Exhibit 10.1

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ASSET PURCHASE AGREEMENT
 

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dated as of December 29, 2006
 
among
 
TELECOMMUNICATION SYSTEMS, INC.
 
AS SELLER,
 
MOBILEPRO CORP.,
 
and
 
CLOSECALL AMERICA, INC.,
 
A WHOLLY-OWNED SUBSIDIARY OF MOBILEPRO CORP.,
 
AS BUYER

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Table of Contents

ARTICLE 1 Definitions
1
1.1 Certain Defined Terms.
1
ARTICLE 2 Purchase of Assets and Assumption of liabilities
6
2.1 Agreement to Sell and Purchase
6
2.2 Assumption and Exclusion of Liabilities.
6
2.3 Purchase Price; Allocation of Purchase Price
6
2.4 Tax Allocation
7
2.5 Restricted Nature of Common Shares
7
ARTICLE 3 Closing
8
3.1 Time and Place
8
3.2 Deliveries by Seller to Buyer
8
3.3 Deliveries by Buyer to Seller
9
ARTICLE 4 Representations and Warranties of Seller
11
4.1 Corporate Existence and Authority
11
4.2 Corporate Authorization
11
4.3 Governmental Authorization
11
4.4 No Conflict
11
4.5 Consents and Approvals
12
4.6 Title to and Condition of Purchased Assets
12
4.7 Accounts Receivable
12
4.8 Full Force and Effect
12
4.9 Litigation
12
4.10 Tax Matters
13
4.11 Compliance with Laws
13
4.12 Intellectual Property.
13
4.13 Product Warranties; Defects
14
4.14 Assigned Contracts.
14
4.15 No Oral Amendments to Assigned Contracts
14
4.16 No Bankruptcy
14
4.17 Authorized Sales Channels
15
4.18 No Brokers
15
4.19 Full Disclosure
15
ARTICLE 5 Representations and Warranties of Buyer
15
5.1 Organization and Good Standing
15
5.2 Authorization of Transaction
15
5.3 No Conflict
16
5.4 Authorization of Common Shares
16
5.5 Consents and Approvals
16
5.6 No Brokers
16
5.7 Litigation
16
5.8 Filings, Consents and Approvals
16
5.9 SEC Reports; Financial Statements
17
5.10 Private Placement.
17
5.11 Form S-3 Eligibility
17
ARTICLE 6 Additional Covenants
18
6.1 Books and Records
18

 
 
(i)

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6.2 Confidentiality
18
6.3 Regulatory and Other Authorizations; Consents.
18
6.4 Further Actions
19
6.5 Furnishing of Outstanding Business Proposals
19
6.6 Non-Solicitation.
19
6.7 Adjustments in Purchase Price
19
ARTICLE 7 Tax Matters
20
7.1 Taxes Related to Sale of Purchased Assets
20
7.2 Other Taxes
20
ARTICLE 8 Conditions To the Closing
21
8.1 Conditions to Obligations of Seller
21
8.2 Conditions to Obligations of Buyer
21
ARTICLE 9 post-closing covenants of Seller
23
9.1 No Transfer
23
9.2 Payments to Buyer
23
9.3 Customer and Other Business Relationships
23
ARTICLE 10 Additional Post-Closing Agreements
24
10.1 Reports Regarding Revenue Sharing Payments
24
10.2 Collection of Accounts Receivable
24
10.3 Audit Right
24
10.4 Resolution of Disputes Regarding Revenue Sharing Payments.
24
ARTICLE 11 Indemnification
25
11.1 Loss Defined; Indemnitees
25
11.2 Indemnification by Seller
25
11.3 Indemnification by Buyer
26
11.4 Procedures for Indemnification
26
11.5 Limitations on Indemnification.
27
ARTICLE 12 General Provisions
28
12.1 Notices
28
12.2 Expenses
29
12.3 Entire Agreement
29
12.4 Amendment/Waiver
29
12.5 Public Announcements
29
12.6 No Third-Party Beneficiaries
30
12.7 Assignment
30
12.8 Governing Law
30
12.9 Consent to Jurisdiction
30
12.10 Headings; Interpretation
31
12.11 Construction
31
12.12 Counterparts
31
12.13 Severability
31
12.14 Attorneys’ Fees
31
12.15 Specific Performance
31
12.16 Confidentiality
31

 
 
(ii)

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Index of Schedules and Exhibits
 
Seller Disclosure Schedule
 
Exhibit A - Assigned Contracts
 
Exhibit B - Accounts Payable as of November 30, 2006
 
Exhibit C - Bill of Sale
 
Exhibit D - Assumption Agreement
 
Exhibit E - Transition Services Agreement
 
Exhibit F - Registration Rights Agreement
 
 
(iii)

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ASSET PURCHASE AGREEMENT
 
This ASSET PURCHASE AGREEMENT (this “Agreement”), is made and entered into as of
December 29, 2006 (the “Execution Date”), by and among TeleCommunication
Systems, Inc., a Maryland corporation (“Seller”), Mobilepro Corp., a Delaware
corporation (“Mobilepro”), and CloseCall America, Inc., a Maryland corporation
and wholly-owned subsidiary of Mobilepro (“Buyer”).
 
RECITALS
 
WHEREAS, Seller is engaged in the business of providing connectivity services
including wireless and data communication technologies to government, business
and residential customers; and
 
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell and
assign to Buyer certain assets related to the Business on the terms and
conditions set forth in this Agreement.
 
NOW, THEREFORE, in consideration of the facts recited above and the mutual
agreements set forth herein, the parties hereby agree as follows:
 
ARTICLE 1

 
Definitions
 
1.1   Certain Defined Terms.
 
“Accounts Receivable” means the accounts receivable related to Seller’s mobeo
business as of the Effective Time. By way of example, set forth on the AR
Schedule provided pursuant to Section 4.7 are the accounts receivable related to
Seller’s mobeo business as of November 30, 2006.
 
“Affiliate” means, with respect to any specified person, any other person that
directly or indirectly controls, is controlled by, or is under common control
with, such specified person (where, for purposes of this definition “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of stock, as an officer, director, trustee or executor, by contract or
otherwise).
 
“Ancillary Agreement” has the meaning set forth in Section 4.2.
 
“AR Schedule” has the meaning set forth in Section 4.7.
 
“Assigned Contract” means the Contracts listed on Exhibit A attached hereto.
 
“Assigned Customer” means a customer under an Assigned Contract who is currently
receiving telecommunication services from Seller, including all Verizon wireless
customers and all Research In Motion customers.
 
“Assumption Agreement” has the meaning set forth in Section 3.2.2.
 
“Assumed Accounts Payable” means the accounts payable to Verizon Wireless,
Sprint and Research In Motion in connection with Seller’s mobeo business as of
the Effective Time. By way of example, set forth on Exhibit B are the accounts
payable to said vendors in connection with Seller’s mobeo business as of
November 30, 2006.
 
 
 

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“Assumed Liabilities” has the meaning set forth in Section 2.2.1.
 
“Bill of Sale” has the meaning set forth in Section 3.2.1.
 
“Business Records” means, to the extent they are reasonably available, all of
Seller’s marketing and sales information, promotional materials, including
customer pricing, marketing plans, current and former customer lists, and all
other files and records (or applicable portions thereof) related to the Assigned
Contracts and Inventory.
 
“Change of Control” has the meaning set forth in Section 2.3.2.
 
“Closing” and “Closing Date” has the respective meanings specified for such
terms in 3.1.
 
“Closing Date Statement of Assets and Liabilities” has the meaning set forth in
3.2.3.
 
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
 
“Common Shares” has the meaning set forth in Section 2.3.1.
 
“Confidential Information” has the meaning set forth in Section 6.2.
 
“Contract” shall mean any written, oral, implied or other agreement, contract,
understanding, arrangement, instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of attorney, certificate,
purchase order, work order, insurance policy, benefit plan, commitment,
covenant, assurance or undertaking of any nature.
 
“Documentation” means, collectively, all user guides, manuals, instructions,
layouts, and any other designs, plans, drawings, documentation or materials that
are related in any manner to any Intellectual Property Rights, whether in
tangible or intangible form pertaining to the Purchased Assets.
 
“Effective Time” means January 1, 2007 at 12:01 a.m. Eastern Standard Time.
 
“Encumbrance” means any pledge, lien, collateral assignment, security interest,
mortgage, title retention, conditional sale or other security arrangement, or
any charge, adverse claim of title, ownership or right to use, or any other
encumbrance of any kind whatsoever.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rulings and regulations promulgated thereunder.
 
“Excluded Assets” means any asset or property of Seller not expressly included
among the Purchased Assets, including, but not limited to, all fixed assets of
the Seller, including the billing system procured from Ushacomm.
 
 
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“Excluded Liabilities” means any and all Liabilities of Seller (whether now
existing or hereafter arising) other than the Assumed Liabilities. By way of
example and not by way of limitation, the Excluded Liabilities that are not
being assumed by Buyer include, without limitation:
 
(a)   any and all Taxes now or hereafter due and payable by Seller or any
Affiliate of Seller (including without limitation any Taxes that Seller agrees
to pay pursuant to Sections 7.1 and 7.2);
 
(b)   any and all Taxes attributable to any of the Purchased Assets that arose
during any time period or portion thereof ending prior to the Closing;
 
(c)   any and all Taxes attributable to Seller whenever such Taxes arose;
 
(d)   any and all trade payables incurred or accrued by Seller at any time prior
to the Closing;
 
(e)   any and all Liabilities with respect to any environmental damage, or for
any disposal, discharge or other use or treatment of any hazardous or toxic
substance, under any and all laws and regulations relating to the environment or
the regulation of any hazardous or toxic substances of any type;
 
(f)   any and all Liabilities to Seller’s employees or contractors related to or
arising from or with respect to any act or omission of Seller or arising from or
with respect to any event, including without limitation any Liabilities to any
of Seller’s employees for the payment of any and all wages and commissions or
accrued and unused vacation time or for the reimbursement of any expenses
incurred by Seller’s employees and any Liabilities to any of Seller’s
contractors for any amounts due to them in connection with services provided to
Seller that arose prior to the Closing;
 
(g)   any and all Liabilities arising from the termination by Seller of the
employment of any current or future employees of Seller or any of its
Affiliates, any other claims brought against Seller arising from Seller’s
employment of any person, or arising from any duties or obligations under any
existing or future employee benefit plans of Seller or any of its Affiliates;
 
(h)   any and all present or future obligations or Liabilities of Seller or any
of its Affiliates to existing or future employees of Seller or any of its
Affiliates under ERISA, COBRA, WARN or any severance pay obligations of Seller
or any of its Affiliates;
 
(i)   any and all Liabilities arising from any breach or default by Seller of
any contract, agreement or commitment of Seller (including but not limited to
any breach or default of any of the Assigned Contracts);
 
(j)   any and all Liabilities now or hereafter arising from or with respect to,
the sale or license of any products or services of, by or for Seller; and
 
(k)   any and all Liabilities relating to or arising out of any of the Excluded
Assets; and
 
“GAAP” means United States generally accepted accounting principles.
 
 
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“Gross Profit” means Net Revenues collected plus the amortized portion of
related hardware sales collected, less the sum of airtime plus the amortized
portion of the related hardware costs. By way of example: Assume the following:
(i) an Assigned Customer has monthly airtime charges of $45 and monthly taxes
and USF fees of $5, (ii) Buyer’s cost of airtime for such Assigned Customer is
$30 per month; and (iii) such Assigned Customer is under a one-year contract,
and bought a handset for $60 (amortizes to $5 per month) that cost Buyer $120
(amortizes to $10 per month). Accordingly, (i) Net Revenues for such Assigned
Customer would be $45 per month, and (ii) Gross Profit for such Assigned
Customer would equal the sum of $45 (Net Revenues) plus $5 (amortized hardware
sales), or $50 total monthly revenue, less the sum of $30 (airtime cost) plus
$10 (amortized hardware cost), or $40 total cost of monthly revenue, yielding a
monthly Gross Profit of $10. Once the handset subsidy is fully amortized, Gross
Profit thereafter will be simply airtime revenue minus airtime cost.
 
“Indemnified Party and Indemnifying Party” has the meaning set forth in 11.3.
 
“Independent Accounting Firm” has the meaning set forth in Section 6.7.2.
 
“Intellectual Property Rights” means, collectively, all of the intangible
worldwide legal rights of Seller pertaining to the Purchased Assets, whether or
not filed, perfected, registered or recorded including trademarks, service
marks, trademark and service mark registrations and applications therefor, trade
names, rights in trade dress and packaging and all goodwill associated with the
same. The term “Intellectual Property Rights” does not refer to tangibles or
tangible embodiments of Intellectual Property Rights.
 
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and
the rulings and regulations promulgated thereunder.
 
“Inventory” means the inventory set forth in Section 1.1(d) of the Seller
Disclosure Schedule.
 
“Liabilities” means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured, determined or
determinable, known or unknown, including, without limitation, those arising
under any law, action or governmental order and those arising under any
contract, agreement, arrangement, commitment or undertaking.
 
“Loss” has the meaning set forth in Section 11.1.
 
“Mobilepro Common Stock” means the common stock, $.001 par value per share, of
Mobilepro.
 
“Net Accounts Receivable Collected” has the meaning set forth in Section 6.7.1.
 
“Net Revenues” means all revenues (as determined in accordance with GAAP)
actually collected, excluding the taxes, fees and other charges relating to such
revenues that are collected or withheld on behalf of any taxing or regulatory
authority for billing periods commencing after January 1, 2007.
 
“Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity.
 
“Post-Closing Statement of Assets, Liabilities and Collections” has the meaning
set forth in Section 6.7.
 
“Purchase Price Objection Notice” has the meaning set forth in Section 6.7.2.
 
 
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“Purchased Assets” means all of Seller’s right, title and interest in and to the
following:
 
(a)   Documentation, if any;
 
(b)   the Intellectual Property Rights used in connection with the Purchased
Assets and listed in Section 1.1(b) of the Seller Disclosure Schedule, including
rights of enforcement thereto;
 
(c)   the Accounts Receivable, including without limitation, the right to
collect, sue for and comprise;
 
(d)   the Inventory;
 
(e)   any and all copies in a tangible medium and other tangible embodiments of
(i) the Documentation; and (ii) the Intellectual Property Rights;
 
(f)   the Assigned Contracts;
 
(g)   the Business Records;
 
(h)   the original books and records (or where the originals are not available,
copies of such books and records) related to the Purchased Assets, including
without limitation, all credit records and billing records, whether such records
are in hard copy form or are electronically or magnetically stored; and
 
(i)   warranties which Seller has received from third parties with respect to
the Purchased Assets, including, but not limited to, such warranties as are set
forth in any lease agreement, equipment purchase agreement or consulting
agreement.
 
“Purchased Assets” does not include the Excluded Assets.
 
“Purchase Price” has the meaning set forth in Section 2.3.
 
“Purchase Indemnities” has the meaning set forth in Section 11.1.
 
“Registration Rights Agreement” has the meaning set forth in Section 3.2.10.
 
“Required Consents” means the authorization, consents, approvals, orders or
filings with or notice to any court, governmental agency, instrumentality or
authority, vendor or another entity or person, necessary for the execution and
delivery of this Agreement and the Ancillary Agreements by Seller or the
consummation by Seller of the transactions contemplated hereby or thereby as
listed on Section 4.5 of the Disclosure Schedule.
 
“Revenue Sharing Payments” has the meaning set forth in Section 2.3.1.
 
“Securities Act” has the meaning set forth in Section 2.5.
 
“Seller’s Indemnitees” has the meaning set forth in Section 11.1.
 
“Tax” or “Taxes” means all federal, state and local taxes of any kind whatsoever
(whether payable directly or by withholding), including but not limited to
sales, use, excise, franchise, ad valorem, property, inventory, value added and
payroll taxes, together with any interest and penalties, additions to tax or
additional amounts with respect thereto, imposed by any taxing authority.
 
“Third-Party Claim” has the meaning set forth in Section 11.3.
 
 
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“Transaction Taxes” has the meaning set forth in Section 7.1.
 
“Transition Services Agreement” has the meaning set forth in Section 3.2.9.
 
“VWAP” means the volume weighted average price per share of Mobilepro Common
Stock on the OTC Bulletin Board.
 
“WARN” means the Federal Worker Adjustment and Retraining Act.
 
ARTICLE 2
 
Purchase of Assets and Assumption of liabilities
 
2.1   Agreement to Sell and Purchase. Subject to the terms and conditions of
this Agreement and in reliance on the representations, warranties and covenants
set forth in this Agreement, effective as of the Effective Time Buyer shall
purchase, and Seller shall sell, assign, transfer, convey and deliver to Buyer,
the Purchased Assets, free and clear of all Encumbrances.
 
2.2   Assumption and Exclusion of Liabilities. 
 
2.2.1   Assumed Liabilities. Subject to the terms and conditions of this
Agreement, effective as of the Effective Time Buyer shall assume and pay,
perform and discharge when due the following, and only the following,
Liabilities (whether now existing or hereafter arising) of Seller (collectively,
the “Assumed Liabilities”):
 
(a)   obligations and liabilities of Seller under the Assigned Contracts, but
only to the extent that such obligations and liabilities first accrued or arose
after the Effective Time for reasons other than any breach, violation or default
by Seller of the terms of any of the Assigned Contracts;
 
(b)   the Assumed Accounts Payable;
 
(c)   any and all Taxes attributable to any of the Purchased Assets for any
taxable period commencing after the Effective Time;
 
(d)   any and all trade payables incurred or accrued by Buyer at any time after
the Effective Time; and
 
(e)   any and all Liabilities arising from any breach or default by Buyer of any
Assigned Contract that arises after the Effective Time.
 
2.2.2   Excluded Liabilities. As a material consideration and inducement to
Buyer to enter into this Agreement, Seller will retain, and will be solely
responsible for paying, performing and discharging when due, and Buyer will not
assume or otherwise have any responsibility or liability for any Excluded
Liabilities.
 
2.3   Purchase Price; Allocation of Purchase Price. The purchase price (the
“Purchase Price”) in the aggregate for all the Purchased Assets shall consist of
the following:
 
 
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2.3.1   Subject to Buyer’s right of offset set forth in Section 6.7, for a
period of three years following the Effective Time, an amount equal to: (i)
12.5% of the Net Revenue derived under the Assigned Contracts for airtime with
respect to users with handsets as of the Effective Time and collected for
periods commencing on or after the Effective Time; (ii) 3.3% of the Net Revenue
collected from Assigned Customers with respect to sales of third party software;
and (iii) 33.3% of the Gross Profit derived under the Assigned Contracts with
respect to users without handsets as of the Effective Time and collected for
periods commencing on or after the Effective Time (collectively, the “Revenue
Sharing Payments”), which Revenue Sharing Payments shall be due and payable on a
quarterly basis on or before the 30th day following the last day of each fiscal
quarter of Buyer ending during such three year period, commencing on April 30,
2007; and
 
2.3.2   9,079,903 shares of Mobilepro Common Stock, which number of shares is
equal to $675,000 divided by VWAP for the ten trading days prior to December 29,
2006 (the “Common Shares”).
 
2.3.3   Seller’s right to receive the Revenue Sharing Payments under this
Section 2.3 shall not be terminated, reduced or otherwise affected by a change
in control of Mobilepro or Buyer resulting from any sale or other disposition of
the capital stock of Mobilepro or Buyer, or the merger or consolidation of
Mobilepro or Buyer resulting, directly or indirectly, in owning, directly or
indirectly, less than a majority of the outstanding voting securities of
Mobilepro or Buyer or any surviving corporation, or by sale or transfer of all
or substantially all of the assets of any operating unit of Mobilepro or Buyer
(each, a “Change of Control”), and prior to any Change of Control, Mobilepro and
Buyer shall cause any such successor entity to agree to expressly assume the
obligations under this Section 2.3. No Change of Control shall relieve Mobilepro
or Buyer of any of its obligations under this Agreement, including, but not
limited to, this Section 2.3.
 
2.3.4   For purposes of Section 2.3.1, with respect to any user with a handset
as of the Effective Time who requests and is issued a replacement handset,
whether due to breakage, upgrade or otherwise, Revenue Sharing Payments shall be
calculated pursuant to clause (iii) of Section 2.3.1 and not clause (i) of
Section 2.3.1.
 
2.4   Tax Allocation. The parties hereto agree that the Purchase Price shall be
allocated among the Purchased Assets in accordance with the fair market value of
each which shall be determined in good faith by Buyer within sixty (60) days
after the Closing; and the parties hereto shall each act in a manner consistent
with such determination in (i) filing Internal Revenue Form 8594, captioned
“Asset Acquisition Statement under Section 1060”; (ii) paying sales and other
transfer Taxes in connection with the purchase and sale of the Purchased Assets
pursuant to this Agreement, except as required by a final determination of the
relevant tax authorities; and (iii) for all other purposes.
 
2.5   Restricted Nature of Common Shares. The issuance of the Common Shares will
not have been registered, and upon issuance the Common Shares will be deemed to
be “restricted securities” under federal securities laws and may not be resold
without registration under or exemption from the Securities Act of 1933, as
amended (the “Securities Act”). Each certificate representing the Common Shares
will bear a legend in substantially the following form:
 
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES OR “BLUE SKY”
LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES OR
“BLUE SKY” LAWS AND AN OPINION OF LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
 
 
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Buyer hereby acknowledges and agrees (i) that a standard opinion from DLA Piper
(the “DLA Piper Opinion”) regarding the transfer of securities shall be
sufficient for purposes of removing the legend set forth above and (ii) it will
cooperate in connection with any and all sales of the Common Shares by Seller,
including, but not limited to, by instructing its transfer agent to accept the
DLA Piper Opinion and to act promptly to execute any documentation in connection
with such sale and to promptly issue a stock certificate which does not bear
such legend.
 
ARTICLE 3
 
Closing 
 
3.1   Time and Place. The Closing under this Agreement shall take place at the
offices of Seyfarth Shaw LLP, 815 Connecticut Avenue, N.W., Suite 500,
Washington, D.C. 2006 at 10:00 a.m., local time, on the Closing Date, after the
satisfaction or waiver of the conditions to Closing set forth in Section 8.1 and
8.2 (or by such other means, including a remote Closing wherein the relevant
documents are delivered by means of facsimile, mail, courier or email) as Seller
and Buyer may mutually agree.
 
For purposes of this Agreement, the later of January 3, 2007 or the date on
which all conditions to Closing have been satisfied or waived shall be known as
the “Closing Date” and the actions taken on such date and at such time the
“Closing.”
 
3.2   Deliveries by Seller to Buyer. At the Closing, Seller shall deliver to
Buyer:
 
3.2.1   the Bill of Sale in substantially the form of Exhibit C attached hereto
(the “Bill of Sale”), dated the Execution Date and duly executed by an
authorized officer of Seller, transferring certain Purchased Assets to Buyer;
 
3.2.2   the Assumption Agreement in substantially the form of Exhibit D attached
hereto (the “Assumption Agreement”) dated the Execution Date and duly executed
by an authorized officer of Seller transferring the Purchased Assets to Buyer;
 
3.2.3   a statement of assets and liabilities representing the Purchased Assets
and Assumed Liabilities as of November 30, 2006 prepared in a manner consistent
with prior periods (the “Closing Date Statement of Assets and Liabilities”);
 
3.2.4   a certificate, dated the Closing Date and executed on behalf of Seller
by a duly authorized officer of Seller certifying that (i) each of the
representations and warranties of Seller contained in this Agreement is true and
correct in all material respects as of the Closing Date, with the same force and
effect as if made as of the Closing Date (other than such representations and
warranties that are expressly made as of another date), (ii) all covenants and
agreements of Seller to be performed by it on or prior to the Closing under this
Agreement have been performed, (iii) there will have not been any material
adverse change in the Purchased Assets whether or not resulting from a breach in
any representation, warranty or covenant in this Agreement and (iv) that the
Closing Date Statement of Assets and Liabilities was prepared in a manner
consistent with prior periods;
 
 
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3.2.5   all Business Records;
 
3.2.6   a certificate of Seller’s Secretary (i) attaching copies of resolutions
of the Board of Directors of Seller authorizing and approving the execution and
delivery of the Agreement and Ancillary Agreements by Seller and the
consummation by Seller of the transactions contemplated hereby and thereby, (ii)
certifying that the officers of Seller executing this Agreement and the
Ancillary Agreements have been duly elected and have the appropriate authority
on behalf of Seller to enter into this Agreement and the Ancillary Agreements;
 
3.2.7   the Required Consents indicated on Section 4.5 of the Seller Disclosure
Schedule as having been received as of the Closing Date;
 
3.2.8   releases from any third party having an Encumbrance on any Purchased
Assets (other than Permitted Encumbrances) or such other evidence of termination
of such Encumbrance as is reasonably acceptable to Buyer;
 
3.2.9   the Transition Services Agreement in substantially the form of Exhibit E
attached hereto (the “Transition Services Agreement”), dated the Execution Date
and duly executed by an authorized officer of Seller;
 
3.2.10        the Registration Rights Agreement in substantially the form of
Exhibit F attached hereto (the “Registration Rights Agreement”), dated the
Closing Date and duly executed by an authorized officer of Seller;
 
3.2.11         a certificate executed by a duly authorized officer of Seller
certifying that no Taxes related to the Purchased Assets are in arrears; and
 
3.2.12         such other documents and instruments as are reasonably required
to be delivered to Buyer by Seller in order to effect the transactions
contemplated by this Agreement.
 
3.3   Deliveries by Buyer to Seller. At the Closing, Mobilepro and Buyer shall
deliver to Seller the following: 
 
3.3.1   the Purchase Price, payable in accordance with Sections 2.3, including,
but not limited to, a stock certificate representing the Common Shares issued in
the name of “TeleCommunication Systems, Inc.”;
 
3.3.2   evidence reasonably satisfactory to Seller that the Common Shares have
been duly authorized to be issued and delivered in accordance with Section 2.3;
 
3.3.3   counterpart of the Assumption Agreement in substantially the form of
Exhibit D, dated the Execution Date and duly executed by an authorized officer
of Buyer assuming obligations of Seller under the Assumed Contracts arising
after the Effective Time;
 
 
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3.3.4    (a)   a certificate dated the Closing Date and executed by a duly
authorized officer of Buyer, certifying (i) that the representations and
warranties of Buyer contained herein are true and correct in all material
respects as of the Closing Date, with the same force and effect as if made as of
the Closing Date (other than such representations and warranties that are
expressly made as of another date); and (ii) that all of the covenants and
agreements to be performed by Buyer on or prior to the Closing under this
Agreement have been performed; and
 
                                   (b)   a certificate dated the Closing Date
and executed by a duly authorized officer of Mobilepro, certifying (i) that the
representations and warranties of Mobilepro contained herein are true and
correct in all material respects as of the Closing Date, with the same force and
effect as if made as of the Closing Date (other than such representations and
warranties that are expressly made as of another date); and (ii) that all of the
covenants and agreements to be performed by Mobilepro on or prior to the Closing
under this Agreement have been performed;
 
3.3.5   (a) a certificate of Buyer’s Secretary (i) attaching copies of
resolutions of the Board of Directors of Buyer authorizing and approving the
execution and delivery of this Agreement and the Ancillary Agreements by Buyer
and the consummation by Buyer of the transactions contemplated hereby and
thereby and (ii) certifying that the officers of Buyer executing this Agreement
and the Ancillary Agreements have been duly elected and have the appropriate
authority on behalf of Buyer to enter into this Agreement and the Ancillary
Agreements; and
 
                           (b) a certificate of Mobilepro’s Secretary (i)
attaching copies of resolutions of the Board of Directors of Mobilepro
authorizing and approving the execution and delivery of this Agreement and the
Ancillary Agreements by Mobilepro and the consummation by Mobilepro of the
transactions contemplated hereby and thereby and (ii) certifying that the
officers of Mobilepro executing this Agreement and the Ancillary Agreements have
been duly elected and have the appropriate authority on behalf of Mobilepro to
enter into this Agreement and the Ancillary Agreements;
 
3.3.6   counterpart of the Transition Services Agreement in substantially the
form of Exhibit E, dated the Execution Date and duly executed by an authorized
officer of Seller;
 
3.3.7   the Registration Rights Agreement in substantially the form of Exhibit
F, dated the Closing Date and duly executed by an authorized officer of
Mobilepro; and
 
3.3.8   such other documents and instruments as are reasonably required to be
delivered to Seller by Buyer in order to effect the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof.
 
 
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ARTICLE 4
 
Representations and Warranties of Seller
 
Seller hereby represents and warrants to Buyer that, except as may be expressly
otherwise set forth in Seller Disclosure Schedule delivered by Seller to Buyer
simultaneously with the execution of this Agreement, each of the representations
and warranties contained in the following sections of this ARTICLE 4 is true and
correct as of the date hereof and will be true and correct on and as of the
Closing Date.
 
4.1   Corporate Existence and Authority. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Maryland. Seller has all corporate power and authority required to carry on
its business related to the Purchased Assets, to own or use the Purchased
Assets, and to perform all obligations under the Assigned Contracts. 
 
4.2   Corporate Authorization. Seller has all requisite corporate power and
authority to enter into, execute, deliver and perform its obligations under this
Agreement, the Bill of Sale, the Assumption Agreement, the Transition Services
Agreement and the Registration Rights Agreement (the Bill of Sale, the
Assumption Agreement, the Transition Services Agreement and the Registration
Rights Agreement, together with all other assignments and documents that Seller
is to execute and deliver pursuant to this Agreement being hereinafter
collectively referred to as the “Ancillary Agreements”) and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by Seller of this Agreement and each of the Ancillary Agreements,
and the sale of the Purchased Assets to Buyer, have been duly and validly
approved and authorized by Seller’s Board of Directors.
 
4.3   Governmental Authorization. No authorization, decree or order of any
court, bankruptcy court, bankruptcy trustee, creditors’ committee, receiver,
governmental authority or any other person is required in order to authorize or
enable Seller to: (i) enter into this Agreement and the Ancillary Agreements;
(ii) sell, assign, convey and transfer all the Purchased Assets to Buyer as
contemplated by this Agreement; or (iii) to carry out and perform Seller’s
obligations under this Agreement and the Ancillary Agreements. This Agreement
has been, and at the Closing the Ancillary Agreements will be, duly and validly
executed and delivered by Seller, and (assuming due authorization, execution and
delivery by Buyer) this Agreement constitutes and, upon the execution of each of
the Ancillary Agreements by the parties thereto, the Ancillary Agreements will
constitute, legal, valid and binding obligations of Seller enforceable against
Seller in accordance with their respective terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies, and (iii) insofar as indemnification and contribution provisions may
be limited by applicable law.
 
4.4   No Conflict. The execution, delivery and performance of this Agreement and
the Ancillary Agreements by Seller, do not and will not: (i) conflict with or
violate the charter or Bylaws of Seller; (ii) conflict with or violate any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award applicable to the Purchased Assets; (iii) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, rescission, amendment, acceleration or cancellation of, any of the
Assigned Agreements or any material note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument relating to any
of the Purchased Assets to which Seller is a party or is bound or by which any
of the Purchased Assets are bound or affected; or (iv) result in the creation of
any Encumbrance on any of the Purchased Assets.
 
 
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4.5   Consents and Approvals. Except as set forth in Section 4.5 of the Seller
Disclosure Schedule, the execution and delivery of this Agreement and the
Ancillary Agreements by Seller do not, and the performance of this Agreement and
the Ancillary Agreements by Seller (including Seller’s assignment of any
Assigned Contracts to Buyer) will not, require any consent, approval,
authorization or other action by, or filing with or notification to, any third
party, including but not limited to any governmental or regulatory authority.
 
4.6   Title to and Condition of Purchased Assets. Seller owns all the Purchased
Assets and Seller has good and marketable title in and to all the Purchased
Assets, free and clear of all Encumbrances. None of the Purchased Assets is
licensed from any third party and none of the Purchased Assets is licensed to
any third party. All of the tangible personal property included in the Purchased
Assets is conveyed in an “as is” condition. The transfer of the Purchased Assets
from Seller to Buyer will not result in any Encumbrance.
 
4.7   Accounts Receivable. The Accounts Receivable constitute valid receivables
that arose from bona fide transactions in the ordinary course of business,
consistent with past practices. A schedule of the Accounts Receivable as of
November 30, 2006 is set forth in Section 4.7 of the Seller Disclosure Schedule
(the “AR Schedule”). Other than ordinary course adjustments not material in the
aggregate and matters listed in the AR Schedule, (i) no counterclaims or
offsetting claims with respect to presently outstanding Accounts Receivable are
pending or, to the knowledge of Seller, threatened and (ii) subject to such
amounts as are reserved for bad debts on the Closing Date Statement of Assets
and Liabilities, such Accounts Receivable are fully collectible in their stated
amount. Except as provided in AR Schedule, no agreements for deductions or
discounts have been made with respect to any part of such Accounts Receivable.
 
4.8   Full Force and Effect. Each Assigned Contract, permit, franchise or other
instrument assigned to or assumed by Buyer pursuant to this Agreement or any of
the Ancillary Agreements is in full force and is not subject to any breach or
default thereunder by Seller or, to Seller’s knowledge, any other party thereto.
 
4.9   Litigation. There is no claim, action, suit, investigation or proceeding
of any nature pending or, to the knowledge of Seller, threatened, at law or in
equity, by way of arbitration or before any court, governmental department,
commission, board or agency that: (i) may adversely affect, contest or challenge
Seller’s authority, right or ability to sell or convey any of the Purchased
Assets to Buyer hereunder or otherwise perform Seller’s obligations under this
Agreement or any of the Ancillary Agreements; (ii) challenges or contests
Seller’s right, title or ownership of any of the Purchased Assets; (iii) asserts
that any Purchased Asset, or any action taken by any employee or agent of Seller
with respect to any Purchased Asset, infringes any Intellectual Property Rights
of any third party or constitutes a misappropriation or misuse of any
Intellectual Property Rights, trade secrets or proprietary rights of any party;
(iv) seeks to enjoin, prevent or hinder the consummation of any of the
transactions contemplated by this Agreement or the Ancillary Agreements; or (v)
would impair or have a material adverse effect on Buyer’s right or ability to
use or exploit any of the Purchased Assets or impair or have an adverse effect
on the value of any Purchased Asset.
 
 
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4.10   Tax Matters. Except as set forth in Section 4.10 of the Seller’s
Disclosure Schedule, no claim or other proceeding is pending or has been
threatened against or with respect to the Seller in respect of any Tax that
could give rise to an Encumbrance upon the Purchased Assets or otherwise be
enforceable against a transferee of the Purchased Assets. Solely with respect to
the Purchased Assets, there are no unsatisfied Liabilities for Taxes (including
liabilities for interest, additions to tax and penalties thereon and related
expenses) with respect to any notice of deficiency or similar document received
by the Seller that could give rise to an Encumbrance upon the Purchased Assets
or otherwise be enforceable against a transferee of the Purchased Assets.
 
4.11   Compliance with Laws. Except where the failure would not impair or have a
material adverse effect on Buyer’s right or ability to use or exploit any of the
Purchased Assets or impair or have an adverse effect on the value of any
Purchased Asset, Seller has complied with and has not received any notices of
violation with respect to, any federal, state or local statute, law or
regulation, applicable to any of the Purchased Assets, including without
limitation (i) all applicable Tax laws and regulations with respect to
consultants, (ii) the Export Administration Act and regulations promulgated
thereunder and all other laws, regulations, rules, orders, writs, injunctions,
judgments and decrees applicable to the export or re-export of controlled
commodities or technical data and (iii) the Immigration Reform and Control Act.
 
4.12   Intellectual Property. 
 
4.12.1   The Purchased Assets include all Intellectual Property Rights necessary
to enable Buyer to use the Purchased Assets in the manner in which Seller used
the Purchased Assets on the Closing Date, without the need for any additional
licenses from any person.
 
4.12.2   The Purchased Assets and the distribution, sale and license of such
Purchased Assets, including but not limited to the Documentation and the
Intellectual Property Rights do not infringe upon any Intellectual Property
Rights of any third party and no third party has asserted or threatened to
assert against Seller any claim of infringement of Intellectual Property Rights.
 
4.12.3   Seller owns, possesses, has the exclusive right to make, use, sell,
license, has the right to bring actions for the infringement of, and where
necessary, has made timely and proper applications for, the Intellectual
Property Rights used in the Purchased Assets that are included in the Purchased
Assets.
 
4.12.4   Seller has not granted any third party any outstanding licenses or
other rights to any of the Purchased Assets.
 
4.12.5   None of the Purchased Assets is held or used pursuant to a license or
similar grant of rights by any third party.
 
4.12.6   Neither Seller nor any of its Affiliates is liable for, nor has made
any contract or arrangement whereby it may become liable to, any person for any
royalty, fee or other compensation for the ownership, use, license, sale,
distribution, manufacture, reproduction or disposition of any Purchased Asset.
 
 
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4.13   Product Warranties; Defects. Each Purchased Asset substantially conforms
with all applicable contractual commitments and all express warranties made by
Seller and there is, to the knowledge of Seller, no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any such contractual commitments or express warranties
for replacement or material repair thereof or other material damages in
connection therewith. No Purchased Asset is subject to any guaranty, warranty,
or other indemnity beyond Seller’s applicable standard terms and conditions of
sale, lease or licensing (as set forth in written agreements that Seller has
delivered to Buyer) or beyond that imposed by applicable law.
 
4.14   Assigned Contracts.
 
4.14.1   Exhibit A identifies each Assigned Contract. Seller has delivered to
Buyer accurate and complete copies of all Contracts identified in Exhibit A,
including all amendments thereto. Each Assigned Contract is valid and binding
against Seller and, to Seller’s knowledge, each other party thereto.
 
4.14.2   Except as set forth in Section 4.14 of the Seller Disclosure Schedule:
(i) to Seller’s knowledge no party has violated or breached, or declared or
committed any default under, any Assigned Contract; (ii) to Seller’s knowledge
no event has occurred, and no circumstance or condition exists, that might (with
or without notice or lapse of time) (A) result in a violation or breach of any
of the provisions of any Assigned Contract, (B) give any party the right to
declare a default or exercise any remedy under any Assigned Contract, (C) give
any party the right to accelerate the maturity or performance of any Assigned
Contract, or (D) give any party the right to cancel, terminate or modify any
Assigned Contract; (iii) Seller has not received any notice or other
communication (in writing or otherwise) regarding any actual, alleged, possible
or potential violation or breach of, or default under, any Assigned Contract;
and (iv) Seller has not waived any right under any Assigned Contract.
 
4.14.3   No party is renegotiating, or has the right to renegotiate, any amount
paid or payable to Seller under any Assigned Contract or any other term or
provision of any Assigned Contract.
 
4.14.4   Except as set forth in Section 4.14 of the Seller Disclosure Schedule,
Seller has no knowledge of any basis upon which any party to any Assigned
Contract may object to (i) the assignment to Buyer of any right under such
Assigned Contract, or (ii) the delegation to or performance by Buyer of any
obligation under such Assigned Contract.
 
4.15   No Oral Amendments to Assigned Contracts. There is no oral amendment to
any of the Assigned Contracts.
 
4.16   No Bankruptcy. No order has been made, no petition presented, or
resolution passed for the winding-up of Seller, or then appointment of any
trustee or for the benefit of creditors or the preparation or commencement of
any bankruptcy or insolvency proceeding against Seller.
 
 
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4.17   Authorized Sales Channels. To Seller’s knowledge, no sales under the
Acquired Contracts by Seller have been made in violation of any Acquired
Contract.
 
4.18   No Brokers. Except for Signal Hill Capital Group LLC, no broker, finder
or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller or its Affiliates.
 
4.19   Full Disclosure. All of the representations and warranties made by Seller
under this ARTICLE 4 of this Agreement (as qualified by Seller Disclosure
Schedule attached hereto) and in the certificates delivered by Seller to Buyer
at the Closing are true, correct and complete in all material respects and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make such representations, warranties or
statements, in light of the circumstances under which they are made, not
misleading.
 
ARTICLE 5
 
Representations and Warranties of Buyer 
 
Buyer and Mobilepro, jointly and severally, represent and warrant to Seller that
each of the representations and warranties contained in the following sections
of this ARTICLE 5 is true and correct as of the date hereof and will be true and
correct as of the Closing Date.
 
5.1   Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland.
Buyer has all corporate power and authority required to carry on its business as
now conducted, to own or use the properties and assets that it purports to own
or use, and to perform all obligations under this Agreement and the Ancillary
Agreements. Buyer is duly qualified to transact business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities make such qualification
necessary, except where such failure would not individually or in the aggregate
have a material adverse effect on the operations, liabilities, condition
(financial or otherwise), prospects, results of operations or cash flow of
Buyer, or the transactions contemplated by this Agreement. Mobilepro is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Mobilepro has all corporate power and authority
required to carry on its business as now conducted, to own or use the properties
and assets that it purports to own or use, and to perform all obligations under
this Agreement and the Ancillary Agreements. Mobilepro is duly qualified to
transact business, and is in good standing, in each jurisdiction where the
character of the properties owned, lease or operated by it or the nature of its
activities make such qualification necessary, except where such failure would
not individually or in the aggregate have a material adverse effect on the
operations, liabilities, condition (financial or otherwise), prospects, results
of operations or cash flow of Mobilepro, or the transactions contemplated by
this Agreement.
 
5.2   Authorization of Transaction. Each of Buyer and Mobilepro has full
corporate power and authority to enter into, execute, deliver and perform its
obligations under this Agreement and each of the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and each of the Ancillary Agreements have been duly
authorized by all necessary corporate action on the part of Buyer and Mobilepro.
This Agreement has been duly and validly executed and delivered by each of Buyer
and Mobilepro, and (assuming due authorization, execution and delivery by
Seller) this Agreement constitutes a legal, valid and binding obligation of
Buyer enforceable against each of Buyer and Mobilepro in accordance with its
terms.
 
 
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5.3   No Conflict. The execution, delivery and performance of this Agreement do
not (a) violate or conflict with the charter or Bylaws of Buyer or the
certificate of incorporation, as amended, or bylaws, of Mobilepro, or (b)
violate any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Buyer or Mobilepro except such violations
as would not prevent or delay Buyer and Mobilepro from consummating the
transactions contemplated by this Agreement or (c) result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, rescission, amendment, acceleration or cancellation of, any of
agreement or any material note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument to which Buyer or
Mobilepro is a party or is bound.
 
5.4   Authorization of Common Shares. The Common Shares have been duly
authorized and, when issued and paid for in accordance with the terms of this
Agreement, will be duly authorized, validly issued, fully paid and
non-assessable, free and clear of all Encumbrances. The issuance of the Common
Shares does not require approval of the Mobilepro’s stockholders. Mobilepro is
not required to make any filings with the OTC Bulletin Board or any governmental
or regulatory authority.
 
5.5   Consents and Approvals. The execution and delivery of this Agreement and
the Ancillary Agreements by Buyer and Mobilepro does not, and the performance of
this Agreement and the Ancillary Agreements by Buyer and Mobilepro will not,
require any consent, approval, authorization or other action by, or filing with
or notification to, any third party, including but not limited to any
governmental or regulatory authority.
 
5.6   No Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer, Mobilepro or any of their Affiliates.
 
5.7   Litigation. There is no claim, action, suit, investigation or proceeding
of any nature pending or, to the knowledge of Buyer or Mobilepro, threatened, at
law or in equity, by way of arbitration or before any court, governmental
department, commission, board or agency that: (i) may adversely affect, contest
or challenge Buyer’s authority, right or ability to purchase any of the
Purchased Assets from the Seller hereunder or otherwise perform Buyer’s or
Mobilepro’s obligations under this Agreement or any of the Ancillary Agreements;
(ii) challenges or contests Buyer’s right, title or ownership of any of the
Purchased Assets; (iii) seeks to enjoin, prevent or hinder the consummation of
any of the transactions contemplated by this Agreement or the Ancillary
Agreements; or (iv) would impair or have a material adverse effect on the
Buyer’s right or ability to use or exploit any of the Purchased Assets or impair
or have a material adverse effect on the value of any Purchased Asset.
 
5.8   Filings, Consents and Approvals. Neither Buyer nor Mobilepro is required
to obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person in connection with the
execution, delivery and performance by Buyer and Mobilepro of this Agreement or
the Ancillary Agreements, other than (i) the filing with the Commission of one
or more registration statements in accordance with the requirements of the
Registration Rights Agreement, (ii) filings required by state securities laws,
and the filing of a Notice of Sale of Securities on Form D with the Commission
as required under Regulation D of the Securities Act, and (iii) those that have
been made or obtained prior to the date of this Agreement.
 
 
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5.9    SEC Reports; Financial Statements. Mobilepro has filed all reports
required to be filed by Mobilepro under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the twelve (12) months
preceding the date hereof (“SEC Reports”) on a timely basis or has timely filed
a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed, or
any of the representations and warranties made by Mobilepro or Buyer under this
ARTICLE 5 contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Mobilepro included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with GAAP, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. 
 
5.10   Private Placement.
 
5.10.1   Neither Mobilepro nor any person acting on Mobilepro’s behalf has sold,
offered to sell or solicited any offer to buy the Common Shares by means of any
form of general solicitation or advertising. Neither Mobilepro, any of its
Affiliates nor any person acting on Mobilepro’s behalf has, directly or
indirectly, at any time within the past six (6) months, made any offer or sale
of any security or solicitation of any offer to buy any security under
circumstances that would (A) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
issuance of the Common Shares as contemplated hereby or (B) cause the issuance
of the Common Shares pursuant to this Agreement or the Ancillary Agreements to
be integrated with prior offerings by Mobilepro for purposes of any applicable
law, regulation or stockholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market.
 
5.10.2   Mobilepro is not a United States real property holding corporation
within the meaning of the Foreign Investment in Real Property Tax Act of 1980.
 
5.11   Form S-3 Eligibility. Except for the requirement regarding the aggregate
market value of the voting and non-voting common equity held by non-affiliates,
Mobilepro is eligible to register a primary offering of its Common Stock using a
registration statement on Form S-3 promulgated under the Securities Act.
 
 
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ARTICLE 6
 
Additional Covenants
 
6.1   Books and Records. Subject to the provisions of Section 6.2, if, in order
to properly prepare documents required to be filed with governmental authorities
(including taxing authorities) or its financial statements, it is necessary that
either party hereto or any successors be furnished with additional information
relating to the Purchased Assets or the Assumed Liabilities, and such
information is in the possession of the other party hereto, such party agrees to
use its reasonable efforts to furnish such information to such other party, at
the cost and expense of the party being furnished such information.
 
6.2   Confidentiality. All copies of financial information, marketing and sales
information, pricing, marketing plans, business plans, financial and business
projections, customer lists, methodologies, inventions, software, know-how,
product designs, product specifications and drawings, and other confidential
and/or proprietary information of related to any of the Purchased Assets,
including but not limited to the Documentation and the Intellectual Property
Rights (collectively, “Confidential Information”) will be held by each party in
strict confidence and, at all times following the Closing, will not be used or
disclosed by any party to any third party and, upon such other party’s request,
will be promptly destroyed by the appropriate party or delivered to such other
party; except that Seller may use internally copies of Business Records that it
is entitled to retain under Section 6.2 hereof solely to prepare and file tax
returns and prepare Seller’s financial statements. It is agreed that
Confidential Information will not include information that is now, or later
becomes, part of the general public knowledge, other than as a result of a
breach of this Agreement by a party hereto.
 
6.3   Regulatory and Other Authorizations; Consents.
 
6.3.1   Efforts. Each of Seller and Buyer will use its respective best efforts
to obtain all authorizations, consents, orders and approvals of all federal,
state and local regulatory bodies, courts, vendors and officials that may be or
become necessary for the execution and delivery of, and the performance of its
obligations pursuant to, this Agreement or any other agreements required to be
entered into by such party pursuant to this Agreement and will cooperate fully
with the other party in promptly seeking to obtain all such authorizations,
consents, orders and approvals. The parties hereto will not take any action that
will have the effect of delaying, impairing or impeding the receipt of any
required approvals.
 
6.3.2   Communication. Seller on the one hand, and Buyer on the other hand, will
promptly inform the other of any material communication between such party and
any federal, state, local or foreign government or governmental authority or
court regarding any of the transactions contemplated by this Agreement and the
Ancillary Agreements. If either Seller, Buyer or any Affiliate thereof receives
a request for additional information or for documents or any material from any
such government or governmental authority with respect to the transactions
contemplated hereby, then such party will endeavor in good faith to make or
cause to be made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such request. No
written materials will be submitted by either Seller or Buyer to any federal,
state, or local governmental agency, nor will any oral communications be
initiated with such governmental entities by a party, without prior disclosure
to and coordination with the other party and its counsel.
 
 
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6.4   Further Actions. From and after the Closing, each of the parties hereto
will execute and deliver such documents and other papers and take such further
actions as may be reasonably required to carry out the provisions of this
Agreement or any other agreements required to be entered into by such party
pursuant to this Agreement and give effect to the transactions contemplated by
this Agreement and the Ancillary Agreements.
 
6.5   Furnishing of Outstanding Business Proposals. Prior to or concurrently
with the Closing, Seller will furnish to Buyer with copies of all material
business proposals (including names and status of discussions with prospective
customers and strategic partners) that are pending or outstanding with respect
to the Purchased Assets.
 
6.6   Non-Solicitation.
 
6.6.1   Non-solicitation. For a period of five (5) years after the Closing Date,
Seller shall not, directly or indirectly, cause or attempt to cause any
customer, client, account or vendor, or prospective customer, client, account or
vendor to divert, terminate, limit or in any manner modify or fail to enter into
any actual or potential business relationship with Buyer relating to
telecommunications services or the Purchased Assets. For a period of three (3)
years after the Closing Date, Seller shall not, directly or indirectly, divert,
solicit or employ, or attempt to divert, solicit or employ, any individual
employed or retained as a consultant by Buyer or by Seller in connection with
the Business at any time during the 12-month period prior to the Closing Date.
For purposes of this Section 6.6.1, a prospective customer, client, account or
vendor shall mean any customer, client, account or vendor that Seller was
involved with or any director or executive officer of Seller had knowledge of in
his or her position with Seller for the 12-month period prior to the Closing
Date.
 
6.6.2   Necessary and Reasonable. Seller agrees that the covenants provided for
in Section 6.6 hereof are necessary and reasonable in order to protect Buyer in
the conduct of its business, to protect the trade secrets and other proprietary
information of Buyer and to protect Buyer in the utilization of the assets,
tangible and intangible, including the goodwill of Buyer.
 
6.7   Adjustments in Purchase Price. The amount of the Revenue Sharing Payments
due and payable to Seller in accordance with Section 2.3 shall be adjusted as
follows:
 
6.7.1   If Buyer’s Post-Closing Statement of Assets, Liabilities and Collections
(as defined below) reveals that the sum of (i) Accounts Receivable collected,
net of deferred revenue and accounts payable (“Net Accounts Receivable
Collected”) and (ii) Inventory equals less than $750,000, Buyer shall have the
right to reduce by one dollar for every dollar of such deficiency the amount of
future Revenue Sharing Payments.
 
