Document:

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

       

      
        	
                No.

              	
                   
                  Capstone-2    

              	 	
                As
                  of March [__], 2008

              
	 	
                Chicago,
                  Illinois

              

      

      

      CAPITAL
        GROWTH SYSTEMS, INC.

      WARRANT
        TO PURCHASE

       

      UP
        TO 2,660,000 SHARES OF COMMON STOCK

       

      Void
        after March [__], 2013, Unless Extended

       

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

       

      1. Number
        of Warrant Shares; Exercise Price.
        This
        Warrant shall evidence the right of the Holder to purchase up to 2,660,000
        Warrant Shares (which number of Warrant Shares will remain fixed and is not
        subject to any adjustment except as provided in Section
        5
        below)
        at an initial exercise price per Warrant Share of $0.73 per share (the “Exercise
        Price”), subject to adjustment as provided in Section
        5 below.

       

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

       

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

       

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

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      3. Exercise
        Date; Expiration.
        Subject
        to the terms hereof, this Warrant may be exercised by the Holder at any time
        or
        from time to time before the Expiration Date (the “Exercise
        Period”).

       

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

       

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

       

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

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

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

       

      (c) Reclassification
        or Reorganization.
        If the
        Warrant Shares issuable upon the exercise of this Warrant shall be changed
        into
        the same or different number of shares of any class or classes of stock,
        whether
        by capital reorganization, reclassification or otherwise (other than a split,
        subdivision or stock dividend provided for in Section 5(a)
        above or
        a combination of shares provided for in Section 5(b)
        above,
        or a reorganization, merger or consolidation provided for in Section 5(d)
        below,
        then and in each such event the Holder shall be entitled to receive upon
        the
        exercise of this Warrant the kind and amount of shares of stock and other
        securities and property receivable upon such reorganization, reclassification
        or
        other change, to which a holder of the number of Warrant Shares issuable
        upon
        the exercise of this Warrant would have received if this Warrant had been
        exercised immediately prior to such reorganization, reclassification or other
        change, all subject to further adjustment as provided herein.

       

      (d) Corporate
        Transaction.
        If at
        any time or from time to time there shall be a Corporate Transaction of the
        Company, the Company shall provide to the Holder not less than thirty (30)
        days
        advance written Notice of such Corporate Transaction. In the event that as
        a
        result of the Corporate Transaction the Company shall become a wholly owned
        subsidiary of an entity not wholly owned by the existing shareholders and
        existing warrant holders and option holders of the Company immediately prior
        to
        the Corporate Transaction, then effective as of the date of such Corporate
        Transaction, this Warrant shall lapse. 

       

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

       

      6. Cashless
        Exercise.
        In all
        events, Holder shall have the right to effect a cashless exercise of the
        shares
        subject to this Warrant pursuant to the following process.

       

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

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      
        	 	
                X
                  =

              	
                Y
                  (A - B)

              	 
	 	 	
                A

              	 

      

      

      
        	 	
                Where:

              	
                X
                  =

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

              
	 	 	
                Y
                  =

              	
                the
                  number of Converted Warrant Shares;

              
	 	 	
                A
                  =

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

              
	 	 	
                B
                  =

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

              

      

      

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

       

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

       

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

       

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

       

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

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

      10. Miscellaneous.

       

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

       

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

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

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

       

      
        	 	 	
                CAPITAL
                  GROWTH SYSTEMS, INC.

              
	 	 	 
	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	 	 	 
	 	 	 
	 	 	 
	 	 	
                HOLDER
                  NAME:

              	
                Capstone
                  Investments, Inc.

              
	 	 	 
	 	 	
                Address:

              	
                4660
                  La Jolla Village Dr. #1040

              
	
                1076904_2.DOC

              	 	 	
                San
                  Diego, Cal. 92122

              

      

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      EXHIBIT
        A

       

      FORM
        OF SUBSCRIPTION OF CAPSTONE INVESTMENTS 2008 WARRANT

       

      (To
        be signed only on exercise of Warrant)

       

      
        	
                To:

              	
                CAPITAL
                  GROWTH SYSTEMS, INC.

              

      

       

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

       

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

       

      

      
        	 	 	 
	 	
                (Name)

              	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
                (Address)

              	 

      

      

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

       

      

      
        	
                Dated:

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

              
	 	 	 
	 	 	 
	 	 	
                (Print
                  Name)

              
	 	 	 
	 	 	 
	 	 	
                Address:

              	 
	 	 	 	 
	 	
                Holder
                  hereby represents and warrants that at the time of exercise of
                  Warrant,
                  Holder is an Accredited Investor, as defined under Rule 501 of
                  Regulation
                  D of the Securities Act of 1933.

              
	 
	 

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
        B

       

      FORM
        OF ASSIGNMENT OF CAPSTONE 2008 WARRANT

       

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

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

       

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

       

      
        	
                Name:

              	 
	 	
                (Please
                  Print)

              
	 
	
                Address:

              	 
	 	
                (Street)

              
	 	 
	 	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              
	 
	
                Date:

              	 
	 
	 
	
                Holder’s
                  Signature:

              	 
	 
	
                Holder’s
                  Address:

              	 
	 	
                (Street)

              
	 	 
	 	
                (City)

              	
                (State)

              	
                (Zip
                  Code)

              

      

      

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

      

      

      

      
        	 	
                Holder
                  hereby represents and warrants that Holder is an Accredited Investor,
                  as
                  defined under Rule 501 of Regulation D of the Securities Act of
                  1933.

              
	 
	 

      

      1076904_3THE
      SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER HEREOF FOR ITS
      OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR CAUSING TO BE MADE
      A
      PUBLIC DISTRIBUTION OF ALL OR ANY PORTION THEREOF. SUCH SECURITIES HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND
      MAY
      NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, EXCEPT PURSUANT TO
      AN
      EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
      EXEMPTION FROM REGISTRATION UNDER SUCH ACT.

     

    
      	
              No.

            	
              Capstone-1

            	 	
              As
                of November 8, 2007

            
	 	
              Chicago,
                Illinois

            

    

    

    CAPITAL
      GROWTH SYSTEMS, INC.

    FORM
      OF CGSI TERM NOTE WARRANT TO PURCHASE

     

    $0.50
      PER COMMON SHARE ON 

     

    Void
      after December 31, 2012, Unless Extended

     

    Capital
      Growth Systems, Inc., a Florida corporation (the “Company”), hereby certifies
      that, for value received, CapStone Investments (including any successors and
      assigns, “Holder”), is entitled, subject to the terms set forth below, to
      purchase from the Company at any time or from time to time before 5:00 PM
      Central time, on December 31, 2012 (the “Expiration Date”), fully paid and
      nonassessable shares of the Company’s $0.0001 par value Common Stock (the
“Warrant Shares”) under the terms set forth herein

     

    1. Number
      of Warrant Shares; Exercise Price.
      This
      Warrant shall evidence the right of the Holder to purchase up to 2,500,000
      Warrant Shares (which number of Warrant Shares will remain fixed and is not
      subject to any adjustment except as provided in Section
      5
      below)
      at an initial exercise price per Warrant Share of $0.50 per share (the “Exercise
      Price”), subject to adjustment as provided in Section
      5 below.

     

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

     

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

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. Exercise
      Date; Expiration.
      Subject
      to the terms hereof, this Warrant may be exercised by the Holder at any time
      or
      from time to time before the Expiration Date (the “Exercise
      Period”).

     

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

     

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

     

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

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

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

     

    (c) Reclassification
      or Reorganization.
      If the
      Warrant Shares issuable upon the exercise of this Warrant shall be changed
      into
      the same or different number of shares of any class or classes of stock, whether
      by capital reorganization, reclassification or otherwise (other than a split,
      subdivision or stock dividend provided for in Section 5(a)
      above or
      a combination of shares provided for in Section 5(b)
      above,
      or a reorganization, merger or consolidation provided for in Section 5(d)
      below,
      then and in each such event the Holder shall be entitled to receive upon the
      exercise of this Warrant the kind and amount of shares of stock and other
      securities and property receivable upon such reorganization, reclassification
      or
      other change, to which a holder of the number of Warrant Shares issuable upon
      the exercise of this Warrant would have received if this Warrant had been
      exercised immediately prior to such reorganization, reclassification or other
      change, all subject to further adjustment as provided herein.

     

    (d) Corporate
      Transaction.
      If at
      any time or from time to time there shall be a Corporate Transaction of the
      Company, the Company shall provide to the Holder not less than thirty (30)
      days
      advance written Notice of such Corporate Transaction. In the event that as
      a
      result of the Corporate Transaction the Company shall become a wholly owned
      subsidiary of an entity not wholly owned by the existing shareholders and
      existing warrant holders and option holders of the Company immediately prior
      to
      the Corporate Transaction, then effective as of the date of such Corporate
      Transaction, this Warrant shall lapse. 

     

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

     

    6. Registration
      Rights and Cashless Exercise.
      The
      Company shall have the obligation to file a piggyback registration statement
      with respect to the shares underlying this Warrant with respect to any
      subsequent registration statement filed by the Company, subject to the caveat
      that should the investor(s) requiring such registration statement prohibit
      the
      registration of the shares underlying this Warrant, then in such event the
      shares underlying this Warrant shall not be subject to the requirement that
      they
      be registered and provided further that should the SEC require as a condition
      to
      the declaration of effectiveness of such registration statement that the number
      of shares registrable in such registration statement be less than the full
      amount sought for such registration statement, then priority for registration
      shall be given first to the Investors’ shares subject to the registration
      statement and next pro rata to the shares represented by this Warrant and any
      other shares subject to piggyback registration rights with the Company (pro
      rata
      if not all of such shares can be registered). Should the Company elect to file
      a
      registration statement covering some or all of the shares underlying this
      Warrant, the Holder of this Warrant as a condition to such registration shall
      provide such information as is necessary to effect a registration of the shares.
      In all events, Holder shall have the right to effect a cashless exercise of
      the
      shares subject to this Warrant pursuant to the following process.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

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

     

    
      	
              X
                =

            	
              Y
                (A - B)

            
	 	
              A

            

    

    

    
      	
              Where:

            	
              X
                =

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

            
	 	 	 
	 	
              Y
                =

            	
              the
                number of Converted Warrant Shares;

            
	 	 	 
	 	
              A
                =

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

            
	 	 	 
	 	
              B
                =

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

            

    

    

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

     

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

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

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

     

    10. Miscellaneous.

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

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

     

    
      	 	 	
              CAPITAL
                GROWTH SYSTEMS, INC.

            
	 	 	 
	 	 	 
	 	 	
              By:

            	 
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 

    

     

    
      	 	 	 
	 	 	
              HOLDER
                NAME:

            	
              Capstone
                Investments, Inc.

            

    

     

      
        	
                 

              	
                 

              	
                Address:

              	
                4660
                  La Jolla Village Dr. #1040

              
	
                 

              	
                 

              	
                 

              	
                San
                  Diego, Cal. 92122

              

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

         

      

    

    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION OF CAPSTONE INVESTMENTS $0.50 WARRANT

     

    (To
      be signed only on exercise of Warrant)

     

    
      	
              To:

            	
              CAPITAL
                GROWTH SYSTEMS, INC.

            

    

     

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

     

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

    

    
      	 	 	 
	 	
              (Name)

            	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
              (Address)

            	 

    

    

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

    

    
      	
              Dated:

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

            
	 	 	 
	 	 	 
	 	 	
              (Print
                Name)

            
	 	 	 
	 	 	 
	 	 	
              Address:

            	 

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

     

    FORM
      OF ASSIGNMENT OF $0.50 WARRANT

     

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

     

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

     

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

     

    
      	
              Name:

            	 
	 	
              (Please
                Print)

            
	 
	
              Address:

            	 
	 	
              (Street)

            
	 	 
	 	
              (City)

            	
              (State)

            	
              (Zip
                Code)

            
	 
	
              Date:

            	 
	 
	 
	
              Holder’s
                Signature:

            	 
	 
	
              Holder’s
                Address:

            	 
	 	
              (Street)

            
	 	 
	 	
              (City)

            	
              (State)

            	
              (Zip
                Code)

            

    

    

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

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