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

 

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.

 

 

 

No. CCP-

US$15,149,650

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

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

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

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

Section 1.02 Payments.

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

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

Section 1.03 Right of Redemption.

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

 

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

 

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

 

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

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

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

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

 

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

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

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

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

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

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

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

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

Section 3.01 Events of Default and Remedies.

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

 

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

 

 

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

 

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

 

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

 

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

 

 

(vi) The Company shall fail for any reason to deliver Common Stock certificates to a Holder prior to the fifth (5^th) Trading Day after a Conversion Date or the Company shall provide notice to the Holder, including by way of public announcement, at any time, of its intention not to comply with requests for conversions of this Debenture in accordance with the terms hereof.

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

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

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.

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.

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

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

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

 

If to the Company, to:	Mobilepro Corp.
	6701 Democracy Blvd., Suite 202
	Bethesda, MD 20817
	Attention: Jay Wright, President
	Telephone: (301) 315-9040
	Facsimile: (301) 315-9027

 

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

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

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

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

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

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

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

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

	MOBILEPRO CORP.
	By:	/s/ Jay Wright
		Name: Jay Wright
		Title: President

 

 

 

 

TO:

The undersigned hereby irrevocably elects to convert $__________________ of the principal amount of the above Debenture into Shares of Common Stock of MobilePro Corp., according to the conditions stated therein, as of the Conversion Date written below.

 

Conversion Date:
Applicable Conversion Price:
Signature:
Name:
Address:
Amount to be converted:	$
Amount of Debenture unconverted:	$
Conversion Price per share:	$
Number of shares of Common Stock to be issued:
Please issue the shares of Common Stock in the following name and to the following address:
Issue to:
Authorized Signature:
Name:
Title:
Phone Number:
Broker DTC Participant Code:
Account Number: