Exhibit 10.1


    
      

    


    EXHIBIT
      10.1 - THIS OPTION AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
      NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED
      FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
      AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
      OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
      SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

    


    
      	 	
              BLUEGATE
                CORPORATION

            	
              No.
                E-06-07

            


    

    STOCK
      OPTION AGREEMENT

    


    Date
      of
      Grant: August 17, 2006

    


    THIS
      GRANT, dated as of the date of grant first stated above (the "Date of Grant"),
      is delivered by Bluegate Corporation (the "Company") to Gilbert Gertner (the
      “Grantee"), who is an employee, consultant or director of the Company or one
      of
      its subsidiaries (the Company is sometimes referred to herein as the
      "Employer").

    


    WHEREAS,
      the Board of Directors of the Company (the "Board) at a special meeting held
      August 17, 2006 approved the Company’s grant to Grantee of the right to purchase
      shares of the Common Stock of the Company, par value $0.001 per share (the
      "Stock"), in accordance with the terms and provisions hereof.

    


    NOW,
      THEREFORE, the parties hereto, intending to be legally bound hereby, agree
      as
      follows:

    


    
      	
              1.

            	
              Grant
                of Option.

            


    

    


    Subject
      to the terms and conditions hereinafter set forth, the Company, with the
      approval and at the direction of the Board, hereby grants to the Grantee, as
      of
      the Date of Grant, an option to purchase up to 150,000 shares of Stock at a
      price of $0.62 per share. Such option is hereinafter referred to as the "Option"
      and the shares of stock purchasable upon exercise of the Option are hereinafter
      sometimes referred to as the "Option Shares." The Option Shares to be issued
      pursuant to this Stock Option Agreement shall be restricted
      securities.

    


    
      	
              2.

            	
              Vesting.

            


    

    


    This
      Option shall vest as to 100% of the total number of shares covered by the Option
      on the Date of Grant.

    


    
      	
              3.

            	
              Termination
                of Option.

            


    

    


    (a) The
      Option and all rights hereunder with respect thereto, to the extent such Option
      has vested, shall terminate and become null and void after the expiration of
      five (5) years from the Date of Grant (the "Option Term"). To the extent that
      the Option has not vested in accordance with Section 2 above, then the
      non-vested portion of the Option shall terminate and become null and void upon
      the termination of the Grantee as an employee, officer or director of the
      Company. 

    


    (b) In
      the
      event of the death of the Grantee, the Option may be exercised by the Grantee's
      legal representative(s), but only to the extent that the Option would otherwise
      have been exercisable by the Grantee.

    


    (c) In
      the
      event the Board (or Committee, if any) finds by a majority vote after full
      consideration of the facts that Grantee, before or after termination of his
      employment with the Company or an Affiliate for any reason (i) committed or
      engaged in fraud, embezzlement, theft, commission of a felony, or proven
      dishonesty in the course of his employment by the Company or any subsidiary
      or
      affiliate of the Company, which conduct damaged the Company or subsidiary or
      affiliate, or disclosed trade secrets of the Company its subsidiary or its
      affiliate, or (ii) participated, engaged in or had a material, financial or
      other interest, whether as an employee, officer, director, consultant,
      contractor, shareholder, owner, or otherwise, in any commercial endeavor
      anywhere which is competitive with the business of the Company or a subsidiary
      or Affiliate without the written consent of the Company, the Grantee shall
      forfeit all outstanding Options. Clause (ii) shall not be deemed to have been
      violated solely by reason of the Grantee’s ownership of stock or securities of
      any publicly owned corporation, if that ownership does not result in effective
      control of the corporation.

    


    The
      decision of the Board (or Committee, if any) as to the cause of the Grantee’s
      discharge, the damage done to the Company or a subsidiary or an affiliate,
      and
      the extent of the Grantee’s competitive activity shall be final. No decision of
      the Board (or Committee, if any) however, shall affect the finality of the
      discharge of the Grantee by the Company. 

    


    
      	
              4.

            	
              Exercise
                of Options.

            


    

    


    (a) The
      Grantee may exercise the Option with respect to all or any part of the number
      of
      Option Shares then exercisable hereunder by giving the Secretary of the Company
      written notice of intent to exercise. The notice of exercise shall specify
      the
      number of Option Shares as to which the Option is to be exercised and the date
      of exercise thereof, which date shall be at least five days after the giving
      of
      such notice unless an earlier time shall have been mutually agreed upon.
      Notwithstanding the foregoing, an Option granted under this Agreement may be
      exercised in increments of not less than 10% of the full number of Shares as
      to
      which it can be exercised. A partial exercise of an Option will not affect
      the
      Grantee’s right to exercise the Option from time to time in accordance with this
      Agreement as to the remaining Shares subject to the Option.

    


    (b) Full
      payment (in U.S. dollars) by the Grantee of the option price for the Option
      Shares purchased shall be made on or before the exercise date specified in
      the
      notice of exercise in cash, or certified or cashier's check or money order,
      or,
      with the prior written consent of the Board, in whole or in part through the
      surrender of previously acquired shares of Stock at their fair market value
      on
      the exercise date.

    


    On
      the
      exercise date specified in the Grantee's notice or as soon thereafter as is
      practicable, but not to exceed ten (10) business days, the Company shall cause
      to be delivered to the Grantee, a certificate or certificates for the Option
      Shares then being purchased (out of theretofore unissued Stock or reacquired
      Stock, as the Company may elect) upon full payment for such Option Shares.
      


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (c) If
      the
      Grantee fails to pay for any of the Option Shares specified in such notice,
      the
      Grantee's right to purchase such Option Shares may be terminated by the Company.
      The date specified in the Grantee's notice as the date of exercise shall be
      deemed the date of exercise of the Option, provided that payment in full for
      the
      Option Shares to be purchased upon such exercise shall have been received by
      such date.

    


    (d) Notwithstanding
      any of the other provisions hereof, Grantee agrees that he will not exercise
      this Option and that the Company will not be obligated to issue any Option
      Shares pursuant to this Stock Option Agreement, if the exercise of the Option
      or
      the issuance of such Option Shares would constitute a violation by the Grantee
      or by the Company of any provision of any law or regulation of any governmental
      authority or national securities exchanges. Upon the acquisition of any Option
      Shares pursuant to the exercise of the Option herein granted, Grantee will
      enter
      into such written representations, warranties and agreements as the Company
      may
      reasonably request in order to comply with applicable securities laws with
      this
      Stock Option Agreement.

    


    
      	
              5.

            	
              Piggyback
                Registration Rights.

            


    

    


    If
      the
      Company at any time proposes to register any of its Common Stock under the
      Securities Act (other than a registration on Form S-8 or S-4 or any successor
      or
      similar forms) whether or not for sale for the Company's account, the Company
      shall use its best efforts to include in such registration (and any related
      qualifications under blue sky laws or other compliance) all the Option Shares
      specified in a written request or requests, made by the Grantee and received
      by
      the Company within 15 days after the Grantee’s receipt of written notice from
      the Company regarding the proposed registration, which written request may
      specify the inclusion of all or a part of Grantee’s Option Shares.

    


    
      	
              6.

            	
              Adjustment
                of and Changes in Stock of the
                Company.

            


    

    


    In
      the
      event of a reorganization, recapitalization, change of shares, stock split,
      spin-off, stock dividend, reclassification, subdivision or combination of
      shares, merger, consolidation, rights offering, or any other change in the
      corporate structure or shares of capital stock of the Company, the Board shall
      make such adjustment in the number and kind of shares of Stock subject to the
      Option and in the option price; provided, however, that no such adjustment
      shall
      give the Grantee any additional benefits under the Option. 

    


    
      	
              7.

            	
              Fair
                Market Value.

            


    

    


    As
      used
      herein, the "fair market value" of a share of Stock shall be the closing price
      per share of Stock on the PINK SHEETS, OTCBB, NASDAQ, the NYSE, the Amex, the
      composite tape or other recognized market source, as determine by the Board,
      on
      the applicable date of reference hereunder, or if there is no sale on such
      date,
      then the closing price on the last previous day on which a sale is
      reported.

    


    
      	
              8.

            	
              No
                Rights of Stockholders.

            


    

    


    Neither
      the Grantee nor any personal representative shall be, or shall have any of
      the
      rights and privileges of, a stockholder of the Company with respect to any
      shares of Stock purchasable or issuable upon the exercise of the Option, in
      whole or in part, prior to the date of exercise of the Option.

    


    
      	
              9.

            	
              Non-Transferability
                of Option.

            


    

    


    During
      the Grantee's lifetime, the Option hereunder shall be exercisable only by the
      Grantee or any guardian or legal representative of the Grantee, and the Option
      shall not be transferable except, (i) in case of the death of the Grantee,
      by
      will or the laws of descent and distribution, and (ii) to a child, grandchild
      or
      stepchild of the Grantee or to a trust or partnership created by the Grantee,
      who, in each case, will be subject to all of the provisions hereof, nor shall
      the Option be subject to attachment, execution or other similar process. In
      the
      event of (a) any attempt by the Grantee to alienate, assign, pledge, hypothecate
      or otherwise dispose of the Option, except as provided for herein, or (b) the
      levy of any attachment, execution or similar process upon the rights or interest
      hereby conferred, the Company may terminate the Option by notice to the Grantee
      and it shall thereupon become null and void and of no value to any such
      party.

    


    
      	
              10.

            	
              Disputes.

            


    

    


    As
      a
      condition of the granting of this Option, the Grantee and his heirs and
      successors agree that any dispute or disagreement which may arise hereunder
      shall be determined by the Board (or Committee, if any) in its sole discretion
      and judgment, and that any such determination and any interpretation by the
      Board (or Committee, if any) of the terms of this Option shall be final and
      shall be binding and conclusive, for all purposes upon the Company, the Grantee,
      his heirs and successors.

    


    
      	
              11.

            	
              Notice.

            


    

    


    Any
      notice to the Company provided for in this instrument shall be addressed to
      it
      in care of its Secretary at its executive offices at Bluegate Corporation,
      and
      any notice to the Grantee shall be addressed to the Grantee at the current
      address shown on the records of the Company. Any notice shall be deemed to
      be
      duly given if and when properly addressed and posted by registered or certified
      mail, postage prepaid.

    


    
      	
              12.

            	
              Governing
                Law.

            


    

    


    The
      validity, construction, interpretation and effect of this instrument shall
      exclusively be governed by and determined in accordance with the law of the
      State of Texas, except to the extent preempted by federal law, which shall
      to
      the extent govern.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company has caused its duly authorized officers to execute
      and attest to this Stock Option Agreement, and to apply the corporate seal
      hereto, and the Grantee has placed his or her signature hereon, effective as
      of
      the Date of Grant.

    


    Bluegate
      Corporation 

    


    
      	
              By:

            	
               

            	 	 
	 	
              Manfred
                Sternberg, Chief Executive Officer

            	 
	 	 	 	 
	 	 	 	 
	 	 	 	
              Grantee:

            
	 	 	 	 
	 	 	 	
               

            
	 	 	 	
              Gilbert
                Gertner