Exhibit 10.1
 
THIS SECURED DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE
(COLLECTIVELY, THE “SECURITIES”), HAVE NOT BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE. THE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM
REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”). THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE OFFERED OR
SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION
D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE
AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE
EXCEPT IN COMPLIANCE WITH THE ACT.

 
MOBILEPRO CORP.
 
7.75% SECURED CONVERTIBLE DEBENTURE
 
June 30, 2006

No. CCP-
US$15,149,650

This Convertible Debenture (the “Debenture”) is issued on June 30, 2006
(the “Closing Date”) by MobilePro Corp., a Delaware corporation (the “Company”),
to Cornell Capital Partners, LP (together with its permitted successors and
assigns, the “Holder”) pursuant to exemptions from registration under the
Securities Act of 1933, as amended.

WHEREAS, the Company has issued to the Holder, and the Holder has purchased from
the Company a Secured Convertible Debenture on May 13, 2005 (the “Initial
Security”) for a purchase price of $15,500,000. The entire purchase price was
paid by the Holder on May 13, 2005. As of the date hereof, the outstanding
principal balance on the Initial Security equals $15,000,000 plus accrued and
unpaid interest of $149,650, for a total of $15,149,650.

On the Closing Date the Holder shall surrender the Initial Security to the
Company and the Company shall issue this Debenture to the Holder. This Debenture
shall be acquired by the Holder from the Company for a consideration consisting
solely of the Initial Security surrendered for conversion and shall be deemed to
have been acquired at the same time as the Initial Security.

 
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ARTICLE I.

Section 1.01 Principal and Interest. For value received, the Company hereby
promises to pay to the order of the Holder on December 31, 2007 (“Maturity
Date”), in lawful money of the United States of America and in immediately
available funds the principal sum of $15,149,650, together with interest on the
unpaid principal of this Debenture at the rate of seven and three-quarters
percent (7.75%) per year (compounded monthly) from the date of this Debenture
until paid. All unpaid principal amount and accrued interest shall be due and
payable to the Holder on the Maturity Date. In no event shall the Holder be
entitled to convert this Debenture for a number of shares of Common Stock in
excess of that number of shares of Common Stock which, upon giving effect to
such conversion, would cause the aggregate number of shares of Common Stock
beneficially owned by the Holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such conversion (unless the
Holder provides to the Company sixty-five (65) days prior written notice that
this provision shall not apply).

Section 1.02 Payments.

(a) The Company shall make weekly scheduled payments (“Scheduled Payments”)
consisting of at least $250,000 of principal, commencing with the first
Scheduled Payment which shall be due and payable on September 1, 2006. Interest
payments on the outstanding principal balance hereof shall be due and payable
with the principal payment installments above. The Company shall have the right
to make each Scheduled Payment in shares of Common Stock, which shares shall be
valued at the lower of $0.275 or a seven percent (7%) discount to the average of
the two lowest daily volume weighted average prices of the Company’s Common
Stock as quoted by Bloomberg, LP for the five (5) trading days immediately
following the Scheduled Payment date (the “Payment Conversion Price”), provided
that all such shares may only be issued by the Company if such shares are
tradeable under Rule 144 of the Securities and Exchange Commission (the
“Commission”), are registered for sale under the Securities Act of 1933 or are
freely tradeable without restriction in the hands of the Holder. All payments in
respect of the indebtedness evidenced hereby shall be made in collected funds
(unless paid in shares of Common Stock), and shall be applied to principal,
accrued interest and charges and expenses owing under or in connection with this
Debenture in such order as the Holder elects, except that payments shall be
applied to accrued interest before principal. Notwithstanding the foregoing,
this Debenture shall become due and immediately payable, including all accrued
but unpaid interest, upon an Event of Default (as defined in Section 3.01
hereof). Whenever any payment or other obligation hereunder shall be due on a
day other than a business day, such payment shall be made on the next succeeding
business day. Time is of the essence of this Debenture. The Company shall be
permitted to prepay any amounts owed under this Debenture if the price of the
shares of the Company’s Common Stock is less than $0.275 per share and also may,
at its option, increase any scheduled payment to $750,000 (payable in cash or
Common Stock as set forth above) without incurring any penalties or fees.
Nothing contained in this paragraph shall limit the amount that the Holder can
convert at any time.

 
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(b) Procedures for Making Payments in Stock. If the Company elects to make a
Scheduled Payment in shares of Common Stock, the Company shall provide the
Holder with written notice of such election (“Notice”), on or before the
Scheduled Payment date, which Notice shall be irrevocable. Once a Notice is
delivered by the Company, the Company shall have an unconditional obligation to
issue the shares of Common Stock corresponding to such Notice. Each Notice shall
set forth the amount of such Scheduled Payment that the Company is electing to
pay in shares of Common Stock (between $250,000 and $750,000, plus interest as
set forth in Section 1.02 (a)), confirm that the all conditions to the Company’s
right to make such Scheduled Payment in shares of Common Stock have been
satisfied, and be signed by an officer of the Company. The Company shall issue
the shares of Common Stock corresponding to each Notice within two (2) days
after the number of shares corresponding to such Notice is determinable. The
Company acknowledges that the Holder may sell shares of the Company’s Common
Stock corresponding with a particular Notice after the Notice is received by the
Holder and that the Holder will suffer financial hardship if the shares
corresponding to a Notice are not timely delivered.

Section 1.03 Right of Redemption.

(a) Common Stock Trading At or Above Conversion Price. In the event that the
Company’s common stock is trading at or above the Conversion Price, as adjusted
in accordance with Section 5.01 hereof, the Company at its option shall have the
right, with sixty (60) days advance written notice, to redeem a portion or all
amounts outstanding under this Debenture prior to the Maturity Date, provided
that at least the number of Conversion Shares representing all principal and
accrued interest then due and payable by the Company pursuant to the Debenture
are registered for sale under the Securities Act of 1933. The Company shall pay
an amount equal to the principal amount being redeemed plus a redemption premium
equal to twenty percent (20%) of the principal amount being redeemed, and
accrued interest (collectively referred to as the “In the Money Redemption
Amount”). The Company shall deliver to the Holder the In the Money Redemption
Amount within three (3) business days after expiration of the sixty-day notice
requirement.
 
In the event the Company exercises a redemption of either all or a portion of
the outstanding principal amounts plus accrued interest due and outstanding
under this debenture as outlined in this Section 1.03(a), the Holder shall
receive a warrant to purchase an amount of shares equal to one-third of the
principal amount redeemed divided by the Conversion Price. Such warrant shall be
exercisable on a “cash basis” at the Conversion Price, shall have “piggy-back”
and demand registration rights, and shall survive for a period of the shorter of
five (5) years from the Closing Date or eighteen (18) months after underlying
shares are registered for sale under the Securities Act of 1933 or are freely
tradeable without restriction in the hands of the Holder.
 
In the event that the Company redeems a portion of the amount outstanding under
this Debenture pursuant to this Section 1.03(a), the Company shall be entitled
to an off-set of the amount of principal and accrued interest due pursuant to
the Scheduled Payment equal to the amount of principal and accrued interest
redeemed or converted (the “In the Money Off-Set Amount”). In such event the
Company shall still be obligated to make a Scheduled Payment reduced by the In
the Money Off-Set Amount as contemplated by this Section 1.03(a).
 
 
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Notwithstanding the foregoing, in the event that the Company has elected to
redeem a portion of the outstanding principal amount and accrued interest under
this Debenture pursuant to this Section 1.03(a), the Holder shall be permitted
to convert all or any portion of this Debenture during such sixty day period.

(b) Common Stock Trading Below Conversion Price. In the event that the Company’s
common stock is trading below the Conversion Price, as adjusted in accordance
with Section 5.01 hereof, the Company at its option shall have the right, with
fifteen (15) days advance written notice, to redeem a portion or all amounts
outstanding under this Debenture prior to the Maturity Date, provided that at
least the number of Conversion Shares representing all principal and accrued
interest then due and payable by the Company pursuant to the Debenture are
registered for sale under the Securities Act of 1933.

