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Exhibit 10.1 Employment Agreement of Charles Leibold
 
 
EMPLOYMENT AGREEMENT
BETWEEN BLUEGATE CORPORATION AND
CHARLES E. LEIBOLD
 
This Employment agreement (the "Agreement") is made effective as of the 1st day
of June 2006, by and between Bluegate Corporation, a Nevada corporation
("Bluegate"), and Charles E. Leibold (the "Executive").
 
WHEREAS, The Executive is willing to be employed by Bluegate from and after the
effective date on the basis and terms and conditions set forth in this
Agreement.
 
THEREFORE, upon the mutual promises and covenants of the parties, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties agree as follows:
 
1.
Employment.

 
Bluegate hereby employs the Executive, and the Executive hereby accepts such
employment, for the period stated in section (3) below and upon the other terms
and conditions herein provided.
 
2.
Position and Duties.

 
During the Employment Period the Executive agrees to serve as Chief Financial
Officer ("CFO") of Bluegate. In his capacity of CFO, the Executive will perform
such duties and responsibilities for Bluegate as may from time to time be
assigned to him by the Board of Directors of Bluegate.
 
3.
Term.

 
By this Agreement, Bluegate employs the Executive, and the Executive accepts
employment with Bluegate, for a period consisting of two (2) years, commencing
on the date of this Agreement and will cover the period from June 1, 2006
through May 31, 2008.
 
4.
Compensation.

 
In consideration of such service, Bluegate agrees to pay the Executive as
compensation an annual salary of $140,000.00, in accordance with Bluegate's
regular payroll practices in effect from time to time. Effective on January 1,
2007, the annual salary will increase by 5.0%, to $147,000.00.
 
Stock Options. In addition to the compensation set forth above, the Executive
shall be entitled to receive options to purchase 600,000 shares of Bluegate
shares of common stock, par value $.001 per share, ("Option Shares"), at the
per-share option price of $0.75 pursuant to a Stock Option Agreement being
entered into in connection herewith. This option shall become vested and
exercisable with respect to 50,000 Option Shares on June 1, 2006 (upon the
execution and delivery of the related Stock Option Agreement), and this option
shall become vested and exercisable with respect to 25,000 Option Shares every
30 days thereafter until this option becomes fully vested.
 
The Option Shares to be issued pursuant to this Agreement shall be restricted
securities with piggy back registration rights, and shall terminate and become
null and void after the expiration of five (5) years from the date of grant.
 
Bonus. In addition to the compensation set forth above, Executive and Bluegate
agree to enter into good faith negotiations with a view to reaching an agreement
on the payment of one or more bonuses (the "Bonuses") in such amounts as are
mutually agreed upon by Executive and Bluegate, if major transactions (such as
acquisitions and financings) agreed mutually upon by them shall be achieved. 
The Bonuses shall be payable at such time as is mutually agreed upon by
Executive and Bluegate. The Executive and Bluegate agree that they intend for
these good faith negotiations (i.e., to mutually define the bonus-triggering
transactions, milestones, and/or achievements, as well as the associated pay-out
metrics) to be completed by no later than 30 days from start date.
 
Deferred Signing Bonus. In addition to the compensation set forth above, a
deferred signing bonus of $20,000.00 will be paid to Executive and included in
his bi-monthly payroll as follows: $5,000.00 on the last day of September,
October, November and December 2006. This bonus can be converted to Bluegate
shares at the rate of $0.75 per share at the sole option of Executive.
 

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5.
(Intentionally Left Blank)

 
6.
Confidentiality. 

In the course of the performance of Executive's duties hereunder, Executive
recognizes and acknowledges that Executive may have access to certain
confidential and proprietary information of Company or any of its affiliates. 
Without  the prior written consent of Company, Executive shall not  disclose 
any such confidential or proprietary information to any person or firm, 
corporation,  association,  or  other  entity  for  any reason or purpose
whatsoever,  and  shall  not  use  such information, directly or indirectly, for
Executive's  own  behalf  or on behalf of any other party.  Executive agrees and
affirms that  all  such information is the sole property of Company and that at
the  termination  and/or  expiration  of  this  Agreement,  at Company's written
request, Executive shall promptly return to Company any and all such information
so  requested  by  Company.

