AMENDMENT NO. 5 TO CONVERTIBLE DEBENTURES
Exhibit
10.1
AMENDMENT
NO. 5 TO CONVERTIBLE DEBENTURES
This
Amendment No. 5 (“Amendment”)
is
made as of July 18, 2007 to the Convertible Debentures (collectively, the
“Convertible
Debentures”)
issued
under the Securities Purchase Agreement dated August 28, 2006 (the “SPA”)
by and
between Cornell Capital Partners, LP (“Cornell
Capital”)
and
Mobilepro Corp. (the “Company”)
for
loans totaling $7,000,000 from Cornell Capital.
WHEREAS,
the
Company had been paying to Cornell Capital weekly payments of $300,000 in
principal payments plus interest on the outstanding principal balance of
the
Convertible Debentures commencing April 5, 2007 in place of the original
amount
of $125,000 in scheduled payments commencing January 2, 2007 (the “Scheduled
Payments”)
in
accordance with Amendment No. 3 to Convertible Debentures dated April 2,
2007
between the Company and Cornell Capital;
WHEREAS,
pursuant to Amendment No. 4 to Convertible Debentures dated May 11, 2007
all
Scheduled Payments were suspended until July 1, 2007 since the Company expected
to engage in a transaction to generate sufficient cash to pay the principal
and
interest owed under the Convertible Debentures;
WHEREAS,
the
Company has executed a Purchase Agreement dated June 29, 2007 pursuant to
which
it will sell certain of its telephony businesses and will be able to extinguish
all principal and interest owed under the terms of the Convertible Debentures
as
those businesses are sold in stages; and
WHEREAS,
the
parties to this Agreement desire to amend the Convertible Debentures to defer
payment of principal and interest under the Scheduled Payments until January
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 Debentures.
Section
1.02
of the
Convertible Debentures is hereby amended and restated in its entirety as
follows:
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 1, 2008. Interest
payments on the outstanding principal balance hereof shall be due and payable
with the principal payment installments above (accruing from the date hereof
in
accordance with the terms of the Convertible Debentures); provided
that
subject to Cornell Capital and/or the Company receiving a legal opinion that
it
can sell shares of the Company’s Common Stock under Rule 144 of the Securities
and Exchange Commission (the “Commission”),
the
Company shall exercise conversions of the outstanding Convertible Debentures
commencing on September 1, 2007 at the Payment Conversion Price set forth
herein
in the maximum amount permitted in accordance with the volume limits under
Rule
144 to the extent that they apply and equal to the Scheduled Payments to
the
extent that such volume limits do not apply. Upon exercise of such conversions
by the Company, Cornell Capital may commence sales of the Company’s Common Stock
to reduce the outstanding principal and interest due under this Debenture.
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 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.
Section
2. Effect
of Amendment.
Except
as amended hereby, the Convertible Debentures shall continue in full force
and
effect and are 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 subtiles 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.
| MOBILEPRO CORP. | ||
| |
|
|
| By: | /s/ Xxx X. Xxxxxx | |
|
Name: Xxx X. Xxxxxx |
||
| Title: Chairman and CEO | ||
|
CORNELL
CAPITAL PARTNERS, LP
By:
Yorkville Advisors, LLC
Its:
Investment Manager
|
||
| |
|
|
| By: | /s/ Xxxx X. Xxxxx | |
|
Name: Xxxx X. Xxxxx |
||
| Its: Managing Director | ||
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