ASSET PURCHASE AGREEMENT

DATED JULY 31, 2008,

BY AND AMONG

WIDEPOINT CORPORATION,

PROTEXX ACQUISITION CORPORATION,

PROTEXX INCORPORATED,

PETER LETIZIA,

CHARLES B. MANUEL, JR.

AND

WILLIAM TABOR.

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT is made as of July 31, 2008 (the “Agreement”), by and among WidePoint Corporation, a Delaware corporation (“WidePoint”), Protexx Acquisition Corporation, a Delaware corporation (“Acquisition”), Protexx Incorporated, a Delaware corporation (“Protexx”), and Peter Letizia (“Letizia”), Charles B. Manuel, Jr. (“Manuel”) and William Tabor (“Tabor”) (with Letizia, Manuel and Tabor also being collectively referred to as the “Protexx Management Shareholders”). WidePoint, Acquisition, Protexx, Letizia, Manuel, Tabor, and the Protexx Management Shareholders are also hereinafter referred to individually as a “party” and collectively as the “parties.”

        WHEREAS, Protexx desires to sell to Acquisition and Acquisition desires to acquire from Protexx certain assets and assume certain specific liabilities of Protexx (the “Asset Purchase”) for the consideration and on the terms set forth in this Agreement;

        WHEREAS, certain intellectual property rights in software used by Protexx in the operation of Protexx’s Business (as herein defined) and related intellectual property have been conceived, developed, made, owned or otherwise by either or both of William Tabor and/or 22THEN LLC, each of whom has effectively and completely transferred all such intellectual property to Protexx prior to the date of this Agreement (collectively hereinafter referred to as the “Software Transfers”);

        WHEREAS, the Board of Directors of WidePoint and the Board of Directors of Acquisition have determined that the transactions contemplated by this Agreement (the “Transactions”) are in the best interests of WidePoint and Acquisition and their respective stockholders;

        WHEREAS, the Board of Directors of Protexx and the shareholders of Protexx have each determined that the Transactions to which Protexx is a party are in the best interest of Protexx and its shareholders;

        WHEREAS, each of the Protexx Management Shareholders have determined that the Transactions to which they are each a party are in their personal best interests, as well as being in the best interests of Protexx and its other shareholders; and

        WHEREAS, the parties desire to enter into this Agreement to set forth and memorialize their mutual understandings and agreements with respect to the subject matter hereof.

        NOW, THEREFORE, in consideration of the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the satisfaction of the terms and conditions set forth herein, the parties hereto intending to be legally bound do hereby agree as follows:

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SECTION 1: INCORPORATION BY REFERENCE

The foregoing introductory paragraphs of this Agreement are hereby incorporated into this Agreement as if fully set forth herein.

SECTION 2: THE PURCHASE

    2.1.            Sale and Purchase of Specified Assets . On the Closing Date, effective as of the Closing and subject to the other terms and conditions of this Agreement, Protexx shall sell, transfer, assign and convey to Acquisition, and Acquisition shall purchase, all of Protexx’s right, title and interest in and to all of the Specified Assets (as defined in Section 2.1(a)), and Protexx shall assign to Acquisition, and Acquisition shall assume, the Specified Liabilities of Protexx (as defined in Section 2.1(b)).

        (a)     Specified Assets. The “Specified Assets” means all Assets of Protexx as of the Closing Date, wherever located and whether or not reflected on the Books and Records of Protexx, including the following Assets and excluding the Assets specifically excepted below:

            (i)     All Software owned or jointly owned by Protexx or under development by Protexx, including but not limited to all Software utilized in the Protexx Business and/or owned or developed by 22THEN LLC and/or William Tabor, all of which shall have been completely and effectively transferred to Protexx prior to the date of this Agreement.

            (ii)     All Intangibles owned by Protexx and/or utilized in the Protexx Business or under development by Protexx and/or any person or entity affiliated with Protexx, including but not limited to William Tabor, all of which shall have been completely and effectively transferred to Protexx prior to the date of this Agreement.

            (iii)     All Accounts Receivable (net of an allowance for doubtful accounts to be mutually agreed upon by the parties prior to the Closing) and all other current Assets including cash, prepaid expenses, security deposits, rent escrows, and other prepayments, deposits and escrows of Protexx, but excluding: (A) all prepayments and rights to refunds or credits of any Taxes other than any taxes relating to the Specified Assets to be transferred to Acquisition hereunder; and (B) all prepaid premiums and other prepayments and deposits with respect to Protexx’s Insurance Policies, Protexx’s Group Insurance Plans, Protexx’s Retirement Plans, and any other Contracts not purchased by Acquisition under this Agreement.

            (iv)     All of Tangible Property of Protexx. and/or utilized in the Protexx Business.

            (v)     All of Protexx’s Contract Rights under the Contracts, including all rights acquired by Protexx as a result of the merger of 22THEN LLC into Protexx as described in Section 4.1(b) of this Agreement, but excluding Contract Rights under:

                (A)     this Agreement and any other Contracts entered into by Protexx with WidePoint or Acquisition in connection with the Transactions;

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                (B)     Contracts that constitute or evidence Employee Benefit Plans of Protexx;

                (C)     Contracts under which any rights in and/or any shares or other ownership interest in Protexx and/or 22THEN LLC (or any of their predecessors) was acquired;

                (D)     Contracts relating to the formation or acquisition of Protexx, 22THEN, or any of their respective predecessors;

                (E)     any Insurance Policies of Protexx; and

                (F)     any Contracts requiring a Consent that is not obtained on or before the Closing Date (“Non-Assigned Contracts”), provided that, once such Consent is obtained, the Non-Assigned Contracts shall be deemed, automatically and without further action by the parties, to be included in the Specified Assets as of the date such Consent is delivered to WidePoint (such Contracts not excluded by this Section 2.1(v), including any Non-Assigned Contracts that become Contracts included in any Specified Assets, shall be referred to as the “Assigned Contracts”); provided, however, that until such time as any Non-Assigned Contract becomes an Assigned Contract, Protexx shall hold each such contract in escrow and trust for the sole and exclusive benefit of Acquisition and WidePoint pursuant to Section 12.3, with Protexx directing each party to each such contract to make all payments due to Protexx under such contract from and after the Closing to thereafter be made solely to Acquisition.

            (vi)     All transferable rights under all Permits granted or issued to Protexx or otherwise held by Protexx, including all Permits to which Protexx is the successor or transferee as a result of merger of 22THEN with and into Protexx.

            (vii)     All of Protexx’s rights with respect to telephone numbers, telephone directory listings and advertisements, the name “Protexx” and all rights to use or allow others to use such name and variations thereof, and all of Protexx’s goodwill.

            (viii)     All of Protexx’s Books and Records, but excluding Tax Returns and Protexx’s Books and Records relating exclusively to Protexx’s Assets not included in the Specified Assets or to Protexx’s liabilities not included in the Specified Liabilities.

            (ix)     All of Protexx’s Claims, causes of action and other legal rights and remedies, whether or not known as of the Closing Date, relating to Protexx’s ownership of the Specified Assets and/or the operation of Protexx’s Business, including all rights of Protexx after the effectiveness of the merger of 22THEN with and into Protexx, but excluding causes of action and other legal rights and remedies of Protexx: (A) against WidePoint or Acquisition with respect to the Transactions contemplated by this Agreement; or (B) relating exclusively to Protexx’s Assets not included in the Specified Assets or to Protexx’s liabilities not included in the Specified Liabilities.

        (b)     Specified Liabilities of Protexx. The “Specified Liabilities of Protexx” means the following specifically described liabilities of Protexx as of the Closing Date, all of which shall be only those liabilities as specifically listed on Schedule 2.1(b) of this Agreement:

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            (i)     The current and long-term liabilities of Protexx incurred in the normal and ordinary course of Protexx’s Business which shall be clearly reflected on the Closing Balance Sheet (as defined in, and to be prepared in accordance with, Section 3.2). Notwithstanding the foregoing, the Specified Liabilities shall not include: (A) any current, long-term or deferred liabilities for any Taxes specifically excluded pursuant to Section 2.2(a); (B) any current or long-term notes payable and all accrued interest with respect thereto, other than any current or long-term notes payable or capitalized leases for any of the Specified Assets; (C) any liabilities for overdrafts or any other liabilities with respect to bank accounts; (D) any accrued expenses with respect to Protexx’s Insurance Policies; and (E) any liabilities whatsoever to any shareholder, officer, director, employee or affiliate of Protexx.

            (ii)     The Obligations of Protexx that arise after the Closing Date under any and all Assigned Contracts, but only to the extent that such liabilities arise in the ordinary course of performing such Assigned Contracts, in accordance with their respective terms, after the Closing Date and are not due to any breach, default or other nonperformance by Protexx under any such Assigned Contract prior to Closing. A

    2.2.            No Other Liabilities. Notwithstanding any other provision of this Agreement, Acquisition shall not purchase the Specified Assets subject to, and Acquisition shall not in any manner assume or be liable or responsible for any Obligations of Protexx other than the Specified Liabilities, and all Obligations of Protexx other than the Specified Liabilities shall remain the sole responsibility of Protexx after the effectiveness of the Closing. Without limiting the generality of the foregoing, and in addition to the liabilities excluded from the Specified Liabilities under Section 2.1(b), Acquisition shall not in any manner assume or be liable or responsible for, or acquire any Assets of Protexx subject to, any of the following Obligations of Protexx, whether or not reflected on the Closing Balance Sheet:

        (a)     Taxes. Except as otherwise provided for in this Agreement, including without limitation in Section 2.3, any Obligation for any Tax including: (i) any Tax payable by Protexx with respect to Protexx’s Business; and (ii) any Tax payable by Protexx with respect to the ownership, possession, purchase, lease, sale, disposition or use of any of Protexx’s Assets at any time on or before the Closing Date.

        (b)     Claims and Proceedings. Any Obligation related to or arising out of any Claim or Proceeding existing as of the Effective Time, or based upon a fact, action, failure to act or occurrence that arises prior to the Closing Date.

        (c)     Post-Closing. Any Obligation that is incurred or arises after the Closing Date, or that relates to any Proceeding of Protexx or other event relating to Protexx that occurs or circumstances that exist after the Closing Date.

        (d)     Transaction Related. Except as otherwise contemplated by this Agreement, any Obligation that was or is incurred by Protexx and/or the Protexx Management Shareholders in connection with the negotiation, execution or performance of this Agreement.

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        (e)     Employees and Benefits. Any Obligation of Protexx relating to its employees, consultants or affiliates or any benefits provided by Protexx to any of its employees, consultants or affiliates.

        (f)     Infringement. Any Obligation arising in connection with or related to any infringement or alleged infringement by Protexx or its employees, consultants or affiliates, including but not limited to the Protexx Management Shareholders, of any Software or Intangible of any Person.

        (g)     Encumbrances. Other than with respect to Permitted Liens and Specified Contracts, any Encumbrance on or affecting Protexx’s Assets, including the Specified Assets.

    2.3.            Transfer Taxes/Filing Fees. All filing fees, transfer, sales and other similar taxes arising from the Software Transfers and/or the Asset Purchase shall be borne by Protexx. WidePoint may offset from any payment otherwise due to Protexx under this Agreement any such fees and expenses.

SECTION 3: PURCHASE PRICE AND CLOSING BALANCE SHEET

    3.1.            Purchase Price and Allocation.

        (a)     Purchase Price. Subject to the adjustments described in this Section 3, the total purchase price for the Specified Assets (“Purchase Price”) shall consist of: (i) a cash payment by Acquisition to Protexx in the amount of One Dollar ($1.00), (the “Cash Amount”), (ii) the assumption by Acquisition of the Specified Liabilities of Protexx, and (iii) the Earnout Amount (as defined in Section 3.3(a)).

        (b)     Payment of the Purchase Price. WidePoint shall cause the Purchase Price to be paid as follows:

            (i)     Closing Payments . At the Closing, WidePoint shall cause Protexx to be paid the Cash Amount of One Dollar ($1.00).

            (ii)     Payments Following Closing . The Earnout Amount shall be paid to Protexx as provided in Section 3.3.

    3.2.            Closing Balance Sheet. Immediately prior to the Closing, Protexx shall prepare or cause to be prepared a consolidated balance sheet of Protexx (the “Closing Balance Sheet”) as of the close of business on the business day immediately prior to the Closing Date (the “Effective Time”). The Closing Balance Sheet shall be prepared in accordance with GAAP, and be accompanied by schedules setting forth in reasonable detail all Assets and liabilities included therein (excluding any liabilities incurred upon the Closing). Such Closing Balance Sheet or the accompanying schedules shall contain sufficient detail of the tangible Assets and liabilities of Protexx and its subsidiaries for the final determination of the Specified Assets and the Specified Liabilities of Protexx as of the Effective Time. Protexx shall deliver a draft Closing Balance Sheet to WidePoint and Acquisition at least five (5) business days prior to the Closing. Protexx shall deliver a final Closing Balance Sheet to WidePoint and Acquisition at the Closing.

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    3.3.            Earnout.

        (a)     Amount of Earnout. All provisions of Section 3 of this Agreement are subject to this Section 3.3(a). The Purchase Price shall include the right of Protexx to receive an aggregate of up to Nine Million Dollars ($9,000,000) (the “Earnout Amount”), with fifty percent (50%) of any Earnout Amounts being payable in cash and fifty percent (50%) of any Earnout Amounts being payable in privately issued shares of common stock of WidePoint (the “Earnout Shares”), subject to the Protexx Business acquired by Acquisition from Protexx and thereafter operated by Acquisition after the Closing achieving or exceeding the financial requirements as set forth below. Any payment that is earned under this earnout (the “Earnout Payment”) shall be paid after the end of the Earnout Period, as further set forth in Section 3.3(b).

            (i)        Maximum Earnout in a Year. All provisions of Section 3 of this Agreement are subject to this Section 3.3(a)(i). If the Protexx Business acquired by Acquisition achieves the maximum performance levels set forth in greater detail below in Section 3.3(a)(ii) for the calendar year 2008, then Protexx shall have the opportunity to earn the total Earnout Amount of $9,000,000.00 for the calendar year 2008, in which event there will be no earnout for the calendar year of 2009. If the Protexx Business acquired by Acquisition does not achieve the maximum performance levels set forth in greater detail below in Section 3.3(a)(ii) for the calendar year 2008, then Protexx shall have the opportunity to earn the applicable portion of the Earnout Amount as set forth below in Section 3.3(a)(ii). If Protexx earns less than $4,500,000.00 of the Earnout Amount for the calendar year of 2008, then the maximum portion of the Earnout Amount that Protexx will have the opportunity to earn for the calendar year of 2009 shall be up to $4,500,000.00, as described in greater detail below in Section 3.3(a)(iii). If Protexx earns more than $4,500,000.00 of the Earnout Amount for the calendar year of 2008, then the maximum portion of the Earnout Amount that Protexx will have the opportunity to earn for the calendar year of 2009 shall equal to the difference between (i) $4,500,000.00 (the maximum portion of the Earnout Amount for 2009) minus (ii) the amount of earnout earned by Protexx for 2008 which exceeds $4,500,000. For purposes of clarity, Schedule 3.3 of this Agreement sets forth in greater detail examples and sample calculations on revenue recognition, expense allocations, EBITDA calculations, and other information related to the earnouts under this Agreement.

            (ii)        2008 Earnout. For the calendar year 2008, the Protexx Business acquired by Acquisition must achieve earnings before interest, taxes, depreciation and amortization, excluding any amortization expenses from any software development costs (“EBITDA”), of greater than forty percent (40%) of revenues realized for the calendar year (the “Minimum EBITDA”) in order to qualify for any Earnout Amount.

                (A)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of at least Three Million Dollars ($3,000,000.00) and up to Five Million Dollars ($5,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn One Million One Hundred Twenty-Five Thousand Dollars ($1,125,000.00) of the Earnout Amount (which is equal to 25% of $4,500,000.00).

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                (B)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Five Million Dollars ($5,000,000.00) and up to Seven Million Dollars ($7,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) of the Earnout Amount (which is equal to 50% of $4,500,000.00).

                (C)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Seven Million Dollars ($7,000,000.00) and up to Eight Million Dollars ($8,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Three Million Three Hundred Seventy-Five Thousand Dollars ($3,375,000.00) of the Earnout Amount (which is equal to 75% of $4,500,000.00).

                (D)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Eight Million Dollars ($8,000,000.00) and up to Fourteen Million Dollars ($14,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Four Million Five Hundred Thousand Dollars ($4,500,000.00) of the Earnout Amount (which is equal to 100% of $4,500,000.00).

                (E)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Fourteen Million Dollars ($14,000,000.00) and up to Twenty-Nine Million Dollars ($29,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Five Million Six Hundred Twenty-Five Thousand Dollars ($5,625,000.00) of the Earnout Amount.

                (F)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Twenty-Nine Million Dollars ($29,000,000.00) and up to Thirty Eight Million Dollars ($38,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Six Million Seven Hundred Fifty Thousand Dollars ($6,750,000.00) of the Earnout Amount.

                (G)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Thirty Eight Million Dollars ($38,000,000.00) and up to Forty-Two Million Dollars ($42,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Seven Million Eight Hundred Seventy-Five Thousand Dollars ($7,875,000.00) of the Earnout Amount.

                (H)        For the calendar year of 2008, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Forty-Two Million Dollars ($42,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn the maximum Earnout Amount of Nine Million Dollars ($9,000,000.00).

            (iii)        2009 Earnout. In the event the maximum Earnout Amount of $9,000,000.00 is not earned by Protexx for the calendar year 2008, then Protexx shall have the opportunity to earn for the calendar year 2009 the lesser of either (x) $4,500,000.00 or (y) the difference between $9,000,000 and the actual amount earned by Protexx for the calendar year 2008. If Protexx earns more than $4,500,000.00 of the Earnout Amount for the calendar year of 2008, then the maximum portion of the Earnout Amount that Protexx will have the opportunity to earn for the calendar year of 2009 shall equal to the difference between (i) $4,500,000.00 (the maximum portion of the Earnout Amount for 2009) minus (ii) the amount of earnout earned by Protexx for 2008 which exceeds $4,500,000. For the calendar year 2009, the Protexx Business acquired by Acquisition must have the Minimum EBITDA in order to qualify for any Earnout Amount.

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                (A)        For the calendar year of 2009, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of at least Six Million Dollars ($6,000,000.00) and up to Fifteen Million Dollars ($15,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn One Million One Hundred Twenty-Five Thousand Dollars ($1,125,000.00) of the Earnout Amount (which is equal to 25% of $4,500,000.00).

                (B)        For the calendar year of 2009, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Fifteen Million Dollars ($15,000,000.00) and up to Twenty-Four Million Dollars ($24,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) of the Earnout Amount (which is equal to 50% of $4,500,000.00).

                (C)        For the calendar year of 2009, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Twenty-Four Million Dollars ($24,000,000.00) and up to Twenty-Eight Million Dollars ($28,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Three Million Three Hundred Seventy-Five Thousand Dollars ($3,375,000.00) of the Earnout Amount (which is equal to 75% of $4,500,000.00).

                (D)        For the calendar year of 2009, if the Protexx Business acquired by Acquisition recognizes revenues for that calendar year of greater than Twenty-Eight Million Dollars ($28,000,000.00), and the Minimum EBITDA is also achieved for that calendar year, then Protexx shall earn Four Million Five Hundred Thousand Dollars ($4,500,000.00) of the Earnout Amount (which is equal to 100% of $4,500,000.00).

            (iv)        Earnout Shares. At the Closing, WidePoint shall privately issue shares of common stock of WidePoint in the name of Protexx (the “Escrow Shares”), which Escrow Shares shall be physically delivered to the law firm of Foley & Lardner LLP (the “Escrow Agent”), to be held in escrow pursuant to the terms of the Escrow Agreement attached hereto as Exhibit A for purposes of the possible release of the Escrow Shares as part of the potential Earnout Amount that Protexx may achieve for the calendar year 2008. The number of Escrow Shares that WidePoint shall privately issue at the Closing in the name of Protexx and deliver to the Escrow Agent to be held in escrow pursuant to the terms of the Escrow Agreement shall be equal to the number of whole shares of WidePoint common stock that results from Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) divided by the greater of (x) One Dollar ($1.00) or (y) the average closing sale price of the WidePoint common stock as quoted on the American Stock Exchange (“AMEX”) for the twenty (20) trading days immediately preceding the Closing Date. For the calendar year of 2009, Protexx shall have the opportunity to earn an additional Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) worth of privately issued shares of WidePoint common stock as part of the Earnout Amount for that calendar year. The maximum number of whole shares of WidePoint common stock that Protexx shall have the opportunity to earn for the calendar year of 2009 shall be equal the number of whole shares of WidePoint common stock that results from Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) divided by the greater of (x) One Dollar and Twenty-Five Cents ($1.25) or (y) the average closing sale price of the WidePoint common stock as quoted on the AMEX for the twenty (20) trading days immediately preceding December 31, 2009.

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        (b)     Calculation and Payment of Earnout Payment. (i) WidePoint shall deliver to Protexx, upon the filing by WidePoint of the WidePoint Annual Report on Form 10-K with the Securities and Exchange Commission after the end of each of the calendar year 2008 and the calendar year 2009, a statement of the revenues of the Protexx Business acquired by Acquisition and the achievement or shortfall of the Minimum EBITDA for that applicable calendar year of the Earnout Period (“Earnout Statement”). The Earnout Statement shall be prepared in accordance with GAAP, in all cases as GAAP is expressly modified by the terms of this Agreement and the Earnout Statement.

            (ii)        WidePoint and Protexx shall in good faith attempt to agree upon the amount of the Earnout Payment, if any, within thirty (30) days after the receipt by Protexx of each Earnout Statement. If the parties are able to agree on the amount of the Earnout Payment for a particular calendar year during the Earnout Period, then WidePoint, directly or through one of its subsidiaries, shall make the Earnout Payment within fifteen (15) business days after the expiration of such 30-day period.

            (iii)        In the event of a dispute regarding an Earnout Payment, the undisputed portion of the Earnout Payment, if any, shall be paid within fifteen (15) business days after an agreement as to the undisputed portion of an Earnout Payment is reached. Any disputed portion of the Earnout Payment shall be determined, at WidePoint’s expense, by WidePoint’s Accountants, and WidePoint shall deliver the report of WidePoint’s Accountants on the Earnout Payment (“Earnout Report”) to Protexx within one hundred twenty (120) days after the end of the Earnout Period.

            (iv)        Protexx shall notify WidePoint of any objections to the Earnout Report within sixty (60) days after Protexx receives the Earnout Report. If Protexx does not notify WidePoint of any objections to the Earnout Report by the end of that sixty-day period, then the Earnout Report, as prepared by WidePoint’s Accountants, shall be considered final on the last day of that sixty-day period.

            (v)        If Protexx does notify WidePoint of any objections to the Earnout Report by the end of that sixty-day period, and WidePoint and Protexx are unable to resolve their differences within fifteen (15) days thereafter, then the disputed items on the Earnout Report shall be reviewed, as soon as reasonably possible, at the expense of Protexx by Protexx’s Accountants. Protexx and WidePoint shall instruct their respective Accountants to, in good faith, use reasonable efforts to resolve such disputed items to their mutual satisfaction and to deliver a final Earnout Report to Protexx and WidePoint as soon as reasonably possible.

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            (vi)        If Protexx’s Accountants and WidePoint’s Accountants are unable to resolve any such disputed items within thirty (30) days after receiving such instructions, then the remaining disputed items shall be submitted to either (A) one arbitrator as mutually agreed upon by each of Protexx and WidePoint within thirty (30) days after the expiration of the preceding 30-day period during which Protexx’s Accountants and WidePoint’s Accountants are unable to resolve any such disputed items or (B) in the event Protexx and WidePoint are not able to mutually agreed upon an arbitrator, then each of Protexx and WidePoint shall select one (1) arbitrator and then those two (2) selected arbitrators shall select a third arbitrator, with such three (3) arbitrators to then meet promptly thereafter to resolve any disputed portion of such Earnout Payment. The decision by such arbitrator(s) shall be binding upon the parties. Protexx and WidePoint shall each pay for fifty percent (50%) of the costs of such arbitration. The arbitrator(s) shall be instructed to deliver a final Earnout Report to Protexx and WidePoint as soon as possible, which shall be final and binding on the parties. Within fifteen (15) business days after the Earnout Report is finalized in accordance with this Section 3.3(b), any unpaid portion of the Earnout Payment, if any, shall be paid to Protexx.

    3.4.            Currency and Method of Payment. All dollar amounts stated in this Agreement are stated in United States currency, and all payments required under this Agreement shall be paid in United States currency. All cash payments required under this Agreement shall be made as follows: (a) any payment may be made by wire transfer of immediately available United States federal funds; (b) any payment exceeding $100,000 shall be made by wire transfer of immediately available United States federal funds; (c) any payment exceeding $10,000, but not exceeding $100,000, may be made by bank certified, treasurer’s or cashier’s check; and (d) any payment not exceeding $10,000 may be made by ordinary check.

    3.5.            Prorations. The following prorations relating to the Specified Assets or Specified Liabilities will be made as of the Effective Time, with Protexx remaining liable to the extent such items relate to any time period up to and including the Effective Time if not already taken into account on the Closing Balance Sheet, and with Acquisition becoming liable to the extent such items relate to periods subsequent to the Effective Time. Except as otherwise specifically provided herein, the net amount of all such prorations will be settled and paid at the Closing or as soon thereafter as mutually agreed upon by the parties:

        (a)     Personal property taxes, real estate taxes and assessments, and other Taxes, if any, on or with respect to the Assets; provided that special assessments for work actually commenced or levied prior to the date of this Agreement shall be paid by Protexx.

        (b)     Rents, additional rents, taxes and other items payable by Protexx under any lease, license, permit, contract or other agreement or arrangement of Protexx to be assigned to or assumed by Acquisition.

        (c)     The amount of rents, taxes and charges for sewer, water, fuel, telephone, electricity and other utilities; provided that if practicable, meter readings shall be taken at the Effective Time and the respective obligations of the parties determined in accordance with such readings.

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        (d)     All other items normally adjusted in connection with similar transactions.

        If the actual expense of any of the above items for the billing period within which the Effective Time falls is not known at the time of the Closing, then the proration shall be made based on the expense incurred in the previous billing period, for expenses billed less often than quarterly, and on the average expense incurred in the preceding three billing periods, for expenses billed quarterly or more often. Protexx agrees to furnish Acquisition with such documents and other records as shall be reasonably requested in order to confirm all proration calculations.

    3.6.            Allocation of Consideration. The aggregate consideration, including the Purchase Price and the assumption of the Specified Liabilities, shall be allocated for tax purposes among the Specified Assets and the noncompetition covenants set forth in Section 7.3 in accordance with Schedule 3.6. WidePoint, Protexx and Acquisition will file all Tax Returns and other related forms, reports and documents made by them to any governmental agencies in a manner consistent with such allocation and will not take any position inconsistent with such allocation. To the extent that disclosures of this allocation are required to be made by Protexx to the IRS or any other Tax authority or agency, Protexx will disclose such reports to WidePoint at least thirty (30) days prior to filing with the IRS or any other Tax authority or agency.

SECTION 4: REPRESENTATIONS AND WARRANTIES OF PROTEXX AND THE PROTEXX MANAGEMENT SHAREHOLDERS

        Knowing that WidePoint and Acquisition rely thereon, Protexx, and the Protexx Management Shareholders jointly and severally, make the following representations and warranties to WidePoint and Acquisition, except Manuel does not make the representations contained in sections 4.7, 4.9, 4.13, 4.17 and 4.26 (insofar as section 4.26 relates to sections 4.7, 4.9, 4.13 and 4.17).

    4.1.            Organization.

        (a)     Protexx is a limited liability company validly formed and existing under the Laws of the State of Delaware. Protexx possesses the full corporate power and authority to own its Assets and to conduct its business as and where presently conducted. Protexx is duly qualified or registered to do business in each jurisdiction where such qualification or registration is required by applicable Law, except where the lack of such qualification or registration would not have a Material Adverse Effect. Except as set forth on Schedule 4.1, Protexx does not own any subsidiaries. Except as set forth on Schedule 4.1, there are no predecessors to Protexx. Schedule 4.1 states with respect to Protexx: (a) its federal employer identification number; (b) its officers, employees and shareholders; (c) its registered agent and/or office in its jurisdiction of formation (if applicable); (d) all foreign jurisdictions in which it is qualified or registered to do business and its registered agent in each such jurisdiction; (e) its headquarters’ address, telephone number and facsimile number; (f) all fictitious, assumed or other names of any type that are registered or used by it or under which it has done business at any time since its date of formation; and (g) any name changes, recapitalizations, mergers, reorganizations or similar events since its date of formation. Accurate and complete copies of Protexx’s articles of organization and bylaws, each as amended to date (collectively, the”Organizational Documents”), are attached to Schedule 4.1.

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        (b)     22THEN LLC was a limited liability company duly formed and validly existing under the laws of the State of Delaware (“22THEN”). The persons who constituted the Board of Directors of Protexx were the same persons who constituted the Board of Managers of 22THEN. The persons who constituted all the shareholders of Protexx were the same persons who constituted all the members of 22THEN on a pro rata basis. Pursuant to Special Meetings of the Board of Directors of Protexx and the Board of Members of 22THEN, each duly conducted on January 11, 2008, and pursuant to Special Meetings of the shareholders of Protexx and the members of 22THEN, each duly conducted on January 11, 2008, each of Protexx and 22THEN duly and properly agreed to the merger of 22THEN with and into Protexx, which merger was duly and properly consummated on January 17, 2008 after the revival of 22THEN on that same date, with such revival and merger being evidenced by the Certificate of Revival and the Certificate of Merger, each as duly filed with the State of Delaware on January 17, 2008. Accurate and complete copies of such Certificate of Revival of 22THEN and the Certificate of Merger of 22THEN with and into Protexx are each attached hereto on Schedule 4.1. The result of such revival of 22THEN and the subsequent merger of 22THEN with and into Protexx is that Protexx is now the sole owner of all assets and liabilities of any and all types whatsoever of 22THEN. The assets and liabilities of 22THEN immediately prior to such merger with Protexx are listed on Schedule 4.1.

        (c)     Protexx of the Americas, Inc. (“Protexx Americas”) was duly incorporated and organized and was validly existing and in good standing under the laws of the State of Florida from the date of its incorporation up to and including the date of its administrative dissolution by the State of Florida, with such dissolution being duly effective under Florida law on September 14, 2007. Protexx Americas never had any business activities, personnel, assets or liabilities whatsoever from the date of its incorporation up to and including the date of its dissolution under Florida law. The dissolution of Protexx Americas did not have and will not have any affect whatsoever on the Agreement or the transactions contemplated thereby. Written evidence of the administrative dissolution of Protexx Americas by the State of Florida is attached hereto on Schedule 4.1.

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    4.2.            Effect of Agreement.

        (a)     Protexx’s execution and delivery of this Agreement and, as of the Closing, any ancillary agreements and instruments provided for herein (each an “Ancillary Agreement”) to which Protexx is or will be a party, its consummation of the Asset Purchase and its performance of its obligations hereunder and thereunder: (i) has been duly authorized by all corporate action required by its Organizational Documents and applicable Delaware Law other than Protexx shareholder approval; (ii) is not in violation of and does not constitute a default under its Organizational Documents; (iii) except as set forth in Schedule 4.2(A), does not constitute a default or breach (immediately or after the giving of notice, passage of time or both) under any Contract or other understanding of any type whatsoever to which Protexx is a party or by which Protexx is bound or to which any of the Assets of Protexx are subject; (iv) does not constitute a violation of any Law, Judgment or Order that is applicable to Protexx or to the business or Assets of Protexx, or to the Asset Purchase, including but not limited to the Software Transfers; (v) except Encumbrances created pursuant to this Agreement in favor of the parties thereto and except as stated on Schedule 4.2(A), does not result in the creation of any Encumbrance (other than a Permitted Lien) upon, or give to any third party any interest in, any of the business or Assets of Protexx, or any of the interests in Protexx; and (vi) except as set forth in Schedule 4.2(A), does not require the consent of any Person. This Agreement constitutes and, as of the Closing, any Ancillary Agreement to which Protexx will be a party will constitute, a the valid and legally binding agreement of Protexx, enforceable against Protexx in accordance with its terms.

