AMENDMENT
TO
AGREEMENT AND PLAN OF
MERGER
This Amendment to Agreement and Plan of Merger
(this “Amendment”) is made as of December 11, 2006
by and among CAPITAL GROWTH SYSTEMS, INC., a Florida corporation
(“Capital Growth”), GLOBAL CAPACITY MERGER SUB, INC., a
Texas corporation (“Global Capacity Mergeco”), GLOBAL
CAPACITY GROUP, INC., a Texas corporation (“Global
Capacity”), JOHN ABRAHAM (“Abraham”) and DAVID P.
WALSH (“Walsh”), (Abraham and Walsh are hereinafter
collectively referred to as the “Shareholders”), under
the following circumstances:
R E C I T A L
S
A. The parties
hereto entered into an Agreement and Plan of Merger dated as of
October 6, 2006 (the “Merger Agreement”), pursuant to
which Capital Growth agreed to acquire Global Capacity as part of a
reverse triangular merger under which Global Capacity Mergeco will
merge with and into Global Capacity, with Global Capacity
continuing as the surviving corporation (the
“Merger”).
B. The Merger
Agreement provides that the Shareholders are eligible to receive
certain Contingent Consideration if certain Annualized Gross
Revenue and Annualized Gross Margin thresholds are
satisfied.
C. At the
option of Capital Growth, the Second Period Contingent
Consideration may be paid, in whole or in part, in Capital Growth
Common Stock (the “Transaction Shares”).
D. The Merger
Agreement provides that the Transaction Shares shall be entitled to
registration rights on a parri passu basis with the registration
rights granted to the investors in the private offering and/or
financing to be effected by Capital Growth prior to the Closing
Date (the “Investors”).
E. The parties
desire to amend the Merger Agreement to clarify that it is not the
intent of Section 10.1 of the Merger Agreement to entitle
Shareholders to participate in the same registration in which the
Investors participate, but to participate in the Capital Growth
registration statement that next follows the issuance of the
Transaction Shares, which registration statement will, in any
event, be filed within 90 days after the
issuance of the Transaction Shares.
NOW, THEREFORE, in consideration of
the
