EXECUTION VERSION

 

The rights of the holder hereof are subordinate and inferior and subject to the
rights of Cardinal Bank (Lender) under a Debt Subordination Agreement among
Lender, Gutteridge limited, widepoint global solutions, inc., WidePoint
Corporation, and THE subsidiaries of widepoint corporation dated MAY 1, 2014.

 

SUBORDINATED UNSECURED LOAN NOTE (“Loan Note”)

 

1.DATE:                 1st day of May, 2014

 

2.This Loan Note is from:

 

2.1.WidePoint Global Solutions, Inc. a Delaware Corporation with an address at
7926 Jones Branch Drive, Suite 520, McLean, Virginia 22102 (“Promisor”) ;

 

and is made and addressed to

 

2.2.Gutteridge Limited, an Irish company with an address at Soft-Ex House, South
County Business Park, Leopardstown, Dublin 18 (“Holder”).

 

3.RECITALS:

 

This Loan Note is made pursuant to a share sale and purchase agreement of even
date herewith and made between the Holder of the one part and the Promisor of
the other part whereby the Promisor agreed to purchase and the Holder agreed to
sell all of the shares in the Company (as that expression is hereinafter
defined) to the Promisor for the consideration provided for therein which
includes the issue of this Loan Note.

 

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4.DEFINITIONS

 

“Auditors” means the Company’s auditors being PricewaterhouseCoopers;    
“Business Day” a day other than a Saturday, Sunday or public holiday in Ireland
when banks in Dublin are open for business;     “Credit Agreement” means the
Commercial Loan Agreements, dated as of December 30, 2011 (as amended, modified,
supplemented, extended, restated, refinanced, replaced or refunded from time to
time), by and among the Promisor, WidePoint Corporation, certain subsidiaries of
WidePoint Corporation and the various lenders from time to time party thereto,
including but not limited to Cardinal Bank, and any renewal, extension,
restatement, refinancing or refunding thereof.       “Company” means Soft-ex
Communications Limited and its subsidiaries (as subsidiary is defined in Section
155 of the Companies Act, 1963);     “Completion” means completion of the
purchase of the shares in the Company by the Promisor pursuant to the Share Sale
and Purchase Agreement;     “Debt Subordination means the Debt Subordination
Agreement dated     Agreement” 1 May 2014 by and among the Promisor, certain
subsidiaries of WidePoint Corporation, the Holder and the various lenders from
time to time party to the Credit Agreement, including but not limited to
Cardinal Bank, and any renewal, extension, restatement, refinancing or refunding
thereof;

 

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“Due Date” means 30 days subsequent to completion of 12 months’ trading by the
Company commencing the day subsequent to Completion;     “Events of Default”
means the events described in Clause 8.1;     “Higher Interest Rate” means ten
percent (10%) per annum;     “Holder” means Gutteridge Limited and its
successors, assigns and legal successors in title including but not limited to
any party to whom the benefit of this Loan Note has been novated to;    
“Holder’s Bank Account” means such bank account as shall be designated in
writing or by email by the Holder’s Nominee to the Promisor; prior to the Due
Date;     “Holder’s Nominee” means Darren Daly of ByrneWallace Solicitors (or
such other partner of ByrneWallace as is nominated by the partnership), contact
details 88 Harcourt Street, Dublin 2, (email: ddaly@byrnewallace.com);    
“Holder Notice” means a notice served by the Promisor on the holders of the
then-existing Senior Indebtedness in the circumstances described in Clause 9.2;

 

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“Holder Notice Period” means the period of ninety days commencing with the date
of delivery of a Holder Notice to the holders of the then-existing Senior
Indebtedness pursuant to the provisions of Clause 9.2;     “Interest” means
simple interest at the per annum rate of three percent (3%) and further
described and calculated in accordance with Clause 5.1;     “Loan Note” means
this loan note;     “Note Funds” means the Principal and Interest;    
“Obligation” means any principal, interest, premium, penalties, fees, expenses,
indemnities and other liabilities and obligations (including guarantees of the
foregoing liabilities and obligations) payable under the documentation governing
any Senior Indebtedness;     “Post-Completion Period” means the final three
calendar months of the twelve-month period following Completion;    
“Pre-Completion Period” means the final three calendar months of the twelve
month period immediately prior to Completion;     “Post-Completion Revenues”
means aggregated Revenues generated by the Company during the Post-Completion
Period;     “Pre-Completion Revenues” means aggregated Revenues generated by the
Company during the Pre-Completion Period;

 

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“Principal” means US$1,000,000;     “Promisor” means WidePoint Global Solutions,
Inc.;     “Revenues” means turnover generated by the Company and calculated in
respect of the Post-Completion Period and the Pre-Completion Period respectively
using the same turnover recognition policies, and the same accounting
principles;     “Senior Indebtedness” means all Obligations (i) of the Promisor
under, or in respect of, (x) the Credit Agreement, and (y) each other Loan
Document (as defined in the Credit Agreement) to which the Promisor is a party;
    “Subordinated Indebtedness” means the Principal and all Interest on, and all
other amounts owing in respect of, this Loan Note;     “Share Sale and Purchase
Agreement” means the agreement described in Clause 3 above.

 

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5.NOW IT IS HEREBY AGREED as follows:-

 

5.1.Subject to the provisions of Clause 6, the Promisor hereby agrees to pay the
Principal to the Holder on the Due Date (or on any earlier date if the Principal
is paid on a date earlier than the Due Date) together with the Interest computed
on the Principal from the date hereof to the Due Date (or earlier date as
hereinbefore specified) on the basis of a year of 365 days and actual days
elapsed (including the first day but excluding the last day) occurring during
the period in respect of which Interest is payable. Notwithstanding the
foregoing, all amounts outstanding at any time under this Loan Note shall be
subject to withholding, adjustment and offset as provided in the Share Sale and
Purchase Agreement and the Deed of Indemnity (as such term is defined in the
Share Sale and Purchase Agreement).

 

5.2.Any payment to be made by Promisor shall be in one lump sum by electronic
funds transfer to the Holder’s Bank Account as nominated by the Holder’s
Nominee.

 

5.3.Save as provided for in this Loan Note and the Debt Subordination Agreement
the Note Funds shall rank pari passu equally and rateably without discrimination
or preference as an unsecured obligation of the Promisor.

 

5.4.Where any payment to the Holder, whether of Principal, Interest or
otherwise, is due in accordance with the terms of this Loan Note on a day that
is not a Business Day, payment shall take place on the next succeeding Business
Day. If that next succeeding Business Day is in the month following the month in
which payment would otherwise be made, payment shall take place on the
immediately preceding Business Day.

 

5.5.Except as set forth in the Share Sale and Purchase Agreement, payments of
Principal and Interest under this Loan Note shall be paid by the Promisor to the
Holder, without any deduction, adjustment or withholding (whether in respect of
any set-off, counterclaim or otherwise whatsoever) unless the deduction or
withholding is required by law.

 

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6.PAYMENT TERMS

 

6.1.The right of the Holder to receive payment of the Note Funds shall be
conditional upon the Company having complied with the condition as set out in
clause 6.3. The right of the Holder to receive payment of the Note Funds shall
not be conditional on any other factor, other than satisfaction of any
conditions to payment set forth in the Debt Subordination Agreement.

 

6.2.Revenues shall be calculated by the Company and certified by the Auditors.
The Auditors shall provide such a certificate within 21 days of the end of the
Post-Completion Period. In the event of any dispute between the parties in
relation to the calculation of the Pre-Completion Revenues or the
Post-Completion Revenues then the dispute shall be resolved using the dispute
resolution mechanism as set out in clause 4.3 of the Share Sale and Purchase
Agreement.

 

6.3.If Post-Completion Revenues are a sum that is at least equal to, or exceeds
75% of Pre-Completion Revenues (as certified by the Auditors), then the Note
Funds shall be repaid in full on the Due Date.

 

6.4.If Post-Completion Revenues are a sum that is less than 75% of
Pre-Completion Revenues, then the full face value of the Loan Note shall be
abrogated and the obligations of the Promisor under this Loan Note shall be
cancelled and waived and the Promisor shall be under no further obligation
whatsoever to the Holder under this Loan Note whether in regard to the
Principal, Interest or otherwise.

 

6.5.If the Promisor is obliged to repay the Note Funds pursuant to clause 6.3
and if the Note Funds have not been fully repaid on the Due Date, then the
Higher Interest Rate shall be payable on the then-outstanding Principal with
effect from the Due Date until payment in full.

 

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6.6.In the event that the Promisor shall sell the shares of the Company acquired
by it under the Share Sale and Purchase Agreement or sell all or substantially
all of the assets of the Company to a third party (and not, in either case, for
the avoidance of doubt, as part of a reconstruction, reorganisation or
amalgamation between the Promisor and any subsidiary or holding company) during
the term of this Loan Note, the Due Date shall be brought forward to a date
being 30 days following completion of any such sale. In such circumstances the
repayment of the Note Funds by the Promisor shall not be conditional upon the
Company having generated Post-Completion Revenues of an amount being not less
than 75% of the Pre-Completion Revenues generated by the Company.

 

6.7.The Principal and Interest may be paid in whole or in part at any time prior
to the Due Date without premium or penalty (other than the payment of the
Interest then due).

 

7.FEES AND EXPENSES

 

7.1.Whenever a solicitor is used to obtain payment under, or to otherwise
enforce, this Loan Note or to enforce, declare, or adjudicate any rights or
obligations under this Loan Note, whether by issuing proceedings or by any other
means whatsoever, his/her reasonable legal fees, counsel’s fees, Value Added Tax
thereon and all other costs and expenses reasonably incurred shall be payable by
the non-defaulting party.

 

8.EVENTS OF DEFAULT

 

8.1.Each of the following shall constitute an Event of Default hereunder:-

 

8.1.1.If the Promisor fails to pay the Principal or Interest on the Due Date
which failure continues for a period of ten (10) days after Promisor’s receipt
of written notice from the Holder;

 

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8.1.2.If the Promisor shall admit in writing its inability to pay its debts as
they become due, file a petition in bankruptcy or make a petition to take
advantage of any insolvency act; make an assignment for the benefit of
creditors, commence a proceeding for the appointment of a receiver, trustee,
liquidator or conservator of all or any substantial part of its property; file a
petition or answer seeking reorganization or similar relief under the federal
bankruptcy laws or any similar law or statute governing the relative rights of
debtors and creditors; and

 

8.1.3.If any creditor of the Promisor shall file a petition in bankruptcy
against the Promisor and if such petition shall not be discharged or dismissed
within sixty (60) calendar days after the date on which such petition was filed.

 

8.2.In the event of the happening of any Event of Default, then the Principal
and Interest shall forthwith become due and payable without any notice or demand
whatsoever and the Higher Interest Rate shall be payable on the then-outstanding
Principal with effect from the happening of the Event of Default until payment
in full of the outstanding Note Funds.

 

9.SUBORDINATION PROVISIONS

 

9.1.Subordination of Liabilities

 

9.1.1.The Promisor covenants and agrees, and the Holder, by its acceptance of
this Loan Note, likewise covenants and agrees, that the payment of the
Subordinated Indebtedness is hereby expressly subordinated, to the extent and in
the manner set forth in the Debt Subordination Agreement.

 

9.2.Delivery of Holder Notice.

 

9.2.1.In the event that any default or event of default shall exist in respect
of the Senior Indebtedness then-outstanding solely as a result of the Holder
declaring an Event of Default under this Loan Note, the Holder shall deliver a
Holder Notice of such Event of Default to the holders of then-existing Senior
Indebtedness which Holder Notice shall include, at a minimum,

 

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(a) a detailed description of such Event of Default,

(b) a statement by the Holder that the Holder intends to exercise its rights
under this Clause 9.2.1 and that action is required by the holders of
then-existing Senior Indebtedness in order to prevent the Holder from exercising
its rights under this Clause 9.2.1,

(c) a copy of this Loan Note,

(d) a notice address for the Holder, and

(e) the date on which the Holder Notice Period shall terminate.

If, during the Holder Notice Period, each holder of then-existing Senior
Indebtedness shall either,

 

(i)deliver to the Holder a signed writing waiving its rights to declare a
default or event of default under the Senior Indebtedness as a result of the
Event of Default which is the subject of the Holder Notice; or

 

(ii)fail to deliver to Holder a notice in writing indicating that such holder of
then-existing Senior Indebtedness intends to exercise its rights under the
Senior Indebtedness with respect to such default or event of default,

 

then the Holder may pursue any and all remedies it may have under this Loan
Note.

 

9.3.Subordination to Prior Payment of all Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Promisor.

 

9.3.1.Upon any distribution of assets of the Promisor or upon dissolution,
winding up, liquidation or reorganisation of the Promisor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise):

 

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9.3.1.1.the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including, without
limitation, post-petition interest at the rate provided in the documentation
with respect to the Senior Indebtedness, whether or not such post-petition
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before the Holder is entitled to receive any payment of any kind or
character on account of the Subordinated Indebtedness;

 

9.3.1.2.any payment or distribution of assets of the Promisor of any kind or
character, whether in cash, property or securities to which the Holder would be
entitled except for the provisions of this Clause 9, shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Indebtedness or to
the trustee or trustees under any indenture under which any instruments
evidencing any Senior Indebtedness may have been issued as their respective
interests may appear to the extent necessary to make payment in full in cash of
all Senior Indebtedness remaining unpaid.

 

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9.4.Obligation of the Promisor Unconditional.

 

9.4.1.Nothing contained in this Clause 9 is intended to or shall impair, as
between the Promisor, on one hand, and the Holder, on the other hand, the
obligations of the Promisor to pay to the Holder all sums due on this Loan Note
as and when the same shall become due and payable in accordance with the terms
hereof, or is intended to or shall affect the relative rights of the Holder and
creditors of the Promisor other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Holder from exercising all remedies
otherwise permitted by applicable law upon an Event of Default under this Loan
Note, subject to the provisions of this Clause 9 and the rights, if any, under
this Clause 9 of the holders of Senior Indebtedness in respect of cash,
property, or securities of the Promisor received upon the exercise of any such
remedy. Upon any distribution of assets of the Promisor referred to in this
Clause 9, the Holder shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Holder, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of Senior Indebtedness and any other indebtedness
of the Promisor, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Clause 9.

 

9.5.Rights to Alter Terms of Senior Indebtedness; No Impairment.

 

9.5.1.The holders of Senior Indebtedness may, without in any way affecting the
obligations of the Holder with respect hereto, at any time or from time to time
and in their absolute discretion, change the manner, place or terms of payment
of, change or extend the time of payment of, or renew, increase or otherwise
alter, any Senior Indebtedness or amend, modify or supplement any agreement or
instrument governing or evidencing such Senior Indebtedness or any other
document referred to therein, or exercise or refrain from exercising any other
of its rights under the Senior Indebtedness including, without limitation, the
waiver of default thereunder and the release of any collateral securing such
Senior Indebtedness, all without notice to or assent from the Holders.

 

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9.5.2.No right of any present or future holders of the Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Promisor
or by any act or failure to act in good faith by any such holder, or by any
noncompliance by the Promisor with the terms and provisions of this Loan Note,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with.

 

9.6.Further Assurance

 

9.6.1.The Holder hereby agrees to execute and deliver to the holders of Senior
Indebtedness within 10 days of receiving a written request therefor, any
additional subordination agreements or other evidence of subordination which may
be required by the holders of Senior Indebtedness from time to time.

 

10.NOTICES

 

10.1.Notices or other communications (a “Notice”) given in connection with this
Loan Note shall be in writing and shall be:

 

(a)delivered by hand to the address in Clause 10.3 of the party to which the
Notice is being given or to such other address as such party shall communicate
to the party giving the Notice; or

 

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(b)sent by internationally recognised courier marked for the attention of the
contact person in Clause 10.3 of the party to which the Notice is being given or
to such other contact person as such party shall communicate to the party giving
the Notice.

 

For the avoidance of doubt, a communication or message contained in the body of
an e-mail message shall not constitute a Notice for the purposes of this Loan
Note.

 

10.2.Every Notice given in accordance with this clause shall be deemed to have
and been received as of the day of delivery; PROVIDED THAT if the receipt is not
within working hours (being 9 am to 5 pm on a Business Day), Notice shall be
deemed to be given or made at the start of working hours on the next Business
Day.

