Document:

exv10w23

 

EXHIBIT 10.23

ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this “Agreement”) is made and entered into as of
May 13, 2004 by MOBILEPRO CORP., a Delaware corporation (the “Company”);
CORNELL CAPITAL PARTNERS, LP, a Delaware limited partnership (the “Investor”);
and BUTLER GONZALEZ LLP (the “Escrow Agent”).

BACKGROUND

     WHEREAS, the Company and the Investor have entered into a Standby Equity
Distribution Agreement (the “Standby Equity Distribution Agreement”) dated as
of the date hereof, pursuant to which the Investor will purchase the Company’s
Common Stock, par value $0.001 per share (the “Common Stock”), at a price per
share equal to the Purchase Price, as that term is defined in the Standby
Equity Distribution Agreement, for an aggregate price of up to One Hundred
Million Dollars ($100,000,000). The Standby Equity Distribution Agreement
provides that on each Advance Date the Investor, as that term is defined in the
Standby Equity Distribution Agreement, shall deposit the Advance pursuant to
the Advance Notice in a segregated escrow account to be held by Escrow Agent
and the Company shall deposit shares of the Company’s Common Stock, which shall
be purchased by the Investor as set forth in the Standby Equity Distribution
Agreement, with the Escrow Agent, in order to effectuate a disbursement to the
Company of the Advance by the Escrow Agent and a disbursement to the Investor
of the shares of the Company’s Common Stock by Escrow Agent at a closing to be
held as set forth in the Standby Equity Distribution Agreement (the “Closing”).

     WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the funds
and the shares of the Company’s Common Stock deposited with it in accordance
with the terms of this Agreement.

     WHEREAS, in order to establish the escrow of funds and shares to effect
the provisions of the Standby Equity Distribution Agreement, the parties hereto
have entered into this Agreement.

     NOW THEREFORE, in consideration of the foregoing, it is hereby agreed as
follows:

     1. Definitions. The following terms shall have the following meanings
when used herein:

         a. “Escrow Funds” shall mean the Advance funds deposited with the Escrow
Agent pursuant to this Agreement.

         b. “Joint Written Direction” shall mean a written direction executed by
the Investor and the Company directing Escrow Agent to disburse all or a
portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.

         c. “Common Stock Joint Written Direction” shall mean a written direction
executed by the Investor and the Company directing Investor’s Counsel to
disburse all or a

 

portion of the shares of the Company’s Common Stock or to refrain from
taking any action pursuant to this Agreement.

     2. Appointment of and Acceptance by Escrow Agent.

         a. The Investor and the Company hereby appoint Escrow Agent to serve as
Escrow Agent hereunder. Escrow Agent hereby accepts such appointment and, upon
receipt by wire transfer of the Escrow Funds in accordance with Section 3
below, agrees to hold, invest and disburse the Escrow Funds in accordance with
this Agreement.

         b. The Investor and the Company hereby appoint the Escrow Agent to serve
as the holder of the shares of the Company’s Common Stock which shall be
purchased by the Investor. The Escrow Agent hereby accepts such appointment
and, upon receipt via D.W.A.C or the certificates representing of the shares of
the Company’s Common Stock in accordance with Section 3 below, agrees to hold
and disburse the shares of the Company’s Common Stock in accordance with this
Agreement.

         c. The Company hereby acknowledges that the Escrow Agent is counsel to the
Investor in connection with the transactions contemplated and referenced
herein. The Company agrees that in the event of any dispute arising in
connection with this Escrow Agreement or otherwise in connection with any
transaction or agreement contemplated and referenced herein, the Escrow Agent
shall be permitted to continue to represent the Investor and the Company will
not seek to disqualify such counsel.

     3. Creation of Escrow Account/Common Stock Account.

         a. On or prior to the date of this Agreement the Escrow Agent shall
establish an escrow account for the deposit of the Escrow Funds entitled as
follows: MobilePro Corp./Cornell Capital Partners, LP. The Investor will wire
funds to the account of the Escrow Agent as follows:

	 	 	 	 	 
	Bank:

	 	Wachovia, N.A. of New Jersey

	Routing #:

	 	031201467	 
	Account #:

	 	2020000659170	 
	Name on Account:

	 	Butler Gonzalez LLP as Escrow Agent

	Name on Sub-Account:

	 	MobilePro Corp./Cornell Capital Partners, LP Escrow
account

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         b. On or prior to the date of this Agreement the Escrow Agent shall
establish an account for the D.W.A.C. of the shares of Common Stock. The
Company will D.W.A.C. shares of the Company’s Common Stock to the account of
the Escrow Agent as follows:

	 	 	 	 	 
	Brokerage Firm:

	 	Crown Financial Group

	Clearing House:

	 	Fiserv

	Account #:

	 	56797702	 
	DTC #:

	 	0632	 
	Name on Account:

	 	Butler Gonzalez LLP Escrow Account

     4. Deposits into the Escrow Account. The Investor agrees that it shall
promptly deliver all monies for the payment of the Common Stock to the Escrow
Agent for deposit in the Escrow Account.

     5. Disbursements from the Escrow Account.

         a. At such time as Escrow Agent has collected and deposited instruments of
payment in the total amount of the Advance and has received such Common Stock
via D.W.A.C from the Company which are to be issued to the Investor pursuant to
the Standby Equity Distribution Agreement, the Escrow Agent shall notify the
Company and the Investor. The Escrow Agent will continue to hold such funds
until the Investor and Company execute and deliver a Joint Written Direction
directing the Escrow Agent to disburse the Escrow Funds pursuant to Joint
Written Direction at which time the Escrow Agent shall wire the Escrow Funds to
the Company. In disbursing such funds, Escrow Agent is authorized to rely upon
such Joint Written Direction from Company and may accept any signatory from the
Company listed on the signature page to this Agreement and any signature from
the Investor that Escrow Agent already has on file. Simultaneous with delivery
of the executed Joint Written Direction to the Escrow Agent the Investor and
Company shall execute and deliver a Common Stock Joint Written Direction to the
Escrow Agent directing the Escrow Agent to release via D.W.A.C to the Investor
the shares of the Company’s Common Stock. In releasing such shares of Common
Stock the Escrow Agent is authorized to rely upon such Common Stock Joint
Written Direction from Company and may accept any signatory from the Company
listed on the signature page to this Agreement and any signature from the
Escrow Agent has on file.

     In the event the Escrow Agent does not receive the amount of the Advance
from the Investor or the shares of Common Stock to be purchased by the Investor
from the Company, the Escrow Agent shall notify the Company and the Investor.

     In the event that the Escrow Agent has not received the Common Stock to be
purchased by the Investor from the Company, in no event will the Escrow Funds
be released to the Company until such shares are received by the Escrow
Agreement. For purposes of this Agreement, the term “Common Stock certificates”
shall mean Common Stock certificates to be purchased pursuant to the respective
Advance Notice pursuant to the Standby Equity Distribution Agreement.

     6. Deposit of Funds. The Escrow Agent is hereby authorized to deposit the
wire transfer proceeds in the Escrow Account.

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     7. Suspension of Performance: Disbursement Into Court.

         a. Escrow Agent. If at any time, there shall exist any dispute between
the Company and the Investor with respect to holding or disposition of any
portion of the Escrow Funds or the Common Stock or any other obligations of
Escrow Agent hereunder, or if at any time Escrow Agent is unable to determine,
to Escrow Agent’s sole satisfaction, the proper disposition of any portion of
the Escrow Funds or Escrow Agent’s proper actions with respect to its
obligations hereunder, or if the parties have not within thirty (30) days of
the furnishing by Escrow Agent of a notice of resignation pursuant to Section 9
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:

              i. Suspend the performance of any of its obligations (including without
limitation any disbursement obligations) under this Escrow Agreement until such
dispute or uncertainty shall be resolved to the sole satisfaction of Escrow
Agent or until a successor Escrow Agent shall be appointed (as the case may
be); provided however, Escrow Agent shall continue to invest the Escrow Funds
in accordance with Section 8 hereof; and/or

              ii. Petition (by means of an interpleader action or any other appropriate
method) any court of competent jurisdiction in any venue convenient to Escrow
Agent, for instructions with respect to such dispute or uncertainty, and to the
extent required by law, pay into such court, for holding and disposition in
accordance with the instructions of such court, all funds held by it in the
Escrow Funds, after deduction and payment to Escrow Agent of all fees and
expenses (including court costs and attorneys’ fees) payable to, incurred by,
or expected to be incurred by Escrow Agent in connection with performance of
its duties and the exercise of its rights hereunder.

              iii. Escrow Agent shall have no liability to the Company, the Investor, or
any person with respect to any such suspension of performance or disbursement
into court, specifically including any liability or claimed liability that may
arise, or be alleged to have arisen, out of or as a result of any delay in the
disbursement of funds held in the Escrow Funds or any delay in with respect to
any other action required or requested of Escrow Agent.

     8. Investment of Escrow Funds. The Escrow Agent shall deposit the Escrow
Funds in a non-interest bearing money market account.

     If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent may retain the Escrow
Fund, or such portion thereof, as to which no Joint Written Direction has been
received, in a non-interest bearing money market account.

     9. Resignation and Removal of Escrow Agent. Escrow Agent may resign from
the performance of its duties hereunder at any time by giving thirty (30) days’
prior written notice to the parties or may be removed, with or without cause,
by the parties, acting jointly, by furnishing a Joint Written Direction to
Escrow Agent, at any time by the giving of ten (10) days’ prior written notice
to Escrow Agent as provided herein below. Upon any such notice of resignation
or removal, the representatives of the Investor and the Company identified in
Sections 13a.(iv)

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and 13b.(iv), below, jointly shall appoint a successor Escrow Agent
hereunder, which shall be a commercial bank, trust company or other financial
institution with a combined capital and surplus in excess of $10,000,000.00.
Upon the acceptance in writing of any appointment of Escrow Agent hereunder by
a successor Escrow Agent, such successor Escrow Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Escrow Agent, and the retiring Escrow Agent shall be discharged from
its duties and obligations under this Escrow Agreement, but shall not be
discharged from any liability for actions taken as Escrow Agent hereunder prior
to such succession. After any retiring Escrow Agent’s resignation or removal,
the provisions of this Escrow Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Escrow Agent under this
Escrow Agreement. The retiring Escrow Agent shall transmit all records
pertaining to the Escrow Funds and shall pay all funds held by it in the Escrow
Funds to the successor Escrow Agent, after making copies of such records as the
retiring Escrow Agent deems advisable and after deduction and payment to the
retiring Escrow Agent of all fees and expenses (including court costs and
attorneys’ fees) payable to, incurred by, or expected to be incurred by the
retiring Escrow Agent in connection with the performance of its duties and the
exercise of its rights hereunder.

     10. Liability of Escrow Agent.

            a. Escrow Agent shall have no liability or obligation with respect to the
Escrow Funds except for Escrow Agent’s willful misconduct or gross negligence.
Escrow Agent’s sole responsibility shall be for the safekeeping, investment,
and disbursement of the Escrow Funds in accordance with the terms of this
Agreement. Escrow Agent shall have no implied duties or obligations and shall
not be charged with knowledge or notice or any fact or circumstance not
specifically set forth herein. Escrow Agent may rely upon any instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein, which Escrow Agent
shall in good faith believe to be genuine, to have been signed or presented by
the person or parties purporting to sign the same and conform to the provisions
of this Agreement. In no event shall Escrow Agent be liable for incidental,
indirect, special, and consequential or punitive damages. Escrow Agent shall
not be obligated to take any legal action or commence any proceeding in
connection with the Escrow Funds, any account in which Escrow Funds are
deposited, this Agreement or the Standby Equity Distribution Agreement, or to
appear in, prosecute or defend any such legal action or proceeding. Escrow
Agent may consult legal counsel selected by it in the event of any dispute or
question as to construction of any of the provisions hereof or of any other
agreement or its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from
any liability whatsoever in acting in accordance with the opinion or
instructions of such counsel. The Company and the Investor jointly and
severally shall promptly pay, upon demand, the reasonable fees and expenses of
any such counsel and Escrow Agent is hereby authorized to pay such fees and
expenses from funds held in escrow.

            b. The Escrow Agent is hereby authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court’s
jurisdiction in the matter. If any portion of the Escrow Funds is at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property
shall be

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stayed or enjoined by any court order, or in any case any order judgment
or decree shall be made or entered by any court affecting such property or any
part thereof, then and in any such event, the Escrow Agent is authorized, in
its sole discretion, to rely upon and comply with any such order, writ judgment
or decree which it is advised by legal counsel selected by it, binding upon
it, without the need for appeal or other action; and if the Escrow Agent
complies with any such order, writ, judgment or decree, it shall not be liable
to any of the parties hereto or to any other person or entity by reason of such
compliance even though such order, writ judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.

     11. Indemnification of Escrow Agent. From and at all times after the date
of this Agreement, the parties jointly and severally, shall, to the fullest
extent permitted by law and to the extent provided herein, indemnify and hold
harmless Escrow Agent and each director, officer, employee, attorney, agent and
affiliate of Escrow Agent (collectively, the “Indemnified Parties”) against any
and all actions, claims (whether or not valid), losses, damages, liabilities,
costs and expenses of any kind or nature whatsoever (including without
limitation reasonable attorney’s fees, costs and expenses) incurred by or
asserted against any of the Indemnified Parties from and after the date hereof,
whether direct, indirect or consequential, as a result of or arising from or in
any way relating to any claim, demand, suit, action, or proceeding (including
any inquiry or investigation) by any person, including without limitation the
parties to this Agreement, whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any person under any statute or
regulation, including, but not limited to, any federal or state securities
laws, or under any common law or equitable cause or otherwise, arising from or
in connection with the negotiation, preparation, execution, performance or
failure of performance of this Agreement or any transaction contemplated
herein, whether or not any such Indemnified Party is a party to any such action
or proceeding, suit or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right to be
indemnified hereunder for liability finally determined by a court of competent
jurisdiction, subject to no further appeal, to have resulted solely from the
gross negligence or willful misconduct of such Indemnified Party. If any such
action or claim shall be brought or asserted against any Indemnified Party,
such Indemnified Party shall promptly notify the Company and the Investor
hereunder in writing, and the Company shall assume the defense thereof,
including the employment of counsel and the payment of all expenses. Such
Indemnified Party shall, in its sole discretion, have the right to employ
separate counsel (who may be selected by such Indemnified Party in its sole
discretion) in any such action and to participate and to participate in the
defense thereof, and the fees and expenses of such counsel shall be paid by
such Indemnified Party, except that the Investor and/or the Company shall be
required to pay such fees and expense if (a) the Investor or the Company agree
to pay such fees and expenses, or (b) the Investor and/or the Company shall
fail to assume the defense of such action or proceeding or shall fail, in the
sole discretion of such Indemnified Party, to employ counsel reasonably
satisfactory to the Indemnified Party in any such action or proceeding, (c) the
Investor and the Company are the plaintiff in any such action or proceeding or
(d) the named or potential parties to any such action or proceeding (including
any potentially impleaded parties) include both Indemnified Party the Company
and/or the Investor and Indemnified Party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the Company or the Investor.
The Investor and the Company shall be jointly and severally liable to pay fees
and expenses of counsel pursuant to the preceding sentence, except that any
obligation to pay under clause (a) shall apply only to the

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party so agreeing. All such fees and expenses payable by the Company
and/or the Investor pursuant to the foregoing sentence shall be paid from time
to time as incurred, both in advance of and after the final disposition of such
action or claim. The obligations of the parties under this section shall
survive any termination of this Agreement, and resignation or removal of the
Escrow Agent shall be independent of any obligation of Escrow Agent.

