Unassociated Document


     

    
      Exhibit
        10.4

       

      SUBSIDIARY
        GUARANTEE

       

      SUBSIDIARY
        GUARANTEE, dated as of November __, 2008 (this “Guarantee”), made by each of the
        signatories hereto (together with any other entity that may become a party
        hereto as provided herein, the “Guarantors”), in favor of Vanco plc (in
        administration) (together with its permitted assigns, “Vanco”).

       

      WITNESSETH:

       

      WHEREAS,
        pursuant to that certain Interest and Loan Purchase Agreement, dated as of
        the
        date hereof, by and between Capital Growth Systems, Inc., a Florida corporation
        (the “Company”), Capital Growth Acquisition Inc., a wholly owned subsidiary of
        the Company (“CGAI”), Vanco and Vanco Direct USA, LLC, a wholly owned subsidiary
        of Vanco (“VDUL”) (the “Purchase Agreement”), in partial consideration for all
        of the outstanding membership interests of VDUL, the Company has agreed to
        sell
        and issue to Vanco the Company’s Variable
        Rate Convertible
        Debenture, due seven years following its issuance (the “Debenture”), subject to
        the terms and conditions set forth therein; and

       

      WHEREAS,
        each Guarantor will directly benefit from the extension of credit to the
        Company
        represented by the issuance of the Debenture; and 

       

      NOW,
        THEREFORE, in consideration of the premises and to induce Vanco to enter
        into
        the Purchase Agreement and purchase the Debenture and to carry out the
        transactions contemplated thereby, each Guarantor hereby agrees with Vanco
        as
        follows:

       

      1. Definitions.
        Unless otherwise defined herein, terms defined in the Debenture and used
        herein
        shall have the meanings given to them in the Debenture. The words “hereof,”
“herein,” “hereto” and “hereunder” and words of similar import when used in this
        Guarantee shall refer to this Guarantee as a whole and not to any particular
        provision of this Guarantee, and Section and Schedule references are to this
        Guarantee unless otherwise specified. The meanings given to terms defined
        herein
        shall be equally applicable to both the singular and plural forms of such
        terms.
        The following terms shall have the following meanings:

       

      “Affiliate”
        means any Person that, directly or indirectly through one or more
        intermediaries, controls or is controlled by or is under common control with
        a
        Person, as such terms are used in and construed under Rule 405 under the
        Securities Act.

       

      “Guarantee”
        means this Subsidiary Guarantee, as the same may be amended, supplemented
        or
        otherwise modified from time to time.

       

      “Lien”
        means a lien, charge, security interest, encumbrance, right of first refusal,
        preemptive right or other restriction.

       

      “Obligations”
        means, in addition to all other costs and expenses of collection incurred
        by
        Vanco in enforcing any of such Obligations and/or this Guarantee, all of
        the
        liabilities and obligations (primary, secondary, direct, contingent, sole,
        joint
        or several) due or to become due, or that are now or may be hereafter contracted
        or acquired, or owing to, of the Company or any Guarantor to Vanco, including,
        without limitation, all obligations under this Guarantee, the Debenture and
        any
        other instruments, agreements or other documents executed and/or delivered
        in
        connection herewith or therewith, in each case, whether now or hereafter
        existing, voluntary or involuntary, direct or indirect, absolute or contingent,
        liquidated or unliquidated, whether or not jointly owed with others, and
        whether
        or not from time to time decreased or extinguished and later increased, created
        or incurred, and all or any portion of such obligations or liabilities that
        are
        paid, to the extent all or any part of such payment is avoided or recovered
        directly or indirectly from Vanco as a preference, fraudulent transfer or
        otherwise as such obligations may be amended, supplemented, converted, extended
        or modified from time to time. Without limiting the generality of the foregoing,
        the term “Obligations” shall include, without limitation: (i) principal of, and
        interest on the Debenture and the loans extended pursuant thereto; (ii) any
        and
        all other fees, indemnities, costs, obligations and liabilities of the Company
        or any Guarantor from time to time under or in connection with this Guarantee,
        the Debenture and any other instruments, agreements or other documents executed
        and/or delivered in connection herewith or therewith; and (iii) all amounts
        (including but not limited to post-petition interest) in respect of the
        foregoing that would be payable but for the fact that the obligations to
        pay
        such amounts are unenforceable or not allowable due to the existence of a
        bankruptcy, reorganization or similar proceeding involving the Company or
        any
        Guarantor. 

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      “Person”
        means an individual or corporation, partnership, trust, incorporated or
        unincorporated association, joint venture, limited liability company, joint
        stock company, government (or an agency or subdivision thereof) or other
        entity
        of any kind.

       

      “Subsidiary”
        means any direct or indirect subsidiary of the Company.

       

      2. Guarantee.

       

      (a) Guarantee.

       

      (i) The
        Guarantors hereby, jointly and severally, unconditionally and irrevocably,
        guarantee to Vanco and its successors, indorsees, transferees and assigns,
        the
        prompt and complete payment and performance when due (whether at the stated
        maturity, by acceleration or otherwise) of the Obligations. 

       

      (ii) The
        maximum liability of each Guarantor hereunder shall in no event exceed the
        amount which can be guaranteed by such Guarantor under applicable federal
        and
        state laws, including laws relating to the insolvency of debtors, fraudulent
        conveyance or transfer or laws affecting the rights of creditors generally
        (after giving effect to the right of contribution established in Section
        2(b)).
        

       

      (iii) Each
        Guarantor agrees that the Obligations may at any time and from time to time
        exceed the amount of the liability of such Guarantor hereunder without impairing
        the guarantee contained in this Section
        2
        or affecting the rights and remedies of Vanco hereunder.

       

      (iv) The
        guarantee contained in this Section
        2
        shall remain in full force and effect until all the Obligations and the
        obligations of each Guarantor under the guarantee contained in this Section
        2
        shall have been satisfied by indefeasible payment in full. 

       

      (v) No
        payment made by the Company, any of the Guarantors, any other guarantor or
        any
        other Person or received or collected by Vanco from the Company, any of the
        Guarantors, any other guarantor or any other Person by virtue of any action
        or
        proceeding or any set-off or appropriation or application at any time or
        from
        time to time in reduction of or in payment of the Obligations shall be deemed
        to
        modify, reduce, release or otherwise affect the liability of any Guarantor
        hereunder which shall, notwithstanding any such payment (other than any payment
        made by such Guarantor in respect of the Obligations or any payment received
        or
        collected from such Guarantor in respect of the Obligations), remain liable
        for
        the Obligations up to the maximum liability of such Guarantor hereunder until
        the Obligations are indefeasibly paid in full.

       

      (vi) Notwithstanding
        anything to the contrary in this Guarantee, with respect to any defaulted
        non-monetary Obligations the specific performance of which by the Guarantors
        is
        not reasonably possible (e.g. the issuance of the Company's Common Stock),
        the
        Guarantors shall only be liable for making Vanco whole on a monetary basis
        for
        the Company's failure to perform such Obligations in accordance with the
        Debenture. 

       

       


      
        
          
          

        

        
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      (b) Right
        of Contribution.
        Subject to Section
        2(c),
        each Guarantor hereby agrees that to the extent that a Guarantor shall have
        paid
        more than its proportionate share of any payment made hereunder, such Guarantor
        shall be entitled to seek and receive contribution from and against any other
        Guarantor hereunder which has not paid its proportionate share of such payment.
        Each Guarantor's right of contribution shall be subject to the terms and
        conditions of Section
        2(c).
        The provisions of this Section
        2(b)
        shall in no respect limit the obligations and liabilities of any Guarantor
        to
        Vanco and each Guarantor shall remain liable to Vanco for the full amount
        guaranteed by such Guarantor hereunder.

       

      (c) No
        Subrogation.
        Notwithstanding any payment made by any Guarantor hereunder or any set-off
        or
        application of funds of any Guarantor by Vanco, no Guarantor shall be entitled
        to be subrogated to any of the rights of Vanco against the Company or any
        other
        Guarantor or any collateral security or guarantee or right of offset held
        by
        Vanco for the payment of the Obligations, nor shall any Guarantor seek or
        be
        entitled to seek any contribution or reimbursement from the Company or any
        other
        Guarantor in respect of payments made by such Guarantor hereunder, until
        all
        amounts owing to Vanco by the Company on account of the Obligations are
        indefeasibly paid in full. If any amount shall be paid to any Guarantor on
        account of such subrogation rights at any time when all of the Obligations
        shall
        not have been paid in full, such amount shall be held by such Guarantor in
        trust
        for Vanco, segregated from other funds of such Guarantor, and shall, forthwith
        upon receipt by such Guarantor, be turned over to Vanco in the exact form
        received by such Guarantor (duly indorsed by such Guarantor to Vanco, if
        required), to be applied against the Obligations, whether matured or unmatured,
        in such order as Vanco may determine.

       

      (d) Amendments,
        Etc. With Respect to the Obligations.
        Each Guarantor shall remain obligated hereunder notwithstanding that, without
        any reservation of rights against any Guarantor and without notice to or
        further
        assent by any Guarantor, any demand for payment of any of the Obligations
        made
        by Vanco may be rescinded by Vanco and any of the Obligations continued,
        and the
        Obligations, or the liability of any other Person upon or for any part thereof,
        or any collateral security or guarantee therefor or right of offset with
        respect
        thereto, may, from time to time, in whole or in part, be renewed, extended,
        amended, modified, accelerated, compromised, waived, surrendered or released
        by
        Vanco, and the Purchase Agreement and the Debenture and any other documents
        executed and delivered in connection therewith may be amended, modified,
        supplemented or terminated, in whole or in part, as Vanco may deem advisable
        from time to time, and any collateral security, guarantee or right of offset
        at
        any time held by Vanco for the payment of the Obligations may be sold,
        exchanged, waived, surrendered or released. Vanco shall have no obligation
        to
        protect, secure, perfect or insure any Lien at any time held by them as security
        for the Obligations or for the guarantee contained in this Section
        2
        or any property subject thereto. 

       

      (e) Guarantee
        Absolute and Unconditional.
        Each Guarantor waives any and all notice of the creation, renewal, extension
        or
        accrual of any of the Obligations and notice of or proof of reliance by Vanco
        upon the guarantee contained in this Section
        2
        or acceptance of the guarantee contained in this Section
        2;
        the Obligations, and any of them, shall conclusively be deemed to have been
        created, contracted or incurred, or renewed, extended, amended or waived,
        in
        reliance upon the guarantee contained in this Section
        2;
        and all dealings between the Company and any of the Guarantors, on the one
        hand,
        and Vanco, on the other hand, likewise shall be conclusively presumed to
        have
        been had or consummated in reliance upon the guarantee contained in this
        Section
        2.
        Each Guarantor waives to the extent permitted by law diligence, presentment,
        protest, demand for payment and notice of default or nonpayment to or upon
        the
        Company or any of the Guarantors with respect to the Obligations. Each Guarantor
        understands and agrees that the guarantee contained in this Section
        2
        shall be construed as a continuing, absolute and unconditional guarantee
        of
        payment and performance without regard to (a) the validity or enforceability
        of
        the Purchase Agreement or the Debenture, any of the Obligations or any other
        collateral security therefor or guarantee or right of offset with respect
        thereto at any time or from time to time held by Vanco, (b) any defense,
        set-off
        or counterclaim (other than a defense of payment or performance or fraud
        by
        Vanco) which may at any time be available to or be asserted by the Company
        or
        any other Person against Vanco, or (c) any other circumstance whatsoever
        (with
        or without notice to or knowledge of the Company or such Guarantor) which
        constitutes, or might be construed to constitute, an equitable or legal
        discharge of the Company for the Obligations, or of such Guarantor under
        the
        guarantee contained in this Section
        2,
        in bankruptcy or in any other instance. When making any demand hereunder
        or
        otherwise pursuing its rights and remedies hereunder against any Guarantor,
        Vanco may, but shall be under no obligation to, make a similar demand on
        or
        otherwise pursue such rights and remedies as they may have against the Company,
        any other Guarantor or any other Person or against any collateral security
        or
        guarantee for the Obligations or any right of offset with respect thereto,
        and
        any failure by Vanco to make any such demand, to pursue such other rights
        or
        remedies or to collect any payments from the Company, any other Guarantor
        or any
        other Person or to realize upon any such collateral security or guarantee
        or to
        exercise any such right of offset, or any release of the Company, any other
        Guarantor or any other Person or any such collateral security, guarantee
        or
        right of offset, shall not relieve any Guarantor of any obligation or liability
        hereunder, and shall not impair or affect the rights and remedies, whether
        express, implied or available as a matter of law, of Vanco against any
        Guarantor. For the purposes hereof, “demand” shall include the commencement and
        continuance of any legal proceedings.

