Document:

entest_ex10-1.htm

Exhibit 10.1

 

 

Agreement by and between David R. Koos and Entest BioMedical Inc. (“Agreement”)

 

WHEREAS, Entest BioMedical, Inc. (“ENTB”), a Nevada Corporation, wishes to  secure the services of David R. Koos (“Koos”) as  ENTB’s  President and Chief Executive Officer (“CEO”)  

 

THEREFORE, it is agreed as follows:

 

As consideration for entering into this Agreement, Koos shall be issued 2,000,000 of ENTB’s Common Stock (“Stock”) under the following terms and conditions:

 

	
  
	
A)
	
In the event that Koos voluntarily resigns as either President or CEO of ENTB prior to a date that is six months from issuance (“Vesting Date”) the Stock shall be returned to the Corporation.

 

	
  
	
B)
	
Koos will not offer to sell, sell, transfer, pledge or otherwise dispose of the Bonus Shares prior to the Vesting Date 

 

The terms and conditions of this Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action to enforce this Agreement shall be brought in the state courts located in San Diego County, State of California.

 

AGREED TO BY:

 

	
ENTB
	
KOOS

	  	  
	
By: /s/David R. Koos
	
 /s/David R. Koos

	  	  
	
Name: David R. Koos
	  
	
Its: Chairman & CEO
	  
	  	  
	  	  
	
Date: August 8, 2009
	
Date: August 8, 2009ex10-1.htm

    
      Exhibit
10.1

      ASSET SALE AND PURCHASE AGREEMENT

      

      THIS
ASSET SALE AND PURCHASE AGREEMENT (“Agreement”) is made and entered into to be
effective the Seventh (7th) day
of November, 2009 (“Effective Date”) and to be fully completed as of the
Thirty-First (31st) day
of December, 2009 (“Completion Date”) by and between Bluegate Corporation, a Nevada
corporation (“Bluegate” or the “Seller”), and Sperco, LLC, a Texas
corporation (“Purchaser”).

      

      WHEREAS,
for the purchase price provided for herein and subject to the terms, provisions,
and conditions set forth herein, Purchaser desires to acquire from Seller full
right, title, and interest in and to all of the personal property of every kind
or nature used in the Medical Grade Network (“MGN”) operations of Seller (the
“Assets”), including, without limitation, the personal property that is more
fully described in Article One below but not including the “Excluded Assets” as
defined hereinafter, free and clear of any security interest, lien, mortgage,
encumbrance, claim, or limitation or restriction on the transfer thereof
(collectively, “Encumbrances”); and

      

      WHEREAS,
for the purchase price provided for herein and subject to the terms, provisions,
and conditions set forth herein, Seller desires to sell the Assets to
Purchaser;

      

      NOW,
THEREFORE, in consideration of the mutual promises, covenants, agreements,
representations, and warranties set forth hereinafter, and other good and
valuable consideration (the receipt, adequacy, and sufficiency of which each of
Seller and Purchaser hereby acknowledges) and subject to the terms, provisions,
and conditions hereof, each of Seller and Purchaser hereby agree as
follows:

      

      ARTICLE ONE

      
        	
                1  

              	
                Sale and Purchase of
      Assets.

              

      

      
        	
                1.1  

              	
                In
      consideration of Purchase Price pursuant to Section 1.3 below, Seller does
      hereby assign, transfer, and convey to Purchaser (without any further act
      or deed except as otherwise indicated herein), full right, title, and
      interest in and to all of the Assets, and Purchaser does hereby acquire
      and receive full right, title, and interest in and to the Assets, wherever
      located and regardless of whether or not reflected on Seller's books and
      records, free and clear of any Encumbrances.  Without any
      limitation on anything stated above, the Assets consist of all of the
      following:

              

      

      
        	
                1.1.1  

              	
                       
      The machinery, equipment, computer equipment and systems, telephony
      systems, appliances, fixtures, furniture, furnishings, and other tangible
      personal property owned by Seller, including, without limitation, those
      items listed on Schedule 1.1.1
hereto;

              

      

      
        	
                1.1.2  

              	
                All inventories of raw
      materials, work-in-process, finished products, supplies, tools, spare
      parts, and shipping containers and materials, held for use in Seller's
      business, including, without limitation, those items listed on Schedule
      1.1.2 hereto;

              

      

      
        	
                1.1.3  

              	
                All rights of Seller in, to and
      under any and all contracts, agreements, commitments, leases, licenses,
      and franchises (including, without limitation, those pertaining to
      suppliers, customers, employees, equipment, and motor vehicles), to which
      the MGN operations of Seller are a party or the Assets are subject,
      including, without limitation, those items listed on Schedule l.l.3
      hereto;

              

      

      
        	
                1.1.4  

              	
                All cash, cash equivalents,
      deposits in transit and interests in bank accounts of Seller, all accounts
      receivable owed to Seller (the “Accounts Receivable”), and all bills,
      notes, and securities of Seller, as of the Effective Date as provided for
      hereby and listed on Schedule 1.1.4
hereto;

              

      

      
        	
                1.1.5  

              	
                Seller's computer programs and
      software, including, without limitation, those items listed on Schedule
      1.1.5 hereto;

              

      

      
        	
                1.1.6  

              	
                All telephone and facsimile
      numbers (local and toll free), all internet domain sites, all E-Mail,
      internet and website addresses, and all mailboxes and lockboxes used by
      Seller, including, without limitation, those items listed on Schedule
      l.1.6 hereto;

              

      

      
        	
                1.1.7  

              	
                To the extent that they may be
      lawfully transferred, Seller's licenses, permits, certificates of
      authority, variances, authorizations, approvals, registrations,
      franchises, and similar consents granted or issued by any governmental
      authority (including applications for any of the preceding) denoted as
      transferable on Schedule 1.1.7
hereto;

              

      

      
        	
                1.1.8  

              	
                All records of Seller's MGN
      operations in whatever form (copies of which Seller may retain at its
      cost), including accounting records, property records, personnel records,
      and credit records, and all of Seller's MGN Operations customer lists,
      supplier lists, catalogs, and brochures;
and

              

      

      
        	
                1.1.9  

              	
                All of Seller's Intellectual
      Property (as defined in Section 2.8), and any and all other intangible
      property or rights whatsoever owned by Seller and the goodwill of Seller's
      business symbolized by such Intellectual Property (in connection with the
      transfer of the preceding, Seller executed all additional transfer
      documents requested by Purchaser) including, without limitation, those
      items listed on Schedule l.l.9
hereto.

              

      

      
        	
                1.2  

              	
                Excluded
      Assets. Seller is not selling to Purchaser, and Purchaser is not
      acquiring, any of the items listed on Schedule 1.2 hereto, which items
      shall not constitute “Assets” for any purpose
  hereof.

              

      

      
        	
                1.3  

              	
                Purchase Price, and
      Payment. Adjustment and Allocation
  Thereof.

              

      

      
        	
                1.3.1  

              	
                The aggregate purchase price
      for the Assets (the “Purchase Price”) shall be composed of: (i) a cash
      payment of One Hundred Thousand Dollars ($100,000), and (ii) a One Hundred
      Thousand Dollar ($100,000) reduction of the secured portion of the SAI
      Corporation Promissory Note to
Bluegate.

              

      

      
        	
                1.3.2  

              	
                The parties agree that the cash
      portion of the Purchase Price will be adjusted to reflect a true-up of the
      accounts as of the Effective Date with a final reconciliation of the
      Operating Accounts associated with the transaction being completed by
      December 31, 2009.  More specifically, the accounts for both
      Purchaser and Seller will be adjusted to reflect both pre-payments and
      work not yet billed to arrive at a net change (positive or negative) to
      the actual amount of cash paid by
Purchaser.

              

      

      
        	
                1.3.3  

              	
                Seller and Purchaser agree that
      they shall prepare and file their respective federal and any state or
      local income tax returns, and any sales tax returns or other
      filings.

              

      

      
        	
                1.4  

              	
                Assumed
      Liabilities. Purchaser hereby agrees to assume and be obligated to
      pay, perform or discharge only those liabilities that are expressly set
      forth on Schedule 1.4 hereto, if any (referred to hereinafter as the
      “Assumed Liabilities”).  Purchaser assumes no obligations,
      liabilities and debts other than the Assumed
      Liabilities.  Seller agrees to pay or perform timely any and all
      obligations, liabilities, and debts of Seller other than for the Assumed
      Liabilities.

              

      

      
        	
                1.5  

              	
                Consents.  Seller
      shall use its best efforts to obtain any third party consents necessary to
      sell the Assets to Purchaser.  To the extent that any of the
      Assets are not assignable without the consent of another party and such
      consent has not been obtained on or prior to the date hereof, such Assets
      shall not be assigned or attempted to be assigned if such assignment or
      attempted assignment would constitute a breach thereof.  While
      Seller is trying to procure all necessary consents, Seller and Purchaser
      shall cooperate in any reasonable arrangements designed to provide to
      Purchaser the benefits of any such Assets, including enforcement at the
      cost and for the account of Purchaser of any and all rights of Seller
      against the other party thereto arising out of a cancellation or breach by
      such other party or otherwise.  If any consent necessary to sell
      the Assets to Purchaser is obtained after the date of this Agreement, then
      the related Asset not previously assigned pursuant to this Section 1.5
      shall be immediately assigned upon procurement of such consent without any
      further act or deed.

              

      

      
        	
                1.6  

              	
                Seller's
      Deliveries.  Prior to or on the Completion Date hereof,
      Seller delivered:

              

      

      
        	
                a.  

              	
                Such deeds, bills of sale,
      covenants of warranty, assignments, endorsements, consents, and other good
      and sufficient instruments and documents of conveyance and transfer in a
      form satisfactory to Seller and Purchaser, and necessary documents of
      title, as shall be necessary and effective to convey, transfer and assign
      to, and vest in, Purchaser all of Seller's right, title and interest in
      and to the Assets;

              

      

      
        	
                b.  

              	
                Evidence satisfactory to
      Purchaser that any and all security interests and liens on the Assets
      (other than those being assumed) have been
  released;

              

      

      
        	
                c.  

              	
                Copies of all required third
      party consents to the sale of the Assets, that are required and have been
      obtained;

              

      

      
        	
                d.  

              	
                All of the agreements,
      contracts, commitments, leases, plans, bids, quotations, proposals,
      licenses, permits, authorizations, instruments, computer programs and
      software, manuals and guidebooks, price books and price lists, customer
      lists, supplier lists, sales records, files, correspondence, and other
      documents, books, records, papers, files and data belonging to Seller
      which are part of the Assets; and

              

      

      
        	
                e.  

              	
                Actual possession and operating
      control of the Assets.

              

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        	
                1.7  

              	
                Purchaser's
      Deliveries. Prior to or by November 11, 2009, Purchaser
      delivered:

              

      

      
        	
                a.  

              	
                The
      cash amount of the Purchase Price (adjustments to be completed by the
      Completion Date), and

              

      

      
        	
                b.  

              	
                Written
      notice that the secured portion of the SAI Corporation Promissory Note has
      been reduced by One Hundred Thousand Dollars
  ($100,000).

              

      

       

      ARTICLE TWO

      
        	
                2  

              	
                Representations,
      Warranties, and Agreements of
Seller.

              

      

      Seller
hereby represents, warrants, and agrees to and with Purchaser that:

      
        	
                2.1  

              	
                Organization and
      Standing of Seller.   Seller’s a corporation duly
      organized, validly existing, and in good standing under the laws of the
      state of Nevada.  Seller has full requisite corporate power and
      authority to carry on its business as it is now being
      conducted.

              

      

      
        	
                2.2  

              	
                Capacity to Enter into
      Agreement.  Seller has full right, power, and authority
      to execute and deliver this Agreement and all other agreements, documents,
      and instruments to be executed in connection herewith and perform its
      obligations hereunder and thereunder.  The execution and
      delivery by Seller that is an entity of this Agreement and all other
      agreements, documents, and instruments to be executed by Seller in
      connection herewith have been authorized by all necessary entity action by
      Seller.  When this Agreement and all other agreements,
      documents, and instruments to be executed by Seller in connection herewith
      are executed by Seller and delivered to Purchaser, this Agreement and such
      other agreements, documents, and instruments will constitute the valid and
      binding agreements of Seller enforceable against Seller in accordance with
      their respective terms, except as such enforceability may be limited by or
      subject to:  (a) any bankruptcy, insolvency, reorganization,
      moratorium or other similar laws relating to creditors' rights generally,
      and (b) general principles of equity (regardless of whether such
      enforceability is considered in a proceeding in equity or at
      law).

              

      

      
        	
                2.3  

              	
                Conflicts.  The
      execution, delivery, and consummation of the transactions contemplated by
      this Agreement will not:  (a) violate, conflict with, or result
      in the breach or termination of, or otherwise give any other contracting
      party the right to terminate, or constitute a default (by way of
      substitution, novation or otherwise) under the terms of, any contract to
      which Seller is a party or by which Seller is bound or by which any of the
      assets of Seller is bound or affected, (b) violate any judgment against,
      or binding upon, Seller or upon the assets of Seller, (c) result in the
      creation of any lien, charge, or encumbrance upon any assets of Seller
      pursuant to the terms of any such contract, or (d) violate any provision
      in the charter documents, bylaws, or any other agreement affecting the
      governance and control of Seller.

              

      

      
        	
                2.4  

              	
                Consents.  No
      consent, approval, or authorization of, or declaration, filing or
      registration with, any governmental or regulatory authority or any court
      or other tribunal, and no consent or waiver of any party to any material
      contract to which Seller is a party or is bound is required to be obtained
      by Seller in connection with the execution, delivery, and performance of
      this Agreement by Seller, such that the failure to obtain or make any such
      consent, approval, authorization, declaration, filing, or registration
      would materially adversely affect the consummation of the transactions
      contemplated by this Agreement.

              

      

      
        	
                2.5  

              	
                Assets.  Each
      of the schedules referenced in Section 1.1 is true, correct and complete
      in all material respects as of the date hereof (or if different, as of the
      date set forth thereon).

              

      

      
        	
                a.  

              	
                Seller
      has, and upon the sale of the Assets to Purchaser, Purchaser will receive,
      good and indefeasible title to all of the Assets, free and clear of all
      Encumbrances, except liens for current taxes not yet due and
      payable;

              

      

      
        	
                b.  

              	
                All Assets constituting tangible
      personal property are in a good state of repair and operating condition,
      ordinary wear and tear excepted;
and

              

      

      
        	
                c.  

              	
                All of the Accounts Receivable
      reflected Schedule 1.1.4 hereto or created thereafter are valid,
      subsisting, and genuine, arose out of bona fide transactions and are
      current and collectible.

              

      

      
        	
                2.6  

              	
                Contracts.  Schedule
      1.1.3 contains a true, correct and complete list of Seller's contracts,
      agreements, commitments, and leases, whether or not made in the ordinary
      course of business.

              

      

      
        	
                a.  

              	
                All
      leases, contracts, agreements, arrangement, or commitments to which Seller
      is a party or the Assets are subject are in good standing, valid, and
      effective; and

              

      

      
        	
                b.  

              	
                There
      is not, under any such lease, contract, agreement, arrangement, or
      commitment, any existing or prospective default or event of default by
      Seller or event which with notice or lapse of time, or both would
      constitute a default; and, to Seller's best knowledge, no other party to
      any such lease, contract, agreement, arrangement, or commitment, is in
      default or breach thereof nor has any event occurred which with notice or
      lapse of time would constitute a breach or default of any of such lease,
      contract, agreement, arrangement, or
commitment.

              

      

      
        	
                2.7  

              	
                Permits.  Schedule
      1.1.7 contains a true, correct and complete list of Seller's licenses,
      permits, and authorizations.

              

      

      
        	
                a.  

              	
                Seller
      holds all licenses, permits, and authorizations required to carry on its
      business, and all such licenses, permits and authorizations are in good
      standing;

              

      

      
        	
                b.  

              	
                Seller
      is in full compliance with and not in default or violation with respect to
      any term or provision of any of its licenses, permits, and
      authorizations;

              

      

      
        	
                c.  

