Document:

Unassociated Document

     

    
      Exhibit
        10.14

       

       EXHIBIT
        E

      

      SECURITY
        AGREEMENT

      

      This
        SECURITY AGREEMENT, dated as of November ___, 2008 (this “Agreement”), is
        among Capital Growth Systems, Inc., a Florida corporation (the
“Company”), all of the Subsidiaries of the Company (such subsidiaries,
        the “Guarantors” and together with the Company, the “Debtors”) and
        the holders of the Company’s Original Issue Discount Secured Convertible
        Debentures due seven years following their initial issuance, in the original
        aggregate principal amount of up to $17,325,000 (collectively, the
“Debentures”) signatory hereto, their endorsees, transferees and assigns
        (collectively, the “Secured Parties”).

      

      W
        I T N E S S E T H:

      

      WHEREAS,
        pursuant to the Purchase Agreement (as defined in the Debentures), the Secured
        Parties have severally agreed to extend the loans to the Company evidenced
        by
        the Debentures;

      

      WHEREAS,
        pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the
        “Guarantee”), the Guarantors
        have
        jointly and severally agreed to guarantee
        and act
        as surety for payment of such Debentures; and

      

      WHEREAS,
        in order to induce the Secured Parties to extend the loans evidenced by the
        Debentures, each Debtor has agreed to execute and deliver to the Secured
        Parties
        this Agreement and to grant the Secured Parties, pari
        passu with each other Secured Party and through the Agent (as defined in
        Section
        18 hereof), a security interest in certain property of such Debtor to secure
        the
        prompt payment, performance and discharge in full of all of the Company’s
        obligations under the
        Debentures and the Guarantors’ obligations under the Guarantee.

      

      NOW,
        THEREFORE, in consideration of the agreements herein contained and for other
        good and valuable
        consideration, the receipt and sufficiency of which is hereby acknowledged,
        the
        parties hereto hereby agree as follows:

      

      1.
         Certain
        Definitions.
        As used in this Agreement, the following terms shall have the meanings
        set forth in this Section 1. Terms used but not otherwise defined in this
        Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
        paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”,
“fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”,
“investment property”, “letter-of-credit rights”, “proceeds” and “supporting
        obligations”) shall have the respective meanings given such terms in Article 9
        of the UCC.

      

      (a)
         “Collateral”
        means the collateral in which the Secured Parties are granted a security
        interest by this Agreement and which shall include the following personal
        property of the Debtors, whether presently owned or existing or hereafter
        acquired or coming into existence, wherever situated, and all additions and
        accessions thereto and all substitutions and replacements thereof, and all
        proceeds, products and accounts thereof, including, without limitation, all
        proceeds from the sale or transfer of the Collateral and of insurance covering
        the same and of any tort claims in connection therewith,
        and all dividends, interest, cash, notes, securities, equity interest or
        other
        property at any time and from time to time acquired, receivable or otherwise
        distributed in respect of, or in exchange for, any or all of the Pledged
        Securities (as defined below):

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (i)
        All goods, including, without limitation, (A) all machinery, equipment,
        computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
        special and general tools, fixtures, test and quality control devices and
        other
        equipment of
        every kind and nature and wherever situated, together with all documents
        of
        title and documents representing the same, all additions and accessions thereto,
        replacements therefor, all parts therefor, and all substitutes for any of
        the
        foregoing and all other items used and useful in connection with any Debtor’s
        businesses and all improvements thereto; and (B) all inventory;

      

      (ii)
         All
        contract rights and other general intangibles, including, without limitation,
        all partnership interests, membership interests, stock or other securities,
        rights
        under any of the Organizational Documents, agreements related to the Pledged
        Securities, licenses,
        distribution and other agreements, computer software (whether “off-the-shelf”,
        licensed from any third party or developed by any Debtor), computer software
        development rights, leases, franchises, customer lists, quality control
        procedures, grants and rights, goodwill, trademarks, service marks, trade
        styles, trade names, patents, patent applications, copyrights, and income
        tax
        refunds; 

       

      (iii)
         All
        accounts, together with all instruments, all documents of title representing
        any
        of the foregoing, all rights in any merchandising, goods, equipment, motor
        vehicles and trucks which any of the same may represent, and all right, title,
        security and guaranties with respect to each account, including any right
        of
        stoppage in transit; 

      

      (iv)
         All
        documents, letter-of-credit rights, instruments and chattel paper;

      

      (v) All
        commercial tort claims;

      

      (vi) All
        deposit accounts and all cash (whether or not deposited in such deposit
        accounts);

      

      (vii) All
        investment property;

      

      (viii) All
        supporting obligations; and

      

      (ix) All
        files, records, books of account, business papers, and computer programs;
        and

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (x) the
        products and proceeds of all of the foregoing Collateral set forth in clauses
        (i)-(ix) above.

      

      Without
        limiting the generality of the foregoing, the “Collateral”
        shall include all investment property and general intangibles respecting
        ownership and/or other equity interests in each Guarantor, including, without
        limitation, the shares of capital stock and the other equity interests listed
        on
Schedule
        H
        hereto (as the same may be modified from time to time pursuant to the terms
        hereof), and any other shares of capital stock and/or other equity interests
        of
        any other direct or indirect subsidiary of any Debtor obtained in the future,
        and, in each case, all certificates representing such shares and/or equity
        interests and, in each case, all rights, options, warrants, stock, other
        securities and/or equity interests that may hereafter be received, receivable
        or
        distributed in respect of, or exchanged for, any of the foregoing and all
        rights
        arising under or in connection with the Pledged Securities, including, but
        not
        limited to, all dividends, interest and cash.
        Notwithstanding anything to the contrary contained herein, upon the sale
        or
        licensing by Nexvu Technologies, LLC (“Nexvu”),
        of any of its, assets, personal, real or intellectual property on terms and
        conditions unanimously approved by the Board of Directors in good faith,
        the
        Secured Parties agree to release their Lien on the Collateral owned directly
        by
        Nexvu on the date hereof from its security interest herein to the extent
        subject
        to such sale or licensing.

       

      Notwithstanding
        the foregoing, nothing herein shall be deemed to constitute an assignment
        of any
        asset which, in the event of an assignment, becomes void by operation of
        applicable law or the assignment of which is otherwise prohibited by applicable
        law (in each case to the extent that such applicable law is not overridden
        by
        Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable
        law);
provided,
        however,
        that to the extent permitted by applicable law, this Agreement shall create
        a
        valid security interest in such asset and, to the extent permitted by applicable
        law, this Agreement shall create a valid security interest in the proceeds
        of
        such asset.

      

      Notwithstanding
        the foregoing, the term Collateral shall not include any equipment owned
        by any
        of the Debtors or Vanco Direct USA, LLC, a Delaware limited liability company
        (“Vanco”),
        which is used in connection with the delivery of telecommunications services
        as
        part of the business operations of the Debtors and Vanco to the extent the
        grant
        of security interest in such equipment would be prohibited under applicable
        state regulations, and to the extent such equipment is excluded from the
        definition of “collateral” and the security interest granted to the Archer
        Purchasers under the Archer Loan Agreement.

      

      (b)
         “Intellectual
        Property”
        means the collective reference to all rights, priorities and privileges relating
        to intellectual property, whether arising under United States, multinational
        or
        foreign laws or otherwise, including, without limitation, (i) all copyrights
        arising under the laws of the United States, any other country or any political
        subdivision thereof, whether registered or unregistered and whether published
        or
        unpublished, all registrations and recordings thereof, and all applications
        in
        connection therewith, including, without limitation, all registrations,
        recordings and applications in the United States Copyright Office, (ii) all
        letters patent of the United States, any other country or any political
        subdivision thereof, all reissues and extensions thereof, and all applications
        for letters patent of the United States or any other country and all divisions,
        continuations and continuations-in-part thereof, (iii) all trademarks, trade
        names, corporate names, company names, business names, fictitious business
        names, trade dress, service marks, logos, domain names and other source or
        business identifiers, and all goodwill associated therewith, now existing
        or
        hereafter adopted or acquired, all registrations and recordings thereof,
        and all
        applications in connection therewith, whether in the United States Patent
        and
        Trademark Office or in any similar office or agency of the United States,
        any
        State thereof or any other country or any political subdivision thereof,
        or
        otherwise, and all common law rights related thereto, (iv) all trade secrets
        arising under the laws of the United States, any other country or any political
        subdivision thereof, (v) all rights to obtain any reissues, renewals or
        extensions of the foregoing, (vi) all licenses for any of the foregoing,
        and
        (vii) all causes of action for infringement of the foregoing.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (c) “Majority
        in Interest”
        means, at any time of determination, a 67% or more majority in interest (based
        on then-outstanding principal amounts of Debentures at the time of such
        determination) of the Secured Parties.

      

      (d) “Necessary
        Endorsement”
        means undated stock powers endorsed in blank or other proper instruments
        of
        assignment duly executed and such other instruments or documents as the Agent
        (as that term is defined below) may reasonably request.

      

      (e)
         “Obligations”
        means 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 any Debtor to the Secured
        Parties, including, without limitation, all obligations under this Agreement,
        the Debentures, the Guarantee
        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 any of the Secured Parties
        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 Debentures and
        the
        loans extended pursuant thereto; (ii) any and all other fees, indemnities,
        costs, obligations and liabilities of the Debtors from time to time under
        or in
        connection with this Agreement, the Debentures, the Guarantee 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 any Debtor.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (f)
         “Organizational
        Documents”
        means with respect to any Debtor, the documents by which such Debtor was
        organized (such as a certificate of incorporation, certificate of limited
        partnership or articles of organization, and including, without limitation,
        any
        certificates of designation for preferred stock or other forms of preferred
        equity) and which relate to the internal governance of such Debtor (such
        as
        bylaws, a partnership agreement or an operating, limited liability or members
        agreement).

      

      (g)
         “Pledged
        Interests”
        shall have the meaning ascribed to such term in Section 4(j).

      

      (h)
         “Pledged
        Securities”
        shall have the meaning ascribed to such term in Section 4(i).

      

      (i) “UCC”
        means the Uniform Commercial Code of the State of New York and or any other
        applicable law of any state or states which has jurisdiction with respect
        to
        all, or any portion of, the Collateral or this Agreement, from time to time.
        It
        is the intent of the parties that defined terms in the UCC should be construed
        in their broadest sense so that the term “Collateral” will be construed in its
        broadest sense. Accordingly if there are, from time to time, changes to defined
        terms in the UCC that broaden the definitions, they are incorporated herein
        and
        if existing definitions in the UCC are broader than the amended definitions,
        the
        existing ones shall be controlling. 

      

      2.
         Grant
        of Security Interest in Collateral.
        As an inducement for the Secured Parties to extend the loans as evidenced
        by the
        Debentures and to secure the complete and timely payment, performance and
        discharge in full, as the case may be, of all of the Obligations, each Debtor
        hereby unconditionally and irrevocably pledges, grants and hypothecates to
        the
        Secured Parties a security
        interest in and to, a lien upon and a right of set-off against all of their
        respective right, title and interest of whatsoever kind and nature in and
        to,
        the Collateral (a“Security
        Interest”
        and, collectively, the “Security
        Interests”).

      

      3. Delivery
        of Certain Collateral.
        Immediately upon the Senior Creditor Repayment (as defined in the Archer
        Intercreditor Agreement), each Debtor shall deliver or cause to be delivered
        to
        the Agent (a) any and all
        certificates and other instruments representing or evidencing the
        Pledged Securities, and (b) any and all certificates and other instruments
        or
        documents representing any of the other Collateral, in each case, together
        with
        all Necessary Endorsements. The Debtors are, contemporaneously with the
        execution hereof, delivering to Agent, or have previously delivered to Agent,
        a
        true and correct copy of each Organizational Document governing any of the
        Pledged Securities.

      

      4.  Representations,
        Warranties, Covenants and Agreements of the Debtors.
        Except as set forth under the corresponding section of the disclosure schedules
        delivered to the Secured Parties concurrently herewith (the “Disclosure
        Schedules”),
        which Disclosure Schedules shall be deemed a part hereof, each Debtor represents
        and warrants to, and covenants and agrees with, the Secured Parties as
        follows:

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (a)
        Each Debtor has the requisite corporate, partnership, limited liability company
        or other power and authority to enter into this Agreement and otherwise to
        carry
        out its obligations hereunder. The execution, delivery and performance by
        each
        Debtor of this Agreement and the filings contemplated therein have been duly
        authorized by all necessary action on the part of such Debtor and no further
        action is required by such Debtor. This Agreement has been duly executed
        by each
        Debtor. This Agreement constitutes the legal, valid and binding obligation
        of
        each Debtor, enforceable against each Debtor in accordance with its terms
        except
        as such enforceability may be limited by applicable bankruptcy, insolvency,
        reorganization and similar laws of general application relating to or affecting
        the rights and remedies of creditors and by general principles of
        equity.

      

      (b)
         The
        Debtors have no place of business or offices where their respective books
        of
        account and records are kept (other than temporarily at the offices of its
        attorneys or accountants) or places where Collateral is stored or located,
        except as set forth on Schedule
        A
        attached hereto. No Debtor owns any real property. Except as disclosed on
        Schedule
        A,
        none of such Collateral is in the possession of any consignee, bailee,
        warehouseman, agent or processor.

      

      (c)
         Except
        for Permitted Liens (as defined in the Debentures) and except as set forth
        on
Schedule
        B
        attached hereto, the Debtors are the sole owner of the Collateral (except
        for
        non-exclusive licenses granted by any Debtor in the ordinary course of
        business), free and clear of any liens, security interests, encumbrances,
        rights
        or claims, and are fully authorized to grant the Security Interests. Except
        as
        set forth on Schedule
        C
        attached hereto, there is not on file in any governmental or regulatory
        authority, agency or recording office an effective financing statement, security
        agreement, license or transfer or any notice of any of the foregoing (other
        than
        those that will be filed in favor of the Secured Parties pursuant to this
        Agreement) covering or affecting any of the Collateral. Except as set forth
        on
Schedule
        C
        attached hereto and except pursuant to this Agreement, as
        long as this Agreement shall be in effect, the Debtors shall not execute
        and
        shall not knowingly permit to be on file in any such office or agency any
        other
        financing statement or other document or instrument (except to the extent
        filed
        or recorded in favor of the Secured Parties pursuant to the terms of this
        Agreement or as permitted in connection with any permitted purchase money
        security interests or capital leases that are permitted under the
        Debentures).

      

      (d)
         No
        written claim has been received that any Collateral or any Debtor's use of
        any
        Collateral violates the rights of any third party. There has been no adverse
        decision to any Debtor's claim of ownership rights in or exclusive rights
        to use
        the Collateral in any jurisdiction or to any Debtor's right to keep and maintain
        such Collateral in full force and effect, and there is no proceeding involving
        said rights pending or, to the best knowledge of any Debtor, threatened before
        any court, judicial body, administrative or regulatory agency, arbitrator
        or
        other governmental authority.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (e)
         Each
        Debtor shall at all times maintain its books of account and records relating
        to
        the Collateral at its principal place of business and its Collateral at the
        locations set forth on Schedule
        A
        attached hereto and may not relocate such books of account and records or
        tangible Collateral unless it delivers to the Secured Parties at least 30
        days
        prior to such relocation (i) written notice of such relocation and the new
        location thereof (which must be within the United States) and (ii) evidence
        that
        appropriate financing statements under the UCC and other necessary documents
        have been filed and recorded and other steps have been taken to perfect the
        Security Interests to create in favor of the Secured Parties a valid, perfected
        and continuing perfected lien in the Collateral.

      

      (f)
         This
        Agreement creates in favor of the Secured Parties a valid security interest
        in
        the Collateral, subject only to Permitted Liens (as defined in the Debentures)
        securing the payment and performance of the Obligations. Upon making the
        filings
        described in the immediately following paragraph, all security interests
        created
        hereunder in any Collateral which may be perfected by filing Uniform Commercial
        Code financing statements shall have been duly perfected. Except for the
        filing
        of the Uniform Commercial Code financing statements referred to in the
        immediately following paragraph, the recordation of the Intellectual Property
        Security Agreement (as defined in
        Section 4(p) hereof) with respect to copyrights and copyright applications
        in
        the United States Copyright Office referred to in paragraph (m),
        with respect to patents and trademarks filed with the US Patent and Trademark
        Office with respect to federally registered patents and trademarks and pending
        applications for federal registration of patents and trademarks,
        the execution and delivery of deposit account control agreements satisfying
        the
        requirements of Section 9-104(a)(2) of the UCC with respect to each deposit
        account of the Debtors,
        and the delivery of the certificates and other instruments provided in Section
        3,
        no action is necessary to create, perfect or protect the security interests
        created hereunder. Without limiting the generality of the foregoing, except
        for
        the filing of said financing statements, the recordation of said Intellectual
        Property Security Agreement, and the execution and delivery of said deposit
        account control agreements, no consent of any third parties and no
        authorization, approval or other action by, and no notice to or filing with,
        any
        governmental authority or regulatory body is required for (i) the execution,
        delivery and performance of this Agreement, (ii) the creation or perfection
        of
        the Security Interests created hereunder in the Collateral or (iii) the
        enforcement of the rights of the Agent and the Secured Parties
        hereunder.

      

      (g)
         Each
        Debtor hereby authorizes the Agent to file one or more financing statements
        under the UCC, with respect to the Security Interests, with the proper filing
        and recording agencies in any jurisdiction deemed proper by it.

      

       (h)
         The
        execution, delivery and performance of this Agreement by the Debtors does
        not
        (i) violate any of the provisions of any Organizational Documents of any
        Debtor
        or any judgment, decree, order or award of any court, governmental body or
        arbitrator or any applicable law, rule or regulation applicable to any Debtor
        or
        (ii) conflict with, or constitute a default (or an event that 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 (with or without
        notice, lapse of time or both) of, any agreement, credit facility, debt or
        other
        instrument (evidencing any Debtor's debt or otherwise) or other understanding
        to
        which any Debtor is a party or by which any property or asset of any
Debtor
        is bound or affected. If any, all required consents (including, without
        limitation, from stockholders or creditors of any Debtor) necessary
        for any Debtor to enter into and perform its obligations hereunder
        have been obtained.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (i)
         The
        capital stock and other equity interests listed on Schedule
        H
        hereto (the “Pledged
        Securities”)
        represent all of the capital stock and other equity interests of the Guarantors,
        and represent all capital stock and other equity interests owned, directly
        or
        indirectly, by the Company. All of the Pledged Securities are validly issued,
        fully paid and nonassessable, and the Company is the legal and beneficial owner
        of the Pledged Securities, free and clear of any lien, security interest
        or
        other encumbrance except for the security interests created by this Agreement
        and other Permitted Liens (as defined in the Debentures). 

      

      (j)
         The
        ownership and other equity interests in partnerships and limited liability
        companies (if any)
        included in the Collateral
        (the “Pledged
        Interests”)
        by their express terms do not provide that they are securities governed by
        Article 8 of the UCC and are not held in a securities account or by any
        financial intermediary.

      

      (k)
         Except
        for Permitted Liens (as defined in the Debentures), each Debtor shall at
        all
        times maintain the liens and Security Interests
        provided for hereunder as valid and perfected liens
        and security interests in the Collateral in favor of the Secured Parties
        until
        this Agreement and the Security Interest hereunder shall be terminated pursuant
        to Section 14 hereof. Each Debtor hereby agrees to defend the same against
        the
        claims of any and all persons and entities. Each Debtor shall safeguard and
        protect all Collateral for the account of the Secured Parties. At the request
        of
        the Agent, each Debtor will sign and deliver to the Agent on behalf of the
        Secured Parties at any time or from time to time one or more financing
        statements pursuant to the UCC in form reasonably satisfactory to the Agent
        and
        will pay the cost of filing the same in all public offices wherever filing
        is,
        or is deemed by the Agent to be, necessary or desirable to effect the rights
        and
        obligations provided for herein. Without limiting the generality of the
        foregoing, each Debtor shall pay all fees, taxes and other amounts necessary
        to
        maintain the Collateral and the Security Interests hereunder, and each Debtor
        shall obtain and furnish to the Agent from time to time, upon demand, such
        releases and/or subordinations of claims and liens which may be required
        to
        maintain the priority of the Security Interests
        hereunder.

      

      (l)
         Except
        as expressly permitted in Section 1 with respect to licenses and transfers
        by
        Nexvu, no Debtor will transfer, pledge, hypothecate, encumber, license, sell
        or
        otherwise dispose of any of the Collateral (except for non-exclusive licenses
        granted by a Debtor in its ordinary course of business and sales of inventory
        by
        a Debtor in its ordinary course of business) without the prior written consent
        of a Majority
        in Interest.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (m) Each
        Debtor shall keep and preserve its equipment, inventory and other tangible
        Collateral in good condition, repair and order and shall not operate or locate
        any such Collateral (or cause to be operated or located) in any area excluded
        from insurance coverage.

      

      (n) Each
        Debtor shall maintain with financially sound and reputable insurers, insurance
        with respect to the Collateral, including Collateral hereafter
        acquired,
        against loss or damage of the kinds and in the amounts customarily insured
        against by entities of established reputation having similar properties
        similarly situated and in such amounts as are customarily carried under similar
        circumstances by other such entities and otherwise as is prudent for entities
        engaged in similar businesses but in any event sufficient to cover the full
        replacement cost thereof. Each Debtor shall cause each insurance policy issued
        in connection herewith to provide, and the insurer issuing such policy to
        certify to the Agent, that (a) the Agent will be named as lender loss payee
        and
        additional insured under each such insurance policy; (b) if such insurance
        be
        proposed to be cancelled or materially changed for any reason whatsoever,
        such
        insurer will promptly notify the Agent and such cancellation or change shall
        not
        be effective as to the Agent for at least thirty (30) days after receipt
        by the
        Agent of such notice, unless the effect of such change is to extend or increase
        coverage under the policy; and (c) the Agent will have the right (but no
        obligation) at its election to remedy any default in the payment of premiums
        within thirty (30) days of notice from the insurer of such default. If no
        Event
        of Default (as defined in the Debentures) exists and if the proceeds arising
        out
        of any claim or series of related claims do not exceed $100,000, loss payments
        in each instance will be applied by the applicable Debtor to the repair and/or
        replacement of property with respect to which the loss was incurred to the
        extent reasonably feasible, and any loss payments or the balance thereof
        remaining, to the extent not so applied, shall be payable to the applicable
        Debtor; provided,
        however,
        and except as set forth below, that payments received by any Debtor after
        an
        Event of Default occurs and is continuing or in excess of $100,000 for any
        occurrence or series of related occurrences shall be paid to the Agent on
        behalf
        of the Secured Parties and, if received by such Debtor, shall be held in
        trust
        for the Secured Parties and immediately paid over to the Agent unless otherwise
        directed in writing by the Agent.
        Notwithstanding anything to the contrary contained herein, so long as no
        Event
        of Default (as defined in the Debentures) exists, Company may apply payments
        in
        excess of $100,000 to repair or replace switching or routing equipment, for
        the
        purpose of restoring or establishing new customary circuits to address the
        casualty loss related to such equipment.
        Copies of such policies or the related certificates, in each case, naming
        the
        Agent as lender loss payee and additional insured shall be delivered to the
        Agent at least annually and at the time any new policy of insurance is
        issued.

      

      (o)
         Each
        Debtor shall, within ten (10) days of obtaining knowledge thereof, advise
        the
        Secured Parties promptly, in sufficient detail, of any material adverse change
        in the Collateral, and of the occurrence of any event which would have a
        material adverse effect on the value of the Collateral or on the Secured
        Parties’ security interest, through the Agent, therein.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (p)
         Each
        Debtor shall promptly execute and deliver to the Agent such further deeds,
        mortgages, assignments, security agreements, financing statements or other
        instruments, documents, certificates and assurances and take such further
        action
        as the Agent
        may from time to time request and may in its sole discretion deem necessary
        to
        perfect, protect or enforce the Secured Parties’ security interest in the
        Collateral including, without limitation, if applicable, the execution and
        delivery of a separate security agreement with respect to each Debtor’s
        Intellectual Property (“Intellectual
        Property Security Agreement”)
        in which the Secured Parties have been granted a security interest hereunder,
        substantially in a form reasonably acceptable to the Agent, which Intellectual
        Property Security Agreement, other than as stated therein, shall be subject
        to
        all of the terms and conditions hereof.

      

      (q)
         Each
        Debtor shall permit the Agent and its
        representatives and agents to inspect the Collateral during normal business
        hours and upon reasonable prior notice, and to make copies of records pertaining
        to the Collateral as may be reasonably requested by the Agent from time to
        time.

      

      (r)
         Each
        Debtor shall take all steps reasonably necessary to diligently pursue and
        seek
        to preserve, enforce and collect any rights, claims, causes of action and
        accounts receivable in respect of the Collateral.

      

      (s)
         Each
        Debtor shall promptly notify the Secured Parties in sufficient detail upon
        becoming aware of any attachment, garnishment, execution or other legal process
        levied against any Collateral and of any other information received by such
        Debtor that may materially affect the value of the Collateral, the Security
        Interest or the rights and remedies of the Secured Parties
        hereunder.

      

      (t)
         All
        information heretofore, herein or hereafter supplied to the Secured Parties
        by
        or on behalf of any Debtor with respect to the Collateral is accurate and
        complete in all material respects as of the date furnished.

      

      (u)
         The
        Debtors shall at all times preserve and keep in full force and effect their
        respective valid existence and good standing and any rights and franchises
        material to its business.

      

      (v)
         No
        Debtor will change its name, type of organization, jurisdiction of organization,
        organizational identification number (if it has one), legal or corporate
        structure, or identity, or add any new fictitious name unless it provides
        at
        least 30 days prior written notice to the Secured Parties of such change
        and, at
        the time of such written notification, such Debtor provides any financing
        statements or fixture filings necessary to perfect and continue
        the perfection of the Security Interests granted and evidenced by this
        Agreement.

      

      (w) Except
        in the ordinary course of business, no
        Debtor may consign any of its inventory or sell any of its inventory on bill
        and
        hold, sale or return, sale on approval, or other conditional terms of sale
        without the consent of the Agent which shall not be unreasonably
        withheld.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (x)
         No
        Debtor may relocate its chief executive office to a new location without
        providing 30 days prior written notification thereof to the Secured Parties
        and
        so long as, at the time of such written notification, such Debtor provides
        any
        financing statements or fixture filings necessary to perfect and continue
        the
        perfection of the Security Interests granted and evidenced by this
        Agreement.

      

      (y) Each
        Debtor was organized and remains organized solely under the laws of the state
        set forth next to such Debtor’s name in Schedule
        D
        attached hereto, which Schedule
        D
        sets forth each Debtor’s organizational identification number or, if any Debtor
        does not have one, states that one does not exist.

      

      (z) 
        (i) The actual name of each Debtor is the name set forth in Schedule
        D
        attached hereto; (ii) no Debtor has any trade names except as set forth on
        Schedule
        E
        attached hereto; (iii) no Debtor has used any name other than that stated
        in the
        preamble hereto or as set forth on Schedule
        E
        for the preceding five years; and (iv) no entity has merged into any Debtor
        or
        been acquired by any Debtor within the past five years except as set forth
        on
Schedule
        E.

      

      (aa) At
        any time and from time to time that any Collateral consists of instruments,
        certificated securities or other items that require or permit possession
        by the
        secured party to perfect the security interest created hereby, the applicable
        Debtor shall deliver such Collateral to the Agent.

      

      (bb)
         Each
        Debtor, in its capacity as issuer, hereby agrees to comply with any and all
        orders and instructions of Agent regarding the Pledged Interests consistent
        with
        the terms of this Agreement without the further consent of any Debtor as
        contemplated by Section 8-106 (or any successor section) of the UCC. Further,
        each Debtor agrees that it shall not enter into a similar agreement (or one
        that
        would confer “control” within the meaning of Article 8 of the UCC) with any
        other person or entity.

       

      (cc) Each
        Debtor shall cause all tangible chattel paper constituting Collateral to
        be
        delivered to the Agent, or, if such delivery is not possible, then to cause
        such
        tangible chattel paper to contain a legend noting that it is subject to the
        security interest created by this Agreement. To the extent that any Collateral
        consists of electronic chattel paper, the applicable Debtor shall cause the
        underlying chattel paper to be “marked” within the meaning of Section 9-105 of
        the UCC (or successor section thereto).

      

      (dd) If
        there is any investment property or deposit account included as Collateral
        that
        can be perfected by “control” through an account control agreement, the
        applicable Debtor shall cause such an account control agreement, in form
        and
        substance in each case satisfactory to the Agent, to be entered into and
        delivered to the
        Agent for the benefit of the Secured Parties.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (ee)
         To
        the extent that any Collateral consists of letter-of-credit rights, the
        applicable Debtor shall cause the issuer of each underlying letter of credit
        to
        consent to an assignment of the proceeds thereof to the Secured
        Parties.

      

      (ff)
         To
        the extent that any Collateral is in the possession of any third party, the
        applicable Debtor shall join with the Agent in notifying such third party
        of the
        Secured Parties’ security interest in such Collateral and shall use its best
        efforts to obtain an acknowledgement and agreement from such third party
        with
        respect to the Collateral, in form and substance reasonably satisfactory
        to the
        Agent.

      

      (gg) If
        any Debtor shall at any time hold or acquire a commercial tort claim, such
        Debtor shall promptly notify the Secured Parties in a writing signed by such
        Debtor of the particulars thereof and grant to the Secured Parties in such
        writing a security interest therein and in the proceeds thereof, all upon
        the
        terms of this Agreement, with such writing to be in form and substance
        satisfactory to the Agent.

      

      (hh) Each
        Debtor shall immediately provide written notice to the Secured Parties of
        any
        and all accounts which arise out of contracts with any governmental authority
        and, to the extent necessary to perfect or continue the perfected status
        of the
        Security Interests
        in such accounts and proceeds thereof, shall execute and deliver to the Agent
        an
        assignment of claims for such accounts and cooperate with the Agent in taking
        any other steps required, in its judgment, under the Federal Assignment of
        Claims Act or any similar federal, state or local statute or rule to perfect
        or
        continue the perfected status of the Security Interests
        in such accounts and proceeds thereof.

      

      (ii) Each
        Debtor shall cause each subsidiary
        of such Debtor to immediately become a party hereto (an “Additional Debtor”), by
        executing and delivering an Additional Debtor Joinder in substantially the
        form
        of Annex
        A
        attached hereto and comply with the provisions hereof applicable to the Debtors.
        Concurrent therewith, the Additional Debtor shall deliver replacement schedules
        for, or supplements to all other Schedules to (or referred to in) this
        Agreement, as applicable, which replacement schedules shall supersede, or
        supplements shall modify, the Schedules then in effect. The Additional Debtor
        shall also deliver such opinions of counsel, authorizing resolutions, good
        standing certificates, incumbency certificates, organizational documents,
        financing statements and other information and documentation as the
        Agent
        may reasonably request. Upon delivery of the foregoing to the Agent, the
        Additional Debtor shall be and become a party to this Agreement with the
        same
        rights and obligations as the Debtors, for all purposes hereof as fully and
        to
        the same extent as if it were an original signatory hereto and shall be deemed
        to have made the representations, warranties and covenants set forth herein
        as
        of the date of execution and delivery of such Additional Debtor Joinder,
        and all
        references herein to the “Debtors” shall be deemed to include each Additional
        Debtor.

      

      (jj)
         Each
        Debtor shall vote the Pledged Securities to comply with the covenants and
        agreements set forth herein and in the Debentures.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (kk) Each
        Debtor shall register the pledge of the applicable Pledged Securities on
        the
        books of such Debtor. Each Debtor shall notify each issuer of Pledged Securities
        to register the pledge of the applicable Pledged Securities in the name of
        the
        Secured Parties on the books of such issuer. Further, except with respect
        to
        certificated securities delivered to the Agent, the applicable Debtor shall
        deliver to Agent an acknowledgement of pledge (which, where appropriate,
        shall
        comply with the requirements of the relevant UCC with respect to perfection
        by
        registration) signed by the issuer of the applicable Pledged Securities,
        which
        acknowledgement shall confirm that: (a) it has registered the pledge on its
        books and records; and (b) at any time directed by Agent during the continuation
        of an Event of Default, subject to the rights of the Archer Purchasers under
        the
        Archer Loan Agreement, such issuer will transfer the record ownership of
        such
        Pledged Securities into the name of any designee of Agent, will take such
        steps
        as may be necessary to effect the transfer, and will comply with all other
        instructions of Agent regarding such Pledged Securities without the further
        consent of the applicable Debtor.

