GLOBAL SECURITY AGREEMENT
THIS GLOBAL SECURITY AGREEMENT (the
“
Agreement”) is
entered into as of June 30, 2008, by and among (i) MobilePro Corp.,
a Delaware corporation (“
Company ”)
and (ii) each subsidiary and affiliate of the Company listed
on
Schedule 1 attached
hereto (the “
Subsidiaries ,”
and collectively with the Company, the “
Grantors ”)
in favor of YA Global Investments, L.P. f/k/a Cornell Capital
Partners, L.P. (the “
Secured Party ”).
WHEREAS ,
the Secured Party is the holder of (i) certain secured convertible
debentures, issued pursuant to that certain Securities Purchase
Agreement, dated as of June 30, 2006 and that certain Securities
Purchase Agreement, dated as of August 28, 2006, (collectively, the
“
Original Securities Purchase Agreement ”),
(ii) promissory notes, and (iii) other evidence of indebtedness
issued by the Company to the Secured Party or to certain other
parties that subsequently assigned their rights in such convertible
debentures, promissory notes or other evidence of indebtedness to
the Secured Party, including the secured convertible debentures and
promissory notes listed on
Schedule 2 attached
hereto (as may be amended, supplemented and restated from time to
time, the “
Original Debentures ”);
WHEREAS ,
in connection with a certain Securities Purchase Agreement listed
in
Schedule 3 attached
hereto (as amended, supplemented and restated from time to time,
the “
Securities Purchase Agreement ”),
the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to amend and
restate the Original Securities Purchase Agreement and to amend and
restate the Original Debentures and to issue to the Secured Party
the Secured Convertible Debentures (the “
Secured Convertible Debentures ”);
WHEREAS ,
the Secured Party and certain of the Grantors are parties to
certain of the Prior Debt Documents (as defined
below);
WHEREAS, each
of the Grantors has executed and delivered (i) a Global Guaranty
Agreement, dated as of the date hereof, in favor of the Secured
Party pursuant to which the Grantors absolutely and unconditionally
guarantee to the Secured Party the payment and performance of all
now existing and hereafter arising Obligations (the “
Guaranty Agreement ”),
and (ii) an Intellectual Property Security Agreement, dated as of
the date hereof (the “
IP Security Agreement ”);
WHEREAS ,
certain Grantors have executed and delivered a Global Pledge
Agreement, dated as of the date hereof (the “
Pledge Agreement ”);
and certain Grantors with Real Estate have executed and delivered
mortgages in favor of the Secured Party.
WHEREAS, in
connection with the financial accommodations to the Company and
certain Subsidiaries by the Secured Party under the Secured
Convertible Debentures or otherwise, the Subsidiaries will directly
benefit from the extension of such financial accommodations as part
of the affiliated business operations of the Company and the
Subsidiaries.
NOW, THEREFORE, in
consideration of the promises and the mutual covenants herein
contained, and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND INTERPRETATIONS
1.1
Recitals .
The
above recitals are true and correct and are incorporated
herein, in their entirety, by this reference.
1.2
Interpretations .
Nothing
herein expressed or implied is intended or shall be construed
to confer upon any person other than the Secured Party any
right, remedy or claim under or by reason hereof.
1.3
Definitions .
(a)
To
the extent used in this Agreement and not defined herein,
terms defined in the UCC shall have the meanings (such
meanings to be equally applicable to both the singular and
plural forms of the terms defined) ascribed to such terms in
the UCC. To the extent the definition of any category or type
of Collateral is expanded by any amendment, modification or
revision to the UCC, such expanded definition will apply
automatically as of the date of such amendment, modification
or revision.
(b)
As
used in this Agreement, the following terms shall have the
meanings indicated below (such meanings to be equally
applicable to both the singular and plural forms of such
terms):
“
Collateral ”
has the meaning set forth in
Section 2.1 .
“
Deposit Account ”
has the meaning set forth in
Section 6.16 .
“
Event of Default ”
shall mean a Grantor defaulting in any of its obligations under (i)
this Agreement, and (ii) any other Transaction
Document.
“
GAAP ”
shall mean generally accepted accounting principles in the United
States of America.
“
Guaranty Agreement ”
has the meaning set forth in the recitals hereof.
“
Intellectual Property ”
shall mean all present and future trade secrets, know-how and other
proprietary information; trademarks, trademark applications,
internet domain names, service marks, trade dress, trade names,
business names, designs, logos, slogans (and all translations,
adaptations, derivations and combinations of the foregoing) indicia
and other source and/or business identifiers, and all registrations
or applications for registrations which have heretofore been or may
hereafter be issued thereon throughout the world; copyrights and
copyright applications; (including copyrights for computer
programs) and all tangible and intangible property embodying the
copyrights, unpatented inventions (whether or not patentable);
patents and patent applications; industrial design applications and
registered industrial designs; license agreements related to any of
the foregoing and income therefrom; books, records, writings,
computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code,
data, databases and other physical manifestations, embodiments or
incorporations of any of the foregoing; all other intellectual
property; and all common law and other rights throughout the world
in and to all of the foregoing.
Schedule 4 attached
hereto sets forth all Intellectual Property of the Grantors
( as
such Schedule may be amended, modified or supplemented from time to
time) .
“
IP Security Agreement ”
has the meaning set forth in the recitals hereof.
“
Lien ”
has the meaning set forth in
Section 4.2 .
“
Material Adverse Effect ”
shall mean any material and adverse affect as determined by the
Secured Party in its reasonable discretion upon (a) the
Grantors’ assets, business, operations, properties or
condition, financial or otherwise; (b) the Grantors’ ability
to make payment as and when due of all or any part of the
Obligations; or (c) the Collateral.
“
Obligations ”
shall mean and include any and all debts, liabilities, obligations,
covenants and duties owing by any Grantor to the Secured Party, now
existing or hereafter arising of every nature, type, and
description, whether liquidated, unliquidated, primary, secondary,
secured, unsecured, direct, indirect, absolute, or contingent, and
whether or not evidenced by a note, guaranty or other instrument,
and any amendments, extensions, renewals or increases thereof,
including, without limitation, all those under (i) the Transaction
Documents; (ii) any agreement or document related to the
Transaction Documents; or (iii) any other or related documents, and
including any interest accruing thereon after insolvency,
reorganization or like proceeding relating to the Grantors, whether
or not a claim for post-petition interest is allowed in such
proceeding, and all costs and expenses of the Secured Party
incurred in the enforcement, collection or otherwise in connection
with any of the foregoing, including, but not limited to,
reasonable attorneys’ fees and expenses and all obligations
of the Grantors to the Secured Party to perform acts or refrain
from taking any action.
“
Permitted Indebtedness ”
shall mean: (i) indebtedness evidenced by the Secured Convertible
Debentures; (ii) indebtedness described on the Disclosure Schedules
to the Securities Purchase Agreement; (iii) indebtedness incurred
solely for the purpose of financing the acquisition or lease of any
equipment by the Grantors, including capital lease obligations with
no recourse other than to such equipment; (iv) indebtedness, the
repayment of which (A) has been subordinated to the payment of the
Obligations on terms and conditions acceptable to the Secured
Party, including with regard to interest payments and repayment of
principal, (B) does not mature or otherwise require or permit
redemption or repayment prior to or on the 91st day after the
maturity date of any Secured Convertible Debenture then
outstanding; and (C) is not secured by any assets of the Grantors;
(v) indebtedness solely between a Grantor and/or one of its
domestic subsidiaries, on the one hand, and a Grantor and/or one of
its domestic subsidiaries, on the other which indebtedness is not
secured by any assets of such Grantor or any of its
subsidiaries,
provided that (A)
in each case a majority of the equity of any such domestic
subsidiary is directly or indirectly owned by a Grantor, such
domestic subsidiary is controlled by a Grantor and such domestic
subsidiary has executed a security agreement in the form of this
Agreement and (B) any such loan shall be evidenced by an
intercompany note that is pledged by such Grantor or its
subsidiary, as applicable, as collateral pursuant to this
Agreement; (vi) reimbursement obligations in respect of letters of
credit issued for the account of a Grantor or any of its
subsidiaries for the purpose of securing performance obligations of
such Grantor or its subsidiaries incurred in the ordinary course of
business so long as the aggregate face amount of all such letters
of credit does not exceed $500,000 at any one time; and (vii)
renewals, extensions and refinancing of any indebtedness described
in clause (i) or (iii) of this subsection.
