Unassociated Document


     

    
      Exhibit
        10.18

       

      INDEPENDENT
        CONSULTING AGREEMENT

       

      This
        Independent Consulting Agreement (“Agreement”), effective as of the
        1st
        day of
        November, 2008 (“Effective Date”) is entered into by and between Capital
        Growth Systems, Inc., a
        Florida
        corporation (herein referred to as the “Company”), and Salzwedel
        Financial Communications, Inc.,
        an
        Oregon corporation (herein referred to as the “Consultant”).

       

      RECITALS:

       

      WHEREAS,
        the Company is a publicly-held corporation with its common stock traded on
        the
        OTCBB;

       

      WHEREAS,
        Company desires to engage the services of Consultant to represent the Company
        in
        investors' communications and public relations with existing shareholders,
        brokers, dealers and other investment professionals as to the Company's current
        and proposed activities, and to consult with management concerning such Company
        activities;

       

      NOW
        THEREFORE, in consideration of the promises and the mutual covenants and
        agreements hereinafter set forth, the parties hereto covenant and agree as
        follows:

       

      1. Term
        of Consultancy.
        Company
        hereby agrees to retain the Consultant to act in a consulting capacity to
        the
        Company, and the Consultant hereby agrees to provide services to the Company
        commencing immediately and ending on October 30th, 2009 unless otherwise
        terminated earlier as provided herein. 

       

      2. Duties
        of Consultant.
        The
        Consultant agrees that it will generally provide the following specified
        consulting services through its officers and employees during the term specified
        in Section 1, above.

       

      (a) Consult
        with and assist the Company in developing and implementing appropriate plans
        and
        means for presenting the Company and its business plans, strategy and personnel
        to the financial community, establishing an image for the Company in the
        financial community, and creating the foundation for subsequent financial
        public
        relations efforts;

       

      (b) Introduce
        the Company to the financial community, including, but not limited to, retail
        brokers, buy side and sell side institutional managers, portfolio managers,
        analysts and financial public relations professionals;

       

      (c) With
        the
        cooperation of the Company, maintain an awareness during the term of this
        Agreement of the Company's plans, strategy and personnel, as they may evolve
        during such period, and consult and assist the Company in communicating
        appropriate information regarding such plans, strategy and personnel to the
        financial community;

       

      (d) Assist
        and consult the Company with respect to its (i) relations with stockholders,
        (ii) relations with brokers, dealers, analysts and other investment
        professionals, and (iii) financial public relations generally; 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (e) Perform
        the functions generally assigned to stockholder relations and public relations
        departments in major corporations, including responding to telephone and
        written
        inquiries (which may be referred to the Consultant by the Company); reviewing
        press releases before they are released by the Company as well as reports
        and
        other communications with or to shareholders, the investment community and
        the
        general public; consulting with respect to the timing, form, distribution
        and
        other matters related to such releases, reports and communications; and,
        at the
        Company’s request and subject to the Company’s securing its own rights to the
        use of its names, marks and logos, consulting with respect to corporate symbols,
        logos, names, the presentation of such symbols, logos and names, and other
        matters relating to corporate image;

       

      (f) Upon
        and
        with the Company's direction and written approval, disseminate information
        regarding the Company to shareholders, brokers, dealers, other investment
        community professionals and the general investing public;

       

      (g) Upon
        and
        with the Company's direction, conduct meetings, in person or by telephone,
        with
        brokers, dealers, analysts and other investment professionals to communicate
        with them regarding the Company's plans, goals and activities, and assist
        the
        Company in preparing for press conferences and other forums involving the
        media,
        investment professionals and the general investment public;

       

      (h) At
        the
        Company's request, review business plans, strategies, mission statements
        budgets, proposed transactions and other plans for the purpose of advising
        the
        Company of the public relations implications thereof; and 

       

      (i) Otherwise
        perform as the Company's consultant for public relations and relations with
        financial professionals.

       

      3. Allocation
        of Time and Energies.
        The
        Consultant hereby promises to perform and discharge faithfully the
        responsibilities which may be assigned to the Consultant from time to time
        by
        the officers and duly authorized representatives of the Company in connection
        with the conduct of its financial and public relations and communications
        activities, so long as such activities are in compliance with applicable
        securities laws and regulations. Consultant and staff shall diligently and
        thoroughly provide the consulting services required hereunder. Although no
        specific hours-per-day requirement will be required, Consultant and the Company
        agree that Consultant will perform the duties set forth herein above in a
        diligent and professional manner. The parties acknowledge and agree that
        a
        disproportionately large amount of the effort to be expended and the costs
        to be
        incurred by the Consultant and the benefits to be received by the Company
        are
        expected to occur within or shortly after the first two months of the
        effectiveness of this Agreement. It is explicitly understood that neither
        the
        price of the Company’s common stock, nor the trading volume of the Company’s
        common stock hereunder measure Consultant’s performance of its duties. It is
        also understood that the Company is entering into this Agreement with
        Consultant, a corporation and not any individual member or employee thereof,
        and, as such, Consultant will not be deemed to have breached this Agreement
        if
        any member, officer or director of the Consultant leaves the firm or dies
        or
        becomes physically unable to perform any meaningful activities during the
        term
        of the Agreement, provided the Consultant otherwise performs its obligations
        under this Agreement.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      4. Remuneration.
        

       

      4.1 (a) For
        undertaking this engagement, for previous services rendered, and for other
        good
        and valuable consideration, the Company agrees to issue, or have issued,
        to the
        Consultant a “Commencement Bonus” of:

       

      (i) two
        million (2,000,000) shares of the Company’s Common Stock (“Common Stock” and
        such shares, collectively, the “Shares”); and

       

      (ii) a
        5-year
        warrant to purchase fifteen million (15,000,000)shares of Common Stock at
        $0.24
        per share, in the form attached as Exhibit A.

       

      
        	
                 

              	
                This
                  Commencement Bonus shall be fully paid and non-assessable and stock
                  certificates representing the Commencement Bonus shall be issued
                  and
                  delivered to Consultant as promptly as the Company increases its
                  authorized common stock to permit the issuance of the Shares after
                  giving
                  effect to reserved shares underlying existing options, warrants
                  and
                  conversion rights (which in all events shall be within 180 days
                  following
                  the date first set forth above), it being understood and agreed
                  that as of
                  the date of this Agreement the Company has an obligation to reserve
                  from
                  its authorized but unissued common stock all remaining outstanding
                  shares
                  to meet its obligations to its secured lenders and others for whom
                  options, warrants or convertible debt is outstanding. Additionally
                  the
                  Company agrees to pay Consultant the sum of $8000.00 cash per month
                  due
                  and payable on the 1st of each month of this Agreement. The issuance
                  of
                  the Shares and Warrant is further contingent upon the approval
                  of the
                  holders of subordinated debentures issued by the Company in March,
                  2008.
                  Should such approval not be obtained by November 30, 2008, Consultant
                  shall have no obligation to perform the Services called for
                  hereunder.

              


      

       

      (b) Consultant
        agrees that the Company may, in its sole discretion, cause one or more
        shareholders of the Company to deliver any of or all of the Shares to be
        issued
        and delivered to Consultant hereunder. 

       

      4.2 The
        Company understands and agrees that Consultant has foregone significant
        opportunities to accept this engagement and that the Company derives substantial
        benefit from the execution of this Agreement and the ability to announce
        its
        relationship with Consultant. The Commencement Bonus, therefore, constitutes
        payment for Consultant’s agreement to consult to the Company and is a
        nonrefundable, non-apportionable, and non-ratable retainer and is not a
        prepayment for future services. If the Company decides to terminate this
        Agreement prior to October 30, 2009, for any reason whatsoever, it is agreed
        and
        understood that Consultant will not be requested or demanded by the Company
        to
        return any of the Shares paid to it as Commencement Bonus referred to in
        paragraph 4.1(a) hereunder. Further, if and in the event the Company is acquired
        during the term of this Agreement, it is agreed and understood Consultant
        will
        not be requested or demanded by the Company to return any of the Shares paid
        to
        it hereunder. Consultant agrees and understands that if during the term of
        this
        Agreement, Consultant performs substantial services for any direct competitor
        of
        the Company, then the Shares issued to Consultant hereunder will be
        forfeited.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      4.3 [Intentionally
        Deleted]. 

       

      4.4 Company
        warrants that the Shares issued to Consultant under this Agreement by the
        Company shall be or have been validly issued, fully paid and non-assessable
        and
        that the Company’s board of directors has or shall have duly authorized the
        issuance and any transfer of them to Consultant. 

       

      4.5 Consultant
        acknowledges that the Shares to be issued pursuant to this Agreement have
        not
        been registered under the Securities Act of 1933, as amended (the “Securities
        Act”) and accordingly are “restricted securities” within the meaning of Rule 144
        of the Act. As such, the Shares may not be resold or transferred unless the
        Company has received an opinion of counsel and in form reasonably satisfactory
        to the Company that such resale or transfer is exempt from the registration
        requirements of that Securities Act. Consultant agrees that during the term
        of
        this Agreement, that it will not sell or transfer any of the Shares issued
        to it
        hereunder, except to the Company; nor will it pledge or assign such Shares
        as
        collateral or as security for the performance of any obligation, or for any
        other purpose.

       

      4.6 In
        connection with the acquisition of the Shares, Consultant represents and
        warrants to Company, to the best of its/his knowledge, as follows: 

       

      (a) Consultant
        has been afforded the opportunity to ask questions of and receive answers
        from
        duly authorized officers or other representatives of the Company concerning
        an
        investment in the Shares, and any additional information that the Consultant
        has
        requested.

       

      (b) Consultant’s
        investment in restricted securities is reasonable in relation to the
        Consultant’s net worth. Consultant has had experience in investments in
        restricted and publicly traded securities, and Consultant has had experience
        in
        investments in speculative securities and other investments that involve
        the
        risk of loss of investment. Consultant acknowledges that an investment in
        the
        Shares is speculative and involves the risk of loss. Consultant has the
        requisite knowledge to assess the relative merits and risks of this investment
        without the necessity of relying upon other advisors, and Consultant can
        afford
        the risk of loss of his entire investment in the Shares. Consultant is an
        accredited investor, as that term is defined in Regulation D promulgated
        under
        the Securities Act.

       

      (c) Consultant
        is acquiring the Shares for the Consultant’s own account for long-term
        investment and not with a view toward resale or distribution thereof except
        in
        accordance with applicable securities laws.

       

      5. [Intentionally
        Deleted] 

       

      6. [Intentionally
        Deleted]

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      7. Non-Assignability
        of Services.
        Consultant’s services under this contract are offered to the Company only and
        may not be assigned by the Company to any entity with which the Company merges
        or which acquires the Company or substantially all of its assets wherein
        the
        Company becomes a minority constituent of the combined Company. In the event
        of
        such merger or acquisition, all compensation to Consultant herein under the
        schedules set forth herein shall remain due and payable, and any compensation
        received by the Consultant may be retained in the entirety by Consultant,
        all
        without any reduction or pro-rating and shall be considered and remain fully
        paid and non-assessable. Notwithstanding the non-assignability of Consultant’s
        services, the Company shall assure that in the event of any merger, acquisition,
        or similar change of form of entity, that its successor entity shall agree
        to
        complete all obligations to Consultant, including the provision and transfer
        of
        all compensation herein, and the preservation of the value thereof consistent
        with the rights granted to Consultant by the Company herein. Consultant shall
        not assign its rights or delegate its duties hereunder without the prior
        written
        consent of the Company.

       

      8. Expenses.
        Consultant agrees to pay for all its expenses (phone, labor, etc.), other
        than
        extraordinary items (travel and entertainment required by/or specifically
        requested by the Company, luncheons or dinners to large groups of investment
        professionals, mass faxing to a sizable percentage of the Company's
        constituents, investor conference calls, print advertisements in publications,
        etc.) approved by the Company prior to its incurring an obligation for
        reimbursement. The Company agrees and understands that Consultant will not
        be
        responsible for preparing or mailing due diligence and/or investor packages
        on
        the Company, and that the Company will have some means to prepare and mail
        out
        investor packages at the Company’s expense. 

       

      9. Indemnification.
        The
        Company warrants and represents that all oral communications, written documents
        or materials furnished to Consultant or the public by the Company with respect
        to financial affairs, operations, profitability and strategic planning of
        the
        Company are accurate in all material respects and Consultant may rely upon
        the
        accuracy thereof without independent investigation. The Company will protect,
        indemnify and hold harmless Consultant against any claims or litigation
        including any damages, liability, cost and reasonable attorney's fees as
        incurred with respect thereto resulting from Consultant's communication or
        dissemination of any said information, documents or materials excluding any
        such
        claims or litigation resulting from Consultant's communication or dissemination
        of information not provided or authorized by the Company. 

       

      10. Representations.
        Consultant represents that it is not required to maintain any licenses and
        registrations under federal or any state regulations necessary to perform
        the
        services set forth herein. Consultant acknowledges that, to the best of its
        knowledge, the performance of the services set forth under this Agreement
        will
        not violate any rule or provision of any regulatory agency having jurisdiction
        over Consultant. Consultant acknowledges that, to the best of its knowledge,
        Consultant and its officers and directors are not the subject of any
        investigation, claim, decree or judgment involving any violation of the SEC
        or
        securities laws. Consultant further acknowledges that it is not a security
        Broker Dealer or a registered investment advisor. Company acknowledges that,
        to
        the best of its knowledge, that it has not violated any rule or provision
        of any
        regulatory agency having jurisdiction over the Company. Company acknowledges
        that, to the best of its knowledge, Company is not the subject of any
        investigation, claim, decree or judgment involving any violation of the SEC
        or
        securities laws.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      11. Legal
        Representation.
        Each of
        Company and Consultant represents that they have consulted with independent
        legal counsel and/or tax, financial and business advisors, to the extent
        that
        they deemed necessary.

       

      12. Status
        as Independent Contractor.
        Consultant's engagement pursuant to this Agreement shall be as independent
        contractor, and not as an employee, officer or other agent of the Company.
        Neither party to this Agreement shall represent or hold itself out to be
        the
        employer or employee of the other. Consultant further acknowledges the
        consideration provided hereinabove is a gross amount of consideration and
        that
        the Company will not withhold from such consideration any amounts as to income
        taxes, social security payments or any other payroll taxes. All such income
        taxes and other such payment shall be made or provided for by Consultant
        and the
        Company shall have no responsibility or duties regarding such matters. Neither
        the Company nor the Consultant possesses the authority to bind each other
        in any
        agreements without the express written consent of the entity to be
        bound.

       

      13. Attorney's
        Fee.
        If any
        legal action or any arbitration or other proceeding is brought for the
        enforcement or interpretation of this Agreement, or because of an alleged
        dispute, breach, default or misrepresentation in connection with or related
        to
        this Agreement, the successful or prevailing party shall be entitled to recover
        reasonable attorneys' fees and other costs in connection with that action
        or
        proceeding, in addition to any other relief to which it or they may be
        entitled.

       

      14. Waiver.
        The
        waiver by either party of a breach of any provision of this Agreement by
        the
        other party shall not operate or be construed as a waiver of any subsequent
        breach by such other party. 

       

      15. Notices.
        All
        notices, requests, and other communications hereunder shall be deemed to
        be duly
        given if sent by U.S. mail, postage prepaid, addressed to the other party
        at the
        address as set forth herein below:

       

      
        	
                To
                  the Company:

              	
                Capital
                  Growth Systems, Inc.

                Attention:  
                  Patrick
                  C. Shutt, CEO

                500
                  West Madison Street - Suite 2060

                Chicago,
                  IL 60661

                Facsimile:   
                  (312)
                  673-2422

                E-Mail:        
                  PShutt@globalcapacity.com

              
	 	 
	
                To
                  the Consultant:

              	
                Salzwedel
                  Financial Communications, Inc.

                Attention:  
                  Jeffrey
                  L. Salzwedel, President

                1800
                  SW Blankenship Road - Suite 275

                West
                  Linn, OR 97068

                Facsimile:   
                  (503)
                  722-7311

                E-Mail:        
                  Jeff@sfcinc.com

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      It
        is
        understood that either party may change the address to which notices for
        it
        shall be addressed by providing notice of such change to the other party
        in the
        manner set forth in this paragraph. 

       

      16. Choice
        of Law, Jurisdiction and Venue.
        This
        Agreement shall be governed by, construed and enforced in accordance with
        the
        laws of the State of Oregon. The parties agree that the state or federal
        courts
        located closest to West Linn, Oregon, will be the venue of any dispute and
        will
        have jurisdiction over all parties.

       

      17. Arbitration.
        Any
        controversy or claim arising out of or relating to this Agreement, or the
        alleged breach thereof, or relating to Consultant's activities or remuneration
        under this Agreement, shall be settled by binding arbitration in Cook County,
        Illinois in accordance with the applicable rules of the American Arbitration
        Association, Commercial Dispute Resolution Procedures, and judgment on the
        award
        rendered by the arbitrator(s) shall be binding on the parties and may be
        entered
        in any court having jurisdiction. 

       

      18. Complete
        Agreement.
        This
        Agreement contains the entire agreement of the parties relating to the subject
        matter hereof. This Agreement and its terms may not be changed orally but
        only
        by an agreement in writing signed by the party against whom enforcement of
        any
        waiver, change, modification, extension or discharge is sought.

       

      [THE
        REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

       

      
        	 	 	
                CONSULTANT:

              
	
                AGREED
                  TO:

              	 	 
	 	 	
                Salzwedel
                  Financial Communications, Inc.

              
	
                COMPANY:

              	 	 
	 	 	 
	
                Capital
                  Growth Systems, Inc.

              	 	
                By:

              	 
	 	 	 	
                Jeffrey
                  L. Salzwedel

              
	 	 	 	
                President
                  and its Duly Authorized Agent

              
	
                By:

              	 	 	 
	 	 	 
	
                Its:

              	 	 	 


      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      THE
        SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER HEREOF FOR
        ITS
        OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR CAUSING TO BE MADE
        A
        PUBLIC DISTRIBUTION OF ALL OR ANY PORTION THEREOF. SUCH SECURITIES HAVE NOT
        BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS
        AND MAY
        NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, EXCEPT PURSUANT TO
        AN
        EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
        EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

       

      
        	
                No.

              	
                Salzwedel-1

              	 	
                As
                  of November __, 2008

              
	 	
                Chicago,
                  Illinois

              


      

      


      CAPITAL
        GROWTH SYSTEMS, INC.

      FORM
        OF CGSI TERM NOTE WARRANT TO PURCHASE

       

      $0.24
        PER COMMON SHARE ON 

       

      Void
        after December 31, 2013, Unless Extended

       

      Capital
        Growth Systems, Inc., a Florida corporation (the “Company”), hereby certifies
        that, for value received, Salzwedel Financial Communications, Inc. (including
        any successors and assigns, “Holder”), is entitled, subject to the terms set
        forth below, to purchase from the Company at any time or from time to time
        before 5:00 PM Central time, on December 31, 2013 (the “Expiration Date”), fully
        paid and nonassessable shares of the Company’s $0.0001 par value Common Stock
        (the “Warrant Shares”) under the terms set forth herein

       

      1. Number
        of Warrant Shares; Exercise Price.
        This
        Warrant shall evidence the right of the Holder to purchase up to 15,000,000
        Warrant Shares (which number of Warrant Shares will remain fixed and is not
        subject to any adjustment except as provided in Section
        5
        below)
        at an initial exercise price per Warrant Share of $0.24 per share (the “Exercise
        Price”), subject to adjustment as provided in Section
        5 below.

       

      2. Definitions.
        As used
        herein the following terms, unless the context otherwise requires, have the
        following respective meanings:

       

      (a) The
        term
“Common Stock” shall mean the common stock, par value $0.0001 of the
        Company.

       

      (b) The
        term
“Company” shall mean Capital Growth Systems, Inc., a Florida corporation, and
        shall include any company which shall succeed to or assume the obligations
        of
        the Company hereunder.

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      (c) The
        term
“Corporate Transaction” shall mean (i) a sale, lease transfer or conveyance of
        all or substantially all of the assets of the Company; (ii) a consolidation
        of
        the Company with, or merger of the Company with or into, another corporation
        or
        other business entity in which the stockholders of the Company immediately
        prior
        to such consolidation or merger own less than 50% of the voting power of
        the
        surviving entity immediately after such consolidation or merger; or (iii)
        any
        transaction or series of related transactions to which the Company is a party
        in
        which in excess of 50% of the Company’s voting power is transferred, excluding
        any consolidation or merger effected exclusively to change the domicile of
        the
        Company and/or an effective change of the number of issued and outstanding
        shares of the Company (i.e.,
        reverse
        or forward split). 

       

      3. Exercise
        Date; Expiration.
        Subject
        to the terms hereof, this Warrant may be exercised by the Holder at any time
        following the “Amendment Date,” or from time to time thereafter before the
        Expiration Date (the “Exercise Period”). The “Amendment Date” shall be the date
        following the date of this Warrant that the Company amends its articles of
        incorporation to authorize the issuance of not less than 600,000,000 shares
        of
        common stock.

       

      4. Exercise
        of Warrant; Partial Exercise.
        This
        Warrant may be exercised in full or in part by the Holder by: (i) surrender
        of
        this Warrant, together with the Holder’s duly executed form of subscription
        attached hereto as Exhibit A,
        to the
        Company at its principal office, accompanied by payment, in cash or by certified
        or official bank check payable to the order of the Company, of the aggregate
        exercise price (as determined above) of the number of Warrant Shares to be
        purchased hereunder (with a replacement warrant to be issued as necessary
        to
        reflect the unexercised portion of this Warrant if exercised in part and
        not in
        full); or (ii) by way of cashless exercise as provided in Section
        6
        of this
        Warrant. The exercise of this Warrant pursuant to this Section 4
        shall be
        deemed to have been effected immediately prior to the close of business on
        the
        business day on which this Warrant is surrendered to the Company as provided
        in
        this Section 4,
        and at
        such time the person in whose name any certificate for Warrant Shares shall
        be
        issuable upon such exercise shall be deemed to be the record holder of such
        Warrant Shares for all purposes. As soon as practicable after the exercise
        of
        this Warrant, the Company at its expense will cause to be issued in the name
        of
        and delivered to the Holder, or as the Holder may direct, a certificate or
        certificates for the number of fully paid and nonassessable full shares of
        Warrant Shares to which the Holder shall be entitled on such exercise, together
        with cash, in lieu of any fraction of a share, equal to such fraction of
        the
        current fair market value of one full Warrant Share as determined in good
        faith
        by the board of directors of the Company and as set forth in Section
        7,
        and, if
        applicable, a new warrant evidencing the balance of the shares remaining
        subject
        to the Warrant.

       

      5. Weighted
        Average Anti-Dilution Price Protection.
        The
        purchase price of Warrant Shares (or any shares of stock or other securities
        which may be) issuable upon the exercise of this Warrant shall be subject
        to
        adjustment from time to time, as follows:

       

      (a) “New
        Securities” shall mean any Common Stock or preferred stock of Company issued
        during the term of this Warrant, whether now authorized or not, and rights,
        options or warrants to purchase said Common Stock or preferred stock, and
        securities of any type whatsoever that are, or may become, convertible into
        said
        Common Stock or preferred stock (including but not limited to convertible
        debt
        or any other instrument exercisable for or convertible into Common Stock);
        provided, however, that “New Securities” does not include (i) any securities
        which are deemed to constitute an “Exempt Issuance” as that term is defined in
        the Securities Purchase Agreement (from October or November 2008) for the
        issuance of convertible debentures and warrants, the proceeds of which have
        been
        used in whole or part for the purchase of limited liability company interests
        of
        Vanco Direct USA, LLC.

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      (b) In
        the
        event that Company issues New Securities for a consideration of less than
        $0.24
        per share of Common Stock (on an as converted to Common Stock basis, as adjusted
        per this Section
        5
        hereof)
        (the “Original Purchase Price”), or if the Original Purchase Price shall have
        been adjusted hereunder, and the Company issues New Securities for a purchase
        price below the adjusted Purchase Price, then the then-current Purchase Price
        shall be adjusted downward to a price determined by dividing

       

      (i) the
        sum
        of (w) the Purchase Price in effect before the issuance of such New Securities
        multiplied by the number of shares of the Company’s Common Stock then issued and
        outstanding plus the number of shares of Company preferred stock then issued
        as
        converted into shares of Common Stock (including shares of common stock reserved
        pursuant to the issued Offering Warrants) immediately prior to the issuance
        of
        such New Securities and (x) the consideration, if any, received by or deemed
        to
        have been received by the Company on the issue of such New Securities
        by:

       

      (ii) the
        sum
        of (y) the number of shares of the Company’s Common Stock then issued and
        outstanding plus the number of shares of the Company’s preferred stock then
        issued as converted into shares of Common Stock (including shares of Common
        Stock reserved pursuant to the issued Offering Warrants) immediately prior
        to
        the issuance of such New Securities and (z) the number of Additional Shares
        of
        Common Stock issued or deemed to have been issued in the issuance of such
        New
        Securities.

       

      (c) In
        the
        case of the issuance of Common Stock for cash, the consideration shall be
        deemed
        to be the amount of cash paid.

       

      (d) In
        the
        case of the issuance of Common Stock for a consideration in whole or in part
        other than cash, the consideration other than cash shall be deemed to be
        the
        fair value thereof as reasonably determined by the Company’s board of directors
        consistent with its fiduciary duties irrespective of any accounting
        treatment.

       

      (e) The
        Company will not by reorganization, transfer of assets, consolidation, merger,
        dissolution, or otherwise, avoid or seek to avoid observance or performance
        of
        any of the terms of this Section
        5,
        but
        will at all times in good faith assist in the carrying out and performance
        of
        all provisions of this Section
        5
        in order
        to protect the rights of the Holder against impairment.

       

      6. Adjustments
        to Number of Warrants and Conversion Price.
        The
        number and kind of Warrant Shares or any shares of stock or other securities
        which may be issuable upon the exercise of this Warrant and the exercise
        price
        hereunder shall be subject to adjustment from time to time upon the happening
        of
        certain events, as follows:

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

      (a) Splits
        and Subdivisions.
        In the
        event the Company should at any time or from time to time fix a record date
        for
        the effectuation of a split or subdivision of the outstanding shares of Common
        Stock entitled to receive a dividend or other distribution payable in additional
        shares of Common Stock or other securities or rights convertible into, or
        entitling the holder thereof to receive directly or indirectly, additional
        shares of Common Stock, with the entitlement for the holder thereof to receive
        directly or indirectly, additional shares of Common Stock, hereinafter referred
        to as the “Common Stock Equivalents”) without payment of any consideration by
        such Holder for the additional shares of Common Stock or the Common Stock
        Equivalents, then, as of such record date (or the date of such distribution,
        split or subdivision if no record date is fixed), the Exercise Price shall
        be
        appropriately decreased and the number of Warrant Shares for which this Warrant
        is exercisable shall be appropriately increased in proportion to such increase
        of outstanding shares.

       

      (b) Combination
        of Shares.
        If the
        number of shares of Common Stock outstanding at any time after the date hereof
        is decreased by a combination of the outstanding shares of Common Stock,
        the
        Exercise Price shall be appropriately increased and the number of Warrant
        Shares
        for which this Warrant is exercisable shall be appropriately decreased in
        proportion to such decrease in outstanding shares.

       

      (c) Reclassification
        or Reorganization.
        If the
        Warrant Shares issuable upon the exercise of this Warrant shall be changed
        into
        the same or different number of shares of any class or classes of stock,
        whether
        by capital reorganization, reclassification or otherwise (other than a split,
        subdivision or stock dividend provided for in Section 6(a)
        above or
        a combination of shares provided for in Section 6(b)
        above,
        or a reorganization, merger or consolidation provided for in Section 6(d)
        below,
        then and in each such event the Holder shall be entitled to receive upon
        the
        exercise of this Warrant the kind and amount of shares of stock and other
        securities and property receivable upon such reorganization, reclassification
        or
        other change, to which a holder of the number of Warrant Shares issuable
        upon
        the exercise of this Warrant would have received if this Warrant had been
        exercised immediately prior to such reorganization, reclassification or other
        change, all subject to further adjustment as provided herein.

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

       

      (d) Merger
        or Consolidation.
        If at
        any time or from time to time there shall be a capital reclassification or
        reorganization of the Warrant Shares or a Corporate Transaction (other than
        a
        subdivision, combination, reclassification or exchange of shares provided
        for
        elsewhere in this Section 6) of the Company, then as a part of such
        reorganization or Corporate Transaction, adequate provision shall be made
        so
        that the Holder shall thereafter be entitled to receive upon the exercise
        of
        this Warrant, the number of shares of stock or other securities or property
        of
        the Company, resulting from such reorganization, recapitalization or Corporate
        Transaction to which a holder of the number of Warrant Shares issuable upon
        the
        exercise of this Warrant would have received if this Warrant had been exercised
        immediately prior to such reorganization or Corporate Transaction. In any
        such
        case, the Company will make appropriate provision to insure that the provisions
        of this Section 6(d) hereof will thereafter be applicable as nearly as may
        be in
        relation to any shares of stock or securities thereafter deliverable upon
        the
        exercise of this Warrant. The Company shall not effect any such Corporate
        Transaction unless prior to or simultaneously with the consummation thereof
        the
        successor corporation (if other than the Company) resulting from such Corporate
        Transaction or the corporation purchasing or acquiring such assets or other
        appropriate corporation or entity shall assume the obligation to deliver
        to the
        Holder, at the last address of the Holder appearing on the books of the Company,
        such shares of stock, securities or assets as, in accordance with the foregoing
        provisions, the Holder may be entitled to purchase, and the other obligations
        under this Warrant. The provisions of this paragraph 6(d) shall similarly
        apply
        to successive reorganizations, reclassifications, or Corporate Transactions.
        Notwithstanding anything to the contrary contained herein, in the event at
        least
        30 days prior to the closing of the reorganization or Corporate Transaction
        the
        Company receives the written consent from holders of “Offering Warrants” (as
        defined below) outstanding which represent the right to purchase fifty-one
        percent (51%) of the shares of Common Stock purchasable under the Offering
        Warrants (the “Offering Warrant Majority”) that all Offering Warrants shall be
        cancelled effective as of the closing of the reorganization or Corporate
        Transaction, then provided the Company provides notice to the Holder of this
        Warrant at least 20 days prior to the closing of such reorganization or
        Corporate Transaction of such approval, then effective upon the closing of
        such
        reorganization or Corporate Transaction, this Warrant shall be cancelled.
        For
        purposes hereof, the term “Offering Warrants” shall mean all of the outstanding
        warrants that were issued to any of the following persons or entities (or
        their
        designees) by the Company in November, 2008 in connection with the transactions
        associated with the proposed purchase of 100% of the limited liability company
        interests of Vanco Direct USA, LLC: (i) the purchasers of subordinated
        convertible debentures; (ii) Aequitas Capital Management, Inc.; (iii) Salzwedel
        Financial Communications, Inc. and (iv) Capstone Investments, Inc.

       

      (e) Notice
        of Record Dates; Adjustments.
        The
        Company shall promptly notify the Holder in writing of each adjustment or
        readjustment of the Exercise Price hereunder and the number of Warrant Shares
        issuable upon the exercise of this Warrant. Such Notice shall state the
        adjustment or readjustment and show in reasonable detail the facts on which
        that
        adjustment or readjustment is based, as well as whether this Warrant will
        be
        cancelable as specified above.

       

      7. Registration
        Rights and Cashless Exercise.
        The
        Company shall have the obligation to file a piggyback registration statement
        with respect to the shares underlying this Warrant with respect to any
        subsequent registration statement filed by the Company, subject to the caveats
        that: (i) no registration obligation shall exist to the extent that the shares
        underlying this Warrant if purchased by cashless exercise, would be eligible
        for
        resale pursuant to Rule 144 promulgated under the Securities Act of 1933
        as
        amended (or the functional equivalent of such Rule), or (ii) should the
        investor(s) requiring such registration statement prohibit the registration
        of
        the shares underlying this Warrant, then in such event the shares underlying
        this Warrant shall not be subject to the requirement that they be registered
        and
        provided further that should the SEC require as a condition to the declaration
        of effectiveness of such registration statement that the number of shares
        registrable in such registration statement be less than the full amount sought
        for such registration statement, then priority for registration shall be
        given
        first to the Investors’ shares subject to the registration statement and next
        pro rata to the shares represented by this Warrant and any other shares subject
        to piggyback registration rights with the Company (pro rata if not all of
        such
        shares can be registered). Should the Company elect to file a registration
        statement covering some or all of the shares underlying this Warrant, the
        Holder
        of this Warrant as a condition to such registration shall provide such
        information as is necessary to effect a registration of the shares. In all
        events, Holder shall have the right to effect a cashless exercise of the
        shares
        subject to this Warrant pursuant to the following process.

       

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

       

      (a) Upon
        execution of the cashless exercise of the shares subject to this Warrant
        (the
“Converted Warrant Shares”), the Company shall deliver to the Holder (without
        payment by the Holder of any exercise price or any cash or other consideration)
        that number of fully paid and nonassessable Warrant Shares computed using
        the
        following formula:

       

      
        	
                X
                  =

              	
                Y
                  (A – B)

              
	 	
                A

              


      

      


      
        	
                Where:

                 

              	
                X
                  =

                 

              	
                the
                  number of shares of Warrant Shares to be delivered to the
                  Holder;

                 

              
	 	
                Y
                  =

                 

              	
                the
                  number of Converted Warrant Shares;

                 

              
	 	
                A
                  =

                 

              	
                the
                  fair market value of one Warrant Share on the Conversion Date (as
                  defined
                  below); and

                 

              
	 	
                B
                  =

              	
                the
                  Exercise Price (as adjusted to the Conversion
                  Date).

              


      

      


      (b) No
        fractional shares shall be issuable upon cashless exercise of the Warrant,
        and
        if the number of shares to be issued, determined in accordance with the
        foregoing formula, is other than a whole number, the Company shall pay to
        the
        Holder an amount in cash equal to the fair market value of the resulting
        fractional share on the Conversion Date (as defined below). 

       

      (i) Method
        of Exercise.
        The
        Holder may execute the cashless exercise by the surrender of this Warrant
        at the
        principal office of the Company together with a written statement specifying
        that the Holder thereby intends to execute a cashless exercise and indicating
        the total number of shares under this Warrant that the Holder is exercising
        through the cashless exercise. Such conversion shall be effective upon receipt
        by the Company of this Warrant together with the aforesaid written statement,
        or
        on such later date as is specified therein (the “Conversion Date”). Certificates
        for the shares issuable upon execution of the cashless exercise shall be
        delivered to the Holder within three business days following the Conversion
        Date.

       

      (ii) Determination
        of Fair Market Value.
        For
        purposes of this Section 6,
        fair
        market value of a Warrant Share on the Conversion Date shall be determined
        as
        follows:

       

      (1) If
        the
        Common Stock is traded on a stock exchange or the Nasdaq Stock Market (or
        a
        similar national quotation system), the fair market value of a Warrant Share
        shall be deemed to be the average of the closing selling prices of the Common
        Stock on the stock exchange or system determined by the Board to be the primary
        market for the Common Stock over the ten (10) trading day period ending on
        the
        date prior to the Conversion Date, as such prices are officially quoted in
        the
        composite tape of transactions on such exchange or system;

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

       

      (2) If
        the
        Common Stock is traded over-the-counter, the fair market value of a Warrant
        Share shall be deemed to be the average of the closing bid prices (or, if
        such
        information is available, the closing selling prices) of the Common Stock
        over
        the ten (10) trading day period ending on the date prior to the Conversion
        Date,
        as such prices are reported by the National Association of Securities Dealers
        through its NASDAQ system or any successor system; and

       

      (3) If
        there
        is no public market for the Common Stock, then the fair market value of a
        Warrant Share shall be determined by the board of directors of the Company
        in
        good faith, and, upon request of the Holder, the Board (or a representative
        thereof) shall, as promptly as reasonably practicable but in any event not
        later
        than 15 days after such request, notify the Holder of the Fair Market Value
        per
        share of Common Stock.

       

      Notwithstanding
        anything to the contrary contained herein, at any time following the date
        of the
        issuance of this Warrant, if the Holder hereof would be eligible for the
        resale
        of all of the shares of Common Stock purchasable by way of the cashless exercise
        rights hereunder pursuant to Rule 144, then the piggyback registration rights
        contained herein shall lapse as of that date. 

       

      8. Replacement
        of Warrant.
        On
        receipt by the Company of evidence reasonably satisfactory to the Company
        of the
        loss, theft, destruction or mutilation of this Warrant and, in the case of
        any
        such loss, theft or destruction of this Warrant, on delivery of an indemnity
        agreement reasonably satisfactory in form and amount to the Company or, in
        the
        case of any such mutilation, on surrender and cancellation of such Warrant,
        the
        Company at its expense will execute and deliver to the Holder, in lieu thereof,
        a new Warrant of like tenor.

       

      9. No
        Rights or Liability as a Stockholder.
        This
        Warrant does not entitle the Holder hereof to any voting rights or other
        rights
        as a stockholder of the Company. No provisions hereof, in the absence of
        affirmative action by the Holder to purchase Warrant Shares, and no enumeration
        herein of the rights or privileges of the Holder, shall give rise to any
        liability of the Holder as a stockholder of the Company. 

       

      10. No
        Impairment.
        The
        Company will not, by amendment of its charter or through reorganization,
        consolidation, merger, dissolution, sale of assets or any other voluntary
        action, avoid or seek to avoid the observance or performance of any of the
        terms
        of this Warrant but will at all times carry out all such terms and take all
        such
        action as may be reasonably necessary or appropriate in order to protect
        the
        rights of the holder of this Warrant against impairment, subject to any
        amendment or waiver as permitted pursuant to Section
        10(e).
        

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

      11. Miscellaneous.

       

      (a) Transfer
        of Warrant.
        The
        Holder agrees not to make any disposition of this Warrant, the Warrant Shares
        or
        any rights hereunder without the prior written consent of the Company. Any
        such
        permitted transfer must be made by the Holder in person or by duly authorized
        attorney, upon delivery of this Warrant and the form of assignment attached
        hereto as Exhibit B
        to any
        such permitted transferee. As a condition precedent to such transfer, the
        transferee shall sign an investment letter in form and substance satisfactory
        to
        the Company. Subject to the foregoing, the provisions of this Warrant shall
        inure to the benefit of and be binding upon any successor to the Company
        and
        shall extend to any holder hereof. 

       

      (b) Titles
        and Subtitles.
        The
        titles and subtitles used in this Warrant are for convenience only and are
        not
        to be considered in construing or interpreting this Warrant.

       

      (c) Notices.
        Any
        notice required or permitted to be given to a party pursuant to the provisions
        of this Warrant shall be in writing and shall be effective and deemed delivered
        to such party under this Warrant on the earliest of the following: (a) the
        date
        of personal delivery; (b) two (2) business days after transmission by facsimile,
        addressed to the other party at its facsimile number, with confirmation of
        transmission; (c) four (4) business days after deposit with a return receipt
        express courier for United States deliveries; or (d) five (5) business days
        after deposit in the United States mail by registered or certified mail (return
        receipt requested) for United States deliveries. All notices not delivered
        personally or by facsimile will be sent with postage and/or other charges
        prepaid and properly addressed to such party at the address set forth on
        the
        signature page hereto, or at such other address as such party may designate
        by
        ten (10) days advance written notice to the other party hereto. Notices to
        the
        Company will be marked “Attention: Chief Financial Officer.”

       

      (d) Attorneys’
        Fees.
        If any
        action at law or in equity is necessary to enforce or interpret the terms
        of
        this Warrant, the prevailing party shall be entitled to reasonable attorneys’
fees, costs and disbursements in addition to any other relief to which such
        party may be entitled.

       

      (e) Amendments
        and Waivers.
        Any
        term of this Warrant may be amended and the observance of any term of this
        Warrant may be waived (either generally or in a particular instance and either
        retroactively or prospectively) with the written consent of the Holder and
        the
        Company. Any amendment or waiver effected in accordance with this Section 10(e)
        shall be
        binding upon the Holder of this Warrant (and of any securities into which
        this
        Warrant is convertible), each future holder of all such securities, and the
        Company.

       

      
        (f) Severability.
          If one
          or more provisions of this Warrant are held to be unenforceable under applicable
          law, such provision shall be excluded from this Warrant and the balance
          of the
          Warrant shall be interpreted as if such provision were so excluded and
          shall be
          enforceable in accordance with its terms.

         

      

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

       

      (g) Governing
        Law.
        This
        Warrant shall be governed by and construed and enforced in accordance with
        the
        laws of the State of Illinois, without giving effect to its conflicts of
        laws
        principles.

       

      (h) Counterparts.
        This
        Warrant may be executed in any number of counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        instrument.

       

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
        duly
        authorized officer as of the date first written above.

       

      
        	 	 	
                CAPITAL
                  GROWTH SYSTEMS, INC.

              
	 	 	 
	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	 	 	 
	 	 	 
	 	 	 
	 	 	
                HOLDER
                  NAME:

              	
                Salzwedel
                  Financial Communications, Inc.

              
	 	 	 
	 	 	
                Address:

              	
                1800
                  West Blankenship Road - Suite 275

              
	
                 

              	 	 	
                West
                  Linn, Oregon 97068

              


      

       

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      FORM
        OF SUBSCRIPTION OF $0.24 WARRANT

       

      (To
        be signed only on exercise of Warrant)

       

      
        	
                To:

              	
                CAPITAL
                  GROWTH SYSTEMS, INC.

              


      

       

      The
        undersigned, pursuant to the provisions set forth in the attached Warrant,
        hereby irrevocably elects to purchase: (i) for cash _____ shares of the Common
        Stock covered by such Warrant and herewith makes payment of $ _________,
        representing the full purchase price for such shares at the price per share
        provided for in such Warrant; or (ii) purchase pursuant to the cashless exercise
        option contained in the Warrant a total of __________ shares of Common Stock
        covered by the Warrant, after giving effect to cancellation of _______shares
        of
        Common Stock covered by the Warrant due to the cashless exercise provisions
        of
        the Warrant. 

       

      Please
        issue a certificate or certificates representing ________ shares in the name
        of
        the undersigned or in such other name or names as are specified
        below:

       

      


      
        	 	 	 
	 	
                (Name)

              	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
                (Address)

              	 


      

      


      The
        undersigned represents that the aforesaid shares are being acquired for the
        account of the undersigned for investment and not with a view to, or for
        resale
        in connection with, the distribution thereof and that the undersigned has
        no
        present intention of distributing or reselling such shares, all except as
        in
        compliance with applicable securities laws.

       

      


      
        	
                Dated:

              	 	 	 
	 	 	
                (Signature
                  must conform in all respects to name of the Holder as specified
                  on the
                  face of the Warrant)

              
	 	 	 
	 	 	 
	 	 	
                (Print
                  Name)

              
	 	 	 


      

      
        	 	 	
                Address:

              	 


      

      


      
        
          
          

        

        
          A-A-1

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        B

       

      FORM
        OF ASSIGNMENT OF $0.50 WARRANT

       

      (To
        assign the foregoing Warrant, execute this form and supply

      required
        information. Do not use this form to purchase shares.)

       

      FOR
        VALUE
        RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
        assigned to:

      

        
          	
                  Name:

                	 	 	 
	 	 	
                  (Please
                    Print)

                	 
	 	 	 	 
	
                  Address:

                	 	 	 
	 	 	
                  (Street)

                	 
	 	 	 	 
	 	
                  (City)

                	
                  (State)

                	
                  (Zip
                    Code)

                
	 	 	 	 
	
                  Date:

                	 	 	 
	 	 	 	 
	 	 	 	 
	
                  Holder’s
                    Signature:

                	 	 	 
	 	 	 	 
	
                  Holder’s
                    Address:

                	 	 	 
	 	 	
                  (Street)

                	 
	 	 	 	 
	 	
                  (City)

                	
                  (State)

                	
                  (Zip
                    Code)

                


        

      

      


      NOTE:
        The
        signature to this Form of Assignment must correspond with the name as it
        appears
        on the face of the Warrant, without alteration or enlargement or any change
        whatever. Officers of corporations and those acting in a fiduciary or other
        representative capacity should file proper evidence of authority to assign
        the
        foregoing Warrant.

      


      
        
          
          

        

        
          A-B-1