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EXHIBIT 4.4
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") dated as of _____________, 2001,
is by and between Bluegate Corporation, a Delaware corporation (the "Company"),
and Corporate Stock Transfer, Inc. (the "Warrant Agent").
WHEREAS, the Company is conducting a public offering (the "Public
Offering") of 200,000 units (the "Units"), each Unit consisting of one share of
Common Stock, $.0001 par value per share ("Common Stock"), one redeemable Class
A common stock purchase warrant (the "Class A Warrant"), and one redeemable
Class B common stock purchase warrant (the "Class B Warrant," and together with
the Class A Warrant, the "Warrants"). Each Class A Warrant entitles the holder
to purchase one share of Common Stock at a price of $1.00 per share, and each
Class B Warrant entitles the holder to purchase one share of Common Stock at a
price of $1.50 per share; and
WHEREAS, the terms and conditions of the Public Offering are more fully
described in the prospectus dated _____________, 2001 (the "Prospectus")
included in the Company's Registration Statement, as defined below;
WHEREAS, the Public Offering of the Units is subject to and is being
conducted in accordance with Rule 419 of the Securities Act of 1933 pertaining
to public offerings by companies commonly referred to as "blank check
companies." In accordance with the requirements of Rule 419, the Warrants
included in the Units sold to investors will be deposited and held in an escrow
account (the "Escrow Account") established at and maintained by the Escrow Agent
with Key Bank National Association, World Trade Center Branch, Denver, Colorado
as escrow holder (the "Escrow Holder") and can be released only in accordance
with the terms of the escrow agreement between the Company, the Escrow Agent and
the Escrow Holder pursuant to which the Escrow Account has been established (the
"Escrow Agreement");
WHEREAS, if the Warrants are exercised while they are being held in the
Escrow Account, Rule 419 requires that the exercise price paid and the shares
purchased must be deposited and held in the Escrow Account and can be released
only in accordance with the terms of the Escrow Agreement;
WHEREAS, Rule 419 requires and the Escrow Agreement provides that the
Warrants may not be transferred while they are being held in the Escrow Account
except by will or the laws of descent and distribution, or pursuant to a
qualified domestic relations order as defined by the Internal Revenue Code of
1986 as amended, or Title I of the Employment Retirement Income Security Act
(ERISA), or the rules thereunder; and
WHEREAS, the Company desires to provide for the issuance, registration,
transfer and exchange of certificates representing the Class A Warrants (the
"Class A Warrant Certificates") and the Class B Warrants (the "Class B Warrant
Certificates," and together with the Class A Warrant Certificates, the "Warrant
Certificates") and for the exercise of the Warrants.
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. Definitions. As used herein:
(a) "Common Stock" shall mean Common Stock of the Company, $.0001 par
value per share.
(b) "Corporate Office" shall mean the place of business of the Warrant
Agent (or its successor) which office is presently located at 0000
Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
(c) "Effective Date" shall mean the date on which the Company's
Registration Statement is declared effective by the Securities and
Exchange Commission.
(d) "Exercise Date" shall mean the date of surrender for exercise of any
Warrant Certificate, provided the exercise form on the back of the
Warrant Certificate or a form substantially similar thereto has been
completed in full by the Registered Owner or a duly appointed attorney
and the Warrant Certificate is accompanied by payment in full of the
Exercise Price.
(e) "Exercise Period" shall mean the period commencing on the Effective
Date and extending to and through the Expiration Date.
(f) "Exercise Price" shall mean, subject to modification and adjustment as
provided in Section 10 of this Agreement, $1.00 per share in the case
of the Class A Warrants and $1.50 per share in the case of the Class B
Warrants; provided, however, that in the event the Company reduces the
Exercise Price, the Exercise Price shall be as established by the
Company.
(g) "Expiration Date" shall mean, unless the Warrants are redeemed as
provided in Section 6 hereof prior to such date, 5:00 P.M. Mountain
Time on the last day of the two year period commencing on the
Effective Date; provided however, if such date shall be a holiday or a
day on which banks are authorized to close, then Expiration Date shall
mean 5:00 p.m., Mountain Time on the next following day which in the
State of Colorado is not a holiday or a day on which banks are
authorized to close. If the Company redeems the Warrants as provided
in Section 6 of this Agreement, the Expiration Date shall be the date
fixed for redemption.
(h) "Warrants" shall mean 200,000 Class A Warrants to purchase 200,000
shares of Common Stock and 200,000 Class B Warrants to purchase
200,000 shares of Common Stock, all of which will be sold in the
Public Offering as part of the Units.
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(i) "Registered Owner" shall mean the person in whose name any Warrant
Certificate shall be registered on the books maintained by the Warrant
Agent pursuant to Section 8 of this Agreement.
(j) "Registration Statement" shall mean the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-59972), as amended.
(k) "Transfer Agent" shall mean Corporate Stock Transfer, Inc. or any
successor, as the transfer agent and registrar of the Common Stock.
(l) "Warrant Agent" shall mean Corporate Stock Transfer, Inc. or any
successor, as the transfer agent and registrar of the Warrants.
(m) "Warrant Shares" shall mean and include up to 400,000 authorized and
unissued shares of Common Stock reserved for issuance on exercise of
the Warrants, and unless otherwise noted, any additional shares of
Common Stock or other property which may hereafter be issuable or
deliverable on exercise of the Warrants pursuant to Section 10 of this
Agreement.
2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act on behalf of the Company in connection with the issuance, registration,
transfer and exchange of Warrant Certificates and the exercise of the Warrants,
and the Warrant Agent hereby accepts such appointment.
3. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Owner of a Warrant
Certificate representing Warrants to purchase one share of Common Stock on the
exercise of each Warrant, subject to modification and adjustment as hereinafter
provided in Section 10. Warrant Certificates representing 200,000 Class A
Warrants and evidencing the right to purchase an aggregate of 200,000 shares of
Common Stock of the Company, and Warrant Certificates representing 200,000 Class
B Warrants and evidencing the right to purchase an aggregate of 200,000 shares
of Common Stock of the Company shall be executed by the duly authorized officers
of the Company and delivered to the Warrant Agent for countersignature. The
Warrant Certificates representing the Warrants will be issued and delivered on
written order of the Company signed by the duly authorized officers of the
Company.
(b) Except as provided in Section 9 hereof, no Warrant Certificates shall
be issued except (i) Warrant Certificates initially issued hereunder, (ii)
Warrant Certificates issued upon the transfer, exchange or exercise of Warrants,
and (iii) Warrant Certificates issued in replacement of lost, stolen, destroyed
or mutilated Warrant Certificates pursuant to Section 9.
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4. Form and Execution of Warrant Certificates.
(a) The Class A Warrant Certificates and Class B Warrant Certificates shall
be substantially in the forms attached hereto as Exhibits "A" and "B,"
respectively (the provisions of which are incorporated herein), and may have
such letters, numbers or other marks of identification and such legends,
summaries or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement. The Warrant Certificates shall be dated as of the date of
issuance thereof by the Company, whether on initial issuance, transfer, exchange
or in lieu of mutilated, lost, stolen or destroyed Warrant Certificates.
(b) The Warrant Certificates shall be executed on behalf of the Company by
its duly authorized officers, by manual signatures or by facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of the Company's
seal. The Warrant Certificates shall be countersigned manually or by facsimile
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In the event any officer of the Company who signed any of the
Warrant Certificates shall cease to be such officer of the Company before the
date of issuance of the Warrant Certificates or before countersignature and
delivery by the Warrant Agent, such Warrant Certificates, nevertheless, may be
countersigned, issued and delivered by the Warrant Agent with the same force and
effect as though the person who signed such Warrant Certificates had not ceased
to be such officer of the Company.
5. Exercise.
(a) The exercise of Warrants in accordance with this Agreement shall only
be permitted during the Exercise Period.
(b) Warrants shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date. The exercise form shall be executed
by the Registered Owner thereof or the Registered Owner's attorney duly
authorized in writing and shall be delivered to the Warrant Agent together with
payment of the Exercise Price for the number of shares as to which the Warrants
are being exercised. Payment shall be made in lawful money of the United States
of America by check or wire transfer payment payable to the order of the Warrant
Agent for the account of the Company.
(c) The person entitled to receive the number of Warrant Shares deliverable
on such exercise shall be treated for all purposes as the Registered Owner of
such Warrant Shares as of the close of business on the Exercise Date. The
Company shall not be obligated to issue any fraction of a share of Common Stock
on the exercise of Warrants. If Warrants represented by more than one Warrant
Certificate shall be exercised at one time by the same Registered Owner, the
number of full Warrant Shares which shall be issuable on exercise thereof shall
be computed on the basis of the aggregate number of full Warrant Shares issuable
on such exercise.
(d) The Warrant Agent shall promptly notify the Company in writing of any
exercise and of the number of Warrant Shares to be delivered and shall cause
payment of an amount equal
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to the Exercise Price to be made to the Escrow Agent or the Company as
hereinafter provided. The parties contemplate such payments will be made by the
Warrant Agent on a weekly basis and will consist of collected funds only. The
Warrant Agent shall hold any proceeds collected and not yet paid in a
Federally-insured escrow account at a commercial bank selected by agreement of
the Company and the Warrant Agent at all times relevant hereto. Following a
determination by the Warrant Agent that collected funds have been received, the
Warrant Agent shall cause the Transfer Agent to issue share certificates
representing the number of Warrant Shares purchased by the Registered Owner. If
the Warrants are exercised while they are being held in the Escrow Account, the
share certificates representing the Warrant Shares purchased by the Registered
Owner and collected funds in an amount equal to the Exercise Price shall be
deposited into the Escrow Account. If the Warrants are exercised after they have
been released from the Escrow Account, the share certificates representing the
Warrant Shares purchased by the Registered Owner shall be delivered to the
person or persons entitled to receive the same, and collected funds in an amount
equal to the Exercise Price shall be delivered to the Company.
(e) Expenses incurred by the Warrant Agent, including administrative costs,
and the standard fees imposed by the Warrant Agent for the Warrant Agent's
services, shall be paid by the Company and shall not be deducted from any
collected funds prior to the deposit thereof into the Escrow Account.
(f) A detailed accounting statement setting forth the number of Warrants
exercised, the number of Warrant Shares issued, the amount of collected funds
received upon exercise of Warrants and all expenses incurred by the Warrant
Agent shall be transmitted to the Company each time a payment of collected funds
is made. Such accounting statement shall serve as an interim accounting for the
Company during the Exercise Period. The Warrant Agent shall render to the
Company, at the completion of the Exercise Period, a complete accounting setting
forth the number of Warrants exercised, the identity of persons exercising such
Warrants, the number of Warrant Shares issued, the amount of collected funds
deposited into the Escrow Account or delivered to the Company, and all expenses
incurred by the Warrant Agent.
(g) The Company may be required to deliver a prospectus that satisfies the
requirements of Section 10 of the Securities Act of 1933, as amended (the
"Securities Act") with delivery of the Warrant Shares and must have a
registration statement (or a post-effective amendment to an existing
registration statement) effective under the Securities Act in order for the
Company to comply with any such prospectus delivery requirements. The Company
will advise the Warrant Agent of the status of any such registration statement
under the Securities Act and of the effectiveness of the Company's Registration
Statement or lapse of effectiveness.
(h) No issuance of Warrant Shares shall be made unless there is an
effective registration statement under the Securities Act, and registration or
qualification of the Warrant Shares, or an exemption therefrom, has been
obtained from state or other regulatory authorities in the jurisdiction in which
such Warrant Shares are sold. The Company will provide to the Warrant Agent
written confirmation of all such registrations or qualifications, or an
exemption therefrom, when requested by the Warrant Agent.
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6. Redemption.
(a) Commencing the Effective Date, the Company may, at its option, redeem
the Class A Warrants in whole, but not in part, for a redemption price of $.001
per Class A Warrant, on not less than 30 days' written notice to the Registered
Owners. The right to redeem the Class A Warrants may be exercised by the Company
during the Exercise Period only in the event (i) the closing bid price for the
Company's Common Stock, as reported by the market on which the common stock
trades, has exceeded the Exercise Price by $.50 for any 20 consecutive trading
days, and (ii) any notice of the call for redemption is given not more than ten
(10) business days after the conclusion of the 20 consecutive trading days
referred to in (i) above. In the event the Company exercises its right to redeem
the Class A Warrants, the Expiration Date will be deemed to be, and the Class A
Warrants will be exercisable until the close of business on, the date fixed for
redemption in such notice. If any Class A Warrant called for redemption is not
exercised by such time, it will cease to be exercisable and the Registered Owner
thereof will be entitled only to the redemption price.
(b) Commencing the Effective Date, the Company may, at its option, redeem
the Class B Warrants in whole, but not in part, for a redemption price of $.001
per Class B Warrant, on not less than 30 days' written notice to the Registered
Owners. The right to redeem the Class B Warrants may be exercised by the Company
during the Exercise Period only in the event (i) the closing bid price for the
Company's Common Stock, as reported by the market on which the common stock
trades, has exceeded the Exercise Price by $.50 for any 20 consecutive trading
days, and (ii) any notice of the call for redemption is given not more than ten
(10) business days after the conclusion of the 20 consecutive trading days
referred to in (i) above. In the event the Company exercises its right to redeem
the Class B Warrants, the Expiration Date will be deemed to be, and the Class B
Warrants will be exercisable until the close of business on, the date fixed for
redemption in such notice. If any Class B Warrant called for redemption is not
exercised by such time, it will cease to be exercisable and the Registered Owner
thereof will be entitled only to the redemption price.
7. Reservation of Shares and Payment of Taxes.
(a) The Company covenants that it will at all times reserve and have
available from its authorized shares of Common Stock such number of shares as
shall then be issuable on exercise of all outstanding Warrants. The Company
covenants that upon exercise of the Warrants and payment of the Exercise Price
therefor, all Warrant Shares issuable upon such exercise shall, at the time of
delivery thereof, be duly and validly issued, fully paid and non-assessable.
(b) The Company shall pay all documentary, stamp or similar taxes and other
government charges that may be imposed with respect to the issuance of the
Warrants, or the issuance, transfer or delivery of any Warrant Shares on
exercise of the Warrants; provided, however, that if Warrant Shares are to be
delivered in a name other than the name of the Registered Owner of the Warrant
Certificates, no such delivery shall be made unless the person requesting the
same has paid to the Warrant Agent or the Company's Transfer Agent the amount of
any such taxes or charges incident thereto.
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(c) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock required upon exercise of the Warrants, and the Company will comply
with all such requisitions.
8. Exchange and Registration of Transfer.
(a) Subject to the limitations on transfer described in subsection (e)
below, the Warrant Certificates may be transferred in whole or in part and may
be separately transferred from the stock certificate to which such Warrant
Certificate is attached upon initial issuance, if any, at any time during the
Exercise Period. Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants. Warrant
Certificates to be exchanged shall be surrendered to the Warrant Agent at its
Corporate Office. The Company shall execute and the Warrant Agent shall
countersign, issue and deliver in exchange therefor, the Warrant Certificate or
Certificates which the holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep transfer books at its Corporate Office in
which Warrant Certificates and the transfer thereof shall be registered. Subject
to the limitations on transfer described in subsection (e) below, on due
presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall countersign and
deliver to the transferee or transferees a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants.
(c) All Warrant Certificates presented for registration of transfer or
exercise shall be duly endorsed or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Warrant
Agent, duly executed by the Registered Owner thereof or his attorney duly
authorized in writing.
(d) Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may treat the Registered Owner of any Warrant
Certificate as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the Company or the
Warrant Agent) and the parties to this Agreement shall not be affected by any
notice to the contrary.
(e) The Warrants may not be transferred while they are being held in the
Escrow Account established at and maintained by the Escrow Agent with the Escrow
Holder pursuant to the Escrow Agreement between the Company, the Escrow Agent
and the Escrow Holder except by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employment Retirement Income
Security Act (ERISA), or the rules thereunder.
9. Loss or Mutilation. On receipt by the Company and the Warrant Agent of
evidence satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate, the Company shall execute
and the Warrant Agent shall countersign and deliver in lieu
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thereof, a new Warrant Certificate representing an equal aggregate number of
Warrants. In the case of loss, theft or destruction of any Warrant Certificate,
the Registered Owner requesting issuance of a new Warrant Certificate shall be
required to obtain an indemnity bond from an approved surety bonding company in
favor of the Company and Warrant Agent in an amount satisfactory to each of
them. In the event a Warrant Certificate is mutilated, such Warrant Certificate
shall be surrendered and canceled by the Warrant Agent prior to delivery of a
new Warrant Certificate. Applicants for a substitute Warrant Certificate shall
also comply with such other regulations and pay such other reasonable charges as
the Warrant Agent may prescribe.
10. Adjustment of Exercise Price and Warrant Shares.
(a) If at any time prior to the expiration of the Warrants by their terms
or by exercise, the Company increases or decreases the number of its issued and
outstanding shares of Common Stock, or changes in any way the rights and
privileges of such shares of Common Stock, by means of (i) the payment of a
share dividend or the making of any other distribution on such shares of Common
Stock payable in its shares of Common Stock, (ii) a split or subdivision of
shares of Common Stock, or (iii) a consolidation or combination of shares of
Common Stock, then the Exercise Price in effect at the time of such action and
the number of Warrants required to purchase each Warrant Share at that time
shall be proportionately adjusted so that the numbers, rights and privileges
relating to the Warrant Shares then purchasable upon the exercise of the
Warrants shall be increased, decreased or changed in like manner, for the same
aggregate purchase price set forth in the Warrants, as if the Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to the event had
been issued, outstanding, fully paid and non-assessable at the time of that
event. Any dividend paid or distributed on the shares of Common Stock in shares
of any other class of shares of the Company or securities convertible into
shares of Common Stock shall be treated as a dividend paid in shares of Common
Stock to the extent shares of Common Stock are issuable on the payment or
conversion thereof.
(b) In the event, prior to the expiration of the Warrants by their terms or
by exercise, the Company shall be recapitalized by reclassifying its outstanding
shares of Common Stock into shares with a different par value, or by changing
its outstanding shares of Common Stock to shares without par value or in the
event of any other material change in the capital structure of the Company or of
any successor corporation by reason of any reclassification, recapitalization or
conveyance, prompt, proportionate, equitable, lawful and adequate provision
shall be made whereby any Registered Owner of the Warrants shall thereafter have
the right to purchase, on the basis and the terms and conditions specified in
this Agreement, in lieu of the Warrant Shares theretofore purchasable on the
exercise of any Warrant, such securities or assets as may be issued or payable
with respect to or in exchange for the number of Warrant Shares theretofore
purchasable on exercise of the Warrants had such reclassification,
recapitalization or conveyance not taken place; and in any such event, the
rights of any Registered Owner of a Warrant to any adjustment in the number of
Warrant Shares purchasable on exercise of such Warrant, as set forth above,
shall continue and be preserved in respect of any stock, securities or assets
which the Registered Owner becomes entitled to purchase.
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(c) In the event the Company, at any time prior to the expiration of the
Warrants by their terms or by exercise, shall sell all or substantially all of
its property, or dissolves, liquidates or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made as part of
the terms of such sale, dissolution, liquidation or winding up such that the
Registered Owner of a Warrant may thereafter receive, on exercise thereof, in
lieu of each Warrant Share which the Registered Owner would have been entitled
to receive, the same kind and amount of any stock, securities or assets as may
be issuable, distributable or payable on any such sale, dissolution, liquidation
or winding up with respect to each share of Common Stock of the Company;
provided, however, that in the event of any such sale, dissolution, liquidation
or winding up, the right to exercise the Warrants shall terminate on a date
fixed by the Company, such date to be not earlier than 5:00 P.M., Mountain Time,
on the 30th day next succeeding the date on which notice of such termination
of the right to exercise the Warrants has been given by mail to the Registered
Owners thereof at such addresses as may appear on the books of the Warrant
Agent.
