Document:

Unassociated Document

    

      AMENDMENT
        NO 1. TO EMPLOYMENT AGREEMENT

      

      THIS
        AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT ("Amendment")
        is made and entered into as of this 16th
        of June,
        2005 by and between Mobilepro Corp. a Delaware corporation (“Mobilepro”) and Tom
        Mazerski (“Mazerski”). 

      

      WHEREAS,
        Mobilepro and Mazerski entered into that certain Employment Agreement on
        October
        16, 2004 (“Agreement”); 

      

      WHEREAS,
        Mobilepro
        and Mazerski mutually desire to amend certain provisions of the
        Agreement.

      

      NOW,
        THEREFORE, in
        consideration of the premises and mutual covenants and agreements contained
        herein, and other good and valuable consideration, the receipt and sufficiency
        of which are hereby acknowledged, the parties agree as follows:

      

      1. Amendment
        No. 1.
        The
        following language shall replace Section 3(e):

      

      Equity.
        As
        partial consideration for entering into this Agreement, Mobilepro hereby
        grants
        Mr. Mazerski the option, in the form of warrants, to acquire five hundred
        thousand (500,000) shares of Mobilepro’s common stock at an exercise price of
        $0.225 per share (the “Option”). The right to purchase 250,000 shares shall vest
        upon Mobilepro’s Telco Operations reaching $5,000,000 in Adjusted EBIDTA and the
        other 250,000 shares shall vest ratably over the twenty-four (24) month term
        of
        this Agreement, or immediately (i) if Mr. Mazerski’s employment is terminated
        without cause or for good reason (as described in Section 4 hereof) or (ii)
        due
        to a Change of Control (as described in Section 5(a) hereof). In addition
        to the
        foregoing, as partial consideration for entering into this Agreement, the
        Company hereby grants Mr. Mazerski additional warrants to acquire one million
        five hundred thousand (1,500,000) shares of the Company’s common stock at an
        exercise price or $0.15 per share (the “Warrants”). The Warrants shall vest
        ratably over the remaining term of the Employment Period, or immediately
        (i) if
        Mr. Mazerski’s employment is terminated without cause or for good reason (as
        described in Section 4 hereof) or (ii) due to a Change of Control (as described
        in Section 5(a) hereof). 

       

      2. Other
        Changes.
        It is
        understood and agreed by the parties hereto that all other provisions of
        the
        Agreement shall remain unchanged and in full force and effect.

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed this Agreement to be effective as of the date
        first
        above written.

      

      MOBILEPRO
        CORP.

      

      By______________________________________
        

      Jay
        O.
        Wright, Chief Executive Officer

      

      “Mobilepro”

      

      TOM
        MAZERSKI

      

      _________________________________

       

      

      “Mazerski”Unassociated Document

    AMENDMENT
      NO 1. TO EMPLOYMENT AGREEMENT

    

    THIS
      AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT ("Amendment")
      is made and entered into as of this 16th
      of June,
      2005 by and between Mobilepro Corp. a Delaware corporation (“Mobilepro”) and
      Geoffrey B. Amend (“Amend”). 

    

    WHEREAS,
      Mobilepro and Amend entered into that certain Employment Agreement on November
      1, 2004 (“Agreement”); and

    

    WHEREAS,
      Mobilepro
      and Amend mutually desire to amend certain provisions of the
      Agreement.

    

    NOW,
      THEREFORE, in
      consideration of the premises and mutual covenants and agreements contained
      herein, and other good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the parties agree as follows:

    

    1. Amendment
      No. 1.
      Section
      1 of the Agreement shall be deleted in its entirety and replaced with the
      following language:

    

    The
      Company will employ Mr. Amend, and Mr. Amend will serve the Company, under
      the
      terms of this Agreement commencing November 1, 2004 (the “Commencement Date”)
      for a term of twenty-nine (29) months unless earlier terminated under Section
      4
      hereof. The period of time between the commencement and the termination of
      Mr.
      Amend’s employment hereunder shall be referred to herein as the “Employment
      Period.”

    

     

    2. Amendment
      No. 2.
      Amend
      hereby acknowledges and agrees that no bonus it due to Amend for the period
      from
      November 1, 2004 through March 31, 2005. Mobilepro and Amend hereby agree that
      the bonus calculation under Paragraph 3(d)(i) shall reset as of April 1, 2005
      and run, for the first year, through March 31, 2006.

    

    3. Amendment
      No. 3.
      Section
      3(a) of the Agreement shall be deleted in its entirety and replaced with the
      following language:

    

    (a) Salary.
      During
      the Employment Period the Company shall pay to Mr. Amend, as compensation for
      the performance of his duties and obligations under this Agreement, a base
      salary of Fifteen Thousand Dollars ($15,000) per month, payable semi-monthly,
      beginning May 15, 2004.

    

    4. Amendment
      No 4.
      The
      following new language shall be inserted at the end of Section
      3(e):

    

    In
      addition to the foregoing, as partial consideration for entering into this
      Agreement, the Company hereby grants Mr. Amend additional warrants to acquire
      one million five hundred thousand (1,500,000) shares of the Company’s common
      stock at an exercise price or $0.15 per share (the “Warrants”). The Warrants
      shall vest ratably over the remaining term of the Employment Period, or
      immediately if Mr. Amend’s employment is terminated without cause or for good
      reason (as described in Section 4 hereof) or, due to a change in control, sale
      of a majority of the common stock or substantially all of the assets of the
      Company or merger of the Company into or with another company (unless such
      company is less than ninety percent (90%) of the size (measured by market value)
      of the Company) or reverse merger with another company.

    

    5. Other
      Changes.
      It is
      understood and agreed by the parties hereto that all other provisions of the
      Agreement shall remain unchanged and in full force and effect.

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Agreement to be effective as of the date
      first
      above written.

    

    MOBILEPRO
      CORP.

    

    By______________________________________
      

    Jay
      O.
      Wright, Chief Executive Officer

    

    “Mobilepro”

    

    GEOFFEY
      B. AMEND

    

    _________________________________

     

    

    “Amend”EXHIBIT
        10.35

      

      SECURITIES
        PURCHASE AGREEMENT

      

      THIS SECURITIES
        PURCHASE AGREEMENT
        (this
“Agreement”),
        dated
        as of May 13, 2005, by and among MOBILEPRO
        CORP.,
        a
        Delaware corporation (the “Company”),
        and
CORNELL
        CAPITAL PARTNERS, LP (the
        “Buyer”).

       

      WITNESSETH

      

      WHEREAS,
        the
        Company and the Buyer are executing and delivering this Agreement in reliance
        upon an exemption from securities registration pursuant to Section 4(2) and/or
        Rule 506 of Regulation D (“Regulation
        D”)
        as
        promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
        under
        the Securities Act of 1933, as amended (the “Securities
        Act”);

       

      WHEREAS,
        the
        parties desire that, upon the terms and subject to the conditions contained
        herein, the Company shall issue and sell to the Buyer, as provided herein,
        and
        the Buyer shall purchase for Fifteen Million Five Hundred Thousand Dollars
        ($15,500,000) (the “Purchase
        Price”)
        a
        7.75% Secured Convertible Debenture (the “Convertible
        Debenture”),
        which
        shall be convertible into shares of the Company’s common stock, par value $0.001
        (the “Common
        Stock”)
        (as
        converted, the “Conversion
        Shares”)
        which
        shall be funded on the date hereof (the “Closing”);
        and

       

      WHEREAS,
        contemporaneously with the execution and delivery of this Agreement, the
        parties
        hereto are executing and delivering certain other Transaction Documents (as
        defined in the Secured Convertible Debenture of even date herewith in the
        original principal amount of $15,500,000); and

       

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants and other agreements contained in this
        Agreement the Company and the Buyer hereby agree as follows:

       

      1.  PURCHASE
        AND SALE OF CONVERTIBLE DEBENTURE.

       

      (a)  Purchase
        of Convertible Debenture.
        Subject
        to the satisfaction (or waiver) of the terms and conditions of this Agreement,
        the Buyer agrees to purchase at Closing (as defined herein below) and the
        Company agrees to sell and issue to the Buyer at Closing, a Convertible
        Debenture in the amount of the Purchase Price. Upon execution hereof by the
        Buyer, the Buyer shall wire transfer the Purchase Price same-day funds or
        a
        check payable to “David Gonzalez, Esq., as Escrow Agent for MobilePro
        Corp./Cornell Capital Partners, LP”, which Purchase Price shall be held in
        escrow pursuant to the terms of the Escrow Agreement (as hereinafter defined)
        and disbursed in accordance therewith. Notwithstanding the foregoing, a Buyer
        may withdraw his Purchase Price and terminate this Agreement as to such Buyer
        at
        any time after the execution hereof and prior to Closing (as hereinafter
        defined).

       

      (b)  Closing
        Date.
        The
        Closing of the purchase and sale of the Convertible Debenture shall take
        place
        on the date hereof, subject to notification of satisfaction of the conditions
        to
        the Closing set forth herein and in Sections 6 and 7 below (or such later
        date
        as is mutually agreed to by the Company and the Buyer) (the “Closing
        Date”).
        The
        Closing shall occur on the respective Closing Date at the offices of Yorkville
        Advisors, LLC, 101 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
        (or
        such other place as is mutually agreed to by the Company and the Buyer).
        

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)  Escrow
        Arrangements; Form of Payment.
        Upon
        execution hereof by Buyer and pending the Closing, the aggregate proceeds
        of the
        sale of the Convertible Debenture to Buyer pursuant hereto shall be deposited
        in
        a non-interest bearing escrow account with David Gonzalez, Esq., as escrow
        agent
        (the “Escrow
        Agent”),
        pursuant to the terms of an Escrow Agreement (the “Escrow
        Agreement”)
        between the Company, the Buyer and the Escrow Agent. Subject to the satisfaction
        of the terms and conditions of this Agreement, on the Closing Date, (i) the
        Escrow Agent shall deliver to the Company in accordance with the terms of
        the
        Escrow Agreement such aggregate proceeds for the Convertible Debenture to
        be
        issued and sold to such Buyer, minus a commitment fee payable to the Buyer
        of
        $775,000 and a structuring fee payable to Yorkville Advisors Management,
        LLC
        (“YAM”)
        of
        $35,000, each of which shall be deducted from the gross proceeds held in
        escrow
        and paid to the Buyer and YAM, as applicable, on the Closing Date and
        (ii) the Company shall deliver to the Buyer, an original Convertible
        Debenture, duly executed on behalf of the Company.

       

      2.  BUYER’S
        REPRESENTATIONS AND WARRANTIES.

       

      The
        Buyer
        represents and warrants that:

       

      (a)  Investment
        Purpose.
        The
        Buyer is acquiring the Convertible Debenture and, upon conversion of Convertible
        Debenture, the Buyer will acquire the Conversion Shares then issuable, for
        its
        own account for investment only and not with a view towards, or for resale
        in
        connection with, the public sale or distribution thereof, except pursuant
        to
        sales registered or exempted under the Securities Act; provided, however,
        that
        by making the representations herein, such Buyer reserves the right to dispose
        of the Conversion Shares at any time in accordance with or pursuant to an
        effective registration statement covering such Conversion Shares or an available
        exemption under the Securities Act.

       

      (b)  Accredited
        Investor Status.
        The
        Buyer is an “Accredited
        Investor”
        as that
        term is defined in Rule 501(a)(3) of Regulation D.

       

      (c)  Reliance
        on Exemptions.
        The
        Buyer understands that the Convertible Debenture are being offered and sold
        to
        it in reliance on specific exemptions from the registration requirements
        of
        United States federal and state securities laws and that the Company is relying
        in part upon the truth and accuracy of, and such Buyer’s compliance with, the
        representations, warranties, agreements, acknowledgments and understandings
        of
        such Buyer set forth herein in order to determine the availability of such
        exemptions and the eligibility of such Buyer to acquire such
        securities.

       

      (d)  Information.
        The
        Buyer and its advisors (and its counsel), if any, have been furnished with
        all
        materials relating to the business, finances and operations of the Company
        and
        information they deemed material to making an informed investment decision
        regarding Buyer’s purchase of the Convertible Debenture and the Conversion
        Shares, which have been requested by the Buyer. The Buyer and its advisors,
        if
        any, have been afforded the opportunity to ask questions of the Company and
        its
        management. Neither such inquiries nor any other due diligence investigations
        conducted by the Buyer or its advisors, if any, or its representatives shall
        modify, amend 

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      or
        affect
        the Buyer’s right to rely on the Company’s representations and warranties
        contained in Section 3 below. The Buyer understands that its investment in
        the
        Convertible Debenture and the Conversion Shares involves a high degree of
        risk.
        The Buyer is in a position regarding the Company, which, based upon employment,
        family relationship or economic bargaining power, enabled and enables such
        Buyer
        to obtain information from the Company in order to evaluate the merits and
        risks
        of this investment. The Buyer has sought such accounting, legal and tax advice,
        as it has considered necessary to make an informed investment decision with
        respect to its acquisition of the Convertible Debenture and the Conversion
        Shares.

       

      (e)  No
        Governmental Review.
        The
        Buyer understands that no United States federal or state agency or any other
        government or governmental agency has passed on or made any recommendation
        or
        endorsement of the Convertible Debenture or the Conversion Shares, or the
        fairness or suitability of the investment in the Convertible Debenture or
        the
        Conversion Shares, nor have such authorities passed upon or endorsed the
        merits
        of the offering of the Convertible Debenture or the Conversion
        Shares.

       

      (f)  Transfer
        or Resale.
        The
        Buyer understands that except as provided in the Investor Registration Rights
        Agreement: (i) the Convertible Debenture have not been and are not being
        registered under the Securities Act or any state securities laws, and may
        not be
        offered for sale, sold, assigned or transferred unless (A) subsequently
        registered thereunder, or (B) such Buyer shall have delivered to the Company
        an
        opinion of counsel, in a generally acceptable form, to the effect that such
        securities to be sold, assigned or transferred may be sold, assigned or
        transferred pursuant to an exemption from such registration requirements;
        (ii)
        any sale of such securities made in reliance on Rule 144 under the Securities
        Act (or a successor rule thereto) (“Rule 144”)
        may be
        made only in accordance with the terms of Rule 144 and further, if Rule 144
        is
        not applicable, any resale of such securities under circumstances in which
        the
        seller (or the person through whom the sale is made) may be deemed
        to be an
        underwriter (as that term is defined in the Securities Act) may require
        compliance with some other exemption under the Securities Act or the rules
        and
        regulations of the SEC thereunder; and (iii) neither the Company nor any
        other
        person is under any obligation to register such securities under the Securities
        Act or any state securities laws or to comply with the terms and conditions
        of
        any exemption thereunder. The Company reserves the right to place stop transfer
        instructions against the shares and certificates for the Conversion
        Shares.

       

      (g)  Legends.
        The
        Buyer understands that the certificates or other instruments representing
        the
        Convertible Debenture and or the Conversion Shares shall bear a restrictive
        legend in substantially the following form (and a stop -transfer order may
        be
        placed against transfer of such stock certificates):

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
        THE
        SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH
        A VIEW
        TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
        IN
        THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
        OR AN
        OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
        NOT
        REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      The
        legend set forth above shall be removed and the Company within two (2) business
        days shall issue a certificate without such legend to the holder of the
        Conversion Shares upon which it is stamped, if, unless otherwise required
        by
        state securities laws, (i) in connection with a sale transaction, provided
        the
        Conversion Shares are registered under the Securities Act or (ii) in connection
        with a sale transaction, after such holder provides the Company with an opinion
        of counsel, which opinion shall be in form, substance and scope customary
        for
        opinions of counsel in comparable transactions, to the effect that a public
        sale, assignment or transfer of the Conversion Shares may be made without
        registration under the Securities Act. 

       

      (h)  Authorization,
        Enforcement.
        This
        Agreement has been duly and validly authorized, executed and delivered on
        behalf
        of such Buyer and is a valid and binding agreement of such Buyer enforceable
        in
        accordance with its terms, except as such enforceability may be limited by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation and other similar laws relating to,
        or
        affecting generally, the enforcement of applicable creditors’ rights and
        remedies.

       

      (i)  Receipt
        of Documents.
        The
        Buyer and his or its counsel has received and read in their entirety: (i)
        this
        Agreement and each representation, warranty and covenant set forth herein,
        the
        Security Agreement, the Investor Registration Rights Agreement, the Escrow
        Agreement, the Irrevocable Transfer Agent Agreement, and the Pledge and Escrow
        Agreement; (ii) all due diligence and other information necessary to verify
        the
        accuracy and completeness of such representations, warranties and covenants;
        (iii) the Company’s Form 10-KSB for the fiscal year ended March 31, 2004; (iv)
        the Company’s Form 10-QSB for the fiscal quarter ended December 30, 2004 and (v)
        answers to all questions the Buyer submitted to the Company regarding an
        investment in the Company; and the Buyer has relied on the information contained
        therein and has not been furnished any other documents, literature, memorandum
        or prospectus.

       

      (j)  Due
        Formation of Corporate and Other Buyers.
        If the
        Buyer is a corporation, trust, partnership or other entity that is not an
        individual person, it has been formed and validly exists and has not been
        organized for the specific purpose of purchasing the Convertible Debenture
        and
        is not prohibited from doing so.

       

      (k)  No
        Legal Advice From the Company.
        The
        Buyer acknowledges, that it had the opportunity to review this Agreement
        and the
        transactions contemplated by this Agreement with his or its own legal counsel
        and investment and tax advisors. The Buyer is relying solely on such counsel
        and
        advisors and not on any statements or representations of the Company or any
        of
        its representatives or agents for legal, tax or investment advice with respect
        to this investment, the transactions contemplated by this Agreement or the
        securities laws of any jurisdiction. 

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      3.  REPRESENTATIONS
        AND WARRANTIES OF THE COMPANY.

       

      The
        Company represents and warrants to the Buyer that, except as set forth in
        the
        SEC Documents (as defined herein):

       

      (a)  Organization
        and Qualification.
        The
        Company and its subsidiaries are corporations duly organized and validly
        existing in good standing under the laws of the jurisdiction in which they
        are
        incorporated or organized, and have the requisite corporate or limited liability
        company power to own their properties and to carry on their business as now
        being conducted. Each of the Company and its subsidiaries is duly qualified
        as a
        foreign corporation or limited liability company to do business and is in
        good
        standing in every jurisdiction in which the nature of the business conducted
        by
        it makes such qualification necessary, except to the extent that the failure
        to
        be so qualified or be in good standing would not have a material adverse
        effect
        on the Company and its subsidiaries taken as a whole.

       

      (b)  Authorization,
        Enforcement, Compliance with Other Instruments.
        (i) The Company has the requisite corporate power and authority to
        enter
        into and perform this Agreement, the Security Agreement, the Investor
        Registration Rights Agreement, the Irrevocable Transfer Agent Agreement,
        the
        Escrow Agreement, the Pledge and Escrow Agreement, and any related agreements
        (collectively the “Transaction
        Documents”)
        and to
        issue the Convertible Debenture and the Conversion Shares in accordance with
        the
        terms hereof and thereof, (ii) the execution and delivery of the Transaction
        Documents by the Company and the consummation by it of the transactions
        contemplated hereby and thereby, including, without limitation, the issuance
        of
        the Convertible Debenture, the Conversion Shares and the reservation for
        issuance and the issuance of the Conversion Shares issuable upon conversion
        or
        exercise thereof, have been duly authorized by the Company’s Board of Directors
        and no further consent or authorization is required by the Company, its Board
        of
        Directors or its stockholders, (iii) the Transaction Documents have been
        duly
        executed and delivered by the Company, (iv) the Transaction Documents constitute
        the valid and binding obligations of the Company enforceable against the
        Company
        in accordance with their terms, except as such enforceability may be limited
        by
        general principles of equity or applicable bankruptcy, insolvency,
        reorganization, moratorium, liquidation or similar laws relating to, or
        affecting generally, the enforcement of creditors’ rights and remedies. The
        authorized officer of the Company executing the Transaction Documents knows
        of
        no reason why the Company cannot file the registration statement as required
        under the Investor Registration Rights Agreement or perform any of the Company’s
        other obligations under such documents. 

       

      (c)  Capitalization.
        As of
        the date hereof the authorized capital stock of the Company consists of
        600,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000
        shares of Preferred Stock, of which 360,918,011 shares of Common Stock and
        35,425 shares of Preferred Stock are issued and outstanding. All of such
        outstanding shares have been validly issued and are fully paid and
        nonassessable. Except as disclosed in the SEC Documents (as defined in Section
        3(f)), no shares of Common Stock are subject to preemptive rights or any
        other
        similar rights or any liens or encumbrances suffered or permitted by the
        Company. Except as 

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      disclosed
        in the SEC Documents and the warrant for Kevin Kuykendall for 3,500,000 shares
        of the Company’s common stock with piggyback registration rights, as of the date
        of this Agreement, (i) there are no outstanding options, warrants, scrip,
        rights
        to subscribe to, calls or commitments of any character whatsoever relating
        to,
        or securities or rights convertible into, any shares of capital stock of
        the
        Company or any of its subsidiaries, or contracts, commitments, understandings
        or
        arrangements by which the Company or any of its subsidiaries is or may become
        bound to issue additional shares of capital stock of the Company or any of
        its
        subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
        commitments of any character whatsoever relating to, or securities or rights
        convertible into, any shares of capital stock of the Company or any of its
        subsidiaries, (ii) there are no outstanding debt securities and (iii) there
        are
        no agreements or arrangements under which the Company or any of its subsidiaries
        is obligated to register the sale of any of their securities under the
        Securities Act (except pursuant to the Investor Registration Rights Agreement)
        and (iv) there are no outstanding registration statements and there are no
        outstanding comment letters from the SEC or any other regulatory agency.
        There
        are no securities or instruments containing anti-dilution or similar provisions
        that will be triggered by the issuance of the Convertible Debenture as described
        in this Agreement. The Company has furnished to the Buyer true and correct
        copies of the Company’s Certificate of Incorporation, as amended and as in
        effect on the date hereof (the “Certificate
        of Incorporation”),
        and
        the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
        and
        the terms of all securities convertible into or exercisable for Common Stock
        and
        the material rights of the holders thereof in respect thereto other than
        stock
        options issued to employees and consultants. 

       

      (d)  Issuance
        of Securities.
        The
        Convertible Debenture are duly authorized and, upon issuance in accordance
        with
        the terms hereof, shall be duly issued, fully paid and nonassessable, are
        free
        from all taxes, liens and charges with respect to the issue thereof. The
        Conversion Shares issuable upon conversion of the Convertible Debenture have
        been duly authorized and reserved for issuance. Upon conversion or exercise
        in
        accordance with the Convertible Debenture the Conversion Shares will be duly
        issued, fully paid and nonassessable.