    4.3.            Shareholders and Ownership.

        (a)     As of the date of this Agreement, Schedule 4.3(A) is an accurate and complete list as of the date hereof of: (i) the full legal names of all shareholders of Protexx and all other persons and entities that have any right to acquire any equity interest in Protexx (including but not limited to stock options and/or warrants); (ii) the addresses of their respective current principal residences; and (iii) their social security numbers or federal tax identification numbers. There are no other record owners of any equity interests of Protexx, or any other securities of Protexx, and there currently are no other issued or outstanding equity securities of Protexx other than its common stock. All securities of Protexx have been duly authorized, validly issued in compliance with all applicable laws, rules and regulations, fully paid, non-assessable, and not subject to any legal or equitable claims nor rights of rescission.

    4.4.            Financial and Corporate Records. The Books and Records of Protexx are and have been properly prepared and maintained in form and substance adequate for preparing audited financial statements in accordance with GAAP. Such Books and Records are and have been maintained in form and substance in compliance with GAAP and all applicable rules and regulations of the Laws to which Protexx are subject. Protexx has each made available to WidePoint true and complete copies of its respective minute books and stock record books to the extent it has or maintains such books (the “Corporate Records”).

    4.5.            Compliance with Law.

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        (a)     The operations of Protexx, the conduct of the Protexx Business, as and where such business presently is conducted, and the ownership, possession and use of the Assets of Protexx comply, in all material respects, with all applicable Laws. Except as set forth on Schedule 4.5, Protexx has obtained and currently holds all Permits required for the lawful operation of its business as and where such business is presently conducted, except where the failure to obtain or hold such Permit would not have a Material Adverse Effect. Except as set forth on Schedule 4.5, Protexx has obtained all exemptive or other necessary relief from each applicable governmental agency as necessary to conduct its business, and currently is operating in compliance with any and all conditions imposed by each applicable governmental agency in granting such relief.

        (b)     Patriot Act Matters. Protexx maintains documentation adequate to verify the accurate contact information, including identity and street address, for all its proprietary traders and customers as required by the USA Patriot Act, formerly known as the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”). To Protexx’s Knowledge: (i) none of the employees, customers or clients of Protexx is identified as a suspected terrorist or other prohibited individual, entity or organization described on the United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”) “Specially Designated Nationals” (“SDN”) list available at OFAC’s website address (www.treas.gov.ofac) as of the date hereof; (ii) no employees, customers or clients have used any proceeds generated from their trading activities for the benefit of individuals, entities or organizations from a country embargoed or restricted by the United States government, as listed on OFAC’s website; (iii) no employees, customers or clients have used the proceeds generated from their activities for any illegal purpose, including money laundering or terrorist financing activities; and (iv) its employees, customers or clients comply with all relevant provisions of the Patriot Act.

    4.6.            Regulatory Matters.

        (a)     Protexx and its employees, agents, associates, shareholders, members or contractors who are required to be licensed or registered with any federal and/or state governmental agency by reason of their association with Protexx and/or Protexx’s Business are duly registered as such and such registrations are in full force and effect. All Governmental or Regulatory Entity registration requirements have complied with and such registrations as currently filed, and all periodic reports required to be filed with respect thereto, are accurate and complete in all material respects.

        (b)     To Protexx’s Knowledge, there are no facts or circumstances pertaining to Protexx that would: (i) cause any Governmental or Regulatory Entity to not approve the transfer of Protexx’s Business and substantially all of its assets at the time of this Agreement and as of the Closing from Protexx and its current owners to Acquisition and WidePoint; or (ii) materially and adversely affect Acquisition’s ability to conduct Protexx’s Business as conducted by Protexx immediately prior to the Closing.

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        (c)     Except as set forth in Schedule 4.6(C), neither Protexx nor any of its associated persons (as defined in Section 3(a)(21) of the 1934 Act) is subject to any order, directive or enforcement action by, or party to any written agreement, memorandum of understanding or commitment letter with, or similar undertaking with respect to, or otherwise relating to, Protexx’s Business, has been ordered to pay any civil penalty or fine by, or is a recipient of any supervisory letter from, or has adopted any board or member resolutions at the request or direction of any Governmental or Regulatory Entity that restricts the conduct of its business or that in any manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management, or any other aspect of its business (each, a “Regulatory Agreement”), nor has Protexx been advised in any other manner by any Governmental or Regulatory Entity that it is considering issuing or requesting such a Regulatory Agreement. Except as set forth in Schedule 4.6(C), neither Protexx nor any of its respective associated persons (as defined in Section 3(a)(21) of the 1934 Act) has been convicted within the past ten years of any felony or misdemeanor described in Section 15(b)(4) of the 1934 Act, or is, by reason of any misconduct, permanently or temporarily enjoined from acting in the capacities, or engaging in the activities, described in Section 15(b)(4)(C) of the 1934 Act.

        (d)     Schedule 4.6(D) sets forth all Governmental or Regulatory Entities with which Protexx is required to be registered, licensed, and/or file any reports, as of the date of this Agreement; and except as listed on Schedule 4.6(D) or Schedule 4.1, neither Protexx or any of its respective employees, directors, or shareholders, by virtue of their respective activities with respect to the Protexx Business, is required to be so registered or obtain such a license or similar authorization from any Governmental or Regulatory Entity. Protexx has not exceeded in any material respect the business activities enumerated in any agreements or other limitations imposed in connection with its registrations, forms and reports filed with any Governmental or Regulatory Entity. Protexx has filed all material reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required by Law to file with any Governmental or Regulatory Entity, and Protexx has paid all fees and assessments due and payable in connection therewith. The information contained in such registrations, forms and reports was true and complete in all material respects as of the date of filing thereof. Each such registration is in full force and effect on the date of this Agreement. Except as set forth in Schedule 4.6(D), and except for routine examinations conducted by any Governmental or Regulatory Entity in the regular course of business, no Governmental or Regulatory Entity has initiated any formal or informal Proceeding or investigation into the business or operations of Protexx or its subsidiaries. Except as set forth on Schedule 4.6(D), there is no unresolved violation or deficiency identified by, or to Protexx’s Knowledge threatened by, any Governmental or Regulatory Entity with respect to Protexx.

    4.7.            Financial Statements. Schedule 4.7(A) includes accurate and complete copies of the following financial statements (“Financial Statements”) of Protexx: (a) a balance sheet as of each of December 31, 2005, December 31, 2006, and December 31, 2007 for Protexx; and (b) statements of income, statements of shareholders’ equity, and statements of cash flows for the fiscal years ended December 31, 2006 and December 31, 2007. Schedule 4.7(B) includes an accurate and complete copy of a balance sheet of Protexx as of January 31, 2008 (“Recent Balance Sheet”) and related financial statements (collectively, the “Financial Statements”), including statements of income, statements of members’ capital, and statements of shareholders equity prepared by the management of Protexx on an ongoing basis since the beginning of the current fiscal year through June 30, 2008. All of the Financial Statements were prepared in accordance with GAAP. Each balance sheet included in the Financial Statements fairly presents the financial condition of Protexx as of the date indicated therein. Each of the income statements included in the Financial Statements fairly presents the results of operations of Protexx as of the dates and for the periods indicated. All of the Financial Statements were prepared in accordance with GAAP as applied to interim period financial statements, and all adjustments that are necessary for a fair presentation thereof (consisting only of normal recurring adjustments) have been made. All of the normal recurring adjustments made to the Financial Statements are listed on Schedule 4.7(C).

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    4.8.            Operations Since the Date of the Recent Balance Sheet. Except as set forth on Schedule 4.8 or as specifically identified in this Agreement, from the date of the Recent Balance Sheet to the date of this Agreement and through to the Closing Date:

        (a)     Protexx has not: (i) created or assumed any Encumbrance other than a Permitted Lien upon any of its business or material Assets; (ii) purchased, leased, sold, abandoned or otherwise acquired or disposed of any business or material Assets; (iii) waived any material right or canceled any debt or claim; (iv) assumed or entered into any material Contract other than this Agreement and any agreement contemplated hereby; or (v) increased, or authorized an increase in, the dividends, distributions, compensation or benefits paid or provided to its shareholders, directors, officers, employees, agents or representatives.

