EXHIBIT
10.40
AMENDED AND RESTATED
GUARANTY AGREEMENT
THIS AMENDED AND RESTATED GUARANTY
AGREEMENT , dated as
of May 13, 2005, made by each of the direct and indirect
Subsidiaries of MOBILEPRO CORP., a Delaware
corporation (the “ Company ”), of the foregoing
Persons who have executed this Guaranty on the signature page below
(each, a “ Guarantor ” and collectively, the
“ Guarantors ”), in favor of CORNELL
CAPITAL PARTNERS, L.P. , a Delaware limited partnership
(“ Cornell ” l ).
W I T N
E S S E
T H :
WHEREAS , the Guarantors, as guarantors, and Airlie
Master Opportunity Fund, Ltd. (“ Airlie ”)
entered into a that certain Credit Agreement, dated as of November
15, 2004 (the " Credit Agreement "), providing for the
making of the loan as contemplated therein; and
WHEREAS , Mobilepro desires to pay in full all
outstanding obligations relating to the Credit Agreement;
and
WHEREAS , as partial consideration for making certain
loans to Mobilepro, a portion of the proceeds of which will be used
for the repayment of the obligation under the Credit Agreement,
Airlie shall assign to Cornell all of its right, title and interest
in and to the Security Document (as defined in the Credit
Agreement); and
WHEREAS , certain of the Security Documents will be
amended and restated as of even date herewith in connection with
Cornell extending certain financial accommodations to the Company;
and
WHEREAS , on even date herewith Cornell will purchase a
7.75% Secured Convertible Debenture (the “ Debenture
”) from the Company, of which a part of the proceeds will be
used to pay all outstanding obligations to Airlie under the Credit
Agreement; and
WHEREAS , it is a condition precedent to Cornell
purchasing the Debenture that each Guarantor shall have guaranteed
the obligations owed by the Company to Cornell; and
WHEREAS , each Guarantor desires to execute this
Agreement to satisfy the conditions described in the preceding
paragraph.
NOW, THEREFORE , in consideration of the premises and the
agreements herein and in order to induce Cornell to enter into the
Debenture and to make and maintain the Loan pursuant thereto, each
Guarantor hereby agrees with Cornell as follows:
Section
1. Definitions . Reference is hereby made to the Debenture for
a statement of the terms thereof. All terms used in this Guaranty
which are defined in the Debenture and not otherwise defined herein
shall have the same meanings herein as set forth
therein.
Section
2. Guaranty . Each Guarantor does hereby jointly and
severally (a) irrevocably, absolutely and unconditionally guaranty
the prompt payment by the Company, as and when due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all of the obligations (collectively, the
“ Obligations ”) from time to time owing by the
Company to Cornell under the Debenture and all other Transaction
Documents (as defined in the Debenture), whether for principal,
interest (including, without limitation, all interest that accrues
after the commencement of any insolvency proceeding with respect to
the Company, whether or not a claim for post-filing interest is
allowed in such proceeding), fees, commissions, expense
reimbursements, indemnifications or otherwise, and whether accruing
before or subsequent to the commencement of any insolvency
proceeding with respect to the Company (notwithstanding the
operation of the automatic stay under Section 362(a) of the U.S.
Bankruptcy Code), and the due performance and observance by the
Company of its other Obligations now or hereafter existing in
respect of the Debenture or the other Transaction Documents (the
“ Guaranteed Obligations ”), and (ii)
agrees to pay any and all expenses (including counsel fees and
expenses) incurred by Cornell in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Company
to Cornell under the Debenture and the other Transaction Documents
(the “ Credit Documents ”) but for the
fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding
involving the Company or any Guarantor.
Section
3. Guaranty Absolute; Continuing Guaranty;
Assignments .
(a)
Each Guarantor hereby jointly and
severally guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Credit Documents,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of Cornell with respect thereto. Each Guarantor agrees that
its guarantee constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made
by Cornell to any collateral. The Obligation of each Guarantor
under this Guaranty are independent of the Obligation under the
Debenture and the other Credit Documents, and a separate action or
actions may be brought and prosecuted against each Guarantor to
enforce this Guaranty, irrespective of whether any action is
brought against the Company or any Guarantor or whether the Company
or any Guarantor is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, any or all of the
following:
(i)
any lack of validity or
enforceability of any Credit Document or any agreement or
instrument relating thereto;
(ii)
any change in the time, manner or
place of payment of, or in any other term in respect of, all or any
of the Guaranteed Obligation, or any other amendment or waiver of
or any consent to departure from any Credit Document, including,
without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Company or
any Guarantor or otherwise;
(iii)
any taking, exchange, release or
non-perfection of any collateral, or any taking, release or
amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
(iv)
the existence of any claim,
set-off, defense or other right that each Guarantor may have
against any Person, including, without limitation,
Cornell;
(v)
any change, restructuring or
termination of the corporate, limited liability company or
partnership structure or existence of any Cornell; or
(vi)
any other circumstance (including
any statute of limitations) or any existence of or reliance on any
representation by Cornell that might otherwise constitute a defense
available to, or a discharge of, the Company or any other Guarantor
or surety.
This Guaranty
shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligation
is rescinded or must otherwise be returned by Cornell or any other
Person upon the insolvency, bankruptcy or reorganization of the
Company or any Guarantor or otherwise, all as though such payment
had not been made.
(b)
This Guaranty is a continuing
guaranty and shall (i) remain in full force and effect until the
later of (x) the payment in full, whether in cash or securities, as
the case may be, of the Guaranteed Obligation and all other amounts
payable under this Guaranty and (y) the Maturity Date, (ii) be
binding upon each Guarantor, its successors and assigns and (iii)
inure to the benefit of and be enforceable by Cornell and its
successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), Cornell may pledge,
assign or otherwise transfer all or any portion of its rights under
any Credit Document to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect
thereof granted to such Cornell herein or otherwise, in each case
as provided in the Debenture.
-2-
Section
4. Waivers . Each Guarantor hereby waives, to the full
extent permitted by applicable law, (i) promptness and diligence;
(ii) notice of acceptance and notice of the incurrence of any
Obligation by the Company or any Guarantor; (iii) notice of any
actions taken by Cornell under any Credit Document or any other
agreement or instrument related thereto; (iv) all other notices,
demands and protests, and all other formalities of every kind in
connection with the enforcement of the Obligation or of the
Obligation of each Guarantor hereunder, the omission of or delay in
which, but for the provisions of this Section 4, might constitute
grounds for relieving each Guarantor of its Obligation hereunder;
(v) any right to compel or direct Cornell to seek payment or
recovery of any amounts owed under this Guaranty from any one
particular fund or source; (vi) any requirement that Cornell
protect, secure, perfect or insure any security interest or
security interest or any property subject thereto or exhaust any
right or take any action against the Company, any other Guarantor
or any other Person or any collateral; and (vii) any other defense
available to each Guarantor. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in
this Section 4 is knowingly made in contemplation of such benefits.
Each Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the
future.
Section
5. Subrogation .
(a)
Until the final payment in cash and
securities pursuant to the terms of the Debenture and performance
in full of all of the Obligation, each Guarantor shall not exercise
any rights against the Company or any other Guarantor arising as a
result of payment by the Company or such Guarantor hereunder, by
way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with Cornell
in respect of any payment hereunder in any insolvency proceedings;
each Guarantor will not claim any set-off, recoupment or
counterclaim against the Company or any other Guarantor in respect
of any liability of each Guarantor to such Company or Guarantor;
and each Guarantor and the Company waives any benefit of and any
right to participate in any collateral security which may be held
by Cornell.
(b)
The payment of any amounts due with
respect to any indebtedness of the Company or each Guarantor for
money borrowed or credit received now or hereafter owed to each
Guarantor is hereby subordinated to the prior payment in full of
all of the Obligation. Each Guarantor agrees that, after the
occurrence of any default in the payment or performance of any of
the Obligation, each Guarantor will not demand, sue for or
otherwise attempt to collect any such indebtedness of the Company
or other Guarantor to each Guarantor until all of the Obligation
shall have been paid in full. If, notwithstanding the foregoing
sentence, each Guarantor shall collect, enforce or receive any
amounts in respect of such indebtedness while any Obligation are
still outstanding, such amounts shall be collected, enforced and
received by each Guarantor as trustee for Cornell and be paid over
to Cornell, on account of the Obligation without affecting in any
manner the liability of each Guarantor under the other provisions
of this Guaranty.
Section
6. Representations, Warranties and
Covenants . Each
Guarantor hereby represents and warrants as follows:
(a)
Each Guarantor (i) is a corporation
or other entity, duly organized, validly existing and in good
standing under the laws of the state or other applicable
jurisdiction of its organization as set forth on the first page
hereof, (ii) has all requisite power and authority to conduct its
business as now conducted and as presently contemplated and to
execute and deliver this Guaranty and each other Credit Document to
which each Guarantor is a party, and to consummate the transactions
contemplated hereby and thereby and (iii) is duly qualified
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