ASSET PURCHASE AGREEMENT

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 ”).

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:

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.

“ 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.

“ 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.

“ 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.

“ 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.

“ 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.

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:

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.

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.

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;

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;

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.

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.

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.

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 loc