AMENDMENT NO. 4 TO CONVERTIBLE DEBENTURE
Exhibit
10.1
AMENDMENT
NO. 4 TO CONVERTIBLE DEBENTURE
This
Amendment No. 4 (“Amendment”)
to the
Convertible Debenture in the original principal amount of $15,149,650 dated
June
30, 2006, as amended (the “Convertible
Debenture”)
is
made as of January 16, 2008, by and among YA Global Investments, L.P. (f/k/a
Cornell Capital Partners, LP), a Cayman Islands limited partnership, with its
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
Xxx
Xxxxxx 00000 (“YA
Global”)
and
Mobilepro Corp. (the “Company”).
WHEREAS,
the
Company owes YA Global weekly payments of $250,000 in principal payments plus
interest on the outstanding principal balance of the Convertible Debenture
commencing November 15, 2006;
WHEREAS,
pursuant to Amendment No. 2 to Convertible Debenture YA Global agreed to allow
the Company to suspend all principal and interest payments under the Convertible
Debenture until July 8, 2007;
WHEREAS,
the
Company executed on June 29, 2007 a Purchase Agreement pursuant to which it
sold
certain of its telephony businesses to United Systems Access, Inc. d/b/a USA
Telephone to enable it to extinguish all principal and interest owed under
the
terms of the Convertible Debentures as those businesses are sold in stages
through December 31, 2007; and
WHEREAS,
pursuant to the above Purchase Agreement USA Telephone agreed to pay $2,000,000
of the purchase price at the earlier of January 1, 2008 or the second closing
of
the ISP companies pursuant to a Promissory Note dated June 29, 2007 (the
“Note”);
and
WHEREAS,
USA
Telephone has informed the Company that it cannot make the $2,000,000 Note
payment on January 1, 2008 but intends to pay $500,000 by January 4, 2008 ,
an
additional $500,000 by January 11, 2008 and the remaining $1,000,000 at the
earlier of the Second Closing (as that term is defined in the Purchase
Agreement) or March 31, 2008; and
WHEREAS,
the
Company executed contemporaneously with the above Purchase Agreement Amendment
No. 3 to Convertible Debentures to suspend all Scheduled Payments until January
1, 2008; and
WHEREAS,
as a
result of the delay in the closing of the sale of the CLEC assets of Mobilepro,
the Company requests YA Global to extend for thirty (30) days until February
1,
2008 payment of principal and interest payments under this Agreement; and
WHEREAS,
the
Company intends to pay YA Global $500,000 on January 4, 2008 and $375,000 on
January 11, 2008 when USA makes the Note payments in early January 2008 and
all
$1,000,000 of the Note payment when USA makes the remaining Note payment at
the
earlier of the Second Closing (as that term is defined on the Purchase Agrement)
or March 31, 2008; and
WHEREAS,
the
parties to this Agreement desire to amend the Convertible Debentures to defer
all principal and interest payments until February 1, 2008.
NOW
THEREFORE,
in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section
1. Amendment
to Section 1.02 of the Convertible Debenture.
Section
1.02
of the
Convertible Debenture is hereby amended and restated in its entirety as
follows:
Section
1.02 Payments.
(a) The
Company shall be required to 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 February 1, 2008. Interest
payments on the outstanding principal balance hereof shall commence on February
1, 2008. 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.
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Section
2. Effect
of Amendment.
Except
as amended hereby, the Convertible Debenture shall continue in full force and
effect and is hereby incorporated herein by this reference.
Section
3. Governing Law.
This
Amendment shall be governed by and construed under the laws of the State of
New
Jersey.
Section
4. Titles and Subtitles.
The
titles of the sections and subtitles of this Amendment are for convenience
of
reference only and are not to be considered in construing this
Amendment.
Section
5. Counterparts.
This
Amendment may be executed in counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same
instrument.
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed
as
of the date first set forth above.
By:
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/s/ Xxx X. Xxxxxx | |
Name:
Xxx X. Xxxxxx
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Title:
Chairman and CEO
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YA
GLOBAL INVESTMENTS L.P.
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By:
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/s/ Xxxx Xxxxx | |
Name:
Xxxx Xxxxx
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Its:
Senior Managing Director
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Signature
Page to Amendment No. 4 to Convertible Debenture
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