       

       


      
        
          
          

        

        
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      (f) Reinstatement.
        The guarantee contained in this Section
        2
        shall continue to be effective, or be reinstated, as the case may be, if
        at any
        time payment, or any part thereof, of any of the Obligations is rescinded
        or
        must otherwise be restored or returned by Vanco upon the insolvency, bankruptcy,
        dissolution, liquidation or reorganization of the Company or any Guarantor,
        or
        upon or as a result of the appointment of a receiver, intervenor or conservator
        of, or trustee or similar officer for, the Company or any Guarantor or any
        substantial part of its property, or otherwise, all as though such payments
        had
        not been made.

       

      (g) Payments.
        Each Guarantor hereby guarantees that payments hereunder will be paid to
        Vanco
        without set-off or counterclaim in U.S. dollars at the address set forth
        or
        referred to in the Purchase Agreement.

       

      3. Representations
        and Warranties.
        Each Guarantor hereby makes the following representations and warranties
        to
        Vanco as of the date hereof:

       

      (a) Organization
        and Qualification. The Guarantor is a corporation or limited liability
        company, duly incorporated or organized, validly existing and in good standing
        under the laws of the applicable jurisdiction set forth on Schedule 1,
        with the requisite corporate power and authority to own and use its properties
        and assets and to carry on its business as currently conducted. The Guarantor
        is
        duly qualified to do business and is in good standing as a foreign corporation
        in each jurisdiction in which the nature of the business conducted or property
        owned by it makes such qualification necessary, except where the failure
        to be
        so qualified or in good standing, as the case may be, could not, individually
        or
        in the aggregate, (x) adversely affect the legality, validity or enforceability
        of any of this Guaranty in any material respect, (y) have a material adverse
        effect on the results of operations, assets, prospects, or financial condition
        of the Guarantor or (z) adversely impair in any material respect the Guarantor's
        ability to perform fully on a timely basis its obligations under this Guaranty
        (a “Material Adverse Effect”).

       

      (b) Authorization;
        Enforcement.
        The Guarantor has the requisite corporate or limited liability company power
        and
        authority to enter into and to consummate the transactions contemplated by
        this
        Guaranty, and otherwise to carry out its obligations hereunder. The execution
        and delivery of this Guaranty by the Guarantor and the consummation by it
        of the
        transactions contemplated hereby have been duly authorized by all requisite
        corporate or limited liability company action on the part of the Guarantor.
        This
        Guaranty has been duly executed and delivered by the Guarantor and constitutes
        the valid and binding obligation of the Guarantor enforceable against the
        Guarantor in accordance with its terms, except as such enforceability may
        be
        limited by applicable bankruptcy, insolvency, reorganization, moratorium,
        liquidation or similar laws relating to, or affecting generally the enforcement
        of, creditors' rights and remedies or by other equitable principles of general
        application.

       

       


      
        
          
          

        

        
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      (c) No
        Conflicts.
        The execution, delivery and performance of this Guaranty by the Guarantor
        and
        the consummation by the Guarantor of the transactions contemplated thereby
        do
        not and will not (i) conflict with or violate any provision of its Certificate
        of Incorporation, By-laws or other organizational documents or (ii) conflict
        with, constitute a default (or an event which with notice or lapse of time
        or
        both would become a default) under, or give to others any rights of termination,
        amendment, acceleration or cancellation of, any agreement, indenture or
        instrument to which the Guarantor is a party, or (iii) result in a violation
        of
        any law, rule, regulation, order, judgment, injunction, decree or other
        restriction of any court or governmental authority to which the Guarantor
        is
        subject (including Federal and State securities laws and regulations), or
        by
        which any material property or asset of the Guarantor is bound or affected,
        except in the case of each of clauses (ii) and (iii), such conflicts, defaults,
        terminations, amendments, accelerations, cancellations and violations as
        could
        not, individually or in the aggregate, have or result in a Material Adverse
        Effect. The business of the Guarantor is not being conducted in violation
        of any
        law, ordinance or regulation of any governmental authority, except for
        violations which, individually or in the aggregate, do not have a Material
        Adverse Effect.

       

      (d) Consents
        and Approvals.
        The Guarantor is not required to obtain any consent, waiver, authorization
        or
        order of, or make any filing or registration with, any court or other federal,
        state, local, foreign or other governmental authority or other person in
        connection with the execution, delivery and performance by the Guarantor
        of this
        Guaranty.

       

      (e) Purchase
        Agreement.
        The representations and warranties of the Company set forth in the Purchase
        Agreement as they relate to such Guarantor, each of which is hereby incorporated
        herein by reference, are true and correct as of each time such representations
        are deemed to be made pursuant to such Purchase Agreement, and Vanco shall
        be
        entitled to rely on each of them as if they were fully set forth herein,
        provided that each reference in each such representation and warranty to
        the
        Company's knowledge shall, for the purposes of this Section
        3,
        be deemed to be a reference to such Guarantor's knowledge. 

       

      (f) Foreign
        Law.
        Each Guarantor has consulted with appropriate foreign legal counsel with
        respect
        to any of the above representations for which non-U.S. law is applicable.
        Such
        foreign counsel have advised each applicable Guarantor that such counsel
        knows
        of no reason why any of the above representations would not be true and
        accurate. Such foreign counsel were provided with copies of this Subsidiary
        Guarantee and the Debenture prior to rendering their advice. 

       

       


      
        
          
          

        

        
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      4. Covenants.
        Each
        Guarantor covenants and agrees with Vanco that, from and after the date of
        this
        Guarantee until the Obligations shall have been indefeasibly paid in full,
        such
        Guarantor shall take, and/or shall refrain from taking, as the case may be,
        each
        commercially reasonable action that is necessary to be taken or not taken,
        as
        the case may be, so that no Event of Default (as defined in the Debenture)
        is
        caused by the failure to take such action or to refrain from taking such
        action
        by such Guarantor. 

       

      5. Miscellaneous.

       

      (a) Amendments
        in Writing.
        None of the terms or provisions of this Guarantee may be waived, amended,
        supplemented or otherwise modified except in writing by Vanco.

       

      (b) Notices.
        All notices, requests and demands to or upon Vanco or any Guarantor hereunder
        shall be effected in the manner provided for in the Purchase Agreement, provided
        that any such notice, request or demand to or upon any Guarantor shall be
        addressed to such Guarantor at its notice address set forth on Schedule
        5(b).