        (b)     Protexx has not incurred any Obligation, made any loan to any Person, acquired or disposed of any business or material Assets, entered into any Contract or other transaction, or done any of the other things described in Section 4.8(a), involving an amount exceeding five thousand dollars ($5,000) individually or in the aggregate with respect to all such Persons.

        (c)     There has been no material casualty loss affecting Protexx or the business, Assets or financial condition of Protexx.

        (d)     Protexx has not paid any deferred bonuses or compensation due to any shareholder, director, officer, employee, or agent of Protexx, except to the extent such deferred bonuses or compensation was accrued on the Recent Balance Sheet.

    4.9.            Accounts Receivable. All Accounts Receivable included in the Recent Balance Sheet arose in the ordinary course of business and are collectable (net of reserves shown on the Recent Balance Sheet for doubtful accounts) in the ordinary course of business without the necessity of commencing legal proceedings. There are no refunds, discounts, rights of setoff or assignment affecting any such Accounts Receivable. Proper amounts of deferred revenues appear on the Books and Records of Protexx, in accordance with GAAP, with respect to all of Protexx’s: (a) billed but unearned Accounts Receivable; (b) previously billed and collected Accounts Receivable still unearned; and (c) unearned customer deposits.

    4.10.            Tangible Assets. Protexx has good and marketable title to all of its owned tangible Specified Assets, free and clear of any Encumbrances, except for Permitted Liens and as set forth in the Recent Balance Sheet and Schedule 4.10. Protexx is the sole and exclusive owner of all the Specified Assets and no other person or entity whatsoever has any right, claim or interest (equitable or otherwise) in any of the Specified Assets. Schedule 4.10 sets forth a list of all equipment leases of Protexx providing for annual payments in excess of one thousand dollars ($1,000) indicating: (a) the name of the lessee (including any leases on which Protexx is a guarantor); (b) description of the equipment; (c) current term; (d) monthly rental cost; and (e) lessor.

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    4.11.            Real Property. Protexx does not currently own and has never owned any Real Property. Schedule 4.11 includes a detailed list of all Real Property leased by Protexx or whose lease is guaranteed by Protexx (collectively, the “Protexx Real Property”), indicating: (a) the name of the tenant (including any leases on which Protexx is a guarantor); (b) location; (c) term; (d) monthly base rent as of June 30, 2008; and (e) landlord. Schedule 4.11 also includes a list of all Protexx branch offices. Protexx has good and marketable leasehold title to all of the Protexx Real Property leased by it, free and clear of any Encumbrance except Permitted Liens. To Protexx’s Knowledge, none of the Protexx Real Property, nor the possession, occupancy, maintenance or use thereof, is in violation of, or breach or default under, any Contract to which Protexx is a party or any Law relating to Protexx’s ownership, possession, occupancy, maintenance or use of the Protexx Real Property and, to Protexx’s Knowledge, no notice or threat from any lessor, Governmental or Regulatory Entity or other Person has been received by Protexx claiming any violation of, or breach, default or liability under, any Contract to which Protexx is a party or any Law relating to Protexx’s ownership, possession, occupancy, maintenance or use of the Protexx Real Property relating to Protexx’s possession, occupancy or use of the Protexx Real Property, or requiring or calling attention to the need for any work, repairs, construction, alteration, installations or environmental remediation by Protexx.

    4.12.            Environmental Matters. Neither Protexx, or its directors, officers, employees or shareholders has placed or caused to be placed, and to Protexx’s Knowledge there are no, Hazardous Substances in, on, under or migrating from any of the Protexx Real Property (except as in accordance with applicable law). All of the Protexx Real Property and the operations of Protexx thereon have been and currently are being operated by the Protexx in compliance with applicable Environmental Laws.

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    4.13.            Software and Other Intangibles. Set forth on Schedule 4.13 is an accurate and complete list of all Software and other Intangibles: (a) owned or under development by Protexx or any person or entity affiliated with either Protexx and/or 22THEN which is used in whole or in part in the Protexx Business (together, the “Protexx Software”); or (b) used or licensed by Protexx, or previously by 22THEN, in each case including a product description, the language in which it is written and the type of hardware platform(s) on which it runs (other than, in each case, standard commercial Software products used by Protexx for administrative and/or operational purposes). Schedule 4.13 identifies each item of Protexx Software that is owned by or licensed by a third-party, as applicable, and licensed or sub-licensed to Protexx or 22THEN by such third party as of the date hereof. No other Software or Intangibles (other than standard commercial Software products used by Protexx for administrative and/or operational purposes) are used by Protexx in the operation of Protexx Business, and except as described on Schedule 4.13, no rights of any third party are necessary to license, sublicense, sell, modify, update, and/or create derivative works for the Software listed on Schedule 4.13. The Protexx Software will adequately perform the functions for which it/they are intended to enable the revenues and EBITDA of Acquisition over the Earnout Period to provide for the maximum Earnout Amount, based upon current market conditions and anticipated business. Except as set forth on Schedule 4.13, Protexx has good title to, or has the right to use, all of the Software and other Intangibles listed on Schedule 4.13, free and clear of any Encumbrance. Except as set forth on Schedule 4.13, all of the Protexx Software was created as a work for hire (as defined under U.S. copyright law) by regular full time employees of Protexx or 22THEN. With respect to the Protexx Software: (i) Protexx maintains machine-readable master-reproducible copies, source code listings, technical documentation and user manuals for the most current releases or versions thereof (except that the technical documentation and user manuals are current through March 2008) and for all earlier releases or versions thereof currently being supported by them; (ii) in each case, the machine-readable copy substantially conforms to the corresponding source code listing; and (iii) it is written in the language set forth on Schedule 4.13, for use on the hardware set forth on Schedule 4.13 with standard operating systems; (iv) it can be maintained and modified by reasonably competent programmers familiar with such language, hardware and operating systems; and (v) in the case of the most recent version of all Protexx Software that is currently used in the operation of the Protexx Business, it operates in accordance with the user manual therefore without material operating defects. None of the Protexx Software or, to Protexx’s Knowledge, other Intangibles listed on Schedule 4.13, or their respective past or current uses by Protexx, including the preparation, distribution, marketing or licensing, has violated or infringed upon, or is violating or infringing upon, any Software, technology, patent, copyright, trade secret or other Intangible of any Person. Except as set forth on Schedule 4.19, to Protexx’s Knowledge, no Person is violating or infringing upon, or has violated or infringed upon at any time, any of the Protexx Software or other Intangibles listed on Schedule 4.13. Except as set forth on Schedule 4.13, none of the Protexx Software or other Intangibles listed on Schedule 4.13 is owned by or registered in the name of any current or former owner, member, partner, shareholder, executive, member-manager, employee, salesman, agent, customer, representative or contractor of Protexx or 22THEN nor does any such Person have any interest therein or right thereto, including the right to royalty payments. Protexx has maintained all trade secrets and copyrights with respect to the Protexx Software listed on Schedule 4.13. Except as set forth on Schedule 4.13, neither Protexx or 22THEN has disclosed or delivered to any escrow agent or to any other Person, or permitted the disclosure to any escrow agent or to any other Person of, the source code (or any aspect or portion thereof) of any past, present or future version of any Protexx Software. Except as set forth on Schedule 4.19, no Proceeding is pending or, to Protexx’s Knowledge, is being or has been threatened, nor has any claim or demand been made, which challenges the legality, validity, enforceability or ownership of any license, sublicense or other Contract covering or relating to any Software or Intangible listed on Schedule 4.13. Except with respect to demonstration or trial copies, no portion of any Protexx Software or Intangibles contains any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” or other software routines or hardware components intentionally designed by Protexx to permit unauthorized access or to disable or erase software, hardware, or data without the consent of the user. Set forth on Schedule 4.13 are all Internet domain names used in the operation of the Protexx Business (“Domain Names”). Except as set forth on Schedule 4.13, Protexx is the registrant of all Domain Names, and all registrations of Domain Names are in good standing until at least the dates set forth on Schedule 4.13. To Protexx’s Knowledge, no action has been taken or is pending to challenge rights to, suspend, cancel or disable any Domain Name, registration therefor or the right of Protexx to use a Domain Name. Protexx has all right, title and interest in and to, and rights to use the Domain Names on the Internet and otherwise in the operation of the Protexx Business as a trade-mark and/or trade name. There is no governmental prohibition or restriction on the use of any of the Protexx Software in any jurisdiction in which Protexx uses the Protexx Software or has used the Protexx Software since January 1, 2002, or on the export or import of the Protexx Software from or to any such jurisdiction. Except as set forth on Schedule 4.13, Protexx is the sole owner of, and has good and marketable title to, and all right, title and interest in and to all databases compiled and maintained by Protexx (or previously by 22THEN) in connection with the Protexx Business. Except as specified on Schedule 4.13, (and except for the individual rights of any Person in or to information contained within any such database that relates to such Person), no Person other than Protexx has any right or interest of any kind or nature in or to such databases. Except as set forth on Schedule 4.13 to Protexx’s Knowledge, no person: (i) is violating or infringing upon, or has violated or infringed upon at any time, any right of Protexx in or to such databases; or (ii) is breaching or has breached at any time any duty or obligation owed to Protexx in respect of such databases. Except as set forth in Schedule 4.13, neither the past nor current use of any such database or the information contained therein in the Protexx Business: (i) has violated or infringed upon, or is violating or infringing upon, the rights of any Person; or (ii) breaches any duty or obligation owed to any Person; or (iii) violates the privacy or any Law relating to the privacy of any Person.

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    4.14.            Contracts.

        (a)     Schedule 4.14 is an accurate and complete list of all of the following types of Contracts to which either Protexx, or where indicated below, 22THEN, is a party or by which Protexx is bound as of the date of this Agreement (collectively, and as supplemented pursuant to Section 9.2(f), the “Specified Contracts”), grouped into the following categories: (a) agreements with customers, including shareholders, and any other entities from which revenues may be derived at any time; (b) Contracts for the lease of Protexx Real Property or otherwise concerning Protexx Real Property used by Protexx; (c) loan agreements, mortgages, notes, guarantees and other financing Contracts; (d) Contracts for the purchase, lease and/or maintenance of computer equipment and other equipment, Contracts for the purchase, license, lease and/or maintenance of Software under which Protexx or 22THEN is the purchaser, licensee, lessee or user, and other supplier Contracts; (e) employment, consulting and sales representative Contracts (excluding Contracts which constitute Employee Benefit Plans listed on Schedule 4.16, and excluding oral Contracts with employees for “at will” employment); (f) Contracts under which any rights in and/or ownership of Software, technology or other Intangible of Protexx or 22THEN, or any prior version thereof, or any part of the customer base, business or assets of Protexx, or any shares or other ownership interest in Protexx (or any of its predecessors) was acquired, as well as any other Contracts relating to Software, technology or other Intangible of Protexx or 22THEN, including but not limited to any royalty agreements or rights agreements; and (g) other material Contracts (excluding Contracts which constitute Insurance Policies listed on Schedule 4.20 and excluding this Agreement.) A description of each oral Specified Contract is included on Schedule 4.14, and copies of each written Specified Contract have been delivered to WidePoint and Acquisition. Except as set forth on Schedule 4.14, each of the customers of Protexx have signed and are bound by a written Contract that is similar in all material respects to one of the form agreements that are attached to Schedule 4.14. Except as set forth on Schedule 4.14, with respect to each of the Specified Contracts, neither Protexx nor 22THEN is in default thereunder and there has not occurred any event that would constitute a default thereunder with the passage of time, the giving of notice, or both. Except as set forth on Schedule 4.14, to Protexx’s Knowledge, none of the other parties to any Specified Contract is in default thereunder and there has not occurred any event that would constitute a default thereunder with the passage of time, the giving of notice or both. Except as set forth on Schedule 4.14, neither Protexx nor 22THEN has given or received any notice of default or notice of termination with respect to any Specified Contract, and each Specified Contract is in full force and effect in accordance with its terms, and subject to obtaining the consents indicated on Schedule 4.2(A), upon consummation of the transactions contemplated by this Agreement will continue to be legal, valid, binding, enforceable and in full force and effect on the terms substantially identical to those in effect immediately prior to the consummation of such transactions. The Specified Contracts are all the material Contracts necessary and sufficient to operate the business of Protexx as currently operated.

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    4.15.            Employees and Independent Contractors. Schedule 4.15 includes a list of all of the Employees of Protexx as of the date of this Agreement, and: (a) their titles or responsibilities; and (b) their current salaries or wages and all bonuses, commissions and incentives paid at any time during the past twelve months. Schedule 4.15 also includes a list of all independent contractors performing services for Protexx as of the date of this Agreement. Protexx and/or 22THEN have never been a party to or bound by any union or collective bargaining Contract, nor is any such Contract currently in effect or being negotiated by or on behalf of Protexx. As of the Closing Date, none of the Employees of Protexx will be entitled to receive any severance payment upon the termination of their employment with Protexx. Except as limited by any employment Contracts listed on and attached to Schedule 4.14 and except for any limitations of general application which may be imposed under applicable employment Laws, Protexx has the right to terminate the employment of each of its Employees at will and without incurring any penalty or liability. Protexx is in compliance in all material respects with all Laws respecting employment practices. Since its formation date, Protexx has not experienced any labor problem that was or is material to it. Since its formation date, 22THEN never had any employees. Except as set forth on Schedule 4.15, no unresolved claim has been asserted by any current or former employee arising out of or related to his or her employment with Protexx and/or the termination thereof. Except as set forth on Schedule 4.15, each of Protexx’s current Employees has signed an employee agreement which contains certain restrictive covenants substantially in the form attached to Schedule 4.15. Except as indicated on Schedule 4.15, since January 1, 2002, no Employee of Protexx having an annual salary of $25,000 or more has indicated to Protexx or to such Employee’s appropriate manager an intention to terminate or has terminated his or her employment with Protexx. To the Protexx’s Knowledge, the Transactions will not materially adversely affect relations with any Employees of Protexx.

    4.16.            Employee Benefit Plans.

        (a)     Protexx does not have, and never has had, any ERISA Affiliates. 22THEN never had any ERISA Affiliates.

        (b)     Schedule 4.16(B) sets forth an accurate and complete list of all of the Employee Benefit Plans which Protexx has in the past or currently maintains or contributes to or in which any employee or leased employee of Protexx participates. 22THEN never had any Employee Benefit Plans. Those Employee Benefit Plans which are ERISA Plans are separately identified. Except as set forth on Schedule 4.16(B), Protexx: (i) has not established, maintained or contributed to or been obligated to contribute to any Employee Benefit Plans and has no current or contingent obligation to contribute to any Employee Benefit Plan; (ii) does not have any plan or commitment to establish any Employee Benefit Plan or modify any Employee Benefit Plan currently in effect (except to the extent required by law); and (iii) has never maintained, established, sponsored, participated in, contributed to, or been obligated to contribute to any plan subject to Title IV or ERISA or section 412 of the Code, and at no time has Protexx or any ERISA Affiliate contributed to or been requested to contribute to any “multiemployer plan” as such term is defined in ERISA or to any plan described in Section 413(c) of the Code.

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        (c)     Except as set forth on Schedule 4.16(C), Protexx has provided WidePoint with: (i) accurate and complete copies of all plan documents governing each Employee Benefit Plan; (ii) accurate and complete lists of the participants in each Employee Benefit Plan; (iii) the most recent annual report (Form Series 5500) filed with respect to each ERISA Plan for which such filing is required, including all schedules and other attachments thereto; (iv) the most recent summary plan description, and all subsequent summaries of material modification, with respect to each ERISA Plan; (v) the most recent IRS determination with respect to the qualification of the Protexx 401(k) Savings Plan; (vi) all discrimination tests performed with respect to the Protexx 401(k) Savings Plan; and (vii) all current administrative service agreements, group annuity Contracts, group insurance contracts, and similar written agreements and contracts relating to any Employee Benefit Plan.

        (d)     Except as set forth on Schedule 4.16(D), Protexx has timely amended the Protexx 401(k) Savings Plan with respect to the so called “GUST Amendments” and has made a timely application to the IRS for a favorable determination letter with regard to such amendments or the time to make such amendments and a timely application to the IRS for a favorable determination of opinion letter has not expired. Except as set forth on Schedule 4.16(D), Protexx has no reason to believe that the Protexx 401(k) Savings Plan is not a qualified plan within the meaning of Section 401 of the Code and otherwise in full compliance with the provisions of the Code both in form and in operation.

