EMPLOYMENT AGREEMENT

Agreement dated as of June 28, 2006, between Capital Growth Systems, Inc., a
Florida corporation, having a place of business at 50 East Commerce Drive, Suite
A, Schaumburg, Illinois 60173 (the “Company”), and Thomas G. Hudson (the
“Executive”).

WITNESSETH

WHEREAS, the Company wishes Executive to serve as Chief Executive Officer of the
Company effective immediately and Executive wishes to serve in such capacity,
subject to the terms and conditions hereof;

WHEREAS, the Board of Directors (“Board”) of the Company believes it to be in
the best interests of the Company to enter into this Agreement to assure
Executive’s services to the Company and to encourage Executive’s full attention
and dedication to the Company; and

WHEREAS, in order to accomplish all the above objectives, the Board has
authorized the Company to enter into this Agreement;

NOW, THEREFORE, in consideration of the mutual promises herein contained, the
Company and Executive hereby agree as follows:

1.    Certain Definitions.
 
(a)    The “Effective Date” shall mean the date hereof.
 
(b)    The “Change of Control Date” shall mean the first date during the
Employment Period (as defined in Section 1(c)) on which a Change of Control (as
defined in Section 2) occurs.
 
(c)    The “Employment Period” shall mean the period commencing on the Effective
Date and ending on the second (2nd) anniversary of such date; provided, however,
that on each anniversary of the Effective Date, and on each successive annual
anniversary of such date thereafter (such date and each annual anniversary
thereof shall be hereinafter referred to as the “Renewal Date”), the Employment
Period shall be automatically extended so as to terminate on one (1) year from
such Renewal Date, unless at least ninety (90) days prior to the Renewal Date
either party shall give notice to the other that the Employment Period shall not
be so extended; and provided, further, that upon the occurrence of a Change of
Control Date, the Employment Period shall automatically be extended so as to
terminate on the first (1st) anniversary of such date.
 
2.    Change of Control. For the purpose of this Agreement, a “Change of
Control” or “Change in Control” shall mean:
 
(a)    The acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of Company (the “Outstanding Company Common
Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
the following acquisitions shall not constitute a Change of Control: (w) any
acquisition directly from the Company, (x) any acquisition by the Company or any
of its subsidiaries, (y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its subsidiaries
or (z) any acquisition by any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who were beneficial
owners, respectively of the Outstanding Company Common Stock and Outstanding
Company Voting Securities in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be; or
 

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(b)    Completion by the Company of a reorganization, merger or consolidation,
in each case, with respect to which all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such reorganization, merger or consolidation, beneficially own, directly or
indirectly, less than 50% of, respectively, of the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be; or
 
(c)    Completion by the Company of (i) a complete liquidation or dissolution of
Company or (ii) the sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect to which
following such sale or other disposition, more than 50% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be.
 
3.    Employment Period. The Company hereby agrees to continue Executive in its
employ, and Executive hereby agrees to remain in the employ of the Company,
during the Employment Period under the terms and conditions provided herein.
 

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4.    Terms of Employment.
 
(a)    Position and Duties. Executive is appointed to the position of CEO and
shall have the normal duties, responsibilities and authority of the position of
CEO, subject to the power of the Board to limit such duties, responsibilities
and authority. Executive may perform his duties from his home in Minnesota or
New York or as otherwise mutually agreed by the Company and Executive. If and
when an office for Executive in Minnesota is justified, the Company shall
provide for such office space and an assistant. Excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs the Company and, to the extent necessary to discharge the
responsibilities assigned to Executive hereunder, to use Executive’s reasonable
best efforts to perform faithfully and efficiently such responsibilities. It
shall not be a violation of this Agreement for Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of Executive’s responsibilities as an employee of the
Company in accordance with this Agreement. It is also expressly understood and
agreed that to the extent that such activities have been conducted by Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of Executive’s responsibilities to the Company.
 
(b)    Compensation.
 
(i)    Base Salary. The Company shall pay Executive a base salary at an annual
rate of $240,000 (initially and as adjusted in accordance with the terms of this
Agreement, “Base Salary”). Base Salary shall be reviewed at least annually and
shall be adjusted as agreed between the Board and Executive (in the event no
agreement is reached, Base Salary shall remain unchanged). Any increase in Base
Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement. Base Salary shall not be reduced after any such increase
including in connection with Company wide reductions applied to other senior
executives of the Company.
 
(ii)    Additional Compensation. In addition to Base Salary, Executive shall be
eligible to receive an annual bonus based upon the attainment of certain
performance goals and objectives mutually agreed upon by the Board and Executive
and in accordance with the Company’s business plan, as may be approved annually
by the Board. The bonus amount to be paid to Executive will be determined
annually by the Board, but in no event greater than 200% of Base Salary for the
applicable year. Executive shall also be eligible for stock awards under the
Company’s current equity incentive plan and any successor or additional plans,
as determined by the Board.
 
(iii)    Fringe Benefits. While Executive is employed by the Company under this
Agreement, Executive shall be entitled to participate in all insurance, vacation
days and other benefit plans or programs as are provided from time to time by
the Company to its other executives, in accordance with the terms of such plans
or programs and the Company’s benefits practices then in effect.
 
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(iv)    Stock Options.
 
(1)    Grant of Option/Price. The Company agrees to grant Executive options of
the Effective Date to acquire 7.5% (1,496,993 shares) of the Company’s common
stock (calculated on a fully diluted basis as of the Effective Date) for a
strike price equal to the closing price of the Company’s common stock as of June
27, 2006 (i.e., $0.70 per share) (the “Employee Options”). The Employee Options
will be calculated based on the issued and outstanding common shares as of the
Effective Date (i.e., 17,115,954 common shares), the number of granted and
unexercised employee stock options (approximately 1,524,557 options), and the
issued and unexercised warrants to acquire common stock of the Company
(approximately 1,319,389 warrants). The Employee Options shall be governed by an
option agreement between Executive and the Company, in substantially the form
attached hereto (the “Option Agreement”).
 
(2)    Vesting. In accordance with the Option Agreement (i) 25% of the Employee
Options shall vest immediately upon execution of this Agreement, and (ii) 25%
shall thereafter vest on the yearly anniversary of this Agreement over the next
three (3) years, commencing on June 28, 2007, with 100% vested on June 27, 2009,
subject to the terms hereof and the Option Agreement.
 
(v)    Performance Equity Options.
 
(1)    Grant of Performance Option.   The Company agrees to grant, as of the
Effective Date, options to acquire 15% (2,993,985 shares) of the Company’s
common stock (calculated on a fully diluted basis as of the Effective Date) for
a strike price equal to per share common stock price of the Next Equity
Financing (the “Performance Options”) as an incentive to attain certain revenue
objectives as set forth in clause (2) hereof.  The number of Performance Options
was calculated based upon the issued and outstanding common shares of the
Company as of the Effective Date (i.e., 17,115,954 common shares), the number of
granted and unexercised outstanding employee stock options (approximately
1,524,557 options), and the granted and unexercised warrants to acquire common
stock (approximately 1,316,389 warrants).
 
(2)    Vesting.  In accordance with the Performance Option Agreement, the
Performance Options shall vest on the following basis.  Upon each realization by
the Company of an incremental $2.0 million of third party service and/or
maintenance revenue from new customers, with gross margins in excess of 35%,
pursuant to an agreement of one year or more, Executive shall vest,
incrementally, in 199,599 option shares of the total number of Performance
Options, or 1% of the 15%, up to a total of such available Performance Options. 
Unless otherwise directed, the Performance Options shall be granted to
Executive. Notwithstanding, Executive shall have authority, subject to the Board
approval, to direct the allocation of such Performance Options to other Company
executives.
 
(c)    Board Seat. Concurrent with the execution of this Agreement, Executive
shall be appointed to served on the Company’s Board to fill an existing vacancy
to serve until the next annual election of Directors.
 
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(d)    Expenses. The Company shall reimburse Executive for all reasonable and
ordinary expenses incurred by Executive in the performance of Executive’s duties
hereunder including expenses for entertainment, travel and similar items that
arise related to and for promoting the business of the Company; provided,
however, that Executive shall account to the Company for such expenses in the
manner customarily prescribed by the Company for its executives.
 
5.    Termination.
 
(a)    Death or Disability. This Agreement shall terminate automatically upon
Executive’s death. If the Company determines in good faith that the Disability
of Executive has occurred (pursuant to the definition of Disability set forth
below), it may give to Executive written notice of its intention to terminate
Executive’s employment hereunder. In such event, Executive’s employment with the
Company shall terminate effective on the 90th day after receipt by Executive of
such notice given at any time after a period of six consecutive months of
Disability and while such Disability is continuing (the “Disability Effective
Date”), provided that, within the 90 days after such receipt, Executive shall
not have returned to full-time performance of Executive’s duties. For purposes
of this Agreement, “Disability” means disability which, at least six months
after its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive or
Executive’s legal representative (such agreement as to acceptability not to be
withheld unreasonably). During such three month period and until the Disability
Effective Date, Executive shall be entitled to all compensation provided for
under Section 4 hereof.
 
(b)    Cause. The Company may terminate this Agreement and Executive’s
employment with the Company for Cause. For purposes of this Agreement, “Cause”
means: (i) an act or acts of personal dishonesty taken by Executive and intended
to result in substantial personal enrichment of Executive at the expense of the
Company, (ii) repeated violations by Executive of Executive’s obligations under
Section 4(a) of this Agreement which are demonstrably willful and deliberate on
Executive’s part and which are not remedied in a reasonable period of time after
receipt of written notice from the Company, or (iii) the conviction of Executive
of a felony.
 
(c)    Good Reason. During the Employment Period, Executive’s employment
hereunder may be terminated by Executive for Good Reason. For purposes of this
Agreement, “Good Reason” means:
 
(i)    the assignment to Executive of any duties inconsistent in any respect
with Executive’s position (including status, offices, titles and reporting
relationships), authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement (including, without limitation, failure to nominate
Executive to the Board or Executive ceasing to be the CEO of the Company), or
any other action by the Company which results in a diminution in such position,
authority, duties or responsibilities;
 
(ii)    the failure by the Company to appoint Executive to the position of CEO
or any other action by the Company which results in the diminution of
Executive’s position, authority, duties, or responsibilities;
 
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(iii)    any failure by the Company to comply with any of the material
provisions of this Agreement;
 
(iv)    the Company requiring Executive to be based at any office or location
other than that described in Section 4(a) hereof, except for travel reasonably
required in the performance of Executive’s responsibilities;
 
(v)    any purported termination by the Company of Executive’s employment
otherwise than as expressly permitted by this Agreement; or
 
(vi)    any failure by the Company to comply with and satisfy Section 11(c) of
this Agreement.
 
Prior to giving a Notice of Termination for Good Reason, Executive shall notify
the Company within 30 days of action the Company has taken in such 30 day
period, together with any other similar actions within the prior six months,
which Executive believes constitutes Good Reason. The Company shall have 30 days
to cure such circumstances, and if not cured to the reasonable satisfaction of
Executive, then Executive may give such Notice of Termination for Good Reason.

(d)    Notice of Termination. Any termination of Executive’s employment
hereunder by the Company for Cause or by Executive for Good Reason shall be
communicated by Notice of Termination to such other party hereto given in
accordance with 13(b) of this Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated and (iii)
if the Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall be not more
than fifteen (15) days after the giving of such notice). Further, a Notice of
Termination for Cause is required to include a copy of a resolu-tion duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board (excluding Executive) at a meeting of the Board
which was called and held for the purpose of considering such termination (after
reasonable notice to Executive and an opportunity for Executive, together with
Executive's counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, Executive was guilty of conduct set forth in the
definition of Cause herein, and specifying the particulars thereof in detail.
 
(e)    Date of Termination. “Date of Termination” means the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be; provided, however, that (i) if Executive’s employment hereunder is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies Executive of such
termination and (ii) if Executive’s employment hereunder is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be.
 
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6.    Obligations of the Company upon Termination.
 
(a)    Death. If Executive’s employment hereunder is terminated by reason of
Executive’s death, this Agreement shall terminate without further obligations to
Executive’s legal representatives under this Agreement, other than those
obligations accrued or earned and vested (if applicable) by Executive as of the
Date of Termination, including, for this purpose (i) Executive’s Base Salary
through the Date of Termination at the rate in effect on the Date of Termination
disregarding any reduction in Base Salary in violation of this Agreement, and
(ii) any compensation previously deferred by Executive and not yet paid by the
Company (including accrued interest thereon) and any accrued vacation pay not
yet paid by the Company (such amounts specified in clauses (i) and (ii) are
hereinafter referred to as “Accrued Obligations”). All such Accrued Obligations
shall be paid to Executive’s estate or beneficiary, as applicable, in a lump sum
in cash within 30 days of the Date of Termination. In addition, if Executive’s
employment is terminated by reason of Executive’s death, Executive’s estate will
have one (1) year to exercise any options vested or earned as of the Date of
Termination and all unvested or otherwise unearned options (whether in
connection with the Employee Options or the Performance Option) will terminate
on the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, Executive’s family shall be entitled to receive benefits at
least equal to the most favorable benefits provided by the Company and any of
its subsidiaries to surviving families of employees of the Company and such
subsidiaries under such plans, programs, practices and policies relating to
family death benefits, if any, in accordance with the most favorable plans,
programs, practices and policies of the Company and its subsidiaries in effect
on the date of Executive’s death with respect to other key employees of the
Company and its subsidiaries and their families.
 
(b)    Disability. If Executive’s employment is terminated by reason of
Executive’s Disability, this Agreement shall terminate without further
obligations to Executive, other than those obligations accrued or earned and
vested (if applicable) by Executive as of the Date of Termination, including for
this purpose, all Accrued Obligations. All such Accrued Obligations shall be
paid to Executive in a lump sum in cash within 30 days of the Date of
Termination. In addition, if Executive’s employment is terminated by reason of
Executive’s Disability, Executive or his personal representative will have one
(1) year to exercise any options vested or earned as of the Date of Termination
and all unvested or otherwise unearned options (whether in connection with the
Employee Options or the Performance Option) will terminate on the Date of
Termination. Anything in this Agreement to the contrary notwithstanding,
Executive shall be entitled after the Disability Effective Date to receive
disability and other benefits at least equal to the most favorable of those
provided by the Company and its subsidiaries to disabled employees and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, in accordance with the most favorable plans,
programs, practices and policies of the Company and its subsidiaries in effect
on or after the Effective Date or, if more favorable to Executive and/or
Executive’s family, as in effect at any time thereafter with respect to other
key employees of the Company and its subsidiaries and their families.
 
(c)    Cause. If Executive’s employment shall be terminated for Cause, this
Agreement shall terminate without further obligations to Executive other than
those obligations accrued or earned and vested (if applicable) by Executive as
of the Date of Termination, including for this purpose all Accrued Obligations,
including any vested Employee Options or vested Performance Options. All such
Accrued Obligations shall be paid to Executive in a lump sum in cash within 30
days of the Date of Termination. Notwithstanding anything herein to the
contrary, if Executive’s employment is terminated for Cause, Executive will have
thirty (30) days to exercise any options vested or earned as of the Date of
Termination and all unvested or otherwise unearned options (whether in
connection with the Employee Options or the Performance Options) will terminate
on the Date of Termination.
 
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(d)    Other than for Good Reason. If Executive terminates employment other than
for Good Reason, this Agreement shall terminate without further obligations to
Executive, other than those obligations accrued or earned and vested (if
applicable) by Executive through the Date of Termination, including for this
purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to
Executive in a lump sum in cash within 30 days of the Date of Termination.
Notwithstanding anything herein to the contrary, if Executive’s employment is
terminated for other than Good Reason by Executive, Executive will have one (1)
year to exercise any options vested or earned as of the Date of Termination and
all unvested or otherwise unearned options (whether arising from the Employee
Options or the Performance Options) will terminate on the Date of Termination.
 
(e)    Good Reason or Other Than for Cause. If the Company shall terminate
Executive’s employment hereunder other than for Cause or if Executive shall
terminate his employment hereunder for Good Reason:
 
(i)    the Company shall pay to Executive in a lump sum in cash within thirty
(30) days (or such longer period necessary for the release referred to in
Section 9(f) to become irrevocable) after the Date of Termination all such
Accrued Obligations;
 
(ii)    the Company shall, for a period of one year after the Date of
Termination continue to pay the Base Salary and benefits to Executive and/or
Executive’s family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 4(b)(iii) including health insurance and life insurance, in accordance
with the most favorable plans, practices, programs or policies of the Company
and its subsidiaries in effect on the Date of Termination; provided that the
Company shall not be required to provide a benefit or benefits under this
Section (other than continuation of Base Salary) to the extent Executive is
reemployed during such one year period and such subsequent employer provides a
comparable benefit or benefits; and
 
(iii)    in addition to the foregoing, (A) all of Executive’s unvested Employee
Options or Performance Options shall immediately vest, and (B) all of
Executive’s options (whether arising from the Employee Options or the
Performance Option) as of the Date of Termination shall remain exercisable for
two (2) years after such Date of Termination.
 
(f)    Failure to Complete Equity Raise. Notwithstanding anything in this
Agreement to the contrary, Executive hereby agrees to forego any current payment
of his Base Salary as set forth in Section 4(b), or any coverage and/or benefits
under any and all medical insurance, life insurance, and pension plans of the
Company until the earlier of: (A) the closing of a capital raise by the Company
in a minimum aggregate gross proceeds of $6.0 million (the “Next Equity
Financing”); and (B) September 30, 2006; provided, that such Base Salary shall
accrue and be payable upon the earlier to occur. In the event the Next Equity
Financing is not successfully completed by September 30, 2006, either party may
terminate this Agreement by providing notice to the other party by October 15,
2006. If this Agreement is terminated pursuant to this Section 6(f), Executive
shall be entitled to any Accrued Obligations, including vested Employee Options
and Executive shall not be entitled to any additional severance.
 
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(g)    Change of Control. All of Executive’s unvested options shall immediately
vest upon completion of a Change of Control, unless, at the time of completion
such Change of Control transaction, the unvested options are substituted or
continued by the acquiror, regardless of whether Executive’s employment is
terminated.
 
7.    Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Executive’s continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices, provided by Company,
the Company or any of their respective subsidiaries and for which Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as
Executive may have under any stock option, restricted stock or other agreements
with Company, the Company or any of their respective subsidiaries. Amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any plan, policy, practice or program of Company, the Company or any of their
respective subsidiaries at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy practice or program.
 
8.    Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against Executive or others.
In no event shall Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to Executive under any
of the provisions of this Agreement.
 
9.    Certain Covenants of Executive.
 
(a)    As used in Section 9 and Section 10, the Company shall include the
Company and each corporation, partnership, or other entity that controls the
Company, is controlled by the Company, or is under common control with the
Company (in each case “control” meaning the direct or indirect ownership of 50%
or more of all outstanding equity interests).
 
(b)    While Executive is employed by the Company and, following the termination
of Executive’s employment for any reason, until the first anniversary of the
Date of Termination, Executive will not, directly or indirectly:
 
(i)    employ or attempt to employ any director, officer, or employee of the
Company, or otherwise interfere with or disrupt any employment relationship
(contractual or other) of the Company;
 
(ii)    solicit, request, advise, or induce any present or potential customer
(defined by those companies from which the Company has either solicited business
or have prepared marketing proposals for the solicitation of business within the
past 12 months prior the Date of Termination), supplier, or other business
contact of the Company to cancel, curtail, or otherwise change its relationship
with the Company; or
 
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(iii)    publicly criticize or disparage in any manner or by any means the
Company or its management, policies, operations, products, services, practices,
or personnel.
 
(c)    Executive hereby acknowledges and agrees that all non-public information
and data of the Company, including without limitation that related to product
and service formulation, customers, pricing, sales, and financial results
(collectively, “Trade Secrets”) are of substantial value to the Company, provide
it with a substantial competitive advantage in its business, and are and have
been maintained in the strictest confidence as trade secrets. Except as
permitted by the Board, or as appropriate in the performance of Executive’s
duties in the normal course of business, Executive shall not at any time
disclose or make accessible to anyone any Trade Secrets.
 
(d)    Executive acknowledges and agrees that this Section 9 and each provision
hereof are reasonable and necessary to ensure that the Company receives the
expected benefits of this Agreement and that violation of this Section will harm
the Company to such an extent that monetary damages alone would be an inadequate
remedy. Consequently, in the event of any violation or threatened violation by
Executive of any provision of this Section, the Company shall be entitled to an
injunction (in addition to all other remedies it may have) restraining Executive
from committing or continuing such violation. If any provision or application of
this Section is held unlawful or unenforceable in any respect, this Section
shall be revised or applied in a manner that renders it lawful and enforceable
to the fullest extent possible.
 