       

      (e)  No
        Conflicts.
        Except
        as disclosed in the SEC Documents, the execution, delivery and performance
        of
        the Transaction Documents by the Company and the consummation by the Company
        of
        the transactions contemplated hereby will not (i) result in a violation of
        the
        Certifictae of Incorporation, any certificate of designations of any outstanding
        series of preferred stock of the Company or the By-laws or (ii) conflict
        with or
        constitute a default (or an event which with notice or lapse of time or both
        would become a default) under, or give to others any rights of termination,
        amendment, acceleration or cancellation of, any agreement, indenture or
        instrument to which the Company or any of its subsidiaries is a party, or
        result
        in a violation of any law, rule, regulation, order, judgment or decree
        (including federal and state securities laws and regulations and the rules
        and
        regulations of The National Association of Securities Dealers Inc.’s OTC
        Bulletin Board on which the Common Stock is quoted) applicable to the Company
        or
        any of its subsidiaries or by which any property or asset of the Company
        or any
        of its subsidiaries is bound or affected. Except as disclosed in the SEC
        Documents, neither the Company nor its subsidiaries is in violation of any
        term
        of or in default under its Articles of Incorporation or By-laws or their
        organizational charter or by-laws, respectively, or any material contract,
        agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
        or
        order or any statute, rule or regulation applicable to the Company or its
        subsidiaries. The business of the Company and its subsidiaries is not

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      being
        conducted, and shall not be conducted in violation of any material law,
        ordinance, or regulation of any governmental entity. Except as specifically
        contemplated by this Agreement and as required under the Securities Act and
        any
        applicable state securities laws, the Company is not required to obtain any
        consent, authorization or order of, or make any filing or registration with,
        any
        court or governmental agency in order for it to execute, deliver or perform
        any
        of its obligations under or contemplated by this Agreement or the Investor
        Registration Rights Agreement in accordance with the terms hereof or thereof.
        Except as disclosed in the SEC Documents, all consents, authorizations, orders,
        filings and registrations which the Company is required to obtain pursuant
        to
        the preceding sentence have been obtained or effected on or prior to the
        date
        hereof. The Company and its subsidiaries are unaware of any facts or
        circumstance, which might give rise to any of the foregoing.

       

      (f)  SEC
        Documents: Financial Statements.
        Since
        January 1, 2004, the Company has filed all reports, schedules, forms, statements
        and other documents required to be filed by it with the SEC under of the
        Securities Exchange Act of 1934, as amended (the “Exchange
        Act”)
        (all
        of the foregoing filed prior to the date hereof or amended after the date
        hereof
        and all exhibits included therein and financial statements and schedules
        thereto
        and documents incorporated by reference therein, being hereinafter referred
        to
        as the “SEC
        Documents”).
        The
        Company has delivered to the Buyers or their representatives, or made available
        through the SEC’s website at http://www.sec.gov., true and complete copies of
        the SEC Documents. As of their respective dates, the financial statements
        of the
        Company disclosed in the SEC Documents (the “Financial
        Statements”)
        complied as to form in all material respects with applicable accounting
        requirements and the published rules and regulations of the SEC with respect
        thereto. Such financial statements have been prepared in accordance with
        generally accepted accounting principles, consistently applied, during the
        periods involved (except (i) as may be otherwise indicated in such Financial
        Statements or the notes thereto, or (ii) in the case of unaudited interim
        statements, to the extent they may exclude footnotes or may be condensed
        or
        summary statements) and, fairly present in all material respects the financial
        position of the Company as of the dates thereof and the results of its
        operations and cash flows for the periods then ended (subject, in the case
        of
        unaudited statements, to normal year-end audit adjustments). No other
        information provided by or on behalf of the Company to the Buyer which is
        not
        included in the SEC Documents, including, without limitation, information
        referred to in this Agreement, contains any untrue statement of a material
        fact
        or omits to state any material fact necessary in order to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading.

       

      (g)  10(b)-5.
        The SEC
        Documents do not include any untrue statements of material fact, nor do they
        omit to state any material fact required to be stated therein necessary to
        make
        the statements made, in light of the circumstances under which they were
        made,
        not misleading.

       

      (h)  Absence
        of Litigation.
        Except
        as disclosed in the SEC Documents, there is no action, suit, proceeding,
        inquiry
        or investigation before or by any court, public board, government agency,
        self-regulatory organization or body pending against or affecting the Company,
        the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
        decision, ruling or finding would (i) have a material adverse effect on the
        transactions contemplated hereby (ii) adversely affect the validity or
        enforceability of, or the authority or ability of the Company to perform
        its
        obligations under, this Agreement or any of the documents contemplated herein,
        or (iii) except as expressly disclosed in the SEC Documents, have a material
        adverse effect on the business, operations, properties, financial condition
        or
        results of operations of the Company and its subsidiaries taken as a
        whole.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      (i)  Acknowledgment
        Regarding Buyer’s Purchase of the Convertible Debenture.
        The
        Company acknowledges and agrees that the Buyer is acting solely in the capacity
        of an arm’s length purchaser with respect to this Agreement and the transactions
        contemplated hereby. The Company further acknowledges that the Buyer is not
        acting as a financial advisor or fiduciary of the Company (or in any similar
        capacity) with respect to this Agreement and the transactions contemplated
        hereby and any advice given by the Buyer or any of their respective
        representatives or agents in connection with this Agreement and the transactions
        contemplated hereby is merely incidental to the Buyer’s purchase of the
        Convertible Debenture or the Conversion Shares. The Company further represents
        to the Buyer that the Company’s decision to enter into this Agreement has been
        based solely on the independent evaluation by the Company and its
        representatives.

       

      (j)  No
        General Solicitation.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf, has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D under the Securities Act) in connection
        with
        the offer or sale of the Convertible Debenture or the Conversion
        Shares.

       

      (k)  No
        Integrated Offering.
        Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf has, directly or indirectly, made any offers or sales of any security
        or
        solicited any offers to buy any security, under circumstances that would
        require
        registration of the Convertible Debenture or the Conversion Shares under
        the
        Securities Act or cause this offering of the Convertible Debenture or the
        Conversion Shares to be integrated with prior offerings by the Company for
        purposes of the Securities Act.

       

      (l)  Employee
        Relations.
        Neither
        the Company nor any of its subsidiaries is involved in any labor dispute
        nor, to
        the knowledge of the Company or any of its subsidiaries, is any such dispute
        threatened. None of the Company’s or its subsidiaries’ employees is a member of
        a union and the Company and its subsidiaries believe that their relations
        with
        their employees are good.

       

      (m)  Intellectual
        Property Rights.
        The
        Company and its subsidiaries own or possess adequate rights or licenses to
        use
        all trademarks, trade names, service marks, service mark registrations, service
        names, patents, patent rights, copyrights, inventions, licenses, approvals,
        governmental authorizations, trade secrets and rights necessary to conduct
        their
        respective businesses as now conducted. The Company and its subsidiaries
        do not
        have any knowledge of any infringement by the Company or its subsidiaries
        of
        trademark, trade name rights, patents, patent rights, copyrights, inventions,
        licenses, service names, service marks, service mark registrations, trade
        secret
        or other similar rights of others, and, to the knowledge of the Company there
        is
        no claim, action or proceeding being made or brought against, or to the
        Company’s knowledge, being threatened against, the Company or its subsidiaries
        regarding trademark, trade name, patents, patent rights, invention, copyright,
        license, service names, service marks, service mark registrations, trade
        secret
        or other infringement; and the Company and its subsidiaries are unaware of
        any
        facts or circumstances which might give rise to any of the
        foregoing.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      (n)  Environmental
        Laws.
        The
        Company and its subsidiaries are (i) in material compliance with any and
        all
        applicable foreign, federal, state and local laws and regulations relating
        to
        the protection of human health and safety, the environment or hazardous or
        toxic
        substances or wastes, pollutants or contaminants (“Environmental
        Laws”),
        (ii)
        have received all material permits, licenses or other approvals required
        of them
        under applicable Environmental Laws to conduct their respective businesses
        and
        (iii) are in material compliance with all terms and conditions of any such
        permit, license or approval.

       

      (o)  Title.
        Any
        real property and facilities held under lease by the Company and its
        subsidiaries are held by them under valid, subsisting and enforceable leases
        with such exceptions as are not material and do not interfere with the use
        made
        and proposed to be made of such property and buildings by the Company and
        its
        subsidiaries.

       

      (p)  Insurance.
        The
        Company and each of its subsidiaries are insured by insurers of recognized
        financial responsibility against such losses and risks and in such amounts
        as
        management of the Company believes to be prudent and customary in the businesses
        in which the Company and its subsidiaries are engaged. Neither the Company
        nor
        any such subsidiary has been refused any insurance coverage sought or applied
        for and neither the Company nor any such subsidiary has any reason to believe
        that it will not be able to renew its existing insurance coverage as and
        when
        such coverage expires or to obtain similar coverage from similar insurers
        as may
        be necessary to continue its business at a cost that would not materially
        and
        adversely affect the condition, financial or otherwise, or the earnings,
        business or operations of the Company and its subsidiaries, taken as a
        whole.

       

      (q)  Regulatory
        Permits.
        The
        Company and its subsidiaries possess all material certificates, authorizations
        and permits issued by the appropriate federal, state or foreign regulatory
        authorities necessary to conduct their respective businesses, and neither
        the
        Company nor any such subsidiary has received any notice of proceedings relating
        to the revocation or modification of any such certificate, authorization
        or
        permit.

       

      (r)  Internal
        Accounting Controls.
        The
        Company and each of its subsidiaries maintain a system of internal accounting
        controls sufficient to provide reasonable assurance that (i) transactions
        are
        executed in accordance with management’s general or specific authorizations,
        (ii) transactions are recorded as necessary to permit preparation of financial
        statements in conformity with generally accepted accounting principles and
        to
        maintain asset accountability, and (iii) the recorded amounts for assets
        is
        compared with the existing assets at reasonable intervals and appropriate
        action
        is taken with respect to any differences.

       

      (s)  No
        Material Adverse Breaches, etc.
        Except
        as set forth in the SEC Documents, neither the Company nor any of its
        subsidiaries is subject to any charter, corporate or other legal restriction,
        or
        any judgment, decree, order, rule or regulation which in the judgment of
        the
        Company’s officers has or is expected in the future to have a material adverse
        effect on the business, properties, operations, financial condition, results
        of
        operations or prospects of the Company or its subsidiaries. Except as set
        forth
        in the SEC Documents, neither the Company nor any of its subsidiaries is
        in
        breach of any contract or agreement which breach, in the judgment of the
        Company’s officers, has or is expected to have a material adverse effect on the
        business, properties, operations, financial condition, results of operations
        or
        prospects of the Company or its subsidiaries.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      (t)  Tax
        Status.
        Except
        as set forth in the SEC Documents, the Company and each of its subsidiaries
        has
        made and filed all federal and state income and all other tax returns, reports
        and declarations required by any jurisdiction to which it is subject and
        (unless
        and only to the extent that the Company and each of its subsidiaries has
        set
        aside on its books provisions reasonably adequate for the payment of all
        unpaid
        and unreported taxes) has paid all taxes and other governmental assessments
        and
        charges that are material in amount, shown or determined to be due on such
        returns, reports and declarations, except those being contested in good faith
        and has set aside on its books provision reasonably adequate for the payment
        of
        all taxes for periods subsequent to the periods to which such returns, reports
        or declarations apply. There are no unpaid taxes in any material amount claimed
        to be due by the taxing authority of any jurisdiction, and the officers of
        the
        Company know of no basis for any such claim.

       

      (u)  Certain
        Transactions.
        Except
        as set forth in the SEC Documents, and except for arm’s length transactions
        pursuant to which the Company makes payments in the ordinary course of business
        upon terms no less favorable than the Company could obtain from third parties
        and other than the grant of stock options disclosed in the SEC Documents,
        none
        of the officers, directors, or employees of the Company is presently a party
        to
        any transaction with the Company (other than for services as employees, officers
        and directors), including any contract, agreement or other arrangement providing
        for the furnishing of services to or by, providing for rental of real or
        personal property to or from, or otherwise requiring payments to or from
        any
        officer, director or such employee or, to the knowledge of the Company, any
        corporation, partnership, trust or other entity in which any officer, director,
        or any such employee has a substantial interest or is an officer, director,
        trustee or partner.

       

      (v)  Fees
        and Rights of First Refusal.
        The
        Company is not obligated to offer the securities offered hereunder on a right
        of
        first refusal basis or otherwise to any third parties including, but not
        limited
        to, current or former shareholders of the Company, underwriters, brokers,
        agents
        or other third parties.

       

      4.  COVENANTS.

       

      (a)  Best
        Efforts.
        Each
        party shall use its best efforts timely to satisfy each of the conditions
        to be
        satisfied by it as provided in Sections 6 and 7 of this Agreement.

       

      (b)  Form
        D.
        The
        Company agrees to file a Form D with respect to the Conversion Shares as
        required under Regulation D and to provide a copy thereof to the Buyer promptly
        after such filing. The Company shall, on or before the Closing Date, take
        such
        action as the Company shall reasonably determine is necessary to qualify
        the
        Conversion Shares, or obtain an exemption for the Conversion Shares for sale
        to
        the Buyers at the Closing pursuant to this Agreement under applicable securities
        or “Blue Sky” laws of the states of the United States, and shall provide
        evidence of any such action so taken to the Buyers on or prior to the Closing
        Date.

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      (c)  Reporting
        Status.
        Until
        the earlier of (i) the date as of which the Buyer may sell all of the Conversion
        Shares without restriction pursuant to Rule 144(k) promulgated under the
        Securities Act (or successor thereto), or (ii) the date on which (A) the
        Buyer
        shall have sold all the Conversion Shares and (B) none of the Convertible
        Debenture are outstanding (the “Registration
        Period”),
        the
        Company shall file in a timely manner all reports required to be filed with
        the
        SEC pursuant to the Exchange Act and the regulations of the SEC thereunder,
        and
        the Company shall not terminate its status as an issuer required to file
        reports
        under the Exchange Act even if the Exchange Act or the rules and regulations
        thereunder would otherwise permit such termination.

       

      (d)  Use
        of
        Proceeds.
        The
        Company will use the proceeds from the sale of the Convertible Debenture
        for
        general corporate, working capital and repayment of debt purposes.

       

      (e)  Reservation
        of Shares.
        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 issuance of the Conversion
        Shares. If at any time the Company does not have available such shares of
        Common
        Stock as shall from time to time be sufficient to effect the conversion of
        all
        of the Conversion Shares of the Company, the Company’s management 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.

       

      (f)  Listings
        or Quotation.
        The
        Company shall promptly secure the listing or quotation of the Conversion
        Shares
        upon each national securities exchange, automated quotation system or The
        National Association of Securities Dealers Inc.’s Over-The-Counter Bulletin
        Board (“OTCBB”)
        or
        other market, if any, upon which shares of Common Stock are then listed or
        quoted (subject to official notice of issuance) and shall use its best efforts
        to maintain, so long as any other shares of Common Stock shall be so listed,
        such listing of all Conversion Shares from time to time issuable under the
        terms
        of this Agreement. The Company shall maintain the Common Stock’s authorization
        for quotation on the OTCBB.

       

      (g)  Fees
        and Expenses.
        Each of
        the Company and the Buyer shall pay all costs and expenses incurred by such
        party in connection with the negotiation, investigation, preparation, execution
        and delivery of the Transaction Documents. The Company shall pay a commitment
        fee equal to five percent (5%) of the Purchase Price. The Company shall pay
        a
        structuring fee to Yorkville Advisors Management, LLC of Thirty Five Thousand
        Dollars ($35,000). These fees shall be deducted from the gross proceeds of
        the
        Closing.

       

      (h)  The
        Company shall issue to the Buyer a warrant to purchase Six Million (6,000,000)
        shares of the Company’s Common Stock (the “Warrant
        Shares”)
        for a
        period of five (5) years at an exercise price of $0.50 per share. The Warrant
        Shares shall have “piggy-back” and demand registration rights. 

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      (i)  Corporate
        Existence.
        So long
        as any of the Convertible Debenture remains outstanding, the Company shall
        not
        directly or indirectly consummate any merger, reorganization, restructuring,
        reverse stock split consolidation, sale of all or substantially all of the
        Company’s assets or any similar transaction or related transactions (each such
        transaction, an “Organizational
        Change”)
        unless, prior to the consummation an Organizational Change, the Company obtains
        the written consent of the Buyer. In any such case, the Company will make
        appropriate provision with respect to such holders’ rights and interests to
        insure that the provisions of this Section 4(h) will thereafter be applicable
        to
        the Convertible Debenture.

       

      (j)  Transactions
        With Affiliates.
        So long
        as the Convertible Debenture is outstanding, the Company shall not, and shall
        cause each of its subsidiaries not to, enter into, amend, modify or supplement,
        or permit any subsidiary to enter into, amend, modify or supplement any
        agreement, transaction, commitment, or arrangement with any of its or any
        subsidiary’s officers, directors, person who were officers or directors at any
        time during the previous two (2) years, stockholders who beneficially own
        five
        percent (5%) or more of the Common Stock, or Affiliates (as defined below)
        or
        with any individual related by blood, marriage, or adoption to any such
        individual or with any entity in which any such entity or individual owns
        a five
        percent (5%) or more beneficial interest (each a “Related
        Party”),
        except for (a) customary employment arrangements and benefit programs on
        reasonable terms, (b) any investment in an Affiliate of the Company, (c)
        any
        agreement, transaction, commitment, or arrangement on an arms-length basis
        on
        terms no less favorable than terms which would have been obtainable from
        a
        person other than such Related Party, (d) any agreement transaction, commitment,
        or arrangement which is approved by a majority of the disinterested directors
        of
        the Company, for purposes hereof, any director who is also an officer of
        the
        Company or any subsidiary of the Company shall not be a disinterested director
        with respect to any such agreement, transaction, commitment, or arrangement.
        “Affiliate”
        for
        purposes hereof means, with respect to any person or entity, another person
        or
        entity that, directly or indirectly, (i) has a ten percent (10%) or more
        equity
        interest in that person or entity, (ii) has ten percent (10%) or more common
        ownership with that person or entity, (iii) controls that person or entity,
        or
        (iv) shares common control with that person or entity. “Control”
        or
“controls”
        for
        purposes hereof means that a person or entity has the power, direct or indirect,
        to conduct or govern the policies of another person or entity.

       

      (k)  Transfer
        Agent.
        The
        Company covenants and agrees that, in the event that the Company’s agency
        relationship with the transfer agent should be terminated for any reason
        prior
        to a date which is two (2) years after the Closing Date, the Company shall
        immediately appoint a new transfer agent and shall require that the new transfer
        agent execute and agree to be bound by the terms of the Irrevocable Transfer
        Agent Instructions (as defined herein)[not defined].

       

      (l)  Restriction
        on Issuance of the Capital Stock.
        Except
        for the issuance of capital stock under any financing arrangements now or
        hereafter existing by the Company to the Holder, so
        long as
        the Convertible Debenture is outstanding, the Company shall not, without
        the
        prior written consent of the Buyer, (i) issue or sell shares of Common Stock
        or
        Preferred Stock without consideration or for a consideration per share less
        than
        the lowest closing bid price of the Company’s Common Stock, as quoted by
        Bloomberg, LP (the “Closing
        Bid Price”)
        determined immediately prior to its issuance, (ii) issue any warrant, option,
        right, contract, call, or other security instrument granting the holder thereof,
        the right to acquire Common Stock without consideration or for a consideration
        less than such Common Stock’s Closing Bid Price value determined immediately
        prior to it’s issuance, (iii) enter into any security instrument granting the
        holder a security interest in any and all assets of the Company other than
        equipment financing and capital leases entered in the ordinary course of
        business, or (iv) file any registration statement on Form S-8.

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      (m)  
        Neither
        the Buyer nor any of its affiliates have an open short position in the Common
        Stock of the Company, and the Buyer agrees that it shall not, and that it
        will
        cause its affiliates not to, engage in any short sales of or hedging
        transactions with respect to the Common Stock as long as the Convertible
        Debenture or warrants to purchase the Warrant Shares shall remain outstanding.
        

       

      (n)  The
        Company covenants and agrees that if the aggregate indebtedness owed to the
        Buyer (including all indebtedness now or hereafter existing) exceeds $4.0
        million on March 1, 2006, then the Company shall be obligated to enter into
        a
        new Standby Equity Distribution Agreement (the “SEDA”)
        with
        the Buyer in an amount not less than the aggregate indebtedness owed to the
        Buyer. The terms of the SEDA shall be identical to the Company’s current Standby
        Equity Distribution Agreement in the amount of $100 million (the “Current
        SEDA”),
        except that the upfront commitment shall be proportional to those collected
        on
        the Current SEDA.

       

      (o)  In
        connection with this Agreement and the other Transaction Documents, the Company
        and its subsidiaries agree not to grant security interests in any other their
        assets to any other party other than equipment financing and capital leases
        entered in the ordinary course of business. The Buyer shall give consideration
        to consenting to the Company’s subsidiaries entering into an accounts receivable
        line with an institutional lender in an amount not to exceed $5.0
        million.

       

      (p)  Rights
        of First Refusal.
        So long
        as there is any outstanding indebtedness owed by the Company to the Buyer,
        if
        the Company intends to raise additional capital by the issuance or sale of
        capital stock of the Company, including, without limitation, shares of any
        class
        of common stock, any class of preferred stock, options, warrants or any other
        securities convertible or exercisable into shares of common stock (whether
        the
        offering is conducted by the Company, underwriter, placement agent or any
        third
        party) the Company shall be obligated to offer to the Buyer such issuance
        or
        sale of capital stock, by providing in writing the principal amount of capital
        it intends to raise and outline of the material terms of such capital raise
        (“Capital
        Raise Notice”),
        prior
        to the offering such issuance or sale of capital stock to any third parties
        including, but not limited to, current or former officers or directors, current
        or former shareholders and/or investors of the Company, underwriters, brokers,
        agents or other third parties, provided,
        however,
        that
        such right of first refusal shall not apply (i) if the Company’s capital raise
        is to repay all principal and interest that the Company owes to the Buyer
        under
        the Convertible Debenture and (ii) so long as the Buyer has at least thirty
        (30)
        days from the date the Buyer receives such Capital Raise Notice to exercise
        its
        right of conversion under the Convertible Debenture. The
        Buyer's right of conversion after receipt of the Capital Raise Notice shall
        continue until all amounts owed to the Buyer under the Convertible Debenture
        are
        converted in full by the Buyer or are repaid in immediately available funds
        by
        the Company. In
        all
        other circumstances, the Buyer shall have ten (10) business days from receipt
        of
        the Capital Raise Notice of the sale or issuance of capital stock to accept
        or
        reject all or a portion of such capital raising offer.

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      5.  TRANSFER
        AGENT INSTRUCTIONS.

