1
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 _________________________ (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 and maintained by
________________________________ (the "Escrow Agent") and can be released only
in accordance with the terms of the escrow agreement between the Company and the
Escrow Agent 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.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties agree as follows:
2
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 __________________________.
(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.
[Eastern] 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., [Eastern] Time on the next
following day which in the State of _________ 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.
(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.
2
3
(j) "Registration Statement" shall mean the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-__________), as
amended.
(k) "Transfer Agent" shall mean _____________________ or any
successor, as the transfer agent and registrar of the Common
Stock.
(l) "Warrant Agent" shall mean _____________________________________
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.
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
3
4
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 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
4
5
the Registered Owner and collected funds in an amount equal to the Exercise
Price shall be delivered to the Escrow Agent. 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 delivery thereof to the Escrow Agent.
(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 delivered to the Escrow Agent or 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.
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
5
6
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.
(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
6
7
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 maintained by ______________ as Escrow Agent pursuant to the
Escrow Agreement between the Company and Escrow Agent 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 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
7
8
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.
(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., [Eastern] 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.
8
9
(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.
(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
9
10
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 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.
10
11
(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 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: _____________________
11
12
----------------------
----------------------
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 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________________, 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.
12
13
COMPANY
Bluegate Corporation
By:
--------------------------------------
____________________, President
By:
--------------------------------------
____________________, Secretary
WARRANT AGENT
-----------------------------------------
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. [Eastern] 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 _____________________________ ("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:
--------------------------------------
, President
By:
--------------------------------------
, Secretary
COUNTERSIGNED:
, 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. [Eastern] 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 _____________________________ ("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:
--------------------------------------
, President
By:
--------------------------------------
, 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:
