Document:

Unassociated Document

     

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

     

    

     

    MOBILEPRO
      CORP.

     

    7.75%
      SECURED CONVERTIBLE DEBENTURE

     

    August
      28, 2006

     

    
      	
              No.
                MOBL-3-1

            	
              US$2,300,000

            

    

    

    This
      Convertible Debenture (the “Debenture”)
      is
      issued on August 28, 2006 (the “Closing Date”)
      by
MobilePro
      Corp.,
      a
      Delaware corporation (the “Company”),
      to
Cornell
      Capital Partners, LP (together
      with its permitted successors and assigns, the “Holder”)
      pursuant to exemptions from registration
      under
      the Securities Act of 1933, as amended.

     

    

    ARTICLE
      I.  

     

    Section
      1.01    Principal
      and Interest.
      For
      value
      received, the Company hereby promises to pay to the order of the Holder on
      January 31, 2008 (“Maturity
      Date”), in
      lawful money of the United States of America and in immediately available funds
      the principal sum of $2,300,000, together with interest on the unpaid principal
      of this Debenture at the rate of seven and three-quarters percent (7.75%)
      per year (compounded monthly) from the date of this Debenture until paid. All
      unpaid principal amount and accrued interest shall be due and payable to the
      Holder on the Maturity Date, except as otherwise set forth herein. The Company
      shall not effect any conversions of this Debenture and the Holder shall not
      have
      the right to convert any portion of this Debenture or receive shares of Common
      Stock as payment of interest hereunder to the extent that after giving effect
      to
      such conversion or receipt of such interest payment, the Holder, together with
      any affiliate thereof, would beneficially own in excess of 4.99% of the
      outstanding shares of the Common Stock after giving effect to such conversion
      (unless the Holder provides to the Company sixty-five (65) days prior written
      notice that this provision shall not apply). 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Section
      1.02    Payments.
      

     

    (a)    The
      Company shall make weekly scheduled payments (“Scheduled
      Payments”)
      consisting of at least $125,000 of principal, commencing with the first
      Scheduled Payment which shall be due and payable on January 2, 2007. Interest
      payments on the outstanding principal balance hereof shall be due and payable
      with the principal payment installments above. The Company shall have the right
      to make each Scheduled Payment in shares of Common Stock, which shares shall
      be
      valued at the lower of the Conversion Price then in effect or a price equal
      to a
      seven percent (7%) discount to the average of the two lowest daily volume
      weighted average prices of the Common Stock as quoted by Bloomberg, LP for
      the
      five (5) trading days immediately following the Scheduled Payment date (the
      “Payment
      Conversion Price”),
      provided
      that
      such shares are either (i) freely tradeable under Rule 144 of the Securities
      and
      Exchange Commission (the “Commission”),
      (ii)
      registered for sale under the Securities Act of 1933, or (iii) freely tradeable
      without restriction in the hands of the Holder. All payments in respect of
      the
      indebtedness evidenced hereby shall be made in collected funds (unless paid
      in
      shares of Common Stock) and shall be applied to principal, accrued interest
      and
      charges and expenses owing under or in connection with this Debenture in such
      order as the Holder elects, except that payments shall be applied to accrued
      interest before principal. Notwithstanding the foregoing, this Debenture shall
      become due and immediately payable, including all accrued but unpaid interest,
      upon an Event of Default (as defined in Section
      3.01
      hereof).
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a business day, such payment shall be made on the next succeeding business
      day. Time is of the essence of this Debenture. The Company shall be permitted
      to
      prepay any amounts owed under this Debenture if the price of the shares of
      the
      Company’s Common Stock is less than $0.275 per share and also may, at its
      option, increase any scheduled payment to $750,000 (payable in cash or Common
      Stock as set forth above) without incurring any penalties or fees. Nothing
      contained in this paragraph shall limit the amount that the Holder can convert
      at any time. 

     

    (b)    Procedures
      for Making Payments in Stock. If
      the
      Company elects to make a Scheduled Payment in shares of Common Stock, the
      Company shall provide the Holder with written notice of such election
      (“Notice”),
      on or
      before the Scheduled Payment date, which Notice shall be irrevocable. Once
      a
      Notice is delivered by the Company, the Company shall have an unconditional
      obligation to issue the shares of Common Stock corresponding to such Notice.
      Each Notice shall set forth the amount of such Scheduled Payment that the
      Company is electing to pay in shares of Common Stock, confirm that the all
      conditions to the Company’s right to make such Scheduled Payment in shares of
      Common Stock have been satisfied, and be signed by an officer of the Company.
      The Company shall issue the shares of Common Stock corresponding to each Notice
      within seven (7) days after such Notice. The Company acknowledges that the
      Holder may sell shares of the Company’s Common Stock corresponding with a
      particular Notice after the Notice is received by the Holder and that the Holder
      will suffer financial hardship if the shares corresponding to a Notice are
      not
      timely delivered. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Section
      1.03    Right
      of Redemption.
      

     

    (a)    Common
      Stock Trading At or Above Conversion Price.
      In the
      event that the Company’s common stock is trading at or above the Conversion
      Price, as adjusted in accordance with Section
      5.01
      hereof,
      the Company at its option shall have the right, with sixty (60) days advance
      written notice, to redeem a portion or all amounts outstanding under this
      Debenture prior to the Maturity Date, provided
      that
      at
      least the number of Conversion Shares representing all principal and accrued
      interest then due and payable by the Company pursuant to the Debenture are
      registered for sale under the Securities Act of 1933. The Company shall pay
      an
      amount equal to the principal amount being redeemed plus a redemption premium
      equal to twenty percent (20%) of the principal amount being redeemed, and
      accrued interest (collectively referred to as the “In
      the
      Money Redemption Amount”).
      The
      Company shall deliver to the Holder the In the Money Redemption Amount within
      three (3) business days after expiration of the sixty-day notice requirement.
      

     

    In
      the
      event the Company exercises a redemption of either all or a portion of the
      outstanding principal amounts plus accrued interest due and outstanding under
      this debenture as outlined in this Section 1.03(a), the Holder shall receive
      a
      warrant to purchase an amount of shares equal to one-third of the principal
      amount redeemed divided by the Conversion Price. Such warrant shall be
      exercisable on a “cash basis” at the Conversion Price, shall have “piggy-back”
and demand registration rights, and shall survive for a period of the shorter
      of
      five (5) years from the Closing Date or eighteen (18) months after underlying
      shares are registered for sale under the Securities Act of 1933 or are freely
      tradeable without restriction in the hands of the Holder.

     

    In
      the
      event that the Company redeems a portion of the amount outstanding under this
      Debenture pursuant to this Section 1.03(a), the Company shall be entitled to
      an
      off-set of the amount of principal and accrued interest due pursuant to the
      Scheduled Payment equal to the amount of principal and accrued interest redeemed
      or converted (the “In
      the
      Money Off-Set Amount”).
      In
      such event the Company shall still be obligated to make a Scheduled Payment
      reduced by the In the Money Off-Set Amount as contemplated by this Section
      1.03(a).

     

    Notwithstanding
      the foregoing, in the event that the Company has elected to redeem a portion
      of
      the outstanding principal amount and accrued interest under this Debenture
      pursuant to this Section 1.03(a), the Holder shall be permitted to convert
      all
      or any portion of this Debenture during such sixty day period. 

     

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

     

    In
      the
      event that the Company elects to exercise its redemption rights under this
      Section 1.03(b), it shall pay a redemption premium to the Holder. The Holder
      shall have the option, upon five (5) days written notice to elect to receive
      an
      amount equal to the principal amount being redeemed plus a redemption premium
      equal to ten percent (10%) of the principal amount being redeemed, and accrued
      interest (the “Out
      of
      the Money Redemption Amount”);
      or
      the principal amount being redeemed plus a warrant to purchase an amount of
      shares equal to one-third of the principal amount redeemed divided by the
      Conversion Price. Such warrant shall be in the form of the warrants issued
      in
      connection with the Securities Purchase Agreement and shall survive for a period
      of the shorter of five (5) years from the Closing Date or the years from the
      date issued. The Company shall deliver to the Holder the Out of the Money
      Redemption Amount, or the principal amount redeemed plus warrant, within three
      (3) business days after expiration of the fifteen-day notice requirement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that the Company redeems a portion of the amount outstanding under this
      Debenture pursuant to this Section 1.03(b), the Company shall be entitled to
      an
      off-set of the amount of principal and accrued interest due pursuant to the
      Scheduled Payment equal to the amount of principal and accrued interest redeemed
      or converted (the “Out of the Money Off-Set
      Amount”).
      In
      such event the Company shall still be obligated to make a Scheduled Payment
      reduced by the Out of the Money Off-Set Amount as contemplated under this
      Section 1.03(b).

     

    Notwithstanding
      the foregoing, in the event that the Company has elected to redeem a portion
      of
      the outstanding principal amount and accrued interest under this Debenture
      pursuant to this Section 1.03(b), the Holder shall be permitted to convert
      all
      or any portion of this Debenture during such fifteen day period. 

     

    Section
      1.04    Conversion.
      The
      Holder is entitled, at its option, to convert, and sell on the same day, at
      any
      time and from time to time, until payment in full of this Debenture, all or
      any
      part of the principal amount of the Debenture, plus accrued interest, into
      shares (the “Conversion
      Shares”)
      of the
      Company’s common stock, par value $0.001 per share (“Common
      Stock”),
      at
      the price per share equal to $0.174 (the “Conversion
      Price”),
      as
      may be adjusted in accordance with Section
      5.01
      hereof.
      No fraction of shares or scrip representing fractions of shares will be issued
      on conversion, but the number of shares issuable shall be rounded to the nearest
      whole share. To convert this Debenture, the Holder hereof shall deliver written
      notice thereof, substantially in the form of Exhibit A to this Debenture,
      with appropriate insertions (the “Conversion
      Notice”),
      to
      the Company at its address as set forth herein. The date upon which the
      conversion shall be effective (the “Conversion
      Date”)
      shall
      be deemed to be the date set forth in the Conversion Notice. Any conversion
      under this Debenture of all or any part of the principal amount of the
      Debenture, plus accrued interest, shall be credited to the next scheduled
      payment of principal and interest under Section
      1.02
      hereof,
      and if such next scheduled payment of principal and interest is paid in full
      and
      an additional sum is available, then such excess shall be applied to future
      scheduled payments of principal and interest under Section
      1.02
      hereof.

     

    Reservation
      of Common Stock.
      The
      Company shall reserve for issuance to the Holder 140,000,000 shares for issuance
      upon conversions or redemptions of the Debenture (the “Share
      Reserve”).
      The
      Company represents that it has sufficient authorized and unissued shares of
      Common Stock available to create the Share Reserve after considering all other
      commitments that may require the issuance of Common Stock. The Company shall
      take all action reasonably necessary to at all times have authorized, and
      reserved for the purpose of issuance, such number of shares of Common Stock
      as
      shall be necessary to effect the full conversion or redemption of the Debenture.
      If at any time the Share Reserve is insufficient to effect the full conversion
      or redemption of the Convertible or the full exercise of the Warrants, the
      Company shall increase the Share Reserve accordingly. If the Company does not
      have sufficient authorized and unissued shares of Common Stock available to
      increase the Share Reserve, the Company shall call and hold a special meeting
      of
      the shareholders within thirty (30) days of such occurrence, for the sole
      purpose of increasing the number of shares authorized. The Company’s management
      shall recommend to the shareholders to vote in favor of increasing the number
      of
      shares of Common Stock authorized. Management shall also vote all of its shares
      in favor of increasing the number of authorized shares of Common
      Stock.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

    Section
      1.06    Interest
      Payments.
      The
      interest payable under this Debenture will be paid at the time of maturity,
      conversion, or as otherwise set forth herein to the person in whose name this
      Debenture is registered. Interest shall be paid in cash when due, or at the
      time
      such interest is payable, the Company, in its sole discretion, may elect to
      pay
      the interest in shares of Common Stock, provided such shares are freely
      tradeable by the Holder. If interest is paid in shares of Common Stock, such
      shares shall be issued at the rate as the Payment Conversion Price at the time
      paid. No fractional shares will be issued; therefore, in the event that the
      value of the Common Stock per share does not equal the total interest due,
      the
      Company will pay the balance in cash.

     

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

     

     

    ARTICLE
      II. 

     

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

     

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

     

    Section
      2.03    Transaction
      Documents.
      “Transaction
      Documents”,
      wherever used herein, means any one of the following items: Securities Purchase
      Agreement dated August ___, 2006 between the Company and the Holder, this
      Debenture, the Initial Security, the Investor Registration Rights Agreement
      dated August ___, 2006 between the Company and the Holder, the Warrants issued
      in connection with the Securities Purchase Agreement, the Security Documents
      (as
      defined in Section
      2.02),
      the
      Guaranty Agreement dated May 13, 2005 herewith and all other instruments,
      documents, contracts, agreements, promissory notes and evidences of indebtedness
      now or hereafter existing between the Company and/or its subsidiaries and the
      Holder, whether or not related to the indebtedness evidenced by this
      Debenture.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III.

     

    Section
      3.01    Events
      of Default and Remedies.
      

     

    (a)    An
      “Event
      of Default”,
      wherever used herein, means any one of the following events (whatever the reason
      and whether it shall be voluntary or involuntary or effected by operation of
      law
      or pursuant to any judgment, decree or order of any court, or any order, rule
      or
      regulation of any administrative or governmental body):

     

    (i)    Any
      default in the payment of the principal of, interest on or other charges in
      respect of this Debenture, free of any claim of subordination, as and when
      the
      same shall become due and payable (whether on Interest Payment Date, Principal
      Payment Date, a Conversion Date, upon redemption, or the Maturity Date or by
      acceleration or otherwise (collectively, the “Payment
      Date”))
      which
      is not cured within 15 days of the applicable Payment Date;

     

    (ii)    The
      Company shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Debenture (except as may be specifically covered by
Section
      3.01(a)
      hereof)
      which is not cured by the Holder within 15 days of the Holder delivering written
      notice to the Company specifying the failure, breach or default or any
      Transaction Document (as defined in Section
      2.03)
      which
      is not cured within the time prescribed therein, if any;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iii)    The
      Company or any subsidiary of the Company shall commence, or there shall be
      commenced against the Company or any subsidiary of the Company under any
      applicable bankruptcy or insolvency laws as now or hereafter in effect or any
      successor thereto, or the Company or any subsidiary of the Company commences
      any
      other proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law of
      any
      jurisdiction whether now or hereafter in effect relating to the Company or
      any
      subsidiary of the Company or there is commenced against the Company or any
      subsidiary of the Company any such bankruptcy, insolvency or other proceeding
      which remains undismissed for a period of 61 days; or the Company or any
      subsidiary of the Company is adjudicated insolvent or bankrupt; or any order
      of
      relief or other order approving any such case or proceeding is entered; or
      the
      Company or any subsidiary of the Company suffers any appointment of any
      custodian, private or court appointed receiver or the like for it or any
      substantial part of its property which continues undischarged or unstayed for
      a
      period of sixty one (61) days; or the Company or any subsidiary of the Company
      makes a general assignment for the benefit of creditors; or the Company or
      any
      subsidiary of the Company shall fail to pay, or shall state that it is unable
      to
      pay, or shall be unable to pay, its debts generally as they become due; or
      the
      Company or any subsidiary of the Company shall call a meeting of its creditors
      with a view to arranging a composition, adjustment or restructuring of its
      debts; or the Company or any subsidiary of the Company shall by any act or
      failure to act expressly indicate its consent to, approval of or acquiescence
      in
      any of the foregoing; or any corporate or other action is taken by the Company
      or any subsidiary of the Company for the purpose of effecting any of the
      foregoing;

     

    (iv)    The
      Company or any subsidiary of the Company shall default in any of its obligations
      under any other debenture or any mortgage, credit agreement or other facility,
      indenture agreement, factoring agreement or other instrument under which there
      may be issued, or by which there may be secured or evidenced any indebtedness
      for borrowed money or money due under any long term leasing or factoring
      arrangement of the Company or any subsidiary of the Company in an amount
      exceeding $250,000, whether such indebtedness now exists or shall hereafter
      be
      created and such default shall result in such indebtedness becoming or being
      declared due and payable prior to the date on which it would otherwise become
      due and payable;

     

    (v)    The
      Common Stock shall cease to be quoted for trading or listed for trading on
      the
      Nasdaq OTC Bulletin Board (“OTC”),
      Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or
      the
      Nasdaq National Market (each, a “Subsequent
      Market”)
      and
      shall not again be quoted or listed for trading thereon within five (5) Trading
      Days of such delisting; or

     

    (vi)    The
      Company shall fail for any reason to deliver Common Stock certificates to a
      Holder prior to the fifth (5th)
      Trading
      Day after a Conversion Date, or prior to the seventh (7th)
      Trading
      Day after a Scheduled Payment due date, or the Company shall provide notice
      to
      the Holder, including by way of public announcement, at any time, of its
      intention not to comply with requests for conversions of this Debenture in
      accordance with the terms hereof. The Company acknowledges that failure to
      honor
      a Conversion shall cause irreparable harm to the Holder.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

    

    

    ARTICLE
      IV. 

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

     

    ARTICLE
      V.

     

    Section
      5.01    Section
      5.01Anti-dilution.
      Adjustment
      of Conversion Price.
      The
      Conversion Price shall be adjusted from time to time as follows:

     

    (a)    Adjustment
      of Conversion Price upon Issuance of Common Stock.
      If and
      whenever on or after the Closing Date of this Debenture, the Company issues
      or
      sells, or is deemed to have issued or sold, any shares of Common
      Stock (other than Excluded Securities as defined herein) for a
      consideration per share less than a price (the “Applicable
      Price”)
      equal
      to the Conversion Price in effect immediately prior to such issuance or sale,
      then immediately after such issue or sale the Conversion Price then in effect
      shall be reduced to an amount equal to such consideration per share, provided
      that in no event shall the Conversion Price be reduced below $0.001.

     

    (b)    Effect
      on Conversion Price of Certain Events.
      For
      purposes of determining the adjusted Conversion Price under Section 5.01(a)
      above, the following shall be applicable:

     

    (i)    Issuance
      of Options.
      If
      after the date hereof, the Company in any manner grants any rights, warrants
      or
      options to subscribe for or purchase Common Stock or convertible securities
      (“Options”)
      and the lowest price per share for which one share of Common Stock is issuable
      upon the exercise of any such Option or upon conversion or exchange of any
      convertible securities issuable upon exercise of any such Option is less than
      the Conversion Price then in effect, then such share of Common Stock shall
      be
      deemed to be outstanding and to have been issued and sold by the Company at
      the
      time of the granting or sale of such Option for such price per share. For
      purposes of this Section 5.01(b)(i), the lowest price per share for which one
      share of Common Stock is issuable upon exercise of such Options or upon
      conversion or exchange of such convertible securities shall be equal to the
      sum
      of the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon the granting or
      sale
      of the Option, upon exercise of the Option or upon conversion or exchange of
      any
      other convertible security other than this Debenture issuable upon exercise
      of
      such Option. No further adjustment of the Conversion Price shall be made upon
      the actual issuance of such Common Stock or of such convertible securities
      upon
      the exercise of such Options or upon the actual issuance of such Common Stock
      upon conversion or exchange of such convertible securities.

     

    (ii)    Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any convertible securities after the
      Closing Date and the lowest price per share for which one share of Common Stock
      is issuable upon the conversion or exchange thereof is less than the Conversion
      Price then in effect, then such share of Common Stock shall be deemed to be
      outstanding and to have been issued and sold by the Company at the time of
      the
      issuance or sale of such convertible securities for such price per share. For
      the purposes of this Section 5.01(b)(ii), the lowest price per share for
      which one share of Common Stock is issuable upon such conversion or exchange
      shall be equal to the sum of the lowest amounts of consideration (if any)
      received or receivable by the Company with respect to one share of Common Stock
      upon the issuance or sale of the convertible security and upon conversion or
      exchange of such convertible security. No further adjustment of the Conversion
      Price shall be made upon the actual issuance of such Common Stock upon
      conversion or exchange of such convertible securities, and if any such issue
      or
      sale of such convertible securities is made upon exercise of any Options for
      which adjustment of the Conversion Price had been or are to be made pursuant
      to
      other provisions of this Section 5.01(b), no further adjustment of the
      Conversion Price shall be made by reason of such issue or sale. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (iii)    Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion or exchange of any convertible
      securities, or the rate at which any convertible securities are convertible
      into
      or exchangeable for Common Stock changes at any time, the Conversion Price
      in
      effect at the time of such change shall be adjusted to the Conversion Price
      which would have been in effect at such time had such Options or convertible
      securities provided for such changed purchase price, additional consideration
      or
      changed conversion rate, as the case may be, at the time initially granted,
      issued or sold and the number of shares of Common Stock issuable upon conversion
      of this Debenture shall be correspondingly readjusted. For purposes of this
      Section 5.01(b)(iii), if the terms of any Option or convertible security that
      was outstanding as of the Closing Date of this Debenture are changed in the
      manner described in the immediately preceding sentence, then such Option or
      convertible security and the Common Stock deemed issuable upon exercise,
      conversion or exchange thereof shall be deemed to have been issued as of the
      date of such change. No adjustment pursuant to this Section 5.01(b) shall
      be made if such adjustment would result in an increase of the Conversion Price
      then in effect. 

     

    (c)    Effect
      on Conversion Price of Certain Events.
      For
      purposes of determining the adjusted Conversion Price under
      Sections 5.01(a) and 5.01(b), the following shall be applicable:

     

    (i)    Calculation
      of Consideration Received.
      If any
      Common Stock, Options or convertible securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefore will
      be
      deemed to be the net amount received by the Company therefore. If any Common
      Stock, Options or convertible securities are issued or sold for a consideration
      other than cash, the amount of such consideration received by the Company will
      be the fair value of such consideration, except where such consideration
      consists of marketable securities, in which case the amount of consideration
      received by the Company will be the market price of such securities on the
      date
      of receipt of such securities. If any Common Stock, Options or convertible
      securities are issued to the owners of the non-surviving entity in connection
      with any merger in which the Company is the surviving entity, the amount of
      consideration therefore will be deemed to be the fair value of such portion
      of
      the net assets and business of the non-surviving entity as is attributable
      to
      such Common Stock, Options or convertible securities, as the case may be. The
      fair value of any consideration other than cash or securities will be determined
      jointly by the Company and the holders of the Debenture representing at least
      two-thirds of the shares of Common Stock issuable upon conversion of the
      Debenture then outstanding. If such parties are unable to reach agreement within
      ten (10) days after the occurrence of an event requiring valuation (the
“Valuation
      Event”),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the holders of the Debenture representing at least
      two-thirds of the shares of Common Stock issuable upon conversion of the
      Debenture then outstanding. The determination of such appraiser shall be final
      and binding upon all parties and the fees and expenses of such appraiser shall
      be borne by the Company.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (ii)    Integrated
      Transactions.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for a consideration of $0.01. 

     

    (iii)    Treasury
      Shares.
      The
      number of shares of Common Stock outstanding at any given time does not include
      shares owned or held by or for the account of the Company, and the disposition
      of any shares so owned or held will be considered an issue or sale of Common
      Stock. 

     

    (iv)    Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (1) to receive a dividend or other distribution payable in
      Common Stock, Options or in convertible securities or (2) to subscribe for
      or purchase Common Stock, Options or convertible securities, then such record
      date will be deemed to be the date of the issue or sale of the shares of Common
      Stock deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution or the date of the granting of such
      right of subscription or purchase, as the case may be. 

     

    (d)    Adjustment
      of Conversion Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Debenture subdivides
      (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Conversion Price in effect immediately prior to such subdivision
      will be proportionately reduced. If the Company at any time after the date
      of
      issuance of this Debenture combines (by combination, reverse stock split or
      otherwise) one or more classes of its outstanding shares of Common Stock into
      a
      smaller number of shares, any Conversion Price in effect immediately prior
      to
      such combination will be proportionately increased. Any adjustment under this
      Section 5.01(d) shall become effective at the close of business on the date
      the subdivision or combination becomes effective. 

     

    (e)    Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Debenture, then, in each such case any
      Conversion Price in effect immediately prior to the close of business on the
      record date fixed for the determination of holders of Common Stock entitled
      to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Conversion Price
      by a fraction of which (A) the numerator shall be the closing bid price of
      the
      Common Stock on the trading day immediately preceding such record date minus
      the
      value of the Distribution (as determined in good faith by the Company’s Board of
      Directors) applicable to one share of Common Stock, and (B) the denominator
      shall be the closing bid price of the Common Stock on the trading day
      immediately preceding such record date; and

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (f)    Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this
      Section 5.01 but not expressly provided for by such provisions (including,
      without limitation, the granting of stock appreciation rights, phantom stock
      rights or other rights with equity features), then the Company’s Board of
      Directors will make an appropriate adjustment in the Conversion Price so as
      to
      protect the rights of the holders of the Debenture; provided, except as set
      forth in Section 5.01(d), that no such adjustment pursuant to this Section
      5.01(f) will increase the Conversion Price as otherwise determined pursuant to
      this Section 5.01.

     

    (g)    Notices.

     

    (i)    Immediately
      upon any adjustment of the Conversion Price, the Company will give written
      notice thereof to the holder of this Debenture, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    (ii)    The
      Company will give written notice to the holder of this Debenture at least ten
      (10) days prior to the date on which the Company closes its books or takes
      a
      record (A) with respect to any dividend or distribution upon the Common
      Stock, (B) with respect to any pro rata subscription offer to holders of
      Common Stock or (C) for determining rights to vote with respect to any
      dissolution or liquidation, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

     

    (h)    Definitions.

     

    (i)    “Approved
      Stock Plan”
means
      any employee benefit plan which has been approved by the Board of Directors
      of
      the Company, pursuant to which the Company’s securities may be issued to any
      employee, officer or director for services provided to the Company.

     

    (ii)    “Excluded
      Securities”
means,
      (a) shares issued or deemed to have been issued by the Company pursuant to
      an
      Approved Stock Plan (b) shares of Common Stock issued or deemed to be issued
      by
      the Company upon the conversion, exchange or exercise of any right, option,
      obligation or security outstanding on the date prior to date of the Securities
      Purchase Agreement, provided that the terms of such right, option, obligation
      or
      security are not amended or otherwise modified on or after the date of the
      Securities Purchase Agreement, and provided that the conversion price, exchange
      price, exercise price or other purchase price is not reduced, adjusted or
      otherwise modified and the number of shares of Common Stock issued or issuable
      is not increased (whether by operation of, or in accordance with, the relevant
      governing documents or otherwise) on or after the date of the Securities
      Purchase Agreement, and (c) the shares of Common Stock issued or deemed to
      be issued by the Company upon conversion of this Debenture.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Nothing
      in this Section 5.01 shall be deemed to authorize the issuance of any securities
      by the Company in violation of Section 5.02.

     

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

     

     

    ARTICLE
      VI.

     

    Section
      6.01    Notice.
      Notices
      regarding this Debenture shall be sent to the parties at the following
      addresses, unless a party notifies the other parties, in writing, of a change
      of
      address:

     

    
      	
              If
                to the Company, to:

            	
              Mobilepro
                Corp.

            
	 	
              6701
                Democracy Blvd., Suite 202

            
	 	
              Bethesda,
                MD 20817

            
	 	
              Attention:
                Jay Wright, Chairman and Chief Executive Officer

            
	 	
              Telephone:
                (301) 315-9040

            
	 	
              Facsimile:
                (301) 315-9027

            
	 	 
	 	 
	
              With
                a copy to:

            	
              Seyfarth
                Shaw LLP

            
	 	
              815
                Connecticut Avenue, NW, Suite 500

            
	 	
              Washington,
                DC 20006-4004

            
	 	
              Attention: Ernest
                M. Stern, Esquire

            
	 	
              Telephone: (202)
                828-5360 

            
	 	
              Facsimile: (202)
                828-5393 

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to the Holder:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07303

            
	 	
              Attention: Mark
                Angelo, President

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	
              With
                a copy to:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention: Troy
                J. Rillo, Esq.

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	 	 

    

    

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

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

    

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

     

    
      	 	 	 
	 	
              MOBILEPRO
                CORP.

            
	 
 	 
 	 
 
	 	By:  	/s/
              Jay Wright
	 	
              

              Name: Jay
                Wright

            
	 	
              Title: Chairman
                and CEO

            

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    NOTICE
      OF CONVERSION

     

    (To
      be executed by the Holder in order to Convert the
      Debenture)

     

    TO:

     

    The
      undersigned hereby irrevocably elects to convert $___________ of
      the
      principal amount of Debenture No. MOBL-3-1 into Shares of Common Stock of
MOBILEPRO
      CORP.,
      according to the conditions stated therein, as of the Conversion Date written
      below.

     

    
      	
              Conversion
                Date:

            	 	 
	
              Amount
                to be converted:

            	$ 	
                      

            
	
              Conversion
                Price:

            	$ 	
                      

            
	
              Number
                of shares of Common
Stock to be issued:

            	 	 
	
              Amount
                of Debenture

              Unconverted:

            	$ 	
                        

            

    

     

     

    
      Please
        issue the shares of Common Stock in the following name and to the following
        address:

    

    
      Issue
        to:
 

    
      	
              Authorized
                Signature:

            	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 
	
              Broker
                DTC Participant Code:

            	 	 
	
              Account
                Number:

            	 	 

    

    

    
      
        
        

      

      16Unassociated Document

     

     

    WARRANT

     

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT 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 FORM REASONABLY
      SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
      WITH A BONA FIDE MARGIN ACCOUNT.

     

     

    MOBILEPRO
      CORP.

     

    Warrant
      To Purchase Common Stock

     

     

    
      	Warrant No.: MOBL-3-1 	Number of Shares: 	3,333,334 
	 	Warrant Exercise Price: 	$0.174 

    

       

    Date
      of
      Issuance: August 28, 2006

    

    MobilePro
      Corp., a Delaware corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, Cornell
      Capital Partners, LP
      (the
“Holder”),
      the
      registered holder hereof or its permitted assigns, is entitled, subject to
      the
      terms set forth below, to purchase from the Company upon surrender of this
      Warrant, at any time or times on or after the date hereof, but not after
      11:59 P.M. Eastern Time on the Expiration Date (as defined herein)
3,333,334
      fully
      paid and nonassessable shares of Common Stock (as defined herein) of the Company
      (the “Warrant
      Shares”)
      at the
      exercise price per share provided in Section 1(b) below or as subsequently
      adjusted; provided, however, that in no event shall the holder be entitled
      to
      exercise this Warrant for a number of Warrant Shares in excess of that number
      of
      Warrant Shares which, upon giving effect to such exercise, would cause the
      aggregate number of shares of Common Stock beneficially owned by the holder
      and
      its affiliates to exceed 4.99% of the outstanding shares of the Common Stock
      following such exercise, except within sixty (60) days of the Expiration Date
      (however, such restriction may be waived by Holder (but only as to itself and
      not to any other holder) upon not less than 65 days prior notice to the
      Company). For purposes of the foregoing proviso, the aggregate number of shares
      of Common Stock beneficially owned by the holder and its affiliates shall
      include the number of shares of Common Stock issuable upon exercise of this
      Warrant with respect to which the determination of such proviso is being made,
      but shall exclude shares of Common Stock which would be issuable upon
      (i) exercise of the remaining, unexercised Warrants beneficially owned by
      the holder and its affiliates and (ii) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      beneficially owned by the holder and its affiliates (including, without
      limitation, any convertible notes or preferred stock) subject to a limitation
      on
      conversion or exercise analogous to the limitation contained herein. Except
      as
      set forth in the preceding sentence, for purposes of this paragraph, beneficial
      ownership shall be calculated in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
      the number of outstanding shares of Common Stock a holder may rely on the number
      of outstanding shares of Common Stock as reflected in (1) the Company’s most
      recent Form 10-QSB or Form 10-KSB, as the case may be, (2) a more recent public
      announcement by the Company or (3) any other notice by the Company or its
      transfer agent setting forth the number of shares of Common Stock outstanding.
      Upon the written request of any holder, the Company shall promptly, but in
      no
      event later than one (1) Business Day following the receipt of such notice,
      confirm in writing to any such holder the number of shares of Common Stock
      then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall
      be determined after giving effect to the exercise of Warrants (as defined below)
      by such holder and its affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Section
      1.  

     

    (a)    This
      Warrant is the common stock purchase warrant (the “Warrant”)
      issued
      pursuant to the Securities Purchase Agreement (“Securities
      Purchase Agreement”)
      dated
      August ___, 2006 between the Company and the Holder.

     

    (b)    Definitions.
      The
      following words and terms as used in this Warrant shall have the following
      meanings:

     

    (i)    “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of New York are authorized or required by law to remain
      closed.

     

    (ii)    “Closing
      Bid Price”
means
      the closing bid price of Common Stock as quoted on the Principal Market (as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      through its “Volume at Price” function).

     

    (iii)    “Common
      Stock”
means
      (i) the Company’s common stock, par value $0.001 per share, and
      (ii) any capital stock into which such Common Stock shall have been changed
      or any capital stock resulting from a reclassification of such Common
      Stock.

     

    (iv)    “Event
      of Default”
means
      an event of default under the Securities Purchase Agreement or the Convertible
      Debentures issued in connection therewith.

     

    (v)    “Excluded
      Securities”
means,
      (a) shares of Common Stock issued in connection with any employee benefit plan
      which has been approved by the Board of Directors of the Company, pursuant
      to
      which the Company’s securities may be issued to any employee, officer or
      director for services provided to the Company, (b) provided such security is
      issued at a price which is greater than or equal to the arithmetic average
      of
      the Closing Bid Prices of the Common Stock for the ten (10) consecutive trading
      days immediately preceding the date of issuance, any of the following: (i)
      any
      issuance by the Company of securities in connection with a strategic partnership
      or a joint venture (the primary purpose of which is not to raise equity
      capital), or (ii) any issuance by the Company of securities as consideration
      for
      a merger or consolidation or the acquisition of a business, product, license,
      or
      other assets of another person or entity, (c) those options and warrants of
      the Company issued prior to, and outstanding on, the Issuance Date of this
      Warrant, (d) the shares of Common Stock issuable on exercise of such options
      and
      warrants, provided such options and warrants are not amended after the Issuance
      Date of this Warrant and (e) the shares of Common Stock issuable upon
      exercise of this Warrant or the Convertible Debentures.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (vi)    “Expiration
      Date”
means
      August ___, 2011.

     

    (vii)    “Issuance
      Date”
means
      the date hereof.

     

    (viii)    “Options”
means
      any rights, warrants or options to subscribe for or purchase Common Stock or
      Convertible Securities. 

     

    (ix)    “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

     

    (x)    “Principal
      Market”
means
      the New York Stock Exchange, the American Stock Exchange, the Nasdaq National
      Market, the Nasdaq SmallCap Market, whichever is at the time the principal
      trading exchange or market for such security, or the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg or,
      if
      no bid or sale information is reported for such security by Bloomberg, then
      the
      average of the bid prices of each of the market makers for such security as
      reported in the “pink sheets” by the National Quotation Bureau,
      Inc.

     

    (xi)    “Securities
      Act”
means
      the Securities Act of 1933, as amended. 

     

    (xii)    “Warrant”
means
      this Warrant and all Warrants issued in exchange, transfer or replacement
      thereof. 

     

    (xiii)    “Warrant
      Exercise Price”
shall
      be $0.174 or as subsequently adjusted as provided in Section 8 hereof.

     

    (xiv)    “Warrant
      Shares”
means
      the shares of Common Stock issuable at any time upon exercise of this Warrant.
      

     

    (c)    Other
      Definitional Provisions. 

