2009 SUB DEBT CONSENT, WAIVER AND AMENDMENT AGREEMENT

THIS 2009 SUB DEBT CONSENT, WAIVER AND AMENDMENT AGREEMENT (the “ Agreement ”) , dated as of July 31, 2009, is entered into by and among Capital Growth Systems, Inc., a Florida corporation (the “ Company ”), and the persons identified as “Holders” on the signature pages hereto (the “ Holders ”).  Defined terms not otherwise defined herein shall have the meanings set forth in the March Purchase Agreement (as defined below).

WHEREAS, pursuant to a   Securities Purchase Agreement, dated March 11, 2008 (the “ March Purchase Agreement ”), among the Company and the purchasers from the Company of an aggregate of $19,000,000 in principal amount of Variable Rate Secured Convertible Debentures of the Company (the “ March Debentures ”), and such purchasers were issued warrants exercisable for shares of Common Stock (the “ March Warrants ”); the March Debentures and March Warrants were reissued as original issue discount debentures effective November 19, 2008 in connection with a Waiver, Consent, Amendment and Exchange Agreement as of such date (the “November Waiver, Consent, Amendment and Exchange Agreement”) , and with such July Debentures being hereinafter sometimes referred to as the “ Amended and Restated March Debentures ,” and with all transaction documents associated with the March Purchase Agreement as amended by the November Waiver, Consent, Amendment and Exchange Agreement being hereinafter referred to as the “ March Transaction Documents .”

WHEREAS , pursuant to a Securities Purchase Agreement, dated November 19, 2008 (the “ November Purchase Agreement” ), among the Company and the purchasers from the Company of an aggregate of $14,891,250 in aggregate principal amount of original issue discount secured convertible debentures with an initial subscription amount of $9,025,000 (the “November Debentures”) , such purchasers were issued the November Debentures and warrants exercisable for shares of Common Stock (the “ November Warrants ”), with all transaction documents associated with the November Purchase Agreement being the “ November Transaction Documents .”

WHEREAS , pursuant to a Securities Purchase Agreement of even date herewith in the form attached as Exhibit A hereto, including all exhibits thereto (the “ July Purchase Agreement ”) among the Company and the purchasers identified on the signature pages thereto (collectively, the “ July Purchasers ”), the July Purchasers will be purchasing up to $10,500,000 in aggregate principal amount of Original Issue Discount Secured Convertible Debentures due, subject to the terms therein, due May 30, 2011 (the “ July Debentures ” together with warrants to purchase shares of Common Stock (the offer and sale of such July Debentures and warrants pursuant to the July Purchase Agreement are hereafter referred to as the “ July Financing ”); Aequitas Capital Management, Inc. or its successor in interest is named as “ Collateral Agent ” for the holders of the July Debentures pursuant to the Security Agreement attached as an exhibit to the July Purchase Agreement, and all the transaction documents associated with the July Financing are hereinafter sometimes referred to as the “ July Transaction Documents ;” and

WHEREAS , the Company has adopted a Vendor Payment Plan to be administered and modified by time to time by the Company with input from the Collateral Agent.  As part of the Vendor Payment Plan, up to $2,500,000 of obligations of the Company shall be exchanged with creditors of the Company for debentures (“ VPP Debentures” ) showing a cash subscription amount on a dollar for dollar basis equal to the preceding exchanged obligations, and with a 65% OID factor increasing the principal amount of the VPP Debentures accordingly, which VPP Debentures shall be substantially similar to the November Debentures, shall be subject to a security agreement appointing Aequitas Capital Management, Inc. as collateral agent, with the VPP Debentures to be on a pari passu basis with the November Debentures and the Other Debentures, and the holders thereof shall have warrant coverage comparable to the warrants issued pursuant to the November Debentures, all as more fully set forth in the form of purchase agreement (“ VPP Purchase Agreement ,” with the financing thereof being the “ VPP Financing ” and the purchasers of the VPP Debentures being the “ VPP Purchasers” ), a copy of which has been made available for review upon request of the other Holders.

WHEREAS, the July Purchasers are making their investment contingent upon, among other things, the due execution of the Holders counterparty hereto of this Consent, Waiver and Amendment Agreement, and the establishment by the Company of the Vendor Payment Plan.

WHEREAS , pursuant to a Loan and Security Agreement by and among the Company and its Subsidiaries and ACF CGS, L.L.C., as Collateral Agent for itself and the other lenders party thereto (the “ Senior Lender Agreement ”) dated November 19, 2008 in the form attached as Exhibit B to the November Consent, Waiver, Amendment and Exchange Agreement (“ Senior Lender ”), Senior Lender loaned to the Company $8,500,000 pursuant to a secured promissory note, presently due 24 months following its issuance (“ Senior Lender Note, ” with the loan secured thereby being the “ Senior Loan ”) (the issuance of the Senior Lender Note pursuant to the Senior Lender Agreement as amended from time to time is hereafter referred to as the “ Senior Lender Financing ”).  Senior Lender has delivered a notice of default with respect to the Senior Lender Financing and is willing to waive the defaults set forth therein upon the due execution and closing a modification of the terms of the Senior Lender Agreement as set forth in Exhibit B attached (the “ Senior Lender Financing Modification ”), and Senior Lender has also required that the July Purchasers execute a form of intercreditor agreement subordinating the July Debentures to the Senior Loan (“ Senior Lender/July Debenture Intercreditor Agreement”) and that the VPP Purchasers execute a form of intercreditor agreement subordinating the Junior Debentures to the Senior Loan (“ Senior Lender/VPP Debenture Intercreditor Agreement” ); copies of the Senior Lender Financing Modification and the two new intercreditor agreements referenced above are all attached as Exhibit B.

NOW THEREFORE , for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Holder hereby agrees as follows:

1.            Waivers and Consents .  Subject to the terms and conditions hereunder, each Holder hereby waives compliance with the Company’s obligation to provide, and the Holder’s right to receive those items enumerated in this Section 1.  Subject to the terms and conditions hereunder, each Holder hereby amends and waives the restrictions set forth in Sections 4.13(a) of the March Purchase Agreement and Sections 7(a) and 7(b) of the Amended and Restated March Debentures  and Sections 4.13(a) of the November Purchase Agreement and Sections 7(a) and 7(b) of the November Debentures with respect to the July Financing and VPP Financing and agrees that such restrictions shall not apply to the issuance of the July Debentures and warrants pursuant to the July Financing or the VPP Debentures and warrants.  Further, subject to the terms and conditions hereunder, each Holder hereby amends and waives the restrictions applicable to him, her or it, set forth in Sections 7(a) and 7(b) of the Amended and Restated March Debentures with respect to the Senior Lender Financing Modifications and the July Financing.  In addition, subject to the terms and conditions hereunder, each Holder hereby waives the restrictions set forth in Section 7(a) of the Amended and Restated March Debentures and November Debentures respectively, with respect to the issuance of the Vendor Payment Plan or the taking of any actions in connection therewith satisfactory to the Collateral Agent for the Debentures.  Lastly, subject to the terms hereunder, each Holder hereby waives the existence of any circumstance accrued through the date of closing of the July Financing which may be deemed to constitute an “event of default” under or breach of any of the March Transaction Documents or the November Transaction Documents, to the extent applicable to that Holder or due to an “event of default” with respect to any other purchaser or his or its assigns under the March Transaction Documents or November Transaction Documents, in consideration for the issuance to that Holder of his, her or its pro rata share of the $700,000 in principal amount of July Debentures, as set forth on Schedule 2.1 to the July Purchase Agreement, the terms of which are incorporated by reference herein and made a part hereof as if fully rewritten.  Each Holder further consents to the taking by the Company of all actions contemplated to be taken in the July Transaction Documents (and waives any right to declare a default under the November Transactions Documents or March Transaction Documents with respect to the taking of any of the transactions contemplated therein), and to the amendment of the Amended and Restated March Transaction Documents and November Transaction Documents as set forth in Section 2 of this Agreement; execution of this Agreement shall be deemed to constitute counterpart execution of the July Transaction Documents by each holder of Amended and Restated March Debentures or November Debentures as they relate to the allocation of the portion of the Schedule 2.1 (of the July Purchase Agreement) ownership in the July Debentures (and corresponding Warrants)  to the Holder executing this Agreement.  Each of the Holders signatory hereto consents to the entry by the Company into the Senior Lender Financing Modification, as well as to the existence of the Senior Lender/July Debenture Intercreditor Agreement and the Senior Lender/VPP Debenture Intercreditor Agreement.  Each of the Holders signatory hereto acknowledges and agrees that the effective time of this Agreement shall be as of a time immediately prior to the initial closing of the July Financing and the VPP Financing so that it is acknowledged and agreed that:

(a)           the July Financing and VPP Financing constitute Exempt Issuances for purposes of the Holders’ March Transaction Documents and November Transaction Documents; and

(b)           the amendments set forth in Section 2 below are amendments to the March Transaction Documents and November Transaction Documents duly approved.

2.            Amendments and Other Agreements .

(a)            Amended and Restated March Debentures and November Debentures .  Effective upon the initial closing of the July Purchase Agreement and the execution of this Agreement by the Holders holding not less than 67% of the outstanding principal amount of: (i) the Amended and Restated March Debentures; and (ii) the November Debentures, then:

       (A)         each of the following defined terms in the Amended and Restated March Debentures and the November Debentures shall be amended and restated to be identical to the following defined terms set forth in the July Debentures attached hereto as part of Exhibit A, and the terms of which are incorporated by reference herein and made a part hereof as if fully rewritten: “March Purchase Agreement;” “March Debentures;” “Equity Conditions;” “Exempt Issuance; “Other Debentures;” “November Debentures;” “November Purchase Agreement;” “Permitted Indebtedness;” “Senior Debt;” “67% Majority;” “Trading Market.” &ldq