statements, and all supporting agreements referred to herein, all of which are by this reference fully incorporated into this agreement) sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements, and understandings relating to the subject matter hereof.

6.7   Assignment, and Successors and Assigns.  No party hereto may assign any of its rights, interests, or obligations under this Agreement without the prior written consent of the other parties. Notwithstanding the preceding, Purchaser may assign all or part of this Agreement and its rights hereunder to a wholly-owned subsidiary or to a person who acquires substantially all of the assets of Purchaser and who assumes all of the obligations of Purchaser hereunder, provided in each such case that no such assignment shall release Purchaser from its duties and obligations hereunder.  All of the terms, provisions, agreements, covenants, representations, warranties, and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, permitted assigns, and successors.

6.8   Knowledge, Gender, and Certain References.  Whenever a representation or warranty made herein is made to the best of any entity's knowledge, such representation or warranty is based only on the actual knowledge or belief of the entity's management without any independent investigation on the part of such management or any other person although such management has no reason to believe that the representation or warranty made was not true as of the date which it speaks.  Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural, and pronouns stated in the masculine or the neuter gender shall include the masculine, the feminine and the neuter gender.  The terms “hereof,” “herein,” or “hereunder” shall refer to this Agreement as a whole and not to any particular Article, Section, or paragraph hereof.

6.9   Applicable Law, Mandatory Venue, and Draftsmanship. This Agreement has been executed in Harris County, Texas.  THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY BY ITS TERMS AND BY THE LOCAL, INTERNAL LAWS OF THE STATE OF TEXAS.  The parties hereto stipulate and agree that the courts of the State of Texas shall have in personam jurisdiction for any claim, lawsuit, or proceeding regarding this Agreement, and that mandatory venue for any such claim, lawsuit, or proceeding shall be in any state or federal court having competent jurisdiction located in Harris County, Texas.  Each party hereto hereby acknowledges and agrees that it has consulted legal counsel in connection with the negotiation of this Agreement and that it has bargaining power equal to that of the other parties hereto in connection with the negotiation and execution of this Agreement.  Accordingly, the parties hereto agree that the rule of contract construction that an agreement shall be construed against the draftsman shall have no application in the construction or interpretation of this Agreement.

6.10   Severability.  If any term, provision, agreements, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, agreements, covenants, and restrictions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

6.11   Costs, Expenses, and Fees.  Each party hereto agrees hereby to pay all costs, expenses, and fees incurred by it in connection with the transactions contemplated hereby, including, without limitation, all attorneys' and accountants' fees.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Bluegate Corporation

By: /s/ Charles E. Leibold

       Charles E. Leibold

       Chief Financial Officer

November 7, 2009

cleibold@bluegate.com

Sperco, LLC

By:  /s/ Stephen J. Sperco

Stephen J. Sperco

President

November 7, 2009

ssperco@sperco.com

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Schedule 1.1.1 - Lists Of Machinery, Equipment And Other Tangible Personal Property

Minolta Di550 Copier, Desktop Computers (Machine, software, peripherals, etc.), Laser Printers (B&W & Color), Servers, Network Switches, Routers, Firewalls, etc., Laptop Computers (Machine, software, peripherals, etc.), Telephone System(s), Tape Back-up & RAID systems, Cooling Equipment, CoLo related equipment, Fax Machine(s), Kitchen Appliances, Furniture, Postage Meter, Specialty Software, and other operations related items to be finalized by the Completion Date in the reconciliation process.

Schedule 1.1.2 – Inventories, Supplies, Materials, Tools, etc.

Computers, software, switches, routers, firewalls, peripherals, etc. – To be finalized by the Completion Date in the reconciliation process.

Schedule 1.1.3 – Contracts/Agreements Transferred from Seller

Vendor Agreements – To be finalized by the Completion Date in the reconciliation process

Client Agreements – To be finalized by the Completion Date in the reconciliation process.

Schedule 1.1.4 – Accounts Receivable Owed to MGN Operation going to Purchaser

To be finalized by the Completion Date in the reconciliation process.

Schedule 1.1.5 – Computer Programs and Software

Barracuda (including Server) and Trend Micro (including Server).

Schedule 1.1.6 – Lists Of Telephone And Fax Numbers, Internet Matters, And Mailboxes

1.   Telephony

a.   Phone:  713-686-1100

b.   Fax:  713-682-7402

c.   DID Block: 713-683-1300-1399

2.   Web Addresses

a.   www.bluegate.com

b.   www.bluegate.net

c.   www.bluegate.

3.   Email Accounts

a.   All email address associated with the above Web addresses.

4.   ARIN Block of Numbers

Schedule 1.1.7 – Licenses and Permits

Included in other Schedules to this Agreement.

Schedule 1.1.9 – Intellectual Properties

Ø   Registered Mark for:  “Medical Grade Network”

Ø   All Medical Grade Network (“MGN”) Operations related documentation, processes, methodologies, and historical information in written and electronic form.

Ø   Business name of:  “Bluegate”

Schedule 1.2 – Excluded Assets

1)   All rights and claims of Seller under any of the Seller’s insurance policies;

2)   All assets of any of Seller’s employee benefit plans;

3)   All outstanding receivables dated prior to the Effective Date;

4)   All claims, rights and interest in and to any prepayment or refunds of federal, provincial, state or local franchise, income or other taxes or fees of any nature whatsoever which relate solely to the period up to and including the date of this Agreement; and

5)   All of Seller’s minute books and other books and records relating to internal corporate matters, and all other books and records not related to the business conducted with the Assets.

Schedule 1.4 – List of Assumed Liabilities

To be finalized by the Completion Date in the reconciliation process.

Schedule 4.3.4 –Schedule for Purchaser Contracting Services from Seller

For provision of the personnel, facilities, tools, and resources necessary for the Seller to support both the MGN and HIMS operations for the Purchaser commencing on the Effective Date through the Completion Date:

Service Period	Amount	Payment Due Date
November 8 – 30, 2009	$  75,000	November 30, 2009
December 2009	$  94,000	December 31, 2009
Total	$169,000	*

* This amount to be adjusted to reflect any reduction in resources for the MGN or HIMS work force and the actual amount paid will be predicated upon the reconciliation of accounts outlined in the Agreement.

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EX-10.2

Exhibit 10.2

SEPARATION AGREEMENT AND MUTUAL RELEASE IN FULL

THIS SEPARATION AGREEMENT AND MUTUAL RELEASE IN FULL (this “Agreement”) is made by and between Manfred Sternberg (the “Former Director”) and Bluegate Corporation, a Nevada corporation (together with its subsidiaries, the “Company”).

PRELIMINARY STATEMENT

The Former Director served on the Board of Directors of the Company;

The Former Director holds shares of the Company’s common stock and stock options exercisable for shares of the Company’s common stock; and

The Former Director and the Company desire to settle fully and finally all matters between them, including any matters that may have arisen out of Former Director’s service on the Board of Directors and his employment with the Company and his separation therefrom.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, the Former Director and the Company agree as follows:

1.The Former Director’s employment with the Company terminated effective as of the close of business on July 30, 2009 (the “Separation Date”).

2.The Former Director resigned as a Director of the Company, such resignation took effect as of the close of business on October 28, 2009 (“the Resignation Date”).

3.The Former Director agrees that he will not, directly or indirectly, and will not cause or permit any person or entity controlled by him to:  a) make or in any way participate in any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote, or seek to advise or influence any person with respect to the voting of any voting securities of the Company; b) form, join, or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Act of 1933, as amended) with respect to any voting securities of the Company; c) form, join, or in any way participate in any shareholder action regarding the Company; and/or d) advise, assist or encourage any other persons in connection with any of the foregoing.

4.For a period of five years after the Effective Date, without the prior written consent of the Board of Directors of the Company, the Former Director agrees that he will not, directly or indirectly, and will not cause or permit any person or entity controlled by him to:  (a) induce or attempt to induce any employee to leave the employ of the Company or an independent contractor to terminate its retention by the Company, (b) solicit for employment, attempt to employ or employ (whether as an employee, independent contractor or otherwise) any employee or independent contractor of the Company or (c) in any way interfere with the relationship between the Company and any of its employees or independent contractors.

5.The Former Director and Company agrees that he/it will not make any disparaging comments regarding the other or any of its former, current, or future stockholders, directors, officers, or employees.  The phrase “disparaging comments” will mean any comment, remark, or statement, whether written or oral, that is harmful to the reputation of the Former Director or Company or any such other person in the community.

6.The Former Director agrees that he will fully vacate the Company’s offices on or prior to the earlier of the date the Company vacates the offices or February 28, 2010 (the “Office Term”) and will return to the Company no later than the date he vacates the Company’s offices all credit cards, keys, identification, computer software and hardware, telecommunications equipment, and all other property belonging to the Company.

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7.The Company agrees that it will return to the Former Director no later than the date he vacates the Company’s offices all personal information along with the furniture, artwork, and computer software and hardware (as detailed in Schedule 2) belonging to the Former Director.  The Company also agrees to provide the Former Director with a schedule listing the capital contributions made by the Former Director to the Company to date that can be readily documented, with no warranty of accuracy by the Company.  The Company further agrees that any and all public filings needed to be completed as  a result of this Agreement will be done at Company expense, including but not limited to Form 4 and 13D and an Opinion Letter to remove the restrictive legend from Former Directors’ and his affiliates’ restricted shares.

8.Both the Company and the Former Director agree that during the Office Term the Former Director will continue to have access to the common areas of the space (e.g. conference room, reception area, kitchen, etc.) and use of general administrative support (i.e. reception, telephone, internet access feed, and copier); however, all Information Technology (“IT”) and telecommunications related support (e.g. IT network infrastructure, new telephony services, server access, IT consulting and support services, etc.) from Company will be terminated on November 15, 2009.

9. The Former Director hereby waives any rights or entitlements to any employee benefits or other obligations of the Company (including any wage claims, Director’s fees, vehicle allowances or expense account reimbursements) up to and including the Resignation Date, other than those rights or entitlements which may be required by law; provided that:  (a) the Former Director will be entitled to receive any 401k plan benefits for which the Former Director is eligible in accordance with the terms of the plans and law based on the Former Director’s compensation and length of service through the Separation Date and all post-termination health insurance continuation benefits required to be provided by law and (b) this Agreement will not be deemed to constitute a waiver of the Former Director’s rights, if any, to indemnification or advancement of expenses in accordance with the certificate or articles of incorporation and bylaws of the Company, as in effect as of the Effective Date, with respect to any claim, action, suit or proceeding relating to or involving the Former Director’s service as a Director or officer of the Company prior to the Resignation Date.

10.As consideration for the Former Director’s acceptance of the terms and conditions in this Agreement, the Company will pay a separation payment of $44,369 (the “Separation Payment”), which will be subject to all applicable federal and state tax withholding and statutory deductions, and is specifically represented by Company as being a repayment of a promissory note to Former Director for charges made by Company using charge and credit cards of the Former Director.  The Separation Payment will be made no later than November 11, 2009 and serves as the primary consideration for Former Director entering into this agreement.

11.In exchange for the valuable consideration hereunder:

(a)The Former Director, for and on behalf of himself and his heirs, beneficiaries, executors, administrators, attorneys, successors and assigns, hereby releases and waives all claims, causes of action and demands of any kind against the Company, any of its affiliates (including each stockholder of the Company), or any creditors of the Company, any of their respective employee plans and any of their respective stockholders, Directors, officers, trustees, employees, attorneys and agents, in their individual and official capacities, and all of their predecessors, heirs, executors, administrators, successors and assigns (collectively, the “Released Parties”), which the Former Director had, has or may have through the date the Former Director executes this Agreement, whether known or unknown, arising out of or relating to:  (i) the Former Director’s employment with the Company or the termination thereof, (ii) the Former Director’s service as a Director or officer of the Company or his resignation as a Director or officer, (iii) the Former Director’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, (iv) any notes, indebtedness, obligations, liabilities of the Company, including, without limitation, the amounts described in Schedule 1, or (v) to matters otherwise arising up to and including the Resignation Date, including any wages, bonuses or commissions, or on account of any alleged conduct of the Released Parties which might be alleged by the Former Director to constitute race, color, sex, religious, age, national origin, ancestry, genetic information or disability discrimination, or any claim or right under Title VII of the Civil Rights Act of 1964, as amended,  the Civil Rights Act of 1991 and the laws amended thereby, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act, the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Employee Retirement Income Security Act of 1974, the Texas Commission on Human Rights Act, the Texas Persons with Mental Retardation Act, the Texas Tests for Acquired Immune Deficiency Syndrome and Related Disorders law, Texas wage and hour laws, or any other provision of federal, state or local statutory or common law or regulation.  Nothing in this paragraph shall be construed as a waiver or relinquishment of any right that Former Director may have in any stock, options, or warrants that currently exist and that are held by Former Director, the terms of which are in full force and effect and shall not be modified hereby.  In the event anyone claiming to be released hereby files any claim against the Former Director, this release will become null and void and of no effect for that party making the claim against the Former Director. 

(b)The Company, for and on behalf of itself and its heirs, beneficiaries, executors, administrators, attorneys, successors and assigns, hereby releases and waives all claims, causes of action and demands of any kind against the Former Director in his individual and official capacities, and against Manfred Sternberg & Associates, PC and its employees, which the Company had, has or may have through the date the Former Director executes this Agreement, whether known or unknown, arising out of or relating to:  (i) the Former Director’s employment with the Company or the termination thereof, (ii) the Former Director’s service as a director or officer of the Company or his resignation as a director or officer, (iii) the Former Director’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, (iv) any notes, indebtedness, obligations, liabilities of the Former Director, including, without limitation, the amounts described in Schedule 1, or (v) to matters otherwise arising up to and including the Resignation Date, including any wages, bonuses or commissions, or on account of any alleged conduct of the Former Director which might be alleged by the Company.

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12.To the extent not prohibited by applicable law, the Former Director and the Company hereby warrants that he/it has and will not institute any lawsuit, claim, action, charge, complaint, petition, appeal, accusatory pleading, or proceeding of any kind against the other Party or any other Released Party, and both Parties waive, or at a minimum assign to the other Party, any and all rights to any and all forms of recovery or compensation from any legal action brought by the other Party or on that other Party’s behalf in connection with the matters that are the subject of this Agreement.  To the extent not prohibited by applicable law, in the event that a lawsuit or any of the foregoing actions are filed by the Former Director or the Company in breach of this covenant, it is expressly understood and agreed that:

(a)   This covenant will constitute a complete defense to any such lawsuit or action.

(b)   Any material breach by a Party of any of the terms contained in this Agreement relieves the other Party of any and all obligations it may have pursuant to this Agreement.

(c)   Should a Party bring any type of administrative or legal action arising out of claims waived under this Agreement, the Party bringing the action will bear all legal fees and costs associated therewith, including those of any Released Parties.

13.For a period of five years after the Effective Date, as necessary, the Former Director agrees to provide thorough and accurate information and testimony voluntarily to or on behalf of the Company or any affiliate thereof regarding any investigation, litigation or claims initiated by or against the Company or any affiliate thereof or by any entity or person (a “Proceeding”), but he agrees not to disclose or to discuss with anyone who is not directing or assisting in any Proceeding, other than his attorney, the fact of or the subject matter of any Proceeding, except as required by law.  The Former Director will take all reasonable steps to cooperate fully with the Company or any affiliate in supplying thorough and accurate information in each Proceeding and during the defense or prosecution thereof.  The Former Director will make commercially reasonable efforts to accommodate his schedule to cooperate with the Company or any affiliate and provide such information as soon as is reasonable under the circumstances.  In requesting information the Company or any affiliate will attempt to work with the Former Director to arrange times that reasonably accommodate his schedule and, to the extent permitted by law, the Company will reimburse the Former Director for reasonable travel, commuting, parking or other similar out-of-pocket expenses incurred by him in connection with providing such information or testimony.

14.This Agreement will be binding upon and will inure to the benefit of the successors, assigns, heirs, executors and administrators of the respective parties.

15.The Former Director acknowledges and agrees that the Company has not made any representations to the Former Director regarding the tax consequences of any amounts received by the Former Director pursuant to this Agreement and further the Former Director agrees that he will be solely responsible for payment of all his personal tax liabilities due on any and all payments to him set forth in this Agreement, including federal, state and local taxes, and interest and penalties, which are or may become due.

16.Nothing contained in this Agreement, or the fact of its submission to the Former Director, will be admissible evidence in any judicial, administrative or other legal proceeding, or be construed as an admission of any liability or wrongdoing on the part of the Company or the other Released Parties of any violation of federal or state statutory or common law or regulation.

17.Should any provision of this Agreement be held invalid or unenforceable by operation of law or otherwise, all other provisions will remain in full force and effect; provided that a court may modify any provision to make it valid and enforceable.

18.This Agreement sets forth the entire agreement between the parties and supersedes any and all prior oral or written agreements or understandings between the Former Director and the Company.  This Agreement may not be altered, amended, or modified except by a further written document signed by the Former Director and an authorized officer of the Company.

19.This Agreement will be construed and enforced in accordance with the laws of the State of Texas without reference to its or any other state’s conflicts of law rules.

20.This Agreement may be executed in counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.  A facsimile signature will be deemed to be an original signature for all purposes.

21.The Former Director acknowledges that he has had adequate time to review this Agreement, that he has been advised by the Company to consult with legal counsel of his choosing regarding this Agreement, that he has received adequate consideration for this Agreement, and that he enters into this Agreement freely, knowingly and voluntarily.

22.The provisions of this Agreement shall become effective once both parties have executed the Agreement below (the “Effective Date”).

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IN WITNESS WHEREOF, the Parties hereto have executed this Separation Agreement and Mutual Release In Full as of the date specified below.

Bluegate Corporation

By: /s/ Charles E. Leibold November 7, 2009

        Charles E. Leibold

        Chief Financial Officer

Accepted and agreed to this Seventh (7th) day of November, 2009.

By: /s/ Manfred Sternberg

        Manfred Sternberg

Witness: /s/ Jimmy Riggle

                Jimmy Riggle

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SCHEDULE 1

Manfred Sternberg Amounts Payable and Accrued Through 10/31/09

Amount		Description
$	34,451	Note payable as of 10/31/09
$	7,922	Accrued interest on note payable as of 10/31/09
$	22,499	Accrued director's fees through 10/31/09
$	6,000	Accrued vehicle allowance from 5/1/08 through 12/31/08
$	1,996	Accrued interest on payroll checks held until cashed
$	72,868	Total Accrued

Manfred Sternberg Texas Wage Claim = $38,000+

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SCHEDULE 2

Manfred Sternberg – Furniture, Artwork, and Computer Software and Hardware

All furniture fixtures and equipment (including computers and printers) in the following offices, last occupied by:

Manfred Sternberg (Dell #:  26TM361)

Dana Kirkpatrick (Dell #:  JN68491)

File room (between Manfred’s and Dana’s office)

Barbara Fullerton (Dell #:  27W6CC1)

Nate Lewis

Other

Manfred Sternberg & Associates, PC, Server and Monitor in Server Room

Manfred Sternberg & Associates, PC phone numbers; 713-622-4300 and 713-622-9899

Manfred Sternberg & Associates, PC, Suite 640 number

Dell Laptop in Manfred Sternberg’s possession (Dell #:  6DN3LF1)

All Artwork on all walls in Suite 600 & 640

All (6) Mesh netting chairs throughout the office

All (6) leather and stained wood chairs throughout the office.

Antique table in Trent’s office

Chest of Drawers in Conference Room

Movable White Boards in Steve’s Office and in Conference Room

Movable Computer shelf in Tech area

Sammy the Sailfish

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EX-10.3

Exhibit 10.3

SEPARATION AGREEMENT AND MUTUAL RELEASE IN FULL

THIS SEPARATION AGREEMENT AND MUTUAL RELEASE IN FULL (this “Agreement”) is made by and between William Koehler (the “Former Director”) and Bluegate Corporation, a Nevada corporation (together with its subsidiaries, the “Company”).

PRELIMINARY STATEMENT

The Former Director served on the Board of Directors of the Company;

The Former Director holds shares of the Company’s common stock and stock options exercisable for shares of the Company’s common stock; and

The Former Director and the Company desire to settle fully and finally all matters between them, including any matters that may have arisen out of Former Director’s service on the Board of Directors and his employment with the Company and his separation therefrom.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, the Former Director and the Company agree as follows:

1.   The Former Director’s employment with the Company terminated effective as of the close of business on May 31, 2009 (the “Separation Date”).

2.   The Former Director resigned as a Director of the Company, such resignation took effect as of the close of business on October 27, 2009 (“the Resignation Date”).

3.   The Former Director agrees that he will not, directly or indirectly, and will not cause or permit any person or entity controlled by him to:  a) make or in any way participate in any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote, or seek to advise or influence any person with respect to the voting of any voting securities of the Company; b) form, join, or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Securities Act of 1933, as amended) with respect to any voting securities of the Company; c) form, join, or in any way participate in any shareholder action regarding the Company; and/or d) advise, assist or encourage any other persons in connection with any of the foregoing.

4.   For a period of five years after the Effective Date, without the prior written consent of the Board of Directors of the Company, the Former Director agrees that he will not, directly or indirectly, and will not cause or permit any person or entity controlled by him to:  (a) induce or attempt to induce any employee to leave the employ of the Company or an independent contractor to terminate its retention by the Company, (b) solicit for employment, attempt to employ or employ (whether as an employee, independent contractor or otherwise) any employee or independent contractor of the Company or (c) in any way interfere with the relationship between the Company and any of its employees or independent contractors.

5.   The Former Director and Company agrees that he/it will not make any disparaging comments regarding the other or any of its former, current, or future stockholders, directors, officers, or employees.  The phrase “disparaging comments” will mean any comment, remark, or statement, whether written or oral, that is harmful to the reputation of the Former Director or Company or any such other person in the community.

6.   The Former Director agrees that on or prior to November 11, 2009 he will return to the Company all credit cards, keys, identification, computer software and hardware, telecommunications equipment, and all other property belonging to the Company.

7.   The Company agrees that it will return to the Former Director no later than the date he vacates the Company’s offices all personal information along with the furniture, artwork, and computer software and hardware (as detailed in Schedule 2) belonging to the Former Director.  The Company also agrees to provide the Former Director with a schedule listing the capital contributions made by the Former Director to the Company to date that can be readily documented, with no warranty of accuracy by the Company.  The Company further agrees that any and all public filings needed to be completed as  a result of this Agreement will be done at Company expense, including but not limited to Form 4 and 13D and an Opinion Letter to remove the restrictive legend from Former Directors’ and his affiliates’ restricted shares.

8.   The Former Director hereby waives any rights or entitlements to any employee benefits or other obligations of the Company (including any wage claims, Director’s fees, vehicle allowances or expense account reimbursements) up to and including the Resignation Date, other than those rights or entitlements which may be required by law; provided that:  (a) the Former Director will be entitled to receive any 401k plan benefits for which the Former Director is eligible in accordance with the terms of the plans and law based on the Former Director’s compensation and length of service through the Separation Date and all post-termination health insurance continuation benefits required to be provided by law and (b) this Agreement will not be deemed to constitute a waiver of the Former Director’s rights, if any, to indemnification or advancement of expenses in accordance with the certificate or articles of incorporation and bylaws of the Company, as in effect as of the Effective Date, with respect to any claim, action, suit or proceeding relating to or involving the Former Director’s service as a Director or officer of the Company prior to the Resignation Date.

9.   As consideration for the Former Director’s acceptance of the terms and conditions in this Agreement, the Company will pay a separation payment of One Dollar (the “Separation Payment”), which will be subject to all applicable federal and state tax withholding and statutory deductions.  The Separation Payment will be made no later than November 11, 2009.

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10.   In exchange for the valuable consideration hereunder:

a.   The Former Director, for and on behalf of himself and his heirs, beneficiaries, executors, administrators, attorneys, successors and assigns, hereby releases and waives all claims, causes of action and demands of any kind against the Company, any of its affiliates (including each stockholder of the Company), or any creditors of the Company, any of their respective employee plans and any of their respective stockholders, Directors, officers, trustees, employees, attorneys and agents, in their individual and official capacities, and all of their predecessors, heirs, executors, administrators, successors and assigns (collectively, the “Released Parties”), which the Former Director had, has or may have through the date the Former Director executes this Agreement, whether known or unknown, arising out of or relating to:  (i) the Former Director’s employment with the Company or the termination thereof, (ii) the Former Director’s service as a Director or officer of the Company or his resignation as a Director or officer, (iii) the Former Director’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, (iv) any notes, indebtedness, obligations, liabilities of the Company, including, without limitation, the amounts described in Schedule 1, or (v) to matters otherwise arising up to and including the Resignation Date, including any wages, bonuses or commissions, or on account of any alleged conduct of the Released Parties which might be alleged by the Former Director to constitute race, color, sex, religious, age, national origin, ancestry, genetic information or disability discrimination, or any claim or right under Title VII of the Civil Rights Act of 1964, as amended,  the Civil Rights Act of 1991 and the laws amended thereby, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act, the Family and Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, the Employee Retirement Income Security Act of 1974, the Texas Commission on Human Rights Act, the Texas Persons with Mental Retardation Act, the Texas Tests for Acquired Immune Deficiency Syndrome and Related Disorders law, Texas wage and hour laws, or any other provision of federal, state or local statutory or common law or regulation.  Nothing in this paragraph shall be construed as a waiver or relinquishment of any right that Former Director may have in any stock, options, or warrants that currently exist and that are held by Former Director, the terms of which are in full force and effect and shall not be modified hereby.  In the event anyone claiming to be released hereby files any claim against the Former Director, this release will become null and void and of no effect for that party making the claim against the Former Director. 

b.   The Company, for and on behalf of itself and its heirs, beneficiaries, executors, administrators, attorneys, successors and assigns, hereby releases and waives all claims, causes of action and demands of any kind against the Former Director in his individual and official capacities, which the Company had, has or may have through the date the Former Director executes this Agreement, whether known or unknown, arising out of or relating to:  (i) the Former Director’s employment with the Company or the termination thereof, (ii) the Former Director’s service as a director or officer of the Company or his resignation as a director or officer, (iii) the Former Director’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, (iv) any notes, indebtedness, obligations, liabilities of the Former Director, including, without limitation, the amounts described in Schedule 1, or (v) to matters otherwise arising up to and including the Resignation Date, including any wages, bonuses or commissions, or on account of any alleged conduct of the Former Director which might be alleged by the Company.

11.   To the extent not prohibited by applicable law, the Former Director and the Company hereby warrants that he/it has and will not institute any lawsuit, claim, action, charge, complaint, petition, appeal, accusatory pleading, or proceeding of any kind against the other Party or any other Released Party, and both Parties waive, or at a minimum assign to the other Party, any and all rights to any and all forms of recovery or compensation from any legal action brought by the other Party or on that other Party’s behalf in connection with the matters that are the subject of this Agreement.  To the extent not prohibited by applicable law, in the event that a lawsuit or any of the foregoing actions are filed by the Former Director or the Company in breach of this covenant, it is expressly understood and agreed that:

a.   This covenant will constitute a complete defense to any such lawsuit or action.

b.   Any material breach by a Party of any of the terms contained in this Agreement relieves the other Party of any and all obligations it may have pursuant to this Agreement.

c.   Should a Party bring any type of administrative or legal action arising out of claims waived under this Agreement, the Party bringing the action will bear all legal fees and costs associated therewith, including those of any Released Parties.

12.   For a period of five years after the Effective Date, as necessary, the Former Director agrees to provide thorough and accurate information and testimony voluntarily to or on behalf of the Company or any affiliate thereof regarding any investigation, litigation or claims initiated by or against the Company or any affiliate thereof or by any entity or person (a “Proceeding”), but he agrees not to disclose or to discuss with anyone who is not directing or assisting in any Proceeding, other than his attorney, the fact of or the subject matter of any Proceeding, except as required by law.  The Former Director will take all reasonable steps to cooperate fully with the Company or any affiliate in supplying thorough and accurate information in each Proceeding and during the defense or prosecution thereof.  The Former Director will make commercially reasonable efforts to accommodate his schedule to cooperate with the Company or any affiliate and provide such information as soon as is reasonable under the circumstances.  In requesting information the Company or any affiliate will attempt to work with the Former Director to arrange times that reasonably accommodate his schedule and, to the extent permitted by law, the Company will reimburse the Former Director for reasonable travel, commuting, parking or other similar out-of-pocket expenses incurred by him in connection with providing such information or testimony.

