Document:

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                                                                    Exhibit 10.4
                                                                    ------------

                               ITC/\DELTACOM, INC.
                             1997 STOCK OPTION PLAN
                             (Amended and Restated)

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                                TABLE OF CONTENTS

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<S>                                                                   <C>
1.     PURPOSE ......................................................    1
2.     DEFINITIONS ..................................................    1
3.     ADMINISTRATION ...............................................    3
       3.1.   Committee .............................................    3
       3.2.   No Liability ..........................................    4
4.     STOCK ........................................................    4
5.     ELIGIBILITY ..................................................    4
6.     EFFECTIVE DATE AND TERM ......................................    4
       6.1.   Effective Date ........................................    4
       6.2.   Term ..................................................    5
7.     GRANT OF OPTIONS .............................................    5
8.     LIMITATION ON INCENTIVE STOCK OPTIONS ........................    5
9.     OPTION AGREEMENTS ............................................    5
10.    OPTION PRICE .................................................    6
11.    TERM AND EXERCISE OF OPTIONS .................................    6
       11.1.  Term ..................................................    6
       11.2.  Exercise by Optionee ..................................    6
       11.3.  Option Period and Limitations on Exercise .............    6
       11.4.  Method of Exercise ....................................    7
       11.5.  Parachute Limitations .................................    8
12.    TRANSFERABILITY OF OPTIONS ...................................    9
13.    TERMINATION OF SERVICE RELATIONSHIP ..........................    9
14.    RIGHTS IN THE EVENT OF DEATH OR DISABILITY ...................   10
       14.1.  Death .................................................   10
       14.2.  Disability ............................................   11
15.    USE OF PROCEEDS ..............................................   11
16.    SECURITIES LAWS ..............................................   11
17.    EXCHANGE ACT: RULE 16B-3 .....................................   12
       17.1.  General ...............................................   12
       17.2.  Compensation Committee ................................   12
       17.3.  Restriction on Transfer of Stock ......................   12
18.    AMENDMENT AND TERMINATION ....................................   13
19.    EFFECT OF CHANGES IN CAPITALIZATION ..........................   13
       19.1.  Changes in Stock ......................................   13
       19.2.  Reorganization With Corporation Surviving .............   13
       19.3.  Other Reorganizations; Sale of Assets or Stock ........   14
       19.4.  Adjustments ...........................................   14
       19.5.  No Limitations on Corporation .........................   15
20.    WITHHOLDING ..................................................   15
21.    DISCLAIMER OF RIGHTS .........................................   15
22.    NONEXCLUSIVITY ...............................................   15
23.    GOVERNING LAW. ...............................................   16
</TABLE>

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                               ITC/\DELTACOM, INC.
                             1997 STOCK OPTION PLAN
                             (Amended and Restated)

           ITC/\DELTACOM, INC., a Delaware corporation (the "Corporation"), sets
forth herein the terms of the 1997 Stock Option Plan (the "Plan") as follows:

1.   PURPOSE

           The Plan is intended to advance the interests of the Corporation by
providing eligible individuals (as designated pursuant to Section 5 hereof) an
opportunity to acquire or increase a proprietary interest in the Corporation,
which thereby will create a stronger incentive to expend maximum effort for the
growth and success of the Corporation and its subsidiaries and will encourage
such eligible individuals to continue to service the Corporation.

2.   DEFINITIONS

           For purposes of interpreting the Plan and related documents
(including Option Agreements), the following definitions shall apply:

               2.1  "Affiliate" means any company or other trade or business
that is controlled by or under common control with the Corporation, (determined
in accordance with the principles of Section 414(b) and 414(c) of the Code and
the regulations thereunder) or is an affiliate of the Corporation within the
meaning of Rule 405 of Regulation C under the 1933 Act.

               2.2  "Board" means the Board of Directors of the Corporation.

               2.3  "Cause" means, unless otherwise defined in an Option
Agreement, (i) gross negligence or willful misconduct in connection with the
performance of duties; (ii) conviction of a criminal offense (other than minor
traffic offenses); or (iii) material breach of any term of any employment,
consulting or other services, confidentiality, intellectual property or
non-competition agreements, if any, between Optionee and the Corporation or any
of its Subsidiaries or Affiliates.

               2.4  "Code" means the Internal Revenue Code of 1986, as now in
effect or as hereafter amended.

               2.5  "Committee" means the Board or a committee of the Board
which must consist of no fewer than two members of the Board and shall be
appointed by the Board.

               2.6  "Corporation" means ITC/\DELTACOM, Inc.

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               2.7  "Effective Date" means the date of adoption of the Plan by
the Board.

               2.8  "Employer" means ITC/\DELTACOM, Inc. or the Subsidiary,
Affiliate or majority stockholder of the Corporation which employs the
designated recipient of an Option.

               2.9  "Exchange Act" means the Securities Exchange Act of 1934, as
now in effect or as hereafter amended.

               2.10 "Fair Market Value" means the value of each share of Stock
subject to the Plan determined as follows: if on the Grant Date or other
determination date the shares of Stock are listed on an established national or
regional stock exchange, are admitted to quotation on the National Association
of Securities Dealers Automated Quotation System, or are publicly traded on an
established securities market, the Fair Market Value of the shares of Stock
shall be the closing price of the shares of Stock on such exchange or in such
market (the highest such closing price if there is more than one such exchange
or market) on the trading day immediately preceding the Grant Date (or on the
Grant Date, if so specified by the Committee or the Board) or such other
determination date (or if there is no such reported closing price, the Fair
Market Value shall be the mean between the highest bid and lowest asked prices
or between the high and low sale prices on such trading day) or, if no sale of
the shares of Stock is reported for such trading day, on the next preceding day
on which any sale shall have been reported. If the shares of Stock are not
listed on such an exchange, quoted on such System or traded on such a market,
Fair Market Value shall be determined by the Board in good faith.

               2.11 "Grant Date" means the later of (i) the date as of which the
Committee approves the grant and (ii) the date as of which the Optionee and the
Corporation, Subsidiary, Affiliate or majority stockholder of the Corporation
enter the relationship resulting in the Optionee being eligible for grants.

                  2.12 "Family Member" means a person who is a spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of the Optionee, any person
sharing the Optionee's household (other than a tenant or employee), a trust in
which these persons (or the Optionee) have more than fifty percent of the
beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons
(or the Optionee) own more than fifty percent of the voting interests.

               2.13 "Incentive Stock Option" means an "incentive stock option"
within the meaning of section 422 of the Code.

                                       2

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               2.14 "Option" means an option to purchase one or more shares of
Stock pursuant to the Plan.

               2.15 "Option Agreement" means the written agreement evidencing
the grant of an Option hereunder.

               2.16 "Optionee" means a person who holds an Option under the
Plan.

               2.17 "Option Period" means the period during which Options may be
exercised as defined in Section 11.

               2.18 "Option Price" means the purchase price for each share of
Stock subject to an Option.

               2.19 "Plan" means the ITC/\DELTACOM, Inc. 1997 Stock Option Plan.

               2.20 "1933 Act" means the Securities Act of 1933, as now in
effect or as hereafter amended.

               2.21 "Service Relationship" means the provision of bona fide
services to the Corporation, a Subsidiary, an Affiliate or the majority
stockholder as an employee, director, advisor or consultant.

               2.22 "Stock" mean the shares of Common Stock, par value $.01 per
share, of the Corporation.

               2.23 "Subsidiary" means any "subsidiary corporation" of the
Corporation within the meaning of Section 425(f) of the Code.

3.   ADMINISTRATION

     3.1.  Committee

           The Plan shall be administered by the Committee, which shall have the
full power and authority to take all actions and to make all determinations
required or provided for under the Plan or any Option granted or Option
Agreement entered into hereunder and all such other actions and determinations
not inconsistent with the specific terms and provisions of the Plan deemed by
the Committee to be necessary or appropriate to the administration of the Plan
or any Option granted or Option Agreement entered into hereunder. The
interpretation and construction by the Committee of any provision of the Plan or
of any Option granted or Option Agreement entered into hereunder shall be final
and conclusive.

                                       3

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     3.2.  No Liability

           No member of the Board or of the Committee shall be liable for any
action or determination made, or any failure to take or make an action or
determination, in good faith with respect to the Plan or any Option granted or
Option Agreement entered into hereunder.

4.   STOCK

           The stock that may be issued pursuant to Options granted under the
Plan shall be Stock, which shares may be treasury shares or authorized but
unissued shares. The number of shares of Stock that may be issued pursuant to
Options granted under the Plan shall not exceed in the aggregate 13,815,000
shares of Stock, which number of shares is subject to adjustment as provided in
Section 19 hereof. If any Option expires, terminates or is terminated for any
reason prior to exercise in full, the shares of Stock that were subject to the
unexercised portion of such Option shall be available for future Options granted
under the Plan.

5.   ELIGIBILITY

           Options may be granted under the Plan to (i) any officer or key
employee of the Corporation, any Subsidiary, any Affiliate or the majority
stockholder of the Corporation (including any such officer or key employee who
is also a director of the Corporation, any Subsidiary, any Affiliate or the
majority stockholder of the Corporation) or (ii) any other individual whose
participation in the Plan is determined to be in the best interests of the
Corporation by the Committee. An individual may hold more than one Option,
subject to such restrictions as are provided herein.

6.   EFFECTIVE DATE AND TERM

     6.1.  Effective Date

           The Plan shall become effective as of the date of adoption by the
Board, subject to stockholders' approval of the Plan within one year of such
effective date by a majority of the votes cast at a duly held meeting of the
stockholders of the Corporation at which a quorum representing a majority of all
outstanding stock is present, either in person or by proxy, and voting on the
matter, or by written consent in accordance with applicable state law and the
Certificate of Incorporation and By-Laws of the Corporation; provided, however,
                                                             --------  -------
that upon approval of the Plan by the stockholders of the Corporation, all
Options granted under the Plan on or after the effective date shall be fully
effective as if the stockholders of the Corporation had approved the Plan on the
effective date. If the stockholders fail to approve the Plan within one year of
such effective date, any Options granted hereunder shall be null, void and of no
effect.

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     6.2.  Term

           If not sooner terminated by the Board, the Plan shall terminate on
the date 10 years after the effective date.

7.   GRANT OF OPTIONS

           Subject to the terms and conditions of the Plan, the Committee may,
at any time and from time to time prior to the date of termination of the Plan,
grant to such eligible individuals as the Committee may determine Options to
purchase such number of shares of Stock on such terms and conditions as the
Committee may determine, including any terms or conditions which may be
necessary to qualify such Options as Incentive Stock Options. Without limiting
the foregoing, the Committee may at any time, with the consent of the Optionee,
amend the terms of outstanding Options or issue new Options in exchange for the
surrender and cancellation of outstanding Options. The date on which the
Committee approves the grant of an Option (or such later date as is specified by
the Committee) shall be considered the date on which such Option is granted. The
maximum number of shares of Stock subject to Options that can be awarded under
the Plan to any person is 1,605,000 shares, which number of shares is subject to
adjustment as provided in Section 19 hereof.

8.   LIMITATION ON Incentive STOCK OPTIONS

           An Option shall constitute an Incentive Stock Option only to the
extent that (i) it is designated an Incentive Stock Option and (ii) the
aggregate fair market value (determined at the time the Option is granted) of
the Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under the Plan and all
other plans of the Optionee's employer corporation and its parent and subsidiary
corporations within the meaning of Section 422(d) of the Code) does not exceed
$100,000. This limitation shall be applied by taking Options into account in the
order in which such Options were granted.

9.   OPTION AGREEMENTS

          All Options granted pursuant to the Plan shall be evidenced by written
agreements to be executed by the Corporation and the Optionee, in such form or
forms as the Committee shall from time to time determine. Option Agreements
covering Options granted from time to time or at the same time need not contain
similar provisions; provided, however, that all such Option Agreements shall
                    --------  -------
comply with all terms of the Plan.

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10.  OPTION PRICE

           The purchase price of each share of Stock subject to an Option shall
be fixed by the Committee and stated in each Option Agreement. In the case of an
Option that is intended to constitute an Incentive Stock Option, the Option
Price shall be not less than the greater of par value or 100 percent of the fair
market value of a share of the Stock covered by the Option on the date the
Option is granted (as determined in good faith by the Committee); provided,
                                                                  --------
however, that in the event the Optionee would otherwise be ineligible to receive
-------
an Incentive Stock Option by reason of the provisions of Sections 422(b)(6) and
424(d) of the Code (relating to stock ownership of more than 10 percent), the
Option Price of an Option which is intended to be an Incentive Stock Option
shall be not less than the greater of par value or 110 percent of the fair
market value of a share of the Stock covered by the Option at the time such
Option is granted. In the case of an Option not intended to constitute an
Incentive Stock Option, the Option Price shall be not less than the par value of
a share of the Stock covered by the Option on the date the Option is granted.

11.  TERM AND EXERCISE OF OPTIONS

     11.1. Term

           Each Option granted under the Plan shall terminate and all rights to
purchase shares thereunder shall cease upon the expiration of 10 years from the
date such Option is granted, or on such date prior thereto as may be fixed by
the Committee and stated in the Option Agreement relating to such Option;
provided, however, that in the event the Optionee would otherwise be ineligible
--------  -------
to receive an Incentive Stock Option by reason of the provisions of Sections
422(b)(6) and 424(d) of the Code (relating to stock ownership of more than 10
percent), an Option granted to such Optionee which is intended to be an
Incentive Stock Option shall in no event be exercisable after the expiration of
five years from the date it is granted.

     11.2. Exercise by Optionee

           Only the Optionee receiving an Option or a transferee of an Option
pursuant to Section 12 (or, in the event of the Optionee's legal incapacity or
incompetency, the Optionee's guardian or legal representative, and in the case
of the Optionee's death, the Optionee's estate) may exercise the Option.

     11.3. Option Period and Limitations on Exercise

           Each Option granted under the Plan shall be exercisable in whole or
in part at any time and from time to time over a period commencing on or after
the date of grant of the Option and ending upon the expiration or termination of
the Option, as the Committee shall determine and set forth in the Option
Agreement relating to such Option. Without limitation of the foregoing, the
Committee, subject

                                       6

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to the terms and conditions of the Plan, may in its sole discretion provide that
an Option may not be exercised in whole or in part for any period or periods of
time during which such Option is outstanding as the Committee shall determine
and set forth in the Option Agreement relating to such Option. Any such
limitation on the exercise of an Option contained in any Option Agreement may be
rescinded, modified or waived by the Committee, in its sole discretion, at any
time and from time to time after the date of grant of such Option.
Notwithstanding any other provisions of the Plan, no Option shall be exercisable
in whole or in part prior to the date the Plan is approved by the stockholders
of the Corporation as provided in Section 6.1 hereof.

     11.4. Method of Exercise

           An Option that is exercisable hereunder may be exercised by delivery
to the Corporation on any business day, at its principal office addressed to the
attention of the Committee, of written notice of exercise, which notice shall
specify the number of shares for which the Option is being exercised, and shall
be accompanied by payment in full of the Option Price of the shares for which
the Option is being exercised. Payment of the Option Price for the shares of
Stock purchased pursuant to the exercise of an Option shall be made, as
determined by the Committee and set forth in the Option Agreement pertaining to
an Option, (a) in cash or by certified check payable to the order of the
Corporation; (b) through the tender to the Corporation of shares of Stock which,
if acquired from the Company, have been owned by the Optionee no less than six
(6) months and which shares shall be valued, for purposes of determining the
extent to which the Option Price has been paid thereby, at their Fair Market
Value on the date of exercise; (c) to the extent permitted by applicable law and
under the terms of the Option Agreement with respect to such Option, by causing
the Corporation to withhold shares of Stock otherwise issuable pursuant to the
exercise of an Option equal in value to the Option Price or portion thereof to
be satisfied pursuant to this clause (c); or (d) by a combination of the methods
described in Sections 11.4(a), 11.4(b) and 11.4(c) hereof; provided, however,
                                                           --------  -------
that the Committee may in its discretion impose and set forth in the Option
Agreement pertaining to an Option such limitations or prohibitions on the use of
shares of Stock to exercise Options as it deems appropriate. Payment in full of
the Option Price need not accompany the written notice of exercise provided the
notice directs that the Stock certificate or certificates for the shares for
which the Option is exercised be delivered to a licensed broker acceptable to
the Corporation as the agent for the individual exercising the Option and, at
the time such Stock certificate or certificates are delivered, the broker
tenders to the Corporation cash (or cash equivalents acceptable to the
Corporation) equal to the Option Price plus the amount (if any) of federal
and/or other taxes which the Corporation may, in its judgment, be required to
withhold with respect to the exercise of the Option. An attempt to exercise any
Option granted hereunder other than as set forth above shall be invalid and of
no force and effect. Promptly after the exercise of an Option and the payment in
full of the Option Price of the shares of

                                       7

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Stock covered thereby, the individual exercising the Option shall be entitled to
the issuance of a Stock certificate or certificates evidencing such individual's
ownership of such shares. A separate Stock certificate or certificates shall be
issued for any shares purchased pursuant to the exercise of an Option which is
an Incentive Stock Option, which certificate or certificates shall not include
any shares which were purchased pursuant to the exercise of an Option which is
not an Incentive Stock Option. An individual holding or exercising an Option
shall have none of the rights of a stockholder until the shares of Stock covered
thereby are fully paid and issued to such individual and, except as provided in
Section 19 hereof, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date of such issuance.

     11.5. Parachute Limitations

           Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter entered into by
the Optionee with the Corporation or any Subsidiary, except an agreement,
contract, or understanding hereafter entered into that expressly modifies or
excludes application of this paragraph (an "Other Agreement"), and
notwithstanding any formal or informal plan or other arrangement heretofore or
hereafter adopted by the Corporation (or any such Subsidiary) for the direct or
indirect provision of compensation to the Optionee (including groups or classes
of participants or beneficiaries of which the Optionee is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit to
or for the Optionee (a "Benefit Arrangement"), if the Optionee is a
"disqualified individual," as defined in Section 280G(c) of the Code, any Option
held by that Optionee and any right to receive any payment or other benefit
under this Plan shall not become exercisable or vested (i) to the extent that
such right to exercise, vesting, payment, or benefit, taking into account all
other rights, payments, or benefits to or for the Optionee under this Plan, all
Other Agreements, and all Benefit Arrangements, would cause any payment or
benefit to the Optionee under this Plan to be considered a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code as then in effect (a
"Parachute Payment") and (ii) if, as a result of receiving a Parachute Payment,
                     ---
the aggregate after-tax amounts received by the Optionee from the Corporation
under this Plan, all Other Agreements, and all Benefit Arrangements would be
less than the maximum after-tax amount that could be received by Optionee
without causing any such payment or benefit to be considered a Parachute
Payment. In the event that the receipt of any such right to exercise, vesting,
payment, or benefit under this Plan, in conjunction with all other rights,
payments, or benefits to or for the Optionee under any Other Agreement or any
Benefit Arrangement would cause the Optionee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the
after-tax amount received by the Optionee as described in clause (ii) of the
preceding sentence, then the Optionee shall have the right, in the Optionee's
sole discretion, to designate those rights, payments, or benefits under this
Plan, any

                                      8

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Other Agreements, and any Benefit Arrangements that should be reduced or
eliminated so as to avoid having the payment or benefit to the Optionee under
this Plan be deemed to be a Parachute Payment.

12.  TRANSFERABILITY OF OPTIONS

           12.1. Transferability of Options

                 Except as provided in Section 12.2, during the lifetime of an
Optionee, only the Optionee (or, in the event of legal incapacity or
incompetency, the Optionee's guardian or legal representative) may exercise an
Option. Except as provided in Section 12.2, no Option shall be assignable or
transferable by the Optionee to whom it is granted, other than by will or the
laws of descent and distribution.

           12.2. Family Transfers.

                 Subject to the terms of the applicable Option Agreement, an
Optionee may transfer all or part of an Option which is not an Incentive Stock
Option to any Family Member; provided that subsequent transfers of transferred
Options are prohibited except those in accordance with this Section 12.2 or by
will or the laws of descent and distribution; and, provided further, that,
except with the consent of the Board or the Committee, there may be no
consideration for any transfer made pursuant to this section. Following
transfer, any such Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that for
purposes of Section 12.2 hereof the term "Optionee" shall be deemed to refer to
the transferee. The events of termination of the Service Relationship of
Sections 13 and 14 hereof shall continue to be applied with respect to the
original Optionee, following which the Option shall be exercisable by the
transferee only to the extent, and for the periods, specified in Section 11.3.

13.  TERMINATION OF SERVICE RELATIONSHIP

                 Upon the termination of the Service Relationship of an Optionee
with the Corporation, a Subsidiary or an Affiliate, other than by reason of the
death or "permanent and total disability" (within the meaning of Section
22(e)(3) of the Code) of such Optionee or for Cause, any Option granted to an
Optionee pursuant to the Plan shall continue to be exercisable only to the
extent that it was exercisable immediately before such termination; provided,
                                                                    --------
however, such Option shall terminate thirty (30) days after the date of such
-------
termination of Service Relationship, unless earlier terminated pursuant to
Section 11.1 hereof, and such Optionee shall have no further right to purchase
shares of Stock pursuant to such Option; and provided further, that the
                                             -------- -------
Committee may provide, by inclusion of appropriate language in any Option
Agreement or, alternatively, by resolution, that an Optionee may (subject to the
general limitations on exercise set forth in Section

                                        9

<PAGE>

11.3 hereof), in the event of termination of the Service Relationship of the
Optionee with the Corporation, a Subsidiary or an Affiliate, exercise an Option,
in whole or in part, at any time subsequent to such termination of Service
Relationship and prior to termination of the Option pursuant to Section 11.1
hereof, either subject to or without regard to any installment limitation on
exercise imposed pursuant to Section 11.3 hereof, as the Committee, in its sole
and absolute discretion, shall determine. Upon the termination of the Service
Relationship of an Optionee with the Corporation, a Subsidiary or an Affiliate
for Cause, any Option granted to an Optionee pursuant to the Plan shall
terminate and such Optionee shall have no further right to purchase shares of
Stock pursuant to such Option; and provided however, that the Committee may
                                   -------- -------
provide, by inclusion of appropriate language in any Option Agreement, that an
Optionee may (subject to the general limitations on exercise set forth in
Section 11.3 hereof), in the event of termination of the Service Relationship of
the Optionee with the Corporation, a Subsidiary or an Affiliate for Cause,
exercise an Option, in whole or in part, at any time subsequent to such
termination of Service Relationship and prior to termination of the Option
pursuant to Section 11.1 hereof, either subject to or without regard to any
installment limitation on exercise imposed pursuant to Section 11.3 hereof, as
the Committee, in its sole and absolute discretion, shall determine and set
forth in the Option Agreement. Whether a leave of absence or leave on military
or government service shall constitute a termination of Service Relationship for
purposes of the Plan shall be determined by the Committee, which determination
shall be final and conclusive. For purposes of the Plan, including without
limitation this Section 13 and Section 14, unless otherwise provided in an
Option Agreement, a termination of Service Relationship with the Corporation, a
Subsidiary or an Affiliate shall not be deemed to occur if the Optionee
immediately thereafter has a Service Relationship with the Corporation, any
other Subsidiary or any other Affiliate.

14.  RIGHTS IN THE EVENT OF DEATH OR DISABILITY

     14.1. Death

           If an Optionee dies while in a Service Relationship with the
Corporation, a Subsidiary or an Affiliate or within the period following the
termination of such Service Relationship during which the Option is exercisable
under Section 13 or 14.2 hereof, the executors, administrators, legatees or
distributees of such Optionee's estate shall have the right (subject to the
general limitations on exercise set forth in Section 11.3 hereof), at any time
within one year after the date of such Optionee's death and prior to termination
of the Option pursuant to Section 11.1 hereof, to exercise, in whole or in part,
any Option held by such Optionee at the date of such Optionee's death, whether
or not such Option was exercisable immediately prior to such Optionee's death;
provided, however, that the Committee may provide by inclusion of appropriate
--------  -------
language in any Option Agreement that, in the event of the death of an Optionee,
the executors,

                                       10

<PAGE>

administrators, legatees or distributees of such Optionee's estate may exercise
an Option (subject to the general limitations on exercise set forth in Section
11.3 hereof), in whole or in part, at any time subsequent to such Optionee's
death and prior to termination of the Option pursuant to Section 11.1 hereof,
either subject to or without regard to any installment limitation on exercise
imposed pursuant to Section 11.3 hereof, as the Committee, in its sole and
absolute discretion, shall determine and set forth in the Option Agreement.

     14.2. Disability

           If an Optionee terminates a Service Relationship with the
Corporation, a Subsidiary or an Affiliate by reason of the "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, then such Optionee shall have the right (subject to the general
limitations on exercise set forth in Section 11.3 hereof), at any time within
one year after such termination of Service Relationship and prior to termination
of the Option pursuant to Section 11.1 hereof, to exercise, in whole or in part,
any Option held by such Optionee at the date of such termination of Service
Relationship, whether or not such Option was exercisable immediately prior to
such termination of Service Relationship; provided, however, that the Committee
                                          --------  -------
may provide, by inclusion of appropriate language in any Option Agreement, that
an Optionee may (subject to the general limitations on exercise set forth in
Section 11.3 hereof), in the event of the termination of the Service
Relationship of the Optionee with the Corporation or a Subsidiary by reason of
the "permanent and total disability" (within the meaning of Section 22(e)(3) of
the Code) of such Optionee, exercise an Option, in whole or in part, at any time
subsequent to such termination of Service Relationship and prior to termination
of the Option pursuant to Section 11.1 hereof, either subject to or without
regard to any installment limitation on exercise imposed pursuant to Section
11.3 hereof, as the Committee, in its sole and absolute discretion, shall
determine and set forth in the Option Agreement. Whether a termination of a
Service Relationship is to be considered by reason of "permanent and total
disability" for purposes of the Plan shall be determined by the Committee, which
determination shall be final and conclusive.

15.  USE OF PROCEEDS

           The proceeds received by the Corporation from the sale of Stock
pursuant to Options granted under the Plan shall constitute general funds of the
Corporation.

16.  SECURITIES LAWS

           The Corporation shall not be required to sell or issue any shares of
Stock under any Option if the sale or issuance of such shares would constitute a
violation by the individual exercising the Option or by the Corporation of any
provisions of any law or regulation of any governmental authority, including,

                                       11

<PAGE>

without limitation, any federal or state securities laws or regulations. If at
any time the Corporation shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to the Option upon any
securities exchange or under any state or federal law, or the consent of any
government regulatory body, is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares, the Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Corporation, and any delay caused thereby shall in no way
affect the date of termination of the Option. Specifically in connection with
the Securities Act, upon exercise of any Option, unless a registration statement
under the Securities Act is in effect with respect to the shares of Stock
covered by such Option, the Corporation shall not be required to sell or issue
such shares unless the Corporation has received evidence satisfactory to the
Corporation that the Optionee may acquire such shares pursuant to an exemption
from registration under the Securities Act. Any determination in this connection
by the Corporation shall be final and conclusive. The Corporation may, but shall
in no event be obligated to, register any securities covered hereby pursuant to
the Securities Act. The Corporation shall not be obligated to take any
affirmative action in order to cause the exercise of an Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable unless and until the shares
of Stock covered by such Option are registered or are subject to an available
exemption from registration, the exercise of such Option (under circumstances in
which the laws of such jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an exemption.

17.  EXCHANGE ACT: RULE 16B-3

     17.1. General

           The Plan is intended to comply with Rule 16b-3 ("Rule 16b-3") (and
any successor thereto) under the Exchange Act. Any provision inconsistent with
Rule 16b-3 shall, to the extent permitted by law and determined to be advisable
by the Committee (constituted in accordance with Section 17.2 hereof), be
inoperative and void.

     17.2. Compensation Committee

           To the extent determined by the Board, at least two members of the
Committee shall qualify as a "non-employee director" as defined in Rule 16b-3.

     17.3. Restriction on Transfer of Stock

           No director, officer or other "insider" of the Corporation subject to
Section 16 of the Exchange Act shall be permitted to sell Stock (which such
"insider"

                                       12

<PAGE>

had received upon exercise of an Option) during the six months immediately
following the grant of such Option.

18.  AMENDMENT AND TERMINATION

           The Board may, at any time and from time to time, suspend or
terminate the Plan and make such changes in or additions to the Plan as it may
deem proper, provided that, if and to the extent provided by applicable law or
regulation, no such suspension or termination of, change in or addition to the
Plan shall be made unless such suspension or termination of, or change in or
addition to the Plan is authorized by the Company's stockholders. Except as
permitted under Section 19 hereof, no suspension or termination of the Plan or
any change in or addition to the Plan shall, without the consent of any Optionee
who is adversely affected thereby, alter any Options previously granted to the
Optionee pursuant to the Plan.

19.  EFFECT OF CHANGES IN CAPITALIZATION

     19.1. Changes in Stock

           If the number of outstanding shares of Stock is increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Corporation by reason of any recapitalization,
reclassification, stock split-up, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or other increase
or decrease in such shares effected without receipt of consideration by the
Corporation, occurring after the effective date of the Plan, a proportionate and
appropriate adjustment shall be made by the Corporation in the number and kind
of shares issuable under the Plan and for which Options are outstanding, so that
the proportionate interest of the Optionee immediately following such event
shall, to the extent practicable, be the same as immediately prior to such
event. Any such adjustment in outstanding Options shall not change the aggregate
Option Price payable with respect to shares subject to the unexercised portion
of the Option outstanding but shall include a corresponding proportionate
adjustment in the Option Price per share. Notwithstanding the foregoing, in the
event of a spin-off that results in no change in the number of outstanding
shares of Stock of the Corporation, the Corporation may, in such manner as the
Corporation deems appropriate, adjust (i) the number and kind of shares of Stock
subject to outstanding Options and/or (ii) the exercise price of outstanding
Options.

     19.2. Reorganization With Corporation Surviving

           Subject to Section 19.3 hereof, if the Corporation shall be the
surviving entity in any reorganization, merger or consolidation of the
Corporation with one or more other entities, any Option theretofore granted
pursuant to the Plan shall pertain to and apply to the securities to which a
holder of the number of shares of

                                       13

<PAGE>

Stock subject to such Option would have been entitled immediately following such
reorganization, merger or consolidation, with a corresponding proportionate
adjustment of the Option Price per share so that the aggregate Option Price
thereafter shall be the same as the aggregate Option Price of the shares
remaining subject to the Option immediately prior to such reorganization, merger
or consolidation.

     19.3. Other Reorganizations; Sale of Assets or Stock

           Upon the dissolution or liquidation of the Corporation, or upon a
merger, consolidation or reorganization of the Corporation with one or more
other entities in which the Corporation is not the surviving entity, or upon a
sale of substantially all of the assets of the Corporation to another person or
entity, or upon any transaction (including, without limitation, a merger or
reorganization in which the Corporation is the surviving entity) approved by the
Board that results in any person or entity (other than persons who are holders
of stock of the Corporation at the time the Plan is approved by the Stockholders
and other than an Affiliate) owning 80 percent or more of the combined voting
power of all classes of stock of the Corporation, the Plan and all Options
outstanding hereunder shall terminate, except to the extent provision is made in
connection with such transaction for the continuation of the Plan and/or the
assumption of the Options theretofore granted, or for the substitution for such
Options of new options covering the stock of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kinds of
shares and exercise prices, in which event the Plan and Options theretofore
granted shall continue in the manner and under the terms so provided. In the
event of any such termination of the Plan, each Optionee shall have the right
(subject to the general limitations on exercise set forth in Section 11.3 hereof
and except as otherwise specifically provided in the Option Agreement relating
to such Option), immediately prior to the occurrence of such termination and
during such period occurring prior to such termination as the Committee in its
sole discretion shall designate, to exercise such Option in whole or in part,
whether or not such Option was otherwise exercisable at the time such
termination occurs, but subject to any additional provisions that the Committee
may, in its sole discretion, include in any Option Agreement. The Committee
shall send written notice of an event that will result in such a termination to
all Optionees not later than the time at which the Corporation gives notice
thereof to its stockholders.

     19.4. Adjustments

           Adjustments under this Section 19 relating to stock or securities of
the Corporation shall be made by the Committee, whose determination in that
respect shall be final and conclusive. No fractional shares of Stock or units of
other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by
rounding downward to the nearest whole share or unit.

                                       14

<PAGE>

    19.5. No Limitations on Corporation

           The grant of an Option pursuant to the Plan shall not affect or limit
in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.

20.  WITHHOLDING

           The Corporation or a Subsidiary may be obligated to withhold federal
and local income taxes and Social Security taxes to the extent that an Optionee
realizes ordinary income in connection with the exercise of an Option. The
Corporation or a Subsidiary may withhold amounts needed to cover such taxes from
payments otherwise due and owing to an Optionee, and upon demand the Optionee
will promptly pay to the Corporation or a Subsidiary having such obligation any
additional amounts as may be necessary to satisfy such withholding tax
obligation. Such payment shall be made in cash or cash equivalents.

21.  DISCLAIMER OF RIGHTS

           No provision in the Plan or in any Option granted or Option Agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ of the Corporation, any Subsidiary
or any Affiliate, or to interfere in any way with the right and authority of the
Corporation, any Subsidiary or any Affiliate either to increase or decrease the
compensation of any individual at any time, or to terminate any employment or
other relationship between any individual and the Corporation, any Subsidiary or
any Affiliate. The obligation of the Corporation to pay any benefits pursuant to
the Plan shall be interpreted as a contractual obligation to pay only those
amounts described herein, in the manner and under the conditions prescribed
herein. The Plan shall in no way be interpreted to require the Corporation to
transfer any amounts to a third party trustee or otherwise hold any amounts in
trust or escrow for payment to any participant or beneficiary under the terms of
the Plan.

22.  NONEXCLUSIVITY

           Neither the adoption of the Plan nor the submission of the Plan to
the stockholders of the Corporation for approval shall be construed as creating
any limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan.

                                       15

<PAGE>

23.  GOVERNING LAW.

           This Plan and all Options to be granted hereunder shall be governed
by the laws of the State of Delaware (but not including the choice of law rules
thereof).

           IN WITNESS WHEREOF, the Company caused its duly authorized officer to
execute this Plan as of the 24th day of March, 1997 to evidence its adoption of
this Plan, and the Company has caused its duly authorized officer to execute
this Plan, amended and restated as of September 13, 2001.

                                                ITC/\DELTACOM, INC.

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

                                       16<PAGE>

                                                                    EXHIBIT 10.2

================================================================================

                                     MASTER
                                    AGREEMENT

                                     BETWEEN

                             THE NETPLEX GROUP, INC.
                                       AND
                              NETPLEX SYSTEMS, INC.

                                       AND

                          WATERSIDE CAPITAL CORPORATION

                                   Dated as of
                               September 28, 2001

================================================================================
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE 1   THE SURRENDER, DELIVERY, PAYMENT AND PURCHASE....................2

1.1   The Surrender, Delivery and Payment....................................2
      -----------------------------------

1.2   The Purchase...........................................................2
      ------------

1.3   The Escrow.............................................................2
      ----------

1.4   The Surrender..........................................................2
      -------------

ARTICLE 2   THE INVESTMENT DOCUMENTS.........................................2

2.1   The First Commercial Note..............................................2
      -------------------------

2.2   The Second Commercial Note.............................................2
      --------------------------

2.3   The Notes..............................................................2
      ---------

2.4   Investment Documents...................................................2
      --------------------

2.5   Prepayment.............................................................3
      ----------

2.6   Group Security.........................................................3
      --------------

2.7   Systems Security.......................................................3

2.8   ACFC Documents.........................................................3
      --------------

ARTICLE 3   SYSTEMS INDEMNITY AND REDEMPTION OBLIGATIONS.....................3

3.1   Certificate of Amendment...............................................3
      ------------------------

3.2   Indemnity..............................................................3
      ---------

3.3   Redemption.............................................................4
      ----------

3.4   Security...............................................................4
      --------

ARTICLE 4   REPRESENTATIONS AND WARRANTIES...................................4

4.1   Representations of Systems and of Group................................4
      ---------------------------------------

(a)   Good Standing and Qualification........................................4
      -------------------------------

                                       i
<PAGE>

(b)   Corporate Authority....................................................4
      -------------------

(c)   Binding Agreements.....................................................4
      ------------------

(d)   Litigation.............................................................4
      ----------

(e)   No Conflicting Law or Agreements.......................................5
      --------------------------------

(f)   Taxes .................................................................5
      -----

(g)   Financial Statements...................................................5
      --------------------

(h)   Adverse Developments...................................................5
      --------------------

(i)   Existence of Assets and Title..........................................5
      -----------------------------

(j)   Compliance.............................................................5
      ----------

(k)   Leases.................................................................6
      ------

(l)   Pension Plans..........................................................6
      -------------

(m)   Deferred Compensation Arrangements.....................................7
      ----------------------------------

(n)   Chief Executive Office.................................................7
      ----------------------

(o)   Places of Business and Location of Collateral..........................8
      ---------------------------------------------

(p)   Contingent Liabilities.................................................8
      ----------------------

(q)   Contracts..............................................................8
      ---------

(r)   Unions and Pensions....................................................8
      -------------------

(s)   Licenses...............................................................8
      --------

(t)   Collateral.............................................................8
      ----------

(u)   Tradenames.............................................................8
      ----------

(v)   Financial Information..................................................8
      ---------------------

(w)   Parent, Affiliate or Subsidiary Corporations...........................9
      --------------------------------------------

(x)   Environmental Matters..................................................9
      ---------------------

(y)   Capitalization.........................................................9
      --------------

(z)   Certain Transactions..................................................10
      --------------------

                                       ii
<PAGE>

(aa)  Fees/Commissions......................................................10
      ----------------

(bb)  Employees.............................................................10
      ---------

(cc)  Issuance Taxes........................................................10
      --------------

(dd)  Solvency..............................................................10
      --------

(ee)  Representations and Warranties in Other Agreements....................11
      --------------------------------------------------

(ff)  Senior Loan Documents.................................................11
      ---------------------

(gg)  Trademarks, Patents, etc..............................................11
      -------------------------

ARTICLE 5   COVENANTS AND AGREEMENTS........................................11

5.1   Payment of Obligations and Indebtedness...............................11
      ---------------------------------------

5.2   Financial Statements and Reports......................................12
      --------------------------------

5.3   Maintenance of Books and Records; Inspection..........................12
      --------------------------------------------

5.4   Insurance.............................................................12
      ---------

5.5   Taxes and Assessments.................................................13
      ---------------------

5.6   Legal Existence.......................................................13
      ---------------

5.7   Compliance with Law and Other Agreements..............................13
      ----------------------------------------

5.8   Notice of Default; Perceived Breach...................................13
      -----------------------------------

5.9   Notice of Litigation..................................................13
      --------------------

5.10  Conduct of Business...................................................13
      -------------------

5.11  ERISA Plan............................................................13
      ----------

5.12  Dividends, Distributions, Share Rights, etc...........................14
      --------------------------------------------

5.13  Debt  ................................................................14
      ----

5.14  No Liens..............................................................15
      --------

5.15  Mergers, Consolidations, Acquisitions and Sales.......................15
      -----------------------------------------------

5.16  Transactions With Affiliates..........................................15
      ----------------------------

5.17  Environment...........................................................15
      -----------

                                      iii
<PAGE>

5.18  Guaranty Fee..........................................................16
      ------------

5.19  Zaino ................................................................16
      -----

ARTICLE 6   CLOSING.........................................................16

6.1   Closing...............................................................16
      -------

ARTICLE 7   SUBORDINATION...................................................17

7.1   Group Financing.......................................................17
      ---------------

7.2   Systems Financing.....................................................17
      -----------------

ARTICLE 8   SEPARATE ENTITIES...............................................17

8.1   Separate Entities.....................................................17
      -----------------

ARTICLE 9   DEFAULT AND REMEDIES............................................17

9.1   Events of Default.....................................................17
      -----------------

9.2   Acceleration of Maturity; Remedies for Group Default..................18
      ----------------------------------------------------

9.3   Immediate Redemption; Remedies for Systems Default....................19
      --------------------------------------------------

9.4   Remedies Cumulative; No Waiver........................................19
      ------------------------------

9.5   Proceeds of Remedies..................................................19
      --------------------

ARTICLE 10  TERMINATION.....................................................20

10.1  Termination of this Agreement.........................................20
      -----------------------------

ARTICLE 11  MISCELLANEOUS...................................................20

11.1  Performance By WSCC...................................................20
      -------------------

11.2  Successors and Assigns Included in Parties............................20
      ------------------------------------------

11.3  Costs and Expenses....................................................20
      ------------------

11.4  Assignment............................................................21
      ----------

11.5  Time of the Essence...................................................21
      -------------------

11.6  Severability..........................................................21
      ------------

11.7  Interest and Loan Charges Not to Exceed Maximum Allowed by Law........21
      --------------------------------------------------------------

                                       iv
<PAGE>

11.8  Article and Section Headings; Defined Terms...........................21
      -------------------------------------------

11.9  Notices...............................................................21
      -------
21

11.10 Entire Agreement......................................................22
      ----------------

11.11 Governing Law and Amendments..........................................23
      ----------------------------
11.12 Survival of Representations and Warranties............................23
      ------------------------------------------

11.13 Counterparts..........................................................23
      ------------

11.14 Construction and Interpretation.......................................23
      -------------------------------

11.15 General Indemnification...............................................23
      -----------------------

11.16 Standard of Care; Limitation of Damages...............................23
      ---------------------------------------

11.17 Consent to Jurisdiction; Exclusive Venue..............................24
      ----------------------------------------

                                       v
<PAGE>

                                MASTER AGREEMENT

      THIS MASTER AGREEMENT ("Agreement"), dated as of the 28th day of
September, 2001, is made and entered into on the following terms and conditions,
between NETPLEX SYSTEMS, INC., a Delaware corporation ("Systems"), and THE
NETPLEX GROUP, INC., a New York corporation ("Group"), and WATERSIDE CAPITAL
CORPORATION, a Virginia corporation ("WSCC").

                                    RECITALS
                                    --------

      A. WSCC owns 1,500 shares of the Class C Preferred Stock of Group (the
"Group Preferred Stock"), and a warrant to acquire 300,000 shares of the Common
Stock of Group (the "Warrant").

      B. Group owns 1,000 shares of the Class A Preferred Stock of Systems.

      C. In consideration of WSCC's: (i) surrender to Group for cancellation of
the Group Preferred Stock, (ii) surrender to Group for cancellation of the
Warrant and (iii) guaranty (the "WSCC Guarantee") of up to $400,000 of System's
revolving credit facility from American Commercial Finance Corporation ("ACFC"),
Group is agreeable to paying to WSCC $2,054,697.45 in the form of $1,000,000 in
cash and two secured commercial promissory notes in the original principal
amounts of $900,000 and $154,697.45, respectively (together, the "Commercial
Notes"), and Systems is agreeable to indemnifying and holding harmless WSCC from
any liability on its ACFC guaranty and secure that indemnity obligation and
certain redemption obligations with respect to its shares of Class A Preferred
Stock to be held by WSCC by a lien on all its assets.

      D. In consideration of Group's transfer to WSCC of Group's 1,000 shares of
Systems Class A Preferred Stock (the "Systems Preferred Stock"), WSCC shall pay
to Group $1,000,000.

      E. To induce WSCC to take the actions contemplated by this Agreement and
execute the Investor Guarantee, Group and Systems have made certain
representations to WSCC.

      F. WSCC, in reliance on the representations and inducements of Group and
Systems, has agreed to take such actions and execute the Investor Guarantee on
the following terms and conditions.

      G. In connection with the foregoing, and without additional consideration,
WSCC agrees to surrender the Warrant which all parties agree is without value.

                                   AGREEMENT:
                                   ---------

      NOW, THEREFORE, in consideration of WSCC's entry into this Agreement and
execution of the WSCC Guarantee, the following mutual covenants and agreements,
and other good and valuable consideration, its receipt and sufficiency
acknowledged, Group and Systems and WSCC agree:

                                       1
<PAGE>

                                   ARTICLE 1
                  THE SURRENDER, DELIVERY, PAYMENT AND PURCHASE
                  ---------------------------------------------

      1.1. The Surrender, Delivery and Payment. WSCC hereby surrenders to Group,
and has delivered to Williams, Mullen, Clark & Dobbins, P.C. (the "Escrow
Agent") for that purpose, the Group Preferred Stock, and hereby delivers to the
Escrow Agent, for redelivery to ACFC, the WSCC Guarantee; and Group hereby
delivers to the Escrow Agent for redelivery to WSCC $1,000,000 in cash and the
Commercial Notes.

      1.2. The Purchase. WSCC hereby purchases from Group, and Group hereby
sells to WSCC, the Systems Preferred Stock for $1,000,000 in cash, which WSCC
hereby delivers to the Escrow Agent for redelivery to Group.

      1.3. The Escrow. Escrow Agent pays to WSCC $1,000,000 and pays to Group
$1,000,000 from the proceeds previously deposited by Group and WSCC into its
escrow account (less a closing/professional fee of $50,000 to be paid to WSCC).

      1.4. The Surrender. WSCC surrenders the Warrant to Group.

                                    ARTICLE 2
                            THE INVESTMENT DOCUMENTS
                            ------------------------

      2.1. The First Commercial Note. Group executes and delivers to WSCC the
"First Commercial Note" in the form of Exhibit 2.1 in the original principal
amount of $900,000.

      2.2. The Second Commercial Note. Group executes and delivers to WSCC the
"Second Commercial Note" in the form of Exhibit 2.2 in the original principal
amount of $96,462.58, representing unpaid dividends on the Group Preferred Stock
through the date of this Agreement, $12,000 for the first year of the Guarantee
Fee, as defined below, and $46,234.87 in other costs owed WSCC by Group,
including attorney's fees.

      2.3. The Notes. The Redemption Note and the Commercial Note are
collectively referred to as the "Notes."

      2.4. Investment Documents. The Notes, this Agreement, the Security
Agreements executed by Group and Systems in favor of WSCC (the "Security
Agreements"), the Investor Rights Agreement, the Systems Registration Rights
Agreement and any other instruments and documents executed by Systems, Group, or
any subsidiary or affiliate of either ("Affiliates"), now or hereafter
evidencing, securing or in any way related to the indebtedness evidenced by the
Notes or the redemption and indemnity obligations of Systems are individually
referred to as an "Investment Document" and collectively as the "Investment
Documents." The term "Obligations" means (a) the indebtedness evidenced by the
Notes, and any renewals or extensions thereof, (b) the full and prompt payment
and all other indebtedness and the prompt and complete performance of all other
obligations of Group or of Systems to WSCC under the respective Investment
Documents to which each is a party, direct or contingent (including but not
limited to obligations incurred as endorser or surety), however evidenced or
denominated, and however and whenever incurred, including but not limited to
indebtedness incurred pursuant to any present or future commitment of WSCC to
Group or to Systems and (c) all future

                                       2
<PAGE>

advances made by WSCC for taxes, levies, insurance and preservation of the
Collateral (as defined below) of Group or of Systems and all attorneys' fees,
court costs and expenses of whatever kind incident to the collection of any of
such indebtedness or other obligations and the enforcement and protection of the
security interest created hereby or by the other Investment Documents.
Notwithstanding the foregoing, to the extent this document makes reference to
either "Group's Obligation" or "Systems' Obligations" such terms shall mean only
the Investment Documents which Group or Systems (respectively) has actually
signed.

      2.5. Prepayment. Group may prepay the indebtedness evidenced by the Notes
in whole or in part at any time and from time to time, without penalty or
premium.

      2.6. Group Security. Payment and performance of Group's Obligations are
secured by a lien on all the Group's assets junior only to the lien granted ACFC
to secure Group's guarantee of Systems' obligations to ACFC; provided, however,
that, with respect to the "Accounts" of Group, as defined in the Group Security
Agreement, WSCC's lien shall be a first lien and (ii) other liens specifically
permitted by the terms of this Agreement or the Security Agreement, of even
date, executed by Group in favor of WSCC (the "Group Security Agreement"). The
Group Security Agreement is in the form of Exhibit 2.6.1.

      2.7. Systems Security. Payment and performance of Systems' Obligations are
secured by a lien on all the Systems' assets junior only to (i) the lien of ACFC
pursuant to (A) that certain Commercial Revolving Loan, Demand Loan and Security
Agreement executed by Systems and ACFC (the "ACFC Loan Agreement") and (B) that
certain security agreement executed by Systems in favor of ACFC, (C) the
Intercreditor Agreement between WSCC and ACFC of even date (the "Intercreditor
Agreement") and (ii) any other liens specifically permitted by the terms of this
Agreement or the Security Agreement, of even date, executed by Systems in favor
of WSCC (the "Systems Security Agreement"). The Systems Security Agreement is in
the form of Exhibit 2.6.2.

      2.8. ACFC Documents. The ACFC Loan Agreement, the WSCC Guaranty and any
other document executed by Systems or any affiliate thereof or WSCC in
connection with the $3 million credit facility provided Systems by ACFC (the
"ACFC Facility") are referred to as the "ACFC Documents."

                                   ARTICLE 3
                 SYSTEMS INDEMNITY AND REDEMPTION OBLIGATIONS
                 --------------------------------------------

      3.1. Certificate of Amendment. Systems has filed with the Delaware
Secretary of State the designation of the Systems Preferred Stock in the form of
Exhibit 3.1, providing for, among other things, the redemption and conversion of
the Systems Preferred Stock under certain circumstances.

      3.2. Indemnity. Systems indemnifies and holds harmless WSCC from any
liability on the WSCC Guaranty executed by WSCC in favor of ACFC, guaranteeing
up to a maximum of $400,000 of the ACFC Credit Facility.

                                       3
<PAGE>

      3.3. Redemption. Systems shall redeem the Systems Preferred Stock held by
WSCC when such is required by the Certificate of Incorporation of Systems or in
any Investment Document signed by Systems.

      3.4. Security. To secure those redemption and indemnity obligations,
Systems grants WSCC a lien on all of its assets, second only to the lien of ACFC
and executes the Systems Security Agreement.

                                   ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

      4.1.  Representations of Systems and of Group. Each of Systems and Group
separately represent and warrant to WSCC, solely with respect to itself, the
following; provided, however, in the event any representation or warranty made
below commences with the words "Systems represents" or "Group represents" such
representation or warranty is made by only Systems or Group, respectively:

            (a) Good Standing and Qualification. Systems is duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Group is duly organized, validly existing and in good standing under the laws of
the State of New York. It has all requisite corporate power and authority to own
and operate its properties and to carry on its business as presently conducted
and is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the character of the properties owned
or leased by it therein or in which the transaction of its business therein
makes such qualification necessary.

            (b) Corporate Authority. It has full power and authority to enter
into this Agreement and the other Investment Documents to which it is a party,
to take the actions by it contemplated herein, to execute and deliver the
Investment Documents to which it is a party, and to incur the obligations
provided for herein and therein, all of which have been duly authorized by all
necessary and proper corporate action. No other consent or approval or the
taking of any other action in respect of shareholders or of any public authority
is required as a condition to the validity or enforceability of this Agreement,
the Investment Documents to which it is a party or any other instrument,
document or agreement delivered in connection herewith or therewith.

            (c) Binding Agreements. This Agreement and the other Investment
Documents to which it is a party constitute, valid and legally binding
obligations of it, enforceable in accordance with their respective terms, except
as enforcement may be limited by principles of equity, bankruptcy, insolvency or
other laws affecting the enforcement of creditors' rights generally.

            (d) Litigation. Except as set forth in Groups filings with the
Securities and Exchange Commission (the "SEC"), there are no actions, suits or
proceedings pending or to the best of its knowledge threatened against it (or
instituted or to be instituted by it) before any court or administrative agency,
nor are there any actions, suits or proceedings threatened against it, which,
individually or in the aggregate, would materially and adversely affect its
financial

                                       4
<PAGE>

condition, assets or operations, nor are there any such actions, suits or
proceedings which question the validity of this Agreement, any of the other
Investment Documents, or any action to be taken in connection with the
transactions contemplated hereby or thereby.

            (e) No Conflicting Law or Agreements. Its execution, delivery and
performance of this Agreement, and each other Investment Document to which it is
a party, as the case may be, does not (i) violate any provision of its
Certificate of Incorporation or Bylaws, or any order, decree or judgment, or any
provision of any statute, rule or regulation to which it may be subject, (ii)
violate or conflict with, result in a breach of or constitute (with notice or
lapse of time, or both) a default under any shareholder agreement, stock
preference agreement, mortgage, indenture or other contract or undertaking to
which it is a party, or by which any of its properties may be bound or (iii)
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on its property or assets except for the liens in favor of
WSCC provided for herein.

            (f) Taxes. With respect to all of its taxable periods, it has filed
all tax returns which are required to be filed and all federal, state,
municipal, franchise and other taxes shown on such filed returns have been paid
or are being diligently contested by appropriate proceedings and have been
reserved against, as required by generally accepted accounting principles,
consistently applied.

            (g) Financial Statements. Its filings with the SEC contain its
audited annual balance sheet as of December 31, 2000, and the related statements
of income, retained earnings and cash flows for the fiscal year or period then
ended. Each of such statements is complete and correct in all material respects
and fairly presents its consolidated financial condition as of the dates and for
the periods referred to therein and has been prepared in accordance with
generally accepted accounting principles consistently applied by it throughout
the periods involved. It has no liabilities, direct or indirect, fixed or
contingent, of the dates of such balance sheets not reflected in such statements
or in the notes thereto.

            (h) Adverse Developments. Since August 14, 2001, the date of Group's
filing with the SEC of its report on Form 10-Q, there has been no material
adverse change in its financial condition, business, operations, affairs or
prospects or in any of its properties or assets.

            (i) Existence of Assets and Title. It has good and valid title to
all of its properties and assets, including the properties and assets reflected
in its financial statements. None of such properties or assets are subject to
any mortgage, pledge, lien, lease, encumbrance or charge, except those permitted
under the terms of this Agreement.

            (j) Compliance. Except as disclosed in Group's filings with the SEC,
it is not in default with respect to any order, writ, injunction or decree of
any court or of any federal, state, municipal or other governmental department,
commission, board, bureau, agency, authority or official, nor is it in violation
of any law, statute, rule or regulation to which it or any of its properties are
subject and it has not received notice of any such default from any party and is
not in default in the payment or performance of any of its obligations to any
third parties or in the performance of any mortgage, indenture, lease, contract
or other agreement to which it is a party or by which any of its assets or
properties may be bound.

                                       5
<PAGE>

            (k) Leases. Except for the dispute with regard to a lease for its
offices in Roseland, New Jersey, it enjoys quiet and undisturbed possession
under all leases under which it is operating, and all of such leases are valid
and subsisting and not in default.

            (l) Pension Plans.

                  (i) No fact, including but not limited to any "reportable
      event," as that term is defined in Section 4043 of ERISA, exists in
      connection with any employee benefit plan or other plan maintained by it
      or any entity affiliated with it for employees covered by Title I of ERISA
      (a "Plan") of any of them under Sections 414(b), (c), (m), (n) and (o) of
      the Internal Revenue Code of 1986, as amended (the "Code") which might
      constitute grounds for termination of any such Plan by the Pension Benefit
      Guaranty Corporation (the "PBGC"), or for the appointment by the
      appropriate United States District Court of a trustee to administer any
      such Plan. Schedule 2.1(m) lists all Plans;

                  (ii) Except to the extent of issues and matters which would
      not, in the aggregate, have a material adverse effect on its ability to
      meet its respective Obligations, no "prohibited transaction" within the
      meaning of Section 406 of ERISA or Section 4975 of the Code exists on the
      execution and delivery of this Agreement and the other Investment
      Documents;

                  (iii) It will to do all acts, including, but not limited to,
      making all contributions necessary to maintain compliance with ERISA or
      the Code, and will not to terminate any Plan in a manner, or do so or fail
      to do any act, which could result in the imposition of a lien on any of
      its properties pursuant to Section 4068 of ERISA;

                  (iv) It does not sponsor or maintain, and has never
      contributed to, and has not incurred any withdrawal liability under a
      "multi-employer plan" as defined in Section 3 of ERISA and it has no
      written or verbal commitment of any kind to establish, maintain or
      contribute to any "multi-employer plan" under the Multi-employer Pension
      Plan Amendment Act of 1980;

                  (v) It has no unfunded liability in contravention of ERISA and
      the Code;

                  (vi) Except to the extent of issues and matters that would
      not, in the aggregate, have a material adverse effect on its ability to
      meet its respective Obligations, any Plan complies currently, and has
      complied in the past, both as to form, operation and terms with provisions
      of the Code and ERISA, and all applicable regulations thereunder and all
      rules issued by the Internal Revenue Service, U.S. Department of Labor and
      the PBGC and as such, is and remains a "qualified" plan under the Code;

                  (vii) No actions, suits or claims are pending (other than
      routine claims for benefits) against any Plan of it, or the assets of any
      Plan of it;

                                       6
<PAGE>

                  (viii) Except to the extent of issues and matters that would
      not, in the aggregate, have a material adverse effect on its ability to
      meet its respective Obligations, it has performed all obligations required
      to be performed by it under any Plan and it is not in default, or in
      violation of any Plan, and has no knowledge of any such default or
      violation by any other party to any Plans;

                  (ix) No liability has been incurred by it to the PBGC or to
      participants or beneficiaries on account of any termination of a Plan
      subject to Title IV of ERISA, no notice of intent to terminate a Plan has
      been filed by (or on behalf of) it pursuant to Section 4041 of ERISA and
      no proceeding has been commenced by the PBGC pursuant to Section 4042 of
      ERISA;

                  (x) It has complied with the reporting and disclosure
      provisions of the Securities Act of 1933 and Securities Exchange Act of
      1934 for any of its Plans.

            (m) Deferred Compensation Arrangements. Except as set forth in
Schedule 4.1(m), it has not entered into employment contracts or deferred
compensation plans, incentive compensation plans, executive compensation plans,
arrangements or commitments (each, individually, an "Arrangement"). With respect
to each Arrangement:

                  (i) The Arrangement complies currently, and has complied in
      the past, both as to form and operation with its terms and the provisions
      of the Code and ERISA and all applicable laws, rules and regulations;

                  (ii) The disclosure and reporting provisions of the Securities
      Act of 1933 and the Securities Exchange Act of 1934 have been satisfied;

                  (iii) The Arrangement is legally valid and binding and is in
      full force and effect;

                  (iv) It has made all contributions required to be made under
      any Arrangement and no contributions are currently due and owing;

                  (v) There are no actions, suits or claims pending (other than
      routine claims for benefits) or, to the best of its knowledge, that could
      be reasonably expected to be asserted against any Arrangement; and

                  (vi) It has performed all obligations required to be performed
      by it under any Arrangement and it is not in default or in violation of,
      and it has no knowledge of a default or violation by any other party to
      any Arrangement.

            (n) Chief Executive Office. 1800 Robert Fulton Drive, Suite 250,
Reston, Virginia 20191 is the location of its chief executive office and
principal place of business, and the office where its books and records
concerning its Collateral, as defined below, are kept.

                                       7
<PAGE>

            (o) Places of Business and Location of Collateral. It has no other
places of business and locates no Collateral, specifically including books and
records, at any location other than as set forth in subsection (n) above. It
shall maintain a full and complete set of its books and records in its offices
at the chief executive office described in subsection (n) above.

            (p) Contingent Liabilities. Except as set forth on Schedule 4.1(p),
it is not a party to any suretyship, guaranty, or other similar type agreement;
nor has it offered its endorsement to any individual, concern, corporation or
other entity or acted or failed to act in any manner that would in any way
create a contingent liability that does not appear in its financial statements.

            (q) Contracts. Except as described in Group's filings with the SEC,
no material contract, governmental or otherwise, to which it is a party, is
subject to renegotiation, nor is it in default in any material respect of any
material contract.

            (r) Unions and Pensions. It is not a party to any collective
bargaining or union agreement.

            (s) Licenses. It has all licenses, permits and other permissions
required by any government, agency or subdivision thereof, or from any licensing
entity to which it may be subject, necessary for the conduct of its business,
all of which are in good standing and in full force and effect.

            (t) Collateral. It is and will continue to be the sole owner of its
respective collateral granted WSCC as security under the Security Agreements
applicable to it (the "Collateral"), free and clear of all liens, encumbrances,
security interests and claims except the liens granted to WSCC hereunder, liens
granted to ACFC pursuant to the ACFC Documents and the security interests and
liens listed on Schedule 2.1(t) and those liens expressly permitted by the terms
of this Agreement or the Security Agreements; it is fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of its
Collateral to WSCC; all documents and agreements related to its Collateral are
true and correct and in all respects; all signatures and endorsements that
appear thereon are genuine and all signatories and endorsers have full capacity
to contract; none of the transactions underlying or giving rise to its
Collateral violate any applicable state or federal laws or regulations; all
documents relating to its Collateral are legally sufficient under such laws or
regulations and legally enforceable in accordance with their terms; and it will
defend its Collateral against the claims of all persons not expressly permitted
by this Agreement or the Security Agreements to hold liens against its
Collateral.

            (u) Tradenames. It has no tradenames.

            (v) Financial Information. All financial information including, but
not limited to, information relating to its receivables and inventory, submitted
by it to WSCC, whether previously or in the future, is and will be true and
correct in all material respects, and is and will be complete insofar as may be
necessary to render it a true and accurate depiction of the subject matter to
which it relates.

                                       8
<PAGE>

            (w) Parent, Affiliate or Subsidiary Corporations. Systems is a
wholly-owned subsidiary of Group and has no subsidiaries.

