Document:

ICG COMMUNICATIONS, INC.

                    CERTIFICATE OF DESIGNATION OF THE POWERS,
                PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
                    AND OTHER SPECIAL RIGHTS OF 8% SERIES A-1
                   CONVERTIBLE PREFERRED STOCK, 8% SERIES A-2
                  CONVERTIBLE PREFERRED STOCK AND 8% SERIES A-3
                        CONVERTIBLE PREFERRED STOCK, AND
                           QUALIFICATIONS, LIMITATIONS
                            AND RESTRICTIONS THEREOF

                            8% Series A-1 Convertible
                            Preferred Stock due 2015

                            8% Series A-2 Convertible
                            Preferred Stock due 2015

                            8% Series A-3 Convertible
                            Preferred Stock due 2015

                ICG  COMMUNICATIONS,  INC., a  company  organized  and  existing
under the  General  Corporation  Law of the State of Delaware  (the  "Company"),
certifies  that  pursuant  to the  authority  contained  in its  Certificate  of
Incorporation  (the  "Certificate  of  Incorporation")   and  its  By-laws  (the
"By-laws"), and in accordance with Section 151 of the General Corporation Law of
the State of Delaware (the  "DGCL"),  the board of directors of the Company (the
"Board of  Directors")  at a meeting  duly called and held on April 6, 2000 duly
approved and adopted the following resolution,  which resolution remains in full
force and effect on the date hereof:

                RESOLVED,  that  pursuant to the  authority  vested in the Board
of Directors  by the  Certificate  of  Incorporation  and By-laws,  the Board of
Directors  does  hereby  create,  authorize  and  provide for the issue of three
series of the Company's  preferred stock, par value $0.01 per share  ("Preferred
Stock"),  having the  following  designation,  voting  powers,  preferences  and
relative, participating, optional and other special rights:

                Certain capitalized terms used herein are defined in Section 17.

         1.   Number and Designation.

                The  Company  shall have  a  series of  Preferred  Stock,  which
shall be designated as its 8% Series A-1  Convertible  Preferred  Stock due 2015
(the "Series A-1 Preferred Stock"). The number of shares constituting the Series
A-1  Preferred  Stock  shall be  50,000.  The  Company  shall  have a series  of
Preferred  Stock,  which shall be  designated  as its 8% Series A-2  Convertible
Preferred  Stock due 2015 (the  "Series  A-2  Preferred  Stock").  The number of
shares  constituting the Series A-2 Preferred Stock shall be 23,000. The Company
shall have a series of  Preferred  Stock,  which shall be  designated  as its 8%
Series A-3  Convertible  Preferred  Stock due 2015 (the  "Series  A-3  Preferred
Stock").  The number of shares constituting the Series A-3 Preferred Stock shall
be 75,000. The Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series
A-3 Preferred Stock are referred to collectively herein, either conjunctively or
disjunctively  as  appropriate  from the  context,  as the  "Series A  Preferred
Stock."  Except  to the  extent  otherwise  specified  in  this  Certificate  of
Designation, the powers, preferences and relative,  participating,  optional and
other  special  rights of the Series A-1 Preferred  Stock,  Series A-2 Preferred
Stock and Series A-3 Preferred  Stock shall be identical and, except as provided

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herein or as may be required by applicable law, the Series A-1 Preferred  Stock,
Series A-2 Preferred  Stock and Series A-3 Preferred Stock shall be treated as a
single class.  Unless otherwise  specified,  references  herein to any "Section"
refer to the Section number specified in this Certificate of Designation.

         2.   Issuance.

                The  Company  may  issue  up  to 50,000  shares  of  Series  A-1
Preferred  Stock,  23,000 shares of Series A-2 Preferred Stock and 75,000 shares
of Series A-3 Preferred Stock,  each in accordance with the Purchase  Agreement;
provided,  however,  that  without the  unanimous  consent of the holders of the
Series A Preferred  Stock the Company shall not issue (i) any additional  shares
of Series A Preferred  Stock such that the aggregate  number of shares of Series
A-1 Preferred  Stock,  Series A-2 Preferred Stock and Series A-3 Preferred Stock
at any one time outstanding  exceeds 75,000 shares,  (ii) more than 2,000 shares
of Series A-3  Preferred  Stock to the initial  purchaser  thereof in accordance
with the  Purchase  Agreement  or (iii)  more than  73,000  shares of Series A-3
Preferred Stock from time to time upon automatic  conversion of shares of Series
A-1  Preferred  Stock or Series A-2  Preferred  Stock into Series A-3  Preferred
Stock as provided in Section 12(i).

         3.   Registered Form; Liquidation Preference; Registrar.

                Certificates  for shares  of Series A  Preferred  Stock shall be
issuable only in registered form. The initial  Liquidation  Preference per share
of Series A Preferred  Stock shall be $10,000 per share plus  accrued and unpaid
dividends.  The Company shall serve as initial Registrar and Transfer Agent (the
"Registrar") for the Series A Preferred Stock.

         4.   Registration; Transfer.

                Shares  of  the  Series   A  Preferred   Stock  have   not  been
registered under the Securities Act of 1933, as amended (the "Securities  Act"),
and may not be resold,  pledged or otherwise  transferred prior to the date when
they may be resold  pursuant to Rule 144 under the Securities Act other than (i)
to the  Company,  (ii)  pursuant to an  exemption  from  registration  under the
Securities Act or (iii) pursuant to an effective  registration  statement  under
the Securities  Act, in each case in accordance  with any applicable  securities
laws of any  state of the  United  States.  Until  such  time as it is no longer
required  pursuant to the Securities Act,  certificates  evidencing the Series A
Preferred  Stock  shall  contain  a  legend  (the  "Restricted  Shares  Legend")
evidencing the foregoing restrictions in substantially the form set forth on the
form of Series A Preferred  Stock attached  hereto as Exhibit A. In the event of
certain  transfers  of shares  of  Series  A-1  Preferred  Stock or  Series  A-2
Preferred  Stock, the transferred  shares shall  automatically be converted into
shares of Series A-3 Preferred Stock as provided in Section 12(i).

         5.   Paying Agent and Conversion Agent.

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               (a) The Company  shall  maintain (i) an  office or  agency  where
shares of Series A Preferred  Stock may be  presented  for payment (the  "Paying
Agent"),  (ii) an office or agency where shares of Series A Preferred  Stock may
be presented  for  conversion (the "Conversion  Agent"),  and (iii) a Registrar,
which shall be an office or an agency where  shares of Series A Preferred  Stock
may be presented for transfer. The Company may appoint the Registrar, the Paying
Agent and  the  Conversion Agent  and may  appoint one or more additional paying
agents and one or  more additional conversion agents  in such other locations as
it  shall determine. The  term "Paying  Agent"  includes any  additional  paying
agent, and the term "Conversion Agent" includes any additional conversion agent.
The Company may change any Paying Agent or Conversion Agent without prior notice
to any holder. The Company shall notify the Registrar of the name and address of
any Paying Agent or  Conversion Agent  appointed by the Company.  If the Company
fails to appoint or maintain another entity as Paying Agent or Conversion Agent,
the Registrar shall act as such.  Notwithstanding the foregoing,  the Company or
any  of  its  Affiliates  may  act  as  Paying Agent, Registrar,  coregistrar or
Conversion Agent.

               (b) Neither  the  Company  nor the  Registrar  shall be  required
(A) to issue, countersign  or  register the transfer  of or  exchange  any share
of Series A Preferred Stock during a period beginning at the opening of business
15 days before any Redemption  Date (as defined under Section  10(d)) and ending
at the close of business on such Redemption Date or (B) to register the transfer
of or exchange any share of Series A Preferred Stock so selected for redemption.

               (c) If shares  of  Series A  Preferred Stock are  issued upon the
transfer, exchange or replacement of shares of Series A Preferred Stock  bearing
the  Restricted Shares Legend, or if a request is made to remove such Restricted
Shares Legend  on shares  of Series A  Preferred Stock, the  shares  of Series A
Preferred Stock so  issued  shall bear  the  Restricted  Shares  Legend, or  the
Restricted Shares Legend shall not be  removed,  as the case may be,  unless the
holders  of  such  shares  shall  request  such Legend be removed,  and  outside
counsel for such  holders reasonably determines that the transfer of such shares
is  no longer  restricted  by the  Securities Act  and outside  counsel  for the
Company  reasonably concurs in such determination.

               (d) Each holder of a share of Series A Preferred  Stock agrees to
indemnify  the  Company  and  the Registrar  against any liability that directly
results  from the  transfer,  exchange or  assignment  by  such  holder of  such
holder's share of Series  A  Preferred  Stock  in   violation  of any  provision
of this Certificate of Designation and/or applicable Federal or state securities
law; provided, however,  that such indemnity  shall not apply to acts of willful
misconduct or gross  negligence on the part of the Company or the Registrar,  as
the case may be.

               (e) Payments due on the shares of Series A Preferred  Stock shall
be payable at the office  or  agency of  the  Paying Agent  maintained  for such
purpose in The City of New York and at any other  office or agency maintained by
the Paying Agent for such  purpose.  If any such  payment  is in cash,  it shall
be  payable  in  United  States  dollars  by  check  drawn on, or  wire transfer
(provided  that  appropriate wire  instructions have been received by the Paying
Agent at least  15 days  prior to  the applicable  date of payment) to  a United
States dollar account  maintained by the holder with, a bank located in New York
City; provided that at the option  of the Company  payment of  dividends in cash
may be made by check mailed to the address  of the person  entitled  thereto  as
such  address  shall  appear in  the  Series  A  Preferred  Share Register;  and

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provided  further that any payment to a holder in  excess of  $100,000  shall be
made by wire  transfer at the request of such holder.

         6.   Dividend Rights.

               (a) The holders of Series A Preferred Stock shall be  entitled to
cumulative dividends, in preference to  dividends on  any Junior  Shares,  which
shall accrue as provided  herein.  Dividends on each share of Series A Preferred
Stock will accrue on a daily  basis at the rate of 8.00%  per  annum of the then
effective Liquidation  Preference of  such share from  and including the Closing
Date to the first to occur of (i) the date on which such  share is  redeemed  in
accordance  with Section 10, (ii) the date on which such share is  converted  in
accordance  with  Section 12  (except  for a  conversion of shares of Series A-1
Preferred Stock  or Series  A-2  Preferred  Stock  into  shares  of  Series  A-3
Preferred  Stock  pursuant  to Section  12(i)) or (iii) the date  the Company is
liquidated, dissolved  or wound  up in accordance  with Section 9(c).  Dividends
shall accrue as  provided  herein  whether  or  not  such  dividends  have  been
declared, whether or not there are any unrestricted funds of the Company legally
available for the payment of dividends and  whether  or not such  dividends  are
then  payable in cash as  provided  in  Section 11.  The  Company will  take all
actions  required or  permitted under the DGCL to permit the  payment or accrual
of  dividends  on the Series A  Preferred  Stock. On each Dividend Payment Date,
commencing June 30, 2000, to and including  the June 30, 2005  Dividend  Payment
Date,  accrued  dividends on a share of  the Series A  Preferred  Stock  for the
preceding  Dividend Period  shall be added cumulatively to and thereafter remain
a  part  of  the  Liquidation  Preference of  such  share.  Thereafter,  accrued
dividends shall be payable quarterly on each Dividend  Payment  Date, commencing
on  September 30, 2005, as  and when declared  out of  funds  legally  available
therefor,  to  the holders  of record of the  Series A Preferred Stock as of the
close of business on the applicable Dividend Record Date. Accrued dividends that
are not paid in full in cash on any such Dividend  Payment Date  (whether or not
declared and whether or not there are sufficient funds legally available for the
payment thereof) shall  be added  cumulatively to  the  Liquidation   Preference
on the applicable  Dividend Payment Date  and thereafter  remain a part thereof.
Accrued  dividends  added to the Liquidation  Preference of a share of  Series A
Preferred  Stock  in accordance  with the foregoing  provisions of this  Section
6(a) are  sometimes referred to in this Certificate as "Accumulated  Dividends".
For  purposes of determining  the  amount of  dividends "accrued" (i)  as of the
first Dividend  Payment Date and  as of any date that  is not a Dividend Payment
Date, such  amount shall  be calculated  on the  basis of  the  rate  per  annum
specified  above in this  paragraph  for the actual  number of days elapsed from
and including the Closing Date (in case of the first  Dividend  Payment Date and
any  date prior  to the  first Dividend  Payment  Date) or  the  last  preceding
Dividend Payment Date (in case of any other date) to  the date  as of which such
determination is  to  be  made,  based  on  a  360-day year, and (ii) as  of any
Dividend  Payment Date after the first Dividend Payment Date, such amount  shall
be  calculated  on the  basis of such  rate per  annum  based on a  360-day year
of twelve 30-day months.  Whenever the Company shall declare or pay any dividend
on any Series A Preferred Stock, the holders of each share of Series A Preferred
Stock shall be  entitled to receive  such  dividend on a per share basis.

               (b) If a  Change of  Control  occurs prior to  June 30, 2005 (the
time and date such Change of Control occurs being the "Change of Control Date"),
an amount  equal to  the Special  Dividend shall  be  added to  the  Liquidation
Preference of  each share  of the Series A  Preferred  Stock as  of  the  Change

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of Control Date and thereafter remain a part thereof. The Special Dividend shall
be added to the  Liquidation  Preference  without  regard to  whether or not the
Company has made or intends to make a Change of Control Offer or Purchase Offer.

               (c) In addition to all dividends provided for above, whenever the
Company shall  declare  or pay  any dividend  in cash on  any Common  Stock, the
holders of Series A Preferred Stock shall be entitled to receive  such  dividend
on an as converted basis. Dividends payable pursuant to this Section  6(c) shall
not reduce any dividends otherwise payable pursuant to Section 6(a) or 6(b).

         7.   Payment  of  Dividend;  Mechanics  of  Payment;  Dividend   Rights
              Preserved.

               (a) Subject  to  Sections 6  and 11, dividends  on  any share  of
Series A Preferred  Stock that  are payable,  and  are  punctually  paid or duly
provided for, on any Dividend Payment  Date shall be paid in cash to the  person
in whose name such share of Series A Preferred Stock (or one or more predecessor
shares of Series A  Preferred  Stock) is registered  at the close of business on
the next preceding March 15, June 15,  September  15  and  December 15 (each,  a
"Dividend  Record Date").

               (b) Except as  required  by  instruments  governing the Preferred
Stock Mandatorily  Redeemable  2009 of the  Company  in  accordance  with  their
terms on the date  hereof,  unless full cumulative  dividends on all outstanding
shares of Series A Preferred Stock for all past Dividend Periods shall have been
declared and paid,  or declared and a sufficient sum for the payment thereof set
apart, then:

                   (i)   no dividend (other  than  (A) with  respect  to  Junior
         Shares,  a dividend  payable solely in Junior Shares,  (B) with respect
         to Parity Shares, a dividend payable  solely in Junior Shares or Parity
         Shares or (C) with respect to Parity  Shares, a partial  dividend  paid
         pro rata on such  Parity  Shares and the  shares of Series A  Preferred
         Stock) shall be declared or paid upon, or any  sum set  apart  for  the
         payment  of  dividends  upon,  any  Junior  Shares  or  Parity  Shares,
         respectively;

                   (ii)  no other distribution shall be  declared  or made upon,
         or any sum set apart  for  the  payment of  any distribution  upon, any
         Junior Shares or Parity Shares;

                   (iii) no  Junior  Shares  or  Parity Shares or any  warrants,
         rights, calls or options (other than any cashless  exercises of options
         or  buybacks of  options or  restricted stock  from  present or  former
         employees, directors  or consultants)  exercisable  for  or convertible
         into any Parity Share or  Junior Share shall be purchased,  redeemed or
         otherwise acquired (other than in exchange for or  conversion  of other
         Junior  Shares or Parity Shares, respectively) by the Company or any of
         its subsidiaries;

                   (iv)  no  monies  shall  be  paid  into or set  apart or made
         available for a sinking or other like fund for the purchase, redemption
         or other  acquisition  of any  Junior  Shares  or Parity  Shares or any
         warrants,  rights, calls or options exercisable for or convertible into
         any  Parity  Shares  or  Junior  Shares by the  Company  or any  of its
         subsidiaries  (other than  any cashless  exercises of options or option
         buybacks); and

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                   (v)   other than in accordance  with Section 13 or 14 of this
         Certificate  of  Designation,  no  Series A Preferred  Stock  shall  be
         purchased,  redeemed or otherwise acquired by the Company or any of its
         subsidiaries  and  no  monies shall  be paid into, or set apart or made
         available for a sinking or other like fund for any such purpose, unless
         all outstanding shares of Series A Preferred  Stock shall be purchased,
         redeemed or otherwise acquired by the Company.

                Except as provided in Sections 6, 12 or 13,  holders of Series
A  Preferred  Stock will not be entitled to any  dividends,  whether  payable in
cash,  property or stock, in excess of the full  cumulative  dividends as herein
described.

               (c) The Company  will  notify the  Registrar  and  make a  public
announcement no later than the close of business on the tenth Business Day prior
to the Record Date for each dividend as to whether it will pay such dividend.

               (d) Subject to  the foregoing  provisions of this Section 7, each
share  of  Series  A  Preferred  Stock  delivered  under  this  Certificate   of
Designation  upon  registration  of transfer of or in exchange for or in lieu of
any other share of Series A Preferred Stock shall carry the rights to  dividends
accumulated and unpaid, and to accrue, that were carried  by such  other  shares
of Series A Preferred Stock.

               (e) The holder of record  of a share of Series A Preferred  Stock
at the close of business on a Dividend  Record Date with  respect to the payment
of dividends on the  shares of  Series A  Preferred Stock  will be  entitled  to
receive such dividends with respect to such share of Series  A  Preferred  Stock
on the corresponding  Dividend Payment Date, notwithstanding  the  conversion of
such  share after such  Dividend Record  Date and prior to such Dividend Payment
Date.

         8.   Voting Rights.

               (a) The  holders of record of shares of Series A  Preferred Stock
shall  not  be  entitled to  any voting rights except as hereinafter provided in
this Section 8 or as otherwise provided by law.

               (b) The holders of record of shares of Series A  Preferred  Stock
shall be  entitled to  vote on all  matters  that  the holders of the  Company's
Common Stock are entitled to vote upon.

               (c) In  addition  to  the  voting  rights  set forth  above,  the
approval  of  the  holders  of  at  least the Applicable  Percentage of the then
Outstanding shares of Series A  Preferred  Stock  voting or  consenting,  as the
case may be,  as one separate class, will be required for the Company to:

                   (i)   amend    the   Certificate   of   Incorporation,   this
         Certificate of Designation or the By-Laws so as to (A) affect adversely
         the rights,  preferences  (including,  without limitation,  liquidation
         preferences,  conversion  price, dividend rate and  Optional Redemption
         provisions),  privileges or  voting  rights of holders of any shares of
         Series A Preferred  Stock, or  (B)  increase or decrease  the number of
         authorized  shares  of Series A  Preferred  Stock,  or  (C)  alter  the
         relative    rights,   preferences   (including,   without   limitation,

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         liquidation  preferences,  conversion price, dividend rate and Optional
         Redemption provisions), privileges or  voting  rights as among  holders
         of the shares of Series A-1 Preferred Stock, Series A-2 Preferred Stock
         or Series A-3 Preferred Stock;

                   (ii)  in  a   single  transaction  or  series    of   related
         transactions,  consolidate  or  merge  with or into,  or sell,  assign,
         transfer, lease, convey or otherwise  dispose  of all or  substantially
         all  of  its  assets  to,  any person or adopt a plan of liquidation or
         dissolution;

                   (iii) enter into, or permit any of its  subsidiaries to enter
         into,  any  agreement   or  transaction   that  would  impose  material
         restrictions  on the  Company's ability to  honor the  exercise of  any
         rights of the holders of the Series A Preferred Stock or on the ability
         of a  holder of shares of  Series A  Preferred Stock  to  exercise full
         rights of ownership thereof;

                   (iv)  other  than  as  contemplated   by  Section  12(d) (vi)
         and  Section  12(d) (vii) or  as  otherwise  required   by  instruments
         governing  securities of the  Company  in  existence  on  the  date  of
         the  Purchase  Agreement  in  accordance with their terms on such date,
         authorize, create, modify the terms of, increase the authorized  amount
         of or issue any shares of any class or series of equity  of the Company
         that  would be deemed to be Parity Shares or Senior Shares with respect
         to rights  relating to (a) payments of dividends or  distributions, (b)
         rights to redemption,  or  (c) distribution of assets upon liquidation,
         dissolution or winding-up, other than issuances of shares of Series A-3
         Preferred  Stock   upon   the  conversion  of  shares  of  Series   A-1
         Preferred  Stock  or  Series  A-2  Preferred Stock  in accordance  with
         Section 12(i); or

                   (v)   commence or effect any tender or exchange offer for all
         or any portion of the Common Stock or permit any subsidiary to do so.

                As  used in  this  Section  8(c),  the  "Applicable  Percentage"
shall mean (A) in the case of clauses  (i) and  (iii),  75%;  (B) in the case of
clause  (ii)  in the  case  of a  transaction  that  constitutes  a  "Qualifying
Transaction",  a  majority,  and in the  case of a  transaction  that  does  not
constitute  a Qualifying  Transaction,  69%; (C) in the case of clause (iv) with
respect to Senior Shares,  75%, and with respect to Parity Shares,  69%; and (D)
in  the  case  of  clause  (v),  a  majority.  As  used  herein,  a  "Qualifying
Transaction"  shall mean a  transaction  in which the  Company  consolidates  or
merges with or into, or sells, assigns, transfers,  leases, conveys or otherwise
disposes  of all or  substantially  all of its  assets  to, a person  (i) if the
Company is the surviving or continuing  person and the Series A Preferred  Stock
shall remain  outstanding  without any amendment that would adversely affect the
preferences,  rights or powers of the Series A Preferred  Stock,  or (ii) if the
Company is not the surviving or continuing person, (a) the entity formed by such
consolidation  or merger or to which such  sale,  assignment,  transfer,  lease,
conveyance  or other  disposition  shall have been made (in any such  case,  the
"resulting  entity") is a corporation or limited liability company organized and
existing  under the laws of Bermuda,  the United  States or any State thereof or
the  District of  Columbia;  and (b) the shares of Series A Preferred  Stock are
converted  into or exchanged  for and become  shares of such  resulting  entity,
having in respect of such resulting entity the same (or more favorable)  powers,
preferences and relative,  participating,  optional or other special rights that
the  shares  of  Series  A  Preferred  Stock  had  immediately   prior  to  such
transaction;  and, in either  case,  the  Company  shall have  delivered  to the

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Registrar  an  Officers'  Certificate  and an  opinion  of  counsel,  reasonably
satisfactory in form and content, each stating that such consolidation,  merger,
conveyance  or transfer  complies  with this  Section 8 and that all  conditions
precedent  herein provided for relating to such  transaction  have been complied
with.

                In  addition  to, and  not in  lieu of, any  approval  otherwise
required pursuant to Section 8(c)(i),  the approval of the holders of a majority
of the outstanding  shares of Series A-1 Preferred  Stock,  Series A-2 Preferred
Stock or Series A-3 Preferred  Stock,  as the case may be, shall be required for
the Company to amend the  Certificate  of  Incorporation,  this  Certificate  of
Designation  or the By-laws so as to affect  adversely  the rights,  preferences
(including,  without  limitation,  liquidation  preferences,  conversion  price,
dividend rate and Optional Redemption  provisions),  privileges or voting rights
of the holders of Series A-1  Preferred  Stock,  Series A-2  Preferred  Stock or
Series A-3 Preferred Stock, respectively.

               (d) (i)  For so long  as  the  members of the  HMTF Group  in the
aggregate  own any combination   of  shares  of  Common  Stock  and  Series  A-2
Preferred   Stock  representing  an  amount  of Common Stock (on an as-converted
basis) that,  taken  together,  equals at least 4,107,143 shares of Common Stock
(as adjusted for any stock dividends, splits and combinations and similar events
affecting  the Common  Stock from time to time), the  holders of the Series  A-2
Preferred Stock,  voting  as a  single class by  a plurality of  the votes cast,
shall be  entitled to elect, at  any annual  meeting of  stockholders or special
meeting  held in  place thereof, or  at a special  meeting of the holders of the
Series A-2 Preferred Stock called  as hereinafter provided, one  director, or if
greater, such number (rounded up to  the next whole  number) equal to 10% of the
then authorized  number  of members of  the  Company's  Board of  Directors,  to
serve on the Board of Directors.  At any  time after voting power to  elect such
director(s)  shall have  become vested and  be continuing in the holders  of the
Series A-2 Preferred  Stock pursuant to this  paragraph,  or if a vacancy  shall
exist  in the office of a  director  elected by  the holders of  the Series  A-2
Preferred  Stock at a time when the holders of the  Series A-2  Preferred  Stock
are  entitled to elect a director  pursuant to this paragraph,  a proper officer
of the Company may, and upon the written request of  the holders of record of at
least  twenty-five  percent  (25%)  of  the  Series A-2  Preferred  Stock   then
outstanding  addressed  to the  Secretary  of the Company shall,  call a special
meeting of the holders of the Series A-2 Preferred Stock for the sole purpose of
electing the director  that such holders are entitled to elect.  If such meeting
shall not be called by a proper  officer of the Company  within twenty (20) days
after personal  service  of said  written request  upon  the  Secretary  of  the
Company,  or within  twenty (20) days after  mailing the same  within the United
States by certified  mail,  addressed  to the  Secretary of the  Company  at its
principal  executive  offices,  then the holders of at least twenty-five percent
(25%) of  the Series A-2  Preferred Stock  then  outstanding  may  designate  in
writing one of their number to call such meeting at the expense of  the Company,
and  such  meeting may  be called by  the person so  designated upon  the notice
required for the annual meeting of stockholders of the Company and shall be held
at the place for holding the annual  meetings of  stockholders.  As used herein,
"HMTF Group" means Hicks, Muse, Tate & Furst Incorporated,  a Texas corporation,
and its  Affiliates and their respective officers, directors, partners, members,
stockholders and employees (and members of their respective  families and trusts
for the primary benefit of such family members) and HM4 ICG Qualified Fund, LLC;
HM4 ICG Private Fund, LLC;  HM PG-IV ICG, LLC; HM 4-SBS  ICG  Coinvestors,  LLC;
HM4-EQ ICG  Coinvestors,  LLC and HMTF  Bridge ICG,  LLC; and  their  respective
Affiliates. The action permitted or required to be taken by the  holders of  the

                                       8
<PAGE>

Series A-2 Preferred  Stock pursuant to this Section 8(d)(i) may be taken (1) at
any annual or special  meeting of  stockholders  or at a special meeting  of the
holders of the Series A-2  Preferred  Stock,  or (2) without a meeting,  without
prior  notice,  and without a vote if a consent or consents in writing,  setting
forth  the action  so taken,  shall be  signed by the holders of  the Series A-2
Preferred  Stock having not less than the minimum number of votes  that would be
necessary to authorize or take such action at a meeting at which all shares held
by the  holders of  the Series A-2  Preferred  Stock  entitled to  vote  thereon
were  present and voted and shall be delivered to the Company by delivery to its
address listed in Section 8.2 of the Purchase Agreement.

                   (ii) For so long as the members of the Liberty  Group  in the
         aggregate  own any  combination  of shares of Common  Stock and  Series
         A-1 Preferred  Stock  representing an amount of Common Stock (on an as-
         converted  basis)  that,  taken  together,  equals 2,687,571 shares  of
         Common  Stock  (as  adjusted  for  any  stock  dividends,   splits  and
         combinations and similar events affecting the Common Stock from time to
         time),  the  holders  of the Series A-1  Preferred  Stock,  voting as a
         single class by a plurality of the votes cast or by written  consent of
         a majority  in  interest  of the  holders  of the Series A-1  Preferred
         Stock,  shall be entitled to elect one  director,  or if greater,  such
         number  (rounded up to the next whole  number) equal to 10% of the then
         authorized  number of members of the Company's  Board of Directors,  to
         serve on the Board of Directors,  at any annual meeting of stockholders
         or special  meeting held in place thereof,  or at a special  meeting of
         the holders of the Series A-1  Preferred  Stock  called as  hereinafter
         provided.  At any time after  voting  power to elect  such  director(s)
         shall have become vested and be continuing in the holders of the Series
         A-1 Preferred Stock pursuant to this  paragraph,  or if a vacancy shall
         exist in the office of a director  elected by the holders of the Series
         A-1  Preferred  Stock at a time  when the  holders  of the  Series  A-1
         Preferred  Stock are  entitled  to elect a  director  pursuant  to this
         paragraph,  a proper  officer of the Company  may, and upon the written
         request of the holders of record of at least twenty-five  percent (25%)
         of the Series A-1  Preferred  Stock then  outstanding  addressed to the
         Secretary of the Company shall,  call a special  meeting of the holders
         of the Series A-1 Preferred  Stock for the sole purpose of electing the
         director that such holders are entitled to elect. If such meeting shall
         not be called by a proper  officer of the  Company  within  twenty (20)
         days after personal  service of said written request upon the Secretary
         of the  Company,  or within  twenty  (20) days after  mailing  the same
         within the United States by certified mail,  addressed to the Secretary
         of the Company at its principal executive offices,  then the holders of
         at least  twenty-five  percent (25%) of the Series A-1 Preferred  Stock
         then  outstanding  may designate in writing one of their number to call
         such  meeting at the expense of the  Company,  and such  meeting may be
         called by the person so  designated  upon the notice  required  for the
         annual meeting of  stockholders of the Company and shall be held at the
         place for holding the annual meetings of stockholders.  As used herein,
         (i)  "Liberty  Group"  means  Liberty  and  its  Affiliates,  and  (ii)
         "Liberty"  means Liberty  Media  Corporation,  a Delaware  corporation,
         provided  that if  substantially  all of the  assets of  Liberty  Media
         Corporation  are at any time  thereafter  contributed  to Liberty Media
         Group LLC, a Delaware limited  liability  company,  then from and after
         such  contribution,  Liberty  shall mean  Liberty  Media Group LLC. The
         action  permitted  or required to be taken by the holders of the Series
         A-1 Preferred Stock pursuant to this Section  8(d)(ii) may be taken (1)
         at any  annual  or  special  meeting  of  stockholders  or at a special
         meeting  of the  holders  of the Series  A-1  Preferred  Stock,  or (2)
         without  a  meeting,  without  prior  notice,  and  without a vote if a

                                       9
<PAGE>

         consent or  consents  in  writing,  setting  forth the action so taken,
         shall be signed by the holders of the Series A-1 Preferred Stock having
         not less than the minimum  number of votes that would be  necessary  to
         authorize  or take such action at a meeting at which all shares held by
         the holders of the Series A-1 Preferred  Stock entitled to vote thereon
         were  present  and voted  and  shall be  delivered  to the  Company  by
         delivery  to  its  address  listed  in  Section  8.2  of  the  Purchase
         Agreement.

                   (iii)For  so  long  as  the  members  of  the  Liberty  Group
         own any  combination of shares of Common Stock and Series A-1 Preferred
         Stock representing an amount of Common Stock (on an as-converted basis)
         that,  taken  together,  equals  8,928,571  shares of Common  Stock (as
         adjusted for any stock  dividends,  splits and combinations and similar
         events  affecting  the Common Stock from time to time),  the holders of
         the Series A-1 Preferred  Stock,  voting as a single class by plurality
         of the votes cast or by written  consent of a majority  in  interest of
         the  holders of the Series A-1  Preferred  Stock,  shall be entitled to
         elect one additional director,  or if greater,  such number (rounded up
         to the next whole number) of additional  directors  equal to 10% of the
         then authorized  number of members of the Company's Board of Directors,
         to  serve  on  the  Board  of  Directors,  at  any  annual  meeting  of
         stockholders or special meeting held in place thereof,  or at a special
         meeting of the  holders of the Series  A-1  Preferred  Stock  called as
         hereinafter  provided.  At any time  after  voting  power to elect such
         director(s)  shall have become  vested and be continuing in the holders
         of the Series A-1 Preferred Stock pursuant to this  paragraph,  or if a
         vacancy shall exist in the office of a director  elected by the holders
         of the Series  A-1  Preferred  Stock at a time when the  holders of the
         Series A-1 Preferred Stock are entitled to elect a director pursuant to
         this  paragraph,  a proper  officer of the  Company  may,  and upon the
         written  request  of the  holders  of  record  of at least  twenty-five
         percent  (25%) of the  Series  A-1  Preferred  Stock  then  outstanding
         addressed to the Secretary of the Company shall, call a special meeting
         of the holders of the Series A-1  Preferred  Stock for the sole purpose
         of electing  the director  that such holders are entitled to elect.  If
         such  meeting  shall not be called by a proper  officer of the  Company
         within twenty (20) days after personal  service of said written request
         upon the  Secretary  of the Company,  or within  twenty (20) days after
         mailing the same within the United States by certified mail,  addressed
         to the  Secretary of the Company at its  principal  executive  offices,
         then the holders of at least  twenty-five  percent  (25%) of the Series
         A-1 Preferred  Stock then  outstanding  may designate in writing one of
         their number to call such  meeting at the expense of the  Company,  and
         such meeting may be called by the person so designated  upon the notice
         required  for the annual  meeting of  stockholders  of the  Company and
         shall  be  held  at the  place  for  holding  the  annual  meetings  of
         stockholders.  The  action  permitted  or  required  to be taken by the
         holders of the Series A-1  Preferred  Stock  pursuant  to this  Section
         8(d)(iii)  may be  taken  (1) at  any  annual  or  special  meeting  of
         stockholders  or at a special  meeting of the holders of the Series A-1
         Preferred  Stock, or (2) without a meeting,  without prior notice,  and
         without a vote if a consent or consents in writing,  setting  forth the
         action so  taken,  shall be signed by the  holders  of the  Series  A-1
         Preferred  Stock having not less than the minimum  number of votes that
         would be  necessary  to  authorize  or take such action at a meeting at
         which all shares held by the holders of the Series A-1 Preferred  Stock
         entitled to vote  thereon were present and voted and shall be delivered
         to the Company by delivery to its address  listed in Section 8.2 of the
         Purchase Agreement.

                                       10
<PAGE>

               (e) In  exercising  the voting  rights set forth in Section 8(b),
each  share  of  Series  A  Preferred  Stock  shall  be  entitled  to vote on an
as-converted basis with the holders of the Company's Common Stock. Except as set
forth in the  preceding  sentence  and in Section  8(d),  each share of Series A
Preferred  Stock  entitled  to vote  shall  have one vote per  share,  provided,
however,  that if the Company  issues any other series of preferred  stock which
has the right to vote with the Series A Preferred Stock as a single class on any
matter not specified in this Section 8, then the Series A Preferred  Stock shall
have  with  respect  to such  matters  one vote  per  $10,000  of the  aggregate
liquidation  preference of all shares of Series A Preferred  Stock; and provided
further  that  without  the  unanimous  consent  of the  holders of the Series A
Preferred Stock, the Company shall not issue any other series of preferred stock
which has the right to vote with the Series A Preferred  Stock as a single class
on any matter not  specified  in this  Section 8,  unless  such other  series of
preferred  stock shall have with respect to such matters one vote per $10,000 of
the  aggregate  liquidation  preference  of all shares of such  other  series of
preferred stock and such issuance is otherwise  permitted  hereunder.  Except as
otherwise  required  by  applicable  law or as set forth  herein,  the shares of
Series A Preferred Stock shall not have any relative, participating, optional or
other special  voting  rights and powers and the consent of the holders  thereof
shall not be required for the taking of any corporate action.

         9.   Ranking; Liquidation.

               (a) The shares of Series A Preferred  Stock will, with respect to
dividend rights and rights on liquidation,  winding-up and dissolution, rank (i)
senior to all shares of Common Stock (whether issued in one or more classes) and
to each other class of capital stock or series of Preferred Stock of the Company
(other than the Preferred Stock Mandatorily  Redeemable 2009 of the Company) the
terms of which do not  expressly  provide that it ranks senior to or on a parity
with the shares of Series A Preferred  Stock as to dividend rights and rights on
liquidation,  winding-up and dissolution of the Company  (collectively  referred
to,  together  with all shares of Common  Stock  (whether  issued in one or more
classes)  of the  Company,  as  "Junior  Shares");  (ii) on a  parity  with  the
Preferred Stock  Mandatorily  Redeemable 2009 of the Company and with each other
class of capital stock or series of Preferred Stock of the Company issued by the
Company in compliance with Section 8, the terms of which expressly  provide that
such class or series will rank on a parity with the shares of Series A Preferred
Stock  as  to  dividend  rights  and  rights  on  liquidation,   winding-up  and
dissolution of the Company  (collectively  referred to as "Parity Shares");  and
(iii) junior to each class of capital stock or series of Preferred  Stock of the
Company  issued by the Company in compliance  with Section 8, the terms of which
expressly  provide  that such class or series  will rank senior to the shares of
Series A  Preferred  Stock as to dividend  rights and rights  upon  liquidation,
winding-up and dissolution of the Company  (collectively  referred to as "Senior
Shares"). The Series A-2 Preferred Stock and Series A-3 Preferred Stock shall be
deemed to be Parity Shares with respect to the Series A-1 Preferred  Stock;  the
Series A-1 Preferred  Stock and Series A-3 Preferred Stock shall be deemed to be
Parity Shares with respect to the Series A-2 Preferred Stock; and the Series A-1
Preferred  Stock and Series  A-2  Preferred  Stock  shall be deemed to be Parity
Shares with respect to the Series A-3 Preferred Stock.

               (b) No dividend whatsoever shall be declared or paid upon, or any
sum set apart for the  payment of  dividends  upon,  any  outstanding  shares of
Series A  Preferred  Stock  with  respect  to any  dividend  period  unless  all
dividends  for all  preceding  dividend  periods have been declared and paid, or

                                       11
<PAGE>

declared and a sufficient sum set apart for the payment of such dividends,  upon
all outstanding Senior Shares.

               (c) In the event of any liquidation, dissolution or winding-up of
the  Company,  whether  voluntary or  involuntary,  the holders of the shares of
Series A Preferred Stock then  Outstanding  shall be entitled to receive,  prior
and in preference to any distribution of any of the assets of the Company to the
holders of shares of Common Stock or Junior Shares by reason of their  ownership
thereof,  an amount equal to the greater of (i) the then  effective  Liquidation
Preference of their shares of Series A Preferred Stock,  plus an amount equal to
all dividends  accrued and unpaid thereon from the last Dividend Payment Date to
the date fixed for  liquidation,  dissolution  or  winding-up or (ii) the amount
such holders  would receive if such holders  converted  their shares of Series A
Preferred  Stock  into  Common  Stock  immediately  prior  to such  liquidation,
dissolution  or winding up. If upon the  occurrence  of such event the assets of
the Company shall be  insufficient  to permit the payment to such holders of the
full preferential amount and all liquidating  payments on all shares of Series A
Preferred Stock and any Parity Shares,  the entire assets of the Company legally
available for distribution  shall be distributed among the holders of the shares
of Series A  Preferred  Stock and the  holders of all Parity  Shares  ratably in
accordance  with the respective  amounts that would be payable on such shares of
Series A  Preferred  Stock and any such  Parity  Shares if all  amounts  payable
thereon were paid in full. After payment of the full  preferential  amount (and,
if  applicable,  an  amount  equal  to a pro rata  dividend  to the  holders  of
Outstanding  shares of Series A  Preferred  Stock),  such  holders  shall not be
entitled to any additional distribution of assets of the Company.

         10.  Redemption.

               (a) The shares of Series A Preferred Stock may be redeemed by the
Company at any time  commencing on or after June 30, 2005, in whole or from time
to time in part, at the election of the Company (an "Optional Redemption"), at a
redemption price (the  "Redemption  Price") payable in cash equal to 100% of the
then  effective  Liquidation  Preference  (after  giving  effect to the  Special
Dividend,  if applicable),  plus accrued and unpaid  dividends  thereon from the
last Dividend  Payment Date to the date of redemption (the "Optional  Redemption
Date").

               (b) Shares of Series A Preferred  Stock (if not earlier  redeemed
or converted) shall be mandatorily redeemed by the Company on June 30, 2015 (the
"Mandatory  Redemption  Date");  provided,  however,  that if such date is not a
Business Day, then the Mandatory Redemption Date shall be the next Business Day,
at a Redemption Price per share in cash equal to the then effective  Liquidation
Preference  (after giving effect to the Special Dividend,  if applicable),  plus
accrued and unpaid dividends  thereon from the last Dividend Payment Date to the
Mandatory Redemption Date.

               (c) In the event of a redemption  of fewer than all the shares of
Series A Preferred  Stock, the shares of Series A Preferred Stock will be chosen
for  redemption  by the  Registrar  from  the  Outstanding  shares  of  Series A
Preferred Stock not previously  called for redemption,  pro rata or by lot or by
such other method as the Registrar  shall deem fair and  appropriate;  provided,
that the Company may redeem (an "Odd-lot Redemption") all shares held by holders
of fewer than 100 shares of Series A Preferred  Stock (or by holders  that would
hold  fewer  than  100  shares  of  Series  A  Preferred  Stock  following  such
redemption) prior to its redemption of other shares of Series A Preferred Stock;

                                       12
<PAGE>

provided,  further,  that the  Company  may not  redeem a  portion  of any share
without redeeming the entire share.  Notwithstanding the foregoing,  the Company
may not  effect an  Odd-lot  Redemption  with  respect to any shares of Series A
Preferred  Stock held by the members of the Liberty Group or the HMTF Group.  If
fewer than all the shares of Series A Preferred  Stock  represented by any share
certificate are so to be redeemed, (i) the Company shall issue a new certificate
for the  shares not  redeemed  and (ii) if any shares  represented  thereby  are
converted  before  termination  of the  conversion  right  with  respect to such
shares,  such  converted  shares  shall be  deemed  (so far as may be) to be the
shares  represented by such share  certificate that was selected for redemption.
Shares of Series A Preferred  Stock that have been converted  during a selection
of shares of Series A  Preferred  Stock to be  redeemed  shall be treated by the
Registrar  as  outstanding  for the  purpose of such  selection  but not for the
purpose of the payment of the Redemption Price.

               (d) In the  event  the  Company  elects  to  effect  an  Optional
Redemption,  the Company shall (i) make a public  announcement of the redemption
and (ii) give a redemption  notice (the "Redemption  Notice") to the holders not
fewer  than 30 days  nor more  than 60 days  before  the  redemption  date  (the
"Redemption Date").  Whenever a Redemption Notice is required to be delivered to
the holders,  such notice shall provide the  information  set forth below and be
given by first class mail,  postage prepaid to each holder of shares of Series A
Preferred Stock to be redeemed, at such holder's address appearing in the Series
A Preferred Share Register.  All Redemption Notices shall identify the shares of
Series A  Preferred  Stock to be  redeemed  (including  CUSIP  number) and shall
state:

                   (i)  the Redemption Date;

                   (ii) the applicable Redemption Price;

                   (iii)if fewer than  all the  outstanding  shares of  Series A
         Preferred  Stock are to be redeemed, the  identification  (and,  in the
         case of partial redemption, the certificate number, the total number of
         shares represented thereby and the number of such shares being redeemed
         on the Redemption  Date) of the particular shares of Series A Preferred
         Stock to be redeemed;

                   (iv) that  on  the  Redemption  Date  the  Redemption  Price,
         together  with all  accrued and unpaid dividends from the last Dividend
         Payment Date to the Redemption Date, will become due and  payable  upon
         each such share of  Series A  Preferred  Stock to be  redeemed and that
         dividends  thereon will cease to accrue on and after said date;

                   (v)  the  conversion  price,  the date on which  the right to
         convert  shares  of  Series  A  Preferred  Stock  to  be redeemed  will
         terminate  and  the  place  or  places  where  such  shares of Series A
         Preferred Stock may be surrendered for conversion; and

                   (vi) the  place  or  places  where  such  shares  of Series A
         Preferred  Stock are  to be surrendered  for payment of the  Redemption
         Price and the other amounts which are then payable.

                The  Redemption  Notice shall be given by the Company or, at the
Company's  request,  by the  Registrar  in the  name and at the  expense  of the
Company;  provided  that if the  Company  so  requests,  it  shall  provide  the

                                       13
<PAGE>

Registrar adequate time, as reasonably  determined by the Registrar,  to deliver
such notices in a timely fashion.

               (e) Prior to any Redemption  Date, the Company shall deposit with
the  Registrar  or with a Paying  Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust) an amount of consideration sufficient
to pay the Redemption  Price of all the shares of Series A Preferred  Stock that
are to be redeemed on that date plus all  accrued and unpaid  dividends  thereon
from the last  Dividend  Payment Date to the  Redemption  Date.  If any share of
Series A Preferred Stock called for redemption is converted,  any  consideration
deposited  with the Registrar or with any Paying Agent or so segregated and held
in trust for the  redemption of such share of Series A Preferred  Stock shall be
paid or  delivered  to the Company  upon  Company  Order or, if then held by the
Company, shall be discharged from such trust.

               (f) Notice of  redemption  having  been given as  aforesaid,  the
shares of Series A Preferred  Stock so to be redeemed  shall,  on the Redemption
Date,  become due and payable at the Redemption Price therein specified plus all
accrued and unpaid dividends  thereon from the last Dividend Payment Date to the
Redemption  Date, and from and after such date (unless the Company shall default
in the  payment  of the  Redemption  Price and  accrued  but  unpaid  dividends)
dividends  on such shares of Series A Preferred  Stock shall cease to accrue and
such shares  shall cease to be  convertible  into shares of Common  Stock.  Upon
surrender  of any such  shares of Series A  Preferred  Stock for  redemption  in
accordance  with said notice,  such shares of Series A Preferred  Stock shall be
redeemed by the Company at the applicable  Redemption  Price,  together with all
accrued and unpaid dividends  thereon from the last Dividend Payment Date to the
Redemption  Date. If any share of Series A Preferred Stock called for redemption
shall not be so paid upon surrender thereof for redemption, the Redemption Price
thereof,  and all accrued and unpaid  dividends  thereon from the last  Dividend
Payment Date to the Redemption Date,  shall,  until paid, bear interest from the
Redemption Date at the dividend rate payable on the shares of Series A Preferred
Stock and such shares shall remain convertible.

               (g) Any certificate that represents more than one share of Series
A Preferred Stock and is to be redeemed only in part shall be surrendered at any
office  or agency of the  Company  designated  for that  purpose  (with,  if the
Company  or  the  Registrar  so  requires,  due  endorsement  by,  or a  written
instrument  of transfer in form  satisfactory  to the Company and the  Registrar
duly  executed  by,  the holder  thereof  or his  attorney  duly  authorized  in
writing), and the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such share of Series A Preferred  Stock without service
charge, a new Series A Preferred Stock certificate or certificates, representing
any number of shares of Series A Preferred Stock as requested by such holder, in
aggregate  amount equal to and in exchange for the number of shares not redeemed
and represented by the Series A Preferred Stock certificate so surrendered.

               (h) If a share of Series A Preferred Stock is redeemed subsequent
to a Dividend  Record Date with respect to any  Dividend  Payment Date and on or
prior to such Dividend Payment Date, then the accrued  dividends payable on such
Dividend  Payment  Date will be paid to the  person in whose  name such share of
Series A Preferred Stock is registered at the close of business on such Dividend
Record Date.

                                       14
<PAGE>

               (i) Any redemption pursuant to this Section 10 shall be made only
to the extent the Company  has  sufficient  funds  legally  available  therefor;
provided that if the shares of Series A Preferred  Stock are not redeemed on the
Mandatory  Redemption  Date  because  sufficient  funds are not  available,  the
Company  shall have a  continuing  obligation  to redeem such shares as and when
sufficient funds become available.

         11.  Method of Payments.

                The  Company  may  make any  dividend  payments  in   cash  with
respect to any dividend period  beginning after June 30, 2005. Any dividends not
paid in cash on a current  basis on the  applicable  Dividend  Payment Date with
respect to all periods after June 30, 2005,  and all  dividends  with respect to
periods  prior to June 30,  2005,  shall  not be paid in cash but  rather  shall
constitute  Accumulated  Dividends.  No  payment  may  be  made  in  respect  of
Accumulated Dividends as dividends. Rather, Accumulated Dividends shall be added
to the Liquidation  Preference.  Dividends may not be paid by delivery of shares
of Series A Preferred Stock.

         12.  Conversion.

               (a) Subject to and upon  compliance  with the  provisions of this
Certificate of Designation,  at the option of the holder  thereof,  any share of
Series A Preferred Stock (including  without  limitation any share of Series A-3
Preferred  Stock  issued  upon  automatic  conversion  of a share of Series  A-1
Preferred  Stock or Series A-2 Preferred Stock pursuant to Section 12(i)) may be
converted  at any time into a number of fully paid and  nonassessable  shares of
Common Stock  (calculated as to each conversion to the nearest 1/100 of a share)
equal to (i) the then effective Liquidation  Preference thereof plus accrued and
unpaid dividends to the date of conversion  divided by (ii) the Conversion Price
in effect at the time of conversion.  Such conversion  right shall expire at the
close of business on the Business Day next  preceding the  Mandatory  Redemption
Date. In case a share of Series A Preferred Stock is called for redemption, such
conversion  right in respect of the share so called shall expire at the close of
business on the Business Day next  preceding  the  Redemption  Date,  unless the
Company defaults in making the payment due upon redemption.

                The  Conversion  Price shall  initially  be  $28.00 per share of
Common Stock.  The  Conversion  Price shall be adjusted in certain  instances as
provided in Section 12(d) and Section 12(e).

               (b) In order to exercise the conversion privilege,  the holder of
any  share of Series A  Preferred  Stock to be  converted  shall  surrender  the
certificate  for such  share,  duly  endorsed  or  assigned to the Company or in
blank,  at any  office or agency of the  Company  maintained  for that  purpose,
accompanied  by written  notice to the Company at such office or agency that the
holder elects to convert such share or, if fewer than all the shares of Series A
Preferred Stock  represented by a single share  certificate are to be converted,
the number of shares represented thereby to be converted.

                Shares of  Series A  Preferred  Stock  shall be  deemed to  have
been  converted  immediately  prior  to the  close  of  business  on the  day of
surrender  of such  shares  for  conversion  in  accordance  with the  foregoing
provisions, and at such time the rights of the holders of such shares as holders

                                       15
<PAGE>

shall cease,  and the person or persons entitled to receive the shares of Common
Stock issuable upon  conversion  shall be treated for all purposes as the record
holder or holders of such  shares of Common  Stock at such time.  As promptly as
practicable on or after the  conversion  date, the Company shall issue and shall
deliver at such office or agency a certificate or certificates for the number of
full shares of Common Stock issuable upon conversion.

                In the  case of any  conversion  of fewer than all the shares of
Series A Preferred  Stock  evidenced by a certificate,  upon such conversion the
Company  shall execute and the Registrar  shall  countersign  and deliver to the
holder thereof, at the expense of the Company, a new certificate or certificates
representing the number of unconverted shares of Series A Preferred Stock.

               (c) No fractional shares of Common Stock shall be issued upon the
conversion  of a share of Series A  Preferred  Stock.  If more than one share of
Series A Preferred  Stock shall be surrendered for conversion at one time by the
same  holder,  the number of full shares of Common Stock which shall be issuable
upon conversion  thereof shall be computed on the basis of the aggregate  number
of shares of Series A Preferred Stock so surrendered.  Instead of any fractional
shares of Common Stock which would  otherwise be issuable upon conversion of any
share of Series A Preferred  Stock,  the Company shall round down to the nearest
whole  share if such  fraction  is an  amount  less than 0.5 and round up to the
nearest  whole share if such  fraction is an amount equal to or greater than 0.5
and shall  issue the  appropriate  number of full  shares of Common  Stock which
shall be issuable upon conversion in accordance with the foregoing.

               (d) The Conversion Price shall be adjusted  from time to time  by
the Company as follows:

                   (i)  If the Company shall hereafter pay  a dividend or make a
distribution to all holders of the outstanding  shares of Common Stock in shares
of Common Stock,  the  Conversion  Price in effect at the opening of business on
the date following the date fixed for the determination of shareholders entitled
to receive such dividend or other  distribution  shall be reduced by multiplying
such  Conversion  Price by a fraction of which the numerator shall be the number
of shares of Common  Stock  outstanding  at the close of  business on the Common
Stock Record Date (as defined in Section 12(d)(vi)) fixed for such determination
and the  denominator  shall be the sum of such  number of  shares  and the total
number  of  shares  constituting  such  dividend  or  other  distribution,  such
reduction to become effective  immediately  after the opening of business on the
day following the Common Stock Record Date. If any dividend or  distribution  of
the type described in this Section 12(d)(i) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

               (ii)  (a) In case the  Company  shall  issue  or sell any  Common
         Stock, or securities  convertible  into  or exercisable or exchangeable
         for shares of Common Stock  (other than  Common  Stock,  or  securities
         convertible  into or exercisable or  exchangeable  for shares of Common
         Stock,  issued (A) pursuant to the  Company's  existing or future stock
         option  plans or  pursuant  to any  other  existing  or  future  Common
         Stock-related director or employee  compensation plan or arrangement of

                                       16
<PAGE>

         the Company  approved by the Board  of Directors  (provided  that, with
         respect to any stock  option  or other  right  granted  after  April 7,
         2000, the per share exercise  price of such option or right is equal to
         or greater than the per share  Closing Price of the Common Stock on the
         date of the grant thereof),  (B)  as consideration  for the acquisition
         of a business or of assets  (provided  that  the fair  market  value of
         such  business or assets,  as  determined by  the Board of Directors in
         good faith,  is equal to or greater than the  aggregate  Current Market
         Price of the  Common  Stock to  be  issued  as  consideration  for such
         acquisition,  in each case  determined  at the time the Company  enters
         into a   binding  agreement  with  respect  to such  acquisition),  (C)
         pursuant  to  warrants  outstanding  on the date  hereof,  (D) upon the
         conversion  of  any  shares of Series A  Preferred  Stock  pursuant  to
         Section 12(a),  (E) upon  the automatic  conversion of shares of Series
         A-1 Preferred  Stock  or Series A-2 Preferred Stock pursuant to Section
         12(i) or (F) upon  exercise or conversion of any security the issuance
         of  which  caused  an  adjustment  under the  provisions  hereof or the
         issuance  of  which  did  not  require  adjustments  hereunder),  for a
         consideration   per  share  (or,   in  the  case  of   convertible   or
         exchangeable  securities  having  a  conversion  or exchange  price per
         share of Common  Stock)  less  than  the  Current  Market  Price of the
         Common  Stock on the date  of such  issuance  the  Conversion  Price in
         effect  immediately  prior  to such  issuance  or sale shall be reduced
         effective  as  of  immediately  following  such  issuance  or  sale  by
         multiplying  such Conversion Price by a fraction,  (1) the numerator of
         which  shall be  the sum of (x) the  number of  shares of Common  Stock
         outstanding  immediately  prior  to such  issuance  or sale and (y) the
         number of shares of  Common  Stock  which the  aggregate  consideration
         receivable by  the Company for the total number of additional shares of
         Common Stock  so issued or sold (or issuable on conversion, exercise or
         exchange)  would  purchase  at  the  Current  Market  Price  in  effect
         immediately  prior to  such issuance or sale and (2) the denominator of
         which  shall  be the  sum of the  number  of  shares  of  Common  Stock
         outstanding  immediately  prior to such issuance or sale and the number
         of additional  shares of  Common Stock to be issued or sold (or, in the
         case  of  convertible   or   exchangeable   securities,   issuable   on
         conversion,  exercise or exchange);

                     (b) If the Company shall offer or issue  rights or warrants
          to all  holders of its  outstanding  shares of Common Stock  entitling
          them to subscribe  for or purchase  shares of Common  Stock at a price
          per share less than the Current Market Price (as  defined  in  Section
          12 (d) (viii)) on  the  Common  Stock  Record  Date  fixed   for   the
          determination of shareholders  entitled  to  receive  such  rights  or
          warrants,   the Conversion  Price  shall be  adjusted so that the same
          shall equal the  price  determined by multiplying the Conversion Price
          in effect at the opening  of business on  the date after  such  Common
          Stock Record Date by a fraction  of which the  numerator  shall be the
          number of shares of Common Stock  outstanding at the close of business
          on the Common Stock Record Date plus the  number of shares  of  Common
          Stock which the aggregate offering price of the total number of shares
          of Common Stock subject to such rights or warrants  would purchase  at
          such  Current Market Price and of which  the  denominator shall be the
          number of shares of Common Stock outstanding at the close of  business
          on  the Common Stock  Record Date  plus the total number of additional
          shares  of  Common  Stock  subject  to such  rights  or  warrants  for
          subscription  or  purchase.  Such  adjustment shall  become  effective
          immediately  after the  opening of business on  the day  following the
          Common  Stock Record  Date fixed  for  determination  of  shareholders
          entitled to purchase or receive such rights or warrants. To the extent
          that shares of Common Stock are not delivered  pursuant to such rights

                                       17
<PAGE>

          or  warrants,  upon the  expiration  or termination of such  rights or
          warrants  the  Conversion  Price shall  again be  adjusted  to  be the
          Conversion  Price  which  would  then be in effect had the adjustments
          made  upon the issuance  of such rights or  warrants  been made on the
          basis of  delivery  of only the  number  of  shares  of  Common  Stock
          actually delivered.  If such rights or warrants are not so issued, the
          Conversion  Price shall  again be adjusted to be  the Conversion Price
          which would then be in effect if such date fixed for the determination
          of  shareholders  entitled to receive  such rights or warrants had not
          been fixed. In determining whether any rights or  warrants entitle the
          holders to  subscribe for or  purchase shares of Common Stock  at less
          than  such  Current  Market Price,  and in determining  the  aggregate
          offering price of such  shares of Common  Stock, there shall  be taken
          into  account  (x)  any  consideration  received  for  such  rights or
          warrants, with the value of such  consideration and the amount of such
          exercise or subscription price, if other than cash,  to be  determined
          by the Board of Directors and (y) the amount  of any exercise price or
          subscription price required to be paid upon exercise of  such warrants
          or rights.

               (iii)  If  the  outstanding  shares  of  Common  Stock  shall  be
          subdivided  into a greater  number of  shares  of  Common  Stock,  the
          Conversion  Price in  effect at the  opening  of  business  on the day
          following the day upon which such subdivision  becomes effective shall
          be proportionately reduced, and, conversely, if the outstanding shares
          of Common Stock shall be combined  into a smaller  number of shares of
          Common  Stock,  the  Conversion  Price in  effect  at the  opening  of
          business  on the day  following  the day upon which  such  combination
          becomes effective shall be proportionately  increased,  such reduction
          or increase, as the case may be, to become effective immediately after
          the opening of business on the day  following  the day upon which such
          subdivision or combination becomes effective.

               (iv) If the Company shall,  by dividend or otherwise,  distribute
          to all  holders  of its  shares of Common  Stock any class of  capital
          stock of the Company  (other than any  dividends or  distributions  to
          which Section 12(d)(i) applies) or evidences of its indebtedness, cash
          or other assets  (including  securities,  but  excluding any rights or
          warrants  of a type  referred to in Section  12(d)(ii)(b)  and Spinoff
          Securities and dividends and  distributions  paid  exclusively in cash
          and excluding any capital stock,  evidences of  indebtedness,  cash or
          assets  distributed  upon a merger or  consolidation  to which Section
          12(e)  applies) (the foregoing  hereinafter in this Section  12(d)(iv)
          called the  "Distributed  Securities"),  then, in each such case,  the
          Conversion  Price  shall be reduced so that the same shall be equal to
          the price  determined by multiplying  the  Conversion  Price in effect
          immediately  prior to the close of business on the Common Stock Record
          Date  (as  defined  in  Section   12(d)(viii)  with  respect  to  such
          distribution by a fraction of which the numerator shall be the Current
          Market Price  (determined as provided in Section  12(d)(viii)) on such
          date  less  the fair  market  value  (as  determined  by the  Board of
          Directors,  whose good faith  determination  shall be  conclusive  and
          described in a resolution  of the Board of  Directors) on such date of
          the portion of the Distributed Securities so distributed applicable to
          one share of Common  Stock and the  denominator  shall be such Current
          Market Price, such reduction to become effective  immediately prior to
          the opening of business on the day  following  the Common Stock Record
          Date; provided, however, that, in the event the then fair market value
          (as so  determined)  of the portion of the  Distributed  Securities so
          distributed  applicable  to one share of  Common  Stock is equal to or

                                       18
<PAGE>

          greater than the Current Market Price on the Common Stock Record Date,
          in lieu of the foregoing adjustment,  adequate provision shall be made
          so that each holder of shares of Series A  Preferred  Stock shall have
          the right to receive upon  conversion of a share of Series A Preferred
          Stock(or  any portion  thereof) the amount of  Distributed  Securities
          such holder would have received had such holder  converted  such share
          of Series A Preferred  Stock(or portion thereof)  immediately prior to
          such Common Stock Record Date. If such dividend or distribution is not
          so paid or made,  the  Conversion  Price shall again be adjusted to be
          the Conversion Price which would then be in effect if such dividend or
          distribution  had  not  been  declared.  If  the  Board  of  Directors
          determines the fair market value of any  distribution  for purposes of
          this  Section  12(d)(iv)  by  reference  to the actual or when  issued
          trading  market for any  securities  constituting  all or part of such
          distribution,  it must in doing so consider  the prices in such market
          over the same  period  used in  computing  the  Current  Market  Price
          pursuant to Section 12(d)(vi) to the extent possible.

                Rights or  warrants  distributed  by the Company to  all holders
of shares of Common Stock  entitling  the holders  thereof to  subscribe  for or
purchase  shares of the  Company's  capital  stock  (either  initially  or under
certain  circumstances),  which rights or warrants,  until the  occurrence  of a
specified  event or events  ("Dilution  Trigger  Event"):  (A) are  deemed to be
transferred with such shares of Common Stock;  (B) are not exercisable;  and (C)
are also issued in respect of future issuances of shares of Common Stock,  shall
be deemed not to have been  distributed  for purposes of this Section  12(d)(iv)
(and no adjustment to the Conversion Price under this Section 12(d)(iv) shall be
required) until the occurrence of the earliest Dilution Trigger Event, whereupon
such  rights  or  warrants  shall be  deemed  to have  been  distributed  and an
appropriate  adjustment  to the  Conversion  Price under this Section  12(d)(iv)
shall be made.  If any such  rights or  warrants,  including  any such  existing
rights or warrants distributed prior to the first issuance of shares of Series A
Preferred Stock, are subject to subsequent  events,  upon the occurrence of each
of  which  such  rights  or  warrants  shall  become   exercisable  to  purchase
securities,  evidences of indebtedness  or other assets,  then the occurrence of
each such event shall be deemed to be such date of issuance and record date with
respect  to new rights or  warrants  (and a  termination  or  expiration  of the
existing  rights or  warrants,  without  exercise  by the  holder  thereof).  In
addition, in the event of any distribution (or deemed distribution) of rights or
warrants,  or any Dilution Trigger Event with respect thereto,  that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion  Price under this Section  12(d)(iv) was made, (1) in the case of any
such  rights or  warrants  which  shall all have been  redeemed  or  repurchased
without  exercise  by  any  holders  thereof,  the  Conversion  Price  shall  be
readjusted  upon such final  redemption  or  repurchase  to give  effect to such
distribution or Dilution  Trigger Event, as the case may be, as though it were a
cash distribution to which this Section 12(d)(iv) were applicable,  equal to the
per share  redemption  or  repurchase  price  received by a holder or holders of
shares of Common  Stock with respect to such rights or warrants  (assuming  such
holder had retained such rights or  warrants),  made to all holders of shares of
Common Stock as of the date of such  redemption  or  repurchase,  and (2) in the
case of such rights or  warrants  which  shall have  expired or been  terminated
without  exercise  by  any  holders  thereof,  the  Conversion  Price  shall  be
readjusted as if such rights and warrants had not been issued.

                Notwithstanding  any  other provision of  this Section 12(d)(iv)
to the contrary, rights, warrants, evidences of indebtedness,  other securities,
cash or other assets  (including,  without  limitation,  any rights  distributed

                                       19
<PAGE>

pursuant  to any  shareholder  rights  plan)  shall be  deemed  not to have been
distributed  for purposes of this Section  12(d)(iv) if the Company makes proper
provision so that each holder of shares of Series A Preferred  Stock on the date
fixed for  determination of shareholders  entitled to receive such  distribution
shall receive upon such distribution,  the amount and kind of such distributions
that such  holder  would  have been  entitled  to receive  if such  holder  had,
immediately prior to such determination  date,  converted such share of Series A
Preferred Stock into a share of Common Stock.

                For purposes of  this Section  12(d)(iv) and  Sections  12(d)(i)
and (ii),  any  dividend or  distribution  to which this  Section  12(d)(iv)  is
applicable  that also includes  shares of Common Stock, or rights or warrants to
subscribe  for or purchase  shares of Common  Stock to which  Section  12(d)(ii)
applies (or both),  shall be deemed instead to be (A) a dividend or distribution
of the evidences of  indebtedness,  assets,  shares of capital stock,  rights or
warrants  other than such shares of Common  Stock or rights or warrants to which
Section 12(d)(ii)  applies (and any Conversion Price reduction  required by this
Section  12(d)(iv) with respect to such dividend or  distribution  shall then be
made)  immediately  followed by (B) a dividend or distribution of such shares of
Common  Stock or such  rights or  warrants  (and any  further  Conversion  Price
reduction  required  by  Sections  12(d)(i) or  12(d)(ii)  with  respect to such
dividend or distribution  shall then be made),  except that (1) the Common Stock
Record Date of such dividend or  distribution  shall be substituted as "the date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution", "the Common Stock Record Date fixed for such determination"
and "the Common Stock Record Date" within the meaning of Section 12(d)(i) and as
"the date fixed for the  determination of shareholders  entitled to receive such
rights or warrants",  "the Common Stock Record Date fixed for the  determination
of the share  holders  entitled to receive  such rights or  warrants"  and "such
Common Stock Record Date" for purposes of Section 12(d)(ii),  and (2) any shares
of Common Stock  included in such dividend or  distribution  shall not be deemed
"outstanding at the close of business on the date fixed for such  determination"
for the purposes of Section 12(d)(i).

               (v)  If a  tender  offer  made  by  the  Company  or  any  of its
         subsidiaries  for  all or any portion of the Common  Stock  expires and
         such  tender offer (as amended upon the  expiration  thereof)  requires
         the  payment  to  shareholders  (based  on  the  acceptance  (up to any
         maximum  specified  in the terms of  the  tender  offer)  of  Purchased
         Shares) of  an aggregate  consideration  having a fair market value (as
         determined  by the Board of Directors,  whose good faith  determination
         shall be  conclusive  and  described  in a  resolution  of the Board of
         Directors) that, combined together  with the aggregate of the cash plus
         the fair market  value (as determined by the Board of Directors,  whose
         good  faith  determination  shall  be  conclusive  and  described  in a
         resolution  of the  Board of  Directors)  as of the  expiration of such
         tender offer, of  consideration  payable in respect of any other tender
         offers  by  the  Company  or any of  its  subsidiaries  for  all or any
         portion of  the shares of Common  Stock  expiring  within the 12 months
         preceding  the  expiration of such tender offer and in respect of which
         no  adjustment pursuant to this Section 12(d)(v) has been made, exceeds
         5% of  the net income of the Company  reported  for the 12 month period
         ending with  the fiscal  quarter next  preceding  such payment (the "12
         Month Net Income")  (determined  as of  the last time (the  "Expiration
         Time")  tenders could have been  made pursuant to such tender offer (as
         it may be amended)), then, and  in each such case, immediately prior to
         the opening of  business  on  the day after the date of the  Expiration

                                       20
<PAGE>

         Time,  the  Conversion  Price shall be  adjusted so that the same shall
         equal the price  determined  by  multiplying  the  Conversion  Price in
         effect  immediately  prior to  the close of business on the date of the
         Expiration  Time by a  fraction  of  which the  numerator  shall be the
         number of shares of Common Stock  outstanding  (including any  tendered
         shares) at the Expiration  Time multiplied by the Current  Market Price
         of a share of Common  Stock on the  trading  day  next  succeeding  the
         Expiration Time and the  denominator  shall be  the sum of (x) the fair
         market value (determined as aforesaid) of  the aggregate  consideration
         payable to  shareholders  based on  the  acceptance  (up to any maximum
         specified  in the terms of  the  tender  offer) of all  shares  validly
         tendered  and  not  withdrawn  as of the  Expiration  Time (the  shares
         deemed  so accepted,  up to any such maximum,  being referred to as the
         "Purchased  Shares")  and (y) the  product  of the  number of shares of
         Common Stock outstanding (less any Purchased Shares) at  the Expiration
         Time and the Current Market Price of  the shares of Common Stock on the
         trading day next  succeeding  the Expiration  Time,  such reduction (if
         any) to become effective  immediately prior  to the opening of business
         on the day following the Expiration  Time. If  the Company is obligated
         to purchase shares pursuant to any such  tender offer,  but the Company
         is  permanently  prevented  by applicable  law from  effecting any such
         purchases or all such  purchases  are rescinded,  the Conversion  Price
         shall again be adjusted to be  the Conversion Price which would then be
         in effect if such tender offer  had not been made.  If the  application
         of this  Section  12(d)(v)  to  any  tender  offer  would  result in an
         increase in the Conversion Price, no adjustment shall  be made for such
         tender offer under this Section 12(d)(v).