(d) Upon exercise of the Warrants by the Registered Owners, the Company
shall not be required to deliver fractions of Warrant Shares; provided, however,
that the Company shall make prompt, proportionate, equitable, lawful and
adequate provisions in respect of any such fraction of one Warrant Share either
on the basis of adjustment in the then applicable Exercise Price or a purchase
of the fractional interest at the market price of the Company's shares of Common
Stock or such other reasonable basis as the Company may determine.
(e) In the event, prior to expiration of the Warrants by exercise or by
their terms, the Company shall determine to take a record of the holders of its
shares of Common Stock for the purpose of determining stockholders entitled to
receive any stock dividend, distribution or other right which will cause any
change or adjustment in the number, amount, price or nature of the shares of
Common Stock or other stock, securities or assets deliverable on exercise of the
Warrants pursuant to the foregoing provisions, the Company shall give to the
Registered Owners of the Warrants at the addresses as may appear on the books of
the Warrant Agent at least 30 days' prior written notice to the effect that it
intends to take such a record. Such notice shall specify the date as of which
such record is to be taken; the purpose for which such record is to be taken;
and the number, amount, price and nature of the shares of Common Stock or other
stock, securities or assets which will be deliverable upon exercise of the
Warrants after the action for which such record will be taken has been
completed. Without limiting the obligation of the Company to provide notice to
the Registered Owners of the Warrants of any corporate action hereunder, the
failure of the Company to give notice shall not invalidate such corporate action
of the Company.
(f) The Warrants shall not entitle the Registered Owner thereof to any of
the rights of stockholders or to any dividend declared on the shares of Common
Stock unless the Warrant is exercised and the Warrant Shares purchased prior to
the record date fixed by the Board of Directors of the Company for the
determination of holders of shares of Common Stock entitled to such dividend or
other right.
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(g) Any reduction in the applicable Exercise Price shall be effective upon
written notice to the Warrant Agent, which notice shall be given pursuant to a
duly and validly authorized resolution of the Board of Directors of the Company.
11. Duties, Compensation and Termination of Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial capacity
for the Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of the Warrant Shares or
other property delivered on exercise of any Warrant.
(b) The Warrant Agent shall not be under any duty or responsibility to any
holder of the Warrant Certificates to make or cause to be made any adjustment of
the Exercise Price or to determine whether any fact exists which may require any
such adjustment. The Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement or in the Warrant Certificates, or (iii) be liable for any act or
omission in connection with this Agreement except for its own negligence or
willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken or omitted by it in good faith in accordance
with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed by an
officer of the Company. The Warrant Agent shall not be liable for any action
taken or omitted by it in accordance with such notice, statement, instruction,
request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse the Warrant Agent for its reasonable
expenses. The Company further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for any action taken or omitted by the
Warrant Agent in the execution of its duties and powers hereunder, except
losses, expenses and liabilities arising as a result of the Warrant Agent's
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties or the Company may terminate
the Warrant Agent and the Warrant Agent shall be discharged from all further
duties and liabilities hereunder (except liabilities arising as a result of the
Warrant Agent's own negligence or willful misconduct) on 30 days' prior written
notice to the other party. Upon notice of such resignation
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or termination, the Warrant Agent shall cause a copy of such notice to be mailed
to the Registered Owner of each Warrant Certificate. The expenses the Warrant
Agent incurs in mailing such notice shall be paid by the Company. Upon such
resignation or termination, the Company shall appoint a new warrant agent. If
the Company shall fail to make such appointment within a period of 30 days after
notice of such resignation or termination, then the Registered Owner of any
Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent shall have its
principal office in the United States. After acceptance in writing of an
appointment of a new warrant agent is received by the Company, such new warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named herein as the warrant agent, without any
further assurance, conveyance, act or deed; provided, however, if it shall be
necessary or expedient to execute and deliver any further assurance, conveyance,
act or deed, the same shall be done at the expense of the Company and shall be
legally and validly executed and delivered by the resigning Warrant Agent. The
Company shall file a notice of appointment of a new warrant agent with the
resigning Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Owner of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged, or any corporation resulting from any consolidation
to which the Warrant Agent or any new warrant agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant Agent
shall be a successor warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as a successor to the
Warrant Agent. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed to the Company and to the
Registered Owner of each Warrant Certificate.
(h) The Warrant Agent, its officers or directors and it subsidiaries or
affiliates may buy, hold or sell Warrants or other securities of the Company and
otherwise deal with the Company in the same manner and to the same extent and
with like effect as though it were not the Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company or
for any other legal entity.
12. Modification of Agreement. The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this Agreement without
the approval of any holders of Warrants (i) that they shall deem appropriate to
cure any ambiguity or to correct any defective or inconsistent provision or
mistake or error herein contained, (ii) that they may deem necessary or
desirable and which shall not adversely affect the interests of the Registered
Owners of Warrant Certificates; (iii) that they may deem necessary or desirable
to decrease the Exercise Price as provided for in Section 1(f) hereof; (iv) or
which may be required by law; provided, however, this Agreement shall not
otherwise be modified, supplemented or altered in any respect except with the
consent in writing of the Registered Owners of Warrant Certificates representing
not less than a majority of the Warrants outstanding. Additionally, no change in
the number or nature of the Warrant Shares purchasable on exercise of a Warrant
or the Exercise Price thereof (other than a decrease in the Exercise Price as
provided in Section 1(f) hereof) shall be made without the consent in writing of
the Registered Owner of the Warrant Certificate representing
11
12
such Warrant, other than such changes as are specifically permitted or
prescribed by this Agreement.
13. Notices. All notices, demands, elections, opinions or other communications
required or desired to be given hereunder shall be in writing and shall be
validly given or made to another party if given by personal delivery, telex,
facsimile, telegram or if deposited in the United States mail, certified or
registered, postage prepaid, return receipt requested. If such notice, demand or
other communication is given by personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time of receipt. If such
notice, demand or other communication is given by mail, such notice shall be
conclusively deemed given forty-eight (48) hours after the deposit thereof in
the United States mail addressed to the party to whom such notice, demand or
other communication is to be given as hereinafter set forth:
To the Company: Bluegate Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
To the Warrant Agent: Corporate Stock Transfer, Inc.
0000 Xxxxxx Xxxxx Xxxxx, Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
and, if requested by the Company, to the Registered Owner of a Warrant
Certificate, at the address of such Registered Owner as set forth on the books
maintained by the Warrant Agent.
14. Persons Benefiting. This Agreement shall be binding upon and inure to the
benefit of the Company, the Warrant Agent and their respective successors and
assigns, and the Registered Owners and beneficial owners from time to time of
the Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer on any other person any right, remedy or claim or to impose
on any other person any duty, liability or obligation.
15. Further Instruments. The parties shall execute and deliver any and all such
other instruments and shall take any and all such other actions as may be
reasonable or necessary to carry out the intention of this Agreement.
16. Severability. If any provision of this Agreement shall be held, declared or
pronounced void, voidable, invalid, unenforceable or inoperative for any reason
by any court of competent jurisdiction, government authority or otherwise, such
holding, declaration or pronouncement shall not affect adversely any other
provision of this Agreement, which shall otherwise remain in full force and
effect and be enforced in accordance with its terms, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
17. Waiver. All the rights and remedies of either party under this Agreement
are cumulative and not exclusive of any other rights and remedies as provided by
law. No delay or failure on the part of either party in the exercise of any
right or remedy arising from a breach of this Agreement
12
13
shall operate as a waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party where required
hereunder to any act or occurrence shall not be deemed to be a consent to any
other action or occurrence.
18. General Provisions. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, without regard to its
conflicts of laws principles. Except as otherwise expressly stated herein, time
is of the essence in performing hereunder. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, and this
Agreement may not be modified or amended or any term or provision hereof waived
or discharged except in writing signed by the party against whom such amendment,
modification, waiver or discharge is sought to be enforced. The headings of this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning thereof. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPANY
Bluegate Corporation
By:
-----------------------------------
, President
--------------------
By:
-----------------------------------
, Secretary
--------------------
WARRANT AGENT
Corporate Stock Transfer, Inc.
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
13
14
Exhibit A to
Warrant Agreement
No. W_________ ___________ Warrants
CLASS A REDEEMABLE COMMON STOCK
PURCHASE WARRANT CERTIFICATE
BLUEGATE CORPORATION
This certifies that for value received, _______________ or registered
assigns (the "Registered Owner"), is the owner of _______ Class A redeemable
common stock purchase warrants (the "Warrants"), each of which Warrants entitles
the Registered Owner to purchase during the period commencing _____________ and
expiring at 5:00 P.M. Mountain time on ________, 200_, one fully paid and
non-assessable share of common stock, $.0001 par value per share, of Bluegate
Corporation, a Delaware corporation (the "Company"), upon payment of $1.00 per
share (the "Exercise Price"); provided, however, that the number of shares of
the Company's common stock purchasable upon exercise of each Warrant may be
increased or reduced and the Exercise Price adjusted in the event of certain
contingencies provided for in the Warrant Agreement described below. Payment of
the Exercise Price of Warrants represented by this Warrant Certificate shall be
made in lawful money of the United States of America by check or wire transfer
payment payable to the order of the Warrant Agent for the account of the
Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions
contained in the Warrant Agreement dated as of __________, 2001 between the
Company and Corporate Stock Transfer, Inc. ("Warrant Agent"). Copies of the
Warrant Agreement are on file at the office of the Warrant Agent.
In order to exercise these Warrants, the form of election to purchase on
the reverse side must be properly completed and executed. If Warrants
represented by this Warrant Certificate are exercised with respect to fewer than
all shares purchasable, certificates representing Warrants to purchase the
remaining number of shares will be issued. The Company shall not be required to
issue fractions of shares upon the exercise of Warrants.