       

      (c) No
        Waiver By Course Of Conduct; Cumulative Remedies.
        Vanco shall not by any act (except by a written instrument pursuant to
Section
        5(a)),
        delay, indulgence, omission or otherwise be deemed to have waived any right
        or
        remedy hereunder or to have acquiesced in any default under the Debenture
        or
        Event of Default. No failure to exercise, nor any delay in exercising, on
        the
        part of Vanco, any right, power or privilege hereunder shall operate as a
        waiver
        thereof. No single or partial exercise of any right, power or privilege
        hereunder shall preclude any other or further exercise thereof or the exercise
        of any other right, power or privilege. A waiver by Vanco of any right or
        remedy
        hereunder on any one occasion shall not be construed as a bar to any right
        or
        remedy which Vanco would otherwise have on any future occasion. The rights
        and
        remedies herein provided are cumulative, may be exercised singly or concurrently
        and are not exclusive of any other rights or remedies provided by
        law.

       

      (d) Enforcement
        Expenses; Indemnification.

       

      (i) Each
        Guarantor agrees to pay, or reimburse Vanco for, all its costs and expenses
        incurred in collecting against such Guarantor under the guarantee contained
        in
Section
        2
        or otherwise enforcing or preserving any rights under this Guarantee, including,
        without limitation, the reasonable fees and disbursements of counsel to
        Vanco.

       

      (ii) Each
        Guarantor agrees to pay, and to save Vanco harmless from, any and all
        liabilities with respect to, or resulting from any delay in paying, any and
        all
        stamp, excise, sales or other taxes which may be payable or determined to
        be
        payable in connection with any of the transactions contemplated by this
        Guarantee.

       

      (iii) Each
        Guarantor agrees to pay, and to save Vanco harmless from, any and all
        liabilities, obligations, losses, damages, penalties, actions, judgments,
        suits,
        costs, expenses or disbursements of any kind or nature whatsoever with respect
        to the execution, delivery, enforcement, performance and administration of
        this
        Guarantee to the extent the Company would be required to do so pursuant to
        the
        Debenture.

       

      (iv) The
        agreements in this Section shall survive repayment of the Obligations and
        all
        other amounts payable under the Debenture. 

       

      (e) Successor
        and Assigns.
        This Guarantee shall be binding upon the successors and assigns of each
        Guarantor and shall inure to the benefit of Vanco and their respective
        successors and assigns; provided that no Guarantor may assign, transfer or
        delegate any of its rights or obligations under this Guarantee without the
        prior
        written consent of Vanco.

       

       


      
        
          
          

        

        
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      (f) Set-Off.
        Each Guarantor hereby irrevocably authorizes Vanco at any time and from time
        to
        time while an Event of Default under the Debenture shall have occurred and
        be
        continuing, without notice to such Guarantor or any other Guarantor, any
        such
        notice being expressly waived by each Guarantor, to set-off and appropriate
        and
        apply any and all deposits, credits, indebtedness or claims, in any currency,
        in
        each case whether direct or indirect, absolute or contingent, matured or
        unmatured, at any time held or owing by Vanco to or for the credit or the
        account of such Guarantor, or any part thereof in such amounts as Vanco may
        elect, against and on account of the obligations and liabilities of such
        Guarantor to Vanco hereunder and claims of every nature and description of
        Vanco
        against such Guarantor, in any currency, whether arising hereunder, under
        the
        Purchase Agreement, the Debenture or otherwise, as Vanco may elect, whether
        or
        not Vanco have made any demand for payment and although such obligations,
        liabilities and claims may be contingent or unmatured. Vanco shall notify
        such
        Guarantor promptly of any such set-off and the application made by Vanco
        of the
        proceeds thereof, provided that the failure to give such notice shall not
        affect
        the validity of such set-off and application. The rights of Vanco under this
        Section are in addition to other rights and remedies (including, without
        limitation, other rights of set-off) which Vanco may have.

       

      (g) Counterparts.
        This Guarantee may be executed by one or more of the parties to this Guarantee
        on any number of separate counterparts (including by telecopy), and all of
        said
        counterparts taken together shall be deemed to constitute one and the same
        instrument. 

       

      (h) Severability.
        Any provision of this Guarantee which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and any such prohibition or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction. 

       

      (i) Section
        Headings.
        The Section headings used in this Guarantee are for convenience of reference
        only and are not to affect the construction hereof or be taken into
        consideration in the interpretation hereof.

       

      (j) Integration.
        This Guarantee represents the agreement of the Guarantors and Vanco with
        respect
        to the subject matter hereof, and there are no promises, undertakings,
        representations or warranties by Vanco relative to subject matter hereof
        and
        thereof not expressly set forth or referred to herein.

       

      (k) Governing
        Laws.
        All questions concerning the construction, validity, enforcement and
        interpretation of this Guarantee shall be governed by and construed and enforced
        in accordance with the internal laws of the State of New York, without regard
        to
        the principles of conflicts of law thereof. Each of the Company and the
        Guarantors agree that all proceedings concerning the interpretations,
        enforcement and defense of the transactions contemplated by this Guarantee
        (whether brought against a party hereto or its respective affiliates, directors,
        officers, shareholders, partners, members, employees or agents) shall be
        commenced exclusively in the state and federal courts sitting in the City
        of New
        York, Borough of Manhattan. Each of the Company and the Guarantors hereby
        irrevocably submits to the exclusive jurisdiction of the state and federal
        courts sitting in the City of New York, Borough of Manhattan for the
        adjudication of any dispute hereunder or in connection herewith or with any
        transaction contemplated hereby or discussed herein, and hereby irrevocably
        waives, and agrees not to assert in any proceeding, any claim that it is
        not
        personally subject to the jurisdiction of any such court, that such proceeding
        is improper. Each party hereto hereby irrevocably waives personal service
        of
        process and consents to process being served in any such proceeding by mailing
        a
        copy thereof via registered or certified mail or overnight delivery (with
        evidence of delivery) to such party at the address in effect for notices
        to it
        under this Guarantee and agrees that such service shall constitute good and
        sufficient service of process and notice thereof. Nothing contained herein
        shall
        be deemed to limit in any way any right to serve process in any manner permitted
        by law. Each party hereto hereby irrevocably waives, to the fullest extent
        permitted by applicable law, any and all right to trial by jury in any legal
        proceeding arising out of or relating to this Guarantee or the transactions
        contemplated hereby.

       

       


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      (l) Acknowledgements.
        Each Guarantor hereby acknowledges that:

       

      (i) it
        has been advised by counsel in the negotiation, execution and delivery of
        this
        Guarantee and the other Transaction Documents to which it is a party;


       

      (ii) Vanco
        has no fiduciary relationship with or duty to any Guarantor arising out of
        or in
        connection with this Guarantee, and the relationship between the Guarantors,
        on
        the one hand, and Vanco, on the other hand, in connection herewith or therewith
        is solely that of debtor and creditor; and 

       

      (iii) no
        joint venture is created hereby or otherwise exists by virtue of the
        transactions contemplated hereby among the Guarantors and Vanco. 

       

      (m) Additional
        Guarantors.
        The Company shall cause each of its subsidiaries formed or acquired on or
        subsequent to the date hereof to become a Guarantor for all purposes of this
        Guarantee by executing and delivering an Assumption Agreement in the form
        of
Annex
        1
        hereto.

       

      (n) Release
        of Guarantors.
        Each Guarantor will be released from all liability hereunder concurrently
        with
        the indefeasible repayment in full of all amounts owed under the Debenture.
        

       

      (o) [Reserved].
        

       

      (p) Waiver
        of Jury Trial.
        EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, VANCO, HEREBY
        IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
        PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
        THEREIN.

       

       


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
        duly
        executed and delivered as of the date first above written.