The provisions of this Section shall not, however, prohibit Executive from
disclosing to others or using in any manner information that:
(a)        has been  published  or  has become part of the public domain other
than by acts, omissions or fault of  Executive;
(b)        has been furnished or made known to Executive by third parties (other
than those acting directly or indirectly for or on behalf of Executive) as a
matter of legal right without restriction on its use or disclosure;
(c)        was in the possession of Executive prior to obtaining such
information from Company in connection with the performance of this Agreement;
or
(d)        is required to be disclosed by law.
 
7.
Indemnification. 

The Company shall to the full extent permitted by  law  or  as set forth in the
Articles of Incorporation and the Bylaws of the Company,  indemnify, defend and
hold harmless Executive from and against any and all  claims,  demands, 
liabilities,  damages,  loses  and  expenses  (including reasonable  attorney's 
fees,  court costs and disbursements) arising out of the performance  by  him 
of  his duties hereunder except in the case of his willful misconduct.

8.
Termination. 

This Agreement and the employment relationship created hereby will terminate (i)
with cause under Section 8(a); or (ii) upon the voluntary termination of
employment by Executive under Section8 (b).
 
(a)        With Cause.  The Company may terminate this Agreement at any time
because of (i) the determination by the Board of Directors in the exercise of
its reasonable judgment that Executive has committed an act or acts constituting
a felony or other crime involving moral turpitude, dishonesty or theft or fraud;
or (ii) Executive's willful misconduct  in the performance of his duties
hereunder, provided, in each case, however, that the Company shall not terminate
this Agreement pursuant to this Section unless the Company shall first have
delivered  to  the Executive, a notice which specifically identifies such breach
or misconduct and the executive shall not have cured the same within fifteen
(15) days after receipt of such notice.
(b)        Voluntary Termination.  The Executive may terminate his
employment voluntarily.

Obligations of Company Upon Termination.  In the event of the termination of
Executive's employment pursuant to Section 8 (a) or (b), Executive will be
entitled only to the compensation earned by him hereunder as of the date of such
termination (plus any life insurance benefits).  In the event of the termination
of Executive's employment for any reason other than Section 8 (a) or (b) as
described immediately above, all compensation of every nature described in this
Agreement shall immediately vest and become due and owing to Executive.

In the event of the Death of the Executive prior to the end of the Term of this
Agreement, Executive’s spouse shall be entitled to receive Compensation pursuant
to this Agreement through the end of its Term as it accrues.
 
          
9.
Waiver of Breach. 

The waiver by any party hereto of a breach of any provision of this Agreement
will not operate or be construed as a waiver of any subsequent breach by any
party.
          

10.
Arbitration. 

If a dispute should arise regarding this Agreement the parties agree that all
claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration in Houston, Texas in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the "Rules").  The
governing law of this Agreement shall be the substantive law of the State of
Texas, without giving effect to conflict of laws.  A decision of the arbitrator
shall be final, conclusive and binding on the Company and Executive.

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11.
Covenant Not to Compete.

 
So long as the Executive is employed by the Company and for a period of eighteen
(18) months after either (i) the voluntary termination of employment by
Executive or (ii) the termination of the Executive by the Company for cause, as
set forth in Section 8(b) hereof, the Executive specifically agrees that he will
not, for himself, on behalf of, or in conjunction with any person, firm,
corporation or entity, other than the Company (either as principal, employee,
shareholder, member, director, partner, consultant, owner or part-owner of any
corporation, partnership or any type of business entity) anywhere in any county
in which the Company is doing business at the time of termination, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or be
connected in any manner with the ownership, management, operation, or control of
any business similar to the type of business conducted by the Company at the
time of termination of the Executive's employment.
 
Executive's Acknowledgments and Agreements.  The Executive acknowledges and
agrees that:
(1)        Due to the nature of the Company's business, the foregoing covenants
place no greater restraint upon the Executive than is reasonably necessary to
protect the business and goodwill of the Company; 
(2)        These covenants protect a legitimate interest of the Company and do
not serve solely to limit the Company's future competition;
(3)        This Agreement is not an invalid or unreasonable restraint of trade;
(4)        A breach of these covenants by the Executive would cause irreparable
damage to the Company;
(5)        These covenants will not preclude the Executive from becoming
gainfully employed following termination of employment with the Company;
(6)        These covenants are reasonable in scope and are reasonably necessary
to protect the Company's business and goodwill and valuable and extensive trade
which the Company has established through its own expense and effort;
(7)        The signing of this Agreement is necessary for the Executive's
employment; and 
(8)        He has carefully read and considered all provisions of this Agreement
and that all of the restrictions set forth are fair and reasonable and are
reasonably required for the protection of the interests of the Company.

