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Exhibit 4.1
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SUCH ACT OR, AN
OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT.
| Warrant No.:
W-08-01 |
Right to
Purchase: 1,000,000
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Date:
February 28, 2008
THIS CERTIFIES THAT , for value received, SAI Corporation
(the " Holder "), is
entitled to purchase from BLUEGATE
CORPORATION , a Nevada corporation (the " Company "), at any time from February
28, 2008 until 5:00 p.m. (EST) on February 28, 2013, 1,000,000
fully paid and non-assessable shares of the Company's common stock,
par value $0.001 per share (" Common Stock "), at an exercise price of
$0.0333334 per share, as adjusted.
1. The
Company is issuing this Warrant to the Holder as partial
consideration for SAI Corporation's agreement to lend up to
$700,000 to the Company pursuant to that certain Promissory
Note and Security Agreement by and between SAI Corporation and
the Company on or about February 28, 2008.
2. (a) To
exercise this Warrant or any part of this Warrant, the Holder
must deliver to the Company (collectively, the " Exercise Documentation "): (i) a
completed exercise agreement a form of which is attached; (ii)
this Warrant; and (iii) a check payable to the Company in an
amount equal to the product of the exercise price and the
number of shares the Holder desires to
purchase. The Company will, without charge, issue
certificates for shares of Common Stock purchased upon
exercise of this Warrant within five days after receipt of the
Exercise Documentation. Unless this Warrant
has expired, or all of the purchase rights represented by this
Warrant have been exercised, the Company will also prepare a
new Warrant, substantially identical to this Warrant,
representing the rights formerly represented by this Warrant
which have not expired or been exercised.
(b) If,
but only if, at any time after one year from the date of
issuance of this Warrant there is no effective registration
statement registering the resale of the Common Stock
underlying this Warrant by the Holder, this Warrant may also
be exercised, in whole or in part, at such time by means of a
"cashless exercise" in which the Holder shall be entitled to
receive a certificate for the number of shares of Common Stock
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
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(A)
=
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the
closing bid price on the trading day preceding the date of such
election;
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(B)
=
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the
Exercise Price of the Warrants, as adjusted; and
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(X) =
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the
number of shares of Common Stock issuable upon exercise of the
Warrants in accordance with the terms of this Warrant.
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3. The
Company will at all times reserve and keep available for
issuance upon the exercise of this Warrant such number of its
authorized but un-issued shares of Common Stock as will be
sufficient to permit the exercise in full of this Warrant, and
upon such issuance such shares of Common Stock will be validly
issued, fully paid and non-assessable.
4. This
Warrant does not and will not entitle the Holder to any voting
rights or other rights as a stockholder of the
Company.
(a)
Stock Splits,
etc. The number and kind of securities purchasable upon
the exercise of this Warrant and the exercise price shall be
subject to adjustment from time to time upon the happening of
any of the following. In case the Company
shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii)
combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv) issue any shares of
its capital stock in a reclassification of the Common Stock,
then the number of shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that
the Holder shall be entitled to receive the kind and number of
shares or other securities of the Company which it would have
owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the
kind and number of shares or other securities of the Company
which are purchasable hereunder, the Holder shall thereafter
be entitled to purchase the number of shares or other
securities resulting from such adjustment at an exercise price
per share or other security obtained by multiplying the
exercise price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the
number of shares or other securities of the Company resulting
from such adjustment. An adjustment made pursuant
to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date,
if any, for such event.
(b)
Pro
Rata Distributions. If the Company, at any time prior
to the termination date of this Warrant, shall distribute to
all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any security other than
the Common Stock (which shall be subject to the above
section), then in each such case the e
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