     12. Expenses of Escrow Agent. Except as set forth in Section 11 the
Company shall reimburse Escrow Agent for all of its reasonable out-of-pocket
expenses, including attorneys’ fees, travel expenses, telephone and facsimile
transmission costs, postage (including express mail and overnight delivery
charges), copying charges and the like as outlined in Section 12.4 of the
Standby Equity Distribution Agreement dated the date hereof. All of the
compensation and reimbursement obligations set forth in this Section shall be
payable by the Company, upon demand by Escrow Agent. The obligations of the
Company under this Section shall survive any termination of this Agreement and
the resignation or removal of Escrow Agent.

     13. Warranties.

            a. The Investor makes the following representations and warranties to the
Escrow Agent and Investor’s Counsel:

                i. The Investor has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.

                ii. This Agreement has been duly approved by all necessary action of the
Investor, including any necessary approval of the limited partner of the
Investor, has been executed by duly authorized officers of the Investor’s
general partner, enforceable in accordance with its terms.

                iii. The execution, delivery, and performance of the Investor of this
Agreement will not violate, conflict with, or cause a default under the
agreement of limited partnership of the Investor, any applicable law or
regulation, any court order or administrative ruling or degree to which the
Investor is a party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement.

                iv. Mark A. Angelo has been duly appointed to act as the representative of
Investor hereunder and has full power and authority to execute, deliver, and
perform this Agreement, to execute and deliver any Joint Written Direction, to
amend, modify, or waive any provision of this Agreement, and to take any and
all other actions as the Investor’s representative under this Agreement, all
without further consent or direction form, or notice to, the Investor or any
other party.

                v. No party other than the parties hereto have, or shall have, any lien,
claim or security interest in the Escrow Funds or any part thereof. No
financing statement under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing (whether
specifically or generally) the Escrow Funds or any part thereof.

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vi. All of the representations and warranties of the Investor contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.

            b. The Company makes the following representations and warranties to
Escrow Agent and, the Investor:

                i. The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, and has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.

                ii. This Agreement has been duly approved by all necessary corporate
action of the Company, including any necessary shareholder approval, has been
executed by duly authorized officers of the Company, enforceable in accordance
with its terms.

                iii. The execution, delivery, and performance by the Company of this
Escrow Agreement is in accordance with the Standby Equity Distribution
Agreement and will not violate, conflict with, or cause a default under the
certificate of incorporation or bylaws of the Company, any applicable law or
regulation, any court order or administrative ruling or decree to which the
Company is a party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement.

                iv. Jay O. Wright has been duly appointed to act as the representative of
the Company hereunder and has full power and authority to execute, deliver, and
perform this Agreement, to execute and deliver any Joint Written Direction, to
amend, modify or waive any provision of this Agreement and to take all other
actions as the Company’s Representative under this Agreement, all without
further consent or direction from, or notice to, the Company or any other
party.

                v. No party other than the parties hereto shall have, any lien, claim or
security interest in the Escrow Funds or any part thereof. No financing
statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or
generally) the Escrow Funds or any part thereof.

                vi. All of the representations and warranties of the Company contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.

     14. Consent to Jurisdiction and Venue. In the event that any party hereto
commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the District of New Jersey shall have the sole and exclusive jurisdiction over
any such proceeding. If all such courts lack federal subject matter
jurisdiction, the parties agree that the Superior Court Division of New Jersey,
Chancery Division of Hudson County shall have sole and exclusive jurisdiction.
Any of these courts shall be proper venue for any such lawsuit or judicial
proceeding and the parties hereto waive any objection to such venue. The
parties hereto consent to and agree to submit to the jurisdiction of any of the
courts specified herein and agree to accept the service of process to vest
personal jurisdiction over them in any of these courts.

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15. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered
five (5) days after deposit in the United States mail, by certified mail with
return receipt requested and postage prepaid, when delivered personally, one
(1) day delivery to any overnight courier, or when transmitted by facsimile
transmission and addressed to the party to be notified as follows:

	 	 	 
	If to Investor, to:

	 	Cornell Capital Partners, LP
	

	 	101 Hudson Street – Suite 3606
	

	 	Jersey City, New Jersey 07302
	

	 	Attention: Mark Angelo
	

	 	Facsimile: (201) 985-8266
	 
	 	 
	If to Escrow Agent, to:

	 	Butler Gonzalez LLP
	

	 	1416 Morris Avenue – Suite 207
	

	 	Union, New Jersey 07083
	

	 	Attention: David Gonzalez, Esq.
	

	 	Facsimile: (908) 810-0973
	 
	 	 
	If to Company, to:

	 	MobilePro Corp.
	

	 	6701 Democracy Boulevard
	

	 	Suite 300
	

	 	Bethesda, Maryland 20817
	

	 	Attention: Jay O. Wright
	

	 	President and Chief Executive Officer
	

	 	Telephone: (301) 524-4759
	

	 	Facsimile: (301) 315-9027
	 
	 	 
	With a copy to:

	 	Kirkpatrick & Lockhart LLP
	

	 	201 South Biscayne Boulevard – Suite 2000
	

	 	Miami, Florida 33131-2399
	

	 	Attention: Clayton E. Parker, Esq.
	

	 	Telephone: (305) 539-3300
	

	 	Facsimile: (305) 358-7095

     Or to such other address as each party may designate for itself by like
notice.

     16. Amendments or Waiver. This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties of the Escrow
Agent. No delay or omission by any party in exercising any right with respect
hereto shall operate as waiver. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future
occasion.

     17. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

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     18. Governing Law. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.

     19. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relating to the holding, investment, and disbursement of
the Escrow Funds and sets forth in their entirety the obligations and duties of
the Escrow Agent with respect to the Escrow Funds.

     20. Binding Effect. All of the terms of this Agreement, as amended from
time to time, shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Investor, the Company,
or the Escrow Agent.

     21. Execution of Counterparts. This Agreement and any Joint Written
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.

     22. Termination. Upon the first to occur of the termination of the Standby
Equity Distribution Agreement dated the date hereof or the disbursement of all
amounts in the Escrow Funds and Common Stock into court pursuant to Section 7
hereof, this Agreement shall terminate and Escrow Agent shall have no further
obligation or liability whatsoever with respect to this Agreement or the Escrow
Funds or Common Stock.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF the parties have hereunto set their hands and seals the
day and year above set forth.

	 	 	 	 	 
	 	MOBILEPRO CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	Jay O. Wright 	 
	 	 	Title:  	President & Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	CORNELL CAPITAL PARTNERS, LP

By: Yorkville Advisors, LLC
Its: General Partner

 	 
	 	By:  	 	 
	 	 	Name:  	Mark A. Angelo	 
	 	 	Title:  	Portfolio Manager	 
	 

	 	 	 	 	 
	 	BUTLER GONZALEZ LLP

 	 
	 	By:  	 	 
	 	 	Name:  	David Gonzalez, Esq. 	 
	 	 	Title:  	Partner 	 
	 

11<PAGE>

                                                                  EXHIBIT 4.2(c)

                             SUPPLEMENTAL INDENTURE

      SUPPLEMENTAL INDENTURE dated as of March 25, 2004, between CINEMARK USA,
INC., a Texas corporation (the "Company"), the subsidiaries of the Company
parties hereto (the "Guarantors") and THE BANK OF NEW YORK TRUST COMPANY, N.A.
(formerly known as The Bank of New York Trust Company of Florida, N.A. as
successor to U.S. Trust Company of Texas, N.A.), as trustee ("Trustee"), to the
Indenture, dated as of Januray 14, 1998 (as amended by the First Supplement
thereto, dated as of February 11, 2003, the "Indenture") among the Company, the
Guarantors and the Trustee.

      WHEREAS the Company and the Trustee have heretofore executed and delivered
to the Trustee the Indenture providing for the issuance of the Company's 8 1/2%
Series B Senior Subordinated Notes due 2008 (the "Notes");

      WHEREAS there are now outstanding under the Indenture Notes in the
aggregate principal amount of $105.0 million;

      WHEREAS Section 9.2 of the Indenture provides that the Company and the
Trustee may, with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding; (i) enter into a
supplemental indenture for the purpose of amending the Indenture or (ii) waive
compliance with certain provisions of the Indenture;

      WHEREAS, the Company has offered (the "Offer") to purchase for cash all of
the outstanding Notes upon the terms and subject to the conditions set forth in
the Offer to Purchase and Consent Solicitation Statement dated March 16, 2004,
as the same may be amended, supplemented or modified (the "Statement");

      WHEREAS, the Company has received and delivered to the Trustee the
requisite consents to effect the proposed amendments and waivers (the "Proposed
Amendments") under the Indenture;

      WHEREAS, the Company has been authorized by a resolution of its Board of
Directors to enter into this Supplemental Indenture; and

      WHEREAS, all other acts and proceedings required by law, by the Indenture
and by the certificate of incorporation and by-laws of the Company to make this
Supplemental Indenture a valid and binding agreement for the purposes expressed
herein, in accordance with its terms, have been duly done and performed;

      NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other good and valuable consideration the
receipt of which is hereby acknowledged, and for the equal and proportionate
benefit of the Holders of the Notes, the Company and the Trustee hereby agree as
follows:

<PAGE>

                                   ARTICLE I

                             AMENDMENTS TO INDENTURE

      Section 1.01 Amendments to Articles Four, Five and Six. Upon written
notification to the Trustee by the Company that it has accepted for purchase and
payment (the "Early Settlement Date") pursuant to the offer to purchase all of
the Notes validly tendered on or before 5:00 p.m., New York City time, on March
25, 2004 pursuant to the Statement and any amendments, modifications or
supplements thereto, then automatically (without further act by any person),
with respect to the Notes:

      (a)   the Company shall be released from its obligations under the
following sections of the Indenture: Section 4.3 (Provisions of Reports and
Other Information); Section 4.4 (Compliance Certificate); Section 4.5 (Taxes);
4.6 (Stay, Extension and Usury Laws); Section 4.7 (Limitation on Restricted
Payments); Section 4.8 (Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries); Section 4.9 (Limitation on Indebtedness);
Section 4.10 (Limitation on Asset Sales); Section 4.11 (Limitation on
Transactions with Affiliates); Section 4.12 (Limitation on Liens); Section 4.13
(Limitation on Layering Debt); Section 4.14 (Offer to Repurchase Upon Change of
Control); Section 4.15 (Corporate Existence); Section 4.16 (Covenant with
Respect to Cinemark International and its Subsidiaries); Section 4.18
(Additional Subsidiary Guarantors); Section 5.1 (Merger, Consolidation, or Sale
of Assets); Section 5.2 (Successor Company Substituted); and Section 12.6
(Additional Subsidiary Guarantees);

      (b)   failure to comply with the terms of any of the foregoing Sections of
the Indenture shall no longer constitute a default or an Event of Default under
the Indenture and shall no longer have any other consequence under the
Indenture;

      (c)   the occurrence of the events described in Sections 6.1(c), (d), (e),
(f) and (g) shall no longer constitute Events of Default; and

      (d)   all definitions set forth in Section 1.1 of the Indenture that
relate to defined terms used solely in covenants or sections deleted hereby are
deleted in their entirety.

                                   ARTICLE II

                                  MISCELLANEOUS

      Section 2.01 Instruments To Be Read Together. This Supplemental Indenture
is executed as and shall constitute an indenture supplemental to and in
implementation of the Indenture, and said Indenture and this Supplemental
Indenture shall henceforth be read together.

      Section 2.02 Confirmation. The Indenture as amended and supplemented by
this Supplemental Indenture is in all respects confirmed and preserved.

      Section 2.03 Terms Defined. Capitalized terms used in this Supplemental
Indenture and not otherwise defined herein shall have the meanings assigned to
such terms in the Indenture.

                                       2

<PAGE>

      Section 2.04 Trust Indenture Act Controls. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with another provision
that is required to be included in this Supplemental Indenture or the Indenture
by the Trust Indenture Act of 1939, as amended, as in force at the date that
this Supplemental Indenture is executed, the provisions required by said Act
shall control.

      Section 2.05 Headings. The headings of the Articles and Sections of this
Supplemental Indenture have been inserted for convenience of reference only, and
are not to be considered a part hereof and shall in no way modify or restrict
any of the terms and provisions hereof.

      Section 2.06 Governing Law. The laws of the State of New York shall govern
this Supplemental Indenture.

      Section 2.07 Counterparts. This Supplemental Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

      Section 2.08 Effectiveness; Termination. The provisions of this
Supplemental Indenture will take effect immediately upon its execution and
delivery by the Trustee in accordance with the provisions of Sections 9.2 and
9.6 of the Indenture; provided, that the amendments to the Indenture set forth
in Section 1.01 of this Supplemental Indenture shall become operative as
specified in Section 1.01 hereof. Prior to the Early Settlement Date, the
Company may terminate this Supplemental Indenture upon written notice to the
Trustee (it being understood that the Company, subsequent thereto, will enter
into a substitute supplemental indenture).

      Section 2.09 Acceptance by Trustee. The Trustee accepts the amendments to
the Indenture effected by this Supplemental Indenture and agrees to execute the
trusts created by the Indenture as hereby amended, but only upon the terms and
conditions set forth in the Indenture.

      Section 2.10 Responsibility of Trustee. The recitals contained herein
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture.

                                       3
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.

                                 CINEMARK USA, INC.
                                 SUNNYMEAD CINEMA CORP.
                                 CINEMARK MEXICO (USA), INC
                                 CINEMARK INVESTMENTS CORPORATION
                                 CINEMARK LEASING COMPANY
                                 GREELEY HOLDINGS, INC.
                                 CINEMARK PARTNERS I, INC.
                                 CINEMARK PROPERTIES, INC.
                                 MULTIPLEX SERVICES, INC.
                                 TRANS TEXAS CINEMA, INC.
                                 CINEMARK, L.L.C.

                                 By: /s/ Robert Copple
                                     ------------------------------------------
                                 Name:  Robert Copple
                                 Title: Senior Vice President

                                 CNMK INVESTMENTS, INC.
                                 MULTIPLEX PROPERTIES, INC.
                                 CNMK DELAWARE INVESTMENTS I, L.L.C.
                                 CNMK DELAWARE INVESTMENTS II, L.L.C.

                                 By: /s/ Andrew Panaccione
                                     ------------------------------------------
                                 Name:  Andrew Panaccione
                                 Title: Secretary

                                 CNMK DELAWARE INVESTMENT PROPERTIES, LTD.,
                                 by CNMK Delaware
                                 Investments I, L.L.C., its general partner

                                 By: /s/ Andrew Panaccione
                                     ------------------------------------------
                                 Name:  Andrew Panaccione
                                 Title: Secretary

                    [Signature Page - Supplemental Indenture]

<PAGE>

                                 LAREDO THEATRE, LTD.,
                                 by CNMK TEXAS PROPERTIES, LTD.,
                                 its general partner,

                                 by Sunnymead Cinema Corp., the general
                                 partner of CNMK Texas Properties, Ltd.,

                                 By: /s/ Robert Copple
                                     ------------------------------------------
                                 Name:  Robert Copple
                                 Title: Vice President

                                 CNMK TEXAS PROPERTIES, LTD.

                                 by Sunnymead Cinema Corp., its general partner,

                                 By: /s/ Robert Copple
                                     ------------------------------------------
                                 Name:  Robert Copple
                                 Title: Vice President

                        THE BANK OF NEW YORK TRUST  COMPANY,  N.A.
                        (as successor to The Bank of New York Trust Company
                         of Florida, N.A.), as Trustee

                                 By: /s/ Patrick T. Giordano
                                     ------------------------------------------
                                 Name:  Patrick T. Giordano
                                 Title: Vice President

                    [Signature Page - Supplemental Indenture]

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