      

      (ll)
        In
        the event that, upon an occurrence of an Event of Default, subject to the
        rights
        of the Archer Purchasers under the Archer Loan Agreement, Agent shall sell
        all
        or any of the Pledged Securities to another party or parties (herein called
        the
“Transferee”)
        or shall purchase or retain all or any of the Pledged Securities, each Debtor
        shall, to the extent applicable: (i) deliver to Agent or the Transferee,
        as the
        case may be, the articles of incorporation, bylaws, minute books, stock
        certificate books, corporate seals, deeds, leases, indentures, agreements,
        evidences of indebtedness, books of account, financial records and all other
        Organizational Documents and records of the Debtors and their direct and
        indirect subsidiaries; (ii) use its best efforts to obtain resignations of
        the
        persons then serving as officers and directors of the Debtors and their direct
        and indirect subsidiaries, if so requested; and (iii) use its best efforts
        to
        obtain any approvals that are required by any governmental or regulatory
        body in
        order to permit the sale of the Pledged Securities to the Transferee or the
        purchase or retention of the Pledged Securities by Agent and allow the
        Transferee or Agent to continue the business of the Debtors and their direct
        and
        indirect subsidiaries.

       

      (mm) Without
        limiting the generality of the other obligations of the Debtors hereunder,
        each
        Debtor shall promptly (i) cause to be registered at the United States Copyright
        Office all of its material copyrights, (ii) cause the security interest
        contemplated hereby with respect to all Intellectual Property registered
        at the
        United States Copyright Office or United States Patent and Trademark Office
        to
        be duly recorded at the applicable office, and (iii) give the Agent notice
        whenever it acquires (whether absolutely or by license) or creates any
        additional material Intellectual Property.

      

      (nn) Each
        Debtor will from time to time, at the joint and several expense of the Debtors,
        promptly execute and deliver all such further instruments and documents,
        and
        take all such further action as may be necessary or desirable, or as the
        Agent
        may reasonably request, in order to perfect and protect any security interest
        granted or purported to be granted hereby or to enable the Secured Parties
        to
        exercise and enforce their rights and remedies hereunder and with respect
        to any
        Collateral or to otherwise carry out the purposes of this
        Agreement.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (oo) Schedule
        F
        attached hereto lists all of the patents, patent applications, trademarks,
        trademark applications, registered copyrights, and domain names owned by
        any of
        the Debtors as of the date hereof. Schedule
        F
        lists all material licenses in favor of any Debtor for the use of any patents,
        trademarks, copyrights and domain names as of the date hereof. All material
        patents and trademarks of the Debtors have been duly recorded at the United
        States Patent and Trademark Office and all material copyrights of the Debtors
        have been duly recorded at the United States Copyright Office.

      

      (pp) Except
        as set forth on Schedule
        G
        attached hereto, none of the account debtors or other persons or entities
        obligated on any of the Collateral is a governmental authority covered by
        the
        Federal Assignment of Claims Act or any similar federal, state or local statute
        or rule in respect of such Collateral.

      

      5. Effect
        of Pledge on Certain Rights. If
        any of the Collateral subject to this Agreement consists of nonvoting equity
        or
        ownership interests (regardless of class, designation, preference or rights)
        that may be converted into voting equity or ownership interests upon the
        occurrence of certain events (including, without limitation, upon the transfer
        of all or any of the other stock or assets of the issuer), it is agreed that
        the
        pledge of such equity or ownership interests pursuant to this Agreement or
        the
        enforcement of any of Agent’s rights hereunder shall not be deemed to be the
        type of event which would trigger such conversion rights notwithstanding
        any
        provisions in the Organizational Documents or agreements to which any Debtor
        is
        subject or to which any Debtor is party.

      

      6.
         Defaults.
        The following events shall be “Events
        of Default”:

      

      (a)
        The occurrence of an Event of Default (as defined in the Debentures) under
        the
        Debentures;

      

      (b)
        Any representation or warranty of any Debtor in this Agreement shall prove
        to
        have been incorrect in any material respect when made;

      

      (c)
        The failure by any Debtor to observe or perform any of its obligations hereunder
        for five Business Days after delivery to such Debtor of notice of such failure
        by or on behalf of a Secured Party unless such default is capable of cure
        but
        cannot be cured within such time frame and such Debtor is using best efforts
        to
        cure same in a timely fashion; or

      

      (d)
        If any provision of this Agreement shall at any time for any reason be declared
        to be null and void, or the validity or enforceability thereof shall be
        contested by any Debtor,
        or a proceeding shall be commenced by any Debtor, or by any governmental
        authority having jurisdiction over any Debtor, seeking to establish the
        invalidity or unenforceability thereof, or any Debtor shall deny that any
        Debtor
        has any liability or obligation purported to be created under this
        Agreement.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      7.  Duty
        To Hold In Trust.

       

      (a) Upon
        the occurrence of any Event of Default and at any time thereafter, each Debtor
        shall, upon receipt of any revenue, income,
        dividend, interest
        or other sums subject to the Security Interests, whether payable pursuant
        to the
        Debentures or otherwise, or of any check, draft, note, trade acceptance or
        other
        instrument evidencing an obligation to pay any such sum, hold the same in
        trust
        for the Secured Parties and shall forthwith endorse and transfer any such
        sums
        or instruments, or both, to the Secured Parties, pro-rata in proportion to
        their
respective
        then-currently outstanding principal amount
        of Debentures for application to the satisfaction of the Obligations (and
        if any
        Debenture is not outstanding, pro-rata in proportion to the initial purchases
        of
        the remaining Debentures). 

      

      (b) If
        any Debtor shall become entitled to receive or shall receive any securities
        or
        other property (including, without limitation, shares of Pledged Securities
        or
        instruments representing Pledged Securities acquired after the date hereof,
        or
        any options, warrants, rights or other similar property or certificates
        representing a dividend, or any distribution in connection with any
        recapitalization, reclassification or increase or reduction of capital, or
        issued in connection with any reorganization of such Debtor or any of its
        direct
        or indirect subsidiaries) in respect of the Pledged Securities (whether as
        an
        addition to, in substitution of, or in exchange for, such Pledged Securities
        or
        otherwise), such Debtor agrees to (i) accept the same as the agent of the
        Secured Parties; (ii) hold the same in trust on behalf of and for the benefit
        of
        the Secured Parties; and (iii) to deliver any and all certificates or
        instruments evidencing the same to Agent on or before the close of business
        on
        the fifth business day following the receipt thereof by such Debtor, in the
        exact form received together with the Necessary Endorsements, to be held
        by
        Agent subject to the terms of this Agreement as Collateral.

      

      8.  Rights
        and Remedies Upon Default.

      

      (a) Upon
        the occurrence of any Event of Default and at any time thereafter, the Secured
        Parties, acting through the Agent, shall have the right to exercise all of
        the
        remedies conferred hereunder and under the Debentures, and the Secured Parties
        shall have all the rights and remedies of a secured party under the UCC.
        Without
        limitation, the Agent,
        for the benefit of the Secured Parties, shall have the following rights and
        powers:

      

      (i)
        The Agent shall have the right to take possession of the Collateral and,
        for
        that purpose, enter, with the aid and assistance of any person, any premises
        where the Collateral, or any part thereof, is or may be placed and remove
        the
        same, and each Debtor shall assemble the Collateral and make it available
        to the
        Agent at places which the Agent shall reasonably select, whether at such
        Debtor's premises or elsewhere, and make available to the Agent, without
        rent,
        all of such Debtor’s respective premises and facilities for the purpose of the
        Agent taking possession of, removing or putting the Collateral in saleable
        or
        disposable form.

      

      (ii) Upon
        notice to the Debtors by Agent, all rights of each Debtor to exercise the
        voting
        and other consensual rights which it would otherwise be entitled to exercise
        and
        all rights of each Debtor to receive the dividends and interest which it
        would
        otherwise be authorized to receive and retain, shall cease. Upon such notice,
        Agent shall have the right to receive, for the benefit of the Secured Parties,
        any interest, cash dividends or other payments on the Collateral and, at
        the
        option of Agent, to exercise in such Agent’s discretion all voting rights
        pertaining thereto. Without limiting the generality of the foregoing, Agent
        shall have the right (but not the obligation) to exercise all rights with
        respect to the Collateral as it were the sole and absolute owner thereof,
        including, without limitation, to vote and/or to exchange, at its sole
        discretion, any or all of the Collateral in connection with a merger,
        reorganization, consolidation, recapitalization or other readjustment concerning
        or involving the Collateral or any Debtor or any of its direct or indirect
        subsidiaries.

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      (iii)
        The Agent shall have the right to operate the business of each Debtor using
        the
        Collateral and shall have the right to assign, sell, lease or otherwise dispose
        of and deliver all or any part of the Collateral, at public or private sale
        or
        otherwise, either with or without special conditions or stipulations, for
        cash
        or on credit or for future delivery, in such parcel or parcels and at such
        time
        or times and at such place or places, and upon such
        terms and conditions as the Agent may deem commercially reasonable, all without
        (except as shall be required by applicable statute and cannot be waived)
        advertisement or demand upon or notice to any Debtor or right of redemption
        of a
        Debtor, which are hereby expressly waived. Upon each such sale, lease,
        assignment or other transfer of Collateral, the Agent, for the benefit of
        the
        Secured Parties, may, unless prohibited by applicable law which cannot be
        waived, purchase all or any part of the Collateral being sold, free from
        and
        discharged of all trusts, claims, right of redemption and equities of any
        Debtor, which are hereby waived and released.

      

      (iv) The
        Agent shall have the right (but not the obligation) to notify any account
        debtors and any obligors under instruments or accounts to make payments directly
        to the Agent,
        on behalf of the Secured Parties, and to enforce the Debtors’ rights against
        such account debtors and obligors.

      

      (v) The
        Agent, for the benefit of the Secured Parties,
        may (but is not obligated to) direct any financial intermediary or any other
        person or entity holding any investment property to transfer the same to
        the
        Agent, on behalf of the Secured Parties, or its designee.

      

      (vi) The
        Agent may (but is not obligated to) transfer any or all Intellectual Property
        registered in the name of any Debtor at the United States Patent and Trademark
        Office and/or Copyright Office into the name of the Secured Parties or any
        designee or any purchaser of any Collateral.

      

      (b) The
        Agent shall comply with any applicable law in connection with a disposition
        of
        Collateral and such compliance will not be considered adversely to affect
        the
        commercial reasonableness of any sale of the Collateral. The Agent may sell
        the
        Collateral without giving any warranties and may specifically disclaim such
        warranties. If the Agent sells any of the Collateral on credit, the Debtors
        will
        only be credited with payments actually made by the purchaser. In addition,
        each
        Debtor waives any and all rights that it may have to a judicial hearing in
        advance of the enforcement of any of the Agent’s rights and remedies hereunder,
        including, without limitation, its right following an Event of Default to
        take
        immediate possession of the Collateral and to exercise its rights and remedies
        with respect thereto.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (c) For
        the purpose of enabling the Agent to further exercise rights and remedies
        under
        this Section 8 or elsewhere provided by agreement or applicable law, each
        Debtor
        hereby grants to the Agent, for the benefit of the Agent and the Secured
        Parties, an irrevocable, nonexclusive license (exercisable without payment
        of
        royalty or other compensation to such Debtor) to use, license or sublicense
        following an Event of Default, any Intellectual Property now owned or hereafter
        acquired by such Debtor, and wherever the same may be located, and including
        in
        such license access to all media in which any of the licensed items may be
        recorded or stored and to all computer software and programs used for the
        compilation or printout thereof.

      

      9.  Applications
        of Proceeds.
        The proceeds of any such sale, lease or other disposition of the Collateral
        hereunder or from payments made on account of any insurance policy insuring
        any
        portion of the Collateral shall be applied first, to the expenses of retaking,
        holding, storing, processing and preparing for sale, selling, and the like
        (including, without limitation, any taxes, fees and other costs incurred
        in
        connection therewith) of the Collateral, to the reasonable attorneys’ fees and
        expenses incurred by the Agent
        in enforcing the Secured Parties’ rights hereunder and in connection with
        collecting, storing and disposing of the Collateral, and then to satisfaction
        of
        the Obligations pro rata among the Secured Parties (based on then-outstanding
        principal amounts of Debentures at the time of any such determination), and
        to
        the payment of any other amounts required by applicable law, after which
        the
        Secured Parties shall pay to the applicable Debtor any surplus proceeds.
        If,
        upon the sale, license or other disposition of the Collateral, the proceeds
        thereof are insufficient to pay all amounts to which the Secured Parties
        are
        legally entitled, the Debtors will be liable for the deficiency, together
        with
        interest thereon, at the rate of 16% per annum or the lesser amount permitted
        by
        applicable law (the “Default
        Rate”),
        and the reasonable fees of any attorneys employed by the Secured Parties
        to
        collect such deficiency. To the extent permitted by applicable law, each
        Debtor
        waives all claims, damages and demands against the Secured Parties arising
        out
        of the repossession, removal, retention or sale of the Collateral, unless
        due
        solely to the gross negligence or willful misconduct of the Secured Parties
        as
        determined by a final judgment (not subject to further appeal) of a court
        of
        competent jurisdiction.

      

      10. Securities
        Law Provision.
        Each Debtor recognizes that Agent may be limited in its ability to effect
        a sale
        to the public of all or part of the Pledged Securities by reason of certain
        prohibitions in the Securities Act of 1933, as amended, or other federal
        or
        state securities laws (collectively, the “Securities
        Laws”),
        and may be compelled to resort to one or more sales to a restricted group
        of
        purchasers who may be required to agree to acquire the Pledged Securities
        for
        their own account, for investment and not with a view to the distribution
        or
        resale thereof. Each Debtor agrees that sales so made may be at prices and
        on
        terms less favorable than if the Pledged Securities were sold to the public,
        and
        that Agent has no obligation to delay the sale of any Pledged Securities
        for the
        period of time necessary to register the Pledged Securities for sale to the
        public under the Securities Laws. Each Debtor shall cooperate with Agent
        in its
        attempt to satisfy any requirements under the Securities Laws (including,
        without limitation, registration thereunder if requested by Agent) applicable
        to
        the sale of the Pledged Securities by Agent.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      11.  Costs
        and Expenses.
        Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
        incurred in connection with any filing required hereunder, including without
        limitation, any financing statements pursuant to
        the UCC, continuation statements, partial releases and/or termination statements
        related thereto or any expenses of any searches reasonably
        required by the Agent. The Debtors shall also pay all other claims and charges
        which in the reasonable opinion of the
        Agent
        is reasonably likely to prejudice, imperil or otherwise affect the Collateral
        or
        the Security Interests
        therein. The Debtors will also, upon demand, pay to the Agent the amount
        of any
        and all reasonable expenses, including the reasonable fees and expenses of
        its
        counsel and of any experts and agents, which the Agent, for the benefit of
        the
        Secured Parties, may incur in connection with the creation, perfection,
        protection, satisfaction, foreclosure, collection or enforcement of the Security
        Interest and the preparation, administration, continuance, amendment or
        enforcement of this Agreement and pay to the Agent the amount of any and
        all
        reasonable expenses, including the reasonable fees and expenses of its counsel
        and of any experts and agents, which the Agent, for the benefit of the Secured
        Parties,
        and the Secured Parties may incur in connection with (i) the enforcement
        of this
        Agreement, (ii) the custody or preservation of, or the sale of, collection
        from,
        or other realization upon, any of the Collateral, or (iii) the exercise or
        enforcement of any of the rights of the Secured Parties under the Debentures.
        Until so paid, any fees payable hereunder shall be added to the principal
        amount
        of the Debentures and shall bear interest at the Default Rate.

      

      12.  Responsibility
        for Collateral.
        The Debtors assume all liabilities and responsibility in connection with
        all
        Collateral, and the Obligations shall in no way be affected or diminished
        by
        reason of the loss, destruction, damage or theft of any of the Collateral
        or its
        unavailability for any reason. Without limiting the generality of the foregoing,
        (a) neither the Agent nor any Secured Party (i) has any duty (either before
        or
        after an Event of Default) to collect any amounts in respect of the Collateral
        or to preserve any rights relating to the Collateral, or (ii) has any obligation
        to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor
        shall remain obligated and liable under each contract or agreement included
        in
        the Collateral to be observed or performed by such Debtor thereunder. Neither
        the Agent nor any Secured Party shall have any obligation or liability under
        any
        such contract or agreement by reason of or arising out of this Agreement
        or the
        receipt by the Agent or any Secured Party of any payment relating to any
        of the
        Collateral, nor shall the Agent or any Secured Party be obligated in any
        manner
        to perform any of the obligations of any Debtor under or pursuant to any
        such
        contract or agreement, to make inquiry as to the nature or sufficiency of
        any
        payment received by the Agent or any Secured Party in respect of the Collateral
        or as to the sufficiency of any performance by any party under any such contract
        or agreement, to present or file any claim, to take any action to enforce
        any
        performance or to collect the payment of any amounts which may have been
        assigned to the Agent or to which the Agent or any Secured Party may be entitled
        at any time or times.

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      13.  Security
        Interests Absolute.
        All rights of the Secured Parties and all obligations of the Debtors hereunder,
        shall be absolute and unconditional, irrespective of: (a) any lack of validity
        or enforceability of this Agreement, the Debentures or any agreement entered
        into in connection with the foregoing, or any portion hereof or thereof;
        (b) any
        change in the time, manner or place of payment or performance of, or in any
        other term of, all or any of the Obligations, or any other amendment or waiver
        of or any consent to any departure from the Debentures or any other agreement
        entered into in connection with the foregoing; (c) any exchange, release
        or
        nonperfection of any of the Collateral, or any release or amendment or waiver
        of
        or consent to departure from any other
        collateral for, or any guarantee, or any other security, for all or any of
        the
        Obligations; (d) any action by the Secured Parties to obtain, adjust, settle
        and
        cancel in its sole discretion any insurance claims or matters made or arising
        in
        connection with the Collateral; or (e) any other circumstance which might
        otherwise constitute any legal or equitable defense available to a Debtor,
        or a
        discharge of all or any part of the Security Interests granted hereby. Until
        the
        Obligations shall have been paid and performed in full, the rights of the
        Secured Parties shall continue even if the Obligations are barred for any
        reason, including, without limitation, the running of the statute of limitations
        or bankruptcy. Each Debtor expressly waives presentment, protest, notice
        of
        protest, demand, notice of nonpayment and demand for performance. In the
        event
        that at any time any transfer of any Collateral or any payment received by
        the
        Secured Parties hereunder shall be deemed by final order of a court of competent
        jurisdiction to have been a voidable preference or fraudulent conveyance
        under
        the bankruptcy or insolvency laws of the United States, or shall be deemed
        to be
        otherwise due to any party other than the Secured Parties, then, in any such
        event, each Debtor’s obligations hereunder shall survive cancellation of this
        Agreement, and shall not be discharged or satisfied by any prior payment
        thereof
        and/or cancellation of this Agreement, but shall remain a valid and binding
        obligation enforceable in accordance with the terms and provisions hereof.
        Each
        Debtor waives all right to require the Secured Parties to proceed against
        any
        other person or entity
        or to
        apply any Collateral which the Secured Parties may hold at any time, or to
        marshal assets, or to pursue any other remedy. Each Debtor waives any defense
        arising by reason of the application of the statute of limitations to any
        obligation secured hereby.

      

      14.
         Term
        of Agreement.
        This Agreement and the Security Interests shall terminate on the date on
        which
        all payments under the Debentures have been indefeasibly paid in full and
        all
        other Obligations have been paid or discharged; provided, however, that all
        indemnities of the Debtors contained in this Agreement (including, without
        limitation, Annex B hereto) shall survive and remain operative and in full
        force
        and effect regardless of the termination of this Agreement.

      

      15.
         Power
        of Attorney; Further Assurances.

      

      (a)
         Each
        Debtor authorizes the Agent, and does hereby make, constitute and appoint
        the
        Agent and its officers, agents, successors or assigns with full power of
        substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in
        the name of the Agent
        or such Debtor, to, after the occurrence and during the continuance of an
        Event
        of Default, (i) endorse any note, checks, drafts, money orders or other
        instruments of payment (including payments payable under or in respect of
        any
        policy of insurance) in respect of the Collateral that may come into possession
        of the Agent; (ii) to sign and endorse any financing statement pursuant to
        the
        UCC or any invoice, freight or express bill, bill of lading, storage or
        warehouse receipts, drafts against debtors, assignments, verifications and
        notices in connection with accounts, and other documents relating to the
        Collateral; (iii) to pay or discharge taxes, liens, security interests or
        other
        encumbrances at any time levied or placed on or threatened against the
        Collateral; (iv) to demand, collect, receipt for, compromise, settle and
        sue for
        monies due in respect of the Collateral; (v) to transfer any Intellectual
        Property or provide licenses respecting any Intellectual Property; and (vi)
        generally, at the option of the Agent, and at the expense of the Debtors,
        at any
        time, or from time to time, to execute and deliver any and all documents
        and
        instruments and to do all acts and things which the Agent deems necessary
        to
        protect, preserve and realize upon the Collateral and the Security Interests
        granted therein in order to effect the intent of this Agreement and the
        Debentures all as fully and effectually as the Debtors might or could do;
        and
        each Debtor hereby ratifies all that said attorney shall lawfully do or cause
        to
        be done by virtue hereof. This power of attorney is coupled with an interest
        and
        shall be irrevocable for the term of this Agreement and thereafter as long
        as
        any of the Obligations shall be outstanding. The
        designation set forth herein shall be deemed to amend and supersede any
        inconsistent provision in the Organizational Documents or other documents
        or
        agreements to which any Debtor is subject or to which any Debtor is a party.
        Without
        limiting the generality of the foregoing, after the occurrence and during
        the
        continuance of an Event of Default, each Secured Party is specifically
        authorized to execute and file any applications for or instruments of transfer
        and assignment of any patents, trademarks, copyrights or other Intellectual
        Property with the United States Patent and Trademark Office and the United
        States Copyright Office.

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      (b)
         On
        a continuing basis, each Debtor will make, execute, acknowledge, deliver,
        file
        and record, as the case may be, with the proper filing and recording agencies
        in
        any jurisdiction, including, without limitation, the jurisdictions indicated
        on
Schedule
        C
        attached hereto, all such instruments, and take all such action as may
        reasonably be deemed necessary or advisable, or as reasonably requested
        by the Agent, to perfect the Security Interests granted hereunder and otherwise
        to carry out the intent and purposes of this Agreement, or for assuring and
        confirming to the Agent the grant or perfection of a perfected security interest
        in all the Collateral under the UCC.

      

      (c)
         Each
        Debtor hereby irrevocably appoints the Agent as such Debtor’s attorney-in-fact,
        with full authority in the place and instead of such Debtor and in the name
        of
        such Debtor, from time to time in the Agent’s discretion, to take any action and
        to execute any instrument which the Agent may deem necessary or advisable
        to
        accomplish the purposes of this Agreement, including the filing, in its sole
        discretion, of one or more financing or continuation statements and amendments
        thereto, relative to any of the Collateral without the signature of such
        Debtor
        where permitted by law, which financing statements may (but need not) describe
        the Collateral as “all assets” or “all personal property” or words of like
        import, and ratifies all such actions taken by the Agent. This power of attorney
        is coupled with an interest and shall be irrevocable for the term of this
        Agreement and thereafter as long as any of the Obligations shall be
        outstanding.

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      16.  Notices.
        All notices, requests, demands and other communications hereunder shall be
        subject to the notice provision of the Purchase Agreement (as such term is
        defined in the Debentures).

      

      17.  Other
        Security.
        To the extent that
        the Obligations are now or hereafter secured by property other than the
        Collateral or by the guarantee, endorsement or property of any other person,
        firm, corporation or other entity,
        then the Agent
        shall have the right, in its sole discretion, to pursue, relinquish,
        subordinate, modify or take any other action with respect thereto, without
        in
        any way modifying or affecting any of the Secured Parties’ rights and remedies
        hereunder.

      

      18.  Appointment
        of Agent.
        The Secured Parties hereby appoint Midsummer Investment, Ltd. to act as their
        agent (“Midsummer”
        or “Agent”)
        for purposes of exercising any and all rights and remedies of the Secured
        Parties hereunder. Such appointment shall continue until revoked in writing
        by a
Majority
        in Interest, at which time a Majority in Interest
        shall appoint a new Agent, provided that Midsummer may not be removed as
        Agent
        unless Midsummer shall then hold less than $250,000 in principal amount of
        Debentures;
        provided,
        further,
        that such removal may occur only if each of the other Secured Parties shall
        then
        hold not less than an aggregate of $500,000 in principal amount of Debentures.
        The
        Agent shall have the rights, responsibilities and immunities set forth in
        Annex
        B
        hereto.

       

      19.  Miscellaneous.

      

      (a)
         No
        course of dealing between the Debtors and the Secured Parties, nor any failure
        to exercise, nor any delay in exercising, on the part of the Secured Parties,
        any right, power or privilege hereunder or under the Debentures shall operate
        as
        a waiver thereof; nor shall any single or partial exercise of any right,
        power
        or privilege hereunder or thereunder preclude any other or further exercise
        thereof or the exercise of any other right, power or privilege.

      

      (b)
         All
        of the rights and remedies of the Secured Parties with respect to the
        Collateral, whether established hereby or by the Debentures or by any other
        agreements, instruments or documents or by law shall be cumulative and may
        be
        exercised singly or concurrently.

      

      (c)
         This
        Agreement, together with the exhibits and schedules hereto,
        contain the entire understanding of the parties with respect to the subject
        matter hereof and supersede all prior agreements and understandings, oral
        or
        written, with respect to such matters, which the parties acknowledge have
        been
        merged into this Agreement and the exhibits and schedules hereto. No provision
        of this Agreement may be waived, modified, supplemented or amended except
        in a
        written instrument signed, in the case of an amendment, by the Debtors and
        the
        Secured Parties holding 67% or more of the principal amount of the Debentures
        then outstanding or, in the case of a waiver, by the party against whom
        enforcement of any such waived provision is sought. 

      

      (d)
         If
        any term, provision, covenant or restriction of this Agreement is held by
        a
        court of competent jurisdiction to be invalid, illegal, void or unenforceable,
        the remainder of the terms, provisions, covenants and restrictions set forth
        herein shall remain in full force and effect and shall in no way be affected,
        impaired or invalidated, and the parties hereto shall use their commercially
        reasonable efforts to find and employ an alternative means to achieve the
        same
        or substantially the same result as that contemplated by such term, provision,
        covenant or restriction. It is hereby stipulated and declared to be the
        intention of the parties that they would have executed the remaining terms,
        provisions, covenants and restrictions without including any of such that
        may be
        hereafter declared invalid, illegal, void or unenforceable.

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (e)
         No
        waiver of any default with respect to any provision, condition or requirement
        of
        this Agreement shall be deemed to be a continuing waiver in the future or
        a
        waiver of any subsequent default or a waiver of any other provision, condition
        or requirement hereof, nor shall any delay or omission of any party to exercise
        any right hereunder in any manner impair the exercise of any such
        right.

      

      (f)
         This
        Agreement shall be binding upon and inure to the benefit of the parties and
        their successors and permitted assigns. The Company and the Guarantors may
        not
        assign this Agreement or any rights or obligations hereunder without the
        prior
        written consent of each Secured Party (other than by merger). Any Secured
        Party
        may assign any or all of its rights under this Agreement to any Person (as
        defined in the Purchase Agreement) to whom such Secured Party assigns or
        transfers any Obligations, provided such transferee agrees in writing to
        be
        bound, with respect to the transferred Obligations, by the provisions of
        this
        Agreement that apply to the “Secured Parties.”

      

      (g)
         Each
        party shall take such further action and execute and deliver such further
        documents as may be necessary or appropriate in order to carry out the
        provisions and purposes of this Agreement.

      

      (h)
        All questions concerning the construction, validity, enforcement and
        interpretation of this Agreement 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 Debtor agrees that all
        proceedings concerning the interpretations, enforcement and defense of the
        transactions contemplated by this Agreement and the Debentures (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 Debtor 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 Agreement and agrees that such service shall constitute good and
        sufficient service of process and notice thereof. Nothing contained herein
        shall
        be deemed to limit in any way any right to serve process in any manner permitted
        by law. 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 Agreement or the transactions
        contemplated hereby. 

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      (i)
         This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same Agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

      

      (j) All
        Debtors shall jointly and severally be liable for the obligations of each
        Debtor
        to the Secured Parties hereunder.

      

      (k) Each
        Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured
        Parties and their respective partners, members, shareholders, officers,
        directors, employees and agents (and any other persons with other titles
        that
        have similar functions) (collectively, “Indemnitees”)
        from and against any and all losses, claims, liabilities, damages, penalties,
        suits, costs and expenses, of any kind or nature, (including fees relating
        to
        the cost of investigating and defending any of the foregoing) imposed on,
        incurred by or asserted against such Indemnitee in any way related to or
        arising
        from or alleged to arise from this Agreement or the Collateral, except any
        such
        losses, claims, liabilities, damages, penalties, suits, costs and expenses
        which
        result from the gross negligence or willful misconduct of the Indemnitee
        as
        determined by a final, nonappealable decision of a court of competent
        jurisdiction. This indemnification provision is in addition to, and not in
        limitation of, any other indemnification provision in the Debentures, the
        Purchase Agreement (as such term is defined in the Debentures) or any other
        agreement, instrument or other document executed or delivered in connection
        herewith or therewith.

      

      (l) Nothing
        in this Agreement shall be construed to subject Agent or any Secured Party
        to
        liability as a partner in any Debtor or any if its direct or indirect
        subsidiaries that is a partnership or as a member in any Debtor or any of
        its
        direct or indirect subsidiaries that is a limited liability company, nor
        shall
        Agent or any Secured Party be deemed to have assumed any obligations under
        any
        partnership agreement or limited liability company agreement, as applicable, of
        any such Debtor or any if its direct or indirect subsidiaries or otherwise,
        unless and until any such Secured Party exercises its right to be substituted
        for such Debtor as a partner or member, as applicable, pursuant
        hereto.

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      (m)
         To
        the extent that the grant of the security interest in the Collateral and
        the
        enforcement of the terms hereof require the consent, approval or action of
        any
        partner or member, as applicable, of any Debtor or any direct or indirect
        subsidiary of any Debtor or compliance with any provisions of any of the
        Organizational Documents, the Debtors hereby grant such consent and approval
        and
        waive any such noncompliance with the terms of said documents.

      

      [SIGNATURE
        PAGES FOLLOW]

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Security
        Agreement to be duly executed on the day and year first above
        written.

      

      

      CAPITAL
        GROWTH SYSTEMS, INC.

      

      By:__________________________________________
Name:
Title:

       

       

      FNS
        2007, INC.

       

       

      By:__________________________________________
Name:
Title:

       

       

      NEXVU
        TECHNOLOGIES, LLC

       

       

      By:__________________________________________
Name:
Title:

       

       

      20/20
        TECHNOLOGIES, INC.

       

       

      By:__________________________________________
Name:
Title:

       

       

      20/20
        TECHNOLOGIES I, LLC

       

       

      By:__________________________________________
Name:
Title:

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

       

      CENTREPATH,
        INC.

       

       

      By:__________________________________________
Name:
Title:

       

       

      MAGENTA
        NETLOGIC, LIMITED

       

       

      By:__________________________________________
Name:
Title:

       

       

      VANCO
        DIRECT USA, LLC

       

       

      By:__________________________________________
Name:
Title:

      

      

      

      [ADD
        NAME OF NEW SUBS]

      

      

       

      

      

      [SIGNATURE
        PAGE OF HOLDERS FOLLOWS]

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      [SIGNATURE
        PAGE OF HOLDERS TO CGSY SA]

       

      Name
        of Investing Entity: __________________________

       

      Signature
        of Authorized Signatory of Investing entity:
        _________________________

       

      Name
        of Authorized Signatory: _________________________

       

      Title
        of Authorized Signatory: __________________________

       

      [SIGNATURE
        PAGE OF HOLDERS FOLLOWS]

      

      

      

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      ANNEX
        A

      to

      SECURITY

      AGREEMENT

      

      FORM
        OF ADDITIONAL DEBTOR JOINDER

      

      Security
        Agreement dated as of November ___, 2008 made by

      Capital
        Growth Systems, Inc.

      and
        its subsidiaries party thereto from time to time, as Debtors

      to
        and in favor of

      the
        Secured Parties identified therein (the “Security
        Agreement”)

      

      Reference
        is made to the Security Agreement as defined above; capitalized terms used
        herein and not otherwise defined herein shall have the meanings given to
        such
        terms in, or by reference in, the Security Agreement.

      

      The
        undersigned hereby agrees that upon delivery of this Additional Debtor Joinder
        to the Secured Parties referred to above, the undersigned shall (a) be an
        Additional Debtor under the Security Agreement, (b) have all the rights and
        obligations of the Debtors under the Security Agreement as fully and to the
        same
        extent as if the undersigned was an original signatory thereto and (c) be
        deemed
        to have made the representations and warranties set forth therein as of the
        date
        of execution and delivery of this Additional Debtor Joinder. WITHOUT LIMITING
        THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE
        SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL AS MORE FULLY SET FORTH
        IN
        THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY
        TRIAL
        PROVISIONS SET FORTH THEREIN.

      

      Attached
        hereto are supplemental and/or replacement Schedules to the Security Agreement,
        as applicable.

      

      An
        executed copy of this Joinder shall be delivered to the Secured Parties,
        and the
        Secured Parties may rely on the matters set forth herein on or after the
        date
        hereof. This Joinder shall not be modified, amended or terminated without
        the
        prior written consent of the Secured Parties.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in
        the
        name and on behalf of the undersigned.

      

      [Name
        of Additional Debtor]

      

      By:

      Name:

      Title:

      

      Address:

      

      

      

      

      

      Dated:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ANNEX
        B

      to

      SECURITY

      AGREEMENT

      

      THE
        AGENT

      

      1.
        Appointment. The
        Secured Parties (all capitalized terms used herein and not otherwise defined
        shall have the respective meanings provided in the Security Agreement to
        which
        this Annex B is attached (the "Agreement")),
        by their acceptance of the benefits of the Agreement, hereby designate
Midsummer
        Investment Ltd. (“Midsummer”
        or “Agent”)
        as the Agent to act as specified herein and in the Agreement. Each Secured
        Party
        shall be deemed irrevocably to authorize the Agent to take such action on
        its
        behalf under the provisions of the Agreement and any other Transaction Document
        (as such term is defined in the Purchase
        Agreement) and to exercise such powers and to perform such duties hereunder
        and
        thereunder as are specifically delegated to or required of the Agent by the
        terms hereof and thereof and such other powers as are reasonably incidental
        thereto. The Agent may perform any of its duties hereunder by or through
        its
        agents or employees.

      

      2.
        Nature
        of Duties.
        The Agent shall have no duties or responsibilities except those expressly
        set
        forth in the Agreement. Neither the Agent nor any of its partners, members,
        shareholders, officers, directors, employees or agents shall be liable for
        any
        action taken or omitted by it as such under the Agreement or hereunder or
        in
        connection herewith or therewith, be responsible for the consequence of any
        oversight or error of judgment or answerable for any loss, unless caused
        solely
        by its or their gross negligence or willful misconduct as determined by a
        final
        judgment (not subject to further appeal) of a court of competent jurisdiction.
        The duties of the Agent shall be mechanical and administrative in nature;
        the
        Agent shall not have by reason of the Agreement or any other Transaction
        Document a fiduciary relationship in respect of any Debtor or any Secured
        Party;
        and nothing in the Agreement or any other Transaction Document, expressed
        or
        implied, is intended to or shall be so construed as to impose upon the Agent
        any
        obligations in respect of the Agreement or any other Transaction Document
        except
        as expressly set forth herein and therein.

      

      3.
        Lack
        of Reliance on the Agent.
        Independently and without reliance upon the Agent, each Secured Party, to
        the
        extent it deems appropriate, has made and shall continue to make (i) its
        own
        independent investigation of the financial condition and affairs of the Company
        and its subsidiaries in connection with such Secured Party’s investment in the
        Debtors, the creation and continuance of the Obligations, the transactions
        contemplated by the Transaction Documents, and the taking or not taking of
        any
        action in connection therewith, and (ii) its own appraisal of the
        creditworthiness of the Company and its subsidiaries, and of the value of
        the
        Collateral from time to time, and the Agent shall have no duty or
        responsibility, either initially or on a continuing basis, to provide any
        Secured Party with any credit, market or other information with respect thereto,
        whether coming into its possession before any Obligations are incurred or
        at any
        time or times thereafter. The Agent shall not be responsible to the Debtors
        or
        any Secured Party for any recitals, statements, information, representations
        or
        warranties herein or in any document, certificate or other writing delivered
        in
        connection herewith, or for the execution, effectiveness, genuineness, validity,
        enforceability, perfection, collectibility, priority or sufficiency of the
        Agreement or any other Transaction Document, or for the financial condition
        of
        the Debtors or the value of any of the Collateral, or be required to make
        any
        inquiry concerning either the performance or observance of any of the terms,
        provisions or conditions of the Agreement or any other Transaction Document,
        or
        the financial condition of the Debtors, or the value of any of the Collateral,
        or the existence or possible existence of any default or Event of Default
        under
        the Agreement, the Debentures or any of the other Transaction
        Documents.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.
        Certain
        Rights of the Agent.
        The Agent shall have the right to take any action with respect to the
        Collateral, on behalf of all of the Secured Parties. To the extent practical,
        the Agent shall request instructions from the Secured Parties with respect
        to
        any material act or action (including failure to act) in connection with
        the
        Agreement or any other Transaction Document, and shall be entitled to act
        or
        refrain from acting in accordance with the instructions of a
        Majority in Interest; if such instructions are not provided despite the Agent’s
        request therefor, the Agent shall be entitled to refrain from such act or
        taking
        such action, and if such action is taken, shall be entitled to appropriate
        indemnification from the Secured Parties in respect of actions to be taken
        by
        the Agent; and the Agent shall not incur liability to any person or entity
        by
        reason of so refraining. Without limiting the foregoing, (a) no Secured Party
        shall have any right of action whatsoever against the Agent as a result of
        the
        Agent acting or refraining from acting hereunder in accordance with the terms
        of
        the Agreement or any other Transaction Document, and the Debtors shall have
        no
        right to question or challenge the authority of, or the instructions given
        to,
        the Agent pursuant to the foregoing and (b) the Agent shall not be required
        to
        take any action which the Agent believes (i) could reasonably be expected
        to
        expose it to personal liability or (ii) is contrary to this Agreement, the
        Transaction Documents or applicable law.

      

      5.
        Reliance.
        The Agent shall be entitled to rely, and shall be fully protected in relying,
        upon any writing, resolution, notice, statement, certificate, telex, teletype
        or
        telecopier message, cablegram, radiogram, order or other document or telephone
        message signed, sent or made by the proper person or entity, and, with respect
        to all legal matters pertaining to the Agreement and the other Transaction
        Documents and its duties thereunder, upon advice of counsel selected by it
        and
        upon all other matters pertaining to this Agreement and the other Transaction
        Documents and its duties thereunder, upon advice of other experts selected
        by
        it.
        Anything to the contrary notwithstanding, the Agent shall have no obligation
        whatsoever to any Secured Party to assure that the Collateral exists or is
        owned
        by the Debtors or is cared for, protected or insured or that the liens granted
        pursuant to the Agreement have been properly or sufficiently or lawfully
        created, perfected, or enforced or are entitled to any particular
        priority.

      

      6.
        Indemnification.
        To the extent that the Agent is not reimbursed and indemnified by the Debtors,
        the Secured Parties will jointly and severally reimburse and indemnify the
        Agent, in proportion to their initially purchased respective principal amounts
        of Debentures, from and against any and all liabilities, obligations, losses,
        damages, penalties, actions, judgments, suits, costs, expenses or disbursements
        of any kind or nature whatsoever which may be imposed on, incurred by or
        asserted against the Agent in performing its duties hereunder or under the
        Agreement or any other Transaction Document, or in any way relating to or
        arising out of the Agreement or any other Transaction Document except for
        those
        determined by a final judgment (not subject to further appeal) of a court
        of
        competent jurisdiction to have resulted solely from the Agent's own gross
        negligence or willful misconduct. Prior to taking any action hereunder as
        Agent,
        the Agent may require each Secured Party to deposit with it sufficient sums
        as
        it determines in good faith is necessary to protect the Agent for costs and
        expenses associated with taking such action.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.
        Resignation
        by the Agent. 

      

      (a)
        The Agent may resign from the performance of all its functions and duties
        under
        the Agreement and the other Transaction Documents at any time by giving 30
        days'
        prior written notice (as provided in the Agreement) to the Debtors and the
        Secured Parties. Such resignation shall take effect upon the appointment
        of a
        successor Agent pursuant to clauses (b) and (c) below.

      

      (b)
        Upon any such notice of resignation, the Secured Parties, acting by
        a Majority
        in Interest,
        shall appoint a successor Agent hereunder.

      

      (c)
        If a successor Agent shall not have been so appointed within said 30-day
        period,
        the Agent shall then appoint a successor Agent who shall serve as Agent until
        such time, if any, as the Secured Parties appoint a successor Agent as provided
        above. If a successor Agent has not been appointed within such 30-day period,
        the Agent may petition any court of competent jurisdiction or may interplead
        the
        Debtors and the Secured Parties in a proceeding for the appointment of a
        successor Agent, and all fees, including, but not limited to, extraordinary
        fees
        associated with the filing of interpleader and expenses associated therewith,
        shall be payable by the Debtors on demand.

      

      8.
        Rights
        with respect to Collateral.
        Each Secured Party agrees with all other Secured Parties and the Agent (i)
        that
        it shall not, and shall not attempt to, exercise any rights with respect
        to its
        security interest in the Collateral, whether pursuant to any other agreement
        or
        otherwise (other than pursuant to this Agreement), or take or institute any
        action against the Agent or any of the other Secured Parties in respect of
        the
        Collateral or its rights hereunder (other than any such action arising from
        the
        breach of this Agreement) and (ii) that such Secured Party has no other rights
        with respect to the Collateral other than as set forth in this Agreement
        and the
        other Transaction Documents. Upon the acceptance of any appointment as Agent
        hereunder by a successor Agent, such successor Agent shall thereupon succeed
        to
        and become vested with all the rights, powers, privileges and duties of the
        retiring Agent and the retiring Agent shall be discharged from its duties
        and
        obligations under the Agreement. After any retiring Agent’s resignation or
        removal hereunder as Agent, the provisions of the Agreement including this
        Annex
        B shall inure to its benefit as to any actions taken or omitted to be taken
        by
        it while it was Agent.Unassociated Document

     

    
      Exhibit
        10.15

       

      EXHIBIT
        F

       

      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 the purchasers
        signatory (together with their permitted assigns, the “Purchasers”) to that
        certain Securities Purchase Agreement, dated as of the date hereof, between
        Capital
        Growth Systems, Inc.,
        a
        Florida corporation (the “Company”) and the Purchasers. 

       

      WITNESSETH:

       

      WHEREAS,
        pursuant to that certain Securities Purchase Agreement, dated as of the date
        hereof, by and between the Company and the Purchasers (the “Purchase
        Agreement”), the Company has agreed to sell and issue to the Purchasers, and the
        Purchasers have agreed to purchase from the Company the Company’s Original Issue
        Discount Secured
        Convertible Debentures, due seven years following their issuance (the
“Debentures”), 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 Debentures; and 

       

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

       

      1. Definitions.
        Unless otherwise defined herein, terms defined in the Purchase Agreement
        and
        used herein shall have the meanings given to them in the Purchase Agreement.
        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:

       

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

       

      “Obligations”
        means, in addition to all other costs and expenses of collection incurred
        by
        Purchasers 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 the
        Purchasers, including, without limitation, all obligations under this Guarantee,
        the Debentures 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 any of the Purchasers 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 Debentures 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 Debentures 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.
        

      
        
          
          

        

        
          S1-1

          
            

          

        

        
          
          

        

      

      2. Guarantee.

       

      (a) Guarantee.

       

      (i) The
        Guarantors hereby, jointly and severally, unconditionally and irrevocably,
        guarantee to the Purchasers and their respective 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) Anything
        herein or in any other Transaction Document to the contrary notwithstanding,
        the
        maximum liability of each Guarantor hereunder and under the other Transaction
        Documents 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 the Purchasers 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 the Purchasers 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 the Purchasers whole on a monetary
        basis for the Company's failure to perform such Obligations in accordance
        with
        the Transaction Documents. 

       

      (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
        the Purchasers and each Guarantor shall remain liable to the Purchasers for
        the
        full amount guaranteed by such Guarantor hereunder.

      
        
          
          

        

        
          S1-2

          
            

          

        

        
          
          

        

      

      (c) No
        Subrogation.
        Notwithstanding any payment made by any Guarantor hereunder or any set-off
        or
        application of funds of any Guarantor by the Purchasers, no Guarantor shall
        be
        entitled to be subrogated to any of the rights of the Purchasers against
        the
        Company or any other Guarantor or any collateral security or guarantee or
        right
        of offset held by the Purchasers 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 the Purchasers 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 the Purchasers, segregated from other funds of such
        Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
        over
        to the Purchasers in the exact form received by such Guarantor (duly indorsed
        by
        such Guarantor to the Purchasers, if required), to be applied against the
        Obligations, whether matured or unmatured, in such order as the Purchasers
        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 the Purchasers may be rescinded by the Purchasers 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 the Purchasers, and the Purchase Agreement and
        the
        other Transaction Documents and any other documents executed and delivered
        in
        connection therewith may be amended, modified, supplemented or terminated,
        in
        whole or in part, as the Purchasers may deem advisable from time to time,
        and
        any collateral security, guarantee or right of offset at any time held by
        the
        Purchasers for the payment of the Obligations may be sold, exchanged, waived,
        surrendered or released. The Purchasers 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 the
        Purchasers 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 the Purchasers, 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 any other Transaction Document, 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 the Purchasers,
        (b) any
        defense, set-off or counterclaim (other than a defense of payment or performance
        or fraud by Purchasers) which may at any time be available to or be asserted
        by
        the Company or any other Person against the Purchasers, 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,
        the
        Purchasers 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 the Purchasers 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 the
        Purchasers against any Guarantor. For the purposes hereof, “demand” shall
        include the commencement and continuance of any legal
        proceedings.

      
        
          
          

        

        
          S1-3

          
            

          

        

        
          
          

        

      

      (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 the Purchasers 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
        the
        Purchasers without set-off or counterclaim in U.S. dollars at the address
        set
        forth or referred to in the Signature Pages to the Purchase
        Agreement.

       

      3. Representations
        and Warranties.
        Each Guarantor hereby makes the following representations and warranties
        to
        Purchasers 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
        has no subsidiaries other than those identified as such on the Disclosure
        Schedules to the Purchase Agreement. 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.

      
        
          
          

        

        
          S1-4

          
            

          

        

        
          
          

        

      

      (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 the Purchasers
        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 Transaction Documents prior to rendering their advice.
        

       

      4. Covenants.
        

       

      (a) Each
        Guarantor covenants and agrees with the Purchasers 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
        Debentures) is caused by the failure to take such action or to refrain from
        taking such action by such Guarantor. 

       

      (b) So
        long as any of the Obligations are outstanding, unless Purchasers holding
        at
        least 67%
        of the aggregate principal amount of the then outstanding Debentures shall
        otherwise consent in writing, each Guarantor will not directly or indirectly
        on
        or after the date of this Guarantee:

      
        
          
          

        

        
          S1-5

          
            

          

        

        
          
          

        

      

      (i) other
        than Permitted Indebtedness, enter into, create, incur, assume or suffer
        to
        exist any indebtedness for borrowed money of any kind, including but not
        limited
        to, a guarantee, on or with respect to any of its property or assets now
        owned
        or hereafter acquired or any interest therein or any income or profits
        therefrom;

       

      (ii) other
        than Permitted Liens, enter into, create, incur, assume or suffer to exist
        any
        liens of any kind, on or with respect to any of its property or assets now
        owned
        or hereafter acquired or any interest therein or any income or profits
        therefrom;

       

      (iii) amend
        its certificate of incorporation, bylaws or other charter documents so as
        to
        adversely affect any rights of any Purchaser;

       

      (iv) repay,
        repurchase or offer to repay, repurchase or otherwise acquire more than a
        de
        minimis number of shares of its securities or debt obligations; 

       

      (v) pay
        cash dividends on any equity securities of the Company, provided that nothing
        contained herein shall prohibit the payment of intracompany dividends in
        the
        ordinary course of business consistent with past practice to any parent owning
        100% of the equity securities of the Guarantor;

       

      (vi) enter
        into any transaction with any Affiliate of the Guarantor which would be required
        to be disclosed in any public filing of the Company with the Commission,
        unless
        such transaction is made on an arm’s-length basis and expressly approved by a
        majority of the disinterested directors of the Company (even if less than
        a
        quorum otherwise required for board approval); or

       

      (vii) enter
        into any agreement with respect to any of the foregoing.

       

      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 the Purchasers holding
        67% or more in principal amount of the Debentures then outstanding.

       

      (b) Notices.
        All notices, requests and demands to or upon the Purchasers 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.
        The Purchasers 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 Transaction
        Documents or Event of Default. No failure to exercise, nor any delay in
        exercising, on the part of the Purchasers, 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 the Purchasers of any right or remedy hereunder on any one occasion
        shall not be construed as a bar to any right or remedy which the Purchasers
        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.

      
        
          
          

        

        
          S1-6

          
            

          

        

        
          
          

        

      

      (d) Enforcement
        Expenses; Indemnification.

       

      (i) Each
        Guarantor agrees to pay, or reimburse the Purchasers 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 and
        the
        other Transaction Documents to which such Guarantor is a party, including,
        without limitation, the reasonable fees and disbursements of counsel to the
        Purchasers.

       

      (ii) Each
        Guarantor agrees to pay, and to save the Purchasers 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 the Purchasers 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
        Purchase Agreement.

       

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

       

      (e) Successor
        and Assigns.
        This Guarantee shall be binding upon the successors and assigns of each
        Guarantor and shall inure to the benefit of the Purchasers 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 the Purchasers.

       

      (f) Set-Off.
        Each Guarantor hereby irrevocably authorizes the Purchasers at any time and
        from
        time to time while an Event of Default under any of the Transaction Documents
        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 the Purchasers
        to
        or for the credit or the account of such Guarantor, or any part thereof in
        such
        amounts as the Purchasers may elect, against and on account of the obligations
        and liabilities of such Guarantor to the Purchasers hereunder and claims
        of
        every nature and description of the Purchasers against such Guarantor, in
        any
        currency, whether arising hereunder, under the Purchase Agreement, any other
        Transaction Document or otherwise, as the Purchasers may elect, whether or
        not
        the Purchasers have made any demand for payment and although such obligations,
        liabilities and claims may be contingent or unmatured. The Purchasers shall
        notify such Guarantor promptly of any such set-off and the application made
        by
        the Purchasers 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 the Purchasers under this Section are in addition to other rights and
        remedies (including, without limitation, other rights of set-off) which the
        Purchasers 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. 

      
        
          
          

        

        
          S1-7

          
            

          

        

        
          
          

        

      

      (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 and the other Transaction Documents represent the agreement
        of
        the Guarantors and the Purchasers with respect to the subject matter hereof
        and
        thereof, and there are no promises, undertakings, representations or warranties
        by the Purchasers relative to subject matter hereof and thereof not expressly
        set forth or referred to herein or in the other Transaction
        Documents.

       

      (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.

       

      (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) the
        Purchasers have no fiduciary relationship with or duty to any Guarantor arising
        out of or in connection with this Guarantee or any of the other Transaction
        Documents, and the relationship between the Guarantors, on the one hand,
        and the
        Purchasers, 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 by the other Transaction Documents or
        otherwise exists by virtue of the transactions contemplated hereby among
        the
        Guarantors and the Purchasers. 

      
        
          
          

        

        
          S1-8

          
            

          

        

        
          
          

        

      

      (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 Purchase
        Agreement, the Debentures and the other Transaction Documents. 

       

      (o) Seniority.
        Except as set forth in Schedule 3.1(ff) of the Purchase Agreement, the
        Obligations of each of the Guarantors hereunder rank senior in priority to
        any
        other Indebtedness (as defined in the Purchase Agreement) of such
        Guarantor.
        

       

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

      
        
          
          

        

        
          S1-9

          
            

          

        

        
          
          

        

      

      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: _______________________

                	 	 

        

      

      

      
        	
                VANCO
                  DIRECT USA, LLC

                 

              
	
                By:__________________________________________

                Name:

                Title:

              

        
          
            
            

          

          
            S1-10

            
              

            

          

          
            
            

          

        

      

       

      ANNEX
        1 TO SUBSIDIARY GUARANTEE

       

      ASSUMPTION
        AGREEMENT, dated as of ______________________, made by
        ______________________________, a ______________ corporation (the “Additional
        Guarantor”), in favor of the Purchasers 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 the
        Purchasers have entered into a Securities Purchase Agreement, dated as of
        November __, 2008 (as amended, supplemented or otherwise modified from time
        to
        time, the “Purchase Agreement”); 

       

      WHEREAS,
        in connection with the Purchase Agreement, 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 the Purchasers;

       

      WHEREAS,
        the Purchase Agreement 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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]