AMENDMENT NO. 5 TO
                 THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT

          AMENDMENT NO. 5 dated as of April 30, 1999 to the Amended and Restated
Stockholders Agreement, dated as of October 31, 1997 (as heretofore amended, the
"Stockholders  Agreement")  among KMC Telecom  Holdings,  Inc.,  Nassau  Capital
Partners  L.P.,  NAS Partners I L.L.C.,  Harold N. Kamine,  Newcourt  Commercial
Finance Corporation (as successor to AT&T Credit Corporation),  General Electric
Capital Corporation, First Union National Bank (as successor to CoreStates Bank,
N.A.), CoreStates Holdings, Inc., and ., KMC Telecommunications L.P.

                               W I T N E S S E T H

          WHEREAS,  the parties hereto desire to make certain  amendments to the
Stockholders Agreement;

          NOW,  THEREFORE,  in  consideration of the premises and for other good
and  valuable  consideration  the  receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto hereby agree as follows:

          1. DEFINED TERMS.  Unless  otherwise  defined herein,  all capitalized
terms  defined in the  Stockholders  Agreement and used herein are so used as so
defined.  In  addition,  the  following  terms shall have the meanings set forth
below:

          "HYDO II" means the  offering  and sale of not more than  $300,000,000
aggregate   principal   amount  of  Senior   Notes  due  2009  of  the  Company,
substantially in the manner  contemplated by a purchase  agreement to be entered
into between the Company and Morgan  Stanley & Co.  Incorporated,  Credit Suisse
First  Boston,  First  Union  Capital  Markets,  CIBC  Oppenheimer,   BancBoston
Robertson Stephens Inc. and Wasserstein Perella & Co. Inc..

          "PREFERRED STOCK  REGISTRATION  RIGHTS  AGREEMENT" means the Preferred
Stock  Registration  Rights  Agreement  dated as of April 30,  1999  between the
Company and First Union Investors, Inc.

          "PREFERRED  STOCK  WARRANT  AGREEMENT  2" means the Warrant  Agreement
dated as of April 30,  1999 among the  Company,  The Chase  Manhattan  Bank,  as
Warrant Agent and First Union  Investors,  Inc.,  which  Preferred Stock Warrant
Agreement 2 is being entered into in connection  with the execution and delivery
of the Purchase Agreement 2.

          "PREFERRED  STOCK  WARRANT  SHARES 2" means  shares  of  Common  Stock


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issuable upon exercise of Preferred  Stock Warrants 2, such other  securities as
shall be issuable upon the exercise of Preferred  Stock Warrants 2, or shares of
Common Stock or other  securities  received upon the exercise of Preferred Stock
Warrants 2.

          "PREFERRED  STOCK  WARRANTS  2" means  Warrants  issued to  holders of
Series E Preferred  Stock pursuant to the Preferred  Stock Warrant  Agreement 2,
each such Warrant  initially  entitling the holder thereof to purchase  0.471756
shares of Common Stock at an exercise price of $.01 per share.

          "PURCHASE  AGREEMENT 2" means the Securities  Purchase Agreement dated
as of April 30, 1999 among the Company and First Union Investors, Inc.

          "REGISTRATION  RIGHTS  AGREEMENT  II"  means the  Registration  Rights
Agreement  to be entered  into  between  the  Company  and Morgan  Stanley & Co.
Incorporated,  Credit Suisse First Boston,  First Union  Capital  Markets,  CIBC
Oppenheimer,  BancBoston  Robertson Stephens Inc. and Wasserstein Perella & Co.,
Inc.,  relating  to the  granting  by the  Company of  Registration  Rights with
respect to the 2009 Senior Notes.

          "2009  SENIOR  NOTES"  means the Senior Notes due 2009 to be issued by
the Company in connection with the HYDO II.

          "WARRANT   REGISTRATION   RIGHTS   AGREEMENT   2"  means  the  Warrant
Registration  Rights  Agreement dated as of April 30, 1999 among the Company and
First Union Investors,  Inc., which Warrant  Registration  Rights Agreement 2 is
being  entered  into in  connection  with  the  execution  and  delivery  of the
Preferred Stock Warrant Agreement 2.

          2. AMENDMENTS TO SECTION 5 OF THE STOCKHOLDERS AGREEMENT. Paragraph(a)
of Section 5 of the Stockholders Agreement is amended to read as follows:

               PUT  RIGHT.  (a)  Subject  to  the  covenants  contained  in  the
indentures  entered into in connection  with the Senior  Discount Notes and 2009
Senior Notes if no Liquidity  Event shall have  occurred by the later of October
22, 2003 or 90 days following the final maturity date of debt securities  issued
in the  HYDO  II,  then  each of  Nassau  and its  Affiliates,  AT&T,  GECC  and
CoreStates  shall  have the right,  at any time  thereafter,  by giving  written
notice to the Company (a "PUT NOTICE"),  to require the Company to repurchase (a
"PUT") all or any portion of the shares of Convertible Preferred Stock or Common
Stock held by such Stockholder for an amount (the "PUT AMOUNT") equal to (A) the
fair market value of the shares subject to such Put as determined within 30 days
of each  Put  Notice  by an  investment  bank of  national  reputation  which is
mutually acceptable to the Company and holders of a majority of the voting power
of Common Stock and Common Stock Equivalents held by all parties exercising Puts
hereunder or (B) in the case of any shares of Convertible  Preferred  Stock,  at


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the liquidation preference thereof plus all accrued and unpaid dividends, at the
option of holders  thereof;  provided that AT&T,  GECC and CoreStates  shall not
have the right to exercise a Put hereunder  unless Nassau or its Affiliates have
exercised a Put; and provided  further that the Company may not  repurchase  any
shares of Convertible  Preferred  Stock or Common Stock hereunder so long as the
Series E Preferred  Stock or the Series F  Preferred  Stock  remain  outstanding
unless the holders of the Series E Preferred Stock and the holders of the Series
F  Preferred  Stock  have  waived in  writing  their  right to have the  Company
repurchase  their Series E Preferred Stock and Series F Preferred Stock prior to
the  repurchase by the Company of any shares of Convertible  Preferred  Stock or
Common Stock hereunder.  The Company shall give AT&T, GECC and CoreStates prompt
notice of Nassau's  intent to exercise a Put.  The Company  shall give notice to
Nassau and the other Stockholders of any exercise of the Put right under Section
14 of either of the Subsidiary  Warrants or hereunder.  The Company shall pay to
the party  exercising  a Put the Put  Amount  within 60 days of the date of such
determination  of  fair  market  value.  Any  unpaid  balance  of a  Put  Amount
thereafter  shall bear interest,  which interest shall be paid together with any
payment of such Put Amount,  at a rate of 18.0% per annum (the "DEFAULT  RATE");
provided  that  accrual of interest at the Default  Rate shall not  constitute a
waiver of any party exercising a Put hereunder to receive  immediate  payment of
the Put Amount.

          2. AMENDMENTS TO SECTIONS 6.1 AND 6.2 OF THE  STOCKHOLDERS  AGREEMENT.
Paragraph  (g)  of  Section  6.1  and  paragraph  (c)  of  Section  6.2  of  the
Stockholders Agreement are amended to read as follows:

          6.1 DEMAND REGISTRATIONS.

          (g) OTHER REGISTRATION  RIGHTS. (i) Within the limitations  prescribed
by this paragraph  (i), but not  otherwise,  the Company may grant to subsequent
investors  in the  Company  rights  of  incidental  registration  (such as those
provided in Section  6.2).  Such rights may only pertain to the Senior  Discount
Notes and Warrant  Shares,  in the case of the HYDEO,  Preferred  Stock  Warrant
Shares, in the case of the Preferred Stock Warrant Agreement, 2009 Senior Notes,
in the case of the HYDO II, and Preferred Stock Warrant Shares 2, in the case of
the Preferred Stock Warrant Agreement 2. Such rights may be granted with respect
to (a) registrations  actually  requested by a Demand Holder pursuant to Section
6.1,  but only in respect of that  portion of any such  registration  as remains
after inclusion of all Registrable Securities requested by the Demand Holder and
(b) registrations  initiated by the Company, but only in respect of that portion
of such  registration as is available under the limitations set forth in Section
6.2(c)  (which  limitations  shall apply pro rata to all holders of  Registrable
Securities)  and such  rights  shall be  limited  in all cases to sharing in the
available  portion of the  registration  in question with holders of Registrable
Securities and other investors as provided in Section 6.2(c), such sharing to be
based on the number of shares of Common Stock held by the respective  holders of
Registrable  Securities  and held by such  other  investors,  plus the number of


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shares of Common  Stock  into  which  other  securities  held by the  holders of
Registrable  Securities  and such other  investors  are  convertible,  which are
entitled to registration  rights.  With respect to  registrations  which are for
underwritten public offerings,  "available portion" as used above shall mean the
portion of the  underwritten  shares  which is available as specified in clauses
(a) and (b) of the third sentence of this paragraph (i).  Shares not included in
such underwriting shall not be registered.

               (ii) The Company  may not grant to  subsequent  investors  in the
Company rights of  registration  upon request (such as those provided in Section
6.1)  unless (a) such  rights are  limited  to shares of Common  Stock;  (b) the
Demand  Holders  are given  enforceable  contractual  rights to  participate  in
registrations  requested by such subsequent  investors (but subject to the right
of priority of registration in the following  order:  such subsequent  investors
and  the  holders  of  Registrable   Securities  on  a  pro  rata  basis),  such
participation  to be on the  pro  rata  basis  and  subject  to the  limitations
described in the final three  sentences of paragraph (i) of this Section 6.1(g);
(c) such rights shall not become  effective prior to 90 days after the effective
date of the first  registration  pursuant  to Section  6.1;  and (d) such rights
shall  not  be  more  favorable  than  those  granted  to  the  Demand  Holders.
Notwithstanding  the  foregoing  or anything to the  contrary  contained in this
Agreement, the Company may file shelf registrations under the Securities Act (v)
as  required  by  Section  3  of  the  Warrant  Registration  Rights  Agreement,
substantially  upon the terms and subject to the conditions  contained  therein,
(w)  as  required  by  Section  2(b)  of  the  Registration   Rights  Agreement,
substantially  upon the terms and subject to the conditions  contained  therein,
(x) as required by Section 3 of the 1999 Warrant  Registration Rights Agreement,
substantially  upon the terms and subject to the conditions  contained  therein,
(y) as  required  by  Section  2(b) of the  Registration  Rights  Agreement  II,
substantially upon the terms and subject to the conditions contained therein and
(z) as required by Section 3 of the Warrant  Registration  Rights  Agreement  2,
substantially  upon the terms and subject to the conditions  contained  therein.
Notwithstanding  the  foregoing  or anything to the  contrary  contained in this
Agreement,  the Company may grant registration rights to the holders of Series E
Preferred Stock pursuant to the Preferred Stock Registration Rights Agreement as
provided therein.

          6.2 PIGGYBACK REGISTRATIONS.

          (c) PRIORITY ON PRIMARY REGISTRATIONS.  If a Piggyback Registration is
an underwritten  primary registration on behalf of the Company, the Company will
include in such  registration  all  securities  requested to be included in such
registration;  PROVIDED, that if the managing underwriters advise the Company in
writing that in their opinion the number of securities  requested to be included
in such  registration  exceeds  the  number  which can be sold in such  offering
without adversely  affecting the price,  timing or distribution of the offering,
the Company will include in such  registration  (i) first,  the  securities  the
Company proposes to sell, (ii) second, the Registrable  Securities  requested to
be included in such registration, pro rata among the holders of such Registrable


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Securities on the basis of the number of  Registrable  Securities  owned by each
such  holder and  requested  to be  included  therein,  and (iii)  third,  other
securities  (including  Warrant  Shares,  Preferred  Stock  Warrant  Shares  and
Preferred  Stock  Warrant  Shares 2, if any,  requested  to be  included in such
registration (in such relative order of priority among such securities as may be
specified with respect thereto).

          4. Except as expressly  amended  hereby,  all of the provisions of the
Stockholders  Agreement are hereby affirmed and shall continue in full force and
effect in accordance with their terms.

          5. This Amendment  shall be governed and construed in accordance  with
the laws of the  state  of  Delaware  applicable  to  agreements  made and to be
performed  entirely  within  such state,  without  regard to the  principles  of
conflicts of laws thereof.

          6. This Amendment may be executed in one or more counterparts, each of
which  shall be  deemed an  original  and all of which,  taken  together,  shall
constitute one and the same instrument.


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          IN WITNESS  WHEREOF,  the undersigned  have executed,  or caused to be
executed, this Agreement as of the date first above written.


                                  KMC TELECOM HOLDINGS, INC.


                                  By:/s/ Michael Sternberg
                                     _______________________________
                                     Name:   Michael A. Sternberg
                                     Title:  President


                                  NASSAU CAPITAL PARTNERS L.P.

                                  By: Nassau Capital L.L.C., its General Partner


                                 By:  /s/ John G. Quigley
                                    _____________________________
                                    Name:  John G. Quigley
                                    Title: Member

                                  NAS PARTNERS I L.L.C.


                                 By:  /s/ John G. Quigley
                                    _____________________________
                                    Name:  John G. Quigley
                                    Title: Member

                                  HAROLD N. KAMINE


                                  /s/ Harold N. Kamine
                                  ___________________________________


                                  NEWCOURT COMMERCIAL FINANCE
                                   CORPORATION


                                  By:/s/ John P. Sirico II
                                     ______________________________
                                     Name:   John P. Sirico II
                                     Title:  Vice President


Signature Page to
Amendment No. 5 to the
Amended and Restated
Stockholders Agreement


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                                  FIRST UNION NATIONAL BANK


                                 By:/s/ Pearce Landry
                                    ____________________________
                                      Name:   Pearce A. Landry
                                      Title:  Vice President

                                  CORESTATES HOLDINGS, INC.


                                 By:/s/ Tracey M. Chaffin
                                    _______________________________
                                      Name:  Tracey M. Chaffin
                                      Title: Manager-Operating

                                  GENERAL ELECTRIC CAPITAL
                                   CORPORATION


                                 By:/s/ M. Mylon
                                    ________________________________
                                      Name:  Mark F. Mylon
                                      Title: Manager-Operating




Signature Page to
Amendment No. 5 to the
Amended and Restated
Stockholders Agreement


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                                  KMC TELECOMMUNICATIONS L.P.


                                  By: /s/ Gerard Russomagno
                                     ______________________________
                                     Name:  Gerard M. Russomagno
                                     Title: General Managing Partner


Signature Page to
Amendment No. 5 to the
Amended and Restated
Stockholders Agreement