-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NrgGVNgg4pzJHIBwbFaJZ5uybOlqK5zOxCClZQa+164tQkIf30X20a2QmZYUW+Ks /Jc4Xtz05bEU1qTItIwErw== 0001015402-05-001766.txt : 20050406 0001015402-05-001766.hdr.sgml : 20050406 20050406172140 ACCESSION NUMBER: 0001015402-05-001766 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20050331 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Amendments to the Registrant.s Code of Ethics, or Waiver of a Provision of the Code of Ethics ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050406 DATE AS OF CHANGE: 20050406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUEGATE CORP CENTRAL INDEX KEY: 0000768216 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 870565948 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22711 FILM NUMBER: 05737674 BUSINESS ADDRESS: STREET 1: 701 NORTH POST OAK ROAD STREET 2: SUITE 630 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 7136827400 MAIL ADDRESS: STREET 1: 701 NORTH POST OAK ROAD STREET 2: SUITE 630 CITY: HOUSTON STATE: TX ZIP: 77024 FORMER COMPANY: FORMER CONFORMED NAME: CRESCENT COMMUNICATIONS INC DATE OF NAME CHANGE: 20010921 FORMER COMPANY: FORMER CONFORMED NAME: BERENS INDUSTRIES INC DATE OF NAME CHANGE: 19990823 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL AIR CORP DATE OF NAME CHANGE: 19970521 8-K 1 body.txt BLUEGATE CORPORATION 8-K 3-31-2005 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): March 31, 2005 ---------------- BLUEGATE CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its Charter) Nevada 000-22711 76-0640970 - -------------------------------------------------------------------------------- (State or other (Commission File (IRS Employer jurisdiction of Incorporation) Number) Identification Number) 701 North Post Oak, Road, Suite 630, Houston, Texas 77024 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 713/682-7400 ------------ - -------------------------------------------------------------------------------- (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 (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Bluegate Corporation (the "Company") recently entered into several material definitive agreements. A. STOCK-FOR-DEBT EXCHANGES On March 31, 2005, the Company entered into separate agreements with (a) Manfred Sternberg, a director of the Company and the Company's Chief Executive Officer, (b) an entity (the "Sternberg Entity") under the control of Mr. Sternberg, and (c) three entities (collectively, the "Davis Entities") under the control of Robert Davis, a former director of the Company. Pursuant to these agreements, the Company issued to Mr. Sternberg, the Sternberg Entity and the Davis Entities shares of the Company's common stock in satisfaction of indebtedness separately owed by the Company to them. This indebtedness totaled $130,018, $154,297, and $222,000 for Mr. Sternberg, the Sternberg Entity and the Davis Entities, respectively. Of the preceding amounts of indebtedness, $55,185 of the indebtedness owned to Mr. Sternberg was for a loan while $74,833 of such indebtedness was for accrued salary, all of the indebtedness owned to the Sternberg Entity was for accrued fees for legal services provided, and all of the indebtedness owned to the Davis Entities was for a loan. In satisfaction of this indebtedness, Mr. Sternberg, the Sternberg Entity and the Davis Entities respectively received 260,036, 308,594 and 440,000 shares of the Company's common stock. The shares issued to Mr. Sternberg, the Sternberg Entity and the Davis Entities respectively constituted approximately 5.5%, 6.5% and 9.3% of the shares of the Company's common stock outstanding after the completion of all of the stock issuances occurring on or about March 31, 2005. The number of shares that Mr. Sternberg, the Sternberg Entity and the Davis Entities received was computed on the basis of a $.50 per-share stock price. The closing price for the Company's common stock on March 24, 2005 (the last date on which such stock traded before March 31, 2005) was $.70. In arriving at the $.50 per-share stock price used in computing the number of shares received, the Company considered the comparative lack of liquidity of the Company's common stock and the legal restrictions on transferability that would exist on such shares. In connection with and as additional consideration for this stock-for-debt transaction, the Company issued to Mr. Sternberg, the Sternberg Entity and the Davis Entities warrants to purchase an aggregate of 260,036, 308,594 and 440,000 shares, respectively, of the Company's common stock at a per share price of $1.00. Because the shares of common stock received by Mr. Sternberg, the Sternberg Entity and the Davis Entities were not registered under the Securities Act of 1933, as amended (the "Act"), such shares are "restricted securities" (as defined in Rule 144 promulgated under the Act) and accordingly, may not be sold or transferred by Mr. Sternberg, the Sternberg Entity or the Davis Entities unless such shares are registered under the Act or are sold or transferred pursuant to an exemption therefrom. In connection with the stock-for-debt transactions, the Company granted "piggyback" registration rights to include all shares being issued separately to Mr. Sternberg, the Sternberg Entity and the Davis Entities in connection with this transaction in a future registration statement filed with the the Securities and Exchange Commission (the "Commission"). In consideration of the issuance of the shares described above, the Company no longer owes any amounts to either of the Sternberg Entity or any of the Davis Entities. The Company continues to owe $34,000 to Mr. Sternberg for a loan made by him to the Company. B. LENDING ARRANGEMENT On March 31, 2005, the Company entered into an unsecured short-term borrowing arrangement with one private investor. Pursuant to this arrangement, the Company borrowed an aggregate of $100,000. This principal amount, together with interest at a rate of 10% per annum, is due and payable in full on or before November 1, 2005. The indebtedness is convertible, at the option of the investor, into shares of the Company's common stock at a conversion rate equal to one share of common stock for each $.50 in outstanding principal and accrued interest. The indebtedness is automatically convertible into shares of the Company's common stock at the preceding conversion rate whenever the Commission has declared effective a registration statement covering the resale of the shares to be issued to the investor upon conversion of the indebtedness. In connection with and as additional consideration for this borrowing transaction, the Company issued to the investor warrants to purchase an aggregate of 100,000 shares of the Company's common stock at a per share price of $1.00. Moreover, the Company granted to the investor piggyback" registration rights to include the shares to be issued to the investor upon conversion of the indebtedness in a future registration statement filed with the Commission. ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES. As described in "Item 1.01 Entry into a Material Definitive Agreement," the Company issued to (a) Manfred Sternberg, a director of the Company and the Company's Chief Executive Officer, (b) an entity (the "Sternberg Entity") under the control of Mr. Sternberg, and (c) three entities (collectively, the "Davis Entities") under the control of Robert Davis, a former director of the Company, 260,036, 308,594 and 440,000 shares of the Company's common stock, respectively, in satisfaction of outstanding indebtedness separately owed by the Company to them. In connection with and as additional consideration for this stock-for-debt transaction, the Company issued to Mr. Sternberg, the Sternberg Entity and the Davis Entities warrants to purchase an aggregate of 260,036, 308,594 and 440,000 shares, respectively, of the Company's common stock at a per share price of $1.00. Because or Mr. Sternberg's, the Sternberg Entity's and Davis's Entities' relationships to the Company and their adequate access to information about the Company and with their ability to protect adequately their interests, the issuances of the shares of common stock and the warrants are claimed to be exempt, and the issuance of the common stock underlying the warrants will be claimed to be exempt, pursuant to Section 4(2) of the Act. The Company believes that the preceding securities also are or will be exempt pursuant to Rule 506 of Regulation D under the Act. As described in "Item 1.01 Entry into a Material Definitive Agreement," the Company entered into a borrowing arrangement involving indebtedness that is convertible into shares of the Company's common stock and in which the Company issued to one private investor warrants to purchase an aggregate of 100,000 shares of the Company's common stock at a per share price of $1.00. The issuances of the warrants is claimed to be exempt, and the issuance of the common stock underlying indebtedness or the warrants will be claimed to be exempt, pursuant to Rule 506 of Regulation D under the Act. No advertising or general solicitation was or will be employed in offering these securities. The offering and sale was made to only one accredited investors, and subsequent transfers were and will be restricted in accordance with the requirements of the Act. To the extent that the instruments representing the indebtedness are deemed to be "securities" for purposes of applicable securities law, the issuances of these instruments will be claimed to be exempt pursuant to Rule 506 of Regulation D under the Act for the same reasons stated hereinabove. On March 31, 2005, the Company sold to CCII Joint Venture No. 1 (the "Joint Venture"), a Texas joint venture comprised of family members of Greg J. Micek, the Company's Chief Financial Officer, 450,000 shares of the Company's common stock and a warrant to purchase an additional 450,000 shares of the Company's common stock at a per share price of $1.00. The aggregate purchase price for these shares and warrants was $225,000. The issuances of the common stock and the warrants is claimed to be exempt, and the issuance of the common stock underlying the warrants will be claimed to be exempt, pursuant to Rule 506 of Regulation D under the Act. No advertising or general solicitation was or will be employed in offering these securities. The offering and sale was made to only one accredited investor, and subsequent transfers were and will be restricted in accordance with the requirements of the Act. During March 2005, the Company entered into an agreement with a service provider whereby the Company agreed to issue to such provider up to 430,000 shares of the Company's common stock and a warrant to purchase an additional 125,000 shares of the Company's common stock at a per share price of $1.00. As of the date of this Report, 99,000 shares had been issued to the service provider pursuant to this agreement. After the agreement has been in effect for three month, additional tranches comprised of 33,000 shares will be issued to the service provider every 30 days thereafter until all of the shares required by the agreement have been issued. The issuances of the common stock and the warrants are and will be claimed to be exempt, and the issuance of the common stock underlying the warrants will be claimed to be exempt, pursuant to Rule 506 of Regulation D under the Act. No advertising or general solicitation was or will be employed in offering these securities. The offering and sale was made to only one investor, and subsequent transfers were and will be restricted in accordance with the requirements of the Act. ITEM 5.05 AMENDMENTS TO THE REGISTRANT'S CODE OF ETHICS, OR WAIVER OF A PROVISION OF THE CODE OF ETHICS A couple of the transactions described hereinabove (herein referred to as the "Subject Transactions") involved the Company, on the one hand, and a current or former member of the Company's management or another person related directly or directly to a current member of the Company's management, on the other hand. The Subject Transactions specifically include (a) the issuance of shares and warrant to purchase additional shares to (i) Manfred Sternberg, a director of the Company and the Company's Chief Executive Officer, (ii) an entity under the control of Mr. Sternberg, and (iii) three entities under the control of Robert Davis, a former director of the Company, in satisfaction of outstanding indebtedness owed by the Company to them, and (b) the issuance to CCII Joint Venture No. 1, a Texas joint venture comprised of family members of Greg J. Micek, the Company's Chief Financial Officer, for a cash payment of $225,000 of shares of the Company's common stock and warrant to purchase additional such shares. For more information regarding the Subject Transactions, see "Item 1.01 Entry into a Material Definitive Agreement" and "Item 3.02. Unregistered Sales of Equity Securities" above. The Company has adopted a Code of Ethics that applies to the Company's senior management. The purposes of the Code of Ethics are to secure compliance with legal requirements, to deter wrongdoing, and to promote ethical conduct, and full, fair, accurate, timely, and understandable disclosure of financial information in the periodic reports of the Company. The Subject Transactions could be viewed as having apparent or real conflicts of interest between the Company, on the one hand, and current or former members of the Company's management, on the other hand. After a review of the Company's Code of Ethics, the Company is not certain that any of the Subject Transactions violate any express provision of such code, although one or more of the Subject Transactions might be viewed as violating the spirit of such code. Nevertheless, the disinterested members of the Company's Board of Directors approved each of the Subject Transactions and waived any conflict between them and the Company's Code of Ethics. Moreover, the Company believes that each of the Subject Transactions was fair to the Company at the time that it was approved, and thus is valid under relevant corporation law. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit Number Exhibit Title 10.1 Warrant in favor of Manfred Sternberg 10.2 Registration Rights Agreement in favor of Manfred Sternberg 10.3 Warrant in favor of Manfred Sternberg & Associates, P.C. 10.4 Registration Rights Agreement in favor of Manfred Sternberg & Associates, P.C. 10.5 Warrant in favor of Madred Partners, Ltd. 10.6 Registration Rights Agreement in favor of Madred Partners, Ltd. 10.7 Warrant in favor of MPH Production Company, Inc. 10.8 Registration Rights Agreement in favor of MPH Production Company, Inc. 10.9 Warrant in favor of Laguna Rig Service, Inc. 10.10 Registration Rights Agreement in favor of Laguna Rig Service, Inc. 10.11 Warrant in favor of CCII Joint Venture No. 1 10.12 Registration Rights Agreement in favor of CCII Joint Venture No. 1 10.13 10% Convertible Debenture in favor of Platinum Partners Global Macro Fund, LP 10.14 Warrant in favor of Platinum Partners Global Macro Fund, LP 10.15 Contract for Corporate Advisory Services between Registrant and Diablo Consultants, Inc. 10.16 Escrow Agreement relating to Diablo Consultants, Inc. SIGNATURES 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 (Registrant) Date April 6, 2005 By: /s/ Manfred Sternberg ---------------------- Manfred Sternberg, Chief Executive Officer EX-10.1 2 ex10_1.txt EXHIBIT 10.1 EXHIBIT 10.1 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-05 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that Manfred Sternberg, (together with his permitted assigns, the "Registered Holder"), is the holder of 260,036 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as 2 the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective 3 registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. Subject to Section 4 above: 4 (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. Any term of this Warrant Certificate may be changed or waived only by an instrument in 5 writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Greg Micek -------------------------------- Geg Micek Chief Financial Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:__________________________________ Name:________________________________ Title:_______________________________ Dated:_______________________________ EX-10.2 3 ex10_2.txt EXHIBIT 10.2 EXHIBIT 10.2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) Manfred Sternberg ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") pursuant to the conversion or exercise of derivative securities, particularly a convertible note and warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION MANFRED STERNBERG By: /s/ Greg Micek /s/ Manfred Sternberg ------------------------------- ----------------------------------- Greg Micek, Manfred Sternberg Chief Financial Officer Address: 701 N. Post Oak Blvd., Address: 701 N. Post Oak Road, Suite 630 Suite 630 Houston, Texas 77024 Houston, Texas 77024 4 EX-10.3 4 ex10_3.txt EXHIBIT 10.3 EXHIBIT 10.3 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-04 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that Manfred Sternberg & Associates, P.C., (together with his permitted assigns, the "Registered Holder"), is the holder of 308,495 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as 2 the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective 3 registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. Subject to Section 4 above: 4 (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. Any term of this Warrant Certificate may be changed or waived only by an instrument in 5 writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Greg Micek -------------------------------------- Greg Micek Chief Financial Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:________________________________ Name:______________________________ Title:_____________________________ Dated:_____________________________ EX-10.4 5 ex10_4.txt EXHIBIT 10.4 EXHIBIT 10.4 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) Manfred Sternberg & Associates, PC ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") as payment for legal services rendered or exercise of derivative securities, particularly a warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION MANFRED STERNBERG & ASSOCIATES, PC By: /s/ Greg Micek By: /s/ Manfred Sternberg -------------------------------- -------------------------------- Greg Micek, Chief Financial Officer Name: Manfred Sternberg Title: President Address: 701 N. Post Oak Blvd., Address: 701 N. Post Oak Road, Suite 630 Suite 630 Houston, Texas 77024 Houston, Texas 77024 4 EX-10.5 6 ex10_5.txt EXHIBIT 10.5 EXHIBIT 10.5 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-08 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that MADRED Partners, Ltd., (together with his permitted assigns, the "Registered Holder"), is the holder of 347,050 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as 2 the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective 3 registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. Subject to Section 4 above: 4 (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. Any term of this Warrant Certificate may be changed or waived only by an instrument in 5 writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg -------------------------------- Manfred Sternberg, Chief Executive Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:________________________________ Name:______________________________ Title:_____________________________ Dated:_____________________________ EX-10.6 7 ex10_6.txt EXHIBIT 10.6 EXHIBIT 10.6 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) MADRED Partners, Ltd. ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") pursuant to the conversion or exercise of derivative securities, particularly convertible notes and a warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION MADRED MANAGEMENT, LLC GENERAL PARTNER, MADRED PARTNERS, LTD. By: /s/ Manfred Sternberg By: /s/ Robert Davis ------------------------------------ ---------------------------------- Manfred Sternberg Chief Executive Office Name: Robert Davis Title: Manager Address: 701 N. Post Oak Blvd., Suite 630 Address: ----------------------------- Houston, Texas 77024 ------------------------------------- 4 EX-10.7 8 ex10_7.txt EXHIBIT 10.7 EXHIBIT 10.7 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-07 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that MPH Production Company, Inc., (together with his permitted assigns, the "Registered Holder"), is the holder of 40,000 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as 2 the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective 3 registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. Subject to Section 4 above: 4 (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. Any term of this Warrant Certificate may be changed or waived only by an instrument in 5 writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg --------------------------------------- Manfred Sternberg, Chief Executive Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:__________________________________ Name:________________________________ Title:_______________________________ Dated:_______________________________ EX-10.8 9 ex10_8.txt EXHIBIT 10.8 EXHIBIT 10.8 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) MPH Production Company, Inc. ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") pursuant to the conversion or exercise of derivative securities, particularly a convertible note and a warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION MPH PRODUCTION COMPANY, INC. By: /s/ Manfred Sternberg By: /s/ Robert Davis ---------------------------------- ---------------------------------- Manfred Sternberg, Chief Executive Officer Name: Robert Davis Title: President Address: 701 N. Post Oak Blvd., Suite 630 Address: Houston, Texas 77024 ------------------------ -------------------------------- 4 EX-10.9 10 ex10_9.txt EXHIBIT 10.9 EXHIBIT 10.9 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-06 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that Laguna Rig Service, Inc., (together with his permitted assigns, the "Registered Holder"), is the holder of 52,950 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as 2 the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective 3 registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. Subject to Section 4 above: 4 (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. Any term of this Warrant Certificate may be changed or waived only by an instrument in 5 writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg -------------------------------- Manfred Sternberg, Chief Executive Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:________________________________ Name:______________________________ Title:_____________________________ Dated:_____________________________ EX-10.10 11 ex10_10.txt EXHIBIT 10.10 EXHIBIT 10.10 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) Laguna Rig Service, Inc. ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") pursuant to the conversion or exercise of derivative securities, particularly a convertible note and a warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION MPH PRODUCTION COMPANY, INC. By: /s/ Manfred Sternberg By: /s/ Robert Davis ---------------------------------- ---------------------------------- Manfred Sternberg, Chief Executive Officer Name: Robert Davis Title: President Address: 701 N. Post Oak Blvd., Suite 630 Address: Houston, Texas 77024 ----------------------------- ------------------------------------- 4 EX-10.11 12 ex10_11.txt EXHIBIT 10.11 EXHIBIT 10.11 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-03 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON MARCH 30, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that CCII Joint Venture No. 1, a Texas joint venture, (together with his permitted assigns, the "Registered Holder"), is the holder of 450,000 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after March 30, 2005 and on or before March 30, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or property which such Registered Holder would have been entitled to receive if, immediately prior to 2 any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any 3 of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. 4 Subject to Section 4 above: (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. 