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
 
August 28, 2006
 
No. MOBL-3-1
US$2,300,000

This Convertible Debenture (the “Debenture”) is issued on August 28, 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.
 

ARTICLE I.  
 
Section 1.01    Principal and Interest. For value received, the Company hereby
promises to pay to the order of the Holder on January 31, 2008 (“Maturity
Date”), in lawful money of the United States of America and in immediately
available funds the principal sum of $2,300,000, 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, except as otherwise set forth
herein. The Company shall not effect any conversions of this Debenture and the
Holder shall not have the right to convert any portion of this Debenture or
receive shares of Common Stock as payment of interest hereunder to the extent
that after giving effect to such conversion or receipt of such interest payment,
the Holder, together with any affiliate thereof, would beneficially own in
excess of 4.99% of the outstanding shares of the Common Stock after giving
effect to such conversion (unless the Holder provides to the Company sixty-five
(65) days prior written notice that this provision shall not apply).
 
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Section 1.02    Payments.
 
(a)    The Company shall make weekly scheduled payments (“Scheduled Payments”)
consisting of at least $125,000 of principal, commencing with the first
Scheduled Payment which shall be due and payable on January 2, 2007. 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 the Conversion Price then in effect or a price equal to a
seven percent (7%) discount to the average of the two lowest daily volume
weighted average prices of the 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 such shares are either (i) freely
tradeable under Rule 144 of the Securities and Exchange Commission (the
“Commission”), (ii) registered for sale under the Securities Act of 1933, or
(iii) 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.
 
(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, 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 seven (7) days
after such Notice. 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.
 
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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).
 
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 in the form of the warrants issued in connection with the
Securities Purchase Agreement and shall survive for a period of the shorter of
five (5) years from the Closing Date or the years from the date issued. 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.
 
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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 $0.174 (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 future scheduled payments
of principal and interest under Section 1.02 hereof.
 
Reservation of Common Stock. The Company shall reserve for issuance to the
Holder 140,000,000 shares for issuance upon conversions or redemptions of the
Debenture (the “Share Reserve”). The Company represents that it has sufficient
authorized and unissued shares of Common Stock available to create the Share
Reserve after considering all other commitments that may require the issuance of
Common Stock. The Company shall take all action reasonably necessary to at all
times have authorized, and reserved for the purpose of issuance, such number of
shares of Common Stock as shall be necessary to effect the full conversion or
redemption of the Debenture. If at any time the Share Reserve is insufficient to
effect the full conversion or redemption of the Convertible or the full exercise
of the Warrants, the Company shall increase the Share Reserve accordingly. If
the Company does not have sufficient authorized and unissued shares of Common
Stock available to increase the Share Reserve, the Company shall call and hold a
special meeting of the shareholders within thirty (30) days of such occurrence,
for the sole purpose of increasing the number of shares authorized. The
Company’s management shall recommend to the shareholders to vote in favor of
increasing the number of shares of Common Stock authorized. Management shall
also vote all of its shares in favor of increasing the number of authorized
shares of Common Stock.
 
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Section 1.05    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 and all shares issuable
pursuant to payments in Common Stock by the Company in such Registration.
 
Section 1.06    Interest Payments. The interest payable under this Debenture
will be paid at the time of maturity, conversion, or as otherwise set forth
herein to the person in whose name this Debenture is registered. Interest shall
be paid in cash when due, or at the time such interest is payable, the Company,
in its sole discretion, may elect to pay the interest in shares of Common Stock,
provided such shares are freely tradeable by the Holder. If interest is paid in
shares of Common Stock, such shares shall be issued at the rate as the Payment
Conversion Price at the time paid. 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 1.07    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.
 
Section 2.02    Security and Priority. The obligations to the Holder under this
Debenture shall be secured by the security interests created by the Assignment
Agreement dated as of 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 security
interests created by the Security Documents 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 August ___, 2006 between the Company and the Holder, this Debenture, the
Initial Security, the Investor Registration Rights Agreement dated August ___,
2006 between the Company and the Holder, the Warrants issued in connection with
the Securities Purchase Agreement, 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.

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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, upon redemption, 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;
 
(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 specifically covered by
Section 3.01(a) 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;
 
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(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
 
(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 prior to the seventh (7th) Trading Day after a Scheduled Payment due
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. The
Company acknowledges that failure to honor a Conversion shall cause irreparable
harm to the Holder.
 
