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                                                                    EXHIBIT 10.2

                               ITC/\DELTACOM, INC.

           CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND
           RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
          OF SERIES B-[  ] CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
              QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

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

   ITC/\DeltaCom, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to authority conferred upon the board of directors of the
Corporation (the "Board of Directors") by the Corporation's Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"),
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors is authorized to issue preferred
stock of the Corporation in one or more series, and the Board of Directors has
duly approved and adopted the following resolution on               , 200  (the
"Resolution"):

     RESOLVED that, pursuant to the authority vested in the Board of
  Directors by its Certificate of Incorporation, the Board of Directors
  hereby creates, authorizes and provides for the issuance of a series of the
  preferred stock of the Corporation, par value $.01 per share (such
  preferred stock designated as the "Series B-[  ] Cumulative Convertible
  Preferred Stock"), consisting of         shares and having the powers,
  preferences and relative, participating, optional and other special rights
  and the qualifications, limitations and restrictions thereof that are set
  forth in the Certificate of Incorporation and in this Resolution as
  follows:

   1. Number and Designation.           shares of the preferred stock of the
Corporation shall constitute a series designated as "Series B-[  ] Cumulative
Convertible Preferred Stock" (the "Series B-[  ] Preferred Stock").

   2. Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meaning indicated.

   "Affiliate" with respect to a Person shall have the meaning ascribed to such
term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, and
shall include an officer or director of such Person.

   "Applicable Conversion Price" means $      , subject to adjustment from time
to time pursuant to Section 8(g).

   "beneficial ownership" of securities of any Person means such ownership
determined in accordance with Section 13(d) of the Exchange Act and Rule 13d-3
thereunder.

   "Benefit Plans" means the ITC/\DeltaCom, Inc. 1997 Stock Option Plan, the
ITC/\DeltaCom, Inc. Director Stock Option Plan, the ITC Holding Company, Inc.
Amended and Restated Stock Option Plan, the ITC Holding Company, Inc.
NonEmployee Director Stock Option Plan and the ITC/\DeltaCom, Inc. Employee
Profit Sharing & 401(k) Plan.

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

   "Business Day" means any day except Saturday, Sunday and any legal holiday
or a day on which banking institutions in New York City, New York or the State
of Georgia generally are authorized or required by law or other governmental
actions to close.

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   "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 Issue Date or issued after the Issue Date, and any and all
rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.

   "Common Stock" means any shares of the common stock, par value $.01 per
share, of the Corporation now or hereafter authorized to be issued, and any and
all securities of any kind whatsoever of the Corporation which may be exchanged
for or reclassified or converted into Common Stock, any and all securities of
any kind whatsoever of the Corporation which may be issued on or after the date
hereof in respect of, in exchange for, or upon reclassification or conversion
of shares of Common Stock pursuant to a merger, consolidation, stock split,
reclassification, stock dividend, recapitalization of the Corporation or
otherwise.

   "Common Stock Deemed Outstanding" means the number of shares of Common Stock
actually outstanding, plus the maximum total number of shares of Common Stock
issuable upon the exercise of any then outstanding Warrants or issuable upon
conversion of any then outstanding Series A Preferred Stock or Series B
Preferred Stock, whether or not such Warrants, Series A Preferred Stock or
Series B Preferred Stock are actually exercisable, convertible or exchangeable
at such time, without duplication.

   "Convertible Notes" means the 4 1/2% Convertible Subordinated Notes due 2008
of the Corporation.

   "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

   "Initial Holder" means ITC Holding Company, Inc.

   "Initial Issue Date" means the date on which the Corporation issues and
sells shares of the Series B-1 Preferred Stock pursuant to the Investment
Agreement.

   "Investment Agreement" means the Investment Agreement, dated as of February
27, 2001, as amended from time to time, between the Corporation and the Initial
Holder.

   "Issue Date" means           , 200 . [the date of issuance and sale of the
Series B-[  ] Preferred Stock].

   "Liquidation Preference" with respect to a share of Series B-[  ] Preferred
Stock means, as at any date, the sum of (x) $1,000.00 plus (y) any Special
Amount with respect to such share plus (z) an amount equal to any accrued and
unpaid Preferred Dividends (as defined in Section 4(a)) with respect to such
share from the last Dividend Payment Date through such date.

   "Market Price" means, with respect to the Common Stock, on any given day,
(i) the price of the last trade, as reported on the Nasdaq National Market, not
identified as having been reported late to such system, or (ii) if the Common
Stock is so traded, but not so quoted, the average of the last bid and ask
prices, as those prices are reported on the Nasdaq National Market, or (iii) if
the Common Stock is not listed or authorized for trading on the Nasdaq National
Market or any comparable system, the average of the closing bid and ask prices
as furnished by two members of the National Association of Securities Dealers,
Inc. selected from time to time in good faith by the Board of Directors for
that purpose. If the Common Stock is not listed and traded in a manner that the
quotations referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be the fair value
per share of such security as determined in good faith by the Board of
Directors.

   "Nasdaq" means The Nasdaq Stock Market, Inc.

   "Original Purchase Price" means, with respect to a share of Series B-[  ]
Preferred Stock, $1,000.00.

   "outstanding," when used with reference to shares of Common Stock, means
issued shares, excluding shares held by a subsidiary of the Corporation.

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   "Person" means any corporation, limited liability company, partnership,
trust, organization, association, other entity or individual.

   "Series A Designation" means the Certificate of Designation for the Series A
Preferred Stock.

   "Series A Preferred Stock" means the Series A Convertible Preferred Stock,
par value $.01 per share, of the Corporation.

   "Series B Certificates of Designation" means, collectively, this Certificate
of Designation and the certificates of designation with respect to each other
series of the Series B Preferred Stock.

   "Series B Preferred Stock" means, collectively, the Series B-[  ] Preferred
Stock created hereby and each other series of preferred stock, par value $.01
per share, of the Corporation designated by the Board of Directors as "Series
B-[  ] Cumulative Convertible Preferred Stock" which is issued pursuant to the
Investment Agreement.

   "Special Amount" with respect to a share of Series B-[  ] Preferred Stock
means an amount equal to all dividends and other amounts which have become
payable in respect of such share under Section 4(a) but which have not been
paid. The Special Amount with respect to any such share shall be reduced by the
amount of any such dividends and other amounts actually paid in respect of such
share under Section 4(c).

   "Warrants" means the common stock purchase warrants issued by the
Corporation pursuant to the Investment Agreement.

   3. Rank. The Series B-[  ] Preferred Stock shall, with respect to dividend
rights and rights on liquidation, dissolution and winding-up, rank (i) senior
to the Common Stock and to each other class of Capital Stock of the Corporation
or series of preferred stock of the Corporation established hereafter by the
Board of Directors, the terms of which do not expressly provide that such class
or series ranks senior to, or on a parity with, the Series B Preferred Stock as
to dividend rights and rights on liquidation, dissolution and winding-up of the
Corporation, and senior to the Series A Preferred Stock with respect to
dividend rights (collectively referred to, together with all classes of Common
Stock of the Corporation and with the Series A Preferred Stock (solely in
respect of dividend rights), as "Junior Securities"); (ii) on a parity with the
Series A Preferred Stock (solely with respect to rights on liquidation,
dissolution and winding-up of the Corporation), each other series of Series B
Preferred Stock and each class of Capital Stock of the Corporation or series of
preferred stock of the Corporation established hereafter by the Board of
Directors in accordance with Section 9(d), the terms of which expressly provide
that such class or series shall rank on a parity with the Series B Preferred
Stock as to dividend rights or rights on liquidation, dissolution and winding-
up (collectively referred to as "Parity Securities"); and (iii) junior to each
class of Capital Stock of the Corporation or series of preferred stock of the
Corporation established hereafter by the Board of Directors in accordance with
Section 9(d), the terms of which expressly provide that such class or series
shall rank senior to the Series B Preferred Stock as to dividend rights and
rights on liquidation, dissolution and winding-up of the Corporation
(collectively referred to as "Senior Securities").

   4. Dividends.

   (a) The holders of shares of Series B-[  ] Preferred Stock shall be entitled
to receive with respect to each share of Series B-[  ] Preferred Stock, when,
as and if declared by the Board of Directors, out of funds legally available
for the payment of dividends, dividends at the rate of 8% per annum of the sum
of the Original Purchase Price plus any Special Amount with respect to such
share (the "Preferred Dividend"). Preferred Dividends on a share of Series B-
[  ] Preferred Stock shall accrue and shall be cumulative whether or not
declared from the date of issue of such share of Series B-[  ] Preferred Stock
and shall be payable quarterly in arrears on April 15, July 15, October 15 and
January 15 of each year (unless such day is not a Business Day, in which event
such dividends shall be payable on the next succeeding Business Day) (each
such date being a "Dividend Payment Date" and each such quarterly period being
a "Dividend Period"),

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commencing on the Dividend Payment Date for the first full Dividend Period
occurring after the Issue Date. Each such dividend shall be payable to the
holders of record of shares of the Series B-[  ] Preferred Stock as they appear
on the stock register of the Corporation at the close of business on the
corresponding Record Date. As used herein, the term "Record Date." means, with
respect to the dividend payable on April 15, July 15, October 15 and January
15, respectively, of each year, the preceding March 31, June 30, September 30
and December 31, or such other date, not more than 60 days or less than 10 days
preceding the payment dates thereof, as shall be fixed as the record date by
the Board of Directors. Notwithstanding the foregoing provisions of this
Section 4(a), so long as any shares of Series B-[  ] Preferred Stock and any
shares of any other series of Series B Preferred Stock are outstanding, no
dividends shall be declared or paid or set aside for payment upon any shares of
any series of Series B Preferred Stock for any current Dividend Period pursuant
to Section 4(a) of the Series B Certificates of Designation unless such
dividends are (i) declared and paid in full, or declared and a sum sufficient
for such payment is set aside for payment in full, of all such dividends on all
series of Series B Preferred Stock, or (ii) declared and paid ratably, or
declared and a sum sufficient for such payment is set aside for payment
ratably, on all series of Series B Preferred Stock in proportion to the
respective amounts of dividends accumulated and unpaid with respect to all
series of Series B Preferred Stock for such current Dividend Period.

   (b) The amount of Preferred Dividends payable on the initial Dividend
Payment Date, or in respect of any period shorter or longer than a full
Dividend Period, on the Series B-[  ] Preferred Stock shall be computed on the
basis of twelve 30-day months and a 360-day year. No interest, or sum or money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series B-[  ] Preferred Stock that may be in arrears.

   (c) Accrued Special Amounts for any past Dividend Periods may be declared
and paid on any subsequent Dividend Payment Date to holders of record on the
corresponding Record Date.

   (d) In the sole discretion of the Corporation, any Preferred Dividend may be
paid (i) in cash, (ii) in shares of Series B-[  ] Preferred Stock (including
fractional shares) or (iii) in a combination of cash and shares of Series B-
[  ] Preferred Stock. Each share of Series B-[  ] Preferred Stock issued in
payment of a Preferred Dividend shall be valued at, solely for purposes of
determining the number of shares of Series B-[  ] Preferred Stock to be issued
as a dividend, the Original Purchase Price and shall, upon issuance, be duly
and validly issued, fully paid and non-assessable and not subject to preemptive
rights. Payment of a Preferred Dividend in shares of Series B-[  ] Preferred
Stock shall be made by delivering certificates evidencing such shares to the
holders of the Series B-[  ] Preferred Stock in such denominations as each such
holder may request at such holder's address as it shall appear on the stock
register of the Corporation.

   (e) So long as any shares of Series B-[  ] Preferred Stock are outstanding,
no dividend, except as described in the last sentence of Section 4(f) and
except as described in the next succeeding sentence, shall be declared or paid
or set apart for payment on any Parity Securities, nor shall any Parity
Securities be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any Parity Securities) by the Corporation (except by conversion
into or exchange for Parity Securities or Junior Securities), unless in each
case all Special Amounts have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof is set apart for such
payment on the Series B-[  ] Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of the dividend on, or the date
of redemption, purchase, or acquisition for consideration of, such Parity
Securities. When Special Amounts are not paid in full or a sum sufficient for
such payment is not set apart, as aforesaid, all Special Amounts and additional
amounts declared upon shares of the Series B-[  ] Preferred Stock and all
dividends and additional amounts declared upon any other Parity Securities
shall be declared ratably in proportion to the respective amounts of Special
Amounts and additional amounts accumulated and unpaid on the Series B-[  ]
Preferred Stock and dividends and additional amounts accumulated and unpaid on
such Parity Securities.

   (f) So long as any shares of the Series B-[  ] Preferred Stock are
outstanding, no dividends shall be declared or paid or set apart for payment
and no other distribution shall be declared or made upon Junior

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Securities, nor shall any Junior Securities be redeemed, purchased or otherwise
acquired (any such dividend, distribution, redemption, purchase or acquisition
being hereinafter referred to as a "Junior Securities Distribution") for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any Junior Securities) by the Corporation, directly or
indirectly (except by conversion into or exchange for Junior Securities),
unless in each case (i) all Special Amounts and additional amounts on all
outstanding shares of the Series B-[  ] Preferred Stock and accrued and unpaid
dividends and additional amounts on any other Parity Securities shall have been
paid or set apart for payment for all past Dividend Periods with respect to the
Series B-[  ] Preferred Stock and all past dividend periods with respect to
such Parity Securities and (ii) sufficient funds shall have been paid or set
apart for the payment of the dividend for the current Dividend Period with
respect to the Series B-[  ] Preferred Stock and the current dividend period
with respect to such Parity Securities. Notwithstanding anything in this
Certificate of Designation to the contrary, the Corporation may declare and pay
dividends on Parity Securities which are payable solely in additional shares
of, or by the increase in the liquidation value of, Parity Securities or on
Junior Securities which are payable in additional shares of, or by the increase
in the liquidation value of, Junior Securities, as applicable, or redeem,
purchase or otherwise acquire Junior Securities in exchange for Junior
Securities, and Parity Securities in exchange for Parity Securities or Junior
Securities.

   (g) So long as any shares of Series B-[  ] Preferred Stock are outstanding,
if the Corporation pays a dividend in cash or other property on the Common
Stock, other than a dividend in shares of Capital Stock, then at the same time
the Corporation shall declare and pay a dividend on each share of Series B-[  ]
Preferred Stock in an amount equal to the dividend which would otherwise have
been declared and paid with respect to the Common Stock issuable upon
conversion of Series B-[  ] Preferred Stock if all of the outstanding Series B-
[  ] Preferred Stock had been converted immediately prior to the record date
for such dividend, or, if no record date is fixed, the date as of which the
record holders of Common Stock entitled to such dividend are to be determined.

   5. Liquidation Preference.

   (a) In the event of any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, after payment or distribution of
the assets of the Corporation (whether capital or surplus) shall be made to or
set apart for the holders of Senior Securities, and before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of Junior Securities, the holders
of shares of Series B-[  ] Preferred Stock shall be entitled to receive an
amount in cash equal to the greater of (x) the aggregate Liquidation
Preferences of the shares of Series B-[  ] Preferred Stock as of the date of
liquidation, or (y) the aggregate amount that would have been received with
respect to the shares of Common Stock if the Series B-[  ] Preferred Stock had
been converted to Common Stock immediately prior to such liquidation,
dissolution or winding-up. If, upon any liquidation, dissolution or winding-up
of the Corporation, the assets of the Corporation, or proceeds thereof, shall
be insufficient to pay in full the aforesaid amounts under clause (x) of the
preceding sentence and liquidating payments on all Parity Securities, then such
assets, or proceeds thereof, shall be distributed among the shares of Series B-
[  ] Preferred Stock and all such other Parity Securities ratably in accordance
with the respective amounts that would be payable on such shares of Series B-
[  ] Preferred Stock and any such other Parity Securities if all amounts
payable thereon were paid in full. Any amounts distributed with respect to the
Series B-[  ] Preferred Stock pursuant to this Section 5(a) shall be allocated
pro rata among the shares of Series B-[  ] Preferred Stock. For the purposes of
Section 5, neither the sale, conveyance, exchange or transfer (for cash, shares
of capital stock, securities or other consideration) of all or substantially
all of the property or assets of the Corporation nor the consolidation or
merger of the Corporation with or into one or more other entities shall be
deemed to be a liquidation, dissolution or winding-up of the Corporation.

   (b) Subject to the rights of the holders of any Parity Securities, after
payment shall have been made in full to the holders of Series B-[  ] Preferred
Stock, as provided in Section 5(a), any other series or class or classes of
Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to
be paid or distributed, and the holders of the Series B-[  ]

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Preferred Stock and any Parity Securities (other than the Series A Preferred
Stock, to the extent provided in the Series A Designation) shall not be
entitled to share therein.

   6. Redemption.

   (a) Other than redemption of outstanding shares of capital stock of the
Corporation pursuant to Section 4.4 of the Certificate of Incorporation, no
shares of Series B-[  ] Preferred Stock shall be redeemable by the Corporation
prior to the fifth anniversary of the Issue Date. On and after the fifth
anniversary of the Issue Date, to the extent the Corporation shall have funds
legally available for such payment, and subject to the rights of the holders
pursuant to Section 8, the Corporation may redeem at its option shares of
Series B-[  ] Preferred Stock, at any time in whole or from time to time in
part, at a redemption price per share in cash equal to the Liquidation
Preference as of the date fixed for redemption, without interest.

   (b) On the tenth anniversary of the Issue Date, the Corporation shall redeem
all outstanding shares of Series B-[  ] Preferred Stock, if any, at a
redemption price per share in cash equal to the Liquidation Preference as of
the date fixed for redemption, without interest.

   (c) Except as reissued in compliance with Section 9(e), shares of Series B-
[  ] Preferred Stock which have been issued and reacquired by the Corporation
in any manner, including shares purchased or redeemed, shall (upon compliance
with any applicable provisions of the laws of the State of Delaware) be retired
and have the status of authorized and unissued shares of the class of preferred
stock of the Corporation undesignated as to series and may be redesignated and
reissued as part of any series of the preferred stock of the Corporation;
provided that no such issued and reacquired shares of Series B-[  ] Preferred
Stock shall be reissued or sold as Series B Preferred Stock.

   (d) If the Corporation is unable or shall fail to discharge its obligation
to redeem outstanding shares of Series B-[  ] Preferred Stock pursuant to
Section 6(b) (the "Scheduled Redemption Obligation"), the Scheduled Redemption
Obligation shall be discharged as soon as the Corporation is able to discharge
such Scheduled Redemption Obligation. If and so long as any Scheduled
Redemption Obligation with respect to any shares of outstanding Series B-[  ]
Preferred Stock shall not be fully discharged, the Corporation shall not (i)
redeem, purchase or otherwise acquire any Parity Securities or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities or (ii) declare or make any Junior Securities
Distribution or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Junior
Securities.

   7. Procedure for Redemption.

   (a) In the event that fewer than all the outstanding shares of Series B-[  ]
Preferred Stock eligible to be redeemed are to be redeemed, in the case of
Section 6(a), the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded up to the nearest whole share).

   (b) In the event the Corporation shall redeem shares of Series B-[  ]
Preferred Stock pursuant to Section 6(a), notice of such redemption shall be
given by first class mail, postage prepaid, mailed not less than 30 days nor
more than 60 days prior to the redemption date, to each holder of record of the
shares to be redeemed at such holder's address as such address appears on the
stock register of the Corporation; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving of
notice for the redemption of any share of Series B-[  ] Preferred Stock to be
redeemed except as to the holder to whom the Corporation has failed to give
such notice or except as to the holder whose notice was defective. Each such
notice shall state: (i) the date fixed for redemption; (ii) the number of
shares of Series B-[  ] Preferred Stock to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number of shares to be
redeemed from such holder; (iii) the redemption price; (iv) the place or places
where certificates representing such shares are to be surrendered for payment
of the redemption price; and (v) that dividends on the shares to be redeemed
shall cease to accrue on such redemption date.

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   (c) Notice having been mailed as aforesaid, if applicable, from and after
the date fixed for redemption, dividends on the shares of Series B-[  ]
Preferred Stock so called for redemption shall cease to accrue, and all rights
of the holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price and except the right to
convert shares so called for redemption prior to the close of business on the
last Business Day immediately preceding the date fixed for such redemption)
shall cease. Upon surrender in accordance with such notice, if applicable, of
the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the redemption price aforesaid. In case fewer than all the shares represented
by any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the holder thereof.

   8. Conversion.

   (a) Subject to the provisions of this Section 8, the holders of shares of
Series B-[  ] Preferred Stock shall have the right, at any time in whole and
from time to time in part, at such holders' option, to convert any or all
outstanding shares (and fractional shares) of Series B-[  ] Preferred Stock
held by such holders into fully paid and non-assessable shares of Common
Stock. At any time and from time to time, each outstanding share of Series B-
[  ] Preferred Stock shall be convertible into a number of shares of Common
Stock equal to the Liquidation Preference of such share of Series B-[  ]
Preferred as of the date of conversion divided by the Applicable Conversion
Price for such share of Series B-[  ] Preferred Stock. Notwithstanding any
call for redemption pursuant to Section 6(a), the right to convert shares so
called for redemption shall terminate at the close of business on the last
Business Day immediately preceding the date fixed for such redemption unless
the Corporation shall default in making payment of the amount payable upon
such redemption.

   (b) (i) In order to exercise the conversion privilege, the holder of the
   shares of Series B-[  ] Preferred Stock to be converted shall surrender the
   certificate representing such shares at the principal executive offices of
   the Corporation, with a written notice of election to convert completed and
   signed, specifying the number of shares to be converted. Unless the shares
   issuable on conversion are to be issued in the same name as the name in
   which such shares of Series B-[  ] Preferred Stock are registered, each
   share surrendered for conversion shall be accompanied by instruments of
   transfer, in form satisfactory to the Corporation, duly executed by the
   holder or the holder's duly authorized attorney, and an amount sufficient
   to pay any transfer or similar tax.

     (ii) As promptly as practicable after the surrender by the holder of the
   certificates for shares of Series B-[  ] Preferred Stock as aforesaid, the
   Corporation shall issue and shall deliver to such holder, or on the
   holder's written order to the holder's transferee, (x) a certificate or
   certificates for the whole number of shares of Common Stock issuable upon
   the conversion of such shares in accordance with the provisions of this
   Section 8, (y) any cash adjustment pursuant to Section 8(f), and (z) in the
   event of a conversion in part, a certificate or certificates for the whole
   number of shares of Series B-[  ] Preferred Stock not being so converted.

     (iii) Each conversion of shares of Series B-[  ] Preferred Stock pursuant
   to Section 8(a) shall be deemed to have been effected immediately prior to
   the close of business on the date on which the certificates for shares of
   Series B-[  ] Preferred Stock shall have been surrendered and such notice
   received by the Corporation as aforesaid, and the Person in whose name or
   names any certificate or certificates for shares of Common Stock shall be
   issuable upon such conversion shall be deemed to have become the holder of
   record of the shares of Common Stock represented thereby at such time on
   such date and such conversion shall be into a number of whole shares of
   Common Stock in respect of the shares of Series B-[  ] Preferred Stock
   being converted as determined in accordance with this Section 8 at such
   time on such date. All shares of Common Stock delivered upon conversion of
   the Series B-[  ] Preferred Stock shall upon delivery be duly and validly
   issued, fully paid and non-assessable and not subject to any preemptive
   rights. Upon the surrender of certificates representing the shares of
   Series B-[  ] Preferred Stock to be converted, the shares to be so
   converted shall no longer be deemed to be outstanding and all

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   rights of a holder with respect to such shares surrendered for conversion
   shall immediately terminate except the right to receive the Common Stock
   and other amounts payable pursuant to this Section 8 and a certificate or
   certificates representing the shares of Series B-[  ] Preferred Stock not
   converted.

   (c) (i) Upon delivery to the Corporation by a holder of shares of Series B-
   [  ] Preferred Stock of a notice of election to convert, the right of the
   Corporation to redeem such shares of Series B-[  ] Preferred Stock shall
   terminate, regardless of whether a notice of redemption has been mailed as
   aforesaid.

     (ii) If a holder of Series B-[  ] Preferred Stock delivers to the
  Corporation a certificate therefor and a notice of election to convert, the
  Series B-[  ] Preferred Stock to be converted shall cease to accrue
  dividends pursuant to Section 4 but shall continue to be entitled to
  receive pro rata dividends for the period from the last Dividend Payment
  Date to the date of delivery of the notice of election to convert in
  preference to and in priority over any dividends on any Junior Securities.

     (iii) Except as provided above and in Section 8(g), the Corporation
  shall make no payment or adjustment for accrued and unpaid dividends on
  shares of Series B-[  ] Preferred Stock, whether or not in arrears, on
  conversion of such shares or for dividends theretofore paid on the shares
  of Common Stock.

   (d) (i) The Corporation covenants that it shall at all times reserve and
   keep available, free from preemptive rights, such number of its authorized
   but unissued shares of Common Stock as shall be required for the purpose of
   effecting conversions of the Series B-[  ] Preferred Stock.

     (ii) Prior to the delivery of any securities which the Corporation shall
  be obligated to deliver upon conversion of the Series B-[  ] Preferred
  Stock, the Corporation shall comply with all applicable federal and state
  laws and regulations which require action to be taken by the Corporation.

   (e) The Corporation shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares
of Common Stock on conversion of the Series B-[  ] Preferred Stock pursuant
hereto; provided that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other than that of the holder of
the Series B-[  ] Preferred Stock to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue or
delivery has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.

   (f) In connection with the conversion of any shares of Series B-[  ]
Preferred Stock, the Corporation, in its sole discretion, may (i) issue
fractions of shares of Common Stock to the holder of such shares of Series
B-[  ] Preferred Stock, or (ii) in lieu thereof pay a cash adjustment in
respect of such fractional interest in an amount equal to such fractional
interest multiplied by the Market Price per share of Common Stock on the
Business Day next preceding the date on which such shares of Series B-[  ]
Preferred Stock are deemed to have been converted.

   (g) Antidilution Provisions. In order to prevent dilution of the conversion
rights granted under this Section 8, the Applicable Conversion Price shall be
subject to adjustment from time to time pursuant to this Section 8(g). In the
event that any adjustment of the Applicable Conversion Price as required
herein results in a fraction of a cent, such Applicable Conversion Price shall
be rounded up to the nearest cent.

     (i) Adjustment of Applicable Conversion Price and Number of Shares Upon
  Issuance of Common Stock. Except as otherwise provided in Sections
  8(g)(iii), 8(g)(iv) and 8(g)(v), if and whenever on or after the Issue Date
  the Corporation issues or sells, or in accordance with Section 8(g)(ii) is
  deemed to have issued or sold, any shares of Common Stock for no
  consideration or for a consideration per share (calculated as set forth in
  Section 8(g)(ii)) less than the then Applicable Conversion Price in effect
  on the date of issuance or sale (or deemed issuance or sale) of such Common
  Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance,
  the Applicable Conversion Price shall be reduced to a price determined by
  multiplying the Applicable Conversion Price in effect immediately prior to
  the Dilutive

                                       8
<PAGE>

  Issuance by a fraction, (A) the numerator of which is an amount equal to
  the sum of (x) the total number of shares of Common Stock Deemed
  Outstanding immediately prior to the Dilutive Issuance, plus (y) the
  quotient of the aggregate consideration, calculated as set forth in Section
  8(g)(ii), received or receivable by the Corporation upon such Dilutive
  Issuance divided by the then Applicable Conversion Price in effect
  immediately prior to the Dilutive Issuance, and (B) the denominator of
  which is the total number of shares of Common Stock Deemed Outstanding
  immediately after the Dilutive Issuance.

    (ii) Effect on Applicable Conversion Price of Certain Events. For
  purposes of determining the adjusted Applicable Conversion Price under
  Section 8(g)(i), the following provisions shall be applicable:

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

       (B) Issuance of Convertible Securities. If the Corporation in any
    manner issues or sells any Convertible Securities, whether or not
    immediately convertible (other than where such Convertible Securities
    are issuable upon the exercise of Options for which an adjustment to
    the Applicable Conversion Price is made pursuant to Section
    8(g)(ii)(A)) and the price per share for which Common Stock is issuable
    upon such conversion or exchange is less than the then Applicable
    Conversion Price in effect on the date of issuance of such Convertible
    Securities, then the maximum total number of shares of Common Stock
    issuable upon the conversion or exchange of all such Convertible
    Securities shall, as of the date of the issuance of such Convertible
    Securities, be deemed to be outstanding and to have been issued and
    sold by the Corporation for such price per share. For the purposes of
    the preceding sentence, the "price per share for which Common Stock is
    issuable upon such conversion or exchange" is determined by dividing
    (i) the total amount, if any, received or receivable by the Corporation
    as consideration for the issuance or sale of all such Convertible
    Securities, plus the minimum aggregate amount of additional
    consideration, if any, payable to the Corporation upon the conversion
    or exchange thereof at the time such Convertible Securities first
    become convertible or exchangeable, by (ii) the maximum total number of
    shares of Common Stock issuable upon the conversion or exchange of all
    such Convertible Securities. No further adjustment to the Applicable
    Conversion Price shall be made upon the actual issuance of such Common
    Stock upon conversion or exchange of such Convertible Securities, and
    if any such issuance or sale of such Convertible Securities is made
    upon exercise of any Options for which adjustments of the Applicable
    Conversion

                                       9
<PAGE>

    Price had been or are to be made pursuant to other provisions of this
    Section 8(g), no further adjustment of the Applicable Conversion Price
    shall be made by reason of such issuance or sale.

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

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

       (E) Calculation of Consideration Received. If any Common Stock,
    Options or Convertible Securities are issued, granted or sold for cash,
    the consideration received therefor for purposes of this Section 8(g)
    shall be the amount received by the Corporation therefor before
    deduction of commissions, underwriting discounts or allowances or other
    expenses paid or incurred by the Corporation in connection with such
    issuance, grant or sale. In case any Common Stock, Options or
    Convertible Securities are issued or sold for a consideration part or
    all of which shall be other than cash, the amount of the consideration
    other than cash received by the Corporation shall be the fair value of
    such consideration. If any Common Stock, Options or Convertible
    Securities are issued in connection with any acquisition, merger or
    consolidation in which the Corporation is the surviving corporation,
    the amount of consideration therefor shall be deemed to be the fair
    value of such portion of the net assets and business of the non-
    surviving entity which is attributable to such Common Stock, Options or
    Convertible Securities, as the case may be. The fair value of any
    consideration other than cash shall be determined in good faith by the
    mutual agreement of the Board of Directors and the holders of a
    majority of the outstanding Series B Preferred Stock. If the Board of
    Directors and the holders of a majority of the outstanding Series B
    Preferred Stock are unable to reach such agreement within a reasonable
    period, the fair value of such consideration shall be determined by an
    independent investment bank or a "Big Five" independent public
    accounting firm, in either case of nationally recognized standing in
    the valuation of businesses similar to the business of the Corporation,
    which shall be mutually acceptable to the Corporation and such holders.
    The determination of such investment bank or public accounting firm
    shall be final and binding upon the Corporation and the holders of the
    Series B Preferred Stock.

       (F) Exceptions to Adjustment of Applicable Conversion Price. No
    adjustment to the Applicable Conversion Price shall be made (i) upon
    the grant or conversion or exercise of any Options or Convertible
    Securities issued and outstanding, or committed to be issued, as of the
    Issue Date, or issuable pursuant to the Investment Agreement
    (including, without limitation, the Warrants, the Series A Preferred
    Stock, the Series B Preferred Stock, the Convertible Notes and any
    Options or Convertible Securities issued and outstanding, or committed
    to be issued, as of the Issue Date under the Benefit Plans or
    otherwise); (ii) upon the grant or conversion or exercise of any
    Capital Stock, Options or Convertible Securities which may be issued or
    granted after the Issue Date

                                       10
<PAGE>

    under any stock option, stock incentive or other employee benefit plan
    of the Corporation or any subsidiary thereof in effect as of the Issue
    Date (including, without limitation, the Benefit Plans) or which
    becomes effective after the Issue Date, so long as such stock option,
    stock incentive or other employee benefit plan is approved by the Board
    of Directors (including the director designees, if any, of the holders
    of the Series B Preferred Stock); (iii) upon the issuance and exercise
    of the Warrants; (iv) upon the issuance, conversion or redemption of
    shares of Series B Preferred Stock in accordance with the Series B
    Certificates of Designation; or (v) upon any dividend or distribution
    on the Series B Preferred Stock in accordance with the Series B
    Certificates of Designation.

     (iii) Distribution of Assets. If the Corporation shall declare or make
  any distribution of its assets (including cash) to holders of Common Stock
  as a partial liquidating dividend, by way of return of capital or
  otherwise, then, after the date of record for determining stockholders
  entitled to such distribution, but prior to the date of such distribution,
  the holders of the Series B-[  ] Preferred Stock shall be entitled to
  receive the amount of such assets which, if the Series B-[  ] Preferred
  Stock had been converted into shares of Common Stock immediately prior to
  such time, would have been payable to the holder of such shares of Common
  Stock on the record date for the determination of stockholders entitled to
  such distribution. Notwithstanding anything in this Certificate of
  Designation, no adjustment in the Applicable Conversion Price shall be made
  under Section 8(g)(ii) to the extent the holders of Series B-[  ] Preferred
  Stock participate in any such distribution of assets in accordance with
  this Section 8(g)(iii) and Section 4(g).

     (iv) Subdivision or Combination of Common Stock. If the Corporation at
  any time subdivides (by any stock split, stock dividend, recapitalization,
  reorganization, reclassification or otherwise) the shares of Common Stock
  acquirable hereunder into a greater number of shares, then, after the date
  of record for effecting such subdivision, the Applicable Conversion Price
  in effect immediately prior to such subdivision shall be proportionately
  reduced. If the Corporation at any time combines (by reverse stock split,
  recapitalization, reorganization, reclassification or otherwise) the shares
  of Common Stock acquirable hereunder into a smaller number of shares, then,
  after the date of record for effecting such combination, the Applicable
  Conversion Price in effect immediately prior to such combination shall be
  proportionately increased.

     (v) Consolidation, Merger or Sale. In case of any consolidation of the
  Corporation with, or merger of the Corporation into, any other corporation,
  or in case of any sale or conveyance of all or substantially all of the
  assets of the Corporation other than in connection with a plan of complete
  liquidation of the Corporation, then as a condition of such consolidation,
  merger, sale or conveyance, adequate provision shall be made whereby each
  holder of the Series B-[  ] Preferred Stock shall have the right to acquire
  and receive upon conversion of such Series B-[  ] Preferred Stock in lieu
  of or in addition to (as the case may be) the shares of Common Stock
  immediately theretofore acquirable upon the conversion of such Series B-
  [  ] Preferred Stock, such shares of capital stock, securities or assets as
  may be issued or payable with respect to or in exchange for the number of
  shares of Common Stock immediately theretofore acquirable and receivable
  upon conversion of such Series B-[  ] Preferred Stock if such
  consolidation, merger, sale or conveyance had not taken place.

     (vi) Notice of Adjustment. Within 20 Business Days after the occurrence
  of any event which requires any adjustment of the Applicable Conversion
  Price, the Corporation shall give written notice thereof to the holders of
  Series B-[  ] Preferred Stock. Such notice shall state the Applicable
  Conversion Price resulting from such adjustment and shall set forth in
  reasonable detail the method of calculation and the facts upon which such
  calculation is based. Such calculation shall be certified by the chief
  financial officer of the Corporation.

     (vii) Minimum Adjustment of Applicable Conversion Price. No adjustment
  of the Applicable Conversion Price shall be made in an amount of less than
  1% of the Applicable Conversion Price in effect at the time such adjustment
  is otherwise required to be made, but any such lesser adjustment shall be

                                       11
<PAGE>

  carried forward and shall be made at the time and together with the next
  subsequent adjustment which, together with any adjustments so carried
  forward, shall amount to not less than 1% of such Applicable Conversion
  Price.

   9. Voting Rights.

   (a) The holders of record of shares of Series B-[  ] Preferred Stock shall
be entitled to vote on an as-converted basis (calculated in accordance with
Section 8(a) as of the close of trading on the record date for such vote) with
the holders of the Common Stock and each other series of Series B Preferred
Stock as a single class on all matters presented to the holders of the Common
Stock for vote, except in each case (i) as hereinafter provided in Section 9,
(ii) as otherwise and to the extent provided by law, or (iii) as otherwise and
to the extent provided by applicable rules, regulations and interpretations of
the National Association of Securities Dealers, Inc. or Nasdaq, as determined
by the Board of Directors. No share of any Series B-[  ] Preferred Stock shall
have greater as-converted voting rights than any other share of Series B-[  ]
Preferred Stock. So long as the provisions of Section 9(b) or 9(c) of the
Series B Certificates of Designation entitle any holder of the Series B
Preferred Stock to designate for nomination a director or directors of the
Corporation, the holders of the Series B Preferred Stock shall have the
exclusive right, voting together as a single class either at a meeting of
stockholders or by written consent, to vote with respect to such designee or
designees to the Board of Directors.

   (b) Effective as of the Initial Issue Date, any holder of record of at least
50,000 shares of Series B Preferred Stock shall be entitled to designate for
nomination for election, and the holders of the Series B Preferred Stock,
voting together as a single class, shall be entitled to elect, one director to
the Board of Directors in accordance with Section 9 of the Series B
Certificates of Designation. Effective as of the Initial Issue Date, any holder
of record of at least 100,000 shares of Series B Preferred Stock shall be
entitled to designate for nomination for election, and the holders of the
Series B Preferred Stock, voting together as a single class, shall be entitled
to elect, two directors to the Board of Directors in accordance with Section 9
of the Series B Certificates of Designation. At such time as any holder of
Series B Preferred Stock owns of record more than 50,000 shares or 100,000
shares of Series B Preferred Stock and such holder of record notifies the
Corporation in writing that it wishes to designate for nomination for election
one or two directors, as applicable, the Board of Directors shall cause the
total number of directors then constituting the whole Board of Directors to be
increased by one director or two directors, as the case may be. Notwithstanding
the preceding sentence, for so long as a holder of Series B Preferred Stock
that is otherwise entitled to nominate a director pursuant to Section 9(b) of
the Series B Certificates of Designation has an Affiliate who is serving on the
Board of Directors and who has not been designated pursuant to Section 9 of the
Series B Certificates of Designation, such holder shall not be entitled to
designate for nomination, nor shall the holders of the Series B Preferred
Stock, voting together as a single class, be entitled to elect, an additional
director or directors to the Board of Directors. Notwithstanding anything in
Section 9(b) of the Series B Certificates of Designation to the contrary, (i)
effective as of the date on which a holder's record ownership of the Series B
Preferred Stock shall be reduced to a number of outstanding shares (calculated
without giving effect to any Preferred Dividends paid to such holder in shares
of Series B Preferred Stock pursuant to Section 4(d) of the Series B
Certificates of Designation) which is less than 100,000 shares but more than
50,000 shares, such holder shall be entitled to designate for nomination only
one director for election to the Board of Directors, and the holders of the
outstanding shares of Series B Preferred Stock shall have the exclusive right
to vote, together as a single class, for the election of only one director to
the Board of Directors, and the directorship of the latter of the two directors
shall immediately terminate, and (ii) effective as of the date on which a
holder's record ownership of the Series B Preferred Stock is reduced to less
than 50,000 outstanding shares (calculated without giving effect to any
Preferred Dividends paid to such holder in shares of Series B Preferred Stock
pursuant to Section 4(d) of the Series B Certificates of Designation), the
entitlement of such holder to designate for nomination one director for
election to the Board of Directors, and the exclusive right of the holders of
the outstanding shares of Series B Preferred Stock to vote, together as a
single class, for the election of a director to the Board of Directors shall
cease, and such directorship shall immediately terminate. Directors elected by
the holders of the Series B Preferred Stock shall not serve a classified term
with the directors elected by the holders of Common

                                       12
<PAGE>

Stock together with the holders of any other class or series of capital stock
entitled to vote thereon. In no event shall the holders of Series B Preferred
Stock be entitled to elect more than two directors to the Board of Directors
pursuant to Section 9(b) of the Series B Certificates of Designation. If more
than two holders of Series B Preferred Stock would, but for the provisions of
Section 9(b) of the Series B Certificates of Designation, be entitled to
nominate for election more than two directors to the Board of Directors
pursuant to Section 9(b) of the Series B Certificates of Designation, such
holders shall mutually agree on the nomination for election of two such
directors.

   (c) Any director elected by the holders of Series B Preferred Stock who
serves as a member of the Board of Directors may be removed without cause only
by the holders of a majority of the outstanding shares of Series B Preferred
Stock. If a vacancy is created on the Board of Directors by reason of the
death, removal or resignation of any director elected by the holders of the
Series B Preferred Stock, the holder of the Series B Preferred Stock who
designated for nomination for election such director shall be entitled to
designate for nomination for election, and the holders of the Series B
Preferred Stock, voting together as a single class, may elect a replacement
director to the Board of Directors.

   (d) Without the written consent of holders of a majority of the outstanding
shares of Series B-[  ] Preferred Stock or the affirmative vote of holders of a
majority of the outstanding shares of Series B-[  ] Preferred Stock at a
meeting of the holders of Series B-[  ] Preferred Stock called for such
purpose, the Corporation shall not amend, alter or repeal any provision of the
Certificate of Incorporation or this Certificate of Designation so as to affect
adversely the preferences, rights or powers of the Series B-[  ] Preferred
Stock; provided that any such amendment that changes any dividend or other
amount payable on or the liquidation preference of the Series B-[  ] Preferred
Stock shall require the written consent of holders of two-thirds of the
outstanding shares of Series B-[  ] Preferred Stock or the affirmative vote of
holders of two-thirds of the outstanding shares of Series B-[  ] Preferred
Stock at a meeting of the holders of Series B-[  ] Preferred Stock called for
such purpose. Without the written consent of holders of a majority of the
outstanding shares of Series B Preferred Stock or the affirmative vote of
holders of a majority of the outstanding shares of Series B Preferred Stock at
a meeting of the holders of Series B Preferred Stock called for such purpose,
the Corporation shall not authorize the issuance of or issue any Parity
Securities (other than any series of Series B Preferred Stock as contemplated
in the Series B Certificates of Designation or in the Investment Agreement) or
Senior Securities.

   (e) In any transaction in which the Series B Preferred Stock shall remain
outstanding or be converted into capital stock of any entity other than the
Corporation, the Corporation may, without the consent of the holders of the
Series B Preferred Stock, consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets as an entirety to, any
Person, provided that the successor, transferee or lessee (if not the
Corporation) is organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and the Series B
Preferred Stock shall be converted into or exchanged for and shall become
shares of, or interests in, such successor, transferee or lessee, having in
respect of such successor, transferee or lessee substantially the same powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions thereof, that the Series B
Preferred Stock has immediately prior to such transaction. In the event of any
consolidation or merger or conveyance, transfer or lease of all or
substantially all of the assets of the Corporation that is permitted pursuant
to this Section 9(e), the successor resulting from such consolidation or into
which the Corporation is merged or the transferee or lessee to which such
conveyance, transfer or lease is made, shall succeed to, and be substituted
for, and may exercise every right and power of, the Corporation with respect to
the Series B Preferred Stock (or the shares or interests into, or for which,
the Series B Preferred Stock is converted or exchanged), and thereafter, except
in the case of a lease, the predecessor (if still in existence) shall be
released from its obligations and covenants with respect to the Series B
Preferred Stock. Any consent required pursuant to this Section 9(e) shall be
given by written consent of holders of a majority of the outstanding shares of
Series B Preferred Stock or the affirmative vote of holders of a majority of
the outstanding shares of Series B Preferred Stock at a meeting of the holders
of Series B Preferred Stock called for such purpose.

                                       13
<PAGE>

   (f) In exercising the voting rights set forth in this Section 9, each share
of Series B-[  ] Preferred Stock shall have one vote per share except as
otherwise expressly provided for herein. Except as otherwise required by
applicable law or as set forth herein, the shares of Series B-[  ] Preferred
Stock shall not have any relative, participating, optional or other special
voting rights and powers, and the consent of the holders of the Series B-[  ]
Preferred Stock shall not be required for the taking of any corporate action.

   10. Headings. The headings of the sections, paragraphs, subparagraphs,
clauses and subclauses of this Certificate of Designation are for convenience
of reference only and shall not define, limit or affect any of the provisions
hereof.

   IN WITNESS WHEREOF, said ITC/\DeltaCom, Inc. has caused this Certificate of
Designation to be signed by            , its duly authorized          , this
    day of          , 200  .

                                          ITC/\DELTACOM, INC.

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

                                       14<PAGE>

                                                                    EXHIBIT 10.3

     THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
     EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
     STATE SECURITIES LAWS. EXCEPT AS OTHERWISE SET FORTH HEREIN OR
     IN THE INVESTMENT AGREEMENT, DATED AS OF FEBRUARY 27, 2001
     (THE "INVESTMENT AGREEMENT"), AMONG THE CORPORATION AND THE
     PURCHASERS PARTY THERETO, NEITHER THIS WARRANT NOR ANY OF SUCH
     SHARES MAY BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, OR
     OTHERWISE DISPOSED OF (A) IN THE ABSENCE OF AN EFFECTIVE
     REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR
     SUCH LAWS OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND
     SCOPE REASONABLY ACCEPTABLE TO THE CORPORATION, THAT
     REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH LAWS, OR
     UNLESS SOLD PURSUANT TO RULE 144 UNDER THE ACT OR SUCH LAWS
     AND (B) IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH HEREIN
     AND SET FORTH IN THE INVESTMENT AGREEMENT. A COPY OF THE
     INVESTMENT AGREEMENT IS AVAILABLE UPON REQUEST TO THE
     SECRETARY OF THE CORPORATION FOR INSPECTION AT THE OFFICES OF
     THE CORPORATION.

     THIS WARRANT WAS INITIALLY ISSUED AS PART OF AN ISSUANCE OF
              SHARES OF SERIES B-    CUMULATIVE CONVERTIBLE
     PREFERRED STOCK, PAR VALUE $.01 PER SHARE (THE "SERIES B
     PREFERRED STOCK"), OF ITC/\DELTACOM, INC. AND WARRANTS
     INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE
                  SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE,
     OF ITC/\DELTACOM, INC. PRIOR TO THE CLOSE OF BUSINESS ON
                 . THIS WARRANT MAY NOT BE TRANSFERRED SEPARATELY
     FROM, BUT MAY BE TRANSFERRED ONLY TOGETHER WITH, SUCH SERIES B
     PREFERRED STOCK.

                               ITC/\DELTACOM, INC.
                         COMMON STOCK PURCHASE WARRANT

   THIS CERTIFIES THAT, for value received,                        , a
corporation, or its permitted assigns, is entitled to purchase from
ITC/\DeltaCom, Inc., a Delaware corporation (the "Corporation"), at any time or
from time to time as prescribed herein during the period specified in Section
2,                                 (         ) fully paid and non-assessable
shares of the Common Stock, par value $.01 per share, of the Corporation (the
"Common Stock"), at an exercise price of $                   per share (the
"Exercise Price"). The term "Warrant Shares" as used herein refers to the
shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Section 4. The term
"Warrants" as used herein means this Warrant and the other warrants issued
pursuant to the Investment Agreement, dated as of February 27, 2001, between
the Corporation and ITC Holding Company, Inc. (the "Investment Agreement").

   This Warrant is subject to the following terms, provisions and conditions.

   1. Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject
to the provisions hereof, this Warrant may be exercised by the holder hereof,
in whole of in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Corporation during normal business hours on any Business
Day at the Corporation's principal executive offices

                                       1
<PAGE>

(or such other office or agency of the Corporation as it may designate by
notice to the holder hereof), and upon (i) payment to the Corporation in cash,
by certified or official bank check or by wire transfer for the account of the
Corporation, of the Exercise Price for the Warrant Shares specified in the
Exercise Agreement or (ii) delivery to the Corporation of a written notice of
an election to effect a "Cashless Exercise" (as defined in Section 12(c)) for
the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of business on
the date on which this Warrant shall have been surrendered, the completed
Exercise Agreement shall have been delivered, and payment shall have been made
for such shares (or an election to effect a Cashless Exercise has been made)
as set forth above. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise
Agreement, shall be delivered to the holder hereof within a reasonable time,
not exceeding 10 Business Days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may
be requested by the holder hereof and shall be registered in the name of such
holder or such other name as shall be designated by such holder. If this
Warrant shall have been exercised only in part, then, unless this Warrant has
expired, the Corporation shall, at its expense, at the time of delivery of
such certificates, deliver to the holder a new Warrant representing the number
of shares with respect to which this Warrant shall not then have been
exercised.

   2. Period of Exercise; Vesting. Subject to the terms and conditions herein,
this Warrant is exercisable at any time or from time to time on or after the
date on which this Warrant is issued and delivered pursuant to the Investment
Agreement and before 5:00 p.m., New York City time, on the seventh (7th)
anniversary of such date (the "Exercise Period").

   3. Certain Agreements of the Corporation. The Corporation hereby covenants
and agrees as follows:

     (a) Shares to be Fully Paid. All Warrant Shares shall, upon issuance in
accordance with the terms of this Warrant, be duly and validly issued, fully
paid and non-assessable and not subject to the preemptive or other similar
rights of the stockholders of the Corporation.

     (b) Reservation of Shares. During the Exercise Period, the Corporation at
all times shall have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

     (c) Listing. The Corporation shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance
upon exercise of this Warrant, if applicable) and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all
shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Corporation shall so list on each national securities
exchange or automated quotation system, as the case may be, and shall maintain
such listing of, any other shares of capital stock of the Corporation issuable
upon the exercise of this Warrant if and so long as any shares of the same
class shall be listed on such national securities exchange or automated
quotation system.

     (d) Successors and Assigns. This Warrant shall be binding upon any entity
succeeding to the Corporation by merger, consolidation, or acquisition of all
or substantially all the Corporation's assets.

   4. Antidilution Provisions. During the Exercise Period, the Exercise Price
and the number of Warrant Shares shall be subject to adjustment from time to
time as provided in this Section 4. In the event that any adjustment of the
Exercise Price as required herein results in a fraction of a cent, such
Exercise Price shall be rounded up to the nearest cent.

     (a) Adjustment of Exercise Price and Number of Shares Upon Issuance of
Common Stock. Except as otherwise provided in Sections 4(c), 4(d) and 4(e), if
and whenever on or after the Issue Date the Corporation issues or sells, or in
accordance with Section 4(b) is deemed to have issued or sold, any shares of

                                       2
<PAGE>

Common Stock for no consideration or for a consideration per share (calculated
as set forth in Section 4(b)) less than the then applicable Exercise Price in
effect on the date of issuance or sale (or deemed issuance or sale) of such
Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Exercise Price shall be reduced to a price determined by
multiplying the Exercise Price in effect immediately prior to the Dilutive
Issuance by a fraction, (i) the numerator of which is an amount equal to the
sum of (x) the total number of shares of Common Stock Deemed Outstanding
immediately prior to the Dilutive Issuance, plus (y) the quotient of the
aggregate consideration, calculated as set forth in Section 4(b), received or
receivable by the Corporation upon such Dilutive Issuance divided by the then
applicable Exercise Price in effect immediately prior to the Dilutive Issuance,
and (ii) the denominator of which is the total number of shares of Common Stock
Deemed Outstanding immediately after the Dilutive Issuance.

     (b) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 4(a), the following
provisions shall be applicable:

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

       (ii) Issuance of Convertible Securities. If the Corporation in any
  manner issues or sells any Convertible Securities, whether or not
  immediately convertible (other than where such Convertible Securities are
  issuable upon the exercise of Options for which adjustment to the
  applicable Exercise Price is made pursuant to Section 4(b)(i)) and the
  price per share for which Common Stock is issuable upon such conversion or
  exchange is less than the then applicable Exercise Price in effect on the
  date of issuance of such Convertible Securities, then the maximum total
  number of shares of Common Stock issuable upon the conversion or exchange
  of all such Convertible Securities shall, as of the date of the issuance of
  such Convertible Securities, be deemed to be outstanding and to have been
  issued and sold by the Corporation for such price per share. For the
  purposes of the preceding sentence, the "price per share for which Common
  Stock is issuable upon such conversion or exchange" is determined by
  dividing (x) the total amount, if any, received or receivable by the
  Corporation as consideration for the issuance or sale of all such
  Convertible Securities, plus the minimum aggregate amount of additional
  consideration, if any, payable to the Corporation upon the conversion or
  exchange thereof at the time such Convertible Securities first become
  convertible or exchangeable, by (y) the maximum total number of shares of
  Common Stock issuable upon the conversion or exchange of all such
  Convertible Securities. No further adjustment to the Exercise Price shall
  be made upon the actual issuance of such Common Stock upon conversion or
  exchange of such Convertible Securities, and if any such issuance or sale
  of such Convertible Securities is made upon exercise of any Options for
  which adjustments of the Conversion

                                       3
<PAGE>

  Price had been or are to be made pursuant to other provisions of this
  Section 4(b), no further adjustment of the Exercise Price shall be made by
  reason of such issuance or sale.

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

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

       (v) Calculation of Consideration Received. If any Common Stock,
  Options or Convertible Securities are issued, granted or sold for cash, the
  consideration received therefor for purposes of this Warrant shall be the
  amount received by the Corporation therefor before deduction of
  commissions, underwriting discounts or allowances or other expenses paid or
  incurred by the Corporation in connection with such issuance, grant or
  sale. If any Common Stock, Options or Convertible Securities are issued or
  sold for a consideration part or all of which shall be other than cash, the
  amount of the consideration other than cash received by the Corporation
  shall be the fair value of such consideration. If any Common Stock, Options
  or Convertible Securities are issued in connection with any acquisition,
  merger or consolidation in which the Corporation is the surviving
  corporation, the amount of consideration therefor shall be deemed to be the
  fair value of such portion of the net assets and business of the non-
  surviving entity which is attributable to such Common Stock, Options or
  Convertible Securities, as the case may be. The fair value of any
  consideration other than cash shall be determined in good faith by the
  mutual agreement of the Board of Directors and a majority-in-interest of
  the holders of the outstanding Warrants. If the Board of Directors and the
  holders of a majority-in-interest of the outstanding Warrants are unable to
  reach such agreement within a reasonable period, the fair value of such
  consideration shall be determined by an independent investment bank or a
  "Big Five" independent public accounting firm, in either case of nationally
  recognized standing in the valuation of businesses similar to the business
  of the Corporation, which shall be mutually acceptable to the Corporation
  and such holders. The determination of such investment bank or public
  accounting firm shall be final and binding upon the Corporation and the
  holders of the Warrants.

       (vi) Exceptions to Adjustment of Exercise Price. No adjustment to the
  Exercise Price shall be made (i) upon the grant or conversion or exercise
  of any Options or Convertible Securities issued and outstanding, or
  committed to be issued, as of the Issue Date, or issuable pursuant to the
  Investment Agreement (including, without limitation, the Series A Preferred
  Stock, the Series B Preferred Stock, the Warrants and the Convertible Notes
  and any Options or Convertible Securities issued and outstanding, or
  committed to be issued, as of the Issue Date under the Benefit Plans or
  otherwise); (ii) upon the grant or conversion or exercise of any Capital
  Stock, Options or Convertible Securities which may be issued or granted
  after the Issue Date under any stock option, stock incentive or other
  employee benefit plan of the Corporation or any subsidiary thereof in
  effect as of the Issue Date (including, without limitation, the Benefit
  Plans) or which becomes effective after the Issue Date, so long as such
  stock option, stock incentive or other employee benefit plan is approved by
  the Board of Directors (including the director designees, if any, of the
  holders of the Series B Preferred Stock); (iii) upon the issuance and

                                       4
<PAGE>

  exercise of the Warrants; (iv) upon the issuance, conversion or redemption
  of shares of Series B Preferred Stock in accordance with the Series B
  Certificates of Designation; or (v) upon any dividend or distribution on
  the Series B Preferred Stock in accordance with the Series B Certificates
  of Designation.

     (c) Distribution of Assets. In case the Corporation shall declare or make
any distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, the holder of this Warrant shall be entitled, upon exercise of
this Warrant for the purchase of any or all of the shares of Common Stock
subject hereto, to receive the amount of such assets which would have been
payable to the holder if such holder had been the holder of such shares of
Common Stock on the record date for the determination of stockholders entitled
to such distribution.

     (d) Subdivision or Combination of Common Stock. If the Corporation at any
time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately reduced. If the Corporation
at any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.

     (e) Consolidation, Merger or Sale. In case of any consolidation of the
Corporation with, or merger of the Corporation into any other corporation, or
in case of any sale or conveyance of all or substantially all of the assets of
the Corporation other than in connection with a plan of complete liquidation of
the Corporation, then as a condition of such consolidation, merger, sale or
conveyance, adequate provision shall be made whereby the holder of this Warrant
shall have the right to acquire and receive upon exercise of this Warrant in
lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable upon the exercise of this Warrant, such
shares of capital stock, securities or assets as may be issued or payable with
respect to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of this Warrant if such
consolidation, merger, sale or conveyance had not taken place. In any such
case, the Corporation shall make appropriate provision to insure that the
provisions of this Section 4 shall thereafter be applicable as nearly as may be
in relation to any shares of capital stock or securities thereafter deliverable
upon the exercise of this Warrant.

     (f) Adjustment in Number of Shares. Upon each change of the Exercise Price
pursuant to the provisions of this Section 4, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted by multiplying
such number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such change by a fraction, the numerator of which is the
Exercise Price immediately before such change and the denominator of which is
the Exercise Price immediately after such changes.

     (g) Notice of Adjustment. Within 20 Business Days after the occurrence of
any event which requires any adjustment of the Exercise Price, the Corporation
shall give written notice thereof to the holder of this Warrant. Such notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, and shall set forth in reasonable detail the method of calculation
and the facts upon which such calculation is based. Such calculation shall be
certified by the chief financial officer of the Corporation.

     (h) Minimum Adjustment of Exercise Price. No adjustment of the Exercise
Price shall be made in an amount of less than 1% of the Exercise Price in
effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

                                       5
<PAGE>

     (i) No Fractional Shares. No fractional shares of Common Stock shall be
issued upon the exercise of this Warrant. If the exercise of this Warrant would
result in a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable upon exercise of
this Warrant shall be rounded up to the next higher number of shares.

     (j) Other Notices. In case at any time:

       (i) the Corporation shall declare any dividend upon the Common Stock
  payable in shares of stock of any class or make any other distribution
  (including dividends or distributions payable in cash out of retained
  earnings) to the holders of the Common Stock;

       (ii) the Corporation shall offer for subscription pro rata to the
  holders of the Common Stock any additional shares of stock of any class or
  other rights;

       (iii) there shall be any capital reorganization of the Corporation, or
  reclassification of the Common Stock, or consolidation or merger of the
  Corporation with or into, or sale of all or substantially all of the
  Corporation's assets to another corporation or entity; or

       (iv) there shall be a voluntary or involuntary dissolution,
  liquidation or winding up of the Corporation;

  then, in each such case, the Corporation shall give to the holder of this
  Warrant notice of the date on which the books of the Corporation shall
  close or a record shall be taken for determining the holders of Common
  Stock entitled to receive any such dividend, distribution or subscription
  rights or for determining the holders of Common Stock entitled to vote in
  respect of any such reorganization, reclassification, merger, sale,
  dissolution, liquidation or winding-up. Such notice shall also specify the
  date on which the holders of Common Stock shall be entitled to receive such
  dividend, distribution or subscription rights or to exchange their Common
  Stock for stock or other securities or property deliverable upon such
  reorganization, reclassification, consolidation, merger, sale, dissolution,
  liquidation or winding-up, as the case may be. Such notice shall be given
  at least 20 calendar days prior to the record date or the date on which the
  Corporation's books are closed in respect thereto. Failure to give any such
  notice or any defect therein shall not affect the validity of the
  proceedings referred to in clauses (i), (ii), (iii) and (iv) above.

   5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such Warrant Shares for any issuance tax or other costs in respect
thereof, provided that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than the holder of this Warrant.

   6. No Rights or Liabilities as a Stockholder. This Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Corporation. No provision of this Warrant, in the absence of affirmative action
by the holder hereof to purchase Warrant Shares, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a stockholder of the
Corporation, whether such liability is asserted by the Corporation or by
creditors of the Corporation.

   7. Transfer, Exchange, and Replacement of Warrant; Issuance of Warrant
Shares.

     (a) Restriction on Transfer. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Corporation referred to in Section 7(e),
provided, however, that any transfer or assignment shall be subject to the
conditions set forth in Sections 7(f) and 7(g), to the restrictions on transfer
set forth in Article V and Section 3.5 of the Investment Agreement, and to the
other applicable provisions of the Investment Agreement. Until due presentment
for registration of transfer on the

                                       6
<PAGE>

books of the Corporation, the Corporation may treat the registered holder
hereof as the owner and holder hereof for all purposes, and the Corporation
shall not be affected by any notice to the contrary. Notwithstanding anything
to the contrary contained herein, the registration rights described in Section
8 are assignable only in accordance with the provisions of the Registration
Rights Agreement, dated as of         , 2001, by and among the Corporation and
the Holders party thereto (the "Registration Rights Agreement").

     (b) Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Corporation referred to in Section 7(e), for new Warrants of like
tenor representing in the aggregate the right to purchase the number of shares
of Common Stock which may be purchased hereunder. Each such new Warrant shall
represent the right to purchase such number of shares of Common Stock as shall
be designated by the holder hereof at the time of such surrender.

     (c) Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Corporation, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Corporation, at its expense, shall execute
and deliver, in lieu thereof, a new Warrant of like tenor.

     (d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant
in connection with any transfer, exchange or replacement as provided in this
Section 7, this Warrant shall be promptly canceled by the Corporation. The
Corporation shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 7.

     (e) Register. The Corporation shall maintain, at its principal executive
offices (or such other office or agency of the Corporation as it may designated
by notice to the holder hereof), a register for this Warrant, in which the
Corporation shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.