Warrants are transferable at the office of the Warrant Agent (or of its
successor as Warrant Agent) by the Registered Owner thereof in person or by
attorney duly authorized in writing, in the manner and subject to the
limitations on transfer set forth in the Warrant Agreement, upon surrender of
the Warrant Certificate and the payment of transfer taxes, if any. Upon any such
transfer, a new Warrant Certificate or new Warrant Certificates of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of shares of the Company's common stock, will be issued
to the
15
transferee in exchange for this Warrant Certificate, subject to the limitations
set forth in the Warrant Agreement.
This Warrant Certificate, when surrendered at the office of the Warrant
Agent (or of its successor as Warrant Agent) by the Registered Owner in person
or by attorney duly authorized in writing, may be exchanged for any other
Warrant Certificates of different denominations, of like tenor and representing
in the aggregate the right to purchase a like number of shares, subject to the
limitations provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's common stock or other
securities purchasable upon the exercise of Warrants are closed for any reason,
the Company shall not be required to make delivery of certificates for the
securities purchasable upon such exercise until the date of the reopening of
said transfer books.
The Registered Owner shall not be entitled to any of the rights of a
stockholder of the Company prior to exercise hereof.
Subject to the provisions of the Warrant Agreement, the Warrants may be
redeemed at the option of the Company for a redemption price of $.001 per
Warrant on not less than 30 days' notice, provided that (i) the closing bid
price for the Company's common stock, as reported by the market on which the
common stock trades, has exceeded the Exercise Price by $.50 for any 20
consecutive trading days, and (ii) any notice of the call for redemption is
given not more than 10 business days after the conclusion of such 20 consecutive
trading days. In the event the Company exercises its right to redeem the
Warrants, the Warrants will be exercisable until the close of business on the
date fixed for redemption in such notice. If any Warrant called for redemption
is not exercised by such date, it will cease to be exercisable and the
Registered Owner will be entitled only to the redemption price.
Prior to due presentment for registration or transfer thereof, the Company
and the Warrant Agent may treat the Registered Owner as the absolute owner
hereof and of each Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly authorized officer
of the Company or the Warrant Agent) for all purposes and shall not be affected
by any notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
16
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Bluegate Corporation
SEAL
By:
----------------------------
Rowland W. Day II, President
By:
----------------------------
Xxxxxx Xxx, Secretary
COUNTERSIGNED:
Corporate Stock Transfer, Inc.,
as Warrant Agent
By:
----------------------------
Authorized Officer
17
EXERCISE
The undersigned Registered Owner hereby irrevocably elects to exercise
_______ Warrants represented by this Warrant Certificate, and to purchase the
shares of Common Stock of the Company issuable upon the exercise of such
Warrants, and requests that certificates for such shares shall be issued in the
name of:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
and be delivered to:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
Please insert social security
or other identifying number: _________________________
and, if such number of Warrants shall not be all of the Warrants evidenced
by the Warrant Certificate, that a new Warrant Certificate for the balance of
such Warrants be registered in the name of and delivered to, the Registered
Owner at the address stated below.
IMPORTANT: The name of the person exercising this Warrant must correspond
with the name of the Warrantholder written on the face of this Warrant
Certificate in every particular, without alteration or any change whatever,
unless it has been assigned by completing the Assignment form below.
Dated: _____________, 200_ ______________________________
Signature of Registered Owner
SIGNATURE GUARANTEE ______________________________
Print name
______________________________
______________________________
Address
18
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
Please insert social security
or other identifying number: _________________________
____________ of the Warrants represented by this Warrant Certificate, and
hereby irrevocably constitutes and appoints any officer of the Company or its
transfer agent and registrar as lawful Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the
premises.
Dated: _____________, 200_ _____________________________
Signature of Registered Owner
_____________________________
Print name
IMPORTANT: Every registered owner of this Certificate must sign it to
assign or otherwise transfer Warrants. The above signature or signatures must
correspond with the name or names written on the face of this Warrant
Certificate in every particular, without alteration, enlargement or any change
whatever. Each signature should be "medallion" guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan Associations and
Credit Unions) with membership in an approved signature guarantee Medallion
Program pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.
SIGNATURE GUARANTEE:
19
Exhibit B to
Warrant Agreement
No. W_________ ___________ Warrants
CLASS B REDEEMABLE COMMON STOCK
PURCHASE WARRANT CERTIFICATE
BLUEGATE CORPORATION
This certifies that for value received, _______________ or registered
assigns (the "Registered Owner"), is the owner of _______ Class B redeemable
common stock purchase warrants (the "Warrants"), each of which Warrants entitles
the Registered Owner to purchase during the period commencing _____________ and
expiring at 5:00 P.M. Mountain time on ________, 200_, one fully paid and
non-assessable share of common stock, $.0001 par value per share, of Bluegate
Corporation, a Delaware corporation (the "Company"), upon payment of $1.50 per
share (the "Exercise Price"); provided, however, that the number of shares of
the Company's common stock purchasable upon exercise of each Warrant may be
increased or reduced and the Exercise Price adjusted in the event of certain
contingencies provided for in the Warrant Agreement described below. Payment of
the Exercise Price of Warrants represented by this Warrant Certificate shall be
made in lawful money of the United States of America by check or wire transfer
payment payable to the order of the Warrant Agent for the account of the
Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions
contained in the Warrant Agreement dated as of __________, 2001 between the
Company and Corporate Stock Transfer, Inc. ("Warrant Agent"). Copies of the
Warrant Agreement are on file at the office of the Warrant Agent.
In order to exercise these Warrants, the form of election to purchase on
the reverse side must be properly completed and executed. If Warrants
represented by this Warrant Certificate are exercised with respect to fewer than
all shares purchasable, certificates representing Warrants to purchase the
remaining number of shares will be issued. The Company shall not be required to
issue fractions of shares upon the exercise of Warrants.
Warrants are transferable at the office of the Warrant Agent (or of its
successor as Warrant Agent) by the Registered Owner thereof in person or by
attorney duly authorized in writing, in the manner and subject to the
limitations on transfer set forth in the Warrant Agreement, upon surrender of
the Warrant Certificate and the payment of transfer taxes, if any. Upon any such
transfer, a new Warrant Certificate or new Warrant Certificates of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of shares of the Company's common stock, will be issued
to the
20
transferee in exchange for this Warrant Certificate, subject to the limitations
set forth in the Warrant Agreement.
This Warrant Certificate, when surrendered at the office of the Warrant
Agent (or of its successor as Warrant Agent) by the Registered Owner in person
or by attorney duly authorized in writing, may be exchanged for any other
Warrant Certificates of different denominations, of like tenor and representing
in the aggregate the right to purchase a like number of shares, subject to the
limitations provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's common stock or other
securities purchasable upon the exercise of Warrants are closed for any reason,
the Company shall not be required to make delivery of certificates for the
securities purchasable upon such exercise until the date of the reopening of
said transfer books.
The Registered Owner shall not be entitled to any of the rights of a
stockholder of the Company prior to exercise hereof.
Subject to the provisions of the Warrant Agreement, the Warrants may be
redeemed at the option of the Company for a redemption price of $.001 per
Warrant on not less than 30 days' notice, provided that (i) the closing bid
price for the Company's common stock, as reported by the market on which the
common stock trades, has exceeded the Exercise Price by $.50 for any 20
consecutive trading days, and (ii) any notice of the call for redemption is
given not more than 10 business days after the conclusion of such 20 consecutive
trading days. In the event the Company exercises its right to redeem the
Warrants, the Warrants will be exercisable until the close of business on the
date fixed for redemption in such notice. If any Warrant called for redemption
is not exercised by such date, it will cease to be exercisable and the
Registered Owner will be entitled only to the redemption price.
Prior to due presentment for registration or transfer thereof, the Company
and the Warrant Agent may treat the Registered Owner as the absolute owner
hereof and of each Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly authorized officer
of the Company or the Warrant Agent) for all purposes and shall not be affected
by any notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
21
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Bluegate Corporation
SEAL
By:
----------------------------
Rowland W. Day II, President
By:
----------------------------
Xxxxxx Xxx, Secretary
COUNTERSIGNED:
, as
-------------------------
Warrant Agent
By:
----------------------------
Authorized Officer
22
EXERCISE
The undersigned Registered Owner hereby irrevocably elects to exercise
_______ Warrants represented by this Warrant Certificate, and to purchase the
shares of Common Stock of the Company issuable upon the exercise of such
Warrants, and requests that certificates for such shares shall be issued in the
name of:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
and be delivered to:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
Please insert social security
or other identifying number: _________________________
and, if such number of Warrants shall not be all of the Warrants evidenced
by the Warrant Certificate, that a new Warrant Certificate for the balance of
such Warrants be registered in the name of and delivered to, the Registered
Owner at the address stated below.
IMPORTANT: The name of the person exercising this Warrant must correspond
with the name of the Warrantholder written on the face of this Warrant
Certificate in every particular, without alteration or any change whatever,
unless it has been assigned by completing the Assignment form below.
Dated: _____________, 200_ _____________________________
Signature of Registered Owner
SIGNATURE GUARANTEE _____________________________
Print name
_____________________________
_____________________________
Address
23
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print or type name and address)
Please insert social security
or other identifying number: _________________________
____________ of the Warrants represented by this Warrant Certificate, and
hereby irrevocably constitutes and appoints any officer of the Company or its
transfer agent and registrar as lawful Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the
premises.
Dated: _____________, 200_ _____________________________
Signature of Registered Owner
_____________________________
Print name
IMPORTANT: Every registered owner of this Certificate must sign it to
assign or otherwise transfer Warrants. The above signature or signatures must
correspond with the name or names written on the face of this Warrant
Certificate in every particular, without alteration, enlargement or any change
whatever. Each signature should be "medallion" guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan Associations and
Credit Unions) with membership in an approved signature guarantee Medallion
Program pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.
SIGNATURE GUARANTEE:
