Document:

ex10_20.htm

    
      
        

      

      Exhibit
        10.20        Warrant Agreement of
        William Koehler

      
        

        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) – 5

                	 	
                  Right
                    to Purchase:  250,000 common shares

                
	
                  Date:  July
                    12, 2007

                	 	 

        

        

        THIS
          CERTIFIES THAT, for value received, William E. Koehler (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, 250,000 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.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        (c)           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):

         

         ̈
          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:Unassociated Document

    
      
        

      

    

    Exhibit
      10.21    Warrant Agreement of
      Albert Koehler

    

    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.

     

    ________________________________________

     

     

    BLUEGATECORPORATION

    

    701
      NORTH
      POST OAK ROAD

    SUITE
      600

    HOUSTON,
      TEXAS 77024

    

    STOCK
      PURCHASE WARRANT

    

                                                                                                           
      
        	Warrant
                No.:  PP(4) – 6    	Right
                to Purchase:  250,000 common
                shares

      

    

    Date:  July
      12, 2007

    

    THIS
      CERTIFIES THAT, for value received, Albert Koehler (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, 250,000
      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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (d)           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):

            

    

     

    oin
      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:

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