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(vii)    The Company shall fail to file the Registration Statement with the
Commission, or the Registration Statement shall not have been declared effective
by the Commission, in each case within thirty (30) days of the periods set forth
in the Investor Registration Rights Agreement (“Registration Rights Agreement”)
dated August ___, 2006 between the Company and the Holder, or, while the
Registration Statement is required to be maintained effective pursuant to the
terms of the Investor Registration Rights Agreement, the effectiveness of the
Underlying Shares Registration Statement lapses for any reason (including,
without limitation, the issuance of a stop order) or is unavailable to the
Holder for sale of all of the Holder’s Registrable Securities (as defined in the
Investor Registration Rights Agreement) in accordance with the terms of the
Investor Registration Rights Agreement, and such lapse or unavailability
continues for a period of more than ten (10) consecutive Trading Days or for
more than an aggregate of twenty (20) days in any 365-day period (which need not
be consecutive);
 
(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.

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    Section 5.01Anti-dilution. Adjustment of Conversion Price. The
Conversion Price shall be adjusted from time to time as follows:
 
(a)    Adjustment of Conversion Price upon Issuance of Common Stock. If and
whenever on or after the Closing Date of this Debenture, the Company issues or
sells, or is deemed to have issued or sold, any shares of Common Stock (other
than Excluded Securities as defined herein) for a consideration per share less
than a price (the “Applicable Price”) equal to the Conversion Price in effect
immediately prior to such issuance or sale, then immediately after such issue or
sale the Conversion Price then in effect shall be reduced to an amount equal to
such consideration per share, provided that in no event shall the Conversion
Price be reduced below $0.001.
 
(b)    Effect on Conversion Price of Certain Events. For purposes of determining
the adjusted Conversion Price under Section 5.01(a) above, the following shall
be applicable:
 
(i)    Issuance of Options. If after the date hereof, the Company in any manner
grants any rights, warrants or options to subscribe for or purchase Common Stock
or convertible securities (“Options”) and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such Option or
upon conversion or exchange of any convertible securities issuable upon exercise
of any such Option is less than the Conversion Price then in effect, then such
share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting or sale of such Option for
such price per share. For purposes of this Section 5.01(b)(i), the lowest price
per share for which one share of Common Stock is issuable upon exercise of such
Options or upon conversion or exchange of such convertible securities shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option or upon conversion
or exchange of any other convertible security other than this Debenture issuable
upon exercise of such Option. No further adjustment of the Conversion Price
shall be made upon the actual issuance of such Common Stock or of such
convertible securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such convertible
securities.
 
(ii)    Issuance of Convertible Securities. If the Company in any manner issues
or sells any convertible securities after the Closing Date and the lowest price
per share for which one share of Common Stock is issuable upon the conversion or
exchange thereof is less than the Conversion Price then in effect, then such
share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the issuance or sale of such convertible
securities for such price per share. For the purposes of this
Section 5.01(b)(ii), the lowest price per share for which one share of Common
Stock is issuable upon such conversion or exchange shall be equal to the sum of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance or sale of
the convertible security and upon conversion or exchange of such convertible
security. No further adjustment of the Conversion Price shall be made upon the
actual issuance of such Common Stock upon conversion or exchange of such
convertible securities, and if any such issue or sale of such convertible
securities is made upon exercise of any Options for which adjustment of the
Conversion Price had been or are to be made pursuant to other provisions of this
Section 5.01(b), no further adjustment of the Conversion Price shall be made by
reason of such issue or sale.
 
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(iii)    Change in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for Common
Stock changes at any time, the Conversion Price in effect at the time of such
change shall be adjusted to the Conversion Price which would have been in effect
at such time had such Options or convertible securities provided for such
changed purchase price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
shares of Common Stock issuable upon conversion of this Debenture shall be
correspondingly readjusted. For purposes of this Section 5.01(b)(iii), if the
terms of any Option or convertible security that was outstanding as of the
Closing Date of this Debenture are changed in the manner described in the
immediately preceding sentence, then such Option or convertible security and the
Common Stock deemed issuable upon exercise, conversion or exchange thereof shall
be deemed to have been issued as of the date of such change. No adjustment
pursuant to this Section 5.01(b) shall be made if such adjustment would result
in an increase of the Conversion Price then in effect.
 
