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                                                                     EXHIBIT 2.1

                      IN THE UNITED STATES BANKRUPTCY COURT

                          FOR THE DISTRICT OF DELAWARE


In re:                                            )
                                                  )  Chapter 11
FOCAL COMMUNICATIONS CORPORATION, ET AL.,(1)      )
                                                  )  Case No. 02-13709 (KJC)
                                Debtors.          )
                                                  )  Jointly Administered

              DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
                     UNDER CHAPTER 11 OF THE BANKRUPTCY CODE


Laura Davis Jones (Bar No. 2436)
Linda Cantor (CA Bar No. 153762)
Bruce Grohsgal (Bar No. 3583)
Christopher J. Lhulier (Bar No. 3850)
Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.
919 N. Market Street
Wilmington, Delaware 19899
Telephone: (302) 652-4100
Facsimile: (302) 652-4400

GENERAL BANKRUPTCY COUNSEL TO
DEBTORS AND DEBTORS IN POSSESSION                          Dated: April 30, 2003

----------

(1) The Debtors are the following entities: Focal Communications Corporation,
    Focal Communications Corporation of California, Focal Communications
    Corporation of Colorado, Focal Communications Corporation of Connecticut,
    Focal Communications Corporation of Florida, Focal Communications
    Corporation of Georgia, Focal Communications Corporation of Illinois, Focal
    Communications Corporation of Massachusetts, Focal Communications
    Corporation of Michigan, Focal Communications Corporation of the
    Mid-Atlantic, Focal Communications Corporation of Minnesota, Focal
    Communications Corporation of Missouri, Focal Communications Corporation of
    New England, Focal Communications Corporation of New Jersey, Focal
    Communications Corporation of New York, Focal Communications Corporation of
    Ohio, Focal Communications Corporation of Pennsylvania, Focal Communications
    Corporation of Texas, Focal Communications Corporation of Virginia, Focal
    Communications Corporation of Washington, Focal Communications Corporation
    of Wisconsin, Focal Financial Services, Inc., Focal International Corp.,
    Focal Telecommunications Corporation, Focal Equipment Finance, LLC and Focal
    Fiber Leasing, LLC.

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                                TABLE OF CONTENTS

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ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION AND COMPUTATION OF TIME......................................1
      Section 1.1      Introduction...........................................................................1
      Section 1.2      Defined Terms..........................................................................1
      Section 1.3      Rules of Interpretation and Computation of Time.......................................10

ARTICLE II ADMINISTRATIVE AND PRIORITY TAX CLAIMS............................................................10
      Section 2.1      Administrative Claims.................................................................10
      Section 2.2      Priority Tax Claims...................................................................11

ARTICLE III CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS......................................11
      Section 3.1      Classification........................................................................11
      Section 3.2      Acceptances and Rejections............................................................13
      Section 3.3      Classification and Treatment of Claims Against and Equity Interests in FCC............13
      Section 3.4      Classification and Treatment of Claims Against and Equity Interests in FFSI...........16
      Section 3.5      Classification and Treatment of Claims Against and Equity Interests in
                       Subsidiary Debtors....................................................................19

ARTICLE IV CRAMDOWN..........................................................................................22

ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN...............................................................22
      Section 5.1      Continued Corporate Existence and Vesting of Assets in Reorganized Debtors............22
      Section 5.2      Cancellation of Notes, Instruments, Preferred Stock, Common Stock and Stock
                       Options; Reduction of Paid-in Capital of Certain Debtors..............................23
      Section 5.3      Effectiveness of Related Documents....................................................23
      Section 5.4      Release of Liens and Perfection of Liens..............................................23
      Section 5.5      Corporate Governance, Directors and Officers, and Corporate Action....................24
      Section 5.6      Sources of Cash for Plan Distribution.................................................26
      Section 5.7      Issuance of New Securities............................................................26
      Section 5.8      Escrows...............................................................................26
      Section 5.9      New Key Employee Incentive Plan.......................................................26
      Section 5.10     Substantive Consolidation For Limited Purposes........................................26

ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.............................................28
      Section 6.1      Assumption of Executory Contracts and Unexpired Leases................................28
      Section 6.2      Claims Based on Rejection of Executory Contracts or Unexpired Leases..................28
      Section 6.3      Cure of Defaults for Assumed Executory Contracts and Unexpired Leases.................28
      Section 6.4      Indemnification of Directors, Officers and Employees..................................29
      Section 6.5      Compensation and Benefit Programs.....................................................29

ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS...............................................................29
      Section 7.1      Distribution for Claims and Equity Interests Allowed as of the Effective Date.........29
      Section 7.2      Delivery and Distributions and Undeliverable or Unclaimed Distributions...............29
      Section 7.3      Distribution Record Date..............................................................30
      Section 7.4      Timing and Calculation of Amounts to Be Distributed...................................30
      Section 7.5      Setoffs and Recoupments...............................................................31
      Section 7.6      Surrender of Canceled Instruments or Securities.......................................31
      Section 7.7      Lost, Stolen, Mutilated or Destroyed Debt Securities..................................31
      Section 7.8      Fractional Shares.....................................................................31
      Section 7.9      Rounding and De Minimus Amounts.......................................................32
      Section 7.10     Global Certificates and Global Warrants...............................................32

ARTICLE VIII PROCEDURES FOR RESOLVING DISPUTED CLAIMS........................................................36
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                                TABLE OF CONTENTS

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      Section 8.1      Characterization of Disputed Claims...................................................36
      Section 8.2      Prosecution of Objections to Claims and Equity Interests..............................36
      Section 8.3      Estimation of Claims..................................................................36
      Section 8.4      Payments and Distributions on Disputed Claims or Disputed Equity Interests............37

ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN.................................37
      Section 9.1      Conditions Precedent to Confirmation..................................................37
      Section 9.2      Conditions Precedent to Consummation..................................................37
      Section 9.3      Waiver of Conditions..................................................................38
      Section 9.4      Effect of Non-Occurrence of Conditions to Consummation................................38

ARTICLE X RELEASE, INJUNCTIVE AND RELATED PROVISIONS.........................................................38
      Section 10.1     Releases..............................................................................38
      Section 10.2     Exculpation...........................................................................39
      Section 10.3     Injunction............................................................................40

ARTICLE XI RETENTION OF JURISDICTION.........................................................................40
      Section 11.1     Retention of Jurisdiction.............................................................40

ARTICLE XII MISCELLANEOUS PROVISIONS.........................................................................42
      Section 12.1     Dissolution of Committees.............................................................42
      Section 12.2     Payment of Statutory Fees.............................................................42
      Section 12.3     Discharge of Debtors..................................................................42
      Section 12.4     Modification of the Plan..............................................................42
      Section 12.5     Revocation or Withdrawal of Plan......................................................42
      Section 12.6     Successors and Assigns................................................................42
      Section 12.7     Reservation of Rights.................................................................43
      Section 12.8     Section 1145 Exemption................................................................43
      Section 12.9     Headings..............................................................................43
      Section 12.10    Governing Law.........................................................................43
      Section 12.11    Severability..........................................................................43
      Section 12.12    Implementation........................................................................43
      Section 12.13    Inconsistency.........................................................................43
      Section 12.14    Further Assurances....................................................................43
      Section 12.15    Service of Documents..................................................................44
      Section 12.16    Exemption from Certain Transfer Taxes.................................................44
      Section 12.17    Compromise of Controversies...........................................................44
      Section 12.18    No Admissions.........................................................................44
      Section 12.19    Filing of Additional Documents........................................................45
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              DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
                     UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

                                    ARTICLE I
                     DEFINED TERMS, RULES OF INTERPRETATION
                             AND COMPUTATION OF TIME

Section 1.1         INTRODUCTION

        Focal Communications Corporation ("FCC"), Focal Communications
Corporation of California, Focal Communications Corporation of Connecticut,
Focal Communications Corporation of Florida, Focal Communications Corporation of
Georgia, Focal Communications Corporation of Illinois, Focal Communications
Corporation of Massachusetts, Focal Communications Corporation of Michigan,
Focal Communications Corporation of the Mid-Atlantic, Focal Communications
Corporation of Minnesota, Focal Communications Corporation of Missouri, Focal
Communications Corporation of New Jersey, Focal Communications Corporation of
New York, Focal Communications Corporation of Ohio, Focal Communications
Corporation of Pennsylvania, Focal Communications Corporation of Texas, Focal
Communications Corporation of Virginia, Focal Communications Corporation of
Washington, Focal Financial Services, Inc. ("FFSI"), Focal Telecommunications
Corporation, Focal Equipment Finance, LLC, and Focal Fiber Leasing, LLC, debtors
and Debtors-In-Possession in the above-captioned cases (collectively, the
"Debtors"), hereby respectfully propose the following Second Amended Joint Plan
of Reorganization (as further amended from time to time, and including all
addenda, exhibits, schedules and other attachments hereto, as any of the same
may be amended from time to time, all of which are incorporated by reference,
the "Plan"), in accordance with the Bankruptcy Code and Bankruptcy Rules and
other applicable law. Reference is made to the Disclosure Statement (defined
herein) distributed contemporaneously herewith, for a discussion of the Debtors'
history, business, properties and operations, risk factors, a summary and
analysis of the Plan and certain related matters, including, among other things,
securities to be issued under the Plan. Subject to certain restrictions and
requirements set forth in Section 1127 of the Bankruptcy Code and Bankruptcy
Rule 3019, the Debtors reserve the right to alter, amend, modify, revoke or
withdraw the Plan prior to its substantial consummation. The following Debtors
in these jointly administered cases, each of which has no assets, are not
proponents of the Plan, but intend to dissolve prior to the entry of the final
decree in these cases: Focal Communications Corporation of Colorado, Focal
Communications Corporation of New England, Focal Communications Corporation of
Wisconsin and Focal International Corp.

Section 1.2         DEFINED TERMS

        Unless the context otherwise requires, the following terms shall have
the following meanings when used in capitalized form in the Plan:

        "Administrative Claim" means a Claim for costs and expenses of
administration under Section 503(b)(l) or 507(b) of the Bankruptcy Code,
including for: (a) the actual and necessary costs and expenses incurred after
the Petition Date of preserving the Estates and operating the businesses of the
Debtors; (b) compensation for services and reimbursement of expenses under
Section 330(a) or 331 of the Bankruptcy Code; (c) any indebtedness or
obligations; and (d) all fees and charges assessed against the Estates under 28
U.S.C. Sections 1911-1930.

        "Affiliate" means an affiliate as such term is defined in Section 101(2)
of the Bankruptcy Code.

        "Agents" means, collectively, Goldman Sachs Creditor Partners L.P., as
joint lead arranger and syndication agent, and Citicorp USA, Inc., as
administrative agent and collateral agent, under the Prepetition Credit
Facility.

        "Allowed" means, any Claim or Equity Interest or portion thereof against
any Debtor, (a) proof of which was filed within the applicable period of
limitation fixed by the Bankruptcy Court in accordance with Bankruptcy Rule
3003(c)(3) as to which (i) no objection to the allowance thereof, or action to
equitably subordinate or otherwise limit recovery with respect thereto, has been
interposed within the applicable period of limitation fixed by the Plan, the
Bankruptcy Code, the Bankruptcy Rules or a Final Order or (ii) if an objection
has been interposed, to the extent

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such Claim or Equity Interest has been allowed (whether in whole or in part) by
a Final Order, (b) which, if no proof of claim was so filed, has been listed by
a Debtor in its Schedules as liquidated in an amount and not disputed or
contingent as to which (i) no objection to the allowance thereof, or action to
equitably subordinate or otherwise limit recovery with respect thereto, has been
interposed within the applicable period of limitation fixed by the Plan, the
Bankruptcy Code, the Bankruptcy Rules or a Final Order, (ii) any objection has
been settled, waived, withdrawn or denied by a Final Order, or (iii) if an
objection has been interposed, to the extent such Claim or Equity Interest has
been allowed by a Final Order, (c) which Claim arises from the recovery of
property under Section 550 or 553 of the Bankruptcy Code and is allowed in
accordance with Section 502(h) of the Bankruptcy Code, (d) which Claim or Equity
Interest is allowed under the Plan or (e) which Claim or Equity Interest is
allowed by a Final Order.

        "Allowed Claim" means a Claim that has been Allowed.

        "Avoidance Actions" means the Causes of Action of the Debtors or their
Estates arising under chapter 5 of the Bankruptcy Code.

        "Ballot" means the ballot for voting to accept or reject the Plan
distributed by the Debtors, to each Holder of a Claim or Equity Interest
entitled to vote on the Plan.

        "Ballot Date" means the date stated in the Voting Instructions by which
all Ballots must be received.

        "Bank Claims" means any and all Claims arising from or relating to the
Prepetition Credit Facility (other than the Convertible Secured Note Claims),
which Claims shall be deemed Allowed without the need to file any proof of
Claim.

        "Bank Group" means the lenders (other than the Holders of the
Convertible Secured Notes) that are party to the Prepetition Credit Facility or
their assignees.

        "Bank Group Term Sheet" means the term sheet attached as EXHIBIT I to
this Plan, setting forth the terms of the Restructured Bank Credit Facility that
will become effective on the Effective Date.

        "Bank Group Support Agreement" means the support agreement, dated
December 18, 2002, by and among FCC and the Bank Group attached as an Exhibit to
the Plan Supplement, amended or modified from time to time, including by
extension or waiver of deadlines set forth therein.

        "Bankruptcy Code" means Title 11 of the United States Code, Section 101
ET SEQ., as in effect on the Petition Date, and as such title has been or may
be, amended after the Petition Date, to the extent that any such amendment is
applicable to the Chapter 11 Cases.

        "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware, or such other court having jurisdiction over the Chapter
11 Cases or any proceeding within, or appeal of an order entered in, the Chapter
11 Cases.

        "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as
amended from time to time, and the Official Bankruptcy Forms or local rules of
the Bankruptcy Court, each as in effect on the Petition Date and as each has
been, or may be, amended after the Petition Date, to the extent that any such
amendment is applicable to the Chapter 11 Cases.

        "Bar Date" means the applicable date for filing of proofs of Claim
relating to any Claim as set forth in the Bar Date Order.

        "Bar Date Order" means that order of the Bankruptcy Court disposing of
the Debtors' Motion for an Order Fixing Dates for Filing Proofs of Claim Against
and Interests in the Debtors and Approving Form of Notice entered in these cases
at docket no. 269, as the same may be amended from time to time.

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        "Business Day" means any day, other than a Saturday, Sunday or a "legal
holiday" (as such term is defined In Bankruptcy Rule 9006(a)).

        "Cash" means legal tender of the United States of America or equivalents
thereto.

        "Causes of Action" means all actions, causes of action, Avoidance
Actions, suits, debts, dues, sums of money, accounts, reckonings, rights to
legal remedies, rights to equitable remedies, rights to payment and claims,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances or trespasses of, or belonging to, the Estates, whether
known or unknown, reduced to judgment, not reduced to judgment, liquidated,
unliquidated, fixed contingent, matured, unmatured, disputed, undisputed,
secured or unsecured and whether asserted or assertable directly or indirectly
or derivatively, in law, equity or otherwise.

        "Certificate of Incorporation" means a certificate of incorporation.

        "Chapter 11 Cases" means the cases under chapter 11 of the Bankruptcy
Code commenced by the Debtors in the Bankruptcy Court.

        "Claim" means a claim as defined in Section 101(5) of the Bankruptcy
Code against any of the Debtors, whether or not asserted.

        "Class" means a class of Claims or Equity Interests as set forth in
Article III of the Plan. "Committee" means any statutory official committee
appointed in the Chapter 11 Cases.

        "Confirmation Date" means the date upon which the Confirmation Order is
entered by the Bankruptcy Court in the docket maintained by the Bankruptcy Court
pursuant to Bankruptcy Rule 5003.

        "Confirmation Order" means the order of the Bankruptcy Court confirming
the Plan pursuant to Section 1129 of the Bankruptcy Code in form and substance
reasonably satisfactory to the Debtors and the Agents.

        "Convenience Claim" means any General Unsecured Claim not in excess of
$5,000, excluding, however, any FCC 2008 Note Claims and any FCC 2010 Note
Claims not in excess of $5,000, the aggregate of which Convenience Claims paid
pursuant to this Plan shall not exceed $250,000 unless the consent of the Agents
has been obtained.

        "Convertible Noteholder Group" means the holders of the Convertible
Secured Notes.

        "Convertible Noteholder Support Agreement" means the support agreement,
dated December 19, 2002, by and among FCC and the Convertible Noteholder Group
attached as an Exhibit to the Plan Supplement, as amended or modified from time
to time, including without limitation by extension or waiver of deadlines set
forth therein.

        "Convertible Noteholder Term Sheet" means the term sheet attached as
EXHIBIT 2 to this Plan, setting forth the terms of the conversion of the
Convertible Secured Notes into Reorganized FCC Series A Preferred Stock on the
Effective Date.

        "Convertible Secured Note Claims" means any and all Claims arising from
or relating to the Convertible Secured Notes, which Claims shall be deemed
Allowed without the need to File any proof of Claim.

        "Convertible Secured Notes" means the convertible notes or other
documentation evidencing such convertible notes issued under the Preferred Stock
Purchase and Loan Commitment Agreement dated as of August 9, 2001, as amended,
supplemented or otherwise modified by and among FCC and the Convertible
Noteholder Group, together with any and all related notes, certificates,
security agreements, mortgages, pledges, indemnities, collateral assignments,
undertakings, guarantees and other instruments and documents, as each may have
been amended, supplemented or otherwise modified from time to time.

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        "D&O Releasees" means all current and former directors, officers,
employees, consultants, agents, members, shareholders, advisors, professionals
and other representatives, including but not limited to, attorneys, financial
advisors, accountants and investment bankers of the Debtors and their Affiliates
who served in such capacity on or prior to the Effective Date, in each case in
their capacity as such, but excluding the underwriters of the initial public
offering that is the subject of the IPO Litigation.

        "Debtors" has the meaning set forth in Article I hereof.

        "Debtors-In-Possession" means the Debtors as debtors-in-possession
pursuant to Sections 1101, 1107 and 1108 of the Bankruptcy Code.

        "Delaware General Corporation Law" means Title 8 of the Delaware Code,
as now in effect or hereafter amended.

        "Disbursing Agent" means any Entity in its capacity as Disbursing Agent
under Section 7.2 of the Plan.

        "Disclosure Statement" means that certain amended disclosure statement,
dated April 10, 2003, which amends the disclosure statement dated January 7,
2003 previously amended March 26, 2003, as such amended disclosure statement is
further amended, supplemented, or modified from time to time, relating to the
Plan, including, without limitation, any exhibits and schedules thereto, that is
prepared and distributed in accordance with the Bankruptcy Code and Bankruptcy
Rules and other applicable law.

        "Disputed" means, with respect to any Claim or Equity Interest, any
Claim or Equity Interest: (a) listed on the Schedules as unliquidated, disputed
or contingent; (b) as to which the Debtors or any other party in interest has
interposed a timely objection or request for estimation in accordance with the
Bankruptcy Code and the Bankruptcy Rules or is otherwise disputed by the Debtors
in accordance with applicable law, which objection, request for estimation or
dispute has not been settled, waived, withdrawn or determined by a Final Order;
or (c) during the period prior to the deadline fixed by the Plan or the
Bankruptcy Court for objecting to such Claim or Equity Interest, such Claim or
Equity Interest exceeds the amount listed on the Schedules other than as
unliquidated, disputed or contingent.

        "Distribution" means any distribution of Cash or other property under
the Plan, including such distributions made in accordance with the Plan.

        "Distribution Record Date" means the Confirmation Date.

        "Dollar" means U.S. dollar.

        "Effective Date" means the first Business Day on which all conditions
specified in Article IX of the Plan have been satisfied or waived.

        "Entity" means an entity as defined in Section 101(15) of the Bankruptcy
Code together with any limited liability company or other organized entity.

        "Equity Interest" means any equity interest in any of the Debtors
including, but not limited to, all issued, unissued, authorized or outstanding
shares of stock or other equity interest, together with any warrants, options or
contractual rights to purchase or acquire such interests at any time and all
rights arising with respect thereto.

        "Estates" means the estates of the Debtors created by Section 541 of the
Bankruptcy Code upon the commencement of the Chapter 11 Cases.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "FCC" means Focal Communications Corporation, a Delaware corporation.

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        "FCC 2008 Note Claims" means all Claims arising from or related to the
FCC 2008 Notes.

        "FCC 2008 Notes" means FCC's 12.125% Senior Discount Notes due 2008
governed by the FCC 2008 Notes Indenture.

        "FCC 2008 Notes Indenture" means the Indenture, dated as of February 18,
1998, as amended, supplemented or otherwise modified, between FCC and BNY
Midwest Trust Company (as successor to Harris Trust and Savings Bank), as
trustee, relating to the FCC 2008 Notes, together with any and all related
notes, certificates and other instruments and documents, as each may have been
amended, supplemented or otherwise modified from time to time.

        "FCC 2008 Notes Indenture Trustee" means the trustee under the FCC 2008
Notes Indenture.

        "FCC 2010 Note Claims" means all Claims arising from or related to the
FCC 2010 Notes.

        "FCC 2010 Notes" means FCC's 11.875% Senior Notes due 2010 governed by
the FCC 2010 Notes Indenture.

        "FCC 2010 Notes Indenture" means the Indenture, dated as of January 12,
2000, as amended, supplemented or otherwise modified, between FCC and BNY
Midwest Trust Company (as successor to Harris Trust and Savings Bank), as
trustee, relating to the FCC 2010 Notes, together with any and all related
notes, certificates and other instruments and documents, as each may have been
amended, supplemented or otherwise modified from time to time.

        "FCC 2010 Notes Indenture Trustee" means the trustee under the FCC 2010
Notes Indenture.

        "FCC Common Stock" means the authorized common stock of FCC.

        "FCC Common Stock Interest" means any common equity interest of FCC
including, but not limited to, all issued, unissued, authorized or outstanding
shares or stock of the FCC Common Stock, together with any warrants, options or
contract rights to purchase or acquire such interests at any time, and any Claim
with respect thereto including, but not limited to, any Claim Subordinated
Pursuant to Section 510(b).

        "FCC Preferred Stock" means the Series A Redeemable Voting Convertible
Preferred Stock of FCC.

        "FCC Preferred Stock Interest" means any equity interest in FCC
evidenced by the FCC Preferred Stock, and any Claim with respect thereto
including, but not limited to, any Claim Subordinated Pursuant to Section
510(b).

        "FCC Preferred Stockholders" means Holders of the FCC Preferred Stock.

        "FCC Subordinated Note Claims" means the FCC 2008 Note Claims and the
FCC 2010 Note Claims.

        "FFSI" means Focal Financial Services, Inc., a Delaware corporation.

        "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction with respect to the subject matter (a)
which has not been reversed, stayed, modified or amended and as to which (i) any
right to appeal or seek certiorari, review, reargument, stay or rehearing has
been waived or (ii) the time to appeal or seek certiorari, review, reargument,
stay or rehearing has expired and no appeal or petition for certiorari, review,
reargument, stay or rehearing is pending, or (b) as to which an appeal has been
taken or petition for certiorari, review, reargument, stay or rehearing has been
filed and (i) such appeal or petition for certiorari, review, reargument, stay
or rehearing has been resolved by the highest court to which the order or
judgment was appealed or from which certiorari, review, reargument, stay or
rehearing was sought or (ii) the time to appeal further

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or seek certiorari, further review, reargument, stay or rehearing has expired
and no such further appeal or petition for certiorari, further review,
reargument, stay or rehearing is pending.

        "General Unsecured Claim" means any Claim against any of the Debtors
that arose or accrued before the Petition Date and is not a Secured Claim,
Administrative Claim, Priority Tax Claim, Other Priority Claim, or Convenience
Claim, but including, without limitation, (i) FCC 2008 Notes Claims and FCC 2010
Notes Claims, (ii) Claims arising from the rejection of an unexpired leased or
executory contract pursuant to Article VI of the Plan or otherwise, (iii) that
portion of the NTFC Capital Claim against FCC that does not constitute a Secured
Claim, and (iv) the fees and expenses of the Indenture Trustee, incurred in its
capacity as such prior to the Petition Date, under the FCC 2008 Notes Indenture
and the FCC 2010 Notes Indenture, including the fees and expenses of its
counsel.

        "Holder" means the beneficial holder of any Claim or Equity Interest.

        "Impaired" means, with respect to a Claim or an Equity Interest, a Claim
or an Equity Interest with respect to which this Plan alters the legal,
equitable or contractual rights to which such Claim or Equity Interest entitles
its Holder.

        "Indenture Trustee" means any entity identified as the trustee, paying
agent or other similar fiduciary under a bond, note or other debt instrument
(including, but not limited to the FCC 2008 Notes and the FCC 2010 Notes)
whether or not the agreement evidencing the debt or delineating its terms is
denominated as an indenture.

        "Intercompany Claim" means a book entry Claim held by one Debtor against
any other Debtor, including, but not limited to a Claim that was incurred after
the Petition Date, constituting an allocation made in accordance with the
Debtors' customary cash management practices, which does not require repayment
in cash and does not constitute be a loan.

        "Intercompany Interests" means any and all equity securities of a Debtor
that are owned by another Debtor as of the Distribution Record Date.

        "Investor Rights Agreement" means the Investor Rights Agreement to be
filed by the Debtors as part of the Plan Supplement.

        "Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including without limitation, those arising under
any contract agreement, arrangement, commitment or undertaking on or prior to
the Effective Date.

        "Lien" means a lien as defined in Section 101(37) of the Bankruptcy Code
against property of any of the Debtors.

        "New Key Employee Incentive Plan" shall mean FCC's incentive plan
entered into on the Effective Date, the form of which shall be attached as an
exhibit to the Plan Supplement.

        "NTFC Capital" means NTFC Capital Corporation, a Delaware corporation.

        "NTFC Capital Claims" means any and all Claims, which Claims shall be
deemed Allowed without the need to File any proof of Claim, arising from or
relating to the Loan and Security Agreement dated as of December 30, 1998, as
amended, by and between FCC and NTFC Capital, together with any and all related
notes, certificates, security agreements, mortgages, pledges, indemnities,
collateral assignments, undertakings, guarantees and other instruments and
documents, as each may have been amended, supplemented or otherwise modified
from time to time.

        "NTFC Capital Secured Claim" means that portion of the NTFC Capital
Claims that constitutes a Secured Claim.

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        "NTFC Capital Term Sheet" means the term sheet attached as EXHIBIT 3 to
this Plan, setting forth the terms of the Restructured NTFC Capital Loan
Facility that will become effective on the Effective Date in satisfaction of the
NTFC Capital Claims.

        "Old Incentive Plan" means FCC's Amended and Restated 1998 Equity and
Performance Incentive Plan in effect on the Petition Date.

        "Other Priority Claims" means any Claim accorded priority in right of
payment under Section 507(a) of the Bankruptcy Code, other than a Priority Tax
Claim or an Administrative Claim.

        "Other Secured Claims" means all Secured Claims against the Debtors,
other than the Bank Claims, the Convertible Secured Note Claims and the NTFC
Capital Claims, held by any Person or Entity.

        "Oversight Committee of Unsecured Creditors" shall mean the
post-Effective Date Committee formed for the purpose of designating a director
of Reorganized FCC in accordance with the Investor Rights Agreement, the initial
members of which shall be appointed by the Committee, and the subsequent members
of which shall be elected or designated in accordance with the by-laws or other
governing agreements of the Oversight Committee of Unsecured Creditors.

        "Person" means a person as defined in Section 101(41) of the Bankruptcy
Code.

        "Petition Date" means December 19, 2002.

        "Plan" has the meaning specified in the introduction to this Article I.

        "Plan Documents" means the agreements, documents and instruments entered
into on or as of the Effective Date as contemplated by, and in furtherance of,
the Plan, including, without limitation, the Reorganized FCC Certificate of
Incorporation, the Reorganized FCC Warrant Agreement, the Investor Rights
Agreement, and the New Key Employee Incentive Plan.

        "Plan Supplement" means the supplement to be filed with the Bankruptcy
Court on or before the 10th calendar day prior to the Confirmation Date, which
shall include, among other things, the Restructured Bank Credit Facility, the
Restructured NTFC Facility, the Convertible Noteholder subordination term sheet,
the rejected contracts list, Reorganized Debtor certificates of incorporation,
the Plan Documents, the Bank Group Support Agreement, the Convertible Noteholder
Support Agreement, the list Retained Causes of Action referred to in Section
5.1(b) below, and the Statement of Officers and Directors.

        "Prepetition Credit Facility" means the Amended and Restated Credit and
Guaranty Agreement dated as of October 26, 2001, as amended, supplemented or
otherwise modified, by and among FCC, FFSI, certain subsidiaries of FFSI, the
Agents, the Bank Group, and the Holders of the Secured Convertible Notes, which
provides for secured revolving credit borrowings and term loans, together with
any and all related notes, certificates, security agreements, mortgages,
pledges, indemnities, collateral assignments, undertakings, guarantees and other
instruments and documents, as each may have been amended, supplemented or
otherwise modified from time to time.

        "Priority Tax Claim" means a Claim of a governmental unit of the kind
specified in Section 507(a)(8) of the Bankruptcy Code.

        "Pro Rata" means proportionately, so that, e.g., with respect to a
distribution on account of an Allowed Claim (in all Classes except Classes 1C,
2C and 3C - Convertible Secured Note Claims and Classes 1G, 2G and 3G - General
Unsecured Claims), the ratio of (a) (i) the amount of property distributed on
account of a particular Allowed Claim to (ii) the amount of the Allowed Claim,
is the same as the ratio of (b) (i) the amount of property distributed on
account of all Allowed Claims in the Class in which such Allowed Claim is
included to (ii) the amount of all Allowed Claims in that Class. Except with
respect to an Allowed Claim in Classes 1B, 2B and 3B - Bank Claims, if the same
Claim is an Allowed Claim against more than one Debtor (such as by guaranty,

                                        7
<Page>

subrogation, contribution obligations, joint and/or several liability, or
otherwise), then for purposes of distribution under this Plan such Claims shall
not be aggregated but shall constitute one Allowed Claim in the amount of the
largest such Allowed Claim against the Debtor against which such largest Allowed
Claim is held. With respect to Allowed Claims in Classes 1C, 2C and 3C
(Convertible Secured Note Claims), the term "Pro Rata" means proportionately, so
that e.g., with respect to a distribution on account of an Allowed Claim, the
ratio of (a)(i) the amount of property distributed on account of a particular
Allowed Claim to (ii) the amount of the Allowed Claim, is the same as the ratio
of (b)(i) the amount of property distributed on account of all Allowed Claims in
Classes 1C, 2C and 3C in aggregate to (ii) the amount of all Allowed Claims in
Classes 1C, 2C and 3C in the aggregate. The same adjustment shall be made with
respect to Allowed Claims in Classes 1G, 2G and 3G (General Unsecured Claims),
i.e., the term "Pro Rata" means proportionately, so that e.g., with respect to a
distribution on account of an Allowed Claim, the ratio of (a)(i) the amount of
property distributed on account of a particular Allowed Claim to (ii) the amount
of the Allowed Claim, is the same as the ratio of (b)(i) the amount of property
distributed on account of all Allowed Claims in Classes 1G, 2G and 3G in the
aggregate to (ii) the amount of all Allowed Claims in Classes 1G, 2G and 3G in
the aggregate.

        "Professional Fees" means all compensation and reimbursement of expenses
Allowed to Professionals pursuant to Section 330, 331 or 503(b) of the
Bankruptcy Code.

        "Professionals" means a Person or Entity employed pursuant to a Final
Order in accordance with Section 327 or 1103 of the Bankruptcy Code and to be
compensated for services rendered prior to the Effective Date, pursuant to
Sections 327, 328, 329, 330 and 331 of the Bankruptcy Code and the attorneys,
financial advisors and other professionals retained by the Committee in the
event that their fees and expenses are subject to approval of the Bankruptcy
Court.

        "Reorganized Debtors" means the Debtors and any successors thereto, by
merger, consolidation or otherwise, on or after the Effective Date.

        "Reorganized FFSI" means FFSI as reorganized on and after the Effective
Date.

        "Reorganized FCC" means FCC, as reorganized on and after the Effective
Date.

        "Reorganized FCC Certificate of Incorporation" means the Second Amended
and Restated Certificate of Incorporation of Focal Communications Corporation to
be filed by the Debtors as part of the Plan Supplement.

        "Reorganized FCC Common Stock" means the common stock of Reorganized
FCC, per value $.01 per share authorized pursuant to the Reorganized FCC
Certificate of Incorporation.

        "Reorganized FCC Five Percent Warrants" means the warrants, authorized
by and pursuant to the Reorganized FCC Warrant Agreement, expiring on the
earlier of the third anniversary of the Effective Date or the date of the
occurrence of a Significant Transaction (as defined in the Reorganized FCC
Certificate of Incorporation), each of which warrants represents the right,
subject to the provisions of the Reorganized FCC Warrant Agreement, to purchase
from Reorganized FCC one fully paid and non-assessable share of Reorganized FCC
Common Stock at an exercise price as of the Effective Date of $6.50 per share.

        "Reorganized FCC Series A Preferred Stock" means series A redeemable
voting convertible preferred stock of Reorganized FCC, par value $.01 per share,
authorized pursuant to the Reorganized FCC Certificate of Incorporation, in the
aggregate amount of $65 million, (a) which shall be subordinated to the claims
in respect of the Restructured Bank Credit Facility in accordance with the
subordination terms to be filed with the Plan Supplement which terms shall
govern the Reorganized FCC Preferred Stock and which terms shall include
provisions preventing the payment of cash dividends while any principal and
interest under the Restructured Bank Credit Facility are outstanding, and (b)
which shall, prior to giving effect to dilution from the Reorganized FCC
Warrants (and management options), convert into 100% of outstanding Reorganized
FCC Common Stock.

                                        8
<Page>

        "Reorganized FCC Twenty Percent Warrants" means the warrants, authorized
by and pursuant to the Reorganized FCC Warrant Agreement, expiring on the
earlier of the fifth anniversary of the Effective Date or the date of the
occurrence of a Significant Transaction (as defined in the Reorganized FCC
Certificate of Incorporation), each of which warrants represents the right,
subject to the provisions of the Reorganized FCC Warrant Agreement, to purchase
from Reorganized FCC one fully paid and non-assessable share of Reorganized FCC
Common Stock at an exercise price per share as of the Effective Date of $12.93
per share.

        "Reorganized FCC Warrant Agreement" means the warrant agreement pursuant
to which the Reorganized FCC Warrants will be issued.

        "Reorganized FCC Warrants" means the Reorganized FCC Five Percent
Warrants and the Reorganized FCC Twenty Percent Warrants.

        "Reorganized Subsidiary Debtors" means the Subsidiary Debtors and any
successors thereto, by merger, consolidation or otherwise, on or after the
Effective Date.

        "Restructured Bank Credit Facility" means that certain restructured and
reinstated credit facility in the amount of approximately $78 million provided
to the Reorganized Debtors by the Bank Group containing terms and conditions
substantially similar in all economic respects to those set forth in the Bank
Group Term Sheet attached as EXHIBIT 1 to this Plan and as more particularly set
forth in the Restructured Bank Credit Facility to be filed with the Plan
Supplement.

        "Restructured NTFC Capital Loan Facility" means that certain
restructured equipment loan facility in the amount of $3.0 million provided to
the Reorganized Debtors by NTFC Capital containing terms and conditions
substantially similar in all economic respects to those previously agreed to
with the Agents and as more particularly set forth in the Restructured NTFC
Capital Loan Facility to be filed with the Plan Supplement.

        "Retained Causes of Action" means all claims, causes of action, chooses
in action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, third-party claims, counterclaims,
and crossclaims (including, but not limited to, all claims and any avoidance,
recovery, subordination or other actions against insiders and/or any other
Entities (other than current or former members of the Bank Group) under the
Bankruptcy Code, including Sections 506, 510, 542, 543, 544, 545, 547, 548, 549,
500, 551, and 553 of the Bankruptcy Code or otherwise) of the Debtors, the
Debtors in Possession (including, but not limited to, those actions listed in
Section 5.1(b)) that are or may be pending on the Effective Date or are
instituted by the Debtors after the Effective Date against any Entity (other
than current of former members of the Bank Group), based in law or equity,
including, but not limited to, under the Bankruptcy Code, whether direct,
indirect, derivative, or otherwise and whether asserted or unasserted as of the
date of entry of the Confirmation Order.

        "Schedules" means the schedules of assets and liabilities, schedules of
executory contracts, and the statement of financial affairs of one or more of
the Debtors filed pursuant to Section 521 of the Bankruptcy Code, and in
accordance with the Official Bankruptcy Forms and the Bankruptcy Rules, as each
has been, or may be, amended and supplemented from time to time.

        "Secured Claim" means, with respect to any Debtor, a Claim that is
secured by a Lien on, or security interest in, property of any such Debtors, or
that has the benefit of rights of setoff under Section 553 of the Bankruptcy
Code, but only to the extent of the value of the creditor's interest in such
Debtor's interest in such property, or to the extent of the amount subject to
setoff, which value shall be determined as provided in Section 506 of the
Bankruptcy Code.

        "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

                                        9
<Page>

        "Significant Transaction" shall have the meaning given to such term in
the Reorganized FCC Certificate of Incorporation.

        "Statement of Officers and Directors" means a statement filed with the
Bankruptcy Court indicating the officers and directors of the Reorganized
Debtors, and any other information, if any, required by Section 5.5(b) of the
Plan.

        "Subordinated Pursuant to Section 510(b)" means a Claim against any of
the Debtors in IN RE FOCAL COMMUNICATIONS CORP. INITIAL PUBLIC OFFERING
SECURITIES LITIGATION, 01 Civ. 10111 (SAS) pending in the United States District
Court, Southern District of New York (the "IPO Litigation"), and any other Claim
that is subordinated, pursuant to section 510(b) of the Bankruptcy Code, but
does not include a Claim that is subordinated pursuant to sections 510(a),
510(c), or any other provision of the Bankruptcy Code or applicable law.

        "Subsidiary Debtors" means the Debtors other than FCC and FFSI.

        "Support Agreements" means the Bank Group Support Agreement and the
Convertible Noteholder Support Agreement.

        "Term Sheets" means, collectively, the Bank Group Term Sheet attached as
EXHIBIT 1 to this Plan, the Convertible Noteholder Term Sheet attached as
EXHIBIT 2 to this Plan, and the NTFC Capital Term Sheet attached as EXHIBIT 3 to
this Plan.

        "Unimpaired Claim" means a Claim that is not impaired within the meaning
of Section 1124 of the Bankruptcy Code.

        "Voting Instructions" means the Instructions for voting on the Plan
contained in the section of the Disclosure Statement entitled "SOLICITATION;
VOTING PROCEDURES" and in the Ballots.

Section 1.3         RULES OF INTERPRETATION AND COMPUTATION OF TIME

        (a) For purposes of the Plan: (i) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter
gender; (ii) any reference in the Plan to a contract, instrument, release,
indenture or other agreement or document being in a particular form or on
particular terms and conditions means that such document shall be substantially
in such form or substantially on such terms and conditions; (iii) any reference
in the Plan to an existing document or exhibit filed, or to be filed, shall mean
such document or exhibit, as it may have been or may be amended, modified or
supplemented; (iv) unless otherwise specified, all references in the Plan to
Sections, Articles and Exhibits are references to Sections, Articles and
Exhibits of or to the Plan; (v) the words "herein" and "hereto" refer to the
Plan in its entirety rather than to a particular portion of the Plan; (vi)
captions and headings to Articles and Sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the
interpretation of the Plan; (vii) the rules of construction set forth in Section
102 of the Bankruptcy Code shall apply; and (viii) any term used in capitalized
form in the Plan that is not defined herein but that is used in the Bankruptcy
Code or the Bankruptcy Rules shall have the meaning assigned to such term in the
Bankruptcy Code or the Bankruptcy Rules, as the case may be.

        (b) In computing any period of time prescribed or allowed by the Plan,
the provisions of Bankruptcy Rule 9006(a) shall apply.

                                   ARTICLE II
                     ADMINISTRATIVE AND PRIORITY TAX CLAIMS

Section 2.1         ADMINISTRATIVE CLAIMS

                                       10
<Page>

        (a) Unless otherwise provided for herein, each Holder of an
Administrative Claim (including, without limitation all compensation and
reimbursement of expenses of Professionals pursuant to Section 327, 328, 329,
330, 331, 503(b)(l), 503(b)(4) or 1103 of the Bankruptcy Code) shall be paid
100% of the unpaid Allowed amount of such Administrative Claim in Cash on or as
soon as reasonably practicable after the later of (a) the Effective Date or (b)
the date such Administrative Claim becomes Allowed (and such payment shall be in
complete satisfaction of amounts payable to such Holder that are attributable to
the period prior to the Administrative Claims bar date, if one has been
established or, if not, that are attributable to the period prior to the
Effective Date); provided, however, that an Administrative Claim representing
obligations incurred in the ordinary course of business consistent with past
practices shall be paid in full or performed by the Debtors or Reorganized
Debtors, as the case may be, in accordance with its terms and conditions, in the
ordinary course of business consistent with past practices; provided, further,
however, that an Allowed Administrative Claim may be paid on such other terms
and conditions as are agreed to between the Debtors or the Reorganized Debtors,
as the case may be, and the Holder of such Allowed Administrative Claim. The
Debtors intend to file a motion prior to the Confirmation Date seeking
establishment of an Administrative Claims bar date.

        (b) All final applications for Professional Fees for services rendered
in connection with the Chapter 11 Cases prior to the Confirmation Date shall be
filed with the Bankruptcy Court not later than thirty (30) days after the
Effective Date.

Section 2.2         PRIORITY TAX CLAIMS

        Each Allowed Priority Tax Claim shall be paid by the Debtors in full, in
Cash upon the later of (a) the Effective Date, (b) the date upon which there is
a Final Order allowing such Allowed Priority Tax Claim, (c) the date such an
Allowed Priority Tax Claim would have been due and payable if the Chapter 11
Cases had not been commenced, or (d) as may be agreed upon between the Holder of
such Allowed Priority Tax Claim and the Debtors; provided, however, that (i)
each Debtor may, at its option, in lieu of payment in full of an Allowed
Priority Tax Claim on the Effective Date, make Cash payments on account of such
Allowed Priority Tax Claim, deferred to the extent permitted pursuant to Section
1129(a)(9)(C) of the Bankruptcy Code and, in such event, interest shall be paid
on the unpaid portion of such Allowed Priority Tax Claim at a rate to be agreed
upon by the Debtors and the applicable governmental unit or as determined by the
Bankruptcy Court, and (ii) in the event an Allowed Priority Tax Claim may also
be classified as an Allowed Other Secured Claim, such Debtor may, at its option,
elect to treat such Allowed Priority Tax Claim as an Allowed Other Secured
Claim.

                                   ARTICLE III
                     CLASSIFICATION AND TREATMENT OF CLAIMS
                              AND EQUITY INTERESTS

Section 3.1         CLASSIFICATION

        The categories of Claims and Equity Interests listed in this Article III
classify Claims and Equity Interests for all purposes, including voting,
confirmation and Distribution pursuant to the Plan and pursuant to Sections 1122
and 1123(a)(l) of the Bankruptcy Code unless the Holder of a Claim agrees to be
classified otherwise or is re-classified by Final Order of the Bankruptcy Court.
A Claim or Equity Interest shall be deemed classified in a particular Class only
to the extent that the Claim or Equity Interest qualifies within the description
of that Class and shall be deemed classified in a different Class to the extent
that any remainder of such Claim or Equity Interest qualifies within the
description of such different Class. A Claim or Equity Interest is in a
particular Class only to the extent that such Claim or Equity Interest is
Allowed in that Class and has not been paid, released or otherwise settled prior
to the Effective Date.

        Claims (except for Administrative Claims and Priority Tax Claims, which
are not required to be classified pursuant to Section 1123(a)(l) of the
Bankruptcy Code) and Equity Interests are classified as set forth below in this
Article III.

                                       11
<Page>

<Table>
<Caption>
                                                        FCC
       -----------------------------------------------------------------------------------------------------------
         CLASS                        CLAIM                       STATUS                      VOTING RIGHTS
       -----------------------------------------------------------------------------------------------------------
           <S>           <C>                                    <C>                       <C>
           1A            Other Priority Claims                  Unimpaired                not entitled to vote

           1B            Bank Claims                            Impaired                  entitled to vote

           1C            Convertible Secured Note Claims        Impaired                  entitled to vote

           1D            NTFC Capital Claims                    Impaired                  entitled to vote

           1E            Other Secured Claims                   Unimpaired                not entitled to vote

           1F            Convenience Claims                     Unimpaired                not entitled to vote

           1G            General Unsecured Claims               Impaired                  entitled to vote

           1H            FCC Preferred Stock Interests          Impaired                  not entitled to vote

           1I            FCC Common Stock Interests             Impaired                  not entitled to vote
</Table>

<Table>
<Caption>
                                                      FFSI
       -----------------------------------------------------------------------------------------------------------
         CLASS                        CLAIM                       STATUS                      VOTING RIGHTS
       -----------------------------------------------------------------------------------------------------------
           <S>           <C>                                    <C>                       <C>
           2A            Other Priority Claims                  Unimpaired                not entitled to vote

           2B            Bank Claims                            Impaired                  entitled to vote

           2C            Convertible Secured Note Claims        Impaired                  entitled to vote

           2D            NTFC Capital Claims                    Impaired                  entitled to vote

           2E            Other Secured Claims                   Unimpaired                not entitled to vote

           2F            Convenience Claims                     Unimpaired                not entitled to vote

           2G            General Unsecured Claims               Impaired                  entitled to vote

           2H            Intercompany Interests                 Unimpaired                not entitled to vote

</Table>

<Table>
<Caption>
                                                    SUBSIDIARY DEBTORS
       -----------------------------------------------------------------------------------------------------------
         CLASS                        CLAIM                       STATUS                      VOTING RIGHTS
       -----------------------------------------------------------------------------------------------------------
           <S>           <C>                                    <C>                       <C>
           3A            Other Priority Claims                  Unimpaired                not entitled to vote

           3B            Bank Claims                            Impaired                  entitled to vote

           3C            Convertible Secured Note Claims        Impaired                  entitled to vote

           3D            NTFC Capital Claims                    Impaired                  entitled to vote

           3E            Other Secured Claims                   Unimpaired                not entitled to vote

           3F            Convenience Claims                     Unimpaired                not entitled to vote

           3G            General Unsecured Claims               Impaired                  entitled to vote

           3H            Intercompany Interests                 Unimpaired                not entitled to vote
</Table>

                                       12
<Page>

Section 3.2         ACCEPTANCES AND REJECTIONS

        Each of FCC Classes 1A, 1E and 1F is unimpaired under the Plan and
Holders of Claims in such Classes are conclusively presumed to have accepted the
Plan pursuant to Section 1126(f) of the Bankruptcy Code, and the votes of
Holders in such Classes will not be solicited. Holders of Claims in FCC Classes
1B, 1C, 1D and 1G are impaired and are entitled to vote to accept or reject the
Plan. Holders of Claims or Equity Interests in FCC Classes 1H and 1I are
impaired by the Plan and will not receive or retain any property under the Plan.
Pursuant to Section 1126(g) of the Bankruptcy Code, the Holders of Claims or
Equity Interests in FCC Classes 1H and 1I are deemed to reject the Plan, and the
votes of Holders in such Class will not be solicited.

        Each of FFSI Classes 2A, 2E, 2F and 2H is unimpaired under the Plan and
Holders of Claims or Equity Interests in such Classes are conclusively presumed
to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code,
and the votes of Holders in such Classes will not be solicited. Holders of
Claims in FFSI Classes 2B, 2C, 2D and 2G are impaired and are entitled to vote
to accept or reject the Plan.

        Each of Subsidiary Debtors Classes 3A, 3E, 3F and 3H is unimpaired under
the Plan and Holders of Claims or Equity Interests in such Classes are
conclusively presumed to have accepted the Plan pursuant to Section 1126(f) of
the Bankruptcy Code, and the votes of Holders in such Classes will not be
solicited. Holders of Claims in Subsidiary Debtors Classes 3B, 3C, 3D and 3G are
impaired and are entitled to vote to accept or reject the Plan.

Section 3.3         CLASSIFICATION AND TREATMENT OF CLAIMS AGAINST AND EQUITY
                    INTERESTS IN FCC

        (a) FCC Class 1A - Other Priority Claims

                    (i)     TREATMENT: The legal, equitable and contractual
                            rights of the Holders of Allowed Other Priority
                            Claims against FCC are unaltered by the Plan. Unless
                            the Holder of such Claim and FCC agree to a
                            different treatment, each Holder of an Allowed FCC
                            Other Priority Claim shall receive one of the
                            following alternative treatments, at the election of
                            FCC:

                            (A)  to the extent then due and owing on the
                                 Effective Date, such Claim will be paid in
                                 full, in Cash by Reorganized FCC;

                            (B)  to the extent not due and owing on the
                                 Effective Date, such Claim will be paid in full
                                 in Cash by Reorganized FCC on the date on which
                                 such Claim becomes due and owing in the
                                 ordinary course of business and in accordance
                                 with the terms and conditions of any agreements
                                 thereto; or

                            (C)  such Claim otherwise will be treated in any
                                 manner such that FCC Class 1A shall not be
                                 impaired pursuant to Section 1124 of the
                                 Bankruptcy Code.

                            Any default with respect to any FCC Other Priority
                            Claim that existed immediately prior to the filing
                            of the Chapter 11 Cases shall be deemed cured upon
                            the Effective Date.

                    (ii)    VOTING: FCC Class 1A is not Impaired. The Holders of
                            Allowed FCC Other Priority Claims are conclusively
                            presumed to have accepted the Plan pursuant to
                            Section 1126(f) of the Bankruptcy Code and are not
                            entitled to vote to accept or reject the Plan.

                                       13
<Page>

        (b) FCC Class 1B - Bank Claims

                    (i)     TREATMENT: Unless the Holder of such an Allowed
                            Claim and FCC agree to a different treatment, each
                            Holder of an Allowed Bank Claim against FCC shall,
                            in accordance with the Bank Group Support Agreement,
                            (A) have its Bank Claim reinstated, subject to
                            modifications to the Prepetition Credit Facility as
                            set forth in the Restructured Bank Credit Facility,
                            and (B) receive on the Effective Date, an amount
                            equal to its Pro Rata share of the lesser of (I)
                            $6.2 million and (II) the amount by which (a) the
                            pro forma available cash balance of FCC and its
                            subsidiaries upon consummation of the Plan
                            (excluding all restricted cash and net of all
                            projected fees, expenses, taxes and other costs
                            related or contemplated by the restructuring)
                            exceeds (b) $10 million, which payment in this
                            clause (B) will be applied in reduction of the
                            Allowed Bank Claims and in reduction of the
                            indebtedness under the Prepetition Credit Facility.
                            In addition, on the Effective Date, FCC (x) shall
                            pay to each Bank Group lender that is party to the
                            Bank Group Support Agreement that lender's Pro Rata
                            share of (i) $500,000, plus (ii) 2% of the
                            outstanding balance of the Prepetition Credit
                            Facility, after giving effect to any reduction by
                            the amount of the payment made pursuant to clause
                            (B) of this Section 3.3(b)(i) above, and (y) shall
                            pay an arrangement fee of $500,000 to the Agents,
                            which shall be divided equally ($250,000/$250,000)
                            between the Agents. Any default with respect to any
                            Bank Claim against FCC that existed immediately
                            prior to the filing of the Chapter 11 Cases shall be
                            deemed cured upon the Effective Date.
                            Notwithstanding Section 1141(c) or any other
                            provision of the Bankruptcy Code, all outstanding
                            prepetition liens on any property of the Debtors
                            granted to the Agents under the Prepetition Credit
                            Facility shall survive the Effective Date and
                            continue in accordance with the terms of the
                            Restructured Bank Credit Facility, except to the
                            extent determined by the Bankruptcy Court to be
                            invalid, unenforceable or of lesser priority.

                    (ii)    VOTING: FCC Class 1B is Impaired. The Holders of
                            Bank Claims against FCC are entitled to vote to
                            accept or reject the Plan.

        (c) FCC Class 1C - Convertible Secured Note Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FCC agree to a different treatment (that does
                            not adversely affect the treatment afforded to Class
                            1B - Bank Claims as set forth above), each Holder of
                            an Allowed Convertible Secured Note Claim against
                            FCC shall receive, in accordance with the
                            Convertible Secured Noteholder Term Sheet attached
                            as EXHIBIT 2, its Pro Rata share of eighty-five
                            percent (85%) of $65 million of stated value of
                            Reorganized FCC Series A Preferred Stock (which
                            stated value represents on an as-converted basis on
                            the Effective Date of the Plan eighty-five percent
                            (85%) of the total equity value of Reorganized FCC
                            prior to any dilution from the Reorganized FCC
                            Warrants or options issued pursuant to the New Key
                            Employee Incentive Plan) in exchange for the amount
                            of its Allowed Claim. Any default with respect to
                            any Convertible Secured Note Claim against FCC that
                            existed immediately prior to the filing of the
                            Chapter 11 Cases shall be deemed cured upon the
                            Effective Date.

                    (ii)    VOTING: FCC Class 1C is Impaired. The Holders of
                            Allowed Convertible Secured Note Claims against FCC
                            are entitled to vote to accept or reject the Plan.

        (d) FCC Class 1D - NTFC Capital Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FCC agree to a different treatment, (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 1B - Bank Claims or Class 1C -
                            Convertible Secured Note Claims as set forth above)
                            each Holder of an Allowed NTFC Capital Claim against
                            FCC shall receive in exchange

                                       14
<Page>

                            for the amount of its Allowed Claim, in accordance
                            with the NTFC Capital Term Sheet attached as
                            EXHIBIT 3, its Pro Rata interest in the Restructured
                            NTFC Capital Loan Facility. Any default with respect
                            to any NTFC Capital  Claim  against FCC that existed
                            immediately  prior to the  filing of the  Chapter 11
                            Cases shall be deemed cured upon the Effective Date.

                    (ii)    VOTING: FCC Class 1D is Impaired. The Holders of
                            Allowed NTFC Capital Claims against FCC are entitled
                            to vote to accept or reject the Plan.

        (e) FCC Class 1E - Other Secured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FCC agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 1B - Bank Claims, Class 1C -
                            Convertible Secured Note Claims or Class 1D - NTFC
                            Capital Claims as set forth above), each Holder of
                            an Allowed Other Secured Claim against FCC shall
                            receive one of the following alternative treatments,
                            at the election of FCC:

                            (A)  the legal, equitable and contractual rights of
                                 the Holders of Allowed FCC Other Secured Claims
                                 shall be unaltered by this Plan;

                            (B)  with respect to a Holder having a first
                                 priority security interest in Collateral
                                 securing such Claim, FCC shall surrender all
                                 Collateral securing such Claim to the Holder
                                 thereof, without representation or warranty by
                                 or recourse against FCC or Reorganized FCC; or

                            (C)  such Claim will be otherwise treated in any
                                 other manner so that such Claim shall be
                                 rendered unimpaired pursuant to Section 1124 of
                                 the Bankruptcy Code.

                            Any default with respect to any FCC Other Secured
                            Claim that existed immediately prior to the filing
                            of the Chapter 11 Cases shall be deemed cured upon
                            the Effective Date.

                    (ii)    VOTING: FCC Class 1E is not Impaired. The Holders of
                            Allowed FCC Other Unsecured Claims are conclusively
                            presumed to have accepted the Plan pursuant to
                            Section 1126(f) of the Bankruptcy Code and are not
                            entitled to vote to accept or reject the Plan.

        (f) FCC Class 1F - Convenience Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FCC agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 1B - Bank Claims, Class 1C -
                            Convertible Secured Note Claims, Class 1D - NTFC
                            Capital Claims or Class 1E - Other Secured Claims as
                            set forth above), each Holder of an Allowed
                            Convenience Claim against FCC shall receive on the
                            Effective Date the amount of its Allowed Claim.

                    (ii)    VOTING: FCC Class 1F is not Impaired. The Holders of
                            Allowed FCC Convenience Claims are conclusively
                            presumed to have accepted the Plan pursuant to
                            Section 1126(f) of the Bankruptcy Code and are not
                            entitled to vote to accept or reject the Plan.

        (g) FCC Class 1G - General Unsecured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FCC agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 1B - Bank Claims, Class 1C -
                            Convertible Secured Note Claims, Class 1D - NTFC

                                       15
<Page>

                            Capital Claims, Class 1E - Other Secured Claims or
                            Class 1F - FCC Convenience Claims as set forth
                            above), each Holder of an Allowed General Unsecured
                            Claim against FCC shall receive (a) its Pro Rata
                            share of fifteen percent (15%) of $65 million stated
                            value of Reorganized FCC Series A Preferred Stock
                            (which stated value represents on an as-converted
                            basis on the Effective Date of the Plan fifteen
                            percent (15%) of the total equity value of
                            Reorganized FCC prior to any dilution from the
                            Reorganized FCC Warrants or options issued pursuant
                            to the New Key Employee Incentive Plan), and (b) its
                            Pro Rata share of 588,235 Reorganized FCC Five
                            Percent Warrants and its Pro Rata share of 2,941,176
                            Reorganized FCC Twenty Percent Warrants, in exchange
                            for the amount of its Allowed Claim. In addition,
                            the Debtors will pay the fees and expenses incurred
                            through the Effective Date, not to exceed $75,000,
                            of the Indenture Trustee under FCC's 2008 Unsecured
                            Bonds and 2010 Unsecured Bonds.

                    (ii)    VOTING: FCC Class 1G is Impaired. The Holders of FCC
                            General Unsecured Claims against FCC are entitled to
                            vote to accept or reject the Plan.

        (h) FCC Class 1H - FCC Preferred Stock Interests

                    (i)     TREATMENT: On the Effective Date, Holders of FCC
                            Preferred Stock Interests shall not receive any
                            Distribution under the Plan.

                    (ii)    VOTING: FCC Class 1H is Impaired. The Holders of FCC
                            Preferred Stock Interests are conclusively presumed
                            to have rejected the Plan pursuant to Section
                            1126(g) of the Bankruptcy Code and are not entitled
                            to vote to accept or reject the Plan.

        (i) FCC Class 1I - FCC Common Stock Interests

                    (i)     TREATMENT: On the Effective Date, Holders of FCC
                            Common Stock Interests shall not receive any
                            Distribution under the Plan.

                    (ii)    VOTING: FCC Class 1I is Impaired. The Holders of FCC
                            Common Stock Interests are conclusively presumed to
                            have rejected the Plan pursuant to Section 1126(g)
                            of the Bankruptcy Code and are not entitled to vote
                            to accept or reject the Plan.

Section 3.4         CLASSIFICATION AND TREATMENT OF CLAIMS AGAINST AND EQUITY
                    INTERESTS IN FFSI

        (a) FFSI Class 2A - Other Priority Claims

                    (i)     TREATMENT: The legal, equitable and contractual
                            rights of the Holders of Allowed Other Priority
                            Claims against FFSI are unaltered by the Plan.
                            Unless the Holder of an Allowed FFSI Other Priority
                            Claim and FFSI agree to a different treatment, each
                            Holder of an Allowed FFSI Other Priority Claim shall
                            receive one of the following alternative treatments,
                            at the election of FFSI:

                            (A)  to the extent then due and owing on the
                                 Effective Date, such Claim will be paid in
                                 full, in Cash by Reorganized FFSI;

                            (B)  to the extent not due and owing on the
                                 Effective Date, such Claim will be paid in full
                                 in Cash by Reorganized FFSI when and as such
                                 Claim becomes due and owing in the ordinary
                                 course of business in accordance with the terms
                                 and conditions of any agreements thereto; or

                            (C)  such Claim otherwise will be treated in any
                                 manner such that FFSI Class 2A shall not be
                                 Impaired pursuant to Section 1124 of the
                                 Bankruptcy Code.

                                       16
<Page>

                            Any default with respect to any Other Priority Claim
                            against FFSI that existed immediately prior to the
                            filing of the Chapter 11 Cases shall be deemed cured
                            upon the Effective Date.

                    (ii)    VOTING: FFSI Class 2A is not Impaired. The Holders
                            of Allowed Other Priority Claims against FFSI are
                            conclusively presumed to have accepted the Plan
                            pursuant to Section 1126(f) of the Bankruptcy Code
                            and are not entitled to vote to accept or reject the
                            Plan.

        (b) FFSI Class 2B - Bank Claims

                    (i)     TREATMENT: Unless the Holder of such an Allowed
                            Claim and FFSI agree to a different treatment, each
                            Holder of an Allowed Bank Claim against FFSI shall,
                            in accordance with the Bank Group Support Agreement,
                            (A) have its Bank Claim reinstated, subject to
                            modifications to the Prepetition Credit Facility as
                            set forth in the Restructured Bank Credit Facility,
                            and (B) receive on the Effective Date, the amounts
                            more particularly described in Section 3.3(b)(i) of
                            this Plan, and the Agents shall receive the amounts
                            more particularly described in the second sentence
                            of Section 3.3(b)(i). Any default with respect to
                            any Bank Claim against FFSI that existed immediately
                            prior to the filing of the Chapter 11 Cases shall be
                            deemed cured upon the Effective Date.
                            Notwithstanding Section 1141(c) or any other
                            provision of the Bankruptcy Code, all outstanding
                            prepetition liens on any property of the Debtors
                            granted to the Agents under the Prepetition Credit
                            Facility shall survive the Effective Date and
                            continue in accordance with the terms of the
                            Restructured Bank Credit Facility, except to the
                            extent determined by the Bankruptcy Court to be
                            invalid, unenforceable or of lesser priority.

                    (ii)    VOTING: FFSI Class 2B is Impaired. The Holders of
                            Bank Claims against FFSI are entitled to vote to
                            accept or reject the Plan.

        (c) FFSI Class 2C - Convertible Secured Note Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FFSI agree to a different treatment, (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 2B - Bank Claims as set forth
                            above) each Holder of an Allowed Convertible Secured
                            Note Claim against FFSI shall receive, in accordance
                            with the Convertible Noteholder Term Sheet attached
                            as EXHIBIT 2, its Pro Rata share of eighty-five
                            percent (85%) of $65 million stated value of
                            Reorganized FCC Series A Preferred Stock (which
                            stated value represents on an as-converted basis on
                            the Effective Date of the Plan eighty-five percent
                            (85%) of the total equity value of Reorganized FCC
                            prior to any dilution from Reorganized FCC Warrants
                            or options issued pursuant to the New Key Employee
                            Incentive Plan) in exchange for the amount of its
                            Allowed Claim. Any default with respect to any
                            Convertible Secured Note Claim against FFSI that
                            existed immediately prior to the filing of the
                            Chapter 11 Cases shall be deemed cured upon the
                            Effective Date.

                    (ii)    VOTING: FFSI Class 2C is Impaired. The Holders of
                            Allowed Convertible Secured Note Claims against FFSI
                            are entitled to vote to accept or reject the Plan.

        (d) FFSI Class 2D - NTFC Capital Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FFSI agree to a different treatment, (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 2B - Bank Claims or Class 2C -
                            Convertible Secured Note Claims as set forth above),
                            each Holder of an Allowed NTFC Capital Claim against
                            FFSI shall receive in exchange for the amount of its
                            Allowed Claim, in accordance with the NTFC Capital
                            Term Sheet, attached as EXHIBIT 3, its Pro Rata
                            interest in the Restructured NTFC Capital Loan

                                       17
<Page>

                            Facility. Any default with respect to any NTFC
                            Capital Claim against FFSI that existed immediately
                            prior to the filing of the Chapter 11 Cases shall be
                            deemed cured upon the Effective Date.

                    (ii)    VOTING: FFSI Class 2D is Impaired. The Holders of
                            Allowed NTFC Capital Claims against FFSI are
                            entitled to vote to accept or reject the Plan.

        (e) FFSI Class 2E - Other Secured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FFSI agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 2B - Bank Claims, Class 2C -
                            Convertible Secured Note Claims or Class 2D - NTFC
                            Capital Claims as set forth above), each Holder of
                            an Allowed Other Secured Claim against FFSI shall
                            receive one of the following alternative treatments,
                            at the election of FFSI:

                            (A)  the legal, equitable and contractual rights of
                                 the Holders of Allowed FFSI Other Secured
                                 Claims shall be unaltered by this Plan;

                            (B)  with respect to a Holder having a first
                                 priority security interest in Collateral
                                 securing such Claim, FFSI shall surrender all
                                 Collateral securing such Claim to the Holder
                                 thereof, without representation or warranty by
                                 or recourse against FFSI or Reorganized FFSI;
                                 or

                            (C)  such Claim will be otherwise treated in any
                                 other manner so that such Claim shall be
                                 rendered unimpaired pursuant to Section 1124 of
                                 the Bankruptcy Code.

                            Any default with respect to any FFSI Other Secured
                            Claim that existed immediately prior to the filing
                            of the Chapter 11 Cases shall be deemed cured upon
                            the Effective Date.

                    (ii)    VOTING: FFSI Class 2E is not Impaired. The Holders
                            of Allowed FFSI Other Unsecured Claims are
                            conclusively presumed to have accepted the Plan
                            pursuant to Section 1126(f) of the Bankruptcy Code
                            and are not entitled to vote to accept or reject the
                            Plan.

        (f) FFSI Class 2F - Convenience Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FFSI agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 2B - Bank Claims, Class 2C -
                            Convertible Secured Note Claims, Class 2D - NTFC
                            Capital Claims or Class 2E - Other Secured Claims as
                            set forth above), each Holder of an Allowed
                            Convenience Claim against FFSI shall receive on the
                            Effective Date the amount of its Allowed Claim.

                    (ii)    VOTING: FFSI Class 2F is not Impaired. The Holders
                            of Allowed FFSI Convenience Claims are conclusively
                            presumed to have accepted the Plan pursuant to
                            Section 1126(f) of the Bankruptcy Code and are not
                            entitled to vote to accept or reject the Plan.

        (g) FFSI Class 2G - General Unsecured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and FFSI agree to a different treatment (that does
                            not adversely affect the treatment afforded to the
                            Holders of Class 2B - Bank Claims, Class 2C -
                            Convertible Secured Note Claims, Class 2D - NTFC
                            Capital Claims, Class 2E - Other Secured Claims or
                            Class 2F - FCC Convenience Claims as set forth
                            above), each Holder of an Allowed General Unsecured
                            Claim against

                                       18
<Page>

                            FFSI shall receive (a) its Pro Rata share of fifteen
                            percent (15%) of $65 million stated value of
                            Reorganized FCC Series A Preferred Stock (which
                            stated value represents on an as-converted basis on
                            the Effective Date of the Plan fifteen percent (15%)
                            of the total equity value of Reorganized FCC prior
                            to any dilution from Reorganized FCC warrants or
                            options issued pursuant to the New Key Employee
                            Incentive Plan), and (b) its Pro Rata share of
                            588,235 Reorganized FCC Five Percent Warrants and
                            its Pro Rata share of 2,941,176 Reorganized FCC
                            Twenty Percent Warrants, in exchange for the amount
                            of its Allowed Claim.

                    (ii)    VOTING: FFSI Class 2G is Impaired.

        (h) FFSI Class 2H - Intercompany Interests

                    (i)     TREATMENT: Each Intercompany Interest in FFSI shall
                            be an Allowed FFSI Intercompany Interest and each
                            holder of an Allowed FFSI Intercompany Interest
                            shall, on the Effective Date, retain its FFSI
                            Intercompany Interest.

                    (ii)    VOTING: FFSI Class 2H is not Impaired and the
                            Holders of FFSI Intercompany Interests are
                            conclusively presumed to have accepted the Plan
                            pursuant to Section 1126(f) of the Bankruptcy Code
                            and are not entitled to vote to accept or reject the
                            Plan.

Section 3.5         CLASSIFICATION AND TREATMENT OF CLAIMS AGAINST AND EQUITY
                    INTERESTS IN SUBSIDIARY DEBTORS

        (a) Subsidiary Debtors Class 3A - Other Priority Claims

                    (i)     TREATMENT: The legal, equitable and contractual
                            rights of the Holders of Allowed Other Priority
                            Claims against the Subsidiary Debtors are unaltered
                            by the Plan. Unless the Holder of an Allowed
                            Subsidiary Debtors Other Priority Claim and the
                            Subsidiary Debtors agree to a different treatment,
                            each Holder of an Allowed Subsidiary Debtors Other
                            Priority Claim shall receive one of the following
                            alternative treatments, at the election of the
                            Subsidiary Debtors:

                            (A)  to the extent then due and owing on the
                                 Effective Date, such Claim will be paid in
                                 full, in Cash by Reorganized Subsidiary
                                 Debtors;

                            (B)  to the extent not due and owing on the
                                 Effective Date, such Claim will be paid in full
                                 in Cash by Reorganized Subsidiary Debtors when
                                 and as such Claim becomes due and owing in the
                                 ordinary course of business in accordance with
                                 the terms and conditions of any agreements
                                 thereto; or

                            (C)  such Claim otherwise will be treated in any
                                 manner such that Subsidiary Debtors Class 3A
                                 shall not be Impaired pursuant to Section 1124
                                 of the Bankruptcy Code.

                            Any default with respect to any Other Priority Claim
                            that existed immediately prior to the filing of the
                            Chapter 11 Cases shall be deemed cured upon the
                            Effective Date.

                    (ii)    VOTING: Subsidiary Debtors Class 3A is not Impaired.
                            The Holders of Allowed Other Priority Claims are
                            conclusively presumed to have accepted the Plan
                            pursuant to Section 1126(f) of the Bankruptcy Code
                            and are not entitled to vote to accept or reject the
                            Plan.

                                       19
<Page>

        (b) Subsidiary Debtors Class 3B - Bank Claims

                    (i)     TREATMENT: Unless the Holder of such an Allowed
                            Claim and the Subsidiary Debtors agree to a
                            different treatment, each Holder of an Allowed Bank
                            Claim against the Subsidiary Debtors shall, in
                            accordance with the Bank Group Support Agreement,
                            (A) have its Bank Claim reinstated, subject to
                            modifications to the Prepetition Credit Facility as
                            set forth in the Restructured Bank Credit Facility,
                            and (B) receive on the Effective Date the amounts
                            more particularly described in Section 3.3(b)(i) of
                            this Plan, and the Agents shall receive the amounts
                            more particularly described in the second sentence
                            of Section 3.3(b)(i). Any default with respect to
                            any Bank Claim against the Subsidiary Debtors that
                            existed immediately prior to the filing of the
                            Chapter 11 Cases shall be deemed cured upon the
                            Effective Date. Notwithstanding Section 1141(c) or
                            any other provision of the Bankruptcy Code, all
                            outstanding prepetition liens on any property of the
                            Debtors granted to the Agents under the Prepetition
                            Credit Facility shall survive the Effective Date and
                            continue in accordance with the terms of the
                            Restructured Bank Credit Facility, except to the
                            extent determined by the Bankruptcy Court to be
                            invalid, unenforceable or of lesser priority.

                    (ii)    VOTING: Subsidiary Debtors Class 3B is Impaired. The
                            Holders of Bank Claims against the Subsidiary
                            Debtors are entitled to vote to accept or reject the
                            Plan.

        (c) Subsidiary Debtors Class 3C - Convertible Secured Note Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and the Subsidiary Debtors agree to a different
                            treatment, (that does not adversely affect the
                            treatment afforded to of Class 3B - Bank Claims as
                            set forth above), each Holder of an Allowed
                            Convertible Secured Note Claim against the
                            Subsidiary Debtors shall receive, in accordance with
                            the Convertible Secured Noteholder Term Sheet
                            attached as EXHIBIT 2, its Pro Rata share of
                            eighty-five percent (85%) of $65 million stated
                            value of Reorganized FCC Series A Preferred Stock
                            (which stated value represents on an as-converted
                            basis on the Effective Date of the Plan eighty-five
                            percent (85%) of the total equity value of
                            Reorganized FCC prior to any dilution from
                            Reorganized FCC Warrants or options issued pursuant
                            to the New Key Employee Incentive Plan) in exchange
                            for the amount of its Allowed Claim. Any default
                            with respect to any Convertible Secured Note Claim
                            against the Subsidiary Debtors that existed
                            immediately prior to the filing of the Chapter 11
                            Cases shall be deemed cured upon the Effective Date.

                    (ii)    VOTING: Subsidiary Debtors Class 3C is Impaired. The
                            Holders of Allowed Convertible Secured Note Claims
                            against the Subsidiary Debtors are entitled to vote
                            to accept or reject the Plan.

        (d) Subsidiary Debtors Class 3D - NTFC Capital Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and the Subsidiary Debtors agree to a different
                            treatment, (that does not adversely affect the
                            treatment afforded to the Holders of Class 3B - Bank
                            Claims or Class 3C - Convertible Secured Note Claims
                            as set above), each Holder of an Allowed NTFC
                            Capital Claim against the Subsidiary Debtors shall
                            receive in exchange for the amount of its Allowed
                            Claim, in accordance with the NTFC Capital Term
                            Sheet attached as EXHIBIT 3, its Pro Rata interest
                            in the Restructured NTFC Capital Loan Facility. Any
                            default with respect to any NTFC Capital Claim
                            against the Subsidiary Debtors that existed
                            immediately prior to the filing of the Chapter 11
                            Cases shall be deemed cured upon the Effective Date.

                                       20
<Page>

                    (ii)    VOTING: Subsidiary Debtors Class 3D is Impaired. The
                            Holders of Allowed NTFC Capital Claims against the
                            Subsidiary Debtors are entitled to vote to accept or
                            reject the Plan.

        (e) Subsidiary Debtors Class 3E - Other Secured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and the Subsidiary Debtors agree to a different
                            treatment, (that does not adversely affect the
                            treatment afforded to the Holders of Class 3B - Bank
                            Claims, Class 3C - Convertible Secured Note Claims
                            or the Holders of Class 3D - NTFC Capital Claims as
                            set forth above), each Holder of an Allowed Other
                            Secured Claim against the Subsidiary Debtors shall
                            receive one of the following alternative treatments,
                            at the election of the Subsidiary Debtors:

                            (A)  the legal, equitable and contractual rights of
                                 the Holders of Allowed Subsidiary Debtors Other
                                 Secured Claims shall be unaltered by this Plan;

                            (B)  with respect to a Holder having a first
                                 priority security interest in Collateral
                                 securing such Claim, the Subsidiary Debtors
                                 shall surrender all Collateral securing such
                                 Claim to the Holder thereof, without
                                 representation or warranty by or recourse
                                 against the Subsidiary Debtors or Reorganized
                                 Subsidiary Debtors; or

                            (C)  such Claim will be otherwise treated in any
                                 other manner so that such Claim shall be
                                 rendered unimpaired pursuant to Section 1124 of
                                 the Bankruptcy Code.

                            Any default with respect to any Subsidiary Debtors
                            Other Secured Claim that existed immediately prior
                            to the filing of the Chapter 11 Cases shall be
                            deemed cured upon the Effective Date.

                    (ii)    VOTING: Subsidiary Debtors Class 3E is not Impaired.
                            The Holders of Allowed Subsidiary Debtors Other
                            Unsecured Claims are conclusively presumed to have
                            accepted the Plan pursuant to Section 1126(f) of the
                            Bankruptcy Code and are not entitled to vote to
                            accept or reject the Plan.

        (f) Subsidiary Debtors Class 3F - Convenience Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and the Subsidiary Debtors agree to a different
                            treatment (that does not adversely affect the
                            treatment afforded to the Holders of Class 3B - Bank
                            Claims, Class 3C - Convertible Secured Note Claims,
                            Class 3D - NTFC Capital Claims or Class 3E - Other
                            Secured Claims as set forth above), each Holder of
                            an Allowed Convenience Claim against FCC shall
                            receive on the Effective Date the amount of its
                            Allowed Claim.

                    (ii)    VOTING: Subsidiary Debtors Class 3F is not Impaired.
                            The Holders of Allowed the Subsidiary Debtors
                            Convenience Claims are conclusively presumed to have
                            accepted the Plan pursuant to Section 1126(f) of the
                            Bankruptcy Code and are not entitled to vote to
                            accept or reject the Plan.

        (g) Subsidiary Debtors Class 3G - General Unsecured Claims

                    (i)     TREATMENT: Unless the Holder of such Allowed Claim
                            and the Subsidiary Debtors agree to a different
                            treatment (that does not adversely affect the
                            treatment afforded to the Holders of Class 3B - Bank
                            Claims, Class 3C - Convertible Secured Note Claims,
                            Class 3D - NTFC Capital Claims, Class 3E - Other
                            Secured Claims or Class 3F - FCC

                                       21
<Page>

                            Convenience Claims as set forth above), each Holder
                            of an Allowed General Unsecured Claim against the
                            Subsidiary Debtors shall receive (a) its Pro Rata
                            share of fifteen percent (15%) of $65 million stated
                            value of Reorganized FCC Series A Preferred Stock
                            (which stated value represents on an as-converted
                            basis on the Effective Date of the Plan fifteen
                            percent (15%) of the total equity value of
                            Reorganized FCC prior to any dilution from
                            Reorganized FCC Warrants or options pursuant to the
                            New Employee Incentive Plan), and (b) its Pro Rata
                            share of 588,235 Reorganized FCC Five Percent
                            Warrants and its Pro Rata share of 2,941,176
                            Reorganized FCC Twenty Percent Warrants, in exchange
                            for the amount of its Allowed Claim.

                    (ii)    VOTING: Subsidiary Debtors Class 3G is Impaired. The
                            Holders of General Unsecured Claims against the
                            Subsidiary Debtors are entitled to vote to accept or
                            reject the Plan.

        (h) Subsidiary Debtors Class 3H - Intercompany Interests

                    (i)     TREATMENT: Each Intercompany Interest against any of
                            the Subsidiary Debtors shall be an Allowed
                            Subsidiary Debtors Intercompany Interest and each
                            holder of an Allowed Subsidiary Debtors Intercompany
                            Interest shall, on the Effective Date, retain its
                            Subsidiary Debtors Intercompany Interest.

                    (ii)    VOTING: Subsidiary Debtors Class 3H is not Impaired
                            and the Holders of Subsidiary Debtors Intercompany
                            Interests are conclusively presumed to have accepted
                            the Plan pursuant to Section 1126(f) of the
                            Bankruptcy Code and are not entitled to vote to
                            accept or reject the Plan.

                                   ARTICLE IV
                                    CRAMDOWN

        The Plan contemplates the "cramdown" provisions contained in Section
1129(b) of the Bankruptcy Code with respect to Holders of Claims in Classes 1D,
1G, 1H, 1I, 2D, 2G, 3D and 3G. Therefore, the Debtors will request that the
Bankruptcy Court confirm the Plan in accordance with Section 1129(b) of the
Bankruptcy Code with respect to any Class that rejects, or is deemed to have
rejected the Plan. In addition, the Debtors may amend or modify the Plan in
accordance with Section 12.4 hereof.

                                    ARTICLE V
                      MEANS FOR IMPLEMENTATION OF THE PLAN

Section 5.1         CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN
                    REORGANIZED DEBTORS

        (a)         Each Debtor shall, as a Reorganized Debtor, continue to
exist after the Effective Date as a separate corporate entity, with all the
powers of a corporation or limited liability company, as applicable, under the
laws of the State of Delaware or the State of Virginia, as applicable, and
without prejudice to any right to alter or terminate such existence (whether by
merger or otherwise) under such applicable state law (provided that four of the
Debtors in these jointly administered cases are not proponents of this Plan and
shall not become Reorganized Debtors, but shall be dissolved, as set forth in
Article 1.1 of this Plan). Except as otherwise provided in the Plan, the
Restructured Bank Credit Facility, or any agreement, instrument or indenture
relating thereto, on or after the Effective Date, all property of each Estate
and any property acquired by each of the Debtors under the Plan, shall vest in
each respective Reorganized Debtor, free and clear of all liens, Claims, charges
or other encumbrances and Equity Interests. On and after the Effective Date,
each Reorganized Debtor may operate their respective businesses and may use,
acquire or dispose of property and compromise or settle any Claims or Equity
Interests, without supervision or approval by the Bankruptcy Court and free and
clear of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than
those restrictions expressly imposed by the Plan or the Confirmation Order. All
Intercompany Claims shall continue, on or after the Effective Date, to be
carried on the books of the Debtors in the ordinary course in accordance with
the Debtors' prior practices with respect to Intercompany Claims.

                                       22
<Page>

        (b)         Except as otherwise provided in this Plan or in any
contract, instrument, release, indenture or other agreement entered into in
connection with this Plan, in accordance with Section 1123(b)(3) of the
Bankruptcy Code, any claims, rights, and Retained Causes of Action that the
respective Debtors may hold against any Entity, including but not limited to
those Retained Causes of Action to be listed in the list of Retained Causes of
Action to be filed as an Exhibit to the Plan Supplement, shall vest in each
respective Reorganized Debtor, and each respective Reorganized Debtor shall
retain and may exclusively enforce any and all such claims, rights, or
Bankruptcy Causes of Action, as appropriate, in accordance with the best
interests of the Reorganized Debtor and the Holders of Allowed Claims entitled
to distributions under the Plan. Each Respective Reorganized Debtor shall have
the exclusive right, authority, and discretion to institute, prosecute, abandon,
settle or compromise any and all such claims, rights, and Retained Causes of
Action without the consent or approval of any third party and subject only to
orders of the Bankruptcy Court.

Section 5.2         CANCELLATION OF NOTES, INSTRUMENTS, PREFERRED STOCK, COMMON
                    STOCK AND STOCK OPTIONS; REDUCTION OF PAID-IN CAPITAL OF
                    CERTAIN DEBTORS

        On the Effective Date, except to the extent provided otherwise in the
Plan or the Confirmation Order, and provided that the treatments provided for
herein and the distributions contemplated by Article VII hereof are made, (a)
all notes, instruments, certificates, guaranties and other documents of the
Debtors evidencing the Secured Claims (other than Bank Claims) shall be canceled
and deemed terminated; (b) the FCC 2008 Notes and the FCC 2010 Notes shall be
canceled and deemed terminated; (c) all FCC Preferred Stock Interests, including
all issued and outstanding shares of preferred stock of such Debtor, shall be
canceled and deemed terminated; (d) all FCC Common Stock Interests, including
all issued and outstanding shares of common stock of FCC, shall be canceled and
deemed terminated, and (e) all options, warrants, conversion, privilege or other
legal or contractual right to acquire any FCC Common Stock Interests shall be
canceled and deemed terminated. On the Effective Date, except to the extent
provided in Sections 7.2 and 7.7 or otherwise in the Plan, any indenture
relating to any of the foregoing, including, without limitation, the FCC 2008
Notes Indenture and the FCC 2010 Notes Indenture, shall be deemed to be
canceled, as permitted by Section 1123(a)(5)(F) of the Bankruptcy Code. Upon
entry of the Confirmation Order, the paid-in capital of FCC, Focal
Communications Corporation of Illinois and Focal Financial Services, Inc. each
shall be reduced to the amount set forth with respect to such Debtor in the Plan
Supplement for purposes of the Illinois Business Corporation Act of 1983, as
amended, 805 ILCS 5/1.01 ET SEQ.

Section 5.3         EFFECTIVENESS OF RELATED DOCUMENTS

        All Plan Documents and/or any other agreement entered into or instrument
issued or in connection with any of the foregoing or any other Plan Document,
shall become effective and binding in accordance with their respective terms and
conditions upon the parties thereto and shall be deemed to become effective
simultaneously without any further order of the Bankruptcy Court.

Section 5.4         RELEASE OF LIENS AND PERFECTION OF LIENS

        Except as otherwise provided in this Plan, the Restructured Bank Credit
Facility, or in any contract, instrument or other agreement or document entered
into in connection with the consummation of the Plan: (a) each Holder of (i) a
Secured Claim (other than a Bank Claim), (ii) a Claim (other than a Bank Claim)
that is purportedly secured, and/or (iii) a judgment, mechanics or similar lien,
shall on or immediately before the Effective Date: (x) turn over and release to
the Reorganized Debtors any and all property of the Debtors that secures or
purportedly secures such Claim as they pertain to the properties currently owned
or leased by the Debtors or such liens shall automatically, and without further
action by the Debtors or Reorganized Debtors, be deemed released; and (y)
execute such documents and instruments as the Reorganized Debtors request to
evidence such Claim Holder's release of such property or lien; and (b) on the
Effective Date, all right, title and interest in any and all property of the
Debtors' Estates shall be transferred to the Reorganized Debtors free and clear
of all Claims and Interests, including, without limitation, liens, escrows,
charges, pledges, encumbrances and/or security interests of any kind. Except as
otherwise provided in this Plan or in any contract, instrument or other
agreement or document entered into in connection with the consummation of the
Plan, no distribution hereunder shall be made to or on behalf of any Claim
Holder (other than Holders of Bank Claims) unless and until such Holder executes
and delivers to the Debtors

                                       23
<Page>

or Reorganized Debtors such release of liens or otherwise turns over and
releases such Cash, pledge, or other possessory liens. Any such Holder that
fails to execute and deliver such release of liens within 120 days of the
Effective Date shall be deemed to have no further Claim against the Debtors, the
Reorganized Debtors or their assets or property in respect of such Claim and
shall not participate in any distribution hereunder. Notwithstanding the
immediately preceding sentence, any such Holder of a Disputed Claim shall not be
required to execute and deliver such release until such time as the Claim is
Allowed or Disallowed.

Section 5.5         CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, AND CORPORATE
                    ACTION

        (a) CERTIFICATES OF INCORPORATION AND BY-LAWS. On or as soon as
reasonably practicable after the Effective Date, the Certificate of
Incorporation, by-laws or other governing documents of each Debtor shall be
amended as necessary to satisfy the provisions of the Plan and the Bankruptcy
Code, and shall include, among other things, pursuant to Section 1123(a)(6) of
the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity
securities, but only to the extent required by Section 1123(a)(6) of the
Bankruptcy Code. In addition to the foregoing, Reorganized FCC's Certificate of
Incorporation will, among other things: (i) change the number of authorized
shares of Reorganized FCC Common Stock and authorize the issuance of Reorganized
FCC Common Stock upon the exercise of the Reorganized FCC Warrants to enable the
Plan to be consummated (subject to dilution in accordance with the Plan and the
Support Agreements), (ii) provide that the par value of the Reorganized FCC
Common Stock shall be $0.01 per share, and (iii) authorize the issuance of
10,000,000 shares of Reorganized FCC Series A Preferred Stock at a par value of
$0.01 per share and 40,000,000 shares of Reorganized FCC undesignated preferred
stock.

        (b) PROXY. The terms of the Reorganized FCC Certificate of Incorporation
will provide for, and each Holder of a Convertible Secured Note Claim or General
Unsecured Claim (whether or not such Holder votes in favor of the Plan) will be
required to execute a letter of transmittal containing, an irrevocable proxy
requiring, to the maximum extent permitted by law, each holder of Reorganized
FCC Common Stock to appoint Reorganized FCC's Secretary as such holder's true
and lawful proxy and attorney-in-fact, with full power of substitution, to vote
any Reorganized FCC Common Stock at any time acquired or held by such holder (or
express consent or dissent to corporate action in writing without a meeting) on
only those matters to which a holder of Common Stock would be entitled to vote
as a separate class pursuant to applicable law (such as certain amendments to
the terms of the Common Stock) in the same proportion as all votes cast by
holders of Reorganized FCC Series A Preferred Stock (or in the event no such
securities are outstanding, all other votes cast) in the matter for which such
shares of Reorganized FCC Common Stock would otherwise be entitled to a separate
class vote. This proxy covers only voting rights applicable when the Reorganized
FCC Common Stock has a separate class vote under applicable law and does not
otherwise limit or affect the rights of the Reorganized FCC Common Stock to vote
on all other matters together with the Reorganized FCC Series A Preferred Stock
and any other outstanding voting securities. This proxy shall expire when no
Reorganized FCC Series A Preferred Stock is outstanding.

        (c) DIRECTORS AND OFFICERS OF THE REORGANIZED DEBTORS. Subject to any
requirement of Bankruptcy Court approval, pursuant to Section 1129(a)(5) of the
Bankruptcy Code, the Debtors will disclose, on or prior to the 10th calendar day
before the Confirmation Date, the identity and affiliations of any Person
proposed to serve as an initial manager, officer or on the initial boards of
directors, as applicable, of the Reorganized Debtors in the Statement of
Officers and Directors. To the extent any such Person is an Insider (as defined
in Section 101(31) of the Bankruptcy Code), the nature of any compensation for
such Person will also be disclosed. The classification and composition of the
boards of directors shall be consistent with each Reorganized Debtor's
Certificate of Incorporation, as applicable. Each such director or officer shall
serve from and after the Effective Date pursuant to the terms of each
Reorganized Debtor's Certificate of Incorporation or other constituent documents
and the applicable state corporation law. Reorganized FCC will have a 9 person
board of directors nominated and elected by the holders of the Reorganized FCC
Series A Preferred Stock. Certain members of the board of directors of
Reorganized FCC will also serve as the members of the board of directors of
Reorganized FFSI and the Reorganized Subsidiary Debtors (other than Focal
Equipment Finance, LLC and Focal Fiber Leasing, LLC). Each of Focal Equipment
Finance, LLC and Focal Fiber Leasing, LLC, as reorganized, will have a manager,
which manager shall be Reorganized FFSI.

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<Page>

        (d) CORPORATE ACTION. On the Effective Date, all actions contemplated by
this Plan shall be authorized and approved in all respects. On the Effective
Date, all matters provided for in the Plan involving the corporate structure of
the Debtors or the Reorganized Debtors, and any corporate action required by the
Debtors or the Reorganized Debtors in connection with the Plan, shall be deemed
to have occurred and shall be in effect, without any requirement of further
action by the security holders or directors of the Debtors or the Reorganized
Debtors. On the Effective Date, the appropriate officers of the Reorganized
Debtors and members of the boards of directors of the Reorganized Debtors are
authorized and directed in the name of and on behalf of the Reorganized Debtors
to issue, execute, deliver, file or record the agreements, documents, contracts,
securities, instruments, releases and other agreements, and take such other
actions as may be necessary, to effectuate and further evidence the terms and
conditions of the Plan.

        (e) INVESTOR RIGHTS AGREEMENT. On the Effective Date, Reorganized FCC
and certain holders of Reorganized FCC Series A Preferred Stock who are members
of the Convertible Noteholder Group on the date hereof (each, including its
transferees, an "Investor" and collectively, the "Investors") will enter into
the Investor Rights Agreement pursuant to which, among other things, each such
Investor agrees to vote its shares and take all other reasonable actions within
its control as a stockholder of Reorganized FCC so that the Reorganized FCC
Board of Directors will:

                    (i)     initially be fixed at nine (9) directors; and

                    (ii)    be comprised of the following designees: (A) four
                            (4) directors designated by the holders of a
                            majority of the Reorganized FCC Series A Preferred
                            Stock, (B) one (1) director designated by the
                            holders of a majority of the Reorganized FCC Series
                            A Preferred Stock initially issued to Frontenac VIII
                            Limited Partnership and Frontenac Masters VIII
                            Limited Partnership, (C) one (1) director designated
                            by the Oversight Committee of Unsecured Creditors,
                            (D) two (2) directors, each of whom shall qualify as
                            an Independent Director within the meaning of the
                            Investor Rights Agreement, designated by the holders
                            of a majority of the Reorganized FCC Series A
                            Preferred Stock, and (E) one (1) director who will
                            be Reorganized FCC's chief executive officer.

        The Investor Rights Agreement contains further restrictions regarding
the removal and replacement of directors such that the persons originally
entitled to designate a person for a directorship are the persons that are
entitled to direct the removal and replacement of such director. These voting
provisions will terminate upon the earlier of the consummation of a Significant
Transaction (as defined in the Reorganized FCC Certificate of Incorporation) and
an Reorganized FCC's initial public offering after the Effective Time.

        Reorganized FCC also agrees in the Investor Rights Agreement to (x)
maintain directors and officers insurance in an amount and as determined by
Reorganized FCC's Board of Directors, (y) provide in Reorganized FCC's
certificate of incorporation and bylaws for indemnification and exculpation of
Reorganized FCC's Board of Directors to the maximum extent provided by law, and
(z) reimburse the expenses of directors for attending meetings of the Board of
Directors.

        Each of the Investors agrees in the Investor Rights Agreement to comply
with applicable securities laws regarding the transfer of Reorganized FCC Series
A Preferred Stock and in consideration thereof, Reorganized FCC agrees that the
Investors will be entitled to certain registration rights regarding the
Reorganized FCC Series A Preferred Stock and Reorganized FCC Common Stock issued
upon conversion thereof.

        The Investor Rights Agreement also provides that Reorganized FCC will
not take any of the following acts without obtaining the prior consent of the
holders of 66 - 2/3 of the Reorganized FCC Series A Preferred Stock held by the
Investors: (A) sell its or its subsidiaries stock or other equity securities,
(B) consummate or permit a subsidiary to consummate a Significant Transaction,
(C) sell, lease or otherwise dispose of more than 25% of the consolidated assets
of Reorganized FCC and its subsidiaries, (D) liquidate, dissolve or effect a
recapitalization or reorganization of Reorganized FCC, (E) amend the Reorganized
FCC Certificate of Incorporation or by-laws or file

                                       25
<Page>

a certificate of designation with respect to any other class or series of
preferred Stock, or (F) otherwise agree or consent to any of the foregoing.

        Reorganized FCC and the Investors reserve their respective rights to
modify, amend or terminate the Investor Rights Agreement at any time after the
Effective Date.

Section 5.6         SOURCES OF CASH FOR PLAN DISTRIBUTION

        All Cash necessary for the Reorganized Debtors to make payments pursuant
to the Plan shall be obtained from existing Cash balances, the operations of the
Debtors or Reorganized Debtors, or post-Confirmation Date borrowings and/or
financing. The Reorganized Debtors may also make such payments using Cash
received from their direct or indirect subsidiaries through the Reorganized
Debtors' consolidated cash management system and from advances or dividends from
such subsidiaries in the ordinary course.

Section 5.7         ISSUANCE OF NEW SECURITIES

        On or as soon as is practicable after the Effective Date, Reorganized
FCC shall issue, in accordance with the terms of the Plan, (a) $65 million of
stated value of Reorganized FCC Series A Preferred Stock, subordinated to the
Restructured Bank Credit Facility in accordance with the subordination terms to
be filed as part of the Plan Supplement, to be distributed to the Holders of
Convertible Secured Note Claims and the Holders of General Unsecured Claims, and
(b) 588,325 Reorganized FCC Five Percent Warrants and 2,941,176 FCC Twenty
Percent Warrants to be distributed to the Holders of General Unsecured Claims.
The issuance of Reorganized FCC Series A Preferred Stock and Reorganized FCC
Warrants by Reorganized FCC shall be authorized without the need for any further
corporate action.

Section 5.8         ESCROWS

        Except as expressly provided in the Plan or as otherwise ordered by the
Bankruptcy Court, all escrows previously established prior to and during the
Chapter 11 Cases and still in existence on the Effective Date shall continue to
be administered, and the escrowed funds shall be released, according to their
terms and any orders of the Bankruptcy Court previously entered. Escrowed funds
that are released to the Debtors after the Effective Date shall be used to
achieve consummation and carry out the Plan.

Section 5.9         NEW KEY EMPLOYEE INCENTIVE PLAN

        On the Effective Date, Reorganized FCC shall enter into a New Key
Employee Incentive Plan pursuant to which options to purchase 1,176,471 shares
of Reorganized FCC Common Stock will be set aside for qualified employees. The
stock options will be granted to qualified employees pursuant to the terms of
the New Key Employee Incentive Plan. The New Key Employee Incentive Plan is
subject to approval and adoption by Reorganized FCC's Board of Directors.

Section 5.10        SUBSTANTIVE CONSOLIDATION FOR LIMITED PURPOSES

        This Plan's structure is predicated upon the substantive consolidation
of the Debtors' Chapter 11 Cases into a single proceeding solely for the
purposes of the Chapter 11 Cases and all actions with respect to voting,
confirmation, consummation and implementation of this Plan. Voting will be
aggregated by type of Claim without regard to the particular Debtor against whom
such Claim is held, i.e., the votes of Bank Claims will be aggregated, the votes
of Convertible Secured Note Claims will be aggregated, the votes of NTFC Capital
Claims will be aggregated and the votes of General Unsecured Claims will be
aggregated. On the Effective Date, and solely for the purposes of this Plan and
the distributions and transactions contemplated thereby, the structure of this
Plan essentially consolidates all assets and liabilities of the Debtors' Estates
into a single estate. This Plan's treatment of Bank Claims and Convertible
Secured Note Claims essentially treats all cross-corporate guarantees made by
the Debtors prepetition as eliminated, and any obligation of any Debtor and all
guarantees thereof executed by one or more of the Debtors are essentially deemed
to be a single obligation of the consolidated Debtors. All Claims filed or

                                       26
<Page>

to be filed in connection with any such obligation and such guarantees are
essentially deemed to be a single Claim against the consolidated Debtors, and
each and every Claim filed in the individual Case of any of the Debtors is
essentially deemed to be a single obligation of all of the Debtors under this
Plan. Notwithstanding the treatment of such Claims, nothing herein shall affect
the obligations of each of the Debtors under this Plan. Notwithstanding the
substantive consolidation of these Chapter 11 Cases for purposes of this Plan,
each of the Debtors shall, as Reorganized Debtors, continue to exist after the
Effective Date as separate corporate entities, and each of the Reorganized
Debtors shall continue to pay fees required to be paid under Section 1930 of
Title 28 of the United States Code in accordance with Debtors' previous
discussion with the Office of the United States Trustee.

        Substantive consolidation of the Chapter 11 Cases for the
above-described purposes is supported by the Committee and is warranted for
various reasons. As described more specifically below and as set forth in the
Liquidation Analysis under Article IX hereof, the benefits of consolidation
outweigh any harm to any individual creditor, and it will avoid substantial and
unnecessary administrative expense that would be required by accounting and
administering separately the assets and liabilities of each of the affiliated
Debtors.

        Focal Communications Corporation ("FCC") is the direct or indirect owner
of all interests in the subsidiary Debtors in these Chapter 11 Cases. FCC has
historically utilized consolidated financial statements. As represented to, and
approved by, the Bankruptcy Court in FCC's motion to approve its cash management
procedures, income and expenses of the Debtors are collected and paid on a
centralized basis, both prior to and after the bankruptcy. Further, the
principal component of the debt structure of each of the Debtors is identical:
The assets of each of the Debtors are fully encumbered by the Bank Claims and
the Convertible Secured Note Claims. Otherwise, none of the Debtors have
unencumbered assets that would permit Creditors of that particular Debtor to
receive any greater distribution than Creditors of any other Debtor, and
substantive consolidation will have no adverse effect on any Creditor. SEE
Liquidation analysis under Article IX hereof. Conversely, failure to
substantively consolidate will impose on the Estates the substantial
administrative cost and burden of filing and confirming twenty-three (23)
separate plans in these Cases, accounting separately for the assets and
liabilities of each of the Debtors, and resolving the classification and voting
problems that could result from having to classify Claims of one Debtor against
the other Debtors. Further, a separation of the Debtors to parties other than
their present parent entities that would result from the distribution of the
stock of the subsidiaries to third parties could have adverse negative tax
consequences, including those relating to net operating losses and built-in
losses.

        As a consequence of substantive consolidation under this Plan,
distributions under this Plan will be made to all Creditors pro rata, without
distinction between Creditors of particular Debtors. The Debtors believe and the
Committee has agreed that such equality of treatment is warranted, both for the
reasons cited above and because any possibility of actual prejudice to any
Creditor or group of Creditors is speculative and is outweighed by the
advantages of substantive consolidation.

        In respect to the Avoidance Actions, the consolidation of all such
claims of the twenty-three (23) Estates could theoretically prejudice a Creditor
of a Debtor that recovered, relative to other Debtors, a greater amount of
avoidable transfers in proportion to its creditor claims. Any such prejudice,
however, is both unlikely and inherently speculative. Both the law of averages
and FCC's centralized cash management system should produce a fairly consistent
correlation among the Estates between the amount of recoverable preferences and
the amount of creditor claims in any given Estate. Given that the possibility of
any material deviation between Estates is inherently speculative, and in view of
the arguments that any such deviation should be disregarded in any event due to
factors such as FCC's centralized cash management system, substantive
consolidation is warranted as to Debtors' avoidance recoveries.

        Unless the Bankruptcy Court has ordered substantive consolidation of the
Cases before the Confirmation Hearing, this Plan will serve as, and will be
deemed to be, a motion for entry of an order substantively consolidating the
Debtors' Chapter 11 Cases. If no objection to substantive consolidation is
timely filed and served by any holder of a Claim in a Class impaired by this
Plan on or before the deadline for submitting objections to this Plan or such
other date as may be established by the Bankruptcy Court, an order approving
substantive consolidation (which may be the Confirmation Order) may be entered
by the Bankruptcy Court. If any such objections are timely filed and served, a
hearing with respect to the substantive consolidation of the Chapter 11 Cases
and the objections thereto

                                       27
<Page>

will be scheduled by the Bankruptcy Court, which hearing may, but is not
required to, coincide with the Confirmation Hearing.

        OBJECTIONS TO SUBSTANTIVE CONSOLIDATION FOR LIMITED PURPOSES UNDER THIS
PLAN

        Various parties have taken the position that the retention by FCC and
Focal Financial Services of the stock of their direct subsidiaries violates the
absolute priority rule of Section 1129(b) of the Bankruptcy Code. The Debtors
dispute this position and believe that there is ample legal authority supporting
the authorization of substantive consolidation for the limited purposes sought
by the Debtors under this Plan.

                                   ARTICLE VI
              TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Section 6.1         ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Immediately prior to the Effective Date, all executory contracts or unexpired
leases of the Reorganized Debtors will be deemed assumed in accordance with the
provisions and requirements of Sections 365 and 1123 of the Bankruptcy Code
except those executory contracts and unexpired leases that (a) have been
rejected by Final Order of the Bankruptcy Court, (b) are the subject of a motion
to reject pending on the Effective Date, (c) are identified on a list (the
"List") of agreements to be rejected, which List is an exhibit to the Plan
Supplement, or (d) are rejected pursuant to the terms of the Plan. The Debtors
reserve the right to add or remove any executory contract or unexpired lease
from the List (a) prior to entry of the Confirmation Order by the Bankruptcy
Court. The Debtors reserve the right to add or remove any executory contract or
unexpired lease from the List (a) prior to entry of the Confirmation Order by
the Bankruptcy Court, or (b) upon entry of a Final Order pursuant to Section 6.3
of the Plan in the event the requisite "cure" payment determined by the Court
renders assumption of such executory contract or unexpired lease not to be
economically feasible. Entry of the Confirmation Order by the Bankruptcy Court
shall constitute approval of such assumptions and rejections pursuant to
Sections 365(a) and 1123 of the Bankruptcy Code. Each executory contract and
unexpired lease assumed pursuant to this Article VI shall revest in and be fully
enforceable by the respective Recognized Debtor in accordance with its terms,
except as modified by the provisions of the Plan, or any order of the Bankruptcy
Court authorizing and providing for its assumption or applicable federal law.
The non-Debtor parties to any rejected subleases will be responsible for taking
all steps necessary to retrieve, at their expense, all personal property in, and
to surrender, the premises that are the subject of such leases.

Section 6.2         CLAIMS BASED ON REJECTION OF EXECUTORY CONTRACTS OR
                    UNEXPIRED LEASES

        All proofs of claim with respect to Claims arising from the rejection of
executory contracts or unexpired leases, if any, must be filed with the
Bankruptcy Court within thirty (30) days after the date of entry of an order of
the Bankruptcy Court approving such rejection (or such different date that is
established by such rejection order or other order of the Bankruptcy Court). Any
Claims arising from the rejection of an executory contract or unexpired lease
not filed within such time will be forever barred from assertion against the
Debtors or Reorganized Debtors, their respective Estates and property unless
otherwise ordered by the Bankruptcy Court or provided for in the Plan. All such
Allowed Claims for which proofs of claim are required to be filed will be, and
will be treated as, Allowed General Unsecured Claims subject to the provisions
of Article III hereof, subject to any limitation on allowance of such Claims
under Section 502(b) of the Bankruptcy Code or otherwise.

Section 6.3         CURE OF DEFAULTS FOR ASSUMED EXECUTORY CONTRACTS AND
                    UNEXPIRED LEASES

        Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to Section 365(b)(l) of the Bankruptcy Code, by payment of the default
amount in Cash on the Effective Date or on such other terms as the parties to
such executory contracts or unexpired leases may otherwise agree. In the event
of a dispute regarding: (1) the amount of any cure payments, (2) the ability of
the Reorganized Debtors or any assignee to provide "adequate assurance of future
performance" (within the meaning of Section 365 of the Bankruptcy Code) under
the contract or lease to be assumed, or (3) any

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<Page>

other matter pertaining to assumption, the cure payments required by Section
365(b)(l) of the Bankruptcy Code shall be made following the entry of a Final
Order resolving the dispute and approving the assumption.

Section 6.4         INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES

        The obligations of the Debtors to indemnify any Person or Entity serving
at any time on or after October 1, 2002 as one of their directors, officers or
employees by reason of such Person's or Entity's service in such capacity, or as
a director, officer or employee of any other corporation or legal entity (a
"Covered Person"), to the extent provided in the Debtors' constituent documents
or by a written agreement with the Debtors or the Delaware General Corporation
Law, shall be deemed and treated as executory contracts that are assumed by the
Debtors pursuant to the Plan and Section 365 of the Bankruptcy Code as of the
Effective Date. Accordingly, such indemnification obligations shall survive
unimpaired and unaffected by entry of the Confirmation Order, irrespective of
whether such indemnification is owed for an act or event occurring before or
after the Petition Date. The foregoing shall not apply to any obligation to
indemnify any current defendant in the IPO Litigation, except to the extent of
any insurance coverage for such liability.

Section 6.5         COMPENSATION AND BENEFIT PROGRAMS

        Except as otherwise expressly provided herein, all employment and
severance policies, and all compensation and benefit plans, policies and
programs of the Debtors applicable to their employees, retirees and non-employee
directors and the employees and retirees of their subsidiaries, including,
without limitation, all savings plans, retirement plans, healthcare plans,
disability plans, severance benefit plans, incentive plans, vacation and life,
accidental death and dismemberment insurance plans shall be treated as executory
contracts under the Plan and on the Effective Date will be assumed pursuant to
the provisions of Sections 365 and 1123 of the Bankruptcy Code whether or not
such plans, policies and programs are identified on the List.

                                   ARTICLE VII
                       PROVISIONS GOVERNING DISTRIBUTIONS

Section 7.1         DISTRIBUTION FOR CLAIMS AND EQUITY INTERESTS ALLOWED AS OF
                    THE EFFECTIVE DATE

        (a) Except as otherwise provided in this Article VII or as may be
ordered by the Bankruptcy Court, distributions to be made on the Effective Date
on account of Allowed Claims and Equity Interests that are due and owing as of
the Effective Date, and entitled to receive distributions under the Plan, shall
be made on the Effective Date or as soon as reasonably practicable thereafter.
Pursuant to this Plan, to the extent otherwise permitted, all distributions in
respect of any Claim (other than Bank Claims) will be allocated first to the
principal amount of such Claim, as determined for federal income tax purposes,
and thereafter to the remaining portion of such Claim, if any.] Distributions on
account of Equity Interests that become Allowed Equity Interests after the
Effective Date shall be made pursuant to Article III above.

        (b) Any payment in Cash to be made by the Debtors or any Disbursing
Agent shall be made, at the election of the Debtors or the Disbursing Agent, by
check drawn on a domestic bank or by wire transfer from a domestic bank.

Section 7.2         DELIVERY AND DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
                    DISTRIBUTIONS

        (a) DELIVERY OF DISTRIBUTIONS IN GENERAL. Distributions to Holders of
Allowed Claims or Equity Interests shall be made at the address of the Holder of
such Claim as indicated in the records of the Debtors. Distributions shall be
made in accordance with the provisions of the applicable indenture,
participation agreement, loan agreement or analogous instrument or agreement, if
any, and the provisions of the Plan, and distributions shall be made to Holders
of record as of the Distribution Record Date.

        (b) UNDELIVERABLE DISTRIBUTIONS.

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<Page>

                    (i)     HOLDING OF UNDELIVERABLE DISTRIBUTIONS. If any
                            Allowed Claim or Equity Interest Holder's
                            distribution is returned to the Reorganized Debtors
                            as undeliverable, no further distributions shall be
                            made to such Holder unless and until the Reorganized
                            Debtors are notified in writing of such Holder's
                            then current address. Undeliverable distributions
                            shall remain in the possession of the Reorganized
                            Debtors pursuant to this Article VII until such time
                            as a distribution becomes deliverable. Undeliverable
                            Cash shall not be entitled to any interest,
                            dividends or other accruals of any kind.

                    (ii)    AFTER DISTRIBUTIONS BECOME DELIVERABLE. Within 20
                            days after the end of each calendar quarter
                            following the Effective Date, the Reorganized
                            Debtors shall make all distributions that become
                            deliverable during the preceding calendar quarter.

                    (iii)   FAILURE TO CLAIM UNDELIVERABLE DISTRIBUTIONS. Any
                            Holder of an Allowed Claim or Equity Interest that
                            does not assert a Claim or Equity Interest pursuant
                            to the Plan for an undeliverable distribution within
                            one year after the Effective Date shall have its
                            Claim or Equity Interest for such undeliverable
                            distribution discharged and shall be forever barred
                            from asserting any such Claim against or Equity
                            Interest in the Reorganized Debtors or its property.
                            In such cases: (A) any Cash held for distribution on
                            account of such Claims shall be the property of the
                            Reorganized Debtors, free of any restrictions
                            thereon and (B) any Reorganized FCC Series A
                            Preferred Stock held for distribution on account of
                            such Claims or Equity Interests shall be canceled
                            and of no further force or effect. Nothing contained
                            in the Plan shall require the Reorganized Debtors to
                            attempt to locate any Holder of an Allowed Claim or
                            Equity Interest.

                    (iv)    COMPLIANCE WITH TAX REQUIREMENTS. Any federal, state
                            or local withholding taxes or amounts required to be
                            withheld under applicable law shall be deducted from
                            distributions hereunder. All Entities holding Claims
                            shall be required to provide any information
                            necessary to effect the withholding of such taxes.

        (c) TIME BAR TO CASH PAYMENTS. Checks issued by the Reorganized Debtors
on account of Allowed Claims shall be null and void if not negotiated within
ninety (90) days from and after the date of issuance thereof. Requests for
reissuance of any check shall be made directly to the Reorganized Debtors by the
Holder of the Allowed Claim with respect to which the check was originally
issued. Any Claim in respect of such a voided check shall be made on or before
the second anniversary of the Effective Date. After such date, all Claims and
respective voided checks shall be discharged and forever barred and the
Reorganized Debtors shall retain all monies related thereto.

Section 7.3         DISTRIBUTION RECORD DATE

        As of the close of business on the Distribution Record Date, the
transfer registers for any instrument, security, or other documentation canceled
pursuant to Section 5.2 herein shall be closed and the transfer of any such
instrument, security, or other documentation, or any interest therein, will be
prohibited. Each Reorganized Debtor shall have no obligation to recognize the
transfer of any such instrument, security, or other documentation occurring
after the Distribution Record Date, and shall be entitled for all purposes
herein to recognize and deal only with those Holders of record as of the close
of business on the Distribution Record Date, as the case may be.

Section 7.4         TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED

        On or as soon as practicable after the Effective Date, each Holder of an
Allowed Claim against or Equity Interest in the Debtors shall receive the full
amount of the Distributions that the Plan provides for such Allowed Claims or
Equity Interests in the applicable Class. Beginning on the date that is 20
calendar days after the end of the calendar quarter following the Effective Date
and 20 calendar days after the end of each calendar quarter thereafter,
distributions shall also be made, pursuant to Section 8.4 below, to Holders of
Disputed Claims or Equity Interests in any such Class whose Disputed Claims or
Equity Interests were allowed during the preceding calendar

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<Page>

quarter. Such quarterly distributions shall also be in the full amount that the
Plan provides for Allowed Claims or Allowed Equity Interests in the applicable
Class.

Section 7.5         SETOFFS AND RECOUPMENTS

        Except as expressly provided in the Plan or any order of the Bankruptcy
Court, the Reorganized Debtors may, pursuant to Section 553 of the Bankruptcy
Code or applicable non-bankruptcy law, set off against any Allowed Claim or
Equity Interest and the distributions to be made pursuant to the Plan on account
of such Claim or Equity Interest (before any distribution is made on account of
such Claim or Equity Interest), the claims, rights and Causes of Action of any
nature that the Debtors or Reorganized Debtors may hold against the Holder of
such Allowed Claim or Equity Interest; provided, however, that neither the
failure to effect such a setoff or recoupment nor the allowance of any Claim or
Equity Interest hereunder shall constitute a waiver or release by the Debtors or
Reorganized Debtors of any such claims, rights and Causes of Action that the
Debtors or Reorganized Debtors may possess against such Holder.

Section 7.6         SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES

        As a condition precedent to receiving any distribution pursuant to the
Plan on account of an Allowed Claim or Equity Interest evidenced by the
instruments, securities or other documentation canceled pursuant to Article V
above, the Holder of such Claim or Equity Interest shall tender the applicable
instruments, securities or other documentation evidencing such Claim or Equity
Interest to the Reorganized Debtors unless waived in writing by the Debtors or
the Reorganized Debtors. Any Reorganized FCC Series A Preferred Stock to be
distributed pursuant to the Plan on account of any such Claim shall, pending
such surrender, to the extent required under the Plan, be treated as an
undeliverable distribution pursuant to Section 7.2 above.

        (a) CONVERTIBLE SECURED NOTES. On or prior to the Effective Date, each
Holder of an Convertible Secured Note Claim shall tender its Convertible Secured
Notes relating *o such Claim to Reorganized FCC in accordance with written
instructions to be provided to such Holders by FCC or Reorganized FCC. Such
instructions shall specify that delivery of Convertible Secured Notes will be
effected, and risk of loss and title thereto will pass, only upon the proper
delivery of such Convertible Secured Notes in accordance with such instructions.
All such surrendered Convertible Secured Notes shall be marked as canceled.

        (b) FAILURE TO SURRENDER CANCELED INSTRUMENTS. Any Holder of Convertible
Secured Notes that fails to surrender or is deemed to have failed to surrender
the applicable Convertible Secured Notes required to be tendered hereunder
within one year after the Effective Date shall have its Claim for a distribution
pursuant to the Plan on account of such Convertible Secured Notes discharged and
shall be forever barred from asserting any such Claim against the Reorganized
Debtors or their respective property. In such cases, any Reorganized FCC Series
A Preferred Stock held for distribution on account of such Claim shall be
disposed of pursuant to the provisions set forth above in Section 7.2.

Section 7.7         LOST, STOLEN, MUTILATED OR DESTROYED DEBT SECURITIES

        Any Holder of a Claim evidenced by a Convertible Secured Note that has
been lost, stolen, mutilated or destroyed shall, in lieu of surrendering such
Convertible Secured Note, deliver to Reorganized FCC: (a) evidence reasonably
satisfactory to Reorganized FCC of the loss, theft, mutilation or destruction,
and (b) such security or indemnity as may be required by Reorganized FCC to hold
Reorganized FCC harmless from any damages, liabilities or costs incurred in
treating such individual as a Holder of an Allowed Claim. In compliance with
this Article VII by a Holder of a Claim evidenced by a Convertible Secured Note,
such Holder shall, for all purposes under the Plan, be deemed to have
surrendered such note, debenture or bond.

Section 7.8         FRACTIONAL SHARES

        No fractional shares of Reorganized FCC Series A Preferred Stock in lieu
thereof shall be distributed. When any Issuance of a fraction of a share of
Reorganized FCC Series A Preferred Stock would otherwise be called

                                       31
<Page>

for, the actual issuance shall reflect a rounding up (in the case of .50 or more
than .50) of such fraction to the nearest whole Reorganized FCC Series A
Preferred Stock share, as applicable, or a rounding down of such fraction (in
the case of less than .50).

Section 7.9         ROUNDING AND DE MINIMUS AMOUNTS

        Notwithstanding any other provision of the Plan, payments of fractions
of Dollars shall not be made. Whenever any payment of a fraction of a Dollar
under the Plan would otherwise be called for, the actual payment made shall
reflect a rounding of such fraction to the nearest whole Dollar (up or down),
with half Dollars being rounded up. If a cash payment otherwise provided for by
the Plan with respect to an Allowed Claim would be less than ten ($10.00)
Dollars (whether in the aggregate or on any payment date provided in the Plan),
notwithstanding any contrary provision of the Plan, the Distribution Agent shall
not be required to make such payment unless a request therefore is made in
writing to the Distribution Agent.

Section 7.10        GLOBAL CERTIFICATES AND GLOBAL WARRANTS

        (a) BOOK-ENTRY, DELIVERY AND FORM.

        This Plan contemplates the distribution of Reorganized FCC Series A
Preferred Stock to the Holders of Allowed Convertible Secured Note Claims and
the distribution of the Reorganized FCC Series A Preferred Stocks and
Reorganized FCC Warrants to the Holders of Allowed General Unsecured Claims. The
Holder of such a Claim, to receive such distribution, will need to open an
account with the Depository Trust Company (the "Depository" or "DTC") or with a
securities broker, dealer or other organization that has access to DTC's
book-entry system, as more particularly set forth below.

        Reorganized FCC intends to initially issue the Reorganized FCC Series A
Preferred Stock to holders of Convertible Secured Note Claims (Classes 1C, 2C
and 3C) and the Reorganized FCC Series A Preferred Stock and the Reorganized FCC
Warrants to the Holders of the General Unsecured Claims (Classes 1G, 2G, and 3G)
in "book-entry" form through the facilities of The Depositary Trust Company, or
DTC. This means that Reorganized FCC will not issue physical certificates
representing the Reorganized FCC Series A Preferred Stock and Reorganized FCC
Warrants to each individual holder of a Convertible Secured Note Claim or a
General Unsecured Claim, but instead will issue one or more global certificates
registered in the name of DTC or its nominee to represent all of the shares of
Reorganized FCC Series A Preferred Stock and all of the Reorganized FCC Warrants
to be issued under the Plan. DTC will, in turn, electronically credit to the
accounts of individual holders of Convertible Secured Note Claims and General
Unsecured Claims such number of shares of Reorganized FCC Series A Preferred
Stock and such number of Reorganized FCC Warrants as such holders are entitled
to receive under the Plan. In order to have such shares of Reorganized FCC
Series A Preferred Stock and Reorganized FCC Warrants properly credited in
electronic format, each holder will need to have an account with DTC or with a
securities broker, dealer or other organization that has access to DTC's
book-entry system. Most securities brokers and dealers, including such well
known firms as Charles Schwab & Co., e*trade, Ameritrade, JP Morgan, Soloman
Smith Barney, Banc of America Securities, Bear, Stearns & Co. Inc., Credit
Suisse First Boston, Goldman, Sachs, Lehman Brothers, Merrill Lynch, Morgan
Stanley and CIBC World Markets, have access to DTC's book-entry system. There
may be a fee associated with the establishment of an account; Holders will be
responsible for paying the fee. Prior to the consummation of the Plan,
Reorganized FCC will distribute to each holder of a Convertible Secured Note
Claim and General Unsecured Claim detailed instructions that such holder will
have to forward to its securities broker, dealer or other organization that will
hold its book-entry securities to arrange for the distribution of its FCC Series
A Preferred Stock and/or Reorganized FCC Warrants under the Plan.

        Debtors believe that issuing the Reorganized FCC Series A Preferred
Stock and Reorganized FCC Warrants in "book-entry" form will facilitate both the
initial distribution of such securities under the Plan, subsequent transfers by
the holders thereof following the consummation of Plan and the issuance of
Reorganized FCC Common Stock upon the conversion of the Reorganized FCC Series A
Preferred Stock or exercise of the Reorganized FCC Warrants by the holders
thereof. Although Debtors do not currently intend to list the Reorganized FCC
Series A Preferred Stock or Reorganized FCC Warrants on any national securities
exchange or inter-dealer

                                       32
<Page>

quotation systems, such securities (and the Reorganized FCC Common Stock in
which they are convertible into or exercisable for, as the case may be) will
generally be freely tradable under the Securities Act and the various state
securities laws and thus will be able to be resold by the holders thereof
following the consummation of the Plan. SEE "Section 1145(a) of the Bankruptcy
Code" for a complete discussion of the ability of such securities to be resold
following the consummation of the Plan. Issuing the Reorganized FCC Series A
Preferred Stock or Reorganized FCC Warrants in "book-entry" form will eliminate
the need for the physical movement of securities certificates upon the sale or
other disposition by the holders thereof (including the conversion into, or
exercise for, shares of Reorganized FCC Common Stock). This will generally speed
up the settlement of such transactions (i.e., the amount of time it takes for a
seller to receive the proceeds from the sale of securities) involving the
Reorganized FCC Series A Preferred Stock and Reorganized FCC Warrants following
the consummation of the Plan. The benefits of issuing securities in "book-entry"
form (as compared to issuing physical certificates) is evidenced by the fact
that substantially all of the securities publicly traded in the United States
are issued in book-entry form and substantially all of the transactions
involving such securities are settled through DTC or a similar clearing
organization.

        To effect the foregoing, Reorganized FCC will initially issue the
Reorganized FCC Series A Preferred Stock in the form of one or more global
certificates (the "Global Certificates") and the Reorganized FCC Warrants in the
form of one or more global warrants (the "Global Warrants"). The Global
Certificates and Global Warrants will be deposited with, or on behalf of, the
Depository and registered in the name of the Depository or its nominee. Holders
of Convertible Secured Note Claims (Classes 1C, 2C and 3C) and General Unsecured
Claims (Classes 1G, 2G and 3G) may hold their beneficial interests in the Global
Certificates and Global Warrants directly through the Depository if such Holder
has an account with the Depository or indirectly through a broker, dealer or
other organization that has access to the Depository's book entry system.
Holders of Convertible Secured Note Claims (Classes 1C, 2C and 3C) and General
Unsecured Claims (Classes 1G, 2G and 3G) must have an account with the
Depository or an account with an organization that has access to the
Depository's book-entry system in order to receive their beneficial interests in
the Global Certificates and Global Warrants to be issued under the Plan.

        The Depository was created to hold securities of institutions that have
accounts with the Depository ("participants") and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depository's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. The Depository is owned by a number of its participants and by
the New York Stock Exchange, Inc., the American Stock Exchange LLC and the
National Association of Securities Dealers, Inc. Access to the Depository's
book-entry system is also available to others such as banks, brokers, dealers
and trust companies (collectively, the "indirect participants") that clear
through or maintain a custodial relationship with a participant, whether
directly or indirectly. The Rules applicable to the Depository and its
participants and indirect participants are on file with the SEC. There may be a
fee associated with the establishment of an account; Holders will be responsible
for paying that fee.

        The Depository has advised the Debtors as follows:

                    (i)     the Depository is a limited-purpose trust company
                            organized under the laws of the State of New York,

                    (ii)    the Depository is a member of the Federal Reserve
                            System,

                    (iii)   the Depository is a "clearing corporation" with the
                            meaning of the New York uniform Commercial Code; and

                    (iv)    the Depository is a "clearing agency" registered
                            pursuant to the provisions of Section 17A of the
                            Exchange Act.

        Reorganized FCC expects that pursuant to procedures established by the
Depository, upon the deposit of the Global Certificates and Global Warrants with
the Depository, the Depository will credit, on its book-entry

                                       33
<Page>

registration and transfer system, the aggregate number of shares of Reorganized
FCC Series A Preferred Stock and Reorganized FCC Warrants represented by such
Global Certificates and Global Warrants to the accounts of participants, who, in
turn, will credit the accounts of indirect participants. The accounts to be
credited shall be designated by each Holder of Convertible Secured Note Claims
(Classes 1C, 2C and 3C) and General Unsecured Claims (Classes IG, 2G and 3G) in
their respective letters of transmittals delivered to the exchange agent
appointed in connection with the Plan. Ownership of beneficial interests in the
Global Certificates and Global Warrants will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in the Global Certificates and Global Warrants will be shown on, and
the transfer of those ownership interests will be effected only through, records
maintained by the Depository (with respect to participants' interests), the
participants and the indirect participants (with respect to the owners of
beneficial interests in the Global Certificates and Global Warrants other than
participants). Reorganized FCC expects to issue shares of Reorganized FCC Common
Stock upon conversion of the Reorganized FCC Series A Preferred Stock or upon
exercise of the Reorganized FCC Warrants in book-entry form as well. The laws of
some jurisdictions may require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and laws
may impair the ability to transfer or pledge beneficial interests in the Global
Certificates and Global Warrants.

        So long as the Depository, or its nominee, is the registered holder and
owner of the Global Certificates and Global Warrants, the Depository or such
nominee, as the case may be, will be considered the sole legal owner and holder
of any related shares of Reorganized FCC Series A Preferred Stock and
Reorganized FCC Warrants evidenced by the Global Certificates and Global
Warrants for all purposes. The Depository has no knowledge of the actual
beneficial owners of the shares of Reorganized FCC Series A Preferred Stock and
Reorganized FCC Warrants: the Depository's records reflect only the identity of
the participants to whose accounts such shares of Reorganized FCC Series A
Preferred Stock and Reorganized FCC Warrants are credited, which may or may not
be the beneficial owners. The participants and indirect participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Except as set forth below, as an owner of a beneficial interest in the Global
Certificates or Global Warrants, you will not be entitled to have the shares of
Reorganized FCC Series A Preferred Stock or Reorganized FCC Warrants represented
by the Global Certificates or Global Warrants registered in your name, will not
receive or be entitled to receive physical delivery of certificated shares of
Reorganized FCC Series A Preferred Stock or Reorganized FCC Warrants, and will
not be considered to be the owner or holder of any shares of Reorganized FCC
Series A Preferred Stock or Reorganized FCC Warrants under the Global
Certificates and Global Warrants. We understand that under existing industry
practice, in the event an owner of a beneficial interest in the Global
Certificates or Global Warrants desires to take any action that the Depository,
as the holder of the Global Certificates and Global Warrants, is entitled to
take, the Depository would authorize the participants to take such action, and
the participants would authorize beneficial owners owning through such
participants to take such action or would otherwise act upon the instructions of
beneficial owners owning through them.

        Conveyance of notices and other communications by the Depository to
participants, by participants to indirect participants, and by participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time. Beneficial owners of shares of Reorganized FCC Series
A Preferred Stock or Reorganized FCC Warrants may wish to take certain steps to
augment transmission to them of notices of significant events with respect to
the shares of Reorganized FCC Series A Preferred Stock and Reorganized FCC
Warrants. Beneficial owners of shares of Reorganized FCC Series A Preferred
Stock or Reorganized FCC Warrants may wish to determine whether the nominee
holding the shares of Reorganized FCC Series A Preferred Stock or Reorganized
FCC Warrants for their benefit has agreed to obtain and transmit notices to
beneficial owners, or in the alternative, beneficial owners may wish to provide
their names and addresses to the registrar and request that copies of the
notices be provided directly to them.

        Debtors will make any payments required under the terms of the
Reorganized FCC Series A Preferred Stock and Reorganized FCC Warrants
represented by the Global Certificates and Global Warrants registered in the
name of and held by the Depository or its nominee, as the case may be, as the
registered owner and holder of the Global Certificates and Global Warrants.
However, as set forth above, each Holder will be responsible for paying any fee
associated with the establishment of an account with DTC or with a securities
broker or dealer for the purpose of enabling the Holder to receive that Holder's
distribution of the Reorganized FCC Series A Preferred

                                       34
<Page>

Stock and Reorganized FCC Warrants represented by the Global Certificates and
Global Warrants. Similarly, Debtors will issue any shares of Reorganized FCC
Common Stock issuable upon the conversion of the Reorganized FCC Series A
Preferred Stock or exercise of the Reorganized FCC Warrants represented by the
Global Certificates and Global Warrants to the Depository or its nominee, as the
case may be, as the registered owner and holder of the Global Certificates and
Global Warrants.

        Debtors expect that the Depository or its nominee, upon receipt of any
payment on the Global Certificates and Global Warrants, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global
Certificates and Global Warrants as shown on the records of the Depository or
its nominee. Debtors also expect that payments by participants or indirect
payments to owners of beneficial interests in the Global Certificates and Global
Warrants held through such participants or indirect participants will be
governed by standing instructions and customary practices and will be the
responsibility of such participants or indirect participants. We will not have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Global
Certificates and Global Warrants for any shares of reorganized FCC Series A
Preferred Stock or Reorganized FCC Warrants or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for any
other aspect of the relationship between the Depository and its participants or
indirect participants or the relationship between such participants or indirect
participants and the owners of beneficial interests in the Global Certificates
and Global Warrants owning through such participants.

        Although the Depository has agreed to the foregoing procedures in order
to facilitate transfers of interests in the Global Certificates and Global
Warrants among participants of the Depository, it is under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time. Under such circumstances, in the event that a
successor securities depository is not obtained, Reorganized FCC Series A
Preferred Stock certificates and Reorganized FCC Warrant certificates are
required to be printed and delivered as described below under "Certificated
Shares and Warrants." Reorganized FCC will not have any responsibility or
liability for the performance by the Depository or its participants or indirect
participants or their respective obligations under the rules and procedures
governing their operations.

        The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that Debtors
believe to be reliable, but Debtors do not take any responsibility for the
accuracy thereof.

        This Plan further contemplates the issuance of Reorganized FCC Common
Stock upon conversion of the Reorganized FCC Series A Preferred Stock or the
exercise of the Reorganized FCC Warrants. The Debtors presently intend to
initially issue the Reorganized FCC Common Stock in "book-entry" form as set
forth above.

        (b) Certificated Shares and Warrants.

        Subject to the terms and conditions set forth in the Reorganized FCC
Certificate of Incorporation and the Reorganized FCC Warrant Agreement, Global
Certificates and Global Warrants will be exchanged by Reorganized FCC for
certificated shares of Reorganized FCC Series A Preferred Stock and Reorganized
FCC Warrants if and only if:

        -           Reorganized FCC delivers to the transfer agent notice from
                    the Depository that it is unwilling or unable to act or
                    continue to act as Depository or that it is no longer a
                    clearing agency registered under the Exchange Act and, in
                    either case, a successor Depository is not appointed by the
                    Reorganized FCC within 120 days after the date of such
                    notice from the Depository, or

        -           Reorganized FCC in its sole discretion determines that the
                    Global Certificates (in whole but not in part) or Global
                    Warrants (in whole but not in part) should be exchanged for
                    certificated shares of Reorganized FCC Series A Preferred
                    Stock and Reorganized FCC Warrants, as applicable, and
                    delivers a written notice to such effect to the exchange
                    agent.

                                       35
<Page>

        Any share of Reorganized FCC Series A Preferred Stock or Reorganized FCC
Warrants that are exchangeable as described above is exchangeable for
certificated shares of Reorganized FCC Series A Preferred Stock or Reorganized
FCC Warrants issuable in such names as the Depository shall direct.

        Notwithstanding the foregoing, if Reorganized FCC reasonably determines
that any portion of the beneficial interests in such Global Certificates or
Global Warrants would be held by a Person that is an "underwriter" with respect
to such securities or an "affiliate" of Reorganized FCC, Reorganized FCC may
require that such beneficial interest be issued in the form of a certificated
share of Reorganized FCC Series A Preferred Stock and Reorganized FCC Warrants
which will bear a restrictive legend. SEE "Section 1145(a) of the Bankruptcy
Code."

                                  ARTICLE VIII
                    PROCEDURES FOR RESOLVING DISPUTED CLAIMS

Section 8.1         CHARACTERIZATION OF DISPUTED CLAIMS

        Pursuant to Section llll(a) of the Bankruptcy Code, a proof of claim is
deemed filed under Section 501 of the Bankruptcy Code if that Claim is included
in the Schedules filed under Section 521 or 1106(a)(2) of the Bankruptcy Code
and is deemed filed in the amount listed on the Schedules, except if the Claim
is scheduled as disputed, contingent, or unliquidated. Such a disputed,
contingent, or unliquidated Claim must be asserted by its Holder, or an
indenture trustee representing such Holder, by the timely filing of a proof of
claim. If a proof of claim is not filed in a timely manner, the Claim shall be
deemed to be barred and/or otherwise disallowed. Any Administrative Claim that
is not timely filed in accordance with Section 2.1 of this Plan by any
Administrative Claim bar date established in these Chapter 11 Cases shall be
barred.

Section 8.2         PROSECUTION OF OBJECTIONS TO CLAIMS AND EQUITY INTERESTS

        From and after the Confirmation Date, the Debtors and the Reorganized
Debtors may settle or compromise any Disputed Claim or Disputed Equity Interests
without approval of the Bankruptcy Court and shall have the exclusive authority
to file objections, contest, settle, compromise, withdraw or litigate to
judgment objections to Claims and Equity Interests.

        Any objections to Claims and Equity Interests (other than Claims and
Equity Interests Allowed by the Plan) shall be filed by the latest of (i) one
hundred twenty (120) days after the Effective Date, (ii) thirty (30) days after
a proof of Claim, proof of Equity Interest or application for an Administrative
Claim is filed and properly served upon the Debtors, or (iii) such later date as
may be fixed by the Bankruptcy Court (including any order entered on a Motion to
extend any of the aforesaid dates, which order shall not require or constitute a
modification of this Plan).

Section 8.3         ESTIMATION OF CLAIMS

        The Debtors or the Reorganized Debtors, as the case may be, may, at any
time, request that the Bankruptcy Court estimate any contingent or unliquidated
Claim pursuant to Section 502(c) of the Bankruptcy Code regardless of whether
the Debtors or the Reorganized Debtors have previously objected to such Claim or
whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy
Court will retain jurisdiction to estimate any Claim at any time during
litigation concerning any objection to any Claim, including during the pendency
of any appeal relating to any such objection. In the event that the Bankruptcy
Court estimates any contingent or unliquidated Claim, that estimated amount will
constitute either the Allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on such Claim, the Debtors (and after the
Effective Date, the Reorganized Debtors) may elect to pursue any supplemental
proceedings to object to any ultimate payment on such Claim. All of the
aforementioned Claims objection, estimation and resolution procedures are
cumulative and not necessarily exclusive of one another. Claims may be estimated
and subsequently compromised, settled, withdrawn or resolved by any mechanism
approved by the Bankruptcy Court, except that after the Effective Date the
Reorganized Debtors may compromise, settle or resolve any such Claims without
further Bankruptcy Court approval.

                                       36
<Page>

Section 8.4         PAYMENTS AND DISTRIBUTIONS ON DISPUTED CLAIMS OR DISPUTED
                    EQUITY INTERESTS

        Notwithstanding any provision in the Plan to the contrary, except as
otherwise agreed by the Reorganized Debtors in their sole discretion, no partial
payments and no partial distributions will be made with respect to a Disputed
Claim or Equity Interest until the resolution of such disputes by settlement or
Final Order. Subject to the provisions of this Article VIII, as soon as
practicable after a Disputed Claim or Equity Interest becomes an Allowed Claim
or Equity Interest, the Holder of such Allowed Claim or Equity Interest will
receive all payments and distributions to which such Holder is then entitled
under the Plan. Notwithstanding the foregoing, any Person or Entity who holds
both an Allowed Claim(s) or Equity Interest and a Disputed Claim(s) or Equity
Interest will receive the appropriate payment or distribution on the Allowed
Claim(s) or Equity Interest, although, except as otherwise agreed by the
Reorganized Debtors in their sole discretion, no payment or distribution will be
made on the Disputed Claim(s) or Equity Interest until such dispute is resolved
by settlement or Final Order. Unless otherwise ordered by the Bankruptcy Court,
none of the Debtors or the Reorganized Debtors shall be obligated to establish
any reserves in respect of any Disputed Claim or Equity Interest.

                                   ARTICLE IX
                      CONDITIONS PRECEDENT TO CONFIRMATION
                          AND CONSUMMATION OF THE PLAN

Section 9.1         CONDITIONS PRECEDENT TO CONFIRMATION

        The confirmation of the Plan shall be subject to the following
conditions precedent, which shall have been satisfied or waived pursuant to the
provisions of Section 9.3 hereof:

        (a) the Clerk of the Bankruptcy Court shall have entered an order
granting approval of the Disclosure Statement and finding that it contains
adequate information pursuant to Section 1125 of the Bankruptcy Code and that
order shall have become a Final Order;

        (b) the Confirmation Order in form and substance reasonably acceptable
to the Debtors and the Agents shall have been signed by the Bankruptcy Court and
duly entered on the docket for the Chapter 11 Cases by the Clerk of the
Bankruptcy Court;

        (c) the Restructured Bank Credit Facility, in form and substance
reasonably acceptable to the Bank Group and the Debtors, shall have been filed
as an Exhibit to the Plan Supplement;

        (d) a subordination term sheet, satisfying the condition of clause l(c)
of the Convertible Noteholder Term Sheet, in form and substance reasonably
acceptable to the Agents, the Convertible Noteholder Group and the Debtors,
shall have been filed as an Exhibit to the Plan Supplement; and

        (e) the business terms of the Restructured NTFC Capital Loan Facility,
if different from those previously agreed to with the Agents, or the treatment
of the NTFC Capital Claims pursuant to this Plan, if different from that
previously agreed to with the Agents, shall be reasonably satisfactory to the
Agents, and shall have been filed as an Exhibit to the Plan Supplement.

Section 9.2         CONDITIONS PRECEDENT TO CONSUMMATION

        The consummation of the Plan shall be subject to the following
conditions precedent, which shall have been satisfied or waived pursuant to the
provisions of Section 9.3 hereof:

        (a) ten days shall have passed since the entry of the Confirmation
Order, and the Confirmation Order shall have become a Final Order;

        (b) the Bank Group and the Agents shall have received the recovery
described in Section 3.3 hereof for the holders of Bank Claims and the Agents in
accordance with Section 3.3 hereof and the Term Sheet;

                                       37
<Page>

        (c) the closing of the Restructured Bank Credit Facility shall have
occurred;

        (d) the closing of the Restructured NTFC Capital Loan Facility shall
have occurred;

        (e) the Reorganized FCC Certificate of Incorporation and each other
Debtor's amended certificate of incorporation or amended LLC formation
certificate, as applicable, shall have been filed with the Secretary of State of
such Debtor's state of formation;

        (f) the Reorganized FCC Warrant Agreement shall have been executed;

        (g) the Investor Rights Agreement shall have been executed;

        (h) the New Key Employee Incentive Plan shall have been approved and
adopted by Reorganized FCC's Board of Directors and shall have been executed;

        (i) all authorizations, consents and regulatory approvals required (if
any) in connection with the effectiveness of the Plan shall have been obtained;
and

        (j) all other actions and documents, including without limitation the
subordination term sheet referred to in Section 9.1(d), necessary to implement
the provisions of the Plan on the Effective Date shall have been, respectively,
effected or duly executed and delivered.

Section 9.3         WAIVER OF CONDITIONS

        The Debtors, with the consent of the Agents, may waive any of the
conditions precedent to confirmation of the Plan or to consummation of the Plan
set forth in this Article IX at any time, without notice, without leave or order
of the Bankruptcy Court, and without any formal action other than proceeding to
confirm or consummate the Plan.

Section 9.4         EFFECT OF NON-OCCURRENCE OF CONDITIONS TO CONSUMMATION

        If the Confirmation Order is vacated, the Plan shall be null and void in
all respects and nothing contained in the Plan or the Disclosure Statement
shall: (1) constitute a waiver or release of any Claims by or against, or any
Equity Interests in, the Debtors; (2) prejudice in any manner the rights of the
Debtors, or (3) constitute an admission, acknowledgment, offer or undertaking by
the Debtors in any respect.

                                    ARTICLE X
                   RELEASE, INJUNCTIVE AND RELATED PROVISIONS

Section 10.1        RELEASES

        In consideration of the contributions of certain parties to the Chapter
11 Cases commenced by the Debtors including, but not limited to the waiver by
certain parties (or their Affiliates) of rights against the Debtors, the Plan
provides for certain waivers, exculpations, releases and injunctions.

        (a) RELEASES BY DEBTORS AND REORGANIZED DEBTORS. As of the Effective
Date, for good and valuable consideration, the adequacy of which is hereby
confirmed, the Debtors and Reorganized Debtors in their individual capacities
and as Debtor-in-Possession, (i) shall be deemed to have (A) forever released,
waived and discharged all Claims, obligations, suits, judgments, damages,
demands, debts, rights, Causes of Action and other Liabilities (other than the
rights of the Debtors or Reorganized Debtors to enforce the Plan and the
contracts, instruments, releases, indentures and other agreements or documents
delivered under the Plan), whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or thereafter existing, in law, equity or otherwise that are based in
whole or in part on any act, omission, transaction, condition,

                                       38
<Page>

event or other occurrence taking place or existing on or prior to the Effective
Date since the beginning of time in any way directly, indirectly or derivatively
arising from or related to the Debtors, the Reorganized Debtors, their
respective operations or their securities, any act or omission related to
service with or for or on behalf of Debtors, the Chapter 11 Cases, the Plan or
any act taken pursuant thereto, or the Disclosure Statement (collectively, the
"RELEASED LIABILITIES"), and that could have been asserted by or on behalf of
the Debtors or their Estates or the Reorganized Debtors or their Estates,
against any of the D&O Releasees (other than in cases of willful misconduct or
for money borrowed from or owed to the Debtors or their subsidiaries by any such
D&O Releasee as set forth in books and records), and (B) forever covenanted with
each of the D&O Releasees not to sue, assert any claim or claims against or
otherwise seek recovery from any D&O Releasee, whether based on tort, contract
or otherwise (except in cases of willful misconduct) in connection with any of
the foregoing; and (ii) shall be deemed to have (A) forever released, waived and
discharged all avoidance and recovery actions under Bankruptcy Code sections
544, 545, 547, 548, 549, 550, 551 and/or 553 ("Avoidance Actions") that could
have been asserted by or on behalf of the Debtors or their Estates or the
Reorganized Debtors or their Estates, against any of the Holders of Bank Claims
(or their predecessors-in-interest with respect to transferred Claims) and/or
Convertible Secured Note Claims (or their predecessors in-interest with respect
to transferred Claims), and (B) forever covenanted with each such Holder not to
commence any Avoidance Action against or otherwise seek recovery from such
Holder or its predecessors in-interest. As of the Effective Date, for good and
valuable consideration, the adequacy of which is hereby confirmed, the Debtors
and Reorganized Debtors in their individual capacities and as
Debtor-in-Possession, shall be deemed to have (i) forever released, waived and
discharged all claims against each member of the Committee with respect to that
member's actions taken on behalf of the Committee, and all claims against each
of the Committee's professionals for actions taken in their capacity as such.

        (b) RELEASES BY HOLDERS OF CLAIMS AND EQUITY INTERESTS. As of the
Effective Date, for good and valuable consideration, the adequacy of which is
hereby confirmed, (i) each Holder of a Claim or Equity Interest that has voted
to accept the Plan, and (ii) to the fullest extent permissible under applicable
law, as such law may be extended or interpreted subsequent to the Effective
Date, all other Holders of Claims and Equity Interests who are members of a
Class consolidated for voting purposes which consolidated Class has voted to
accept the Plan (and expressly excepting those who are conclusively presumed to
have rejected the Plan pursuant to Section 1126 (g) of the Bankruptcy Code and
are not entitled to vote to accept or reject this Plan), in consideration for
the obligations of the Debtors and Reorganized Debtors under the Plan, the
Reorganized FCC Series A Preferred Stock, and other contracts, instruments,
releases, agreements or documents to be delivered in connection with the Plan,
each Holder that has held, holds or may hold a Claim or Equity Interest, as
applicable, shall be deemed to have (A) forever released, waived and discharged
all Released Liabilities against any of the D&O Releasees (other than in cases
of willful misconduct or claims or interests unrelated to the Debtors), and (B)
forever covenanted with each of the D&O Releasees not to sue, assert any claim
or claims against or otherwise seek recovery from any D&O Releasee, whether
based on tort, contract or otherwise (other than in cases of willful misconduct)
in connection with any of the foregoing. As of the Effective Date, for good and
valuable consideration, the adequacy of which is hereby confirmed, (i) each
Holder of a Claim or Equity Interest that voted to accept the Plan and (ii) to
the fullest extent permissible under applicable law, as such law may be extended
or interpreted subsequent to the Effective Date, all other Holders of Claims and
Equity Interests who are members of a Class consolidated for voting purposes
which consolidated Class has voted to accept the Plan (and expressly excepting
those who are conclusively presumed to have rejected the Plan pursuant to
Section 1126 (g) of the Bankruptcy Code and are not entitled to vote to accept
or reject this Plan), in consideration for the obligations of the Debtors and
Reorganized Debtors under the Plan, the Reorganized FCC Series A Preferred
Stock, and other contracts, instruments, releases, agreements or documents to be
delivered in connection with the Plan, each Holder that has held, holds or may
hold a Claim or Equity Interest, as applicable, shall be deemed to have (i)
forever released, waived and discharged all claims against each member of the
Committee with respect to that member's actions taken on behalf of the Committee
(other than in cases of willful misconduct), and all claims against each of the
Committee's professionals for actions taken in their capacity as such (other
than in cases of willful misconduct).

Section 10.2        EXCULPATION

        None of the Debtors, the Reorganized Debtors, any of the D&O Releasees,
the Disbursing Agent, the Committee, the Indenture Trustee, or any of their
respective professionals or any members of Committee shall have

                                       39
<Page>

or incur any liability to, or be subject to any right of action by, any Holder
of any Claim or Equity Interest, or any other party in interest, or any of their
respective members, directors, officers, shareholders, employees, attorneys,
financial advisors, agents and representatives, or any of their successors or
assigns for any act or omission in connection with, or arising out of the
Debtors' restructuring, the Chapter 11 Cases, the Disclosure Statement, the
Plan, the Plan Documents, the Support Agreements, the solicitation of votes for,
and the pursuit of confirmation of the Plan, the consummation of the Plan, or
the administration of the Plan or the property to be distributed under the Plan,
including, without limitation, all documents ancillary thereto, all decisions,
actions, inactions and alleged negligence or misconduct relating thereto and all
prepetition activities leading to the promulgation and confirmation of the Plan
except for willful misconduct or gross negligence as determined by a Final Order
of the Bankruptcy Court. The foregoing parties shall be entitled to rely upon
the advice of counsel with respect to their duties and responsibilities under
the Plan. Nothing in this Section 10.2 shall be construed to abrogate the
obligations of the Reorganized Debtors under the Plan Documents upon the
occurrence of the Effective Date.

Section 10.3        INJUNCTION

        EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, THE CONFIRMATION ORDER SHALL
PROVIDE, AMONG OTHER THINGS, BY EXPRESS PROVISION OR BY CONFIRMING THIS PLAN,
THAT ALL PERSONS AND ENTITIES WHO HAVE HELD, HOLD OR MAY HOLD CLAIMS AGAINST OR
EQUITY INTERESTS IN THE DEBTORS ARE, WITH RESPECT TO THOSE CLAIMS AND EQUITY
INTERESTS, PERMANENTLY ENJOINED, ON AND AFTER THE CONFIRMATION DATE, FROM:

        (a) (i) ASSERTING, COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION
AGAINST THE DEBTORS, THE REORGANIZED DEBTORS, ANY OF THE D&O RELEASEES,
COMMITTEE MEMBERS OR COMMITTEE PROFESSIONALS TO THE EXTENT OF ANY RELEASE
PURSUANT TO ARTICLE 10.1 OF THIS PLAN OR ANY PERSON OR ENTITY EXCULPATED
PURSUANT TO ARTICLE 10.2 OF THIS PLAN, ANY ACTION AGAINST ANY OF THEIR
RESPECTIVE ASSETS, AND ANY OTHER OR FURTHER CLAIM OR EQUITY INTEREST BASED UPON
ANY DOCUMENT, INSTRUMENT OR ACT, OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY
KIND OR NATURE THAT OCCURRED PRIOR TO THE CONFIRMATION DATE; (ii) THE
ENFORCEMENT, ATTACHMENT, COLLECTION OR RECOVERY, BY ANY MANNER OR MEANS OF ANY
JUDGMENT, AWARD OR DECREE OR ORDER AGAINST THE DEBTORS, THE REORGANIZED DEBTORS,
ANY OF THE D&O RELEASEES, COMMITTEE MEMBERS OR COMMITTEE PROFESSIONALS TO THE
EXTENT OF ANY RELEASE PURSUANT TO ARTICLE 10.1 OF THIS PLAN, OR ANY PERSON OR
ENTITY EXCULPATED PURSUANT TO ARTICLE 10.2 WITH RESPECT TO ANY SUCH ACTION
REFERRED TO IN CLAUSE (a)(i) ABOVE; (iii) CREATING, PERFECTING OR ENFORCING ANY
LIEN OF ANY KIND AGAINST THE DEBTORS, THE REORGANIZED DEBTORS, ANY OF THE D&O
RELEASEES, COMMITTEE MEMBERS OR COMMITTEE PROFESSIONALS TO THE EXTENT OF ANY
RELEASE PURSUANT TO ARTICLE 10.1 OF THIS PLAN, OR ANY PERSON OR ENTITY
EXCULPATED PURSUANT TO ARTICLE 10.2, WITH RESPECT TO ANY SUCH ACTION REFERRED TO
IN CLAUSE (a)(i) ABOVE; (iv) ASSERTING ANY SETOFF, RIGHT OF SUBROGATION OR
RECOUPMENTS OF ANY KIND AGAINST ANY OBLIGATION DUE THE DEBTORS, THE REORGANIZED
DEBTORS, ANY OF THE D&O RELEASEES, COMMITTEE MEMBERS OR COMMITTEE PROFESSIONALS
TO THE EXTENT OF ANY RELEASE PURSUANT TO ARTICLE 10.1 OF THIS PLAN, OR ANY
PERSON OR ENTITY EXCULPATED PURSUANT TO ARTICLE 10.2 OF THIS PLAN, WITH RESPECT
TO ANY SUCH ACTION REFERRED TO IN CLAUSE (a)(i) ABOVE; AND (v) ANY ACTION, IN
ANY MANNER, IN ANY PLACE WHATSOEVER, THAT DOES NOT CONFORM OR COMPLY WITH THE
PLAN; AND

        (b) ALL PERSONS AND ENTITIES ARE PERMANENTLY ENJOINED FROM COMMENCING OR
CONTINUING IN ANY MANNER, ANY SUIT, ACTION OR OTHER PROCEEDING, ON ACCOUNT OF OR
RESPECTING ANY CLAIM, EQUITY INTEREST, INTEREST OBLIGATION, DEBT RIGHT, REMEDY
OR LIABILITY RELEASED OR TO BE RELEASED PURSUANT TO THIS ARTICLE X; PROVIDED,
HOWEVER, THAT THIS INJUNCTION SHALL NOT PRECLUDE POLICE OR REGULATORY AGENCIES
FROM FULFILLING THEIR STATUTORY DUTIES.

                                   ARTICLE XI
                            RETENTION OF JURISDICTION

Section 11.1        RETENTION OF JURISDICTION

        Notwithstanding the entry of the Confirmation Order, the Bankruptcy
Court shall retain such jurisdiction as legally permissible, including, without
limitation, jurisdiction to:

                                       40
<Page>

        (a) Allow, disallow, determine, liquidate, classify, estimate or
establish the priority or secured or unsecured status of any Claim or Equity
Interest including the resolution of any request for payment of any
Administrative Claim and the resolution of any and all objections to the
allowance or priority of Claims or Equity Interests;

        (b) Grant or deny any applications for allowance of compensation or
reimbursement of expenses authorized pursuant to the Bankruptcy Code or the
Plan, for periods ending on or before the Effective Date;

        (c) Resolve any matters related to the assumption, assumption and
assignment or rejection of any executory contract or unexpired lease to which
the Debtors are party or with respect to which the Debtors may be liable and to
hear, determine and, if necessary, liquidate, any Claims arising therefrom,
including those matters related to the amendment after the Effective Date
pursuant to Article VI above to add any executory contracts or unexpired leases
to the list of executory contracts and unexpired leases to be rejected;

        (d) Ensure that distributions to Holders of Allowed Claims or Allowed
Equity Interests are accomplished pursuant to the provisions of the Plan,
including ruling on any motion filed pursuant to Article VIII;

        (e) Decide or resolve any motions, adversary proceedings, contested or
litigated matters and any other matters and grant or deny any applications
involving the Debtors that may be pending on the Effective Date;

        (f) Enter such orders as may be necessary or appropriate to implement or
consummate the provisions of the Plan, including, but not limited to,
modification or amendment thereof pursuant to Section 12.4 of the Plan, and all
contracts, instruments, releases, indentures and other agreements or documents
created under, or in connection with, the Plan or the Disclosure Statement;

        (g) Resolve any cases, controversies, suits or disputes that may arise
in connection with the interpretation or enforcement of the Plan, the Plan
Documents or any Person's or Entity's obligations incurred under, or in
connection with, the Plan or the Plan Documents;

        (h) Issue injunctions, enter and implement other orders or take such
other actions as may be necessary or appropriate to restrain interference by any
Person or Entity with the occurrence of the Effective Date or enforcement of the
Plan, except as otherwise provided herein;

        (i) Resolve any cases, controversies, suits or disputes with respect to
the releases, injunction and other provisions contained in Article X and enter
such orders as may be necessary or appropriate to implement such releases,
injunction and other provisions;

        (j) Enter and implement such orders as are necessary or appropriate if
the Confirmation Order is for any reason modified, stayed, reversed, revoked or
vacated;

        (k) Determine any other matters that may arise in connection with or
relate to the Plan, the Disclosure Statement, the Confirmation Order, the Plan
Documents or any contract, instrument, release, indenture or other agreement or
document created under, or in connection with, the Plan or the Disclosure
Statement;

        (1) Enter an order or final decree concluding the Chapter 11 Cases;

        (m) Resolve disputes concerning any reserves with respect to Disputed
Claims, Disputed Equity Interests or the administration thereof;

        (n) Resolve any disputes concerning whether a Person or Entity had
sufficient notice of the Chapter 11 Cases, the applicable Claims Bar Date, the
hearing on the approval of the Disclosure Statement as containing adequate
information, the hearing on the confirmation of the Plan for the purpose of
determining whether a Claim or Equity Interest is discharged hereunder or for
any other purpose;

                                       41
<Page>

        (o) Recover all assets of the Debtors and property of the Estates,
wherever located, including any Causes of Action under Sections 544 through 550
of the Bankruptcy Code to the extent not released and waived pursuant to the
terms and conditions of the Plan; and

        (p) Hear and resolve all matters concerning state, local, and federal
taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code.

                                   ARTICLE XII
                            MISCELLANEOUS PROVISIONS

Section 12.1        DISSOLUTION OF COMMITTEES

        On the Effective Date, all Committees shall dissolve and members shall
be released and discharged from all rights and duties arising from, or related
to, the Chapter 11 Cases.

Section 12.2        PAYMENT OF STATUTORY FEES

        All fees payable pursuant to Section 1930 of Title 28 of the United
States Code, as determined by the Bankruptcy Court at the hearing pursuant to
Section 1128 of the Bankruptcy Code, shall be paid by the Debtors on or before
the Effective Date, and thereafter shall be paid by Reorganized FCC through the
date of entry of the final decree in the Debtors' Chapter 11 Cases. The amount
of fees payable by each Debtor under Section 1930 of Title 28 of the United
States Code is determined by allocating cash disbursements to each Debtor in
proportion to the revenue received by each individual Debtor over the total
revenue received by all of the Debtors.

Section 12.3        DISCHARGE OF DEBTORS

        Except as otherwise provided herein or the Confirmation Order, pursuant
to Section 1141(d) of the Bankruptcy Code, (a) the rights afforded in the Plan
and the treatment of all Claims and Equity Interests herein, shall be in
exchange for and in complete satisfaction, discharge and release of Claims and
Equity Interests of any nature whatsoever, known or unknown, including any
interest accrued or expenses incurred on such Claims from and after the Petition
Date, against the Debtors, the Reorganized Debtors, or any of their Estates,
assets or properties, (b) on the Effective Date, all such Claims against, and
Equity Interests in the Debtors shall be satisfied, discharged and released in
full and (c) all Persons and Entities shall be precluded from asserting against
the Reorganized Debtors, their successors or their assets or properties any
other or further Claims or Equity Interests based upon any act or omission,
transaction or other activity of any kind or nature that occurred prior to the
Confirmation Date.

Section 12.4        MODIFICATION OF THE PLAN

        The Debtors reserve the right, with the consent of the Agents, to alter,
amend or modify the Plan prior to the entry of the Confirmation Order. After the
entry of the Confirmation Order, the Debtors or the Reorganized Debtors, as the
case may be, may, upon order of the Bankruptcy Court, amend or modify the Plan,
in accordance with Section 1127(b) of the Bankruptcy Code, or remedy any defect
or omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan.

Section 12.5        REVOCATION OR WITHDRAWAL OF PLAN

        The Debtors reserve the right to revoke and withdraw the Plan at any
time prior to the Confirmation Date. If the Plan is so revoked or withdrawn, or
if the Effective Date does not occur, then the Plan shall be deemed null and
void, and of no force or effect.

Section 12.6        SUCCESSORS AND ASSIGNS

                                       42
<Page>

        The rights, benefits and obligations of any Person or Entity named or
referred to in the Plan shall be binding on, and shall inure to the benefit of
any heir, executor, administrator, successor or assign of such Person or Entity.

Section 12.7        RESERVATION OF RIGHTS

        Except as expressly set forth herein, the Plan shall have no force or
effect unless the Bankruptcy Court shall enter the Confirmation Order. None of
the filing of the Plan, any statement or provision contained herein, or the
taking of any action by the Debtors with respect to the Plan shall be or shall
be deemed to be an admission or waiver of any rights of the Debtors with respect
to the Holders of Claims or Equity Interests prior to the Effective Date.

Section 12.8        SECTION 1145 EXEMPTION

        Pursuant to Section 1145(a) of the Bankruptcy Code, any offer, issuance,
transfer or exchange of Reorganized FCC Series A Preferred Stock, the
Reorganized FCC Warrants, the Reorganized FCC Common Stock or other securities
under the Plan, or the issuance of Reorganized FCC Common Stock upon conversion
of the Reorganized FCC Series A Preferred Stock or upon exercise of the
Reorganized FCC Warrants, or the making or delivery of an offering memorandum or
other instrument of offer or transfer related thereto under the Plan shall be
exempt from Section 5 of the Securities Act or any similar state or local law
requiring the registration for offer or sale of a security or registration or
licensing of an Issuer or a security.

Section 12.9        HEADINGS

        Headings utilized in the Plan are for the convenience of reference only
and shall not constitute a part of the Plan for any other purpose.

Section 12.10       GOVERNING LAW

        Except to the extent that the Bankruptcy Code or the Bankruptcy Rules
are applicable, and subject to the provisions of any contract, instrument,
release, indenture or other agreement or document entered into in connection
with this Plan, the rights and obligations arising under this Plan shall be
governed by, and construed and enforced in accordance with, the laws of the
State in which the Bankruptcy Court resides, without giving effect to the
principles of conflict of laws thereof.

Section 12.11       SEVERABILITY

        Except as to terms which would frustrate the overall purposes of the
Plan, should any provision in the Plan be determined to be unenforceable, such
determination shall in no way limit or affect the enforceability and operative
effect of any or all other provisions of the Plan.

Section 12.12       IMPLEMENTATION

        The Debtors shall take all steps, and execute all documents, including
appropriate releases, necessary to effectuate the provisions contained in the
Plan.

Section 12.13       INCONSISTENCY

        In the event of any inconsistency among the Plan, the Disclosure
Statement, the Plan Documents, any exhibit to the Plan or any other instrument
or document created or executed pursuant to the Plan, the provisions of the Plan
shall govern.

Section 12.14       FURTHER ASSURANCES

                                       43
<Page>

        The Debtors, the Reorganized Debtors and all Holders of Claims and
Equity Interests receiving distributions under the Plan and all other parties in
interest shall, from time to time, prepare, execute and deliver any agreements
or documents and take any other actions as may be necessary or advisable to
effectuate the provisions and intent of the Plan.

Section 12.15       SERVICE OF DOCUMENTS

        Any pleading, notice or other document required by the Plan to be served
on or delivered to the Debtors shall be sent by first class U.S. mail, postage
prepaid to:

                    Focal Communications Corporation
                    200 N. LaSalle Street, Suite 1100
                    Chicago, Illinois 60601
                    Attn: General Counsel

                    with copies to:

                    Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C.
                    919 N. Market Street
                    Wilmington, Delaware 19899
                    Telephone: (302) 652-4100
                    Facsimile: (302) 652-4400
                    Attn: Laura Davis Jones

Section 12.16       EXEMPTION FROM CERTAIN TRANSFER TAXES

        Pursuant to Section 1146 of the Bankruptcy Code: (a) the issuance,
transfer or exchange of any securities, Instruments or documents; (b) the
creation of any other Lien, mortgage, deed of trust or other security Interest;
(c) the making or assignment of any lease or sublease or the making or delivery
of any deed or other instrument of transfer under, pursuant to, in furtherance
of or in connection with the Plan, including, without limitation, any deeds,
bills of sale or assignments executed in connection with any of the transactions
contemplated under the Plan or the reinvesting, transfer or sale of any real or
personal property of the Debtors pursuant to, in implementation of, or as
contemplated in the Plan, and (d) the issuance, renewal, modification or
securing of indebtedness by such means, and the making, delivery or recording of
any deed or other instrument of transfer under, in furtherance of, or in
connection with, the Plan, including, without limitation, the Confirmation
Order, shall not be subject to any document recording tax, stamp tax, conveyance
fee or other similar tax, mortgage tax, real estate transfer tax, mortgage
recording tax or other similar tax or governmental assessment. Consistent with
the foregoing, each recorder of deeds or similar official for any county, city
or governmental unit in which any instrument hereunder is to be recorded shall,
pursuant to the Confirmation Order, be ordered and directed to accept such
instrument without requiring the payment of any filing fees, documentary stamp
tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax.

Section 12.17       COMPROMISE OF CONTROVERSIES

        Pursuant to Bankruptcy Rule 9019, and in consideration for the
classification, distribution and other benefits provided under the Plan, the
provisions of the Plan shall constitute a good faith compromise and settlement
of all Claims or controversies resolved pursuant to the Plan. The entry of the
Confirmation Order shall constitute the Bankruptcy Court's approval of each of
the foregoing compromises or settlements, and all other compromises and
settlements provided for in the Plan, and the Bankruptcy Court's findings shall
constitute its determination that such compromises and settlements are in the
best interests of the Debtors, the Reorganized Debtors, the Estates, and any
Entity holding claims against the Debtors.

Section 12.18       NO ADMISSIONS

                                       44
<Page>

        Notwithstanding anything herein to the contrary, nothing contained in
the Plan shall be deemed as an admission by an Entity with respect to any matter
set forth herein.

Section 12.19       FILING OF ADDITIONAL DOCUMENTS

        On or before the Effective Date, the Debtors may file with the
Bankruptcy Court such agreements and other documents as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan.

                                       45
<Page>

                               Respectfully Submitted,

                               FOCAL COMMUNICATIONS CORPORATION

                               FOCAL COMMUNICATIONS CORPORATION OF CALIFORNIA

                               FOCAL COMMUNICATIONS CORPORATION OF CONNECTICUT

                               FOCAL COMMUNICATIONS CORPORATION OF FLORIDA

                               FOCAL COMMUNICATIONS CORPORATION OF GEORGIA

                               FOCAL COMMUNICATIONS CORPORATION OF ILLINOIS

                               FOCAL COMMUNICATIONS CORPORATION OF MASSACHUSETTS

                               FOCAL COMMUNICATIONS CORPORATION OF MICHIGAN

                               FOCAL COMMUNICATIONS CORPORATION OF MID-ATLANTIC

                               FOCAL COMMUNICATIONS CORPORATION OF MINNESOTA

                               FOCAL COMMUNICATIONS CORPORATION OF MISSOURI

                               FOCAL COMMUNICATIONS CORPORATION OF NEW JERSEY

                               FOCAL COMMUNICATIONS CORPORATION OF NEW YORK

                               FOCAL COMMUNICATIONS CORPORATION OF OHIO

                               FOCAL COMMUNICATIONS CORPORATION OF PENNSYLVANIA

                               FOCAL COMMUNICATIONS CORPORATION OF TEXAS

                               FOCAL COMMUNICATIONS CORPORATION OF VIRGINIA

                               FOCAL COMMUNICATIONS CORPORATION OF WASHINGTON

                                        1
<Page>

                               FOCAL FINANCIAL SERVICES, INC.

                               FOCAL TELECOMMUNICATIONS CORPORATION

                               FOCAL EQUIPMENT FINANCE, LLC

                               FOCAL FIBER LEASING, LLC

                               By: /S/
                                   ---------------------------------
                               Name:
                               Title:

                                        2
<Page>

                                    EXHIBIT 1

                              BANK GROUP TERM SHEET

The terms of the Restructured Bank Credit Facility are as follows:

     1.   Undrawn revolving commitments under the Prepetition Credit Facility to
          be terminated.

     2.   Debt on the Effective Date ($78 million or less), following reduction
          by the amount of the payment made pursuant to clause (B) of the first
          sentence of Section 3.3(b)(i) of the Plan, shall be reinstated on the
          following terms:

               a.   Interest rate: LIBOR plus 5.0% or Prime plus 4.0% (at
                    borrower's election)

               b.   4-year term

               c.   Amortization payments as follows:

<Table>
<Caption>
                                                                  Amount
                            Fiscal Quarter                     ($ million)
                    -----------------------------------------------------------------
                    <S>                                            <C>
                    Q3 2003                                        1.5
                    Q4 2003                                        1.5
                    Ql 2004                                        1.5
                    Q2 2004                                        1.5
                    Q3 2004                                        3.0
                    Q4 2004                                        3.0
                    Ql 2005 and Quarter thereafter                  10% of outstandings
</Table>

                    Provided that the above amounts shall be expressed as a
                    percentage which percentage shall be calculated with the
                    numerator equal to the specified amount above and the
                    denominator equal to the amount of outstanding senior
                    indebtedness at the Effective Date.

                    In addition to the above scheduled amortization, the FCC
                    shall make additional amortization payments based upon a
                    cash flow sweep which provides for a mandatory prepayment at
                    the end of each fiscal quarter in an amount equal to the
                    lesser of (i) the amount by which the average daily
                    available cash balance of FCC and the other Debtors
                    (excluding restricted cash) during a fiscal quarter exceeds
                    $20 million (provided that the pro forma cash balance at the
                    end of such fiscal quarter, after giving effect to any such
                    payment, also exceeds $10 million) and (ii) $5 million. Any
                    such mandatory prepayment shall be applied pro rata to
                    outstanding principal (with the effect of reducing pro rata
                    scheduled amortization payments).

                    In addition to the above scheduled amortization and cash
                    flow sweep payments, FCC shall, at the end of each fiscal
                    quarter, commencing with a first payment date of June 30,
                    2004 at its option either (i) make an additional mandatory
                    prepayment in an amount of $3 million to be applied pro rata
                    to outstanding principal (with the effect of reducing pro
                    rata scheduled amortization payments), or (ii) accrue a PIK
                    fee of $3 million for the ratable benefit of the Bank Group
                    which shall be evidenced by a note secured on the second
                    ranking basis by all of the Collateral (hereinafter
                    defined), provided however that such PIK fee shall not
                    accrue in respect to any fiscal quarter (not to exceed a
                    maximum of four fiscal quarters) for which the ratio on the
                    last day thereof of senior debt to EBITDA minus capital
                    expenditures for the 12 month period ending on such date is
                    less than 2:1. Upon a sale or change of control (other than
                    a change of control resulting from

                                        1
<Page>

                    consummation of the Plan) in which the purchaser assumes the
                    bank debt or repays it in full, the provisions of this
                    paragraph shall terminate.

               d.   Financial covenants, definitions and baskets to be
                    determined but to include a new minimum cash covenant and a
                    new EBITDA minus Capex covenant.

               e.   Except as otherwise contemplated herein, the covenants,
                    representations and warranties and other material terms and
                    provisions of the definitive credit documents shall be
                    substantially the same as those of the Prepetition Credit
                    Facility and otherwise reasonably satisfactory to the Agents
                    with such modifications thereto to reflect the new capital
                    and organizational structure of FCC and the other Debtors
                    following consummation of the Plan.

               f.   Existing cash control accounts to be reaffirmed.

               g.   Full collateral and security package to include blanket
                    liens on all assets, subject to pre-existing liens, NTFC
                    liens (referred to in NTFC Capital Term Sheet, PARA b) and
                    other permitted liens (the "Collateral").

               h.   Release and waiver of avoidance and recovery actions under
                    Bankruptcy Code sections 544, 545, 547, 548, 549, 550, 551
                    and 553.

                                        2
<Page>

                                    EXHIBIT 2

                    CONVERTIBLE SECURED NOTEHOLDER TERM SHEET

Each Holder of Existing Convertible Secured Notes will receive:

1.   Such Holder's Pro Rata share of eighty-five percent (85%) of $65 million
     Reorganized FCC Series A Preferred Stock containing the following terms:

     a.   8.0% PIK interest;

     b.   optional redemption by Majority Holders on 10th anniversary;

     c.   unsecured and subordinated to the Restructured Bank Credit Facility;
          and

     d.   convertible into shares of FCC Reorganized Common Stock.


2.   No cash fees will be paid on account of new preferred stock nor to any
     equity sponsors for management related activities.

3.   Release and waiver of avoidance and recovery actions under Bankruptcy Code
     sections 544, 545, 547, 548, 549, 550, 551 and 553.

4.   The Debtors shall pay on the date that is thirty (30) days after the
     Effective Date the Convertible Secured Noteholders' fees and expenses
     related to the negotiation of the Plan and Plan Documents.

                                        1
<Page>

                                    EXHIBIT 3

                             NTFC CAPITAL TERM SHEET

The NTFC Capital Claims shall be treated as follows:

The amount of the NTFC Capital Secured Claim shall be $3 million. This amount
shall be treated as the Restructured NTFC Capital Loan Facility, evidenced by a
$3 million secured note on the following terms:

     a.   Interest rate: 8.0% per annum, payable quarterly.

     b.   First lien on NTFC Capital equipment and all accessions and additions
          thereto ("NTFC Collateral")

     c.   The amortization schedule for the $3.0 million of principal shall be
          as follows:

<Table>
<Caption>
                           PRINCIPAL
                           AMORTIZATION
          DATE             ($000)
          -----            ------------
          <S>              <C>
          Q3-03                -
          Q4-03                -
          Ql-04                -
          Q2-04               60
          Q3-04               59
          Q4-04               58
          Ql-05               56
          Q2-05              111
          Q3-05              106
          Q4-05              102
          Ql-06               98
          Q2-06              235
          Q3-06              212
          Q4-06              190
          Ql-07              171
          Q2-07              154
          Q3-07            1,388
</Table>

     d.   Financial covenants, definitions and baskets to be determined but to
          include a new minimum cash covenant and a new EBITDA minus Capex
          covenant. Covenants will not at any time be any more restrictive than
          covenants agreed to between FCC and Goldman Sachs Credit Partners
          L.P., Salomon Smith Barney Inc., and Citicorp USA, Inc. and certain
          other lenders under the Restructured Bank Credit Facility (PROVIDED
          that, subject to the provisions of (g), below, the Restructured NTFC
          Capital Loan Facility loan agreement shall not (directly or
          indirectly) contain any restriction (whether in the form of a
          covenant, default, acceleration or other right, other than rights to
          cash generated from sales of NTFC Collateral) on any change in
          control, merger, acquisition, consolidation, sale, lease, transfer or
          other disposition of FCC, its subsidiaries or any of their respective
          assets (collectively, a "Change in Control"), and the NTFC agreement
          shall permit the assignment and assumption of the obligations
          thereunder in connection with any transfer.

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     e.   The Restructured NTFC Capital Loan Facility will cross-accelerate with
          the Restructured Bank Credit Facility, including without limitation
          any acceleration of the Restructured Bank Credit Facility as a result
          of a Change in Control.

     f.   The $14.1 million balance of the NTFC Capital Claims shall be
          classified as and shall constitute an FCC Class 1G - General Unsecured
          Claim.

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