Unassociated Document


     

    
      Exhibit
        10.17

       

    INTER-CREDITOR
      AGREEMENT

    


    This
      INTER-CREDITOR
      AGREEMENT
      (the
“Agreement”)
      is
      made and effective as of November __, 2008, by and between the holders of
      Capital Growth Systems, Inc.’s Original Issue Discount Secured Convertible
      Debentures Due March 2015signatory hereto (“Existing
      Creditors”)
      and
      the New Creditors (as defined below) (the Existing Creditors and the New
      Creditors are collectively referred to as the “Creditors”).

    


    RECITALS

    


    WHEREAS,
      the Existing Creditors are the parties to that certain Securities Purchase
      Agreement dated March 11, 2008 (the “Purchase
      Agreement”)
      by and
      between each Existing Creditor and Capital Growth Systems, Inc. (the
“Company”)
      and
      are the holders of Original Issue Discount Secured Convertible Debentures Due,
      subject to the terms therein, March 2015, with an aggregate total face amount
      of
      $30,877,552 executed by the Company in favor of the Existing Creditors (the
      “Existing
      Indebtedness”),
      and
      the Existing Creditors are the beneficiaries of that certain Security Agreement
      dated March 11, 2008 (the “Security
      Agreement”)
      between the Company and the Existing Creditors and Enable Growth Partners,
      LP
      (“Collateral
      Agent”),
      as
      collateral agent for the benefit of the Existing Creditors (“Collateral
      Agent”);

    


    WHEREAS,
      pursuant to that certain Securities Purchase Agreement dated November ___,
      2008,
      the investors signatory thereto (the “New
      Creditors”)
      will
      be purchasing $14,891,250, in the aggregate principal amount of Original Issue
      Discount Secured Convertible Debentures due, subject to the terms therein,
      seven
      years from their issuance, from the Company (the “New
      Indebtedness”
and
      together with the Existing Indebtedness, the “Indebtedness”);

    


    WHEREAS,
      the New Indebtedness will also be secured by all assets of the
      Company;

    


    WHEREAS,
      the New Indebtedness and the Existing Indebtedness will also be secured by
      all
      assets of the Company on a pari passu
      basis;

    


    WHEREAS,
      the Creditors wish to memorialize their agreements concerning their respective
      rights, duties and obligations to one another with respect to the security
      interests granted under the Indebtedness.

    


    NOW,
      THEREFORE, in consideration of the mutual covenants herein, their respective
      performances and benefits pertaining to the Indebtedness, and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties agree as follows:

    


    
      	
              1.
                

            	
              Ranking.

            


    

    


    
      	 	
              1.1

            	
              The
                Indebtedness shall rank in the following order of priority: any sums
                secured or owed to the Existing Creditors or the New Creditors,
                pari
                passu
                and pro-rata
                in
                proportion to such Creditor’s outstanding principal amounts of
                Indebtedness at any given time that a determination needs to be made
                of
                pro-rata holdings. For clarity, as of the date of the closing of
                the
                issuance of the New Indebtedness, the pro-rata
                holdings of the Existing Creditors (collectively) are $30,877,552
                and the
                pro-rata
                holdings of the New Creditors (collectively) are $14,891,250. The
                Creditors authorize the Collateral Agent to perform its obligations
                under
                the Security Agreements pursuant to this provision. The Company and
                each
                Subsidiary agree that all payments of Obligations under the New
                Indebtedness and the Existing Indebtedness shall be made in accordance
                with the relative priorities and proportions set forth herein. In
                addition, the Company hereby agrees to cause all direct and indirect
                subsidiaries hereafter formed or acquired to agree to be bound by
                the
                terms of this Agreement.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	 	
              1.2

            	
              If
                an Event of Default (as defined under any Indebtedness) occurs and
                any
                party hereto receives payment from the Company not in compliance
                with this
                Agreement, the other parties hereto shall be immediately notified
                and such
                payment shall be shared with all of the other Creditors in proportion
                to
                their respective pro-rata holdings as set forth
                above.

            


    

    


    
      	 	
              1.3

            	
              If
                an Event of Default occurs and any party hereto collects proceeds
                pursuant
                to its rights under any Indebtedness, the other parties shall be
                immediately notified and such payment shall be shared with all of
                the
                other Creditors as set forth above.

            


    

    


    
      	 	
              1.4

            	
              Notwithstanding
                any other provision in this Agreement, adjustments shall be made
                between
                the Creditors from time to time to reflect the fact that any contingent
                obligation taken into account as an obligation under the Indebtedness
                becomes satisfied or incapable of maturing into an actual
                obligation.

            


    

    


    
      	 	
              1.5

            	
              Notwithstanding
                anything to the contrary contained in the Purchase Agreement or any
                document executed in connection with the New Indebtedness or the
                Existing
                Indebtedness and irrespective of: (i) the time, order or method of
                attachment or perfection of the security interests created in favor
                of
                Existing Creditors and the New Creditors, (ii) the time or order
                of filing
                or recording of financing statements or other documents filed or
                recorded
                to perfect security interests in any collateral; (iii) anything contained
                in any filing or agreement to which any Creditor now or hereafter
                may be a
                party; and (iv) the rules for determining perfection or priority
                under the
                Uniform Commercial Code or any other law governing the relative priorities
                of secured creditors, each Creditor acknowledges that (x) all other
                Creditors have a valid security interest in the Collateral and (y)
                the
                security interests of the Creditors in any Collateral pursuant to
                any
                outstanding Indebtedness shall be pari-passu with each
                other.

            


    

    


    
      	 	
              1.6

            	
              Each
                Creditor agrees not to commence any action or proceeding concerning
                the
                Indebtedness or the Collateral without providing at least one business
                day’s notice to all Creditors.

            


    

    


    
      	
              2.

            	
              Indemnification
                by Existing Creditors.
                Existing Creditors shall indemnify, defend, and hold harmless New
                Creditors against and in respect of any and all claims, demands,
                losses,
                costs, expenses, obligations, liabilities, damages, recoveries, and
                deficiencies, including interest, penalties, and reasonable professional
                and attorneys’ fees, including those arising from settlement negotiations,
                that New Creditors shall incur or suffer, which arise, result from,
                or
                relate to a breach of, or failure by Existing Creditors to perform
                under
                this Agreement.

            


    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    
      	
              3.

            	
              Indemnification
                by New Creditors.
                New Creditors shall indemnify, defend, and hold harmless Existing
                Creditors against and in respect of any and all claims, demands,
                losses,
                costs, expenses, obligations, liabilities, damages, recoveries, and
                deficiencies, including interest, penalties, and reasonable professional
                and attorneys’ fees, including those arising from settlement negotiations,
                that Existing Creditors shall incur or suffer, which arise, result
                from,
                or relate to a breach of, or failure by New Creditors to perform
                under
                this Agreement.

            


    

     

    
      	
              4.

            	
               Miscellaneous.

            


    

    


    4.1 Assignment.
      The
      rights and obligations of the Creditors under this Agreement may be assigned
      to
      or assumed to a transferee of the Debentures (as defined in the Existing
      Creditors Securities Purchase Agreement and as defined in the New Creditors
      Securities Purchase Agreement), as applicable.

    


    4.2 Binding
      Effect.
      This
      Agreement shall be binding on, and shall inure to the benefit of, the parties
      to
      it and their respective heirs, legal representatives, and
      successors.

    


    4.3 Parties
      in Interest.
      Except
      as expressly provided in this Agreement, nothing in this Agreement, whether
      express or implied, is intended to confer any rights or remedies under or by
      reason of this Agreement on any persons other than the parties to it and their
      respective successors and assigns, nor is anything in this Agreement intended
      to
      relieve or discharge the obligation or liability of any third persons to any
      party to this Agreement, nor shall any provision give any third persons any
      right to subrogation or action over against any party to this
      Agreement.

    


    4.4 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the parties pertaining to
      the
      subject matter contained in it and supersedes all prior and contemporaneous
      agreements, representations and understandings of the parties. 

    


    4.5 Amendment.
      No
      supplement, modification, or amendment of this Agreement shall be binding unless
      executed in writing by all the parties.

    


    4.6 Waiver.
      No
      waiver of any of the provisions of this Agreement shall be deemed, or shall
      constitute, a waiver of any other provision, whether or not similar, nor shall
      any waiver constitute a continuing waiver. No waiver shall be binding unless
      executed in writing by the party making the waiver.

    


    4.7 Notices.
      Notices
      given under this Agreement shall be delivered as set forth in the Purchase
      Agreement.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    4.8 Governing
      Law and Venue.
      This
      Agreement shall be construed in accordance with, and governed by, the laws
      of
      the State of New York, and any action or proceeding, including arbitration,
      brought by any party in which this Agreement is a subject, shall be brought
      in
      New York County, New York.

    


    4.9 Effect
      of Headings.
      The
      headings of the Sections of this Agreement are included for purposes of
      convenience only, and shall not affect the construction or interpretation of
      any
      of its provisions.

    


    4.10 Invalidity.
      Any
      provision of this Agreement which is invalid, void, or illegal, shall not
      affect, impair, or invalidate any other provision of this Agreement, and such
      other provisions of this Agreement shall remain in full force and
      effect.

    


    4.11 Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which may be
      executed by less than all of the parties and shall be deemed to be an original
      instrument which shall be enforceable against the parties actually executing
      such counterparts and all of which together shall constitute one and the same
      instrument. In lieu of the original documents, a facsimile transmission or
      copy
      of the original documents shall be as effective and enforceable as the original.
      

    


    4.12 Number
      and Gender.
      When
      required by the context of this Agreement, each number (singular and plural)
      shall include all numbers, and each gender shall include all
      genders.

    


    4.13 Further
      Assurances.
      Each
      party to this Agreement agrees to execute further instruments as may be
      necessary or desirable to carry out this Agreement, provided the party
      requesting such further action shall bear all related costs and
      expenses.

    


    4.14 Professional
      Fees and Costs.
      If any
      legal or equitable action, arbitration, or other proceeding, whether on the
      merits or on motion, are brought or undertaken, or an attorney retained, to
      enforce this Agreement, or because of an alleged dispute, breach, default,
      or
      misrepresentation in connection with any of the provisions of this Agreement,
      then the successful or prevailing party or parties in such undertaking (or
      the
      party that would prevail if an action were brought) shall be entitled to recover
      reasonable attorney's fees and other professional fees and other costs incurred
      in such action, proceeding, or discussions, in addition to any other relief
      to
      which such party may be entitled. The parties intend this provision to be given
      the most liberal construction possible and to apply to any circumstances in
      which such party reasonably incurs expenses.

    


    


    


    *************************


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    [SIGNATURE
      PAGE CGSY INTERCREDITOR AGREEMENT]

    


    IN
      WITNESS WHEREOF, this Agreement has been duly executed by the Creditors as
      of
      the day and year first written above.

    


    


    CREDITORS:

    


    Print
      Name: __________________________

    


    By:
      ________________________________

    Name:

    Title:

    


    Address
      for Notice:

    
       

      ________________________

    

    
       

      ________________________



    


    ACKNOWLEDGED
      AND AGREED TO:

    


    


    CAPITAL
      GROWTH SYSTEMS, INC.

    


    


    
      
        By:
          ________________________________
Name:

    

    Title:

    


    [INSERT
      NAMES AND SIGNATURE BLOCKS FOR SUBSIDIARIES]


    
      
        
        

      

      
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