       

      

        
          	
                  20/20
                    Technologies, Inc.

                	 	
                  Magenta
                    netLogic, Limited

                
	 	 	 
	 	 	 
	
                  By:

                	 	 	
                  By:

                	 
	
                  Name:

                	 	 	
                  Name:

                	 
	
                  Title:

                	 	 	
                  Title:

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  Global
                    Capacity Group, Inc.

                	 	
                  CentrePath,
                    Inc.

                
	 	 	 	 	 
	 	 	 	 	 
	
                  By:

                	 	 	
                  By:

                	 
	
                  Name:

                	 	 	
                  Name:

                	 
	
                  Title:

                	 	 	
                  Title:

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  Nexvu
                    Technologies, LLC

                	 	
                  FNS
                    2007, INC.

                
	 	 	 	 	 
	 	 	 	 	 
	
                  By:

                	 	 	
                  By:

                	 
	
                  Name:

                	 	 	
                  Name:

                	 
	
                  Title:

                	 	 	
                  Title:

                	 
	 	 	 	 	 
	 	 	 	 	 
	
                  20/20
                    TECHNOLOGIES I, LLC

                	 	 
	 	 	 
	 	 	 
	
                  By: __________________________________

                  Name: 

                  Title: _______________________

                	 	 


        

      

      


      [ADD
        NEW SUB]

       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      


      ANNEX
        1 TO SUBSIDIARY GUARANTEE

       

      ASSUMPTION
        AGREEMENT, dated as of ______________________, made by
        ______________________________, a ______________ corporation (the “Additional
        Guarantor”), in favor of Vanco pursuant to the Purchase Agreement referred to
        below. All capitalized terms not defined herein shall have the meaning ascribed
        to them in such Purchase Agreement. 

       

      WITNESSETH:

       

      WHEREAS,
        Capital Growth Systems, Inc., a Florida corporation (the “Company”) and Vanco
        have entered into a Interest and Loan Purchase Agreement, dated as of November
        __, 2008 (as amended, supplemented or otherwise modified from time to time,
        the
“Purchase Agreement”), and in connection therewith, the Company issued to Vanco
        a variable rate convertible debenture having a principal amount of $3 million
        (the “Debenture”); 

       

      WHEREAS,
        in connection with the Debenture, the Subsidiaries of the Company (other
        than
        the Additional Guarantor) have entered into the Subsidiary Guarantee, dated
        as
        of November __, 2008 (as amended, supplemented or otherwise modified from
        time
        to time, the “Guarantee”) in favor of Vanco; 

       

      WHEREAS,
        the Guarantee requires the Additional Guarantor to become a party to the
        Guarantee; and

       

      WHEREAS,
        the Additional Guarantor has agreed to execute and deliver this Assumption
        Agreement in order to become a party to the Guarantee;

       

      NOW,
        THEREFORE, IT IS AGREED:

       

      1. Guarantee.
        By executing and delivering this Assumption Agreement, the Additional Guarantor,
        as provided in Section
        5(m)
        of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor
        thereunder with the same force and effect as if originally named therein
        as a
        Guarantor and, without limiting the generality of the foregoing, hereby
        expressly assumes all obligations and liabilities of a Guarantor thereunder.
        The
        information set forth in Annex
        1
        hereto is hereby added to the information set forth in Schedule
        1
        to the Guarantee. The Additional Guarantor hereby represents and warrants
        that
        each of the representations and warranties contained in Section
        3
        of the Guarantee is true and correct on and as the date hereof as to such
        Additional Guarantor (after giving effect to this Assumption Agreement) as
        if
        made on and as of such date.

       

      2. Governing
        Law.
        THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
        IN
        ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

       

      IN
        WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
        be duly
        executed and delivered as of the date first above written.

       

      
        	 	 	
                [ADDITIONAL
                  GUARANTOR]

              
	 	 	 
	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 


      

      

        
          
            
            

          

          
            A1-1