13.   This Agreement will be binding upon and will inure to the benefit of the successors, assigns, heirs, executors and administrators of the respective parties.

14.   The Former Director acknowledges and agrees that the Company has not made any representations to the Former Director regarding the tax consequences of any amounts received by the Former Director pursuant to this Agreement and further the Former Director agrees that he will be solely responsible for payment of all his personal tax liabilities due on any and all payments to him set forth in this Agreement, including federal, state and local taxes, and interest and penalties, which are or may become due.

15.   Nothing contained in this Agreement, or the fact of its submission to the Former Director, will be admissible evidence in any judicial, administrative or other legal proceeding, or be construed as an admission of any liability or wrongdoing on the part of the Company or the other Released Parties of any violation of federal or state statutory or common law or regulation.

16.   Should any provision of this Agreement be held invalid or unenforceable by operation of law or otherwise, all other provisions will remain in full force and effect; provided that a court may modify any provision to make it valid and enforceable.

17.   This Agreement sets forth the entire agreement between the parties and supersedes any and all prior oral or written agreements or understandings between the Former Director and the Company.  This Agreement may not be altered, amended, or modified except by a further written document signed by the Former Director and an authorized officer of the Company.

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18.   This Agreement will be construed and enforced in accordance with the laws of the State of Texas without reference to its or any other state’s conflicts of law rules.

19.   This Agreement may be executed in counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.  A facsimile signature will be deemed to be an original signature for all purposes.

20.   The Former Director acknowledges that he has had adequate time to review this Agreement, that he has been advised by the Company to consult with legal counsel of his choosing regarding this Agreement, that he has received adequate consideration for this Agreement, and that he enters into this Agreement freely, knowingly and voluntarily.

21.   The provisions of this Agreement shall become effective once both parties have executed the Agreement below (the “Effective Date”).

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IN WITNESS WHEREOF, the Parties hereto have executed this Separation Agreement and Mutual Release In Full as of the date specified below.

Bluegate Corporation

By: /s/ Charles E. Leibold November 7, 2009

        Charles E. Leibold

        Chief Financial Officer

Accepted and agreed to this Seventh (7th) day of November, 2009

By: /s/ William Koehler

        William Koehler

Witness: /s/ Jimmy Riggle

                Jimmy Riggle

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SCHEDULE 1

William Koehler Amounts Payable and Accrued Through 10/31/09

Amount		Description
$	34,628	Note payable as of 10/31/09
$	9,004	Accrued interest on note payable as of 10/31/09
$	22,499	Accrued director's fees through 10/31/09
$	6,000	Accrued vehicle allowance from 5/1/08 through 12/31/08
$	742	Accrued interest on payroll checks held until cashed
$	72,873	Total Accrued

William Koehler Texas Wage Claim = $42,000

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SCHEDULE 2

William Koehler – Furniture, Artwork, and Computer Software and Hardware

Reference Asset Sale and Purchase Agreement for Trilliant Technology Group (“TTG”) to be purchased by Trilliant Corporation from Bluegate Corporation.

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EX-10.4

Exhibit 10.4

ASSET SALE AND PURCHASE AGREEMENT

 THIS ASSET SALE AND PURCHASE AGREEMENT ("Agreement") is made and entered into effective as of the Seventh (7th) day of November, 2009 by and between:

·   Trilliant Technology Group, Inc. a Nevada corporation (“TTG”), and Bluegate Corporation a Nevada corporation (“Bluegate”) who collectively shall be known as the “Seller,” and

·   Trilliant Corporation (“Purchaser”), a Texas corporation.

 WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Purchaser desires to acquire from Seller full right, title, and interest in and to all of the personal property of every kind or nature used in the business of TTG (the “Assets”), including, without limitation, the personal property that is more fully described in Article One below but not including the “Excluded Assets” as defined hereinafter, free and clear of any security interest, lien, mortgage, encumbrance, claim, or limitation or restriction on the transfer thereof (collectively, “Encumbrances”); and

WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Seller desires to sell the Assets to Purchaser;

NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations, and warranties set forth hereinafter, and other good and valuable consideration (the receipt, adequacy, and sufficiency of which each of Seller and Purchaser hereby acknowledges) and subject to the terms, provisions, and conditions hereof, each of Seller and Purchaser hereby agree as follows:

ARTICLE ONE

1   Sale and Purchase of Assets.

1.1   In consideration of the payment of money to Seller pursuant to Section 1.3 below, Seller does hereby assign, transfer, and convey to Purchaser (without any further act or deed except as otherwise indicated herein), full right, title, and interest in and to all of the Assets, and Purchaser does hereby acquire and receive full right, title, and interest in and to the Assets, wherever located and regardless of whether or not reflected on Seller's books and records, free and clear of any Encumbrances.  Without any limitation on anything stated above, the Assets consist of all of the following:

1.1.1   Equipment, computer equipment, files, and other tangible personal property listed on Schedule 1.1.1 hereto, which is being provided on an “as is” basis with the Company providing no warranty of accuracy of the specific hardware and software on listed devices and/or the operational and functional capacity of the items;

1.1.2   Accounts receivable owed to TTG and going to Purchaser (the “Accounts Receivable”) listed on Schedule 1.1.2 hereto;

1.1.3   Computer programs and software listed on Schedule 1.1.3 hereto;

1.1.4   Telephone and facsimile numbers, internet domain sites, e-mail addresses, internet and website addresses listed on Schedule l.1.4 hereto;

1.1.5   Records of TTG's business (copies of which Seller may retain at its cost), including  property records, customer lists, supplier lists, catalogs, and brochures; and

1.1.6   TTG's Intellectual Property (as defined in Section 2.4) and listed on Schedule l.l.6 hereto, and any and all other intangible property or rights whatsoever owned by TTG and the goodwill of TTG's business symbolized by such Intellectual Property.

1.2   Excluded Assets. Seller is not selling to Purchaser, and Purchaser is not acquiring, any of the items listed on Schedule 1.2 hereto, which items shall not constitute “Assets” for any purpose hereof.

1.3   Purchase Price, and Payment. Adjustment and Allocation Thereof.

1.3.1   The aggregate purchase price for the Assets (the “Purchase Price”) shall be Five Thousand Dollars ($5,000).

1.3.2   Seller and Purchaser agree that they shall prepare and file their respective federal and any state or local income tax returns, and any sales tax returns or other filings.

1.4   Assumed Liabilities. Purchaser hereby agrees to assume and be obligated to pay, perform or discharge only those liabilities that are expressly set forth on Schedule 1.4 hereto, if any (referred to hereinafter as the “Assumed Liabilities”).  Purchaser assumes no obligations, liabilities and debts other than the Assumed Liabilities.  Seller agrees to pay or perform timely any and all obligations, liabilities, and debts of Seller other than for the Assumed Liabilities.

1.5   Seller's Deliveries. Prior to or on the date hereof, Seller delivered, except as set forth on Schedule 1.5 hereto,:

a.    Such deeds, bills of sale, covenants of warranty, assignments, endorsements, consents, and other good and sufficient instruments and documents of conveyance and transfer in a form satisfactory to Seller and Purchaser, and necessary documents of title, as shall be necessary and effective to convey, transfer and assign to, and vest in, Purchaser all of Seller's right, title and interest in and to the Assets;

b.    Evidence satisfactory to Purchaser that any and all security interests and liens on the Assets (other than those being assumed) have been released;

c.    Copies of all required third party consents to the sale of the Assets, that are required and have been obtained;

d.    All of the agreements, contracts, commitments, leases, plans, bids, quotations, proposals, licenses, permits, authorizations, instruments, computer programs and software, manuals and guidebooks, price books and price lists, customer lists, supplier lists, sales records, files, correspondence, and other documents, books, records, papers, files and data belonging to Seller which are part of the Assets; and

e.    Actual possession and operating control of the Assets.

1.6   Purchaser's Deliveries.  Prior to or on the date hereof, Purchaser delivered:

a.    Copies of all of the resolutions adopted by Purchaser's Board of Directors and, if necessary, stockholders relating to the transactions contemplated by this Agreement, certified on the date hereof to be complete and correct by appropriate officers of Purchaser, and

   b.Cash payment of the Purchase Price.

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ARTICLE TWO

2   Representations, Warranties and Agreements of Seller

The Seller hereby represents, warrants, and agrees to and with Purchaser that:

2.1   Organization and Standing of Seller.   Seller’s a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada.  Seller has full requisite corporate power and authority to carry on its business as it is now being conducted.

2.2   Capacity to Enter into Agreement.  Seller has full right, power, and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder.

2.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not (a) violate any judgment against, or binding upon, Seller or upon the assets of Seller, (b) result in the creation of any lien, charge, or encumbrance upon any assets of Seller pursuant to the terms of any such contract, or (c) violate any provision in the charter documents, bylaws, or any other agreement affecting the governance and control of Seller.

2.4   Intellectual Property. Schedule 1.1.6 contains a listing and summary description of all of TTG's patents, trademarks, service marks, trade names, trade dress, logos, business names, copyrights, and registered designs, and registrations and applications thereof, trade secrets and confidential know-how, business information and other intellectual property, including, but not limited to, computer software, databases, source code, and documentation; product formulations; drawings; technical specifications; manufacturing data; and test and development data (the foregoing intellectual property is collectively referred to hereinafter. as the “Intellectual Property”).  Except as set forth on Schedule 2.4 hereto,

 a.   TTG possesses all intellectual property necessary to the conduct of its businesses;

b.    Seller shall retain the right to keep a copy of any documentation should they choose, but may only use it in defense of a claim against their organization. Under no circumstances does the Seller retain the right to use the Intellectual Property other than in the defense of a claim;

c.TTG owns all right, title, and interest in and to all of the Intellectual Property;

 d.    There have been no claims made against TTG for the assertion of the invalidity, abuse, misuse, or unenforceability of any Intellectual Property, and there are no grounds for the same;

 e.    Neither Seller nor TTG has received a notice of conflict with the asserted rights of others; and

 f.    The conduct of TTG's business has not infringed on any rights of others and, to Seller's best knowledge, no other person has infringed the Intellectual Property.

2.5   Employees.  There are no employees of TTG.

2.6   Litigation.  Except as set forth on Schedule 2.6 hereto,

 a.   Seller and the Assets are not subject to any pending, or to Seller's best knowledge, threatened litigation, proceeding or administrative investigation of any kind or nature (including, without limitation, any matter (including audits) involving the Internal Revenue Service, or other federal or state taxing authorities);

 b.   Seller is not in default with respect to any judgment, order, writ, injunction, decree, or award applicable to it or the Assets of any court or other governmental instrumentality or arbitrator; and

 c.   Seller has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and the Seller's best knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

2.7   Compliance with Law.  Seller is not in violation of, or in default with respect to, or in alleged violation of or alleged default with respect to, any applicable law, rule, regulation, permit, or any writ or decree of any court or any governmental commission, board, bureau, agency, or instrumentality, including without limitation, any laws, ordinances, rules, regulations, permits, or orders relating to the business of TTG, or the business operations and practices, health and safety, and employment practices of TTG.

2.8   Taxes.  Except as set forth on Schedule 2.8 hereto, Seller has filed, when due, with all appropriate governmental agencies, all tax returns, estimates, reports, and statements to be filed by it (collectively, the “Returns”).

 a.  Each of the Returns is true, complete, proper, and accurate in all respects;

 b.   Seller has paid, when due and payable, all requisite income taxes, sales, use, property and transfer taxes, levies, duties, licenses and registration fees, and charges of any nature whatsoever and workers' compensation and unemployment taxes, including interest and penalties thereon.  Seller has withheld all tax required to be withheld under applicable tax laws and regulations, and such withholdings have either been paid to the respective governmental agencies or set aside in accounts for such purpose;

 c.   Seller has not given or been requested to give, or executed, any extension of time or waiver of any statute of limitations with respect to Federal, state, or other political subdivision income or other tax for any period;

 d.   Seller has not received any notice of deficiency or assessment issued or proposed deficiency or assessment by the Internal Revenue Service or any other taxing authority; and

 e.   There is no pending audit or inquiry of Seller, nor has Seller received any oral or written notice of any proposed audit or inquiry by any taxing authority or jurisdiction.

2.9   Finder's Fees.  None of Seller or anyone acting on their behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage, or finder's fee or commission in connection with this Agreement or the transactions contemplated hereby.

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ARTICLE THREE

3   Representations, Warranties, and Agreements of Purchaser

3.1   Organization and Standing of Purchaser.  Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of Texas.  Purchaser has full requisite power and authority to carry on its business as it is now being conducted.  Purchaser is duly authorized and qualified to carry on its business in the manner as now conducted in each state in which authorization and qualification is required.

3.2   Capacity to Enter into Agreement.  Purchaser has full right, power, and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder. The execution and delivery by Purchaser of this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith have been authorized by all necessary action by Purchaser.  When this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith are executed by Purchaser and delivered to Seller, this Agreement and such other agreements, documents, and instruments will constitute the valid and binding agreements of Purchaser or enforceable against Purchaser in accordance with their respective terms, except as such enforceability may be limited by or subject to (a) any bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to creditors' rights generally; and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not:  (a) violate any judgment against, or binding upon, Purchaser or upon the assets of Purchaser, (b) result in the creation of any lien, charge, or encumbrance upon any assets of Purchaser pursuant to the terms of any such contract, or (c) violate any provision in any charter document of Purchaser, or any other agreement affecting the governance and control of Purchaser, such that any such violation, conflict, breach, termination, or creation would materially adversely affect the consummation of the transactions contemplated by this Agreement.

3.4   Litigation.  Purchaser has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and the best of Purchaser's knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

3.5   Finder's Fees.  Neither Purchaser nor anyone acting on its behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage or finder's fee, or commission in connection with this Agreement or the transactions contemplated hereby.

ARTICLE FOUR

4   Certain Agreements

Following the date hereof, each party shall execute and deliver such other documents, and take such other actions, as may be reasonably requested by the other party to vest in Purchaser full right title and interest in and to the Assets, to complete the transactions contemplated by this Agreement and to allow each party fully to enjoy and exercise the rights accorded to and acquired by it under this Agreement or any other agreement entered into pursuant hereto.

