REGISTRATION
      RIGHTS AGREEMENT

     

    This
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 1,
      2007, by and between Capital
      Growth Systems, Inc.,
      a
      Florida corporation with headquarters located at 125 South Wacker Drive, Suite
      300, Chicago, Illinois 60606 (the “Company”), and the undersigned lender
      (“Lender”). 

     

    RECITALS

     

    A.  In
      connection with the Credit Agreement, dated as of January 19, 2007, by and
      among
      the 20/20 Technologies, Inc., a Delaware corporation; 20/20 Technologies I,
      LLC,
      a Delaware limited liability company; Centrepath, Inc., a Delaware corporation;
      Frontrunner Network Systems Corp., a Delaware corporation; Global Capacity
      Group, Inc., a Texas corporation, Nexvu Technologies, LLC a Delaware limited
      liability company; the Company; and Magenta Netlogic Limited, a private limited
      company organized under the laws of the United Kingdom and Lender (the “Credit
      Agreement”), the Company issued to the Lender the Hilco Warrants (as defined in
      the Credit Agreement) which as of the date hereof shall be exchanged for a
      combined warrant (the “Combined Warrant”) and which will be exercisable to
      purchase Warrant Shares (as defined in the Combined Warrant). The Combined
      Warrant and any warrants issued in exchange therefor are collectively referred
      to herein as the “Warrants”.

     

    B.  To
      induce
      the Lender to execute and deliver that certain Waiver and Amendment No. 1 to
      Credit Agreement, the Company has agreed to provide certain registration rights
      under the Securities Act of 1933, as amended, and the rules and regulations
      thereunder, or any similar successor statute (collectively, the “1933 Act”), and
      applicable state securities laws. 

     

    AGREEMENT

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants contained
      herein and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Company and the Lender hereby
      agree as follows: 

     

    1.  Definitions.
      Capitalized terms used herein and not otherwise defined herein shall have the
      respective meanings set forth in the Credit Agreement. As used in this
      Agreement, the following terms shall have the following meanings: 

     

    (a)  “Additional
      Effectiveness Date” means the date an Additional Registration Statement is
      declared effective by the SEC.

     

    (b)  “Additional
      Filing Deadline” means, if Cutback Shares are required to be included in an
      Additional Registration Statement, the date that is the earlier of (i) the
      later
      of (A) six (6) months from the Initial Effectiveness Date or the last Additional
      Effectiveness Date, as applicable and (B) sixty (60) days after the Company
      has
      been informed that substantially all of the Registrable Securities held by
      the
      Investors included in any Registration Statements previously declared effective
      hereunder have been sold in accordance therewith, or (ii) the first date on
      which the Company is permitted by the SEC to register such Cutback
      Shares.

     

    (c)  “Additional
      Registrable Securities” means, (i) any Cutback Shares not previously included in
      a Registration Statement and (ii) any shares of capital stock of the Company
      issued or issuable with respect to such Cutback Shares, as applicable, as a
      result of any stock split, stock dividend, recapitalization, exchange or similar
      event or otherwise, without regard to any limitations on the exercise of the
      Warrants.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)  “Additional
      Registration Statement” means a registration statement or registration
      statements of the Company filed under the 1933 Act covering any Additional
      Registrable Securities.

     

    (e)  “Additional
      Required Registration Amount” means the lesser of (i) any Cutback Shares not
      previously included in a Registration Statement, without regard to any
      limitations on the exercise of the Warrants, and (ii) such number of Registrable
      Securities as the Company is permitted by the SEC to register pursuant to Rule
      415, after the Company has used its reasonable best efforts to register the
      number set forth in the preceding clause (i), subject to Section
      2(c).

     

    (f)  “Business
      Day” means any day other than Saturday, Sunday or any other day on which
      commercial banks in Chicago, Illinois are authorized or required by law to
      remain closed.

     

    (g)  “Closing
      Date” shall have the meaning set forth in the Credit Agreement.

     

    (h)  “Cutback
      Shares” means any of the Initial Registrable Securities not included in all
      Registration Statements previously declared effective hereunder as a result
      of a
      limitation on the maximum number of shares of Common Stock of the Company
      permitted by the SEC to be registered pursuant to Rule 415.

     

    (i)  “Effectiveness
      Date” means the Initial Effectiveness Date or an Additional Effectiveness Date,
      as applicable.

     

    (j)  “Effectiveness
      Deadline” means the Initial Effectiveness Deadline, an Additional Effectiveness
      Deadline, or a Subsequent Effectiveness Deadline, as applicable.

     

    (k)  “Filing
      Deadline” means the Initial Filing Deadline, an Additional Filing Deadline or a
      Subsequent Filing Deadline, as applicable.

     

    (l)  “Initial
      Effectiveness Date” means the date the Initial Registration Statement is
      declared effective by the SEC.

     

    (m)  “Initial
      Effectiveness Deadline” means the date which is 120 days (or 150 days if the
      Registration Statement is reviewed by the SEC) after the Closing
      Date.

     

    (n)  “Initial
      Filing Deadline” means the date that sixty (60) days after the Closing Date.


     

    (o)  “Initial
      Registrable Securities” means (i) the Warrant Shares issued or issuable upon
      exercise of the Warrants; (ii) any capital stock of the Company issued or
      issuable with respect to the Warrant Shares or the Warrants, including, without
      limitation, (1) as a result of any share split, share dividend,
      recapitalization, exchange or similar event or otherwise and (2) including
      shares of capital stock of the Company into which shares of Common Stock (as
      defined in the Warrant) are converted or exchanged and shares of capital stock
      of a successor entity into which the Common Stock are converted or exchanged,
      without regard to any limitations on exercises of Warrants; and (iii) the shares
      of Common Stock of the Company issued in connection with its “Units Offering”
(pursuant to its private placement memorandum dated November 6, 2006, as
      amended, including the mandatory notes converted into Units per the Units
      Offering and the placement agent warrants) , as well as all of the shares of
      Common Stock underlying warrants issued in connection with the Units offering
      and all Common Stock otherwise subject to registration rights pursuant to
      Exhibit A to the form of Registration Rights Agreement contained as an exhibit
      to the Units Offering private placement memorandum—the “Prior Registration
      Rights Agreement:”)—the aggregate number of shares subject to registration
      pursuant to the Prior Registration Rights Agreement is referred to as the “Prior
      Registration Rights Shares.”

     

    
      
        
        

      

      
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    (p)  “Initial
      Required Registration Amount” means the lesser of (i) 100% of the number of
      Warrant Shares issued and issuable pursuant to the Warrants as of the trading
      day immediately preceding the applicable date of determination, without regard
      to any limitations on exercise of the Warrants, or (ii) such maximum number
      of
      shares of Common Stock as the Company is permitted to register by the SEC
      pursuant to Rule 415, after the Company has used its reasonable best efforts
      to
      register the number set forth in the preceding clause (i), subject to Section
      2(c).

     

    (q)  “Initial
      Registration Statement” means a registration statement or registration
      statements of the Company filed under the 1933 Act pursuant to Section 2(a)
      hereof covering the Initial Registrable Securities.

     

    (r)  “Investor”
      or “Investors” means the Lender or any transferee or assignee of any Registrable
      Securities or Warrants, as applicable, to whom the Lender assigns its rights
      under this Agreement and who agrees to become bound by the provisions of this
      Agreement in accordance with Section 9 hereof and any transferee or assignee
      thereof to whom a transferee or assignee of any Registrable Securities or
      Warrants, as applicable, assigns its rights under this Agreement and who agrees
      to become bound by the provisions of this Agreement in accordance with Section
      9
      hereof. Each Investor who may from time to time hold Registrable Securities
      shall have the rights and be subject to the obligations created by this
      Agreement.

     

    (s)  “Outstanding
      Registrable Securities” means the number of Warrant Shares issued and issuable
      pursuant to the Warrants as of the trading day immediately preceding the
      applicable date of determination (without taking into account any limitations
      on
      the exercise of the Warrants (whether set forth in the Warrants or otherwise),
      all subject to adjustment as provided in Section 2(e) hereof.

     

    (t)  “Person”
      means an individual, a limited liability company, a partnership, a joint
      venture, a corporation, a trust, an unincorporated organization and a government
      or any department or agency thereof.

     

    (u)  “register,”
      “registered,” and “registration” refer to a registration effected by preparing
      and filing one or more Registration Statements (as defined below) in compliance
      with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness
      of such Registration Statement(s) by the SEC.

     

    
      
        
        

      

      
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    (v)  “Registrable
      Securities” means the Initial Registrable Securities and any Additional
      Registrable Securities.

     

    (w)  “Registration
      Statement” means a registration statement or registration statements of the
      Company filed under the 1933 Act covering the Registrable
      Securities.

     

    (x)  “Required
      Holders” means the holders of at least a majority of the Registrable
      Securities.

     

    (y)  “Required
      Registration Amount” means either the Initial Required Registration Amount or an
      Additional Required Registration Amount, as applicable.

     

    (z)  “Rule
      415” means Rule 415 under the 1933 Act or any successor rule providing for
      offering securities on a continuous or delayed basis.

     

    (aa)  “SEC”
      means the United States Securities and Exchange Commission.

     

    (bb)  “Unit
      Offering Shares” means the shares of Common Stock of the Company issued by the
      Company in its “Units Offering” (pursuant to its private placement memorandum
      dated November 6, 2006, as amended, including the mandatory notes converted
      into
      Units per the Units Offering and the related placement agent warrants), as
      well
      as all of the shares of Common Stock underlying warrants issued in the Units
      offering and all shares of Common Stock otherwise subject to registration rights
      pursuant to Exhibit A to the form of Registration Rights Agreement contained
      as
      an exhibit to the Units Offering private placement memorandum (the “Prior
      Registration Rights Agreement”).

     

    2.  Registration.

     

    (a)  Initial
      Mandatory Registration.
      The
      Company shall prepare, and, as soon as practicable, but in no event later than
      the Initial Filing Deadline, file with the SEC a Registration Statement on
      Form
      S-3 covering the resale of the Initial Registrable Securities. In the event
      that
      Form S-3 is unavailable for such a registration, the Company shall use such
      other form as is available for such a registration on another appropriate form
      reasonably acceptable to the Required Holders, subject to the provisions of
      Section 2(d) hereof. The Initial Registration Statement prepared pursuant hereto
      shall register for resale at least the number of shares of Common Stock (as
      defined in the Warrant) equal to the Initial Required Registration Amount
      determined as of the date the Registration Statement is initially filed with
      the
      SEC. The Registration Statement shall contain (except if otherwise directed
      by
      the Required Holders) the “Selling Stockholders” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit B; provided that
      the Company may make any changes to such sections as requested by the SEC and
      subject to change by the Investors or by the placement agent for the Units
      Offering, so long as none of such changes are materially inconsistent with
      the
      form attached hereto as Exhibit B or adversely affect any Investor (including,
      without limitation, any restrictions on the manner of disposition). The Company
      shall use its best efforts to have the Initial Registration Statement declared
      effective by the SEC as soon as practicable, but in no event later than the
      Initial Effectiveness Deadline. By 9:30 a.m. New York City time on the Business
      Day immediately following the Effectiveness Date, the Company shall file with
      the SEC in accordance with Rule 424 under the 1933 Act the final prospectus
      to
      be used in connection with sales pursuant to such Registration Statement.
      Notwithstanding anything to the contrary contained in this Agreement, the
      Company shall ensure that, when filed and at all times while effective, each
      Registration Statement and the prospectus used in connection with such
      Registration Statement will not contain any untrue statement of a material
      fact
      or omit to state a material fact necessary to make the statements made, in
      light
      of the circumstances under which such statements were made, not misleading.
      The
      requirements of this Section 2(a) (other than the requirements set forth in
      the
      immediately preceding sentence) shall terminate on the date as of which the
      Investors may sell all of the Registrable Securities owned by the Investors
      without restriction pursuant to Rule 144(k) (or successor thereto) promulgated
      under the 1933 Act, as such rule may be amended from time to time, or the
      Investors may sell all of such Registrable Securities owned by them without
      restriction pursuant to Rule 144 without the requirement for compliance with
      Rule 144(e), (f) or (h) (or successor thereto), as such rules may be amended
      from time to time.

     

    
      
        
        

      

      
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    (b)  Additional
      Mandatory Registrations.
      The
      Company shall prepare, and, as soon as practicable, but in no event later than
      each Additional Filing Deadline, file with the SEC an Additional Registration
      Statement on Form S-3 covering the resale of the Additional Registrable
      Securities not previously registered on a Registration Statement hereunder.
      To
      the extent the staff of the SEC does not permit the Additional Required
      Registration Amount to be registered on an Additional Registration Statement,
      the Company shall file Additional Registration Statements successively trying
      to
      register on each such Additional Registration Statement the maximum number
      of
      remaining Additional Registrable Securities until the Additional Required
      Registration Amount has been registered with the SEC. In the event that Form
      S-3
      is unavailable for such a registration, the Company shall use such other form
      as
      is available for such a registration and reasonably acceptable to the Required
      Holders, subject to the provisions of Section 2(d) hereof. Each Additional
      Registration Statement prepared pursuant hereto shall register for resale at
      least that number of shares of Common Stock equal to the Additional Required
      Registration Amount as of date the Registration Statement is initially filed
      with the SEC. The Company shall use its best efforts to have each Additional
      Registration Statement declared effective by the SEC as soon as practicable
      following the filing thereof, but in any event not later than 75 days following
      the filing thereof or, if the Additional Registration Statement is subject
      to a
      full review by the staff of the SEC, the date that is 105 days following the
      filing thereof (an “Additional Effectiveness Deadline”). Such requirement to
      file an Additional Registration Statement shall terminate on the date as of
      which the Investors may sell all of the Additional Registrable Securities owned
      by them without restriction pursuant to Rule 144(k) (or successor thereto)
      promulgated under the 1933 Act, as such rule may be amended from time to time,
      or the Investors may sell all of the Additional Registrable Securities owned
      by
      them without restriction pursuant to Rule 144 without the requirement for
      compliance with Rule 144(e), (f) or (h) (or successor thereto), as such rules
      may be amended from time to time.

     

    (c)  Allocation
      of Registrable Securities.
      In no
      event shall the Company include any securities other than Registrable Securities
      and Unit Offering Shares on any Registration Statement without the prior written
      consent of the Required Holders. The initial number of Registrable Securities
      included in any Registration Statement and each increase in the number of
      Registrable Securities included therein shall be allocated pro rata among the
      Investors based on the number of such Registrable Securities held by each
      Investor at the time the Registration Statement covering such initial number
      of
      Registrable Securities or increase thereof is declared effective by the SEC.
      In
      the event that an Investor sells or otherwise transfers any of such Investor’s
      Registrable Securities, each transferee shall be allocated a pro rata portion
      of
      the then remaining number of Registrable Securities included in such
      Registration Statement for such transferor. Any Common Shares included in a
      Registration Statement and which remain allocated to any Person which ceases
      to
      hold any Registrable Securities covered by such Registration Statement shall
      be
      allocated to the remaining Investors, pro rata based on the number of
      Registrable Securities then held by such Investors which are covered by such
      Registration Statement. For purposes hereof, the number of Registrable
      Securities held by an Investor includes all Registrable Securities issuable
      upon
      the exercise of Warrants held by such Investor, without regard to any
      limitations on exercise of the Warrants. Notwithstanding anything to the
      contrary contained herein, any reduction in the number of Registrable Securities
      and Unit Offering Shares that would otherwise be included in a Registration
      Statement as a result of a limitation imposed by the SEC pursuant to Rule 415
      shall be allocated pro rata among the Investors and the holders of the Unit
      Offering Shares based upon the number of Registrable Securities or Unit Offer
      Shares held by each such Investor or holder at the time the Registration
      Statement is deemed effective. 

     

    
      
        
        

      

      
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    (d)  Legal
      Counsel.
      Subject
      to Section 5 hereof, the Lender shall have the right to select one legal counsel
      to review and oversee, solely on its behalf, any registration pursuant to this
      Section 2 (“Legal Counsel”), which shall be Katten Muchin Rosenman LLP or such
      other counsel as thereafter designated by the Lender. The Company shall
      reasonably cooperate with Legal Counsel in performing the Company’s obligations
      under this Agreement.

     

    (e)  Ineligibility
      for Form S-3.
      In the
      event that Form S-3 is not available for the registration of the resale of
      Registrable Securities hereunder, the Company shall (i) register the resale
      of
      the Registrable Securities on Form S-1, Form SB-2 or another appropriate form
      reasonably acceptable to the Required Holders and (ii) undertake to register
      the
      Registrable Securities on Form S-3 (by post-effective amendment to the existing
      Registration Statement, or otherwise) as soon as such form is available for
      such
      registration, provided that the Company shall maintain the effectiveness of
      the
      existing Registration Statement then in effect until such time as a Registration
      Statement (or post-effective amendment) on Form S-3 covering the Registrable
      Securities has been declared effective by the SEC.

     

    (f)  Sufficient
      Number of Shares Registered.
      In the
      event the number of shares available under a Registration Statement filed
      pursuant to Section 2(a) hereof is insufficient to cover the resale of all
      of
      the Registrable Securities required to be covered by such Registration Statement
      or an Investor’s allocated portion of the Registrable Securities pursuant to
      Section 2(c) hereof, the Company shall, as soon as practicable, but in any
      event
      (other than with respect to Cutback Shares) not later than fifteen (15) days
      after the necessity therefor arises (a “Subsequent Filing Deadline”) amend the
      applicable Registration Statement, or file a new Registration Statement (on
      the
      short form available therefor, if applicable), or both, so as to cover at least
      the Required Registration Amount as of the trading day immediately preceding
      the
      date of the filing of such amendment or new Registration Statement, in each
      case, as soon as practicable, but in any event (other than with respect to
      Cutback Shares) not later than fifteen (15) days, after the necessity therefor
      arises. The Company shall use its best efforts to cause such amendment and/or
      new Registration Statement to become effective as soon as practicable following
      the filing thereof, but in any event (other than with respect to Cutback Shares)
      not later than seventy-five (75) days following the filing thereof (a
“Subsequent Effectiveness Deadline”). For purposes of the foregoing provision,
      the number of shares available under a Registration Statement shall be deemed
      “insufficient to cover all of the Registrable Securities” if at any time the
      number of shares of Common Stock (as defined in the Warrant) available for
      resale under the Registration Statement is less than 110% of the Outstanding
      Registrable Securities. 

     

    
      
        
        

      

      
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    (g)  Effect
      of Failure to File and Obtain and Maintain Effectiveness of Registration
      Statement.
      If (i)
      a Registration Statement covering the resale of all of the Registrable
      Securities required to be covered thereby and required to be filed by the
      Company pursuant to this Agreement is (A) not filed with the SEC on or before
      the applicable Filing Deadline (a “Filing Failure”) (it being understood that if
      the Company files a Registration Statement without affording an Investor the
      opportunity to review and comment on the same as required by Section 3(c)
      hereof, the Company shall not be deemed to have satisfied this clause (i)(A)
      and
      such event shall be deemed to be a Filing Failure) or (B) not declared effective
      by the SEC on or before the applicable Effectiveness Deadline (an “Effectiveness
      Failure”) (it being understood that if the Business Day immediately following
      the Effectiveness Date the Company shall not have filed a “final” prospectus for
      the Registration Statement with the SEC under Rule 424(b) in accordance with
      Section 2(a) above (whether or not such a prospectus is technically required
      by
      such rule), the Company shall not be deemed to have satisfied this clause (i)(B)
      and such event shall be deemed to be an Effectiveness Failure) or (ii) on any
      day after the Effectiveness Date sales of all of the Registrable Securities
      required to be included on such Registration Statement cannot be made (other
      than during an Allowable Grace Period (as defined in Section 3(r) hereof)
      pursuant to such Registration Statement (including because of a failure to
      keep
      such Registration Statement effective, to disclose such information as is
      necessary for sales to be made pursuant to such Registration Statement, a
      suspension or delisting of (or a failure to timely list) the shares of Common
      Stock on its principal trading market or exchange, or to register a sufficient
      number of shares of Common Stock) (a “Maintenance Failure”) (provided that if an
      Investor transfers its rights hereunder pursuant to Section 9 hereof and the
      transferee requests inclusion in such Registration Statement which requires
      the
      Company under applicable law to file a post-effective amendment to such
      Registration Statement, then a Maintenance Failure shall not be deemed to have
      occurred solely with respect to the filing of such post-effective amendment
      only
      if the Company is using its best efforts to file such amendment and have such
      amendment declared effective as soon as practicable), then, as partial relief
      for the damages to any holder by reason of any such delay in or reduction of
      its
      ability to sell the underlying shares of Common Stock (as defined in the
      Warrant) (which remedy shall not be exclusive of any other remedies available
      at
      law or in equity) the Company shall pay to each holder of Registrable Securities
      relating to such Registration Statement an amount in cash equal to two percent
      (2%) of the initial aggregate principal amount of the Notes (as such term is
      defined in the Credit Agreement) issued on the Closing Date with respect to
      each
      thirty (30) day period occurring after any applicable (X) Filing Failure; (Y)
      Effectiveness Failure; or (Z) Maintenance Failure (in each case, pro rated
      for
      periods totaling less than thirty (30) days). The payments to which a holder
      shall be entitled pursuant to this Section 2(f) are referred to herein as
“Registration Delay Payments”. Registration Delay Payments shall be paid on the
      earlier of (a) the thirtieth (30th) day after the applicable Filing Failure,
      Effectiveness Failure or Maintenance Failure, as the case may be, giving rise
      to
      the Registration Delay Payments has occurred and (b) the third (3rd) Business
      Day after the applicable Filing Failure, Effectiveness Failure or Maintenance
      Failure, as the case may be, giving rise to the Registration Delay Payments
      is
      cured. In the event the Company fails to make Registration Delay Payments in
      a
      timely manner in accordance with the foregoing, such Registration Delay Payments
      shall bear interest at the rate of one and one-half percent (1.5%) per month
      (prorated for partial months) until paid in full. Other than interest as
      provided in the immediately preceding sentence, Registration Delay Payments
      shall be capped at the amount accrued through such date as of which the
      Investors may sell all of their Registrable Securities without restriction
      pursuant to Rule 144(k) (or any successor rule thereto) promulgated under the
      1933 Act, as such rule may be amended from time to time, or without restriction
      pursuant to Rule 144 without the requirement for compliance with Rule 144(e),
      (f) or (h) (or successor thereto), as such rules may be amended from time to
      time. 

     

    
      
        
        

      

      
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    3.  Related
      Obligations.
      The
      Company will use its best efforts to effect the registration of the Registrable
      Securities in accordance with the intended method of disposition thereof and,
      pursuant thereto, the Company shall have the following obligations:

     

    (a)  The
      Company shall promptly prepare and file with the SEC a Registration Statement
      with respect to the Registrable Securities (but in no event later than the
      Filing Deadline) and use its best efforts to cause such Registration Statement
      relating to the Registrable Securities to become effective as soon as
      practicable after such filing (but in no event later than the Effectiveness
      Deadline). Subject to allowable Grace Periods (as defined in Section 3(r)
      below), the Company shall keep each Registration Statement effective pursuant
      to
      Rule 415 at all times until the earlier of (i) the date as of which the
      Investors may sell all of the Registrable Securities required to be covered
      by
      such Registration Statement without restriction pursuant to Rule 144(k) (or
      any
      successor rule thereto) promulgated under the 1933 Act, as such rule may be
      amended from time to time, or the Investors may sell all of such Registrable
      Securities owned by them without restriction pursuant to Rule 144 without the
      requirement for compliance with Rule 144(e) (f) or (h) (or successor thereto),
      as such rules may be amended from time to time, or (ii) the date on which an
      Investor shall have sold all of the Registrable Securities covered by such
      Registration Statement (the “Registration Period”). The Company shall ensure
      that each Registration Statement (including any amendments or supplements
      thereto and prospectuses (preliminary, final, summary or free writing) contained
      therein or related thereto) shall not contain any untrue statement of a material
      fact or omit to state a material fact required to be stated therein, or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading. The Company shall submit to the SEC, within
      two
      (2) Business Days after the later of the date that (i) the Company learns that
      no review of a particular Registration Statement will be made by the staff
      of
      the SEC or that the staff has no further comments on a particular Registration
      Statement (as the case may be) and (ii) the approval of Legal Counsel is sought
      pursuant to Section 3(c) hereof (which approval is immediately sought), a
      request for acceleration of effectiveness of such Registration Statement to
      4:00
      p.m. on the second (2nd) Business Day after the submission of such
      request.

     

    
      
        
        

      

      
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    (b)  Subject
      to Section 3(r) of this Agreement, the Company shall prepare and file with
      the
      SEC such amendments (including post-effective amendments) and supplements to
      a
      Registration Statement and the prospectus used in connection with such
      Registration Statement, which prospectus is to be filed pursuant to Rule 424
      promulgated under the 1933 Act, as may be necessary to keep such Registration
      Statement effective at all times during the Registration Period, and, during
      such period, comply with the provisions of the 1933 Act with respect to the
      disposition of all Registrable Securities of the Company covered by such
      Registration Statement until such time as all of such Registrable Securities
      shall have been disposed of in accordance with the intended methods of
      disposition by the seller or sellers thereof as set forth in such Registration
      Statement. In the case of amendments and supplements to a Registration Statement
      which are required to be filed pursuant to this Agreement (including pursuant
      to
      this Section 3(b)) by reason of the Company filing a report on Form 10-Q (or
      Form 10-QSB), or Form 10-K (or Form 10-KSB) or any analogous report under the
      Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall
      have incorporated such report by reference into such Registration Statement,
      if
      applicable, or shall file such amendments or supplements with the SEC on the
      same day on which the 1934 Act report is filed which created the requirement
      for
      the Company to amend or supplement such Registration Statement.

     

    (c)  The
      Company shall (A) permit Legal Counsel to review and comment upon (i) a
      Registration Statement at least five (5) Business Days prior to its filing
      with
      the SEC and (ii) all amendments and supplements to all Registration Statements
      (except for Annual Reports on Form 10-K (or Form 10-KSB), Quarterly Reports
      on
      Form l0-Q (or Form 10-QSB), Current Reports on Form 8-K, and any similar or
      successor reports) within a reasonable number of days prior to their filing
      with
      the SEC, and (B) not file any Registration Statement or amendment or supplement
      thereto in a form to which Legal Counsel reasonably objects. The Company shall
      not submit a request for acceleration of the effectiveness of a Registration
      Statement or any amendment or supplement thereto without the prior approval
      of
      Legal Counsel, which consent shall not be unreasonably withheld. The Company
      shall furnish to Legal Counsel, without charge, (i) copies of any correspondence
      from the SEC or the staff of the SEC to the Company or its representatives
      relating to any Registration Statement (but excluding any material non-public
      information contained therein or implied thereby) promptly after the same is
      prepared and filed with the SEC one copy of any Registration Statement and
      any
      amendment(s) thereto, including financial statements and schedules, all
      documents incorporated therein by reference, if requested by an Investor, and
      all exhibits and (ii) upon the effectiveness of any Registration Statement,
      one
      copy of the prospectus included in such Registration Statement and all
      amendments and supplements thereto. The Company shall reasonably cooperate
      with
      Legal Counsel in performing the Company’s obligations pursuant to this Section
      3.

     

    (d)  The
      Company shall furnish to each Investor whose Registrable Securities are included
      in any Registration Statement, without charge, (i) promptly after the same
      is
      prepared and filed with the SEC, at least one copy of any Registration Statement
      and any amendment(s) thereto, including financial statements and schedules,
      all
      documents incorporated therein by reference, if requested by an Investor, all
      exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
      Registration Statement, at least one copy of the prospectus included in such
      Registration Statement and all amendments and supplements thereto (or such
      other
      number of copies as such Investor may reasonably request from time to time)
      and
      (iii) such other documents, including copies of any preliminary or final
      prospectus, as such Investor may reasonably request from time to time in order
      to facilitate the disposition of the Registrable Securities owned by such
      Investor.

     

    
      
        
        

      

      
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    (e)  The
      Company shall use its best efforts to (i) register and qualify, unless an
      exemption from registration and qualification applies, the resale by the
      Investors of the Registrable Securities covered by a Registration Statement
      under such other securities or “blue sky” laws of all applicable jurisdictions
      in the United States, (ii) prepare and file in those jurisdictions, such
      amendments (including post-effective amendments) and supplements to such
      registrations and qualifications as may be necessary to maintain the
      effectiveness thereof during the Registration Period, (iii) take such other
      actions as may be necessary to maintain such registrations and qualifications in
      effect at all times during the Registration Period, and (iv) take all other
      actions reasonably necessary or advisable to qualify the Registrable Securities
      for sale in such jurisdictions; provided, however, that the Company shall not
      be
      required in connection therewith or as a condition thereto to (x) qualify to
      do
      business in any jurisdiction where it would not otherwise be required to qualify
      but for this Section 3(e), (y) subject itself to general taxation in any such
      jurisdiction, or (z) file a general consent to service of process in any such
      jurisdiction. The Company shall promptly notify Legal Counsel and each Investor
      who holds Registrable Securities in writing of the receipt by the Company of
      any
      notification with respect to the suspension of the registration or qualification
      of any of the Registrable Securities for sale under the securities or “blue sky”
laws of any jurisdiction in the United States or its receipt of actual notice
      of
      the initiation or threatening of any proceeding for such purpose.

     

    (f)  The
      Company shall promptly notify Legal Counsel and each Investor in writing of
      the
      happening of any event as a result of which the prospectus included in a
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omission to state a material fact required to be stated therein
      or necessary to make the statements therein, in the light of the circumstances
      under which they were made, not misleading (provided that in no event shall
      such
      notice contain any material, nonpublic information), and, subject to Section
      3(r) hereof, promptly prepare a supplement or amendment to such Registration
      Statement to correct such untrue statement or omission and deliver at least
      one
      copy of such supplement or amendment to Legal Counsel and each Investor (or
      such
      other number of copies as Legal Counsel and such Investor may reasonably request
      from time to time). The Company shall also promptly notify Legal Counsel and
      each Investor in writing (i) when a prospectus or any prospectus supplement
      or
      post-effective amendment has been filed, when a Registration Statement or any
      post-effective amendment has become effective (notification of such
      effectiveness shall be delivered to Legal Counsel and each Investor by facsimile
      or e-mail on the same day of such effectiveness and by overnight mail), and
      when
      the Company receives written notice from the SEC that a Registration Statement
      or any post- effective amendment will be reviewed by the SEC, (ii) of any
      request by the SEC for amendments or supplements to a Registration Statement
      or
      related prospectus or related information, and (iii) of the Company’s reasonable
      determination that a post-effective amendment to a Registration Statement would
      be appropriate.

     

    
      
        
        

      

      
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    (g)  The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of a Registration Statement, or the suspension
      of the qualification of any of the Registrable Securities for sale in any
      jurisdiction and, if such an order or suspension is issued, to obtain the
      withdrawal of such order or suspension at the earliest possible moment and
      to
      notify in writing Legal Counsel and each Investor who holds Registrable
      Securities being sold of the issuance of such order and the resolution thereof
      or its receipt of actual notice of the initiation or threat of any proceeding
      for such purpose.

     

    (h)  At
      the
      reasonable request (in the context of the securities laws) of any Investor,
      the
      Company shall furnish to such Investor, on the date of the effectiveness of
      the
      Registration Statement and thereafter from time to time on such dates as an
      Investor may reasonably request (i) a letter, dated such date, from the
      Company’s independent certified public accountants in form and substance as is
      customarily given by independent certified public accountants to underwriters
      in
      an underwritten public offering, addressed to the Investors, and (ii) an
      opinion, dated as of such date, of counsel representing the Company for purposes
      of such Registration Statement, in form, scope and substance as is customarily
      given in an underwritten public offering, addressed to the
      Investors.

     

    (i)  At
      the
      reasonable request (in the context of the securities laws) of any Investor,
      the
      Company shall make available for inspection during regular business hours by
      (i)
      any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other
      agents retained by the Investors (collectively, the “Inspectors”), all pertinent
      financial and other records, and pertinent corporate documents and properties
      of
      the Company (collectively, the “Records”), as shall be reasonably deemed
      necessary by each Inspector, and cause the Company’s officers, directors and
      employees to supply all information which any Inspector may reasonably request;
      provided, however, that each Inspector shall agree to hold in strict confidence
      and shall not make any disclosure (except to an Investor) or use of any Record
      or other information which the Company determines in good faith to be
      confidential, and of which determination the Inspectors are so notified, unless
      (a) the disclosure of such Records is necessary to avoid or correct a
      misstatement or omission in any Registration Statement or is otherwise required
      under the 1933 Act, (b) the release of such Records is ordered pursuant to
      a
      final, non-appealable subpoena or order from a court or government body of
      competent jurisdiction, or (c) the information in such Records has been made
      generally available to the public other than by disclosure in violation of
      this
      or any other agreement of which the Inspector has knowledge. Each Investor
      agrees that it shall, upon learning that disclosure of such Records is sought
      in
      or by a court or governmental body of competent jurisdiction or through other
      means, give prompt notice to the Company and allow the Company, at its expense,
      to undertake appropriate action to prevent disclosure of, or to obtain a
      protective order for, the Records deemed confidential. Nothing herein (or in
      any
      other confidentiality agreement between the Company and any Investor) shall
      be
      deemed to limit the Investors’ ability to sell Registrable Securities in a
      manner that is otherwise consistent with applicable laws and regulations.


     

    (j)  The
      Company shall hold in confidence and not make any disclosure of information
      concerning an Investor provided to the Company unless (i) disclosure of such
      information is necessary to comply with federal or state securities laws, (ii)
      the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release of
      such information is ordered pursuant to a subpoena or other final,
      non-appealable order from a court or governmental body of competent
      jurisdiction, or (iv) such information has been made generally available to
      the
      public other than by disclosure in violation of this Agreement or any other
      Related Transaction Document (as defined in the Credit Agreement). The Company
      agrees that it shall, upon learning that disclosure of such information
      concerning an Investor is sought in or by a court or governmental body of
      competent jurisdiction or through other means, give prompt written notice to
      such Investor and allow such Investor, at the Investor’s expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, such information.

     

    
      
        
        

      

      
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    (k)  The
      Company shall use its best efforts to (i) cause all the Registrable Securities
      covered by a Registration Statement to be listed or quoted on each securities
      exchange, quotation system or trading market on which securities of the same
      class or series issued by the Company are listed or quoted, and without limiting
      the generality of the foregoing, arrange for at least three market makers to
      register with the National Association of Securities Dealers, Inc. (“NASD”) as
      such with respect to such Registrable Securities. The Company shall pay all
      fees
      and expenses in connection with satisfying its obligation under this Section
      3(k).

     

    (l)  The
      Company shall cooperate with the Investors who hold Registrable Securities
      being
      offered and, to the extent applicable, facilitate the timely preparation and
      delivery of certificates (not bearing any restrictive legend) representing
      the
      Registrable Securities to be offered pursuant to a Registration Statement and
      enable such certificates to be in such denominations or amounts, as the case
      may
      be, as the Investors may reasonably request and registered in such names as
      the
      Investors may request.

     

    (m)  If
      requested by an Investor, the Company shall as soon as practicable after receipt
      of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate
      in a prospectus supplement or post-effective amendment such information as
      such
      Investor reasonably requests to be included therein relating to the sale and
      distribution of Registrable Securities, including, without limitation,
      information with respect to such Investor, the number of Registrable Securities
      being offered or sold, the purchase price being paid therefor and any other
      terms of the offering of the Registrable Securities to be sold in such offering;
      (ii) make all required filings of such prospectus supplement or post-effective
      amendment after being notified of the matters to be incorporated in such
      prospectus supplement or post-effective amendment; and (iii) supplement or
      make
      amendments to any Registration Statement if reasonably requested by such
      Investor holding any Registrable Securities.

     

    (n)  The
      Company shall use its best efforts to cause the Registrable Securities covered
      by a Registration Statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to consummate the
      disposition of such Registrable Securities.

     

    (o)  The
      Company shall make generally available to its security holders as soon as
      practical, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with, and in the
      manner provided by, the provisions of Rule 158 under the 1933 Act) covering
      a
      twelve-month period beginning not later than the first day of the Company’s
      fiscal quarter next following the effective date of a Registration
      Statement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (p)  The
      Company shall otherwise use its best efforts to comply with all applicable
      rules
      and regulations of the SEC in connection with any registration
      hereunder.

     

    (q)  Within
      one (1) Business Day after a Registration Statement which covers Registrable
      Securities is declared effective by the SEC, the Company shall deliver, and
      shall cause legal counsel for the Company to deliver, to the transfer agent
      for
      such Registrable Securities (with copies to the Investors whose Registrable
      Securities are included in such Registration Statement) confirmation that such
      Registration Statement has been declared effective by the SEC in the form
      attached hereto as Exhibit A.

     

    (r)  Notwithstanding
      anything to the contrary herein (but subject to the last sentence of this
      Section 3(r)), at any time after the Effectiveness Date, the Company may delay
      the disclosure of material, non-public information concerning the Company the
      disclosure of which at the time is not, in the good faith opinion of the Board
      of Directors of the Company and its counsel, in the best interest of the Company
      and not, in the opinion of counsel to the Company, otherwise required (a “Grace
      Period”); provided, that the Company shall promptly (i) notify the Investors in
      writing, of the existence of material, non-public information giving rise to
      a
      Grace Period (provided that in each notice the Company will not disclose the
      content of such material, non-public information to the Investors) and the
      date
      on which the Grace Period will begin, and (ii) notify the Investors in writing
      of the date on which the Grace Period ends; and, provided further, that no
      Grace
      Period shall exceed fifteen (15) consecutive days and during any three hundred
      sixty-five (365) day period such Grace Periods shall not exceed an aggregate
      of
      forty (40) days and the first day of any Grace Period must be at least five
      (5)
      trading days after the last day of any prior Grace Period (each, an “Allowable
      Grace Period”); provided, that no Allowable Grace Period may exist prior to the
      Effectiveness Date or during the first sixty (60) Business Days after the
      Effectiveness Date. For purposes of determining the length of a Grace Period
      above, the Grace Period shall begin on and include the date the Investors
      receive the notice referred to in clause (i) of this Section 3(r) and shall
      end
      on and include the later of the date the Investors receive the notice referred
      to in clause (ii) of this Section 3(r) and the date referred to in such notice.
      The provisions of Section 3(g) hereof shall not be applicable during the period
      of any Allowable Grace Period. Upon expiration of the Grace Period, the Company
      shall again be bound by the first sentence of Section 3(f) hereof with respect
      to the information giving rise thereto unless such material, nonpublic
      information is no longer applicable. Notwithstanding anything to the contrary
      contained in this Section 3(r), the Company shall cause its transfer agent
      to
      deliver unlegended shares of Common Stock (as defined in the Warrant) to a
      transferee of an Investor in accordance with the terms of the Warrant in
      connection with any sale of Registrable Securities with respect to which an
      Investor has entered into a contract for sale, and delivered a copy of the
      prospectus included as part of the applicable Registration Statement (unless
      an
      exemption from such prospectus delivery requirement exists), prior to the
      Investors’ receipt of the notice of a Grace Period and for which the Investors’
have not yet settled.

     

    (s)  The
      Company shall make such filings with the NASD (including providing all required
      information and paying required fees thereto) as and when reasonably requested
      by any Investors and make all other filings and take all other actions
      reasonably necessary to expedite and facilitate disposition by the Investor
      of
      Registrable Securities pursuant to a Registration Statement, including
      responding to any comments received from the NASD within five Business
      Days.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (t)  The
      Company shall use its best efforts to maintain eligibility for use of Form
      S-3
      (or any successor form thereto) so that such form is available for the
      registration of the resale of Registrable Securities.

     

    4.  Obligations
      of the Investors.

     

    (a)  At
      least
      five (5) Business Days prior to the first anticipated filing date of a
      Registration Statement and at least five (5) Business Days prior to the filing
      of any amendment or supplement to a Registration Statement, the Company shall
      notify each Investor in writing of the information the Company requires from
      each such Investor. It shall be a condition precedent to the obligations of
      the
      Company to complete the registration pursuant to this Agreement with respect
      to
      the Registrable Securities of a particular Investor that such Investor shall
      furnish to the Company such information regarding itself, the Registrable
      Securities held by it and the intended method of disposition of the Registrable
      Securities held by it, as shall be reasonably required to effect and maintain
      the effectiveness of the registration of such Registrable Securities and shall
      execute such documents in connection with such registration as the Company
      may
      reasonably request in writing.

     

    (b)  Each
      Investor, by each Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of any Registration Statement hereunder, unless
      such Investor has notified the Company in writing of such Investor’s election to
      exclude all of such Investor’s Registrable Securities from such Registration
      Statement.

     

    (c)  Each
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(g) hereof or the
      first
      sentence of Section 3(f) hereof, or written notice from the Company of an
      Allowable Grace period, such Investor will immediately discontinue disposition
      of Registrable Securities pursuant to any Registration Statement(s) covering
      such Registrable Securities until such Investor’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 3(g) hereof or the
      first sentence of Section 3(f) hereof or receipt of notice that no supplement
      or
      amendment is required or that the Allowable Grace Period has ended.
      Notwithstanding anything to the contrary in this Section 4(c), the Company
      shall
      cause its transfer agent to deliver unlegended shares of Common Stock to a
      transferee of an Investor in accordance with the terms of the Warrant in
      connection with any sale of Registrable Securities with respect to which such
      Investor has entered into a contract for sale prior to such Investor’s receipt
      of a notice from the Company of the happening of any event of the kind described
      in Section 3(g) hereof or the first sentence of Section 3(f) hereof and for
      which such Investor has not yet settled.

     

    (d)  Each
      Investor convents and agrees to deliver to the Company a Registration Statement
      Questionnaire, in the form attached hereto as Exhibit C, no later than five
      (5)
      Business Days prior to the Filing Deadline.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    5.  Expenses
      of Registration.
      All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3 hereof, including, without limitation, all registration, listing and
      qualifications fees, printers and accounting fees, and fees and disbursements
      of
      counsel for the Company shall be paid by the Company. The Lender shall be
      responsible for the fees and disbursements of Legal Counsel in connection with
      registration, filing or qualification pursuant to Sections 2 and 3 of this
      Agreement. 

     

    6.  Indemnification.
      In the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

     

    (a)  To
      the
      fullest extent permitted by law, the Company will, and hereby does, indemnify,
      hold harmless and defend each Investor, the directors, officers, members,
      partners, employees, agents, representatives of, and each Person, if any, who
      controls each Investor within the meaning of the 1933 Act or the 1934 Act (each,
      an “Indemnified Person” and collectively, the “Indemnified Persons”), against
      any losses, claims, damages, liabilities, judgments, fines, penalties, charges,
      costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint
      or several, (collectively, “Claims”) incurred in investigating, preparing or
      defending any action, claim, suit, inquiry, proceeding, investigation or appeal
      taken from the foregoing by or before any court or governmental, administrative
      or other regulatory agency, body or the SEC, whether pending or threatened,
      whether or not an Indemnified Person is or may be a party thereto (“Indemnified
      Damages”), to which any Indemnified Person may become subject insofar as such
      Claims (or actions or proceedings, whether commenced or threatened, in respect
      thereof) arise out of or are based upon: (i) any untrue statement or alleged
      untrue statement of a material fact in a Registration Statement or any
      post-effective amendment thereto or in any filing made in connection with the
      qualification of the offering under the securities or other “blue sky” laws of
      any jurisdiction in which Registrable Securities are offered (“Blue Sky
      Filing”), or the omission or alleged omission to state a material fact required
      to be stated therein or necessary to make the statements therein not misleading,
      (ii) any untrue statement or alleged untrue statement of a material fact
      contained in any preliminary, final, summary or free writing prospectus (as
      amended or supplemented, if the Company files any amendment thereof or
      supplement thereto with the SEC) or the omission or alleged omission to state
      therein any material fact necessary to make the statements made therein, in
      light of the circumstances under which the statements therein were made, not
      misleading, (iii) any violation or alleged violation by the Company of the
      1933
      Act, the 1934 Act, any other law, including, without limitation, any state
      securities law, or any rule or regulation thereunder relating to the offer
      or
      sale of the Registrable Securities pursuant to a Registration Statement or
      (iv)
      any violation of this Agreement (the matters in the foregoing clauses (i)
      through (iv) being, collectively, “Violations”), Subject to Section 6(b) hereof,
      the Company shall reimburse the Indemnified Persons, promptly as such expenses
      are incurred and are due and payable, for any legal fees or other reasonable
      expenses incurred by such Indemnified Persons in connection with investigating
      or defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a): (i) shall
      not apply to a Claim by an Indemnified Person arising out of or based upon
      a
      Violation which occurs in reliance upon and in conformity with information
      furnished in writing to the Company by such Indemnified Person for such
      Indemnified Person expressly for use in connection with the preparation of
      the
      Registration Statement or any such amendment thereof or supplement thereto
      if
      such prospectus was timely made available by the Company pursuant to Section
      3(d), and (ii) shall not apply to amounts paid in settlement of any Claim if
      such settlement is effected without the prior written consent of the Company,
      which consent shall not be unreasonably withheld, conditioned or delayed. Such
      indemnity shall remain in full force and effect regardless of any investigation
      made by or on behalf of the Indemnified Person and shall survive the transfer
      of
      any of the Registrable Securities by the Investors pursuant to Section 9
      hereof.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b)  In
      connection with any Registration Statement in which an Investor is
      participating, each such Investor agrees to severally and not jointly indemnify,
      hold harmless and defend, to the same extent and in the same manner as is set
      forth in Section 6(a) hereof, the Company, each of its directors, each of its
      officers who signs the Registration Statement and each Person, if any, who
      controls the Company within the meaning of the 1933 Act or the 1934 Act (each,
      an “Indemnified Party”), against any Claim or Indemnified Damages to which any
      Indemnified Party may become subject, under the 1933 Act, the 1934 Act or
      otherwise, insofar as such Claim or Indemnified Damages arise out of or are
      based upon any Violation, in each case to the extent, and only to the extent,
      that such Violation occurs in reliance upon and in conformity with written
      information furnished to the Company by such Investor expressly for use in
      connection with such Registration Statement; and, subject to Section 6(b)
      hereof, such Investor will reimburse any legal or other expenses reasonably
      incurred by an Indemnified Party in connection with investigating or defending
      any such Claim; provided, however, that the indemnity agreement contained in
      this Section 6(b) and the agreement with respect to contribution contained
      in
      Section 7 hereof shall not apply to amounts paid in settlement of any Claim
      if
      such settlement is effected without the prior written consent of such Investor,
      which consent shall not be unreasonably withheld or delayed; provided, further,
      however, that such Investor shall be liable under this Section 6(b) for only
      that amount of a Claim or Indemnified Damages as does not exceed the net
      proceeds to such Investor as a result of the sale of Registrable Securities
      pursuant to the Registration Statement giving rise to such Claim (and in no
      event shall the aggregate liability of the Investors pursuant to this Agreement
      (or otherwise) with respect to violations exceed the total net proceeds to
      the
      Investors from the sale of the Registrable Securities pursuant to the
      Registration Statements). Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such Indemnified Party
      and shall survive the transfer of any of the Registrable Securities by any
      of
      the Investors pursuant to Section 9.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (c)  Promptly
      after receipt by an Indemnified Person or Indemnified Party (as the case may
      be)
      under this Section 6 of notice of the commencement of any action or proceeding
      (including any governmental action or proceeding) involving a Claim, such
      Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim
      in respect thereof is to be made against any indemnifying party under this
      Section 6, deliver to the indemnifying party a written notice of the
      commencement thereof, and the indemnifying party shall have the right to
      participate in, and, to the extent the indemnifying party so desires, jointly
      with any other indemnifying party similarly noticed, to assume control of the
      defense thereof with counsel mutually satisfactory to the indemnifying party
      and
      the Indemnified Person or the Indemnified Party (as the case may be); provided,
      however, that an Indemnified Person or Indemnified Party (as the case may be)
      shall have the right to retain its own counsel with the fees and expenses of
      such counsel to be paid by the indemnifying party if: (i) the indemnifying
      party
      has agreed in writing to pay such fees and expenses; (ii) the indemnifying
      party
      shall have failed promptly to assume the defense of such Claim and to employ
      counsel reasonably satisfactory to such Indemnified Person or Indemnified Party
      (as the case may be) in any such Claim; or (iii) the named parties to any such
      Claim (including any impleaded parties) include both such Indemnified Person
      or
      Indemnified Party (as the case may be) and the indemnifying party, and such
      Indemnified Person or such Indemnified Party (as the case may be) shall have
      been advised by counsel that a conflict of interest is likely to exist if the
      same counsel were to represent such Indemnified Person or such Indemnified
      Party
      and the indemnifying party (in which case, if such Indemnified Person or such
      Indemnified Party (as the case may be) notifies the indemnifying party in
      writing that it elects to employ separate counsel at the expense of the
      indemnifying party, then the indemnifying party shall not have the right to
      assume the defense thereof and such counsel shall be at the expense of the
      indemnifying party), provided further, that in the case of clause (iii) above
      the indemnifying party shall not be responsible for the reasonable fees and
      expenses of more than one (1) separate legal counsel for such Indemnified Person
      or Indemnified Party (as the case may be). In the case of an Indemnified Person,
      legal counsel referred to in the immediately preceding sentence shall be
      selected by the Investors holding at least a majority in interest of the
      Registrable Securities included in the Registration Statement to which the
      Claim
      relates. The Indemnified Party or Indemnified Person (as the case may be) shall
      reasonably cooperate with the indemnifying party in connection with any
      negotiation or defense of any such action or Claim by the indemnifying party
      and
      shall furnish to the indemnifying party all information reasonably available
      to
      the Indemnified Party or Indemnified Person (as the case may be) which relates
      to such action or Claim. The indemnifying party shall keep the Indemnified
      Party
      or Indemnified Person (as the case may be) reasonably apprised at all times
      as
      to the status of the defense or any settlement negotiations with respect
      thereto. No indemnifying party shall be liable for any settlement of any action,
      claim or proceeding effected without its prior written consent, provided,
      however, that the indemnifying party shall not unreasonably withhold, delay
      or
      condition its consent. No indemnifying party shall, without the prior written
      consent of the Indemnified Party or Indemnified Person (as the case may be),
      consent to entry of any judgment or enter into any settlement or other
      compromise with respect to any pending or threatened action or claim in respect
      of which indemnification or contribution may be or has been sought hereunder
      (whether or not the Indemnified Party or Indemnified Person is an actual or
      potential party to such action or claim) which does not include as an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party or Indemnified Person (as the case may be) of a release from
      all liability in respect to such Claim or litigation, and such settlement shall
      not include any admission as to fault on the part of the Indemnified Party.
      Following indemnification as provided for hereunder, the indemnifying party
      shall be subrogated to all rights of the Indemnified Party or Indemnified Person
      (as the case may be) with respect to all third parties, firms or corporations
      relating to the matter for which indemnification has been made. The failure
      to
      deliver written notice to the indemnifying party within a reasonable time of
      the
      commencement of any such action shall not relieve such indemnifying party of
      any
      liability to the Indemnified Person or Indemnified Party (as the case may be)
      under this Section 6, except to the extent that the indemnifying party is
      materially and adversely prejudiced in its ability to defend such
      action.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (d)  The
      indemnification required by this Section 6 shall be made by periodic payments
      of
      the amount thereof during the course of the investigation or defense, as and
      when bills are received or Indemnified Damages are incurred.

     

    (e)  The
      indemnity agreements contained herein shall be in addition to (i) any cause
      of
      action or similar right of the Indemnified Party or Indemnified Person (as
      the
      case may be) against the indemnifying party or others, and (ii) any liabilities
      the indemnifying party may be subject to pursuant to the law.

     

    7.  Contribution.
      To the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 hereof
      to
      the fullest extent permitted by law; provided, however, that: (i) no Person
      involved in the sale of Registrable Securities which Person is guilty of
      fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
      Act) in connection with such sale shall be entitled to contribution from any
      Person involved in such sale of Registrable Securities who was not guilty of
      fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
      Securities shall be limited to an amount equal to the net amount of proceeds
      received by such seller from the sale of such Registrable Securities pursuant
      to
      such Registration Statement giving rise to such action or claim for
      indemnification less the amount of any damages that such seller has otherwise
      been required to pay in connection with such sale. 

     

    8.  Reports
      Under the 1934 Act.
      With a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the Investors to sell securities of the Company to the public
      without registration (“Rule 144”), the Company agrees to: 

     

    (a)  make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    (b)  file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1934 Act so long as the Company remains subject to such
      requirements (it being understood that nothing herein shall limit the Company’s
      obligations under Section 4 of the Credit Agreement) and the filing of such
      reports and other documents is required for the applicable provisions of Rule
      144; and

     

    (c)  furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon request, (i) a written statement by the Company, if true, that it has
      complied with the reporting requirements of Rule 144 and the 1934 Act, (ii)
      a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company if such reports are not publicly
      available via EDGAR, and (iii) such other information as may be reasonably
      requested to permit the Investors to sell such securities pursuant to Rule
      144
      without registration.

     

    9.  Assignment
      of Registration Rights.
      The
      rights under this Agreement shall be automatically assignable by any Investor
      to
      any transferee of all or any portion of such Investor’s Registrable Securities
      if: (i) the Investor agrees in writing with the transferee or assignee to assign
      such rights, and a copy of such agreement is furnished to the Company within
      a
      reasonable time after such assignment; (ii) the Company is, within a reasonable
      time after such transfer or assignment, furnished with written notice of (a)
      the
      name and address of such transferee or assignee, and (b) the securities with
      respect to which such registration rights are being transferred or assigned;
      (iii) immediately following such transfer or assignment the further disposition
      of such securities by the transferee or assignee is restricted under the 1933
      Act or applicable state securities laws if so required; (iv) at or before the
      time the Company receives the written notice contemplated by clause (ii) of
      this
      sentence the transferee or assignee agrees in writing with the Company to be
      bound by all of the provisions contained herein; and (v) such transfer shall
      have been made in accordance with the applicable requirements of the Warrant.
      

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    10.  Amendment
      of Registration Rights.
      Provisions of this Agreement may be amended and the observance thereof may
      be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only with the written consent of the Company and the Required
      Holders, provided that an Investor may give a waiver in writing as to itself.
      Any amendment or waiver effected in accordance with this Section 10 shall be
      binding upon the Investors (or, in the case of a waiver given by an Investor
      with respect to itself, upon such Investor) and the Company. No such amendment
      or waiver (unless given pursuant to the foregoing proviso) shall be effective
      to
      the extent that it applies to less than all of the Investors who are holders
      of
      the Registrable Securities. No consideration shall be offered or paid to any
      Person to amend or consent to a waiver or modification of any provision of
      any
      of this Agreement unless the same consideration also is offered to all of the
      parties to this Agreement. 

     

    11.  Lender’s
      Representations and Warranties.
      The
      Lender represents and warrants to the Company as follows: 

     

    (a)  Investment
      Purpose.
      The
      Lender (i) acquired the Notes pursuant to the Credit Agreement and is acquiring
      the Warrant in exchange for the Hilco Warrants, which were issued pursuant
      to
      the Credit Agreement and (iii) upon any exercise of the Warrant issued to
      Lender, will acquire the Warrant Shares issuable upon such exercise thereof
      (the
      Warrant Shares and the Notes being collectively referred to herein as the
“Securities”) for its own account and not with a view towards, or for offer or
      resale in connection with, the public sale or distribution thereof, except
      pursuant to sales registered under or exempted from the registration
      requirements of the 1933 Act; provided, however, that by making the
      representations herein, the Lender does not agree to hold any of the Securities
      for any minimum or other specific term and reserves the right to dispose of
      the
      Securities at any time pursuant to a registration statement that has been
      declared and is effective under the 1933 Act or in accordance with an exemption
      from the registration requirements of the 1933 Act. 

     

    (b)  Accredited
      Investor Status.
      The
      Lender is an “accredited investor” as that term is defined in Rule 501(a) of
      Regulation D. 

     

    (c)  Reliance
      on Exemptions.
      The
      Lender understands and agrees that the Securities are being offered and sold
      to
      it in reliance on specific exemptions from the registration requirements of
      the
      United States federal and state securities laws and that the Company is relying
      in part upon the truth and accuracy of, and the Lender’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      the Lender set forth herein in order to determine the availability of such
      exemptions and the eligibility of the Lender to acquire the Securities.


     

    (d)  Information.
      The
      Lender and its advisors, if any, have been furnished with all materials relating
      to the business, finances and operations of the Company and materials relating
      to the offer and sale of the Securities that have been requested by the Lender.
      The Lender and its advisors, if any, have been afforded the opportunity to
      ask
      questions of and receive answers from the Company. Neither such inquiries nor
      any other due diligence investigations conducted by the Lender or its advisors,
      if any, or its representatives shall modify, amend or affect the Lender’s right
      to rely on the truth, accuracy and completeness of the Company’s representations
      and warranties contained herein. The Lender understands that its investment
      in
      the Securities involves a high degree of risk. The Lender has such knowledge
      and
      experience in financial and business matters as to be capable of evaluating
      the
      merits and risks of an investment in the Securities. The Lender has sought
      such
      accounting, legal and tax advice as it has considered necessary to make an
      informed investment decision with respect to its acquisition of the Securities.
      

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (e)  No
      Governmental Review.
      The
      Lender understands that no United States federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the Securities or the fairness or suitability of the investment
      in the Securities nor have such authorities passed upon or endorsed the merits
      of the offering of the Securities. 

     

    (f)  Transfer
      or Resale.
      The
      Lender understands that, except as provided in the herein, (i) the Securities
      have not been and are not being registered under the 1933 Act or any state
      securities laws, and may not be offered for sale, sold, assigned or transferred
      unless (A) subsequently registered thereunder, (B) the Lender shall have
      delivered to the Company an opinion of counsel, in a generally acceptable form,
      to the effect that such Securities to be sold, assigned or transferred may
      be
      sold, assigned or transferred pursuant to an exemption from such registration,
      or (C) the Lender provides the Company with reasonable assurance that such
      Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated
      under the 1933 Act (or a successor rule thereto); (ii) any sale of the
      Securities made in reliance on Rule 144 may be made only in accordance with
      the
      terms of Rule 144, and further, if Rule 144 is not applicable, any resale of
      the
      Securities under circumstances in which the seller may be deemed to be an
      underwriter (as that term is defined in the 1933 Act) may require compliance
      with some other exemption under the 1933 Act or the rules and regulations of
      the
      SEC thereunder; and (iii) neither the Company nor any other person is under
      any
      obligation to register the Securities under the 1933 Act or any state securities
      laws or to comply with the terms and conditions of any exemption thereunder.
      Notwithstanding the foregoing, the Securities may be pledged in connection
      with
      a bona fide margin account or other loan or financing arrangement secured by
      the
      Securities.

     

    (g)  Legends.
      The
      Lender understands that the certificates or other instruments representing
      the
      Warrant and, until such time as the sale of the Warrant Shares have been
      registered under the 1933 Act as contemplated hereunder, the stock certificates
      representing the Warrant Shares, except as set forth below, shall bear a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of such stock certificates): 

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR
      (B)
      AN APPROPRIATE EXCEPTION UNDER SAID ACT OR APPLICABLE SECURITIES LAWS OR (II)
      UNLESS SOLD PURSUANT TO RULE 144 OR 144A UNDER SAID ACT. NOTWITHSTANDING THE
      FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the Securities upon which
      it is
      stamped if (i) such Securities are registered for resale under the 1933 Act,
      (ii) in connection with a sale transaction, such holder provides the Company
      with an opinion of counsel, in a generally acceptable form, to the effect that
      a
      public sale, assignment or transfer of the Securities may be made without
      registration under the 1933 Act, (iii) such holder provides the Company with
      reasonable assurance that the Securities can be sold pursuant to Rule 144(k)
      promulgated under the 1933 Act (or a successor rule thereto), or (iv) such
      holder provides the Company with reasonable assurance that the Securities have
      been or are being sold pursuant to Rule 144. 

     

    (h)  Authorization;
      Enforcement; Validity.
      This
      Agreement has been duly and validly authorized, executed and delivered on behalf
      of the Lender and is a valid and binding agreement of the Lender enforceable
      against the Lender in accordance with its terms, except as enforceability may
      be
      limited by applicable bankruptcy, insolvency, reorganization, fraudulent
      conveyance or transfer, moratorium or similar laws affecting the enforcement
      of
      creditors’ rights generally and by general principles of equity relating to
      enforceability (regardless of whether considered in a proceeding at law or
      in
      equity).

     

    12.  Company’s
      Representations and Warranties.
      The
      Company represents and warrants to the Lender as follows: 

     

    (a)  Organization
      and Qualification.
      Set
      forth on Schedule 12(a) is a true and correct list of the entities in which
      the
      Company, directly or indirectly, owns capital stock or holds an equity or
      similar interest, together with their respective jurisdictions of organization
      and the percentage of the outstanding capital stock or other equity interests
      of
      such entity that is held by the Company or any Subsidiary of the Company. Other
      than with respect to the entities listed on Schedule 12(a), the Company does
      not, directly or indirectly, own any securities or beneficial ownership
      interests in any other person (including through joint ventures or partnership
      arrangements) or have any investment in any other person. Each of the Company
      and its Subsidiaries is a corporation, limited liability company, partnership
      or
      other entity and is duly organized and validly existing in good standing under
      the laws of the jurisdiction in which it is incorporated or organized and has
      the requisite corporate, partnership, limited liability company or other
      organizational power and authority to own its properties and to carry on its
      business as now being conducted. The Company is duly qualified to do business
      and is in good standing in every jurisdiction in which its ownership of property
      or the nature of the business conducted by it makes such qualification
      necessary, except to the extent that the failure to be so qualified or be in
      good standing would not have a Material Adverse Effect. Except as set forth
      in
      Schedule 12(a), the Company holds all right, title and interest in and to 100%
      of the capital stock, equity or similar interests of each of its Subsidiaries,
      in each case, free and clear of any Liens other than the Lien in favor or the
      Lender (which upon payoff of the obligations owing to the Lender may be
      transferred subject to a Lien in favor of a successor secured lender to the
      Company), including any restriction on the use, voting, transfer, receipt of
      income or other exercise of any attributes of free and clear ownership by a
      current holder, and no such Subsidiary owns capital stock or holds an equity
      or
      similar interest in any other Person other than another Subsidiary in certain
      instances. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (b)  Authorization;
      Enforcement; Validity.
      The
      Company has the requisite corporate power and authority to enter into and
      perform its obligations under each of Credit Documents and each of the other
      agreements to which it is a party or by which it is bound and which is entered
      into by the parties hereto in connection with the transactions contemplated
      hereby and thereby (collectively, the “Transaction Documents”), and to issue the
      Securities in accordance with the terms hereof and thereof. Each Subsidiary
      that
      is a party to or bound by a Transaction Document has the requisite corporate
      or
      other organizational power and authority to enter into and perform its
      obligations under each Transaction Document to which it is a party or by which
      it is bound. The execution and delivery of the Transaction Documents by the
      Company and the consummation by the Company of the transactions contemplated
      hereby and thereby, including the issuance of the Notes and the Warrant and
      the
      reservation for issuance and the issuance of the Warrant Shares issuable upon
      exercise thereof, have been duly authorized by the board of directors of the
      Company (the “Board of Directors”) and no further consent or authorization is
      required by the Company, its stockholders or the Board of Directors. To the
      extent that a Subsidiary is a party to or bound by a Transaction Document,
      the
      execution and delivery of such Transaction Document by such Subsidiary and
      the
      consummation by such Subsidiary of the transactions contemplated thereby have
      been duly authorized by the board of directors or equivalent body of such
      Subsidiary and no further consent or authorization is required by such
      Subsidiary, its equity holders or its board of directors or equivalent body.
      This Agreement and the other Transaction Documents dated as of the date hereof
      have been duly executed and delivered by Company and, if applicable, its
      Subsidiaries and constitute the valid and binding obligations of such parties,
      enforceable against such parties in accordance with their terms, except as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, fraudulent conveyance or transfer, moratorium or similar laws
      affecting the enforcement of creditors’ rights generally and by general
      principles of equity relating to enforceability (regardless of whether
      considered in a proceeding at law or in equity), and except to the extent that
      indemnification provisions thereof may be limited by federal or state securities
      laws. The Transaction Documents shall have been duly executed and delivered
      by
      the Company and, if applicable, its Subsidiaries and shall constitute the valid
      and binding obligations of such parties, enforceable against such parties in
      accordance with their terms except as enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
      transfer, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity relating to enforceability
      (regardless of whether considered in a proceeding at law or in equity).


     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (c)  Capitalization.
      As of
      October 9, 2007, the authorized capital stock of the Company consists of (i)
      350,000,000 shares of common stock, par value $.0001 per share, of which
      71,263,594 shares are issued and outstanding, (ii) 120,000 shares of series
      AA
      preferred stock, par value $.0001 per share, of which no shares are issued
      and
      outstanding, (iii) 100,000 shares of series A preferred stock, par value $.0001
      per share, of which no shares are issued and outstanding and (iv) 100,000 shares
      of series B preferred stock, par value $.0001 per share, of which no shares
      are
      issued and outstanding. All of such outstanding shares have been validly issued
      and are fully paid and nonassessable. Except as disclosed in Schedule 12(c),
      (A)
      no shares of the capital stock of the Company are subject to preemptive rights
      or any other similar rights or any Liens suffered or permitted by the Company;
      (B) there are no outstanding options, warrants, scrip, rights to subscribe
      to,
      calls or commitments of any character whatsoever relating to, or securities
      or
      rights convertible into or exchangeable or exercisable for, any shares of
      capital stock of the Company or any of its Subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      Subsidiaries is or may become bound to issue additional shares of capital stock
      of the Company or any of its Subsidiaries, or options, warrants, scrip, rights
      to subscribe to, calls or commitments of any character whatsoever relating
      to,
      or securities or rights convertible into or exercisable for, any shares of
      capital stock of the Company or any of its Subsidiaries; (C) there are no
      agreements or arrangements under which the Company or any of its Subsidiaries
      is
      obligated to register the sale of any of their securities under the 1933 Act
      (except pursuant to this Agreement); (D) there are no outstanding securities
      or
      instruments of the Company or any of its Subsidiaries that contain any
      redemption or similar provisions, and there are no contracts, commitments,
      understandings or arrangements by which the Company or any of its Subsidiaries
      is or may become bound to redeem a security of the Company and no other
      stockholder or similar agreements to which the Company is party; (E) there
      are
      no outstanding securities or instruments containing anti-dilution or similar
      provisions that will or may be triggered by the issuance of the Securities;
      and
      (F) the Company does not have any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement.

     

    (d)  Issuance
      of Securities.
      The
      Notes have been duly authorized and, upon issuance shall be (i) free from all
      taxes and Liens with respect to the issuance thereof and (ii) entitled to the
      rights set forth therein. At least 3,500 000 shares of common stock have been
      duly authorized and reserved for issuance upon exercise of the Warrant. Upon
      exercise in accordance with the Warrant, the Warrant Shares will be validly
      issued, fully paid and nonassessable and free from all taxes and Liens with
      respect to the issuance thereof with the holders being entitled to all rights
      accorded to a holder of common stock. Assuming the accuracy of the
      representations and warranties of the Lender set forth herein, the issuance
      by
      the Company of the Notes and Warrants are, and the Warrant Shares upon exercise
      in accordance with the Warrant will be, exempt from registration under the
      1933
      Act and applicable state securities laws. 

     

    (e)  No
      General Solicitation.
      Neither
      the Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf, has engaged or will engage in any form of general solicitation or
      general advertising (within the meaning of Regulation D under the 1933 Act)
      in
      connection with the offer or sale of the Securities. 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (f)  No
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would require
      registration of any of the Securities under the 1933 Act or cause this offering
      of the Securities to be integrated with prior offerings by the Company for
      purposes of the 1933 Act or any applicable stockholder approval provisions
      of
      any authority, nor will the Company take any action or steps that would require
      registration of the issuance of any of the Securities under the 1933 Act or
      cause the offering of the Securities to be integrated with other offerings
      for
      purposes of the 1933 Act other than as contemplated in this
      Agreement.

     

    (g)  No
      Adverse Registration Rights.
      As of
      the date hereof, no Person has any registration rights with respect to shares
      of
      Common Stock or any other securities of the Company other than the registration
      rights with respect to the Unit Offering Shares referenced in this Agreement,
      which the Company represents and warrants are not inconsistent with the rights
      granted to the Investors hereunder.

     

    (h)  Dilutive
      Effect.
      The
      Company understands and acknowledges that the number of Warrant Shares issuable
      upon exercise of the Warrant will increase in certain circumstances. The Company
      further acknowledges that any obligation to issue the Warrant Shares upon
      exercise of the Warrant in accordance with Warrants is absolute and
      unconditional regardless of the dilutive effect that such issuance may have
      on
      the ownership interests of other stockholders of the Company. Taking the
      foregoing into account, the Board of Directors has determined in its good faith
      business judgment that the issuance of the Warrant and the consummation of
      the
      other transactions contemplated thereby are in the best interests of the Company
      and its shareholders.

     

    (i)  Application
      of Takeover Protections.
      The
      Company and the Board of Directors have taken all necessary action, if any,
      in
      order to render inapplicable any control share acquisition, business combination
      or other similar anti-takeover provision under the articles of incorporation
      or
      the laws of Florida that is or could become applicable to the Lender as a result
      of the transactions contemplated by the Transaction Documents, including the
      Company’s issuance of the Securities and the Lender’s ownership of the
      Securities. 

     

    (j)  Rights
      Agreement.
      The
      Company has not adopted a stockholder rights plan or similar arrangement
      relating to accumulations of beneficial ownership of common stock or a change
      in
      control of the Company. 

     

    13.  Miscellaneous.

     

    (a)  Solely
      for purposes of this Agreement, a Person is deemed to be a holder of Registrable
      Securities whenever such Person owns or is deemed to own of record such
      Registrable Securities. If the Company receives conflicting instructions,
      notices or elections from two or more Persons with respect to the same
      Registrable Securities, the Company shall act upon the basis of instructions,
      notice or election received from such record owner of such Registrable
      Securities.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (b)  Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      (iii) with respect to Section 3(c) hereof by electronic mail (provided
      confirmation of transmission is electronically generated and kept on file by
      the
      sending party) or (iv) one (1) Business Day after deposit with a nationally
      recognized overnight delivery service with next day delivery specified, in
      each
      case properly addressed to the party to receive the same. The addresses and
      facsimile numbers for such communications shall be: 

     

    
      	
              If
                to the Company: 

            	
              Capital
                Growth Systems, Inc.

              125
                South Wacker Drive -- Suite 300

              Chicago,
                Illinois 60606

              Attention: Chief
                Executive Officer

              Facsimile: 312-673-2422

            
	
               

            	
               

            
	
               

            	
              with
                a copy to: 

            
	
               

            	
               

            
	
               

            	
              Shefsky
                & Froelich Ltd. 

              111
                East Wacker Drive - Suite 2800 

              Chicago,
                Illinois 60601 

              Attention: Mitchell
                D. Goldsmith

              Facsimile: 312-527-3194

            
	
               

            	
               

            
	
              If
                to Lender:

            	
              Hilco
                Financial, LLC 

              c/o
                Hilco Trading Co., Inc. 

              5
                Revere Drive, Suite 206 

              Northbrook,
                Illinois 60062 

              Telephone: 847-509-1100
                

              Facsimile: 847-509-1150
                

              Attention: CEO

            
	
               

            	
               

            
	
              If
                to Legal Counsel:

            	
              Katten
                Muchin Rosenman LLP 

              525
                W. Monroe Street

              Chicago,
                Illinois 60661-3693

              Telephone: 312-902-5200

              Facsimile: 312-902-1061
                

              Attention: Denise
                S. Burn, Esq.

              Mark
                R. Grossmann, Esq.

            


    

     

    
      
        
          Written
            confirmation of receipt (A) given by the recipient of such notice, consent,
            waiver or other communication, (B) mechanically or electronically generated
            by
            the sender’s facsimile machine or electronic mall transmission containing the
            time, date, recipient facsimile number or electronic mail address and
            an image
            of the first page of such transmission or (C) provided by a courier or
            overnight
            courier service shall be rebuttable evidence of personal service, receipt
            by
            facsimile or receipt from a nationally recognized overnight delivery
            service in
            accordance with clause (i), (ii) or (iii) above, respectively.


        

      

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (c)  Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    (d)  The
      parties hereby agree that pursuant to 735 Illinois Compiled Statutes 105/5-5
      they have chosen that all questions concerning the construction, validity,
      enforcement and interpretation of this Agreement shall be governed by the
      internal laws of the State of Illinois, without giving effect to any choice
      of
      law or conflict of law provision or rule (whether of the State of Illinois
      or
      any other jurisdictions) that would cause the application of the laws of any
      jurisdictions other than the State of Illinois. Each party hereby irrevocably
      submits to the exclusive jurisdiction of the state and federal courts sitting
      in
      The City of Chicago, Cook County, for the adjudication of any dispute hereunder
      or in connection herewith or with any transaction contemplated hereby or
      discussed herein, and hereby irrevocably waives, and agrees not to assert in
      any
      suit, action or proceeding, any claim that it is not personally subject to
      the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process. and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      If any provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
      AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
      HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
      TRANSACTION CONTEMPLATED HEREBY.

     

    (e)  This
      Agreement and the Credit Documents (as defined in the Credit Agreement), the
      schedules and exhibits attached hereto and thereto and the instruments
      referenced herein and therein constitute the entire agreement among the parties
      hereto with respect to the subject matter hereof and thereof. There are no
      restrictions, promises, warranties or undertakings, other than those set forth
      or referred to herein and therein. This Agreement, the Credit Documents, the
      schedules and exhibits attached hereto and thereto and the instruments
      referenced herein and therein supersede all prior agreements and understandings
      among the parties hereto with respect to the subject matter hereof and thereof
      (including but not limited to the original registration rights agreement and
      the
      original warrant issued to Lender in connection with the original funding of
      the
      loan from Lender to or for the benefit of Company and its Subsidiaries, which
      originally issued warrant and registration rights agreement are deemed null
      and
      void).

     

    (f)  Subject
      to the requirements of Section 9 hereof, this Agreement shall inure to the
      benefit of and be binding upon the permitted successors and assigns of each
      of
      the parties hereto.

     

    (g)  The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof. Unless the context clearly
      indicates otherwise, each pronoun herein shall be deemed to include the
      masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,” “includes,” “include” and words of like import shall be construed
      broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement
      instead of just the provision in which they are found.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (h)  This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party.
      In
      the event that any signature is delivered by facsimile transmission or by an
      e-mail which contains an electronic file of an executed signature page, such
      signature page shall create a valid and binding obligation of the party
      executing (or on whose behalf such signature is executed) with the same force
      and effect as if such facsimile or electronic file signature page (as the case
      may be) were an original thereof.

     

    (i)  Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    (j)  All
      consents and other determinations required to be made by the Investors pursuant
      to this Agreement shall be made, unless otherwise specified in this Agreement,
      by the Required Holders.

     

    (k)  The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent and no rules of strict construction
      will
      be applied against any party.

     

    (l)  The
      Investors shall have all rights and remedies set forth in the Credit Documents
      and all rights and remedies that the Investors have been granted at any time
      under any other agreement or contract and all of the rights that the Investors
      have under any law. Any Person having any rights under any provision of this
      Agreement shall be entitled to enforce such rights specifically (without posting
      a bond or other security or proving actual damages), to recover damages by
      reason of any breach of any provision of this Agreement and to exercise all
      other rights granted by law. 

     

    (m)  This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person, other than the Persons
      referred to in Section 6 and 7 hereof.

     

    (n)  Except
      with the prior written consent of the Required Holders, the Company shall not
      grant any Person any registration rights subsequent to the date hereof with
      respect to shares of Common Stock or any other securities of the Company other
      than registration rights that will not adversely affect the rights of the
      Investors hereunder (including by limiting in any way the number of Registrable
      Securities that could be included in any Registration Statement pursuant to
      Rule
      415) and shall not otherwise enter into any agreement that is inconsistent
      with
      the rights granted to the Investors hereunder. 

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (o)  The
      obligations of each Investor under this Agreement and the other Credit Documents
      are several and not joint with the obligations of any other Investor, and no
      Investor shall be responsible in any way for the performance of the obligations
      of any other Investor under this Agreement or any other Related Transaction
      Document. Nothing contained herein or in any other Related Transaction Document,
      and no action taken by any Investor pursuant hereto or thereto, shall be deemed
      to constitute the Investors as a partnership, an association, a joint venture
      or
      any other kind of group or entity, or create a presumption that the Investors
      are in any way acting in concert or as a group or entity with respect to such
      obligations or the transactions contemplated by the Credit Documents or any
      matters, and the Company acknowledges that the Investors are not acting in
      concert or as a group with respect to such obligations or the transactions
      contemplated by this Agreement or any of the other Credit Documents. Each
      Investor shall be entitled to independently protect and enforce its rights,
      including, without limitation, the rights arising out of this Agreement or
      out
      of any other Credit Documents, and it shall not be necessary for any other
      Investor to be joined as an additional party in any proceeding for such purpose.
      The use of a single agreement with respect to the obligations of the Company
      contained was solely in the control of the Company, not the action or decision
      of any Investor, and was done solely for the convenience of the Company and
      not
      because it was required or requested to do so by any Investor.

     

    [SIGNATURE
      PAGES FOLLOW]

     


    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Lender and the Company have caused their respective
      signature page to this Registration Rights Agreement to be duly executed as
      of
      the date first written above. 

     

    
      	 	
              COMPANY:

            
	 	 
	 	
              Capital
                Growth Systems, Inc.

            
	 	 
	 	 
	 	
              By:

            	 
	 	 
	 	
              Name:

            	 
	 	 
	 	
              Title:

            	 


    

    



    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Lender and the Company have caused their respective
      signature page to this Registration Rights Agreement to be duly executed as
      of
      the date first written above. 

     

    
      	 	
              LENDER:

            
	 	 
	 	
              Hilco
                Financial, LLC

            
	 	 
	 	 
	 	
              By:

            	 
	 	
              Name:

            	
              Scott
                Morse

            
	 	
              Title:

            	
              Executive
                Vice President

            


    

     

    
 

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    FORM
      OF NOTICE OF EFFECTIVENESS

     

    OF
      REGISTRATION STATEMENT

     

    _____________________

    _____________________

    _____________________

    Attention:
       ____________

     

    
      	 	
              Re:

            	
              Capital
                Growth Systems, Inc.

            


    

     

    Ladies
      and Gentlemen: 

     

    [We
      are][I am] counsel to Capital Growth Systems, Inc., a Florida corporation (the
      “Company”), and have represented the Company in connection with that certain
      Credit Agreement (the “Credit Agreement”) entered into by and among the Company
      and the Lender named therein (the “Holder”) pursuant to which the Company issued
      to the Holder warrants exercisable for shares of Common Stock (as defined in
      the
      Warrant) (the “Warrants”). In conjunction with the Credit Agreement, the Company
      also has entered into a Registration Rights Agreement with the Holder (the
      “Registration Rights Agreement”) pursuant to which the Company agreed, among
      other things, to register the Registrable Securities (as defined in the
      Registration Rights Agreement), including the shares of Common Stock issuable
      upon exercise of the Warrants, under the Securities Act of 1933, as amended
      (the
“1933 Act”). In connection with the Company’s obligations under the Registration
      Rights Agreement, on _______________, 200_, the Company filed a Registration
      Statement on Form S-3 (File No. 333-____________) (the “Registration Statement”)
      with the Securities and Exchange Commission (the “SEC”) relating to the
      Registrable Securities which names the Holder as a selling stockholder
      thereunder.

     

    In
      connection with the foregoing, [we][I] advise you that a member of the SEC’s
      staff has advised [us] [me] by telephone that the SEC has entered an order
      declaring the Registration Statement effective under the 1933 Act at [ENTER
      TIME
      OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
      knowledge, that any stop order suspending its effectiveness has been issued
      or
      that any proceedings for that purpose are pending before, or threatened by,
      the
      SEC and the Registrable Securities are available for resale under the 1933
      Act
      pursuant to the Registration Statement.

     

    You
      are
      hereby informed that the shares of Common Stock are freely transferable by
      the
      Holder pursuant to the Registration Statement, subject to the prospectus
      delivery requirements of the 1933 Act, which the selling stockholders have
      agreed to comply with to the extent applicable and which we have assumed
      compliance with in issuing this letter.

     

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              [ISSUER’S
                COUNSEL]

            
	 	 
	 	
              By:

            	 
	 	 	 


    

     

    CC:
      [LIST
      NAMES OF HOLDER(S); # OF SHARES; CERTIFICATE #S]

    


    


    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    



    EXHIBIT
      B 

     

    SELLING
      STOCKHOLDERS

     

    The
      shares of Common Stock being offered by the selling stockholders are issuable
      upon exercise of the warrants. For additional information regarding the issuance
      of the warrants, see “Private Placement of Notes and Warrants” above. We are
      registering the shares of Common Stock in order to permit the selling
      stockholders to offer the shares for resale from time to time. Except for the
      ownership of the warrants issued pursuant to the Credit Agreement, the selling
      stockholders have not had any material relationship with us within the past
      three years.

     

    The
      table
      below lists the selling stockholders and other information regarding the
      beneficial ownership (as determined under Section 13(d) of the Securities
      Exchange Act of 1934, as amended) of the shares of Common Stock by each of
      the
      selling stockholders. The second column lists the number of shares of Common
      Stock beneficially owned by each selling stockholder, based on its ownership
      of
      the warrants, as of _________, 200__, assuming exercise of the warrants held
      by
      the selling stockholders on that date.

     

    The
      third
      column lists the shares of Common Stock being offered by this prospectus by
      the
      selling stockholders.

     

    In
      accordance with the terms of a registration rights agreement with the selling
      stockholders, this prospectus generally covers the resale of the maximum number
      of shares of Common Stock issuable upon exercise of the warrants as of the
      trading day immediately preceding the date the registration statement is
      initially filed with the SEC, without taking into account any limitations on
      the
      exercise of the warrants. The fourth column assumes the sale of all of the
      shares offered by the selling stockholders pursuant to this
      prospectus.

     

    Under
      the
      terms of the warrants, a selling stockholder may not exercise the warrants
      to
      the extent such exercise would cause such selling stockholder, together with
      its
      affiliates, to beneficially own a number of shares of Common Stock which would
      exceed 9.99% of our then outstanding shares of Common Stock following such
      exercise, excluding for purposes of such determination shares of Common Stock
      issuable upon exercise of the warrants which have not been exercised. The number
      of shares in the second column does not reflect this limitation. The selling
      stockholders may sell all, some or none of their shares in this offering. See
      “Plan of Distribution.”

     

    
      	
              Name
                of Selling

              Stockholder

            	
              Number
                of shares of

              Common
                Stock

              Owned
                Prior to Offering

            	
              Maximum
                Number of

              Shares
                of Common

              Stock
                to be Sold

              Pursuant
                to this

              Prospectus

            	
              Number
                of Shares

              of
                Common Stock

              Owned
                After

              Offering

            
	 	 	 	 
	 	 	 	 


    

    


     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    


    PLAN
      OF DISTRIBUTION

     

    We
      are
      registering the shares of Common Stock issuable upon exercise of the warrants
      to
      permit the resale of these shares of Common Stock by the holders of the warrants
      from time to time after the date of this prospectus. We will not receive any
      of
      the proceeds from the sale by the selling stockholders of the shares of Common
      Stock. We will bear all fees and expenses incident to our obligation to register
      the shares of Common Stock.

     

    The
      selling stockholders may sell all or a portion of the shares of Common Stock
      beneficially owned by them and offered hereby from time to time directly or
      through one or more underwriters, broker-dealers or agents. If the shares of
      Common Stock are sold through underwriters or broker-dealers, the selling
      stockholders will be responsible for underwriting discounts or commissions
      or
      agent’s commissions. The shares of Common Stock may be sold in one or more
      transactions at fixed prices, at prevailing market prices at the time of the
      sale, at varying prices determined at the time of sale, or at negotiated prices.
      These sales may be effected in transactions, which may involve crosses or block
      transactions,

     

    
      	·  	
              on
                any national securities exchange or quotation service on which the
                securities may be listed or quoted at the time of
                sale;

            


    

     

    
      	·  	
              in
                the over-the-counter market;

            


    

     

    
      	·  	
              in
                transactions otherwise than on these exchanges or systems or in the
                over-the-counter market;

            


    

     

    
      	·  	
              through
                the writing of options, whether such options are listed on an options
                exchange or otherwise;

            


    

     

    
      	·  	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            


    

     

    
      	·  	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            


    

     

    
      	·  	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            


    

     

    
      	·  	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            


    

     

    
      	·  	
              privately
                negotiated transactions;

            


    

     

    
      	·  	
              short
                sales made after the date the Registration Statement is declared
                effective
                by the SEC;

            


    

     

    
      	·  	
              sales
                pursuant to Rule 144;

            


    

     

    
      	·  	
              broker-dealers
                may agree with the selling securityholders to sell a specified number
                of
                such shares at a stipulated price per
                share;

            


    

     

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    
      	·  	
              a
                combination of any such methods of sale;
                and

            


    

     

    
      	·  	
              any
                other method permitted pursuant to applicable
                law.

            


    

     

    If
      the
      selling stockholders effect such transactions by selling shares of Common Stock
      to or through underwriters, broker-dealers or agents, such underwriters,
      broker-dealers or agents may receive commissions in the form of discounts,
      concessions or commissions from the selling stockholders or commissions from
      purchasers of the shares of Common Stock for whom they may act as agent or
      to
      whom they may sell as principal (which discounts, concessions or commissions
      as
      to particular underwriters, broker-dealers or agents may be in excess of those
      customary in the types of transactions involved). In connection with sales
      of
      the shares of Common Stock or otherwise, the selling stockholders may enter
      into
      hedging transactions with broker-dealers, which may in turn engage in short
      sales of the shares of Common Stock in the course of hedging in positions they
      assume. The selling stockholders may also sell shares of Common Stock short
      and
      deliver shares of Common Stock covered by this prospectus to close out short
      positions and to return borrowed shares in connection with such short sales.
      The
      selling stockholders may also loan or pledge shares of Common Stock to
      broker-dealers that in turn may sell such shares.

     

    The
      selling stockholders may pledge or grant a security interest in some or all
      of
      the warrants or shares of Common Stock owned by them and, if they default in
      the
      performance of their secured obligations, the pledgees or secured parties may
      offer and sell the shares of Common Stock from time to time pursuant to this
      prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
      applicable provision of the Securities Act of 1933, as amended, amending, if
      necessary, the list of selling stockholders to include the pledgee, transferee
      or other successors in interest as selling stockholders under this prospectus.
      The selling stockholders also may transfer and donate the shares of Common
      Stock
      in other circumstances in which case the transferees, donees, pledgees or other
      successors in interest will be the selling beneficial owners for purposes of
      this prospectus.

     

    National
      Securities Corporation (“NSC”) has indicated to us its willingness to act as
      selling agent on behalf of the Selling Stockholders named in the Prospectus
      under “Selling Security Holders,” other than [Hilco Financial, LLC], that
      purchased the Company’s privately placed securities. All shares sold, if any, on
      behalf of such Selling Stockholders by NSC would be in transactions executed
      by
      NSC on an agency basis and commissions charged to its customers in connection
      with each transaction shall not exceed a maximum of 5% of gross proceeds. NSC
      does not have an underwriting agreement with the Company and/or any Selling
      Stockholders and no Selling Stockholders are required to execute transactions
      with NSC.

     

    The
      selling stockholders and any broker-dealer participating in the distribution
      of
      the shares of Common Stock may be deemed to be “underwriters” within the meaning
      of the Securities Act, and any commission paid, or any discounts or concessions
      allowed to, any such broker-dealer may be deemed to be underwriting commissions
      or discounts under the Securities Act. At the time a particular offering of
      the
      shares of Common Stock is made, a prospectus supplement, if required, will
      be
      distributed which will set forth the aggregate amount of shares of Common Stock
      being offered and the terms of the offering, including the name or names of
      any
      broker-dealers or agents, any discounts, commissions and other terms
      constituting compensation from the selling stockholders and any discounts,
      commissions or concessions allowed or reallowed or paid to
      broker-dealers.

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    Under
      the
      securities laws of some states, the shares of Common Stock may be sold in such
      states only through registered or licensed brokers or dealers. In addition,
      in
      some states the shares of Common Stock may not be sold unless such shares have
      been registered or qualified for sale in such state or an exemption from
      registration or qualification is available and is complied with.

     

    There
      can
      be no assurance that any selling stockholder will sell any or all of the shares
      of Common Stock registered pursuant to the shelf registration statement, of
      which this prospectus forms a part.

     

    National
      Securities Corporation (“NSC”) has indicated to us its willingness to act as
      selling agent on behalf of the Selling Stockholders named in the Prospectus
      and
      not comprising Investors under “Selling Security Holders” that purchased the
      Company’s privately placed securities. All shares sold, if any, on behalf of
      Selling Stockholders by NSC would be in transactions executed by NSC on an
      agency basis and commissions charged to its customers in connection with each
      transaction shall not exceed a maximum of 5% of gross proceeds. NSC does not
      have an underwriting agreement with the Company and or any Selling Stockholders
      an d no Selling Stockholders are required to execute transactions with
      NSC.

     

    The
      selling stockholders and any other person participating in such distribution
      will be subject to applicable provisions of the Securities Exchange Act of
      1934,
      as amended, and the rules and regulations thereunder, including, without
      limitation, to the extent applicable, Regulation M of the Exchange Act, which
      may limit the timing of purchases and sales of any of the shares of Common
      Stock
      by the selling stockholders and any other participating person. To the extent
      applicable, Regulation M may also restrict the ability of any person engaged
      in
      the distribution of the shares of Common Stock to engage in market-making
      activities with respect to the shares of Common Stock. All of the foregoing
      may
      affect the marketability of the shares of Common Stock and the ability of any
      person or entity to engage in market-making activities with respect to the
      shares of Common Stock.

     

    We
      will
      pay all expenses of the registration of the shares of Common Stock pursuant
      to
      the registration rights agreement, estimated to be $[___________] in total,
      including, without limitation, SEC filing fees and expenses of compliance with
      state securities or “blue sky” laws; provided, however, that a selling
      stockholder will pay all underwriting discounts and selling commissions, if
      any.
      We will indemnify the selling stockholders against liabilities, including some
      liabilities under the Securities Act, in accordance with the registration rights
      agreements, or the selling stockholders will be entitled to contribution. We
      may
      be indemnified by the selling stockholders against civil liabilities, including
      liabilities under the Securities Act, that may arise from any written
      information furnished to us by the selling stockholder specifically for use
      in
      this prospectus, in accordance with the related registration rights agreements,
      or we may be entitled to contribution.

     

    Once
      sold
      under the shelf registration statement, of which this prospectus forms a part,
      the shares of Common Stock will be freely tradable in the hands of persons
      other
      than our affiliates.

     

    


    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C 

     

    CAPITAL
      GROWTH SYSTEMS, INC.

     

    (the
      “Company”)

     

    QUESTIONNAIRE
      TO THE SELLING SHAREHOLDERS 

     

    This
      Questionnaire is to be completed, signed and faxed to [____________], at [(___)
      ___ - ____] by no later than five (5) Business Days after receipt, by the person
      or entity indicated on the cover of this Questionnaire (the “Selling
      Shareholder”) whose common shares of the Company are being registered pursuant
      to a Registration Statement on Form S-3. Retain a duplicate copy for your files.
      If you do not return the Questionnaire by the foregoing deadline, your shares
      may not be included in the Registration Statement.

     

    If
      you
      are uncertain about any of the following questions as they apply to your
      situation, please supply all relevant facts. Include separate sheets with
      details if necessary. If you have any questions, please call the Company’s
      counsel, [____________], at [(___) ___ - ____].

     

    Please
      notify me immediately if any of the information disclosed in your answers
      changes. Please answer all questions. Indicate “none” or “not applicable” when
      appropriate. Information should be given as of the date of this Questionnaire,
      even if previously reported to the Company.

     

    IN
      ANSWERING THESE QUESTIONS, PLEASE REFER TO THE INSTRUCTIONS AT THE BEGINNING
      OF
      THIS QUESTIONNAIRE.

     

    


    
      	
              Name
                of Selling Shareholder:

            	 


    

    


    INSTRUCTIONS
      AND DEFINITIONS

     

    The
      following instructions and definitions are furnished to aid you in preparing
      your answers to this Questionnaire.

     

    1. For
      purposes of this Questionnaire the term “Company” means Capital Growth Systems,
      Inc.

     

    2. “Beneficial”
      ownership. Beneficial ownership shall have the meaning ascribed to it in Section
      13(d) of the Securities Exchange Act of 1934, as amended. The SEC has taken
      the
      position that if you have sole or shared voting power or dispositive power
      or
      the ability to acquire either sole or shared voting or dispositive power of
      a
      security within 60 days, you are the beneficial owner of that security, even
      though that security is not registered in your name. Thus, for example, you
      could be the beneficial owner of securities in a trust or estate of which you
      are a trustee or executor, or of which you are one of the trustees or executors,
      or you could be the beneficial owner of securities which you have a right to
      purchase.

     

    3. The
      term
“affiliate” for purposes of this Questionnaire means any person directly or
      indirectly controlling, controlled by, or under common control with the Selling
      Shareholder.

     

    4. An
      example response has been provided to assist you in preparing your
      response.

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    1.    Broker-Dealer
      Status. 

     

    (a) Are
      you,
      or are you an affiliate of, a broker-dealer registered under the Securities
      Exchange Act of 1934?

     

    
      	 	
              YES

            	 	 	
              NO

            	 	 


    

    


    If
“yes,”
      please give details below.

     

    
      	 
	 
	 


    

    


    (b) Please
      confirm the following statement: The Company’s equity securities that are being
      issued to you were acquired in the ordinary course of your business, and at
      the
      time the securities were issued to you, you did not have any agreement or
      understanding, directly or indirectly, with any person to distribute the
      securities.

     

    
      	 	
              CONFIRMED

            	 	 	
              CANNOT
                CONFIRM

            	 	 


    

    


    If
      “cannot confirm,” please give details below. 

     

    
      	 
	 
	 


    

    


     

    2.    Relationships
      with the Company.

     

    (a) Have
      you
      held any position or office with the Company, its predecessors or affiliates
      within the last three years? 

     

    
      	 	
              YES

            	 	 	
              NO

            	 	 


    

    


    If
“yes,”
      please give details below. 

     

    
      	 
	 
	 


    

    


    (b) Have
      you
      had any other material relationship with the Company, its predecessors or
      affiliates within the last three years? 

     

    
      	 	
              YES

            	 	 	
              NO

            	 	 


    

    


    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

    If
“yes,”
      please give details below.

     

    
      	 
	 
	 


    

    


    3.    Equity
      Securities Beneficially Owned By You.

     

    (a) Please
      state the number and type of equity securities of the Company beneficially
      owned
      (please see, instructions and definitions on page 2) by you as of the date
      of
      this Questionnaire, including securities which are exercisable or convertible
      into equity securities within 60 days of the date of this
      Questionnaire.

     

    
      	
               

              Class
                of Security

            	 	
              Number
                of Shares Beneficiary
                Owned

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


    

    


    (b) If
      any
      natural person or entity other than you holds or shares voting power or
      dispositive power with respect to the Company’s equity securities listed in
      response to Question 3(a), please provide the names of the natural persons
      (including titles) or entities that hold or share such voting power or
      dispositive power and indicate the number of the Company’s equity securities
      covered thereby.

     

    
      	 
	 
	 


    

    


    (c) With
      respect to the Company’s equity securities listed in response to Questions 3(a)
      and 3(b) for which an entity holds or shares voting power or dispositive power,
      please provide the names of the natural persons (including titles) or entities
      that control the entity or entities listed in response to Questions 3(a) and
      3(b).

     

    
      	 
	 
	 


    

    


    (d) Please
      continue to list the natural persons or entities that control the entities
      listed in response to Question 3(c) and the entities listed in response to
      this
      Question 3(d) until you have listed only natural persons (including titles)
      that
      control the applicable entity or entities.

     

    
      	 
	 
	 


    

    


    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

    (e) If
      any
      person or entity disclaims beneficial ownership of any of the equity securities
      you have listed in response to Question 3, please so indicate: 

     

    
      	 
	 
	 


    

    


    
      
        
        

      

      
        C-4

        
          

        

      

      
        
        

      

    


    EXAMPLE
      RESPONSE

     

    The
      following is an example of a response to items 1 through 3. Please assume ABC
      Corporation is the Selling Shareholder for purposes of this
      example.

     

    1.    Broker-Dealer
      Status. 

     

    ABC
      Corporation is an affiliate of a broker-dealer because its sole shareholder,
      DEF
      Corporation, is a broker-dealer.

     

    2.    Relationships
      with the Company.

     

    (a) ABC
      Corporation has not held any position or office with the Company, its
      predecessors or affiliates within the last three years.

     

    (b) ABC
      Corporation provided consulting services to the Company in March 2006.


     

    3.    Equity
      Securities Beneficially Owned By You.

     

    Question
      3(a). 

     

    
      	
               

              Class
                of Security

            	 	
              Number
                of Shares

              Beneficiary

              Owned

            	 
	 	 	 	 
	
              Common
                Shares

            	 	 	
              100,000

            	 
	 	 	 	 	 
	
              Warrants
                to purchase Common Shares

            	 	 	
              200,000

            	 


    

    


     

    Question
      3(b). Not applicable 

     

    Question
      3(c). ABC Corporation is controlled by DEF Corporation, ABC Corporation’s sole
      shareholder.

     

    Question
      3(d). DEF Corporation is controlled by XYZ Corporation, DEF Corporation’s sole
      shareholder. XYZ Corporation is controlled by John Doe, XYZ Corporation’s sole
      shareholder and its President and Chief Executive Officer. 

     

    Question
      3(e). John Doe disclaims beneficial ownership of the 100,000 Common Shares
      and
      the Warrants to purchase 200,000 Common Shares. 

     

    
      
        
        

      

      
        C-5

        
          

        

      

      
        
        

      

    


    The
      undersigned hereby acknowledges that the information contained herein is true
      to
      the best of his knowledge and will notify the Company immediately of any changes
      in such information.

     

    
      	
              DATED:
                ________, 200___

            	
              FOR
                INDIVIDUALS:

            
	 	 
	 	 
	 	
              Name
                of Selling Shareholder [Please Print]

            
	 	 
	 	 
	 	
              Signature

            
	 	 
	 	 
	 	
              FOR
                CORPORATIONS, PARTNERSHIPS

            
	 	
              OR
                TRUSTS:

            
	 	 
	 	 
	 	
              Name
                of Selling Shareholder [Please Print]

            
	 	 
	 	
              By:

            	 
	 	 	
              Signature

            
	 	 
	 	
              Name:

            	 
	 	 	
              [Please
                Print]

            
	 	 
	 	
              Title:

            	 
	 	 	
              [Please
                Print]

            


    

    


    


    


    
      
        
        

      

      
        C-6