              	
                Seller
      has received no notice of pending, threatened, or possible violation or
      investigation in connection with, or loss of, any license, permit, or
      authorization of Seller;

              

      

      
        	
                d.  

              	
                To
      Seller’s best knowledge, no issuance of such notice is being considered,
      and no facts or circumstances exist which could form the basis for the
      issuance of such a notice; and

              

      

      
        	
                e.  

              	
                No
      license, permit, or authorization of Seller is affected by the
      transactions provided for herein or contemplated
  hereby.

              

      

      
        	
                2.8  

              	
                       
      Intellectual
      Property. Schedule 1.1.9 contains a listing and summary description
      of all of Seller's patents, trademarks, service marks, trade names, trade
      dress, logos, business names, copyrights, and registered designs, and
      registrations and applications thereof, trade secrets and confidential
      know-how, business information and other intellectual property, including,
      but not limited to, computer software, databases, source code, and
      documentation; product formulations; drawings; technical specifications;
      manufacturing data; and test and development data (the foregoing
      intellectual property is collectively referred to hereinafter. as the
      “Intellectual Property”).

              

      

      
        	
                a.  

              	
                The MGN Operations possesses all
      intellectual property necessary to the conduct of its
      businesses;

              

      

      
        	
                b.  

              	
                Purchaser shall receive a
      non-exclusive, royalty free, fully paid, perpetual, irrevocable license to
      use and copy the Intellectual Property of Seller (excluding access to the
      TTG related Intellectual Property);

              

      

        
c.  Seller
owns all right, title, and interest in and to all of the Intellectual
Property;

      
        	
                d.  

              	
                There have been no claims made
      against Seller for the assertion of the invalidity, abuse, misuse, or
      unenforceability of any Intellectual Property, and there are no grounds
      for the same;

              

      

      
        	
                e.  

              	
                Seller has not has received a
      notice of conflict with the asserted rights of others;
  and

              

      

      
        	
                f.  

              	
                The conduct of the MGN
      Operation's business has not infringed on any rights of others and, to
      Seller's best knowledge, no other person has infringed the Intellectual
      Property.

              

      

      
        	
                2.9  

              	
                   Employees.  The
      term “Employees” shall represent all employees of Seller at the time of
      the Effective Date.

              

      

      
        	
                a.  

              	
                Seller
      is not a party as an employer to any employment contract, agreement or
      understandings with the Employees;
and

              

      

      
        	
                b.  

              	
                For
      the Employees, Seller has satisfied (or has made adequate provision for)
      all salaries, wages, unemployment insurance premiums, worker compensation
      payments, income tax, FICA, and other deductions and any like payments
      required by law through and with respect to periods through the Effective
      Date.

              

      

      
        	
                c.  

              	
                For
      the Employees, Seller will satisfy (or will make adequate provision for)
      all salaries, wages, unemployment insurance premiums, worker compensation
      payments, income tax, FICA, and other deductions and any like payments
      required by law through and with respect to periods through the Completion
      Date.

              

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        	
                2.10  

              	
                Litigation.

              

      

      
        	
                a.  

              	
                Seller
      and the Assets are not subject to any pending, or to Seller's best
      knowledge, threatened litigation, proceeding or administrative
      investigation of any kind or nature (including, without limitation, any
      matter (including audits) involving the Internal Revenue Service, or other
      federal or state taxing
authorities);

              

      

      
        	
                b.  

              	
                Seller
      is not in default with respect to any judgment, order, writ, injunction,
      decree, or award applicable to it or the Assets of any court or other
      governmental instrumentality or arbitrator;
and

              

      

      
        	
                c.  

              	
                Seller
      has not been served with any now pending suit, action, or legal,
      administrative, arbitration, or other proceeding or governmental
      investigation in which an unfavorable decision, ruling, or finding would
      render unlawful or otherwise materially adversely affect the consummation
      of the transactions contemplated by this Agreement, and to the Seller's
      best knowledge, no such suit, action, or legal, administrative,
      arbitration, or other proceeding or governmental investigation has been
      instituted or is threatened.

              

      

      
        	
                2.11  

              	
                Compliance with
      Law.  Seller is not in violation of, or in default with
      respect to, or in alleged violation of or alleged default with respect to,
      any applicable law, rule, regulation, permit, or any writ or decree of any
      court or any governmental commission, board, bureau, agency, or
      instrumentality, including without limitation, any laws, ordinances,
      rules, regulations, permits, or orders relating to the MGN business of
      Seller, or the business operations and practices, health and safety, and
      employment practices of Seller.  Seller has filed, when due,
      with all appropriate governmental agencies, all tax returns, estimates,
      reports, and statements to be filed by it for the MGN related operations
      (collectively, the “Returns”).  Each of the Returns is true,
      complete, proper, and accurate in all
respects.

              

      

      
        	
                2.12  

              	
                Taxes.  Seller
      has filed, when due, with all appropriate governmental agencies, all tax
      returns, estimates, reports, and statements to be filed by it for the MGN
      related operations (collectively, the “Returns”).  For the MGN
      related operations:

              

      

      
        	
                a.  

              	
                Each
      of the Returns is true, complete, proper, and accurate in all
      respects;

              

      

      
        	
                b.  

              	
                Seller
      has paid, when due and payable, all requisite income taxes, sales, use,
      property and transfer taxes, levies, duties, licenses and registration
      fees, and charges of any nature whatsoever and workers' compensation and
      unemployment taxes, including interest and penalties
    thereon;

              

      

      
        	
                c.  