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ARTICLE FIVE

5   Survival and Indemnity

5.1   Survival of Representations and Warranties.  All of the representations and warranties made by the parties hereto in this Agreement or pursuant hereto, shall be continuing and shall survive the closing hereof and the consummation of the transactions contemplated hereby, notwithstanding any investigation at any time made by or on behalf of any party hereto, for a period of two years after the date of this Agreement.

5.2   Indemnification by Seller.  Seller shall protect, indemnify, and hold harmless Purchaser and Purchaser’s shareholders, directors, officers, employees, agents, affiliates, successors, and assigns from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, judgments, losses, damages, injuries, liabilities, obligations, expenses, and costs (including costs of litigation and attorneys' fees), arising from any breach of any agreement, representation or warranty made by any of them in this Agreement.

5.3   Indemnification by Purchaser.  Purchaser shall protect, indemnify and hold harmless Seller, and Seller's shareholders, directors, officers, members, managers, and Seller's employees, agents, affiliates, successors, and assigns, from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, judgments, losses, damages, injuries, liabilities, obligations, expenses, and costs (including costs of litigation and attorneys' fees), arising from any breach of any agreement, representation, or warranty made by it in this Agreement.

ARTICLE SIX

6   Miscellaneous

6.1   Notices.  Any notices, requests, demands, or other communications herein required or permitted to be given shall be in writing and may be personally served, sent by United States mail, sent by an overnight courier who keeps proper records regarding its deliveries, faxed, or emailed. Notice shall be deemed to have been given if personally served, when served, or if mailed, on the third business day after deposit in the United States mail with postage pre-paid by certified or registered mail and properly addressed, or if sent by overnight courier as aforesaid with charges being billed to the sender, when received by the party being notified, or if faxed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the fax was properly received, or if e-mailed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the e-mail was properly received. As used in this Agreement, the term “business day” means days other than Saturday, Sunday, and holidays recognized by Federal banks.  For purposes of this Agreement, the physical addresses, fax numbers, and e-mail addresses of the parties hereto shall be the physical addresses, fax numbers, and e-mail addresses as set forth on the signature pages of this Agreement.  Any party to be notified hereunder may change its physical address, fax number, and e-mail address by notifying each other party hereto in writing as to the new physical address, fax number, and e-mail address for sending notices.

6.2   Counterparts.  This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one and the same instrument.

6.3   Amendments and Waivers.  This Agreement may be amended, modified, or superseded only by written instrument executed by all parties hereto.  Any waiver of the terms, provisions, agreements, covenants, representations, warranties, or conditions hereof shall be made only by a written instrument executed and delivered by the party waiving compliance.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right to enforce the same.  No waiver by any party of any condition, or of the breach of any term, provision, agreements, covenant, representation, or warranty contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or the breach of any other term, provision, agreements, covenant, representation, or warranty.

6.4   Time of Essence.  Time is of the essence in the performance of this Agreement.

6.5   Captions.  The captions contained in this Agreement are solely for convenient reference and shall not be deemed to affect the meaning or interpretation of any Article, Section, or paragraph hereof.

6.6   Entire Agreement.  This Agreement (including the schedules and exhibits hereto, the Financial Statements, and all supporting agreements referred to herein, all of which are by this reference fully incorporated into this agreement) sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements, and understandings relating to the subject matter hereof.

6.7   Assignment, and Successors and Assigns.  No party hereto may assign any of its rights, interests, or obligations under this Agreement without the prior written consent of the other parties.  All of the terms, provisions, agreements, covenants, representations, warranties, and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, permitted assigns, and successors.

6.8   Knowledge, Gender, and Certain References.  Whenever a representation or warranty made herein is made to the best of any entity's knowledge, such representation or warranty is based only on the actual knowledge or belief of the entity's management without any independent investigation on the part of such management or any other person although such management has no reason to believe that the representation or warranty made was not true as of the date which it speaks.  Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural, and pronouns stated in the masculine or the neuter gender shall include the masculine, the feminine and the neuter gender.  The terms “hereof,” “herein,” or “hereunder” shall refer to this Agreement as a whole and not to any particular Article, Section, or paragraph hereof.

6.9   Applicable Law, Mandatory Venue, and Draftsmanship. This Agreement has been executed in Harris County, Texas.  THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY BY ITS TERMS AND BY THE LOCAL, INTERNAL LAWS OF THE STATE OF TEXAS.  The parties hereto stipulate and agree that the courts of the State of Texas shall have in personam jurisdiction for any claim, lawsuit, or proceeding regarding this Agreement, and that mandatory venue for any such claim, lawsuit, or proceeding shall be in any state or federal court having competent jurisdiction located in Harris County, Texas.  Each party hereto hereby acknowledges and agrees that it has consulted legal counsel in connection with the negotiation of this Agreement and that it has bargaining power equal to that of the other parties hereto in connection with the negotiation and execution of this Agreement.  Accordingly, the parties hereto agree that the rule of contract construction that an agreement shall be construed against the draftsman shall have no application in the construction or interpretation of this Agreement.

6.10   Severability.  If any term, provision, agreements, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, agreements, covenants, and restrictions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

6.11   Costs, Expenses, and Fees.  Each party hereto agrees hereby to pay all costs, expenses, and fees incurred by it in connection with the transactions contemplated hereby, including, without limitation, all attorneys' and accountants' fees.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Bluegate Corporation

By: /s/ Charles E. Leibold

       Charles E. Leibold

       Chief Financial Officer

November 7, 2009

cleibold@bluegate.com

Trilliant Corporation

By: /s/ William Koehler

William Koehler

President

November 7, 2009

wkoehler@trilliantconsulting.com

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Schedule 1.1.1 - Lists Of Machinery, Equipment And Other Tangible Personal Property

Hardware Configuration	Device
Dell GX520, Serial Number:  B836T91 Laptop Dell D830, Serial Number:  2ZR7JF1	Lynne’s Computer(a) Lynne’s Laptop(d)
Dell GX620, Serial Number:  CKZ1PB1	Larry’s Computer(c)
Laptop Dell D820, Serial Number:  45RPLC1	Trent’s Laptop(b)
Dell Optiplex GX620, Serial Number: D61Q3B1	Bill’s Computer(e)
Plotter is not in working order per Trent	HP Plotter
a – Includes peripherals (monitor, keyboard, mouse); Office 2003 Pro; Acrobat 6.0 Std
b – Includes power supply, Office 2003 Basic and 2007 Std; Acrobat 8.0 Std & Pro; Visio 2007 and Autocad
c - Includes peripherals (monitor, keyboard, mouse); Office 2003 Basic and 2007 Pro; Project
d – Includes power supply, Office 2003 Basic; Acrobat 6.0 Std; Visio 2007; Project 2007
e - Includes peripherals (monitor, keyboard, mouse); Office Sm Bus; Acrobat 8.0 Std; Visio; Project
Furniture
Conference Room Table – (unassembled in File Room)

Schedule 1.1.2 – Accounts Receivable Owed to TTG going to Purchaser

None

Schedule 1.1.3 – Programs and Software

Software - Wholly owned by Trilliant

LTMS

Trilliant Health ID

DMS - Document Management system

Signature software solution

e-Cast - Customer accounting and shipment tracking

Schedule 1.1.4 – Lists Of Telephone And Fax Numbers, Internet Matters, And Mailboxes

1.   Houston

a.   Phone – 713-263-9200

b.   Fax – 713-263-9394

2.   Web Addresses

a.   www.Trillianttech.com

b.   www.Trilliant.net

c.   www.taughtonline.com

3.   Email Accounts

a.   All email address associated with the above Web addresses.

6

Schedule 1.1.6 – Intellectual Properties

Documentation - Wholly owned by Trilliant *

RFP's to procure voice systems - TDM and VOIP

RFP's to procure data networking equipment

RFP's to procure inside and outside cable plants

RFP's to procure telecommunications and bandwidth services

RFP's to procure maintenance service for voice, data and video equipment and networks

RFP's to procure paging systems and the cabling to support them

RFP's to procure video equipment and cable to support them

RFP's to procure Nurse call Systems and the cabling to support them

RFP's to procure Software for Medical facilities

All historical documentation in written and electronic form

*

Multiple versions for multiple vertical industries of RFP’s in both stand alone and AIA format

For all RFP documents the existing:

-Sales contracts for all RFP's

-Evaluation tools

-Executive summary's, ready for board level presentations

Schedule 1.2 – Excluded Assets

1)   All rights and claims of Seller under any of the Seller’s insurance policies;

2)   All assets of any of Seller’s employee benefit plans;

3)   All outstanding receivables dated prior to the Agreement Date;

4)   All claims, rights and interest in and to any prepayment or refunds of federal, provincial, state or local franchise, income or other taxes or fees of any nature whatsoever which relate solely to the period up to and including the date of this Agreement;

5)   All of Seller’s minute books and other books and records relating to internal corporate matters, and all other books and records not related to the business conducted with the Assets.

Schedule 1.4 – List of Assumed Liabilities

Any fees due to Lynne Randall and/or Larry Walker incurred since October 1, 2009.

Schedule 1.5 – Seller’s Deliveries

Seller will amend and file a UCC with the Secretary of State before November 30, 2009 removing all security interests and liens on the Assets and provide a copy of such filing to the Purchaser.

Schedule 2.4 – Excluded Intellectual Properties

None

Schedule 2.6 – Litigation

Trilliant Technology Group, Inc. (“TTG”) received a notice from the Internal Revenue Service (“IRS”) dated August 20, 2009 relating to Form 940 for the period ending December 31, 2006 assessing a balance, accrued interest and late payment penalty totaling $4,762.75.

Trilliant Corporation (“Trilliant”) received a notice from the Texas Workforce Commission (“TWC”) dated September 15, 2009 relating to the quarterly filing ending March 31, 2006 assessing a tax and interest for late payment of tax totaling $132.74.

We have been in contact with the IRS and TWC and were informed that the TWC did not have any filings for TTG and was applying all of the filings for both TTG and Trilliant to Trilliant. Once the TWC revises their records, we believe that both of the above matters will result in no additional amounts due.

Schedule 2.8 – Taxes

Trilliant Technology Group, Inc. (“TTG”) received a notice from the Internal Revenue Service (“IRS”) dated August 20, 2009 relating to Form 940 for the period ending December 31, 2006 assessing a balance, accrued interest and late payment penalty totaling $4,762.75.

Trilliant Corporation (“Trilliant”) received a notice from the Texas Workforce Commission (“TWC”) dated September 15, 2009 relating to the quarterly filing ending March 31, 2006 assessing a tax and interest for late payment of tax totaling $132.74.

We have been in contact with the IRS and TWC and were informed that the TWC did not have any filings for TTG and was applying all of the filings for both TTG and Trilliant to Trilliant. Once the TWC revises their records, we believe that both of the above matters will result in no additional amounts due.

7

EX-10.5

Exhibit 10.5

ASSET SALE AND PURCHASE AGREEMENT

THIS ASSET SALE AND PURCHASE AGREEMENT (“Agreement”) is made and entered into the Seventh (7th) day of November, 2009 to be fully effective and completed as of the Thirtieth  (30th) day of November, 2009 by and between Bluegate Corporation (“Bluegate” or the “Seller”), and SAI Corporation (“Purchaser”), an Illinois corporation.

WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Purchaser desires to acquire from Seller full right, title, and interest in and to all of the personal property of every kind or nature used in the Health Information Management Systems (“HIMS”) operations of Seller (the “Assets”), including, without limitation, the personal property that is more fully described in Article One below but not including the “Excluded Assets” as defined hereinafter, free and clear of any security interest, lien, mortgage, encumbrance, claim, or limitation or restriction on the transfer thereof (collectively, “Encumbrances”); and

WHEREAS, for the purchase price provided for herein and subject to the terms, provisions, and conditions set forth herein, Seller desires to sell the Assets to Purchaser;

NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements, representations, and warranties set forth hereinafter, and other good and valuable consideration (the receipt, adequacy, and sufficiency of which each of Seller and Purchaser hereby acknowledges) and subject to the terms, provisions, and conditions hereof, each of Seller and Purchaser hereby agree as follows:

ARTICLE ONE

1   Sale and Purchase of Assets.

1.1   In consideration of Purchase Price pursuant to Section 1.3 below, Seller does hereby assign, transfer, and convey to Purchaser (without any further act or deed except as otherwise indicated herein), full right, title, and interest in and to all of the Assets, and Purchaser does hereby acquire and receive full right, title, and interest in and to the Assets, wherever located and regardless of whether or not reflected on Seller's books and records, free and clear of any Encumbrances.  Without any limitation on anything stated above, the Assets consist of all of the following:

1.1.1   The equipment, computer equipment and systems, and other tangible personal property owned by Seller, including, without limitation, those items listed on Schedule 1.1.1 hereto;

1.1.2   All rights of Seller in, to and under any and all contracts, agreements, commitments, leases, licenses, and franchises (including, without limitation, those pertaining to suppliers, customers, employees, equipment, and motor vehicles), to which the HIMS Operations of Seller are a party or the Assets are subject, including, without limitation, those items listed on Schedule l.1.2 hereto;

1.1.3   All cash, cash equivalents, deposits in transit and interests in bank accounts of Seller, all accounts receivable owed to Seller (the “Accounts Receivable”), and all bills, notes, and securities of Seller, as of the date of the completion of the sale and purchase of the Assets provided for hereby and listed on Schedule 1.1.3 hereto;

1.1.4   All records of Seller's HIMS operations in whatever form (copies of which Seller may retain at its cost), including all of Seller's HIMS Operations customer lists, supplier lists, catalogs, and brochures; and

1.1.5   All of Seller's Intellectual Property (as defined in Section 2.4), and any and all other intangible property or rights whatsoever owned by Seller and the goodwill of Seller's business symbolized by such Intellectual Property (in connection with the transfer of the preceding, Seller executed all additional transfer documents requested by Purchaser) including, without limitation, those items listed on Schedule l.l.5 hereto.

1.2   Excluded Assets. Seller is not selling to Purchaser, and Purchaser is not acquiring, any of the items listed on Schedule 1.2 hereto, which items shall not constitute “Assets” for any purpose hereof.

1.3   Purchase Price, and Payment. Adjustment and Allocation Thereof.

1.3.1   The aggregate purchase price for the Assets (the “Purchase Price”) shall be composed of a cash payment of One Dollar ($1).