 
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6.7.2   Within 150 days following the Closing, Buyer shall prepare and deliver
to Seller a statement of assets and liabilities representing the Purchased
Assets and Assumed Liabilities, as well as collections related to the Net
Accounts Receivable Collected as of the Effective Time prepared in a manner
consistent with prior periods (the “Post-Closing Statement of Assets,
Liabilities and Collections”), together with all work papers and back-up
materials relating thereto. The Post-Closing Statement of Assets, Liabilities
and Collections shall be conclusive and binding on the parties hereto unless
Seller gives written notice of any objections thereto setting forth in
reasonable detail the amounts in dispute and the basis for such dispute (a
“Purchase Price Objection Notice”) to Buyer within thirty (30) days after its
receipt of the Post-Closing Statement of Assets, Liabilities and Collections. If
Seller delivers a Purchase Price Objection Notice as provided above, Buyer and
Seller shall attempt in good faith to resolve such dispute. If Buyer and Seller
are unable to resolve, despite good faith negotiations, all disputes reflected
in the Purchase Price Objection Notice within ten (10) days thereafter, then
Buyer and Seller will within ten (10) days submit any such unresolved dispute to
a nationally recognized independent accounting firm which is not then engaged
by, or who was not previously engaged by, Buyer or Seller (the “Independent
Accounting Firm”). Buyer and Seller shall provide to the Independent Accounting
Firm all work papers and back-up materials relating to the unresolved disputes
requested by the Independent Accounting Firm to the extent available to Buyer or
Seller. Buyer and Seller shall be afforded the opportunity to present to the
Independent Accounting Firm any material related to the unresolved disputes and
to discuss the issues with the Independent Accounting Firm. The determination by
the Independent Accounting Firm, as set forth in a notice to be delivered to
Buyer and Seller within thirty (30) days after the submission of the unresolved
disputes to the Independent Accounting Firm, shall be final, binding and
conclusive on Buyer and Seller. The fees and expenses of the Independent
Accounting Firm shall be borne at the sole cost and expense of Buyer if the
Independent Accounting Firm’s determination of the amount of the reduction in
the amount of the Revenue Sharing Payments differs from Buyer’s determination by
10% or more. Otherwise, the fees and expenses of the Independent Accounting Firm
shall be borne at the sole cost and expense of Seller.
 
ARTICLE 7
 
Tax Matters
 
7.1   Taxes Related to Sale of Purchased Assets. Seller shall be responsible
for, and shall pay all excise, value added, registration, stamp, property,
documentary, transfer, sales, use and similar Taxes, levies, charges and fees
incurred, or that may be payable to any taxing authority, in connection with the
transactions (including without limitation the sale, transfer, and delivery of
the Purchased Assets) contemplated by this Agreement (collectively, “Transaction
Taxes”). Seller shall be responsible for preparing and filing any tax return
relating to such Transaction Taxes and shall provide a copy of such return to
Buyer. Buyer and Seller agree to cooperate in minimizing the amount of any such
Transaction Taxes and in the filing of all necessary documentation and all Tax
returns, reports and forms with respect to all such Transaction Taxes, including
any available pre-Closing filing procedures, such as exemption or resale
certificates that would minimize Transaction Taxes.
 
7.2   Other Taxes. Except as provided in Section 7.1 above, (i) Seller shall be
responsible for and shall pay any and all Taxes with respect to the Purchased
Assets relating to all periods (or portions thereof) ending on or prior to the
Closing Date, and (ii) Buyer shall be responsible for and shall pay any and all
Taxes with respect to the Purchased Assets relating to all periods (or portions
thereof) commencing January 1, 2007.
 
 
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ARTICLE 8
 
Conditions To the Closing
 
8.1   Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement will be subject to
the fulfillment (or waiver by Seller in writing), at or prior to the Closing, of
each of the following conditions:
 
8.1.1   Accuracy of Representations and Warranties: The representations and
warranties of Buyer contained in ARTICLE 5 of this Agreement will be true and
correct in all material respects as of the Closing, with the same force and
effect as if made as of the Closing, (other than such representations and
warranties as are expressly made as of another date) and Seller will have
received a certificate to such effect, dated as of the Closing Date, executed by
a duly authorized representative of Buyer.
 
8.1.2   Compliance with Covenants. All the covenants contained in this Agreement
to be complied with by Buyer on or before the Closing will have been complied
with and Seller will have received a certificate to such effect, dated as of the
Closing Date, executed by a duly authorized representative of Buyer.
 
8.1.3   No Adverse Order. No federal or state governmental authority or other
agency or commission or federal or state court of competent jurisdiction will
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise restraining or prohibiting
consummation of such transactions.
 
8.1.4   No Litigation. No suit, claim, cause of action, arbitration,
investigation or other proceeding contesting, challenging or seeking to alter or
enjoin or adversely affect the sale and purchase of the Purchased Assets or any
other transaction contemplated hereby will be pending or threatened.
 
8.1.5   Assumption Agreement. Seller shall have received a counterpart of the
Assumption Agreement, executed on behalf of Buyer by a duly authorized
representative of Buyer.
 
8.1.6   Transition Services Agreement. Seller shall have received a counterpart
of the Transition Services Agreement, executed on behalf of Buyer by a duly
authorized representative of Buyer.
 
8.1.7   Registration Rights Agreement. Seller shall have received a counterpart
of the Registration Rights Agreement, executed on behalf of Buyer by a duly
authorized representative of Buyer.
 
8.1.8   Other Deliveries. Buyer will have made the other deliveries required of
it by Section 3.3 hereof.
 
8.2   Conditions to Obligations of Buyer. The obligations of Buyer to consummate
the transactions contemplated by this Agreement will be subject to the
fulfillment to the satisfaction of Buyer (or waiver by Buyer in writing), at or
prior to the Closing, of each of the following conditions:
 
 
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8.2.1   Closing Date Statement of Assets and Liabilities. Seller shall have
delivered the Closing Date Statement of Assets and Liabilities accompanied by a
certificate from a duly authorized officer of Seller, as of the Closing Date as
to the preparation and delivery of the Closing Date Statement of Assets and
Liabilities. 
 
8.2.2   Accuracy of Representations and Warranties. The representations and
warranties of Seller contained in ARTICLE 4 of this Agreement will be true and
correct in all material respects as of the Closing, with the same force and
effect as if made as of the Closing (other than such representations and
warranties that are expressly made as of another date), and Buyer will have
received a certificate to such effect, dated as of the Closing Date, executed by
a duly authorized officer of Seller.
 
8.2.3   Compliance with Covenants. All the covenants contained in this Agreement
to be complied with by Seller on or before the Closing will have been complied
with, and Buyer will have received a certificate of Seller to such effect, dated
as of the Closing Date, signed by a duly authorized officer of Seller.
 
8.2.4   Seller’s Outstanding Business Proposals. Seller will have furnished to
Buyer copies of all material business proposals outstanding, if any, for
Seller’s utilization of the Purchased Assets.
 
8.2.5   No Order. No federal or state governmental authority or other agency or
commission or federal or state court of competent jurisdiction will have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and has the effect of making any of the transactions contemplated by
this Agreement illegal or otherwise restraining or prohibiting consummation of
such transactions.
 
8.2.6   No Litigation. No suit, claim, cause of action, arbitration,
investigation or other proceeding contesting, challenging or seeking to alter,
enjoin or adversely affect the sale and purchase of the Purchased Assets or any
other transaction contemplated hereby will be pending or threatened.
 
8.2.7   Release of Encumbrances. Any Encumbrance with respect to any Purchased
Asset shall have been released to the satisfaction of Buyer.
 
8.2.8   Third Party Consents. Seller will have obtained and delivered to Buyer
all consents, waivers and approvals from third parties and governmental entities
necessary to effect the assignment and transfer to Buyer of the Purchased Assets
free and clear of all Encumbrances and the assignment to Buyer of all Assigned
Contracts, including without limitation, the consent of Verizon Wireless and
those consents listed on Section 4.5 of Seller Disclosure Schedule.
 
8.2.9   No Other Action. No order has been made, no petition presented, or
resolution passed for the winding-up of Seller, or the appointment of any
trustee for the benefit of creditors or the preparation or commencement of any
bankruptcy or insolvency proceeding.
 
 
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8.2.10   Bill of Sale. Buyer shall have received the Bill of Sale, executed on
behalf of Seller by a duly authorized representative of Seller.
 
8.2.11   Assumption Agreement. Buyer shall have received a counterpart of the
Assumption Agreement, executed on behalf of Seller by a duly authorized
representative of Seller.
 
8.2.12   Transition Services Agreement. Buyer shall have received a counterpart
of the Transition Services Agreement, executed on behalf of Seller by a duly
authorized representative of Seller.
 
8.2.13   Registration Rights Agreement. Buyer shall have received a counterpart
of the Registration Rights Agreement, executed on behalf of Seller by a duly
authorized representative of Seller.
 
8.2.14   Other Deliveries. Seller will have made the other deliveries required
by Section 3.2 hereof.
 
ARTICLE 9
 
post-closing covenants of Seller
 
9.1   No Transfer. Without the written consent of Buyer, which consent shall not
be unreasonably withheld, Seller agrees that it shall not sell, pledge,
hypothecate, assign or otherwise transfer, directly or indirectly, legally or
beneficially, this Agreement or any benefit hereunder other than to any of its
majority-owned subsidiaries, to a financial institution, or pursuant to a sale
of all or substantially all of the assets of Seller, a merger or consolidation
of Seller or otherwise by operation of law.
 
9.2   Payments to Buyer. In the event that Seller receives any payments that
relate to any Assigned Contracts or otherwise relate to the Purchased Assets,
Seller shall promptly deliver such payment by reputable overnight delivery
service to Buyer at the address set forth in 12.1 or wire transfer to an account
specified by Buyer and shall notify Buyer by email at the email address set
forth in Section 12.1.
 
9.3   Customer and Other Business Relationships. After Closing, Seller will
cooperate with Buyer in its efforts to maintain Buyer’s customer relationships
pursuant to the Assigned Contracts. Seller will satisfy the Excluded Liabilities
and Buyer will satisfy the Assumed Liabilities in a manner which is not
detrimental to any of such relationships. Seller will refer to Buyer all
inquiries relating to the Purchased Assets. Neither Seller nor any of its
officers, employees or agents, shall take any action which would tend to
diminish the value of the Purchased Assets after Closing or that would interfere
with the business of Buyer to be engaged in after the Closing Date, including,
without limitation, disparaging the name or business of Buyer. Neither Buyer nor
any of its officers, employees or agents, shall take any action that would
interfere with the business of Seller to be engaged in after the Closing Date,
including, without limitation, disparaging the name or business of Seller.
 
 
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ARTICLE 10
 
Additional Post-Closing Agreements
 
10.1   Reports Regarding Revenue Sharing Payments. For a period of three years
following the Closing Date, Buyer will deliver to Seller not later than the
twentieth day of each month a report of estimated collections subject to the
Revenue Sharing Payments for the preceding month, commencing February 2007. At
the end of each calendar year, in connection with the audit of Buyer conducted
by Buyer’s independent certified public accounting firm, Seller shall receive by
June 15 a report, certified by the independent certified public accounting firm
responsible for auditing Buyer’s financial statements, of the annual amount of
such Revenue Sharing Payments.
 
10.2   Collection of Accounts Receivable. Buyer shall use commercially
reasonable efforts to collect the Accounts Receivable in a manner that is
consistent with prevailing industry practice.
 
10.3   Audit Right. At Seller’s request, Buyer shall allow Seller to audit,
without charge and to copy at Seller’s expense, any books and records relating
to the Revenue Sharing Payments and the instruments, documents and agreements
Buyer has relating to the performance of the Buyer’s obligations under this
Agreement or other applicable legal requirements. Seller shall not be allowed to
exercise such right more than one time in any 12 month period.
 
10.4   Resolution of Disputes Regarding Revenue Sharing Payments. 
 
10.4.1   If Seller disputes Buyer’s calculation of the Revenue Sharing Payments,
Seller shall so notify Buyer in writing. Buyer and Seller shall then submit the
matter first to mediation, which shall be governed by, and conducted through,
the American Arbitration Association (“AAA”). If that mediation does not resolve
the dispute, then Buyer and Seller shall submit the matter to mandatory and
exclusive binding arbitration governed by the Federal Arbitration Act and
conducted through the AAA in the District of Columbia in accordance with the
American Arbitration Association Commercial Arbitration Rules. Such dispute or
controversy shall be settled by arbitration conducted by one arbitrator mutually
agreeable to Buyer and Seller. In the event that, within forty-five (45) days
after submission of any dispute to arbitration, Buyer and Seller cannot mutually
agree on one arbitrator, Buyer and Seller shall each select one arbitrator, and
the two arbitrators so selected shall select a third arbitrator. The decision of
the arbitrator or a majority of the three arbitrators, as the case may be, shall
be final, binding and conclusive upon the parties to the arbitration. Judgment
may be entered on the arbitrator(s)’ decision in any court having jurisdiction.
 
10.4.2   At the request of either party, the arbitrator(s) will enter an
appropriate protective order to maintain the confidentiality of information
produced or exchanged in the course of the arbitration proceedings.
 
10.4.3   The arbitrator(s) shall apply Maryland law to the merits of any dispute
or claim, without reference to rules of conflicts of law.
 
10.4.4   If the arbitrator(s) determine that the disputed Revenue Share Payments
should be at least 10% more than the amount determined by Buyer, then Buyer
shall pay the fees and expenses of the arbitrator(s) and the fees and expenses
of Seller’s counsel, but in the event that the disputed Revenue Share Payments
are less than 10% of the amount determined by Buyer, Seller shall pay the fees
and expenses of the arbitrator(s) and the fees and expenses of Buyer’s counsel.
 
 
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BUYER AND SELLER HAVE READ AND UNDERSTAND THIS SECTION 10.4, WHICH DISCUSSES
ARBITRATION. BUYER AND SELLER UNDERSTAND THAT BY SIGNING THIS AGREEMENT, BUYER
AND SELLER EACH AGREE TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THE CALCULATION OF THE REVENUE SHARING PAYMENTS PURSUANT TO
SECTION 2.3.1 OF THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF BUYER’S AND SELLER’S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES ARISING OUT OF, RELATING TO
OR IN CONNECTION WITH SECTION 2.3.1 OF THIS AGREEMENT.
 
ARTICLE 11
 
Indemnification
 
11.1   Loss Defined; Indemnitees. For purposes of this ARTICLE 11, the term
“Loss” will mean and include any and all liability, loss, damage, claim,
expense, cost, fine, fee, penalty, obligation or injury including, without
limitation, those resulting from any and all claims, actions, suits, demands,
assessments, investigations, judgments, awards, arbitrations or other
proceedings, together with reasonable costs and expenses including the
reasonable attorneys’ fees and other legal costs and expenses relating thereto.
As used in this ARTICLE 11, the term “Buyer Indemnitees” means and includes
Buyer and any present or future officer, director, employee or Affiliate of
Buyer; and the term “Seller Indemnitee” means and includes any present or future
officer, director, employee or Affiliate of Seller.
 
11.2   Indemnification by Seller. Seller agrees, subject to the other terms,
conditions and limitations of this Agreement (including the provisions of
ARTICLE 11 hereof), to indemnify Buyer and any Buyer Indemnitee against, and to
hold Buyer and each Buyer Indemnitee harmless from, all Loss arising out of:
 
(a)   any breach of any representation or warranty of Seller contained in
ARTICLE 4 of this Agreement or any certificate delivered pursuant to this
Agreement, to be true and correct as of the Closing or the breach or violation
of any covenant of Seller made herein;
 
(b)   any of the Excluded Assets or any of the Excluded Liabilities;
 
(c)   the Purchased Assets at any time or times on or prior to the Closing
(including without limitation any and all Taxes arising out of, or payable with
respect to, Seller’s business operations through the Closing that could give
rise to an Encumbrance upon the Purchased Assets or otherwise be enforceable
against a transferee of the Purchased Assets);
 
(d)   any failure of Seller to pay the Transaction Taxes;
 
 
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(e)   any demand, claim, debt, suit, cause of action, arbitration or other
proceeding (including, but not limited to, a warranty claim, a product liability
claim or any other claim) that is made or asserted by any third party that
relates to any Purchased Asset and that arose prior to the Closing; and
 
(f)   any demand, claim, debt, suit, cause of action or proceeding made or
asserted by a stockholder, creditor, receiver, or trustee in bankruptcy of
Seller, or of the property or assets of either, asserting that the transfer of
the Purchased Assets to Buyer hereunder constitutes a fraudulent conveyance,
fraudulent transfer or a preference under any applicable state or federal law,
including but not limited to the United States Bankruptcy Code.
 
11.3 Indemnification by Buyer. Buyer and Mobilepro agree, jointly and severally,
subject to the other terms, conditions and limitations of this Agreement
(including the provisions of ARTICLE 11 hereof), to indemnify Seller and any
Seller Indemnitee against, and to hold Seller and each Seller Indemnitee
harmless from, all Loss arising out of:
 
(a)   any breach of any representation or warranty of Buyer contained in ARTICLE
5 of this Agreement or any certificate delivered pursuant to this Agreement or
the breach or violation of any covenant of Buyer made herein;
 
(b)   any of the Assumed Liabilities;
 
(c)   or with respect to any of the Purchased Assets that arose during any time
period or portion thereof after the Closing (including without limitation any
and all Taxes arising out of, or payable with respect to, Buyer’s business
operations after the Closing); and
 
(d)   any demand, claim, debt, suit, cause of action, arbitration or other
proceeding (including, but not limited to, a warranty claim, a product liability
claim or any other claim) that is made or asserted by any third party that
relates to any Purchased Asset and arises after the Closing.
 
11.4   Procedures for Indemnification. As used herein, an “Indemnified Party”
means a party seeking indemnification pursuant to ARTICLE 11, and the term
“Indemnifying Party” means the party who is obligated to provide indemnification
under ARTICLE 11. The Indemnified Party agrees to give the Indemnifying Party
prompt written notice of any event, or any claim, action, suit, demand,
assessment, investigation, arbitration or other proceeding by or in respect of a
third party (a “Third-Party Claim”) of which it has knowledge, for which such
Indemnifying Party is entitled to indemnification under this ARTICLE 11. In the
case of a Third-Party Claim, the Indemnifying Party will have the right to
direct, through counsel of its own choosing, the defense or settlement of any
such Third-Party Claim at its own expense. In such case the Indemnified Party
may participate in such defense, but in such case the expenses of the
Indemnified Party will be paid by the Indemnified Party. The Indemnified Party
will promptly provide the Indemnifying Party with access to the Indemnified
Party’s records and personnel relating to any such Third-Party Claim during
normal business hours and will otherwise cooperate with the Indemnifying Party
in the defense or settlement of such Third-Party Claim, and the Indemnifying
Party will reimburse the Indemnified Party for all its reasonable out-of-pocket
costs and expenses incurred in providing such access, personnel and cooperation.
Upon assumption of the defense of any such Third-Party Claim by the Indemnifying
Party, the Indemnified Party will not pay, or permit to be paid, any part of any
claim or demand arising from such Third-Party Claim, unless the Indemnifying
Party consents in writing to such payment (which consent will not be
unreasonably withheld) or unless a final judgment from which no appeal may be
taken by or on behalf of the Indemnified Party is entered against the
Indemnified Party for such liability. No such Third-Party Claim may be settled
by the Indemnifying Party without the written consent of the Indemnified Party,
which consent will not be unreasonably withheld. If the Indemnifying Party fails
to defend or fails to prosecute or withdraws from such defense, then the
Indemnified Party will have the right to undertake the defense or settlement
thereof, at the Indemnifying Party’s expense. If the Indemnified Party assumes
the defense of any such Third-Party Claim pursuant to this ARTICLE 11 and
proposes to settle such Third-Party Claim prior to a final judgment thereon or
to forgo appeal with respect thereto, then the Indemnified Party will give the
Indemnifying Party prompt written notice thereof and the Indemnifying Party will
have the right to participate in the settlement or assume or reassume the
defense of such Third-Party Claim.
 
 
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11.5   Limitations on Indemnification.
 
(a)   Notwithstanding the foregoing, no Indemnifying Party shall have any
liability to indemnify an Indemnified Party with respect to any individual claim
or group of related claims unless and until the amount of any Loss sustained by
such Indemnified Party with respect to such individual claim or group of related
claims exceeds $25,000. The maximum aggregate liability of any Indemnifying
Party for any and all claims under this Agreement and the Ancillary Agreements
shall not exceed $2,500,000.
 
(b)   Notwithstanding anything herein to the contrary, no claim for
indemnification under this ARTICLE 11 may be brought after the 18-month period
following the Closing Date; provided, however, that claims for indemnification
relating to Taxes (including without limitation Transaction Taxes) may be
brought at any time prior to the expiration of the applicable statute of
limitation.
 
(c)   Without prejudice to the rights of any Indemnified Party to be
indemnified, held harmless and reimbursed when and as required by this Article
11, if any Loss sustained by an Indemnified Party is covered by an insurance
policy or an indemnification obligation of another Person (other than an
Affiliate of such Indemnified Party), the Indemnified Party shall use
commercially reasonable efforts to collect such insurance or indemnity payments.
If the Indemnified Party receives such insurance or indemnity payments prior to
being indemnified, held harmless and reimbursed under this Article 11 with
respect to such Loss, the payment by the Indemnifying Party with respect to such
Loss shall be reduced (but not below zero) by the net amount of such insurance
proceeds or indemnity payments to the extent related to such Loss, less
reasonable attorney’s fees and other expenses incurred in connection with such
recovery. If the Indemnified Party receives such insurance proceeds or indemnity
payments after being indemnified and held harmless by the Indemnifying Party
with respect to such Loss, the Indemnified Party shall pay to the Indemnifying
Party (up to a maximum of the total amount paid by the Indemnifying Party
pursuant to this Article 11 in respect of such Losses) the net amount of such
insurance proceeds or indemnity payment to the extent related to such Losses,
less reasonable attorney’s fees and other expenses incurred in connection with
such recovery. For purposes of this Section 11.5(c), an Indemnified Party shall
not be deemed to have received an insurance payment if such payment is made
under an insurance plan or program that is self funded by such Indemnified Party
or its Affiliates. If any Indemnified Party receives payment under this Article
11 on account of a claim that an Indemnifying Party believes in good faith is
covered by an insurance policy or an indemnification obligation of another
person or entity (other than an Affiliate of such Indemnified Party), that
Indemnified Party shall (i) on written request of the Indemnifying Party,
assign, to the extent assignable, its rights under such insurance policy or
indemnification obligation with respect to such claim to the Indemnifying Party
(to the extent of such payment) and (ii) be relieved of any further obligation
to pursue collection of such insurance or indemnification (except that, if
requested to do so by the Indemnifying Party, the Indemnified Party shall
reasonably cooperate with the Indemnifying Party, at the Indemnifying Party’s
sole expense, to collect any such insurance or indemnification).
 
 
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ARTICLE 12
 
 
General Provisions
 
12.1 Notices. All notices and other communications given or made pursuant hereto
will be in writing and will be deemed to have been duly given or made (a) as of
the date delivered, if delivered personally or by overnight courier, (b) on the
third Business Day after deposit in the U.S. mail, if mailed by registered or
certified mail (postage prepaid, return receipt requested), or (c) when
successfully transmitted by facsimile (with a confirming copy of such
communication to be sent as provided in clauses (a) or (b) above), and, in each
case to the parties at the following addresses or facsimile number (or at such
other address for a party as will be specified by like notice, except that
notices of changes of address will be effective upon receipt):
 

(a)
If to Buyer:

 
CloseCall America, Inc.
c/o Mobilepro Corp.
6701 Democracy Blvd., Suite 202
Bethesda, MD 20817
Attention: Jay O. Wright, CEO
Facsimile: (301) 315-9027
 
With copies via email (which will not constitute notice) to:
 
jwright22@closecall.com
hdeily@mobileprocorp.com
 
 
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And with a copy (which will not constitute notice) to:
 
Seyfarth Shaw LLP
815 Connecticut Ave., N.W., Suite 500
Washington, D.C. 20006
Attention: Ernest M. Stern, Esq.
Facsimile: (202) 828-5360
 

(b)
If to Seller:

 
275 West Street
Annapolis, MD 21401
Attention: Thomas M. Brandt Jr., Chief Financial Officer
Facsimile: (410) 280-1048

With a copy (which will not constitute notice) to:
 
DLA Piper US LLP
6225 Smith Ave.
Baltimore, MD 21209-3600
Attention: Wm. David Chalk, Esq.
Facsimile: (410) 580-3120

For purposes of this Agreement, a “Business Day” shall mean any day that is not
a Saturday, a Sunday or other day on which banking organizations in Washington,
D.C. are authorized or required by law to close.
 
12.2   Expenses. All fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the party
incurring such fees, costs and expenses.
 
12.3   Entire Agreement. This Agreement, the Ancillary Agreements, the schedules
and exhibits attached hereto and the Disclosure Schedules (including all
schedules thereto), constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings with respect to the subject matter hereof, both written and oral. 
 
12.4   Amendment/Waiver. This Agreement may not be amended or modified except by
an instrument in writing signed by Buyer and Seller. Waiver of any term or
condition of this Agreement will only be effective if an to the extent
documented in a writing signed by the party making or granting such waiver and
will not be construed as a waiver of any subsequent breach or waiver of the same
term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to enforce any provision hereof will not be
construed to be a waiver of the right of such party thereafter to enforce such
provisions.
 
 
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12.5   Public Announcements. Except (i) as may otherwise be required by law and
(ii) as described any Form 8-K and any press release attached as an exhibit
thereto that Seller may file with the Securities and Exchange Commission
disclosing the sale of the Purchased Assets, Seller will not make any public
announcements with respect to this Agreement or the transactions contemplated
herein or otherwise communicate with any news media without prior notification
to Buyer, and, to the maximum extent practicable, the parties will consult with
each other before holding any press conferences, analyst calls or other meetings
or discussions and before issuing any press release or other public
announcements with respect to the transactions contemplated by this Agreement.
The parties will provide each other the opportunity to review and comment upon
any press release or other public announcement or statement with respect to the
transactions contemplated by this Agreement, and will not issue any such press
release or other public announcement or statement prior to such consultation,
except as may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange. The
parties agree that the initial press release or releases to be issued with
respect to the transactions contemplated by this Agreement will be mutually
reasonably agreed upon prior to the issuance thereof. In addition, Seller will,
and will cause its Subsidiaries to consult with Buyer regarding communications
with customers, members and employees relating to the transactions contemplated
by this Agreement.
 
12.6   No Third-Party Beneficiaries. This Agreement is for the sole benefit of
the parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or will confer upon any other person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, except for the indemnification rights of an Indemnified Party
under ARTICLE 11.
 
12.7   Assignment. This Agreement will not be assigned by Buyer or Seller
without the prior written consent of the other party and any purported
assignment without such consent will be void; except, that (1) Buyer may,
without Seller’s consent, assign all or a portion of its rights and obligations
hereunder (including rights and obligations under the Ancillary Agreements) (i)
to Mobilepro, (ii) to any of its majority-owned subsidiaries, or (iii) in
connection with any merger, consolidation or sale of all or substantially all of
Buyer’s assets used in the business in which Buyer uses the Purchased Assets or
in connection with any similar transaction and (2) the Seller may, without
Buyer’s consent, assign all or a portion of its rights and obligations hereunder
(including rights and obligations under the Ancillary Agreements) (i) to any of
its majority-owned subsidiaries or (ii) in connection with any merger,
consolidation or sale of all or substantially all of the Seller’s assets used in
the business in which the Buyer uses the Purchased Assets or in connection with
any similar transaction; provided, however, that no such assignment by any party
shall relieve such party of any of its obligations under this Agreement,
including the obligation of Buyer to pay the Purchase Price and under ARTICLE
11.
 
12.8   Governing Law. This Agreement will be governed by, and construed in
accordance with, the Laws of the State of Maryland applicable to contracts
executed in and to be performed entirely within that State.
 
12.9   Consent to Jurisdiction. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the
State of Maryland or any Maryland state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement;
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court; and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting
in the State of Maryland or a Maryland state court.. 
 
 
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12.10   Headings; Interpretation. The headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they will be understood to be followed
by the words “without limitation.”
 
12.11   Construction. In the event of an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
 
12.12   Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed will be deemed to be an original but all of which will
constitute one and the same agreement.
 
12.13   Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.
 
12.14   Attorneys’ Fees. Should suit or arbitration be brought to enforce or
interpret any part of this Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys’ fees to be fixed by the court or the arbitrator(s), as applicable
(including costs, expenses and fees on any appeal). The prevailing party will be
entitled to recover its costs of suit, regardless of whether such suit proceeds
to final judgment.
 
12.15   Specific Performance. Buyer and Seller each acknowledge that, in view of
the uniqueness of the Purchased Assets and the transactions by this Agreement
and the Ancillary Agreements, a party would not have adequate remedy at law for
money damages if this Agreement or any Ancillary Agreement is not performed in
accordance with its respective terms. Each party to this Agreement therefore
agrees that the other party hereto shall be entitled to specific enforcement of
the terms of this Agreement and any Ancillary Agreement in addition to any other
remedy to which it may be entitled, at law or in equity.
 
 
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12.16   Confidentiality. Buyer and Seller each recognize that they have received
and will receive confidential information concerning the other during the course
of the negotiations and preparations. Accordingly, Buyer and Seller each agree
(a) to use its respective commercially reasonable efforts to prevent the
unauthorized disclosure of any confidential information concerning the other
that was or is disclosed during the course of such negotiations and
preparations, and is clearly designated in writing as confidential at the time
of disclosure, and (b) to not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the Asset
Purchase and related transactions. The obligations of this section will not
apply to information that (i) is or becomes part of the public domain, (ii) is
disclosed by the disclosing party to third parties without restrictions on
disclosure, (iii) is received by the receiving party from a third party without
breach of a nondisclosure obligation to the other party or (iv) is required to
be disclosed by law.
 
(Signatures begin on the next page.)
 
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly
authorized.
 
 

        TELECOMMUNICATION SYSTEMS, INC.  
   
   
    By:      

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Name: Thomas M. Brandt Jr.
Title: Chief Financial Officer
   

 

        CLOSECALL AMERICA, INC.  
   
   
    By:  
 
 

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Name: Jay O. Wright
Title: Chief Executive Officer
   

 

       
MOBILEPRO CORP.
 
   
   
    By:      

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Name: Jay O. Wright
Title: Chief Executive Officer
   

 
 
 
[Signature Page to Asset Purchase Agreement]
 
 
 

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EXHIBIT A
 
ASSIGNED CONTRACTS
 

 
 

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EXHIBIT B
 
ACCOUNTS PAYABLE AS OF NOVEMBER 30, 2006
 

 
 

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EXHIBIT C
 
BILL OF SALE
 

 
 

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EXHIBIT C
 
BILL OF SALE
 

 
 

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EXHIBIT D
 
ASSUMPTION AGREEMENT
 

 
 

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EXHIBIT E
 
TRANSITION SERVICES AGREEMENT
 

 
 

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EXHIBIT F
 
REGISTRATION RIGHTS AGREEMENT
 
 
 

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