(e)    Upon termination of Executive’s employment for any reason, Executive
covenants to resign from the Board effective no later than the Termination Date.
 
(f)    Prior to the payment of any amount pursuant to Section 6, Executive shall
have executed the release in the form set forth as Exhibit A (with the blanks
appropriately filled in) and the release, which shall except out those claims
related to Executive’s vested Employee Options or vested Performance Options and
Accrued Obligations, shall have become irrevocable.
 
10.    Creations.
 
(a)    Executive hereby transfers and assigns to the Company (or its designee)
all right, title, and interest of Executive in and to every idea, concept,
invention, and improvement (whether patented or not) conceived by Executive and
all copyrighted or copyrightable matter created by Executive during the Term
hereof that relates to the Company’s business (collectively, “Creations”).
Executive shall communicate promptly and disclose to the Company, in such form
as the Company may request, all information, details, and data pertaining to
each Creation. Every copyrightable Creation, regardless of whether copyright
protection is sought or preserved by the Company, shall be “work for hire” as
defined in 17 U.S.C. § 101 and the Company shall own all rights in and to such
matter throughout the world, without the payment of any royalty or other
consideration to Executive or anyone claiming through Executive.
 
(b)    All right, title, and interest in and to any and all trademarks, trade
names, service marks, and logos adopted, used, or considered for use by the
Company during Executive’s employment (whether or not developed by Executive) to
identify the Company’s products or services (collectively, the “Marks”) and all
other materials, ideas, or other property conceived, created, developed,
adopted, or improved by Executive solely or jointly during Executive’s
employment by the Company and relating to its business, shall be owned
exclusively by the Company. Executive shall not have, and will not claim to
have, any right, title, or interest of any kind in or to the Marks or such other
property.
 
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(c)    Executive shall execute and deliver to the Company such formal transfers
and assignments and such other documents as the Company may request to permit
the Company (or its designee) to file and prosecute such registration
applications and other documents it deems useful to protect its rights under
this Agreement. Any idea, copyrightable matter, or other property relating to
the Company’s business and disclosed by Executive prior to the first anniversary
of the Date of Termination shall be deemed to be governed hereby unless proved
by Executive to have been first conceived and made after the Date of
Termination. 
 
(d)    Executive acknowledges and understands that this Agreement does not apply
to any invention that qualifies fully under the provisions of the Illinois
Employee Patent Act, 765 ILCS 1060 seq. (i.e., an invention for which no Company
equipment, supplies, facility, or trade secret information was used and which
was developed entirely on the employee's own time and (1) does not relate to
Company business and (2) does not result from any work performed by Executive
for the Company).
 
11.    Successors.
 
(a)    This Agreement is personal to Executive and without the prior written
consent of the Company shall not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive’s legal representatives.
 
(b)    This Agreement shall inure to the benefit of and be binding upon Company
and the Company and their respective successors and assigns.
 
(c)    The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of its
business and/or assets to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
 
12.    Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach of this Agreement, other than claims for specific
performance or injunctive relief pursuant to Section 9, shall be settled by
arbitration conducted in Chicago, Illinois, and judgment upon any award rendered
by the arbitrator may be entered in any Illinois state or United States federal
court sitting in Chicago, Illinois.
 
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13.    Tax and Legal Considerations.
 
(a)    Golden Parachute Gross-Up Payment. In the event it shall be determined
that any payments due under this Agreement would be subject to an excise tax
imposed by Section 4999 of the Code, or any interest or penalties (an “Excise
Tax”), then Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by Executive of Federal
and state income tax and Excise Tax imposed upon the Gross-Up Payment, Executive
will have received an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon such payments. All determinations required to be made under this
Section 13(a), including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to a Change in Control
of the Corporation (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Corporation and Executive. Any Gross-Up
Payment, as determined pursuant to this Section 13(a), shall be paid by the
Company to Executive within ten (10) days of the determination. The
determination by the Accounting Firm shall be binding upon the Corporation and
Executive.
 
(b)    Deferred Compensation Restrictions. It is intended that any amounts
payable under this Agreement shall comply with the provisions of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and the treasury
regulations promulgated thereunder. To avoid any penalties or excise tax on
Executive as imposed by Section 409A, required payments to Executive upon
termination of his employment shall be distributed on the later of (i) the dates
specified in this Agreement or (ii) six (6) months after Executive’s Date of
Termination. The term “termination of employment” and other similar terms used
in this Agreement shall be construed to have the same meaning as is given to the
term “Separation from Service” in Section 409A. Executive and the Company agree
to cooperate to make such other amendments to the terms of this Agreement as may
be necessary to avoid the imposition of penalties and additional taxes under
Section 409A of the Code.
 
14.    Miscellaneous.
 
(a)    This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois, without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
 
(b)    All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
 

If to Executive:
Thomas G. Hudson

60 Gideons Point Road
Tonka Bay, Minnesota, 55331
 
 
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With a copy to:
Philip T. Colton

Winthrop & Weinstine, P.A.
225 South Sixth Street
Suite 3500
Minneapolis, Minnesota 55402

If to the Company:
Capital Growth Systems, Inc.

50 East Commerce Drive
Suite A
Schaumburg, Illinois 60173

With a copy to:
Timothy R. Lavender

Kelley Drye & Warren LLP
333 West Wacker Drive
Suite 2600
Chicago, Illinois 60606

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressees.

(c)    The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
 
(d)    The Company may withhold from any amounts payable under this Agreement
such Federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
 
(e)    Executive’s failure to insist upon strict compliance with any provision
hereof shall not be deemed to be a waiver of such provision or any other
provision thereof.
 
(f)    Words or terms used in this Agreement which connote the masculine gender
are deemed to apply equally to female executives.
 
(g)    If any legal action or other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the prevailing party shall be entitled to recover reasonable attorneys' fees,
court costs and out-of-pocket expenses incurred in connection with that action
or proceeding, in additional to any other relief which it or they may be
entitled.
 
(h)    Failure by either party to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
remedy hereunder at any time be deemed a waiver or relinquishment of such right
or remedy.
 
(i)    If any provision of this Agreement, as applied to any party or to any
circumstance, shall be found by a court to be void, invalid or unenforceable,
the same shall in no way affect any other provision of this Agreement or the
application of any such provision in any other circumstance, or the validity or
enforceability of this Agreement.
 
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(j)    This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns. Except as expressly provided herein, the
rights, benefits and obligations of Executive under this Agreement are personal
to him, and any voluntary or involuntary alienation, assignment or transfer by
Executive shall be null and void.
 
(k)    This Agreement contains the entire understanding of the parties hereto
relating to the subject matter contained herein and supersedes all prior and
collateral agreements, understandings, statements and negotiations of the
parties. Each party acknowledges that no representations, inducements, promises
or agreements, oral or written, with reference to the subject matter hereof have
been made other than as expressly set forth herein. This Agreement may not be
modified or rescinded except by a written agreement signed by both parties.
 

[Remainder of page is blank.]
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IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused those present
to be executed in its name on its behalf, all as of the day and year first above
written.

        EXECUTIVE       /s/ Thomas G. Hudson   Name: Thomas G. Hudson      
CAPITAL GROWTH SYSTEMS, INC.      
   
   
    By:   /s/ Lee Wiskowski   

--------------------------------------------------------------------------------

Name: Lee Wiskowski    Title: Co-Chief Executive Officer   Date: June 28, 2006

 
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EXHIBIT A

RELEASE AGREEMENT

Capital Growth Systems, Inc. (the “Company”) and Thomas G. Hudson (“Executive”)
agree as follows:

WHEREAS, the Company and Executive are parties to that certain Employment
Agreement dated June 28, 2006 (the “Employment Agreement”); and

WHEREAS, the Company and Executive have agreed to terminate the Employment
Agreement releasing each other from all further obligations except those
specifically identified therein as surviving such termination.

THEREFORE, in consideration of the covenants and obligations set forth below,
the Company and Executive agree as follows:

1.    Separation from Employment. Executive’s employment with the Company will
terminate on _________________.

2.    Severance. The Company agrees to pay Executive severance benefits in
accordance with the terms of the Employment Agreement commencing as soon as
practicable following the expiration of the rescission period referred to below.

