Document:

MANUFACTURING SERVICES AGREEMENT

 Exhibit 10.22 
  
 Sycamore Networks, Inc. 
  
 MANUFACTURING SERVICES AGREEMENT 
  
 This Manufacturing Services Agreement is entered into as of the 20th day of March, 2003 (“Effective Date”) by and between Sycamore Networks Inc.
(“Sycamore”), with offices at 220 Mill Road, Chelmsford, Massachusetts 01824 and Plexus Services Corp. (“Supplier”), with offices at 55 Jewelers Park Drive, Neenah, Wisconsin 54957. 
  
 WHEREAS, Sycamore desires to enter into a business relationship involving the regular
performance of two general classes of Manufacturing Services referred to as “non-recurring” and “recurring” services; and 
  
 WHEREAS, Supplier desires to enter into such a business relationship to perform such services for Sycamore, 
  
 NOW, THEREFORE, in consideration of the mutual promises, covenants, and Agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Sycamore and Supplier hereby agree to the following terms and conditions for the performance of Manufacturing Services by Supplier for Sycamore. 
  

	1.0	DEFINITIONS 

  
 As used in this Agreement, the following terms shall have the following respective meanings: 
  
 “Component Inventory” means inventory purchased by Supplier as a
result of a Sycamore Purchase Order owned by Supplier that remains at its location for Supplier’s use in performing Services hereunder exclusively for Sycamore. 
  
 “Consigned Inventory” or “Consignment Inventory” means inventory owned by Sycamore but located at
Supplier’s site. 
  
 “Consigned Repairs
Components” means components owned by Sycamore and located at Supplier’s site for the purpose of Supplier performing “Out of Warranty” repairs. 
  
 “Days” means calendar days unless otherwise noted. 
  
 “Direct Fulfillment Inventory” means finished goods inventory built by Supplier at the direction of Sycamore, that
remains at Supplier’s location for direct shipment to Sycamore customers. 
  
 “Engineer Change Order” or “ECO” means a specification change issued by Sycamore which, if made to Products, would affect the form, fit, or function of such Product. 
  
 “Excess Inventory” means those components in Supplier’s
inventory or on order that will not be consumed by a then outstanding Sycamore Purchase Order. 
  
 “Long Lead-Time Components” means any Component with a lead-time greater than [ * ] Days. 
  
 “NCNR” means a non-cancelable, non-returnable purchase order
issued by Supplier for Component Inventory on behalf of Sycamore. 
  
 “Non-Recurring Manufacturing Services,” “Non Recurring Expense” or “NRE” means services generally associated with the initial introduction of new Products, including, but not limited to: development and design
of production tooling; advanced circuit packaging development; printed wiring board design and layout; development and design of production tooling, test fixtures and test software for printed wiring assemblies; and Product changes and rework of
printed wiring assemblies based on Sycamore ECOs. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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 “Obsolete Inventory” means those components in Supplier inventory or on order , which no longer
appear on a Sycamore active bill of materials of a Product. 
  
 “Pass Through Items” means any autonomous assembly(ies) that are purchased fully tested and ready for direct ship to Sycamore customers for which Supplier has not performed, and Sycamore will not require it to perform, Recurring
Manufacturing Services; a list of such items is attached hereto as Exhibit E, as may be amended from time to time by agreement of the parties. 
  
 “Product(s)” means the product(s) manufactured and assembled by Supplier in the course of performing Services hereunder. 
  
 “Purchase Order(s)” shall have the meaning set forth in Section 4
hereof. 
  
 “Recurring Manufacturing Services” means
the volume production of Products for Sycamore including, but not limited to, assembly of Printed Wiring Assemblies, testing and direct order fulfillment to identified Sycamore customers, and any other service not defined as Non-Recurring
Manufacturing Services. 
  
 “Services” means Recurring
Manufacturing Services and Non-Recurring Manufacturing Services. 
  
 “Ship Date” means the date specified on a Purchase Order as the date on which Products are to ship from Supplier’s manufacturing facility to a destination specified by Sycamore in such order.

  
 “Sycamore Price File” or “SPF” means the
prices of the components for which Sycamore has independently established the pricing with the Vendor for use by the Supplier. 
  
 “Specifications” means the bill of materials, manufacturing specifications, schematics, assembly drawings and test specifications provided by
Sycamore to Supplier and reasonably agreed upon by Supplier for purposes of performing Recurring Manufacturing Services under this Agreement. 
  
 “Supplier Supplied Pricing” or “SSP” means the prices of the components for which the Supplier has independently established the
pricing with the Vendor. 
  
 “Vendor” means any third
party supplying products or services to Supplier or Sycamore. 
  

	2.0	PURPOSE OF AGREEMENT 

  

	 	2.1	On and subject to the terms and conditions of this Agreement, from time to time, Sycamore may purchase Services from Supplier. Pricing shall be determined in accordance with Section
6 below. 

  

	 	2.2	To purchase Services, Sycamore, as applicable, shall issue a purchase order (“Purchase Order”) at least [ * ] Days prior to the requested Ship Date. Each such Purchase
Order shall be deemed to incorporate by reference the terms and conditions of this Agreement. 

  

	3.0	TERM OF AGREEMENT 

  
 This Agreement shall become effective on the latter of the signature dates of the parties, and it shall continue in effect until terminated in accordance
with Section 24. 
  

	4.0	SYCAMORE ORDERS TO SUPPLIER 

  

	 	4.1	Sycamore shall purchase Products and/or Services from Supplier by issuing Sycamore Purchase Orders [ * ] Days prior to the requested Ship Date. Sycamore may issue Purchase Orders in
writing, by mail or facsimile, or by electronic means as the parties may from time to time agree. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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	 	4.2	Each Sycamore Purchase Order shall include: a description of the Products and/or Services to be purchased, the quantity, routing instructions, requested Ship Date, destination and
price per this Agreement. Sycamore Purchase Orders issued under this Agreement shall constitute the only authorization for the Supplier to expend any money or incur any liabilities for which Supplier will be reimbursed by Sycamore.

  

	 	4.3	Supplier shall acknowledge such Purchase Orders promptly and shall notify Sycamore of acceptance (or rejection, with the reasons therefor) of such Purchase Orders within [ * ]
business days of receipt. Supplier shall be deemed to have accepted any Purchase Order which is not rejected within [ * ] business days of receipt. Supplier shall not reject any Purchase Order which conforms to the terms of this Agreement but may
modify the Ship Date by mutual agreement of the parties to reflect the then-current lead time of components and manufacturing lead time. 

  

	 	4.4	Supplier shall [ * ] require Sycamore to place a [ * ] of Products in its Purchase Orders. 

  

	5.0	SUPPLIER PURCHASES ON BEHALF OF SYCAMORE 

  

	 	5.1	Supplier shall purchase components on Sycamore’s behalf only in accordance with Sycamore issued Purchase Orders. Supplier shall not hold Sycamore liable for any amounts not
supported by a Sycamore Purchase Order, provided that Sycamore shall be liable for components purchased as part of a [ * ] if such purchase was approved by Sycamore pursuant to Section 5.4 hereof. 

  

	 	5.2	Supplier shall use reasonable and prudent purchasing practices to minimize Sycamore’s liability to pay for components or services. Such reasonable and prudent purchasing
practices include, without limitation, Supplier’s use of its reasonable best efforts (a) to obtain and secure rights to return, reschedule and/or cancel its purchase or order of such components or services, (b) to ascertain the restocking
charge, if available, for such components, subject to the prior approval of Sycamore, and (c) to return, cancel, reschedule, resell or use such components or services elsewhere in its business. 

  

	 	5.3	Prior to Supplier issuing any Supplier purchase orders on Sycamore’s behalf, Supplier shall use applicable Consigned Inventory and Component Inventory to support Sycamore
Purchase Orders or Supplier shall be liable for additional purchases. 

  

	 	5.4	In the event that Supplier’s materials requirement planning indicates demand for Component Inventory that: (a) is less than the Vendor’s [ * ] or [ * ] value, or (b) is
identified as an NCNR component, Supplier shall identify such components to Sycamore in writing in advance of order. To the extent that the total dollar cost of all material components, including NCNR and [ * ], ordered by Supplier for any Purchase
Order equals or is less than the total dollar cost of all material components identified in that Purchase Order, Supplier shall be entitled to purchase such NCNR and [ * ] components required to produce the Product subject to that Purchase Order
without obtaining the advance approval of Sycamore through the Variance Authorization Form so long as those components have been identified and documented as [ * ] (including the quantities thereof) and/or NCNR during the [ * ] review to establish
the reconciled costed bill of materials under Section 6.2 hereof; all other orders for NCNR and [ * ] components must be approved by Sycamore in advance using the Variance Authorization Form attached hereto as Exhibit A. Notwithstanding the
foregoing, with respect to a Vendor’s [ * ] or [ * ] value, Supplier shall be entitled to order such components without obtaining the prior written approval of Sycamore through the Variance Form to the extent of [ * ] in the aggregate for all
such components per [ * ]. Supplier shall obtain prior written consent from Sycamore as set forth herein to order such [ * ] or NCNR components, and agrees that Sycamore shall not be liable for such components purchases without Sycamore’s
written preapproval except and only to the extent of the specific exceptions set forth in the preceding sentences of this Section 5.4. Excess components shall be held by Supplier as Component Inventory and Sycamore shall direct its disposition under
the inventory liability provisions hereinafter set forth in Section 11.2 hereof. 

  
 For example, in the event that Sycamore places a Purchase Orders in the amount of $1 million per quarter and $500,000 of that cost is for the material
components, Supplier can order NCNR and [ * ] components without use of the Variance Form so long as the total cost to Sycamore for all components required to produce the Product subject to that Purchase Order does not exceed [ * ]. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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	 	5.5	Sycamore may independently establish a Sycamore Price File with a particular Vendor to supply a specific component for Products and/or Services by Supplier. In that event, Sycamore
shall notify Supplier of the SPF. To extent that Sycamore does not establish an SPF with respect to any and all other components, Supplier shall establish an SSP file for such components. Supplier shall issue its purchase orders in accordance with
the pricing of the SPF for all SPF components and the SSP for other components. In the event that any SPF terms and conditions with a particular vendor conflicts with any provision in this Agreement, Supplier shall not be obligated to perform such
conflicting terms and conditions within this Agreement and Sycamore shall waive any such claims of non-performance under this Agreement with respect to the specific purchase order in question. 

  

	 	5.6	Purchase Price Variance 

  

	 	5.6.1	“PPV” occurs when the Supplier is not able to purchase an SPF component at the SPF price. For SPF components only, in the event that the Supplier is not able to purchase a
component at the then current SPF price, then Supplier must provide prompt written notice to Sycamore in advance of placing any purchase orders. Such notice shall be in the form of the Variance Authorization Form attached hereto as Exhibit A, and
Supplier shall attach the following documentation to such form or provide such information electronically: 

  

	 	•	 	Sycamore Purchase Order Number which created the demand, and 

  

	 	•	 	Vendor quotation including price, quantity, and delivery date. 

  
 Sycamore must give prior written approval of each and every Supplier purchase order to a Vendor which varies from the price in the then current SPF. If
Supplier does not give written notice of Purchase Price Variance prior to placing its purchase order with the Vendor, then the PPV claim against Sycamore is waived. In addition to the foregoing, in the event that the Supplier determines that there
are expedite or premium charges for any SSP component during [ * ] after the parties have agreed upon the costed bill of materials for that [ * ] pursuant to Section 6.2 below, Supplier shall provide written notice to Sycamore in advance of placing
any such purchase orders and must obtain Sycamore’s prior written approval. Such notice shall be in the form of the Variance Authorization Form attached hereto as Exhibit A, and Supplier shall attach the following documentation to such form or
provide such information electronically: 
  

	 	•	 	Sycamore Purchase Order Number which created the demand, and 

  

	 	•	 	Vendor quotation including price, quantity, and delivery date. 

  
 Notwithstanding the foregoing, in no event shall Supplier request or be entitled to recover expedite or premium charges for any SSP component to the
extent it has failed to order such components in a timely and prudent manner using reasonable business practices in order to meet the scheduled Ship Date. 
  

	 	5.7	At Sycamore’s discretion, Sycamore approved purchase price variance changes will be processed on a case by case basis under either Section 10.3 Component Inventory Buy Down or
under Section 5.6, but not under both provisions. To the extent that Sycamore elects to process a purchase price variance under Section 5.6, Supplier shall promptly issue either a credit memo or an invoice (in accordance with Section 16.3) following
issuance by Sycamore of a Purchase Order to Sycamore reflecting the purchase pricing variances identified through this Purchase Price Variance Process. Disagreement on any aspect of this process shall be resolved through the Dispute Resolution
Process set out in Section 31.0. 

  

	 	5.8	In the event that Sycamore establishes an SPF and issues a Sycamore Purchase Order to a Vendor, Sycamore may, at its discretion, transfer such Sycamore Purchase Order to the
Supplier and such Purchase Order, subject to Supplier’s agreement in writing to transfer the same, shall be treated by the parties as having been initially issued directly by the Supplier to the Vendor. Upon Supplier’s consent to transfer
such purchase order, Supplier shall issue its own purchase order to the Vendor to substitute for the original Sycamore purchase order.  

  

	 	5.9	At Sycamore’s cost for its out-of-pocket expenses, Sycamore has the right to audit the purchasing practices and records utilized by Supplier. Such audit rights shall include
but not be limited to the right to audit purchase price variances approved under Section 5.6.1, in which case Supplier shall provide Sycamore with the following information: the Sycamore Purchase Order which created the demand, the Supplier purchase
order number with Vendor for the PPV material, the date Supplier 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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 placed the purchase order and Vendor confirmed delivery date, and quantity ordered and purchase order
unit cost. Sycamore shall provide 5 Days notice to Supplier and such practices and records shall be reviewed at Supplier’s location. Supplier shall have 10 business days to comply with Sycamore’s request. Sycamore’s audit rights are
subject to Supplier’s confidentiality obligations to third parties. 
  

	6.0	PRICING TERMS 

  

	 	6.1	NRE Pricing. The initial prices for Non-Recurring Manufacturing Services shall be as set forth in Exhibit B. In order to determine new pricing for NRE, Sycamore shall provide
Supplier with a Specification for requested NRE. Supplier shall use commercially reasonable efforts to issue a written quotation within [ * ] business days. Sycamore shall authorize the performance of the NRE by issuance of a Purchase Order.
Supplier charges for such NRE shall be in accordance with the quotation. 

  

	 	6.2	Recurring Manufacturing Services Pricing. [ * ] Days before the start of [ * ], Sycamore shall provide Supplier with a copy of its most recent SPF pricing file and Supplier shall
provide Sycamore with a copy of its most recent Supplier Supplied Pricing files for reconciliation. Sycamore and Supplier shall confer and agree within [ * ] Days on the cost of the components in the SPF and Supplier Supplied Pricing files which
shall form the basis of the costed bill of materials for Sycamore Products for such [ * ]. Supplier shall then provide an updated, reconciled costed bill of materials to Sycamore that represents a quote to Sycamore for production for such [ * ].
This quote shall be firm [ * ] following its receipt by Sycamore subject to PPV as provided above in Sections 5.6 and 5.7. Supplier will promptly inform Sycamore of any Vendor price variations. 

  
 Any Purchase Order(s) placed by Sycamore and accepted by Supplier for
delivery of Products before the parties have reached agreement on the reconciled costed bill of materials for Sycamore’s [ * ] will be adjusted to reflect new pricing as determined and requested by Sycamore; existing on hand and on order
inventory will be managed in Sycamore’s discretion either by resort to the Component Inventory Buy-Down provisions (Section 10.3) or through the PPV adjustment provisions (Sections 5.6 and 5.7), unless otherwise agreed to by the parties. For
the convenience of the parties, Exhibit D hereto sets forth Sycamore’s fiscal calendar for fiscal years 2003 and 2004. 
  

	 	6.3	[ * ]. For each Product upon which Supplier performs Recurring Manufacturing Services, Supplier shall charge Sycamore a [ * ] at the time of delivery of a Product in accordance with
Schedule 1. At least [ * ] Days before the start of [ * ], the parties shall meet and confer to designate the [ * ] based on Sycamore’s estimated business range for [ * ] based on the Purchase Orders placed by Sycamore with Supplier for that [
* ] prior to the start thereof. If the parties are unable to agree upon the [ * ], the parties shall attempt to resolve the disagreement utilizing the Dispute Resolution Process set out in Section 31. The parties agree that the [ * ] designated by
Sycamore in good faith based on the Purchase Orders placed by Sycamore with Supplier prior to the start of [ * ] shall apply to all orders for Product pending resolution of the disagreement. 

  
 [ * ] Review. The [ * ] set out in Schedule 1 is fixed for the term
of the Agreement for Sycamore’s [ * ] and [ * ] family of Product lines (including, but not limited to, any modifications to an existing Product or the introduction of new feature(s) in an existing Product). In the event that Sycamore
introduces a new Product which does not fall within the[ * ] or [ * ] Product family, then Sycamore and Supplier will confer as to the appropriate [ * ] for the manufacture of such Products, provided, however, that to the extent that the Recurring
Manufacturing Services required to manufacture any such new Product are substantially similar to the Recurring Manufacturing Services, both in terms of nature and quantity, as are required to manufacture the [ * ] or [ * ] Products, the [ * ] shall
apply thereto. 
  
 One [ * ] after the Effective Date, and on an
[ * ] basis thereafter, the [ * ] may be adjusted only by mutual written agreement of the parties. If the parties are unable to agree upon any adjustment of the [ * ], the parties shall attempt to resolve the disagreement utilizing the Dispute
Resolution Process set out in Section 31. The parties agree that the current [ * ] shall apply to all orders for Product pending resolution of the disagreement. 
  
 Pass Through Items. Supplier shall charge Sycamore a maximum of [ * ] the Supplier purchase price for Pass Through
Items. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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	 	6.4	Supplier shall [ * ] require of Sycamore any [ * ] on a quarterly or annual basis. 

  

	7.0	ENGINEERING CHANGE ORDERS 

  

	 	7.1	Sycamore may by written notice initiate an ECO regarding components or Specifications by documenting and transmitting the proposed change to Supplier’s Coordinator, who shall
acknowledge receipt. Supplier shall use all commercially reasonable efforts to provide a detailed response, including the amount of change in costs resulting therefrom, within five (5) business days of receipt of such change notice. In no event
shall Supplier provide such response later than ten (10) business days after receipt of such notice. Sycamore will not be liable for any costs or expenses not covered in the detailed ECO response. 

  

	 	7.2	Supplier shall use its reasonable best efforts to implement an ECO as soon as possible. Neither party shall unreasonably withhold or delay agreement to an ECO and the parties will
endeavor to agree and implement, at the earliest opportunity, change notices relating to personal and product safety or conformance to existing Specifications. 

  

	 	7.3	Until the parties have agreed in writing upon an ECO and any associated impact, the parties shall continue to perform their obligations under this Agreement without implementing the
ECO. Notwithstanding the above, if such notice indicates that a change is required due to safety reasons, Supplier shall not continue to manufacture any affected Products without the prior written consent of Sycamore until the parties have
implemented the change notice. 

  

	 	7.4	Supplier shall charge Sycamore a one time processing fee to cover the administrative cost to implement the ECO. Additional charges, if any, shall be as set out in Exhibit B or as
otherwise agreed to by the parties in writing. 

  

	8.0	SCHEDULING 

  

	 	8.1	Supplier is authorized to ship Products to Sycamore only in accordance with a Purchase Order. 

  

	 	8.2	Sycamore may make changes to shipping instructions, quantities or delivery schedules specified in any Purchase Order as needed throughout the duration of this Agreement, in
accordance with Table 8.2, or as otherwise mutually agreed by the parties in writing. 

  
 Table 8.2 
  

	 Days prior to Ship Date

	 	 Reschedule Terms

	 0 - [ * ]
	 	0%
		
	 [ * ] - [ * ]
	 	up to [ * ] of a Purchase Order provided that such rescheduled order is to be delivered within [ * ] days of the originally scheduled Ship Date.
		
	 [ * ] +
	 	up to [ * ] of a Purchase Order provided that such rescheduled order is to be delivered within [ * ] days of the originally scheduled Ship Date.

  
 Notwithstanding the
foregoing, (i) from and after [ * ] commencing on [ * ], Sycamore shall not be entitled to reschedule any Purchase Order(s) to the extent that such rescheduling would cause Sycamore to fail to [ * ] Purchase Orders to obtain the [ * ] for the total
[ * ] from Schedule [ * ] selected for that [ * ] pursuant to Section [ * ] hereof; and (ii) with respect to any changes 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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 to a Purchase Order to increase [ * ] within the percentages set forth in the above table, Supplier shall
be required to use its reasonable best efforts to fulfill the same. 
  

	 	8.3	If Sycamore desires to reschedule any Purchase Orders in excess of the [ * ], the parties shall mutually agree upon the appropriate remedy for Supplier. 

  

	 	8.4	Supplier shall accept or reject Purchase Order changes within [ * ] business days or the changes will be deemed accepted. 

  

	9.0	CANCELLATION 

  

	 	9.1	Sycamore may cancel a Purchase Order, in whole or in part, at any time [ * ] Days or more from the scheduled Ship Date, provided, however, from and after [ * ] commencing on [ * ],
Sycamore shall not be entitled to cancel any Purchase Order(s) to the extent that such cancellation would cause Sycamore to fail to [ * ] for the [ * ] range from Schedule [ * ] selected for that [ * ] pursuant to Section 6.3 hereof. Sycamore shall
only be entitled to cancel a Purchase Order, in whole or in part, within [ * ] Days or less prior to the scheduled Ship Date by written agreement of Supplier. 

  

	 	9.2	To the extent that Sycamore cancels a Purchase Order, in whole or in part, within [ * ] to [ * ] Days prior to the scheduled Ship Date, Supplier shall, if requested by Sycamore,
attempt to mitigate Sycamore’s liability for components, including but not limited to, any NCNR components, by using reasonable and prudent purchasing practices to minimize Sycamore’s liability to pay for components or services. Such
reasonable and prudent purchasing practices include, without limitation, Supplier’s use of its reasonable best efforts (a) to obtain and secure rights to return, reschedule and/or cancel its purchase or order of such components or services, (b)
to ascertain the restocking charge, if available, for such components, subject to the prior approval of Sycamore, and (c) to return, cancel, reschedule, resell or use such components or services elsewhere in Supplier’s business. To the extent
that Supplier is able to mitigate Sycamore’s liability for components, Sycamore shall compensate Supplier for such efforts by [ * ] Supplier for any [ * ] paid by Supplier which were approved by Sycamore in advance [ * ] paying Supplier a fee
equal to [ * ] of the price of the mitigated components per the then current SPF or SSP pricing file (excluding any [ * ]). The parties agree that the mitigation period shall not exceed [ * ] Days from the cancellation unless otherwise agreed to by
the parties in writing. To the extent that Supplier is unable to mitigate as provided herein, then Sycamore shall direct disposition of those components for which mitigation was not achieved by Supplier pursuant to Section 11.2 below.

  

	 	9.3	To the extent that Sycamore cancels the Purchase Order, in whole or in part, [ * ] Days or more prior to the scheduled Ship Date, then Supplier shall, if requested by Sycamore,
attempt to mitigate Sycamore’s liability for NCNR components by using reasonable and prudent purchasing practices to minimize Sycamore’s liability to pay for components or services. Such reasonable and prudent purchasing practices include,
without limitation, Supplier’s use of its reasonable best efforts (a) to obtain and secure rights to return, reschedule and/or cancel its purchase or order of such components or services, (b) to ascertain the restocking charge, if available,
for such components, subject to the prior approval of Sycamore, and (c) to return, cancel, reschedule, resell or use such components or services elsewhere in Supplier’s business. To the extent that Supplier is able to mitigate Sycamore’s
liability for NCNR components, Sycamore shall compensate Supplier for such efforts by [ * ] Supplier for any [ * ] paid by Supplier which were approved in advance by Sycamore [ * ] paying Supplier a fee equal to [ * ] of the price of the mitigated
components per the then current SPF or SSP pricing file (excluding any [ * ]). The parties agree that the mitigation period shall not exceed [ * ] Days from the cancellation unless otherwise agreed to by the parties in writing. To the extent that
Supplier is unable to mitigate as provided herein, Sycamore shall direct disposition of those NCNR components pursuant to Section 11.2 below. 

  

	 	9.4	Supplier shall (a) document and calculate all charges under this Section 9 and (b) provide to Sycamore sufficient documentation in a reasonable format to support all such charges
and calculations. Labor standards, if any will be mutually agreed upon between the parties. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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	 	9.5	Supplier shall accept or reject all Purchase Order cancellations in writing within [ * ] business days or the changes will be deemed accepted, provided, however, that Supplier
acknowledges that it must accept cancellations subject to Section 9.1 hereof. 

  

	10.0	INVENTORY MANAGEMENT 

  

	 	10.1	Supplier will provide an electronic interface to Sycamore’s business enterprise system for the purpose of transferring inventory management, ordering, shipment, and other
information to Sycamore at no additional cost to Sycamore. 

  

	 	10.2	Inventory Reconciliation 

  

	 	10.2.1	Supplier shall maintain accurate inventory records of Consigned Inventory, Consigned Repairs Components, Direct Fulfillment Inventory, and Component Inventory using
Sycamore’s part numbers. 

  

	 	10.2.2	Consigned Inventory and Consigned Repairs Components 

  
 Supplier and Sycamore shall reconcile Consigned Inventory and Consigned Repairs Components located at the Supplier on a monthly basis, the exact timing
of which to be set by Sycamore. 
  
 a) Supplier shall provide
Sycamore a Consigned Inventory and Consigned Repairs Components listing of inventory/repairs components located at the Supplier. The listing must include Sycamore part number and quantity per item. 
  
 b) Sycamore shall reconcile Supplier’s balances against
Sycamore’s balances. Sycamore shall identify the quantity variances and provide to the Supplier for reconciliation. Supplier shall complete the reconciliation within four (4) working days. 
  
 c) Any unreconciled quantity variances shall be invoiced to Supplier and
paid in accordance with Section 16.2 hereof. Notwithstanding the foregoing, if within sixty (60) days of Sycamore’s invoice therefor Supplier is able reconcile a quantity variance to Sycamore’s reasonable satisfaction Sycamore shall issue
a credit to Supplier. 
  

	 	10.2.3	Direct Fulfillment Inventory 

  
 Supplier and Sycamore shall reconcile Direct Fulfillment Inventory on a weekly basis, the exact timing of which shall be set by Sycamore. 
  
 a) Supplier shall provide Sycamore a Direct Fulfillment Inventory listing
of material located at the Supplier. The listing must include Sycamore part number and quantity per item. 
  
 b) Sycamore shall reconcile Supplier’s balances against Sycamore’s balances. Sycamore shall identify the quantity variances and provide to the
Supplier for reconciliation. Supplier and Sycamore shall use commercially reasonable efforts to complete the reconciliation within three (3) working days. 
  
 c) Any unreconciled quantity variances shall be invoiced to Supplier and paid in accordance with Section 16.2 hereof. Notwithstanding the foregoing, if
within sixty (60) days of Sycamore’s invoice therefor Supplier is able reconcile a quantity variance to Sycamore’s reasonable satisfaction Sycamore shall issue a credit to Supplier. 
  
 Direct Fulfillment Inventory manufactured by Supplier will be invoiced by
Supplier upon the same being placed in Sycamore’s finished goods inventory location at Supplier, at which time title and risk of loss to such Direct Fulfillment Inventory shall also pass to Sycamore. Notwithstanding, Supplier will insure such
Direct Fulfillment Inventory held in Supplier’s facilities at the full replacement cost thereof under the terms and conditions of Supplier’s “all risk” insurance coverage. The Direct Fulfillment Inventory shall remain at
Supplier’s facility until Supplier is instructed to ship the same by Sycamore. Supplier will segregate 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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 the Direct Fulfillment Inventory from other customer manufactured product and Supplier will not use the
Direct Fulfillment Inventory to fill other Supplier customer orders unless otherwise directed by Sycamore. The prices for the Direct Fulfillment Inventory shall be the prices set forth in those Sycamore Purchase Orders under which such inventory was
manufactured. Sycamore has requested that Supplier hold such Product following invoicing in order to provide an inventory management and distribution service to Sycamore. In the event Product is held by Supplier for more than [ * ] days after title
to the same has transferred to Sycamore, Supplier shall ship the Product to Sycamore or its designated agents as provided in Section 12 hereof. Notwithstanding the foregoing, risk of loss with respect to Consigned Inventory shall remain with
Supplier pursuant to Sections 11.3 and 20.3 hereof. 
  

	 	10.2.4	Component Inventory 

  
 At Sycamore’s request from time-to-time, Supplier and Sycamore shall reconcile Component Inventory as mutually agreed upon. 
  

	 	10.3	Component Inventory Buy Down 

  
 Supplier and Sycamore shall conduct a Component Inventory buy down on a [ * ] basis to coincide with the SPF and Supplier Supplied Pricing reconciliation
process set out in Section 6.2, the exact timing of which will be agreed to by both parties. If the newly mutually established cost of an item(s) in Component Inventory is less than the then-current inventory valuation on the Supplier Supplied
Pricing or SPF file, then upon Sycamore’s written instruction, Supplier shall revalue such item(s). Supplier shall invoice, and Sycamore shall pay (in accordance with Section 16.2 hereof), the difference between the newly mutually established
cost, and the previous valuation in the SFP or Supplier Supplied Pricing file. 
  

	 	10.4	Inventory Sellback Process 

  

	 	10.4.1	Supplier shall use Consigned Inventory or Consigned Repairs Components before purchasing components from   third parties. As Consigned Inventory or Consigned Repairs
Components are owned by Sycamore, the inventory   sellback process shall be used to transfer title of these components to Supplier. 

  
 a) On a weekly basis, the Supplier shall provide Sycamore with usage report indicating what the Supplier has consumed from Consigned Inventory or
Consigned Repairs Components. The listing should include quantity, Sycamore part number, and unit cost. The unit cost shall be the same price for the components as set forth in the current SPF or Supplier Supplied Pricing price file at the time of
the sellback, without [ * ] or any other [ * ]. The weekly usage report is the record of the transfer of title of Consigned Inventory or Consigned Repairs Components from Sycamore to Supplier 
  
 b) Upon receipt of the Supplier usage report, Sycamore shall verify
pricing, transact the inventory out of its stock and invoice the Supplier. Supplier shall pay such invoice(s) in accordance with Section 16.2 hereof. 
  

	 	10.5	Disagreement on any aspect of this Inventory Management section shall be resolved through the Dispute Resolution Process set out in Section 31.0. 

  

	11.0	OBSOLETE OR EXCESS COMPONENT INVENTORY 

  

	 	11.1	When Supplier is of the opinion that Component Inventory or components on order have been rendered Obsolete Inventory or Excess Inventory, Supplier shall within [ * ] Days following
the [ * ] in which such purported event of obsolescence or excess occurred: 

  

	 	•	 	provide to Sycamore a written notice of Obsolete Inventory or Excess Inventory; 

  

	 	•	 	use reasonable and prudent business practices as set forth in Section 5.2 to mitigate Sycamore’s liability relating to such components; and 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 9 

	 	•	 	provide to Sycamore the P.O.(s), the documentation set forth in Section 5.9 for a PPV adjustment and date(s) of the Sycamore action(s) which created the event of Excess Inventory or
Obsolete Inventory; such documentation may be provided electronically. 

  

	 	11.2	Upon receipt of the notice of the occurrence of Obsolete Inventory or Excess Inventory defined above, and to the extent that Supplier can reasonably demonstrate by documentary
evidence that it placed all purchase orders in accordance with the terms and conditions of this Agreement, and used reasonable and prudent business practices, as set forth in Section 5.2, Sycamore shall provide written instruction to Supplier
directing it to either: 1) move such Excess or Obsolete Inventory to Consigned Inventory in accordance with Section 11.3, 2) process such Obsolete Inventory or Excess Inventory as scrap in accordance with Section 11.4, or 3) continue to hold title
to the such Excess Inventory in consideration of Sycamore paying a [ * ] of [ * ] each month for a period of up to [ * ] Days, at which point Sycamore must direct disposition of such inventory in accordance with subsections (i) or (ii) hereof.

  

	 	11.3	If Sycamore’s written instruction is to move the Obsolete or Excess Inventory to Consigned Inventory, Supplier shall: 

  

	 	•	 	hold such components on consignment for Sycamore at Supplier’s premises at no charge for a period not to exceed [ * ] year. Title to the Consigned Inventory shall pass to
Sycamore upon delivery of the components to the consignment location, and risk of loss of or damage to the Consigned Inventory shall remain with Supplier, and 

  

	 	•	 	invoice Sycamore the Supplier’s cost of the components as reflected in the then current SPF or Supplier Supplied Pricing file. Sycamore shall pay such invoice in accordance
with Section 16.2 hereof. 

  
 When Sycamore moves
such components out of consignment, Sycamore shall direct disposition thereof under either Section 11.4 hereof or shall direct that Supplier utilize the same in the manufacture of Products pursuant to Sycamore Purchase Orders. 
  

	 	11.4	If Sycamore’s written instruction is to scrap the Obsolete Inventory or Excess Inventory, Supplier shall: 

  

	 	•	 	remove and make available such components for delivery to Sycamore. Title to and risk of loss of or damage to the components shall pass to Sycamore upon delivery to Sycamore F.O.B.
Supplier’s dock. 

  

	 	•	 	pack the components to Supplier’s commercial standards and Sycamore’s custom standards for shipment. 

  

	 	•	 	invoice Sycamore the Supplier’s cost of the components as reflected in the then current SPF or Supplier Supplied Pricing file [ * ] for components with a per unit cost per item
of more than [ * ] and [ * ] for components with a per unit cost per item of [ * ] or less. Sycamore shall pay such invoice(s) in accordance with Section 16.2 hereof. 

  

	 	11.5	If Supplier does not report to Sycamore all Obsolete Inventory or Excess Inventory within [ * ] Days following the end of the calendar month in which the event of obsolescence or
excess occurred, Supplier waives its right to make any claim against Sycamore for such components. 

  

	 	11.6	Disagreement on any aspect of this Obsolete Inventory or Excess Inventory section shall be resolved through the Dispute Resolution Process set out in Section 31.

  

	12.0	DELIVERY 

  

	 	12.1	Supplier shall include a packing slip with each shipment that lists at a minimum, Sycamore’s part number, Purchase Order Number, the Supplier’s Part Number, serial number
and quantity. Supplier shall follow commercially accepted practices for packaging to protect the components from Electrostatic Discharges (ESD), Sycamore specifications for packaging, and normal handling by the selected freight forwarder.

  

	 	12.2	Supplier shall not make partial shipments or over shipments without Sycamore’s prior written consent. 

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omitted portions. Asterisks within brackets denote omission. 

  

 10 

	 	12.3	Supplier shall ship all Products F.O.B. Supplier’s shipping dock, freight prepaid in accordance with the schedule set forth in Sycamore’s Purchase Order as accepted by
Supplier. Supplier shall use the freight forwarder chosen by Sycamore in its sole discretion. Supplier shall include freight charges as a separate line item on the applicable invoice(s). 

  

	 	12.4	Where Supplier causes a delay in the shipment of Products, Supplier shall bear the expense of all additional charges required to expedite shipment in order to meet the agreed upon
shipment schedule. Sycamore shall be responsible only for standard lead-time costs and UPS “surface” freight charges, unless previously approved by Sycamore in writing. 

  

	 	12.5	Sycamore may reject Products which (a) were damaged when delivered by Supplier to the carrier for shipment to Sycamore or (b) do not conform to the relevant Specifications
(“Rejected Products”). 

  

	 	12.6	Sycamore will notify the Supplier in writing of Rejected Products within [ * ] Days of original delivery and will return via the least expensive method possible Rejected Products to
the Supplier at Supplier’s expense within an additional [ * ] Days. Supplier shall make reasonable best efforts to deliver a return components authorization form (“RMA”) to Sycamore within [ * ] business [ * ] days after
Sycamore’s notice of Rejected Products. If Sycamore does not receive the RMA within such period, Sycamore shall elevate the RMA request to the Strategic Customer Manager and if the matter is not resolved within [ * ] business days, Sycamore
shall have the right to return such Rejected Products. Sycamore will provide Supplier’s Strategic Customer Manager with the tracking number of all shipments sent back to Supplier without an RMA. 

  

	 	12.7	Supplier will, at its election, either repair or replace the Rejected Products. The cost associated with any such repair or replacement will be the responsibility of the Supplier.
In the case of replacement, title to the Rejected Products shall pass to the Supplier on delivery to the Supplier. Supplier shall bear the expense of redelivering repaired or replaced Products to Sycamore or its customer. 

 

	 	12.8	In the absence of earlier notification of rejection, Sycamore will be deemed to have accepted Products [ * ] Days after delivery provided that the related Product invoice contains
all pertinent information relating to Sycamore’s Purchase Order. Sycamore’s acceptance of the Products shall not be deemed a waiver of any warranty claims. 

  

	 	12.9	Supplier shall be liable for liquidated damages if Supplier fails to deliver Products on the Ship Dates specified in a Purchase Order which has been accepted in accordance with
Section 4 hereof. In such event, and on and subject to the terms set forth below in this Section 12.9, Supplier shall pay to Sycamore a sum equal to [ * ] of the purchase price of the Products subject to such delay for each business day (or part
thereof) of delay in delivery, up to a maximum of [ * ] of such purchase price. Supplier’s obligation to pay liquidated damages hereunder shall be expressly subject to the following conditions: 

  
 (a) In no event shall Supplier be liable for liquidated damages when its
failure to meet any Ship Date is caused by any act or omission of Sycamore; 
  
 (b) Sycamore shall not be in default of any of its obligations under this Agreement; 
  
 (c) Supplier shall have a grace period of [ * ] business days from the Ship Date during which liquidated damages shall not apply unless the delay exceeds
such grace period, in which case liquidated damages shall be due and owing from the first day of delay from the Ship Date; 
  
 (d) If Sycamore does not report to Supplier that it intends to avail itself of this liquidated damages remedy within [ * ] Days following the failure to
deliver Products on the Ship Date, Sycamore waives its right to make any claim for liquidated damages under this Section 12.9 against Supplier for such delay; and 
  
 (e) Supplier shall not be liable for Liquidated Damages when its failure to meet any Ship Date is caused solely by an
industry wide component shortage beyond its reasonable control. 
  
 In the event that Supplier fails to deliver Products within [ * ] Days of the Ship Date specified in a Purchase Order, then, in addition to the liquidated damages set forth above, Sycamore shall have the right, in its sole discretion, to
cancel the Purchase Order without any liability to Supplier for any costs, including, but not limited to, the cancellation costs set forth in Section 9 

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omitted portions. Asterisks within brackets denote omission. 

  

 11 

 above. For avoidance of doubt, Sycamore shall be entitled to cancel such order even if such cancellation
would cause it [ * ] of the then designated [ * ]. 
  

	13.0	SUPPLIER WARRANTY 

  

	 	13.1	Services. Supplier warrants that all Services will be performed in a workmanlike manner in conformity to [ * ]. Supplier further warrants that the Products and Services
delivered hereunder (a) will be [ * ] and (ii) [ * ]. Supplier further warrants that all Products shall be manufactured [ * ] 

  
 This warranty shall apply for a period of [ * ] from the date Products are shipped, or Services are performed by Supplier and may be enforced by Sycamore.

  

	 	13.2	Remedy. Sycamore’s remedy for breach of this warranty shall be, [ * ]. Prior to [ * ] any Product that Sycamore claims not to be as warranted by Supplier, Sycamore shall
follow Supplier’s reasonable RMA procedures. Supplier shall promptly provide, and shall not unreasonably withhold or delay the issuance of an RMA number. Supplier shall be responsible for all warranty expenses, including the costs of incoming
and outgoing shipment for warranty repair. Supplier will make all repairs and replacements, and return Products to Sycamore or another destination specified by Sycamore, within [ * ] Days of receipt by Supplier. Supplier shall replace any Products
requiring repair [ * ]. In any instance where Supplier fails to deliver repaired or replaced Products within [ * ] Days after receipt of defective Products, Sycamore shall be entitled to a [ * ]. However, if Supplier fails, on a continuing and
material basis, to meet the requirements for repairs set forth herein, Sycamore shall have its full rights and remedies at law or in equity for redress, subject to the limitations of damages as otherwise set forth in this Agreement.

  

	 	13.3	[ * ] 

  

	 	13.4	The warranties provided in this Section 13 will apply in all circumstances except the following: 

  

	 	13.4.1	Products that have been (i) misused, modified, damaged, placed in an unsuitable physical or operating environment or maintained improperly, (ii) caused to fail by any product or
service not supplied by the Supplier, or (iii) subjected to any repair not authorized in writing in advance by the Supplier; 

  

	 	13.4.2	any defect to the extent caused by (i) Sycamore or (ii) an error or omission or design or other fault in any Sycamore Information or in any other drawings, documentation, data,
software, information, know-how or components provided or specified by Sycamore or (iii) Sycamore supplied inventory; provided, however, that in the event that both parties contribute to any defect, the warranty shall apply to the extent such defect
was contributed to or caused by Supplier; 

  

	 	13.4.3	prototypes and pre-production or pilot versions of Products manufactured by Supplier, the warranty for which shall be limited to conformance to the Specifications supplied by
Sycamore; or 

  

	 	13.4.4	Products that, at Sycamore’s specific request, did not undergo Supplier’s standard inspection and test procedure. Notwithstanding the foregoing, the warranties in this
Section 13 will apply to the extent that some of Supplier’s standard inspection and test procedures are in place even if such tests and procedures are not considered all of Supplier’s standard inspection and test procedures, unless and to
the extent that any defect in any Product which does not undergo all of Supplier’s standard inspection and test procedure at Sycamore’s request would reasonably have been likely to have been discovered by such omitted inspection and test
procedure. Additionally, the warranties in this Section 13 will apply to assemblies to the extent that Supplier performed work on the assemblies, even if Sycamore or some other third party performs certain finish or back-end work on the assemblies,
provided that any defect in the assemblies is related to a breach of Supplier’s warranties in this Section 13; in the event that both parties contribute to any defect, the warranty shall apply to the extent such defect was contributed to or
caused by Supplier. Subject to the foregoing, Supplier’s warranty that the Products will be free from defects in workmanship will always apply. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 12 

	 	13.5	Supplier shall repair and/or upgrade Products which are outside the warranty period at the direct labor prices and under the terms and conditions set forth in Exhibit B unless
otherwise agreed to in writing by the parties. 

  

	 	13.6	THE FORGOING WARRANTIES ARE SOLELY ENFORCEABLE BY SYCAMORE AND ARE SUPPLIER’S SOLE OBLIGATION AND LIABILITY, AND SYCAMORE’S EXCLUSIVE REMEDIES, FOR CLAIMS BASED ON DEFECTS
IN OR FAILURE OF ANY PRODUCT OR SERVICE OR THE SUBJECT MATTER OF ANY SERVICE AND ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OR CONDITIONS OF MERCHANTABILITY, RESPECTING
NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. 

  

	 	13.7	Supplier agrees to maintain in good working order the items contracted for by Sycamore under Non-Recurring Manufacturing Services for the lifetime of this Agreement or as the
parties may otherwise agree. Supplier is not obligated to maintain any such items that Sycamore has declared obsolete or that have deteriorated beyond the scope of general maintenance practices as a result of changes mandated by Sycamore.

  

	14.0	SYCAMORE WARRANTY 

  

	 	14.1	Sycamore warrants that, [ * ] of [ * ] and [ * ] and [ * ] (collectively, “Sycamore Information”) [ * ]. 

  

	 	14.2	Supplier will promptly notify Sycamore of any manufacturing problems that Supplier believes are related to the Sycamore Information. The parties will cooperate to determine whether
such manufacturing problems actually are attributable to the Sycamore Information. Supplier shall not implement any changes to any Sycamore Information without Sycamore’s prior written approval. If the parties determine that a problem does
result from the Sycamore Information and initiate [ * ], Supplier will not be liable for [ * ] to the [ * ] from such Sycamore Information, but only to the [ * ] was [ * ] to or [ * ] by Sycamore. 

  

	15.0	INDEMNIFICATION 

  

	 	15.1	Sycamore agrees to indemnify Supplier against damages finally awarded by a court of competent jurisdiction arising out of claims for direct losses, damages, costs and expenses
(including reasonable attorney’s fees) on account of personal injury, death, or tangible property damage as the result of Sycamore’s active negligence or willful misconduct in developing the Specifications, or any other components,
information or instructions relating to the Specifications. This indemnification is conditioned upon Supplier giving Sycamore prompt written notice of the claims, sole control over the defense and/or settlement of the claim, and at Sycamore’s
expense, Supplier’s full cooperation [ * ]. 

  

	 	15.2	Supplier agrees to indemnify Sycamore against damages finally awarded by a court of competent jurisdiction arising out of claims for direct losses, damages, costs and expenses
(including reasonable attorney’s fees) on account of personal injury, death, or tangible property damage as the result of Supplier’s active negligence or willful misconduct in the performance of Recurring Manufacturing Services and
Non-Recurring Manufacturing Services. This indemnification is conditioned upon Sycamore giving Supplier prompt notice of the claims, [ * ] over the [ * ] of the claims, and at Supplier’s expense, Sycamore’s full cooperation in the defense
of same. 

  

	 	15.3	Sycamore agrees to defend at its expense, hold harmless and indemnify Supplier, [ * ], from and against any judgments, liabilities, claims, demands, expenses, or costs (including
attorneys’ fees) to the extent arising from any claim or action asserting that [ * ], or any part thereof, or [ * ], infringes on any intellectual property right, including, without limitation, patent, trademark, copyright, trade secret, or
other proprietary right, of any third party, foreign or domestic. This indemnification is conditioned upon Supplier giving Sycamore prompt written notice of the claims, [ * ] and/or [ * ] of the claim, and at Sycamore’s expense, Supplier’s
[ * ]. 

  

	 	15.4	Supplier agrees to defend at its expense, hold harmless and indemnify Sycamore, [ * ], from and against any judgments, liabilities, claims, demands, expenses, or costs (including
attorneys’ fees) to the extent arising from any claim or action asserting that [ * ] infringe on any intellectual property right, including, without limitation, patent, trademark, copyright, trade secret, or other proprietary right, of any
third party, foreign or domestic. This 

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omitted portions. Asterisks within brackets denote omission. 

  

 13 

 indemnification is conditioned upon Sycamore giving Supplier prompt written notice of the claims, [ * ]
and/or [ * ] of the claim, and at Supplier’s expense, [ * ]. 
  

	 	15.5	The above indemnities also apply to claims covered by such indemnities for [ * ] made by [ * ] for infringement of Intellectual Property rights and for [ * ]). However, no[ * ]
third parties shall be deemed to be third party beneficiaries under such indemnities or this Agreement. 

  

	16.0	PAYMENT TERMS 

  

	 	16.1	Supplier shall render invoices to Sycamore for all Products provided and Services performed under this Agreement [ * ] of Products to Sycamore or its customer, or Sycamore’s
acceptance of Non-Recurring Manufacturing Services, as applicable. Supplier shall send invoices to Sycamore Networks, Inc., Attention: Accounts Payable, at the address specified on Sycamore’s Purchase Order. 

  

	 	16.2	Sycamore shall pay Supplier [ * ] Days [ * ] from date of accurate invoice. Sycamore shall be entitled to a [ * ] from date of an accurate invoice. Supplier shall pay Sycamore [ * ]
Days [ * ] from date of accurate invoice. 

  

	 	16.3	Supplier’s Invoices shall be in writing and shall contain at least the following information: 

  

	 	•	 	Sycamore’s Purchase Order Number, 

  

	 	•	 	Sycamore’s Part Number and Revision Level, 

  

	 	•	 	Quantity of Products or Services, 

  

	 	•	 	Unit Price of Products or Services, 

  

	 	•	 	Extended Price, 

  

	 	•	 	F.O.B. point 

  

	 	•	 	Delivery location 

  

	 	•	 	Applicable freight and insurance charges reflected as separate line items 

  

	 	•	 	Date of invoice and date of shipment 

  
  
 All amounts due are payable to Supplier at its address specified herein or
at such other place as Supplier may hereafter designate in writing to Sycamore. 
  

	 	16.4	[ * ] shall pay for those taxes imposed by any jurisdiction where Supplier assembles, tests, inspects, packages and/or manufactures Sycamore’s goods and which are directly
imposed upon the goods or services provided by Supplier to Sycamore before title passes to Sycamore. [ * ] will be solely responsible for and will pay [ * ], as the case may be) for all taxes, including sales taxes (if the item is not for resale),
value-added taxes, duties or other governmental or regulatory charges in any country, resulting from the transfer from Supplier to Sycamore of title to Products, except for any income, corporate or other related taxes based upon [ * ] income or
property for which [ * ] is directly liable. 

  

	 	16.5	Supplier accepts the credit liability of any Purchase Order once it is accepted and cannot request Sycamore to pay down any credit amount after such acceptance.

  

	17.0	INTELLECTUAL PROPERTY 

  

	 	17.1	Sycamore retains all rights to all existing intellectual property, including but not limited to, all patents, applications for patents, copyrights, mask works, trade secrets and
other intellectual property rights (“Intellectual Property”) owned by or licensed to Sycamore. Sycamore grants to Supplier a limited license solely to use and disclose the Intellectual Property to the extent necessary for Supplier to
perform its obligations hereunder. Sycamore warrants that all third-party Intellectual Property licenses to Sycamore are in good standing and include the right to grant Supplier all rights necessary to enable Supplier to perform its obligations
hereunder this Agreement. 

  

	 	17.2	Supplier retains all rights to all existing Intellectual Property owned by or licensed to Supplier. Supplier warrants that all third-party Intellectual Property licenses to Supplier
are in good standing and include all necessary rights to permit Supplier to perform its obligations hereunder. 

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omitted portions. Asterisks within brackets denote omission. 

  

 14 

	 	17.3	Sycamore will own all rights to any Intellectual Property conceived, created or developed by Supplier in the course of performing its obligations hereunder, paid for by Sycamore,
and relating to the design of the Products. Supplier agrees that all designs, production tooling, prototypes, documentation, and any other data or components generated or developed by Supplier under this Agreement, paid for by Sycamore, and relating
to the design of the Products or furnished by Sycamore to Supplier shall be and shall remain the sole property of Sycamore. Supplier specifically agrees that all copyrightable components generated or developed under this Agreement, paid for by
Sycamore, and applicable to the Products (other than solely related to the manufacture of the Products) shall be considered works made for hire and that such components shall, upon creation, be owned exclusively by Sycamore, provided, however, that
to the extent that any such components have general application to Supplier’s manufacturing processes, Sycamore hereby grants to Supplier a non-exclusive, worldwide, royalty-free, non-transferable and irrevocable license to use such components
in connection with Supplier’s regular and customary course of business as a contract manufacturer. To the extent that any such components, under applicable law, may not be considered works made for hire, Supplier hereby assigns to Sycamore the
ownership of copyright in such components, without the necessity of further consideration, and Sycamore shall be entitled to obtain and hold in its own name all copyrights in such components. 

  

	 	17.4	If and to the extent Supplier may, under applicable law, be entitled to claim any ownership interest in the Intellectual Property Rights generated or developed by Supplier and
granted to Sycamore under Section 17.3, Supplier hereby transfers, grants, conveys, assigns and relinquishes exclusively to Sycamore all of Supplier’s right, title and interest in and to such Intellectual Property Rights in perpetuity or for
the longest period otherwise permitted by law. Supplier shall perform any acts, at Sycamore’s cost, that may be deemed necessary or desirable by Sycamore to evidence more fully transfer of ownership to Sycamore of all Intellectual Property
rights designated under this subparagraph 17.4 to the fullest extent possible, including but not limited to, the making of further written assignments in a form determined by Sycamore. Supplier agrees that it shall have and maintain, during
performance of this Agreement, written agreements with all employees, contractors, or agents engaged by Supplier in performing hereunder, granting Supplier rights sufficient to support all performance and grants of rights by Supplier. Supplier shall
provide copies of such agreements to Sycamore promptly upon request. 

  

	 	17.5	Except to the extent provided in Section 17.3 above, Supplier will own all rights to any Intellectual Property conceived, created or developed by Supplier in the course of
performing its obligations hereunder and solely relating to the manufacturing of the Products. 

  

	 	17.6	Except to the extent expressly stated herein or to the extent such Intellectual Property is incorporated into any Product or process related thereto, nothing in this Agreement
grants or can be capable of granting to Sycamore (whether directly or by implication, estoppel or otherwise) any existing Supplier rights to any Intellectual Property owned by or licensed to Supplier. Supplier hereby grants to Sycamore a
non-exclusive, worldwide, royalty-free, non-transferable and irrevocable license to use Intellectual Property owned by or licensed to Supplier and incorporated into any Product or process related thereto in connection with the manufacture, testing
or service of the Products (such license to include Sycamore’s right to use the physical embodiment of such Intellectual Property, whether in the form of tooling or otherwise, for its business purposes). 

  

	 	17.7	Sycamore’s know-how, testing components, Intellectual Property or the terms of this Agreement, including but not limited to, prices, Specifications, production schedules and
other performance activities hereunder are subject to the confidentiality provisions of Section 28 below. 

  

	 	17.8	To the extent transferable, Supplier shall pass through to Sycamore and its customers all intellectual property rights protection and indemnification secured from its Vendors.
Supplier will use commercially reasonable efforts to obtain: (i) substantially similar intellectual property indemnification from its Vendors and (ii) the Vendors’ agreement to transfer the same to Sycamore and its customers.

  

	18.0	CUSTOMER PROPERTY 

  

	 	18.1	Supplier shall use Sycamore Information only for the purposes contemplated by this Agreement. 

  

	 	18.2	Supplier will treat all Sycamore Information with substantially the same care as it treats its own property of a similar nature, but in no event less than a reasonable degree of
care, and subject to the confidentiality provisions of Section 28 

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omitted portions. Asterisks within brackets denote omission. 

  

 15 

 below. Supplier shall sequester and conspicuously mark all Sycamore components and permit Sycamore to
make site inspections to verify the treatment of such components upon reasonable notice. Supplier shall carry insurance coverage appropriate to cover the risk of loss of or damage to Sycamore’s tangible property in Supplier’s possession
and control. 
  

	 	18.3	Sycamore shall bear the costs of all maintenance, calibration and repair of Sycamore tooling supplied by Sycamore. Supplier shall bear the costs of all maintenance, calibration and
repair of Sycamore tooling with respect to which Sycamore pays Supplier to obtain on Sycamore’s behalf. Supplier must immediately notify Sycamore in the event that tooling or test equipment is found to be out-of-tolerance during calibration.
The Supplier shall obtain authorization from Sycamore for any maintenance, calibration and repair costs in excess of [ * ] for such services obtained on Sycamore’s behalf. 

  

	19.0	QUALITY ASSURANCE 

  

	 	19.1	Supplier shall maintain quality assurance systems for the control of components quality, processing, assembly, testing, packaging and shipping in accordance with its usual policies
and practices and reasonably satisfactory to Sycamore. Supplier shall use IPC A-610 Rev. B Class 2, as published by the Institute for Interconnecting and Packaging Electronic Circuits, as the workmanship standard in performing Services hereunder.
Any deficiencies identified by Sycamore in such systems shall be communicated to Supplier in writing. The Supplier is responsible for correcting identified deficiencies in a mutually agreed upon timely fashion. The cost of such changes shall be the
responsibility of Supplier. 

  

	 	19.2	Supplier must notify Sycamore in advance of any significant changes to process or equipment, for example, solder chemistries, assembly and test equipment, etc.

  

	 	19.3	Supplier shall provide at its cost any required minor test equipment as specified by Sycamore. Minor equipment requirements shall be reviewed with the Supplier as part of the test
process transfer. Minor equipment includes, but is not limited to, digital multimeters, scopes probes, and device programmers. 

  

	 	19.4	The Supplier shall maintain an inventory of test consumables as specified by Sycamore. Test consumables requirements shall be reviewed with Supplier as part of the test process
transfer. Test consumables include, but are not limited to test cables, adapters, test fibers, and connector savers. Sycamore shall reimburse Supplier for the costs incurred to maintain such inventory of test consumables as specified by Sycamore
upon Supplier’s written notification. 

  

	 	19.5	Supplier shall perform its processes and acceptance tests in accordance with procedures developed by Sycamore and agreed to by Supplier. The parties shall meet on a quarterly basis
to establish minimum acceptable test yields. 

  

	 	19.6	Either party may, during normal business hours and following reasonable notice and subject to the other party’s normal security requirements, review the other party’s
facilities and quality control procedures as reasonably necessary for the first party to satisfy itself of the other party’s compliance with its obligations under this Agreement. 

  

	 	19.7	The parties shall endeavor to meet quarterly to discuss and resolve any issues that may have arisen, including issues relating to quality, performance, engineering changes,
obsolescence or surpluses. 

  

	 	19.8	Supplier shall retain and maintain the following records and supporting documentation for a period of five (5) years beyond the termination of the Agreement, and Supplier will
provide a copy of the same to Sycamore upon request. 

  
 The data contained in these records are the sole and exclusive property of Sycamore. 
  

	 	•	 	Quality Data 

  

	 	•	 	FDA Records 

  

	 	•	 	Optical Component Data Sheets 

  

	 	19.9	The parties shall evaluate and mutually agree upon any additional quality requirements. 

  

	20.0	SUPPLIER’S REPRESENTATIONS AND WARRANTIES 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 16 

	 	20.1	Supplier represents and warrants that it maintains insurance coverage with [ * ] rated carrier that is acceptable to Sycamore in the amounts listed below: 

 

	 General Liability:
	  	umbrella of US[ * ] million
		
	 Worker’s Compensation:
	  	As required by local law of the state in which Supplier’s facility(ies) is(are) located
		
	 Errors and Omissions:
	  	US[ * ] million per claim and US[ * ] million annual aggregate
		
	 Product Liability:
	  	US[ * ] million per claim and US[ * ] million annual aggregate
		
	 Property Insurance:
	  	US[ * ] million

  

	 	20.2	Supplier represents and warrants that it will maintain at its sole expense an ISO 9001 or ISO 9002 certified quality system in any of the facilities in which Products are designed
(ISO 9001) or manufactured (ISO 9001 or ISO 9002). In addition, Supplier will provide Sycamore on a quarterly basis information relating to ISO 14000 certified quality system until such time that Supplier registers its own ISO 14000 certified
quality system. 

  
 Supplier agrees to maintain
safety information as required for Sycamore agency approvals. This will include but not be limited to, maintaining the following as defined by Sycamore: UL/CSA/CE agency case files for safety critical parts, testing (Hi Pot) of Products per
UL/CSA/CE defined procedures, labelling of Products per UL/CSA/CE requirements, and record keeping and maintenance per FDA Laser Safety requirements. 
  

	 	20.3	Supplier represents and warrants that it shall maintain all Direct Fulfillment Inventory, Consigned Inventory and Consigned Repairs Components on Supplier’s premises that have
been purchased by Sycamore in a secure and separate location, labeled as Sycamore’s property and free of all liens and attachments. Supplier shall retain the risk of loss of all Consignment Inventory and Consigned Repairs Components while it is
on its premises. Direct Fulfillment Inventory manufactured by Supplier will, in accordance with Section 10.2.3 hereof, be invoiced by Supplier upon the same being placed in Sycamore’s finished goods inventory location at Supplier, at which time
title and risk of loss to such Direct Fulfillment Inventory shall pass to Sycamore; notwithstanding, Supplier will insure such Direct Fulfillment Inventory held in Supplier’s facilities at the full replacement cost thereof under the terms and
conditions of Supplier’s “all risk” insurance coverage. 

  

	 	20.4	Supplier shall provide Sycamore with a certificate of insurance in a form reasonably acceptable to Sycamore naming Sycamore as a loss payee under Supplier’s insurance policies
as set forth in Section 20.1 and which provides that Sycamore shall have the right to participate directly with the insurance carrier, broker, and Supplier in the negotiation of any claim for a loss made thereunder affecting Sycamore’s Direct
Fulfillment Inventory, Consigned Inventory or Consigned Repairs Components on Supplier’s premises. Such certificate of insurance shall also include a provision whereby thirty (30) Days notice must be received, from Supplier or the applicable
insurer, by Sycamore prior to coverage cancellation or material alteration of the coverage. Such cancellation or material alteration shall not relieve Supplier of its continuing obligation to maintain insurance coverage in accordance with the
provisions of this Section 20. 

  

	21.0	HAZARDOUS MATERIAL/TOXIC SUBSTANCES 

  

	 	21.1	Supplier shall treat all material subject to the Toxic Substance Control Act, (15 USC 2601 et. seq.), the Resource Conservation and Recovery Act (42 USC 6901 et. seq.) and the
Environmental Protection Agency Hazardous Waste Management Program (40 CFR 260 et. seq.) (“Hazardous Material Laws”) strictly in compliance with such Hazardous Material Laws and as provided herein. Supplier agrees that all such material
shall be SHIPPED, TRANSPORTED, DISPOSED, MARKED, LABELED, TAGGED, PLACARDED, PACKAGED, IDENTIFIED, USED, PRESERVED, AND DOCUMENTED BY SUPPLIER AS REQUIRED BY APPLICABLE FEDERAL REGULATIONS INCLUDING BUT NOT LIMITED TO 49 CFR 172 ET. SEQ. AND 29 CFR
1910.1200 ET. SEQ. IN ADDITION, SUPPLIER SHALL SUPPLY THE FOLLOWING INFORMATION: DESCRIPTION OF HAZARDOUS 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  
  

 17 

 MATERIALS AND SHIPPING NAME, HAZARD CLASS OR DIVISION, IDENTIFICATION NUMBERS, PACKING GROUP AND LABELS
PER 49 CFR 172.202 ET SEQ. 
  

	 	21.2	Supplier shall comply with the Hazard Communication Standard, 29 CFR 1910.1200. Supplier shall ensure that the names of the items identified on the applicable Material Safety Data
Sheets are identical to the names that appear on the label of the Product shipped to Sycamore or its customer. Supplier shall provide a copy of the applicable Material Safety Data Sheets) with each such shipment. 

  

	 	21.3	Supplier shall comply with Section 313 of the Emergency Planning and Community Right to Know Act of 1986 and 40 CFR Part 372, if applicable. As part of such compliance, Supplier
shall furnish the following information with the initial shipment of each Product to Sycamore or its customer: 

  

	 	21.3.1	 	A statement that the Products contain chemicals which are subject to Section 313 of Title III of the Superfund Amendments and Reauthorization Act of 1986 and 40 CFR 372.45.

  

	 	21.3.2	 	The name and associated Chemical Abstract Service Registry number of each chemical which has been incorporated into the Products and which is listed in the specific Toxic Chemical
Listings contained in 40 CFR 372.45. 

  

	 	21.3.3	 	The percentage by weight of each toxic chemical component of the Products shipped. 

  

	 	21.4	Supplier shall ship Products containing hazardous components by common carrier authorized to handle the components and in accordance with 49 CFR Parts 100-109 and the “ATA
“Dangerous Goods Regulations” or “International Maritime Dangerous Goods Code” (if applicable). This includes, but is not limited to, compliance with the following requirements: 

  

	 	21.4.1	 	Supplier shall list an emergency contact number on all shipping papers. 

  

	 	21.4.2	 	Supplier shall list on all shipping papers and packages the technical names of all hazardous components in parenthesis format, the association to the basic description and, in the
case of mixtures, the major hazardous components by percentage contributing to the hazard. 

  

	 	21.4.3	 	Supplier shall indicate on the shipping papers whether the components presents Poisonous by Inhalation (“PIH”) hazards. 

  

	 	21.4.4	 	At Sycamore’s request, Supplier shall provide test reports to Sycamore indicating Supplier’s compliance with Performance Oriented Packaging requirements to facilitate
Sycamore’s reshipment of Products to customers. 

  

	 	21.4.5	 	Supplier shall clearly mark on all interior packages and shipping containers the closed cup flash point of flammable and combustible liquids. 

  

	 	21.5	Supplier may not perform Services hereunder with ozone depleting substances and may not incorporate ozone-depleting substances into the Products unless approved by Sycamore in
advance in writing. In the event of such approval, Supplier shall affix the following warning statement to all affected Products and Services and associated paperwork: “WARNING: Manufactured with CFC-11, 12,13, 111, 112, 113, 114, 115, 211,
212, 213, 214, 215, 216, 217, Halons 12211, 1301, 2402, Carbon Tetrachloride or Methyl Chloroform substances which harm public health and environment by destroying the ozone in the upper atmosphere”. 

  

	 	21.6	DESCRIPTION OF HAZARDOUS MATERIALS ON SHIPPING PAPERS—Supplier must list a description of all hazardous material on all shipping papers associated with Products, as follows:

  

	 	21.6.1	 	The proper shipping name prescribed for the material in Column 2 of 49 CFR 172. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  
  

 18 

	 	21.6.2	The hazard class or division prescribed for the material as shown in Column 3 of 49 CFR 172 (Table) (Class names, IMO class and division numbers or subsidiary hazard classes may be
entered in parentheses following the numerical hazard class). 

  

	 	21.6.3	The identification number (preceded by “UN” or “NA” as appropriate) prescribed for the material as shown in Column 4 of 49 CFR 172 (Table).

  

	 	21.6.4	The packing group, if any, prescribed for the material in Column 5 of 49 CFR 172 (Table). 

  

	22.0	MINORITY/WOMEN BUSINESS ENTERPRISES 

  

	 	22.1	Supplier shall use its reasonable best efforts to award subcontracts to minority business enterprises in a monetary amount equal to [ * ] percent [ * ] of its annual revenue under
this Agreement to the extent consistent with the efficient performance of this Agreement. As used in this Agreement, “minority business enterprise” means a business at least fifty percent (50%) of which is owned, controlled and operated by
minority group members or, in the case of publicly-owned business, at least fifty-one percent (51%) of the stock of which is owned by minority group members. A women’s business enterprise means a business which is fifty-one (51%) owned,
controlled and operated by women. For the purpose of this definition, minority group members are Blacks, Hispanics, Asian Pacific Islanders, American Indians and Alaskan Natives. Supplier may rely on written representations by subcontractors
regarding their status as minority or women’s business enterprises in lieu of an independent investigation. Upon Sycamore’s written request, within ten (10) business days of the end of each Sycamore quarter, Supplier shall provide to
Sycamore a written report signed by one of its officers which details the percentage of minority business enterprise subcontracts comprising the revenue generated by Supplier from Sycamore’s business that quarter under this Agreement.

  

	23.0	EXCLUSIONS AND LIMITATION OF LIABILITY 

  

	 	23.1	Neither party excludes or limits its liability for death or personal injury resulting from its negligence nor liability for breach of any term implied by statute to the extent that
such liabilities cannot by law be limited or excluded. 

  

	 	23.2	Subject only to subparagraph 23.1 above, under no circumstances shall either party have any liability in connection with this Agreement, whether in contract or for negligence or
otherwise and whether related to any single event or series of connected events (but not relating to Sycamore’s inventory liabilities or obligations to pay invoices hereunder that are not subject to a bona fide dispute), for any of the
following: 

  

	 	23.2.1	any liability in excess of: 

  

	 	23.2.1.1	 	in the case of damage to or loss of tangible property, the value of such property; 

  

	 	23.2.1.2	 	in the case of any warranty claims by Sycamore against Supplier, an amount equal to [ * ]; and 

  

	 	23.2.1.3	 	in any event, and in respect of any other liability, an amount equal to [ * ]. 

  

	 	23.2.2	any liability for any incidental, indirect or consequential damages, including those relating to loss of business, loss of records or data, loss of use, loss of profits, revenue or
anticipated savings or other economic loss, whether or not Supplier or Sycamore was informed or was aware of the possibility of such loss. 

  

	 	23.3	Neither party may bring an action under this Agreement more than [ * ] after the cause of action arose. 

  

	 	23.4	Neither party will have liability to the other for any failure to perform any obligation under this Agreement or any order to the extent such failure was due to the act or omission
of the other party or any agent of the other party. 

  

	24.0	TERMINATION 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 19 

	 	24.1	After notice of termination is tendered, each party shall cause its Coordinator to prepare (a) an orderly termination of this Agreement and (b) for return to the owning party of its
components, equipment, records, specifications, and confidential information. The parties agree to work together to achieve as orderly a transition as possible. 

  

	 	24.2	Sycamore may terminate this Agreement for any reason by providing written notice to Supplier at least [ * ] Days in advance of the requested termination date. Supplier may
terminate this Agreement for any reason by providing written notice to Sycamore at least [ * ] Days in advance of the requested termination date. For avoidance of doubt, if either party resorts to the dispute resolution proceedings sets forth under
Section 31 hereof, it shall not preclude either party from exercising its rights to terminate under Section 24.2 hereof. 

  

	 	24.3	Either party may terminate this Agreement at any time for cause in the event that any material default by the other remains uncured for more than [ * ] Days following written notice
or in the event that other party files or has filed against it any bankruptcy, insolvency or receivership proceeding which prevents or presents a reasonable risk of preventing such party from fulfilling is obligations hereunder, and which is not
cured within [ * ] Days of written notice. The non-defaulting party shall specify in the written notice the conditions constituting the default and the corrective action, if any, which must be undertaken to cure such default. If, on or before the
noticed date of termination, the non-defaulting party, in the exercise of good faith, determines that the defaulting party has cured the noticed condition of default or has undertaken satisfactory arrangements to attempt the cure, then this
Agreement shall continue in force and effect. 

  

	 	24.4	Upon termination [ * ], Sycamore shall be responsible for: 

  

	 	24.4.1	Supplier’s scheduled and actual work-in-process for Sycamore; 

  

	 	24.4.2	Finished Products; 

  

	 	24.4.3	Any investment incurred by Supplier specifically in relation to this Agreement with the prior written agreement of Sycamore and which has not been recovered by Supplier from
Sycamore through Reasonable and Prudent Purchasing Practices, amortization or other means; 

  

	 	24.4.4	All Obsolete Inventory or Excess Inventory reported in accordance with Section 11; 

  

	 	24.4.5	Except for Sycamore’s termination due to the default of Supplier, all Purchase Orders placed and accepted by Supplier in accordance with this Agreement; and

  

	 	24.4.6	Cancellation or restocking charges for Supplier purchase orders placed on behalf of Sycamore, provided that Supplier has employed Reasonable and Prudent Purchasing Practices with
regard to such components and Supplier can reasonably demonstrate such practices by documentary or other evidence. 

  
 Supplier shall bear the expense of all packaging for shipment and Sycamore shall bear the expense of all freight charges in accordance with Section 12.4.
Supplier shall calculate and document all charges under this section and shall provide Sycamore with reasonably sufficient documentation in a reasonable format to support all such charges and calculations. Either party shall be entitled to set-off
against any sums due the other party pursuant to this termination provision any sums, liquidated or contingent, which in the good faith judgment of such party constitute sums owing or direct damages for which the other party would be responsible
under the terms hereof. 
  

	25.0	FORCE MAJEURE 

  

	 	25.1	Except for the payment of invoices due to Supplier that are not the subject of a bona fide dispute, neither party shall be liable for any delay in performance or failure to perform
obligations, in whole or in part, when due to circumstances beyond its reasonable control, a labor dispute, strike, war or act of war (whether an actual declaration is made or not), acts of terrorism, insurrection, riot, civil commotion, fire,
flood, or other act of God. If an event of Force Majeure 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 20 

 occurs, the party experiencing the Force Majeure event shall immediately notify the other party of the
interruption of scheduled deliveries. 
  

	 	25.2	If an event of Force Majeure continues for a period of [ * ] Days, Sycamore shall have the right to terminate this Agreement immediately upon written notice to Supplier.

  

	 	25.3	If Supplier experiences a Force Majeure event, Supplier shall use its reasonable best efforts immediately to put into effect an alternate plan to continue supplying Products and
Services to Sycamore. Among other things, Supplier’s plan shall grant Sycamore priority treatment in moving the affected operations to another Supplier facility in order to continue production and minimize downtime. 

  

	26.0	NOTICES 

  

	 	26.1	In any case where a notice or other communication is to be given or made pursuant to any provision of this Agreement, such notice or communication will be deemed to be received when
given or made as follows: 

  

	 	26.1.1	 	if by hand delivery, on the day delivered; 

  

	 	26.1.2	 	if by telex, cable, confirmed fax, or telegraph, on the next business day following the date sent; and 

  

	 	26.1.3	 	if by mail, on the third calendar day following posting by certified or registered mail, return receipt requested. 

  

	 	26.2	Supplier shall mail all such notices to Sycamore and addressed to: 

  

	 Mr. John Dowling
	 	Copy to: Law Department
	 Sycamore Networks, Inc.
	 	Sycamore Networks, Inc.
	 220 Mill Road
	 	220 Mill Road
	 Chelmsford, MA 01824
	 	Chelmsford, MA 01824
	 FAX # (978) 256-0022
	 	FAX # (978) 244-1097

  

	 	26.3	Sycamore shall send all such notices to Supplier and addressed to: 

  

	 President
	 	Copy to: General Counsel
	 Plexus Services Corp.
	 	Plexus Services Corp.
	 55 Jewelers Park Drive
	 	55 Jewelers Park Drive
	 Neenah, Wisconsin 54957
	 	Neenah, Wisconsin 54957

  

	 	26.4	Coordinators, are: 

  
 For Supplier: 
  
 Steve Cohen 
 Plexus Services Corp.

 4 Copeland Drive 
 Ayer, MA
01432 
  
 For Sycamore: 
  
 John Breda 
 Sycamore Networks, Inc. 
 220 Mill Road

 Chelmsford, MA 01824 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 21 

	27.0	NON-ASSIGNMENT 

  

	 	27.1	Neither party may assign this Agreement without the prior written consent of the other party, which approval shall not be unreasonably withheld or delayed. Either party may,
however, assign this Agreement in the event of a merger, acquisition, consolidation or sale of all or substantially all of such party’s business assets or stock, to which assignment both parties hereby consent. 

  

	28.0	CONFIDENTIALITY / NON-DISCLOSURE 

  

	 	28.1	The parties shall comply with the provisions of the confidentiality agreement between Supplier and Sycamore Networks, Inc. (the “Confidentiality Agreement”) effective
August 16, 2000. 

  

	 	28.2	Neither party shall make any public announcement or other disclosure concerning the existence or terms of this Agreement without first obtaining the other party’s written
consent and agreement upon the nature and text of such announcement, such approval and agreement not to be unreasonably withheld. This subparagraph 28.2 shall not apply to (a) any disclosure to a third party which a party determines is reasonably
necessary in connection with any financing, strategic transaction, acquisition or disposition involving such party, provided that the third party signs a nondisclosure agreement with terms and conditions substantially similar to this subparagraph
28.2, or (b) any disclosure which a party reasonably determines is required by applicable law, regulation, regulatory authority, legal process or the rules of any stock market on which the securities of such party are listed or quoted for trading.

  

	29.0	SUPERSEDING EFFECT 

  

	 	29.1	This Agreement, including all attachments, constitutes the entire Agreement between the parties with respect to the subject matter and supersedes all previous communications,
representations, understandings and agreements, either oral or written, between the parties. This Agreement shall be modified only by an instrument in writing signed by duly authorized representatives of the parties. 

  

	 	29.2	Any standard or pre-printed terms and conditions set out in any Sycamore Purchase Order form or any Supplier invoice or order acknowledgement shall have no effect and are superseded
by the terms and conditions of this Agreement. 

  

	 	29.3	Any rights or obligations under this Agreement which, by their nature and context, continue after termination will remain in effect until fully satisfied or fully performed.

  

	 	29.4	If there is any conflict or inconsistency between the terms and conditions of any Purchase Order or other documents provided by either party to the other hereunder and the terms and
conditions of this Agreement, the terms and conditions of this Agreement shall prevail. 

  

	30.0	GOVERNING LAW 

  

	 	30.1	This Agreement shall be interpreted in all respects in accordance with the laws of the State of New York, USA, exclusive of any provisions of the United Nations Convention on the
International Sale of Goods and without regard to principles of conflict of laws. The parties submit to the nonexclusive jurisdiction of the courts of the State of New York. The parties further expressly waive any right they may have to a jury trial
and agree that any proceedings under this Agreement shall be tried by a judge without a jury. 

  

	31.0	DISPUTE RESOLUTION PROCESS 

  

	 	31.1	Disputes between Supplier and Sycamore will be handled through this Dispute Resolution Process. This process shall be initiated when a party’s Coordinator completes a Dispute
Resolution Form (contained in Exhibit C) and provided it to the other Coordinator. The dispute will be resolved within five (5) business days by the Coordinators and the issue will be closed. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 22 

	 	31.2	In the event that the Coordinators are unable to resolve the dispute within five (5) business days of the notice thereof, either person may request that their Level 1 Managers (as
defined herein below) meet to discuss the dispute. A meeting between the Level 1 Managers shall be held within seven (7) Days of the date on which such meeting is requested. In the event the Level 1 Managers are unable to agree on a plan for
resolving the dispute within seven (7) Days of the requested meeting, either Level 1 Manager may raise the issue to the respective Level 2 Managers. In the event the Level 2 Managers are unable to agree on a plan for resolving the dispute within
seven (7) Days of when the dispute is raised by a Level 1 Manager, either Level 2 Manager may raise the dispute to the respective Level 3 Managers. If the Level 3 Managers fail to resolve such dispute within ten (10) business days of when the
dispute is raised by a Level 2 Manager, the Dispute Resolution Process is completed and the parties may exercise any and all rights under this Agreement. 

  
 To facilitate the Dispute Resolution Process, the parties agree to the following escalation path: 
  

	 Level

	  	 Supplier

	  	 Sycamore

			
	 	  	Supplier Program Manager	  	Sycamore Coordinator
			
	 Level 1
	  	Supplier Strategic Customer Manager	  	Sycamore Business Contact Vice President of Operations
			
	 Level 2
	  	Supplier CFO	  	Sycamore CFO
			
	 Level 3
	  	Supplier President	  	Sycamore CEO

  
 Any level manager may
authorize a designee to assume his/her responsibilities under this section provided such designee is given full authority to agree to a resolution of the dispute. During the pendency of the dispute resolution process, Sycamore will continue to make
payments in accordance with the provisions of this Agreement and Supplier will continue to perform Services. So long as both parties follow the dispute resolution process, neither Supplier nor Sycamore shall institute any legal proceedings or resort
to any remedy to enforce its rights under the Agreement, except that either party may apply for an injunction or other equitable relief if it believes in good faith that an injunctive or equitable relief is necessary to prevent if from incurring
serious and irreparable harm. 
  

	32.0	GENERAL 

  

	 	32.1	Supplier shall comply with all applicable state and federal laws and regulations, including, without limitation, the requirements of the Fair Labor Standards Act of 1938 (as
amended), and to provide disclosure as to all hazardous substances utilized in the manufacture of the Products and the performance of Services. The foregoing shall not be deemed, however, to create liability on the part of Supplier for intellectual
property infringement (other than as provided under Section 15 hereof) or for non-compliance where such non-compliance arose out of Supplier’s conformance with the Specifications or Sycamore instructions or directives. 

 

	 	32.2	The parties are each independent contractors and not joint venturers, partners, agents or representatives of the other. Neither party has any right to create any obligation on the
part of the other party. This Agreement shall not prevent Supplier from marketing, acquiring, or developing components, products or services that are similar or competitive to those of Sycamore. Supplier may pursue activities independently with any
third party, even if similar to the activities under this Agreement. 

  
 THE REMAINER OF THIS PAGE IS INTENTIONALLY BLANK. 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 23 

	 	32.3	All provisions of this Agreement which by their nature must survive termination in order to achieve the fundamental purposes of this Agreement shall, except as otherwise provided
herein, survive the expiration or earlier termination of this Agreement for any reason, including but not limited to the following Sections: Section 9—Cancellation, Section 10—Inventory Management, Section 11—Obsolete or Excess
Component Inventory, Section 13—Supplier Warranty, Section 15—Indemnification, Section 16—Payment Terms, Section 17—Intellectual Property, Section 18—Customer Property, Section 19—Quality Assurance, Section
20—Supplier’s Representations and Warranties, Section 21—Hazardous Components/Toxic Substances, Section 23—Exclusions and Limitation of Liability, Section 24—Termination, Section 25—Force Majeure, Section
28—Confidentiality/Non-Disclosure, Section 30—Governing Law, and Section 32—General. 

  
 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized representatives effective on the date referenced above.

  

	 SYCAMORE NETWORKS, INC.
	  	     PLEXUS SERVICES CORP.
		
	 By:
                                        
                            
	  	 By:
                                        
                            

		
	 Name:
                                        
                       
	  	 Name:
                                        
                       

		
	 Title:
                                        
                        
	  	 Title:
                                        
                        

		
	 Date:
                                        
                         
	  	 Date:
                                        
                         

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omitted portions. Asterisks within brackets denote omission. 

  
  

 24 

 EXHIBIT A 
  
 VARIANCE AUTHORIZATION FORM 
  

	 Type of Request

	 	 Indicate Y for all that apply

	 PPV
	 	

	 Min Order Qty
	 	

	 NCNR Authorization
	 	

	 SPF Variance
	 	

	 	 	

	 Required for Production Build:
	 	

	 Required for NPI Build:
	 	

		
	 Date:
	 	 
	 Part #:
	 	SXXX-XXXXX-XX
	 Product Code (where used):
	 	XXXXXX
	 Component lead-time
	 	 
		
	 Qty for Approval:
	 	 
	 Qty required:
	 	 
	 Min. Order Qty:
	 	 
		
	 Current Quoted Price:
	 	 
	 SPF Price:
	 	 
	 CM STD Price:
	 	 
	 CM Purchase Order
	 	 
		
	 Impact $ (PPV or Excess Inv):
	 	 
		
	 Manufacturer Part #:
	 	 
	 Supplier:
	 	 
		
	 Reason/Comments:
	 	 
	 Buyer Requesting:
	 	 
	 Resolution:
	 	SPF confirmed, Change SPF, order min., etc.
	 Approval Date:
	 	 
		
	 Requestor
	 	 
	 Requestor Action:
	 	 
	 Date:
	 	 
		
	 Notes:
	 	 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

 EXHIBIT B 
 NON-RECURRING SERVICES PRICING 
  
 [ * ] 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 26 

 EXHIBIT C 
  
 DISPUTE RESOLUTION FORM 
  
 Dispute Resolution Form 
 Sycamore/Plexus Manufacturing Services Agreement 
  

	 Issue Resolution Number: 

	 	 Date:

	 Requesting Coordinator:

	 	 Organization: 

  
 Issue 
 Description: 

	 	

  

  

  
 Impact (If Not 
 Resolved) 

	 	

  

  

  

	Date Resolution Needed	 	  

  
 Attachments (If Any)

  

  

  

	 Reviewer
	  	  

	  	Review Completion Date	  	  

  
 Reviewer Comments: 

 

  

  
 Reviewer Recommendations:     ( )
Accept    ( ) Reject    ( ) Need More Info.    ( ) Other 
 Disposition:
                                 ( ) Accepted    ( ) Accept
Conditionally    ( ) Rejected 

	Planned Completion Date:	  	  

 Comments: 
  

  

  

	 Resolved Date
	  	  

  

	 Sycamore Coordinator Signature
	  	  

  

	 Plexus Coordinator Signature
	  	  

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 27 

 Exhibit D 
 Sycamore Networks 
 Operating/Financial Calendar 
 Fiscal 2003 
  

	 	 	 August ’03

	 	 	 	 	 	 February ’03

	 	 
	 	 	 S

	 	 M

	 	 T

	 	 W

	 	 TH

	 	 F

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	 2
	 	4	 	5	 	6	 	7	 	8	 	9	 	10	 	 	 	28	 	2	 	3	 	4	 	5	 	6	 	7	 	8	 	 
	 3
	 	11	 	12	 	13	 	14	 	15	 	16	 	17	 	 	 	29	 	9	 	10	 	11	 	12	 	13	 	14	 	15	 	 
	 4
	 	18	 	19	 	20	 	21	 	22	 	23	 	24	 	 	 	30	 	16	 	17	 	18	 	19	 	20	 	21	 	22	 	 
						
	 	 	 September ’03

	 	 	 	 	 	 March ’03

	 	 
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	 6
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	 7
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	 8
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	 	 	 October ’03

	 	 	 	 	 	 April ’03

	 	 
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	 10
	 	29	 	30	 	1	 	2	 	3	 	4	 	5	 	 	 	36	 	30	 	31	 	1	 	2	 	3	 	4	 	5	 	 
	 11
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	 12
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	 13
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	 	 	 November ’03

	 	 	 	 	 	 May ’03

	 	 
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	 15
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	 16
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	 17
	 	17	 	18	 	19	 	20	 	21	 	22	 	23	 	 	 	43	 	18	 	19	 	20	 	21	 	22	 	23	 	24	 	 
						
	 	 	 December ’03

	 	 	 	 	 	 June ’03

	 	 
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	 19
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	 20
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	 21
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	 	 	 	 	 	 July ’03

	 	 
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	 23
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	 24
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	 26
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	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

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 Sycamore Networks 
 Operating/Financial Calendar 
 Fiscal 2004 
  

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	 	 	 	 	 	 February ’04

	 	 
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	 2
	 	3	 	4	 	5	 	6	 	7	 	8	 	9	 	1	 	28	 	1	 	2	 	3	 	4	 	5	 	6	 	7	 	 3

	 3
	 	10	 	11	 	12	 	13	 	14	 	15	 	16	 	 	29	 	8	 	9	 	10	 	11	 	12	 	13	 	14	 
	 4
	 	17	 	18	 	19	 	20	 	21	 	22	 	23	 	 	30	 	15	 	16	 	17	 	18	 	19	 	20	 	21	 
	 	 	 September ’04

	 	 	 	 	 March ’04

	 
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	 6
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	 7
	 	7	 	8	 	9	 	10	 	11	 	12	 	13	 	 	33	 	7	 	8	 	9	 	10	 	11	 	12	 	13	 
	 8
	 	14	 	15	 	16	 	17	 	18	 	19	 	20	 	 	34	 	14	 	15	 	16	 	17	 	18	 	19	 	20	 
	 	 	 October ’04

	 	 	 	 	 April ’04

	 
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	 9
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	 10
	 	28	 	29	 	30	 	1	 	2	 	3	 	4	 	 	36	 	28	 	29	 	30	 	31	 	1	 	2	 	3	 
	 11
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	 12
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	 13
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	 	 	 November ’04

	 	 	 	 	 	 May ’04

	 	 
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	 	26	 	27	 	28	 	29	 	30	 	31	 	1	 	QTR	 	40	 	25	 	26	 	27	 	28	 	29	 	30	 	1	 	QTR
	 15
	 	2	 	3	 	4	 	5	 	6	 	7	 	8	 	2	 	41	 	2	 	3	 	4	 	5	 	6	 	7	 	8	 	 4

	 16
	 	9	 	10	 	11	 	12	 	13	 	14	 	15	 	 	42	 	9	 	10	 	11	 	12	 	13	 	14	 	15	 
	 17
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	 	 	 December ’04

	 	 	 	 	 June ‘04

	 
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	 19
	 	30	 	1	 	2	 	3	 	4	 	5	 	6	 	 	45	 	30	 	31	 	1	 	2	 	3	 	4	 	5	 
	 20
	 	7	 	8	 	9	 	10	 	11	 	12	 	13	 	 	46	 	6	 	7	 	8	 	9	 	10	 	11	 	12	 
	 21
	 	14	 	15	 	16	 	17	 	18	 	19	 	20	 	 	47	 	13	 	14	 	15	 	16	 	17	 	18	 	19	 
	 	 	 January ’04

	 	 	 	 	 July ’04

	 
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	 23
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	 24
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	 25
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	 26
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 30 

 EXHIBIT E 
  
 [ * ] 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 31 

 Schedule 1 
  

[ * ] 

	*	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the
omitted portions. Asterisks within brackets denote omission. 

  

 32<PAGE>

                                                                     Exhibit 4.1

                               ITC/\DELTACOM, INC.

                    CERTIFICATE OF DESIGNATION OF THE POWERS,
              PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND
                 OTHER SPECIAL RIGHTS OF 8% SERIES B CONVERTIBLE
                 REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,
                      LIMITATIONS AND RESTRICTIONS THEREOF

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

     ITC/\DeltaCom, Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to authority conferred upon the board of directors of the
Corporation (the "Board of Directors") by the Corporation's Restated Certificate
of Incorporation, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors is authorized
to issue preferred stock of the Corporation in one or more series, and the Board
of Directors has duly approved and adopted the following resolution on July 2,
2003:

          RESOLVED, that, pursuant to the authority vested in the Board of
     Directors by the Restated Certificate of Incorporation of the Corporation,
     and pursuant to Section 151 of the General Corporation Law of the State of
     Delaware, the Board of Directors hereby creates, authorizes and provides
     for the issuance of 8% Series B Convertible Redeemable Preferred Stock, par
     value $0.01 per share, with a liquidation preference of $100.00 per share,
     consisting of 1,200,000 shares and having the powers, preferences and
     relative, participating, optional and other special rights and the
     qualifications, limitations and restrictions thereof that are set forth in
     the Restated Certificate of Incorporation and in this resolution as
     follows:

1.   Designation

     1.1  Designation; Liquidation Preference

     There is hereby created out of the authorized and unissued shares of
preferred stock of the Corporation a series of preferred stock designated as the
8% Series B Convertible Redeemable Preferred Stock (the "Series B Preferred
Stock"). The number of shares constituting the Series B Preferred Stock shall be
1,200,000. The liquidation preference of the Series B Preferred Stock shall be
$100.00 per share (the "Liquidation Preference"); provided that the Liquidation
Preference shall be subject to equitable adjustment if and whenever there shall
occur a stock split, combination or reclassification of, or other similar event
affecting, the Series B Preferred Stock.

<PAGE>

     1.2  Capitalized Terms

     Certain capitalized terms used in this Certificate of Designation have the
meanings assigned to them in Section 8.

2.   Dividends

     2.1  Payment of Preferred Dividends

          (a) The Holders of shares of Series B Preferred Stock shall be
entitled to receive with respect to each share of Series B Preferred Stock,
when, as and if declared by the Board of Directors, out of funds legally
available for the payment of dividends, dividends (the "Preferred Dividends") in
an amount equal to the greater of (x) dividends at the rate of 8% per annum (the
"Annual Dividend Rate") of the sum of the Liquidation Preference plus the amount
of any Accumulated Dividends accrued with respect to such share and (y)
dividends (other than dividends in Common Stock payable in connection with a
stock split, reclassification or subdivision of the Common Stock) that would
have accrued with respect to such share of Series B Preferred Stock during the
applicable Dividend Period if the Holder of such share had converted such share
into Common Stock immediately prior to the record date of any dividend declared
on the Common Stock in such Dividend Period. If any dividend declared on the
Common Stock and referred to in clause (y) above is in a form other than cash,
the value of such dividend for purposes of this Section 2.1(a) shall be
determined in good faith by the Board of Directors, whose determination, in the
absence of manifest error, but subject to Section 2.1(g), shall be final and
binding upon the Corporation and the Holders of the Series B Preferred Stock.
Any Preferred Dividend referred to in clause (y) above shall be deemed to have
accrued with respect to a share of Series B Preferred Stock as of the last day
of the applicable Dividend Period. Preferred Dividends on a share of Series B
Preferred Stock shall accrue and shall be cumulative whether or not declared
from the date of issue of such share of Series B Preferred Stock and shall be
payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each
year (unless, solely with respect to Preferred Dividends payable in cash, such
day is not a Business Day, in which event such Preferred Dividends shall be
payable on the next succeeding Business Day) (each such date being a "Dividend
Payment Date" and each such quarterly period being a "Dividend Period"),
commencing on the Dividend Payment Date for the Dividend Period ending on
December 31, 2003. Preferred Dividends declared by the Board of Directors which
are paid in shares of Series B Preferred Stock shall be deemed paid as of April
1, July 1, October 1 or January 1, as the case may be, for all purposes of this
Certificate of Designation even if any such date is not a Business Day.
Preferred Dividends payable on any Dividend Payment Date shall be payable to the
Holders of shares of Series B Preferred Stock as they appear on the stock
register of the Corporation at the close of business on the corresponding
Dividend Payment Record Date. As used herein, the term "Dividend Payment Record
Date" means, with respect to the Preferred Dividends payable on April 1, July 1,
October 1 and January 1, respectively, of each year, the preceding March 15,
June 15, September 15 and

                                       2

<PAGE>

December 15 (unless such day is not a Business Day, in which event such Dividend
Payment Record Date shall be the next succeeding Business Day), or such other
date, not more than 60 days or less than ten days preceding the Dividend Payment
Date, as shall be fixed as the record date by the Board of Directors.

          (b) The dividend rate for Preferred Dividends payable in the amount
specified in and pursuant to clause (x) of Section 2.1(a) with respect to each
full Dividend Period shall be computed by dividing the Annual Dividend Rate by
four. The dividend rate for such Preferred Dividends payable on the initial
Dividend Payment Date after the Issue Date and with respect to any other period
other than a full Dividend Period shall be computed on the basis of a 365-day
year and the actual number of days elapsed in the period with respect to which
such Preferred Dividends are payable; provided, however, that if the initial
Dividend Period with respect to any share of Series B Preferred Stock is shorter
than a full Dividend Period, the dividend rate for a Preferred Dividend payable
on such share on the Dividend Payment Date for such initial Dividend Period
shall be computed at a rate which shall result in a cumulative dividend on such
share for such initial Dividend Period equal to the amount which would have
accrued on or been payable with respect to such share if such share been
outstanding on the first day of such initial Dividend Period. Except as
otherwise provided in this Certificate of Designation, the Series B Preferred
Stock shall not be entitled to any dividends, whether payable in cash, property
or securities, in addition to the Preferred Dividends as provided in this
Section 2.1. No interest or sum of money or other property or securities in lieu
of interest shall be payable in respect of any accumulated and unpaid Preferred
Dividends.

          (c) Accumulated Dividends may be declared and paid on any date,
without reference to any regular Dividend Payment Date or Dividend Payment
Record Date, to Holders of Series B Preferred Stock as they appear on the stock
register of the Corporation at the close of business on the date fixed as the
record date for such payment by the Board of Directors.

          (d) Any Preferred Dividend payable in the amount specified in and
pursuant to clause (x) of Section 2.1(a) may be paid, in the sole discretion of
the Corporation, (i) in cash, (ii) in shares of Series B Preferred Stock or
(iii) in a combination of cash and shares of Series B Preferred Stock. Any
Preferred Dividend payable in the amount specified in and pursuant to clause (y)
of Section 2.1(a) shall be payable in the same form as the dividend referred to
in such clause (y) that has been declared on the Common Stock in the applicable
Dividend Period. Each share of Series B Preferred Stock issued in payment of a
Preferred Dividend shall be valued, solely for purposes of determining the
number of shares of Series B Preferred Stock to be issued as a Preferred
Dividend, at the Liquidation Preference thereof and shall, upon issuance, be
duly and validly issued, fully paid and non-assessable, free of all Liens and
not subject to preemptive rights. If any such Preferred Dividend would result in
the issuance of a fractional share of Series B Preferred Stock, the Corporation,
in its sole discretion, may either pay such fractional share or round such
fractional share up to the nearest whole share of Series B Preferred Stock.
Except to the extent otherwise required by the NASDAQ Marketplace Rules (if
applicable) or the rules,

                                       3

<PAGE>

regulations, interpretations and practices of the Transfer Agent or any
securities exchange on which the Common Stock is traded, or by any other
applicable law or regulation, (i) fractional shares of Series B Preferred Stock
issued in payment of any Preferred Dividend shall be rounded up to the nearest
one-ten thousandth (.0001) of a share, and (ii) any Preferred Dividend payable
in cash shall be rounded up to the nearest cent.

          (e) Payment of a Preferred Dividend in shares of Series B Preferred
Stock to a Holder of the Series B Preferred Stock shall be made by delivering a
certificate or certificates evidencing such shares, which shall be dated as of
the applicable Dividend Payment Date, to such Holder after the applicable
Dividend Payment Date at such Holder's address as it shall appear on the stock
register of the Corporation at the close of business on the Dividend Payment
Record Date for such Dividend Payment Date.

          (f) All Preferred Dividends shall be paid pro rata to the Holders of
the Series B Preferred Stock entitled thereto.

          (g) The Corporation shall give prompt written notice to the Required
Initial Holders of the determination of the Board of Directors with respect to
the value of any dividend declared on the Common Stock referred to in clause (y)
of the first sentence of Section 2.1(a) that is in a form other than cash. If
the Required Initial Holders object to such determination (whether or not in
manifest error) by the Board of Directors of the value of such dividend by
giving the Corporation written notice of such objection within ten Business Days
after their receipt of the Corporation's written notice of such determination,
and such objection is not withdrawn, the Corporation shall retain, at the
Corporation's sole cost, an Independent Appraiser to determine the value of such
dividend. The determination of such Independent Appraiser with respect to the
value of such dividend, or, if the Corporation is not required to retain an
Independent Appraiser pursuant to this Section 2.1(g), but retains an
Independent Appraiser pursuant to the Series A Certificate of Designation to
determine the value of such dividend for purposes of the Series A Certificate of
Designation, the determination of such other Independent Appraiser with respect
to the value of such dividend, shall be final and binding upon the Corporation
and the Holders of the Series B Preferred Stock. Any written notice required to
be given by the Corporation or the Required Initial Holders pursuant to this
Section 2.1(g) shall be given in the manner, and with the effect, provided in
Section 7.5(b).

     2.2  Declaration of Dividends and Distributions

          (a) So long as any shares of the Series B Preferred Stock are
outstanding, (i) no dividends, except as provided in Section 2.2(d) and except
as described in the last sentence of this Section 2.2(a), shall be declared or
paid or set apart for payment and no other distribution shall be declared or
made upon any Parity Securities, nor (ii) shall any Parity Securities be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any Parity
Securities) by the Corporation

                                       4

<PAGE>

or any of its subsidiaries (except by conversion into or exchange for Parity
Securities or Junior Securities), unless (x) in the case of clause (i) above,
all Accumulated Dividends on the outstanding Series B Preferred Stock have been
or contemporaneously are declared and paid or declared and sufficient funds for
the payment thereof are set apart for such payment on or prior to the date of
payment of such dividends or the making of such other distributions on such
Parity Securities and (y) in the case of clause (ii) above, the Corporation
shall contemporaneously redeem, purchase or otherwise acquire for consideration
a pro rata portion of the Series B Preferred Stock then outstanding, which pro
rata portion shall be calculated based on the aggregate redemption, purchase or
other acquisition price which would be payable to the Holders of the Series B
Preferred Stock and the holders of the class or series of Parity Securities
being so redeemed, purchased or otherwise acquired to redeem the total number of
shares of the Series B Preferred Stock and of each such class or series of
Parity Securities then outstanding. Any redemption of Series B Preferred Stock
in accordance with the immediately preceding sentence shall be deemed to be a
redemption at the option of the Corporation and shall be subject to, and
effected in accordance with, Sections 5.1 and 5.3. Notwithstanding the
foregoing, if Accumulated Dividends are not paid in full or sufficient funds for
the payment thereof are not set aside, as aforesaid, the Corporation may declare
and pay or set aside sufficient funds for payment of accrued and unpaid
dividends on Parity Securities for past dividend periods if and to the extent
that, prior thereto or contemporaneously therewith, the Corporation shall
declare and pay or set aside sufficient funds for the payment of Accumulated
Dividends on the outstanding Series B Preferred Stock ratably in proportion to
the respective dollar amounts of all Accumulated Dividends then payable on the
outstanding Series B Preferred Stock and all such accrued and unpaid dividends
then payable on such Parity Securities.

          (b) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends, except as provided in Section 2.2(d), shall be
declared or paid or set apart for payment and no other distribution shall be
declared or made upon Junior Securities, nor shall any Junior Securities be
redeemed, purchased or otherwise acquired (any such dividend, distribution,
redemption, purchase or other acquisition being hereinafter referred to as a
"Junior Securities Distribution") for any consideration (or any moneys be paid
to or made available for a sinking fund for the redemption of any Junior
Securities) by the Corporation or any of its subsidiaries (except by conversion
into or exchange for Junior Securities), unless in each case (i) all Accumulated
Dividends on the outstanding Series B Preferred Stock and all accrued and unpaid
dividends on any outstanding Parity Securities for all past dividend periods
with respect to such Parity Securities shall have been paid or sufficient funds
set aside for the payment thereof and (ii) sufficient funds shall have been paid
or set apart for the payment of Preferred Dividends for the current Dividend
Period with respect to the Series B Preferred Stock and for the payment of any
dividends for the current dividend period with respect to such Parity
Securities; provided that no Junior Securities other than Excluded Junior
Securities shall be redeemed, purchased or otherwise acquired without the prior
written consent of the Required Initial Holders.

                                       5

<PAGE>

          (c) No Preferred Dividends may be declared, made or paid or funds set
apart for the payment of Preferred Dividends upon any outstanding share of
Series B Preferred Stock with respect to any Dividend Period unless all
dividends which are accrued and payable with respect to preceding dividend
periods upon all outstanding Senior Securities shall have been declared and paid
or sufficient funds for the payment thereof shall have been set apart for the
payment of such dividends.

          (d) Notwithstanding anything in this Section 2.2 or any other
provision of this Certificate of Designation to the contrary, the Corporation
shall have the power to (i) declare and pay dividends or make distributions on
Parity Securities which are payable solely in additional Parity Securities or in
Junior Securities and on Junior Securities which are payable solely in
additional Junior Securities and (ii) redeem, purchase or otherwise acquire
Junior Securities in exchange for Junior Securities and Parity Securities in
exchange for Parity Securities or Junior Securities.

3.   Ranking

     3.1  Ranking

     The Series B Preferred Stock shall, with respect to dividend rights and
distributions upon the liquidation, dissolution or winding-up of the
Corporation, rank as follows:

          (a) senior to all classes of Common Stock and each other class of
Capital Stock or series of preferred stock issued by the Corporation, which is
established after the date of this Certificate of Designation, the terms of
which do not expressly provide that such class or series shall rank senior to or
on a parity with the Series B Preferred Stock as to dividend rights and
distributions upon the liquidation, dissolution or winding-up of the Corporation
(each such other class or series, collectively with the Common Stock, referred
to as "Junior Securities");

          (b) on a parity with the Series A Preferred Stock and each class of
Capital Stock (other than classes of Common Stock) or series of preferred stock
issued by the Corporation, which is established after the date of this
Certificate of Designation, the terms of which expressly provide that such class
or series shall rank on a parity with the Series B Preferred Stock as to
dividend rights and distributions upon the liquidation, dissolution or
winding-up of the Corporation (the Series A Preferred Stock and each such other
class or series collectively referred to as "Parity Securities"); and

          (c) junior to each class of Capital Stock (other than classes of
Common Stock) or series of preferred stock issued by the Corporation, which is
established after the date of this Certificate of Designation, the terms of
which expressly provide that such class or series shall rank senior to the
Series B Preferred Stock as to dividend rights and distributions upon the

                                       6

<PAGE>

liquidation, dissolution or winding-up of the Corporation (collectively referred
to as "Senior Securities").

     3.2  Reservation of Rights

     Except as otherwise expressly provided in this Certificate of Designation,
the Corporation shall have the right to amend the Certificate of Incorporation,
file certificates of designation and otherwise authorize and issue any Junior
Securities, Parity Securities or Senior Securities without restriction at any
time and from time to time.

4.   Conversion

     4.1  Conversion Rights

          (a) Each Holder of Series B Preferred Stock shall have the right, at
its option, at any time and from time to time to convert, subject to the terms
and provisions of this Section 4, any or all of such Holder's shares of Series B
Preferred Stock (including fractional shares) into a whole number of fully paid
and non-assessable shares of Common Stock equal to the product of the number of
shares of Series B Preferred Stock being so converted multiplied by the quotient
of (i) the sum of (x) the Liquidation Preference plus (y) any Accumulated
Dividends accrued with respect to such shares plus (z) any Current Period
Dividends with respect to such shares accrued to, and not including, the
Conversion Date (or such other date as is specified in Section 4.1(c)) divided
by (ii) the Conversion Price then in effect, except that with respect to any
share of Series B Preferred Stock which shall be called for redemption pursuant
to Section 5, such conversion right shall terminate at the close of business on
the Business Day immediately prior to the Redemption Date unless the Corporation
shall default in making the payment due under Section 5 upon redemption of such
share, in which case such right shall be exercisable at any time until the close
of business on the Business Day immediately prior to the date on which such
payment is made. If a Holder of Series B Preferred Stock shall exercise its
conversion right pursuant to this Section 4 in connection with an underwritten
offering of securities registered pursuant to the Securities Act of 1933, as
amended, such Holder, at its option, may condition the conversion of the
Holder's Series B Preferred Stock upon the closing with the underwriters of the
sale of securities pursuant to such offering, in which event such Series B
Preferred Stock shall not be deemed to have been converted, and the Persons
entitled to receive the Common Stock upon the conversion of such Series B
Preferred Stock shall not be deemed to have received such Common Stock, until
immediately prior to the closing of such sale of securities. Each share of
Series B Preferred Stock issued after the Issue Date, including, without
limitation, each share of Series B Preferred Stock issued as a Preferred
Dividend pursuant to Section 2, shall, as of the date of issuance of such share,
have the same Conversion Price as each share of Series B Preferred Stock
outstanding immediately prior to such issuance.

                                       7

<PAGE>

          (b) The conversion right of a Holder of Series B Preferred Stock shall
be exercised by the surrender of such Holder's certificates representing shares
of Series B Preferred Stock to be converted, duly endorsed in blank or
accompanied by proper instruments of transfer, to the Corporation or to the
Transfer Agent accompanied by a Conversion Notice.

               (i) Any such conversion shall be deemed to have been consummated
     immediately prior to the close of business on the Conversion Date (or such
     other date and time as is specified in Section 4.1(a) or 4.1(c)), and as of
     such date each Holder converting Series B Preferred Stock shall be deemed
     to be the Holder of record of Common Stock issuable upon conversion of such
     Series B Preferred Stock notwithstanding that the share register of the
     Corporation may then be closed or that certificates representing such
     Common Stock shall not then be actually delivered to such Person.

               (ii) Immediately prior to the close of business on any Conversion
     Date (or such other date and time as is specified in Section 4.1(a) or
     4.1(c)), all rights with respect to the shares of Series B Preferred Stock
     so converted, including the rights, if any, to continue to accrue Preferred
     Dividends and receive notices, shall terminate, except the rights of
     Holders thereof to (A) receive certificates for the number of shares of
     Common Stock into which such shares of Series B Preferred Stock have been
     converted and (B) exercise the rights to which such Holders are entitled as
     Holders of Common Stock.

               (iii) As promptly as reasonably practicable after the Conversion
     Date, the Corporation shall issue and deliver to the Holder of the shares
     of Series B Preferred Stock so converted a certificate or certificates
     representing the number of whole shares of Common Stock into which such
     shares of Series B Preferred Stock shall have been converted.

               (iv) All shares of Common Stock issuable upon conversion of the
     Series B Preferred Stock shall, upon issuance, be duly and validly issued,
     fully paid and non-assessable, free of all Liens and not subject to any
     preemptive rights.

          (c) If the Conversion Date shall not be a Business Day or shall be a
date of record referred to in Section 4.2(d), then such conversion right shall
be deemed exercised on the next Business Day. Upon delivery of a Conversion
Notice to the Corporation by a Holder of Series B Preferred Stock, the right of
the Corporation to redeem the shares of Series B Preferred Stock specified in
such Conversion Notice shall terminate, regardless of whether a Redemption
Notice shall have been given pursuant to Section 5.3.

          (d) Except as provided in Sections 4.1(a), 4.2 and 4.3, the
Corporation shall make no adjustment or payment for, or have any other
obligation with respect to, any

                                       8

<PAGE>

Accumulated Dividends or Current Period Dividends accrued with respect to shares
of Series B Preferred Stock in connection with or following the conversion of
such shares.

          (e) In the case of any conversion of fewer than all the shares of
Series B Preferred Stock evidenced by a certificate, the Corporation, upon such
conversion, shall execute and the Transfer Agent shall authenticate and deliver
to the Holder thereof at such address designated by such Holder, at the expense
of the Corporation, a new certificate or certificates representing the number of
unconverted shares of Series B Preferred Stock. No fractional shares of Common
Stock shall be issued upon the conversion of the Series B Preferred Stock. If
the conversion of any shares of Series B Preferred Stock would result in the
issuance of a fractional share of Common Stock, the Corporation, in its sole
discretion, may (i) round such fractional share up to the nearest whole share of
Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such
fractional share in an amount equal to such fractional share multiplied by the
Closing Price per share of Common Stock on the Business Day next preceding the
Conversion Date.

     4.2  Adjustment of Conversion Price

     In order to prevent dilution of the conversion rights granted under this
Section 4, the Conversion Price shall be subject to adjustment from time to time
pursuant to this Section 4.2. In the event that any adjustment of the Conversion
Price as required herein results in a fraction of a cent, such Conversion Price
shall be rounded up to the nearest cent.

          (a) Except as otherwise provided in Section 4.2(c), if and whenever
during the period beginning on the Issue Date and ending at the close of
business on the second anniversary of the Issue Date the Corporation issues or
sells, or in accordance with Section 4.2(b) is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration per share
(calculated as set forth in Section 4.2(b)) less than the Conversion Price in
effect on the date of issuance or sale (or deemed issuance or sale) of such
Common Stock (a "Dilutive Issuance"), then immediately upon such Dilutive
Issuance, the Conversion Price shall be reduced to a price determined by
multiplying the Conversion Price in effect immediately prior to such Dilutive
Issuance by a fraction, (A) the numerator of which is an amount equal to the sum
of (x) the total number of shares of Common Stock Deemed Outstanding immediately
prior to such Dilutive Issuance plus (y) the quotient of the aggregate
consideration, calculated as set forth in Section 4.2(b), received or receivable
by the Corporation upon such Dilutive Issuance divided by the Conversion Price
in effect immediately prior to such Dilutive Issuance, and (B) the denominator
of which is the total number of shares of Common Stock Deemed Outstanding
immediately after such Dilutive Issuance.

          (b) For purposes of determining the adjusted Conversion Price pursuant
to Section 4.1(a), the following provisions shall be applicable:

                                       9

<PAGE>

               (i) If the Corporation in any manner issues or grants any
     warrants, rights or options, whether or not immediately exercisable, to
     subscribe for or to purchase Common Stock, or other securities convertible
     into or exchangeable for Common Stock ("Convertible Securities") (such
     warrants, rights and options to purchase Common Stock or Convertible
     Securities are hereinafter referred to as "Options"), and the price per
     share for which Common Stock is issuable upon the exercise of such Options
     is less than the Conversion Price in effect on the date of issuance or
     grant of such Options, then the maximum total number of shares of Common
     Stock issuable upon the exercise of all such Options shall, as of the date
     of the issuance or grant of such Options, be deemed to be outstanding and
     to have been issued and sold by the Corporation for such price per share.
     For purposes of the preceding sentence, the "price per share for which
     Common Stock is issuable upon the exercise of such Options" is determined
     by dividing (x) the total amount, if any, received or receivable by the
     Corporation as consideration for the issuance or granting of all such
     Options, plus the minimum aggregate amount of additional consideration, if
     any, payable to the Corporation upon the exercise of all such Options,
     plus, in the case of Convertible Securities issuable upon the exercise of
     such Options, the minimum aggregate amount of additional consideration
     payable upon the conversion or exchange thereof at the time such
     Convertible Securities first become convertible or exchangeable, by (y) the
     maximum total number of shares of Common Stock issuable upon the exercise
     of all such Options (assuming full conversion of Convertible Securities, if
     applicable). No further adjustment to the Conversion Price shall be made
     upon the actual issuance of such Common Stock upon the exercise of such
     Options or upon the conversion or exchange of Convertible Securities
     issuable upon exercise of such Options.

               (ii) If the Corporation in any manner issues or sells any
     Convertible Securities, whether or not immediately convertible (other than
     where such Convertible Securities are issuable upon the exercise of Options
     for which an adjustment of the Conversion Price is made pursuant to Section
     4.2(b)(i)) and the price per share for which Common Stock is issuable upon
     such conversion or exchange is less than the Conversion Price in effect on
     the date of issuance of such Convertible Securities, then the maximum total
     number of shares of Common Stock issuable upon the conversion or exchange
     of all such Convertible Securities shall, as of the date of the issuance of
     such Convertible Securities, be deemed to be outstanding and to have been
     issued and sold by the Corporation for such price per share. For the
     purposes of the preceding sentence, the "price per share for which Common
     Stock is issuable upon such conversion or exchange" is determined by
     dividing (x) the total amount, if any, received or receivable by the
     Corporation as consideration for the issuance or sale of all such
     Convertible Securities, plus the minimum aggregate amount of additional
     consideration, if any, payable to the Corporation upon the conversion or
     exchange thereof at the time such Convertible Securities first become
     convertible or exchangeable, by (y) the maximum total number of shares of
     Common Stock issuable upon the conversion or exchange of all such

                                       10

<PAGE>

     Convertible Securities. No further adjustment of the Conversion Price
     shall be made upon the actual issuance of such Common Stock upon conversion
     or exchange of such Convertible Securities, and if any such issuance or
     sale of such Convertible Securities is made upon exercise of any Options
     for which adjustments of the Conversion Price had been or are to be made
     pursuant to other provisions of this Section 4.2, no further adjustment of
     the Conversion Price shall be made by reason of such issuance or sale.

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

               (iv) If, in any case, the total number of shares of Common Stock
     issuable upon exercise of any Option or upon conversion or exchange of any
     Convertible Securities is not, in fact, issued and the rights to exercise
     such Option or to convert or exchange such Convertible Securities shall
     have expired or terminated, the Conversion Price then in effect shall be
     readjusted to the Conversion Price which would have been in effect at the
     time of such expiration or termination if such Option or Convertible
     Securities, to the extent outstanding immediately prior to such expiration
     or termination (other than in respect of the actual number of shares of
     Common Stock issued upon exercise, conversion or exchange thereof), had
     never been issued.

               (v) If any Common Stock, Options or Convertible Securities are
     issued, granted or sold for cash, the consideration received therefor for
     purposes of this Section 4.2 shall be the amount received by the
     Corporation therefor before deduction of commissions, underwriting
     discounts or allowances or other expenses paid or incurred by the
     Corporation in connection with such issuance, grant or sale. In case any
     Common Stock, Options or Convertible Securities are issued or sold for a
     consideration part or all of which shall be other than cash, the amount of
     the consideration other than cash received by the Corporation shall be the
     fair value of such consideration. If any Common Stock, Options or
     Convertible Securities are issued in connection with any acquisition,
     merger or consolidation in which the Corporation is the surviving
     corporation, the amount of consideration therefor shall be deemed to be the
     fair value of such portion of the net assets and business of the
     non-surviving entity which is attributable to such

                                       11

<PAGE>

     Common Stock, Options or Convertible Securities, as the case may be.
     The fair value of any consideration other than cash shall be determined in
     good faith by the Board of Directors, whose determination, in the absence
     of manifest error, but subject to the following provisions of this Section
     4.2(b)(v), shall be final and binding upon the Corporation and the Holders
     of the Series B Preferred Stock. The Corporation shall give prompt written
     notice to the Required Initial Holders of the determination of the Board of
     Directors with respect to the fair value of such consideration other than
     cash. If the Required Initial Holders object to such determination (whether
     or not in manifest error) by the Board of Directors of the fair value of
     such consideration by giving the Corporation written notice of such
     objection within ten Business Days after their receipt of the Corporation's
     written notice of such determination, and such objection is not withdrawn,
     the Corporation shall retain, at the Corporation's sole cost, an
     Independent Appraiser to determine the fair value of such consideration.
     The determination of such Independent Appraiser with respect to the fair
     value of such consideration, or, if the Corporation is not required to
     retain an Independent Appraiser pursuant to this Section 4.2(b)(v), but
     retains an Independent Appraiser pursuant to the Series A Certificate of
     Designation, the Series A Warrant Agreement or the Series B Warrant
     Agreement to determine the fair value of such consideration for purposes of
     the Series A Certificate of Designation, the Series A Warrant Agreement or
     the Series B Warrant Agreement, as the case may be, the determination of
     such other Independent Appraiser with respect to the fair value of such
     consideration, shall be final and binding upon the Corporation and the
     Holders of the Series B Preferred Stock. Any written notice required to be
     given by the Corporation or the Required Initial Holders pursuant to this
     Section 4.2(b)(v) shall be given in the manner, and with the effect,
     provided in Section 7.5(b).

          (c) No adjustment of the Conversion Price shall be made pursuant to
Section 4.2(a) or 4.2(b) upon the issuance, sale, grant, exercise, conversion,
exchange, reclassification, redemption or other retirement of any of the
following securities on or after the Issue Date:

               (i) the Merger Common Stock;

               (ii) the Series B Preferred Stock, including the Series B
     Preferred Stock issuable as Preferred Dividends pursuant to Section 2 or
     otherwise issuable after the Issue Date pursuant to this Certificate of
     Designation, or any shares of Common Stock or other securities issuable or
     payable upon conversion of the Series B Preferred Stock;

               (iii) any shares of Common Stock, Options or Convertible
     Securities issuable as a dividend or distribution on the Series B Preferred
     Stock in accordance with this Certificate of Designation or any shares of
     Common Stock issuable or payable upon

                                       12

<PAGE>

     exercise of any such Options or upon conversion or exchange of any such
     Convertible Securities;

               (iv) the Warrants or any shares of Common Stock or other
     securities issuable or payable upon exercise or conversion of the Warrants;

               (v) the Series A Preferred Stock, including the Series A
     Preferred Stock issuable as dividends on the Series A Preferred Stock,
     issuable pursuant to the Series A Certificate of Designation as in effect
     on or prior to the Issue Date, or any shares of Common Stock or other
     securities issuable or payable upon conversion of the Series A Preferred
     Stock pursuant to the Series A Certificate of Designation as in effect on
     or prior to the Issue Date;

               (vi) any shares of Common Stock, Options or Convertible
     Securities issuable as a dividend or distribution on the Series A Preferred
     Stock in accordance with the Series A Certificate of Designation as in
     effect on or prior to the Issue Date, or any shares of Common Stock
     issuable or payable upon exercise of any such Options or upon conversion or
     exchange of any such Convertible Securities;

               (vii) any shares of Common Stock, Options or Convertible
     Securities issuable under (A) the Existing Benefit Plan as in effect on the
     Issue Date or (B) the Existing Benefit Plan as amended after the Issue Date
     and any Benefit Plan which becomes effective after the Issue Date, provided
     that any such amendment to the Existing Benefit Plan or the effectiveness
     of any such Benefit Plan is approved by the Board of Directors or by the
     compensation committee or other authorized committee of the Board of
     Directors (in either case with the affirmative vote or consent of the
     Initial Series B Directors or any directors who are thereafter elected by
     the Holders of the Series B Preferred Stock or appointed to the Board of
     Directors pursuant to Section 7.2, in each case whether or not serving on
     any such committee), or any shares of Common Stock issuable or payable upon
     exercise of any such Options or upon conversion or exchange of any such
     Convertible Securities;

               (viii) any shares of Common Stock issued or deemed to have been
     issued in a transaction for which an adjustment of the Conversion Price is
     required pursuant to Section 4.2(d); or

               (ix) any shares of Common Stock, Options or Convertible
     Securities issued in connection with the acquisition of all or part of
     another business or company, whether by merger, consolidation or otherwise,
     which is approved by the Board of Directors or by an authorized committee
     of the Board of Directors (in either case with the affirmative vote or
     consent of the Initial Series B Directors or any directors who are
     thereafter elected by the Holders of the Series B Preferred Stock or
     appointed to the

                                       13

<PAGE>

     Board of Directors pursuant to Section 7.2, in each case whether or not
     serving on any such committee), any shares of Common Stock issuable or
     payable upon exercise of any such Options or upon conversion or exchange of
     any such Convertible Securities, or any shares of Common Stock,
     payment-in-kind securities or other securities issuable as a dividend or
     distribution on any such shares of Common Stock, Options or Convertible
     Securities.

          (d) If a date of record should be fixed at any time, whether by the
Corporation or by operation of law, for the subdivision (by any stock split,
stock dividend, recapitalization, reorganization, reclassification or otherwise)
of the shares of Common Stock acquirable hereunder into a greater number of
shares, or for the determination of the holders of Common Stock entitled to
receive a dividend or other distribution payable in additional shares of Common
Stock, Convertible Securities or Options without payment of any consideration
for the additional shares of Common Stock, Convertible Securities or Options
(including the additional shares of Common Stock or Convertible Securities
issuable upon conversion or exercise of such Options), then, as of such date of
record, the Conversion Price in effect immediately prior to such date of record
shall be proportionately reduced (with the number of shares of Common Stock or
Convertible Securities issuable with respect to Options determined from time to
time in the manner provided for deemed issuances or sales of Common Stock in
Section 4.2(b)). If a date of record should be fixed at any time, whether by the
Corporation or by operation of law, for the combination (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) of the shares
of Common Stock acquirable hereunder into a smaller number of shares of Common
Stock, then, as of such date of record, the Conversion Price in effect
immediately prior to such date of record shall be proportionately increased.

          (e) If an adjustment of the Conversion Price pursuant to Section
4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after
the record date for the applicable Conversion Price Adjustment Event, but before
the occurrence of such Conversion Price Adjustment Event, the Corporation may
elect to defer, until after the occurrence of such Conversion Price Adjustment
Event, (i) issuance to the Holder of any shares of Series B Preferred Stock
converted after such record date and before the occurrence of such Conversion
Price Adjustment Event the additional shares of Common Stock issuable upon such
conversion in excess of the number of shares issuable on the basis of the
Conversion Price in effect immediately prior to such record date and (ii)
payment to such Holder of any amount in cash in lieu of a fractional share of
Common Stock. If the Initial Holders or any of their Affiliates shall be the
beneficial and record owners of shares of Series B Preferred Stock as of the
date of any such election, the Corporation shall give or cause to be given to
such Holders written notice of such election within five Business Days after the
date of such election.

          (f) After the occurrence of any Conversion Price Adjustment Event
requiring adjustment of the Conversion Price, the Corporation shall give written
notice thereof to the Holders of Series B Preferred Stock within ten Business
Days following the occurrence of such

                                       14

<PAGE>

Conversion Price Adjustment Event; provided that if an adjustment of the
Conversion Price pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become
effective as of the record date or after the record date for such Conversion
Price Adjustment Event, but before the occurrence of such Conversion Price
Adjustment Event, the Corporation shall give such written notice within ten
Business Days following such record date or subsequent date. Such notice shall
state the Conversion Price and any change in the number of shares of Common
Stock issuable upon conversion of the Series B Preferred Stock resulting from
such Conversion Price Adjustment Event and shall set forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
Such calculation shall be certified by an authorized officer of the Corporation.
Notice of any Conversion Price Adjustment Event shall be deemed given to the
Holders of Series B Preferred Stock (i) by the Corporation's inclusion of the
information specified in the second sentence of this Section 4.2(f) in the
Corporation's current report or next quarterly or annual report filed with the
Securities and Exchange Commission pursuant to the Exchange Act or (ii) at the
option of the Corporation, by the Corporation's mailing to such Holders of a
written notice containing such information, in each case within the period
specified in the first sentence of this Section 4.2(f).

          (g) Anything in Section 4.2 to the contrary notwithstanding, the
Corporation shall not be required to give effect to any adjustment of the
Conversion Price unless and until the net effect of one or more adjustments
required hereunder (each of which shall be carried forward until counted toward
adjustment), determined as provided therein, shall have resulted in a change of
the Conversion Price by at least 1%, and when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Price by at
least 1%, such change of the Conversion Price shall thereupon be given effect.

     4.3  Fundamental Changes

     Upon the occurrence of a Fundamental Change, there shall be no adjustment
of the Conversion Price and each share of Series B Preferred Stock then
outstanding, without the consent of any Holder of Series B Preferred Stock
(except as set forth in the last sentence of this Section 4.3), and subject to
the Corporation's optional redemption rights pursuant to Section 5.1(b), shall
become convertible only into the kind and amount of shares of Capital Stock or
other securities (of the Corporation or another issuer), cash or other property
receivable upon such Fundamental Change by a Holder of the number of shares of
Common Stock into which such share of Series B Preferred Stock could have been
converted immediately prior to the effective date of such Fundamental Change
assuming such Holder of Common Stock (x) is not a Person (or a Related Entity of
a Person) with which the Corporation consolidated, into which the Corporation
merged or which merged into the Corporation, or to or with which the applicable
sale, conveyance, lease, exchange, transfer or other transaction constituting
such Fundamental Change was effected, and (y) failed to exercise the Holder's
rights of election, if any, as to the kind of amount of Capital Stock or other
securities, cash or other property receivable upon such Fundamental Change. In
any such event, effective provisions shall be made in the certificate or

                                       15

<PAGE>

articles of incorporation of the resulting or surviving corporation, in any
contract of sale, conveyance, lease, exchange or transfer, or otherwise so that
any resulting or surviving corporation or any Transferee in connection with such
Fundamental Change shall expressly assume the obligation to deliver, to the
Holders of the Series B Preferred Stock, such shares of Capital Stock or other
securities, cash or other property (i) upon conversion of the Series B Preferred
Stock, if the Series B Preferred Stock shall remain outstanding following such
Fundamental Change, or (ii) upon the consummation of such Fundamental Change or
thereafter as provided in such effective provisions, if the Series B Preferred
Stock shall not remain outstanding following such Fundamental Change. The
provisions of this Section 4.3 similarly shall apply to successive Fundamental
Changes. The provisions of this Section 4.3 shall be the sole right of Holders
of Series B Preferred Stock in connection with any Fundamental Change, and such
Holders shall have (i) no separate right to consent with respect to, and shall
have no separate vote on, such Fundamental Change (except as expressly required
by applicable law or as provided in Section 7.3(b)) and (ii) no other vote on
such Fundamental Change (except as provided in Section 7.1).

     4.4  Reservation of Common Stock

     The Corporation at all times shall reserve and keep available for issuance
upon the conversion of the Series B Preferred Stock such number of its
authorized but unissued shares of Common Stock as shall from time to time be
sufficient to permit the conversion of all outstanding shares of Series B
Preferred Stock, and shall take all action required to increase the authorized
number of shares of Common Stock if at any time there shall be insufficient
authorized unissued shares of Common Stock to permit such reservation or to
permit the conversion of all outstanding shares of Series B Preferred Stock.

     4.5  Taxes and Other Charges

     The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Series B Preferred Stock shall be made without charge to
the converting Holder of shares of Series B Preferred Stock for such
certificates or for any tax in respect of the issuance or delivery of such
certificates or the securities represented thereby, and such certificates shall
be issued or delivered in the respective names of, or in such names as may be
directed by, the Holders of the shares of Series B Preferred Stock converted;
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the Holder of the
shares of Series B Preferred Stock converted, and the Corporation shall not be
required to issue or deliver such certificate unless or until the Person or
Persons requesting the issuance or delivery thereof shall have paid to the
Corporation the amount of such tax or shall have established to the reasonable
satisfaction of the Corporation that such tax has been paid.

                                       16

<PAGE>

5.   Redemption of Series B Preferred Stock

     5.1  Redemption at Option of the Corporation

          (a) Except as provided in Section 5.1(b), shares of the Series B
Preferred Stock may not be redeemed by the Corporation prior to the third
anniversary of the Issue Date. On or after the third anniversary of the Issue
Date, the Series B Preferred Stock may be redeemed for cash by the Corporation,
at its option, at any time and from time to time, in whole or in part, at a
redemption price per share (the "Optional Redemption Price") equal to the sum of
(x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued
with respect to such share and (z) any Current Period Dividends with respect to
such share accrued to, but not including, the Redemption Date, without interest;
provided that the Corporation shall not exercise its redemption rights pursuant
to this Section 5.1(a) for a number of shares of Series B Preferred Stock having
an aggregate Redemption Price of less than $5 million unless the aggregate
Redemption Price of all shares of Series B Preferred Stock then outstanding is
less than $5 million.

          (b) If a Fundamental Change occurs at any time prior to the third
anniversary of the Issue Date, the Series B Preferred Stock may be redeemed for
cash by the Corporation, at its option, at any time (including concurrently with
the occurrence of such Fundamental Change) and from time to time, in whole or in
part, at a redemption price per share (the "Fundamental Change Redemption
Price") equal to 110% of the sum of (x) the Liquidation Preference per share,
(y) any Accumulated Dividends accrued with respect to such share and (z) any
Current Period Dividends with respect to such share accrued to, but not
including, the Redemption Date, without interest; provided that the Corporation
shall not exercise its redemption rights pursuant to this Section 5.1(b) for a
number of shares of Series B Preferred Stock having an aggregate Redemption
Price of less than $5 million unless the aggregate Redemption Price of all
shares of Series B Preferred Stock then outstanding is less than $5 million.

          (c) If fewer than all the outstanding shares of the Series B Preferred
Stock shall be redeemed pursuant to Section 5.1(a) or 5.1(b), the number of
shares to be redeemed shall be determined by the Board of Directors, consistent
with the provisions of Section 5.1(a) or 5.1(b), and the shares to be redeemed
shall be selected on a pro rata basis (with any fractional shares being rounded
up to the nearest whole share). Notwithstanding the foregoing, consistent with
the provisions of Section 5.1(a) or 5.1(b), the Corporation may redeem all, none
or any amount greater or less than the pro rata portion of shares held by any
Holder of fewer than 100 shares of Series B Preferred Stock as may be determined
by the Board of Directors.

          (d) Notwithstanding anything in this Section 5.1 to the contrary, for
so long as the Initial Holders and their Affiliates are the beneficial and
record owners of at least 50% of the shares of Series B Preferred Stock then
outstanding, the Corporation shall not redeem or exercise its rights to redeem
any shares of Series B Preferred Stock pursuant to this Section 5.1 without

                                       17

<PAGE>

the prior written consent of the Initial Holders and their Affiliates owning
beneficially and of record at least 50% of the shares of Series B Preferred
Stock then outstanding unless the Corporation concurrently redeems, purchases or
otherwise acquires a pro rata portion of each other class or series of Parity
Securities outstanding at such time, which pro rata portion shall be calculated
based on the aggregate redemption, purchase or other acquisition price which
would be payable to the Holders of the Series B Preferred Stock and the holders
of each such class or series of Parity Securities to redeem the total number of
shares of the Series B Preferred Stock and each such class or series of Parity
Securities then outstanding.

     5.2  Mandatory Redemption

          (a) Subject to the second sentence of this Section 5.2(a), the
Corporation shall redeem for cash all outstanding shares of Series B Preferred
Stock, if any, on October 29, 2012, at a redemption price per share (the
"Mandatory Redemption Price") equal to the sum of (x) the Liquidation Preference
per share, (y) any Accumulated Dividends accrued with respect to such share and
(z) any Current Period Dividends with respect to such share accrued to, but not
including, the Redemption Date, without interest. Notwithstanding anything in
this Section 5.2. to the contrary, for so long as the Initial Holders and their
Affiliates are the beneficial and record owners of at least 50% of the shares of
Series B Preferred Stock then outstanding, the Corporation shall not redeem any
shares of Series B Preferred Stock pursuant to this Section 5.2 without the
prior written consent of the Initial Holders and their Affiliates owning
beneficially and of record at least 50% of the shares of Series B Preferred
Stock then outstanding unless the Corporation concurrently redeems, purchases or
otherwise acquires a pro rata portion of each other class or series of Parity
Securities outstanding at such time, which pro rata portion shall be calculated
based on the aggregate redemption, purchase or other acquisition price which
would be payable to the Holders of the Series B Preferred Stock and the holders
of each such class or series of Parity Securities to redeem the total number of
shares of the Series B Preferred Stock and each such class or series of Parity
Securities then outstanding.

          (b) If the funds of the Corporation legally available for redemption
of shares on the Redemption Date are insufficient to redeem on such date all
outstanding shares of the Series A Preferred Stock pursuant to the Series A
Certificate of Designation and the Series B Preferred Stock pursuant to this
Section 5.2, the Corporation shall use those funds that are legally available
therefor to redeem the maximum possible number of such shares of Series A
Preferred Stock and Series B Preferred Stock ratably among the Holders of such
shares such that each Holder of Series A Preferred Stock and each Holder of
Series B Preferred Stock shall be entitled to receive such Holder's pro rata
share of such legally available funds based on the aggregate redemption price
which would be payable to the Holders of the Series A Preferred Stock pursuant
to the Series A Certificate of Designation and to the Holders of the Series B
Preferred Stock pursuant to this Section 5.2 to redeem the total number of
shares of the Series A Preferred Stock and the Series B Preferred Stock then
outstanding. The shares of Series B Preferred Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided in

                                       18

<PAGE>

this Certificate of Designation. At any time and from time to time after October
29, 2012 when additional funds of the Corporation are legally available for the
redemption of shares of Series A Preferred Stock and Series B Preferred Stock,
the Corporation shall promptly use such funds to redeem the balance of the
shares of Series A Preferred Stock and Series B Preferred Stock, on a pro rata
basis as aforesaid, that the Corporation is obligated to redeem pursuant to the
Series A Certificate of Designation or this Section 5.2, as the case may be, but
that it has not redeemed. If and for so long as any mandatory redemption
obligation with respect to shares of Series B Preferred Stock under this Section
5.2 has not been discharged, the Corporation shall not, and shall cause its
subsidiaries not to, (i) redeem, purchase or otherwise acquire for any
consideration any Parity Securities or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity
Securities, except as provided in this Section 5.2(b), or (ii) declare or make
any Junior Securities Distribution (including, without limitation, any
redemption, purchase or other acquisition of any Junior Securities for any
consideration) or discharge any mandatory or optional redemption, sinking fund
or other similar obligation in respect of any Junior Securities.

     5.3  Redemption Procedures

          (a) If the Corporation shall redeem shares of the Series B Preferred
Stock pursuant to Section 5.1 or 5.2:

               (i) In the case of a redemption pursuant to Section 5.1(a) or
     5.2(a), the Corporation shall send a Redemption Notice to the Holders of
     Series B Preferred Stock not less than 30 days nor more than 60 days prior
     to the Redemption Date, and in the case of a redemption pursuant to Section
     5.1(b) in connection with a Fundamental Change, not less than 15 days prior
     to such Fundamental Change. Neither the failure to give a Redemption Notice
     nor any defect therein shall affect the validity of the giving of notice
     for the redemption of any share of Series B Preferred Stock to be redeemed,
     except as to any Holder to whom the Corporation has failed to give such
     Redemption Notice or except as to any Holder whose Redemption Notice was
     materially defective.

               (ii) On or before any Redemption Date, each Holder of shares of
     Series B Preferred Stock to be redeemed shall surrender the certificate or
     certificates representing such shares of Series B Preferred Stock (properly
     endorsed or assigned, or transferred, if the Corporation shall so require
     and the Redemption Notice shall so state) to the Corporation or the
     Redemption Agent (if appointed) in the manner and at the place designated
     in the Redemption Notice.

               (iii) On the Redemption Date, the Corporation or the Redemption
     Agent, as applicable, shall pay the full Redemption Price in cash to the
     Holder whose name appears on such certificate or certificates as the owner
     thereof.

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<PAGE>

               (iv) The shares of Series B Preferred Stock represented by each
     certificate to be surrendered shall no longer be deemed outstanding and
     shall be automatically (and without any further action of the Corporation
     or the Holder) canceled as of the Redemption Date (unless the Corporation
     shall be in default of the payment of the Redemption Price) whether or not
     certificates for such shares are returned to the Corporation, and shall be
     retired as provided in Section 9.1.

               (v) If fewer than all the shares of Series B Preferred Stock
     represented by any certificate are to be redeemed, a new certificate shall
     be issued representing the unredeemed shares, without cost to the Holder
     thereof. Upon such redemption, the Corporation shall execute and the
     Transfer Agent shall authenticate and deliver such new certificate to the
     Holder thereof at such address designated by such Holder. If any unredeemed
     share would be a fractional share, the Corporation, in its sole discretion,
     may either issue such fractional share to such Holder or in lieu thereof
     pay to such Holder a cash adjustment for such fractional share based on the
     Redemption Price.

          (b) If a Redemption Notice shall have been given as provided in
Section 5.3(a), and except as otherwise expressly provided in this Certificate
of Designation, all rights (excluding the right to receive the Redemption Price)
of the Holders of shares of Series B Preferred Stock so called for redemption
shall cease either (i) from and after the Redemption Date (unless the
Corporation shall default in the payment of the Redemption Price, in which case
such rights shall not terminate at the Redemption Date) or (ii) if the
Corporation shall so elect and state in the Redemption Notice, from and after
the time and date (which date shall be the Redemption Date or an earlier date
not less than 15 days after the date of mailing of the Redemption Notice) on
which the Corporation shall irrevocably deposit in trust for the Holders of the
shares to be redeemed with a designated Redemption Agent as paying agent funds
in an amount sufficient to pay the Redemption Price at the office of such paying
agent on the Redemption Date. Any funds so deposited with such Redemption Agent
that shall not be required for such redemption shall be returned to the
Corporation forthwith. Subject to applicable escheat laws, any funds so set
aside by the Corporation and unclaimed at the end of one year after the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion the Holders of the shares of Series B Preferred Stock so called
for redemption shall look only to the general funds of the Corporation for the
payment of the Redemption Price, without interest. Any interest accrued on funds
held by the Redemption Agent shall be paid to the Corporation from time to time.

          (c) Except as provided in Sections 5.1(a), 5.1(b) and 5.2(a), the
Corporation shall make no adjustment or payment for, or have any other
obligation with respect to, any Accumulated Dividends or Current Period
Dividends accrued with respect to shares of Series B Preferred Stock in
connection with or following the redemption of such shares.

                                       20

<PAGE>

          (d) No shares of Series B Preferred Stock may be redeemed by the
Corporation except with funds legally available for the payment of the
Redemption Price.

          (e) As provided in Section 4.1(a), and notwithstanding anything in
this Certificate of Designation to the contrary, each Holder of shares of Series
B Preferred Stock which shall be called for redemption pursuant to this Section
5 shall have the right, which shall be exercisable at any time up to the close
of business on the Business Day immediately prior to the Redemption Date, to
convert all or any portion of such shares into shares of Common Stock pursuant
to Section 4, unless the Corporation shall default in making the payment due
under this Section 5 upon redemption of such shares, in which case such right
shall be exercisable at any time until the close of business on the Business Day
immediately prior to the date on which such payment is made.

6.   Liquidation Preference

     6.1  Liquidation Preference

     Upon the occurrence of any Liquidation Event, after payment or distribution
of the assets of the Corporation (whether capital or surplus) shall be made to
or set apart for the holders of Senior Securities, and before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Junior Securities, the Holders of the
Series B Preferred Stock shall be entitled to receive an amount per share of
Series B Preferred Stock in cash equal to the greater of (x) the sum of (A) the
Liquidation Preference per share, (B) any Accumulated Dividends accrued with
respect to such share and (C) any Current Period Dividends with respect to such
share accrued to, but not including, the date of such Liquidation Event or (y)
the aggregate amount that would have been received with respect to the shares of
Common Stock such Holders would have received, assuming the shares of Series B
Preferred Stock had been converted into Common Stock pursuant to Section 4
immediately prior to the date of such Liquidation Event.

     6.2  Distribution on Parity Securities

     If, upon any Liquidation Event, the amounts payable with respect to the
Series B Preferred Stock pursuant to Section 6.1 and such amounts payable on all
other Parity Securities are not paid in full, the Holders of the Series B
Preferred Stock and the holders of such Parity Securities shall share pro rata
in the assets of the Corporation available for distribution in proportion to the
full distribution thereof to which each is entitled.

     6.3  Distribution of Remaining Assets

     After payment of the full amount to which Holders of the Series B Preferred
Stock are entitled pursuant to Section 6.1 upon any Liquidation Event, Holders
of the Series B Preferred Stock shall have no right or claim to any of the
remaining assets of the Corporation.

                                       21

<PAGE>

     6.4  Effect of Certain Transactions

     Neither the sale, conveyance, lease, exchange or transfer of all or
substantially all of the assets of the Corporation (for Capital Stock or other
securities, cash or other consideration) nor the consolidation or merger of the
Corporation with or into one or more entities shall be deemed to be a
Liquidation Event for purposes of this Certificate of Designation.

7.   Voting Rights

     7.1  "As Converted" Voting Rights

     The voting rights and related notice rights of Holders of the Series B
Preferred Stock set forth in this Section 7.1 are subject to, and qualified to
the extent provided by, Section 7.2, applicable law or regulation, and the
NASDAQ Marketplace Rules (if applicable) or the rules, regulations,
interpretations and practices of any securities exchange on which the Common
Stock is traded, as determined by the Board of Directors. The Holders of the
Series B Preferred Stock shall be entitled to vote on all matters on which the
Holders of Common Stock shall be entitled to vote, in the same manner and with
the same effect as the Holders of Common Stock, voting together with the Holders
of Common Stock as a single class. For this purpose, the Holders of the Series B
Preferred Stock shall be given notice of any meeting of stockholders of which
the Holders of Common Stock are given notice in accordance with the bylaws of
the Corporation. With respect to any matter on which the Holders of the Series B
Preferred Stock shall be entitled to vote together with the Holders of Common
Stock as a single class as provided in this Section 7.1, each Holder of the
Series B Preferred Stock shall have a number of votes per share of the Series B
Preferred Stock held of record by such Holder (on the record date for the
meeting of stockholders, if such matter is subject to a vote at a meeting of
stockholders, or on the effective date of any consent, if such matter is subject
to a consent of the stockholders without a meeting of stockholders), equal to
the number of shares of Common Stock into which such share of Series B Preferred
Stock is convertible pursuant to Section 4 immediately after the close of
business on such record date or effective date, as the case may be.

     7.2  Election of Directors

          (a) From the Issue Date until the first record date for determining
stockholders entitled to vote upon or consent to the election of directors to
the Board of Directors on which less than 66 2/3% of the shares of Series B
Preferred Stock issued by the Corporation (whether issued by the Corporation
pursuant to the Merger Agreement or issued as a Preferred Dividend and subject
to adjustment to reflect any subdivision or combination of the Corporation's
outstanding Capital Stock) remain outstanding, the Holders of the Series B
Preferred Stock, voting as a separate class, exclusive of all other
stockholders, shall be entitled to elect two directors to serve on the Board of
Directors. From the first record date for determining stockholders entitled to
vote upon or consent to the election of directors to the Board of Directors

                                       22

<PAGE>

on which less than 66 2/3%, but more than 33 1/3%, of the shares of Series B
Preferred Stock issued by the Corporation (whether issued by the Corporation
pursuant to the Merger Agreement or issued as a Preferred Dividend and subject
to adjustment to reflect any subdivision or combination of the Corporation's
outstanding Capital Stock) remain outstanding, the Holders of the Series B
Preferred Stock, voting as a separate class, exclusive of all other
stockholders, shall be entitled to elect one director to serve on the Board of
Directors. From and after the first record date for determining stockholders
entitled to vote upon or consent to the election of directors to the Board of
Directors on which 33 1/3% or fewer shares of Series B Preferred Stock issued by
the Corporation (whether sold by the Corporation or issued as a Preferred
Dividend and subject to adjustment to reflect any subdivision or combination of
the Corporation's outstanding Capital Stock) remain outstanding (the "Single
Class Voting Date"), the Holders of the Series B Preferred Stock shall be
entitled to vote on the election of directors, in the same manner and with the
same effect as the Holders of Common Stock, voting together with the Holders of
Common Stock as a single class in the manner provided in Section 7.1. Except as
provided in this Section 7.2(a), the Holders of the Series B Preferred Stock
shall not be entitled to vote in the election of any directors to serve on the
Board of Directors.

          (b) At any meeting held prior to the Single Class Voting Date at which
the stockholders of the Corporation are entitled to vote upon the election of
directors, the presence in person or by proxy of the Holders of shares
representing more than 50% of the voting power of the shares of Series B
Preferred Stock outstanding on the record date for such meeting shall be
required to constitute a quorum of such class for the election of directors by
such class.

          (c) Any Initial Series B Director and any director who is thereafter
elected to the Board of Directors by the Holders of the Series B Preferred Stock
prior to the Single Class Voting Date shall hold office until the earlier of (i)
the time which is immediately after the next meeting of stockholders at which
directors elected by the Holders of the Series B Preferred Stock, voting as a
separate class, exclusive of all other stockholders, are elected and (ii) such
time as the Holders of the Series B Preferred Stock shall no longer be entitled
hereunder, voting as a separate class, exclusive of all other stockholders, to
elect directors to serve on the Board of Directors, and any vacancy in respect
of any Initial Series B Director or any such other director that is filled prior
to the Single Class Voting Date shall be filled only by vote of the remaining
Initial Series B Director or the remaining director so elected by Holders of the
Series B Preferred Stock, or if there shall be no such remaining Initial Series
B Director or other director, by consent of the Holders of Series B Preferred
Stock, or at a special meeting of the Holders of the Series B Preferred Stock
duly called, or, if no such special meeting is called, at the next annual
meeting of stockholders. Except as otherwise and to the extent provided by
applicable law or regulation or by the NASDAQ Marketplace Rules (if applicable)
or the rules, regulations, interpretations and practices of any securities
exchange on which the Common Stock is traded, in connection with any consent of
Holders of Series B Preferred Stock, the consent thereby of Holders of shares
representing more than 50% of the voting power of the then outstanding shares

                                       23

<PAGE>

of Series B Preferred Stock shall be sufficient to approve or take action upon
the matters contained therein.

          (d) Prior to the Single Class Voting Date, a proper officer of the
Corporation may call a special meeting of the Holders of shares of Series B
Preferred Stock and, upon the written request of Holders of shares representing
at least 25% of the voting power of the then outstanding shares of Series B
Preferred Stock addressed and delivered to the Secretary of the Corporation,
shall call a special meeting of the Holders of shares of Series B Preferred
Stock or solicit a consent of such Holders. Such consent shall be sent by the
Corporation to the Holders of shares of Series B Preferred Stock entitled to
vote on the election of directors to the Board of Directors not later than 20
Business Days (or two Business Days, if the Initial Holders and their Affiliates
are the beneficial and record owners of at least 50% of the shares of Series B
Preferred Stock then outstanding) following such written request. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation, or, if none, at a place designated by the Board
of Directors. Notwithstanding the provisions of this Section 7.2(d), if the
Initial Holders and their Affiliates are not the beneficial and record owners of
at least 50% of the shares of Series B Preferred Stock then outstanding, no
consent shall be solicited and no such special meeting shall be called during a
period within the 60 days immediately preceding the date fixed for the next
annual meeting of stockholders, in which such case the election of directors
pursuant to Section 7.2 shall be held at such annual meeting of stockholders.
The provisions of the Corporation's bylaws regarding nominations of directors by
stockholders of the Corporation shall not apply to nominations of directors by
Holders of Series B Preferred Stock pursuant to this Section 7.2.

          (e) Any Initial Series B Director or any director who is thereafter
elected to the Board of Directors by the Holders of the Series B Preferred Stock
or appointed by any Initial Series B Director or any director or directors
elected by the Holders of Series B Preferred Stock, in each case prior to the
Single Class Voting Date, may be removed during such director's term of office,
either with or without cause, prior to the Single Class Voting Date by the
affirmative vote of Holders of shares representing more than 50% of the voting
power of the then outstanding shares of Series B Preferred Stock entitled to
vote, given either at a meeting of such Holders duly called for that purpose or
pursuant to a consent of such Holders without a meeting, and any vacancy created
by such removal that is filled prior to the Single Class Voting Date may be
filled only in the manner provided in this Section 7.2.

     7.3  Approval of Certain Matters

          (a) So long as any shares of Series B Preferred Stock are outstanding,
the Corporation shall not (i) amend, alter or repeal any provision of the
Certificate of Incorporation or this Certificate of Designation to alter or
change the powers, preferences or special rights of shares of Series B Preferred
Stock (whether by merger, consolidation, business combination,

                                       24

<PAGE>

other extraordinary corporate transaction or otherwise) so as to affect them
adversely, or, (ii) other than as provided in Section 2.2(a), 4.1, 4.2, 4.3, 5
or 6.1, change the Series B Preferred Stock into any other securities, cash or
other property, in the case of each of clauses (i) and (ii), without the
affirmative vote or consent of Holders of the shares representing more than 50%
of the voting power of the then outstanding shares of Series B Preferred Stock,
voting or consenting, as the case may be, as one class, given in person or by
proxy, either in writing or by means of electronic transmission, by resolutions
adopted by consent or at an annual meeting of stockholders or at a special
meeting of Holders of Series B Preferred Stock called for such purpose; provided
that any such amendment of this Certificate of Designation that changes any
dividend or other amount payable on, or the liquidation preference of, the
Series B Preferred Stock shall require the affirmative vote or consent of
Holders of the shares representing at least 66 2/3% of the voting power of the
then outstanding shares of Series B Preferred Stock, voting or consenting, as
the case may be, as one class, given in person or by proxy, either in writing or
by means of electronic transmission, by resolutions adopted by consent or at an
annual meeting of stockholders or at a special meeting of Holders of Series B
Preferred Stock called for such purpose.

          (b) So long as any shares of Series B Preferred Stock are outstanding,
the Corporation shall not (i) authorize or issue, or increase the authorized
amount of, any Parity Securities, including any additional Series B Preferred
Stock (other than (A) shares of Series A Preferred Stock or other securities
issuable or payable as dividends on the Series A Preferred Stock, in each case
as provided in the Series A Certificate of Designation as in effect on the Issue
Date, and (B) shares of Series B Preferred Stock or other securities issuable or
payable as Preferred Dividends on the Series B Preferred Stock or shares of
Series B Preferred Stock otherwise issuable after the Issue Date, in each case
as provided in the Merger Agreement and this Certificate of Designation), or any
Senior Securities, or any security convertible into or exchangeable for any such
Parity or Senior Securities, or (ii) so long as the Initial Holders and their
Affiliates are the beneficial and record owners of at least 50% of the shares of
Series B Preferred Stock then outstanding, enter into or consummate a
Fundamental Change or a Qualifying Asset Sale prior to the fifteenth-month
anniversary of the Issue Date, in the case of each of clauses (i) and (ii),
without the affirmative vote or consent of Holders of the shares representing
more than 50% of the voting power of the then outstanding shares of Series B
Preferred Stock, voting or consenting, as the case may be, as one class, given
in person or by proxy, either in writing or by means of electronic transmission,
by resolutions adopted by consent or at an annual meeting of stockholders or at
a special meeting of Holders of Series B Preferred Stock called for such
purpose.

          (c) The consent or votes required in Sections 7.3(a) and 7.3(b) shall
be in addition to any consent or approval of Holders of the Series B Preferred
Stock which may be required by law or pursuant to any provision of the
Certificate of Incorporation.

     7.4  Other Voting Rights

                                       25

<PAGE>

     In exercising the voting rights set forth in this Section 7, each share of
Series B Preferred Stock shall have one vote per share except as otherwise
expressly provided for in this Certificate of Designation. Except as otherwise
required by applicable law or as set forth in this Certificate of Designation,
the shares of Series B Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers, and the vote
or consent of the holders of the Series B Preferred Stock shall not be required
for the taking of any corporate action.

     7.5  Notices; Notices of Record Date

          (a) So long as the Initial Holders and their Affiliates are the
beneficial and record owners of at least 50% of the shares of Series B Preferred
Stock then outstanding, in the event of:

               (i) any taking by the Corporation of a record of the holders of
     any class of securities of the Corporation for the purpose of determining
     the holders thereof who are entitled to receive any dividend or other
     distribution, or any right to subscribe for, purchase or otherwise acquire
     any shares of Capital Stock of any class or any other securities or
     property, or to receive any other right, other than, in each case, (A) a
     regular quarterly or other periodic dividend publicly announced by the
     Corporation or provided for in the instrument governing such class of
     securities (including, without limitation, dividends payable on the Series
     A Preferred Stock pursuant to the Series A Certificate of Designation as in
     effect on the Issue Date and Preferred Dividends payable on the Series B
     Preferred Stock pursuant to Section 2), (B) any other issuance of Series B
     Preferred Stock after the Issue Date pursuant to this Certificate of
     Designation or (C) a regular quarterly or other periodic payment of
     interest in cash or securities on any issue of the Corporation's
     indebtedness in accordance with the instrument governing such indebtedness,
     or

               (ii) the proposed filing of a certificate of dissolution in
     connection with any Liquidation Event,

then and in each such event the Corporation shall give or cause to be given to
each Holder of the Series B Preferred Stock a written notice specifying (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or right
or the date on which the filing of such certificate of dissolution is expected
to be effected, as the case may be, and (ii) the date, if any, that is to be
fixed, on which the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such event. Such notice shall
be given at least 20 days prior to the date specified in such notice on which
such event, action or record is to be taken or on which the filing of such
certificate of dissolution is expected to be effected. Any failure by the
Corporation to provide any such notice

                                       26

<PAGE>

required by this Section 7.5(a) shall not affect the validity of any event,
action or record required to be specified in such notice.

          (b) Without limiting the generality of Section 7.5(a), any notice
required by Section 7.5(a) to be given to the Holders of shares of Series B
Preferred Stock shall be deemed delivered (i) upon personal delivery to the
Holder to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient and, if not, then on the next
Business Day, (iii) five days after having been deposited into the U.S. mails or
(iv) one day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All notices
required by Section 7.5(a) shall be sent to each Holder at such Holder's address
appearing on the stock register of the Corporation.

     7.6  Amendment of Certificate of Designation

     So long as any shares of Series B Preferred Stock are outstanding and held
by the Required Initial Holders, in addition to any vote required by law or the
Certificate of Incorporation (including this Certificate of Designation), the
affirmative vote or consent of Holders of the shares representing more than 50%
of the voting power of the then outstanding shares of Series B Preferred Stock,
voting or consenting, as the case may be, as one class, given in person or by
proxy, either in writing or by means of electronic transmission, by resolutions
adopted by consent or at an annual meeting of stockholders or at a special
meeting of Holders of Series B Preferred Stock called for such purpose shall be
required to amend the Series A Certificate of Designation; provided that such
vote or consent shall not be required with respect to any proposed amendment of
the Series A Certificate of Designation (the "Proposed Series A Amendment") if
the Corporation shall previously have complied with the following provisions of
this Section 7.6 with respect to such Proposed Series A Amendment. If shares of
Series B Preferred Stock are held by the Required Initial Holders and the Board
of Directors shall determine that the Corporation will not seek the affirmative
vote or consent of the Holders of the Series B Preferred Stock with respect to a
Proposed Series A Amendment pursuant to this Section 7.6 prior to submitting
such Proposed Series A Amendment to the Holders of the Series A Preferred Stock
for approval, the Corporation shall give written notice of such Proposed Series
A Amendment (which shall include the text thereof) to the Required Initial
Holders. If, within ten Business Days after the Corporation shall have given
such written notice to the Required Initial Holders, the Required Initial
Holders shall give written notice to the Corporation that the Required Initial
Holders seek to have this Certificate of Designation amended in a manner
substantially similar to such Proposed Series A Amendment, the Board of
Directors, in addition to approving such Proposed Series A Amendment, shall
approve, declare advisable and submit to the Holders of the Series B Preferred
Stock for approval such a substantially similar amendment to this Certificate of
Designation. If, within the period of ten Business Days described in the
immediately preceding sentence, the Required Initial Holders do not provide such
written notice to the Corporation that the Required Initial Holders seek to have
this Certificate of Designation so amended, or, if the Required Initial Holders
do so notify the Corporation, but the Holders of

                                       27

<PAGE>

the Series B Preferred Stock do not approve or consent to such a substantially
similar amendment to this Certificate of Designation, the Corporation shall be
deemed to have complied with this Section 7.6 with respect to such Proposed
Series A Amendment and the Holders of the Series B Preferred Stock shall have no
right to vote upon or consent to such Proposed Series A Amendment pursuant to
this Section 7.6. Any substantially similar amendment to this Certificate of
Designation approved or consented to pursuant to this Section 7.6 shall become
effective as nearly as practicable concurrently with, or immediately prior to,
the effectiveness of the Proposed Series A Amendment. In no event shall the
failure of the Required Initial Holders to seek to have this Certificate of
Designation amended in a manner substantially similar to any Proposed Series A
Amendment affect the applicability of this Section 7.6 with respect to any
subsequent Proposed Series A Amendment. Any written notice required to be given
by the Corporation or the Required Initial Holders pursuant to this Section 7.6
shall be given in the manner, and with the effect, provided in Section 7.5(b).

8.   Certain Definitions

     Set forth below are the meanings assigned to certain defined terms used in
this Certificate of Designation.

     8.1 "Accumulated Dividends," with respect to a share of Series B Preferred
Stock, on any date of determination, means all Preferred Dividends that have
accrued with respect of such share pursuant to Section 2.1(a) as of the Dividend
Payment Date on or immediately preceding such date of determination, but which
have not been paid. The Accumulated Dividends accrued with respect to any share
of Series B Preferred Stock shall be reduced by the amount of any Preferred
Dividends specified above which are actually paid with respect of such share as
provided in Section 2.1(c).

     8.2 "Affiliate" has the same meaning as in Rule 12b-2 under the Exchange
Act.

     8.3 "Annual Dividend Rate" has the meaning specified in Section 2.1(a).

     8.4 "Beneficial owner" or "beneficially own" has the same meaning as in
Rule 13d-3 under the Exchange Act.

     8.5 "Benefit Plan" means any stock option, restricted stock, stock
incentive, deferred compensation, profit sharing, defined benefit or other
benefit plan of the Corporation or any of its subsidiaries.

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

     8.7 "Business Day" means any day other than a Saturday, a Sunday or any day
on which banking institutions in The City of New York or the State of Georgia or
at a place payment is to be received are authorized by law, regulation or
executive order to remain closed.

                                       28

<PAGE>

If a payment date is not a Business Day at a place of payment, payment may be
made at that place on the next succeeding Business Day, and no interest shall
accrue for the intervening period.

     8.8 "Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership or membership interests, whether common or preferred.

     8.9 "Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Corporation, as amended from time to time.

     8.10 "Closing Price" means, with respect to the Common Stock, on any date,
(i) the last sales price on the NASDAQ National Market, the NASDAQ SmallCap
Market, the OTC Bulletin Board or the NASDAQ Bulletin Board Exchange or the
principal securities exchange or other securities market on which the Common
Stock is then traded, or (ii) if the Common Stock is so traded, but not so
reported, the average of the last bid and ask prices, as those prices are
reported on the NASDAQ National Market, the NASDAQ SmallCap Market, the OTC
Bulletin Board or the NASDAQ Bulletin Board Exchange or the principal securities
exchange or other securities market on which the Common Stock is then traded, or
(iii) if the Common Stock is not listed or authorized for trading on the NASDAQ
National Market, the NASDAQ SmallCap Market, the OTC Bulletin Board or the
NASDAQ Bulletin Board Exchange or any securities exchange or comparable
securities market, the average of the closing bid and ask prices as furnished by
two members of the National Association of Securities Dealers, Inc. selected
from time to time by the Board of Directors for that purpose. If the Common
Stock is not listed and traded in any manner such that the prices and quotations
referred to above are available for the period required hereunder, the Closing
Price per share shall be deemed to be the fair value per share of Common Stock
as determined by the Board of Directors.

     8.11 "Common Stock" means the Corporation's authorized Common Stock.

     8.12 "Common Stock Deemed Outstanding" means, on any date of determination,
the number of shares of Common Stock actually outstanding, plus the maximum
total number of shares of Common Stock issuable as of such date of determination
upon the exercise of any then outstanding Options (including, without
limitation, the Warrants and any Options outstanding under the Existing Benefit
Plan or any other Benefit Plan) or issuable as of such date of determination
upon conversion or exchange of any then outstanding Convertible Securities
(including, without limitation, the Series A Preferred Stock and the Series B
Preferred Stock), whether or not such Options or Convertible Securities are
actually exercisable, convertible or exchangeable at such time, without
duplication.

     8.13 "Conversion Date" means the date the Corporation or the Transfer Agent
receives the Conversion Notice.

                                       29

<PAGE>

     8.14 "Conversion Notice" means a written notice given by a Holder of Series
B Preferred Stock to the Corporation pursuant to Section 4.1(b) stating that
such Holder elects to convert all or a portion of such Holder's shares of Series
B Preferred Stock represented by certificates delivered to the Corporation or
the Transfer Agent contemporaneously with such written notice. The Conversion
Notice shall be in substantially the form of Exhibit A hereto.

     8.15 "Conversion Price" means $3.00 per share of Common Stock, subject to
adjustment as provided in Section 4.2.

     8.16 "Conversion Price Adjustment Event" means any event specified in
Section 4.2 resulting in an adjustment of the Conversion Price.

     8.17 "Convertible Securities" has the meaning specified in Section 4.2(b).

     8.18 "Corporation" means ITC/\DeltaCom, Inc., a Delaware corporation
organized and existing under the General Corporation Law of the State of
Delaware.

     8.19 "Current Period Dividends," with respect to a share of Series B
Preferred Stock, on any date of determination, means all Preferred Dividends
that have accrued with respect of such share pursuant to Section 2 since the
Dividend Payment Date immediately preceding such date of determination, but
which have not been paid.

     8.20 "Dilutive Issuance" has the meaning specified in Section 4.2(a).

     8.21 "Dividend Payment Date" has the meaning specified in Section 2.1(a).

     8.22 "Dividend Payment Record Date" has the meaning specified in Section
2.1(a).

     8.23 "Dividend Period" has the meaning specified in Section 2.1(a).

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

     8.25 "Excluded Junior Securities" means any Junior Securities redeemed,
purchased or otherwise acquired pursuant to (i) any agreement by the Corporation
to pay cash in lieu of fractional shares (A) in connection with a business
combination or other transaction approved by the Board of Directors, (B)
pursuant to the Series A Certificate of Designation as in effect on or prior to
the Issue Date or this Certificate of Designation or (C) pursuant to the Series
A Warrant Agreement or the Series B Warrant Agreement, (ii) any Benefit Plan
under which, in accordance with clause (vii) of Section 4.2(c), issuances or
deemed issuances of Common Stock, Options or Convertible Securities shall not
result in adjustments of the Conversion Price and (iii) any Transaction Document
or any other agreement or document to which the Corporation or any subsidiary
thereof is a party on the Issue Date and which is listed on a schedule to the
Merger Agreement, as any such other agreement or document is in effect on the
Issue Date.

                                       30

<PAGE>

     8.26 "Existing Benefit Plan" means the ITC/\DeltaCom, Inc. Stock Incentive
Plan.

     8.27 "Fundamental Change" means any transaction or event, including,
without limitation, any merger, consolidation, sale, conveyance, lease, exchange
or transfer of assets, tender or exchange offer, reclassification (including any
such reclassification in connection with a consolidation or merger in which the
Corporation is the surviving corporation), capital reorganization, compulsory
share exchange or liquidation, in each case in which all or substantially all
outstanding shares of the Common Stock, or all or substantially all of the
assets or the property of the Corporation, are converted into or exchanged for
Capital Stock (of the Corporation or another issuer) or other securities, cash
or other property.

     8.28 "Fundamental Change Redemption Price" has the meaning specified in
Section 5.1(b).

     8.29 "Governance Agreement" means the Governance Agreement, dated as of
October 6, 2003, as amended from time to time, among the Corporation, WCAS
Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS
Information Partners, L.P. and certain individual investors and trusts listed on
the signature pages thereto.

     8.30 "Holder" means a Person in whose name shares of Capital Stock are
registered on the stock register of the Corporation.

     8.31 "Independent Appraiser" means an independent investment banking firm
or independent public accounting firm, in each case of nationally recognized
standing in the valuation of businesses similar to the business of the
Corporation.

     8.32 "Initial Holder" means any Holder of shares of Series B Preferred
Stock on the Issue Date.

     8.33 "Initial Series B Directors" means the two directors who are appointed
to the Board of Directors pursuant to this Certificate of Designation as the
Initial Series B Directors as of the Issue Date.

     8.34 "Issue Date" means the first date on which the Series B Preferred
Stock is issued.

     8.35 "Junior Securities" has the meaning specified in Section 3.1(a).

     8.36 "Junior Securities Distribution" has the meaning specified in Section
2.2(b).

     8.37 "Liens" means liens and charges other than liens and charges arising
under (i) any Transaction Document, (ii) any other agreement entered into
between the Corporation and any Holder of the Series B Preferred Stock from time
to time or (iii) any other agreement to which the Corporation is not a party.

                                       31

<PAGE>

     8.38 "Liquidation Event" means a liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary.

     8.39 "Liquidation Preference" has the meaning specified in Section 1.1.

     8.40 "Mandatory Redemption Price" has the meaning specified in Section
5.2(a).

     8.41 "Merger Agreement" means the Agreement and Plan of Merger, dated as of
July 2, 2003, as amended from time to time, among the Corporation, BTI Telecom,
Inc., 8DBC1 Corp., WCAS Capital Partners III, L.P., Welsh, Carson, Anderson &
Stowe VIII, L.P., WCAS Information Partners, L.P. and certain individual
investors and trusts listed on the signature pages thereto.

     8.42 "Merger Common Stock" means the Common Stock issued by the Corporation
pursuant to the Merger Agreement.

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

     8.44 "Optional Redemption Price" has the meaning specified in Section
5.1(a).

     8.45 "Options" has the meaning specified in Section 4.2(b).

     8.46 "Parity Securities" has the meaning specified in Section 3.1(b).

     8.47 "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock issuer, interest, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).

     8.48 "Preferred Dividends" has the meaning specified in Section 2.1(a).

     8.49 "Proposed Series A Amendment" has the meaning specified in Section
7.6.

     8.50 "Qualifying Asset Sale" has the meaning specified in the Governance
Agreement.

     8.51 "Redemption Agent" means that Person, if any, appointed by the
Corporation to hold funds deposited by the Corporation in trust to pay to the
Holders of shares of Series B Preferred Stock to be redeemed. Any Redemption
Agent shall be (i) a national banking association or corporation organized and
doing business under the laws of the United States of America or of any state or
territory thereof or of the District of Columbia, authorized under such

                                       32

<PAGE>

laws to exercise corporate trust powers and subject to supervision or
examination by federal, state, territorial or District of Columbia authority,
and having a combined capital and surplus of at least $50 million or (ii) an
Affiliate of such a national banking association or corporation that customarily
performs the duties of redemption agent for public securities issues.

     8.52 "Redemption Date" means the date set forth in the Redemption Notice
which is fixed for redemption of the shares of Series B Preferred Stock referred
to therein.

     8.53 "Redemption Notice" means that notice to be given by the Corporation
to the Holders notifying the Holders as to the redemption, in whole or in part,
of the Series B Preferred Stock pursuant to Section 5. The Redemption Notice
shall include the following information:

          (i) the Redemption Date and the time of day on such date;

          (ii) the total number of shares of Series B Preferred Stock to be
     redeemed and, if fewer than all the shares held by such Holder are to be
     redeemed, the number of such shares to be redeemed from such Holder;

          (iii) the Redemption Price;

          (iv) the place or places where certificates for such shares are to be
     surrendered for payment of the Redemption Price;

          (v) that dividends on the shares to be redeemed shall cease to accrue
     on such Redemption Date unless the Corporation defaults in the payment of
     the Redemption Price; and

          (vi) the name of any bank or other financial institution, if any,
     performing the duties of Redemption Agent.

The Redemption Notice shall be given by first-class mail to each record Holder
of the shares to be redeemed, at such Holder's address as such address appears
on the books of the Corporation.

     8.54 "Redemption Price" means each of the Optional Redemption Price, the
Fundamental Change Redemption Price and the Mandatory Redemption Price, as the
case may be.

     8.55 "Related Entity" means, with respect to any Person, (i) if such Person
is an "ultimate parent entity," as defined in the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations promulgated
thereunder, each direct or indirect subsidiary of such Person and (ii) if such
Person is not an "ultimate parent entity," as defined in such Act and such
regulations, each ultimate parent entity (as so defined) of such Person and each
other Person which is a direct or indirect subsidiary of any such ultimate
parent entity.

                                       33

<PAGE>

     8.56 "Required Initial Holders" means, as of any date of determination,
WCAS Capital Partners III, L.P. and Welsh, Carson, Anderson & Stowe VIII, L.P.,
so long as such Initial Holders and their Affiliates are the beneficial and
record owners, as of such date of determination, of a majority of the shares of
Series B Preferred Stock outstanding on such date of determination.

     8.57 "Restricted Securities" means (i) the shares of Series B Preferred
Stock issued by the Corporation pursuant to the Merger Agreement, (ii) the
shares of Series B Preferred Stock and other securities issued by the
Corporation as Preferred Dividends on the shares of Series B Preferred Stock
referred to in clause (i), and (iii) the shares of Common Stock and other
securities issued by the Corporation upon the conversion of the shares of Series
B Preferred Stock referred to in clauses (i) and (ii).

     8.58 "Restricted Securities Legend" means the following legend:

          THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
          OR UNDER ANY APPLICABLE STATE SECURITIES LAWS AND ARE SUBJECT TO
          RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT AND SUCH LAWS. THE
          SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR
          OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER
          THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
          SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
          IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND
          STATE SECURITIES LAWS. THE CORPORATION RESERVES THE RIGHT PRIOR TO ANY
          SUCH TRANSACTION TO REQUIRE AN OPINION OF COUNSEL TO THE HOLDER OF THE
          SECURITIES SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH THE
          FOREGOING RESTRICTIONS.

     8.59 "Senior Securities" has the meaning specified in Section 3.1(c).

     8.60 "Series A Certificate of Designation" means the Certificate of
Designation of the Powers, Preferences and Relative, Participating, Optional and
Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.

                                       34

<PAGE>

     8.61 "Series A Preferred Stock" means the 8% Series A Convertible
Redeemable Preferred Stock of the Corporation authorized in the Series A
Certificate of Designation.

     8.62 "Series A Warrant Agreement" means the Warrant Agreement, dated as of
October 29, 2002, between the Corporation and Mellon Investor Services LLC, as
Warrant Agent, as amended from time to time, so long as no amendment to such
Warrant Agreement after the Issue Date shall increase the number of warrants
issuable pursuant thereto.

     8.63 "Series B Preferred Stock" means the 8% Series B Convertible
Redeemable Preferred Stock of the Corporation authorized in this Certificate of
Designation.

     8.64 "Series B Warrant Agreement" means the Warrant Agreement, dated as of
October 6, 2003, between the Corporation and Mellon Investor Services LLC, as
Warrant Agent, as amended from time to time, so long as no amendment to such
Warrant Agreement after the Issue Date shall increase the number of warrants
issuable pursuant thereto.

     8.65 "Single Class Voting Date" has the meaning specified in Section
7.2(a).

     8.66 "Transaction Documents" means (i) the Merger Agreement, (ii) the
Series B Warrant Agreement, (iii) the Governance Agreement and (iv) the
Registration Rights Agreement, dated as of October 6, 2003, as amended from time
to time, among the Corporation and the securityholders of the Corporation
identified therein.

     8.67 "Transfer Agent" means the Person duly appointed by the Corporation in
its sole discretion to serve as transfer agent for the Series B Preferred Stock.
The Corporation may serve as Transfer Agent.

     8.68 "Transferee" means any Person that acquires assets of the Corporation
in connection with any sale, conveyance, lease, exchange or transfer of such
assets by the Corporation to or with such Person.

     8.69 "Warrants" means (i) the warrants to purchase Common Stock issued by
the Corporation pursuant to the Series A Warrant Agreement and (ii) the warrants
to purchase Common Stock issued by the Corporation pursuant to the Series B
Warrant Agreement; provided that the warrants referred to in each of clauses (i)
and (ii) have the same exercise expiration date and (subject to adjustments
pursuant to antidilution provisions of the Series A Warrant Agreement or the
Series B Warrant Agreement, as the case may be) the same exercise price as the
warrants issued pursuant to the Series A Warrant Agreement or the Series B
Warrant Agreement, as the case may be, which are outstanding as of the Issue
Date.

                                       35

<PAGE>

9.   Other Provisions

     9.1  Status of Reacquired Shares

     Shares of Series B Preferred Stock issued and redeemed or otherwise
reacquired by the Corporation shall be retired and canceled promptly after
reacquisition thereof and, upon compliance with the applicable requirements of
Delaware law, shall have the status of authorized but unissued shares of
preferred stock of the Corporation undesignated as to series and may, with any
and all other authorized but unissued shares of preferred stock of the
Corporation, be designated or redesignated and issued or reissued, as the case
may be, as part of any series of preferred stock of the Corporation.

     9.2  Book-Entry Registration

     Notwithstanding any other provision of this Certificate of Designation, the
Corporation shall have the right to have its Series B Preferred Stock registered
in book-entry or other electronic form. In the event of such registration, to
the extent permitted or required by the rules, regulations and practices of the
applicable book-entry or other electronic system, or by other applicable law or
regulation, the Series B Preferred Stock shall not be evidenced by physical
stock certificates, and any actions required or permitted under this Certificate
of Designation to be taken by the Corporation or any Holder of the Series B
Preferred Stock with respect to such physical stock certificates shall,
notwithstanding any other provision of this Certificate of Designation, be in
compliance with this Certificate of Designation if taken in accordance with the
rules, regulations and practices of the applicable book-entry or other
electronic system and other applicable law or regulation.

     9.3  Notices

     All notices referred to in this Certificate of Designation shall, except as
expressly provided herein, be deemed given in the manner and with the effect
provided in the General Corporation Law of the State of Delaware.

     9.4  Transfer Restrictions

     Unless the Corporation otherwise instructs the Transfer Agent, (i) all
certificates representing the Restricted Securities, and all certificates issued
upon division or combination of, or in substitution for, such certificates shall
bear a legend substantially in the form of the Restricted Securities Legend and
(ii) the Transfer Agent shall not register any attempted transfer of Restricted
Securities that is not effected in compliance with the requirements set forth in
the Restricted Securities Legend. Whenever the restrictions imposed by this
Section 9.4 shall terminate as to any securities, the Holder thereof shall be
entitled to receive from the Corporation new certificates representing such
securities that do not bear the Restricted Securities Legend.

                                       36

<PAGE>

     9.5  Beneficial Ownership

     Upon request by the Corporation from time to time, each Initial Holder
shall certify to the Corporation the number of shares of Series B Preferred
Stock, if any, then beneficially owned by such Initial Holder and such Initial
Holder's Affiliates.

     IN WITNESS WHEREOF, ITC/\DeltaCom, Inc. caused this Certificate to be
signed this 6th day of October, 2003.

                                        ITC/\DELTACOM, INC.

                                        By: /s/ J. Thomas Mullis
                                            ------------------------------------
                                            Name: J. Thomas Mullis
                                            Title: Senior Vice President
                                                     -Legal and Regulatory

                                       37

<PAGE>

                                    EXHIBIT A

                            Form of Conversion Notice

Dated: [           ]
        -----------

     The undersigned is the holder of record of [        ] shares of the 8%
                                                 --------
Series B Convertible Redeemable Preferred Stock, par value $0.01 per share (the
"Series B Preferred Stock"), of ITC/\DeltaCom, Inc. (the "Corporation"). This
Conversion Notice is provided pursuant to Section 4.1(b) of the Certificate of
Designation of the Powers, Preferences and Relative, Participating, Optional and
Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the "Certificate of
Designation"). Capitalized terms not defined herein have the meanings given to
such terms in the Certificate of Designation.

     The undersigned hereby irrevocably elects to convert [        ] shares of
                                                           --------
Series B Preferred Stock represented by the enclosed certificate or certificates
into shares of Common Stock at the Conversion Price per share of Common Stock
provided by the Certificate of Designation. The undersigned requests that
certificates representing such Common Stock be registered in the name or names
of the Persons set forth below for the number of shares of Common Stock issuable
upon conversion of the number of shares of Series B Preferred Stock set forth
beside such Person's name below:

Shares of Series B                      Taxpayer I.D. No./
  Preferred Stock    Name and Address   Social Security No.
------------------   ----------------   -------------------

     If the number of shares of Series B Preferred Stock that the undersigned is
converting is fewer than all of the shares of Series B Preferred Stock
represented by the enclosed certificate or certificates representing the Series
B Preferred Stock converted hereby, the undersigned requests that new
certificates representing the remaining shares of Series B Preferred Stock be
registered in the name of the undersigned at the address set forth below:

                                      A-1

<PAGE>

     Enclosed herewith are (1) written instruments of transfer, duly executed by
the undersigned or the undersigned's duly authorized legal representative, or in
blank, and (2) transfer tax stamps or funds thereof, in each case, that are
required pursuant to the Certificate of Designation.

                                        Name:
                                              ----------------------------------

                                        Signature:
                                                   -----------------------------

                                        Address:
                                                 -------------------------------

                                                 -------------------------------

                                                 -------------------------------

                                        Telephone no.:
                                                       -------------------------
                                        Facsimile no.:
                                                       -------------------------

                                        Note: The above signature should
                                              correspond exactly with the name
                                              on the face of the enclosed
                                              Series B Preferred Stock
                                              certificates

                                       A-2

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