       

      (a)  The
        Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
        agent irrevocably appointing David Gonzalez, Esq. as its agent for purpose
        of
        having certificates issued, registered in the name of the Buyer or its
        respective nominee(s), for the Conversion Shares representing such amounts
        of
        Convertible Debenture as specified from time to time by the Buyer to the
        Company
        upon conversion of the Convertible Debenture, for interest owed pursuant
        to the
        Convertible Debenture, and for any and all Liquidated Damages (as this term
        is
        defined in the Investor Registration Rights Agreement). David Gonzalez, Esq.
        shall be paid a cash fee of Fifty Dollars ($50) for every occasion they act
        pursuant to the Irrevocable Transfer Agent Instructions. The Company shall
        not
        change its transfer agent without the express written consent of the Buyer,
        which may be withheld by the Buyer in its sole discretion. Prior to registration
        of the Conversion Shares under the Securities Act, all such certificates
        shall
        bear the restrictive legend specified in Section 2(g) of this Agreement.
        The
        Company warrants that no instruction other than the Irrevocable Transfer
        Agent
        Instructions referred to in this Section 5, and stop transfer instructions
        to
        give effect to Section 2(g) hereof (in the case of the Conversion Shares
        prior
        to registration of such shares under the Securities Act) will be given by
        the
        Company to its transfer agent and that the Conversion Shares shall otherwise
        be
        freely transferable on the books and records of the Company as and to the
        extent
        provided in this Agreement and the Investor Registration Rights Agreement.
        Nothing in this Section 5 shall affect in any way the Buyer’s obligations and
        agreement to comply with all applicable securities laws upon resale of
        Conversion Shares. If the Buyer provides the Company with an opinion of counsel,
        in form, scope and substance customary for opinions of counsel in comparable
        transactions to the effect that registration of a resale by the Buyer of
        any of
        the Conversion Shares is not required under the Securities Act, the Company
        shall within two (2) business days instruct its transfer agent to issue one
        or
        more certificates in such name and in such denominations as specified by
        the
        Buyer. The Company acknowledges that a breach by it of its obligations hereunder
        will cause irreparable harm to the Buyer by vitiating the intent and purpose
        of
        the transaction contemplated hereby. Accordingly, the Company acknowledges
        that
        the remedy at law for a breach of its obligations under this Section 5 will
        be
        inadequate and agrees, in the event of a breach or threatened breach by the
        Company of the provisions of this Section 5, that the Buyer shall
        be
        entitled, in addition to all other available remedies, to an injunction
        restraining any breach and requiring immediate issuance and transfer, without
        the necessity of showing economic loss and without any bond or other security
        being required.

       

      6.  CONDITIONS
        TO THE COMPANY’S OBLIGATION TO SELL.

       

      The
        obligation of the Company hereunder to issue and sell the Convertible Debenture
        to the Buyer at the Closing is subject to the satisfaction, at or before
        the
        Closing Date, of each of the following conditions, provided that these
        conditions are for the Company’s sole benefit and may be waived by the Company
        at any time in its sole discretion:

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      (a)  The
        Buyer
        shall have executed the Transaction Documents and delivered them to the
        Company.

       

      (b)  The
        Buyer
        shall have delivered to the Escrow Agent the Purchase Price for Convertible
        Debenture and the Escrow Agent shall have delivered the net proceeds to the
        Company by wire transfer of immediately available U.S. funds pursuant to
        the
        wire instructions provided by the Company.

       

      (c)  The
        representations and warranties of the Buyer shall be true and correct in
        all
        material respects as of the date when made and as of the Closing Date as
        though
        made at that time (except for representations and warranties that speak as
        of a
        specific date), and the Buyer shall have performed, satisfied and complied
        in
        all material respects with the covenants, agreements and conditions required
        by
        this Agreement to be performed, satisfied or complied with by the Buyer at
        or
        prior to the Closing Date. 

       

      7.  CONDITIONS
        TO THE BUYER’S OBLIGATION TO PURCHASE.

       

      (a)  The
        obligation of the Buyer hereunder to Purchase the Convertible Debenture at
        the
        Closing is subject to the satisfaction, at or before the Closing Date, of
        each
        of the following conditions:

       

      (i)   The
        Company shall have executed and delivered the Transaction Documents, including,
        without limitation, the Convertible Debenture in the original principal amount
        of $15,500,000.

       

      (ii)   The
        Common Stock shall be authorized for quotation on the OTCBB, trading in the
        Common Stock shall not have been suspended for any reason, and all the
        Conversion Shares issuable upon the conversion of the Convertible Debenture
        shall be approved by the OTCBB. 

       

      (iii)   The
        representations and warranties of the Company shall be true and correct in
        all
        material respects (except to the extent that any of such representations
        and
        warranties is already qualified as to materiality in Section 3 above, in
        which
        case, such representations and warranties shall be true and correct without
        further qualification) as of the date when made and as of the Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Closing Date. If requested by the Buyer, the Buyer
        shall have received a certificate, executed by the President of the Company,
        dated as of the Closing Date, to the foregoing effect and as to such other
        matters as may be reasonably requested by the Buyer including, without
        limitation an update as of the Closing Date regarding the representation
        contained in Section 3(c) above.

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

      (iv)   The
        Buyer
        shall have received an opinion of counsel from Schiff Hardin LLP in a form
        satisfactory to the Buyer.

       

      (v)   The
        Company shall have provided to the Buyer a certificate of good standing from
        the
        secretary of state from the state in which the company is
        incorporated.

       

      (vi)  Airlie
        Opportunity Master Fund, Ltd. shall have assigned its security interests
        in the
        Company and its subsidiaries to the Buyer. Further, the Security Documents
        (as
        defined in the Debenture) shall be in a form acceptable to the Buyer. The
        Company shall have filed a form UCC-1 or such other forms as may be required
        to
        perfect the Buyer’s security interests.

       

      (vii)  The
        Company shall have provided to the Buyer an acknowledgement, to the satisfaction
        of the Buyer, from the Company’s certified public accountant as to its ability
        to provide all consents required in order to file a registration statement
        in
        connection with this transaction.

       

      (viii)  The
        Company shall have reserved out of its authorized and unissued Common Stock,
        solely for the purpose of effecting the conversion of the Convertible Debenture,
        shares of Common Stock to effect the conversion of all of the Conversion
        Shares
        then outstanding. 

       

      8.  INDEMNIFICATION.

       

      (a)  In
        consideration of the Buyer’s execution and delivery of this Agreement and
        acquiring the Convertible Debenture and the Conversion Shares hereunder,
        and in
        addition to all of the Company’s other obligations under this Agreement, the
        Company shall defend, protect, indemnify and hold harmless the Buyer and
        each
        other holder of the Convertible Debenture and the Conversion Shares, and
        all of
        their officers, directors, employees and agents (including, without
        limitation, those retained in connection with the transactions contemplated
        by
        this Agreement) (collectively, the “Buyer
        Indemnitees”)
        from
        and against any and all actions, causes of action, suits, claims, losses,
        costs,
        penalties, fees, liabilities and damages, and expenses in connection therewith
        (irrespective of whether any such Buyer Indemnitee is a party to the action
        for
        which indemnification hereunder is sought), and including reasonable attorneys’
        fees and disbursements (the “Indemnified
        Liabilities”),
        incurred by the Buyer Indemnitees or any of them as a result of, or arising
        out
        of, or relating to (a) any misrepresentation or breach of any representation
        or
        warranty made by the Company in this Agreement, the Convertible Debenture
        or the
        Investor Registration Rights Agreement or any other certificate, instrument
        or
        document contemplated hereby or thereby, (b) any breach of any covenant,
        agreement or obligation of the Company contained in this Agreement, or the
        Investor Registration Rights Agreement or any other certificate, instrument
        or
        document contemplated hereby or thereby, or (c) any cause of action, suit
        or
        claim brought or made against such Indemnitee and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement
        or
        any other instrument, document or agreement executed pursuant hereto by any
        of
        the Indemnities, any transaction financed or to be financed in whole or in
        part,
        directly or indirectly, with the proceeds of the issuance of the Convertible
        Debenture or the status of the Buyer or holder of the Convertible Debenture
        the
        Conversion Shares, as a Buyer of Convertible Debenture in the Company. To
        the
        extent that the foregoing undertaking by the Company may be unenforceable
        for
        any reason, the Company shall make the maximum contribution to the payment
        and
        satisfaction of each of the Indemnified Liabilities, which is permissible
        under
        applicable law.

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

      (b)  In
        consideration of the Company’s execution and delivery of this Agreement, and in
        addition to all of the Buyer’s other obligations under this Agreement, the Buyer
        shall defend, protect, indemnify and hold harmless the Company and all of
        its
        officers, directors, employees and agents (including, without limitation,
        those
        retained in connection with the transactions contemplated by this Agreement)
        (collectively, the “Company
        Indemnitees”)
        from
        and against any and all Indemnified Liabilities incurred by the Indemnitees
        or
        any of them as a result of, or arising out of, or relating to (a) any
        misrepresentation or breach of any representation or warranty made by the
        Buyer
        in this Agreement, instrument or document contemplated hereby or thereby
        executed by the Buyer, (b) any breach of any covenant, agreement or obligation
        of the Buyer contained in this Agreement, the Investor Registration Rights
        Agreement or any other certificate, instrument or document contemplated hereby
        or thereby executed by the Buyer, or (c) any cause of action, suit or claim
        brought or made against such Company Indemnitee based on material
        misrepresentations or due to a material breach and arising out of or resulting
        from the execution, delivery, performance or enforcement of this Agreement,
        the
        Investor Registration Rights Agreement or any other instrument, document
        or
        agreement executed pursuant hereto by any of the Company Indemnities. To
        the
        extent that the foregoing undertaking by the Buyer may be unenforceable for
        any
        reason, the Buyer shall make the maximum contribution to the payment and
        satisfaction of each of the Indemnified Liabilities, which is permissible
        under
        applicable law.

       

      9.  GOVERNING
        LAW: MISCELLANEOUS.

       

      (a)  Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the laws
        of
        the State of New Jersey without regard to the principles of conflict of laws.
        The parties further agree that any action between them shall be heard in
        Hudson
        County, New Jersey, and expressly consent to the jurisdiction and venue of
        the
        Superior Court of New Jersey, sitting in Hudson County and the United States
        District Court for the District of New Jersey sitting in Newark, New Jersey
        for
        the adjudication of any civil action asserted pursuant to this
        Paragraph.

       

      (b)  Counterparts.
        This
        Agreement may be executed in two or more identical counterparts, all of which
        shall be considered one and the same agreement and shall become effective
        when
        counterparts have been signed by each party and delivered to the other party.
        In
        the event any signature page is delivered by facsimile transmission, the
        party
        using such means of delivery shall cause four (4) additional original executed
        signature pages to be physically delivered to the other party within five
        (5)
        days of the execution and delivery hereof.

       

      (c)  Headings.
        The
        headings of this Agreement are for convenience of reference and shall not
        form
        part of, or affect the interpretation of, this Agreement.

       

      (d)  Severability.
        If any
        provision of this Agreement shall be invalid or unenforceable in any
        jurisdiction, such invalidity or unenforceability shall not affect the validity
        or enforceability of the remainder of this Agreement in that jurisdiction
        or the
        validity or enforceability of any provision of this Agreement in any other
        jurisdiction.

       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

      (e)  Entire
        Agreement, Amendments.
        This
        Agreement supersedes all other prior oral or written agreements between the
        Buyer, the Company, their affiliates and persons acting on their behalf with
        respect to the matters discussed herein, and this Agreement and the instruments
        referenced herein contain the entire understanding of the parties with respect
        to the matters covered herein and therein and, except as specifically set
        forth
        herein or therein, neither the Company nor any Buyer makes any representation,
        warranty, covenant or undertaking with respect to such matters. No provision
        of
        this Agreement may be waived or amended other than by an instrument in writing
        signed by the party to be charged with enforcement.

       

      (f)  Notices.
        Any
        notices, consents, waivers, or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered (i) upon receipt, when delivered personally; (ii) upon
        confirmation of receipt, when sent by facsimile; (iii) three (3) days after
        being sent by U.S. certified mail, return receipt requested, or (iv) one
        (1) day
        after deposit with a nationally recognized overnight delivery service, in
        each
        case properly addressed to the party to receive the same. The addresses and
        facsimile numbers for such communications shall be:

       

      
        	
                If
                  to the Company, to:

              	
                Mobilepro
                  Corp.

              
	 	
                6701
                  Democracy Blvd., Suite 300

              
	 	
                Bethesda,
                  MD 20817

              
	 	
                Attention:
                  Jay Wright, President

              
	 	
                Telephone:
                  (301) 315-9040

              
	 	
                Facsimile:
                  (301) 315-9027

              
	 	 
	
                With
                  a copy to:

              	
                Schiff
                  Hardin LLP

              
	 	
                1101
                  Connecticut Avenue, NW

              
	 	
                Suite
                  600

              
	 	
                Washington,
                  DC 20036-4390

              
	 	
                Attention:
                  Ernest M. Stern, Esq.

              
	 	
                Telephone:
                  (202) 778-6461

              
	 	
                Facsimile:
                  (202) 778-6460

              
	 	 
	
                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

              
	 	 

      

      Each
        party shall provide five (5) days’ prior written notice to the other party of
        any change in address or facsimile number.

       

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

      (g)  Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their respective successors and assigns. Neither the Company nor any Buyer
        shall
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of the other party hereto.

       

      (h)  No
        Third Party Beneficiaries.
        This
        Agreement is intended for the benefit of the parties hereto and their respective
        permitted successors and assigns, and is not for the benefit of, nor may
        any
        provision hereof be enforced by, any other person.

       

      (i)  Survival.
        Unless
        this Agreement is terminated under Section
        9(l),
        the
        representations and warranties of the Company and the Buyer contained in
        Sections
        2 and 3,
        the
        agreements and covenants set forth in Sections
        4, 5 and 9,
        and the
        indemnification provisions set forth in Section
        8,
        shall
        survive the Closing for a period of two (2) years following the date on which
        the Convertible Debenture is converted in full. The Buyer shall be responsible
        only for its own representations, warranties, agreements and covenants
        hereunder.

       

      (j)  Publicity.
        The
        Company and the Buyer shall have the right to approve, before issuance any
        press
        release or any other public statement with respect to the transactions
        contemplated hereby made by any party; provided, however, that the Company
        shall
        be entitled, without the prior approval of the Buyer, to issue any press
        release
        or other public disclosure with respect to such transactions required under
        applicable securities or other laws or regulations (the Company shall use
        its
        best efforts to consult the Buyer in connection with any such press release
        or
        other public disclosure prior to its release and Buyer shall be provided
        with a
        copy thereof upon release thereof).

       

      (k)  Further
        Assurances.
        Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

       

      (l)  Termination.
        In the
        event that the Closing shall not have occurred with respect to the Buyer
        on or
        before five (5) business days from the date hereof due to the Company’s or the
        Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
        (and the non-breaching party’s failure to waive such unsatisfied condition(s)),
        the non-breaching party shall have the option to terminate this Agreement
        with
        respect to such breaching party at the close of business on such date without
        liability of any party to any other party; provided, however, that if this
        Agreement is terminated by the Company pursuant to this Section 9(l), the
        Company shall remain obligated to reimburse the Buyer for the fees and expenses
        of Yorkville Advisors Management, LLC described in Section 4(g)
        above.

       

      (m)  No
        Strict Construction.
        The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

       

      

      [REMAINDER
        PAGE INTENTIONALLY LEFT BLANK]

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

       

      IN
        WITNESS WHEREOF,
        the
        Buyers and the Company have caused this Securities Purchase Agreement to
        be duly
        executed as of the date first written above.

       

      

      
        	 	 
	 	
                MOBILEPRO
                  CORP. 

              
	 	 
	 	
                By:_____________________________

              
	 	
                Name: Jay
                  Wright

              
	 	
                Title: President

              
	 	 
	 	 
	 	
                CORNELL
                  CAPITAL PARTNERS, LP

              
	 	
                By:
                   Yorkville
                  Advisors, LLC

              
	 	
                Its:
                   General
                  Partner

              
	 	 
	 	 
	 	
                By:_____________________________

              
	 	
                Name:
                   Mark
                  Angelo

              
	 	
                Its:
                   President

              

      

      

       

      
        
           

        

          -20-

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