(c)    Effect on Conversion Price of Certain Events. For purposes of determining
the adjusted Conversion Price under Sections 5.01(a) and 5.01(b), the following
shall be applicable:
 
(i)    Calculation of Consideration Received. If any Common Stock, Options or
convertible securities are issued or sold or deemed to have been issued or sold
for cash, the consideration received therefore will be deemed to be the net
amount received by the Company therefore. If any Common Stock, Options or
convertible securities are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value
of such consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities. If any Common Stock, Options or convertible securities are issued to
the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefore will
be deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
convertible securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the
holders of the Debenture representing at least two-thirds of the shares of
Common Stock issuable upon conversion of the Debenture then outstanding. If such
parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such
consideration will be determined within five (5) Business Days after the
tenth (10th) day following the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the holders of the Debenture
representing at least two-thirds of the shares of Common Stock issuable upon
conversion of the Debenture then outstanding. The determination of such
appraiser shall be final and binding upon all parties and the fees and expenses
of such appraiser shall be borne by the Company.
 
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(ii)    Integrated Transactions. In case any Option is issued in connection with
the issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
Options by the parties thereto, the Options will be deemed to have been issued
for a consideration of $0.01.
 
(iii)    Treasury Shares. The number of shares of Common Stock outstanding at
any given time does not include shares owned or held by or for the account of
the Company, and the disposition of any shares so owned or held will be
considered an issue or sale of Common Stock.
 
(iv)    Record Date. If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (1) to receive a dividend or other
distribution payable in Common Stock, Options or in convertible securities or
(2) to subscribe for or purchase Common Stock, Options or convertible
securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
 
(d)    Adjustment of Conversion Price upon Subdivision or Combination of Common
Stock. If the Company at any time after the date of issuance of this Debenture
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, any Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. If the Company at any time after
the date of issuance of this Debenture combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, any Conversion Price in effect
immediately prior to such combination will be proportionately increased. Any
adjustment under this Section 5.01(d) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
 
(e)    Distribution of Assets. If the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders
of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Debenture, then, in each such case any Conversion
Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Conversion Price by a
fraction of which (A) the numerator shall be the closing bid price of the Common
Stock on the trading day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company’s Board of
Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the closing bid price of the Common Stock on the trading day
immediately preceding such record date; and
 
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(f)    Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 5.01 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of the Debenture;
provided, except as set forth in Section 5.01(d), that no such adjustment
pursuant to this Section 5.01(f) will increase the Conversion Price as otherwise
determined pursuant to this Section 5.01.
 
(g)    Notices.
 
(i)    Immediately upon any adjustment of the Conversion Price, the Company will
give written notice thereof to the holder of this Debenture, setting forth in
reasonable detail, and certifying, the calculation of such adjustment.
 
(ii)    The Company will give written notice to the holder of this Debenture at
least ten (10) days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any dissolution or
liquidation, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to such holder.
 
(h)    Definitions.
 
(i)    “Approved Stock Plan” means any employee benefit plan which has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any employee, officer or director for
services provided to the Company.
 
(ii)    “Excluded Securities” means, (a) shares issued or deemed to have been
issued by the Company pursuant to an Approved Stock Plan (b) shares of Common
Stock issued or deemed to be issued by the Company upon the conversion, exchange
or exercise of any right, option, obligation or security outstanding on the date
prior to date of the Securities Purchase Agreement, provided that the terms of
such right, option, obligation or security are not amended or otherwise modified
on or after the date of the Securities Purchase Agreement, and provided that the
conversion price, exchange price, exercise price or other purchase price is not
reduced, adjusted or otherwise modified and the number of shares of Common Stock
issued or issuable is not increased (whether by operation of, or in accordance
with, the relevant governing documents or otherwise) on or after the date of the
Securities Purchase Agreement, and (c) the shares of Common Stock issued or
deemed to be issued by the Company upon conversion of this Debenture.
 
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Nothing in this Section 5.01 shall be deemed to authorize the issuance of any
securities by the Company in violation of Section 5.02.
 
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, Chairman and Chief Executive Officer
 
Telephone: (301) 315-9040
 
Facsimile: (301) 315-9027
       
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

 
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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.
 
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.
 
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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: Chairman and CEO

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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 Debenture No. MOBL-3-1 into Shares of Common Stock of
MOBILEPRO CORP., according to the conditions stated therein, as of the
Conversion Date written below.
 
Conversion Date:
   
Amount to be converted:
$ 
        
Conversion Price:
$ 
        
Number of shares of Common
Stock to be issued:
   
Amount of Debenture
Unconverted:
$ 
          

 
 
Please issue the shares of Common Stock in the following name and to the
following address:
Issue to:
 
Authorized Signature:
   
Name:
   
Title:
   
Broker DTC Participant Code:
   
Account Number:
   

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