IRREVOCABLE TRANSFER AGENT INSTRUCTIONS August 28, 2006
IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS
August
28, 2006
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Interwest
Transfer Company, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ P.O. Box 17136 Salt Lake City, UT 84117 |
| Attention: |
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(▇▇▇)
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| RE: |
Ladies
and Gentlemen:
Reference
is made to that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”),
dated
as of August 28, 2006, by and among MobilePro Corp., a Delaware corporation
(the “Company”)
and
the Buyers set forth on Schedule I attached thereto (collectively, the
“Buyers”).
Pursuant
to the Securities Purchase Agreement, the Company shall (a) sell to the Buyers,
and the Buyers shall purchase from the Company, secured convertible debentures
(collectively, the “Debentures”)
in the
aggregate principal amount of up to Seven Million Dollars ($7,000,000), which
Debentures are convertible into shares of the Company’s common stock, par value
$0.001 per share (the “Common
Stock”),
at
the Buyers discretion pursuant to the terms thereof, and (b) issue to the Buyer
warrants to purchase up to 10,000,000 shares of Common Stock (the “Warrant”).
These
instructions relate to the following stock or proposed stock issuances or
transfers:
| 1. |
Shares
of Common Stock to be issued to the Buyers upon conversion of any
or all
principal amount, plus accrued interest, of the Debentures (“Conversion
Shares”)
pursuant to the terms thereof.
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| 2. |
Up
to 10,000,000 shares of Common Stock to be issued to the Buyers upon
exercise of the Warrant (the “Warrant
Shares”).
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This
letter shall serve as our irrevocable authorization and direction to Interwest
Transfer Company, Inc. (the “Transfer
Agent”)
to do
the following:
| 1. |
Conversion
Shares and Warrant Shares.
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| a. |
Instructions
Applicable to Transfer Agent.
With respect to the Conversion Shares and Warrant Shares, the Transfer
Agent shall issue the Conversion Shares and Warrant Shares to the
Buyers
from time to time upon delivery to the Transfer Agent of a properly
completed and duly executed Notice of Conversion (the “Conversion
Notice”),
in the form attached as Exhibit
A
to
the Debentures, with respect to the Conversion Shares, or a properly
completed and duly executed Exercise Notice (the “Exercise
Notice”),
in the form attached as Exhibit
A
to
the Warrant, with respect to the Warrant Shares, in each case delivered
to
the Transfer Agent by the Escrow Agent on behalf of the Company.
Upon
receipt of a Conversion Notice or Exercise Notice, the Transfer Agent
shall within three (3) Trading Days thereafter (i) issue and surrender
to
a common carrier for overnight delivery to the address as specified
in the
applicable Conversion Notice or Exercise Notice, a certificate, registered
in the name of the applicable Buyer or its designees, for the number
of
shares of Common Stock to which such Buyer shall be entitled as set
forth
in the Conversion Notice or Exercise Notice, or (ii) upon the request
of
either Buyers, credit such aggregate number of shares of Common Stock
to
which such Buyer shall be entitled to in such Buyer’s or its designee’s
balance account with the Depository Trust Company (“DTC”)
through its Deposit Withdrawal At Custodian (“DWAC”)
system; provided
that
the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program and such Buyer causes its bank or broker to initiate
the
DWAC transaction. For purposes hereof “Trading
Day”
shall mean any day on which The American Stock Exchange is open for
customary trading.
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| b. |
The
Company hereby confirms to the Transfer Agent and the Buyers that
certificates representing the Conversion Shares and Warrant Shares
shall
not bear any legend restricting transfer and should not be subject
to any
stop-transfer restrictions and shall otherwise be freely transferable
on
the books and records of the Company; provided
that
counsel to the Company delivers (i) the Notice of Effectiveness set
forth
in Exhibit
I
attached hereto and (ii) an opinion of counsel in the form set forth
in
Exhibit
II
attached hereto. If any Conversion Shares or Warrant Shares are not
registered for sale under the Securities Act of 1933, as amended,
then the
certificates for such Conversion Shares or Warrant Shares shall bear
the
following legend:
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“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE 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
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID
ACT.”
The
Company hereby confirms that in the event that a stop order suspending the
effectiveness of the Registration Statement has been issued by the SEC or any
proceeding for that purpose are threatened by the SEC the Company will notify
the Transfer Agent promptly, in light of the circumstances, of such order or
notice. In addition, the Company shall promptly inform the Transfer Agent of
any
voluntary suspension of the effectiveness of the Registration Statement and
confirm the continued effectiveness of the Registration Statement upon inquiry
by the Transfer Agent.
| c. |
In
the event that counsel to the Company fails or refuses to render
an
opinion as required to issue the Conversion Shares or the Warrant
Shares
in accordance with the preceding paragraph (either with or without
restrictive legends, as applicable), then the Company irrevocably
and
expressly authorizes counsel to the Buyers to render such opinion.
The
Transfer Agent shall accept and be entitled to rely on such opinion
for
the purposes of issuing the Conversion Shares.
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| d. |
Instructions
Applicable to Escrow Agent.
Upon the Escrow Agent’s receipt of a properly completed Conversion Notice,
or Exercise Notice and the Aggregate Exercise Price (as defined in
the
Warrant), the Escrow Agent shall, within one (1) Trading Day thereafter,
send to the Transfer Agent the Conversion Notice or Exercise Notice,
as
the case may be, which shall constitute an irrevocable instruction
to the
Transfer Agent to process such Conversion Notice or Exercise Notice
in
accordance with the terms of such
instructions.
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| 2. |
All
Shares.
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| a. |
The
Transfer Agent shall reserve for issuance to the Buyers 140,000,000
Conversion Shares and 10,000,000 Warrant Shares. All such shares
shall
remain in reserve with the Transfer Agent until such shares are taken
out
of reserve pursuant to a Conversion Notice or Exercise Notice, as
applicable, or upon expiration of the Warrant or repayment in full
of the
Debentures.
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| b. |
The
Company hereby irrevocably appoints the Escrow Agent as a duly authorized
agent of the Company for the purposes of authorizing the Transfer
Agent to
process issuances and transfers specifically contemplated
herein.
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| c. |
The
Transfer Agent shall rely exclusively on the Conversion Notice, Exercise
Notice, and Escrow Notice, and shall have no liability for relying
on such
instructions. Any Conversion Notice, Exercise Notice, or Escrow Notice
delivered hereunder shall constitute an irrevocable instruction to
the
Transfer Agent to process such notice or notices in accordance with
the
terms thereof. Such notice or notices may be transmitted to the Transfer
Agent by facsimile or any commercially reasonable
method.
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| d. |
The
Company hereby confirms to the Transfer Agent and the Buyers that
no
instructions other than as contemplated herein will be given to the
Transfer Agent by the Company with respect to the matters referenced
herein. The Company hereby authorizes the Transfer Agent, and the
Transfer
Agent shall be obligated, to disregard any contrary instructions
received
by or on behalf of the Company.
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Certain
Notice Regarding the Escrow Agent.
The
Company and the Transfer Agent hereby acknowledge that the Escrow Agent is
general counsel to each Buyer, a partner of the general partner of each Buyer
and counsel to the Buyers in connection with the transactions contemplated
and
referred herein. The Company and the Transfer Agent agree that in the event
of
any dispute arising in connection with this Agreement or otherwise in connection
with any transaction or agreement contemplated and referred herein, the Escrow
Agent shall be permitted to continue to represent the Buyers and neither the
Company nor the Transfer Agent will seek to disqualify such
counsel.
The
Company hereby agrees that it shall not replace the Transfer Agent as the
Company’s transfer agent without the prior written consent of the
Buyers.
If
for
any reason, during the term of this Agreement, the Transfer Agent resigns as
transfer agent, the Transfer Agent shall provide the Company and the Investor
with thirty (30) days’ prior written notice. The Company shall have five (5)
business days after the date of the Transfer Agent’s notice to obtain a suitable
replacement transfer agent which agent shall have agreed to serve as transfer
agent and to be bound by the terms and conditions of these Transfer Agent
Instructions. Nothing herein shall otherwise modify, amend or supercede the
terms, conditions and obligations of the Company to the Transfer Agent as more
fully set forth in the existing agreement. The
Company and the Transfer Agent hereby acknowledge and confirm that complying
with the terms of this Agreement does not and shall not prohibit the Transfer
Agent from satisfying any and all fiduciary responsibilities and duties it
may
owe to the Company.
The
Company and the Transfer Agent acknowledge that the Buyers is relying on the
representations and covenants made by the Company and the Transfer Agent
hereunder and are a material inducement to the Buyers purchasing the Debentures
under the Securities Purchase Agreement. The Company and the Transfer Agent
further acknowledge that without such representations and covenants of the
Company and the Transfer Agent made hereunder, the Buyers would not purchase
the
Debentures.
Each
party hereto specifically acknowledges and agrees that in the event of a breach
or threatened breach by a party hereto of any provision hereof, the Buyers
will
be irreparably damaged and that damages at law would be an inadequate remedy
if
these Irrevocable Transfer Agent Instructions were not specifically enforced.
Therefore, in the event of a breach or threatened breach by a party hereto,
including, without limitation, the attempted termination of the agency
relationship created by this instrument, the Buyers shall be entitled, in
addition to all other rights or remedies, to an injunction restraining such
breach, without being required to show any actual damage or to post any bond
or
other security, and/or to a decree for specific performance of the provisions
of
these Irrevocable Transfer Agent Instructions.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
the
parties have caused this letter agreement regarding Irrevocable Transfer Agent
Instructions to be duly executed and delivered as of the date first written
above.
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COMPANY:
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By:
/s/ ▇▇▇
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Name: ▇▇▇
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Title: Chairman
and CEO
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| ___________________________________ | |
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▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
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INTERWEST
TRANSFER COMPANY, INC.
By:
________________________________
Name:
Title:
SCHEDULE
I
SCHEDULE
OF BUYERS
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Name
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Signature
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Address/Facsimile
Number
of Buyers
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Cornell
Capital Partners, LP
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By: Yorkville
Advisors, LLC
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Its: General
Partner
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Jersey
City, NJ 07303
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Facsimile:
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By:
/s/ ▇▇▇▇
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Name: ▇▇▇▇
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Its: Portfolio
Manager
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SCHEDULE
I-1
EXHIBIT
I
TO
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
__________,
2006
Interwest
Transfer Company, Inc.
▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
P.O.
Box
17136
Salt
Lake
City, UT 84117
|
RE:
|
Ladies
and Gentlemen:
We
are
counsel to MobilePro Corp. (the “Company”),
and
have represented the Company in connection with that certain Securities Purchase
Agreement, dated as of August ___, 2006 (the “Securities
Purchase Agreement”),
by
and among the Company, the Buyers set forth on Schedule I attached thereto
(collectively the “Buyers”)
and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., pursuant to which the Company has agreed to sell to the
Buyers up to Seven Million Dollars ($7,000,000) of secured convertible
debentures, which shall be convertible into shares (the “Conversion
Shares”)
of the
Company’s common stock, par value $0.001 per share (the “Common
Stock”),
in
accordance with the terms of the Securities Purchase Agreement. Pursuant to
the
Securities Purchase Agreement, the Company also has entered into a Registration
Rights Agreement, dated as of August __, 2006, with the Buyers (the
“Investor
Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the
Conversion Shares under the Securities Act of 1933, as amended (the
“1933
Act”).
In
connection with the Company’s obligations under the Securities Purchase
Agreement and the Registration Rights Agreement, on [_____], 2006, the Company
filed a Registration Statement (File No. ___-_________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the sale of the Conversion Shares.
In
connection with the foregoing, we advise the Transfer Agent that a member of
the
SEC’s staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at ____ P.M.
on __________, 2006 and we have no knowledge, after telephonic inquiry of a
member of the SEC’s staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Conversion Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.
EXHIBIT
I-1
The
Buyers have confirmed it shall comply with all securities laws and regulations
applicable to it including applicable prospectus delivery requirements upon
sale
of the Conversion Shares.
| Very truly yours, | ||
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EXHIBIT
I-2
EXHIBIT
II
TO
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
FORM
OF OPINION
Interwest
Transfer Company, Inc.
▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
P.O.
Box
17136
Salt
Lake
City, UT 84117
|
RE:
|
Ladies
and Gentlemen:
We
have
acted as special counsel to MobilePro Corp. (the “Company”),
in
connection with the registration of ___________shares (the “Shares”)
of its
common stock with the Securities and Exchange Commission (the “SEC”).
We
have
not acted as your counsel. This opinion is given at the request and with the
consent of the Company.
In
rendering this opinion we have relied on the accuracy of the Company’s
Registration Statement on Form SB-2, as amended (the “Registration
Statement”),
filed
by the Company with the SEC on __________, 2006. The Company filed the
Registration Statement on behalf of certain selling stockholders (the
“Selling
Stockholders”).
This
opinion relates solely
to the
Selling Shareholders listed on Exhibit
“A”
hereto
and number of Shares set forth opposite such Selling Stockholders’ names. The
SEC declared the Registration Statement effective on __________,
2006.
We
understand that the Selling Stockholders acquired the Shares in a private
offering exempt from registration under the Securities Act of 1933, as amended.
Information regarding the Shares to be sold by the Selling Shareholders is
contained under the heading “Selling Stockholders” in the Registration
Statement, which information is incorporated herein by reference. This opinion
does not relate to the issuance of the Shares to the Selling Stockholders.
The
opinions set forth herein relate solely to the sale or transfer by the Selling
Stockholders pursuant to the Registration Statement under the Federal laws
of
the United States of America. We do not express any opinion concerning any
law
of any state or other jurisdiction.
In
rendering this opinion we have relied upon the accuracy of the foregoing
statements.
Based
on
the foregoing, it is our opinion that the Shares have been registered with
the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and that ________ may remove the restrictive legends contained on the Shares.
This opinion relates solely
to the
number of Shares set forth opposite the Selling Stockholders listed on
Exhibit
“A”
hereto.
EXHIBIT
II-1
This
opinion is furnished to Transfer Agent specifically in connection with the
sale
or transfer of the Shares, and solely for your information and benefit. This
letter may not be relied upon by Transfer Agent in any other connection, and
it
may not be relied upon by any other person or entity for any purpose without
our
prior written consent. This opinion may not be assigned, quoted or used without
our prior written consent. The opinions set forth herein are rendered as of
the
date hereof and we will not supplement this opinion with respect to changes
in
the law or factual matters subsequent to the date hereof.
| Very truly yours, | ||
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EXHIBIT
II-2
EXHIBIT
A
(LIST
OF SELLING STOCKHOLDERS)
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Name:
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No.
of Shares:
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EXHIBIT
II-3