              	
                Seller
      has withheld all tax required to be withheld under applicable tax laws and
      regulations, and such withholdings have either been paid to the respective
      governmental agencies or set aside in accounts for such
      purpose;

              

      

      
        	
                d.  

              	
                Seller
      has not given or been requested to give, or executed, any extension of
      time or waiver of any statute of limitations with respect to Federal,
      state, or other political subdivision income or other tax for any
      period;

              

      

      
        	
                e.  

              	
                Seller
      has not received any notice of deficiency or assessment issued or proposed
      deficiency or assessment by the Internal Revenue Service or any other
      taxing authority; and

              

      

      
        	
                f.  

              	
                There
      is no pending audit or inquiry of Seller, nor has Seller received any oral
      or written notice of any proposed audit or inquiry by any taxing authority
      or jurisdiction.

              

      

      
        	
                2.13  

              	
                Finder's
      Fees.  Neither Seller nor anyone acting on its behalf has
      employed any financial advisor, broker, or finder or incurred any
      liability for any financial advisory, brokerage, or finder's fee, or
      commission in connection with this Agreement or the transactions
      contemplated hereby.

              

      

      
        	
                2.14  

              	
                Untrue
      Statements.  This Agreement, the schedules, and exhibits
      hereto, and all other documents and information furnished by Seller or its
      representatives pursuant hereto or in connection herewith do not include
      any untrue statement of a material fact or omit to state any material fact
      that is necessary to make the statements made herein and therein not
      misleading.

              

      

       

      ARTICLE THREE

      
        	
                3  

              	
                Representations,
      Warranties, and Agreements of
Purchaser

              

      

      
        	
                3.1  

              	
                Organization and
      Standing of Purchaser.  Purchaser is a corporation duly
      organized, validly existing and in good standing under the laws of the
      state of Texas.  Purchaser has full requisite power and
      authority to carry on its business.

              

      

      
        	
                3.2  

              	
                Capacity to Enter into
      Agreement.  Purchaser has full right, power and authority
      to execute and deliver this Agreement and all other agreements, documents,
      and instruments to be executed in connection herewith and perform its
      obligations hereunder and thereunder. The execution and delivery by
      Purchaser of this Agreement and all other agreements, documents, and
      instruments to be executed by Purchaser in connection herewith have been
      authorized by all necessary action by Purchaser.  When this
      Agreement and all other agreements, documents, and instruments to be
      executed by Purchaser in connection herewith are executed by Purchaser and
      delivered to Seller, this Agreement and such other agreements, documents,
      and instruments will constitute the valid and binding agreements of
      Purchaser or enforceable against Purchaser in accordance with their
      respective terms, except as such enforceability may be limited by or
      subject to:  (a) any bankruptcy, insolvency, reorganization,
      moratorium, or other similar laws relating to creditors' rights generally;
      and (b) general principles of equity (regardless of whether such
      enforceability is considered in a proceeding in equity or at
      law).

              

      

      
        	
                3.3  

              	
                 Conflicts.  The
      execution, delivery, and consummation of the transactions contemplated by
      this Agreement will not violate any provision in any charter document of
      Purchaser, or any other agreement affecting the governance and control of
      Purchaser, such that any such violation, conflict, breach, termination, or
      creation would materially adversely affect the consummation of the
      transactions contemplated by this
Agreement.

              

      

      
        	
                3.4  

              	
                Consents.  No
      consent, approval, or authorization of, or declaration, filing or
      registration with, any governmental or regulatory authority or any court
      or other tribunal, and no consent or waiver of any party to any material
      contract to which Purchaser is a party or is bound is required to be
      obtained by Purchaser in connection with the execution, delivery, and
      performance of this Agreement by Purchaser, such that the failure to
      obtain or make any such consent, approval, authorization, declaration,
      filing, or registration would materially adversely affect the consummation
      of the transactions contemplated by this
  Agreement.

              

      

      
        	
                3.5  

              	
                Litigation.  Purchaser
      has not been served with any now pending suit, action, or legal,
      administrative, arbitration, or other proceeding or governmental
      investigation in which an unfavorable decision, ruling, or finding would
      render unlawful or otherwise materially adversely affect the consummation
      of the transactions contemplated by this Agreement, and the best of
      Purchaser's knowledge, no such suit, action, or legal, administrative,
      arbitration, or other proceeding or governmental investigation has been
      instituted or is threatened.

              

      

      
        	
                3.6  

              	
                Finder's
      Fees.  Neither Purchaser nor anyone acting on its behalf
      has employed any financial advisor, broker, or finder or incurred any
      liability for any financial advisory, brokerage or finder's fee, or
      commission in connection with this Agreement or the transactions
      contemplated hereby.

              

      

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      ARTICLE FOUR

      
        	
                4  

              	
                Certain
      Agreements

              

      

      
        	
                4.1  

              	
                Further
      Assurances.  Following the Effective Date, each party
      shall execute and deliver such other documents, and take such other
      actions, as may be reasonably requested by the other party to vest in
      Purchaser full right title and interest in and to the Assets, to complete
      the transactions contemplated by this Agreement and to allow each party
      fully to enjoy and exercise the rights accorded to and acquired by it
      under this Agreement or any other agreement entered into pursuant
      hereto.

              

      

      
        	
                4.2  

              	
                Accounts
      Receivable.  Upon the request and at the expense of
      Purchaser, Seller shall use reasonable and its best efforts to assist
      Purchaser in collecting the Accounts Receivable.  In the event
      that Seller shall receive any payment on the Accounts Receivable, Seller
      shall hold the amount received in trust for the benefit of Purchaser and
      shall immediately remit to Purchaser the amount received in its
      entirety.  Seller shall not settle, compromise, or release (in
      whole or in part) any Accounts Receivable, or take any action or omit to
      take any action that would adversely affect the Accounts Receivable,
      without the prior written consent of
Purchaser.

              

      

      
        	
                4.3  

              	
                Employees.

              

      

      
        	
                4.3.1  

              	
                Seller shall pay to its
      employees all compensation, including salaries, commissions, bonuses,
      deferred compensation, severance, insurance, pensions, profit sharing,
      vacation pay, sick pay, and other compensation or benefits to which they
      are entitled for periods prior to the date of Purchaser hiring any of
      Seller’s employees.  Seller shall be responsible for maintenance
      and distribution of benefits accrued under any employee benefit plan (as
      defined in ERISA) maintained by Seller pursuant to the provisions of such
      plans.  Purchaser shall assume neither any liability for any
      such accrued benefits nor any fiduciary or administrative responsibility
      to account for or dispose of any such accrued benefits under any employee
      benefit plans maintained by Seller.

              

      

      
        	
                4.3.2  

              	
                On the date Seller terminates
      the employment relationship with such of its employees as Purchaser has
      expressed an interest in hiring, and Seller paid to each such employee any
      and all amounts due to them prior to or as a result of such termination
      that were not expressly assumed by Purchaser.  Purchaser is
      hereby expressly permitted by Seller to enter into an employment
      relationship with each of these former employees. Purchaser may, in its
      sole discretion, offer employment to any or all of the former employees of
      Seller.  All such persons so employed by Purchaser are referred
      to hereinafter as a “Hired
Employee.”

              

      

      
        	
                4.3.3  

              	
                All claims and obligations
      under, pursuant to, or in connection with any welfare, medical, insurance,
      disability, or other employee benefit plans of Seller or arising under any
      legal requirement applicable to Seller affecting employees of Seller
      incurred on or before the date of Purchaser’s hiring the Hired Employee or
      resulting or arising from events or occurrences occurring or commencing on
      or prior to that date shall remain the responsibility of Seller, whether
      or not such employees are hired by Purchaser after the Effective
      Date.  Purchaser shall have and assume no obligation or
      liability under or in connection with any such plan and, shall assume no
      obligation with respect to any pre-existing condition of any employee of
      Seller who is hired as an employee of
Purchaser.

              

      

      
        	
                4.3.4  

              	
                      Commencing
      with the day after the Effective Date, Purchaser will contract with Seller
      for support from the Seller’s employees at the rate listed on Schedule
      4.3.4.  At all times the relationship of Purchaser and Seller is
      that of independent contractor only and is not
      employer-employee.  It is expressly understood and agreed that
      Seller and Seller’s Staff shall perform services under the control of
      Purchaser as to the result of such services only, and not as to the means
      by which such result is accomplished.  Seller and Seller’s
      employees shall not be entitled to participate in programs, health plans
      or other benefits of Purchaser.  Purchaser shall have no
      obligation to pay or withhold any taxes or other amounts in respect of
      benefits with respect to Seller, Seller’s Staff or other
      employees.  Seller is not an agent of Purchaser and has no
      authority whatsoever to bind Purchaser by agreement of any
      kind.

              

      

      
        	
                4.4  

              	
                Publicity.  The
      parties hereto shall jointly prepare any press release or other public
      announcement relating to this Agreement, except that the foregoing shall
      not prevent any party hereto or any affiliate thereof from issuing any
      press release required by applicable
law.

              

      

       

      ARTICLE FIVE

      
        	
                5  

              	
                Survival and
      Indemnity

              

      

      
        	
                5.1  

              	
                Survival of
      Representations and Warranties.  All of the
      representations and warranties made by the parties hereto in this
      Agreement or pursuant hereto, shall be continuing and shall survive the
      closing hereof and the consummation of the transactions contemplated
      hereby, notwithstanding any investigation at any time made by or on behalf
      of any party hereto, for a period of two (2) years after the date of this
      Agreement.

              

      

      
        	
                5.2  

              	
                Indemnification by
      Seller.  Seller shall indemnify and hold harmless
      Purchaser and Purchaser's shareholders, directors, officers, employees,
      agents, affiliates, successors, and assigns from any and all demands,
      claims, actions, causes of actions, lawsuits, proceedings, judgments,
      losses, damages, injuries, liabilities, obligations, expenses, and costs
      (including costs of litigation and attorneys' fees), arising from any
      breach of any agreement, representation or warranty made by any of them in
      this Agreement.

              

      

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      ARTICLE SIX

      
        	
                6  

              	
                Miscellaneous

              

      

      
        	
                6.1  

              	
                Notices.  Any
      notices, requests, demands, or other communications herein required or
      permitted to be given shall be in writing and may be personally served,
      sent by United States mail, sent by an overnight courier who keeps proper
      records regarding its deliveries, faxed, or emailed. Notice shall be
      deemed to have been given if personally served, when served, or if mailed,
      on the third business day after deposit in the United States mail with
      postage pre-paid by certified or registered mail and properly addressed,
      or if sent by overnight courier as aforesaid with charges being billed to
      the sender, when received by the party being notified, or if faxed, when
      the person giving the notice receives a confirmation statement with all
      relevant details indicating that the fax was properly received, or if
      E-Mailed, when the person giving the notice receives a confirmation
      statement with all relevant details indicating that the E-Mail was
      properly received. As used in this Agreement, the term “business day”
      means days other than Saturday, Sunday, and holidays recognized by Federal
      banks.  For purposes of this Agreement, the physical addresses,
      fax numbers, and e-mail addresses of the parties hereto shall be the
      physical addresses, fax numbers, and e-mail addresses as set forth on the
      signature pages of this Agreement.  Any party to be notified
      hereunder may change its physical address, fax number, and e-mail address
      by notifying each other party hereto in writing as to the new physical
      address, fax number, and e-mail address for sending
    notices.

              

      

      
        	
                6.2  

              	
                Counterparts.  This
      Agreement may be executed in any number of counterparts and each such
      counterpart shall be deemed to be an original instrument, but all such
      counterparts together shall constitute but one and the same
      instrument.

              

      

      
        	
                6.3  

              	
                Amendments and
      Waivers.  This Agreement may be amended, modified, or
      superseded only by written instrument executed by all parties
      hereto.  Any waiver of the terms, provisions, agreements,
      covenants, representations, warranties, or conditions hereof shall be made
      only by a written instrument executed and delivered by the party waiving
      compliance.  The failure of any party at any time or times to
      require performance of any provision hereof shall in no manner affect the
      right to enforce the same.  No waiver by any party of any
      condition, or of the breach of any term, provision, agreements, covenant,
      representation, or warranty contained in this Agreement in one or more
      instances shall be deemed to be or construed as a further or continuing
      waiver of any such condition or breach or a waiver of any other condition
      or the breach of any other term, provision, agreements, covenant,
      representation, or warranty.

              

      

      
        	
                6.4
        

              	
                    Time of
      Essence.  Time is of the essence in the performance of
      this Agreement.

              

      

      
        	
                6.5  

              	
                 Captions.  The
      captions contained in this Agreement are solely for convenient reference
      and shall not be deemed to affect the meaning or interpretation of any
      Article, Section, or paragraph
hereof.

              

      

      
        	
                6.6  

              	
                Entire
      Agreement.  This Agreement (including the schedules and
      exhibits hereto, the Financial Statements, and all supporting agreements
      referred to herein, all of which are by this reference fully incorporated
      into this agreement) sets forth the entire agreement and understanding of
      the parties with respect to the transactions contemplated hereby, and
      supersedes all prior agreements, arrangements, and understandings relating
      to the subject matter hereof.

              

      

      
        	
                6.7  

              	
                Assignment, and
      Successors and Assigns.  No party hereto may assign any
      of its rights, interests, or obligations under this Agreement without the
      prior written consent of the other parties. Notwithstanding the preceding,
      Purchaser may assign all or part of this Agreement and its rights
      hereunder to a wholly-owned subsidiary or to a person who acquires
      substantially all of the assets of Purchaser and who assumes all of the
      obligations of Purchaser hereunder, provided in each such case that no
      such assignment shall release Purchaser from its duties and obligations
      hereunder.  All of the terms, provisions, agreements, covenants,
      representations, warranties, and conditions of this Agreement shall be
      binding upon and shall inure to the benefit of and be enforceable by the
      parties hereto and their respective heirs, legal representatives,
      permitted assigns, and successors.

              

      

      
        	
                6.8  

              	
                Knowledge, Gender, and
      Certain References.  Whenever a representation or
      warranty made herein is made to the best of any entity's knowledge, such
      representation or warranty is based only on the actual knowledge or belief
      of the entity's management without any independent investigation on the
      part of such management or any other person although such management has
      no reason to believe that the representation or warranty made was not true
      as of the date which it speaks.  Whenever from the context it
      appears appropriate, each term stated in either the singular or the plural
      shall include both the singular and the plural, and pronouns stated in the
      masculine or the neuter gender shall include the masculine, the feminine
      and the neuter gender.  The terms “hereof,” “herein,” or
      “hereunder” shall refer to this Agreement as a whole and not to any
      particular Article, Section, or paragraph
  hereof.

              

      

      
        	
                6.9  

              	
                Applicable Law,
      Mandatory Venue, and Draftsmanship. This Agreement has been
      executed in Harris County, Texas.  THIS AGREEMENT SHALL BE
      GOVERNED EXCLUSIVELY BY ITS TERMS AND BY THE LOCAL, INTERNAL LAWS OF THE
      STATE OF TEXAS.  The parties hereto stipulate and agree that the
      courts of the State of Texas shall have in personam jurisdiction for any
      claim, lawsuit, or proceeding regarding this Agreement, and that mandatory
      venue for any such claim, lawsuit, or proceeding shall be in any state or
      federal court having competent jurisdiction located in Harris County,
      Texas.  Each party hereto hereby acknowledges and agrees that it
      has consulted legal counsel in connection with the negotiation of this
      Agreement and that it has bargaining power equal to that of the other
      parties hereto in connection with the negotiation and execution of this
      Agreement.  Accordingly, the parties hereto agree that the rule
      of contract construction that an agreement shall be construed against the
      draftsman shall have no application in the construction or interpretation
      of this Agreement.

              

      

      
        	
                6.10  

              	
                Severability.  If
      any term, provision, agreements, covenant, or restriction of this
      Agreement is held by a court of competent jurisdiction to be invalid,
      void, or unenforceable, the remainder of the terms, provisions,
      agreements, covenants, and restrictions shall remain in full force and
      effect and shall in no way be affected, impaired, or
      invalidated.

              

      

      
        	
                6.11  

              	
                Costs, Expenses, and
      Fees.  Each party hereto agrees hereby to pay all costs,
      expenses, and fees incurred by it in connection with the transactions
      contemplated hereby, including, without limitation, all attorneys' and
      accountants' fees.

              

      

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first above
written.

      

      

      Bluegate
Corporation

      

      By: /s/ Charles E.
Leibold

             Charles
E. Leibold

             Chief
Financial Officer

      November 7, 2009

      cleibold@bluegate.com

      

      Sperco,
LLC

      

      By:  /s/ Stephen J.
Sperco

      Stephen J. Sperco

      President

      November 7, 2009

      ssperco@sperco.com

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      Schedule 1.1.1 - Lists Of
Machinery, Equipment And Other Tangible Personal Property

      Minolta
Di550 Copier, Desktop Computers (Machine, software, peripherals, etc.), Laser
Printers (B&W & Color), Servers, Network Switches, Routers, Firewalls,
etc., Laptop Computers (Machine, software, peripherals, etc.), Telephone
System(s), Tape Back-up & RAID systems, Cooling Equipment, CoLo related
equipment, Fax Machine(s), Kitchen Appliances, Furniture, Postage Meter,
Specialty Software, and other operations related items to be finalized by the
Completion Date in the reconciliation process.

      

      Schedule 1.1.2 –
Inventories, Supplies, Materials, Tools, etc.

      Computers,
software, switches, routers, firewalls, peripherals, etc. – To be finalized by
the Completion Date in the reconciliation process.

      

      Schedule 1.1.3 –
Contracts/Agreements Transferred from Seller

      Vendor
Agreements – To be finalized by the Completion Date in the reconciliation
process

      Client
Agreements – To be finalized by the Completion Date in the reconciliation
process.

      

      Schedule 1.1.4 – Accounts
Receivable Owed to MGN Operation going to Purchaser

      To be
finalized by the Completion Date in the reconciliation process.

      

      Schedule 1.1.5 – Computer
Programs and Software

      Barracuda
(including Server) and Trend Micro (including Server).

      

      Schedule 1.1.6 – Lists Of
Telephone And Fax Numbers, Internet Matters, And Mailboxes

      
        	
                1.  

              	
                Telephony

              

      

      
        	
                a.  

              	
                Phone:  713-686-1100

              

      

      
        	
                b.  

              	
                Fax:  713-682-7402

              

      

      
        	
                c.  

              	
                DID
      Block: 713-683-1300-1399

              

      

      
        	
                2.  

              	
                Web
      Addresses

              

      

      
        	
                a.  

              	
                www.bluegate.com

              

      

      
        	
                b.  

              	
                www.bluegate.net

              

      

      
        	
                c.  

              	
                www.bluegate.

              

      

      
        	
                3.  

              	
                Email
      Accounts

              

      

      
        	
                a.  

              	
                All
      email address associated with the above Web
  addresses.

              

      

      
        	
                4.  

              	
                ARIN
      Block of Numbers

              

      

      

      Schedule 1.1.7 – Licenses
and Permits

      Included
in other Schedules to this Agreement.

      

      Schedule 1.1.9 –
Intellectual Properties

      
        	
                Ø  

              	
                Registered
      Mark for:  “Medical Grade
Network”

              

      

      
        	
                Ø  

              	
                All
      Medical Grade Network (“MGN”) Operations related documentation, processes,
      methodologies, and historical information in written and electronic
      form.

              

      

      
        	
                Ø  

              	
                Business
      name of:  “Bluegate”

              

      

      

      

      

      Schedule 1.2 – Excluded
Assets

      
        	
                1)  

              	
                All
      rights and claims of Seller under any of the Seller’s insurance
      policies;

              

      

      
        	
                2)  

              	
                All
      assets of any of Seller’s employee benefit
  plans;

              

      

      
        	
                3)  

              	
                All
      outstanding receivables dated prior to the Effective
  Date;

              

      

      
        	
                4)  

              	
                All
      claims, rights and interest in and to any prepayment or refunds of
      federal, provincial, state or local franchise, income or other taxes or
      fees of any nature whatsoever which relate solely to the period up to and
      including the date of this Agreement;
and

              

      

      
        	
                5)  

              	
                All
      of Seller’s minute books and other books and records relating to internal
      corporate matters, and all other books and records not related to the
      business conducted with the Assets.

              

      

      

      Schedule 1.4 – List of
Assumed Liabilities

      To be
finalized by the Completion Date in the reconciliation process.

      

      Schedule 4.3.4 –Schedule for
Purchaser Contracting Services from Seller

      For
provision of the personnel, facilities, tools, and resources necessary for the
Seller to support both the MGN and HIMS operations for the Purchaser commencing
on the Effective Date through the Completion Date:

      

        
          	
                  Service Period

                	
                  Amount

                	
                  Payment Due Date

                
	
                  November
      8 – 30, 2009

                	
                  $  75,000

                	
                  November
      30, 2009

                
	
                  December
      2009

                	
                  $  94,000

                	
                  December
      31, 2009

                
	
                  Total

                	
                  $169,000

                	
                  *

                

        

      
        	
                 
      

              	
                *

              	
                This
      amount to be adjusted to reflect any reduction in resources for the MGN or
      HIMS work force and the actual amount paid will be predicated upon the
      reconciliation of accounts outlined in the
  Agreement.

              

      

      
 

      
        
          
          

        

        
          7

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