AMENDMENT
      NO. 1

    TO

    POLLAN
      EMPLOYMENT AGREEMENT

     

    This
      Amendment No. 1 (“Amendment”) is effective as of December 28, 2007, and is by
      and between CAPITAL
      GROWTH SYSTEMS, INC.,
      a
      Florida corporation (“Company”), and ROBERT
      POLLAN
      (“Executive”). All capitalized terms used in this Amendment and not otherwise
      defined shall have the meanings assigned to them in the Employment Agreement
      (as
      defined below).

     

    WHEREAS,
      Company and Executive entered into an Employment Agreement, dated as of February
      5, 2007 (the “Employment Agreement”), pursuant to which Company employs
      Executive; 

     

    WHEREAS,
      since becoming the Chief Information and Strategy Officer of Company, Executive
      has made significant and valuable contributions to Company; including becoming
      the COO of the Company and providing significant leadership with respect to
      Company’s business development, operational and financing initiatives.


     

    WHEREAS,
      Company, believes that the existing financial incentives in Executive’s
      Employment Agreement do not properly reward Executive for his efforts and
      Company is also desirous of providing for additional economic incentives in
      order to retain Executive and to encourage continued efforts for the benefit
      of
      Company, and in return Executive agrees to enter into the restrictive covenant
      set forth herein in addition to the restrictive covenants presently in
      Executive’s employment agreement.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals, and other good and
      valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, Company and Executive, intending to be legally bound, hereby
      agree
      as follows:

     

    1. Grant
      of Additional Stock Options.

     

    (a) Vested
      Stock Options.
      Company
      through its compensation committee has granted effective December 10, 2007
      fully
      vested options to purchase up to 5,750,000 shares of Common Stock to Executive
      in accordance with the form of option agreement attached hereto as Exhibit
      A.

     

    (b) Performance
      Options.
      Company
      through its compensation committee has granted effective December 10, 2007
      unvested options to purchase up to 7,000,000 shares of Common Stock to Executive
      in accordance with the form of option agreement attached hereto as Exhibit
      B.
      

     

    2. Terms
      of Employment.
      

     

    (a) Section 4(a)
      of the
      Employment Agreement is amended and restated as follows:

     

    “(a) Executive
      shall serve as COO of Company and shall have the normal duties, responsibilities
      and authority of the position of COO, subject to the power of the Board to
      limit
      such duties, responsibilities and authority.”

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      following paragraph is added to the end of Section 4(b)(i)
      entitled
“Base Salary:”

     

    “Effective
      January 1, 2008, Executive’s Base Salary shall be increased to $250,000 per
      annum.”

     

    (c) Section 4(b)(ii)
      entitled
“Additional Compensation” is amended and restated as follows:

     

    “(ii) Additional
      Compensation
      In
      addition to Base Salary, Executive shall be eligible to receive an annual bonus
      based upon the attainment of certain performance goals and objectives
      established by the Board and/or the Compensation Committee established by the
      Board, in accordance with annual objectives, with no less than 2/3 tied to
      objective results (such as monthly recurring revenue and EBITDA),and the
      remaining percentage tied to subjective results (which could include
      departmental management, establishment of a cooperative working environment,
      effort and other factors). The target annual bonus, assuming accomplishment
      of
      100% of the target objectives and the wherewithal of Company to pay the same
      is
      100% of Base Salary. With respect to 2007 Executive shall be entitled to a
      cash
      bonus of: (A) $25,000, payable prior to January 31, 2008; and (B) $50,000
      payable thirty (30) days after the receipt by Company or one if its subsidiaries
      (hereinafter referred to as a “Subsidiary”) of the first payment for the
      570th
      installed circuit by Company of its current contract to install circuits with
      a
      carrier engaged in the sale of voice minutes.

     

    The
      incentive bonus for 2008 and thereafter will be determined annually by the
      Board
      or by the Compensation Committee if delegated such task by the Board. There
      will
      be no cap, with incentive bonus to increase with increased profit performance
      for over plan achievement. Plan metrics will be set annually and agreed to
      by
      the CEO. Executive shall be entitled at Executive’s option to take payment of
      incentive bonus either 100% in cash, or to take a lesser amount of cash (the
      amount of cash bonus to be paid in such event, if any, is the “Retained Sum”)
      and accept a grant of “European Options” to purchase Common Stock of Company
      pursuant to the “Formula Amount.” The “Formula Amount” will be based upon the
      amount of the bonus not taken in cash (the “Non-cash Sum”), whereby Company will
      determine the ten (10) day average closing price of Company’s Common Stock for
      the last ten (10) trading days immediately preceding the date of the
      announcement of the bonus (the “TDA”), and Executive will then be entitled to an
      option to purchase that number of shares of Common Stock equal to the Non-cash
      Sum divided by one half of the TDA, with the purchase price for such shares
      to
      be one half of the TDA. The European Option, if selected, will be fully vested,
      but will be exercisable only at any time during the calendar year following
      the
      year in which the European Option is selected, subject to a Change in Control
      provision which would change the exercise period in a manner substantially
      similar to that set forth in the form of option agreement attached hereto as
      Exhibit B
      with
      respect to a Change in Control. The form and remaining terms of the European
      Option(s) shall be substantially similar to the form and terms attached as
      Exhibit B,
      and
      shall be in such form as Company in good faith shall submit to Executive. The
      determination by Executive to accept the European Options with respect to a
      particular year must be made within one (1) business day of being informed
      of
      his incentive bonus amount, and absent delivery of notice of election of the
      European Option, the entire bonus shall be payable in cash. By way of example,
      if the TDA was $2.00 per share and the Non-cash Sum elected by Executive was
      $100,000, then the European Options would relate to 100,000 shares of Common
      Stock, purchasable at $1.00 per share.” 

     

    
      
        
        

      

      
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    3. Addition
      of Noncompetition Covenant.
      The
      following Section 9(b)(iv)
      is added
      to the Agreement (and the period at the end of Section 9(b)(iii)
      of the
      Agreement is deleted and replaced by “; or”):

     

    “(iv) take
      any
      action that would violate the terms of this Section 9(b)(iv).
      Executive acknowledges that the covenants set forth in this Section 9(b)(iv)
      are
      reasonable in scope and essential to the preservation of the Business of Company
      (as defined herein). Executive also acknowledges that the enforcement of the
      covenants set forth in this Section 9(b)(iv)
      will not
      preclude Executive from being gainfully employed in such manner and to the
      extent as to provide a standard of living for himself, the members of his family
      and the others dependent upon him of at least the level to which he and they
      have become accustomed and may expect. In addition, Executive acknowledges
      that
      Company has obtained an advantage over its competitors as a result of its name,
      location and reputation that is characterized by near permanent relationships
      with vendors, customers, principals and other contacts which it has developed
      at
      great expense. Furthermore, Executive acknowledges that competition by him
      following the termination or expiration of his employment would impair the
      operation of Company beyond that which would arise from the competition of
      an
      unrelated third party with similar skills. Executive hereby agrees that he
      shall
      not, during his employment and for a period of one (1) year after the end of
      his
      employment, directly or indirectly, engage in or become directly or indirectly
      interested in any proprietorship, partnership, firm, trust, company, limited
      liability company or other entity, other than Company (whether as owner,
      partner, trustee, beneficiary, stockholder, member, officer, director, employee,
      independent contractor, agent, servant, consultant, manager, lessor, lessee
      or
      otherwise) that:

     

    
      
        
        

      

      
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    (a) competes
      with Company in the Business of Company; or 

     

    (b) competes
      at a material level with Company in the Restricted Territory (as defined
      herein), other than acquiring an ownership interest in a company listed on
      a
      recognized stock exchange in an amount which does not exceed five percent (5%)
      of the outstanding stock of such corporation. For purposes of this Agreement,
      the term “Business of Company” shall include all business activities and
      ventures related to the business of providing of any of the
      following:

     

    (i) provision
      of telecom network integration services, including the sale or lease of
      broadband circuits for the transmission of data or voice; 

     

    (ii) cost
      reduction solutions for companies aimed at taking cost out of their network
      usage or procurement, including network optimization and least cost
      routing;

     

    (iii) licensing
      or sale of software intended to effect the foregoing:

     

    (1) all
      other
      businesses in which Company or any of its subsidiaries is engaged in as of
      the
      date of termination of Executive’s employment; and

     

    (2) the
      term
“Restricted Territory” means any state in the United States of America.
      Executive specifically acknowledges that the Business of Company is not
      naturally restricted by any geographic boundaries.

     

    Notwithstanding
      anything to the contrary contained in this Agreement, in order to enforce the
      terms of the noncompetition covenant contained in this Section
      9(b)(iv),
      Company
      must make payment to Executive no later than 30 days following the termination
      of his employment with the Company or any of its subsidiaries of the full amount
      of severance payments that would otherwise be payable to him under this
      Agreement as if he had been terminated without “cause,” if it wishes to enforce
      the noncompetition provisions called for hereunder. For the avoidance of doubt,
      the payment called for in the preceding sentence will not be in addition to
      the
      severance otherwise payable hereunder, if any. Notwithstanding anything to
      the
      contrary contained in this paragraph, should Executive’s employment have been
      terminated for “cause” as defined in this Agreement, then the Company shall be
      entitled to enforce the noncompetition covenant contained in this Section
      9(b)(iv) by
      paying
      to Executive no later than 30 days following the termination of his employment
      with the Company or any of its subsidiaries of one half of the full amount
      of
      severance payments that would otherwise be payable to him under this Agreement
      as if he had been terminated without “cause,” if it wishes to enforce the
      noncompetition provisions called for hereunder.”

     

    4. Notice
      Provision.
      The
      addresses for the delivery of notices and communications with respect to this
      Agreement in Section
      14(b)
      and with
      respect to Exhibit A
      are
      hereby amended and restated as follows:

     

    
      
        
        

      

      
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              If
                to Executive:

            	
              At
                Executive’s home address as reflected on the books and records of Company,
                with a copy to Executive at the address of Company set forth
                below.

            
	 	 
	
              If
                to Company:

            	
              Capital
                Growth Systems, Inc.

              500
                West Madison - Suite 2060

              Chicago,
                IL 60661

            
	 	 
	 	
              with
                a copy to:

            
	 	 
	 	
              Mitchell
                D. Goldsmith, Esq.

              Shefsky
                & Froelich Ltd.

              111
                East Wacker Drive - Suite 2800

              Chicago,
                IL 60601”

            


    

    


    5. Miscellaneous.
      The
      following Section
      14(l)
      is added
      at the end of the Employment Agreement:

     

    “(l) To
      the
      extent of any inconsistency between the terms of the First Amendment to this
      Employment Agreement and the original form of Employment Agreement, the First
      Amendment will prevail and supersede the terms of the original Employment
      Agreement.”

     

    This
      Amendment may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same Amendment.

     

    [SIGNATURE
      PAGE TO FOLLOW]

     


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned have executed this First Amendment to
      Employment Agreement effective as of the date first set forth
      above.

     

    
      	
              COMPANY:

            	 	
              EXECUTIVE:

            
	 	 	 
	
              CAPITAL
                GROWTH SYSTEMS, INC.,
                a
                

            	 	 
	
              Florida
                corporation

            	 	 
	 	 	
              ROBERT
                POLLAN

            
	 	 	 
	
              By:

            	 	 	 
	
              Its:

            	 	 	 


    

     

    
      
        
        

      

      
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