“
Permitted Liens ”
shall mean (1) the security interest created by this Agreement, (2)
any prior security interest granted to the Secured Party, (3)
existing Liens disclosed by each Grantor on
Schedule 4.2 ;
(4) inchoate Liens for taxes, assessments or governmental charges
or levies not yet due, as to which the grace period, if any,
related thereto has not yet expired, or being contested in good
faith and by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP; (5) Liens of
carriers, materialmen, warehousemen, mechanics and landlords and
other similar Liens which secure amounts which are not yet overdue
by more than 60 days or which are being contested in good faith by
appropriate proceedings for which adequate reserves have been
established in accordance with GAAP; (6) non-exclusive licenses and
sublicenses, or leases or subleases granted to other persons not
materially interfering with the conduct of the business of the
Grantors; (7) Liens securing capitalized lease obligations and
purchase money indebtedness incurred solely for the purpose of
financing an acquisition or lease; (8) easements, rights-of-way,
restrictions, encroachments, municipal zoning ordinances and other
similar charges or encumbrances, and minor title deficiencies, in
each case not securing debt and not materially interfering with the
conduct of the business of the Grantors and not materially
detracting from the value of the property subject thereto; (9)
Liens arising out of the existence of judgments or awards which
judgments or awards do not constitute an Event of Default; (10)
Liens incurred in the ordinary course of business in connection
with workers compensation claims, unemployment insurance, pension
liabilities and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary
course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature (other
than appeal bonds) incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money); (11) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of
set-off) and contractual set-off rights held by such banking
institution and which are within the general parameters customary
in the banking industry and only burdening deposit accounts or
other funds maintained with a creditor depository institution; (12)
usual and customary set-off rights in leases and other contracts;
and (13) escrows in connection with acquisitions and
dispositions.
“
Pledge Agreement ”
has the meaning set forth in the recitals hereof.
“
Prior Debt Documents ”
means the Original Debentures and the Original Securities Purchase
Agreements, and any other existing security agreements, guaranty
agreements, pledge agreements credit agreement or other facility,
mortgage, other debenture agreements or instruments, by and among
the Secured Party and any of the Grantors, under which there may be
issued, or by which there may be secured or evidenced any
indebtedness for borrowed money or evidencing any outstanding
obligation of any Grantor to the Secured Party, and any other
existing documents executed in connection with any of the
foregoing.
“
Real Estate ”
means all leases and all land, together with the buildings,
structures, parking areas, and other improvements thereon, now or
hereafter owned by any Grantor, including all easements,
rights-of-way, and similar rights relating thereto and all leases,
tenancies, and occupancies thereof.
Schedule 5 attached
hereto sets forth all Real Estate of the Grantors (
as
such Schedule may be amended, modified or supplemented from time to
time).
“
Transaction Documents ”
shall mean (i) this Agreement, (ii) the Secured Convertible
Debentures, (iii) the Securities Purchase Agreement, (iv), the
Guaranty Agreement, (v) the Pledge Agreement, (vi) the IP Security
Agreement, (vi) the Prior Debt Documents, (vii) any other
mortgages, pledges, or other collateral documents and any UCC-1
Financing Statement required by the Secured Party, and (viii) any
amendment, amendment and restatement, modification or supplement to
any of the foregoing.
“
UCC ”
or “
Uniform Commercial Code ”
means the
Uniform Commercial Code as in effect from time to time in the State
of New Jersey;
provided ,
however ,
that if a term is defined in Article 9 of the Uniform Commercial
Code differently than in another Article thereof, the term shall
have the meaning set forth in Article 9 of the UCC;
provided
further that,
if by reason of mandatory provisions of law, perfection, or the
effect of perfection or non-perfection, of a security interest in
any Collateral or the availability of any remedy hereunder is
governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New Jersey, “Uniform Commercial
Code” means the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or
availability of such remedy, as the case may be.
ARTICLE 2.
SECURITY INTEREST
2.1
Grant of Security Interest .
(a)
As
security for the payment or performance in full of the
Obligations, each Grantor hereby pledges to the Secured Party,
its successors and assigns, and hereby grants to the Secured
Party, its successors and assigns, a security interest in and
to all assets and personal property of each Grantor, wherever
located and whether now or hereinafter existing and whether
now owned or hereafter acquired, of every kind and
description, tangible or intangible, including without
limitation, all Real Estate, Goods, Inventory, Equipment,
Fixtures, Instruments, Documents, Accounts, Contracts and
Contract Rights, Chattel Paper, Deposit Accounts, Money,
Letters of Credit and Letter-of-Credit Rights, Commercial Tort
Claims, Securities and all other Investment Property, General
Intangibles, Farm Products, all books and records and
information relating to any of the foregoing, all supporting
obligations, and any and all Proceeds and products of any and
all of the foregoing, and as more particularly described
on
Exhibit A attached
hereto (collectively, the
Collateral );
and
(b)
Simultaneously
with the execution and delivery of this Agreement, each
Grantor shall make, execute, acknowledge, file, record and
deliver to the Secured Party such documents, instruments, and
agreements, including, without limitation, financing
statements, mortgages, certificates, affidavits and forms as
may, in the Secured Party’s reasonable judgment, be
necessary to effectuate, complete or perfect, or to continue
and preserve, the security interest of the Secured Party in
the Collateral.
2.2
No Assumption of Liability.
The
security interest in the Collateral is granted as security
only and shall not subject the Secured Party to, or in any way
alter or modify any obligation or liability of, any Grantor
with respect to or arising out of the Collateral.
ARTICLE 3.
ATTORNEY-IN-FACT; PERFORMANCE
3.1
Secured Party Appointed Attorney-In-Fact .
Each
Grantor hereby appoints the Secured Party as its
attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of each Grantor or otherwise,
from time to time in the Secured Party’s discretion to
take any action and to execute any instrument which the
Secured Party may reasonably deem necessary to accomplish the
purposes of this Agreement or for the purpose of perfecting,
confirming, continuing , enforcing or protecting the security
interest in the Collateral, including, without limitation, to
(a) file one or more financing statements, continuing
statements, filings with the United States Patent and
Trademark Office or United States Copyright Office (or any
successor office) or other documents; (b) receive and collect
all instruments made payable to a Grantor representing any
payments in respect of the Collateral or any part thereof and
to give full discharge for the same; and (c) demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose,
or realize on the Collateral as and when the Secured Party may
determine. To facilitate collection, the Secured Party may
notify account debtors and obligors on any Collateral to make
payments directly to the Secured Party. The foregoing power of
attorney is a power coupled with an interest and shall be
irrevocable until all Obligations are paid and performed in
full. The Grantors agree that the powers conferred on the
Secured Party hereunder are solely to protect the Secured
Party’s interests in the Collateral and shall not impose
any duty upon the Secured Party to exercise any such
powers.
3.2
Secured Party May Perform .
If
a Grantor fails to perform any agreement contained herein, the
Secured Party, at its option, may itself perform, or cause
performance of, such agreement, and the expenses of the
Secured Party incurred in connection therewith shall be
included in the Obligations secured hereby and payable by the
Grantors under
Section 8.4 .
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
4.1
Authorization: Enforceability .
Each
of the parties hereto represents and warrants that it has
taken all action necessary to authorize the execution,
delivery and performance of this Agreement and the
transactions contemplated hereby; and upon execution and
delivery, this Agreement shall constitute a valid and binding
obligation of the respective party, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors’ rights or by the principles
governing the availability of equitable remedies.
4.2
Ownership of Collateral; Priority of Security Interest
.
Each
Grantor represents and warrants that it is the legal and
beneficial owner of the Collateral free and clear of any lien,
security interest, option or other charge or encumbrance
(each, a “
Lien ”)
except for the Permitted Liens. Except for the Permitted Liens, (i)
the security interest granted to the Secured Party hereunder shall
be a first priority security interest subject to no other Liens,
and (ii) no financing statement covering any of the Collateral or
any proceeds thereof is on file in any public office.
4.3
Location of Collateral .
The
Collateral is or will be kept at the address(es) of each
Grantor set forth on
Schedule 4.3 attached
hereto. Unless otherwise provided herein, the Grantors will not
remove any Collateral from such locations without the prior written
consent of the Secured Party.
4.4
Location, State of Incorporation and Name of Grantors
.
Each
Grantor’s principal place of business; state of
incorporation, organization or formation, organizational
identification, and exact legal name is set forth on
Schedule 4.4 attached
hereto.
4.5
Solvency .
Each
of the Grantors is able to pay its debts as they mature, has
capital sufficient to carry on its business, and the fair
present saleable value of its assets, calculated on a going
concern basis, is in excess of the amount of its
liabilities.
ARTICLE 5.
DEFAULT; REMEDIES; SUBSTITUTE
COLLATERAL
5.1
Method of Realizing Upon the Collateral: Other Remedies
.