     (f) Exercise or Transfer Without Registration. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder) shall not be registered under the Securities Act of
1933, as amended (the "Securities Act"), and under applicable state securities
or blue sky laws, the Corporation may require, as a condition of allowing such
exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Corporation a written opinion of
counsel, which opinion and counsel are reasonably acceptable to the
Corporation, to the effect that such exercise, transfer or exchange may be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Corporation an investment letter in form and substance
acceptable to the Corporation and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The holder of this Warrant, by taking and holding this Warrant,
represents to the Corporation that such holder is acquiring this Warrant for
investment and not with a present view to the distribution thereof (it being
understood that except as otherwise provided in this Warrant, such holder does
not agree to hold the Warrant for any minimum or other specific term and
reserves the right to dispose of the Warrant at any time in accordance with the
Securities Act and state securities laws applicable to such disposition).

     (g) Restrictive Legend. The certificates representing the Warrant Shares
shall bear such restrictive legends as are provided for in the Investment
Agreement.

   8. Registration Rights. The initial holder of this Warrant and certain
transferees of such holder are entitled to the benefits of such registration
rights in respect of this Warrant and the Warrant Shares as are set forth in
the Registration Rights Agreement.

                                       7
<PAGE>

   9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Corporation, or at such other address as shall have been
furnished to the Corporation by notice from such holder. All notices,
requires, and other communications required or permitted to be given or
delivered hereunder to the Corporation shall be in writing, and shall be
personally delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed, to the
office of the Corporation at ITC/\DeltaCom, Inc., 4092 South Memorial Parkway,
Huntsville, AL 35802, Attention: General Counsel, or at such other address as
shall have been furnished to the holder of this Warrant by notice from the
Corporation. Any such notice, request, or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address
of such person for purposes of this Section 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with
the United States Post Office or such overnight mail courier, if postage is
prepaid and the mailing is properly addressed, as the case may be.

   10. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS).

   11. Definitions. Unless the context otherwise requires, when used herein
the following terms shall have the meaning indicated.

     "Benefit Plans" means the ITC/\DeltaCom, Inc. 1997 Stock Option Plan, the
ITC/\DeltaCom, Inc. Director Stock Option Plan, the ITC Holding Company, Inc.
Amended and Restated Stock Option Plan, the ITC Holding Company, Inc.
NonEmployee Director Stock Option Plan and the ITC/\DeltaCom, Inc. Employee
Profit Sharing & 401(k) Plan.

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

     "Business Day" means any day except Saturday, Sunday and any legal
holiday or a day on which banking institutions in New York City, New York or
the State of Georgia generally are authorized or required by law or other
governmental actions to close.

     "Common Stock" means the Common Stock and any additional class of stock
of the Corporation having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant
shall include only shares of Common Stock in respect of which this Warrant is
exercisable, or shares resulting from any subdivision or combination of such
Common Sock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Section 4(e),
the stock or other securities or property provided for in Section 4(e).

     "Common Stock Deemed Outstanding" means the number of shares of Common
Stock actually outstanding, plus the maximum total number of shares of Common
Stock issuable upon the exercise of any then outstanding Warrants or issuable
upon conversion of any then outstanding Series A Preferred Stock or Series B
Preferred Stock, whether or not such Warrants, Series A Preferred Stock or
Series B Preferred Stock are actually exercisable, convertible or exchangeable
at such time, without duplication.

     "Convertible Notes" means the 4% Convertible Subordinated Notes due 2008
of the Corporation.

     "Current Market Price" means the average of the daily Market Prices of
the Common Stock for the 20 consecutive trading days immediately preceding the
date for which such value is to be computed.

                                       8
<PAGE>

     "Issue Date" means         , 200  . [the date of issuance and sale of this
warrant].

     "Market Price" means, with respect to the Common Stock, on any given day,
(i) the price of the last trade, as reported on the Nasdaq National Market, not
identified as having been reported late to such system, or (ii) if the Common
Stock is so traded, but not so quoted, the average of the last bid and ask
prices, as those prices are reported on the Nasdaq National Market, or (iii) if
the Common Stock is not listed or authorized for trading on the Nasdaq National
Market or any comparable system, the average of the closing bid and ask prices
as furnished by two members of the National Association of Securities Dealers,
Inc. selected from time to time in good faith by the Board of Directors for
that purpose. If the Common Stock is not listed and traded in a manner that the
quotations referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be the fair value
per share of such security as determined in good faith by the Board of
Directors.

     "Person" means any corporation, limited liability company, partnership,
trust, organization, association, other entity or individual.

     "Series A Preferred Stock" means the Series A Convertible Preferred Stock,
par value $.01 per share, of the Corporation.

     "Series B Certificates of Designation" means, collectively, the
certificates of designation with respect to the various series of the Series B
Preferred Stock.

     "Series B Preferred Stock" means, collectively, each series of preferred
stock, par value $.01 per share, of the Corporation designated by the Board of
Directors as "Series B-   Cumulative Convertible Preferred Stock" which is
issued pursuant to the Investment Agreement.

   12. Miscellaneous.

     (a) Amendments; Waivers. Except as provided in the last sentence of this
Section 12(a), the provisions of this Warrant, including the provisions of this
sentence, may not be amended, modified, or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
Corporation has obtained the written consent of the Requisite Warrant Holders
(as defined below). Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of this Warrant and that does not directly or
indirectly affect the rights of other holders of the Warrants may be given by
the holder hereof; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. Each holder of the Warrants outstanding at
the time of any such amendment, modification, supplement, waiver or consent or
thereafter shall be bound by any such amendment, modification, supplement,
waiver or consent effected pursuant to this Section 12(a), whether or not any
notice, writing or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Warrant or is delivered to such holder.
"Requisite Warrant Holders" means, as of the date of determination, the holders
of Warrants representing a majority of the aggregate value of then outstanding
Warrants, where the value of each Warrant shall be equal to the product of the
Exercise Price of such Warrant and the Warrant Shares purchasable under such
Warrant as of such date of determination. The Corporation may amend or
supplement this Warrant without the consent of the holder of this Warrant to
(i) cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error contained in this Warrant or
(ii) provide for a financial or other qualified institution to act as warrant
agent on behalf of the Corporation to register the transfer of Warrants and to
assume and discharge such other duties as shall be customary for warrant agents
with respect to warrants registered under the Securities Act; provided, that
any amendment or supplement referred to in clause (i) or (ii) above does not,
and shall not, in the good faith opinion of the Board of Directors, adversely
affect, alter or change the rights, privileges or immunities of the holders of
Warrants; and provided, further, that the Corporation shall provide each
affected holder of Warrants with written notice of each such amendment or
supplement.

                                       9
<PAGE>

     (b) Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

     (c) Cashless Exercise. Notwithstanding anything to the contrary contained
in this Warrant, other than the terms of the transfer restrictions set forth in
Section 7, this Warrant may be exercised by presentation and surrender of this
Warrant to the Corporation at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which such Holder
would otherwise be entitled by a fraction, the numerator of which shall be the
excess of the then Current Market Price per share of Common Stock over the
Exercise Price, and the denominator of which shall be the then Current Market
Price per share of Common Stock.

   IN WITNESS WHEREOF, the Corporation has caused this Warrant to be signed by
its duly authorized officer.

                                          ITC/\DELTACOM, INC.

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

                                          Dated as of        , 200

                                       10
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                            Dated:        , 200

TO: ITC/\DELTACOM, INC.

   The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase shares of Common Stock covered by such Warrant, and
makes payment herewith in full therefor at the price per share provided by such
Warrant in cash or by certified or official bank check or wire transfer in the
amount of, or by surrender of securities issued by the Corporation (including a
portion of the Warrant) having a market value (in the case of a portion of this
Warrant, determined in accordance with Section 12(c) of the Warrant) equal to,
$     . Please issue a certificate or certificates for such shares of Common
Stock in the name of and pay any cash for any fractional share to:

                                          Name: _______________________________

                                          Address: ____________________________

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

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

                                          Signature: __________________________

                                          Note: The above signature should
                                          correspond exactly with the name on
                                          the face of the within Warrant.

and, if such number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant shall be issued in the name
of such undersigned covering the balance of the shares purchasable thereunder.

                                       11
<PAGE>

                               FORM OF ASSIGNMENT

   FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all
the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

<TABLE>
<CAPTION>
   Name of Assignee                   Address                                     No. of Shares
   ----------------                   -------                                     -------------
<S>                        <C>                                                   <C>

</TABLE>

, and hereby irrevocably constitutes and appoints as agent and attorney-in-fact
to transfer said Warrant on the books of the within-named corporation, with
full power of substitution in the premises.

Dated:        , 200

In the presence of:

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

                                          Name: _______________________________

                                          Signature: __________________________

                                          Title of Signing Officer or Agent
                                          (if any):

                                          Address: ____________________________

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

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

                                          Note: The above signature should
                                          correspond exactly with the name on
                                          the face of the within Warrant.

                                       12

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