               (vi) If the Company  effects a Spinoff,  the  Company  shall make
         appropriate  provision so that the  holders of Series A Preferred Stock
         have the right to exchange their  shares of Series A Preferred Stock on
         the effective date of the Spinoff  for (a) shares of Exchange Preferred
         Stock of the Company and (b) shares  of Mirror  Preferred  Stock of the
         issuer of the Spinoff  Securities.  The sum of the  initial liquidation
         preference  of the  shares of  Exchange  Preferred   Stock  and  Mirror
         Preferred  Stock  delivered  in  exchange  for  a  share  of  Series  A
         Preferred Stock will equal the Liquidation  Preference of, plus accrued
         and unpaid  dividends  on, a share of Series  A Preferred  Stock on the
         effective date of the Spinoff. The Mirror  Preferred Stock will have an
         aggregate initial  liquidation  preference  equal to the product of the
         aggregate Liquidation  Preference of, plus accrued and unpaid dividends
         on, the shares of  Series A Preferred Stock exchanged  therefor and the
         quotient  of (x)  the  product of the number (or  fraction)  of Spinoff
         Securities  that  would  have been  receivable  upon such  Spinoff by a
         holder  of   the  number  of  shares  of  Common  Stock  issuable  upon
         conversion of  a share of Series A Preferred Stock immediately prior to
         the record  date for the  Spinoff and the average of the daily  Closing
         Prices of  the  Spinoff  Securities  for the period of ten  consecutive
         trading  days  commencing  on  the  tenth  trading  day  following  the
         effective  date of the  Spinoff,  divided  by (y) the sum of the amount
         determined  pursuant to clause (x),  plus  the fair value of the shares
         of Common Stock and other  securities  or property  (other than Spinoff
         Securities)  that would have  been receivable by a holder of a share of
         Series A Preferred Stock  upon conversion thereof  immediately prior to
         the record date for the  Spinoff  (such fair value to be  determined in
         the case of Common Stock  or other  securities  with a Closing Price in
         the same manner as provided in  clause (x) and  otherwise  by the Board
         of Directors in the exercise of  its judgment).  The shares of Exchange
         Preferred Stock will have  an aggregate initial liquidation  preference

                                       21
<PAGE>

         equal to the difference  between the aggregate  Liquidation  Preference
         of plus  accrued  and  unpaid  dividends  on  the  shares  of  Series A
         Preferred   Stock  exchanged   therefor  and   the  aggregate   initial
         liquidation  preference  of the Mirror Preferred Stock.  From and after
         the  effective  date  of such  Spinoff,  the  holders  of any shares of
         Series A  Preferred  Stock  that have  not been  exchanged  for  Mirror
         Preferred  Stock and  Exchange  Preferred Stock as provided above shall
         have  no conversion  rights under these provisions with respect to such
         Spinoff Securities.

               (vii)  If  the  Company  or a  subsidiary  of  the  Company  (the
         applicable of  the  foregoing  being the  "Offeror")  makes an Exchange
         Offer,  the  Offeror shall  concurrently  therewith  make an equivalent
         offer to  the  holders of Series A  Preferred  Stock  pursuant to which
         such  holders  may  tender  Series A  Preferred  Stock,  based upon the
         number of  shares of Common  Stock into which such  tendered  shares of
         Series  A   Preferred  Stock  are  then  convertible  (and  in  lieu of
         tendering outstanding shares of Common Stock), together with  any other
         consideration  that may be  required  to be  tendered  pursuant  to the
         Exchange Offer, and receive in exchange therefor,  in  lieu of Exchange
         Securities (and other property, if applicable), Mirror  Preferred Stock
         with  an  aggregate  liquidation  preference  equal  to  the  aggregate
         Liquidation  Preference  of  plus  accrued and unpaid  dividends on the
         shares of  Series A Preferred Stock exchanged therefor.  Whether or not
         a holder of  Series A  Preferred  Stock  elects to accept the offer and
         tender Series A Preferred Stock, no  adjustment to the Conversion Price
         will be made in  connection  with  the Exchange  Offer.  If an Exchange
         Offer is made as discussed above, the  Offeror shall, concurrently with
         the  distribution  of the offering  circular  or prospectus and related
         documents to holders of Common Stock,  provide  each holder of Series A
         Preferred Stock with a notice setting forth  the offer described herein
         and describing  the Exchange  Offer,  the  Exchange  Securities and the
         Mirror  Preferred  Stock.  Such  notice  shall  be  accompanied  by the
         offering  circular,  prospectus or similar document provided to holders
         of Common  Stock  in  respect of the  Exchange  Offer and a copy of the
         certificate of  designations (or similar document) proposed to be filed
         by  the Offeror in order to establish the Mirror  Preferred  Stock.  No
         failure  to mail the notice  contemplated  herein or any defect therein
         or in  the mailing  thereof shall affect the validity of the applicable
         Exchange Offer.

               (viii) For purposes of this Section  12(d),  the following  terms
         shall have the meaning indicated:

                "Closing  Price"  with  respect  to any  securities  on any  day
means the  closing  sale price as of 4:00 p.m.  Eastern  Time on such day or any
earlier  final  closing on such day or, if no such sale takes place on such day,
the average of the reported high and low bid prices on such day, in each case on
the Nasdaq National Market, or the New York Stock Exchange,  as applicable,  or,
if such security is not listed or admitted to trading on such national market or
exchange, on the national stock exchange or Commission recognized trading market
in the United  States on which such  security is quoted or listed or admitted to
trading,  or, if not quoted or listed or  admitted  to  trading on any  national
stock exchange or Commission recognized trading market in the United States, the
average of the high and low bid prices of such security on the  over-the-counter
market on the day in  question  as reported  by the  National  Quotation  Bureau
Incorporated or a similar  generally  accepted  reporting  service in the United

                                       22
<PAGE>

States,  or, if not so  available,  in such manner as  furnished by any New York
Stock Exchange  member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the Board of Directors,
whose  determination  shall be  conclusive  and described in a resolution of the
Board of Directors.

                "Common  Stock  Record   Date"  means,   with  respect  to   any
dividend,  distribution  or other  transaction  or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other  applicable  security)  is exchanged  for or
converted into any combination of cash,  securities or other property,  the date
fixed  for  determination  of  shareholders   entitled  to  receive  such  cash,
securities  or other  property  (whether  such  date is  fixed  by the  Board of
Directors or by statute, contract or otherwise).

                "Current  Market Price" means  the average of  the daily Closing
Prices per share of Common Stock for the 10 consecutive trading days immediately
prior to the date in question;  provided, however, that (A) if the "ex" date (as
hereinafter  defined)  for any event  (other than the  issuance or  distribution
requiring such  computation) that requires an adjustment to the Conversion Price
pursuant to Section 12(d)(i),  (ii), (iii), (iv), (v) or (vi) occurs during such
10 consecutive trading days, the Closing Price for each trading day prior to the
"ex" date for such other event shall be adjusted  by  multiplying  such  Closing
Price by the same  fraction by which the  Conversion  Price is so required to be
adjusted  as a result of such  other  event,  (B) if the "ex" date for any event
(other than the  issuance  or  distribution  requiring  such  computation)  that
requires an adjustment to the  Conversion  Price  pursuant to Section  12(d)(i),
(ii), (iii),  (iv),(v) or (vi) occurs on or after the "ex" date for the issuance
or distribution requiring such computation and prior to the day in question, the
Closing  Price for each  trading  day on and after the "ex" date for such  other
event shall be adjusted by  multiplying  such Closing Price by the reciprocal of
the  fraction by which the  Conversion  Price is so required to be adjusted as a
result  of such  other  event  and (C) if the  "ex"  date  for the  issuance  or
distribution  requiring such computation is prior to the day in question,  after
taking into  account any  adjustment  required  pursuant to clause (A) or (B) of
this proviso,  the Closing Price for each trading day on or after such "ex" date
shall be adjusted  by adding  thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner  consistent  with any
good faith determination of such value for purposes of Section 12(d)(iv),  whose
good faith  determination  shall be conclusive  and described in a resolution of
the Board of  Directors)  of the  evidences of  indebtedness,  shares of capital
stock or assets being distributed  applicable to one share of Common Stock as of
the close of  business  on the day before  such "ex" date.  For  purposes of any
computation under Section  12(d)(v),  the Current Market Price on any date shall
be deemed to be the  average  of the daily  Closing  Prices  per share of Common
Stock for such day and the next two succeeding trading days; provided,  however,
that, if the "ex" date for any event (other than the tender offer requiring such
computation)  that requires an adjustment to the  Conversion  Price  pursuant to
Section  12(d)(i),  (ii),  (iii),  (iv),  (v) or (vi)  occurs  on or  after  the
Expiration Time for the tender or exchange offer requiring such  computation and
prior to the day in  question,  the  Closing  Price for each  trading day on and
after the "ex" date for such other event shall be adjusted by  multiplying  such
Closing Price by the reciprocal of the fraction by which the Conversion Price is
so required to be adjusted as a result of such other event. For purposes of this
paragraph,  the term "ex" date (1) when used with  respect  to any  issuance  or
distribution,  means the first  date on which the shares of Common  Stock  trade
regular way on the relevant  exchange or in the  relevant  market from which the
Closing  Price was  obtained  without  the right to  receive  such  issuance  or

                                       23
<PAGE>

distribution,  (2) when used with respect to any  subdivision  or combination of
shares of Common Stock, means the first date on which the shares of Common Stock
trade  regular way on such  exchange  or in such market  after the time at which
such subdivision or combination becomes effective and (3) when used with respect
to any  tender or  exchange  offer  means the first  date on which the shares of
Common  Stock  trade  regular way on such  exchange or in such market  after the
Expiration  Time  of  such  offer.   Notwithstanding  the  foregoing,   whenever
successive  adjustments to the Conversion  Price are called for pursuant to this
Section 12(d), such adjustments shall be made to the Current Market Price as may
be necessary or  appropriate  to effectuate the intent of this Section 12(d) and
to avoid unjust or inequitable results, as determined in good faith by the Board
of Directors.

                "Exchange  Offer"  means  an  issuer  tender  offer  (within the
meaning of Rule  13e-4(a)(2)  of the rules and  regulations  promulgated  by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended,  as such  Rule is in  effect on the date  hereof),  including,  without
limitation, one that is effected through the distribution of rights or warrants,
made to holders of Common  Stock (or to  holders of other  stock of the  Company
receivable by a holder of Series A Preferred Stock upon conversion thereof),  to
issue  stock of the  Company or of a  subsidiary  of the  Company  and/or  other
property to a tendering  stockholder  in exchange for shares of Common Stock (or
such other stock) validly tendered pursuant to such issuer tender offer.

                "Exchange  Preferred  Stock"  means  a   series  of  convertible
preferred stock of the Company, having terms, conditions, designations, dividend
rights, voting powers, rights on liquidation and other preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof that are identical, or as nearly so as is practicable in
the  judgment  of the  Company's  Board of  Directors,  to those of the Series A
Preferred  Stock for which such Exchange  Preferred  Stock is exchanged,  except
that (a) the  liquidation  preference  will be determined as provided in Section
12(d)(vi),  (b) the  running of any time  periods  pursuant  to the terms of the
Series A Preferred  Stock shall be tacked to the  corresponding  time periods in
the Exchange  Preferred  Stock and (c) the Exchange  Preferred Stock will not be
convertible into, and the holders will have no conversion rights thereunder with
respect to the Spinoff Securities.

                "Exchange  Securities"  means  stock  of  the  Company  or  of a
subsidiary  of the Company that is issued in exchange for shares of Common Stock
(or other  stock of the  Company  receivable  by a holder of Series A  Preferred
Stock upon conversion thereof) pursuant to an Exchange Offer.

                "Fair  Market  Value"  means the  amount  which a willing  buyer
would pay a willing seller in an arm's-length transaction.

                "Mirror  Preferred  Stock"  means  convertible  preferred  stock
issued by (a) in the case of a  Spinoff,  the issuer of the  applicable  Spinoff
Securities,  and  (b) in the  case  of an  Exchange  Offer,  the  issuer  of the
applicable  Exchange  Securities,  and having terms,  conditions,  designations,
dividend rights,  voting powers, rights on liquidation and other preferences and
relative,  participating,  optional or other special rights, and qualifications,
limitations  or  restrictions  thereof  that are  identical,  or as nearly so as
practicable in the judgment of the Company's Board of Directors, to those of the
Series A Preferred  Stock for which such Mirror  Preferred  Stock is  exchanged,

                                       24
<PAGE>

except that (i) the  liquidation  preference  will be  determined as provided in
Sections  12(d)(vi) or 12(d)(vii),  as applicable,  (ii) the running of any time
periods pursuant to the terms of the Series A Preferred Stock shall be tacked to
the  corresponding  time periods in the Mirror  Preferred  Stock,  and (iii) the
Mirror  Preferred Stock shall be convertible into the kind and amount of Spinoff
Securities or Exchange  Securities,  as  applicable,  and other  securities  and
property  that the holder of Series A  Preferred  Stock in respect of which such
Mirror  Preferred  Stock is issued  pursuant  to the  terms  hereof  would  have
received  (x) in the  case of a  Spinoff,  in such  Spinoff  had  such  Series A
Preferred  Stock been  converted  immediately  prior to the record date for such
Spinoff and (y) in the case of an Exchange Offer, upon consummation  thereof had
such Series A Preferred  Stock that such holder elects to tender been  converted
and the shares of Common Stock  received upon such  conversion  been tendered in
full pursuant to such  Exchange  Offer prior to the  expiration  thereof and the
same  percentage of such  tendered  shares had been accepted for exchange as the
percentage of validly tendered shares of Common Stock were accepted for exchange
pursuant to such Exchange Offer, as the case may be.

                "Spinoff"  means  the  distribution  in  a  transaction  that is
generally not taxable to the recipients  under the Internal Revenue Code of 1986
(as amended or any equivalent successor statute) of stock of a subsidiary of the
Company as a dividend to all holders of Common Stock.

                "Spinoff Securities"  means stock of a subsidiary of the Company
that is distributed to holders of Common Stock in a Spinoff.

                   (ix) No adjustment in  the Conversion Price shall be required
         unless such  adjustment  would  require an increase  or decrease of  at
         least  1%  in  such  price;   provided,  however,  that any adjustments
         which by reason of this  Section 12(d)(ix) are not required  to be made
         shall be  carried  forward  and  taken  into  account in any subsequent
         adjustment. All calculations under this Section 12 shall be made by the
         Company and shall be made to the  nearest cent.  No adjustment  need be
         made for a change in the par value or no par value of the Common Stock.

                   (x)  Whenever  the  Conversion  Price is  adjusted as  herein
         provided,  the  Company  shall  promptly  file with  the  Registrar  an
         Officer's  Certificate  setting forth  the Conversion  Price after such
         adjustment and setting forth a brief statement  of the  facts requiring
         such  adjustment.  Promptly  after delivery  of such  certificate,  the
         Company shall  prepare a notice of such  adjustment  of the  Conversion
         Price setting forth the adjusted Conversion Price and the date on which
         each adjustment becomes effective and shall  mail  such  notice of such
         adjustment of  the Conversion  Price to each holder of shares of Series
         A Preferred  Stock  at such  holder's  last  address  appearing  on the
         register of  holders  maintained for that purpose within 20 days of the
         effective  date  of such  adjustment.  Failure to deliver  such  notice
         shall not affect the legality or validity of any such adjustment.

                   (xi) In any case in  which this Section  12(d)  provides that
         an adjustment shall become effective  immediately  after a Common Stock
         Record Date for an event,  the Company  may defer until the  occurrence
         of such  event issuing to the holder of any share of Series A Preferred
         Stock converted  after such Common  Stock Record  Date and  before  the

                                       25
<PAGE>

         occurrence of such event the additional shares of Common Stock issuable
         upon such conversion by reason of the adjustment required by such event
         over and above the shares of Common Stock issuable upon such conversion
         before  giving effect to such adjustment.

                   (xii)For  purposes  of this  Section  12(d),  the  number  of
         shares of Common Stock at any time outstanding shall not include shares
         held  in the  treasury  of the  Company  or by any of its Subsidiaries.
         The  Company shall  not pay any dividend or  make any  distribution  on
         shares of Common  Stock held in the  treasury of  the Company or by any
         of its Subsidiaries.

                   (xiii) In  the  event  that a holder  of  Series A  Preferred
         Stock would  be  entitled  to  receive  upon   conversion  thereof  any
         Redeemable  Capital  Stock  and  the  Company  redeems,  exchanges   or
         otherwise acquires all of the outstanding shares or other units of such
         Redeemable  Capital  Stock  (such  event  being a "Redemption  Event"),
         then,  from and after  the effective  date of  such  Redemption  Event,
         the  holders of  shares of  Series A  Preferred Stock  then outstanding
         shall be entitled to receive upon conversion of such shares, in lieu of
         shares or units of such Redeemable Capital  Stock, the kind and  amount
         of shares of  stock and  other securities  and property receivable upon
         the Redemption  Event by a  holder of  the number of shares or units of
         such  Redeemable  Capital  Stock  into  which  such  shares of Series A
         Preferred  Stock  could  have been converted  immediately  prior to the
         effective  date  of  such  Redemption  Event (assuming,  to  the extent
         applicable,  that such holder failed to exercise any rights of election
         with respect  thereto and received per share or unit of such Redeemable
         Capital Stock  the kind and  amount of stock  and other  securities and
         property received per share or unit  by a plurality of the non-electing
         shares or units of such Redeemable  Capital Stock), and (from and after
         the effective date  of such Redemption Event) the holders of the Series
         A Preferred Stock shall have no other  conversion  rights  under  these
         provisions with respect  to such Redeemable Capital Stock. For purposes
         of this Section  12(d)(xiii)  "Redeemable Capital Stock"  means a class
         or series of capital  stock of the  Company  that provides by its terms
         a right in favor of the Company to call, redeem, exchange or  otherwise
         acquire all of the outstanding shares or units of such class or series.

               (e) In case of any  consolidation  of the Company with, or merger
of  the Company  into, any other  Person, or in  case of any merger  of  another
Person  into  the  Company  (other  than a merger  that does not  result  in any
reclassification, conversion, exchange or cancellation of outstanding  shares of
Common Stock of the Company), or in case of any  sale, conveyance or transfer of
all or substantially all the assets of the Company,  the holder of each share of
Series A Preferred Stock shall have the right thereafter, during the period such
share of Series A Preferred  Stock shall be convertible as specified in Section
12(a), to convert  such  share of Series A  Preferred  Stock into  the kind  and
amount  of   securities,  cash   and  other   property   receivable   upon  such
consolidation,  merger,  conveyance  or  transfer  by  a holder of the number of
shares  of  Common  Stock of  the Company  into  which  such  share of  Series A
Preferred  Stock  might  have   been  converted  immediately   prior   to   such
consolidation,  merger,  conveyance  or transfer, assuming such holder of shares
of Common Stock of the Company  failed  to  exercise  his  rights  of  election,
if any,  as  to  the  kind or  amount  of  securities, cash  and  other property
receivable upon  such  consolidation,  merger,  conveyance or transfer (provided
that, if the kind or amount of securities, cash  and other  property  receivable
upon such  consolidation,  merger,  conveyance or transfer  is not the same  for

                                       26
<PAGE>

each  share of  Common  Stock of the  Company  in respect of  which such  rights
of  election  shall  not have  been  exercised ("nonelecting  share"),  then for
the purpose of this  Section 12 the kind and amount  of  securities,   cash  and
other   property   receivable   upon  such  consolidation, merger, conveyance or
transfer by each nonelecting share shall be  deemed to be the kind and amount so
receivable per share by a plurality of the nonelecting shares).  Such securities
shall provide for adjustments which, for events subsequent to the effective date
of the triggering  event, shall be as nearly equivalent as may be practicable to
the adjustments  provided for in this Section 12. The above  provisions  of this
Section  12  shall  similarly  apply  to  successive   consolidations,  mergers,
conveyances or transfers.

              (f) In case:

                   (i)  the  Company  shall  declare  a  dividend (or  any other
         distribution) on its Common Stock payable otherwise than in cash out of
         its earned surplus; or

                   (ii) the Company shall  authorize the granting to all holders
         of its shares of Common Stock of rights or warrants to subscribe for or
         purchase  any  shares  of  capital stock of  any class or  of any other
         rights; or

                   (iii) of any  reclassification  of  the Common  Stock  (other
         than a subdivision or  combination  of the Company's outstanding shares
         of Common  Stock),  or of any  consolidation  or  merger to  which  the
         Company  is a party and for  which  approval of any shareholders of the
         Company is required,  or  the sale, conveyance or  transfer  of all  or
         substantially  all  the  assets  of the Company; or

                   (iv) of the voluntary or involuntary dissolution, liquidation
         or winding-up of the Company; or

                   (v)  the Company shall take  any other action  referred to in
         this Section 12;

                then  the Company  shall  cause to  be filed with the  Registrar
         and at each office or agency  maintained  for the purpose of conversion
         of shares of Series A Preferred  Stock, and shall cause to be mailed to
         all holders at their last  addresses as they shall appear in the shares
         of Series A Preferred Stock Register,  at least 20 Business Days (or 10
         Business Days in any case  specified in clause (i) or (ii) above) prior
         to the applicable date hereinafter  specified, a notice stating (x) the
         date on which a record is to be taken for the purpose of such dividend,
         distribution,  rights or warrants,  or, if a record is not to be taken,
         the date as of which the holders of shares of Common Stock of record to
         be entitled to such dividend,  distribution,  rights or warrants are to
         be  determined  or  (y)  the  date  on  which  such   reclassification,
         consolidation,  merger,  sale,  transfer,  dissolution,  liquidation or
         winding-up is expected to become effective, and the date as of which it
         is expected  that  holders of shares of Common Stock of record shall be
         entitled to exchange their shares of Common Stock for securities,  cash
         or   other   property    deliverable   upon   such    reclassification,
         consolidation,  merger,  sale,  transfer,  dissolution,  liquidation or
         winding-up.  Failure to give the notice  required by this Section 12(f)
         or any defect  therein shall not affect the legality or validity of any
         dividend,    distribution,     right,    warrant,     reclassification,

                                       27
<PAGE>

         consolidation,  merger,  sale,  transfer,  dissolution,  liquidation or
         winding-up, or the vote upon any such action.

