Exhibit 10.1

 

Text Box: [image_001.gif]

*00000000100402750109600410201701*

 

CHANGE IN TERMS AGREEMENT

 

 

Principal

$6,000,000.00

 

Loan Date

04-10-2017

Maturity

07-31-2017

Loan No

1004027501

Call Coll Account Officer SKC Initials

References in the boxes above are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

Any item above containing has been omitted due to text length limitations.

 

 

 

Borrower:

WidePoint Corporation; WidePoint Solutions Corp.; WidePoint IL, Inc.; WP NBIL,
Inc.; WidePoint Ohio Real Estate Corp.; WidePoint Cybersecurity Solutions
Corporation; WidePoint Integrated Solutions Corp.; Advanced Response Concepts
Corporation; Protexx Technology Corporation; WidePoint Global Solutions, Inc.;
and Soft-Ex Communications Limited

7926 Jones Branch Drive, Suite 520
McLean, VA 22102-3371

 

 

Lender:

Cardinal Bank

8270 Greensboro Drive

Suite 500

McLean, VA 22102

 

 

 

 

IMPORTANT NOTICE

 

THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

 

 

 

 

Principal Amount: $6,000,000.00 Date of Agreement: April 10, 2017

 

DESCRIPTION OF EXISTING INDEBTEDNESS. That certain Promissory Note from Borrower
payable to Lender dated December 30, 2011 in the original principal amount of
Eight Million and No/100 Dollars ($8,000,000.00) and now currently $6,000,000 as
modified and extended, from time to time, (collectively, the “Note”).

 

LOAN AGREEMENT. This Agreement is subject to that certain Loan Agreement between
Borrower and Lender dated November 4, 2016, as amended, all terms and conditions
of which, notwithstanding anything herein to the contrary, are incorporated and
made a part herein.

 

DESCRIPTION OF COLLATERAL. In addition to any other collateral that may be
pledged, either now or in the future, the indebtedness evidenced by this
agreement is secured by 1st position blanket lien on business assets of all
Borrowers as stated herein.

 

DESCRIPTION OF CHANGE IN TERMS. Extend maturity date to July 31, 2017.

 

PROMISE TO PAY. WidePoint Corporation; WidePoint Solutions Corp.; WidePoint IL,
Inc.; WP NBIL, Inc.; WidePoint Ohio Real Estate Corp.; WidePoint Cybersecurity
Solutions Corporation; WidePoint Integrated Solutions Corp.; Advanced Response
Concepts Corporation; Protexx Technology Corporation; WidePoint Global
Solutions, Inc.; and Soft-Ex Communications Limited ("Borrower") jointly and
severally promise to pay to Cardinal Bank ("Lender"), or order, in lawful money
of the United States of America, the principal amount of Six Million & 00/100
Dollars ($6,000,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.

 

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on July 31, 2017. In addition, Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning April 30, 2017, with all subsequent interest payments to
be due on the last day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; then to any late charges; and then to any unpaid
collection costs.

 

VARIABLE INTEREST RATE. The interest rate on this loan is subject to change from
time to time based on changes in an independent index which is the the base rate
on corporate loans posted by at least 70% of the 10 largest U.S. banks known as
the Wall Street Journal U.S. Prime Rate (the "Index"). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. The interest rate change will not occur more often than
each day. Borrower understands that Lender may make loans based on other rates
as well. The Index currently is 4.000% per annum. Interest on the unpaid
principal balance of this loan will be calculated as described in the "INTEREST
CALCULATION METHOD" paragraph using a rate of 0.750 percentage points over the
Index, rounded to the nearest 0.001 percent, adjusted necessary for any minimum
and maximum rate limitations described below, resulting in an initial rate of
4.750% per annum based on a year of 360 days. NOTICE: Under no circumstances
will the interest rate on this loan be less than 4.250% per annum or more than
the maximum rate allowed by applicable law.

 

INTEREST CALCULATION METHOD. Interest on this loan is computed on a 365/360
basis; that is, by applying the ratio of the interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this loan is computed using this method.

 

RECEIPT OF PAYMENTS. All payments must be made in U.S. dollars and must be
received by Lender at:

 

Cardinal Bank

8270 Greensboro Drive Suite 500

Mclean, VA 22102

 

All payments must be received by Lender consistent with any written payment
instructions provided by Lender. If a payment is made consistent with Lender's
payment instructions but received after 5:00PM Eastern Standard Time on a
business day, Lender will credit Borrower's payment on the next business day.

 

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than is due. Early payments
will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments of accrued unpaid interest. Rather,
early

 

 

 

 

Text Box: [image_004.gif]

*00000000100402750109600410201702*

 

CHANGE IN TERMS AGREEMENT

Loan No: 1004027501 (Continued) Page 2

 

 

  

payments will reduce the principal balance due. Borrower agrees not to send
Lender payments marked "paid in "without recourse", or similar language. If
Borrower sends such a payment, Lender may accept without losing any of Lender's
rights under this Agreement, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the
payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: Cardinal Bank, 8270 Greensboro Drive
Suite 500 Mclean, VA 22102.

 

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment.

 

INTEREST AFTER DEFAULT. Upon default, at Lender's option, and permitted by
applicable law, Lender may add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in this
Agreement (including any increased rate). Upon default, the interest rate on
this loan shall be increased by adding an additional 2.000 percentage point
margin ("Default Rate Margin"). The Default Rate Margin shall also apply to each
succeeding interest rate change that would have applied had there been no
default. However, in no event will the interest rate exceed the maximum interest
rate limitations under applicable law.

 

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

Payment Default. Borrower fails to make any payment when due under the
Indebtedness.

 

Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or ability to perform Borrower's obligations under
this Agreement or any of the Related Documents.

 

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going
business, or a trustee or receiver is appointed for Borrower or for all or a
substantial portion of the assets of Borrower, or Borrower makes a general
assignment for the benefit of Borrower's creditors, or Borrower files for
bankruptcy, or an involuntary bankruptcy petition is filed against Borrower and
such involuntary petition remains undismissed for sixty (60) days.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Indebtedness. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply there is a good faith dispute by Borrower as to
the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any Guaranty of the Indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.

 

Insecurity. Lender in good faith believes itself insecure.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance under this Agreement and all accrued unpaid interest, together with all
other applicable fees, costs and charges, any, immediately due and payable, and
then Borrower will pay that amount.

 

ATTORNEYS' FEES; EXPENSES. Subject to any limits under applicable law, upon
default, Borrower agrees to pay Lender's attorneys' fees and all of Lender's
other collection expenses, whether or not there is a lawsuit, including without
limitation legal expenses for bankruptcy proceedings.

 

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.

 

GOVERNING LAW. This Agreement will be governed by federal law applicable to
Lender and, to the extent not preempted by federal law, the laws of the
Commonwealth of Virginia without regard to its conflicts of law provisions. This
Agreement has been accepted by Lender in the Commonwealth of Virginia.

 

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the applicable courts for Fairfax County,
Commonwealth of Virginia.

 

CONFESSION OF JUDGMENT. Upon a default in payment of the Indebtedness at
maturity, whether by acceleration or otherwise, Borrower hereby irrevocably
authorizes and empowers Neil I. Title as Borrower's attorney-in-fact to appear
in the Arlington County clerk's office and to confess judgment against Borrower
for the unpaid amount of this Agreement as evidenced by an affidavit signed by
an officer of Lender setting forth the amount then due, attorneys' fees plus
costs of suit, and to release all errors, and waive all rights of appeal. By a
written instrument Lender may appoint a substitute for the above named
attorney-in-fact. If a copy of this Agreement, verified by an affidavit, shall
have been filed in the proceeding, will not be necessary to file the original as
a warrant of attorney. Borrower waives the right to any stay of execution and
the benefit of all exemption laws now or hereafter in effect. No single exercise
of the foregoing warrant and power to confess judgment will be deemed to exhaust
the power, whether or not any such exercise shall be held by any court to be
invalid, voidable, or void; but the power will

 

 

 

Text Box: [image_005.gif]

*00000000100402750109600410201703*

 

CHANGE IN TERMS AGREEMENT

Loan No: 1004027501 (Continued) Page 3

 

 

 

continue undiminished and may be exercised from time to time as Lender may elect
until all amounts owing on this Agreement have been paid in full.

 

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $34.00 Borrower makes
a payment on Borrower's loan and the check or preauthorized charge with which
Borrower pays is later dishonored.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.

 

COLLATERAL. Borrower acknowledges this Agreement is secured by The Word “Note”
means the Note dated December 30, 2011 and executed by WidePoint Corporation;
WidePoint Solutions Corp.; WidePoint IL, Inc.; WP NBIL, Inc.; WidePoint Ohio
Real Estate Corp.; WidePoint Cybersecurity Solutions Corporation; WidePoint
Integrated Solutions Corp.; Advanced Response Concepts Corporation; and Protexx
Technology Corporation in the original principal amount of $8,000,000 as
modified by that Change in Terms Agreement dated April 27, 2016 reducing the
principal amount to $6,000,000 among other things, together with all
modifications of and renewals, replacements, and substitutions for the note or
credit agreement.

 

LINE OF CREDIT. This Agreement evidences a revolving line of credit. Advances
under this Agreement may be requested either orally or in writing by Borrower or
by an authorized person. Lender may, but need not, require that all oral
requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. Borrower agrees to be liable for all sums either: (A)
advanced in accordance with the instructions of an authorized person or (B)
credited to any of Borrower's accounts with Lender. The unpaid principal balance
owing on this Agreement at any time may be evidenced by endorsements on this
Agreement or by Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Agreement (A)
Borrower or any guarantor is in default under the terms of this Agreement or any
agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Agreement; (B) Borrower or
any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Agreement or any other loan with Lender; (D) Borrower has
applied funds provided pursuant to this Agreement for purposes other than those
authorized by Lender; or (E) Lender in good faith believes itself insecure.

 

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the
non-signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

 

PRIOR NOTE. The Word “Note” means the Note dated December 30, 2011 and executed
by WidePoint Corporation; WidePoint Solutions Corp.; WidePoint IL, Inc.; WP
NBIL, Inc.; WidePoint Ohio Real Estate Corp.; WidePoint Cybersecurity Solutions
Corporation; WidePoint Integrated Solutions Corp.; Advanced Response Concepts
Corporation; and Protexx Technology in the original principal amount of
$8,000,000 as modified by that Change in Terms Agreement dated April 27, 2016
reducing the principal amount to $6,000,000 among other things, together with
all modifications of and renewals, replacements, and substitutions for the note
or credit agreement.

 

SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Agreement on
transfer of Borrower's interest, this Agreement shall be binding upon and inure
to the benefit of the parties, their heirs, personal representatives, successors
and assigns. If ownership of the Collateral becomes vested in a person other
than Borrower, Lender, without notice to Borrower, may deal with Borrower's
successors with reference to this Agreement and the Indebtedness by way of
forbearance or extension without releasing Borrower from the obligations of this
Agreement or liability under the Indebtedness.

 

MISCELLANEOUS PROVISIONS. If any part of this Agreement cannot be enforced, this
fact will not affect the rest of the Agreement. Lender may delay or forgo
enforcing any of its rights or remedies under this Agreement without losing
them. Each Borrower understands and agrees that, with or without notice to
Borrower, Lender may with respect to any other Borrower (a) make one or more
additional secured or unsecured loans or otherwise extend additional credit; (b)
alter, compromise, renew, extend, accelerate, or otherwise change one or more
times the time for payment or other terms of any indebtedness, including
increases and decreases of the rate of interest on the indebtedness; (c)
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any security, with or without the substitution of new collateral; (d)
apply such security and direct the order or manner of sale thereof, including
without limitation, any non-judicial sale permitted by the terms of the
controlling security agreements, as Lender in its discretion may determine; (e)
release, substitute, agree not to sue, or deal with any one or more of
Borrower's sureties, endorsers, or other guarantors on any terms or in any
manner Lender may choose; and (f) determine how, when and what application of
payments and credits shall be made on any other indebtedness owing by such other
Borrower. Borrower and any other person who signs, guarantees or endorses this
Agreement, to the extent allowed by law, waive presentment, demand for payment,
and notice of dishonor. Upon any change in the terms of this Agreement, and
unless otherwise expressly stated in writing, no party who signs this Agreement,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. If "Borrower"
consists of more than one party, the word "Borrower" as used in this Agreement
shall refer to any one or more of the parties comprising "Borrower," and each of
such parties shall be jointly and severally liable pursuant to this Agreement.

 

 

 

 

Text Box: [image_006.gif]

*00000000100402750109600410201704*

 

CHANGE IN TERMS AGREEMENT

Loan No: 1004027501 (Continued) Page 4

 

 

 

 

PRIOR TO SIGNING THIS AGREEMENT, EACH BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
EACH BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.