     

    (i)    Except
      as
      otherwise specified herein, all references herein (A) to the Company shall
      be deemed to include the Company’s successors and (B) to any applicable law
      defined or referred to herein shall be deemed references to such applicable
      law
      as the same may have been or may be amended or supplemented from time to time.
      

     

    (ii)    When
      used
      in this Warrant, the words “herein”,
      “hereof”,
      and
“hereunder”
      and
      words of similar import, shall refer to this Warrant as a whole and not to
      any
      provision of this Warrant, and the words “Section”,
      “Schedule”,
      and
“Exhibit”
shall
      refer to Sections of, and Schedules and Exhibits to, this Warrant unless
      otherwise specified. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (iii)    Whenever
      the context so requires, the neuter gender includes the masculine or feminine,
      and the singular number includes the plural, and vice versa. 

     

    Section
      2.    Exercise
      of Warrant.
      

     

    (a)    Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of
      a written notice, in the form of the subscription notice attached as
Exhibit
      A
      hereto
      (the “Exercise
      Notice”),
      of
      such holder’s election to exercise this Warrant, which notice shall specify the
      number of Warrant Shares to be purchased, payment to the Company of an
      amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares
      being purchased, multiplied by the number of Warrant Shares (at the
      applicable Warrant Exercise Price) as to which this Warrant is being
      exercised (plus any applicable issue or transfer taxes) (the “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds and the surrender of this
      Warrant (or an indemnification undertaking with respect to this Warrant in
      the
      case of its loss, theft or destruction) to a common carrier for overnight
      delivery to the Company as soon as practicable following such date
      (“Cash
      Basis”).
      

     

    In
      the
      event of any exercise of the rights represented by this Warrant in compliance
      with this Section 2, the Company shall on or before the fifth (5th)
      Business Day following the date of receipt of the Exercise Notice, the Aggregate
      Exercise Price and this Warrant (or an indemnification undertaking with respect
      to this Warrant in the case of its loss, theft or destruction) and the receipt
      of the representations of the holder specified in Section 6 hereof, if requested
      by the Company (the “Exercise
      Delivery Documents”),
      and
      if the Common Stock is DTC eligible, credit such aggregate number of shares
      of
      Common Stock to which the holder shall be entitled to the holder’s or its
      designee’s balance account with The Depository Trust Company; provided, however,
      if the holder who submitted the Exercise Notice requested physical delivery
      of
      any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
      then the Company shall, on or before the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
      Exercise Price referred to above the holder of this Warrant shall be deemed
      for
      all corporate purposes to have become the holder of record of the Warrant Shares
      with respect to which this Warrant has been exercised. In the case of a dispute
      as to the determination of the Warrant Exercise Price the Company shall promptly
      issue to the holder the number of Warrant Shares that is not disputed and shall
      submit the disputed determinations or arithmetic calculations to the holder
      via
      facsimile within one (1) Business Day of receipt of the holder’s Exercise
      Notice. 

     

    (b)    If
      the
      holder and the Company are unable to agree upon the determination of the Warrant
      Exercise Price within one (1) day of such disputed determination or arithmetic
      calculation being submitted to the holder, then the Company shall immediately
      submit via facsimile the disputed determination of the Warrant Exercise Price
      or
      the Closing Bid Price to an independent, reputable investment banking firm.
      The
      Company shall cause the investment banking firm or the accountant, as the case
      may be, to perform the determinations or calculations and notify the Company
      and
      the holder of the results no later than forty-eight (48) hours from the time
      it
      receives the disputed determinations or calculations. Such investment banking
      firm’s determination or calculation, as the case may be, shall be deemed
      conclusive absent manifest error.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c)    Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

     

    (d)    No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

     

    (e)    If
      the
      Company or its Transfer Agent shall fail for any reason or for no reason to
      issue to the holder within ten (10) days of receipt of the Exercise
      Delivery Documents, a certificate for the number of Warrant Shares to which
      the
      holder is entitled or to credit the holder’s balance account with The Depository
      Trust Company for such number of Warrant Shares to which the holder is entitled
      upon the holder’s exercise of this Warrant, the Company shall, in addition to
      any other remedies under this Warrant or the Placement Agent Agreement or
      otherwise available to such holder, pay as additional damages in cash to such
      holder on each day the issuance of such certificate for Warrant Shares is not
      timely effected an amount equal to 0.025% of the product of (A) the sum of
      the
      number of Warrant Shares not issued to the holder on a timely basis and to
      which
      the holder is entitled, and (B) the Closing Bid Price of the Common Stock for
      the trading day immediately preceding the last possible date which the Company
      could have issued such Common Stock to the holder without violating this
      Section 2.

     

    (f)    If
      within
      ten (10) days after the Company’s receipt of the Exercise Delivery Documents,
      the Company fails to deliver a new Warrant to the holder for the number of
      Warrant Shares to which such holder is entitled pursuant to Section 2 hereof,
      then, in addition to any other available remedies under this Warrant or the
      Placement Agent Agreement, or otherwise available to such holder, the Company
      shall pay as additional damages in cash to such holder on each day after such
      tenth (10th)
      day
      that such delivery of such new Warrant is not timely effected in an amount
      equal
      to 0.25% of the product of (A) the number of Warrant Shares represented by
      the portion of this Warrant which is not being exercised and (B) the
      Closing Bid Price of the Common Stock for the trading day immediately preceding
      the last possible date which the Company could have issued such Warrant to
      the
      holder without violating this Section 2.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      3.    Covenants
      as to Common Stock.
      The
      Company hereby covenants and agrees as follows:

     

    (a)    This
      Warrant is, and any Warrants issued in substitution for or replacement of this
      Warrant will upon issuance be, duly authorized and validly issued.

     

    (b)    All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

     

    (c)    During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price. If at any time the Company does not have a sufficient number
      of
      shares of Common Stock authorized and available, then the Company shall call
      and
      hold a special meeting of its stockholders within sixty (60) days of that
      time for the sole purpose of increasing the number of authorized shares of
      Common Stock.

     

    (d)    If
      at any
      time after the date hereof the Company shall file a registration statement,
      the
      Company shall include the Warrant Shares issuable to the holder, pursuant to
      the
      terms of this Warrant and shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Warrant Shares from time to time
      issuable upon the exercise of this Warrant; and the Company shall so list on
      each national securities exchange or automated quotation system, as the case
      may
      be, and shall maintain such listing of, any other shares of capital stock of
      the
      Company issuable upon the exercise of this Warrant if and so long as any shares
      of the same class shall be listed on such national securities exchange or
      automated quotation system.

     

    (e)    The
      Company will not, by amendment of its Certificate of Incorporation or through
      any reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities, or any other voluntary action, avoid or seek to
      avoid the observance or performance of any of the terms to be observed or
      performed by it hereunder, but will at all times in good faith assist in the
      carrying out of all the provisions of this Warrant and in the taking of all
      such
      action as may reasonably be requested by the holder of this Warrant in order
      to
      protect the exercise privilege of the holder of this Warrant against dilution
      or
      other impairment, consistent with the tenor and purpose of this Warrant. The
      Company will not increase the par value of any shares of Common Stock receivable
      upon the exercise of this Warrant above the Warrant Exercise Price then in
      effect, and (ii) will take all such actions as may be necessary or
      appropriate in order that the Company may validly and legally issue fully paid
      and nonassessable shares of Common Stock upon the exercise of this
      Warrant.

     

    (f)    This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation or acquisition of all or substantially all of the Company’s
      assets.

     

    Section
      4.    Taxes.
      The
      Company shall pay any and all taxes, except any applicable withholding, which
      may be payable with respect to the issuance and delivery of Warrant Shares
      upon
      exercise of this Warrant.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Section
      5.    Warrant
      Holder Not Deemed a Stockholder.
      Except
      as otherwise specifically provided herein, no holder, as such, of this Warrant
      shall be entitled to vote or receive dividends or be deemed the holder of shares
      of capital stock of the Company for any purpose, nor shall anything contained
      in
      this Warrant be construed to confer upon the holder hereof, as such, any of
      the
      rights of a stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether any reorganization, issue of stock,
      reclassification of stock, consolidation, merger, conveyance or otherwise),
      receive notice of meetings, receive dividends or subscription rights, or
      otherwise, prior to the issuance to the holder of this Warrant of the Warrant
      Shares which he or she is then entitled to receive upon the due exercise of
      this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on such holder to purchase any securities (upon
      exercise of this Warrant or otherwise) or as a stockholder of the Company,
      whether such liabilities are asserted by the Company or by creditors of the
      Company. Notwithstanding this Section 5, the Company will provide the holder
      of
      this Warrant with copies of the same notices and other information given to
      the
      stockholders of the Company generally, contemporaneously with the giving thereof
      to the stockholders.

     

    Section
      6.    Representations
      of Holder.
      The
      holder of this Warrant, by the acceptance hereof, represents that it is
      acquiring this Warrant and the Warrant Shares for its own account for investment
      only and not with a view towards, or for resale in connection with, the public
      sale or distribution of this Warrant or the Warrant Shares, except pursuant
      to
      sales registered or exempted under the Securities Act; provided, however, that
      by making the representations herein, the holder does not agree to hold this
      Warrant or any of the Warrant Shares for any minimum or other specific term
      and
      reserves the right to dispose of this Warrant and the Warrant Shares at any
      time
      in accordance with or pursuant to a registration statement or an exemption
      under
      the Securities Act. The holder of this Warrant further represents, by acceptance
      hereof, that, as of this date, such holder is an “accredited investor” as such
      term is defined in Rule 501(a)(1) of Regulation D promulgated by the
      Securities and Exchange Commission under the Securities Act (an “Accredited
      Investor”).
      Upon
      exercise of this Warrant the holder shall, if requested by the Company, confirm
      in writing, in a form satisfactory to the Company, that the Warrant Shares
      so
      purchased are being acquired solely for the holder’s own account and not as a
      nominee for any other party, for investment, and not with a view toward
      distribution or resale and that such holder is an Accredited Investor. If such
      holder cannot make such representations because they would be factually
      incorrect, it shall be a condition to such holder’s exercise of this Warrant
      that the Company receive such other representations as the Company considers
      reasonably necessary to assure the Company that the issuance of its securities
      upon exercise of this Warrant shall not violate any United States or state
      securities laws.

     

    Section
      7.    Ownership
      and Transfer.

     

    (a)    The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee. The Company may treat the person in whose
      name any Warrant is registered on the register as the owner and holder thereof
      for all purposes, notwithstanding any notice to the contrary, but in all events
      recognizing any transfers made in accordance with the terms of this
      Warrant.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      8.    Adjustment
      of Warrant Exercise Price and Number of Shares.
      The
      Warrant Exercise Price and the number of shares of Common Stock issuable upon
      exercise of this Warrant shall be adjusted from time to time as
      follows:

     

    (a)    Adjustment
      of Warrant Exercise Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Warrant subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Warrant Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of shares of Common
      Stock obtainable upon exercise of this Warrant will be proportionately
      increased. If the Company at any time after the date of issuance of this Warrant
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its outstanding shares of Common Stock into a smaller number of shares,
      any
      Warrant Exercise Price in effect immediately prior to such combination will
      be
      proportionately increased and the number of Warrant Shares issuable upon
      exercise of this Warrant will be proportionately decreased. Any adjustment
      under
      this Section 8(a) shall become effective at the close of business on the
      date the subdivision or combination becomes effective.

     

    (b)    Distribution
      of Assets.
      If the
      Company shall declare or make any dividend or other distribution of its assets
      (or rights to acquire its assets) to holders of Common Stock, by way of return
      of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend,
      spin
      off, reclassification, corporate rearrangement or other similar transaction)
      (a
“Distribution”),
      at
      any time after the issuance of this Warrant, then, in each such
      case:

     

    (i)    any
      Warrant Exercise Price in effect immediately prior to the close of business
      on
      the record date fixed for the determination of holders of Common Stock
      entitled to
      receive the Distribution shall be reduced, effective as of the close of business
      on such record date, to a price determined by multiplying such Warrant Exercise
      Price by a fraction of which (A) the numerator shall be the Closing Sale Price
      of the Common Stock on the trading day immediately preceding such record date
      minus the value of the Distribution (as determined in good faith by the
      Company’s Board of Directors) applicable to one share of Common Stock, and (B)
      the denominator shall be the Closing Sale Price of the Common Stock on the
      trading day immediately preceding such record date; and

     

    (ii)    either
      (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
      be increased to a number of shares equal to the number of shares of Common
      Stock
      obtainable immediately prior to the close of business on the record date fixed
      for the determination of holders of Common Stock entitled to receive the
      Distribution multiplied by the reciprocal of the fraction set forth in the
      immediately preceding clause (i), or (B) in the event that the Distribution
      is
      of common stock of a company whose common stock is traded on a national
      securities exchange or a national automated quotation system, then the holder
      of
      this Warrant shall receive an additional warrant to purchase Common Stock,
      the
      terms of which shall be identical to those of this Warrant, except that such
      warrant shall be exercisable into the amount of the assets that would have
      been
      payable to the holder of this Warrant pursuant to the Distribution had the
      holder exercised this Warrant immediately prior to such record date and with
      an
      exercise price equal to the amount by which the exercise price of this Warrant
      was decreased with respect to the Distribution pursuant to the terms of the
      immediately preceding clause (i).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (c)    Certain
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 8
      but not expressly provided for by such provisions (including, without
      limitation, the granting of stock appreciation rights, phantom stock rights
      or
      other rights with equity features), then the Company’s Board of Directors will
      make an appropriate adjustment in the Warrant Exercise Price and the number
      of
      shares of Common Stock obtainable upon exercise of this Warrant so as to protect
      the rights of the holders of the Warrants; provided, except as set forth in
      section 8(c), that no such adjustment pursuant to this Section 8(c) will
      increase the Warrant Exercise Price or decrease the number of shares of Common
      Stock obtainable as otherwise determined pursuant to this Section
      8.

     

    (d)    Notices.

     

    (i)    Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

     

    (ii)    The
      Company will give written notice to the holder of this Warrant at least ten
      (10)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the Common Stock,
      (B) with respect to any pro rata subscription offer to holders of Common
      Stock or (C) for determining rights to vote with respect to any Organic
      Change (as defined below), dissolution or liquidation, provided that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to such holder.

     

    (iii)    The
      Company will also give written notice to the holder of this Warrant at least
      ten
      (10) days prior to the date on which any Organic Change, dissolution or
      liquidation will take place, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

     

    Section
      9.    Purchase
      Rights; Reorganization, Reclassification, Consolidation, Merger or
      Sale.

     

    (a)    If
      at any
      time the Company grants, issues or sells any Options, Convertible Securities
      or
      rights to purchase stock, warrants, securities or other property pro rata to
      the
      record holders of any class of Common Stock (the “Purchase
      Rights”),
      then
      the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b)    Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change.”
Prior
      to the consummation of any (i) sale of all or substantially all of the Company’s
      assets to an acquiring Person or (ii) other Organic Change following which
      the
      Company is not a surviving entity, the Company will secure from the Person
      purchasing such assets or the successor resulting from such Organic Change
      (in
      each case, the “Acquiring
      Entity”)
      a
      written agreement (in form and substance reasonably satisfactory to the holders
      of Warrants representing at least two-thirds (iii) of the Warrant Shares
      issuable upon exercise of the Warrants then outstanding) to deliver to each
      holder of Warrants in exchange for such Warrants, a security of the Acquiring
      Entity evidenced by a written instrument substantially similar in form and
      substance to this Warrant and satisfactory to the holders of the Warrants
      (including an adjusted warrant exercise price equal to the value for the Common
      Stock reflected by the terms of such consolidation, merger or sale, and
      exercisable for a corresponding number of shares of Common Stock acquirable
      and
      receivable upon exercise of the Warrants without regard to any limitations
      on
      exercise, if the value so reflected is less than any Applicable Warrant Exercise
      Price immediately prior to such consolidation, merger or sale). Prior to the
      consummation of any other Organic Change, the Company shall make appropriate
      provision (in form and substance satisfactory to the holders of Warrants
      representing a majority of
      the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to acquire and receive in lieu of or in addition to (as the case may be) the
      Warrant Shares immediately theretofore issuable and receivable upon the exercise
      of such holder’s Warrants (without regard to any limitations on exercise),
      such shares of stock, securities or assets that would have been issued or
      payable in such Organic Change with respect to or in exchange for the number
      of
      Warrant Shares which would have been issuable and receivable upon the exercise
      of such holder’s Warrant as of the date of such Organic Change (without taking
      into account any limitations or restrictions on the exercisability of this
      Warrant).

     

    Section
      10.    Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
      on
      receipt of an indemnification undertaking (or, in the case of a mutilated
      Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
      this Warrant so lost, stolen, mutilated or destroyed.

     

    Section
      11.    Notice.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally;
      (ii) upon receipt, when sent by facsimile (provided confirmation of receipt
      is received by the sending party transmission is mechanically or electronically
      generated and kept on file by the sending party); or (iii) one Business 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:

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to Holder:

            	
              Cornell
                Capital Partners, LP

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Attention: Mark
                A. Angelo

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	
              With
                Copy to:

            	
              Troy
                Rillo, Esq.

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone: (201)
                985-8300

            
	 	
              Facsimile: (201)
                985-8266

            
	 	 
	 	 
	
              If
                to the Company, to:

            	
              MobilePro
                Corp.

            
	 	
              6701
                Democracy Blvd., Suite 202

            
	 	
              Bethesda,
                MD 20817

            
	 	
              Attention: Jay
                Wright, Chairman and CEO

            
	 	
              Telephone: (301)
                315-9040

            
	 	
              Facsimile: (301)
                315-9027

            
	 	 
	
              With
                a copy to:

            	
              Seyfarth
                Shaw LLP

            
	 	
              815
                Connecticut Avenue, NW, Suite 500

            
	 	
              Washington,
                DC 20006-4004

            
	 	
              Attention: Ernest
                M. Stern, Esquire

            
	 	
              Telephone: (202)
                828-5360 

            
	 	
              Facsimile: (202)
                828-5393 

            

    

    

    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      on
Exhibit C
      hereto,
      with copies to such holder’s representatives as set forth on Exhibit C,
      or at
      such other address and facsimile as shall be delivered to the Company upon
      the
      issuance or transfer of this Warrant. Each party shall provide five days’ prior
      written notice to the other party of any change in address or facsimile number.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, facsimile, waiver or other communication, (or (B) provided by a
      nationally recognized overnight delivery service shall be rebuttable evidence
      of
      personal service, receipt by facsimile or receipt from a nationally recognized
      overnight delivery service in accordance with clause (i), (ii) or (iii) above,
      respectively.

     

    Section
      12.    Date.
      The
      date of this Warrant is set forth on page 1 hereof. This Warrant, in all
      events, shall be wholly void and of no effect after the close of business on
      the
      Expiration Date.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      13.    Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the holders of Warrants representing at least two-thirds
      of
      the Warrant Shares issuable upon exercise of the Warrants then outstanding;
      provided that, except for Section 8(b), no such action may increase the Warrant
      Exercise Price or decrease the number of shares or class of stock obtainable
      upon exercise of any Warrant without the written consent of the holder of such
      Warrant.

     

    Section
      14.    Descriptive
      Headings; Governing Law.
      The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this Warrant.
      The
      corporate laws of the State of Delaware shall govern all issues concerning
      the
      relative rights of the Company and its stockholders. All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Agreement shall be governed by the internal laws of the State of New Jersey,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of New Jersey or any other jurisdictions) that would
      cause
      the application of the laws of any jurisdictions other than the State of New
      Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction
      of
      the state and federal courts sitting in Hudson County and the United States
      District Court for the District of New Jersey, for the adjudication of any
      dispute hereunder or in connection herewith or therewith, or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. 

     

    Section
      15.    Waiver
      of Jury Trial.
      AS
      A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

     

    

    REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    
 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

     

    
      	 	 	 
	 	
              MOBILEPRO
                CORP.

            
	 
 	 
 	 
 
	 	By:  	/s/
              Jay Wright
	 	
              

              Name: Jay
                Wright

            
	 	
              Title: Chairman
                and CEO

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A TO WARRANT

     

    EXERCISE
      NOTICE

     

    TO
      BE EXECUTED

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

     

    MOBILEPRO
      CORP.

     

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant
      Shares”)
      of
      MobilePro Corp. (the “Company”),
      evidenced by the attached Warrant (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

     

    Specify
      Method of exercise by check mark:

     

    1.
      ___ Cash
      Exercise

     

    (a)
      Payment
      of Warrant Exercise Price.
      The
      holder shall pay the Aggregate Exercise Price of $______________ to the Company
      in accordance with the terms of the Warrant. 

     

    (b)
      Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________ Warrant
      Shares in accordance with the terms of the Warrant. 

     

     

    Date:
      _______________ __, ______

    

    Name
      of
      Registered Holder

    

    By:
      ________________________________

    Name:
      ______________________________

    Title:
      _______________________________

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B TO WARRANT

     

    FORM
      OF WARRANT POWER

     

    FOR
      VALUE RECEIVED,
      the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the capital stock of MobilePro Corp. represented by warrant certificate
      no. _____, standing in the name of the undersigned on the books of said
      corporation. The undersigned does hereby irrevocably constitute and appoint
      ______________, attorney to transfer the warrants of said corporation, with
      full
      power of substitution in the premises.

     

    
      	
              Dated:
                ________________________________      

            	___________________________________ 
	 	 
	 	
              By:
                ________________________________     

            
	 	
              Name:
                ______________________________      

            
	 	
              Title:
                _______________________________      

            

    

     

    
      
        
        

      

      B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]