 

10.3.The relevant contact person, address and email address of each party for
the purposes of this Loan Note are:

 

Name of party Contact Details     Promisor WidePoint Global Solutions, Inc.    
  Contact Person: James McCubbin       Address: 7926 Jones Branch Drive, Suite
520       McLean, Virginia 22102       Email address: jmccubbin@widepoint.com  
  Holder’s Nominee ByrneWallace Solicitors       Contact Person: Darren Daly    
  Email address: ddaly@byrnewallace.com       Address: 88 Harcourt Street,
Dublin 2, Ireland

 

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10.4.All notices to be secured by or upon the Holder pursuant to this Loan Note
shall be served on the Holder’s Nominee.

 

11.SUBORDINATION PAYMENT

 

Notwithstanding anything to the contrary set forth in this Loan Note, in the
event that the Principal and Interest outstanding under this Loan Note shall not
be paid as of the Due Date solely as a result of the provisions of Clause 9 of
this Loan Note and or the provisions of the Debt Subordination Agreement, then,
in addition to the payment of Principal and Interest (including Higher Interest)
outstanding under this Loan Note, the Promisor shall pay to the Holder a
one-time payment in the amount of Ten Thousand Dollars (US$10,000), with such
payment to be made to the Holder simultaneously with the payment of Principal
and Interest (including Higher Interest) under this Loan Note.

 

12.NO VARIATIONS ETC.

 

This Loan Note may not be varied, changed, waived, discharged, or terminated
except by an instrument in writing signed by the Promisor and the Holder.

 

13.COUNTERPARTS

 

This Loan Note may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same Loan Note. This Loan Note, to the extent signed and delivered by
means of a facsimile machine or other electronic transmission (including .pdf
files), shall be treated in all manner and respects and for all purposes as an
original instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person.

 

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14.JURISDICTION AND LAW

 

14.1.The Courts of Ireland have exclusive jurisdiction to hear and decide any
suit, actions or proceedings, and to settle any disputes, which may arise out of
or in connection with this Loan Note, and for these purposes, each party
irrevocably submits to the jurisdiction of the Courts of Ireland.

 

14.2.This Loan Note shall be governed by and shall be construed in accordance
with the laws of Ireland.

 

15.MISCELLANEOUS

 

15.1.If any court of competent jurisdiction determines that any of the
provisions of this Loan Note are illegal or unenforceable, then such provisions
shall be construed so that the remaining provisions of this Loan Note shall not
be affected, but shall remain in full force and effect, and any such illegal or
unenforceable provisions shall be deemed, without further action on the part of
any person or entity, to be modified, amended, severed and/or limited, but only
to the extent necessary to render the same valid and enforceable in the
applicable jurisdiction.

 

15.2.Except to the extent otherwise expressly set forth in this Loan Note or the
Debt Subordination Agreement, neither this Loan Note nor the rights or
obligations of Promisor or Holder hereunder, shall be assigned, transferred or
otherwise encumbered, in whole or in part, whether voluntarily or by operation
of law, without the prior written consent of the Promisor and Holder, and any
attempted assignment without such consent shall be void and without legal
effect.

 

16.COVENANTS OF PROMISOR

 

16.1.Following Completion and during the period of this Loan Note, the Promisor
shall procure that the Company shall:

 

16.1.1.not deliberately do anything the primary intent of which is to adversely
affect the business of the Company;

 

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16.1.2.not, except with the prior written consent of Holder, acquire (whether by
purchase, subscription, incorporation or otherwise) any business or trade;

 

16.1.3.not transfer, divert or direct the custom of any existing client of the
business of the Company as of the date of this Loan Note elsewhere or seek to do
so; or

 

16.1.4.not accelerate the payment of any cost or expenditure payable or delay
the invoicing, recognition or receipt of any revenue receivable or otherwise
take or omit to take any step outside the ordinary course of business with the
intention of artificially decreasing turnover.

 

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IN WITNESS WHEREOF, the Promisor has caused this Loan Note to be executed by its
duly authorised officers.

 

Attest:   PROMISOR:           WIDEPOINT GLOBAL SOLUTIONS, INC.       By:     By:
    James T. McCubbin     Steve L. Komar   Secretary     President

 

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