1.3.2   The parties agree that the cash portion of the Purchase Price will be adjusted to reflect a true-up of the accounts reflecting the transactions through the Closing Date (as defined herein).  More specifically, the accounts for both Purchaser and Seller will be adjusted to reflect both pre-payments and work not yet billed to arrive at a net change (positive or negative) to the actual amount of cash paid by Purchaser.

1.3.3   Seller and Purchaser agree that they shall prepare and file their respective federal and any state or local income tax returns, and any sales tax returns or other filings.

1.4   Assumed Liabilities. Purchaser hereby agrees to assume and be obligated to pay, perform or discharge only those liabilities that are expressly set forth on Schedule 1.4 hereto, if any (referred to hereinafter as the “Assumed Liabilities”).  Purchaser assumes no obligations, liabilities and debts other than the Assumed Liabilities.  Seller agrees to pay or perform timely any and all obligations, liabilities, and debts of Seller other than for the Assumed Liabilities.

1.5   Consents.  Seller shall use its best efforts to obtain any third party consents necessary to sell the Assets to Purchaser.  To the extent that any of the Assets are not assignable without the consent of another party and such consent has not been obtained on or prior to the date hereof, such Assets shall not be assigned or attempted to be assigned if such assignment or attempted assignment would constitute a breach thereof.  While Seller is trying to procure all necessary consents, Seller and Purchaser shall cooperate in any reasonable arrangements designed to provide to Purchaser the benefits of any such Assets, including enforcement at the cost and for the account of Purchaser of any and all rights of Seller against the other party thereto arising out of a cancellation or breach by such other party or otherwise.  If any consent necessary to sell the Assets to Purchaser is obtained after the date of this Agreement, then the related Asset not previously assigned pursuant to this Section 1.5 shall be immediately assigned upon procurement of such consent without any further act or deed.

1.6   Seller's Deliveries.  Prior to or on the date hereof, Seller delivered:

a.   Such deeds, bills of sale, covenants of warranty, assignments, endorsements, consents, and other good and sufficient instruments and documents of conveyance and transfer in a form satisfactory to Seller and Purchaser, and necessary documents of title, as shall be necessary and effective to convey, transfer and assign to, and vest in, Purchaser all of Seller's right, title and interest in and to the Assets;

b.   Evidence satisfactory to Purchaser that any and all security interests and liens on the Assets (other than those being assumed) have been released;

c.   Copies of all required third party consents to the sale of the Assets, that are required and have been obtained;

d.   All of the agreements, contracts, commitments, leases, plans, bids, quotations, proposals, licenses, permits, authorizations, instruments, computer programs and software, manuals and guidebooks, price books and price lists, customer lists, supplier lists, sales records, files, correspondence, and other documents, books, records, papers, files and data belonging to Seller which are part of the Assets;

e.   Actual possession and operating control of the Assets.

1.7   Purchaser's Deliveries. Prior to or on the date hereof, Purchaser delivered the adjusted cash amount of the Purchase Price.

1

ARTICLE TWO

2   Representations, Warranties, and Agreements of Seller

Seller hereby represents, warrants and agrees to and with Purchaser that:

2.1   Organization and Standing of Seller.   Seller’s a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada.  Seller has full requisite corporate power and authority to carry on its business as it is now being conducted.

2.2   Capacity to Enter into Agreement.  Seller has full right, power, and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder.  The execution and delivery by Seller that is an entity of this Agreement and all other agreements, documents, and instruments to be executed by Seller in connection herewith have been authorized by all necessary entity action by Seller.  When this Agreement and all other agreements, documents, and instruments to be executed by Seller in connection herewith are executed by Seller and delivered to Purchaser, this Agreement and such other agreements, documents, and instruments will constitute the valid and binding agreements of Seller enforceable against Seller in accordance with their respective terms, except as such enforceability may be limited by or subject to (a) any bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors' rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

2.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not (a) violate, conflict with or result in the breach or termination of, or otherwise give any other contracting party the right to terminate, or constitute a default (by way of substitution, novation, or otherwise) under the terms of, any contract to which Seller is a party or by which Seller is bound or by which any of the HIMS related assets of Seller are bound or affected, (b) violate any judgment against, or binding upon, Seller or upon the HIMS related assets of Seller, (c) result in the creation of any lien, charge, or encumbrance upon any of the HIMS related assets of Seller pursuant to the terms of any such contract, or (d) violate any provision in the charter documents, bylaws, or any other agreement affecting the governance and control of Seller.

2.4   Consents.  No consent, approval, or authorization of, or declaration, filing or registration with, any governmental or regulatory authority or any court or other tribunal, and no consent or waiver of any party to any material contract to which Seller is a party or is bound is required to be obtained by Seller in connection with the execution, delivery, and performance of this Agreement by Seller, such that the failure to obtain or make any such consent, approval, authorization, declaration, filing, or registration would materially adversely affect the consummation of the transactions contemplated by this Agreement.

2.5   Assets.  Each of the schedules referenced in Section 1.1 is true, correct and complete in all material respects as of the date hereof (or if different, as of the date set forth thereon).

a.   Seller has, and upon the sale of the Assets to Purchaser, Purchaser will receive, good and indefeasible title to all of the Assets, free and clear of all Encumbrances, except liens for current taxes not yet due and payable;

b.   All Assets constituting tangible personal property are in a good state of repair and operating condition, ordinary wear and tear excepted; and

c.   All of the Accounts Receivable reflected Schedule 1.1.3 hereto or created thereafter are valid, subsisting, and genuine, arose out of bona fide transactions and are current and collectible.

2.6   Contracts.  Schedule 1.1.2 contains a true, correct and complete list of the HIMS's contracts, agreements, commitments, and leases, whether or not made in the ordinary course of business.

a.   All contracts, agreements, arrangement, or commitments to which the HIMS operation is a party or the Assets are subject are in good standing, valid, and effective; and

b.    There is not, under any such lease, contract, agreement, arrangement or commitment, any existing or prospective default or event of default by Seller or event which with notice or lapse of time, or both would constitute a default; and, to Seller's best knowledge, no other party to any such lease, contract, agreement, arrangement or commitment, is in default or breach thereof nor has any event occurred which with notice or lapse of time would constitute a breach or default of any of such lease, contract, agreement, arrangement, or commitment.

2.7   Intellectual Property. Schedule 1.1.5 contains a listing and summary description of all of Seller's patents, trademarks, service marks, trade names, trade dress, logos, business names, copyrights, and registered designs, and registrations, and applications thereof, trade secrets and confidential know-how, business information and other intellectual property, including, but not limited to, computer software, databases, source code, and documentation (the foregoing intellectual property is collectively referred to hereinafter. as the “Intellectual Property”).

a.   The HIMS Operations possess all intellectual property necessary to the conduct of its businesses;

b.   Purchaser shall retain a non-exclusive, royalty free, fully paid, perpetual, irrevocable license to use and copy the Intellectual Property associated with the HIMS operation;

c.   No such loss or expiration of Intellectual Property rights is pending or reasonably foreseeable or to Seller's best knowledge, threatened;

d.   Seller owns all right, title, and interest in and to all of the Intellectual Property;

e.   There have been no claims made against Seller for the assertion of the invalidity, abuse, misuse, or unenforceability of any Intellectual Property, and there are no grounds for the same;

f.   Seller has not received a notice of conflict with the asserted rights of others; and

g.   The conduct of Seller's business has not infringed on any rights of others and, to Seller's best knowledge, no other person has infringed the Intellectual Property.

2.8   Employees.  Schedule 2.8 sets forth a true, correct, and complete list of all of the employees of Seller.

a.   Seller is not a party as an employer to any employment contract, agreement or understandings with the Employees; and

b.   Seller has satisfied (or has made adequate provision for) all salaries, wages, unemployment insurance premiums, worker compensation payments, income tax, FICA, and other deductions and any like payments required by law through and with respect to periods prior to the date hereof.

2.9   Litigation.

a.   Seller and the Assets are not subject to any pending, or to Seller's best knowledge, threatened litigation, proceeding or administrative investigation of any kind or nature (including, without limitation, any matter (including audits) involving the Internal Revenue Service, or other federal or state taxing authorities);

b.   Seller is not in default with respect to any judgment, order, writ, injunction, decree, or award applicable to it or the Assets of any court or other governmental instrumentality or arbitrator; and

c.   Seller has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and to the Seller's best knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

2.10   Compliance with Law.  Seller is not in violation of, or in default with respect to, or in alleged violation of or alleged default with respect to, any applicable law, rule, regulation, permit, or any writ or decree of any court or any governmental commission, board, bureau, agency, or instrumentality, including without limitation, any laws, ordinances, rules, regulations, permits, or orders relating to the HIMS business of Seller, or the business operations and practices, health and safety, and employment practices of Seller.  Seller has filed, when due, with all appropriate governmental agencies, all tax returns, estimates, reports, and statements to be filed by it for the HIMS related operations (collectively, the “Returns”).  Each of the Returns is true, complete, proper, and accurate in all respects;

2.11   Finder's Fees.  Neither Seller nor anyone acting on its behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage, or finder's fee or commission in connection with this Agreement or the transactions contemplated hereby.

2.12   Untrue Statements.  This Agreement, the schedules, and exhibits hereto, and all other documents and information furnished by Seller or its representatives pursuant hereto or in connection herewith do not include any untrue statement of a material fact or omit to state any material fact that is necessary to make the statements made herein and therein not misleading.

2

ARTICLE THREE

3   Representations, Warranties, and Agreements of Purchaser

3.1   Organization and Standing of Purchaser.  Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the state of Illinois.  Purchaser has full requisite power and authority to carry on its business.

3.2   Capacity to Enter into Agreement.  Purchaser has full right, power and authority to execute and deliver this Agreement and all other agreements, documents, and instruments to be executed in connection herewith and perform its obligations hereunder and thereunder. The execution and delivery by Purchaser of this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith have been authorized by all necessary action by Purchaser.  When this Agreement and all other agreements, documents, and instruments to be executed by Purchaser in connection herewith are executed by Purchaser and delivered to Seller, this Agreement and such other agreements, documents, and instruments will constitute the valid and binding agreements of Purchaser or enforceable against Purchaser in accordance with their respective terms, except as such enforceability may be limited by or subject to (a) any bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to creditors' rights generally; and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.3   Conflicts.  The execution, delivery, and consummation of the transactions contemplated by this Agreement will not violate any provision in any charter document of Purchaser, or any other agreement affecting the governance and control of Purchaser, such that any such violation, conflict, breach, termination, or creation would materially adversely affect the consummation of the transactions contemplated by this Agreement.

3.4   Consents.  No consent, approval or authorization of, or declaration, filing or registration with, any governmental or regulatory authority or any court or other tribunal, and no consent or waiver of any party to any material contract to which Purchaser is a party or is bound is required to be obtained by Purchaser in connection with the execution, delivery, and performance of this Agreement by Purchaser, such that the failure to obtain or make any such consent, approval, authorization, declaration, filing, or registration would materially adversely affect the consummation of the transactions contemplated by this Agreement.

3.5   Litigation.  Purchaser has not been served with any now pending suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation in which an unfavorable decision, ruling, or finding would render unlawful or otherwise materially adversely affect the consummation of the transactions contemplated by this Agreement, and the best of Purchaser's knowledge, no such suit, action, or legal, administrative, arbitration, or other proceeding or governmental investigation has been instituted or is threatened.

3.6   Finder's Fees.  Neither Purchaser nor anyone acting on its behalf has employed any financial advisor, broker, or finder or incurred any liability for any financial advisory, brokerage or finder's fee, or commission in connection with this Agreement or the transactions contemplated hereby.

ARTICLE FOUR

4   Certain Agreements

4.1   Further Assurances.  Following the date hereof, each party shall execute and deliver such other documents, and take such other actions, as may be reasonably requested by the other party to vest in Purchaser full right title and interest in and to the Assets, to complete the transactions contemplated by this Agreement and to allow each party fully to enjoy and exercise the rights accorded to and acquired by it under this Agreement or any other agreement entered into pursuant hereto.

4.2   Accounts Receivable.  Upon the request and at the expense of Purchaser, Seller shall use reasonable and its best efforts to assist Purchaser in collecting the Accounts Receivable.  In the event that Seller shall receive any payment on the Accounts Receivable, Seller shall hold the amount received in trust for the benefit of Purchaser and shall immediately remit to Purchaser the amount received in its entirety.  Seller shall not settle, compromise, or release (in whole or in part) any Accounts Receivable, or take any action or omit to take any action that would adversely affect the Accounts Receivable, without the prior written consent of Purchaser.

4.3   Employees.

4.3.1   Seller shall pay to its employees all compensation, including salaries, commissions, bonuses, deferred compensation, severance, insurance, pensions, profit sharing, vacation pay, sick pay, and other compensation or benefits to which they are entitled for periods prior to the date of Purchaser hiring any of Seller’s employees.  Seller shall be responsible for maintenance and distribution of benefits accrued under any employee benefit plan (as defined in ERISA) maintained by Seller pursuant to the provisions of such plans.  Purchaser shall assume neither any liability for any such accrued benefits nor any fiduciary or administrative responsibility to account for or dispose of any such accrued benefits under any employee benefit plans maintained by Seller.

4.3.2   On the date Seller terminated the employment relationship with such of its employees as Purchaser has expressed an interest in hiring, and Seller paid to each such employee any and all amounts due to them prior to or as a result of such termination that were not expressly assumed by Purchaser.  Purchaser is hereby expressly permitted by Seller to enter into an employment relationship with each of these former employees. Purchaser may, in its sole discretion, offer employment to any or all of the former employees of Seller.  All such persons so employed by Purchaser are referred to hereinafter as a “Hired Employee.”

4.3.3   All claims and obligations under, pursuant to, or in connection with any welfare, medical, insurance, disability, or other employee benefit plans of Seller or arising under any legal requirement applicable to Seller affecting employees of Seller incurred on or before the date of Purchaser’s hiring the Hired Employee or resulting or arising from events or occurrences occurring or commencing on or prior to that date shall remain the responsibility of Seller, whether or not such employees are hired by Purchaser after the date hereof.  Purchaser shall have and assume no obligation or liability under or in connection with any such plan and, shall assume no obligation with respect to any pre-existing condition of any employee of Seller who is hired as an employee of Purchaser.

4.4   Publicity.  The parties hereto shall jointly prepare any press release or other public announcement relating to this Agreement, except that the foregoing shall not prevent any party hereto or any affiliate thereof from issuing any press release required by applicable law.

ARTICLE FIVE

5   Survival and Indemnity

5.1   Survival of Representations and Warranties.  All of the representations and warranties made by the parties hereto in this Agreement or pursuant hereto, shall be continuing and shall survive the closing hereof and the consummation of the transactions contemplated hereby, notwithstanding any investigation at any time made by or on behalf of any party hereto, for a period of two (2) years after the date of this Agreement.

5.2   Indemnification by Seller.  Seller shall indemnify and hold harmless Purchaser and Purchaser's shareholders, directors, officers, employees, agents, affiliates, successors, and assigns from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, judgments, losses, damages, injuries, liabilities, obligations, expenses, and costs (including costs of litigation and attorneys' fees), arising from any breach of any agreement, representation or warranty made by any of them in this Agreement.

3

ARTICLE SIX

6   Miscellaneous

6.1   Notices.  Any notices, requests, demands, or other communications herein required or permitted to be given shall be in writing and may be personally served, sent by United States mail, sent by an overnight courier who keeps proper records regarding its deliveries, faxed, or emailed. Notice shall be deemed to have been given if personally served, when served, or if mailed, on the third business day after deposit in the United States mail with postage pre-paid by certified or registered mail and properly addressed, or if sent by overnight courier as aforesaid with charges being billed to the sender, when received by the party being notified, or if faxed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the fax was properly received, or if e-mailed, when the person giving the notice receives a confirmation statement with all relevant details indicating that the e-mail was properly received. As used in this Agreement, the term “business day” means days other than Saturday, Sunday, and holidays recognized by Federal banks.  For purposes of this Agreement, the physical addresses, fax numbers, and e-mail addresses of the parties hereto shall be the physical addresses, fax numbers, and e-mail addresses as set forth on the signature pages of this Agreement.  Any party to be notified hereunder may change its physical address, fax number, and e-mail address by notifying each other party hereto in writing as to the new physical address, fax number, and e-mail address for sending notices.

6.2   Counterparts.  This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one and the same instrument.

6.3   Amendments and Waivers.  This Agreement may be amended, modified, or superseded only by written instrument executed by all parties hereto.  Any waiver of the terms, provisions, agreements, covenants, representations, warranties, or conditions hereof shall be made only by a written instrument executed and delivered by the party waiving compliance.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right to enforce the same.  No waiver by any party of any condition, or of the breach of any term, provision, agreements, covenant, representation, or warranty contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or the breach of any other term, provision, agreements, covenant, representation, or warranty.

6.4   Time of Essence.  Time is of the essence in the performance of this Agreement.

6.5   Captions.  The captions contained in this Agreement are solely for convenient reference and shall not be deemed to affect the meaning or interpretation of any Article, Section, or paragraph hereof.

6.6   Entire Agreement.  This Agreement (including the schedules and exhibits hereto, the Financial Statements, and all supporting agreements referred to herein, all of which are by this reference fully incorporated into this agreement) sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements, and understandings relating to the subject matter hereof.

6.7   Assignment, and Successors and Assigns.  No party hereto may assign any of its rights, interests, or obligations under this Agreement without the prior written consent of the other parties. Notwithstanding the preceding, Purchaser may assign all or part of this Agreement and its rights hereunder to a wholly-owned subsidiary or to a person who acquires substantially all of the assets of Purchaser and who assumes all of the obligations of Purchaser hereunder, provided in each such case that no such assignment shall release Purchaser from its duties and obligations hereunder.  All of the terms, provisions, agreements, covenants, representations, warranties, and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, permitted assigns, and successors.

6.8   Knowledge, Gender, and Certain References.  Whenever a representation or warranty made herein is made to the best of any entity's knowledge, such representation or warranty is based only on the actual knowledge or belief of the entity's management without any independent investigation on the part of such management or any other person although such management has no reason to believe that the representation or warranty made was not true as of the date which it speaks.  Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural, and pronouns stated in the masculine or the neuter gender shall include the masculine, the feminine and the neuter gender.  The terms “hereof,” “herein,” or “hereunder” shall refer to this Agreement as a whole and not to any particular Article, Section, or paragraph hereof.

6.9   Applicable Law, Mandatory Venue, and Draftsmanship. This Agreement has been executed in cook County, Illinois.  THIS AGREEMENT SHALL BE GOVERNED EXCLUSIVELY BY ITS TERMS AND BY THE LOCAL, INTERNAL LAWS OF THE STATE OF ILLINOIS.  The parties hereto stipulate and agree that the courts of the State of Illinois shall have in personam jurisdiction for any claim, lawsuit, or proceeding regarding this Agreement, and that mandatory venue for any such claim, lawsuit, or proceeding shall be in any state or federal court having competent jurisdiction located in Cook County, Illinois.  Each party hereto hereby acknowledges and agrees that it has consulted legal counsel in connection with the negotiation of this Agreement and that it has bargaining power equal to that of the other parties hereto in connection with the negotiation and execution of this Agreement.  Accordingly, the parties hereto agree that the rule of contract construction that an agreement shall be construed against the draftsman shall have no application in the construction or interpretation of this Agreement.

6.10   Severability.  If any term, provision, agreements, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, provisions, agreements, covenants, and restrictions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

6.11   Costs, Expenses, and Fees.  Each party hereto agrees hereby to pay all costs, expenses, and fees incurred by it in connection with the transactions contemplated hereby, including, without limitation, all attorneys' and accountants' fees.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Bluegate Corporation

By: /s/ Charles E. Leibold

       Charles E. Leibold

       Chief Financial Officer

November 7, 2009

cleibold@bluegate.com

SAI Corporation

By: /s/ Stephen J. Sperco

Stephen J. Sperco

President

November 7, 2009

ssperco@sperco.com

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Schedule 1.1.1 - Lists Of Machinery, Equipment And Other Tangible Personal Property

None

Schedule 1.1.2 – Contracts/Agreements Transferred from Seller

OSF & UHS

Schedule 1.1.3 – Accounts Receivable Owed to HIMS Operation going to Purchaser

None

Schedule 1.1.5 – Intellectual Properties

All HIMS related documentation, processes, methodologies, and historical information in written and electronic form.

Schedule 1.2 – Excluded Assets

1)   All rights and claims of Seller under any of the Seller’s insurance policies;

2)   All assets of any of Seller’s employee benefit plans;

3)   All outstanding receivables dated prior to the Agreement Date;

4)   All claims, rights and interest in and to any prepayment or refunds of federal, provincial, state or local franchise, income or other taxes or fees of any nature whatsoever which relate solely to the period up to and including the date of this Agreement;

5)   All of Seller’s minute books and other books and records relating to internal corporate matters, and all other books and records not related to the business conducted with the Assets.

Schedule 1.4 – List of Assumed Liabilities

None

Schedule 2.8 – Employees

Patti Branch

Alan Ladd

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EX-10.6

Exhibit 10.6

MUTUAL RELEASE IN FULL

THIS MUTUAL RELEASE IN FULL (this “Agreement”) is made by and between SAI Corporation (“SAIC”) and Bluegate Corporation, a Nevada corporation (together with its subsidiaries, the “Company”).

PRELIMINARY STATEMENT

SAIC holds shares of the Company’s common stock and stock options exercisable for shares of the Company’s common stock;

SAIC holds a Promissory Note from the Company that is secured by all of the assets and stock of the Company; and

SAIC and the Company desire to settle fully and finally all matters regarding former members of the Board of Directors and former Officers of the Company (the “Former Management”) without in any manner altering the Promissory Note and associated obligations between SAIC and Company.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, the Company and Former Management (hereinafter referred to both jointly and individually as the “Bluegate Organization”) agree as follows:

1.SAIC and Company agrees that they will not make any disparaging comments regarding the other or any of its former, current, or future stockholders, directors, officers, or employees.  The phrase “disparaging comments” will mean any comment, remark, or statement, whether written or oral, that is harmful to the reputation of SAIC or Company or any such other person in the community.

2.As consideration for SAIC’s acceptance of the terms and conditions in this Agreement, Company will pay a settlement payment of One Dollar along with the rights to contracts and client relationships associated with Company’s HIMS operation as outlined in the Sales Agreement that is attached as Schedule 1 to this Agreement (the “Settlement Payment”).  The Settlement Payment will be made no later than November 11, 2009.

3.In exchange for the valuable consideration hereunder:

(a)SAIC, for and on behalf of itself and its heirs, beneficiaries, executors, administrators, attorneys, successors, and assigns, hereby releases and waives all claims, causes of action and demands of any kind against the Former Management, in their individual and official capacities, which SAIC had, has or may have through the date SAIC executes this Agreement, whether known or unknown, arising out of or relating to (i) SAIC’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, or (ii) any notes, indebtedness, obligations, liabilities of the Company.  Nothing in this paragraph shall be construed as a waiver or relinquishment of any right that SAI Corporation may have in any stock, options or warrants that currently exist and that are held by SAI Corporation, the terms of which are in full force and effect and shall not be modified hereby.  In the event anyone claiming to be released hereby files any claim against SAI Corporation, this release will become null and void and of no effect for that party making the claim against SAI Corporation. 

(b)The Bluegate Organization, for and on behalf of itself and its heirs, beneficiaries, executors, administrators, attorneys, successors, and assigns, hereby releases and waives all claims, causes of action and demands of any kind against SAIC, which the Bluegate Organization had, has or may have through the date SAIC executes this Agreement, whether known or unknown, arising out of or relating to:  (i) SAIC’s ownership of capital stock of the Company, or of options, warrants, rights or other securities or instruments exercisable or exchangeable for or convertible into shares of the capital stock of the Company, or the sale and assignment of such capital stock or other securities to the Company pursuant to this Agreement, (ii) any notes, indebtedness, obligations, liabilities of SAIC, or (iii) matters otherwise arising up to and including the Agreement Date, including any fees, interest, bonuses, payments, transactions, or commissions, or on account of any alleged conduct of SAIC which might be alleged by the Bluegate Organization.

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4.To the extent not prohibited by applicable law, the Bluegate Organization and SAIC hereby warrant that they have and will not institute any lawsuit, claim, action, charge, complaint, petition, appeal, accusatory pleading, or proceeding of any kind against the other Party, and both Parties waive, or at a minimum assign to the other Party, any and all rights to any and all forms of recovery or compensation from any legal action brought by the other Party or on that other Party’s behalf in connection with the matters (specifically excluding the Promissory Note held by SAIC and associated payments from Company) that are the subject of this Agreement.  To the extent not prohibited by applicable law, in the event that a lawsuit or any of the foregoing actions are filed by SAIC or the Bluegate Organization in breach of this covenant, it is expressly understood and agreed that:

(a)   This covenant will constitute a complete defense to any such lawsuit or action.

(b)   Any material breach by a Party of any of the terms contained in this Agreement relieves the other Party of any and all obligations it may have pursuant to this Agreement.

(c)   Should a Party bring any type of administrative or legal action arising out of claims waived under this Agreement, the Party bringing the action will bear all legal fees and costs associated therewith.

5.This Agreement will be binding upon and will inure to the benefit of the successors, assigns, heirs, executors and administrators of the respective parties.

6.Nothing contained in this Agreement, or the fact of its submission to SAIC, will be admissible evidence in any judicial, administrative or other legal proceeding, or be construed as an admission of any liability or wrongdoing on the part of the Bluegate Organization or SAIC of any violation of federal or state statutory or common law or regulation.

7.Should any provision of this Agreement be held invalid or unenforceable by operation of law or otherwise, all other provisions will remain in full force and effect; provided that a court may modify any provision to make it valid and enforceable.

8.This Agreement sets forth the entire agreement between the parties regarding the subject matter of this Agreement (specifically excluding the Promissory Note held by SAIC from Company) and supersedes any and all prior oral or written agreements or understandings between the SAIC and the Bluegate Organization regarding the subject of this Agreement.  This Agreement may not be altered, amended, or modified except by a further written document signed by and an authorized officer of both SAIC and the Company.

9.This Agreement will be construed and enforced in accordance with the laws of the State of Texas without reference to its or any other state’s conflicts of law rules.

10.This Agreement may be executed in counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.  A facsimile signature will be deemed to be an original signature for all purposes.

11.All parties to this Agreement acknowledge that they have had adequate time to review this Agreement, that they all have been advised by the Company to consult with legal counsel of its choosing regarding this Agreement.

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12.The provisions of this Agreement shall become effective once all parties have executed the Agreement below (the “Effective Date”).

IN WITNESS WHEREOF, the Parties hereto have executed this Mutual Release Agreement as of the date specified below.

Bluegate Corporation

By:	/s/ Charles E. Leibold	November 7 2009
	Charles E. Leibold
	Chief Financial Officer
	Former Management
By:	/s/ William Koehler	November 7 2009
	William Koehler
By:	/s/ Manfred Sternberg	November 7 2009
	Manfred Sternberg

Accepted and agreed to this Seventh (7th) day of November, 2009.

SAI Corporation

By: /s/ Stephen J. Sperco

       Stephen J. Sperco

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SCHEDULE 1

Reference attached Sale Agreement for HIMS operation from Company to SAI Corporation.

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EX-10.7

Exhibit 10.7

FAIRNESS OPINION

Prepared in conjunction with

A Sale & Purchase of Assets by

Bluegate Corporation

("SELLER")

And

A Sperco Entity, Trilliant Corporation and SAI Corporation

("PURCHASERS")

November 6, 2009

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November 6, 2009

Mr. Charles Leibold

Chief Financial Officer

Bluegate Corporation

701 North Post Oak Road, Suite 600

Houston, Texas 77024

Dear Mr. Leibold:

Convergent Capital Appraisers, LLC (CCA) has been engaged by Bluegate Corporation (Company or Bluegate or BGAT) to render a Fairness Opinion in regard to the following described transactions.

Stephen Sperco (through a Sperco entity controlled by him) will purchase certain assets from Bluegate Corporation (“BGAT”) with payment made by a combination of cash and the conversion of debt. The assets to be purchased will be the BGAT Medical Grade Network (“MGN”) operation that supports clients with field engineers, consulting, and the sale of product. Trilliant Corporation will purchase certain assets from BGAT with a cash payment. The assets to be purchased will be the Trilliant Technology Groups (“TTG”) consulting operation. SAI Corporation (“SAIC”) will purchase certain assets from BGAT in exchange for a Mutual Release in Full of certain claims. The assets to be purchased will be the Healthcare Information Management Systems (“HIMS”) consulting operation.  The remaining Carrier/Circuit business will remain in Bluegate Corporation.

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Compliance Standards - 5150 Fairness Opinions*

While we are not specifically bound by the pronouncements of the Financial Industry Regulatory Authority, Inc. (FINRA- formerly the National Association of Securities Dealers NASD), it is our assessment that since the guidelines have been endorsed by the United States Securities and Exchange Commission (SEC) as being consistent with current disclosure regulations, we believe it prudent to comply with the following disclosures.

*This rule was introduced with the filing of SR-FINRA-2008-028 which has been approved by the SEC. This rule became effective on December 15, 2008.

Disclosures

If at the time a fairness opinion is issued to the board of directors of a company the member issuing the fairness opinion knows or has reason to know that the fairness opinion will be provided or described to the company's public shareholders, the member must disclose in the fairness opinion:

(1) if the member has acted as a financial advisor to any party to the transaction that is the subject of the fairness opinion, and, if applicable, that it will receive compensation that is contingent upon the successful completion of the transaction, for rendering the fairness opinion and/or serving as an advisor;

(2) if the member will receive any other significant payment or compensation contingent upon the successful completion of the transaction;

(3) any material relationships that existed during the past two years or that are mutually understood to be contemplated in which any compensation was received or is intended to be received as a result of the relationship between the member and any party to the transaction that is the subject of the fairness opinion;

(4) if any information that formed a substantial basis for the fairness opinion that was supplied to the member by the company requesting the opinion concerning the companies that are parties to the transaction has been independently verified by the member, and if so, a description of the information or categories of information that were verified;

(5) whether or not the fairness opinion was approved or issued by a fairness committee; and

(6) whether or not the fairness opinion expresses an opinion about the fairness of the amount or nature of the compensation to any of the company's officers, directors or employees, or class of such persons, relative to the compensation to the public shareholders of the company.

Disclosure Responses

CCA has not had and does not anticipate any involvement in the foregoing transaction except to the extent of rendering this opinion regarding the fairness of the transaction.

CCA’s compensation in this matter is being paid by Bluegate Corporation and is based upon hourly rates and a total fee estimate that has been contractually agreed.

The only relationship with Bluegate and CCA is through the predecessor firm of McClure, Schumacher & Associates, LLP which provided valuation services relative to accounting issues and FASB 141 in conjunction with the purchase of Trilliant in 2006 and 2007.

We have not attempted to verify independently public or private information considered in our valuation.

We have expressed no opinions regarding the compensation of any parties to this transaction.

Conclusion

Based upon the criteria outlined in this report, and based upon our research and analysis, it is our opinion that: (i) the overall terms and conditions of the Purchase Transaction are fair from a financial point of view and (ii) pursuant to the Transaction Terms, the shareholders of Bluegate are receiving no less than adequate consideration.

Company Overview

The following business description is taken from the Company’s second quarter 10Q, filed in July 2009.  The Company has been trying to establish itself as a leader in the healthcare information technology business.  The efforts have not been successful as indicated by the subsequent financial information that shows continuous losses and the auditor’s opinion regarding questions of “going concern.”

OUR BUSINESS

Bluegate provides the nation's only Medical Grade Network that facilitates physician and clinical integration between hospitals and physicians in a secure private environment. As a leader in providing the Healthcare industry outsourced Information Technology (IT) solutions and remote IT management services, Bluegate provides hospitals and physicians with a single source solution for all of their clinical integration and IT needs. Additionally Bluegate provides IT and telecommunications consulting through its professional services organization.

CONSULTING PRACTICE

Healthcare institutions have very unique requirements not found in a typical commercial environment. Our Healthcare consulting practice works with medical facilities and systems on evaluation, procurement and implementation of healthcare related voice, data, video, infrastructure and applications for the Healthcare environment with a particular emphasis on the deployment of Electronic Medical Record applications. Our IT/Telecommunications consulting practice works in various industry verticals providing evaluation, procurement and implementation of IT/Telecommunications solutions for our clients. Our Applications consulting practice provides specific applications development, enhancement, coding, and integration work for various industry verticals.

OUTSOURCING

Our outsourcing offering includes help desk support and break-fix operations as well as acquisition and special financing of equipment and services. It also can include provisions for technology refresh, change management, and level of service agreements. Our target market for such services consists of private-practice physicians whose office staffs typically lack the in-house technical expertise to support mission-critical computer systems and associated hardware. In many cases, these private-practice physicians are affiliated with our larger medical facility clients, creating a logical foundation for Bluegate to establish and maintain long-term business relationships.

SYSTEMS INTEGRATION AND MANAGED SECURITY SOLUTIONS

Our systems integration and managed security group enables secure, HIPAA-compliant data communication between hospitals, medical facilities and physician practices from all locations via the services of our Bluegate Medical Grade Network ultimately enhancing patient care. We also provide affordable access to compatible medical-focused content and applications over a secure IT infrastructure to improve practice efficiency and service. We extend IT Best Practices to the edge of the healthcare network ensuring every access point for the physician and healthcare location is as secure as the hospital itself.

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MARKET OPPORTUNITY IN HEALTHCARE

Electronic data communication networks have vast potential for enhancing the quality of patient care, mitigating the soaring costs of healthcare, and protecting patient privacy. To harness this potential, the current administration, Congress, and administrative agencies are advocating that all physicians get connected to the proposed national health information network (NHIN) system. A NHIN is expected to enable physicians to write electronic prescriptions (eRx) and securely share patient electronic health records (EHR), including medical images, with other healthcare providers at hospitals, clinics, and individual physician offices.

In order to access and use the NHIN, individual physicians must have the appropriate IT environment at their offices, and the hospitals where they admit patients. Further, the hospitals' credentialed physicians must be on a common HIPAA compliant network. Once the hospital has installed the necessary secure electronic connectivity behind their firewall, the "last mile" of connectivity, the figurative distance from the telecommunication provider's switch to an end user (i.e. the physician), still presents a major challenge. In addition to being HIPAA-compliant, the networks also need to be interoperable, which requires assessing and augmenting physicians' existing IT equipment and resources. Adequate training and technical support is necessary to ensure the highest possible network availability and security and the ability to move and manage information back and forth.

The Administrative Simplification provisions of Title II of HIPAA require the United States Department of Health and Human Services to establish national standards for electronic healthcare transactions and national identifiers for providers, health plans, and employers. It also addresses the security and privacy of health data. Adopting these standards will improve the efficiency and effectiveness of the nation's Healthcare system by encouraging the widespread use of electronic data interchange in Healthcare. As the result of increasing pressure for healthcare providers to adopt electronic health records and the favorable healthcare IT environment created by the Stark Law exceptions there is rapidly increasing demand for Bluegate's networks, technologies, remote management, and professional IT services.

BLUEGATE STRATEGY

Healthcare

Our current short term strategies are to: (1) increase our market penetration of the Houston hospital, centralized Healthcare, and physician markets; (2) commence deployment of services in other Texas cities; and, (3) commence deployment of services in other cities in the U.S. Our long term strategy is fivefold: (1) fill as much of the national HIPAA-compliant secured communications void that exists between the physician and the hospital as we can; (2) sell our services to the physicians that utilize our Medical Grade Network  enabling them to choose Bluegate as their electronic  health solutions firm and as the IT outsource firm of choice for all of their technology needs; (3) to be "THE" IT solutions resource to medical institutions, Healthcare facilities, regional health information organizations (RHIOs), and centralized Healthcare organizations (HCOs) for all their IT needs; (4) partner with a wide array of third party providers of software, managed systems, pharmacy benefits, and many other applications that must run on electronic networks and be installed in hospitals, HCOs and medical practices; and (5) become the premier "boutique" consulting practice supporting the deployment of Electronic Medical Record systems and services.

Professional Services

In addition to the Professional Services initiatives in Healthcare, Bluegate intends to continue to grow in the following areas through its Trilliant Technology Group organization: (1) Further establish its reputation as one of the top Telecommunications consulting organizations in the U.S.; and (2) expand its IT Infrastructure consulting base.

GOING CONCERN ISSUES

We remain dependent on outside sources of funding for continuation of our operations. Our independent registered public accounting firm included a going concern qualification in their report dated April 9, 2009 (included in our annual report on Form 10-K for the year ended December 31, 2008), which raises substantial doubt about our ability to continue as a going concern.

During the six months ended June 30, 2009 and the year ended December 31, 2008, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt and equity raised from qualified individual investors and loans from a related party.

During the six months ended June 30, 2009 and 2008, we experienced negative financial results as follows:

Six Months Ended June 30,	2009			2008
Net loss	$	(41,102	)	$	(1,424,496	)
Negative cash flow from operations	$	(127,269	)	$	(208,669	)
Negative working capital	$	(1,505,020	)	$	(1,243,245	)
Stockholders' deficit	$	(1,477,367	)	$	(1,189,289	)

These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.

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We have supported the above operations by: (1) loans from a related party, (2) raising additional operating cash through the private sale of our preferred and common stock, (3) selling convertible debt and common stock to certain key stockholders and (4) issuing stock and options as compensation to certain employees and vendors in lieu of cash payments.

These steps have provided us with the cash flows to continue our business plan, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include: (1) raising capital through additional sale of our common stock and/or debt Securities and (2) reducing cash operating expenses to levels that are in line with current revenues.

These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following:

- Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements.

- Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations.

Updated Financial Analysis

In preparing this report, we requested that Management through Mr. Charles Leibold prepare an updated assessment of the financial picture of the Company as of the middle of October 2009.  The response is as follows:

·   Bluegate Corporation is a public company traded on the OTCBB with 26 million shares outstanding (50% of the outstanding shares are owned by three directors who have differences among themselves).

·   Bluegate has had negative cash flow problems for several years and has never received a clean opinion from the external auditors which have consistently cited “going concern” issues.

·   Revenue is decreasing as two lines of business Trilliant Techology Group (TTG) and Healthcare Information Management Systems (HIMS) have not generated any substantial new business over the past year and will go dormant by end of November 2009.  (2009 first half of year had Revenue of ~$2M with P/L at around break-even, 2009 Q3 will have Revenue ~$760K with a loss from operations of ~$60K, and Forecast for 2009 Q4 is Revenue ~$460K with a loss from operations of ~$300K)

·   Current liabilities (there is no long term debt) of approximately $1,900,000 exceed current assets of approximately $300,000.  Of the $1,900,000 of liabilities, approximately $1,500,000 is owed to related parties - Single secured creditor for $1,300,000 with UCC filing on all of the Company’s assets and stock (from entity controlled by CEO/Director) and approximately $90,000 from two Directors who were formerly officers.

·   Operation will not have cash to sustain another 30-45 days

Items of Intangible Value within Bluegate – Not Included in the Sale

Public filings indicate that the Company has a negative net worth based on tangible assets.  The following analysis examines the items of value that may not be reported on the financial statements at fair value as defined below.

The Statement of Financial Accounting Standards No. 157(FAS 157)

“Fair Value” is defined in FAS 157 as: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Because that exit price objective applies for all assets and liabilities measured at fair value, any fair value measurement requires that the reporting entity determine:

· The particular asset or liability that is the subject of the measurement (consistent with its unit of account);

· For an asset, the valuation premise appropriate for the measurement (consistent with its highest and best use);

· The principal (or most advantageous) market for the asset or liability (for an asset, consistent with its highest and best use);

· The valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use in pricing the asset or liability and the level in the fair value hierarchy within which the inputs fall.

At the end of the business description filed with the SEC (excerpted previously), there is a note regarding networking services.  This operation appears to be the only one that has on-going value because there is an expectation that it will generate a consistent flow of cash flow in excess of the cost of services.  It provides internet connectivity to corporate clients on a subscription basis; essentially operating as a broker.  It has several customers and expects to generate about $350,000 in revenue and net about $180,000 in gross margin or profit.  In addition, whenever there are technical issues or an opportunity to provide IT support, those tasks have traditionally been referred to other operations within the Company or to outside contractors.  This operation is NOT included in the contemplated transactions and it is to remain with Bluegate Corporation.

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Terms of the Deal

A Sperco entity is an entity owned by Mr. Stephen Sperco who is also the largest shareholder of Bluegate Corporation (BGAT) holding 4.5 million out of a total of 26 million shares outstanding.  The MGN tangible and intangible assets purchased from BGAT will be moved into a Sperco entity and the HIMS tangible assets purchased from BGAT will be moved into SAI Corporation (“SAIC”) which an entity is owned by Stephen Sperco.

Sperco entity’s purchase price for the MGN assets will consist of $100,000 cash and $100,000 in forgiveness of debt, plus an adjustment on a dollar for dollar basis for any working capital.  SAIC’s purchase price for the HIMS assets will consist of a Mutual Release in Full of certain claims. The only tangible assets to be transferred will be about $40,000 worth of furniture, fixtures and electronic equipment that are part of the MGN and HIMS operations.

The intangible assets include the following:

1.   Medical Grade Network

a.   a registered mark – “Medical Grade Network”

b.   a workforce of about 11 people

c.   approved vendor status for the following:

MHHNP	Memorial Hermann Health Ntwrk Prov-9401
Northwestern Memorial Hospital	Bone and Joint Clinic of Houston
Renaissance HealthCare Systems	Global Imaging
Memorial Hermann Health Sys-Radiology	Malcolm Bremer, MD
Houston Digestive Disease Consultants	Southwest Nephrology Associates, LLP
Advanced Orthopedics & Sports Medicine	Cindy Ivanhoe, MD, PA
Diabetes Centers of America	Northwest Oral Maxillofacial Surgery
G.I. Specialists of Houston, LLP	Women's Healthcare of Houston
Memorial MRI & Diagnostic	Neurology, Headache & Pain
Houston Allergy & Asthma Associates	Houston Fertility Institute
Urology Associates	Memorial Hermann Home Health
Pulmonary Critical Care & Sleep Medicine	Cardiology Associates of Houston
Texan Imaging Centers (formerly Okomed)	Center for Pain Recovery, PA
Gateway To Care	Dynamic Orthotics and Prosthetics
Leachman Cardiology Associates, PA	US Imaging

2.   Healthcare Information Management Systems

Since the HIMS operation has no on-going business it will go dormant by the end of November 2009, and it is our assessment that without on-going operations this operation has no intangible fair value.

3.   Trilliant Corporation’s (“Trilliant”) (a company owned by William Koehler, former Director/Corporate Officer of BGAT) purchase price for Trilliant Technology Group, Inc’s. (“TTG”) assets of $5,000 cash and will include:

a.   the Trilliant corporate name

b.   future revenues of about $20,000 (residual work on two ending contracts – which will require hiring contract labor which is expected to cost as much as the revenue)

In additional to the tangible and intangible assets, it is important to note the following circumstances and details regarding the transaction.

1.   Lease and Labor

a.   BGAT is obligated on a building lease for 7,290 square feet that runs until 2013 and costs about $9,000 per month.

b.   BGAT requires only five or six people to operate its carrier business

c.   The new Sperco entity will require less than 2,000 square feet for all its operations post transaction.  This would equate to about 27% of the space or about $2,500 per month.

d.   The new Sperco entity has agreed to supply BGAT with accounting and administrative staff, as well as technical support for the carrier business, at no charge in exchange for free rent.

e.   BGAT intends to sublease as much of the space as possible as soon as possible.

f.   Occupancy by the new Sperco entity will defer to BGAT’s needs and opportunities.

2.   Carrier or Connectivity Operation

a.   This operation is staying with BGAT

b.   This is the only operation of BGAT that has been adequately profitable.

c.   The new Sperco entity is acquiring the Medical Grade Network operation which provides maintenance support to BGAT’s Carrier customers.  As part of the transaction, Sperco agrees to continue providing that support.

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3.   Medical Grade Network (MGN) Operation – Fair Value Assessment

a.   Revenues have been declining over the last three years as indicated by the following table.  They appear to have stabilized in 2009 at around $100,000 per month.  The increase in revenues in quarter 3 of 2009 is attributed to several larger dollar projects that are not expected to recur at the historic levels.

b.   For the nine months ended September 2009, this entity generated slightly more than $900,000 in revenues and produced a gross margin (profit after direct costs) of $130,000 or about 14%.  However, after including direct labors costs (reported as compensation) of $150,000, the operation lost $20,000.

c.   It must be noted that BGAT’s corporate overhead expense to maintain this business operation far exceeds an industry norm of 10%, which accounts in part for continuing ongoing losses.

d.   It is our assessment that while “Medical Grade Network” has been registered as a proprietary service mark, it does not appear (based on the trend of revenues and with no pending contracts) to have developed independent commercial recognition.  What value does exist is subsumed within the forecast cash flows as previously analyzed.

4.   Healthcare Information Management Systems (“HIMS”) Operation – Fair Value Assessment

a.   Revenues have been steadily declining during the nine months ended September 2009 and the remaining two contracts will end during November 2009.

b.   Since the HIMS operation has no on-going business it will go dormant by the end of November 2009, and it is our assessment that without on-going operations this operation has no intangible fair value.

5.    Trilliant – Fair Value Assessment

a.   This entity has no work force as of the end of September 2009 because of a lack of on-going projects.

b.   The remaining $20,000 in contract revenues will be earned through the use of outside contractors (former Trilliant employees).  The expectation is that the additional cost of using outside contractors rather than employees will consume any profit potential.

c.   The Trilliant name has not been established as a brand although it may be recognized among previous customers.

d.   Given there are no pending contracts and no pending bids, the value of the Trilliant name is considered to be minimal at best.

Motivation for the Transaction

BGAT has not been profitable since inception and the business model has proven to be unsuccessful.  According to Yahoo Finance, the Company has not attracted any mutual fund or institutional investors.  About 13.0 million of the 26 million shares outstanding – about ½ are held by three individuals and one company.  The price of a share has declined from dollars to pennies over the last eight years and volume is negligible.

To resurrect the various operations will require expenditures for marketing and business development.  Given the poor stock performance, it is unlikely that funds could be raised through a stock offering.  The cash flow statement at right shows that over the past two calendar years, approximately $6.25 million ($4.85 mil + $1.40 mil) has been raised through the issuance of stock, options and warrants to fund operating losses which total approximately $6.9 million over the two years ($1.8 mil + $5.1 mil).

All of the Company’s assets are pledged against more than $1 million in debt, so it is unlikely that loans could be secured from traditional lending sources.

It is our assessment that BGAT has approached a financial impasse that has required drastic measures if bankruptcy is to be avoided.

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Financial tension within the organization has been caused by reduced compensation and exchanging paychecks for stock as well as major internal restructuring.  This has lead to discord among the current and former Directors which has the potential to escalate to legal action.  If lawsuits are brought into this already dire financial situation, the cost and time delays will undoubtedly destroy what little value is left and bankruptcy will most surely be the inevitable conclusion to BGAT’s existence.

The proposed strategy is to minimize the loss and avoid bankruptcy.  Management believes that first and foremost, the potential litigation must go away if progress is to be made.  To that end, it is our understanding that about $90,000 of the $100,000 cash purchase price paid to BGAT for the MGN assets will be used to repay loans from Mr. Sternberg and Mr. Koehler (two former Directors/employees/corporate officers).  In exchange, they will provide full release and waivers of all claims.

Common Shareholder Dilution

As indicated by the balance sheet at right, even with an infusion of $100,000 and the forgiveness of $100,000 of debt, shareholders’ equity will still be negative.  We see from the previous financial statements that the Company has amassed large losses in the last two years and funded those losses with dilutive shares.  Approximately $1.4 million of cash was raised while $4.8 million of shares / options / warrants were issued to cover expenses.

While the rate of loss has decreased in the last year, there is every expectation that losses will continue if operations are allowed to continue.  To cover those losses, more and more shares will likely be issued as there is no collateral for loans.

Continuing to operate in this fashion will be detrimental to the common shareholders as their ownership value continues to be diluted.

Without the Sperco entity purchase, the common shareholders have little or no hope of realizing any return on their investment.

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 Purchase Prices Relative to Fair Value and Fairness

Given the dire financial condition of BGAT, it is unrealistic to suggest that MGN be placed with a business broker to sell because that would likely require between six months and a year to locate a buyer and close the transaction.  Moreover, given the revenue trends, and a lack of future contracts, it is uncertain whether a buyer could be found, particularly in a down economy with tight credit.

Sperco (through entities controlled by him) will be contributing the following values

·   Cash - $100,000

·   Forgiveness of Debt $100,000

·   Accounting and administrative services and technical support for the carrier business as needed in exchange for short term free rent.

The determination of fairness is a measurement of relative values.  Does one party to the transaction benefit disproportionately and to the detriment of another party.  In this case, the question is whether the Sperco entity, SAIC and Trilliant will benefit to the detriment of the common shareholders.

Our analysis of the fair value of the MGN assets included in this transaction indicates that if anything, the price of $200,000 is likely a high price. The total tangible collateral in this transaction is something less than $40,000 which means a loan value in the $30,000 range or less.  TTG has no on-going operations while MGN and HIMS’s operations have been trending downward.

We know that these three operations are insufficient to support BGAT’s overhead and if they are not sold in short order, they will likely cease to exist.

Without these sales, BGAT will continue to be in default on its loans and given the state of financial resources, will be forced to file for bankruptcy protection.  Between legal and trustee fees, what few resources are left will be consumed and the common shareholders will receive nothing.

Conclusion

Based upon the foregoing evidence and analysis, it is our opinion that this transaction is fair from a financial point of view as it provides the common shareholders with more value than any other likely scenario.  Moreover, the prices being paid to BGAT is assessed as meeting or exceeding what we have determined to be a fair value for the assets to be sold to the Sperco entity, SAIC and Trilliant.

Certification

In rendering our opinion, we have relied without independent verification upon the accuracy and completeness of the financial and other information provided by Bluegate Corporation and their agents.

We have assumed such information to be correct and complete in all material aspects.

We have not attempted to independently verify public or private information considered in our valuation.

We have held discussions with Management regarding the condition and outlook for its operations, and have made such other investigations and analyses, as we have deemed necessary.

We have assumed that there has been no material change in Bluegate Corporation’s financial condition, results of operations, business or prospects since the date of the last financial statements unless otherwise noted.

We believe that the analysis of management’s anticipated performance and resulting lack of cash flow is a reasonable estimation, based upon past performance and based on the information available to us at this time.  In addition, Bluegate Corporation’s management has represented that there are no pending contracts or work in progress that have not been disclosed.

The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant quantitative and qualitative methods of financial analyses and the application of those methods to the particular circumstances.  Therefore, such an opinion is not readily susceptible to the partial analysis or summary description.  Furthermore, in arriving at our opinion, we did not attribute any particular weight to any specific analysis or factor.  Rather, we have made qualitative judgments as to the significance and relevance of each.

Accordingly, Convergent Capital Appraisers believes that our analysis must be considered as a whole.

In our analyses, we made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Bluegate Corporation.  Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth therein.

Convergent Capital Appraisers or through a predecessor firm McClure, Schumacher and Associates, LLP have previously performed independent valuations of Bluegate Corporation or related entities.

Neither Convergent Capital Appraisers nor the individuals involved with this analysis have any present or contemplated future interest in the Plan or Bluegate Corporation or any other interest that might tend to prevent making a fair and unbiased appraisal.

These conclusions are based upon methodologies and financial fairness considerations that we deem appropriate.  In accordance with recognized professional ethics, our fees for this service are not contingent upon the opinions expressed herein.

This Opinion is furnished solely for the benefit of Management and the Board of Directors and may not be relied upon by any other person or for any other purpose without our express, prior, written consent.

This Opinion is delivered subject to the conditions, scope of the engagement, limitations and understandings set forth in this Opinion and our engagement letter.

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Convergent Capital Appraisers shall not be subjected to any personal liability whatsoever to any person, or on behalf of you or your affiliates.  Convergent Capital Appraisers has been retained on behalf of and has delivered this Opinion solely to the Management and the Board of Directors.

Notwithstanding that, Convergent Capital Appraisers’ fees and expenses are being paid by Bluegate Corporation and certain covenants and representations have been made by Bluegate Corporation.

Sincerely,

By: /s/ Jeffrey A. Schumacher

Jeffrey A. Schumacher

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Interviews

Multiple teleconferences were held with Mr. Charles Leibold over the period of October 21 through November 6, 2009.  The report has been submitted in draft form to the Board of Directors for review and comment.

Upon receiving the Board’s comments and suggestions, the report was finalized and signature affixed.

Bibliography

·   Bluegate Corporation SEC filing 10Q for the quarters ended 2005 – 2008

·   Internally prepared financial statements and supporting as well as specially prepared related schedules for the nine months endedSeptember 2009

·   Synopsis of the purchase and sale contract between the Sperco entity and Bluegate Corporation

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Curriculum Vitae

Jeffrey A. Schumacher, CPA, ABV, ASA

EDUCATION & CERTIFICATIONS

Certified Public Accountant (CPA) State of Texas

Accredited in Business Valuation (ABV)

American Institute of Certified Public Accountants

Accredited Senior Appraiser / Business Valuation (ASA)

American Society of Appraisers

B.B.A.  (1976) Finance Major  Valparaiso University

PROFESSIONAL AFFILIATIONS

American Institute of Certified Public Accountants

American Society of Appraisers – Accredited Senior Member

ASA Houston Chapter Treasurer 2003-2004

ASA Houston Chapter President 2004-2005

PROFESSIONAL EXPERIENCE

2007 - Present                                FOUNDER and MANAGING MEMBER

Convergent Capital Appraisers LLC

Houston, Texas

Business valuation, forensic analysis, special issue damages, business interruption claims, interim management, litigation support, family law issues, valuation and consulting in mergers and acquisitions, partnership dissolutions, dissenting stockholder disputes, ESOP appraisals, partnership disputes, insurance fraud, patent infringement and estate and gift taxation issues.  Jeff was a pioneer in the design of business valuation software beginning in the early 1980s.

1996 - 2007                                FOUNDER and PARTNER

McClure, Schumacher & Associates L.L.P.

Houston, Texas

Business appraisal, litigation support, financial consulting and mergers and acquisitions

1990 - 1996                                FOUNDER and PARTNER

Smith & Schumacher

Houston, Texas

Business appraisal, litigation support, financial consulting and mergers and acquisitions

1983 - 1990                                ANALYST

Served as a contract financial analyst for several valuation firms in Houston and Dallas, Texas.  These firms included Certified Business Brokers, Abraham & Associates, Highview Services, Aden-Smith, and American Business Group.

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SPEAKING ENGAGEMENTS

Texas Society of Certified Public Accountants

1995, 1996, 1997 Asset Protection through Family Limited Partnerships

1994 Litigation Support Conference – Commercial vs. Personal Goodwill

1997 Litigation Support Conference - Discounts – What’s Fair

1997 Galveston Family CPE Conference - Basics of Business Valuation

1998 Galveston Family CPE Conference - Use and Abuse of Discounts

1999 South Texas School of Law – Litigation Support Conference –Daubert Discussion Panelist

2000 Advanced Family Law Conference – Internet Research & Sites

2000 South Texas School of Law – Litigation Support Conference – Damage Models Discussion Panelist

AWSPA-ASWA 54th Annual Conference

1994  Basic Business Valuation Techniques and Issues

Houston Bar Association, Family Law Section

1995 Appraising the Appraiser: Family Law Valuations

2003 Section 1041 and Marital Property Divisions

American Society of Appraisers

1998 Daubert & Robinson

Northeast Harris County Bar Association

2000 Equitable Interest

University of Houston

2002 Business Valuation - Discounts

2003 Business Valuation - Discounts

2004 Business Valuation – Discounts

Financial Consulting Group

2004 A multiple Regression Model for Predicting Discounts

Materials Marketing Associates, Inc.

2008 Annual Meeting, Miami, FL – Business Valuation and Exit Strategies

PUBLICATIONS

Houston Business Journal July 16-22, 1999

So How Much Is My Closely Held Business Worth?

Houston Business Journal May 16-22, 2003

Small Business Owners May Face Big Challenges in Divorce Court

Valuation Strategies September/October 2005

Estimating Minority Interest Discounts

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