In the event that the Company elects to exercise its redemption rights under
this Section 1.03(b), it shall pay a redemption premium to the Holder. The
Holder shall have the option, upon five (5) days written notice to elect to
receive an amount equal to the principal amount being redeemed plus a redemption
premium equal to ten percent (10%) of the principal amount being redeemed, and
accrued interest (the “Out of the Money Redemption Amount”); or the principal
amount being redeemed plus a warrant to purchase an amount of shares equal to
one-third of the principal amount redeemed divided by the Conversion Price. Such
warrant shall be exercisable on a “cash basis” at the Conversion Price, shall
have “piggy-back” and demand registration rights, and shall survive for a period
of the shorter of five (5) years from the Closing Date or eighteen (18) months
after underlying shares are registered for sale under the Securities Act of 1933
or are freely tradeable without restriction in the hands of the Holder. The
Company shall deliver to the Holder the Out of the Money Redemption Amount, or
the principal amount redeemed plus warrant, within three (3) business days after
expiration of the fifteen-day notice requirement.

In the event that the Company redeems a portion of the amount outstanding under
this Debenture pursuant to this Section 1.03(b), the Company shall be entitled
to an off-set of the amount of principal and accrued interest due pursuant to
the Scheduled Payment equal to the amount of principal and accrued interest
redeemed or converted (the “Out of the Money Off-Set Amount”). In such event the
Company shall still be obligated to make a Scheduled Payment reduced by the Out
of the Money Off-Set Amount as contemplated under this Section 1.03(b).
 
Notwithstanding the foregoing, in the event that the Company has elected to
redeem a portion of the outstanding principal amount and accrued interest under
this Debenture pursuant to this Section 1.03(b), the Holder shall be permitted
to convert all or any portion of this Debenture during such fifteen day period.

Section 1.04 Conversion. The Holder is entitled, at its option, to convert, and
sell on the same day, at any time and from time to time, until payment in full
of this Debenture, all or any part of the principal amount of the Debenture,
plus accrued interest, into shares (the “Conversion Shares”) of the Company’s
common stock, par value $0.001 per share (“Common Stock”), at the price per
share equal to $0.275 (the “Conversion Price”), as may be adjusted in accordance
with Section 5.01 hereof. No fraction of shares or scrip representing fractions
of shares will be issued on conversion, but the number of shares issuable shall
be rounded to the nearest whole share. To convert this Debenture, the Holder
hereof shall deliver written notice thereof, substantially in the form of
Exhibit A to this Debenture, with appropriate insertions (the “Conversion
Notice”), to the Company at its address as set forth herein. The date upon which
the conversion shall be effective (the “Conversion Date”) shall be deemed to be
the date set forth in the Conversion Notice. Any conversion under this Debenture
of all or any part of the principal amount of the Debenture, plus accrued
interest, shall be credited to the next scheduled payment of principal and
interest under Section 1.02 hereof, and if such next scheduled payment of
principal and interest is paid in full and an additional sum is available, then
such excess shall be applied to the next scheduled payment of principal and
interest under Section 1.02 hereof.

 
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Section 1.05 Reservation of Common Stock. The Company shall reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of this Debenture, 51,666,667 shares of
Common Stock as shall from time to time be sufficient to effect such conversion,
based upon the Conversion Price. If at any time the Company does not have a
sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders within
thirty (30) days of that time for the sole purpose of increasing the number of
authorized shares of Common Stock.

Section 1.06 Registration Rights. If the Company decides to register any of its
Common Stock or securities convertible into or exchangeable for Common Stock
under the Securities Act (a “Registration”) on a form that is suitable for an
offering of shares of Common Stock by the Company or by third parties and that
is not a registration solely to implement an employee benefit plan on Commission
Form S-8, a registration statement on Commission Form S-4 (or successor form) or
a transaction to which Rule 145 or any other similar rule of the Commission is
applicable (such form, a “Registration Statement”), the Company shall give
written notice to the Holders of its intention to effect such a Registration.
The Company shall include all of the Conversion Shares in such Registration.

Section 1.07 Interest Payments. The interest payable under this Debenture will
be paid at the time of maturity or conversion to the person in whose name this
Debenture is registered. At the time such interest is payable, the Holder, in
its sole discretion, may elect to receive the interest in cash (via wire
transfer or certified funds) or in the form of Common Stock. In the Event of
Default, as described in Section 3.01 hereunder, the Holder may elect that the
interest be paid in cash (via wire transfer or certified funds) or in the form
of Common Stock. A number of shares of Common Stock with a value equal to the
amount of interest due shall be issued. No fractional shares will be issued;
therefore, in the event that the value of the Common Stock per share does not
equal the total interest due, the Company will pay the balance in cash.

Section 1.08 Paying Agent and Registrar. Initially, the Company will act as
paying agent and registrar. The Company may change any paying agent, registrar,
or Company-registrar by giving the Holder not less than ten (10) business days’
written notice of its election to do so, specifying the name, address, telephone
number and facsimile number of the paying agent or registrar. The Company may
act in any such capacity.

ARTICLE II.

Section 2.01 Waiver. Any waiver by the Holder of a breach of any provision of
this Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

 
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Section 2.02 Security and Priority. This Debenture is secured by the Assignment
Agreement of dated May 13, 2005 given by Airlee Opportunity Master Fund, Ltd. to
the Holder and acknowledged by the Company, the Amended and Restated Security
Agreement and the Amended and Restated Collateral Assignment Agreement
(collectively, the “Security Documents”). The parties intend for this Debenture
to relate back to all prior filings made by the Holder or Airlee Opportunity
Master Fund, Ltd. No indebtedness of the Company is contractually senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise. Without the Holder’s consent, the
Company will not and will not permit any of their subsidiaries to, directly or
indirectly, enter into, create, incur, assume or suffer to exist any
indebtedness of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits
there from that is contractually senior in any respect to the obligations of the
Company under this Debenture.

Section 2.03 Transaction Documents. “Transaction Documents”, wherever used
herein, means any one of the following items: Securities Purchase Agreement
dated May 13, 2005 between the Company and the Holder, this Debenture, the
Initial Security, the Investor Registration Rights Agreement dated May 13, 2005
between the Company and the Holder, the Escrow Agreement dated May 13, 2005
between the Company and the Holder, the Warrant dated May 13, 2005 given by the
Company to the Holder, the Security Documents (as defined in Section 2.02), the
Guaranty Agreement dated May 13, 2005 herewith and all other instruments,
documents, contracts, agreements, promissory notes and evidences of indebtedness
now or hereafter existing between the Company and/or its subsidiaries and the
Holder, whether or not related to the indebtedness evidenced by this Debenture.

ARTICLE III.

Section 3.01 Events of Default and Remedies.

(a) An “Event of Default”, wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):
 
(i) Any default in the payment of the principal of, interest on or other charges
in respect of this Debenture, free of any claim of subordination, as and when
the same shall become due and payable (whether on Interest Payment Date,
Principal Payment Date, a Conversion Date or the Maturity Date or by
acceleration or otherwise (collectively, the “Payment Date”)) which is not cured
within 15 days of the applicable Payment Date;
 
 
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(ii) The Company shall fail to observe or perform any other covenant, agreement
or warranty contained in, or otherwise commit any breach or default of any
provision of this Debenture (except as may be covered by Section 3.01(i) hereof)
which is not cured by the Holder within 15 days of the Holder delivering written
notice to the Company specifying the failure, breach or default or any
Transaction Document (as defined in Section 2.03) which is not cured within the
time prescribed therein, if any;
 
(iii) The Company or any subsidiary of the Company shall commence, or there
shall be commenced against the Company or any subsidiary of the Company under
any applicable bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or the Company or any subsidiary of the Company commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or any
subsidiary of the Company or there is commenced against the Company or any
subsidiary of the Company any such bankruptcy, insolvency or other proceeding
which remains undismissed for a period of 61 days; or the Company or any
subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Company or any subsidiary of the Company suffers any appointment of any
custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of sixty one (61) days; or the Company or any subsidiary of the Company
makes a general assignment for the benefit of creditors; or the Company or any
subsidiary of the Company shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or the
Company or any subsidiary of the Company shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Company or any subsidiary of the Company shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
or any subsidiary of the Company for the purpose of effecting any of the
foregoing;
 
(iv) The Company or any subsidiary of the Company shall default in any of its
obligations under any other debenture or any mortgage, credit agreement or other
facility, indenture agreement, factoring agreement or other instrument under
which there may be issued, or by which there may be secured or evidenced any
indebtedness for borrowed money or money due under any long term leasing or
factoring arrangement of the Company or any subsidiary of the Company in an
amount exceeding $250,000, whether such indebtedness now exists or shall
hereafter be created and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
become due and payable;
 
(v) The Common Stock shall cease to be quoted for trading or listed for trading
on the Nasdaq OTC Bulletin Board (“OTC”), Nasdaq SmallCap Market, New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market (each, a
“Subsequent Market”) and shall not again be quoted or listed for trading thereon
within five (5) Trading Days of such delisting; or
 
 
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(vi) The Company shall fail for any reason to deliver Common Stock certificates
to a Holder prior to the fifth (5th) Trading Day after a Conversion Date or the
Company shall provide notice to the Holder, including by way of public
announcement, at any time, of its intention not to comply with requests for
conversions of this Debenture in accordance with the terms hereof.

(b) Remedies. During the time that any portion of this Debenture is outstanding,
if any Event of Default has occurred, the full principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become at the Holder's election, immediately due
and payable in cash, provided however, the Holder may request (but shall have no
obligation to request) payment of such amounts in Common Stock of the Company.
Upon an Event of Default the Holder may elect to convert this Debenture at the
Payment Conversion Price set forth in Section 1.02 hereof. Further, upon an
Event of Default, interest on the outstanding principal balance shall accrue
interest thereafter until paid at an annual rate (the “Default Rate”) equal to
twenty four (24%), regardless of whether there has been an acceleration of the
payment of principal and interest as set forth herein. The Default Rate shall
continue until all amounts are collected, whether in settlement, collecting upon
a judgment or otherwise. In addition to any other remedies, the Holder shall
have the right (but not the obligation) to convert this Debenture at any time
after (x) an Event of Default or (y) the Maturity Date at the Conversion Price
then in-effect. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon. Upon an
Event of Default, notwithstanding any other provision of this Debenture or any
Transaction Document, the Holder shall have no obligation to comply with or
adhere to any limitations, if any, on the conversion of this Debenture or the
sale of the Underlying Shares.

Section 3.02 Failure to Issue Unrestricted Common Stock. As indicated in
Article III Section 3.01, a breach by the Company of its obligations under the
Investor Registration Rights Agreement shall be deemed an Event of Default,
which if not cured within ten (10) days, shall entitle the Holder to accelerate
full repayment of all debentures outstanding and accrued interest thereon or,
notwithstanding any limitations contained in this Debenture, to convert all
debentures outstanding and accrued interest thereon into shares of Common Stock
pursuant to Section 1.02 herein. The Company acknowledges that failure to honor
a Notice of Conversion shall cause irreparable harm to the Holder.

ARTICLE IV.

Section 4.01 Rights and Terms of Conversion. This Debenture, in whole or in
part, may be converted at any time following the Closing Date, into shares of
Common Stock at a price equal to the Conversion Price as described in
Section 1.04 above.

 
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Section 4.02 Re-issuance of Debenture. When the Holder elects to convert a part
of the Debenture, then the Company shall reissue a new Debenture in the same
form as this Debenture to reflect the new principal amount.

ARTICLE V.

Section 5.01 Anti-dilution. If the Company, at any time while this Debenture is
outstanding, shall (a) pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

Section 5.02 Consent of Holder to Sell Capital Stock or Grant Security
Interests. Except for the issuance of capital stock under any financing
arrangements now or hereafter existing by the Company to the Holder, so long as
any of the principal of or interest on this Debenture remains unpaid and
unconverted, the Company shall not, without the prior consent of the Holder,
issue or sell (i) any Common Stock or Preferred Stock without consideration or
for a consideration per share less than its fair market value determined
immediately prior to its issuance, (ii) issue or sell any Preferred Stock,
warrant, option, right, contract, call, or other security or instrument granting
the holder thereof the right to acquire Common Stock without consideration or
for a consideration per share less than such Common Stock’s fair market value
determined immediately prior to its issuance, (iii) enter into any security
instrument granting the holder a security interest in any of the assets of the
Company other than equipment financing and capital leases in the ordinary course
of business, or (iv) file any registration statement on Form S-8.

ARTICLE VI.