3.    Release of Claims. After adequate opportunity to review this Release
Agreement and to obtain the advice of legal counsel of Executive’s choice,
Executive hereby releases, acquits and forever discharges the Company, and all
of its directors, officers, agents, employees, affiliates, parents, successors
and assigns, from any and all liability whatsoever arising from or relating to
(i) his employment by the Company, (ii) his separation from employment with the
Company, or (iii) any other claim or liability, excluding liabilities from
claims arising under this Release Agreement or under Sections 6(d) and 9 of the
Employment Agreement, including those claims related to Executive’s vested
Employee Options, vested Performance Options and Accrued Obligations. Subject to
the foregoing, by this Release, Executive gives up any right to make a claim,
bring a lawsuit, or otherwise seek money damages or court orders as a result of
his employment by the Company, his separation from employment with the Company,
or otherwise. Executive hereby acknowledges and intends that this Release
applies to any statutory or common law claims which have arisen through the date
of Executive’s signature below, including but not limited to, any and all claims
of unpaid wages, stock options, wrongful termination, defamation, intentional or
negligent infliction of emotional distress, negligence, breach of contract,
fraud, and any claims under the Age Discrimination in Employment Act (ADEA),
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Illinois Human Rights Act (IHRA), the Family and Medical Leave Act, the
Employee Retirement Income Security Act, and any other local, state or federal
statutes. Executive acknowledges that this Release includes all claims Executive
is legally permitted to release and as such does not apply to any claim for
reemployment benefits, nor does it preclude Executive from filing a charge of
discrimination with the state Department of Human Rights or the federal Equal
Employment Opportunity Commission although Executive would not be able to
recover any damages if Executive filed such a charge. This Release includes but
is not limited to all claims relating to Executive’s employment and the
separation of Executive’s employment. This Release Agreement shall be binding
upon Executive and upon his heirs, administrators, representatives, executors,
successors and assigns. Notwithstanding anything to the contrary contained
herein, in no event shall this Release Agreement constitute a release by
Executive of his rights with respect to accrued benefits to which he would
otherwise be entitled under any of the Company's employee benefit plans,
programs or other employee benefit arrangements (excluding any severance plans
or arrangements).

16

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4.    Entire Agreement. This Release Agreement contains the entire agreement
between Executive and the Company with respect to the subject matter hereof. No
modification or amendment to this Release Agreement shall be valid or binding
unless made in writing and signed by the parties. This Release Agreement will be
interpreted under the laws of Illinois.

5.    Notification of Rescission Rights.

a)    This Release Agreement contains a release of certain legal rights which
Executive may have under the ADEA or the IHRA. Executive should consult with an
attorney regarding such release and other aspects of this Release Agreement
before signing.

b)    The termination of Executive’s employment by the Company will not be
affected by Executive’s acceptance or failure to accept this Release Agreement.
If Executive does not accept the terms hereof, or if Executive revokes his
acceptance of this Release Agreement, the Company will not provide to him the
benefits described herein.

c)    Executive has twenty-one (21) days to consider whether or not to sign this
agreement, starting from the date he first receives a copy of this agreement.
Executive may sign this agreement at any time during this twenty-one (21) day
period.

d)    After Executive has accepted this Release Agreement by signing it, he may
revoke his acceptance for a period of fifteen (15) days after the date he signed
this Release Agreement. This Release Agreement will not be effective until this
fifteen (15) day revocation period has expired.

e)    If Executive wishes to revoke his acceptance of this Release Agreement he
must notify the Company in writing within the fifteen (15) day revocation
period. Such notice must be delivered to the Company in person or mailed by
certified mail, return receipt requested, addressed to: Capital Growth Systems,
Inc., 50 East Commerce Drive, Suite A, Schaumburg, Illinois 60173, Attention:
Board of Directors.  If Executive fails to properly deliver or mail such written
revocation as instructed, the revocation will not be effective.

17

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I first received a copy of this Release Agreement on _____________________.

Date:____________________  ________________________________
Thomas G. Hudson

I agree to accept the terms of this Release Agreement.

Date:____________________  ________________________________
Thomas G. Hudson

CAPITAL GROWTH SYSTEMS, INC.

By:_____________________________
Name:
Title:
Date: