EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is entered into this 24th day of December, 2009
(the “Agreement”), by and among Capital Growth Systems, Inc., a Florida
corporation (“CGSI”), Global Capacity Group, Inc. a Texas corporation (“GCG”)
and Global Capacity Direct, LLC (f/k/a Vanco Direct USA, LLC) a Delaware limited
liability company (“Vanco” and together with CGSI and GCG, each a “Seller” and
collectively, the “Sellers”), and Global Telecom & Technology Americas, Inc., a
Virginia corporation (“Buyer”).
 
R E C I T A L S:

A.           GCG or Vanco have entered into contracts with those customers set
forth on Exhibit A to provide point to point circuits for the transmission of
data (“Circuits”) pursuant to a service level agreement.  Each such service
level agreement is hereinafter referred to as a “Customer Contract” with the
customer of the Seller subject to the Customer Contract being a “Customer.”
 
B.           In order to provide the Circuit(s) for each Customer Contract, one
or more of the Sellers has entered into a master service agreement with each of
the providers of telecommunications connectivity with respect to such Circuit(s)
(each such entity being a “Supplier” and each point of connection within a
Circuit provided by the Supplier is hereinafter referred to as a “Circuit
Leg”).  The contractual obligation of each of the Sellers with respect to each
of the Circuit Legs is hereinafter referred to as a “Supplier Contract”, a list
of which is set forth on Exhibit B.
 
C.           Both GCG and Vanco hold domestic and international Section 214
authorizations from the U.S. Federal Communications Commission (“FCC”) and
certificates of public convenience and necessity or the equivalent from various
state telecommunications regulatory commissions (the “State Commissions” and,
collectively with the FCC, the “Telecom Regulatory Authorities”), as necessary
for them to lawfully engage in the business of providing Circuits for their
Customers.  The regulatory approval necessary from the FCC for the assignment of
each Circuit to Buyer hereunder is hereinafter referred to as an “FCC Approval”.
 
D.           The Sellers desire to assign and otherwise transfer to Buyer, and
Buyer desires to receive from the Sellers, each Customer Contract, subject to
the corresponding Supplier Consent (as defined below), in each case on the terms
and subject to the conditions set forth herein, with each such assignment being
referred to hereafter as an “Assignment” and which Assignment will be
conditioned upon: (a) receipt from the applicable Customer of its written
consent to the Assignment of its Customer Contract from the applicable Seller to
Buyer, in a form reasonably acceptable to Buyer (each, a “Customer Consent”), if
required under the terms and conditions of such Customer Contract (if no consent
is required for the Assignment of a Customer Contract under the terms and
conditions thereof, then the applicable Customer shall be provided with prior
notice of the Assignment in accordance with the terms and conditions of such
Customer Contract and applicable law, in a written notice in a form reasonably
satisfactory to Buyer, but Customer Consent shall not be required with respect
to such Customer Contract); (b) receipt from the Supplier(s) of connectivity
related to the applicable Customer Contract(s) of an agreement, to be effective
as of the date of the Assignment of that Customer Contract and in a form
reasonably satisfactory to Buyer, providing that: (i) there are no outstanding
costs, fees, taxes or other obligations under the Supplier Contract covering the
Circuits provided under such Customer Contract (“Circuit Supplier Obligations”)
or if there are Circuit Supplier Obligations, a statement of the amount thereof
(which shall be applied as a credit against the purchase price for the
assignment of the Customer Contract corresponding to such Circuit Supplier
Obligation pursuant to the terms of Section 2.1(a) below; provided, however,
that in no event shall the aggregate amount of Circuit Supplier Obligations with
respect to any Closing, together with the Customer Deposit(s) (as defined below)
with respect to such Closing, be greater than the aggregate Purchase Price (as
defined below) for the Circuits being purchased by Buyer at the applicable
Closing); (ii) the applicable Seller shall not be liable for any costs, fees,
taxes or other obligations under the Supplier Contract covering the Circuit Legs
provided under such Customer Contract, solely to the extent arising
 

 
 

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out of provision of such Circuit Legs to Buyer after the Closing Date with
respect to such Supplier Contract; and (iii) the applicable Supplier will
provide the Circuit Leg(s) covered by such Supplier Contract to Buyer under
Buyer’s existing contract with such Supplier (or a new contract to be entered
into between the Supplier and Buyer if no Supplier Contract presently exists
with Buyer) for at least the remaining term thereof on terms no more costly per
month than prior to the Assignment, unless Buyer accepts other terms in its sole
discretion (each, a “Supplier Consent”) (each Customer Consent and Supplier
Consent with respect to a Customer Contract or Supplier Contract is referred to
collectively as a “Contractual Consents” for such Customer Contract or Supplier
Contract); and (c) receipt of the FCC Approval with respect to such Assignment.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, Buyer and each Seller hereby agree as follows:
 
ARTICLE I
ASSIGNMENT AND ASSUMPTION
 
1.1   Assignment of Purchased Assets.  Upon the terms and subject to the
conditions set forth herein, at each Closing (as defined herein), the applicable
Seller shall assign and deliver to Buyer, and Buyer shall assume, free and clear
of all liens, mortgages, pledges, easements, conditional sale or other title
retention agreements, defects in title, covenants or other restrictions of any
kind (collectively, “Encumbrances”), only the following assets of the Sellers
(collectively, the “Purchased Assets”):
 
(a) each of the Customer Contracts and all rights thereunder related to services
rendered following the Closing at which such Customer Contract is assigned to
Buyer hereunder, including all of the applicable Seller’s rights, claims or
causes of action against third parties relating to each such Customer Contract;
 
(b) copies of all books and records in the Sellers’ possession relating to the
Customer Contracts, including a tab-delimited Microsoft Excel spreadsheet, in
form reasonably satisfactory to Buyer, with the billing and other information
concerning the Customers (collectively, the “Books and Records”); and
 
(c) any deposit(s) previously provided by the applicable Customer(s) to any of
the Sellers with respect to the Customer Contracts (the “Customer Deposits”).
 
1.2   Excluded Assets.  Buyer is purchasing only the Purchased Assets referred
to in Section 1.1, and is not purchasing any other asset of any of the Sellers
(all such assets not being purchased by Buyer pursuant to this Agreement are
collectively referred to as the “Excluded Assets”).
 
1.3   Assumed Liabilities.  Buyer hereby agrees to assume only the Liabilities
of the Sellers under each Customer Contract assigned to Buyer hereunder, in each
case solely to the extent relating to circumstances or events first occurring or
existing after the Closing at which such Customer Contract is assigned to Buyer
hereunder (and specifically excluding: (a) any Liabilities for any breach of or
default under any such Customer Contract by any of the Sellers that occurred
prior to such Closing; or (b) any violation of law by any of the Sellers that
occurred prior to the Closing) (collectively, the “Assumed Liabilities”).  For
purposes of this Agreement, “Liability” or “Liabilities” means any direct or
indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility, either accrued,
absolute, contingent, mature, unmature or otherwise and whether known or
unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated,
secured or unsecured.
 
1.4   Excluded Liabilities.  Except for the Assumed Liabilities, Buyer shall not
assume or otherwise be obligated to pay, perform or otherwise discharge any
Liability of any Seller (all such Liabilities being herein called the “Excluded
Liabilities”).  Without limiting the generality of the foregoing, the Excluded
Liabilities include: (a) any Liabilities of any of the Sellers under any
Customer Contract relating to circumstances or events
 

 
 
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occurring or existing on or prior the Closing at which such Customer Contract is
assigned to Buyer hereunder; (b) any outstanding costs, fees, taxes or other
obligations under any Supplier Contract covering the Circuits provided under any
Customer Contract assigned to Buyer hereunder as of the Closing at which such
Customer Contract is assigned to Buyer hereunder; and (c) any Liability under
any Bulk Sales Law (as defined below).  Notwithstanding anything to the contrary
herein, to the extent that any Circuit Supplier Obligations are deducted from
the Purchase Price at any Closing hereunder, then the amount of such Circuit
Supplier Obligations shall be an Assumed Liability under this Agreement for
which the Seller Indemnified Parties are entitled to indemnification from Buyer
under Article IX in accordance with the terms and conditions thereof.
 
1.5   Non-Assigned Purchased Assets.  Notwithstanding anything to the contrary
in this Agreement, if, despite the parties each having satisfied their
respective obligations under Section 8.2 (Regulatory and Other Approvals):  (i)
Closing does not occur with respect to any Customer Contract by March 31, 2010
(the “Outside Date”), or (ii) Seller is unable to obtain a release of lien from
the holders of debt secured with a collateral pledge of any Customer Contract by
the Outside Date, then: (a) this Agreement shall not constitute an assignment or
transfer of such Customer Contract; and (b) the Supplier Consent under the
Supplier Contract covering the Circuits provided under such Customer Contract
will be deemed to have been rescinded solely with respect to such Customer
Contract.
 
1.6   Revenue.  If any of the Sellers receives any revenue (other than any
revenue for which Buyer has received a credit pursuant to Section 2.1(a)) that
is attributable to any services provided by Buyer under any of the Customer
Contracts on or after the Closing with respect to such Customer
Contract  (“Buyer Revenue”), it shall hold such Buyer Revenue in trust for Buyer
and, as soon as reasonably practicable after receipt thereof, pay all of such
Buyer Revenue over to Buyer, by check or wire transfer of immediately available
funds.  If Buyer receives any revenue that is attributable to any services
provided by any of the Sellers under any of the Customer Contracts prior to the
Closing with respect to such Customer Contract (“Seller Revenue”), it shall hold
such Seller Revenue in trust for the Sellers and, as soon as reasonably
practicable after receipt thereof, pay all of such Seller Revenue over to the
Sellers, by check or wire transfer of immediately available funds.  If either
the Sellers or Buyer receives any revenue that is not designated by the
applicable Customer as either Buyer Revenue or Seller Revenue and is not
otherwise reasonably identifiable as either Buyer Revenue or Seller Revenue, the
receiving party shall provide written notice thereof to the other party, contact
the applicable Customer and otherwise use commercially reasonable efforts to
determine whether such payment is Buyer Revenue or Seller Revenue, provide
written notice to the other party of the determination and, if applicable, make
payment to the other party as described above.
 
1.7   Bulk Sales Laws.  Buyer and the Sellers each hereby waive, to the fullest
extent allowable under applicable law, compliance with the requirements of the
bulk sales or bulk transfer laws of any jurisdiction which may be applicable to
the transactions contemplated by this Agreement (“Bulk Sales Law”).
 
ARTICLE II
PURCHASE AND SALE
 
2.1   Purchase Price.
 
(a)   The aggregate purchase price for all the Purchased Assets shall be eight
million  dollars ($8,000,000) (the “Purchase Price”), consisting of payment by
Buyer to the applicable Seller of the Purchase Price for each Circuit under each
Customer Contract being assigned to Buyer hereunder, as set forth next to the
name of such Customer Contract and such Circuit on Exhibit A hereto (the
Purchase Price for each such Circuit being a “Circuit Purchase Price”), from
which shall be deducted:
 
(i)   the amount of any prepayments received by any of the Sellers on or prior
to the Closing with respect to the Customer Contract(s) being assigned to Buyer
hereunder for services to be rendered under such Customer Contract(s) following
the Closing with respect to such Customer Contract; and
 

 
 
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(ii)   the amount of any outstanding Circuit Supplier Obligations under the
Supplier Contract(s) covering the Circuits provided under the Customer
Contract(s) being assigned to Buyer hereunder as of the Closing with respect to
each such Customer Contract (which deducted amount shall be paid by Buyer to the
applicable Supplier(s) at such Closing by wire transfer of funds as payment
against the Supplier Contract(s) in question).
 
(b)   In the event that, despite the parties each having satisfied their
respective obligations under Section 8.2 (Regulatory and Other Approvals), the
Customer Consent is not obtained for one or more of the Customer Contracts and
corresponding Circuits included on Exhibit A hereto (each, a “Non-Purchasable
Circuit”), the Sellers shall have the right, after providing at least ten (10)
Business Days prior written notice to Buyer, to replace such Non-Purchasable
Circuit(s) and instead assign to Buyer a circuit(s) within Sellers’ inventory
which has a Monthly Recurring Margin (defined as the gross monthly revenue
derived from such circuit minus the gross monthly vendor cost incurred by such
circuit) equal or greater to that of such Non-Purchasable Circuit(s), that is,
in each case, reasonably acceptable to Buyer.
 
2.2   Closings.
 
(a)   Closings of the purchases and sales by Buyer and the Sellers of Customer
Contracts under this Agreement (each, a “Closing” and collectively, the
“Closings”) shall occur as set forth in this Section 2.1.  The date on which
each Closing is actually held is sometimes referred to herein as its “Closing
Date.”
 
(b)   Subject to the fulfillment or waiver of the conditions set forth in
Articles V and VI, the initial Closing (the “Initial Closing”) shall be held at
the offices of the Sellers at 10:00 am (central time) two (2) business days
after the date on which: (i) the FCC Approval has been provided by the FCC; and
(ii) both  Contractual Consents (i.e., the Customer Consent and the Supplier
Consent) have been obtained with respect to Customer Contract(s) collectively
covering Circuit(s) with an aggregate Circuit Purchase Price that both: (A) is
at least seventy-five percent (75%) of the Purchase Price, and (B) results in
Net Proceeds (as defined below) of at least four million dollars ($4,000,000)
(collectively, the “Initial Closing Customer Contracts”); provided, however,
that in no event will the Initial Closing occur after the Outside Date.  For
purposes of this Agreement, “Net Proceeds” means, with respect to the applicable
Circuits, the aggregate Purchase Price for such Circuits minus the aggregate
Circuit Supplier Obligations amount (if any) with respect to such Circuits.  At
the Initial Closing, the Sellers shall transfer to Buyer any Customer Deposit(s)
with respect to the Initial Closing Customer Contract(s).
 
(c)   If less than all of the Customer Contracts are assigned by the Sellers to
Buyer at the Initial Closing, then an additional Closing shall be held on the
two (2) week anniversary of the Closing Date of the Initial Closing (the “First
Subsequent Closing”), with respect to the Customer Contract(s), if any, for
which both Contractual Consents were not obtained by the Closing Date of the
Initial Closing but have been obtained by the Closing Date of the First
Subsequent Closing  and the fulfillment or waiver of the conditions set forth in
Articles V and VI has occurred (collectively, the “First Subsequent Closing
Customer Contracts”).
 
(d)   If less than all of the Customer Contracts are assigned by the Sellers to
Buyer at the Initial Closing and the First Subsequent Closing, then an
additional Closing shall be held on the two (2) week anniversary of the Closing
Date of the First Subsequent Closing (the “Second Subsequent Closing” and,
together with the First Subsequent Closing, the “Subsequent Closings”), with
respect to the Customer Contract(s), if any, for which both Contractual Consents
were not obtained by the Closing Date of the First Subsequent Closing but have
been obtained by the Closing Date of the Second Subsequent Closing and the
 

 
 
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fulfillment or waiver of the conditions set forth in Articles V and VI has
occurred (collectively, the “Second Subsequent Closing Customer Contracts”).
 
(e)   Notwithstanding anything to the contrary in this Agreement, in no event
will any Customer Contract for which the applicable Customer has provided to any
Seller a disconnect notice or other notice of termination be assigned to Buyer
under this Agreement or otherwise be included in the Purchased Assets.
 
2.3   Seller Initial Closing Deliverables.  At the Initial Closing, the Sellers
shall deliver to Buyer:
 
(a)   a certificate, dated as of the Closing Date for the Initial Closing, in
form and substance reasonably satisfactory to Buyer, certifying that: (i) the
conditions to Buyer’s obligation to consummate the Initial Closing set forth in
Section 2.2(b) and Article V have been satisfied (a “Seller Initial Closing
Certificate”); and (ii) attached thereto are correct and complete copies of the
resolutions evidencing all approvals of the board of directors/board of managers
and stockholders/equity holders required under applicable law and the
organizational documents of each of the Sellers in connection with the execution
and delivery of this Agreement and performance and consummation of the
transactions contemplated hereby;
 
(b)   evidence reasonably satisfactory to Buyer that all of the conditions to
Buyer’s obligation to consummate the Initial Closing set forth in Section 2.2(b)
and Article V have been satisfied, including copies of: (i) the Customer
Consent(s) relating to the Customer Contract(s) being assigned to Buyer at the
Initial Closing, duly executed by the applicable Customer(s) (or proof of
sending of notice of assignment if Customer Consent is not required under
applicable law and the terms and conditions of the applicable Customer
Contract); (ii) evidence reasonably satisfactory to Buyer of the Supplier with
respect to each Supplier Contract covering the Circuits provided to the
Customers under the applicable Customer Contracts(s) having either: (A) agreed
to supply such Circuits to Buyer under an existing contract with Buyer, or (B)
entered into a new contract with Buyer, on terms reasonably acceptable to Buyer,
under which such Supplier will provide such Circuits to Buyer, in each case for
a term no less than the remaining term of the corresponding Customer Contracts),
duly executed by the applicable Seller and the applicable Supplier (each, an
“Initial Closing Supplier Consent”); (iii) documents reasonably satisfactory to
Buyer evidencing release by the Lenders of all of their respective security
interest(s) in the Customer Contract(s) being assigned to Buyer at the Initial
Closing; and (iv) the Lender Consent(s) with respect to assignment of the
Customer Contract(s) being assigned to Buyer at the Initial Closing, duly
executed by the applicable Lenders;
 
(c)   such other bills of sale, assignments and other instruments of transfer or
conveyance as Buyer may reasonably request or as may be otherwise necessary to
evidence and effect the sale, assignment, transfer, conveyance and delivery to
Buyer of the Customer Contract(s) being assigned to Buyer at the Initial
Closing;
 
(d)   the Books and Records; and
 
(e)   any Customer Deposit(s) with respect to the Initial Closing Customer
Contract(s); provided, however, that: (i) the Sellers shall be entitled, in lieu
of delivering such Customer Deposits to Buyer, to instead provide a credit for
such amount against the Purchase Price to be paid at such Closing, in which
event Buyer shall assume the liability to the applicable Customers for such
Customer Deposits; provided, however, that in no event shall the aggregate
Customer Deposit(s) with respect to any Closing, together with the aggregate
amount owed to Supplier(s) with respect to such Closing (as described in Recital
D hereto), exceed the Purchase Price for such Closing.
 
2.4   Buyer Initial Closing Deliverables.  At the Initial Closing, Buyer shall
deliver to the Sellers:
 

 
 
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(a)   a certificate, dated as of the Closing Date for the Initial Closing, in
form and substance reasonably satisfactory to the Sellers, certifying that the
conditions to the Sellers’ obligation to consummate the Initial Closing set
forth in Section 2.2(b) and Article VI have been satisfied (the “Buyer Initial
Closing Certificate”);
 
(b)   the aggregate Purchase Price with respect to the Circuits under the
Customer Contract(s) being assigned to Buyer at the Initial Closing, by wire
transfer of immediately available funds to the account(s) of the applicable
Seller(s);
 
(c)   the Assignment of each Customer Contract being assigned to Buyer at the
Initial Closing, duly executed by Buyer;
 
(d)   the Initial Closing Supplier Consents relating to the Supplier Contract(s)
covering the Circuits provided to Customers under the Customer Contracts(s)
being assigned to Buyer at the Initial Closing, duly executed by Buyer; and
 
(e)   to the extent that the Sellers elect to have Buyer assume the liability
for the Customer Deposit(s) with respect to the Customer Contract(s) being
assigned to Buyer at such Closing as noted in Section 2.3(e) above, Buyer hereby
covenants and agrees that such liability shall be borne solely by Buyer and not
by any Seller.
 
2.5   Seller Subsequent Closing Deliverables.  At each Subsequent Closing, the
Sellers shall deliver to Buyer:
 
(a)   a certificate, dated as of the Closing Date for such Subsequent Closing,
in form and substance reasonably satisfactory to Buyer, certifying that the
conditions to Buyer’s obligation to consummate such Subsequent Closing set forth
in Section 2.2(c) or (d) (as applicable) and Article V have been satisfied
(each, a “Seller Subsequent Closing Certificate” and, together with the Seller
Initial Closing Certificate, the “Seller Closing Certificate”);
 
(b)   evidence reasonably satisfactory to Buyer that all of the conditions to
Buyer’s obligation to consummate such Subsequent Closing set forth in Section
2.2(c) or (d) (as applicable) and Article V have been satisfied, including
copies of: (i) the Customer Consent(s) relating to the Customer Contract(s)
being assigned to Buyer at such Subsequent Closing, duly executed by the
applicable Customer (or due evidence that Customer ; (ii) evidence reasonably
satisfactory to Buyer of the Supplier with respect to each Supplier Contract
covering the Circuits provided to the Customers under the applicable Customer
Contracts(s) having either: (A) agreed to supply such Circuits to Buyer under an
existing contract with Buyer, or (B) entered into a new contract with Buyer, on
terms reasonably acceptable to Buyer, under which such Supplier will provide
such Circuits to Buyer, in each case for a term no less than the remaining term
of the corresponding Customer Contracts), duly executed by the applicable Seller
and the applicable Supplier (each, a “Subsequent Closing Supplier Consent”);
(iii) documents reasonably satisfactory to Buyer evidencing release by the
Lenders of all of their respective security interest(s) in the Customer
Contract(s) being assigned to Buyer at such Subsequent Closing; and (iv) the
Lender Consent(s) (as defined below) with respect to Assignment of the Customer
Contract(s) being assigned to Buyer at such Subsequent Closing, duly executed by
the applicable Lender(s);
 
(c)   such other bills of sale, assignments and other instruments of transfer or
conveyance as Buyer may reasonably request or as may be otherwise necessary to
evidence and effect the sale, assignment, transfer, conveyance and delivery of
the Customer Contracts being assigned to Buyer at such Subsequent Closing; and
 
(d)   any Customer Deposit(s) with respect to such Subsequent Closing Customer
Contract(s); provided, however, that: (i) the Sellers shall be entitled, in lieu
of delivering such Customer
 

 
 
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Deposits to Buyer, to instead provide a credit for such amount against the
Purchase Price to be paid at such Closing, in which event Buyer shall assume the
liability to the applicable Customers for such Customer Deposits; provided,
however, that in no event shall the aggregate Customer Deposit(s) with respect
to any Closing, together with the aggregate amount owed to Supplier(s) with
respect to such Closing (as described in Recital D hereto), exceed the Purchase
Price for such Closing.
 
2.6   Buyer Subsequent Closing Deliverables.  At each Subsequent Closing, Buyer
shall deliver to the Sellers:
 
(a)   a certificate, dated as of the Closing Date for such Subsequent Closing,
in form and substance reasonably satisfactory to the Sellers, certifying that
the conditions to the Sellers’ obligation to consummate such Subsequent Closing
set forth in Section 2.2(c) and Article VI have been satisfied (the “Buyer
Subsequent Closing Certificate” and, together with the Buyer Initial Closing
Certificate, the “Buyer Closing Certificate”);
 
(b)   the aggregate Purchase Price with respect to the Circuits under the
Customer Contract(s) being assigned to Buyer at such Subsequent Closing, by wire
transfer of immediately available funds to the account(s) of the applicable
Seller(s);
 
(c)   the Assignment of each Customer Contract being assigned to Buyer at such
Subsequent Closing, duly executed by Buyer;
 
(d)   the Subsequent Closing Supplier Consent(s) relating to the Supplier
Contract(s) covering the Circuits provided to Customers under the Customer
Contracts(s) being assigned to Buyer at such Subsequent Closing, duly executed
by Buyer; and
 
(e)   to the extent that the Sellers elect to have Buyer assume the liability
for the Customer Deposit(s) with respect to the Customer Contract(s) being
assigned to Buyer at such Closing as noted in Section 2.5(d) above, Buyer hereby
covenants and agrees that such liability shall be borne solely by Buyer and not
by any Seller.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
 
Each Seller hereby jointly and severally represents and warrants to Buyer as
follows:
 
3.1   Existence; Good Standing, Authority; Enforceability.
 
(a)   Each Seller is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all required power and authority to own or lease its
properties and assets and to conduct its business as presently conducted.  Each
Seller is duly qualified to do business and in good standing as a foreign entity
in all jurisdictions in which the failure to be so qualified would be reasonably
likely to have a material adverse effect on such Seller.
 
(b)   Each Seller has full authority and capacity to execute, deliver and
perform this Agreement and all of the other documents contemplated hereby to be
executed by such Seller.  The execution, delivery and performance by each Seller
of this Agreement and all of the other documents contemplated hereby to be
executed by such Seller have been duly authorized by all required action on the
part of such Seller (including approval by its board of directors, board of
managers, stockholders or equity holders, as applicable).
 
(c)   This Agreement and all of the other documents contemplated hereby to be
executed by each Seller have been duly executed and delivered by such Seller and
this Agreement is, and each of such other
 

 
 
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documents upon execution and delivery will be, legal, valid and binding
obligations of such Seller, enforceable against such Seller in accordance with
its terms.
 
3.2   Non-Contravention; Third Party Notices, Consents and Approvals.
 
(a)   Neither the execution and delivery of this Agreement and the other
documents contemplated hereby to be executed by each Seller, nor the
consummation of any of the transactions contemplated hereby or thereby, nor
compliance with or fulfillment of the terms, conditions and provisions hereof or
thereof, will: (i) violate, conflict with, result in a breach of the terms,
conditions or provisions of, or constitute a default under: (A) under the
Organizational Documents of any Seller, (B) any agreement, instrument, right,
restriction, license or obligation to which any Seller is a party or any of the
Purchased Assets is subject or by which any Seller is bound, except for the
required consents of the Agent and/or corresponding lenders under the existing
loan agreements (and corresponding loan documents) to which the Sellers are
subject with each of: (I) ACG CGS, L.L.C., as Agent for itself and any other
named senior lenders (collectively, the “Senior Lenders”); and (II) the purchase
agreements with the holders of each of the Amended and Restated March
Debentures, July Debentures, November Debentures and VPP Debentures, as those
terms are defined in the Purchase Agreement, dated as of July 31, 2009, pursuant
to which CGSI issued secured debentures (collectively, the “Subordinated
Lenders” and, together with the Senior Lenders, the “Lenders”) (collectively,
the “Lender Consents”); (C) any judgment, order or decree of any state, federal
or local court or tribunal to which any Seller is a party or any of the
Purchased Assets is subject or by which any Seller is bound, or (D) any federal
or state law affecting any Seller or the Purchased Assets (with the
understanding by Buyer that no representation or warranty is being made as
to  the compliance of the contemplated transactions with the applicable state
telecommunications laws and is contingent upon obtaining the FCC Approval); or
(ii) result in the creation or imposition of any Encumbrance upon any of the
Purchased Assets.  For purposes of this Agreement: (i) “Person” means any
natural person, firm, partnership, association, corporation, company, limited
liability company, trust, business trust, governmental authority or other
entity; and (ii) the “Organizational Documents” of a Person means: (A) its
articles of incorporation, certificate of incorporation, certificate of
formation or similar document(s) filed with a governmental authority, which
filing forms or organizes the Person; and (B) its bylaws, limited liability
company operating agreement, partnership agreement, trust agreement or similar
document(s), whether or not filed with a governmental authority, which organize
or govern the internal affairs of such Person, as amended to date and in effect
at the time in question.
 
(b)   Except for: (i) the Regulatory Approvals; (ii) required Lender Consents;
and (iii) the Contractual Consents, no notice to, or consent of or with, any
governmental entity or, with respect to any of the Supplier Contracts or any of
the Customer Contracts, any third Person, is required to be obtained by any
Seller in connection with the execution and delivery by the Sellers of this
Agreement and the other documents contemplated hereby to be executed by each
Seller, or the consummation of the transactions contemplated hereby or thereby.
 
3.3   Customer Contracts and Supplier Contracts.  Each Customer Contract and
each Supplier Contract is the legal, valid, binding obligation of the parties
thereto, enforceable against each such party in accordance with its
terms.  Except as set forth on Schedule 3.3(a)and except for instances in which
the Sellers are past due on payment terms under Supplier Contracts and instances
in which Customers are less than ninety (90) days past due on payment terms
under Customer Contracts, no party to any Customer Contract or Supplier Contract
is in material breach or default thereof, and no event has occurred that, with
or without notice or lapse of time, would constitute a material breach or
default thereunder, or permit termination, modification or acceleration
thereunder.  Except as set forth on Schedule 3.3(b) and except for normal churn
in the ordinary course of business, none of the Customers or the Suppliers has,
within the one year period prior to the date of this Agreement, made any adverse
change in its relationship with any of the Sellers as it relates to the Customer
Contracts (for Customers) or Supplier Contracts (for Suppliers).  Except as set
forth on Schedule 3.3(c), none of the Sellers has received any notice or other
communication stating, and no Seller otherwise has any reason to believe that,
any of the Customers or Suppliers will terminate its relationship with the
Sellers or make any other
 

 
 
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adverse change in its relationship with any of the Sellers as it relates to any
of the Customer Contracts or Supplier Contracts.
 
3.4   Litigation.  Except as set forth on Schedule 3.4, there are no lawsuits,
claims, proceedings or investigations (collectively, “Proceedings”) pending or,
to the Sellers’ knowledge, threatened against or affecting any Seller in respect
of, or that would reasonably be expected to affect, any of the Customer
Contracts or Supplier Contracts nor, to the best knowledge of each Seller, is
there any basis for any of the same, and there is no lawsuit, claim or
proceeding pending in which any Seller is the plaintiff or claimant which
relates to any of the Customer Contracts or Supplier Contracts.  For purposes of
this Agreement, the Sellers’ “knowledge” (including similar phrases) means the
knowledge that any employee, officer or director of any Seller actually has or
the knowledge that any such person would be reasonably expected to obtain after
making the same reasonable inquiry that a reasonably prudent business person
would have made in the management and conduct of a business in order to gain a
reasonable understanding of the matter.
 
3.5   Accounts Receivable and Payable.  Schedule 3.5(a) sets forth a complete
and correct accounts receivable aging schedule for each of the accounts
receivable of the Sellers relating to any of the Customer Contracts.  Except as
set forth on Schedule 3.5(b), all of the accounts receivable of the Sellers
relating to any of the Customer Contracts: (a) represent valid obligations of
Customers arising from bona fide transactions entered into in the ordinary
course of business; and (b) except for disputes in the ordinary course of
business between the Sellers and Customers that could not reasonably be expected
to adversely affect Buyer’s ability to collect on its accounts receivable from
the applicable Customer after the applicable Closing, are current and
collectible in full, without any counterclaim or set off, when due (and in no
event later than ninety (90) days after the date hereof).  No Seller has
modified, discounted, set off or accelerated the collection of any of its
accounts receivable relating to any of the Customer Contracts.  Except as set
forth on Schedule 3.5(c), no accounts payable of any Seller related to any of
the Supplier Contracts has been outstanding for more than ninety (90) days.  No
Seller has delayed any of the payment terms or otherwise paid any of the
accounts payable of such Seller outside the ordinary course of its business
consistent with past practice.
 
3.6   Title.  Except as set forth on Schedule 3.6, the Sellers are the sole
beneficial and lawful owner of all of the Purchased Assets, no Seller has
transferred to any other Person any ownership rights or ownership interest in
any of the Purchased Assets, and the Sellers have good, valid and marketable
title to all of the Purchased Assets, free and clear of any and all Encumbrances
except for the encumbrances of the Senior Lenders and Subordinated Lenders.  The
sale by the Sellers to Buyer of the Purchased Assets pursuant to this Agreement
will convey to Buyer good, valid and marketable title to the Purchased Assets,
free and clear of any and all Encumbrances, subject to waiver of liens in favor
of the Senior Lenders and Subordinated Lenders, copies of which shall be
delivered by the Sellers to Buyer at the Closings in accordance with Sections
2.3(b)(iii) and 2.5(b)(iii).
 
3.7   Telecom Law.
 
(a)   Except to the extent that would not reasonably be expected to prevent,
delay or otherwise impede the ability of the parties to obtain the FCC Approval:
(i) the Sellers are each in compliance, in all material respects, with
applicable Telecom Law and each Seller has, in the past, conducted its business
in compliance, in all material respects, with applicable Telecom Law; and (ii)
no investigation, review or proceeding by any Telecom Regulatory Authority with
respect to any Seller in relation to any actual or alleged violation of Telecom
Law is pending or, to the Sellers’ knowledge, threatened, nor has any Seller
received any notice from any Telecom Regulatory Authority indicating an
intention to conduct the same.
 
(b)   For purposes of this Agreement, “Telecom Law” means: (i) the
Communications Act of 1934, as amended (including by the Telecommunications Act
of 1996); and (ii) any rules, regulations or policies promulgated by the FCC or
any State Commission.
 

 
 
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3.8   Sufficient Capital.  The Sellers reasonably believe that they have, and as
of each Closing hereunder reasonably believe that they will continue to have,
sufficient capital to fund operations of their business in the ordinary course
of business consistent with past practice.
 
3.9   Brokers.  No Seller is obligated to pay any brokerage, finder’s or other
fee or commission in connection with the transactions contemplated by this
Agreement for which Buyer is or could become liable.
 
3.10   No Other Representations.  NONE OF THE SELLERS HAS MADE OR IS MAKING ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE III.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer hereby represents and warrants to the Sellers as follows:
 
4.1   Existence; Good Standing; Authority; Enforceability.  Buyer is a
corporation, duly organized, validly existing and in good standing under the
laws of the Commonwealth of Virginia.  Buyer has full corporate power and
authority to execute, deliver and perform this Agreement.  The execution,
delivery and performance of this Agreement by Buyer has been duly authorized and
approved by Buyer and does not require any further authorization or consent of
Buyer.  This Agreement has been duly authorized, executed and delivered by Buyer
and is the legal, valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms.
 
4.2   Non-Contravention.  Neither the execution and delivery of this Agreement
nor the consummation of any of the transactions contemplated hereby nor
compliance with or fulfillment of the terms, conditions and provisions hereof
will conflict with, result in a breach of the terms, conditions or provisions
of, or constitute a default, or result in the creation or imposition of any
Encumbrance upon any of its assets under: (a) the Organizational Documents of
Buyer, (b) any agreement, instrument, right, restriction, license or obligation
to which Buyer is a party or to which any of its assets is subject, (c) any
judgment, order or decree of any state, federal or local court or tribunal to
which Buyer is a party or to which any of its assets is subject, or (d) any
federal or state law applicable to Buyer or its assets.
 
4.3   Brokers.  Buyer is not obligated to pay any brokerage, finder’s or other
fee or commission in connection with the transactions contemplated by this
Agreement for which any Seller is or could become liable
 
4.4   No Other Representations.  BUYER HAS NOT MADE AND IS NOT MAKING ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV.
 
ARTICLE V
CONDITIONS PRECEDENT TO BUYER’S PERFORMANCE
 
The obligation of Buyer to consummate each of the Closings under this Agreement
is subject to the satisfaction, at or before such Closing, of all the conditions
set out below in this Article V, unless waived by Buyer in writing on or prior
to the Closing Date for such Closing.
 
5.1   Representations and Warranties; Covenants.  The representations and
warranties of the Sellers contained in Article III shall have been true and
correct when made and be true and correct in all respects (if qualified by
materiality) or true and correct in all material respects (if not qualified by
materiality), as of the
 

 
 
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Closing Date for such Closing (except with respect to those representations and
warranties that are made as of a specific date, only as of such date) and the
Sellers shall have each duly performed and complied in all material respects
with all covenants and agreements contained herein required to be performed or
complied with by them at or before such Closing.
 
5.2   No Changes or Destruction of Property.  Between the date hereof and the
Closing Date for such Closing, there shall have been no material adverse change
in the Purchased Assets that have not yet, as of the time of such Closing, been
purchased by Buyer hereunder.
 
5.3   No Restraint or Litigation.  No action, suit, investigation or proceeding
shall have been instituted or threatened to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated hereby.
 
5.4   FCC Approval; Contractual Consents.  The FCC Approval shall have been
obtained and each of the Contractual Consents applicable to such Closing shall
have been obtained.
 
5.5   Closing Deliverables.  Buyer shall have received each of the items
relating to such Closing described in Section 2.3 or 2.5, as applicable.
 
ARTICLE VI
CONDITIONS PRECEDENT TO SELLERS’ PERFORMANCE
 
The obligations of the Sellers to consummate each of the Closings under this
Agreement are subject to the satisfaction, at or before such Closing, of all the
conditions set out below in this Article VI, unless waived by the Sellers in
writing on or prior to the Closing Date for such Closing.
 
6.1   Representations and Warranties; Covenants.  The representations and
warranties of Buyer contained in Article IV shall have been true and correct
when made and be true and correct in all respects (if qualified by materiality)
or true and correct in all material respects (if not qualified by materiality),
as of the Closing Date for such Closing (except with respect to those
representations and warranties that are made as of a specific date, only as of
such date) and Buyer shall have duly performed and complied in all material
respects with all covenants and agreements contained herein required to be
performed or complied with by it at or before such Closing.
 
6.2    No Restraint or Litigation.  No action, suit, investigation or proceeding
shall have been instituted or threatened to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated hereby.
 
6.3   Closing Deliverables.  The Sellers shall have received each of the items
relating to such Closing described in Section 2.4 or 2.6, as applicable.
 
ARTICLE VII
TERMINATION
 
7.1   Methods of Termination.  This Agreement may be terminated as follows:
 
(a)   by mutual consent of Buyer and the Sellers;
 
(b)   by any party at any time following the Outside Date if all of the Closings
have not occurred by the Outside Date; provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be available to any
party whose breach of any provision of this Agreement shall have caused, or
resulted in, the failure of the Closings to have occurred by the Outside Date
(for the avoidance of doubt, provided that the Seller have not breached their
respective obligations under Section 8.2 (Regulatory and Other
 

 
 
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Approvals), the failure of the Sellers to obtain any necessary Lender Consents,
Contractual Consents or the FCC Approval shall not constitute a breach of this
Agreement);
 
(c)   by Buyer, upon a breach of any representation and warranty, covenant or
agreement of the Sellers set forth in this Agreement, or if any representation
and warranty of the Sellers set forth in this Agreement shall become untrue, in
either case such that the conditions to the obligations of Buyer to consummate
each of the Closings set forth in Section 5.1 would not be satisfied as of the
time of such breach or as of the time such representation and warranty shall
have become untrue; provided, however, that if such breach or untruth is curable
by the Sellers prior to the Outside Date through the exercise of commercially
reasonable efforts, then Buyer may not terminate this Agreement under this
Section 7.1(c) prior to ten (10) Business Days following written notice having
been provided by Buyer to the Sellers of such breach or untruth (and then only
if such breach or untruth has not been cured);
 
(d)   by the Sellers, upon a breach of any representation and warranty, covenant
or agreement of Buyer set forth in this Agreement or if any representation and
warranty of Buyer set forth in this Agreement shall become untrue, in either
case such that the conditions to the Sellers’ obligation to consummate each of
the Closings set forth in Section 6.1 would not be satisfied as of the time of
such breach or as of the time such representation and warranty shall have become
untrue; provided, however, that if such breach or untruth is curable by Buyer
prior to the Outside Date through the exercise of commercially reasonable
efforts, then the Sellers may not terminate this Agreement under this Section
7.1(c) prior to ten (10) Business Days following written notice having been
provided by the Sellers to Buyer of such breach or untruth (and then only if
such breach or untruth has not been cured);
 
(e)   by either Buyer, on the one hand, or the Sellers, on the other hand, if
any condition to such party’s obligation to consummate a Closing set forth in
Article V or Article VI (as applicable) shall have become incapable of
satisfaction (other than as provided in Sections 7.1(c) and (d)); provided,
however, that the right to terminate this Agreement under this Section 7.1(e)
shall not be available to any party whose breach of any provision of this
Agreement shall have caused, or resulted in, such Closing condition to have
become incapable of satisfaction; or
 
(f)   by the Sellers pursuant to Section 8.5(a).
 
For purposes of this Agreement, the term “Business Day” means each Monday,
Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close.  Any termination made in accordance with Section
7.1(b), (c), (d), (e) or (f) shall be effective upon delivery of a notice of
termination by the terminating party to each other party, which notice shall
refer to the subsection of this Section 7.1 pursuant to which such termination
is being made.
 
7.2   Procedure Upon Termination.  In the event of termination pursuant to
Section 7.1 hereof, this Agreement shall terminate without further action by
either of Buyer and the Sellers hereto.  If this Agreement is terminated as
provided herein:
 
(a)   each party will, at its election, either destroy (and certify such
destruction in a certificate executed by an officer of such party) or return all
documents and other material relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same; and
 
(b)   neither Buyer nor the Sellers shall be under any liability to the other
Party hereto by reason of this Agreement, its negotiation or its said
termination, whether for costs, expenses, damages or otherwise, except that: (i)
any termination of this Agreement after the Initial Closing or any Subsequent
Closing shall not affect the respective rights and obligations of the parties as
they relate to the Closings that have occurred prior to the termination of this
Agreement; and (ii) if such termination results from the willful breach
 

 
 
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by a party of any of its representations and warranties or covenants and
agreements set forth in this Agreement, such party shall be fully liable for any
and all Losses incurred or suffered by the other parties as a result of such
willful breach, provided however, that notwithstanding anything to the contrary
contained in this Agreement, the maximum liability of the Sellers on the one
hand or the Buyer on the other hand for failure to close the transactions
contemplated in this Agreement for any reason shall be $500,000 in the
aggregate.
 
ARTICLE VIII
ADDITIONAL AGREEMENTS
 
8.1   Conduct Prior to Closing.  Except as directed by Buyer pursuant to this
Agreement, from the date of this Agreement until the earlier to occur of: (x)
the Closing; or (y) the termination of this Agreement pursuant to and in
accordance with Section 7.1 (the “Pre-Closing Period”), each of the Sellers
shall, solely to the extent that it would reasonably be expected to affect any
of the Customer Contracts or the Supplier Contracts, conduct its business only
in the ordinary course of business consistent with past practice, preserve
intact its business organization and relationships with customers, suppliers and
others having business dealings with it and keep available the services of each
of its present officers and employees.  Without limiting the generality of the
foregoing, except as directed by Buyer pursuant to this Agreement, during the
Pre-Closing Period, the Sellers shall each:
 
(a)   not amend, waive, terminate, or take any action that would constitute a
breach under, any Customer Contract or Supplier Contract, or enter into any new
Customer Contract or Supplier Contract without the prior written consent of
Buyer, which consent shall not be unreasonably withheld (provided that an
appropriate adjustment shall be made to the Purchase Price for any new Customer
Contract that is substituted for an existing Customer Contract in accordance
with Section 2.1(b) to the extent that the gross margin is reduced or increased,
consistent with the pricing methodology for such existing Customer Contract
implied by Exhibit A hereto);
 
(b)   not permit any Encumbrance to encumber any of the Purchased Assets, or
otherwise subject any of the Purchased Assets to any Encumbrance, except for
Encumbrances incurred in connection with the refinancing of existing debt or an
additional financing, in each case where a condition to such refinancing or
additional financing is the waiver, in form and substance reasonably acceptable
to Buyer, of all Encumbrances thereunder with respect to the sale of the
Purchased Assets to Buyer;
 
(c)   solely to the extent relating to or affecting the Customer Contracts or
the Supplier Contracts: (i) pay accounts payable and other obligations and
liabilities only in the ordinary course of business consistent with past
practices; and (ii) not modify the terms of, discount, setoff or accelerate the
collection of any accounts receivable or any other debts owed to or claims held
by such Seller, subject to: (A) the terms of Section 8.1(a) above, and (B) the
Sellers’ right, with Buyer’s consent (not to be unreasonably withheld), to make
modifications in the ordinary course of business intended to improve the
Sellers’ position with respect to Customer Contracts; and
 
(d)   not take any action or fail to take any action that would result in any of
the representations and warranties of the Sellers set forth in Article III to
not continue to be true and correct as of each Closing;
 
Nothing contained in this Section 8.1 shall give Buyer, directly or indirectly,
the right to control or direct the operations of any of the Sellers and the
Sellers shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over their respective operations.
 

 
 
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8.2   Regulatory and Other Approvals.
 
(a)   During the Pre-Closing Period, Buyer and the Sellers shall, in good faith
and in a timely manner, use their respective commercially reasonable efforts to
take or cause to be taken all actions, do or cause to be done all things
necessary, proper or advisable, and execute and deliver such documents, as may
be required to cause the Closing conditions contained in Articles V and VI
applicable to such party to be satisfied, and refrain from taking any actions
that would have the effect of delaying, impeding or preventing satisfaction of
any of the Closing conditions contained in Articles V and VI applicable to such
party; provided that Buyer shall not be required to incur any out-of-pocket
expenses in connection with any such matters.
 
(b)   Without limiting the generality of Section 8.2(a), during the Pre-Closing
Period, Buyer and the Sellers shall use their respective commercially reasonable
efforts to make all reasonably necessary or advisable filings with, obtain all
reasonably necessary or advisable waivers, consents and approvals from the FCC
and any other third parties (including the Contractual Consents).
 
(c)   During the Pre-Closing Period, Buyer, on the one hand, and the Sellers, on
the other hand, shall: (i) provide regular written notices to the other party
concerning, and otherwise keep the other party reasonably apprised of, the
status of their process of obtaining the FCC Approval, the Contractual Consents
and any other waivers, consents or approvals to be obtained in connection with
the consummation of the transactions contemplated hereby (which shall include
correct and complete copies of any correspondence or other communications
received from the FCC or any other third party in connection therewith, to the
extent not prohibited by currently existing confidentiality agreements); and
(ii) each provide the other party with the right to review in advance, and
consult with the other party on, any filing, consent or approval request, or
other communication with or to the FCC or any other third party in connection
with their process of obtaining any such waiver, consent or approval.
 
8.3   Non-Solicitation of Employees.  Except as otherwise agreed by the parties,
during the Pre-Closing Period and for a period of two (2) years thereafter, the
Sellers on the one hand (on behalf of themselves and their respective
Affiliates), and Buyer on the other hand (on behalf of Buyer and its
Affiliates), each agree not to directly or indirectly solicit for employment or
performance of services or hire for employment or performance of services any of
the persons employed by Sellers or their Affiliates (in the case of solicitation
or hiring by Buyer or its Affiliates) or any of the persons employed by Buyer or
its Affiliates (in the case of solicitation or hiring by any of Sellers or their
Affiliates); provided, however, that: (i) no general advertisement or general
solicitation (whether directly or through a recruiter), in each case which is
not targeted to the persons referenced above, shall be deemed to be a
solicitation thereof in violation of this Section 8.3; and (ii) either party
shall be entitled to hire any person whose employment has been terminated by the
other party (a resignation by the terminated person shall not be deemed a
termination of employment by the other party for purposes hereof).  The terms of
this Section 8.3 shall survive any termination of this Agreement.  For purposes
of this Agreement, the term “Affiliate” shall have the same meaning as construed
under Rule 405 promulgated under the Securities Act of 1933, as
amended.  Notwithstanding anything to the contrary in this Section 8.3, the
parties agree that Buyer shall have the right to solicit and employ each of the
persons agreed upon by the parties..
 
8.4    Access to Information.  During the Pre-Closing Period, each of the
Sellers shall permit Buyer and its representatives to have full access, during
normal business hours and after reasonable prior notice to the Sellers, to the
properties, books and records of the Sellers, solely to the extent relating to
the Purchased Assets; provided, however, that the parties agree to cooperate so
that any such access does not unreasonably interfere with the conduct of the
business of the Sellers and further agree to comply, with respect to any
information obtained pursuant to this Section 8.4, with the obligations set
forth in the Confidentiality Agreement, dated October 12, 2009, between Buyer
and Capital Growth Systems, Inc. d/b/a Global Capacity.
 

 
 
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8.5   Termination for Convenience; Termination Fee.
 
(a)           The Sellers shall be entitled to terminate this Agreement for any
reason prior to the occurrence of the Initial Closing by providing at least
three (3) days prior written notice thereof to Buyer pursuant to the last
paragraph of Section 7.1 and, in such event shall be obligated to pay to Buyer a
five hundred thousand dollar ($500,000) cash termination fee to Buyer
(the “Termination Fee”) promptly following the termination of this Agreement.
 
(b)           For the avoidance of doubt: (i) termination pursuant to Section
8.5(a) shall not be effective unless and until the Termination Fee has been
received by Buyer; and (ii) Sellers shall not be obligated to pay the
Termination Fee to Buyer if this Agreement is terminated pursuant to Sections
7.1(a), (b), (c), (d) or (e)..
 
8.6   Notification During the Pre-Closing Period of Breaches.  During the
Pre-Closing Period, Buyer, on the one hand, and the Sellers, on the other hand,
will each notify the other as soon as reasonably practicable (and in any event
within three (3) Business Days) after it becomes aware of: (a) any material
breach of any of their respective representations, warranties, covenants or
agreements contained in this Agreement; or (b) any fact or condition that would
cause a condition to the other party’s obligation to consummate the Closing set
forth in Article V or VI to not be satisfied.  No such notice provided shall be
deemed to supplement or amend any of the representations and warranties of the
party providing such notice for purposes of determining whether any of the
conditions set forth in Section 5.1 or Section 6.1, as applicable, have been
satisfied or in any way affect, limit or constitute a waiver of the liability of
such party under this Agreement with respect to the matters set forth in such
notice.
 
              8.7           Non-Competition.  In consideration of the Purchase
Price to be paid by Buyer to the Sellers (which each Seller agrees and
acknowledges constitutes adequate and sufficient consideration), each of the
Sellers covenants and agrees that such Seller will not:
 
(a)   at any time during the two (2) year period after the Closing at which any
Customer Contract is assigned to Buyer hereunder, directly or indirectly provide
to underlying Customer(s) (or any of their affiliates Seller shall not provide
any of the Circuit Legs that are the subject of the Customer Contracts to such
Customers or their affiliates (for the avoidance of doubt, the restrictions in
this Section 8.7 do not prohibit the sale of circuits by Sellers which do not
include the Circuit Legs subject to the Customer Contracts being assigned to
Buyer); or
 
(b)   at any time during the one (1) year period after the Closing at which any
Customer Contract is assigned by Buyer hereunder, directly or indirectly provide
to underlying Customer(s) (or any of their affiliates) any circuits for the
transmission of telecommunications data in or relating to the United States of
America or Canada.
 
Each Seller agrees and acknowledges that its covenants set forth above in this
Section 8.7: (i) are reasonable in geographic and temporal scope and in all
other respects; (ii) are fair to such Seller; and (iii) have been made in order
to induce Buyer to enter into this Agreement and consummate the transactions
contemplated hereby and Buyer would not have entered into this Agreement or
consummated the transactions contemplated hereby, but for the covenants of the
Sellers contained in this Section 8.7.  If, at any time of enforcement of any of
the provisions of this Section 8.7, a court determines that the duration, scope
or area restrictions stated herein are not enforceable under applicable law, the
parties agree that the maximum duration, scope or area (as applicable) permitted
by applicable law shall be substituted for the duration, area or scope (as
applicable) stated herein and
 

 
 
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the court shall be authorized by the parties to revise the restrictions
contained herein to cover such maximum duration, area or scope (as applicable).
 
               8.8    Sales Tax.  Any sales, use, or transfer tax directly
attributable to the sale or transfer of the Purchased Assets shall be paid by
the party statutorily required to pay the same.
 
ARTICLE IX
INDEMNIFICATION
 
9.1   Survival of Representations.  Each of the respective representations and
warranties of the Sellers and Buyer contained in this Agreement shall survive
for a period of eighteen (18) months following the termination of this Agreement
or the applicable Closing, whichever is first, except that: (a) the
representations and warranties of the Sellers set forth in Section 3.1
(Existence; Good Standing; Authority; Enforceability), Section 3.6 (Title to
Assets) and Section 3.9 (Brokers) shall survive indefinitely; and (b) the
representations and warranties of Buyer set forth in Section 4.1 (Existence;
Good Standing; Authority; Enforceability) and Section 4.3 (Brokers) shall
survive indefinitely.  Notwithstanding anything to the contrary in this Section
9.1, if a Notice of Claim has been provided by an Indemnified Party to an
Indemnifying Party concerning the breach of a representation and warranty set
forth in this Agreement prior to the end of the survival period that would
otherwise apply to such representation and warranty, the end of the survival
period of such representation and warranty shall be extended, solely with
respect to such claim and any other claim reasonably related thereto or
concerning the same facts, until such later date as such claim(s) have been
fully and finally resolved in accordance with this Article IX.
 
9.2   Indemnification.
 
(a)   Indemnification by the Sellers.  Subject to the other provisions of this
Article IX, the Sellers shall jointly and severally indemnify Buyer, each of its
Affiliates, and its and their respective directors, officers, employees,
stockholders, partners, members, managers, agents and representatives (each, a
“Buyer Indemnified Party”) for any Losses of such Buyer Indemnified Party
resulting from, arising out of, or relating to: (i) any breach of, or inaccuracy
in, any representation and warranty of any of the Sellers set forth in Article
III; (ii) any breach of any covenant or agreement of any of the Sellers
contained in this Agreement; (iii) any inaccuracy in the Seller Closing
Certificate; or (iv) any of the Excluded Liabilities, provided however that the
maximum liability that Sellers shall have for failure to consummate the Initial
Closing due to any breach of this Agreement  by any of  Sellers causing such
failure to close shall be $500,000 in the aggregate.
 
(b)   Indemnification by Buyer.  Subject to the other provisions of this Article
IX, Buyer shall indemnify the Sellers and each of their respective Affiliates,
directors, officers, employees, stockholders, partners, members, managers,
agents and representatives (each, a “Seller Indemnified Party”) for any Losses
of such Seller Indemnified Party resulting from, arising out of, or relating to:
(i) any breach of, or inaccuracy in, any representation and warranty of Buyer
set forth in Article IV; (ii) any covenant or agreement of Buyer contained in
this Agreement; (iii) any inaccuracy in the Buyer Closing Certificate; or (iv)
any of the Assumed Liabilities, provided however that the maximum liability that
Buyer shall have for failure to consummate the Initial Closing due to any breach
of this Agreement by Buyer causing such failure to close shall be $500,000 in
the aggregate.
 
9.3   Indemnification Claim Procedure.  If any Buyer Indemnified Party or Seller
Indemnified Party, as applicable, in such capacity (the “Indemnified Party”),
learns of any matter that it believes will entitle the Indemnified Party to
indemnification from any of the Sellers or Buyer, as applicable, in such
capacity (the “Indemnifying Party”) under this Article IX, the Indemnified Party
shall provide to Indemnifying Party notice describing the matter in reasonable
detail, including the nature of the claim, the basis for the indemnification
obligation and, to the extent reasonably estimable, the estimated Losses
resulting therefrom (a “Notice of Claim”).  The Indemnifying Party shall have
ten (10) days after its receipt of the Notice of Claim to respond to
 

 
 
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the claim(s) described therein in a written notice to the Indemnified Party (a
“Dispute Notice”) setting forth, in reasonable detail, the Indemnifying Party’s
objection(s) to the claim(s) and its bases for such objection(s).  If the
Indemnifying Party fails to provide a Dispute Notice with such time period, the
Indemnifying Party will be deemed to have conceded the claim(s) set forth in the
Notice of Claim.  If the Indemnifying Party does not dispute, in its Dispute
Notice, all of the claims set forth in the corresponding Notice of Claim, the
Indemnifying Party shall be deemed to have conceded any claims to which it has
not disputed in such Dispute Notice.  If the Indemnifying Party provides a
Dispute Notice within such time period, the Indemnified Party and the
Indemnifying Party shall negotiate in good faith resolution of the disputed
claim(s) for a period of not less than twenty (20) days after the response is
provided.  If the Indemnifying Party and the Indemnified Party are unable to
resolve any such claim(s) within such time period, the Indemnified Party shall
be entitled to pursue any legal remedies available to the Indemnified Party
against the Indemnifying Party with respect to the unresolved claim(s).
 
9.4   Satisfaction of Indemnification Obligations.  Any amount that any
Indemnifying Party is required to pay to any Indemnified Party under this
Article IX shall be paid promptly (and in any event within five (5) days) after
such amount has been determined to be due under this Article IX and any such
payment that is not made in full within such five (5) days period will
thereafter bear interest, compounded annually, at a rate equal to the prime rate
in effect from time to time (as published in The Wall Street Journal) plus two
(2) percentage points, until paid in full.
 
9.5   Materiality and Material Adverse Effect Qualifiers.  All materiality
qualifications contained in the representations and warranties of the parties
set forth in this Agreement (however they may be phrased) shall be taken into
account for purposes of this Article IX solely for purposes of determining
whether a breach of, or in accuracy in, such representation and warranty has
occurred and, if such breach or inaccuracy has occurred, all such materiality
qualifications shall be ignored and not given any effect for purposes of
determining the amount of Losses arising out of or relating to such breach of,
or inaccuracy in, such representation and warranty under this Article IX.
 
9.6   Reliance.  The respective representations and warranties made by the
Sellers in Article III and by Buyer in Article IV are made by each such party
with the knowledge and expectation that the other party is placing complete
reliance thereon in entering into, and performing its obligations under, this
Agreement.  No investigation made by or the benefit of any Indemnified Party or
any of its representatives, nor any information or knowledge acquired or held by
any Indemnified Party, whether the result of any such investigation or otherwise
(including as a result of disclosure of any such information on any disclosure
schedule hereto), shall in any way limit, constitute a waiver of, or a defense
to, any right of such Indemnified Party to receive indemnification pursuant to
this Article IX from the applicable Indemnifying Party with respect to any of
the representations and warranties of the Indemnifying Party set forth in this
Agreement.
 
9.7   Definitions.  For purposes of this Agreement: (a) “Losses” means any and
all losses, costs, obligations, liabilities, settlement payments, awards,
judgments, fines, penalties, damages, Expenses, deficiencies or other charges;
and (b) “Expenses” includes all expenses incurred by a party for court costs,
legal fees, filing fees and other professional fees.
 
ARTICLE X
MISCELLANEOUS
 
10.1   Expenses.  Except as otherwise expressly set forth herein, each of the
parties shall pay all of their respective costs and expenses incurred or to be
incurred by it in negotiating and preparing this Agreement and related documents
and in Closing and carrying out the transactions contemplated by this Agreement.
 
10.2   Headings.  The subject headings of the sections and subsections of this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.
 

 
 
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10.3   Entire Agreement; Amendment; Waiver.  This Agreement, and the Exhibits
attached hereto, constitute the entire agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties
(whether oral or written) with respect to the subject matter hereof, including
any letter of intent, exclusivity agreement, term sheet or memorandum of terms
entered into or exchanged by the parties.  No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by all
the parties which states that it constitutes a supplement, modification or
amendment to this Agreement.  No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.  No
waiver shall be binding unless executed in writing by the party making the
waiver and delivered to the other parties which states that it constitutes a
waiver under this Agreement and specifies the provision hereof being waived.
 
10.4   Counterparts.  This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Counterparts to this
Agreement may be exchanged by facsimile or other electronic transmission method.
 
10.5   No Third Party Beneficiaries.  Nothing in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any Person other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person to any party to this
Agreement, nor shall any provision give any third person any right of
subrogation or action over against any party to this Agreement.
 
10.6   Notices.  All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received:
(a) when delivered, if delivered personally by a commercial messenger delivery
service with verification of delivery, (b) four (4) days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, or (c) one (1) Business Day after delivery to a private courier
service, when delivered to a private courier service providing documented
overnight service, in each case addressed as follows:
 
       To any Seller at:
 
Capital Growth Systems, Inc.
c/o Patrick C. Shutt
200 South Wacker Drive, Suite 1650
Chicago, Illinois 60606
 
       with a copy (which
       shall not constitute 
        notice) to:
 
 
Mitchell D. Goldsmith
Shefsky & Froelich Ltd.
111 E. Wacker Dr., Suite 2800
Chicago, Illinois 60601
     
       To Buyer at:
 
Global Telecom & Technology Americas, Inc.
8484 Westpark Dr., Suite 720
McLean, Virginia 22102
Attention: Christopher McKee, General Counsel
 
       with a copy (which
       shall not constitute
       notice) to:
 
Brad E. Mutschelknaus, Esq.
Kelley Drye & Warren LLP
3050 K Street, N.W., Suite 400
Washington, D.C. 20007
 

 
 
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Any party may change its address for purposes of this Section 10.6 by giving the
other parties written notice of the new address in the manner set forth above.
Each communication transmitted in the manner described in this Section 10.6
shall be deemed to have been provided, received and become effective for all
purposes at the time it shall have been: (x) delivered to the addressee as
indicated by the return receipt (if transmitted by mail) or the affidavit or
receipt of the messenger (if transmitted by personal delivery or courier
service); or (y) presented for delivery to the addressee as so addressed during
normal business hours, if such delivery shall have been rejected, denied or
refused for any reason or, in each case, at such other address as may be
specified in writing to the other parties hereto.

10.7   GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
GOVERNED BY, THE LAWS OF THE STATE OF ILLINOIS.  ANY ACTION TO ENFORCE THE TERMS
OF THIS AGREEMENT SHALL BE LITIGATED IN THE STATE OR FEDERAL COURTS SITUATED IN
COOK COUNTY, ILLINOIS, TO WHICH JURISDICTION AND VENUE EACH OF THE PARTIES
CONSENTS.
 
10.8   WAIVER OF PUNITIVE AND OTHER DAMAGES AND JURY TRIAL.
 
(a)   EXCEPT FOR INDEMNIFICATION FOR SUCH DAMAGES INCURRED BY A PARTY AND
ACTUALLY PAID TO A THIRD PARTY, THE PARTIES EXPRESSLY WAIVE AND FOREGO ANY RIGHT
TO RECOVER PUNITIVE, EXEMPLARY, LOST PROFITS, CONSEQUENTIAL OR SIMILAR DAMAGES
IN ANY PROCEEDING ARISING OUT OF OR RESULTING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
(b)   EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY PROCEEDING ARISING UNDER OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
(c)   EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY PROCEEDING ARISING UNDER OR
RELATING TO THIS AGREEMENT, SEEK TO ENFORCE EITHER OF THE FOREGOING WAIVERS;
(ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS; (iii)
IT MAKES SUCH WAIVERS VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 10.8.
 
10.9   Successors and Assigns.  The rights and obligations of the Sellers and
Buyer under this Agreement shall not be assignable or delegable, without the
written consent of the other parties; provided, however, that Buyer shall have
the right, without the consent of the Sellers but with prior notice to the
Sellers, to: (a) assign its rights and obligations hereunder to any Affiliate
thereof or to any successor of all or substantially all of its businesses or
assets, in each case that assumes this Agreement provided that Buyer agrees to
remain liable to Sellers for any obligations of any assignee of Buyer (or its
assigns) pursuant to this Agreement; or (b) collaterally assign its rights
hereunder to any lender.  Any purported assignment or delegation in violation of
this Section 10.9 will be void.  Subject to the preceding sentences of this
Section 10.9, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns.
 
10.10   Remedies.  Except as noted in the last sentence of this Section 10.10,
each of the parties shall have and retain all rights and remedies, at law or in
equity, including rights to specific performance and
 

 
 
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injunctive or other equitable relief, arising out of or relating to a breach or
threatened breach of this Agreement.  Without limiting the generality of the
foregoing, subject to the last sentence of this Section 10.10, each of the
parties acknowledges that money damages would not be a sufficient remedy for any
breach or threatened breach of this Agreement and that irreparable harm would
result if this Agreement were not specifically enforced.  Therefore, subject to
the last sentence of this Section 10.10, the rights and obligations of the
parties shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and shall be granted in connection therewith, without the necessity
of posting a bond or other security or proving actual damages and without regard
to the adequacy of any remedy at law.  Subject to the last sentence of this
Section 10.10, a party’s right to specific performance or injunctive relief
shall be in addition to all other legal or equitable remedies available to such
party.  Notwithstanding anything to the contrary in this Section 10.10, Buyer
shall not be entitled to the remedy of specific performance to compel the
Sellers to consummate the transactions contemplated by this Agreement in the
event that the Initial Closing does not occur for any reason.
 
10.11   Further Actions.  Subject to the terms and conditions of this Agreement,
each of the parties, at its own cost and expense, in good faith and in a timely
manner, shall use its respective commercially reasonable efforts to take or
cause to be taken all appropriate actions, do or cause to be done all things
necessary, proper or advisable, and execute, deliver and acknowledge such
documents and other papers as may be required to carry out the provisions of
this Agreement and to give effect to the consummation of the transactions
contemplated by this Agreement.
 
10.12   Construction.  This Agreement shall be construed without regard to the
identity of the persons who drafted its various provisions; each and every
provision of this Agreement shall be construed as though all of the parties
participated equally in the drafting of the same, and any rule of construction
that a document is to be construed against the drafting party shall not be
applicable to this Agreement.  Unless otherwise expressly specified in this
Agreement: (a) the words “hereof”, “hereby” and “hereunder,” and correlative
words, refer to this Agreement as a whole and not any particular provision; (b)
the words “include”, “includes” and “including”, and correlative words, are
deemed to be followed by the phrase “without limitation”; (c) the word “or” is
not exclusive and is deemed to have the meaning “and/or”; (d) references in this
Agreement to a “party” means Buyer or any of the Sellers and to the “parties”
means Buyer and all of the Sellers; (e) the masculine, feminine or neuter form
of a word includes the other forms of such word and the singular form of a word
includes the plural form of such word; (f) references to a Person shall include
the successors and assigns thereof; (g) references made in this Agreement to an
Article, Section, Schedule or Exhibit mean an Article or Section of, or a
Schedule or Exhibit to, this Agreement; (h) and (i) any capitalized term used
but not defined in a Schedule or Exhibit to this Agreement shall have the
meaning set forth in this Agreement.
 
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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on the
day and year first above written.
 

 
SELLERS:
 
CAPITAL GROWTH SYSTEMS, INC.
 
By:    /s/ George A. King                          
Name:   George A. King                                 
Title:      President                                         
 
 
 
GLOBAL CAPACITY GROUP, INC.
 
By:    /s/ George A. King                          
Name:   George A. King                                 
Title:      President                                         
                               
 
 
GLOBAL CAPACITY DIRECT, LLC F/K/A VANCO DIRECT USA, LLC
 
By:    /s/ George A. King                          
Name:   George A. King                                 
Title:      President                                         
                                             
 
 
BUYER:
 
GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC.
 
By:    /s/ Chris McKee                              
Name:   Chris McKee                                     
Title:     General Counsel and
Secretary                                                            
 

 
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Exhibit A:

Customer Contracts and Circuits

[attached]

 
 

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Exhibit B:

Supplier Contracts

[attached]

 
 

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