Document:

ex10_18.htm

    
      
        

      

    

    Exhibit
      10.18       Common Stock Purchase Agreement
      of Albert Koehler

    

    

    SUBSCRIPTION
      AGREEMENT

    

     

    July
      12,
      2007

    Bluegate
      Corporation

    701
      North
      Post Oak Road, Suite 600

    Houston,
      Texas 77024

    

    Ladies
      and Gentlemen:

    

    1.     Private
      Placement

    

    The
      undersigned (the “Investor”) is writing to advise you of the following terms and
      conditions under which the Investor hereby offers to subscribe (the "Offer")
      for
      the securities of this offering which are offered by Bluegate Corporation,
      a
      Nevada corporation (the "Company”). There is no placement agent for the offering
      as it is being offered directly by management.  The Company is issuing
      securities consisting of its Common Stock, par value $.001 with warrants to
      acquire additional shares of the Company’s Common Stock, par value
      $.001(“Warrants”) (collectively, the “Securities”) at $200,000 per
      Security.  Each Security contains 400,000 shares of Common Stock and a
      warrant to purchase 1,000,000 shares of Common Stock at $0.17 per
      share.  The undersigned understands that the Securities are being
      issued pursuant to the exemption from registration requirements of the
      Securities Act of 1933, as amended (the “Act”), provided by Section 4(2) of the
      Act.  As such, the Common Stock, the Warrants, and the underlying
      shares of Common Stock into which the Warrants may be converted (the “Underlying
      Shares”) are "restricted securities".

    

    All
      proceeds received from subscribers for the Securities in the offering will
      be
      paid directly to the Company against delivery by the Company of certificates
      representing the Common Stock and Warrants.

    

    2.            
      Subscription.

    

    Subject
      to the terms and conditions hereinafter set forth in this Subscription
      Agreement, the undersigned hereby offers to purchase the Securities as set
      forth
      in the Investor Signature Page attached hereto.

    

    If
      the
      Offer is accepted by the Company, the Securities shall be paid for by the
      delivery of such amount by wire transfer, check or money order payable to the
      order of Bluegate Corporation Common Stock Purchase which is being delivered
      contemporaneously herewith.

    

    Certificates
      of Common Stock and Warrants will be delivered as directed by the
      undersigned.

    

    3.           
       Conditions to Offer.

    

    The
      undersigned acknowledges that the Company may accept or reject the Offer, in
      whole or in part, for any reason whatsoever.  Acceptance of this Offer
      shall be deemed given by the countersigning of this Subscription Agreement
      on
      behalf of the Company.

    

    4.            
      Representations and Warranties of the Investor.

    

    The
      undersigned, in order to induce the Company to accept this Offer, hereby
      warrants and represents as follows:

    

    (A)           The
      undersigned has sufficient liquid assets to sustain a loss of the undersigned's
      entire investment.

    

    (B)           The
      undersigned represents that he (she or it) is an Accredited Investor as that
      term is defined in Regulation D promulgated under the Securities Act of 1933,
      as
      amended (the "Act").  In general, an "Accredited Investor" is deemed
      to be an institution with assets in excess of $5,000,000 or individuals with
      net
      worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
      jointly with their spouse.

    

    (C)           The
      Company has not made any other representations or warranties to the Investor
      with respect to the Company except as contained herein.   The
      Company has not rendered any investment advice to the Investor with respect
      to
      the Company.

    

    (D)           The
      undersigned has not authorized any person or institution to act as his Purchaser
      Representative (as that term is defined in Regulation D of the General Rules
      and
      Regulations under the Act) in connection with this transaction.  The
      undersigned has such knowledge and experience in financial, investment and
      business matters that he is capable of evaluating the merits and risks of the
      prospective investment in the Securities.  The undersigned has
      consulted with such independent legal counsel or other advisers as he has deemed
      appropriate to assist the undersigned in evaluating his proposed investment
      in
      the Securities.

    

    (E)           The
      undersigned understands that the Securities involve a high degree of risk and
      represents that he (i) has adequate means of providing for his current financial
      needs and possible personal contingencies, and has no need for liquidity of
      investment in the Securities; (ii) can afford (a) to hold unregistered
      securities for an indefinite period of time as required and (b) sustain a
      complete loss of the entire amount of the subscription; and (iii) has not made
      an overall commitment to investments which are not readily marketable which
      is
      disproportionate so as to cause such overall commitment to become
      excessive.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (F)           The
      undersigned has also been afforded the opportunity to ask questions of, and
      receive answers from, the officers and/or directors of the Company concerning
      the terms and conditions of the offering and to obtain any additional
      information, to the extent that the Company possesses such information or can
      acquire it without unreasonable effort or expense, necessary to verify the
      accuracy of the information furnished; and has availed himself of such
      opportunity to the extent he considers appropriate in order to permit him to
      evaluate the merits and risks of an investment in the Securities.  It
      is understood that all documents, records and books pertaining to this
      investment have been made available for inspection, and that the books and
      records of the Company will be available upon reasonable notice for inspection
      by investors during reasonable business hours at its principal place of
      business.

    

    (G)           The
      undersigned acknowledges that the Securities including Underlying Shares have
      not been registered under the Act in reliance on an exemption for transactions
      by an issuer not involving a public offering, and further understands that
      the
      Investor is purchasing the Securities without being furnished any prospectus
      setting forth all of the information that would be required to be furnished
      under the Act.

    

    (H)           The
      undersigned further acknowledges that this offering has not been passed upon
      or
      the merits thereof endorsed or approved by any state or federal
      authorities.

    

    (I)           The
      Securities being subscribed for are being acquired solely for the account of
      the
      undersigned and not with a view to, or for resale in connection with, any
      distribution in any jurisdiction where such sale or distribution would be
      precluded.  By such representation, the Investor means that no other
      person has a beneficial interest in the Securities (or Underlying Shares)
      subscribed for hereunder, and that no other person has furnished or will furnish
      directly or indirectly, any part of or guarantee the payment of any part of
      the
      consideration to be paid to the Company in connection therewith.  The
      undersigned does not intend to dispose of all or any part of the Securities
      (or
      Warrant or Common Stock issuable upon any exercise of the Warrant) except in
      compliance with the provisions of the Act and applicable state securities laws
      and understands that the Securities are being offered pursuant to a specific
      exemption under the provisions of the Act, which exemption(s) depends, among
      other things, upon compliance with the provisions of the Act.

    

    (J)           The
      undersigned further represents and agrees that the undersigned will not sell,
      transfer, pledge or otherwise dispose of or encumber the Securities (including
      the Underlying Shares) prior to registration, or the undersigned will, if
      requested, furnish the Company and its transfer agent with an opinion of counsel
      satisfactory to the Company in form and substance that registration under the
      Act or applicable state securities laws is not required.

    

    (K)           The
      undersigned hereby agrees that the Company may insert the following or similar
      legend on the face of the certificates evidencing the Securities and the
      Underlying Shares, if required in compliance with federal and state securities
      laws:

    

    "These
      securities have not been registered under Act or under the securities laws
      of
      any state.  They may not be sold, offered for sale, pledged or
      hypothecated in the absence of a registration statement in effect with respect
      to the securities under such act or an opinion of counsel reasonably
      satisfactory to the company that such registration is not required pursuant
      to a
      valid exemption under the Act”

    

    (L)           Neither
      the Company nor any person acting on its behalf has offered or sold the
      undersigned the Securities by means of any form of general solicitation or
      general advertising and the Securities were not offered or sold to the Investor
      by means of publicly disseminated advertisements or sales
      literature.

    

    (M)           The
      undersigned represents that during the 30 days prior to the date hereof, the
      undersigned has not, directly or indirectly, made any short sales of, or granted
      any option for the purchase of or entered into any hedging or similar
      transaction with the same economic effect as a net short sale, in the Common
      Stock.

    

    The
      undersigned certifies that each of the foregoing representations and warranties
      set forth in subsection (A) through (M) inclusive of this Section 4 are true
      as
      of the date hereof and shall survive such date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.            
      Representations and Warranties of the Company.

     

    The
      Company hereby makes the following representations and warranties to the
      Investor:

     

    (A)           Subsidiaries.  The
      Company has no direct or indirect subsidiaries (each a “Subsidiary,” and
      collectively, “Subsidiaries”) except as described in SEC
      Reports..    All the issued and outstanding shares of
      capital stock of each Subsidiary are validly issued and are fully paid,
      non-assessable and free of preemptive and similar rights, and the Company owns
      all of the issued and outstanding shares of capital stock of each Subsidiary,
      except as described in such the SEC Reports.

     

    (B)           Organization
      and Qualification.  Each of the Company and the Subsidiaries is an
      entity duly incorporated or otherwise organized, validly existing and in good
      standing under the laws of the jurisdiction of its incorporation or organization
      (as applicable), with the requisite power and authority to own and use its
      properties and assets and to carry on its business as currently
      conducted.  Neither the Company nor any Subsidiary is in violation of
      any of the provisions of its respective certificate or articles of
      incorporation, bylaws or other organizational or charter documents.

     

    (C)           Authorization;
      Enforcement.  The Company has the requisite corporate power and
      authority to enter into and to consummate the offering.  The execution
      and delivery of this Subscription Agreement by the Company and the consummation
      by it of the transactions contemplated hereby have been duly authorized by
      all
      necessary action on the part of the Company and no further consent or action
      is
      required by the Company, other than the Required Approvals  (as
      defined below).  This Subscription Agreement, when executed and
      delivered in accordance with the terms hereof, will constitute the valid and
      binding obligation of the Company enforceable against the Company in accordance
      with its terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity.

     

    (D)           No
      Conflicts.  The execution, delivery and performance of this
      Subscription Agreement by the Company and the consummation by the Company of
      the
      offering do not and will not: (i) conflict with or violate any provision of
      the
      Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
      or other organizational or charter documents, or (ii) subject to obtaining
      the
      Required Approvals, conflict with, or constitute a default (or an event that
      with notice or lapse of time or both would become a default) under, or give
      to
      others any rights of termination, amendment, acceleration or cancellation (with
      or without notice, lapse of time or both) of, any agreement, credit facility,
      debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
      or other understanding to which the Company or any Subsidiary is a party or
      by
      which any property or asset of the Company or any Subsidiary is bound or
      affected, or (iii) result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority as currently in effect to which the Company or a Subsidiary is subject
      (including federal and state securities laws and regulations), or by which
      any
      property or asset of the Company or a Subsidiary is bound or affected; except
      in
      the case of each of clauses (ii) and (iii), such as could not, individually
      or
      in the aggregate (a) adversely affect the legality, validity or enforceability
      of the offering, (b) have or result in or be reasonably likely to have or result
      in a material adverse effect on the results of operations, assets, prospects,
      business or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole, or (c) adversely impair the Company's ability
      to
      perform fully on a timely basis its obligations under this Subscription
      Agreement (any of (a), (b) or (c), a “Material Adverse
      Effect”).

     

    (E)           Filings,
      Consents and Approvals.  Neither the Company nor any Subsidiary is
      required to obtain any consent, waiver, authorization or order of, give any
      notice to, or make any filing or registration with, any court or other federal,
      state, local or other governmental authority or other Person in connection
      with
      the execution, delivery and performance by the Company of this Subscription
      Agreement, other than (i) the filing with the SEC of a Form D pursuant to SEC
      Regulation D and (ii) applicable Blue Sky filings (collectively, the
“Required Approvals”).  Such “Person” means an individual or
      corporation, partnership, trust, incorporated or unincorporated association,
      joint venture, limited liability company, joint stock company, government (or
      agency or subdivision thereof) or other entity of any kind.

     

    (F)           Issuance
      of the Securities.  The Securities are duly authorized and, when
      issued and paid for in accordance with this Subscription Agreement, will be
      duly
      and validly issued, fully paid and non-assessable, free and clear of all
      liens.  The Company has reserved from its duly authorized capital
      stock a number of shares of Common Stock for issuance upon exercise of the
      Warrants. The issuance and sale of the Securities hereunder does not contravene
      the SEC rules and regulations.

     

    (G)           Capitalization.  The
      number of shares and type of all authorized, issued and outstanding capital
      stock of the Company is as set forth in the SEC Reports. No Person has any
      right
      of first refusal, preemptive right, right of participation, or any similar
      right
      to participate in the offering.  Except as a result of the purchase
      and sale of the Securities which may be issued in connection with this offering
      and except for (1) options  for capital stock issued or issuable under
      the Company’s option plans set forth in the SEC Reports  and
      (2)  warrants issued by the Company as set forth in the SEC Reports,
      there are no outstanding options, warrants, script rights to subscribe to,
      calls
      or commitments of any character whatsoever relating to, or securities, rights
      or
      obligations convertible into or exchangeable for, or giving any Person any
      right
      to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      Subsidiary is or may become bound to issue additional shares of Common Stock,
      or
      securities or rights convertible or exchangeable into shares of Common
      Stock

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (H)           SEC
      Reports; Financial Statements.  The Company has filed all reports
      required to be filed by it under the Act and the Securities Exchange Act of
      1934
      (the “Exchange Act”), including pursuant to Section 13(a) of 15(d) thereof, for
      the two years preceding the date hereof (or such shorter period as the Company
      was required by law to file such material) (the foregoing materials being
      collectively referred to herein as the “SEC Reports”). The SEC Reports, when
      filed, complied in all material respects with the requirements of the Act and
      the Exchange Act and the rules and regulations of the Commission promulgated
      thereunder, and none of the SEC Reports, when filed, contained any untrue
      statement of a material fact or omitted to state a material fact required to
      be
      stated therein or necessary in order to make the statements therein, in light
      of
      the circumstances under which they were made, not misleading.  The
      financial statements of the Company that have been included in the SEC Reports
      comply in all material respects with applicable accounting requirements and
      the
      rules and regulations of the SEC with respect thereto as in effect at the time
      of filing.  Such financial statements have been prepared in accordance
      with generally accepted accounting principles applied on a consistent basis
      during the periods involved (“GAAP”), except as may be otherwise
      specified in such financial statements or the notes thereto, and fairly present
      in all material respects the financial position of the Company and its
      consolidated subsidiaries as of and for the dates thereof and the results of
      operations and cash flows for the periods then ended, subject, in the case
      of
      unaudited statements, to normal, immaterial, year-end audit
      adjustments.

     

    (I)           Material
      Changes.  Since the date of the latest audited financial statement
      dated December 31, 2006 and subsequent quarterly 10Q filings included within
      the
      SEC Reports: (i) there has been no event, occurrence or development that has
      had
      a Material Adverse Effect, (ii) the Company has not incurred any liabilities
      (contingent or otherwise) other than (A) trade payables and accrued expenses
      incurred in the ordinary course of business consistent with past practice and
      (B) liabilities not required to be reflected in the Company’s financial
      statements pursuant to GAAP or required to be disclosed in filings made with
      the
      SEC, (iii) the Company has not altered its method of accounting or the identity
      of its auditors, (iv) the Company has not declared or made any dividend or
      distribution of cash or other property to its stockholders except in the
      ordinary course of business consistent with prior practice, or purchased,
      redeemed or made any agreements to purchase or redeem any shares of its capital
      stock except consistent with prior practice or pursuant to existing Company
      stock option or similar plans.

     

    (J)           Litigation.
      As set forth in the SEC Reports and Company financial statements for March
      31,
      2007, there is no action, suit, inquiry, notice of violation, proceeding or
      investigation pending or, to the knowledge of the Company, threatened against
      or
      affecting the Company, any Subsidiary or any of their respective properties
      before or by any court, arbitrator, governmental or administrative agency or
      regulatory authority (federal, state, county, local or foreign) (collectively,
      an “Action”) which: (i) adversely affects or challenges the legality,
      validity or enforceability of this Subscription Agreement or the Securities
      or
      (ii) would, if there were an unfavorable decision, individually or in the
      aggregate, have or reasonably be expected to result in a Material Adverse
      Effect. Neither the Company nor any Subsidiary is or has been the subject of
      any
      Action involving a claim of violation of or liability under federal or state
      securities laws.  The Company does not have pending before the SEC any
      request for confidential treatment of information.  There has not
      been, and to the knowledge of the Company, there is not pending or contemplated,
      any investigation by the SEC involving the Company.  The SEC has not
      issued any stop order or other order suspending the effectiveness of any
      registration statement filed by the Company or any Subsidiary under the Exchange
      Act or the Securities Act.

     

    (K)           Compliance.  Neither
      the Company nor any Subsidiary: (i) is in default under or in violation of
      (and
      no event has occurred that has not been waived that, with notice or lapse of
      time or both, would result in a default by the Company or any Subsidiary under),
      nor has the Company or any Subsidiary received notice of a claim that it is
      in
      default under or that it is in violation of, any material indenture, loan or
      credit agreement or any other material agreement or instrument to which it
      is a
      party or by which it or any of its properties is bound (whether or not such
      default or violation has been waived), which default or violation would have
      or
      result in a Material Adverse Effect, (ii) is in violation of any order of any
      court, arbitrator or governmental body, or (iii) is in violation of any statute,
      rule or regulation of any governmental authority, except in each case as would
      not, individually or in the aggregate, have or result in a Material Adverse
      Effect.

     

    (L)           Regulatory
      Permits.  The Company and the Subsidiaries possess all
      certificates, authorizations and permits issued by the appropriate federal,
      state, local or foreign regulatory authorities necessary to conduct their
      respective businesses as described in the SEC Reports, except where the failure
      to possess such permits would not, individually or in the aggregate, have or
      reasonably be expected to result in a Material Adverse Effect (“Material
      Permits”), and neither the Company nor any Subsidiary has received any
      notice of proceedings relating to the revocation or modification of any Material
      Permit.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (M)           Listing
      and Maintenance Requirements.  The Company is currently quoted on
      the OTC Bulletin Board under the symbol “BGAT”.  The Company is, and
      has no reason to believe that it will not in the foreseeable future to be in
      compliance with all requirements to be quoted on the OTC Bulletin
      Board.

     

    (N)           Internal
      Accounting Controls.  The Company and the Subsidiaries maintain a
      system of internal accounting controls sufficient to provide reasonable
      assurance that (i) transactions are executed in accordance with management's
      general or specific authorizations, (ii) transactions are recorded as necessary
      to permit preparation of financial statements in conformity with generally
      accepted accounting principles and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management's general
      or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences. The Company has established disclosure
      controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
      for
      the Company and designed such disclosures controls and procedures to ensure
      that
      material information relating to the Company, including its Subsidiaries, is
      made known to the certifying officers by others within those
      entities.  The Company's certifying officers have evaluated the
      effectiveness of the Company's disclosure controls and procedures as of the
      date
      immediately prior to the filing of the Company’s most recent periodic report
      under the Exchange Act (such date, the "Evaluation Date").  The
      Company presented in such report the conclusions of the certifying officers
      about the effectiveness of the disclosure controls and procedures based on
      their
      evaluations as of the Evaluation Date.  Since the Evaluation Date,
      there have been no significant changes in the Company's internal controls (as
      such term is defined in Item 307(b) of Regulation S-K under the Exchange
      Act).

     

    (O)           Disclosure.  The
      disclosure provided to the Investor regarding the Company, its business and
      the
      transactions contemplated hereby, furnished by or on behalf of the Company,
      including all of the SEC Reports, does not contain any untrue statement of
      a
      material fact or omit to state any material fact necessary in order to make
      the
      statements made therein, in light of the circumstances under which they were
      made, not misleading. The Company acknowledges and agrees that the Investor
      makes or has made no representations or warranties with respect to the
      transactions contemplated hereby other than those specifically set forth in
      this
      Subscription Agreement.

     

    6.            
      Covenants of the Company.

    

    (A)           Registration
      Rights.The Company grants to the Investor registration rights relating to
      the Underlying Shares under the following terms and conditions:

    

    (1)           The
      Company will prepare and file, at its own expense, within 90 days from its
      Final
      Closing a registration statement under the Act (the “Registration Statement”)
      with the SEC sufficient to permit the non-underwritten public offering and
      resale of the Underlying Shares (the “Registrable Securities”) through the
      facilities of all appropriate securities exchanges, if any, on which the Common
      Stock is being sold or on the over-the-counter market if the Common Stock is
      traded thereon.

     

    (2)           The
      Company will use its reasonable best efforts to cause such Registration
      Statement to become effective within one hundred and fifty (150) days from
      its
      filing or, if earlier, within twenty (20) business days of Commission clearance
      to request acceleration of effectiveness.  The number of shares
      designated in the Registration Statement to be registered shall include all
      of
      the Registrable Securities and shall include appropriate language regarding
      reliance upon Rule 416 to the extent permitted by the SEC.  The
      Company will notify the Investors of the effectiveness of the Registration
      Statement within five (5) business days of such event.

     

    (3)           Except
      as otherwise provided in Section 6(C) below, the Company will use its reasonable
      best efforts to maintain effectiveness under the Act of the Registration
      Statement or any post-effective amendment thereto filed under the terms of
      this
      Agreement until the earlier of (i) the date that none of the Registrable
      Securities covered by such Registration Statement are or may become issued
      and
      outstanding, (ii) the date that all of the Registrable Securities have been
      sold
      pursuant to such Registration Statement, (iii) the date that all Registrable
      Securities have been otherwise transferred to persons who may trade such shares
      without restriction under the Securities Act, and the Company has delivered
      a
      new certificate or other evidence of ownership for such securities not bearing
      a
      restrictive legend, or  (iv) the date that all Registrable Securities
      may be sold at any time, without volume or manner of sale limitations, pursuant
      to Rule 144(k) or any similar provision then in effect under the Securities
      Act
      in the opinion of counsel to the Company, which counsel shall be reasonably
      acceptable to the Investor.

     

    (4)           If,
      at any time during which the Registration Statement required by Section 6(A)(1)
      and 6(A)(2) above is not effective, the Company shall determine to proceed
      with
      the preparation and filing of a separate registration statement pursuant to
      the
      Act in connection with the proposed offer and sale of any securities by it
      or
      any of its securities holders (other than a registration statement on Form
      S-4,
      S-8, or other limited purpose Form), the Company will give written notice of
      its
      determination to do so to the Investor.  Upon receipt of a written
      request from Investor, within twenty (20) days after receipt of any such notice
      from the Company, the Company will cause all such Registrable Securities
      requested by the Investor to be included in such registration statement, all
      to
      the extent required to permit the sale or other disposition by the Investor
      of
      such shares.  The obligation of the Company under this Section 6(A)
      (4) shall be unlimited as to the number of registration statements to which
      it
      applies, unless the Effectiveness Period has ended.  Notwithstanding
      the foregoing, the Company shall have the right to postpone or withdraw any
      registration effect pursuant to this Section 6(A) (4) without obligation to
      the
      Investor.  In addition, if any registration effected pursuant to this
      Section 6(A)(4) is a registered public offering involving an underwriting,
      the
      Company shall so advise the Investor as a part of the written notice given
      pursuant to this Section 6(A)(4).  In such event, the right of the
      Investor to include Registrable Securities in such registration pursuant to
      this
      Section 6(A)(4) shall be conditioned upon Investor’s execution of an
      underwriting agreement upon customary terms with the underwriter or underwriters
      selected for the underwriting by the Company.  If the managing
      underwriter advises the Company in writing that marketing factors require a
      limitation in the number of shares held by selling stockholders to be
      underwritten, the number of Registrable Securities that may be included in
      such
      Registration Statement and underwriting shall be allocated among all investors,
      including the Investor, requesting registration in proportion, as nearly as
      practicable, to the respective number of shares of Registrable Securities held
      by them on the date the Company gives the notice specified in this Section
      6(A)(4).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (5)           All
      fees, disbursements and out-of-pocket expenses and costs incurred by the Company
      in connection with the preparation and filing of the Registration Statement
      and
      in complying with applicable federal securities and Blue Sky laws (including,
      without limitation, all attorneys' fees of the Company) shall be borne by the
      Company.  The Investor and the other investors in the offering shall
      bear the cost of underwriting and/or brokerage discounts, fees and commissions,
      if any, applicable to the Registrable Securities being registered and the fees
      and expenses of their counsel.  The Company shall use its reasonable
      best efforts to qualify any of the Securities for sale in such states as any
      Investor reasonably designates.  However, the Company shall not be
      required to qualify in any state which will require an escrow or other
      restriction relating to the Company and/or the sellers, or which will require
      the Company to qualify to do business in such state or require the Company
      to
      file therein any general consent to service of process.  If NASDR Rule
      2710 requires any broker-dealer to make a filing prior to executing a sale
      by a
      Purchaser of the Securities, make an issuer filing with the NASDR, Inc.
      Corporate Financing Department pursuant to NASDR Rule 2710(b) (10) (A) (i)
      and
      respond within five (5) Trading Days to any comments received from NASDR in
      connection therewith, and pay the filing fee required in connection therewith.
      The Company, at its expense, will supply the Investor with copies of the
      applicable Registration Statement and any prospectus included therein and other
      related documents in such quantities as may be reasonably requested by the
      Investor.

    

    (6)           In
      the event that (i) the Registration Statement to be filed by the Company
      pursuant to Section 6(A)(2) is not declared effective by the SEC within the
      earlier of one hundred and fifty (150) days from  its filing or twenty
      (20) days of clearance by the SEC to request effectiveness, (ii) such
      Registration Statement is not maintained as effective by the Company for the
      period set forth in Section 6(A)(2) above (each a “Registration Default”) then
      the Company will pay Investor (pro rated on a daily basis), as partial
      compensation for such failure and not as a penalty, in the form of Common Stock,
      one and one-half percent (1.5%) of the purchase price of the Registrable
      Securities purchased from the Company and held by the Investor for each month
      (or portion thereof) until such Registration Statement has been filed or
      declared effective or lapsed effectiveness (in the case of clause (ii) above),
      one and one-half percent (1.5%) of the purchase price of the Registrable
      Securities purchased from the Company and held by the Investor each month (or
      portion thereof) (regardless of whether one or more such Registration Defaults
      are then in existence, but without duplication of such partial compensatory
      payments) until such Registration Statement has been declared effective. Such
      compensatory payments shall be made to the Investor in cash,
      within  thirty (30) calendar days of demand, provided, however, that
      the payment of such amounts shall not relieve the Company from its obligations
      to register the Securities pursuant to this Section.   For
      purposes of this calculation, the value of the common stock will be computed
      using the average of the closing price for the five preceding trading
      days.

    

    If
      the
      Company does not remit the payment to the Investor as set forth above, the
      Company will pay the Investor reasonable costs of collection, including
      attorneys’ fees, in addition to the liquidated damages. The registration of the
      Securities pursuant to this provision or payment of such compensatory amounts
      shall not affect or limit the Investor’s other rights or remedies as set forth
      in this Agreement or at law.

    

    (B)           The
      Company shall be entitled to suspend the availability of any Registration
      Statement, by providing notice thereof to the Investors, without incurring
      or
      accruing any obligation to pay liquidated damages pursuant to Section 6(A)(4),
      no more than one (1) time in any three month period or three (3) times in any
      twelve month period, and any such period during which the availability of the
      Registration Statement is suspended (the “Deferral Period”) shall, without
      incurring any obligation to pay liquidated damages pursuant to Section 6(A)(4),
      not exceed 30 days; provided that the aggregate duration of any
      Deferral Periods shall not exceed 15 days in any three month period or 40 days
      in any twelve (12) month period; provided that in the case of a
      Material Event relating to an acquisition or a probable acquisition or
      financing, recapitalization, business combination or other similar transaction,
      the Company may, without incurring any obligation to pay liquidated damages
      pursuant to Section 6(A)(4), deliver to the Holders a second notice to the
      effect set forth above, which shall have the effect of extending the Deferral
      Period by up to an additional 30 days, or such shorter period of time as is
      specified in such second notice.  As used herein, “Material Event”
shall mean the occurrence of any event or the existence of any fact as a result
      of which any Registration Statement shall contain any untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (C)           In
      the case of each registration affected by the Company pursuant to any section
      herein, the Company will keep each shareholder advised in writing as to the
      initiation of each registration and as to the completion thereof. At its
      expense, the Company will:

    

    (1)           Keep
      such registration effective at least until such time as the Underlying Shares
      are eligible to have the restrictive legend removed pursuant to SEC Rule
      144(k);

    

    (2)           Prepare
      and file with the SEC such amendments and supplements to such registration
      statement and the prospectus used in connection with such registration statement
      as may be necessary to comply with the provisions of the Securities Act with
      respect to a disposition of all securities covered by such registration
      statement;

    

    (3)           Notify
      the shareholders at any time when a prospectus relating thereto is required
      to
      be delivered under the Act, of the happening of any event as a result of which
      the prospectus included in such registration statement, as then in effect,
      includes an untrue statement of a material fact or omits to state a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading or incomplete in light of the circumstances then existing, and
      at
      the request of the shareholders, prepare and furnish to them a reasonable number
      of copies of a supplement to or an amendment of such prospectus as may be
      necessary so that, as thereafter delivered to the shareholders, such prospectus
      shall not include an untrue statement of a material fact or omit to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading or incomplete in light of the circumstances then
      existing;

     

    (4)           Use
      its commercially reasonable best efforts to prevent the issuance of any stop
      order or other suspension of effectiveness of a registration statement, and,
      if
      such an order is issued, to obtain the withdrawal of such order at the earliest
      possible moment and to notify Investor (and, in the event of an underwritten
      offering, the managing underwriter) of the issuance of such order and the
      resolution thereof;

    

    (5)           Cause
      all shares which are registered in accordance with the provisions herein, to
      be
      listed or included for quotation on each exchange on which the shares of Common
      Stock are then listed or included for quotation;

    

    (6)           Provide
      a transfer agent and registrar for all such shares and CUSIP number for all
      such
      shares of Common Stock in each case not later than the effective date of such
      registration statement; and

    

    (7)           Otherwise
      use its commercially reasonable best efforts to comply with all applicable
      rules
      and regulations of the SEC.

    

     (D)             To
      the extent Investor includes any Underlying Shares in a Registration Statement
      pursuant to the terms hereof, Investor will indemnify and hold harmless the
      Company, its directors and officers and any controlling person from and against,
      and will reimburse the Company, its directors and officers and any controlling
      person with respect to, any and all loss, damage, liability, cost or expense
      to
      which the Company, its directors and officers or such controlling person may
      become subject under the Act or otherwise, insofar as such losses, damages,
      liabilities, costs or expenses are caused by any untrue statement or alleged
      untrue statement of any material fact contained in such registration statement,
      any prospectus contained therein or any amendment or supplement thereto, or
      arise out of or are based upon the omission or alleged omission to state therein
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances in which they were made,
      not
      misleading, in each case to the extent, but only to the extent, that such untrue
      statement or alleged untrue statement or omission or alleged omission was so
      made in reliance upon and in conformity with written information furnished
      by or
      on behalf of the Investor specifically for use in the preparation thereof and
      provided further, that the maximum amount that may be recovered from Investor
      shall be limited to the amount of proceeds received by Investor from the sale
      of
      such shares of Common Stock.

     

    (E)             To
      the extent any indemnification by an indemnifying party is prohibited or limited
      by law, the indemnifying party agrees to make the maximum contribution with
      respect to any amounts for which it would otherwise be liable hereunder to
      the
      extent permitted by law, provided that (i) no contribution shall be made under
      circumstances where the indemnifying party would not have been liable for
      indemnification pursuant to the provisions hereof, (ii) no seller of securities
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Act) shall be entitled to contribution from any seller of securities who
      was
      not guilty of such fraudulent misrepresentation, and (iii) the amount of the
      contribution together with any other payments made in respect of such loss,
      damage, liability or expense, by any seller of securities shall be limited
      to
      the net amount of proceeds received by such seller from the sale of such
      securities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (F)             The
      Investor will cooperate with the Company in connection with this Subscription
      Agreement, including timely supplying all information reasonably requested
      by
      the Company (which shall include all information regarding the Investor and
      proposed manner of sale of securities required to be disclosed in any
      registration statement filed in accordance with this Section 6 and executing
      and
      returning all documents reasonably requested in connection with the registration
      and sale of any securities being registered hereunder and entering into and
      performing their obligations under any underwriting agreement, if the offering
      is an underwritten offering, in usual and customary form, with the managing
      underwriter or underwriters of such underwritten offering.

    

    (G)             Transfer
      Restrictions.

    

    (9)           The
      Securities may only be disposed of in compliance with state and federal
      securities laws.  In connection with any transfer of Securities other
      than pursuant to an effective registration statement or Rule 144, to the Company
      or to an affiliate of an Investor or in connection with a pledge as contemplated
      in Section 6(H)(2), the Company may require the transferor thereof to provide
      to
      the Company an opinion of counsel selected by the transferor and reasonably
      acceptable to the Company, the form and substance of which opinion shall be
      reasonably satisfactory to the Company, to the effect that such transfer does
      not require registration of such transferred Securities under the
      Act.  As a condition of transfer, any such transferee shall agree in
      writing to be bound by the terms of this Subscription Agreement and shall have
      the rights of an Investor under this Subscription Agreement.

     

    (10)           The
      Investors agree to the imprinting, so long as is required by this Section 6(H)
      (2) of a legend on any of the Securities in the following form:

     

    THIS
      [COMMON STOCK] [WARRANT] AND THE SHARES ISSUABLE UPON  [EXERCISE OF
      THE [WARRANT] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “ACT”), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
      ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
      STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAW OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH COMMON STOCK MAY BE SOLD,
      ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

     

    (11)           Certificates
      evidencing the Underlying Shares shall not contain any legend (including the
      legend set forth in Section 6(H)(2) hereof): (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Act, or (ii) following any sale of such Underlying Shares
      pursuant to Rule 144, or (iii) if such Underlying Shares are eligible for sale
      under Rule 144(k), or (iv) if such legend is not required under applicable
      requirements of the Act (including judicial interpretations and pronouncements
      issued by the staff of the SEC); provided, however, in connection
      with the issuance of the Underlying Shares, each Investor, severally and not
      jointly with the other Investors, hereby agrees to adhere to and abide by all
      prospectus delivery requirements under the Act and rules and regulations of
      the
      SEC. The Company shall cause its counsel to issue a legal opinion to the
      Company’s transfer agent promptly after the Effective Date if required by the
      Company’s transfer agent to effect the removal of the legend
      hereunder.  If all or any portion of   Warrant is
      exercised at a time when there is an effective registration statement to cover
      the resale of the Underlying Shares, or if such Underlying Shares may be sold
      under Rule 144(k) or if such legend is not otherwise required under applicable
      requirements of the Act (including judicial interpretations thereof) then such
      Underlying Shares shall be issued free of all legends.  The Company
      agrees that following the Effective Date or at such time as such legend is
      no
      longer required under this Section 6(H)(3), it will, no later
      than  ten (10) days following the delivery by an Investor to the
      Company or the Company's transfer agent of a certificate representing Underlying
      Shares, as applicable, issued with a restrictive legend (such third (3rd) day, the
      “Legend Removal Date”), deliver or cause to be delivered to such Investor
      a certificate representing such shares that is free from all restrictive and
      other legends.  The Company may not make any notation on its records
      or give instructions to any transfer agent of the Company that enlarge the
      restrictions on transfer set forth in this Section.

     

    (12)           Each
      Investor, severally and not jointly with the other Investors, agrees that the
      removal of the restrictive legend from certificates representing Securities
      as
      set forth in this Section 6(H) is predicated upon the Company’s reliance that
      the Investor will sell any Securities pursuant to either the registration
      requirements of the Act, including any applicable prospectus delivery
      requirements, or an exemption there from.

     

    (I)           Material
      Non-Public Information.  The Company covenants and agrees that
      neither it nor any other person or entity acting on its behalf will provide
      the
      Investor or its agents or counsel with any information that the Company believes
      constitutes material non-public information, unless prior thereto such Investor
      shall have executed a written agreement regarding confidentiality and use of
      such information.  The Company understands and confirms that the
      investor shall be relying on the foregoing representations in effecting
      transactions in securities of the Company.

     

    7.          
        No Waiver.

    

    Notwithstanding
      any of the representations, warranties, acknowledgments or agreements made
      herein by the Investor, the Investor does not thereby or in any manner waive
      any
      rights granted to the Investor under federal or state securities
      laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.      
            Revocation.

    

    The
      Investor agrees that he shall not cancel, terminate or revoke this Subscription
      Agreement or any agreement of the Investor made hereunder other than as set
      forth herein, and that this Subscription Agreement shall survive the death
      or
      disability of the Investor.

    

    9.         
         Termination of Subscription Agreement.

    

    If
      the
      Company elects to cancel this Subscription Agreement, provided that it returns
      to the Investor, without interest and without deduction, all sums paid by the
      Investor, this Offer shall be null and void and of no further force and effect,
      and no party shall have any rights against any other party
      hereunder.

     

    10.           Miscellaneous.

    

    (A)           All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be mailed by registered or certified mail, return receipt requested,
      postage prepaid, or by overnight courier service to the Investor at his address
      set forth below and to the Company  at the addresses set forth
      herein.

    

    (B)           This
      Subscription Agreement constitutes the entire agreement among the parties hereto
      with respect to the subject matter hereof and may be amended only by a writing
      executed by all parties.

    

    (C)        The
      provisions of this Subscription Agreement shall survive the execution
      thereof.

    

    (D)           The
      Subscription Agreement shall be governed by the laws of the State of
      Texas  and the Investor consents to the exclusive jurisdiction of, and
      venue in, the state courts in  Harris County in the State of Texas (or
      in the event of exclusive federal jurisdiction, the courts of
      the  Southern District of Texas).

    

    11.           Certification.

    

    The
      Investor certifies that he has read this entire Subscription Agreement and
      that
      every statement on the part of the Investor made and set forth herein is true
      and complete.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    INVESTOR
      SIGNATURE PAGE FOR BLUEGATE CORPORATION SUBSCRIPTION
      AGREEMENT

    Please
      print or type, Use ink only.(All Parties Must
      Sign)

    

    The
      undersigned investor hereby certifies that
      he  (i) agrees to all the terms and conditions
      of this Subscription Agreement, (ii) meets the suitability standards set forth
      herein and (iii) is a resident of the state or foreign jurisdiction indicated
      below.

    

    Dollar
      Amount of Securities Subscribed for: $50,000

    

    

    
      	
              Albert  Koehler

            	 	If
              other than individual check one and indicate
	
              Name
                of Investor (Print)

            	 	capacity
              of signatory under the signature: 
	 	 	 o   
              Trust 
	 	 	 o   
              Estate 
	
              Name
                of Joint Investor (if any) (Print)

            	 	 o   
              Uniform Gifts to Minors Act, State of  
	 	 	 o   
              Attorney-in-fact 
	 	 	 o   
              Corporation 
	 	 	 o   
              Other 
	
              Signature
                of Investor

            	 	 	 	 
	 	 	 If
              Joint Ownership, Check one: 
	 	 	 o   
              Joint Tenants with Right of Survivorship 
	 	 	 o   
              Tenants in Common 
	
              Signature
                of Joint Investor (if any)

            	 	 o   
              Tenants by the Entirety 
	 	 	 o   
              Community by Property 
	 	 	 	 	 
	
              Capacity
                of Signatory (if applicable)

            	 	 Backup
              Withholding Statement: 
	 	 	 o   
              Please check this box only if the investor is subject to backup
              withholding 
	 	 	 	 
	
              Social
                Security or Taxpayer Identification Number

            	 	 	 	 
	 	 	 Foreign
              Person: 
	
              Investor
                Mail Address:

            	 	 o   
              Please check this box only if the investor is a nonresident alien,
              foreign
              corporation, foreign partnership, foreign trust or foreign
              estate 
	 	 	 
	
              Street
                Address

            	 	 	 	 
	 	 	 	 	 
	
              City                                                                              
                 State                                         
                   Zip Code

            	 	 Share
              and Warrant Registration Name(s) and Amounts: 
	 	 	 	 	 
	
              Telephone:
                (     
                )                                                          
                 Fax: (       )

            	 	 Name	
              Amount

            
	 	 	1.	
               

            
	
              Email:

            	 	 	2.	
               

            
	 	 	3.	
               

            
	
              Address
                for Delivery of Shares (if different from above):

            	 	4. 	
               

            
	 	 	 	 	 
	 	 	 	 	 
	
              Street
                Address

            	 	 	 	 
	
               

            	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              City                                                                           
                    State                                            
                  Zip Code

            	 	 	 	 
	
               

            	 	 	 	 
	 	 	 	 	 

    

    
      	
               

            	 	 
	
              Customer
                Account No.

            	
               

            	 

    

     

    Broker:

    
      	
              o NASD
                Firm
                Reg.Rep.

            	  
              	
              No.

            	  
              	
               o  
Other
                Investor Representative

            	  
              	 
	
               

            	 	 	 	
               

            	 	 

    

    

    The
      investor agrees to the terms of this Agreement and, as required by the
      Regulations pursuant to the Internal Revenue Code, certifies under penalty
      of
      perjury that (1) the Social Security Number or Taxpayer Identification Number
      and address provided above is correct, (2) the investor is not subject to backup
      withholding (unless the Backup Withholding Statement box is checked) either
      because he has not been notified that he is subject to backup withholding as
      a
      result of a failure to report all interest or dividends or because the Internal
      Revenue Service has notified him that he is no longer subject to backup
      withholding and (3) the investor (unless, the Foreign Person box above is
      checked) is not a nonresident alien, foreign partnership, foreign trust or
      foreign estate.

    

    THE
      SUBSCRIPTION FOR SECURITIES OF BLUEGATE CORPORATION. BY THE ABOVE NAMED
      INVESTOR(S) IS ACCEPTED THIS ________ DAY OF July______________________,
      2007.

    

    BLUEGATE
      CORPORATION

    

    
      	
              By:

            	
                
                

            	 
	
              Name:
                Charles E. Leibold 

            	 
	
              Title:   Chief
                Financial OfficerUnassociated Document

    
      

    

    Exhibit
      10.19      Warrant Agreement of Manfred
      Sternberg

    

    THIS
      WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NEITHER THIS
      WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE
      ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SUCH
      ACT OR, AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY
      SATISFACTORY TO COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
      SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

     

    ________________________________________

     

     

    BLUEGATE
      CORPORATION

    701
      NORTH
      POST OAK ROAD

    SUITE
      600

    HOUSTON,
      TEXAS 77024

    

    STOCK
      PURCHASE WARRANT

    

    

    
      	
              Warrant
                No.:  PP(4) – 3

            	 	
              Right
                to Purchase:  1,000,000 common shares

            
	
              Date:  July
                12, 2007

            	 	 

    

    

    THIS
      CERTIFIES THAT, for value received, Manfred Sternberg (the “Holder”), is
      entitled to purchase from BLUEGATE CORPORATION, a Nevada corporation (the
“Company”), at any time from July 12, 2007 until 5:00 p.m. (EST) on July 12,
      2012, 1,000,000 fully paid and non-assessable shares of the Company’s common
      stock, par value $0.001 per share (“Common Stock”), at an exercise price of
      $0.17 per share, as adjusted.

    

    1.        
          The Company is issuing this Warrant to the Holder
      pursuant to a private placement and Subscription Agreement dated July 12,
      2007.  This Warrant constitutes part of a unit subscribed to by the
      Holder in the Subscription Agreement.

    

    2.          
        (a)           To
      exercise this Warrant or any part of this Warrant, the Holder must deliver
      to
      the Company (collectively, the “Exercise Documentation”): (i) a completed
      exercise agreement a form of which is attached; (ii) this Warrant; and (iii)
      a
      check payable to the Company in an amount equal to the product of the exercise
      price and the number of shares the Holder desires to purchase.  The
      Company will, without charge, issue certificates for shares of Common Stock
      purchased upon exercise of this Warrant within five days after receipt of the
      Exercise Documentation.  Unless this Warrant has expired, or all of
      the purchase rights represented by this Warrant have been exercised, the Company
      will also prepare a new Warrant, substantially identical to this Warrant,
      representing the rights formerly represented by this Warrant which have not
      expired or been exercised.

     

    (b)           If,
      but only if, at any time after one year from the date of issuance of this
      Warrant there is no effective registration statement registering the resale
      of
      the Common Stock underlying this Warrant by the Holder, this Warrant may also
      be
      exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a certificate for the number
      of
      shares of Common Stock equal to the quotient obtained by dividing [(A-B) (X)]
      by
      (A), where:

    

    
      	
            	
              (A)
                =

            	
              the
                closing bid price on the trading day preceding the date of such
                election;

            

    

    

    
      	
            	
              (B)
                =

            	
              the
                Exercise Price of the Warrants, as adjusted;
                and

            

    

    

    
      	
            	
              (X)
                =

            	
               the
                number of shares of Common Stock issuable upon exercise of the Warrants
                in
                accordance with the terms of this
                Warrant.

            

    

    

    3.        
          The Company will at all times reserve and keep available
      for issuance upon the exercise of this Warrant such number of its authorized
      but
      un-issued shares of Common Stock as will be sufficient to permit the exercise
      in
      full of this Warrant, and upon such issuance such shares of Common Stock will
      be
      validly issued, fully paid and non-assessable.

    

    4.      
            This Warrant does not and will not entitle
      the Holder to any voting rights or other rights as a stockholder of the
      Company.

     

    5.        
          Certain Adjustments.

     

    (a)           Stock
      Splits, etc. The number and kind of securities purchasable upon the exercise
      of this Warrant and the exercise price shall be subject to adjustment from
      time
      to time upon the happening of any of the following.  In case the
      Company shall (i) pay a dividend in shares of Common Stock or make a
      distribution in shares of Common Stock to holders of its outstanding Common
      Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
      number of shares, (iii) combine its outstanding shares of Common Stock into
      a
      smaller number of shares of Common Stock, or (iv) issue any shares of its
      capital stock in a reclassification of the Common Stock, then the number of
      shares purchasable upon exercise of this Warrant immediately prior thereto
      shall
      be adjusted so that the Holder shall be entitled to receive the kind and number
      of shares or other securities of the Company which it would have owned or have
      been entitled to receive had such Warrant been exercised in advance
      thereof.  Upon each such adjustment of the kind and number of shares
      or other securities of the Company which are purchasable hereunder, the Holder
      shall thereafter be entitled to purchase the number of shares or other
      securities resulting from such adjustment at an exercise price per share or
      other security obtained by multiplying the exercise price in effect immediately
      prior to such adjustment by the number of shares purchasable pursuant hereto
      immediately prior to such adjustment and dividing by the number of shares or
      other securities of the Company resulting from such adjustment.  An
      adjustment made pursuant to this paragraph shall become effective immediately
      after the effective date of such event retroactive to the record date, if any,
      for such event.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Pro
      Rata Distributions.  If the Company, at any time prior to the
      termination date of this Warrant, shall distribute to all holders of Common
      Stock (and not to Holders of the Warrants) evidences of its indebtedness or
      assets or rights or warrants to subscribe for or purchase any security other
      than the Common Stock (which shall be subject to the above section), then in
      each such case the exercise price of this Warrant shall be adjusted by
      multiplying the exercise price in effect immediately prior to the record date
      fixed for determination of stockholders entitled to receive such distribution
      by
      a fraction of which the denominator shall be the closing bid price determined
      as
      of the record date mentioned above, and of which the numerator shall be such
      closing bid price on such record date less the then per share fair market value
      at such record date of the portion of such assets or evidence of indebtedness
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith.  In either case
      the adjustments shall be described in a statement provided to the Holders of
      the
      portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock.  Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective immediately after the record date mentioned above.

    

    (c)           Reorganization,
      Reclassification, Merger, Consolidation or Disposition of
      Assets.  In case the Company shall reorganize its capital,
      reclassify its capital stock, consolidate or merge with or into another
      corporation (where the Company is not the surviving corporation or where there
      is a change in or distribution with respect to the Common Stock of the Company),
      or sell, transfer or otherwise dispose of all or substantially all its property,
      assets or business to another corporation and, pursuant to the terms of such
      reorganization, reclassification, merger, consolidation or disposition of
      assets, shares of common stock of the successor or acquiring corporation, or
      any
      cash, shares of stock or other securities or property of any nature whatsoever
      (including warrants or other subscription or purchase rights) in addition to
      or
      in lieu of common stock of the successor or acquiring corporation (“Other
      Property”), are to be received by or distributed to the holders of Common
      Stock of the Company, then the Holder shall have the right thereafter to receive
      upon exercise of this Warrant, the number of shares of Common Stock of the
      successor or acquiring corporation or of the Company, if it is the surviving
      corporation, and Other Property receivable upon or as a result of such
      reorganization, reclassification, merger, consolidation or disposition of assets
      by a holder of the number of shares of Common Stock for which this Warrant
      is
      exercisable immediately prior to such event.  In case of any such
      reorganization, reclassification, merger, consolidation or disposition of
      assets, the successor or acquiring corporation (if other than the Company)
      shall
      expressly assume the due and punctual observance and performance of each and
      every covenant and condition of this Warrant to be performed and observed by
      the
      Company and all the obligations and liabilities hereunder, subject to such
      modifications as may be deemed appropriate (as determined in good faith by
      resolution of the Board of Directors of the Company) in order to provide for
      adjustments of shares for which this Warrant is exercisable which shall be
      as
      nearly equivalent as practicable to the adjustments provided for in this
      Section.  For purposes of this Section, “common stock of the successor
      or acquiring corporation” shall include stock of such corporation of any class
      which is not preferred as to dividends or assets over any other class of stock
      of such corporation and which is not subject to redemption and shall also
      include any evidences of indebtedness, shares of stock or other securities
      which
      are convertible into or exchangeable for any such stock, either immediately
      or
      upon the arrival of a specified date or the happening of a specified event
      and
      any warrants or other rights to subscribe for or purchase any such
      stock.  The foregoing provisions of this Section shall similarly apply
      to successive reorganizations, reclassifications, mergers,consolidations or
      disposition of assets.

    

    (d)           Dilutive
      Issuances. If and whenever the Company issues or sells any shares of Common
      Stock (or any Common Stock equivalents such as convertible securities or
      warrants or options) for an effective consideration per share on a weighted
      average basis of less then the Common Stock Exercise Price or for no
      consideration (such lower price, the “Base Share Price” and such issuances
      collectively, a “Dilutive Issuance”), then, the Common Stock Exercise Price
      shall be reduced to equal the Base Share Price, provided, that for purposes
      hereof, all shares of Common Stock that are issuable upon conversion, exercise
      or exchange of Common Stock equivalents shall be deemed outstanding immediately
      after the issuance of such Common Stock equivalents. Such adjustment shall
      be
      made whenever such shares of Common Stock or Capital Share Equivalents are
      issued.

     

    6.            
      Whenever the number of shares or number or kind of securities or other property
      purchasable upon the exercise of this Warrant or the exercise price is adjusted,
      as herein provided, the Company shall give notice thereof to the Holder, which
      notice shall state the number of shares (and other securities or property)
      purchasable upon the exercise of this Warrant and the exercise price of such
      shares (and other securities or property) after such adjustment, setting forth
      a
      brief statement of the facts requiring such adjustment and setting forth the
      computation by which such adjustment was made.

     

    7.         
         Notice of Corporate Action.  If at any
      time:

    

    (a)           the
      Company shall take a record of the holders of its Common Stock for the purpose
      of entitling them to receive a dividend or other distribution, or any right
      to
      subscribe for or purchase any evidences of its indebtedness, any shares of
      stock
      of any class or any other securities or property, or to receive any other right,
      or

    

    (b)           there
      shall be any capital reorganization of the Company, any reclassification or
      recapitalization of the capital stock of the Company or any consolidation or
      merger of the Company with, or any sale, transfer or other disposition of all
      or
      substantially all the property, assets or business of the Company to, another
      corporation or,

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           there
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company; then, in any one or more of such cases, the Company shall give
      to
      Holder (i) at least 20 days’ prior written notice of the date on which a record
      date shall be selected for such dividend, distribution or right or for
      determining rights to vote in respect of any such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      liquidation or winding up, and (ii) in the case of any such reorganization,
      reclassification, merger, consolidation, sale, transfer, disposition,
      dissolution, liquidation or winding up, at least 20 days’ prior written notice
      of the date when the same shall take place.  Such notice in accordance
      with the foregoing clause also shall specify (i) the date on which any such
      record is to be taken for the purpose of such dividend, distribution or right,
      the date on which the holders of Common Stock shall be entitled to any such
      dividend, distribution or right, and the amount and character thereof, and
      (ii)
      the date on which any such reorganization, reclassification, merger,
      consolidation, sale, transfer, disposition, dissolution, liquidation or winding
      up is to take place and the time, if any such time is to be fixed, as of which
      the holders of Common Stock shall be entitled to exchange their shares for
      securities or other property deliverable upon such disposition, dissolution,
      liquidation or winding up.  Each such written notice shall be
      sufficiently given if addressed to Holder at the last address of Holder
      appearing on the books of the Company and delivered in accordance with Section
      7.

    

    8.       
          The construction, validity and interpretation of this
      Warrant will be governed by the laws of the State of  Texas and the
      Holder consents to the exclusive jurisdiction of, and venue in, the state courts
      in  Harris County in the State of Texas (or in the event of exclusive
      federal jurisdiction, the courts of the  Southern District of
      Texas).

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested
      by its duly authorized officers under its corporate seal.

    

    
      	
              BLUEGATE
                CORPORATION 

            	 	
              ATTEST:

            	 	 
	 	 	 	 	 	 
	
              By:

            	  
              	 	 	  
              	 
	
              Name:  Stephen
                J. Sperco 

            	 	
              Secretary 

            	 
	
              Title:   Chief
                Executive Officer 

            	 	 	 	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT

     

    EXERCISE
      AGREEMENT

    

    
      	
              To:

            	
              Bluegate
                Corporation

            

    

    

    (1)      The
      undersigned hereby elects to purchase ________ shares of Bluegate Corporation.
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

    (2)      Payment
      shall take the form of (check applicable box):

     

    o
      in lawful money of the
      United States; or

     

    o
      the cancellation of
      such number of shares as is necessary, in accordance with the formula set forth
      in subsection 2(b), to exercise this Warrant with respect to the maximum number
      of Warrant Shares purchasable pursuant to the cashless exercise procedure set
      forth in subsection 2(b).

     

    (3)      Please
      issue a certificate or certificates representing said shares in the name of
      the
      undersigned or in such other name as is specified below:

     

    
      	 	  
              	 

    

    

    

    The
      shares shall be delivered to the following:

    

    
      	 	  
              	 
	 	 	 
	 	  
              	 
	 	  
              	 
	 	  
              	 

    

    

    
      	 	 	 	 	 	 
	 	 	
              [HOLDER] 

            	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	
              By:

            	   
              	 
	 	 	 	
              Name:

            	 	 
	 	 	 	
              Title:

            	 	 
	 	 	 	 	 	 
	 	 	Dated:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]