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                                                                    EXHIBIT 10.2

                               ITC/\DELTACOM, INC.

           CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND
           RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
          OF SERIES B-[  ] CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
              QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

   ITC/\DeltaCom, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to authority conferred upon the board of directors of the
Corporation (the "Board of Directors") by the Corporation's Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors is authorized to issue preferred
stock of the Corporation in one or more series, and the Board of Directors has
duly approved and adopted the following resolution on               , 200  (the
"Resolution"):

     RESOLVED that, pursuant to the authority vested in the Board of
  Directors by its Certificate of Incorporation, the Board of Directors
  hereby creates, authorizes and provides for the issuance of a series of the
  preferred stock of the Corporation, par value $.01 per share (such
  preferred stock designated as the "Series B-[  ] Cumulative Convertible
  Preferred Stock"), consisting of         shares and having the powers,
  preferences and relative, participating, optional and other special rights
  and the qualifications, limitations and restrictions thereof that are set
  forth in the Certificate of Incorporation and in this Resolution as
  follows:

   1. Number and Designation.           shares of the preferred stock of the
Corporation shall constitute a series designated as "Series B-[  ] Cumulative
Convertible Preferred Stock" (the "Series B-[  ] Preferred Stock").

   2. Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meaning indicated.

   "Affiliate" with respect to a Person shall have the meaning set forth in
Rule 12b-2 under the Exchange Act and shall include an officer or director of
such Person.

   "Applicable Conversion Price" means $      , subject to adjustment from time
to time pursuant to Section 8(g).

   "beneficial ownership" of securities of any Person shall have the meaning
set forth in Rule 13d-3 under the Exchange Act.

   "Benefit Plans" means the ITC/\DeltaCom, Inc. 1997 Stock Option Plan, the
ITC/\DeltaCom, Inc. Director Stock Option Plan, the ITC Holding Company, Inc.
Amended and Restated Stock Option Plan, the ITC Holding Company, Inc.
NonEmployee Director Stock Option Plan and the ITC/\DeltaCom, Inc. Employee
Profit Sharing & 401(k) Plan.

   "Board of Directors" means the board of directors of the Corporation.

   "Business Day" means any day except Saturday, Sunday and any legal holiday
or a day on which banking institutions in New York City, New York or the State
of Georgia generally are authorized or required by law or other governmental
actions to close.


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   "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.

   "Change of Control Event" means any of the following events: (i) the event
specified in clause (i)(b) of the definition of "Change of Control" contained
in the Indenture, dated as of June 3, 1997, as amended from time to time,
between the Corporation and United States Trust Company of New York, as
Trustee; (ii) the event specified in clause (i) of the definition of "Change of
Control" contained in the Indenture, dated as of March 3, 1998, as amended from
time to time, between the Corporation and United States Trust Company of New
York, as Trustee; (iii) the event specified in clause (i) of the definition of
"Change of Control" contained in the Indenture, dated as of November 5, 1998,
as amended from time to time, between the Corporation and United States Trust
Company of New York, as Trustee; and (iv) the event specified in clause (a) of
the definition of "Change of Control" contained in the Senior Credit Agreement.

   "Common Stock" means any shares of the common stock, par value $.01 per
share, of the Corporation now or hereafter authorized to be issued, and any and
all securities of any kind whatsoever of the Corporation which may be exchanged
for or reclassified or converted into Common Stock, any and all securities of
any kind whatsoever of the Corporation which may be issued on or after the date
hereof in respect of, in exchange for, or upon reclassification or conversion
of shares of Common Stock pursuant to a merger, consolidation, stock split,
reclassification, stock dividend, recapitalization of the Corporation or
otherwise.

   "Common Stock Deemed Outstanding" means the number of shares of Common Stock
actually outstanding, plus the maximum total number of shares of Common Stock
issuable upon the exercise of any then outstanding Warrants or issuable upon
conversion of any then outstanding Series A Preferred Stock or Series B
Preferred Stock, whether or not such Warrants, Series A Preferred Stock or
Series B Preferred Stock are actually exercisable, convertible or exchangeable
at such time, without duplication.

   "Convertible Notes" means the 4 1/2% Convertible Subordinated Notes due 2006
of the Corporation.

   "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

   "Initial Holder" means ITC Holding Company, Inc.

   "Initial Issue Date" means the date on which the Corporation issues and
sells shares of the Series B-[ ] Preferred Stock pursuant to the Investment
Agreement.

   "Investment Agreement" means the Investment Agreement, dated as of February
27, 2001, as amended from time to time, between the Corporation and the Initial
Holder.

   "Issue Date" means           , 200 . [the date of issuance and sale of the
Series B-[  ] Preferred Stock].

   "Liquidation Preference" with respect to a share of Series B-[  ] Preferred
Stock means, as at any date, the sum of (x) $1,000.00 plus (y) any Special
Amount with respect to such share plus (z) an amount equal to any accrued and
unpaid Preferred Dividends (as defined in Section 4(a)) with respect to such
share from the last Dividend Payment Date through such date.

   "Market Price" means, with respect to the Common Stock, on any given day,
(i) the price of the last trade, as reported on the Nasdaq National Market, not
identified as having been reported late to such system, or

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(ii) if the Common Stock is so traded, but not so quoted, the average of the
last bid and ask prices, as those prices are reported on the Nasdaq National
Market, or (iii) if the Common Stock is not listed or authorized for trading
on the Nasdaq National Market or any comparable system, the average of the
closing bid and ask prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time in good
faith by the Board of Directors for that purpose. If the Common Stock is not
listed and traded in a manner that the quotations referred to above are
available for the period required hereunder, the Market Price per share of
Common Stock shall be deemed to be the fair value per share of such security
as determined in good faith by the Board of Directors.

   "Nasdaq Marketplace Rules" means the rules, regulations and interpretations
of the National Association of Securities Dealers, Inc. and The Nasdaq Stock
Market, Inc. in effect from time to time and applicable to the Corporation.

   "Original Purchase Price" means, with respect to a share of Series B-[  ]
Preferred Stock, $1,000.00.

   "outstanding," when used with reference to shares of Common Stock, means
issued shares, excluding shares held by a subsidiary of the Corporation.

   "Person" means any corporation, limited liability company, partnership,
trust, organization, association, other entity or individual.

   "Senior Credit Agreement" means the Credit Agreement, dated as of April 5,
2000, as amended from time to time, among the Corporation, as Parent,
Interstate FiberNet, Inc., as Borrower, the Subsidiary Guarantors named
therein, the Initial Lenders named therein, Morgan Stanley Senior Funding,
Inc., as Administrative Agent, Morgan Stanley & Co. Incorporated, as
Collateral Agent, Bank of America, N.A., as Syndication Agent, and Goldman
Sachs Credit Partners L.P., as Documentation Agent.

   "Series A Designation" means the Certificate of Designation for the Series
A Preferred Stock.

   "Series A Preferred Stock" means the Series A Convertible Preferred Stock,
par value $.01 per share, of the Corporation.

   "Series B Certificates of Designation" means, collectively, this
Certificate of Designation and the certificates of designation with respect to
each other series of the Series B Preferred Stock.

   "Series B Preferred Stock" means, collectively, the Series B-[  ] Preferred
Stock created hereby and each other series of preferred stock, par value $.01
per share, of the Corporation designated by the Board of Directors as "Series
B-[  ] Cumulative Convertible Preferred Stock" which is issued pursuant to the
Investment Agreement.

   "Special Amount" with respect to a share of Series B-[  ] Preferred Stock
means an amount equal to all dividends and other amounts which have become
payable in respect of such share under Section 4(a) but which have not been
paid. The Special Amount with respect to any such share shall be reduced by
the amount of any such dividends and other amounts actually paid in respect of
such share under Section 4(c).

   "Warrants" means the common stock purchase warrants issued by the
Corporation pursuant to the Investment Agreement.

   3. Rank. The Series B-[  ] Preferred Stock shall, with respect to dividend
rights and rights on liquidation, dissolution and winding-up, rank (i) senior
to the Common Stock and to each other class of Capital Stock of the
Corporation or series of preferred stock of the Corporation established
hereafter by the Board of Directors, the terms of which do not expressly
provide that such class or series ranks senior to, or on a parity with, the
Series B Preferred Stock as to dividend rights and rights on liquidation,
dissolution and winding-up of

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the Corporation, and senior to the Series A Preferred Stock with respect to
dividend rights (collectively referred to, together with all classes of Common
Stock of the Corporation and with the Series A Preferred Stock (solely in
respect of dividend rights), as "Junior Securities"); (ii) on a parity with the
Series A Preferred Stock (solely with respect to rights on liquidation,
dissolution and winding-up of the Corporation), each other series of Series B
Preferred Stock and each class of Capital Stock of the Corporation or series of
preferred stock of the Corporation established hereafter by the Board of
Directors in accordance with Section 9(d), the terms of which expressly provide
that such class or series shall rank on a parity with the Series B Preferred
Stock as to dividend rights or rights on liquidation, dissolution and winding-
up (collectively referred to as "Parity Securities"); and (iii) junior to each
class of Capital Stock of the Corporation or series of preferred stock of the
Corporation established hereafter by the Board of Directors in accordance with
Section 9(d), the terms of which expressly provide that such class or series
shall rank senior to the Series B Preferred Stock as to dividend rights and
rights on liquidation, dissolution and winding-up of the Corporation
(collectively referred to as "Senior Securities").

   4. Dividends.

   (a) The holders of shares of Series B-[  ] Preferred Stock shall be entitled
to receive with respect to each share of Series B-[  ] Preferred Stock, when,
as and if declared by the Board of Directors, out of funds legally available
for the payment of dividends, dividends at the rate of 8% per annum of the sum
of the Original Purchase Price plus any Special Amount with respect to such
share (the "Preferred Dividend"). Preferred Dividends on a share of Series B-
[  ] Preferred Stock shall accrue and shall be cumulative whether or not
declared from the date of issue of such share of Series B-[  ] Preferred Stock
and shall be payable quarterly in arrears on April 15, July 15, October 15 and
January 15 of each year (unless such day is not a Business Day, in which event
such dividends shall be payable on the next succeeding Business Day) (each
such date being a "Dividend Payment Date" and each such quarterly period being
a "Dividend Period"), commencing on the Dividend Payment Date for the first
full Dividend Period occurring after the Issue Date. Each such dividend shall
be payable to the holders of record of shares of the Series B-[  ] Preferred
Stock as they appear on the stock register of the Corporation at the close of
business on the corresponding Record Date. As used herein, the term "Record
Date." means, with respect to the dividend payable on April 15, July 15,
October 15 and January 15, respectively, of each year, the preceding March 31,
June 30, September 30 and December 31, or such other date, not more than 60
days or less than 10 days preceding the payment dates thereof, as shall be
fixed as the record date by the Board of Directors. Notwithstanding the
foregoing provisions of this Section 4(a), so long as any shares of Series B-
[  ] Preferred Stock and any shares of any other series of Series B Preferred
Stock are outstanding, no dividends shall be declared or paid or set aside for
payment upon any shares of any series of Series B Preferred Stock for any
current Dividend Period pursuant to Section 4(a) of the Series B Certificates
of Designation unless such dividends are (i) declared and paid in full, or
declared and a sum sufficient for such payment is set aside for payment in
full, of all such dividends on all series of Series B Preferred Stock, or (ii)
declared and paid ratably, or declared and a sum sufficient for such payment is
set aside for payment ratably, on all series of Series B Preferred Stock in
proportion to the respective amounts of dividends accumulated and unpaid with
respect to all series of Series B Preferred Stock for such current Dividend
Period.

   (b) The amount of Preferred Dividends payable on the initial Dividend
Payment Date, or in respect of any period shorter or longer than a full
Dividend Period, on the Series B-[  ] Preferred Stock shall be computed on the
basis of twelve 30-day months and a 360-day year. No interest, or sum or money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series B-[  ] Preferred Stock that may be in arrears.

   (c) Accrued Special Amounts for any past Dividend Periods may be declared
and paid on any subsequent Dividend Payment Date to holders of record on the
corresponding Record Date.

   (d) In the sole discretion of the Corporation, any Preferred Dividend may be
paid (i) in cash, (ii) in shares of Series B-[  ] Preferred Stock or (iii) in a
combination of cash and shares of Series B-[  ] Preferred

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Stock. Each share of Series B-[  ] Preferred Stock issued in payment of a
Preferred Dividend shall be valued at, solely for purposes of determining the
number of shares of Series B-[  ] Preferred Stock to be issued as a dividend,
the Original Purchase Price and shall, upon issuance, be duly and validly
issued, fully paid and non-assessable and not subject to preemptive rights. If
any such Preferred Dividend would result in a fractional share of Series B-[ ]
Preferred Stock, the Corporation, in its sole discretion, may either pay such
fractional share or round such fractional share up to the nearest whole share
of Series B-[ ] Preferred Stock. Payment of a Preferred Dividend in shares of
Series B-[  ] Preferred Stock shall be made by delivering certificates
evidencing such shares to the holders of the Series B-[  ] Preferred Stock in
such denominations as each such holder may request at such holder's address as
it shall appear on the stock register of the Corporation.

   (e) So long as any shares of Series B-[  ] Preferred Stock are outstanding,
no dividend, except as described in the last sentence of Section 4(f) and
except as described in the next succeeding sentence, shall be declared or paid
or set apart for payment on any Parity Securities, nor shall any Parity
Securities be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any Parity Securities) by the Corporation (except by conversion
into or exchange for Parity Securities or Junior Securities), unless in each
case all Special Amounts have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof is set apart for such
payment on the Series B-[  ] Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of the dividend on, or the date
of redemption, purchase, or acquisition for consideration of, such Parity
Securities. When Special Amounts are not paid in full or a sum sufficient for
such payment is not set apart, as aforesaid, all Special Amounts and additional
amounts declared upon shares of the Series B-[  ] Preferred Stock and all
dividends and additional amounts declared upon any other Parity Securities
shall be declared ratably in proportion to the respective amounts of Special
Amounts and additional amounts accumulated and unpaid on the Series B-[  ]
Preferred Stock and dividends and additional amounts accumulated and unpaid on
such Parity Securities.

   (f) So long as any shares of the Series B-[  ] Preferred Stock are
outstanding, no dividends shall be declared or paid or set apart for payment
and no other distribution shall be declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (any
such dividend, distribution, redemption, purchase or acquisition being
hereinafter referred to as a "Junior Securities Distribution") for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any Junior Securities) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities),
unless in each case (i) all Special Amounts and additional amounts on all
outstanding shares of the Series B-[  ] Preferred Stock and accrued and unpaid
dividends and additional amounts on any other Parity Securities shall have been
paid or set apart for payment for all past Dividend Periods with respect to the
Series B-[  ] Preferred Stock and all past dividend periods with respect to
such Parity Securities and (ii) sufficient funds shall have been paid or set
apart for the payment of the dividend for the current Dividend Period with
respect to the Series B-[  ] Preferred Stock and the current dividend period
with respect to such Parity Securities. Notwithstanding anything in this
Certificate of Designation to the contrary, the Corporation may declare and pay
dividends on Parity Securities which are payable solely in additional shares
of, or by the increase in the liquidation value of, Parity Securities or on
Junior Securities which are payable in additional shares of, or by the increase
in the liquidation value of, Junior Securities, as applicable, or redeem,
purchase or otherwise acquire Junior Securities in exchange for Junior
Securities, and Parity Securities in exchange for Parity Securities or Junior
Securities.

   (g) So long as any shares of Series B-[  ] Preferred Stock are outstanding,
if the Corporation pays a dividend in cash or other property on the Common
Stock, other than a dividend in shares of Capital Stock, then at the same time
the Corporation shall declare and pay a dividend on each share of Series B-[  ]
Preferred Stock in an amount equal to the dividend which would otherwise have
been declared and paid with respect to the Common Stock issuable upon
conversion of Series B-[  ] Preferred Stock if all of the outstanding Series B-
[  ] Preferred Stock had been converted immediately prior to the record date
for such dividend, or, if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividend are to be determined.

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   5. Liquidation Preference.

   (a) In the event of any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, after payment or distribution of
the assets of the Corporation (whether capital or surplus) shall be made to or
set apart for the holders of Senior Securities, and before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of Junior Securities, the holders
of shares of Series B-[  ] Preferred Stock shall be entitled to receive an
amount in cash equal to the greater of (x) the aggregate Liquidation
Preferences of the shares of Series B-[  ] Preferred Stock as of the date of
liquidation, or (y) the aggregate amount that would have been received with
respect to the shares of Common Stock if the Series B-[  ] Preferred Stock had
been converted to Common Stock immediately prior to such liquidation,
dissolution or winding-up. If, upon any liquidation, dissolution or winding-up
of the Corporation, the assets of the Corporation, or proceeds thereof, shall
be insufficient to pay in full the aforesaid amounts under clause (x) of the
preceding sentence and liquidating payments on all Parity Securities, then such
assets, or proceeds thereof, shall be distributed among the shares of Series B-
[  ] Preferred Stock and all such other Parity Securities ratably in accordance
with the respective amounts that would be payable on such shares of Series B-
[  ] Preferred Stock and any such other Parity Securities if all amounts
payable thereon were paid in full. Any amounts distributed with respect to the
Series B-[  ] Preferred Stock pursuant to this Section 5(a) shall be allocated
pro rata among the shares of Series B-[  ] Preferred Stock. For the purposes of
Section 5, neither the sale, conveyance, exchange or transfer (for cash, shares
of capital stock, securities or other consideration) of all or substantially
all of the property or assets of the Corporation nor the consolidation or
merger of the Corporation with or into one or more other entities shall be
deemed to be a liquidation, dissolution or winding-up of the Corporation.

   (b) Subject to the rights of the holders of any Parity Securities, after
payment shall have been made in full to the holders of Series B-[  ] Preferred
Stock, as provided in Section 5(a), any other series or class or classes of
Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to
be paid or distributed, and the holders of the Series B-[  ] Preferred Stock
and any Parity Securities (other than the Series A Preferred Stock, to the
extent provided in the Series A Designation) shall not be entitled to share
therein.

   6. Redemption.

   (a) Other than redemption of outstanding shares of capital stock of the
Corporation pursuant to Section 4.4 of the Certificate of Incorporation, no
shares of Series B-[  ] Preferred Stock shall be redeemable by the Corporation
prior to the fifth anniversary of the Issue Date. On and after the fifth
anniversary of the Issue Date, to the extent the Corporation shall have funds
legally available for such payment, and subject to the rights of the holders
pursuant to Section 8, the Corporation may redeem at its option shares of
Series B-[  ] Preferred Stock, at any time in whole or from time to time in
part, at a redemption price per share in cash equal to the Liquidation
Preference as of the date fixed for redemption, without interest.

   (b) On the tenth anniversary of the Issue Date, the Corporation shall redeem
all outstanding shares of Series B-[  ] Preferred Stock, if any, at a
redemption price per share in cash equal to the Liquidation Preference as of
the date fixed for redemption, without interest.

   (c) Except as reissued in compliance with Section 9(e), shares of Series B-
[  ] Preferred Stock which have been issued and reacquired by the Corporation
in any manner, including shares purchased or redeemed, shall (upon compliance
with any applicable provisions of the laws of the State of Delaware) be retired
and have the status of authorized and unissued shares of the class of preferred
stock of the Corporation undesignated as to series and may be redesignated and
reissued as part of any series of the preferred stock of the Corporation;
provided that no such issued and reacquired shares of Series B-[  ] Preferred
Stock shall be reissued or sold as Series B Preferred Stock.

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   (d) If the Corporation is unable or shall fail to discharge its obligation
to redeem outstanding shares of Series B-[  ] Preferred Stock pursuant to
Section 6(b) (the "Scheduled Redemption Obligation"), the Scheduled Redemption
Obligation shall be discharged as soon as the Corporation is able to discharge
such Scheduled Redemption Obligation. If and so long as any Scheduled
Redemption Obligation with respect to any shares of outstanding Series B-[  ]
Preferred Stock shall not be fully discharged, the Corporation shall not (i)
redeem, purchase or otherwise acquire any Parity Securities or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities or (ii) declare or make any Junior Securities
Distribution or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Junior
Securities.

   7. Procedure for Redemption.

   (a) In the event that fewer than all the outstanding shares of Series B-[  ]
Preferred Stock eligible to be redeemed are to be redeemed, in the case of
Section 6(a), the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded up to the nearest whole share).

   (b) In the event the Corporation shall redeem shares of Series B-[  ]
Preferred Stock pursuant to Section 6(a), notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less than 30 days nor
more than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed at such holder's address as such address appears on the
stock register of the Corporation; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving of
notice for the redemption of any share of Series B-[  ] Preferred Stock to be
redeemed except as to the holder to whom the Corporation has failed to give
such notice or except as to the holder whose notice was defective. Each such
notice shall state: (i) the date fixed for redemption; (ii) the number of
shares of Series B-[  ] Preferred Stock to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number of shares to be
redeemed from such holder; (iii) the redemption price; (iv) the place or places
where certificates representing such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
shall cease to accrue on such redemption date.

   (c) Notice having been mailed as aforesaid, if applicable, from and after
the date fixed for redemption, dividends on the shares of Series B-[  ]
Preferred Stock so called for redemption shall cease to accrue, and all rights
of the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price and except the right to
convert shares so called for redemption prior to the close of business on the
last Business Day immediately preceding the date fixed for such redemption)
shall cease. Upon surrender in accordance with such notice, if applicable, of
the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.

   8. Conversion.

   (a) The following conversion rights of the Series B-[  ] Preferred Stock
shall be subject in all respects to the provisions of this Section 8, including
Section 8(h). The holders of shares of Series B-[  ] Preferred Stock shall have
the right, at any time in whole and from time to time in part, at such holders'
option, to convert any or all outstanding shares (and fractional shares) of
Series B-[  ] Preferred Stock held by such holders into fully paid and non-
assessable shares of Common Stock. At any time and from time to time, each
outstanding share of Series B-[  ] Preferred Stock shall be convertible into a
number of shares of Common Stock equal to the Liquidation Preference of such
share of Series B-[  ] Preferred as of the date of conversion divided by the
Applicable Conversion Price for such share of Series B-[  ] Preferred Stock.
Upon issuance as a Preferred Dividend pursuant to Section 4(d), each share of
Series B-[ ] Preferred Stock so issued shall have the same Applicable
Conversion

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Price as each then outstanding share of Series B-[ ] Preferred Stock.
Notwithstanding any call for redemption pursuant to Section 6(a), the right to
convert shares so called for redemption shall terminate at the close of
business on the last Business Day immediately preceding the date fixed for
such redemption unless the Corporation shall default in making payment of the
amount payable upon such redemption.

   (b) (i) In order to exercise the conversion right, the holder of the shares
   of Series B-[  ] Preferred Stock to be converted shall surrender the
   certificate representing such shares at the principal executive offices of
   the Corporation, with a written notice of election to convert completed and
   signed, specifying the number of shares to be converted. Unless the shares
   issuable on conversion are to be issued in the same name as the name in
   which such shares of Series B-[  ] Preferred Stock are registered, each
   share surrendered for conversion shall be accompanied by instruments of
   transfer, in form satisfactory to the Corporation, duly executed by the
   holder or the holder's duly authorized attorney, and an amount sufficient
   to pay any transfer or similar tax.

     (ii) As promptly as practicable after the surrender by the holder of the
   certificates for shares of Series B-[  ] Preferred Stock as aforesaid, the
   Corporation shall issue and shall deliver to such holder, or on the
   holder's written order to the holder's transferee, (x) a certificate or
   certificates for the whole number of shares of Common Stock issuable upon
   the conversion of such shares in accordance with the provisions of this
   Section 8, (y) any cash adjustment pursuant to Section 8(f), and (z) in the
   event of a conversion in part, a certificate or certificates for the whole
   number of shares of Series B-[  ] Preferred Stock not being so converted.

     (iii) Each conversion of shares of Series B-[  ] Preferred Stock pursuant
   to Section 8(a) shall be deemed to have been effected immediately prior to
   the close of business on the date on which the certificates for shares of
   Series B-[  ] Preferred Stock shall have been surrendered and such notice
   received by the Corporation as aforesaid, and the Person in whose name or
   names any certificate or certificates for shares of Common Stock shall be
   issuable upon such conversion shall be deemed to have become the holder of
   record of the shares of Common Stock represented thereby at such time on
   such date and such conversion shall be into a number of whole shares of
   Common Stock in respect of the shares of Series B-[  ] Preferred Stock
   being converted as determined in accordance with this Section 8 at such
   time on such date. All shares of Common Stock delivered upon conversion of
   the Series B-[  ] Preferred Stock shall upon delivery be duly and validly
   issued, fully paid and non-assessable and not subject to any preemptive
   rights. Upon the surrender of certificates representing the shares of
   Series B-[  ] Preferred Stock to be converted, the shares to be so
   converted shall no longer be deemed to be outstanding and all rights of a
   holder with respect to such shares surrendered for conversion shall
   immediately terminate except the right to receive the Common Stock and
   other amounts payable pursuant to this Section 8 and a certificate or
   certificates representing the shares of Series B-[  ] Preferred Stock not
   converted.

   (c) (i) Upon delivery to the Corporation by a holder of shares of Series B-
   [  ] Preferred Stock of a notice of election to convert, the right of the
   Corporation to redeem such shares of Series B-[  ] Preferred Stock shall
   terminate, regardless of whether a notice of redemption has been mailed as
   aforesaid.

     (ii) If a holder of Series B-[  ] Preferred Stock delivers to the
  Corporation a certificate therefor and a notice of election to convert, the
  Series B-[  ] Preferred Stock to be converted shall cease to accrue
  dividends pursuant to Section 4 but shall continue to be entitled to
  receive pro rata dividends for the period from the last Dividend Payment
  Date to the date of delivery of the notice of election to convert in
  preference to and in priority over any dividends on any Junior Securities.

     (iii) Except as provided above and in Section 8(g), the Corporation
  shall make no payment or adjustment for accrued and unpaid dividends on
  shares of Series B-[  ] Preferred Stock, whether or not in arrears, on
  conversion of such shares or for dividends theretofore paid on the shares
  of Common Stock.

   (d) (i) The Corporation covenants that it shall at all times reserve and
   keep available, free from preemptive rights, such number of its authorized
   but unissued shares of Common Stock as shall be required for the purpose of
   effecting conversions of the Series B-[  ] Preferred Stock.

                                       8
<PAGE>

     (ii) Prior to the delivery of any securities which the Corporation shall
  be obligated to deliver upon conversion of the Series B-[  ] Preferred
  Stock, the Corporation shall comply with all applicable federal and state
  laws and regulations which require action to be taken by the Corporation.

   (e) The Corporation shall pay any and all documentary stamp or similar issue
   or transfer taxes payable in respect of the issue or delivery of shares of
   Common Stock on conversion of the Series B-[  ] Preferred Stock pursuant
   hereto; provided that the Corporation shall not be required to pay any tax
   which may be payable in respect of any transfer involved in the issue or
   delivery of shares of Common Stock in a name other than that of the holder
   of the Series B-[  ] Preferred Stock to be converted, and no such issue or
   delivery shall be made unless and until the person requesting such issue or
   delivery has paid to the Corporation the amount of any such tax or has
   established, to the satisfaction of the Corporation, that such tax has been
   paid.

   (f) No fractional shares of Common Stock shall be issued upon the conversion
of the Series B-[ ] Preferred Stock. If the conversion of any shares of Series
B-[  ] Preferred Stock would result in a fractional share of Common Stock, the
Corporation, in its sole discretion, may (i) round such fractional share up to
the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash
adjustment in respect of such fractional share in an amount equal to such
fractional share multiplied by the Market Price per share of Common Stock on
the Business Day next preceding the date on which such shares of Series B-[  ]
Preferred Stock are deemed to have been converted.

   (g) In order to prevent dilution of the conversion rights granted under this
Section 8, the Applicable Conversion Price shall be subject to adjustment from
time to time pursuant to this Section 8(g). In the event that any adjustment of
the Applicable Conversion Price as required herein results in a fraction of a
cent, such Applicable Conversion Price shall be rounded up to the nearest cent.

     (i) Adjustment of Applicable Conversion Price and Number of Shares Upon
  Issuance of Common Stock. Except as otherwise provided in Sections
  8(g)(iii), 8(g)(iv) and 8(g)(v), if and whenever on or after the Issue Date
  the Corporation issues or sells, or in accordance with Section 8(g)(ii) is
  deemed to have issued or sold, any shares of Common Stock for no
  consideration or for a consideration per share (calculated as set forth in
  Section 8(g)(ii)) less than the then Applicable Conversion Price in effect
  on the date of issuance or sale (or deemed issuance or sale) of such Common
  Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance,
  the Applicable Conversion Price shall be reduced to a price determined by
  multiplying the Applicable Conversion Price in effect immediately prior to
  the Dilutive Issuance by a fraction, (A) the numerator of which is an
  amount equal to the sum of (x) the total number of shares of Common Stock
  Deemed Outstanding immediately prior to the Dilutive Issuance, plus (y) the
  quotient of the aggregate consideration, calculated as set forth in Section
  8(g)(ii), received or receivable by the Corporation upon such Dilutive
  Issuance divided by the then Applicable Conversion Price in effect
  immediately prior to the Dilutive Issuance, and (B) the denominator of
  which is the total number of shares of Common Stock Deemed Outstanding
  immediately after the Dilutive Issuance.

    (ii) Effect on Applicable Conversion Price of Certain Events. For
  purposes of determining the adjusted Applicable Conversion Price under
  Section 8(g)(i), the following provisions shall be applicable:

       (A) Issuance of Rights or Options. If the Corporation in any manner
    issues or grants any warrants, rights or options, whether or not
    immediately exercisable, to subscribe for or to purchase Common Stock,
    or other securities convertible into or exchangeable for Common Stock
    ("Convertible Securities") (such warrants, rights and options to
    purchase Common Stock or Convertible Securities are hereinafter referred
    to as "Options"), and the price per share for which Common Stock is
    issuable upon the exercise of such Options is less than the then
    Applicable Conversion Price in effect on the date of issuance or grant
    of such Options, then the maximum total number of shares of Common Stock
    issuable upon the exercise of all such Options shall, as of the date of
    the issuance or grant of such Options, be deemed to be outstanding and
    to have been issued

                                       9
<PAGE>

    and sold by the Corporation for such price per share. For purposes of
    the preceding sentence, the "price per share for which Common Stock is
    issuable upon the exercise of such Options" is determined by dividing
    (i) the total amount, if any, received or receivable by the Corporation
    as consideration for the issuance or granting of all such Options, plus
    the minimum aggregate amount of additional consideration, if any,
    payable to the Corporation upon the exercise of all such Options, plus,
    in the case of Convertible Securities issuable upon the exercise of
    such Options, the minimum aggregate amount of additional consideration
    payable upon the conversion or exchange thereof at the time such
    Convertible Securities first become convertible or exchangeable, by
    (ii) the maximum total number of shares of Common Stock issuable upon
    the exercise of all such Options (assuming full conversion of
    Convertible Securities, if applicable). No further adjustment to the
    Applicable Conversion Price shall be made upon the actual issuance of
    such Common Stock upon the exercise of such Options or upon the
    conversion or exchange of Convertible Securities issuable upon exercise
    of such Options.

       (B) Issuance of Convertible Securities. If the Corporation in any
    manner issues or sells any Convertible Securities, whether or not
    immediately convertible (other than where such Convertible Securities
    are issuable upon the exercise of Options for which an adjustment to
    the Applicable Conversion Price is made pursuant to Section
    8(g)(ii)(A)) and the price per share for which Common Stock is issuable
    upon such conversion or exchange is less than the then Applicable
    Conversion Price in effect on the date of issuance of such Convertible
    Securities, then the maximum total number of shares of Common Stock
    issuable upon the conversion or exchange of all such Convertible
    Securities shall, as of the date of the issuance of such Convertible
    Securities, be deemed to be outstanding and to have been issued and
    sold by the Corporation for such price per share. For the purposes of
    the preceding sentence, the "price per share for which Common Stock is
    issuable upon such conversion or exchange" is determined by dividing
    (i) the total amount, if any, received or receivable by the Corporation
    as consideration for the issuance or sale of all such Convertible
    Securities, plus the minimum aggregate amount of additional
    consideration, if any, payable to the Corporation upon the conversion
    or exchange thereof at the time such Convertible Securities first
    become convertible or exchangeable, by (ii) the maximum total number of
    shares of Common Stock issuable upon the conversion or exchange of all
    such Convertible Securities. No further adjustment to the Applicable
    Conversion Price shall be made upon the actual issuance of such Common
    Stock upon conversion or exchange of such Convertible Securities, and
    if any such issuance or sale of such Convertible Securities is made
    upon exercise of any Options for which adjustments of the Applicable
    Conversion Price had been or are to be made pursuant to other
    provisions of this Section 8(g), no further adjustment of the
    Applicable Conversion Price shall be made by reason of such issuance or
    sale.

       (C) Change in Option Price or Conversion Rate. If there is a change
    at any time in (i) the amount of additional consideration payable to
    the Corporation upon the exercise of any Options; (ii) the amount of
    additional consideration, if any, payable to the Corporation upon the
    conversion or exchange of any Convertible Securities; or (iii) the rate
    at which any Convertible Securities are convertible into or
    exchangeable for Common Stock (other than under or by reason of
    provisions designed to protect against dilution), the Applicable
    Conversion Price in effect at the time of such change shall be
    readjusted to the Applicable Conversion Price which would have been in
    effect at such time if such Options or Convertible Securities still
    outstanding had provided for such changed additional consideration or
    changed conversion rate, as the case may be, at the time initially
    granted, issued or sold.

       (D) Treatment of Expired Options and Unexercised Convertible
    Securities. If, in any case, the total number of shares of Common Stock
    issuable upon exercise of any Option or upon conversion or exchange of
    any Convertible Securities is not, in fact, issued and the rights to
    exercise such Option or to convert or exchange such Convertible
    Securities shall have expired or terminated, the Applicable Conversion
    Price then in effect shall be readjusted to the Applicable Conversion
    Price

                                       10
<PAGE>

    which would have been in effect at the time of such expiration or
    termination if such Option or Convertible Securities, to the extent
    outstanding immediately prior to such expiration or termination (other
    than in respect of the actual number of shares of Common Stock issued
    upon exercise or conversion thereof), had never been issued.

       (E) Calculation of Consideration Received. If any Common Stock,
    Options or Convertible Securities are issued, granted or sold for cash,
    the consideration received therefor for purposes of this Section 8(g)
    shall be the amount received by the Corporation therefor before
    deduction of commissions, underwriting discounts or allowances or other
    expenses paid or incurred by the Corporation in connection with such
    issuance, grant or sale. In case any Common Stock, Options or
    Convertible Securities are issued or sold for a consideration part or
    all of which shall be other than cash, the amount of the consideration
    other than cash received by the Corporation shall be the fair value of
    such consideration. If any Common Stock, Options or Convertible
    Securities are issued in connection with any acquisition, merger or
    consolidation in which the Corporation is the surviving corporation,
    the amount of consideration therefor shall be deemed to be the fair
    value of such portion of the net assets and business of the non-
    surviving entity which is attributable to such Common Stock, Options or
    Convertible Securities, as the case may be. The fair value of any
    consideration other than cash shall be determined in good faith by the
    mutual agreement of the Board of Directors and the holders of a
    majority of the outstanding Series B Preferred Stock. If the Board of
    Directors and the holders of a majority of the outstanding Series B
    Preferred Stock are unable to reach such agreement within a reasonable
    period, the fair value of such consideration shall be determined by an
    independent investment bank or a "Big Five" independent public
    accounting firm, in either case of nationally recognized standing in
    the valuation of businesses similar to the business of the Corporation,
    which shall be mutually acceptable to the Corporation and such holders.
    The determination of such investment bank or public accounting firm
    shall be final and binding upon the Corporation and the holders of the
    Series B Preferred Stock.

       (F) Exceptions to Adjustment of Applicable Conversion Price. No
    adjustment to the Applicable Conversion Price shall be made (i) upon
    the grant or conversion or exercise of any Options or Convertible
    Securities issued and outstanding, or committed to be issued, as of the
    Issue Date, or issuable pursuant to the Investment Agreement
    (including, without limitation, the Warrants, the Series A Preferred
    Stock, the Series B Preferred Stock, the Convertible Notes and any
    Options or Convertible Securities issued and outstanding, or committed
    to be issued, as of the Issue Date under the Benefit Plans or
    otherwise); (ii) upon the grant or conversion or exercise of any
    Capital Stock, Options or Convertible Securities which may be issued or
    granted after the Issue Date under any stock option, stock incentive or
    other employee benefit plan of the Corporation or any subsidiary
    thereof in effect as of the Issue Date (including, without limitation,
    the Benefit Plans) or which becomes effective after the Issue Date, so
    long as such stock option, stock incentive or other employee benefit
    plan is approved by the Board of Directors (including the director
    designees, if any, of the holders of the Series B Preferred Stock);
    (iii) upon the issuance and exercise of the Warrants; (iv) upon the
    issuance, conversion or redemption of shares of Series B Preferred
    Stock in accordance with the Series B Certificates of Designation; or
    (v) upon any dividend or distribution on the Series B Preferred Stock
    in accordance with the Series B Certificates of Designation.

     (iii) Distribution of Assets. If the Corporation shall declare or make
  any distribution of its assets (including cash) to holders of Common Stock
  as a partial liquidating dividend, by way of return of capital or
  otherwise, then, after the date of record for determining stockholders
  entitled to such distribution, but prior to the date of such distribution,
  the holders of the Series B-[  ] Preferred Stock shall be entitled to
  receive the amount of such assets which, if the Series B-[  ] Preferred
  Stock had been converted into shares of Common Stock immediately prior to
  such time, would have been payable to the holder of such shares of Common
  Stock on the record date for the determination of stockholders entitled to
  such distribution. Notwithstanding anything in this Certificate of
  Designation, no adjustment in the Applicable Conversion Price shall be made

                                       11
<PAGE>

  under Section 8(g)(ii) to the extent the holders of Series B-[  ] Preferred
  Stock participate in any such distribution of assets in accordance with
  this Section 8(g)(iii) and Section 4(g).

     (iv) Subdivision or Combination of Common Stock. If the Corporation at
  any time subdivides (by any stock split, stock dividend, recapitalization,
  reorganization, reclassification or otherwise) the shares of Common Stock
  acquirable hereunder into a greater number of shares, then, after the date
  of record for effecting such subdivision, the Applicable Conversion Price
  in effect immediately prior to such subdivision shall be proportionately
  reduced. If the Corporation at any time combines (by reverse stock split,
  recapitalization, reorganization, reclassification or otherwise) the shares
  of Common Stock acquirable hereunder into a smaller number of shares, then,
  after the date of record for effecting such combination, the Applicable
  Conversion Price in effect immediately prior to such combination shall be
  proportionately increased.

     (v) Consolidation, Merger or Sale. In case of any consolidation of the
  Corporation with, or merger of the Corporation into, any other corporation,
  or in case of any sale or conveyance of all or substantially all of the
  assets of the Corporation other than in connection with a plan of complete
  liquidation of the Corporation, then as a condition of such consolidation,
  merger, sale or conveyance, adequate provision shall be made whereby each
  holder of the Series B-[  ] Preferred Stock shall have the right to acquire
  and receive upon conversion of such Series B-[  ] Preferred Stock in lieu
  of or in addition to (as the case may be) the shares of Common Stock
  immediately theretofore acquirable upon the conversion of such Series B-
  [  ] Preferred Stock, such shares of capital stock, securities or assets as
  may be issued or payable with respect to or in exchange for the number of
  shares of Common Stock immediately theretofore acquirable and receivable
  upon conversion of such Series B-[  ] Preferred Stock if such
  consolidation, merger, sale or conveyance had not taken place.

     (vi) Notice of Adjustment. Within 20 Business Days after the occurrence
  of any event which requires any adjustment of the Applicable Conversion
  Price, the Corporation shall give written notice thereof to the holders of
  Series B-[  ] Preferred Stock. Such notice shall state the Applicable
  Conversion Price resulting from such adjustment and shall set forth in
  reasonable detail the method of calculation and the facts upon which such
  calculation is based. Such calculation shall be certified by the chief
  financial officer of the Corporation.

     (vii) Minimum Adjustment of Applicable Conversion Price. No adjustment
  of the Applicable Conversion Price shall be made in an amount of less than
  1% of the Applicable Conversion Price in effect at the time such adjustment
  is otherwise required to be made, but any such lesser adjustment shall be
  carried forward and shall be made at the time and together with the next
  subsequent adjustment which, together with any adjustments so carried
  forward, shall amount to not less than 1% of such Applicable Conversion
  Price.

   (h) Notwithstanding Section 8(a) and any other provision of this Certificate
of Designation, the Series B-[  ] Preferred Stock shall be convertible by any
holder thereof into shares of Common Stock pursuant to Section 8 from time to
time, and such holder shall be entitled to exercise such conversion right, only
to the extent that such convertibility or the exercise of such conversion right
would not result in a Change of Control Event, as determined by the Board of
Directors in good faith in accordance with the Investment Agreement. The
operation of the preceding sentence shall not limit any adjustment of the
Applicable Conversion Price pursuant to Section 8(g).

   9. Voting Rights.

   (a) The holders of record of shares of Series B-[  ] Preferred Stock shall
be entitled to vote on an as-converted basis (calculated in accordance with
Section 8(a) as of the close of trading on the record date for such vote and
subject to the following sentence) with the holders of the Common Stock and
each other series of Series B Preferred Stock as a single class on all matters
presented to the holders of the Common Stock for

                                       12
<PAGE>

vote, except in each case (i) as hereinafter provided in Section 9, (ii) as
otherwise and to the extent provided by law, or (iii) as otherwise and to the
extent provided by the Nasdaq Marketplace Rules or the rules, regulations and
interpretations of any securities exchange on which the Common Stock is traded,
as determined by the Board of Directors in good faith. Any holder of record of
shares of Series B-[  ] Preferred Stock shall be entitled to vote on an as-
converted basis as provided in this Certificate of Designation only to the
extent that the exercise of such as-converted voting rights by such holder
would not result in a Change of Control Event, as determined by the Board of
Directors in good faith in accordance with the Investment Agreement. So long as
the provisions of Section 9(b) or 9(c) of the Series B Certificates of
Designation entitle any holder of the Series B Preferred Stock to designate for
nomination a director or directors of the Corporation, the holders of the
Series B Preferred Stock shall have the exclusive right, voting together as a
single class either at a meeting of stockholders or by written consent, to vote
with respect to such designee or designees to the Board of Directors.

   (b) Effective as of the Initial Issue Date, any holder of record of at least
50,000 shares of Series B Preferred Stock shall be entitled to designate for
nomination for election, and the holders of the Series B Preferred Stock,
voting together as a single class, shall be entitled to elect, one director to
the Board of Directors in accordance with Section 9 of the Series B
Certificates of Designation. Effective as of the Initial Issue Date, any holder
of record of at least 100,000 shares of Series B Preferred Stock shall be
entitled to designate for nomination for election, and the holders of the
Series B Preferred Stock, voting together as a single class, shall be entitled
to elect, two directors to the Board of Directors in accordance with Section 9
of the Series B Certificates of Designation. At such time as any holder of
Series B Preferred Stock owns of record at least 50,000 shares or 100,000
shares of Series B Preferred Stock and such holder of record notifies the
Corporation in writing that it wishes to designate for nomination for election
one or two directors, as applicable, the Board of Directors shall cause the
total number of directors then constituting the whole Board of Directors to be
increased by one director or two directors, as the case may be. Notwithstanding
the preceding sentence, for so long as a holder of Series B Preferred Stock
that is otherwise entitled to nominate a director pursuant to Section 9(b) of
the Series B Certificates of Designation has an Affiliate who is serving on the
Board of Directors and who has not been designated pursuant to Section 9 of the
Series B Certificates of Designation, such holder shall not be entitled to
designate for nomination, nor shall the holders of the Series B Preferred
Stock, voting together as a single class, be entitled to elect, an additional
director or directors to the Board of Directors. Notwithstanding anything in
Section 9(b) of the Series B Certificates of Designation to the contrary, (i)
effective as of the date on which a holder's record ownership of the Series B
Preferred Stock shall be reduced to a number of outstanding shares (calculated
without giving effect to any Preferred Dividends paid to such holder in shares
of Series B Preferred Stock pursuant to Section 4(d) of the Series B
Certificates of Designation) which is less than 100,000 shares but at least
50,000 shares, such holder shall be entitled to designate for nomination only
one director for election to the Board of Directors, and the holders of the
outstanding shares of Series B Preferred Stock shall have the exclusive right
to vote, together as a single class, for the election of only one director to
the Board of Directors, and the directorship of the latter of the two directors
shall immediately terminate, and (ii) effective as of the date on which a
holder's record ownership of the Series B Preferred Stock is reduced to less
than 50,000 outstanding shares (calculated without giving effect to any
Preferred Dividends paid to such holder in shares of Series B Preferred Stock
pursuant to Section 4(d) of the Series B Certificates of Designation), the
entitlement of such holder to designate for nomination one director for
election to the Board of Directors, and the exclusive right of the holders of
the outstanding shares of Series B Preferred Stock to vote, together as a
single class, for the election of a director to the Board of Directors shall
cease, and such directorship shall immediately terminate. Directors elected by
the holders of the Series B Preferred Stock shall not serve a classified term
with the directors elected by the holders of Common Stock together with the
holders of any other class or series of capital stock entitled to vote thereon.
In no event shall the holders of Series B Preferred Stock be entitled to elect
more than two directors to the Board of Directors pursuant to Section 9(b) of
the Series B Certificates of Designation. If more than two holders of Series B
Preferred Stock would, but for the provisions of Section 9(b) of the Series B
Certificates of Designation, be entitled to nominate for election more than two
directors to the Board of Directors pursuant to Section 9(b) of the Series B
Certificates of Designation, such holders shall mutually agree on the
nomination for election of two such directors.

                                       13
<PAGE>

   (c) Any director elected by the holders of Series B Preferred Stock who
serves as a member of the Board of Directors may be removed without cause only
by the holders of a majority of the outstanding shares of Series B Preferred
Stock. If a vacancy is created on the Board of Directors by reason of the
death, removal or resignation of any director elected by the holders of the
Series B Preferred Stock, the holder of the Series B Preferred Stock who
designated for nomination for election such director shall be entitled to
designate for nomination for election, and the holders of the Series B
Preferred Stock, voting together as a single class, may elect a replacement
director to the Board of Directors.

   (d) Without the written consent of holders of a majority of the outstanding
shares of Series B-[  ] Preferred Stock or the affirmative vote of holders of a
majority of the outstanding shares of Series B-[  ] Preferred Stock at a
meeting of the holders of Series B-[  ] Preferred Stock called for such
purpose, the Corporation shall not amend, alter or repeal any provision of the
Certificate of Incorporation or this Certificate of Designation so as to affect
adversely the preferences, rights or powers of the Series B-[  ] Preferred
Stock; provided that any such amendment that changes any dividend or other
amount payable on or the liquidation preference of the Series B-[  ] Preferred
Stock shall require the written consent of holders of two-thirds of the
outstanding shares of Series B-[  ] Preferred Stock or the affirmative vote of
holders of two-thirds of the outstanding shares of Series B-[  ] Preferred
Stock at a meeting of the holders of Series B-[  ] Preferred Stock called for
such purpose. Without the written consent of holders of a majority of the
outstanding shares of Series B Preferred Stock or the affirmative vote of
holders of a majority of the outstanding shares of Series B Preferred Stock at
a meeting of the holders of Series B Preferred Stock called for such purpose,
the Corporation shall not authorize the issuance of or issue any Parity
Securities (other than any series of Series B Preferred Stock as contemplated
in the Series B Certificates of Designation or in the Investment Agreement) or
Senior Securities.

   (e) In any transaction in which the Series B Preferred Stock shall remain
outstanding or be converted into capital stock of any entity other than the
Corporation, the Corporation may, without the consent of the holders of the
Series B Preferred Stock, consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets as an entirety to, any
Person, provided that the successor, transferee or lessee (if not the
Corporation) is organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and the Series B
Preferred Stock shall be converted into or exchanged for and shall become
shares of, or interests in, such successor, transferee or lessee, having in
respect of such successor, transferee or lessee substantially the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereof, that the Series B
Preferred Stock has immediately prior to such transaction. In the event of any
consolidation or merger or conveyance, transfer or lease of all or
substantially all of the assets of the Corporation that is permitted pursuant
to this Section 9(e), the successor resulting from such consolidation or into
which the Corporation is merged or the transferee or lessee to which such
conveyance, transfer or lease is made, shall succeed to, and be substituted
for, and may exercise every right and power of, the Corporation with respect to
the Series B Preferred Stock (or the shares or interests into, or for which,
the Series B Preferred Stock is converted or exchanged), and thereafter, except
in the case of a lease, the predecessor (if still in existence) shall be
released from its obligations and covenants with respect to the Series B
Preferred Stock. Any consent required pursuant to this Section 9(e) shall be
given by written consent of holders of a majority of the outstanding shares of
Series B Preferred Stock or the affirmative vote of holders of a majority of
the outstanding shares of Series B Preferred Stock at a meeting of the holders
of Series B Preferred Stock called for such purpose.

   (f) In exercising the voting rights set forth in this Section 9, each share
of Series B-[  ] Preferred Stock shall have one vote per share except as
otherwise expressly provided for herein. Except as otherwise required by
applicable law or as set forth herein, the shares of Series B-[  ] Preferred
Stock shall not have any relative, participating, optional or other special
voting rights and powers, and the consent of the holders of the Series B-[  ]
Preferred Stock shall not be required for the taking of any corporate action.

   10. Headings. The headings of the sections, paragraphs, subparagraphs,
clauses and subclauses of this Certificate of Designation are for convenience
of reference only and shall not define, limit or affect any of the provisions
hereof.

                                       14
<PAGE>

   IN WITNESS WHEREOF, said ITC/\DeltaCom, Inc. has caused this Certificate of
Designation to be signed by            , its duly authorized          , this
    day of          , 200  .

                                          ITC/\DELTACOM, INC.

                                          By:
                                             ---------------------------------
                                            Name:
                                            Title:


                                       15