Item 1.01 Entry into a Material Definitive Agreement.
On May 1, 2014, WidePoint Global Solutions, Inc. ("WGS"), a wholly-owned
subsidiary of WidePoint Corporation ("WidePoint"), entered into a Share Sale and
Purchase Agreement (the "Agreement"), with Gutteridge Limited ("Gutteridge"), a
wholly-owned subsidiary of Soft-Ex Holdings Limited, and the shareholders of
Soft-Ex Holdings Limited, pursuant to which WGS purchased all of the outstanding
equity of Soft-ex Communications Limited ("SCL"). SCL, with headquarters in
Dublin, Ireland, is a provider of telecom data intelligence services offered as
a software as a service solution throughout the European and Middle Eastern
markets. SCL has two operating subsidiaries, Soft-Ex BV and Soft-Ex UK Limited,
which maintain offices and operations in Holland and the United Kingdom,
The Agreement contains customary representations, warranties and indemnities.
The purchase price for the outstanding equity of SCL consisted of (i) the
payment at closing of cash in the amount of $5 million, subject to a
post-closing net working capital adjustment, and (ii) the delivery of a
subordinated unsecured loan note in the principal amount of $1.0 million (the
"Note"). The Note accrues simple interest at the annual rate of 3% and provides
for a lump sum payment of principal and interest on May 31, 2015; provided,
however, that in the event that SCL fails to generate gross revenue for the
three (3) months ending April 30, 2015 that is at least equal to 75% of the
gross revenue generated by SCL for the three (3) months immediately preceding
the acquisition of SCL, then the full face value of the Note shall be abrogated
and all obligations of WGS under the Note shall be cancelled and waived. The
amounts due and owing under the Note will be accelerated to become due and
payable in full within 30 days following the consummation of a sale of SCL.
The foregoing summary is not intended to be complete and is qualified in its
entirety by reference to the Agreement, the Note and a Deed of Indemnity, copies
of which are attached hereto as Exhibits 2.1, 10.1 and 10.2, respectively, and
incorporated herein by reference. Certain schedules to the Agreement are omitted
and WidePoint will furnish supplementally a copy of any omitted schedules to the
Securities and Exchange Commission upon request.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth above under Item 1.01 is incorporated herein by
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 with respect to the Note is
incorporated herein by reference. The Note is attached hereto as Exhibit 10.1
and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 1, 2014, SCL entered into an Employment Agreement with Ian Sparling, the
Chief Executive Officer of SCL (the "Employment Agreement"), for Mr. Sparling to
continue to serve as the Chief Executive Officer of SCL. The Employment
Agreement provides for an annual base salary of €175,000. In addition, Mr.
Sparling shall be eligible to receive bonus compensation of up to 50% of his
annual salary. Mr. Sparling will also receive an annual automobile allowance in
the amount €16,500 and SCL will contribute up to €15,000 to SCL's pension
scheme. Mr. Sparling was also granted an option to purchase 200,000 shares of
common stock of WidePoint. The options have a term of 7 years, with the options
to vest in full on the fifth anniversary of the grant date of the options. The
vesting date of the options will accelerate in the event that certain
performance goals are achieved or in the event of a change in control of
The Employment Period will continue unless terminated earlier by (i) Mr.
Sparling or SCL upon 9 months' advance written notice to the other party, (ii)
SCL, immediately upon the provision of written notice to Mr. Sparling, provided
that the remuneration to which Mr. Sparling is entitled under the Employment
Agreement shall continue for a period of 9 months following such termination, or
(iii) by SCL upon the occurrence of certain events or actions by Mr. Sparling,
including Mr. Sparling being declared bankrupt or being found guilty of fraud,
serious misconduct or willful neglect to carry out his duties under the
The foregoing summary of the Employment Agreement is not intended to be complete
and is qualified in its entirety by reference to the Employment Agreement, a
copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
The financial information required to be filed with respect to the acquired
business described in Item 2.01 has not been filed with this initial Current
Report on Form 8-K. Instead, financial information will be filed by amendment
within 71 calendar days after the due date for the initial filing of this report
with the Securities and Exchange Commission, as permitted by Item 9.01(a)(4) of
(b) Pro Forma Financial Information.
The pro forma financial information required to be filed with respect to the
acquired business described in Item 2.01 has not been filed with this initial
Current Report on Form 8-K. Instead, the pro forma financial information will be
filed by amendment within 71 calendar days after the due date for the initial
filing of this report with the Securities and Exchange Commission, as permitted
by Item 9.01(b)(2) of Form 8-K.
Exhibit 2.1: Share Sale and Purchase Agreement, dated as of May 1, 2014
, by and
among WidePoint Global Solutions, Inc.
, Gutteridge Limited
and the shareholders
of Soft-Ex Holdings Limited
Exhibit 10.1: Subordinated Unsecured Loan Note, dated May 1, 2014
, by WidePoint
Global Solutions, Inc.
in favor of Gutteridge Limited
Exhibit 10.2: Deed of Indemnity, dated as of May 1, 2014
, by and between
WidePoint Global Solutions, Inc.
and Gutteridge Limited
Exhibit 10.3: Employment Agreement, dated as of May 1, 2014
, by and between
Soft-ex Communications Limited
and Ian Sparling