               (g) The Company  shall at  all times reserve and keep  available,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock,  for  the  purpose  of  effecting  the  conversion  of shares of Series A
Preferred Stock,  the full  number  of  shares  of Common  Stock  then  issuable
upon the conversion of all outstanding shares of Series A Preferred Stock.

               (h) The Company will pay any and all taxes that may be payable in
respect  of the  issue  or  delivery of shares of Common  Stock on conversion of
shares of Series A  Preferred  Stock pursuant hereto.  The  Company  shall  not,
however,  be required  to pay any  tax which  may be  payable  in respect of any
transfer involved in the issue and delivery of shares of Common  Stock in a name
other than that of the holder of the share of Series A Preferred Stock or shares
of Series A Preferred Stock to be  converted,  and  no such  issue  or  delivery
shall be made unless and until the Person requesting such  issue has paid to the
Company  the  amount  of  any such tax,  or has established  to the satisfaction
of the  Company  that  such tax has been  paid or is not payable.

                   (i)  (i)  Each  share  of (A)  Series  A-1  Preferred  Stock
         transferred  to any  person  other  than a member of the  Liberty Group
         and (B)  Series  A-2 Preferred  Stock  transferred  to any person other
         than a member of the HMTF Group  shall be  deemed to  be  automatically
         converted  into a share of  Series A-3 Preferred  Stock with  the  same
         Liquidation  Preference  and  otherwise  of  the same tenor  (except as
         provided  herein) as then in effect  with  respect to  the share of the
         Series A-1 Preferred  Stock or Series A-2 Preferred Stock  transferred,
         such conversion to be effected in  accordance  with this  Section 12(i)
         and to be effective as of the effective time of such transfer.

                        (ii) Upon  any  transfer  of  a  share  of  Series   A-1
         Preferred  Stock or Series A-2 Preferred  Stock triggering an automatic
         conversion into a share  of  Series  A-3 Preferred  Stock  pursuant  to
         Section 12(i)(i), the transferor shall surrender  the   certificate  or
         certificates   representing  the  share  or  shares   transferred  (the
         "Converting  Shares") at any office or agency of the Company designated
         for that purpose  together  with written  notice  stating the number of
         shares that are to be  transferred  to a person  other than a member of
         the Liberty Group (in the case of shares of Series A-1 Preferred Stock)
         or a member  of the HMTF  Group (in the case of  Series  A-2  Preferred
         Stock) and that are thus to be converted into an equal number of shares
         of Series A-3 Preferred  Stock (the  "Converted  Shares").  Such notice
         shall also state the name or names (with  addresses) of the  transferee
         and   denominations  in  which  the  certificate  or  certificates  for
         Converted  Shares are to be issued and shall include  instructions  for
         the delivery thereof.  Promptly after such surrender and the receipt of
         such written  notice,  the Company will issue and deliver in accordance
         with the  transferor's  instructions  the  certificate or  certificates
         evidencing the Converted Shares issuable upon such conversion,  and the
         Company  will  deliver to the  transferor  a  certificate  (which shall
         contain such legends as were set forth on the  surrendered  certificate
         or certificates)  representing any shares which were represented by the
         certificate  or  certificates  that were  delivered  to the  Company in
         connection with such conversion,  but which were not transferred.  Upon
         issuance of shares in  accordance  with this  Section  12(i)(ii),  such
         Converted Shares shall be duly authorized,  validly issued,  fully paid
         and  non-assessable and entitled to the benefits of this Certificate of

                                       28
<PAGE>

         Designation.  The  Company  shall  take  all  such  actions  as  may be
         necessary to assure that all such shares of Series A-3 Preferred  Stock
         may  be  so  issued   without   violation  of  any  applicable  law  or
         governmental  regulation or any requirements of any domestic securities
         exchange upon which shares of Series A-3 Preferred  Stock may be listed
         (except  for  official  notice of  issuance  which will be  immediately
         transmitted by the Company upon issuance).

                   (iii) As  used in  this Section 12(i),  the  term  "transfer"
         and  derivatives  thereof refers to any sale,  gift or other  transfer,
         voluntary or involuntary  (except for  transfers,  pledges and security
         interests   in   connection   with  bona  fide   financing  or  hedging
         transactions). A conversion of Series A-1 Preferred Stock or Series A-2
         Preferred  Stock into Common  Stock  pursuant to Section  12(a)  hereof
         shall not constitute a transfer for purposes of this Section 12(i).

               (j)  Without the unanimous consent of the holders of the Series A
Preferred Stock, the Company shall not in any manner subdivide (by stock  split,
stock  dividend or otherwise) or combine (by reverse  stock split or  otherwise)
the outstanding shares of the Series A-1  Preferred  Stock, Series A-2 Preferred
Stock or Series A-3 Preferred Stock unless the outstanding shares of each  other
series of Series A Preferred Stock shall  be subdivided or combined, as the case
may be, to the same extent, share and  share alike,  and  appropriate  provision
shall be made for the protection of the conversion rights hereunder.

         13.  Change of Control.

               (a) Upon the occurrence of a Change of Control, the Company shall
have the right, but not the obligation, to offer (the "Change of Control Offer")
to  repurchase all, but  not less than  all, of the shares of Series A Preferred
Stock at a purchase price per share in cash  equal to  101%  of the  Liquidation
Preference of each share of Series A Preferred Stock  repurchased  (after giving
effect to the Special Dividend, if applicable),  plus an amount equal to 101% of
all dividends  accrued and unpaid thereon to the date fixed for repurchase  (the
"Change of Control  Purchase  Amount").  Within 20 days  following the Change of
Control Date, the Company shall mail a notice to each holder of shares of Series
A Preferred  Stock (with a copy to the Registrar)  describing the transaction or
transactions  that  constitute  the Change of  Control  and,  if the  Company so
elects,  offering to  repurchase  shares of Series A  Preferred  Stock on a date
specified in such notice (the  "Change of Control  Purchase  Date"),  which date
shall be no  earlier  than 90 days and no later than 120 days from the date such
notice  is  mailed,  pursuant  to the  procedures  required  by  Section  10 and
described  in such  notice.  The  failure of the  Company to make such Change of
Control Offer within such 20-day period shall  constitute an irrevocable  waiver
of the  Company's  right to make such  Change of Control  Offer  solely with the
respect to the relevant  Change of Control and shall result in the dividend rate
on the Series A Preferred  Stock referred to in Section 6 hereof being increased
to 16% effective as of the Change of Control Date. The Company shall comply with
the  requirements of Rule 14e-1 under the Exchange Act and any other  securities
laws and  regulations to the extent such laws and  regulations are applicable in
connection  with the repurchase of the Series A Preferred Stock as a result of a
Change of  Control.

                                       29
<PAGE>

               (b) On the Change of Control Purchase Date, the Company shall, to
the extent lawful:

                   (i)  accept for  payment  all shares of  Series  A  Preferred
         Stock properly tendered pursuant to the Change of Control Offer;

                   (ii) deposit  with  the  paying agent an  amount equal to the
         Change of Control  Purchase Amount in respect of all shares of Series A
         Preferred Stock so tendered; and

                   (iii)deliver or cause to be  delivered to  the Registrar  all
         certificates  for  shares  of  Series A  Preferred  Stock  so  accepted
         together  with an officer's certificate stating the aggregate number of
         shares  being purchased by the Company.

               (c) The paying agent shall promptly mail to each holder of shares
of Series A Preferred Stock so  tendered the Change of Control  Purchase  Amount
for such  shares  of Series A Preferred Stock, and the Registrar shall  promptly
authenticate  and mail (or cause to be transferred by book entry) to each holder
a new  certificate  for any shares of Series A Preferred Stock not tendered that
are  represented by the surrendered  certificate.  The Company shall notify each
holder of Series A Preferred Stock the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date.

               (d) The provisions of this paragraph that  permit the Company  to
make a  Change of  Control Offer shall  be applicable  regardless of whether any
other provisions of this certificate are applicable. Except as set forth in this
paragraph,  no holder of shares of Series A Preferred Stock shall have any right
to require the Company to repurchase  or redeem the shares of Series A Preferred
Stock in the event of a takeover, recapitalization or other similar transaction.

         14.  Purchase Offer.

               (a) If  the Company  shall elect  not to  make, or shall  fail to
make, the  Change of  Control  Offer  following  the  occurrence  of a Change of
Control  pursuant  to  Section 13  hereof within  the 20-day  period   specified
therein, then in addition to the redemption rights that the Company may exercise
pursuant to Section 10 hereof after June 30, 2005,  the Company  shall also have
the right (but not the obligation),  (i) at any time and from time to time prior
to June 30,  2005,  to offer (the  "Purchase Offer") to repurchase  all, but not
less than  all, of  the outstanding  shares  of  Series A  Preferred  Stock at a
purchase price per share in  cash  equal to 101% of the  Liquidation  Preference
of each  share of  Series A Preferred Stock repurchased  (after giving effect to
the Special  Dividend,  if  any),  plus an amount equal to 101% of all dividends
accrued and unpaid thereon from the last Dividend Payment Date to the date fixed
for  repurchase  (the "Purchase  Payment") and (ii) at any time and from time to
time  following  June 30, 2005, to make a Purchase Offer to repurchase  all, but
not less than all, of  the outstanding  shares of Series A  Preferred Stock at a
purchase price per share in cash equal to 100% of the Liquidation Preference  of
each share of Series A Preferred Stock  repurchased  (after giving effect to the
Special Dividend, if any), plus an amount equal to 100% of all dividends accrued
and unpaid thereon  from  the last  Dividend  Payment Date to the date fixed for
repurchase  (the  "Par  Purchase  Payment").  If  the Company  elects to  make a
Purchase  Offer, the  Company shall  mail a notice to each  holder of shares  of

                                       30
<PAGE>

Series A Preferred Stock (with a  copy to  the Registrar) offering to repurchase
shares of  Series  A  Preferred Stock  on a  date specified in  such notice (the
"Purchase  Payment  Date"),  which date shall be no  earlier than 90 days and no
later  than  120  days from  the date such  notice is  mailed, pursuant  to  the
procedures required by Section 6 and described in such notice. The Company shall
comply with the  requirements of Rule 14e-1 under the Exchange Act and any other
securities  laws and  regulations to the extent such laws  and  regulations  are
applicable  in  connection  with  the repurchase of the Series A Preferred Stock
hereunder.

               (b) On the  Purchase  Payment  Date,  the Company  shall,  to the
extent lawful:

                   (i)  accept  for  payment all  shares of  Series A  Preferred
         Stock properly tendered pursuant to the Purchase Offer;

                   (ii) deposit with  the  paying  agent  an amount equal to the
         Purchase Payment or the Par Purchase Payment, as applicable, in respect
         of all shares of Series A Preferred Stock so tendered; and

                   (iii)deliver  or  cause to  be delivered to the Registrar all
         certificates  for  shares  of  Series A  Preferred  Stock  so  accepted
         together  with an officer's certificate stating the aggregate number of
         shares  being purchased by the Company.

               (c) The  paying agent  shall promptly  mail  or  transmit by wire
transfer  to each  holder of shares of  Series A Preferred Stock so tendered the
Purchase Payment or the Par Purchase Payment,  as applicable, for such shares of
Series A Preferred Stock, and the Registrar shall promptly authenticate and mail
(or cause to be transferred by book entry) to each such holder a new certificate
for any shares  of Series A Preferred Stock not tendered that are represented by
the surrendered  certificate.  The Company  shall notify the holders of Series A
Preferred Stock the results of the Purchase  Offer on or as soon as  practicable
after  the Purchase Payment Date.

               (d) If a holder of shares of Series A Preferred Stock elects  not
to,  or otherwise  fails to, properly  tender shares of Series A Preferred Stock
into the Purchase Offer, then  with respect  to each share of Series A Preferred
Stock  that such  holder  fails to tender,  any dividends  applicable to periods
following the expiration of the Purchase Offer with  respect to each such  share
shall be computed at a rate of eight percent (8%) per annum.

         15.  Special Covenant.

                Without  the  vote or consent of the  holders of  a majority  of
the then  Outstanding  shares of Series A Preferred Stock, the Company shall not
make,  or  permit  any  of  its  subsidiaries  to  make,  any  material  capital
expenditures,  acquisitions  or  divestitures  outside  the  ordinary  course of
business unless such  expenditures,  acquisitions or divestitures were otherwise
approved by the Board of Directors  (including the affirmative  vote of at least
one director  elected by either the holders of the Series A-1 Preferred Stock or
the holders of the Series A-2 Preferred Stock).

         16.  SEC Reports; Reports by Company.

                                       31
<PAGE>

                So  long  as  any  shares  of  Series   A  Preferred  Stock  are
outstanding,  the Company  shall file with the SEC and,  within 15 days after it
files them with the SEC, with the Registrar  and, if requested,  furnish to each
holder of shares of Series A Preferred  Stock all annual and  quarterly  reports
and the information,  documents,  and other reports that the Company is required
to file with the SEC  pursuant  to Section  13(a) or 15(d) of the  Exchange  Act
("SEC  Reports").  In the event the Company is not required or shall cease to be
required to file SEC  Reports,  pursuant to the  Exchange  Act, the Company will
nevertheless file such reports with the SEC (unless the SEC will not accept such
a filing).  Whether or not required by the Exchange Act to file SEC Reports with
the SEC, so long as any shares of Series A Preferred Stock are Outstanding,  the
Company  will  furnish or cause to be furnished  reports  equivalent  to the SEC
Reports to the holders of shares of Series A Preferred Stock.

         17.  Definitions.

                For purposes of  this Certificate  of Designation, the following
terms shall have the meaning set forth below:

                "Accumulated Dividends"  has the meaning set forth in Section 6.

                "Affiliate"  means,  with  respect  to  any  Person,  any  other
Person  directly or indirectly  controlling,  controlled  by, or under direct or
indirect common control with, such Person.  For the purposes of this definition,
"control"  when used with  respect to any  Person  means the power to direct the
management and policies of such Person, directly or indirectly,  whether through
the  ownership of voting  securities,  by contract or  otherwise;  and the terms
"controlling"  and  "controlled"  have meanings  correlative  to the  foregoing;
provided  that neither AT&T Corp.  ("AT&T") nor any  subsidiary of AT&T which is
not included in AT&T's Liberty Media Group (as defined in AT&T's  Certificate of
Incorporation) will be deemed to be an Affiliate of Liberty.

                "Board  of  Directors"  has  the  meaning  set  forth  in  the
Recitals.

                "Business  Day" means  each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking  institutions  in The City of New
York are authorized or obligated by law or executive order to be closed.

                "By-laws" has the meaning set forth in the Recitals.

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

                "Certificate of Incorporation" has the meaning set forth in  the
recitals.

                "Change  of  Control"  means   the  occurrence  of   any  of the
following  events:  (a) any  "person"  or  "group"  (as such  terms  are used in
Sections  13(d) and 14(d) of the  Exchange  Act) is or becomes  the  "beneficial
owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that a

                                       32
<PAGE>

person shall be deemed to have  "beneficial  ownership" of all  securities  that
such  person  has the  right to  acquire,  whether  such  right  is  exercisable
immediately or only after the passage of time), directly or indirectly,  of more
than 50% of the total  Voting  Capital  Stock of the  Company or (b) the Company
consolidates  with, or merges with or into,  another  person or sells,  assigns,
conveys,  transfers, leases or otherwise disposes of all or substantially all of
its assets to any person,  or any person  consolidates  with,  or merges with or
into the  Company,  in any such event  pursuant  to a  transaction  in which the
holders of the outstanding Voting Capital Stock of the Company immediately prior
to such transaction  hold less than 50% of the outstanding  Voting Capital Stock
of the surviving or transferee  company or its parent company  immediately after
such  transaction or immediately  after such transaction any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is the
"beneficial  owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except  that a person  shall be deemed  to have  "beneficial  ownership"  of all
securities  that such  person has the right to  acquire,  whether  such right is
exercisable  immediately  or only  after  the  passage  of  time),  directly  or
indirectly,  of more than 50% of the total Voting Capital Stock of the surviving
or  transferee  company  or its parent  company  or (c)  during any  consecutive
two-year period, individuals who at the beginning of such period constituted the
Board of Directors  (together with any new directors whose election by the Board
of Directors or whose nomination for election by the stockholders of the Company
was approved by a vote of a majority of the  directors  then still in office who
were either  directors  at the  beginning  of such  period or whose  election or
nomination  for  election  was  previously  so approved  and  together  with any
directors  elected pursuant to Sections  8(d)(i),  (ii) and (iii)) cease for any
reason to constitute a majority of the Board of Directors  then in office or (d)
any  transaction  subject to Rule 13e-3 under the Exchange Act if following such
Rule  13e-3  transaction  a person or group (as such  terms are used in  Section
13(d) and  14(d) of the  Exchange  Act)  owns more than 50% of the total  Voting
Capital  Stock  of the  Company.  Notwithstanding  the  foregoing,  any  form of
business combination between the Company and Teligent,  Inc. within the 24 month
period following the Closing Date shall not be deemed to be a Change of Control,
unless after the date hereof and prior to such business combination, there shall
have  occurred a  "Teligent  Change of  Control."  For the  purposes  hereof,  a
Teligent  Change of Control  shall have the same meaning as a Change of Control,
substituting  Teligent,  Inc.  for the  Company  in such  definition;  provided,
however,  that a Teligent  Change of Control shall not occur with respect to any
event or  circumstance  that  involves  an  acquiror,  25% or more of the Voting
Capital Stock of which is beneficially  owned by any member of the HMTF Group or
Liberty.

                "Change of Control Date" has  the meaning  set forth in  Section
6(b).

                "Closing  Date"  means  the  Closing  Date  under  the  Purchase
Agreement.

                "Closing  Price" has  the meaning  set  forth  in  Section 12(d)
(viii).

                "Common  Stock  Record  Date"  has  the   meaning  set  forth in
Section 12(d)(viii).

                "Common  Stock"  means  the  common  stock of the  Company,  par
value $.01 per share and  capital  stock of any other class or series into which
the Common Stock may hereafter be changed.

                                       33
<PAGE>

                "Company"  has  the  meaning  set  forth  in  the  Recitals  and
includes any successor to the Company hereunder.

                "Company Order" means a written  request or  order signed in the
name of the  Company by its  Chairman  of the  Board,  its  President  or a Vice
President  and by its  Treasurer,  an Assistant  Treasurer,  its Secretary or an
Assistant Secretary.

                "Conversion Agent" has the meaning set forth in Section 5(a).

                "Conversion  Price"  means  the price  at which shares of Common
Stock shall be delivered upon conversion.

                "Current  Market  Price" has  the  meaning  set forth in Section
12(d)(viii).

                "Dilution  Trigger Event" has  the meaning  set forth in Section
12(d)(iv).

                "Distributed  Securities"  has the meaning  set forth in Section
12(d)(iv).

                "Dividend  Payment  Date"  shall  mean  the last day  of  March,
June, September and December of each year, commencing June 30, 2000, or the next
succeeding Business Day if any such day is not a Business Day.

                "Dividend Period" shall  mean the period from and  including the
Closing Date to but excluding  the first  Dividend  Payment Date and  thereafter
each  quarterly  period  from  and  including  a  Dividend  Payment  Date to but
excluding the next Dividend Payment Date.

                "Dividend  Record  Date"  has the  meaning set forth  in Section
7(a).

                "Exchange Offer" has the meaning set forth in Section 12(d)(vi).

                "Exchange  Preferred  Stock"  has  the   meaning  set  forth  in
Section 12(d)(viii).

                "Exchange  Securities"  has  the  meaning  set forth in  Section
12(d)(viii).

                "Expiration Time" has the meaning set forth in Section 12(d)(v).

                "Fair  Market  Value"  has  the  meaning  set forth  in  Section
12(d)(viii).

                "Junior Shares" has the meaning set forth in Section 9(a).

                "Liquidation  Preference"  means  an  amount  initially equal to
$10,000 per share of Series A Preferred Stock, subject to increase in accordance
with Section 6, Section 7 and Section 11 hereof, including,  without limitation,
by the  addition  of  Accumulated  Dividends  and,  if  applicable,  the Special
Dividend.

                "Mandatory  Redemption  Date"  has  the  meaning  set  forth  in
Section 10(b); provided, however, that if such date shall not be a Business Day,
then such date shall be the next Business Day.

                                       34
<PAGE>

                "Mirror  Preferred Stock" has  the meaning  set forth in Section
12(d)(viii).

                "Nonelecting Share" has the meaning set forth in Section 12(e).

                "Odd-lot Redemption" has the meaning set forth in Section 10(c).

                "Officers'  Certificate"  means  a  certificate  of  the Company
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President and by its Treasurer, an Assistant Treasurer,  its Secretary or
an Assistant Secretary.

                "Optional  Redemption" has  the  meaning  set forth  in  Section
10(a).

                "Optional Redemption Date" has the meaning set forth in  Section
10(a).

                "Outstanding" means  when used with respect to  shares of Series
A  Preferred  Stock,  as of the date of  determination,  all  shares of Series A
Preferred Stock  theretofore  delivered  under this  Certificate of Designation,
except (a) shares of Series A Preferred Stock theretofore  converted into shares
of Common Stock in  accordance  with Section 12 and shares of Series A Preferred
Stock  theretofore  canceled by the  Registrar or delivered to the Registrar for
cancellation;  (b)  shares of Series A  Preferred  Stock  for whose  payment  or
redemption money in the necessary amount has been theretofore deposited with the
Registrar or any Paying Agent (other than the Company) in trust or set aside and
segregated  in trust by the Company (if the Company  shall act as its own Paying
Agent) for the  holders of such  shares of Series A  Preferred  Stock;  provided
that, if such shares of Series A Preferred  Stock are to be redeemed,  notice of
such redemption has been duly given pursuant to this  Certificate of Designation
or provision  therefor  satisfactory  to the  Registrar  has been made;  and (c)
shares of Series A  Preferred  Stock in  exchange  for or in lieu of which other
shares  of  Series A  Preferred  Stock  have  been  delivered  pursuant  to this
Certificate of Designation;  provided, however, that, in determining whether the
holders  of the  shares of Series A  Preferred  Stock  have  given any  request,
demand,  authorization,  direction, notice, consent or waiver or taken any other
action hereunder, shares of Series A Preferred Stock owned by the Company or any
other obligor upon the shares of Series A Preferred  Stock or any  subsidiary of
the Company or of such other obligor shall be  disregarded  and deemed not to be
Outstanding,  except  that,  in  determining  whether  the  Registrar  shall  be
protected in relying upon any such request,  demand,  authorization,  direction,
notice, consent, waiver or other action, only shares of Series A Preferred Stock
which  the  Registrar  has  actual  knowledge  of  being  so  owned  shall be so
disregarded.

                "Parity Shares" has the meaning set forth in Section 9(a).

                "Paying Agent" has the meaning set forth in Section 5(a).

                "Person"  means   an   individual,   partnership,   corporation,
limited  liability  company,   business  trust,  joint  stock  company,   trust,
unincorporated  association,  joint  venture,  governmental  authority  or other
entity of whatever nature.

                "Preferred Stock" means,  with  respect to  any person,  any and
all shares, interests,  participations or other equivalents (however designated,
whether voting or non-voting)  of such person's  preferred or preference  stock,

                                       35
<PAGE>

whether now  outstanding  or issued after the date hereof,  including all series
and classes of such preferred or preference stock.

                "Purchase  Agreement"  means  the  Preferred  Stock and  Warrant
Purchase  Agreement  dated as of February  27,  2000,  among the Company and the
Purchasers named therein, as it may be amended from time to time.

                "Purchased Shares" has  the meaning set  forth in  Section 12(d)
(v).

                "Redemption Date" has the meaning set forth in Section 10(d).

                "Redemption Notice" has the meaning set forth in Section 10(d).

                "Redemption Price" has the meaning set forth in Section 10(a).

                "Registrar" has the meaning set forth in Section 3.

                "Registration  Rights  Agreement" means  the Registration Rights
Agreement dated as of April 7, 2000, among the Company and the Purchasers.

                "Restricted  Shares  Legend"  has  the   meaning  set  forth  in
Section 4(a).

                "SEC" means  the  Securities and  Exchange  Commission,  as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time  after the  adoption  of this  Certificate  of  Designation  such
commission  is not existing and  performing  the duties now assigned to it, then
the body performing such duties at such time.

                "SEC Reports" has the meaning set forth in Section 16.

                "Securities Act" has the meaning set forth in Section 4(a).

                "Senior Shares" has the meaning set forth in Section 9(a).

                "Series  A  Preferred  Stock"  has the  meaning  set  forth in
Section 1.

                "Series  A-1  Preferred  Stock" has  the  meaning  set forth  in
Section 1.

                "Series  A-2  Preferred  Stock" has  the  meaning  set forth  in
Section 1.

                "Series  A-3  Preferred  Stock" has  the  meaning  set forth  in
Section 1.

                "Special Dividend" means, with  respect to  each share of Series
A Preferred Stock,  the difference  between (i) $14,859.47 (as such number shall
be  appropriately  adjusted for stock splits,  stock dividends or similar events
affecting  the  Series A  Preferred  Stock)  and (ii) the  amount of the  actual
Liquidation  Preference of such share immediately prior to the Change of Control
Date.

                "Voting  Capital  Stock"  means  with  respect  to  any  Person,
securities  of any class or classes of Capital  Stock in such Person  ordinarily
entitling  the holders  thereof  (whether at all times or at the times that such

                                       36
<PAGE>

class of  Capital  Stock has  voting  power by reason  of the  happening  of any
contingency)  to vote in the  election of members of the board of  directors  or
comparable governing body of such Person.

         18.  No Reissuances.

                Subject  to  Section  12(i),  any  share of  Series A  Preferred
Stock that is  purchased,  redeemed or otherwise  acquired by the Company or any
subsidiary  shall be  cancelled  and  restored to the status of  authorized  but
unissued Preferred Stock but shall not be reissued as Series A Preferred Stock.

                                       37
<PAGE>

                IN WITNESS WHEREOF, the Company  has caused this  Certificate of
Designation  to be duly executed by H. Don Teague,  Executive  Vice President of
the Company, this 7th day of April, 2000.

                                       ICG COMMUNICATIONS, INC.

                                       By: /s/ H. Don Teague
                                          --------------------------------------
                                          Name:  H. Don Teague
                                          Title: Executive Vice President

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                                FACE OF SECURITY

THESE  SECURITIES HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933 OR
THE  SECURITIES  LAWS  OF ANY  STATE  OR  OTHER  JURISDICTION,  AND,  UNLESS  SO
REGISTERED,  THEY MAY NOT BE SOLD,  OFFERED  FOR  SALE,  TRANSFERRED,  ASSIGNED,
PLEDGED  OR  HYPOTHECATED  EXCEPT  PURSUANT  TO  AN  EXEMPTION  FROM,  OR  IN  A
TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION  REQUIREMENTS  OF THE  ACT AND
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

Number:                                                         Number of Shares
       ---------                                                          Shares
                                                                   -------

             8% SERIES [A-1, A-2 or A-3] CONVERTIBLE PREFERRED STOCK

                                    DUE 2015

                                       OF

                            ICG COMMUNICATIONS, INC.

                ICG  COMMUNICATIONS,  INC., a  company organized  under the laws
of Delaware (the  "Company"),  hereby  certifies that {HOLDER} (the "Holder") is
the registered owner of fully paid and non-assessable  preference  securities of
the Company  designated  the 8% Series [A-1, A-2 or A-3]  Convertible  Preferred
Stock due 2015,  par value  U.S.$0.01 and initial  liquidation  preference  U.S.
$10,000 per share (the  "Preferred  Stock").  The shares of Preferred  Stock are
transferable  on the books and records of the Registrar,  in person or by a duly
authorized  attorney,  upon surrender of this  certificate  duly endorsed and in
proper form for transfer.  The designation,  rights,  privileges,  restrictions,
preferences  and other terms and provisions of the Preferred  Stock  represented
hereby are issued and shall in all respects be subject to the  provisions of the
Certificate  of  Designation of the Company dated April 7, 2000, as the same may
be amended from time to time in accordance with its terms (the "Preferred  Stock
Certificate  of  Designation").  Capitalized  terms used  herein but not defined
shall  have  the  meaning  given  them in the  Preferred  Stock  Certificate  of
Designation.  The Company will provide a copy of the Preferred Stock Certificate
of Designation to a Holder without charge upon written request to the Company at
its principal place of business.

                [THE SHARES  OF PREFERRED STOCK REPRESENTED  BY THIS CERTIFICATE
SHALL BE  AUTOMATICALLY  CONVERTED  INTO SHARES OF THE  COMPANY'S  8% SERIES A-3
CONVERTIBLE PREFERRED STOCK UPON CERTAIN TRANSFERS OF SUCH SHARES AS PROVIDED IN

                                       A-1
<PAGE>

SECTION 12(i) OF THE COMPANY'S PREFERRED STOCK CERTIFICATE OF DESIGNATION.]*

                Reference is  hereby made to select provisions of  the Preferred
Stock set forth on the reverse hereof, and to the Preferred Stock Certificate of
Designation,  which select  provisions  and the Preferred  Stock  Certificate of
Designation  shall for all purposes have the same effect as if set forth at this
place.

                Upon receipt  of  this  certificate,  the Holder is bound by the
Preferred  Stock  Certificate  of  Designation  and is entitled to the  benefits
thereunder.

                Unless  the Transfer  Agent's  valid  counter-signature  appears
hereon,  the shares of Preferred Stock evidenced hereby shall not be entitled to
any benefit under the Preferred Stock  Certificate of Designation or be valid or
obligatory for any purpose.

                IN WITNESS WHEREOF,  the  Company  has executed this certificate
as of the date set forth below.

                                       ICG COMMUNICATIONS, INC.

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

{Seal}

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

Dated:

*  include for Series A-1 Preferred Stock and Series A-2 Preferred Stock

                                      A-2

<PAGE>

                               REVERSE OF SECURITY

                            ICG COMMUNICATIONS, INC.

             8% Series [A-1, A-2 or A-3] Convertible Preferred Stock
                                    due 2015

                Dividends on  each share of Preferred Stock shall  be payable at
a rate per annum set forth on the face hereof or as  provided  in the  Preferred
Stock  Certificate  of  Designation.  Subject  to the  limitations  set forth in
Section 11 of the Preferred Stock  Certificate of Designation,  dividends may be
paid, at the option of the Company, in cash.

                The  shares of Preferred  Stock shall  be redeemable as provided
in the Preferred Stock Certificate of Designation. The shares of Preferred Stock
shall be convertible into the Company's Common Stock in the manner and according
to the terms set forth in the Preferred Stock Certification of Designation.

                The  Company  shall  furnish  to  any Holder  upon  request  and
without  charge,  a copy of the  voting  rights,  preferences,  limitations  and
special rights of the shares of each class or series  authorized to be issued by
the Company so far as they have been fixed and  determined  and the authority of
the Board of Directors to fix and determine  the  designations,  voting  rights,
preferences,  limitations and special rights of the class or series of shares of
the Company.

                                   ASSIGNMENT

                FOR VALUE RECEIVED,  the  undersigned assigns  and transfers the
shares of Preferred Stock evidenced hereby to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints:

agent to transfer the shares of Preferred Stock evidenced hereby on the books of
the Transfer  Agent and Registrar.  The agent may substitute  another to act for
him or her.

Date:                             Signature:
     ----------------------------           ------------------------------------
(Sign  exactly  as your  name  appears  on the  other  side of this  Convertible
Preferred Stock Certificate)

Signature Guarantee:*
                     ------------------------------------------------

                                      R-1

<PAGE>

                  *Signature  must  be  guaranteed  by  an  "eligible  guarantor
institution" (i.e., a bank, stockbroker,  savings and loan association or credit
union) meeting the  requirements of the Registrar,  which  requirements  include
membership or participation in the Securities  Transfer Agents Medallion Program
("STAMP") or such other  "signature  guarantee  program" as may be determined by
the Registrar in addition to, or in substitution  for, STAMP,  all in accordance
with the Securities Exchange Act of 1934.

                                      R-2

<PAGE>

                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
                    in order to Convert the Preferred Stock)

The  undersigned   hereby  irrevocably  elects  to  convert  (the  "Conversion")
_________ shares of 8% Series [A-1, A-2 or A-3] Convertible  Preferred Stock due
2015  (the  "Preferred   Stock"),   represented  by  stock  certificate   No(s).
______________ (the "Preferred Stock Certificates") into shares of common stock,
par value U.S. $.01 per share ("Common Stock"), of ICG Communications, Inc. (the
"Company")  according  to the  conditions  of  the  Certificate  of  Designation
establishing the terms of the Preferred Stock (the "Preferred Stock  Certificate
of  Designation"),  as of the date written below.  If shares are to be issued in
the name of a person other than the  undersigned,  the undersigned  will pay all
transfer  taxes  payable with respect  thereto and is  delivering  herewith such
certificates.  No fee will be charged to the holder for any  conversion,  except
for  transfer  taxes,  if any. A copy of each  Preferred  Stock  Certificate  is
attached hereto (or evidence of loss, theft or destruction thereof).*

The  undersigned  represents  and  warrants  that all  offers  and  sales by the
undersigned  of the shares of Common  Stock  issuable  to the  undersigned  upon
conversion of the Preferred  Stock shall be made pursuant to registration of the
Common Stock under the  Securities  Act of 1933 (the  "Act"),  or pursuant to an
exemption from registration under the Act.

Capitalized  terms used but not defined herein shall have the meanings  ascribed
thereto in or pursuant to the Preferred Stock Certificate of Designation.

Date of Conversion:
                   ---------------------------------
Applicable Conversion Price:
                            ------------------------
Number of shares of Preferred Stock to be Converted:
                                                    ----------------------------
Number of shares of Common Stock to be Issued:
                                              ----------------------------------
Signature:
          ------------------------------------------
Name:
     -----------------------------------------------
Address:
        --------------------------------------------
Fax No.:
        --------------------------------------------

                  *The  Company is not  required to issue shares of Common Stock
until the original Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its Transfer
Agent.  The  Company  shall  issue and  deliver  shares  of  Common  Stock to an
overnight  courier not later than three business days  following  receipt of the
original Preferred Stock Certificate(s) to be converted.

                  **Address  where shares of Common Stock and any other payments
or certificates shall be sent by the Company.

                                      N-1REGISTRATION RIGHTS AGREEMENT

                                     between

                            ICG COMMUNICATIONS, INC.

                                       AND

                       THE PURCHASERS LISTED ON SCHEDULE I

                            dated as of April 7, 2000

<PAGE>

                                TABLE OF CONTENTS

Article I Definitions..........................................................1
   1.1    Definitions..........................................................1
   1.2    Internal References..................................................3

Article II Registration Rights.................................................3
   2.1    Demand Registration..................................................3
   2.2    Piggyback Registration...............................................6
   2.3    Shelf Registration...................................................7

Article III Registration Procedures............................................9
   3.1    Filings; Information.................................................9
   3.2    Registration Expenses...............................................13

Article IV Indemnification and Contribution...................................14
   4.1    Indemnification by the Company......................................14
   4.2    Indemnification by Selling Holders..................................15
   4.3    Conduct of Indemnification Proceedings..............................15
   4.4    Contribution........................................................16

Article V Miscellaneous.......................................................16
   5.1    Participation in Underwritten Registrations.........................16
   5.2    Rule 144............................................................17
   5.3    Holdback Agreements.................................................17
   5.4    Termination.........................................................18
   5.5    Amendments, Waivers, Etc............................................18
   5.6    Counterparts........................................................18
   5.7    Entire Agreement....................................................18
   5.8    Governing Law.......................................................18
   5.9    Assignment of Registration Rights...................................18

<PAGE>

                                                       This  REGISTRATION RIGHTS
                                                AGREEMENT (the  "Agreement"), is
                                                made  as  of April 7,  2000,  by
                                                and  between ICG Communications,
                                                Inc.,  a   Delaware  corporation
                                                (the "Company") and the entities
                                                listed  on  Schedule I  to  this
                                                Agreement.

                  WHEREAS, the Company,  Liberty Media Corporation,  HMTF Bridge
ICG,  LLC and  Gleacher/ICG  Investors  LLC entered  into a Preferred  Stock and
Warrant  Purchase  Agreement  dated as of February 27, 2000 (the "Stock Purchase
Agreement");

                  WHEREAS,  pursuant to an Assignment of Rights under  Preferred
Stock and Warrant  Purchase  Agreement  dated as of March 8, 2000, the remaining
Initial HMTF Holders (as defined  below)  became  parties to the Stock  Purchase
Agreement;

                  WHEREAS,  it is a  condition  precedent  to the closing of the
transactions  contemplated  in the Stock  Purchase  Agreement  that the  parties
hereto execute and deliver this Agreement;

                  NOW  THEREFORE,  in  consideration  of  the  premises,  mutual
promises and covenants  contained in this  Agreement and intending to be legally
bound, the parties hereto hereby agree as follows:

                                   Article I

                                   Definitions

1.1      Definitions.

         Terms  defined  in the  Stock  Purchase  Agreement  are used  herein as
therein defined except as otherwise indicated below. In addition,  the following
terms, as used herein, have the following meanings:

                  "Commission" means the Securities and Exchange Commission.

                  "Demand   Registration"   means  a   registration   under  the
Securities Act requested in accordance with Section 2.1.

                  "Gleacher Holder" means Gleacher/ICG Investors LLC.

                  "HMTF  Holders"  means the Initial HMTF Holders and any direct
or indirect  transferee  of any  Registrable  Securities  initially  held by the
Initial HMTF Holders.

                  "Holders" means,  collectively,  the HMTF Holders, the Liberty
Holders and the Gleacher Holder (including their respective  Affiliates) and any
direct or indirect transferee of any Registrable  Securities held by any of such
Persons.

<PAGE>

                  "Initial  Amount," on any particular  date and with respect to
the Liberty  Holders or the HMTF  Holders,  as  applicable,  means the number of
shares  of  Common  Stock  that  would  have  been  issuable  on such  date upon
conversion of all of the shares of Series A Preferred  Stock and the exercise of
all Warrants issued to the Liberty Holders or the HMTF Holders, respectively, on
the Closing Date (as  adjusted for stock  splits,  stock  dividends  and similar
events affecting the Series A Preferred Stock).

                  "Initial HMTF Holders" means HM4 ICG Qualified  Fund, LLC, HM4
ICG Private Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG Coinvestors, LLC, HM 4-EQ
ICG Coinvestors, LLC, and HMTF Bridge ICG, LLC.

                  "Liberty Holders" means Liberty and each of its Affiliates.

                  "Piggyback  Registration"  has   the  meaning   set  forth  in
Section 2.2.

                  "Registrable  Common  Stock"  means (a) shares of Common Stock
issued or issuable  upon  conversion of the Series A Preferred  Stock  purchased
pursuant to the Stock Purchase Agreement, plus any additional shares of Series A
Preferred  Stock issued in respect  thereof in connection  with any stock split,
stock  dividend or similar  event with respect to the Series A Preferred  Stock,
plus any  additional  shares of Common  Stock issued with respect to such issued
shares of Common Stock in connection with any stock splits, stock dividends,  or
similar  events with  respect to the Common  Stock,  (b) shares of Common  Stock
issued or issuable upon exercise of the Warrants,  plus any additional shares of
Common  Stock  issued in  respect  of such  issued  shares  of  Common  Stock in
connection with any stock split, stock dividend or similar event with respect to
the Common  Stock and (c) any shares of Common  Stock owned by a Holder that are
restricted  securities within the meaning of Rule 144 or all such shares if such
Holder  reasonably  believes  at  such  time  that  it  may be  deemed  to be an
"affiliate" (as that term is defined in Rule 144) of the Company.

                  "Registrable  Securities"  means  (a) the  Registrable  Common
Stock and (b) any  securities of the Company or any successor  entity into which
Registrable  Common  Stock may  hereafter  be  converted  or changed.  As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities  when (i) a  registration  statement with respect to the sale of such
securities  shall  have  become  effective  under  the  Securities  Act and such
securities shall have been disposed of under such registration  statement,  (ii)
such  securities  shall have been  transferred  pursuant to Rule 144, (iii) such
securities  shall  have been  otherwise  transferred  or  disposed  of,  and new
certificates  therefor not bearing a legend  restricting  further transfer shall
have been delivered by the Company,  and  subsequent  transfer or disposition of
them shall not require their registration or qualification  under the Securities
Act or any similar state law then in force, or (iv) such  securities  shall have
ceased to be outstanding.

                  "Requesting  Holders"  means the Holders  requesting  a Demand
Registration,  and shall include parties deemed "Requesting Holders" pursuant to
Section 2.1(a)(iv).

                  "Rule 144" means  Rule 144 (or  any successor  rule of similar
effect) promulgated under the Securities Act.

                                       2
<PAGE>

                  "Selling  Holder" means any Holder who is selling  Registrable
Securities pursuant to a public offering registered hereunder.

                  "Series A Preferred  Stock" means  collectively  the Company's
(i) 8% Series A-1 Convertible  Preferred Stock, par value $0.01 per share,  (ii)
8% Series A-2 Convertible  Preferred Stock, par value $0.01 per share, and (iii)
8% Series A-3 Convertible Preferred Stock, par value $0.01 per share.

                  "Shelf  Registration"  has the  meaning  set forth in  Section
2.3(b).

                  "Underwriter"  means a  securities  dealer who  purchases  any
Registrable   Securities   as  principal  and  not  as  part  of  such  dealer's
market-making activities.

                  "Warrants" means  the  Warrants  (as  defined  in  the   Stock
Purchase Agreement) to purchase Common Stock.

1.2      Internal References

         Unless  the  context  indicates  otherwise,   references  to  Articles,
Sections and paragraphs shall refer to the corresponding articles,  sections and
paragraphs  in this  Agreement,  and  references  to the parties  shall mean the
parties to the Stock Purchase Agreement.

                                   Article II

                               Registration Rights

2.1      Demand Registration

              (a)

                   (i)  Holders of a majority of the Registrable Securities held
         by the HMTF Holders  may make up  to three (3)  written requests  for a
         Demand Registration  of all or any part of  the Registrable  Securities
         held  by the  HMTF Holders  and  their direct  or indirect transferees;
         provided,  that (A) each  such Demand Registration  by the HMTF Holders
         must be in respect of Registrable Securities with  a fair market  value
         of  at least $50,000,000 or all of the  Registrable Securities  held by
         the requesting  HMTF Holders if the aggregate fair market  value of all
         of such  Registrable  Securities is less than  $50,000,000 and (B)  the
         HMTF  Holders shall not be entitled to a Demand Registration if, during
         the 120 days preceding such request,  the HMTF Holders had requested  a
         Demand   Registration   unless  the  Company  preempted   such   Demand
         Registration in accordance with Section 2.1(e) or the Company postponed
         the filing thereof in accordance with Section 3.1(a) and the requesting
         HMTF  Holders withdrew  the request for such  Demand Registration. Upon
         exercise  of  all or  any portion of  the Warrants  held  by  the  HMTF
         Holders, the Holders of a majority  of the Registrable Securities  held
         by the  HMTF Holders  may make one (1) additional written request for a
         Demand Registration, subject to  the proviso set forth in the foregoing
         sentence.

                                       3
<PAGE>

                   (ii) Holders of a majority of the Registrable Securities held
         by the  Liberty  Holders may make up to six (6)  written  requests  for
         a Demand Registration of all or any part of the Registrable  Securities
         held  by the Liberty Holders and their direct or indirect  transferees;
         provided,  that (A)  each  such  Demand  Registration  by  the  Liberty
         Holders  must be in  respect  of  Registrable  Securities  with a  fair
         market  value  of  at  least  $50,000,000  or all  of  the  Registrable
         Securities  held  by the  requesting  Liberty  Holders if the aggregate
         fair market value of  all of such  Registrable  Securities is less than
         $50,000,000,  and (B) the  Liberty  Holders  shall not be entitled to a
         Demand  Registration  if, during  the 120 days  preceding such request,
         the Liberty  Holders had  requested a  Demand  Registration  unless the
         Company preempted such Demand  Registration in  accordance with Section
         2.1(e) or the Company  postponed  the filing thereof in accordance with
         Section 3.1(a) and the requesting  Liberty Holders withdrew the request
         for such Demand  Registration.  Upon  exercise of all or any portion of
         the Warrants held by the Liberty  Holders, the Holders of a majority of
         the Registrable  Securities held by the Liberty Holders may  make up to
         two (2) additional written requests for a  Demand Registration, subject
         to the proviso set forth in the foregoing sentence.

                   (iii)Any  request  for  a Demand  Registration  will  specify
         the aggregate number of shares of Registrable Securities proposed to be
         sold by the  Requesting  Holders and  will also  specify  the  intended
         method of  disposition  thereof.  A  registration  will  not count as a
         Demand  Registration  until it has become  effective.  Should a  Demand
         Registration  not become  effective  due to the failure of a  Holder to
         perform its  obligations  under this Agreement or  the inability of the
         Requesting  Holders to reach agreement  with the  Underwriters  for the
         proposed sale on price or other customary  terms for such  transaction,
         or in the event the Requesting  Holders  withdraw  or do not pursue the
         request for the Demand  Registration  (in  each of the foregoing cases,
         provided  that  at  such  time  the  Company  is in  compliance  in all
         material  respects with  its obligations  under this Agreement),  then,
         subject to Section 2.1(b), such  Demand Registration shall be deemed to
         have been effected (provided that (i) if, the  Demand Registration does
         not become  effective  because  a material adverse change has occurred,
         or is  reasonably  likely  to occur,  in the  condition  (financial  or
         otherwise),  business,  assets or  results of operations of the Company
         and its  subsidiaries  taken as  a whole  subsequent to the date of the
         written  request  made by  the  Requesting  Holders (ii) if the Company
         withdraws  the  Demand  Registration  for  any reason or  preempts  the
         request  for  the  Demand  Registration  or (iii) if,  after the Demand
         Registration   has  become   effective,   an  offering  of  Registrable
         Securities  pursuant to a registration  is interfered with  by any stop
         order, injunction,  or other order or requirement of  the Commission or
         other governmental  agency or court or (iv) if  the Demand Registration
         is  withdrawn  at the request of  the  Requesting  Holders  pursuant to
         Section 2.1(f) or Section 3.1(a),  then  the Demand  Registration shall
         not  be  deemed to have  been  effected  and will not count as a Demand
         Registration).

                   (iv) Upon  receipt of any  request for a Demand  Registration
         by holders of a majority of the Registrable Securities held by the HMTF
         Holders or  the Liberty Holders,  as the case may be, the Company shall
         promptly  (but in  any event within ten (10) days) give written  notice
         of such proposed  Demand  Registration to the HMTF Holders, in the case
         of a request by  an HMTF  Holder,  and to the Liberty  Holders,  in the
         case of a request by a  Liberty  Holder,  and all such HMTF  Holders or
         Liberty Holders, as  the case may be (including their respective direct

                                       4
<PAGE>

         or indirect transferees) shall have  the right,  exercisable by written
         notice to the Company  within  twenty (20) days of their receipt of the
         Company's notice, to elect  to include in such Demand Registration such
         portion of  their Registrable  Securities as they may request. All such
         Holders requesting to have  their Registrable  Securities included in a
         Demand Registration in  accordance with the preceding sentence shall be
         deemed to be "Requesting  Holders" for purposes of this Section 2.1.

              (b) In the event  that the Requesting  Holders withdraw or  do not
pursue  a request  for a Demand  Registration  and,  pursuant to  Section 2.1(a)
hereof,  such Demand Registration  is deemed to have been  effected, the Holders
may reacquire  such Demand  Registration  (such that the  withdrawal  or failure
to pursue a request will not  count as a  Demand  Registration hereunder) if the
Selling  Holders reimburse  the Company  for any and all  Registration  Expenses
incurred  by  the  Company  in  connection  with  such  request  for  a   Demand
Registration  that was withdrawn or not pursued.

              (c) If the  Requesting  Holders  so elect,  the  offering  of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a "firm  commitment"  underwritten  offering.  A majority in  interest of the
Requesting Holders  shall have the right to  select  the  managing  Underwriters
and any additional  investment  bankers  and managers to be  used in  connection
with any offering under this  Section  2.1, subject to the  Company's  approval,
which approval shall not be unreasonably withheld.

              (d) The  Requesting  Holders  will  inform the Company of the time
and  manner of  any disposition  of  Registrable  Common  Stock,  and  agree  to
reasonably  cooperate  with  the  Company  in  effecting the  disposition of the
Registrable  Common  Stock  in a  manner that does not unreasonably disrupt  the
public trading market for the Common Stock; provided, however, that the Holders'
only  right  to  a  shelf  registration  statement shall  be pursuant to Section
2.3.

              (e) The  Company  will  have  the  right  to  preempt  any  Demand
Registration with  a primary  registration by  delivering written notice (within
seven business days  after the  Company has received  a request  for such Demand
Registration)  of such  intention to the Requesting  Holders indicating that the
Company has identified a specific  business need and use for the proceeds of the
sale of such  securities and had  contemplated  such sale of securities prior to
receiving the Requesting Holders' notice, and the Company shall use commercially
reasonable  efforts  to effect a  primary  registration  within  90 days of such
notice.  In  the  ensuing  primary registration,  the  Holders  will  have  such
piggyback registration rights as are set forth in Section 2.2  hereof.  Upon the
Company's   preemption  of  a  requested  Demand  Registration,  such  requested
registration will not count as the Holders' Demand Registration.  If the Company
thereafter decides  to abandon its intention  to pursue such sale of securities,
it shall give notice  thereof to any  preempted Holders within two business days
following the Company's decision. The  Company may exercise the right to preempt
a Demand Registration only once in any 360-day period; provided, that during any
360-day  period  the  Company shall use  its reasonable  best efforts to  permit
a period of at least 180 consecutive  days  during which the Selling Holders may
effect a Demand Registration.

                                       5
<PAGE>

              (f) Securities to be sold for the account of any Person (including
the Company) other than a Requesting  Holder shall not be  included  in a Demand
Registration  if the  managing  Underwriter  or  Underwriters  shall  advise the
Company  and the  Requesting  Holders  in  writing  that the  inclusion  of such
securities  will  materially  and adversely  affect the price of the offering (a
"Material Adverse Effect").  Furthermore,  in the event the managing Underwriter
or  Underwriters  shall advise the Company or the  Requesting  Holders that even
after  exclusion of all  securities  of other  Persons  (including  the Company)
pursuant  to the  immediately  preceding  sentence,  the  amount of  Registrable
Securities  proposed to be included in such Demand  Registration  by  Requesting
Holders  is  sufficiently   large  to  cause  a  Material  Adverse  Effect,  the
Registrable  Securities of the Requesting  Holders to be included in such Demand
Registration  shall  equal  the  number  of shares  which  the  Company  and the
Requesting  Holders  are so  advised  can be  sold in such  offering  without  a
Material  Adverse  Effect and such shares shall be allocated  pro rata among the
Requesting  Holders  on  the  basis  of the  number  of  Registrable  Securities
requested to be included in such  registration by each such  Requesting  Holder;
provided, however, that if any Registrable Securities requested to be registered
pursuant  to  a  Demand   Registration  under  Section  2.1  are  excluded  from
registration  hereunder,  then the Holder(s)  having shares excluded  ("Excluded
Holders")  shall have the right to withdraw  all, or any part,  of their  shares
from such registration and if withdrawn in full such Demand  Registration  shall
not be deemed to have been effected and will not count as a Demand Registration.

2.2      Piggyback Registration

               (a) If the  Company  proposes to  file  a registration  statement
under the Securities Act with respect to an offering of Common Stock for its own
account  or for  the  account of  another  Person  (other  than  a  registration
statement on  Form S-4  or  S-8,  or,  except as  provided for  in  Section 2.3,
pursuant to Rule 415 (or any  substitute form or rule, respectively, that may be
adopted  by  the  Commission)),  the  Company  shall give written notice of such
proposed  filing to the  Holders at the address  set forth in the share register
of the Company as soon as reasonably  practicable  (but in no event less than 15
days before the anticipated filing date), undertaking to provide each Holder the
opportunity to register on the same terms and  conditions  such number of shares
of  Registrable   Securities  as   such   Holder  may   request  (a   "Piggyback
Registration"). Each Holder will have seven  business days after  receipt of any
such  notice to notify the Company as to whether it wishes to  participate  in a
Piggyback  Registration (which  notice shall not be deemed to be a request for a
Demand  Registration); provided  that should  a Holder  fail  to provide  timely
notice to the Company, such Holder will forfeit any rights to participate in the
Piggyback  Registration with  respect to such  proposed offering  other than  as
described in Section 2.1(a)(iv). In the event  that the  registration  statement
is filed on behalf of a Person  other than the Company, the Company will use its
best efforts to have the shares  of  Registrable  Securities  that  the  Holders
wish  to sell  included  in the registration  statement.  If the  Company or the
Person for whose account such offering is being made shall determine in its sole
discretion not to register or to delay the proposed  offering, the Company  may,
at its election,  provide written notice of such  determination  to the  Holders
and (i) in  the case  of  a determination not to  effect the proposed  offering,
shall thereupon be relieved of  the  obligation  to  register  such  Registrable
Securities  in  connection therewith, and (ii) in the case of a determination to
delay a  proposed offering, shall  thereupon be  permitted to delay  registering
such  Registrable  Securities for the same period as the delay in respect of the
proposed offering. As between the Company and  the Selling Holders, the  Company

                                       6
<PAGE>

shall be  entitled to select the  Underwriters in connection  with any Piggyback
Registration.

              (b) If the Registrable Securities requested  to be included in the
Piggyback Registration by any Holder differ from the type of securities proposed
to be registered by the Company and the managing Underwriter advises the Company
that due to such differences the inclusion of such Registrable  Securities would
cause  a  Material  Adverse  Effect,  then  (i)  the  number  of  such  Holders'
Registrable  Securities  to be included in the Piggyback  Registration  shall be
reduced to an amount which,  in the opinion of the managing  Underwriter,  would
eliminate such Material  Adverse Effect or (ii) if no such reduction  would,  in
the opinion of the managing Underwriter, eliminate such Material Adverse Effect,
then the Company shall have the right to exclude all such Registrable Securities
from such Piggyback  Registration,  provided,  that no other  securities of such
type are  included  and  offered  for the  account  of any other  Person in such
Piggyback   Registration.   Any  partial  reduction  in  number  of  Registrable
Securities of any Holder to be included in the Piggyback  Registration  pursuant
to clause (i) of the immediately  preceding  sentence shall be effected pro rata
based on the ratio  which  such  Holder's  requested  shares  bears to the total
number of shares requested to be included in such Piggyback  Registration by all
Persons  other than the Company who have the  contractual  right to request that
their shares be included in such  registration  statement and who have requested
that their shares be included.  If the  Registrable  Securities  requested to be
included in the  registration  statement are of the same type as the  securities
being registered by the Company and the managing Underwriter advises the Company
that the inclusion of such Registrable Securities would cause a Material Adverse
Effect, the Company will be obligated to include in such registration statement,
as to each  Holder only a portion of the shares  such  Holder has  requested  be
registered equal to the ratio which such Holder's  requested shares bears to the
total number of shares requested to be included in such  registration  statement
by all Persons (other than the Person or Persons  initiating  such  registration
request) who have the contractual right to request that their shares be included
in such registration  statement and who have requested their shares be included.
If the Company initiated the  registration,  then the Company may include all of
its securities in such registration statement before any such Holder's requested
shares are included. If another security holder initiated the registration, then
the Company may not include any of its securities in such registration statement
unless all Registrable  Securities  requested to be included in the registration
statement by all Holders are included in such  registration  statement.  If as a
result of the provisions of this Section 2.2(b) any Holder shall not be entitled
to include all  Registrable  Securities in a  registration  that such Holder has
requested to be so included,  such Holder may withdraw such Holder's  request to
include  Registrable  Securities  in such  registration  statement  prior to its
effectiveness.

2.3      Shelf Registration

              (a) Holders  of a  majority of the  Registrable Securities held by
the Liberty  Holders  ("Majority  Liberty  Holders")  may, at any time after the
first  anniversary of the Closing Date,  make a written request that the Company
effect a shelf  registration of a portion of the Registrable  Securities held by
the Liberty Holders and their direct or indirect transferees (the "Liberty Shelf
Registration")  pursuant to Rule 415;  provided,  that the  aggregate  amount of
Registrable  Securities that may be included in such Liberty Shelf  Registration
may not exceed 25% of the Liberty  Holders'  Initial  Amount.  Upon receipt of a
request for the Liberty Shelf  Registration,  the Company shall promptly (but in

                                       7
<PAGE>

any event within 10 business days) give written  notice of the proposed  Liberty
Shelf Registration to all other Liberty Holders, and all such Holders (including
their  direct  and  indirect  transferees)  shall  have  the  right  to  include
Registrable  Securities  in  the  Liberty  Shelf  Registration  subject  to  the
foregoing limitation. From and after the second anniversary of the Closing Date,
the Majority  Liberty  Holders may make a written request that the Company amend
the Liberty Shelf  Registration to include in the Liberty Shelf  Registration no
more than 50% of the  Liberty  Holders'  Initial  Amount.  Upon  receipt of such
request,  the Company shall  promptly (but in any event within 10 business days)
give written notice of the proposed amendment to all other Liberty Holders,  and
all such Holders  (including their direct and indirect  transferees)  shall have
the  right to  include  Registrable  Securities  in the  amended  Liberty  Shelf
Registration  subject  to the  foregoing  limitation.  From and  after the third
anniversary  of the Closing  Date,  the  Majority  Liberty  Holders'  may make a
written request that the Company amend the Liberty Shelf Registration to include
in the  Liberty  Shelf  Registration  no more than 75% of the  Liberty  Holders'
Initial Amount. Upon receipt of such request, the Company shall promptly (but in
any event within 10 business days) give written notice of the proposed amendment
to all other Liberty Holders,  and all such Holders  (including their direct and
indirect transferees) shall have the right to include Registrable  Securities in
the amended Liberty Shelf Registration subject to the foregoing limitation. From
and after the fourth  anniversary  of the Closing  Date,  the  Majority  Liberty
Holders  may make a written  request  that the Company  amend the Liberty  Shelf
Registration  to include in the  Liberty  Shelf  Registration  up to 100% of the
Liberty Holders' Initial Amount. Upon receipt of such request, the Company shall
promptly (but in any event within 10 business  days) give written  notice of the
proposed amendment to all other Liberty Holders, and all such Holders (including
their  direct  and  indirect  transferees)  shall  have  the  right  to  include
Registrable  Securities in the amended Liberty Shelf  Registration up to 100% of
the Liberty Holders' Initial Amount.

              (b) Holders of a  majority of the Registrable  Securities  held by
the HMTF  Holders  ("Majority  HMTF  Holders")  may, at any time after the first
anniversary of the Closing Date,  make a written request that the Company effect
a shelf registration of a portion of the Registrable Securities held by the HMTF
Holders and their direct or indirect transferees (the "HMTF Shelf Registration")
pursuant  to Rule  415;  provided,  that the  aggregate  amount  of  Registrable
Securities that may be included in such HMTF Shelf  Registration  may not exceed
25% of the HMTF Holders' Initial Amount.  Upon receipt of a request for the HMTF
Shelf  Registration,  the Company  shall  promptly  (but in any event  within 10
business  days) give written notice of the proposed HMTF Shelf  Registration  to
all other  HMTF  Holders,  and all such  Holders  (including  their  direct  and
indirect transferees) shall have the right to include Registrable  Securities in
the HMTF Shelf Registration subject to the foregoing limitation.  From and after
the second anniversary of the Closing Date, the Majority HMTF Holders may make a
written request that the Company amend the HMTF Shelf Registration to include in
the HMTF  Shelf  Registration  no more  than 50% of the  HMTF  Holders'  Initial
Amount.  Upon receipt of such request,  the Company  shall  promptly (but in any
event within 10 business days) give written notice of the proposed  amendment to

                                       8
<PAGE>

all other  HMTF  Holders,  and all such  Holders  (including  their  direct  and
indirect transferees) shall have the right to include Registrable  Securities in
the amended HMTF Shelf Registration  subject to the foregoing  limitation.  From
and after the third  anniversary of the Closing Date, the Majority HMTF Holders'
may make a written request that the Company amend the HMTF Shelf Registration to
include in the HMTF  Shelf  Registration  no more than 75% of the HMTF  Holders'
Initial Amount. Upon receipt of such request, the Company shall promptly (but in
any event within 10 business days) give written notice of the proposed amendment
to all other HMTF  Holders,  and all such  Holders  (including  their direct and
indirect transferees) shall have the right to include Registrable  Securities in
the amended HMTF Shelf Registration  subject to the foregoing  limitation.  From
and after the fourth  anniversary of the Closing Date, the Majority HMTF Holders
may make a written request that the Company amend the HMTF Shelf Registration to
include in the HMTF Shelf  Registration up to 100% of the HMTF Holders'  Initial
Amount.  Upon receipt of such request,  the Company  shall  promptly (but in any
event within 10 business days) give written notice of the proposed  amendment to
all other  HMTF  Holders,  and all such  Holders  (including  their  direct  and
indirect transferees) shall have the right to include Registrable  Securities in
the amended  HMTF Shelf  Registration  up to 100% of the HMTF  Holders'  Initial
Amount.

              (c) If  the Company's ability to amend the registration  statement
for the Liberty  Shelf  Registration  or the HMTF Shelf  Registration  (each,  a
"Shelf Registration") to increase the number of Registrable  Securities included
therein (or to file a new shelf  registration  statement in respect  thereof) in
accordance with this Section 2.3 is subject to any contractual  limitations that
could  delay the  Company's  ability to file or cause to become  effective  such
registration  statement,  then, if requested by the Majority Liberty Holders (in
the case of Section 2.3(a)) or the Majority HMTF Holders (in the case of Section
2.3(b)) the Company  shall,  in lieu of  following  the  procedure  set forth in
Section 2.3(a) or Section 2.3(b), as the case may be, file a single registration
statement for the Shelf Registration referred to in the applicable provisions of
such  Sections  (and  cause  such  registration  statement  to become and remain
effective  for the  period  set forth in  Section  3.1) that  would  permit  the
offering of such portion of the  Registrable  Securities  (up to 100%) as may be
requested by the Majority Liberty Holders (in the case of Section 2.3(a)) or the
Majority HMTF Holders (in the case of Section 2.3(b)),  (it being understood and
agreed that the Holders of the Registrable  Securities  would not have the right
to offer and sell from such Shelf Registration Registrable Securities other than
in  accordance  with the  schedule  and amounts  set forth in Section  2.3(a) or
Section 2.3(b), as applicable).

                                  Article III

                             Registration Procedures

3.1      Filings; Information

         In connection with the registration of Registrable  Securities pursuant
to Section  2.1,  Section 2.2 and Section 2.3 hereof,  the Company  will use its
reasonable  best  efforts  to  effect  the   registration  of  such  Registrable
Securities as promptly as is reasonably practicable,  and in connection with any
such request:

              (a) The  Company  will  expeditiously  prepare  and file  with the
Commission  a  registration  statement  on any form for which the  Company  then
qualifies and which counsel for the Company shall deem appropriate and available
for the  sale of the  Registrable  Securities  to be  registered  thereunder  in
accordance  with  the  intended  method  of  distribution  thereof,  and use its
reasonable best efforts to cause such filed registration statement to become and
remain  effective  (i) with  respect to any  Demand  Registration  or  Piggyback
Registration,  for such  period,  not to  exceed 60 days,  as may be  reasonably
necessary  to effect the sale of such  securities,  (ii) with respect to a Shelf

                                       9
<PAGE>

Registration,  until  the  earlier  of the  sale of all  Registrable  Securities
thereunder  and the fifth  anniversary  of the  Closing  Date (or if such  Shelf
Registration  is filed or  amended  on or after the  fourth  anniversary  of the
Closing  Date,  then  the  earlier  of the  sale of all  Registrable  Securities
thereunder  and the  second  anniversary  of the  effective  date of such  Shelf
Registration)  (it  being  understood  that if at any time  all the  Registrable
Securities then permitted to be sold under such Shelf  Registration  pursuant to
Section  2.3 have  been  sold but the  Holders  have the  right to  request  the
addition of additional  Registrable  Securities to the Shelf Registration in the
future pursuant to Section 2.3, the Company may (at its option) either cause the
registration  statement to remain effective  (notwithstanding  the fact that all
securities then registrable on such shelf registration statement shall have been
sold) and file post-effective amendments when required to permit the sale of the
additional  Registrable  Securities or prepare and file, and cause to become and
remain effective,  a new shelf registration statement to effect the registration
of the additional Registrable Securities when required pursuant to Section 2.3);
provided that if the Company  shall furnish to the Selling  Holder a certificate
signed by the Company's Chairman,  President or any Executive  Vice-President or
Vice-President  stating that the Company's  Board of Directors has determined in
good faith that it would be  detrimental  or  otherwise  disadvantageous  to the
Company or its  stockholders  for such a  registration  statement to be filed as
expeditiously as possible because the sale of Registrable  Securities covered by
such  Registration  Statement or the  disclosure of  information  in any related
prospectus  or  prospectus   supplement  would  materially  interfere  with  any
acquisition,  financing or other  material  event or  transaction  which is then
intended  or the  public  disclosure  of which at the time  would be  materially
prejudicial to the Company, the Company may postpone the filing or effectiveness
of a  registration  statement  for a period of not more than 120 days;  provided
that during any 360-day period the Company shall use its reasonable best efforts
to permit a period of at least 180  consecutive  days  during  which the Company
will make a registration statement available under this Agreement;  and provided
further  that if (i) the  effective  date of any  registration  statement  filed
pursuant to a Demand  Registration would otherwise be at least 45 calendar days,
but fewer than 90 calendar days, after the end of the Company's fiscal year, and
(ii) the Securities Act requires the Company to include audited financials as of
the end of such fiscal  year,  the Company may delay the  effectiveness  of such
registration  statement  for such period as is  reasonably  necessary to include
therein its audited  financial  statements  for such fiscal year. If the Company
exercises its right to postpone the filing or  effectiveness  of a  registration
statement, the applicable Requesting Holders shall be entitled to withdraw their
request  for  such  Demand  Registration  and it  shall  not  count  as a Demand
Registration.

              (b) Anything in this Agreement to the contrary notwithstanding, it
is  understood  and agreed  that the  Company  shall not be required to keep any
shelf registration  effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration  statement,  if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment,  acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing,  supplement  or amendment at such time would  interfere
with such transaction or purpose. The Company shall promptly give the Holders of
Registrable Securities written notice of such postponement  containing a general
statement  of the  reasons for such  postponement  and an  approximation  of the
anticipated delay. Upon receipt by a Holder of Registrable  Securities of notice
of an event of the kind  described  in this  Section  3.1(b),  such Holder shall

                                       10
<PAGE>

forthwith discontinue such Holder's disposition of Registrable  Securities until
such  Holder's  receipt of notice from the  Company  that such  disposition  may
continue and of any supplemented or amended prospectus indicated in such notice.
The Company shall use its reasonable best efforts to permit sales of Registrable
Securities on such shelf registration statement for at least 180 days during any
360-day  period.  In the event the Company  shall give notice of an event of the
kind  described  in this  Section  3.1(b),  the Company  shall extend the period
during which the applicable registration statement shall be maintained effective
as  provided  in Section  3.1(a)  hereof by the number of days during the period
from and  including  the date of the giving of such  notice to the date when the
Company shall give notice to the Selling Holders that such  dispositions of such
Registrable Securities may continue and shall have made available to the Selling
Holders any such supplemented or amended prospectus.

              (c) The  Company   will,  if  requested,  prior  to   filing  such
registration  statement or any amendment or supplement  thereto,  furnish to the
Selling  Holders,  and each  applicable  managing  Underwriter,  if any,  copies
thereof,   and  thereafter   furnish  to  the  Selling  Holders  and  each  such
Underwriter,  if any,  such  number of copies  of such  registration  statement,
amendment and supplement  thereto (in each case  including all exhibits  thereto
and documents  incorporated by reference therein) and the prospectus included in
such  registration  statement  (including  each  preliminary  prospectus) as the
Selling  Holders or each such  Underwriter  may  reasonably  request in order to
facilitate the sale of the Registrable Securities by the Selling Holders.

              (d) After the filing of the  registration  statement,  the Company
will  promptly  notify the Selling  Holders of any stop order  issued or, to the
Company's  knowledge,  threatened  to be issued by the  Commission  and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.

              (e) The  Company  will use  its  commercially  reasonable  efforts
to  qualify  the  Registrable  Securities  for offer and sale  under  such other
securities  or blue sky laws of such  jurisdictions  in the United States as the
Selling Holders reasonably request; keep each such registration or qualification
(or exemption  therefrom) effective during the period in which such registration
statement  is required to be kept  effective;  and do any and all other acts and
things  which may be  reasonably  necessary  or advisable to enable each Selling
Holder to consummate the disposition of the Registrable Securities owned by such
Selling  Holder in such  jurisdictions;  provided  that the Company  will not be
required to (i) qualify  generally to do business in any  jurisdiction  where it
would not otherwise be required to qualify but for this paragraph  3.1(e),  (ii)
subject itself to taxation in any such  jurisdiction or (iii) consent to general
service of process in any such jurisdiction.

              (f) The  Company will  as promptly as  is practicable  notify  the
Selling  Holders,  at any time  when a  prospectus  relating  to the sale of the
Registrable  Securities  is required by law to be delivered in  connection  with
sales by an Underwriter or dealer,  of the occurrence of any event requiring the
preparation  of a  supplement  or  amendment  to such  prospectus  so  that,  as
thereafter  delivered to the  purchasers of such  Registrable  Securities,  such
prospectus  will not contain an untrue  statement of a material  fact or omit to
state any material fact  required to be stated  therein or necessary to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not  misleading and promptly make available to the Selling  Holders and to
the Underwriters any such supplement or amendment. Upon receipt of any notice of

                                       11
<PAGE>

the  occurrence of any event of the kind  described in the  preceding  sentence,
Selling  Holders will  forthwith  discontinue  the offer and sale of Registrable
Securities  pursuant to the  registration  statement  covering such  Registrable
Securities  until  receipt by the Selling  Holders and the  Underwriters  of the
copies of such  supplemented  or amended  prospectus  and, if so directed by the
Company,  the Selling Holders will deliver to the Company all copies, other than
permanent  file copies then in the  possession of Selling  Holders,  of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. In the event the Company shall give such notice,  the Company shall
extend the period during which such  registration  statement shall be maintained
effective as provided in Section  3.1(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make  available to the Selling  Holders such  supplemented  or
amended prospectus.

              (g) The Company will enter into customary agreements (including an
underwriting   agreement  in  customary   form)  and  take  such  other  actions
(including,  without  limitation,  participation  in  road  shows  and  investor
conference calls) as are required in order to expedite or facilitate the sale of
such Registrable Securities.

              (h) At the  request  of any  Underwriter  in  connection  with  an
underwritten  offering  the  Company  will  furnish  (i) an opinion of  counsel,
addressed to the  Underwriters,  covering such customary matters as the managing
Underwriter may reasonably  request and (ii) a comfort letter or comfort letters
from the  Company's  independent  public  accountants  covering  such  customary
matters as the managing Underwriter may reasonably request.

              (i) If  requested  by  the  managing  Underwriter  or any  Selling
Holder,  the Company shall promptly  incorporate  in a prospectus  supplement or
post  effective  amendment such  information as the managing  Underwriter or any
Selling Holder  reasonably  requests to be included  therein,  including without
limitation,  with  respect  to the  Registrable  Securities  being  sold by such
Selling Holder,  the purchase price being paid therefor by the  Underwriters and
with respect to any other terms of the underwritten  offering of the Registrable
Securities to be sold in such offering,  and promptly make all required  filings
of such prospectus supplement or post effective amendment.

              (j) The Company shall  promptly make available  for  inspection by
any Selling Holder or Underwriter  participating in any disposition  pursuant to
any  registration  statement,  and any  attorney,  accountant  or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the  "Inspectors"),   all  financial  and  other  records,  pertinent  corporate
documents and properties of the Company (collectively,  the "Records"), as shall
be  reasonably  necessary  to  enable  them  to  exercise  their  due  diligence
responsibility,  and cause the  Company's  officers,  directors and employees to
supply all  information  requested by any such Inspector in connection with such
registration  statement;  provided,  however, that unless the disclosure of such
Records is  necessary  to avoid or correct a  misstatement  or  omission  in the
registration  statement or the release of such Records is ordered  pursuant to a
subpoena  or other  order from a court of  competent  jurisdiction,  the Company
shall not be required to provide any information  under this subparagraph (j) if
(A) the Company believes,  after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an  attorney-client  privilege  that
was  applicable  to  such  information  or (B) if  either  (1) the  Company  has
requested and been granted from the  Commission  confidential  treatment of such
information  contained in any filing with the  Commission or documents  provided

                                       12
<PAGE>

supplementally  or otherwise or (2) the Company  reasonably  determines  in good
faith that such  Records are  confidential  and so notifies  the  Inspectors  in
writing unless prior to furnishing any such  information  with respect to (A) or
(B) such Holder of Registrable  Securities requesting such information agrees to
enter  into a  confidentiality  agreement  in  customary  form  and  subject  to
customary exceptions; provided further, however, that each Holder of Registrable
Securities agrees that it will, upon learning that disclosure of such Records is
sought in a court of  competent  jurisdiction,  give  notice to the  Company and
allow the  Company,  at its  expense,  to  undertake  appropriate  action and to
prevent disclosure of the Records deemed confidential.

              (k)  The Company shall cause the Registrable  Securities  included
in  any registration  statement to be (A) listed on each securities exchange, if
any, on which  similar  securities  issued  by  the  Company  are  then  listed,
or (B) authorized to be quoted and/or listed (to the extent  applicable)  on the
Nasdaq National Market if the Registrable Securities so qualify.

              (l) The Company shall  provide a CUSIP number for the  Registrable
Securities included  in any registration statement not later  than the effective
date of such registration statement.

              (m) The Company shall cooperate with each Selling  Holder and each
Underwriter participating  in the  disposition  of such  Registrable  Securities
and their respective counsel in connection with any filings  required to be made
with the National Association of Securities Dealers, Inc.

              (n) The Company  shall during  the period when the  prospectus  is
required to be  delivered under the Securities Act,  promptly file all documents
required to be filed with the Commission  pursuant  to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act.

              (o) The Company  will make  generally  available  to its  security
holders,  as soon as reasonably  practicable,  an earnings  statement covering a
period of 12 months,  beginning  within three months after the effective date of
the  registration   statement,   which  earnings  statement  shall  satisfy  the
provisions of Section 11(a) of the Securities Act and the rules and  regulations
of the Commission thereunder.

         The Company may require Selling Holders  promptly to furnish in writing
to the Company such  information  regarding  such Selling  Holders,  the plan of
distribution of the Registrable  Securities and other information as the Company
may from  time to time  reasonably  request  or as may be  legally  required  in
connection with such registration.

3.2      Registration Expenses

         In connection with any  Registration  effected  hereunder,  the Company
shall pay the following  expenses  incurred in connection with such registration
(the  "Registration  Expenses"):  (i)  registration  and  filing  fees  with the
Commission and the National  Association of Securities Dealers,  Inc., (ii) fees
and  expenses  of  compliance  with  securities  or  blue  sky  laws  (including
reasonable  fees and  disbursements  of  counsel  in  connection  with  blue sky
qualifications of the Registrable  Securities),  (iii) printing  expenses,  (iv)
fees and expenses  incurred in  connection  with the listing or quotation of the
Registrable Securities,  (v) fees and expenses of counsel to the Company and the

                                       13
<PAGE>

reasonable fees and expenses of independent certified public accountants for the
Company  (including fees and expenses  associated with the special audits or the
delivery  of comfort  letters),  (vi) the  reasonable  fees and  expenses of any
additional experts retained by the Company in connection with such registration,
(vii) all roadshow  costs and expenses not paid by the  Underwriters  and (viii)
the reasonable fees and expenses of one counsel for the Selling Holders.

                                   Article IV

                        Indemnification and Contribution

4.1      Indemnification by the Company

         The Company  agrees to indemnify and hold harmless each Selling  Holder
and  its  Affiliates  and  their  respective  officers,   directors,   partners,
stockholders, members, employees, agents and representatives and each Person (if
any) which  controls a Selling Holder within the meaning of either Section 15 of
the  Securities  Act or Section 20 of the Exchange Act, from and against any and
all  losses,  claims,  damages,  liabilities,   costs  and  expenses  (including
reasonable attorneys' fees) caused by, arising out of, resulting from or related
to any untrue statement or alleged untrue statement of a material fact contained
or  incorporated  by  reference  in any  registration  statement  or  prospectus
relating  to the  Registrable  Securities  (as  amended or  supplemented  if the
Company shall have  furnished  any  amendments  or  supplements  thereto) or any
preliminary  prospectus,  or caused by any omission or alleged omission to state
therein a material fact  required to be stated  therein or necessary to make the
statements  therein  not  misleading,  except  insofar as such  losses,  claims,
damages or liabilities are caused by or based upon any information  furnished in
writing to the Company by or on behalf of such Selling Holder  expressly for use
therein or by the Selling Holder's failure to deliver a copy of the registration
statement or  prospectus  or any  amendments  or  supplements  thereto after the
Company  has  furnished  the Selling  Holder with copies of the same;  provided,
however,  that the Company  shall have no  obligation  to  indemnify  under this
sentence to the extent any such losses, claims, damages or liabilities have been
finally and  non-appealably  determined  by a court to have  resulted  from such
Selling Holder's willful misconduct or gross negligence. The Company also agrees
to indemnify any Underwriters of the Registrable Securities,  their officers and
directors and each person who controls such  Underwriters on  substantially  the
same basis as that of the  indemnification  of the Selling  Holders  provided in
this Section 4.1, except insofar as such losses,  claims, damages or liabilities
are caused by or based upon any information  furnished in writing to the Company
by or on  behalf  of  such  Underwriter  expressly  for  use  therein  or by the
Underwriter's  failure  to  deliver  a copy  of the  registration  statement  or
prospectus  or any  amendments  or  supplements  thereto  after the  Company has
furnished the Underwriter with copies of the same; provided,  however,  that the
Company shall have no obligation to indemnify  under this sentence to the extent
any  such  losses,   claims,  damages  or  liabilities  have  been  finally  and
non-appealably   determined   by  a  court  to  have   resulted  from  any  such
Underwriter's willful misconduct or gross negligence.

                                       14
<PAGE>

4.2      Indemnification by Selling Holders

         Each Selling  Holder agrees to indemnify and hold harmless the Company,
its officers and directors,  and each Person, if any, which controls the Company
within the meaning of either  Section 15 of the  Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing  indemnity from the Company
to each Selling  Holder,  but only with  reference to  information  furnished in
writing  by or on  behalf  of  such  Selling  Holder  expressly  for  use in any
registration statement or prospectus relating to the Registrable Securities,  or
any amendment or supplement thereto, or any preliminary prospectus. Each Selling
Holder  also agrees to  indemnify  and hold  harmless  any  Underwriters  of the
Registrable  Securities,  their  officers  and  directors  and each  person  who
controls  such  Underwriters  on  substantially  the  same  basis as that of the
indemnification  of the Company  provided  in this  Section  4.2,  but only with
reference  to  information  furnished in writing by or on behalf of such Selling
Holder expressly for use in any registration statement or prospectus relating to
the  Registrable  Securities,  or any  amendment or supplement  thereto,  or any
preliminary prospectus.  Each such Selling Holder's liability under this Section
4.2 shall be limited to an amount equal to the net proceeds (after deducting the
underwriting  discount and  expenses)  received by such Selling  Holder from the
sale of such  Registrable  Securities by such Selling Holder.  The obligation of
each Selling Holder shall be several and not joint.

4.3      Conduct of Indemnification Proceedings

         In case any proceeding (including any governmental investigation) shall
be instituted  involving any Person in respect of which  indemnity may be sought
pursuant to Section 4.1 or Section 4.2,  such Person (the  "Indemnified  Party")
shall promptly  notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request of
the  Indemnified  Party,  shall retain counsel  reasonably  satisfactory to such
Indemnified  Party to  represent  such  Indemnified  Party  and any  others  the
Indemnifying  Party may designate in such  proceeding and shall pay the fees and
disbursements  of  such  counsel  related  to  such  proceeding.   In  any  such
proceeding,  any  Indemnified  Party  shall  have the  right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such  Indemnified  Party unless (i) the  Indemnifying  Party and the Indemnified
Party shall have  mutually  agreed to the  retention of such counsel or (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the  Indemnified  Party and the  Indemnifying  Party  and,  in the  written
opinion of counsel for the Indemnified Party,  representation of both parties by
the same counsel  would be  inappropriate  due to actual or potential  differing
interests between them. It is understood that the Indemnifying  Party shall not,
in  connection   with  any  proceeding  or  related   proceedings  in  the  same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of  attorneys  (in  addition  to any  local  counsel)  at any  time for all such
Indemnified  Parties, and that all such fees and expenses shall be reimbursed as
they are incurred.  In the case of any such  separate  firm for the  Indemnified
Parties,  such firm shall be designated in writing by the  Indemnified  Parties.
The Indemnifying  Party shall not be liable for any settlement of any proceeding
effected without its written  consent,  but if settled with such consent (not to
be  unreasonably  withheld),  or if there be a final judgment for the plaintiff,
the  Indemnifying  Party shall  indemnify  and hold  harmless  such  Indemnified
Parties from and against any loss or liability  (to the extent  stated above) by
reason of such settlement or judgment.

                                       15
<PAGE>

4.4      Contribution

         If the  indemnification  provided for in this Article IV is unavailable
to an Indemnified Party in respect of any losses, claims, damages or liabilities
in  respect  of which  indemnity  is to be  provided  hereunder,  then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the
fullest extent permitted by law contribute to the amount paid or payable by such
Indemnified Party as a result of such losses,  claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of such party in
connection  with the  statements  or  omissions  that  resulted in such  losses,
claims,  damages  or  liabilities,  as  well  as any  other  relevant  equitable
considerations.  The  relative  fault of the Company,  a Selling  Holder and the
Underwriters  shall be determined  by reference to, among other things,  whether
the untrue or alleged  untrue  statement  of a material  fact or the omission or
alleged  omission to state a material  fact relates to  information  supplied by
such party and the parties'  relative intent,  knowledge,  access to information
and opportunity to correct or prevent such statement or omission.

         The Company and each  Selling  Holder  agrees that it would not be just
and equitable if  contribution  pursuant to this Section 4.4 were  determined by
pro rata  allocation  (even if the  Underwriters  were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount  paid or payable by an  Indemnified  Party as a result of the losses,
claims,  damages  or  liabilities  referred  to  in  the  immediately  preceding
paragraph  shall be deemed to  include,  subject  to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in  connection  with  investigating  or  defending  any such  action  or  claim.
Notwithstanding  the  provisions  of this  Article IV, no  Underwriter  shall be
required  to  contribute  any  amount in excess of the amount by which the total
price at which the securities  underwritten  by it and distributed to the public
were  offered  to the  public  exceeds  the  amount of any  damages  which  such
Underwriter  has  otherwise  been  required  to pay by reason of such  untrue or
alleged  untrue  statement  or omission or alleged  omission,  and each  Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting  expenses)  received by
such Selling  Holder exceeds the amount of any damages which such Selling Holder
has otherwise  been  required to pay by reason of such untrue or alleged  untrue
statement  or  omission  or alleged  omission.  No person  guilty of  fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any Person who was not guilty of such
fraudulent misrepresentation.

                                   Article V

                                  Miscellaneous

5.1      Participation in Underwritten Registrations

         No Person  may  participate  in any  underwritten  registered  offering
contemplated  hereunder  unless such Person (a) agrees to sell its securities on
the basis  provided  in any  underwriting  arrangements  approved by the Persons
entitled hereunder to approve such arrangements,  (b) completes and executes all
questionnaires,   powers  of  attorney,   custody   arrangements,   indemnities,
underwriting  agreements and other documents reasonably required under the terms

                                       16
<PAGE>

of such  underwriting  arrangements  and this  Agreement  and (c)  furnishes  in
writing to the Company  such  information  regarding  such  Person,  the plan of
distribution of the Registrable  Securities and other information as the Company
may from time to time request or as may be legally  required in connection  with
such registration;  provided,  however, that no such Person shall be required to
make any  representations or warranties in connection with any such registration
other than  representations  and warranties as to (i) such Person's ownership of
his or its  Registrable  Securities to be sold or transferred  free and clear of
all liens,  claims and  encumbrances,  (ii) such Person's power and authority to
effect such  transfer  and (iii) such  matters  pertaining  to  compliance  with
securities laws as may be reasonably requested;  provided further, however, that
the  obligation  of such Person to indemnify  pursuant to any such  underwriting
agreements shall be several,  not joint and several,  among such Persons selling
Registrable  Securities,  and the  liability  of  each  such  Person  will be in
proportion to, and provided  further that such liability will be limited to, the
net amount  received by such Person from the sale of such  Person's  Registrable
Securities pursuant to such registration.

5.2      Rule 144

         The  Company  covenants  that it will file any  reports  required to be
filed by it under the  Securities Act and the Exchange Act and that it will take
such further action as the Holders may reasonably request to the extent required
from time to time to enable the Holders to sell Registrable  Securities  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by Rule 144 under the Securities  Act, as such Rule may be amended from
time to  time,  or any  similar  rule or  regulation  hereafter  adopted  by the
Commission.  Upon the request of any Holder,  the Company  will  deliver to such
Holder a written  statement  as to whether it has complied  with such  reporting
requirements.

5.3      Holdback Agreements

         The Liberty Holders,  for so long as they  collectively own Registrable
Securities  representing  10% or more of the  voting  power  of the  outstanding
voting  securities  of the Company,  and the HMTF  Holders,  for so long as they
collectively own Registrable  Securities  representing 10% or more of the voting
power of the outstanding  voting securities of the Company,  severally agree, in
the event of an underwritten offering by the Company (whether for the account of
the Company or  otherwise)  not to offer,  sell,  contract to sell or  otherwise
dispose of any Registrable  Securities,  or any securities  convertible  into or
exchangeable or exercisable for such securities,  including any sale pursuant to
Rule  144  under  the  Securities  Act  (except  as part  of  such  underwritten
offering),  during the 14 days  prior to, and during the 90-day  period (or such
lesser period as the lead or managing  underwriters  may require)  beginning on,
the effective date of the registration  statement for such underwritten offering
(or, in the case of an  offering  pursuant to an  effective  shelf  registration
statement  pursuant  to  Rule  415,  the  pricing  date  for  such  underwritten
offering),  provided that in  connection  with such  underwritten  offering each
officer  and  director  of the  Company  and holder of 10% or more of the Common
Stock is subject to  restrictions  substantially  equivalent to those imposed on
the Liberty Holders and the HMTF Holders.

                                       17
<PAGE>

5.4      Termination

         The registration  rights granted under this Agreement will terminate on
April 10, 2015, or such earlier time as there shall no longer be any Registrable
Securities;  provided,  however,  that if all shares of Series A Preferred Stock
outstanding on such date shall not have been redeemed in full in accordance with
Section 10 of the  Certificate of  Designations,  this Agreement shall remain in
full force and effect with respect to the Registrable Securities until such time
as the shares of Series A Preferred Stock have been so redeemed in full.

5.5      Amendments, Waivers, Etc.

         This  Agreement  may not be amended,  waived or  otherwise  modified or
terminated  except by an  instrument  in writing  signed by the  Company and the
Holders  of at least  50% of the  Registrable  Securities  then  held by all the
Holders, if the amendment is to be effective against the Holders.

5.6      Counterparts

         This  Agreement  may be  executed in one or more  counterparts,  all of
which shall be considered one and the same  agreement.  Each party need not sign
the same counterpart.

5.7      Entire Agreement

         This Agreement (i) constitutes the entire  agreement and supersedes all
prior  agreements and  understandings,  both written and oral, among the parties
with respect to the subject matter hereof.

5.8      Governing Law

         This Agreement shall be governed by, and construed in accordance  with,
the laws of the State of New York  regardless  of the laws that might  otherwise
govern under applicable principles of conflicts of law thereof.

5.9      Assignment of Registration Rights

         Each Holder of the Registrable Securities may assign all or any part of
its  rights  under  this  Agreement  to any  person to whom such  Holder  sells,
transfers, assigns or pledges such Registrable Securities. In the event that the
Holder shall assign its rights pursuant to this Agreement in connection with the
transfer  of less than all its  Registrable  Securities,  the Holder  shall also
retain its rights with respect to its remaining Registrable Securities.

                                       18
<PAGE>

                  IN WITNESS  WHEREOF,  the  Company  and each Holder has caused
this  Agreement  to be  signed  on its  behalf  by its  officer  thereunto  duly
authorized as of the date first written above.

                                            ICG COMMUNICATIONS, INC.

                                            By: /s/ Don Teague
                                               ---------------------------------
                                               Name: H. Don Teague
                                               Title: Executive Vice President

<PAGE>

                 IN WITNESS  WHEREOF,  the  Company  and each Holder has caused
this  Agreement  to be  signed  on its  behalf  by its  officer  thereunto  duly
authorized as of the date first written above.

                                            HMTF BRIDGE ICG, LLC
                                            HM 4-EQ ICG COINVESTORS, LLC
                                            HM 4-SBS ICG COINVESTORS, LLC
                                            HM PG-IV ICG, LLC
                                            HM4 ICG QUALIFIED FUND, LLC
                                            HM4 ICG PRIVATE FUND, LLC

                                            By: /s/ David Knickel
                                               ---------------------------------
                                               Name: David Knickel
                                               Title: Vice President

<PAGE>

                                            LIBERTY MEDIA CORPORATION

                                            By: /s/ Charles Y. Tanabe
                                               ---------------------------------
                                               Name: Charles Y. Tanabe
                                               Title: Senior Vice President

<PAGE>

                                            GLEACHER/ICG INVESTORS LLC

                                            By: /s/ Richard Trabulsi
                                               ---------------------------------
                                               Name: Richard Trabulsi
                                               Title: Member

<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>

Purchasers                         Series of       Number of
                                   Preferred       Preferred   Number of     Purchase Price
                                     Stock          Shares     Warrants       of the Shares

<S>                                <C>               <C>        <C>           <C>
Liberty Media Corporation          Series A-1        50,000     6,666,667     $500,000,000
HMTF Bridge ICG, LLC               Series A-2        11,500     1,533,334     $115,000,000
HM4 ICG Qualified Fund, LLC        Series A-2        10,464     1,395,253     $104,644,000
HM4 ICG Private Fund, LLC          Series A-2            74         9,885         $741,000
HM PG-IV ICG, LLC                  Series A-2           557        74,281       $5,571,000
HM 4-SBS ICG Coinvestors, LLC      Series A-2           251        33,412       $2,506,000
HM 4-EQ ICG Coinvestors, LLC       Series A-2           154        20,502       $1,538,000
Gleacher/ICG Investors LLC         Series A-3         2,000       266,666      $20,000,000
</TABLE>

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