Remedies, Injunction.  In the event of the Executive's actual or threatened
breach of any provisions of this Agreement, the Executive agrees that the
Company shall be entitled to a temporary restraining order, preliminary
injunction and/or permanent injunction restraining and enjoining the Executive
from violating the provisions herein.  Nothing in this Agreement shall be
construed to prohibit the Company from pursuing any other available remedies for
such breach or threatened breach, including the recovery of damages from the
Executive.  The Executive further agrees that for the purpose of any such
injunction proceeding, it shall be presumed that the Company's legal remedies
would be inadequate and that the Company would suffer irreparable harm as a
result of the Executive's violation of the provisions of this Agreement.  In any
proceeding brought by the Company to enforce the provisions of this Agreement,
no other matter relating to the terms of any claim or cause of action of the
Executive against the Company will be defense thereto.  The foregoing remedy
provisions are subject to the provisions of §15.51 of the Texas Business and
Commerce Code, as amended (the "Code"), which Code provisions shall control in
the event of any conflict between the provisions hereof and the Code or any
other law in effect relevant and applicable hereto.
 
12.
Benefits Insurance.

 
(i)Medical, Dental and Vision Benefits.  During this Agreement, Executive and
his dependents will be entitled to receive such group medical, dental and vision
benefits as Company may provide to its other executives, provided such coverage
is reasonably available, or be reimbursed if Executive is carrying his own
similar insurance.

(ii)Benefit  Plans.  The Executive will be entitled to participate in
any benefit plan or program of the Company which may currently be in place or
implemented in the future.

(iii)Other Benefits.  During the Term, Executive will be entitled to receive, in
addition to and not in lieu of base salary, bonus or other compensation, such
other benefits and normal perquisites as Company currently provides or such
additional benefits as Company may provide for its executive officers in the
future.
 
13.
Vacation and Sick Leave.

 
Vacation Pay. The Executive shall be entitled to an annual vacation leave of
four (4) weeks at full pay.  Executive is specifically permitted to work from
home or other remote location in his discretion, which time shall not be
considered as vacation leave.
 
Sick Pay. The Executive shall be entitled to sick leave as needed.
 
14.
Reimbursement of Expenses.

 
Upon submission of a detailed statement and reasonable documentation, Company
will reimburse Executive in the same manner as other executive officers for all
reasonable and necessary or appropriate out-of-pocket travel and other expenses
incurred by Executive in rendering services required under this Agreement. 
Executive shall be entitled to a $750.00 per month car allowance.

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15.
Withholding of Taxes.

 
Bluegate may withhold from any payments under this Agreement all applicable
taxes, as shall be required pursuant to any law or governmental regulation or
ruling.
 
16.
Entire Understanding.

This Agreement sets forth the entire understanding between the parties with
respect to the subject matter hereof and cancels and supersedes all prior oral
and written agreements between the parties with respect to the subject matter
hereof.
 
17.
Severability.

 
If for any reason any provision of this Agreement shall be held invalid, such
invalidity shall not affect any other provision of this Agreement not held so
invalid.
 
18.
Governing Law.

 
This Agreement has been executed and delivered in the State of Texas and its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws thereof applicable to contracts executed
and to be wholly performed in Texas.
 
19.
Notices.

 
All notices shall be in writing and shall have been duly given if delivered by
hand or mailed, certified or registered mail, return receipt requested to the
following address or to such other address as either party may designate by like
notice:
 
If to Executive:
Charles E. Leibold
22526 Vobe Court
Katy, Texas 77449
 
If to Bluegate:
Bluegate Corp.
Attn: Chairman of the Board of Directors
701 N. Post Oak Road, Suite 630
Houston, Texas 77024
 
Bluegate has caused this Agreement to be executed by its officer and the
Executive has signed this Agreement.
 

20.
Successors, Binding Agreement.

 
This Agreement is binding upon Bluegate’s successors.  Bluegate will require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or assets of Bluegate
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that Bluegate would be required to perform it as if no such
succession had taken place.  Failure of Bluegate to obtain such assumption and
agreement prior to the effectiveness of any such succession shall constitute a
breach of this Agreement.
 
This Agreement shall inure to the benefit of both Bluegate and its successors
and assigns and the Executive and his personal or legal representatives,
executors, administrators, heirs, distributes, successors and assigns.
 

Bluegate: Executive:    
/s/ William E. Koehler 
/s/ CHARLES E. LEIBOLD 
William E. Koehler
CHARLES E. LEIBOLD
President and COO
 

 

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