Contract
Exhibit
10.20 Warrant Agreement of
Xxxxxxx Xxxxxxx
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
000
XXXXX
XXXX XXX XXXX
XXXXX
000
XXXXXXX,
XXXXX 00000
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, Xxxxxxx X. Xxxxxxx (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 Xxxxxx 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: Xxxxxxx
X. Xxxxxx
|
Secretary
|
||||
|
Title: Chief
Executive Officer
|
|||||
EXHIBIT
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: | |||||