Section 6.01 Notice. Notices regarding this Debenture shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:
 
If to the Company, to:
Mobilepro Corp.
 
6701 Democracy Blvd., Suite 202
 
Bethesda, MD 20817
 
Attention: Jay Wright, President
 
Telephone: (301) 315-9040
 
Facsimile: (301) 315-9027

 
 
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With a copy to:
Seyfarth Shaw LLP
 
815 Connecticut Avenue, NW, Suite 500
 
Washington, DC 20006-4004
 
Attention: Ernest M. Stern, Esquire
 
Telephone: (202) 828-5360
 
Facsimile: (202) 828-5393
   
If to the Holder:
Cornell Capital Partners, LP
 
101 Hudson Street, Suite 3700
 
Jersey City, NJ 07303
 
Attention: Mark Angelo, President
 
Telephone: (201) 985-8300
 
Facsimile: (201) 985-8266
   
With a copy to:
Cornell Capital Partners, LP
 
101 Hudson Street - Suite 3700
 
Jersey City, NJ 07302
 
Attention: Troy J. Rillo, Esq.
 
Telephone: (201) 985-8300
 
Facsimile: (201) 985-8266

Section 6.02 Governing Law. This Debenture shall be deemed to be made under and
shall be construed in accordance with the laws of the State of New Jersey
without giving effect to the principles of conflict of laws thereof. Each of the
parties consents to the jurisdiction of the U.S. District Court sitting in the
District of the State of New Jersey or the state courts of the State of New
Jersey sitting in Hudson County, New Jersey in connection with any dispute
arising under this Debenture and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens to
the bringing of any such proceeding in such jurisdictions.

Section 6.03 Severability. The invalidity of any of the provisions of this
Debenture shall not invalidate or otherwise affect any of the other provisions
of this Debenture, which shall remain in full force and effect.

Section 6.04 Entire Agreement and Amendments. This Debenture represents the
entire agreement between the parties hereto with respect to the subject matter
hereof and there are no representations, warranties or commitments, except as
set forth herein. This Debenture may be amended only by an instrument in writing
executed by the parties hereto.

Section 6.05 Attorneys’ Fees. If the Company fails to strictly comply with the
terms of this Debenture, then the Company shall reimburse the Holder promptly
for all fees, costs and expenses, including, without limitation, attorneys’ fees
and expenses incurred by the Holder in any action in connection with this
Debenture, including, without limitation, those incurred: (i) during any
workout, attempted workout, and/or in connection with the rendering of legal
advice as to the Holder’s rights, remedies and obligations, (ii) collecting any
sums which become due to the Holder, (iii) defending or prosecuting any
proceeding or any counterclaim to any proceeding or appeal; or (iv) the
protection, preservation or enforcement of any rights or remedies of the Holder.

 
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Section 6.06 Savings Clause. If any provision of this Debenture is invalid,
illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances. If it
shall be found that any interest or other amount deemed interest due hereunder
shall violate applicable laws governing usury, the applicable rate of interest
due hereunder shall automatically be lowered to equal the maximum permitted rate
of interest. The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law which would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this indenture, and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impeded the execution of any power herein granted to the
Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.

Section 6.07 WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS
AGREEMENT.

IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as
executed this Debenture as of the date first written above.

       
MOBILEPRO CORP.
 
   
   
    By:   /s/ Jay Wright  

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Name: Jay Wright
 
Title: President

 
 
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EXHIBIT A
 
NOTICE OF CONVERSION
 
(To be executed by the Holder in order to Convert the Debenture)

TO:
 

The undersigned hereby irrevocably elects to convert $__________________ of the
principal amount of the above Debenture into Shares of Common Stock of MobilePro
Corp., according to the conditions stated therein, as of the Conversion Date
written below.
 
Conversion Date:
 
Applicable Conversion Price:
 
Signature:
 
Name:
 
Address:
 
Amount to be converted:
$
Amount of Debenture unconverted:
$
Conversion Price per share:
$
Number of shares of Common Stock to be issued:
 
Please issue the shares of Common Stock in the following name and to the
following address:
 
Issue to:
 
Authorized Signature:
 
Name:
 
Title:
 
Phone Number:
 
Broker DTC Participant Code:
 
Account Number:
 

 

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