If
any Event of Default shall have occurred and be
continuing:
(a)
The
Secured Party may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein
or otherwise available to it, all of the rights and remedies
of a secured party upon default under the UCC (whether or not
the UCC applies to the affected Collateral), and also may (i)
take absolute control of the Collateral, including, without
limitation, transfer into the Secured Party’s name or
into the name of its nominee or nominees (to the extent the
Secured Party has not theretofore done so) and thereafter
receive, for the benefit of the Secured Party, all payments
made thereon, give all consents, waivers and ratifications in
respect thereof and otherwise act with respect thereto as
though it were the outright owner thereof, (ii) require each
Grantor to assemble all or part of the Collateral as directed
by the Secured Party and make it available to the Secured
Party at a place or places to be designated by the Secured
Party that is reasonably convenient to both parties, and the
Secured Party may enter into and occupy any premises owned or
leased by a Grantor where the Collateral or any part thereof
is located or assembled for a reasonable period in order to
effectuate the Secured Party’s rights and remedies
hereunder or under law, without obligation to such Grantor in
respect of such occupation, and (iii) without notice except as
specified below and without any obligation to prepare or
process the Collateral for sale, (A) sell the Collateral or
any part thereof in one or more parcels at public or private
sale, at any of the Secured Party’s offices or
elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Secured
Party may deem commercially reasonable and/or (B) lease,
license or dispose of the Collateral or any part thereof upon
such terms as the Secured Party may deem commercially
reasonable. Each Grantor agrees that, to the extent notice of
sale or any other disposition of the Collateral shall be
required by law, at least ten (10) days’ notice to such
Grantor of the time and place of any public sale or the time
after which any private sale or other disposition of the
Collateral is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to make
any sale or other disposition of any Collateral regardless of
notice of sale having been given. The Secured Party may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Grantor hereby waives
any claims against the Secured Party arising by reason of the
fact that the price at which the Collateral may have been sold
at a private sale was less than the price which might have
been obtained at a public sale or was less than the aggregate
amount of the Obligations, even if the Secured Party accepts
the first offer received and does not offer such Collateral to
more than one offeree, and waives all rights that such Grantor
may have to require that all or any part of such Collateral be
marshaled upon any sale (public or private) thereof. Each
Grantor hereby acknowledges that (i) any such sale of the
Collateral by the Secured Party may be made without warranty,
(ii) the Secured Party may specifically disclaim any
warranties of title, possession, quiet enjoyment or the like,
and (iii) such actions set forth in clauses (i) and (ii) above
shall not adversely affect the commercial reasonableness of
any such sale of Collateral.
(b)
Any
cash held by the Secured Party as Collateral and all cash
proceeds received by the Secured Party in respect of any sale
of or collection from, or other realization upon, all or any
part of the Collateral shall be applied (after payment of any
amounts payable to the Secured Party pursuant to
Section 8.4 hereof)
by the Secured Party against, all or any part of the Obligations in
such order as the Secured Party shall elect, consistent with the
provisions of the Securities Purchase Agreement. Any surplus of
such cash or cash proceeds held by the Secured Party and remaining
after the indefeasible payment in full in cash of all of the
Obligations shall be paid over to whomsoever shall be lawfully
entitled to receive the same or as a court of competent
jurisdiction shall direct.
(c)
In
the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the
Secured Party is legally entitled, the Grantors shall be
liable for the deficiency, together with interest thereon at
the rate specified in the Secured Convertible Debentures for
interest on overdue principal thereof or such other rate as
shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs, expenses and other
client charges of any attorneys employed by the Secured Party
to collect such deficiency.
(d)
Each
Grantor hereby acknowledges that if the Secured Party complies
with any applicable state or federal law requirements in
connection with a disposition of the Collateral, such
compliance will not adversely affect the commercial
reasonableness of any sale or other disposition of the
Collateral.
(e)
The
Secured Party shall not be required to marshal any present or
future collateral security (including, but not limited to,
this Agreement and the Collateral) for, or other assurances of
payment of, the Obligations or any of them or to resort to
such collateral security or other assurances of payment in any
particular order, and all of the Secured Party’s rights
hereunder and in respect of such collateral security and other
assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent
permitted by applicable law, each Grantor hereby agrees that
it will not invoke any law relating to the marshaling of
collateral which might cause delay in or impede the
enforcement of the Secured Party’s rights under this
Agreement or under any other instrument creating or evidencing
any of the Obligations or under which any of the Obligations
is outstanding or by which any of the Obligations is secured
or payment thereof is otherwise assured, and, to the extent
permitted by applicable law, each Grantor hereby irrevocably
waives the benefits of all such laws.
5.2
Section 5.2
Duties Regarding Collateral .
The
Secured Party shall have no duty as to the collection or
protection of the Collateral or any income thereon or as to
the preservation of any rights pertaining thereto, beyond the
safe custody and reasonable care of any of the Collateral
actually in the Secured Party’s possession.
ARTICLE 6.
AFFIRMATIVE COVENANTS
So
long as any of the Obligations shall remain outstanding,
unless the Secured Party shall otherwise consent in
writing:
6.1
Existence, Properties, Etc .
Each
Grantor shall do, or cause to be done, all things, or proceed
with due diligence with any actions or courses of action, that
may be reasonably necessary (i) to maintain such
Grantor’s due organization, valid existence and good
standing under the laws of its state of incorporation, and
(ii) to preserve and keep in full force and effect all
qualifications, licenses and registrations in those
jurisdictions in which the failure to do so could have a
Material Adverse Effect; and (b) a Grantor shall not do, or
cause to be done, any act impairing the Grant
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