AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT
TO
AGREEMENT
AND PLAN OF MERGER
This
Amendment to Agreement and Plan of Merger (this “Amendment”) is made as of
November 30, 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”), XXXX XXXXXXX (“Xxxxxxx”) and XXXXX X. XXXXX
(“Xxxxx”), (Xxxxxxx and Xxxxx 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
parties entered into an Extension Agreement dated as of October 12, 2006 (the
“Extension Agreement”), pursuant to which the parties, among other things,
agreed to extend the Closing Date to December 11, 2006 in exchange for a certain
non-refundable, fully earned extension payment, an increase to the Merger
Consideration and the Cash Consideration payable at Closing, an acknowledgment
concerning priority of the Global Capacity Merger transaction over other
transactions and certain other agreements as set forth therein.
C. On
November 29, 2006, counsel for Global Capacity sent Capital Growth a notice
alleging certain breaches under the Extension Agreement (the “Default
Notice”).
D. The
parties desire to amend the Merger Agreement and the Extension Agreement, as
set
forth herein, and to provide for withdrawal of the Default Notice effective
upon
occurrence of both the (i) execution of this Amendment; and (ii) the wire
transfer of $200,000 to Xxxxx Xxxxx and Xxxx Xxxxxxx, as set forth
herein.
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto do hereby agree as follows:
1. Amendment
to Merger Agreement
and Extension Agreement.
The
Merger Agreement and the Extension Agreement shall be, and they hereby are,
amended as follows:
(A) The
Cash
Consideration payable at Closing shall be, and it hereby is, increased to
$5,200,000.
(B) Section
3
of the Extension Agreement is modified to provide that the Global Capacity
transaction shall not have priority over the pending merger transaction
involving CentrePath, Inc., a Delaware corporation (“CentrePath”). This
modification shall not affect Global Capacity’s priority rights with respect to
other transactions.
(C) Capital
Growth shall pay Global Capacity a $200,000, non-refundable, fully earned
extension payment on or before Friday, December 1, 2006 at 12:00 p.m. CST by
wire transfer in accordance with the wire transfer instructions attached hereto
as Exhibit
A.
This
payment shall be non-refundable and fully earned, but shall be applied toward
the $5,200,000 Cash Consideration due at Closing.
(D) Section
5
of the Extension Agreement is modified to delete the words “to date through
October 11, 2006”.
(E) Effective
upon both payment of the extension payment, as set forth in Section (C) above,
and execution of this Amendment, the Default Notice shall be withdrawn and
retracted. Global Capacity and the Shareholders hereby waive failures, through
the date hereof, to provide weekly status updates regarding fund raising efforts
by Capital Growth.
2. Miscellaneous.
(A) Counterparts.
This
Amendment may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute
one
and the same instrument.
(B) Effectiveness.
This
Amendment shall become effective on the date on which all of the parties hereto
shall have signed a copy hereof (whether the same or different copies), and
the
extension payment has been made.
(C) Headings
Descriptive; Capitalized Terms.
The
headings of the several sections and subsections of this Amendment are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Amendment. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement,
as amended.
(D) Severability.
In the
event that any provision of this Amendment is deemed to be invalid by reason
of
the operation of law, or by reason of the interpretation placed thereon by
any
court, this Amendment shall be construed as not containing such provision and
the invalidity of such provision shall not effect the validity of any other
provision hereof, and any and all other provisions hereof which otherwise are
lawful and valid shall remain in full force and effect.
(E) Full
Force and Effect.
All of
the terms and conditions of the Merger Agreement and Extension Agreement not
hereby amended remain in full force and effect.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the parties hereto have each executed and delivered this
Amendment as of the day and year first above written.
CAPITAL
GROWTH SYSTEMS, INC.
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By: |
/s/
Xxx
Xxxxxxxxx
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Name: |
Xxx
Xxxxxxxxx
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Title: |
Executive
Vice President
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GLOBAL
CAPACITY MERGER SUB, INC.
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By: |
/s/
Xxx Xxxxxxxxx
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Name: |
Xxx
Xxxxxxxxx
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Title: |
Executive
Vice President
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GLOBAL
CAPACITY GROUP, INC.
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By: | /s/ Xxxxx X. Xxxxx | ||
Name: | Xxxxx X. Xxxxx | ||
Title: | President |
/s/
Xxxx Xxxxxxx
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XXXX
XXXXXXX
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/s/
Xxxxx X. Xxxxx
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XXXXX
X. XXXXX
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JOINDER
The
undersigned, being the spouses of the Shareholders, hereby join in the execution
of this Amendment for purposes of consenting to the transactions hereunder
to
the extent such consent is required by any community property laws.
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