5 Any term of this Warrant Certificate may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 30th day of March, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg -------------------------------- Manfred Sternberg, Chief Executive Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:________________________________ Name:______________________________ Title:_____________________________ Dated:_____________________________ EX-10.12 13 ex10_12.txt EXHIBIT10.12 EXHIBIT 10.12 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into as of the 30th day of March, 2005 by and between (i) Bluegate Corporation, a Nevada corporation (the "Company"), and (ii) CCII Joint Venture No. 1 ("Stockholder"). RECITALS: WHEREAS, Stockholder may acquire certain shares of the Company's Common Stock (the "Common Stock") pursuant to the conversion or exercise of derivative securities, particularly a convertible debenture and a warrant to purchase Common Stock (for purposes hereof, all shares of the Company's Common Stock that Stockholder may now or hereafter own, and all shares of the Company's Common Stock underlying any derivative securities that Stockholder may now or hereafter own, are collectively referred to hereinafter as the "Registrable Shares"); and WHEREAS, the Company agreed to grant certain registration rights to Stockholder with respect to the Registrable Shares in connection with their acquisition by Stockholder; AGREEMENTS: NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the Company and Stockholder, each of the Company and Stockholder hereby agrees as follows: (a) If at any time after the date hereof the Company proposes to register any Common Stock under the Securities Act of 1933, as amended (the "Act"), for sale to the public for cash (and not for issuance pursuant to an employee benefit plan or in connection with an acquisition of another company or business or in connection with any other registration that does not allow the registration of secondary sales), the Company shall give written notice to Stockholder of its intention so to do at least 20 days prior to filing the related registration statement (the "Registration Statement"). Upon the written request of Stockholder, given within 10 days after receipt of any such notice, to register any Registrable Shares, the Company shall use its best efforts to cause all Registrable Shares, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by Stockholder of the Registrable Shares requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to Stockholder, and thereupon the Company shall be relieved of its obligation to register any Registrable Shares in connection with such registration; (ii) If such registration involves an underwritten offering, Stockholder must sell its Registrable Shares to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The number of Registrable Shares to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise Stockholder and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. (b) In connection with the registration provided for hereunder, Stockholder shall use reasonable efforts to cooperate with the Company and shall furnish to the Company in writing such information with respect to it and its proposed distribution as shall be reasonably necessary in order to assure compliance with federal and applicable state securities laws. (c) The Company shall pay all expenses incurred by the Company in complying with its registration obligations pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, blue sky fees and expenses, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, all expenses of the underwriter customarily paid by issuers or sellers of securities (including fees of the National Association of Securities Dealers, Inc.), transfer taxes, escrow fees, fees of transfer agents and registrars, and costs of insurance. Stockholder shall pay all underwriting discounts and selling commissions applicable to the sale of the Registrable Shares being registered. (d) (i) The Company shall protect, indemnify and hold Stockholder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (aa) and (bb) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or 2 prospectus or information contained in a writing that has been expressly approved or deemed approved by a person otherwise entitled to indemnification. (ii) Stockholder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (aa) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (bb) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (cc) any material violation by Stockholder of any rule or regulation promulgated under the Act applicable to Stockholder and relating to action or inaction by Stockholder in connection with any such registration; provided, however, that Stockholder shall be liable in the case of (aa) and (bb) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by Stockholder in writing specifically for use in the Registration Statement or prospectus or information contained in a writing that has been expressly approved or deemed approved by Stockholder. (iii) Promptly after receipt by an indemnified party under this Section (d) of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section (d) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the 3 giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. (e) Any notice or request herein required or permitted to be given to any party hereunder shall be given in writing and shall be personally delivered or sent to such party by prepaid mail at the address set forth below the signature of such party hereto or at such other address as such party may designate by written communication to the other party to this Agreement. Each notice given in accordance with this paragraph shall be deemed to have been given, if personally delivered, on the date personally delivered, or, if mailed, on the third day following the day on which it is deposited in the United States mail, certified or registered mail, return receipt requested, with postage prepaid. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to the subject matter hereof. This Agreement may not be amended, supplemented, waived, or terminated except by written instrument executed by the Company and Stockholder. No waiver of any provision of this Agreement shall constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a waiver of any subsequent breach of such provision. This Agreement shall be binding upon and shall inure to the benefit of each party hereto and his or its respective successors, heirs, assigns, and legal representatives. Stockholder may assign to a transferee or assignee the rights granted to Stockholder under this Agreement in connection with any transfer or assignment of Registrable Shares by the Stockholder or its assignees. The obligations imposed on the Company by this Agreement shall be binding upon any corporation into which the Company is merged or to whom substantially all of the Company's assets are sold, and the Company may not merge or sell its assets in this regard without previously having the surviving corporation or purchaser (as the case may be) agree to assume the Company's obligations hereunder. IN WITNESS WHEREOF, the undersigned have set their hands hereunto as of the first date written above. "COMPANY" "STOCKHOLDER" BLUEGATE CORPORATION CCII JOINT VENTURE NO. 1 By: /s/ Manfred Sternberg By: /s/ Shun Kwong ------------------------------- ----------------------------------- Manfred Sternberg, Shun Kwong Chief Executive Officer By: /s/ Laura Micek ----------------------------------- Laura Micek Address: 701 N. Post Oak Blvd., Address: Suite 630 ----------------------------- Houston, Texas 77024 ------------------------------------- 4 EX-10.13 14 ex10_13.txt EXHIBIT 10.13 EXHIBIT 10.13 THIS DEBENTURE AND THE SHARES OF COMMON STOCK UNDERLYING THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. BLUEGATE CORPORATION 10% CONVERTIBLE DEBENTURE DUE NOVEMBER 1, 2005 No. 1 $100,000.00 FOR VALUE RECEIVED, Bluegate Corporation, a Nevada corporation (the "Company"), promises to pay to Platinum Partners Global Macro Fund, LP, whose address is 152 West 57th Street, 54th Floor, New York, NY 10013, or registered assigns (the "Holder"), the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) in lawful money of the United States of America on or before the Maturity Date as defined herein, with all Interest thereon as defined and specified herein. 1. INTEREST. This Debenture shall bear interest ("Interest") at the rate of ten percent (10%) per annum from the Issue Date through the Maturity Date. The Company shall pay such Interest in cash on the Maturity Date. 2. PRE-PAYMENTS AND MATURITY DATE. This Debenture shall be due and payable in full, including all accrued Interest thereon, on November 1, 2005 ("Maturity Date"). The Company may prepay this Debenture at any time after issuance without penalty. 3. [INTENTIONALLY OMITTED.] 4. CONVERSION OF DEBENTURE. 4.1 Conversion Price. This Debenture is convertible, at the option of the Holder, into shares ("Shares") of the Company's common stock, par value $.001 per share ("Common Stock"), at any time after the Issue Date and prior to the close of business on the business day prior to the Maturity Date or conversion date, as the case may be. The conversion price for the conversion (the "Conversion Price") will be equal to $.50 per share, subject to adjustment as provided in Subsection 4.2, and the number of Shares to which the Holder shall be entitled shall be determined by dividing the then outstanding principal amount of and interest on this Debenture by the Conversion Price then in effect. 4.2 Adjustment Based Upon Stock Dividends, or Combination of Shares. The Conversion Price shall each be adjusted in the manner described in the remainder of this Subsection 4.2. If the outstanding shares of the Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Conversion Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding Shares shall be combined into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. 4.3 Adjustment Based Upon Merger, Consolidation or Recapitalization. In case of any consolidation or merger to which the Company is a party (other than a merger in which the Company is the surviving entity and which does not result in any reclassification of or change in the outstanding Common Stock of the Company), or in case of any sale or conveyance to another person, firm, or corporation of the property of the Company as an entirety or substantially as an entirety, or in case of any capital reorganization or reclassification of the Common Stock (other than a change in par value or a subdivision or combination as provided for in Subsection 4.2 immediately above), the Holder shall have the right to convert this Debenture into the kind and amount of securities and property (including cash) receivable upon such consolidation, merger, sale, or conveyance, reorganization or reclassification by a holder of the number of Shares into which such Debenture might have been converted immediately prior thereto. 4.4 Exercise of Conversion Privilege. The conversion privilege provided for herein shall be exercisable by the Holder by written notice to the Company or its successor and the surrender of this Debenture in exchange for the number of shares (or other securities and property, including cash, in the event of an adjustment of the Conversion Price) into which this Debenture is convertible based upon the Conversion Price. Conversion rights will expire at the close of business on the business day prior to the Maturity Date. 4.5 Corporate Status of Common Stock to be Issued. All Common Stock (or other securities in the event of an adjustment of the Conversion Price), which may be issued upon the conversion of this Debenture, shall upon issuance be fully paid and non-assessable. 4.6 Issuance of Certificate. Upon the conversion of this Debenture, the Company shall in due course issue to the Holder a certificate or certificates representing the number of Shares (or other securities in the event of an adjustment of the Conversion Price) to which the conversion relates. 4.7 Fractional Shares. No fractional Shares will be issued. In lieu thereof, the Company will pay cash for fractional Share amounts equal to the closing sale price of the Common Stock on the date of conversion, determined as follows: 4.7.1 If the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such exchange, the current value shall be the last reported sale price of the Common Stock on such exchange on the last business day prior to the date of conversion of -2- this Debenture, or if no such sale is made on such day, the average closing bid and asked prices for such day on such exchange; or 4.7.2 If the Common Stock is not listed or admitted to unlisted trading privileges, the current value shall be the last reported sale price or the mean of the last bid and asked prices reported by the National Association of Securities Dealers Automated Quotation System on the Nasdaq Small-Cap Market, Nasdaq National Market System or OTC Bulletin Board (or, if not so quoted on NASDAQ, by the National Quotation Bureau, Inc. or other reporting system for the public market in which the Common Stock trades) on the last business day prior to the date of the conversion of this Debenture; or 4.7.3 If the Common Stock is not so listed or admitted to unlisted trading privileges and prices are not reported on NASDAQ, the current value shall be an amount, not less than the book value, determined in such reasonable manner as may be prescribed by the Board of Directors of the Company. 4.8 Automatic Conversion. If prior to the Maturity Date a registration statement covering the resale of the Shares to be issued to the Holder upon conversion of this Debenture shall be declared effective by the Securities and Exchange Commission (the "Commission"), then this Debenture shall fully, automatically and without any action on the part of the Holder, convert into Shares. The conversion price for any automatic conversion under this Subsection 4.8 shall be the Conversion Price then in effect as theretofore adjusted as provided in Subsection 4.2, and the number of Shares to which the Holder shall be entitled shall be determined by dividing the then outstanding principal amount of and interest on this Debenture by the Conversion Price then in effect. 5. STATUS OF HOLDER OF DEBENTURE. This Debenture shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company or to any rights whatsoever except the rights herein expressed, and no dividends shall be payable or accrue in respect of this Debenture or the securities issuable upon the conversion hereof unless and until this Debenture shall be converted. Upon the conversion of this Debenture, the Holder shall, to the extent permitted by law, be deemed to be the holder of record of the Shares issuable upon such conversion, notwithstanding that the stock transfer books of the Company shall then be closed or that the certificates representing such Shares shall not then be actually delivered. Immediately upon the conversion of this Debenture, the rights of Holder under this Debenture shall cease except with regard to the right to receive the Shares issuable upon conversion. As promptly as practicable after either the conversion of this Debenture, Holder shall surrender this Debenture marked "Cancelled." 6. RESERVE OF SHARES. The Company shall reserve out of its authorized Shares (and other securities in the event of an adjustment of the Conversion Price) a number of shares sufficient to enable it to comply with its obligation to issue Shares (and other securities in the event of an adjustment of the Conversion Price) upon the conversion of this Debenture. 7. REGISTRATION RIGHTS. 7.1 The Holder of this Debenture shall have the right to join with the Company to register the Common Stock underlying the Debenture or any warrant to purchase Common Stock -3- issued in connection herewith ("Underlying Common Stock") in any Registration Statement under the Securities Act of 1933 (the "Act") filed by the Company with the Commission, which includes a public offering of equity securities for cash, either for the account of the Company or for the account of any other person. This right to join with the Company in a Registration Statement under the Securities Act of 1933 (the "Act") is not applicable to a Registration Statement filed by the Company with the Commission on Form S-4, S-8, or any other form not registering a public offering of equity securities for cash. If, at any time, the Company proposes to file a Registration Statement as described above with the Commission, it shall, at least thirty (30) days prior to such filing, give written notice of such proposed filing to the Holder and its designees at their addresses appearing on the records of the Company and shall offer to include in any such filing any proposed disposition of the Underlying Common Stock. Within fifteen (15) days of receipt of the Company's notice of filing, the owners of the Underlying Common Stock may request registration of the Underlying Common Stock pursuant to a written request setting forth the intended method of distribution and such other data or information as the Company or its counsel shall reasonably require and the Company shall use its best efforts to cause all Underlying Common Stock, as to which registration shall have been so requested, to be included in the securities to be covered by the Registration Statement, all to the extent requisite to permit the sale or other disposition by the undersigned of the Underlying Common Stock requested to be so registered; provided, however, that: (i) If, at any time after giving such written notice of its intention to register any securities and prior to the effective date of the Registration Statement, the Company shall determine for any reason not to register such securities, the Company may, at its election, give written notice of such determination to the undersigned, and thereupon the Company shall be relieved of its obligation to register any Underlying Common Stock in connection with such registration; (ii) If such registration involves an underwritten offering, the undersigned must sell its Underlying Common Stock to the underwriters selected by the Company on the same terms and conditions as apply to the Company (except as otherwise agreed to by the Company in writing); and (iii) The Company shall be obligated to keep the Registration Statement effective only for nine months after its initial effective date. The Company shall supply said owner(s) with copies of such Registration Statement, and of the prospectus included therein, in such quantities as may be reasonably necessary for the purpose of the proposed disposition. The Company will pay all registration expenses in connection with the registration pursuant to this Subsection. Such reasonable expenses will include all registration of filing fees, printing expenses and reasonable fees and disbursements of counsel for the Company and its independent certified public accountants, the fees and expenses associated with any required filing with the National Association of Dealers, Inc. ("NASD"). The Company is not required to pay any fees or expenses of Holder, placement agents or legal counsel of the Holder or placement agent, or accountant or any other advisors, including any transfer taxes, underwriting, brokerage or other discounts and commissions and finder's or similar fees payable with respect to the Common Stock registered in the Registration Statement. -4- 7.2 The number of Underlying Common Stock to be included in an underwritten offering may be reduced, pro rata among all the Company's stockholders selling shares in the offering, in a ratio equal to the respective amounts of shares proposed to be sold by such stockholders, if and to the extent that the managing underwriter shall advise the undersigned and the Company by letter of its belief that the number of securities requested to be registered exceeds the number that can be sold in (or during the term of) such offering without adversely affecting the marketing of the securities to be sold by the Company. 7.3 Each Holder shall pay all costs and expenses incurred by such Holder, including all transfer taxes, underwriting, brokerage and other discounts and commissions and finder's and similar fees payable with respect to the Underlying Common Stock registered pursuant to this Section 7. To the extent any registration expenses are incurred, assumed or paid by any Holder or any placement or sales agent therefor or underwriter thereof with the Company's prior consent, the Company shall reimburse such person for the full amount of the registration expenses so incurred, assumed or paid within a reasonable time after receipt of a written request for the same. Any registration expenses submitted by any Holder, placement agent, sales agent or underwriter on behalf of any such person for payment by the Company shall be itemized in detail and contain clear and accurate receipts of all expenditures made by such parties. 7.4 (a) The Company shall protect, indemnify and hold the Holder, and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (i) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any material violation by the Company of any rule or regulation promulgated under Act applicable to the Company and relating to action or inaction by the Company in connection with any such registration; provided, however, that the Company shall not be liable in the case of (i) and (ii) above if and to the extent that the event otherwise giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by a person otherwise entitled to indemnification in writing specifically for use in the Registration Statement or prospectus, or information contained in a writing that has been expressly approved by a person otherwise entitled to indemnification. (b) The Holder shall protect, indemnify and hold the Company and its officers, directors, stockholders, attorneys, accountants, employees, affiliates, successors and assigns, harmless from any and all demands, claims, actions, causes of actions, lawsuits, proceedings, investigations, judgments, losses, damages, injuries, liabilities, obligations, expenses and costs (including costs of litigation and attorneys' fees), arising out of or based upon (i) any untrue statement or alleged untrue statement of any material fact contained in or incorporated by reference into the Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, (ii) the omission or alleged omission to state therein a -5- material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any material violation by the Holder of any rule or regulation promulgated under the Act applicable to the Holder and relating to action or inaction by the Holder in connection with any such registration; provided, however, that the Holder shall be liable in the case of (i) and (ii) above only if and to the extent that the event giving rise to indemnification arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in conformity with information furnished by the Holder in writing specifically for use in the Registration Statement or prospectus, or information contained in a writing that has been expressly approved by the Holder. (c) Promptly after receipt by an indemnified party under this Subsection 7.4 of notice of the threat or commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party hereunder, notify each such indemnifying party in writing thereof, but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to any indemnified party to the extent that the indemnifying party is not prejudice as a result thereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Subsection 7.4 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so elected; provided, however, that, if the defendants in any such action include both an indemnified party and an indemnifying party and the related indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be believed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party shall be subject to any liability for any settlement made without consent, which shall not be unreasonably withheld. No indemnifying party shall consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability with respect to such claim or litigation. 8. DEFAULT. The Company shall perform its obligations and covenants hereunder and in each and every other agreement between the Company and Holder pertaining to the Indebtedness evidenced hereby. The following provisions shall apply upon failure of the Company so to perform. 8.1 Event of Default. Any of the following events shall constitute an "Event of Default" hereunder: 8.1.1 Failure by the Company to pay principal of any of the Debenture when due and payable on the Maturity Date; -6- 8.1.2 Failure of the Company to pay Interest when due hereunder, which failure continues for a period of thirty (30) days after the due date of the amount involved; or 8.1.3 Failure of the Company to perform any of the covenants, conditions, provisions or agreements contained herein, or in any other agreement between the Company and Holder pertaining to the Indebtedness evidenced hereby, which failure continues for a period of sixty (60) days after written notice of default has been given to the Company by the Holder; provided, however, that if the nature of the Company's obligation is such that more than sixty (60) days are required for performance, then an Event of Default shall not occur if the Company commences performance within such sixty (60) day period and thereafter diligently prosecutes the same to completion; or 8.1.4 The entry of an order for relief under Federal Bankruptcy Code as to the Company or entry of any order appointing a receiver or trustee for the Company or approving a petition in reorganization or other similar relief under bankruptcy or similar laws in the United States of America or any other competent jurisdiction, and if such order, if involuntary, is not satisfied or withdrawn within sixty (60) days after entry thereof; or the filing of a petition by the Company seeking any of the foregoing, or consenting thereto; or the filing of a petition to take advantage of any debtor's act; or making a general assignment for the benefit of creditors; or admitting in writing inability to pay debts as they mature. 8.2 Acceleration. Upon any Event of Default (in addition to any other rights or remedies provided for under this Debenture), at the option of the Holder, all sums evidenced hereby, including all principal, accrued but unpaid Interest, fees and all other amounts due hereunder, shall become immediately due and payable. If an Event of Default in the payment of principal or Interest should occur and be continuing with respect to the Debenture, the Holder may declare the principal of the Debenture to be immediately due and payable. In the Event of a Default due to a breach of any other covenant or term, Holder may take action to accelerate the Debenture. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company or any Subsidiary occurs and is continuing, the principal of and and interest on the Debenture will become and be immediately due and payable without any declaration or other act on the part of the Holder. Under certain circumstances, the Holder may rescind any such acceleration with respect to the Debenture and its consequences. 8.3 Notice by Company. Upon the happening of any Event of Default specified in this Section that is not cured within the respective periods prescribed above, the Company will give prompt written notice thereof to the Holder of this Debenture. 8.4 No Waiver. Failure of the Holder to exercise any option hereunder shall not constitute a waiver of the right to exercise the same in the event of any subsequent Event of Default, or in the event of continuance of any existing Event of Default after demand or performance thereof. 8.5 Default Interest. Default Interest will accrue on an unpaid principal or Interest due hereunder at the rate of eighteen percent (18%) per annum upon the occurrence of any Event of Default until the Event of Default is cured. -7- 9. INVESTMENT INTENT, RESTRICTIONS ON ASSIGNMENT, ASSIGNMENT, TRANSFER OR LOSS OF THE DEBENTURE. 9.1 (a) The Holder, by acceptance of this Debenture, represents that this Debenture and any Shares issuable upon conversion of this Debenture are being and will be acquired for the Holder's own account for investment and not with a view to, or for resale in connection with, the distribution thereof in violation of applicable securities laws, and that the Holder has no present intention of distributing or reselling this Debenture or any such Shares. The Holder, by acceptance of this Debenture, further represents that it has not offered or sold this Debenture, or any Shares into which this Debenture is convertible, directly or indirectly to any other person, and that the Holder is not acquiring this Debenture or any such Common Stock for the account of any other person. Certificates evidencing Shares issuable upon conversion of this Debenture shall bear the following legend: "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF IN VIOLATION OF APPLICABLE SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT. (b) No Holder of this Debenture may assign, transfer, hypothecate or sell all or any part of this Debenture (or any of the Shares issuable upon conversion of this Debenture) or in any way alienate or encumber the Debenture (or any of the Shares issuable upon conversion of this Debenture) without the express written consent of the Company, the granting or denial of which shall be within the absolute discretion of the Company. Any attempt to effect such transfer without the consent of the Company shall be null and void. The Company has not registered this Debenture (or any of the Shares issuable upon conversion of this Debenture) under the Act or the applicable securities laws of any state in reliance on exemptions from registration. Such exemptions depend upon the investment intent of the Holder at the time he acquires his Debenture or such Shares. Each Holder has acquired his Debenture (and will acquire the Shares issuable upon conversion of this Debenture) for his own account for investment purposes only and not with a view toward distribution or resale of such Debenture or such shares within the meaning of the Act and the applicable securities laws of any state. The Company shall be under no duty to register the Debenture (or any of the Shares issuable upon conversion of this Debenture) or to comply with an exemption in connection with the sale, transfer or other disposition under the applicable laws and regulations of the Act or the applicable securities laws of any state. The Company may require the Holder to provide, at his expense, an opinion of counsel satisfactory to the Company to the effect that any proposed transfer or other assignment of the Debenture (or any of the Shares issuable upon conversion of this Debenture) will not result in a violation of the applicable federal or state -8- securities laws or any other applicable federal or state laws or regulations. 9.2 All expenses, including reasonable legal fees incurred by the Company in connection with any permitted transfer, assignment or pledge of this Debenture will be paid by the Holder requesting such transfer, assignment or pledge. 9.3 Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Debenture and, in the case of any such loss, theft or destruction of any Debenture, upon delivery of an indemnity bond in such reasonable amount as the Company may determine (or, in the case of any Debenture held by the original Debenture holder, of an indemnity agreement reasonably satisfactory to the Company), or, in the case of any such mutilation, upon the surrender of such Debenture to the Company at its principal office for cancellation, the Company at its expense will execute and deliver, in lieu thereof, a new Debenture of like tenor, dated the date to which interest hereunder shall have been paid on such lost, stolen, destroyed or mutilated Debenture. 9.4 Subject to Subsections 9.1 and 9.2 above and 9.5 below, the Holder may, at his option, either in person or by duly authorized attorney, surrender this Debenture for registration of transfer at the principal office of the Company and, upon payment of any expenses associated with the transfer, receive in exchange therefor the Debenture, dated as of the date to which interest has been paid on the Debenture so surrendered, each in the principal amount of $10,000 or any multiple thereof, for the same aggregate unpaid principal amount as the Debenture so surrendered and registered as payable to such person or persons as may be designated by the Holder. Every Debenture surrendered for registration of transfer shall be duly endorsed or shall be accompanied by a written instrument of transfer duly executed by the Holder or his attorney duly authorized in writing. Every Debenture, so made and delivered by the Company in exchange for any Debenture surrendered, shall in all other respects be in the same form and have the same terms as the Debenture surrendered. No transfer of any Debenture shall be valid unless made in such manner at the principal office of the Company. 9.5 The Company may treat the person in whose name this Debenture is registered as the owner and Holder of this Debenture for the purpose of receiving payment of all principal of and all Interest on this Debenture, and for all other purposes whatsoever, whether or not such Debenture shall be overdue and, except for transfers effected in accordance with this subsection, the Company shall not be affected by notice to the contrary. 10. MODIFICATIONS AND AMENDMENTS. Modifications and amendments to the Debenture may be made by the Company only with the consent of the Holder. 11. NOTICES. All notices provided for herein shall be validly given if in writing and delivered personally or sent by certified mail, postage prepaid, (in the case of the Company) to the office of the Company or such other address as the Company may from time to time designate in writing sent by certified mail, postage prepaid, or (in the case of the Holder) to the Holder at his address set forth above or such other address as the Holder may from time to time designate in writing to the Company by certified mail, postage prepaid. -9- 12. USURY. All Interest, fees, charges, goods, things in action or any other sums or things of value, or other contractual obligations (collectively, the "Additional Sums") paid by the Company hereunder, whether pursuant to this Debenture or otherwise, with respect to the Indebtedness evidenced hereby, or any other document or instrument in any way pertaining to the Indebtedness, which, under the laws of the State of Texas may be deemed to be Interest with respect to such loan or Indebtedness, shall, for the purpose of any laws of the State of Texas, which may limit the maximum amount of Interest to be charged with respect to such loan or Indebtedness, be payable by the Company as, and shall be deemed to be, Interest and for such purposes only, the agreed upon and contracted rate of Interest shall be deemed to be increased by the Additional Sums. Notwithstanding any provision of this Debenture to the contrary, the total liability for payments in the nature of Interest under this Debenture shall not exceed the limits imposed by applicable law. The Company shall not assert a claim, and shall actively resist any attempts to compel it to assert a claim, respecting a benefit under any present or future usury laws against any Holder of this Debenture. 13. BINDING EFFECT. This Debenture shall be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and permitted assigns. 14. COLLECTION FEES. Except as otherwise provided herein, the Company shall pay all costs of collection, including reasonable attorneys' fees and all costs of suit and preparation for such suit (and whether at trial or appellate level), in the event the unpaid principal amount of this Debenture, or any payment of Interest is not paid when due, or in the event Holder is made party to any litigation because of the existence of the Indebtedness evidenced by this Debenture, or if at any time Holder should incur any attorneys' fees in any proceeding under the Federal Bankruptcy Code (or other similar laws for the protection of debtors generally) in order to collect any Indebtedness hereunder or to preserve, protect or realize upon any security for, or guarantee or surety of, such Indebtedness whether suit be brought or not, and whether through courts of original jurisdiction, as well as in courts of appellate jurisdiction, or through a bankruptcy court or other legal proceedings. 15. CONSTRUCTION. THIS DEBENTURE SHALL BE GOVERNED AS TO ITS VALIDITY, INTERPRETATION, CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS BY AND IN ACCORDANCE WITH THE LAWS AND INTERPRETATIONS THEREOF OF THE STATE OF TEXAS. UNLESS THE CONTEXT OTHERWISE REQUIRES, THE USE OF TERMS IN SINGULAR AND MASCULINE FORM SHALL INCLUDE IN ALL INSTANCES SINGULAR AND PLURAL NUMBER AND MASCULINE, FEMININE AND NEUTER GENDER. 16. SEVERABILITY. In the event any one or more of the provisions contained in this Debenture or any future amendment hereto shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Debenture or such other agreement, and in lieu of each such invalid, illegal or unenforceable provision there shall be added automatically as a part of this Debenture a provision as similar in terms to such invalid, illegal or unenforceable provision as may be possible and be valid, legal and enforceable. -10- 17. DEFINITIONS. 17.1 "Holder" means a Person in whose name a Debenture is registered on the Company's books. 17.2 "Indebtedness" means, without duplication, with respect to any Person, (a) all obligations of such Person (i) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), (ii) evidenced by bonds, notes, debentures or similar instruments, (iii) representing the balance deferred and unpaid of the purchase price of any property or services (other than accounts payable or other obligations arising in the ordinary course of business), (iv) evidenced by bankers' acceptances or similar instruments issued or accepted by banks, (v) for the payment of money relating to a capitalized lease obligation under generally accepted accounting principles as in effect in the United States of America as of the Issue Date, or (vi) evidenced by a letter of credit or a reimbursement obligation of such Person with respect to any letter of credit; (b) all net obligations of such Person under interest rate swap obligations and foreign currency hedges; (c) all liabilities of others of the kind described in the preceding clauses (a) or (b) that such Person has guaranteed or that are otherwise its legal liability; (d) Indebtedness (as otherwise defined in this definition) of another Person secured by lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, the amount of such obligations being deemed to be the lesser of (1) the full amount of such obligations so secured, and (2) the fair market value of such asset, as determined in good faith by the Board of Directors of such Person, which determination shall be evidenced by a board resolution; and (e) any and all deferrals, renewals, extensions, refinancings and refundings (whether direct or indirect) of, or amendments, modifications or supplements to, any liability of the kind described in any of the preceding clauses (a), (b), (c), (d) or this clause (e), whether or not between or among the same parties. 17.3 "Issue Date" means the date on which the Debenture is first issued. 17.4 A "Subsidiary" means (i) a corporation a majority of whose voting stock is at the time, directly or indirectly, owned by the Company, by one or more subsidiaries of the Company or by the Company and one or more subsidiaries of the Company, (ii) a partnership in which the Company or a subsidiary of the Company is, at the date of determination, a general or limited partner of such partnership, but only if the Company or its subsidiary is entitled to receive more than fifty percent (50%) of the assets of such partnership upon its dissolution, or (iii) any other Person (other than a corporation or partnership) in which the Company, directly or indirectly, at the date of determination thereof, has (x) at least a majority ownership interest or (y) the power to elect or direct the election of a majority of directors or other governing body of the Company. 18. MISCELLANEOUS. Except as otherwise provided herein, the Company waives demand, diligence, presentment for payment and protest, notice of extension, dishonor, maturity and protest. Time is of the essence with respect to the performance of each and every covenant, condition, term and provision hereof. -11- IN WITNESS WHEREOF, this Debenture has been issued on the 15th day of February, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg ------------------------------------ Manfred Sternberg Chief Executive Officer -12- BLUEGATE CORPORATION 10% CONVERTIBLE DEBENTURE DUE NOVEMBER 1, 2005 NOTICE OF CONVERSION AND SUBSCRIPTION (To be completed and signed only upon a conversion of the Debenture into Common Stock in whole or in part) TO: BLUEGATE CORPORATION The undersigned, the Holder of the attached 10% Convertible Debenture Due November 1, 2005 ("Debenture"), hereby irrevocably elects to exercise the right to convert part or all of the outstanding principal balance and accrued Interest on the Debenture into shares ("Shares") of the Company's common stock, par value $.001 per share, and thereby purchase ______ Shares. The undersigned makes payment of $ for the Shares by converting and canceling the ----------------- indebtedness represented by the Debenture. The undersigned hereby requests that the Certificate(s) for such securities be issued in the name(s) and delivered to the address(es) as follows: Name: Address: Deliver to: Address: If the foregoing Notice of Conversion and Subscription evidences the conversion of less than the entire principal amount of the Debenture and accrued Interest thereon, please issue a new Debenture, of like tenor, for the remaining principal amount of the Debenture in the name(s), and deliver the same to the address(es), as follows: Name: Address: DATED: _________________ _____, 2005. - -------------------------------------------------------------------------------- (Name of Holder) - -------------------------------------------------------------------------------- (Signature of Holder or Authorized Signatory) - -------------------------------------------------------------------------------- (Social Security or Taxpayer Identification Number of Holder) EX-10.14 15 ex10_14.txt EXHIBIT 10.14 EXHIBIT 10.14 THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE WARRANTS AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED ON THE EXERCISE HEREOF ARE BEING OFFERED AND SOLD FOR INVESTMENT. EXCEPT AS PROVIDED IN SECTION 7(B) HEREOF, THESE WARRANTS MAY NOT BE TRANSFERRED. THE SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT. W-05-01 BLUEGATE CORPORATION WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK OF BLUEGATE CORPORATION (A NEVADA CORPORATION) VOID AFTER 5:00 P.M., CENTRAL STANDARD TIME, ON FEBRUARY 15, 2008 Bluegate Corporation, a Nevada corporation (the "Company") hereby certifies that Platinum Partners Global Macro Fund, LP, (together with his permitted assigns, the "Registered Holder"), is the holder of 100,000 of the Company's Warrants (singly, a "Warrant," and collectively, the "Warrants") thus entitling him, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after February 15, 2005 and on or before February 15, 2008 at not later than 5:00 p.m. (Central Standard Time), one share of Common Stock of the Company ("Common Stock") for each Warrant at a purchase price of $1.00 per share. The number of shares purchasable upon exercise of a Warrant, and the purchase price per share, each as adjusted from time to time pursuant to the provisions of this Warrant Certificate, are hereinafter referred to as the "Warrant Stock" and the "Purchase Price", respectively. 1. Period of Exercise. (a) This Warrant Certificate may be exercised by the Registered Holder, in whole or in part, by surrendering this Warrant Certificate, with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder, at the principal office of the Company, or at such other office or agency as the Company may designate, accompanied by payment in full, by bank or certified check in lawful money of the United States, of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. (b) Each exercise of a Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant Certificate shall have been surrendered to the Company as provided in subsection 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in subsection 1(c) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates. (c) As soon as practicable after the exercise of a Warrant, and in any event within ten (10) days thereafter, the Company at its expense shall cause to be issued in the name of, and delivered to, the Registered Holder, or, subject to the terms and conditions hereof, as the Registered Holder (upon payment by the Registered Holder of any applicable transfer taxes) may direct: (i) a certificate or certificates for the number of full shares of Warrant Stock to which such Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof, and (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant Certificate minus the number of such shares purchased by the Registered Holder upon such exercise as provided in subsection 1(a) above. 2. Adjustments. (a) If the outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding shares of Common Stock shall be combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Purchase Price, the number of shares of Warrant Stock purchasable upon the exercise of a Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (ii) the Purchase Price in effect immediately after such adjustment. (b) If there shall occur any capital reorganization or reclassification of the Company's Common Stock (other than a change in par value or a subdivision or combination as provided for in subsection 2(a) above), or any consolidation or merger of the Company with or into another corporation, or a transfer of all or substantially all of the assets of the Company, or the payment of a liquidating distribution then, as part of any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, lawful provision shall be made so that the Registered Holder of this Warrant Certificate shall have the right thereafter to receive upon the exercise hereof (to the extent, if any, still exercisable) the kind and amount of shares of stock or other securities or 2 property which such Registered Holder would have been entitled to receive if, immediately prior to any such reorganization, reclassification, consolidation, merger, sale or liquidating distribution, as the case may be, such Registered Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of a Warrant. In any such case, appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Registered Holder of this Warrant Certificate such that the provisions set forth in this Section 2 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter deliverable upon the exercise of a Warrant. (c) In any case in which this Section 2 shall require that any adjustment in the number of shares of Warrant Stock or other property for which a Warrant may be exercised be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event issuing to the Registered Holder the amount of Warrant Stock and other property, if any, issuable upon exercise of a Warrant after such record date that is over and above the Warrant Stock and other property, if any, issuable upon exercise of a Warrant as in effect prior to such adjustment; provided that upon request the Company shall deliver to the Registered Holder a due bill or other appropriate instrument evidencing the Registered Holder's right to receive such additional shares or property upon the occurrence of the event requiring such adjustment. (d) When any adjustment is required to be made in the Purchase Price, the Company shall promptly mail to the Registered Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Such certificate shall also set forth the kind and amount of stock or other securities or property for which a Warrant shall be exercisable following the occurrence of any of the events specified in subsection 2(a) or 2(b) above. 3. Fractional Shares. The Company shall not be required upon the exercise of a Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the mean between the low bid and high asked prices of the Warrant Stock on the OTC Bulletin Board, or the mean between the low bid and high asked prices of the Warrant Stock on the over-the-counter market as reported by the National Association of Securities Dealers Automated Quotations ("NASDAQ") System or the closing market price of the Warrant Stock on a national securities exchange on the trading day immediately prior to the date of exercise, whichever is applicable, or if none is applicable, then on the basis of the then market value of the Warrant Stock as shall be reasonably determined by the Board of Directors of the Company. 4. Limitation on Sales. (a) The Registered Holder, and each subsequent holder of this Warrant Certificate, if any, acknowledges that the Warrants and the Warrant Stock have not been registered under the Securities Act of 1933, as now in force or hereafter amended, or any successor legislation (the 3 "Act"), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of any of the Warrants or the Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to a Warrant or such Warrant Stock and registration or qualification of a Warrant or such Warrant Stock under any applicable blue sky or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Without limiting the generality of the foregoing, unless the offering and sale of the Warrant Stock to be issued upon the particular exercise of a Warrant shall have been effectively registered under the Act, the Company shall be under no obligation to issue the shares or warrants covered by such exercise unless and until the Registered Holder shall have executed an investment letter in form and substance satisfactory to the Company, including a warranty at the time of such exercise that he is acquiring such shares or warrants for his own account, for investment and not with a view to, or for sale in connection with, the distribution of any such shares or warrants, in which event the Registered Holder shall be bound by the provisions of a legend to such effect on the certificate(s) representing the Warrant Stock. In addition, without limiting the generality of the foregoing, the Company may delay issuance of the Warrant Stock until completion of any action or obtaining of any consent, which the Company believes necessary or advisable under any applicable law (including without limitation state securities or "blue sky" laws). (b) The Registered Holder agrees, and each other holder of Warrant Stock agrees, if requested by the Company and/or the representative of the underwriters underwriting an offering of Common Stock (or other securities of the Company) from time to time, not to sell or otherwise transfer or dispose of any Warrant Stock then held by the Registered Holder and/or such other holder during such period of time following the effective date of any registration statement of the Company filed under the Act for the period of time with respect to which a majority of the executive officers of the Company agree not to sell shares of Common Stock (or other securities of the Company). Such agreement shall be in writing in a form satisfactory to the Company and such representative. The Company may impose stop-transfer instructions with respect to the Warrant Stock subject to the foregoing restriction until the end of such period. 5. Reservation of Stock. The Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of a Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of a Warrant. 6. Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant Certificate, the Company shall issue, in lieu thereof, a new Warrant Certificate of like tenor. 7. Transfers. etc. 4 Subject to Section 4 above: (a) The Company shall maintain a register containing the names and addresses of the Registered Holders of this Warrant Certificate. The Registered Holder may change his address as shown on the warrant register by written notice to the Company requesting such change. (b) This Warrant Certificate shall not be transferable by the Registered Holder and shall be exercisable only by the Registered Holder; provided that this Warrant Certificate may be transferred to, and may be exercisable by, provided that this Warrant may be transferred to, and may be exercisable by, the Registered Holder's spouse, the Registered Holder's naturally born or legally adopted heirs or their issue, or a trust for the benefit of any of the foregoing persons, or to and by any family planning entity herebefore or hereafter established by the Registered Holder or any company or entity that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with, the Registered Holder. Subject to the foregoing, this Warrant Certificate shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process without the prior written consent of the Company. Any attempted transfer, assignment, pledge, hypothecation or other disposition of this Warrant Certificate or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon this Warrant Certificate or such rights, shall be null and void. (c) Until any transfer of this Warrant Certificate is made in the warrant register, the Company may treat the Registered Holder of this Warrant Certificate as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant Certificate is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 8. Mailing of Notices, etc. All notices and other communications from the Company to the Registered Holder of this Warrant shall be mailed by first-class certified or registered mail, postage prepaid, to the address furnished to the Company in writing by the last Registered Holder of this Warrant Certificate who shall have furnished an address to the Company in writing. All notices and other communications from the Registered Holder of this Warrant Certificate or in connection herewith to the Company shall be mailed by first-class certified or registered mail, postage prepaid, to the Company at its offices at 701 N. Post Oak Blvd., Suite 630, Houston, Texas 77024, or such other address as the Company shall so notify the Registered Holder. 9. No Rights as Stockholder. Until the exercise of a Warrant, the Registered Holder of this Warrant Certificate shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 10. Change or Waiver. 5 Any term of this Warrant Certificate may be changed or waived only by an instrument in writing signed by the party against which enforcement of the change or waiver is sought. 11. Headings. The headings in this Warrant Certificate are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant Certificate. 12. Governing Law. THIS WARRANT CERTIFICATE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of the 15th day of February, 2005. BLUEGATE CORPORATION By: /s/ Manfred Sternberg --------------------------------- Manfred Sternberg, Chief Executive Officer 6 EXHIBIT A PURCHASE FORM Bluegate Corporation 701 N. Post Oak Blvd., Suite 630 Houston, Texas 77024 Gentlemen: The undersigned pursuant to the provisions set forth in the attached Warrant Certificate hereby irrevocably elects to purchase _________ shares of the Common Stock (the "Common Stock") covered by such Warrant Certificate and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant Certificate. The undersigned understands and acknowledges the terms and restrictions on the right to transfer or dispose of the Common Stock set forth in Section 4 of the attached Warrant Certificate, which the undersigned has carefully reviewed. The undersigned consents to the placing of a legend on his certificate for the Common Stock referring to such restrictions and the placing of stop transfer orders until the Common Stock may be transferred in accordance with the terms of such restrictions. By:__________________________________ Name:________________________________ Title:_______________________________ Dated:_______________________________ EX-10.15 16 ex10_15.txt EXHIBIT 10.15 CONTRACT FOR CORPORATE ADVISORY SERVICES ---------------------------------------- The parties to this Contract for Corporate Advisory Services are Diablo Consultants, Inc., a California Corporation, with a business address of 2815 Mitchell Drive, Ste. 212, Walnut Creek, CA 94598, hereafter referred to as "Diablo" and Bluegate Corporation, with a business address of 701 North Post Oak Road, Suite 630, Houston, TX 77024, hereafter referred to as "Client." RECITALS -------- WHEREAS, Client is a publicly traded corporation on a national stock exchange including the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Exchange and/or the Over the Counter Bulletin Board Stock Exchange, and is a fully reporting company under the Securities and Exchange Act of 1933; WHEREAS, Client is in full legal compliance with its filing requirements under the Securities and Exchange Act; WHEREAS, Client desires to retain Diablo to review and analyze Client's public relations and investor relations programs and activities. WHEREAS, Diablo is a California Corporation duly organized and operating under the laws of the State of California; WHEREAS, Diablo engages as its principal business advising public companies regarding public and investor relations concerning various clients' business and public disclosures; WHEREAS, both Client and Diablo are amenable to entering into a contract whereby Client retains Diablo to advise Client on matters of public and investor relations concerning the Company's business and public disclosures; WHEREFORE, THE PARTIES AGREE AS FOLLOWS: 1 ENGAGEMENT ---------- Diablo will provide non-exclusive advisory services to the Client in the areas of public relations and investor relations. Diablo will provide Client with support for communicating with its investor base. These services include, but are not limited to: a. Perform mailings on an as needed basis from Client to its investor base with Client approved and created content; this includes the process of gathering, managing and executing Client's investor relation's mailings; b. Respond to all Email questions and send hard copy files of all questions and responses quarterly. c. Perform phone call contacts with Client's investor base on an as needed basis with information and content created by Client; and, respond to all incoming calls from shareholders or prospective investors, as well as build and maintain call-inquiries database. d. Attend and moderate all Due Diligence meetings which either Client or Diablo deem appropriate. e. Monitor various Internet threads and respond to inquiries about Client and its affiliates, subsidiaries and other holdings. f. Build a database of all contacts interested in insert company name. g. Consult with Client in any matters that fall within the scope of this agreement. h. Will include a one-page company profile to be to be updated monthly included on Client's web pages. i. Prepare reports on shareholder sentiment. j . Organize, moderate and attend occasional conference calls providing client and investors if necessary k. Contact 200 brokers per month to discuss Client's company and business plans. 2 ENGAGEMENT TERMS ---------------- TERM ---- 1. The period of Diablo's engagement (the "Engagement Period") will expire upon the earlier to occur of (i) twelve (12) months from the date Diablo receives an executed copy of the Agreement from the Client or (ii) by operation of this Agreement. COMPENSATION ------------ 2. In consideration for the services to be provided by Diablo to Client, Client agrees to pay Diablo 430,000 [four hundred and thirty thousand] non-refundable shares of restricted common stock in Client, valued for tax purposes at par value, with a one-year safe harbor holding period as prescribed by Rule l44(d) of Code of Federal Regulations Title 17, Section 230.144. The subject shares are considered a non-refundable retainer for services to be rendered by Diablo to Client, and Diablo and Client agree that the date of the execution of this Agreement shall serve as the date establishing Diablo's beneficial ownership of the shares. Client also agrees that the shares paid as compensation hereunder shall be non-cancelable and shall have full piggyback registration rights on any future registration statement filed by Client. Client and Consultant agree that an independent escrow agent, Mailander Law Office, APC, shall distribute the compensation shares noted above in Section 2 by distributing to Consultant 33,000 shares on a monthly basis. Regarding the distribution of compensation shares, Client and Consultant agree that three monthly tranches, or 99,000 shares, shall be distributed immediately upon the execution hereof, making the first regular conveyance of stock agreed to be due upon June 10, 2005, and every 30 days thereafter until all of the shares have been transferred, with the last payment of all shares due upon completion of the 12 month term of this Agreement, or by March 10, 2006. As additional undertaking the convey to further agreed to herein, Client agrees to convey to Diablo 125,000 non-cancelable warrants with a 3 strike price of $1.00 per share. Diablo shall have a period of 3 years from the effective date hereof to execute option to purchase shares of common stock based on such warrants, with the understanding that all Diablo need do to formally exercise the warrant, or any portion thereof, is to contact in writing Client at the address provided for herein, notifying Client of Diablo's intent to exercise. Diablo and Client agree to use their best efforts to arrange for the stock purchase in good faith and in a timely fashion. Finder's Fee; Should Diablo locate and provide to Client sources of ------------ funding that Client utilizes, Client agrees to pay to Diablo a 5% finder's fee - calculated upon the total gross amount of funding secured by Client through Diablo's sources, payable upon closure of the funding agreement. 3. Terms of Payment: All compensation shall be paid by Client within 72 hours of the signing of this contract. No work shall begin until payment is received. 4. Expenses. Client shall be responsible for any and all costs related to the services to be performed by Diablo under this Agreement. These costs include, but are not limited, to postage and copying. Diablo will be responsible for the mailing of up to 400 shareholders/ Investors and introductory letter and company profile. Diablo will invoice Client for all cost associated with the performance of this project. Client will approve all expenses over $100.00 in writing. 5. Independent Diablo Status. Diablo is an independent contractor. Neither Diablo nor Diablo's employees (if any) or contract personnel are, or shall be deemed, Client's employees. In its capacity as an independent Diablo, Diablo agrees and represents, and Client agrees as follows: Diablo reserves the right to perform services for others during the term of this Agreement; however, Diablo will not perform services for any competitors of Client's during the term of this agreement. Diablo has the sole right to control and direct the means, manner and method by which it performs the services to be rendered pursuant to this Agreement. Diablo has the right to perform the services required under this 4 Agreement at any place or location or at any time it determines is appropriate. Diablo has the power to hire assistants, subcontractors, or to use employees or contract personnel to provide the services agreed to herein. The services to be provided by Diablo to Client are to be performed solely by Diablo, or any assistants, subcontractors, employees or contract personnel whom Diablo deems are necessary to perform said services. Client shall not hire, supervise or control any assistants to help Diablo, and neither shall Client provide any training to said personnel. Client shall not require that Diablo, or any of Diablo's employees, assistants, contract personnel or subcontractors devote full time to the services to be performed herein. 6. Permits and Leases. Diablo has complied with all federal, state and local laws requiring business permits, certificates, and licenses required to carry out the services to be performed under this Agreement. 7. State and Federal Taxes. Client will not withhold FICA from Diablo's payments or make FICA payments on Diablo's behalf; Client will not make state of federal unemployment compensation contributions on Diablo's behalf; or, withhold state or federal income taxes from Diablo's payments. 8. Fringe Benefits. Diablo understands that neither Diablo nor Diablo's employees or contract personnel are eligible to participate in any employee pension, health, vacation pay, sick pay, or other fringe benefit plan of Client. 9. Worker's Compensation. Client shall not obtain worker's compensation insurance on behalf of Diablo or any of Diablo's employees, or contract personnel. If Diablo does have to hire employees or contract personnel in order to perform the services contemplated under this Agreement, then Diablo will bear all responsibility for acquiring worker's compensation insurance and agrees to hold Client harmless from any claim for worker's compensation benefits filed by one of Diablo's employees, subcontractors or contract personnel in performing the services rendered under this Agreement. Diablo also agrees to hold Client harmless from all costs and attorney's fees in the event that any claim 5 contemplated under this section by one of Diablo's employees or contract personnel is filed. 10. Unemployment Compensation. Client shall make no state or federal unemployment compensation payments on behalf of Diablo or any of Diablo's subcontractors, employees, or contract personnel. Diablo will not be entitled to these benefits in connection with work performed under this Agreement. 11. Insurance. Client shall not provide insurance coverage of any kind for Diablo or Diablo's employees or contract personnel. Further, Diablo shall hold Client harmless from any loss or liability arising from performing services under this Agreement. 12. Term of Agreement. This Agreement will become effective when signed by both parties and will terminate 12 months from the signing of this agreement. 13. Termination of the Agreement. With reasonable cause, either Client or Diablo may terminate this Agreement, effective immediately upon giving written notice to the party at the address noted in this Agreement, upon certified mail, return receipt requested. "Reasonable Cause" is limited to a material breach of this Agreement including, but not limited to, Client's failure to pay Diablo, or Diablo's failure to perform the agreed to services herein. 14. Entire Agreement. This Agreement is the entire agreement of the parties, and all other oral or written understandings, agreements, and promises are merged into this document. No amendment or modification of this Agreement is valid unless it is signed by both Client and Diablo. 15. Intellectual Property Ownership. Diablo assigns to Client all patent, copyright, trademark and trade secret rights in anything created or developed by Diablo under this Agreement. Diablo agrees to help Client secure any formal intellectual property rights in said interests by completing any and all paperwork necessary. However, Client agrees to pay all of Diablo's 6 costs in this regard, including attorney's fees relevant to this assignment. 16. Confidentiality. Diablo will not disclose or use, either during or after the term of this Agreement, any proprietary or confidential information of Client without Client's prior written consent except to the extent necessary to perform services on Client's behalf. Proprietary or confidential information includes: Written, printed, graphic or electronically recorded materials furnished by Client for Diablo to use; Business plans, customer lists, operating procedures, financial statements, trade secrets, design formulas, accounting information, know-how, computer programs and/or inventories and improvements of any kind; and, Information belonging to any of Client's customers and suppliers about whom Diablo gained knowledge as a result of Diablo's services to Client. 17. Resolving Disputes. Should any dispute between the parties arise over the services rendered under this Agreement, its interpretation, or any other respect of the relationship between Diablo and Client, the parties agree to submit the matter to binding arbitration and to the jurisdiction and venue of the San Diego County Superior Court, pursuant to the arbitration procedures outlined in the California Code of Civil Procedure. Costs shall be borne equally by the parties. Judgment by the arbitrator may be entered in any court of competent jurisdiction. Costs and fees may be awarded to the prevailing party. 18. Applicable Law. The terms of this Agreement will be governed by an interpreted in accordance with the internal laws of the State of California, without regard to the principals of conflict of laws. 19. Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be considered given either when delivered personally or 5 days after deposit into the U.S. Mail with full postage pre-paid thereon, certified mail, return receipt requested. 20. No Partnership. 7 This Agreement does not create partnership relationship. Diablo does not have the authority to enter into contracts on Client's behalf. 21. Assignment and Delegation. Diablo may not assign any obligations under this Agreement without Client's prior written approval, excluding therefrom Diablo hiring any subcontractors or employees as provided for hereunder. This Agreement is binding on all successors and assigns of the respective parties. 22. Authority to Bind Principals. Both Client and Diablo represent that of the signatories hereto have complete authority to bind their principal corporations or other business entities to the terms of this Agreement, and that all necessary corporate action has been taken by both Client and Diablo to validly enter into this Agreement. Dated: DIABLO CONSULTANTS, INC. 3/1/05 By: Jeremy Roe -------------------- JEREMY ROE ITS: PRESIDENT Dated: BLUEGATE CORPORATION 3/1/05 By: /s/ Greg J. Micek -------------------- Its: CFO ------------------- 8 EX-10.16 17 ex10_16.txt EXHIBIT 10.16 ESCROW AGREEMENT ---------------- This escrow agreement is entered into by and between Diablo Consultants, Inc., a California corporation, with a business address of 2815 Mitchell Drive, Ste. 212, Walnut Creek, CA 94598, hereafter referred to as "Diablo"; Bluegate Corporation, with a business address of 701 N. Post Oak Road, Ste. 630 , Houston, Texas 77204, hereafter referred to as "Bluegate," and Mailander Law Office, APC, with a business address of 121 Broadway, Suite 552, San Diego, CA 92101, hereafter referred to as "Mailander." RECITALS -------- Diablo and Bluegate entered into a corporate advisory services contract on March 10, 2005. A copy of this Contract is attached hereto as Exhibit A to this Escrow Agreement, and is incorporated fully herein by reference as though fully set out. Section 2 of the Diablo/Bluegate contract provides that Bluegate will be retaining Diablo for services rendered under the advisory contract by paying Diablo 430,000 shares of restricted Bluegate common stock. Bluegate and Diablo agreed that the stock consideration would be paid on a monthly basis in 33,000 share tranches, with the express agreement that three of the monthly payments equaling 99,000 would be made immediately upon the execution of the advisory services agreement, with the remaining monthly payments to begin on June 10, 2005, and continuing monthly until all of the shares are distributed, with any remaining shares to be distributed by March 10, 2006, at the close of the one year term of the advisory contract. Both Diablo and Bluegate desire to retain Mailander Law Office, APC, to act as an escrow agent to distribute the common shares of stock consideration as provided for in the advisory services contract. Both Diablo and Bluegate have signed a conflicts waiver to effectuate the handling of the escrow by Mailander. Attached hereto is a fully executed copy of the conflicts waiver. A copy of this waiver is attached hereto as Exhibit B to this Escrow Agreement, and is incorporated fully herein by reference as though fully set out. Mailander is amenable to providing the escrow services provided for herein. WHEREFORE, THE PARTIES AGREE AS FOLLOWS: Section 1. DEPOSIT OF SHARES. Bluegate agrees to deposit all shares subject to this agreement with Mailander upon execution hereof, but in no instance later than 72 hours from the date of execution of this Agreement. Section 1.01. ACCOUNTING. Mailander will account for all shares under its control and custody and mail to Bluegate and Diablo periodic accountings showing the number of shares on account and the number of shares disbursed pursuant to the advisory services contract between Diablo and Bluegate. Section 2. ESCROW ACTION UPON DISPUTE. Should any dispute arise between Diablo and Bluegate concerning the advisory services contract set out in Exhibit B, the parties direct Mailander to maintain the escrow account without making disbursements until either authorized to do so by a arbitrator under the advisory services agreement, Section 17, or by a written direction of the parties signed by Diablo and Bluegate by their respective agents. Section 3. HOLD HARMLESS. Both Diablo and Bluegate agree to Mailander harmless from any and all liability regarding services provided by this escrow agreement, including attorney fees and costs arising therefrom. Any disputes related to this escrow agreement shall be handled by binding arbitration in San Diego County, State of California. Costs shall be borne equally and the prevailing party may be entitled to recover attorney fees costs. Section 4. FEE FOR ESCROW. Bluegate agrees to pay to Mailander $500 execution hereof as a fee for handling this escrow. IT IS SO AGREED. Dated: MAILANDER LAW OFFICE, APC By: --------------------------- Tad Mailander, President BLUEGATE CORPORATION By: /s/ Greg J. Micek --------------------------- Greg J. Micek --------------------------- [printed name] Its: C.F.O. --------------------------- DIABLO CONSULTANTS, INC. By: /s/ Jeremy Roe --------------------------- Jeremy Roe, President -----END PRIVACY-ENHANCED MESSAGE-----