            (x) Environmental Matters. It has duly complied with, and its
business, operations, assets, equipment, property, leaseholds or other
facilities are in compliance in all material respects with, the applicable
provisions of all federal, state and local environmental, health, and safety
laws, codes and ordinances, and all rules and regulations promulgated
thereunder. It has been issued, and will maintain, all required federal, state
and local permits, licenses, certificates and approvals relating to (i) air
emissions, (ii) discharges to surface water or groundwater, (iii) noise
emissions, (iv) solid or liquid waste disposal, (v) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or wastes
(including any and all such materials listed in any federal, state or local law,
code or ordinance and all rules and regulations promulgated thereunder as
hazardous or potentially hazardous) or (vi) other environmental, health or
safety matters. It has not received notice of, or know of, or suspect facts
which might constitute any violations of any federal, state or local
environmental, health or safety laws, codes or ordinances, and any rules or
regulations promulgated thereunder with respect to its businesses, operations,
assets, equipment, property, leaseholds, or other facilities. Except in
accordance with a valid governmental permit, license, certificate or approval,
it has not experienced any emission, spill, release or discharge into or on (i)
the air, (ii) soils, or any improvements located thereon, (iii) surface water or
groundwater or (iv) the sewer, septic system or waste treatment, storage or
disposal system servicing their premises, of any toxic or hazardous substances
or wastes at or from such premises; and, accordingly, except for those
substances used in compliance with applicable laws, the premises occupied by it
are free of all such toxic or hazardous substances or wastes. It has not
received any complaint, order, directive, claim, citation or notice by any
governmental authority or any person or entity with respect to (i) air
emissions, (ii) spills, releases or discharges to soils or improvements located
thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing the premises of either, (iii)
noise emissions, (iv) solid or liquid waste disposal, (v) the use, generation,
storage, transportation or disposal of toxic or hazardous substances or waste or
(vi) other environmental, health or safety matters affecting it or its business,
operations, assets, equipment, property, leaseholds or other facilities. It has
no indebtedness, obligation or liability (absolute or contingent, matured or not
matured), with respect to the storage, treatment, cleanup or disposal of any
solid wastes, hazardous wastes or other toxic or hazardous substances (including
without limitation any such indebtedness, obligation, or liability with respect
to any current regulation, law or statute regarding such storage, treatment,
cleanup or disposal).

            (y) Capitalization. Group owns 1,100,000 shares of the Common Stock
of Systems ("Systems Common Stock") and 1,000 shares of the Systems Preferred
Stock, together constituting all of the outstanding shares of capital stock of
Systems. Group represents that it has a total authorized capitalization
consisting of (1) 40,000,000 shares of Common Stock ("Group Common Stock"), of
which approximately 23,000,000 are issued and outstanding and (2) 6,000,000
shares of Preferred Stock ("Group Preferred Stock"), of which 2,000,000 are
designated Class A Cumulative Preferred Stock, of which 987,573 are outstanding,
1,287,540 are designated Class B Preferred Stock, of which 643,770 are
outstanding and 1,500,000 are designated Class C Preferred Stock, of which
1,500,000 are outstanding. In addition, Group has issued certain shares of its
Class D Preferred Stock and Class E Preferred Stock as described in

                                       9
<PAGE>

its public filings with the SEC. All these shares of Group and Systems capital
stock are sometimes referred to individually as a "Share" and collectively as
the "Shares." All of its outstanding Shares have been duly authorized and
validly issued and were issued in compliance with the registration or
qualification provisions of all applicable federal and state securities laws or
pursuant to valid exemptions therefrom. Except as otherwise provided in the
Investor Rights Agreement and the Systems Registration Rights Agreement and,
except for the rights to acquire Shares as described in its filings with the SEC
(i) there are no authorized, issued or outstanding warrants, options or rights
to purchase any Shares or securities convertible into Shares, (ii) no person or
entity has any preemptive right, right of first refusal or similar right to
acquire any additional Shares, (iii) there are no restrictions on the transfer
of Shares, other than those imposed by its Investor Rights Agreement with WSCC
and applicable securities laws, (iv) no person or entity has any right to cause
it to effect a registration under the Securities Act of 1933 of any Shares, (v)
it has no obligation to purchase, redeem or otherwise acquire any Shares or to
pay any dividend or make any distribution with respect thereto and (vi) there
are no voting trusts, agreements or proxies relating to any of its Shares.

            (z) Certain Transactions. Except as described in its filings with
the SEC, it is not indebted, directly or indirectly, to any of its officers or
directors or to their respective spouses or children, in any amount whatsoever,
and none of such officers or directors or any members of their immediate
families, is indebted to it or has any direct or indirect ownership interest in
any firm or corporation with which it has a business relationship, or any firm
or corporation that competes with it in its geographic areas (except that its
officers and/or directors of it may own no more than 1% of outstanding stock of
publicly traded companies that may compete with it). Except as described in its
filings with the SEC, no officer or director or any member of their immediate
families, is, directly or indirectly, interested in any material contract with
it. Except as described in its filings with the SEC, it is not a guarantor or
indemnitor of any indebtedness, or obligations (including any lease or
contingent obligations) of any other person, firm, corporation or other legal
entity.

            (aa) Fees/Commissions. It has not agreed to pay any finder's fee,
commission, origination fee (except for the closing/professional fees and
attorneys' fees specifically provided for in this Agreement) or other fee or
charge to any person or entity with respect to this Agreement and the
transactions contemplated hereunder.

            (bb) Employees. To the best of its knowledge it has no any current
labor problems or disputes, threatened or pending claims that have resulted or
could be expected to have a material adverse effect on its operations,
properties or financial condition, or its ability to perform its Obligations.

            (cc) Issuance Taxes. Group has paid, or will pay, all taxes imposed
on it in connection with the issuance, sale and delivery of the Notes, and Group
has complied, or will comply, with all laws imposing such taxes.

            (dd) Solvency. As of the date hereof, it (i) has capital sufficient
to carry on its business and transactions and all business and transactions in
which it is about to engage and is

                                       10
<PAGE>

able to pay its debts as they mature and (ii) does not believe that it will
incur debts or liabilities beyond its ability to pay such debts or liabilities
as they mature.

            (ee) Representations and Warranties in Other Agreements. Systems
represents the representations and warranties made by Systems in the ACFC Credit
Agreement are true and correct in all material respects.

            (ff) Senior Loan Documents. The ACFC Documents previously delivered
to WSCC comprise a full and complete copy of all agreements between the parties
thereto with respect to the subject matter thereof and all transactions related
thereto, and there are no agreements or understandings, oral or written, or side
agreements not contained therein that relate to or modify the substance thereof.

            (gg) Trademarks, Patents, etc. It owns or possesses adequate (and
will use its best efforts to obtain as expediently as possible any additional)
licenses or other rights to use all patents, trademarks, tradenames, service
marks, trade secrets or other intangible property rights and know-how necessary
to entitle it to conduct its business as presently being conducted. It is not a
party to any infringement action, lawsuit, claim or complaint that asserts that
its operations violate or infringe the rights or the tradenames, trademarks,
trademark registrations, service names, service marks or copyrights of others
with respect to any of its apparatuses or methods or any adversely held
trademarks, tradenames, trademark registrations, service names, service marks or
copyrights, and it is not in any way making use of any confidential information
or trade secrets of any person, except with the consent of such person. It has
taken reasonable steps to protect its proprietary information (except disclosure
of source codes pursuant to licensing agreements) and is the lawful owner of the
proprietary information free and clear of any claim of any third party.
"Proprietary information" includes, without limitation, (i) any computer
programming language, software, hardware, firmware or related documentation,
inventions, technical and nontechnical data related thereto and (ii) other
documentation, inventions and data related to patterns, plans, methods,
techniques, drawings, finances, customer lists, suppliers, products, special
pricing and cost information, designs, processes, procedures, formulas, research
data owned or used by it or marketing studies conducted by it, all of which it
considers to be commercially important and competitively sensitive and which
generally have not been disclosed to third parties.

                                   ARTICLE 5
                            COVENANTS AND AGREEMENTS
                            ------------------------

      Each of Group and Systems covenants and agrees that, with respect to
itself, during the term of this Agreement:

      5.1. Payment of Obligations and Indebtedness.

            (a) Group shall pay the indebtedness evidenced by the Notes
according to the terms thereof.

                                       11
<PAGE>

            (b) It shall timely pay or perform, as the case may be, all of its
respective Obligations to WSCC, direct or contingent, however evidenced or
denominated, and however and whenever incurred, including but not limited to
indebtedness incurred pursuant to any present or future commitment of WSCC to
it, together with interest thereon, and any extensions, modifications,
consolidations and/or renewals thereof and any notes given in payment thereof.

            (c) It shall pay all other material indebtedness to its creditors
according to the terms thereof, and shall timely pay or perform, as the case may
be, all of its obligations to its other creditors however and whenever incurred.

      5.2.  Financial Statements and Reports. It shall furnish to WSCC the
following:

            (a) no later than when due to be filed with the SEC or three months,
whichever is later after the end of the its fiscal year ends, audited financial
statements, certified by independent public accountants of recognized standing
(which shall be one of the five largest independent public accounting firms in
the United States, or such other independent public accountants of recognized
national or regional standing as may be approved by WSCC, such approval not to
be unreasonably withheld), prepared in accordance with generally accepted
accounting principles and practices consistently applied;

            (b) by the end of the third week of each calendar month, its
internally prepared financial statements prepared in a manner consistent with
those prepared in the prior months.

            (c) with reasonable promptness, such other financial data, including
without limitation, summary of accounts receivable ageings, as WSCC may
reasonably request.

            (d) without WSCC's prior written consent, it shall not modify or
change any accounting policies or procedures, including its fiscal year, in
effect on the date hereof.

      5.3.  Maintenance of Books and Records; Inspection. It shall maintain its
books, accounts and records in accordance with generally accepted accounting
principles consistently applied, and, after reasonable notice from WSCC, permit
WSCC and the Small Business Administration (the "SBA") and their respective
officers and employees, and any other professionals designated by WSCC in
writing, to visit and inspect any of its properties, company books and financial
records, and to discuss its accounts, affairs and finances with its principal
officers during reasonable business hours, all at such times as WSCC may
reasonably request; provided that no such inspection shall materially interfere
with the conduct of business of either.

      5.4.  Insurance. Without limiting any of the requirements of any of the
other Investment Documents, it shall maintain, in amounts customary for entities
engaged in comparable business activities, (a) to the extent required by
applicable law, worker's compensation insurance (or maintain a legally
sufficient amount of self-insurance against worker's compensation liabilities,
with adequate reserves, under a plan approved by WSCC (such approval not to be
unreasonably withheld or delayed), and (b) fire and "all risk" casualty
insurance on its properties against such hazards and in at least amounts
customary in Systems' and Group's business. It will obtain and maintain public
liability insurance in an amount, and at a cost, deemed reasonable to its Board
of Directors. At the request of WSCC, it will deliver forthwith a certificate
specifying the details of such insurance in effect.

                                       12
<PAGE>

      5.5.  Taxes and Assessments. It shall (a) file all tax returns and
appropriate schedules thereto required to be filed under applicable law, before
the date of delinquency, (b) pay and discharge all taxes, assessments and
governmental charges or levies imposed on its income and profits or on any
properties belonging to it, before the date penalties attach and (c) pay all
taxes, assessments and governmental charges or levies that, if unpaid, might
become a lien or charge on any of its properties; provided, however, that either
in good faith may contest any such tax, assessment, governmental charge or levy
described in (b) and (c) so long as appropriate reserves in accordance with
generally accepted accounting principles are maintained with respect thereto.

      5.6.  Legal Existence. Systems shall maintain its existence and good
standing in the State of Delaware, and its qualification and good standing as a
foreign corporation in each jurisdiction in which such qualification is
necessary pursuant to applicable law. Group shall maintain its existence and
good standing in the State of New York, and its qualification and good standing
as a foreign corporation in each jurisdiction in which such qualification is
necessary pursuant to applicable law.

      5.7.  Compliance with Law and Other Agreements. Except where the failure
to do so would not materially adversely affect its operations, properties,
financial condition or its ability to fulfill its respective Obligations under
the Investment Documents, Group shall maintain its business operations and
property owned or used in connection therewith in compliance with (a) all
applicable federal, state and local laws, regulations and ordinances governing
such business operations and the use and ownership of such property and (b) all
agreements, licenses, franchises, indentures and mortgages to which it is a
party or by which it or any of its properties is bound. Without limiting the
foregoing, it shall pay all of its material indebtedness promptly in accordance
with the terms thereof.

      5.8.  Notice of Default; Perceived Breach. Group shall give written notice
to WSCC at any time it becomes actually aware of the occurrence of any default,
event of default or Event of Default under this Agreement, any other Investment
Document and any other material indebtedness of it promptly on the occurrence
thereof.