        (e)     With respect to each Employee Benefit Plan, Protexx will have made, on or before the Closing Date, all contributions required to be made on or prior to such date.

        (f)     None of the Employee Benefit Plans promises or provides retiree medical or other retiree welfare benefits to any person except as required by COBRA and/or any similar state law and Protexx has not represented, promised, or contracted to provide such retiree benefits to any employee, former employee, director, consultant or other person except as required by COBRA and/or any similar state law.

        (g)     Except as set forth on Schedule 4.16(G), all Employee Benefit Plans are, and have been, maintained and administered in material compliance with their provisions and with all applicable Laws, including ERISA, COBRA, the Family Medical Leave Act of 1993, the Women’s Health and Cancer Rights Act, the Newborns’ and Mothers’ Health Protection Act, and the Health Insurance Portability and Accountability Act of 1996, the Code, and any similar provisions of state law applicable to employees of Protexx, and the regulations and rulings promulgated thereunder. Protexx and all fiduciaries of the Employee Benefit Plans have complied with the provisions of the Employee Benefit Plans and with all applicable Laws including ERISA and the Code and the regulations and rulings thereunder. No “prohibited transaction” within the meaning of section 4975 of the Code or sections 406 or 407 or ERISA, and not otherwise exempt under section 408 or ERISA, has occurred with respect to any ERISA Plan.

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        (h)     Except to the extent disclosed on Schedule 4.16(H), neither the execution and delivery of this Agreement nor the consummation of the Transactions will: (i) result in any payment (including any severance, unemployment compensation or golden parachute payment) becoming due from Protexx under any Employee Benefit Plans; (ii) increase any benefits otherwise payable under any Employee Benefit Plans; or (iii) result in the acceleration of the time of payment or vesting of any such benefits to any extent. Each Employee Benefit Plan can be amended, terminated or otherwise discontinued in accordance with its terms without liability to Protexx or any ERISA Affiliate.

        (i)     There are no pending Proceedings that have been asserted or, to Protexx’s Knowledge, threatened with regard to Employee Benefit Plans, the Assets of any of the trusts under such plans, the plan sponsor, the plan administrator or any fiduciary of any such plan (other than routine benefit claims), and, to Protexx’s Knowledge, there are no facts which could form the basis for any such Proceeding. Except as set forth on Schedule 4.16(I), there are no investigations or audits of any Employee Benefit Plans, any trusts under such plans, the plan sponsor, the plan administrator or any fiduciary of any such plan that have been instituted or, to Protexx’s Knowledge, threatened, and, to Protexx’s Knowledge, there are no facts which could form the basis for any such investigation or audit. Except as set forth on Schedule 4.16(I), no event has occurred nor will occur which will result in Protexx having any liability after the Closing Date in connection with any Employee Benefit Plan established, maintained, contributed to or to which there has been an obligation to contribute (currently or previously) by it or any ERISA Affiliate, other than liability to make contributions or pay benefits as they become due under the terms of such plans in the normal course.

        (j)     Protexx does not now, nor has it ever had the obligation to maintain, establish, sponsor, participate in, or contribute to any Employee Benefit Plan for the benefit of any employee, former employee, director or consultant of Protexx or any ERISA Affiliate who performs services outside of the United States.

    4.17.            Customers and Prospective Customers. Schedule 4.17 is a complete list of all customers and prospective customers of Protexx as of the date of this Agreement, and for each prospective customer the list indicates the name, address and contact person thereat, and for each customer the list indicates: (a) name and address; (b) number of years as a customer with Protexx and/or 22THEN, as applicable; and (c) account balances for customers, in each case, as of December 31, 2006, December 31, 2007, and May 31, 2008. Except as set forth on Schedule 4.17, from January 1, 2002, to the date hereof, none of the customers of Protexx has given notice or otherwise indicated that it will or intends to terminate or not renew its contract before the scheduled expiration date or otherwise terminate its relationship with Protexx. To Protexx’s Knowledge, the Transactions will not materially adversely affect relations with any of the customers or prospective customers of Protexx.

    4.18.            Tax Matters.

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        (a)     Provision For Taxes. The provision made for Taxes on the Financial Statements is sufficient for the payment of all Taxes at the date of the Financial Statements and for all years and periods prior thereto. Since the date of the Financial Statements, Protexx has not incurred any Taxes other than Taxes incurred in the ordinary course of business consistent in type and amount with past practices. The charges, accruals, and reserves for Taxes with respect to Protexx for any tax period (or portion thereof) ending on or before Closing Date (a “Pre-Closing Tax Period”) (including any Pre-Closing Tax Period for which no Tax Return has yet been filed) reflected on the books of Protexx (excluding any provision for deferred income taxes) are adequate to cover such Taxes. 22THEN never conducted any business and has never owed any Taxes.

        (b)     Tax Returns Filed. Schedule 4.18(B) is an accurate and complete list of all Tax Returns filed by each of Protexx and 22THEN since inception. Accurate and complete copies of all federal, state, local and foreign income, franchise and sales and use Tax Returns on such list have been made available or delivered to WidePoint. Except as set forth on Schedule 4.18(B): (i) all Tax Returns required to be filed by or on behalf of Protexx and/or 22THEN have been timely filed; (ii) all such Tax Returns were true, correct, and complete in all respects; (iii) all Taxes owed thereon by Protexx and/or 22THEN have been paid or adequately accrued; (iv) Protexx and 22THEN have not extended the time within which to file any Tax Return; and (v) no claim has ever been made by an authority in a jurisdiction where Protexx and/or 22THEN does not file Tax Returns that Protexx and/or 22THEN is or may be subject to Tax by that jurisdiction or authority.

        (c)     Withholding. Protexx and 22THEN have duly withheld and paid all Taxes which they are required to withhold and pay in connection with amounts paid or owing to any employee, independent contractor, creditor, member, agent, representative, contractor, supplier, or other third party of Protexx or 22THEN.

        (d)     Tax Audits. The federal and state income or franchise Tax Returns of Protexx and/or 22THEN have never been audited by the Internal Revenue Service or by the appropriate state taxing authority for any period. Protexx and/or 22THEN has not received from the Internal Revenue Service or from the Tax authorities of any state, county, local or other jurisdiction (i) any notice of underpayment of Taxes or other deficiency which has not been paid nor (ii) any objection to any Tax Return they have filed. There are no outstanding agreements or waivers extending the statutory period of limitations applicable to any Tax Return with respect to a Tax assessment or deficiency. No officer (or employee responsible for Tax matters) of Protexx expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax of Protexx and/or 22THEN either: (A) claimed or raised by any authority in writing; or (B) as to which any of the officers (and employees and agents responsible for Tax matters) of Protexx have actual knowledge.

        (e)     Consolidated Group. Neither Protexx nor 22THEN has ever been a member of an affiliated group of corporations that filed a consolidated tax return. Protexx does not have any liability for the Taxes of any person or entity under Reg. § 1.1502-6 (or any corresponding or similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

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        (f)     Other. Neither Protexx nor 22THEN have: (i) filed any consent or agreement under Section 341(f) of the Internal Revenue Code of 1986, as amended (the “Code”); (ii) applied for any Tax ruling; (iii) entered into a closing agreement as described in Code Section 7121 or otherwise (or any corresponding or similar provision of state, local, or foreign Tax law) with any Tax authority; (iv) filed an election under Section 338(g) or Section 338(h)(10) of the Code (nor has a deemed election under Section 338(e) of the Code occurred); (v) made any payments, or been a party to an agreement (including this Agreement) that under any circumstances could obligate it to make payments (either before or after the Closing Date) that will not be deductible because of Section 162(m) or Section 280G of the Code; or (vi) been a party to any Tax allocation or Tax sharing agreement. Neither Protexx nor 22THEN is or was ever a “United States real property holding company” within the meaning of Section 897 of the Code. There are no liens or other security interests for Taxes on the assets of Protexx or 22THEN, except for liens for current Taxes not yet due and payable. No property of Protexx or 22THEN is subject to a tax benefit transfer lease subject to the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954; is “tax-exempt use property” within the meaning of Section 168(h) of the Code; or secures any debt the interest on which is exempt from Tax under Section 103 of the Code. Neither Pr