BLUEGATE CORPORATION STOCK OPTION AGREEMENT No. E-06-44
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Exhibit
2.
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BLUEGATE
CORPORATION
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No.
E-06-44
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Date
of
Grant: December 31, 2006
THIS
GRANT,
dated
as of the date of grant first stated above (the "Date of Grant"), is delivered
by Bluegate Corporation (the "Company") to Xxxxxxx X. Xxxxxx (the "Grantee"),
who is an employee, consultant or director of the Company or one of its
subsidiaries (the Company is sometimes referred to herein as the
"Employer").
WHEREAS,
the
Board of Directors of the Company (the "Board") approved the Company's grant
to
Grantee the right to purchase shares of the Common Stock of the Company, par
value $0.001 per share (the "Stock"), in accordance with the terms and
provisions hereof.
NOW,
THEREFORE,
the
parties hereto, intending to be legally bound hereby, agree as
follows:
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1.
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Grant
of Option.
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Subject
to the terms and conditions hereinafter set forth, the Company, with the
approval and at the direction of the Board, hereby grants to the Grantee, as
of
the Date of Grant, an option to purchase up to
1,200,000
shares
of Stock at a price of
$0.95 per share
. Such
option is hereinafter referred to as the "Option" and the shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred
to as
the "Option Shares." The Option Shares to be issued pursuant to this Stock
Option Agreement shall be restricted securities.
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2.
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Vesting.
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This
Option shall vest according to the schedule below:
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Option
Shares
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Vesting
Date
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600,000
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December
31, 2006
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25,000
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January
1, 2007
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25,000
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February
1,2007
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25,000
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March
1, 2007
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25,000
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April
1, 2007
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25,000
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May
1, 2007
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25,000
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June
1, 2007
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25,000
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July
1, 2007
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25,000
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August
1, 2007
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1
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25,000
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September
1, 2007
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25,000
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October
1, 2007
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25,000
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November
1,2007
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25,000
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December
1, 2007
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25,000
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January
1, 2008
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25,000
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February
1, 2008
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25,000
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March
1, 2008
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25,000
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April
1, 2008
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25,000
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May
1, 2008
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25,000
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June
1, 2008
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25,000
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July
1, 2008
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25,000
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August
1, 2008
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25,000
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September
1,2008
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25,000
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October
1,2008
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25,000
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November
1, 2008
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25,000
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December
1,2008
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3.
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Termination
of Option.
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(a)
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The
Option and all rights hereunder with respect thereto, to the extent
such
Option has vested, shall terminate and become null and void after
the
expiration of five (5) years from the Date of Grant (the "Option
Term").To
the extent that the Option has not vested in accordance with Section
2above, then the non-vested portion of the Option shall terminate
and
become null and void upon the termination of the Grantee as an employee,
officer or director of the Company.
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(b)
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In
the event of the death of the Grantee, the Option may be exercised
by the
Grantee's legal representative(s), but only to the extent that the
Option
would otherwise have been exercisable by the
Grantee.
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(c)
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In
the event the Board (or Committee, if any) finds by a majority vote
after
full consideration of the facts that Grantee, before or after termination
of his employment with the Company or an Affiliate for any reason
(i)
committed or engaged in fraud, embezzlement, theft, commission of
a
felony, or proven dishonesty in the course of his employment by the
Company or any subsidiary or affiliate of the Company, which conduct
damaged the Company or subsidiary or affiliate, or disclosed trade
secrets
of the Company its subsidiary or its affiliate, or (ii) participated,
engaged in or had a material, financial or other interest, whether
as an
employee, officer, director, consultant, contractor, shareholder,
owner,
or otherwise, in any commercial endeavor anywhere which is competitive
with the business of the Company or a subsidiary or Affiliate without
the
written consent of the Company, the Grantee shall forfeit all outstanding
Options. Clause (ii) shall not be deemed to have been violated solely
by
reason of the Grantee's ownership of stock or securities of any publicly
owned corporation, if that ownership does not result in effective
control
of the corporation.
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The
decision of the Board (or Committee, if any) as to the cause of the Grantee's
discharge, the damage done to the Company or a subsidiary or an affiliate,
and
the extent of the Grantee's competitive activity shall be final. No decision
of
the Board (or Committee, if any) however, shall affect the finality of the
discharge of the Grantee by the Company.
2
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4.
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Exercise
of Options.
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(a)
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The
Grantee may exercise the Option with respect to all or any part of
the
number of Option Shares then exercisable hereunder by giving the
Secretary
of the Company written notice of intent to exercise. The notice of
exercise shall specify the number of Option Shares as to which the
Option
is to be exercised and the date of exercise thereof, which date shall
be
at least five days after the giving of such notice unless an earlier
time
shall have been mutually agreed upon. Notwithstanding the foregoing,
an
Option granted under this Agreement may be exercised in increments
of not
less than 10% of the full number of Shares as to which it can be
exercised. A partial exercise of an Option will not affect the Grantee's
right to exercise the Option from time to time in accordance with
this
Agreement as to the remaining Shares subject to the
Option.
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(b)
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Full
payment (in U.S. dollars) by the Grantee of the option price for
the
Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, or certified or cashier's
check or money order, or, with the prior written consent of the Board,
in
whole or in part through the surrender of previously acquired shares
of
Stock at their fair market value on the exercise
date.
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On
the
exercise date specified in the Grantee's notice or as soon thereafter as is
practicable, but not to exceed ten (10) business days, the Company shall cause
to be delivered to the Grantee, a certificate or certificates for the Option
Shares then being purchased (out of theretofore unissued Stock or reacquired
Stock, as the Company may elect) upon full payment for such Option Shares.
If
the Grantee fails to pay for any of the Option Shares specified in such notice,
the Grantee's right to purchase such Option Shares may be terminated by the
Company. The date specified in the Grantee's notice as the date of exercise
shall be deemed the date of exercise of the Option, provided that payment in
full for the Option Shares to be purchased upon such exercise shall have been
received by such date.
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(c)
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Notwithstanding
any of the other provisions hereof. Grantee agrees that he will not
exercise this Option and that the Company will not be obligated to
issue
any Option Shares pursuant to this Stock Option Agreement, if the
exercise
of the Option or the issuance of such Option Shares would constitute
a
violation by the Grantee or by the Company of any provision of any
law or
regulation of any governmental authority or national securities exchanges.
Upon the acquisition of any Option Shares pursuant to the exercise
of the
Option herein granted, Grantee will enter into such written
representations, warranties and agreements as the Company may reasonably
request in order to comply with applicable securities laws with this
Stock
Option Agreement.
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3
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5.
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Piggyback
Registration Rights.
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If
the
Company at any time proposes to register any of its Common Stock under the
Securities Act (other than a registration on Form S-8 or S-4 or any successor
or
similar forms) whether or not for sale for the Company's account, the Company
shall use its best efforts to include in such registration (and any related
qualifications under blue sky laws or other compliance) all the Option Shares
specified in a written request or requests, made by the Grantee and received
by
the Company within 15 days after the Grantee's receipt of written notice from
the Company regarding the proposed registration, which written request may
specify the inclusion of all or a part of Grantee's Option Shares.
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6.
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Adjustment
of and Changes in Stock of the
Company.
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In
the
event of a reorganization, recapitalization, change of shares, stock split,
spin-off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the Board shall
make such adjustment in the number and kind of shares of Stock subject to the
Option and in the option price; provided, however, that no such adjustment
shall
give the Grantee any additional benefits under the Option.
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7.
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Fair
Market Value.
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As
used
herein, the "fair market value" of a share of Stock shall be the closing price
per share of Stock on the PINK SHEETS, OTCBB, NASDAQ, the NYSE, the Amex, the
composite tape or other recognized market source, as determine by the Board,
on
the applicable date of reference hereunder, or if there is no sale on such
date,
then the closing price on the last previous day on which a sale is
reported.
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8.
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No
Rights of Stockholders.
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Neither
the Grantee nor any personal representative shall be, or shall have any of
the
rights and privileges of, a stockholder of the Company with respect to any
shares of Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
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9.
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Non-Transferability
of Option.
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During
the Grantee's lifetime, the Option hereunder shall be exercisable only by the
Grantee or any guardian or legal representative of the Grantee, and the Option
shall not be transferable except, (i) in case of the death of the Grantee,
by
will or the laws of descent and distribution, and (ii) to a child, grandchild
or
stepchild of the Grantee or to a trust or partnership created by the Grantee,
who, in each case, will be subject to all of the provisions hereof, nor shall
the Option be subject to attachment, execution or other similar process. In
the
event of (a) any attempt by the Grantee to alienate, assign, pledge, hypothecate
or otherwise dispose of the Option, except as provided for herein, or (b) the
levy of any attachment, execution or similar process upon the rights or interest
hereby conferred, the Company may terminate the Option by notice to the Grantee
and it shall thereupon become null and void and of no value to any such
party.
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Disputes.
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As
a
condition of the granting of this Option, the Grantee and his heirs and
successors agree that any dispute or disagreement which may arise hereunder
shall be determined by the Board (or Committee, if any) in its sole discretion
and judgment, and that any such determination and any interpretation by the
Board (or Committee, if any) of the terms of this Option shall be final and
shall be binding and conclusive, for all purposes upon the Company, the Grantee,
his heirs and successors.
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11.
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Notice.
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Any
notice to the Company provided for in this instrument shall be addressed to
it
in care of its Secretary at its executive offices at Bluegate Corporation,
and
any notice to the Grantee shall be addressed to the Grantee at the current
address shown on the records of the Company. Any notice shall be deemed to
be
duly given if and when properly addressed and posted by registered or certified
mail, postage prepaid.
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12.
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Governing
Law.
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The
validity, construction, interpretation and effect of this instrument shall
exclusively be governed by and determined in accordance with the law of the
State of Texas, except to the extent preempted by federal law, which shall
to
the extent govern.
IN
WITNESS WHEREOF, the Company has caused its duly authorized officers to execute
and attest to this Stock Option Agreement, and to apply the corporate seal
hereto, and the Grantee has placed his or her signature hereon, effective as
of
the Date of Grant.
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Bluegate
Corporation
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By:
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx
Xxxxxxxxx
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Grantee:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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