      5.9.  Notice of Litigation. It shall give notice, in writing, to WSCC of
(a) any actions, suits or proceedings not covered unconditionally by insurance,
instituted by any persons whomsoever against it or affecting any of its assets
in which the amount at issue is in excess of $250,000, (b) any dispute, not
resolved within 60 days of the commencement thereof, between it on the one hand
and any governmental regulatory body on the other hand, that might materially
interfere with its normal business operations and (c) any litigation instituted
by it claiming damages in excess of $250,000.

      5.10. Conduct of Business. It will continue to engage in a business of the
same general type and manner as conducted by it on the date of this Agreement.

      5.11. ERISA Plan. If it has in effect, or hereafter institutes, a Plan
subject to the requirements of ERISA, then the following warranties or
covenants, as the case may be, shall be applicable during such period any Plan
is in effect (a) it warrants that no fact that might constitute grounds for the
involuntary termination of the Plan, or for the appointment by the appropriate
United States District Court of a trustee to administer the Plan, exists or
shall exist,

                                       13
<PAGE>

(b) throughout the existence of the Plan, its contributions under the Plan will
meet the minimum funding standards required by ERISA and it will not institute a
distress termination of the Plan and (c) it will send to WSCC a copy of any
notice of a reportable event (as defined in ERISA) required by ERISA to be filed
with the Labor Department or the Pension Benefit Guaranty Corporation, at the
time that such notice is so filed.

      5.12. Dividends, Distributions, Share Rights, etc. Without the prior
written consent of WSCC, except as required by instruments existing as of the
date hereof or by the terms of the Rights Offering, as defined below, Group and
Systems shall not (i) declare or pay any dividend of any kind nor make any
distribution of any kind in cash or property in respect thereof nor make any
return of capital to shareholders, except to the extent permitted under the ACFC
Documents, (ii) make any payments in cash or property in respect of any Share
options or similar plans or (iii) grant any preemptive rights with respect to
its Shares. WSCC's consent shall not be required should Group offer and sell
shares of Systems' capital stock to Group's shareholders in an offering
registered with the Securities and Exchange Commission (the "Systems Rights
Offering"). Without the prior written consent of WSCC, except as required by
instruments existing as of the date hereof or by the terms of the Systems Rights
Offering, Group and Systems shall not redeem, purchase or otherwise acquire any
of its outstanding Shares, except as may be required or permitted under its
respective Investor Rights Agreement.

      5.13. Debt. Except as is set forth on Schedule 5.13, without the prior
written consent of WSCC, it shall not create, incur, assume or suffer to exist
indebtedness of any description whatsoever, excluding:

            (a) the indebtedness of Systems to ACFC pursuant to the ACFC Credit
Agreement;

            (b) the indebtedness of Group evidenced by the Notes;

            (c) the endorsement of negotiable instruments payable to it for
deposit or collection in the ordinary course of business;

            (d) trade payables incurred in the ordinary course of its business;

            (e) the indebtedness listed on Schedule 5.13 or that is approved in
writing by WSCC;

            (f) indebtedness incurred to acquire equipment or other goods on a
purchase money basis, secured only by a lien against the asset acquired and for
which indebtedness does not exceed $100,000 each at any time.

            (g) indebtedness incurred for capitalized lease obligation that in
any fiscal year equals no more than $100,000 each.

            (h) indebtedness to banks or other commercial financial institutions
to fund working capital needs.

                                       14
<PAGE>

      5.14. No Liens. Without the prior written consent of WSCC, Group shall not
create, incur, assume or suffer to exist any lien, security interest, security
title, mortgage, deed of trust or other encumbrance upon or with respect to any
of its assets, now owned or hereafter acquired, except the following permitted
liens (the "Permitted Liens"):

            (a) Group and Systems liens in favor of ACFC in existence on the
date of this Agreement;

            (b) liens in favor of WSCC;

            (c) liens for taxes or assessments or other governmental charges or
levies if not yet due and payable;

            (d) liens on leased equipment granted in connection with the leasing
of such equipment in favor of the lessor of such equipment;

            (e) liens described on Schedule 4.1(t) or Schedule 5.13 or which are
approved in writing by WSCC;

            (f) liens on personal property solely acquired with the proceeds of
or pursuant to a purchase money financing permitted by Section 5.14 above; and

            (g) liens granted banks or other commercial financial institutions
to fund working capital needs.

      5.15. Mergers, Consolidations, Acquisitions and Sales. Other than the
Systems Rights Offering, without the prior written consent of WSCC, Group shall
not (a) be a party to any merger, consolidation or reorganization, (b) purchase
or otherwise acquire all or substantially all of the assets or stock of, or any
partnership or joint venture interest in, any other person, firm or entity, (c)
sell, transfer, convey or lease all or any substantial part of its assets or (d)
create any subsidiaries or convey any of its assets to any subsidiary.

      5.16. Transactions With Affiliates. It shall not enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any affiliate, except in the
ordinary course of and, pursuant to the reasonable requirements of its business
and on fair and reasonable terms no less favorable to it than either would
obtain in a comparable arm's length transaction with a person not an affiliate.
For the purposes of this Section 5.16, "affiliate" means a person, corporation,
partnership or other entity controlling, controlled by or under common control
with Group.

      5.17. Environment. It shall (i) be and remain in compliance in all
material respects with the provisions of all federal, state and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations issued thereunder, (ii) notify WSCC immediately of any notice of a
hazardous discharge or environmental complaint received from any governmental
agency or any other party, (iii) notify WSCC immediately of any hazardous
discharge from or affecting its premises, (iv) immediately contain and remove
the discharge, in compliance with all applicable laws, (v) promptly pay any fine
or penalty assessed in connection therewith and

                                       15
<PAGE>

(vi) permit WSCC, at WSCC's sole cost and expense, to inspect its premises, to
conduct tests thereon and to inspect all books, correspondence and records
pertaining thereto.

      5.18. Guaranty Fee. On each anniversary date of this Agreement, Systems
shall pay WSCC a cash fee (the "Guaranty Fee") in an amount equal to $12,000
(representing 3% of the amount of the ACFC Facility guaranteed by WSCC).

      5.19. Zaino. Group shall cause Gene F. Zaino ("Zaino") to remain the
President of Group. Systems shall cause Zaino to remain the Chairman of its
Board of Directors.

                                    ARTICLE 6
                                     CLOSING
                                     -------

      6.1.  Closing.

            (a) Group's and Systems' counsel, Gadsby Hannah LLP, delivers to
WSCC, its opinion, in the form of Exhibit 6.1(a). It is acknowledged that such
opinion will be qualified by an assumption that Group and Systems are
financially solvent.

            (b) Group executes and delivers the Notes to WSCC.

            (c) Systems executes and delivers to WSCC (i) the Systems Investor
Rights Agreement, (ii) the Systems Registration Rights Agreement, (iii) the
Systems Security Agreement and (iv) all other Investment Documents to which it
is a party required by WSCC.

            (d) Group executes and delivers to WSCC (i) the Notes, (ii) the
Group Investors Right Agreement, (iii) the Group Security Agreement and (iv) all
other Investment Documents to which it is a party required by WSCC.

            (e) Each of Group and Systems delivers to WSCC copies of its
Certificate of Incorporation and Bylaws, certified by its Secretary.

            (f) Each of Group and Systems delivers to WSCC certified (as of the
date of this Agreement) copies of all action taken by each of them, including
resolutions of its Board of Directors, authorizing the execution, delivery and
performance of the Investment Documents.

            (g) Systems delivers to WSCC a certificate as to the legal existence
of the Systems, issued by the Secretary of State of Delaware. Group delivers to
WSCC a certificate as to the legal existence of the Group, issued by the
Secretary of State of New York.

            (h) Group and Systems deliver to WSCC forms and reports required by
the U.S. Small Business Administration including without limitation Forms 480,
652 and Part A of Form 1031 regarding each of Group and Systems, and such other
documents required by the U.S. Small Business Administration from time to time.

            (i) System delivers the certificate representing the Systems
Preferred Stock.

                                       16
<PAGE>

                                    ARTICLE 7
                                  SUBORDINATION
                                  -------------

      7.1. Group Financing. As long as no default or Event of Default with
respect to Group under any Investment Document shall exist or be continuing,
WSCC shall subordinate its secured position with respect to the Collateral of
Group to the lien of any bank or commercial financial institution providing
working capital financing to Group under terms and conditions acceptable to
WSCC.

      7.2. Systems Financing. As long as no default or Event of Default with
respect to Systems under any Investment Document shall exist or be continuing,
WSCC shall subordinate its secured position with respect to the Collateral of
Systems to the lien of any bank or commercial financial institution providing
working capital financing to Systems under terms and conditions acceptable to
WSCC.

                                    ARTICLE 8
                                SEPARATE ENTITIES
                                -----------------

      8.1. Separate Entities. Anything to the contrary in any Investment
Document notwithstanding, each of Group and Systems (singularly, a "Company"
and, together, the "Companies") shall for all purposes be treated under the
Investment Documents as separate and distinct entities. Without limitation of
the foregoing, to that end, (1) no provision in any Investment Document
providing for cross-default and/or cross collateralization of the Obligations of
either Company shall be of any force or effect, (2) all representations and
warranties and post-Closing warrants of the Companies shall not be joint and
several but only deemed made by each Company with respect to itself and (3) any
Event of Default shall only be triggered by a Event of Default of the Company in
which it occurred.

                                   ARTICLE 9
                              DEFAULT AND REMEDIES
                              --------------------

      9.1.  Events of Default. The occurrence of any of the following shall
constitute an Event of Default hereunder with respect to the specific Company
causing the Event of Default:

            (a) Default by Group in the payment of the principal of or interest
on the indebtedness evidenced by the Notes in accordance with the terms of the
Notes, which default is not cured within 10 days;

            (b) Any material misrepresentation by it as to any material matter
hereunder or under any of the other Investment Documents, or in any schedule,
statement, resolution, report, certificate, notice or writing to WSCC on the
date as of which the facts set forth therein are stated or certified;

            (c) Its failure to perform any of the Obligations, or its covenants
or agreements under this Agreement or any of the other Investment Documents
(beyond any applicable grace or cure period);

                                       17
<PAGE>

            (d) It (i) generally does not pay or is unable to pay its debts as
such debts become due, or (ii) makes an assignment for the benefit of creditors
or petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its assets, or (iii)
commences any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or (iv) has any such petition
or application filed or any such proceeding commenced against it that is not
dismissed within 60 days, or (v) indicates, by any act or intentional and
purposeful omission, its consent to, approval of or acquiescence in any such
petition, application, proceeding or order for relief or the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets, or
(vi) suffers any such custodianship, receivership or trusteeship to continue
undischarged for a period of 60 days or more;

            (e) It is liquidated, dissolved, partitioned or terminated, or the
charter thereof expires or is revoked;

            (f) A default or event of default occurs under any of the other
Investment Documents and, if subject to a cure right, such default or event of
default is not cured by it within the applicable cure period;

            (g) It defaults in the timely payment or performance of any
obligation now or hereafter owed to WSCC in connection with any other
indebtedness of it now or hereafter owed to WSCC;

            (h) It defaults in the timely payment of or performance of any
covenant relating to any other indebtedness or obligation, which materially
adversely affects its operations, properties or financial condition;

            (i) Systems defaults in any manner whatsoever under the terms of the
ACFC Credit Agreement and its related documents; or

            (j) Systems fails to pay currently any and all dividends on the
Systems Preferred Stock held by WSCC.

      With respect to any Event of Default described above capable of being
cured and that does not already provide its own cure procedure (a "Curable
Default"), the occurrence of such Curable Default shall not constitute an Event
of Default hereunder if such Curable Default is fully cured and/or corrected
within 30 days (10 days, if such Curable Default may be cured by payment of a
sum of money) of notice thereof to it given in accordance with the provisions
hereof; provided, however, that this provision shall not require notice to
either Group or Systems and an opportunity to cure any Curable Default of which
it has had actual knowledge for the requisite number of days set forth.

      9.2. Acceleration of Maturity; Remedies for Group Default. On the
occurrence of any Event of Default described in subsection 8.1(d) with respect
to Group, the indebtedness evidenced by the Notes as well as any and all other
indebtedness of Group to WSCC shall be immediately due and payable in full; and
on the occurrence of any other Event of Default described above, WSCC at any
time thereafter may at its option accelerate the maturity of the indebtedness
evidenced by the Notes as well as any and all other indebtedness of Group to

                                       18
<PAGE>

WSCC, all without notice of any kind. On the occurrence of any such Event of
Default and the acceleration of the maturity of the indebtedness evidenced by
the Notes:

            (a) WSCC shall be immediately entitled to exercise any and all
rights and remedies possessed by WSCC pursuant to the terms of the Notes and all
of the other Investment Documents; and

            (b) WSCC shall have any and all other rights and remedies that WSCC
may now or hereafter possess at law, in equity or by statute.

      9.3. Immediate Redemption; Remedies for Systems Default. On the occurrence
of any Event of Default described in Section 8.1(d) with respect to Systems:

            (a) WSCC shall immediately have the right to require the immediate
redemption by Systems, at par value, together with any unpaid dividends, of all
shares of the Systems Preferred Stock; and

            (b) WSCC shall have any and all other rights and remedies that WSCC
may now or hereafter possess at law, in equity or by statute.

      9.4. Remedies Cumulative; No Waiver. No right, power or remedy conferred
on or reserved to WSCC by this Agreement or any of the other Investment
Documents is intended to be exclusive of any other right, power or remedy, but
each and every such right, power and remedy is cumulative and concurrent and in
addition to any other right, power and remedy given hereunder, under any of the
other Investment Documents or now or hereafter existing at law, in equity or by
statute. No delay or omission by WSCC to exercise any right, power or remedy
accruing on the occurrence of any Event of Default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein, and every right, power and remedy
given by this Agreement and the other Investment Documents to WSCC may be
exercised from time to time and as often as may be deemed expedient by WSCC.

      9.5. Proceeds of Remedies. Any or all proceeds resulting from the exercise
of any or all of the foregoing remedies shall be applied as set forth in the
Investment Document(s) providing the remedy or remedies exercised, if none is
specified, or if the remedy is provided by this Agreement, then as follows:

      First, to the costs and expenses, including without limitation reasonable
attorneys' fees and disbursements, incurred by WSCC in connection with the
exercise of its remedies;

      Second, to the expenses of curing the default that has occurred, in the
event that WSCC elects, in its sole discretion, to cure the default that has
occurred;

      Third, to the payment of the Obligations of either Systems or of Group,
including but not limited to, with respect to Group, the payment of the
principal of and interest on the indebtedness evidenced by the Notes, in such
order of priority as WSCC shall determine in its sole discretion; and

                                       19
<PAGE>

      Fourth, the remainder, if any, to Group or to Systems or to any other
person lawfully thereunto entitled.

                                   ARTICLE 10
                                   TERMINATION
                                   -----------

      10.1. Termination of this Agreement. Unless amended to state otherwise, in
a writing signed by the parties affected, this Agreement shall remain in full
force and effect with respect to each of Group and Systems until the
indefeasible payment or performance by it of all of its Obligations; provided,
however, that (a) the indemnities provided in Section 11.15 shall survive the
termination of this Agreement, and (b) the representations and warranties
contained in Article 4 of this Agreement shall continue to survive as an
inducement for the overall investment of WSCC, and (c) Group and Systems will
continue to be obligated to comply with Sections 5.2 and 5.3 of this Agreement
and its respective Investor Rights Agreement and all other still operative
Investment Documents.

                                   ARTICLE 11
                                  MISCELLANEOUS
                                  -------------

      11.1. Performance By WSCC. If either Systems or Group defaults in the
payment, performance or observance of any covenant, term or condition of this
Agreement, which default is not cured within the applicable cure period, then
WSCC or its nominee or agent authorized in writing by WSCC may, at its or their
option, pay, perform or observe the same, and all payments made or costs or
expenses incurred by WSCC in connection therewith (including but not limited to
reasonable attorneys' fees based on such attorneys' standard hourly rates and
actual time expended), with interest thereon at the highest default rate
provided in the Notes, shall be immediately repaid to WSCC by the defaulting
Company and constitute a part of the Company's Obligations. WSCC shall act as
the sole judge of the necessity for any such actions and of the amounts to be
paid. Notwithstanding any provision to the contrary in this Section 11.1 and
this Agreement, WSCC's rights pursuant to this Section 11.1 are subject to the
rights of ACFC set forth in the ACFC Documents.

      11.2. Successors and Assigns Included in Parties. Whenever in this
Agreement one of the parties is named or referred to, the heirs, legal
representatives, successors, successors-in-title and assigns of such party shall
be included, and all covenants and agreements contained in this Agreement by or
on behalf of Systems or Group or by or on behalf of WSCC shall bind and inure to
the benefit of its respective heirs, legal representatives, successors-in-title
and assigns, whether so expressed or not.

      11.3. Costs and Expenses. Group and Systems shall pay all reasonable costs
and expenses incurred by WSCC in connection with the execution of this
Agreement, including but not limited to filing fees, recording taxes and
reasonable attorneys' fees. Each of the Companies shall pay all premiums for
insurance required to be maintained by it pursuant to the terms of the
Investment Documents. Group will pay all of the out-of-pocket costs and expenses
incurred by WSCC in connection with the collection of the Note, or prepayment of
the Note, including but not limited to reasonable attorneys' fees, promptly on
demand of WSCC. If any Investment

                                       20
<PAGE>

Document is amended, the Company to which it is a party shall pay all costs of
the amendment, including but not limited to reasonable attorneys' fees, promptly
on demand of WSCC.

      11.4. Assignment. The Notes, this Agreement and the other Investment
Documents may be endorsed, assigned and/or transferred in whole or in part by
WSCC, and any such holder and/or assignee of the same shall succeed to and be
possessed of the rights and powers of WSCC under all of the same to the extent
transferred and assigned. WSCC may grant participations in all or any portion of
its interest in the indebtedness evidenced by the Notes, and in such event Group
or Systems, as the case may be, shall continue to make any payments due under
the Investment Documents to WSCC or its assignee or agent of which notice has
been given by WSCC to Group or Systems and WSCC shall have the sole
responsibility of allocating and forwarding such payments in the appropriate
manner and amounts. Neither Group nor Systems shall assign any of its rights nor
delegate any of its duties hereunder or under any of the other Investment
Documents without the prior written consent of WSCC.

      11.5. Time of the Essence. Time is of the essence with respect to each and
every covenant, agreement and obligation of Group or Systems hereunder and under
all of the other Investment Documents.

      11.6. Severability. If any provision(s) of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

      11.7. Interest and Loan Charges Not to Exceed Maximum Allowed by Law.
Anything in this Agreement, the Notes or any of the other Investment Documents
to the contrary notwithstanding, in no event whatsoever, whether by reason of
acceleration of the maturity of the unpaid balance of the Notes or otherwise,
shall the interest and other charges agreed to be paid to WSCC for the use of
any monies advanced or to be advanced hereunder exceed the maximum amounts
collectible under applicable laws in effect from time to time. If for any reason
whatsoever the interest or loan charges paid or contracted to be paid by Group
in respect of the indebtedness evidenced by the Notes shall exceed the maximum
amounts collectible under applicable laws in effect from time to time, then ipso
facto, the obligation to pay such interest and/or loan charges shall be reduced
to the maximum amounts collectible under applicable laws in effect from time to
time, and any amounts collected by WSCC that exceed such maximum amounts shall
be applied to the reduction of the principal balance of the indebtedness
evidenced by the Notes and/or refunded to Group so that at no time shall the
interest or loan charges paid or payable in respect of the indebtedness
evidenced by the Notes exceed the maximum amounts permitted from time to time by
applicable law.

      11.8. Article and Section Headings; Defined Terms. Numbered and titled
article and section headings and defined terms are for convenience only and
shall not be construed as amplifying or limiting any of the provisions of this
Agreement.

      11.9. Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement shall be in writing, signed by the
party giving such notice, election or demand and shall be delivered personally,
or sent by certified mail or overnight via nationally

                                       21
<PAGE>

recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery or 3 business days after the date of mailing (or the next business day
after delivery to such courier service), as the case may be, shall be the date
of such notice, election or demand. For the purposes of this Agreement:

The address of WSCC is:             Waterside Capital Corporation
                                    300 E. Main Street, Suite 1380
                                    Norfolk, VA 23510
                                    Attention: J. Alan Lindauer
                                    Telecopy No.: 757-626-0114

with a copy to:                     Williams, Mullen, Clark & Dobbins, P.C.
                                    One Columbus Center, Suite 900
                                    Virginia Beach, VA  23462
                                    Attention: John M. Paris, Jr., Esquire
                                    Telecopy No.: 757-473-0395

The address of Group is:            The Netplex Group, Inc.
                                    1800 Robert Fulton Drive, Suite 250
                                    Reston, VA 20191
                                    Attention:  Gene Zaino
                                    Telecopy No.: (703) 262-5380

The address of Systems is:          Netplex Systems, Inc.
                                    1800 Robert Fulton Drive, Suite 250
                                    McLean, VA  20191
                                    Attention:  Gene Zaino
                                    Telecopy No.: (703) 262-5380

with a copy to:                     Gadsby Hannah LLP
                                    225 Franklin Street
                                    Boston, MA 02110
                                    Attention:  Jeffrey M. Stoler, Esquire
                                                Ron M. Hadar, Esquire
                                    Telecopy No.:  (617) 345-7050

      11.10. Entire Agreement. This Agreement and the other written agreements
between Systems and Group and WSCC represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; provided that pre-existing written agreements
between or among the parties with respect to the investment by WSCC in Group
shall remain in full force and effect except as specifically modified or
cancelled by the Agreement; provided further, if there is a conflict between
this Agreement and any other document executed contemporaneously herewith with
respect to the

                                       22
<PAGE>

Obligations, the provision of this Agreement shall control. The execution and
delivery of this Agreement and the other Investment Documents by Systems and
Group were not based on any fact or material provided by WSCC, nor was either
Systems or Group induced or influenced to enter into this Agreement or the other
Investment Documents by any representation, statement, analysis or promise by
WSCC.

      11.11. Governing Law and Amendments. This Agreement shall be construed and
enforced under the laws of the Commonwealth of Virginia applicable to contracts
to be wholly performed in the Commonwealth, without regard to conflicts of law
principles. No amendment or modification hereof shall be effective except in a
writing executed by WSCC and either Group or Systems, as the case may be.

      11.12. Survival of Representations and Warranties. All representations and
warranties contained herein or in any of the Investment Documents or made by or
furnished on behalf of Group or Systems in connection herewith or in any
Investment Documents shall survive the execution and delivery of this Agreement
and the other Investment Documents.

      11.13. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.

      11.14. Construction and Interpretation. Should any provision of this
Agreement require judicial interpretation, the court interpreting or construing
the provision shall not apply a presumption that the terms hereof shall be more
strictly construed against one party by reason of the rule of construction that
a document is to be more strictly construed against the party that itself or
through its agent prepared it, it being agreed that Group and Systems and WSCC,
and their respective counsels, have participated in its preparation.

      11.15. General Indemnification. Each Company shall, on a several basis,
indemnify WSCC, its officers, directors, employees and agents (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") and each shall
hold each of Indemnified Party harmless from and against any and all losses,
liabilities, damages, costs, expenses and claims of any and every kind
whatsoever (except those arising solely by reason of the gross negligence or
willful misconduct of an Indemnified Party) which may be imposed on, incurred
by, or asserted against the Indemnified Parties or any of them arising by reason
of any action or inaction or omission to any act legally required of such
Company (including without limitation as required pursuant hereto or pursuant to
any other Investment Document) to which such Company is a party.

      11.16. Standard of Care; Limitation of Damages. WSCC shall be liable to
Group or to Systems only for matters arising from this Agreement or otherwise
related to the Obligations resulting from WSCC's gross negligence or willful
misconduct and any and all other liability of WSCC either to Group or to Systems
is waived. WSCC shall not in any event be liable to either Group or Systems for
special or consequential damages arising from this Agreement or otherwise
related to the Obligations.

                                       23
<PAGE>

      11.17. Consent to Jurisdiction; Exclusive Venue. Each of Group and Systems
irrevocably consents to the jurisdiction of the United States District Court for
the Eastern District of Virginia, Norfolk Division, and of all Virginia state
courts sitting in Norfolk, Virginia, for the purpose of any litigation to which
WSCC may be a party and which concerns this Agreement or the Obligations. Each
of Group and Systems accepts that venue for any such action shall lie
exclusively with courts sitting in Norfolk, Virginia, unless WSCC agrees to the
contrary in writing.

      IN WITNESS, the parties have executed this Agreement, or have caused this
Agreement to be executed by their duly authorized officers, as of the day and
year first above written.

                              WATERSIDE CAPITAL CORPORATION

                              By:
                                 ---------------------------------------
                              ---------------------------------------

                              NETPLEX SYSTEMS, INC.

                              By:
                                 ---------------------------------------
                                 Gene F. Zaino, Chief Executive Officer

                              THE NETPLEX GROUP, INC.

                              By:
                                 ---------------------------------------
                                 Gene F. Zaino, President

                                       24

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